Personal and Institutional Integrity By Henry J. Schumacher
A
Nuvolanevicata | Dreamstime.com
person is said to have integrity if his or her actions are consistent with his or her principles, and his or her actions, beliefs, methods, measures and principles all come from a single core group of values. An individual’s value system provides a framework within which the individual acts in ways that are consistent and expected. »continued on A2
media partner of the year
United nations
2015 environmental Media Award leadership award 2008
BusinessMirror A broader look at today’s business
www.businessmirror.com.ph
n
Tuesday, April 25, 2017 Vol. 12 No. 194
Sea code, regional trade deal to top Asean agenda
C
By Catherine N. Pillas @c_pillas29 & Elijah Felice E. Rosales @alyasjah
hina may have soften its aggression in the disputed South China Sea, but the superpower’s interest in the resourcerich area is seen as one of the top issues that the region’s leaders will tackle at the Asean Summit in Manila this week, an international relations expert said.
16
The number of Regional Comprehensive Economic Partnership negotiating countries Businessmen, on the other hand, expect to see a major breakthrough in the negotiations on the Regional
2016 ejap journalism awards
business news source of the year
P25.00 nationwide | 5 sections 28 pages | 7 days a week
President Duterte’s infrastructure program
the entrepreneur
I
Manny Villar
’m very optimistic about the success of President Duterte’s infrastructure program. In addition to the aggressive stance of the Department of Public Works and Highways (DPWH) and the Department of Transportation, private groups are coming up with their own ideas and submitting these for government approval. Private-sector participants in government-initiated projects, such as those under the Public-Private Partnership (PPP) Program, rely only on what the government decides, but unsolicited proposals rely on the creativity of the private sector.
See “Sea code,” A2
Continued on A10
LOPEZ VOWS TO DELIVER BMReports JUSTICE TO MARCOPPER PHL explores paths to modern defense VICTIMS 2 DECADES LATER By Rene Acosta
By Jonathan L. Mayuga
T
@jonlmayuga
S
ANTA CRUZ, Marinduque— It happened more than 20 years ago. For the residents of Santa Cruz town in Marinduque, the mining disaster that flooded their communities, destroyed their farms and fishing grounds, and exposed people to poisonous chemicals, the suffering is getting worse by the day. Their only consolation is the thought that the environmental catastrophe could just be a blessing in disguise—the government was forced to stop mining operations in the area for good. Environment Secretary Regina Paz L. Lopez gave them hope that they will finally get what they’ve been striving for since 1996—justice. Until today, residents of Santa Cruz said they still suffer from loss of livelihood and health problems because of toxic pollution from the mines operated by Marcopper Mining Corp. Around 78 people have been affected because of exposure to lead, a toxic heavy chemical, in Santa Cruz town. Several people have already died from lingering diseases caused by exposure to lead. “I want Marcopper to pay. I want justice for the people of this town,” Lopez said. Lopez met with residents of Santa Cruz at the Marin-
LOPEZ: “I am going to make Marcopper pay.”
duque Capitol Convention Center on Monday to talk to local officials and communities affected by mining. She said no amount of money would bring back the lives ruined by Marcopper. But, nonetheless, she said it would help the people get justice.
Livelihood lost
Sabino R aginio, 62, of Ipil, Santa Cruz, said the mining disaster destroyed the lives of the people. “Our fishing ground was covered with mud. We can’t even see any fish in our fishing ground. Our farms were buried in mud and our river, where water used to flow, died,” said Raginio, president of Samahan ng Maliit na Mangingisda sa Barangay Ipil. See “Lopez,” A2
PESO exchange rates n US 49.7880
@reneacostaBM
Part Two
HE pre v iou s ad m i n is tration has endowed the Armed Forces of the Philippines (AFP) with more than P65 billion worth of equipment, and allowed the AFP to make a giant leap from its decrepit and vintage assets. However, the country’s modernization spending still pales in comparison with its military neighbors in Southeast Asia. According to the Stockholm International Peace Research Institute (Sipri) and the United States-based Center for Strategic and International Studies (CSIS), while the military has been given its biggest budget yet during the past administration, the AFP still sits near the bottom in terms of acquisition when compared with the other Asean members. It even occupied the last spot when compared with regional military powerhouse, such as China, Indonesia, Singapore and Thailand. According to an earlier assessment of the CSIS, the country’s defense spending in 2014—the year that the Department of National Defense was on a procurement binge for the military—was at $3.3 billion. This amount was only slightly higher by 2 percent from 2013. The year 2014 was historic for the military, as it was during this period when the AFP got hold of the biggest modernization funds
This file photo shows members of the Armed Forces of the Philippines (AFP) in a parade at the AFP Headquarters in Quezon City. It was during the martial law years when the AFP became the object of envy not only by its Asean neighbors, but even by the top militaries in Asia because of its advanced assets and equipment, making the Philippines an Asian military power. NONOY LACZA
in its entire history. The country’s defense spending that year represented about 9 percent of the total defense spending in the region. The amount also represented about 1.1 percent of the country’s GDP and about 6 percent of the total government spending. However, this was still below the Asean average of 8.8 percent. The CSIS, a think tank, said that between 2010 and 2014, Manila’s
defense spending skyrocketed by about 35 percent, which was near the regional average of 37.6 percent during that period.
Stale spending
FROM the time of the administration of Fidel V. Ramos up to the term of former President Gloria Macapagal-Arroyo, modernization spending was stale. Even the paltry funds were used for the
repair of the military’s World War II vintage assets, instead of being spent for acquisition, as originally earmarked. The failure, or more appropriately the neglect of the three previous administrations—including the aborted term of former actor and President Joseph E. Estrada—to allocate funds and pursue the modernization of the Continued on A2
n japan 0.4504 n UK 63.9527 n HK 6.4041 n CHINA 7.2295 n singapore 35.7441 n australia 37.7791 n EU 54.3834 n SAUDI arabia 13.2757
Source: BSP (24 April 2017 )
BMReports BusinessMirror
A2 Tuesday, April 25, 2017
www.businessmirror.com.ph
PHL explores paths to modern defense Continued from A1
military as mandated by law, led to the degeneration of the AFP as the least developed among the militaries in the region. It was different during the martial law years, when the AFP was the object of envy not only by its Asean neighbors, but even by the top militaries in Asia because of its advanced assets and equipment, making it an Asian military power. T he Philippines even beat Japan by becoming the first country outside the US at that time to have F-5 fighter planes. Incidentally, it is now Tokyo that is among the list of countries helping Manila in its modest capability upgrade program.
The country was so powerful under the administration of the late-dictator Ferdinand E. Marcos that when it declared ownership of the Pag-asa Island, not a word of protest was heard from China. In fact, Scarborough Shoal, which is now under the de-facto control of Beijing, used to be only a target range for the Philippine military.
Indonesia rolls
THE years between 2010 and 2014 were considered a “golden period” for military spending in Southeast Asia as it showed a steady increase in military expenditures. The CSIS said the Asean spent a total of $38.2 billion on defense in 2014. For the years 2013 and 2014, the biggest increase in defense
spending was registered by Brunei with 28.2 percent, followed by Cambodia and Vietnam at 14.4 percent and 14.1 percent, respectively. But overall, and from 2010 up to 2014, Vietnam led the pack of the biggest defense spenders with 59.1 percent, although all Asean countries posted increases in their defense budgets. Hanoi was followed by Indonesia at 50.6 percent. Vietnam, a claimant in the South China Sea, is giving much emphasis to the capability of its military with the end goal of having a powerful and independent armed forces as it sticks to the three “No’s”. The latter refer to “No to foreign military bases”, “No to military alliance” and “No to military reliance with other countries”.
The CSIS said the average military expenditure in Southeast Asia as a percentage of GDP in 2014 was at 2.2 percent, ranging from 0.8 percent (Indonesia) to 4.3 percent (Myanmar). The American think tank said Indonesia has posted the largest increase in military spending from 2001 up to 2014 in Southeast Asia, with disbursements spiking from under $1 billion to over $7 billion.
Thai funds
THE Washington, D.C.-headquartered group noted that the sharpest increase occurred after former President Susilo Bambang Yudhoyono came into office in October 2004, wherein Jakarta’s military spending rose 290 percent in between 2005 and 2013. The spending, however,
Personal and Institutional Integrity A value system may evolve and significantly change but must retain integrity if those who espouse the values account for and resolve the inconsistencies. One essential aspect of a consistent framework is its avoidance of any unwarranted (arbitrary) exceptions for a particular person or group—the notion of double-standards effectively destroys a person or group’s label of integrity. It is important to recognize that a leader of an organization is imbued with personal integrity, because “the personal should translate into the institutional”. This is the principle of leading by example. But it is imperative that at the institutional or organizational level, all members and stakeholders are bound and expected to abide by the same framework
Sea code. . .
Continued from A1
Comprehensive Economic Partnership (RCEP) agreement, plus a possible Asean-wide endorsement of the Asian Infrastructure Investment Bank (AIIB)—both China-led initiatives—showing the irony in the China-Asean relations. Previous Asean meetings failed to produce a document that sends a strong and united stand on the sea row.
Sea conduct
Maria Fe Villamejor-Mendoza, dean of the University of the Philippines National College of Public Administration and Governance, told the BusinessMirror
Continued from a1
of values, beliefs and norms of behavior. This is why the Integrity Pledge, the Integrity Initiative encourages companies and individuals to sign, includes the obligation to create a “Common Code of Conduct”. The goal of establishing a community of integrity is, as we all experience, full of challenges. It needs a well-understood set of rules that are observed with care on a sustained basis. It entails the participation of the whole communities and networks that mutually reinforce positive behavior toward more transparent and accountable systems and processes. The mission of the project “Integrity for Jobs” (I4J) is to create integrity mechanisms and support systems in the local government setting that will achieve
greater visibility and trust for investors to locate in those local government units (LGUs) and create jobs. The following general notes and observations may be treated as essential considerations and models in building a praxis and culture of integrity: ■ Good leadership—it is highly imperative to be able to identify leaders with vision and who are highly regarded in the community. ■ Participatory methods— there is a need to obtain the involvement of stakeholders; in the public sector, the participatory activities are very important in the implementation of projects and programs at the level of LGUs. A.) Participation in the integrity Initiative and adoption of its mechanisms: 1. Tone from the top-management of accredited firms declare
their adoption of goals to promote integrity, a level playing field, fair market conditions, inclusive growth and sustainable development; 2. Accredited companies and institutions sign the Integrity Pledge; 3. Voluntary self-assesments help in the improvement of integrity standards of their organization; 4. Third-party validation has led to more robust systems that are recognized in the context of best practices in the business community; and 5. Recognition and certification as tools to establish and promote LGUs as preferred destination for investments or endorsement for incentives. ■ Integrity circles (ICs)—at the local community level, the creation of ICs will be applicable to all par-
the code of conduct in the South China Sea is one of the agenda the Asean member-nations will most likely put on the table. Since 2010, China and the Asean states have been trying to reach an agreement on the set of ground rules that would guide the navigation and exploration of resources in the contested waters. Brunei Darussalam, Indonesia, Malaysia, the Philippines and Vietnam have all asserted claims in the South China Sea, which is not only rich in marine life but also in oil and gas deposits.
negotiating position. On Monday efforts by the BusinessMirror to get a statement from the Palace on what set of agenda the administration has calendared for the Asean Summit that the Philippines is hosting did not result in any intelligent response from President Duterte’s officials. Communications Secretar y Martin C. Andanar said in a text message he is deferring to Presidential Spokesman Ernesto C. Abella regarding the matter. However, as of press time, Abella has not yet replied to the BusinessMirror’s query. His office was also waiting for Andanar’s statement.
“substantial” conclusion of the RCEP during the Philippines’s hosting of the Asean meet this year. Lopez said last month the 10 Asean members and their six free-trade agreement partners were negotiating on the coverage of tariff lines that will be covered by the RCEP. Like other free-trade agreements (FTAs), the RCEP will dictate how many tariff lines will be slashed to zero upon the agreement’s entry into force, and how many goods will be scheduled for gradual tariff elimination at a later date. Late last year during meetings of the RCEP trade ministers, there were some concerns on the commitments on the coverage of goods, services and investments. This was mainly due to the ongoing negotiations between two large consumer markets— China and India. India’s increasing goods trade deficit with China has proven to be a sticking point in committing for wider entry of products from the China. The 16 RCEP negotiating countries (Asean nations plus countries they’ve already concluded FTAs with) account for over a quarter of the world’s economy, estimated to be more than $75 trillion. Should the RCEP’s text be concluded this week, it’s likely entry into force would be next year.
Palace officials clueless?
It’s either Malacanang is not aware of the agenda that the Philippines will be pushing at the summit or it does not want to telegraph its
RCEP
Trade Secretary Ramon M. Lopez has similarly targeted for the
AIIB
There have been no indications on an Asean-wide endorsement of the AIIB, although the financial institution has already indicated interest in funding infrastructure projects in Asean shareholders, such as Thailand and Indonesia. The AIIB is an international financial institution that aims to support the building of infrastructure in the Asia-Pacific region. It has 57 member-states, has a total capitalization of $100 billion, and was proposed as an initiative by the Chinese government. In the Philippines the AIIB has
decreased by nearly 5 percent in 2013 and 2014. “In 2014 Indonesia accounted for 18 percent of all of Asean defense spending,” a CSIS report said. “Military spending accounted for 4.1 percent of total government spending in 2014, less than half of the regional average of 8.8 percent.” The center founded in 1962 by Admiral Arleigh Burke added that Indonesian defense spending as a percentage of GDP was the lowest in the region at 0.8 percent, “well below the average of 2.2 percent.” However, the CSIS noted that the Indonesian parliament has announced a plan to increase Indonesia’s defense spending to $15 billion by 2020, which is
ties that have a stake in the development of the community. The ICs are very helpful sounding boards, especially in pinpointing priority areas in administrative procedures and local governance that can be improved and enhanced. ■ I mpro v i n g pro c e s s e s — among the priorities of the I4J project are simplified administrative and regulatory processes, and the establishment of more transparent systems and improved processes in business registration and promotion in the local level; important is also that business policy is established for periods longer than three years. In the end, a community imbued with personal and institutional integrity will be assured of attracting more sustainable investments and more entrepreneurs. This is what will lead to more jobs and in the long run, lower rates of poverty—truly a win-win solution for everyone. pledged to cofinance the bus rapid transit system and a flood-control management project with other multilateral funding institutions.
Regional integration
Villamejor-Mendoza, who coedited the research compilation Building Inclusive Democracies in Asean, noted there might also be a focus discussion on the economic integration of the region. The Asean Economic Community (AEC) is the bloc’s aspiration toward a single market and production base, a highly competitive region, with equitable economic development and a full integration into the global economy, the Asean investment web site described. Several agreements have already been signed to realize the fulfillment of AEC, including the Asean Trade in Goods Agreement, the Asean Framework Agreement on Services and the Asean Comprehensive Investment Agreement. These agreements seek to facilitate the movement of goods, services, investments, capital and skilled labor within the region. Aside from this, it also aim to promote trade and investment among member-nations, alongside the expansion of regional production sharing and network. Villamejor-Mendoza added that the region’s leaders will most probably discuss the issue of piracy in the seas for the protection of maritime services and trade vessels. Addressing the problem on piracy will suffice the Asean Roro Initiative, which will be launched on Sunday. The Asean Roro Sea Linkage Route intends to establish an interstate road network between the Asean nations for the easy access to key markets and reduction of transport costs. The formal meetings of the A sean Summit w ill begin on Wednesday and will end on Saturday. This year’s summit is themed “Partnering for Change, Engaging the World”.
twice its 2015 level. Meanwhile, Thailand occupied the list of having the third-highest defense budget in Southeast Asia in 2014, with the amount pegged at $5.73 billion, representing a 15.5- percent increase in defense spending between 2010 and 2014. The CSIS said in April 2015, the Thai government proposed a $6.3billion defense budget for 2016, or about 8 percent of the country’s total state expenditures. In January this year Jane’s by IHS Markit Ltd. reported that Thailand’s military government has agreed to appropriate $383 million to support its Navy’s plan to acquire the first of its three S26T submarines from China. To be continued
Lopez. . .
Continued from A1
Lifetime of health problems
Barangay Santa Cruz, which hosts Marcopper, was the worst affected by the leak from the mine’s tailings pond. The 27-kilometer Boac River was declared biologically dead because of the accident. “Until now, we have to go further out at sea to fish. We get by, but that is because we have to survive,” he said. He added that before the mining disaster, his small fish trap—locally called baklad—can yield 10 kilos a day. Now, he said he had to spend for gas for his banca and risk his life every fishing expedition for almost the same volume of fish. Lopez said some people suffered because of lead exposure. Among them is 29-year-old Melody Garcia, who suffered brain damage. Her father, Nicanor Garcia, 54, said his daughter was living a happy life as a kid. It was too late, he said, when they found out that lead had already started to affect her daughter’s brains. “Doctors at the Philippine General Hospital told us to observe. They said low level of lead was found in her system. So we observed. Later, help from the local government stopped,” he recalled. In Barangay Ipil, he said they know something was wrong because fish at tambak, an area where Marcopper dumps wastes, were dying. He said he and his family don’t eat dead fish, but he did not know that even those fish they caught alive were already contaminated. “Sometimes, she swims with friends. I couldn’t stop her and I wasn’t even aware of the danger,” he said Peter Manuba, 66, has a different story. He is spending a life of misery now because of skin disease. He has to spend money for a skin disease that appears to have no cure. His son, Wilson, about 25 years younger than him, suffered more than he did. “His foot had to be amputated. His wife left him because of his skin disease. Last June, he died,” Manuba said. He recalled that he and his son got the skin disease from fishing, long before the 1996 Marcopper mining disaster. “Even before the leak, we are already suffering because of Marcopper. We had this because our water was polluted from mine wastes.” His son, he said, obtained a cut in the left foot while docking his banca. But since then, the wound never healed and it only got worse and worse. “It became rotten,” he said. He also had skin disease showing in both palms and both feet. He said never did any of his fellow residents got help from Marcopper. “I asked Assistant Secretary Galo Martinez [special concerns] to conduct an inventory of all the people who got sick and who lost their livelihood. I am going to make Marcopper pay,” Lopez said. During the dialogue, residents demanded justice and indicated they want Marcopper to pay for its crime. Lopez said she will initiate criminal and administrative charges, and help residents file a class suit against the mining company.
news@businessmirror.com.ph
The Nation BusinessMirror
Bandits condemned for beheading soldier By Darwin Wally T. Wee Philippines News Agency
Z
AMBOANGA CITY—Various sectors on Monday condemned the beheading of the Moro soldier who was seized by Abu Sayyaf bandits last week in Sulu province. Autonomous Region in Muslim Mindanao Gov. Mujiv Hataman said the execution of Staff Sgt. Anni Siraji, a Moro National Liberation Front (MNLF) combatant-turnedsoldier, just showed the need for the government to exert all efforts to end the Abu Sayyaf problem. “On behalf of the Bangsamoro people, the leadership of the Autonomous Region in Muslim Mindanao [ARMM] condemns in the strongest terms the beheading of Staff Sgt. Anni Siraji,” Hataman said. “Siraji is the latest victim of what has become a series of indiscriminate acts of terrorism by the Abu Sayyaf, killing even our fellow Bangsamoro,” Hataman added. He described the recent atrocity as “acts of violence, acts that go against the grain of our humanity, which continuously hamper our efforts toward peace and justice within our shores.” “These bandits—cowards who have no honor and no shame—have betrayed the cause that our most faithful mujahideens have fought for. These terrorists have no claim to the values of Islam, nor to the brave and dignified history of our people,” he said. ARMM’s Darul Ifta (Fatwa Council) said in a statement that the recent atrocity of the Abu Sayyaf has showed their brutality and disregard to the teachings of Islam. “The ARMM Regional Darul Ifta strongly condemns this inhuman and un-Islamic act by the Abu Sayyaf Group [for the] beheading of brother Anni Siraji,” the group said. Government troops found last Sunday the headless body of Siraji a few kilometers where the Abu Sayyaf bandits abducted him on Thursday in the town of Patikul. Siraji is assigned with the Army’s 32nd Infantry Battalion and a native of Sulu. He joined the military
through the integration program after the government and the MNLF signed a peace agreement on September 2, 1996. “While Siraji was a soldier, he was an MNLF member who decided to trade his rifle as a fighter to become a peacemaker and an agent of development to his fellow Tausugs,” Lt. Gen. Carlito Galvez Jr., Western Mindanao Command chief, said on Monday. Galvez said the military will sustain the military operation against the Abu Sayyaf in line with the order of President Duterte to finish off the Abu Sayyaf in six months from January. The victim was the third hostage that the Abu Sayyaf bandits beheaded this year. In Manila the Armed Forces warned Abu Sayyaf bandits that they would suffer the same fate as their companions who were killed by government forces during a series of encounters in Bohol. The killed bandits were members of the estimated 11-man band of Abu Sayyaf subleader Muamar Askali, alias Abu Rami, who made an incursion in Inabanga, Bohol, on April 10, reportedly to abduct some tourists for their kidnap-forransom scheme. However, this attempt fizzled out, as they were neutralized by responding government forces resulting in the death of Askali and three other bandits on April 11. “The military has sent a very strong message: Do not attempt to propagate your nefarious activities,” said the Armed Forces chief of staff, Gen. Eduardo Año. “You will suffer the same fatal consequences as these terrorists for attempting to bring in terror and havoc to this tranquil province of Bohol—or in other places in the country for that matter,” he added. In a series of encounters in Barangay Bacani, Clarin town, on April 22, four bandits were killed. The military said that at 12:50 p.m., Joselito Milloria, a former villager of Inabanga who became a Muslim convert (also known as Abu Alih) and later guided the bandits to his former hometown, was the first to get killed. With Priam F. Nepomuceno
Editor: Dionisio L. Pelayo • Tuesday, April 25, 2017 A3
Luisita farmers set to assert control over sugar estate
T
By Marvyn N. Benaning | Correspondent
ARLAC CITY—Hacienda Luisita farmers and agrarian-reform beneficiaries will take back what is rightfully and legally theirs— portions of lands fenced off by the estate management and a big commercial bank in Barangay Balete here.
The action, supported by various organizations, marks the fifth year of the final and executory Supreme Court (SC) order that revoked the stock distribution option (SDO) in Luisita and mandated the distribution of the 6,453 hectares of the sugar estate. Hacienda Luisita was among the haciendas and big landholdings exempted from actual land distribution under the Comprehensive Agrarian Reform Program of the late President Corazon Cojuangco-Aquino. The farmworkers will assert and attempt to break the 1-kilometer fortified barrier put up by the bank and launch a bungkalan, or collective cultivation, as an assertion of
their claim to the lands. “We are taking back what is ours. We are taking back control of the lands that the Cojuangco-Aquinos have illegally usurped for more than half a century,” said Renato Mendoza, secretary-general of the Alyansa ng Magbubukid sa Asyenda Luisita. The occupation assertion is part of the series of actions of farmers and land-reform advocates to challenge the continued resistance of the Cojuangco-Aquinos against actual land distribution in Hacienda Luisita. The bank, as ordered by the family of former President Benigno S. Aquino III, has posted a big signage outside the property dismissing the Department of Agrarian Reform order canceling the illegal land-
use conversion of a portion of the Luisita lands. “Assertion of our right to the land is the way to proceed with actual land distribution and farmers’ installation on the farmlands,” Kilusang Magbubukid ng Pilipinas Chairman Joseph Canlas said. On March 24, 2016, the DAR issued an administrative order partially revoking the conversion of 384 hectares of land that was illegally converted and sold by the Luisita Land Corp. to the bank in 2004, a few days after the Hacienda Luisita massacre that killed seven farmers. “Despite having an agrarianreform secretary from the peasant sector and the government’s firmedup position supporting free land distribution in the peace negotiations [with communist rebels], landlords like the Cojuangco-Aquinos, would do everything in their power and influence to block genuine land reform. Farmers can only rely on our collective strength and the support of progressive sectors advocating genuine agrarian reform, rural and national industrialization,” Canlas said. The #OccupyLuisita activity is part of a series of land occupation and land-cultivation activities nationwide in the escalating agrarian struggles asserting genuine land reform. It is supported by militant organizations, led by the Kilusang Magbubukid ng Pilipinas, Unyon ng Manggagawa sa Agrikultura and Bagong Alyansang Makabayan (Bayan).
Kin of massacre victims demand justice
THE Mothers and Relatives against Tyranny and Repression (Martyr), a group of relatives of the victims of the Hacienda Luisita massacre in 2004 and other killings, has asked the Duterte administration to give them land and justice. Gathering in Tarlac City on April 21, Martyr officers said the meeting was held three days before the fifth anniversary of the SC decision ordering total land distribution in
Hacienda Luisita. On April 24, 2012, the SC ruled in favor of farmers under the principle of “land to tillers”, and dismissed as illegal the SDO hatched by the Cojuangco-Aquino family member and their lawyers. The Hacienda Luisita massacre left seven farmers dead and hundreds wounded. Survivors and relatives of the victims filed a case against the Cojuangco-Aquino family members, including then-Laban Rep. Benigno Aquino III of Tarlac, some officials of the Department of Labor and Employment and several members of the National Police and the Armed Forces. The accused policemen and soldiers were never charged for the carnage but were meted out minor administrative sanctions. Aquino, who was earlier cleared, practically “killed” the massacre case during his watch as president. T he O mbud sm a n d ropped charges against police and military personnel in 2010, while an appeal by the victims’ families was junked in 2014. Emy Ladera-Facunla, acting spokesman for Martyr, lamented that justice remains elusive after more than 12 years. “No one was punished. More injustice was shouldered by farm workers and the families of the victims with maneuvers of the CojuangcoAquinos to circumvent the SC decision,” she said. Facunla is the sister of Abel Ladera, a Tarlac City councilor who was vocal against injustices perpetrated by the Cojuangco-Aquinos. He was shot and killed by stillunidentified assailants in 2005. “Our resolve to launch the bungkalan, or land-cultivation initiatives, in Hacienda Luisita is part of our quest for justice,” said Facunla, who noted that the Cojuangco-Aquinos are still in direct control of more than a thousand hectares of land in Hacienda Luisita, aside from the more than 4,000 hectares supposedly allocated to land-reform beneficiaries.
Army troops kill 30 Maute terrorists Albay congressman pushes tuition-free SUCs
A
RMY troops have so far killed at least 30 Maute Group terrorists, as the operation against the group entered its third day on Monday. The Army’s First Infantry “Tabak” Division (ID) reported that as of 11:30 a.m. on Monday, its troops, backed by tactical operations units of the Air Forces, were continuing the operation against an estimated 150 Maute Group bandits holed out at the Piagapo Complex in Lanao del Sur. The operation was launched at midnight on Lanao del Sur starting of April 21. Brig. Gen. Rolando Joselito Bautista, 1ID commander, said the continuous operations are in accordance with President Duterte’s order to destroy local terrorist groups by July 31.
The Army’s 103rd Infantry Brigade, headed by Brig. Gen. Nixon C. Fortes, reported 30 bandits killed during the three days of combat operations, which led to the seizure of the bandits’ main encampment with fortified bunkers, running trenches and other facilities in Sitio Pagalungan, Barangay Gacap, Piagapo, Lanao del Sur, while, the government forces sustained three wounded in action. At the seized encampment, a cadaver wearing camouflage uniform, war materials, fragmentation and rifle grenades, homemade bomb components (blasting caps, detonating wires, cellular telephones), video camera, assorted uniforms, information on personalities, three motorcycles, food stuff and an Indonesian passport were recovered.
Bautista said the troops used a combination of lethal and nonlethal methods to force the bandits out of their stronghold. Precision air strikes made the bandits break up into smaller groups to minimize casualties. The resulting recruitment by the Maute Group of teenagers from Barangay Tambo led the locals to report their activities to the military, as well as lead the troop to the bandits’ encampment at the boundary of Balindong and Piagapo towns. Bautista said the Armed Forces will continue to work hand in hand with the local governments and local communities in the area, since peace and order must be attained in order for development to come to Piagapo and the adjacent towns. Nonie Reyes
Digify bags grand prize at Road Safety Idea Hack competition
D
IGIFY Inc., a wholly owned subsidiary of GMA New Media Inc., won the grand prize at the Road Safety Idea Hack organized by the Department of Transportation recently. The competition required participants to create and develop solutions that can improve the quality of road crash-data collection and reporting in the country. The Digify team, represented by Rodelio Arenas, head of Mobile Development, and Gaile Sarmiento, Unity developer, submitted a mo-
bile app solution, dubbed, Just Another Road Safety Very Intelligent Service (Jarvis), a driver companion app designed to help facilitate road safety for motorists. The app has hands-free and voice-command features and provides data visualizations, guides and safety statistics. It uses artificial intelligence (AI) and machine learning to customize the user-experience and improve data analysis. “Idea Hack was a great opportunity to showcase our team’s talent. I always encourage my teammates,
especially the junior developers and programmers, to have a feel of what it’s like to swim among the best in the field to harness our skills in ways that can uplift the industry and improve the local community at the same time,” Arenas said. He added, “Despite being confident about software, something we knew to a great extent, we felt it was a daunting task nonetheless, and pressure was high for us to come up with a proposed solution to the problem, knowing how good the other teams also were.”
By Johnny C. NuÑez Philippines News Agency
L
EGAZPI CITY—College students in the Bicol University here and its campuses in Tabaco City and Polangui and Guinobatan towns, and in all state universities and colleges (SUCs) in the country, will no longer have to pay their tuition starting this coming school year. PDP-Laban Rep. Joey S. Salceda of Albay said this piece of good news, however, only gives the country a foretaste of more exciting benefits coming when the Universal Access to Tertiary Education Act of 2017 (House Bill [HB] 7221), which he principally authored, becomes a law. Salceda, vice chairman of the House Committee on Appropriations, also coauthored the free SUCs tuition bill that college students will start enjoying this year, and was once its “noisiest and most ardent campaigner” during the hearings attended by the Commission on Higher Education. The lawmaker, however, said HB 7221 will be the real game changer that provide lasting effects on the country’s growth. The measure provides wider coverage for students in SUCs, including both tuitions and school fees, accessible to even those enrolled in technical-vocational institutions run by the Technical Education and Skills Development Authority (Tesda). He said those enrolled in private universities and colleges, commu-
nity colleges and Tesda-accredited institutions will have access through a subsidy, “free for those belonging to families within the 50-percent lowest income bracket”, or through the National Student Loan Program (NSLP) for those belonging to families not within the top 20-percent income bracket, and payable only after graduation, when they land good-paying jobs or put up feasible business ventures. The House Committee on Higher and Technical Education has already approved HB 7221 last month, after two other bills were consolidated with it. The highlights of the consolidated measure include full funding of SUCs with its proposed P38-billion budget and another P21.6 billion for other expenses; sufficient funding for technical vocational education and training (TVET) in technical vocational institutes (TVIs) run by Tesda with P6.7 billion; and Tertiary Education Subsidy, P15 billion limited to Decile 1 to 5 students, for tuition and other expenses in accredited private HEIs, LUCs, SUCs and Tesda accredited TVIs. The measure aims to provide other mechanisms to increase the participation rate in tertiary education from all socioeconomic classes; give all Filipinos equal opportunities to quality education in both private and public schools; give priority to academically able students from poor families; optimize utilization of government resources in education; and recognize the complementary roles of public and private institutions in
the tertiary education. It also provides the NSLP with a P15-billion allocation, limited to Deciles 1 to 8, for tuition and other expenses in accredited HEIs and SUCs. Aside from promoting universal access to tertiary education in SUCs and state-run TVIs, HB 2771 strengthens the unified financial assistance system for tertiary-education, and amends an older legislation, Republic Act 10687, more known as the UniFAST Law. Under the measure, NSLP loans are payable when their beneficiaries become gainfully employed or become entrepreneurs, and their gross incomes reach the minimum critical threshold. Payments will be collected on top of their Social Security System or Government Service Insurance System premiums, based on a reasonable schedule of repayment and interest rates UniFAST will formulate. Salceda considers the bill’s passage in the House as “a major victory and a legacy borne out of Albay’s commitment to higher education for all”, since it absorbed the major elements of his original bill, which includes the Higher Education Contribution Scheme, now NSLP, as a major modality. Eligible under the program are Filipino citizens pursuing bachelor degrees or comparable undergraduate-degree courses. After qualifying for admission, students are “exempt from paying tuition and other school fees for enrolled subjects. Disqualified are those taking second courses.
Economy
A4 Tuesday, April 25, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon
BusinessMirror
Group rejects Lopez’s proposal to enlist NPA help in mining areas By Jonathan L. Mayuga
W
@jonlmayuga
hile some environmental groups welcome Environment Secretary Regina Paz L. Lopez’s plan to enlist the help of the New People’s Army (NPA), the antimining group Alyansa Tigil Mina (ATM) said armed groups, including NPA rebels, are not welcome in mining-affected areas. ATM said it is opposed to the idea of having more armed groups in mining-affected areas, saying mining itself is already causing conflict in areas with their mere presence. Besides, ATM National Coordinator Jaybee Garganera said, Lopez’s pronouncement, which drew mixed reactions, was allegedly done or announced without consulting mining-affected communities. “We intend to seek clarification from the DENR [Department of Environment and Natural Resources] Secretary about her plan. We were not consulted about it,” Garganera said. Garganera was reacting to Lopez’s pronouncement that she will work with the NPA in Agusan provinces to establish an ecological, economic and educational (E3) zone in communities around mining sites.
Lopez even described the NPA, armed wing of the Communist Party of the Philippines (CPP), as “nice people” who only want to help people get out of poverty. Kalikasan-People’s Network for the Environment (Kalikasan-PNE) expressed support behind Lopez’s plan, saying there are areas of collaboration wherein NPAs can help the Duterte administration, particularly in enforcing Lopez’s mineclosure orders. Clemente Bautista, national coordinator of Kalikasan-PNE, said working with the NPA will also boost environmental protection and prevent “environmental terrorists” from further causing damage to the country’s fragile environment. He said the group also supports Lopez’s idea of implementing “area development”, wherein the communities
will benefit from whatever their natural environment has to offer first and foremost. While supporting Lopez’s idea of implementing an area-development approach in mining communities, Garganera said having more armed groups—whether NPA or Moro rebels—in mining areas will only complicate the situation and endanger the lives of innocent civilians in case of a firefight with Philippine National Police or Armed Forces of the Philippines forces in those areas. Militant groups have been demanding for the pullout of the police and the military in mining areas, as well, blaming them for human-rights violation with some anti-mining groups ending up victims of extrajudicial killings. “We are hesitant to commit [our] support behind her plan. This was a unilateral move by the DENR secretary. We were not consulted...[and] we are unaware [of the role they will play]. If they [the rebels] are active combatants, I would agree with the
reaction of the Chamber of Mines that this is perplexing. Will it be for rehabilitation or conflict mediation? I don’t [know] where she is coming from in announcing her plan,” Garganera said. “We will seek clarification what she [Lopez] mean[t] about it. Our member-organizations have defined activities and mandate in some areas. We support peace initiatives in those areas, but we [are] also humbly requesting…armed groups to stay out of mining communities,” Garganera said. He added mining communities have legitimate calls to stop mining because of the destruction of the environment, and the adverse impact of mining to people and livelihood. “We are not favoring one group over the other. What we want is for armed groups to stay out of mining areas to make these areas zones of peace,” he added. Lopez, for her part, clarified that NPAs should make sure they will not bear arms when they go to mining communities to extend their help.
We are hesitant to commit [our] support behind her plan. This was a unilateral move by the DENR secretary. We were not consulted... [and] we are unaware [of the role they will play].”—Garganera
news@businessmirror.com.ph
House panel eyes plenary approval of CTRP by June By Jovee Marie N. dela Cruz @joveemarie
T
he chairman of the House Committee on Ways and Means on Monday expressed confidence that there will be a new Comprehensive Tax Reform Program (CTRP) by June. PDP-Laban Rep. and Committee Chairman Dakila Carlo Cua of Quirino said members of his committee will tackle the bill until its passage at the panel and plenary levels when session resumes next week. “Our target is to pass the [technical working group [TWG]-approved] tax package and transmit it to the Senate before Congress goes on another break in June,” Cua said in a radio interview. Congress will resume its session on May 2. It is also expected to go on another break from June 3 to July 23. According to Cua, the bill is still under a TWG. The TWG is also headed by Cua. “The bill was elevated to a technical working group before our break in March. The TWG is the one who will [tackle the proposal], line by line and study the final changes and improvement. It is also expected to come up with a substitute bill,” he said. “The TWG will submit the substitute bill to the mother committee for approval,” Cua added. In March the panel—through the motion of Minority Leader
and Lakas Rep. Danilo Suarez of Quezon, seconded by Deputy Speaker and Lakas Rep. Gloria Macapagal-Arroyo of Pampanga—has moved to further study the proposal and to hear more the concerns of stakeholders. Suarez, Arroyo and Deputy Speaker Romero S. Quimbo of Marikina also urged the panel to consolidate the 45 pending bills seeking to lower personal income tax (PIT) rates filed at the lower chamber to the Department of Finance (DOF)-backed CTRP. The DOF-backed bill adopted by Cua seeks to exempt those ear ning P250,000 and below from PIT. However, the ta x proposal also includes the imposition of excise tax on fuel as compensatory measure for the foregone revenues due to the lowering of income tax. The DOF also proposes a staggered increase of P6 per liter of diesel, kerosene, and LPG to be imposed within a three-year period. The CTRP is also imposing excise tax on vehicles. The bill also includes the relaxation of the Bank Secrecy Act, taxing Philippine Charity Sweepstakes Office numbers’ game and lotto winnings. The tax-reform package involves foregone revenue of around P200 billion but, at the same time, will generate around P206.8 billion for the government in the first full year of its implementation.
Dragon-fruit farming
Sen. Cynthia A. Villar announces that the Social Institute of Poverty Alleviation and Governance (Villar SIPAG), a nonstock, nonprofit foundation, is providing training course on dragon-fruit production and cultivation, because they want farmers to take advantage of the commercial value of dragon fruits to increase their income. Villar SIPAG launched its first dragon-fruit production and cultivation training at its farm school in Bacoor, Cavite. The six-month course, in partnership with the Dragon Farm Trading of Bulacan, would initially benefit 180 trainees. In the photo with Villar during the Dragon Fruit Production and Business Set-Up are Agriculture Undersecretary for High Value Crops and Rural Credit Evelyn Laviña and Bulacan Dragon Farm owner Edy Marcos. PNA photo courtesy office of Senator Villar
DOJ’s Aguirre to DBM: Release retirement pay of PAO lawyers By Joel R. San Juan @jrsanjuan1573
J
USTICE Secretary Vitaliano N. Aguirre II is urging the Department of Budget and Management (DBM) to comply with the order of the Regional Trial Court in Quezon City for the release of the P139-million retirement benefits of 40 public lawyers. In his letter to Budget Secretary Benjamin E. Diokno, Aguirre said the DOJ agrees with the ruling of the lower court “that a judicial declaration on the presence of ambiguity, which necessitates an interpretation, should have been sought by way of an action for declaratory relief.” “In the absence of the same, DBM-Government Service Insur-
ance System Circular 2013-1 and Budget Circular 2013-1, which recognize the rights of PAO [Public Attorneys Office] retirees to gratuities as the same as those of their NPS [National Prosecution Service] counterparts, stand,” Aguirre said. Out of the 40 lawyers that would benefit for the ruling, five have already passed away. It can be recalled that in its ruling on February 14, the trial court nullified the DBM’s Legal Services Opinion 14 issued on November 2015. The said opinion stated that lawyers from the PAO are not entitled to the same retirement package as that of the prosecutors and judges. This prompted PAO to seek redress from the court, insisting that under
Section 5 of the PAO law, a public lawyer shall have the same qualifications for appointment, rank, salaries, allowances and retirement privileges as those of a public prosecutor. The court upheld the PAO’s position, saying they are entitled to the same retirement privileges as those of their counterparts in the NPS under the PAO law (Republic Act [RA] 9406) and that reference shall be made on the retirement benefits of the prosecutors in the NPS presently governed by the Napross law (RA 11071). The court said the PAO retirees “should comfortably enjoy their retirement in the relative security of a regular monthly pension and should not be denied benefit and left without means of sustenance.”
AseanTuesday
news@businessmirror.com.ph
Vietnam bank aims to fetch $700 million selling major stake
T
he first Vietnamese bank granted government approval to sell a majority stake to a foreign investor could attract an investment of at least $700 million. Saigon Joint Stock Commercial Bank, the fifth-largest by assets, said it’s in talks to draw that investment by selling a controlling stake to a sole foreign investor. The funds will help strengthen its financial products and speed up the resolution of remaining bad debt. Saigon Commercial Bank (SCB) plans to sell more than half of the bank at par value through the issuance of new shares, CEO Vo Tan Hoang Van said. “We’re really looking for a partner who would not only put money into the bank, but also has the same vision about this market,” Van said in an interview at the bank’s Ho Chi Minh City headquarters, adding that he wants an investor to help grow the bank. “More importantly, they need to help our clients to complete their real-estate projects so that we can solve the bad-debt issue in a shorter time.” Prime Minister Nguyen Xuan Phuc said in a Bloomberg Television interview in January that he plans to increase the government’s 30-percent cap on total foreign ownership in banks to hasten the overhaul of Vietnam’s banking system. He singled out Ocean Bank, taken over by the State Bank of Vietnam in 2015, as a weak institution the government is willing to sell immediately to a foreign investor. The benchmark VN Index was little changed as of 10 a.m. in Ho Chi Minh City. Real estate and banking stocks were among the sectors that gained on the index. Financial services companies have led gains in Vietnam stock market this year, rising 14 percent. Two out of six banks listed in the Ho Chi Minh City Stock Exchange rose today, with Bank for Foreign Trade of Vietnam JSC advancing 0.7 percent and the Vietnam Joint Stock Commercial Bank for Industry and Trade was up 0.3 percent.
Six investors
SCB has been in talks with six investors, including banks, equity funds and insurance companies from Norway, Indonesia, Taiwan and China, Van said. An unnamed foreign investment fund earlier this year offered to buy a 15-percent stake, according to Van. The bank also expects intensifying negotiations with two potential investors from China and Indonesia. The lender aims to submit its stake sale plan to the central bank for approval early next year and expects to close the deal in mid-2018, Van said. The bank
plans to hire an international bank as a consultant, he said, adding that the prime minister must ultimately sign off on the deal. The sale of a majority stake may also affect plans for a listing after 2019 when its restructuring process, which began in 2012, is completed, Van said.
BusinessMirror
Editor: Max V. de Leon • Tuesday, April 25, 2017 A5
Abu Dhabi debt deal to help clear path for Malaysia polls
Banking reform
The government established the Vietnam Asset Management Company (VAMC) in 2013 to acquire bad bank loans, which has reduced bad-debt ratio to 2.46 percent of total loans at the end of 2016 from an estimated 7.8 percent at the end of 2012. The agency has collected just 50.2 trillion dong ($2.2 billion) of nonperforming loans, or less than 18 percent of the total outstanding bad debt, since its establishment, Thoi Bao Kinh Te Vietnam reported on March 20, citing data from VAMC. “This is an important move to reform the banking system,” said Alan Pham, Ho Chi Minh City-based chief economist at VinaCapital Group, one of the nation’s biggest fund managers. “SCB can receive a capital infusion to improve its nonperforming loan problem. Investors can provide SCB with advanced technology, risk management methods, derivatives trading capabilities and FX management.” Still, Vietnam’s current regulations may make it difficult for overseas investors to acquire bank stakes, Van said. Under Vietnam law, overseas banks, financial firms and financial leasing companies that seek to acquire 10 percent or more of a local credit institution’s charter capital must have total assets worth at least $10 billion. Other foreign investors must have registered capital of at least $1 billion during the year before applying to buy the stakes, according to the 2014 decree.
‘A barrier’
International banks are reducing investments in emerging countries’ banks due to new capital requirement management regulations under Basel III, Van said. Vietnam’s asset and registered capital requirements are “a barrier to foreign lenders who seek to invest in Vietnamese banks”, he added. SCB, established with the 2012 merger of Saigon Joint Stock Commercial Bank, First Joint Stock Commercial Bank and Vietnam Tin Nghia Commercial Joint Stock Bank, slashed its baddebt ratio to 0.68 percent by the end of last year from 7.25 percent in 2012, the lender said at its April 18 shareholders’ meeting. The bank targets collecting 1.5 trillion dong in overdue loans this year. Bloomberg News
B
Tourists take selfie with the Lord Murugan statue at Batu Caves in Kuala Lumpur, Malaysia, on Friday. AP
arely two years after he was engulfed in a scandal over a Malaysia state fund, Prime Minister Najib Razak is set to clear another hurdle to putting the furor behind him and calling an early election.
Malaysia is said to have agreed to pay Abu Dhabi $2.5 billion as a partial debt settlement for 1Malaysia Development Bhd. (1MDB), in a deal that’s expected to be announced on Monday on the London Stock Exchange. The initial resolution of the dispute with Abu Dhabi over the finances of 1MDB could help Najib move toward closure on a scandal that at one point raised questions about his ability to hold onto power. Instead, with an election due by mid-2018 but potentially coming this year, Najib’s grip on power is at an all-time high, said Oh Ei Sun, a senior fellow at the S Rajaratnam School of International Studies and former aide to the prime minister.
The rural Malay voters who form the support base of Najib’s ruling United Malays National Organization (Umno) are very “forgetful and forgiving” and may have put the financial woes surrounding 1MDB behind them, Oh said. The prime minister already moved to consolidate his power in a party purge last year. The brainchild of Najib to attract foreign investment, 1MDB accumulated billions of dollars of debt after its 2009 inception, and is at the center of multiple investigations from the United States to Singapore in relation to alleged corruption and money laundering. A Malaysian parliamentary committee identified at least $4.2 billion in irregular transac-
$4.2B
The value of “irregular” 1MDB transactions unearth by a Malaysian parliamentary committee
tions. Najib and 1MDB have denied any wrongdoing. “Urban Malaysians are frustrated because they are still angry, but they can do basically nothing about it,” Oh said. “All these years, Najib has assiduously built up Umno’s support base in rural areas. Rural constituencies will determine the next election” outcome, he said. Under the deal with Abu Dhabi, Malaysia will also assume the coupon obligations for two-dollar bonds issued by 1MDB and coguaranteed by Middle Eastern sovereign wealth fund International Petroleum Investment Co. (Ipic), a person familiar with the matter said on Saturday. The
countries agreed not to pursue legal action before December 2020, as they negotiate a dispute over $3.5 billion linked to the bonds, the person said. 1MDB and Ipic were locked in a tussle that spilled over to repayments on two sets of bonds issued by the Malaysian fund that led to a default in April 2016. The agreement will remove a key hurdle for Malaysia amid investigations from the US to Singapore, Hong Kong and Switzerland into alleged money laundering and embezzlement linked to 1MDB. The furor over 1MDB, alongside hundreds of millions of dollars that appeared in Najib’s bank account before the 2013 election, set off the biggest crisis for Najib during his time in office. Former Deputy Prime Minister Muhyiddin Yassin and Mukhriz Mahathir, the son of ex-premier Mahathir Mohamad, were expelled from Umno last year. Still, Mahathir, who has led a campaign to get Najib out of office, has struggled to lure Malay voters to a new party he has set up. Najib further bolstered his position this month by giving an extra role to his cousin, Defense Minister Hishammuddin Hussein, appointing him a minister with special functions under the Prime Minister’s Office. With the opposition group fractured by infighting over policies and how best to challenge Najib, the governing Barisan Nasional coalition led by Umno is predicted by analysts, including Wan Saiful Wan Jan, head of the Institute for Democracy and Economic Affairs, to at least retain its parliamentary seats in the next election. Still, lingering questions over 1MDB may come back after the vote, Wan Saiful said. “Najib’s position as a prime minister going into the election is confirmed, it’s secured, there’s no question about that,” said Wan Saiful. “The real problem with 1MDB is it raises the question what will happen to Najib after the election,” he said. “After the election when the party is a bit more secure, they are more comfortable in their place, Umno is back in government—they will start thinking: Now we have five years to deal with any problems that arise, maybe it’s time to think about whether Najib can continue to lead Umno or not.” Bloomberg News
Mysterious case of stolen plaque in Thailand sign of antidemocratic sentiment
I
t’s a whodunit worthy of a Dan Brown novel: a small bronze plaque commemorating Thailand’s 1932 revolution is ripped out from a very public place by parties unknown and substituted by one praising the Chakri Dynasty, whose 10th king took the throne in December. A disinclination by the authorities to find those responsible adds another element of mystery. The original plaque, installed in 1936, marked the spot where a group of progressive army officers and civil servants proclaimed the end of the absolute monarchy in order to steer the country toward democracy. “At this place, at dawn on June 24, 1932, we, the People’s Party, have given birth to the constitution for the progress of the nation,” is a translation of the words engraved on the brass disc. The ideal still hasn’t taken hold. A royalist military government that took power in a coup three years ago still rules Thailand, and its newly enacted constitution aims to limit the power of elected officials and give it instead to institutions traditionally associated with the palace, including the courts, the civil service and the military. Prime Minister Prayuth Chanocha said last week that he has ordered an investigation into the plaque’s disappearance, but warned
against making a political issue of it. He could understand why some people might be upset, he told reporters. “But look at what we are doing today,” he said. “Would it be better for us to look ahead at the future? Old subjects are just history.” The old plaque, about 30 centimeters (12 inches) in diameter and lying flush with the pavement, was embedded in Bangkok’s Royal Plaza, a vast open area in the midst of government buildings and military installations. It was so neglected as a landmark that its disappearance could only be estimated to have taken place between April 3 and 7. As a symbol of democratic change, however, it was revered. For the same reason, it was despised. Debate on social media over the plaque’s disappearance has evoked a strong streak of antidemocratic sentiment, decrying the 1932 revolution for imposing unsuitable Westernstyle democracy causing corruption and all sorts of social ills; slamming the 1932 coup makers as evil; and even suggesting that the plaque was the physical incarnation of a curse on the nation. Royalist resistance began almost immediately after the revolution, and slowly clawed back influence for the palace. By the late 1950s an ac-
In this October 2, 2016, photo, a small bronze plaque commemorating Thailand’s 1932 revolution rests in the pavement of the Royal Plaza in front of the Ananta Samakhom throne hall in Bangkok, Thailand. In early April the plaque was mysteriously removed by parties unknown and substituted by one praising the Chakri Dynasty, whose 10th king took the throne in December. A disinclination by the authorities to find those responsible adds another element of mystery. AP
commodation was reached with the military, which sought its prestige, and by the late 1970s the constitutional monarchy was the country’s most powerful institution, inviolable under the protection of the army. This balance of power began to unravel in 2001, when billionaire populist Thaksin Shinawatra used his fortune to win an unprecedented electoral majority and become prime minister. Thaksin, accused of corruption, abuse of power and disrespect for the monarchy, was ousted by a military coup in 2006, setting off a sometimes violent struggle for power between his supporters and opponents, with the military strongly in the latter group. Thaksin’s opponents saw democracy as the problem, and some identified the 1932 revolution as the original sin. “It seems to me that the junta has come to the view that the problems associated with Thaksin and erasing his regime involves a more deeprooted issue of dealing with the notion of people’s sovereignty that was embedded in the 1932 proclamation and first draft constitution,” said Kevin Hewison, a senior research fellow at the Center for Southeast Asian Studies at Kyoto University. “In this sense, the removal of the plaque is a symbolic act of delayed counterrevolution,” he said.
Although a fringe group of ultraroyalists openly vowed late last year to remove or destroy the plaque, there is plenty to fuel speculation of a higher-level conspiracy. Photos purportedly taken at the plaza during the period the plaque went missing show scaffolding at the spot, more suggestive of a public works project than a thief in the night. City officials asked to produce surveillance videos from the 11 cameras at the plaza say they were shut for maintenance during the same period. Police said they could not accept a criminal complaint of theft, except from the plaque’s owner, who was unknown. Pressed on the point, they threatened to sue an outspoken politician who suggested they weren’t doing their duties. Prayuth’s suggestion that the case was a stone better left unturned was not idle advice. A government reform activist who sought to petition him on the matter was seized by soldiers and detained for 10 hours. The plaque’s removal also coincided with the signing of the new constitution by King Vajiralongkorn Bodindradebayavarangkun, who succeeded his late father, King Bhumibol Adulyadej, last year. Ploenpote Atthakor, editorial page editor of the Bangkok Post, saw an upside to the affair. AP
A6
Tuesday, April 25, 2017 • Editor: Lyn Resurreccion
The World BusinessMirror
www.businessmirror.com.ph
UK firms disclosing huge gender pay gaps
A
international Monetary Fund (IMF) Managing Director Christine Lagarde (left) speaks with Germany’s Finance Minister Wolfgang Schauble (center) and Treasury Secretary Steven Mnuchin during the IMF Governors group photo at World Bank/IMF Spring Meetings in Washington on April 22. AP/Jose Luis Magana
Mnuchin calls IMF’s US forecast conservative; chases 3 percent
T
reasury Secretary Steven Mnuchin called the International Monetary Fund’s (IMF) outlook for the US economy a “little conservative” as he repeated the Trump administration’s goal of getting to 3-percent growth or faster.
“The US economy is well positioned,” Mnuchin said on Saturday in a conversation with IMF Managing Director Christine Lagarde during the organization’s spring meetings in Washington. “We’ve been in a period of post-financial crisis, where we’ve just been in sub-optimal growth. We believe we can get to 3-percent or more sustainable economic growth.” The Trump administration is planning tax cuts and increased infrastructure spending to help achieve its goal of lifting economic
growth. The IMF in updated forecasts this week left its US economic growth forecast unchanged at 2.3 percent this year, while raising the global outlook slightly to 3.5 percent. The IMF expects 2.5-percent expansion for the US in 2018. Despite Lagarde’s status as the head of an international organization that espouses globalization, and Mnuchin’s position as Treasury secretary for a president who rode to victory in part by harshly criticizing such forces, the conversation was gentle and
2.3%
The percentage of US economic growth for this year that the International Monetary Fund forecasted
the pair joked at times throughout the half-hour event. Mnuchin said the administration is focused on policies that help the US economy and also support global growth. The president and officials are reaching out to business leaders and seeking to implement reforms that will pay for themselves with growth, he said. Whether US growth shows a sustainable pickup may depend in part on an economic shake-up promised by candidate Donald J. Trump that hasn’t quite taken shape since he took office.
While Trump has ordered reviews of key trading relationships, he’s backed down from a promise to label China a currency manipulator and a North America Free Trade Agreement revamp has faced delays. Mnuchin has anchored his goals as Treasury secretary— which include tax reform and regulatory relief—to doubling the pace of domestic growth to as much as 4 percent. Economists are mostly skeptical that pickup will happen, as those surveyed by Bloomberg see expansion of about 2.2 percent to 2.3 percent through 2019. Mnuchin is regularly reminded of the legacy of economic growth the Trump administration wants to solidify. A framed copy of a newspaper article announcing Mnuchin as Trump’s choice as Treasury chief hangs on his office wall in the Treasury Department, with a signed note from Trump that mentions “5 percent GDP.” Bloomberg News
Russia’s investment flop shows flawed recovery
F
or an economy safely out of recession, the tidings on investment in Russia are increasingly grim. As a broader recovery gathers pace, capital spending by companies is off to a poor start in 2017 after contracting in the past three years. A close proxy for investment—the value of construction works completed— shrank for a fourth month in March in the biggest decline this year, according to data published last week. The setback contrasts with the confidence expressed by the central bank that the “lengthy investment pause” is already over. Fixed-capital investment rose 1 percent in the first quarter from a year earlier, according to the median of nine estimates in a Bloomberg survey. The statistics service, which in 2016 started releasing only quarterly investment figures, is due to publish the data for January to March next month. “Despite a considerable reduction in uncertainty, investment growth is constrained by a set of factors,” said Dmitry Kulikov, a senior analyst at Russian rating company Acra. These include “a relatively higher level of risk perception after the recession, accumulated delinquencies in bank credit, and a weaker ruble than in the precrisis period.” Once a central plank of government efforts for exiting the crisis, investment has stalled as the economy remains hamstrung by corruption, weak institutions and a poor business climate. Russia’s property rights
rates in the quarters ahead and uncertainty over the configuration of the tax system,”VTB Capital analysts, including Alexander Isakov, said in a report. Although the central bank has maintained its “moderately tight” policy, the cost of credit in Russia continues to decline. The average rate on corporate ruble loans for up to 12 months was at 11.48 percent in February, compared with more than 13 percent a year earlier and a high of almost 20 percent in January 2015.
Rate outlook
A Russian stocks window shown at left. Bloomberg
and the prevalence of foreign ownership were rated below the 120th spot among 138 nations in the World Economic Forum’s Global Competitiveness Report. Finding the results lacking, President Vladimir Putin last week asked for additional measures to encourage investment. Days later, Prime Minister Dmitry Medvedev said his Cabinet is discussing tax breaks for companies planning to increase capital expenditure. The Economy Ministry has also proposed a program of subsidizing rates on long-term loans, which could be issued through state development lender Vnesheconombank, according to the Vedomosti newspaper.
‘Significant acceleration’
“Government attention has finally shifted
to an investment and modernization agenda,” said Vladimir Tikhomirov, chief economist at BCS Financial Group, a Moscow brokerage. “This is clearly a positive and long-overdue development, which, if successful, could lead to significant acceleration in Russia’s growth rates.” Judging by the per formance of construction so far this year, companies could use more help. Volumes in the industry, which accounts for about 40 percent in total capital spending, were down 4.3 percent last quarter, “flagging a negative quarterly print for fixed-capital investments,” said Dmitry Polevoy, an economist at ING Groep NV in Moscow. “Investments are still checked by the expectations of the decline of the borrowing
The central bank will lower the key rate with another quarter-point reduction at its meeting on Friday, according to most of the 32 economists surveyed by Bloomberg. In March it ended a six-month pause, reducing the benchmark from 10 percent to 9.75 percent. Bank of Russia Governor Elvira Nabiullina has already said a “discussion may be held on lowering the rate by between 25 and 50 basis points.” After a “ generally weak” snapshot of the economy in March’s data, the chance of deeper monetary easing is growing, according to Bank of America (BofA) Corp. “The pace of improvement is disappointing, which could put pressure on the central bank to deliver more aggressive policy easing” this week, said Vladimir Osakovskiy, an economist at BofA in Moscow. “We believe this could increase the possibility of a greater than 50 basis-point rate cut.” Bloomberg News
s Br itish companies prepa re to make public the difference between what their male and female employees earn, early reports from a handful of companies have revealed pay gaps as high as 36 percent—twice the national average. Virgin Money disclosed that men who work at the bank earn, on average, 36 percent more than women. At asset manager Schroders Plc., the pay gap was 31 percent. Utility SSE Plc. reported an average pay gap of 23.4 percent, and consulting firm PwC said it found a 15-percent difference in pay. The companies released the numbers ahead of a new law that requires companies to calculate the difference between the average and median hourly pay rates for all male and female employees, with and without bonus. All companies will be required to publish the results of their paygap analysis on their web sites by April 2018, a measure that supporters say will help close the gulf in compensation. The national pay gap is a little more than 18 percent, according to government statistics. That’s a blunt average, though, and reflects a slew of factors, including the fact that men hold a bigger proportion of senior jobs and high-paying roles. Throughout the UK, women hold 60 percent of the lowestpaying jobs, while men make up 60 percent of the top paying posts, according to data from the Confederation of British Industry (CBI).
Job functions
“The way men and women are segregated into different job functions is the biggest driver of the gender wage gap,” said Andrew Chamberlain, chief economist at Glassdoor Inc. The job search site uses selfreported data from the thousands of job seekers, then looks at job title, experience, education and other factors to understand how men and women with similar backgrounds are paid. When adjusted for these factors, men in the UK still earn 5.5 percent more than women, compared with a 5.4-percent gap the US, he said. For Virgin Money, the 36-percent pay gap it discovered wasn’t out of whack with the rest of the financial services sector, where the average pay gap is around 34 percent. Still, Matt Elliott said, the company’s people director, “It isn’t something that we can accept.” By other measures, the company is ahead of some of its peers: Four of its 10 corporate directors are female, including its chief executive officer.
Service roles
Looking deeper, Virgin found it
still had too few women in senior roles. It also lacked men working in customer service. As a result, men make up 67 percent of the best-paid employees and just 26 percent of lowest-paid. “We need to make consumerservice roles more attractive to men,” Elliott said. “I don’t think we’d have been looking at this without the pay gap work.” Virgin is also trying to provide more support for women as they move up through their careers. The company has a maternitymentoring program, as well as an app that lets women keep in touch with their colleagues when they’re on leave. SSE’s internal review also revealed discrepancies that went deeper than its overall average (which is about average for its industry). At the company, 34 percent of men received a bonus, compared to 12 percent of women. And among those who got bonuses, men’s awards were on average 32 percent bigger.
Women’s paths
The company says its pay gap reflects that it has fewer women in operational roles—the result of a gender gap in science and technology education. It also said publishing the data helps inform business and address pay disparity overall. Not everyone agrees. The CBI opposed the new regulations on the grounds that the numbers don’t give a complete picture, and also that there are many causes for the pay gap, many of which are out of companies’ control. In a report prepared for the employers group, Anthony Fincham, a partner at law firm CMS, explained why the new requirement is unfair. “If employers are not responsible for a l l the problems, they cannot be held accountable for a l l t he solut ions,” he w rote. A f ford able child care, better career adv ice and education are a ll needed to bring women’s compensation in line w ith men’s, he said. St i l l, U K workers suppor t disclosure. In a survey by Glassdoor, 58 percent said the government should force employers to reveal salaries in order to combat unequal pay. Shareholders have also begun to pressure companies to reveal—and close—gender pay gaps. Firms that can do so will have an advantage both with investors and in recruiting. “Most ta lented women are not going to want to work at a company with bad numbers—it will be a turnoff,” said Avivah Wittenberg-Cox, who consults on diversity at global companies. “Companies need to adapt their cultures to a more genderbalanced world.” Bloomberg News
China cools growth in wealth products in trillions of dollars
C
hina’s boom in wealthm a n agement produc ts (WMPs) worth trillions of dollars, under scrutiny from regulators because of potential threats to financial stability, is slowing for now. Outstanding products issued by banks stood at 29.1 trillion yuan ($4.2 trillion) as of March 31, up 18.6 percent from a year earlier, according to the China Banking Regulatory Commission (CBRC). The growth rate slumped from 53 percent during the same period last year, CBRC said. WMPs—popular among individual and corporate investors for their high yields—have almost tripled in value over the past three years, dominating
China’s shadow-banking sector. Regulators have recently stepped up efforts to clamp down on the potential risks. Eve n w it h t he s lowdow n , China’s W MPs are at a record va lue. Guo Shuqing, chair man of CBRC, said in March that reg u lators, including the centra l bank, w il l draft r u les to plug loopholes in reg u lations for cross-market financial products, such as WMPs. The central bank also started to include off-balance sheet WMPs in its so-called macro prudential assessment framework in t he f irst quar ter to better gauge the expansion of credit and potential risks in the financial system.Bloomberg News
The World
BusinessMirror AS MACRON AND LE PEN TO SLUG IT OUT IN RUNOFF ON MAY 7 www.businessmirror.com.ph
Tuesday, April 25, 2017
A7
French parties unify against Le Pen
P
ARIS—Not since World War II has the antiimmigrant far right been closer to gaining power in France. With her second-place finish on Sunday in the first round of the presidential election, Marine Le Pen has dragged her National Front party from the dark fringes of its first 40 years. But that remarkable accomplishment is so alarming to so many in France that as soon as the preliminary results were announced at 8:01 p.m., virtually all of her major opponents in the 11-person race called for her defeat in the secondround runoff on May 7. They implored their supporters to vote for the candidate projected to come out on top on Sunday, the centrist, pro-European Union former economy minister Emmanuel Macron, a political novice and outsider. The first-round showing by Macron and Le Pen represented an earthquake, as they effectively broke the French political establishment. On the right and the left, the two parties that have governed France for more than 50 years suffered a severe defeat. They have been pushed aside in a wave of popular anger over the country’s stagnant economy and shaky security. The rapid-fire endorsements of Macron, coming from across the political spectrum, represented a dynamic that has always prevailed in France when the National Front approaches executive power—the cross-party, antifar right alliance the French call the “Republican Front”. The question now is whether that front can hold this time, as well. Le Pen has oriented her appeal around what analysts and politicians call the “undemonization” of her party—the shedding of its racist, anti-Semitic, Nazi-nostalgic
24% and 21% The percentage of votes garnered by Emmanuel Macron and Marine Le Pen, respectively, in Sunday’s presidential election in France roots. That strategy has scored big results. Until the last week of the campaign, when she turned even more sharply antiimmigrant, her speeches were shaped around what she depicted as regaining France’s “sovereignty”, breaking with the EU and “restoring” France’s frontiers. But an undercurrent of prejudice still undergirds the National Front’s fervent rallies. Anti-Muslim code still permeates her speeches. And a majority of French people, in polls, still say the party represents a threat to the country’s democracy. That sentiment was widely evident on Sunday in declarations from the political class, and from voters themselves. True, polls and prognosticators failed to predict Britain’s vote to leave the EU, or the United States presidential victory of President Donald J. Trump. It is because of these unexpected shocks to the political status quo that many analysts are wary of prematurely writing off Le Pen. But early polling for the second round in France shows that Macron’s margin over her is as high as 25 percent. One after another on Sunday
French centrist presidential candidate Emmanuel Macron (left) waves before addressing his supporters at his election day headquarters in Paris on April 23. Far-right leader and candidate for the 2017 French presidential election, Marine Le Pen, addresses supporters after exit-poll results of the first round of the presidential election were announced at her election day headquarters in HeninBeaumont, northern France, on Sunday. Macron and far-right populist Le Pen advanced to a runoff in France’s presidential election, remaking the country’s political system and setting up a showdown over its participation in the European Union. AP/Christophe Ena and Michel Spingler
night, and in quick succession, the grandees of the established parties urgently called for an anti-Le Pen vote, as if the real stakes of this year’s election had suddenly been revealed. “Extremism can only bring unhappiness and division,” said the defeated candidate of the centerright Républicains party, François Fillon, who was the consensus favorite four months ago but was brought down by a corruption scandal. “There is no choice but to vote against the far right,” said Fillon, who was set to finish in third place. The candidate of the governing Socialist Party, Benoît Hamon, whose fifth-place finish symbolized voter rejection of the establishment, was equally unequivocal. He had run a campaign of unrelenting hostility toward Macron. That vanished on Sunday. “There’s a clear distinction to be made between a political adversary and an enemy of the republic,” Hamon said, calling on Socialists to vote for Macron. “This is deadly serious now”. Only the likely fourth-place finisher, the far-left candidate Jean-Luc Mélenchon, was holding back on Sunday night, hoping for an as-yet uncounted big-city vote that might push him past Le Pen. But his supporters were already ac-
knowledging what appeared to be inevitable and calling for a Macron vote in the second round. Fifteen years ago when Le Pen’s father, Jean-Marie Le Pen, shocked his compatriots by breaking through to the second round and again knocking out the Socialist Party, some Socialist voters went to the polls with clothespins on their noses, as they voted for the scandal-plagued candidate of the center-right, Jacques Chirac. Jean-Marie Le Pen was dealt a crushing defeat. Eighteen months ago in widely watched regional elections, Marine Le Pen’s party seemed all but certain to gain control of the two regions in France where it is strongest, the north and the southeast. Most analysts predicted it. In the end, she gained neither: In the second round of those contests, the “Republican Front” united against her, the right and the left, and the National Front failed to gain a single region. This time even though she has pushed her party into a second round of voting, her prospects based on the first round do not necessarily look bright, either. She underperformed, gaining 21 percent of votes to Macron’s nearly 24 percent. Analysts said the result
‘Dreamers not target of immigrant crackdown’
W
A S H I N G T O N —Tw o members of President Donald J. Trump’s Cabinet appeared to retreat on Sunday from one of Trump’s signature campaign promises: to “immediately terminate” an Obama administration Executive Order meant to protect the legal status of children of undocumented immigrants. “We’re not targeting them,” Homeland Security Secretary John Kelly said of such children in an interview on CNN’s State of the Union. In a separate interview, on ABC’s This Week, Attorney General Jeff Sessions affirmed that the federal government did not “have the ability to round up everybody”. Kelly said on CNN that “these people are caught between the law”, adding that “the president, obviously, is sympathetic”. “But,” he added, “I just wish these kinds of issues were dealt with legally by the United States Congress.” Sessions made a similar observation in the ABC interview. “There’s no doubt the president has sympathy for young people who were brought here at early ages,” he said. The administration’s “first and strongest priority”, Sessions added, was the “criminal element”. Trump said in February that he would approach former President Barack Obama’s Deferred Action for Childhood Arrivals (Daca) program “with heart”, calling the so-called Dreamers it affects “absolutely incredible kids”.
“I have to deal with a lot of politicians, don’t forget, and I have to convince them that what I’m saying is—is right,” Trump said at the time. “The existing law is very rough. It’s very, very rough.” On Friday Trump told The Associated Press that undocumented immigrants brought here as children can “rest easy”, and that his agenda was “not after the dreamers; we are after the criminals”. Trump had a more nationalist posture during the campaign. “I want dreamers to come from this country,” he said in February 2016. “We’re always talking about dreamers for other people. I want the children that are growing up in the US to be dreamers also.” Sessions was resolute on Sunday in arguing that the US needed a more exacting immigration policy. “Many of these are involved in criminal enterprises, hauling drugs and that kind of thing,” he said. “We need to end that. And then we’ve got to wrestle with what to do about people who have been here a long time.” The Trump administration has continued to issue work permits to dreamers, but it also has moved to hasten the hiring of border agents. The Justice Department recently sent letters to officials in jurisdictions known as sanctuary cities, threatening them with the loss of federal aid if they failed to cooperate with federal immigration officials. In a lawsuit filed
last week, immigrant advocates accused the federal government of deporting for the first time an undocumented immigrant who had been allowed to stay in the country under the Daca program. Customs and Border Protection arrested the 23-year-old immigrant in California in February. On Sunday Kelly and Sessions also addressed the accompanying problem of financing a wall on the Mexican border Trump has vowed to build. The current congressional funding bill expires on Friday, and Trump has made the wall a fulcrum of his new budget proposals. On Sunday Mick Mulvaney, Trump’s budget director, and Reince Priebus, the president’s chief of staff, said they were confident that the Republican-controlled Congress would approve the president’s plan. “No one foresees or wants a shutdown next week,” Mulvaney said on Fox News Sunday. When pressed on whether Trump would accept a budget that did not include money for the border wall, Mulvaney said, “We don’t know yet.” Priebus, appearing on NBC’s Meet the Press, said, “It’ll be enough for us to move forward through the end of September for us to get going on the wall.” When asked whether he believed that the federal government would remain open past this week, Priebus said, “I believe it will.” Later on Sunday after those
interviews, Trump wrote on Twitter that “Democrats don’t want money from budget going to border wall despite the fact that it will stop drugs and very bad MS 13 gang members.” In another message posted a few minutes later, he wrote, “Eventually, but at a later date so we can get started early, Mexico will be paying, in some form, for the badly needed border wall.” Republicans from areas where the wall would be built appear hesitant about Trump’s plans to pay for it. A survey last week by The Wall Street Journal found that the $1.4-billion price tag for the first portion of the wall is not supported by any member of Congress who represents territory along the southwest border. There were recriminations on Sunday from allies of Trump. When some congressional Republicans balked at supporting health-care legislation the president supported, he deployed Mulvaney to threaten several of them with primary opponents. Rep. Mark Sanford, RepublicanSouth Carolina, confirmed as much while appearing on State of the Union on Sunday. “I think that those kinds of threats are counterproductive,” Sanford said. “It all, I guess, fits in love, war and politics. But I don’t think it’s particularly productive to his own legislative agenda, and we’ll see what comes.” New York Times News Service
could be seen as a disappointment for the Front, based on polls before the vote. “She’s clearly done better than in 2012,” said Joel Gombin, a Front expert at the University of Picardy Jules Verne, calling it a half victory. “But at the same time, the result is below what the Front was hoping for, and what the polls were saying.” Gombin said the results suggested the Front could also fare poorly in crucial legislative elections in June. In order to prevail against Macron, Le Pen must gain the votes of over half the Fillon supporters, Gombin has said. But no poll shows her as achieving that result within a Fillon electorate that is conservative but hardly radical. “The Front was unable to get voters on the right,” Gombin said. “And it does seem as though the dynamic of the Republican Front will prevail,” he added. “For the moment, I can’t say there will be any cracks in it.” Gombin predicted a rejection inside the Front of the centristoriented turn pushed by technocrats like Le Pen’s closest adviser, Florian Philippot, and a return to its hard-right roots. Philippot was in television studios on Sunday night, ostensibly relishing the sharp ideological
battle to come with Macron, who rejects Le Pen’s economic protectionism and is strongly in favor of France’s European partnerships. “We’ve been able to impose this idea of patriotism at all levels,” Philippot said. “It’s really going to be about private interests”—the Front regularly derides Macron as the candidate of the “banks”, as he is a former investment banker— “against the interests of the nation”. But at polling places on Sunday in Paris, voter after voter expressed fear of a Le Pen victory, even if there was no great enthusiasm for the youthful, untested Macron. Many said they had difficulty even stomaching the prospect of the National Front making it to the second round. “That Marine Le Pen is not in the second round—that’s what I want,” Fabienne Zellner, who runs a youth-aid agency, said outside a polling station in Paris’ heavily immigrant 18th Arrondissement. “That’s what I want.” Myriam Bellehigue, a university professor in the more bourgeois 9th Arrondissement, voted for Macron “without much” enthusiasm. “But, and I’ve been saying it for weeks,” she said, “the extremes are just not possible.” New York Times News Service
Traders nix chances of a Le Pen presidency
M
arkets trimmed their hedges against a Marine Le Pen victory on Monday, judging that the outcome of France’s first-round presidential poll reduced the odds of her winning office and seeking an exit from the euro. Anxiety the ballot would deliver a market surprise akin to those seen after President Donald J. Trump’s win and the United Kingdom referendum faded as most Asian stocks and the euro jumped with higher-yielding assets. Volatility bets were cut, while havens took a beating after the vote put Emmanuel Macron in pole position to become the country’s next president on May 7. “A collective sense of relief that the global economy is over another hurdle should see a risk on rally,” said Michael McCarthy, CMC Markets’ Sydney-based chief market strategist.
Here’s how the moves played out:
The euro soared the most in more than five months, while the yen, which has gained steadily this year amid a global cocktail of geopolitical tension, slid the most in four years versus the common currency. The drop in one-month implied volatility in the euro-yen rate outpaced that for the euro-dollar, a sign risk sentiment has improved marked ly fol low ing the f irst round, according to SMBC Trust Bank Ltd. Still, euro-greenback
one-month implied volatility was headed for its biggest decline on a closing basis on records going back to 1998. We’re seeing “a sense of relief from the markets, especially given that the first round of results have pretty much been what the market has been expecting”, Jingyi Pan, a market strategist in Singapore at IG Asia Pte Ltd. “This provides more stability for the euro region.” While Chinese stocks shrugged off the bullish mood, the yen’s drop ensured Japanese equities led the charge in Asia, with the Topix index jumping more than 1 percent. Futures on the S&P 500 Index pointed to gains in the United States—rising as much as 1.1 percent in early Monday trade. A Macron victory also means the European Central Bank may be able to countenance tapering stimulus toward the end of this year, Anne Anderson, who oversees the equivalent of $19.8 billion as head of Australian fixed income at UBS Asset Management, told Bloomberg TV. The yen wasn’t the only safety play to see declines, with gold and US Treasuries taking a hit with a swathe of Asian government bonds too. Gold fell as much as 1.5 percent and the benchmark 10-year US yield climbed six basis points to 2.31 percent. In Asia, the cost of insuring corporate and sovereign bonds from default fell the most in five weeks. Bloomberg News
A8
Tuesday, April 25, 2017
The World BusinessMirror
Trump phone calls with China and Japan leaders
China’s Xi urges restraint on N. Korea
B
EIJING—President Donald J. Trump and his Chinese counterpart, Xi Jinping, discussed growing tensions over North Korea’s advancing nuclear arms program, with Xi urging Trump to show restraint despite signs that the North may be preparing a nuclear test. This month Trump has used a meeting with Xi in Florida, a follow-up phone call, interviews and Twitter messages to press Xi to do more to deter North Korea from holding additional nuclear and missile tests. The latest call between the leaders—Monday morning in Beijing—came amid warnings that the North may be preparing another atomic-test explosion. In the latest call, the third between the two leaders, Xi told Trump that China opposed any such steps by North Korea, but he also nudged Trump to show restraint, according to a report on Chinese television. “China adamantly opposes any actions in contravention of the United Nations Security Council resolutions,” Xi said, according to the report, evidently referring to a series of decisions by the council to punish North Korea for its nuclear and missile programs. “At the same time, it is hoped that all sides exercise restraint and avoid doing things that exacerbate tensions on the peninsula,” Xi said, referring to the Korean Peninsula. “Only if all sides live up to their responsibilities and come together from different directions can the nuclear issue on the peninsula be
resolved as quickly as possible.” The comments reflected growing Chinese fears that the tensions between North Korea and the United States and its Asian allies could spiral into outright military conflict. That widening rift is presenting China with hard choices between its long-standing ties to North Korea and its hopes for steady relations with the United States. Trump also spoke with Prime Minister Shinzo Abe of Japan, a close US ally, on Monday morning in Tokyo, Abe told reporters. “North Korea’s nuclear and missile program is an extremely serious threat to security not only in the international community but also for our country,” Abe said. “We will continue to closely cooperate and maintain the high level of warning and surveillance. We will respond resolutely.” The White House did not immediately issue its own accounts of Trump’s calls with Xi and Abe. But Washington and allied governments believe North Korea’s weapons development is getting closer to mastering the means to hit the continental US with a ballistic missile. And they have become increasingly impatient with China to do more to rein in North Korea.
North Korean school girls react upon seeing their photograph being taken as they walk along Mirae Scientists Street in Pyongyang, North Korea, in this April 19 photo. Tensions have spiked in recent weeks over North Korea’s advancing nuclear technology and missile arsenal. But in Pyongyang, where war would mean untold horrors, few people seem to care much at all. AP/Wong Maye-E
North Korea did not proceed with a nuclear test on April 15, which some experts had expected, but work apparently resumed at its atomic-test site in Punggye-ri, said analysts who have assessed satellite images of the site. The Chinese government has increased some pressure on North Korea, which traditionally depends on China for much of its trade, foreign currency and energy. In February China officially suspended coal shipments from North Korea, and a prominent Chinese newspaper has also raised the
threat of choking oil shipments to the North. Yet, Beijing also argues that Washington must also do more to end the volatile impasse with Pyongyang. Chinese diplomats have urged the US to suspend major military exercises with South Korea in return for North Korea suspending nuclear and missile tests. X i ’s gover n me nt h a s a l so fiercely opposed an antimissile system—the Terminal High Altitude Area Defense system—that the Trump administration has begun installing in South Korea. China argues that the system
M
People hold their hands up during a silent protest outside the Venezuelan Episcopal Conference in homage to the at least 20 people killed in unrest generated, after the nation’s Supreme Court stripped congress of its last powers, a decision it later reversed, in Caracas, Venezuela, on April 22. The protest is the latest mass gathering in a wave of tumult that has rocked the nation over the last three weeks, as demonstrators continue to press for new elections. AP/Fernando Llano
rate that is among the highest in the world. Venezuela’s economy shrank 18 percent in 2016 and is expected to contract another 8 percent this year. It has the highest inflation of any country and its people scrounge for basic necessities. About 18,000 Venezuelans applied for political asylum in the US in 2016, the largest group by nationality and more than double the 7,300 applications Venezuelans filed in 2015. Many of them are expected to be denied. The Venezuelans who came to the United States during the Chavez years tended to be wealthier, often members of the elite whose businesses had been seized in expropriations or whose economic clout was perceived as a threat. In the US they often obtained legal residency with investment visas, opening enterprises in South Florida, where most have settled. Many of the Venezuelans now seeking food and other assistance in South Florida were once middle-class
briefs
Haiti leader to plead guilty in U.S. drug case
MIAMI—A former Haitian coup leader is expected to avoid a life sentence in a plea deal he’s scheduled to make in a US court. Federal court records in Miami show Guy Philippe will plead guilty on Monday. Philippe had been scheduled to stand trial on May 1. Philippe faced a potential life prison sentence if convicted of drug smuggling and money-laundering conspiracy charges. His attorney, Zeljka Bozanic, confirmed he’ll plead guilty in a deal with prosecutors that avoids a life sentence. Philippe led a 2004 Haitian uprising that ousted then-President JeanBertrand Aristide. He was elected to the Haitian Senate last November but was arrested and brought to the US in January before taking office. Philippe unsuccessfully claimed he was immune from US charges as a senator. AP
Cement multinational C.E.O. resigns after Syria deals
could also be rejiggered to spy on its missiles. But White House officials have said North Korea must prove it is serious about dismantling its nuclear and missiles programs before new negotiations are possible. In their latest call, Xi told Trump that he wanted to work with the US. “International circumstances are changing rapidly, and it’s extremely necessary for China and the US to maintain close contacts and promptly exchange views on major issues,” Xi said.
New York Times News Service
Venezuelans struggle in US as their country implodes
I A MI—People crowd outside a church near Miami’s international airport, chatting about family and friends left behind in Caracas, Valencia and Maracaibo, as they wait more than an hour to receive rice, beans, yogurt and other food for their families. At a storage space not far away, about 60 other Venezuelans line up for free sheets, towels, cookware and other goods donated to help them get on their feet in their new country. Volunteers at South Florida social service organizations say they have seen an increasing number of Venezuelan seeking help. It’s a reflection of the deteriorating situation in Venezuela, where the opposition has held massive protests against President Nicolas Maduro for his handling of the economy and a Supreme Court decision that briefly stripped the opposition-led congress of most of its power. “I never thought I would need to receive food but the time has come and I don’t have a choice,” said 26-year-old Venezuelan lawyer Alejandra Mujica, who was among about 80 people waiting outside Our Lady of Guadalupe Catholic Church one recent afternoon. Venezuela was once among Latin America’s most prosperous countries, with the world’s largest proven oil reserves. During good times, Venezuelans who came to the United States largely did so as tourists or to go shopping. But the Venezuelan economy is now in freefall due to a plunge of oil prices and poor economic planning under the socialist government created by the late President Hugo Chavez, who took office in 1999, and continued under his successor, Maduro. The situation has grown worse because of capital flight and a crime
news@businessmirror.com.ph
18,000
The number of Venezuelans who applied for political asylum in the US in 2016, the largest group by nationality
professionals who decide they could no longer tolerate increasing misery, crime, food shortages and lack of medical care in their homeland. “Venezuela has become unlivable,” said Javier Corrales, a Venezuelan professor of Latin American studies at Amherst College in Massachusetts. Mujica, the young lawyer seeking help at the church, said she barely survived back in the city of Valencia, waiting in two-day lines to buy whatever was available in the supermarket. After she was robbed of her phone at gunpoint, she and her husband
decided to flee in September with savings of $3,500 and not much else. “There was no way to go on,” she said. At the storage space, 29-yearold Carmen Elena Rodriguez also found herself in unfamiliar territory. She earned a master’s degree in education in Caracas and now sells drinks at a farmers market to support herself. “It’s not easy what we are going through, but this assistance makes the road a little easier,” she said as she picked up donated dishes, a lamp and other items. Often the economic and political motivations Venezuelans give for leaving their homeland are hard to separate. Andreina Molina, 34, said she and her husband sold their electronics store and moved to the US last year in part because of the economic deprivation and the crime, but also because she belonged to an opposition party and had been threatened for participating in anti-government marches. “I came because of the insecurity, because of the political persecution,
the lack of food and for my kids,” she said. They spent their $10,000 in savings on the birth of a baby and other medical care. Her husband now drives a tow truck and she sells homemade pastries. “It has hit us hard. Sometimes we don’t even have enough to pay the rent,” Molina said. The number of Venezuelans in the US has tripled to around 273,000 since the year after Chavez was elected. The vast majority has settled in the Miami area, which has a large number of people from Latin America but a high cost of living. It is common here to encounter Venezuelans who are former accountants and managers working in low-level jobs or trying to make ends meet by pulling shifts with ride-sharing companies, such as Uber and Lyft. Some do not have legal immigration status and can’t work legally at all. “They sell their homes, they sell their cars and they come here with a little bit of capital that vanishes in a matter of months,” said Eduardo Gamarra, a professor of political science at Florida International University. Amid these struggles, charitable organizations have emerged to help them. A group whose name translates as Venezuelan Roots was started last year to provide clothing and household items at the storage space. The Catholic group Saint Vincent de Paul also has helped the Venezuelans. Most of the need is concentrated in Doral, a city near the airport, where many of them live. Patricia Andrade, one of the founders of Venezuelan Roots, said she sees a desperation in the newer arrivals that wasn’t there with those who came earlier. “Before, the people prepared for their move,” Andrade said. “Today, they are just looking to escape the horror.” AP
GENEVA—The top executive of LafargeHolcim announced on Monday that he would resign, citing “strong tensions” facing the Swiss-French cement maker since its admission last month that it had struck deals with armed groups in Syria—allegedly including the radical Islamic State group. The world’s largest cement maker said an internal investigation has concluded that CEO Eric Olsen was not responsible for or aware of any wrongdoing linked to now-discontinued Syria operations. LafargeHolcim announced the internal probe last month as it acknowledged having funneled money to armed groups in 2013 and 2014 to guarantee safe passage for employees and supply its multimillion-dollar plant there. LafargeHolcim said the review turned up failings in its internal compliance program and other controls, and said its board has mandated Olsen and his team to “implement remedial measures” before he leaves on July 15. AP
3 African countries chosen to test 1st malaria vaccine
JOHANNESBURG—Three African countries have been chosen to test the world’s first malaria vaccine, the World Health Organization (WHO) announced on Monday. Ghana, Kenya and Malawi will begin piloting the injectable vaccine next year with young children. The vaccine has the potential to save tens of thousands of lives if used with existing measures, the WHO regional director for Africa, Dr. Matshidiso Moeti, said in a statement. The challenge is whether impoverished countries can deliver the required four doses of the vaccine for each child. Mosquito-borne malaria infects more than 200 million people worldwide every year and kills about half a million, most of them children in Africa. Bed netting and insecticides are the chief protection. A global effort to counter malaria has led to a 62-percent cut in deaths between 2000 and 2015, WHO said. AP
Afghan army chief, defense minister resign following attack
KABUL, Afghanistan—Afghanistan’s army chief and defense minister resigned on Monday, following a Taliban attack over the weekend that struck a northern army base, killing more than 100 military and other personnel, officials said. The attack—the biggest ever by the Taliban on a military base in Afghanistan—involved multiple gunmen and suicide bombers in army uniforms who penetrated the compound of the 209th Corps of the Afghan National Army in northern Balkh province last Friday, killing and wounding scores. The Taliban claimed responsibility for the assault, which some estimates said killed over 130 people. President Ashraf Ghani accepted the resignations of the army chief of staff and the country’s defense minister. It was not immediately clear who would replace Defense Minister Abdullah Habibi and Army Chief of Staff Qadam Shah Shahim. AP
The Regions BusinessMirror
news@businessmirror.com.ph
Peza wants to offer lower power rates to ecozones in 3 Mindanao regions By Catherine N. Pillas @c_pillas29
T
HE Philippine Economic Zone Authority (Peza) is looking to offer preferential power rates in economic zones located in three regions in Mindanao in a bid to attract sizable manufacturing investments in underdeveloped Mindanao. Peza Director General Charito B. Plaza said the Autonomous Region in Muslim Mindanao (ARMM), Region 11 (Davao region) and Caraga Administrative Region (Caraga) will be the initial three regions where ecozones may receive a lower rate of P2.50 per kilowatt-hour. “The Department of Energy committed to give that rate to ecozones in Mindanao, and they asked for a list of the first three regions,” Plaza told reporters in a recent briefing. The Mindanao region is foreseen to have excess power of 1,000 megawatts (MW) in 2018, the Mindanao Development Authority was quoted earlier as saying, owing to the simultaneous operations of several coal-fired power plants in the region. Some prospective ecozone developers and investors are said to be interested in putting up agroindustrial and halal hubs in the southern region. More than the preferential power rates, Peza is open to again offer substantial power subsidies to large that manufacturing firms that are big electricity consumers. Presidential Executive Order (EO)
856, approved by former President Gloria Macapagal-Arroyo, provides for incentives on power discounts that will be sourced from the Industry Competitiveness Fund created by EO 796 in 2009. That EO was issued to attract power-intensive industries into the Philippines in support of foreigninward investments and business environment competitiveness. The EO said the ICF is used to recover any financial impact that Power Sector Assets Liabilities Management (PSALM)/National Power Corp. (NPC), Transco and Peza have incurred in the grant of special power rate through a reimbursement mechanism. The designated agency, may it be Peza or another investmentpromot ion agenc y, w i l l t hen transfer the reimbursement to the company, representing the discounts on the power utilized and fully paid by the firm at the onset of operations. The previous administration has been criticized for the slow rollout of the reimbursement, only giving out the amount in the last year of the period they’re given as a participant in the ecozone rate program (ERP). The ERP was created via a memorandum of agreement between the NPC.-PSALM and Manila Electric Co. in 2007, agreeing to give special power rates to particular, Peza-qualified ecozone locators. Plaza is eyeing to offer these special rates to potential big-ticket investors that Peza hauled in from the Middle East.
10,362 jobs up for grabs in 2017 Labor Day Job and Business Fairs in Central Luzon By Catherine Joy L. Maglalang Correspondent
C
ITY OF SAN FERNANDO, Pampanga—At least 10,362 overseas and local careers will be up for grabs during the 2017 Labor Day Job and Business Fairs in different parts of Central Luzon, based on a release made by the Philippine Information Agency. “Around 7,575 job vacancies for local employment will be offered from 143 participating companies from various industries. We are also expecting around 2,787 job vacancies for overseas employment from 24 private recruitment agencies, as processed by the Philippine Overseas Employment Administration,” said Ana Dione, the Department of Labor and Employment (DOLE) director in Central Luzon. “The vacancies are preliminary figures submitted by the DOLE Field Offices in coordination with the Public Employment Service Offices in the region. They are expected to rise in the days to come.” Carrying the theme “Matatag na Kabuhayan at Trabaho Tungo sa Progresibong Pagbabago”, the Labor Day Job and Business Fairs on May 1 shall simultaneously be held in SM Baliuag, SM Pampanga, SM Clark, and SM San Fernando Downtown.
Also in Metro Town Mall in Tarlac City, Freedom Park Capitol Grounds in Cabanatuan City and Ayala Harbor Point Mall in Subic Bay Freeport Zone. A similar activity will, likewise, be held on May 5 at Vista Mall Bataan. These regional job and business fairs adopted the Trabaho, Negosyo, Kabuhayan (TNK) concept of the DOLE and the Department of Trade and Industry (DTI). “TNK aims to achieve full employment and creation of jobs in key employment generators [KEGs] specifically in the manufacturing, agribusiness, construction, tourism, ITBPM, transportation and logistics, and retail and trade,” Dione said. “The Job and Business Fairs are expected to increase the rate of applicants hired in KEGs; apprise and advocate job seekers to consider entrepreneurial and business opportunities; and build strong partnerships among concerned agencies, such as the DOLE, the DTI, local government units and stakeholders from the private sector,” she said. The Regional Tripartite Wages and Productivity Board 3 has issued Wage Order RBIII-20, which provides a P16 increase in the daily minimum wage for private-sector workers in Central Luzon effective May 1.
Editor: Efleda P. Campos • Tuesday, April 25, 2017 A9
DA to seed major rivers, lakes with millions of fish fingerlings
T
By Jasper Emmanuel Y. Arcalas
@jearcalas
HE Department of Agriculture (DA) is eyeing to seed 210 million fingerlings of indigenous and noninvasive fish species into the country’s major river basins and lakes by 2022 in its bid to hike fisheries production. Agriculture Secretary Emmanuel F. Piñol said he ordered the Bureau of Fisheries and Aquatic Resources (BFAR) to craft the National Inland Fisheries Enhancement Program (Nifep) that aims to “provide Filipinos greater access to available food and address poverty and hunger in the countryside”. “[I ordered the BFAR to craft Nifep], because of my realization that rivers and lakes in the country no longer have the same amount of fish population as they had many years ago, when the use of chemicals in agriculture and illegal-fishing methods, like ‘electric fishing’ and cyanide, was not widespread,” Piñol said in a statement on Monday. “Overfishing and the use of illegal and destructive-fishing methods have virtually decimated the indigenous fish species in the major lakes and rivers of the country,” Piñol said. Piñol said the DA’s flagship program under Nifep, called Project Basil, or Balik Sigla sa Ilog at Lawa, aims to rejuvenate the country’s
major bodies of water to recover from the lost production incurred in the previous years. “By 2018 an estimated 26 million fingerlings will be seeded in the rivers and lakes, and by the end of the term of President Duterte, Project Basil, targets to seed about 210 million fingerlings,” Piñol said. Project Basil will cover seven identified major lakes and six major river basins across the country over the next five years, Piñol said. The lakes include Laguna de Bay, which has 90,000 hectares; Lake Lanao, 34,700 hectares; Taal Lake, 23,4000 hectares; Lake Mainit in Surigao del Norte, 17,300 hectares; Naujan Lake in Oriental Mindoro, 11,000 hectares; Maguindanaos’ Buluan Lake, 6,500 hectares; and Lake Sebu, situated in South Cotabato, 354 hectares. The major rivers included in Project Basil are Cagayan River Basin, 2.5 million hectares; Mindanao River Basin, 2.3 million hectares; Agusan River Basin, 1 million hectares; Pampanga River Basin, 974,000 hectares; Abra
River Basin, 512,500 hectares; and Bicol River Basin, 377,100 hectares. “Among the indigenous species seeded in the lakes and rivers are ayungin, biya, kanduli, martinique, the native catfish, or hito, and the blackhead eel, or igat,” Piñol said. “Acceptable fish species not considered threats to the ecological balance in the lakes and rivers, like tilapia and bangus, will also be introduced,” Piñol said. The DA chief said Project Basil will start in Laguna de Bay this year to address the expected shortage of fish supply in Metro Manila due to the dismantling of fish pens in the lake. “Local officials of towns, cities and provinces surrounding Laguna de Bay and other stakeholders will be invited by the DA to a forum before the end of this month for the presentation and validation of Project Basil,” Piñol said. “With the launching of the program in Laguna de Bay, even Metro Manila residents will soon be able to catch large tilapia and bangus in the Pasig River,” Piñol said. He pointed out that each and every body of water targeted by Project Basil shall undergo a scientific and socioeconomic evaluation before the production rehabilitation starts. “Lake or river profiling will involve a scientific study on the actual condition of the bodies of water and ecological considerations,” he said. “This would mean that no foreign fish species will be introduced in an area if it could threaten the balance of the indigenous fish population.”
Metro Pacific welcomes new LGU environmental partners
PRDP allots ₧860M for FMR rehab in Davao region
F
M
ETRO Pacific Investments Foundation, the social responsibility arm of leading conglomerate Metro Pacific Investments Corp. (MPIC), welcomed its new partner local governments for its Shore It Up at the Confluence Conference held recently in Antipolo City. MPIC welcomed the municipalities of Medina (Misamis Oriental), Cordova (Cebu) and Mabini (Batangas) as the award-winning environmental program begins its countdown for its 10th year in 2018.
Medina hosted this year’s Shore It Up underwater cleanup at Duka Bay Resort, a showcase of an artificial reef system in Gingoog Bay. Cordova will host to a mangrove conservation and propagation program, while Mabini is home to a marine laboratory, being the nearest dive spot to Metro Manila. Incepted in 2009, Shore It Up has mustered over 75,000 volunteers from Metro Pacific firms, the government sector, academe and civilsociety groups for underwater and coastal cleanups, mangrove propa-
gation, giant clam rearrangement, artificial reef restoration, environmental education for schoolchildren through the Junior Environmental Scouts (JES) and livelihood for coastal villagers. Shore It Up is a recipient of the Public Relations Society of the Philippines’s Anvil Award of Merit for sustained environmental program for the environment from 2011 to 2016, as well as the Best Corporate Social Responsibility Program in the Corporate Governance Asia Award.
Amadeo, Cavite, relived coffee culture at weekend festival
T
Piñol also said the DA will coordinate with the local government units and local communities will be tasked to monitor and sustain Project Basil in their respective bodies of water. “Lake and river management would involve the local government units [LGUs] that will be tasked to enact development plans. The LGUs will also handle the monitoring of fishing activities and in reporting the volume of the catch,” he said. “Communities will also be involved in the establishment of hatcheries so that future fingerling requirements will be bought by the government from them. Communities will also be involved in the establishment of hatcheries so that future fingerling requirements will be bought by the government from them,” he said. Unfavorable weather caused the country’s fisheries production to decline by 6.34 percent to 4.35 million metric tons (MMT) in 2016, from 4.69 MMT in 2015, the Philippine Statistics Authority (PSA) said. “The decline was reflected in all subsectors, namely, commercial [6.35 percent], municipal fisheries [6.47 percent] and aquaculture [6.27 percent],” the PSA said in its report, titled “Fisheries Situation 2016”. The PSA report showed municipal fisheries production, which accounted for 26.13 percent of total output, declined to 1.4 MMT in 2016, from 1.22 MMT in 2015. Of the figure, 976,838 metric tons (MT) were caught in marine municipal-fishing grounds. This was 3.45 percent lower than the 1.01 MMT recorded in 2015.
HE municipality of Amadeo, Cavite, reclaimed its old glory as the country’s top coffee producer, when it revived the Pahimis Festival from April 21 to 23. Incepted in 2002, when the town was proclaimed “The Coffee Capital of the Philippines” by then-President Gloria Macapagal-Arroyo, the event aims to promote the town’s coffee industry and support the local tree growers. Mayor Albert Ambagan said the festival is themed “Coffee History and Tradition in Modern Generation”, which showacases the crop’s vital role in the historic evolution of Amadeo and of the country. He said the revitalized event also seeks to encourage the neighboring upland towns to take the century-old coffee industry to the next level. The town produces Liberica, Robusta, Excel-
sia and Arabica beans, which helped save the booming local industry when an infestation hit Brazil in the late-1800s. Its most popular brand is the export-quality Café Amadeo, which is run by a local development cooperative. A thanksgiving tradition, Pahimis traces its roots to the olden days when coffee farmers gave away their last can of harvest to others, believing that by doing so, they will be blessed with a more abundant harvest next season. Festivities kicked off on April 21 with a trade fair, farm tours, the Coffee Symposium hosted by Razorchefs Philippines and the Culinary Generals of the Philippines, and a talents’ night and variety show. Highlighting the three-day event was the street dancing and parade presentation, and Barista Master Competition (Flair and Cock-
tail Category), which put to the test the skills of baristas from all over. Celebrations drew to a close on April 23 with the XC Agri-Adventure Challenge, which trekked Amadeo’s offroad bicycle trails and the Barista Master Competition (Latte Art and Espresso). Ambagan said the Pahimis fest put the spotlight on the municipality as a farmtourism destination, an outdoor getaway for mountain bikers and weekend market for organic produce. Aside from coffee, Amadeo offers healthy agricultural products at its Baraka flea market every Saturday. The festival is supported by Globe, Destileria Limtuaco and Co. Inc., Café Amadeo, Olivia’s Coffee, Barista Depot, Razorchef Philippines, Culinary Generals of the Philippines and Allegro Beverages.
A R M-TO -M A R K ET road s (FMRs) worth P860 million in the Davao region will soon ground break after the Regional Program Advisory Board (RPAB) approved their funding under the Department of Agriculture-Philippine Rural Development Program (DA-PRDP). The road-rehabilitation project is 59.4 kilometers long. The province of Davao del Sur got the biggest chunk of the approved fund with P373.9 million for two road projects. In Sulop the 15-km road rehab from Waterfall to Osmeña costs P224.5 million, while P149.4 million is allocated for another road rehab connecting San Isidro, Hagonoy to Km. 67, Matanao, with a length of 14.3 kms. Around P300 million is apportioned for the three road projects in Mati City, Davao Oriental. These are the rehabilitation of NHJ Sains to Central FMR (6.6 kms) worth P118 million; Bañoz FMR (5 kms) for P97.5 million; and Colina FMR (6.8 kms) for P84.5 million. Compostela Valley province has a share of P185.9 million for a 10.6-kilometer FMR connecting Barangay Cabinuangan to Barangay Magangit in the municipality of New Bataan. Davao del Norte has an allocation of P159.8 million for Sonlon-Camansa FMR with a road length of 9.8 kms. in New Corella. The approval of the project proposals by the RPAB paves the way of improving road networks in Davao region, linking production areas to the markets. “Better road networks boost the economic activities of the project beneficiaries by reducing travel time, postharvest losses and transportation costs of passengers and their priority commodities, ” said Ma. Febe T. Orbe, deputy program director of PRDP-Regional Program Coordinating Office XI. Janelle Flores, DA XI
A10 Tuesday, April 25, 2017 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
Coal-free country
L
ast Friday, coinciding with Earth Day celebrations worldwide, Britain’s National Grid announced to the media it produced 24 hours of electricity without burning coal, the first time Britain’s power went coal-free in 135 years. “First coal-free day in Britain since Industrial Revolution” read the BBC news headline. Britain’s National Grid has gradually been replacing its coal-based electricity plants. The country already went coal-free for several hours during several periods over the past few years. Last May, for instance, solar power in the UK produced more electricity than coal across the whole month, according to research by analysts at Carbon Brief, a UK-based web site covering the latest developments in climate science, climate policy and energy policy. The British government has pledged to phase out all coal-fired electricity by 2025. Coal accounted for only 23 percent of Britain’s electric power in 2015, and was only at 9 percent last year. But while the coal industry is undergoing what many analysts and investors say is a permanent downsizing not only in Britain, but in many parts of the world, coal demand in Southeast Asian countries, including the Philippines, is set to triple in the next 25 years. A recent BusinessMirror special report, “Power struggle: Solar, wind challenge coal as more affordable energy source”, said the Philippines has 30 coal-operating contracts in the development and production phase; 48 coal-operating contracts in the exploration phase; and 83 small-scale coal-mining operators as of July 2016. According to the Department of Energy, coal has the highest contribution to the country’s current power-generation mix at almost 45 percent as of 2015. Based on the current installed power-generation capacity of 18,765 megawatts (MW), a 45-percent share translates to $8.54 billion in coal investments. It’s not an exaggeration to say the coal industry is booming in the Philippines, bucking a global trend and giving gasping coal exporters hope. We seem to be embracing coal while others are walking away from it, even after our country has officially ratified its commitment to the Paris Agreement to reduce carbon emissions by 70 percent in 2030. The construction of a coal plant anywhere in the Philippines would always face significant environmental and social challenges, more so now that climate-change concerns have become a global focus and other countries are greening their grids. Plans to build more coal plants have already sparked protests and negative media attention from environment activists in various parts of the country. The government says coal plants are part of a critical energy infrastructure that can provide our fast-developing industries and regions with the much-needed energy security they lack right now. Energy officials also say modern coal plants can be cleaner and safer than most conventional coal plants, as they use new and advanced technology, and that demands to produce 100-percent electricity from renewable energy are impossible. But there is also clearly something wrong in the picture when a country that has abundant renewable-energy resources still has a strong dependence on coal power plants, even as other countries are shifting to renewable energy in the hope of curbing climate change. Carbon emissions from coal are the worst, according to a recent Greenpeace study, “Coal: A public health crisis [Diseases and deaths attributed to coal use in the Philippines]”. Deaths due to stroke, heart and other cardiovascular diseases, and respiratory illnesses due to air pollution may go up from the current 960 annual premature deaths to 2,410 deaths per year, with the construction and operation of more coal power plants in the Philippines, the study said. The study was based on research conducted by Harvard University on the impacts of emissions coming from coal-fired power plants in selected countries in Asia. The Philippine version evaluated 13 operational coal-fired power plants in the Philippines with a combined installed capacity of 3,799.10 MW, as well as the potential impacts of plans to build new coal-fired power plants, which could dramatically increase levels of sulfur dioxide, nitrogen oxide and other harmful emissions. We urge the government to continue exploring the many currently available alternatives to coal power that would allow us to meet our energy needs while reducing emissions of greenhouse gases and other pollutants, including renewable-energy sources, like wind, solar, hydro and biomass. While the direct price of electricity from the country’s coal plants may be low, it doesn’t reflect the staggering and lasting costs of coal-related air and water pollution, mining accidents, permanently altered landscapes and climate-change effects.
Since 2005
BusinessMirror A broader look at today’s business ✝ Ambassador Antonio L. Cabangon Chua
President Duterte’s infrastructure program Manny B. Villar
THE Entrepreneur Continued from A1
M
any unsolicited proposals are coming out, which are all good, and because financing will come from the private sector, we can expect that many of these will be realized. The private proponents crafted the projects, so it’s reasonable to expect that they would work hard to make it successful. The first unsolicited proposal under the Duterte administration, which was submitted on July 5, 2016, was for the construction and operation of a 9-kilometer, 11-station elevated light rail transit line that would run from Diliman in Quezon City to Lerma Street in Manila. The proposal of East West Rail Corp. and Alloy MTD Group, which includes a 30-year concession, is now undergoing review by the technical working group of the Investment Coordination Committee for review.
I know for a fact that all big groups now are furiously preparing feasibility studies for their projects. Some have already submitted unsolicited proposals, including the following: A partnership between AC Infrastructure Holdings Corp.—the infrastructure arm of Ayala Corp.—and SM Investments Corp. submitted to the Department of Public Works and Highways on March 31 a P25-billion proposal to design, finance and build an 8.6-kilometer elevated toll road
Japan is invading...the PSE
Founder
Publisher Editor in Chief Managing Editor Associate Editor News Editor City & Assignments Editor Senior Editors
T. Anthony C. Cabangon
Max V. de Leon Jennifer A. Ng Dionisio L. Pelayo Vittorio V. Vitug Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos
Online Editor Social Media Editor
Ruben M. Cruz Jr. Angel R. Calso
Creative Director Chief Photographer
Eduardo A. Davad Nonilon G. Reyes
Chairman of the Board & Ombudsman President VP-Finance VP Advertising Sales Advertising Sales Manager Group Circulation Manager
Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Marvin Nisperos Estigoy Aldwin Maralit Tolosa Dante S. Castro
BusinessMirror is published daily by the Philippine Business Daily Mirror
HOM
Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines. Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025. (Advertising Sales) 893-2019; 817-1351, 817-2807. (Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.
www.businessmirror.com.ph
Printed by brown madonna Press, Inc.–San Valley Drive KM-15, South Superhighway, Parañaque, Metro Manila MEMBER OF
John Mangun
Jun B. Vallecera
OUTSIDE THE BOX
T
he Philippines spends a considerable amount of effort on its investor road shows, highlighting everything from government infrastructure projects to private investments for local companies raising funds. Those with big money are treated as VIPs, afforded five-star banquets and, perhaps, a goodie-bag or two. But smaller investors can be just as valuable if you can find enough of them. Of course, the Philippine Stock Exchange (PSE) also does its best to attract foreign money. The PSE goes to Japan every year—in their words —to showcase the biggest Philippine corporations with the purpose of convincing institutional investors to place funds in the Philippines. But while all of this is going on, noninstitutional investors are finding their way here also. A Japanese-run property brokerage house, Seven Seas Properties Corp., has been successfully marketing Philippine real estate to its Japanese clients for some time now. And many of their clients
were seeking information about local stock-market investing. A few months ago, their partner—Eagle Equities—brought some of their investors to the Philippines to show the market first hand. One participant was Emi Ogura, a commercial model from Okayama prefecture, had been investing for about two months before visiting the Philippines. She said she made a 25-percent return in two months investing in issues based on her chart analysis. These included Agrinurture Inc. (ANI) and gaming operator Melco Crown (Philippines) (MCP). Another Japanese gentleman bought shares of blue-chip issues, like San Miguel Corp. and Metro Pacific. Why would these Japanese seek out profits in the Philippines? Look
from Santa Mesa in Manila to the Mall of Asia in Pasay. The project includes the operation and maintenance of the toll road for 35 years. San Miguel Corp. (SMC) has submitted to the Department of Transportation a plan to build a new airport in Bulacan province. The project, which is estimated to cost P700 billion, will be built and financed by SMC without any guaranty or subsidy from the government. The proposed airport, which will initially have four runways (against the single runway of the Ninoy Aquino International Airport), can serve 100 million passengers a year. Metro Pacific Investments Corp. (MPIC), the local investment arm of the Hong Kong-based First Pacific Group, is conducting a feasibility study for a 6-kilometer expressway that will link the Manila-Cavite Expressway (Cavitex), which is also operated by MPIC, to Sangley Point in Cavite. All-Asia Resources and Reclamation Corp., a consortium led by tycoon Henry Sy and the Tieng family, proposes to build an international airport, seaport, economic zone and real-estate components in Sangley
at the issues they invested in. Probably, all Japanese stock investor know that their own “San Mig”—Kirin Holdings Co.—has a large position in San Miguel Brewery. They also fully understand the potential profitability of a diverse conglomerate like Metro Pacific. But why ANI and MCP? Love them or hate them, almost everyone wants a piece of the China story as long as it is profitable. ANI is one of the Philippines’s largest mango exporters with joint-venture agreements selling Philippine agricultural products in China. ANI also owns the local franchise of USbased Tully’s Coffee and has a joint venture with Tully’s Japan to open stores in China. Further, its “Big Chill” subsidiary is raising money to open in China. Casino gambling may not be legal in Japan, but they know full well about South Korea, Macau, Malaysia and Singapore. Here is MCP joint venturing with one of the Philippines’s largest conglomerates—the SM Group—in a sunrise industry. What other “poor” country has attracted literally billions of dollars for its gaming industry? The gaming industry helps build the economy through foreigners coming to the Philippines. These Japanese investors are looking for profit opportunities and they are finding
Point. The airport component of the P1.3-trillion project will have a capacity of 90 million passengers a year and may start operating in as early as five years. Based on these developments, I think that by next year we will be seeing a flurry of projects being started —from north to south. Unsolicited proposals are a big thing, and these might end up as the best infrastructure policy that the government has ever done. Private groups are more eager in submitting their own projects now because of the Duterte administration’s welcoming attitude toward unsolicited proposals, which was in contrast to the unenthusiastic attitude of the previous administration. Together, the government-initiated projects and the unsolicited undertakings by the private sector should help the Philippines to score big in the field of infrastructure. When completed, these projects will also cement the upward trajectory of the economy and sustain fast-paced growth.
For comments, e-mail mbv.secretariat@gmail. com or visit www.mannyvillar.com.ph.
them here on the PSE. The gentleman who owns San Miguel shares also owns DoubleDragon Properties Corp., EEI Corp. and Megawide Construction Corp. A growing economy means more corporate profits. It is a good cycle for wealth creation. These purchases also show a belief that the administration will hold to its “build, build, build” promises for infrastructure development. Now we are informed that Japan’s Daiwa Securities Group Inc. has bought nearly 15 percent of COL Financial Group, the PSE’s largest online stock broker. Daiwa is calling it a “portfolio investment”. And that investment will become more valuable when Daiwa’s clients start pushing the “Buy Button” on COL’s online trading platform. The old saying is that you must follow the money. From the looks of it, this is only the beginning of Japanese investment funds coming to the Philippines and the PSE. The fact that it is ordinary investors makes it even more important. There are many more small investors than there are big investors. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.
Opinion BusinessMirror
opinion@businessmirror.com.ph
April 26: World Intellectual Property Day Josephine Rima-Santiago
Intellectual Property Matters
T
he role of intellectual property—patents, trademarks, industrial designs, utility model, copyright—in encouraging innovation and creativity takes center stage every April 26, as the world celebrates the World Intellectual Property Day. This year’s theme, “Innovation: Improving Lives”, highlights the impact of innovation in the numerous aspects of our lives, such as food security, comfort, connectivity, safety, transportation, communication, health care and sports. In all these, the intellectual-property (IP) system boosts inspiration for innovators to continuously create, improve and manufacture. An innovation that is protected by IP enhances the chances of making better products and services accessible to the public. n Innovation and the role of the IP system. One of today’s buzzwords is innovation. Products, services and spaces are marketed as innovative. People and businesses claim themselves to be innovators one way or another. Inevitably, our indiscriminate (ab)use of these related words across every field imaginable leads to its meaning being diluted to insignificant proportions. What does innovation mean, and how does it work, anyway? Author Scott Berkun proposes a concise definition: Innovation is significant positive change. (The definition of innovation will be discussed in a future column.) In his book Driving Innovation, Author Michael Gollin describes the stages of “innovation cycle” and relates how any the intellectual property system plays an important role in each. The first stage is creative work: creators of innovations readily use the pool of available resources in their work. The second is adoption by society: the work gets shared with the immediate community for further development and collaboration. The third and final is access to knowledge: allowing the public to gain access becomes essential to moving the innovation cycle forward from this third stage back to the first. One of the key features of the IP system is to incentivize creative work by providing exclusive rights to the creator for a limited period of time. But once an innovation is protected, the system plays the vital, yet delicate, role of balancing the private interests of the creator with that of the general interests of the public. n Innovation: improving lives. Undeniably, innovation plays an indispensable role in satisfying humankind’s never-ending desire to improve lives. To illustrate: some 5,000 years ago, we managed to create one of the most important and breakthrough innovations of all time—the wheel. In our unceasing pursuit of bettering ourselves, we caused the lowly wheel to transform from one shape, size and material to another. Thus, through human ingenuity, we enabled ourselves to travel around the globe on land, sea, or air. Not only that, we managed to embark on journeys to the depths of the earth, to the moon, and even beyond. Some 200 years have passed since the invention of the steam locomotive that marked the start of mechanized production in the First Industrial Revolution. Electricity gained prominence over water and steam and mass production became vogue (this was the time when the assembly line was patented) during the Second. Automated production via electronics and information technology or the computers are features of the Third. We are now at the Fourth Industrial Revolution built upon the Third: a frenzied whirl of digital technologies and innovations managing to cut across virtually all physical, digital and biological spaces, almost blurring the clear lines of the traditional IP regimes.
Some 5,000 years ago, we managed to create one of the most important and breakthrough innovations of all time—the wheel. In our unceasing pursuit of bettering ourselves, we caused the lowly wheel to transform from one shape, size and material to another. Thus, through human ingenuity, we enabled ourselves to travel around the globe on land, sea, or air. In this day and age, we find inventions that provide significant positive changes to human lives. Driverless cars have already been tested in London. 3D printing is now being studied in its application for health care and surgery. Drone technology is now used for saving human lives and conserving wildlife, among others. Artificial intelligence and Internet of Things are used to facilitate interconnectivity and the sending and receiving of data. Many things in the past that were only figments of imagination in sci-fi books and movies are now here. n World Intellectual Property Day activities in the Philippines. The Intellectual Property Office of the Philippines (IPOPHL) is at the forefront of the local celebration of the World Intellectual Property Day. On April 23 the National Book Development Board celebrated the World Book and Copyright Day at the Quezon City Memorial Circle in an event entitled “Book Fiesta”. Various organizations (private and government, including IPOPHL) participated in the event that was attended by book artists, storytellers, students and children, among others. Other events this last week of the first National IP Month include: April 24 and 25, Workshop on the Collective Management of Performers’ and Producers’ Rights; April 26, World IP Day, launching of eInventionFile, an online application for patent through our web site, completing our entire array of electronic filing services for trademarks, utility models and industrial designs instituted for the ease of the public, and eDocfile for online submission of documents for trademark applicants; photo contest through the IPOPHL Facebook page; April 27 and 28, we are holding a free two-day seminar on “Making a Living Out of Music” at the University of the Philippines-Bonifacio Global City Campus. Interested members of the public may join and preregister through bit.ly/2pQvzNW. For more information about the plans and programs of IPOPHL, as well as other activities in celebration of the IPR month, please visit our web site, www.ipophil.gov.ph. Josephine Rima-Santiago, Ll. M., is currently the director general of the Intellectual Property Office of the Philippines. She has had more than 20 years of extensive experience in IP as a public servant, educator, practitioner and researcher. Reach her through jrsantiago@columnist.com.
Tuesday, April 25, 2017 A11
Asean: Progress amid diversity Edgardo J. Angara
T
his week opens the 30th Asean Summit, where the leaders of the 10 member-countries will meet at the Philippine International Convention Center (PICC) for the first of two highlevel meetings. This summit takes place as the Philippines plays host to yearlong celebrations, conferences and meetings on the occasion of the 50th founding anniversary of Asean. The Association of Southeast Asian Nations (Asean) was founded in 1967, when Indonesia, Malaysia, the Philippines, Singapore and Thailand signed the Bangkok Declaration. Brunei Darussalam, Vietnam, Lao PDR, Myanmar and Cambodia followed in that order in the intervening years. Today Asean is considered among the most successful regional supranational groupings in the world
(especially in light of Brexit)— having enjoyed a long period of stability and high levels of engagement among its members. Increasingly, Asean is becoming an attractive destination for investment, being the fourthlargest exporting region in the world, accounting for up to 7 percent of global exports. Its population is 630-million-strong, which the World Economic Forum (WEF)
noted to be the biggest among all geopolitical blocs. More than half of Asean’s large consumer base is under 30 years old. And as more Asean youth are better educated and trained, significant demographic dividends are seen in the years to come. In 2016 the combined GDP of the 10-nation bloc was worth $2.5 trillion, almost double the $1.3 trillion measured in 2010. During that same period, the World Economic Forum said GDP per capita across the region increased by 76 percent. Some project that by 2050, Asean would become the fourth-largest economy in the world. Such progress has been achieved amid immense diversity in religion, race and legal tradition. Three of the world’s major religions—Christianity, Islam and Hinduism—are practiced in the region and, at times, right next to each other. For instance, the world’s largest Muslim country (Indonesia) maintains brotherly ties with Asia’s largest Christian country (the Philippines).
Asean is also home to individuals of various racial origins, including Han Chinese, Indo-Aryan and Dravidian peoples from South Asia and Malay-Austronesians. Such racial divisions once led to violent outbursts of conflict, but in Asean people now live in peaceful coexistence with each other. There is also significant diversity in terms of legal traditions. Where most former British colonies, like Malaysia, Singapore and Brunei Darussalam follow common law (largely unwritten, precedent-based) systems, Thailand and Vietnam adhere to a continental or codal (“Napoleonic”) legal system. In contrast, the Philippines follows a mixture of the two. Throughout history, differences in religion, race and law have caused deep discord. But in its five decades, Asean exemplifies how unity and progress can be achieved despite such diversity. E-mail: angara.ed@gmail.com, Facebook and Twitter: @edangara
The country has an extractive, not inclusive, economy Cecilio T. Arillo
database
A
classic explanation of why it’s so is in the electricity bill. Looking at how much electricity is consumed, some 51 percent to 57 percent of the total electric bill is the cost of the power that the company buys from power generators (generation charge). Other reflected charges in the bill cover distribution costs, transmission charge, system losses charge, taxes and other charges. As the Philippines maintains its stature as one of the countries with the highest electricity rates in Asia, Filipino consumers continue to suffer from skyrocketing power rates. Concurrently, every day is a field day for Manila Electric Co. (Meralco), “the king” of the power industry, as it continues to rake in billions in profits. The reported 2016 net income of Meralco went up to P19.176 billion from P19.098 billion in 2015. For the fourth quarter of 2016, core income was at P4.6 billion, from the comparative quarter of 2015 at P3.10 billion, noting that there was a “dip” that time because the Supreme Court decision on real property taxes (RPT) came out and there had been items that they had included in the approvals.
How did Meralco turn up into such a moneymaking machine? Thanks to President Gloria Macapagal-Arroyo’s Electric Power Industry Reform Act, or Republic Act 9136 of 2001, consumers are obliged to pay for the electricity’s production costs, on top of the electricity they actually consumed. Thus, the generation charge when it buys from power companies and the transmission charge paid to the National Grid Corp. are automatically passed on to the consumers. This is the perfect archetype of an extractive policy: taking out resources (money) from the many (Filipino consumers who are forced to pay so much for electricity, while they can hardly afford the basic necessities for their daily lives) by the few (power companies, and in this
case the Meralco), all for raking in remarkable profits. It is not surprising, therefore, why 13.1 percent of the country’s population remain hungry, according to the Global Hunger Index, where the Philippines ranked 29th in the world, just behind Iraq and Lesoto. In Southeast Asia, we lag behind Indonesia, Malaysia, Thailand, Singapore and Vietnam. To further answer this question, we should take a glimpse at our history. For instance, the later part of the 1980s tells a different story. Filipino economist Felipe Medalla, who served as National Economic and Development Authority director general in President Joseph Estrada’s administration, expounded on this in a conference paper, titled Economic Integration in East Asia: a Philippine Perspective. “The Philippines,” he said, “is not as sanguine as China, Malaysia or Thailand about the implications of greater economic integration in the region is hardly surprising if one has looked at how the Philippine economy has performed since the second half of the 1980s, when international trade started to be significantly liberalized (beginning with the administration of President Corazon Aquino). “The Philippine economy actually grew more during the import-substitution and protectionist decades of
the 1960s and the 1970s than over the past 20 years.” Despite incontrovertible evidence, the Philippine Development Plan (PDP) for 2011 to 2016 approved by Cory Aquino’s son, President Benigno S. Aquino III, firmly upholds that protectionist measures are “policies that distort competition” and are “the main impediments to growth”. To aggravate this situation, instead of exporting capital goods as a way of integrating the Philippine economy with the global economy, where the first naturally gains more than the late comers, what we shipped off to almost every part of the world are our human resources. In the Overseas Employment Statistics of the Philippine Overseas Employment Administration (POEA), the country deployed a total of 2,391,152 overseas Filipino workers (OFWs) in 2014, roughly 600,000 of whom are new hires, and the figures keep on increasing up to the present. These glaring figures are proof of the lack of a concrete and comprehensive program for domestic job creation, and the massive exodus of our labor force is detrimental in the long run, as the country will eventually be depleted of invaluable human resources. To reach the writer, e-mail cecilio.arillo@ gmail.com.
France discards the politics of left and right By Therese Raphael Bloomberg View
F
or globalists rattled by Brexit and Donald J. Trump, the first round of the French presidential race was a relief. They should savor it. It probably won’t last. Turnout was nearly 70 percent. I live in one of France’s most important political centers—London—and here voters queued for hours (in polite English fashion) to cast their ballots. And this time, pollsters got it right: The hypernationalist Marine Le Pen will face a 39-year-old centrist reformer, Emmanuel Macron, from a political party that didn’t exist one year ago, in the final round of the contest on May 7. That’s a big change for France, which left its long-dominant political parties of both left and right gasping by the side of the road. But there won’t be an apocalyptic, turn-out-the-lightsas-you-leave-the-world second-round showdown between Le Pen and the antimarket statist Jean-Luc Melenchon. Both campaigned to substantially rewrite France’s relationship with Europe and the rest of the world, something Macron does not propose to do. Instead of this doomsday scenario, the largest share of the vote went to Macron, a blue-eyed reformer who’s easy to like. He is, without a doubt, a political phenomenon. Once part
of a Socialist government that has been thoroughly rejected by voters, he launched an independent party he called En Marche!, styled himself as nonestablishment, and campaigned as a change maker who could bring in outsiders and parley with insiders. His success on Sunday is a salve to markets and a sign that the natural order of things hasn’t been entirely disrupted. “Foreign business chiefs swoon over this young, modern, dynamic minister. A French Justin Trudeau,” wrote Gerard Davet and Fabrice Lhomme in their book about his mentor, President Francois Hollande, who tolerated Macron’s political freelancing without suspecting that it would push his own party aside. The Le Pen-Macron victories amount to the complete rejection of the rigid two-party system that has dominated French political life for over half a century. Grandees from the Socialist Party and the main party of the right (currently the Republicans) grew accustomed to gobbling up talent from France’s best universities, clashing swords, handing off the Elysee Palace to one another and essentially deciding the terms of debate and the course of policy in the world’s sixth-largest economy. In 1956 they together got 76 percent of the total vote; in 2012 it was 56 percent in the first round. On Sunday it was 26 percent. The biggest hemorrhaging came from the Socialist Party, whose hapless
candidate, Benoit Hamon, barely surpassed 6 percent. Hamon’s candidacy was rejected even by the Socialist Party prime minister; his proposal to tax robots and his advocacy of a universal basic income and a range of hard-left policies struck voters as out of touch, as it was. Imagine if the US Democrats had chosen Bernie Sanders to lead them and he had received 6 percent of the vote last November (with a Democrat in the White House at the time). It’s about that dramatic a result. France’s right fared better. Francois Fillon, a Thatcherite conservative to the right of his party, finished third with nearly 20 percent of the vote; at a time when voters had finally tired of the country’s endemic political scandals, he was hurt by allegations that he misused party funds to employ family members. But his surprise selection in a first-ever Republican primary was only begrudgingly accepted by party leaders. His party may do better in the June parliamentary elections, but there is likely to be a vigorous debate over what exactly it stands for. France now has one presidential candidate, Le Pen, whose promises of expanding the already-robust welfare system coupled with xenophobia and contempt for the European Union justifies her claim to be both left and right. Macron, by contrast, claims to be neither. We can safely say that those labels no longer apply in France, just as they are becoming blurred elsewhere.
Instead, as in the US and the UK, France is fractured by education and by geography. Over 40 percent of the voters picked candidates, Melenchon and Le Pen, who represent the most extreme views. Replacing the old left-right divide, there are new battle lines drawn between those who want a more open, globalist France and those who see international ties as destructive of sovereignty. There are elements of the old left and the right in each of these camps. On the economy, the division is between a vision of the state that focuses more on redistribution of wealth (Le Pen and much of the Socialist left) and one that, while embracing the centrality of the state in the French social contract, is focused on improving its efficiency (Macron and much of the center-right). Even if Macron wins the May 7 runoff, he will need to find a way to widen the center and draw from both left and right in the parliamentary elections in June. Without a governing majority, or a coalition in parliament, he can say what he likes but he can do little of it. Alexis de Tocqueville once said, “The most dangerous moment for a bad government is usually when it starts to reform.” Voters have decided that France has had bad government long enough and are demanding change. The person who gets to try to deliver it has a most difficult job. The relief may last into May, but it could be a hot summer.
2nd Front Page BusinessMirror
A12 Tuesday, April 25, 2017
www.businessmirror.com.ph
PHL agricultural trade up 13.6% to $4.554 billion in fourth quarter T he country’s external trade for agricultural commodities improved 13.6 percent to $4.554 billion in the fourth quarter of 2016, from $4.010 billion during the same period in 2015, according to the Philippine Statistics Authority (PSA).
As a result, the country’s agricultural trade deficit in the fourth quarter last year shrank 10 percent to $1.686 billion against the $1.873 billion deficit recorded in the same period in 2015. The PSA attributed the improvement in our agricultural trade to higher agricultural commodities the Philippines exported during the October-to-December period. “Agricultural exports increased by 34.2 percent to $1.434 billion in the fourth quarter of 2016, from $1.068 billion in the same quarter of 2015. Moreover, share of agricultural exports to total exports went up 9.8 percent in the fourth
$1.686B
The country’s agricultural trade deficit in the fourth quarter last year, which is 10 percent lower than 2015’s deficit of $1.873 billion quarter of 2016, from 7.4 percent in the fourth quarter of 2015,” the PSA added. Among the country’s major trading partners for agricultural commodities, Japan posted a trade
surplus of $102.97 million in the fourth quarter of 2016, 134.93 percent higher than the $43.83million trade surplus during the same period in 2015, the PSA said. “Other major trading partners for agricultural commodities were Australia, with trade deficit of $109.91 million; the US, with trade deficit of $301.83 million; Asean and the European Union, each with $784.93-million and $15.13-million trade deficit, respectively,” the PSA said. The PSA noted that among the commodity groups, exports of food and live animals posted the highest value, reaching $893.40 million in the fourth quarter of 2016. The figure was 3.5 percent higher than the $862.84-million recorded earnings from the commodity group in the October-toDecember period of 2015, the PSA said. Total vegetables and fruits exported in the fourth quarter of 2016 reached 744,360 metric tons (MT), 72.52 percent higher than the 431,450 MT exported in the same period in 2015. The Philippines earned $469.62 million from the exported volume, which is 31.98
percent higher than the $355.82 million earned in 2015. Coconut oil was the top imported agricultural product from the Philippines during the fourth quarter last year. The Philippines exported 257,240 MT of coconut oil, which is 26.89 percent higher than the 202,730 MT exported in the fourth quarter of 2015. “It recorded a high 75.5-percent growth, from $233.86 million in the fourth quarter of 2015 to $410.51 million in the same quarter of 2016,” the PSA said. Coconut-oil exports accounted for 28.6 percent of total agricultural exports. “Furthermore, the US was the major market, valued at $191.49 million, accounting for a 46.6-percent share to total coconut oil exports,” the PSA added. The US bought 115,090 MT of coconut-oil from the Philippines during the period. Fresh bananas were the second most-bought agricultural produce of the Philippines, which accounted for 12 percent of total exports. In the fourth quarter last year, purchase of fresh bananas by the country’s trading partners expanded to 438,510 MT, from
TREAT FOR TOP SALES AGENTS Top executives of Eternal Gardens, led by D. Edgard A. Cabangon (extreme right), chairman and CEO, pose with branch managers and some sales agents at Victoria Harbour during their trip to Hong Kong, which is a treat given by the memorial company for its top sales producers. Other executives with them are (from the right of Mr. Cabangon) T. Anthony C. Cabangon, director; Benjamin V. Ramos, vice chairman; Jose Antonio V. Rivera, vice president for sales and marketing; and Numeriano B. Rodrin (center), president.
172,600 MT in 2015. Export receipt from fresh bananas during the period was valued at $172.64 million, 113.47 percent higher than the $80.87 million recorded during the same period in 2015. Japan remained as the top buyer of fresh Philippine bananas, importing some 123,950 MT, which is 28.27 percent of the total volume exported, valued at $62.57 million. Philippine Institute for Development Studies senior research fellow Roehlano M. Briones said the Philippine agricultural exports’ lackluster performance in recent years is expected to change this year on the back of favorable planting conditions. “It will recover [this year], because the decline in exports in the past two years is weather related. So, hopefully, it would recover this year,” Briones told the BusinessMirror. Briones said the Philippines should ramp up its local production of agricultural goods to meet the growing demands abroad, especially with the series of trade deals secured by the country with its trading partners. “Basically, it’s all about the supply side, because the demand will always be there consistently,” Briones said. “So, what I’ve also been hearing is that it’s not about the market, but the problem is coming up with the supply to make the orders across the board, especially for exportoriented products,” Briones added. The Philippines has secured a lot of agriculture-related investment deals with trade partners from the series of state visits by President Duterte. These include the $1.250 billion worth of agriculture investments from Qatar, Saudi Arabia and Bahrain. The bulk of the investments would be used in funding various export-oriented agribusiness projects in Mindanao. One project is the $250-million investment agreement between AMA Group Holding Corp. and Nader & Ebrahim Sons of Hassan Co. W.L.L. that would cover 10,000-hectare farmland expansion in Mindanao that is expected to result in an annual export of 560,000 MT of various fruits worth $280 million. “The assumption before
I
@lorenzmarasigan
NFR ASTRUCTUR E conglomerate Metro Pacific Investments Corp. is scouting for shares up for sale in toll roads in Indonesia and Malaysia to further expand its footprint in Southeast Asia. Metro Pacific Tollways Corp. President Rodrigo E. Franco said his group is interested in buying into existing expressway companies in the two Asean countries, as this could be a launch pad for the Filipino company to build and operate new toll roads in Indonesia and Malaysia. “We are looking at buying into existing operators,” he said. “That’s
Once we have those two countries [Malaysia and Indonesia], we will have a Pan-Asean presence.”—Franco
always been our initial mode of entry, we’d like to go into an existing operations, and then from there, next stage is looking at new projects.” The company’s interest comes even after its failed negotiations with a tollways operator in Malaysia. “We are interested in Malaysia because it has a culture of toll payments, which means people are amenable to paying toll to get quality infrastructure. They also have
more than 30 toll-road concessions —that’s how vast their toll roads are,” Franco said. Malaysian expressways are also interconnected, and the country has the highest car-ownership ratio in the Asean, excluding for Singapore. “It’s a country with a high motorization and, at the same time, there is a greater experience in paying toll to enjoy the benefits of infrastructure,” Franco explained. Indonesia, he said, also has high
car sales. The company is looking at several projects on the island of Java. “We have prospects on Indonesia,” he said. “Our focus will be on the island of Java, where Jakarta is.” Franco added: “So, hopefully, once we have those two countries, we will have a Pan-Asean presence.” Currently, the company has significant interests in toll-road operators in Thailand and Indonesia. Metro Pacific Tollways is the country’s largest toll-road operator in the Philippines. Its portfolio of expressways include the North Luzon, Subic-Clark-Tarlac, Manila-Cavite Toll, the future CaviteLaguna and the Cebu-Cordova Link expressways.
Emmanuel Y. Arcalas with JM Fetalco
GORDON: CULTURAL CHANGE NEEDED BEFORE FEDERALISM
Metro Pacific pursuing Pan-Asean toll-road plan S By Lorenz S. Marasigan
was there was not enough demand, because we didn’t publicize the Philippines enough. Now, we have publicized the Philippines,” Briones said. “But the Philippines is well known for not being able to deliver. So that’s the problem, not the fact that there’s not enough orders,” Briones added. Briones also said the government should reduce red tape to entice Filipino exporters to ship out new value-added agricultural products. “There are a lot of bottlenecks, including regulations. I’ve been hearing complaints that it is getting longer and longer to get the approval for a new export product as a legitimate Philippine-made product,” he said. “So, the tendency is that rather than making new products, what they do is just continue selling whatever they have already registered several years ago. So, if the government made the procedures much easier, much faster, then the exporters would probably be able to respond faster [to demand],” he added. The PIDS senior research fellow also said the government should start crafting a comprehensive plan to address land administration and management in the country to entice investors to invest in agriculture. “We have to really troubleshoot land administration and management, which is part of the 10-point socioeconomic agenda— and I haven’t seen any serious initiatives,” Briones said. One of the Duterte administration’s 10-point socioeconomic agenda is “ensuring security of land tenure to encourage investments and address bottlenecks in land management and titling agencies.” Briones said if the Philippines seeks to increase its exports share in Asean, it should practice more valueadding of agricultural products. “If you’re going to intensify intra-Asean trade in agriculture, it has to be value-added processed products,” he said. Despite the increase in agricultural exports, the Philippines remained as a net importer of agricultural commodities in the fourth quarter of 2016. Jasper
tressing that a “cultural change” should come first, Sen. Richard J. Gordon warned Congress against front-loading passage of an enabling law paving the way for the shift to a federal form of government favored by the Duterte administration. In a statement issued on Monday, Gordon signaled readiness to block any move to railroad early approval of a federalism bill in Congress, which is set to reconvene next week. “Shifting to federalism should not be a legislative priority this year, since the country is not ready for such a transition,” he said, adding, “more than shifting to federalism, in which the country would be divided into autonomous states...what the country really needs is a cultural change.” The senator asserted that even if Filipinos were to vote in favor of the shift to federalism, “the country will remain the same if the government will still be run by the same people”.
He added: “ This is like a new society with the same old faces. It would appear as a new society, federal government, but those running it are the same people. So, what we need is cultural change in the way we run the government.” For instance, Gordon pressed for immediate reforms in the country’s electoral system, so candidates with leadership abilities who do not have sufficient campaign funds will have the same chances of getting elected as well-funded candidates. “I want to change the electoral system. Unless we do it, how can you change,” he asked. He said to advertise, a candidate needs P895,000 for 30 seconds of TV advertisement. Moreover, Gordon proposed that the Commission on Elections hold televised debates in every region that would be government-funded, so that voters would know the candidates better, enabling them to choose elected public officials “with discernment”. Butch Fernandez