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Thursday, April 20, 2017 Vol. 12 No. 189

COMPETITION BODY ASKS SC TO STOP COMPLETION OF P69.1-B TELCO DEAL

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he Philippine Competition Commission (PCC) has asked the Supreme Court (SC) to bar PLDT Inc. from completing its acquisition of San Miguel Corp.’s telco asset until the antitrust body’s bid to review the P69.1billion deal has been given closure. PCC Chairman Arsenio M. Balisacan said this is included in their petition for certiorari filed before the High Court, which primarily seeks to lift the injunction issued by the 12th Division of the Court of Appeals (CA) with respect to the review of the transaction among PLDT Inc., Globe Telecom Inc. and San Miguel. Aside from dissolving the writ of preliminary injunction issued by the appellate court, the antitrust body’s petition before the High Court also aims to bar PLDT Inc. from completing the last tranche of payment to San Miguel. “We sought to stop PLDT from further proceeding with the final payment or performing any action for the consummation or implementation of the terms of the acquisition while the case is ongoing,” Balisacan said. Johannes Benjamin R. Bernabe, a commissioner at the competition body, explained that the consummation of the transaction covers a number of activities. “It includes final payment, the rollout of further operations, which avail of the frequencies acquired under this transaction,” he said. The last tranche of the transaction,

BALISACAN: “If our local companies want to be global players, they will need to abide by these [competition] rules. PLDT and Globe should be no exception.”

amounting to P6.6 billion, is expected to be paid by the end of May. “By this petition, we elevate the matter to the highest court of the land to finally allow us to fulfill our legal mandate in the interest of promoting competition in the telco market,” he said in a briefing on Wednesday morning. The competition commission had sought for the review of the deal involving the coacquisition of San Miguel’s telco assets by the two largest telco players in the country. Citing provisions of the transitory rules of the competition law, the two telcos sought legal remedies to stop the regulator from reviewing the deal for alleged anticompetitive practice. Globe’s petition was not granted by the Sixth Division of the CA, while that of PLDT was approved. “We must not lose sight of our main goal in pursuing the review of the acquisition. That is to ensure See “Telco deal,” A2

PESO exchange rates n US 49.6030

Shantytown Philippines Rene E. Ofreneo

1.2M T

The number of Filipinos who depend on mining for their livelihood

Finance Undersecretary Bayani H. Agabin said the audit was not a multistakeholder review required under Executive Order (EO) 79, as it involved only four personnel and a third-party expert. He added this was discovered during a Continued on A2

laborem exercens

he organized effort of the Kalipunan ng Damayang Mahihirap (Kadamay) to occupy the housing project of the National Housing Authority (NHA) in Pandi, Bulacan, reminds us of the severity of the housing shortage for the poor. Continued on A11

How firms are already using AI By Satya Ramaswamy The New York Times

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very few months it seems another study warns that a big slice of the work force is about to lose their jobs because of artificial intelligence (AI). Four years ago an Oxford University study predicted that 47 percent of jobs could be automated by 2033. Even the near-term outlook has been quite negative: A 2016 report by the Organisation for Economic Co-operation and Development said 9 percent of jobs in the 21 countries that make up its membership could be automated. My own firm released a survey recently of 835 large companies (with an average revenue of $20 billion) that predicts a net job loss of between 4 percent and 7 percent in key business functions by the year 2020 due to AI. Yet, our research also found that, in the shorter term, these fears may be overblown. The companies we surveyed—in 13 manufacturing and service industries in North America, Europe, Asia Pacific and Latin America—are using AI much more frequently in computer-to-computer activities and much less often to automate human activities. Our survey asked managers of 13 functions, from sales and marketing to procurement and finance, to indicate whether their departments were using AI in 63 core areas. It found that AI was used most frequently in detecting and fending off computer-security intrusions in the informationtec hnolog y (I T ) depa r t ment. This task was mentioned by 44

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he Department of Finance (DOF) said the audit of 28 mines conducted by the Department of Environment and Natural Resources (DENR) was not a multistakeholder review, casting doubt on Environment Secretary Regina Paz L. Lopez’s decision to shutter the mines.

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DOF questions DENR’s audit of 28 big mines By Jonathan L. Mayuga @jonlmayuga & Rea Cu @ReaCuBM

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Focus your AI initiatives on the back office, particularly where there are lots of computer-tocomputer interactions in IT and finance/accounting. percent of our respondents. Yet, even in this case, we doubt AI is automating the jobs of IT security staff out of existence. In fact,

we find that it’s helping severely overloaded IT professionals to deal with an increase in hacking attempts. AI is making IT secu-

rity professionals more valuable to their employers, not less. In fact, we saw that IT was one of the largest adopters of artificial intelligence. IT is using AI to resolve employees’ tech-support problems, to automate the work of putting new systems into production and to make sure employees use technology from approved vendors. Between 34 percent and 44 percent of global companies surveyed are using AI in their IT departments in these ways.

n japan 0.4576 n UK 63.7200 n HK 6.3814 n CHINA 7.2034 n singapore 35.5424 n australia 37.4999 n EU 53.2488 n SAUDI arabia 13.2282

See “A.I.,” A2

Source: BSP (19 April 2017 )

A2 Thursday, April 20, 2017

BMReports BusinessMirror

DOF questions DENR’s audit of 28 big mines Continued from A1

meeting of the technical working (TWG) group of the Mining Industry Coordinating Council (MICC). “In fact, even Isabela Vice Gov. Antonio Albano, representing the Ulap [Union of Local Authorities of the Philippines], disclosed during the last MICC meeting on March 3 that the LGUs [local government units] of the areas hosting the affected mines were never consulted by the DENR,” Agabin said. He added the audit team, created under DENR Memorandum Order 2016-01, is not a multistakeholder team, as required by EO 79. “None of the 20 departments and agencies represented in the MICC was consulted by the DENR during the audit.” “Section 3 of that DENR memo states that its audit team was composed only of a third-party expert and one officer each from the DENR Central Office, its Regional Office, Mines and Geosciences Bureau and the Environmental Management Bureau,” Agabin added. Earlier, President Duterte has ordered the MICC to review all mining-related issuances and agreements, as well as its rules and regulations, as mandated by law, as part of the reassessment on the audit done by the DENR on the 28 mining sites across the country. Agabin said among the powers

NHCP. . .

Continued from A12

transferred to another sports complex in Clark, Pampanga. Republic Act 10066, or the National Cultural Heritage Act of 2009, provides that structures older than 50 years old cannot be demolished. Any modifications on such structures have to follow strict guidelines set by the NHCP. In its resolution, the NHCP board also noted that the stadium itself was “designed by Juan Arellano of the Bureau of Public Works [and is]

and functions of the MICC is to submit a work plan for the implementation of EO 79, which aims to implement reforms in the mining sector. The push for the multistakeholder teams to conduct the review is within the authority of the MICC to implement under the EO. “The MICC is not a creation of any department. It is mandated under Section 10 of EO 79, which was issued by the previous administration, to conduct an assessment and review of all mining-related laws, rules and regulations, issuances and agreements,” he said. Section 3 of EO 79 provides that a multistakeholder team, led by the DENR, should conduct a review of the performance of mining operations in the country every two years, but no such review has been done since EO 79 took effect in 2012, according to Agabin. He also said the claim of Lopez that the MICC had no legal basis to udnertake a review of mining operations is “puzzling”, as she had agreed to a multistakeholder review and signed MICC Resolution 6 with Finance Secretary Carlos G. Dominguez III, who co-chairs the council. “In fact, it was Undersecretary Maria Paz Luna who volunteered to make the audit report done by the DENR on the 28 mining operations available to the multistakeholder technical review teams, and joined

significant for its Art Deco Style of architecture with features such as curving walls, double band of moldings and beveled corners with nail head ornaments.” The sports complex was rebuilt in 1953 “and hosted not only athletic meets, but also entertainment, religious and social events,” the board added. Heritage conservationists have been in constant uproar over the city of Manila’s seeming indifference to protecting its historical and cultural heritage. Under the term of Mayor Lito Atienza, for instance, he allowed the demolition of the

the other members of the TWG in adopting the framework for the review,” Agabin added.

Even without EO 79, Lopez said the DENR can still inspect mining operations in the country. “The audit done by the DENR was undertaken as part of its mandate and functions, and not necessarily because of EO 79. Even without the executive order, the DENR has the authority to undertake an inspection of mining operations. Thus, a multistakeholder team is not required,” she said. Lopez said the findings of the MICC are only recommendatory and that development projects, like mining, “should benefit the present and future generations.” “I will only get involved [in a project] if there is a commitment to social justice,” she told reporters in an interview. The Chamber of Mines of the Philippines (COMP) welcomed Agabin’s statement, saying it reinforces their claim that Lopez did not observe due process in making her decision and that she was biased against mining firms. COMP Vice President for Legal and Policy Ronald Recidoro said Lopez’s decision should be set aside, because it also “runs contrary to what the law clearly states”. “We applaud the statement

of the DOF issued earlier today, because it aligns with our previous statement that the mine audit conducted by Secretary Lopez last year lacked due process. The audit team was biased against mining companies,” Recidoro said. He also noted the audit teams created by Lopez for the purpose even had civil-society organizations representatives who are known antimining advocates. “It did not give mining companies a fair opportunity to present their side,” Recidoro said. “We are happy that the DOF has issued the statement, because it confirms our position that there should really be a fair and unbiased review of all mining operations in the country,” he added. But COMP expressed disappointment over the decision of President Duterte to reappoint Lopez as chief of the DENR. Recidoro said this was “unfortunate” and vowed that his group will continue to oppose her confirmation by the powerful Commission on Appointments. He said contrary to what Lopez is portraying the mining industr y to be, many people and communities have benefited from mining. COMP earlier warned that the closure and suspension of 28 mines “will condemn to a life of hunger and poverty 1.2 million people who depend on mining as their source of income and livelihood.”

Jai-Alai building on Taft Avenue, a major Art Deco building. It is now a mall. Under Estrada, property developer DMCI was allowed to construct a 49-story condominium along Taft Avenue, ruining the line of sight from the Rizal Monument at the Luneta. A number of historical buildings in Binondo and surrounding areas were also allowed to either be demolished or purchased without consulting government historical and cultural agencies. In a statement issued last December, the Heritage Conser-

vation Society said that, while it welcomed plans to redevelop RMSC, these proposals “must note its adaptive reuse, including keeping all the public open spaces, especially the football and baseball fields. Commercial activities can be built into the facility without diminishing open spaces, where people can engage in sports, participate in events and concerts, and enjoy themselves.” (See, “Heritage Conservationists push more green spaces in Manila redevelopment plan”, in the BusinessMirror, December 9, 2016.)

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AI. . .

Continued from A1

In stark contrast, very few of the companies we surveyed were using AI to eliminate jobs altogether. For example, only 2 percent are using artificial intelligence to monitor internal legal compliance and only 3 percent to detect procurement fraud. What about the automation of the production line? Whether assembling automobiles or insurance policies, only 7 percent of manufacturing and service companies are using AI to automate production activities. Similarly, only 8 percent are using AI to allocate budgets across the company. Just 6 percent are using AI in pricing. So where should your company look to find AI applications that can bestow big benefits without killing jobs? From our survey and best-practice research on companies that have already generated significant returns on their AI investments, we’ve identified three patterns that separate the best from the rest when it comes to AI. All three are about using AI first to improve computer-tocomputer activities before using it to eliminate jobs: ■ Put AI to work on activities that have an immediate impact on revenue and cost. When Joseph Sirosh joined Amazon.com in 2004, he began seeing the value of AI to reduce fraud, bad debt and the number of customers who don’t receive their goods and suppliers who don’t receive their money. By the time he left Amazon in 2013, his group had grown from 35 to more than 1,000 people—all of whom used machine learning to make Amazon more operationally efficient and effective. Over the same time period, the company saw a tenfold increase in revenue. ■ Look for opportunities in which AI can help you produce more products with the same number of people you have today. The AI experience of 170-year-old news service The Associated Press (AP) is a great case in point. AP found in 2013 an insatiable demand for quarterly earnings stories, but their staff of 65 business reporters could write only 6 percent of the earnings stories possible, given America’s 5,300 publicly held companies. The earnings news of many small companies thus went unreported on AP’s wire services. So that year, AP began

Telco deal. . . Continued from A1

the preservation of a level playing field for incumbent and prospective players in the telco industry,” Balisacan said. The spokesman of the two telcos refused to comment until they get a copy of the petition. “The PCC stands by its position to prioritize the public interest in evaluating the competition concerns in every merger or acquisition deal that falls within its jurisdiction,” Balisacan said. It is worthy to note, however, that the review is just the first stage of this legal tussle. Actually, deciding on how to move forward with the evaluation is a much bigger task. There are three possible scenarios should the competition body be successful in completing the review —the transaction could either be approved, disapproved or conditionally approved. Each has a largely different implication from the other, and unraveling the whole transaction would be a huge and costly mess for the parities involved. The deal under question allowed San Miguel to take home P69.1 billion and the two telcos a swathe of frequencies, which are seen to improve the quality of telecommunications services in the Philippines. According to the initial findings of the Mergers and Acquisitions Office of the PCC, the multibillionpeso transaction “will weaken any

working with an AI firm to train software to automatically write short news stories about earnings. By 2015, AP’s AI system was writing 3,700 quarterly earnings stories—12 times the number written by its business reporters. This is a machine-to-machine application of AI. The AI software is one machine; the other is the digital data feed that AP gets from a financial information provider (Zacks Investment Research). No AP business journalist lost a job. In fact, AI has freed up its staff to write more in-depth stories on business trends. ■ Start in the back office, not the front office. You might think companies will get the greatest returns on AI in business functions that touch customers every day or by embedding it in the products they sell to customers. Our research says otherwise. We asked survey participants to estimate their returns on AI in revenue and cost improvements, and then we compared the survey answers of the companies with the greatest improvements (the “AI leaders”) to the answers of the companies with the smallest improvements (the “AI followers”). Some 51 percent of our AI leaders predicted that by 2020 AI will have its biggest internal impact on their back-office functions of IT and finance/accounting; only 34 percent of AI followers said the same thing. We believe the leaders are right: Focus your AI initiatives on the back office, particularly where there are lots of computerto-computer interactions in IT and finance/accounting. Computers today are far better at managing other computers and, in general, inanimate objects or digital information than they are at managing human interactions. When companies use AI in this sphere, they don’t have to eliminate jobs. Yet, the job-destroying applications of AI are what command the headlines: driverless cars and trucks, robotic restaurant ordertakers and food preparers and more. Make no mistake: Automation and artificial intelligence will eliminate some jobs. But we believe companies would be wise to use AI first where their computers already interact. There’s plenty of low-hanging fruit there to keep them busy for years. Satya Ramaswamy is vice president and global head of Tata Consultancy Services’ Digital Enterprise group. potential competitors to PLDT and Globe, such that they will impose less competitive constraints than they would have done in the counterfactual.” The Office of the Solicitor General filed the petition on behalf of the PCC. The PCC claimed that since the beginning, both PLDT and Globe “have resisted scrutiny of the telecommunications deal”. The agency added it will continue to prioritize public interest in evaluating the competition concerns in every merger and acquisitions that fall within its mandate. According to Balisacan, the petition submitted by the Office of the Solicitor General seeks to achieve three objectives: To dissolve the writ of preliminary injunction issued by the CA Twelfth Division; to halt PLDT from further proceeding with the final payment or performing any action for the consummation or implementation of the terms of the acquisition while the case is ongoing; and to finally allow PCC to fulfill its legal mandate, that is, to pursue its review of the deal. Balisacan said this situation is a familiar scenario faced by competition agencies in other countries. However, “companies all over the world have learned to faithfully comply with competition regulations and merger and acquisitions review procedures. If our local companies want to be global players, they will need to abide by these rules. PLDT and Globe should be no exception.” Lorenz S. Marasigan, Elijah Felice Rosales

The Nation BusinessMirror

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Editor: Dionisio L. Pelayo • Thursday, April 20, 2017 A3

House committee vows to prioritize bills creating more court ‘sala’ By Jovee Marie N. dela Cruz

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@joveemarie

O address delays in the adjudication of cases, the House Subcommittee on Judicial Reforms has vowed to prioritize the passage of bills seeking to create more court “salas” in several parts of the country when session resumes in May.

PDP-Laban Rep. Vicente S. E. Veloso of Leyte, panel chairman, said the shortage of court salas is one of the main problems of the judiciary. Veloso, a former Court of Appeals justice, said the insufficiency in the number of trial courts is a cause of delay in the adjudication of cases. Currently, there are 32 pending bills at the Lower House creating regional trial courts (RTCs) in different provinces. Section 16, Article III of the 1987 Constitution provides that “all persons shall have the right to a speedy disposition of their cases before all judicial, quasijudicial, or administrative bodies”. Veloso said the subcommittee held initial discussions on House Bill (HB) 652, seeking to create an additional RTC branch, a municipal trial court (MTC) and a municipal circuit trial court (MCTC), all in Misamis Occidental; and HB 286, urging the creation of an additional branch of the RTC in the Mountain Province. Meanwhile, HB 3492 seeks the creation of three RTC branches in Pampanga, and HBs 3565 and 3749 both seek the creation of four branches of the RTC in Zamboanga City. HB 652 aims to ease the burden of the courts, which will certainly lead to a speedier and inexpensive resolution of cases. The bill seeks to create an additional RTC branch in Ozamiz City; the conversion of the MCTC comprising the municipalities of Clarin and Tudela into an MTC of Clarin; and the establishment of an MCTC covering the municipalities of Sinacaban and Tudela, all in the Second District of Misamis Occidental. Nacionalista Party Rep. Henry Oaminal of Misamis Occidental, chairman of the Subcommittee on Correctional Reforms, said the existing judicial courts in the province’s Second District are beset with docket congestions and delays in the resolution of cases due to the increase in crime rate and the rise in the number of legal cases filed. He said his bill is “in consonance with the State’s policy of providing effective mechanism for the efficient administration of justice.” HB 286 seeks to create an additional branch of the RTC to be located in the municipality of Paracelis, Mountain Province. The bill also seeks to address the “great injustice and social inequity” to the litigants brought about by the far distance of the nearest RTC located in the capital town of Bontoc from the municipality of Paracelis. Nacionalista Party Rep. Maximo Dalog of the Mountain Province said litigants who come from Paracelis have to travel more than 10 hours, passing through the provinces of Ifugao, Isabela and Nueva Vizcaya, just to attend the hearings in Bontoc, Mountain Province, where the judicial courts are located. “One of the reasons most of the cases originating from Paracelis get dismissed is because the complainants and their witnesses fail to appear before the RTCs in Bontoc,” Dalog said, citing the difficulty and cost of travel for the failure of the litigants and witnesses to appear in the trial courts. Also, HB 3492, which seeks the creation of three RTC branches in Macabebe, Pampanga, is aimed at “improving the disposition and administration of justice, ensuring the right of the accused to

OSG asks SC to junk de Lima’s petition seeking release from detention By Joel R. San Juan

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@jrsanjuan1573

AGUIO CITY —The Office of the Solicitor General (OSG) has asked the Supreme Court (SC) to junk anew the petition of detained Sen. Leila M. de Lima seeking her release from detention following her indictment for drug trafficking. In a 92-page memorandum filed on Monday, Calida downplayed de Lima’s claim of being a victim of political persecution for being the most vocal critic of President Duterte’s war on drugs. The top government lawyer believed such argument has no basis, thus, should not be given weight by the SC. “It does not, likewise, help de Lima to allege political persecution to justify the present petition. The writs of certiorari and prohibition are directed against Judge Juanita Guerrero. Judge Guerrero does not belong to the Executive branch, from which the political persecution is alleged to emanate,” the memorandum read. He also said there was nothing wrong with the support he gave the Volunteers Against Crime and Corruption (VACC), the group that filed the complaint against de Lima before the Department of Justice, being a former member of the group himself. “The Solicitor General deemed it prudent at that time to provide much-needed moral support to his former organization, the private complainant VACC, which was then pitted against de Lima, a powerful senator of the land,” the pleading read. Calida, however, did not directly tackle de Lima’s allegation about her supposed meeting with high-profile inmate Jaybee Sebastian at the New Bilibid Prison, where they allegedly forged a deal to pin down de Lima—as alleged in the memorandum filed by the senator’s camp also last Monday.

a speedy trial, and promoting efficient public service.” PDP-Laban Rep. Juan Pablo Bondoc of Pampanga, said there is an urgent need to create additional trial courts in view of the continued increase in the number of cases filed in court. HB 3565, which seeks to create four additional branches of RTC in Zamboanga City, aims to enhance the administration and disposition of justice, which is in line with the constitutional mandate of a speedy trial of all cases.

Nationalist People’s Coalition Rep. Manuel Jose M. Dalipe of Zamboanga said there is a crucial need to increase the number of RTC branches in the city, as the existing trial courts cannot cope with the voluminous number of pending cases. He added there might be an increase in the number of cases to be filed, in view of the Duterte administration’s intensified campaign against illegal drugs. In his HB 3749, Laban ng Demokratikong Pilipino Rep. Celso L. Lobregat of Zamboanga pro-

posed the establishment of four RTC branches in Zamboanga City. He said the establishment of courts will address the urgent need to decongest the court dockets and promote speedy adjudication of cases in their city. Lobregat, a former Zamboanga City mayor, quoted Supreme Court Justice Presbitero Velasco as saying that “the only way to expedite case processing and adjudication is to give each judge a manageable load of 300 cases.”

Economy

A4 Thursday, April 20, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

Duterte infra build up program to generate 1.6-M jobs yearly By Cai U. Ordinario

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@cuo_bm

he Duterte administration will be able to create an average of 1.6 million jobs every year between 2017 and 2022, according to the National Economic and Development Authority (Neda). This is based on the Neda’s projection of the impact of the current administration’s infrastructure spending, which could increase the annual average additional gross value added (GVA) to GDP to 3.4 percent. “[This is based on the assumption that] public infrastructure spending baseline of 5.1 percent of GDP this year [and] gradual increase of public infrastructure spending to 7.4 percent of GDP by 2022,” Ernesto M. Pernia said. “It would create about 1.7 million jobs by 2022.” The Neda estimates that the government’s public infrastructure spending will create 106,824 jobs in 2017; some 823,696 jobs in 2018; around 1.12 million in 2019; 1.23 million in 2020; 1.399 million in 2021; and 1.705 million by 2022. Data showed that additional GVA will be 0.3 percent in 2017; around 2.6 percent in 2018; some 3.5 percent in 2019; another 3.9 percent in 2020; an addition of 4.4 percent in 2021; and 5.4 percent by 2022. These estimates have also taken into consideration the national government’s plan to spend P3.608 billion for ongoing and new infrastructure projects between 2018 and 2020 under the Three-year Rolling Infrastructure Program (Trip). Pernia said the government will spend P1.134 billion in 2018; another P1.183 billion in 2019; plus another P1.292 billion in 2020.

“This [Trip] is a joint project with the Department of Budget and Management, and it will ensure budget support for projects that are in the pipeline. It will also assure that once an infrastructure program has been planned and rolled out, it will continue to receive funding from the government,” Pernia earlier said. The bulk of the allocation will be for transportation worth P2.33 billion or 64.57 percent of the total. The government will spend P627.37 billion in 2018; P764.56 billion in 2019; and P937.84 billion in 2020. The sector which accounts for the second largest value of projects to be undertaken under the 2018 to 2020 Trip is the social infrastructure worth P636.65 billion, which accounts for 17.65 percent of the total. Around P255.29 billion of these projects will be financed in 2018, and another P204.27 billion in 2019. In 2020 around P177.09 billion will be funded. The projects for 2018 are divided according to Tier 1 and Tier 2 projects. Tier 1 projects are those that need to have continuous funding in the next three years, while Tier 2 are the “new” projects. Initially the Trip includes transportation facilities, such as roads and railways; water projects such as irrigation and water supply; energy projects; and social infrastructure such as classrooms and health facilities. These will be part of the Duterte administration’s target to spend a total of P8.2 trillion between 2017 and 2022 to usher in what Budget Secretary Benjamin Diokno terms as the “golden age of infrastructure” in the country.

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Cusi plays trouble shooter role in raging ERC power squabble

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By Lenie Lectura

@llectura

nergy Secretary Alfonso G. Cusi said on Wednesday that he recently met with the Energy Regulatory Commission (ERC) commissioners to address the concerns raised by the public, and the electricity industry sector as well. These concerns were not made public, but an ERC Office Order signed by Chairman Jose Vicente B. Salazar has recently caught the ire of the ERC commissioners. It was gathered that Salazar issued ERC Office Order 72 dated April 7, designating Atty. Ronaldo Gomez as officer in charge (OIC) of the agency while he is on leave from April 9 to 25. Gomez is currently the agency’s executive director. “In the exigency of the service and pursuant to the provisions of existing laws, Atty. Ronaldo Gomez, OIC-executive director, is hereby designated, in addition to his

existing duties and responsibilities, as signing authority for the Office of the Chairman and Chief Executive Officer, and shall perform all the Chief Executive Officer functions of the said office during the leave of absence of Chairman Jose Vicente B. Salazar,” an order signed by Salazar stated. The ERC commissioners, namely, Alfredo Non, Josefina Patricia Magpale-Asirit, Gloria Victoria Yap-Taruc and Geronimo Santa Ana, objected to the designation. In their letter to Salazar dated April 11, the commissioners conveyed to Salazar that various

“The delays incurred by the ERC must be addressed immediately. We cannot have internal squabbles within the commission go in the way of the interest of the public.” —Cusi

Office Orders affecting the reassignment and designation of certain officials performing critical functions of the agency will certainly affect the discharge of their regulatory duties. “The matter has been taken up in an executive session, and likewise arose in previous commission deliberations. In this light, we are

requesting for a special commission meeting to discuss the issues raised herein,” they said. Another letter, dated January 24 2017, showed that Malacañang told Salazar that Santa Ana was designated as OIC of the ERC from April 9 to 25 and May 11 to 15. The Department of Energy (DOE) said the ERC commissioners submitted a report that the agency is currently studying. In their previous meetings with the commissioners, Cusi asked Salazar to ensure that the ERC is working. “I don’t know how you’ll do it, but you have to do it,” Cusi asserted. “The DOE respects the ERC as a strong and independent institution. However, public interest comes first,” Cusi added. In the succeeding meetings with the Commissioners, the DOE will push for a more definite set of outputs from the ERC, aside from pushing to resolve the internal differences within the commission. “The delays incurred by the ERC must be addressed immediately. We cannot have internal squabbles within the commission go in the way of the interest of the public,” Cusi said.

China to boost PHL tourism growth in next 5 years–Leechiu By Roderick L. Abad Contributor

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HINA could make a dramatic change to the Philippine tourism practically overnight, according to Leechiu Property Consultants CEO David Leechiu. “[This is] because we are now ‘BFFs’ [coined term for best friends forever] with China,” he said during the company’s media briefing in Makati City on Tuesday. The top executive was referring to the improved relationship between the two nations, which, over the past decades, has been marred by the sovereign issue over the disputed South China Sea, following the state visit of President Duterte to Beijing in October last year. The Chinese people have been consistently among the top 3 foreign tourists in the country in the last six years, together with the South Koreans and the Americans. Based on data from the Department of Tourism (DOT), about 243,000 travelers from China visited the Philippines in 2011, 251,000 in 2012 and 426,000 in 2013. The arrivals decreased to 395,000 in 2014, yet improved again in the next couple of years from 491,000 to 676,000. “Before, they [Chinese authorities] were preventing people from going to the Philippines [because of] geopolitical issues. [But now], they’re back. That’s why there’s a big jump from 2015 to 2016,” he told the BusinessMirror in a sideline interview.

86%

The target increase in tourism revenue to P3.9 trillion by the end of President Duterte’s term. Last year’s per capita receipts of P28,500 is likewise expected to rise by 53 percent to P43,700 by 2022 While the Philippines is gaining more and more of the Chinese outbound tourists, he emphasized though that this is just a fraction compared to other nations. “[The arrival volume of] 676,000 is actually just 1.7 percent of all the Chinese that traveled last year,” Leechiu said. “We can grow this number 10 times, yet, it still won’t mean anything for the Chinese. That’s how big China is as a tourism market.” He lauded the Duterte administration’s initiative to strengthen the country’s alliance with the world’s most populous nation which, in turn, could result to continuous influx of visitors from China. Leechiu likewise commended the government’s action to maximize the Philippines’s share of the international tourism growth. “We’re going from a global boom to local zoom,” he said, while citing

the robust tourism investments of the administration. As per the National Tourism Development Plan 2017-2022, the indicative budget for tourism is P2.9 trillion, of which P2.3 trillion will be state-funded and P677 billion by the private sector. With such financial supports in place, the DOT targets the 2016 revenues of P2.16 trillion to increase by 86 percent to P3.9 trillion by the end of Duterte’s term. Last year’s per capita receipts of P28,500 is likewise expected to rise by 53 percent to P43,700 by 2022. “We have predominantly domestic tourism today. But hopefully by 2022 we will have a bigger portion of that coming from the foreign market,” Leechiu said. Bullish on future prospects, he said there’s also a possibility that the Chinese travelers could outnumber the Koreans as being the No. 1 tourists in the country today. “It’s hard to say, but it could easily happen,” he said when pressed on the timeline for his projection. “It’s possible to make it happen this year. It’s possible to have it next year.” Being the largest tourism market in the world, Leechiu is optimistic that the Chinese could easily be just as big as the Koreans in terms of arrivals in the Philippines. “Consider also that the population of Korea is so small compared to China,” he added. “China consistently could be the single biggest driver of this market.”

PhilRice machines cut farmers’ labors costs

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he Philippine R ice Research Institute (PhilRice) on Wednesday said it will commercially roll out next year two farm machineries that would reduce farmers’ labor costs by at least 20 percent. PhilR ice said a machine it developed called a hand tractor mounted multipurpose seeder (MP Seeder) could reduce farmers’ labor cost by around 20 percent to 30 percent. “It hastens the planting process. Normally, laborers finish the job by at least one whole day, but with the MP Seeder, farmers can finish planting for half a day,or even as fast as three hours,” Engr. Eden Gagelonia, lead engineer of the MP Seeder, said in a news statement.

“Aside from rice, it can also plant mungbeans and corn seeds in dry pulverized soil, and later, cover the seeds with another layer to protect them from birds and rodents,” Gagelonia added. The MP Seeder is attachable to local hand tractors with a ride-on operator for mechanical, dry, direct seeding for rainfed areas, according to PhilRice. The attached agency of the Department of Agriculture (DA) also developed a Hydrous Bioethanol Fuel-Feeding Device (HBFFD), which could power small agricultural machines using alternative fuel. “It can power microtillers, power tiller haulers, micromills, water pumps, pump boats and other machines operated by gasoline engine,”

said Engr. Alexis Belonio, lead engineer of the device. He said the HBFFD utilizes bioethanol fuel, which can be extracted from sugar-rich crops such as nipa, sugarcane molasses, acacia fruit and pineapple peels using a bioethanol fermentation and distillation facility, according to PhilRice. “With our depleting supply of fossil fuel, the use of bioethanol technology is a cost-efficient system because our farmers can now produce and use clean alternative fuel from their farm resources at the least cost,” Belonio added. The two new farm machineries were developed by PhilRice in partnership with the Bureau of Agricultural Research, another attached agency of the DA. Jasper Arcalas

www.businessmirror.com.ph

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Thursday, April 20, 2017 A5

TheBroa

Business

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Honks, hisses as PHL attempts mode

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By Lorenz S. Marasigan

@lorenzmarasigan

HE government’s thrust in modernizing public transportation in the country to gain access to reliable transportation may be well and good, but for ordinary drivers, it will be a hell lot of a burden to bear. Often described as a progressive transportation agenda, the modernization of public-utility vehicles in the Philippines is a six-year program that has multiple facets and, when completed, will help Filipinos enjoy a better public transportation experience. At least, that is the expectation. Under the proposed program, the Land Transportation Franchising and Regulatory Board (LTFRB) is tasked to undertake reforms in regulation through the Omnibus Franchising Guidelines. The program also mandates the LTFRB to implement new jeepney-vehicle standards, rationalize routes and assist in a proposed scrapping program, among others. Other government agencies will be involved in the agenda’s implementation. T he Department of Trade and Industry (DTI) will help extend the Comprehensive Automotive Resurgence Strategy (Cars) Program, which provides vehicle manufacturers with incentives. The Department of Finance, on the other hand, will help the land transportation regulator to implement a financing program for the proposed ref leeting of public-utility jeepneys. ​“ These programs require collaboration among all involved parties to ensure proper and inclusive implementation,” the transportation department said in an e-mail. “Government agencies will work together to facilitate this initiative from preparation, to transition and to implementation.”

Unsafe, uncomfortable

DESPITE having received certificates of public conveyance, the transportation department believes that “most public-utility vehicles on the road are not safe, not comfortable and produce significant amounts of air pollution.” “For instance, riding through the back of jeepneys presents safety hazards for passengers,” the transportation department said. “Exhaust from old and poorly maintained vehicles is a health threat not just for users, but for drivers and the public as a whole.” T h roug h t he i mplement ation of national standards and “modernizing” the current fleet, the agency aims to make ​p ublic transport “safe and enjoyable, reduce air pollution and move more people efficiently.” In a nutshell, the modernization agenda aims to effect a transition from current vehicles plying the road to “high-quality public-transit requisites.” The Department of Transportation (DOTr) listed these items as follows: “higher capacity vehicles, low emission vehicles, fleet consolidation, reformed business model and an effective information-technology system.” Initial benefits of the program to commuters are easier access to public transport due to an expanded network that connects different routes and establishments, and the availability of “more reliable” public transportation means. “ Travel times may also decrease due to routes becoming

optimized,” the transportation department said. “Vehicles will be more comfortable, spacious, clean and safe.”

Sacrifices

BUT in order for the modernization program to be successful, a huge portion of the sector has to sacrifice. The program will largely affect jeepney drivers and operators, more than buses, taxis and UV Express. Pagkakaisa ng mga Samahan ng Tsuper at Opereytor Nationwide (Piston) President George F. San Mateo said that, while his group is supportive of the government’s aim in modernizing and improving the public transportation sector, it is but unfair to mere jeepney drivers for the government to require them to replace their units with “new, imported jeeps”. He called the modernization of jeepney units as “a fake modernization program whose essence is the corporatization, monopolization and phase out of the jeepney.” Under the program to modernize the iconic Filipino jeepney, the government requires drivers and operators to use vehicles equ ipped w it h low- em i ssion Euro 4 technology. It will, likewise, require the phasing out of 15-year-old vehicles, as they are “found” to emit gases harmful to the environment. This, San Mateo said, is “very costly” for ordinary Filipinos. B a s e d on c u r re nt m a r k e t prices readily available on the Web, a vehicle with such technology ranges from P1 million to P1.5 million.T here are 209,124 jeepney dr ivers nationw ide at r isk of being “ d isplaced and dispossessed ” through the moder nization program.

‘Antipoor’ program

THE proposed program lists the requirements for a fleet consolidation or management scheme. In layman’s term, it will be compulsory for operators to have a minimum market capitalization of P7 million, and a minimum fleet of 10 jeepney units, which are also required to be doubled by 2018, and doubled again by 2019. The same is true for buses, taxis and UV Express operators, all of which have higher requirements versus jeepneys. Typically, jeepney operators in the Philippines own a single unit of jeepney. While there are operators with a larger fleet, small players, such as overseas workers and retirees form a larger part of the jeepney mix. Hence, given current market prices, a small player will have to have at least P10 million to meet the required fleet. “This only tolerate big businesses to control the public-transport industry, mostly small operators, which are overseas Filipino workers, and retirees, that cannot afford to acquire the minimum of 10 units,” Stop and Go Transport Coalition President Jun Magno said. A jeepney operator ma kes about P650 daily as boundary, which is a colloquial term used by drivers to refer to the share

A traffic enforcer assists motorists and commuters on Aurora Boulevard in Quezon City. ALYSA SALEN

of their operator. The rest of the earnings, no matter how big or small, are left to the driver. “With that earning, can an operator change his or her unit and replace it with a brand-new unit with this small amount of income?” Magno asked. Non-governmental organization Ecumenical Institute for Labor Education and Research (Eiler) claimed the modernization “will not benefit the hundreds of thousands of jeepney drivers, operators and urban poor”. “The plan forces the operators to enter the fleet management program whose main functions are outsourced to and operated by private corporations,” it said in a position paper. For its part, the transportation department said the fleet management program will help in the efficient deployment of vehicles. “The modernization program not only involves modern vehicles but also pushes for the establishment of fleet management systems so that vehicles can be deployed efficiently,” it said.

Paying more

TO help the operators cope with the demands of the proposed program, the government plans to tap the Land Bank of the Philippines and the Development Bank of the Philippines to develop a loan facility for the operators. “ T he de pa r t ment re a l i z es t hat moder ni zat ion requ ires high capital costs, so it is coordinating with the finance and trade departments, and other financial institutions in designing programs that will give manufacturers and operators better access to credit,” the DoTr said. “It is not antipoor.”

But for Eiler, such a facility will not, in any way, be beneficial to the operators or drivers. “The government proposes to loan the jeeps to those who cannot afford the electric vehicle through bank financing. Similar to other public-private partnership projects, there is financial risks involved and only the profit of the financiers is guaranteed,” a statement by Eiler said. Aside from the loan facility, the finance department has pledged to allocate P8 billion for the Pantawid Pasada Program of the LTFRB. The program is a fuel subsidy in the form of cards for public-transport operators and drivers. Pantawid Pasada, which will be used as a seed fund to improve access on loans, aims to offset the impact of rising fuel prices due to the planned excise tax on petroleum products and the jeepney modernization program in line with the tax-reform initiatives of the government.

Fare difference

BECAUSE the modernization program requires drivers and operators to invest heavily in new units, fare increases will be imminent. “The modernization scheme does not tackle oil overpricing and value-added tax on basic goods and services, which only worsen the lives of Filipino transport drivers and operators,” Eiler said. “The recent fare hike is also another burden to the commuters.” Eiler added the organization does not oppose improvements of services. “But we do oppose the transfer of jeepney operations to big private businesses,” the group said. “This will not solve the poor living conditions of most jeepney drivers, instead

jeepneys fill a street while waiting for their turn to cross Aurora Boulevard in Quezon City. ALYSA SALEN

robs them of their livelihood.” Magno agreed, citing fare differences of regular jeepneys and electric vehicles. The minimum fare for an e-jeep is P11, while that of a regular jeep is only P8. “If we implement the modernization by shifting to electric or solar jeep, it has great impact to the riding public because of highfare adjustment,” he explained.

Unnecessary add-ons

IN order to cope w it h t he heav y cost s t h at w i l l be shou ldered by t he d r ivers a nd oper ator s , t he t r a n s p or t at ion d e pa r t ment su g gested for sm a l l pl ay e r s t o me r ge t o me e t t he m i n i mu m re q u i re me nt s . “Sma l l operators can consolidate to pool resources, meet minimum credit requirements

aderLook

sMirror

www.businessmirror.com.ph | Thursday, April 20, 2017

ern public transportation

TARGET: Public Operators and Drivers

routes introduced by local governments in their local public transport plans.

What are the Omnibus Franchising Guidelines for?

Are colorum vehicles excluded? When the Omnibus Franchising

These are new guidelines for issuing public-transportation franchises, which aim to improve land public transport in the Philippines. Through these guidelines, public-transport services will be provided in accordance with the LGUs’ public-transport plans, where routes are based on passenger demands and the existing road network. These guidelines also ensure that approved franchises have safe, comfortable and environmentally sustainable vehicles.

Why PUV modernization?

​ Most public-utility vehicles on the road are not safe, uncomfortable and produce significant amounts of air pollution. For instance, riding through the back of jeepneys presents safety hazards for passengers. Exhaust from old and poorly maintained vehicles is a health threat, not just for users, but for drivers and the public as a whole. By implementing national standards, and modernizing the current fleet, the Department of Transportation (DOTr) aims to make ​public transport safe and enjoyable, reduce air pollution and to move more people efficiently.

How will these programs benefit the public?

Commuters will have easier access to public transport due to an expanded network that connects different routes and establishments. R iding public transport will also be more reliable. Travel times may also decrease due to routes becoming optimized. Vehicles will be more comfortable, spacious, clean and safe.

How will these programs benefit public transport drivers?

Drivers will have the security of monthly salary and benefits. Drivers will have reduced working hours, making it safer for both the driver and the passengers. Due to modernized vehicle specifications, drivers will also be less exposed to air pollution and other health hazards. for a short distance of route,” he explained.

Drivers’ benefit

and share the cost of operations and maintenance,” Eiler said. The agency added that organizing operators will reduce costs by sharing services, such as cleaning, repairs, maintenance and fleet management. “It will also be easier for operators to obtain fuel and spare parts at discounted rates,” it said. The proposed modernization

prog ram a lso mand ates t hat public-transportation vehicles should be equipped with a global positioning system device and Internet connectivity. For Magno, these are unnecessary add-ons, not to mention unwanted costs. “Such devices are not applicable and worthless for a jeep, because the practice of its operations is pick and drop

BUT the transportation department maintained that it is not backing down in implementing the much-needed program, which has been placed in the back burner several times now. It claimed that through driver support programs, the quality of public transport will be enhanced, hence, both commuters and drivers will benefit from it. “ T he d r i ve r s up p or t pro grams in the form of training and accreditation will improve the quality of public transport, enhance the dignity and professionalism of drivers and encourage more people to use public transport,” it said. It added that the program will help the drivers achieve job security, as the program will require operators to provide monthly salary and benefits, in lieu of the boundary system. “Drivers will have the security of monthly salary and benefits. Drivers will have reduced working hours, making it safer for both the driver and the passengers,” the agency said.It added t h at w it h t he ph a seout of ve h ic les a ged 15 a nd up, hea lt h r i sk s w i l l a l so be m i n i m i z ed . “Due to modernized vehicle specifications, drivers will also be less exposed to air pollution and other health hazards,” it said. A side from this, the transpor tation depar tment and its attached agencies w il l conduct route rationa lization studies w ithin and outside Metro Manila to help improve mobilit y. A loca l public-transpor t route plan w il l be available by 2019.

A not her goa l is to inc lude a l l modes of publ ic t ra nspor t at ion to t he automated fa re col lect ion sc heme.

Revamp needed

BUT in order for all of these to push through, the transportation department must implement the Omnibus Franchising Guidelines, which spell out the rules for issuing public-transportation franchises. “ Through these guidelines, public-transport services will be provided in accordance with the local government units’ publictransport plans, where routes are based on passenger demands and the existing road network,” the agency said. T hese g uidelines w i l l a lso “ensu re t h at approved f ra nchises have safe, comfortable and environmentally sustainable vehicles.” “With the Omnibus Franchising Guidelines, public-transport franchises will be in accordance with local public-transport plans instead of the current situation where public-transport franchises are dependent on route proposals of operators,” the transportation department said. T he Omn ibus Fra nc h ising Guidelines will be released in the fourth quarter of 2017. The transport department also assured that existing franchises will continue to operate for the next two to three years upon issuance of the guidelines. “During and after the transition period, operators can apply to operate new or modified routes introduced by local governments in their local publictransport plans,” the transport department said.

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How will these programs benefit public transport operators?

Improvements in public transport will increase ridership, while reducing traffic congestion. As a result, operators will be able to accept more passengers, without their vehicles getting stuck in traffic. Furthermore, organizing operators will reduce costs by sharing services, such as cleaning, repairs, maintenance and fleet management. It will also be easier for operators to obtain fuel and spare parts at discounted rates.

How will this be enacted?

​These programs require collaboration among all involved parties to ensure proper and inclusive implementation. Government agencies will work together to facilitate this initiative, from preparation to transition and to implementation. Through appropriate cooperation from industry stakeholders and commuters, these programs will give our country a well-integrated, efficient, safe and sustainable public-transport network that all citizens can benefit from.

What will happen to old jeepneys and the icon of jeepney?

Guidelines are released, the moratorium on issuing franchises will be lifted and even colorum vehicles will be given the chance to apply for franchises.

Is PUV modernization antipoor?

No, it is not. The DOTr realizes that modernization requires high capital costs, so it is coordinating with the Department of Finance, the Department of Trade and Industry and other financial institutions in designing programs that will give manufacturers and operators better access to credit. Driver support programs in the form of training and accreditation will improve the quality o f p u b l i c t r a n s p o r t, e n h a n c e t h e dignity and professionalism of drivers and will encourage more people to use public-transport. Small operators can consolidate to pool resources, meet minimum credit requirements and share the cost of operations and maintenance.

Will jeepneys be phased out?

No. Jeepneys will not be phased out, but instead, modernized to provide better ser vices to commuters. The PUV modernization program not only involves modern vehicles, but also, pushes for the establishment of fleet management systems so that vehicles can be deployed efficiently.

Will modernization kill local manufacturers?

The DOTr is only providing basic guidelines for vehicles to ensure that quality public transportation is provided. It does not, in any way, favor any company, and is looking at ways to make the transition as easy as possible for manufacturers.

BEFORE AND AFTER SCENARIOS Operators, drivers

[B-Before] Public-transport franchises dependent on route proposals of operators [A-After] Public-transport franchises in accordance with local public-transport plans [B] Boundary system where drivers need to compete for passengers. [A] Drivers are protected. Their salaries are not based on number of passengers. [B] Drivers subjected to health risks, cashstrapped, untrained [A] Salaried drivers with adequate training [B] Operator having to worry about repair, parts, fuel, etc, for his one vehicle [A] Operators organized to share good quality services and discounted parts/fuel

Public transport

[B] Passengers who think of buying cars and motorcycles, [A] Passengers who enjoy their commute [B] Passengers boarding on the rear (exposed to pollution, other vehicles, maybe floods, rain) [A] Passengers boarding on the side (protected) [B] Passengers in long lines [A] Passengers comfortably riding a bus

​The icon of the jeepney is not the physical shape of the vehicle, but the creative spirit of the Filipino to adapt to changing needs. Although safety guidelines may significantly change the look of jeepneys, these improvements are necessary to make public transport, particularly jeepneys, more comfortable, clean and safe.

[B] Poor public transport > more private vehicles > PUVs stuck in traffic [A] Good public transport > less private vehicles > more efficient PUVs

What will happen to existing franchises?

[B] Crowded jeepneys [A] Spacious bus

Existing franchises will continue to operate for the next two to three years upon issuance of the guidelines. During and after the transition period, operators can apply to operate new or modified

Vehicles

[B] Public transportation is unclean, unsafe, inconvenient [A] Clean, safe, with Wi-fi, PWD-friendly

[B] Public transport users are low-income citizens only [A] Public transport users are from all income levels

Source: Department of Transportation https://www.foi.gov.ph/requests/ aglzfmVmb2ktcGhyHgsSB0NvbnRlbnQiEURPVHItODgwMTM5NTEyNTA0DA

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The World BusinessMirror

Thursday, April 20, 2017

briefs

Facebook killer takes own life as police close in

ERIE, Pennsylvania—The man who randomly gunned down a Cleveland retiree and posted the video of the crime on Facebook killed himself on Tuesday during a police chase in Pennsylvania that began when a McDonald’s drivethru attendant recognized him. It marked a violent end to the nearly 48-hour multistate manhunt for Steve Stephens, whose case brought another round of criticism down on Facebook over how responsibly it polices objectionable material posted by users. Acting on a tip from the McDonald’s, state troopers spotted Stephens leaving the restaurant in Erie and went after him, bumping his car to try to get it to stop, authorities said. He shot himself in the head after the car spun and came to a stop, the police said. AP

Singapore to get Business, politics stoke Expensive more costly for businesses sales of Ivanka’s brand B

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HANGHAI—Since her father was elected president of the United States, global sales of Ivanka Trump merchandise have surged and her company has applied for at least nine new trademarks in the Philippines, Puerto Rico, Canada and the US.

U.N.: 16 staff members freed by South Sudan refugees

KINSHASA, Congo—The United Nations said late on Tuesday that 16 staff members taken hostage by unarmed South Sudanese refugees at a UN camp in eastern Congo have been released unharmed. The UN peacekeeping department said in a statement released at UN headquarters in New York that “the camp is quiet and under full control” of peacekeepers at the Munigi base in North Kivu province. The UN Mission in Congo said earlier that the South Sudanese refugees took 13 staff members hostage, demanding they be sent to another East African country to avoid their forced return to South Sudan. Negotiations had continued into the evening. The UN peacekeeping department said later there were 16 hostages. AP

New Zealand toughens requirements for skilled immigrants

WELLINGTON, New Zealand— New Zealand is introducing tougher requirements for skilled overseas workers as it tries to control immigration numbers that have reached an all-time high. The announcement by Immigration Minister Michael Woodhouse comes after Australia said it would scrap a temporary visa for skilled overseas workers and US President Donald J. Trump signed an order he said should help American workers whose jobs are threatened by skilled immigrants. Woodhouse said on Wednesday in a speech the government would not apologize for the fact that most industries that relied on overseas workers were saying it was becoming more difficult to recruit people from abroad. He said the government was committed to putting New Zealanders first. The changes include new income thresholds for immigrants to qualify as skilled or highly skilled.

AP

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

President Donald J. Trump and his daughter Ivanka walk to board Marine One on the South Lawn of the White House in Washington in this February 1 file photo. Ivanka’s company continues to grow. Ethics lawyers fear the more her business expands, the more it may encroach on her ability, and husband, Jared Kushner, to credibly advise the president on core issues. AP/Evan Vucci

The commercial engine of the first daughter’s brand is stronger than ever even as she builds a new political career from her West Wing office. Sales hit record levels in 2017, despite boycotts and several stores limiting her merchandise. US imports, almost all from China, shot up an estimated 166 percent last year. The brand, which Ivanka Trump no longer manages but still owns, says distribution is growing. It has launched new activewear and affordable jewelry lines, and is working to expand its global intellectual property footprint. In addition to applying for the new trademarks, Ivanka Trump Marks Llc. has won provisional approval from the Chinese government for at least five more since the inauguration. In a statement on Tuesday, a spokeman for the Ivanka Trump brand said the 2017 Chinese trademarks were filed defensively to prevent counterfeiters or squatters from using her name. Criminal conflict-of-interest law prohibits federal officials, like Trump and her husband, from participating in government matters that could impact their own financial interest or that of their spouses. Some argue that the more her business broadens its scope, the

more it threatens to encroach on the ability of two of President Trump’s most trusted advisers to deliver credible adv ice on core issues like trade, intellectual property and the value of Chinese currency. Trump is no longer running the brand, and she has shifted its assets to a family-run trust valued at more than $50 million. In a recent interview with CBS News, she argued that her business would be doing even better if she hadn’t moved to Washington and placed restrictions on her team to ensure that “any growth is done with extreme caution”. Meanwhile, her husband Jared Kushner has taken steps to distance himself from his sprawling New York real-estate business, divesting some of his business interests, including his stake in a major Fifth Avenue skyscraper. The new trademark applications seek the right to put Ivanka Trump’s name on lingerie in the US, baby clothes in the Philippines, handbags in Puerto Rico and perfume in Canada, among a host of things. Trademarks can be used to expand a business or defend against copycats. They have ethical implications for public ser vants because they are granted by foreign governments and can be enormously valuable.

180 The estimated number of pending and registered trademarks of Ivanka Trump Marks Llc. in countries including China, Japan, Mexico, Turkey, Israel, Canada and Saudi Arabia

Her brand said in a statement that Trump herself did not sign off on the new applications, adding they are “not necessarily” an indication of planned expansion. “The brand has filed, updated and rigorously protected its international trademarks over the past several years in the normal course of business, especially in regions where trademark infringement is rampant,” Abigail Klem, president of the brand, said in a statement. “We have recently seen a surge in trademark filings by unrelated third parties trying to capitalize on the name and it is our responsibility to diligently protect our trademark.” Iv a n k a Tr u mp M a rk s L lc. has more than 180 pending and registered trademarks in countries that include China, Japan, Mexico, Turkey, Israel, Canada and Saudi Arabia. In China alone the company has more than 30 pending trademarks. I n Tr u m p ’s a d m i n i s t r a tion, Ivanka and her husband have taken on prominent roles as China interlocutors. Norman Eisen, who served as President Ba rac k Oba m a’s c h ief W h ite House ethics law yer, says he would “never have allowed it.” “Ivanka has so many China ties and conflicts, yet she and Jared appear deeply involved in China contacts and policy,” he said. “For their own sake and the country’s, Ivanka and Jared should consider stepping away from China matters.” Jamie Gorelick, an attorney for Ivanka Trump, said she and her husband would steer clear of specific areas that could impact her business but are under no legal obligation to step back from huge swaths of policy, like trade with China. “The ethics rules restrict participation in ‘particular matters’ that focus on the interests of a discrete and identifiable class,” she said. “Foreign policy toward China is not a particular matter. It affects diverse national interests and every sector of society.” AP

usinesses in Singapore are bracing for higher costs in a country that’s already among the world’s most expensive to live in. From a 30-percent increase in water prices to higher diesel costs to a looming carbon tax, manufacturers are being forced to adjust their operations to remain competitive in an economy that’s only recently recovering from an export slump. It also signals a pickup in inflation, an outcome the central bank flagged in its monetary-policy statement last week. Of the measures announced by Finance Minister Heng Swee Keat in his Febr u a r y bud ge t , h i g he r water tariffs have generated the most debate and anxiety among Singaporeans. Having kept the cost steady since 2000, Prime Minister Lee Hsien Loong is clear why the government needs to adjust prices: as an island nation that’s water-stressed, the state needs to pay for expensive desalination plants. Higher prices will also make consumers more aware of their usage of the scarce resource. For Lee Soon Kiat, director of government relations at semiconductor maker Globalfoundries Inc., higher water tariffs—to be implemented in two phases beginning in July—means extra costs of as much as S$5 million ($3.6 million) a year at plants producing electrical circuits. “It’s clear that it will add to our operating costs,” said Lee, who is also a member of the executive committee of Singapore’s Semiconductor Industry Association. “It’s an issue that our industry will have to adapt to, and continue to pursue water saving or recycling measures in our processes.”

Competitiveness index

Singapore i s rout i ne ly ranked among the top when it comes to global competitiveness, mainly because of its low company tax rates, good infrastructure and easy procedures to open a business, rather than cost effectiveness. It was placed fourth out of 61 countries in last year’s world competitiveness index—compiled by the Swiss business school IMD—but ranked among the lowest, at 57, on scores for cost of living. Song Seng Wun, a regional economist at CIMB Private Bank in Singapore, said the government is banking on companies accepting higher costs in exchange for the city state’s other advantages: its reliable power and water supply, business-friendly framework,

stable legal and political system and competitive tax rates. “Singapore has never been the cheapest place to do business,” he said. “Other factors have to be strong enough to keep Singapore as a very competitive place.” Having a green and healthy environment is “also a competitive advantage,” he said. The moves fit into the government’s broader goal of forcing businesses to innovate in order to boost productivity, from encouraging companies to adopt digital technologies to reskilling workers to keep pace with global change.

Tiger beer

At S$1.21 per cubic meter currently, water for industrial use in Singapore is already more expensive than in many other Asian countries, and several times pricier than in China, according to Simon Powell, head of Asian utilities research at UBS Group AG in Hong Kong. That’s forcing companies that rely on significant amounts of water, such as power plants and the brewery that produces the local Tiger beer, to review their consumption needs. Tuas Power Ltd., one of the largest power generators in Singapore, had been implementing steps to save water before the cost announcement was made, said Spokesman Michele Sit. The company will install additional meters to track unusually high consumption or wastage of water, she said. Heineken NV’s unit in Singapore, the maker of Tiger beer, had already committed to cut water usage by 20 percent even before the planned tariff increase, according to its head of corporate affairs, Mitchell Leow. About 95 percent of the beer is made out of water. The company is working on a water-reclamation project to process waste water for nonpotable uses like general cleaning and for its brewery cooling towers, Leow said. Water consumption has been reduced by 4 percent since 2010 through initiatives such as harvesting rainwater from rooftops, he said. From the government’s point of view, the pain of higher water prices is something businesses and consumers will have to bear as part of a broader goal of conserving the environment, said Euben Paracuelles, an economist at Nomura Holdings Inc. in Singapore. “The signal from the government is that they want to conserve an important resource, and that for them is a bigger consideration than others,” Paracuelles said. Bloomberg News

Don’t panic yet on US consumers’ latest first-quarter slump D on’t hit the panic button over another first-quarter slump in United States consumer spending. At least not yet. In each of the past three years, household purchases slowed in the January-to-March period, only to rebound and continue powering the world’s largest economy. While that pattern is projected to repeat in 2017, there may be less ounce to the bounce this time. Consumption grew at a 1.1-percent annualized rate, down from 3.5 percent in the fourth quarter, according to the median estimate of economists surveyed by Bloomberg this month. If confirmed in data due April 28, it would be the weakest gain in almost four years and the worst first quarter of the

expansion that began in 2009. Some of the slowdown can be chalked up to temporary factors, such as unseasonable weather, and delays in tax refunds for some filers. Yet, a leveling-off in automobile sales, along with the possibility sentiment may waver from elevated levels and cause shoppers to become even more cautious, loom as risks that any rebound will be less pronounced than prior years. On top of that, consumer prices are rising at the fastest pace in five years, eating into purchasing power amid tepid wage gains. “Whichever way you slice it, first-quarter consumer spending was weak,” said Jim O’Sullivan, chief US economist at High Frequency Economics in Valhalla,

New York. “I don’t think the trend is quite that weak,” he added, but with auto sales slowing and inflation rising, there will be “some moderation.” He expects the pace of growth in household purchases will settle into a 2 percent-to-2.5 percent range, compared with around 3 percent last year. Economists project a second-quarter acceleration to a 2.8-percent annualized rate, and a gain of 2.5-percent for the full year, according to the monthly Bloomberg survey conducted from April 7 to 12.

Weather impact

For the first quarter, weather was a familiar, but temporary culprit. Unseasonably warm temperatures

kept home-heating bills low and depressed spending on utilities in January and February to the weakest two-month stretch in more than 25 years, while a late winter storm in the Northeast crimped consumer purchases in March. Delayed tax refunds were another negative, though household spending may pick up as the cash makes its way to Americans’ pockets. The hit from a downshift in motor vehicle purchases could prove more than temporary, though. Bigger buyer incentives and falling prices may shore up demand, while a pullback in subprime auto lending will damp sales. Meanwhile, optimism is still riding high that President Donald J. Trump will deliver on his

pledges to cut taxes, renegotiate trade agreements and invest in infrastructure. That’s another reason why the consumer slowdown matters—the stark divide between household sentiment and actual perfor mance contrasts with business activity, which has begun catching up to elevated corporate confidence. The weakness in consumer spending, which accounts for about 70 percent of the economy, also means dismal first-quarter forecasts for GDP growth. The Bloomberg survey median calls for a 1.5 -percent annua lized gain. The Atlanta Fed’s GDPNow model estimates a 0.5-percent advance. Nonetheless, a recent repor t show ing bac k-to -bac k

declines in monthly retail sales wasn’t all bad news. So-called control-group sales, which are used to calculate GDP and exclude food services, auto dealers, building materials outlets and gasoline stations, rose at a 4.1-percent annualized rate for the first three months of 2017, up from 3.8 percent at the end of 2016. Besides, consumers have the benefit of a tightening job market, healthier finances and stilllow borrowing costs. As economists at BMO Capital Markets wrote in a note, given these still supportive demand fundamentals, “we don’t expect the workhorse of the expansion, consumers, are headed for the pasture given just yet”. Bloomberg News

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

The World BusinessMirror

Thursday, April 20, 2017

A9

UK May’s wager: Early election buys more time to hash out Brexit

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ine months after becoming prime minister, Theresa May is learning how to gamble. Long branded a risk-averse micromanager, May is betting that a crushing election victory will win her the freedom to negotiate the kind of Brexit she wants and avoid the European curse that has destroyed many former Conservative leaders. If all goes to her plan, the snap election in seven weeks will tighten her grip on power with a broader majority. Instead of being a prime minister who took office by default, she would have her own electoral mandate that will allow her to push a Brexit deal through parliament. Oliver Harvey and George Saravelos, strategists at Deutsche Bank AG, called May’s move a “gamechanger” that will dilute the influence of Tory hardliners. Gone is the danger of a 2020 election that “imposed a hard deadline on delivering Brexit on an unrealistic timeline” and also made “the prime minister reliant on a small Euro-skeptic majority”.

Sterling soars

Traders bought that analysis by sending the pound to a sixmonth high. As things stood, May risked reaching the end of the specified negotiating period in March 2019, a year before an election was due. That would have left her no wriggle room if she and her European Union counterparts wanted to extend discussions or make transitional arrangements, something financial services in particular want to see as they look to relocate. So she went for what she called a “one-off chance”. Since triggering Article 50 of the Lisbon Treaty on March 29, May had been mulling the arguments in favor of a early vote before coming to a final decision—during a walking holiday with her husband—that it would be too much of a headache to have an election looming as negotiations conclude. In an interview with The Sun, May put it like this: “If we’re negotiating at a point that is quite close to a general election, I think the Europeans might have seen that as a time of weakness when they could push us.” If May gains enough seats, she won’t have to be so concerned about those in her party who make the case that failure to find a deal—“the cliff edge’ scenario—is not so bad. Those tensions are palpable within the government, with Chancellor of the Exchequer Philip Hammond telling Bloomberg this month that there are Tories who “do not want a deal ”. The Eurasia Group now has reduced the odds on talks collapsing

to 20 percent from 30 percent. A victory would also give May a mandate that goes beyond Brussels. Last month she was forced to back down over a tax rise in the budget, with Tories rebelling because it went against a commitment her predecessor, David Cameron, had made in his 2015 election manifesto. May now has the chance to write her own election platform. She can get away with this because of the weakness of the opposition. A flash ICM poll after her announcement found 46 percent of people saying they’d vote Tory, close to twice the number backing Labour. And this is before the Conservative Party has even begun really to attack Labour’s leader, Jeremy Corbyn, whom voters already see as much less competent to be prime minister. “It’s smart politics: massive opinion poll lead plus small majority equals early election,” said Tim Bale, author of The Conservatives From Thatcher to Cameron. “I don’t think it’s going to get any better than this for the Conservatives, if you look at some of the difficult things that are coming down the line: Not just Brexit, but the economy. These were going to have political effect at some stage.” May’s office said on Tuesday that she doesn’t want to take part in televised debates, a feature of the past two elections. What voters will get instead is regular reminders from the Tories of Corbyn’s past, which includes meeting groups associated with Irish and Islamist terrorism. But there is a risk between now and June 8 that something goes wrong for May. If the threat isn’t from Labour, could it be from elsewhere? Maybe Scotland. May had argued that calls from the Scottish National Party (SNP) for another referendum on independence would be an unnecessary distraction when the country was focused on Brexit. That argument is now harder to sustain and another election in which the SNP did well would put her in a political bind. May is also asking voters to back her over Brexit, but 48 percent of the country voted to stay. The anti-Brexit Liberal Democrats, who came close to being wiped out in the 2015 election, sniff an opportunity. They will target seats around London that voted “Remain” in the EU referendum and are represented by “Leave”-backing Tories. “Surely, the one thing we should have learned over the last two years is that voters don’t always do what everyone so confidently expects,” said Philip Cowley, professor of politics at Queen Mary, University of London. “Looks like lots of people haven’t learned that, though.” Bloomberg News

IMF lowers Saudi growth forecast after oil-output cut

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he International Monetary Fund (IMF) lowered its growth forecast for Saudi Arabia next year, as oil-production cuts and austerity measures take a toll on the biggest Arab economy. The Saudi economy is expected to expand 1.3 percent in 2018, down from a 2.3-percent projection in January, the IMF said in its World Economic Outlook report on Tuesday. The Washington-based lender left this year’s forecast unchanged at 0.4 percent, citing “lower oil production and ongoing fiscal consolidation.” Saudi Arabia’s economy has slowed since 2014, when the kingdom’s refusal to cut output in the face of oversupply contributed to a collapse in oil prices that damaged public finances. Deputy Crown Prince Mohammed bin Salman’s plan to overhaul the economy and reduce its reliance on crude are also weighing on growth, as the government and private companies

look for savings, and consumers watch their wallets. The kingdom is bearing the brunt of output cuts that members of the Organization of the Petroleum Exporting Countries (Opec) pledged to make in the first six months of this year. Saudi Arabia pledged to cap its output by 486,000 barrels per day to 10.058 million barrels. Production fell last month to 9.9 million barrels a day, according to Opec data. Opec ministers are scheduled to gather in Vienna on May 25 to discuss whether to extend the output curbs. Saudi Finance Minister Mohammed Al-Jadaan told Bloomberg in January that he expected growth this year to be “north of 1 percent”, or significantly higher than the IMF’s projection. The median in a Bloomberg survey of economists is also slightly more optimistic than the IMF, predicting growth at 0.6 percent this year and 1.8 percent next. Bloomberg News

President Donald J. Trump displays a signed “Buy American, Hire American” executive order in Kenosha, Wisconsin, on April 18. The order authorizes studies and tweaks in the rules that could lead to restrictions on high-skilled foreign workers. Doug Mills/The New York Times

Trump’s ‘hire-American’ order may affect tech worker visas

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resident Donald J. Trump signed an executive order on Tuesday that directs federal agencies to review employment immigration laws to promote “Hire American” policies.

The order makes no immediate changes to work-visa programs but tells the departments of Labor, Justice, Homeland Security and State to study existing laws and procedures and recommend changes. In the case of one program, H-1B temporary visas, the order directs the agencies to suggest changes to help ensure that the visas are awarded to the most skilled, best-paid immigrant workers. “Right now, H-1B visas are awarded in a totally random lottery, and that’s wrong,” Trump said at the signing in Kenosha, Wisconsin. The order also calls for a crackdown on fraud and abuse in the current system of work visas—which the agencies had already signaled they would do. n What is the H-1B program,

and why is the president focused on it?

The H-1B program grants 65,000 work visas a year to foreigners, with 20,000 more visas granted to foreigners with advanced degrees and an unlimited number of extra visas available for universities, teaching hospitals and other nonprofit organizations. The program is aimed at highly skilled workers, and most of the visas are awarded to technology companies, although other specialty industries such as fashion also use the visas. (Melania Trump, the first lady, worked as a model on an H-1B visa.) Under federal law, employers that use a large number of H-1B workers are supposed to document that they tried to hire Americans for the jobs. All H-1B employers are also required to pay prevailing wages to the immigrant workers who receive the visas. Labor Department data show that about 40 percent of the visas go to entry-level workers and another 40 percent go to people with limited experience and skills. The Trump administration says that more of the jobs performed by those people could and should be filled by Americans.

n How are the visas allocated? Visa applications must be sponsored by employers. Every April 1, the government begins accepting applications for the next fiscal year, which starts on October 1. This year, the government received 199,000 H-1B applications in the first five days and then stopped accepting them. Because there are more applicants than visas, the visas are awarded by lottery. Each visa is good for three years and can be renewed for three more years. Immigrants who are applying for a permanent residency visa, known as a green card, can typically stay longer while waiting for approval. In 2015 P resident Ba rac k Obama expanded the program to allow the spouses of H-1B visa holders to also work in the United States, but in a recent court filing, the Trump administration said it was reviewing that policy. It is not clear exactly how many foreigners are in the US on H-1B visas, but analysts estimate 650,000 to 900,000. In recent years, about 70 percent of the visas have been issued to citizens of India. n Who employs these H-1B visa

holders?

The biggest employers are Indiabased outsourcing companies like Wipro Technologies, Infosys, Tech Mahindra and Tata Consultancy Services. These firms contract with banks, health-care companies and other businesses to handle various computing tasks and bring in thousands of immigrants to do the work. Outsourcing companies based in the US, particularly IBM and Cognizant, also use large numbers of H-1B workers. The leading American technology companies, including Google, Microsoft and Apple, employ thousands of H-1B workers. Two companies, Facebook and the chipmaker Qualcomm, are heavily dependent on H-1B visas, with at least 15 percent of their American work forces holding the visas, according to federal filings.

Thousands of Silicon Valley startups also hire some H-1B workers. n How do these foreign workers contribute to the American economy?

US technology companies argue that there is a shortage of qualified Americans for scientific and programming jobs, forcing them to turn overseas for workers to meet their hiring needs. In addition, immigrants or their children have played key roles in founding many technology companies, including giants like Apple, Google and Intel and up-and-comers like WhatsApp and Airbnb. The Indian outsourcers, which generally pay lower wages and operate in a different part of the technology ecosystem, say they are helping US companies cut spending on certain basic services so they can keep employing higher-paid workers in other parts of their businesses. R. Chandrashekhar, the president of the National Association of Software and Services Cos. a group that represents the Indian technology industry, says that more than three-quarters of the Fortune 500, America’s largest companies by sales, use the Indian outsourcers for some operations. “These services play a critical role in ensuring that corporate America remains a job-creation engine,” Chandrashekhar said. Still, Indian outsourcing companies are preparing for a world of fewer visas, shifting the work to people in India and other countries. n Are American workers hurt by

immigrant work-visa programs?

Some studies suggest that universities grant technology degrees to more than enough American students to fill all the open jobs in the US, so critics of the visas say the program is unnecessary. Silicon Valley companies often do not cast a wide net for American job candidates. Instead, they compete to hire the same graduates of the top colleges for many jobs and rely heavily on immigrants to fill out their workforces. Under the H-1B program, “all companies have to attest that they tried to find an American,” said Russ Harrison, director of government relations at IEEE-USA, the American branch of IEEE, the largest professional association for computer scientists and electrical engineers. “But all you have to do is check a box.” In some cases—at Walt Disney

and at the University of California, San Francisco, for instance—employers laid off workers and replaced them with cheaper immigrants employed by outsourcing companies. Foreign workers can also be abused by the visa programs. The H-1B visa is tied to a specific employer, which means the visa holder cannot easily change jobs. Rep. Zoe Lofgren, DemocratCalifornia, who has long pushed for changes, said some H-1B holders earned less than their stated salaries because they were forced to repay their employer for various expenses, such as travel. n What changes are under

consideration for visa programs?

The Trump administration was vague about what it would like to change. In a background briefing with reporters, officials said they were considering changing the wage levels that would qualify for visas, raising fees for H-1B applications and steering more visas to immigrants with advanced degrees. The government will also publicly release more data about other visa programs, such as the L-1, which allows workers officially employed overseas by a company to work in the US. “We don’t know how many L-1s are here, who employs them, where they are located and what they are paid,” said Ronil Hira, an associate professor of political science at Howard University who has extensively studied immigrant visa programs. Many in Congress support changing the H-1B lottery system to give preference to the highestpaying jobs. “We should allocate visas based on who wants to pay the highest salary to avoid undercutting the wages of American workers,” said Lofgren, who has sponsored one of several bills on the topic. Such a change would favor established American technology companies, which tend to pay high wages, and hurt the outsourcing companies, which hire immigrants to do more basic work at lower wages. But there is a risk of collateral damage to startups, which pay less in cash but award stock to new hires, and to hospitals, which recruit immigrants for nursing and other nontech jobs. Changes to work visas could also be wrapped into a broader immigration bill. Trump recently told members of Congress that he was open to discussing that approach. New York Times News Service

A10 Thursday, April 20, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

A severe threat

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ere’s alarming news that can kill the joy of eating chicken: Researchers at the University of the Philippines have discovered that poultry products sold in 15 wet markets and 15 supermarkets in Metro Manila were contaminated with drug-resistant Campylobacter bacteria, which can cause gastroenteritis or stomach flu. Acute gastroenteritis from Campylobacter infection causes 400 million to 500 million cases of diarrhea annually, the researchers said. Worse, they discovered that most of the bacteria in the contaminated samples were resistant to the common antibiotics used to fight them.

As the presence of drug-resistant Campylobacter in the samples tested is a serious public-health concern, the researchers recommended that “further monitoring of chicken products is suggested since the level and type of contamination represents a significant risk to consumers.” In other words, the absence of effective national surveillance and supervision of antibiotics use in poultry products masks the severity of the threat. A BusinessMirror story, “Catastrophic antibiotic threat from food”, published on April 16, 2017, in the paper’s Science section, said: “The greatly excessive use of antibiotics in food production in recent decades has made many bacteria more resistant to antibiotics.” This is quite alarming, given that the United States Department of Agriculture (USDA) has estimated that antibiotic use in animal husbandry, poultry farming and aquaculture in the US is over four times the government recommended levels. In the Philippines the improper and excessive use of antibiotics is mainly of concern when it affects the country’s reputation abroad or when export earnings are at stake. Hardly any attention is given to the threats posed to domestic consumers who consume antibiotic-resistant bacteria along with their favorite tinola. Making chicken safer to eat will require changing the way that it is raised. As recommended by the University of the Philippines researchers, further monitoring of chicken products is needed because the contamination represents a significant risk to consumers. There’s also a need to adopt strict food safety-management strategies in key production points to ensure that poultry products sold in public markets are safe. Sadly, the abuse of antibiotics is common in the global poultry industry. This is the reason an American fast-food restaurant chain that specializes in fried chicken has announced that it will serve chicken raised without antibiotics starting next year. KFC said it would stop serving chicken raised using antibiotics that are important in human medicine by the end of 2018. “The threat of resistance to human antibiotics is a rising public-health concern in the US. As such, offering chicken raised without medically important antibiotics is the next step in our food promise to our customers,” KFC said in a statement. KFC has the largest number of restaurants of any chicken chain, and the company said its decision will have an impact on the chicken industry beyond the meat it buys for its own restaurants. As the restaurant chain has strong presence in the country, the announcement is an important step forward for public health. We hope that government authorities will start monitoring the overuse of antibiotics among local poultry raisers. We fear to see the day when antibiotics, a lifesaving drug, will totally lose its effectiveness to treat sick people because of overuse and abuse.

Stock-market warning signs John Mangun

OUTSIDE THE BOX

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y definition, “Intrinsic value is the value of an asset based on the perception of its actual monetary value”. Like many other concepts we hold true with absolute faith, intrinsic value is a myth. But how can that be. “I bought the wood and paid a carpenter to build a dining table. That is its intrinsic value”. By that definition, if you received the wood for free and the carpenter did not charge you, then the table’s intrinsic value is zero. Notice this if you want to buy a piece of land and bring in an appraiser. The report does not say, “The Bible says land on a national road shall be worth three camels and 10 pieces of silver”. It reads, “Based on the recent sale of two adjoining properties, the market value is as follows”.

The monetary value of anything is determined by the amount of cash money that you can actually sell the asset for to another person. And this requires what we call in the stock market liquidity. The only reason to invest in the stock market is the ability to sell an asset for a price at any time, unlike real estate, where you have to wait for a buyer. In fact, the financial markets and, particularly, the equity market is the only investment where we measure and monitor buying and selling not only on daily basis but in real time.

BusinessMirror A broader look at today’s business

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time to file this financial report, there could be a problem. Usually, this request says something like, “The audit by the issuer’s external auditor is still ongoing as a result of new and revised International Standards on Auditing. It is upon advice of the external auditor that the audit might not be completed on time for the filing of the company’s annual report”. Accounting rules usually do not change that quickly without time to prepare. And if the rules did change, why isn’t every other company in the same business faced with the same delay? The postponement could be harmless or it could mean that the external auditors have found problems in the company books that they will not sign-off on. Be wary of late financial reports. It could mean things are not what they appear to be.

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Duterte needs Enrile’s expertise in the power industry

Since 2005

Founder

As such, when a listed company stock goes from active trading to relative little buying and selling, you have a big problem. Highest trading volume—liquidity—usually occurs at or near the price top or price bottom because that is where and when buyers (or sellers) expend all their energy, money, or shares. The worst thing to happen is to own a lot of shares at a loss and not having any buyers unless you sell at a substantially lower price. The second worst is to be at a profit and there are not any buyers at that price. Those situations are called “holding the empty bag” and you do not want to be the last one still at the party when everyone else has left. You have to pay the check. Watch volume. Stock market-listed companies are required by law to submit audited quarterly financial statements every three months, including an annual report. The company officers know this, as well as the internal and external auditors. So when a company asks the Securities and Exchange Commission for more

I

F he’s really serious, President Duterte can always ask his friend, former Sen. Juan Ponce Enrile, to help prosecute grafters and plunderers in the multitrillion-peso power industry.

Now 93 years old but still sharp and healthy, Enrile was the only one who voted against the passage in Congress of the controversial Electric Power Industry Reform Act (Epira) before President Gloria Macapagal-Arroyo signed the measure into law (Republic Act 9136) in 2001. Apart from boasting that the electricpower rates would immediately go down, she offered several other reasons to convince Congress to pass the Epira. Among them was that the passage of the law was necessary for the World Bank and the Asian Development Bank to release a loan of $950 million to the country and that the enactment of the Epira would mean cheaper electricity. What happened? Instead of going down, rates went up, triggering a public outcry. “I knew that the Epira would not benefit the people. I went against it because I realized that it would legalize and justify the imposition of unwarranted financial burden on the people under the socalled purchased power adjustment, or ‘universal levy’, as the Epira would later call it,” Enrile said. Indeed, he wrote Arroyo on March 7, 2001, to warn her about the harmful provisions of the Epira, calling her attention to the market control and monopoly

of Manila Electric Co. (Meralco) over a huge portion of the power industry, especially the exploitation of Meralco electric consumers. “I pointed out to her the injurious effect of giving Meralco and other distribution companies the same right given to the NPC [National Power Corp.] to charge electric consumers for stranded losses on bilateral contracts with independent power producers [IPPs],” Enrile recalled. “I especially warned her regarding the danger to the electric consumers posed by stockholders, like the Lopezes and their associates, who have interest both in the generation and distribution side of the power industry,” he said. His letter was received by the Office of President Arroyo at Malacañan Palace on March 8, 2001. He does not know whether Arroyo ever saw his letter. But one thing is sure: he never had the courtesy of a reply. True enough, shortly after the passage of Epira, Arroyo’s boast to lower the cost of electricity in the country did not happen. Instead, the electric bills of consumers skyrocketed, to the public’s dismay and shock. To placate the enraged public, she announced in a news conference and in a boastful display of make-believe concern for the people that she was “squeezing

blood out of stone” to reduce the power purchase agreement (PPA). She ordered the NPC to reduce its PPA from P1.25 to P0.40. This drove the NPC deeper into bankruptcy. This, as Enrile learned from a report of the American Chamber of Commerce, was a very expensive publicity stunt to be paid for with taxpayers’ money. “It turned out that the government had to borrow $500 million to cover the NPCPPA reduction that President Arroyo ordered,” Enrile said. “However, for reasons only she would know, she refused to touch Meralco’s PPA from its own independent power producers. To make matters worse, Meralco arrogantly refused to honor its 10-year 3,600 megawatts power-supply contract with the NPC. This was to allow Meralco to use the power output of its own independent power producers whose prices range from P5.74 to P6.26 to P7.39 per kilowatt-hour, compared with the NPC’s price of P3.62 per kWh,” Enrile pointed out.

Meralco’s mega-franchise

The House of Representatives and the Senate have approved, with unbelievable dispatch, the grant of a mega-franchise to Meralco. That mega-franchise covers an area of 9,337 square kilometers or 3,647.3 square miles, where a quarter of the country’s power consumers live in 22 cities and 89 municipalities. The original area of Meralco, before the Lopezes sold and transferred it to the Meralco Foundation in the 1970s, was 1,018 square miles, embracing seven cities and 40 municipalities. Enrile said: “The mega-franchise bill breezed through Congress despite Meralco’s dismal record as a public-service utility and glaring evidence of its abuses, excessive PPA charges, its sweetheart deals

with its own IPPs, and shenanigans in its Return on Rate Base [RORB].” “We all know, of course, that no less than the Supreme Court has ruled with finality that Meralco has been illegally passing on its own income taxes to its hapless customers. Yet even now, Meralco says it will go bankrupt if it refunds the billions of pesos it has exacted from the public,” Enrile said. That Meralco is in dire financial straits as it claims, while its affiliate IPPs, like First Gas, end up among the country’s most profitable corporation is a classic demonstration of the evils of cross-ownership, which the Epira promised but failed to curb. “Undoubtedly,” said the former lawmaker, “the PPA or universal levy, or whatever name they now call it, is antipeople. It makes the people pay for electricity they have not used. It makes the cost of electricity exorbitant. It makes the country uncompetitive in the world market. It deprives the poor and the jobless of an opportunity to find employment because the high cost of electric power will mean fewer investments and, therefore, fewer jobs. “It also means an unjust enrichment of persons who are already immensely rich, at the expense of the people. For the truth is the people themselves are the ones paying for the power plants and electric distribution facilities being used to provide electricity to them. And yet, they will never own these power plants and facilities. These will remain the property of powerful, influential and smart businessmen who managed to wangle legislative franchises from Congress and power-supply contracts from the NPC and Meralco.”

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

Opinion BusinessMirror

opinion@businessmirror.com.ph

Who’s going to be the next BSP governor?

Brighter days and sunny skies for PHL millennials Ariel Nepomuceno

DECISION TIME

Val A. Villanueva

Businesswise

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F Finance Secretary Carlos G. Dominguez III had his way, I would venture to guess that his choice for the next Bangko Sentral ng Pilipinas (BSP) governor would be either of the BSP chief’s two deputies, Nestor A. Espenilla Jr. and Diwa C. Guinigundo. Outgoing BSP Governor Amando M. Tetangco Jr. himself favors someone from the ranks to be his successor. I myself dread the possibility that the post would be given to an outsider as a political concession. Our banking system is too important to be left to the whims of stooges whose only qualification is their political affiliation. For Tetangco—who has been credited with developing a robust and credible banking system—the important thing is that whoever wears his mantle would be able to solidify, and establish as the norm, the gains that our nation has achieved during his watch. Espenilla and Guinigundo both have economic degrees that they put to good use throughout their BSP careers in managing the country’s macroeconomics. Both also sharpened their tools while toiling in the BSP’s economic-research department earlier in their careers. The two also distinguished themselves in academics. Guinigundo graduated cum laude in 1976 with a diploma in AB Economics from the University of the Philippines (UP), while Espenilla earned a BS Business Economics degree and an MBA from UP, and an MS in Policy Science from the Graduate Institute of Policy Science in Tokyo, Japan. Both have been involved in monetary-policy formulation. Before monetary-policy issues are elevated to the Monetary Board, the governor convenes a policy committee composed of himself, Espenilla, Guinigundo and the head of economic research. Espenilla’s post as bank supervisor is crucial. He gives valuable inputs about the state of the system through which the monetary impulses are transmitted to the real economy. (Although policy impulses are of equal importance to individuals, corporations and banks, the BSP deals only with banks.) While Guinigundo’s job is to present the issues to the board where Tetangco also sits as a board member, Espenilla is tasked with detailing the shape of the banking system. Let’s say that the banking system is a big house frequented by banks as its guests. Guinigundo makes sure that there is ample supply of water

and enough power flowing to keep the lights on. Espenilla, on the other hand, has to remain vigilant in keeping the plumbing, drainage and electrical systems in tip-top condition. If the party goes wild, Guinigundo will temper the water or electricity supply. But for as long as Espenilla maintains in good running condition the electrical switches, the drains and the toilet flushers, the party goes on without a hitch. Tetangco has been hailed worldwide for his extraordinary fiscal management. I have always believed, however, that the whole is greater than the sum of its parts—synergy if you will. His various international awards also stem from his ability to manage his two deputies. What I sense, though, is that Tetangco would be more comfortable with relinquishing the BSP pedals to Espenilla. Tetangco is smart enough to know that Espenilla has proficiently kept the BSP’s “plumbing, sewer and electrical systems” in excellent condition; and has also shown resolve in addressing various banking problems. Espenilla has always been a quiet workhorse. His efforts may not have received much media hype as those of Guinigundo’s, but when he delivers, he delivers big! He has sculptured the country’s macroeconomic policy by transporting his exclusive viewpoint as the BSP’s main bank regulator to the decisionmaking process of the high-level BSP Advisory Committee on Monetary Policy. For instance, he has perfected BSP policies by connecting his pathbreaking efforts in financial supervision to the promotion of an effective and efficient monetary policy at the backdrop of a rapidly developing financial system. As the chairman of the bank supervision policy committee—the main platform for dialogue with various banking industry associations—he has established a culture of participation and feedback to aid in the crafting and communication of sound and efficacious bank-regulation initiatives.

For comments and suggestions, e-mail me at mvala.v@gmail.com.

Shantytown Philippines Dr. Rene E. Ofreneo

LABOREM EXERCENS Continued from A1

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2011 survey by the NHA showed there were 1.5 million informal settler families in the country, 52 percent of whom were living in dangerous areas such as the esteros of Metro Manila or the spaces below some bridges. A 2015 study by the Housing and Urban Development Coordinating Council (HUDCC) reported that the number of informal settler families increased to 2.2 million.

These figures are underestimates, for the reality is that the poor build homes, in public and private spaces, wherever they can. In big cities, there are karton, or cardboard, communities behind or around gated and fenced subdivisions or commercial complexes. When Yolanda hit the Visayas in 2013, the majority of those who lost their homes were those who built their houses in the areas within 40 meters from the

shorelines, which were declared by the government as “no-build zones”. In the uplands or mountainous areas of the archipelago, the indigenous peoples have to compete for space with the economic refugees from the lowlands. Even in some cemeteries, there is competition for space between the living and the dead. Go visit the Manila South Cemetery, and see how many sari-sari stores are operating within the area. And, yes,

Thursday, April 20, 2017 A11

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he 2017 Deloitte Millennial survey, released by Navarro Ampar and Co, concluded that 89 percent of the Filipino millennials have a more upbeat and optimistic outlook about the economic growth of the Philippines in the year to come compared to other countries.

The global average is 45 percent, and 53 percent belongs to Southeast Asia. And it does not stop there—80 percent believe they will be financially better off and 76 percent happier than their very own parents. Still a very high mark compared to the rest of the world. Interestingly, the top 5 issues of concern to them are terrorism (40 percent), crime (35 percent), health (29 percent), environment and natural disasters (27 percent), and unemployment (24 percent). Contrast this data with that of European millennials, who are worried about economic instability, Brexit, terrorism and the resurgence of rightist ideology amongst its leaders. Ver y encouraging

and inspiring results, indeed. But what are millennials, in the first place? They are children born during the years 1980 to 2000 of baby boomers and the older Gen X parents. These were the years where birth rates surged, when the world was undergoing more economic progress and technological breakthroughs. Millennials are typically heavy users of and intimately knowledgeable in information-technology infrastructure, communications, digital gadgets and social-media apparatus. Those who are not IT savvy are not cool, do not belong and even ostracized. They are also commonly described, at least in the Philippines, as the selfie generation. Every activ-

ity in their daily lives—from school, organizations, church or office are documented, broadcasted and circulated to their “stakeholders” online or through other digital means. Template characteristics of this group are self-centeredness, expressiveness, love for fun/adventure, restlessness and tolerance for differences and diversity. They constantly seek for ways and means for life to be easier, convenient and instantly gratifying. With an increasingly borderless world accompanied by free flow of goods and services across jurisdictions, millennials have abundant choices and options so they never keep still with the status quo. They are interested in politics, social causes and advocacies, and will not hesitate to air their views. Neither are they afraid to experiment and change careers, work partners and even shift to all sorts of relationships in search for personal fulfillment. Too much stability unsettles them. Happiness cannot be suspended or sacrificed. But these characteristics are precisely the best targets for booming businesses nowadays. The millennial market is extremely attractive and has been the focus of product innovation and marketing strategy. Technology, travel, food, sports/

Easter faith and the Divine Mercy Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

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very year the Sunday following Easter has the same basic gospel account of the appearance of the risen Jesus to His disciples (John 20:19-31). Paradigmatic for us is the way followers of Jesus, to carry out their mission to the world, have to move on from “seeing” to “believing”. Since 2000, this Sunday is also called Divine Mercy Sunday.

The bringer of peace IT was the glorified Jesus who appeared to His disciples on the evening of that first day of the week when the tomb was found empty. The disciples were gathered behind locked doors, yet Jesus appeared in their midst all of a sudden. No longer restricted by space and time, He exhibited the marks of the nails in His hands and that in His side in ostensible continuity between the crucified Jesus and the risen one. He is the Living One “seated at the right hand of the Father” in glory and now present to and for all creation and His followers, in particular, whom He has not left orphans as He promised. His unstoppable “coming” now

some informal settler families (ISFs) simply settle along the concrete pavements of the urbanized towns. A few informal settler families have been living for years in their mobile homes called kariton. An old economic thesis states that poverty in the rural areas contributes to urban sprawl due to the endless migration of the rural poor. The fact, however, is that many of the urban poor today are second-, third- and even fourth-generation urban poor, and that the spread of the urban sprawl is happening side by side with the spread of rural sprawl. One outcome of this process is “peri urbanization”, the term given by some sociologists to the erosion of the urban-rural dichotomy or distinction in terms of landscape, demography and so on. In the developed countries, peri urbanization is mainly the result of the continuous outward urbaninfrastructure development, which shrinks the space between the urban and rural areas. In the Philippines, however, peri urbanization is largely the consequence of the struggle of large segments of the urban and rural poor to secure jobs and incomes alongside their struggle to build

in triumph from His Father means finally the peace and reconciliation with God humankind has been waiting for. The conventional Jewish greeting of Shalom (peace) has a markedly radical significance coming from the risen Jesus. He has definitively inaugurated the messianic era that would be characterized by peace and exultant joy (Isaiah 11). He now brings the peace He promised His own (John 14:27).

resurrection of Jesus has established for humanity needs to be made known to all people. Empowering them, He breathed on them and shared with them His Holy Spirit, fulfilling the prophecies of Ezekiel (36:27) and of Joel (3:1). By the paschal mystery of His death and resurrection, Jesus has accomplished the end-time projection of a world once deprived of God’s Spirit now energized anew by the Dunamis (power) of the Most High. The power is for the mission of the disciples to liberate humanity in Jesus’ name from sin and darkness into the freedom of God’s children. “Whose sins you forgive are forgiven them.” Serenely and solemnly, the old curse was declared ended and the new blessedness in God’s mercy, in peace and forgiveness, made available to all by His followers’ mandated continuation of His work of salvation.

The faith of the witnesses

“AS the Father has sent Me, so I send you.” His disciples must now proclaim to the world the good news of divine mercy victorious. The new future of love and compassion the

The mission demands the faith of the witnesses. A week later the second appearance of the risen Jesus focused on the man who was absent earlier and who set as his requirement “seeing” Jesus and His wounds, otherwise he said, “I will not believe”. Thomas is not here presented as a skeptic who believes only

homes wherever they can, usually found in the urban-rural peripheral areas and in idle or unoccupied lands. Thus, “slumization” is happening almost everywhere, in both the urban and rural areas of the three island groups of the country. Just take a look at the long rows of slum colonies in major highways, river systems, canals and mountain hillsides. How then can the government, both at the national and local levels, stop urban and rural slumization? By providing subsidized housing? By relocating the informal settler families? It is clear that there are no easy answers. The HUDCC housing solution in Calauan, Laguna, under the previous administrations shows the weakness of a simple housingsubsidy solution—breadwinners still work in Metro Manila because jobs are scarce in Calauan and are able to visit their awarded housing units once a week or even less. Thus, some units have become semiabandoned, if not fully abandoned, while Calauan itself is suffering from population congestion without any substantial economic development. The point is that the government, under various administrations,

has a bewildering array of housing projects for the poor since the 1970s. These include building “affordable” housing units, assistance to those wishing to build low-cost homes through low-cost financing, resettlement, site service development, rental control, etc. There is even an order for local government units to develop specific sites for informal settler families relocation within their territories. And yet, the slumization waves inundating the whole country never stop. As correctly pointed out by United Nation Habitat and numerous studies, slumization is directly traceable to the low incomes of the masses and their limited access to affordable housing. The majority cannot afford to build or rent decent housing and provide their families with balanced food, proper education, medical care and other amenities of modern life. The housing problem is a poverty issue. On the other hand, poverty is a consequence of the dire realities in the labor market: low-paying jobs for the many and limited number of decent quality jobs for the few. This, in turn, is rooted in the maldevel-

The mission

hobbies, fashion, entertainment, condominium living are niches that currently drive and excite commercial enterprises. Moreover, connectivity, passion for knowledge and training, high expectations and goals for themselves, positivity and constant hunger for change are now the competencies that employers are looking for, and, basically, millennials fit the tab. There are so many psychological, medical, management literature and even parenting tips on how to treat and handle millennials. It is a recognition that each individual is necessarily and logically a product of a particular epoch, historical, social stage or phase from one generation to another. But there are values that are timeless, like respect, generosity, gratitude, kindness and compassion. Amid all advancements in commerce, science and technology—“matters that matter” to the growing number of millennials, our obligation as a parent, friend, officemate or community member is to consistently remind them of one basic thing that is constant and which stands the test of time—character. And that, to my mind, is nonnegotiable nor debatable.

For comments and suggestions, arielnepo. businessmirror@gmail.com.

with proofs. It was the initiative of Jesus to show the disciples His hands and side; he offered the same signs to Thomas. They all needed and received the same “proofs”. They all had to pass from doubt and incomprehension to belief. The story of Thomas represents the needed transition between two generations of believers, from the “chosen witnesses” (Acts 10:41) who saw the risen Lord to the later faithful throughout the world who receive the faith that comes from the apostles. Alálaong bagá, the exhortation to us is “Do not be unbelieving, but believe”. It is not enough to see for anyone to believe. As the disciples themselves went beyond their experience to attain to Easter faith, we also believe even if we have not seen Jesus. Transcending all proofs and witnesses, we say with Thomas every Sunday, the Day of the Risen Lord, “My Lord and my God!” as we personally acknowledge Jesus present in the signs of bread and wine in the Eucharist, bringing us peace in the Holy Spirit and sending us on a mission of love and mercy to all people. Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on dwIZ 882, or by audio-streaming on www.dwiz882.com.

opment of the country under poor economic and political governance in the last so many decades. This is why pushing for a standalone housing-reform program for the poor is neither feasible nor sustainable in the medium and long terms. It should be part of a bold comprehensive socioeconomic, reform program aimed at transforming the economy in a progressive, inclusive and sustainable manner. Progressive means transforming the industrial and agricultural sectors so that they can modernize society and upgrade the economy’s capacity to create quality jobs for the many. Inclusive means making the transformation beneficial and participatory for all sectors. This would necessitate, for instance, the adoption of a national land-use policy that addresses the needs of all sectors, not just the real-estate business sector. And sustainable means the transformation program should meet the renewal and preservation challenges of Philippine environment. After the Kadamay interlude, is the Duterte administration ready to tackle this transformation challenge?

2nd Front Page BusinessMirror

A12 Thursday, April 20, 2017

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UBRA ASSURES PUBLIC CHICKEN INVENTORY ENOUGH TO MEET DEMAND

Chicken supply down by nearly half in March

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By Jasper Emmanuel Y. Arcalas

@jearcalas

he country’s chicken inventory in March declined by almost half, or by 47.25 percent, to 8,822.80 metric tons (MT) from 16,726.13 MT recorded a year ago, according to the latest data from the National Meat Inspection Service (NMIS).

United Broilers Raisers Association (Ubra) President Elias Jose Inciong attributed this to the decision of poultry growers to cut their output due to the supply glut in recent months. “The inventory in the fourth quarter was at an all time high. Some players may have incurred losses [because of the glut] so they became more conservative,” In-

ciong told the BusinessMirror. Last December data from the NMIS showed that the country’s chicken inventory reached 39,000 MT, which was enough to fill Metro Manila’s demand for two months. NMIS data showed that both the volume of chicken purchased abroad and loca l ly produced chicken declined year-on-year. Chicken purchased abroad,

16,726.13 MT

The total chicken inventory in March 2016 which accounted for 64.04 percent of the March inventory, reached 5,649.84 MT. The figure was 21.57 percent lower than the 7,203.95 MT imported a year ago. The inventory of locally produced declined by two-thirds, or by 66.68 percent, to 3,172.97 MT from 9,522.18 MT posted in March 2016. On a monthly basis, local chicken inventory as of March 27 was 33.2 percent lower than the 13,828.60 MT recorded in February. “But the almost 9,000-MT inventory would have been high in previous years. There might have been too much optimism

in the last three years, as there were a lot of new players,” Inciong said. Despite the decline in the March chicken inventory, Inciong said it was enough to meet the country’s requirement. “Right now there’s no supply problem as all market segments are being serviced by the industry comfortably. When supply is not that abundant the [industry’s] priority would be the institution with [supply] contracts, like fast food,” Inciong said. “I think there are no problems at the moment as I have yet to hear complaints from Jollibee, KFC and McDonald’s regarding the supply. These institutional companies have [supply] contracts and if the production problem is really serious then they would also be affected,” he said. Inciong noted that fast-food chains usually have three- to six-

month supply contracts ranging with poultry growers. Due to the decline in production, the farm-gate price of chicken rose to P90 per kilogram, from P80 per kg recorded in previous weeks. “The farm-gate price went up because it’s already summer and some players decided to reduce their output,” Inciong said. He said the current chicken-supply situation could persist throughout the year as industry players are expected to remain “conservative”. “To be candid because people are more conservative, chicken will not be as abundant as it was a year ago or even a quarter ago,” Inciong said. The Ubra chief assured consumers that the retail price of chicken both in the wet markets and groceries would not increase due to decline in inventory. “It will depend on the market, but as of the moment the retail

price would be around P135 to P145/kg. Prices would depend in wet markets,” Inciong said. The prevailing retail price of dressed chicken in Metro Manila as of April 19 was pegged at P140/ kg, according to figures from the Department of Agriculture. Whole chicken in groceries and supermarkets as of April 12 was at P144/kg, P5 higher than the P139/ kg recorded a year ago, according data from the Philippine Statistics Authority (PSA). Latest data from the PSA showed that the country’s total chicken inventory as of January 1 stood at 175.31 million. The figure was nearly 2 percent lower than the 178.79 million recorded a year ago. PSA data showed that broiler chicken accounted for the bulk, or around 35.56 percent, of the country’s chicken inventory as of January 1.

nonie reyes

NHCP ‘SAVES’ RIZAL MEMORIAL SPORTS COMPLEX FROM DEMOLITION

By Ma. Stella F. Arnaldo

ECONOMIC POWERHOUSE New buildings are constructed in the Quezon City Central Business District being developed by the National Housing Authority and Ayala Land. According to the International Monetary Fund (IMF), the Philippines will lead Southeast Asia in terms of growth in the next two years due to higher public spending and robust consumption. GDP will likely grow 6.8 percent this year and 6.9 percent in 2018, outpacing Vietnam, Indonesia, Thailand and Malaysia, the IMF said in a report it released on Tuesday. NONIE REYES

Travel agencies see Catanduanes as next major tourism destination T

he Philippine Travel Agencies Association (PTAA) is projecting the province of Catanduanes to become a major tourism destination in the country in the next two years. PTAA Vice President for Inbound Danilo Cerdeña said they will work closely with the local government units (LGUs) and the Department of Tourism (DOT) to drum up tourism in the province. “It is largely an untapped tourism destination. Travelers are hesitant to visit the province because it has the reputation of being the entry point of typhoons into the country. But during our familiarization tour, we have seen the vast potential of Catanduanes,” Cerdeña said. He added: “What we can do initially as an association is for our members to individually promote the province to their respective markets and come out with tour packages for Catanduanes and its ecotourism destinations.” Cerdeña said they will also

It is largely an untapped tourism destination. Travelers are hesitant to visit the province because it has the reputation of being the entry point of typhoons into the country.”—Cerdeña

invite the province’s LGUs and its tourism offices to PTA A’s events and activities, including the annual Travel Tour Expo. They will also provide slots for the province’s tourism stakeholders to the association’s various trainings and seminars. At the same time, Cerdeña said they will make representations with the DOT for Catanduanes to be highlighted in events that it will attend internationally. “There is slow development in terms of tourism infrastructure and the province itself has yet to come out with a long-term tourism plan. There is also lack of trainings for its

tourism frontline officers,” Cerdeña said. But he said the province has also made strides, especially after it started a campaign last year branding the province as the country’s Happy Island. “There is a bit of Batanes and Baler that can be found in the province. And its very friendly and accommodating people are its biggest asset,” Cerdeña quipped. He added that at this time, Catanduanes is an inexpensive destination, with travelers only needing P12,000 to enjoy a four days and three nights basic tour package in the province inclusive of promotional airfare and accommodation.

Government data showed that for the first half of 2016, only a combined 105,557 foreign and domestic tourists visited the province. “The PTAA intends to boost tour ist ar r iva ls in the province. There is now a demand among travelers for alternative destinations in the country,” Cerdeña said. The PTAA over the years has gone on familiarization tours across the Philippines in a bid to find and promote new destinations in the country. During its familiarization tour in Catanduanes, among the places the PTAA visited included the centuries old Saint John The Baptist Church, Philippine Atmospheric, Geophysical and Astronomical Service Administration Weather Radar Station, Balacay View Point, Binurong View Point, Danicop View Deck, Nahulugan Falls, Puraran Beach and Talisoy Beach. Formed in 1978, the PTAA is the government’s leading partner in promoting and developing tourism in the country.

@akosistellaBM Special to the BusinessMirror

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AVED by the bell. The National Historical Commission of the Philippines (NHCP) has saved the Rizal Memorial Sports Complex (RMSC) from possible demolition or improper renovation attempts, by declaring it a “national historical landmark” on March 27. In its Resolution 5, Series of 2017, NHCP board members underscored the lengthy period of contribution of the RMSC in the development of sports in the Philippines. The complex was completed in 1934, “in time for the country’s hosting of the 10th Far Eastern Games.” The board, likewise, underscored the role of RMSC in the country’s history, having been “used as a garrison by the Japanese troops but was liberated on February 16, 1945.” T he NHCP resolut ion, signed by its Board Chairman Rene R. Escalante, and members Abraham P. Sakili, Victorino Mapa Manalo, Yolanda E. Jacinto, Jeremy Barns and Ludovico Badoy, is the second declaration about the RMSC’s cultural and historical importance to the country. In 2016 the National Museum, which Barns heads, already declared the sports complex “an important cultural property”. The double declarations

come amid continuing concerns by the plan of the city of Manila and its partner, the Razon Group, to develop RMSC into a commercial center anchored on a mall. Contacted by the BusinessMirror, the Razon Group declined to issue a statement on the NHCP resolution. Heritage conservationist Ivan Henares told the BusinessMirror that the NHCP resolution doesn’t prevent the city of Manila and the Razon Group to “modernize” the sports complex, “but the buildings and open fields should be preserved”. In a related development, informed by Barns of the National Museum’s separate designation of RMSC as an important cultural property, William I. Ramirez, chairman of the Philippine Sports Commission, wrote the former a letter dated April 3, 2017, saying: “We appreciate with thanks the passing of the said declaration after due deliberation of the National Museum panel of experts. It is with great joy that we accept the recognition. Rest assured of our commitment to protect, preserve and conserve these historical structures considered as cultural heritage, which will serve as inspiration and pride of today’s Filipino youth and the future generation.” Under the original plan of Manila Mayor Joseph Estrada, the Philippine Sports Commission and its athletes would be See “NHCP,” A2