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Abroader broaderlook lookat attoday’s today’sbusiness business A n Friday, April 20, 2018 Vol. 13 No. 188

n

Fridayday, April 20, 2018 Vol. 12 No. 208

Morequick investments flow The browntofox into PHL sans ‘endo’ EO jumps over the lazy dog I 30

By Elijah Felice E. Rosales @alyasjah & Bernadette D. Nicolas @BNicolasBM

nvestors can now drop their waitand-see stance when it comes to their decision to expand operations in the Philippines after President Duterte officially dropped his plan to issue an executive order (EO) prohibiting contractualization, the country’s trade chief said on Thursday.

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LOPEZ: “Investors will surely be happy with the President’s announcement that he will no longer sign the EO against contractualization.”

In an interview with the Busithe maximum number nessMirror, Trade Secretary Ramon M. Lopez forecasted of legal experts the investments to come abundance President caninappoint to with a the President’s decision to not

constitutional commission Continued on A2 that will help lawmakers tackle the job of amending Continued on A2 the charter

Brace for tax impact on car The quick brown fox jumps over the lazy sales–Lopez

Visit https://businessmirror.com.ph/mission-phl/ for more info.

Beating the catch-up game Birthdays and competition.

What’s first?

Continued on A2

T

2 percent

RADE Secretar y R amon M. Lopez told car manufacturers and vehicle importers to stand their ground The drop in sales for the immediate of vehicles in the impact of higher ex- first quarter of the cise tax on automoyear, according to bile resulting to loss in sales as he assures the Association of everything will re- Vehicle Importers and vert to “normal” come Distributors Inc. fourth quarter.

Lopez’s statement comes as sales of vehicle importers went down by 2 percent to 22,758 units sold in the first quarter. During the same period last year, the sector recorded sales of 23,317 units. The Association of Vehicle Importers and Distributors Inc. (Avid) attributed the contraction to the Tax Reform for Acceleration and Inclusion (Tr ain), which was recently enacted into law by President Duterte.

Signed last December by Duterte, the law seeks to lower personal income-tax rates while, at the same time, slapping additional taxes on oil and petroleum products, on sugar-sweetened beverages Continued on A2

PESO exchange rates n US 52.0970

manny villar

Dr. Jesus Lim Arranza thE EntrEPrEnEUr

Make Sense

B

irthdays are special moments that should not only be remembered as the day we first saw light, but these are also days that we should look back to the day when we took our first breath of fresh air and ask upon ourselves, what have we done to give meaning to life.

Continued on A10

travel beacon A tourist does the jig at the iconic Basco Lighthouse on Batanes Island. Constructed on top of the Naidi Hills, it offers a picturesque view of the Baluarte Bay. The lighthouse was first lit in 2003 and is host to American period facilities. Naidi comes from the Ivatan words Na, which means past, and Idi, which means settlement. Batanes is found at the northernmost part of the Philippines and often visited by strong typhoons. Tourists prefer to travel there during the summer. Stephanie Tumampos

‘NFA MUST CONTINUE SELLING CHEAP GOVERNMENT RICE’ Continued on A2

By Jasper Emmanuel Y. Arcalas @jearcalas

Govt tags more projects for ADB funding

T

By Cai U. Ordinario

@cuo_bm

he Philippine government is now identifying additional projects that will be included in the extended Country Operations Business Plan (COBP) of the Asian Development Bank (ADB).

The National Economic and Development Authority (Neda) told the BusinessMirror that the existing country partnership strategy (CPS) to be extended to 2023, will be submitted for ADB Board approval by end-August.

See “ADB,” A2

thE A qUIcK brOwn fOx jUmPS OvEr thE lazy griculture Secretary Emmanuel F. Piñol is pushing for the retention of the marketing functions of the National Food Authority (NFA) even after the quantitative restriction (QR) on rice is scrapped to ensure stable prices.

“While there are diverse views on what the role of the NFA should be, I still maintain that the NFA could be

n japan 0.4859 n UK 74.0038 n HK 6.6366 n CHINA 8.3030 n singapore 39.7839 n australia 40.5419 n EU 64.4700 n

Continued on A2

Piñol: “The NFA will earn more if it will act as a consolidator and trading agency of Filipino farmers and fishermen.”

an effective marketing and trading arm of our Filipino farmers and fishermen enerio: “it would be good See “NFA,” A12 to have this percentage grow in SAUDI arabia 13.8926 Source: BSP (19exponentially April 2018 ) the next couple of years because they are a longstay market, and they spend more.

They’re a highyield market.”

Continued on A2

PESO ExchangE ratES n US 48.4730 n jaPan 0.4675 n UK 59.4231 n hK 6.2496 n chIna 7.2073 n SIngaPOrE 35.0999 n aUStralIa 36.6844 n EU 53.5966 n SaUDI arabIa 12.9237 Source:BSP(14 October2016)

BMReports BusinessMirror

A2 Friday, April 20, 2018

www.businessmirror.com.ph

More investments to flow into PHL sans ‘endo’ EO Continued from A1

issue an EO banning contractual employment. Duterte’s insistence to permanently outlaw contractualization is holding back investors from expanding their operations in the country. “ They will surely be happy with the President’s announcement he will no longer sign the EO against contractualization.

We do expect the President to make more stringent the implementation of the Labor Code and labor laws, which is what we are seeing right now,” Lopez said in Filipino and English.

He branded the decision as a “good move,” saying the President finally realized the limitations of the Executive branch to prohibit contractualization given that it is legal under the Labor Code. “I think we have been saying that it is so hard to come out with a new EO that cannot deviate from the law and yet satisfy the labor sector,” the trade chief added.

For Lopez, Duterte has already made good with his campaign promise to labor groups when the Department of Labor and Employment (DOLE) issued March of last year a department order (DO) prohibiting a number of fixed-term arrangements. DO 174 outlaws labor-only contracting; farming of work through “cabo”; contracting out of job or work through an in-house agency; contracting out of job or work through an in-house cooperative, which merely supplies workers to principal employers; contracting out of job or work by reason of a strike or lockout, whether actual

ADB. . .

Continued from A1

“As of date, the ADB pipeline is still as indicated in the Country Operations Business Plan for 2018 to 2020. The Country Programming Mission for 2018, which will update the pipeline for the 2019-2021 pipeline, will commence by mid-May,” Neda sources told the BusinessMirror.

ADB Philippines Office Country Specialist Joven Balbosa earlier told the BusinessMirror that the Manila-based multilateral development bank is supporting

or imminent; and contracting out of job or work being performed by union members and such that interferes with, restrains or coerces employees in the exercise of their rights to self-organization, as provided in Article 259 of the Labor Code, as amended.

“I think the more important thing is we have a very good labor law. Of the same level of importance are the implementation of these labor laws and the direction the President wants to traverse, which is to ensure that there will be no illegal contractualization, such as the ‘5-5-5’,” the trade chief said.

Lopez cited as an example the string of regularization orders from the DOLE, including the directive to make permanent almost 6,500 workers for fast-food chain Jollibee Foods Corp. The move, according to the labor department, is part of its persistent inspections of popular food chains in line with its crackdown against illegitimate work arrangements.

Ho w e v e r, L o p e z o p p o s e d Malacañang’s decision to relay the baton to Congress on the amendment of the Labor Code. He said: “Frankly, there is no need to change the country’s highest labor law, except for maybe an updating of some business models.”

Malacañang said on Thursday that Duterte will no longer issue an EO on endo or labor-only contracting. Presidential Spokesman Harry L. Roque Jr. also said the President has already complied with his campaign promise to end endo and 555, which refers to the practice of

hiring workers for a period of five months only to avoid giving them benefits and making them regular employees.

“The position of [Labor] Secretary [Silvestre H.] Bello [III] now is it is better to leave the matter now of endo to Congress. And I have also been informed by the Department of Trade and Industry that, actually, the President has already complied with his election promise—to do away with 555, endo,” Roque said.

According to the Article 281 of the Labor Code, probationary employment shall not exceed six months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period.

The same article also stated: “An employee who is allowed to work after a probationary period shall be considered a regular employee.”

In his previous statements, Roque also clarified that what the President promised is to end endo and 555 and not contractualization.

“The matter is now left to Congress, although let’s see if it will be certified as urgent,” he said.

Roque also noted that the contentious provision in the EO was Section 2, which, in one version, said that they must be recognized as regular employees of the hiring company. Another version indicated that they should be recognized as regular employees of the service contractor.

“You know, although we are looking forward to the EO, an EO can only do so much. As you know in our system of government, the executive through an executive

order can only implement the law.

So if there has to be revision in the law, especially on the definition of what endo is, it has to be Congress,” he said.

The chairman of the House Committee on Labor and Employment on said Congress is eyeing to submit to President Duterte for his signature a proposed law addressing the problems of endo in the country by July.

Rep. Randolph S. Ting of the Third District of Cagayan, the labor committee chairman, said the lower chamber is now awaiting for the Senate version of the endo bill as it already approved on third and final reading its House Bill 6908 in January. HB 6908 seeks to strengthen the security of tenure of employees in the private sector.

“We already approved our own version of the endo bill, and now we are waiting for the Senate, which committed to finish its version by first quarter of this third regular session of 17th Congress or by July. On the part of the House, we are ready to immediately conduct a bicameral conference committee meeting to reconcile the differences of our version and for us submit our final version to the President for his signature,” Ting said.

“The Senate may also decide to conduct its hearing and finish its version when session resumes on May 15,” he added.

Ting said the National Economic and Development Authority (Neda) has already expressed support for the passage HB 6908. “We also presented [last Wednesday] the lower

efforts to address this through the Regional Development Project for South Central Mindanao and the upcoming COBP. In December 2017 the NEDA identified the $100-million Regional Development Project, Phase 1-South Central Mindanao, formerly Mindanao Development Program, as part of the pipeline for ADB financing this year.

Balbosa said the new COBP will focus on regional development, consistent with the aim of the national government to pursue federalism. “[This is] anchored on the PDP [Philippine Development Plan]

National Spatial Strategy and the new CPS now under preparation which emphasized regional development as one of its key programs,” Balbosa said via SMS. He added in the briefing that the ADB is working together with local governments, particularly lagging regions, to help match them with leading regions which can help them increase investments in their locale.

The indicative resources available for commitment by ADB during 2018-2020 for sovereign operations amount to $2.56 billion.

The ADB said it will actively explore cofinancing and funding from

other sources, including regular OCR regional cooperation and integration set-aside. An indicative sovereign lending program of $3.68 billion is 43.8 percent higher than indicative resources.

During 2018-2020, the ADB also expects to deliver technical assistance (TA) worth $25.1 million, to be financed from internal and other financing sources.

The ADB’s ongoing program for 2017 consists of four loans totaling $1.08 billion, and TA of $7.5 million from internal sources, $7.5 million from Canada and $225,000 from the Urban Climate Change and Resilience Trust Fund.

Scuttled EO

chamber version of the endo bill to the Neda and it said they will support our version.”

‘Salvageable’ parts

ments of Roque and Bello.

“We have yet to receive the certification [about the security of tenure bill]. Until we do, that is the only time we will give up on pushing for the EO,” he said in a phone interview.

Maglunsod added he is optimistic Duterte may reconsider his decision on the EO once he meets with labor groups. “Malacañang told us that the meeting was only postponed so it could still push through.”

Associated Labor Unions-Trade Union Congress of the Philippines Spokesman Alan Tanjusay also shared Maglunsod’s assessment of the situation. Tanjusay said Roque’s position may not reflect the President’s position.

“This statement [came from] Secretary Bello, Atty. Roque and the DTI speaking, and not the President. This is not the President speaking himself. Bello and Roque are just preempting the President’s desire to sign the labor-drafted EO,” he said. “For the sake of millions of endo workers enslaved in poverty by contractualization work scheme, we urge President Duterte to please sign the labordrafted EO,” Tanjusay added.

Other labor groups like the Sentro ng mga Nagkakaisa at Progresibong Manggagawa, Federation of Free of Workers (FFW) assailed the decision.

“Clearly, with this declaration of passing the burden to Congress to end contractualization, the strong-willed President has succumbed to the pressure and will of business,” FFW Vice President Julius Cainglet said. With Jovee Marie

Labor groups have long been waiting for the President to fulfill his campaign promise to end the practice of contractualization in the country through the signing of an EO, which has been put off several times already.

In an interview with the BusinessMirror, former Labor Undersecretary and Dean of University of the Philippine-School of Labor and Industrial Relations Prof. Rene E. Ofreneo said that the President’s decision was “not surprising.”

“Of course, the government is balancing labor pressure. You have trade union pressure. You have the business community pressure,” Ofreneo said.

Bello, however, told the BusinessMirror there is still a possibility the DOLE could still salvage some salient provisions of the EO. Among the provisions that could be implemented is the empowerment of the National Tripartite Industrial Peace Council (NTIPC) to determine activities, which may be contracted out. The provision will allow labor and management representatives at the NTIPC to have a say on which positions cou ld be subjected to contractulization.

“We may still be able to implement this. This is not dependent on the EO,” Bello said.

For his part, DOLE Undersecretary Joel B. Maglunsod said he is still hopeful the EO could still be signed, despite the pronounce-

N. dela Cruz and Samuel P. Medenilla

Apart from the Regional Development Project for South Central Mindanao, the pipeline for 2018 includes financing projects, such as the Expanding Private Participation in Infrastructure Program Subprogram 2 (PBL) and the Inclusive Finance Development Program (PBL), formerly known as the Reducing Income Inequality, through Financial Inclusion worth $300 million each.

Big-ticket projects for this year also include the $110-million Davao Public Transport Modernization Project and the $100-million Metro Manila Transport Project, formerly Metro Manila BRT Edsa Project.

For 2018 there are also standby projects, namely, the $300-million Secondary Education Support Project and the $100-million Disaster Risk Financing Phase 1.

For 2019, the firm pipeline of projects include the Secondary Education Support Project; Lo-

cal Government Development Program; and Facilitating Youth School-toWork Transition, Subprogram 2, which will cost $300 million each.

Also included in this pipeline are the $200-million Metro Manila Water Supply Project, Phase 1 and $200 -mil lion Ma lolosClark Railway Project as well as the $100-million Disaster Risk Financing Phase 1.

For 2020, the firm pipeline includes Improving Growth Corridors in Mindanao Road Sector Project, Phase 2; Inclusive Finance Development Program, Subprogram 2; and Expanded Social Assistance Project, which will cost $300 million each.

The standby pipeline for 2020 includes the $300-million Metro Manila Transport Project; $200-million Regional Development Project, Phase 2-Northern Mindanao; and $100 million Disaster Risk Financing Phase 2.

Brace for tax impact on car sales–Lopez Continued from a1

and on automobiles, among others.

Under the TRAIN, automobile excise tax is placed at 4 percent for vehicles up to P600,000; 10 percent for those with a tag price of over P600,000 to P1 million; 20 percent for a vehicle priced over P1 million to P4 million; and, 50 percent for hybrid vehicles.

Lopez said the drop in sales is expected since both vehicle manufacturers and car buyers are adjusting to the value of peso under the TRAIN. “That is an expected impact because of the higher taxes so we really anticipated that to impact on the automobile sector,” the DTI chief told the BusinessMirror.

“Nevertheless, we see that kind of impact to be temporary. As the economy continues to grow, that is the more important thing. They will continue improving on their sales, and people will get used to that kind of pricing. It is just a matter of time,” Lopez added.

According to Avid, sales in passenger cars went on a slight slowdown by 0.63 percent to 9,189 units compared to the 9,247 units sold reported the previous year. Hyundai Asia Resources Inc. weathered the storm by posting a 4-percent increase in sales of passenger cars, accounting for 68 percent of total sales.

On the other hand, sales of light commercial vehicles dropped by 4 percent to 13,569 units sold in the first quarter against 14,070 units sold year-on-year. Ford Group Philippines Inc. recorded the highest sales for this segment with 6,273 units sold.

For Lopez, car manufacturers and vehicle importers will be able to rebound by fourth quarter onward, when “Filipinos are already attuned to the new tax law.”

“Maybe by fourth quarter toward the Christmas, they will be able to regain their sales and that will continue in the next years,” he said. Elijah Felice E. Rosales

www.businessmirror.com.ph

The Nation BusinessMirror

Editor: Vittorio V. Vitug • Friday, April 20, 2018 A3

DFA eyes diplomatic protest after Chinese transport plane landing at Panganiban Reef

T

he Department of Foreign Affairs (DFA) is mulling over the filing of a diplomatic protest over the reported landing of two Chinese military transport planes on Panganiban Reef.

The Panganiban Reef, internationally known as Mischief Reef is located within the 370-kilometer exclusive economic zone (EEZ) in the South China Sea (SCS).

Presidential Spokesman Harry L. Roque Jr. said, “They [DFA officials] are exploring the idea, the possibility of a diplomatic protest. Obviously if we consider a diplomatic protest, then you consider the other state to be in breach of an international obligation…somehow.”

The consultative committee (Concom) tasked to review the 1987 Constitution also announced in a briefing on Thursday that the committee has agreed in principle to adopt proposed revisions to Article I National Territory to strengthen the country’s claims in the disputed areas and to consolidate and strengthen the sovereign rights over EEZ and extended continental shelf.

But the Con-com said the draft provisions, which are still subject to an en banc voting, will still be further discussed with the DFA. Proposed revisions include the change in the article title from National Territory to Sovereignty Over Territory and Sovereign Rights, intended to cover two aspects, which are sovereignty over territory and sovereign rights over maritime expanse.

According to Con-com member Fr. R anhilio Aquino, who is also the proponent of the revised provisions, these revisions “give constitutional sta-

tus to our arbitral judgment.”

Although Aquino gave credit to the framers of the 1987 Constitution, he enumerated some weaknesses of a one-paragraph provision under Article I of National Territory of the 1987 Constitution, as he cited “wrong use of the words internal waters,” and leaving out the words “historic rights and legal title.”

“That was in the 1973 [Constitution]. I really don’t understand why it was left out of the 1987 Constitution. We have returned that up,” he said.

“And similarly there’s was no provision on sovereign rights in the 1987 Constitution. There is that provision now,” Aquino added.

Asked to elaborate on the implication of putting the two sections under the article in the proposed constitution, Aquino said: “We’re obligating the government to assert our sovereignty rights, leaving of course the details…to the government because those are things that you cannot put in the Constitution.”

The proposed wording for Section 1 states, “The Philippines has sovereignty over its territory, consisting of the islands and waters encompassed by its archipelagic baselines, its territorial sea and its airspace.

It has sovereignty over islands and features outside its archipelagic baselines pursuant to the laws of the Federal Republic, the law of nations, and the judgments of competent international courts or tribunals.

It, likewise, has sovereignty over all the other territories belonging to the Philippines by historic right or legal title.”

Section 2, on the other hand, states, “The Philippines has sovereign rights over that maritime expanse beyond its territorial sea to the extent reserved to it by international law, as well as over its extended continental shelf, including the Philippine [Benham] Rise. Its citizens shall enjoy the right to all resources to which they are entitled by historic right.”

Aquino added that they have assured themselves that these provisions do not necessarily contradict the conduct of foreign policy at the moment.

“It is however obvious that the moment this provision finally finds its way into the Constitution, the President and the government will be guided with the provisions in the constitution,” he said. Bernadette D. Nicolas

They [DFA officials] are exploring the idea, the possibility of a diplomatic protest. Obviously if we consider a diplomatic protest, then you consider the other state to be in breach of an international obligation… somehow.”—Roque

Cusi files request to tap Malampaya fund for exploration vessel acquisition

A

FAN WAY

A lady pedestrian takes a brief pause from a walk to browse over colorful hand fans being sold at P40 each at a sidewalk stall along Marcos Highway in Marikina. NONOY LACZA

request to tap Malampaya fund to purchase an exploration vessel has been submitted by the Department of Energy (DOE).

“I proposed that we acquire a scientific exploration vessel using the Malamapaya fund so we won’t be dependent on others. I want the DOE to have one. I submitted already my request,” Energy Secretary Alfonso G. Cusi said.

The agency’s request was submitted to Malacañang, he said. If necessary, Cusi added, his office would also ask Congress to grant his request. “Whatever is required, we will also do it.”

The Malampaya fund could only be utilized for energy-development projects, unless there is a law that says otherwise.

The government’s share from the energy-resource development fund, commonly known as the Malampaya fund, reached P16.25 billion in 2017, 21 percent higher than previous year’s collection.

The DOE, which collects Malampaya royalties, recorded a collection of P16,250,694,944.30 in 2017. This brings the total royalties to P251,893,422,351.68 since 2002. The highest collection amounting to P37,458,390,948.09 was recorded in 2009, records show.

The DOE’s collection is turned over to the Bureau of Treasury.

During a Senate hearing in March, DOE Assistant Secretary Gerardo Erquiza said the proposed seismic vessel will be used for oil and gas exploration. Lenie Lectura

SC ruling on quo warranto petition against CJ out in May

A

CTING Chief Justice Antonio T. Carpio on Thursday disclosed that the Supreme Court (SC) has agreed to rule next month on the quo warranto petition filed by the Office of the Solicitor General (OSG) to declare as null and void the appointment of Chief Justice Maria Lourdes A. Sereno as the country’s top magistrate.

“By next month, we should be able to decide it,” Carpio told reporters at the launch of the new app called Justice PH held at the Quezon City Hall of Justice.

The month of May is usually being set asidebytheSCfordecisionwritingofthejustices,but theCourthassetaspecialenbanc session next month to decide on the quo warranto petition.

The SC’s resolution on the quo warranto case filed by Solicitor General Jose C. Calida last month is expected to be resolved ahead of the impeachment of Sereno in the House of Representatives, which would then become moot and academic if the Court decides to remove her as Chief Justice.

Calida filed the petition seeking to nullify Sereno’s appointment, citing her alleged failure to fully disclose her wealth before applying for the top SC post in 2012 following the ouster of former Chief Justice Renato C. Corona due to unexplained wealth.

Calida said Sereno failed to comply with the requirement set by the Judicial and Bar Council which is the submission of Statement of Assets, Liabilities and Net worth.

Last week the 15-man High Tribunal conducted an oral argument on the petition and ordered both the Sereno camp and Calida to submit their respective memorandum on or before April 20.

Meanwhile, Sereno’s Spokesman,

lawyer Josa Deinla questioned the SC’s move to immediately resolve the quo warranto petition without even looking at the arguments of the intervenors.

“We cannot held but ask why the rush? The SC is supposed to be on break after its last en banc session on April 24 in Baguio. They are on recess in May and are supposed to resume session on June 5,” Deinla said. “The quo warranto petition is a very important case which if granted will upend our justice system as we know it. The SC has not even heard the side of any intervenors,” she added.

Meanwhile, detained Sen. Leila M. de Lima and Sen. Antonio F. Trillanes IV reiterated their plea for the SC to junk the quo warranto petition against Sereno due to lack of jurisdiction.

The two senators earlier filed a joint intervention petition before the SC which was merely “noted” by the Court without action.

In their intervention, the two staunch critics of the Duterte administration argued that Sereno may only be removed through the impeachment process in Congress and only once she is found guilty by the Senate sitting as impeachment court.

They, likewise, cited the “hostile environment” in the SC and “lack of impartiality” of some SC justices that have allegedly “clouded” the case.

“With all due respect to the Honorable Court, the proceedings on April 10 cannot honestly be considered as wholly impartial, as to satisfy the due process requirement that those who shall here, try, and decide cases ought to possess the cold neutrality of impartial judges,” the senators argued, referring to the oral arguments on the case where Sereno had a heated confrontation with the justices. Joel R. San Juan

Inting assumes Comelec post

By Samuel Medenilla @sam_medenilla

L

ess than a month before the barangay and Sanggunisang Kabataan elections (BSKE), the Commission on Election (Comelec) on Thursday welcomed its new commissioner.

In a news statement, Comelec Spokesman James Jimenez lauded the appointment of retired Court of Appeals (CA) Associate Justice Socorro Inting as its fifth commissioner.

Inting will be joining Acting Comelec Chairman Al Parreño, Commissioners Sheriff Abas, Luie Guia, and Rowena Guanzon in the poll body’s en banc.

Inting replaces Commissioner Arthur D. Lim, who retired earlier this year.

“Justice Inting’s long experience in the Judiciary will be an invaluable asset to the commission, as it buckles down to the work of both ensuring the success of the 2018 barangay and Sangguniang Kabataan elections and preparing for the rapidly approaching 2019 national and local elections,” Jimenez said.

With the addition of Inting in the Comelec en banc, it now only has two remaining open slots.

Inting’s appointment comes a day before the end of the filing of the certificate of candidacy (COC) for BSKE would-be candidates on April 20, 2018.

It is considered as one of the most crucial phase of the preparation of the BSKE since it would start by next week the assessment of valid candidates for the polls.

As of yesterday, over 643,363 have filed their COCs for the BSKE.

Economy

A4 Friday, April 20, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

www.businessmirror.com.ph

Growth seen at 7% to 8% as PHL NREB’s Layug resigns post economy enters ‘goldilocks period’ E

By Lenie Lectura

D

By Cai U. Ordinario

@cuo_bm

espite the threat of rising inflation, there is no stopping the engines of the Philippine economy from growing by 7 percent to 8 percent in the medium term, according to the National Economic and Development Authority (Neda).

In a presentation in Cebu on Thursday, Socioeconomic Planning Secretary Ernesto M. Pernia said the economy is indeed in a “golden age of growth,” a “goldilocks period” that will allow it to provide more jobs and lift millions out of poverty.

Pernia added the economy has entered a goldilocks period, which means the economy was not too hot nor too cold. It means the economy’s growth was “just right.”

“Observers have remarked that the Philippine economy has entered the golden age, also known as the goldilocks years. It’s easy to agree because our economy has, indeed, been performing its best over the past nearly five decades. And we may not even have seen yet its very best ever, given the favorable circumstances the economy finds itself in,” Pernia said.

If the Philippines continues on this high economic growth path, Pernia added the country will hits its target of expanding the economy by 50 percent and per-capita income by 40 percent by 2022.

Pernia is also of the view that the Philippines is poised to breakthrough the upper middle income bracket by the end of the year or 2019, at the latest.

The country’s gross national income (GNI) per-capita income is at $3,550 in 2015. The government aims to reach a per-capita income level of $5,000 by 2022.

As of 2016 the World Bank said low-income economies are defined as those with a GNI per capita, cal-

culated using the World Bank Atlas method, of $1,025 or less in 2015.

Upper middle-income economies are those with a GNI per capita between $4,036 and $12,475, while high-income economies are those with a GNI per capita of $12,476 or more.

“With such level of growth, the economy would expand 50 percent by 2022 from its base in 2016. Likewise, per-capita income is projected to increase by 40 percent from $3,550 in 2015 to at least $5,000 in 2022, thereby elevating the country to be even better than upper middleincome economy,” Pernia said.

These targets will become achievable by pursuing a 14-point Key Policy Reform Agenda to sustain and/ or accelerate economic growth.

Pernia added this includes the removal of red tape; easing restrictions on foreign investments; reforming

the country’s tax system; ensuring timely execution of the budget; and seeking new export markets.

He said the agenda also includes lifting of the country’s quantitative restrictions on rice; diversifying high-value crops; investing in disaster resiliency; ensuring timely restoration in affected areas in Mindanao; and focusing on policy/reform agenda to avoid political distractions.

Other policy reforms are sustaining programs that target vulnerable population; strengthening science and technology investments; implementing a national ID system; and accelerating infrastructure development.

The last policy reform on infrastructure development embodies the spending of P7.74 trillion to implement 4,490 infrastructure programs/activities/projects under the Public Investment Program (PIP).

“Infrastructure development will be key in addressing the persistent and egregious inequality across our regions. Thus, we have ensured that regions outside the mega-urban centers are getting a fair share in the total number of infrastructure programs and projects over the medium-term,” Pernia said.

Out of the total 4,490 infrastructure programs and projects in the 2017-2022 PIP, some 161 projects have nationwide in scope while 4,231 projects are region- specific, of which only 320 projects will be in Metro Manila, he added.

The Autonomous Region in

Observers have remarked that the Philippine economy has entered the golden age, also known as the goldilocks years. It’s easy to agree because our economy has, indeed, been performing its best over the past nearly five decades. And we may not even have seen yet its very best ever, given the favorable circumstances the economy finds itself in.”—Pernia

Muslim Mindanao will get the highest number of region-specific projects at 1,340. Further, over P49.5 billion will be invested for region-specific infrastructure projects in Region 7.

Pernia said that the government has also identified 75 key, large-scale, and game-changing infrastructure projects, which will be pursued by the Duterte administration to enhance connectivity and promote growth centers across the country.

Around 45 of these projects are in Luzon, 10 in the Visayas, and 17 in Mindanao. Furthermore, two flagship projects, namely the Luzon-Samar Link Bridge and the Leyte-Surigao Link Bridge, will enhance interisland connectivity in the country. Meanwhile, one project has nationwide in scope, namely, the Nationwide Fish Port Project.

The country’s recent economic success was observed in the country’s total factor productivity (TFP), which has steadily grown to 3.1 percent, maintaining its position as the highest among the Asean-6 countries.

In 2017 the Neda chief said the country’s TFP was at 2.3 percent, which has been the fastest in the Asean region.

The growth in TFP was an offshoot of the recent gains in manufacturing growth. Pernia added in the past five years alone, the manufacturing sector’s growth averaged 8 percent.

This, he said, allowed the economy to increase economic growth, which averaged 6.7 percent last year and 6.9 percent in 2016. Between 2010 and 2016, the economy posted an average growth of 6.3 percent, the highest average growth since 1980.

“The economy is also undergoing structural transformation as growth is now increasingly being driven by investments vis-à-vis consumption on the demand side, and by the industry sector—manufacturing, in particular—relative to the service sector on the supply side. In other words, the sources of economic growth have broadened and diversified,” Pernia added.

@llectura

nergy Secretary Alfonso G. Cusi has announced the resignation of National Renewable Energy Board (NREB) Chairman Jose M. Layug Jr. NREB is the advisory body tasked by the law to recommend policies, rules and standards to govern the implementation of the law, which granted fiscal and nonfiscal incentives to renewable-energy projects.

“When he came in, he said he would stay for only a year. In fairness, I invited him to join the DOE [Department of Energy] if he was interested,” Cusi said.

Sought for comment, Layug said: “I resigned because of health reasons. I also informed the Secretary that I have resigned because I have already completed all my tasks as NREB chairman. I originally committed only 1 year but I have stayed in this position for at least 18 months already.”

Layug, according to Cusi, cited health reason for his resignation that takes effect on May 2.

He joined NREB in January 2017.

“I haven’t talked to him,” Cusi said when asked if Layug was interested to join the DOE. Layug did not reply when sought for comment.

Cusi said there are recommendations as to the next NREB chief, but he kept mum, saying any appointments would have to be announced

by Malacañang.

Layug’s resignation, Cusi added, “will not delay any work because NREB is just an advisory body and not a line agency.”

Layug is also a member of t he t ra nsit ion comm it tee of the Philippine Electricity Market Cor p., the market operator arm of the W holesale Electricity Spot Market.

Prior to his government service term at NREB, Layug was formerly a DOE undersecretary.

‘Salangian’ topbills Capampangan artworks at the Clark Museum

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LARK FREEPORT—The biggest gathering of Capampangan artists in an exhibit dubbed as Salangian, which will feature various pieces of arts, will be staged at the Clark Museum here starting on April 27.

Noemi Julian, manager of Tourism and Promotions Division of Clark Development Corp. said about 80 Capampangan artists will join the event and more than 100 of their artworks will be exhibited at the Gallery 2 of Clark Museum.

Salangian, which means to light or to ignite, will have a gala on April 26, and will be open to the public the following day, Julian added.

Andy Alviz, one of the featured artists and lead organizer, said the activity will serve as a platform to celebrate the creativity and artistry of Capampangan painters, sculptors and other artists. He also cited the suitability of Clark as the location for the event.

“It’s high time we celebrate the artistry and creativity of the artists.

Clark is booming and there will be a lot of demands for art pieces for hotels, condos, offices and restaurants.

Now is the time for artists to come to Clark, “ Alviz added.

Alviz also said that the “openness

and support to the Capampangan art and culture” are factors that make Clark their ideal spot for the exhibit as he also cited the support of managers of this free port.

“Clark was chosen for the exhibit because of its openness and support to the Capampangan art and culture.

Bases Conversion Development Authority President and CEO Vivencio B. Dizon and Clark Development Corp.

President and CEO Noel F. Manankil are both excited and gave an all out support for the biggest gathering of Capampangan artists,” he added.

Last year various Capampangan artworks and craftsmanship were featured during the 31st Association of Southeast Asian Nations Summit. They were showcased at the Asean Villas, Clark International Airport Corp. VIP lounge and Asean Convention Center.

They include the Pidayit by Philip Torres. Pidayit comes from pidayitdayit, a Capampangan word that means putting together clothing materials to form a new one and combining with creative traditions and techniques of embroidery, beadwork and crochet with diverse style and intricate expressions, all made by hand.

Grab appeals LTFRB order on addl ₧2/minute fare charge

By Lorenz S. Marasigan @lorenzmarasigan

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OURS after the Land Transportation Franchising and Regulatory Board (LTFRB) ordered it to stop charging passengers an additional P2 per minute on rides, Grab Philippines said it will file an appeal before the regulator, asking it to rescind its directive as this could “affect the income of drivers.”

The regulator ordered the transportation network company (TNC) to immediately suspend the P2-perminute charge per ride, citing a order released last December, outlining the fare structures of ride-hailing apps.

But according to Grab Philippines Country Head Brian Cu, his group finds the charge “legal,” citing a 2015 order that authorizes TNCs to set their own fare, pending approval by the regulator.

“This order sounds populist, but

is actually anti-people because it will hurt the drivers and the passengers more,” Cu said. “The P2 fare component is not a Grab income, since 80 percent goes to the driver, and the 20 percent left is used for additional driver incentives and passenger promos,” If the P2-per-minute fare component is stopped, Cu added, drivers will not earn enough and will be left with no option but to leave their job as a transportation network vehicle service (TNVS) driver, resulting in even fewer vehicles for the riders.

Cu added that, should this happen, it will take longer for riders to get a ride, and if there are not enough cars, surge may go up.

Other passengers booking from far locations may be left unallocated.

“We hope the public realizes that this P2 fare component was implemented for their own benefit and

not Grab’s,” Cu said. “This unilateral fare-setting prerogative was taken away in 2017 in a new department order, but fares set before that will remain, and only future adjustments are covered.”

Transportation Undersecretary Thomas M. Orbos said the government will thoroughly study the case, noting that it will also review the orders cited by both parties.

“Definitely, we will not let this pass. Grab will have to be accountable for this,” he said in a transcript sent by the transportation department.

The P2 was implemented only in July 2017 to protect drivers’ income from traffic congestion and far pickup locations.

“If our drivers lose income because of traffic in Metro Manila, they might stop working as a TNVS driver, and that would mean fewer vehicles to serve the public.” Cu said.

Summer refreshment A mother and child take their refreshment pick at a food stall, amid Thursday’s sweltering summer heat in

Pasig City. ALYSA SALEN

TRAIN-induced gas-price increase fails to dampen motorists’ wanderlust

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he abrupt leap in local fuel prices that directly followed the levying of steep excise taxes on petroleum products in January appears not to have motivated Filipino motorists to cut back on the use of their cars.

Filipinos seem to have absorbed

the substantial oil price hike with little if any change in their travel habits, at least if the sales volumes of PTT Philippines are any indication.

PTT’s Marketing Director Thitiroj Rergsumran said that the implementation of the TRAIN law last New Year’s Day has not resulted

in any perceivable drop in the company’s sales and in fact, the Thaibased oil firm’s local business is poised for expansion.

“No, the new excise tax has not affected our sales volumes, It’s still the same,” Rergsumran told journalists yesterday. He also emphasized that

the imposition of the tax on every liter of unleaded gasoline and diesel sold since January 1, has resulted in a “purely pass-on charge” which does not in any way benefit the company’s profit margins. The government is the only beneficiary of this pass-on charge, he added.

Rergsumran revealed that the number of PTT gas stations in the country will rise to 150 by year-end from the current 120 stations. He said their adjusted goal is to build an additional 30 stations every year from only 15 annually in previous years.

This expansion mode, he added, is being spurred forward by the encouraging investment climate in the Philippines and the accompanying business opportunities.

PTT’s mid-term vision is to have 300 gas stations by the year 2022, he said. PNA

The World BusinessMirror

www.businessmirror.com.ph

Friday, April 20, 2018

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US, China seek allies as they dig in for long economic tussle

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he United States and China look to be preparing for a protracted confrontation over trade and investment as they each try to line up allies for their cause.

The struggle for support is being waged worldw ide, w ith its locus shifting this week to Washington and the semiannual meetings of the International Monetary Fund (IMF). Behind the battle: an effort by each country to gain an edge in their standoff over everything from steel to semiconductors.

Muc h of t he jo c k e y i ng i s likely to play out at Thursday’s meeting of finance ministers and central bankers from the Group of 20 (G20) and on Saturday’s broader gathering of IMF member-nations. “ There’s a competition” between the world ’s two largest economies to garner backing for their respective positions, said David Dollar, who was the US Treasury’s economic emissary to

China from 2009 to 2013 and is now a senior fellow at the Brookings Institution in Washington.

T he concerted attempts at coalition-building suggest that neither nation believes that a quick resolution of their various disputes is a given. Such a festering could act as a damper on global stock markets and the world economy by making investors and businesses more cautious about the outlook.

‘Deeply concerned’

“I’m deeply concer ned ” about the relationship, said National Committee on US - China Relat ions President Stephen Orlins, who worked on t he norma lization of ties bet ween the t wo countr ies whi le at t he US State Depar tment f rom 1976

to 1979. “O ver the next 12, 18, 24 mont hs it may be deeply, deeply d isr upted.”

Citing national security concerns, the Trump administration has slapped tariffs on steel and aluminum exports from China and a number of other countries, with Beijing responding with import taxes of its own on US goods.

Washington also has threatened to lev y additional tariffs on a broad range of Chinese ex ports in a separate case involv ing intellectual property.

While there’s a chance that Chinese policy-makers in Washington for the IMF meeting could take the opportunity to get together with their US counterparts, Dollar doubted that any talks would lead to a breakthrough, given that Beijing’s delegation is apparently led by its new central bank governor Yi Gang and not by someone steeped in trade.

China has held top-level economic talks in recent days with India and Japan. All three have been hit by tariffs on their steel exports to the United States.

The meeting between Japan and China was the first in eight years.

US-Japan announce trade talks; don’t agree on what to discuss P

resident Donald J. Trump and Japanese Prime Minister Shinzo Abe announced another new trade dialogue on Wednesday, while disagreeing on what kind of deal they should aim for.

“The United States is committed to free, fair and reciprocal—very important word—trade. And we’re committed to pursuing a bilateral trade agreement that benefits both of our great countries,” Trump said during a joint news conference with Abe at the end of a two-day summit at Mar-a-Lago, the president’s Florida resort.

Abe responded by saying “I am aware of US interest in a bilateral deal. But we want to approach the discussions from the point of view that the TPP [TransPacific Partnership] is best for both of the countries” that Trump pulled the United States out of in his first week in office.

Japan is the fourth-largest American trading partner, exchanging $200 billion in goods and services annually. In 2017 the US had a $70-billion deficit in that relationship, which Trump has described as “not fair.”

The dispute between the two allies is fundamentally about how they see that status quo on trade.

Trump is pushing for an agreement that would reduce the US trade deficit with Japan, while Abe is basically seeking a return to the situation before Trump became president—with the United States leading TPP, and no extra tariffs on metals that Trump announced last month.

New dialogue

US Trade Representative Robert Lighthizer and Japanese Economy Minister Toshimitsu Motegi will lead the talks, according to the two leaders, but there was no timetable announced for when the discussions will take place.

“I expect very quick progress,” US Ambassador to Japan William Hagerty told reporters after the news conference, but “I think there’s a lot of work to do.”

A former Japanese ambassador to the United States said the comments on trade were “a little incomprehensible.”

“Was there really an agreement on a

trade deal? Was it the same as an FTA [free-trade agreement]? Or was it some deals in some sectors? We have to watch and see,” Ichiro Fujisaki said on Bloomberg TV. “From a Japanese point of view, just to lift tariffs on steel and aluminum, which are not huge exports from Japan, doesn’t balance out with a new trade FTA.” The Motegi-Lighthizer discussions will be part of the current economic dialogue between the two nations. That was announced in February 2017 just after Trump came into office, and is led by Japanese Finance Minister Taro Aso and Vice President Mike Pence.

Old dialogue

It has met twice, and while it hasn’t produced major results, it has resolved some outstanding trade issues. After the second meeting last October, restrictions on Japanese persimmons and US potatoes were removed, and Japan promised to streamline some auto testing procedures.

The Trump administration has recently sent mixed messages about possibly rejoining the TPP. Trump campaigned in 2016 to pull out of what was then a 12-nation agreement and did so just after he took office. But he suggested last week that he would consider reentering the accord “if the deal were substantially better” for the US.

TPP, or not

Late last Tuesday, however, Trump suggested he wasn’t interested.

“While Japan and South Korea would like us to go back into TPP, I don’t like the deal for the United States,” Trump tweeted.

“Too many contingencies and no way to get out if it doesn’t work. Bilateral deals are far more efficient, profitable and better for OUR workers.”

South Korea isn’t a member of TPP, and it’s unknown why Trump mentioned it.

On Wednesday with Abe, Trump showed another possible opening.

“I don’t want to go back into TPP, but if they offer us a deal I can’t refuse on behalf of the United States, I would do it,” Trump said. Bloomberg News

‘Economic embrace’

“ C h ina’ s r i s i n g e c o n o m i c might, coupled with the perception of the US as an unreliable and untrustworthy partner, is driving countries around the world closer into China’s econom ic embrace,” sa id E s w a r Prasad, a former chief of the IMF’s China division and now a professor at Cornell University.

The United States, for its part, won European and Japanese backing for a statement at the World Trade Organization’s (WTO’s) December meeting that indirectly criticized China by voicing concern about overcapacity in some industries and complaining about forced technology transfer.

The European Union and Japan also joined the challenge the US filed at the WTO against Chinese technology-licensing rules.

“I ca ll it a trade coa lition of the w illing,” Larr y Kudlow, head of the W hite House’s National Economic Council, told reporters on April 5.

At its March 19 and 20 meeting in Buenos Aires, the G20 opted not to take sides in the dispute between its two leading members, blandly declaring

that trade and investment were “important engines” of growth.

Still at play

Former IMF executive director T homas Bernes said some countries might have been reluctant to criticize the US because they were simultaneously tr y ing to w in exemptions from A merican tariffs on their steel and aluminum ex ports.

Those considerations are still at play, with Japanese Prime Minister Shinzo Abe making his country’s case to President Donald J. Trump on a visit to the United States this week and German Chancellor Angela Merkel expected to do the same when she comes to the White House later this month.

“The US is not alone in having concern about some Chinese practices, but it does stand alone in terms of the tactics it wants to use to address them,” said Bernes, who is now at the Centre for International Governance Innovation in Waterloo, Ontario.

T hat bipolarity has been ref lected in comments by senior IMF officials. David Lipton, the Fund ’s first deputy managing director, said that it’s time for China to address the concerns that other countries have about its trade practices.

“But, at the same time, we think the differences of view should be settled through cooperation and through dialogue,” he told Bloomberg Television on April 3.

The tussle between the two economic powers is not only putting the Fund in an awkward position.

“Greater US-China trade tensions will make life more difficult for many other countries,” said Tim Summers, senior consulting fellow at the Chatham House Asia Programme in Hong Kong.

“The clear interest of third countries is in avoiding a trade war between the US and China, but none of them seem to have enough clout to push Washington toward a more conciliatory approach,” he added. Bloomberg News

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Friday, April 20, 2018

The World BusinessMirror

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

Raúl Castro to resign as Cuba’s president, closing a dynasty

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AVANA—Raúl Castro, who took over from his brother Fidel 12 years ago and led Cuba through some of its biggest changes in decades, is expected to step down on Thursday and hand power to someone outside the Castro dynasty for the first time since the Cuban revolution more than half a century ago.

During his two terms as president, Castro opened up his Communist country to a small but vital private sector and, perhaps most significantly, diplomatic relations with the United States. It was a notable departure from his brother’s agenda, yet it was possible only because he, too, was a Castro.

His hand-picked successor, Miguel Díaz-Canel Bermúdez, 57, is a Communist Party loyalist who was born a year after Fidel Castro claimed power in Cuba.

His rise ushers in a new generation of Cubans whose only firsthand experience with the revolution has been its aftermath—the early era of plenty, the periods of economic privation after the demise of the Soviet Union, and the fleeting détente in recent years with the United States, its Cold War foe.

Officials started gathering here in Havana on Wednesday morning and put forward Díaz-Canel as the sole candidate to replace Castro, all but assuring his selection by the Communist Party.

Though Díaz-Canel’s path to the top office has been forecast for years, many an heir apparent before him has fallen by the wayside in the search for a successor to lead the country, whether because of party disloyalty, snide remarks or projecting too much power for the Castros’ liking.

In that delicate balancing act, Díaz-Canel, a former provincial leader who became the most important of Cuba’s vice presidents, has shown the sort of restraint prized by the Castros. But that

same caution has left him an enigma both inside and outside the country.

Few US officials—even those in the US Embassy in Havana—have spent time with him or can claim to have shared more than a few passing words.

Even the most seasoned Cuba experts have only faint clues as to what he will do, how he will lead and how much latitude he will have to chart his own course.

Cuba’s next president could be hemmed in from multiple sides.

For one, Raúl Castro is expected to remain the head of the Communist Party and wield great influence. Even Fidel, who ruled Cuba since the revolution, did not officially become president until years later, allowing others to occupy the post while he ran the country.

Beyond that, the diplomatic opening with the United States has closed abruptly under President Donald J. Trump, limiting Díaz-Canel’s ability to maneuver economically. “ There is nothing in his résumé to suggest he is going to take risks,” Theodore Piccone, a Cuba scholar at the Brookings Institution, said of Díaz-Canel.

“But that is the way the system works—anyone willing to take the risk before now would not be in line to be the president.”

Castro is leaving office at a time of tremendous change on the island, both real and promised.

In just the last decade, Cuba has lost its defining leader, Fidel Castro, which made way for

FORMER President Barack Obama and President Raúl Castro of Cuba hold a joint news conference at the Palace of the Revolution in Havana on March 21, 2016. Stephen Crowley/The New York Times

Raúl to take unprecedented steps to loosen the state’s grip on the economy and begin to nurture a private sector.

Then, two years ago, the nation brokered a détente with the United States, paving the way for the reopening of the US Embassy and the first visit of a sitting US president in 88 years.

But change is often a managed affair in Cuba, orchestrated to maintain order while leaving little to chance or, especially, political uncertainty.

While historic, the economic changes in Cuba have been halting, to the frustration of many Cubans hoping for better pay and more opportunity.

So, too, has foreign investment, with leaders leery that it could grow to the point that they can no longer control it.

Now, the country’s next president will face a new set of challenges. Since coming to office,

Trump has lashed out at Cuba and reversed, in spirit if not entirely in deed, the new relationship that President Barack Obama established with the Cuban government. As Cuba seeks to modernize its moribund economy with a new generation of leaders less tethered to the past, the United States appears to be moving back toward a policy of isolation.

Fewer American tourists are visiting Cuba and bringing dollars with them, in no small part because of Trump’s decision to undo some of Obama’s easing of restrictions on travel to the island.

And then there are the mysterious ailments that affected a group of US diplomats stationed in Havana. US officials say they were attacked by unidentified devices that damaged their hearing.

In response, the United States issued a travel warning to its citizens and reduced the size of its embassy staff by two-thirds. For

Díaz-Canel is one of those people who has risen through the ranks because he represents the prevailing view within the party, not because he himself has taken any particular initiative.”—Rhodes

now, there is no office in Cuba that can issue visas for Cubans seeking to visit family members in the United States.

How the sudden slide in relations with the United States will affect Díaz-Canel’s ability to sustain the economy and stave off domestic pressure remains unclear.

Díaz-Canel, though a prominent advocate of bringing Internet service to the island and considered a relatively modern thinker within the context of Cuba, is not expected to deviate from the party line or the prescribed, deliberate path toward economic reform outlined by his predecessor.

In all likelihood, he will govern with less flexibility than Castro, who enjoyed a special status on the island because of his family name and revolutionary credentials. And Castro is not vanishing from the scene. As president of the Communist Party, he will preside over an important bastion of power.

“Díaz-Canel is one of those people who has risen through the ranks because he represents the prevailing view within the party, not because he himself has taken any particular initiative,” said Benjamin Rhodes, who was a top aide to Obama and one of the main brokers of renewed relations with Cuba. “I think he is going to be significantly more constrained than either Fidel or Raúl.”

New York Times News Service

Trump warns: US may exit talks with N. Korea P A L M BE AC H, F lor id a— President Donald J. Trump declared on Wednesday that he would scrap a planned summit meeting with North Korea’s leader, Kim Jong Un, or even walk out of the session while it was under way, if his diplomatic overture was not heading toward success.

Trump continued to express optimism—verging on eagerness—about sitting down with the North’s reclusive leader. But as the momentum for a meeting grows in both Washington and East Asia, the president acknowledged that it was a perilous undertaking that could still end in failure.

“If I think that it’s a meeting that is not going to be fruitful, we’re not going to go,” Trump said at a news conference at his Mar-a-Lago estate in Florida, standing alongside Prime Minister Shinzo Abe of Japan. “If the meeting, when I’m there, is not fruitful, I will respectfully leave the meeting.”

Trump’s words reinforced his decision to send Central Intelligence Agency (CIA) Director Mike Pompeo on a secret trip to

meet Kim. Pompeo, nominated

by Trump last month as secretar y of state, played advance man for the president in Pyongyang, laying the groundwork for the planned meeting.

Among the potential hurdles for the gathering, Trump said, were three US citizens detained in North Korea. The president said that the United States was “ f ight ing ver y d i l igent ly” to obtain their release and that there was a chance of positive developments.

Still, Trump conspicuously declined to make their release a precondition of his meeting with Kim. He also did not demand any new concessions from North Korea beforehand, underscoring how determined he is to make history by convening with the leader of a country he threatened with war a few months ago.

In preparing for the planned event, Trump’s decision to dispatch his CI A director ref lected the president’s trust in and comfort with Pompeo, as well as how diplomats were sidelined in brokering what could be a landmark encounter.

“Meeting went very smoothly and a good relationship was formed,” Trump said in an early morning Twitter post before he went golfing with Abe. “Details of Summit are being worked out now. Denuclearization will be a great thing for World, but also for North Korea!”

Pompeo is still awaiting confirmation to his new post, and faces a challenging vote in the Senate Foreign Relations Committee, where several Democrats have come out against him.

The White House and Republicans seized on Pompeo’s trip as another reason for the Senate to confirm him, while Democrats said he had misled them by failing to disclose his mission, even in private conversations.

But the visit underlines the confidence that Trump has developed in Pompeo, a former Tea Party congressman who has emerged as one of the president’s closest advisers—a stark contrast to Rex W. Tillerson, whom Trump fired as secretary of state days after accepting Kim’s invitation to meet.

It also underlines Trump’s unorthodox approach to one of the

riskiest diplomatic gambits of his presidency.

However tr usted by the president, Pompeo is hardly a traditional emissar y. He is not yet the nation’s chief diplomat but a lame duck as the nation’s spymaster.

Pompeo met w it h K im on Easter Sunday, a senior official sa id , br i ng i ng a long se vera l aides from the CIA—but nobody from the State Department or the W hite House.

Some former administration officials expressed surprise that he returned from Pyongyang with no visible concessions, like the release of the three Americans detained in North Korea.

Pompeo raised the issue, another official said, adding that the White House would continue to push for their release.

In 2014 James R. Clapper, then the director of national intelligence, traveled secretly to North Korea to negotiate the release of two Americans, Kenneth Bae and Matthew Todd Miller.

T hree Korean-A mericans— Kim Dong-chul, Kim Sang-duk and Kim Hak-song—are currently

being held on charges of espionage and committing hostile acts toward the North Korean state.

The administration also has not agreed on a date for the meeting between Trump and Kim, which officials said pointed to problems in settling on a site for the encounter. On Tuesday Trump told reporters that the White House was looking at five potential locations.

The White House has begun narrowing the list of options, a senior official said, eliminating sites like Pyongyang and the Demilitarized Zone between North and South Korea, which could pose an optics problem for Trump. Meeting somewhere in the United States remains a possibility, though that could raise similar issues for Kim. The administration is studying several third countries— Singapore and Vietnam, in Asia; Sweden and Switzerland, in Europe—though all are far from North Korea, posing a challenge to Kim’s fleet of rickety aircraft.

Mongolia, which is closer to the North, is a long shot, the official said.

New York Times News Service

Treaty to formally end Korean War being discussed

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EOUL, South Korea—South Korea confirmed on Wednesday that it had been in talks with both American and North Korean officials about negotiating a peace treaty to formally end the Korean War after more than 60 years, as the United States and its ally try to establish a basis for persuading the North to give up its nuclear weapons.

Chung Eui-yong, the national security adviser to President Moon Jae-in of South Korea, said he had discussed the matter with John Bolton, his newly appointed American counterpart, in Washington last week, as they prepared for the planned talks between each of their countries’ presidents and Kim Jong Un, North Korea’s leader.

South Korean officials said they had also been in talks with the North about a possible treaty.

Kim told Chung and another South Korean official last month that the North was willing to give up nuclear arms if it received security guarantees.

In the past, the North has said that a peace treaty and the normalization of ties with the United States would be among the security guarantees it would require in exchange for surrendering its nuclear program.

Referring to his meetings with Trump administration officials, Chung said on Wednesday, “We held in-depth discussions on various ways of how to end hostilities and eventually establish a peace regime on the Korean Peninsula, how to address the North Korean concerns, and how to ensure a bright future for the North if it makes the right choice.”

“Mr. Bolton made it clear to me that he will do his best as an honest broker in successfully implementing President Trump’s peace policy on the Korean Peninsula,” Chung added.

President Donald J. Trump said on Tuesday that a peace treaty was being discussed and that he approved of the idea. The president, who confirmed on Wednesday that he had sent Mike Pompeo, the Central Intelligence Agency director, to meet with Kim, has said he would meet with the North Korean leader in May or early-June, after Kim’s April 27 talks with South Korea’s president, Moon, on the Koreas’ border.

Treaty would have to involve US and China

The Korean War was halted in 1953 with a truce and has never been formally brought to a close. China fought on the North’s side and the United States on the South’s, and both are signatories to the armistice, along with the North; South Korea, at the time, refused to sign it.

Any peace treaty would, therefore, have to involve Washington and Beijing, South Korean officials acknowledged on Wednesday.

China said on Wednesday that it wanted to play a positive role in formally ending the war, in which an estimated 3 million Chinese soldiers fought. But it stopped short of endorsing the idea of a treaty, which is likely to involve extensive negotiations and would require the recognition of North Korea by the United States.

“China’s attitude is open and supportive to any peaceful means to resolve the Korean Peninsula issue through consultations,” Hua Chunying, spokesman for the Chinese Foreign Ministry, said when asked at a news briefing in Beijing about supporting a possible treaty.

China has promoted the idea of a peace treaty from time to time over the past two decades, to little avail. This time, analysts said on Wednesday, Beijing’s enthusiasm for the idea is likely to be tempered by rising tensions with the Trump administration over trade and Taiwan.

Chinese officials are livid over Washington’s move this week to prevent US suppliers from selling parts to the Chinese tech giant ZTE, they said.

“If the two countries cannot settle the trade issues, that will have a significant impact on China’s attitude toward helping the United States on North Korea,” said Cheng Xiaohe, a North Korea expert at the Beijingbased Renmin University. “The ongoing situation with trade is complicating and undermining cooperation.”

New York Times News Service

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

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Friday, April 20, 2018

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EU, UK Brexit talks start with sluggish progress

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he first formal meeting between the United Kingdom and the European Union (EU) on their post-Brexit relationship ended with little in the way of serious progress.

Senior officials from the British government’s Brexit department and their counterparts from the European Commission picked over the guidelines for future ties that the EU’s 27 remaining leaders published last month, said a person familiar with the talks.

That document acts as a starting point for a more detailed agreement on post-2020 relations that the two sides hope to finalize before late-October.

But EU officials say they need far more detail about the UK’s position on the future before negotiations can begin in earnest and describe what they’ve heard so far as unacceptable cherry-picking of some parts of EU membership.

T hey a lso maintain that there’s still time for the government to change its mind, in particular over whether to pull out of the bloc’s customs union. W hile that’s a key part of Pr ime Minister T heresa May’s Brexit policy, the UK’s upper house voted against the move on Wednesday.

EU officials explained the thinking behind the guidelines and the two teams also discussed how to prioritize

topics to be discussed over the coming weeks, according to the person, who spoke on condition of anonymity because the talks are private.

They aim to reach agreement in matters including trade in goods and services, regulatory standards in areas such as food safety and tax policy and the exchange of personal data.

‘Political declaration’

The agreement on future relations will come in the form of a nonbinding “political declaration” and will form the basis of fully fledged trade negotiations—once the UK is out of the EU and in an already-agreed 21-month transition period from March 2019.

In addition to trying to get agreement on the future, negotiators also discussed unresolved issues connected to the UK’s withdrawal, in particular how to keep the Irish border invisible if Britain quits the customs union.

Earlier, EU President Donald Tusk told the European Parliament in Strasbourg, France, that it was Britain’s responsibility to help come up with a solution for the Irish border because “the UK’s decision on

Brexit has caused the problem.”

“Without a solution there will be no withdrawal agreement and no transition,” he said.

May defeated in Lords

The United K ingdom’s up per house voted against a key part of Prime Minister May’s Brexit policy, inf licting a defeat on the government that could eventually push it toward keeping closer ties with the European Union.

The defeat by a margin of more than 100 votes was on an amendment pressing May to seek a post-Brexit customs union with the EU. Staying in a customs union is a key demand of business as it would facilitate trade. It would also ease negotiations in Brussels.

While the government doesn’t interpret the amendment as binding, the heavy defeat may signal more challenges ahead.

For starters, there is the scale of the defeat. It could embolden members of her Conservative Party in the elected House of Commons who want to soften Brexit.

Once it has cleared the Lords, the bill returns to the lower chamber, where there’s probably a majority who favor a customs union that is now also the official policy of the main opposition party.

The prime minister “must now listen to the growing chorus of voices who are urging her to drop her red line on a customs union and rethink her approach,” Labour’s Brexit Spokesman Keir Starmer said in a statement after the vote.

Pro-EU Tories are feeling bold. Lawmaker Anna Soubry, a former Conservative business

Pilot of crippled Southwest plane is navy veteran with ‘nerves of steel’

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bout 20 minutes after takeoff on Tuesday, Capt. Tammie Jo Shults was steering a Southwest Airlines plane toward cruising altitude, generally considered the safest part of a flight. But then the left engine exploded.

The blast hurled debris into the side of the plane. A passenger window shattered. The cabin depressurized. A woman was partly sucked outside the plane. Passengers panicked and flight attendants sprang into action.

In the cockpit, Shults remained calm as she steadied the aircraft, Flight 1380.

“Southwest 1380 has an engine fire,” Shults radioed to air-traffic controllers, not a hint of alarm in her voice. “Descending.”

In an instant, Shults found herself in a situation most pilots face only during training: having to land a plane after an engine goes out.

For the next 40 minutes, she displayed what one passenger later called “nerves of steel,” maneuvering the plane, which had been on its way from La Guardia Airport in New York to Dallas Love Field, toward Philadelphia for an emergency landing.

In the seats behind her, passengers sent good-bye text messages to loved ones, tightened oxygen masks around their faces and braced for impact.

Flight attendants frantically performed CPR on the critically injured passenger, who later died at a hospital.

But Shults, 56, was in control. She learned to fly as one of the first female fighter pilots in the Navy three decades ago, piloting the F/A-18 Hornet in an era when women were barred from combat missions.

“Can you have the medical meet us there on the runway,” Shults calmly told air traffic controllers in Philadelphia.

“They said there’s a hole and, uh, someone went out.”

At 11:20 a.m. Eastern time, Shults steered the plane, a two-engine Boeing 737, to a smooth landing on Runway 27L at Philadelphia International Airport.

The left engine looked as if it had been ripped apart.

“This is a true American hero,” Diana McBride Self, a passenger, wrote in a Facebook post. “A huge thank you for her knowledge, guidance and bravery in a traumatic situation. God bless her and all the crew.”

Another passenger, Alfred Tumlinson, was more direct in his praise. “She has nerves of steel,” Tumlinson told The Associated Press. “I’m going to send her a Christmas card—I’m going to tell you that—with a gift certificate for getting me on the ground. She was awesome.”

While women still make up a small percentage of commercial pilots, Shults took up flying when there were far fewer in the industry and when women were often told to find other careers.

In her junior year at MidAmerica Nazarene University in Olathe, Kansas, she attended an Air Force event and spotted a woman in a piloting class, she told an alumni publication.

She graduated from MidAmerica in 1983 with a bachelor’s degree in biology and agribusiness, and then set off to join the military, the university said on Wednesday. The Air Force would not accept her, she told the publication, but the Navy would. She enrolled in Navy flight school in Pensacola, Florida, in 1985—the start of a decade of groundbreaking service.

“We can confirm that Lt. Commander Shults was among the first cohort of

women pilots to transition to tactical aircraft,” the Navy said in a statement on Wednesday.

She flew the F/A-18 Hornet, the twin-engine supersonic fighter jet and bomber. After flight school, in 1989, she was assigned to the Tactical Electronic Warfare Squadron 34 in Point Mugu, California. During the Gulf War, her squadron was led by the first female air commander in the Navy.

But despite her accomplishments, she came up against the limits placed on women in the military. She left active service on March 31, 1993— two days before the Navy asked the Clinton administration to open combat assignments to women.

She then spent about a year in reserves before leaving the military in 1994, reaching the rank of lieutenant commander.

Shults later became a pilot with Southwest Airlines, as did her husband, Dean M. Shults. Southwest Airlines declined to comment about her on Wednesday. In a brief telephone interview on Wednesday, Dean Shults declined to comment, other than to say: “The media has it right—she’s a hero, and I’m proud to be her husband.”

After her name started to appear in news reports on Tuesday, fellow female fighter pilots started to message one another about Shults.

Christine Westrich, who flew the F/A18 in the Marine Corps in the late-1990s, said she was struck by her service.

“She is undoubtedly a pioneer, being a Hornet driver well before the combat exclusion law was lifted,” Westrich said in an interview. “She kicks ass in my book.”

New York Times News Service

minister who has put her name to amendments to other bills in the lower chamber pushing for a customs union, retweeted a Twitter post saying “Lords batter the govt.”

She earlier coauthored an article in London’s Evening Standard newspaper with former Tory Chairman Chris Patten, one of the sponsors of the Lords amendment, that described staying in a customs union as “the best way to support our trade both within Europe and beyond.”

“There are times in one’s political career when what is alleged to be party loyalty comes way behind trying to stand up for the national interest,” Patten said during the debate that preceded the vote. “In doing that I think I will be repeating what I would have been able to say with the full support of my party for most of the time I’ve been a member of it.”

May was later defeated on a

second amendment that binds the government to bring in added protections for workers rights, environmental protections and consumer standards that stem from EU law currently in place.

A fter the vote, the Depar tment for Exiting the European Union said it was “ disappointed ” by the resu lt, but that the gover nment doesn’t feel bound to change its polic y.

May’s bind

Further defeats possible

May has rejected staying in the customs union as it would prevent Britain pursuing an independent trade policy, which for the most enthusiastic Brexit supporters in her party is a crucial benefit of leaving the bloc. If she reneges on that, she risks a leadership challenge.

“We have set out our two potential options for a future customs relationship with the EU,” Brexit Minister Martin Callanan told the upper chamber before the vote.

The amendment “would send a signal that the government won’t seek to negotiate them and instead will pursue an outcome that the government has ruled out.”

T h e c r o s s - p a r t y a m e nd m e nt passed by 348 votes to 225. As well as Patten, it was sponsored

by Labour’s Brexit spokesman in the Lords, Dianne Hayter, Liberal Democrat Sarah Ludford, and John Kerr, an independent who helped draft the Article 50 clause that governs the Brexit process.

After Wednesday’s sittings, the bill has five more sessions in the Lords through May 8 before returning to the Commons. Labour sees a chance of beating May on eight issues, including the customs union and critically—the government’s desire to set Brexit day in stone on March 29, 2019. Bloomberg News

Banking&Finance BusinessMirror

A8 Friday, April 20, 2018 • Editor: Jun B. Vallecera

www.businessmirror.com.ph

IMF/World Bank Group keen on supporting Manila infrastructure buildup program

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By Rea Cu

@ReaCuBM

he World Bank has bared plans to participate in the country’s infrastructure buildup program, specifically railway projects, the Department of Finance (DOF) said on Thursday.

Cebu lender links up with student audit group

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ity Savings Bank (CitySavings) copresented the recently concluded Philippine Financial Summit (PFS) organized by the University of the Philippines–Junior Finance Association (UP-JFA) at the Sky Hall, SM Seaside City Cebu.

PFS Cebu is part of a bigger campaign and the flagship event that UP-JFA spearheads annually dubbed as the “Investment Month.”

This year the student organization focused on gathering and training students and young professionals from different organizations through financial-literacy and –awareness programs, with topics ranging from financial mastery to the economic potential of the Visayas region.

“Investment in people give the best returns,” UP Diliman student and Investment Month Chairman Ian de Luna said as he welcomed over 500 participants from the Visayas region.

Un ion B a n k of t he Ph i l ippi nes (UnionBank) Senior Executive Vice President and CitySavings Chairman Eugene Acevedo was one of the summit speakers.

Focusing on digitization trends in banking, Acevedo asked the students how often they visit a bank since, in one survey, people rated going to the bank just slightly above going to the dentist.

“When people go to a bank to ask for a loan, for instance, they often feel embarrassed because the bank asks for many things. Customers want to be treated in a special way. So we asked ourselves why

banks can’t change the way they treat customers.” he said.

“We’re starting to make banking more interesting. In UnionBank, for example, we came out with The Ark. It’s a branch with no tellers. A customer can go to the Ark and do banking via a tablet while sitting on a nice chair having coffee. It’s a selfservice banking facility that is completely paperless. Banks now need to focus on user experience,” he added.

Acevedo also talked about Bitcoin and the blockchain technology behind it. Bitcoin, the decentralized ledger network, allows users to transact directly, peer to peer, without a middleman acting as central authority.

Finance Undersecretary Gil S. Beltran told financial reporters that the DOF will discuss the matter at the 2018 Spring Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) from April 18 to 21 in Washington, D.C. The World Bank is keen on how it can better participate in the country’s infrastructure program.

“Of course we will meet the WB team that handles their lending here in the Philippines. They want to participate more actively in our infrastructure projects. Last year they said they can handle railway [projects],” said Beltran, who attended the Spring Meetings.

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he Department of Finance (DOF) said the Duterte administration plans to build eight major bridges costing an estimated P269.19 billion that will connect islands in the Visayas to each other and link these to Luzon. The broader goal is to stimulate growth.

The DOF said that, as part of the massive infrastructure buildup to further stimulate growth and create jobs outside of Metro Manila, the government plans

By Justice S J Ranada Jr.

LAND REGISTRATION–when statute of limitations inapplicable The statute of limitations and Section 6, Rule 39 do not apply in land registration proceedings. In said proceedings, the ownership by a person of a parcel of land is sought to be established. After ownership is confirmed by judicial declaration, no further proceeding to enforce said ownership is necessary, except when the losing party is in possession of the land and is sought to be ousted by the winning party.

GR 231116 Velasco, J

Are we ready for a federal government?

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s federalism the panacea for the many troubles that beset our nation? Globally, a majority, or 166 of the 199 nations of the United Nations (including the Philippines) are unitary in form and only 27 are federalized although they comprise 40 percent of the world population. One may also peruse a very recent study made by the Ateneo de Manila on the comparisons, based on empirical evidence between the federal and the unitary governments of the world. For instance, it says in the Asean, the Philippines, Indonesia and Thailand are unitary, while Malaysia is federalized.

Further, the Ateneo study says among the three, the Philippines is the most decentralized. Shocking of all, it turns out that federalized Malaysia was judged the most centralized in real terms.

The conclusions, therefore, are that: (a) federalism does not always mean decentralization and (b) that decentralization can still be achieved under a unitary state like the Philippines.

We offer two suggestions to further improve the decentralization of our unitary form or government that may affect the outcome that federalism advocates hope to achieve. One is to create truly autonomous regional offices of all national agencies and instrumentalities equipped with powers to implement decisions without consulting imperial Manila. The other is to improve the share of local government units (LGUs) in the national tax pool, which has remained unchanged since 1991.

The law says the percent share of the LGUS be rationalized every five years. But in the last 26 years, from 1991 to 2017, the chance to increase the LGU share was allowed to pass at least five times in 1996, 2001, 2006, 2011 and 2016. What wasted time for rural development.

But, of course, there are “pure” federal-

Finex free enterprise Zoilo ‘Bingo’ Dejaresco III ists that want the state’s (region) autonomy be derived from the Constitution itself and not devolved from the Executive branch that can be taken back again under a unitary government. Federalism authority Ronald Watts sums it up handsomely: “The key is not the degree of decentralization but the degree of constitutionally guaranteed autonomy that the constituent units may exercise.”

Interestingly, former Chief Justice Hilario Davide Jr. favors retaining the unitary form, while the former Chief Justice Reynato S. Puno, who heads the constitutional commission, opts for federalism. Davide says the 1987 Constitution provides for a healthy balance of power between the Executive, Legislative and Judiciary; it prevents the abuse of power and enshrines the constitutional right of People Power. For all its flaws, the unitary system survived the brutalities of martial law and the economic downturns that helped the Philippines emerge a vibrant democracy and one of the leading economies in Asia. Why fix a wheel that is not broken?

Former Senate President Aquilino Q. Pimentel Jr., who authored the landmark Local Government Code, believes this is not enough and endorses a full shift to federalism. CJ Puno believes the centralization of power in a unitary government is the cause of the lack of political or economic “inclusion” as the levers of power are controlled by the economic elite and the po-

the world economic outlook, poverty eradication, economic development and aid effectiveness.

Budget Secretary Benjamin E. Diokno represents the Philippines in the meetings, alongside senior officials of key government agencies.

As head of delegation, Diokno attended four key events on the first day of the annual gathering in Washington, D.C. He outlined the budgetary priorities of the Duterte administration, specifically the thrust for public infrastructure and human capital development, before the SAIS-Asia Foundation and the US-Philippines Society.

DOF bares bridge-building projects linking Visayas islands to Luzon

Case clippings

Republic v. Yap 07 Feb. 2018

He explained that the DOF’s International Finance Group will provide a list of possible projects to interested financial institutions for possible financing or partnership.

“We usually give them the list of all possible projects, then they choose which one they want to participate in. It depends upon the expertise they have, but they can handle many of the things we are doing.

They have experts,” he said.

The IMF/WBG Spring Meetings is a venue for central bankers and ministers of finance, as well as development agencies, private-sector executives and academics to discuss issues of global concern, including

litical dynasties who are closely linked to the national government. Constitutional expert Christian Monsod cites data analytics, saying only three regions, namely, the National Capital Region, Calabarzon and Central Luzon, can sustain themselves under a federal form, contributing as they do 63 percent of the country’s GDP. CJ Puno, however, counters he is open to an “evolving” federal form, with half states allowed to devolve into full ones at their own speed and are autonomous regions where cultural/religious idiosyncrasies rather than fiscal reasons necessitate their independence like that of the Autonomous Region in Muslim Mindanao and the Cordilleras. There are talks on the “equalization fund” meant for stronger states to help the weaker ones graduate into full states.

President Duterte prefers the French model with a President and Prime Minister.

The PDP-Laban basically agrees to a bicameral Parliament and 11 or 12 independent states ran by their own parliaments.

The constitutional commission, on the other hand, is set to submit to the President their recommended version on July 1 prior to the deliver of the state of the Nation Address or Sona of the President. On how the Charter change will be implemented, both Davide and Puno agree this has to go through a constitutional convention, where delegates vote and the new Charter ratified by the vast electorate. To insist on other means seriously misreads the political psyche of the Filipino electorate.

Dejaresco, a former banker, is a financial consultant, media practitioner and book author. He is a Finex life member and chairman of its broadcast media. His views here, however, are personal and do not necessarily reflect those of Finex. dejarescobingo@yahoo.com

to construct eight bridges connecting the Visayan Islands to Luzon.

Finance Secretary Carlos G. Dominguez III said complementing the bridge projects is the construction of road networks to help transform the island-economies into growth corridors of the Visayas.

“These bridges will provide growth corridors and ensure that none of the major islands of the Visayas will be left behind in the country’s race to progress,” Dominguez said in a speech read for him by DOF Undersecretary Bayani H. Agabin at the closing of the Philippine Economic Briefing held at a hotel in Cebu City on Thursday.

The finance chief said the proposed bridge projects to be submitted to the Investment Coordination Committee for approval include: an 18.2-kilometer bridge to connect Samar provinces to the main island of Luzon; a 20-kilometer bridge connecting Leyte to Mindanao Island through either an Underwater Tunnel Bridge or a Long-Span Overhead Bridge; the 5.7-kilometer Panay-Guimaras bridge; the 12.3-kilometer Guimaras-Negros interisland linkages connecting these islands; the 1-kilometer Bohol-Lapinig Island bridge;

the 18- kilometer Lapinig Island-to-Leyte bridge; the 5.5-kilometer Cebu-Negros Link Bridge; and the 24.5-kilometer Cebuto-Bohol Link Bridge.

He added the proposed bridges are on top of the four big-ticket projects in the Visayas under the “Build, Build, Build” program already approved for implementation by the National Economic and Development Authority Board, which includes three air port-improvement projects and the New Cebu International Container Port.

“Our infrastructure investments, estimated at $170 billion between now and 2022, have very high multiplier effects.

By undertaking these thoroughly studied strategic projects, we will stimulate economic activity. Jobs and opportunities will be created, and we are confident we can bring down poverty incidence to only 14 percent by 2022,” he said.

Dominguez emphasized that Filipinos will feel the economic benefits of the government’s infrastructure projects “very soon,” with the country “moving strongly toward achieving a high middle-income status in a few years.” Rea Cu

Local fintech, Grameen Foundation use technology to empower the poor

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OSIBLE.NET, a financial-technology or fintech company, and Grameen Foundation, a global nonprofit organization, have collaborated in a program that seeks the empower the poor, especially women, by using digital technology to address particular needs.

This collaboration was at the core of the public gathering, titled “The CAN Experience: Digitizing Financial Services For All,” held recently at The Bayleaf Hotel, Intramuros, Manila. Attended by various stakeholders and regulators in the financial-technology industry, Grameen Foundation reported that its track toward financial inclusion has been reaping substantial results for the benefit of both Filipino entrepreneurs and the underserved communities.

Grameen Foundation has created breakthrough solutions in the realm of financial, agricultural and health services. The organization uses digital technology and strengthens local partner networks to design and deliver solutions that open opportunity for women and families living in poverty. It has done just that for Asia, Latin America, Middle East, North Africa and Sub-Saharan Africa.

The foundation began working in the Philippines in 2000, with the goal of catalyzing financial inclusion by enabling the poor, especially the Filipino women. Grameen Foundation said 36 percent of 1,634 local government units remain unserved by any banking facility, while only 28.1 percent of the adult population owns an account at a financial institution—numbers that are reflective of the large gaps that exist between the financial services needs and the current formal supply available in the market.

This is where Posible.NET and the foundation’s Community Agent Network (CAN) program come in.

The CAN Program, launched in 2015, seeks to improve the resilience of the financially unserved and underserved by

Gatti

establishing an agent network that is sustainable and scalable for various stakeholders, such as fintech providers, merchants and micro-entrepreneurs.

It aligns with the National Strategy for Financial Inclusion of Bangko Sentral ng Pilipinas, which sets a focus on enabling an environment where there is effective physical access to a wide range of financial services designed to cater to the evolving needs of the Filipino consumers.

As of January 2018, Grameen Foundation has 1,896 agents nationwide, 75 percent of which is female who is about 40 years old and have had at least a year of college education.

“In many of our studies, we found out how women are better in handling money and finances than men. It is women’s attention to detail that makes them successful in activities that involve moneycollecting, balancing and paying—these just come naturally to women,” Gatti said. “This will be beneficial, not only to the lives of these women, but also to the economy.”

In the same report, Grameen said 88 percent of the agents onboarded during the CAN program use POSIBLE.NET as their fintech provider.

Likewise, JG Puzon, CEO of POSIBLE. NET, reported they now have 2,000 active retailers nationwide and has generated 3.8 million transactions amounting to P2-billion gross value.

Opinion BusinessMirror

www.businessmirror.com.ph

Friday, April 20, 2018 A11

Murdering marriages

The art of cost benefit analysis

Tito Genova Valiente

annotations

Alvin P. Ang

EAGLE WATCH

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he decision to close Boracay and the merger of Grab and Uber are recent events that have brought about the need to understand the costs and benefits of such decisions from the perspective of ordinary citizens. Without a “laymanized” standard assessment, every stakeholder will have his or her own perspective of how such decisions will benefit or negatively affect him or her.

Let us consider Boracay; according to the estimates of the National Economic and Development Authority (Neda), the six-month closure of the island will “only have a 0.1percent impact on the GDP growth.”

By saying there is a 0.1-percent impact, it means that the economy will be affected negatively. But how big is 0.1 percent of GDP growth? The GDP growth of the economy in the last six years roughly averaged to about 6.5 percent. So, closing Boracay means that instead of 6.5 percent, the economy will post a growth of only 6.4 percent in 2018. According to Boracay Foundation, about 17,000 jobs will be directly affected and another 19,000 tourism-related jobs. Furthermore, the hotels and tourism-related establishments will not have revenues for six months.

The foundation estimates that of the total tourism receipts of the country, 20 percent is generated by Boracay.

The total tourism receipts for 2017 is P335 billion, growing by more than 45 percent. Total international tourist arrivals reached 6.6 million, or a growth of 11 percent. If we are to follow the trend of Boracay tourist arrivals, there were about 1.9 million tourists in 2017 and about half of these were foreign tourists. This closure will cut an estimated 800,000 international tourists. Department of Tourism data also showed that Kalibo, the international gateway to Boracay, is the third international tourism gateway with about 7.5 percent of total inbound international tourists. This is of no surprise considering that 13 international airlines mount flights through that airport.

With this information, it may not be easy to say that the negative impact is only a 0.1 percent deduction from expected growth. With the significant relationship of inbound tourism to accommodations, food and beverages, souvenir items, shopping, transportation and entertainment, the impact could be higher. This may be one way of looking at the costs— from the production side. This, however, is incomplete. It only looks at the perspective of today.

Closing Boracay is similar to a situation wherein one is deciding whether to book that air ticket now and enjoy all its perks even if the resources are not enough, or delay the enjoyment when one is ready to financially cover all the expenses.

Many people actually play cost- benefit analysis in their minds in working decisions like this. Often, the value

Arranza. . .

continued from A10

as LPG, be granted congressional representation?

Would this not be worse than a regulator being a competitor at the same time? This brings us back to the question on whose interests would come first for LPGMA, as a member of the House of Representatives. Perhaps, these are questions that consumers should try to find answers for as the 2019 midterm election nears.

And, in closing, I would like to pay tribute to an honorable person who looks at public service from the point of view of the people he serves and has transcended party politics with his good governance.

Energy Secretary Alfonso G.

for today is given higher importance than tomorrow. This behavior, if left unchecked, will lead to serious financial repercussions in the future.

Therefore, personal financial planning is crucial and serious budgeting is a virtue in a time of real-time, social-media consumerism. People are living longer and, therefore, need to understand that we need to balance our resources for our needs today and for the future. This also applies to how we behave in relation to the use of resources like public resources, such as water, power and our own private resources. The tragedy of the commons, as it is known in the Economic Literature, says that when a resource is overly used, such that demand outweigh supply, then everyone eventually lose the resource.

Boracay and similar tourist sites, water resources, waterways, land and other resources that we commonly benefit from are in danger of the tragedy of the commons. In this context, the costs of today are outweighed by the costs of tomorrow.

For this reason, cost-benefit analysis must be the norm for everyone in relation to daily spending and particularly, those involved in regulation and policy-making. It requires that the standing or prioritization of stakeholders is clear for both the needs of the present and of the future. Boracay is an example of a clear overused system that was left unchecked. It has reached overcapacity years ago and yet the government even targeted higher tourism arrivals. Similar challenges are now being faced by many tourist spots around the country as we desire to increase the number of inbound tourists both locally and internationally. With the cost of air travel falling significantly, movement of people naturally follows mostly to places like Boracay.

What needs to be done is clearly for both national and local governments to undergo capability enhancements in determining capacity limits and the science and art of cost-benefit analysis. The affected people and business need to be supported and provided safety nets partly because government allowed the Boracay expansion. Needless to say, we, as individuals, too, should have a clear understanding of the needs of today and tomorrow. If people will not allow emotions to get in the way, a majority will start thinking about the future. Because people who have better days ahead will always invest in thinking about the future.

Cusi is a person who would uphold public/consumer interest above anything else. As chairman of the Philippine Electricity Market Corp. (PEMC), Cusi asserted his commitment for fair play and good governance when he assured its board that he will not recommend or even allow anyone to use his name in matters that would affect the independence of PEMC from government intervention. I sit as one of the members of the PEMC Board representing the private sector. Secretary Cusi, may you have many more years in public service.

Dr. Arranza is the chairman of the Federation of Philippine Industries and Fight Illicit Trade, a broad-based, multisectoral movement intended to protect consumers, safeguard government revenues and shield legitimate industries from the ill effects of smuggling.

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nother niece is getting married in August. As with any other couples, she has started the flurry of activities that attend the present-day editions of marriage. This means that, as early as today, they have reserved already the church of their choice and selected the priest of their own persuasion. A new feature of marriages presently are the so-called prenuptial photo sessions. This is an activity that assumes the proportion of a real filmmaking, with directors of photography and stylists. I have been informed that drones now are regular features of prenuptial photo documentations the better to provide a panoramic perspective about unions and exchange of vows.

There is, however, a new development in weddings that are almost unthinkable 10 or 20 years ago: the existence and presence of wedding coordinators. The wedding managers are a composite of two teams: the stylists who take care of how the bride, the groom and the entire entourage will look and the gang of stage managers who will govern the procedures and movements the moment the wedding party moves out of the hotel or home, till it reaches the church and the ceremonies are conducted. Their presence, which can be dominant all throughout unless you scream at them to stop intervening, will extend up to the hotel or wherever the reception is held. I have heard of wedding coordinators who see to it that the food in the banquet are not poisoned and thus are the first to taste them, the chocolates and candies not excluded.

If the wedding participants have enough economic surplus, a separate squad composed of photographers can join this team who combine the power of traffic policemen, counsels and manipulators. These cameramen will tell you what to do: where to place your arm, when to smile and, if you

are unfortunate, command you to do a wacky pose. I suspect wedding photographers are unhappy persons and, thus, amuse themselves at the expense of wedding guests caught in the fever of the occasion. If your misfortune is plentiful, these men and women with camera will even request you to do a jump shot. Don’t.

I have attended enough weddings, standing even as sponsors, for me to speak about the danger and complications brought about by wedding coordinators.

These wedding magicians have the power to enchant everyone, except the priest whose sacerdotal authority remains superior over them.

The gimmicks and tricks developed by wedding coordinators can be intractable and uncontainable.

If you allow them, they can propose anything and act on their proposal with the might of a dictator.

Weddings are not circuses but these coordinators can turn your quiet event into a carnival by their capacity to articulate the persona of, usually, the bride and groom. Once, I stood a wedding where, upon sitting at my designated spot, I noticed something alien on my table: a paper

plane. I looked to my left and to my right and farther down the table and saw that we all had paper planes in front of us. I remember looking at the other guests and, like me, they had the same puzzled look. What are we going to do with these paper planes? Then the ringmaster, the emcee/host if you wish, started to talk in an accent that was a cross between a Midwest accent and an Irish brogue. She commanded us to pick up the paper planes and fly them as the couple entered the hall.

The host explained that the bride and groom are flying to abroad immediately after the wedding. The paper planes were the symbol for this fate. It seems “bon voyage” does not suffice anymore.

For all the varieties of details articulated by these wedding planners, the coordinated weddings usually end up all the same: the main door of the church is closed so that the bride can enter like some phantom figure against the light. The sponsors are marshalled to walk in a certain way. And, as the newly wed are about

to step out of the church, these coordinators distribute devices from which glitters and confetti would burst, turning the ordinary recessional into a ticker tape parade. The strategies are endless.

Today’s weddings require something else other than composure; one needs a sense of humor. I once was in a non-Catholic wedding where there were two officiating persons: a man and a woman. Both were talkative.

There was no quiet moment in the long ceremony as they took turns annotating parts of the wedding ritual.

Toward the end, the two sang—with solos and duets.

I wonder how long we will give up our human rights to manage the weddings of our loved ones. In many cities, there are already coordinators and planners tasked to oversee funerals.

There is enough uncertainty about life; it is nice to know that there are people ready to manage dying and death.

E-mail: titovaliente@yahoo.com.

Radio Veritas as ‘Ang Radyo ng Simbahan’ Rev. Fr. Antonio Cecilio T. Pascual

SERVANT LEADER

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his 2018 we at Radio Veritas 846 has launched “Ang Radyo ng Simbahan” as our new tagline.

This aims to intensify the station’s mission to evangelize all the Catholic faithful by means of spreading the truth and the teachings of the Church.

The rebranding of our station is just the start of our plan to strengthen and deepen the faith of the Catholic people as the Catholic Church prepares for the celebration of the 500th year of Christianity in the Philippines.

With the appointment of a new management in 2005, the station was relaunched with a new logo, and its religious and public-service programs were strengthened for the benefit of the Catholic faithful.

In April 2008 Radio Veritas established its Kapanalig Radio Community to further engage with the listeners and achieve its vision and mission as the station for truth and evangelization.

Currently, the station is going beyond radio through its web site and social-media platforms. The station is also persistently expanding nationwide by putting up relay stations in Luzon, the Visayas and Mindanao and maximizing its presence in multimedia platform, such as Cignal cable TV Channel 313, live streaming and E-radio portal (by clicking Luzon AM and selecting Radyo Veritas 846) for online broadcast, as well as on TV Maria on Dream Channel 1, Sky Cable Channel 210 and Global Destiny Channel 96.

Established in 1969, the Ramon

Protecting Filipino consumers Edgardo J. Angara

A

pril 13 last week marked the 26th year the Consumer Act (Republic Act 7394) of the Philippines was signed into law.

And since the law’s passage in 1992, comprehensive guidelines have been laid down in order to promote and protect consumer rights, namely—the right to basic needs, the right to safety, the right to information, among others.

Consumer protection is safeguarded by our own fundamental Charter or Constitution. Article XVI, Section 9 states that, “The State shall protect consumers from trade malpractices and from substandard or hazardous products.”

This protection is particularly applicable as there’s a trend among

Filipinos—especially the youth— preferring local brands. In fact, in 2012, global research organization Teens Research Unlimited found out that consumers prefer homegrown brands over foreign labels. Nowadays, it is not uncommon to see organized bazaars and trade fairs where local products

occupy the spotlight.

Our government watchdogs should aggressively act to protect Filipino consumers. We have heard of sad stories of business firms ripping off Filipino consumers through shoddy products, poor workmanship, misbranded products and products with toxic or harmful materials. Non-governmental organizations’s like EcoWaste Coalition have been warning the public of toys from stores that have toxic elements, such as lead (which can lead to brain damage) and antimony (a known carcinogenic) and cadmium (which can damage the lungs).

Another rip-off is the “nakaw load” in which cellular load seemingly disappears without cause.

Even the National Telecommunications Commission admits that there are so-called value-added service providers that consume the prepaid load of users without prior notice or receipt of transaction from these

Magsaysay recipient Catholic radio station continues to be a leading social communications ministry for truth and new evangelization in the country today.

Owned and operated by the Roman Catholic Archdiocese of Manila, Veritas 846 is a 24-hour religious AM station that airs Church views and advocacies on news and social concerns, religious programs and inspiring talks and social services.

To know more about Caritas Manila, visit or follow us on Facebook: CaritasManilaInc. For your donations, please call our DonorCare lines 563-9311, 564-0205, 0999-7943455, 0905-4285001 and 0929-8343857. Make it a habit to listen to Radio Veritas 846 in the AM band, or through live streaming at www.veritas846.ph and follow its Twitter and Instragram accounts @veritasph and YouTube at veritas846.ph. For comments, e-mail veritas846pr@gmail.com.

providers. And while service providers have imposed stricter guidelines, many still claim to have experienced loss of prepaid load with no apparent reason.

With e-commerce becoming pervasive, the bureaucracy’s role should be proactive, no longer passive. It’s critical to review the Consumer Act of the Philippines, as well as the E-Commerce Act, so as to adapt them to the changing trends of the consumer market.

The Department of Trade and Industry has pushed for amendments to the Consumer Act specifically regarding online transactions. And while they have issued E-Consumer Protection Guidelines to address this issue, they should look into other countries who have established successful safeguards and make them the model for best practices.

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

A10 Friday, April 20, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

www.businessmirror.com.ph

editorial

‘Guns, goons and gold’

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hat is the phrase that was used to describe Philippine elections in the past. The Commission on Human Rights reported 49 instances of “politically motivated” killings, assaults and harassments in the country from June 2015 to March 2016. Except for the “gold” part, of course, election violence has decreased in the past two decades. The CHR noted four deaths related to the run-up of the 2016 polls.

“We have the dubious record of having the worst election-related violence in the history of the world. That’s on November 23, 2009 [the Maguindanao massacre]. So our effort is to actually bring that to zero,” CHR Chairman Jose Gascon said.

However, the Philippines is making progress. From Reuters.com: “At least 82 candidates and office holders have been killed since the electoral season kicked off in September, making this the bloodiest presidential race in recent history, according to a tally by Etellekt, a security consultancy based in Mexico City.”

The “warlords” that can control the politics of local governments translate into vast financial power. When you can exercise strong if not absolute control over the police and, to a lesser extent, the local courts, anything is possible. Public-works projects become the piggy bank of the local politicians. Businesses can only operate in the area with the protection of the “mayor.” Voters are either too frightened or too financially dependent to freely cast their vote. A significant portion of the past “guns, goons and gold” was to protect local gambling that supported the political power.

In the current case of Mexico, it is much more disastrous and gives a lesson for the Philippines.

From Reuters: “Security experts suspect drug gangs are driving much of the bloodshed. With a record of about 3,400 mostly local offices up for grabs in July, Mexico’s warring cartels appear to be jostling for influence in city halls nationwide, according to Vicente Sanchez, a professor of public administration at the Colegio de la Frontera Norte in Tijuana.”

“Sanchez said crime bosses are looking to install friendly lawmakers, eliminate those of rivals and scare off would-be reformers who might be bad for business. Local governments are a lucrative source of contracts and kickbacks, while their police forces can be pressed into service of the cartels.”

It is an open secret that the illegal-drug business in Mexico was not taken seriously many years ago. The drugs were shipped to the United States, and the money came back to Mexico. Politicians enjoyed the funding for their campaigns, and there was obvious cooperation between both local and national officials with the drug cartels.

The national government’s “war on drugs” was not successful in stopping the business, but it did fuel a greater problem. The cartels became more violent to protect their interests, and “the crackdown splintered established crime syndicates into dozens of competing gangs. Newcomers ratcheted up the savagery to intimidate rivals, as well as police and public servants who might stand in their way.”

The election violence is growing, and both national and local governments are nearly helpless because the culture of payoffs from the cartels is so pervasive. Magda Rubio is a candidate for mayor in a small city in northern Mexico on a key route for heroin trafficking. She has been targeted by the cartel and is under 24-hour guard. But she says, “Cartels have a knack for infiltrating security details like a coyote looking after the chicken.”

The people are both victims and accomplishes in this disaster. We must stay vigilant and not accept any excuses from national or local authorities to protect Philippine democracy from any and all threats.

Since 2005

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

Word to the wise James Jimenez

spox

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here will be 20,632,642 Sangguniang Kabataan voters trooping to the polls next month. I estimate around 5 million of them will be first-time voters, including those aged 15 to 17 years old. For most—if not all—of them, this will be the first time they will see a ballot that is intended to be counted manually. To say that it will be a novel experience for them, however, is to barely scratch the surface.

It will certainly be a new experience, yes. But from the point of view of having to ensure that their votes are faithfully recorded, it will be a challenging one, as well. Having been exposed—on the news if nowhere else—to the ballots used in the automated elections, first-time voters will be approaching #BSKE2018 with preconceptions that probably won’t be 100-percent accurate. For one thing, unless these first-time voters have actually been paying attention to the news, the ballots they will receive won’t even resemble what they might be expecting.

The most obvious difference between the automated elections

ballot and the manual elections ballot will be the size. The former is very long; it has to be, because of the need to accommodate the names of all the participating party-list groups.

With Barangay and Sangguniang Kabataan Elections (BSKE) 2018 only electing 16 positions, the ballot will be decidedly much shorter.

Also immediately apparent is that the automated elections ballot will have the printed names of all the candidates, arranged by position. The names will have corresponding ovals next to them, which voters will have to fill-in, in order to indicate their vote. The manual elections ballot, on the other hand, will only feature

Birthdays and competition: What’s first?

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the position titles and blank spaces for the voter to write the names on.

Less apparent to most voters and casual observers will be the downstream effect of these two different kinds of voting procedure. In an automated election, ballots are counted automatically by the vote-counting machines. All the voter has to do is to feed the accomplished ballot into the vote-counting machine, and the automated process of scanning the ballot and recording the votes kicks in.

In contrast, the manual elections ballot will be placed inside the traditional ballot box. At the end of voting, the ballots will be taken out and the votes written on the ballots will be read out loud, one at a time, while one of the election workers tallies down the votes as they are called out.

Because the counting and recording processes are all accomplished by election workers, they can very quickly become the targets of the candidates’ ire. This makes manual counting far more interesting—if by interesting you mean stressful, long-drawn-out and, in very extreme cases, potentially harmful to election workers.

Apart from their respective content, automated election and manual election ballots can also be told apart by looking at the distinguishing features of each. The automated elections ballot will feature a row of black

Dr. Jesus Lim Arranza Continued from A1

W

ith that, I would like to greet Pastor Apollo Quiboloy a happy birthday. Indeed, you have lived and continue to live a very meaningful life. Your spiritual guidance and interventions have saved so many lives that used to be devoid of meaning, even as that quaint person in you remains to be the guiding light of your millions of followers and believers who live righteous lives.

May you then have many more happy years to celebrate your day of life and more years to help give meaning to other peoples’ lives, as well. Again, happy birthday, pastor.

What matters in life is how we live it, and not with how much we have with it. And I continue to live my life for God, my family, the industry sector that I represent as Chairman of the Federation of Philippine Industries and for the consumers, of which cause I have been fighting for years.

Thus, today’s headlines about competition being sidelined at the expense of consumers because of some lethargic government

officials, even as the Philippine Competition Commission asserts its mandate to establish a level playing field for consumers and the business sector, have brought back memories of my fight against a party-list group that now has representation in Congress, despite its being questioned in the Commission on Elections (Comelec).

I happened to be present during the Comelec hearing on LPG Marketers Association’s (LPGMA) eligibility as a party-list group, when thenComelec Chairman Sixto Brillantes asked LPGMA what sector do they represent among those listed in the

Constitution and its enabling law as qualified to have party-list representation. And, in response, an LPGMA official said they represent the professional group. But when asked further by Brillantes what professional courses have their members finished, since the constitution and its enabling laws’ list do not mention any trade group for that matter, the LPGMA representative answered again that they belong to the small professionals.

At that point, I asked, after being recognized at the hearing, that if LPGMA represents itself as a party-list group representing the professionals, why are they registered with the Department of Trade and Industry and not with the Professional Regulations Commission?

However, while I wanted to say more about the issue during the hearing, I was cut short by the committee chairman upon the LPGMA lawyer’s objection. I am perplexed at how LPGMA was able to get Comelec accreditation as a party-list group when the sector they claim to represent is not even included in the Constitution and its enabling laws’ list of qualified sectors. Isn’t there a doctrine in law that says, “What is not included, is deemed excluded?”

Will the Comelec ruling on LPGMA not open the floodgates for

rectangles arranged all around the edges. These are called timing marks and are needed for vote counting. It will also feature a long barcode running along the bottom edge.

The manual election ballots do not contain either of these features.

However, unlike in automated elections, ballot “neatness” (for lack of a better term) is important in manual elections like BSKE 2018. In an automated election, the ballot will really only be rejected if the voter tampers with the timing marks or the bar code. Writing on either of these two features renders the entire ballot unreadable by the vote counting machines. In a manual election, however, practically any writing or mark, on any part of the ballot, may result in the ballot being declared “marked” and, therefore, considered stray. With the penchant of some people to doodle—adding smiley faces or little hearts to everything —this strict rule might end up being a major source of self-inflicted disenfranchisement.

So, a word to the wise: just write down the names of the candidates you’re voting for; refrain from drawing—or “personalizing”—on your ballot in any way; and don’t tamper with the printed elements—text, illustrations (like the seal) or any of the printed lines—on the ballots.

any group of dealers, street vendors or any group engaged in business to seek Comelec accreditation as a party-list group, as well? That being the case, I can even ask the group of taho (soya), chicken and even the peanut vendors to organize themselves into a party-list group and get Comelec accreditation, based on the Comelec ruling on LPGMA. In their web site, LPGMA presents itself as an LPG marketers association that was organized so that its members will have a common voice and representation on issues that affect the industry. But the big question here is, whose interests come first for LPGMA? The National Economic and Development Authority’s (Neda) proposal to stop government regulatory agencies like the National Food Authority and Philippine Ports Authority, for instance, from being regulators and competitors at the same time is a very noble plan. After all, how can these agencies regulate with total impartiality when they are also competitors?

And if the Neda is concerned about the impact of allowing regulators to compete in the industry they regulate, would it not be more worrisome for consumers if a group of traders that practically control the supply of every household’s basic need, such See “Arranza,” A11

Agriculture/Commodities BusinessMirror

www.businessmirror.com.ph

Editor: Jennifer A. Ng • Friday, April 20, 2018

Sugar demand to remain flat due to TRAIN

P

By Jasper Emmanuel Y. Arcalas

@jearcalas

hilippine raw sugar output would post flat growth in marketing year (MY) 2018-2019, as demand for the sweetener would remain unchanged following the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law.

According to a Global Agricultural Information Network (Gain) report, the country’s sugar production would settle at 2.3 million metric tons (MMT) in MY 2018-2019, which would begin on December 1. Sugar consumption would still be at 2.25 MMT, the report noted, as sugar-sweetened

beverages become more expensive.

“Demand for sugar is expected to remain flat in MY 2018-19 as prices of sugar-sweetened beverages increase due to new taxes,” the report read.

The report estimated that total sugar consumption in the current marketing year will rise by 2.27

percent to 2.25 MMT, as industrial users veer away from imported high-fructose corn syrup (HFCS).

HFCS was slapped a higher tax under the TRAIN law.

“Post estimates sugar demand slightly higher than the Sugar R eg u l ator y A d m i n i st rat ion’s [projection] at 2.2 MMT in MY 2016-17 with consumption rising marginally to 2.25 MMT in MY 2017-18, as more industrial users begin to use local sugar due to lower excise taxes on sugarssweetened beverages vs. noncaloric and HFCS-sweetened beverages and the amended Sugar Order 3, which places additional regulations on the importation of HFCS,” the report read.

For MY 2017-2018, the Gain report projected that total raw sugar output would decline by 8 percent to 2.3 MMT, from a record-high of 2.5 MMT posted

in MY 2016-2017.

“The drop in sugar production is mostly attributed to unfavorable weather conditions, particularly during the vegetative or growth stage in many sugarcane-producing provinces, which should affect sugar content and weight of cane,” it explained.

The report said about 80 percent of total sugar produced in the Philippines is consumed locally, while the remaining volume is exported.

“Roughly 50 percent of domestic consumption is accounted for by industrial users, 32 percent by households and the remaining 18 percent by institutions [e.g., restaurants, bakeshops and hospitals],” it read.

T he Gain repor t said the country’s raw sugar exports in MY 2017-2018 and MY 20182019 “are expected to level out

to 220,000 metric tons [MT] after a bumper crop in MY 20162017.” Manila exported a total of 300,000 MT of raw sugar in MY 2016-2017 “due to record production levels.”

“The largest Philippine sugar export market is the United States, as prices under the US tariff rate quota system are normally higher than world market prices,” the report read.

Manila would still import refined sugar at around 100,000 MT in MY 2017-2018 and MY 2018-2019 “due to strong demand from food and beverage producers.” The country imported about 50,000 MT of refined sugar in MY 2016-2017, according to the Gain report.

The report was prepared by the Foreign Agricultural Service of the US Department of Agriculture in Manila.

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File photo

ered accredited commercial and in-house cold-storage facilities.

Dat a f rom t he NMIS a lso showed that total dressed-chicken inventory held in cold storages as of March 26 declined by 1.84 percent to 16,417.44 MT, from the previous year’s 16,726.13 MT. However, the figure was more than a third higher than the

12,122.44 MT recorded in the week of March 19. It was also slightly higher than the previous month’s 16,291.46 MT. More than half of the total dressed-chicken inventor y, or 9,487.27 MT, were imported.

Imported dressed chicken in the country’s cold storages as of March 26 expanded by 31.69 percent

from the 7,203.95 MT recorded a year ago.

The remaining volume was comprised of locally produced chicken at 6,930.17 MT. The NMIS said the figures did not include fresh, chilled chicken and mechanically deboned meat, as well as those already in distribution channels. The agency also

1,065 farmers from Kalinga, Eastern Samar receive CLOAs

T

said the survey covered only accredited cold-storage facilities.

The government allows traders to import pork and chicken via the so-called minimum access volume scheme of the World Trade Organization. Pork and chicken imports within MAV are slapped a tariff of 30 percent and 40 percent, respectively.

Last year meat imports rose by nearly 7 percent to a record-high volume of 691,462.564 MT due to the growing demand of Filipino consumers for processed-meat products.

Data from the Bureau of Animal Industr y (BA I) indicated that pork accounted for 44.18 percent of meat imports. Last year pork imports expanded by 10.65 percent to 305,479.806 MT, from the 2016 record of 276,066.99 MT. “Pork cuts, bellies and deboned meat constituted about 30.19 percent or [92,234.802 MT], which are mostly used by meat processors, while the 69.81 percent equivalent [213,245.044 MT] are commonly imported by meat traders, which includes fats, rind/skin and other products,” the BAI said.

Data from the BAI also showed that total chicken imports last year grew by nearly 4 percent to 244,104.419 MT, from the previous year’s 234,742.766 MT.

he Department of Agrarian Reform (DAR) announced the distribution of certificate of land ownership awards (CLOAs) to a total of 1,065 farmers in the provinces of Kalinga and Eastern Samar.

In Kalinga 745 farmers were awarded their CLOAs, proof of ownership of lands awarded by the government under the Comprehensive Agrarian Reform Program, during a simple ceremony in Tabuk City on April 12.

The awarded lands are in the municipalities of Balbalan, Lubuagan, Pasil, Pinukpuk, Rizal, Tabuk and Tinglayan.

The awarding of the CLOAs was led by Agrarian Reform Secretary John Rualo Castiriciones.

Castriciones, in a statement, said the awarding of CLOAs demonstrate the Duterte administration’s recognition of the important role of small farmers while being victims of social injustice.

He noted poverty is the culprit behind the attraction of peasants to “other ideologies.”

The distribution was graced by Undersecretary Karlo S. Bello of the Field Operations Office, who apologized for the long-overdue distribution.

The delays, Bello pointed out, were due to the long processes of land titling. The DAR, he added, is doing its best to issue titles to actual tillers to give them absolute control over their basic resource and in the process, propel progress in the countryside.

In Eastern Samar the DAR chief distributed CLOAs to 320 farmers.

The distribution was led by Bello.

The CLOAs cover a total of 614.6 hectares of agricultural land.

DAR Region 8 data revealed that of the total land areas distributed, 354.3 hectares are in the municipality of San Julian; 76.5 hectares in Maydolong; 33.8 hectares in Dolores; 32.3 hectares in Lawaan; 27.7 hectares in Giporlos; 22.8 hectares in Salcedo; 19.2 hectares in Quinapondan; 19 hectares in Balangiga; 18.7 hectares in Can-avid; 6.4 hectares in Borongan; and 3.9 hectares in Balangkayan.

The distribution of the CLOAs in Kalinga and Easatern Samar were witnessed by other DAR officials and local government units. Jonathan L. Mayuga

company is targeting replanting about 15,000 hectares this year.

Pellets from the trunks could be shipped to Japan as feedstock by renewable-energy plants, where they could replace palm oil, said Tomohide Sugino, the head of Jircas’s planning division. Renewable-energy output will increase 78 percent in the year beginning April 2027, with solar to provide

about two-thirds.

T he project can a lso benefit smallholders, who control about 40 percent of palm areas in Indonesia and Malaysia and have difficulty funding replanting, Sugino said. Changing the industry’s image as a forest destroyer would also help promote long-term consumption, he said. Bloomberg News

Imports boost PHL frozen-pork inventory in March–report

he country’s frozen-pork inventory as of March 26 expanded by 88.78 percent to 23,852.88 metric tons (MT), from 12,634.95 MT recorded in the same period last year, data from the National Meat Inspection Service (NMIS) showed.

Recent data published by the NMIS also showed that the latest frozen-pork inventory was 5.77 percent higher than the previous week ’s 22,552.01 MT. However, it was 2.82 percent lower than the 24,546.28 MT recorded last month.

O f t he t ot a l f ro z e n - p or k i n v e nt o r y a s o f M a r c h 26 , 95.05 percent were imported, or 22,671.42 MT, while the remaining volume of 1,181.46 MT were produced locally.

During the reference period, the NMIS noted that cold storages in Region 3 held the most volume of frozen-pork inventory at 8,835.55 MT, which was 4.95 percent lower than the 8,418.5 MT recorded in the week of March 19.

The figure was 18.05 percent and 165.83 percent higher than the 7,484.76 MT and 3,323.7 MT recorded volume last month and last year, respectively.

The NMIS, an attached agency of the Department of Agriculture (DA), said the frozen-pork inventory included carcass, primal and specialty cuts. The survey cov-

A9

Palm oil battling image problem, seeks to tap green-energy demand

J

apanese scientists are encouraging Southeast Asia’s palm-oil producers to chop down trees to help save forests.

Japan International Research Center for Agricultural Sciences (Jircas) and IHI Enviro Corp., a subsidiary of IHI Corp., have developed a way to process scrapped palm trees into methane gas and wood pellets to be sold as feedstock to power generators. The system intends to help palm companies earn income while waiting for new trees to mature and curb their reliance on expanding plantations to boost output.

Concerns about palm oil’s environmental impact have prompted the European Union to propose restricting its use in renewable fuels after 2020. Farmers in Malaysia and Indonesia, which account for 85 percent of supply, have been accused of illegally using slashand-burn methods to clear land for plantations, destroying rain forests. Producers typically need to replant oil palms after a couple of decades when they become unproductive and plant small areas

slowly because they won’t get any revenue from those trees for three to five years.

“Our project is aimed at reducing the negative impact on the environment of the palm-oil industry, and making it sustainable,” Akihiko Kosugi, project leader at Jircas’s biological resources division, said in an interview. Currently, scrapped trunks are mostly left on plantations and their high sugar content mean they became sources of harmful insects that spread diseases to living trees, according to Kosugi.

Under the system, trees older than 25 years are cut down and replaced, reducing the need to expand plantations. A pilot plant in Kluang in Malaysia’s Johor state started operations this year with the capacity to produce 10,000 tons of pellets a year from a maximum 50,000 tons of old palm trunks.

Jircas estimates about 29.5 million tons of old palm trunks will be available annually in Malaysia if 5 percent of its areas are replanted.

Trees experience a sustained drop in yields after 20 years, according to Bloomberg Intelligence

analyst Alvin Tai. Older palms are also more vulnerable to fungi, which causes rot and eventually kills them. The share of trees more than 19 years old was about 30 percent in both Malaysia and Indonesia last year, according to Aurelia Britsch, head of commodities at BMI Research, citing data from the 11 top producers.

As well as making pellets, sugar from scrapped palm trunks can generate methane gas for power generation. Sugar from 1 ton of trunks generates an average of 96 kilowatts of power a day, according to Jircas. The system costs more than ¥1 billion ($9.3 million) to buy and install and Jircas and IHI Enviro are also considering offering the technology for a licensing fee.

Expansions

Acquiring greenfield plantation land “is very rare nowadays due to the scarcity of suitable land,” Sime Darby Plantation Bhd., the world’s largest palm-oil grower by area, said in an e-mail.

The average cost of replanting on an existing plantation is

A worker loads a truck with palm fruit at a plantation in Malaysia. Sanjit Das/Bloomberg

around 15,000 ringgit ($3,856) a hectare, Zakaria Arshad, group chief executive officer of Felda Global Ventures Holdings Bhd., said in an interview. Greenfield expansion, including building mills and infrastructure, costs about 32,000 ringgit. Acquiring a brownfield site can cost between 50,000 ringgit and 80,000 ringgit per hectare, he said. The

2nd Front Page BusinessMirror

A12 Friday, April 20, 2018

Resorts in Boracay allowed to renovate during closure time B

www.businessmirror.com.ph

MWSS assures Metro residents of sufficient water during summer

By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

ORACAY ISLAND, Malay, Aklan—Resort owners here will be allowed to make light renovations in their establishments while the island is closed for six months.

This was the assurance made

by Tourism Assistant Secretary for Public Affairs Frederick M. Alegre in an interview with the BusinessMirror. “While the island is closed, it is also the time for [the resorts] to upgrade. We just want to know the specifics of their renovation plan,” he said.

These can include painting, retiling, refurbishment of interiors, changing beds, among others. As such, resort owners are allowed to bring in supplies, materials, equipment and people.

He stressed, however, major renovations, which include actual construction work like adding of rooms or buildings that will change the structure of the resort, are strictly prohibited. The Malay local government has suspended new constructions on Boracay and has not been issuing any business or renovation permits.

Resort owners are, thus, encouraged to write to Tourism Secretar y Wand a Cora zon T. Teo, through Alegre, to inform them of the renovation plan and what supplies are expected to be brought on the island, as well as the identities of the people who will be involved in the work.

Other business establishments may course their requests to Task Force Boracay, which will set up a central coordinating body in Caticlan. “They just need to coordinate with the interagency task force on the schedule and scope of their upgrade work,” Alegre said.

He also said “there may be interruptions in services, but this will

NFA. . .

Continued from A1

if managed properly and given guidance,” Piñol, who now chairs the NFA Council (NFAC), told the BusinessMirror on Thursday. Piñol added the marketing functions of the NFA would even be more vital in a post-QR regime, when imports are expected to flood the domestic market.

The Department of Agriculture (DA) chief echoed the sentiment of NFA Administrator Jason L.Y. Aquino, who wanted to retain the function of the food agency even after the rice QR is removed. In early April Aquino argued that the NFA’s food-security role should even be strengthened under a post-rice QR regime.

“Food security should never be left to the mercy of trade regimes. Rice is the most basic food of Filipinos. In an era of boundless influx of rice imports into the country, the government should be more vigilant about maintaining adequate levels of the staple and to make it constantly available and

150

The number of stakeholders who attended the workshop conference, where government agencies presented their respective action plans to oversee the closure of Boracay be pre-announced to the residents, hotels and resorts.”

This developed as the task force overseeing Boracay issues will be finalizing and releasing the guidelines gover ning the island’s closure on Monday, April 23, or three days before the latter finally shuts down all tourist activities.

Alegre said these guidelines will include changes in swimming areas for the locals, media coverage, exemptions from the no-visitors rule, among others. “That was the point of the workshop conference last Tuesday. We’re willing to listen and amend the rules and guidelines as needed,” he stressed.

About 150 stakeholders attended the workshop conference at Savoy Hotel, Newcoast, where they listened to several government agencies present their respective action plans to prepare and oversee the closure of Boracay Island. President Duterte ordered the island’s closure for six accessible to all at affordable prices,” he said in a statement.

“The NFA believes that there should always be a National Rice Reserve even under a time of surplus because rice production is never assured or certain at all times. This would also spare the country from exposure to price volatility brought about by global political and economic shifts,” he added.

Economic managers have been vocal in removing the commercial and marketing functions of the NFA once the country’s rice importation is tariffied, leaving it with its buffer-stocking role.

“The NFA should really just focus on ensuring adequate buffer and regulation [of the market]. They should no longer be involved in buying [and] trading,”Socioeconomic Planning Secretary Ernesto M. Pernia told the BusinessMirror in February.

In the meantime, the government has put on the back burner the restructuring of the NFA to focus on converting the QR into tariffs. National Economic and Development Authority Assistant Secretary Mercedita Sombilla said the government will restructure the NFA

Vendors in Boracay continue to ply their wares and make the most out of the remaining days till the island closes shop over the next six months. The local government of Malay estimates some 36,000 workers, including those from the informal sector like the ambulant vendors, massage therapists, tricycle drivers and the like, will be affected by the temporary closure. President Duterte has ordered the shutdown starting April 26 to give way for its rehabilitation. Ma. stella F. Arnaldo

months starting April 26 to give way to rehabilitation efforts by the national government.

For one, Alegre said, they will likely approve a new designated swimming area for locals, which was earlier identified as Angol Point. During the open forum with Task Force Boracay executives during the workshop, Boracay Foundation Inc. board member Leonard Tirol pointed out that Angol Point is “full of coral reefs and has no lifeguard on duty.”

He also underscored that “it would be difficult for an ambulance to go there, in case there are any accidents involving locals,” as the path is too narrow for vehicles.

Alegre also announced “there will be no restrictions on media, at least for the first week after the closure, from April 26 to May 2.” He said a media center will be set up

at the jetty part and on the island, “so that those unable to go back to Caticlan due to transport issues have a place to stay.” Earlier, the task force restricted media access to the island between 8 a.m. and 5 p.m. only.

But he said the task force will still be meeting to discuss if the no-restrictions coverage can be extended after May 2, and added the rule on government-escorted coverage may have to remain.

“Remember that there will be a lot of construction and demolitions happening on the island; we don’t want anyone to get into any accident.”

Alegre reiterated that media outfits must submit their list of reporters and crew members who may be assigned to Boracay for press coverage so the Department of Tourism can accredit them.

right after the law removing the QR on rice is passed by Congress.

An NFA official told the BusinessM irror that removing the commercial power of the grains agency while retaining its buffer-stocking role is “problematic” as its stockpile could rot due to the removal of possible disposal channels.

“Rice should be distributed every six months because it cannot stay for so long as its shelf life is only limited. So, if we only have a [buffer stocking] role, how can we sell or dispose our stocks by the sixth month when we need to refresh our stockpile?” said the official, who requested anonymity.

“So the stocks could rot. That’s why there is a need for other schemes, such as selling, to dispose the stocks [especially if there is no calamity],” the official added. The DA chief said he also wants to expand the NFA’s functions to become the country’s trading agency for agricultural commodities.

“My personal view is that the NFA has been perceived as a rice agency, which isn’t the case. The World Trade Organization recognizes the NFA as

the only state trading agency of the Philippines,” Piñol said.

“This means that the NFA could trade on behalf of Filipino farmers and fishermen, as farmers and fishermen are usually the ones organizing themselves and finding the right market for their products,” he added.

Piñol said the NFA could even earn more revenues by functioning as a state trading agency, similar to India’s Agricultural and Processed Food Products Export Development Authority (APEDA) and Hanoi’s Vietnam Southern Food Corp.

“Government help in consolidating the products of farmers and representing them in global trade is minimal. Why can’t the NFA perform that function?” he said.

“Maybe the NFA will earn more if it will act as a consolidator and trading agency of Filipino farmers and fishermen who only need assistance from the government,” Piñol added.

The agriculture chief said a technical working group would study the feasibility of his proposal and make recommendations to the NFAC.

In this March 6 residents of Las Piñas line up to get free water from a concessionaire’s truck during a water-service interruption. The Metropolitan Waterworks and Sewerage System has assured Metro Manila residents there will be no water shortage during summer. NONIE REYES

By Jonathan L. Mayuga @jonlmayuga

T

he onset of the dry season has set off alarm bells among Metro Manila residents who fear the possibility of experiencing water shortage during summer.

For now, however, there’s nothing to worry about, according to the Metropolitan Waterworks and Sewerage System (MWSS).

Water reserve in Angat Water Reservoir, the single major source of raw water for Metro Manila’s more than 12 million people, is enough to last throughout the dry season, MWSS Administrator Reynaldo V. Velasco said.

Interviewed via e-mail, Velasco allayed fears of an impending water shortage despite the onset of the dry season, assuring customers of Maynilad Water Services Inc. and Manila Water Co. Inc. that there will be adequate supply of raw water to meet their customers’ demand.

“Since there is no occurrence of El Nino and the NWRB [National Water Resources Board] has granted full allocation, 46 cubic meters per second [46 cms] or 4,000 million liters per day [4,000 MLD] to MWSS, there will be no shortage,” Velasco said.

“Based on the Operation Rule Curve for Angat Reservoir, the actual water elevation as of April 18, 2018, is 198.53 meters, which is above the Upper Rule Curve elevation of 193.47 meters, thus, ensuring sustainable supply this summer season,” he added.

This is enough for 120 days even with “zero inflow” or rain pouring in to replenish the supply in Angat, he said. Aside from supplying raw water for the MWSS, Angat also provides irrigation water for farms in Pampanga and Bulacan. Current water allocation sought by the two companies to ensure 24/7 supply of potable water to their respective customers is 2,400 MLD for Maynilad and 1,600 MLD for Manila Water.

Velasco noted that Angat Dam is the current source of 4,000 MLD of raw water. Maynilad also draws 200 MLD of raw water from Laguna de Bay, which it processes at the Putatan Water Treatment Plant.

‘Water supply war’ averted The MWSS chief has acted to prevent a brewing “war” between the two water contractors and agents of the MWSS. “The problem between the two concessionaires has been resolved,” he said. This, even as the MWSS is considering the idea of taking control over the valve that controls the release of water.

Per the concession agreement, Maynilad is allocated a 60-percent share of water, while Manila Water gets 40 percent. “60-40 is not about up to the last decimal,” Velasco said.

“Even Manila Water and Maynilad admitted that they have already discussed the issue. One has to give way to the other. If Manila Water is at its peak hours, Maynilad should give way, same thing with

Manila Water,” he said.

Adequate water allocation NWRB Executive Director Dr. Sevillo D. David Jr. also assured the public, following a meeting with the concessionaires and other water officials, of adequate allocation of water supply as requested by the MWSS chief as early as January this year.

Manila Water Head of Corporate Communications Jeric Sevilla also said the company remains positive that the issue of raw water allocation will be resolved using the proper channel.

“Continuous adjustments are being fine-tuned that will be mutually beneficial to all parties and to the best interest of our customers,” he said.

Maynilad Vice President for Government Relations Anette de Ocampo, likewise, welcomed the statement of the MWSS chief, saying she remains optimistic the issue will be put to rest.

She added Maynilad is also concerned with the water-allocation issue, which has to be resolved so as not to derail the good relations that Maynilad has developed with the MWSS and Manila Water over the last 10 years.

Velasco believes both concessionaires can resolve their differences without the MWSS instituting drastic measures.

Water security program Velasco’s assurance for adequate water supply covers the long term. “’We have enough water supply not only during the summer season, but in the next 20 to 25 years,” Velasco said.

According to Velasco, the administration of President Duterte has put in place a continuing Water Security Program that is parallel to the demand with a provision of about a 7-percent to 10-percent buffer.

He added that concessionaires are required to submit continuous supply-demand projections to determine the amount to be invested in the water infrastructure.

For a program that is continuing, timelines are very useful, according to Velasco.

He said the government may not be able to finish all its projects in 2022, but, at least, it can start and finish the Kaliwa Dam Project that will boost fresh water supply for households and other water consumers.

The Kaliwa Dam project’s main component is the construction of the Kaliwa Dam in Barangay Pagsanjan, General Nakar, Quezon, and Barangay. Magsaysay, Infanta, Quezon, which has 600 MLD capacity, and the 2,400 MLD capacity of its watersupply tunnel.

Other projects under the Water Security Program of the Duterte administration are the Rizal Province Water Supply Improvement Project being undertaken by Manila Water, the Angat Water Transmission Improvement Water, Bulacan Bulk Water Supply Project, and the Sumag Diversion and Relocation Project.

The MWSS is constantly implementing improvements to the tunnels and transmission lines to avoid water service interruption for both concessionaires, Velasco said.