BusinessMirror April 12, 2018

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Thursday, April 12, 2018 Vol. 13 No. 180

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ith exports already down and the looming United StatesChina trade war threatening to hurt global trade, the National Economic and Development Authority (Neda) said the government should now intensify efforts to diversify the country’s export destinations.

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PHL needs to focus on new markets as trade war looms By Cai U. Ordinario @cuo_bm & Elijah Felice E. Rosales @alyasjah

2016 ejap journalism awards

Unions continue to rage against the ‘endo’ issue

$4.66B

Rene E. Ofreneo

The country’s merchandise export earnings in February, down 1.8 percent

laborem exercens

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n 2017 the Department of Labor and Employment (DOLE) issued Department Order No. 174, which tightened the rules on the registration of “legitimate” manpower agencies, now generally referred to as “service contractors.” Capitalization was increased to P5 million (from P3 million) and registration fee, from P25,000 to P100,000. Another new rule: Failure of a service contractor to provide employment to an employee after the end of a “Service Agreement” entitles the employee to the payment of separation benefits. These rules failed to impress the labor federations. They kept asking: Where is Duterte’s promise to end contractualization?

Neda Undersecretary Rosemarie G. Edillon identified Russia, Malta, Poland, the United Arab Emirates, Italy, India, Belgium and Mexico as among the nontraditional markets where more marketing Continued on A12

Diokno ‘not happy’ with Duterte hometown could pace of infra showcase country’s first spending rapid-bus transit system Continued on A10

₧240.3B

‘Powering the Philippines’ The American Chamber of Commerce of the Philippines Inc. and General Electric (GE) organized a conference, dubbed “Powering the Philippines,” which discussed the future of renewable energy in the country at a hotel in Bonifacio Global City in Taguig City on Wednesday. The speakers at the conference were (from left) Ramon Chua, vice president, head of Wind Ilocos Norte Business Unit, Business Development Group-Solar and Wind Technologies; Salvador Castro Jr., president and CEO of CleanTech Global Renewables; Department of Energy Undersecretary Felix William Fuentebella; Wee Khoon Oh, managing director at Sobono Energy Pte. Ltd.; Jose Silvestre Natividad, president of Philippine Hydro Inc.; Jose Layug, chairman of the National Renewable Energy Board; Steven Oswald, general manager on commercial operations of On-shore Wind, GE Renewable Energy; and Jocot de Dios, CEO, GE Philippines. NONIE REYES

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@llectura

eaders in the power sector say there is “sufficient” supply to meet the demand for electricity during these summer months despite the scheduled shutdown of a number of power plants. But can they assure there will be no electricity shortage if demand

shoots up higher than expected, or if major power plants suddenly conk out? “Power supply this summer, based on our latest evaluation, is sufficient to meet demand,” assured Alfonso G. Cusi, secretary of the Department of Energy (DOE). In its latest forecast, the agency said this year’s peak demand

PESO exchange rates n US 51.9920

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would reach 10,561 megawatts (MW) from 2017’s actual demand of 10,054 MW, pegging growth rate at 5.04 percent. The National Grid Corp. of the Philippines (NGCP) shares the same data. Based on secondquarter reserve profile, peak demand in the Luzon grid will occur

lt hough inf rast r ucture spending has picked up considerably, Budget Secretary Benjamin E. Diokno is still concerned that agencies are not performing up to par when it comes to the implementation of the administration’s “Build, Build, Build” (BBB) program. Diokno said he is not happy with the progress of the government’s massive infrastructure upgrade program, calling on concerned agencies to further improve the “utilization of funds and the delivery and completion of programs and projects.” Infrastructure spending in January hit P43.3 billion, surging 25.2 percent year-on-year, although this

Continued on A12

See “Diokno,” A2

Power supply ‘sufficient’ throughout summer By Lenie Lectura

The government spending in the first two months of the year, up 37 percent

By Manuel T. Cayon

@awimailbox Mindanao Bureau Chief

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AVAO C I T Y— A g lob a l posit ioning system (GPS)-linked bus in Lasang heads off to the next station in Bunawan—around 3 kilometers away—to fetch passengers queuing up at the station, which has a big rectangular monitor that flashes the expected time of arrival of the bus from Lasang. At the west end of the highway in Toril, one bus just took off toward Dumoy, at the crossing highway at Dacoville Subdivision, where the Toril bus driver is informed by his monitor that passenger traffic is building up ahead of the morning shift for factory workers. Later in the day, the drivers of these buses may have to skip some stations when station checkers send messages of scarce passenger volume, while the succeeding stations flash signals of high passenger volume. At highway intersections, electric tricycles keep

10,000 The number of workers needed to run Davao City’s rapid-bus transit system

shuttling people to the station and back to the different subdivisions and office buildings along the interior villages formerly served by the defunct jeepneys. This is the likely picture of the streets here once the rapid bus transit system covering a 43-km stretch of highway from Lasang in the north to Toril in the west is implemented in lieu of the jeepneys by 2020. Jeepneys by that time would have been scrapped already in favor of the more than 1,000 bus units to be fielded, all units already equipped with the electronic installations to connect it to more than 30 bus stations and to the traffic lights system. See “Duterte,” A2

n japan 0.4850 n UK 73.7143 n HK 6.6237 n CHINA 8.2776 n singapore 39.7189 n australia 40.3406 n EU 64.2517 n SAUDI arabia 13.8649

Source: BSP (11 April 2018 )

A2 Thursday, April 12, 2018

BMReports BusinessMirror

PHL needs to focus on new markets as trade war looms Continued from A12

Businesses in the Philippines, she noted, will largely benefit from timely and relevant information on export procedures and documentation, as well as on products that are currently in demand in the global market. Exporters, Edillon added, can also take advantage of preferential schemes like the US Generalized System of Preferences (GSP), which covers about 18 percent of Philippine exports to the country— including nonalcoholic beverages, electrical machinery and equipment parts—or about $1.5 billion worth of exports in 2017. She also said agricultural exports are seen to expand following the Senate ratification of the country’s free trade agreement with the European Free Trade Association States last month, as it covers 90 percent of tariff lines for agricultural products. “For instance, existing exporters to the US and those planning to expand to the US market will be glad to know that the US GSP has been extended until December 31, 2020, following the signing of the US Consolidated Appropriations Act last month,” Edillon said.

Exporters disappointed

The Phi l ippine Ex por ters

Diokno. . .

Continued from A1

was mainly on account of completed projects of the Department of Public Works and Highways, the disaster-mitigation and laharcontrol works in Central Luzon, and the purchase of communication equipment as part of the Department of National DefenseArmed Forces of the Philippines modernization program. “I am not happy with that. There’s going to be a lot of catching up [to do],” Diokno said, noting the need to pick up the pace of infrastructure spending in the remaining eight months of the year. “It [BBB program] is not going to be finished by one year so, as long as we are addressing the right of way, the infrastructure, we have

Ortiz-Luis also said exporters will have to find out ways to weather the impact of the looming trade war between China and the US. The trade barriers the two countries are setting up are easily seen as an obstruction for growth, but Ortiz-Luis said these could also be used by the exporters to their advantage. Overall, he said work has to be done in the coming months for the country to hit its growth target for exports this year. “We are still hopeful that we will meet our target for the year at 5-percent to 6-percent growth,” he added.

Confederation Inc. (Philexport) President Sergio R. Ortiz-Luis Jr. said the sector is supposed to sustain the momentum it gained in the previous year, but it seems the opposite is happening. “We are disappointed because we thought the growth will persist. We are thinking that under the [export development] plan, we will make about a 5-percent growth for the year,” Ortiz-Luis told the BusinessMirror. “However, we are cleaning that up. There are a lot of adjustments in the market, and we expect that the second quarter will be better.” Ortiz-Luis explained there might be slowdown in the performance of exporters, as they adjust to the demand and competition in the market. “There has been a blip from the previous year—the growth was way beyond expected—so the manufacturers are probably adjusting,” he said. “There is lag time in keeping up with growth. We would like to think that toward the second quarter, the exports might pick up.” They have a lot of catching up to do, however, after the country’s merchandise exports grew by 9.53 percent last year to hit $62.87 billion. Electronics exports contributed 52 percent of this number, after accelerating by 11 percent to $32.7 billion from $29.4 billion in 2016.

The Philippines is not picking sides in the looming trade war between China and the US, Presidential Spokesman Harry L. Roque Jr. said this in a news briefing in Hong Kong when asked to clarify the President’s position on the matter. Roque also cited that the President also noted the need for Beijing to “defend the East.” “It was an endorsement of China’s position that the world trading system should be governed by rulesbased WTO [World Trade Organization] system,” he said. Foreign Secretary Alan Peter S. Cayetano added that he is hoping that this trade tussle will be “short lived” and will not affect the

to identify the contractors, then it’s easier to do this catch-up plan,” he added. Overall spending, however, was a different story, as in February alone, the government spent P240.3 billion, up 37 percent, data from the Cash Operations Report of the Bureau of Treasury showed. “ The fiscal program of the n at i o n a l g o v e r n m e nt i s o n track, backed by the strong performance of both government spending and revenue collection,” Diokno said. “The Development Budget Coordination Com m it tee w i l l cont i nue to monitor relevant indicators on the country’s finances to ensure that we hit our financial and development targets.” Productive spending for the said month amounted to P204.1 billion, while interest payments reached

P36.2 billion. Net of interest payments, productive spending soared by 35 percent in February. The deficit from January to February widened by 140 percent to P51.5 billion after the small surplus posted in the first month of the year was negated by the P61.7billion deficit in February. The annual deficit target for 2018 is P523.7 billion, equivalent to 3 percent of GDP. Total revenues for the first two months of the year amounted to P417.4 billion, higher by P65.3 billion, or 19 percent, compared to the same period last year. Total revenues also reached P178.5 billion in February, up by 18 percent year-on-year, with tax revenues amounting to P163.2 billion and nontax revenues reaching P15.3 billion. Tax revenues got a significant

PHL not picking sides

Philippines too much. “In all kinds of war there are no winners.” A research note from RHB Bank Berhad dated April 4 said the Philippines could be the most at risk country in Asean because of the trade war.

Deficit widens

The country’s import bill grew 18.6 percent to $7.72 billion in February 2018 from $6.51 billion in February 2017. With this the Philippines’s balance of trade in goods deficit widened to $3.06 billion in February 2018, nearly twice the $1.77-billion deficit in February 2017. Still, Asian Development Bank Philippine Country Office Economist Aekapol Chongvilaivan said most of the country’s imports are machinery, which signified domestic-driven growth. He added that this has already been factored into their growth forecasts for 2018 and 2019 and, despite external risk factors, exports are still expected to do well this year. “[While] the country is running a trade deficit, it is not alarming, it is not a sign of overconsumption. It is not a sign of overspending of the country. It is a sign of a growing domestic demand,” Chongvilaivan said in a briefing. With Bernadette D. Nicolas

boost from the implementation of the Tax Reform for Acceleration and Inclusion law and the improved collection of the Bureau of Customs. “We are off to a good start for Fiscal Year 2018, and we are optimistic that we will cut down underspending even further from the 2.4 percent recorded last year, which is net of interest payments,” Diokno said. “We have instructed the line agencies to implement the 2018 National Budget as if it were a cash-based budget. This is why we expect further improvement in the utilization of funds and the delivery and completion of programs and projects.” For 2018 disbursements are targeted to reach P3.313 trillion, while revenues are targeted to increase to P2.789 trillion. Bernadette D. Nicolas

www.businessmirror.com.ph

Senate. . .

Continued from A12

“They and their ilk wronged the poor and suffering Filipinos for the sake of political expediency and greed,” the Gordon committee report said. “One need not be a lawyer to conclude that, indeed, a grave social injustice was committed here.” The Senate probers also reported that Aquino “did not exercise utmost diligence expected of a President when, without a hint of care, he went ahead with the program even if “the clinical trials were not over, therefore not complete. The trials were supposed to end in November 2017, and yet they were ordering it for mass vaccination.” The report’s findings added that Aquino “deliberately refused to heed the warnings that were given out by experts as to its dangers. Neither did he listen, nor paid attention to those who really knew how long the ill effects would be.” Former Congressman Erin Tanada, Liberal Party vice president for External Affairs, questioned the timing of the release of the

Duterte. . .

Continued from A1

“The stations are equipped with electronic monitors and real-time phasing of bus schedules,” City Planning Chief Ivan C. Cortes said. These stations, as well as the buses, are linked to the entire rapidbus transit system that was eyed for testing and implementation here and in Cebu City. While Cebu would have been the earliest to make it, its narrow streets inherited from the Spanish colonial era thoroughfares made it scrapped the project, he said. The project feasibility for Davao that was started in 2016 was wrapped up last month for submission to the regional National Economic Development Authority (Neda), whose information and communications technology division would evaluate it. The study was initiated by the Department of Finance, along with the feasibility study also undertaken for Metro Cebu covering its three cities of Cebu, Mandaue and Lapu-Lapu. The evaluation of the study would take about six months. At the 51st annual directors’ meeting here last month of the Asian Development Bank (ADB), its country director, Kelly Bird, said in a news briefing that it would really take some time to implement critical projects like modernizing a public transport system. He disclosed ,though, that the ADB has already allocated $70 million for the project, technically titled Davao Public Transport Modernization Project, to include the acquisition of a “high-priority bus system.”

Social preparation

Kadir Monto, 45, who drives a multicab jeepney along the BajadaCabaguio-Boulevard-Claveria route, did not actually hear the details of the city government replacement of the jeepneys with the buses, although the plan was mentioned to him by a passenger. He was told the bus system would be only fielded in the northern Cabantian or Indangan route and the western Toril route. “The problem is, would they be able to pass through downtown roads [where the streets are only two lanes wide]?” he said. There had been no loud protests so far against the bus transit system, Cortes said, “probably because we have been conducting series of consultations with operators’ and drivers’ groups since 2016.” What the city is offering to them is that “we are finding a lot of ways to absorb more than 7,000 drivers into the system.” “We need cashiers, dispatchers, guards, helpers, janitors, assisting personnel, operators of our television monitors, communication personnel in the central and bus stations,” he said. “That is aside from the drivers of the 1,030 buses, to which we need about three drivers in each bus for the three shifts.” Those drivers who are already above 65 years old will be tested for validation of their capability to drive. “If not, we have to enrol them into the

Blue Ribbon report on Dengvaxia, voicing suspicion it “could be a move to cover up controversies hounding the administration.” “This is simply a smokescreen of the administration to hide the issues hounding its officials,”Tanada said. “Why was the committee report released to the public before it has been filed or sponsored? Are not the signatures of the majority of the committee members required before the report can be filed? What happens to the report if the majority disagrees?” Tanada noted the release of the Blue Ribbon chairman’s report “coincided with the impending closure of Boracay Island, the President’s order to the House of Representatives to hasten the impeachment process against Chief Justice Maria Lourdes A. Sereno and the rising prices of goods and services.” Rep. Teddy B. Baguilat Jr. of the Lone District of Ifugao also aired doubts over the “fairness” of Gordon’s report, noting that “it focused mainly on the past administration, but did not dwell on the current government.” He said the Dengvaxia vaccination program was also implemented at the start of the current administration. national government and city’s seniorcitizen program.” “And for those others who may need, or opt, to take other livelihood skills, they would be enrolled with the Tesda [Techical Education Skills Development Administration],” Cortes said. The bus system would likely hire 10,000 workers, enough to absorb the 7,000 drivers. The new buses may also be bid out to the jeepney operators, who must comply with the specif i c a t i o n s fo r t h e h i g h - p r i o r i t y bus system. The City Planning and Development Office has already made a representation with the Department of Transportation (DOTr) to increase government assistance to jeepney operators and drivers, who have been spared of the ongoing national crackdown on dilapidated buses and jeepneys and the phaseout of those vehicles already more than 15 years old. It was not immediately ascertained if the DOTr has acceded to the city’s request to increase the subsidy to P110,000, from the initially determined P80,000 per unit “turned over for the scrappage program.” The amount covers the average income of drivers in six months with some extra amount. Cortes earlier said the socialpackage scheme of the city, once agreed upon by the DOTr, would be recommended for evaluation by Neda’s Investment Coordination Committee. This unit would process the loan package from the ADB. Bird said he would expect the implementation to happen next year, and Cortes said the initial implementation phase would include smoothing out road-right-of-way barriers, construction of bus terminals, stops and depots. The full use of the system may still happen by 2020, he added.

Efficiency

Cortes said the operators may not opt to turn over their jeepneys to the government and may still choose to continue using their units as private vehicles, but they must comply with the Anti-Smoke Belching Ordinance of the city. The city’s traffic has built up during the last decade due to migration from the congested Metro Manila area and the increasing attraction of the city as a convention and ecotourism destination. Private vehicles account for more than 80 percent of the traffic volume, the city said. The city has already eyed putting up terminals for interprovincial routes away from the City: one in Toril for southern routes; in Panacan for the eastern and northeastern destinations; and one for the northern destinations via Bukidnon. The entire concept “is not only to make it efficient but, at the initial stage, it has to be really efficient as to effectively persuade car owners to use the public-transport system and leave the private cars behind, along with their care to pull themselves of the grinding traffic and to find any space for parking.”

The Nation BusinessMirror

www.businessmirror.com.ph

Editor: Vittorio V. Vitug • Thursday, April 12, 2018 A3

New justice chief The fight continues—CJ Sereno outlines priorities N

e w ly appoi nted Ju s tice Secretary Menardo I. Guevarra on Wednesday said the Department of Justice (DOJ) would focus on prosecuting crimes related to proliferation of illegal drugs, as well as terrorism under his term as instructed by President Duterte. Guevarra issued the statement as he started to perform his duties as justice chief in lieu of former Justice Secretary Vitaliano N. Aguirre II who resigned from his post following a string of controversies. “President Duterte’s marching order to us is very clear. The DOJ will offer no sanctuary nor respite to criminals involved in illegal drugs and terrorism. Time to roll our sleeves and get work,” Guevarra said. Guevarra added that he would prioritize the review of the controversial drug case involving Cebu businessman Peter Lim and self-confessed drug lord Kerwin Espinosa. Also on his top priorities is

the review of the decision of Aguirre to place alleged porkbarrel scam mastermind Janet Lim-Napoles under provisional coverage of the Witness Protection Program. “I am not prejudging [but] the first thing I will [do is to] look at [the] facts presented without premature conclusion…,” he said. Guevarra also added that the President told him to cleanse the department of scalawags. “He gave me a free hand to replace people, to bring his honor to the Department of Justice,” he said. Gueverra also met with key officials of agencies and offices in the DOJ on Wednesday to brief him on their functions and duties. He also toured the different offices within the DOJ compound to orient himself with the different offices and agencies which comprise the Justice department. Prior to his appointment to the DOJ, Guevarra served as deputy executive secretary both during the Aquino and Duterte administrations. Joel R. San Juan

Recto to Albayalde: Beef up police ranks By Butch Fernandez @butchfBM

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enate President Pro Tempore Ralph G. Recto, voicing concerns over the looming depletion of law enforcers nationwide, prodded incoming Philippine National Police Chief Oscar D. Albayalde to step up efforts to fill the PNP personnel gap—projected to add up to over 25,938 vacancies this year—by dangling higher pay incentives. Recto recommends that for Albayalde to quickly close the huge gap in unfilled police officer positions, “the PNP must go on a recruiting spree, using the recent doubling of base pay of the entrylevel Police Officer 1 to P29,668 as a come-on.” The senator suggested that Albayalde can be a “good poster boy” for the PNP, even as Recto said there are other programs and policies that could also boost recruitment efforts. “They [PNP] can expand the applicant base by relaxing height or age requirement. And offer more review classes to improve test passing rate,” he added. In a news statement issued on Wednesday, Recto said plugging the yawning PNP personnel gap should be Albayalde’s “Mission No. 1” after assuming the post as the country’s top cop. The senator calculated that if all of the vacant PNP positions are filled and distributed equally to the country’s 1,489 municipalities, “each will have an additional 17 policemen. If 20 percent of the slots will be allotted to cities, each will receive 35 more policemen,” he added. Recto reminded the PNP leadership that “the challenge is to put more boots on the ground,” citing the annual population increase of 1.67 million that he projects to trigger a corresponding need to boost police strength by 3,340 yearly, on a 1:500 cop-to-population ratio.

RECTO: “They [PNP] can expand the applicant base by relaxing height or age requirement. And offer more review classes to improve test passing rate.”

“And if all of these new recruits will be given patrolling duties, it will solve the chronic lack of police officers on the ground,” the Senate President Pro Tempore said, lamenting that citizens no longer see police presence in such common areas as street corners, places under bridges, underpasses and public parks. “There is really a gap,” the senator added. At the same time, Recto recalled the PNP had an authorized unifor med troop strength of 194,410, but only 168,472 “are or will be filled this year, based on the budget department-prepared 2018 government staffing pattern.” Recto rued that “not all of the 168,472 are on duty—some may be sick, absent, on schooling, suspended, or assigned to administrative duties, so the actual policeman-to-population ratio at any given hour of the day is below what is on paper.” To close the huge gap in unfilled police officer positions, Recto recommended the PNP “must go on a recruiting spree, using the recent doubling of the base pay of the entry-level Police Officer 1 to P29,668 as a come-on.” Recto added that “ before you can put more policemen on the streets, you have to put more of them in uniform first.” This, even as he noted that “salaries and allowances eat up 86 percent, or P113 billion, of the PNP’s 2018 budget of P132.3 bi l l ion ,” add i n g t h at a “ bi g chunk ” of the PNP’s personnel compensation budget goes to its 76,000 police officers.

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By Joel R. San Juan @jrsanjuan1573 & Jovee Marie N. dela Cruz @joveemarie

aguio City—Supreme Court Chief Justice Maria Lourdes A. Sereno has assured her supporters that she would not back down from her fight to remain in her post despite President Duterte’s public pronouncements calling for her immediate ouster. The leadership of the House of Representatives on Wednesday, meanwhile, vowed to approve the Articles of Impeachment against the chief magistrate at least within two weeks after session resumes on May 14. Speaker Pantaleon D. Alvarez, in a news statement, expressed confidence that the lower chamber would be able to approve the impeachment of Sereno within a week or two after the resumption of session of Congress on May 14. Following her intense grilling by her fellow magistrates during the oral arguments on the quo warranto petition filed by Solicitor General Jose C. Calida, Sereno immediately faced her supporters on Tuesday evening and assured them that she would not abandon her post without a fight. “Walang atrasan! Tuloy ang laban! [There’s no retreat! The fight continues!],” she said before dozens of supporters who showed up near the SC compound during the sixhour hearing. Sereno referred to herself as “a defender of democracy” and told her supporters that she would not bow down to the powers-that-be. “You’ve all seen how we defended our rights to protect our freedom against oppressors who are destroying our democracy,” she declared. “We should not allow those in power to oppress us. You know what I mean. We have to fight in all fronts to make sure that democracy in the Philippines will

remain,” Sereno added. On Monday Sereno publicly accused President Duterte of being behind moves to oust her. An apparently irked Duterte quickly responded and called for Sereno’s ouster, branding her as an “enemy” of the government and asked Congress to “fast-track” the impeachment proceedings. Sereno refused to be interviewed by the media after the grueling oral arguments, which put those who witnessed the proceedings on the edge of their seats as she engaged her fellow magistrates in a heated exchange of arguments that centered on her supposed failure to produce her Statement of Assets, Liabilities and Net worth (SALN) covering several years as required by the Judicial and Bar Council (JBC) when she applied for the Judiciary post. Sereno’s supposed failure to file her SALNs for several years is the major ground raised by Calida in filling the quo warranto petition. 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. Tuesday’s oral arguments was a historic event in the 15-man High Tribunal, considering that it was the first time a sitting Chief Justice was grilled by her fellow magistrates with regard to her eligibility to her post. During the oral arguments, Sereno maintained that she had met the specific qualification of proven integrity and complied with all the requirements of the JBC when she was being considered for the top judicial post in 2012. Sereno said the fact the JBC shortlisted her proved that its members, including then-JBC ex-officio chairman SC Associate Justice Diosdado Peralta, found her to have “substantially complied” with all the requirements, including the submission of SALNs. J B C re cord s s ho w e d t h at Sereno submitted three SALNs, which she filed annually since she was appointed SC associate justice in 2010. The SALNs covered the years 2009, 2010 and 2011. Sereno was in private practice prior to her appointment to the High Court. “Everything was done in good faith. If they [JBC members] found that my three SALNs were not sufficient, they could have struck me out of the short list,” Sereno said during the oral arguments ,while responding to questions propounded by Associate Justice Teresita Leonardo de Castro. “I never knew what was happening inside the JBC. If they considered that sufficient, then that’s it. How could I second guess?” Sereno added.

We should not allow those in power to oppress us. You know what I mean. We have to fight in all fronts to make sure that democracy in the Philippines will remain.”—Sereno

The Chief Justice noted that the JBC had 11 chances to exclude her from the short list on the ground of her incomplete submission of SALNs, but it never did. But Calida also insisted that the appointment of Sereno should be voided because of her ineligibility, particularly lack of proven integrity due to her false and incomplete SALNs. “Sereno has not shown that she is a person of proven integrity, which is an indispensable qualification for membership in the Judiciary,” he said in a news statement after the oral arguments. The solicitor general also debunked Sereno’s warning that the quo warranto case would open a floodgate of future cases against other justices of the SC. “This case is not about eroding the independence of the Judiciary. It is about preserving the honor and dignity of the Supreme Court as an institution,” Calida said.

‘It’s done’

“Our intention was to approve these before we took a break, but we didn’t have enough time to do it. I’m sure that after the resumption of session we can approve these in plenary within one or two weeks,” Alvarez said. Before Congress adjourned on March 21 the Committee on Rules referred the matter for plenary consideration. According to Alvarez, the House Committee on Justice had already found probable cause to impeach Sereno and prepared the corresponding committee report and Articles of Impeachment against her. The vote of at least one-third of all members of the House of Representatives is needed to approve the Articles of Impeachment and transmit the case to the Senate for trial. Earlier, Alvarez said he would heed the call of President Duterte to fast-track Sereno’s impeachment. Duterte said Sereno is now his enemy and that she has to be out of the SC. “It will be done once we resume sessions,” Alvarez added.

Young boys need to be prepared psychologically for circumcision

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Fish kill at the bay

A man gathers dead fish washed by waves on the shores of Manila Bay along J. W. Diokno Boulevard in Pasay City. The fish kill was blamed on the abrupt change in water temperature at the bay, reportedly brought about by the intense summer heat. ROY DOMINGO

he summer is upon us and it is the perfect time to usher young boys into “manhood.” For the Department of Health (DOH), summer is also the circumcision season, prompting the health officials to remind parents and guardians of boys to be circumcised to psychologically prepare their mind first. Dr. Lyndon Lee Suy, DOH spokesman, also warned parents on teasing their children about the pain that entails the procedure. “So let us not scare them...instead, tell them that it is just a process that they have to undergo,” Lee Suy said in a recent interview with reporters. Lee Suy added that to avoid developing fear about circumcision, family members of the boy who plans to be circumcised should explain that the process is normal. While the DOH encourages young boys to undergo circumcision with well-trained doctor or health professionals, Lee Suy said they are not totally discouraging the “traditional way” or pukpok as long as tools to be used are clean and sterilized. As far as the DOH is concerned, Lee Suy said, they have not recorded incidents wherein there were infections developed on the male genital of the patient after undergoing circumcision the oldfashioned way. “We want them to be ready for this, regardless if it is with doctors or the traditional way,” Lee Suy added. Circumcision is the process of removing the foreskin and exposing the end of the penis. Traditional method is done in some remote areas in the country through a local village circumciser who performs the task of pukpok method. It is believed that circumcised men will be at lower risk from acquiring sexually transmitted infections, as well as infection of the penis as the skin wherein some bacteria can accumulate are easily cleansed or removed. PNA

CBCP raises alarm over rising HIV infections among OFWs T he Catholic Bishops’ Conference of the Philippines-Episcopal Commission for the Pastoral Care of Migrant and Itinerant People (CBCP-ECMI) on Wednesday

expressed alarm over the rise in the number of human immunodeficiency virus (HIV) cases among overseas Filipino workers (OFWs). “ With this alarming news,

we will discuss and address this pressing issue with CBCP-ECHC [Episcopal Commission on Health Care] for awareness, prevention, medical help and assistance. HIV

is a growing threat to all and anywhere. It is destructive and deadly,” CBCP-ECMI Chairman Bishop Ruperto Santos, said. “We have to work together. And

we at CBCP-ECMI will act on this matter,” the Bataan prelate added. He noted that their main concern is not only the OFWs’ spiritual welfare but their physical well-be-

ing as well, to make their life dignified, and their rights respected and promoted. “It is our desire that they live fully, fruitful and faithful,” Santos said. PNA

Economy BusinessMirror

A4 Thursday, April 12, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon

DTI braces for China investment windfall By Elijah Felice E. Rosales @alyasjah

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otal approved investments from China is expected to balloon this year, as the trade department intensifies its partnership with its Beijing-based counterparts as part of President Duterte’s strategy to have warmer ties with the superpower. Trade Secretary Ramon M. Lopez said the Department of Trade and Industry will boost its presence in China by activating three offices and deploying commercial officers in Beijing, Shanghai and Guangzhou. This is in line with the DTI’s thrust to expand the market of Philippine enterprises in China. Lopez’s statement came after nine letters of intent were signed between the Philippines and China. The LOIs are on construction, electronics, agriculture, tourism and pharmaceuticals, are worth $9.8 billion and are estimated to generate almost 11,000 employment opportunities. “Investments are important in bringing more job opportunities for all Filipinos. Our bilateral cooperation with China continues to deepen and strengthen. We have agreed to discuss cooperation plans for the next five or even up to 10 years to move forward in specific fields,” Lopez said. “As one of the world’s top investment destinations, the Philippines enjoy the confidence of foreign direct investors. And due to our enhanced bilateral and trade relations with China, Chinese companies have increasingly expressed interest in investing in our country,” he added. Shanghai GeoHarbour Group is planning to explore a land-reclamation and land-development project in the Laguna de Bay at $3.46 billion. On the other hand, Jovo Group Co. Ltd. Guandong is looking at building and operating a liquefied natural gas receiving terminal that will deliver the petroleum product to local markets. The project is valued

at $2.5 billion and is going to employ around 2,000 to 3,000 people for the construction and 1,000 to 2,000 workers for the first phase of its operations. The Zhongfa Group, for its part, expressed intent to develop large cultural tourism infrastructure, electronics-industry parks and manufacturing hubs. Estimated to cost $1 billion, the projects are seen to generate about 1,000 jobs. The Haocheng Group is poised to venture in infrastructure and construction projects in the country, while the China Green Agriculture Group is interested in the agriculture and tourism sectors. The former is valued at $1 billion and will most likely employ 1,100 workers, while the latter is at $500 million and will generate 2,000 employment opportunities within a 10-year span. East-Cloud Biz Travel Ltd. is looking at exploring opportunities in the tourism industry with its local partner, Calaca Corp. The joint venture is estimated to throw in $500 million of fresh investments, and will generate 1,000 jobs within 10 years. China National Heavy Machinery Corp. and Sino BMG expressed their intent in investing on a technoindustrial zone and an aerated concrete-block production line, respectively. The two projects combine for $460 million of investment pledges. Last, Shanghai Shinehigh Biotechnology Ltd. Co. and Zhejiang Dongyang Jinxin Chemical Co. Ltd. are willing to establish a pharmaceutical factory in the country. It is estimated to cost $30 billion and will employ at least 150 workers. With this, Lopez vowed to accelerate efforts to make doing business in the country easier to ensure the smooth operations of the Chinese firms. “We continue to improve the Philippine business environment, and soon, we will be adopting new domestic policies and regulations to promote ease of doing business and competitiveness in various industries,” Lopez said.

www.businessmirror.com.ph

PHL in ‘golden age’ of economic growth

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By Cai U. Ordinario

@cuo_bm

he Philippines is now enjoying a golden age of economic growth never before seen in at least 40 years, according to the Asian Development Bank (ADB).

In a briefing on Wednesday, ADB Philippine Country Office Director Kelly Bird said this kind of growth is based on solid macroeconomic fundamentals that can be sustained in the medium term. “I say this to my colleagues, the Philippines is in like a golden age for its economic growth. It has been growing at this pace for several years, and it is in its strongest economic expansion in over 40, 50 years,” Bird said. “It’s quite a virtuous cycle, that’s why I call it a golden age for the Philippines, because it’s growing in a very sound macroeconomic policy framework,” he added. Bird said the Philippines’s recent economic growth occurred at a time when there is also moderate inflation, low deficit, declining debt and investment-grade rating. He added the Philippines’ fiscal position remains strong with a deficit of only 2.2 percent of GDP and national debt standing at around 42 percent of GDP, the lowest in 20 years. This will be strengthened by the revenues to be collected from the

Tax Reform for Acceleration and Inclusion program. Bird said the country is expected to collect P90 billion this year and P140 billion next year. Bird also said the country’s fixed investment rate increased to 25 percent of GDP after years of languishing at only 10 percent to 20 percent of GDP He added the strong employment numbers, which, as of the January Labor Force Survey, showed an un-

employment rate of 5.3 percent and employment rate of 94.3 percent. “This growth is [going to be] sustained in 2018 and 2019. We also believe that reforms are in place to support the government’s infrastructure plan that will continue to sustain growth over the medium term,” Bird said. “I think the infrastructure plan can sustain that over the next two to three years. I think its important to do that to end poverty, which is relatively high compared to high income countries,” he added. In the latest Asian Development Outlook report, ADB projects Philippine GDP growth at 6.8 percent this year and 6.9 percent in 2019, up from 6.7 percent in 2017. ADB said rising domestic demand, remittances, and employment, in addition to infrastructure spending, will drive growth. However, Bird said, due in part to high economic growth, inflation is

I say this to my colleagues, the Philippines is in like a golden age for its economic growth. It has been growing at this pace for several years, and it is in it’s strongest economic expansion in over 40, 50 years. It’s quite a virtuous cycle, that’s why I call it a golden age for the Philippines, because it’s growing in a very sound macroeconomic policy framework.”—Bird

Palace prepares for Xi’s Nov visit

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Govt assures funding, jobs for Boracay rehabilitation

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udget Secretary Benjamin E. Diokno on Wednesday said the P2-billion calamity fund that the government intends to tap once Boracay has been declared under state of calamity will be sourced from the 2018 annual budget. President Duterte earlier said he will be declaring the top island tourist destination under state of calamity and that P2 billion will be used as calamity fund. But Duterte clarified that this will only be used for poor Filipinos, and he will not spend a single centavo for the inns and hotel owners there. “There’s a P19-billion total calamity fund, but P10 billion is earmarked for Marawi. So we have about 9 billion. That’s the source of the funding,” Diokno told reporters in a briefing on Wednesday. He also said the budget for rehabilitation may be sourced from contingency fund and calamity funds. “If you declare an area under state of calamity, the local governments have their own calamity fund, they can use that. That is one positive effect that the local governments will be able to use their calamity funds,” he said. Diokno also noted he expects displaced workers in Boracay to be absorbed by other tourist destinations, noting that most of the workers in the island are not really natives of Boracay. Asked to elaborate, Diokno said: “You look for [and] do [a] job search. If your work is to manage a hotel, I’m sure there are many hotels outside.You can go to Sulu, you can go to Bohol.” He also backed the President’s

decision to close Boracay, which was earlier described by Duterte as a “cesspool.” “But, to me, the way to look at it [is] for the greater good. If that’s the situation in Boracay, you really have to fix it. So fix it and then come up with a better Boracay. It will be more sustainable and more attractive,” Diokno said.

Employment options

New employment opportunities are now ready for would-be permanently displaced workers of establishments in Boracay, the Department of Labor and Employment (DOLE) said. DOLE Region 6 is set to hold two job fairs to assist the concerned workers once the government starts the closure of Boracay Island to tourists on April 26. During the six-month closure, authorities will start its crackdown against firms in Boracay, found to be noncompliant to regulations for easement and sewage in beaches of the island resort. “The two job fairs have already been scheduled in Aklan Province, one in Kalibo on April 26, 2018, and another in Malay on June 15, 2018,” DOLE 6 Director Atty. Johnson G. Cañete said in a news statement. The labor official said it will be held by the Public Employment Service Offices of the local government units of Aklan Province and Malay. He noted members of the Boracay Industry Tripartite Council, which will not be affected by the closure of Boracay island, have already committed to hire the affected workers. Bernadette Nicolas and Samuel Medenilla

expected to reach 4 percent in 2018 and 3.9 percent in 2019. Bird said high inflation usually accompanies economic growth because of increased demand. He said, however, a 4-percent inflation rate is not a cause for alarm. “The economy is growing highly and likely to be sustained. The pick up in inflation of 4 percent is also indicative of a successful economy. You can’t have economic growth at that pace and expect very low inflation. And at the level of 4 percent, historically it’s low, relatively moderate, so I wouldn’t be particularly concerned with that inflation rate,” Bird stated. The report notes there are external risks to the Philippines’s growth outlook from heightened volatility in international financial markets and uncertainty about global trade openness, although the country’s strong external payments position would cushion these effects. A major policy challenge to the country’s growth outlook, according to the report, is managing the rollout of the government’s “Build, Build, Build” infrastructure program, which is expected to raise public infrastructure spending to 7.3 percent of GDP by 2022, from 4.5 percent in 2016. The report provides suggestions on ways to enhance government capacity, including strengthening coordination between government agencies and improving technical capacity of staff within these agencies, and fostering stronger partnerships between government agencies, the private sector and development partners.

Extravaganza A stall keeper tends to his knick-knack store brimming with decorative items and toys in Dapitan, Sampaloc,

Manila. ALYSA SALEN

residential Spokesman Harry L. Roque Jr. has announced that Chinese President Xi Jinping will be visiting the country this November after Asia-Pacific Economic Cooperation (Apec) Summit in Papua New Guinea. Xi also promised to provide the country an additional P38 billion in economic assistance during his meeting with President Duterte on Tuesday at the sidelines of the Boao Forum for Asia. The visit of the Chinese leader came after Duterte invited Xi to visit the Philippines during the Philippine leader’s China state visit. The Philippines and China also signed six bilateral agreements on Tuesday, including an agreement on Economic and Technical Cooperation; Exchange of Letters on the Phase III of the Technical Cooperation Project for the Filipino-Sino Center for Agricultural Technology; Exchange of Letters for the Pre-Feasibility Study of the Proposed Davao City Expressway Project; Exchange Letter for Broadcasting Equipment to the Presidential Communications Operations Office; Memorandum of Understanding on the Employment of Filipino Teachers of English Language in China; and the Preferential Buyer’s Credit Loan Agreement on the Chico River Pump Irrigation Project. Bernadette Nicolas

DENR, MICC mining reviews to be ‘harmonized,’—Cimatu By Jonathan L. Mayuga @jonlmayuga

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nvironment Secretary Roy A. Cimatu has assured that the resolutions of appeals filed by “erring” mining companies slapped with closure or suspension orders by his predecessor, former Department of Environment and Natural Resources (DENR) Secretary Regina Paz L. Lopez, last year will be announced within the month. Some of these mining companies, Cimatu said, are likely to be sanctioned for failing to meet environmental standards. Cimatu, fresh from a mine tour in Aroroy, Masbate, also announced a mining company’s plan to provide support for the rehabilitation of Boracay’s coral-reef areas during a hastily called news briefing at the DENR-Biodiversity Management Bureau Training Center at the Ninoy Aquino Parks and Wildlife Rescue Center in Quezon City. The news conference was preceded by a stakeholders’ forum attended by

Boracay locators in connection with a plan to declare portions of Boracay Island a critical habitat, and hence, will be set aside for conservation. “Definitely, some will be suspended,” Cimatu assured when asked if some mining companies will be slapped with sanctions. The DENR and the Mining Industry Coordination Council (MICC), Cimatu said, are finalizing results of separate reviews and will soon start harmonizing these results, which will announced by the DENR later. “We will just harmonize the results. We are also depending on the results of the review of the orders from the MICC. Of course, we want it harmonized because it will be awkward if we will have different findings and recommendations,” he added. The DENR was supposed to release resolutions of its review last month, but the department’s focus shifted to issues surrounding the closure of Boracay and other tourism destinations. To recall, Lopez, the Duterte administration’s first environment

secretary, launched a crackdown against irresponsible mining operations and recommended the closure or suspension of 26 largescale operating mines. Lopez, during her 10-month stint until her rejection by the powerful Commission on Appointments last year, also recommended the cancellation of 75 mineral production sharing agreements and one Financial or Technical Assistance Agreement for inactive mines within or near watersheds to protect the country’s freshwater reserve. Mining companies, for their part, protested what they described as biased, anti-mining directives and lodged their appeals to President Duterte and the MICC. Two of these companies were able to continue operation upon obtaining stay orders—Lepanto Consolidated Mining Co. and Far Southeast Gold Resources Inc. and Oceanagold Philippines Inc. Two other companies, Berong Nickel Corp. and Citinickel Mines and Development Cor p., which

both filed separate appeals before Malacañang, remain suspended by the strength of an order issued by the Supreme Court. A total of eight companies with cancellation orders filed appeals with the Office of the President and were able to obtain stay orders, while five other companies with prior suspension orders remain suspended. These are Benguet Corp. Nickel Mines Inc., Claver Mineral Development Corp., Eramen Minerals Inc., LNL Archipelago Minerals Inc. and Zambales Diversified Metals Corp. Only eight companies have pending appeals before the DENR. These are nonoperational companies with cancellation orders and pending motions for reconsiderations. These are Aam Phil Natural Resources Exploration and Development Corp., Libjo Mining Corp., Mt. Sinai Mining Exploration and Development Corp., Oriental Synergy Mining Corp., Wellex Mining Corp., Carrascal Nickel Corp., Ore Asia, and Development Corp. and Strong Built Mining Development Corp.

Agriculture/Commodities BusinessMirror

www.businessmirror.com.ph

Rice inventory down by 22% By Jasper Emmanuel Y. Arcalas

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@jearcalas

he country’s total rice inventory as of March 1 sank to a six-month low of 1.697 million metric tons (MMT) due to the depletion of the stockpile of the National Food Authority (NFA), according to the Philippine Statistics Authority (PSA). The latest monthly report by the PSA showed that the figure was 22 percent lower than the inventory of 2.176 MMT recorded in the same period last year. On a monthly basis, the volume as 5.48 percent lower than the 1.795 MMT recorded in February. The March 1 inventory was the lowest recorded since September 2017, when the national stockpile reached 1.422 MMT, according to data from the PSA. The PSA said the total rice inventor,y as of March 1, was sufficient for 50 days. Of the total rice stocks, about 64.84 percent were with households, 32.6 percent were held by commercial warehouses and 2.56 percent were in NFA depositories, according to the PSA. The total volume of rice held by the households during the reference period reached 1.1 MMT,

while those in commercial warehouses were about 553,350 metric tons (MT). The NFA’s rice stockpile, as of March 1, plunged to its lowest level in 23 years at 61,400 MT. The bulk of the state-run grain agency’s buffer stock, or about 58.94 percent, were locally procured, while the remaining volume was imported. “Relative to previous year’s levels, decrements were noted in all sectors. Stocks in the households, commercial warehouses and NFA depositories were lower by 4.50 percent, 11.74 percent and 89.03 percent, respectively,” the PSA said in its monthly report, titled, “Rice and Corn Stocks Inventory,” published on Tuesday. “ R ice stoc k s i nventor y i n households was higher by 1.17 percent, as compared to the previous month’s level. In contrast, stocks

File photo

in commercial warehouses went down by 14.42 percent and in NFA depositories by 29.11 percent,” the PSA added. The government periodically monitors rice inventory to determine whether it would need to import the staple to boost local stocks. During the period, PSA data showed that total corn-stock inventory stood at 278,340 MT, 74.19 percent lower than last year’s record of 1.078 MMT. The corn-stock inventory, as of March 1, declined by 32.17 percent, from the 951,600 MT recorded in February. The PSA said the bulk of cornstock inventor y in March, or 74.01 percent, was in commercial warehouses, while households accounted for 25.98 percent. NFA

depositories accounted for a mere 0.01 percent. Corn stocks in commercial warehouses amounted to 206,000 MT, 72,300 MT in households and 30 MT in NFA warehouses. “Corn stocks in all sectors dropped compared with their last year’s record. Stocks in the households declined by 42 percent, in commercial warehouses by 78.28 percent and in NFA depositories by 99.42 percent,” the report read. “Stocks inventories in all sectors recorded corn stock drawdowns from last month’s levels. Household stocks fell by 2.45 percent, commercial warehouses by 38.66 percent and in NFA depositories by 92.33 percent,” it added.

Editor: Jennifer A. Ng • Thursday, April 12, 2018

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Roxas Holdings confident of hitting income target despite cut in output

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ISTED sugar refiner Roxas Holdings Inc. (RHI) said its output for fiscal year (FY) 2017-2018 could decline by as much as 10 percent, but company officials expressed confidence that this would not cut RHI’s earnings. “The [Sugar Regulatory Administration] has already done surveys and data from sugar mills in the country [showed that] there’s a decrease in the volume of production nationwide of around of 8 [percent] to 10 percent,” RHI President and CEO Hubert D. Tubio told reporters after the group’s annual stakeholders’ meeting on Wednesday. “We are looking at the same rate of decline for our Negros operations. There could be a drop in output of 8 [percent] to 10 percent,” Tubio added. Based on their latest estimates, he said total sugarcane milled by its Negros unit, Central Azucarera de la Carlota Inc., would reach at least 1.8 million metric tons (MMT) at the end of the current FY, while its Central Azucarera Don Pedro Inc. in Batangas would have a total milling tonnage of about 1.35 MMT. Based on the computation of the BusinessMirror, RHI’s total milling tonnage for the current fiscal year ending September 30 would hit at least 3.1 MMT, or 10.43 percent lower than the 3.461 MMT recorded in FY 2016-2017. RHI CFO Celso T. Dimarucut said bulk of their sugar output last year, or about 2.1 MMT, came from their Negros operations, while the remaining volume of about 1.3 million was produced in Batangas. Furthermore, Tubio said they ex-

pect the group’s average sugarcane milling-recovery rate to drop to 1.85 50-kilogram bags per ton of cane (Lkg/TC) from the previous year’s average of 1.9 Lkg/TC. “We will still try to beat our projections in terms of numbers, not necessarily in terms of tonnage and liters, but in terms of our target for our bottom line,” he said. Despite the reduction in production, Tubio said they remain optimistic to reach their net income target for 2018 due to the current high prices of sugar in the domestic market. “[Sugar] prices have started to go up to P1,660 per Lkg, that would at least offset the reduction in our volume,” he added. Dimarucut said its sugar mills’ high initial inventory at the start of FY of about 400,000 Lkg would compensate for projected cut in output. For the current fiscal year, RHI is targeting P1.6 billion in earnings before interest, taxes, depreciation and amortization (Ebitda). “We anticipate that we will exeed [the target] a bit. The excess sugar in last year’s production will compensate the cut in output this year,” he added. Dimarucut also said the company’s bottom line at the end of FY 2017-2018 could reach some P120 million. “If we hit the same level of Ebitda, more or less our profit levels would be along that line, as well,” he said. “We are expecting at the very minimum is relatively flat due to the environment changes. But we are hopeful that due to some improvements, we will surpass our net income last year.” Jasper Emmanuel Y. Arcalas

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Business

Thursday, April 12, 2018

PHL INTERNET SPEED H SPECTRUM ALLOCATION

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By Lorenz S. Marasigan

SUKMARAGA | DREAMSTIME.COM

QUITABLY allocating radio frequencies for mobile use in the Philippines could get a little messy, given the amount of opposition the government may get from current holders, but it must apportion them if the country wants to have new telco players in the market.

Admittedly, there exists a mess in the spectrum allocation and management in the Philippines, electronics and communications engineer Pierre Tito M. Galla said, citing the current structure of the telco market. Today, the two telco giants hold majority of the rights to certain radio frequencies for mobile use. Data from the National Telecommunications Commission (NTC) showed that PLDT Inc. holds 400 megahertz (MHz) of radio frequencies, while Globe Telecom Inc. has rights to 325 MHz. What remains for new telecom players is a mere 140 MHz of frequencies in the 700-MHz, 850MHz, 2100-MHz, 2500-MHz and 3500-MHz spectra. This means that a future telco player—or players—may just have to operate without 2G frequencies, which are needed for mobile voice calls and texts. Spectrum is the real estate on which telecommunication operators develop their respective network to deliver services to customers. The amount of spectrum assigned to a telco has an impact on the cost to build capacity, overall network performance, ability to offer new multimedia services, and general customer experience of wireless services. Galla, the cofounder of Democracy.Net.Ph, said potential players in the market will have to fight for the remaining spectrum left in the government’s frequency bank. “The current scarcity of available spectrum is not simply because spectrum is finite; rather, it is because spectrum is not assigned equitably,” he told the BusinessMirror. “Current spectrum management practices have resulted in an inequitable assignment of spectrum. For example, Galla said, the entire 900-MHz and 1800-MHz frequency bands are controlled entirely by both PLDT and Globe, hence new entrants would not

have access to these frequencies. “Spectrum can be enough, if equitably assigned,” he said. “By that, I mean frequency bands should be given in more or less equal slices, with some spectrum reserved for the future.”

Conditional allocation

MARY GRACE MIRANDILLASANTOS agreed, saying the government must review its implementation policies on spectrum allocation and management. Under Philippine laws and memoranda issued by the telco regulator as early as 2006, the government has to tender off spectrum to players in an open and transparent manner. The practice, however, has always been to allocate these finite—but renewable—real estates to telco players. Department of Information and Communications Technology (DICT) Director George P. Tardio admitted that spectrum allocation and management in the Philippines is largely based on conditions present at the time of application for frequency bands. “It’s conditional. If demand exceeds availability, there should be a bidding,” he said in a text message. To date, there has been no bidding for any frequency band, at least for spectra for mobile use.

Managing spectrum

ACCORDING to Galla, frequency auction is the best way to manage and equitably allocate spectrum in the Philippines. “Spectrum must be purposed, classified and allocated with the interest of the Filipino people as the primary consideration,” he said. “The classification and allocation of spectrum, the monitoring and review of spectrum usage, and the granting and revocation of spectrum user licenses shall be done in a transparent manner.” The information and communications department should also conduct, motu propio, a review of

spectrum allocation in order to determine if the government indeed was right in allocating spectrum usage to players, Galla said. “Such review is necessary in the national interest, or as a result of spectrum utilization monitoring, or required by changing technologies, or necessary to enable the Philippines to comply with

international regulations and best practices, or issuances, rules, regulations and recommendations of the International Telecommunications Union, or at least once every three years,” he said. The review may result in reclassification and refarming of spectrum, hence freeing up bands for potential new users.

Anticompetitive practices

GALLA added the government must ensure that spectra are not hoarded by companies, and then sell them at a latter date. “Another big hindrance to proper spectrum utilization is known as ‘spectrum hoarding’—by which spectrum is licensed to users

who do not maximize the utilization of this scarce resource. This issue is solved by periodic review and claw back,” he said. To recall, San Miguel Corp. held for many years roughly 310 MHz of spectrum on several bands, including the coveted 700-MHz frequency band. It was on the process of setting up its own telco with

aderLook

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www.businessmirror.com.ph | Thursday, April 12, 2018

HINGES ON EQUITABLE ON AND MANAGEMENT the adoption of a policy on setting up caps on spectrum allocation. A quarter of the whole spectrum holdings may be allocated to players, he said. A review on the cap should be done “at least annually.”

Global best practices

ASIDE from these, Winthrop Y. Yu, who chairs the Internet Society of the Philippines, said the government has to adopt global best practices to better manage and allocate spectrum in the country. “These include a truly independent regulator, a fixed time period for frequency assignments, and a recall by government of frequencies without the need for any sort of compensation,” he said. “These global best practices certainly can and should be applied in this country, else we will always be falling behind and stay less competitive than our neighbors.” He said he agreed with Galla on his proposals, as spectrum is part of a nation’s assets, which should be used for public good. “The basic mindset for best practices in other countries is the principle that first and foremost, spectrum is part of the national patrimony, of which the regulator is the trustee, who then provides operators with temporary usufructuary rights to certain frequency assignments in return for public service. In other words, spectrum is not private property, nor is it alienable public property,” Yu said.

Spectrum road map

TARDIO said the government is currently in the process of crafting a blueprint for spectrum allocation and management. “The DICT has just started developing the country’s spectrum road map to address issues surrounding spectrum management, for example, ensuring equitable and efficient distribution, among others,” he said. For now, the government will allocate the remaining spectrum to the potential third player, which is expected to come into the picture anytime soon. “At this time, the available frequencies will be assigned to the new major player, and if awarded, this will be exclusive,” he said.

Infra is important

a potential partner—Telstra Corp. Ltd. of Australia—until it struck a buy-in deal with the two existing players. The transaction freed up the spectrum holdings of San Miguel, and gave way for PLDT and Globe to hold more spectrum under a co-use agreement, which was approved by the telco regulator.

Galla said the Philippine Competition Commission (PCC) could step in to ensure that, “in mergers and acquisitions, entities shall not treat spectrum user licenses as tradable assets.” “The PCC shall ensure that, in a merger or acquisition, nonsurviving entities shall return their spectrum user licenses to the gov-

ernment within 30 days after the completion of the merger or acquisition, and that only the surviving entity shall retain their existing licenses,” he said. The antitrust body should also ensure that, in a consolidation, all spectrum user licenses of the involved entities shall be returned to the government within

30 days of the completion of the consolidation. “The return of spectrum licenses shall trigger a spectrum auction, as applicable, within 60 days, and the surviving entity of a merger and acquisition or consolidation may choose to participate,” Galla explained. Galla likewise recommended

BUT for Santos it is also important for players to invest heavily on infrastructure and new technologies in order to make the best out of the spectrum allocation they hold. “It’s not just a matter of spectrum allocation. Quality service also takes into account the number of cell sites that you build,” she said. Typically, 2G services do not require too many cell sites. For 3G and 4G services in high-density areas with high-volume usage, more cell sites have to be set up. “It’s also more challenging since the mobile operators are bundling streaming video into mobile data services—that, plus low number of cell sites will result in congestion,” Santos said. Hence, the third telco should build its network on the premise that it will have “enough” frequencies to use. “The third telco has to design its network in such a way that it will optimally use these frequencies for the services that it would choose to offer,” she said.

Entry of third player

THESE, according to the three experts pooled by the BusinessMirror, should be taken into consideration if the government wants the much-awaited, and highly anticipated, third player to compete

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competitively with the existing telcos. The third player is seen helping disrupt the market by lowering price points, while challenging the two incumbents to improve their services. Consumers have been calling on the government to help in improving the state of the Internet in the Philippines, which is often described as “slow and expensive.” Philippine 4G speeds continued to lag behind its neighbors in Southeast Asia, averaging at only 9.5 Mbps during a three-month period ending January, data from think tank Open Signal showed. According to its latest State of the Internet report in the Philippines, the think tank said the country’s 4G connection is well below the 16.9-Mbps global average, ranking second to the last in terms of speed to Indonesia. LTE speeds in the Philippines were also far below the global average of 16.9 Mbps. According to Information and Communications Secretary Eliseo M. Rio Jr., the government aims to get the new major player on board toward the second half of 2018. “We’re planning to release the terms of reference [TOR] for the auction of the rights for the third player around the first week of May,” he said in a text message. Earlier, President Duterte ordered the creation of an oversight committee for the entry of a new major player in the telecommunications market, taking into account the need for an “integrated and transparent” process. Administrative Order 11, signed on April 6, 2018, provides that the Oversight Committee is tasked to assist the National Telecommunications Commission in formulating the TOR, oversee compliance of the National Telecommunications Commission (NTC) and other implementing agencies with the TOR provisions, ensure timely implementation according to the timeline established by DICT and NTC, and call upon other government agencies for assistance and exercise incidental powers as may be necessary for the proper exercise of its powers and functions. The Oversight Committee will be composed of representatives from the following agencies: DICT as chairman; Department of Finance as vice chairman, and the Office of the Executive Secretary and National Security Adviser, members. The order gave emphasis on the administration’s objective to ensure reliable, inexpensive and secure telecommunications services in the country; and that telecommunications is an essential infrastructure to the country’s economic development and competitiveness. “The entry of a new major player in the telecommunications market is a matter of paramount national interest, which shall redound to the benefit of the public by ensuring genuine competition in the country’s telecommunications industry,” the order read. Duterte earlier said he wanted a new telecommunications company operating starting March 2018. Rio, who is in China with Duterte, welcomed the creation of the said committee. “It will make the selection process for the new major telco player transparent and objective, taking into consideration the concerns of stakeholders, including other government departments,” he said. Interested parties in the spot for the third player include Now Corp., Philippine Telegraph & Telephone Corp. and Converge ICT Solutions Inc., among others.

Banking&Finance BusinessMirror

A8 Thursday, April 12, 2018 • Editor: Jun B. Vallecera

www.businessmirror.com.ph

Fed minutes to hint at how trade spat could affect outlook

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ederal Reserve (the Fed policymakers have been publicly cautious about what a US trade dispute with China could mean for their outlook if it escalates, but investors will get a peek at what they really think when the central bank publishes an account of its March meeting.

“For now, the stock market is very hung up on the issue,” said Stephen Stanley, chief economist at Amherst Pierpont Securities Llc “The Fed’s view has been this is at an early stage and it doesn’t affect the outlook yet. Investors will be very curious if there is anything in the minutes.” Minutes of the closed-door March 20

and 21 meeting of the Federal Open Market Committee (FOMC), the first under incoming Chairman Jerome Powell, will be released at 2 p.m. on Wednesday in Washington. As the FOMC deliberated, the Trump administration was considering tariffs on Chinese imports, the prospect of which helped send stocks tumbling

by almost 6 percent that week. Still, the FOMC raised interest rates last month for the sixth time since December 2015, penciled in two or three additional increases this year and forecast a steeper path of hikes in 2019 and 2020 against the backdrop of an improved economic outlook. The subject of looming trade disputes likely was part of the discussion of risks. Powell, giving his first speech as chairman last Friday, didn’t mention the Trump administration’s trade dispute with China in his prepared remarks. He subsequently told a questioner that the central bank’s business contacts have described trade disputes as “a bit of a risk” to the outlook. Fed officials updated quarterly projections for the economy for the March meeting. “Tariffs were likely not incorporated in the forecasts because the details were— and still are—scant,” said Roberto Perli, a partner at Cornerstone Macro Llc. “But it will be interesting to see what and how serious they thought the impact could be.

In other words, it would be interesting to see if trade issues changed their views of risks, and if so of how many people.” Tariffs could raise some prices, which officials may view as a one-time shock that they’d look through, much like a jump in oil prices rather than a lasting source of inflation. Escalating trade protectionism could also slow growth, increasing the caution of policy-makers, and financial market volatility since Trump announced tariffs on Chinese goods has already tightened financial conditions somewhat, back to levels at the end of last year. There’s reason for concern if trade issues “dampen animal spirits and adversely weigh upon business spending,” which is likely to be the faste r - g r o w i n g a r e a o f t h e e c o n o m y through 2020, said John Herrmann, director of US rate strategy for MUFG Securities. A few Fed officials have publicly worried about trade disputes. San Francisco Fed President John Williams, who’ll take over the helm of the Fed’s powerful New

York branch in June, warned that continued escalation “could have some pretty negative repercussions.” Saint Louis Fed President James Bullard said trade could affect interest-rate policy. While the FOMC was about evenly split on forecasting three or four rate hikes this year, a reduction in growth and inflation could dampen the appetite to boost rates. The Fed’s assessment of inflation will also shape how aggressively policy-makers decide to raise interest rates this year. The US Labor Department will release March consumer prices on Wednesday. Economists polled by Bloomberg forecast the consumer price index rose 2.4 percent from a year earlier. The Fed prefers a different inflation measure, produced by the Commerce Department, which will be updated on April 30. Powell last Friday expressed confidence that price pressures according to that gauge will move up in coming months as weak readings from 2017 drop out of year-over-year measures. Bloomberg News

BIR revenue intake RCBC reports P4.3-B net income for 2017 up 16 percent in Q1 R T

he Bureau of Internal Revenue (BIR) reported revenues amounting to P422.587 billion in the first three months this year on the back of increased collection from the regional offices and the Large Taxpayers Service. The BIR said this exceeded its revenue target for the period of only P361.767 billion by 16.81 percent, with revenue collections for the quarter amounting to P422.587 billion. “Minus the goal from non-BIR operations, the surplus is pegged at a higher rate of 18.53 percent,” the BIR said in a statement. The revenues for the quarter also represented growth of 14.03 percent compared to the P370.608 billion in the same period in 2017. BIR regional offices collected P141.657 billion for the three-month period, an expansion by 12.50 percent than its goal of P125.914 billion. The LTS collected P270.356 billion, which was 21.96 percent more than its goal of P221.680 billion for the period. In March alone the BIR collected P130.334 billion compared to its goal of

P119.630 billion. In March last year it collected only P117.353 billion which translates to growth of 11.06 percent or an increase by P12.981 billion. Broken down, the bureau’s regional offices collected P41.911 billion, which expanded by only 0.2 percent from its goal of P41.826 billion. The LTS collected P85.403 billion which was 16.62 percent more than the goal of P73.230 billion. Earlier in the month, officials reported that both the Bureau of Customs and the BIR posted higher collections in the first quarter this year. Finance Secretary Carlos G. Dominguez III attributed the increase to the rollout of the government’s “Build, Build, Build” program and the implementation of the Tax Reform for Acceleration and Inclusion signed into law just last year. BIR Commissioner Caesar R. Dulay is making an appeal to all taxpayers to file and pay their income tax early, as well as asking taxpayers to comply with tax laws and support the programs of President Duterte. Rea Cu

BTr keeps the lid on 7-year money to 5.75%

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he Bureau of the Treasury (BTr) has partially awarded the fresh sevenyear Treasury bond (T-bonds) up for auction on Wednesday with P7.932 billion from the P10 billion on offer, keeping the coupon rate for the government security at 5.75 percent. National Treasurer Rosalia V. de Leon told financial reporters the auction committee decided for a partial award of P7.932 billion to keep the coupon rate for the T-bond within internal estimates settling at 5.750 percent. Had the committee awarded the full P10 billion on offer, the coupon rate would have settled at 5.875 percent, or too high for the auction panel. “[We decided on a] partial award because it’s a new issue. A full award would have a coupon setting of 5.875 [percent]. The partial award tempers the increase in the rates. Otherwise, it would have set a new rate for the seven-year benchmark which would be 5.875 [percent],” de Leon said.

The IOU received bids amounting to P20.668 billion with the auction panel rejecting P12.736 billion, resulting to an annual average rate of 5.712 percent. The coupon rate of 5.750 percent was higher by 136 basis points from the average annual rate of 4.390 percent set in the previous auction for a seven-year T-bond. Had the auction committee awarded the full P10 billion would have set the seven-year rate to 5.746 percent. The coupon rate would have been 148.5 basis points higher than the previous auction’s annual average rate. “[The 5.750 percent coupon rate] it’s within those parameters used by the BTr. And it’s also a healthy auction given the tenders [at P20.668 billion],” she added. She further said: “The thing is, we have been able to build sufficient liquidity cushions in the Treasury to temper these rate increases being demanded by the banks,” she said. Rea Cu

Case clippings

By Justice S J Ranada Jr. PUBLIC OFFICERS–disbursements disallowed on audit Public officers must exercise ordinary diligence or the diligence of a good father of a family. This means that they should observe the relevant laws and rules, as well as exercise ordinary care and prudence in the disbursement of public funds. If they do not, the disbursed amounts are disallowed on audit, and the law imposes upon public officers the obligation to return these amounts. Fernando v. Commission 13 Feb. 2018

GR 214910 Jardeleza, J

izal Commercial Banking Corp. (RCBC) posted an unaudited consolidated net income of P4.3 billion for the year ended 2017, 11.4 percent higher than the P3.9 billion reported in 2016. Net income in the fourth quarter alone grew by 146 percent to P904 million compared to P368 million in the same period last year driven by a 27-percent growth in net interest income and a 19-percent growth in non-interest income. For the full year 2017, net interest margin remained strong at 4.24 percent, an improvement of 19 basis points from the 4.06 percent recorded in full year 2016. Net interest income reached P18.0 billion with 15-percent growth yearon-year. This was driven by the bank’s vibrant lending business with total customer loan portfolio expanding by 16 percent to P353 billion. All market segments sustained their growth with 12-percent growth in corporate loans, 39-percent growth in SME Loans, 15-percent growth in consumer loans and 29-percent growth in creditcard receivables. Rizal MicroBank (RMB), the microfinance arm of the bank that provides financing requirements for micro and small enterprises, increased its outstanding loan portfolio by 39 percent year-on-year, through continuous efforts to enhance its current loan products responsive to the needs of its mandated market segments.

Total gross income reached P25.1 billion with total other operating income reaching P7.1 billion or 28 percent of gross income. Fees and commissions, which include card related fees—both credit and debit cards, trust fees, and fees on investment banking and loans were at P3.4 billion, and accounted for 14 percent of total gross income. Total operating expenses increased slowly by 2.3 percent to P17.8 billion for the year ended 2017. The bank pursued the expansion of its distribution network by selectively opening 27 branches and deploying 74 automated teller machines mainly in support of its on-going strategy to broaden customer reach and enhance banking convenience. T his brought the consolidated network to 508 branches and 1,562 ATMs, resulting to a 3.07 branchto-ATM ratio, one of the highest in the industry. Total consolidated resources expanded to P556.3 billion. Total deposits grew by 10 percent or P35.3 billion year-onyear to P388.9 billion. The bank ’s capital funds stood at P67.1 billion and well above the minimum regulatory requirement with a capital adequacy ratio of 15.47 percent and common equity tier-1 ratio of 12.46 percent. The bank ’s asset quality remained stable with NPL ratio at 1.25 percent, lower than the 1.41-percent NPL ratio as of end-3Q17.

The bank’s other businesses continued to grow, addressing the various needs of its customers. RCBC Bankard has a strong and active card base of 579,000 in 2017, higher by 9-percent versus the previous year. The bank has built a strong portfolio under its wealth management business with total assets under management expanding by 12 percent to P103.0 billion. The bank is on track and ready to take advantage of the opportunities expected from the favorable business environment in 2018. Our delivery channels are geared up with new branches and improved ATM systems supported by strengthened security measures in anticipation of the increased client activity in 2018. Competition, however, will continue to be strong. The RCBC management understands this all too well and is prepared to address this with a strong sense of urgency, as we pursue our business plans, key initiatives and key transactions this year,” said Gil A. Buenaventura, RCBC president and CEO. In support of the regulatory sandbox initiative introduced by the Bangko Sentral ng Pilipinas, RCBC has recently partnered with eCurrency Mint Limited to launch its digital money product to deliver accessible and affordable digital financial services in the country.

Tokyo Surprises: Japan’s ‘47’ Part Three

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n last week’s column, I wrote about the “antenna shops” of Tokyo—those that display and sell products from the regions of Japan, function as publicity and tourism centers, offer information about the region for potential visitors, and serve as meeting places for the locals of the region living in the big city. I thought this concept could be useful for our tourism and trade agencies, as well as local governments and trade associations, to emulate and adapt. Another concept that I picked up also during a recent four-day educational visit organized by the Tokyo Convention and Visitors Bureau (TCVB) for our association, ADFIAP, is a themed restaurant in Ginza. It not only displays sample products and tourism brochures of Japan’s regions on a regular and rotation basis, but also features the local food of the regions. This led me to the number in the title, “47.” Japan is divided for administrative purposes into 47 prefectures stretching from Hokkaido in the north to Okinawa in the south. These consist of 43 prefectures (ken) proper; two urban prefectures (fu), Osaka and Kyoto; one “circuit” or “territory” (dō), Hokkaido; and one “metropolis” (to), Tokyo. Wikipedia says the Meiji adminis-

Association World Octavio Peralta tration created the first prefectures (urban-fu and rural-ken) from 1868 to replace the urban and rural administrators in parts of the country previously controlled directly by the shogunate and a few territories of rebels/shogunate loyalists who had not submitted to the new government such as Aizu/Wakamatsu. In 1871 all remaining feudal domains (han) were also transformed into prefectures, so that prefectures subdivided the whole country. In several waves of territorial consol id at ion, tod ay ’s 47 prefec t u res were formed by the turn of the centur y. In many instances, these are contiguous with the ancient provinces of Japan. According to japan-talk.com, most of Japan’s prefectures have a population greater than a million people. Each is home to dozens of towns, hundreds of attractions and numerous local festivals. Prefectures are thus more than mere political boundaries.

The locals strongly identify with their home prefecture and the culture, food and dialect of the Japanese language. It is interesting to note that history and culture are embedded in the dayto-day life of the Japanese and are promoted to the rest of the world through literature, word of mouth and educational visits such as the one graciously hosted by TCVB. I personally admire this trait as this gives people a sense of nationalistic pride. So f rom a ntenna shops, t he “47-themed ” restaurant, to the city parks and science museum, we went to the conference sites and hotel accommodation we visited during the TCVB tour. I could feel the very essence of Japanese history, culture, and arts— a tradition that continues, a character that lingers, and a society that appreciates and lives them. The column contributor, Octavio Peralta, is concurrently the secretary-general of the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) and CEO and founder of the Philippine Council of Associations and Association Executives (PCAAE). PCAAE enjoys the support of ADFIAP, the Tourism Promotions Board, and the Philippine International Convention Center. E-mail obp@adfiap.org

The Regions BusinessMirror

www.businessmirror.com.ph

Editor: Dennis D. Estopace • Thursday, April 12, 2018

A9

ADB cites low-skills trap mires Mindanao regions

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By Cai U. Ordinario @cuo_bm

NDERINVESTMENT in infrastructure, education and skills development caused regions like the Autonomous Region of Muslim Mindanao (ARMM) to be caught in the low skills trap.

In a briefing on Wednesday, Asian Development Bank (ADB) Philippine Country Director Kelly Bird said these lagging regions are ARMM, Bicol, Zamboanga Peninsula, Mimaropa, Cagayan Valley and SOCCSKSARGEN (South Cotabato, Cotabato City, North Cotabato, Sultan Kudarat, Sarangani

and General Santos City). Based on the analysis made by the ADB together with the Organization for Economic Cooperation and Development and the Department of Labor in 2017, these regions have low demand for skilled workers, low supply of skilled workers, low earnings, and

high poverty. “When we’re thinking about infrastructure programs, we think about skills, education, we got to think about, we have to be sensitive to these regional dimensions,” Bird said. Bird noted the National Capital Region (NCR) is considered an area with high skills equilibrium is due to the amount of investments it has received through the years. These investments made it possible for the establishment of a robust Business Process Outsourcing (BPO) and financial services sectors, which are among the strongest drivers of economic growth for the country. ADB Philippines Office Country Specialist Joven Balbosa told BusinessMirror that the Manila-based multilateral development bank is supporting efforts to address this through the Regional Development Project for South Central Mindanao (RDPSCM) and the upcoming Country

Partnership Strategy (CPS). In December 2017, the National Economic and Development Authority (Neda) identified the $100 million-worth Regional Development Project (Phase 1)-South Central Mindanao, formerly the Mindanao Development program, as in the pipeline for ADB financing this year. The CPS that is currently being prepared is for 2018 to 2023. Balbosa said the new CPS will be focused on regional development, consistent with the aim of the national government to pursue federalism. “[This is] anchored on the PDP [Philippine Development Plan] National Spatial Strategy and the new CPS is now under preparation, which emphasized regional development as one of its key programs,” Balbosa said via SMS. Balbosa also said in the briefing that ADB is working together with local governments, particularly lagging regions, to help match

them with leading regions which can help them increase investments in their locale. Apart from the RDP-SCM, the pipeline for 2018 includes financing projects, such as the Expanding Private Participation in Infrastructure Program Subprogram 2 (PBL) and the Inclusive Finance Development Program (PBL). These were formerly known as the “Reducing Income Inequality through Financial Inclusion” programs worth $300 million each. Big ticket projects for next year also include the $11-million Davao Public Transport Modernization Project and the $100 -million Metro Manila Transport Project, formerly Metro Manila Bus Rapid Transit EDSA Project. For 2018, there are also standby projects: the $300-million worth Secondary Education Support Project (SESP) and the $100-million Disaster Risk Financing (Phase 1). For 2019, the firm pipeline of projects includes the SESP, the

Local Government Development Program and the Facilitating Youth School-to-Work Transition (Subprogram 2). Each will cost $300 million. Also included in this pipeline are the $200-million worth Metro Manila Water Supply Project (Phase 1), the $200-million Malolos–Clark Railway Project and the $100-million Disaster Risk Financing (Phase 1). For 2020, the firm pipeline includes Improving Growth Corridors in Mindanao Road Sector Project (Phase 2); the Inclusive Finance Development Program (Subprogram 2); and the Expanded Social Assistance Project. Each will cost $300 million. The standby pipeline for 2020 includes the $300-million worth Metro Manila Transport Project; the $200-million Regional De ve lopment P rojec t (Ph a se 2); Northern Mindanao; and the $100-million Disaster Risk Financing (Phase 2).

Palawan dads slam DENR on crackdown in El Nido

DOE notes absence P of Meralco services in Batangas, Quezon T

HE Depa r t ment of Energy (DOE) has called the attention of the Manila Electric Co. (Meralco) after it found out that the utility firm has failed to prov ide ser v ice i n t he i sl a nd of Isl a Verde, Batangas City. “The government is currently reviewing areas that are still unserved. One of the areas being reviewed is Isla Verde. We are asking them to explain what happened,” DOE Undersecretary Feli x Wil liam B. Fuentebel la said at the sidelines of a forum on Wednesday. Fuentebella added the DOE has yet to receive a reply from Meralco President Oscar Reyes on the letter the government agency sent on April 6. The DOE asked for “reasons the island remains unserved by Meralco up to this date,” the letter of Energy Secretary Alfonso G. Cusi stated. Fuentebella said another island that is under the franchise area of Meralco also remains unserved. “There’s also another island i n Quezon c a l led C agba lete, where it also remains unserved by Meralco.” During the forum, the DOE official said the agency would not hesitate to take over the unserved areas that were tasked to be energized to distribution

utilities (DUs). “We will give them a deadline to comply, and if they don’t comply, it will be deemed waived,” Fuentebella said. “This [approach] applies to all DUs and electric cooperatives.” Cusi earlier committed his full support to implement the directive of President Duterte to remove the barriers to rural electrification. In a meeting on March 6 with Cusi and Energy Regulatory Commission (ERC) Chairman Agnes VST Devanadera, the President focused on the missionary electrification in the unserved areas of the country, and made it clear that he wanted to remove the barriers that are blocking the entry of the private sector to provide better options and more choices for communities. Duterte reportedly ordered the DOE and the ERC to initiate bold executive actions to allow the entry of the private sector so that the consumers can have access to adequate and affordable electricity that will redound to more economic and social benefits. “ The wisdom of the President is using emerging technolog ies t a rget i ng fa r -f lu ng barangays, which have had no power,” Cusi said. “The DOE is fully committed in pursuing his directive.” Lenie Lectura

UERTO Princesa City, Palawan—Members of Pa lawan’s Sangguniang Panlalawigan (provincial board) have criticized the Department of Environment and Natural Resources (DENR) over the 30-day notice of eviction it issued to an initial list of 79 establishments for violating the government-prescribed easement zone. They said the campaign to clean up the town’s timberland areas of alleged illegally constructed establishments, which included the El Nido National High School (ENNHS), is unfair, since the DENR itself issued the documents and permits. Board member David Francis Ponce de Leon, in a privilege speech during a regular session on Tuesday, said the high school has been operating “since time immemorial,” along with other establishments. “The ENNHS was included in the list, and there are establishments here too, that have been there since time immemorial, and the DENR was among the government agencies that issued them permits,” de Leon added. He said it seems ironic that the DENR, which issued the permits to the resorts, schools and other facilities, is now asking them to vacate. De Leon further added t h at t he 30 - d ay dead l i ne i s unreasonable, considering the reality that establishment owners obtained their permits after passing through protocol and proper channels. “If you’re the resort owner, why are you only given 30 days to vacate when, in fact, you passed through the proper channels? The LGU [local government] issued you [a] business permit, the PCSD

This April 2012 photo shows a child on a beach of fine, powdery sand in one of the islets in El Nido, Palawan. On April 11 members of Palawan’s provincial board bucked moves by the Department of Environment and Natural Resources to undertake a cleanup of alleged violators of a government-prescribed easement zone. The government has become concerned with the state of tourist havens like El Nido, Palawan, after Boracay Island has buckled to pressures of high tourist arrival. NONIE REYES

[Palawan Council for Sustainable Development] issued and signed clearances, then you are being told to vacate?” he said. On the other hand, board member Winston Arzaga claimed that the map the DENR is using to issue the eviction notices is old, classifying Barangay Corong-Corong as a forest land. Arzaga noted the village is now highly developed, and that

some est a bl i sh me nt ow ne rs are occupying areas that have land titles. “ T hey have no right to be there, as it is a forest land, but the thing is, there are certain areas in Corong-Corong that are covered by titles,” he said, accusing the DENR of being responsible for what is going on, as it issued land titles. “Who is responsible for issuing

those titles? It’s the DENR,” Arzaga added. He said the El Nido municipal government should also be blamed for allegedly issuing the permits for the construction of the structures. The Sangguniang Panlalawigan has agreed to invite next Tuesday the officials of the DENR and the Department of the Interior and Local Government to discuss the issues in El Nido. PNA

Trust fund for Southern PHL development expands by ₧230.2 million

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HE Mindanao Trust Fund has received P230.2 millionworth of support from various donors, including the Spanish government, according to the MTF’s administrator, the World Bank. In a statement, the World Bank said it received $3.2 million or P166.03 million worth of grants from various development partners. The Spanish Agency for International Development Cooperation (Aecid) also provided complementary funding of £1 million or P64.16 million, for the MTF. “Greater economic opportunity and access to basic services foster hope in conflict-affected areas, which can build understanding and collabora-

tion among community members,” said Mara K. Warwick, World Bank country director for Brunei Darussalam, Malaysia the Philippines and Thailand. “The World Bank is committed to supporting efforts that enhance the prospects for peace in Mindanao.” The new funding will be implemented by the Bangsamoro Development Agency (BDA)—the development arm of the Moro Islamic Liberation Front (MILF)—and humanitarian organization Community and Family Services International, which recently signed a new Program Partnership Agreement. “This new partnership agreement strengthens Normalization under the Comprehensive Agreement on the

Bangsamoro. It will help improve the quality of life of people in conflictaffected areas through community participation and the pursuit of sustainable livelihood within a peaceful, deliberative society,” said Secretary Jesus Dureza, presidential adviser on the Peace Process. “For four years, we have been reaching out to our fellow Filipinos in the south, touching lives and taking ‘peace by piece’ steps toward a developed Bangsamoro.” The project also supported activities to improve livelihoods, infrastructure and basic literacy in the six acknowledged MILF camps: Abubakar, Omar, Rajamuda, Badre, Bushra and Bilal. The decision of Secretary Dureza

of Office of the Presidential Adviser on the Peace Process (OPAPP), the MILF and development partners to further intensify these efforts through the MTF highlight the partners’ commitment to peace and development in Mindanao, according to the World Bank. “The support of the Philippine government and development partners toward projects that strengthen the Bangsamoro’s capacities to improve their socioeconomic conditions reinforce people’s trust on the Bangsamoro peace process and the passage of the Bangsamoro basic law,” MILF Peace Implementing Panel Chairman Mohagher Iqbal said. Established in 2006 with sup-

port from development partners including the Australia, Canada, the European Union, Sweden, New Zealand, and the United States, and administered by the World Bank, the MTF consolidates international

development assistance for the socioeconomic recovery of conflictaffected communities in Mindanao and seeks to build confidence in the normalization process with the MILF. Cai U. Ordinario

A10 Thursday, April 12, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

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editorial

Upgrading Naia

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here was a time, not so long ago, when foreign travelers were advised to stay away from a number of international gateways, the Ninoy Aquino International Airport (Naia) included, because of their capacity to offend travelers. One survey said that, within these terminals, there appears to be a general disinterest in a positive traveler experience. Passengers are made to stand or sit on the floor as they await their flights, and the bathrooms don’t have water, toilet paper or any semblance of cleanliness. That 2016 survey named the Naia as fifth among the world’s worst airports, a reputation that got worse when travelers mysteriously found bullets in their luggage as part of a syndicated shake down. Fortunately, the Duterte administration was able to turn the tide in just a matter of months. The government’s effort to improve services at the Naia paid handsome dividends. A global survey of London-based research firm Skytrax recently named the Naia as one of the world’s “most improved” airports in 2018. The survey, made from August 2017 to February 2018, covered 550 airports worldwide and evaluated traveler experiences across different airport services—from check-in, arrivals, transfers, shopping, security and immigration until departure. The country’s primary gateway was ranked 10th in Skytrax’s “Top 10 World’s Most Improved Airports” poll, where more than 13 million travelers worldwide, from over a hundred different nationalities, participated. Not bad, considering that two years ago it was fifth among the world’s worst airports. The Duterte administration, however, must not rest on its laurels. Authorities know that the Naia has reached its peak, handling 42 million passengers in 2017, or way above its maximum capacity of 35 million passengers annually. This year the throughput is expected at 44 million passengers. Currently, two business groups have submitted unsolicited proposals to invest billions of pesos to modernize and expand the country’s main air hub. The Naia Consortium—a group of seven large Philippine conglomerates—submitted its proposal to the Department of Transportation on February 12. Megawide Construction Corp. and its Indian partner GMR Infrastructures Ltd. submitted their own proposal on March 1. Naia Consortium’s P350-billion proposal involves expanding and interconnecting the Naia’s existing terminals, upgrading airside facilities and developing commercial facilities. Divided into two phases, the proposal aims to increase the hub’s capacity to about 100 million passengers per year. It also plans to construct a people mover that will link the Naia’s terminals to Metro Manila’s existing transport systems. Actual work will take 24 more months for the first wave of immediate expansion. Further expansions are planned to meet projected passenger demand moving forward. The offer carries a concession period of 35 years. Megawide’s offer, on the other hand, involves a more affordable $3-billion price tag, with a shorter concession period of 18 years. The proposal is divided into several phases, of which the first six years of operations would focus on the expansion of the existing terminals, the optimization of the current runways and capacity expansion of the whole airport complex. Upon takeover, the group proposes to construct full-length parallel taxiways for both runways, an additional rapid-exit taxiway for the primary runway, the extension of a second runway and the provision of maximum aircraft stands. These solutions will increase airfield capacity to about 1,000 aircraft movements per day, a 35-percent increase from the current 730 aircraft movements daily. Within the first two years, the proponents will rehabilitate and expand the existing terminals, which will roughly double the terminal area. By that time, the airport will be able to handle as much as 72 million passengers annually. As expected in any multibillion-peso project, there’s friction developing between the two proponents. A Megawide representative publicly protested a Naia Consortium announcement that the group is open to tweaking its proposal, including the concession period that it earlier proposed, just to win the contract. This drama notwithstanding, we have faith in the Duterte administration’s capacity to evaluate projects that are beneficial to the country. The government obviously needs time to carefully study these proposed solutions to the Naia’s congestion problem. But we hope authorities will be able to choose the more viable proposal in the shortest time possible. Statistics released by the Manila International Airport Authority show that the Naia is handling millions of passengers more than its maximum capacity. Clearly, there’s an urgent need to expand and modernize the country’s primary gateway.

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The Philippines and the ‘trade war’ John Mangun

OUTSIDE THE BOX

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T can now be said with absolute certainty that the current trade war that the United States has started has had absolutely no impact on the Philippines.

Of course, considering that the only products on which US tariffs have been raised is steel and aluminum, that conclusion is a no-brainer since the Philippines exports none of either product. Feel better now? The Internet is the greatest tool ever conceived by humans for allowing a person to access and learn all the world’s knowledge and also gives the ability for even a single individual to share ideas and thoughts back to the world. Too bad most people have got the “share” part down perfectly and completely ignore the “learn” part. Sometimes we act like a kid at the back of the classroom, jumping up and down trying to get noticed to feel that we are just like everyone

else. Guess what? The Philippines may be the 13th-most populous nation on Earth, have one of the fastest-growing economies, and is the second “Friendliest Nation,” but when it comes to trade, we are way down the list. In fact, the Philippines is the 52nd-largest exporter, although we are ahead of Algeria but behind Kazakhstan. When it comes to exports as being a percentage of the nation’s GDP, we stand 112th in the world. By comparison, Thailand is at number 21. But that is not a bad situation for the Philippines to be in, and this is why. The question of importance is not how much money a nation makes from exports but how much of its economy is dependent on those

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seems to only address import substitution as it relates narrowly to agricultural products and specialty items like medicines. Once the nation can efficiently and cost-effectively produce everyday consumer and industrial products, then we can look outward. By the way, that is what China did during its period of industrialization. The other problem is that we tend to look to highly developed nations as the model to emulate. That is only true to the extent that we adapt those policies that fit an archipelago spread over 7,000 islands. The same is true even for neighbors like Thailand, which is one truck drive away from Singapore, the world’s busiest transshipment port in the world. In the meantime, while we do not have all the benefits of being a global trade player, at least we do not have the disadvantages. In the meantime, forget the trade wars and concentrate on doing the things necessary to fix our economy. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.

Unions continue to rage against the ‘endo’ issue

✝ Ambassador Antonio L. Cabangon Chua Publisher

exports. The Philippine economy generates 28 percent of its GDP from exports, which is the global average. However, Thailand needs exports to the extent that 68 percent of its GDP comes from exporting products. Malaysia is in the same boat. You may be surprised to know that the US stands at 12 percent, and China gains 20 percent. Indonesia also comes in at 20 percent. It is important for a nation to make money from goods exports. No question about that. However, the amount of money made must be balanced with other sectors of the economy. Notice that these numbers are only for goods exports. The Philippines ranks number 17 in service exports, while Thailand is at number 28. When you look at the dollar amounts, the Philippines has a better balance. There is no question that the Philippines should move to develop and increase goods exports, as it would bring more jobs and more national income. But first, the Philippines needs to move back to the vital program of import substitution that seems to have been put way on the back burner in the past decade. Commentators talk about this all the time. The government

LABOREM EXERCENS Continued from A1

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fter the issuance of DO 174, the DOLE focused its efforts on tighter labor inspection. As a result, thousands of short-term hires were freed from their non-regular status. The latest development: the DOLE’s dramatic announcement that some 7,000 Jollibee employees will be regularized. Still, the labor feds are not impressed. They continue to ask: Where is Duterte’s promise to end contractualization? Where is the executive order to end the endo problem? The anger of the trade unions over the endo issue is understandable. Unionism and collective bargaining have been on the retreat since the 1980s. In its “diagnostics” on “decent work” in the Philippines for 2017, the Philippine Office of the International Labor Organization reported that the number of workers covered by existing CBAs totalled 200,476 in 2016. This is less than 1 percent of the 42 million labor force. This is also much less compared to the 287,450 workers recorded to be enjoying CBA benefits in 1979 when the Philippine labor force was much smaller at around 28 million.

The trade unions blame the decline on the endless efforts of employers to resort to short-term endo hiring arrangements in order to avoid unionism and paying benefits due to regular workers. This, they claim, is facilitated by the liberal rules on “legitimate job contracting” versus “prohibited labor-only contracting,” or LOC. The unions complain that agency workers, hired and deployed by third-party service contractors or “manpower agencies” as “project employees,” often outnumber the direct hires in various service industries, as well as in labor-intensive manufacturing industries.

Employers and cooperating service contractors also take advantage of the Labor Code provision allowing firms to subject workers to sixmonth probation, beyond which he or she is entitled to regularization if the job is “regular and necessary” to the business. To avoid the mandatory regularization, some companies and placement/manpower agencies simply put short-term workers on a “5-5 arrangement,” meaning they are hired for only five months without any intention of regularizing these workers. And yet, under the Constitution, all workers are supposed to enjoy the same rights when it comes to membership in a union and advancement of their collective interests. Section 3, Article XIII, mandates the State to “guarantee the rights of all workers to selforganization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law.” No exceptions given. The modifying “in accordance with law” refers only to the exercise of the right to strike. Similarly, under the ILO Convention 87 (freedom of association) and ILO Convention 98 (collective bargaining), these rights are considered universal. So why can’t the government come up with laws and rules enabling all the non-regular workers—project, casual, probationary,

etc.—to join or form unions and bargain collectively? One reason unionism is enjoyed today by a minority is that existing laws and jurisprudence reserve this right to regular or permanent workers. If workers are not regular, they are automatically excluded from unionism and collective bargaining. This explains why many unions spend so much time bargaining for the “regularization” of the nonregulars, which is often denied by employers through the endo system. Countless cases handled by the court system on the inclusion/ exclusion of workers in the CBA revolved around the determination of their employment status as regular or non-regular, as well as on who is the real employer: the manpower agency or the contracting principal. Managerial and so-called “confidential” rank-and-file employees are also explicitly excluded. In Japan, the non-regulars called “dispatched workers” and “parttime workers” are able to either join existing unions of the regulars or form unions of their own. This is one explanation why the Japanese trade- union movement is able to stop the downward decline of union membership. Can the DOLE come up with rules allowing the union formation of non-regulars or their affiliation in the union of the regulars? If the non-regulars have See “Ofreneo,” A11

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Opinion

BBL creates a theocracy

Dynamics of Easter faith

BusinessMirror

Msgr. Sabino A. Vengco Jr.

Cecilio T. Arillo

database

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he consolidated Bangsamoro basic law (BBL), which is still being ironed out in the House, has no chance of becoming a law unless it conforms to the Constitution.

Besides, BBL starts from a premise that it should be passed into law to change the existing Autonomous Region in Muslim Mindanao (ARMM) because, according to former President Benigno Aquino III, “ARMM is a failed experiment.” Assuming the premise is correct, is the House not committing a wrong by writing another mistake? For sure, the BBL will not pass in the Senate as it introduced, in Section 4 of the proposed bill, the unconstitutional creation of a parliamentary form of government, which is, according to former Senate President Juan Ponce Enrile, an antithesis to the present unitary and hierarchical government. “You cannot even claim to be a Bangsamoro person if you do not believe in Islam and yet they expanded it in Section 4. Why? Because they want population. They included the lumads even if they are not Muslims. That’s another unconstitutionality,” Enrile said, adding that the BBL measure is just a local bill and does not speak of the whole of Mindanao. Another thing, in the same section, as pointed out by Enrile, the BBL is establishing a religious government based on Islam that is intrinsically a theocracy in form and substance and, therefore, violates the state’s secular policy, which is not bound for or subject to religious order. Earlier, the Philippine Constitution Association (Philconsa), an organization of expert constitutionalists, declared as extremely distasteful to the 1987 Constitution the BBL measure. Constitutional experts Manuel Lazaro, who served as presidential adviser to then-President Ferdinand E. Marcos, and former Majority Leader Leyte Rep. Ferdinand Martin Romualdez, Philconsa chairman and president, respectively, aired serious doubts over the proposed BBL when they met with members of a joint legislative panel assigned to craft a final version of the bill. “The proposed BBL is contrary to Section 15, Article X of the Constitution that created the Autonomous Region in Muslim Mindanao and the Cordillera Autonomous region,” Lazaro said. A veteran lawmaker, Romualdez aired the same view “that completely astonished a number of congressmen

Ofreneo . . .

continued from A10

separate unions, can the DOLE come up with rules on how to register the CBAs of the non-regulars? The point is that nonregular workers have equal rights under the Constitution. They do not enjoy those rights because the exercise of those rights does not have enabling laws and rules. Thus, we have an ironic situation: only a tiny minority of workers, who are better paid, enjoy the rights articulated by the Constitution. And yet, the nonregulars, who have less protection at work and who constitute the overwhelming majority in the formal sector, do not enjoy the same rights. Meanwhile, some progressive unions have been trying to organize the non-regulars despite the absence of formal labor laws and rules recognizing the rights of these workers. They have been collaborating with enlightened academics and civil-society organizations (CSOs) to advance “social movement unionism.” The SMU means the protective umbrella of the union covers

“You cannot even claim to be a Bangsamoro person if you do not believe in Islam and yet they expanded it in Section 4. Why? Because they want population. They included the lumads even if they are not Muslims. That’s another unconstitutionality,” Enrile said, adding that the BBL measure is just a local bill and does not speak of the whole of Mindanao. who had previously assured the bill to be compliant with the provisions of the Charter.” Lazaro and Romualdez appeared as resource experts at the March 6 hearing on the controversial BBL jointly conducted by the House Committee on Local Government, chaired by South Cotabato Rep. Pedro Acharon Jr. of the NPC; Committee on Muslim Affairs, headed by Lanao del Sur Rep. Mauyag Papandayan Jr. of the PDP-Laban; and Special Committee on Peace, Reconciliation and Unity under Tawi-Tawi Rep. Ruby Sahali of the NPC. They argued that the Constitution authorizes only two autonomous regions in the country, the ARMM and the Cordilleras, and Congress is prohibited to create another autonomous region without first amending the 1987 Charter. Stressing Philconsa’s “patriotic duty to assist government formulate measures that would enhance peace, Lazaro and Romualdez recommended two options: One is to amend the 1987 Constitution to authorize Congress to create a Bangsamoro Autonomous Region and, second, to consider the urgency of addressing “the deteriorating national security and public safety conditions in Mindanao.” According to Lazaro, these options call for the amendment of Republic Act 6794 that created the ARMM and change its name into Bangsamoro Autonomous Region. Some amendments will also be included to conform to the secular policy of the state and further “enhance and promote peace, development and progress in the region.”

Alálaong Bagá

A

S narrated by Saint Luke (24:35-45), the appearance of the risen Jesus to the two disciples on their way to Emmaus contain certain features that are emphatically repeated a little later to the main body of the disciples as Jesus appeared to them gathered in Jerusalem: reflection on sacred Scriptures, eating and setting forth to proclaim the good news. Thus, the dynamics of our Easter faith is clarified and established for us by the evangelist.

He opened their minds AS in the Emmaus narration (24:2527) at the very start of the encounter with the risen Lord, the instruction from the Scriptures by Jesus was necessary to open the disciples’ minds on the mystery of His death and resurrection. Luke wanted to assure his readers that their faith was wellfounded. Like the other evangelists, he filtered the Jewish Bible through the prism of Christian kerygma to show that the life, death and victory of Jesus were all fulfillment of sacred writings. Jesus recalled that during His public ministry (“while I was still

with you”) He had said that everything written about Him in the books of Moses and in the prophets and psalms must be fulfilled (18:31). Luke alone explicitly spoke of the suffering messiah (24:26); no Jewish text referred to a suffering messiah who would rise from the dead. The texts regarding kingship, the suffering of the just one, and the vindicated servant (cf. Psalms 16:8-11, 110:1; Isaiah 52:13-53:12; Deuteronomy 18:1519; 2 Samuel 7:13-15, etc.) were applied to Jesus clearly only later. For it was in the light of the resurrection of Jesus that all these were deemed by the believers as in fact about Him.

Thursday, April 12, 2018 A11

He ate before them AS in the Emmaus account, Jesus ate in the presence of His disciples as proof that it was really He before them. “Startled and terrified,” “troubled,” with “questions” in their hearts, “incredulous for joy,” the amazed disciples thought they were seeing a ghost. The risen and glorified Jesus was different from the earthly one, though it was the primary intent of the gospel accounts regarding His appearances to show the continuity between the earthly Jesus and the risen Christ. To dispel the notion that the resurrection was fabricated by Jesus’ followers, their very own initial incredulity was met by Jesus showing them His hands and feet, and asking for food, which He ate in their presence. His resurrection was a transformation of His humanness into immortality and triumph over sin and death as a pledge of victory for all who believe in Him. It is remarkable how here Jesus received hospitality and food from His disciples, while elsewhere He was the one giving food to His followers. This is now sharing in the life of the risen Lord. As in last week’s gospel account (John 20:21), what the two disciples in Emmaus did in rushing to share with the others their experience,

Paying estate tax in the wise Atty. Shiendy Loufer D. Casaña

Tax Law for Business

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E live in a world where we aim to invest in properties, own a house and lot of our dream, save money for our loved ones; so when our physical self departs the universe, we are at peace that our successors will be financially secured. Indeed, our death is certain, so with estate tax.

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

Estate tax is a tax on the right of the deceased person to transmit his/ her estate to his/her lawful heirs and beneficiaries at the time of death. It is not a tax on property but a tax imposed on the privilege of transmitting property upon the death of the owner. Prior to the effectivity of the Tax Reform for Acceleration and Inclusion (TRAIN) law on January 1, 2018, the Tax Code of 1997 in relation to Revenue Regulations (RR) 2-2003 imposes a 5-percent to 20-percent estate tax based on the net estate. Under the TRAIN law, the rate of estate tax is fixed at 6 percent. The new rate, however, will apply only to deaths occurring on or after January 1, 2018. Earlier this year the Bureau of Internal Revenue (BIR) issued RR 122018 discussing everything an heir

all workers, regular and nonregular, formal and informal. They also try to innovate in terms of organizing and worker advocacy. Thus, union organizers in the non-unionized call center/BPO sector are now talking on the need to shift organizing and representation framework by helping call-center agents and BPO programmers, mostly hired on a “project-to-project basis,” form “professional IT associations” based on skills. This, in a way, is a revival of skills-based guild organizing. There are also organizers of workers belonging to the vast informal sector or informal economy. In Congress, there is a proposal for a “Magna Carta for Workers in the Informal Economy” (MCWIE), which seeks to establish a system of registering organizations of informal workers at the local and national levels. This MCWIE proposal has been languishing in Congress for more than a decade already, that is, since the 13th Congress. But despite the absence of MCWIE and other enabling laws, these CSOs and people’s organizations (POs) have been organizing different segments of the labor force, e.g., migrants, domestic workers, tribal

people, home-based workers, nonwage transport workers, ambulant vendors, coastal fisherfolk, landless rural poor and so on. The problem, of course, is that there is no system of registering and recognizing the efforts of these CSOs and POs. Without a formal legal standing, the organizations of informal workers and nonregulars in the formal labor market face difficult challenges in asserting their basic workers’ rights at the workplace, including the right to be heard and be given a seat at the policy table. Overall, we have a sad situation where trade unionism is limited to organizing qualified workers in order to forge a CBA contract on behalf of a minority in the formal sector. The Labor Code provisions on union organizing and collective bargaining have become meaningless to the majority of workers in the small formal sector, as well as the larger informal economy. The Labor Code, promulgated in 1974, clearly needs an overhaul. The country needs a more inclusive industrial relations framework, one that can help secure and guarantee the rights of all workers, with no exception.

should know before he/she receives his/her share of the pie. Aside from the new rate, RR 122018 increased the standard deduction granted to the net estate of a deceased citizen or resident of the Philippines from P1 million to P5 million. Nonresident aliens are, likewise, entitled to a standard deduction of P500,000. The deduction for family home is raised to P10 million, from P1 million, based on the current fair market value of the decedent’s family home. On the contrary, deductions for funeral and medical expenses may no longer be claimed. Under the revenue regulation, estate-tax returns are now required to be filed within one year from the death of the decedent from the former filing period of six months. Estate tax may now also be paid by

Prior to the effectivity of the TRAIN law on January 1, 2018, the Tax Code of 1997 in relation to Revenue Regulations (RR) 2-2003 imposes a 5-percent to 20-percent estate tax based on the net estate. Under the TRAIN law, the rate of estate tax is fixed at 6 percent. The new rate, however, will apply only to deaths occurring on or after January 1, 2018. cash installment for a period of two years from the date of the filing of estate-tax return. After the lapse of two years without payment, the entire tax due shall become due, demandable and subject to applicable penalties and interests. Another salient feature of the revenue regulation is the introduction of electronic Certificate Authorizing Registration (eCAR), which will be issued by the BIR in case of partial disposition of estate and application of its proceeds to the estate tax due. As to the most common query of an expectant recipient of his/her pie, an heir may only withdraw the bank deposit of the decedent upon payment of final withholding tax of 6 percent of the amount to be withdrawn. The heir may exercise his/her right to withdraw within a period of one year from the death of the decedent. On the part of the bank, it is required to file the prescribed quarterly return

is now a formal commission from Jesus for His followers to be His witnesses, preaching in His name repentance to all the nations for the forgiveness of sins. This mandate by the risen Jesus is a reprise of major themes in Luke: conversion or repentance, forgiveness of sin and witness. Fanning out from Jerusalem as the city of the promised salvation, all peoples would hear of the liberation from sin by way of conversion. As the resurrection of Jesus provided the light for His followers with which to understand Scriptures as they speak of His mission and saving death, so also the resurrection offers the foundation for the mission of His disciples. Alálaong bagá, it can be said that in Scriptures all that went before Jesus anticipated His coming, and all that has happened after His resurrection witnesses to His glory and victory. All Christians are His witnesses by virtue of His death and resurrection. Our share in His victory means Jesus’ mission of forgiveness and reconciliation with God and with one another is now ours. Join me in meditating on the Word of God every Sunday, from 5 to 6 a.m. on DWIZ 882, or by audio streaming on www.dwiz882.com.

on the final tax withheld on or before the last day of the month following the close of the quarter during which the withholding was made. The bank, thereafter, shall issue the corresponding BIR Form 2306 certifying such withholding. In all cases, the final tax withheld for bank deposit shall not be refunded, or credited on the tax due on the net taxable estate of the decedent. In instances where the bank deposit accounts have been duly included in the gross estate of the decedent and the estate tax due thereon paid, the executor, administrator, or any of the legal heirs shall present the eCAR issued for the said estate prior to withdrawing from the bank deposit account. Such withdrawal shall no longer be subject to the 6 percent final withholding tax. Regardless of these rules, one thing is for sure. During our lifetime, we are taxed and death provides no escape. The author is a junior associate of Du-Baladad and Associates Law Offices (BDB Law), a memberfirm of WTS Global. The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported therefore by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at shiendyloufer. casana@bdblaw.com.ph or call 403-2001 local 170.

One way Massachusetts could make drugs less expensive

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ne big reason Americans pay too much for prescription drugs is that the government has been so reluctant to push prices down. Private health insurers pick and choose the medicines they cover and use that discretion to strike deals with drug companies. Medicaid—which would have far greater negotiating power, if it were to use it—is forbidden to do the same. Massachusetts Gov. Charlie Baker would like to begin to change that. He’s asked the federal government to let his state’s Medicaid program create a selective drug formulary and negotiate prices for the products it chooses to cover. This is a good idea, broadly supported by health-care policy experts and by the Trump administration, as well—but it’s meeting resistance from two powerful forces. The pharmaceutical lobby sees the industry’s revenues under threat, and medical consumer groups evoke the age-old fear— peculiar to the US and usually overblown—that formularies re-

strict people’s access to life-saving treatments. By taking due care, MassHealth, as the state’s Medicaid program is called, could cut profligate drug spending and still ensure that patients get the medicines they need. It would have to create an appeal system that allows beneficiaries and their doctors to use medicines not in the formulary when necessary—one that can work promptly and smoothly without being so permissive as to sabotage the whole idea. MassHealth should be granted this chance to demonstrate that indiscriminately paying for any and all drugs is not the only way to give people access to the medicines they need. Such proof of concept already exists outside Medicaid. European governments maintain formularies, and their citizens enjoy better health outcomes than Americans. The US Veterans Health Administration also makes good use of a formulary, as do private American insurers. Consider that, in the 2016 fiscal

year, 20 percent of MassHealth’s drug spending went to medicines that some big commercial insurers didn’t cover. Despite mandatory rebates that allow Medicaid to pay bargain prices, MassHealth’s drug budget has grown to over $2 billion a year, squeezing other state spending. By selecting one or two drugs from among many that treat the same ailments, MassHealth would be able to offer companies bigger sales in return for lower prices. The agency could also save money by excluding altogether drugs for which there is little or no evidence of effectiveness. The White House budget proposes to allow five states to try what Massachusetts has in mind —though the Centers for Medicare and Medicaid Services has not yet responded to Baker’s request. Arizona has asked to do essentially the same thing. If these states show they can safely save money on medicines, they may finally open the door for Medicaid to push back against high US drug prices. Bloomberg View

2nd Front Page BusinessMirror

A12 Thursday, April 12, 2018

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adds Senate panel eyes charges vs Aquino, Duterte Robles, Loon former govt officials over vaccine mess to Con-com

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By Butch Fernandez

@butchfBM

enate probers, after an exhaustive inquiry into the P3.5-billion Dengvaxia mess, endorsed the filing of graft charges against former President Benigno S. Aquino III and other ranking officials of the previous administration linked to the controversial purchase of anti-dengue vaccines. The Blue Ribbon Committee, chaired by Sen. Richard J. Gordon, will submit its recommendations for plenary action when the Senate reconvenes sessions on May 14.

The panel reported finding an “obvious conspiracy” between Aquino and his Health Secretary Janette Garin, saying this “was made clear during our hearings”

on the Dengvaxia case. “The confederacy to procure and inject en masse was not merely ill-advised, or unwise. It was criminal,” the Blue Ribbon report said, adding, “law violations would not have been committed without the indispensable cooperation of those responsible.” It noted that each of the personalities cited in the Blue Ribbon report “was responsible, were participants in a conspiracy using machinations that cheated the government of scarce resources and endangered the lives of our youth.” The report added: “Others profited, others were enablers or, worse, facilitated the implementation of this sad chapter in our health policy history. Pieces of testimony and documents have shown that

people in government, up to the topmost level, were responsible: for the purchase, the introduction and injections, the grave disregard for adverse effects on the health of our young children, and the damage it has caused civil service and its processes.” Gordon’s committee report recommended further investigation of other Aquino administration officials involved in the Dengvaxia case “or, where evidence will suffice,

prosecuted for violations of Republic Act (RA) 3019, also known as the Anti-Graft and Corrupt Practices Act. It cited Section 3 (g) of R A 3019, which penalizes the act of “entering, on behalf of the government, into any contract or transaction manifestly and grossly disadvantageous...whether or not the public officer profited or will profit thereby.” See “Senate,” A2

The confederacy to procure and inject en masse was not merely ill-advised, or unwise. It was criminal.” — —Senate Blue Ribbon Committee

Power supply ‘sufficient’ throughout summer Continued from A1

during the May 11 to 17 week increasing by around 5 percent, or by 504 MW, from 10,054 MW in 2017 to 10,561 this 2018. The load increment for the past five years indicates the growing trend of peak power demands occurring in the month of May: 8,304 MW on May 8, 2013; 8,717 MW on May 21, 2014; 8,928 MW on May 21, 2015; 9,726 MW on May 3, 2016; and 10,054 MW on May 9, 2017. The same data also showed that capacity during the said period is expected to reach 11,993 MW. As such, gross reserve is expected to remain at 1,432 MW. The following week—or from May 18 to 24—power reserves are expected to go down to 1,274 MW, the lowest expected during the summer months. During this period, the capacity is recorded at 11,644 MW, while demand could hit 10,370MW, which leaves reserves at 1,274 MW.

Plant shutdown

Based on data, DOE Assistant Secretary Redentor Delola assured that “we have enough reserves” even if a number of power plants are scheduled for shutdown. Some of the power plants in Luzon that will go offline are Pagbilao 1 (367.5 MW), from April 1 to 30, and Pagbilao 2 from June 6 to July 5. Ilijan 1 (600 MW) will also be out on most days of April until early May. Team Energy Corp. owns and operates the Pagbilao power facility in the province of Quezon. It also owns a 20-percent stake in the 1,200-MW Ilijan gas plant in Pangasinan. GN Power 1 (300 MW) will not be operational for a couple of weeks in June and July. This indicates that over 1,600 MW of power-generating capacity will be shaved off in Luzon mainly due to scheduled plant shutdowns. “This is based on what we are aware of, mainly of the plants which we are contracted,” Meralco Utility Economics Head Lawrence Fernandez said in an interview. Meralco accounts for about 75 percent of total electricity sales in Luzon and about 55 percent nationwide. Meralco, Fernandez added, similarly forecasts peak demand in its service area to grow by around 5 percent, from last year’s 6,973 MW to 7,328 MW this year. The NGCP said it continues its coordination with power-generating plants to ensure all maintenance shutdowns will not take place during peak periods, particularly at the height of summer when yellow alert notice is often issued. A yellow alert means reserves

are not enough to cover the largest running generating unit at the time, but does not necessarily lead to power outages. For the Luzon grid, this is usually 647 MW, or one unit of the Sual power plant. Still, Laban Konsyumer Inc. (LKI) reminded the DOE to strictly monitor the technical conditions and maintenance of power plants. “The DOE should not be complacent on what they call ambient heat that causes power outages in summer. Consumers are always surprised with a yellow alert,” LKI President Victor Dimaguiba said in an interview. The agency, he also pointed out, should inform the consumers of the real reasons for any unexpected power outage. “The DOE should ensure that there are no perception in the eyes of the consumers that there exist a collusion among power plants. This happens as a seemingly regular cycle during summer. The DOE should also strictly monitor the WESM [Wholesale Electricity Spot Market] prices if collusion is happening in the spot market. We don’t get data from the regulator. Consumers deserve to be informed,” Dimaguiba added.

No worries?

Based on data presented by the DOE, NGCP and Meralco, Luzon indeed has enough reserves, even as the plants mentioned will proceed with their scheduled shutdowns. In addition, there are new power plants coming in. “On the summer months, as projected, we will not have any problem as long as the new power plants will come in and run,” Delola said. An additional 570 MW of new capacity will be added to the Luzon grid. This will come from Pagbilao Energy Corp.’s (PEC) 420-MW plant in Quezon and the 150-MW second unit of SMC Consolidated Power Corp.’s power plant in Limay, Bataan. PEC is a joint venture betwen TPEC Holdings Corp. and Therma Power Inc., wholly owned subsidiaries of TeaM Energy and Aboitiz Power Corp., respectively. Aboitiz Power Corp. President and COO Antonio Moraza, in a text message, said the “official COD [commercial operation date]” of the $1-billion Pagbilao 3 occurred “last March 28.” In addition to the 570 MW of new capacity, Delola said the government could still tap the stateowned 650-MW Malaya thermal plant, which is a must-run unit, whenever supply is in danger. “We

U.S. military might Rear Adm. Steve Koehler (facing camera), commander of CSG-9 of the US aircraft carrier Theodore Roosevelt, briefs top Philippine generals on April 10 in international waters off the South China Sea. The aircraft carrier CVN-71 is sailing through the disputed South China Sea in the latest display of America’s military might after China built a string of islands with military facilities in the strategic sea it claims almost in its entirety. AP/Jim Gomez are not worried for summer.” However, Delola acknowledged that unscheduled shutdowns of plants occur, and the 570-MW additional capacity will not be thrown into the grid for whatever unforeseen reasons. “Our worry is if the 570 MW will not come in and simultaneously there will be forced outage incidents.” In recent years major power plants did conk out during summer months. In some instances, power outages occur red. Authorities said these could not be avoided, considering these are unscheduled plant shutdowns. Cusi also said “we have enough supply for this summer, but not enough to support new developments and infrastructure that we are going for.” Industry players cited the need to build more power plants to support the administration’s “Build, Build, Build” infrastructure program. The private sector heeded. The problem, however, is the delay in permitting process. As such, by the time these plants are needed, new capacity is nowhere in sight.

Energy conservation

While the DOE has pointed out that power-outage incidents are far from happening, amid enough reserves and additional capacity, the situation could be different if there are incidents of unexpected power-plant shutdown and spike in electricity demand. If such incidents occur, a red alert notice could be issued by the NGCP. This is triggered when the power reserve left on the grid

is merely regulating reserve, or equivalent to 4 percent of the current demand. Hence, power interruption may occur. What can be done to prevent it? Conserve energy, leaders in the power sector pointed out. “The NGCP assures its customers and stakeholders that its transmission facilities are adequate for the transmission of any and all available power to the grid. At the same time, we appeal for efficient energy use from commercial and residential consumers to prevent power shortages. Simple practices, such as removing the plugs of appliances from outlets when not in use, keeping the air conditioners at 25°C, and shifting electricity-heavy household duties, such as using the washing machine and ironing clothes to offpeak periods, [before 11 a.m. and after 7 p.m.] will be beneficial to the entire grid,” the NGCP said. Energ y Undersecretar y Felix William Fuentebella said the agency would be active in its information drive on energy conservation. “We must always be ready. Consumers must be wary as to how they could help prevent a spike in demand. We must be aware how to manage our consumption.” Meralco, meanwhile, could activate its Interruptible Load Program (ILP), which is a voluntary, demand-side management program that allows customers to operate their generating sets and collectively reduce electricity drawn from the grid when power interruptions are imminent to ration the limited power supply.

“Under the ERC’s [Energy Regulatory Commission] rules, the ILP may only be triggered when NGCP declares a red alert and there is impending need to drop loads,” Fernandez said. Also, the Senate recently approved on third and final reading a measure institutionalizing a framework to advance energy efficiency and conservation practices in the country, aiming to make the national energy supply more sustainable, stable and affordable. T he Energ y Efficiency and Conservation Act of 2018 (Senate Bill 1531) lays down a solid foundation for a comprehensive energy efficiency and conservation policy that would mandate the efficient and judicious use of energy resources and promote the development and utilization of both new and alternative sources of energy-efficient technologies and systems. “We are helping shape the consciousness of our consumers, including the government, through a change in the policy regime regulating energy consumption. The strategies detailed in this measure are all poised to provide not only savings for the government but also more money in people’s pockets,” Senate Energy Committee Chairman Sherwin T. Gatchalian said. Once ratified, the DOE shall be the lead government agency tasked to ensure the proper implementation of this measure. The industry leaders have spoken. Conservation is the key, the say. Still, it doesn’t hurt to prepare for the worst.

By Bernadette D. Nicolas

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@BNicolasBM

resident Duterte added two experts to the consultative committee (Con-com) tasked to review the 1987 Constitution. The appointments of retired Navy Commo. Rex Robles and lawyer Jose Martin Loon came more than two weeks before the Concom’s self-imposed deadline for the first draft of the proposed federal constitution on April 30. The initial draft will be presented to the public during the regional consultations due to start in May. The Con-com said in a statement that it welcomes the new members. “They will be a big help to Concom in accomplishing its mandate,” the statement read. The appointment of Robles and Loon brought to 22 the number of Con-com members. The final draft of the proposed constitution is set to be submitted to the President on July 19, days before the Chief Executive’s State of the Nation Address on July 23. Robles, a member of the Philippine Military Academy Class of 1965, is one of the founders of the Reform the Armed Forces Movement and was identified in news reports as a close confidant of the late Angelo Reyes, a former Armed Forces chief and Cabinet official. According to the Ayala law firm web site, Loon was engaged by business tycoons Inigo and Mercedes Zobel as their executive assistant and legal counsel. He is a member of the Integrated Bar of the Philippines, Quezon City Chapter, and teaches law at the Manuel L. Quezon University Law School and Political Science at the Ateneo de Manila University. In May 2015 he also made history when he became the first Filipino to receive a Master of Laws degree in National Security Law from the Georgetown University Law Center in Washington, D.C. He was a senior aide and consultant to Sen. Alan Peter S. Cayetano from 2010 to 2014. He is also one of the founders of Aquende, Yebra, Aniag, Loon and Associates, or Ayala law firm. Loon graduated in 2013 with a Juris Doctor degree from the University of the Philippines College of Law. The President also appointed John Castriciones as the ad interim secretary of the Department of Agrarian Reform.

PHL needs to focus on new markets as trade war looms Continued from A1

and visibility campaigns for Philippine products should be made. “We want to diversify markets and, usually, cross-border investment is preceded by increased trade, both of which we need,” Edillon told the BusinessMirror. “We’d rather be strategic, focusing production resource on products for which we have competitive advantage. Now, with global production networks, the high value-added part is in the design and aftersales service, not the production.” On Wednesday the Philippine Statistics Authority (PSA) reported that the country’s merchandise export earnings contracted 1.8 percent to $4.66 billion in February 2018, from $4.74 billion in February 2017. Edillon said the country should be ready for the risks arising from trade tensions between the US and China, which can disrupt global trade. Continued on A2