Businessmirror november 16, 2017

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Thursday, November 16, 2017 Vol. 13 No. 36

PHL, US set to start talks on trade deal this month

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By Catherine N. Pillas

RODOLFO: “Talks are preliminary; but, the good thing is, they’re now open for an FTA.”

In an interview with reporters at the sidelines of the recently concluded 31st Asean Summit and Related Summits, Trade Undersecretary Ceferino S. Rodolfo said he will be going to Washington to discuss the US-Philippines Trade and Investment Framework Agreement (Tifa). Continued on A2

Farm-sector growth in Q3 dragged down by livestock, fisheries @jearcalas

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he lackluster performance of the livestock and fisheries subsectors slowed the expansion of the country’s farm output in the third quarter, based on the latest data released by the Philippine Statistics Authority (PSA). In its quarterly report, titled “Performance of Philippine Agriculture,” the PSA said farm-production growth in the July-toSeptember period settled at 2.32 percent. In the same period last year, output expanded by nearly 3 percent. From April to June 2017, the farm sector grew 6.18 percent. “Livestock and fishery pulled down agricultural production growth. There was a sharp slowdown in hogs production, the main [livestock] industry. There were also declines in fish catch

SWEET VICTORY Krizziah Lyn Tabora, only the fifth Filipino to capture the Bowling World Cup international crown, arrives in Manila late Tuesday night fresh from her victory in Hermosillo, Mexico. Story on C3. NONIE REYES

Sept remittances post biggest monthly decline since 2003 By Bianca Cuaresma

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@BcuaresmaBM

ash remittances to the country contracted in September, largely on account of lower transfers from Filipino migrant workers in the Middle East, the Bangko Sentral ng Pilipinas

$2.19 billion The total cash remittances from OFWs in September (BSP) reported on Wednesday. Data from the BSP showed the volume of cash sent by overseas

PESO exchange rates n US 51.1420

President Duterte’s lament on globalization Rene E. Ofreneo

LABOREM EXERCENS

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n the recently concluded Asia-Pacific Economic Cooperation Summit in Vietnam, President Duterte addressed a side assembly of overseas Filipino workers (OFWs) working in this fast-growing neighbor of ours. Most of these OFWs happen to be professionals and skilled workers. And yet, in the YouTube documentation of his speech, the President devoted the first 15 minutes of his hourlong speech bemoaning the brain drain that has slowed down the country’s industrial progress. Paano ang mga naiwan? [What now for those left behind?]” was his plaintive question. He elaborated that, the exodus of the country’s best and brightest has stunted the growth of domestic industry and agriculture, including livestock raising. He said that, without these talents, industrial development in the Philippines has been so weak we cannot even produce decent toothpicks.

TRUMP’S TRADE BARBS PUSHING ASIAN NATIONS CLOSER TO CHINA’S ORBIT F

The estimated growth in farm production in July to September, significantly lower than the previous quarter’s 6.18 percent

Continued on A12

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Continued on A11

2.32%

and sma l l gains in seaweeds production,” economist Rolando T. Dy told the BusinessMirror. Dy, who is the executive director of the University of Asia and the Pacific’s Center for Food and Agri Business, had projected that farm output in the third quarter would expand by 3.5 percent. PSA data showed that the livestock subsector, which accounted for 18.37 percent of total output, grew by a mere 0.91 percent. In the third quarter of 2016, the livestock

business news source of the year

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anila is sending a mission to Washington later this month to begin preliminary talks on the US-Philippines freetrade agreement (FTA) that was discussed by President Duterte and his American counterpart Donald J. Trump in their bilateral meeting early this week.

By Jasper Emmanuel Y. Arcalas

2016 ejap journalism awards

Filipino workers (OFWs) shrank by 8.3 percent year-on-year in September. This is the biggest monthly decline in the volume of cash remittances since April 2003, when it contracted by 10.9 percent. Tota l cash remittances, or money that went through banks from Filipino migrant workers

abroad to the Philippines, was still above the $2-billion mark, as it reached $2.19 billion. The BSP said countries that registered the biggest declines in cash remittances in September were Saudi Arabia, followed by Kuwait, Qatar and Australia. See “Remittances,” A2

or years, smaller nations in Asia have looked to the United States to provide a counterweight to an increasingly powerful China. Under US President Donald J. Trump, they are learning to fend for themselves. Trump declared his 11-day swing through Asia a success before heading home on Tuesday, saying that “all countries dealing with us on trade know that the rules have changed.” On each stop, he devoted most of his time to trade deficits, moving away from a US strategy since World War II to enhance economic linkages in Asia as a way of boosting security ties and deterring conflict. The approach is a sharp contrast with former US President Barack Obama, who announced a pivot to Asia backed up by an increased military presence and the Trans-Pacific Partnership (TPP) trade deal. Trump subsequently called for US allies to pay more for security, and immediately withdrew from the TPP. The US’s emphasis on negotiating—and revising—deals that put

“America First” is raising alarms in a region where China is already the top trading partner for most countries. As frictions with the US grow under Trump, smaller countries are searching for new solutions to avoid becoming overly dependent on China for economic gains. That was seen over the weekend when Japan, in particular, pushed to revive the TPP. The 11 remaining members announced a framework agreement on the pact while Trump was in Vietnam defending his decision to shun such multilateral agreements in favor of bilateral deals. “The credibility of the US is going down, so regional actors are trying to do their own things,” said Harsh Pant, a distinguished fellow at the New Delhibased Observer Research Foundation, who has written books about defense policy in the region. “That is now the new normal, where regional states will have to come up with new ideas and new solutions to regional problems, and the US will fit in where it can.” Continued on A12

We’ll lose some time, but I think it’s way too early to say this is the beginning of the long-term decline of the US.”—Gutierrez

n japan 0.4509 n UK 67.3233 n HK 6.5547 n CHINA 7.7061 n singapore 37.6321 n australia 39.0213 n EU 60.3220 n SAUDI arabia 13.6375

Source: BSP (15 November 2017 )

A2 Thursday, November 16, 2017

BMReports BusinessMirror

US, PHL set to start talks on trade deal this month Continued from A1

“We’re going to start preliminary discussions at the end of the month. The visit is to have a bilateral strategic dialogue with them, and a mini-Tifa discussion; so that’s when we’ll start the discussions,” Rodolfo shared. The Office of the United States Trade Representative (USTR) has issued a statement welcoming the Philippines’s interest in a bilateral FTA. Rodolfo said they are taking that opportunity to discuss it further as soon as possible. Garments and textiles will be the main areas of offensive interest for Manila in the proposed FTA, as 75 percent of Philippine products are already entering the US duty free. Aside from garments and textiles, carrageenan, wrist watches and most agricultural products, among others, do not enjoy preferential treatment in the US. Washington, on the other hand, is interested in infrastructure, public utilities and also agriculture. Rodolfo said he will be discussing with his counterpart issues on the FTA talks, including the timeline and scoping sessions. He noted that an inception study undertaken by the Philippine Institute for Development Studies has indicated positive results for a prospective US-Philippines FTA.

Remittances. . . Continued from A1

“For Saudi Arabia, the decline in remittances could partly be the result of the continued repatriation of OFWs under the Saudi Arabian Amnesty Program which started in March,” the BSP said.

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Solon: PHL should help other Asean members craft migrant-worker laws Continued from A12

Market access will be the main benefit of the FTA, as well as the establishment of an investment framework for the US. “Talks are preliminary; but, the good thing is, they’re now open for an FTA,” he added. Rodolfo said they can hopefully conclude the FTA in three years. During their bilateral meeting on Tuesday, Duterte, taking cue from complaints aired by Trump that Japanese-made vehicles are being assessed tariff rates considerably lower than American automobiles in the country, pressed for the forging of an FTA between the Philippines and the US. “President Trump singled out the issue on tariffs being imposed on US automobiles, while these tariffs were not being imposed on Japanese cars,” Presidential Spokesman Harry L. Roque Jr. told reporters in sharing the highlights of the Trump-Duterte meeting that lasted for over 40 minutes on the sidelines of the 31st Associations of Southeast Asian Nations Summit and Related Meetings in Manila. But the Philippine side also took a swipe at Washington for opting to conclude a FTA with Vietnam and Japan ahead of the Philippines, a longtime US ally. “The Philippines expressed a view that they’re appreciative of the general system of preference,

and suggested that free-trade agreements must also be concluded between the US and the Philippines because their FTA is concluded by America with Vietnam and Japan, who have not always been the allies of the US. President Trump said they will study the matter,” Roque said. Trump’s concerns over the preferential treatment being accorded by Manila to vehicles coming from Japan have already been highlighted by the USTR. Currently, the tariff rate imposed on Japanese automobiles is around 20 percent for vehicles with 3-liter engines and zero for those with bigger engines. Data from the USTR show American cars are slapped with higher tariffs. The USTR said the Philippines applies a 30-percent tariff on passenger cars; 20 percent to 30 percent on vehicles for the transport of goods; and 15 percent to 20 percent on vehicles for the transport of persons, depending on vehicle weight. “Asean countries and Japan enjoy preferential import tariffs on new vehicle imports under the Asean free-trade agreement and the Japan-Philippines Economic Partnership Agreement, respectively,” the USTR stated in a document. Aside from the issue on automobile tariffs, Roque said Trump and Duterte also touched on the gaping

disparity in trade numbers between the US and the Philippines, with Manila having the advantage. Trump also ranted over the imbalance in US trade with other countries—including with Japan and China—in his other official visits. This is consistent with his “Make America Great Again” campaign. “They will probably think of a way to reduce the trade surplus between the Philippines and the United States. Well, the deficit because the Philippines, according to the US, has a trade deficit with China, and they will work out something to reduce the deficit of trade between the Philippines and China and, at the same time, improving trade relations with the United States,” Roque said. Data from the Philippine Statistics Authority showed that in the January-to-September period, exports to the US reached $7.0 4 bi l l ion , a 5. 2- percent growth from $6.69 billion in the same period in 2016. Imports from the US, meanwhile, amounted to only $5.15 billion in the January-to-September period, a 7.3-percent decline from $5.55 billion in 2016. On March 11, 2002, US Sen. Richard Lugar presented Senate Bill 2004, which authorized the American president to negotiate and conclude an FTA with the Philippines.

“The receiving state will take necessary actions to prohibit overcharging of placement or recruitment fees chargeable to migrant workers by any parties in the receiving state,” the consensus read. It added the receiving state should also provide migrant workers with access to legal recourse and assistance should they become victims of maltreatment. “The receiving state will facilitate the exercise of consular functions by consular or diplomatic authorities of the sending states when a migrant worker is arrested or committed to prison or custody or detained in any other manner under the laws, regulations and policies of the receiving state and in accordance with the Vienna Convention on Consular Relations of 1963,” the consensus read. Should the migrant worker need be repatriated, the receiving state should protect his or her employment rights during repatriation, including compliance with the applicable repatriation processes of the receiving state. The consensus is President Duterte’s landmark declaration as chairman of the Asean this year. It took the regional bloc 10 years to complete the consensus, as sending and receiving states argued over contentious provisions, such as the proposed inclusion of undocumented migrant workers

The Central Bank also said data from the Department of Foreign Affairs (DFA) showed a total of 8,467 undocumented Filipinos has already availed themselves of the initial offer of repatriation. By worker classification, cash remittances from land-based workers dropped by 11.7 percent, thereby offsetting the 6-percent increase in

transfers from sea-based workers. The BSP also said there are reports that a number of global correspondent banks have closed their service facilities on moneyservice business, reflective of the increasing global trend to reduce correspondent banking relationships and focus more on home market. “This may have partly affected

remittances f lows during the month,” the BSP said in a statement. From January to September, remittance growth slowed to 3.8 percent. Total remittances amounted to $20.8 billion. Cash remittances from land-based reached $16.4 billion, while sea-based workers contributed $4.4 billion to total inflow during the nine-month period.

The government projected a 4-percent growth for remittances this year. Total remittance inflow this year is seen at $27 billion. Singapore-based DBS Bank economist Gundy Cahyadi said for now, remittances appear to be on track to hit the government’s target range, and remain supportive of consumption growth.

in the declaration. According to Belaro, there are about 212,000 Filipino migrant workers in Southeast Asia. “It would surely be better for their welfare if their host countries have migrant protection laws, like the ones the Philippines has: Republic Act [RA] 8042 [Migrant Workers and Overseas Filipinos Act of 1995] and RA 10022 which amended and improved RA 8042,” he said. Belaro, meanwhile, added Congress, for its part, can network with legislators of Asean and present the Philippines’s migrant-worker laws as a model piece of national legislation. Meanwhile, Party-list Rep. Sherwin N. Tugna of Cibac said the signing of the Asean Consensus on the Protection and Promotion of Rights of Migrant Workers is a clear testament on the commitment of member-states in the vision that no one is left behind—especially migrant workers and those from vulnerable and disadvantaged sectors—in the pursuit of a sustainable regional economic growth. “Laborers play an important role in any society, to some they are even considered as the backbone of a country’s economy,” he said. “Particularly in Asean, laborers are no longer defined by the boundaries of their country of origin in their pursuit for economic opportunities, due to the promise of Asean integration.”

Japan vows to strengthen ties with PHL Continued from A12

cooperation, specifically, in addition to supplying the Philippine Coast Guard with patrol and high speed vessels which already are being implemented,” Abe said. Earlier, Abe urged the international community, including the Philippines, to pressure North Korea to stop its nuclear and missile activities. “We have [also] decided on a ¥1-billion grant in aid to install coastal surveillance, radar facilities and signed documents were exchanged in the presence of myself and President Duterte,” he added. He said the Japanese government would provide ¥15 billion to address conflict in Mindanao. “At the EAS [East Asia Summit], we announced that we would provide assistance amounting to approximately ¥15 billion to improve the peace and stability of peace and order in the south of the Philippines and the Sulu and Celebes seas,” he said. With this, Abe said the Japanese government will be able to promote the free and open Indo-Pacific strategy. “We want to make the Indo-Pacific an international public good in order to strengthen the free and open maritime order based on the rule of law, to create an international public good [and] to provide safety and prosperity to all nations,” he said. “For this purpose, we want to enhance cooperation with the Philippines,” he added. The Japanese prime minister visited the Philippines to attend the 31st Asean Summit and Related Meetings held in Manila. Apart from the military ties between Manila and Tokyo, Japan is also the Philippines’s second-largest trading partner. Last year bilateral trade between the Philippines and Japan amounted to $21.552 billion, according to data from the Philippine Statistics Authority (PSA). PSA data also showed that the Philippines posted a surplus of $1.789 billion with Japan in 2016. Philippine exports to Japan amounted to $11.67 billion, while Philippine import payments to Japan reached $9.882 billion.

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Government sticks to Asean summit ‘zero incident’ goal, DILG’s Cuy says

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he head of the security committee for the Association of Southeast Asian Nations summit said on Wednesday that the government will not lower its guard until all delegates and guests have left the country. Interior and Local Government Officer in Charge Undersecretary Catalino S. Cuy, chairman of the Asean Committee on Security, Peace and Order and Emergency Preparedness and Response (CSPOEPR), expressed hope that they would realize their “zero incident” goal for the Asean summit as they have planned. “We remain confident that, until all the delegates and guests shall have departed the country, we will register zero-crime incident because this is the main goal and the very reason we in the CSPOEPR are working 24/7,” Cuy said.
 “But as we are getting closer to the finish line, we should not become complacent. They say that it is when the goal is within one’s reach comes the gravest challenges that will put all of your plans, skills and determination to a test,” he added. Monday’s openingofthesummitwas, by far, the only day marked with clashes between antiriot policemen and protesters in Manila that resulted in 28 lawmen injured and dozens of protesters. The second day and last day of the summit on Wednesday went on smoothly.

We remain confident that, until all the delegates and guests shall have departed the country, we will register zerocrime incident because this is the main goal and the very reason we in the CSPOEPR are working 24/7.” —Cuy

“The second and last day of the Philippines’s hosting of the 31st Asean Summit went by smoothly today [Wednesday],” Cuy said. “We are optimistic that the remaining events for the rest of the day and the other activities tomorrow will turn out perfectly as well,” he added. According to Cuy, there were no disruptions during the two days of the summit, citing the cooperation extended by the public to the government forces tasked to implement security measures.
Rene Acosta

Editor: Vittorio V. Vitug • Thursday, November 16, 2017 A3

Duterte tells Left: Why talk to me if I’m fascist, dictator

Demonstrators protest against US President Donald J. Trump and Philippine President Rodrigo Duterte and the 31st Asean Summit and Related Meetings on Tuesday, in Manila. AP

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By Elijah Felice E. Rosales

@alyasjah

resident Duterte on Tuesday night slammed the Left for challenging him to resume negotiations with the communists, while, at the same time, calling him a fascist and a dictator.

At a news briefing, the President took swipe at activists who staged demonstrations the past days to condemn the visit of United States President Donald J. Trump to the country. He said he cannot comprehend why the Lef t keeps on insisting to resume the peace talks with the National Democratic Front while, at the same time, criticizing his decisions as president. “Look at the propaganda outside [being foisted by the Left]: Duterte, the US, fascist, dictators. And then I said suddenly last week, If I am a dictator, if I am a son of a b_ _ _h, why are you forcing me to talk to you?” Duterte said. “[Again] look [at their] propaganda: Resume peace talks.” “Oh, if you think that I’m a fascist and a killer, why are you talking to me?” Duterte said, adding let the warning stand for others who will try to bargain with him and, yet, attack him for his policies. Negotiations with the communists are currently suspended, following the government’s

withdrawal from the peace talks in May. Although the government panel has expressed optimism the peace talks will soon resume, the President has yet to issue a marching order to his negotiators to return to the negotiating table. L e f t - le a n i n g g roup s h ave staged a series of protests over the past days to condemn Trump’s visit to the country. They have accused the US leader of being a fascist, racist and a bigot for his tough policies against undocumented immigrants and people of color. Trump was in the country for the 31st Asean Summit, which concluded on Tuesday.

Oh, if you think that I’m a fascist and a killer, why are you talking to me?”—Duterte

China offers revised cooperation, development framework with Asean Lawyers set filing of sedition, other By Recto Mercene

criminal charges against Trillanes

@rectomercene

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hina has offered to formulate a China-Asean Strategic Partnership Vision 2030 “and upgrade the ‘2+7’ cooperation framework model into a ‘3+X’ cooperation framework.” “This will be a new cooperation framework underpinned by the three pillars of political and security cooperation, economic cooperation and people-topeople exchange and supported by cooperation in multiple sectors,” Chinese Prime Minister Li Keqiang said at the conclusion of the Association of Southeast Asian Nations summit in Manila on Wednesday. He added there is a need to develop a joint vision for China-Asean relations as they both celebrate the 15th anniversary of China-Asean strategic partnership next year, adding, “It is necessary for us to plan for the mid -and long-term development of our relations.” Li said the vision 2030 should be aligned with the development strategies of both sides and with the 2030 Agenda for Sustainable Development of the United Nations by promoting cooperation on sustainable development. “This will expand the global dimension of ChinaAsean cooperation and build a new paradigm for South-South cooperation,” he said. Li added the two sides should start the drafting and consultation on this new vision as soon as possible to ensure that it can be submitted to the China-Asean summit next year for deliberation and adoption. Li proposed to strengthen the bond of business cooperation, saying its over 1.3 billion people with rising household income, expanding middle-income group and increasingly diversified consumption made China “the most promising growth market in the world.” “In the past five years, the Chinese economy registered an average annual growth of over 7 percent, contributing 30 percent to global growth and also boosting the economies of Asean countries,” he said. Li said in cumulative terms, China’s import from

By Joel R. San Juan @jrsanjuan1573

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Protection right A group of comely home-bound overseas Filipino workers takes a groufie snapshot at the Manila

International Airport, a day after President Duterte and leaders of the Association of Southeast Asian Nations signed the Consensus on the Protection and Promotion of the Rights of Migrant Workers. Asean leaders and participants have identified the protection of migrant workers’ rights as one vital measure to help bring forth a secure and prosperous Asean community. Nonie Reyes

the Asean has surpassed $1 trillion, and its direct investment in the Asean has reached $36 billion in the same period. “This has made China an important export market and source of investment for Asean countries,” he added. According to Li, China will set up a China-Asean Inter-bank Association Special Loan equivalent to RMB 10 billion to support China-Asean cooperation projects. Since China conducts most of its trade through the South China Sea, Li said China looks forward to continue to fully and effectively implement the Declaration on the Conduct of Parties in the South

China Sea and actively advance consultations on the code of conduct (COC). “The COC framework, agreed upon by all relevant parties, represents our common understanding on the main elements of the COC and is an important initial outcome of the COC consultation,” Li said. He emphasized that China wants peace and stability there more than any other country. And its commitment to the upholding peace and stability in the South China Sea will not change, “nor will we change our policy of peacefully resolving disputes over territory and maritime rights and interests through consultation and negotiation with countries directly concerned.”

GROUP of lawyers are set to file inciting to sedition and other criminal charges against Sen. Antonio F. Trillanes IV on Thursday over his speeches and other remarks that “undermined” the government. The lawyers, led by former House members Jacinto Paras and Glenn Chong, announced that they would be filing a complaint against the lawmaker for inciting to sedition, conspiracy to commit coup d’etat and other offenses before the Pasay City prosecutor’s office. The group’s counsel Manuelito Luna said Trillanes should be held liable for such criminal offenses based on statements he made against President Duterte in his privilege speech in the Senate on October 3 and his speech during the launch of the Tindig Pilipinas movement on October 14 involving Duterte’s alleged account deposits. Other complainants include lawyers Nasser Marohomsalic, Nestor Ifurung, Eligio Mallari and Doy Bringas; Bantay Demokrasya and Kilusang Pagbabago-Sulu. Luna said the speeches made by Trillanes, including his privilege speech in the Senate, are not protected by immunity from suits. “The October 3 privilege speech against the President and the government is not protected speech under

the Speech or Debate Clause, in light of the holdings in US v. Brewster and Heltoski v. US. Neither was his speech during the launching of Tindig Pilipinas’s signature gathering against the President nor his media statements is protected,” Luna stressed. In the said privilege speech, Trillanes accused Duterte of having had bank accounts with transactions amounting to over P2 billion from September 2006 to December 2015. The senator also alleged that the administration bought false information from “financial forensic expert” Daniel Cruz involving his supposed offshore accounts in a bank in Singapore for P10 million to destroy his credibility. In his speech during the Tindig Pilipinas launch, Trillanes announced several details of the supposed bank deposits of the President. He claimed that one of the alleged accounts had deposits of P50 million at least 13 times. The lawmaker also said that, in another bank account, there were at least 20 deposits of P40 million to P50 million each. Trillanes further insinuated that Duterte bought in just one day insurance for his four children worth P80 million. Luna said that the senator’s acts of rumor-mongering and spreading false information were unlawful and tantamount to such criminal offenses that are punishable under the law.

Economy

A4 Thursday, November 16, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

PSA revises Q2 ‘17 GDP figures

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By Cai U. Ordinario

@cuo_bm

he country’s GDP fared better than initially expected in the second quarter of the year, according to the Philippine Statistics Authority (PSA). Data showed second-quarter GDP increased to 6.7 percent in the second quarter, from the initial estimate of 6.5 percent. The PSA said this was largely due to the improved performance of three services and industry sectors. “The top 3 contributors to the upward revision were: financial intermediation; construction; and real estate, renting and busi-

ness activities [Rerba],” the PSA said. The growth estimate for financial intermediation increased to 7.1 percent from the initial 6.3 percent; construction, 9.1 percent from 6.1 percent; and Rerba, 8.3 percent from 7.9 percent. The new estimates for construction and Rerba, however, were still lower than the 13.5 percent and 8.8

percent in 2016, respectively. The new estimate for financial intermediation, meanwhile, was an improvement compared to the growth of 6.9 percent in 2016. “For finance due to upward revisions on banking and nonbanking like foreign-exchange transactions, investment houses, [and others],” PSA Assistant National Statistician Vivian R. Illarina told the BusinessMirror on Wednesday. “For construction, [the] upward revision due to higher reports on additional residential and nonresidential [such as buildings and roads] as reported by building permits reported by local government units and compiled by PSA,” she added. Illarina also said upward revisions for Rerba were due to higher reports of establishments engaged in business activities

6.5% to 6.7% The PSA’s growth adjustment for the second quarter of the year which are nonbusiness-process outsourcing firms like accounting, payroll and auditing activities, among others. Meanwhile, the PSA also said the net primary income from the rest of the world was revised downward 7 percent, from 8.6 percent. Gross national income was maintained at 6.8 percent. The PSA revises the GDP estimates based on an approved revision policy that is consistent with international standard practices on national accounts revisions.

Energy dept, Rosatom ink pact on nuclear energy development By Lenie Lectura

@llectura

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he Department of Energy (DOE) and the Russian Federation State Atomic Energy Corp. (Rosatom) have inked a cooperation deal aimed at exploring the development of nuclear energy in the country. “The cooperation with Russia is part of the government’s intention to develop a variety of applications of nuclear energy that are within our policies, particularly for power generation,” Energy Secretary Alfonso G. Cusi said. The parties signed a memorandum of cooperation (MOC) on November 13 during the 12th East Asia Summit held in Manila.
 
 “Through this MOC, we can tap the significant experience of Russia in harnessing nuclear energy and the emerging technologies related to it for peaceful purposes that are safe and secure,” Cusi said. 
 The cooperation will be implemented in the form of joint working groups that will undertake specific projects and tasks; exchange of experts; workshops; training and education of personnel; and sharing of technical information. 
 The MOC will run for five years and is renewable for the same period, unless one notifies the other in writing through diplomatic channels of its intention to suspend or terminate the same. 
 Cusi said the undertakings in the MOC would support the Philippines in coming up with a national position and the crafting of a nuclear-energy policy that may lead to a nuclearenergy program. 
 The Philippines and Russian Federation will cooperate in several areas under the agreement.
 These include the following: Nuclear infrastructure studies toward national energy-policy development and nuclear energyprogram implementation in the Philippines; 
 Audit and assessment of the Bataan Nuclear Power Plant’s technical condition, including the option of its rehabilitation; and 
 Feasibility studies on construction in the Philippines of small modular nuclear-power plants, onshore or offshore, but not limited to analysis of technical, commercial, financial and legal aspects.
 
 Both may also carry out similar studies on nuclear power plants in general as may be deemed necessary and consistent with national energy-development plans and policies of the Philippines. 
 The Philippines and the Russian Federation are members of the International Atomic Energy Agency and are parties to the Treaty on the Non-Proliferation of Nuclear Weapons of July 1, 1968.

Money for nothing

A father and son team oversees the operation of a sidewalk business outfit at the Binondo district in Manila that sells wads of play money and dark-red colored envelopes ahead of the Christmas gift-giving season. Nonie Reyes

Senate set to wrap up budget-bill debates

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he Senate, sticking to Congress’s timetable to pass the P3.7-trillion 2018 budget bill before adjourning anew for the upcoming Christmas recess, is looking to wind up plenary interpellations on the money measure within the week. “Budget interpellations should be finished by Friday,” Senate President Aquilino L. Pimentel III said in a viber message to reporters. “Then, from Monday to Wednesday next week, we finish the budget itself.” After the budget bill, the Senate

President said senators are expected to next tackle pending revenueraising measure, also known as the Tax Reform for Acceleration and Inclusion, or TRAIN bill, targeting to collect P148-billion in additional revenue to bankroll the Duterte administration’s “Build, Build, Build” projects. Under it’s approved calendar of session, senators are scheduled to reconvene for plenary duties from November 13 to December 15, before the Senate adjourns anew for the traditional year-end

PIMENTEL: “Budget interpellations should be finished by Friday. Then, from Monday to Wednesday next week, we finish the budget itself.”

Christmas recess, from December 16 to January 14,2018. Butch Fernandez

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Cimatu taps private-sector support for Metro water alternative sources By Jonathan L. Mayuga @jonlmayuga

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HE government is banking on private-sector support to address urgent issues on water security starting with the rehabilitation of potential alternative sources of water. Environment Secretary Roy A. Cimatu recently met with officials of various government agencies with mandates over water supply and the Water Alliance, a multisectoral movement spearheaded by the Philippine Business for Social Progress (PBSP), where he expressed concern over a potential water-security problems, and called for greater public- and private-sector collaboration. Cimatu wants the Water Alliance to lead private-sector efforts that will boost government initiatives to prevent a looming water crisis. The environment chief said 90 percent of the potable water in greater Metro Manila comes from the Angat Dam in Norzagaray, Bulacan, which lies on top of the West Valley Fault. Cimatu expressed concern that, in the event of a strong earthquake, the dam could be completely destroyed. He added the present and future generations of Filipinos stand to benefit from the water-security initiatives, such as finding alternative sources, although he admitted that it will be a big challenge. “We want to imprint something [about] water—Manila Bay, Laguna Lake and Pasig River. If we will be able to fix it [alternative water sources], this will be for the next generation. We may not be able to do everything, but we will do what we can,” he said. The environment chief is also concerned of the poor water quality of Manila Bay, Laguna Lake and various river tributaries of the Pasig River because of the indiscriminate dumping of garbage and untreated wastewater. To address the problem, an Executive Order (EO) was crafted expanding the work on the rehabilitation, involving agencies not covered by the mandamus and removing obstacles posed by agencies, including local government units. Convening a multiagency meeting involving officials and representatives of the National Water Resources Board, Manila Bay Coordinating Office, Pasig River Rehabilitation Commission, Environment Management Bureau, River Basin Coordinating Office, Laguna Lake Development Authority and the PBSP Water Alliance, Cimatu underscored the urgent need to solve the potential water problem in an integrated manner and find ways to hasten its implementation. Environment Undersecretary Maria Paz G. Luna, designated official for the Manila Bay Concerns and Related Water Concerns, meanwhile, urged to turn the crisis into an opportunity. She urged resource mobilization to address “intractable problems” in an innovative and enterprising way. Luna revealed there is a limitation in the Operational Plan for Manila Bay Coastal Strategy (OPMBCS) because it involves

only 13 mandamus agencies. With the plan, there is no clear indication that, by 2022, OPMBCS will be able to deliver the target of Class SB water, thus the need to engage all relevant sectors, such as the private sector, civil society and academe. Class SB for saltwater means the water is safe for swimming, bathing and other recreational activities. “If we wait 15 years, the cost of sewage rehabilitation will be 85 percent to 96 percent higher than if we do it earlier. We are trying to solve a problem without knowing the baseline. We are operating with decades-old data, with less money than we need, with a hobbled enforcement platform. These are the challenges that impede our achievement of the desired outcomes,” Luna said. The common strategic framework will be a multisectoral rapidrehab plan that will integrate the current plans of agencies, as well as inputs from the Water Alliance, academe and civil society. Its goals are to drastically reduce domestic sewage reaching the bay; reach a critical mass in solid-waste management; reach a critical mass in industrial and commercial wastewater management and form effective institutional partnerships. The Water Alliance, for its part, has been tapped to coorganize with the Department of Environment and Natural Resources (DENR) a stakeholder’s forum in January to help in the creation of a common framework and assist the department in the development of a research agenda on the three water bodies. The DENR, for its part, established the Manila Bay Rehabilitation and Conservation Enterprise for all sectors to participate in the development of the framework; to hold a Science Congress that will result in the creation of the research agenda and to identify and share technological solutions. PBSP Executive Director Reynaldo Antonio Laguda said the private sector is up to the challenge. He committed to rallying members to raise funds for projects, as well as provide an opportunity for companies to help in the behavioral change. The Water Alliance, he added, will circulate the EO as part of the consultation process and support to these goals. The Water Alliance is working on four action areas: providing water for waterless communities, water-footprint reduction, governance and policy reform and research and database mining. It is composed of 60 members that include First Philippine Holdings, Aboitiz Group, Shell, Coca-Cola, Pepsi Cola, Smart/PLDT, San Miguel, Maynilad, Manila Water, World Wide Fund for Nature, Oxfam, University of the Philippines, Ateneo de Manila University and De La Salle University. “The Water Alliance seeks to help address the issue of water security by being a platform for synergy of multisector efforts; leveraging use of technologies, expertise and resources from business and its members from civil society and academe; and bringing to fore the importance of water as a scarce resource in communities,” Laguda said.

ADB, WEF: 4IR may require drastic increase in Asean budget spending

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oping with the disruptions of the Fourth Industrial Revolution (4IR) will require the Association of Southeast Asian Nations to raise its budget by a thousand percent annually, according to the Asian Development Bank (ADB) and World Economic Forum (WEF). In a white paper, the ADB and WEF said Asean’s annual budget must increase to $220 million by 2030, from the current $20 million. The paper stated the current budget will not be enough to address the technological disruptions and possible job cuts brought about by the 4IR.

“The current funding level of roughly $20 million a year is not enough. ADB estimates that, by 2030, the Asean Secretariat will need an annual budget of $220 million to manage the Asean Community effectively,” the ADB and WEF said. “This estimate is based on different calculations that would be relevant for the platform model. However, it is clear that sufficient funding for the Asean Secretariat as a platform organization would be much larger than at present,” they added. This means members, like the Philippines, must also increase their

contributions to the Asean. Currently, each Asean member-state contributes equally to the organization, particularly for the Asean Development Fund (ADF). However, the same white paper estimates that if the United Nations contribution formula is used, Singapore will need to increase its share to $56.78 million annually. Based on a resolution adopted by the general assembly on December 23, 2015, the formula to compute member’s contribution to the UN includes a member’s gross national income, prevailing market exchange rates and level of indebtedness, among others.

The UN’s formula provides that Singapore’s contribution is 0.447 percent of the total contribution, while the Philippines provides 0.165 percent of the total between 2016 and 2018. The lowest assessment is 0.001 percent for countries like Bhutan, Burundi, Comoros, Djibouti and others. Least-developed countries, such as Equatorial Guinea, Ethiopia and Myanmar, among others extended an average of 0.01 percent of the total. The maximum assessment is 22 percent, which is the share of the United States, followed by Japan with 9.68 percent; China, 7.921 percent;

Germany, 6.389 percent; France, 4.859 percent; and the United Kingdom of Great Britain and Northern Ireland, 4.463 percent. “Given the role that the Asean organization plays in ensuring long-term security and prosperity, this might be money well spent. It is also worth noting that, for specialized vehicles, such as the Asean Infrastructure Fund, the nations of the Asean are already practicing the principle of making differential contributions, albeit in the form of capital contributions rather than recurrent expenditures,” ADB and WEF said. Cai U. Ordinario

www.businessmirror.com.ph

Banking&Finance BusinessMirror

Editor: Jun B. Vallecera • Thursday, November 16, 2017

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Fintech firm recasts digital-currency proposal

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he enterprise software services and financial technology or fintech firm Appsolutely is confident of getting its business model approved by the Bangko Sentral ng Pilipinas (BSP) when it presents a revised framework to engage in digital coin transactions using so-called blockchain technology as early as next month, executives said. Such a license is 1 of 7 thus far submitted for approval by the seven-man Monetary Board of the BSP and likely the fourth to receive the green light. “We have a revised business model and looking to have it approved by the Bangko Sentral when we present it early in December,” Appsolutely founder, president and CEO Patrick Paul Palacios said at a news briefing. He said the monetary authorities wanted more clarity as to how the blockchain technology would be used and how the basically cashoriented Filipino consumer may be best protected against fraud and similar issuers down the line. Appsolutely has its own digital currency called the loyalcoin that consumers accumulate via a customer-loyalty program. The

business claims leadership in the area since 2013. Palacios said a license to engage in digital currency in the Philippines forms part of the larger goal of expanding its blockchain services across Southeast Asia. It was for this reason that Appsolutely recently partnered w ith peer-to-peer blockchain platform developer NEM Foundation and the absorption of some NEM executives to the business advisory board to strengthen the relationship. “NEM’s proof-of-importance algorithm enables a merchant using loyalcoin to monitor consumers who have made the most number of transactions and assign specific rewards to them,” the company said in a statement that also partly explained how the business

would work. Palacios said the NEM blockchain operates at 4,000 transactions per second that he claimed is an industry-leading speed they plan to leverage for transactions involving loyalcoin. The blockchain extends to Appsolutely the flexibility to retain control over aspects of the transaction process for which protection of customer data and privacy is top priority. Palacios also said the partnership with NEM paves the way for the establishment of the Appsolutely-NEM Blockchain Center scheduled to operate within the first three months next year, the first of an anticipated series of blockchain laboratories across Southeast Asia seen boosting future blockchain projects in the region. “This partnership builds upon our strength in widening the adoption of secure blockchain technology among key target industries in Southeeast Asia. With NEM in our advisory board, we will be more than capable to open new horizons with our merchant partners and their customers,” Palacios said. “Key to NEM’s strategy in this region is Appsolutely’s ability to target the e-commerce space, which is seeing a huge uptick, especially with more consumers becoming more mobile and becoming more aware of their privileges,” said Emerson Fonseca, head of NEM Philippines. Jun B. Vallecera

Moody’s rates UnionBank a ‘Baa2’

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he global credit watcher Moody’s Investors Service merited UnionBank with a positive assessment and assigned the lender a favorable credit rating for its performance. In a statement, Moody’s assigned a “Baa2” rating to the bank’s long-term local and foreign currency IOUs along with a stable outlook. Moody’s also extended a “Baa3” assessment on its baseline credit as a reflection the bank’s strong profitability

and return on assets. “UnionBank’s ‘Baa3’ baseline credit assessment [BCA] reflects the bank’s above-industry average core profitability which is supported by its growing lending operations, in particular, its higher-yielding retail business and its superior cost efficiency relative to its domestic peers,” Moody’s said. “In addition, the bank’s BCA incorporates its adequate capital generation and track record of

strong support from key shareholders,” it added. It also said UnionBank’s strong profitability supported the bank’s rapid business growth in recent years, without a material decline in its capital levels. “Given management’s intention to pursue a more moderate pace of loan growth in 2018, Moody’s expects that the bank’s internal capital generation will be largely sufficient to support business growth,” Moody’s said. Bianca Cuaresma

What is an association?

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uite often in my “elevator pitches” of promoting and enlisting support for the advocacy of the “association of associations” that I lead and founded, the Philippine Council of Associations and Association Executives (PCAAE), I usually get a reply from a prospective member or supporter that his or her organization is not an association per se. This triggers a bit of discussion about what an association really is. There are many definitions of an association. The best I could find is that of the American Society of Association Executives (Asae), of which I am a member, which defines an association “as an organization or group of individuals affiliated with one another, who share a common purpose, interest, or mission, and exist for the mutual enrichment and advancement of their membership.” This definition augurs well with the Latin word associare, which means “to unite or ally,” or the mid-16th century Latin word associatio which means “uniting in a common purpose.” Armed with this knowledge of the etymology of the word “association,” I now have an explanation when asked whether his or her organization, which may be a chamber of commerce and industry, a professional society, a membership club, a cooperative, a federation, a nongovernment organization, or a nonprofit organization, can be a member or supporter of the PCAAE. Here are the common explanations: “It is not the word association appended to your organizational name that determines whether it is an association or not. For as long as your organization has members whom you provide services [education, research, networking, etc.], advocate for their cause, or simply have common interest, then you are considered as an ‘association’ in a general sense of the word. It is also the conventional term that membership-serving organizations around the world use.” In North America you have the Asae and the Canadian Society of Association Executives. In Europe you have the European Society of Association Executives. In Africa the African Society of Association Executives. In our region you have the Asia-Pacific Federation of Association Organiza-

Association World Octavio Peralta tions whose members are PCAAE, the Korean Society of Association Executives, the Associations Forum (Australia) and the Australasian Society of Association Executives (Australia and New Zealand). Recently, the Malaysian Society of Association Executives was launched. Note that all these organizations have the word “association” attached to their names despite having varied members which I have enumerated above—chambers, societies, and even charitable/philanthropic organizations and foundations. The word “association” is a generic term for individuals (like professional societies—doctors, nurses, engineers, lawyers, accountants, credit/ financial analysts, real estate/stock brokers, etc.) or institutions (trade, chamber of commerce and industry, foundations, advocacy groups, etc.) and “hybrids” (with both individual and institutional members) “uniting together for a common purpose.” I believe all these associations have common issues, challenges, solutions and opportunities, and this is what the PCAAE aims to achieve: to unite associations so they can learn together, work together, grow together, celebrate together and be stronger together. The column contributor, Octavio “Bobby” Peralta, is concurrently the secretary-general of the Association of Development Financing Institutions in Asia and the Pacific and the CEO and founder of the PCAAE. The PCAAE is holding the Associations Summit 5 and the Ang Susi Awards 2017 on November 22 and 23 at the Philippine International Convention Center. E-mail inquiries@adfiap.org for more details.

Dominguez looking into unauthorized GOCC bonuses

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he five-man Governance Commission for GovernmentOwned and -Controlled Corporations (GCG) Board will further look into the granting of unauthorized bonuses and allowances to eight GOCCs in 2016 totaling P620 million and disallowed by the Commission on Audit (COA), according to the Department of Finance. Finance Secretary Carlos G. Dominguez III, ex-officio member of the GCG, said he finds it highly irregular that some GOCCs granted unauthorized bonuses even though other agencies have not had their own bonuses. “Definitely, the GOCC [board] will look into this very carefully,” Dominguez told financial reporters. Based on the 2016 COA annual report on GOCCs released last month, the Philippine Charity Sweepstakes Office (PCSO) extended P518 million in unauthorized allowance and bonuses to its employees and officials. Such other agencies as the Subic Bay Metropolitan Authority have not had their bonuses for 2015 and 2016, for instance. According to the COA, eight GOCCs released unauthorized bonuses in 2016 amounting to P620 million, especially the PCSO, which paid out a total of P518 million. State auditors said the agencies granted perks to officials and employees without “sufficient legal basis.”

Aside from the PCSO, the Small Business Corporation also released P46.448 million in unauthorized allowances and bonuses as did the National Electrification Administration with P23.683 million; the Philippine Coconut Authority which released P11.475 million; the National Food Authority, with P10.097 million; Apo Production Unit Inc. with P7.45 million; the Human Settlements Development Corp. with P2.085 million; and the Intercontinental Broadcasting Corp. amounting to P219,000. The COA has directed the GOCCs to secure approval from the GCG on the unauthorized compensation grants, as well as to justify why the payment of incentives should not be disallowed. Based on the COA’s 2015 annual financial report, the PCSO topped the list of agencies with unauthorized releases of P429.82 million. This was 20.5 percent higher than in 2015 when releases totaled P518 million. Eight GOCCs and 55 water districts released unauthorized bonuses amounting to P727.7 million for the year. In 2014 the COA ordered 28 GOCCs to return unauthorized allowances amounting to P626.119 million, with the biggest given out by the Philippine Economic Zone Authority (Peza). The Peza released a total P213.84 million in bonuses

and benefits that year. Last week the Senate said the first major review since the passage of the law mandating comprehensive and regular checks on the operations of GOCCs commenced. As Congress reconvenes now that the Association of Southeast Asian Nations summit is out of the way, the Senate will conduct an inquiry as to how well Republic Act (RA) 10149, or the GOCC Governance Act of 2011, has given guidance to the state corporations, and provide proper sanctions for violators. “Upon the determination and report of the COA that properties or monies belonging to the GOCC are in the possession of a member of the board or officer without authority, or that profits are earned by the member of the board or officer in violation of the fiduciary duty, or the aggregate per diems, allowances and incentives received in a particular year are in excess of the limits provided under the Act, the member of the board or officer, receiving such properties or monies, shall return the same to the GOCC,” RA 10149 said. According to Sen. Grace Poe, the P620 million could have been used to supplement worthwhile government programs, such as additional capital outlay for 60 public hospitals, subsidy for the public-utility vehicles modernization project, or additional funding for feeding programs. Rea Cu

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Thursday, November 16, 2017

Asean banks’ long road to regional fi

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By Bianca Cuaresma

HE Philippine banking industry is recognized as having one of the world’s most resilient banking systems, having withstood old and recent volatilities. Nevertheless, monetary authorities are leaving no stone unturned for local lenders as a laundry list of regulatory reforms awaits banks meant to enhance their competitiveness in the regional market. While the country moves as part of the regional initiative to advance regional financial sector integration—more popularly known as the Association of South East Asian Nations (Asean) Banking Integration Framework (ABIF)—the Philippines’ Central Bank is looking to implement a long list of policy-reform agenda to ensure local banks would have enough strength to compete with their regional counterparts. The Asean’s vision for the financial integration seeks to achieve a well-harmonized and smoothly functional financial system by 2025, characterized by more liberalized capital account regimes and interlinked capital markets. Part of this financial integration vision is the ABIF, or the framework agreed among the Asean member-states to facilitate the entry and operation of Qualified Asean Banks in other Asean countries to promote equal access and treatment among banks, thereby facilitating the expansion of intraregional trade.

Competitive edge

ONE of the first moves of the Philippine government to support the ABIF was the foreign bank entry liberalization to the country, as passed in 2014. The law allowed the entry and operation of foreign banks in the Philippines. However, competing with the big guns in the region proves to be a challenge for Philippine banks—particularly with the size of assets. For example, Singapore’s DBS Bank has around $334 billion in total assets in end-2016. The Philippines’ biggest bank in terms of assets, BDO Unibank, only has around $47 billion in total assets in the same time period. This is only about 14 percent of Singapore’s largest bank. Thus, the Bangko Sentral ng Pilipinas (BSP) seeks to ensure the Philippine banks’ competitive edge against Asean banks by beefing up their resiliency and laying the groundwork for international best practices within the local banking stream. “To prepare Philippine banks for competition in a regional system, the BSP has developed a comprehensive policy-reform agenda that aims to strengthen the domestic financial system, help manage risks attendant to financial market developments, strengthen banks’ competitiveness and provide a regulatory environment that is on a par with international standards and best practices, at the same time responsive to the needs of the domestic economy,” BSP Deputy Governor for the Supervision and Examination Sector Chuchi Fonacier told the BusinessMirror. Fonacier further explained the BSP’s comprehensive reform agenda for the local banking system—ranging from its increased regulatory oversight on banks’ corporate governance to regular information exchange and policy dialogue with international counterparts.

Corporate governance

FOR corporate governance, the Central Bank adopted a threephased governance reform pro-

gram for supervised financial institutions. The program puts emphasis on the overall corporate governance framework, fit and proper requirements and responsibilities of the banks’ board of directors and senior management. The Central Bank also issued regulations in an effort to liberalize further the lending sector, as well as to promote a competitive banking environment starting here in the country. The BSP undertook phased lifting of the moratorium on the grant of new banking licenses or establishment of new banks. The BSP also liberalized branching guidelines in pursuit of microfinance and financial inclusion advocacy. These measures allow banks to establish extension offices, other banking offices and micro-banking offices to broaden delivery of banking services. “The BSP also continues to proactively engage Asean partners and fellow supervisors in various international, regional and bilateral forums on various facets,” Fonacier said.

Risk management

THESE regulations include the enhancement of working relationships and collaboration among Asean regulators, financial institutions and the private sector. To show its commitment to the Asean banking integration efforts, the deputy governor said the BSP also took up the co-chairmanships of strategic Asean committees, such as the Senior Level Committee on Asean Financial Integration. Risk management guidelines and the Basel III reform agenda were also implemented to ensure that Philippine banks are up to date with international standards and best practices. “We have updated risk management standards across functional supervisory areas, such as credit, related party transactions, liquidity, operations, compliance and internal audit, as well as bank protection or security risk,” Fonacier told the BusinessMirror. “With the increasing cybersecurity threats and attacks, we are also formulating a cyber-security management framework and building expertise of BSP supervisors on this area,” the deputy governor added. Supervisory meetings involving cross-border banks are also actively being participated in by the BSP in an effort to engage its counterparts, Fonacier said.

Current status

EFFORTS of the local regulator have not been without fruits, as international credit watcher Fitch Ratings earlier deemed the Philippines as one of the countries that are ahead of the pack in terms of the progress toward regional banking integration. On a regional scale, however, Fitch said full financial integration remains somewhat distant in the near term as initiatives from different jurisdictions in the bloc have been uneven and slow, with further moves projected to remain at a gradual pace. “The Philippines has taken

ASEAN leaders attend the opening session of the 20th Asean Japan Summit at the Philippine International Convention Center in Manila on Monday. ATHIT PERAWONGMETHA/POOL PHOTO VIA AP

the biggest steps toward bankingsector liberalization, removing the cap on foreign ownership of banks in 2014,” Fitch said in its report earlier this year, entitled “Asean Making Slow, Uneven Progress on Banking Integration”. “The larger Philippine banks have sufficient access to capital and have little immediate need to sell major stakes to foreign investors, but foreign banks have established their own subsidiaries and branches in the country,” the credit watcher further said. “Entry by foreign banks is likely to support investment and economic growth in the near term by helping to fund much-needed infrastructure investment.” The Asean banking integration framework, endorsed in December 2014, envisions qualified Asean banks being eventually allowed to operate freely in the region.

On track

BUT as the Asean member-states recognize that some banking systems are more ready to open up than others, the framework provides for a more phased-in and flexible path toward its vision. The ABIF’s timeline requires that the Asean-5 countries—which include the Philippines, as well as Indonesia, Malaysia, Singapore and Thailand—should each have at least one bilateral ABIF agreement in place by 2018 that allows selected banks access to each other’s market.

All Asean countries should have one deal near completion by 2020. Fonacier said the Philippines is very well on track with its ABIF commitments. In particular, the BSP and Bank Negara Malaysia signed in April this year the Declaration of Conclusion of Negotiations on the entry of Qualified Asean Banks between the two countries. “The ABIF agreement with BNM is undergoing the required legal and diplomatic processes prior to implementation,” Fonacier said. The BSP also signed this year with Bank of Thailand (BOT) a letter of intent (LOI) to begin bilateral ABIF discussions. About a month after the Central Bank’s agreement with Thailand, the BSP and Indonesia’s Otoritas Jasa Keuangan (OJK), or Financial Services Authority, also signed an LOI to formally start ABIF negotiations in a ceremony held in Jakarta, Indonesia.

More banks

FONACIER said the BSP is expected to complete bilateral discussions between Thailand and Indonesia next year. While talks are still ongoing with BSP and several of its counterpart central banks in the region, various financial institutions have already displayed strong interest to operate and put up branches in the country, on the back of the Philippines’ strong economic fun-

damentals, among others. Most recent of these include a Malaysian lender, which has applied for an application to put up a branch in the Philippines. The approval of the application is expected to be released by the BSP before the year ends. Fonacier also said an Indonesian bank is also among those who expressed interest in penetrating the local banking stream. Six other banks whose origins are not Asean are also looking to operate in the Philippines, including Swiss bank Credit Suisse. Two of the six interested banks are based in Taiwan, two are from China and one is from South Korea. Credit Suisse is looking to establish its first representative office in the Philippines, after getting the green light from the Central Bank possibly this year.

Other deals

WHILE the six banks have yet to formally submit their application to the BSP, Fonacier said all look forward to putting up a branch, except for one Taiwanese bank interested in putting up an offshore banking unit. One other Korean bank is partnering with a local bank by buying equity. The State Bank of India was the latest foreign bank allowed to gain entry. Low volume of activities, however, later forced its managers to stop operations.

Also earlier this year, then Central Bank governor Amando Tetangco Jr. said the BSP is looking to start talks with its Singaporean counterpart “maybe over the next few months” with regard to their ABIF stance. Should the BSP become successful in touching base with Singapore, the Philippines will be then completing its progress with all the members of the Asean-5 economic bloc, following the completed negotiations with Malaysia and the on-going negotiations with Thailand and Indonesia.

Early benefits

WHILE the thought of a regionally integrated banking system and the entry of foreign banks in the country may have raised early concerns, the foreign players have been beneficial to the country’s economy since the accelerated entry in 2014, according to the BSP. Fonacier said foreign banks in the Philippines have attracted foreign direct investments (FDIs) and served as channels for the flow of funds and investments into the economy. In particular, for example, Fonacier said foreign banks facilitated financial transactions amounting to $15.7 billion between the Philippines and other countries, such as the United States, Japan, China and Thailand. A rise in FDIs in the country is seen beneficial to the local econo-

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financial integration begins at home PHL leverages RCEP for more elbow room in regional trade

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HE Philippines is leveraging the Regional Comprehensive Economic Partnership (RCEP) in pushing for the reduction of tariffs and nontariff measures (NTMs) within the participating countries to boost the country’s farm exports. Agriculture Undersecretary Segfredo R. Serrano told the BusinessMirror that the Philippines will push for the reduction of tariffs and NTMs that prejudice the country’s farm exports. However, Serrano added that the Philippines will keep its own tariff lines and NTMs to protect the country’s sensitive farm products from unfair global trade. “It is natural for us that we will seek tariff cuts on our offensive interests, but we will reject tariff cuts on the products that we are defensive,” he said. “The same applies to nontariff measures. Why would we reduce the nontariff measures that protect us? But we will argue that they should remove their nontariff measures that prejudice our exports,” he added. The agriculture official explained that the forging of RCEP will benefit the country’s farm sector in terms of trade as the Philippines seeks to source cheaper imports of raw materials while increasing its export markets. “[RCEP] would benefit us in terms of trade. More market penetration [for exports] and maybe cheaper raw materials for our industries,” Serrano said. “You must look at the whole value chain, the whole macroeconomy,” Serrano added. “It is also important for us that the raw materials sourced by our industries are cheap, so that our consumers enjoy cheaper products and we are able to export competitive products.” Serrano said the RCEP should not conclude in such a way that it will be detrimental to the interests of Filipino farmers. “At the same time, it is important for us to see that the agreement does not unnecessarily prejudice our domestic producers,” he said. Dr. Rolando T. Dy, executive director of the University of Asia and the Pacific’s Center for Food and Agri Busi-

my in terms of going on a par with its peer countries in Asean, as the Philippines has been known to be a laggard in attracting FDIs. In particular, in 2015, the Philippines had the lowest volume of FDIs as compared to its counterparts in the Asean-5 bloc—with Singapore leading at $65.33 billion FDIs of the year. This is followed by Indonesia with $20.22 billion, Malaysia with $10.96 billion, and Thailand with $9 billion. The Philippines’ FDI total in 2015 was at $5.84 billion.

Quantifiable increases

THE entry of foreign banks promotes more FDIs, in addition to their own investments, by attracting their business customers in their home countries to come and do business in the Philippines. Aside from investments, the deputy governor also said foreign banks in the country have produced quantifiable increases in employment numbers, thus helping the country in its drive for poverty alleviation and investment in human resources. As of end-2015, data from the BSP said foreign banks employed a total of 7,088 personnel, 6,959 of which, or 98.2 percent, were Filipinos. Fonacier also lauded the foreign banks’ heavy investment on training and seminars on the latest developments and trends in banking as a

means to boost the competitive advantage of their workforce. Foreign banks, the deputy governor said, also contributed to the offering of a wider array of financial products and enhanced delivery of financial services by capitalizing on and enhancing existing banking technology and support systems for banks’ front and backroom operations, thus resulting in higher customer satisfaction. International credit watcher Fitch Ratings also earlier said the influx of more banks will help improve the overall system of the banking industry in the Philippines. “We believe the entry of wellmanaged foreign banks expands the system’s capacity to fund growing trade and investment needs, and enables potential knowledge transfer in areas such as risk management, project finance and systems,” Fitch Ratings said in a report.

Following suit

CENTRAL Bank Gov. Nestor Espenilla Jr. also said foreign banks’ entry to the Philippines makes local banks “work harder” to improve their services. “The new players also bring healthy competition that makes our incumbent domestic banks work harder, innovate, improve their services and lower prices,” Espenilla said earlier. “These resources [that the foreign players are expected to bring

to the country] are not just funding but also managerial, technology, product innovations and market connections. These help a lot because the country remains underbanked,” the governor said. On the other hand, however, local banks are not yet very keen on putting up branches in other Asean jurisdictions. “The BSP is aware that Philippine banks are considering regional expansion. BDO, for example, has opened a representative office in Singapore as a means to ‘test the market’,” Fonacier said. “Expansion of banking operations to peer countries is a business decision which shall depend on the banks’ strategic objectives, business model and operational capacity,” the deputy governor said. “The BSP is committed to laying the groundwork that will enable banks to expand if they wish to do so.” Espenilla earlier said local banks are most likely waiting for Philippine companies to entrench their roots in other countries in the region before following suit. “For me, typically the motivator there, for a Philippine bank to go into Asean—the same way as foreign banks coming here—is following Philippine businesses going abroad,” the BSP governor said. “We’re already having more regional multinationals. If those are moving out, they may be following those businesses.”

ness, told the BusinessMirror that the Philippines should push for the review of some of the nontariff barriers (NTBs) that affect the country’s farm exports. “Australia must revisit its NTBs on bananas, mango and pineapples,” he said. “Japan must reduce tariffs on Philippine bananas. It offered duty-free access already to several countries, albeit at lower quantities,” he added. Cabinet officials of the Duterte administration have been pressing Canberra to allow the entry of bananas from Manila. They have been also vocal in pushing for the reduction of tariffs slapped by Tokyo on the country’s banana exports. However, Dy noted that the Philippine farm sector must focus on expanding and diversifying its productive capacity in order to capitalize the expansion of markets under RCEP. He added that the country should also protect its farm commodities sensitive to global trade. “The threat to rice is already Asean exporters plus India. Tariffs of 35 percent to 40 percent will protect local farmers provided [the Philippines] reduces costs through mechanization,” he added. Roehlano M. Briones, Philippine Institute for Development Studies senior research fellow, echoed Serrano and Dy’s remarks adding that the Philippines should in fact push for a zero tariff on our exports and a more predictable NTMs among participating countries. However, Briones noted that this would only be possible if the Philippines is willing to give up its own protective measures. “On the other hand, we should also bring down our trade barriers,” Briones told the BusinessMirror. “The tipping point would be reciprocity.” “If we want them to bring down their trade barriers, then for sure they will ask us to do the same,” he added. “So we must be ready in reducing our nontariff measures.” Jasper Emmanuel Y. Arcalas

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Agriculture/Commodities

Thursday, November 16, 2017 • Editor: Jennifer A. Ng

BusinessMirror

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Chicken inventory drops by 24.37% By Jasper Emmanuel Y. Arcalas

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he country’s dressedchicken inventory declined for the fifth consecutive week as demand for poultry continues to improve after the government declared that it was able to contain the bird-flu outbreak. Data from the National Meat Inspection Ser v ice (NMIS) showed the country’s chicken inventory in accredited cold storages reached 20,110.58 metric tons (MT) as of October 30, 24.37 percent lower than the previous week’s 26,593 MT. NMIS data also indicated that the latest dressed-chicken inventory level was nearly 40 percent lower than the 33,140.99 MT recorded in the same period last year. The bulk of the inventory during the period consisted of locally produced chicken. Local dressed chicken in cold storages amounted to 11,570.11 MT, 34.36 percent lower than the previous week’s 17,625.45 MT. Data from the attached agency of the Department of Agriculture

showed poultry growers in Region 3, which was struck by bird flu, have disposed of nearly all the dressed chicken in the region’s cold storages. L o c a l ly pro duce d d res s e d chicken in Central Luzon declined by 98.62 percent to 88.99 MT, from the previous week’s 6,467 MT. The figure was also 99.28 percent lower than last year’s inventory of 12,480.19 MT. Industry sources earlier said some poultry growers were forced to store dressed chicken so they won’t incur more losses. Demand for chicken fell drastically after the government announced on August 11 that bird flu struck some farms in Pampanga. Earlier, United Broilers Raisers Association President Elias Jose Inciong told the BusinessMirror

that poultry growers have started selling their dressed chicken so they could earn and resume production. “They are selling what they can to generate working capital. Growers who were forced to sell to stores are in dire need of capital,” Inciong said in an earlier interview. Data from the Bureau of Animal Industry (BAI) showed the farm-gate price of broiler continued its upward trend, reaching P92.56 per kilogram as of October 23. The figure was slightly higher than the P92.07 per kg recorded on October 16. On a monthly basis, the P92.56 per kg farm-gate price was 68.08 percent higher than the P55.07 per kg recorded on September 22, BAI data showed. BAI data also revealed that the retail price of dressed chicken as of October 23 was pegged at P142.08 per kg, 2.03 percent higher than the previous week’s P139.25 per kg. In an earlier interview, Manolette Gaerlan of the BAI’s Livestock Group told the BusinessMirror that some poultry growers have started to withdraw dressed chicken from cold storages. “We are now going into the holiday season, so we are expecting demand for poultry to increase. Demand for chicken would peak from December 15 to January 1, when parties are usually held,” Gaerlan said.

HARVEST FESTIVAL

Batch 147 of SM Foundation’s Kabalikat sa Kabuhayan (KSK) Farmers’ Training Program holds a harvest festival in Barangay 99, Diit, Tacloban City. As the seasonlong training program came to its culmination, 258 participants attended the harvest festival and related activities proud of what they have learned, which they consider as tools to sustainable farming and livelihood. This is the second KSK Program in Tacloban for Supertyphoon Yolanda survivors, the first one in Barangay Imelda in a demo farm owned by the University of the Philippines. An earlier KSK Program in Tanauan, Leyte, just a few months after Yolanda, was held and participated in by residents of municipalities in Northern Leyte in an effort to give immediate alternative livelihood to those who were affected by the typhoon. Among those who join the farmers’ training program in Diit were 30 antidrug advocates as part of their rehabilitation program. Other activities, aside from the harvest festival, included a market orientation for possible fresh-vegetables suppliership by SM SaveMore Tacloban, a cultural program and a cooking contest of various food using the vegetables harvested. SM Foundation

Craft chocolates revive interest in local cacao

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recently included artisanal dark chocolate in my grocery list —the same list which includes, among others, roasted coffee beans, coconut sugar and whole wheat bread. Eating chocolate candies is, of course, nothing new to me—as like most Pinoy Gen Xers, I grew up with local chocolate-candy favorites, such as Serg’s, Chocnut and Flat Tops. My siblings and I also enjoyed imported chocolate brands like Toblerone and Mars candy bars—sweet treats that used to be part of my overseas Filipino worker dad’s balikbayan box. But locally made bean-to-bar brands are a recent discovery for me—something which I only learned and understood while researching on Philippine cocoa industry for a separate news assignment. Indulging on a 70-percent dark-chocolate bar didn’t only satiate my sweet tooth but also made me more appreciative of the care and hard work poured into crafting bean-to-bar chocolates. According to Megan Giller, the Brooklyn-based food writer and author behind the popular chocolate blog Chocolate Noise (http:// www.chocolatenoise.com), beanto-bar chocolates (also known as “artisanal chocolates” and “craft chocolates”) refer to chocolates that were made from scratch by artisans who oversee the entire process of chocolate-making—from buying, roasting and grinding the beans themselves. Unlike mass-produced chocolate candy brands which are known for their cloyingly sweet taste, craft chocolates have a more intense, layered flavor—you can, in fact, taste the bittersweet flavor of roasted cacao beans. The bean-to-bar chocolate trend started in the United States in the mid-1990s, prompted by the demand for ethically sourced cacao beans and the rise of sustainable farm-to-table dining industry. The trend came in the Philippines around seven years ago, with independent Filipino chocolate makers introducing local brands like Theo & Philo, Hiraya and Malagos chocolates. These brands were once confined in online stores, specialty stores and pop-up shops, catering to a niche market. But with more

Prime Sarmiento

prime commodities Pinoy chocoholics searching for high-quality and healthier alternatives (craft chocolates are usually produced with less sugar than their mass-produced counterparts), local bean-to-bar brands are now lining up the shelves of some major supermarkets and department stores. There’s also a growing interest among local chocoholics to make their own chocolates, no doubt inspired to take the chocolate-eating experience to a new level. The Cocoa Foundation of the Philippines (CocoaPhil), which is more known for organizing weekend cacaofarming workshops, has also started conducting bean-to-bar chocolate, making workshops early this year as more people are now interested to make tablea from scratch. CocoaPhil Executive Director Edward David said the workshops, which are held at least once a month, are always fully booked. The popularity of the local bean-to-bar brands is good news to the Philippine cacao industry which is now being revived by government and industry leaders via the Philippine Cacao Industry Roadmap (http://pef.ph/index. php/2016/09/29/2016-2022-philippine-cacao-industry-roadmap/). The road map, launched in 2016, aims to increase cacao-beans production from the current 10,000 metric tons (MT)/per year to 100,000 (MT) by year 2022 to meet local demand and help the Philippines finally cash in on the lucrative cacao export market. After all, while the Philippines is one of the first countries in Asia to cultivate cacao—the first cacao plant was brought by Spanish colonizers in the 17th century—the country has never been a net exporter of cacao. Even at the height of cacao farming in the 1980s, when tax incentives encouraged largescale investments in cacao farms, local cacao beans were only used

to feed domestic demand. Cacao production started to decline in the late-1990s, with farmers discouraged to plant trees owing to the land-reform program, cocoa pod borer infestation and lack of support services. Annual production, which peaked to 30,000 tons per year in the 1990s, slumped to less than 6,000 tons in early-2000s. The Philippines had to import from Malaysia and Indonesia cacao beans just to close the supply-demand gap. But local industry and government officials decided to revive the industry a few years ago, encouraged by news reports quoting top executives of chocolate manufacturers Mars and Barry Callebaut, saying there would be a shortage of 1 million tons cocoa beans a year by 2020. The export opportunity that such expected shortage presented has spurred the government to give incentives, such as credit assistance, tax exemptions, planting materials and crop insurance to encourage farmers to plant more cacao trees. In 2016 production climbed to 10,000 tons. This is still not enough to meet the estimated annual domestic demand of 40,000 tons, much less spare anything for exports. But David, who was part of the group that drafted the road map, is confident that intercrop planting of cacao trees in existing coconut farms will expand cocoa farmlands and boost bean production. He said intercropping is more sustainable—both for the environment and the financial health of cacao farmers, as opposed to plantation-based mono cropping which was practiced in the past. Compared to what the export market can offer, the local craft chocolate producers and consumers are such a tiny market segment to cacao farmers. But I observed that these same craft chocolatiers have successfully raised the profile of Philippine cacao beans not only here but overseas, as well. For instance, Philippine artisanal chocolate brands Auro Chocolate Ginto Chocolates Hiraya, Kablon Farms, NutraRich, Malagos Chocolates, and Theo & Philo participated at the Salon du Chocolat held in Paris from October 28 to November 1. Cacao beans produced by the Davao-based Malagos

farm was selected as one of the top 50 samples for the 2017 Edition of the Cocoa of Excellence Programme, the entry point for the International Cocoa Awards. For this week’s Association of Southeast Asian Nations summit in Manila, Philippine beanto-bar chocolates again took center stage as President Duterte’s partner Honeylet Avanceña gifted the spouses of Asean’s top leaders with Malagos chocolate bars and tablea. It’s also these chocolatiers— through notes in their packages, web sites, social-media accounts and participation in various trade fairs and weekend markets—who stressed on the origin of their cacao beans (most of them used fermented cacao beans from Davao) and what they’re doing to help farmers increase production. They brought the cacao farms and farmers “closer” to their customers. This is especially crucial for most of us city-based consumers who are so busy and detached from the country’s agriculture that we often associate food sourcing to a trip in a supermarket or a quick meal in a fast-food restaurant. But, as what the journalist Michael Pollan noted on his groundbreaking book The Omnivore’s Dilemma, “to eat with a fuller consciousness of all that is at stake might sound like a burden, but in practice few things in life can afford quite as much satisfaction.” Pollan’s statement can serve as a gateway to getting into the whole farm-to-table dining experience or, perhaps, encourage you to go to a nearby talipapa to prepare your meals from scratch for a change. But, perhaps, you can start by just savoring every bit of that artisanal chocolate, fully aware of the time, energy and artistry that were molded into every bar. Prime Sarmiento is a longtime business journalist who specializes in food, agribusiness and commoditiestrade reporting. Her stories have been published in both local and international publications, including Nikkei Asian Review, China Daily, Science and Development News Network and Dow Jones Newswires. Comments and ideas are welcome at prime.sarmiento@ gmail.com.

Biotech crops reduce use of pesticides–experts

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he Rome-based Food and Agriculture Organization (FAO) of the United Nations estimates that up to 35 percent of the losses in the annual crop production worldwide are due to pests—insects, weeds, plant diseases, rodents and birds. Of the estimated 1 million insects in the world, between 150 and 200 species frequently cause serious damage to crops. When losses due to pests are combined with postharvest losses, worldwide food losses would amount to 45 percent. “This is almost one half of the world’s potential food supply,” the FAO pointed out. This is the reason most farmers around the world use pesticide to control these pests. For a long time, no one seemed to question the safety of pesticides. Not until 1962, when marine biologist and writer Rachel Carson wrote the now classic Silent Spring. In her book, she described how pesticides cause long-term hazards to birds, fish, other wildlife and humans, but provides only short-term gains to controlling the pests. Despite her findings, pesticide use continues to soar. “Farmers now apply abut one pound of pesticides per year for every person on the planet, 75 percent of it in industrial countries,” Peter Weber, a researcher with the Washington-based Worldwatch Institute reported some years back. In the Philippines most farmers are using chemicals to control pests that attack rice. “Pesticides are like bombs being dropped in the food web creating enormous destruction,” said entomologist Dr. K.L. Heong, who once worked with the International Rice Research Institute. Pesticides are killing more than just the pests. “Some pesticides harm the living organisms other than the targeted pest,” the Davao-based Technical Assistance Center for the Development of Rural and Urban Poor observed. “Some travel to the food chain to bioaccumulate in higher organisms.” Health experts claim pesticides can enter the human body through the lungs, digestive system or skin. Depending on the pesticide, health effects can be immediate (acute) or they can occur after years of lowerlevel exposure. Long-term effects of pesticides include skin disorders, damage to internal organs (liver, kidneys, lungs),

increased sensitivity to pesticides and effects on the progeny. Now, if Filipino farmers want to stop using pesticides to control those attacking their agricultural crops, all they need to do is plant biotech crops. A report from the International Service for the Acquisition of Agri-Biotech Applications (ISAAA) said farmers who planted biotech crops have reduced pesticide spraying. There was a “decreased environment impact from herbicide and insecticide use by 19 percent,” the report read. From 1996 to 2015 there was a reduction of pesticide applications by 8.1 percent. In 2015 alone, a reduction by 6.1 percent was noted, it added. The reduction was made possible through the use of biopesticides. For years, many organic farmers have used a bacterial pesticide called Bt to control a variety of pests that attack agricultural crops. Bt stands for Bacillus thuringiensis, a common soil bacterium so called because it was first isolated in the Thuringia region of Germany. It produces a protein that paralyzes the larvae of some harmful insects. Scientists, through genetic engineering, have taken the Bt gene responsible for the production of the insecticidal protein from the bacterium and incorporated it into the genome of plants. As such, the plants have a built-in mechanism of protection against targeted pests. Aside from corn, Bt is also introduced in cotton, poplar, potato, rice, soybean, tomato and, more recently, eggplant. “The protein produced by the plants does not get washed away, nor is it destroyed by sunlight,” a briefing paper published by the Global Knowledge Center on Crop Biotechnology said. “The plants are protected from the insects round the clock regardless of the situation.” Since Bt crops are able to defend themselves against pests, the use of chemical insecticides is significantly reduced. A study conducted by the United States Department of Agriculture showed that 8.2 million pounds of pesticide active ingredients were eliminated by the farmers who planted Bt crops in 1998. Currently, there are more than 200 types of Bt proteins identified with varying degrees of toxicity to some insects.

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Editor: Efleda P. Campos • Thursday, November 16, 2017

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One Cebu Party members, LP mayors jump to PDP-Laban

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By MarceL L. Woo Correspondent

EBU CITY—Members of One Cebu Party and at least 12 Southern Cebu town mayors allied with the Liberal Party (LP) are joining the mass oath taking on Friday, officially making them allies of President Duterte’s Partido Demokratiko Pilipino-Lakas ng Bayan (PDP-Laban). In a statement, One Cebu said its founder and president emeritus, Deputy Speaker Gwendolyn Garcia, Secretary-General Pablo John Garcia and leaders from all over the province will come full force to Plaza Independencia in Cebu City on Friday to show their support and for members to take their oaths. “We fully support the political masterstroke of Speaker Pantaelon D. Alvarez, secretary-gener-

al of PDP-Laban, and Presidential Assistant for the Visayas, Secretary Michael Dino, in consolidating all political forces that, after the May 2016 elections, have seen the light and switched their support from their old parties and loyalties to the administration of President Duterte and PDPLaban,” the statement read. One Cebu was founded in 2007 “to consolidate the then unprecedented political unity” in

the province of Cebu. “One Cebu is hopeful this mass oath taking will once again usher in a new era of political unity in the province,” the party said. But more than political convenience, One Cebu said the united force will rally behind and help institutionalize the priority programs of Duterte. Among them are federalism, the war against drugs and criminality, the war against poverty and the redistribution of the nation’s wealth to the Visayas and Mindanao through infrastructure spending. Meanwhile, at least 12 mayors in the southern towns of Cebu informed Cebu Gov. Hilario Davide III of their shift to PDP-Laban. The mayors come from Cebu province’s second and seventh districts, said Davide, LP Cebu chapter chairman. Davide said he told these mayors he has no problem with their shifting of alliance “as long as it is for the good of the constituents.” In August 2016 a batch of 300 politicians from Cebu City, M a n d au e C it y, A l o g u i n s a n , Ba l a mba n, Ba nt ay a n, Ba r i l i, Borbon, Consolacion, Cordova, Liloan and Medellin, either from LP or the United Nationalist Alliance, switched alliances to PDP-Laban.

Another batch of ‘pawikan’ hatchlings released in Cleanergy Park in Davao

DAVAO Light and Power Co. Inc. Community Relations Manager Fermin Edillon (left) validates the newly found nest at the Cleanergy Park on November 10. This is the 11th nest discovered in the park this year.

J Cebu bankers oppose tax-rate hikes By Charles R. Pepito Correspondent

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HE Cebu Bankers Club (CBC) is opposing the proposed measure seeking to increase the business tax rates on banks and other financial institutions in the city. CBC President Mario Fritz Palileo read the club’s position paper opposing the proposed measure during a public hearing last Tuesday. “An increase in taxation will increase total expenses for the banks. Bank expenses have increased these past few years due to capital expenditures aimed at increasing the safety and efficiency of the bank’s delivery of services and operations,” Palileo said. Cebu City Councilor Raymond Alvin Garcia proposed an ordinance amending the city’s Omnibus Local Tax Ordinance to increase from 50 percent to 75 percent of the 1 percent of the gross annual receipts of the banks and other financial institutions. While CBC recognizes the city’s authority to levy taxes, Palileo cited Section 51 of the Local Government Code providing that the city may exceed the maximum rates allowed for the province or its municipalities by not more than

50 percent, except the rates of professional and amusement taxes. In his proposed ordinance, Garcia said Section 143 of the Local Government Code states the maximum business tax rate that may be imposed by a city is 75 percent of 1 percent of gross receipts of the preceding calendar year derived from interest, commissions and discounts from lending activities, income from financial leasing, insurance of premium of banks and other financial institutions. Garcia added the 50 percent of 1-percent gross annual receipts of banks and other financial institutions is applicable mainly to municipalities and not to cities, like Cebu City, which is highly urbanized. Palileo said the banks are currently implementing various projects like the Check Image Clearing System. The Philippine Clearing House Corp. has implemented the system upgrade to shorten the clearing period of checks. He added there are also banks switching to Euro-Pay, Mastercard or Visa (EMV) for automated teller machines (ATM) due to recent events of ATM-card fraud in the country. “The Banko Sentral ng Pilipinas has recently obligated all banks to convert to the EMV tech-

nology free of charge to all bank clients,” he said. Under the proposed ordinance, Garcia put a clarification on the items covered by gross annual receipts, since there is an ongoing legal action between the city and a leading bank on local business taxes on banks. The imposition of items covered by the gross annual receipts of banks and other financial institutions will avoid confusion in the city’s collection of business taxes and will pave the way to guide the banks and other financial institutions in the payment of the taxes, Garcia said. He added the gross receipts for the preceding calendar year, as applied to banks and other financial institutions, shall be limited only to those derived from interest, commissions and discounts from lending activities, income from financial leasing, dividends, rentals on property and profit from exchange or sale of property, insurance premiums. City Budget Officer Marietta Gumia said the office will support the passage of the ordinance as the measure will increase the city’s income to support its programs, projects and activities of the city government.

NorthPhil tourism event all set in Pampanga By Roderick L. Abad Contributor

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IFFERENT attractions of four regions in Luzon will be showcased in the upcoming NorthPhil Tourism and Travel Expo slated at the SM City in Clark, Pampanga from November 17 to 19. The three-day event, the Department of Tourism (DOT) said, “marks NorthPhil’s rise as a tourism superregion and global destination, with CAR [Cordillera Administrative Region] as a hub for natural wonders, Region 1 [Ilocos region] for history and culture, Region 2 [Cagayan Valley] for allterrain adventures and Region 3 [Central Luzon] for sports, agritourism and culinary” escapades. DOT Region 3 Officer in Charge Carol de Guzman-Uy said the various attractions in those four regions comprise a “complete menu of fun activities and destinations” accessible by air, sea and land, making

the northern Philippines a “tourism megamall.” “Such attributes will be showcased in the NorthPhil exhibits and shows for the entire duration of the expo, with all the tourism-industry sectors participating,” Uy added. During the expo, participants may visit provincial pavilions and corporate booths for tour packages; witness industry dialogs on sustainable tourism, quiz-bee challenge, game shows, cultural presentations, crafts and arts demo and fashion show; as well as join in raffle draws, among others. The looming tourism boom in NorthPhil arising from the ongoing massive buildup of tourismrelated infrastructure across the entire region and the rest of the archipelago will be highlighted in this annual event. With constant growth of passenger volume in the international airports in Clark, Subic and Laoag— thanks to the spillover of airline

flights from Manila—the rise of tourist traffic is expected to drive expo participation from both local and foreign visitors. They include new and frequent travelers, young professionals and retirees, tourism professors and students, researchers and executivesearch officers, domestic and international tourists, travel wholesalers and retailers, event organizers and managers, consumer marketers and entrepreneurs, corporate incentive travel executives and SM Clark’s walk-in traffic. NorthPhil is also home to major domestic airports in Baguio City in the Cordilleras, Basco in Batanes, and Tuguegarao in Cagayan; and the community aviation facilities in Bagabag in Nueva Vizcaya, Baler in Aurora, Cauayan and Palanan in Isabela, Iba in Zambales, Itbayat Island in Batanes, Lingayen and Rosales in Pangasinan, Plaridel in Bulacan, Poro Point in La Union and Vigan in Ilocos Sur.

UST three weeks after the release of a new set of pawikan (sea turtles) hatchlings, another batch of baby pawikan was set out to the sea at the Cleanergy Park in Sitio Punta Dumalag, Matina Aplaya, Davao City on November 10. Seventy baby pawikan were released, for a total of 1,023 hatchlings released this year. These baby sea turtles came from the seventh nest discovered on September 14, at Cleanergy Park. Present during the release were the Davao Light and Power Co. Inc. employees, led by Community

Relations Manager Fermin Edillon, together with visitors from Aboitiz Equity Ventures and the community. On the same day, Davao Light employees found and validated another pawikan nest. This is the 11th nest found in the park this year, making 2017 the year with the highest number of discovered pawikan nests. “R elea si ng t hese pawikan hatchlings is always an exciting moment. The kids really enjoy seeing the baby turtles as they start their journey into the sea. It is also a great time for ev-

PHL flag to fly 24/7 in Subic Freeport By Henry Empeño

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Correspondent

UBIC BAY FREEPORT—The Subic Bay Metropolitan Authority (SBMA) has been authorized to continuously fly what is reputedly the biggest Philippine flag at its administration building here. This, after the National Historical Commission of the Philippines (NHCP) passed NHCP Board Resolution 8, s. 2017, to designate the Subic Bay Freeport Zone as a place where the Philippine flag should be permanently hoisted. SBMA Chairman and Administrator Wilma T. Eisma said NHCP Executive Director Ludovico Badoy sent the SBMA a copy of the resolution that amended Section 19 of the implementing rules and regulations of Republic Act 8491, also known as “The Flag and Heraldic Code of the Philippines.” “This allowed us to fly the Philippine flag 24 hours a day, everyday of the week,” Eisma said, adding the privilege “is an honor we gladly receive and a matter of deep pride for the SBMA.” She also said a plaque from the NHCP attesting to the agency’s privilege to continuously fly the Philippine flag will be installed on the base of the flagpole fronting the SBMA office along Waterfront Road here. Eisma said as the SBMA is holding a monthlong celebration for its 25th anniversary that will culminate on November 24, the Philippine flag would again be at the center of the celebration because most of the activities are held in front of the SBMA administration building. The SBMA had requested the NHCP in June to allow the agency

to keep the Philippine flag, the biggest in the country, constantly flying, SBMA Deputy Administrator for Administration Ruel John Kabigting said. “We wanted to give thousands of tourists who come to Subic Freeport the opportunity to behold and pay homage to the Philippine flag even during weekends and holidays,” Kabigting said. He noted the Philippine flag at the SBMA office is 44 feet long and 22 feet wide, and because it is flown atop a 120-feet high flagpole, is it highly visible from many points in the freeport. “However, it is pitiful that visitors coming during weekends only see the flagpole without the huge Philippine flag flying at its top,” Kabigting said. He added flying the biggest Philippine flag in the country is a matter of pride and honor for every Filipino, “especially at this time when our sovereignty, territorial and exclusive economic rights are being challenged in the West Philippine Sea, and most recently the rebellion in Marawi City.” SBMA Senior Deputy Administrator for Public Works Marcelino Sanqui, meanwhile, pointed out that even the flagpole upon which the Subic flag is hoisted also has historical symbolism. Sanqui supervised the erection of the said flagpole in 1997. He said the 94 feet in its total height of 120 feet stands for the 94 years of American occupation of Subic Bay; the next 18 feet for the heads of states who attended the Asia-Pacific Economic Conference in Subic in 1996; and the remaining 8 feet for the 8,000 volunteers who helped preserve Subic Bay facilities when the United States Navy withdrew in 1992.

ery visitor to learn about the value of wildlife conservation.” Edillon said. More pawikan nests are expected to be discovered in the Cleanergy Park in the coming weeks. Cleanergy Park is a project of Davao Light and Power Co., an AboitizPower subsidiary, in partnership with the Aboitiz Foundation. It is a biodiversity park aimed to help preser ve pawikan nesting grounds, be a home of many thriving bird species and help maintain ecological balance for other sea and land creatures.

LGBT to hold pageant in campaign vs HIV-AIDS By Jun N. Aguirre

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Corresponent

ALIBO, Aklan—The butterfly brigade in the province, in cooperation with the Aklan Provincial Health Office (PHO) and the Provincial AIDS Council (PAC), is holding a pageant for a cause. Debbie Villaflor, human immunodeficiency virus-acquired immunodeficiency syndrome (HIV-AIDS) coordinator of the PHO, said currently, the province has 121 cases and is still increasing its numbers. Among the patients is a Chinese national from Taiwan. Of the people living with HIVAIDS, 75 are being treated of whom 72 are males. Seven already died, while 64 are undergoing retroviral medications. “The butterfly brigade is a group of gay people in the province that specializes in the campaign against the spread of HIV-AIDS in Cebu,” Villaflor said. In Boracay another LGBT group, the Red Lace Boracay, is also helping the butterfly brigade in its campaign against HIV-AIDS. At least 21 candidates from all over the province, including Boracay, are expected to battle one another on wits and intelligence for the pageant night to be held on November 30. The venue will be at the ABL Sports Complex here. Among their activities is a photo campaign in social media giving their key awareness messages against the spread of HIV-AIDS. Meanwhile, the PAC is also working on the activation of the 17 municipal AIDS Councils in the province.

A10 Thursday, November 16, 2017 • Editor: Angel R. Calso

Opinion

BusinessMirror

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editorial

Protecting Asean migrant workers

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he Philippine chairmanship of the 31st Asean Summit will be remembered for the landmark agreement signed in Manila by leaders of the 10 member-states of the Association of Southeast Asian Nations. The document, called the “Asean Consensus on the Promotion and Protection of the Rights of Migrant Workers”, will strengthen social protection, access to justice, humane and fair treatment and access to health services for migrant workers in the region. About 7 million migrant workers employed within Asean memberstates—Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam—will be covered by the agreement, which will benefit over 200,000 overseas Filipino workers employed in Singapore and Malaysia. The signing of the historic document, described as the centerpiece of the country’s chairmanship of the just-concluded Asean summit, came 10 years after the regional bloc adopted the Asean Declaration on the Protection and Promotion of the Rights of Migrant Workers. The agreement manifests the resolve of Asean leaders to strengthen the protection and promotion of rights of workers against exploitation and maltreatment. Certain quarters welcomed the agreement as a positive step toward improved working conditions for migrant workers. The Blas F. Ople Policy Center said in a statement: “The signing of the Asean Consensus on the Protection and Promotion of Rights of Migrant Workers is the heart of the summit. It serves as a beacon for other regional blocs to follow. That it took place under the Philippine chairmanship of Asean manifests our country’s strong leadership role in promoting a rights-based approach to labor migration.” The agreement provides for respect for gender and nationality and protection against violence and sexual harassment in the workplace. Additionally, it provides for visits by family members and reinforces workers’ right to join trade unions and associations. It prohibits passport confiscation and overcharging of recruitment fees, as well as regulates recruiters for better protection of workers. However, it’s important for government officials to conduct massive information campaign to educate stakeholders, especially our own migrant workers, and give them deeper understanding of what the agreement is all about. The Philippines is a huge labor exporter with more than 10 million Filipinos working abroad. As such, the country’s labor officials can draw inspiration from the Asean agreement to forge bilateral labor arrangements with labor-receiving countries. This way, the government will expand the net of protection to our modern day heroes who contribute billions of dollars to the country’s coffers. Although the implementation of the agreement is subject to the respective laws of Asean members, the document alone could be the start of something more significant for the entire region. For example, it could pave the way for the adoption of a uniform labor and working conditions among Asean members. For the longest time, the race to the bottom concept has forced Asean members to compete with each other by cutting wages and living standards for workers. The agreement would prevent abuse and exploitation of Asean migrant workers, and help expunge the race to the bottom in the region. Thus, it would ensure inclusive growth among Asean economies aspiring to grow together. Since 2005

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The Asean fiesta John Mangun

OUTSIDE THE BOX

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vents like the Association of Southeast Asian Nations summit are always exciting and filled with significance of some sort or another. It is just difficult trying to figure out if there is any importance to the event. Manila 2017 was not an exception. The highlight of this summit was obviously the “Asean Handshake.” This is when a group of the most powerful leaders in the region, if not on Earth, stands in line on stage and cross their arms to hold hands with the person on each side. Realize that, when done properly, it looks as if all these great people are wearing straightjackets, ready to be led off to the nearest mental hospital. Actually, that would probably make at least some of their citizens extremely happy to see their leader carted away. Each year, there is one leader who cannot figure out how to do it properly. In 2015 Philippine President

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While these sorts of get-togethers by national leaders happen all the time, the Asean is special because it is Asian. Other leaders are invited, particularly from the West, but they are here as guests and observers. While they may have their own particular interactions with the members of the Asean, they are not Asian in form or context, and that is an important difference. Unlike in the West, personal relationships are still important in Asia. In 1984 British Prime Minister Margaret Thatcher said, “I like Mr. Gorbachev. We can do business together.” That statement is based on a personal face-to-face relationship that developed over time and cannot be achieved with today’s electronic communication. Asians know that a personal relationship can smooth problems and also create friction if that relationship is not respected. Business people —even in the West—understand that idea and Trump is a business person. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.

No room for complacency, scientists warned

✝ Ambassador Antonio L. Cabangon Chua Publisher

Benigno S. Aquino III may have been the winner, as he was standing on one end and appeared to be holding the hand of an invisible leader. This year the winner was US President Donald J. Trump, who fumbled the whole exercise. However, the real winner was Russian Prime Minister Dmitry Medvedev who ignored the crossgrip handshake thing and simply held hands like any normal person would. Tell the truth. Have you ever seen any ordinary person do the Asean Handshake...at least when sober? The Prime Minister of New Zealand, Jacinda Ardern, may have won

the “killjoy” award of 2017 with her comment that the Filipino barong she was presented with was “scratchy and quite starched.” Each barong— from fashion designer Albert Andrada—was individualized for each leader. Believing that climate change is “the greatest challenge facing this generation,” you would think she would be pleased with natural-fiber clothing, scratchy or not. Canadian Prime Minister Justin Trudeau and Indian Prime Minister Narendra Modi made special trips while in the Philippines. Both leaders appeared to be making a personal statement about global hunger and nutrition. Modi visited the International Rice Research Institute in Los Baños; Trudeau went to the Jollibee restaurant in Tondo, Manila. The best part—for some of us —was the exploding heads on both sides of the Pacific Ocean every time President Duterte and Trump were pictured together. Of course, it is completely acceptable for people to take their political views and hold them close. But the emotional turmoil that these two men take on some people is astounding; transcending any intellectual thought process is amazing.

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ARTH is approaching tipping points that threaten human security as global temperatures climbed higher, scientists warned in a new statement to national representatives meeting in Bonn this week for the annual climate summit. Their warning, shared to Database, comes as global emissions are projected to rise after three stable years.

Professor Johan Rockström, executive director of the Stockholm Resilience Center and chairman of the Earth League, an international network of scientists, issued the warning, thus: “There is no room for complacency. Climate change is here. It is dangerous. And it is about to get much worse.” “In the past two years, evidence has accumulated that we are now on a collision course with tipping points in the Earth system,” he said, underscoring the need for rapid action. The statement, “The 10 Science ‘Must Knows’ on Climate Change,” was presented on Tuesday to Patricia Espinosa, executive secretary of the United Nations Framework Convention on Climate Change, and distributed to negotiators in Bonn. It is published by Future Earth and the Earth League, two major international organizations representing networks of global sustainability scientists,

and summarizes recent Earth-system science and economic research. Dr. Amy Luers, Future Earth executive director, said: “The news that emissions are rising after the three-year hiatus is a giant leap backwards for humankind.” “Pushing Earth closer to tipping points is deeply concerning. Emissions need to peak soon and approach zero by 2050. Fortunately, we now have the tools to transition to a low-carbon world while increasing energy security, improving human health and strengthening economies,” she added. According to Earth League member and Potsdam Institute for Climate Impact Research Director Hans Joachim Schellnhuber, “Some crucial climatechange facts tend to get lost in the noise of daily deliberations—even at an event such as the United Nation climate summit. So, it is important to remind everyone of the very reason tens of thousands of people meet in Bonn: unprec-

edented risk to humanity due to global warming, as revealed by science. “This must be the starting point for rethinking what in the past 70 years has become our culture of short-term convenience and consumption, a culture that eventually comes at the cost of the wellbeing of present and futures generations across the world.” Here’s the summary of “The 10 Science “Must Knows on Climate Change”: “1. Much evidence suggests that the planet has entered a new geologic epoch—called the Anthropocene. The rate of change of the Earth system is accelerating as a result of humans’ impact on the planet’s biology, chemistry and physics. Earth’s climate has been remarkably stable since before the dawn of civilization. T his stability is at risk. “2. Earth is approaching critical “tipping points.” By crossing these thresholds, the planet may see abrupt, and possibly irreversible, shifts in the workings of the Arctic, Amazon and other parts of the globe. “3. The record-breaking 2017 Atlantic hurricane season provides a glimpse at the increased risks of extreme weather events that the planet may experience in the future. These events include severe flooding, heat waves and droughts. “4. Changes are occurring quickly in the ocean, with accelerating sea-level rise and ocean acidification. “5. The economic costs of climate change are already being felt, and some of the world’s poorest nations are bearing the heaviest burden. “6. Climate change will have a profound impact on human health by placing new pressures on the food

and water security in nations around the world. “7. Climate change is likely to exacerbate migration, civil unrest and even conflict. In 2015 more than 19 million people globally were displaced by natural disasters and extreme weather events, and climate change will likely cause that number to grow. “8. The world needs to act fast: If humans continue to emit greenhouse gases at current rates, the remaining carbon budget to reduce risk of exceeding the 2 degrees Celsius target will be exhausted in around 20 years. Emissions should peak by 2020 and approach zero by around 2050 if the world is serious about reducing risk. As a simple rule of thumb, this means halving global emissions every decade. “9. A fossil fuel-free society is economically attractive: renewable-energy sources increasingly compete with fossil fuels, even when these are priced at historic lows. Moreover, the estimated costs of inaction range from 2 percent to 10 percent of GDP by 2100 by some estimates, to a fall in projected global output by 23 percent in 2100 in others. “10. Even if the world meets the Paris Agreement targets, communities across the globe will still need to build resilience and adapt to the changes already under way.” In retrospect, “collision course” with Earth’s climatic tipping points is avoidable, but the political will to act is missing, the scientists also warned.

To reach the writer, e-mail cecilio.arillo@ gmail.com.

Opinion

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Dictatorship: Razon’s solution to infra devt? Val A. Villanueva

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was taken aback when Enrique Razon Jr., chairman and president of International Container Terminal Services Inc., stated at the sidelines of the Asean Business and Investment Summit that “infrastructure development and democracy cannot go hand in hand,” even hinting that “there may be benefit in [a country] being ran by a dictator.” Regardless of whether he was misquoted or his words were taken out of context, I find it absurd that such a statement would come from the Forbes Magazine-ranked seventh-richest man in the country. I had held him in high esteem as one of the Philippines’s best business leaders whose enterprises grew and flourished under a vibrant democratic system. Although reports said that he clarified his statement by saying he is not “endorsing” one form of political system over another, he followed it up with another shocker: “If you really look at it, those that have the most advanced infrastructure are the ones that are not democratic. The countries with the best infrastructure in the world are dictatorships.” With all due respect, Mr. Razon, I beg to disagree. Such notion of yours is simply not backed up by empirical or even historical evidence. Often, a dictator grabs political power with cunningly high motivations. In Pakistan, for instance, General Musharraf saw the opportunity when his country’s democratically elected politicians muddled governance. He summarily eliminated the roadblocks to his ascension and, yes, he delivered. He cut corruption and inefficiency, which democrats had absolutely failed to do. But as in any dictatorship, distress twitches in the long run. Instability and uncertainty would unfailingly crop up, and any fleeting prosperities from a despotic regime would summarily vanish. I believe that dictatorship simply lays a country’s problems in suspended animation, but it will not solve them in the long run. Razon’s statement makes me remember some of the world’s iconic infrastructure developments, such as the Eiffel Tower, built on January 28, 1887, long after Napoleon Bonaparte’s exile in 1815 and the restoration of the Bourbon monarchy in France. What about Germany’s Autobahn? The creation of the first segment (Cologne-Bonn) commenced in 1929. When dictator Adolph Hitler took supremacy as chancellor of the Third Reich in 1933, he claimed it as his own. There are so many beautifully engineered infrastructures built in the free world, but I cannot say the same for countries under a despot’s tight grip. Let us just refer to the top 27 countries with the best infrastructure, according to the 2017 World Economic Forum’s Global Competitiveness Index, listed here in chronological order: Hong Kong, Singapore, the Netherlands, Japan, the United Arab Emirates, Switzerland, France, South Korea, the United States, Germany, the United Kingdom, Spain, Qatar, Austria, China, Taiwan, Canada, Luxembourg, Portugal, Sweden, Iceland, Denmark, Malaysia, New Zealand, Belgium, Israel and Finland. They are the top 20 percent of 137 countries surveyed. Almost all their contemporary substructures—highways, mass transit, modern airports, power plants—were erected after 1945. You may notice that there are nine

constitutional monarchies in the list. Seven are from Europe (the Netherlands, the UK, Spain, Luxembourg, Sweden, Denmark and Belgium) and, of course, Canada and Japan. But monarchs, unlike dictators, do not run the state. They are at most symbolic figures and are revered as their country’s mediating voice. Many equate a one-party system to a dictatorship. Not true. In a nutshell, a dictator or despot rules the country without regard to the people’s right to have a say on how they want their country to be run, which is the exact opposite of what happens in a democracy. There is an ill-defined situation or field not readily conforming to a category or to an existing set of rules when we talk about countries like Singapore and China. The role of dictatorship when applied to them is quite ambiguous. For instance, economists still debate whether the success of Singapore is mainly due to its dominant party system, which some label a dictatorship, or because of the liberalization of its economic system. During its early stages, China’s growth was dismal. It was only during Deng Xiao Ping’s rule that its economy surged upward. Deng’s famous quote, “It doesn’t matter if a cat is black or white, so long as it catches mice,” implies that democratic or not, what matters is the country should move forward. Even if I try to put myself in Razon’s shoes—and for the sake of argument go along with his belief—the big question remains: Is it really a dictatorship which catapulted China’s ascent to economic power? I believe that Deng, to ensure growth and development, severed his commanding power and gave it back to the free market. China’s recipe of success under Deng had nothing to do with dictatorship. On the other hand, China’s success should not be confused with that of India’s. While India was politically democratic, it was, likewise, economically Leninist. It was only in the 1990s that it shed its Leninist leaning, while China did it as early as 1978. The reference that labels China as “evolutionary, democratic, and stagnant” confuses what is elucidated by considering India as a political democracy with a chiefly Leninist economy. India’s economy is a confluence of logic of monopolization with its allembracing state regulation—control of inputs, financial resources and key prices—making it one of the world’s largest employers. Nehru-Gandhi’s socialist economic policy was what drove India to virtual bankruptcy in 1999. It was only after a long uphill campaign that India got its economic bearings back. Dictatorship is not a panacea for economic development. Although I fully respect Razon’s view, he could have been ill-advised in promoting such an idea. Espousing a country to accept dictatorship as a shortcut to progress is analogous to the deceits wielded by Adolf Hitler.

For comments and suggestions, e-mail me at mvala.v@gmail.com

Responsible stewards Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

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he coming of the Lord at the end of time entails on our part an accounting of what we shall have done with all the gifts and opportunities given us in our lifetime. The parable of the talents (Matthew 25:14-30) illustrates the joy accompanying the final accounting of responsible stewards.

Invaluable gifts What must have been originally Jesus’ parable addressed to the religious leaders of His time about their responsibility in guiding the people has become an allegorical lesson to Christians about the accounts they would have to settle with the Lord at His second coming. The Master for His long absence following the ascension has entrusted His disciples with goods to be used profitably. A “talent” is a monetary unit of huge amount, equivalent to 6,000 denarii or drachmas. With a denarius as a day’s wage, a talent equals a lifetime’s wages. The servant who received five talents got enough for several lifetimes of earning.

The point is that the servants have been entrusted with invaluable gifts by their Master. Each received “according to his ability” enough capital to be made productive. Here, we realize that Jesus has, indeed, entrusted to His Church-community goods of incredible value: His Gospel, His sacraments, His own friends of outstanding merits like the saints, including Mary His own mother, and above all His greatest gift of all, the Holy Spirit. What do we do with them? What have we accomplished with them and through them?

Good and faithful servants

When the Master returned and settled accounts with His servants,

Bloomberg View

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useful way to think about modern electronic market structure is that in the olden days humans traded stocks and options, making markets based on gut instinct, and then those humans were replaced by computers that used algorithms that largely replicated the humans’ gut instincts but more efficiently. But also, in the olden days, those humans did various shady things, and over time, the computers have started to replicate the humans’ shady-thingdoing abilities, because, you know, the

shady-thing-doing tradition runs deep. And so the way human markets work is that Pension Fund X will buy a lot of Microsoft Corp. stock through Dealer Y, and Hedge Fund Z will call up Dealer Y and say “hey who is buying all this Microsoft stock,” and the dealer won’t say “oh it’s Pension Fund X”—that would be a hideous violation of client confidentiality—but she might give the hedge fund some “market color.” The exact flavor of market color will depend on her relationships with Pension Fund X and Hedge Fund Z, and on the norms of the particular market they trade in, but she might say something like “we’re seeing

His joyous recognition of the accomplishment of His responsible servant rang out in His “Well done, my good and faithful servant!” Wherein lies the good work of the faithful one? “You were faithful in small matters” —it is fidelity to the obvious intention of the Master that His goods be made productive and beneficial all around. Whatever amount one may have received more can and should be made out of it. It is irresponsibility to deviate from this purpose of the owner. Hence, the servant, who did nothing but dig a hole in the ground and bury the talent he was left with, got from the Master the response: “You wicked, lazy servant.... Throw this useless servant into the darkness outside!” Yes, what have we been doing with the goods entrusted to us? Have we enterprisingly made more? They clearly are not for my personal benefit only. The good they do me should be multiplied by benefiting others, as well. What is for me is for them, too. I am given them ahead of others so that I can be as conduit to them. The goods given us are ministerial. They are not to be accumulated as though for one’s self solely, but rather to be husbanded and invested wisely and ingenuously to benefit as many as possible.

Alálaong bagá, a challenging statement from the Master: “To everyone who has more will be given and he will grow richer, but from the one who has not, even what he has will be taken away.” The lazy servant, who earned nothing with what he has, wasted the talent and the time given him; he claimed to be paralyzed by his own fear of his Master, and ended up with that capital being taken away from him. He was not invited to share in his Master’s joy; he was thrown outside into the darkness of everlasting separation and regrets. In contrast, the eschatological glory is the “more” that the faithful, responsible servant will be given. For all the disciples who are wise administrators of the gifts entrusted to them, there can only be everlasting treasures in the love of the Lord. The invaluable capital entrusted to them will even be doubled, and they will, in fact, be asked to do more for more people and already now. The time before the return of the Lord is the time for active waiting, rich with opportunities for profitable investment of one’s talents and time. Join me in meditating on the Word of God every Sunday, from 5 to 6 a.m. on DWIZ 882, or by audio streaming on www.dwiz882.com.

President Duterte’s lament on globalization Dr. Rene E. Ofreneo

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N summary, the President’s message is a reiteration of what we have been saying: Filipino talents are the country’s gift to the world, in particular to the more developed labor-receiving countries that are always in short supply of engineers, information-technology (IT) programmers, doctors and other professionals and skilled workers. The economy of a number of Middle East countries are likely to be impaired, even grounded to a halt, if there will be a massive return migration of overseas Filipino workers (OFWs). In the North sea oil-drilling project in Europe, the rig engineers and workers who go down to the sea floor several kilometers deep are mostly Filipinos.

It is, thus, ironic that while these OFWs are able to contribute to the development of other countries, they are not able to share their God-given talents and skills in building a more progressive Philippines. Their contributions to the home country come mostly in the form of remittances, most of which are spent either on imported consumption goods or on the service industries (malling, real estate, education, etc.) that the Sys, Gokongweis, Ayalas and Gaisanos have been building to take advantage of a remittance-driven economy. Industry complaints on the adverse impact of the brain and skills drain were registered as early as the late-1970s, when the “manpower export” was officially launched by the martial-law government as a “temporary” program while the country was still waiting for the “labor-intensive export-oriented” (LIEO) industrialization of National Economic and Development Authority to bear fruits in terms of robust growth and job creation. The LIEO tree failed to bear the anticipated miracle fruits of more jobs and more development.

Instead, the exodus of skills and talents even intensified in the succeeding decades of the 1980s to 1990s as almost all continents of the world, including the North Pole, became the destination for our migrant workers. The list of professionals and skills leaving the Philippine shores also grew exponentially, covering not only the construction industry (mainly for the Middle East) but also the IT industry, health sector, finance, mining and so on. Complaints of Philippine-based industries also grew—from the loss of scarce skills, such as those possessed by expert electricians, plumbers and carpenters to the cost of training provided by industry to those who eventually become migrant workers. One old theoretical debate on migration states that the departure of OFWs represents a drain; however, the OFWs, upon their return to the home country, bring with them new or enhanced skills that they can apply at home. In short, these OFWs can become industry innovators and job creators. This argument is illustrated in the case of South

Machines will do shady things in the markets too By Matt Levine

Thursday, November 16, 2017 A11

long-term real-money flows into Microsoft” or whatever. And Hedge Fund Z will conclude that there’s more Microsoft buying to come, and so will buy Microsoft itself to profit by selling into those additional long-term real-money flows. And Pension Fund X will have to pay a little more to complete its Microsoft buying, and will feel aggrieved that its trading strategy leaked out into the market and that it was “front-run” by Hedge Fund Z. This story is a little fanciful because no one trades stock over the phone anymore, but you can computerize the whole thing. Here’s a story about the “Intellicator Analytic Tool,” a tool that Nasdaq

Inc. has proposed to give option-market color to its customers: Every minute, it would spit out numbers corresponding to a part of the options market and show whether investors in that market segment were bullish or bearish. While it wouldn’t reveal the identities of investors, the Intellicator could reveal the “customer type” of buyers or sellers in thinly traded markets. For instance, it could show whether a trade was initiated by a small investor or big money manager, by identifying certain traders as “professional customers” who place larger volumes of orders each day. This is useful color, for the recipient of

Korea, which was a major exporter of manpower in the 1970s and 1980s and which became a major importer in reverse once it reached the “migration hump” in the 1990s because of its rapid industrial growth. In the case of the Philippines, this did not happen. Very few successful and rich OFWs invested on job-creating undertakings utilizing the know-how they acquired from working overseas. Also, there were hardly anyone who went into industrial development based on the knowledge and skills that they gained from certain industries abroad. For example, there were no records that those who worked as professionals and skilled workers in the high-tech small and medium enterprises of South Korea and Taiwan, such as watch making, IT parts assembly and shoe production were able to set up similar ventures in the Philippines upon their return or retirement. The point is that migration, as a platform for industrialization, has not worked in the Philippines, as lamented by President Duterte himself. Meantime, more problems are cropping up. The Middle East, which hosts the most number of OFWs, is a powder keg and can explode in a big way. The Shia-Sunni conflict, not to mention the terror campaign of the Islamic fundamentalist ISIS group, is putting the two big powers of the region, Iran and Saudi Arabia, on a collision course. Some OFW communities are also affected by the rising xenophobia in Europe, America and other places. What will the Duterte administration do if there is a sudden massive return migration of OFWs? This question is not new. It was also raised in the past administrations, and, fortunately, this never happened. Instead, there were only some dislocations in a few host countries involving only a few thousand OFWs, not millions. Nonetheless, the question remains valid and should be raised given the uncertain times we are in. The government should always be ready with its contingency plans. However, the immediate policy

challenge to the Duterte administration is how to revisit the issues of migration and industrialization. Paano babalikan ang napag-iwanang industriya at agrikultura ng bansa? The phenomenal growth of migration as a life saver for the country is due to the phenomenal failure of industry and agriculture to grow under the LIEO and export-oriented industries development programs from the 1970s to the present. Some economic commentators claim that the Philippines is a victim of the “Dutch disease,” that is, industrialization has been stunted by national dependence on a resource abundance in the form of OFW remittances. This is clearly not the case because the growth of migration came about precisely because of the poor growth of industry. Ironically, some manpower recruiters are complaining that the eroding industrial base of the Philippines is affecting their capacity to recruit and deploy more talents and professionals. The explanation is simple: Overseas labor market is selective not only in terms of skills and know-how but also on a person’s actual work experience and background. If they lack direct experience in managing manufacturing units in the Philippines, qualified production engineers cannot be deployed. To conclude, the Philippines cannot afford to forever wait for the migration hump to happen. The efforts of Department of Trade and Industry officials to have a “manufacturing resurgence” should be intensified and should involve more stakeholders, not only established industry associations. These include the OFWs and their families, especially those who claim that these OFWs have acquired new skills that can help the country do industrial leapfrogging. Why not a strategic road-mapping exercise on how the Philippines can finally graduate from its overwhelming dependence on migration and how skills and savings gained from migration can be used to spur accelerated industrial and agricultural development? Dapat walang maiiwan!

the color, which means that it will make the subject of the color feel aggrieved: But if the Intellicator reveals a small order was initiated by a big investor, others could infer that the investor is about to buy or sell many options, potentially affecting the price of the underlying stock. An algorithmic trader could quickly buy or sell that stock, resulting in a worse price for the investor on the options. It all just feels so much more naked when the computers do it. When the humans do it, it is all a vague mosaic of intuition and inference and “color.” When the computers do it, it is all there in black and white, specifically quanti-

fied, plugged into trading models that can make decisions based directly on these signals. It is also less dependent on relationships: Hedge Fund Z, in my fanciful story, needed to know to call up Dealer Y, and she needed to take its call. But Nasdaq will sell its Intellicator, with no clubbability restriction on who gets what market color. “If this data is made publicly available, customer trades could be adversely impacted if bad actors attempt to utilize this data to manipulate the market,” Sifma said in a comment letter. Electronic trading has in many ways democratized Wall Street, but it can also democratize the shadiness.

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Solon: PHL should help other Asean members craft migrant-worker laws By Elijah Felice E. Rosales & Jovee Marie N. dela Cruz

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@alyasjah @joveemarie

ith the Association of Southeast Asian Nations issuing on Tuesday night the declaration advancing the rights of migrant workers, the Philippines should now take proactive efforts to ensure this is followed throughout the region by helping other member-states enact their respective accompanying laws, a lawmaker said. While the Asean Consensus on the Protection and Promotion of the Rights of Migrant Workers is hailed as a step forward, House Assistant Majority Leader and Partylist Rep. Salvador Belaro Jr. of 1-Ang Edukasyon said the document is not legally binding, and an action plan is yet to be worked out. The Asean consensus is the result of extensive discussions, information sharing and constructive negotiations since

2009 under the leadership of the Asean labor ministers. “I note also how it took 10 years for the consensus to be forged and evolve since the Cebu Declaration,” he said, adding: “Sounds like it would probably take at least another 10 years for the other Asean countries to enact migrant-worker laws similar to those of the Philippines.” Belaro noted that among the Asean member-countries, only the

BELARO: “Sounds like it would probably take at least another 10 years for the other Asean countries to enact migrant-worker laws similar to those of the Philippines.”

Philippines and Indonesia have ratified the UN Convention on Migrant Workers. “Cambodia is a signatory, but has not yet ratified the convention. The other Asean members did not sign on to the UN convention. Timor-Leste, which applied to join Asean in 2011 and is a dialogue partner of the regional grouping for now, ratified the convention in January 2004,” he said. “If the other Asean countries ratify the UN convention, that would be more reassuring to the migrant workers across the region.” Under the Asean Consensus on the Protection and Promotion of the Rights of Migrant Workers, Southeast Asian expatriates working

within the region are granted specific rights in accordance to existing laws of Asean member-states. The consensus covers documented migrant workers and “those who become undocumented through no fault of their own.” The consensus allows migrant workers to access documents relevant to their employment from authorities and recruitment agencies. It also demands authorities and recruitment agencies to issue employment contract and proper documentation to migrant workers. Aside from this, migrant workers were also granted right to join trade unions and associations, as guided by existing laws of the receiving state. In cases filed by or against a migrant worker, should he or she win the case, he or she is entitled to any relief for loss of his or her rights arising from the employment contract. The consensus also highlights obligations of sending states. It mandates the sending state to make sure every worker it sends overseas is organized, oriented and assisted by his or her

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Japan vows to strengthen ties with PHL By Jovee Marie N. dela Cruz @joveemarie

respective government so as to ensure he or she has knowledge of his or her human and labor rights. “The sending state will ensure that migrant workers are informed and aware of the terms and conditions of their work through a written employment contract or proper documentation and in language that they understand,” the consensus read. “The sending state will take all necessary actions to simplify the administrative processes for overseas placements such as, but not limited to, ‘one-stop service center’ where appropriate.” “The sending state will develop a comprehensive reintegration program for returned migrant workers and their families, as well as an employment program for returned migrant workers, taking into account their skills obtained overseas,” the consensus added. On the other hand, the receiving state is tasked to make sure all migrant workers exported to them are given fair treatment and safe from abuses, exploitation and violence.

oting the Philippines’s “strategic position,” the Japanese government vowed to deepen ties and strengthen cooperation with the Philippines. In a news briefing on Tuesday, Japanese Prime Minister Shinzo Abe said his government would provide military support to the Philippines to enhance its maritime security and fight terrorism. “The Philippines is positioned at a strategic point in sea lane as such it is confronted with challenges, such as those of maritime security and terrorism, in addition it now fall under the range of North Korea [NoKor] ballistic missile,” Abe said. In his three meetings with President Duterte this year, the prime minister said he and the Philippines’s chief executive have agreed to deepen the cooperation between Tokyo and Manila in terms of maritime security and fight against terrorism. “[Our] collaboration with regard to resolving NoKor issue, maritime security, terrorism and rule of law and order, we have agreed to deepen

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Farm-sector growth in Q3 dragged down by livestock, fisheries Continued from A1

subsector’s output rose by 4.54 percent. Hog production, according to PSA data, reached 527,600 metric tons (MT), slightly higher than the 522,840 MT recorded last year. “The subsector’s gross earnings amounted to P68.9 billion, and registered an increase of 14.88 percent from last year’s record,” the PSA report read. Dy also noted that the bird-flu outbreak in some Central Luzon towns had a minimal impact on the poultry sector, which posted a 3.43-percent hike in output. The government announced that bird flu struck a farm in San Luis, Pampanga on August 11. The fisheries subsector, which accounted for 17.4 percent of total agricultural production, continued its downward trend. Output contracted by 4.27 percent in the Julyto-Septemper period. Agriculture Secretary Emmanuel F. Piñol told the BusinessMirror that he plans to roll out projects that would boost the livestock and fisheries subsectors’ output, following their lackluster performance in the third quarter. “We need to focus more on fisheries and livestock. We have to pursue our fisheries modernization program to include construction of more fishports, postharvest facilities, and

establish aquamarine production facilities,” Piñol said via SMS. PSA data showed the crops subsector again buoyed the performance of the farm sector. The production of the crops subsector, which accounted for 46.89 percent of the total agricultural output, grew by 5.18 percent. Palay production in the third quarter reached 3.389 million metric tons (MMT), 14.18 percent higher than the 2.968 MMT recorded a year ago. “This was attributed to the increases in harvest areas because of early occurrence of rains and availability of water during the planting period in Cagayan Valley, Central Luzon, Western Visayas and Soccsksargen,” the PSA report read. “More plantings were also cited in Mimaropa and this was traced to the availability of hybrid and certified seeds from the Department of Agriculture and local government units and adequate water supply during the planting months,” it added. The PSA also noted output gains among other major crops, such as coconut, sugarcane, banana, pineapple, tobacco, peanut, mongo, cassava, sweet potato, tomato and rubber. Increases in the production of other major crops cushioned the impact of the decline in corn output, which settled at 2.589 MMT, 2.74 percent lower than last year’s 2.662 MMT.

“At current prices, the gross value of production in agriculture amounted to P382.5 billion. This was 6.27 percent higher than the previous year’s record,” the PSA said. Data from the PSA also showed total farm-sector production in January to September expanded by 4.6 percent. Earlier economists told the BusinessMirror that the bird-flu outbreak in Central Luzon could slow the farm sector’s output in the Julyto-December period. “If [bird flu] is contained then it would have minimal impact. But consumer panic could affect chicken demand and drive down prices and profits,” Dy said in an earlier interview. “If unfounded panic continues, then pork and fish prices would go up.” Economist Pablito M. Villegas, vice president of Confederation Filipino Consulting Organizations, said the bird-flu outbreak could affect the poultry sector, but the extent would depend on the government’s reaction. “It depends on the speed of containment versus its spread effect, including the extent of consumer scarce which will affect both supply and demand decisions [in the market],” Villegas said in an earlier interview. “Surely, the bird-flu outbreak will have an impact on the poultry sector in the third and fourth quarter. It could really go down,” he added.

Trump’s trade barbs pushing Asian nations closer to China’s orbit Continued from A1

Trump appears to want it that way. In a meeting with Southeast Asian leaders on Monday in Manila, he called for a “free and open Indo-Pacific.” The phrase reflects the US desire for India to play a bigger role in its security matters. “We want our partners in the region to be strong, independent and prosperous, in control of their own destinies, and satellites to no one,” he said. Still, Trump’s focus on trade deficits risks doing just the opposite. Already over the past decade, the 10-nation Asean has grown more reliant on China, which accounted for 15 percent of its total trade last year compared with 9.4 percent for America. Back in 2007 Asean traded more with the US than China. South Korea, which agreed to revise its bilateral deal with the US, is being pulled toward China under Trump and the longer term consequences are unclear, according to a person familiar with the country’s trade policy who asked not to be identified speaking about internal deliberations. Too much reliance on China is potentially strategically

dangerous, the person said. China punished South Korea after it allowed the installation of a US-missile shield to defend against North Korea, with Beijing restricting tourism and making life hard for its companies. While both nations agreed last month to move past the dispute, China hasn’t yet fully restored economic ties. The South China Sea is another area where China can use its economic might to advance its geopolitical aims. In Hanoi Trump offered to broker a peace deal between China and Southeast Asian nations like Vietnam and the Philippines, which has already shifted toward Beijing under President Duterte. “President Trump’s offer to be a mediator in the South China Sea was off-balance,” said Michael Fullilove, executive director of Sydney-based think tank the lowy institute. “Because you have a very significant power imbalance between China and its neighbors, mediation isn’t what’s required. Support from the US for those smaller Asian nations is.”

‘We’ll lose some time’

At the Asia-Pacific Economic Cooperation summit

in Vietnam, Trump and Chinese President Xi Jinping again laid out competing visions for globalization. While Trump said he wouldn’t enter large trade agreements “that tie our hands,” Xi painted a picture of a global order that would bring collective benefits. Smaller Asian nations also called for a more collective approach. Singapore’s Prime Minister Lee Hsien Loong said world leaders should ensure the economic benefits of globalization and digitization are “fairly distributed” to mitigate the “winner takes all” effect of technology disruption. Government officials in the region regularly have said they want the US to engage rather than withdraw, according to Carlos Gutierrez, chairman of Washington-based Albright Stonebridge Group and former commerce secretary under former President George W. Bush. While Trump’s moves to undercut international agreements can disrupt business activity, the US retains a cultural advantage, he said in an interview in Singapore. “In absolute terms, I think the US will continue to be a powerhouse,” Gutierrez said. “We’ll lose some time, but I think it’s way too early to say this is the beginning of the long-term decline of the US.” Bloomberg News