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Integrity In Paradise By Henry J. Schumacher

You remember the ‘Panama Papers’?

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Kirill Makarov | Dreamstime

he Panama Papers are an unprecedented leak of 11.5 million files from the database of the world’s fourth biggest offshore law firm, Mossack Fonseca. The documents show the myriad ways in which the rich can exploit secretive offshore tax regimes. Twelve national leaders are among 143 politicians, their families and close associates from around the world known to have been using offshore tax havens. Mossack Fonseca data seen by the Guardian relates to more than 200,000 companies for which the firm acted as registered agent. Often used lawfully to anonymously hold property and bank accounts, these companies were registered in a range of tax havens and this map shows the most popular locations among its clients. The British Virgin Islands held more than 100,000 companies. Rather than dealing directly with company owners, Mossack Fonseca mostly acted on instructions from intermediaries, usually accountants, lawyers, banks and trust companies. In Europe these offshore facilitators are concentrated in Switzerland, Jersey, Luxembourg and the United Kingdom. Where does the money flowing offshore come from? The information is hard to discover because real owners usually hide behind nominees, people

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BusinessMirror A broader look at today’s business

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Tuesday, November 21, 2017 Vol. 13 No. 41

Peza investment pledges up nearly 90% in Jan-Oct By Catherine N. Pillas

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@c_pillas29

nvestment pledges registered at the Philippine Economic Zone Authority (Peza) in January to October jumped by almost 90 percent to P203.18 billion, from last year’s P107.34 billion.

Fiscal skills behind spending program Manny B. Villar

THE ENTREPRENEUR

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Figures from the Peza indicated that the Philippines attracted more bigticket projects during the 10-month period, as the number of projects where

he Philippines has always been considered a country rich in resources with a huge potential to become a prosperous economy, yet it has been laggard in terms of growth among countries in Southeast Asia. One of the main reasons is poor infrastructure, which is recognized as essential to stimulating economic activities and attracting investments.

See “Peza,” A2

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HOUSE PANEL OPTS FOR BM Reports LOWER RICE TARIFF TO to growth? AVOID TRADE SANCTIONS Large dams: BulwarkRightornow,conduit our supply from Angat is By Jovee Marie N. dela Cruz @joveemarie

& Jasper Emmanuel Y. Arcalas

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@jearcalas

he House of Representatives’ Committee on Agriculture and Food on Monday reduced the proposed bound tariff rate for rice imports outside the minimum access volume (MAV) to 180 percent from 400 percent. The House panel, which is chaired by Party-list Rep. Jose T. Panganiban Jr. of Anac-IP, decided to adopt a proposal of the Department of Agriculture (DA) to set a lower bound tariff rate so the government won’t have to extend trade concessions and to ensure that rice prices would remain stable. Agriculture Undersecretar y Segfredo R. Serrano said notifying the World Trade Organization

(WTO) that Manila would impose a 400-percent bound tariff rate on out-quota rice imports may put the Philippines at the mercy of other member-countries of the WTO. Serrano added other WTO member-countries may ask for concessions just to secure their approval for the proposed bound tariff rate. “They [WTO member-countries] know that within the formula under the Agreement on Agriculture [AoA], the Philippines has every legal right to inscribe its level of commitment. But they can hit us if it is outside of the AOA,” he said during the committee hearing held on Monday. “They [WTO member-countries] might ask something in exchange from us just to get their nod for a 400-percent bound tariff rate. See “House panel,” A2

PESO exchange rates n US 50.8160

By Jonathan L. Mayuga @jonlmayuga

Part Two

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NUMBER of large dams in the Philippines, built primarily as a water reservoir for domestic and agricultural use, have multiple uses, from hydropower and flood control to tourist spots. There’s the Wawa Dam in Montalban, Rizal, and the Magat Dam at the boundaries of Ramon, Isabela and Alfonso Lista, Ifugao province. The Ambuklao Dam in Benguet is also known for its aesthetic beauty. Hikers on Mount Pulag stop near the dam to enjoy the scenery. The La Mesa Dam, which is nearest to Metro Manila, offers city residents an opportunity to commune with nature and with modern-day amenities like swimming pools. There are several hydroelectric

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₧203.18B The value of investment pledges registered at the Peza in the January-to-October period

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Angat Dam

METRO Manila’s over 12 million

By Elijah Felice E. Rosales

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@alyasjah

people depend on clean-water supply from the Angat Dam, a 60-yearold water reservoir. Angat Dam supplies about 95 percent of raw water requirements for Metro Manila and some parts of Greater Manila Area through the facilities of the Metropolitan Waterworks and Sewerage System (MWSS). Water from Angat flows to Ipo Dam and La Mesa Dam, from which treated water flows to household consumers through two private water contractors—Manila Water Co.Inc. and Maynilad Water Services Inc.

alacañang does not consider as an option returning the Metro Rail Transit (MRT) Line 3 to the private sector, despite the numerous breakdowns since the government took over the railway facility, as a Palace official on Monday asked the public to give President Duterte a chance to resolve the problem. In a news briefing, Presidential Spokesman Harry L. Roque Jr. said the riding public should trust the President in his capacity to put the MRT back to normalcy. The past weeks saw the railway facility malfunctioning and, in one occasion, causing a freak accident that had an arm of a female passenger severed. “Unang-una po, hindi tayo naghuhugas ng kamay. Tinatanggap po natin ang paghamon d ’yan sa MRT na ’yan at ang Presidente na

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enough to support our need. But in the next few years, with the growing population and the impact of climate change, it may no longer suffice.”—Velasco

power plants served by large dams. These dams include the following: Agusan, Angat, Binga, Bustos, Caliraya, Casecnan, Lumot, Magat, Pantabangan, Pulangi and San Roque. Because of their flood-control functions, the Philippine Atmospheric, Geophysical and Astronomical Services Administration also monitors the water level in a good number of dams, namely, Angat, Ambuklao, Ipo, Binga, Caliraya, La Mesa Magat and Pantabangan.

Returning MRT to private group not an option

n japan 0.4535 n UK 67.1381 n HK 6.5062 n CHINA 7.6663 n singapore 37.4915 n australia 38.4474 n EU 59.9121 n SAUDI arabia 13.5502

Source: BSP (20 November 2017 )


A2 Tuesday, November 21, 2017

BMReports BusinessMirror

Large dams: Bulwark or conduit to growth? Continued from A1

Aside from providing domestic water supply, water from Angat irrigates about 28,000 hectares of farms in the provinces of Bulacan and Pampanga. The dam, however, is heavily silted and concerns have been raised over the integrity of the structure, given that it is more than 60 years old. With the country prone to strong earthquakes, there is also concern over a possibility of the dam collapsing, especially in the case of a 7.2-intensity earthquake.

Water security

MWSS Administrator Reynaldo V. Velasco considers water security as a matter of national security. A member of the Philippine Military Academy Class of 1971 and one of the top police officials prior to his appointment to the MWSS, Velasco has emphasized on several occasions the importance of securing the country’s water resources, particularly the water reserve in Angat Dam. MWSS sources 95.6 percent of its water supply from the Angat and Umiray rivers, and 4 percent from the Laguna de Bay. The remaining supply, approximately 0.4 percent, comes from groundwater sources. He said these are reasons enough to reduce MWSS’s dependency on Angat Dam, which supplies most of the water in Metro Manila. Velasco added securing the Angat Dam and other water facilities against terrorist threat is one of the many focus of his leadership as MWSS chief. Moreover, he underscored the need to rehabilitate the country’s degraded ecosystem to protect the country’s freshwater resources.

Massive reforestation

THE Philippines, Velasco said, is faced with the sad

Peza. . .

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investments will be channeled reached 484 this year, slightly higher than the 481 recorded last year. “The increase in investment pledges was driven mainly by the Duterte administration’s pursuit of good governance, incentives given by the Peza and the aggressive marketing and promotion of Peza to domestic enterprises,” Peza Director General Charito B. Plaza told the BusinessMirror via short message service. Plaza said the “enthusiasm” of local government units and the private sector in

House panel. . . Continued from A1

“We would not advise risking noncertification of our notification of tariffication at the WTO just because of the issue with the numbers,” Serrano added. The DA official disclosed that under the formula provided by the AoA, the Philippines could impose a bound tariff rate ranging from 150 percent to 179 percent on imported rice. “In fact, what we proposed is that we follow the computation. The problem with imposing 400 percent is how are we going to explain that, what is our basis?” Serrano said. Earlier, former President and now Rep. Gloria Macapagal-Arroyo of the Second District of Pampanga had wanted a 400-percent bound tariff rate on outquota rice imports in the substitute bill which would amend Republic Act (RA) 8178. Arroyo, in proposing the figure, argued that the Philippines should interpret international agreements to its advantage and that a high bound tariff rate would afford the government trade “flexibilities.”

fact that the country’s forest cover decreased by 328,682 hectares from the 7.17 million hectares in 2003 to 6.84 hectares in 2010, or an annual forest cover loss of 46,954 hectares. He cited the importance of implementing and sustaining a massive reforestation activity, such as the National Greening Program, to ensure water resources. Velasco said under his watch, the MWSS will work with other government agencies to rehabilitate, protect and conserve six of the 143 critical watersheds—Angat, Ipo, La Mesa, Umiray, Marikina and Laguna Lake watershed—to ensure water supply for Metro Manila. The MWSS is pushing for the Annual Million Tree Challenge, a reforestation project to benefit the six critical watersheds. The target is to plant a million trees until the duration of the Duterte administration. The ongoing project is backed by nongovernmental groups like the Philippine Waterworks Association and Wild Bird Photographers of the Philippines, among others, and the local government units of General Nakar, Quezon, and Bulacan province.

IN an interview, Velasco told the BusinessMirror of the various ongoing initiatives the Duterte administration is undertaking to prepare the country from the worst-case scenario, such as in the event of the long dry season resulting in drought and a watersupply shortage. The worse-case scenario is an earthquake that could cause the Angat Dam to collapse, thereby inadvertently wasting the reserved water in Bulacan. While the dam is undergoing structural rehabilitation, he said, the government is “prudently

looking at ways” to reduce dependency on Angat and enhance water security and sustainability through the Kaliwa Dam and other projects that will boost the supply of water for Metro Manila and nearby provinces. Velasco described the construction of the Kaliwa Dam as a “necessity” to ensure alternative supply of clean, drinking water for domestic use in case the Angat Dam is rendered ineffective because of its deteriorating status. See related story on B1. The dam is already silted, reducing its capacity to impound more water. The dam is also prone to collapse in case of a strong earthquake, which, he said, may happen anytime. “Right now, our supply from Angat is enough to support our need. But in the next few years, with the growing population and the impact of climate change, it may no longer suffice,” Velasco told the BusinessM irror. “What we are preparing for is a natural disaster that may endanger our main and only water source. In case of the ‘Big One,’ this early, we must find other sources of clean water that will be enough for the next 30 to 50 years.” Even with the construction of the Kaliwa Dam, Velasco said he will not recommend the decommissioning of the Angat Dam, saying it may still serve its purpose. He added the government considers the ongoing rehabilitation of the dam as being done by “experts.” The rehabilitation, Velasco explained, is expected to reinforce the structure for the dam to last longer and provide water and irrigation as it has done in the past decades. “No, not yet. We will still have some use for it,” he said. Velasco was referring to the Angat Dam and Dyke Strengthening Project to ensure the Angat Dam’s stability and safety to withstand the potential risk posed by possible seismic activity associated with the West Valley Fault.

putting up economic zones have also helped propped up investment figures during the 10-month period. In terms of workers employed in Peza-accredited zones and locators as of September, data from the agency showed there was an increase of 4.47 percent. During the period, Peza zones and locators employed 1.37 million, higher than the 1.32 million recorded last year. The value of exports from Peza locators rose by 9.66 percent to $37.97 billion in January to September, from $34.63 billion in the same period last year. Despite the general increase in overall investments, investment pledges in the information-

technology (IT) sector continue to tumble due to uncertainty over fiscal incentives. Government data showed investments in the business-process outsourcing sector declined by 8.4 percent in the January-to-October period. Investments reached P14.4 billion in the 10-month period, lower than the P15.73 billion recorded last year. The number of projects also fell to 183 from 168 seen last year. The value of IT service exports declined slightly to $8.023 billion, from $ 8.1 billion in 2016. Despite this, workers directly employed by IT sector rose to 658,892 in January to September, from last year’s 633,393.

However, Serrano said WTO member-countries will not accept such justifications, as the Philippines is expected to follow and respect the provisions provided under the AoA in converting nontariff measures, such as quantitative restrictions (QR). Annex 5 of the AoA states that the tariff equivalent of converting any nontariff measures shall be based on the difference between the domestic price and international price (cost, insurance and freight unit value, or CIF) of the commodity for 1986 to 1988. Paragraph 10 of the Annex 5 states that the tariff equivalent coming from the formula “shall be bound in the schedule of the member concerned.” Bound tariffs are maximum tariff rates that a WTO member-country could impose on a certain commodity. Serrano’s proposal was supported by officials from the Tariff Commission, National Economic and Development Authority (Neda), Department of Foreign Affairs, and was eventually approved by the committee. The Committee on Agriculture and Food has approved on its first meeting the substitute bill that seeks to amend RA 8178, which allowed the government to regulate the entry of imported rice via the QR scheme. Under the substitute bill, the Philippines will

impose a bound tariff rate of 35 percent for rice originating from the Asean region, regardless of its volume. Manila would also impose a 40-percent bound tariff most-favored nation (MFN) rate for inquota rice imports from countries that do not belong to the Asean. Once the substitute bill is enacted into law, the country’s MAV for rice shall revert to its 2012 level at 350,000 metric tons (MT), from the current 805,000 MT. Panganiban vowed to fast-track the passage of the substitute bill that would allow the country to convert its QR on rice into tariffs. He revealed that the lower chamber is planning to approve the bill on third and final reading before the year ends. “We will fast-track the approval of this measure and approve it before our Christmas break on December 16,” Panganiban told the BusinessMirror. The passage of the law allowing the tariffication of rice is included in the priority bills identified as urgent by the Legislative-Executive Development Advisory Council this year. However, Panganiban said the bill will be submitted first to the House Committee on Ways and Means for another round of deliberations. Under the rules of the lower chamber, all matters directly and principally relating to the fiscal, monetary and financial affairs of the national government, including tariff, taxation, revenues, borrowing, credit and bonded indebtedness shall undergo deliberation by the ways and means committee. Earlier, Socioeconomic Planning Secretary Ernesto M. Prenia told the BusinessMirror that the President’s economic team would like Congress to pass the law scrapping the QR by the end of the year so the country can start imposing rice tariffs by the first quarter of 2018. The authority to set bound tariffs is vested in Congress. But, under the Customs Modernization and Tariff Act, the President, upon the recommendation of the Neda, has the power to modify the tariffs applied on Philippine imports. The Philippines is under pressure to convert its QR on rice into ordinary customs duties after its waiver on the special treatment on rice expired on June 30. The WTO General Council approved the waiver, which allowed Manila to keep its rice QR until June 30, on the condition that the Philippines will subject its rice imports to ordinary custom duties by July 1. In March the Philippines informed WTO members that it is facing delays in converting the QR because it has not amended RA 8178, which imposed the import caps on rice indefinitely. As a sign of “goodwill” to its trading partners, President Duterte signed Executive Order 23 in July to extend the concessions made by the Philippines in securing the waiver in 2014.

Disaster preparedness

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Returning MRT to private group not an option Continued from A1

mismo ang humingi ng paumanhin dahil nga doon sa palaging pagsira ng ating MRT, [First of all, we are not washing our hands on that matter. We are accepting the challenge on the MRT and the President himself has apologized for the inconvenience it caused the public],” Roque said. However, Roque said it cannot be denied much of the blame on the MRT fiasco should be laid on the previous administration. Nonetheless, the Palace official assured the people that the government is doing everything to fix the railway facility in the face of rising discontent from the riding public. “With the President assuming that he will be responsible for the MRT, let us give the President the opportunity to rectify the many problems that his administration inherited from the past dispensation. But we accept the challenge,” Roque said. “We are moving forward and we promise better MRT to our riding public. We will show the same po-

litical will that the President has shown in his fight against illegal drugs, in his fight against corruption, in bringing this vital service of transportation to the people, as well,” Roque added. Aside from this, Roque said Transportation Secretary Arthur P. Tugade has Duterte’s “full trust and confidence,” as he implements remedial measures to alleviate the traffic crisis caused by the string of MRT breakdowns. “The President has said he will back up Secretary Tugade in whatever he may need to effect immediate reform of the MRT,” the Palace official revealed. Some lawmakers have called on the President to sack Tugade for the secretary’s failure to return the MRT to normalcy after more than one year in service. According to Party-list Rep. Gary C. Alejano of Magdalo, Duterte should now replace Tugade with a Cabinet member that “could deliver,” following the transportation chief’s “dismal performance” in addressing traffic congestion and MRT breakdowns.

Small stores, eateries start petition vs tax on SSBs Continued from A12

coffee farmers and manufacturing workers carry the burden.” The 300,000 signatures gathered on the ground through regional advocacy and petitiongathering initiatives of thousands of volunteers from stakeholders of sari-sari stores are expected to swell, as opposition to the sugary drinks tax gathers momentum with the pending approval of the Senate version this month. The “sweet tax” is part of the Tax Reform for Acceleration and Inclusion (TRAIN) bill, expected to be signed into law in December. Oppositors said the spirit of the bill—which intends to reduce income tax for minimum wage earners—might be completely diminished by the drastic increase in prices of basic commodities. Meanwhile, coffee far mers and the Philippine Association of Agriculturists (PA A) welcome the exclusion of 3-in-1 coffee from the SSB tax in Senate Bill 1592, which has been approved by the Senate Ways and Means Committee and is currently on second reading. According to the farmers, the

local output of green coffee beans, estimated at 23,000 tons annually, will not be put to a disadvantage compared to those of high-end coffee shops, whose products will not be taxed. SSBs, according to House Bill 5636, encompass all “nonalcoholic beverages that contain caloric sweeteners, added sugar, or artificial/noncaloric sweetener (may they be in liquid, syrup, concentrate, or solid form) that is added to water [or other liquids] to make a drink.” The proposal of the Senate bill is to levy a tax on SSBs at P10 per liter of volume capacity for beverages sweetened with local sugar, and P20 for those using high-fructose corn syrup or imported sugar.  The rates are scheduled to increase by 4 percent every year, starting from the year of predicted commencement in 2018. The measure effectively exempts beverages not sold as readyto-drink, premixed or sweetened, such as those sold in chain coffee shops. For the PAA, the exemption would mean a better chance to attain their industry’s growth projections. Catherine N. Pillas

China, Facebook to end days of duopoly in PHL telco industry–Palace

Continued from a12

However, the President later claimed it was he who instructed Salalima to leave the Cabinet for allegedly being partial to a private company. Nonetheless, Roque said the government will not cry over spilled milk, and will just carry on with what is in hand to provide the public better Internet service. “So, the good news is, the consumers can look forward now to better telecommunications, not just in terms of cellular technology, but also in terms of Internet speed, as well as access.” “This is the latest instance of the President proving that he has the political will to do what is necessary to benefit the Filipino people. I repeat, the announcement is that duopoly—that telecoms duopoly—is about to end with the entry of the Facebook subsidiary, as well as the offer by the President of the People’s Republic of China to operate the third telecoms carrier,” Roque added. According to Roque, Duterte has instructed the Office of the Executive Secretary to manage all

applications of Chinese telecom companies bidding to operate in the country. The Bases Conversion Development Authority (BCDA) will be shelling out P975 million to build the Luzon Bypass Infrastructure, a bypass route for an international submarine cable network to be built and used by Facebook—allowing the government to tap, in exchange, a  spectrum equivalent to 2 terabytes per second.  According to a BCDA source, who requested anonymity, the stateowned asset-disposition firm will be investing this amount in constructing the  bypass  route, plus two cable-landing stations in Poro Point and in Aurora, Baler. The passage will provide a secure and disturbance-free route for Facebookoperated submarine cables, which otherwise had to pass through the tumultuous Luzon Strait. The same source said that Facebook contacted the Philippine government to essentially seek right-of-way in the Luzon area, in exchange for the spectrum. With Catherine N. Pillas


The Nation BusinessMirror

www.businessmirror.com.ph

Editor: Vittorio V. Vitug • Tuesday, November 21, 2017 A3

Palace justifies Santiago’s ‘removal’ from DDB post

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By Elijah Felice E. Rosales

@alyasjah

he former head of the Dangerous Drugs Board (DDB) was not only removed for his statements against the Duterte administration’s war on drugs, but also due to alleged abuse of power and reported collaboration with drug lords, the President’s spokesman claimed on Monday.

Land of the giants Spectators watch and take pictures of papier-mâché giants dressed in Filipino costumes during a street parade in

Angono, Rizal, for the celebration of Higantes Festival 2017. These larger-than-life caricatures were said to have been used by Angono natives against Spanish oppressors as a form of protest. PNA photo by Joey O. Razon

Malacañang rejects calls to fire Tugade By Joel R. San Juan @jrsanjuan1573

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alacañang expressed its support on Monday for Department of Transportation (DOTr) Secretary Arthur P. Tugade, amid resignation calls for the transportation chief due to recent incidents involving the operations of the Metro Rail Transit 3 (MRT 3). The Palace added the government is “doing its best” to address MRT 3 problems that have accumulated for decades. A ccord i ng to P resident i a l Spokesman Harry L. Roque Jr., while the Palace understands public dismay over the MRT 3 system, calling for Tugade to resign will not solve the problem. “He [Tugade] enjoys the full trust and confidence of the President. The President has said he will back up Secretary Tugade in whatever he may need to effect immediate reform to the MRT [3],” Roque said at a news briefing.

Sabotage?

Justice Secretary Vitaliano N. Aguirre II, meanwhile, said he has officially ordered the National Bu-

reau of Investigation (NBI) to look into the possibility that sabotage was behind the decoupling incident of an MRT 3 train last week.   Aguire made the announcement in an interview with reporters at the NBI’s 81st founding anniversary celebration in Manila.   The DOJ chief said he has issued a department order for the NBI to conduct the probe following a request from the Department of Transportation (DOTr).   “My specific order is to continue looking into the sabotage angle, because there seems to be a basis for such. It is very remote that decoupling of coaches  would happen accidentally.… If there is no human intervention that is very, very hard to happen,” Aguirre said.   Although it is not impossible to happen, Aguirre added the NBI should look into whether the sabotage angle has basis. Roque also assured train commuters that President Duterte is not indifferent to the suffering of commuters, and that he will carry his brand of political will to improve the country’s public transportation system. “With the President assuming that

he will be responsible for the MRT 3, let us give the President the opportunity to rectify the many problems that his administration inherited from the past. We will show the same political will that the President has shown in his fight against illegal drugs, in his fight against corruption, in bringing this vital service of transportation to the people, as well,” he added.

Errors

While the woes of the MRT 3 system are the result of cumulative errors in policy and operational decisions made across previous administrations, Roque was quick to clarify that finger pointing is not the practice of the Duterte administration. “We are not resorting to finger pointing,” Roque said. The DOTr, he added, has already terminated the contract of Busan Universal Rail Inc., the system's maintenance contractor, citing poor performance and inefficiency, among others. Charges against officials responsible for the current state of the MRT 3 system have already been filed, demonstrating that failure to deliver on the responsibilities of public office carries consequences, and that those accountable will be held liable.

Sereno: Duterte, Alvarez behind impeachment moves against me

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MBATTLED Chief Justice Maria Lourdes A. Sereno  on Monday  expressed belief that President Duterte and House Speaker Pantaleon D. Alvarez are actually behind the bid to impeach her.   In an interview with ANC’s Headstart, Sereno said Duterte has openly sought her ouster based on his public pronouncements.   She noted that the last statement calling for her resignation came from Presidential Spokesman Harry L. Roque Jr.   Likewise, Sereno noted that Duterte’s previous pronouncements insinuating  that the impeachment against her has basis. “Of  course, everybody knows what he [Mr. Duterte] said during those moments and…I think at one time, he thought that…Atty. [Lorenzo] Gadon’s complaints regarding my extravagant lifestyle had some basis and then he kept quiet about it. So let us just say that I understand that he has also asked me and the Ombudsman to resign at the same time,” Sereno said.   “So does he have a hand in this impeachment? Well I go by his official pronouncement and I wish him

success as a President, but I hope he understands that checks and balances are very very important for any democracy,” she added.

‘No show’

Alvarez on Monday warned he would bar lawyers of Sereno from attending impeachment hearings if the chief magistrate chooses to ignore the summons  for her to appear in the lower chamber.  Alvarez issued the statement after the  lower chamber  invited Sereno to the House when the panel determines probable cause on the impeachment complaint against her on November 22. “If Sereno ignores our summons, we will continue with the committee hearing. We will consider the evidence, all the official documents, as we will be the prosecutor in the impeachment case in the Senate,” Alvarez said in a radio interview.    “I will not allow her lawyers to appear at the committee hearing. They have no business being there. They’re not the ones being impeached.  If Sereno were there, then they can accompany her. If the principal is not there, what’s their business attend-

ing the committee hearing if they were not invited?” he added. It can be recalled that, in September, Duterte dared Sereno and Ombudsman Conchita Carpio-Morales to resign with him.   Sereno said she has no idea on Mr. Duterte’s motive in pushing for her ouster considering that they never had any personal conflict.   “We have had no personal skirmish at all. The only time I remember that he made a remark against me was in connection with the letter I wrote to him in August of 2016, requesting that due process be afforded the judges,” she recalled.   Meanwhile, Sereno also hinted that Alvarez is pushing for her ouster as a way of getting back at her over the case of the Philippine International Air Terminals Co. Inc., the builder of the then-controversial Ninoy Aquino International Airport Terminal 3.   “I testified against the onerous terms of the contract that was signed between the government and PairCargo [later named Piatco], and Speaker Alvarez at the time was part of the committee that approved the terms of reference for the contract,” Sereno recalled. Joel R. San Juan

Presidential Spokesman Harry L. Roque Jr. said former DDB Chairman Dionisio R. Santiago was told to resign for allegedly being involved in various anomalies. This includes using taxpayers’ money for trips abroad and accepting favors and receiving gifts from drug lords. “I would like to confirm that General Santiago was let go by the President not only because of his statements on the [mega-rehabilitation] centers being a mistake. He was also let go because of complaints that General Santiago was using taxpayers’ money for junkets abroad,” Roque said in a news briefing. “One of the complaints that reached the President was a trip to Austria, where, in addition to bringing family members, General Santiago brought six of his closest personnel, including a girl Friday,” Roque added. Santiago resigned after receiving a call from Executive Secretary Salvador C. Medialdea telling him to vacate his DDB post upon the orders of President Duterte. The directive to resign came days after Santiago made public his statements against the construction of a

mega-rehabilitation center in Nueva Ecija, branding it as “impractical” and “a mistake.” However, Roque said there is more to the forced resignation than what appears on the surface, as Santiago was apparently involved in various anomalies. In a complaint letter filed by the employees union of the DDB, Santiago was accused of traveling to Vienna, Austria, allegedly with a “big delegation composed of him and his family and six unqualified and favorite DDB employees” to participate in “an ordinary narcotic drug intersessional meeting.” Aside from this, Santiago was also accused of going to the US with his “mistress” and select DDB employees purportedly on official business. Both trips, according to the employees union, were paid for by taxpayers’ money. Roque described the removal of Santiago as “a very strong message to the bureaucracy the President will not tolerate junkets, unnecessary travels abroad.” The Palace official also said Santiago “may have benefited from a house, which may have been given to him” by the slain Ozamiz City Mayor

Reynaldo Parojinog. Parojinog was killed in July by police forces serving six search warrants against his properties, leading to an exchange of gunfire that resulted to his death and of six others. “That shows his [Duterte’s] resolve against graft and corruption. As far as he is concerned, you don’t even have to be proven,” Roque said. “If you’re tainted in anyway by corruption, he will not hesitate to fire individuals,” Roque added.

I would like to confirm that General Santiago was let go by the President not only because of his statements on the [megarehabilitation] centers being a mistake. He was also let go because of complaints that General Santiago was using taxpayers’ money for junkets abroad.”­—Roque


Economy

A4 Tuesday, November 21, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

Lawmaker seeks clear delineation of powers between ERC and PCC

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By Lenie Lectura

@llectura

he Senate Committee on Energy is urging the Energy Regulatory Commission (ERC) and the Philippine Competition Commission (PCC) to clearly define their respective roles involving competition matters in the energy sector.

Committee Chairman Sen. Sherwin T. Gatchalian said there has to be a clear delineation of powers between the two. The Electric Power Industry Reform Act (Epira), the lawmaker said, gives ERC the power to enforce safeguards and promulgate rules and regulations to ensure and promote competition, encourage market development and customer choice, and discourage or penalize abuse of market power, cartelization, and any anticompetitive or discriminatory behavior. The Philippine Competition Act, on the other hand, gives PCC the power to enforce and regulate all competition-related issues. The enactment of Republic Act (RA) 10667, or the Philippine Competition Act specifies kinds of anti-competitive

agreements and situations of abuse of dominant position. “Given these two regulatory bodies with seemingly overlapping mandates, stakeholders are in a quandary as to which agency to approach when it comes to competition matters in the energy sector. As such, the ERC and PCC must come together to clarify matters of jurisdiction, which, in the future, prevent inconsistency in rulings,” Gatchalian said. This is first on the committee’s list of reforms meant to further enhance competition in the energy industry, as it noted that the Epira still remains to be fully implemented. “The Senate Committee on Energy recognizes gaps and limitations that can be addressed through

legislation and oversight to attain Epira’s objectives of competition leading to reliable, secure and affordable supply of electricity,” Gatchalian added. Earlier, the senator called on a review of the market-share limitation under the Epira to reflect the true state and foster competition in the power-generation industry. He said the metric used to determine market-share limitations should be reviewed. Under the Epira, market-share limitations prohibit generation companies from owning more than 30 percent of the installed capacity of a grid and more than 25 percent of the installed capacity of the national grid. The law specifies installed generating capacity as the measure in computing market shares. However, Gatchalian noted that this is not reflective of the true market power of a company since the installed ca-

pacity is different from the power generated and injected into the grid. In illustrating his point, the lawmaker said the share of coal in the country’s total installed capacity is approximately 35 percent, but its share in actual generation is 48 percent. For natural gas, its installed capacity is only 16 percent but its actual generation is 22 percent. “As a consequence, the use of installed generating capacity underestimates the true market share of a company, especially if its plants have comparatively higher capacity factors,” Gatchalian said. He added that almost 60 percent of the installed energy capacity is controlled only by three firms. In his presentation, the lawmaker said First Gen Corp. of the Lopez Group corners 19.63 percent market share, the San Miguel Group with 18.73 percent share and the Aboitiz Group with 17.48 percent, totaling 55.84 percent for the three firms.

Given these two regulatory bodies [ERC and PCC] with seemingly overlapping mandates, stakeholders are in a quandary as to which agency to approach when it comes to competition matters in the energy sector.”­—Gatchalian

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Angara pushes all-year-round multiple student-fare discount By Butch Fernandez @butchfBM

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en. Juan Edgardo M. Angara asked Congress on Monday to fast-track passage of a bill granting over 20 million privateand public-school students an allyear-round multiple fare discounts when they travel on airplanes, ships, railways and land transports. Prodding Congress to wrap an “early Christmas gift” for all students, Angara’s committee on education, endorsed early plenary approval of a remedial legislation expanding coverage of the existing 20-percent fare discounts for students. “This [Senate Bill 1597] will be an early Christmas gift to our students,” Angara said, adding its early enactment into law will also mean “savings for parents, as they not only pay for tuition and other school fees but also the students’ transportation to and from their schools, apart from their meal allowance,” he added. Angara affirmed that this legislation “will definitely bring a sigh of relief not just to over 20 million public and private students, but to also their families,” adding that  “this is especially more significant to the beneficiaries belonging to the indigent and underprivileged sector that rely on public-transport services.” Once enacted into law, all students enrolled in basic and tertiary education institutions, including technical-vocational institutions, will be entitled to a 20 percent dis-

count on regular domestic travel fare, including jeepneys, buses, utility vehicle express vans, taxis and transport-network vehicle services Grab and Uber, Metro Rail and Light Rail Transits and domestic flights, upon presentation of their duly issued school identification card or current validated enrollment forms. “Such discount will be effective throughout the year, including weekends, summer breaks and holidays,” Angara added. For instance, he said, students going home to Davao can save up to P2,000 on their round-trip airfare which currently costs about P10,000.  The Senator warned that the proposal includes a penalty provision, where land, water, air and rail transportation utilities that refuse to grant the student discount will be penalized with a fine ranging from P5,000 to P200,000.  He, however, clarified that students taking up post-graduate studies such as medicine, law, masteral and doctoral degrees, and other short term courses of  seminar type would not be qualified to enjoy the expanded student fare discounts. The senator also said Filipino students traveling abroad for education, training and competition will be exempted from paying travel tax upon presentation of proof or documentation of intended purpose. But he also clarified the proposed law will prohibit availment of double discounts or combination of the student fare discount with other existing discount programs.

House leaders assure passage of Ledac priority bills by Dec By Jovee Marie N. dela Cruz @joveemarie

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Star boy

As other children leisurely enjoy the weekend break, this boy keeps himself busy by putting some finishing touches to a Christmas lantern, which his family sells along Quirino Avenue in Las Piñas City, last Sunday. Christmas lanterns sell like hotcakes during this time of the year. PNA photo Avito C. Dalan

OUSE leaders on Monday vowed to pass the priority bills of the Legislative-Executive Development Advisory Council (Ledac) before the year ends. At a news conference, Deputy Speaker Sharon S. Garin of AambisOwa and    Deputy Speaker Gwendolyn Garcia of Cebu gave the assurance amid  hearings of the committee on justice on the determination of probable cause of the impeachment complaint filed against Supreme Court Chief Justice Maria Lourdes Sereno. Garin said they do not anticipate the other committees to be stagnant just because the committee on justice will be busy acting on the impeachment complaint against Sereno. “We have 56 standing committees that are very active. In fact, despite having finished the [2018] budget [bill] early which was time-consuming, we also have finished the tax reform [bill] here in the House at the same time. So even if we have the impeachment [proceedings], it does not mean everything stops,” Garin said. Garin added the House remains on track with its legislative agenda, approving 7 of its nine priority measures. “We have approved on third and final reading seven out of the said nine priority bills of the Ledac,” she said. Garin added the House will exert all efforts to pass these pending measures under the Common Legislative Priorities of Congress within the four weeks of session days before Congress

adjourns for the Christmas break. AccordingtoGarin,thetwomeasures, whicharependingbeforethelowerchamber’sfinalapproval,aretheproposedEase of Doing Business Act or the House Bill 6579 and the National Transport Act or the House Bill (HB) 6425. “The House approved on second reading its version of   Ease of Doing Business Act on October 10. There is a good change the House of Representatives may be able to pass this measure on third and final reading in the remaining session days of the year,” she said.  The lower chamber has already approved HB 6579 on second reading. The Senate already passed its version of the bill, or the Expanded Anti-Red Tape Act of 2017, on third and final reading.  House Committee on Trade and Industry Chairman Ferjenel Biron of the FourthDistrictofIloilosaidthebillwould simplify issuances of licenses, clearances or permits to business entities.  “The purpose of this bill is to provide an easy, simple, straightforward and trouble-free avenue for entrepreneurs, micro, small and medium businesses and ordinary citizens who would like to venture into business in the country,” he said.  With its 12th largest population and the 43rd largest economy in the world, Rep. Luis Raymund F. Villafuerte of the Second District of Camarines Sur, the panel vice chairman and one of the authors of the bill, said the Philippines ranked as the second most favored destination for foreign direct investment in Southeast Asia. However, Villafuerte said the Phil-

ippines’s rank in ease of doing business is one of the lowest in the world at 171st out of 185 countries this year. Earlier, the  World Bank released its “Ease of Doing Business Report 2018,” which showed that the country’s ranking fell to 113th from 99th in the 2017 edition.    Moreover, Garin added the proposed National Transport Act is currently under the period of sponsorship by the Committee on Transportation and the Committee on Appropriations. Last year President Duterte asked Congress to grant him emergency power to address the growing vehicular traffic problem in the National Capital Region and major cities in the country. The bill was authored by House Speaker Pantaleon D. Alvarez, Majority Leader Rodolfo C. Fariñas and Transportation Committee Chairman Rep. Cesar V. Sarmiento of the Lone District of Catanduanes. One of the salient features the measure is Section 5 (Reorganization and Covered Agencies) which names the transportation secretary as de officio traffic chief during the effectivity of the Act, vested with full power and authority as enumerated in the act to streamline the management of traffic and transportation and control road use in the identified metropolitan areas. The traffic chief shall have the power of supervision and control over the Metropolitan Manila Development Authority; Cebu Coordinating Council, as created under Section 9 of the Act; Philippine National Police-Traffic Management Group; Land Transportation Office; Land Transportation and

Franchising Regulatory Board; Road Board; all other executive agencies, bureaus and offices with roles pertaining to land transportation regulation; and Davao Traffic Administrator. The traffic chief, as alter ego of the President, shall have power of supervision over all local government units within the metropolitan areas. The traffic chief shall formulate, coordinate and monitor policies, standards, programs and projects to rationalize existing public-transport operations, infrastructure requirements, the use of thoroughfares, safe movement of persons and goods, the administration and implementation of all traffic-enforcement operations, traffic engineering services and traffic-education programs. Meanwhile, Garin said the seven priority bills approved on third and final reading by the House are the: Comprehensive Tax Reform Program (HB 5636); Utilization of the Coconut Levy Fund (HB 7545); United National (ID) Identification System Act (HB 6621); Strengthening the Balik-Scientist Program (HB 65792); Occupational Safety and Health Standards Compliance Act (HB ​64); Enhanced Universal Health Care Act (HB 5784); and Amendments to the Public Service Act. “These were approved despite the fact that we were busy with the [national] budget. Right now, we still have 21 more priority bills which were agreed upon during the periodic House-Senate Leadership Meet held on October 4 to identify six measures that we would try to pass before the end of the year,” Garin said.

‘Fund lack’ stalls mandatory installation of VMS on commercial fishing boats By Jonathan L. Mayuga @jonlmayuga

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he installation of satellitebased vessel-monitoring system (VMS) and radio frequency-based vessel-monitoring mechanism (VMM) may have to wait a little longer, said Oceana Philippines, a not-for-profit organization. Gloria Estenzo-Ramos, vice president of Oceana Philippines, told the BusinessMirror that the Department of Agriculture-Bureau of Fisheries and Aquatic Resources (DA-BFAR)

has stopped allocating funds for the mandatory public consultations, which are part of the process for the final cut of the draft implementing rules and regulation (IRR) of Republic Act 10654, or the Amended Fisheries Code of the Philippines. “The consultation was stopped in September because there is no more fundforthepublicconsultations. Idon’t believe it.  I cannot believe it,” said Ramos, an environmental advocate. Ramos added the public consultation with stakeholders is important to inform the affected sectors of the

provisions of the law. Sans IRR, the provision mandating the installation of VMS or VMM for commercial fishing vessels, especially for vessels with 2.1 gross tonnage (GT) to 30 GT, will be stalled, she said, adding that the installation is already delayed for two years. “We are very happy that the BFAR, after two years since the law was amended, created the technical working group to craft the IRR, especially for 2.1 [tonnage] to 30 tonnage. There is already a draft IRR.  Unfortunately, we were told there

was no more budget,” she said. The installation of vessel-monitoring devices for commercial fishing vessels is supposed to be implemented by this year.  “The law is very clear:  All commercial fishing vessels should have vessel monitoring. Without this, there should be no permit,” she added. Ramos suspected that some quarters are exerting effort to stall the mandatory installation of vessel-monitoring device, as she reminded the DA-BFAR that it may be held liable for failing to perform

is duties and responsibilities as mandated by law. Ramos, a lawyer, said even citizens can file suit against the government for not doing their job. The government, she added, should also not worry about being slapped with a suit by those who are out to stall the implementation of the Amended Fisheries Code, particularly the installation of vesselmonitoring device, saying there is already an anti-SLAPP, or strategic lawsuit against public participation law against malicious prosecution.

“We call the attention of everyone. There is a provision on citizen suit.  Citizens can file suit against the government for not doing their job.  It is also anti-SLAPP against malicious prosecution.  The BFAR should be the ones implementing this together with local government units,” she said. “We don’t buy the argument that there’s no more budget when it can award P30 million for MMK,” referring to the Malinis at Masaganang Karapatan, a DA-BFAR program in search of outstanding coastal communities.


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Banking&Finance BusinessMirror

Editor: Jun B. Vallecera • Tuesday, November 21, 2017

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PHL continues to bleed dollars in October

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By Bianca Cuaresma

@BcuaresmaBM

he balance of payments (BOP), or what is left after the country’s foreigncurrency expenses are deducted from its foreign-exchange earnings, stood as a deficit over 10 months this year, the Bangko Sentral ng Pilipinas (BSP) said on Monday.

The imbalance as of end-October showed a net outflow aggregating $1.735 billion. In October alone, the BOP imbalance stood at $368 million, the largest over three months, as consequence of so-called forex operations of the BSP and pay downs on maturing obligations of the national government. The BOP is the summary of the country’s transactions with the rest of the world. A deficit means more dollars exiting the

country than coming in. The $368-million deficit in October was the thinnest since July and a reversal from the previous month’s surplus of $24 million but larger than the previous year’s $183-million deficit. The 10-month BOP shortfall of $1.735 billion was a significant decline from the $1.465-billion surplus reported in the same January-to-October period last year. The Central Bank traced the outflows

to the forex operations of the BSP and payments made by the national government for its maturing forex obligations during the month in review. The deficit could have been larger, the BSP said, if not partially offset by net foreign currency deposits of the national government and income from BSP’s investments abroad. The Central Bank has since vowed to maintain “strategic presence” in the country’s forex market to smoothen so-called excess volatilities arising from market movements. In October the local currency notably weakened, averaging P51.343 per dollar during the month, data from the BSP showed. This was weaker than the P51.009 per dollar average the previous month and P51.238 per dollar in the first 20 days of November. The peso has reverted to P50 per dollar in recent days, with latest data showing P50.79 per dollar on Monday. This was stronger than trades averaging P50.95 per dollar the previous trading day.

Hiked pensions boost 9-month SSS benefits payout

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he benefit payouts of the Social Security System (SSS) increased by more than 30 percent to P127 billion as of the third quarter that executives traced to the release of the additional P1,000 in pensions for members promised earlier by President Duterte. According to SSS President and CEO Emmanuel F. Dooc, the higher benefit payments compared with only P98.06 billion reported in the same period in 2016. “The increase in benefit payouts was higher due to the release of the P1,000 additional benefit amounting to P24.03 billion from January to October 2017 and the third tranche of pension adjustments arising from the unlumping of 1985 to 1989 contributions amounting to P72.43 million,” Dooc said. The third tranche of pension adjustments for retirees, death and disability pensioners prior to May 24, 1997, or the implementation of the Republic Act (RA) 8282, or the Social Security Law of 1997, was credited to accounts of qualified pensioners on June 29. The first and second tranche of pension adjustments for retirees, death and disability pensioners, after the implementation of R A 8282, were already released last year. Broken down, payments for retirement benefit increased by 26.75 percent to P73.65 billion; followed by death-benefit payouts with a 43.51-percent increase,

to P40.17 billion; and disability-benefit payments with a 9.24-percent increase to P4.52 billion. Disability, funeral and sickness-benefit expenditures also increased by 42.8 percent to P4.64 billion; 6.09 percent to P2.85 billion; and 8.47 percent to P1.95 billion, respectively. Medical and rehabilitation services showed a contraction by 13.47 percent and 20.36 percent, to P9.7 million and P1.1 million, respectively. SSS operating expenses also fell by 0.05 percent to P6.48 billion, bringing total expenditures over nine months to P134.26 billion, or 28.43 percent higher than the P104.54 billion in the same period a year earlier. SSS total revenues at end-September jumped by 10.72 percent to P146.17 billion, from P131.97 billion in 2016.

Member contributions representing 81.8 percent of total revenues amounted to P119.5 billion, up 11.31 percent from P107.36 billion in 2016. “The increase in our contribution was due to the aggressive contribution collection drive of SSS, like our recently launched Run After Contribution Evaders and linkages with various professional sectors,” he said. According to Dooc, collections from the employed sector showed the largest haul of P103.1 billion, followed by voluntary paying members of P10.98 billion and the self-employed of another P5.42 billion. Investment and other income over nine months representing 18.2 percent of total revenue was 8.16 percent higher to P26.62 billion, from 2016’s P24.61 billion. Pension-fund assets total P511.72 billion, an expansion by 7.4 percent from P476.40 billion traced to the increase in investments and cash equivalents. SSS’s investment reserve funds as of September stood at P490.32 billion, or 5.6 percent higher than the P464.42 billion recorded in 2016. In January this year, President Duterte approved a P2,000 across-the-board pension hike for SSS members in two tranches at P1,000 per tranche. Social Security Commission Chairman Amado D. Valdez said the first P1,000 took effect in January, while the second adjustment would be in 2022 or earlier.

Fintech firm preselling cryptocurrency for retail markets

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intech service firm Appsolutely begins preselling LoyalCoin (LYL) cryptocurrency as a prelude to its token-generating event on December 11. Appsolutely will release 4.75 billion LYLs to the public. Currently, $1 can buy 250 LYL, while P1 can buy 5 LYL. The public event will enable merchants, retailers and even consumers to purchase LYLs that can be traded with Appsolutely partners.   “ This presale event is intended to build the company’s capacity among consumers and retailers, especially as we see LYL becoming a mainstream digital currency for a variety of services,” according to Patrick Palacios, Appsolutely CEO. Appsolutely, a company with extensive

experience in digital loyalty and platforms and an impressive portfolio of major retail clients, recently developed blockchainenabled services as the next-generation solution to customer loyalty. The company is firming up its vision of a universal loyalty points system across service-oriented companies. Inspired by the growing global trend of an omnichannel loyalty economy among businesses, Appsolutely is taking their knowledge to develop a robust system that enables companies to engage customers and provide them with elevated levels of experience.    Citing a recent report by research firm KBV Research, Palacios said the loyalty management market is projected to grow $6.2 billion by 2023, or 18.6

Case clippings

By Justice S J Ranada Jr.

FORUM SHOPPING–refers to simultaneous remedies Forum shopping presupposes the availment of two or more simultaneous remedies, not to successive ones arising out of an error that may have been committed in good faith. Raising a matter to the correct forum employing the wrong mode or remedy, and then later resorting to the correct one, does not make an instance of forum shopping. The remedies of appeal and ex-parte petition for issuance of writ of possession are mutually exclusive and not alternative or successive. Sps Reyes v. Sps Chung 13 Sept. 2017

GR 228112 Velasco, J

percent more than at present. “This isn’t just a one-off trend; we’re seeing lots of opportunities as even merchants are becoming interested in transacting using cryptocurrencies, which are more secure and robust as a mode of payment,” Palacios said. The result of their research and development is a rewards ecosystem called LoyalPlatform, designed to enable companies to effectively adapt an omnichannel loyalty program and turn an otherwise deficient loyalty system into a more secure and value-based rewards program. LoyalPlatform is composed of a digital wallet, a series of white label apps, and a coalition of supporting merchants and vendors.   At the core of the LoyalPlatform is LYL, a secure, blockchain-based virtual currency that would serve as both denomination for rewards and avenue for exchange into other virtual currencies. LoyalCoin tokens are created on the NEM Blockchain Technology network, a powerful blockchain system that can process 4000 transactions per second, faster than other blockchain systems. With it, customers who are issued LYLs by retailers can redeem rewards from the source merchants or use the LYLs to purchase other products other than from the source retailers. Meanwhile, LYLs also help retailers by opening new revenue streams from surplus economic activity where points earned can be used to trade for other products and serv ices w ith other merchant partners.

Professional group, ING Bank name Limcaoco CFO of the Year By Kathryn Jose

@kathryntjose

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lobal financial-services firm ING Bank and finance professionals group Financial Executives Institute of the Philippines (Finex) announced on Monday Teodoro K. Limcaoco of Ayala Corp. as its 11th Chief Financial Officer of the Year. Limcaoco was chosen the ING-Finex CFO of the Year from among the country’s top financial executives in business, government and professional services that focus on social development, capital market growth, good governance, business ethics, education and small and medium enterprises. As the fifth awardee from the Ayala-led businesses, Limcaoco attributed his success to the diverse training opportunities the corporation has offered him in dealing with the challenges in consumer and institutional businesses and social development projects. Limcaoco took charge of various decision-maker positions for the corporation, including directorship of Globe Telecom Inc., Ayala Hotels Inc., Ayala Healthcare Holdings Inc., Ayala Aviation Corp. and Ayala Education Inc. However, he said his appointments as president of BPI Capital Corp. and the Bank of the Philippine Island’s thrift arm BPI Family Savings Bank was for him a solid foundation as CFO who can turn theories to practical applications, spot opportunities and troubles and devise efficient and appropriate growth strategies. “Aurelio ‘Gig’ Montinola III, former head of BPI, who took me in at the bank and allowed me to lead the BPI Cap team first and the BPI Family Bank team later, led by setting clear goals, coaching and challenging. I first disagreed with him when he yanked me out of BPI Cap after three and a half years to be a consumer banker, but Family Bank was where I learned the most,” Limcaoco said in his acceptance speech at the New World Hotel in Makati City. Limcaoco, who has been a banker for eight years now and served as president of the Chamber of Thrift Banks, board member of the Philippine Stock Exchange and Bankers Association of the Philippines and treasurer of the Ayala Foundation Inc. and Ayala Life Assurance Inc. and president of nonprofit social service organization Rotary Club in Makati West, learned that a CFO has more encompassing duties beyond managing a firm’s finances but also ensuring the health and well-being of all its stakeholders through business operations and culture. He said this combination would ultimately determine the top CFO in the after years as an agile CFO enabling change, this year’s award theme. “I have come to believe that my mindset has changed in that, while I still believe that, as managers, we report to our shareholders, our fiduciary responsibility belongs to the company—that is, we need to ensure the longevity and long-term sustainability of the organization we work for. This means that while shareholders have their interests, we need to also just as equally consider the interests of all stakeholders: employees, customers, suppliers, community—and if necessary, trade off short-term gains for long-term benefits,” Limcaoco said. Thus, he said the Ayala group under his leadership will further improve its operations, explore resources and consult with various communities, public and private sectors to create sustainable, inclusive and environmentally friendly spaces, products and services in the country. “Our commitment to work on the United Nation’s 17 Sustainable Development Goals [SDGs] is part of this effort and I encourage all to look into the SDGs,” Limcaoco said. Ayala Land, its real-estate develop-

Limcaoco

ment arm, was recently named the Most Socially Responsible Company of the Year at the Asia Corporate Excellence and Sustainability Awards in Singapore. “At Ayala, we are known for large businesses that touch many lives—Ayala Land, BPI, Globe, Manila Water. Lesser known are the nascent businesses we have today that touch a smaller number of lives but are no less important. I relish the fact that we are growing these businesses that make a difference in their communities,” Limcaoco said. Since he joined the Ayala Corp. in 1998, the business group has grown into a $10.7-billion company in asset terms, ranked 107th among the top global companies by Forbes in May and expanded into community-based projects, along with telecommunications, utilities, logistics, financial and insurance services. As CFO, Limcaoco also monitors the Family Doc clinics of the Ayalas that provides quality health care to rich and poorer families. He said a Family Doc clinic in Las Piñas was able to help a baby who suffered from severe dehydration as a consequence of diarrhea. “That Family Doc clinic in Fenina, Las Piñas cost P5 million to build, and every peso was worth it if only to save people like baby Emma and to educate mothers like Ma’am Sally. Today, we have 21 Family Doc clinics, and have aspirations to grow this network. I am grateful that, as Ayala CFO, I have the opportunity to work with the Family Doc team,” Limcaoco said. Thus, he said, he encourages younger future CFOs to develop values, such as social responsibility, to overcome the emerging challenges of financial executives who now must not only guide the CEOs but also lead with an overall strategy of the company for its various aspects. “The reality is this: The success of good governance is not because of rules but because of character. We need to spend more time with our potential successors and with our young professionals to let them realize that character is more important than technical skills,” he said. “As corporations and businesses evolve to be more responsible to all their stakeholders, so too will the responsibility of a CFO evolve to address and ensure the long-term sustainability of his or her business.  This is the challenge we all face and must prepare our successors to address.”


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Tuesday, November 21, 2017

briefs Suu Kyi blames world conflicts partly on illegal immigration

NAYPYITAW, Myanmar— Myanmar leader Aung San Suu Kyi said the world is facing instability and conflict in part because illegal immigration spreads terrorism in a speech on Monday that comes as her country is accused of violently pushing out hundreds of thousands of unwanted Rohingya Muslims. Suu Kyi did not directly mention the refugee exodus as she welcomed European and Asian foreign ministers to Naypyitaw, the capital of Myanmar. But her speech highlighted the views of many in Myanmar who see the Rohingya as illegal immigrants and blame the population for terrorist acts. The ongoing Rohingya exodus is sure to be raised by the visitors at the meetings held on Monday and Tuesday. AP

15 dead, 10 hurt in a stampede for food aid in Morocco MARRAKECH, Morocco—A stampede erupted while food aid was being distributed in a Moroccan village last Sunday and at least 15 people died and 10 were injured, authorities said. The crush took place in Sidi Boulalam as a local association was handing out food at a local weekly souk, or market, the interior ministry said in a statement. The town is in Essaouira province, which abuts the Atlantic coast southwest of Casablanca. King Mohammed VI has given instructions that “all measures be taken to help the victims and their families,” the ministry said. The king will pay for the hospitalization of the injured and burials of the dead, the statement added. AP

Keystone XL pipeline faces last major regulatory hurdle

LINCOLN, Nebraska—A Nebraska regulator is set to decide whether to approve the proposed route of the long-delayed Keystone XL oil pipeline through the state. The decision on Monday could have a big impact on whether TransCanada Corp. decides to proceed with construction of the project, which was first proposed in 2008 but repeatedly delayed. The five-member Nebraska Public Service Commission vote is the last major regulatory hurdle for Keystone XL, which was approved earlier this year by President Donald J. Trump in a reversal of the Obama administration’s rejection in 2015. Landowners along the route and environmentalists have opposed the project. Some businesses and unions have supported it as a job creator. The commission will not be allowed to take into account an oil spill on the existing Keystone pipeline last week. AP

Ex-President Pinera leads Chile vote, but faces runoff

SANTIAGO, Chile—Billionaire businessman Sebastian Pinera held a big lead late Sunday in returns from Chile’s presidential election, buoyed by support from Chileans who hope the former president can resuscitate a flagging economy, though he didn’t get enough votes to avoid a runoff. With just under 92 percent of ballots counted, Pinera had nearly 37 percent of the vote, against almost 23 percent for Sen. Alejandro Guillier, an independent center-left candidate, and 20 percent for Beatriz Sanchez, who ran for the leftist Broad Front coalition. Five other candidates shared the remainder. Pinera needed to get 50 percent of the votes to win outright. He will face the No. 2 finisher, which seemed likely to be Guillier, in a runoff election on December 17. Officials said late Sunday that further results would not come until during the day on Monday. AP

The World BusinessMirror

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Trump era sparks new debate about nuclear-war authority

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ASHINGTON—It’s hard to overstate how thoroughly the United States military has prepared for doomsday—the day America gets into a nuclear shooting war. No detail seems to have been overlooked. There’s even a designated “safe escape” door at the nuclear-warfighting headquarters near Omaha, Nebraska, through which the four-star commander would rush to a getaway plane moments before the first bomb hit. Procedures are in place for ensuring US nuclear weapons are ready for a presidential launch order in response to—or in anticipation of—a nuclear attack by North Korea or anyone else. There are backup procedures and backups for the backups. And yet, fundamental aspects of this nightmare sequence remain a mystery. For example, what would happen if an American president ordered a nuclear strike, for whatever reason, and the four-star general at Strategic Command balked or refused, believing it to be illegal? Robert Kehler, a retired general who once led that command, was asked this at a congressional hearing last week. His response: “You’d be in a very interesting constitutional situation.” By interesting, he seemed to mean puzzling. Brian McKeon, a senior policy adviser in the Pentagon during the Obama administration, said a president’s first recourse would be to tell the defense secretary to order the reluctant commander to execute the launch order. “And then, if the commander still resisted,” McKeon said as rubbed his chin, “you either get a new secretary of defense or get a new commander.” The implication is that one way or another, the commander in chief would not be thwarted. The current head of Strategic Command, Gen. John Hyten, said last Saturday at the Halifax International Security Forum in

Canada that he would refuse a launch order from a president if he believed that order to be illegal. Hyten also predicted that the president would then ask him for options that Hyten judged to be legal. Bruce Blair, a former nuclear missile launch officer and cofounder of the Global Zero group that advocates eliminating nuclear weapons, said the Kehler scenario misses a more important point: The Strategic Command chief might, in effect, be bypassed by the president. A president can transmit his nuclear-attack order directly to a Pentagon war room, Blair said. From there it would go to the men and women who would turn the launch keys. The renewed attention on these questions reflects unease—justified or not—about President Donald J. Trump’s temperament and whether he would act impulsively in a crisis. This past week’s Senate hearing was the first in Congress on presidential authority to use nuclear weapons since 1976, when a Democratic congressman from New York, Richard L. Ottinger, pushed for the United States to declare it would never initiate a nuclear war.

Gen. Robert Kehler, United States Air Force (retired) former commander of the US Strategic Command, testifies before Senate Foreign Relations Committee hearing on North Korea on Capitol Hill in Washington on November 14. AP/Pablo Martinez Monsivais

Ottinger said he wanted to “eliminate the prospect that human ignorance and potential human failure in the use of nuclear mater ia ls, especia l ly nuc lear weapons, will lead to the destruction of civilization.” Forty-one years later, the US hasn’t ruled out first-strike nuclear options and is unlikely to do so during Trump’s tenure. This troubles experts who worry about a president with the sole—some say unchecked—authority to initiate nuclear war. “We are concerned that the

We are concerned that the president of the United States is so unstable, is so volatile, has a decision-making process that is so quixotic, that he might order a nuclear-weapons strike that is wildly out of step with US national security interests.”—Murphy

president of the United States is so unstable, is so volatile, has a decision-making process that is so quixotic, that he might order a nuclear weapons strike that is wildly out of step with US national security interests,” said Sen. Chris Murphy, DemocratConnecticut, at the outset of last week ’s hearing. The committee chairman, Sen. Bob Corker, Republican-Tennessee, said he was not targeting Trump. But he, too, has publicly questioned whether Trump’s aggressive rhetoric toward North Korea and other countries could lead the US into a world war. In the end, Corker’s hearing produced little impetus for legislation to alter the presidential authorities. James Acton, codirector of the nuclear policy program at the Carnegie Endowment for International Peace, saw politics at play. “But I think it’s a genuinely important subject, and I think it’s one we should be debating irrespective of who the president is,” he said. Acton said a president rightly has unchecked authority to use

nuclear weapons in response to an actual or imminent nuclear attack. In his view, the president should otherwise be required to consult in advance with the secretaries of state and defense, and the attorney general, and get approval from two of the three before acting. Matthew Wa xman, a professor at Columbia Law School, says changes of this sort would put a va lu able c hec k on t he president and protect his nuclear author it y from potentia l militar y insubordination. Waxman and Richard Betts, director of the Saltzman Institute of War and Peace Studies at Columbia University, have a proposal: To order a nuclear first strike, the president would first have to get “certification” from the secretary of defense that the order is valid and authentic, and from the attorney general that it is legal. T hese added safeg uards wouldn’t risk delaying a response to an enemy attack in progress, Betts said. They would apply “only in situations where the United States is considering starting the nuclear war.” AP

economists say ‘Crocodile’ could replace Zimbabwe president WH the opioid crisis is much bigger than envisioned J T OH A N N E SBU RG — E m me r son Mnangagwa, elected last Sunday as the new leader of Zimbabwe’s ruling political party and positioned to take over as the country’s leader, has engineered a remarkable comeback using skills he no doubt learned from his longtime mentor, President Robert Mugabe. Mnangag wa ser ved for decades as Mugabe’s enforcer—a role that gave him a reputation for being astute, ruthless and effective at manipulating the levers of power. Among the population, he is more feared than popular, but he has strategically fostered a loyal support base within the military and security forces. A leading government figure since Zimbabwe’s independence in 1980, he became vice president in 2014 and is so widely known as the “Crocodile” that his supporters are called Team Lacoste for the brand’s crocodile logo. The 75-year-old “is smart and skillful, but will he be a panacea for Zimbabwe’s problems? Will he bring good governance and economic management? We’ll have to

watch this space,” said Piers Pigou, southern Africa expert for the International Crisis Group. Mugabe unwittingly set in motion the events that led to his own downfall, firing his vice president on November 6. Mnangagwa fled the country to avoid arrest while issuing a ringing statement, saying he would return to lead Zimbabwe. “Let us bury our differences and rebuild a new and prosperous Zimbabwe, a country that is tolerant to divergent views, a country that respects opinions of others, a country that does not isolate itself from the rest of the world because of one stubborn individual who believes he is entitled to rule this country until death,” he said in the November 8 statement. He has not been seen in public but is believed to be back in Zimbabwe. For weeks, Mnangagwa had been publicly demonized by Mugabe and his wife, Grace, so he had time to prepare his strategy. Within days of the vice president’s dismissal, his supporters in the military put Mugabe and his wife under house arrest.

When Mugabe refused to resign, a massive demonstration last Saturday brought thousands of people into the streets of the capital, Harare. It was not a spontaneous uprising. Thousands of professionally produced posters praising Mnangag wa and the military had been printed ahead of time. “It was not a last-minute operation,” Pigou said. “The demonstration was orchestrated.” At the same time, Mnangagwa’s allies in the ruling Zanu-PF party lobbied for the removal of Mugabe as the party leader. At a Central Committee meeting last Sunday, Mnangag wa was voted in as the new leader of the party, which had been led by Mugabe since 1977. In an interview with The Associated Press years ago, Mnangagwa was terse and stone-faced, backing up his reputation for saying little but acting decisively. Party insiders say that he can be charming and has friends of all colors. Mnangagwa joined the fight against white minority rule in Rhodesia while still a teen in the

1960s. In 1963 he received military training in Egypt and China. As one of the earliest guerrilla fighters against Ian Smith’s Rhodesian regime, he was captured, tortured and convicted of blowing up a locomotive in 1965. Sentenced to death by hanging, he was found to be under 21, and his punishment was commuted to 10 years in prison. He was jailed with other prominent nationalists including Mugabe. While imprisoned, Mnangagwa studied through a correspondence school. After his release in 1975, he went to Zambia, where he completed a law degree and started practicing. Soon he went to newly independent Marxist Mozambique, where he became Mugabe’s assistant and bodyguard. In 1979 he accompanied Mugabe to the Lancaster House talks in London that led to the end of Rhodesia and the birth of Zimbabwe. “Our relationship has over the years blossomed beyond that of master and servant to father and son,” Mnangagwa wrote this month of his relationship with Mugabe. AP

he opioid epidemic sweeping the United States is far costlier than once thought, with the economic impact of the crisis exceeding half a trillion dollars, according to a new report by White House economists. The epidemic cost the American economy $504 billion in 2015, which was the equivalent of 2.8 percent of GDP that year, according to the report by the Council of Economic Advisers (CEA). The White House’s figures are more than six times larger than a previous study because it incorporates the value of lives lost to the epidemic. The findings come less than a month after the Trump administration declared widespread opioid abuse a public health emergency, while stopping short of freeing up federal disaster funds to tackle the problem. A study released last year estimated the cost of the opioid crisis in 2013 at $79.9 billion, adjusted to 2015 dollars. The White House economists said prior research didn’t capture the full impact because it at times only measured healthcare expenditures or earnings lost from those who die—which overlooks “other valuable activities in life besides work.” The CEA also said it made adjustments to more accurately measure the number of opioid-related deaths, which often go underreported, and focused on illicit opioids, as well as prescription drugs. Bloomberg News


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Tuesday, November 21, 2017

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Japan’s best export performance since 2008 crisis rolls on J

apan’s exports grew by double digits for a fourth straight month in October, continuing the best year-to-date performance since the global financial crisis. The value of exports rose 14 percent from a year earlier (forecast 15.7  percent). Imports  increase 18.9 percent (forecast 20.2 percent). The trade surplus  was ¥285.4 billion ($2.6 billion), less than the forecast of ¥330 billion. I mprov i ng g loba l dem a nd has fueled strong growth in Japan’s exports throughout the year, with new smartphones creating demand for parts and machinery in recent months.  In the 10 months through October, Japan exported ¥64 trillion worth of goods, the most over that period in any year since 2008. This has helped drive Japan’s economy to seven straight quarterly expansions, while investors expecting growing earnings have pushed stock prices to multiyear highs.

Economists’ views

“Japan’s exports are on an increasing trend, thanks to a solid global recovery,” said Norio Miy agawa , sen ior econom i st at Mizuho Securities. “I think semiconductors related to the

production of the new iPhone are one of key drivers.” “We can count on exports as the engine driving Japan’s economy in coming quarters,” Miyagawa added, forecasting growth of 1 percent to 1.5 percent in the three months through December. “I do get the impression that the pace of growth in exports slowed down a little last month, but there’s still a steady underlying expansion,” said Atsushi Takeda, an economist at Itochu Corp. in Tokyo. “Overall semiconductors and autos lead exports, and for the moment it looks like we don’t need to be too worried about those sectors,” Takeda added.

Other details

Japan’s adjusted trade balance showed a surplus of ¥322.9 billion (forecast ¥206.7 billion). Exports to China, Japan’s largest trading partner, rose 26 percent from a year earlier. Those to the United States rose 7.1 percent. Shipments to the European Union climbed 15.8 percent. The volume of exports grew 3.8 percent from last October. While the value of exports has recovered to the levels of a decade ago, volumes are below those highs. Bloomberg News

South Korea to step up measures to boost women in top public posts

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outh Korea w il l unveil ne w mea su res a i med at increasing the number of women in high-ranking publicsector posts, part of an effort to bolster a work force that’s projected to st a r t shr in k ing this year. T h e c o u nt r y n e e d s m o r e women to work but the combination of excessive work hours and household responsibilities is discouraging them, said Chung Hyun-back, South Korea’s new minister of gender equality, in an interview with Bloomberg. The government will roll out a five-year plan on November 21 that will be more binding than its predecessor, which had set the 2017 ratio target for female public officials in senior positions at 15 percent, she added. “We believe that the more women are in high-level posts, the more it helps companies’ productivity,” Chung said. “We will lay out a specific target for 2022 and will continue monitoring whether we are able to reach the goal.” While the new measures only target the public sector, Chung expects private-sector companies to gradually follow suit. For now though, the private firms, especially family-run conglomerates, haven’t made much progress in the area, she said. Getting more women into the work force is an important goal for Korea, as an aging population is causing the number of workers to decrease. Data on executives suggest the way ahead won’t be easy: According to a Deloitte sur vey of 44 countries, Korea was ranked second from last in the ratio of women in board rooms. And women made up only 2.7 percent of about 15,000 executive-level officials in the top 500 companies in 2016, a report by the gender ministry showed. Out of the 500 companies, 336 didn’t have a single female at top positions. Chung, who was a history professor and a women’s rights activist before getting appointed to her current role three months ago,

is one of five ministers who are female out of total 17 appointed by South Korean President Moon Jae-in so far. Although that’s the most ever at the ministerial level, Moon has ways to go to meet his ultimate goal of filling half of his Cabinet with women.

‘Dokbak’ child care

Long work hou rs combi ned w ith societa l pressure to hand le a l l aspects of raising children are a big par t of the reason women’s careers are cut off earlier than those of men, according to Chung. Koreans worked 2,069 hours on average last year, the most after Mexico among 35 major countries, according to data from the Organization for Economic Cooperation and Development. The dilemma for hardworking women with children is called dokbak parenting in Korea, a reference to a term used in a local card game where one player gets stuck with all the losses. T h e o u t l o o k o u g ht t o b e more promising for women, w h o e x c e e d e d m e n i n nu m b e r s of ne w col le ge g r a du at e s i n 2 0 16 , a c c o r d i n g t o d a t a f rom t he K ore a n E du c at ion a l D e v e l o p m e nt I n s t it u t e . Sti l l, cha l lenges rema in. Many of them often leave the work force in their 30s to raise children, only to find few goods jobs available when they return years later, according to Chung.

Higher productivity

Improvements in the stat us of Sout h Korea n women have remained far behind the pace of the countr y’s economic grow th, and achiev ing gender equ a l it y cou ld cont r ibute to the South Korea’s productivity, Chung said. As things stand, women face hostility online from the countr y’s youth, who blame their high unemploy ment on more women entering the job market. That’s led to digital sex crimes, such as ta k ing pictures w ith hidden ca meras a nd post ing them online w ithout consent, Chung added. Bloomberg News

Thai shoppers driving emerging-market rally. Bloomberg

Thailand sees strong growth next year as GDP beats forecasts

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hailand’s economy grew faster than economists estimated last quarter and is on track for a strong year in 2018, underpinned by a pickup in exports and booming tourism. Highlights of the report show GDP rose 4.3 percent from a year ago, compared with the median estimate of 3.9 percent in a Bloomberg survey of economists. Compared with the previous three months, GDP rose a seasonally adjusted 1 percent in the third quarter, higher than the 0.7-percent median estimate After years of lagging its neighbors, Thailand’s economy is finally catching up with the economic boom in Southeast Asia, fueled by a global trade recovery and a flood of visitors from China. The end of a yearlong mourning period for King Bhumibol Adulyadej strengthens the outlook for consumer spending into next year, while the government is ramping up spending on infrastructure projects to support growth. The statistics agency said the economy would probably expand 3.9 percent for the whole of 2017, and 3.6 percent to 4.6 percent next year, supported by export growth of 5 percent. “Economic growth next year

4.3%

The percentage rise in Thailand’s GDP from a year ago, compared with the median estimate of 3.9 percent in a Bloomberg survey of economists

will accelerate from this year,” Porametee Vimolsiri, secretarygeneral of the statistics agency, or National Economic and Social Development Board, told reporters in Bangkok. “We may see 4-percent level, supported by an improving global economy, government investment and a clearer recovery of private investment. We will see improving employment and revenue.” Prime Minister Pray uth Chan- Ocha

has adopted measures to boost growth, including a 1.5-trillion baht ($46-billion) infrastructure spending plan, and tax breaks for year-end shopping. Thailand—under military rule since 2014—is on course for elections next year. “Growth is broadening with exports and tourism still doing the heavy lifting,” said Eugenia Victorino, an economist at Australia and New Zealand Banking Group Ltd. in Singapore. “Our 2017 GDP growth forecast of 3.5 percent now looks light and we will be revising it to reflect the endurance of the export recovery.”

Rate hike?

Thailand’s growth last quarter was supported by a 4.3-percent jump in manufacturing, a 6.7-percent expansion in hotels and restaurants and an 8.1-percent increase in the transport and storage industries. Private-consumption growth remained muted at 3.1-percent compared with 3-percent expansion in the second quarter, while investment rose 1.2 percent. The response by financial markets to the data was also subdued, with the benchmark stock index rising 0.2 percent as of 12 p.m. in Bangkok on Monday. Julian Wee, a senior market strategist in Singapore at National Australia Bank Ltd., said the GDP data showed “domestic demand might still be quite tepid” and investment showed “little sign of revival.” Econo-

mist Tamara Henderson said the pickup in third-quarter growth was broad-based and g row th has scope to be stronger still in fourth quarter with the end of the mourning period in October. Even so, the risk of Bank of Thailand tightening appears low. Drivers of growth for this year—especially better weather for farmers, new direct flights with China and the relocation of supply chains—may fade. At the same time, wages are falling, debt burdens for households and firms are elevated, nonperforming loans have increased and investment remains weak. Year-on-year growth rates for household spending and investment in third quarter were also not as strong as first quarter. Southeast Asian nations are enjoying a growth resurgence with expansion in Vietnam, the Philippines and Malaysia quickening. At the same time, it’s raising worries about inflation and questions about whether central banks in the region will need to tighten monetary policy soon. The Bank of Thailand has held its benchmark rate near a record low since 2015. Porametee, who is also a member of the central bank’s Monetary Policy Committee, played down any talk of rate hikes yet. “Fiscal and monetary policies will remain accommodative to ensure macro conditions are stable,” he said. “There is no need to rush on raising interest rates.” Bloomberg News

European cities battle fiercely for top agencies leaving UK

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RUSSELS—Brexit is still well over a year away, but t wo European cities on Monday will already be celebrating Britain’s departure from the European Union (EU). Two major European Union agencies now in London—the European Medicines Agency (EMA) and the European Banking Authority (EBA)—must move to a new EU city because Britain is leaving the bloc. The two prizes are being hotly fought over by most of the EU’s other 27 nations. Despite all the rigid rules and conditions the bloc imposed to try to make it a fair, objective decision, the process has turned into a deeply political beauty contest—part Olympic host city bidding, part Eurovision Song Contest. It will culminate in a secret vote on Monday at EU headquarters in Brussels that some say could be tainted by vote trading. The move involves tens of millions in annual

funding, about 1,000 top jobs with many more indirectly linked, prestige around the world and plenty of bragging rights for whichever leader can bring home the agencies. “I will throw my full weight behind this,” French President Emmanuel Macron said when he visited Lille, which is seeking to host the EMA once Britain leaves in the European Union in March 2019. “Now is the final rush.” At an EU summit last Friday in Goteborg, Sweden, leaders were lobbying each other to get support for their bids. The EMA is responsible for the scientific evaluation, supervision and safety monitoring of medicines in the European Union. It has around 890 staff and hosts more than 500 scientific meetings every year, attracting about 36,000 experts. The EBA, which has around 180 staff, monitors the regulation and supervision of Europe’s banking

sector. With bids coming in from everywhere—from the newest member-states to the EU’s founding nations—who gets what agency will also give an indication of the European Union’s future outlook. The EU was created as club of six founding nations some 60 years ago, so it’s logical that a great many key European Union institutions are still in nations like Germany, France and Belgium. But as the bloc kept expanded east and south into the 21st century, these new member-states see a prime opportunity now to claim one of these cherished EU headquarters, which cover everything from food safety to judicial cooperation to fisheries policy. Romania and Bulgaria were the last to join the European Union in 2007 and have no headquarters. Both now want the EMA—as does the tiny island nation of Malta. “We deserve this. Because as we all know, Romania is an EU member

with rights and obligations equal with all the rest of the memberstates,” Rodica Nassar of Romania’s health-care ministry said. But personnel at the EM A and EBA are highly skilled professionals, and many could be reluctant to move their careers and families from London to less prestigious locations. “You have to imagine, for example, for the banking authority, which relies on basically 200 very high-level experts in banking regulatory matters to move to another place,” Karel Lannoo of the Centre for European Policy Studies think tank said. “First of all, to motivate these people to move elsewhere. And then if you don’t manage to motivate these people, to find competent experts in another city.” As the vote nears, Milan and Bratislava are the favorites to win the EMA, with Frankfurt, and perhaps Dublin, leading the way for the EBA. AP


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The Regions

Tuesday, November 21, 2017 • Editor: Efleda P. Campos

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Capitol, Jica move for Cebu’s safe water By Charles R. Pepito

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Correspondent

HE Province of Cebu and the Japan International Cooperation Agency (Jica) are moving toward the management of safe water in the province.

The nine-member Jica survey team visited Cebu Gov. Hilario Davide III in a gesture that sets in motion positive deals to finally manage and dispose of Metro Cebu’s sewage mire. A septic, sludge-treatment facility, to be constructed in three key areas of the Metro, is also seen to highlight the welcome arrangement. Jica survey team head Mimpei Ito presented to Davide the initial report that evaluates the technical and economic viability of constructing these treatment facilities. Septic sludge treatment refers

to the process of disposing the slurry, residual, semisolid material produced as a by-product during sewage treatment. The facility will convert household wastewater into a runoff that will be returned to the water

cycle with minimal environmental impact. Once the treated wastewater saturates into the soil, it will be free from harmful coliform bacteria, viruses and nutrients, making Cebu’s underground water source safe for consumption. Once the practicability of the project is established, the Jica said the facilities will be constructed in preidentified areas of Metro Cebu identified as Center 1, which includes the area north of Cebu City and Mandaue City; Center 2 comprised of Cebu City south and Talisay City; while North 2 includes the towns of Consolacion, Liloan and Compostela. These facilities will dispatch vacuum trucks that will collect septic-waste plumbing produced from households‘ (bathroom, kitchen drains and laundry). Center 1 facility has the capacity to receive and treat waste from 212,000 households. Center 2 can pull from 202,000 homes, while North 2 can accumulate for 88,000 houses. The JICA survey schedule, which is set to start this month, has eight stages.

The first phase includes survey preparation, first field survey and first analysis. The second stage allows the second field survey and second analysis (to be held in Japan). The third field survey and the fourth field survey will include explanation of a draft report. The final stage is the submission of a final report to the Jica and the Philippine Government. The preparation in Cebu, Ito said, will run until April 2018, while survey analysis in Japan is scheduled from December 2017 to August 2018. The draft report to Philippine officials is set for August 2018, while the submission of the final report will be in November 2018. The report, however, did not specify the names of other Philippine officials, but mentioned Davide.   The Jica, as well as the official development assistance loans and aids, granted last year the Phi lippine Gover nment ’s request for the construction of a sludge-treatment project in Metro Cebu.

Two Filipino scientists join Davao City team to evaluate WTE facility in Japan By Manuel T. Cayon |

@awimailbox Mindanao Bureau Chief

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AVAO CITY—Two Filipino scientists, one of them a Balik-Scientist expert on waste-to-energy (WTE) facilities, are joining the Davao City government team to look at the operation of the facility in a medium-sized industrial city in Japan. The Japanese government offered to install the facilities here. The team would leave for the ocular study of the WTE facilities in Kitakyusu City of the Japanese prefecture of Fukuoka from November 26 to December 2. The Japanese tender was extended to Davao City following the disclosure that the sanitary landfill here has been filled to the brim, and the city environment body, the Watershed Coordinating Council, warned about the flow-

No ECC, no plant expansion for JG Summit in Batangas

ing out of the liquid seepage to the southern river system of the city. Chinkie Pelino Golle, executive director of the environment group Interface Development Interventions (Idis), said City Mayor Sara Duterte-Carpio gave two slots for the environmentalists to join the Japan visit. The mayor earlier listed Dr. Jorge Emmanuel, a former United Nations’s expert on WTE and who went back to work with the Department of Science and Technology under the Balik-Scientist program. Golle said Dr. Emmanuel was among the scientists the UN assigned to inspect and evaluate WTE facilities in different countries. The city government also took in Idis-recommended Dr. Doris Montecastro, the chief of the Ateneo de Davao University’s Department of Environmental Science.

The two scientists were expected to make their assessment and recommendation to the city “on whether or not it would be appropriate for the city’s waste disposal, and what would be its impact to the city.” The WTE facility was being offered as a grant to the city, she added “meaning that the city would not spend on its installation.” “The concern would be its maintenance and the cost of conducting the periodic tests on the impact to the air and the surroundings,” she said. Golle said Dr. Emmanuel already briefed Duterte-Carpio on the implication of putting up a WTE, citing a facility in Belgium that Emmanuel also inspected during his stint with the UN. Emmanuel told the mayor that Belgium used to enjoy better air quality before the facility was put

up, “but, in the months following its operation, there were changes in the air composition, suspecting the particles to have come from the facility.” “Another problem with the testing would be the cost. In Belgium the air-condition study cost the locality the equivalent of P500,000 for one test alone. Before, the locality conducted the test every quarter, but the changes in the air surrounding forced them to conduct it monthly,” she said. T he env ironment g roup EcoWaste Coalition earlier warned that many localities about to adapt or have accepted the WTE offer of foreign countries and organizations was its breaching the law against the use of incineration. However, some legislators already filed bills to amend the section on the Clean Air Act mentioning the ban on incinerators.

Hauslands Pampanga opens

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ATANGAS CITY—A petrochemical plant in this city would not expand its polymer plant and naphtha cracking plant in Barangay Simlong here sans the environmental compliance certificate (ECC) issued by the Department of Environment and Natural Resources (DENR). Batangas Public Information Office Chief Jenelyn Aguilera disclosed on Monday the DENR-Environment Management Bureau (DENR-EMB) and the City Environment and Natural Resources Office have been spearheading the public hearing on the project, which started last week attended by representatives from the city government, barangay officials, non-governmental organizations and concerned constituents. Aguilera said some local-village leaders and residents from Barangays Simlong, Pinamucan Ibaba and Pinamucan Proper also attended the public hearing where they expressed apprehensions and concerns on the petrochemical company’s project expansion. The ECC is a document issued by the DENR-EMB after their careful and positive review of any company’s application for environmentally critical projects, and certifies that the proposed project or undertaking will not cause significant negative environmental impact based on the representations of the proponent, including the affected residents. PNA

The Eve (left) and Sue model units at the Hauslands Pampanga

By Joey Pavia

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Correspondent

I T Y OF SA N FER NA NDO—The Hauslands Pampanga subdivision, about a two-minutes drive from the Mexico exit of the Northern Luzon Expressway has opened on November 17. It’s the first housing development of the Hausland brand, owned

Ric Gonzales

by the Development Corp. (HDC), a multiawarded Kapampangan homegrown developer for 30 years. The highly secured 16.9-hectare subdivision is at the portion of Barangay Panipuanin, Mexico, and Calulut in the City of San Fernando. To complement the future homeowners’ middle-class lifestyle, the development features amenities, such as the Pavilion, swimming

pool, basketball court, gym, landscaped parks and playground to be built in the coming months. Hundreds of guests graced the opening and were impressed by the model units. The five model units are called Bree, Liz, Eve, Sab and Sue. Preselling began on November 6. The HDC offered discounts for early reservations.

‘Peace Road’ in Gingoog to start construction soon

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INGOOG CITY—The implementation of a P65million farm-to-market road (FMR) of the Department of Agriculture’s Philippine Rural Development Project (DA-PRDP) in Gingoog City will be a fulfillment of the city government’s Peace Road Program, its top official said. The 5.56-kilometer San MiguelKalagonoy FMR is funded under PRDP’s Intensified Building Up of Infrastructure and Logistics for Development (I-BUILD) or infrastructure component. During the groundbreaking ceremony last month, Gingoog City Mayor Stella Marie Guingona said she formulated the Peace Road Program when she assumed the post of city mayor, “which has been a dream of the people in the rural barangays of Gingoog City for the longest time.” “Now that this is happening, we are inaugurating the groundbreaking of five FMR concreting projects,” she said. Along with the FMR of PRDP, Gingoog will also implement two other road projects from the DA worth P10.6 million each, and two from the Department of Public Works and Highways (DPWH) costing more than P60 million. Guingona promised “to continue until all the roads in the Gingoog are concreted.” DA-Regional Field Office 10 OIC-Regional Director Carlene Collado urged the contractor to speed up implementation of the FMR, since the fund is ready, and

the 15-percent mobilization fund is now available at the Program Support Office in Davao City. “We request the contractor to speed up implementation of the project. I also ask the support of the LGU of Gingoog and the barangay to closely monitor the implementation process, as we don’t allow this to be terminated if not properly implemented,” Collado said. He reminded them the policy in I-BUILD Operations Manual that if a project incurs more than 15-percent negative slippage, it can be considered for termination. If this happens, the total amount released from PRDP shall be fully refunded by the local government unit. Col lado sa id Gingoog Cit y should be able to perform well, having almost 25 percent out of the P738-million current I-BUILD portfolio for Misamis Oriental. “Aside from FMRs, the DA has more programs to implement, such as rice, corn, high-value crops, livestock and organic program, which you can avail [yourself of] to increase your productivity and income,” Collado said. Meanwhile, Guingona said that, along with the construction of FMRs, they are also giving farm inputs to the farmers to boost their production and harvest. Guingona also thanked the DA, DPWH and the Office of the Presidential Adviser on Peace Process for helping them bring the government closer to the people. Rosie Paasa/DA-PRDP RPCO 10

Preserving beauty of Boracay via proper sanitation, toilets

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N an effort to help preserve the beauty of Boracay, organizations partnered to build a public restroom facility that aims to promote proper sanitation and hygiene among locals and tourists in the island. Recently, the Manila Water Foundation (MWF) and Boracay Water officially turned over the public restroom located at Cagban Jetty Port, which serves as an important tourism and transportation facility used for the conveyance of people and cargo between Boracay Island and Barangay Caticlan, Malay, Aklan, to other ports in nearby cities and municipalities. Being one of the busiest ports in the region and a gateway for millions of tourists who visit the Island of Boracay, Cagban Jetty Port was in need of an additional toilet facility as cited by the Provincial Government of Aklan. With the help of Manila Water Foundation, the cofunding and technical expertise of Boracay Water and the land donation of the Provincial Government, the construction of the toilet facility, both for male and female with five water closets and three urinals, was made possible. Through the construction of the public restroom, it is expected that locals and tourists alike will have better access to sanitation facilities, which can positively contribute to the promotion of proper hygiene and improvement of public health. Aside from this effort, Boracay Water also recently constructed a lift station that aids the transportation of used water from low elevation sources toward sewagetreatment plants. Through this facility, it is ensured that used water from the public restroom

and other facilities near the Cagban Jetty Port will be treated and will be safe once it is discharged to the environment. Present during the turnover ceremony was MWF President Geodino Carpio, who shared more about the importance of having the public restroom and supporting sewage-treatment system in preserving the beauty of islands like Boracay. “If we’ll think about it, toilets are simple, ordinary things, but these are components of a large and complex infrastructure called the sewerage system. These facilities are very important in the collection, transport, treatment and safe disposal of sewage. If sewage is disposed without proper treatment, our natural resources, such as the bodies of water, will be placed in peril. With the construction of these facilities, we are happy to be able to contribute to the preservation of our environment and islands like Boracay,” he said. The public restroom at Cagban Jetty Port is the first sanitation project of MWF outside Luzon. With the completion of the said project, MWF was able to push for better water, sanitation and hygiene access for the Province of Aklan, which was also made possible through several engagements made in the last five years.  Among these initiatives were the provision of potable water to the communities of Sitio Nabaoy in Malay and Ati Community in Boracay, installation of drinking fountains and handwashing facilities in schools, police stations, hospitals and other public institutions in the province, and the promotion of proper handwashing through the celebration of the Global Handwashing Day.


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Strong support continues for Save Mayon Movement By Manly M. Ugalde Correspondent

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E G A Z P I C I T Y— S t r o n g support continues to pour for the Save Mayon Movement following the claim of Department of Public Works and Highways (DPWH) officials that they would push through with the construction of a circumferential road project believed to have encroached on the Mayon Volcano Protected Area. The Philippine Institute of Volca nolog y a nd Seismolog y (Phivolcs) and the Department of Environment and Natural Resources (DENR) have complained the road project is putting the protected site in danger, citing the rampant cutting of trees and the encroachment of Mayon’s protected area. E a rly - Oc tob e r, t he DEN R regional office issued the Cease and Desist Order (CDO) against the DPWH over the construction of the Mayon road project along barangay Bonga Bacacay that had no cutting permit and Environmental Clearance Certificate (ECC). Phivolcs also lashed at the project believed to have encroached the 6-kilometer Permanent Danger Zone (PDZ), which has long been declared “a no man’s land.” The circumferential road project and the reported rampant cutting of trees were exposed in the social media early-October, prompting Phivolcs and the DENR to take action. The DENR found that one of the three road- opening projects located at Barangay Buang, Tabaco City, has encroached on Mayon’s so-called protected area. The unnoticed Mayon project was started in June, said Simon Arias, District Engineer of the Albay First District. Mayon, Phivolcs said, is 261.4 kilometers in diameter. It remains under Alert Level 1 since its last eruption in 2015. In the past three weeks, Mayon jolted Albay after it registered dozens of volcanic tremors daily, which Albayanos described as an answer to the man-made destruction of Mayon in the guise of ecotourism and infra-development. The Save Mayon Movement was boosted after the Department of Tourism regional office issued a strong statement against the Mayon circumferential road project, which the DPWH began in the First District, in the villages of the towns of Bacacay, Malilipot and Tabaco City. Rommel Natanauan, chief of the Bicol Tourism Development and Regulations division, said the Mayon project is not included in the Tourism Infrastructure Project and is considered in violation of the National Protected Area System (NPAS) Act of 1992.

Albay Gov. Al Francis Bichara was not aware of any ongoing infrastructure projects around Mayon. Also, as chairman of the Regional Development Council (RDC), it also did not pass through the RDC, his spokesman, Danny Garcia said. Garcia added Mayon has been listed since 2016 for inclusion in the World Heritage. The draft dossier had been submitted to United Nations Educational, Scientific and Cultural Organization (Unesco) France early this year and was recommended for consideration by 2018. Asked about the stand of the governor on whether to stop the project, Garcia refused to answer. Save Mayon fears the proposed Mayon circumferential road, estimated to cost P7 billion, may affect Mayon’s application for Unesco World Heritage consideration for 2018. He said the project may only fall as another white elephant and may lead to often flooding in the lowland. DENR assistant regional director Robert Sheen said the DPWH Albay First District Engineering was sanctioned by the DENR in October over the uncovered logs in the project sites and the absence of an ECC that covers a P50,000 penalty, according to the CDO issued by Environment Management Bureau reg iona l director Eva Ocfemia. The DPWH identified the projects as the P50-million road opening in Barangay Bonga, Bacacay; the P10million road opening in San Roque, Malilipot town; and the P49- million road opening in Barangay Buang, Tabaco City. Arias said the road constructions are farm-to-market roads and outside the 6-km PDZ. He said the road construction is merely an extension of the old existing road in Barangay Bonga, which also serves as a route to the pilgrimage “apparition site” of the Virgin Mary. He said his office was not aware of a proposed circumferential road. Party-list Rep. Rodel M. Batocabe of AKO Bicol strongly defended the proposed Mayon circumferential road project in radio interviews, saying it would create a big impact on tourism in addition to infradevelopment. Save Mayon founding members Cesar Bañares, Karina Discaya and Rommel Aspe disputed the DPWH officials’ allegation of an existing old road at barangay Bonga, saying the road being constructed is 15 meters in width. They said the old road leading to the apparition site in the village of Barangay Bonga is vertical, starting from the national highway toward the crater, while the proposed Mayon circumferential road is horizontal that links to the Mayon Skyline Hotel at Barangay Buang.

Military forces rescue fishermen held captive by ASG in Tawi-Tawi since October By Rene Acosta @reneacostaBM

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IVE fishermen held by members of the Abu Sayyaf Group (ASG) since October were rescued by members of the military’s Joint Task Force Tawi-Tawi and the Naval Task Group of the Naval Forces Western Mindanao Command (NavForWem) over the weekend in Tawi-Tawi. A statement from the Armed Forces Western Mindanao Command said the kidnap victims were rescued at around 1:30 p.m.  last Friday  in the seawaters off Sugbay Island as a result of a thorough planning and buildup by the sailors and marines. The rescued fishermen were identified as Vergel Arquino from Davao City and Jushua Ybanez, Emo Fausto, Junald Minalang and Spriano Sordid, all from Pagadian City.   The victims, who were snatched on  October 14  near the coastal area of Poblacion Simbahan, Pangutaran, Sulu, were crew of the fish-

ing Boat Danvil 8. “The successful rescue was made possible due to the loose security of the captors,” said Brig. Gen. Custodio Parcon Jr., commander of the Joint Task Force Tawi-Tawi. In his report to Wesmincom commander Lt. Gen. Carlito Galvez Jr., NavForWem Commander Rear Adm. Rene Medina said they found the opportunity to rescue the victims after learning the captors were confused and on the run due to the continuing military operations in the area. “The timing was critical, since the captors may shoot the victims if they will know about the plan,” he added. “We were able to lead them to safety through our contacts, thus this rescue.” Galvez said the rescued victims would be turned over to their families. He cited the troops for their continuing operations against the ASG and their success in recovering the victims.

Tuesday, November 21, 2017 A9

‘Protectors of Tañon Strait’ files landmark case against ‘lucky 13’ for illegal fishing

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By Jonathan L. Mayuga

@jonlmayuga

HE “Protectors of Tañon Strait” recently filed criminal raps against 13 crew members of a commercial fishing vessel recently apprehended within the Tañon Strait Protected Seascape (TSPS), one of the country’s largest marine-protected areas. The 13, including the captain and his crew, are the first to be slapped with such protected-area case. The filing of the case at the Department of Justice (DOJ) for violation of environmental laws in a protected area pursuant to Republic Act (RA) 7586, or the National Integrated Protected Areas System Act came after various stakeholders in TSPS reaffirmed on November 15 their commitment to protect and conserve the territory in Dumaguete City.   Organized by Oceana Philippines, an ocean-conservation advocacy group, officials and rep-

resentatives of the Province of Negros Oriental, Philippine Navy, Philippine Coast Guard, Philippine National Police, Department of Environment and Natural ResourcesBiodiversity Management Bureau (DENR-BMB) through the TSPS Protected Area Office, Bureau of Fisheries and Aquatic Resources and other local government units held a news conference to announce the start of the closed fishing season for the mackerel, herrings and sardines in the Visayan Sea on the same day.   The three-month closed fishing season will end on  February

15 next year.   The group warned the TSPS that basically the entire Tañon Strait remains “off limits” to commercial fishing operations.    The TSPS serves as a breeding ground, playground and feeding ground for a good number of marine wildlife, including whales, sharks, dolphins and marine turtles. It is also the fishing ground of municipal fishers, but commercial fishing is banned within the Tañon Strait.    TSPS is a narrow strait that divides the islands of Negros and Cebu.  The TSPS is shared by 42 local government units from Negros Occidental, Negros Oriental and Cebu Provinces.   The DOJ has created a National Task Force of Special Prosecutors pursuant to RA 7586, to implement its mandate of efficient, effective and equitable administration of justice with a particular focus on protected areas.   This was borne out of the collaborative efforts of the DENR and its BMB, plus the DOJ to give life to the mandate of RA 7586 of providing speedy and efficient prosecution of cases, specifically for protected areas.

The law recognizes that effective administration and sustainable management of protected areas is “possible only through cooperation among national government, local government and concerned private organizations; that the use and enjoyment of these protected areas must be consistent with the principles of biological diversity and sustainable development.”   “This is a landmark moment that should help deter the that of prohibited acts, especially in ecologically critical areas, such as our protected areas,” Oceana Philippines Vice President Gloria Estenzo Ramos said in a statement.   “Illegal and destructive fishing dramatically destroys the vibrancy and productivity of our oceans—causing our country to lose about P44 billion in lost fishing revenues yearly,” added Ramos, an environmental lawyer.   President Duterte  promised to curb illegal fishing through stricter enforcement of marineand fisheries-related laws.   “With stricter law enforcement, more of the country’s marine resources can be protected to provide food and livelihood for our fellow Filipinos,” she said. 

PRDP okays ₧33-M cacao project in Zamboanga Story and photo by Sherwin Manual Contributor

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IÑAN,ZamboangadelNorte— Cacao production is seen to increase soon in the region with the Zamboanga del Norte’s Cacao Production and Marketing Enterprise project finally securing the go signal from the Department of Agriculture’s Philippine Rural Development Project (DA-PRDP). The project is hinged on a five-year business plan under PRDP’s Investment in Rural Enterprises and Agricultural and Fishery Productivity (I-REAP), the first I-REAP subproject implemented in Region 9, said Ferdinand Gamorot, I-REAP component head of the DA’s Regional Project Coordination Office. “It will be implemented in two separate packages amounting to P45.5 million, including the infrastructure component of the subproject,” he added. Package 1 is worth P33.9 million, consisting of infrastructure support and production, and farming support to cacao production. Package 2 costs P11.5 million, which will be allocated as enterprise capital for fermenting, drying and trading. Based on the business plan, Package II implementation will be in the third quarter of the second year of Package 1 implementation. “This is actually teamwork. This is the work of national, provincial and municipal levels, together with our farmer-beneficiaries,” Gamorot said during the groundbreaking ceremony for the construction of nursery and vermicast facility held recently in Barangay Segabe here. Gamorot commended the subproject’s proponent groups “The business plan was prepared thoroughly,” he added. Zamboanga del Norte Vice Gov. Senen Angeles expressed high hopes for this project’s success, saying, “This project is for the benefit of the proponents, the farmers.” “It’s not really very easy to have this project a reality now. We surpassed many challenges. In fact, we are very thankful that, with the concerted effort of our partners, the private proponents, we realized this project,” Angeles said. The P2.1-million nursery and

A FARMER readies seedbeds for cacao seedlings in this nursery in Piñan, Zamboanga del Norte. Nursery operations is one of the components of the P33million cacao-enterprise project in the province, with the aim of increasing production, improving postharvest support and marketing. The project will be implemented in two packages, the first one amounting to P33 million.

vermicast facility is part of the subproject’s infrastructure component under Package 1. The construction cost is shared at 80 percent from World Bank’s Loan Proceeds, while government of the Philippines and provincial local government units Zamboanga del Norte equally share 10 percent each. The subproject is led by Sind a n g a n Fa com a C om mu n it y Multi-Purpose Cooperative with Piñan Multipurpose Cooperative and People’s Officials, Employees and Community Multipurpose Cooperative as member-proponent groups. Facoma will be in charge of marketing, where it will buy cacao beans from its member-farmers. “The marketing aspect of the enterprise would boost the income of the farmers, as coop would be buying coco beans at the price of dried beans. This way the project would be able to help the farmers augmenting their income,” said Dexter Patron, Facoma cacao-enterprise manager. Cacao is considered an emerging commodity in Zamboanga del Norte. Of the three provinces in the Zamboanga Peninsula, Zamboanga del Norte has the most number of cacao growers and has more organized cooperatives now venturing into cacao production.


A10 Tuesday, November 21, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

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editorial

Still talking about a revolution

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resident Duterte recently raised a ruckus after saying he is prepared to establish a revolutionary government to quell destabilization moves against his administration.

No country in Asia supposedly has more experience with democracy than the Philippines. Yet, more than a hundred years after establishing the Philippine Republic and a few decades after the Edsa People Power movement that ousted the Marcos dictatorship, here we are still talking about a revolution. Duterte’s critics would say this is just the latest in a parade of absurdities that passes for governance in our country these days; but why is it that a considerable number of people seem to be entertaining, if not agreeing, with the proposal? According to a global Pew Research Center survey, five in 10 Filipinos are open to an autocratic form of government, with strong backing for military rule coming from the less educated in the Philippines at 47 percent. Is it because millions of Filipinos have become deeply concerned by the direction our country has taken so many years after we reestablished democracy? Is it because our people are deeply distressed by how our Constitutional rights seem still to depend on the whim of whoever is in power, or because our democratic institutions are not working as well as they should? Are they concerned that our educational, health-care and legal systems are beset with serious problems, or that the government is vastly hindered by corruption? Are they worried about the alarming number of murders and other crimes in the news, which all point to a breakdown of civility and the utter lack of respect for life and human rights? Is it because the concept of the common good has been inundated by hatred and greed; because environmental degradation has passed the point of no return and still our forests are being cut down, our waters are still being polluted and our mountains are still being destroyed? Perhaps, because of all of these and more, indeed, who doesn’t want to push the “reset” button and start over? Who doesn’t want another revolution, one that would truly dismantle the forces of the status quo, to start a new nation? Perhaps Filipinos who feel they lack the power to change the overall situation in their country, who feel like giving up on the political process, would find the idea of a revolution appealing or, at least, worth considering. Apparently, there are many such Filipinos. Whether this is a sad reflection of the kind of democracy we have right now, the democracy we have worked so hard to attain, for which thousands of Filipinos were martyred, is something worth considering. We may need nothing less than a revolution, a true revolution, a grassroots revolution that would enable ordinary Filipinos to have a stake in this country. We need a revolution that would bring governance back to the millions of poor Filipinos who have already lost faith in the government’s ability to respond to their problems. We need a revolution in our education system, in our legal system, in our health-care system, a revolution that will guarantee jobs for all who are willing to work, ensure a decent standard of living and a fair distribution of wealth and income for all Filipinos. We need a revolution based on economic and social justice. However, such a revolution cannot happen overnight. It will not come by accident, it will not come from one man (even if he is the president) and it surely cannot and must not come at the expense of democracy. We need to work for it, to vote for it, to speak and act with commitment, honesty and integrity in order to attain it. Hope is the best thing for a hungry nation, but it can also be a dangerous thing. We have worked too hard to revive and rebuild the institutions of democracy. Our civilian leaders, our institutions, our people in the postauthoritarian era may have been weighed and found wanting, but Philippine democracy, we believe, is still not a failed experiment.

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Fiscal skills behind spending program Manny B. Villar

THE Entrepreneur Continued from A1

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his is a fact known to economists and investors; that is why the previous administration was criticized for underspending on infrastructure projects, despite the much-ballyhooed launching of the Public-Private Partnership (PPP) Program as the flagship initiative to make up for the perennial public-works shortfall. It seemed the previous administration was more focused on presenting a corruption-free image, but the means used to achieve it was to restrain spending. It took pride in earning positive ratings from international credit-rating agencies, but failed to utilize the good credit record to finance the construction of roads, bridges and other facilities. It was as if the government could not be honest while spending taxes and other revenues at its disposal, even if it was for the benefit of the people. Today, we see the Duterte administration maintaining a strict policy against corruption while, at the same time, pursuing a massive infrastructure program. In line with the presidential directive, the Department of Public Works and

Highways, which, for many years, was perceived to be one of the most corrupt agencies, has instituted measures to reduce opportunities for corruption while improving efficiencies to achieve the goals of the infrastructure program. Under its “Build, Build, Build” program, the Duterte administration plans to spend $20 billion a year until 2022 for new roads, expressways, rail systems and other systems to improve the movement of goods and people and stimulate economic activity throughout the country. Among the members of the economic team, Finance Secretary Carlos G. Dominguez III is in charge of financial issues, recognizing the huge funding requirements of the flagship infrastructure program.

PSE: 2017 and 2018 John Mangun

OUTSIDE THE BOX

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he Philippine stock market was a man-made disaster for most of 2015. From April until the end of the year, the Philippine Stock Exchange Composite Index (PSEi) dropped about 15 percent. That did not seem fair, as economic growth was strong throughout 2015. Then, the market started perking up in January 2016 and gained back all of its losses by the end of July 2016. The PSEi reacted well— at least for a couple of months—to the election of Rodrigo Duterte as Philippine President. But, if that was the honeymoon, it did not last long. The PSEi went all the way back down to its 2015 low, perhaps because of the uncertainty with the election of Donald J. Trump as president of the United States. Philippine economic growth also tapered off through the last two quarters of 2016. However, 2017 has been virtually a one way market to the upside with the PSEi and the subsector indexes

performing extremely well as you can see. Leadership has been broadly based with the financial, property and the service sectors strongly outperforming the blue-chip index and the broad market all-share index. The mining and oil issues are still caught in the confusion of if and how the Philippine intends to exploit its mineral wealth. While economic growth was lower in 2017 than in 2016, the stock market still performed well. However, the Philippine peso/US dollar exchange rate has been terrible if you think that an indication of a nation’s economic health is a strong currency. That is not true, but try

President Duterte himself launched initiatives that are now giving the government access to billions of dollars in grants and concessional loans. Through his independent foreign policy, the President obtained commitments from China and Japan, among other countries, to support the Build, Build, Build program. The government is also pushing for the enactment of a tax -reform package that will generate additional revenues to support the infrastructure program. Notwithstanding the huge financial resources involved in the program, Dominguez is vigilant about maintaining the government’s good credit standing. This is a risk that he has successfully taken, but which previous administrations were afraid to take. The previous administration’s last rating was in April 2016, when it was rated BBB-, positive outlook affirmed by London-based Fitch Ratings. In March 2017 Fitch again rated the Philippines “BBB-”, positive outlook affirmed. In April 2017 Standard & Poor’s gave the country a rating of “BBB”, stable outlook affirmed. In June 2017 Moody’s rated the Philippines Baa2, stable outlook affirmed. During the economic team’s presentations in four countries this year, Dominguez said the government is following prudent and effective liability management to sustain reduction of debt as a percentage of GDP. He said that, as a matter of policy, the government is maintaining 80percent to 20-percent borrowing to

telling that to the pundits. Perhaps to better understand how the investment world works, think of thoroughbred horse racing. The horses are all different, from the color to the sire and dame for each entrant. Each has its own strengths and weaknesses, with some starting out slowly and finishing with burst of speed. Other horses refuse to ever take the lead, preferring to run behind the leader until pushed by the jockey to win the race. The race track is the only common denominator. Sometimes it is dry and fast, and sometimes it is wet and muddy. Certain horses that do well on a fast track can hardly run when the ground is wet and slow. Other horses ignore the track altogether. Think of the race track as the external elements, such as economic growth, politics and external global conditions. Sitting in the grandstand, bettors have all the same information that they can use to place their bets. Of course, there are certain punters that like to bet on the only mare or filly running against a bunch of stallions. Others like to put their money on only black, grey or whatever colored horse. But the favorite in the race See “Mangun,” A11

meet its financing needs in favor of domestic borrowing. This will lessen the exchange risk as the government pursues an expansionary economic strategy. Dominguez noted that, despite the increased spending on infrastructure and social services, the government expects inflation to hover between 2 percent and 4 percent during the medium term. He said the Duterte administration was limiting public-sector deficit to 3 percent of GDP. He stressed that fiscal stability is key to the sustainability of the country’s economic expansion. He listed the factors that would keep the economy on the high-growth path and attract more long-term investments, as follows: benign interest rates, the continuing efforts to improve the business climate by cutting red tape, curtailing corrupt practices and limiting the negative list for foreign investments and training the young and talented work force to be more globally competitive. Essentially, the message from the President’s chief finance man is that the government can pursue a massive infrastructure program while, at the same time, maintain a healthy fiscal condition and even reducing the debtto-GDP ratio. The financial feat alone deserves commendation. For comments, e-mail mbv.secretariat@gmail. com or visit www.mannyvillar.com.ph.

Issue AC AEV AGI ALI AP BDO BPI DMC FGEN GLO GTCAP ICT JFC JGS LTG MBT MEG MER MPI PCOR PGOLD RLC RRHI SCC SECB SM SMC SMPH TEL URC

2017 Percentage Change 39% -1% 21% 34% -1% 30% 10% 9% -21% 27% -8% 46% 34% 9% 46% 29% 52% 22% 0% -3% 26% -8% 24% 13% 32% 47% 22% 26% 22% -15%


www.businessmirror.com.ph

Opinion

Democracy is a process

For some, ‘sweet tax’ leaves sour aftertaste

BusinessMirror

Ernesto M. Hilario

Cecilio T. Arillo

database

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HAT drew my attention while updating my databank the other day was the now almost-forgotten “Filipino Ideology” (FI) and its seven pillars meant “to morally help regenerate our troubled world,” said former First Lady and now Ilocos Norte Second District Rep. Imelda R. Marcos. The timeless FI is in Chapter 4 of the book Imelda I wrote in 2012 for Amazon, one of the world’s largest publishers, where Mrs. Marcos explained the seven pillars in brisk details, thus: First. Identity and unity. It is the knowledge of origin. “We develop according to the mode of our beginning. We came from the marriage of strength and beauty. You may have come from another myth. But both of us have roots implanted in the same Mother Earth for life. Therefore, you and I grow from what is good, true and beautiful. You and I are united in nature.” Second. Nationalism. It is the nurturing of life: the human and the natural. “In the act of developing the human and the natural resources,” she said, “you evolve a loyalty and a devotion to a nation. The land and its people become sacred to you, to a degree that your honor and your very life could be offered in its favor. Above all, remember that you are the center [Man above all].” Third. Internationalism. It proceeds from the second, and is in accordance with the natural law, consonant with the essence of your relationship with everything and everyone. Culture and creed, shade of skin and mold of face, politics and dialects, these are all varieties of a whole: the totality of one world embodied in thought, speech, action, customary beliefs, social forms and material traits, as diverse as nature herself. “Born to this realization, you are a citizen of the world: free to travel to all nations; free to be friends; and free to reach, to receive, to relate and to respect,” Mrs. Marcos said. Fourth. Self-reliance. It is confidence in one’s self. Secure in one’s potentials and capabilities. To have faith, without any reservations, in designing your life is the best that you can imagine it to be. “Technology and logistics are merely aids. They can never become the strong and the beautiful in your world. Only you have the power to carry creation’s glory. This is sariling sikap [selfreliance],” she added. Fifth. Freedom of Belief. It is the reverence of the mind. To respect what the mind believes in is to respect oneself.  Mrs. Marcos said, “belief is to repose confidence and trust. It is important to everyone. And to everyone, it may be different from yours, but that is not for you to pass judgment on. Only the Great Mind knows this. It is enough that we respect it in the other as the other respects it in us,”  Sixth. Social justice. This is the practice of virtue toward others. Not only do we give to one another what is due, but also we give it in order to make whole. This is a tremendous task.

Mangun. . .

continued from A10

is determined by the horse that receives the most money betting that it will win. In 2017 the favorite investment was the Philippine Stock Exchange (PSE). As of the end of 2016, there were 773,187 active stock-brokerage accounts on the PSE, and they put their money in the market. The

Index PSEi All-Share Financials Industrial Holding Firms Property Services Mining And Oil

She explained that: “As you move on to the level of perfection, so you must move others toward the same path. This is the mission of everyone in the hierarchy of orders. Those who hold the elements for growth and development, by the very nature of their position, must seek out those without these elements. And they, who received, are indebted to themselves to become the wholeness of nature’s ultimate perfection.  “Simply stated, it is to make available to the people what belonged to them. You do not assert the rights of the less privileged to have food and shelter. Those rights are theirs by the very nature of their being human. You do not starve the children and refuse them an education. You give and, in giving, pray that the pain, the rejection, the hatred of poverty and disability may be removed from their lives.” Seventh. Democracy. Stressing that it is not a symbol, Mrs. Marcos said democracy is fundamentally a process. “It is a means of conduct, rules of behavior and a system of governance essential in order to have discipline, harmony and progress. “So it is with nature, and so it is with culture. We begin with the union of the man and woman, and then, their family. The family grows to become the tribe, the village, the country and, finally, the family of all the nations of the world. All of these need order, harmony and discipline. It is a natural need. “We speak of this as democracy because it is the closest word to express what is meant by a people-centered order of things. This means that the largest numbers of people are the beneficiaries of our natural resources. And the largest numbers are the smallest units, which, in our culture, are the barangay, the villagetribe and the family tree. “Thus, the experience of living is shared in rightful measure by all, and is the responsibility of all.”  Mrs. Marcos recalled that, as thenminister of Human Settlements and governor of Metropolitan Manila, “Beyond the delivery of basic services, such as power, water, food, clothing, shelter, medical services, education, sports, recreation, livelihood, peace and security, democracy was institutionalized and made participatory from the village level, giving honor and dignity to the individual as a selfreliant and self-sufficient identity, capable of greatness according to the mastery of their natural skills. Every person mothered his or her own greatness, proud to be a Filipino.”

ABOUT TOWN

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he Duterte administration has been pushing for the passage of its comprehensive tax reform package (CTRP) aimed at raising more revenues for its various infrastructure and social-development programs. But the CTRP also includes a provision raising taxes on sugar-sweetened beverages (SSBs), including soft drinks and powdered juices, that’s generating concern, not only from a broad range of people—sugarcane farmers, employees of food and beverage manufacturers, owners of sari-sari stores and small eateries and ordinary consumers—who all consider it insensitive, as it would hurt them the most. All in all, if passed, the bill would adversely affect an estimated more than 1 million Filipinos nationwide. Sen. Juan Edgardo M. Angara, chairman of the Senate Ways and Means Committee deliberating on the measure, has indicated he is considering “a fairer and more reasonable” excise tax on SSBs. He suggests imposing an excise tax depending on the drink’s sugar content. The P10 per liter of SSBs, he said, is too high, and would surely jack up prices by as much as 50 percent. For his part, Sen. Joseph Victor G. Ejercito has come up with an alternative proposal. One, a tax of P0.03 per gram of sugar on sweetened beverages using purely caloric sweeteners and exemption for beverages that use purely coconut-sap sugar. Two, a tax P0.05

per gram of sugar on sweetened beverages using purely high-fructose corn syrup, or in combination with any caloric or noncaloric sweetener. And three, a tax of P0.01 per gram of sugar on sweetened beverages using purely noncaloric sweeteners, or a mix of caloric and noncaloric sweeteners, and exemption for beverages using purely steviol glycosides. Critics of the OTRP, which would reduce the income tax of low-wage earners, argue that the benefits from lower income taxes would be totally offset by the drastic increase in  prices of SSBs, effectively setting back the goal of progressive taxation.

Tuesday, November 21, 2017 A11

The tax bill had also been touted for its supposed health benefit, as it would reduce diabetes and obesity incidence among Filipinos. But this argument has been downplayed by government economists, who now cite the need to raise an estimated P40 billion to P47 billion in additional revenues for the administration’s “Build, Build, Build” infrastructure program, Imposing new taxes at this time seems to be out of turn when the government should focus instead on eliminating unabated smuggling. A recent study by the University of Asia and the Pacific showed that illicit trade in only eight industries led to the smuggling of some P904.6 billion worth of goods into the country in a span of five years. It is believed that if the figures from outside the frequently smuggled products, such as petroleum, cigarettes and sugar were included, we can easily conclude that more than a P1 trillion worth of goods pass through Customs without paying the proper tax. Smuggling is estimated to cost the country’s GDP in the same period no less than P495.5 billion. This does not include the more-than P1-trillion loss in domestic production or gross output and nearly 300,000 displaced workers. This is more than  tenfold what the national treasury stands to gain from proposed taxes seen likely to harm rather than benefit ordinary consumers. The Philippine  Association of

China’s top economic risk? Education By Christopher Balding | Bloomberg View

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

A widely held view in the West is that China’s schools are brimming with math and science whizzes, just the kind of students that companies of the future will need. But this is misleading: For years, headline-grabbing studies showing China’s prowess on standardized tests evaluated only kids in rich and unrepresentative areas. When its broader population was included, China’s ranking dropped across all subject areas. Official data bears out this dynamic. According to the 2010 census, less than 9 percent of Chinese had attended school beyond the secondary level. More than 65 percent had gone no further than junior high. From 2008 to 2016, China’s total number of graduate students actually decreased by 1 percent. Outside the richest areas, much of China’s population lacks even the basic skills required in a high-income economy. Making matters worse are the

millions of children in rural areas who are being raised by their extended families. With their parents working in faraway cities, these children tend to fare much worse in school and on IQ tests. Stanford economist Scott Rozelle has referred to this as an “invisible crisis” in the making: In the coming decades, he estimates, some 400 million underprepared Chinese could be looking for work. His research has touched such a nerve that even state media has given it serious coverage. At the moment, it’s easy to overlook these problems. Official unemployment remains low and stable. Wages are rising, and the middle class is expanding. China’s factories still rank among the world’s best, and its workers broadly have the skills they need to support themselves. Yet, with demographic and technological changes accelerating, the education gap will soon loom large.

As wages rise, Chinese manufacturers will face growing competition from less-developed countries. As automation improves, factories will need workers with more and better education. And as older industries are disrupted, employers will demand new skill sets. China—like many countries— isn’t prepared for these changes. Sustaining an advanced, servicebased economy isn’t possible when only 25 percent of the working-age population has a high-school degree. In every country that made the jump from middle-income to high-income over the past 70 years, Rozelle found, at least 75 percent of the working-age population had a high-school degree before the transition began. Even China’s elite schools can’t drive economic development for 1.4 billion people. Raising the level of education more broadly will require both investment and reform. Most countries would benefit from investing more in education. But in China, the need is especially acute: Even in prosperous urban centers, classrooms are commonly crammed with 50 students apiece, forcing much of the actual work of education onto frustrated parents. That’s a recipe for failure. Another priority should be overhauling the so-called hukou

other “horses”—like condominiums and siomai kiosks—were not the favorite bet. That is why we have seen a 20-percent increase in the prices of the PSEi-listed issues. In fact, of the 30 PSEi issues, some turned in amazing returns. Ayala Corp. share price has gained more than 35 percent so far. LT Group Inc., SM Investments Corp. and International Container Terminals Inc. are all up more than 40 percent. Megaworld Corp. is the big winner so far,

gaining over 50 percent. Why did investors bet so heavily on the PSE in 2017? One factor was the psychological realization that the Philippines would “survive” both Presidents Duterte and Trump. Further, in spite of continuing controversies, Duterte’s approval rating has been strong. While a weakening peso has been a nagging concern as to its impact on both inflation and spending, there has not been any significant negative effect on economic

growth or—more importantly—corporate profitability. This year of 2017 has been one of changes around the world and a year of geopolitical turmoil from North Korean nuclear weapons to the Chinese military buildup in the West Philippine Sea (South China Sea). While you might think that this all should have a negative effect on the stock market, in fact the instant liquidity—being able to go back into hard cash—is a critical reason to

invest in stocks when things might go sour at any moment. As we come down to the closing days of 2017, the stock market has lost some upside momentum after its historic monthly closing high in October. It is not so much that money has come out of the market, but that fresh money has not come in. That sends prices lower even more than selling pressure. Third-quarter corporate earnings are within expectations, and

2016 Percentage Change -1.60% 4.15% 6.76% -3.45% 5.92% 5.17% -14.86% 13.72%

2017 Percentage Change 21% 17% 25% 4% 20% 26% 27% 2%

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hinese President Xi Jinping recently laid out a bold vision for transforming his country into a fully developed economy by 2050, with a particular emphasis on spurring innovation and technology. Given China’s current level of human capital—and some looming changes in the world economy—that may be harder than he expects.

Stores and Carinderia Owners (Pasco) has initiated a signature campaign to register their opposition to the proposed bill. They have already gathered more than 300,000 signatures for the petition calling on government to scrap the so-called sweet tax. The petitioners, consisting of owners and customers of small sari-sari stores and carinderias from all over the country, expressed vehement objection to the approval of a bill that they said would drastically affect their daily income. In an open letter, Pasco said it supports the Duterte administration’s poverty-alleviation program, but the sweet tax was unacceptable. “We understand and support our government’s need to raise money for its various social and infrastructure programs to help improve the lives of the Filipino people and sustain the country’s economic growth, but this bill is anti-poor and will make small microretailers, consumers, sugar and coffee farmers, and manufacturing-plant workers carry the burden,” they said. The group reminded government that 80 percent of the consumers of SSBs are low-income earners, who also spend as much as 40 percent of their income on these drinks. The signature campaign is still ongoing, with the organizers hoping to gain more support from ordinary consumers.

E-mail: ernhil@ yahoo.com.

system of household registration. The reason so many children are being raised by their grandparents in rural areas is because they’re restricted from accessing public services—including schools—in the cities where their parents work. Yet, it’s significantly easier to offer a quality education in urban centers than in far-flung villages. And, with apartment-vacancy rates above 20 percent in many cities, it would be both a humane and economically sound policy to end these restrictions. A final goal should be reforming curriculums. China is famous for requiring rote memorization of its students. But schools are also increasing classwork on communist ideology, Confucian thought and even traditional Chinese medicine. The emphasis should, instead, be on skills—such as creativity and unstructured problem-solving—that will help drive entrepreneurship and innovation, and ensure that students can compete in a world of robots and drones. Although other countries will face many of these problems in the years ahead, China is starting with some especially severe handicaps. Xi may be right that China’s people are resilient and creative enough to achieve his goals. But the journey will be a rocky one. economic growth for that period was stronger than expected. The Philippine peso has not fulfilled the gloom-and-doom predictions and seems to have stabilized. The US Federal Reserve has not shown any signs of crashing the global financial markets by expected interest-rate increase. So, what might 2018 hold for the PSE? It is unlikely that 2018 will start off with a bang and a boom in stock prices as it did in 2017. It is possible but not probable. Investors need a little time to digest the gains of 2017. That is normal with the PSEi bumping up against an historic high. But do not expect this to last long. As in 2017, the Philippine stock market is still going to be the best invest vehicle for profit making. The best is yet to come. 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.


2nd Front Page BusinessMirror

A12 Tuesday, November 21, 2017

China, Facebook to end days of duopoly in PHL telco industry–Palace

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By Elijah Felice E. Rosales

@alyasjah

resident Duterte has given China the “privilege” to enter the Philippine telecommunications industry as part of efforts to end the existing duopoly in the country.

₧975M

The BCDA’s investment in the planned Luzon Bypass Infrastructure, a bypass route for an international submarine cable network to be built and used by Facebook Facebook in putting up the Luzon Bypass Infrastructure, a highspeed Internet network promising a capacity on a par with that of Globe Telecom Inc. and PLDT Inc. According to Roque, the landing party agreement with Facebook was supposed to be signed in December, but it was neglected by former Information and Communications Technology Secretary Rodolfo A. Salalima. “This agreement with the subsidiary of Facebook should have

been signed as early as December 2016. It was not signed by the former secretary of the DICT [Department of Information and Communications Technology], and this was one of the areas pinpointed by Cabinet investigators as an area of conflict of interest for the former secretary of [the] DICT,” Roque added. “It was further reported by the special investigating committee that the former DICT secretary, likewise, may have prevented the earlier breakup of the duopoly by delaying the use of satellites as viable option. There was a realization period of almost five years and, meanwhile, this preserves for the duopoly the market,” the Palace official said. Salalima in September resigned from his post, owing it to personal and work-related reasons.

In a news briefing on Monday, Presidential Spokesman Harry L. Roque Jr. said the offer was made during the bilateral meeting between Duterte and Chinese Premier Li Keqiang last Wednesday. “During the bilateral talks between President Duterte and the Chinese Premier, President Duterte offered to the People’s Republic of

China the privilege to operate the third telecoms carrier in the country,” Roque said. “This comes after the Philippine government signed with an affiliate of Facebook a project entitled the “Luzon Bypass” of the Pacific Light Cable Network, which will provide [a] bandwidth of 2 terabits per second.” The government has tied up with

Small stores, eateries start petition vs tax on SSBs

Seoul gets early Pinoy X’mas feels

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ome 300,000 low-income patrons and owners of sarisari (community) stores and carinderia (small restaurants) all over the country have signed a petition asking the government to scrap a proposed on sugar-sweetened beverages (SSB) now pending in the Senate.

By Jovee Marie N. dela Cruz

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@joveemarie

he House of Representatives on Monday  approved on third and final reading a measure that  would make it easier for businesses to secure licenses, clearances or permits, in the process improving the country’s ranking in the Ease of Doing Business Report. Voting 225-0,  the lawmakers approved  House Bill (HB) 6579 seeking  to promote the Philippines as a businessfriendly economy. The bill will be transmitted to the Senate for its own deliberations.  Earlier, the  World Bank released its “Ease of Doing Business Report 2018,” which showed that the country’s overall ranking fell to 113th from 99th in the 2017 edition. House Committee on Trade and Industry Chairman Ferjenel G. Biron of the Fourth District of Iloilo said,  “The purpose of this bill is to provide an easy, simple, straightforward and trouble-free avenue for entrepreneurs, micro, small and medium businesses and ordinary citizens who would like to venture into business in the country.” Rep. Luis Raymund F. Villafuerte of the Second District of Camarines Sur, the panel vice chairman and one of the authors of the bill, said the Philippines’s ranking in ease of doing business is one of the lowest in the world at 171st out of 185 countries this year.  Rep. Vilma Santos-Recto of the Sixth District of Batangas,

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with no real control and no assets in the company who simply lend their signature. A small sample of about 13,000 owners from all over the world, recently compiled by Mossack Fonseca, gives some indication. China and Russia top the list.

The number of signatures already gathered by the Philippine Association of Stores and Carinderia Owners in its petition against the proposed tax on sugary drinks

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HOUSE OKAYS BILL SEEKING CREATION OF EASE OF DOING BUSINESS NATIONAL POLICY also an author of the bill, said it takes 16 procedures to navigate and an average of 29 days to start a business in the country. “Compared to our other Asean neighbors in the ‘Ease in Starting a Business’ rankings, the Philippines has performed poorly,” Santos-Recto said. HB 6579 aims to provide a business environment that is conducive for the establishment and operation of enterprises in the country. The measure also intends to promote transparency in government with regard to business registration and other manner of public transactions, to reduce red tape and expedite permitting, licensing and other similar transactions in the government.  It seeks to ensure timely and expeditious processing of business requirements by national government agencies and local government units. The bill calls for the creation of the National Policy in the Ease of Doing Business, which is a comprehensive and regulatory-management policy to improve competitiveness and ease undue bureaucratic and reg u lator y burden to business entities. It also provided for  the creation of the Ease of Doing Business Commission, an agency attached to the Office of the President, which shall be the policy-making body on business registration and regulatory management, and shall set the overall direction for the implementation of the National Policy on Ease of Doing Business.

Integrity In Paradise

300,000

The signature drive was spearheaded by the Philippine Association of Stores and Carinderia Owners (Pasco), which said the additional excise tax on beverages, such as soft drinks and powdered juices, will jack up prices and effectively destroy the livelihood of millions of Filipinos. “What will happen to our livelihood if this additional tax becomes a law? We fear that we will totally lose it,” Pasco President Vicky Aguinaldo said. In an open letter, the group said it supports the Duterte administration’s poverty-alleviation program, but the “sweet tax” is anti-poor. Some 80 percent of the consumers of affected products are lowincome earners, while the covered goods constitute 40 percent of the income of sari-sari store owners. “We understand and support our government’s need to raise money for its various social and infrastructure programs to help improve the lives of the Filipino people and sustain the country’s economic growth, [but] this bill is anti-poor and will make microretailers, consumers, sugar and

www.businessmirror.com.ph

Now: The ‘Paradise Papers’ South Koreans got an early taste of the Filipino holiday spirit with the display of Philippine capiz lanterns or parol at the ongoing Seoul Lantern Festival 2017. The exhibit of the various-sized parol along the Cheonggyecheon Stream is sponsored by the Philippines’s Department of Tourism to promote international tourism exchange. PHOTO COURTESY D.O.T. By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

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EOUL, South Korea got an early taste of the Filipino Christmas spirit with an assembly of unique lanterns or parol displayed at the ongoing Seoul Lantern Festival 2017. In a news statement, the Department of Tourism (DOT) said it sponsored the exhibit of colorful Philippine capiz lanterns along the Cheonggyecheon Stream to help promote international tourism exchange, an aim of the annual lantern festival, which began in 2009. “We are proud to showcase our elegant capiz lanterns in downtown Seoul for all the world to see the parol that symbolizes the birth of Christ Jesus, and who stars in the longest celebration of Christmas in the world, which is in the Philippines,” Tourism Secretary Wanda Corazon T. Teo said. The DOT said while this year’s lantern festival provides a glimpse of the 2018 Winter Olympics which South

Korea is hosting in PyeongChang, the Philippines’s display at the Lanterns of the World exhibit has caught the interest and admiration of thousands of visitors at the event, which began on November 3. Like the star of Bethlehem that guided the three kings to baby Jesus’s location in the manger, the Philippine parol also serves as a beacon to the Philippines for visitors. South Korea, Teo noted, continues to be the Philippines’s top source market for tourists. From January to August, tourists from South Korea grew by 9.6 percent to 1.07 million. For the full year 2016, visitor arrivals from South Korea reached 1.48 million, up 10 percent from the previous year. The Seoul Light Lantern Festival, held every first Friday until the third Sunday of November along the 1.2-kilometer from Cheonggye Plaza in Seoul to Supyo Bridge, portrays an overall sports theme to promote the Winter Olympics in Pyeongchang in 2018. At the “Seoul, Korea and the World” section, the DOT said glittering

lanterns representing major South Korean companies and organizations, as well as countries across the globe, including the Philippines, were on display. The DOT’s Philippine capiz lanterns exhibit between the Gwanggyo and Jangtong bridges, dramatize the joyous Christmas traditions in the Philippines, said Director Ma. Corazon Jorda-Apo of Philippines DOT (PDOT)-Korea office. Along with a wall of Philippine lanterns, a running electronic board displayed the ongoing DOT campaign of “Bring Home a Friend,” as well as the country slogan, “It’s More Fun in the Philippines,” in English and Korean. Festival visitors who drop by the PDOT booth at the Gwanggyo Gallery could win two free round-trip tickets to Manila courtesy of Philippine Airlines just by leaving a comment and a photo taken with Philippine capiz lanterns on the PDOT Facebook page. The DOT also gave away travel guidebooks of Cebu, Boracay, Palawan and other major travel destinations of the Philippines, to the visitors for free.

Reporters have unveiled some 13.4 million secret documents in “The Paradise Papers,” detailing evidence of tax avoidance among high-ranking politicians and the super wealthy. Some in US President Donald J. Trump’s Cabinet have been implicated. The leaked data was obtained by German newspaper Süddeutsche Zeitung, which said that the majority of the documents stem from offshore law firm Appleby, which was founded in Bermuda but has offices in several other locations. The company reported last month that it had been hacked (a good hacking for a change). The documents show that by using shell companies, corporations, such as Nike, Apple, Uber and Facebook are able to shrink their taxes to low rates. Rock star Bono and British Queen Elizabeth II’s private estate have also been involved in offshore funds, the newspaper reported. Over 120 politicians from 47 countries are involved in the taxavoidance schemes, the paper reported. Allegedly, the global elite have parked an estimated €7.9 trillion ($9.1 trillion) in offshore tax havens. The data was published by

a number of news organizations in cooperation with the United Statesbased International Consortium of Investigative Journalists. Several German companies also had dealings with Appleby, including car-rental service Sixt, Deutsche Post (DHL), Siemens, Allianz and Deutsche Bank. After Panama and Paradise, you might think: “So what? This isn’t necessarily illegal.” Well, that doesn’t mean we shouldn’t be concerned, because secrecy can lead to corruption, and the kinds of structures exposed in the Paradise Papers are the tools of the trade that the corrupt use to launder their ill-gotten gains. Looking at Paradise, the question arises whether we, who have signed the Integrity Pledge of the Integrity Initiative and are committed to pay the right taxes and do business ethically, are stupid. Of course, the answer is that we are not stupid and that we are doing the right thing to ensure the longterm survival of our companies in the interest of our employees and stakeholders. We are not tempted by short-term greed. We are paying the right taxes as part of our community service, we adhere to the labor and environmental laws and we don’t bribe. And we don’t smuggle! If you have not joined the Integrity Initiative yet, now is the time to join us and sign the pledge and live up to its commitments. Comments are more than welcome—contact me under Schumacher@integrityinitiative.com.

Businessmirror november 21, 2017  
Businessmirror november 21, 2017  
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