BusinessMirror April 10, 2018

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Tuesday, April 10, 2018 Vol. 13 No. 178

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@akosistellaBM Special to the BusinessMirror

IONEERING flag carrier Philippine Airlines (PAL) may have to forego at least $50 million (P2.6 billion) in revenue from its charter operations in China and South Korea, following the announced six-month closure of Boracay Island.

Diokno’s initiatives at wise and honest spending Manny B. Villar

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THE ENTREPRENEUR

ased on what he’s done and still doing, I would say two words serve as Budget Secretary Benjamin E. Diokno’s primary guidelines in managing the huge government-spending program: efficiency and honesty. A third word—reform—is the platform to achieve both efficiency and honesty. Needless to say, this is also what should guide any administration, if it were to achieve its mandate of spending its revenues for the benefit of the citizens it serves.

D iok no’s pr i m a r y g u ide l i nes a l so f it i nto P resident Duterte’s commitment to eliminate the destructive factor of corruption in utilizing tax and other revenues for public services, including infrastructure. Continued on A10

PESO exchange rates n US 52.1280

$100M Philippine Airlines’s revenue from its Boracay charter operations in 2017

In a phone interview with the BusinessMirror last year, PAL President and COO Jaime J. Bautista said, “We earned $100 million from our charter operations,” adding, “we have the same number of Continued on A2

It’s now a Duterte-Sereno face-off SERENO: “Is that the way it is, President Duterte? That I should be removed either by quo warranto or impeachment?”

DUTERTE: “I told you, Sereno, I did not have a hand in it. If you are insisting, then count me in. Count me in, and I will egg Calida to do his best.”

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he cards have been laid on the table. Chief Justice Maria Lourdes A. Sereno insists President Duterte is the unseen hand in the move to oust her, to which the Chief Executive countered: “Count me in!”

In a news briefing before leaving to China to attend the Boao Forum for Asia in Hainan province, Duterte said Sereno is now his enemy and that she has to be out of the Supreme Court (SC). See “Duterte-Sereno face-off,” A2

Meat producers, importers start lobby process for MDM tariff By Elijah Felice E. Rosales

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@alyasjah

obbying for the removal of concessionary tariff rates for meat products has intensified, with the local producers of meat now pressing the government not to heed Washington’s recommendation for Manila to retain the lower duties on

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PAL stares at $50-M loss from Boracay charter ops By Ma. Stella F. Arnaldo

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certain farm products even with the imminent tariffication of rice trade. Trade Secretary Ramon M. Lopez said he will push for the permanent enforcement of the reduced rates under Executive Order (EO) 23 which will make permanent the 5-percent tariff on mechanically deboned meat (MDM).

Continued on A12

Corruption in 2018: will we see change? By Henry J. Schumacher

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ver the last two years, scandals unveiled by the publication of the Panama and Paradise Papers grabbed headlines, shocking citizens and shaming the corrupt. These scandals made prominent an ugly truth—that corruption and unethical practices undermine the benefits of globalization by exacerbating inequality, deterring investment and distorting competition. These revelations showed an urgent need to strengthen public integrity, double down on anticorruption reform, create a level playing field for businesses, and close legislative loopholes. Moreover, they demonstrated the need to rebuild trust between governments and citizens. 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 )

BMReports BusinessMirror

A2 Tuesday, April 10, 2018

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PAL stares at $50-M loss from Boracay charter ops Continued from A1

charter flights this year.” President Duterte has approved the closure of the popular resort-island from April 26 to October 26, 2018, ostensibly to make way for its rehabilitation. PAL has 28 charter flights per week to Kalibo from China and South Korea: Beijing to Kalibo (three times a week), Busan-Kalibo (four times weekly), Chengdu-Kalibo (four times weekly), Nanjing-Kalibo (three times weekly), Seoul/Incheon-Kalibo (14 times weekly). The carrier also has charter flights

between Taipei, Taiwan and Kalibo, but the frequency varies, usually two times per week, and there are occasional flights from Hangzhou to Kalibo. A six-month closure of Boracay means half of PAL’s scheduled charter flights to and from Boracay for the year may be canceled. But Bautista was quick to point out that the total financial impact of Boracay’s closure on PAL has yet to be fully quantified. “I’m still asking our staff to finish their computations, as I have to present this to the board.” Yet he is hopeful that the island’s closure won’t make a big dent on the air-

Duterte-Sereno face-off. . .

He, thus, ordered House Speaker Pantaleon D. Alvarez and the Congress to fast-track the impeachment of the Chief Justice. Sereno, meanwhile, publicly tagged Duterte as the one orchestrating the moves to remove her as the country’s chief magistrate. Sereno made the accusation in her speech before the organizers and members of the Movement Against Tyranny during its celebration of the Araw ng Kagitingan in Quezon City. “Mr. President, if you say that you have no hand in this, please explain why Solicitor General [Jose C.] Calida, who reports to you, filed the quo warranto,” she told the crowd. “Is that the way it is, President Duterte? That I should be removed either by quo warranto or impeachment?” Sereno was referring to her impending impeachment trial before

Capa. . .

Continued from A1

the Senate, as well as the quo warranto petition filed by Calida before the SC, seeking the nullification of her appointment as Chief Justice. The President initially reiterated what he already told Sereno, that he does not have any involvement in her impeachment case. He, however, had this to say later: “I told you, Sereno, I did not have a hand in it. If you are insisting, then count me in. Count me in, and I will egg Calida to do his best.” “I will see to [it] and after that I will request Congress, go into the impeachment right away, because the two entities can hear it simultaneously. They can proceed with the quo warranto. Quo warranto is handled by the Supreme Court and impeachment is handled by Congress,” he said. “So that I’d ask Speaker Alvarez now, kindly fast-track the impeachment. She

Continued from A12

Busuanga and Caticlan, and a limited service between Cuyo and Caticlan. Philippines AirAsia has yet to release official route plans for its Kalibo and Caticlan operations, but its chief executive said flights will also be scaled down. “The impact of Boracay closure on our operation is almost insignificant compared to its effect on our guests, especially those who have saved up their money to be able travel this summer,” Philippines AirAsia CEO Dexter Comendador said in a text message.

line’s entire finances for 2017. “Profitability will be affected only if we are not able to transfer passengers to other destinations,” he explained. Listed firm PAL Holdings Inc. posted a net income loss of P3.2 billion in the third quarter of 2017, widening by 63 percent from its net income loss in the same period in 2016. In a text message, PAL Vice President for Marketing Ria C. Domingo said they have launched a marketing effort to encourage their Chinese and Korean clients to go instead to Cebu, Palawan, Dumaguete, Davao, Siargao, Coron and Batanes.

is bad for the Philippines.” He also asked Congress: “What is taking you so long?” “Now this time, I’m asking the congressmen and the Speaker, do it now,” he added. “Or else, I will do it for you.” A quo warranto petition, as provided in both Section 5(1), Article VIII of the Constitution and Rule 66 of the Rules of Court, challenges the legal basis of one’s appointment and seeks the removal of the respondent from office because of lack of qualification or legal basis to continue holding such office. The solicitor general argued that Sereno did not meet the specific qualification of proven integrity for the chief justice post with her failure to comply with the required submission of 10-year Statements of Assets, Liabilities and Net Worth. The chief magistrate even branded as an evil act the filing of the quo warranto petition.

Other routes get more frequencies

To lessen the blow of the reduced flights, all three carriers are increasing the frequencies of their other domestic routes. Starting on April 20, PAL will deploy additional f lights on routes between Manila and Cebu, Iloilo, Puerto Princesa and Bacolod. By April 26 the legacy carrier will also increase flights between Cebu and Busuanga (Coron), Cebu and Siargao, as well as between Clark and Busuanga. Starting on April 28, it will increase flights between Cebu and Clark, and by May 1, the carrier will add flights between Manila and Dumaguete, and Cagayan de Oro.

Last year PAL carried 950,000 passengers to Kalibo and Caticlan. Assuming 70 percent of the passengers went to Boracay, Bautista said, at least 332,500 of the airline’s passengers will be impacted by the six-month closure this year. For Cebu Pacific Airways (CEB), “over 200,000” of its passengers will be affected by the six-month closure of the island, said Charo Logara Lagamon, the airline’s director for corporate communications. She added this figure “includes charters and foreigners on connecting flights.” She said that canceled/foregone charters

“Filipinos are smart. They understand. You do not need to spell out the truth for them…. It can’t be denied that there is an unseen hand behind this,” the Chief Justice said. Sereno even hinted there may be money involved in the bid to oust her, which could run up to a billion. “Napakademonyo ng ginagawa nila [What they’re doing is so evil].” Sereno believes that the President is seeking her ouster because of the letter she sent to him in August 2016, where she sought due process against members of the Judiciary who are accused of involvement in the illegal-drugs trade. The Chief Justice had also spoken against human-rights violations attributed to the administration’s anti-illegal drugs war. But Sereno stressed that she will not give in to this “bullying.” “We are not destined to slavery but to freedom. What is evil, we denounce, what is good, we affirm,” she vowed.

“As we redirect our passenger market flows to these other key PAL destinations, PAL anticipates that the additional flights will help increase demand and spur economic activity for the benefit of the travel and tourism communities in various regions of the country,” PAL President Jaime J. Bautista said. Philippines AirAsia, according to Comendador, will also provide its passengers “flexible options so as not to disrupt their holiday plans.” “We are adding several flights to Cebu, Davao, Palawan, Bohol, Iloilo and other leisure destinations for our guests to choose from,” he said.

from China account for “roughly 20 percent of CEB passengers from mainland China.” She couldn’t reveal the exact figure yet, however. CEB has 16 daily flights between Manila and Caticlan; one daily Cebu-Caticlan; one daily Clark-Caticlan; and two times a week Kalibo-Manila, and Cebu-Incheon. PAL, CEB and AirAsia Philippines recently announced a massive scale-down in their flight operations to Kalibo and Caticlan. Air Juan has canceled all its flights between Caticlan and Tagbilaran, Cuyo and Busuanga.

Sereno made the remark a day before the scheduled oral argument on the quo warranto petition, where she is expected to appear before her fellow magistrates and answer their questions in relation to the allegations made in the petition. Prior to this, Sereno sought the inhibition of five of the SC magistrates, whom she perceived as prejudiced against her. In her speech, Sereno even cited Associate Justice Teresita Leonardo-de Castro, whom she accused of having ill will against her. Sereno recalled de Castro asking her not to accept the Chief Justice nomination in 2012 and later on telling her: “I will never forgive you for accepting the CJ-ship.” Aside from de Castro, Sereno also sought the inhibition of four other justices—Associate Justices Diosdado Peralta, Lucas Bersamin, Francis Jardelez and Noel Tijam— in the quo warranto case. But all five justices are expected

Cebu Pacific Director Charo M. Lugarta said the company will also reallocate the planes used for Kalibo and Caticlan to other destinations. “We will redeploy capacity to other routes. We will provide updates on the additional frequencies as soon as possible,” she said in a text message. The carrier will redeploy its planes to Bacolod, Cagayan de Oro, Cebu, Davao, Iloilo, Legazpi, Puerto Princesa, Tacloban, Zamboanga and Tawi-Tawi.

Promote other destinations in Northern Panay

A side f rom promot ing a lter nat ive

to deny Sereno’s inhibition pleas against them. In Tuesday’s oral arguments that will be held in Baguio City, where the justices are holding their so-called summer sessions, Sereno was required to personally appear to “testify under oath” and “verify under oath the truth and veracity of the allegations in the comment filed by counsels supposedly on her behalf.” In her answer, the Chief Justice asked the SC to dismiss the petition on technical grounds, particularly for lack of jurisdiction and violation of the one-year prescription period for filing such case. Sereno, who has gone on indefinite leave to prepare for her impending impeachment trial, insisted that the SC has no jurisdiction and authority to remove her from office because the 1987 Constitution provides that she could only be ousted by impeachment in Congress as an impeachable official. Joel R. San Juan and Bernadette D. Nicolas

destinations outside Boracay, San Miguel Corp. President Ramon S. Ang recommended the development of tourism in Caticlan and Nabas. He explained that all concerned sectors, including the government, businesses, developers and its residents, “must also look beyond the island and move to disperse tourism to nearby municipalities, such as Caticlan and Nabas.” This, he said, would result in higher tourism revenues for the whole of Aklan province, more jobs for locals and increased competitiveness of the Philippines as a tourist destination. More significantly, it will also allow for the decongestion of Boracay island, Ang added. San Miguel operates the Caticlan Airport. Aside from this, Ang said the government must also develop a bridge that will link Caticlan and Boracay. This, he added, is a “novel approach” to solve Boracay’s environmental woes and bring about growth to other areas in Aklan “Tourists and visitors will have the option to go to Boracay during the day and in the afternoon or at night for accommodations outside the island,” he said. The accessibility of Boracay, through the proposed bridge, would enable developers to build hotels and resorts outside the island. These can be premiere destinations in their own right, as these areas also boast of beautiful beaches and coastlines. Some new establishments, on the other hand, can be positioned as alternative or more affordable accommodations for tourists. At the same time, accommodations for workers can also be built. With this, thousands of tourism workers from neighboring provinces, would also no longer need to reside in Boracay and contribute to the growth in population and, as a result, waste. “ The development of neighboring areas would boost Aklan’s economy as a whole, while keeping island of Boracay sustainable for generations to come,” Ang explained. The construction of a bridge could also solve the garbage and sewage problem on the island and can be used as a safe way to deliver sewage via pipes, which would be built into the bridge design, out of the Boracay, Ang said. The closure of the island will also cost about 0.1 percent of the country’s GDP, according to the National Economic and Development Authority, displacing about 7,735 workers, who will then be assisted by the Department of Labor and Employment.

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BusinessMirror

Tuesday, April 10, 2018 A3

A4 Tuesday, April 10, 2018 • Editor: Vittorio V. Vitug

The Nation BusinessMirror

Lawmaker critical of Duterte warns of demoralization in AFP, PNP ranks

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By Butch Fernandez

@butchfBM

ing a “final peace deal” with communist rebels under the Duterte administration. A former Navy officer before switching to lawmaking duties as a member of the Senate, Trillanes claimed the aim of leftist leaders in the Duterte Cabinet is simply “to gain advantage as the Armed Forces pull back to give way to the peace process, and then the rebels can regroup.” The senator recalled that, soon after assuming the presidency, the tough-talking Duterte showed signs of being soft on the rebels. At the same time, Trillanes suggested that, while the peace pricocess can be localized “the problem is President Duterte.”

‘Let’s honor the sacrifices of our World War ll heroes’ By Rene Acosta

en. Antonio F. Trillanes IV, an avowed critic of President Duterte, has warned against looming “demoralization among the ranks” of the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP) over the Duterte administration’s confusing policy in dealing with communist rebels and secessionist groups.

“I believe this will cause demoralization among the ranks because the AFP and PNP do not know if they will wage war or forge peace with the rebel groups,” said Trillanes, a former military officer himself who led the failed Oakwood mutiny during the early years of the administration of former President Gloria MacapagalArroyo before becoming a lawmaker. In an interview, the senator admitted that, from the start, he had doubted the credibility of Duterte’s campaign against communist rebels, considering that, at that time, “there were still leftists on his Cabinet.” Trillanes voiced doubts that the accomodation of leftists in the Duterte Cabinet will facilitate forg-

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Forum on federalism

Secretary Raul L. Lambino gestures as he explains how a federal form of government would work better than the current unitary system in liberating Filipinos from poverty and other chronic social ills at a forum on federalism last Sunday in San Pablo City, organized by the Order of the Knights of Rizal. Lambino, administrator and CEO of the Cagayan Economic Zone Authority, was invited by the club as resource speaker. JOSEPH MUEGO

New DOJ chief’s priority: Review of Lim, Espinosa drug case; Napoles’ WPP inclusion By Joel R. San Juan @jrsanjuan1573

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EWLY appointed Justice Secretary Menardo I. Guevarra on Monday said that he will undertake a review of the controversial drug case involving Peter Lim and self-confessed drug lord Kerwin Espinosa, as well as the decision of his predecessor to place alleged pork barrel mastermind Janet Lim-Napoles under provisional coverage of the Witness Protection Program (WPP). Guever ra, who repl aced re signed Justice Secretary Vitaliano N. Aguirre II who resigned last week, told reporters in a text message that the said cases are on top of his priorities considering the interest of the public on them. The new justice chief, however, asked for understanding from the media as he preferred not to discuss the cases while they are still pending before the Department of Justice (DOJ). “For now I can only say that I will review previous actions on the Espinosa and [Lim-]Napoles case. That’s top priority in view of the public interest involved. I will not prejudge until

I have formed my own conclusion,” Guevarra said. Gueverra asked that the media accord him patience, as he does not want to make premature statements on pending cases until he has studied them. It can be recalled that Aguirre confirmed Lim-Napoles’s admission into the WPP after the latter executed an affidavit, which provided more details on the misuse of the Priority Development Assistance Fund (PDAF). The affidavit, according to Aguirre, is now being reviewed by the justice department for possible filing of additional cases against more government officials in relation to the PDAF scam. With regard to the case of Lim and Espinosa, Aguirre has ordered a reinvestigation by a new panel of prosecutors of the case earlier dismissed by a DOJ panel that got the ire of President Duterte. T he st rong publ ic cr it ic ism against the dismissal of the drug case and the inclusion of Lim-Napoles in the WPP was believed to have prompted Aguirre to vacate his post.

he Department of National Defense and the Armed Forces of the Philippines asked Filipinos on Monday to always honor the sacrifices made by veterans who fought during the last world war as they joined the country in celebrating the Araw ng Kagitingan (Day of Valor) on Monday. “Let us continue to celebrate a nd com memorate t he va lor and gallantry of our World War II veterans. Let us perpetuate the memory of their deeds to be emulated by future generations of Filipinos,” Defense Secretary Delfin N. Lorenzana said in a brief message. W hile the countr y remembers the deeds of those who died fighting the war, Lorenzana said it must also accord the same to still-living Filipino war veterans. “Let us honor those who are still with us, for pretty soon, they will all be gone,” he said. On the other hand, the military conveyed its greatest respect and admiration to the war veterans who struggled to free the country from invading forces. “We remember the sacrifices of our veterans, their bravery and their selfless dedication to the country’s defense. Through their gallantry, we were able to show the determination of Filipinos to stand against overwhelming odds,” the military said through its public affairs office chief, Lt. Col. Emmanuel Garcia. “The deeds of heroism and ideals of our world war veterans will always be inculcated in the minds of our current soldiers who exhibit in their own actions the same fervor and willingness to defend our country and our people.” Garcia said that, like the old soldiers, the younger generations of soldiers are also fighting to free the country from “modern day” enemies and threats. “We also salute our current crop of Filipino soldiers whose courage and selfless service have been proven in recent events against terrorists and violent extremists,” he said. The commemoration of the 76th Araw ng Kagitingan was held in Bataan with Executive Secretary Salvador C. Medialdea reading the message of President Duterte, who flew to China to attend a regional forum.

Envoy calls for restraint in face of possible US-China trade war By Bernadette D. Nicolas @BNicolasBM

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hilippine Ambassador to China Jose Santiago L. Santa Romana said the country should call for restraint amid what he described as escalating United States-China trade war. Santa Romana’s statement came after a research note from RHB Bank Berhad dated April 4 said the Philippines could be the most at risk country in the Association of Southeast Asian Nations region because of the trade war. “So we are calling on…the US and China to go back to the negotiating table, to open talks and to try to resolve it through negotiations, to trade talks so as to avert a trade war and so as to prevent any fallout on the Philippines,” he told reporters at a news briefing in China. President Duterte is expected to

address the plenary in the Boao Forum for Asia in Hainan province. On April 10 Duterte is also scheduled to hold a bilateral meeting with his Chinese counterpart Chinese President Xi Jinping, who is also expected to make a policy speech in the forum amid the trade war. Santa Romana said the country is very concerned about it since the Philippines could be adversely affected, especially in terms of exports since some of the country’s exports are part of the supply chain in the Chinese exports to the United States. “I think what we want­—what we don’t want to see—is to be adversely affected and it is going to be a challenge because if a trade war breaks out, usually, generally speaking, there are no winners and it is hard for any winner to emerge and so we would also be affected,” he said. China proposed last Wednesday for the imposition of higher tariffs

on about $50 billion of US imports. Last Thursday, US President Donald J. Trump ordered the possible imposition of tariffs on additional $100 billion in Chinese imports. Aside from being the biggest trading partner for many Southeast Asian economies, China is also an important source of investment and tourism in the region. In its research note, RHB Bank Berhad enumerated the sectors which are likely to be hit badly with the worsening trade war are electronics, electrical machinery, such as computers and industrial goods. Duterte’sforeign-policyshifttoward China is backed by his adoption of a more cooperative stance toward China. According to Santa Romana, among the bilateral agreements to be signed include the final loan agreement on the Chico Dam project and on hiring more Filipino English teachers.

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House crafts bill to modernize, synchronize PPP laws with ‘Build, Build, Build’ program By Johnny C. Nuñez Philippines News Agency

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he House Public Works Committee’s technical working group has recently finalized the substitute bill for the proposed Public Private Partnership Rationalization Act (PPPRA) designed to support President Duterte’s “Build, Build, Build” program. Rep. Joey S. Salceda of the Second District of Albay, who chairs the technical panel and authored one of the original PPPRA bills, said the measure seeks to “institutionalize and strengthen public-private partnership [PPP] in infrastructure and development projects, the value of PPPs in delivering the country’s infrastructure requirements and utilizing the efficiencies of private-sector participation is crucial to the success of the Build, Build, Build program.” “We need enormous investments, resources, and innovation from the private sector. We will translate these PPP opportunities into more jobs, improved competitiveness, and higher economic growth.... Now is indeed the time to forge more public-private partnerships to deliver critical projects that will usher the country’s Golden Age of Infrastructure,” he stated. Salceda said the bill proposes major reforms to help boost the PPP program, among them, providing clearer and simpler rules for faster project implementation to foster competition, which is what the government needs as it rolls out big ticket projects. It sets clearer parameters on the government undertakings and investment recovery schemes, procedures on project approval and procurement, fiscal rules on contingent liabilities, and other vital concerns. The substitute bill consolidated the salient features from separate proposals filed by Speaker Pantaleon D. Alvarez and Reps. Feliciano R. Belmonte Jr., Romero S. Quimbo, Romeo M. Acop, Vilma Santos-Recto, Gary C. Alejano, Manuel T. Lopez, Luis Raymund F. Villafuerte Jr. and Salceda himself, who explained the new bill is a “product of the government’s learning experience in doing PPPs for the past decades, and—will accelerate the implementation of the Philippine Development Plan [PDP] 2017 to 2022, under which giant transport and industrial projects are listed.” The measure, Salceda said, aims

to promote public infrastructure financing by including joint ventures as PPP variants, opening capital markets for the financing of PPP projects in addition to equity and loans, and defining the roles and participation of local government units in PPPs. It will, likewise, encourage foreign investments in public infrastructure in view of the upcoming approval of the proposed amendments to the Public Service Act, a bill he also authored. To enhance fair competition and protect public interest, he said the PPP bill proposes to improve the framework on unsolicited PPP projects by allowing private sector proposals for projects under the government’s priority list and by providing for a more competitive challenge process. Such measures are expected to address the issues and challenges faced by the government in handling unsolicited proposals by striking a balance between fast-tracking the processing of unsolicited proposals and ensuring that the competition generates the best offer favorable to the public. Since the amendment of Republic Act 6957 in 1994, by R A 7718, the build-operate-transfer law has remained unchanged, with only its implementing rules and regulations having undergone revision in 2012, hence the “urgent need to update the existing law by instituting critical reforms, incorporating the lessons learned from the past, and adopting the best practices as currently observed.” Under the ambitious Build, Build, Build program, the government plans to build at least 75 flagship projects worth some $180 billion in the next 10 years. The projects include six airports, nine railways, 32 road networks and bridges, and four seaports seen “to make more efficient the movement of people and goods, bring down production costs, improve rural income, encourage countryside investments and create more jobs.” Also on the drawing board are four energy facilities for stable power supply at lower prices; 10 water resource projects as well as irrigation systems to raise agricultural output; five floodcontrol facilities for vulnerable communities to boost their resilience against the impact of climate change; and three redevelopment programs to meet and sustain the needs of urban population.

FFW sticks to Duterte’s promise to end ‘endo’

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he Federation of Free Workers (FFW) on Monday said the group is not giving up its call to President Duterte to end the contractualization of workers. FFW President lawyer Jose Sonny G. Matula told the BusinessMirror that his group remains “hopeful that the President still [has] the political will to make good [of] his electoral campaign promise in 2016” to end the practice of contractualization, where workers are hired to work in less than six months. Under the Labor Code, a worker who works for six months or beyond will automatically become a regular employee. Thus, the worker should receive the minimum wage approved and passed by the Regional Wage and Productivity Boards every month, and is entitled to social benefits given by the State. Matula said Duterte should approve the proposed executive or-

der (EO) crafted by the Nagkaisa labor coalition because it does not completely ban all forms of contractual jobs. The proposal was “not absolute” in its purpose of ending contratualization, he added. The FFW, with 250 unions under its wings, is a member of Nagkaisa. Matula stated that the main point of the Nagkaisa is “the security of tenure of the workers” who have been working for so long in their respective firms and, yet remain contractuals until today.” His statement is so far the clearest among the statements and reactions issued by different labor groups after Duterte admitted more than a week ago that he finds difficulty in approving the Nagkaisa-proposed EO because he was informed by his lawyers that the proposal will literally end all types of contractualization that will severely effect many business establishments. Nelson S. Badilla

Editors: Vittorio V. Vitug and Max V. de Leon • Tuesday, April 10, 2018 A5

Metro Manila industries remain top earners in 2015–PSA data

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By Cai U. Ordinario

@cuo_bm

ndustries based in the National Capital Region (NCR) or Metro Manila remained as top income earners nationwide in 2015, according to the Philippine Statistics Authority (PSA). Based on the 2015 Annual Survey of Philippine Business and Industry, the PSA said NCR-based industries earned P6.3 trillion or 49.7 percent of industries total income in 2015. “Data collected from the survey provide information on the levels, structure, performance and trends of economic activities of the formal sector in the entire country for the year 2015,” the PSA said. T he reg ion a l so employed the most workers at 2.12 million who a lso received t he most monthly compensation of P31,695 in 2015. PSA data also showed that 60.5

2.12M The total number of employees in NCR who received the most monthly compensation of P31,695 in 2015

percent of the total compensation in 2015 was contributed by the NCR with P804.9 billion. The PSA stared that compensation includes salaries and wages as well as employee benefits. Wages and salaries are payments

in cash or in kind. “Compensation is the sum of salaries and wages, separation/ retirement/terminal pay, gratuities, and payments made by the employer in behalf of the employees, such as contribution to SSS/ GSIS, ECC, PhilHealth, Pag-ibig, etc.,” the PSA said. In 2015 total income of all industries in 2015 reached P12.7 trillion, higher by P723.6 billion or an improvement of 6.1 percent from the P12 trillion in 2014. The PSA said total employment grew in 2015 by 9.2 percent to 4.51 million from 4.13 million workers in 2014. Total compensation paid to employees comprising of payment for gross salaries and wages of employees and other benefits paid by the establishment amounted to P1.3 trillion, up by 14.2 percent from P1.2 trillion in 2014. Meanwhile, the PSA added ecommerce transactions in 2015 was estimated at P42.7 billion, a 4.3-percent contraction from P44.6 billion recorded in 2014. E-commerce refers to the selling of products or services over elec-

tronic systems, such as Internet Protocol-based networks and other computer networks. The data also includes transactions done via Electronic Data Interchange network, or other online system. Excluded are orders received from telephone, facsimile and e-mails. “Among regions, NCR the only region that posted billion marks in e-commerce sales with P40.7 billion or 95-percent share to total, representing 0.6 percent of the total income of the region,” the PSA said. 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 to total.

Oil firms cut gas, diesel pump price on Tuesday

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fter three consecutive weeks of oil price increases, oil companies announced on Monday they will implement a price rollback effective on Tuesday morning. In separate announcements, the oil firms said gasoline prices will go down by P0.40 per liter, while the price of diesel will be reduced by P0.30 per liter. PTT Philippines, Eastern Petroleum and Phoenix Petroluem said they will implement the price adjustment at 6 a.m. of April 10, Tuesday. Seaoil and Pilipinas Shell will also adjust their prices. At the same time, they said, the price of kerosene remain unchanged. “Movements ref lect the inter nationa l petroleum market,” they said. Other oil firms will follow suit. On April 3, the price of gasoline went up by P0.90 per liter and P1 per liter for diesel and kerosene, respectively. On March 27, oil prices went up by P1.15 per liter for gasoline, P1.10 per liter for diesel and P1 per liter for kerosene. The week before March 27, oil firms implemented another price hike of P0.40 per liter for diesel but reduced the price of kerosene by P0.55 per liter. Lenie Lectura

Flood-control project A massive backhoe digs up a portion of a road pavement to give way to underground water

drainage culverts along the flood-prone Florentino Torres Street in San Andres Bukid in Manila over the weekend. The drainageconstruction project is one of the ongoing summer construction projects to mitigate flooding in low-lying areas of Metro Manila, when the wet season sets in by the middle of the year. ROY DOMINGO

Sugar sustains 5-week hike to ₧1,440.46/LKg

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he average mill-site price of domestic sugar as of March 4 sustained a five-week increment and rose to a crop-year high of P1,440.46 per 50-kilogram bag (LKg), latest data from the Sugar Regulatory Administration (SRA) showed. The figure was 3.16 percent higher than the previous week's recorded quotation of P1,396.30 per LKg. SRA data also showed that this is the highest recorded price level in the current calendar year (CY) 2017 and 2018, which ends on August 31. In fact, this is the only second time in the current CY that the average price of domestic sugar or "B" sugar breached the P1,400 per LKg price level. The first time was on January 21, when average mill-site price of B sugar peaked at P1,416.44 per LKg. During the reference period, the composite price of sugar rose to a crop-year high of P1,413.29 per LKg, latest SRA data showed. The figure was 2.93 percent higher than the P1,373.04 per LKg recorded quotation in the previous week. This is the first time in the current CY that the composite price of sugar breached the P1,400 quotation level. On the other hand, the average mill-site price of “A” sugar or sugar bound for exports to Washington as of March 4 sunk to a crop-year low of P1,124.83 per LKg. The latest mill-site price quotation for A sugar was 1.06 percent lower than the P1,136.92 per LKG price level recorded on March 25, SRA data showed. Jasper Emmanuel Y. Arcalas

The World

BusinessMirror U.S. denies launching air strikes; at least 40 killed A6

Tuesday, April 10, 2018

Editor: Lyn Ressureccion | www.businessmirror.com.ph

Missile attack reported in Syria

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EIRUT—Missiles struck an air base in central Syria early on Monday, the country’s staterun news agency reported. Although the agency said it was likely “an American aggression,” United States officials said the US had not launched air strikes on Syria.

The missile attack followed a suspected poison-gas attack last Saturday on the last remaining foothold for Syrian rebels in the eastern suburbs of Damascus. At least 40 people were killed, including families found in their homes and shelters, opposition activists and local rescuers said. Sana said the missile attack on the T4 military air base in Homs prov ince resu lted in a number of casualties but provided no specific figures. Earlier, President Donald J. Trump had promised a “ big price to pay” for the suspected chemical attack. A f ter the air str i kes were repor ted, however, Pentagon Spokesman Christopher Sherwood said in a statement that, “at this time, the Department of Defense is not conducting air strikes in Syria.” The US launched several dozen Tomahawk cruise missiles at a Syrian air base last year, after a chemical attack in the northern Syrian town of Khan Sheikhoun killed dozens of people. Israel has also struck inside Syria in recent years. The Israeli military had no immediate comment on the Syrian reports of the struck air base. The suspected poison-gas attack last Saturday on the besieged town of Douma came almost exactly a year after the US missile attack prompted by the Khan Sheikhoun deaths. In response to the reports from Douma, Trump last Sunday blamed Syrian government forces for what he called a “mindless chemical attack.”

In a series of tweets, Trump held Russia and Iran, Syrian President Bashar al-Assad’s chief sponsors, responsible. The Syrian government denied t he a l legat ions, ca l l ing them fabrications. Fi rst res ponders enter i ng apartments in Douma late Saturday said they found bodies collapsed on floors, some foaming at the mouth. The opposition’s Syrian Civil Defense rescue organization said the victims appeared to have suffocated. They did not identify the substance used, but the civil defense organization, also known as the White Helmets, and the Syrian American Medical Society, a medical relief organization, said survivors treated at clinics smelled strongly of chlorine. Those reports could not be independently verified because of a government blockade around the town. Hours after the attack, the Army of Islam rebel group agreed to surrender the town and evacuate their fighters to rebel-held nor t her n Sy r ia, Sy r ian state media reported. The group also agreed to give up its prisoners, a key government demand. The government agreed to halt its assault after three days of indiscriminate air and ground attacks. “There’s nothing left for civilians and fighters. We don’t have anything to stand fast,” said Haitham Bakkar, an opposition activist inside the town. He spoke to The Associated Press through WhatsApp.

This image released early on April 8 by the Syrian Civil Defense White Helmets shows a child receiving oxygen through respirators following an alleged poison-,gas attack in the rebel-held town of Douma, near Damascus, Syria. Syrian rescuers and medics said the attack on Douma killed at least 40 people. The Syrian government denied the allegations. Syrian Civil Defense White Helmets via AP

People now are going out in the streets looking for their loved ones in the rubble.”—Bakkar “People now are going out in the streets looking for their loved ones in the rubble,” Bakkar said. “And we don’t have any space left to bury them.” More than 100 buses entered the town last Sunday night to transport fighters and their families to Jarablus, a town under the shared control of rebels and Turkey, said Syrian state-affiliated al-Ikhbariya TV. The preparations follow a pattern of evacuations around the capital and other major Syrian cities as the government reasserts its control after seven years of war. Human-rights groups and United Nations officials say the tactic amounts to forced displacement, a war crime. The UN Security Council planned to hold an emergency meeting on Monday to discuss the chemical attack.

The Army of Islam could not be immediately reached for comment. In his tweets last Sunday, Trump called Assad an “animal” and delivered a rare personal criticism of Russian President Vladimir Putin for supporting him. Trump has declared his intent to withdraw US troops from Syria in the coming months, despite resistance from many of his advisers. Bakkar said several bombs laced with chemicals landed in Douma last Saturday night. Another activist, Bilal Abou Salah, said a large, yellow cylinder smashed through the roof of an apartment building and came to rest on the third floor and started to discharge gas. The Syrian Civil Defense group documented 42 fatalities but was impeded from searching further by strong odors that gave rescu-

ers difficulties breathing, said Siraj Mahmoud, a spokesman for the group. A joint statement by the civil defense group and the medical society said that more than 500 people, mostly women and children, were brought to medical centers complaining of difficulty breathing, foaming at the mouth and burning sensations in the eyes. Some had bluish skin, a sign of oxygen deprivation. The symptoms were consistent with chemical exposure. One patient, a woman, had convulsions and pinpoint pupils, suggesting exposure to a nerve agent, the statement said. The Syrian Observatory for Human Rights issued a higher death toll, saying at least 80 people were killed in Douma, including around 40 who died from suffocation. But it said the suffocations were the result of shelters collapsing on people inside them. “Until this minute, no one has been able to find out the kind of agent that was used,” Mahmoud said in a video statement from northern Syria. AP

Britons back vote on May’s Brexit deal and staying in EU

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majority of Britons support holding a vote on the final Brexit deal secured by Prime Minister Theresa May, according to a YouGov poll conducted for the pro-remain group Best for Britain. T hose s ay i ng t he pu bl ic should have the final say on whether to accept the Brexit deal or remain in the European Union (EU) exceeded opponents by 8 percentage points, according to the poll results released on Monday by the group, whose funders include billionaire investor George Soros. Respondents said they would opt to remain in the bloc if given a second referendum. The survey results pose a d i lemma for May who, last December, w a s forced i nto conceding a vote on her Brexit deal to lawmakers following a rebellion by members of her own Conservative Party. But a f ter pre v iou s pol l s showed there was no appetite for a second referendum on Brexit, she’s been able to fend off demands for a new vote amid tricky divorce talks with her EU counterparts. “The possibility of Brexit is sharpening the British public’s minds, and now there is a decisive

majority in favor of a final say for the people of our country on the terms of Brexit,” Best for Britain CEO Eloise Todd said.

‘Turning point’

“This poll is a turning-point moment. The only democratic way to finish this process is to make sure the people of this country, not MPs [members of parliament] across Europe, have the final say, giving them an informed choice on the two options available to them: the deal the government brings back and our current terms,” Todd said. Some 44 percent of 813 adults polled on April 5 and 6 by YouGov said there should be a vote on May’s Brexit terms. That compares with 36 percent who said there shouldn’t be one, and it almost reverses the proportions from a similar poll in January. In the latest survey, 44 percent of respondents also said they’d vote to remain in the EU in the event of a second referendum, with 41 percent opting to leave. No margin of error was given. It’s the first time YouGov has returned a result in support of a vote specifically between accepting the divorce terms and remaining in the Eu-

ropean Union. An ICM poll for The Guardian in January found supporters of a second EU referendum outweighed those who rejected reopening the question by 16 percentage points.

No fait accompli

May hopes to finalize a divorce deal with the European Union in the fall, though only the outline of the new post-Brexit trading relationship is likely to be agreed upon before departure day next March, when a 21-month transition period is due to begin. While May and opposition Labour Party Leader Jeremy Corbyn both say they intend to implement the 2016 referendum result, there are still lawmakers on both sides of the political divide who’d like to reverse Brexit. Last Sunday Labour peer Andrew Adonis—May’s former infrastructure czar—said it isn’t yet a fait accompli. “It is absolutely not a done deal at the moment,” Adonis said in a Sky News interview. “Parliament will take the final say; it can, if it chooses to do so, refer it to the people.” May on Monday will visit her counterparts in Sweden and Denmark to discuss issues— including Russian aggression,

trade, investment and progress toward a Brexit deal, her office said last week. Meanwhile, International Trade Secretary Liam Fox begins a weeklong visit to the United States and Canada. He’s looking to drum up trade and investment opportunities with allies Britain’s relying on for post-Brexit trade deals. Fox will meet with companies including Amazon.com Inc., Starbucks Corp. and Warner Bros. Entertainment Inc., according to his office.

Zombie knives

W ith Parliament in recess, Brexit has slid into the background for the past two weeks, and domestic issues have come to the fore, including a surge in violent crime. Home Secretary Amber Rudd on Monday will publish the government’s serious violence strategy, which aims to channel £40 million ($56 million) into programs to steer young people away from crime and tackle violent gangs and drug dealers. It follows her announcement last Sunday that she’ll legislate to ban the sale of rapid-fire rifles and bump stocks that facilitate shooting, outlaw brass knuckles and zombie knives, and make it a

crime to possess acid in a public place without good reason. W hile Rudd wrote in The Sunday Telegraph that evidence doesn’t support blaming police cuts for the rise in crime, The Guardian on Monday cited a leaked Home Office document as say ing reductions in the number of officers had “likely contributed” to a rise in serious violent crime.

‘Reckless failure’

Corbyn, for his part, will call the Conservative record on policing and crime one of “reckless failure” as he kick-starts Labour’s campaign for next month’s council elections at a rally in the capital alongside London Mayor Sadiq Khan. “You cannot protect local communities when you cut funding to local councils to such an extent they are unable to provide the essential youth-service support that stops many young people from being drawn into violent crime,” Corbyn will say, according to his office. “Over the last eight years the Conservative government has decimated local services, the core services that are an essential part of holding our communities together.” Bloomberg News

Republicans seize impeach line for edge in 2018 midterms

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ASHINGTON—As Republican leaders scramble to stave off a Democratic wave, or at least mitigate their party’s losses in November, a strategy is emerging on the right for how to energize conservatives and drive a wedge between the anti-Trump left and moderate voters: warn that Democrats will immediately move to impeach President Donald J. Trump if they capture the House. What began last year as blaring political hyperbole on the right—the stuff of boldlettered direct-mail fund-raising pitches from little-known groups warning of a looming American “coup”—is steadily drifting into the main currents of the 2018 message for Republicans. The appeals have become a surefire way for candidates to raise small contributions from grass-roots conservatives who are devoted to Trump, veteran Republican fund-raisers say. But party strategists also believe that floating the possibility of impeachment can also act as a sort of scared-straight motivational tool for turnout. Last week Sen. Ted Cruz of Texas used his reelection kickoff rally to introduce a video featuring a faux news anchor reading would-be headlines were conservatives not to vote in November. “Senate Majority Leader Schumer announced the impeachment trial of President Trump,” one of the anchors says. And when Rep. Steve Stivers of Ohio, chairman of the House Republican campaign organization, convened about two-dozen party strategists in February for a private dinner at a French bistro here, the attendees were surprised when he addressed an issue not included in his formal PowerPoint presentation: the threat of impeachment against Trump, which he said fired up the party base. Then there is the most prominent Republican to have started invoking the specter of a Democratic-controlled House impeaching Trump: the president himself. In just the last month, he has used three separate speeches to warn that Rep. Maxine Waters, a veteran California Democrat he has casually insulted as a “low-IQ individual,” aims to impeach him. Advisers to the president say they have made clear to him that Republican control of the House is tenuous, and some have encouraged him to more aggressively lay out the stakes for the midterm elections, including who exactly would be in charge of key committees should Democrats retake the chamber. “Everybody has told him that,” Corey Lewandowski, Trump’s former campaign manager, said about the prospect of a Democratic takeover of the House. “The threat of impeachment is something that unifies everybody in the party, even if you’re not a big Trump supporter.” Democrats are divided on how to respond to the charge. Many top officials in the capital fear it is a political trap that would distract from their core message and possibly even boomerang back to harm them in November. (Democrat Sen. Charles Schumer himself has said he thinks impeachment is premature at the moment.) But other more progressive figures see impeachment as a rallying cry of their own to galvanize the left’s anti-Trump base. “I’ve been urging members to refrain from discussing impeachment,” said Rep. Adam Schiff of California, the ranking Democrat on the House Intelligence Committee, adding: “I think we should let these investigations conclude and see what evidence is found.” The mere thought of impeachment could energize Trump supporters who may otherwise be disinclined to vote in the midterm elections without him on the ballot, supporters of the strategy say. “I can’t even imagine the Democrats would go there,” said Mark Lundberg, former chairman of the Sioux County Republican committee in Iowa. “Impeachment for what? For being rude to them? That would be so outrageous.” And to those voters in the political center who may be uneasy with, or simply exhausted by, his tumultuous administration, the possibility of an even more chaotic 2019 in Washington is unappealing. New York Times News Service

www.businessmirror.com.ph | Editor: Lyn Ressureccion

US official: North Korean leader ready to discuss nukes

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ASHINGTON— North Korea’s government has communicated with the United States to say that leader Kim Jong Un is ready to discuss his nuclear weapons program with President Donald J. Trump, officials said last Sunday, increasing the likelihood that the unprecedented summit will actually occur. The confirmation from Pyongyang directly, rather than from third countries like South Korea, has created more confidence within Trump’s administration about the wisdom of holding such a meeting, as US officials make secretive preparations. The Trump administration has long said that if the North Koreans weren’t ready to discuss giving up their nuclear program, there was no reason for the two countries to hold negotiations. Trump took his own administration and other countries by surprise last month when he accepted an unusual offer from Kim to hold a meeting. The North had conveyed the invitation to a visiting delegation from South Korea, which in turn traveled to Washington and relayed the message to Trump. The president said yes to the meeting on the spot, even though the US had not yet heard directly from North Korea about Kim’s intentions. The United States later heard from other countries including China, where Kim paid a rare visit, that the North was serious about the offer. Stil l, Nor th Korea’s gover nment has not said any thing publicly at a l l about a meeting w ith Tr ump, and the lack of know n contact bet ween P yong yang and Washington about the meeting has f ueled f ur ther specu lation about the ser iousness of K im’s offer. A Trump administration official last Sunday said that the US had “confirmed that Kim Jong Un is willing to discuss the denuclearization of the Korean Peninsula.” A second official said that confirmation had come through direct contact between American and North Korean officials. Neither of the officials would say when or how the contact took place, nor in what location. The officials weren’t authorized to comment by name and demanded anonymity. Previously, former Secretar y of State Rex Tillerson had said there were at least two or three channels through which US and North Korean officials communicate from time to time. The Trump administration has not said where the meeting will take place or whether a location has been determined, nor has an exact date been set. Initially, the W hite House said it expected the meeting to take place by the end of May. It’s unclear whether a date that early could be achieved or whether it might be delayed. The contacts between Pyong yang and Washington come as Trump’s new national security adviser, former United Nations Ambassador John Bolton, prepares to start work at the W hite House formally on Monday. Prior to being named to the post, Bolton had long expressed hawkish views about North Korea, even advocating a preemptive militar y strike. AP

The World BusinessMirror

Tuesday, April 10, 2018

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Mahathir pledges to review China’s investment after Malaysia’s election

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hinese investors in Malaysia will face more scrutiny if former prime minister Mahathir Mohamad wins back power in the upcoming election.

Mahathir, the opposition’s candidate for prime minister, said in an interview last Friday that Chinese investment was welcome if companies set up operations in Malaysia, employed locals and brought in capital and technology to the country. This wasn’t the case now, he added. “Here we gain nothing from the investment,” Mahathir, 92, said in his office in Kuala Lumpur. “We don’t welcome that.” Mahathir’s comments reflect broader concerns about Chinese investment across Asia that have stoked political tensions from Australia to Sri Lanka. While many countries are eager to benefit from President Xi Jinping’s plan to facilitate hundreds of billions of dollars in infrastructure investment throughout the world, they are also wary of becoming too dependent on China. In Malaysia Chinese investment has raised concerns over sovereignty and economic inequality. Mahathir referenced plans by Country Garden Holdings Co. Ltd. to invest $100 billion in Johor state to build apartments that cost upwards of 1 million ringgit ($258,000). The median annual income in Malaysia was 62,736 ringgit in 2016. “We don’t have enough people with wealth to buy all those very expensive flats, so you’re bringing in foreigners,” Mahathir said. “No country wants to have an influx of

huge numbers of foreign people into their country.” Prime Minister Najib Razak, who is seeking to extend his premiership for a third term in the general election, has dismissed the opposition’s concerns on Chinese investment as “irresponsible politicians scaremongering.” A spokesman did not immediately respond to a request for comments. “Remember that Malaysian investment into China used to be bigger than Chinese investment in Malaysia, and that we have more Ma laysian investments overseas than foreign direct investments [FDI] in this country,” Najib said at the Invest Malaysia 2018 conference in Kuala Lumpur in January. “So this is a twoway street. FDI levels vary over time, and such connections are part of, and key to, a healthy and diversified economy.” China is Malaysia’s top source of FDI, contributing 7 percent of the total 54.7 billion ringgit it received last year. In the inter view, Mahathir cited Sri Lanka as a countr y that “ lost a lot of land ” because it couldn’t pay back money from China. Last year, Sri Lanka’s government gave a joint venture led by a Chinese state-run company a 99-year lease to the southern port of Hambantota in return for debt relief. “L ots of people don’t l i ke

Mahathir Mohamad, Malaysia’s former prime minister, poses for a photograph in Kuala Lumpur, Malaysia, on April 6. Mahathir pledged to abolish the goodsand-services tax and maintain economic growth at 6 percent should he win Malaysia’s upcoming election and retake power. Ian Teh/Bloomberg

“We don’t want to sell chunks of this country to foreign companies who will develop whole towns.”—Mahathir Chinese investments,” Mahathir said. “ We are for Ma laysians. We want to defend the r ights of Ma laysians. We don’t w a nt to se l l c hu n k s of t h i s countr y to foreig n companies who will develop whole towns.” The Election Commission has yet to announce a date for the vote, which must be held in the next two months. Mahathir has vowed to fight a ban on campaigning issued by the government after his party failed

to meet a deadline to supply some information and documents. The opposition coalition, Pakatan Harapan, or Pact of Hope, pledged in its election manifesto to encourage continued investment from “China and other Asian countries.” This would be done only after reviewing all foreign mega projects to ensure there was no element of corruption, the manifesto said. Projects include the East Coast Rail Link, with an estimated cost

of 55 billion ringgit, Mahathir revealed in a forum last Thursday in Selangor. He said the Pakatan Harapan government would renegotiate the project, possibly seeking to reduce the 688-kilometer line unless there was enough demand. The project is slated for completion in 2024. Mahathir said that, if he wins at the polls, he plans to restart negotiations on rights and access to South China Sea while ensuring “friendly” relations with all countries. Malaysia is a claimant to some disputed features in the sea, along with China and other Southeast Asian countries, such as the Philippines and Vietnam. “We have to ensure our voice is heard because Malaysia does have islands in the area and this we must uphold,” he said. Bloomberg News

China bans exports of weapons-related Amid fears of trade war, Trump predicts China will relent goods and electronics to North Korea

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EIJING—China has banned exports to North Korea of electronics and other goods that can be used in making weapons, tightening United Nations (UN) sanctions imposed over Pyongyang’s nuclear and missile development. The ban covers “dual use” industrial components, metal alloys and other materials that can be used in both civilian products and weapons, according to a Commerce Ministry statement issued late Sunday. The UN Security Council has steadily tightened trade restrictions as leader Kim Jong Un’s government pressed ahead with nuclear and missile development

in defiance of foreign pressure. Beijing was long Pyongyang’s diplomatic protector but has supported the United Nations sanctions out of frustration at what Chinese leaders see as their neighbor’s increasingly reckless behavior. China accounts for nearly all of the isolated North’s trade and energy supplies. The latest ban includes components, software and tools for aircraft manufacturing, carbon fiber, high-voltage and high-temperature equipment, and tools for mixing and measuring chemicals. Beijing prev iously imposed l i m it s o n o i l s a l e s a nd c ut deeply into t he Nor t h ’s revenue by banning purchases of

its coa l, textiles and seafood. North Korean businesses in China were ordered to close and migrant workers were sent home. Despite the loss of almost all trade, the impoverished North has pressed ahead with weapons development that Kim’s regime sees as necessary for its survival in the face of US pressure. China has steadily increased economic pressure on Pyongyang while calling for dialogue to defuse the increasingly acrimonious dispute with US President Donald J. Trump’s government. Chinese leaders have resisted previous United States demands for an outright oil embargo but went along with imposing limits. AP

Oil trades below $63 as US-China trade tension brews

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il t r a d e d b e l o w $ 6 3 a ba r re l a s i nvestor s continue to assess the potential impact of an escalating trade conf lict between the United States and China. Futures in New York traded near the lowest level in three weeks after dropping 2.3 percent last Friday. US President Donald J. Trump last Sunday predicted China will be first to buckle as the tit-fortat between the world’s two largest economies raises concern a potential trade war could impact economic growth. China’s president may shed some light on his plans at the Boao Forum for Asia on Tues-

day. Money managers slashed bets on rising West Texas Intermediate (WTI) crude by the most since August, while shortselling surged. Oil is losing steam after rebounding more than 5 percent last month as the trade tensions triggered a global equity selloff. W hile the Organization of Petroleum Exporting Countries continues to cut supplies to balance the market, investors fear surging US output will thwart the effort, with production marking a fresh record of 10.46 million barrels a day and the oil rig count rising to a three-year high. “It’s a tough market at the moment. There’s weakness in

the next session or two, and a constrained range until we get more global market news,” Michael McCarthy, chief market strategist at CMC Markets, said by phone from Sydney. “ There’s potential for a breakaway announcement from President Xi Jinping. There will be fairly cautious Asia Pacific trading ahead of that tomorrow.” WTI for May delivery traded 17 cents higher at $62.23 a barrel on the New York Mercantile Exchange at 10:47 a.m. in Singapore. The contract declined $1.48 to $62.06 last Friday. Total volume traded was about 27 percent below the 100-day average. Bloomberg News

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mid fears of an escalating trade war between the United States and China, President Donald J. Trump tweeted last Sunday morning that he and President Xi Jinping of China will “always be friends, no matter what happens with our dispute on trade.” “China w i l l ta ke dow n its Trade Barriers because it is the right thing to do,” he added. “ Taxes will become Reciprocal & a deal will be made on Intellectual Property. Great future for both countries!” A White House spokesman last Sunday said the reciprocal “taxes” mentioned in the tweet referred to “tariff levels and also to reciprocal trade more generally.” It was unclear whether the president was suggesting that progress had been made in solving the trade dispute between the world’s two biggest economies. Fears of an escalation intensified last week amid a series of tit-for-tat tariff announcements by the two countries. Neither side backed down, and the stock market tumbled last Thursday and Friday after Trump threatened another round of tariffs on Chinese products. “We will not start a war—however, if someone starts a war, we will definitely fight back,” Gao Feng, China’s commerce ministry spokesman, said at a news conference in Beijing on Friday, the same day that US Treasury Secretary Steven Mnuchin acknowledged the “potential of a trade war” in an interview with CNBC. In a Sunday morning appearance

on the CBS show Face the Nation, Mnuchin did not comment on whether discussions with China had advanced. “I don’t expect there will be a trade war. It could be, but I don’t expect it at all,” he said. “But the president is willing to make sure we have free and fair trade, as you’ve seen his tweet already this morning.” Larry Kudlow, Trump’s new economic adviser, said on Fox News Sunday that he did not think there was “any trade war in sight.” But he added that the president was not bluffing. “ The whole world knows China has been violating trade laws for many years, and President Trump is the guy calling them on it. And he’s right to do so,” Kudlow said. Trade between the US and China is valued at nearly $650 billion a year, with the United States importing far more than it exports. US administration officials have accused China of using unfair trade practices as well as employing coercive tactics to gain access to United States intellectual property. The tariffs proposed by Trump seem designed to protect US consumers but could hurt businesses that depend on products and materials from China, while a trade war would threaten farmers who export their goods. Trump has argued that the short-term risks of a trade war escalation are outweighed by the long-term benefits of a more balanced trade relationship with China. New York Times News Service

Banking&Finance

A8 Tuesday, April 10, 2018 • Editor: Jun B. Vallecera

NG gross borrowings up 22% in January T

he national government reported gross borrowings in January this year reaching P47.659 billion, an expansion by 21.8 percent from P39.127 billion in the same month in 2017, data from the Bureau of the Treasury (BTr) show. This compared against the government gross borrowings of only P39.127 billion in January last year. Domestic gross borrowings amounted to P27.681 billion for the month, far more than external borrowings reaching only P19.978 billion. Broken down, fixed-rate Treasur y bonds comprised the bulk of domestic borrowings amounting to P14.891 billion, while the sale of Treasury bills accounted for another P12.790 billion during the month. In terms of external financing, program loans accounted for the bigger share amounting to P15.114 billion, while project loans totaled P4.864 billion. These loans are commonly sourced from multilateral agencies, such as the World Bank and the Asian Development

Bank, among others. The government looks forward to borrowing around P889 billion from both external and local lenders this year. Foreign financing will comprise P176.26 billion while those financed domestically will account for P711.8 billion. In 2017 the national government had gross borrowings amounting to P901.672 billion, rising by 77.8 percent from P507.02 billion in 2016. Of the total, domestic gross borrowings for the year accounted for P733.569 billion, while those made to foreign lenders amounted to P168.103 billion. Last year the Development Budget Coordination Committee (DBCC) said the financing mix should continue to favor domestic borrowings in the years ahead. The borrowing program is projected to follow the 80:20 mix from 2019 to 2022. For this year the DBCC made a slight adjustment to the borrowing mix as the government is projected to borrow 74 percent locally and 26 percent from foreign entities. Rea Cu

Q1 inflation proves higher than full-year forecast

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he Department of Finance (DOF) said elevated food and oil prices pushed the country’s inflation higher to 3.9 percent in the first three months this year. In an economic bulletin, fiscal planners plotted inflation averaging 3.9 percent in the first quarter, with inflationary pressures coming from increased food and oil prices. “[The] inflation rate in March inched up to 4.3 percent from 3.8 percent the previous month. The DOF’s internal forecast was 4.1 percent. For the first quarter of the year, inflation rate averaged 3.9 percent,” the DOF said. Earlier, the Philippine Statistics Authority said the country’s inflation in March climbed to 4.3 percent, higher than the revised 3.8-percent rate for February, as well as the target range of the Bangko Sentral ng Pilipinas ranging from of 2 percent to 4 percent. The price of food and nonalcoholic beverages inched up to 5.86 percent in March, from 4.79 percent the previous month, using the 2012 as base year. In the same month, the price of rice settled at 3.60 percent from 2.77 percent in February, 12.86 percent for fish from the February level of 11.22 percent, and vegetable prices to 5.99 percent from the previous month’s 2.58 percent. “As expected, the inflationary pressure came largely from elevated food prices [e.g., rice, fish, and vegetables] due to absence of NFA [National Food Authority]. Rice [and] rough seas limited fish supply and bad weather affected vegetables, respectively,” the DOF added.

The price of alcoholic beverages and tobacco also inched up to 18.57 percent from the 16.85 percent in February. “Appropriate adjustments in prices of ‘sin’ products, tobacco specifically, will continue to fuel inflationary momentum in the near term. However, the government is precisely discouraging the consumption of these products through higher prices, among others,” the DOF said. For nonfood items, housing, utilities and fuels reached 2.91 percent from 2.64 percent the previous month. Restaurants and miscellaneous services also increased to 3.04 percent from 2.49 percent in February. “Nonfood items, mainly fuels and restaurants contributed to the uptick as world petroleum prices rose and SSB [sugar-sweetened beverage] taxes continued to bite, respectively,” the DOF added. Last year President Duterte signed into law the Tax Reform for Acceleration and Inclusion (TRAIN) law that aims to lower the personal-income tax while pursuing offsetting measures. Under the TRAIN, offsetting measures include the tax rates imposed on SSBs of P6 tax per liter for juices and energy drinks and P12 per liter for beverages with highfructose corn syrup. For oil and petroleum, the tax rates imposed are P3 for kerosene, P2.50 for diesel and P1 for liquefied petroleum gas. All petroleum products used as input, feedstock, raw materials for petrochemicals and refining, or as replacement fuel, are exempt. Rea Cu

Deutsche Bank must regain ‘hunger for business’

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eutsche Bank AG’s new CEO Christian Sewing said the lender needs to be faster at making decisions and clear out unnecessary bureaucracy as he set out his first goals as head of Germany’s largest lender. “Our start to the year was solid but ‘solid’ cannot be our ambition,” Sewing said in a letter to staff published on Monday. “With regard to our revenues we have to regain our hunger for business.” The 47-year-old lifelong Deutsche Bank employee was appointed late Sunday to take over from embattled CEO John Cryan as part of a broad reorganization to restore revenue growth. The decision ended a dramatic couple of weeks of turmoil at Europe’s largest investment bank as Cryan fought for his position and Chairman Paul Achleitner quietly approached potential replacements. Sewing’s ascent marks the return of a German national as sole CEO for the first time in 16 years. At first glance, Sewing seems chosen to complete the task that Cryan began but failed to complete quickly enough—that of

shrinking Deutsche’s investment bank and making a coherent whole out of its domestic retail and commercial operations. Sewing announced in his memo on Monday plans to “further adapt our revenue, cost and capital structure” in the investment bank. “We’ll thoroughly analyze how we want to position this pillar of our bank in a difficult market environment,” he said. “The priority is to leverage our strengths and to allocate our investments accordingly. And at the same time we will look to free up capacity for growth by pulling back from those areas where we are not sufficiently profitable.” Deutsche Bank’s shares gained as much as 4.7 percent to €11.88 and were up 4 percent as of 10:56 a.m. in Frankfurt. The stock has declined 26 percent this year, valuing the German lender at €24.4 billion ($30 billion). “Mr. Sewing as new CEO is a sensible solution,” Ingo Speich, a fund manager with Union Investment, said in an e-mail. “Deutsche Bank should now use the chance to once again reassess its strategy. Especially in investment banking, we see a need for adjustment.” Bloomberg News

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‘More loans extended for cars than diplomas’

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By Jovee Marie N. dela Cruz @joveemarie

he House Committee on Economic Affairs on Monday urged the Bangko Sentral ng Pilipinas (BSP) and Development Bank of the Philippines to extend more loans than they do at present to educational institutions.

Rep. Frederick N. Siao of the Lone District of Iligan City cited the latest data available from the BSP, showing banks and other financial institutions lending the education sector less than 1 percent of their collective portfolio in 2017 and in the first two months this year. Given this, Siao urged banks to allocate more loans to the sector. “The Bangko Sentral and the Development Bank of the Philippines ought to craft policies for and implement concessional loans to the education sector. An education sector loan facility or window might be appropriate,” he said In January the lawmaker said loans to educational institutions amounted to only P32.8 billion while motor-vehicle loans totaled P262.8 billion. Also, he said preliminary figures in February this year show loans to the

education sector totaling P33.75 billion and compared that to car loans of P266 billion.” “One reason Philippine education is lagging behind other countries, or even here in Southeast Asia, is the limited financial support to our schools,” he said. “I believe the national government must find ways to make loans and grants accessible and affordable to schools,” he added. Also, Siao said the Department of Finance may also help by seeking foreign grants for public and private schools. “For huge capital outlays, education bonds may be the proper solution,” he particularly said. “Private banks must also carry their just share of the burden to improve the quality of education in our country by giving more loans to elementary schools, high schools,

Dealing with debt

Package 1B seen legislated in 2nd quarter

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n a perfect world, we would have all of the personal resources to support our goals and living standards. However, the reality is that we only have finite resources. One way people cope with this is by getting into debt. Simply put, debt is money owed by one person from another. Debt has a lot of negative connotations. Still, there is good debt and bad debt. Learning to distinguish between good debt and bad debt can help us decide and achieve a better financial future. Bad debt is debt that is utilized for items that usually lose value immediately, stagnate in value, depreciate over time or promise no possible future financial income. Debt used to finance luxuries related to food and beverages, clothing, gadgets and cars can be classified as bad debt. If a credit card is used to purchase luxuries, then the high interest rate of the credit card can make financial matters much worse. Though credit cards offer convenience and reward use, the costs can greatly outweigh the benefits. Good debt is debt that is utilized for items that help generate value and income over the long haul. Good debt can be debt that is used to finance ones education in a chosen field. Formal education and professional courses help boost human capital value that can pave the way to a rewarding career. Good debt can be debt that is used to finance wellstudied real-estate investments that offer good returns in terms of price appreciation and rental income. Good debt can be debt that is used to finance well-planned business opportunities. Usually, opportunity knocks once so good debt comes in handy in such cases. Good debt is not perfect debt. Prudence is important in determining the use of good debt. To fully maximize human capital value, the chosen professional field must be in line with the passion of the individual. One must have the commitment to thrive in a career and not just get a job. Real-estate investment decisions must consider both the initial payments and succeeding payments in order to assess whether these payments can be supported by projected sources of income. Business opportunities should address a clear target market and must have a differentiating presence to succeed in the marketplace. Whether good debt or bad debt is

colleges and graduate schools,” he added. Currently, three such proposals have been sent to the House Committee on Education creating a national student loan program. Rep. Gloria Macapagal-Arroyo of the Second District of Pampanga, one of the authors of the program, said easy access to higher education opportunities remains especially elusive for the poor. “Enough emphasis has been given to this fact but a lot remains to be done since education is considered a strategic key out of poverty. In the country, a little over 11 percent of the labor force has a college education. Moreover, in our college-age population, less than 50 percent are enrolled in tertiary educational institutions and about 70 percent live below the poverty line,” she said. Arroyo added her proposal seeks to create a national student loan board which will implement a national student loan program for the poor, define its powers and functions and appropriation the necessary funds. “There is no doubt on the need for such student loan program to assist the poor and needy and provide them access to tertiary education. Empowering them with decent education will give them more opportunities and help alleviate their impoverished lives. If we wish to become the next economic tiger of Asia, we need to educate our country’s less fortunate and make them major contributors in the Philippine society and in nation building,” Arroyo said.

Genesis Kelly S. Lontoc

personal finance acquired, one has to responsibly manage paying-off the debt. There are two popular ways of managing debt. The first way is called the debt avalanche method. Under this method, all types of debt would be listed along with the corresponding interest rate. The one bearing the highest interest rate gets top priority in terms of payment. For the other types of debt, the minimum payment is done. Once the debt with the highest interest rate gets fully settled, the next priority would be the debt with the second-highest interest rate. This method helps manage interest rates but can be hard to sustain for many, especially if the debt with the highest interest rate is also a high-amount debt. The second way is called the debt snowball method popularized by Dave Ramsey. Under this method, all types of debt would be listed along with the corresponding amount. The one bearing the lowest amount gets prioritized in terms of payment. For the other types of debt, the minimum payment is done. The idea behind the method is that being able to settle smaller debt first will supposedly give one the confidence to manage bigger debt. Still, higher pending interest rates can make this method costly. Having clarity in financial goals and living within our means can help us minimize or avoid debt. Clarity in financial goals will help define our priorities in life. Living within our means, especially through a budget, helps differentiate needs from wants. The choice of debt payment to apply can be based on what one can consistently execute. Hopefully, the debt that we get are good debt so that the opportunities we have today leads us to a bright tomorrow. Gemmy Lontoc is a registered financial planner of RFP Philippines. To learn more about personal financial planning, attend the 68th RFP program this May 2018. To inquire, e-mail info@rfp.ph or text <name><e-mail> <RFP> at 0917-9689774.

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he Department of Finance (DOF) is hoping that Package 1B, which forms the other half of the Tax Reform for Acceleration and Inclusion (TRAIN) law, will be passed before the end of the second quarter. DOF Undersecretary Karl Kendrick T. Chua expressed hope the discussions for Package 1B of the TRAIN will be completed before Congress goes into recess in June. “Well, hopefully they have three weeks when they come back in May before they have recess again in June.... So hopefully in the next session before June 1 they can file,” Chua told financial reporters. In December 2017 when President Duterte signed Package 1A of the TRAIN, lawmakers vowed to pass Package 1B in the first quarter this year to complete the first tranche of the administration tax-reform program. Both houses of Congress planned on passing the measure by the first quarter this year. Package 1B is expected to generate additional revenues estimated to reach P38.9 billion. Package 1A of the TRAIN contains measures on reducing personal-income tax, while implementing offsetting measures, including raising the excise tax on fuel and on sugar-sweetened beverages, among others. Chua said Package 1B contains measures on increasing Motor Vehicle Users Charge (MVUC), an estate tax-amnesty program, as well as a measure on general tax amnesty, amendments to the bank-secrecy law and automatic exchange of information. “[Package] 1B is basically the unfinished business of [Package] 1A,” he said. He added the measure on increasing the MVUC is now at the technical working group stage at the House of Representatives. The measure include the increase in the rate and organization of the road board and the road fund reform. “In the Senate, Sen. [Emmanuel D.] Pacquiao went ahead and filed the one in the fund and board, but not the one in the increase in the rates. So, we are requesting Senate President [Aquilino] L. Pimentel III to file the rate,” he added. For the amnesty measures, as well as that on bank secrecy and the automatic exchange of information, both the House of Representatives and the Senate are discussing the measures through committee hearings. In an earlier statement, Finance Secretary Carlos G. Dominguez III said the amnesty package will cover one-third of the initial revenues to be derived from the first package of the Comprehensive Tax Reform Program. The TRAIN is the first of five packages planned under the CTRP. Rea Cu

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Facebook rolls out plan to fight fake ads with more disclosure By Sarah Frier & Todd Shields Bloomberg

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acebook Inc. announced that it will require more disclosure for advertisers pushing viewpoints on social issues as cofounder Mark Zuckerberg prepares to face lawmakers angered over data leaks and Russian Internet trolls. The company said those placing issue ads on Facebook will need to verify their identity and location, the same way as those placing candidate ads. Anyone who doesn’t go through those steps won’t be able to run either type, Zuckerberg said in a Facebook post. Facebook will hire more people to make the change before the 2018 midterm elections. The company also said it would require managers of popular Facebook pages to have their identity verified. “This will make it much harder for people to run pages using fake accounts, or to grow virally and spread misinformation or divisive content that way,” Zuckerberg said. In an example distributed by Facebook, a mockup ad with a picture of a candidate carries the words, “Political Ad-Paid for by XYZ State Party Committee.” Facebook has grown into a colossus in campaign spending, serving up a rich bounty of intimate data that is used to target potential voters from among its online audience of more than 200 million monthly users in the United States. Campaign spending on Facebook and other digital media will rise to an estimated $600 million this year, compared with about $250 million in 2014, the last midterm election year, according to an estimate by Kantar Media/CMAG. Zuckerberg’s scheduled for two hearings next week before Congress, where he will be questioned by lawmakers who have expressed dismay at Russian use of Facebook during the 2016 election, and the exposure of data from as many as 87 million users to the Cambridge Analytica firm that worked on President Donald J. Trump’s 2016 presidential campaign. “There are a lot of questions that Mark Zuckerberg needs to answer and I intend to ask what he is doing to protect the privacy of Americans,” Sen. Amy Klobuchar, a Minnesota Democrat pushing legislation for more online ad transparency, said in an April 4 news release. Earlier, Zuckerberg and COO Sheryl Sandberg engaged in a string of media interviews. Zuckerberg admitted to “a huge mistake” for not assuming greater responsibility to protect against abuses. Sandberg said some advertisers have curtailed spending and acknowledged more work’s needed to reassure wary customers. Facebook is facing pressure on several fronts in Washington. The Federal Trade Commission is investigating whether the company breached a 2011 consent agreement to safeguard users’ personal information—a probe that could bring hundreds of millions of dollars in fines. Congress has been examining how Russians used social media platforms to influence the 2016 election, and Klobuchar’s legislation would require disclosure of who’s paying for political ads on social-media networks including Facebook, Twitter Inc. and Alphabet Inc.’s Google. Zuckerberg last Friday said Facebook supports the measure. “Election interference is a problem that’s bigger than any one platform, and that’s why we support the Honest Ads Act,” Zuckerberg said. “This will help raise the bar for all political advertising online.” Proposals at the Federal Election Commission would require online advertisements to carry language identifying sponsors, mimicking requirements for such ads on radio and television.

Editor: Angel R. Calso • Tuesday, April 10, 2018 A9

Forget trade war, China wants to win the computing arms race By Susan Decker & Christopher Yasiejko | Bloomberg

tries, said in its most recent report that China “has closed the technological gap” with the US in quantum information science, a sector Americans have long dominated, “due to a concerted strategy by the Chinese government and inconsistent and unstable levels of R&D funding and limited government coordination by the United States.”

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S the US and China threaten to impose tariffs on goods from aluminum to wine, the two nations are waging a separate economic battle that could determine who owns the next wave of computing.

Chinese universities and US technology companies such as International Business Machines Corp. and Microsoft Corp. are racing to develop quantum computers, a type of processing that’s forecast to be so powerful it can transform how drugmakers, agriculture companies and auto manufacturers discover compounds and materials. Quantum computing uses the movement of subatomic particles to process data in amounts that modern computers can’t handle. Mostly theoretical now, the technology is expected to be able to perform calculations that make today’s computers look akin to an abacus. While overall spending by China is unknown, its government is building a $10 billion National Laboratory for Quantum Information Sciences in Hefei, Anhui province, which is slated to open in 2020. United Statesfunded research in quantum is about $200 million a year, according to a July 2016 government report, and some researchers and companies don’t believe that’s enough. One “killer app” may be encryption, the code scrambling technology that secures modern global commerce and communications. China, Chinese universities and western financial institutions are rushing to patent more ways to use quantum technology for encryption, a study by research firm Patinformatics found.

‘Unhackable system’

“We’re talking about encrypting

data so it can’t be broken, certainly not by a classical computer,” said Tony Trippe, managing director of Dublin, Ohio-based Patinformatics. “It would be an unhackable system.” At the same time, it could break encryption that was on a classical computer. “An organization or a nation that had quantum computer technologies would have a significantly easier time of wreaking havoc on other systems,” he said. US President Donald J. Trump accused the Chinese government in March of stealing intellectual property by forcing American companies to share their most valuable secrets and sign joint-venture agreements with local firms if they want to operate in China, although there are no specific allegations regarding quantum computers.

China’s Innovation

China has also been aggressive in pushing homegrown innovation as it supports companies in obtaining patents and trademarks around the world, and has increased its research funding. In its annual scorecard, the Organization for Economic Cooperation and Development called China “the second-largest scientific powerhouse,” behind the US. Technology companies from Microsoft to IBM to Alphabet Inc.’s Google view quantum computing as the next revolution. “Over time, quantum in the field of computation is so important that it will redefine the category of

Quantum Physics

Cables are attached to an optical transport platform system as it undergoes testing inside the global compliance and testing center at the Huawei Technologies Co. campus in the Longgang district of Shenzhen, China, on August 7, 2014. Brent Lewin/Bloomberg

computers themselves,” said Dario Gil, vice president of IBM’s Artificial Intelligence research. “It is the future of computing.” IBM’s inventions may be having the most impact on the nascent field, when judged by the number of times its research has been cited by others in their patent applications. The Armonk, New York-based company already has developed computers being tested by customers, including Oak Ridge National Laboratory in Tennessee, the Energy Department’s biggest lab, as well as finance companies like JPMorgan Chase & Co. and Barclays Plc., Gil said.

‘Tough problems’

Intel Corp., which started its own program two years ago, said the technology promises to be “transformational.” “There are many tough problems to solve before quantum computing is a commercial reality,” said Jim Clarke, director of quantum hardware at Intel. “Some of these problems involve materials science, quantum chip design and manufacturing­those are sweet-spot problems for Intel.” Clarke added Intel is competitive in the number of patents it’s

seeking, though many aren’t yet public. Applications are made public after 18 months. While there will still be a place for what’s being called “classical computers”—a category that include modern smartphones and even super computers—the quantum computers could have “an infinite number of applications” in the fields of life sciences, chemistry and agriculture, IBM’s Gil said.

‘Patent the potential’

It’s too early to say which company or country will be the leader in quantum computers, though at this stage it looks like US companies will excel in hardware, while Chinese and Japanese ones are focused on the software and applications, Patinformatics’ Trippe added. “Japanese and Chinese companies aren’t as concerned about building them as they are about how they’ll be used,” Trippe added. “They’ve started to patent the potential. The next five years are going to be pretty fascinating.” The US-China Economic and Security Review Commission, created by Congress in 2000 to assess national security implications of bilateral trade between the coun-

Studies by the US Chamber of Commerce and Bloomberg have independently shown that China is rising in its overall score for innovation, which includes education, government research and the number of patents. The World Intellectual Property Organization reported on March 21, that China is closing in on the United States in filing international patent applications. Quantum physics is one area in which the Chinese government, through its Ministry of Science and Technology, is beefing up its technological prowess, according to a report by the US Trade Representative that laid the groundwork for Trump’s tariff plans. The China Academy of Sciences and Beijing University are among the Chinese research firms seeking more patents on quantum information technology, according to Patinformatics. The Chinese government invested by giving a lot of money to companies and researchers to “replicate what we did in the US and elsewhere,” said Carl J. Williams, deputy director of the physical measurement laboratory at the US National Institute of Standards and Technology. “They’ve come a long ways.”

Encryption focus

The Chinese researchers are focused on encryption, based on their patent applications. In August 2016 China’s state news agency said the government had launched the world’s first quantum communications satellite, and a year later claimed to have sent the first “unbreakable” code from space.

Cities running on car batteries? Crazy idea that just might work By Stephen Stapczynski Bloomberg

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hen Damien Maguire moved to the countryside outside Dublin, he struggled to keep the lights on at home because of the town’s constant power outages. He found a solution inside his electric cars: Their batteries. A tinkerer who posts videos of his hand-built vehicles on Youtube, Maguire devised a wiring system that lets him suck power out of them when they’re parked in the garage. Now that the house and cars are connected, he can also use the batteries to store energy from his backyard solar panels, another power source that’s not totally reliable given Ireland’s weather. “You have the light bulb moment,” the 41-year-old electrical engineer said. “There’s a big battery in the car, so how about I use that?” An even bigger light bulb moment is happening for utilities and automakers, who want to use the batteries inside electric cars as storage for the entire public power grid. The idea, known as “vehicle-to-grid,” is to someday have millions of drivers become mini electricity traders, charging up when rates are cheap and pumping energy back into the grid during peak hours or when the sun simply isn’t shining. If it works—and it’s a big if—renewable energy could get much cheaper and more widely used. “We really, really need storage in order to make better use of wind and solar power, and electric cars could provide it,’’ said Daniel Brenden, an analyst who studies the electricity

A charging plug sits connected to an electric vehicle (EV) at a charging station in Jeju, South Korea. SeongJoon Cho/Bloomberg

market at BMI Research in London. “The potential is so huge.’’ Today, fewer than 1 percent of the world’s vehicles are electric, but by 2040 more than half of all new cars will run on the same juice as televisions, computers and hair dryers, according to estimates by Bloomberg New Energy Finance. Once cars and everything else are fed from the same source, they can share the same plumbing. As it stands, energy generated by wind and solar farms often goes to waste because there’s nowhere to store it. South Australia solved the problem by investing an estimated $80 million to $90 million to build the world’s biggest lithium ion battery on the edge of the Outback. The result is a massive cluster of white boxes that is essentially a

huge reservoir for electricity. Inside are the same batteries Tesla Inc. uses in its cars. But what if that reservoir was divided between millions of cars already on the road? That’s the vehicleto-grid concept. It’s promising because the newest electric vehicles can hold enough energy to power the average US home for several days. For most drivers, whose cars sit idle 90 percent of the time, sharing their batteries would make good use of a very under-utilized resource. (It’s like Airbnb, but with car parts instead of seldom-used apartments.) For the utilities, borrowing people’s batteries would mean not having to build or buy them.

Sounds awesome

IN the real world, though, there’s a

tangle of complications. Elaborate new computer networks would have to be built, carmakers and power companies would have to collaborate, and people would have to stop thinking of their cars as a private bubble. The main practical problem is getting drivers to charge up when there’s a power surplus, and getting them to give back when the public grid has a deficit, all the while making sure people’s cars never run out of juice. To get a sense of the difficulties, consider the struggle of the world’s No. 1 seller of electric cars, Nissan Motor Co., has had convincing customers in Japan to try a simple system like the one Maguire jerry-rigged for himself at his home in the Irish countryside. By allowing car batteries to serve as a residential power source, Nissan says its vehicle-to-home service cuts utility bills by about $40 per month. Still, only about 7,000 car owners have adopted the system in the six years since it started, a tiny number compared with the 81,500 Leaf EVs that Nissan has sold so far in the country. Declining to discuss any travails, a spokesman said the company is “very pleased” with its sales and sees growing consumer interest in the technology. Meanwhile, Nissan is trying other experiments. Last year it partnered with Japan’s biggest utility, Tokyo Electric Power Co., to design a vehicleto-grid system that takes the Maguire idea and ratchets-up the complexity. A small test this winter showed how hard it is just to get people to charge their cars at the right time. (Selling power back to the grid is a separate

can of worms.) Nissan and the utility convinced 45 of their own employees to install home chargers and try monitoring electricity demand on weekends, using a smartphone app. Even though volunteers got free shopping points on Amazon as a reward for buying power when there was glut, only about 10-percent succeeded. The big takeaway was that, since most people aren’t home in the early afternoon, the system won’t really work until there are fueling stations all around town at places like the mall or the park. The company is looking at lots of different ways to boost participation, according to Yukio Shinoda, a Tokyo Electric manager who helped organize the trial. The first company to offer an actual product that allows drivers to both buy and sell power is San Diego-based Nuvve Corp., which has succeeded by focusing on business customers in Denmark, a double-whammy of smart targeting. Company cars have predictable routines that make it easier for Nuvve’s software to calculate how much electricity can be sold back to the grid without running out of fuel on the road. (And Danes are seriously into renewable energy.) Since 2016, ten businesses with a total of 50 vehicles have bought the service, according to Nuvve, which teamed up on the project with Nissan and Italian utility Enel SpA. Tests are also underway at a handful of locations in Amsterdam, where Nuvve is collaborating with Mitsubishi Motors Corp. and Newmotion, a unit of Royal Dutch Shell Plc that operates charging stations throughout Europe.

A10 Tuesday, April 10, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

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editorial

People’s choice

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s there really a need to change the 1987 Constitution? Is it so outdated, inflexible, incoherent and obsolete that it poses a major barrier to our progress as a nation? Do we really need a new Constitution? Or do we need people who will follow and respect the Constitution we have right now in order to give life to its provisions? Perhaps it is the latter. For instance, the fact that the government consistently underinvests in education is the fault of our leaders in the government, who, despite the constitutional mandate to assign the highest budgetary priority to education, continue to allocate a bigger budget to debt servicing compared to education. They only pay lip service to the paramount importance of education to the future economic prospects of our nation. Or let us talk about empowering local governments, one of the goals of federalism. The present Constitution does not deny self-government to the people in the provinces. It does not deny local government the power to deal with local problems. The 1991 Local Government Code, which was based on our Constitution’s mandate to decentralize and provide for a more responsive and accountable government, gives a lot of flexibility for local governments to promote their constituents’ welfare, be it through effective financial decisionmaking or drafting policies for job growth. Perhaps we can do better with the Constitution that we have right now if we only follow it. If there is an overwhelming clamor from our people for Charter change, then we should support it. There lies the question, however. Do our people really want Cha-cha? And if they do, how do they want to go about it? The decision to change the Constitution, more so to overhaul it in order to change the very structure of governance itself, as those in favor of federalism propose, is far too important a decision to be left in the hands of politicians. No amendments to the Constitution must be made unless the Filipino people overwhelmingly support them. The people must decide whether they want to amend the Constitution to begin with and, if they do, what mode to use and what the amendments should be. The barangay and Sangguniang Kabataan elections next month could be an excellent way to gauge people’s sentiments by asking voters three questions: First, if they favor Cha-cha; second, if their answer is yes, do they want to do it through a constitutional convention or constituent assembly; and third, if they believe that our government system should be changed into a federal system. Not a few would argue that the public’s understanding of our Constitution and the issues involved in changing it are quite limited. We agree. In order for voters, for citizens, to make intelligent decisions about Cha-cha we must first have an extensive information-dissemination campaign. So, if the barangay elections might be too soon for such an exercise, then there could be other opportunities. The government could have done this years ago, actually, during other electoral exercises. The point is, the people must be directly consulted on Cha-cha. The Constitution reflects the highest principles of our nation. It defines what makes us a nation, as well as serves as the blueprint of how our people wish to be governed. The present Constitution acknowledges the sovereign will of the people—the people are the authority, and the legitimate purpose of our representatives in government is to give expression to the people’s will. Placing the decision to amend the Constitution in our people’s hands, therefore, would be in line with democratic governance. On the other hand, any move by Congress to change the Constitution without overwhelming public support cannot be seen as democratically legitimate. Direct consultation with our people through a referendum would put to rest the fears that legislators and other political leaders who want Cha-cha are only looking after self-serving concerns. More importantly, direct consultation would immediately answer the nagging question of whether the people really want to overhaul the Constitution in order to change government into a federalist setup. Cha-cha should be the people’s choice, not just the choice of our politicians. What an irony, indeed, it would be if the debate to change the people’s Constitution would shut our people out of the conversation.

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Diokno’s initiatives at wise and honest spending Manny B. Villar

THE Entrepreneur Continued from A1

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he 70-year-old DBM chief, a professor emeritus at the University of the Philippines, is now on his third stint in the same department under the Duterte administration. He held the same position under former President Joseph E. Estrada from July 1998 until Estrada’s ouster in January 2001. Prior to moving up to the Cabinet rank, Diokno served as DBM undersecretary for budget operations, from 1986 to 1991, during the administration of former President Corazon C. Aquino. In his career at the DBM, even under different administrations, Diokno has always been reformoriented, always seeking ways to make the government more efficient and honest in spending taxpayers’ money. Some of his early initiatives: As DBM undersecretar y in the Aquino administration, he provided technical assistance in the design of the 1986 Tax Reform Program, which simplified income tax and introduced the value-added tax, and the 1991 Local Government Code of the Philippines. In his less than three-year stint as DBM chief in the Estrada administration, Diokno succeeded in adopting reforms to enhance transparency and improve government efficiency in delivering vital services. These include the “what you see is what you get,” or WYSIWYG policy, a simplified system of

fund release for the General Appropriations Act. He utilized the rapidly improving information and communications technology to improve the government procurement system. With technical assistance from the Canadian International Development Agency, the GPS developed an electronic procurement system patterned after the Canadian model. Diokno’s latest initiative sustains his belief that moder n technology, like satellites, can be harnessed not only to improve efficiency but also to keep the government and its contractors honest. I’m referrring to “Digital Imaging for Monitoring and Evaluation,” or Project DIME. According to his official statement: “Project DIME will help ensure that every peso allocated to government programs and projects will be used efficiently and effectively.”

China’s ‘trade war’ disaster John Mangun

OUTSIDE THE BOX

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here’s a saying that if you owe the bank $1 million, that is your problem. If you owe the bank $100 million, it is the bank’s problem. That is the core of the so-called trade war that US President Donald J. Trump has been talking about implementing. Increased duties on steel imports at 25 percent and imported aluminum at 10 percent have started. The ignorance masquerading as analysis and misinformation you hear in the press and media could bring tears to a dead man’s eyes. Let’s begin with some facts. You know what facts are; information backed with verifiable data. Trump is proposing increasing the tariffs on goods the United

States imports from China, that would cover about $150 billion worth of trade. China responded, saying that it would also increase its duties on the imports from the US. That makes sense. The problem is that China is already starting the “war” from a position of weakness. It cannot

The project is a collaboration between the DBM and the Department of Science and Technology (DOST), which aims to monitor the status and speed of implementation of government projects, especially those with high value. Various technologies and expertise on data acquisition developed and acquired by the DOST will be used in the program, including Light Detection and Ranging, Open Roads Platform and Geostore and Geotagging. Satellites and drones will also be used in the program to cover areas that cannot be monitored through Lidar. Last year the two departments began monitoring sample projects, like the National Greening Program of the Department of Environment and Natural Resources, National/Communal Irrigation Systems of the National Irrigation Administration and the health department’s Health Facilities Enhancement Program. Results of the monitoring activity allowed the DBM to evaluate the status of projects and to come up with recommendations on whether or not to continue funding of a project, or how to improve the project. The DBM has selected the programs and projects that will now be monitored through Project DIME. These include the construction/improvement of access roads leading to seaports and airports, the North-South Commuter Railway, the Conditional Cash Transfer Program, Basic Education Facilities, Universal Access to Quality Tertiary Education, AFP Modernization Program, Local Governance Performance Man-

agement Program, Agricultural Machinery, Equipment, Facilities, and Infrastructures Program, Free Wi-fi Internet Access and the National Fisheries Program. President Duterte’s economic team is working on a tight schedule, as the flagship infrastructure program, “Build, Build, Build ” involves spending P8 trillion to P9 trillion to ensure that vital infrastructure is put in place by the time the President leaves office in 2022. Not all the projects will be completed in the next five years, but the Department of Public Works and Highways’s decision to shorten deadlines for completion of road and bridge projects, for instance, shows the team’s determination to complete as much as it could with the time allotted to it. One thing about Diokno’s reform initiatives: The use of satellites and other modern technology means that implementation of public projects will be transparent, so contractors and government officials, whose personal contacts are also diminished, would always be on their toes. The deliberate secrecy in many transactions between the government and the private sector in the past had drained the government coffers, with the people left with unfinished or even ghost projects. Hopefully, with Diokno as a very strong member of President Duterte’s economic team, the government could proudly tell the people: “This is where your taxes go.”

even counter the $150 billion, as it only imports about $130 billion in goods from the United States. In 2017 China exported $505 billion. While far from happening, if all trade between the two countries was stopped, China would lose $375 billion in net trade with the US. Countries have expressed outrage and fear—mainly fear—with the potential of the United States increasing tariffs, and with good reason. In 2017 the US imported $2.3 trillion worth of goods; the United States exported $1.6 trillion in goods. Therefore, the US ran a $797 billion global trade deficit. While China, the European Union and countries like South Korea and Taiwan are going nuts, they have put themselves in the shoes of the banker that is owed $100 million by a borrower who is not interested in paying. Along with being on the short end of a

trade war with the United States in terms of firepower, these “banks” depend on US trade for some of their economic prosperity. Global trade as a percentage of global GDP peaked in 2011 and has been going down. For China the peak came in 2006 as trade accounted for over 60 percent of GDP and is down to 38 percent last year. However, 16 percent of Canada’s GDP is based on trade with the US. Mexico is at 25 percent, with others as follows: Taiwan, 8.5 percent; Thailand, 7.5 percent; and China and South Korea, 5.5 percent. The arguments that China has effective retaliation options are highly optimistic. China may stop importing soybeans from the United States. The problem is that other suppliers—primarily from South America—cannot take up the slack .Bean prices from Brazil are already going higher and virtually all of the beans China See “Mangun,” A11

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

Opinion BusinessMirror

www.businessmirror.com.ph

Loan sharks operating in casinos beware

We must uphold the rule of law Ernesto M. Hilario

Cecilio T. Arillo

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HE Committee on Games and Amusements of the House of Representatives, chaired by Rep. Gus S. Tambunting of the Second District of Parañaque City, has created a technical working group (TWG) intended to criminalize nefarious credit and loan activities in the country’s casinos. The creation of the TWG committee was in reaction to House Bill 6249 filed by Party-list Rep. Virgilio S. Lacson of the Manila Teachers, who revealed that loan sharks operating in casinos charge 2 percent a day in interest to borrowers. Reports from the gaming industry reveal that casino creditors have been around since the time casinos opened in the country in the 1970s, Lacson said. Local loan sharks are known to operate in Newport City near the international airport and the sprawling Entertainment City in the reclaimed land in Manila Bay. “Each financier can lend up to P100 million a week to borrowers who have been losing in the casino in exchange for their cars, realestate properties and personal belongings such as expensive watches and jewelry,” Lacson said. “The incident in Resorts World Manila last year, which featured a gunman heavily indebted due to his accruing financial obligations from his creditors resulting in his gambling addiction, could have been prevented if proper mechanisms had been in place,” added Lacson, vice chairman of the Committee on Government Reorganization. During the hearing, the Philippine Amusement and Gaming Corporation (Pagcor) Assistant Vice President Arnold Ferdinand Salvosa said Pagcor fully supports the measure seeking to criminalize the operations of loan sharks inside casinos. Salvosa added Pagcor has consistently reminded and issued memorandums to their operations and licensed properties “that they should not tolerate the activities of loan sharks in the casinos.” The gaming body has issued warnings to all local casinos to ban from their establishments known loan shark syndicates victimizing big-time players, said Salvosa. T he proposed “ P rotec t ion Against Casino Loan Sharks Act of 2017” declares the State shall outlaw credit and loaning activities of loan sharks inside casinos as these pose imminent threat to the financial credibility and monetary viability of individuals. The State shall ensure that individuals continue to possess sound financial disposition and provided with legal means that shall protect them from accruing indebtedness by criminalizing loaning activities illegally operating inside casinos. T he bil l seeks to pena lize violators with prison mayor to reclusion temporal and a fine

Mangun. . .

continued from A10

imports is used as pig feed, which will raise food costs (read: inflation), which is the last thing the Chinese government needs. China can devalue their currency to offset the price increases. That worked so well in 2015 that the Shanghai stock market fell 46 percent, and GDP growth dropped 7 percent. China can sell its US Treasury debt and stop buying more. This would damage the US financial markets, to be sure. But

Any person soliciting, undertaking credit or loaning activities inside casinos, either physically or electronically in exchange for their cars, real-estate properties and other valuables as collateral, and charging interest rates for the principal amount borrowed, shall be guilty of illegal credit or loaning and upon conviction shall be penalized. of P100,000 to P500,000 at the discretion of the court. C a si no operators sh a l l be directly and principally liable jointly with the offender for the commission of the offense for civil damages, unless the casino operators are able to prove that the establishment exercised due diligence in preventing loaning activities inside casino premises. Any person soliciting, undertaking credit or loaning activities inside casinos, either physically or electronically in exchange for their cars, real-estate properties and other valuables as collateral, and charging interest rates for the principal amount borrowed, shall be guilty of illegal credit or loaning and upon conviction shall be penalized. Pagcor itself operates its own Casino Filipino-branded network nationwide. W hen the Arroyo government in 2008 opened the Philippine gambling market to the world, essentially removing Pagcor’s monopoly, the industry grew faster and by 2016, it was already worth P118 billion in terms of gross revenue, a tremendous increase from the P56 billion gross revenue earnings in 2012. According to Investment bank Credit Suisse, “the country’s gambling industry is projected to earn gaming revenue of $6 billion [P297.35 billion] this year, potentially making the Philippines among the top 4 in the world.” The sophisticated local gaming industry is now competing with multibillion-dollar operations in neighboring Macau, Taiwan, Malaysia and Singapore, and as far as Australia, New Zealand and Las Vegas, countries known for their integrated casino-entertainment enclaves and where loan sharks are strictly prohibited. To reach this writer, e-mail cecilio.arillo@gmail.com the moment the thought that China is selling hits the markets, the response will be “Sure China, we will buy your US debt. How does 10 percent of the face value sound?” One expert has concluded that China’s “nuclear option” is to stop all exports of rare Earth minerals, vital to today’s technology. It produces more than 92 percent of them. The problem is that stopping these exports to the world would be like the psycho that kills his ex-girl with “If I can’t have her, nobody can.” The fun has just begun.

Tuesday, April 10, 2018 A11

ABOUT TOWN

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e’re glad that last week, the Supreme Court ordered Solicitor General Jose C. Calida to deliver on his promise to submit the Philippine National Police (PNP) investigation reports on the killing of more than 4,000 drug suspects in President Duterte’s brutal war on drugs. We certainly did not expect the 12 associate justices of the High Tribunal to vote unanimously to reject Calida’s appeal to rescind their December 5, 2017 order requiring the submission of the official PNP reports on the killings in the course of implementation of “Oplan Tokhang.” At first, Calida had agreed to comply with the tribunal’s order within 60 days but eventually opposed it, invoking national security. He claimed that producing the documents involves information and other sensitive matters that could adversely affect follow-up operations of the police and other law enforcement bodies, aside from endangering the lives of those on the list and those already in custody. But the justices deserve praise for standing firm on their previous order to Calida and the PNP to provide them with documents containing the names, addresses, police operational plans and other important information on Oplan

Tokhang operations from July 1, 2016 to November 30, 2017. The High Tribunal acted on the petition of the Center for International Law (Centerlaw), representing two groups of petitioners— families of slain drug suspects— who challenged the legality of the war on drugs and sought protection from the court against the PNP. Not unexpectedly, Centerlaw lauded the Supreme Court (SC) decision as a “triumph of the rule of law.” We agree completely. Our worry, however, is that the police may not comply with the SC order. PNP chief Director General Ronald M. dela Rosa said last year the records could not be released without clearance from the President. Now, the PNP is saying they would release records only on a case-to-case basis. What are they afraid of, if they keep saying that all cases of nanlaban or drug suspects who fought back and were killed were legitimate police operations. The SC is not the only institu-

Our worry, however, is that the police may not comply with the Supreme Court order. PNP chief Director General Ronald M. dela Rosa said last year the records could not be released without clearance from the President. Now, the PNP is saying they would release records only on a caseto-case basis. What are they afraid of, if they keep saying that all cases of nanlaban or drug suspects who fought back and were killed were legitimate police operations. tion asking the PNP to release data on the drug killings. The Commission on Human Rights (CHR) has also urged police authorities to immediately comply with the SC order as they said this is a first step to ensure that the rule of law still prevails in the country. More than this, the CHR correctly asserts that there would in fact be no need for international bodies such as the International Criminal Court and human rights groups to intervene in the human rights situation in the country if the government would show serious commitment to investigate killings linked to the war on drugs. “We are hopeful that the SC decision will help the commission in its independent probe of cases of

The tragedy of James Comey By David Leonhardt New York Times News Service

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ames Comey is about to be ubiquitous. His book will be published next week, and parts may leak this week. Next Sunday, he will begin an epic publicity tour, including interviews with Stephen Colbert, David Remnick, Rachel Maddow, Mike Allen, George Stephanopoulos and The View. All of which will raise the question: What, ultimately, are we supposed to make of Comey? He may be the most significant supporting player of the Trump era, and his reputation has whipsawed over the last two years. He’s spent time as a villain, a savior and some bizarre combination of the two, depending on your political views. I think that the harshest criticisms of Comey have been unfair all along. He has never been a partisan, for either side. Over a long career at the Justice Department, he was driven by its best ideals: upholding the rule of law without fear or favor. His strengths allowed him to resist political pressure from more than one president of the United States. Yet, anybody who’s read Greek tragedy knows that strengths can turn into weaknesses when a person becomes too confident in those strengths. And that’s the key to understanding the very complex story of Comey.

Long before he was a household name, Comey was a revered figure within legal circles. His rise was fairly typical: first a federal judge’s clerk, then a prosecutor, eventually a political appointee. But he was more charismatic than most bureaucrats—6 feet 8 inches tall, with an easy wit and refreshing informality. People loved working for him. If you read his 2005 good-bye speech to the Justice Department, when he was stepping down as George W. Bush’s deputy attorney general, you can understand why. It’s funny, displaying the gifts of a storyteller. It includes an extended tribute to the department’s rank and file, like “secretaries, document clerks, custodians and support people who never get thanked enough.” He insists on “the exact same amount of human dignity and respect” for “every human being in this organization,” and he quotes 18th-century preacher John Wesley: “Do all the good that you can.” Above all, though, the speech is a celebration of the department’s mission. Many Justice Department officials, from both parties, have long believed that they should be more independent and less political than other Cabinet departments. Comey was known as an evangelist of this view. To be a Justice Department employee, he said in his good-bye, is to be “committed to getting it

right, and to doing the right thing, whatever the price.” It wasn’t just an act, either. Comey sometimes chided young prosecutors who had never lost a case, accusing them of caring more about their win-loss record than justice. He told them they were members of the Chicken Excrement Club (or something like that). Most famously, in 2004, he stood up to Bush and Dick Cheney over a dubious surveillance program. But as real as Comey’s independence and integrity were, they also became part of a persona that he cultivated and relished. The reason that people knew about his defiance of Bush and Cheney is that Comey himself told Congress, at a stage-managed 2007 hearing. As a former Justice official later told journalist Garrett Graff, “Jim Comey always has to be positioned oppositional to those in power.” With this background, you can understand—though not excuse— Comey’s great mistake. He was the FBI director overseeing the investigation into Hillary Clinton’s private e-mail server. He and his team decided that she had not done anything that warranted criminal charges. And he knew that Republicans would blast him as a coward who was trying to curry favor with the likely future president. So, he decided to go public with his explanation for not charging

Kick the squatters out of the Capitol

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n most of the United States, sleeping in the office is frowned upon. Two notable exceptions are Silicon Valley—and Capitol Hill. As many as 100 members of Congress, including the speaker of the House, bunk down in their work spaces every night. For the sake of their fellow government employees and the public, they need to wake up. The modern practice of congressional squatting dates to the 1980s, when future Majority Leader Dick Armey crashed in the House gym. The ranks of the “in-office caucus” swelled with the influx of Tea Party Republicans in 2010; some members keep wardrobes in their

offices and sleep on cots or inflatable mattresses. Many portray their refusal to rent property in Washington as a mark of virtue, signifying rejection of the swamp’s corrupting culture. It may also be illegal. Fire codes aside, squatters benefit from free utilities, cable TV and Internet access and cleaning services. This may violate congressional ethics rules, which prohibit members from using official resources for anything other than incidental personal needs. At the least, lodging on government premises should be treated as a taxable fringe benefit— in the same way that congressional

parking spaces are. Aside from the legal considerations, there are other issues. The risk of elected representatives appearing in various states of undress is more than awkward—it is unacceptable, especially given revelations about the prevalence of sexual harassment in the Capitol. Aides are often obliged to clean up their bosses’ living quarters, which only adds to the dysfunction and abuse that characterizes office environments on the Hill. To be sure, maintaining a second home isn’t a trivial expense for most lawmakers, even on a salary that’s roughly three times the

extrajudicial killings through information and data sharing with the PNP. If we can sustain developments such as this, as well as expediently demonstrate that our judicial systems are functioning as they should, it will be a concrete manifestation that the State is willing and able to carry out investigation or prosecution,” the CHR pointed out. The CHR earlier asked the PNP to open their case folders, including police blotters, spot reports, investigation documents, forensic records, inventory reports and affidavits. “We look forward to the PNP’s cooperation without condition on this matter,” the CHR said. “We believe that their swift action would allow the wheels of justice to turn faster, given the clamor for transparency and accountability for alleged human-rights violations linked to the government’s antidrug campaign,” it added. The CHR reiterated the need to ensure accountability for victims of the war on drugs. “In the spirit of due process and the rule of law, these cases need to be tried in proper courts and should not remain as mere files stacked in shelves to gather dust,” it said. Ours is a government of laws and not of men. The rule of law is the bedrock of our democratic system. We agree with the adage that “where law ends, tyranny begins.” If the PNP has nothing to hide, they should readily accede to the SC order in the interest of full transparency. (E-mail: ernhil@yahoo.com)

Clinton and to criticize her harshly. He then doubled down, releasing a public update on the investigation 11 days before the election, even as other Justice officials urged him not to. Department policy dictates that investigators aren’t supposed to talk publicly about why they are not bringing charges. They especially don’t do so when they could affect an election. Comey, however, decided that he knew better than everyone else. He was the righteous Jim Comey, after all. He was going to speak truth to power. He was also, not incidentally, going to protect his own fearless image. He developed a series of rationales, suggesting that he really had no choice. They remain unpersuasive. When doing the right thing meant staying quiet and taking some lumps, Comey chose not to. His tragic mistake matters because of the giant consequences for the country. He helped elect the most dangerous, unfit American president of our lifetimes. No matter how brave Comey has since been, no matter how honorable his full career, he can never undo that damage. As he takes over the spotlight again, I’ll be thinking about the human lessons, as well the political ones. Comey has greater strengths than most people. But for all of us, there is a fine line between strength and hubris.

median US household income. Other countries provide living allowances to legislators, or offer space in public housing or dormitories. A $2,500 monthly housing stipend, as suggested by a departing member of Congress last year, may not be realistic in a political climate where members just eliminated a meager $3,000 annual tax deduction for living expenses. But it’s better than living in a lobbyist’s condo or office squatting. The US Capitol was designed not as a congressional dormitory but as a place to conduct the people’s business. As the bartender might say: You don’t have to go home, lawmakers, but you can’t stay here. Bloomberg View

2nd Front Page BusinessMirror

A12 Tuesday, April 10, 2018

Capa: Palawan can cushion impact of Boracay closure

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By Lorenz S. Marasigan

@lorenzmarasigan

he government and commercial airlines may seize a “golden opportunity” found in the province of Palawan, as the island could act as a buffer zone that could potentially reduce the impact of the closure of Boracay on the aviation and tourism sectors in the Philippines. Capa Center for Aviation, a think tank based in Sydney Australia, noted in a report that the government and the private sector may promote Palawan as an alternative destination to foreign visitors, as the island’s beaches continue to pique the interest of tourists. “Successfully promoting Palawan with travel agents in China and Korea and moving crews from Kalibo to Puerto Princesa would not be easy,” it said. Philippine Airlines (PAL), Philippines AirAsia and Cebu Pacific operate several international flights in and out of Kalibo International Airport—one of the two gateways to the island of Boracay. AirAsia currently holds the lion’s share of Kalibo’s international traffic. “However, this is a golden opportunity for Palawan, and is also a worthwhile investment from federal tourism authorities, as successfully moving Kalibo’s international flights to Puerto Princesa could help avoid a decline in total visitor numbers to the Philippines after the closure of Boracay.” Kalibo currently has an average of 24 daily return flights, with about 60,000 weekly seats. It has three domestic destinations and 13 international destinations. Capa said Palawan is one of the best destinations in the Philippines that could easily absorb traffic that was supposed to be for Boracay, given the recent upgrade in its airport infrastructure.

Continued from A1

We have reached a turning point in the global fight against corruption: only a coordinated response among all partners—government, business and civil society—will lead to meaningful reform and lasting change. The year 2018 will hopefully provide fora for discussions on the role of international cooperation and multilateralism in building a culture of integrity. ■ The OECD guides countries in putting integrity strategies into practice across the whole of government and whole of society. ■ The Open Government Partnership (OGP) provides a platform for government and civil society to work together on national and local level reforms. These reforms are put together into OGP action plans, which can also complement commitments made in other forums. ■ Transparency International (TI) is leading a global movement of civil-society organizations against corruption, holding governments and businesses to account and inspiring activists and advocates to stand up for transparency. With more than one hundred chapters worldwide, TI released its flagship publication, the Corruption Perceptions Index, which showed that most countries are making little to no progress in curbing corruption, while activists and journalists are risking their lives to speak out. As part of the Global Anti-Corruption Consortium, TI collaborates with local partners and investigative journalists, identifies structural weaknesses and corruption risks in-country, and spotlights corruption scandals in the media while pushing for policy change.

The number of seats available for Kalibo flights weekly

“There is an opportunity for tourism authorities on Palawan Island, an emerging tourist destination, to attract AirAsia international flights from China and South Korea. Puerto Princesa Airport, the main gateway to Palawan, opened a new international terminal in 2017,” the think tank said. Boracay is the third -largest aviation market in the Philippines, after Manila and Cebu. Its closure will have an impact on the three carriers, as Boracay accounts for approximately 6 percent of traffic at Cebu Pacific and PAL, and 22 percent at AirAsia. Philippine authorities have decided to close the island for six months starting April 26, as various government agencies start addressing the health and environmental messes on the island. “Once Boracay reopens, the new Puerto Princesa flights could continue, since Philippines AirAsia, PAL and Cebu Pacific all have enough aircraft on order to support maintaining any new flights to Puerto Princesa—or other alternative tourist destinations—at the same time as resuming the Kalibo flights,” Capa noted.

Corruption in 2018: Will we see change?

Turning ideas into action:

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IDYLLIC GETAWAY One of the Philippines’s top tourist destinations, El Nido, Palawan, was recognized by travel web site TripAdvisor as among the top destinations on the rise. It ranked second in Asia and was voted as the world’s sixth destination on the rise in 2016. NONIE REYES

Carriers scale down flights

Local carriers have decided to scale down their flights to the bare minimum in support of the government’s decision to temporarily close or limit access to Boracay for urgent major environmental rehabilitation of the island. Philippine Airlines will scale down its services to Caticlan and Kalibo airports for a six-month period beginning late-April. It w ill, thus, operate nine weekly flights between Manila and Kalibo and seven weekly flights between Manila and Caticlan to maintain continued links to these gateways to Boracay and Aklan province. All other Caticlan and Kalibo

flights from Manila will be suspended from April 20 to October 27, while flights to Caticlan from Cebu and Clark will be suspended from April 26 to October 27. Cebu Pacific is also limiting its flights to both airports from its different hubs in the Philippines. From April 26 to October 27, flights between Manila and Kalibo will be limited to seven per week. Flights from Manila to Caticlan and Cebu to Caticlan will also be scaled down to seven. AirJuan, on the other hand, will cancel all its flights between Tagbilaran and Caticlan from April 26 to October 25, but will continue operating its operations between See “Capa,” A2

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Maintaining momentum through global dialogue: These efforts, along with countless others, will feed the integrity, anticorruption and transparency debates taking place during 2018. ■ On March 27 and 28 the OECD Global Anti-Corruption and Integrity Forum, one of the first big milestones of 2018, took place in Paris. Here, the international debate focused on how integrity contributes

to a level playing field for business, reduces socio-economic inequalities and makes public policies more effective—thus increasing the benefits of globalization for all. ■ The next multi-stakeholder dialogue will take place at OGP’s 5th Global Summit in Tbilisi from July 17 to 19, where the current government and civil society cochairmen of OGP; the government of Georgia has made anticorruption a priority for the agenda. ■ Finally, these conversations will culminate with the 18th International Anti-Corruption Conference (IACC) in Copenhagen from October 22 to 24. This year’s theme, “Together for Development, Peace, and Security: Now is the Time to Act,” builds on previous IACC priorities to spur movement throughout the global community and to turn promises into collective action. IACC is currently accepting proposals for workshops from now through 15 April.

What’s happening in the Philippines?

Yes, the Philippines is part of the OGP, but there is not much information on what the OGP task force is doing. The Integrity Initiative Inc., which is determined to bring government and the private sector together in the fight against corruption, is in a state of reorganization and is making little progress. The European Innovation, Technology and Science Center (EITSC) is creating a Compliance and Ethics Forum on May 8, which will convene government, civil society and business leaders. The forum will: 1) Discuss how ideas brought to the forum can be pursued at national and local level, including through OGP action plans; 2) Explore follow-up opportunities for collaboration after the forum; and 3) Identify key milestones to check throughout 2018. EITSC is looking forward to productive conversations at the forum to advance both country and collective action on integrity and anticorruption. Comments are welcome—contact me at Schumacher@eitsc.com.

Meat producers, importers start lobby process for MDM tariff Continued from A1

Meanwhile, segments of the meat industry—represented by the United Broiler Raisers Association (Ubra), Pork Producers Federation of the Philippines (ProPork), Meat Importers and Traders Association (Mita) and Philippine Association of Meat Processors Inc. (Pampi)—have started voicing their contrasting views, as Manila commits to enact the law that will finally end its era of quantitative restriction (QR) for rice. While the rice-tariffication bill is pending and the Philippines continues to use the QR scheme way beyond the deadline set based on World Trade Organization (WTO) commitments, the country was forced to set lower tariff rates for certain farm products as a trade-off, including meat products. While Ubra and ProPork understand the need to set temporary concessionary rates, they expressed alarm over the United States government’s call on President Duterte to make the lower rates permanent.

‘Unfair’

In an interview with the BusinessM irUbra President Elias Jose M. Inciong said it would be unfair if the Philippines would retain the concessionary rates on agricultural goods ror,

even with the end of QR regime. “If what they mean is we all go back to the original agreement [that] everything is 40 percent, we are in a complete agreement. But if they mean the concessions for extending the QR or the special treatment on rice will become permanent, we will not have an agreement,” he said. “Precisely, those concessions were made in consideration for the QR. Without that extension for the QR, what is the sense of the Philippines maintaining those rates?” Inciong added. In the 2018 National Trade Estimate Report on Foreign Trade Barriers of the US Trade Representative, Washington is asking Manila to consider making the most-favored nation (MFN0 rates of duty under EO 23 permanent. The EO issued in May of last year prolonged for another three years the reduced rates on farm products as part of the Philippines’s tariff commitments to the WTO. One product that had lowered duties under EO 23 was mechanically deboned meat, known as MDM. It was slapped with a tariff of 5 percent, and is bound to remain at that rate until 2020 before reverting to 40 percent in 2021. The US wants the Philippines to keep the tariff on MDM at 5 percent, along with cheese at 1 percent. This does not play well with Inciong.

“That is unfair to us in the poultry sector, as well as to the Philippines. It will be unfair to the Philippines because we will be giving away something for nothing. For what? That is imperialism. They want something and it is not clear what do we get in return,” Inciong said. His sentiments were shared by ProPork President Edwin G. Chen, who, like Inciong, does not see any logic for Manila to keep the lower tariffs for good. “In the pork sector, we are requesting the Tariff Commission to bring back the rates to its original rate [40 percent] in 1996. Our government uses pork and chicken to get rice quantitative restrictions from its trading partners, but we are not renewing the QR on rice, therefore, the concessions granted by our government will no longer be needed,” he told the BusinessM irror. “We are asking our government to bring back the duty of offals, fats and skin to the rates of prime cuts. This will simplify tariffication and prevent misdeclaration and technical smuggling,” Chen added. If he is to be asked, Chen said the government should now revert the tariff on MDM to 40 percent. He also warned that if the recommendation of the US is heeded, local meat producers will be at the short end of the stick. “We want the tariff rate back to 40

percent and not what the US wants at 5 percent. If our government agrees to what the US wants, most of our small and medium farm enterprises will not be able to compete with the US pork producers. They are highly subsidized by their government, while in our case, we have little to no government support,” he said.

‘Good for consumers’

But if meat producers are resistant to the United States’s policy proposal, meat importers and processors, on the other hand, are backing the measure. The Mita and Pampi support Washington’s call to the President to keep the current concessionary rates for good. For Mita President Jesus C. Cham, permanently enforcing the lower duties will benefit the buying public, as it will affect the prices of goods that are reliant on MDM. This is particularly favorable to what Cham labeled as the “lower classes,” who he claimed to be major purchasers of processed meat. “The Philippines granted these concessions fully aware that they are not produced locally in sufficient quantities anyway. All the more so now that these products—MDM in particular—are the source of low-cost proteins to the lower classes,” Cham told the BusinessM irror.

Pampi Executive Director Francisco J. Buencamino is also of the view that lowered tariff on MDM will benefit not only meat processors, but also consumers. He said meat processors will only be able to “hold down prices” of their products if the reduced rates of duty are maintained. “Because we use MDM extensively for economy products of processed meats, such as hotdogs, luncheon meat and meat loaf, the advantage of lowered prices will be affected when we revert to 40 percent. We will be unable to hold down prices of our products as we have successfully done in the last 15 years,” Buencamino told the BusinessM irror. He said his group will be pushing for the decoupling of the treatment on MDM from the treatment on rice. “We, therefore, will be submitting a request to detach the treatment of MDM from rice for the interest of Filipino consumers,” Buencamino added.

Lopez agrees

“Yes,” Lopez said when asked if he is in favor of keeping the rates. “In fact, we were the ones who extended that. Even before the tariffication of rice, we see it as an important support to the local industry so that there will be a good entry of raw materials here.” “That means we are expecting prices

of meat to not go up if we keep the tariff at 5 percent, especially on MDMs. If you ask the DTI [Department of Trade and Industry], we will continue to support that policy,”Lopez said in English and Filipino. “That is why we are saying that if we are to be asked, we would like to keep it at that. It doesn’t have to be reverted back to higher tariff,” the trade chief said. “MDM is not directly competing. That is why it makes sense for us to keep it because there will be no injured local industry and there are a lot of users—our canned meat products and manufacturers. As of now, there are more users, beneficiaries, than the affected local competition, local industries,” he added. “You put it as part of the tariff-reform program. The tariff reform is continuing, meaning, there is a gradual lowering of tariff rates. So you keep it there, put it there, to include it. Then we have to undergo the process wherein there will be a Tariff Commission hearing, hearing with all the stakeholders in that particular product to make it permanent.” Legislators have yet to convert the expired QR on rice of the Philippines into tariff. Until such time the agricultural tariffication law is amended, or until June 30, 2020— whichever comes first—the concessionary rates indicated under EO 23 will be implemented.