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Thursday, April 26, 2018 Vol. 13 No. 194

Task force eyes criminal raps vs resort owners in Boracay By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

ASK Force Boracay is looking at filing criminal complaints against private individuals seen responsible for the environmental mess in the popular resort destination. In an interview with media, one day before the planned sixmonth closure of Boracay Island, Interior Assistant Secretary for Plans and Programs Epimaco V. Densing III said, “We will be

asking onboard the CIDG [Criminal Investigation and Detection Group of the Philippine National Police] if they can also investigate private individuals who can be filed cases.”

He explained in a text message to the BusinessMirror that these private individuals are “resort owners,” and that the charges, “primarily the criminal aspects, if any, [will be] the violation of environmental laws and possibly even tax-evasion cases.” He added there was “no one definite [on the list yet]. We will let the CIDG do their procedures.” Continued on A2

Strategizing development in the context of the GVC system Rene E. Ofreneo

laborem exercens

he global value chains (GVCs) of multinational corporations dominate the world economy. According to John West, a former senior consultant of the ADB Institute, the GVCs account for 80 percent of global trade. Most products traded globally are made “in the world,” with different parts and components produced or manufactured in factories and facilities in various countries around the globe. A good example of a GVC product is the iPhone, which is assembled in China by Taiwanese companies Foxconn and Pegatron based on high-tech components produced in Japan, Korea, Germany and the United States. Apple directly employs 63,000 out of more than 750,000 people involved in the designing, assembling and selling the iPhone and other Apple products globally. Continued on A8

Govt spent higher for infra, personnel services in Jan-March

@BcuaresmaBM

anks skewed toward shorter-term deposits on Wednesday, as bids were oversubscribed in the seven-day and 28-day facilities during the week.

By Bernadette D. Nicolas

₧31.3 billion The total amount of bids for the 14-day term-deposit facility

See “Banks,” A2

P25.00 nationwide | 6 sections 46 pages | 7 days a week

The number of tourists who visited Boracay last year

By Bianca Cuaresma

Data from the Bangko Sentral ng Pilipinas (BSP) showed the banks’ preference in the shorter-termed liquidity facility, with the seven-day facility getting the highest volume of bids during the week. Tenders in the seven-day facility hit P47.03 billion, surpassing the P40-billion volume offered for the week. Oversubscription was also seen in the BSP’s 14-day term-deposit facility (TDF) as bids reached P31.3 billion, over the P30-billion cap offered by the BSP for the week. For the 28-day facility, bids reached only P17.93 billion, a few billion pesos under the P20 billion offered by the BSP for the week. BSP officials earlier said the Monetary Board could “subtly” change their monetary-policy direction without necessarily changing

business news source of the year

2 million

Banks go for BSP’s 7-day term deposits

2016 ejap journalism awards

AFFORDABLE HEALTH CARE FOR ALL Dr. Gary Song Huann-Lin (right), Taiwan Economic Cooperation Office (Teco) representative in the Philippines, discusses with BusinessMirror reporter Recto Mercene Taipei’s success in providing universal health coverage to 23 million Taiwanese citizens. Lin said Taiwan can assist other countries in putting in place a similar health-care system if it will be allowed to participate in the 71st World Health Assembly (WHA71) of the World Health Organization. The Teco official is urging Filipinos to support Taiwan’s bid to take part in WHA71, which will be held in Geneva from May 21 to 26. MICHAEL B. POLICARPIO

Russia bullish on expanding agri trade with PHL By Jasper Emmanuel Y. Arcalas @jearcalas

o s co w sees plenty of room for growth in agricultural trade between the Philippines and Russia, given the Eastern European country’s huge demand for tropical fruits like mangoes and bananas. Russian Ambassador to the

PESO exchange rates n US 52.3030

Philippines Igor A. Khovaev said agricultural trade is one bright spot that could help strengthen economic ties between Moscow and Manila. “The Philippines is a tropical country, and Philippine tropical fruits and vegetables, especially mangoes, bananas and pineapples, are in great demand [in Russia]. It is time for your country to supply agricultural products, especially tropical agriculture

products, and seafood products to the Russian market,” Khovaev said during the BusinessM irror Coffee Club held in Makati City on April 25. “On Russia’s part, we are ready to supply our wheat, beef and poultry meat [to your country]. We have very, very clean meat products, which have no chemical substances,” he added. See “Russia,” A2

@BNicolasBM

SIDE from infrastructure, the Duterte administration also spent more for personnel services in the first quarter, breaching government targets. In a statement, the Department of Budget and Management (DBM) said spending for personnel services reached 206.6 billion during the first quarter of the year, for a 23-percent increase year-on-year. Mea nwhi le, inf rast r uct ure spending grew by 34 percent to P157.1 billion. Actual disbursements, which surged by 27 percent to P782 billion, exceeded the P755.8-billion target by P26.2 billion, or 3.5 percent. “The outlook on government spending remains sanguine, and we expect government spending to prop up the growth prospects of the Philippine economy as we aim for economic expansion at the rate of 7 percent to 8 percent in the medium term,” Budget Secretary Benjamin E. Diokno was quoted in a statement as saying. “We will not let up in our efforts to limit underspending and continue with the efficient and accountable management of public

₧782 billion The amount disbursed by the government in the first quarter resources,” Diokno added. Government spending for March also grew by 30 percent year-onyear, reaching P313.1 billion, sustaining the robust growth in disbursements for the first three months of the year. Drivers of spending growth in the third month of the year were mainly subsidy-paced spending, infrastructure and other capital outlays and personnel services. Subsidy-paced spending reached P35.2 billion, which is higher by P26.8 billion or 32 percent year-on-year. “This is on account of the first batch of releases for health- insurance premiums of senior citizens, amounting to P15.1 billion, under the National Health Insurance Program,” the DBM said, adding P4.3 billion was also downloaded for the tax-reform cash project under the Land Bank of the Philippines for some 1.8 million beneficiary households of the conditional-cash transfer program. Continued on A2

n japan 0.4807 n UK 73.1144 n HK 6.6660 n CHINA 8.2924 n singapore 39.5636 n australia 39.7660 n EU 63.9875 n SAUDI arabia 13.9475

Source: BSP (25 April 2018 )

BMReports BusinessMirror

A2 Thursday, April 26, 2018

www.businessmirror.com.ph

Task force eyes criminal raps vs resort owners in Boracay Continued from A1

This developed as the interagency task force intends to shut down Boracay at exactly 12 midnight on Thursday, with or without a state of calamity declaration and closure order from President Duterte. This was the response of Tourism Assistant Secretary Frederick M. Alegre after no announcements were made by Malacañang regarding the closure as of press time. “Yes [we will still close it]. At 12 midnight,” he said in a text message on Wednesday, adding, “Spokesman Harry Roque confirmed the state of calamity declaration will be signed [by Duterte] today [Wednesday].” He added, once the state of calamity is proclaimed, there would be no need for an executive order from the President enforcing the closure order of the island for 180 days starting on April 26. Members of the Task Force include the departments of Environment and Natural Resources (DENR), Interior and Local Government (DILG) and of Tourism. M e a n w h i l e , t h e D I LG w i l l b e l e v e l i n g administrative cases against more than 10 local government officials of Aklan with the office of the Ombudsman. In a media interview aired by the Boracay Informer, Densing, however, declined to name the officials that will be charged. “There are more than 10 [local government officials]; we start with the incumbents first, because these are administrative cases, but there could be criminal [offenses].”The administrative charge, he explained, would be “grave neglect of duty,” adding that it was standard procedure for the investigation to cover the provincial governor, down to the barangay officials. He added that the DILG’s legal department has already finished the drafting of the complaint sheet versus these officials. “The only reason we’re not filing yet because we need to get the authenticated evidence so that it could be attached to the cases we will be filing,” he said. The agency is targeting to file the cases against the errant officials “on or before April 30.” Also, Densing said he will be writing the Commission on Audit “to request them for a special audit on the environmental fees collected,” by the local government of Malay, Aklan, which covers Boracay Island. He said 2 million tourists went to Boracay last year, which means the local government should have collected some P150 million in environmental fees, based on the P75-per-person levy. “However, the local government reported they only collected P91 million” in environmental fees last year. “That’s why I don’t want to pass judgment vis-à-vis

the discrepancy on the total expected environmental fees and the actual environmental fees actually disclosed by the locality,” he stressed. He added the DILG is also looking into possible discrepancies in amounts estimated to be collected and reported collection in previous years. “We also want to look into how they used these funds,” Densing said, because under a local ordinance, the funds “should be used exclusively for the environmental projects in Boracay. Even the 15 percent of the funds that goes to the provincial government, should be also used for environmental projects on Boracay. So where did they use the funds?” Data provided by the Malay government at the workshop-conference for Boracay stakeholders on April 17 showed some P567.04 million in fees were collected at the jetty port from 2010 to 2017, of which, 15 percent or P85.06 million went to the provincial government, while P481.98 million was retained by the municipal government. “Other collections” amounted to P118.61 million, resulting in total collections by the local government of P600.6 million for the seven-year period. Of the total collections, 75 percent, or P450.44 million, were used for solid waste management projects, and P150.15 million for tourism projects.

Petition for TRO

Affected workers and residents of Boracay Island on Wednesday filed a petition before the Supreme Court seeking the issuance of a temporary restraining order (TRO) to stop the closure of the country’s popular tourist destination for six months starting on April 26. The petitioners—Mark Anthony Zabal and Thiting Jacosalem—represented by the National Union of People’s Lawyers (NUPL) said if the closure pushes through, the Court should issue a status quo ante to restore the situation

prior to the closure. Named respondents in the petition for prohibition and mandamus were President Duterte, Executive Secretary Salvador C. Medialdea and Interior Officer in Charge Eduardo M. Año. Zabal, according to the petition, earns a living by making sandcastles for tourists in the beaches of Boracay Island, while Jacosalem works a a driver for tourists and workers in the island. The petitioner argued that the directive of the President to close Boracay to tourists and nonresidents is unconstitutional as it violates the people’s right to travel, and right to due process of those people whose livelihood depend on the island’s tourism activities. “Imposing restrictions upon persons visiting Boracay Island or depriving persons earning a living therein, even though they have not been found guilty of violating environmental, is arbitrary, whimsical and unreasonable intrusion into individual rights, and a violation of the right to due process,” the petition read. They petitioners further contended that there is no provision in the 1987 Constitution that would give legal basis to the President’s order to prevent entry of nonresidents in Boracay. Even if the President’s order is an exercise of police power aimed at rehabilitating the island, this would still need the approval of Congress, according to the petitioners. “Any order he issues, whether verbal or written, that curtails or limits the enjoyment of fundamental rights, can never be valid and must be struck down by the courts if it finds no statutory or constitutional basis. Such is the clear import o the principles of checks and balances and the separation of powers as embodied in our legal system,” the petitioners insisted. The petitioners also said the right to travel is a fundamental right guaranteed under Section 6,

Article III of the 1987 Constitution. The petitioners noted that the Court had earlier ruled that limitations to the right to travel must be in the interest of national security, public safety, or public health and provided by law. In the case of Boracay, the petitioners said such grounds have not been shown to exist to warrant the restrictions to travel. The petitioners added that the closure of Boracay is tantamount to the curtailment of the property rights of the residents, which include right to work and earn a living. They noted that they have been earning less and less ever since the government declared that it would close the island. “The closure is too oppressive to all persons living and working in Boracay,” said lawyer Angelo Karlo Guillen, of the NUPL-Panay. “The island is heavily dependent on tourism. If you take that away from them, it would deprive the people there of their livelihood. The Duterte administration can casually say that it will close Boracay for six months, but that sudden move also means thousands of families will be deprived of income and go hungry. The measure does not take into account their plight. The closure of Boracay must be fair to all,” he added. Asked to comment on the petition, Presidential Spokesman Harry L. Roque Jr. said Malacañang sees “absolutely no merit” for any private party to restraint the closure of Boracay. Roque also noted that it was also the High Court which previously ruled that Boracay is owned primarily by the State. “We see no reason how private persons can allege and prove irreparable injuries, a prerequisite for TRO, given that their stay in the island is by mere tolerance of the state. In any case, the closure is because of the inherent police power of the state to protect the environment in Boracay,” Roque said. The Department of Labor and Employment (DOLE) assured that it will provide emergency employment to 2,500 workers who will be displaced by the closure of Boracay. In an interview, Labor Secretary Silvestre H. Bello III said these were the workers they were able to profile and are now ready for deployment. “By April 27, one day after the closure of Boracay, these 2,500 will start the cleaning of the area,” Bello said. He added they are targeting to provide similar assistance to another 2,500 affected workers in the coming weeks. “We are prepared to give the some form of livelihood tricycles. As for the lumad, the livelihood program we

will provide them will be for agriculture programs like planting of root crops,” Bello said.

Due process

DENR Undersecretary Jonas R. Leones said the case buildup against violators of environmental laws on Boracay Island will take some time and “an extra effort.” Leones said due process is being carefully observed by the government in pursuing cases against violators and that the DENR is not keen on prematurely releasing a list of the names of the violators or their purported violations until it is proven, and the filing of cases and imposition of fines and penalties are made. He added the issuance of a notice of violation compels a company to attend a technical meeting with the DENR to discuss the violation, the necessary corrective measures, including the deadline to institute such corrective measure. “It is a tedious process. It starts with the issuance of a notice of violation. Then there will be technical meeting. We don’t want to just release a list of violators unless we are sure that indeed, a violation is committed,” Leones said. In a press briefing in Boracay on Wednesday, Environment Secretary Roy A. Cimatu disclosed the names of establishments that were illegally connected to the rainwater drainage pipe of the Tourism Infrastructure and Enterprise Zone Authority. These include New Guard Enterprises, Red Coco Inn, Hennan Garden, Red Coconut Beach Resort, Lime Hotel, and Crown Regency Convention Center. Leones also rejected demands for the Task Force Boracay, or the DENR, to publicly release the list of violators. He said the violation of the 25+5 easement rule is a full-blown operation and Task Force Boracay is con-tinuously holding dialogues with violators to voluntarily dismantle their structures. As for the violations committed by hotels and resorts for illegal occupancy of forestland and wetlands, or those that expanded their establishments without necessary permits, the case buildup is being done by the DENR and Task Force Boracay. He said alleged violators are being issued notices, while some have been issued notices to vacate already. However, Leones said the task force is not keen on just demolishing hotels or resort structures to avoid legal setbacks. Once the task force established the violation of illegal construction, he said the demolition will be enforced by the DILG and the local government of Malay. “These property owners are not small-time companies. Of course, we don’t want to be flooded with cases so we are very careful in observing due process,” he said. With Joel R. San Juan and Jonathan L. Mayuga

Govt spent higher for infra, personnel services in Jan-March Continued from A1

Other significant items include the P3.4-billion subsidy to the National Irrigation Administration, P1.8 billion to the National Food Authority for its rice-importation

program and P1.5 billion for power subsidy to the Subic Bay Metropolitan Authority, the DBM added. Infrastructure and Other Capital Outlays also continued its upward momentum, rising by 32.4 percent year-on-year, reaching

P63.4 billion in March on account of implemented road infrastructure projects of the Department of Public Works and Highways, completed construction of police stations by the Department of the Interior and Local Government-

Philippine National Police, and repairs and rehabilitation of school facilities, as well as purchase of office supplies and furniture for various Department of Education (DepEd) schools nationwide. Meanwhile, Personnel Services

also rose by 23 percent year-onyear, to close at P86.3 billion. This was driven by increase in the pay of both civilian, and military and uniformed personnel, the release of the 2016 Performance-Based Bonus to qualified DepEd employees, and

Banks. . .

Continued from A1

the main policy rate by allowing the market determined TDF rates to rise or fall. The BSP does this by altering auction volumes. Just last week the BSP decided to cut the volume of its seven-day

Russia. . .

Continued from A1

Khovaev said the balance of trade between Moscow and Manila last year expanded by 37 percent to $600 million, with the Philippines enjoying a trade surplus of $6 million. Around 80 percent of the Philippines’s exports to Russia are comprised of machinery and equipment products, while agricultural products and food account for only about 10 percent, according to Khovaev. “I am happy to say that the balance of trade is increasing. For example in January and February this year, the volume of trade between the two countries increased by almost 70 percent,” he said. “I hope very much and I believe that very soon, that in the near future, we will be able to substantially increase the export of [Philippine] agriculture products to Russia,” he added. The Russian envoy said Moscow and Manila have been in constant talks regarding the facilitation of entry of more agricultural products to Russia and vice versa. “First of all, all concerned agencies are now exchanging information in rules entry. Everything should be in full compliance with

the transfer of funds to the Development Bank of the Philippines for the salaries and allowances of poll watchers for the 2018 barangay Sangguniang and Kabataan elections contributed to higher personnel services spending.

and 14-day TDF. The 28-day TDF remained unchanged. Rates of all three TDFs are near 3.5 percent during the week. T he BSP a lso reta ined its volume of offering for all three tenors for the week. In particular, seven-day TDF remains at P40 billion, while 14-day TDF offering is still at P30 billion and 28-day TDF volume is at P20 billion. the law and agriculture products must be in compliance with relevant entry requirements,” Khovaev said. “The Philippines’s side has already provided the Russian colleagues with complete information and vice versa. It will pave the way for Filipino farmers to supply their products to Russia. We hope that it is done as soon as possible,” he added. Khovaev emphasized that the opening of new markets for Russia and the Philippines is “vital” due to the looming trade war between the United States and China. To increase trade and investments, the Russian envoy said business missions must be organized so that businessmen from the Philippines and Russia could familiarize themselves with the investment climate of the two countries. “We should join business missions. Business people should be brave to discover new markets. It is not a mission impossible, especially now when Western people are imposing trade sanctions,” he said. “At the same time, this opens new horizons, new opportunities for other nations, including the Philippines. Philippine business people are most welcome in Russia and I believe our trade development would be mutually beneficial,” he added.

The Nation BusinessMirror

www.businessmirror.com.ph

Editor: Vittorio V. Vitug • Thursday, April 26, 2018 A3

Workers set anti-‘endo’ rallies on Labor Day

By Samuel P. Medenilla

@sam_medenilla

ome 150,000 workers are expected to join the nationwide Labor Day indignation rally next week to call on President Duterte to fulfill his campaign promise of eliminating widespread job contractualization or endo.

Labor coalition Nagkaisa and militant labor group Kilusang Mayo Uno (KMU) held a joint news conference in Manila on Wednesday to bare their plans on Labor Day. “For the first time since 1969, almost all labor groups will meet for a nationwide indignation rally to convey one message: We are angry at how President Duterte

turned his back on the workers,” said Joshua Mata, Sentro ng mga Nagkakaisa at Progresibong Manggagawa secretar y-general and Nagkaisa member. Nagkaisa and KMU slammed the decision of Malacañang last week to do away with the signing of their proposed executive order (EO) to end contractualization.

They claimed the EO would have restored regular employment as the norm, and contractual employment as the exception. “[Presidential Spokesman] Harry L. Roque Jr. said there was no backlash [from the EO]. Well, we are going to make him feel the backlash [on Labor Day],” Mata said. Renato Magtubo, Partido Manggagawa and Nagkaisa spokesman, said the bulk of the participants of their nationwide rally will come from Metro Manila. “Around 60,000 to 80,000 is our target in Metro Manila alone. Nationwide our target is 150,000, because we will be holding rallies in other major cities like Cebu, Iloilo, Bacolod, Davao and General Santos,” Magtubo added. Participants of the simultaneous gatherings will start converging as early as 8 a.m. on May 1 before holding anti-government programs. Labor leaders from both groups

said they will also snub the Labor Day celebration of the Department of Labor and Employment in Cebu.

Vote protest

Aside from street rallies, Mata said, they will also raise their protest by campaigning against administration senatorial candidates in the midterm polls next year.

be a kiss of death for those candidates.... This will surely affect them,” Mata said. As for the incumbent senators, Mata added he hopes they will finally approve the pending security of tenure bill (Senate Bill 1116). SB 1116 will enforce a stricter regulation for contractualization and simplify the classification of

For the first time since 1969, almost all labor groups will meet for a nationwide indignation rally to convey one message: We are angry at how President Duterte turned his back on the workers.”—Mata “If the President fails to fulfill his promise, for sure, his endorsement for those who will run, will

regular and probationary employees. “We hope the senators will commit [in supporting the bill], other-

Barangay, SK poll fever simmers House seeks to simplify process of child adoption and foster care as 1 million+ hopefuls file COC By Nelson S. Badilla

Correspondent

ome 1 million candidates are vying for more than 600,000 positions in the forthcoming barangay and Sangguniang Kabataan (SK) elections on May 14. The high turnout candidates who filed their certificate of candidacies (COCs), according to the Department of the Interior and Local Government (DILG) Officer in Charge Eduardo M. Año is “an indication that more and more Filipinos want to significantly contribute to President Duterte’s vision of change for the country.” Año, in a news statement issued on Wednesday, said the latest on the number election hopefuls “is a good indication that Filipinos are now more proactive and would like to take the lead in initiating change in their respective communities.” The filing of COCs started on April 14 which officially ended on April 20. The Commission on Elections (Comelec) extended the COC filing until April 21 to give chance to those who failed to submit their COCs due to very huge number of candidates. At the same time, the DILG chief reiterated his marching order to the Philippine National Police (PNP) to tighten the security of more than 42,000 barangays in the country in preparation for the polls. Año specifically relayed to PNP chief Director General Oscar D. Albayalde to ensure that “the checkpoints and other security measures are [all placed specially on the barangays that have been categorized by the PNP itself as] election hot spots.”

“As the elections are drawing near, we expect that the political tension in the barangays will increase, especially among the candidates and their supporters. I, therefore, call on the PNP to conduct regular checkpoints and maintain police visibility as part of the measures to prevent election violence during the election period,” Año said. The Comelec said there are exactly 1,070,991 candidates in the polls, excluding the barangays and SKs in Marawi City which is still undergoing massive rehabilitation. Out of 1 million, 684,785 filed for barangay chairman posts and kagawad, while 386,206 for SK positions. The voters will elect one punong barangay and seven sangguniang barangay members, while youth voters will elect one SK chairman and seven SK members. Those aged between 18 to 30 years old will elect both barangay and SK officials. At the House of Representatives, lawmakers on Wednesday described as “unconstitutional” the plan of the Philippine Drug Enforcement Agency (PDEA) to release the narco list involving 211 barangay officials. Party-list Rep. Gary C. Alejano of Magdalo and Tom S. Villarin of Akbayan reminded PDEA officials that the rule of law and due process must always prevail in these cases, even as Duterte has already ordered the disclosure of the names of barangay officials in the agency’s drug watchlist “The PDEA should be discerning enough what an unlawful and lawful order is. It’s an infraction of due pro-

cess and clear violation of the Constitution,” Villarin said.“It’s another one of those bullying tactics and to inject into the electoral agenda his failed war on drugs,” he added. For his part, Alejano said “If there is substantial evidence linking these officials to illegal drugs, then by all means, they should be held criminally liable.” “I emphasize ‘substantial evidence’ as a precursor because there were instances wherein the President released the narco list, only to follow it up by retracting several names included in it. These blunders certainly cast doubt on the accuracy of the said drug list. I hope that the release of this document achieves something outside of public shaming,” he added. However, Rep. Frederick W. Siao of the Lone District of Iligan City backed the PDEA’s plan, saying “now is not the time for the PDEA to lose credibility over this matter.” “What is the PDEA waiting for? Reveal the list as it is now and the reasons those barangay officials are on that list. Inform the public and give the officials allegedly involved the fair chance to respond to the allegations,” he said. PDEA Director General Aaron N. Aquino earlier said “out of the 24,424 drug-affected barangays, 15,290 were classified as “slightly affected,” 9,089 were “moderately affected,” while 45 barangays were “seriously affected.” “The shortest list is that of the 45 barangays ‘seriously affected.’ That is one list the people can easily understand because it is not too long. Where is that list? Reveal that,” Siao added. With Jovee Marie N. dela Cruz

he House of Representatives is now studying several measures to simplify the process of adoption or foster care of orphans, abandoned or neglected children to address the worsening problem of “unadoptable” children. This, after the House Committee on the Welfare of Children created a technical working group (TWG) to harmonize several measures seeking to consolidate all existing laws on alternative childcare in the country. The TWG is tasked to draft the substitute bill to House Bills 173, 1163, 3887 and 5090, similarly entitled “Alternative Child Care Code of 2017.” The measures also seek to address problems on overaged children not fit for adoption due the long and complicated process of domestic and intercountry adoption. Rep. Vilma Santos-Recto of the Sixth District of Batangas said the TWG is now resolving the issues on adoption process through administrative adjudication; creation of the National Child Care Authority (NCCA) that will process the adop-

tion of children, and regulation of institutional and residential care of children. For her part, former President and now Pampanga Second District Rep. Gloria Macapagal-Arroyo, one of the authors of the bill, said when the law on adoption was enacted in 1995, stricter rules were imposed to protect children from being victims of human trafficking and other crimes. “The government has to step up its drive to solve the worsening problem of unadoptable children and overage children not fit for adoption. [My proposal] seeks to address this problem,” Arroyo said. The various pending measures seek to create a “one-stop-shop” code to facilitate the process to the best interest of every child available for adoption and/or foster care. The proposals also seek to establish the NCCA, which is mandated to facilitate the adoption process. It shall be the sole authority to accept, evaluate and decide all applications for local and intercountry adoption. Jovee Marie N. dela Cruz

wise they will also feel our wrath,” Mata said.

Uphill battle

Magtubo said that, so far, none among the incumbent senators have officially coordinated with them for their campaign for the approval of the bill, even as, he said, the group is now targeting to get the support of Sens. Emmanuel Joel J. Villanueva, Risa Hontiveros-Baraquel, Joseph Victor G. Ejercito and Juan Edgardo M. Angara. Without the signed EO on contractualization, Magtubo said they expect an uphill battle in getting the SB 1116 pass through the Senate. “Villanueva said they are waiting for the EO as signal, that is why it was so important,” Magtubo added. V i l l a nue va is t he head of the Senate Committee on Labor, Employment and Human Resources Development.

Fund lack stalls recall bid vs San Juan City mayor

he verification of the 30,000 signatures and thumb marks for the recall petition of San Juan City Mayor Guia Gomez was postponed on Wednesday due to lack of funding from the Commission on Elections (Comelec). San Juan City Comelec Election Officer Gregorio Bonifacio issued a notice of suspension for the verification process, which will continue to take effect until the Comelec en banc allocates the needed budget for the exercise. On April 17 the Comelec officially junked the motion for reconsideration filed by Gomez on the recall petition against her allowing the Comelec office in San Juan City to start the verification process. At least 15,000 of the 30,000 signatures submitted for the recall petition should be verified by the Comelec before the recall election in San Juan City could push through. In text message, Sophia Patricia K. Gil, one of the four people who filed the recall petition against Gomez, expressed her frustration over the new delay from the Comelec. Samuel P. Medenilla

BI orders Aussie nun Fox to leave Manila

HE Bureau of Immigration (BI) has ordered Australian missionary Patricia Fox to leave the country within 30 days, after the bureau has been established that she violated the conditions of her visa when she participated in political activities while in the country. In a news statement released on Wednesday, Immigration Commissioner Jaime Morente said BI’s Board of Commissioners (BOC) decided on Monday to forfeit Fox’s privilege of holding a missionary visa

under Section 9 (g) of the Philippine Immigration Act of 1940. “She [Fox] was found to have engaged in activities that are not allowed under the terms and conditions of her visa,” Morente said, adding that the 71-year-old nun’s visa granted her only the privilege to engage in missionary work and not in political activities. Morente chairs the three-man BOC and BI Associate Commissioners J. Tobias Javier and Aimee TorrefrancaNeri are its members. The board also directed the de-

activation of Fox’s alien certificate registration while her missionary visa was due to expire on September 5 this year. “We direct Fox to leave the Philippines within 30 days from receipt of this order,” the BOC said in its onepage order. Fox’ lawyer Jobert Pahilga said they would appeal BI’s order and even elevate the matter before the Court of Appeals and Supreme Court if the BI would deny their motion for reconsideration. Joel R. San Juan

Economy

A4 Thursday, April 26, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

DICT pressed to fast-track selection of 3rd telco player

By Lorenz S. Marasigan

@lorenzmarasigan

LLOWING the status quo in the telecommunications industry marked by the dominance of only two large corporations will only prolong the Filipino people’s “suffering” from slow but expensive Internet, according to a consumer group.

Better Broadband Alliance Lead Convener Mary Grace MirandillaSantos urged the Department of Information and Communications (DICT) to fast-track the selection of the third major player in the telecommunications company (telco) industry. She said that, while the selection process, which she described as credible, transparent and expeditious, is already “admirable,” and the government should not prolong the selection process anymore, as competition in the duopolistic telco market could help push for better services and lower prices. “We must sustain the momentum and prevent further delay. The longer the status quo remains, the longer the Filipino consumers suffer,” she told Information and Communications Secretary Eliseo M. Rio in a letter.

Filipinos have been clamoring for better services and lower prices in the telco industry, particularly in the broadband and mobile Internet spheres. Thus, President Duterte vowed to select a “formidable third player” to increase competition in the telco industry. The target—initially set for the first quarter of 2018—is to onboard a new telco player before Mr. Duterte’s State of the Nation Address in June. So far, the DICT and the National Telecommunications Commission (NTC) have issued several memos on the selection process, has drafted the terms of reference (TOR) for the bidding and has conducted stakeholder meetings for the said initiative. “We urge the DICT and NTC to continue working toward improving the TOR for the selection of a third

player that is consumer centric and committed to offering the best quality service to the most number of Filipinos, especially those who have been left in the fringes in the rural, low-income areas,” Santos said. She described the Philippines as a “laggard” in the region in terms of Internet access, quality and affordability. “About 45 percent of the population, 61 percent of households and 74 percent of public schools remain unconnected. Poor-quality and expensive Internet hamper access to information, communication and critical services, such as education and health,” she said. The third player is seen to help disrupt the market by lowering price points, while challenging the two incumbents to improve their services.

Philippine 4G speeds continued to lag behind its neighbors in Southeast Asia, averaging at only 9.5 megabytes per second (Mbps) during a threemonth period ending January, data from think tank Open Signal showed. According to its latest State of the Internet report in the Philippines, the country’s 4G connection is well below the 16.9 Mbps global average, ranking second to the last in terms of speed only next to Indonesia. LTE speeds in the Philippines were also far below the global average of 16.9 Mbps. To fast-track the selection process for the new major player, Duterte ordered the creation of an oversight committee, taking into account the need of an “integrated and transparent” process in on boarding a new telco provider.

We urge the DICT and NTC to continue working toward improving the TOR for the selection of a third player that is consumer centric and committed to offering the best quality service to the most number of Filipinos, especially those who have been left in the fringes in the rural, low income areas.”—Santos

www.businessmirror.com.ph

Senate panel moves to reinforce natural-gas industry in PHL By Butch Fernandez @butchfBM & Lenie Lectura @llectura

he Senate Committee on Energy is eyeing remedial legislation reinforcing the Philippines’s downstream natural-gas sector well in advance of the 2024 expiration of the Malampaya gas field franchise. Sen. Sherwin T. Gatchalian, committee chairman, is calling a public hearing on Thursday to consult industry players and regulators as the panel moves to craft a law aimed at “establishing a stronger legal framework to develop and regulate the country’s downstream natural-gas sector.” Among those expected to provide inputs at the Senate hearing are representatives from the Department of Energy (DOE), the Energy Regulatory Commission, National Power Corp., Philippine National Oil Co. (PNOC), and the National Grid Corp. of the Philippines. Confirming the scheduled committee hearing, Gatchalian said the Senate panel needs to “clarify the government’s policy on our natural-gas resources given the complexity of the industry, the current lack of an institutionalized regulatory framework and the need to replace the fuel sources of existing natural gas plants.” In filing Senate Resolution 699, paving the way for the committee hearing, Gatchalian noted the Malampaya Gas-to-Power Project supplies fuel to three natural-gas plants with a total installed capacity of 2,700 megawatts, comprising 17.85 percent of the installed capacity of the Luzon grid and 12.49 percent of the installed capacity of the national power grid. “Significantly, these plants served

53 percent of Meralco’s electricity demand for the March 2018 billing,” the lawmaker added. Asserting the need to further develop the power industry in order to attract more foreign investors, Gatchalian acknowledged the importance of natural-gas in the country’s energy mix, “as well as the Department of Energy’s drive to make the Philippines a liquefied natural gas [LNG] hub and its current pronouncement of a 50 percent baseload and 50-percent midmerit energy mix.” The senator recalled that utilization of downstream natural-gas started in 1998 “with the declaration of commerciality of the MalampayaCamago wells, resulting in the harvesting of the first gas reserves in 2001.” He added that, in the same year, the DOE was tasked to be the lead government agency in the development of the Philippine natural-gas industry through Executive Order 66. Recently, the DOE met with seven investors interested to put up an integrated LNG facility in the country. The agency said pre-application conferences have been conducted for the proposed LNG projects of the following potential project proponents: Cleanway Energy Dept. Corp.; First Gen Corp.; Tokyo Gas Co. Ltd.; China National Offshore Oil Corp.   PNOC;  VIRES Energy Corp.; and SK E&S Co. Ltd.   Likewise, the two pre-application conferences have been scheduled for the proposed LNG projects of Carmine Energy Pte. Ltd. and DeEnergy International Corp.

Neda, PIDS see ‘kink’ in RISE UP formula in Fed form of government By Cai U. Ordinario

@cuo_bm

he National Economic and Development Author it y (Neda) and the Philippine Institute for Development Studies (PIDS) have raised concerns regarding the formula to be used to create sustainable economies under a federal form of government in the country. In a presentation on Wednesday, Neda Undersecretary Rosemarie G. Edillon said in its current state, the RISE UP, or Readiness Index for Sustainable Economies Under PHederalism, formula could result in “double counting” of certain indicators such as income. RISE UP aims to determine the economic viability of regions that will be created under a federal Philippines. The formula takes into consideration the composite scores the human development index (HDI) and the competitiveness index. “Some of the indicators used are also composite indicators like the HDI and the [global] competitiveness index [GCI] and this could result in double counting of the subcomponents for instance per capita income, is actually included in the HDI, it is also used as basis for the poverty incidence,” Edillon said. Edillon also expressed reservations on the use of land in the index, saying that it is unclear as to

how this variable is treated since it can indicate natural resources and/or governance. She also explained the difficulty of providing province-based income and poverty incidence data since the country’s existing information is only regional in scope and not provincial. The Neda official said provincebased data on income and poverty will only be made available next year since the Family Income and Expenditure Survey will be conducted this year and the design of the survey already includes province-based information. “What we think should happen is not really, you’re right that there should not be a region left behind. In fact, it’s not really important to equalize the income across the region, but really equalize opportunities,” Edillon said. PIDS President Celia M. Reyes also expressed the same reservations in her presentation and also added that there needs to be some consultations with experts on geospatial issues, such as those from the University of the Philippines School of Urban and Regional Planning. She also recommended that the governance index in RISE UP be removed because once the government becomes federal, the estimates using the current data based on a unitary form of government may not accu-

rately reflect the capacity of a federated region. Reyes also said there is a need to improve the components of the index. Instead of using composite indices such as the HDI and the GCI, the consultative committee should instead use separate data such as household incomes, population, GDP or gross regional domestic product, and labor force survey data, among others. “The economic indicators that may be considered are those that reflect the regional capacities in terms of physical assets; human capital; size of the economy; structure of the economy and existing infrastructure that enables connectivity of territories with the region states,” Reyes added. Meanwhile, both Neda and PIDS recommended the review of the study done by Urban-Regional Planner Arturo Corpuz, which suggested key components to ensure the economic viability of a region. Corpuz, quoting Edillon’s study, said it is important for federated regions to include urban centers with a population of around 700,000 people to drive and sustain the regional economy. The PIDS said a well-organized core urban system within regionstates can be considered as the “permanent structures” in the regional economy.

Malacañang bares new appointments

resident Duterte has appointed former Social Security System (SSS) Commissioner Jose M. La Viña as new tourism undersecretary, replacing Rolando Cañizal. The appointment came more than two months after it was announced that the President has not renewed his term as SSS commissioner, along with SSS Chairman Amado D. Valdez. Presidential Spokesman Harry L. Roque Jr. justified La Viña’s new

appointment as a “presidential prerogative.” Roque earlier said La Viña reportedly lost his previous post for allegedly demanding P26 million to fund his social-media project, and for requesting a budget of P1.6 million a month for media advertising program. La Viña was also Duterte’s socialmedia campaign strategist in the 2016 presidential campaign. The Palace also announced the appointment of Benny Antiporda

as undersecretary of the Department of Environment and Natural Resources. He was previously a board member of the Subic Bay Metropolitan Authority. Agnes Alexis Lucero-de Grano was also appointed as commissioner for the National Labor Relations Commission representing the employers, while Rosario Sagadal was appointed as commissioner representing the workers sector. Bernadette D. Nicolas

TheBroa Waste to energy: As the deba A6

Business

Thursday, April 26, 2018

By Jonathan L. Mayuga

S Boracay Island stakeholders brace for the impact of closure to tourists beginning today (April 26), the government is hopeful of fully addressing the various environmental problems besetting the country’s top tourist destination. Aside from water pollution and the degradation of forestland and wetlands, Boracay Island, the country’s top tourist destination in Malay, Aklan, is facing a dilemma that mirrors literally a stinking national problem with seemingly no solution in sight: garbage. Department of Environment and Natural Resources (DENR) officials believe there is one viable solution: turn waste into energy. DENR executives believe garbage can be used as biomass to generate energy in the form of electricity and/or heat from the primary treatment of the waste. A form of energy recovery, waste-to-energy (WtE) is being eyed as a long-term solution to Boracay Island’s garbage problem. DENR Secretary Roy A. Cimatu wants to make the entire island a garbage-free zone by ensuring that all the solid waste generated by local residents and the local and foreign tourists are shipped out every day, his designated spokesman, Undersecretary Jonas R. Leones, told the BusinessMirror. Cimatu, to note, heads Task Force Boracay (TFB), the interagency body tasked by President Duterte to deal with the problems afflicting Boracay. Leones, the DENR’s Undersecretary for Policy, Planning, International Affairs and ForeignAssisted Projects, said that with the poor enforcement, if not defiance to abide by a lawful order to enforce a measure that seeks to address the looming garbage crisis, the establishment of a WtE facility becomes inevitable. The proposal to implement WtE on Boracay Island, however, comes with howls of protest from environmental groups, triggering anew a spirited debate on the issue of producing energy from waste.

‘Garbage prone’

FLOCKED by tens of thousands of local and foreign tourists all year round, Boracay Island is producing about 90 tons of garbage every day. However, only about 30 tons are being collected and brought out of the island. The proposal for the establishment of a WtE facility, hence, was made by Eligio T. Ildefonso, Executive Secretary of the National Solid Waste Management Commission (NSWMC), during the crafting of action plans held by the TFB in March. “I was the one who made the proposal during our action planning sessions [last month] because it is the only viable long-term solution to the garbage problem on Boracay,” Ildefonso said. But he quickly said that WtE is just one of the options for Boracay, as there are other ways to prevent the garbage problem from worsening. This, Ildefonso said, couldn’t be done without the full cooperation of all the stakeholders. “Imagine an island with only three barangays generating 100 tons of garbage per day? One day of failing to take out the garbage is already a problem,” he said. Besides, Ildefonso said he is not recommending the establishment of an engineered sanitary landfill on the island, as it is a fragile island ecosystem already facing enormous pollution problems.

Action plan

THERE are three materials recovery facilities (MRF) situated in

each of the three barangays on Boracay Island: Manoc-Manoc, Balabag and Yapak. According to Ildefonso, part of the action plan to address the garbage crisis on the island is to sustain the operation of these MRFs and to strictly enforce or implement Republic Act 9003 (Ecological Solid Waste Management Act of 2000), particularly the proper waste segregation to reduce, reuse and recycle waste. All establishments, big or small, are now required to designate environmental managers who will be responsible for the firm’s compliance with various environmental laws, particularly solid waste management, which also espouses the composting of biodegradable waste. Part of the action plan is also to ensure that tourists entering Boracay are properly informed of their responsibilities while on the island, particularly the part of maintaining a clean and green environment through proper waste disposal. “Before entering Boracay, tourists will be properly informed of the law against indiscriminate waste dumping or disposal, which will be strictly implemented during their stay on the island,” said Ildefonso, already looking at the end of the six-month moratorium on tourism activities on the island.

A looming crisis

THE Philippines is facing a looming garbage crisis. With a population of over 100 million, the Philippines produces 40,000 tons of garbage every day, or 14.6 million tons of garbage a year. Garbage is a serious environmental and health issue. Aside from emitting a foul odor, garbage in open dumps produces methane, a toxic, greenhouse gas (GHG) that accumulates into the atmosphere, causing global warming. Other GHG from broken household appliances, such as air-conditioning units and refrigerators, can also cause the thinning of the ozone layer. In the event of a heavy downpour, garbage leach pollutes the soil, contaminates aquifer and nearby water bodies—streams, rivers, lakes or worse, including coastal and marine waters. Metro Manila, the country’s capital region populated by around 12 million people, produces 9,000 tons of garbage every day, almost a fourth of what the entire country’s total garbage produce.

Ocean menace

WITH an 80-percent garbage collection efficiency in Metro Manila, 20 percent or 1,800 tons of the 9,000 tons of garbage produced daily end up in vacant lots or worse, clogging waterways— canals, creeks and rivers causing severe flooding—or they end up draining to larger water bodies like Laguna de Bay or Manila Bay. Clogging of the drainage system is one of the major causes of flooding in Metro Manila. The Metropolitan Manila Development Authority, the Department of Public Works and Highway, the Pasig River Rehabilitation Commission (PRRC) and various local government units extract tens of tons of garbage to remove the clog from drainage systems to

prevent flooding, especially before the onset of the rainy season. From the Pasig River alone, a river that connects the Manila Bay and Laguna de Bay, the PRRC said it is collecting an average of 500,000 kilos of waste every year. Dumping of garbage is common in squatter colonies found along these so-called danger zones. However, indiscriminate dumping of waste happens even in the open seas, behind the back of concerned maritime authorities and law-enforcement units.

Threat to biodiversity

OCEAN plastic pollution is a serious threat to marine ecosystems and wildlife, according to Dr. AA Yaptinchay of the Marine Wildlife Watch of the Philippines. The Marine Wildlife Watch of the Philippines is one of the leading marine wildlife conservation advocacy groups and was responsible in the crafting of several guidelines, a first in the Philippines, for the proper or safe rescue, rehabilitation and release of trapped or injured marine wildlife such as whales, dolphins, dugong and marine turtles, in partnership with the Department of Environment and Natural Resources-Biodiversity Management Bureau (DENR-BMB). According to Yaptinchay, the

ingestion of micro-plastics by wildlife can cause blockage of the gut and the lungs leading to death. Likewise, its ingestion by wildlife from zooplankton to large marine fauna can also lead to death or adversely affect reproduction, as micro-plastic toxins in the bloodstream and tissues can lead to diseases, including reproductive impairment. “Entanglement in trash and micro-plastics, including discarded nets or ‘ghost nets,’ by wildlife will cause suffocation or drowning leading to death,” Yaptinchay said. “A pile of trash, especially plastic, in the water column occupies space, which can displace wildlife. Those that sink to the bottom will smother the substrate, which will kill all organisms under it, including corals or a whole reef.” On the other hand, he said floating debris are known to carry non-native species across continents, which may introduce alien invasive species to another ecosystem. The spread of invasive alien species is a major driver of biodiversity loss. “The plastic trash will be present [in the ocean] for a long time. Macroplastics just become micro-plastics and ghost nets will keep on killing as long as it is in the water,” Yaptinchay added. “Once we set it to lose in the

natural world, there is no getting it back nor stopping it from affecting wildlife and their habitat.”

2 birds, 1 stone

ASIDE from addressing the country’s looming garbage crisis, WtE is being eyed as a solution to the perennial power supply shortage. Even the Department of Energy (DOE), of late, started to initiate the move to promote WtE to boost power-generation capacities on remote or isolated islands like in Puerto Princesa City, in the island-province of Palawan, considered as the country’s last ecological frontier. The P2.1-billion WtE deal entered into by the DOE and the Puerto Princesa local government unit (LGU) and Austworks Corp., the facility provider for the construction of a so-called WtE plant, involves the construction of a “thermal gasification” facility. Environmental groups said it is the scientific name for a WtE incinerator to be constructed in the city’s Santa Lourdes Sanitary Landfill, as well as provide garbage-collection services. The WtE plant will supposedly generate 5.5 megawatts of electricity from the city’s 110 metric tons per day of waste. Boracay is producing around

that volume of waste every day, qualifying the island’s three barangays alone for a WtE facility that will generate the same amount of electricity if the plan pushes through.

‘Wait a minute’

ZERO-waste advocates, however, cautioned that WTE promotes waste incineration and thus is prohibited under Philippine laws. Ruel Cabile, a campaigner of EcoWaste Coalition, a member of No Burn Pilipinas, chided the DENR for actively promoting WtE. Early this month, No Burn Pilipinas, comprising of over 50 environmental groups and climate justice activists, questioned the legality of an agreement for a WtE facility between the Department of Energy (DOE) and Puerto Princesa City. “Waste incineration is banned under Philippine laws, specifically, the Clean Air Act. Incinerators turn solid waste into toxic air pollution and produce deadly cancercausing chemicals such as dioxins and furans, which accumulate in soil and water,” Cabile said. “It is highly questionable why the DENR, mandated to protect the environment, is now acting as the peddler for these facilities.” Likewise, he said any WtE incineration plan for Boracay is

aderLook

sMirror

www.businessmirror.com.ph | Thursday, April 26, 2018

NONOY LACZA

ate continues, a crisis looms

merely replacing one kind of pollution with another. The DENR is not solving the island’s pollution problem, but is actually making it a lot worse. Toxic chemicals in air pollution contaminate soil and water and travel distances. How do they plan to clean up Boracay’s beaches once it is contaminated with heavy metals and dioxins?” he asked.

Health risks

ACCORDING to No Burn Pilipinas, a coalition of over 50 environmental groups, it is opposed to WtE and waste incineration because of the related health risks. The group has said the byproduct of waste incineration is fly ash, which not only causes lung and heart problems to nearby populations but is also classified as hazardous waste because of the concentration of toxic chemicals from the burnt materials. “Boracay will need to construct a hazardous waste landfill to handle incinerator fly ash. However, because Boracay is a small island, the question is whether it is permissible to site a hazardous waste landfill on the island without contaminating groundwater with heavy metals and carcinogenic chemicals. With contaminated air, soil, seas and groundwater, Boracay may well turn into a cancer

island, creating a situation that is far worse than what we have now,” Cabile said.

Not renewable

NO Burn Pilipinas also argued that WtE does not count as a clean, renewable energy source like solar power or hydropower. According to Cabile, the purported gains producing electricity through waste incineration is a fallacy. “Incinerators produce very little electricity, and actually consume more energy than it creates. They use electricity for maintenance and operations such as cranes, pumps, conveyors, and use fossil fuel for start-up and for its furnaces,” he explained. “Municipal solid waste is not an efficient fuel so more energy goes into burning it than what is actually produced.” If the government truly wants a sustainable solution for Boracay, it should pursue a zero-waste approach for the island, starting with the strict implementation of the Ecological Solid Waste Management Act, Cabile recommended. “More sustainable, practical and people-centered waste solutions are already happening in the Philippines and across Asia,” he added. “Many cities are already

practicing zero waste, which aims for the minimization and eventual elimination of waste through reduction, redesign, reuse and recycling, starting with waste segregation at source.”

The law

SIGNED on July 24, 2000, RA 9003, or the Ecological Solid Waste Management Act, provides for an ecological solid waste management program. The law mandates the creation of the necessary institutional mechanisms and incentives, declaring certain acts prohibited and provided penalties and appropriating funds for its implementation among other purposes. For this, the law created the NSWMC composed of 14 members from the government sector and three members from the private sector. The NSWMC acts as a policy-making body and undertakes activities for the proper implementation of the law. The law declared as a state policy to adopt a systematic, comprehensive and ecological solid waste management program, among others, to ensure the protection of public health and the environment. Further, Section C of the law mandates the state to: “Set guidelines and targets for solid waste

avoidance and volume reduction through source reduction and waste minimization measures, including composting, recycling, reuse, recovery, green charcoal process, and others, before collection, treatment and disposal in a appropriate and environmentally sound solid waste management facilities in accordance with ecologically sustainable development principles. However, waste incineration is prohibited under the law, as it calls for the “proper segregation, collection, transport, storage, treatment and disposal of solid waste through the formulation and adoption of the best environmental practices in ecological waste management excluding incineration.”

ing an engineered sanitary landfill in lieu of open dumps. In many cases, like in highly urbanized areas such Metro Manila, Metro Davao and Metro Cebu, lack of space for even composting of biodegradable waste or establishment of an MRF and engineered sanitary landfill, is a major obstacle, even with the LGUs’ financial and technical capacity, or willingness to abide and follow the letters of the law. “For so many years, only about 30 percent of LGUs have actually begun to comply because of the requirements. Others may be defying the law because they believe it is impractical,” Leones explained. “There is no space for segregation.”

Failed law?

WTE solution

“WTE is the only way forward to address the garbage problem, especially in Metro Manila,” said Leones, who was instrumental in strengthening the capacity of the DENR’s Environmental Management Bureau (EMB). There is a move in the House of Representatives to lift the ban on waste incineration under two laws: RA 9003 and RA 8749. House Bill 2286 seeks to repeal the provisions that ban waste incineration under the two laws. Last year, the House Committee on Ecology chaired by Rep. Estrellita Suansing of the First District of Nueva Ecija has approved the creation of a technical working group (TWG) for the purpose of amending the two environmental laws. The TWG, to be headed by Rep. Carlos Cojuangco of the First District of Tarlac, will tackle a proposal by Rep. Carlito Marquez of the Lone District of Aklan under the proposed measure, specifically to repeal Section 20 of the Clean Air Act. The measure aims to address what is believed by proponents of the bill as “urgent solid-waste issues in the country that lead to flooding, erosion, landslides, as well as other dangers on landfills and dumpsites affecting people living near them.” The bill also intended to clarify the claim that waste incineration is harmful to the environment, and seeks to set up WtE facilities in the country. While banking on the wisdom of the country’s lawmakers in deciding the fate of the proposed measure lifting the ban on the use of incinerators, Leones maintained that the DENR is open to other options, including sticking to noburn WtE technologies that have been “proven and tested” and are available in the market while waiting for the legislative measure that will pave the way for waste incineration to take effect. “We need to convince the legislators to give WtE a chance. The reason why the policy [on WtE] is not moving forward is because there is really a strong opposition waged against WtE,” Leones said. He maintained that there are other countries that are “clean and green” like Taiwan, China and Singapore that make use of waste incinerators and had not once encountered pollution or health problems.

Poor compliance

LEONES said LGUs, which are primarily responsible for the enforcement of RA 9003 on the ground, are slow to comply with the various provisions of the law. After 18 years since the law was passed, many LGUs remain reluctant or unable to implement even the basic requirements, which are to promote segregation at source, reduce, reuse and recycle, or even practice composting. Leones noted that most LGUs lack the capacity to implement the provisions of RA 9003, from launching information drives to encourage waste segregation, hauling, the establishment of MRFs and establish-

ACCORDING to Ildefonso, WtE solution may very well apply in other areas of the country, especially where the establishment of an engineered sanitary landfill is no longer possible because of lack of space but will require a huge investment. The NSWMC said around 400 open dumps are still in operation in various parts of the country. These open dumps should be shut down under RA 9003. But lack of space for the establishment of an engineered sanitary landfill, ideally, one where residual waste will be disposed into, is a major challenge. Also, LGUs have no financial capacity to establish and operate such facility, which explains why the NSWMC is encouraging clustering of LGUs wherein a group of LGUs will pool together their resources for the establishment of such facility or enter into a publicprivate partnership deal for the purpose of putting up a power plant to produce energy from waste. There are many interested investors willing to put up MRFs, and engineered sanitary landfills, but this is packaged with the operation of a WtE facility.

NSWMC resolution

THE NSWMC has already come up with a resolution in support of WtE. However, it does not include waste incineration, which remains a contentious issue. Waste incineration is commonly used to dispose of waste at the same time converting them into useful energy, whether in the form of biofuel, methane gas, or electricity. The DENR, which is the agency mandated to manage the country’s environment and natural resources, has already adopted in June 2016 NSWMC Resolution 669. That resolution was titled “Adopting the Guidelines Governing the Establishment and Operation of Waste to Energy Technologies for Municipal Solid Wastes.” Among the WTE technologies allowed under the guidelines are gasification, pyrolysis, bioreactor, biomethanation, hydrolysis, pyrolytic gasification, plasma and other thermal processes. Ildefonso earlier said these technologies do not use incinerators. Leones said in countries with a similar situation like Singapore, WtE and waste incineration offered a viable solution to the garbage problem. “There are five incineration plants in Singapore,” he said. “And the Marina de Bay; under that, is WtE facility.”

Enhanced capacity

ACCORDING to Leones, the DENR-EMB over the years was able to enhance its capacity to measure and analyze the dioxins and furans produced by incinerators. “Before, we do not have the capacity. We now have the technology and the capacity to analyze dioxins and furans,” he said, referring to the established dioxins/furans laboratory at the DENR-EMB in Quezon City. Moreover, he said there is al-

ready a guideline for WTE in the form of the NSWMC resolution. He added that the DENR itself is in the final stage of crafting its own WtE guideline. “We already have a guideline for final approval. We really don’t want to be antagonistic about it. But it is ready, once a law is passed lifting the ban on waste incineration, then we can proceed with the finalization of the guidelines,” he said.

Debate continues

BUT the debate over the issue of WtE will not simply go away. According to the group Global Alliance for Incinerator Alternatives (GAIA), there is no such thing as “no-burn” WtE technology. The group said incinerators are facilities that treat waste by burning it and that they come under many names such as “mass burn incinerators,” “thermal treatment facilities,” or so-called “waste-toenergy” plants and involve processes such as combustion, pyrolysis, gasification, or plasma arc. But they all have the same claim— “burning waste will make our waste problems disappear.” Among the most aggressively promoted incinerators are wasteto-energy facilities, GAIA’s Lea Guerrero said. She added there is a minimum volume of garbage needed to make the operation of a WtE facility economically viable. With no sufficient feedstock, production of electricity in WtE facilities is doomed to fail.

Solar, wind power

CABILE said instead of promoting WtE, the DOE should promote solar power and wind power or hydro-power instead of WtE, which is not a viable solution to the energy problem, or could even worsen the quality of air that we breathe with the emission of smaller but even deadlier particles of dust from incinerators into the atmosphere. He said the DOE, instead of promoting WtE, should focus on harnessing the power of the sun, or the wind, as they are a more viable option for power generation. Cabile is also skeptical that the DENR-EMB is now capable of efficiently analyzing dioxins and furans as claimed by Leones. “The only WtE process we agree to is the anaerobic WtE, which is really a no-burn process,” he said. He said an anaerobic WtE is being used at a facility in Cavite and in Pampanga, which the NSWMC and the DENR should look into and promote, instead of believing that other WtE technologies that involve incineration are “no-burn” technologies. “We are not surprised by the DENR’s move to suggest to LGUs to go for WtE because it is their way of giving a quick solution to solid waste management,” he said. According to Cabile, going for a quick-fix solution to the solid waste management problem is an admission of the failure on the part of the government to implement the laws to ensure a healthy and balanced ecology. “What the government should do is go after the LGUs that fail to implement the Ecological Solid Waste Management Act and the Clean Air Act. Why do they have to contradict or amend the laws?,” Cabiles said. “We at No Burn Pilipinas and EcoWaste Coalition maintain that zero-waste management is the solution to the garbage problem. It should be implemented and the two laws [RA 9003 and RA 8749] enforced and respected.” Apparently, the hands of the government, particularly the DENR, DOE and NSWMC, are tied to what is allowed by law. To end the neverending debate, a clear-cut policy should be put in place. Are we sticking to the policy that says no to waste incineration or are we going for an all-out WtE solution?

Banking&Finance

A8 Thursday, April 26, 2018 • Editor: Jun B. Vallecera

BusinessMirror

www.businessmirror.com.ph

Successful TRAIN implementation highlights DOF’s 121st anniversary By Rea Cu

@ReaCuBM

he implementation of the first package of the Comprehensive Tax Reform Program (CTRP) or the Tax Reform for Acceleration and Inclusion (TRAIN) law ensures the government of adequate revenue flows to support its aggressive pump-priming of the economy anchored on infrastructure and human capital development, according to Finance Secretary Carlos G. Dominguez III.

As the Department of Finance (DOF) celebrates its 121st anniversary, the finance chief cited the implementation of the TRAIN and the inroads done in cutting red tape to improve ease of doing business as the agency’s top achievements in 2017.

“By the time we complete the tax-reform program, we should match the tax effort of the most effective governments in the region. Our government can provide the essentials of rapid growth, such as excellent infrastructure and cutting-edge programs

that will improve the quality of our human capital,” Dominguez said. He also traced the government’s exemplary fiscal and debt management to the highly successful bond floats in the global market marked by tight spreads, which underscored the strong confidence in the Philippine economy and the way it is being managed under the administration of President Duterte. Dominguez said the implementation of the CTRP’s first package, which is the TRAIN, has enabled the bureaus of Internal Revenue and of Customs to significantly increase revenue collections. He added that the DOF’s anti-red tape program “is moving at a good pace” and will soon lead to the “full interoperability of our agencies,” through the use of the latest information technologies. Dominguez said the Philippines’s 10year dollar-denominated global bonds in January that was given a tight spread of 37.8 basis points over the benchmark US Treasury bonds, and the high demand last month for its maiden Panda bond float that was rated “AAA” by China’s Lianhe

Wider income inequality seen prevailing in federal Philippines By Cai U. Ordinario @cuo_bm

oorly designed federal and national tax systems under “PHederalism” could widen income inequality in the country, according to the Philippine Institute for Development Studies (PIDS). In a hearing at the consultative committee tasked to review the 1987 Constitution on Wednesday, PIDS President Celia M. Reyes said if the tax base of some federated regions are not enough, this could widen income inequality in the country. Among the aims of shifting to a federal form of government is to achieve inclusive economic growth, wherein prosperity is also felt by other regions, not just Metro Manila, Calabarzon and Central Luzon which together account for roughly 60 percent of the country’s GDP. “Other regions will improve but the gap might widen because some of the regions, I’m not talking of the 17, but any potential configuration because of [the level of] economic activity, the potential tax base,

the kind of capacities there is in a federated region, they could grow faster than some of the regions and so I think that’s a concern,” Reyes said. From an administrative standpoint, constitutional commission members raised the possibility of restructuring the Bureau of Internal Revenue (BIR) to respond to the need for a more equitable tax system. Finance Undersecretary for Legal Services Group Bayani H. Agabin said any plan to restructure the BIR will depend on which taxes will be collected by the national government and regional government. Agabin said, however, that what is important when assigning which taxes will be collected nationally and regionally is to prevent double taxation, which could also lead to lower incomes and, possibly, wider income inequality. “It will depend on what taxes the states will have the authority to collect,” Agabin said. “Certainly, what we want to avoid is the case of double taxation.” In January PIDS Senior Research Fel-

low Rosario G. Manasan said that from a public finance perspective, shifting to federalism may lead to higher costs especially if tax assignment and expenditure distribution are not done properly. Manasan added that the fiscal gap in regions could reach as much as P1.09 trillion, or 84 percent of the total expenditure needs of subnational governments. This also represents some 57 percent of total revenues from national governmental internal revenue taxes in 2017 or 7.5 percent of GDP. With the increase in regional government functions, subnational governments will be hard-pressed to increase their revenues. According to Manasan’s calculations, subnational governments can only finance P213.59 billion of the total needs of P1.3 trillion. The largest gap was observed in the Autonomous Region in Muslim Mindanao and Calabarzon at P111.29 billion and P104.03 billion, respectively. The least fiscal gap was noted in Metro Manila or the National Capital Region at P14.95 billion.

Strategizing development in the context of the GVC system Continued from A1

GVC products cover virtually all tradeable goods, from labor-intensive sewn garments to high-tech plane engines. They also include services that are now included in the discipline of the World Trade Organization’s (WTO) General Agreement on Trade in Services, such as the call center/BPO services outsourced to the Philippines and India by US Fortune 500 companies and the big corporations from Europe. In GVC industrial production, Asia has the densest network, mostly GVCs for electronics, automobiles, machinery and clothing. The book of John West, Asian Century on a Knife-Edge (2018), describes the dynamics of GVC production as follows: “Each country specializes in tasks according to their comparative advantages. Hong Kong and Singapore tend to specialize in logistics and finance, and be home to corporate regional headquarters. Japan and Korea focus on branded product designs and high-tech components, and Malaysia and Thailand specialize in midrange manufacturing. Thailand has become a regional manufacturing hub for the automobile industry in particular, being used by companies like Toyota, Mazda and Ford. China specializes in product assembly and lowerskilled manufacturing, although it is now graduating to higher value-added activities. Bangladesh and Cambodia are very active in clothing manufacture, while Indonesia and Mongolia are rich in natural resources.” The GVC phenomenon in Asia has come to be known as “Factory Asia”. On the other hand, China is often referred to as the “Factory of the World” because China has the most number of GVC-related production activities in Asia, which account for 45 percent,

or almost half of China’s total trade. Clearly, GVCs are instrumental in the rapid growth and industrial transformation of China in the last four decades. However, China is not a passive recipient of GVC investments, mostly those made by the “lead companies” or multinationals from Japan, North America and Europe. A country can get stuck or trapped at the lower end of the GVC process, with the lead companies appropriating a big percentage of the values because of their control over technology and market. To climb upward in the GVC ladder and to develop its own GVC system, China, in 2015, launched a program called “Made in China 2025.” The idea, in the words of John West, is to make China a “manufacturing power,” not just a giant assembler. In support of this strategic move, China has adopted the following measures: 1) ramping up spending on R&D, now estimated to be 20 percent of global spending on R&D (compared to US’s share of 27 percent; 2) forcing MNCs or foreign investors to transfer or share technology under what West calls as “innovation mercantilism”; 3) acquiring high-tech companies of other countries, such as Haier, buying GE’s appliances unit or Tencent’s getting Finland’s Supercell, 4) pirating high-tech designs and technology of other countries, (which the American security establishment calls as the “great brain robbery”); and 5) promoting innovation-based “entrepreneurship” for the masses, using exemplary models like Jack Ma of Alibaba. The problem is that other developing countries are not able to copy or even emulate what China has done and is still trying to do. This includes the Philippines, which seems to be stuck or trapped at the middle level of the GVC system for electronics and

auto parts production. ADB’s Norio Usui, in a 2012 book, lamented that the Philippines is not scaling up in the value chain and seems to be stuck at the lower or middle level of assembly work for electronics. With support from the government, some Philippine electronic enterprises can become like Samsung, which was once upon a time only a component producer for Sanyo. The point is that we cannot reach the developed middle-class country goal under AmBisyon 2040 if we do not have a purposive program of climbing the value-chain skills and knowledge ladder, as well as developing our own GVCs for Philippine-made industries. For example, the Philippines, a big archipelagic country, should become a high-tech maritime industry player, not a mere assembler of ships for Japan and South Korea. The integration of the steel, petrochemical and other strategic industries, where the Philippines can develop both comparative and competitive advantages based on the country’s natural endowments and latest technological know-how, should also be speeded up. Scaling up means revisiting the policy on how to relate to foreign investors. There should be a program on how to encourage foreign investors to scale up their investments in the country. The departments of Trade and Industry, Science and Technology, and or Agriculture; National Economic and Development Authority; and Commission on Higher Education of the Philippines should also act as one team in identifying and promoting job-creating industries which can conquer the domestic, as well as foreign markets. And yes, the abysmal national spending on R&D, a fraction of 1 percent of the GDP, should go up to the percentage level equal to that of Japan and Singapore.

Credit Rating Co. and fetched a spread of only 35 basis points over the benchmark “indicate confidence in our fiscal and debt management.” “For all the gains we have made, I should thank my predecessors for the excellent job they did in maintaining fiscal discipline. I should, in particular, thank former Prime Minister Cesar Virata for setting the tone and leadership style for this department. We are building on the strong foundations they have set down,” Dominguez said during the DOF’s 121st anniversary celebration on Wednesday at the Philippine International Convention Center in Pasay City. He stressed that amid the DOF’s notable achievements, much work still needs to be done as the department has yet to

seek this year the approval of the rest of the CTRP packages and further reach substantial progress in improving the ease of doing business and making the government more effective through the use of new digital technologies. “Happily, every success means more work to be done. We will advance on many fronts. We will substantially improve on the ease of doing business. We will make government more effective through the adoption of new digital technologies. We will seed small businesses to provide a stronger foundation for future growth. We will provide the strategic infrastructure needed to bring all our communities into the mainstream of national wealth creation,” he added.

Case clippings

By Justice S J Ranada Jr. SELF-DEFENSE–Unlawful aggression required The pith and soul of the justifying circumstance of self-defense is the presence of unlawful aggression; the absence of this requisite converts the claim of self-defense into nothingness, because the two other essential elements of self-defense would have no factual and legal basis without any unlawful aggression to prevent or repel. There can be no self-defense unless the victim committed unlawful aggression against the person who resorted to self-defense. People v. Manzano 05 Mar. 2017

GR 217974 Martires, J

Association UX

on’t let the “UX” in the title intimidate you. It’s not something out of this world. It’s actually an acronym for “user experience.” So what does UX got to do with associations? I was reading one of my favorite enewsletters and there was a topic on “green UX.” I understood instantly what “green” was but I wondered what UX meant? So I Googled. User experience (UX) refers to a person’s emotions and attitudes about using a particular product, system or service. It includes the practical, experiential, affective, meaningful and valuable aspects of human-computer interaction and product ownership. Extending this definition further, the Nielsen Norman Group says: “User experience encompasses all aspects of the end-user’s interaction with the company, its services, and its products.” Aha! I thought UX certainly could also apply to associations. Associations provide services and products to their members. In many cases, it is an association’s products and ser vices that attract members to join and remain engaged with the association. T herefore, a great U X should be part and parcel of an association’s marketing strateg y and operational mandate. Here are a few ways for members and potential members to have a delightful UX in your association: Sign-up process—In its e-book, 50 Ways to Boost Association Membership, Aptify says to keep this process simple at every turn by limiting application form fields to only what’s completely necessary, by providing clear instructions with no room for interpretation, by using personalization in your e-mails and software, and by offering resources and tutorials to educate how to use the membership. Mobile access—It’s becoming critical for associations to incorporate mobile more fully into their e-commerce and marketing strategies. In addition to addressing mobile-friendly factors like navigation and appearance, make sure mobile sites offer streamlined mechanisms for volunteer recruitment and donations, minimizing the number of clicks to conversion.

Association World Octavio Peralta Meetings and events—Event planning has now transformed into designing experience. “Events are in desperate need of becoming experiences that will allow audiences to savor the moment while looking ahead to something that will inspire, connect, or surprise them,” says Don Neal of 360 Live Media, at ASAE’s 2016 Springtime Expo. Content—Most associations generate large amounts of content to support their members’ work and interests. In fact, so much of the association value proposition is connected to content, e.g., publications, education, standards, news from the field, etc. To ensure that content is relevant, timely, meaningful and wellcoordinated across the organization, a comprehensive content strategy is vital. Social media—In the same Aptify ebook, staying active in social media isn’t just for recruiting new members; it’s also a great way to keep your current members engaged. Don’t just post your own events and news on social media. Use it as a tool to interact with and promote your members. Liking, commenting or replying to comments on relevant posts is a great way to stay engaged with your members, and to keep a pulse on what they’re up to. T he column cont r ibutor, Oc tavio “Bobby” Peralta, is concurrently the secretary-general of the Association of Development Financing Institutions in Asia and the Pacific (Adfiap) and the CEO and founder of the Philippine Council of Associations and Association Executives (PCAAE). PCAAE is holding a miniconference on public relations, branding and communications on June 6, 2018, at the Philippine International Convention Center (PICC). The event is supported by Adfiap, the Tour ism Promot ions Board and the PICC. E-mail inquiries@adfiap.org.

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Editor: Dennis D. Estopace • Thursday, April 26, 2018

12 new barangays created ahead of polls

By Cai U. Ordinario

@cuo_bm

dozen new barangays were created in the first quarter, months ahead of the local elections, according to the Philippine Statistics Authority (PSA). The 12 new barangays are located in four cities and municipalities, namely, Navotas; Dumalneg, Ilocos Norte; San Jose, Occidental Mindoro; and, Asipulo, Ifugao. This increased the number of barangays nationwide to 42,044 as of March 2018, from 42,036 as of December 2017.

Two barangays were created in the provinces of Occidental Mindoro and Ifugao, and 10 barangays were created as a result of fragmentation of four barangays, according to the PSA. “Meanwhile, the four original barangays were delisted in the PSGC [Philippine Standard Geographic

Code], bringing the total number of barangays to 42,044,” it added. The two barangays that were created were Barangay Naibuan in the municipality of San Jose, Occidental Mindoro, and Barangay Liwon, in the municipality of Asipulo, Ifugao. Barangay Naibuan was created pursuant to Sangguniang Panlalawigan Resolution 138, series of 2007, which was ratified through a plebiscite conducted by the Commission of Elections (Comelec) in January. Barangay Liwon was created pursuant to Republic Act (R A) 10957, which was ratified through a plebiscite conducted by the Comelec in March. Meanwhile, three barangays were created after dividing Barangay North Bay Boulevard South

(NBBS) in Navotas. The three barangays are NBBS Kaunlaran, Dagatdagatan and Proper. Barangay Tangos in Navotas was also divided into Barangay Tangos North and Barangay Tangos South, while Barangay Tanza in the same city was divided into Barangay Tanza 1 and Barangay Tanza 2. The division of barangays in Navotas were done in pursuant to RA 10935 passed in 2016 and was ratified through a plebiscite conducted by the Comelec in January. The PSA also said Barangay Dumalneg was split into barangays Cabaritan, Kalaw and Quibel in the municipality of Dumalneg, Ilocos Norte. This was pursuant to RA 10955 passed in 2017 and was ratified through a plebiscite conducted by

the Comelec in March. “Other update includes the transfer of Barangay Rizal from municipality of Burdeos to municipality of Panukulan in the province of Quezon pursuant to Supreme Court decision on January 4, 2013, which is already final and executory as recorded in the Book of Entries of Judgement,” the PSA added. The compilation of the PSGC is a collaborative effort of the PSA and its Technical Working Group on Geographic Code. Pursuant to RA 10625, the PSA is mandated to prescribe uniform standards and classification systems in the generation of government statistics to ensure harmonization and comparability of statistics in the country and at the international level.

Govt to spend P1.26 billion for 2-lane road in Antique

HE public works department is spending P1.26 billion to build a two-lane road in Antique, the agency said on Wednesday. In a statement, the Department of Public Works and Highways (DPWH) Region 6 Assistant Regional Director Jose Al V. Fruto said the agency is initially developing a P330-million coastal road in the town of San Jose in Antique to “enhance the tourism industry and promote socioeconomic activities,” in the area. He added the 8-kilometer coastal road project, which starts from Barangay Comon to Barangay San Pedro, San Jose de Buenavista and leads to San Jose Port, “is now ongoing” and is part of a larger P1.26-billion project. “The entire project costing P1.26 billion involves the construction of a

two-lane road, including provisions of seawall/esplanade, sidewalks, curb and gutter, drainage structures and other amenities,” he said. Fruto noted that the coastal road will serve as an alternate route for all types of vehicles plying both south and north of Antique, reducing traffic congestion in the Provincial Capitol. “Aside from the impact on traffic, the coastal road is seen to provide local and international visitors with ease in traveling, hence further promote the province’s tourist attractions like beaches, springs, rivers and natural park,” he said. The new road will also provide residents the “opportunity to engage in business and homebased livelihood activities with the increase in visitors in the province.” Lorenz S. Marasigan

Isabela meat prices up as temperature rise

RIVER DROP Unnamed children take a dip at the Canturing River in Maasin, Leyte, Southern Leyte’s commercial and cultural showcase. Rivers have become both a source of livelihood, as well as water resource, for denizens of this agriculture-based province. NONIE REYES

ANTIAGO CITY, Isabela–As temperatures rise here, so are prices of pork and beef being sold in the city’s wet market. “Our real problem now is the scarcity of meat supply, whatever reason it may be. Our limited stocks compel us to raise the price of pork that ranges from [adding] P20 per kilo regardless of cuts,” said Annie Cumarat, a local pork retailer in the city. Another vendor, Elvira Dulay, said beef retailers like her are constrained to raise prices of meat products as a result of the mass exodus of livestock from the province of Isabela by unscrupulous traders, who take most of the livestock to Pangasinan apparently because of better price ranges. “We have no choice but to go with the prevailing price of beef in the market to keep us with the trend,” Dulay said. City veterinarian Solomon Maylem explained raisers and traders are struggling against the effects of a rise in temperatures.

On Wednesday the government’s weather bureau pegged the temperature in this region at 36 degrees Celsius, which is up two degrees from Tuesday’s 34. “The extreme heat being experienced in the Cagayan Valley region makes it difficult for poultry and livestock raisers to control heat stroke that causes massive attack on their farm animals,” Maylem said. Currently, the live weight per kilo of hogs is P150 each, according to Maylem. But some hog raisers doesn’t blame the weather and instead point to the high cost of feeds. The price increase prompted customers to shift to buying fish products, instead of meat. According to fish retailer Anita Austria, the price per kilo of blue marlin and pink salmon used to be P350, but currently sells at P250. In general, seafood and other aquatic products now dominate the trading post in the city. LeonardoPeranteII

Not ours, CPP says of child slain by military in Davao del Sur

HE Communist Party of the Philippines (CPP) denied the 15-year-old boy slain by government troops in Davao del Sur was a member of its armed guerilla front, the New People’s Army (NPA). In a statement, the CPP assailed the Armed Forces of the Philippines over the killing of Rondi Ondo over the weekend at Barangay Astorga, Santa Cruz, Davao del Sur. However, a military official insists Ondo was a fighter of the NPA. “Ondo was with his uncle and cousin collecting coconuts when operating troops of the AFP fired upon them mistaking them for NPA fighters,” the CPP said. “The CPP further condemns the AFP for claiming that Rondi was a ‘child soldier’ of the NPA in a futile effort to cover-up their crime.” According to the CPP, Ondo’s mother, Marissa, vehemently denies her son was a member of Southeast Asia’s oldest revolutionary movement. “The AFP’s fake news mill is daily churning out increasingly incredulous lies in the mass media to fool the people,” the CPP said. However, Brig. Gen. Roberto A ncan, commander of the Army’s 1002nd Brigade, claims Ondo was a member of the NPA, as he even questioned the presence of the boy in the area, noting he was from Makilala, North Cotabato. “Why is he in the area?” said A ncan, noting that the boy’s companions who were also killed were from Makilala, North Cotabato. He also claims that Ondo had a gun. The CPP said the “child killing” added up “to the growing atrocities committed by the military against the masses.” Rene Acosta

DILG helps Five killed in Laguna PNP’s antidrug ops lumad gain more income

A fish vendor at the wet section of Santiago City public market attracts customers with a large exotic fish from the Pacific coast of Dinapigue, Isabela. The extraordinary size entices buyers to have a taste of the rare fish breed. Leonardo Perante II

HE low-paying job of the lumad residing at the Cabadbaran City in Agusan del Norte was put to an end through the intervention of the Department of the Interior and Local Government, the DILG Public Information Office (PIO) claims. For a long period of time, the lumad have been earning between P150 to P200 for every piece of timber (about P1 per board feet) that they bring down to the city from the Hilonghilong Mountain, the DILG PIO said. Each lumad carries a log for about two to three days. Now, each Lumad earns a minimum of P500 per day as porter and as high as P1,500 per day as a tourist guide, the DILG PIO said. Their income is relative to the number of tourists arriving in this province and how far they would hike in the mountains. The increase in the income is credited by the DILG PIO to the Mount Hilonghilong Tourism Sensitivity program created by the Caraga State University (CSU). The CSU project proposal provides a showcase not only of the tourism potential of Mount Hilonghilong, but also something that benefits Lumads and their families, according to the DILG PIO. The DILG provided the CSU a P200,000 worth of technical assistance to kick-start the study. CSU’s concept was in accordance with the results of the Citizens’ Satisfaction Index Survey (CSIS) created by the DILG. The PIO said that the CSIS feedback showed that of all the services of the local government of Cabadbaran City, tourism ranks the lowest in terms of awareness.

IVE suspected drug couriers were killed on Wednesday after they allegedly engaged policemen in separate firefights during buy-bust operations by the Laguna Philippine National Police (PNP). Senior Supt. Kirby John Kraft, director of the Laguna Provincial Police Office (PPO), said the first operation was launched by joint elements of the Calamba City Police Station and Philippine Drug Enforcement Agency-4A in Purok 7, Barangay Pansol at around 2:30 a.m. Kraft said the suspects sensed they were transacting with policemen during a buy-bust operation, prompting them to shoot it out

with the lawmen. Killed were Christopher Manjares Gonce alias Boy B, who was the subject of the buy-bust operation, and his unidentified cohort. “Based on the initial investigation conducted, that suspects fired upon the PNP personnel when the suspects sensed that they were transacting with police operatives. The encounter resulted to the death of the suspects,” Kraft said. Seized from the suspects were two caliber .38 handguns, an improvised grenade launcher loaded with .40 millimeter ammo, 16 sachets of suspected shabu, 11 pieces cartridges, three live ammo, three spent bullets and the P500 bill

marked money. In San Pablo City, also in Laguna, three suspected drug peddlers were also killed after they allegedly engaged police operatives in a firefight. Killed were Reynaldo Dante, Wilbert Sardido and their unidentified cohort. The three were killed after they reportedly fired at operating elements of the Laguna PPO-Drug Enforcement Unit, led by Chief Insp. Ricky Dalisay along Sitio Biuyan, Barangay Santo Angel at around 5 a.m. Recovered from the scene were three caliber .45 pistols, seven sachets of suspected shabu and the two P1,000 bills used as marked money. Rene Acosta

Include cultural mapping in Marawi rehab—NCCA

AVAO CITY—The Mindanao State University (MSU) in Marawi City and the Autonomous Region in Muslim Mindanao (ARMM) have requested for a cultural mapping of this city by the scenic Lake Lanao, the identification of existing or damaged cultural sites of which may be incorporated in the rehabilitation of the city. Augustinian priest Harold Ll. Rentoria, commissioner for cultural heritage of the National Commission for Culture and the Arts (NCCA), said the MSU main campus and the ARMM Bureau of Cultural Heritage recently approached him to conduct the cultural mapping of the city, saying that this may helped restore heritage sites that were destroyed during the May-October 2017 battle against Islamic State of Iraq and Syria-linked terrorists. Rentoria said the mapping would be conducted soon to catch up also with the drawing up of the comprehensive plan to reconstruct and rehabilitate the city of 200,000 residents.

Many of these people are still staying in temporary shelters, evacuation centers and homes of relatives across Lanao del Sur and surrounding cities of Iligan and Cotabato. The target of the mapping are heritage sites, commonly those structures not less than 50 years old, “which are either old houses and buildings, churches and mosques and other culturally shared structures.” “The heritage sites are either recognized and respected by the locales, or they were ignored or taken for granted by local residences,” Rentoria said. The NCCA has done random mapping of places across the country and has known of the existences of centuries-old structures as also being noted by local governments in their notes of requests for mapping by the NCCA. “There are also mosques and churches in the Moro areas that needed mapping,” Rentoria added. In the case of Marawi City, the cultural map would hope to catch up with the rehabilitation plan.

“But we would also like to know from the Task Force Bangon Marawi on which kind of rehabilitation works would be applied: Is it the entire city or the part of the city that was destroyed by the siege.” Rentoria said he would officially sit in the board of directors of the Task Force Bangon Marawi soon. So far, he added, it would not be difficult to persuade rehabilitation bodies to include rehabilitation of heritage sites, saying that it was done in many previous reconstructions of places. The cultural mapping was earlier requested by the Marawi City government in 2016, and the NCCA met with them in 2017. The same request was also sent by the governor of Maguindanao last year, but the siege in Marawi City has affected the security situation in the province also, which forced the mapping to be suspended, he said. Now, t he prov i nce wou ld also like to proceed with the mapping. Manuel T. Cayon

A10 Thursday, April 26, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

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editorial

Protecting the poor

here’s general consent that the Philippines can offer market opportunities for microinsurance providers because millions of citizens are exposed to potential risks from natural disasters such as typhoons and earthquakes. The problem, however, lies with commercial insurers who continue to shy away from the lower-income segment, either because of their limited knowledge of this market or their inability to design insurance products for the poor.

Microinsurance is generally for people who are ignored by traditional commercial insurance providers. Typically low income, these people work in the informal economy and have irregular cash flows. As such, they are economically poorer than their formal sector counterparts due to the non-regularity of income, seasonal fluctuations in their earning capabilities, and their inability to cope with various risks that sometimes may be catastrophic. With incomes hovering around the poverty line, they have little or no savings and possess very limited capacity to access social services on a regular basis. All of these could be the reasons commercial insurance providers do not cater to the needs of the informal sector. From a business point of view, large insurance companies may find this sector financially unattractive, as they have to deal with small insurance policies, large volume of transactions, and will have to operate in remote areas to service the poor. Given the lack of infrastructure in areas where most of the low-income households live, the costs to collect premium payments, file and process claims, register and renew membership, keep members informed and recruit new members necessarily increase. The existing barriers to entry include high transaction costs, actuarial difficulties, aggregate risks, lack of information and a restrictive regulatory environment. An example of the latter is the huge capital requirement needed to put up an insurance entity. This induces insurance firms to target the big rather than the small clients to compensate for the cost of capitalization. The implication is the exclusion of a large segment of the Philippine population from insurance coverage. For the longest time, the poor have been excluded from commercial insurance coverage due to various constraints. There’s a valid observation, however, that commercial insurance providers have not done much to reach out to sectors outside the formal economy. That’s because traditional insurance products were designed with the middle and high-income class in mind. Sadly, despite their great need for some form of social protection, the poor lack the capacity to access insurance products. A study done by Gilberto M. Llanto, Joselito Almario and Marinella Gilda Llanto-Gamboa—“Micro-insurance in the Philippines: Policy and Regulatory Issues and Challenges”—said the low-income households’ demand for insurance has a corresponding “willingness-to-pay.” They are willing to pay the pure premium, which is equivalent to the probability of risks plus expected losses. It added: “But the real cost of insurance, which determines insurance supply, is equal to the pure premium plus transactions costs, extra costs associated with uncertainty, and profits for the insurers and reinsurers. The sum of all these items constitutes the actual premium. The price of insurance that is affordable to low-income households may be less than the cost at which commercial insurers are willing to supply insurance. Hence, a demand-supply gap in insurance arises.” Among others, the study recommended a “review of the current regulatory environment, identification of barriers to sound microinsurance and the formulation and adoption of appropriate rules and regulations and guidelines for the safe and sound operation of institutions providing microinsurance and for the protection of policyholders.” The study confirmed there’s huge demand for low-income households to have some insurance coverage. Clearly, there’s business to be made in this sector for insurance providers who can design microinsurance products for the poor.

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Investments: Nothing new under the sun John Mangun

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he biblical book of Ecclesiastes was written sometime during the period from 450 to 180 BCE. In the writings is a profound observation of history backwards and into the future. A section of chapter one reads “and there is nothing new under the sun. Is there a thing of which it is said, ‘See, this is new’? It has been already, in the ages before us.” Philosophically we like to think that this describes the continuity of human existence—birth, life, and death for everyone. But it also describes almost everything else. We think of technology as bringing forth something new but there have been just a few “inventions” that changed the world and were not just improvements. Producing and harnessing electricity was one such event. Another was heavier-than-air manned flight. There are other examples, of course. Yet, the personal computer is really just a super cool and efficient typewriter, abacus and

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A building—condo, house or whatever—comes with good appreciation potential, but has no cash liquidity until you find a single buyer. At least you will always have a roof over your head. Debt—loaning someone money—has always been a popular investment. But an ancient Babylonian tablet reads like a Facebook post. “I loaned Nassir money and he didn’t pay me. Stay away from this crook if you want to get your money back.” Commodities like wood, wheat, and wool are always liquid but require storage and being guarded from theft. But you personally can use those goods if there is no buyer. Each investment vehicle has its own unique qualities that actually never changes. The only reason to invest in the stock market is instant liquidity at a price. When the stock market is closed, your investment is absolutely worthless. You can’t eat it, wear it, or keep the rain off your head with it. The same is true of flash drive with a thousand Bitcoins in it.

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.

Are they not victims of hatred and vindictiveness?

✝ Ambassador Antonio L. Cabangon Chua Publisher

communication device that may have changed the world but was an extension of what came before. Artwork in Greek and Assyrian culture from 1800 BCE shows horsedrawn carts. The mass produced automobile of the 20th century was nothing more than a change from horse power to engine power. Elon Musk may someday rocket to Mars but his automobiles are the same as 100 years ago—a box resting on a frame which is secured to two axles and four wheels. And the Ford Model “T” made until 1927 had a feature the Tesla does not offer—a

crystal flower vase on the dashboard. At a recent Investment conference, one hedge fund manager predicted that Bitcoin would go to $700,000 because “It is the first viable candidate to replace gold in the world.” Sorry partner, you’re late to the party. The Chinese “replaced” gold with “paper money” during the Tang Dynasty (618-907) because the warlords were annoyed with their couriers being robbed of physical gold so often. The expert goes on to say that “it is vastly easier to store and transact with than gold.” That maybe true under normal conditions but one of the reasons gold is still around after a few thousand years was for that exact reason. When the enemy troops came plundering, you could swallow a few nuggets of gold, escape to safety and then let your digestive system do its thing. UBS flash drives do not work well that way. In spite of all the fantastic investment inventions of the past decades, there is really nothing new under the sun. Raw land has the same opportunities today as before. As long as you can keep the “informal settlers” away, land is a store house of future potential wealth.

N Monday Jesus I. Santos, the irrepressible lawyer who consistently advocated for a clear accounting of the multibillion-peso funds of the Government Service Insurance System (GSIS) used in various currency investments, has again tactfully demanded for transparency in a letter to GSIS President and General Manager Atty. Jesus Clint O. Aranas. Speaking as counsel for the Confederation of Government Employees Organization Inc. and the National Association of Lawyers for Justice, Santos said it is their “constitutional and God-given rights to know as to the status of the huge investments considering that we are part owner not mentioned in the exemptions cited by the letter of then-GSIS Officer in Charge Atty. Nora Saludares.” Saludares had written Santos a letter earlier mentioning confidential exemptions against transparency on GSIS funds. “And so Mr. President, our rightful claim for transparency as part owner of these huge investments and to our regrets and disappointments up to now remained unanswered and ignored,” Santos told Aranas. “We most respectfully understood and respect her views,”

Santos said, “but unfortunately, we do not agree with her views and honestly believe that we have a right to be fully informed about the status of the huge investments on the following: “1. How and what is now the status as to the $1 billion withdrawn and invested in the local stocks by the former board during the past administration? “2. What happened to the P87 billion also invested by the former board in the local stock? “3. What happened to the huge funds, proceeds of the sale of the Philcomcen Building by the GSIS, which was not revealed in public, but instead, what was published is the profit of P565 million also invested in the local stock market? “4. Sir, there are other investments made by the former board which are part of the records in our

communications with the GSIS.” “Our apprehension was aroused when prices in the local stock market dropped unfavorably affecting our country then during the past administration,” Santos said, referring to President Benigno S. Aquino III’s administration. In a previous communication, Aranas referred Santos to the letter of Saludares, who mentioned several confidential exemptions on the transparency of GSIS funds. Because of her letter, Santos filed a case against her with the Ombudsman for violating the anti-graft law (Case IC-OC-16-1267), which is now pending resolution. Strangely, Santos, instead of being listened to, ended up being harassed and persecuted for safeguarding the interest of GSIS members and executives. At one time, revenue agents shadowed and secretly investigated him for tax evasion, while the GSIS management held his benefits as a board member along with another GSIS board trustee, Alejandro Roces, the late President Diosdado Macapagal’s education secretary and a National Artist, who was also an avid advocate for transparency. Before he died in May 2011 at the age of 86, Roces made a testament, with his family and Santos as his witnesses, that his benefits fund be donated to a charitable institution chosen by GSIS. While others had gotten their benefits, the GSIS management

refused to release the benefits of Santos and Roces, who both retired as GSIS board members in 2010. Roces and Santos were appointed to the GSIS board by President Gloria Macapagal-Arroyo, who was persistently persecuted and put in jail by the Aquino administration. Santos, now 92 but still active in lawyering, is known as a close friend of the Arroyo couple and former Senate President Juan Ponce Enrile, who was also jailed along with opposition Senators Jinggoy Estrada and Ramon Revilla Jr. Santos’ godson, Atty. Ruel Lasala, then deputy NBI director, was also unceremoniously removed from the service together with Atty. Reynaldo Esmeralda, also a deputy NBI director, by President Aquino’s Justice Secretary Leila M. de Lima who was, in turn, jailed by President Duterte’s administration on antidrugs charges. The NBI is under the justice department. In the preliminary investigation, Lasala and Esmeralda testified against de Lima on her alleged complicity in criminal activities. The case for reinstatement of the two highly decorated NBI officers are still pending in the office of Executive Secretary Salvador C. Medialdea. Are Santos and Roces not victims of the previous administration’s pattern of hatred and vindictiveness? To reach the writer, e-mail cecilio.arillo@ gmail.com.

Opinion BusinessMirror

www.businessmirror.com.ph

‘Toys R Us’

Pruned to bear fruit Ariel Nepomuceno

Msgr. Sabino A. Vengco Jr.

DECISION TIME

Alálaong Bagá

ne by one, many iconic companies who once dominated the global market fall. Those who survive, for the moment at least, are desperately reconfiguring their long-term strategies in order to resist the onslaught of competitors who ride on the digital platforms which provided a now proven gamechanging power that disrupted many industries. One casualty, to the dismay of many children, parents and grandparents is Toys R Us. This toy-retailing giant is a victim in the fast-changing global business environment. Riding the tide of the growing consumerist economies after World War II, Toys R Us was formally organized in Maryland, United States, in 1957. The new generation of baby boomers, their children and grand children, became the instant patrons of the toy champion, which was actually an offshoot of the ”Children’s Supermart” founded by Charles Lazarus in 1948. Children’s Supermart started only as baby furniture retailer but eventually diversified into selling toys because of the constant and strong demand for the kids’ imagined best friends. From 1957 until the late-1990s, Toys R Us was crowned “category killer” for the toy-retailing business. Hundreds of stores sprung in the US, Canada, Europe and Asia. Thousands of jobs were also created and countless smiles displayed by children even by simply entering the stores of Dr. G Raffe, the official mascot. Toys R Us was a paradise that would quell even the most difficult of the young ones’ tantrums. Perhaps, to many elders who would enjoy the bookstore for an antistress stroll, Toys R Us was a freedom and fantasy park for many kids. Today, Toys R Us outlets are on the exit except in some areas in Hong Kong, Mainland China, the Philippines and other Southeast Asian territories where the original brand entered into jointventure operations with the locals. Perhaps, they’re also clinging to dear life and maybe being subsidized by angel funders.

Game changer Technology changed the game. For many industries, the Internet disrupted the way business is conducted. It adjusted how income is created, distributed and amassed. Technology has created a different method of window shopping, purchasing, paying for the items bought and delivering the goods to the customers. Amazon and Alibaba, for example, humbled several retailers that were kings until they failed to cope with the strides of the digital revolution. Macy’s, JC Penney, RadioShack, Barnes & Nobles are among the many who hoisted the white flag in the merciless merchandising war. Even in the entertainment world, we now witness how Netflix overhauled the watching habits of worldwide viewers. Thus, revenue streams were redirected. Further disruptions were created by the likes of YouTube, iFlix, Prime Video, Google Plus and many more social media and digital platforms which rule the behavior of the market, advertisers and investors. Heard of Grab and Uber replacing the traditional yellow cabs? And now, at the doorsteps of the finan-

cial world is the blockchain technology that ushers in a new era of how transactions will be done.

Entrepreneurs and mentors The world is changing. Baby boomers, generation X, millennials and other batches would experience an almost different way of living compared to the previous generations at least in one of their lives’ major aspects—commerce. The way wealth is created and transferred is much different than before. Our business schools must scientifically convey and inculcate the different skills set and knowledge needed to equip our managers and budding businessmen in order to adjust and compete in the modern international arena. The changing world is also becoming smaller and ultra-connected. Our entrepreneurs must be mentored well and be made aware of the constantly changing rules of the game. Our country has our own contribution to the world’s list of richest persons. Our local tycoons proudly and successfully joined the illustrious roll call of the world’s billionaires. We have Henry Sy, Lucio Tan, John Gokongwei, Andrew Tan and the brothers Zobel. Competing in the international port operations is Ricky Razon, who has major footprints in many cities outside the Philippines. Even Ambassador Chan of the Oishi fame is in mainland China, his delicious snacks are fast-moving items in the new superpower’s stores. Ramon Ang has displayed his M&A savvy, which catapulted the San Miguel group in a much-diversified portfolio. Manny Pangilinan made a name for acquiring huge cash cows in major industries. The point is, we have our own entrepreneurial class that can collectively mentor the next generation of business leaders. At the very least, they must consciously contribute to the development of the next generation of entrepreneurs into world-class managers and leaders. They must look beyond their own corporate backyard. They must impart, not so much about the digital agenda, but more on the ways on how they all succeeded and sustained their achievements. The fates of many fallen giants provide a clear business case on the impact of technology, especially to commerce and business organizations. In fact, there are many sordid stories that would point to the same direction, and to the same stark business norm of either you shape up or ship out. By the way, Toys R Us will be terribly missed in many parts of the globe. For comments and suggestions, e-mail arielnepo. businessmirror@gmail.com.

A nation of masochists? Val A. Villanueva

Businesswise

otwithstanding the surveys dished out by different polling firms, maybe it’s time for us to assess and reflect on what our nation has undergone under the Duterte administration. To paraphrase the campaign line of the late former US President Ronald Reagan, ask yourself: “Am I better off today than I was two years ago? Different surveys affirm that President Duterte enjoys enviable popularity ratings among those who had been surveyed. I’m not casting doubt on the

veracity or accuracy of these surveys, paid for by a client or otherwise. But it’s perplexing, to say the least, that it doesn’t jibe with reality.

he vine and its branches is our next allegorical metaphor for the intimate relationship between Jesus and His disciples (John 15:1-8). Jesus shares His life with His followers on the level of grace and indwelling.

Fruitful branches of the vine IN the prophets’ language, Israel is God’s vine or vineyard (Hosea 10:1; Isaiah 5:1-7; Jeremiah 2:21), expected to deliver to the satisfaction of the vine owner; the people’s infidelity compare them to fruitless and wild vine (Jeremiah 5:10; 12:10-11). Jesus now clarifies that He is the true vine, and His Father is the vine dresser who is glorified by much fruit. Jesus is replacing Israel as God’s vine that gives life to humanity, and the works He has done pleasing to the Father proves His true identity, the promised Messiah who would fulfill God’s will (John 10:25; 17:4). His own fidelity and fruitfulness is the sign that should open the eyes of the

public asking for a sign from Him. As Jesus is the fruitful vine, His disciples are His branches that must also be fruitful. “By this is my Father glorified, that you bear much fruit.” The barrenness of Israel must now be redeemed by the fruitfulness of the new people of God in Jesus, which is guaranteed if they remain in Him like branches remaining on the vine. As a branch on its own cannot bear fruit, neither can a disciple who does not remain in communion with Jesus. Branches that are barren are cut off from the vine and wither. They are gathered and piled together in a corner of the vineyard to be burned. The sterile branches are the believers who are so only in name.

Thursday, April 26, 2018 A11

Pruned by the word IF the disciple by remaining in Jesus bears much fruit, what will insure that the disciple like a branch remains in Jesus as on the vine and therefore will not be barren? For us to be in communion with Jesus means that His words remain in us. He is the Logos, the Word of the Father communicating to us the saving will of God. Union with Jesus is sharing the same life of intimacy with the Father. And this union with Jesus demands that His Gospel is our lifeblood, His word our nourishment, His spirit our vitality. The word of Jesus in His gospel is what makes the disciples like fruitful branches. It is like the pruning knife that trims the branches clean. By the word of Jesus, what is in excess is excised and what is in deficiency augmented. The pruning takes place regularly. Cut to the quick and gnarled, the branches of the vines display no beauty but rugged endurance and fierce strength. It must be so if they are in a matter of time to come out with verdant foliage heavy with succulent grapes. From apparent death to abundant life, what dies produces much fruit (John 12:24).

Revisiting the irrevocability rule

In such case, our Tax Code provides the corporate taxpayer with two options. First, the corporation can be credited or refunded with the excess amount paid. This would involve filing a claim for refund or issuance of a tax credit certificate (TCC). Second and last, the corporation can carry over such overpayment to the succeeding taxable quarters. The overpayment shall be applied as tax credit against income-tax due. It is settled in jurisprudence that once the option to carry over the excess and apply the excess quarterly income-tax payments against income-tax due for the taxable quarters of the succeeding taxable years has been made, such option shall be considered irrevocable for that taxable period and no application for cash refund or issuance of a TCC shall be allowed. The unutilized tax credits will remain in the taxpayer’s account and will be carried over and applied against the taxpayer’s income-tax liabilities in the succeeding taxable years until fully utilized. Notably, nowhere in its decisions has the Supreme Court (SC) ruled on

whether the irrevocability rule also applies to the option to claim refund or issuance of TCC, that is, not until its most recent landmark ruling in the case of University Physicians Services, Inc.—Management Inc. v. Commissioner of Internal Revenue (GR 205955, March 7, 2018). In the said case, the taxpayer filed its annual income-tax return (ITR) for the year ended December 31, 2006, reflecting an income-tax overpayment. In the said ITR, the taxpayer elected the option “To be issued a tax credit certificate.” Thereafter, the taxpayer filed an annual ITR for the short period fiscal year ended March 31, 2007. The said ITR reflected the income-tax overpayment from the previous period as “prior year’s excess credit.” On the same day, the taxpayer amended the annual ITR to remove the excess credit for 2006. Petitioner later filed with the Bureau of Internal Revenue a claim for refund and/or issuance of a TCC for the alleged excess credit for 2006. The claim was later elevated to the Court of Tax Appeals (CTA). Both CTA Division and CTA En Banc ruled that the taxpayer

effectively exercised the carryover option when it included the excess tax credit for 2006 in the original ITR for 2007. Before the SC, the taxpayer contended that the option to be refunded through the issuance of a TCC is, likewise, irrevocable. Following this novel theory, it argued that when it indicated in its annual ITR for 2006 the option “To be issued a tax credit certificate,” such choice precluded the other option to carry over. The SC disagreed and ruled against the taxpayer. According to the SC, the irrevocability rule is limited only to the option of carryover. The Court held that there is nothing in the law which prevents the taxpayer who originally opted for a refund or TCC to shift to the carryover of the excess creditable taxes to the taxable quarters of the succeeding taxable years. However, if the taxpayer decides to shift its option to carryover, it may no longer revert to its original choice due to the irrevocability rule. The SC also clarified that when it declared in its previous decisions the words “the options are alternative” or “the choice of one precludes the other,” the Court meant that the taxpayer cannot avail of both refund and carryover at the same time. The SC did not lay down any doctrinal rule that the option of refund or TCC is irrevocable. Applying this landmark doctrine, the SC ruled that the taxpayer in the said case is barred from recovering its excess creditable tax for 2006 through refund or TCC. The taxpayer constructively chose the option of carryover when, despite its initial option to refund, it subsequently indicated in its 2007 ITR that it carried over the 2006

The Philippine stock market, Finance Secretary Carlos G. Dominguez III’s favorite economic barometer, is now considered the world’s worst performer this year, according to Bloomberg, losing more than $20 billion in market value for the country’s benchmark index since the start of 2018. The Philippine Stock Exchange Index (PSEi) nosedived by as much as 2.3 percent at the Manila exchange, courting its lowest close since May 2017. Brokers dread that the index would breach downward the 7000 index; this, after a decisive breakout past 8,000. The PSEi even touched an intraday all-time high of 9,078 on January 29. But since then, the index has gone downhill, plunging 14.9 percent from its all-time high, closing at 7,727 a week ago. If we take into account peso devaluation, the

index has fallen 13.6 percent yearto-date in US dollar terms. Note that year-to-date net sell-off of foreign funds reached P39 billion. Heavy foreign selling has considerably added to the PSEi’s drop. Foreign funds eat up a 49-percent pie slice off the stock market’s value transacted for the year. Another bummer is the not-sopretty perception of how Duterte manages the country’s affairs. Foreign equity strategists have signposted many local issues that inflame rising ambiguity in the Philippine stock market. The political risks cited were the likely International Criminal Court (ICC) investigations on extrajudicial killings (EJKs), fresh declarations by the EU Parliament on EJKs, impending removal of the country’s Chief Justice and recount of the vice

presidential election. Joshua Crabb, head of Asian equities at Old Mutual Global Investors AP Ltd., inferred that rising costs of oil and the country’s staple food, rice, have added to price pressures and hurt the Philippines, which heavily relies on crude-import. In fact, after Kazakhstan, the country has the wildest pace of inflation among 17 Asia-Pacific nations followed by Bloomberg. The Philippine peso is overstressed with concern about the nation’s widening current-account deficit. The currency has deteriorated more than 4 percent this year against the dollar, hovering to P52 since the last few weeks. “Fundamentals are pointing to a weaker peso—worsening currentaccount and trade deficits and accelerating inflation,” said Teppei Ino, an

Atty. Pierre Martin Reyes

Tax Law for Business

ore often than not, the sum of the quarterly tax payments made by a corporation during the taxable year is more than the total tax due on the entire taxable income of that year. In simpler terms, corporations have overpaid their income-tax liability as adjusted at the close of the taxable year. This is mostly due to the excess withholding taxes on income payments.

Alálaong bagá, the symbol of vine and grapes adorning our liturgical altar and vestment should not be seen only in terms of Jesus and of the miracle of the transformation of the wine into the blood of Jesus. The completeness of the metaphor lies in the subsequent miracle, the transformation of the communicants into greater Christ-likeness and fruitfulness in Jesus. Such fruitful faith is assured by the fidelity to the word of Jesus. On the other hand, sterile unbelief is identifiable with the rejection of Jesus, as also in the barrenness of nominal Christians who do not live according to the gospel of Jesus. Trimmed clean in order to increase yield, attentive to the word as they approach the Eucharistic table, the true believers are literally the community of Christ’s fruit-bearing disciples glorifying the Father. Their fruits are love, truth, justice, mercy, joy and courage. The fruitful branches united to the vine, in the schema of John (13:1-15), are those followers whose feet have been washed clean by the Master and are, in turn, directed to wash the feet of others. Join me in meditating on the Word of God every Sunday, from 5 to 6 a.m. on DWIZ 882, or by audio streaming on www.dwiz882.com.

excess creditable tax and applied the same against income-tax due for 2007. The taxpayer can no longer revert to its initial choice. The SC held, however, that the taxpayer remains entitled to the benefit of carryover and may apply the 2006 excess credit in succeeding taxable years until fully exhausted. In view of the SC’s ruling in the University Physicians Services case, the rules can now be summarized as follows: Once a taxpayer chooses the option to carry over, such option shall be considered irrevocable. It can no longer opt for a refund or issuance of TCC; If the taxpayer elected refund or issuance of TCC, such option is revocable. The taxpayer is free to change its choice and opt for carryover; and If the taxpayer opts to carry over such excess creditable tax after electing refund or issuance of TCC, the carryover option is, likewise, irrevocable. The taxpayer cannot revert to its original choice of refund or issuance of TCC. These rules should serve as a guide to taxpayers as they determine their course of action on their excess tax credits and as they now evaluate the propriety of past actions taken in this regard.

analyst at MUFG Bank Ltd. in Singapore. “We are seeing a weaker bias for the peso and see a possibility the currency may fall near P53 or even beyond P53 per dollar before the end of this quarter.” Also, records from the Philippine Statistics Authority (PSA) show that investment guarantees made by foreign firms slithered down by 51.8 percent to P105.6 billion in 2017, after a sharp 82.8-percent drop in fourthquarter pledges. The latest PSA data showed that foreign investments accepted by seven investment promotion agencies last year declined from P219 billion in 2016.

The author is a senior associate of Du-Baladad and Associates Law Offices (BDB Law), a memberfirm of WTS Global. The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported therefore by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at pierremartin.reyes@bdblaw. com.ph or call 403-2001 local 311.

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