media partner of the year
United nations
2015 environmental Media Award leadership award 2008
BusinessMirror
www.businessmirror.com.ph
A broader look at today’s business n Monday, April 9, 2018 Vol. 13 No. 177
Naia Consortium takes first crack at airport deal
T
By Lorenz S. Marasigan
he Department of Transportation (DOTr) will prioritize the evaluation of the P350-billion unsolicited proposal of Naia Consortium for the redevelopment and expansion of the Ninoy Aquino International Airport (Naia), as it strictly follows the rules under the build-operate-transfer (BOT) law.
Transportation Director Goddess Hope O. Libiran told the BusinessMirror that the agency has yet to officially open the $3-billion unsolicited proposal of Megawide Construction Corp. and its Indian partner GMR Infrastructure Ltd.,
business news source of the year
P25.00 nationwide | 5 sections 28 pages | 7 days a week
What now, losing original proponent? Alberto C. Agra
@lorenzmarasigan
LIBIRAN: “Only when Naia Consortium’s proposal is rejected can we open and review Megawide’s proposal.”
2016 ejap journalism awards
ead
L AlbertoPPP C. Agra
W
hile recent history has shown that none of the original proponents (OPs) failed in their attempt to secure the public-private partnership (PPP) award, private sector proponents (PSPs) who intend to submit unsolicited proposals to government implementing agencies (IAs) must know the reasons for and effects of losing. By the way, records will also disclose that almost all UPs had no challengers. Continued on A11
Continued on A2
MRTDEVCO LOSES RIGHTS DOT enlists PwC to arrest flagging tourism investments TO MRT 3 ADS, LEASING By Ma. Stella F. Arnaldo
By Joel R. San Juan
@akosistellaBM Special to the BusinessMirror
@jrsanjuan1573
T
HE Department of Tourism (DOT) has tapped auditing firm PricewaterhouseCoopers Philippines (PwC) as its “Knowledge Partner,” in a bid to boost tourism investments in the country. The memorandum of understanding (MOU) signed recently by both parties seeks to develop projects promoting tourism toward enhancing the Philippines as a premier tourist destination, a DOT news statement said. “Part of our mandate is to boost investments in the country and, through this partnership, we are able to create a platform where people can take a look at investment prospects in tourism. It helps also that we partnered with an independent and credible partner,” said Alma Rita D. Jimenez, undersecretary for Tourism Regulation, Coordination and Resource Generation. Under the National Tourism Development Plan of 2016-2022, Continued on A12
T
TOURISM Undersecretary Alma Rita D. Jimenez and PwC Chairman Alexander Cabrera sign a memorandum of understanding to help attract more investments in the tourism industry. They are flanked by PwC Partner Geraldine Esguerra-Longa (left) and Department of Tourism Director Danilo Intong. PHOTO COURTESY OF D.O.T.
PESO exchange rates n US 52.1280
HE MRT Development Corp. (MRTDevCo) is now barred from exercising its advertising and commercial-leasing rights over the Metro Rail Transit (MRT) Line 3 system pending the result of arbitration proceedings involving its development-rights payment (DRP) obligations to the government amounting to P2.3 billion. In a 23-page ruling penned by Associate Justice Pablito Perez, the Court of Appeals’s (CA) Eleventh Division lifted the writ of preliminary injunction issued by the Regional Trial Court (RTC) in Pasig City on July 18, 2016, thus compelling the Department of Transportation (DOTr), thenDepartment of Transportation and Communications (DOTC), to issue the necessary access or work permits to the MRTDevCo to allow the company to fully exercise its rights over MRT 3. MRTDevCo is a unit of MRT 3 private owner MRT Holdings. The RTC in Pasig City issued the writ of preliminary mandatory injunction upon MRTDevCo’s
₧2.3 billion
The outstanding developmentrights payment obligations of MRT Development Corp., according to the transportation department posting of the P130-million injunction bond. The DOTr earlier claimed that from 2001 to 2004, the MRTDevCo paid according to the agreed DRP schedule under their build-leasetransfer (BLT) agreement covering the construction and operation of MRT 3. However, on July 21, 2004, the MRTDevCo ceased paying the DRPs despite repeated demands by the then-DOTC. In the early part of 2013, the transportation department stopped issuing access or work permits to the MRTDevCo, its advertisers and lessees, barring their entry to the MRT 3 system. On May 7, 2015, the Commission on Audit issued to the DOTr an Audit Observation Memorandum noting the unpaid amount of P981,354,501, representing the DRPs from the Continued on A12
n japan 0.4855 n UK 73.0105 n HK 6.6416 n CHINA 8.2927 n singapore 39.6109 n australia 40.0552 n EU 63.8151 n SAUDI arabia 13.9005
Source: BSP (6 April 2018 )
A2 Monday, April 9, 2018
BMReports BusinessMirror
www.businessmirror.com.ph
Naia Consortium takes first crack at airport deal Continued from A1
as the department has yet to finish the evaluation of Naia Consortium’s offer. Section 10 of the BOT law spells out the method by which an implementing agency—in this case the transportation department— should follow when there are two or more proposals for the same or similar project. “The proposal from Megawide has not been opened yet due to ‘first-in-time’ submission of complete documentary requirements mandated by the BOT law,” Libiran said. “Naia Consortium first submitted complete documents and [the proposal is] now undergoing review by the DOTr.” This view was shared by Naia Consortium Spokesman Jose Emmanuel P. Reverente, who cited the specific rule on the treatment of unsolicited proposal of the similar project. “Note the first-in-time concept. Two proposals are not to be evaluated simultaneously,” he said in a text message. Naia Consoritum submitted its proposal to the transportation department on February 12. Megawide’s proposal came second on March 1. This, however, does not mean
Clark-Naia. . . Continued from A12
Rebuilding Clark airport, an urgent priority Answering questions at the Cami open forum, Harrison said that Megawide-GMR’s winning of the Engineering Procurement Construction contract for Clark I nte r n at ion a l A i r p or t (C I A ) has paved the way for their upcoming bid for operation and management contract for the same facility.
that the group will be awarded the original proponent status—at least not yet. It may still be rejected on several grounds, including technical unviability, and lack of new technology, among others. If the first proposal gets rejected, then the implementing agency will have the authority to open and review the second offer submitted to it. “Only when Naia Consortium’s proposal is rejected can we open and review Megawide’s proposal,” she said.
Megawide respects process
For his part, Louie B. Ferrer, an authorized representative of Megawide, said the group will honor the transportation department on whatever track it will take in evaluating the proposals. “Megawide-GMR respects and will adhere to the rules mandated by the BOT law on the evaluation of unsolicited proposals,” he said. Due to their nature, unsolicited proposals are required under law to go through several approvals processes, including a review by the implementing agency and an evaluation by the several bodies of the National Economic and Development Authority (Neda). “The development of the CIA is an urgent one, as it is integral to the government’s multi-airport strategy, and vital to decongesting the country’s capital airport,” he explained. Harrison said the consortium’s proposal for Naia, under a buildoperate-transfer scheme submitted on March 1 to the DoTr, aims to boost the capacity and efficiency of the gateway by addressing the airport’s main problem of limited airfield capacity. T he consor t iu m, l i kew ise, plans to double passenger-handling capacity to 60 million pas-
Under current rules, unsolicited proposals are also required to undergo a Swiss challenge, which essentially allows other groups to outbid the original proponent of the project. The original proponent, however, has the option to submit a counteroffer to win the challenge. The winner of the challenge will be determined after the Neda Board, currently chaired by President Duterte, has evaluated the challenger’s offer, and the original proponent’s counteroffer. Hence, the process could go for as quick as six months to over a year, and as long as almost a decade, as in previous cases. Naia Consortium’s P350-billion proposal involves expanding and interconnecting the existing terminals of the Naia, upgrading airside facilities, and the development of commercial facilities. Divided into two phases, the group’s proposal aims to increase the capacity of the Naia to about 100 million passengers per year. It also plans to construct a people mover that will link Naia’s terminals to existing transport systems in Metro Manila. Actual work will take 24 more months for the first wave of immediate expansion. Further
expansions are planned to meet projec ted pa ssenger dem a nd moving forward. The offer carries a concession period of 35 years. On the other hand, Megawide’s offer involves a more affordable $3-billion price tag, with a shorter concession period of 18 years. The multibillion-dollar proposal is divided into several phases, of which the first six years of the operations would focus on the expansion of the existing terminals, the optimization of the current runways and the capacity expansion of the whole airport complex. Immediately upon takeover, the group proposes to construct fulllength parallel taxiways for both runways, an additional rapid-exit taxiway for the primary runway, the extension of a second runway and the provision of maximum aircraft stands. These solutions will increase airfield capacity to 950 to 1000 aircraft movements per day, a 35-percent increase from the current 730 aircraft movements daily. Within the first t wo years, t h e g r o u p w i l l r e h a b i l it a t e and ex pand the existing termina ls, which w i l l roughly double the space and result in
sengers per annum in four years and to 72 million in six years upon start of construction. He explained the reason behind the consortium’s shorter concession term of 18 years. “The term will balance two objectives: providing flexibility and time for government to refine its multi-airport system strategy while addressing the Naia’s immediate problems,” he said.
US-based expert with decades of experience in maximizing aircraft handling capacities at cross-runway airports, which are common in the United States and similar to the Naia. He, likewise, stressed that the Megawide-GMR proposal does not entail any subsidy, equity or guarantee from the government, in full compliance with the BOT law. “Valued at P150 billion, our project is structured in such a way that all assets will be handed over to the government, free of cost, at the end of the concession term,” he said.
No government subsidy, equity, guarantee
He added that the consortium is collaborating with Mitre, a
over 700,000 square meters of ter mina l area. By that time, the airport will be able to handle as much as 72 million passengers annually, a huge jump from the current 30-million annual passenger capacity.
‘Best proposal’
Ferrer said his group submitted the better and more viable proposal, as rival Naia Consortium is “open to tweaking” its proposal. “We firmly believe that we have submitted a stronger and more viable proposal. What we offer is a carefully studied solution to Naia, which includes an 18-year concession without the need for a third runway,” he said. Ferrer added: “Our fellow proponent expressing publicly that they are open to ‘tweaking’ their proposal with terms similar to ours validates the viability of our own submission.” A few weeks ago, Reverente announced that the group is open to tweaking its proposal, including the concession period that it earlier proposed, just to win the contract. This was then questioned by Ferrer, saying that unsolicited proposals, once submitted and accepted, may no longer be amended. Reverente, however, explained
Regulators. . . Continued from A12
Uber’s franchise lapses
Another legal tussle that could further entwine the case is Uber’s franchise. Lizada said the accreditation of Uber as a transportation network company (TNC) has lapsed. Hence, operating Uber in the Philippines might be illegal. “Uber’s accreditation has already expired and the LTFRB has yet to act on it. A legal implication that should be addressed,” she said. However, PCC Commissioner Stella
that the tweaking happens during the negotiations phase of the proposal’s approval.
‘Best deal’
Whatever happens, Ferrer said the group hopes that the government approves the best deal offered, as this will help drive growth in the country’s GDP and provide ease of transport for the common Filipino. “Overall, the best proposal will assure that the government gets the best deal, and will yield the utmost benefit for the people and the economy,” he said. Both groups found the need for the expansion and modernization of the Naia as “urgent,” noting recent statistics released by the Manila International Airport Authority. The Naia has reached its peak, handling 42 million passengers last year, way above its maximum capacity of 35 million passengers annually. This year the throughput is expected at 44 million. Avelino L. Zapanta, a wellknown aviation expert in the Philippines, however, finds the proposals as either not viable or lacking (See “Two proposals for Naia upgrade fail to impress Filipino aviation expert,” in the BusinessMirror, March 27, 2018). A. Quimbo noted that this should not be an issue, given that both companies still have provisional authorities. “Per the LTFRB, both Grab and Uber have provisional authorizations, despite the expiry of their accreditation,” she told the BusinessM irror. To this, Lizada said her group may process the continuity of Uber’s transportation network vehicle services (TNVS), but the accreditation of Uber’s TNC franchise will still depend on whether Uber decides to renew it. “What the LTFRB can do, though, is to ensure continuity of the service by processing the Uber TNVS who would like to continue to do ride sharing, because our paramount consideration is the riding public,” she said. Already, Uber drivers have started migrating to the Grab platform, as they would like a continuity of their businesses in the ride-hailing space.
Not a blame game
Lizada, a lawyer, likewise, gave emphasis on the possible case of “involuntary servitude,” should Uber be forced to do business in the Philippines despite its “corporate decision” to put its business elsewhere. “If PCC directs Uber to continue its operations, another issue here will be: Does it not constitute involuntary servitude on the part of Uber when it has already decided to pull out its operations in the Philippines,” she said. But for Quimbo, what is imperative is for the PCC to conduct a review of the deal, which potentially gives Grab a “virtual monopoly” in the local ridehailing market. “The LTFRB has a different mandate. They could have a different take on the matter. The PCC is not blaming anyone for Uber’s exit. Entities should be able to make business decisions on their own, keeping in mind that if such decisions can harm competition in the market, then PCC is duty bound to step in,” she said. Grab and Uber were both mum last Sunday, despite repeated queries from the press. The PCC is mandated to protect competition in the market and prohibit anticompetitive conducts, including mergers and acquisitions of businesses and companies that may substantially prevent, restrict or lessen competition. A merger or acquisition review using competition lens will determine whether the merger of two players in the ride-sharing market will substantially lessen competition. The PCC may prohibit any merger should anticompetitive concerns arise during the transaction review.
www.businessmirror.com.ph
The Nation BusinessMirror
The Special Operations Command is back T
he military has unified all of its elite special units under one command by reactivating the Armed Forces of the Philippines Special Operations Command (AFP Socom), a strategy aimed at ensuring the cohesiveness of its specialized units in any given operation. Armed Forces Chief of Staff Gen. Rey Leonardo Guerrero reactivated the AFP Socom last Friday at Fort Magsaysay in Nueva Ecija, which, in effect, deactivated the Army’s Special Operations Command (Socom). Military Public Affairs Office Chief Lt. Col. Emmanuel Garcia said that the creation of the AFP Socom brought under one roof and under one command all of the special operations units of the military’s major armed services. Formerly, the Socom, which is then under the Army, counted the Special Forces Regiment, the Scout Ranger Regiment and the Light Reaction Regiment as its unit-members. The Light Reaction Regiment, the premier counterterrorism force of the military, had its origin from the Light Reaction Company, which is trained by the United States. The three specialized units have been absorbed by the AFP Socom, which even included the Special Operations Wing of the Air Force and the Naval Special Operations Group of the Navy. Guerrero said the activation of the AFP Socom was a result of the lessons
the Armed Forces learned from the “Zamboanga City attack” in 2013 and the “Marawi siege in 2017.” The Zamboanga attack was carried out by members of the Moro National Liberation Front, while the attack of Marawi City was perpetrated by the Islamic State and the local terrorist Maute Group. “I have personally seen the need for a joint Socom, having been a brigade, division and area commander. In the Eastern Mindanao Command, I saw the need for a single unit that would oversee the proper employment of the different major service special operations forces deployed in the area,” Guerrero said. “I expect that all of the gaps and challenges we encountered in joint operations involving our SOFs will be addressed with our activation of the AFP Socom. This organizational improvements will ensure that the AFP remains responsive and adaptive to current and emerging challenges in the global security environment,” he added. The AFP Socom is headed by Maj. Gen. Ronnie Evangelista, who had also commanded the defunct Socom. “We are all very thankful because our dream of being under one umbrella has been realized. This has been our dream because we know the intricacies and peculiarities of special operations,” Evangelista said. Rene Acosta
Editor: Vittorio V. Vitug • Monday, April 9, 2018 A3
Duterte orders intel units to end exclusivity of info By Manuel T. Cayon
D
@awimailbox Mindanao Bureau Chief
AVAO CITY—President Duterte told military intelligence officers to work closely with other intelligence agencies and other stakeholders to ensure better collection and processing of intelligence information in the face of heightening terror threats. Duterte issued the call in his speech before the Intelligence Service of the Armed Forces of the Philippines (Isafp) First Quarter 2018 Command Conference and Sergeants Major Forum at the Grand Regal Hotel here last Saturday. “I could not stress enough the importance of timely, accurate and useful intelligence in securing the country and protecting our people from all enemies of the state,” he said. “May you further improve your intelligence and counterintelligence operations, and continue to
work closely with other intelligence units and concerned stakeholders in the crucial tasks of gathering and processing intelligence information,” Duterte said. The directive addresses criticism about exclusivity of intelligence information gathered by the different intelligence services and units of the military, the police and other agencies, which were often not shared with each other. He lauded the intelligence service and senior enlisted leaders, though, “for their efforts in defending and protecting national
security,” and commended them for their achievements in fighting terrorism and other enemies of the state. “The government credits the successful apprehension and neutralization of several high-value communist and Islamic terrorists to your effective intelligence operations,” he said. He added the nation’s continuing struggle for a peaceful, stable and secure Philippines “rests greatly on the two pillars of the AFP gathered here today: the Isafp, which heads the intelligence efforts of the AFP, and the Sergeant Majors, which collectively provide steady operational leadership to the entire noncommissioned corps
of the AFP.” His directive also to further improve intelligence operations came as he repeatedly warned about the increasing threat of terrorism, which he said on several occasions as becoming the major threat to the country’s security. “As we consolidate our gains in this time of rapid progress and growing strength, I count on the Isafp and our Sergeant Majors to propel our country toward real and lasting peace,” he added. “With you by our side, our dream of a truly strong Philippines will be achieved in the next few years.” Duterte assured them of the administration’s full support to the military and its modernization.
May you further improve your intelligence and counterintelligence operations, and continue to work closely with other intelligence units and concerned stakeholders in the crucial tasks of gathering and processing intelligence information.”—Duterte
Economy BusinessMirror
A4 Monday, April 9, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon
PHL industries get P56.6-billion subsidies in 2015 By Cai U. Ordinario
T
@cuo_bm
he subsidies extended by Filipino taxpayers to various industries increased 4 4.3 percent in 2015, according to the Philippine Statistics Author it y (PSA). The PSA said total subsidies shouldered by Filipinos increased to P56.6 billion in 2015, from P39.2 billion in 2014, based on preliminary data of the 2015 Annual Survey of Philippine Business and Industry (ASPBI). “ Su b s id ies a re a l l s p e c i a l grants in the form of financial assistance or tax exemption or tax privilege given by the government to aid and develop an industry,” the PSA said. PSA data showed Financial and Insurance Activities received most of the subsidies in 2015 at P24.1 billion, or 42.6 percent of the total. Electricity, gas, steam and air- conditioning supply received the second-biggest amount of subsidy at P10.9 billion, or 19.2 percent, while transportation and storage came in third with P9.3 billion, or 16.4 percent of the total. The PSA said other sectors that received more than a billion worth of subsidies were wholesale and retail trade, repair of motor vehicles and motorcycles with P3.3 billion; agriculture, forestry and fishing, P3.1 billion; manufacturing, P1.9 billion; education, P1.4 billion; and administrative and support service activities, P1.2 billion. At the reg iona l level, PSA d at a showed Davao received the highest amount of subsidy in 2015 at P22.5 billion or 39.7 percent of the total. Metro Manila or the National Capital Region (NCR), which was the highest recipient in 2014 only placed second in 2015 with P20.1 billion or 35.6 percent, while Caraga was third with P2.7 billion or 4.8 of the total. Other regions that received more than a billion worth of subsidies from the government were Western Visayas with P1.4 billion; Central Visayas, P1.3 billion; Central Luzon, P1.1 billion; and Bicol region at P1.1 billion. The preliminary data from the ASPBI showed there was a decline in the number of establishments with total employment of 20 and over to 34,740 in 2015, from 35,009 in 2014. Of the 18 sectors, almost 1 in every 4 establishments was engaged in wholesale and retail trade; repair of motor vehicles and motorcycles with 8,332 or 24 percent of the total. Manufacturing with 6,347 accounted for 18.3 percent of the total number of establishments in 2015. This was followed by accommodation and food-service activities, and education with 5,492, or 15.8 percent, and 3,568, or 10.3 percent, respectively. These top 4 sectors comprised 68.3 percent of the total establishments in 2015. On the other hand, mining and quarrying, with 134 establishments, numbered the least, with 0.4-percent share to the total count. Across regions, 40.9 percent of establishments in 2015 were in the NCR, with a total of 14,207 establishments. Calabarzon, with 4,866 establishments, or 14.0-percent share, ranked second. Central Luzon with 3,242 establishments, or 9.3 percent, and Central Visayas with 2,626 establishments, or 7.6 percent, placed third and fourth, respectively. The Autonomous Region in Muslim Mindanao recorded the least count numbering to only 103 establishments, or 0.3-percent share.
www.businessmirror.com.ph
Govt reforestation program to focus on rehab of 143 critical watersheds
T
By Jonathan L. Mayuga
@jonlmayuga
he Duterte administration’s reforestation program will focus on the rehabilitation of the country’s 143 critical watersheds, an official of the Department of Environment and Natural Resources (DENR) said. Director Nonito M. Tamayo of the DENR’s Forest Management Bureau (FMB) told the BusinessMirror that DENR regional offices have been directed to start conducting sites assessment in critical watersheds within their respective jurisdictions in preparation for next year’s treeplanting activities under Executive Order (EO) 193, or the Expanded National Greening Program (ENGP). The decision, he said, is in light of the reduced budget allocation for the ENGP that started this year. “This year, it’s business as usual. But next year, our focus will be on our critical watersheds. We have a total of 143 critical watersheds in the Philippines,” said Tamayo, also the national coordinator of the ENGP.
DPWH, NCIP craft guidelines for RROW validation involving ancestral domains
T
he Department of Public Works and Highways (DPWH) will be assisted by the National Commission on Indigenous People (NCIP) in the formulation of an updated guidelines on road right-of-way (RROW) claims specifically involving ancestral domains. Public Works Secretary Mark A. Villar and NCIP Chairman Atty. Leonor T. Oralde-Quintayo signed last Thursday the memorandumofagreement(MOA)forthis partnership that will further expedite the implementation of infrastructure projects. “As much as we want to facilitate swift implementationofvitalinfrastructureprojects across the country, it is in our utmost priority to protect the rights and welfare of indigenous peoples [IPs] or Indigenous cultural communities [ICCs],” Villar said. “With this undertaking, we hope to craft a streamlined guidelines on RROW acquisition based on advice and expertise ofNCIPand,hopefully, implement projects that will only provide positive impact on IPs’ rights on land, territory, resources, livelihood and culture,” Villar added. Under the MOA, a DPWH-NCIP technical working group (TWG) will be formed to inform the NCIP of the processes in implementation of government projects like national roads, bridges and other infrastructure, as well as the processes and documentary requirements for acquiring right-of-way for these projects. The DPWH-NCIP TWG shall formulate the guidelines, procedures and streamlined documentary requirements in the processing of claims for just compensation of IPs/ICCs properties affected by DPWH projects. To ensure authenticity and legitimacy of documentary requirements submitted by IPs/ICCs, the DPWH shall consult with the NCIP, especially on claims without NCIP accreditation and certification. NCIP, on the other hand, will apprise the DPWH-NCIP TWG in terms of the processes of accrediting IPs/ICCs, filing ancestral domain claims and ancestral domain titles, as well as provide pertinent information relating to the proposed project area. The commission shall, likewise, prioritize the issuance of certification precondition of national government projects and assist in determining conflicting claims over project-affected ancestral lands. The agreement shall be effective for a period of two years and subject to renewal as may be necessary and upon agreement by the both the DPWH and NCIP.
Tree-planting activities this year targets to cover only 125,000 hectares. The original target was to cover 229,000 hectares, but because of the P2-billion budget cut in the 2018 budget of the DENR, the ENGP target was readjusted. The official said the decision also came after consultation with the National Irrigation Administration, which underscored the need to prioritize the rehabilitation of surrounding forests to protect and conserve the country’s freshwater supply. Aside from water for domestic consumption, these critical watersheds supply irrigation facilities all over the country, boosting agricultural production, particularly in rice-producing provinces. He said the DENR will designate
Boy scouts from Moonwalk National High School in Parañaque City look after recently planted mangrove saplings at the Las Piñas-Parañaque Critical Habitat and Ecotourism Area on March 3. Photo courtesy of DENR Facebook page.
ENGP project managers per site to ensure proper implementation of the program. Ideally, there will be 143 project managers per critical watershed, he said. “We will designate project managers. And they will be stationed on-site,” he added. According to Tamayo, the DENR regional offices will also determine priority areas per site, what species will be planted and which area will be reforested.
He also said that Ecosystems Research Development Bureau (ERDB) will be conducting soil analysis, to ensure science-based intervention in the greening program. “We will issue communication letters asking the regions to get soil samples for analysis. It will be ERDB that will conduct the soil analysis,” he said. Depending on the budget, Tamayo added that the target areas and number and species to be planted will be adjusted.
“Depending on our available budget, we may have to shortlist and identify priority areas,” he said. Outside critical watersheds, treeplanting activities will continue but the DENR may have to rely on DENR partners’ help, particularly agricultural companies, he said. Tamayo added the DENR will continue to encourage private-sector investment for the establishment of industrial or agroforestry plantations in various parts of the country to expand the country’s forest cover. “That is precisely the reason we are now conducting a comprehensive review of our Integrated Forest Management Agreements [Ifma]. To enhance the program and tap the private sector,” he said, referring to the ongoing nationwide audit of 89 Ifmas. Initial reports reaching the DENR-FMB revealed that DENR contractors have developed more than 50 percent of Ifmas.These Ifma holders that failed to establish tree plantations may eventually lose their concession areas as the DENR is planning to enroll idle Ifma areas under the CommunityBased Forest Management program or transfer right to develop the Ifma areas to other agricultural companies that are willing and able to invest in tree-plantation endeavors.
Game development—very much part of Creative Philippines
V
ideo-game development is the process of creating a video game. The effort is undertaken by a game developer, which may range from a single person to an international team dispersed across the globe. Traditional commercial PC and console games are normally funded by a publisher, and can take several years to reach completion. Indie games can take less time and can be produced at a lower cost by individuals and smaller developers. The independent game industry has seen a substantial rise in recent years with the growth of new online distribution systems, such as Steam and Uplay, as well as the mobile game market, such as for Android and iOS devices. Mainstream PC and console games are generally developed in phases. First, in preproduction, pitches, prototypes and game design documents are written. If the idea is approved and the developer receives funding, a full-scale development begins. This usually involves a team of 20 to 100 individuals with various responsibilities, including designers, artists, programmers and testers. Development teamDevelopers can range in size from small groups making casual games to housing hundreds of employees and producing several large titles. Team size can vary from 20 to 100 or more members, depending on the game’s scope. The most represented are artists, followed by programmers, then designers, and finally, audio specialists, with two to three producers in management. These positions are employed fulltime. Other positions, such as testers, may be employed only part-time: Designer—A game designer is a person who designs gameplay, conceiving and designing the rules and structure of a game. One of the roles of a designer is being a writer, often employed part-time to conceive game’s narrative, dialogue, commentary, cutscene narrative, journals, video game packaging content, hint system, etc. Artist—A game artist is a visual artist who creates video game art. The art production is usually overseen by an art director or art lead, making sure their vision is followed. The art director manages the art team, scheduling and coordinating within the development team. Programmer—A game pro-
Game development in PHL
creative philippines By Henry Schumacher grammer is a software engineer who primarily develops video games or related software (such as gamedevelopment tools). The game’s codebase development is handled by programmers. There are usually one to several lead programmers, who implement the game’s starting codebase and overview future development and programmer allocation on individual modules. Level designer—A level designer is a person who creates levels, challenges or missions for computer and/or video games using a specific set of programs. These programs may be commonly available commercial 3D or 2D design programs, or specially designed and tailored level editors made for a specific game. Sound engineer—Sound engineers are technical professionals responsible for sound effects and sound positioning. They sometimes oversee voice acting and other sound asset creation. Composers who create a game’s musical score also comprise a game’s sound team, though often this work is outsourced. Tester—The quality assurance is carried out by game testers. A game tester analyzes video games to document software defects as part of a quality control. Testing is a highly technical field requiring computing expertise and analytic competence. Outsourcing—Several development disciplines, such as audio, dialogue, or motion capture, occur for relatively short periods of time. Efficient employment of these roles requires either large development house with multiple simultaneous title production or outsourcing from third-party vendors. Employing personnel for these tasks fulltime is expensive, so a majority of developers outsource a portion of the work.
Game development existed in the Philippines as early as 1992, with the entry of console and arcade game content development for Japanese publishers such as Sega. Several Philippine-based developers were established at this time, including Micronet Software Manila and Japan Media ProgrammingCebu. Micronet Software Manila was established as a subsidiary of Japan-based Micronet Co. Ltd. to produce exclusive game content for various console platforms such as the Genesis, Sega CD, Game Gear, Super Nintendo and PC Engine. 1 Japan Media ProgrammingCebu (JAMP-Cebu) was set up by a Japanese businessman in 1997 to produce games for the merchandising company Sanrio of Japan. Since most of the content developed by these companies was for the exclusive use of their Japanbased holding company, much of their achievements had not been heard of in mainstream media. In a way, these companies pioneered the concept of offshore outsourcing in game development. In mid-1997, however, a small company called Id Software launched a game called Quake into the Windows platform. Id Software was an independent developer and unlike previous games, Quake was developed, published and marketed by the same small company. By 1999 Id Software had demonstrated that small independent developers can produce, promote and market their own products to the global market with very little advertising and promotional budget.
The emergence of local start-ups The success of Id Software created a widespread emergence of independent developers in the succeeding years, such as Bioware (published by Black Isle Publishing, developers of the popular Baldur’s Gate and Neverwinter Nights games), Blizzard (developer of Starcraft, Warcraft and Diablo), Valve Software (developer of the widely popular Half-Life games) and Digital Extremes (developer of the Unreal games, which was published by GT Interactive). By 2000, the success of these start-ups had inspired other
independent developers, including in the Philippines. By 2007 the major game development companies who were also part of International Game Developers Association established the Game Developers Association of the Philippines (GDAP) in order to further expand the global exposure of local game developers and improve their promotional capabilities. The intent was to consolidate the efforts of individual companies in promoting the capabilities of Philippine developers toward servicing the requirements of international publishers such as Electronic Arts. GDAP’s founding members included Anino Entertainment, Anino Mobile, Flipside Games, Glyph Studios, Matahari Studios, PixelStream, Skyrocket Interactive (now defunct—it’s founder, James Lo, launched a new company named Indigo Entertainment, which eventually joined GDAP) and Secret Six. The successful promotion of the local game development sector via GDAP’s participation in the September 2007 Game Conventions Asia in Singapore confirmed the viability of sustaining and expanding the collaborative environment of the association. This resulted in GDAP’s commitment to attract other game developers to join the association and to continue the organization’s medium-term development plan. GDAP was also successful in obtaining more than $0.9 million in contract proposals from the same event, further indicating the viability of GDAP as a legitimate industry association. Where does the local game development industry go from here? The global market of game development was valued at $45 billion in 2011, at that time, the local market share was about 0.03 percent. GDAP envisions to—eventually—achieve a 1-percent global market share. That would translate into a multibillion-dollar business in the Philippines. It’s high time to take this industry and its potential in terms of employment and contribution to the Creative Philippines’s economy seriously. Comments are welcome—contact me at Schumacher@eitsc.com.
www.businessmirror.com.ph
Banking&Finance BusinessMirror
China’s foreign reserves rise on yuan gains, capital curbs
C
hina’s foreign-currency holdings resumed gains last month as the government kept capital curbs in place and the yuan capped its best quarter in a decade.
Reserves rose $8.34 billion to $3.143 trillion in March from the previous month, the People’s Bank of China said last Sunday. That was
Debt payments rose nearly 20 percent in January By Rea Cu
@ReaCuBM
T
he national government reported debt payments amounting to P83.806 billion in January this year. Based on the latest data from the Bureau of the Treasury (BTr), paying down core government debt in January was an expansion by 19.7 percent, from only P70.006 billion in the same month last year. Of the total, interest payments aggregated P43.516 billion, while amortization payments totaled P40.290 billion. Year-onyear, interest payments grew by 2.7 percent, from P42.353 billion in 2017, while amortization payments jumped by 45.6 percent, from P27.653 billion the previous year, respectively. Broken down, domestic interest payments reached P24.468 billion, while those made to foreign entities had a P19.048billion share of the total. Payments made for fixed-rate Treasury bonds formed the bulk of the share of payments reaching P17.845 billion, while retail Treasury bonds came in next with P6.264 billion. Amortizing Treasury bills required another P359 million Domestic amortization payments reached P38.992 billion for the month, higher than the P1.298 billion as amortization on foreign debt. Amortization is the redemption of debt papers sold by the BTr, as well as the assumed liabilities from state-run corporations. Domestic redemptions for the month reached P38.992 billion. Earlier, the BTr released a revised Treasury-bill and Treasury-bond sale schedule for the second quarter this year, with the planned issuance seen to raise around P325 billion, increasing by P85 billion, from the P240 billion in the first quarter this year. National Treasurer Rosalia V. de Leon said the revised schedule allows the BTr to sell potentially more IOUs than before to help feed an ambitious spending program that focuses on the buildup of public infrastructures not just this year but for the balance of the term of President Duterte. In 2017 debt payments amounted to P680.466 billion, with amortization payments outpacing interest payments by 19.1 percent. Based on BTr data, the P680.466 billion disbursements for debts in 2017 was 13.8 percent lower than the P789.965 billion appropriated for debt servicing in 2016.
slightly below the $3.146-trillion estimate in Bloomberg’s survey of economists. T he March figure marks a
turnaround after falling in February for the first time in 13 months. T he State Ad ministrat ion of Foreign Exchange (SAFE) expects the country’s foreign reserves will remain stable. “China’s foreign-exchange reserve rose amid a combination of factors in March,” SAFE said in a statement. “The supply and demand of foreign exchange has been relatively stable, while the foreignexchange market continues to be balanced. Risk aversion rose in
international markets, while nondollar currencies have strengthened against the dollar.” China’s stockpile, the world’s largest, increased last year for the first time since 2014, as robust economic growth boosted confidence in the yuan and trade remained strong. Still, rising trade tension with the United States may lead to slower growth of the holdings, and even renew capital outflow pressure on emerging-market economies, including China.
Dominguez commits to cut red tape in BBB push
F
inance Secretary Carlos G. Dominguez III told finance ministers and investors at the eighth World Bank-Singapore Infrastructure Finance Summit in Singapore that the Philippines will continue to improve its project approval and execution processes to help pare down unnecessary financing costs. At the summit in Singapore, Dominguez said the Philippines is continuously upgrading the institutional processes on approving and executing big-ticket infrastructure projects to speed up the implementation of its ambitious “Build, Build, Build” (BBB) program consisting of 75 flagship projects worth a combined $170 billion over the next five years. “We continue to improve the institutional processes regarding project approval and execution. It is our desire the see the strategic projects completed at the shortest possible time in order to immediately realize their economic value and lessen unnecessary financing
costs,” Domingez said. He added the measures the government undertook to speed up project implementation include advancing right-of-way acquisition and land resettlement prior to loan signing and the designation of the Department of Budget and Management (DBM) as procurement agent. The government also frontloaded budget allocations for its counterpart funding commitments and established project monitoring offices to closely observe the completion of projects. Complementary to the BBB program is the government’s Comprehensive Tax Reform Program seen helping raise the country’s tax effort above the Association of Southeast Asian Nations average and provide a steady revenue stream for the government’s infra buildup program. The Depar tment of Finance, along with the National Economic and Development Authority, are completing the guidelines under the “3-in-1” process in which the approval of the Neda Board, the forward
obligational authority of the DBM and special presidential authority are issued all at once rather than over several weeks or months as was done previously. The traditional public-private partnership method was also modified to a “hybrid PPP” model, so that the government now implements the projects using a combination of its own budget, inflows from so-called official development assistance and funds raised from bond floats at investment-grade rates to speed up project execution, reduce completion risks and deliver the economic benefits to the people as soon as possible, Dominguez said. “In the Philippines the infrastructure program is at the core of our strategy for rapid and inclusive growth. With the highest multiplier effects, investments in infrastructure enable us to stimulate economic expansion,” he said. Of the 75 flagship projects under the BBB, 23 are “shovel-ready,”while the rest are expected to pass the approval process within the year. Rea Cu
BSP employees go cashless
Editor: Jun B. Vallecera • Monday, April 9, 2018
Perspectives Is emerging technology still emerging?
C
loud computing. Connected devices. “Going digital” and “going mobile.” Robotics. Blockchain. The fourth industrial revolution has arrived. In fact, these once “emerging” technologies have been around for some time. Adopting them is not an option anymore; it’s a mandate to compete in the 21st century. The velocity of technological change has never been faster than it is now. For enterprises, speed of technology deployment is critical to success and survival, but it can’t be at the expense of the health of the organization or its stakeholders and customers. Within the informationtechnology (IT) departments of many organizations, there has been a strong focus on quickly enabling disruptive technologies so the business can seize its promised benefits—from improved customer experience and increased operational efficiency to boosted profits. However, our data shows that when it comes to technology innovation, many companies struggle to balance the need for speed and agility with the need for control.
Agile technology risk
The future tech risk professional will need to demystify the risks of new emerging technology and develop an agile tech-risk framework with enough flexibility to respond to new risks. An agile technologyrisk framework will include a dynamic risk assessment that combines the risk appetite of the organization with adoption of new technologies. Some companies are taking steps to follow through on this promise. For example, we see clients leveraging data analytics and continuous monitoring to change the way they manage technology risk. The reason may be that only a handful of organizations have their arms around such technology and know-how to identify and manage associated risks. But this is the technology risk function’s role. Of course, technology innovation and control should go hand in hand. After all, when the risks related to new technologies are expertly managed, organizations can feel much more confident about unleashing them at scale.
How do organizations undergoing digital transformation strike the careful balance between innovation and control?
T
he Bangko Sentral ng Pilipinas (BSP) walks the talk of achieving a cash-light economy as it engages PayMaya Philippines and other e-money issuers to equip merchants selling within its headquarters in Manila with digital payment touch points. The initiative, led by the banking regulator, in cooperation with PayMaya—the digital financial services arm of PLDT and Smart’s Voyager Innovations—was announced during the BSP Cooperative General Assembly and Election of Officers at the BSP Manila compound on April 6. Now, the Central Bank’s more than 2,000 employees in its headquarters in Manila will experience the convenience and value of going digital when paying with their mobile phones through PayMaya QR or using the PayMaya card.
BSP employees no longer have to carry cash when paying in the BSP Employee Cooperative Store and the BSP canteen. All they need is their smartphone to scan the QR code displayed at cashier counters with their PayMaya app or pay by dipping or swiping their PayMaya card at the installed point-of-sale or POS terminals. BSP employees can also use their PayMaya account to shop online or in any Visa-affiliated merchants worldwide. They will also get to enjoy the speed and convenience of using the scanto-pay technology with PayMaya’s partner merchants nationwide. For BSP merchants, on the other hand, accepting payments via PayMaya QR or card will mean shorter lines as they no longer need to count bills or coins for change in every transaction.
Ultimately, having payment technologies, such as PayMaya QR, available in the Central Bank headquarters is a signal that the BSP is serious with its goal to have a cashlight economy fueled by different cashless payment options within its own compound. The BSP aims to increase cashless transactions/payments in the country from 1 percent at present to 20 percent by 2020. In support of this vision, PayMaya Philippines, together with Fintq, the financialtechnology arm of Voyager Innovations, supports this goal as it targets to enable 30 million Filipinos with digital financial services by 2020. In the same event, BSP employees who sign up for their own accounts received physical PayMaya Visa cards and free ice-cream treats for every PayMaya QR transaction to beat the heat this summer.
A5
It starts with involving technology risk in strategic planning, investment and business enablement efforts from the get-go. The IT risk function should connect with and un-
derstand the larger business strategy and focus on embedding some basic risk management up front in technology adoption efforts, rather than at the back end. In our experience, success in embedding IT risk into the front-end strategy of technology change often boils down to a number of key factors:
The leadership culture at the top of the technology organization How do technology leaders embrace, support and drive a culture of risk management? Where is technology risk positioned? Who does it report to? How credible is it? How well funded is it?
Where tech risk sits in the organization and who they collaborate with Technology risk should collaborate closely with strategic planning teams, including business planning, innovation and technology enablement teams.
Willingness of tech risk leaders to change their view from “It shouldn’t be done,” to “How can it be done with less risk?” Some technology risk teams are very rigid about the risks associated with emerging technology, and therefore marginalized or kept at arm’s length from the strategic planning process. They more often than not hinder the innovation process through resistance and negativity. Rather, they must help enable and support the business growth.
The right talent
While the skills gap is an issue in technology risk—and we discuss it in detail later in this report—the talent issue is more about awareness than capabilities. IT risk officers should educate themselves and the technical risk professionals on their teams about macro business issues, so the technology-risk function has the knowledge and understanding it needs to effectively incorporate risk insights into strategic discussions and decisions. The article “Is emerging technology still emerging?” by Phil Lageschulte, KPMG International, was taken from KPMG’s publication entitled Disruption is the new norm. © 2018 R.G. Manabat & Co., a Philippine partnership and a member-firm of the KPMG network of independent member-firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the Philippines For more information on KPMG in the Philippines, you may visit www.kpmg.com.ph.
Case clippings
By Justice S J Ranada Jr.
SHERIFFS—unbecoming conduct The actions of a sheriff of the Regional Trial Court in slapping the shoulder of a woman, using improper and intemperate words and threatening her should not be countenanced. Such acts tarnish not only the image and integrity of the public office but also the public perception of the image of the Judiciary of which he is a part. Government service is people-oriented, where high-strung behavior and belligerent attitude cannot be allowed De los Santos v. Vasquez 20 Feb. 2018
No. P-18-3792 PER CURIAM
A4 Monday, April 9, 2018 • Editor: Lyn Resurreccion A6
The World BusinessMirror
www.businessmirror.com.ph
To serve 12-year sentence for corruption
Ex-Brazil President Lula surrenders
S
ÃO PAULO, Brazil—After vowing for months that a conviction on corruption charges would not stand in the way of his bid for a third term as Brazil’s leader, former President Luiz Inácio Lula da Silva surrendered to the police last Saturday evening to begin serving a 12-year sentence. His imprisonment was an ignominious turn in the remarkable political career of da Silva, the son of illiterate farmworkers who faced down Brazil’s military dictators as a union leader and helped build a transformational leftist party that governed Brazil for more than 13 years. His detention was also a momentous development in the coming election in Brazil, upending the race to replace President Michel Temer in October. Having carved out a sustained and ample lead in the polls, da Silva promised his followers that the Workers’ Party could once again wrest control of Brazil’s destiny and prioritize policies to narrow the country’s steep inequality. Succeeding would have been a stunning comeback after the 2016 impeachment of da Silva’s handpic ked successor, Di lma R o u s s e f f. S he w a s r e p l a c e d by Temer, a deeply unpopular center-right politician who also stands accused of corruption. Da Silva is the first former Brazilian president to be remanded into custody since democracy was restored in the mid-1980s and the first former president to have been convicted of corruption. His imprisonment represents
perhaps the biggest triumph in the yearslong effort by a team of crusading judges and prosecutors to upend the endemic graft that has long been a staple of politics and deal making in Brazil. Before surrendering to federal police authorities, da Silva, 72, accused prosecutors and judges of knowingly pursuing a baseless case against him. “I do not forgive them for creating the impression that I am a thief,” an indignant da Silva, sounding hoarse, told a throng gathered outside a metalworkers union headquarters outside of São Paulo. For hours last Saturday, in a tense standoff, his ardent supporters had physically blocked his surrender, before finally allowing him to leave. The prosecution, da Silva charged, was an effort to thwart his vision of a country in which ever more poor people could enroll in universities, go on vacation and buy cars and homes. “If that was the crime I committed, I want to say that I will continue being a criminal because we’re going to accomplish much more,” da Silva shouted to a crowd that had spent much of the morning chanting that he should not surrender. During his last hours of freedom, da Silva appeared to acknowledge that his political career is over—at least for now.
Luiz Inácio Lula da Silva (center), the former president of Brazil, greets a large crowd of supporters outside the union hall where he had been staying in São Bernardo do Campo, Brazil, on April 7. Lalo de Almeida/The New York Times
“You will have to transform yourselves,” he told supporters. “They must know that the death of a combatant doesn’t end a revolution.” Months away from Election Day, Brazil’s political left now finds itself without an obvious standard-bearer. Da Silva did not anoint a successor to take his place on the ballot, suggesting that Workers’ Party leaders have yet to decide who stands the best chance of filling the void. But, notably, he did single out for compliments two leftist presidential hopefuls from other parties who were with him on stage, Manuela d’Ávila and Guilherme Boulos. Other candidates who remain in the race include Jair Bolsonaro, a far-right lawmaker who has campaigned on a promise of resorting
to harsh tactics to restore security in areas plagued by violence; and a former environmental minister, Marina Silva, who supports the judiciary’s crackdown on corruption and an overhaul of the political system. But by ending the presidential candidacy of a leader who remains beloved across much of the country, the move by judicial authorities may have called into question the fairness of the October election. Daniel Aarão Reis, a professor of contemporary history at Federal Fluminense University, said that while da Silva’s prosecution was procedurally sound, it is likely to further shake Brazilians’ faith in democracy, particularly if political rivals who also stand accused of wrongdoing manage to escape accountability.
“It worries me because, whether or not the people who provoked this situation meant it, it’s a blow to democracy,” he said. “Democracy is living a moment of very little prestige.” “No citizen is above the law, and no one, regardless of how important a leader he may have been, or what position he once held, is entitled to make a mockery of justice,” Brazil’s National Association of Prosecutors said in a statement issued last Saturday night. “Institutions are the pillars of democracy.” Bolsonaro’s reaction to the arrest was minimalist: He tweeted an image of the Brazilian flag. Da Silva, widely known as Lula, left power in 2011 with extraordinarily high approval ratings at home and a reputation as an effective dip-
lomatic mediator abroad. Washington initially viewed his rise with apprehension, but his rockstar status appeared at its peak when President Barack Obama, during a meeting of heads of state in London in 2009, called da Silva “the most popular politician on Earth.” Brazil appeared to be on a breathtaking rise when da Silva left office in 2011, poised to cash in on new, enormous oil reserves, and revel in the spotlight that the 2014 World Cup and the 2016 Olympic Games in Rio de Janeiro would cast on the country of almost 210 million people. But his part y’s legacy was marred in 2014, when prosecutors began unraveling a giant, convoluted kickback scheme as part of an investigation that became known as Lava Jato, or Car Wash, which has so far resulted in the conviction of 120 people and billions of dollars in restitution payments. The investigation crippled the state-run oil company, Petrobras, and the giant construction firm, Odebrecht, and contributed to a devastating recession that paved the way for Rousseff’s impeachment, which deeply polarized Brazilians. The charges da Silva was convicted of were a small chapter in the annals of Lava Jato. He was found guilty last July of accepting a seaside apartment in return for contracts awarded to the construction company OAS. After a three-judge panel upheld the conviction in January, da Silva asked the country’s two top courts to allow him to remain free while other appeals were considered, but his petitions were rejected. Da Silva is slated to start serving the sentence in a specially configured cell at the federal police headquarters in the southern city of Curitiba, a building he was on hand to inaugurate as president in 2007. New York Times News Service
Gaza buries journalist killed while covering mass protests Najib vows to make Malaysia great
G
AZA CITY, Gaza Strip—Hundreds attended the funeral of a well-known Palestinian journalist in Gaza last Saturday who was killed while covering mass protests along the Israeli border the previous day. Yasser Murtaja died from a gunshot wound he sustained, while filming last Friday in an area engulfed in thick black smoke from protesters setting tires on fire. Israeli troops opened fire from across the border, killing at least nine Palestinians and wounding 491 others in the second mass border protest in eight days. The deaths brought to at least 31 the number of Palestinians killed by Israeli fire since last week. The border area appeared calm last Saturday. Witnesses said Murtaja was over 100 meters from the border, wearing a flak jacket marked “press” and holding his camera when he was shot in an exposed area just below the armpit. The Israeli military has said it fired only at “instigators” involved in attacks on soldiers and was investigating Murtaja’s death amid a very hectic environment. “The IDF [Israeli Defense Forc-
es] uses means, such as warnings, riot dispersal means, and as a last resort firing live rounds in a precise, measured way,” it said last Saturday. “The IDF does not intentionally target journalists. The circumstances in which journalists were allegedly hit by IDF fire are not familiar to the IDF, and are being looked into.” Hamas, which has ruled Gaza since a 2007 takeover and calls for Israel’s destruction, has called for a series of protests until May 15, the anniversary of Israel’s founding when Palestinians commemorate their mass uprooting during the 1948 war over Israel’s creation. The Islamic group hopes the mass protests can create pressure to break a border blockade enforced by Israel and Egypt since 2007, without having to succumb to demands that it disarm. The blockade has made it increasingly difficult for Hamas to govern. It has also devastated Gaza’s economy, made it virtually impossible for people to enter and exit the territory, and left residents with just a few hours of electricity a day. Israel argues that Hamas could
have ended the suffering of Gaza’s 2 million people by disarming and renouncing violence. It says Hamas is exploiting the mass marches as a cover for attacking the border fence, and has vowed to prevent a breach at all costs. The military said that last Friday protesters hurled several explosive devices and firebombs, using the thick plumes of smoke from burning tires as cover, and that several attempts to cross the fence were thwarted. Colleagues said Murtaja was not affiliated with Hamas or any other militant group, and there were no Hamas symbols normally seen at the funerals for militants. In an apparent sign of solidarity, Hamas Chief Ismail Haniyeh attended the funeral last Saturday. “The Return March is a battle of truth and awareness,” Haniyeh said of the protests. “Yasser held his camera to direct the arrows of truth to convey the image of the besieged people.” At the funeral, Murtaja’s body was draped in a Palestinian flag with his flak jacket reading press placed upon him as he was carried through
the streets of Gaza. The drone he had used for shooting footage of Gaza hovered above to film his funeral. Dozens of his close friends and colleagues were sobbing after the coffin was taken out of the morgue. Murtaja, 30, was the cofounder of Ain media, a local TV production company that has done projects, including aerial drone video, for foreign media clients, such as the BBC and Al Jazeera English. He was one of the first to bring a drone camera into Gaza and his images captivated many of its residents who have never seen Gaza from above since it has no airport or skyscrapers. His death, along with the other recent casualties, seemed likely to draw renewed criticism from rights groups that have branded Israel’s open-fire orders on the border as unlawful, after Israel’s defense minister warned that those approaching the fence were risking their lives. Three other journalists sustained tear gas injuries and at least one cameraman a gunshot in his leg, health ministry and media activists reported. AP
K
UALA LUMPUR, Malaysia— Malaysian Prime Minister Najib Razak unveiled a lavish election manifesto with cash benefits targeting rural ethnic Malays, his key voting bloc, as he faces an unprecedented challenge from a revived opposition led by his former mentor, Mahathir Mohamad. Najib, 64, is seeking a third term in office under pressure to improve his National Front coalition‘s performance after support eroded in the last two elections. He has been dogged by a massive corruption scandal involving the 1Malaysia Development Berhad (1MDB) state fund, which is under investigation in the United States and other countries for allegations of cross-border embezzlement and money laundering. The 220-page election manifesto, which includes 364 pledges, was launched last Saturday, the day Parliament was dissolved to pave the way for national polls expected in early-May. His campaign slogan “Make my country great with BN”—the Malay acronym for the National Front—has similarities with President Donald J. Trump’s 2016 election motto “Make America great again.”
“This election is not about Najib versus the opposition leader. This election is not about BN versus the opposition,” Najib told tens of thousands of supporters at the manifesto launching at a sports stadium near Kuala Lumpur. “The key question is which side can provide a better life for you, your family, children and grandchildren, as well as their future.” Veteran opposition lawmaker Lim Kit Siang said the manifesto was “wrong and misleading.” He said the 1MDB fiasco had turned Malaysia into a “global kleptocracy” and that voting for the ruling coalition will not make it great but will destroy Malaysia. The US Justice Department says at least $4.5 billion was stolen from 1MDB by associates of Najib and it is working to seize $1.7 billion allegedly taken from the fund to buy assets in the US. Najib faces a strong challenge from 92-year-old Mahathir, Asia’s longestserving leader for 22 years before he retired in 2003. Mahathir returned to politics two years ago amid anger over the fiasco at 1MDB, which was set up and previously led by Najib, but which accumulated billions in debt. Mahathir now leads a four-party opposition alliance to oust Najib. AP
Syrian rescuers, medics say gas attack near capital kills 40 B EIRUT—Syrian opposition activists and rescuers said last Sunday that a poison gas attack on a rebel-held town near the capital has killed at least 40 people, allegations denied by the Syrian government. The alleged attack in the town of Douma occurred late last Saturday amid a resumed offensive by Syrian government forces after the collapse of a truce.
The reports could not be independently verified. Opposition-linked first responders, known as the White Helmets, reported the attack, saying entire families were found suffocated in their homes and shelters. It reported a death toll from suffocation of more than 40, saying the victims showed signs of gas poisoning, including pupil dilation and foaming at the mouth.
In a statement, however, it reported a smell resembling chlorine, which would not explain the described symptoms, usually associated with sarin gas. It said around 500 people were treated for suffocation and other symptoms, adding that most medical facilities and ambulances were put out of service because of the shelling. The Syrian American Medical Society, a relief organization, said 41 people
were killed and hundreds wounded. The Syrian Observatory for Human Rights said at least 80 people were killed in Douma last Saturday, including around 40 who died from suffocation. But it said the suffocations were the result of shelters collapsing on people inside. Videos posted online by the White Helmets purportedly showed victims, including toddlers in diapers, breathing through oxygen masks at
makeshift hospitals. The Syrian government, in a statement posted on the state-run news agency Sana, strongly denied the allegations. It said the claims were fabrications “ by the Army of Islam rebel group, calling it a failed attempt” to impede government advances. “The army, which is advancing rapidly and with determination, does not need to use any kind of chemical agents,” the statement said.
Syrian government forces resumed their offensive on rebel-held Douma last Friday afternoon after a 10-day truce collapsed over disagreement regarding the evacuation of Army of Islam fighters. Violence resumed days after hundreds of opposition fighters and their relatives left Douma toward rebel-held areas in northern Syria. Douma is the last rebel stronghold in eastern Ghouta. AP
www.businessmirror.com.ph
The World BusinessMirror
Monday, April 9, 2018 A7
Macron, Merkel may agree with Trump on China
G
erman Chancellor Angela Merkel and French President Emmanuel Macron will attempt a pincer movement on Donald J. Trump, with China emerging as the likely target of their joint effort to avert a trade war with the United States.
The leaders of Europe’s two biggest economies will visit the president in Washington within days of each other this month as the clock ticks down to a May 1 deadline for European Union (EU) proposals to stop the US from imposing tariffs on steel and aluminum. A possible solution may lie in White House efforts to forge a “ trade coalition of the willing” to stand up to China for what it calls unfair trade practices. The move is gaining favor with the government in Berlin, as well as with the EU, which handles the bloc’s trade negotiations, while a bruising trip to China earlier this year may make Macron more likely to lend his support. The EU is just one front in the US attempt to rewrite international trade rules, with Trump last Thursday threatening levies on $100 billion of Chinese goods, shortly after Washington and Beijing outlined tariffs on $50 billion of each other’s imported products. At stake for the EU are the metal tariffs that could take effect as soon as next month, threatening disruption to total trans-Atlantic trade worth some $720 billion. “The Europeans are going to have a very tough decision to make, which is, are they going to play this game,” Edward Alden, a Washington-based senior fellow at the Council on Foreign Relations, said in an interview. “That’s just anathema to the beliefs of Merkel and Macron.” All the same, Merkel, in her fourth
term as Germany’s leader, and Macron, elected France’s young president on a pro-EU ticket last year, are both under pressure to deliver something in their talks with Trump to calm trade tensions. At home, Macron is navigating a raft of economic and labor reforms that will determine his fate. A deadly attack carried out in the German city of Muenster last Saturday was a reminder for Merkel of the domestic security agenda that is dominating her coalition’s early days, and which could topple her yet. A common thread is likely to feature leads to China. Merkel and Macron have both made China’s inexorable rise a policy priority, with Macron pledging in January at the end of a trip to China to seek more strategic coordination with officials in Berlin on the issue.
Merkel and Macron increasingly wary of China
ON the trade front, the EU took concrete action last Thursday, asking to join a US dispute against China in the World Trade Organization (WTO) over the Asian nation’s discriminatory technology licensing rules. German Economy Minister Peter Altmaier said in an interview with Der Spiegel magazine that he’s willing to take joint action with Washington against overcapacity in the steel market, and was looking for a unified approach against intellectualproperty theft. European Commission Spokesman Daniel Rosario said the EU was
Containers are loaded onto a cargo ship at the port in Qingdao in east China’s Shandong province on April 6. China vowed last Friday to fight the United States “at any cost,” after President Donald J. Trump proposed slapping an additional $100 billion in tariffs on Chinese goods in an escalating trade dispute between the world’s two largest economies. Chinatopix via AP
having high-level meetings with the US that included discussions on overcapacity. “One of our proposals to the US side is that we should go into talks on how we can face probably unfair trade practices from China,” Juergen Hardt, who oversees trans-Atlantic coordination for Merkel’s government, told Bloomberg Television on March 23. Top White House Economic Adviser Larry Kudlow said last Thursday that a deal on Chinese tariffs could be realized, in part, by convincing other major economies to call out the Asian nation for unfair trading practices. “Everybody in the world knows that China has not played by the rules
Xi takes center stage to defend China’s trade from Trump barrage
P
resident Donald J. Trump’s barrage of tariff threats have left China’s Xi Jinping with a tricky balance to strike. He’s got to show he’s ready to retaliate against US trade threats while demonstrating China’s commitment to opening up. The Chinese president’s first chance to hit back in person comes in a speech on Tuesday at the Boao Forum for Asia—China’s answer to Davos—on the tropical island of Hainan. Besides reassuring the hundreds of foreign investors present that US protectionism won’t produce the same in the world’s second-largest economy, he must deliver a strong warning about letting the tariff disputes escalate into a trade war. “You’ve got to push back and defend yourself in some way and at the same time say, ‘We are still open for business,”’ said Fraser Howie, coauthor of the book Red Capitalism, who has two decades of experience in China’s financial markets. “The argument can be: ‘How do we not respond, if America is placing tariffs on us?”’ Xi set out his defense of globalization at the real World Economic Forum in Davos last year, just days before Trump took office promising to protect the US from “other countries making our products, stealing our companies and destroying our jobs.” After an initial honeymoon with Xi, Trump has renewed his China attacks, threatening to pile on as much as $150 billion of tariffs on the country’s goods. The levies represent an unprecedented challenge to Xi, who can’t afford an economic downturn that fuels unrest or to look weak after securing Communist Party backing last month to rule indefinitely. China in recent days has pledged retaliatory tariffs that would hit politically sensitive US regions and vowed to fight “to the end, and at any cost.”
Still, Xi is expected to emphasize the benefits of doing business with China and may announce reduced foreign-investment restrictions to mark the 40th anniversary of the reforms that launched the country’s economic boom. “Xi’s Boao speech will reiterate China’s firm support for globalization, compliance with World Trade Organization rules and its commitment for opening up,” said He Weiwen, deputy director of the Center for China and Globalization in Beijing and a former Commerce Ministry official.
Credibility gap
Yet, Xi must also overcome a credibility gap after years of Chinese promises to free up the economy were followed by more centralized control and state support for local companies. Pledges to open up sectors, such as financial services, have been made before— but often such pledges have been made only after domestic players already dominate. Top Chinese trading partners, such as the European Union and Japan, share Trump’s concerns about market access, even if they disagree with his tariff tactics. The trade spat has put new pressure on Xi to counter the US narrative during the speech, which will be attended by Philippine President Rodrigo Duterte, Singaporean Prime Minister Lee Hsien Loong and International Monetary Fund Managing Director Christine Lagarde. “It’s possible that he will continue the generic general promises of liberalization,” said Scott Kennedy, a China scholar at the Washington-based Center for Strategic and International Studies. “But he could try to finally be quite specific and forward-leaning and try to pop the American bubble by making a variety of changes that open up Chinese markets.” Bloomberg News
for many years,” he said.
Awkward meeting
Europe is still steadfast in standing behind WTO rules. A response to the US mustn’t involve “softening or weakening in the face of a unilateral decision” taken by Trump, French government Spokesman Benjamin
Griveaux told reporters in Paris last Wednesday. A compromise is all the harder as Berlin and Paris have difficulty communicating with the US due to the turnover of staff in the Trump administration. Macron, 40, may be in a better position for diplomatic maneuver-
One of our proposals to the US side is that we should go into talks on how we can face probably unfair trade practices from China.” —Hardt
ing than Merkel, 63. Trump will host the French president and first lady at Mount Vernon, the Virginia estate of the nation’s first president, George Washington, as part of a state visit. Merkel’s trip to meet the president, while still to be firmed up, is understood to have come at her request. The EU’s two most powerful leaders will aim to “shove the US back into the box” of the global trade system even as Trump seeks concessions as part of a “divide and conquer” strategy with Europe, according to Alden. But in the end, Merkel and Macron “may have no choice but to do this on Trump’s terms,” he said. Bloomberg News
Saudis see chemical, oil-refining bonanza along US Gulf Coast
S
audi Arabia signaled its intent to expand chemical production along the US Gulf Coast and potentially double the size of North America’s biggest oil refinery. The kingdom’s state-owned crude producer is joining with United Kingdom oil field-services firm TechnipFMC Plc. to assess the potential for producing ethylene, a key component in plastics, Saudi Aramco’s Motiva Enterprises Llc. unit said in a statement last Saturday. A second accord with Honeywell International Inc. could lead to the construction of a new manufacturing complex in the heart of the US petrochemicals industry. In a separate presentation at a lavish reception for Saudi Crown Prince Mohammed bin Salman in Houston, Motiva said it’s considering doubling the size of its refinery in Port Arthur, Texas.
The announcement comes less than a year after Aramco paid $2.2 billion to Royal Dutch Shell Plc. to gain sole control of the Port Arthur plant and some other Motiva assets the two companies controlled as part of a joint venture. No formal investment decisions on the chemical projects are expected until 2019, according to Motiva’s statement. Still, the kingdom already has hired longtime Dow Chemical CEO Andrew N. Liveris to act as an adviser after he departs the Dow DuPont Inc. unit on July 1, Saudi Basic Industries Corp. CEO Yousef al Benyan said in an interview in Texas.
Vision 2030
“These agreements signal our plans for expansion into petrochemicals,” Motiva CEO Brian Coffman said in the statement. “We are excited to work more closely with these leaders in the industry to further assess our
opportunities for investment.” Bin Salman, heir to the throne of the world’s largest oil exporter, is wrapping up a threeweek tour of the US to promote his effort to open up the Saudi economy through his “Vision 2030” plan. Saudi Basic, the Middle East’s dominant chemical maker, said last Saturday that it wants to build a Houston headquarters for its Western Hemisphere operations as the company capitalizes on the surge in cheap natural gas supplies from North American shale fields. In a late-March stop in New York, the prince signed a memorandum of understanding with Softbank Group Corp. to build at $200-billion solar power development.
Moving downstream
Investments in the United States were announced as Aramco plans an initial public offering for
as soon as the second half of this year. Proceeds from the share sale should be used to expand the company’s footprint in refining and petrochemicals, rather than in oil exploration and production, Aramco CEO Amin Nasser said in a March 26 Bloomberg television interview in New York. Nasser also said Aramco is looking at a two- to threefold expansion of its petrochemicals business from a “huge” global capacity, now that the Sadara joint venture with Dow Chemical is complete. Total SA, the French energy major, and Aramco are due to sign a nonbinding agreement on April 10 to develop the petrochemical site at their refinery in Al-Jubail, a person familiar with the matter said on April 6. TechnipFMC declined comment. A voicemail left with Honeywell outside of normal business hours wasn’t immediately returned. Bloomberg News
Middle East a possible energy winner in US-China spat
T
he Middle East is emerging as a potential beneficiary of the brewing trade war between the United States and China, as the Asian nation strikes back with retaliatory tariffs on American petrochemical products. If China goes ahead with its proposal to slap a 25-percent tariff on polyethylene (PE) and liquid propane, which were among 106 American goods targeted, buyers in the Asian nation may look elsewhere for alternatives to pricier US supplies.
And the energy-rich Middle East, with plenty of petrochemical supplies, looks well-suited to meet the substitution requirements. The region is already China’s biggest source for polyethylene— one of the most commonly used plastics in the world—and can further boost exports to the country along with another major seller South Korea, according to Goldman Sachs Group Inc. China may need to replace 2.3 million metric tons of PE next year if the tariffs are implemented,
the bank said. China imports 12.7 million tons of the product a year, of which the US currently accounts for only 600,000 tons, Goldman estimates. But purchases from the US have the potential to grow more than threefold over the next two years if the tariffs aren’t implemented, it said. As for propane, China is the third-biggest export market for the US and has boosted purchases from there in recent years. Although the tariffs won’t hurt America as much as intended, the
most likely alternative option is the Middle East as more supplies come on stream there, according to industry consultant Energy Aspects Ltd. In particular, Iran stands out as a likely beneficiary as the Persian Gulf nation can sell the gas at a discount to regional contract prices, FGE consultant Ong Han Wee said. “Iran is an attractive alternative,” he said. “Chinese companies will have to diversify their supply sources more toward Iran.” Bloomberg News
Green Monday BusinessMirror
A8 Monday, April 9, 2018
www.businessmirror.com.ph • Editor: Lyn Resurreccion
5 plants, animals confused by climate change
E
very year, as the seasons change, a complex ballet unfolds around the world. Trees in the Northern Hemisphere leaf out in the spring as frost recedes. Caterpillars hatch to gorge on leaves. Bees and butterflies emerge to pollinate flowers. Birds leave the Southern Hemisphere and fly thousands of miles to lay eggs and feast on insects in the north. All of these species stay in sync with each other by relying on environmental cues, much as ballet dancers move to orchestral music. But global warming is changing the music, with spring now arriving several weeks earlier in parts of the world than it did a few decades ago. Not all species are adjusting to this warming at the same rate, and, as a result, some are falling out of step. Scientists who study the changes in plants and animals triggered by seasons have a term for this: phenological mismatch. And they’re still trying to understand exactly how such mismatches— like the blooming of a flower before its pollinator emerges—might affect ecosystems. In some cases, species might simply adapt by shifting their ranges, or eating different foods. But if species can’t adapt quickly enough, these mismatches could have “significant negative impacts,” said Madeleine Rubenstein, a biologist at the US Geological Survey’s National Climate Change and Wildlife Science Center. “If you look at the past history of climate on earth, there has never been such a dramatic, rapid change in the climate,” said Andrea Santangeli, a postdoctoral researcher at the Finnish Museum of Natural History. “Species have to respond really fast,” he said, “that’s really unprecedented.” Here are f ive ex amples of mismatch, just one of the many threats that species face from global warming, that scientists have discovered so far:
An orchid’s sex life turns bleak
The early spider orchid relies on deception to reproduce. Each spring, the orchid, whose bulbous crimson body looks like an insect, releases a pheromone that tricks solitary male bees into thinking the plant is a mating partner—a key step for pollination. This ruse, which scientists call pseudocopulation, works because the orchid tends to bloom during a specific window each spring—
shortly after lonely male bees emerge from hibernation but before female bees appear. Ye t w i t h s p r i n g c o m i n g ea rl ier, fema le bees a re now emerg i ng sooner a nd lu r i ng t he ma le bees away f rom t he lovelor n orchid, accord ing to a 2014 st udy f rom Br it a in. By examining data collected in herbariums and in the field over a century, the researchers found that the gap between the times when male bees and female bees emerge shrinks by about 6.6 days for each degree Celsius of warming, giving the orchid less opportunity to reproduce. “The main finding is that things are getting increasingly bad for orchid pollination,” said Anthony Davy, a professor of biological science at the University of East Anglia, and the lead author of the paper. For this orchid—which is already rare—the future looks bleak, he said.
Spring comes early, but the flycatcher doesn’t
The European pied f lycatcher r u ns on a t ight sc hedu le each spring. From its wintering grounds in Africa, the bird flies thousands of miles north to Europe to lay eggs in time for the emergence of winter moth caterpillars, which appear for a few weeks each spring to munch on young oak leaves. By timing this just right, the flycatchers ensure there’s enough food around when their hungry chicks hatch. In a series of studies in the 2000s, however, scientists in the Netherlands showed that many flycatchers were starting to miss this narrow window. A s spr ing temperatures warmed, oak trees were leafing out earlier and peak caterpillar season was arriving up to two weeks sooner in some places. However, many f lycatchers, which appear to schedule their departure from Africa based on the length of day there, were not getting to Europe early enough for their spring meals.
Designer: ‘Fashion should not pollute the planet’ By Kaya Dorey | Inter Press Service
V
ANCOUVER, Canada—Fashion is meant to be trendy. It’s fast-paced: In one season, out the next. If you want to keep up, you had better update your wardrobe— that top you bought last summer is already outdated. While things may have been built to last a life time a generation ago, today they don’t even last a year. But the world is finite, and so are the resources in it. What we wear is every bit as important as what we eat when it comes to environmental sustainability. If we’re serious about preserving our world, we’re going to have to shift our current linear fast-fashion paradigm to a slower more circular one that doesn’t pollute the planet. When I learnt about fast-fashion and textiles waste, it was the “make, consume, scrap it”attitude that made me think. I realized
that most of our clothing is produced in a linear production line where we take from nature, consume and throw away when we are done. But nothing is ever really “away.” Even if it’s natural, nothing biodegrades in a landfill. I had to do something. Synthetic clothing is petroleum-based— just like plastic. That means it’s part of our global plastic problem, which is clogging our oceans and damaging our ecosystems. More than 8 million tons of plastic leaks into the ocean each year—equal to dumping a garbage truck of plastic every minute. But sustainability as a concept doesn’t work when you guilt-trip people into it. It also doesn’t work when you force it on people. The sustainable choice has to be cool, and undeniably the best option in terms of quality and style—sustainability aside. It also has to be accessible and affordable compared with other options.
Global warming is causing spring to arrive early and autumn to come late in many places, and not all species are adapting at the same rate. Lauren Kolesinskas/The New York Times
If you look at the past history of climate on Earth, there has never been such a dramatic, rapid change in the climate. Species have to respond really fast. That’s really unprecedented.”—Santangeli In the parts of the Netherlands where peak caterpillar season had advanced the fastest, the scientists later found, flycatcher populations dwindled sharply. “That was the big discovery that suggested this mismatch could have real consequences for populations,” said Christiaan Both, an ecologist at the University of Groningen.
Birds and tractors get too close for comfort
are more likely to get destroyed by tractors and other machinery. Looking at 38 years of data, researchers found that farmers in Finland are now sowing their fields a week earlier in response to warmer temperatures, but the birds are laying their eggs two to three weeks earlier. “This has created a phenological mismatch,” Santangeli said. “The response we’ll see is declines of these birds.”
Caribou show up late for lunch
Climate change doesn’t just cause missed connections. In some cases, the advance of warmer weather can lead to perilous meetings. In Finland, for example, the Northern lapwing and Eurasian curlew have usually built their ground nests on barley fields after farmers have sown their crops in the spring. But as temperatures have risen, the birds are now increasingly laying their eggs before the farmers get to the fields, which means their well-concealed nests
Caribou in western Greenland follow a strict seasonal diet. In the winter, they eat lichen along the coast. In the spring and summer, they venture inland to give birth to their calves and eat the Arctic plants that grow there. As Greenland has warmed up and sea ice has declined, however, those inland Arctic plants have been emerging earlier— with some plant species now greening 26 days earlier than they did a decade ago. But the
As a young person, I thought at first that my voice was a drop in the ocean. How could I possibly make a difference? Yet, the more I studied and the more I learned about the fashion industry, the more I realized: We are the ones who need to change this. Every time we shop, we are making a choice. If we have the right information, we can make more conscious decisions, and bring about real change. If we work together, we can make a difference. Since I started my sustainable apparel company, I’ve found people who share my passion, values and vision to make apparel that is truly sustainable in terms of materials, dyes and the people making it. I have sourced organic cotton and hemp fabrics, inks that doesn’t have any PVC or heavy metals in them and all my product is made ethically in my hometown of Vancouver, Canada. Yet a major hurdle we keep encountering, is that we need bigger players on board to truly make an impact. Big brands have the buying power and
the economies of scale to bring down costs associated with truly sustainable apparel. The global fashion industry can still be trendy – we can still change our wardrobes. But when we do, we will do it without killing the planet. A major shift is needed to turn this thing around, starting with embedding sustainability into school curriculums and design programs. We’re looking at the problem of waste from the wrong angle: at the end of the process. We should be looking at it from the very beginning: before the design process even starts. Designers—and not just clothing designers—need to design with the end in mind. We need to start innovating, coming up with new ways to eliminate waste from production and taking full responsibility for the products we’re making and what’s left over. Consumers need to ask more questions and learn about where their clothing is from: What it’s made of; Who’s making it? Just as we have started doing with food. If we vote with our dollars, and buy from brands that are more transparent with this kind of information, brands will be forced to
caribou have not shifted their migration as quickly. And scie nt i s t s h a v e d o c u m e nt e d a troubling trend in the region: More caribou calves appear to be dying early in years when the spring plant growth preceded the caribou’s calving season. While that study only found a correlation between warmer temperatures and caribou calf deaths, “it’s consistent with the idea that mismatch is disadvantageous,” said Eric Post, an ecology professor at the University of California, Davis. When Arctic plants green up earlier, they may become tougher and less nutritious by the time the caribou get there and start eating them. Why don’t the caribou speed up their migration? One possibility is that their reproductive cycles respond most strongly to seasonal signals like the length of the day, whereas plants respond more strongly to local temperatures, which are rising. In theory, if given enough time, the caribou might eventually adjust as natural selection takes its course and favors individuals that calve earlier. But with the Arctic warming faster than the rest of the globe, Post said, “the question is whether things are changing too fast for evolution to matter.”
The snowshoe hare has a wardrobe malfunction
Climate change doesn’t just cause mismatches in the spring. improve their supply chains and sustainability practices out of sheer competition to stay in the game. We also need policy-makers to get behind the sustainable agenda. For example, dying processes, and fabrics that contribute to climate change and cause a lot of waste—could pay higher taxes. We must create solutions, which pave the way for our societies to change. Last year I became one of six United Nations Environment Young Champions of the Earth—an initiative that has supported me to actively make a difference. You can apply now for 2018, or find other initiatives which champion and support your idea to create real environmental change. Some days it’s tough. Fighting an environmental cause, especially as a young person and within the fashion industry, means looking for solutions which may not be the most lucrative, or appealing to the mainstream. But by joining other designers, fabric suppliers, manufacturers and other fashion industry players, we’re using our networks, speaking up, and finding solutions.
Consider the snowshoe hare, whose fur coat has evolved to change from brown to white during the winter for camouflage. As the Earth has warmed, however, snow cover in the hare’s habitat melts sooner, leaving the animal more exposed to predators. “Camouflage is critical to keep prey animals alive,” said L. Scott Mills, a professor of wildlife biology at the University of Montana who studies the impacts of camouflage mismatch on species like the snowshoe hare. For every week the hare is mismatched, Mills and his colleagues found, it had a 7 percent higher chance of being killed by predators like the lynx. Currently, the hare is only mismatched by a week or two. But by mid-century, Mills said, that could extend up to eight weeks. If that were to happen, he said, the hare “would start declining toward extinction.” There is some good news for the snowshoe hare, however. Where evolution was previously thought to take millions of years, scientists now think an animal like the hare could adapt in five to 10 generations, especially if those parts of the hare population that are more adaptable are protected. “It does give us an avenue for hope,” Mills said. “It’s not a foregone conclusion that species with phenological mismatch are going to go extinct.” New York Times News Service
For our fashion industry to be truly sustainable, we need everyone on board. We need big brands to support sustainable innovation within their companies. We, as consumers, need to seek out more natural and organic fabrics when shopping for new clothing, or buy second hand. And we, as designers, need to design with the end in mind and develop closed-loop and zero waste-production lines. I believe that together we will create change, just like Margaret Mead once said: “Never doubt that a small group of thoughtful, committed citizens can change the world, indeed, it’s the only thing that ever has.” If we start small and set big goals, we will make a difference. We can shift this fastfashion paradigm forever, without sacrificing a trendy wardrobe. Kaya Dorey is founder of Novel Supply Co., a conscious apparel company that creates, designs and supplies fashionable products that shift the stigma of sustainability, using minimalistic design, natural fabrics and sustainable inks with a focus on zero waste.
Biodiversity Monday BusinessMirror
Asean Champions of Biodiversity Media Category 2014
Monday, April 9, 2018 A9
Editor: Lyn Resurreccion • www.businessmirror.com.ph
As whales are dying, a movement Asean Biodiversity Heroes in Vietnam see reasons to become optimistic
P
ROVINCETOWN, Massachusetts— Regina Asmutis-Silvia, a biologist who has dedicated her career to saving right whales, is cleaning out a file cabinet from the early-1990s, and the documents inside tell a familiar story—the whales are dying from collisions with ships and entanglements in commercial fishing gear, and the species might not survive. Fast forward through a quarter-century of crawl-paced progress, and it’s all happening again. “It’s a little scary to think if we hadn’t been working on this all these years, would they have been relegated to history instead of Cape Cod Bay?” said Asmutis-Silvia, of Plymouth, Massachusetts-based Whale and Dolphin Conservation. “We’re standing on the cliff and going, ‘It matters, they’re still here, they’re still something to fight for.”’ Despite eight decades of conservation efforts, North Atlantic right whales are facing a new crisis. The threat of extinction within a generation looms, and the movement to preserve the whales is trying to come up with new solutions. The whales are one of the rarest marine mammals in the world, numbering about 450. The 100,000-pound animals have been even closer to the brink of extinction before, and the effort to save them galvanized one of the most visible wildlife conservation movements in US history. But the population’s falling again because of poor reproduction coupled with high mortality from ship strikes and entanglement. Scientists, environmentalists, whale watch captains and animal lovers of all stripes are rallying to renew interest in saving right whales, but many admit to feeling close to defeated. Charles Mayo, director of the right whale ecology program at the Center for Coastal Studies in Provincetown, and other scientists have said the species could be extinct as soon as 2041. Mayo, a ninth generation resident of Cape Cod whose ancestors harpooned whales in the 18th and 19th centuries, now leads expeditions to find the animals and try to learn how to save them. “There’s a fair amount of sadness, dealing with these creatures. They are on the brink of extinction now, and their future is truly in doubt,” he said. “I don’t think any of us are discouraged, but many of us are fearful. I certainly am.” The decline of right whales dates back to the whaling era of centuries ago, when they were targeted as the “right” whale to hunt because they were slow and floated when killed. They were harvested for their oil and meat, and might have dwindled to double digits until international protections took hold in 1935. Preserving the whales became an international cause, championed by environmentalists, scientists and the US
government, and their population grew to about 275 in 1990 and 500 around 2010. But then things changed. Scientists are still trying to figure out why the whales have lost about 10 percent of their population in just eight years, but one hypothesis places blame on the warming of the Atlantic Ocean. The whales migrate from Georgia and Florida to New England and Canada every year, seeking food. They are aided by a complex system of protected areas, shipping regulations and commercial fishing restrictions that try to ensure safe passage as they gorge on copepods, crustaceans the size of a flea. But as waters have warmed, the tiny organisms they need to survive appear to be moving, and the whales are following, sometimes putting themselves in harm’s way, said Mark Baumgartner, a scientist with Woods Hole Oceanographic Institution. They also just aren’t eating enough, he added. “The whales are moving around a lot more and they are not finding food,” he told fishermen at the Maine Fishermen’s Forum in early-March. Last year there were 17 confirmed right whale deaths—a dozen in Canada, the rest in the United States. Scientists haven’t observed a single new right whale calf this year, another dire development. Advocates for right whales have turned to touting innovations, engaging with commercial fishing groups and calling for expediting new protections in the United States and Canada. But it’s a hard fight greeted by government bureaucracy and skeptical industries concerned about their own survival. Baumgar tner spent some of his presentation at the Maine Fishermen’s Forum talking about a new technology that uses a modem to locate and retrieve lobster fishing line from the ocean floor. The innovation could reduce the number of fixed fishing lines that can cause right whales to become entangled and slowly suffocate. There were grumbles from fishermen who doubted the viability of the new gear. One called out: “You ever been on a lobster boat?” Conservation groups filed a federal lawsuit this year accusing the National Marine Fisheries Service of not doing enough to protect right whales from fishing gear. Still, advocates see some reasons to be optimistic. Canada recently announced moves to protect the whales by changing the dates of the snow crab season and establishing a permanent speed limit in the Gulf of Saint Lawrence. And this winter, scientists observed a behavior called a “surface active group” for the first time in a year. The whales gather at the surface for males to compete to mate with a female, which scientists hope augurs for a baby whale in the future. “They can recover. They’re not a hopeless species,” Asmutis-Silvia said. “We just have to stop killing them.” AP
US Interior Dept. backing away from steep fee hikes at natl parks
W
A S H I N G T O N —T h e I n t e r i o r Department is backing down from a plan to impose steep fee increases at popular national parks in the face of widespread opposition from elected officials and the public. The plan would nearly triple entrance fees at 17 of the nation’s most popular parks, including the Grand Canyon, Yosemite, Yellowstone and Zion, forcing visitors to pay $70 per vehicle during the peak summer season. While plans are still being finalized, a spokesman for Interior Secretary Ryan Zinke said officials have “taken the public’s suggestions seriously and have amended the plan to reflect those” comments. Zinke announced the fee hike last October, saying it could raise $70 million a year to pay for maintenance projects at the National Park Service. The plan drew immediate resistance from lawmakers and governors of both parties, who said the higher fees could exclude many Americans from enjoying national parks. Most of the parks affected by the plan are in the West, including Mount Rainier and Olympic parks in Washington state, Rocky Mountain in Colorado and Grand Teton in Wyoming. Acadia National Park in Maine and Shenandoah National Park in Virginia also would be affected. The park service received more than 109,000 comments on the proposal, most of
them opposed, during a two-month comment period that ended in late-December. One commenter told the agency, “If I were considering a trip to one of these parks and suddenly found that the trip would incur an exorbitant entry fee, I would not...repeat NOT take my family on this trip.” Emily Douce, budget and appropriations director for the National Parks Conservation Association, said she was glad that the Interior Department appears to be listening to the public. While the group recognizes that fee increases are sometimes necessary, “We were adamantly against the fee proposal that came out,” Douce said. “It was too much, too fast.” Spokesman Heather Swift said on Tuesday that Zinke “remains laser-focused on rebuilding our park infrastructure” and addressing an $11 billion maintenance backlog in the parks. The fee hike, along with a bipartisan bill pending in Congress to create a parks maintenance fund, “will provide a historic investment” in the park system, Swift said. A bill cosponsored by Sens. Lamar Alexander, Republican-Tennessee, Steve Daines, Republican-Montana, and other lawmakers would use revenue from energy production on federal lands to help reduce the long-standing maintenance backlog at national parks. The Washington Post first reported the Interior’s reconsideration of the fee hike. AP
‘Everyone has a role in conservation’
A
iming to inspire people to take action for biodiversity by sharing noteworthy stories about biodiversity conservation, the Asean Centre for Biodiversity (ACB) held the first leg of the Asean Biodiversity Heroes (ABH) Regional Forum in Hanoi, Vietnam, on March 26 and 27.
With support from the European Union (EU) and Vietnam’s Biodiversity Conservation Agency, Ministry of Natural Resources and Environment, the forum was held at the Hanoi University of Natural Resources and Environment with participants from various sectoral groups—academe, the government, media and business. The Biodiversity Heroes of Lao PDR, Myanmar, Thailand and Vietnam shared their acts in combatting biodiversity loss in their respective countries. “As we honor the heroes for their extraordinary efforts, we must remember that everyone, no matter who they are, has a role to contribute—and we are determined to play our part by raising awareness and encouraging others to take concrete actions in conserving biodiversity,” said Dato Lim Jock Hoi, secretarygeneral of Association of Southeast Asian Nations in his video message for the forum. The Biodiversity Heroes attended field visits to the Vietnam Academy of Sciences where Prof. Dang Huy Huynh, Biodiversity Hero of Vietnam, practiced his profession as a scientist and at the Cuc Phuong National Park, where he was assigned in 1961, and had a deeper appreciation to biodiversity. The ABH are the faces of biodiversity conser vation in the region who take action for biodiversity in their own spheres of influence. They were recognized during the Golden Anniversary of Asean on August 8, 2017, in Manila, Philippines. The 10 ABH 2017 are the following: Eyad Samhan of Brunei Darussalam; Sophea Chhin of Cambodia; Alex Waisimon of Indonesia; Nitsavanh Louangkhot Pravongviengkham of Lao PDR; Prof. Zakri Abdul Hamid of Malaysia; Dr. Maung Maung Kyi of Myanmar; Dr. Angel C. Alcala of the Philippines; Prof. Leo Tan Wee Hin of Singapore; Dr. Nonn Panitvong of Thailand and Prof. Dang Huy Huynh of Vietnam.
Kyi said in his message to the youth attendees. “If you have strong desire for conservation, skills will follow and funding will also come. Because of our team’s desire, we now have so many projects, so many par t ners and so many millions come to our region,” he added. Kyi is a medical doctor by profession but his ultimate dream is to have his ow n botanical garden—a dream that he pursued despite oppositions from his family and community. Panitvong, the Biodiversity Hero of Thailand, is a businessman who is popularizing taxonomy and helping it become more accessible to the general public. “Our group, Siamensis.org, are mostly researchers and taxonomists. I believe that the real biodiversity heroes are those who take care of our wildlife in the field. And those heroes are you, the park officers and rangers,” Panitvong said to the Cuc Phuong National Park officers and staff. “I am 90 years old. I am doing my best to connect two generations—the young and the old, not just in the Asean region but a lso in the world ” said Huy nh, Biodiversit y Hero of Vietnam.
inspire us to do our share in conserving the rich biodiversity of our region,” ACB Executive Director Roberto V. Oliva said. The Forum Series forms part of t he AC B - EU Bio d ive r s it y Conservation and Management or Protected A reas in A sean (BCAMP) Project, which aims to improve the management of protected areas in the Asean region; develop and mobilize knowledge and scientific basis for biodiversity conservation; mainstream biodiversity into the education system; and to strengthen the regional capacities. To further spread the conservation stories of the Heroes, the second leg of the Forum Series w i l l feature t he Biod iversit y Heroes of Cambodia, Indonesia and the Philippines, and the last leg will feature Heroes of Brunei Darussalam, Malaysia and Singapore.
The search for modern-day biodiversity heroes
“In times that you feel like your biodiversity conser vation efforts are not enough, just put in mind that if this old man can do it, then definitely, you can,” shared Huy nh as he encouraged t he you ng pa r t ic ipa nts to do their par t in conser v ing biodiversit y. “ The A BH Regional Forum Series was designed to ensure that the journey of the Biodiversity Heroes does not end after the awarding ceremonies. Their stories must be heard by the people of Asean and the world. They are our living heroes— the faces of biodiversity whom we can identif y with, and will
If you have strong desire for conservation, skills will follow and funding will also come. Because of our team’s desire, we now have so many projects, so many partners and so many millions come to our region.”—Kyi
Inspiring for change
Lao PDR’s Biodiversity Hero, P r avong v ie ng k h a m , a nd h i s company, Union Development Agricole Import-Export Public Co., started their involvement in biodiversity conservation by replanting trees in 2000. After this, he popularized the use of environment-friendly agricultural production methods in pig farms, cattle ranch and vegetation across a 2,000-hectare land near the Nam Suang R iver in Phon-Hong District, Vientiane Province. Pravongviengkham believes that while businesses can have direct or indirect impact on biodiversity, they also have relevant biodiversity-related knowledge, expertise and resources needed to conserve biological resources. The business sector is an integral part of the solution to biodiversity loss, he said. “I started my dream just like each one of you. I have no money, no skills at that time; but the strong desire is very important,”
The Asean biodiversity leaders and Asean Biodiversity Heroes who attended the Regional Forum in Hanoi, Vietnam, are (from left): Anh Cuong Pham, director of Biodiversity Conservation Agency of Vietnam Environment Administration, Ministry of Natural Resources and Environment; Asean Biodiversity Heroes Dr. Nonn Panitvong of Thailand, Dr. Maung Maung Kyi of Myanmar, Prof. Dang Huy Huynh of Vietnam and Nitsavanh Louangkhot Pravongviengkham of Lao PDR; Atty. Roberto V. Oliva, ACB executive director and Associate Professor Dr. Pham Quy Nhan, vice president of Hunre.
The inaugural search for the ABH in 2017 was supported by the Asean secretariat; the Philippines’s Department of Foreign Affairs; the European Union through the BCAMP project; and Hari Foundation Inc., the corporate social responsibility arm of Hyundai Asia Resources Inc. The Heroes were selected by the Asean member-states. The nominating agencies considered the relevance of the nominees’ contr ibutions to biodiversit y con ser v at ion, t he i mpac t of these contributions to biodiversity conser vation efforts in their respective countries and the region, the replicability of their actions and the recognition they received in communities where they belong. The ACB ser ves as the secretariat of Asean Biodiversity Heroes. The ACB is Asean’s response to the challenge of biodiversity loss. It responds to the needs of the Asean member-states in the areas of Protected Area Management, Wildlife Law Enforcement, Biodiversity Information Management, Access and Benefit Sharing, Business and Biodiversity, Climate Change and Biodiversity, Ecotourism and Biodiversity Conservation, Ecotourism and Biodiversity Conservation, Global Taxonomy Initiative, Invasive Alien Species, Payment for Ecosystem Services, and other thematic areas. It is the sole Asean center hosted by the Philippines.
A10 Monday, April 9, 2018 • Editor: Angel R. Calso
Opinion BusinessMirror
www.businessmirror.com.ph
editorial
USA: ‘The Earth is flat’
T
here’s evidence that humans reached the peak of evolution some time ago and it has been all downhill since then. This may account for at least some of the problems the world is facing as we march farther into the 21st century. The future may not be bright as we had all hoped for and even expected. Many of the predicaments we face today are the same as our ancestors encountered centuries ago. Mount Vesuvius, a volcano in Italy, erupted in 79 AD killing perhaps thousands in the aftermath. Mount Pelée on Martinique, an island in the Caribbean Sea erupted in 1902 killing thousands. The 2004 Indian Ocean earthquake and tsunami took 200,000 lives, the worst in history. An earthquake and tsunami near the Mediterranean island of Crete in 365 AD may have killed about the same number. Humans, though, have an amazing ability to adapt even if we all live in much more fragile “shells” than the animals around us with the fur and fangs that help to keep them safe. It is our brains and reasoning power that have elevated us from the beasts of the field. The horse was domesticated around 3,000 BC, and we quickly learned not to be run over by a horse-drawn cart as we did with the automobile not too many decades ago. However, we may have peaked in coping with the modern world that we have created. A 2017 survey conducted in England found that more than 10 percent of those under 35 years of age were not able to figure out how to change a burned out electric light blub. A quarter of young people age 25 to 34 admitted they did not know how to hard-boil an egg. Had the same percentage of our ancestors been so ill equipped to function in the world, we might all still be living in caves or perhaps the human species might have become extinct. Look at some recent events. In January an official message from the state government of Hawaii was sent over television, radio, and cell phones informing the public that “Ballistic Missile Threat Inbound to Hawaii. Seek Immediate Shelter. This Is Not a Drill.” Thirty-eight minutes later it was announced that the message was a mistake. The governor of the state apologized for the delay saying that he could not alert citizens because he did not know his Twitter password. Another survey released this past week by YouGov, an international British market research firm, may confirm our worst fears. A survey of 8,215 adults aged 18 to 24 year olds in the United States to find out if they ever believed in the “flat Earth” movement. Only 66 percent of young millennials answered that they “always believe the world is round.” In other words, more than 30 percent are not sure the Earth is round. Further, nearly 10 percent said that they have “always believed” the planet was flat. The internal demographics tell and interesting story. Seventy-six percent of adults age 25 to 34 say they have always believed the Earth is round, compared to 82 percent of ages 35 to 44, 85 percent of ages 45 to 54, and 94 percent of adults 55 and over. Human history has been marked with succeeding generations striving to be more curious, more creative, and more innovative than those in the past. If that trend is being interrupted, the next 50 years is going to be less productive and less prosperous than the past decades. Since 2005
BusinessMirror A broader look at today’s business
An invitation to ‘Material Maker’ Atty. Jose Ferdinand M. Rojas II
RISING SUN
I
N December 2017 I opened my first solo exhibit Strong Material at the Saturday Group Gallery. More than four months later, I am happy to announce that Material Maker, my second solo exhibition, will open at the Pinto Art Museum’s gallery on April 15. For Material Maker, I am presenting abstract works with the same focus on the textures, sheen and colors of different materials. Ricky Francisco writes about the show: “These new works present a genuine exploration of color field and textural composition, and how these draw out emotions, similar to the body of work created by Jose Joya in the 1960s and 1970s. Succeeding in his first solo by harnessing the way metallic colors change depending on the quality of light, and how texture creates a raw emotional response, Rojas created a body of work which, for all purposes, are always news depending on the time of day,
and the amount and quality of light which reflect on them.” The new pieces are different as I added new elements to express many of the positive emotions I experienced while traveling to various places around the world. The works are also inspired, of course, by the magnificent racehorses I have encountered and after which many of the artworks are named. Fiorella and other similar artworks follow the color field composition present in the pieces from Strong Material. This time, however, the works are more elaborate and more elegant in terms of composition. For Confetti
End ‘endo’ in public sector
✝ Ambassador Antonio L. Cabangon Chua Founder Publisher Editor in Chief
Jun B. Vallecera
Managing Editor Associate Editor News Editor
Max V. de Leon Jennifer A. Ng Vittorio V. Vitug
Senior Editors
Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos Dennis D. Estopace
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 VP HR and Admin
Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Marvin Nisperos Estigoy Aldwin Maralit Tolosa Rolando M. Manangan Loida S. Virtudazo
BusinessMirror is published daily by the Philippine Business Daily Mirror 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
Atty. Lorna Patajo-Kapunan
T. Anthony C. Cabangon
legally speaking
T
he 1987 Philippine Constitution provides for the duty of State to protect workers’ rights and ensure fair working conditions. Article II, Section 9 of the 1987 Philippine Constitution pronounces that, “The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living and an improved quality of life for all.” Section 18 of the same Article of the 1987 Philippine Constitution also states that “The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare. “Likewise, Article XIII, Section 3, paragraph 2 of the 1987 Philippine Constitution proclaims that “They [workers] shall be entitled to security of tenure, humane conditions of work and a living wage.” Lawmakers from the Makabayan bloc in the House of Representatives on March 19, 2018, filed House Bill (HB) 7415, which seek to prohibit all forms of labor contractualization in the public sector, provide security of tenure and civil service eligibility to
all non-regular employees who have worked continuously for at least six months in the government. The Makabayan bloc consists of seven members: Party-list Reps. Arlene Brosas and Emmi de Jesus of Gabriela, Antonio Tinio and France Castro of ACT Teachers, Rep. Carlos Zarate of Bayan Muna, Rep. Ariel Casilao of Anakpawis and Rep. Sarah Elago of Kabataan. The government offices covered in the bill include national government agencies, local government units, state universities and colleges, government-owned and-controlled corporation, and all other government instrumentalities. A similar measure, which seeks to strengthen
I have always found similarities between the happiness I find in raising racehorses and in painting. I admire the raw strength and gracefulness with which the horses move, I marvel at their expressive eyes, shiny coats and majestic form. and the other pieces like it, I used pure globs of pastel paint over metallic and pearlized color fields to come up with “a delightful and unexpected contrast.” The third type of artistic expression in Material Maker is evident in the pieces like Rhumaker 2, which use accenting elements of line, contrasts in both color palette, texture and shapes. Francisco describes it thus: “These works create a dynamism in the contrast created by planes and shapes, as well as in the addition of new texturizing material like metallic foil, minute glass beads, different earths such as pulverized volcanic rock and sand.”
Racehorses and art
I have always found similarities between the happiness I find in raising racehorses and in painting. I admire the raw strength
“Labor contractualization blatantly violates the worker’s right to security of tenure. Many of the contractual workers have worked for 20 years or more and were made to perform regular agency functions, yet were never regularized. Aside from having no security of tenure, contractual workers have no or lower benefits, no social insurance protection, no right to self-organization, no promotion opportunities, have higher withholding taxes and become targets of discrimination at work.” the security of tenure of workers in the private sector, has been approved on final reading. The Explanatory Notes to HB 7415, cites the following rationale for the bill: “In the public sector, according to the Inventory of Government Human Resources as of July 1, 2016, there are 721,282 contract of service [COS], job orders [JOs], casual and contractual workers out of the 2,301,191 government employees. This figure is more than twice the 282,586 contractual workers in the public sector in 2008. Top agencies in 2016 with most number of JOs and COS include the Department of Public Works and Highways, Department of Health, Department of Social Welfare and Development [DSWD], Department of Agriculture,
and gracefulness with which the horses move, I marvel at their expressive eyes, shiny coats, and majestic form. The freedom that is experienced by the body when riding may be likened to the freedom of the mind when one is in the flow of painting. The grace of movement and the grace by which the artist’s hand brings forth beauty are parallels that have not escaped my notice. To be able to raise champion racehorses, one needs to carefully select the mare and the stallion, train the horse consistently and groom it carefully. In painting, on the other hand, the artist also meticulously chooses the elements that go into the work (paints, varnish, finishes), frames it well, and presents it in the most appropriate venue for an appreciative audience. The process of creating something magnificent may be long and tedious, but is definitely filled with passion and dedication to both process and outcome. Therefore, I present you with an invitation to come and see my new works for Material Maker, my second solo art exhibition, at the Pinto Art Museum starting April 15. It would be my pleasure and honor to meet you there.
Department of Transportation and Department of Education. “Contractualization is so prevalent that non-regular workers comprise a significant portion of the government’s work force. From around 10 percent non-regular employees in the 1990s, the contractuals comprise more than 31 percent of the government employees in 2016. “In the DSWD alone in 2013, contractual workers comprise 20,480 out of the total 25,589 employees, or 81.44 percent of the agency work force.” “In another case, in the country’s premier public tertiary school, University of the Philippines, in 2012, 44 percent of the employees are contractual. In the University of the Philippines—Philippine General Hospital as of January 2018, 1,614 out of 4,461 health workers or 36.18 percent are contractual, job-order, casual or temporary workers. “Labor contractualization blatantly violates the worker’s right to security of tenure. Many of the contractual workers have worked for 20 years or more and were made to perform regular agency functions, yet were never regularized.” “Aside from having no security of tenure, contractual workers have no or lower benefits, no social insurance protection, no right to self-organization, no promotion opportunities, have higher withholding taxes, and See “Kapunan,” A11
www.businessmirror.com.ph
Opinion
Be compliant
What now, losing original proponent?
BusinessMirror
By Alberto Agra
Joel L. Tan-Torres
PPP Lead
DEBIT CREDIT
A
ttention all Certified Public Accountants (CPAs) in the audit practice and working in the private enterprises. Are you compliant with all the regulatory requirements as you are rushing to finish your financial statement and tax returns for 2017 that are due on April 16, 2018, (since the regular deadline of April 15 falls on a Sunday, thereby making the next working day as the last day for completing all the regulatory filings)? Perhaps a number of the CPAs are not that compliant. The Board of Accountancy (BOA) Resolutions 03-2016 and 68-2016 pertaining to the preparation of the Compilation Certificate by CPAs continue as regulatory requirements for the preparation of Financial Statements (FS) for 2017. This requirement for CPAs on the preparation and attachment of the Certificate of Compilation with the audited FS, that started for 2016 FS, continues for the FS for 2017. There are more than 6,000 accredited CPAs in commerce and industry, as well as over 8,200 CPAs in public practice, who are doing these compilation requirements and services required under BOA Resolutions 03-2016 and 68-2016. Business enterprises that have gross revenues exceeding P10 million for the year are covered by these rules. The coverage of the compilation services and the responsibilities of the CPA in terms of the services rendered and the issuance of the certificate are essentially covered and discussed in the Philippine Standard on Related Services 4410 (Revised), Compilation Engagements. These are the guidelines that can guide both the CPAs in commerce and industry and the auditors in public practice hired by non-audit clients in performing the compilation services. All external auditors of all companies and persons should bring to the attention of the management of their audit clients any instance(s) of omissions or noncompliance with the provisions of BOA Resolutions 03-2016 and 68-2016, including failure of the audit client to have a duly accredited CPA who is responsible for preparing the FS, the nonattachment of the Certificate in the annual statutory FS. Pursuant to BOA Resolution 682016, all external auditors should notify the BOA of these client violations within one month from the conclusion of the audit engagement. It is incumbent on the external auditors to comply with this reporting that the BOA mandates, with sanctions being imposed on those auditors who do not follow these requirements of law and rule. There will be more detailed rules that will be issued soon that will provide for the sanctions that will
Kapunan. . .
continued from A1o
become targets of discrimination at work. “Yet, to the disappointment and rage of workers in the private sector, the Department of Labor and Employment on March 16, 2017, issued Department Order 174-17 ‘Rules Implementing Articles 106 to 109 of the Labor Code as Amended,’ which, according to many labor groups, supposedly prohibits laboronly contracting but still allows job contracting, thus further promoting and legitimizing contractualemployment schemes.” “The Civil Service Commission, Commission on Audit and Department of Budget and Management followed suit with the issuance of Joint Circular 1, s.2017 on June 15, 2017, regarding ‘Rules and Regulations Governing Contract of Service and Job Order Workers in the Government.’ Like DO 174, Joint Circular 1 further legitimizes labor
be imposed on violations or noncompliance. These violations include: (1) a covered enterprise filing its FS with the regulatory government offices without attaching the certificate, (2) the application for accreditation of the CPA not being approved/denied because of oversight/ negligence/failure to comply with the accreditation requirement after the FS has been issued; (3) the external auditor of an audit client is the one doing the compilation services for the preparation of the FS and notes of the audit client; and (4) and any other pertinent cases. These noncompliance or violations will result in sanctions that will be imposed on either the CPA, the covered organization/person, or both. The sanction/s that may be imposed by the Professional Regulation Commission (PRC)/BOA can be: a. Reprimand of the CPA and/or covered organization/person. b. Suspension of license of the CPA. c. Imposition of fines and penalties on the CPA and/or covered organization/person. d. Revocation of the license of the CPA. e. Requirement for the submission or resubmission of a corrected or valid Certificate to replace the defective Certificate previously issued with the imposition of the corresponding sanctions on the erring CPA. Pursuant to BOA Resolution 68-206, CPAs who have filed with the Professional Regulation Commission their applications for accreditation for CPA in commerce and industry and which are still pending in the PRC, can already sign the Certificate of Compilation. They will just need to indicate in such certificate the information that “application filed on [date] and pending in PRC.” My advise to my fellow CPAs, be aware and comply. Joel L. Tan-Torres is the chairman of the Professional Regulatory Board of Accountancy. He is a Certified Public Accountant who placed No. 1 in the May 1979 CPA Board Examinations. He was the former commissioner of the Bureau of Internal Revenue from 2009 to 2010. This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@gmail.com.
contractualization and provides no guarantee for the security of tenure for non-regular workers in the public sector.” “The joint circular stressed that Jos and COS workers in government agencies have no employee-employer relationship thus have no right to any benefit for government employees. This is despite the court ruling on the MWSS-COS employees case on June 30, 2005, that JOs and COS workers are de-facto employees of the government. Worse, the circular provides that starting from the year 2019, government agencies may only avail of outsource services through institutional contract of service or subcontracting.” (Explanatory Notes, H.B. 7415) Two years into the Duterte presidency, contractualization remains widespread both in the public and private sector. Hopefully, on Labor Day in May this year, the President will finally make good his promise of ending endo or labor contractualization. Let this be the test of his political will.
Continued from A1
A
PSP becomes an OP, according it certain rights, after its UP has been accepted by the IA under the BOT law or PPP template ordinance for local governments; or after successful negotiations under the 2013 Joint Venture Guidelines issued by the National Economic and Development Authority (Neda JV Guidelines). Failure, i.e., not getting the PPP contract, happens when the OP, depending on the governing rule, is not able to match, exceed, tie or outbid a superior offer from a challenger-PSP. After losing, the PSP must reflect on the reason(s). Underestimating the competition and overestimating
one are related reasons. Offering the maximum at the beginning is another. Failure could also be attributed to ignorance of the process or not doing an exhaustive due diligence. Also, noninclusion of a technological advantage or proprietary right could be another ground.
Monday, April 9, 2018 A11
In terms of rights, the losing OP has limited entitlements. n Right to be reimbursed. Under the Neda JV Guidelines, the winning challenger may reimburse the losing OP. The OP loses when its first or second financial offer is lower than the offers of challengersPSPs. In other countries, reimbursement may be made by the IA. The BOT law and its implementing rules have no such similar provision but an IA can stipulate one in the terms of reference. The Neda JV Guidelines, however, does not provide for the mechanics. It is suggested that the OP be required by the IA to declare and substantiate its expenditures prior to the commencement of the challenge process. It is also proposed that the verified amount be stated in the terms of reference of the challenge to apprise the would-be challengers of the amount it will reimburse in the event it gets the project. This ensures accountability,
Peacekeepers and faith movers Siegfred Bueno Mison, Esq.
THE PATRIOT
W
hen I visited New York a few weeks ago, I met up with two of my Philippine Military Academy (PMA) classmates who have served in peacekeeping missions for the United Nations while in the Philippine Army. Arnold Altuna is an Army Scout Ranger who has led various counterinsurgency operations in Isabela, Bicol and Quezon. He served as a field security coordination officer of a UN special political mission in Kunduz, Afghanistan up to June 2017. He survived two near-death experiences while in the said city, the first and only major Afghan urban center to have fallen to Taliban hands since 2002. Previous to this, he also had an 18-month tour in Northern Iraq. He is now back at UN Headquarters in New York as a technical staff responsible for the security of UN operations in eight African countries. Eugene Gepte was a member of the Army Corps of Engineers. His unit has built several buildings, schools, bridges and other infrastructure to help communities in Southern, Central and Northern Luzon where other Army units oper-
ate. Years back, he served as a staff officer of a UN peacekeeping mission in Liberia and at UN Headquarters in New York. He now works in Central Darfur, Sudan as sector head, Joint Operations Centre Jebel Marra Task Force of the UN Hybrid Mission in Darfur. While heading a UN-interagency assessment mission in the rebel-held Jebel Marra Mountain, Eugene had a freak accident, which caused serious neck injuries. He had to be medically evacuated to the US for a major operation if only to save him from being paralyzed. I never had the chance to work with Arnold and Eugene when I was in the Army for 12 years. But I was pleasantly surprised when I learned that both are ardent believers of God. Amid all the fighting in these aforementioned conflict-stricken countries, both Arnold and Eugene kept faithful to His Word.
The new power structure By David Brooks
New York Times News Service
O
nce upon a time, power was held in the hands of a small elite. This elite occupied the commanding heights of society and controlled big, top-down organizations. It dropped products and messages from on high, and the rest of us passively consumed them. Then along came the Internet. Suddenly, information was dispersed across self-organizing, open-source networks of citizens who had the ability to collaborate, share and shape their world. Hierarchies were smashed, the wisdom of crowd was applied and transparency reigned. OK. That didn’t really happen. The first dreams of the tech revolution didn’t come true. Sometimes it seems power was just redistributed from one set of massive organizations to others—Amazon, Facebook, Spotify. But something has changed. We have seen an explosion of new social organisms that don’t look like the old ones: Airbnb, Etsy, Black Lives Matter, #MeToo, Blockchain. If power in the Greatest Generation looked like Organization Men running big institutions, and power for the boomers looked like mass movements organized by charismatic leaders like Steve Jobs and Barack Obama, power these days looks like decentralized networks in
which everyone is a leader and there’s no dominating idol. Power structures are in serious flux. The best window I’ve seen into this new world is a book called New Power, by Jeremy Heimans and Henry Timms. Heimans is the CEO of Purpose, which supports social movements around the world. Timms is executive director at New York’s 92nd Street Y, a 144-year-old institution; he also helped create Giving Tuesday, a classic new power movement. Timms thought that after the consumerism of Black Friday and Cyber Monday, there should be a day to give back. The normal thing would have been to put the 92nd Street Y logo on the effort and organize charities and other organizations around a consortium. Instead, he and his team established the meme Giving Tuesday, created a Web page and some tools for people who wanted to organize, and they let the crowd take over. There are now Giving Tuesday or Giving something organizations in more than 100 countries. Local organizers talk directly to one another and reshape the movement as they wish. Even more than technology, what’s changed is people’s attitudes toward authority. They don’t trust it. They want to see people who look like them running things. Any movement that earns legitimacy has to spread ownership around. The Ikea effect applies: People value what they helped build.
fairness and transparency. n Right to recover proposal security. If the OP secures its proposal by paying cash or issuing a cashier’s or manager’s check, it can demand its return after the challenge event. At this point, there is no other incident or commitment that needs to be secured. However, it will have no such right if it paid premium for a surety bond. There is one right that ripens prior to the outcome of the challenge or before the determination of the successful PSP. n Right to continue through Stage 3. Before it exercises its rights as OP in Stage 3, it has the right to demand the completion of the threestage process. It acquires this right if Stage 2 is completed upon the issuance of the certificate of successful negotiations. The OP, at this point, is protected from any adverse shift in policy of the IA regardless of change in administration. So, know your rights, please.
Billy Graham, “The greatest legacy one can pass on to one’s children and grandchildren is not money or other material things accumulated in one’s life, but rather a legacy of character and faith.” A number of my PMA classmates has retired from the service and will be retiring in a few years. Most are contemplating what legacy they will leave behind for the country and their respective families. For Arnold and Eugene, they seem to prefer to leave a legacy of peace secured by faith. In the Bible, James 3:18 tells us, “Peacemakers who sow in peace reap a harvest of righteousness.” Most of us commonly misconceive that soldiers are trained to fight battles and win wars against all enemies. What we should internalize is that soldiers are trained to keep the peace by spreading kindness. Soldiers can accomplish this mission better by being more mindful knowing that their main mission is to keep the peace by spreading His Word through deeds and not win wars by overpowering the enemy. Whether in the uniformed service or not and whether in a battlefield or not, Arnold and Eugene are among my PMA classmates who can be considered as some of the wisest peacekeepers and faith movers any Army can have.
As Taliban forces overran Kunduz City and about to physically occupy the UN regional office in Northern Afghanistan, Arnold kept reciting to himself, over and over, the soldier’s “go to” Bible verses in Psalm 91. Tasked to secure personnel of various faiths and beliefs in a predominantly Muslim country, Arnold displayed his unwavering faith in Him, which led to the successful evacuation of all his 100 colleagues. Arnold’s trust in God allowed him to fulfill his mandate that day, which was conducted in three shuttles from dawn to dusk, only to leave when all UN core staff under his watch have been safely flown out. In the case of Eugene, he keeps on sowing the seed of goodness and peace in his capacity as a farm owner in Batangas as he named it as Genesis Re-Creation Farm for the ministry. He is guided by his favorite Bible verse, in Matthew 5:9, which says, “Blessed are the peacemakers, for they will be called children of God.” Even though he is assigned in war-torn Sudan and his family is based in New York, Eugene offers his simple and spartan farm lot to any group who wishes to hold any Christian-related retreats, teambuilding activities and learn organic farming, for free. I suppose this is Eugene’s way of keeping the peace in the Philippines. We need more peacekeepers and soldiers like my PMA classmates, Arnold and Eugene. In the words of
For questions and comments, please e-mail me at sbmison@gmail.com.
Many organizations profiled in New Power are decentralized but have wrestled with the challenges of decentralization, like: How do you establish unity of purpose amid the cacophony of voices? How do you maintain standards of excellence amid the democratization of control? How do you get loosely affiliated people to commit long term, so your movement won’t fizzle out, the way the Ice Bucket Challenge did? Heimans and Timms emphasize that the best organizations try to blend old and new power structures. These organizations are often founded by what you might call disappearing organizers. Somebody comes up with a compelling concept, like TED or Black Lives Matter. The concept gives people a sticky group identity; many people think of themselves as Tedsters. The core idea is spreadable, actionable and connected—it allows participants to subcreate in local and flexible ways. Tedsters organize and attend more than 20,000 local TEDx events. The founder doesn’t dominate the network so much as manage the community. Successful movements create what Marilynn Brewer calls “optimal distinctiveness”—as Heimans and Timms put it, “making people feel like they are part of it and that they can stand out in it.” The concepts binding these movements are clear, emotional and concrete and have an implied communal narrative (MeToo). But the successful
organizations also feature some structural innovation. They tend to have very low barriers to entry—no dues, no loyalty pledge up front. But they have ways to incentivize members up the participation ladder, offering premiums for superparticipants who adapt, organize and share. The Lego company sets up special events and an ambassador network for its highly dedicated Afols (Adult Fans of Lego). At the Dutch news organization De Correspondent, journalists share story ideas with subscribers before they write them, so they can harvest community knowledge. Heimans and Timms point out that Donald J. Trump also blends old and new power. He may talk like an authoritarian—only I can fix this—but his actual campaign structure was a loose network of self-organizing activists. Trump is what they call a “platform strongman”—someone who marshals dispersed participants on behalf of centralizing ends. The last few decades have been a social trust apocalypse. The only remaining bonds of trust are local and particular. But people are ingenious. They are figuring out how to build on those ties to weave and redeem the broader social fabric. I realize my column these days is bipolar, wildly optimistic or pessimistic. But I guess that’s appropriate, since the forces tearing society apart are powerful and the people bringing it together are, too.
2nd Front Page BusinessMirror
A12 Monday, April 9, 2018
Clark-Naia dual-gateway strategy best option for PHL–GMR-Megawide C
By Ashley Manabat | Correspondent
LARK Freeport, Pampanga—The best option for the Philippines’s aviation scene would be to build a gateway in the Clark Freeport complex as a main entry for all international travels, and to rehabilitate the Ninoy Aquino International Airport (Naia) as a potential secondary airport in the future, an official of a consortium vying for the right to redevelop the Naia said.
HARRISON: “The best option would be to give priority to building an express rail link between the two airports.”
on the solution,” Harrison said. In its proposal, pegged at $3 billion, GMR-Megawide plans to construct full-length parallel taxiways for both of the Naia’s runways, construct an additional rapid-exit
percent to 60 percent. “Within 24 months of taking over operations, the consortium also plans to rehabilitate and expand the existing terminals, which will roughly double the space and result in over 700,000 square meters of terminal area,” the consortium said. Once completed, both the airside facilities and the terminals will be able to handle a total annual throughput of 72 million passengers. GMR-Megawide also proposed an 18-year concession term for the Naia. GMR-Megawide submitted the
Speaking before the Capampangan in Media Inc. (Cami) forum at the Clark Freeport in Pampanga, Andrew Harrison, chief executive advisor at Megawide-GMR consortium, said having the Naia and Clark operate as twin international gateways to spread air and passenger traffic and thereby ease their respective loads would be the best option for the Philippines. “The best option would be to give priority to building an express rail link between the two airports,” he suggested.
‘Sustainable multi-airport system’
Listed construction and engineering firm Megawide Construction Corp. and its consortium partner Bangalore-based GMR Infrastructure Ltd. submitted last month a $3-billion unsolicited proposal for the rehabilitation and decongestion of the Naia. Harrison said the proposal is “aligned with the government’s strategy to develop a sustainable multi-airport system in the Philippines.” The consortium was also recently awarded the Engineering Procurement Construction contract for upgrading Clark International Airport. The contract value is P9.36 billion, around 25 percent lower than the government budget of P12.55 billion. Completion is expected by 2020. Cur rent ly, Megaw ide- GMR is building Terminal 2 of the Mactan-Cebu International Airport, a previously obscure facility that has
HIDDEN PARADISE Sampaloc Cove, which is at the southernmost tip of Subic’s Redondo Peninsula, is a hidden paradise in Zambales that foreign and local tourists can visit this summer. It is about a 30-minute drive via speedboat from Subic Bay Freeport. NONOY LACZA become the Capa Center for Aviation 2016 Best Regional Airport in Asia Pacific. The Indian infrastructure firm and airport operator GMR claims of transforming Delhi International Airport, once rated among the world’s worst airports, into being No. 1 in the Airport Service Quality survey of Airports Council International. “As an experienced private operator, we have a deep understanding of the problem experienced by the Naia and we would like offer our take
taxiways for the primary runway extend the secondary runway, and provide the maximum number of aircraft stands. GMR-Megawide said the solutions will increase airfield capacity to 950 to 1,000 aircraft movements per day, a 30-percent to 35-percent increase from the current 730 aircraft daily. For peak hours, the consortium will increase the Naia’s aircraft-handling capacity by 50 percent, or from the current 40
proposal weeks after seven of the biggest Philippine companies filed a P350-billion proposal to rehabilitate the Naia and tapped the assistance of Singapore’s Changi airport. Members of the so-called super consortium are conglomerates Metro Pacific Investments Corp., Aboitiz Equity Ventures Inc., Alliance Global Group Inc.,Ayala Cor p., Filinvest Development Corp., JG Summit Holdings Inc. and LT Group Inc. See “Clark-Naia,” A2
DOT enlists PwC to arrest flagging tourism investments Continued from A1
the Duterte administration is supposed to allocate some P2.3 trillion to encourage tourism investments in the Philippines. So far, that effort has yet to bear fruit. Data from the Philippine Statistics Office (PSA) show that the Board of Investments and Philippine Economic Zone Authority approved some P931 million in foreign direct investments (FDI) in accommodation and food-service activities from January to September 2017. The figure, however, is a massive 77-percent fall from the P4.03 billion approved in the same period in 2016. In an interview with the BusinessMirror, Jimenez said: “We will be undertaking joint research, encouraging investments in tourism destinations.” She added that under the MOU, the tourism agency will be able to “reproduce” the private firm’s existing guidebooks on investing in
Philippines destinations, which at present includes Cebu, Iloilo, Cagayan de Oro-General Santos City, Davao, Bacolod and include a section on tourism investments. “We will then hand these out to during travel and trade exhibitions abroad,” she said. Tourism as a strategy to reduce poverty in developing countries contributed 8.6 percent of the Philippine economy in terms of GDP in 2017, and employed 5.2 million Filipinos, making up 12.8percent of the country’s total work force that year. Last year’s tourism investments were buoyed by locals, such that total approved investments (Filipino residents and foreigners) accrued to P9.6 billion, a 23-percent drop from the January-toSeptember 2016 investment of P12.57 billion, according to data from the PSA. Jimenez signed the MOU on behalf of the DOT, while PwC Chairman Alexander Cabrera signed for the accounting firm. The other
initiatives include sharing of information, expertise and technical assistance, organizing and undertaking activities to improve investment- readiness and attractiveness. As this developed, the DOT welcomed Forbes.com’s citation of the Philippines as one of the hottest spots in Asia this year. The opinion piece, titled “The 5 Spots in Asia that are Booming with Tourists in 2018” by contributor Carol Ramoran Malasig, underscored the country’s improved connectivity and infrastructure as major factors in increased visitor interest. Other countries cited in the piece are Japan, Malaysia, Indonesia and South Korea. “To be ranked with the region’s tourism powerhouses is a testament to the resiliency of the people and the country’s resolve to promote the Philippines as a safe and fun destination,” Tourism Secretary Wanda Corazon T. Teo said in a news statement. According to the piece, “new
international connections are opening up with Qatar Airways recently announcing new regular flights from Doha to Cebu and Davao, adding to their existing flights to Manila and Clark. The airline flies from Munich, Berlin and Frankfurt, and other major European cities.” It also said: “With recent improvements in local infrastructure, top tourist destinations are now being served by domestic airports with frequent flights to and from the country’s major cities.” Several international gateways were renovated last year, with the government planning to develop or upgrade other regional airports like the Iloilo International Airport, Bacolod-Silay Airport, Laguindingan Airport in Misamis Oriental and New Bohol International Airport in Panglao. T he Phi l ippines welcomed some 1.4 million foreign visitors in the first two months of 2018, up 16 percent from the same period in 2017.
www.businessmirror.com.ph
REGULATORS DEBATE ON HOW TO IMPLEMENT COMPETITION BODY’S INTERIM MEASURES By Lorenz S. Marasigan @lorenzmarasigan
T
he buyout deal between Grab and Uber in the Philippines has left two regulators debating on the viability of the interim measures that the country’s competition watchdog wants implemented while its review is in progress. Land Transportation Franchising and Regulatory Board (LTFRB) Board Member Aileen B. Lizada said the agency is quite puzzled as to how the parties involved in the transaction would implement the measures set by the Philippine Competition Commission (PCC). The antitrust body issued late Friday the interim measures that will be put in place to ensure that the integrity of the motu propio review is preserved. In a nutshell, the commission ordered the parties to temporarily stop the consummation of their March 25 deal. The most striking of the seven points that the competition commission issued was the continuation of Uber’s independent operations in the Philippines. “On the part of directing Uber to maintain its apps independently, the paramount concern of LTFRB is the riding public because, as disclosed by Uber during the hearing at PCC, they don’t have funds, grants and employees here in the Philippines anymore,” Lizada said. During Thursday’s public hearing at the PCC’s headquarters, Uber Chief Business Officer for Asia Pacific Brooks Entwistle said funding for the Philippines has already been pulled out by its mother company in the United States. “So, who will be funding now the business operations of Uber? Who will take the blame if an Uber
driver gets involved in road crashes, and the complaints?” Lizada said. To recall, Uber and Grab entered into a buyout deal, wherein Grab will get the assets of Uber in Southeast Asia, while Uber gets a 27.5-percent stake in Grab. The Philippine units of Uber and Grab are included in the deal. But for PCC Chairman Arsenio M. Balisacan, Uber is more than capable of operating its ride-hailing app in the country, despite its claims that it has already exited the Southeast Asian market. “Uber is highlighting its exit, but what it does not emphasize enough is its integration with Grab. Thus, Uber is not truly exiting the Philippine market but, rather, effectively merging their operations with Grab here. The deal makes Uber a part-owner of Grab,” he said. The parties also have to maintain their business operations and other conditions prevailing prior to March 25, which include, among others, ride-hailing and delivery platforms; pricing and payment policies, including incentives and promotions to riders; product options; customer and rider database; and onboarding of new partner drivers, as well as fees, charges and incentives to partner drivers. Likewise, the parties are to refrain from providing access to confidential information, such as pricing, formula, incentives, operations, marketing and sales policies, promotions, partner drivers and customers, to each other. They are, likewise, ordered to stop from imposing exclusivity clauses, lock-in periods and/or termination fees, and from performing any act that may lead to reduced viability and salability of the parties’ businesses. See “Regulators,” A2
MRTDEVCO LOSES RIGHTS TO MRT 3 ADS, LEASING Continued from A1
MRTDevCo since 2004. The DOTr then sent a final demand to the MRTDevCo for the payment of its outstanding DRP obligations in the accumulated amount of P2,298,788,929.52. The DOTr warned of termination of the BLT agreement, even as it expressed its willingness to commence arbitration, as mandated under the BLT agreement. This prompted the MRTDevCo to file before the RTC in Pasig City a petition for interim measure protection (IMP) with extremely urgent prayer for the issuance of a temporary order of protection. It claimed that the then-DOTC’s refusal to issue access and work permits to allow entry to the MRT 3 system unlawfully hampered its exercise of its commercial leasing rights under the BLT and its subsequent agreements. On the other hand, the DOTr, through the Office of the Solicitor General, sought the dismissal of the case, insisting that the Philippine courts have no jurisdiction over the issue, since under the arbitration clause in the BLT, any dispute between the parties should be settled through arbitration in Singapore. However, in its assailed order, the Pasig RTC granted MRTDevCo’s petition and held that under Rule 5.2 of the Special Alternative Dispute Resolution Rules, a petition for IMP may properly be issued before arbitration is commenced. However, the CA held that while the arbitration clauses in the 1997 BLT Agreement do not strip Philippine courts of jurisdiction over the grant of interim measures to protect the rights
of parties in arbitration agreement before or after the start of arbitral proceedings, the Pasig RTC committed grave abuse of discretion in issuing the preliminary mandatory injunction in favor of MRTDevCo. The CA noted that in this case, the “last actual, peaceable and uncontested status” before the dispute arose was the free and unhampered access by the MRTDevCo to the MRT 3 System, as long as it was fully and faithfully paying DRPs for the continued exercise of its development and advertising rights. “The RTC’s issuance of the IMP, which allows the MRTDC’s [MRTDevCo] exercise of development and advertising rights without the payment of DRPs, altered the balance of the parties’ contractual equilibrium, as it effectively allows the MRTDC the exercise of its rights while the existence of its correlative obligations is disputed and awaits settlement by arbitration,” it pointed out. The CA explained that under Rule 5.9 of the Special ADR Rules, the court, in determining whether to grant interim measures, shall “balance the relative interests of the parties and inconveniences that may be caused” to the parties. “This balance of interests of the parties in this dispute is preserved, not by providing provisional relief to one party to the controversy, but by encouraging them to resort to the dispute-resolution mechanism they have mutually elected, where all their claims may be arbitrated,” the CA added. Concurring with the ruling were Associate Justices Ramon Bato, Jr. and Ramon Cruz.