Businessmirror april 04, 2016 by BusinessMirror

media partner of the year

United nations

2015 environmental Media Award leadership award 2008

BusinessMirror A broader look at today’s business

www.businessmirror.com.ph

Tuesday, April 4, 2017 Vol. 12 No. 174

2016 ejap journalism awards

business news source of the year

P25.00 nationwide | 5 sections 28 pages | 7 days a week

D.A.R. ASKED TO ALLOW CONVERSION OF MORE FARMS INTO OTHER USES IN Q1

‘Govt must ban land conversion soon’

By Jonathan L. Mayuga

@jonlmayuga

he Department of Agrarian Reform (DAR) on Monday again appealed to President Duterte to immediately issue an executive order (EO) that would allow a two-year moratorium on land conversion. See “Land conversion,” A2

Let the countryside ride on the progress wagon

BMReports Bimp-Eaga: Eagle eyes toward 2025

BUSINESSMIRROR, PARTNERS LAUNCH PRESS NETWORK IN CEBU CITY The BusinessMirror, the Publishers Association of the Philippines Inc. (Papi) and the National Federation of Provincial Press Clubs (NFPPC) jointly launch the BusinessMirror-Community Press Network Cebu Chapter on Monday in partnership with associations of media practitioners and local government units in the province. Present during the signing of the memorandum of agreement are (seated, from left) Tuburan, Cebu, Mayor Democrito Diamante, president of the Cebu Municipalities Mayors’ League; Nelson Santos, Papi president; Allan Sison, NFPPC president; Baltazar S. Tribunalo Jr., chief of the Cebu Provincial Disaster Risk Reduction and Management Office, representing Cebu Gov. Hilario P. Davide III; T. Anthony C. Cabangon, BusinessMirror publisher; Cebu City Mayor Tomas R. Osmeña; and (standing, from left) Juan P. Dayang, chairman emeritus of Papi and NFPPC; Jaime C. Vistar, BusinessMirror Visayas Bureau chief; Gregorio Senining, president emeritus of Cebu Association of Media Practitioners (CAMP) and Papi Cebu Chapter president; Richard Alfahora, Sugbuanon Komentaristang Nagpakabana president; Pol Bulilan, Visayas Media Association president; and Joemarie Arib, CAMP president.

the entrepreneur Manny Villar

Now that I’m back in the private sector as a full-fledged businessman, and because of the nature of my core business (real estate), I see the changes more often. For more than three decades, my Vista Land & Lifescapes has cemented its position as the country’s largest homebuilder, having delivered about 400,000 homes to Filipino families throughout the country. The company, through its various operating units, has established presence in 100 cities and municipalities—in Luzon, the Visayas and Mindanao—and I thought we have reached the peak. Continued on A10

Nuvolanevicata | Dreamstime.com

ne of what I call practical indicators of progress is the changing landscape in certain cities, towns and provinces. The change is brought about either by government infrastructure projects or private-sector initiative, or both.

By Manuel T. Cayon Mindanao Bureau Chief @awimailbox

Part Two

AVAO CITY—As the Association of Southeast Asian Nations (Asean) still grapples with single-market birth pains, its little brother down its East Asian side is putting more teeth to its dream of reconnecting itself, its archipelagic regions bound by common historical trading ties using land bridges. The little brother is known as the Brunei Darussalam, Indonesia, Malaysia, the Philippines-East Asean Growth Area (Bimp-Eaga). Arturo P. Boncato Jr., the assistant secretary at the Philippine Department of Trade and Industry, said the tabled air linkages

PESO exchange rates n US 50.2190

and other connectivity projects in the future would be hinged again on the fate of the roll-on, roll-off (Roro) cargo shipping between two southern Philippine cities and the progressive city of Indonesia’s northwestern group of islands. “It would be a natural, and desired consequence, of having air links between the cities of Davao and General Santos in Mindanao, with Bitung, and, probably, reviving another one in Manado after this Roro shipping,” Boncato said. The air links would make transactions faster when traders and exporters meet more frequently and have more interface business matches, he explained. Davao and Manado had been served in the past by three Indonesian airlines, all of which folded Continued on A2

fighting corruption By Henry J. Schumacher | Special to the BusinessMirror

Consequences of corruption

e can say with some certainty that corruption is not good for economic growth. It is quite possible that the three types of corruption identified in one of my earlier columns have very different effects. There is no doubt that corruption—both in government and in the private sector—introduces distortions in markets. It can lower tax revenues (and, hence, funds available for public investments and services), because corruption induces inefficiencies in the tax-collection system (we are happy to note that the new Internal Revenue Commissioner Caesar R. Dulay is determined to address this). »continued on A2

n japan 0.4508 n UK 63.0048 n HK 6.4625 n CHINA 7.2901 n singapore 35.9169 n australia 38.2669 n EU 53.5636 n SAUDI arabia 13.3914

Source: BSP (3 April 2017 )

BMReports BusinessMirror

A2 Tuesday, April 4, 2017

Bimp-Eaga: Eagle eyes toward 2025 Continued from A1

due to lack of passenger and cargo load, despite several prodding from some Davao City councilors the airlines continue flying the route.

Elusive proposition

BUT the market remains elusive to make for even a break-even proposition. This would be the same risk being consciously considered by Roro shipping owners. In a huddle with the BusinessMirror during the public launch of the project, Edrick de Guzman of the Super Shuttle Roro (SSR) said the company owner was well aware of such venture and the risk of having a sustainable shipping load to keep business afloat. De Guzman, SSR’s assistant vice president for corporate planning, would not say how long is the owner’s “string”, or patience, to keep plying the sea lane in case of a lukewarm patronage from the business sectors of Indonesia and the Philippines. Fernando Juan C. Perez of the newly trimmed Philippine Department of Transportation (DoTr) said the sea route would be the first to be operated commercially. Nonetheless, age-old barter trading between Indonesia and the Philippines has used the wide Celebes Sea, which is coincidentally dotted with islands from both countries that appeared as stepping stones to each other.

Barter trading

T HE Autonomous Reg ion in Muslim Mindanao (Armm) is well aware of its rich seafaring historical feat to trade with neighboring Indonesia, Malaysia and Brunei Darussalam. All trace proud links to Asian empires linked and also proudly blares their common religious connections with Arab trading missionaries. Today, the ARMM is pushing anew to revive these historical links, at least in trading. The Armm also seeks to recapture the essence of barter trading from two known major routes: the BasilanSulu-Tawi-Tawi and Sabah route, and Indonesia’s Sulawesi with the eastern part of Sarangani and Maguindanao. Lawyer Ishak Mastura, chief of ARMM’s Regional Board of Investments, brought a team of experts from the region to argue its proposal before the meeting of se-

nior officials of the BIMP-Eaga in Palawan. Mastura said the regional government also granted export processing zone authority (Epza) status to areas in Tawi-Tawi, the main doorstep of the Philippines’s southern backdoor, to enhance the invitation of the Armm for Indonesian, Malaysian and Brunei traders to increase their business activities down south. Areas with Epza status enjoy tax holidays and other perks, with additional offers also extended by the ARMM itself, including Gov. Mujiv Hataman’s declaration that all its economic zone areas are halal-certified.

More projects

IN a news briefing in December last year after, finalizing the Bimp-Eaga Vision 2025 document, Dato’ Sri Abdul Wahid Omar told a news briefing that the plan “also highlighted several regional economic cooperation issues, such as connectivity initiatives, which, among others, saw the completion of the West Kalimantan and Sarawak Power Interconnection project.” Abdul Wahid, minister to the Malaysian Prime Minister’s department in charge of economic planning, added that the interconnection project was scheduled for full operation this year. “There’s the flurry of trade and investment activities, including the signing of memorandum of collaboration between Bali Palm Oil Corp. of the Philippines and Felda Global Ventures of Malaysia in May this year,” he said. Abdul Wahid added that the BIMP-Eaga Business Council has also initiated the Brooke’s Point, Palawan-Kudat, Indonesia and Brooke’s Point-Sandakan shipping services. All these talks on pushing anew for greater connectivity also jived well with BIMP-Eaga’s big brother Asean, which has crafted the “Master Plan on Asean Connectivity 2025”.

Similar vision

ACCORDING to Boncato, the Master Plan on Asean Connectivity 2025 has a similar vision of multiple connections from within and outside the Asean. “We take note of the ongoing study on the Investment Profiling in Bimp-Eaga’s Economic Corridors, which will identify investment opportunities and provide

information to potential investors in the subregion,” Boncato said. “We are also pleased with the agricultural cooperation between Brunei Darussalam and Sarawak, Malaysia, on livestock, rice, fisheries and halal industries.” The Mindanao Development Authority has pursued the corridordevelopment strategy, way back to the early days of the BIMP-Eaga, with the typical sewing of the highways of Lanao del Norte and Misamis Oriental dotted with factories into one industrial lane, or corridor. Along with this corridor are their respective cities of Iligan and Cagayan de Oro, with the latter, hosting the seaport and airport. BIMP senior officials hoped that the sea and air links would soon multiply, banking also on these nation’s untapped tourism sites as reasons convincing enough to trigger more government spending on developing them. The famous Coral Triangle environmental conservation program implemented in the last decade also includes the BIMP sea territories. According to Boncato, the Bimp-Eaga Vision 2025 would be endorsed for ministerial approval on the BIMP-Eaga heads of state meeting here on April 29.

The environment

WHILE the bulk of the projects are poured into the connectivity and communication infrastructure, the BIMP-Eaga is also conscious about its inextricable situation to deal with the environment. The regional grouping has recognized that, although it is a region of envy over its lush natural resources, it is also in the path of typhoons and the increasing devastating episodes of climatic changes, including droughts. Therefore, amid the biggest public spending so far to implement its progress toward 2025, the development plan was consciously nailed to its theme: develop a resilient, inclusive, sustainable and economically competitive BIMPEaga by 2025. The plan was aptly named “Rise BIMP-Eaga”. This would dovetail perfectly with its founding vision of aid in building the resiliency of local communities in BIMP-Eaga and ensure the protection and sustainable use of the natural resources within BIMP-Eaga that will also redound to the benefit of the local populace. The program “desires to protect

the natural landscapes, prevent damages to the health of BIMPEaga residents, and provide food security even without compromising the sustained economic growth in the region.” Within Asean, a disaster-response center was created after the infamous Indian Ocean tsunami in December 2004 that hit 14 Asian countries and affected 9 million mostly coastal residents, including tourists. In the respective countries, budgets have been allocated already to protect or revive watersheds, train residents in vulnerable communities to disaster response and to educate them on the strength of their natural resources as likely livelihood sources from tourism, as well as appreciating their protection from incursions.

Building strength

WHAT seemed to have persistently hounded the BIMP-Eaga is its primary motive behind installing seaports and airports to enhance connectivity: moving up people and products. On products, mainly, the nations’ leaders have burned eyebrows to turn around its commonality, especially in agricultural products, because of common agricultural economies. Rather than become a source of envious competition from within, economic and private business leaders soon arrived at a strategy to form a common trading bond and bind their common products to produce volumes and be able to deal with the global market. In the previous decade, in 2005, a multination BIMP corporation was formed to produce halal chicken and poultry-meat processing plant. Each country had its own assignment: Malaysia would take care of the processing because of its advance industrial economy while Indonesia would produce the corn. The Philippines would also produce corn and grow chickens as the archipelago remained free of the Avian flu virus. Brunei would be in charge of ensuring halal processing. Over the last five years, the four countries were already convinced of forming an Eaga-wide production and distribution venture to break into the global-scale trading. Only on this cooperation would the issue of common products would be solved and turned around into a great advantage. To be concluded

www.businessmirror.com.ph

Fighting corruption. . .

Corruption is known to deter investment because it can negatively affect assessments on the risks and returns associated with an investment. This is the reason we started the project “Integrity for Jobs”, creating Integrity Circles in LGUs that are committed to ethical operations. Additionally, corruption will direct talent away from productive activities toward rentseeking activities. More important, while corruption affects the whole economy, it seems to target the poor. It hurts the poor as it introduces costs and benefits that create a bias against the poor; corruption can causally be linked to the worsening of income distribution.

Fighting corruption

Given the consequences mentioned above, perhaps the most important, and the most difficult, question is ‘how can we reduce or better eradicate corruption’? Attempts to fight corruption face a fundamental contradiction: Reducing corruption requires the commitment and cooperation of those who benefit from corruption, which is not in their self-interest. In order for a campaign against corruption to succeed, it will require a strong moral commitment from the segment of leadership in the government and the private sector to reduce and better eradicate corruption in addition to sufficient support from the public. Remember: Integrity starts with I—I commit to be part of the solution! There are but a few examples of successful fights against corruption. More often than not, a reduction in corruption accompanies economic growth in open societies, where the cost of corruption begins to exceed the ability of those who benefit from it to purchase compliance from others in the government and the private sector. Hong Kong was able to fight corruption in the 1970s after an Independent Commission Against Corruption was established in 1974. Georgia claims to have reduced its corruption significantly in recent years, as demonstrated by Tamara Kovziridze, former Deputy Minister of Economy of Georgia, at an ADB sponsored event last year called: Evaluating and Monitoring Anticorruption Reforms and Programs’.

Successful campaigns to fight corruption occur along three dimensions: Laws must be strong enough to create a deterrence, however, there must also be a will to implement them. Corruption cannot be tackled without a strong civic society. The population must have powers to challenge politicians, bureaucrats and erring company managers. Governments must agree to introduce transparency in their operations and allow information to flow freely. The Right to Information Act in India that allows citizens to demand information from bureaucrats has given much hope to activists in India. In the Philippines the Freedom of Information bills are not moving in Congress. Barriers to participation in the economic life of a society must be removed. Corruption has its losers—the population at large and those who are denied participation in economic activity. When those who are hurt by corruption are allowed to voice their discontent, the chances of a decline in corruption increase. Neither corruption nor its study is new. Interest in the subject, however, has become central to the discussion of economic performance. This has followed the realization that corruption may be the biggest barrier to removing poverty in the developing world. There is very little doubt that corruption hurts societies. We have clearly seen in our work in the “Integrity Initiative” that temptation to succumb to corruption far exceeds any moral constraints or compassion for those who may suffer as a result. Constraints on the behavior of leaders of societies may also have to come from outside—a global leadership that places value on the reduction of poverty and suffering, and the resulting peace dividend. This belief is part of the creation of the Open Government Partnership formed by the Obama administration, of which the Philippines is a member. In turn, the Integrity Initiative is part of the Open Government Partnership Committee, created by the Philippine government. Finally, arriving at the type of enlightened approach in anticorruption we all dream of, is likely to take some time; in the meantime, you and I will have to commit to fight corruption.

Land conversion. . .

Agrarian Reform Secretary Rafael V. Mariano issued the statement after his department received land-conversion applications covering a bigger area in the first three months alone this year. Mariano noted that the DAR has already received 13 applications, covering a combined area of 1,668 hectares, nearly eight times more than the combined 215.44 hectares covered by 13 applications filed in the same period last year. “We are speaking here only of the first three months of 2017. The more land is diverted to nonagricultural use, the lesser the agricultural production there will be, which may lead to the rising cost of commodities,” he said in a statement. In pushing for the two-year ban on land conversion, Mariano said, “time is of the essence” as more landowners could “take advantage” of the delay in the issuance of the EO. Mariano said the much-awaited draft EO has already undergone four revisions to ensure its acceptability to all stakeholders. Under the law, the DAR is mandated to review applications for land conversion, according to Agrarian Reform Undersecretary for Legal Affairs Luis Pangulayan. Applications for land conversion, particularly prime agricultural lands, whether covered by the Comprehensive Agrarian Reform Program or not, is subject to the DAR’s approval. “Land conversions without the knowledge of the DAR may have been happening all over the country,” Pangulayan said. Pangulayan added that Mariano has already issued an order to all DAR regional directors to monitor activities in prime agricultural lands—or lands that are irrigated or irrigable and file appropriate cases against the

Metro Pacific. . .

“These investments, along with the enhanced services of the Safe Trip Mo Sagot Ko, or SMSK, during Holy Week and other holidays, will hopefully shorten the time spent by motorists on the road, so they can have more time for productive work and more quality time for their loved ones,” Franco said. The annual motorist assistance program aims to ease traffic congestion along the expressways operated by Metro Pacific, all of which are expected to handle 15 percent more vehicles during the Lenten season compared with normal days. For those going north, heavy volume of vehicles is expected in the afternoon of April 12 until late morning of April 13. Those traveling back to Manila may expect a surge in traffic in the afternoon of April 15 until the

Continued from A1

land owners if the conversions are without the approval of the DAR. “There is a Task Force on Land Conversion, which reviews land conversions nationwide. The DAR Secretary wants to know if these land conversions were approved by DAR or not, and whether the conditions of land conversions were met. If not, they will be reverted to agricultural land and consequently covered by the CARP,” he said. The “sizable” area of 1,668 hectares covered by the applications filed before the DAR in the first quarter exceeds the combined area of 1,044 hectares that are contained in 36 applications filed in 2016. It also represents 17 percent of the total area of 9,974.54 hectares that are covered by 184 applications that the DAR has received since July 2003, Pangulayan added. Since 1988, when the CARP was launched under the administration of the late President Corazon Aquino, 219,320 hectares have been slashed from its coverage, of which 98,939 hectares had been converted into nonagricultural uses while 120,381 hectares were exempted. Mariano’s proposal for land-conversion moratorium is facing stiff opposition from President Duterte’s economic managers. The President’s economic team is against a total ban on land conversion, saying it will hinder growth and development. Aside from imposing a moratorium, Mariano said there is also a need to review the current status of agricultural lands that have been converted into residential, commercial or industrial uses, particularly on “the matter of whether the holder of such grant was able to comply with the development period of the project, which is the basis for the conversion grant.”

Continued from A12

early morning of April 17. From April 7 to 17, additional patrol ve-hicles and enforcers will be deployed to assist motorists. Ambulant toll tellers equipped with portable toll-collection gadgets will be fielded to speed up toll transactions. Also during this period, road works will be suspended to ensure smooth traffic flow. To better serve motorists, on April 7, 8, 12 and 13, the Balintawak Toll Plaza will open a maximum of 30 toll-collection points instead of the usual 16, and the Mindanao Avenue Toll Plaza will also increase its toll-collection points to 15 from five. Toll collection points in Tarlac Toll Plaza will be increased to 29 instead of five, while the Tipo Toll Plaza will have 12 toll-collection points, instead of four.

news@businessmirror.com.ph

The Nation BusinessMirror

Labor group set to sue APO-PU, Ugec execs over passport mess

FEDERATION of labor unions is poised to file graft charges against ranking officials of a state-owned printing company and its private partner for allegedly entering into a partnership agreement with a private corporation without legal authority and squandering billions of pesos on an outsourcing scheme grossly disadvantageous to the government. The Philippine Association of Free Labor Unions (Paflu) said in a statement key executives of the APOProductivity Unit (APO-PU) “should be held accountable for unlawfully engaging the services of privately owned United Graphics Expression Inc. [Ugec] for the printing of the so-called e-passports for the Department of Foreign Affairs [DFA]”. Paflu president Eleuterio Tuazon said there is reason to believe “spurious partnership between the APOPU and the Ugec was forged in collusion of certain Malacañang officials during the Aquino administration, hence, they should also be cited as co-respondents in the graft cases”. Tuazon invoked a finding by Chief Presidential Legal Counsel Salvador S. Panelo who said the joint venture agreement (JVA) between APO-PU and Ugec signed on November 14, 2014, was illegal and, therefore, null and void right from the start.

“Clearly, this JVA had no basis whatsoever, because at the time of its signing, the DFA has not yet appointed APO-PU as the government’s official printer of the passports. That appointment eventually came of October 5, 2015, when the DFA and APO-PU concluded a memorandum of agreement [MOA] on the e-passport project,” Tuazon added. “Put another way, APO-PU had anticipated Malacañang’s decision to decommission the Bangko Sentral and transfer the passportprinting services to the APO-PU, which turned out to have no capability to deliver its contractual obligations under the 2015 MOA,” Tuazon also said. Panelo said the MOA mandates APO-PU to use its own facilities, equipment and machinery in printing the passports for the DFA. “APO is prohibited from directly or indirectly engaging private contractors to undertake the [passport] project, and may only implement the infrastructure project in-house, by job order, or through the pakyaw contracting system.” He indicated that APO-PU could be held liable for violating pertinent rules and regulations, as well as Republic Act 9184, the Antigraft and Corrupt Practices Act, “for subcontracting the printing of passports to Ugec.”

Editor: Dionisio L. Pelayo • Tuesday, April 4, 2017 A3

Senate moving for stepped-up naval presence at Benham Rise

By Butch Fernandez

@butchfBM

HE Senate is poised to push for increased naval presence in the country’s eastern seaboard— from Isabela to Aurora—in the wake of a controversial three-month foray by a Chinese ship in the resourcerich Benham Rise that is part of the Philippine continental shelf, Sen. Sherwin T. Gatchalian disclosed. Gatchalian, who spearheaded last week’s joint Senate inquiry into the incident, said his Committee on Economic Affairs is also crafting remedial legislation for the government to “invest more on research and exploration” in the 4-million-hectare Benham Rise area that is believed to be rich in methane-gas hydrates. In addition, Gatchalian said the committee would also prod the Senate to “review apparent gaps”

between the United Nations Convention on the Law of the Sea (Unclos) and Philippine laws, particularly on the definition and scope of maritime research. While there are no other claimants to Benham Rise, China, invoking freedom of navigation, had deployed what it claimed to be a research vessel in the area for three months, from late October to January 2017. At the hearing of the Gatchalianled inquiry last week, Executive

Department officials confirmed Beijing had twice sought permission to deploy research ships but the Department of Foreign Affairs (DFA) turned this down, because China did not abide by Manila’s condition that the research mission should involve Filipino scientists. Apparently, the October-to-January Chinese mission was carried out without permission, or a byyour-leave. “What was established at the initial inquiry was that China had claimed it was exercising freedom of navigation,” Gatchalian told the BusinessMirror. “In terms of direction, it was exercising freedom of navigation but we also established it was undertaking research.” He recalled that “during the hearing, there were also inconsistencies found between Unclos and our laws”, pointing out, for instance, that the term “maritime research is very broad and needs to be defined.” “If it involved basic research, what does that cover?” he asked, adding the invocation of “marine-science research” should also be clarified, because, strictly speaking, marinescience research, as differentiated

from basic research, requires the presence of Filipino scientists. “If they were undertaking basic research, there was no need for a permit; but marine-science research requires it.” Gatchalian added the committee is still expecting a report on the DFA’s communication with China regarding the incident, saying the “note verbale will clear up everything.” He earlier sought to allay concerns over the reported Benham Rise intrusions, even as he pointed out that “there are no other claimants” to the resource-rich area. He admitted that prior to last week’s hearing, initial information reaching the Senate was “incomplete, because it [Chinese ship] did stay there for quite some time, and it did criss-cross, so it was probably conducting some form of research.” Gatchalian conceded, however, that such maritime research by foreign vessels in Philippine territory was not outright illegal. “It was probably conducting some form of research. But, if it is conducting very basically, for example, water salinity, temperature, I think that is allowed under Unclos,” he added.

Legislator: Why is Gina so reliant on Leo? Red Cross has ship for medical By Marvyn N. Benaning Correspondent

NVIRONMENT Secretary Regina Paz L. Lopez should make public the guidelines for the multimillion-peso trust fund she now requires suspended mining firms to establish before they are allowed ship out their ore stockpiles. The call came just as Rep. Roberto Ace Barbers of Surigao del Norte also asked Lopez why she continues to depend on former Mines and Geosciences Bureau (MBG) Director Leo Jasareno, who no longer has any role at the Department of Environment and Natural Resources (DENR). Barbers asked Lopez to be transparent since it was also Jasareno who had approved the permits of the mining companies she had suspended. Speaking during the Kapihan sa Annabel’s forum, Rodolfo Javellana, president of Water for All Refund Movement and United Filipino Consumers and Commuters (WARM-UFCC), said his group has written to Lopez and asked for clarification about the January 30, 2017, memorandum she issued requiring all suspended mining companies to set up a trust fund of P2 million per hectare of disturbed land before they can be allowed to remove their stockpiles. “We would like to be enlightened on the January 30, 2017, memorandum you issued to all suspended mining firms setting requirements before they can be allowed to remove the stockpiles, particularly the condition for the opening of a trust-fund account in the amount of P2 million per hectare of disturbed land,” Javellana stressed. DENR documents showed that on January 30, 2017, Lopez issued the questioned memorandum that ordered all suspended mining firms to open trust funds if they want to secure their mining ore export permits (MOEP). Javellana said this requirement appears to separate from the trust fund that the DENR requires for the rehabilitation of mining areas that had shut down, or their all of their mineral reserves extracted. In the assailed memo, Lopez said: “This Office is allowing the removal of said stockpiles on condition that the following require-

ments are complied with…[that] [t]he mining contractor concerned shall place in a trust fund the amount of P2 million per hectare of disturbed land, to be used to further mitigate the adverse impacts of the operation to the environment and to the actual communities.” Javellana said that, while the intention of the trust fund is commendable at the outset, it is also very disturbing since Lopez now requires mining companies to set up non-governmental organizations (NGOs) to manage the trust fund based on the guidelines set by her office. Lopez also retains the right to choose who would receive the funds and she even has a hand in the drafting of the documents establishing the NGOs through a specific law office. “Gusto po naming malaman kung itong mga kumpanya na itinayo na non-governmental organization para i-manage ang trust fund, meron po bang relasyon doon sa mga namumuno sa DENR? Kung ito ay may relasyon, ito po ay malinaw na pangba-blackmail at malinaw na pangho-hostage sa mga negosyante dahil sila ay kailangan din tumalima sa kanilang kontrata pero para ilabas ang mga produkto na ito. Pero hindi nila ito mailalabas kung hindi sila aayon doon sa tinatawag na trust fund,” Javellana pointed out. Javellana said Lopez should be transparent on the issue of the trust fund because it should be the public that should benefit from it and not the businesses that are engaged in the supposed rehabilitation programs. He then cited Environment Undersecretary Philip Camara, who used to be the president and chief executive officer of Biochamp Association, a company engaged in mining rehabilitation. The consumer group leader said Lopez should make public the contracts involved in the setting up of the trust fund in order to avoid any conflict of interest. “Kaya tinatanong namin si Secretary Gina Lopez, ano ang relasyon nung inilabas niya na memorandum order noong January 30, 2017, at nagkataon lamang ba na ’yung Biochamp ay kanilang inirekomenda? Hindi po ba ito’y malinaw na conflict of interest? Binulabog nila ang sambayanang Pilipino, ang sitwasyon ng ating bayan ano ba talaga ang motibo? Kalisakasan ba o negosyo lamang

ba? Kaya hinihintay po naming ang kasagutan ng DENR sapagka’t ito ay malinaw na pananagutan nya sa taong-bayan kung saan mapupunta ang bilyun-bilyong piso patungo sa trust na ito,” he said. For his part, Barbers said Lopez should explain why she has allowed suspended mining companies to remove and export their stockpiles even when they are suspended. “There are reports that they are continuously giving contracts to operators and bakit nakakapag-export ang mga iyan kung suspended? Madam, baka napapalusutan ka?” Barbers asked. The lawmaker also said Lopez’s decision to retain Jasareno, when he no longer has an official position in the DENR, is highly questionable. “As far as we know, ang contract ni Jasareno expired last September 2016 and from October until now wala pang effective contract itong si Leo Jasareno,” Barbers said. He noted how Lopez has become dependent on Jasareno on important issues. “In all the important appearances of Secretary Lopez doon sa Kongreso, sa Senado, sa Commission on Appointments, nandoon na lang nadudugtong si Jasareno. Kapag magtatanong kay Secretary Lopez sasabihin niya: “Leo what is this, Leo what is that? Leo can you please explain? Leo can you do that? Leo can you do this? What is his role?” Barbers added. The MGB earlier issued a notice stating that since September 30, 2016, Jasareno is no longer connected with the bureau. Barbers told Lopez that instead of retaining Jasareno, who headed the MGB for more than 10 years, she should have filed charges against him and some people in the DENR who have been remiss in their duties to guard the environment. “In fact, iyong mga environment destruction o iyong pagkasira ng bundok e hindi naman po nangyari overnight iyan. Nangyari iyan over a period of 10 years or even more. Sino ba ang nagpirma ng mga kontrata? Sino ba ang nagbigay ng permit sa mga kumpanyang iyan? Hindi ba MGB, sila Jasareno at iyong mga former secretaries? I think the good secretary must run after those people. We want transparency. File charges against all these people kasi hindi nila ginagawa ang trabaho nila,” he maintained.

emergencies, disaster response

HE Philippine Red Cross (PRC) has welcomed the newest—and biggest—member of its family: A 195-foot militarytype ship that the humanitarian group will use in medical emergencies and disaster response. But as with any new member of a family, the ship needs to be christened. From April 1 to 15, PRC is holding the #NameThatRedCrossShip contest to encourage the public to be part of Philippine history by helping name the country’s only humanitarian ship. To join the contest, one must first sign up to become a PRC volunteer. Participants can inquire about this through the PRC chapters in their own communities, or they can log on to the #NameThatRedCrossShip microsite at www.redcross.org.ph/ name-that-ship. Proposed names must follow these criteria: originality, 30 percent; relevance to the organization, 30 percent; and impact, 40 percent. The participant who comes up with the chosen name will win a special prize, and will be invited to the ship’s grand launch, tentatively scheduled for next month. Three years ago, when Typhoon Yolanda hit the Philippines, it took some time for aid to arrive in the hard-hit areas in the Eastern Visayas owing to impassable roads and the closure of airports and seaports, which made it difficult for the gov-

ernment and humanitarian actors like the Red Cross to bring relief to the affected areas. Trucks carrying humanitarian aid had to line up for days to be accommodated in seaports and sea vessels going to the affected areas. That experience compelled PRC to think of a way forward to ensure that life-saving services and goods reach affected populations in the fastest possible time and in the most efficient manner. Hence, last year, PRC made one of its boldest moves to date—the purchase of a ship that ensures it can effectively perform its humanitarian work in the Philippines and the Asia-Pacific region. “The ship is the realization of our vision to establish the Philippine Red Cross as the foremost humanitarian organization in the country, capable of delivering timely humanitarian services that save lives and restore the dignity of the most vulnerable,” PRC Chairman Richard J. Gordon said. With the hard work of Gordon and PRC Secretary-General Oscar Palabyab, who shared his vision, and with the support and funding of partners in the Red Cross and Red Crescent Movement, like the International Federation of Red Cross and Red Crescent Societies, British Red Cross, German Red Cross and Japanese Red Cross, the purchase of the ship was completed and it

finally arrived in the country on December 2, 2016. Since the ship’s arrival, the spirit of volunteerism has been truly felt with the outpour of support from various stakeholders. Originally called MV Susitna, PRC’s humanitarian ship originated from Matanuska-Susitna Borough in the US state of Alaska. The Matanuska-Susitna Borough Assembly unanimously approved the plan to sell the ferry to the PRC for $1.75 million (about P88 million), a fraction of what the borough originally hoped to get for it. Capable of operating both as cargo-loaded barge that can haul itself onto shore and a twin-hulled vessel that cuts through choppy seas, MV Susitna will be the country’s first humanitarian ship and disasterresponse vessel. PRC plans to use the ship as rapid transport and landing vessel for Red Cross’s emergency units. It will also serve as relief supply transport ship, medical facility deployment ship, sea rescue and mass evacuation vessel, humanitarian logistics ship, mobile operations command post, and humanitarian education and training ship. The ship’s space can hold up to 120 passengers, 20 vehicles and has a 35ton overall freight capacity. Its main deck can be lowered to off-load equipment and land on beaches in as little as 4 feet of water. Claudeth Mocon-Ciriaco

THE Philippine Red Cross (PRC) recently welcomed the newest member of its family: Its own humanitarian ship, currently docked at the Subic Bay Freeport Zone in Olongapo City. Photo courtesy of Philippine Red Cross

Economy BusinessMirror

A4 Tuesday, April 4, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

DTI vows close monitoring of SRPs, but won’t interfere on price setting By Catherine N. Pillas @c_pillas29

he Department of Trade and Industry (DTI) has reassured consumers that it will continue to monitor suggested retail prices (SRPs) to ensure no sudden spikes in prices of goods and commodities will ensue, but still plans to keep its hands off price setting. Last week Trade Secretary Ramon M. Lopez expressed his intent to “deregulate” the SRP scheme, at least from the side of the DTI, which has exercised supervisory authority on price adjustments of manufacturers. Four government agencies, aside from the DTI, are mandated to issue SRPs, namely, the departments of Agriculture, Health, Environment and Natural Resources and Energy. Manufacturers of basic goods and prime commodities, classified as daily necessities of Filipinos, such as bread and canned meat, are enjoined by the DTI to submit their price adjustments periodically to ensure these stay within reasonable ranges. These are evaluated and undergo an informal approval process with the DTI. There have been instances in the past when the DTI has sued private companies, on charges of profiteering, for failing to explain their pricing levels. These SRP schedules are also used as the guides of the DTI’s monitoring teams to ensure supermarkets and retailers stay within the range recommended by the manufacturers. The said scheme has reportedly

put the squeeze on both the manufacturers and retailers, since the former has to keep production costs down if the DTI does not approve their upward price adjustments, and the latter as it ties their hands to put a large profit margin. While the DTI has not categorically said it will no longer issue SRPs, it had expressed to loosen its grip on the approval process of SRPs, especially in fast-moving consumer categories where market forces keep prices low. “We all know prices are very competitive and kept low by market forces in fast-moving consumer categories, with many brands and players, and presence of even generic products available in public markets. This has been true for many decades,” Lopez clarified on Monday. He maintained the DTI will still monitor the competitiveness structure per industry. Lopez earlier said the DTI will support the Philippine Competition Commission in its identification and resolution of anticompetitive behavior. On industries or product categories that are dominated by a few players, Lopez said he still intends to oversee the market competition. “We have to continuously review the industries participated in by a few players,” he stressed. Laban Konsyumer Inc. Head and previous Trade Undersecretary for Consumer Protection Victorio Dimagiba said his consumer advocacy group will oppose any move on the lifting the SRP on basic goods.

news@businessmirror.com.ph

Solon urges GCG to speed up performance review of GOCCs By Jovee Marie N. dela Cruz

@joveemarie

lawmaker has called on the oversight body governing government-owned and -controlled corporations (GOCCs) to speed up performance review of these state companies.

Nacionalista Party Rep. LRay Villafuerte of Camarines Sur, vice chairman of the House Committee on Appropriations, said the oversight body should determine immediately which should be abolished, merged or restructured, with the end in view of ensuring the more efficient use of public funds that go to state-run firms. Villafuerte, in a news statement released on Monday, said the huge savings to be generated from abolishing nonperforming GOCCs, or merging, reclassifying and restructuring others could also be better used to increase the budget of the local government units, which are at the forefront of delivering basic services to the people. One agency that needs to be urgently reviewed, Villafuerte said, is the National Food Authority, which

48.6% The increase in subsidies to GOCCs to P98.12 billion as of end of November last year, compared to just P66 billion in 2015

has incurred massive debts and losses because of its conflicting mandates, which are to stabilize rice prices, while safeguarding the profit margins of rice farmers and protecting the welfare of consumers. “Heavily indebted GOCCs, many of them with no incentive to shape up or improve their efficiency be-

cause they are heavily subsidized by the national government, are among the reasons the government continues to incur huge contingent liabilities,” Villafuerte said. Another GOCC that also requires reevaluation is the National Irrigation Administration which, Villafuerte said, should be converted into a line agency of the Department of Agriculture. “The Governance Commission for GOCCs [GCG] [should] speed up its evaluation of state firms and shut down the operations of nonperforming ones so that financial resources can be rechanneled to other government entities that need them,” he said. He added that GOCCs were created because the delivery of certain goods and services require operational and financial flexibility that regular government line agencies cannot provide, “but, ironically, many of these state-run corporations have become a burden, rather than a viable, effective tool of delivering basic services to the people.” “We commend the GCG for trimming down the number of GOCCs from 158 in 2011, the year it was created under Republic Act 10149, to only 108 as of June 2016. We are urging it to work double time in accomplishing its goal of bringing down the number of GOCCs to less than 90 so that the national govern-

ment can free up more funds for its priority programs on infrastructure, human capital development and social protection,” Villafuerte said. Villafuerte, citing the Bureau of Treasury, said subsidies to GOCCs reached P14.23 billion in November 2016, up from P3.71 billion in the same period a year ago. He said the figure was also the highest since July 2016’s P35.26 billion, mainly because subsidies to the Philippine Health Insurance Corp. (PhilHealth) amounted to P7.69 billion for November, or more than half the total for the month. As of end-November last year Villafuerte added, subsidies already reached P98.12 billion, rising 48.6 percent from the P66 billion in the comparable period in 2015. Under the 2017 General Appropriations Act, Villafuerte said subsidies and equity contributions to GOCCs at P131.5 billion still eat up a significant portion of the budget for obligations, although as corporate entities, state firms are supposed to be financially independent. While some GOCCs are nonprofit in nature, such as the PhilHealth, Villafuerte said their performance should not be reviewed based on their financial viability alone, but on whether they continue to fulfill their mandate to provide essential services, especially to ordinary Filipinos.

More than fourth of employed workers are into ‘elementary occupations’–PSA By Cai U. Ordinario @cuo_bm

ver a quarter of the country’s total employed workers are street vendors, laborers and domestic helpers, according to the Philippine Statistics Authority (PSA). The final results of the 2016 July Labor Force Survey (LFS) showed that 26.9 percent of the employed population are engaged in “elementary occupations”. The PSA said among these are those involved in unskilled labor, such as street vendors, construction site workers, cleaners, domestic helpers and farm hands. “One in every four of the total employed persons are engaged in elementary occupations,” the PSA said. Former Labor Undersecretary Rene E. Ofreneo told the BusinessMirror this is proof that the informal sector is a “huge catch basin” for employment. This is a problem for the economy since these types of workers cannot easily be absorbed by high-end employers, such as those

in the business-process outsourcing industry. Ofreneo said this is a result of uncoordinated economic and employment planning programs. He said planning should not always be for export. “In order [to address this, we need] interventions, like asset reform and human-resource development programs, that are tailored to their needs,” Ofreneo said. The second-largest group of workers are managers at 17.3 percent, followed by service and sales workers at 15.2 percent; skilled agricultural, forestry and fishery workers, 13 percent; and craft and related trade workers, 8 percent. The PSA data showed plant and machine operators and assemblers accounted for 5.8 percent; clerical- support workers, 5.2 percent; professionals, 5.1 percent; technicians and associate professionals, 3.4 percent. The occupation with the least percentage of the work force are armed forces and special occupations at 0.2 percent of the total. “[Employed workers] refer to persons in the labor force who are reported either as at work, or with a job or business, although not at work. Persons at work are those who

did some work, even for an hour, during the reference period,” the PSA said. Meanwhile, data showed more than half, or 55 percent, of the employed population were in the services sector. This was followed by the agriculture sector, which accounted for 27.2 percent, and the rest, or 17.8 percent, were in the industry sector. Data also showed three in every five, or 61.2 percent, of the total employed persons were wage and salary workers. Some 27.6 percent were self-employed, while 3.5 percent were employers in own familyoperated farm or business, and 7.7 percent were unpaid family workers. The PSA, however, said overseas Filipino workers are not considered part of the labor force in the Philippines. This means that the LFS data on economic characteristics of household members who are overseas workers are not collected. For the LFS reports, they are also excluded in the estimation of the size of working population, that is, population aged 15 years and older, and in the estimation of the labor force.

briefs jica extends p340-million aid to n.e.a. THE Japan International Cooperation Agency (Jica) has extended financial assistance to National Electrification Administration (NEA), which, in turn, will assist electric cooperatives (ECs) in Mindanao. NEA Chief Edgardo Masongsong welcomed last week Jica’s financal assistance worth ¥771 million, or roughly P340 million, to support energy needs in Mindanao’s conflict-affected areas. The financial assistance will benefit six ECs in the Bangsamoro region, namely, the Maguindanao Electric Cooperative Inc., Lanao del Sur Electric Cooperative Inc., Lanao Sur Power, Basilan Electric Cooperative Inc., Sulu Electric Cooperative Inc., Tawi-Tawi Electric Cooperative Inc. and Siasi Electric Cooperative Inc. These ECs will receive boom trucks, distribution transformers, concrete and steel poles and electricity wires to allow them to improve their power quality, systems efficiency and reliability and help them respond to expected load growth. “The foreign aid will be a big boost toward minimizing systems losses incurred from the ECs’ aging distribution facilities, and accelerating the electrification rate in the region, especially in the Autonomous Region in Muslim Mindanao (ARMM),” Masongsong said.

oil firms raise fuel pump prices After four consecutive weeks of oil price cuts, oil firms announced Monday a price hike in petroleum products.

Prices of diesel and gasoline products will go up by P0.35 per liter, respectively. Kerosene, meanwhile, will increase by P0.30 per liter. Seaoil, PTT Philippines, Phoenix Petroleum, Eastern Petroleum, and Pilipinas Shell will implement their respective price adjustments at 6 a.m. on Tuesday. “This is to reflect movements in the international petroleum market,” they said. Prior to the price increase, the year-to-date total adjustments of gasoline as of March 28 remain at net decrease of P0.31/liter, while that of diesel moved lower to net decrease of P0.10/liter. Lenie Lectura

addl allowance for state workers pushed TO aid the living conditions of government employees following surging inflation rates, a senator on Monday sponsored a measure seeking to give them additional allowance. Sen. Antonio Trillanes IV sponsored Senate Bill (SB) 286 on providing all government employees an additional allowance, through the cost-of-living allowance. Under the SB 286, all civilian government employees and uniformed personnel, whether employed by national or local government agencies, whether occupying regular, contractual or casual positions, shall receive an additional allowance of P5,000 to be given on a monthly basis. It also states that the allowance shall be implemented across the board, on top of other existing mandatory allowances they are currently receiving. PNA

Dirty ice-cream treat

A foreign tourist and his two Filipina companions enjoy the cool taste refreshing taste of sorbets, or Filipino ice cream, at the Rizal Park in Manila City on Sunday. PNA/Joey O. Razon

DOJ eyes fact-finding team to probe Dapecol, Tadeco land-lease accord

he Department of Justice (DOJ) will create a fact-finding team to probe the landlease agreement between the Davao Penal Colony (Dapecol) and the Tagum Agricultural Development Corp. (Tadeco). Justice Secretary Vitaliano N. Aguirre II on Monday said this is in response to House Speaker Pantaleon D. Alvarez’s request for a legal opinion on the matter. The panel will be composed of both technical and legal committees, Aguirre said. “Natanggap lang namin kanina ’yung sulat ni Speaker Alvarez, humihingi ng opinion tungkol sa tunay na legal status of more than 5,300 hectares ng Dapecol. Sabi namin kay Speaker, magko-constitute ako ng parang panel rito composed of the technical, as well as the legal status [We are in receipt of a letter from Speaker Alvarez, seeking an opinion on the legal status of more than 5,000 hecrares of Da-

pecol. We told the Speaker we will constitute a panel to probe the deal’s legal status],” Aguirre told reporters on Monday. Earlier, Alvarez filed a graft complaint against Davao del Norte Rep. Antonio “Tonyboy” Floirendo Jr. before the Office of the Ombudsman over his alleged unconstitutional “business interest” over his banana firm Tadeco. Alvarez accused Floirendo of violating Section 3 (h) of the Antigraft and Corrupt Practices Act for having “a direct financial or pecuniary interest” with the renewal of the consolidated joint venture agreement (JVA) between Tadeco and Bureau of Corrections (BuCor), the agency supervising the Dapecol. Section 3 (h) of the antigraft law classifies as among the corrupt practices by public officers those who have “financing or pecuniary interest in any business, contract or transaction in connection with which he intervenes or takes part in

his official capacity, or in which he is prohibited by the Constitution or by any law from having any interest.” Under the 2003 contract, both parties renewed for another 25 years, BuCor’s lease to Tadeco of 5,308.36 hectares in the Dapecol at an annual P26.54 million, with an increase of 10 percent every five years. In his complaint-affidavit, Alvarez said Floirendo was a stockholder of Tadeco in 2003 while on his second term as representative of the First District of Davao del Norte. Floirendo also served as board member and stockholder of Anflo Management and Investment Corp., the holding company of Tadeco, in 1997 and from 2002 to 2015. Alvarez also filed House Resolution 867 calling for a congressional inquiry into what he called a “grossly disadvantageous” 25-year lease contract between the BuCor and Tadeco. PNA

Agriculture/Commodities BusinessMirror

news@businessmirror.com.ph

Editor: Jennifer A. Ng • Tuesday, April 4, 2017

PHL dairy imports up 54% in 2016

Mindanao banana farmers seek more govt protection from NPA

BLOOMBERG

By Jasper Emmanuel Y. Arcalas @jearcalas

he country’s dairy imports in 2016 expanded by 54 percent to 2.77 million metric tons (MMT) in liquid milk equivalent (LME), from 1.79 MMT-LME recorded in 2015, according to the National Dairy Authority (NDA).

The latest NDA data showed that the figure has surpassed the agency’s import forecast of 1.85 MMT-LME for 2016. The NDA said the value of the country’s milk imports last year reached $807.72 million (P38.358 billion), 16.3 percent higher than the 2015 record of $694.51 million (P31.60 billion). Of t he d a ir y impor ts l ast

year, NDA data showed that the bulk consisted of skimmed-milk powder at 1.43 MMT-LME valued at $349.71 million. The volume was higher than the 787,400 metric tons (MT)-LME of skimmed milk powder valued at $270.85 million purchased by local producers in 2015. The bulk of the country’s dairy imports came from New Zea-

land, which accounted for 30.63 percent, followed by the United States (30.35 percent), according to NDA data. Inbound shipments of milk and dairy products from New Zealand reached 849,330 MT-LME, or 61.11 percent higher than the 527,180 MT-LME imported in 2015. A total of 107 private firms imported milk and dairy products last year. T hese include Alaska Milk Corp., Wyeth Philippines Inc., Mead Johnson Nutrition, Nestlé Philippines Inc. and Magnolia Inc. The expansion of Philippine dairy imports could be attributed to growing local demand, particularly the rapid expansion of the food-processing sector and the prevailing low price of dairy in the global market, according to a recent Global Agricultural Information Network (Gain) report. NDA data also showed the countr y’s shipments of dair y products in 2016 expanded by 25.70 percent to 211,581 MT-LME, from the 168,324.83 MT-LME

posted in 2015. Export receipts from milk products reached $91.982 million, 7.21 percent higher than the 2015 record of $85.792 million. Milk and cream products accounted for 99 percent of the country’s total dairy exports. The value of shipments last year rose by 8.96 percent to $84.0478 million. The NDA also said whole-milk powder was the most popular dairy product from the Philippines, with purchases reaching 205,544.17 MT-LME valued at $83.761 million, according to the NDA. Malaysia remained as the top importer of Philippine dairy products, accounting for 54.66 percent of shipments. Malaysia bought 115,645.10 MT-LME of dairy products valued $43.587 million in 2016. On an annual basis, the figures were higher by 44.2 percent in terms of volume and 19.74 percent in terms of value. Dairy products are currently the Philippines’s third-largest agricultural import after wheat and soybean meal.

anana farmers on Monday asked the government to step up its campaign against members of the New People’s Army (NPA) who have been attacking banana plantations in Mindanao for not paying “revolutionary taxes”. Agrarian-reform beneficiaries (ARBs) reported that the NPAs have once again launched an intensified series of attacks on banana and pineapple plantations resulting in killings, arson and disruption of business operations in Mindanao. The renewed violent attacks came after the peace negotiations with the Communist Party of the Philippines (CPP) and the National Democratic Front (NDF) has been terminated and the unilateral ceasefire has been lifted. The NPA is the armed wing of the NDF and has heavy presence in Mindanao. “We ask the government to please step up its protection of farmworkers and businesses and to go after these lawless elements. The safety of our families and our livelihood is threatened. If the government fails to address this problem, businesses can leave and we will lose our jobs,” said Eduardo Maningo, a spokesman for the ARBs. Maningo noted that if the violent attacks and harassment in farms persist, Mindanao’s most lucrative dollar earner will be compromised. The Philippines is the second-biggest exporter of bananas in the world, despite the small land area of the farms concentrated in Mindanao.

‘Neglected industry’

An investor in the banana industry, who doesn’t want to be identified for security reasons, lamented that government appears to be more concerned on less important matters but has been neglecting the banana industry, which has more economic contributions and has been employing hundreds of thousands of workers. Current estimates place the people dependent on the banana industry at 2 million, inclusive of the family members of the bananeros, as well as employees of downstream industries.

“All the while, I thought agricultural development is a priority, but the continuous harassment and extortions by the NPAs prove otherwise,” the investor said.

Illegal activities

Authorities believe that the rebels’ assaults on the plantation were part of their extortion activities. “Our industry is already hampered with problems. We have low productivity because of pests and diseases, drought, flooding—the intermittent weather conditions and were still reeling from the onslaught of Typhoon Pablo but the insurgency is the most alarming. We are scared for our lives,” Maningo said. On March 30 the NPAs attacked the facilities of Dole’s banana plantation in Barangay Sinawal in General Santos City. The rebels burned the cold storage and palletizing facilities, a container van and other materials within the compound estimated at a cost of P6.9 million. The company has stopped all farm operations leaving 56 workers and their families severely affected. Top management is yet to decide on the continuity of the business depending on the security conditions of the almost 200-hectare banana farm. On February 2 the day the NPAs announced it is terminating the unilateral cease-fire, communist rebels in Bukidnon killed three soldiers and paralyzed heavy equipment of a food processor in the province. The NPAs boasted of the attacks in a statement released by Ka Allan Juanito, spokesman of the NPA North Central Mindanao Regional Command. Juanito said the three soldiers, whom he described as members of the Community Organizing for Peace and Development unit of the Army’s 8th Infantry Battalion were killed when they attempted to shoot it out with the guerilla unit that stopped their motorcycle in Sitio Kali Barangay Kibalag in Malaybalay City the day before. They also seized the three soldiers’ .45 caliber pistols. The military said, the slain soldiers were noncombatants. Jasper Emmanuel Y. Arcalas

Go Negosyo, government roll out Four Huishan Dairy directors resign; treasury head still missing agribusiness mentoring program

o Negosyo said on Monday it has inked a memorandum of understanding (MOU) with the Department of Agriculture (DA) to establish a mentorship program aimed at honing and developing the agribusiness skills of Filipinos. The MOU, which was signed by Agriculture Secretary Emmanuel F. Piñol and Go Negosyo Founder and Presidential Adviser for Entrepreneurship Joey Concepcion, launched the Kapatid Agri Mentor Me Program (KAMMP). “KAMMP, in this regard, wishes to take the same proven and enabling formula as the KMME [Kapatid Mentor Me Program] and apply it to the context of agripreneurs. The DA is mandated to promote agricultural development by providing the policy framework, public investments and support services needed for domestic and export-oriented business enterprises,” Go Negosyo said in a statement. “Thus, KAMMP was developed with Go Negosyo as a coaching program for agriculture as a complement to the DA’s initiatives to help sustain and scale up agribusiness in the country,” it added.

The KMME, where KAMMP was patterned after, was a mentorship program launched by Go Negosyo and the Department of Trade Industry (DTI) last year. It sought to aid micro and small businesses scale up their skills and opportunities through weekly coaching sessions held in the DTI’s Negosyo Centers nationwide over the course of 12 weeks. The mentors during the KMME sessions were business owners and practitioners across different functional areas of entrepreneurship, according to Go Negosyo. Go Negosyo said top practitioners in the agribusiness sector with extensive knowledge in their respective fields would spearhead the KAMMP coaching sessions. “The objectives of the program are to equip agripreneurs with the proper production techniques, mind-set and values, practical knowledge and strategies, and consultation services to foster successful and sustainable agrienterprises,” Go Negosyo said. Go Negosyo is the advocacy of the Philippine Center for Entrepreneurship, a nonstock, nonprofit organization, to alleviate the country’s poverty through entrepreneurship. Jasper Emmanuel Y. Arcalas

hina Huishan Dairy Holdings Co. said its four remaining nonexecutive directors resigned and the company still can’t locate its treasury head, adding to concern about the indebted farm operator’s corporate governance and finances. The directors tendered their resignations effective on March 31, with all four citing other commitments, according to a stock exchange filing late Friday. The Shenyang , China-based company said Ge Kun, who manages the company’s treasury and cash operations, was last known to be in Hong Kong and a missing person’s report has been filed with the city’s police. An unexplained 85-percent plunge in Huishan’s shares on March 24 has drawn attention to the transparency of Chinese listed companies in Hong Kong, with such events becoming a familiar sight. Huishan’s creditors held an emergency meeting the day before the rout to discuss a cash shortage at the milk producer, according to Hongling Capital, a peer-to-peer lender that attended the gathering. The company is reviewing its financial position in Ge’s absence,

which is taking longer than initially expected, and intends to provide an update in a week ’s time, according to Friday’s statement. A Hong Kong police spokesman said they were unable to verify whether a missing person report was filed without knowing further details. A Hong Kong court rejected an application by Chinese money manager Gopher Asset Management Co. to freeze assets of Huishan Dairy, according to the same statement. Majority shareholder Champ Harvest Ltd., controlled by Yang Kai, sold part of its stake as Huishan Dairy plummeted, a separate statement last Friday showed. The holder sold 250.9 million shares at an average price of 39.4 Hong Kong cents apiece on March 24. That alone would have been the highest daily volume since August 2015, and accounted for about a third of the stock that changed hands as Huishan Dairy plummeted from HK$2.81 to as low as 25 Hong Kong cents. The disclosure didn’t say whether the selling was forced. Huishan Dairy has no members on its audit committee after Song Kungang, Gu Ruixia, Tsui

File photo

Kei Pang and Kan Yu Leung Peter resigned as independent nonexecutive directors. Huishan Dairy Chief Financial Officer Eddie So, the company’s media representative and auditor KPMG Llp. didn’t immediately respond to e-mailed requests asking when the company will report its results for the year ended on March 31. The selloff came about three months after Carson Block, the

short seller and founder of Muddy Waters Llc., issued a report on Huishan Dairy alleging the company was worth “close to zero.” Even so, the stock fluctuated in a narrow range between HK$2.69 and HK$3.23 from the start of October 2015 through to March 23. Huishan has said the allegations in Block’s December report were groundless and contained misrepresentations. Bloomberg News

The World BusinessMirror

Tuesday, April 4, 2017

Editor: Lyn Resurreccion • www.businessmirror.com.ph

European migrants in Britain warned: Robots to fill their jobs N

Kushner’s advisory duties expanding, travels to Iraq

n Brexit Britain, robots are booting up to fill jobs held by European migrants, as Prime Minister Theresa May’s government prepares to cut immigration. Wilmington, Massachusettsbased Locus Robotics intends to start selling an autonomous machine that whizzes around storehouses, delivering boxes from shelves to shipping bays, in Britain this year. ABB Ltd. of Switzerland supplies industrial robots to British pancake, poppadom and marshmallow producers. Fanuc Corp. of Japan, which makes computer-controlled machine tools for smartphone providers, plans to open a new UK plant in May. If Brexit “is going to result in fewer being involved in this kind of work, it will make it a more attractive market for us,” Locus founder Bruce Welty said by phone. May, who last week triggered two years of talks on leaving the European Union (EU), has said she aims to bring annual inward migration down to below 100,000 from almost 300,000 currently. That’s a particular concern to UK companies in businesses like food production and retail distribution, which rely heavily on EU migrants and have lagged behind their peers elsewhere in investing in automation. About one-quarter of packers and pickers in the warehouses that supply the likes of Amazon, Asos Plc. and Wm Morrison Supermarkets Plc. were not born in Britain, while 41 percent of those employed in food manufacturing are from abroad, according to the Migration Observatory at

15M The number of British jobs that could be lost if UK employers embrace automation

the University of Oxford. As Brexit threatens to curb the number of EU migrants coming to the country, companies are looking to accelerate their push into robotics and automation to help make up the shortfall. Warehousing company Wincanton Plc., which operates distribution sites for Kraft Heinz Co. and other companies, is considering buying Locus Robotics tools, as it sees rising demand for its services, it said in an e-mailed statement. “There is a labor challenge in the UK market for those low-skilled areas,” Ian Howe, director of consumer goods at Wincanton, said by phone. “We expect to see a drive in the industry to increase utilization of these kind of systems to offset those challenges.”

Productivity boost

The LocusBot, a shoulder-high robot with a touchscreen as its head, navigates the aisles of a warehouse like a restaurantgoer tr ying to reach a vacant

table, finding the most efficient route to an item before a human picker loads it onto the machine’s car r y ing tray. The $35,000 robot can boost the number of items picked by a worker by 200 percent to 500 percent, Welty said, and six employees can handle work normally done by 20 to 25. The company, split off from automation provider Quiet Logistics Inc. a little more than a year ago, has sold 200 of the automated assistants in the US, and says it sees the potential to sell thousands in the UK. W hile May’s gover nment has pledged to boost investment in ar tificia l intel ligence and robotics to increase productiv it y, the UK trails competitors in the number of robots it employs in manufactur ing. Excluding automakers, the country has 33 of them installed per 10,000 employees, compared with 170 in Germany and 411 in South Korea. If UK employers embrace automation, 15 million British jobs could be lost, Bank of England Chief Economist Andy Haldane has said. While the rise of robots has prompted concerns about what will happen to displaced workers, some employers in the UK see a solution to a looming labor shortage.

A Kraft Heinz distribution site in the north of England allows stock to be processed with almost no manual handling required. Fewer than a hundred people can operate a facility that processes 100 million pallets of baked beans a year. The facility can operate 24 hours a day with “no tea breaks or shift handovers,” Howe said.

Two-armed robot

More companies are looking for “collaborative” tools, such as ABB’s £40,000 ($50,000) YuMi, a muscular, two-armed robot designed to undertake complex tasks alongside a human coworker on an assembly line, UK Sales Manager Mike Wilson said during an interview at the company’s robotics hub in Milton Keynes, 50 miles north of London. Describing Brexit as a “stepchange”, Wilson said UK sales could grow by 10 percent to 15 percent a year. Minimum-wage increases are an additional incentive for companies to invest in automation, he said. “Probably for the first time for a long time, we’ve got a number of factors that are all looking positive in terms of the use of robotics,” he said. “Maybe we’ll look back at this in five years’ time and say, ‘Yes, that was the point when it did change’”. Bloomberg News

Xi’s plan to create new Shenzhen triggers building-share frenzy

hinese c o n s t r u c t i o n shares surged, after Xinhua News Agency reported President Xi Jinping would create a new economic zone in Hebei province to rival Shenzhen and Pudong district in Shanghai. BBMG Cor p. jumped more than 40 percent as of 1:04 p.m. i n Hong Kong to lead ga i ns among cement producers, while Tianjin Port Development Holdings Ltd. headed for its biggest gain in eight years. Xinhua reported last Saturday China plans to set up Xiongan New Area in Hebei province, nearby to Beijing. The Hang Seng Composite Index climbed 0.5 percent. Mainland Chinese markets are closed for a holiday until Wednesday. The new economic area, located about 100 kilometers southwest of downtown Beijing, will span three counties that sit at the center of the triangular area formed by Beijing, Tianjin, and Hebei’s provincial capital Shijiazhuang, Xinhua reported last Saturday, and will help to phase out nonkey functions from Beijing. By Sunday the government had suspended all property sales in the new zone to prevent speculation. Separately, Xi will meet US President Donald J. Trump this week. “Cement, construction and port-related stocks are surging on the news that China plans to set up a new economic zone in Hebei province,” said Bill Bowler, a sales trader at Forsyth Barr Asia Ltd. in Hong Kong. “ This would be one of the centerpieces of a high-level development plan for the BeijingTianjin-Hebei region. I would

Shenzhen housing Bloomberg

liken it to the development of a brand-new New York City, with Beijing as Washington. The regional plan has been termed a ‘1,000-year project’; the first of its kind since Mao.” The Hang Seng Index gained 0.3 percent, extending its 9.6 percent advance in the first quarter. Hong Kong financial markets will be closed Tuesday. Mone t a r y t i g hte n i n g w i l l likely continue to be a theme for investors in the second quarter. The People’s Bank of China raised interest rates for standing lending facility loans, aimed mainly at small- and mediumsized financial institutions, over the weekend. The central bank will probably

keep a tight rein on money-market rates this year, raising the cost of short-term funds at least twice in moves that will pressure bonds, according to a Bloomberg survey. Tianjin followed a number of Chinese cities to roll out additional property-market cooling measures last Saturday. BBMG soared as much as 46 percent, the most since July 2009. Hebei is among core strategic regions for BBMG’s cement business. China National Building Material Co. climbed 10 percent and Asia Cement China Holdings Corp. added 5.2 percent. Ti a nji n Por t Development Holdings jumped 17 percent. Ga la x y Entertainment Group Ltd. gained 0.7 percent after data

showed Macau’s casino revenue growth last March accelerated at the fastest pace in eight months, as both high rollers and leisure gamblers return to the world’s largest gaming hub. Guangzhou Automobile Group Co. climbed 4.2 percent in Hong Kong after its rating was raised to buy from neutral by Angus Chan at Bocom International Holdings Co. China Eastern Airlines Corp. slipped 3 percent in Hong Kong after its rating was cut to hold from buy by Ajith Kom at UOB Kay Hian Pte Ltd. CT Environmental Group Ltd. fell 1.8 percent after its rating was lowered to neutral from outperform by Alan Hon at Macquarie Group Ltd. Bloomberg News

E W YOR K— P re s id e nt Donald J. Trump’s sonin-law and senior adviser Jared Kushner is visiting Iraq with the chairman of the Joint Chiefs of Staff, an official said last Sunday night. Details about the trip to the Middle East with Gen. Joseph Dunford were not released. A senior administration official said Kushner wanted to see the situation in Iraq for himself and show support for the Iraqi government. The official wasn’t authorized to speak about confidential meetings by name and demanded anonymity. Kushner’s West Wing portfolio is robust. He has been deeply involved with presidential staffing, recently launched a task force meant to modernize government using lessons drawn from the private sector, and has played the role of shadow diplomat, advising on relations with the Middle East, Canada and Mexico. And though Kushner had no previous diplomatic or government experience, Trump also tasked him with trying to broker a peace agreement between Israel and the Palestinians. “If you can’t produce peace in the Middle East, nobody can,” Trump told Kushner at a gala a few days before his inauguration. Kushner was also the latest Trump associate to be swept up into the ongoing probe into contacts with Russian officials. The White House confirmed last week that he had volunteered to be interviewed by the Senate intelligence committee. North Carolina Sen. Richard Burr, the committee’s chairman, said Kushner would likely be under oath and would submit to a “private interview” about arranging meetings with the Russian ambassador and other officials. Kushner is married to Trump’s oldest daughter, Ivanka. He was

expected to have a major role in meetings later this week between Trump and Chinese President Xi Jinping at Trump’s winter retreat in Palm Beach, Florida. The Iraq trip was first reported by The New York Times. Kushner’s trip began against a backdrop of an ongoing investigation into civilian deaths in an area of Mosul near the site of an air strike by US-led coalition forces last month. His visit marked an early foray for the Trump administration into the situation in Iraq and came just two weeks after Iraqi Prime Minister Haider alAbadi said he was assured by the president the US will accelerate its support for his country’s struggle against the Islamic State group. A l-A bad i met w it h Tr u mp a nd Ku sh ner i n Wa sh i ng ton l a st mont h a nd sa id he h ad the impression that the Tr ump administration wou ld ta ke a more ag g ressive approac h, a lt hough he d id not say what t hat m ight ent a i l. Defense Secretar y Jim Mattis recent ly presented Tr ump w ith the out lines of a comprehensive approach to defeating IS and other extremist groups on a globa l sca le, but specifics have yet to be worked out. Officia ls have indicated that the approach is unlikely to depar t radica l ly from the Obama administration’s strateg y, at least w ith regard to ongoing effor ts in Iraq and Sy r ia. Iraq was part of the Trump administration’s original travel ban but was removed from the revised version after a request from the Pentagon and the State Department highlighting Iraq’s key role in fighting the Islamic State. The second travel ban, which restrictions immigration from six Muslim-majority countries, has been halted by a federal court. The US Justice Department has announced an appeal. AP

Trump: US prepared to deal with North Korea on its own

OTOMAC FALLS, Virginia—President Dona ld J. Trump says the US is prepared to act alone if China does not take a tougher stand against North Korea’s nuclear program. Tr u m p ’s c o m m e nt s i n a n inter v iew w it h t he Financial Times come just days before he is set to host Chinese President X i Jinping at his Mar-a-Lago estate in South Flor ida. T he t wo a re e x pected to d isc uss a number of issues, including Nor t h Korea, t rade a nd ter r itor ia l disputes in the South China Sea during their meeting on T hursday and Fr iday. “Yes, we will talk about North Korea,” Trump told the newspaper for a story that appeared Sunday on its web site. “And China has great inf luence over North Korea. And China would either decide to help us with North Korea, or they won’t. And if they do that will be very good for China, and if they don’t it won’t be good for anyone.” Trump said trade was the incentive for China to work with the US. Still, he said the US could “totally” handle the situation in North Korea without China’s help. Asked how he would tackle North Korea, Trump said: “I’m not going to tell you. You know, I am not the US of the past where we tell you where we are going to hit in the Middle East.” While China provides diplomatic and economic support to its neighbor, it claims that its influence over Kim Jong Un’s government is limited. The relationship between the US and China has been uncertain since Trump’s election. During

his campaign he accused China of unfair trade practices and threatened to raise import taxes on Chinese goods and declare Beijing a currency manipulator, though it is unclear whether Trump will follow through with either threat. Trump told the newspaper that he doesn’t “want to talk about tariffs yet, perhaps the next time we meet.” Trump’s ambassador to the UN Nikki Haley, also offered tough talk on China, saying on ABC ’s This Week that the US is pressing Beijing to take a firmer stand regarding North Korea’s nuclear program. UN resolutions have failed so far to deter North Korea from conducting nuclear and missile tests. Last year, the North conducted two nuclear tests and two dozen tests of ballistic missiles. “ They need to show us how concerned they are,” Haley said of the Chinese. “ They need to put pressure on North Korea. The only country that can stop North Korea is China, and they know that.” Asked what the US would do if China doesn’t cooperate, Haley said: “China has to cooperate.” Former Defense Secretary Ash Carter, however, said he doubted that Beijing will cooperate. “I’ve been work ing on the North Korea problem since 1994,” Carter said on ABC. “And we have consistently asked Chinese leaders...because they uniquely have the historical and the economic relationship with North Korea to make a difference. “They haven’t used that influence, and so it’s hard for me to be optimistic with that,” he said. AP

www.businessmirror.com.ph • Editor: Lyn Resurreccion

The World BusinessMirror

Tuesday, April 4, 2017

Trump aides’ disclosures reveal explosion in lucrative pol work

Kellyanne Conway, a White House senior adviser, on her way to a House Republicans conference on Capitol Hill in Washington on March 21. Doug Mills/The New York Times

onald F. McG ahn, now President Dona ld J. Trump’s White House counsel, made $2.4 million as a lawyer with a client list loaded with deep-pocketed conservative groups, from Americans for Prosperity, backed by the conservative billionaires Charles G. and David H. Koch, to the Citizens United Foundation. Tr ump’s leg islative af fa irs director, Marc Shor t, ear ned $78,000 from Freedom Partners, a Koch-linked group where he once served as president, plus nearly $380,000 for consulting work, listing clients such as the Club for Growth and Susan B. Anthony List, both right-leaning activist groups, as well as the presidential campaign of Sen. Marco Rubio, Republican-Florida. And Trump’s chief strategist, Stephen K. Bannon, reported earning more than $1 million tied to conser vative-oriented work, with at least $500,000 of that from entities linked to the conservative megadonor Robert Mercer and his daughter Rebekah, including the Breitbart News Network and Cambridge Analytica, a data mining firm partly owned by Mercer that worked for the Trump campaign. Those disclosures, contained in 92 personal financial statements of Trump administration staff members released starting on Friday night, offer a hint of how an explosion in spending has expanded the lucrative array of private political work in Washington, enriching even the antiestablishment activists and operatives who sided with Trump. Much of the new business has come through super political action committees (PACs) and political nonprofit groups whose fundraising has soared since the Supreme Court’s Citizens United decision in 2010. W hile such groups were once a modest sideline to campaign and lobbying work, the new campaign spending rules have allowed wealthy donors and their entourages to d ispl ace ca mpa ig n ma nagers and party leaders as the leading political-power center. More such business has come from private foundations and ideolog ica l ly or iented med i a companies linked to donors like the Mercers, who have invested in websites, documentaries and other endeavors to battle traditional news organizations. They have also formed political advisory operations to steer their giving and promote their influence. The figures reveal the extent to which private political work has bolstered the financial fortunes of Trump aides, who have made millions of dollars from Republican and other conservative causes in recent years, according to an analysis of the disclosure forms by The New York Times after they were transformed into a computerized database by the Center for Public Integrity. “It has been a bonanza for the consulting class,” said Walter Shapiro, a fellow at the Brennan Center for Justice at New York University, where he studies political spending and campaign finance. “And in this era of dark money, people have gotten very, very rich.” To be sure, Democrats take care of their own as well. When former President Barack Obama took office in 2009, his senior adviser, David Axelrod, reported an income

$800K The amount earned by White House Senior Adviser Kellyanne Conway from her consulting firm and 75 other sources of income of more than $1 million, listing consulting services for Democratic candidates and other political clients. Others, like Robert Gibbs, the press secretary, reported income from working on the Obama campaign. For the Trump aides, one potential drawback is that they will now take government salaries, which for many will amount to a cut in pay as they refrain from outside work to avoid conflicts. When their time in the administration ends, however, they could find even more riches waiting for them. The arrangement has been especially lucrative for insiders and key operatives with ties to the biggest donors, and those closest to Trump, despite his campaigning on an antiestablishment message and his disparagement of business as usual in Washington. The White House did not respond to a request for comment from the aides included in this article. The list of income sources for those in Trump’s White House reads like an encyclopedia of conservative wealth and inf luence. Many of Tr ump’s aides have earned money from rightleaning media organizations like Breitbart and Fox News, or from a firm set up by Newt Gingrich, the former House speaker, to manage his speaking and television appearances. Several aides received payments from organizations backed by major conservative benefactors, such as the Kochs or the Mercers. Others were paid for work on Republican campaigns, including Trump’s or that of Sen. Ted Cruz of Texas, a onetime rival. Few Trump advisers are as plugged into the old and new worlds of political money as Kellyanne Conway, counselor to Trump. As a Republican strategist and pollster who ran a consulting firm, Conway earned more than $800,000 from her firm and reported 75 sources of income. Among the clients that paid her at least $5,000 were the Tea Party Patriots, a group founded in 2009 to oppose Obama’s healthcare and spending initiatives, and the Judicial Crisis Network, a nonprofit group that has spent millions of dollars, raised from wealthy donors, in an effort to reshape the federal court system. She advised nearly a dozen candidates on their campaigns, i n c l u d i n g Tr u m p a n d M i k e Pence, now the vice president. Conway also earned money from speaking appearances at conservative think tanks like the Alabama Policy Institute and the John Locke Foundation. Like many of her colleagues, Conway also profited from at least two Mercer endeavors: A super PAC called Keep the Promise, as well as Cambridge Analytica, which claims to provide “psychographic” profiles that can predict the political leanings of each American adult. New York Times News Service

Jared Kushner and his wife, Ivanka Trump, who are now both senior federal government officials, depart the Mar-a-Lago resort in Palm Beach, Florida, on February 11. Al Drago/The New York Times

China recognizes Kushner as path to the president

ASHINGTON—When President Donald J. Trump welcomes President Xi Jinping of China to his palm-fringed Florida club for two days of meetings on Thursday, the studied informality of the gathering will bear the handiwork of two people: China’s ambassador to Washington and Trump’s son-in-law, Jared Kushner. The Chinese ambassador, Cui Tiankai, has established a busy back channel to Kushner, according to several officials briefed on the relationship. The two men agreed on the club, Mar-a-Lago, as the site for the meeting, and the ambassador even sent Kushner drafts of a joint statement that China and the US could issue afterward. Kushner’s central role reflects the peculiar nature not only of this first meeting between Trump and Xi, but also of the broader relationship between the US and China in the early days of the Trump administration. It is at once highly personal and blunt ly transactiona l—a strategy that carries significant risks, experts said, given the economic and security issues that divide the countries. While Chinese officials have found Trump a bewildering figure with a penchant for inflammatory statements, they have come to at least one clear judgment: In Trump’s Washington, his son-inlaw is the man to know. Kushner first made his influence felt in early February when he and Cui orchestrated a fencemending phone ca l l bet ween Trump and Xi. During that exchange, Trump pledged to abide by the four-decade-old “OneChina” policy on Taiwan, despite his earlier suggestion that it was up for negotiation. Now, Trump wants something in return: He plans to press Xi to intensify economic sanctions against North Korea to pressure

the country to shut down its nuclear weapons and ballistic missile programs. He has also vowed to protest the chronic trade imbalance between the US and China, which he railed against during his presidential campaign. China’s courtship of Kushner, which has coincided with the marginalization of the State Department in the Trump administration, reflects a Chinese comfort with dynastic links. Xi is himself a “princeling”: His father was Xi Zhongxun, a major figure in the Communist revolution who was later purged by Mao Zedong. Not only is Kushner married to t he president ’s d aughter, Ivanka, but he is also one of his most inf luent ia l adv isers—a 36 -year-old with no previous government experience, but an exceptionally broad portfolio under his father-in-law. “Since Kissinger, the Chinese have been infatuated with gaining and maintaining access to the White House,” said Evan S. Medeiros, a senior director for Asia in the Obama administration. “Having access to the president’s family and somebody they see as a princeling is even better.” Former US officials and China experts warned that the Chinese had prepared more carefully for this visit than the White House, which is still debating how harshly to confront Beijing, and which has yet to fill many important posts in the State Department. Several said that if Trump presented China with an ultimatum on North Korea, it could backfire.

“China will either decide to help us with North Korea, or they won’t,” Trump said in an interview with The Financial Times that was published on Sunday. “And if they do, that will be very good for China, and if they don’t, it won’t be good for anyone.” The president said he had “great respect” for the Chinese leader, but he would warn him that “we cannot continue to trade if we are going to have an unfair deal like we have right now.” Shortly after winning the election, Trump said he might use the “One-China” policy, under which the US recognizes a single Chinese government in Beijing and has severed its diplomatic ties with Taiwan, as a bargaining chip for greater Chinese cooperation on trade or North Korea. Trump had thrown that policy into doubt after taking a congratulatory phone call from the president of Taiwan. That caused consternation in Beijing, and Xi refused to get on the phone with Trump until he reaffirmed the policy. After the two leaders finally spoke, White House officials said in a statement that the men had “discussed numerous topics, and Trump agreed, at the request of Xi, to honor our One-China policy”. Trump insisted on that wording, according to a person briefed on the process, because he wanted to make clear that he had made a concession to Xi. Since that call, Cui has continued to cultivate the Kushner family. Later in February, he invited Ivanka Trump and the couple’s daughter, Arabella, to a reception at the Chinese Embassy to celebrate the Lunar New Year. Inside the White House, the most visible sign of Kushner’s influence on China policy came in March at the beginning of a meeting of the National Security Council’s “principals committee” to discuss North Korea. He was seated at the table in the Situation Room when Gen. Joseph F. Dunford Jr., chairman of the Joint Chiefs of Staff, walked in. Seeing no chairs open, Dunford headed for the backbenches, according to two people who were there. Kushner, they said, quickly

offered his chair to Dunford and took a seat along the wall. W hile administration officials confirm that Kushner is deeply involved in China relations, they insist that Secretary of State Rex W. Tillerson has taken the lead on policy and made many of the decisions on the choreography and agenda of the meeting at Mar-a-Lago. In March Tillerson made his first trip to Beijing as secretary of state, during which he and Xi discussed the planning in a 30-minute meeting. He was criticized afterward for repeating the phrases “mutual respect” and “win-win solutions,” which are drawn from the Chinese diplomatic lexicon and have been interpreted to assert a Chinese sphere of influence over the South China Sea and other disputed areas. A senior US officia l said Tillerson applied his ow n meani ng to t hose ph ra ses —“w i nw in”, he said, was or iginally an American expression—and was not accepting China’s definition. He said the secretar y had adopted a significantly tougher tone in pr ivate, pa r t ic u l a rly about China’s role in curbing Nor th Korea’s provocations. Kushner has passed on proposals he got from Cui to Tillerson, who in turn has circulated them among his staff in the State Department, officials said. But the department’s influence has been reduced as many positions remain unfilled, including that of assistant secretary for East Asian affairs. Though Tillerson has kept a low profile, officials said he was trying to develop his own relationship with Trump at regular lunches and dinners. K u sh ner ’s i nvolveme nt i n China policy prompted quest ion s a f ter re por t s t h at h i s company was negotiating with a politically connected Chinese firm to invest hundreds of millions of dollars in his family’s f l agship proper t y, 666 Fif t h Avenue in Manhattan. On Wednesday amid the glare of negative publicity, Kushner’s company ended negotiations with the firm, the Anbang Insurance Group. New York Times News Service

The World BusinessMirror

Tuesday, April 4, 2017

www.businessmirror.com.ph

President Donald J. Trump signs an energy independence executive order (EO) on March 28 at the environment protection Agency headquarters in Washington. Trump signed an EO aimed at moving forward on his campaign pledge to unravel former President Barack Obama’s plan to curb global warming. AP/Pablo Martinez Monsivais

Bit by bit, Trump undoing Obama policies

ASHINGTON—Amid the turmoil over staff shakeups, blocked travel bans and the Russia cloud hanging overhead, President Donald J. Trump is steadily plugging away at a major piece of his agenda: Undoing Obama. From abortion to energy to climate change and persona l investments, Trump is keeping his promises in methodically over t u r ning reg u l at ions a nd policies adopted when Barack Obama was president. It h a sn’t a l l been smoot h sailing. Trump recently failed to fulfill his pledge to repeal and replace the Affordable Care Act, which continues to stand as Obama’s most recognizable domestic policy achievement. Trump and House Speaker Paul Ryan couldn’t persuade enough fellow Republicans to back new he a lt h - c a re l e g i s l at io n l a s t month. Ryan pulled the measure just before a scheduled House vote. Trump has had better outcomes in other areas.

Climate change

Trump signed an executive order (EO) last week to deliver on his pledge to unravel Obama’s efforts to curb global warming. The order launched a review of the Clean Power Plan, Obama’s chief effort to curb carbon emissions by restricting greenhouse-gas emissions at

2,735 km The length of the Keystone XL oil pipeline that will carry oil from tar sands in Alberta, Canada, to refineries along the Texas Gulf Coast coal-fired power plants. Trump also lifted a 14-month-old halt on new coal leases on federal lands. The Obama administration had imposed a three-year freeze on such leases in January of last year. The EO covers a range of other Obama-era rules, including requirements to factor the “social cost” of carbon emissions into all regulatory actions and to crack down on methane emissions at oil and gas wells. Business groups had complained to Trump, himself a businessman, that the rules were intrusive and expensive.

Internet privacy

Trump is expected to sign a measure soon to block online privacy

regulations the Federal Communications Commission (FCC) issued during Obama’s final months in office. It’s a first step toward allowing Internet providers to sell information about their customers’ browsing habits. The FCC rule was designed to give consumers more control over how companies like Comcast, AT&T and Verizon share information. Critics complained that the rule would have increased costs, stifled innovation and picked winners and losers among internet companies. White House Spokesman Sean Spicer says the rule represents the type of “federal overreach” that Trump pledged as a candidate to reverse.

Abortion/family planning

Trump is expected to sign legislation erasing another Obama rule, one that barred states from withholding federal family-planning funds from Planned Parenthood affiliates and other clinics that provide abortions. The rule was finalized shortly before Obama left office in January. The measure cleared the Senate last week with Vice President Mike Pence, who is also president of the Senate, casting the tie-breaking 51st vote in the 100-member chamber.

Keystone XL oil pipeline

Trump greenlighted the longdelayed project on March 24, reversing Obama’s decision less than 18 months earlier. After Trump invited TransCanada, the Canadian company building the $8-billion pipeline, to resubmit

its application, the State Department approved the project, saying it would advance US national interests. Obama had said the project would not. Approval came nearly a decade after TransCanada applied to complete the 2,735-kilometer pipeline to carry oil from tar sands in Alberta, Canada, to refineries along the Texas Gulf Coast. Trump says the project will reduce costs and reliance on foreign oil, and create thousands of jobs. Obama had said it would undercut US credibility in international efforts to tackle climate change.

Dakota access pipeline

Under Obama, the Army Corps of Engineers had declined last December to allow pipeline construction under South Dakota’s Lake Oahe on grounds that alternate routes needed to be considered. Native American tribes had sued to block construction, arguing that the pipeline threatened their water supply and cultural sites. The project has moved forward again under Trump, who acted shortly after taking office. In February the Army Corps of Engineers abandoned further study and granted an easement that was needed to complete the pipeline. Energy Transfer Partners immediately began drilling under the lake.

Fuel-efficiency standards

The Trump administration is reexamining federal requirements governing the fuel efficiency of cars and trucks. In 2012 the Obama administration set fuel

economy regulations for model years 2017-2025 and agreed to complete a midterm evaluation by next year. Then, days before Obama left office, the Environmental Protection Agency (EPA) decided to keep stringent requirements it had set in place for model years 2022-2025. The auto industry ba lked. Tr ump announced in Michigan that he’s putting the midterm review back on track. His decision has no immediate effect but requires the EPA to determine no later than April 2018 whether the 2022-2025 standards are appropriate.

Trans-Pacific partnership

Obama was his administration’s biggest cheerleader for the sweeping agreement involving the US and 11 other Pacific Rim nations. But the Senate needed to ratify it, and bipartisan opposition basically doomed it before he left office. As a candidate, Trump railed a g a i n st t h i s a g re e me nt a nd pledged to withdraw from it, saying he was a better negotiator and could strike better deals. Shortly after taking office, he directed the US trade representative to withdraw and said he would pursue individual deals with the other countries.

Abortion/Mexico City policy

Trump reinstated a ban on providing federal money to international groups that perform abortions or provide information about them. Obama had lifted the ban when he took office in 2009. Known as the “Mexico City

Policy” or, by critics, as the “global gag rule”, the regulation has been a political volleyball, instituted by Republican administrations and rescinded by Democratic ones since 1984. Trump signed it one day after the 44th anniversary of the Supreme Court’s 1973 Roe v. Wade decision that legalized abortion in the United States. The policy also prohibits taxpayer funding for groups that lobby to legalize abortion or promote it as a family-planning method.

Personal finance

Trump has instructed the Department of Labor to delay an Obama-era rule that would require financial professionals who charge commissions to put their clients’ best interests first when advising them on retirement investments. The “fiduciary rule” was aimed at blocking consultants from steering clients toward investments with higher commissions and fees that can eat away at retirement savings. The rule was to take effect this month. The financial services industry argued that the rule would limit retirees’ investment choices by forcing asset managers to steer them to low-risk options. Undoing the rule was part of a promised assault by Trump on banking rules enacted after the Great Recession. He has directed the Treasury secretary to review the 2010 Dodd-Frank financial oversight law, which he has said is a disaster. The law’s aim was to keep banks from repeating practices that many blamed for the financial meltdown. AP

Congress seen as not likely to pass tax overhaul quickly W

A SHINGTON—A fter their humiliating loss on health care, Republicans in Congress could use a quick victory on a big issue. It won’t be an overhaul of the tax code. Overhauling the tax code could prove harder to accomplish than repealing and replacing Barack Obama’s health law. Congressional Republicans are divided on significant issues, especially a new tax on imports embraced by House Speaker Paul Ryan. And the White House is sending contradicting signals on the new tax, adding to the uncertainty. House Republicans also can’t decide whether to move on from health care. Ryan canceled a scheduled vote on a House GOP plan after it became obvious that Republicans didn’t have the votes. He said he will continue to work on the issue but one of his top lieutenants on health care, Rep. Kevin Brady, RepublicanTexas, says he is now “100-percent” focused on tax reform. Ryan says Congress can work

on both at the same time. It won’t be easy. Here’s why:

Republican divide

House and Senate Republicans largely agree on the broad outlines of a tax overhaul. They want to lower tax rates for individuals and corporations, and make up the lost revenue by scaling back tax breaks. But they are sharply divided on a key tenet of the House Republican plan. The new “border-adjustment tax” would be applied to profits from goods and services consumed in the US, whether they are domestically produced or imported. Exports would be exempt. House GOP leaders say the tax is key to lowering the top corporate income-tax rate from 35 percent to 20 percent. But Sen. Rob Portman, RepublicanOhio, is the latest in a long line of Republican senators to come out against the tax.

Absent Democrats

Senate Fi n a nce Com m it tee

Chairman Orrin Hatch, Republican-Utah, says he wants to work with Democrats to overhaul the tax code. “A bipartisan bill would allow us to put in place more lasting reforms and give the overall effort additional credibilit y,” Hatch said. Majority Leader Mitch McConnell, Republican-Kentucky, has said it is bad policy to pass major legislation without bipartisan support. “Without some meaningful buy-in, you guarantee a food fight,” McConnell wrote in his memoir last year. “You guarantee instability and strife.” But in the House, Republicans haven’t reached out to Democrats in any meaningful way.

Where’s the White House?

“Obviously, we’re driving the train on this,” White House Press Secretary Sean Spicer said. B u t P r e s i d e nt D o n a l d J. Trump’s administration has been all over the map on tax reform. Trump at one point said the House border tax is too com-

plicated, then said it’s in the mix. Treasury Secretary Steven Mnuchin told a Senate panel that “there wou ld be no absolute ta x cut for the upper class” in Tr ump’s ta x plan. However, the plan Tr ump unveiled during his presidentia l campaig n would provide big ta x breaks to high-income households.Since taking office, Trump has promised “massive” tax cuts for the middle class. A former Treasury official under President Barack Obama says the W hite House needs to stake out clear goals on tax overhaul to guide the debate in Congress. “I think it’s important for the administration to signal early the general shape” of what they would like to accomplish so that there are fewer proposals vying for attention, said Michael Mundaca, a former assistant Treasury secretary now at Ernst and Young.

Tax change is difficult

There is a reason it’s been 31 years since the last time Congress

rewrote the tax code. Since then, the number of exemptions, deductions and credits has mushroomed. Taxpayers enjoyed $1.6 trillion in tax breaks in 2016—more than the federal government collected in individual income taxes. That huge number could provide plenty of tax breaks that lawmakers can scale back so they can lower tax rates significantly. There is just one problem—all of the biggest tax breaks are very popular and have powerful constituencies. Nearly 34 million families claimed the mortgage interest deduction in 2016. That same year more than 43 million families took advantage of a deduction of state and local taxes. The House Republicans’ tax plan would retain the mortgage deduction and eliminate the deduction for state and local taxes.

Health care

Both Trump and Republicans in Congress made big campaign promises to repeal and replace Obama’s health law, so the issue

won’t go away. However, several players say negotiations on a way forward are nonexistent. In the meantime, Trump is stoking animosity among a key voting bloc by criticizing them on Twitter. Two factions in the House GOP had members oppose the health plan: the hard right Freedom Caucus and the moderate Tuesday Group. Ryan has suggested that they get together to sort out their differences, but it’s not happening, according to one key lawmaker. “We are not currently negotiating with the Freedom Caucus. There was never a meeting scheduled with the Freedom Caucus. We will never meet with the Freedom Caucus,” said Rep. Chris Collins, Republican-New York, a member of the Tuesday Group. Trump tweeted: “The Freedom Caucus will hurt the entire Republican agenda if they don’t get on the team, & fast. We must fight them, & Dems, in 2018!” To quote a favorite saying of the president, “Not nice.” AP

The Regions BusinessMirror

news@businessmirror.com.ph

Dela Rosa orders inventory of illegal-drug haul in PNP laboratory

DOJ chief warns BI: Continued staff resignation due to loss of OT ‘security risk’

By Rene Acosta

By Joel R. San Juan

@jrsanjuan1573

USTICE Secretary Vitaliano N. Aguirre II on Monday warned the continued resignation of Bureau of Immigration (BI) personnel, due to the removal of overtime pay, is putting national security at risk.

@reneacostaBM

ATIONAL Police Director General Ronald M. dela Rosa ordered on Monday for an inventory of all illegal drugs at the PNP-Crime Laboratory in Camp Crame, following the recent arrest of a crime-laboratory official in a drug-pot session. Dela Rosa ordered the Directorate for Investigation and Detective Management (DIDM), headed by Director Augusto Marquez, to conduct the inventory. Aside from conducting physical inventory of seized illegal drugs, the PNP chief also instructed the DIDM to test the items. “I am directing the director of the DIDM to conduct an inventory of all evidence under the custody of the crime lab. Please check, sir. Baka mamaya, puro tawas naka-deposit doon, ha,” dela Rosa said. “Review also to determine kung tawas or totoo talaga.” The PNP chief made the order following last week’s arrest of Supt. Lito Cabamongan, former chief of the Crime Laboratory Satellite Office in Muntinlupa City, during a pot session in Las Piñas City. Cabamongan, who claimed he was a “deep-penetration agent” on a mission against illegaldrugs syndicates when arrested, implicated several PNP officers allegedly involved in the illegaldrugs trade. Dela Rosa said the PNP is now looking at Cabamongan’s allegations. He, however, said the PNP is not taking Cabamongan’s pronouncements “hook, line and sinker”. He said the suspect was high on drugs when he made the statements. I n it i a l d r u g- test i ng on Cabamonga yielded positive results. Confirmatory test will be conducted this week. Dela Rosa said Cabamongan will be subjected to summary dismissal proceedings if the confirmatory testing on him will turn out positive.

Editor: Efleda P. Campos • Tuesday, April 4, 2017 A9

GOURD PRINCE On a farm tour, young Nonie frames himself with prolific gourd vine of the Mayumi variety bred by East-West Seed Co. Inc. The seed company provides seed labels with the right planting procedures.

LEONARDO PERANTE II

OFWs-turned-DepEd teachers get teaching kits By Elmer V. Recuerdo Correspondent

AC L OB A N C I T Y—T he y worked in different Asian countries either as teachers, tutors or household-service workers. After working abroad for several years, they came home to take up their passion—to teach local children. Nine former overseas Filipino workers (OFWs), all licensed teachers, were recently given assignments by the Department of Education (DepEd) to teach in different schools in the region. The effort is part of the project called Sa Pinas, Ikaw ang Ma’am/Sir (SPIMS) of the National Reintegration Center for OFWs, an office under the Department of Labor and Employment. The project, a reintegration program, aims to facilitate the employment of OFWs who have passed the Licensure Examination for Teachers and wish to work in the country as teachers. It encourages OFWs to

grab the opportunity and eventually reverse migration through this employment facilitation. “Working abroad and being away from your children was the toughest part of my life, but the positive attitude to face hardships brought out the best in me. Now, I am happier doing the job I love in my beloved country and personally attend to the needs of my children,” said Riza Cecilia Lago, a project recipient. Lago, her family’s bread winner, confessed to being a battered wife. She left her children to work as a teacher in Thailand, so she could provide for the growing needs of the family. Michael Pernites, who also worked as a teacher in Thailand for 10 years, said he is lucky and blessed to have availed himself of the program. Pernites said he would always prefer to teach in Ormoc City, where he came from, but the teaching opportunity that initially opened to him was in Thailand. He said he had

to endure the loneliness of working abroad for the sake of his children. Pernites said he learned about the SPIMS project on the Internet and decided to take his chance. True enough, he was given a Teacher I position, and is now teaching at Can-Adieng Elementary School in Ormoc City. He not only works in his chosen career; he also enjoys quality time with his family. The nine new teachers also included Rissa Mae Villamor, Rey Locion, Chonalyn Pada, Nena Nida Candiza, Gemalie Durotan, Hannah Marie Dueñas and Lovely Shena Repolido. They were provided with teaching kits that contain an Android tablet, voice-aid lapel, dictionary, planner, personalized bag and other school supplies. The awarding ceremony was held at the DOLE Training Center on March 24, led by Assistant Regional Director Roy Buenafe, NRCO Regional Coordinator Catherine Doblon and DOLE Field Office heads.

In an interview with reporters, Aguirre said 32 immigration personnel have already resigned, while 50 others have filed a leave of absence for six months to look for another job. The discontinuance of overtime pay came after the signing of Republic Act 10924, or the General Appropriations Act (GAA) for fiscal year of 2017, which took effect on January 1. The GA A vetoed the use of express-lane charges collected by the BI, which was intended for payment of salaries of casual and contractual personnel, confidential agents and job employees; augmentation of salaries of personnel who render services beyond office hours; and payment of health-insurance premium. The funds collected from use of express lanes will now go to the national treasury. Before the President issued the order last December, he said those manning the immigration lanes were getting as much as P48,000 a month in overtime pay. Aguirre said with the help of Secretary Leoncio B. Evasco Jr. of the Office of the Cabinet Secretary, he is pushing for palliative measures to cushion the effect of the order. He noted BI employees with Salary Grades 1 to 11 are receiving a measly salary of P14,000 a month. Aguirre said he and Evasco would be appealing to President Duterte to bring back the previous setup for the express lanes, until the new immigration law is approved. The Department of Justice (DOJ) chief said he tried to convince Budget Secretary Benjamin

AGUIRRE: “This will also affect our economy, in general; that’s why we need to find an immediate solution.”

E. Diokno to approve the temporary arrangement, but the latter declined. Aguirre added he even issued a legal opinion the funds may be sourced out from airlines and shipping firms under Section 7-A of the Philippine Immigration Act. T he prov ision states that, “Immigration employees may be assigned by the commissioner of immigration to do overtime work at rates fixed by him when the service rendered is to be paid for by shipping companies and airlines or other persons served.” Aguirre, however, said the Department of Budget and Management (DBM) expressed legal reservation over the position of the DOJ. Aside from endangering the national security, the absence of many BI personnel has resulted in long queues at the BI counters, thus discouraging more tourists from coming into the country. “This will also affect our economy, in general; that’s why we need to find an immediate solution,” Aguirre said. The justice secretary said the DBM allotted P200 million to pay for the extra work rendered by the immigration officers, but the amount would only allow a ma ximum of P5,000 in overtime pay for each immigration personnel.

Quezon solon exhorts more women to excel By John Bello Correspondent

UCENA CITY—The head of over 9,000-strong Kalipunan ng Liping Pilipina (Kalipi) in Quezon province wants success stories to happen for ordinary women of the whole province. “I want more ordinary stories of success to happen for Kalipi members, as they serve as inspiration for all women of the province, to the governor and to me,” Alona Partylist Rep. Anna Villaraza-Suarez, wife of Gov. David Suarez, told a jam-packed crowd of mostly women on March 31 at the Quezon Convention Center here for the celebration of Women’s Month. The provincial women’s month celebration was attended by Quezon provincial government officials, led by Suarez; Quezon Mayors League, led by its president, Mauban mayor Ferdinand Llamas; and women leaders from several sectors celebrating their shared struggle, hopes and triumphs, with the theme “We Make Change Work for Women.” Villaraza-Suarez—clad in a simple white dress for the festive occasion of Quezon women in pink T-shirts—cited Rebecca Real of Sariaya, who engaged in farming and succeeded to make her three daugh-

ters all members of the police force; and Maria Valerio of Tagkawayan, with seven kids who graduated in engineering, accountancy, nursing and marine transportation. She narrated lessons during her first election- campaign foray in May last year when her husband was out of the country for two weeks. “Humugot ako ng lakas sa kababaihan noong kampanya at doon ko nalaman ang aral ng halaga ng pamilya,” she said. She told the gathering of her livelihood programs and ongoing projects, such as the launching of Gulayan sa Bakuran; 114 Juana food carts; the establishment of a P10-million livelihood-training center in Mauban, the P18-million funding set up in all district hospitals for Quezon indigent patients; the scholarship program that has produced college graduates; and the launch of the Quezon First 1,000 Days of Life Program, which aims to ensure women and child safety and health for the first 1,000 days starting from conception of the mother up to the age of 2 years of the child. She and Suarez touted Q1k program as the first in the entire country to be launched for a packaged intervention program of child and women health care that involves proper nutrition, regular medical checkup, vaccination and clean water

to ensure the next generation grows up healthy and primed for success. Piloted three years ago in 12 towns of Quezon, Q1K has already benefited 321 babies focused on the prevention of child malnutrition that results to loss of potential opportunities for the growing child. The governor and the Alona party-list congresswoman led last month a three-day summit on Q1K in Tagaytay to assess and ensure the continuity of the program. Meanwhile, awards were also given during the provincial women’s month celebration to outstanding municipalities of the province that won on gender and development focal-point system last year. Provincial Gender and Development (GAD) officer Ofelia Palayan cited Mauban, San Narciso, Unisan and Agdangan for the outstanding awards and received plaques and P35,000 cash prizes. Mauban also bagged the special awards for best GAD implementer in social infrastructure, social-waste management, resource allocation, and utilization and environmental management. Pagbilao got the same award for health services and disaster preparedness; Candelaria in public employment services; and San Narciso and Agdangan for resource allocation and utilization.

DRY-SPELL WOES

A farmer from La Trinidad, Benguet, cultivates her lettuce and onion lplots in preparation for the planting season, despite an expected long dry spell. MAU VICTA

A10 Tuesday, April 4, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Make it work

raduation is a common theme in the country around this time of the year. For us in the news media, when we write about graduation, we always quote the number of new graduates joining the job market. This year that number is between 1 million to 1.2 million, according to government and private estimates. We remember, not too long ago, the number of yearly entrants to the labor force was only about 500,000. How it had doubled in such a short time is no wonder. Each year about 2 million more Filipinos are added to the Philippine population. Government projections say that by 2022, at the end of President Duterte’s term, there would be around 114 million Filipinos. Imagine how many more Filipinos would be looking for a job then. Prospects for young job hunters today are not promising. Associated Labor Union Spokesman Alan Tanjusay said new graduates will be facing various concerns, like job-skills mismatch, short-term contractual work, low wages and unsafe workplaces. He said the mismatch between skills and the actual jobs available in the market is the main reason for the country’s growing problem of unemployment and underemployment. This makes the success of the K to12 curriculum reform all the more imperative, because it was basically undertaken to boost skills-to-job matching and human capital development, to make our education system more suited to the real demands of various industries. There have been many objections to K to 12. There is even a pending petition in the Supreme Court (SC) to have it recalled, filed by parents and teachers from Manila Science High School. It has been languishing in the tribunal for two years. We have to wonder what would happen if the SC suddenly rules in favor of the petition. Kids are already in senior high school. Indeed, other kids have already graduated. When the Department of Education started implementing the curriculum reform in 2012, we wondered why the government was already doing it when the bill that was supposed to mandate it, guide its implementation and provide its budget was still pending in Congress. Indeed, much of the delay then in passing the bill and enacting it into law was due to opposition from parents and stakeholders on the additional expenses for an extended basic education cycle (kindergarten plus six years grade school, four years of junior high school and two years of senior high school) and the lack of preparation for it by the government. Today, though, much of that opposition had been rendered moot. It is already a law (Republic Act 10533, or the Enhanced Basic Education Act). It is already being implemented. Our kids are already going through it. There is no going back. We should all just try to make the most out of this curriculum—students, schools, the government and the private sector. Let us link our schools with the different industries and make the curriculum relevant, to provide real options and income opportunities for graduates. The government must also work doubly hard in providing K to 12 with enough teachers, textbooks, facilities and other basic needs, as well as cutting down the significant dropout rate in senior high school. The senior high-school program is supposed to prepare students for immediate employment after graduation. The idea is, after Grades 11 and 12, they would not be just old enough to work, but skilled and qualified enough to get a job, whether they go on to college or not. Those who go on to college are supposed to be better prepared having gone through the different track categories offered by its more specific curriculum. We hope the government with the help of the private sector can deliver on K to 12’s promise so it would not be an added burden to parents and their kids but, instead, be a boon to efforts to make our graduates at par with international standards and more employable in 21st-century workplaces.

Since 2005

BusinessMirror A broader look at today’s business ✝ Ambassador Antonio L. Cabangon Chua

Let the countryside ride on the progress wagon Manny B. Villar

THE Entrepreneur Continued from A1

y recent travels around the country, however, changed my mind—many second-tier and third-tier cities and municipalities are booming, creating opportunities for business and livelihood. Mega Manila is still the biggest contributor to GDP, but it no longer has a monopoly of progress. Development is changing the landscape in many areas outside the metropolitan region, including Digos, a second-class city and the capital of the province of Davao del Sur, and Bacolod, now a highly urbanized city and the capital of the province of Negros Occidental.

After my recent travels around the country and reviewing our plans, I believe Vista Land can add 100 more cities and towns in its portfolio of projects, but we’re initially considering 50 locations. Considering the thrust of the Duterte administration to boost development in the provinces, the second batch of 100 locations for our company will not necessarily be our ultimate goal. The government’s thrust and private-sector activities, like Vista

Land’s expansion outside Mega Manila, fit with suggestions from other institutions. Analysts at DBS Group Research, for example, said in a market report published by local newspapers in January that the government should prioritize infrastructure projects in the provinces in order to boost growth of the national economy. Construction activities outside the greater Manila area, according to DBS, will have a more significant

Editor in Chief Managing Editor Associate Editor News Editor City & Assignments Editor Senior Editors

T. Anthony C. Cabangon

Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos

Online Editor Social Media Editor

Ruben M. Cruz Jr. Angel R. Calso

Creative Director Chief Photographer

Eduardo A. Davad Nonilon G. Reyes

Chairman of the Board & Ombudsman President VP-Finance VP Advertising Sales Advertising Sales Manager Group Circulation Manager

Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Marvin Nisperos Estigoy Aldwin Maralit Tolosa Dante S. Castro

BusinessMirror is published daily by the Philippine Business Daily Mirror

HOM

Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines. Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025. (Advertising Sales) 893-2019; 817-1351, 817-2807. (Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.

www.businessmirror.com.ph

Printed by brown madonna Press, Inc.–San Valley Drive KM-15, South Superhighway, Parañaque, Metro Manila MEMBER OF

John Mangun

Jun B. Vallecera Max V. de Leon Jennifer A. Ng Dionisio L. Pelayo Vittorio V. Vitug

impact on the economy. From my perspective, the positive impact would be in the form of new investments being attracted to the provinces, the livelihood opportunities that will be created by infrastructure development and the jobs that new investments, infrastructure and livelihood activities will generate. Household incomes will increase, so consumers’ purchasing power will grow, making essential goods and services, not the least shelter, affordable to more people. Remittances from overseas Filipinos and the business-process outsourcing (BPO) industry are already spurring development in the provinces, but the aggressive implementation of infrastructure projects will

Thanks Obama...for nothing

Founder

Publisher

Metro Manila accounts for roughly 60 percent of the Philippines’s GDP; the remaining 40 percent is divided among the rest of the country, with the poorest regions accounting for a negligible share of the economy. Metro Manila, however, is not the Philippines. The other regions have the potential and deserve to develop and contribute a larger share to the economy.

OUTSIDE THE BOX

nly the most fanatic and foolish apologists for the administration of US President Barack Obama would credit any foreign-policy successes. He considered himself a citizen of the world and believed that he had the persuasive powers to change the world to his vision. In October of 2008—months after his inauguration—he addressed the International Olympic Committee to persuade a vote for the 2016 Summer Games being held in his hometown of Chicago, Illinois. In 2016 he went to London threatening British voters that their country would be at “back of the queue” in any trade deal with the US if the country chose to leave the European Union. Both of his efforts were failures. The list of foreign-policy disasters is long, perhaps starting with the US-supported—by both words and bombs—Arab Spring in 2011. In 2012 Obama warned that the Syrian government in a terrible civil war would not be allowed to cross the “red line” on the use of chemical weapons. Even today Obama apolo-

gists cite this as a positive turning point as Syria admitted having a stockpile of the weapons that were since destroyed. Yet, it has ultimately been Russia that has taken the steps necessary to help stop both the war and the expansion of the Islamic State of Iraq and Syria (ISIS). The rise of ISIS, too, came as a result of misguided US policy in Iraq by withdrawing its military and leaving a power vacuum that allowed ISIS to strengthen and overwhelm the Iraqi government and armed forces. The Ukrainian territor y of Crimea was annexed by the Russian Federation in March 2014. The Yemeni Civil War is an ongoing conflict that began in 2015 between two factions, one supported

In November 2011 and through early 2012, President Obama and his then-Secretary of State Hillary Clinton announced the US “pivot to Asia”. “Let there be no doubt: in the Asia Pacific in the 21st century, the United States of America is all in,” he said. A US presence in the Asia-Pacific region was a top priority. by Saudi Arabia and one by Iran. In November 2011 and through early 2012, President Obama and his then-Secretary of State Hillary Clinton announced the US “pivot to Asia”. “Let there be no doubt: in the Asia Pacific in the 21st century, the United States of America is all in,” he said. A US presence in the AsiaPacific region was a top priority. By May 2012, the Chinese had occupied Panatag Shoal. During a major foreign-policy address on May 29, 2014, Obama laid out a sweeping vision for US foreign policy. Not a single word was uttered about Asia. Interestingly, even in the face of strong opposition here in the Philippines, the Enhanced Defense Cooperation Agreement had been signed on April 28, 2014. While North Africa, Europe and the Middle East still have some US input and influence, the US “war” in

be a big boost to development. We really need to push for the development of the regions outside Mega Manila. The government, principally the Department of Public Works and Highways, should give priority to infrastructure projects in the regions. Giving priority to infrastructure development in the regions outside Mega Manila will help address not only economic issues but social problems, as well. The Asian Development Bank, in a report titled “Poverty in the Philippines”, identified low economic growth and weak employment generation as among the main causes of poverty in the country. Metro Manila accounts for roughly 60 percent of the Philippines’s GDP; the remaining 40 percent is divided among the rest of the country, with the poorest regions accounting for a negligible share of the economy. Metro Manila, however, is not the Philippines. The other regions have the potential and deserve to develop and contribute a larger share to the economy. So let’s give the countryside the chance to get on the progress wagon.

For comments, e-mail mbv.secretariat@gmail. com or visit www.mannyvillar.com.ph.

Southeast Asia has been lost. While the local press and media still turn to the politicians, diplomats and academics for assurances that there is still hope for US engagement for Philippine interests, reality is a cruel mistress. She can be ignored but will never go away. The arbitration ruling in favor of the Philippines seemed at first to put a restraint on Chinese ambitions. However, from Jamil Anderlini’s piece in The Financial Times: “Since then, the US has suffered setback after setback in its efforts to rally other countries with competing claims in the region while China has accelerated its militarization and construction of artificial islands that give it effective control of the territory. Even some US officials privately acknowledge that China has won the battle for the South China Sea without firing a shot”. While the smart people here and in the West keep talking about the “rule of law” and international agreements, the Chinese government only remembers the words of Mao Zedong: “Political power grows out of the barrel of the gun”. 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.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Where will mining trust fund go? Ernesto M. Hilario

ABOUT TOWN

nvironment Secretary-designate Regina Paz L. Lopez wants to take a direct hand in how mining companies will use their social development and management program (SDMP) funds, as she intends to make the industry benefit more people “far beyond their host communities”. Here’s what Lopez actually said recently, based on news reports: “What I want to do with the SDMP fund is for the Department of Environment and Natural Resources [DENR] to jointly manage it with the mining companies and the community. I want to use their funds in the area-development approach for more impact.” The Mining Act of 1995 requires mining firms to allot the equivalent of at least 1.5 percent of their operating costs to be spent for the improvement of the living standards of the host community and surrounding areas. Mining firms are duty-bound to comply with the provisions of the law, or else face suspension or closure. But critics claim that no accounting has been conducted either by the Commission on Audit (COA) or independent thirdparty auditors as to how the SDMP funds have grown over the years, and how they have been spent. This has raised concern that the SDMP funds could be used for less than noble purposes, that is, end up in the wrong pockets. Data compiled by the DENR’s Mining and Geosciences Bureau (MGB) show that P5 billion has been committed in SDMP funds until 2021. The Siana Gold Project in Davao, for instance, is estimated to have an annual average SDMP fund of P12.83 million—or three times the combined IRA and 16 times the development fund of six barangays affected—or P128.3 million over its estimated mine life of 10 years. Lopez wants to revise the SDMP guidelines that 75 percent must be spent on community-development programs; 15 percent on mining technology and geosciences-advancement programs; and 10 percent on information, education and communication program. “The SDMP funds should not be limited just to the host communities. Of course, they’re the ones you should take care of. But, if used well, you don’t need to take care of them anymore, because they will use their own money,” Lopez said. Lopez recently unveiled the DENR’s Integrated Area Development Plan (IADP), which runs for six years on top of the compulsory five-year SDMP. The pilot IADP area is Aroroy town in Masbate province, which is said to have plenty of gold resources. Lopez wants to develop Aroroy into a model municipality hosting a mine site. On January 30 this year Lopez ordered all suspended mining firms to each open a trust-fund account in the amount of P2 million for every hectare of disturbed land before they can be allowed to remove their stockpiles from mining areas and given export permits. These mining firms were also directed to follow the guidelines on the creation of the trust fund, including the setting up of a non-governmental organization (NGO), the recipients of the trust fund and the drafting of all company documents. Lopez’s appointment by President Duterte has not been confirmed by the bicameral Commission on Appointments (CA), because of questions raised about her recent order to close down 23 mining firms and suspend five others based on the results of a mining audit. She also ordered the cancellation of 75 mineral-production sharing processing agreements on the ground that these were located in watershed areas, contrary to law. She again faces the CA on May 3, the first day Congress resumes its sessions, that is, if President Duterte reappoints her to the post, as she has been effectively bypassed by the bicameral body.

MWSS gets new head

Metro Manila’s 12 million water consumers can look forward to clean and adequate supply of the vital commodity

with the appointment of retired Gen. Reynaldo Velasco as new administrator of the Metropolitan Waterworks and Sewerage System (MWSS). With his track record as police general and later as town mayor in Pangasinan, Velasco’s term at the helm of the agency could lead to better coordination between the government and Metro Manila’s two water concessionaires: Manila Water Co. (MWC) and Maynilad Water Services Inc. (Maynilad). Velasco has vowed to be “fair and just” to all stakeholders and to achieve five main goals: provide safe, affordable, clean water for a total of 20 million consumers of Metro Manila and surrounding provinces; honor concession agreements with the major water concessionaires and fast-track the setting up of sewage-treatment plants; ensure sustainable and sufficient water supply in the next 25 years; develop strong partnerships with local government units, as well as NGOs to promote better services, water conservation and environmental advocacies; and implement a merit-and-reward system for MWSS personnel. These goals translate to a new meaning of MWSS: “Malinis na Tubig Para sa Lahat”, “Walang Kurapsyon,” “Sapat na Daloy ng Tubig” and “Serbisyong Tunay”. Velasco’s pledge to honor concession agreements could lead to a speedy and positive resolution of the arbitration cases filed by the two concessionaires against the MWSS for the latter’s failure in the previous administration to uphold the terms of their 1997 agreements with the government. Velasco’s emphasis on rewarding merit rather than patronage within the organization will also result in a more professionalized MWSS with zero tolerance for corruption and better partnership between the government and its private water concessionaires. During the previous administration, Maynilad filed two successive arbitration cases before the International Chamber of Commerce (ICC) in Singapore following MWSS’s refusal to abide by the terms of the firm’s original 1997 concession contract with the government. The provision in question involves the rate-rebasing mechanism in the MWC and Maynilad contracts that are supposed to allow these concessionaires to adjust their water rates once every five years, so they could recoup their multibillion-peso investments and generate sufficient revenue to cover their cash-intensive maintenance, expansion and modernization operations. MWC had, likewise, filed an arbitration case against MWSS, also before the ICC in Singapore, on grounds that it stands to lose a projected P79 billion until its concession runs out in 2037, because of MWSS’s similar refusal to honor the rate-rebasing process as stipulated in the 1997 concession agreement. The Supreme Court has already ruled that private operators of government projects have the right to be accorded a “reasonable” rate of return for their investments. Velasco has described the two concessionaires as “partners in the water service”, which MWSS was willing to work with closely in order to build more wastewater-treatment plants to help reduce water pollution and protect water resources. Velasco has also announced plans to pursue big-ticket flagship projects, such as the Laiban, Kaliwa at Kanan (Dam) projects, which will ensure adequate, steady and sustainable water supply for our consumers in Metro Manila and adjoining provinces in the next 25 to 50 years.

E-mail: ernhil@yahoo.com.

Tuesday, April 4, 2017 A11

State funding for political parties Edgardo J. Angara

alta—Malta is an idyllic, ancient and historic island in the Mediterranean. Once host to the Knights Templar, it hosted this week the Congress of the European People’s Party (EPP), the governing political coalition in the European Parliament. The top bureaucrats of the European Union (EU) and its leading center-right political leaders, like Chancellor Angela Merkel, were in full attendance. I was an invited guest to the memorable event, and I also attended the Executive Board meeting of the Centrist Democrat International (CDI) held in Malta, too.

The EPP Congress tackled existentialist concerns, such as Brexit, the future of the EU, the threat of extremist Islamists, the ultra-rightists and Russian aggression against its neighbors. The CDI Executive Board, on the other hand, approved a new Charter strengthening its presence in Europe, Latin America, Asia and Africa, while it denounced Venezuelan President Nicolas Maduro’s closedown of its Congress. All the above events were fully reported by the international media. The Maltese media highlighted, though, the need for state subsidy to political parties in order to prevent not just regulatory

capture but, worse, state capture by the oligarchy. The issue erupted, as a sweetheart deal between the government of Malta and the DB Group caused public uproar. Both signed a €60-million contract (roughly P3.22 billion), selling to the DB Group a highly prized public land occupied by the Institute of Tourism Studies beside the scenic Saint George’s Bay. The DB Group plans to build on the property a €300-million development that includes a 315-room Hard Rock hotel, up to 209 residences and some office spaces. Simon Busuttil, head of the opposition Nationalist Party (PN),

Building trust, not hate Cecilio T. Arillo

database

hen people know each other, cooperation is more likely than conflict, and playing nice can thereby become a winning strategy, an international team of scientists shows in a study relayed to Database through the Potsdam Institute for Climate Impact Research (PIK) in Germany.

The study is based on experiments with a limited number of participants but might have far-reaching implications. Reducing anonymity could help social networks, such as Facebook or Twitter, that suffer from hate and fake news. It might also help in conflicts about environmental resources. “Today it often seems that conflict trumps cooperation, be it on the Internet or in national politics— likewise in evolution, Darwinian selection should result in individuals pursuing their own selfish interest,” says lead-author Zhen Wang from Northwestern Polytechnical University in Xi’an, China.

“Our findings suggest that it is crucial to ask one rather straightforward question: Do the prospective cooperators know each other reasonably well? If they do, they will more likely not try to win at the expense of each other, but together.”

Winners play nice, while punishment causes retaliatory sentiments

The scientists let 154 undergraduate students at Yunnan University interact pairwise in an experiment originally designed by US mathematicians in the 1950s, called the prisoner’s dilemma. This is a setup in which two people don’t know about

criticized the deal, saying the government sold the land at a price way below its value. He then revealed in a press conference that the DB Group demanded a refund for its contributions to his party in light of his criticisms of the deal. The DB Group responded, saying the contributions were “requested” by the PN and not “donated” to the party, and that it is paying the salaries of two PN officials. The controversy unearthed the close ties between Maltese political parties and big business, where the former relies on the latter to operate. Under this system, politicians end up owing their election more to the largesse of their campaign donors, rather than to the state or to the ideals of their party. Politicians—with few exceptions—end up marching to the tune of their contributors and backers. Busuttil and the Maltese opposition now advocate stricter politicalparty finance regulations, also state funding of political parties similar to Germany, the United Kingdom, Canada, Australia, France, the United States, and even our neighbors Singapore, Japan, Korea and Malaysia. The state’s financial support for political parties would act as a counterbalance against private interests aiming to use their contributions as leverage over the recipient-party. This ensures that programs—not

each other’s actions. They pretend to be on trial. If one testifies against the other, he or she benefits. If both testify, both get high fines. If both do not testify, assuming the same behavior of the other one, they both walk free. The authors modified this basic setup to allow mutual punishment when a pair of noncooperators meet. “In our experiments, participants underwent interactions anonymously, and they faced a threefold choice: to cooperate with one another, to defect from one another, or to punish one another,” says coauthor Marko Jusup from Hokkaido University, Japan. “We found that when participants knew each other, this significantly increased the frequency of cooperation. This paid out very well for all—so, winners play nice.” The scientists expected that if one participant punishes the other one’s antisocial behavior, this would instigate more cooperation. “We’ve been surprised to see that this was not the case. The punishment seemed to cause retaliatory sentiments, often resulting in further conflict,” Jusup says.

Findings might apply to conflicts on Facebook but also about environmental resources

AS with any experimental study,

Trump is wimping out on trade Paul Krugman

new york times

uring the campaign, Donald J. Trump talked loudly and often about how he was going to renegotiate the United States’s “horrible trade deals”, bringing back millions of good jobs. So far, however, nothing has happened. Not only is Trumpist trade policy—Trumptrade?—nowhere to be seen in practice; there isn’t even any indication of what it will involve. So on Friday the White House scheduled a ceremony in which Trump would sign two new executive orders on trade. The goal, presumably, was to counteract the growing impression that his bombast on trade was sound and fury signifying nothing. Unfortunately, the executive orders in question were, to use the technical term, nothingburgers. One called for a report on the causes of the trade deficit; wait, they’re just starting to study the issue? The other addressed some minor issues of tariff collection, and its content apparently duplicated an act President

Barack Obama already signed last year. Not surprisingly, reporters at the event questioned the president, not about trade, but about Michael Flynn and the Russia connection. Trump then walked out of the room—without signing the orders. (Vice President Mike Pence gathered them up, and the White House claims that they were signed later.) The fiasco perfectly encapsulated what’s looking more and more like a failed agenda. Business seems to have decided that Trump is a paper tiger on trade: The flow of corporate relocations to Mexico,

which slowed briefly while CEOs tried to curry favor with the new president, has resumed. Trade policy by tweet, it appears, has run its course. Investors seem to have reached the same conclusion: The Mexican peso plunged 16 percent after the election, but since Inauguration Day it has recovered almost all the lost ground. Oh, and last week a draft proposal for revising the North American Free Trade Agreement circulated around Congress; instead of sweeping changes in what candidate Trump called the “worst trade deal” ever signed, the administration appears to be seeking only modest tweaks. This surely isn’t what workingclass Trump supporters thought they were voting for. So why can Trumpist trade policy be summarized—to quote The New York Times’s Binyamin Appelbaum—as “talk loudly and carry a small stick”? Let me give two reasons. First, back when Trump was railing against trade deals, he had no idea what he was talking about. (I know, you’re shocked to hear that.) For example, listening to the Tweeterin-chief, you’d think that Nafta was a big giveaway by the US, which got nothing in return. In fact, Mexico drastically cut its tariffs on goods imported from the

personalities or private interests— become the focus of a political party’s electoral campaigns. Such a system was one of the main features of the Political Party Development Act (PPDA) that I filed as early as 2004. The PPDA, among other provisions, creates a State Subsidy Fund that would be proportionately shared by accredited national parties, and subject to strict regulations. Such fund shall be used exclusively for campaign expenditures and operations of the political party, such as research or training for members. Parties that receive the subsidy would be required to submit regular reports on their expenditures to the Commission on Elections. Unfortunately, the PPDA never passed the legislative mill while I was still serving. Several versions of the measure have already been filed in the 17th Congress and, hopefully, will be tabled for discussion soon. State funding for political parties, as proposed in the PPDA, will help cure the ills of our political party system that is rife with turncoatism and driven by personality and political machinery, instead of ideology and ideas. It also prevents politicians’ capture by oligarchs, reducing the opportunity for corruption and unethical behavior.

E-mail: angara.ed@gmail.com, Facebook and Twitter: @edangara

according to the authors, there is danger in extrapolating the results outside the narrow set of controlled conditions. However, it is reassuring that computer simulations built on a small set of straightforward assumptions successfully reproduced the experimental results. “Since the spirit of cooperation that social cohesion is based upon is crumbling away in some places, be it on Facebook or in societies that are about to be torn apart about issues such as immigration, we sought insight into what enhances cooperation,” says coauthor Jürgen Kurths from PIK, who contributed analyses of the statistical significance of the results. “This might also apply to conflicts about environmental resources. However, we have to further explore the continuum, the many states between complete anonymity and very well knowing the other person. It will be exciting to learn what kind of information, what degree of mutual recognition is needed to promote cooperation,” he pointed out. To reach the writer, e-mail cecilio.arillo@ gmail.com.

US, in return for much smaller cuts on the US side. Or take Trump’s repeated claims that China gains a competitive advantage by manipulating its currency. That was true six years ago, but it’s not true now. These days China is actually intervening to keep its currency up, not down. Talking nonsense about trade didn’t hurt Trump during the campaign. But now he’s finding out that those grossly unfair trade deals he promised to renegotiate aren’t all that unfair, after all, leaving him with no idea what to do next. Which brings me to Trumptrade’s second big obstacle: Whatever you think of past trade agreements, trade is now deeply embedded in the economy. Consider the case of automobiles. At this point it makes little sense to talk about a US auto industry, a Canadian auto industry or a Mexican auto industry. What we have, instead, is a tightly integrated North American industry, in which vehicles and components crisscross the continent, with almost every finished car containing components from all three nations. Does it have to be this way? No. Slap on 30-percent tariffs, and after a few years those national industries would separate again. But the transition would be chaotic and painful.

2nd Front Page BusinessMirror

A12 Tuesday, April 4, 2017

Higher infra spending boosted manufacturing sector in Q1–experts

By Bianca Cuaresma @BcuaresmaBM & Cai U. Ordinario @cuo_bm

he Philippines reported a manufacturing sector pushing still higher in March following months of slack, a development experts rated as the second fastest in the region. On Monday the influential media organization Nikkei and the think tank IHS Markit said the country’s purchasing managers’ index (PMI) accelerated to 53.8 from the 53.6 in February. The PMI measures the health of the manufacturing sector and viewed as a composite whose components inc lude new or ders weighing the most at 30 percent; output, 25 percent; employment, 20 percent; suppliers’ delivery times, 15 percent; and stocks of purchases for the other 10 percent. Readings above 50 signal an improvement in business conditions while readings below 50 show deterioration. The PMI at 53.8 is above the Asean average of 50.9 in during the month, the second highest in the region next only to Vietnam with PMI of 54.6 for the period. “Growth in both output and new orders remained key drivers, with rising client demand prompt i ng f i r m s to ste p up the pace of hiring. Firms also i nc re a s e d i np ut b u y i n g b ut greater production usage led to only a modest build in inventories. Increased demand did not strain supplier capacity,” Nikkei reported. “On the contrary, vendor perfor-

Growth is being driven mostly by robust domestic demand, stemming from buoyant consumers and public infrastructure spending, in particular.”—Aw mance improved, albeit at a slower rate. Meanwhile, further cost increases led to firms raising selling prices by the greatest extent in the series history,” it added. IHS Markit economist Bernard Aw said the March survey pointed to a further strengthening in the continued expansion of the manufacturing sector, which bodes well for growth prospects in the first quarter. “Growth is being driven mostly by robust domestic demand, stem-

ming from buoyant consumers and public infrastructure spending, in particular,” Aw said. “Ex por t grow th remained modest, helped by a stronger US dollar. However, the weaker exchange rate means that prices for imported inputs continued to be more expensive than before. Firms were able to pass on much of the higher costs to customers as demand for Filipino goods remains strong,” he added. Aw also expressed confidence the manufacturing sector will grow stronger in the months ahead, given ample government support. “If recent sectoral improvements continue, especially with increased government spending and resilient private consumption underpinning the economy, we could see stronger growth in the months ahead,” Aw said. In a separate development, the National Economic and Development Authority (Neda) ruled out growth averaging as high as 8 percent under the Philippine Development Plan 2017-2022, unless increased attention and better management is lavished on the country’s natural resources. Socioeconomic Planning Secretary Ernesto M. Pernia said attaining 7-percent to 8-percent growth in the medium term depends in part on the Natural Capital Accounting (NCA) program. The NCA was instituted in the Philippine Development Plan 20172022 and the AmBisyon Natin 2040 highlighting government’s recognition of the importance of sustaining and preserving ecosystems for economic growth. “We want to ensure that our pu rsu it of econom ic g row t h will not compromise our future,” Pernia said. “This is why we [Neda] have been continuously supporting natural capital accounting or valuation to help Filipinos understand the true economic value of these resources and change the way we

regard them.” He also cited environmental costs to economic growth and acknowledged the Philippines has not been very successful in enforcing laws that safeguard the environment. The NCA will held address this since it supports the growth and performance of the economy, strengthens the resiliency of communities from climate change and disasters, and improves the welfare of the poor and marginalized members of society. “While numerous laws and regulations have been passed to protect, conserve and sustain our natural resources, their enforcement have been weak and inadequate,” Pernia said. Pernia made the remarks at the National Conference on NCA with the theme “Accounting Nature: Capitalizing Partnerships for the f Future” last week. The two-day conference served as a platform showcasing work on NCA and exchange information and experiences on various related efforts from the both local and international arena. The event was also a venue for planners, policy-makers, scientists, practitioners and advocates to further present how natural resource accounting and valuation can provide a more holistic view of the country’s economic performance. An estimated number of 200 participants from various agencies and institutions, including t he depar tments of Finance, Budget and Management, and Agriculture, and Climate Change Commission (CCC), legislative offices, academe, civil-society organizations and private sector attended the event. T he con ference w a s organized in collaboration with the World Bank and in coordination with the Philippine Statistics Authority, Department of Environment and Natural Resources, Laguna Lake Development Authority, and Palawan Council for Sustainable Development.

www.businessmirror.com.ph

VILLAR THUMBS DOWN AMENDMENT OF LAW TO SCRAP QR ON RICE By Jasper Emmanuel Y. Arcalas

@jearcalas

he chairman of the Senate Committee on Food and Agriculture is not keen on amending a law that would pave the way for the scrapping of the quantitative restriction (QR) on rice by July. Senator Cynthia A. Villar said she will not support any measure that seeks to amend Republic Act (RA) 8178, or the Agricultural Tariffication Act, which allowed caps on rice imports. “I will not support any bill [amending RA 8178]. How can you support such bill if your farmers are not competitive?” Villar told the BusinessMirror on the sidelines of the relaunching of Cedarhills Garden Center over the weekend. At present, a bill that would amend RA 8178 has yet to be filed in the Senate. Villar also said she agrees with the Department of Agriculture (DA), which pushed for the extension of the nontariff barrier for two more years to make local rice farmers competitive against their counterparts in Southeast Asian countries. “Of course, I am afraid for our Filipino rice farmers because we are not really competitive. So we should work to continue that [QR on rice] until we become competitive,” she added. Earlier, Agriculture Secretary Emmanuel F. Piñol said the House of Representatives is poised to block any amendments to RA 8178 as this was promised to him by Speaker Pantaleon D. Alvarez. “The last time I spoke with the Speaker about the lifting of the QR, the position of Congress is that they don’t want to lift it. Thus, I think, Congress will not move to amend Republic Act [RA] 8178,” Piñol said. There are already bills filed in the House of Representatives seeking the amendment of RA 8178 in preparation for the lifting of the QR on rice by end-June. Earlier, the DA chief made an assurance the Philippines will not be flooded with cheap rice imports after the QR on rice expires on June 30. The QR is a nontariff barrier that the WTO has allowed the Philippines to enjoy for more than two decades. Piñol said RA 8178 would serve as the “saving grace” and “refuge” of Filipino farmers. Under RA 8178, rice is the only farm commodity protected by the QR. Sans an amendment, Piñol said the Philippines should not be forced to allow the entry of more rice imports. “There cannot be an unregulated entry of imported rice to the country until such time that the law is amended.” However, the amendment of RA 8178 is included in the priority legislative agenda of the Duterte administration as indicated in its economic blueprint dubbed as the Philippine Development Plan (PDP 2017-2022). Under PDP 2017-2022, the Duterte administration vowed to allocate all the tariffs collected from rice imports for programs aimed at helping farmers cut production cost. “Replace quantitative restrictions on rice with tariffs. The tariff proceeds from rice imports will be plowed back to the rice sector,” the PDP read. While the PDP is cognizant of the adverse impact of the scrapping of the rice QR on small farmers, the government said the tariff collected from imports will be used to help them recoup their losses. The Duterte administration said it has decided to allow the QR on rice to expire because of its potential impact on rice prices nationwide. Rice, the government noted, accounts for 30.6 percent of the total food expenditure of the poorest 20 percent of households based on the 2012 Family Income and Expenditure Survey. “It can help lower the price of rice, and this will benefit the general public, including farmers who are net consumers of rice,” the PDP read. Under the QR scheme, rice imports within the minimum access volume (MAV) of 805,200 metric tons per year are slapped with a lower tariff of 40 percent, while imports in excess of the MAV are slapped a higher tariff of 50 percent.

Metro Pacific to spend ₧153B on expressways By Lorenz S. Marasigan

@lorenzmarasigan

etro Pacific Tollways Corp. on Monday bared plans to spend P153 billion throughout the term of President Duterte to develop new expressways and improve existing ones in line with the government’s infrastructure development program to support initiatives to decongest traffic in the metropolis. Rodrigo E. Franco, the company president, said there are several projects in the pipeline, which include the P23.3-billion Connector Road, the P55.9-billion CaviteLaguna Expressway (Calax), the P11.7-billion Cavitex C-5 South Link and the P27.9-billion CebuCordova Link Expressway. The company’s tollways—the North Luzon Expressway (Nlex), the Subic-Clark Tarlac Expressway and the Manila-Cavite Toll Expressway—are also up for widening and extension, he said. Included in the pipeline are the

P2.5-billion widening program for Segment 2 and Segment 3 of Nlex, the P10.5-billion construction of the Harbor Link, the P6-billion extension of the Nlex to R10 road in Manila and the P8.9-billion project to extend the Nlex all the way to Luzon Avenue in Quezon City. “With these projects in the pipeline, we will see a great improvement in traffic decongestion in Metro Manila as we embark on more infrastructure projects to connect the North and the South,” Franco said. Funding for these projects will be a mix of equity and loans. Franco said the company is already in talks with several banks for the financing of big-ticket deals, such as the Calax and the Cebu-Cordova Link Expressway. His group may borrow as much as P20 billion for Calax, and P17 billion for the toll-bridge initiative. These were announced during the launch of the company’s motorist assistance program for the Holy Week. See “Metro Pacific,” A2

SEARCH FOR HOMETOWN HEROES Signatories affix their signature to the agreement to confirm their support for the “National Search for Hometown Heroes”, a project of the Benita and Catalina Yap Foundation (BCYF) held on Monday at Club Filipino in Greenhills, San Juan City. NONOY LACZA