Businessmirror august 01, 2016

“He attacked the distinguished father of a soldier who sacrificed himself for his unit, Captain Khan. I think it is fair to say he is temperamentally unfit and unqualified.”—Hillary Clinton, taking aim at Donald Trump for criticizing the bereaved mother of a Muslim US Army captain, a comment that sparked outrage across the political spectrum on Saturday. AP

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“The times we live in do not call for young ‘couch potatoes,’ but for young people with shoes or, better, boots laced.”—Pope Francis, addressing hundreds of thousands of young people in a huge field in Brzegi, a village outside the southern city of Krakow, Poland. AP

“We don’t really, in some cases, don’t really have good options.”—Billionaire industrialist Charles Koch, describing the 2016 “political situation.” AP

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Monday, August 1, 2016 Vol. 11 No. 296

BIR banking on ‘Duterte magic’ to hike collection By David Cagahastian

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what’s safe? Europe grapples with security after attacks

Reading PPP into the Sona

@davecaga

nternal Revenue Commissioner Caesar R. Dulay has a bold plan to ride on the recordhigh popularity of President Duterte to collect the various tax due the government through voluntary compliance, and make up for foregone revenues expected from the proposed lowering of personal and corporate incometax rates.

INSIDE

P25.00 nationwide | 5 sections 40 pages | 7 days a week

Continued on A2

PPP Lead

I’m sensing that there are many in the BIR who are upright, and who are serious in their support for the President.”—Dulay

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Traffic-solving Pinoy innovation adopted in 136 cities, except Phl

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Alberto C. Agra

id President Duterte mention public-private partnerships (PPPs) in his State of the Nation Address (Sona)? Can the programs and projects he enumerated last week be pursued through PPPs? Is PPP a viable option for the priority activities of the current administration? While there was no mention of PPP in the Sona on July 25, the vision and the context by which PPPs can be effected have been laid out. For PPPs to work and to work in harmony with other change strategies, the “dream” and the values by which this will be achieved must be clarified. The President has sent the message. Continued on A14

10 SONA-Stated Possible PPP Projects

world

Roads

a8

Mass Killings: Asking Why

Bridges Airports Tourism Harvest Facilities Public Health Irrigation

Transjakarta Zhongtong articulated buses at Harmoni Central Busway, Central Jakarta, Indonesia. Gunawan Kartapranata-Own work, CC BY-SA 4.0 By Michael Makabenta Alunan Special to the BusinessMireror

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perspective

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First of three parts

T is ironic but true: There are now over 136 cities in 39 major countries worldwide that have adopted a traffic-solving transport innovation started by a Filipino inventor, which caught the World Bank’s attention and got adopted by the US and the world over, but

PESO exchange rates n US 47.0850

treated with disdain, lamentably, in the Philippines. Not wrong to copy, but don’t copy wrongly? Innovator Francis R. Yuseco Jr., a onetime investment banker, registered his intellectualproperty rights (IPR) 27 years ago in 1989, or 10 years before the popular bus rapid transit (BRT) was adopted abroad. For Yuseco, getting copied is okay, provided it redounds to the

common good, but what matters most is being ignored locally. In the free market of ideas, one can’t demand consideration for originality, as any modification in design, or even change in name, is considered, at times, an innovation and, thus, tolerated. Lamentably, if they have copied, they should have, at least, done it grammatically. His system

Rail Ferry System Public Wi-fi Author: Alberto C. Agra

bm Graphics: Job Ruzgal

Continued on A2

n japan 0.4474 n UK 61.9968 n HK 6.0708 n CHINA 7.0858 n singapore 34.7824 n australia 35.3138 n EU 52.1561 n SAUDI arabia 12.5557

Source: BSP (29 July 2016 )

A2 Monday, August 1, 2016

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Traffic-solving Pinoy innovation adopted in 136 cities, except Phl Continued from A1

PhilTrak rapid transit (PRT), a proposal of his company PhilTrak, was renamed BRT “Rapid,” describing the bus transit, thus, it should have read “rapid bus transit” to be grammatically correct. But because the Americans called it so, everyone swallowed it without question. With improvements, Yuseco now calls it Intel-Track, for Philippines Integrated Intelligent Trackways. Perhaps, it’s best to correct its nomenclature to its generic descriptive acronym as RBT, for rapid bus transit.

Faster, cheaper and bigger impact WHATEVER the name, Yuseco said his is much cheaper by a fraction of the costs of railway, which requires massive construction of pillars, railroad tracks, costly train coaches and power systems, which entail huge investment costs, and five years to build. But Yuseco’s Intel-Track “can be completed in six months to eight months, or one year, at most to allow delays, because all it takes are designated road tracks. “ Unlike railways, which are subsidized and imported, Intel-Track

is subsidy-free. In fact, this is why many countries have shifted to RBT from Metro Rail Transit (MRT)/ Light Rail Transit (LRT). While railways are dependent on foreign technology, foreign imports, foreign loans, foreign consultants and everything foreign, Yuseco’s RBT involves local innovation, local design, local engineers, local investors and local funding. Except for engines of buses, road tracks can be built by local contractors using local materials, thus, generating local employment. The “ticketing system” and bodies of the buses can also be done locally. With high local content and huge dollar savings, expect higher economic multiplier effects.

Studies, experts validate Yuseco’s idea AS early as August 1989, the National Center for Transport Studies (NCTS) at the University of the Philippines declared Yuseco’s RBT of only 92 articulated (elongated) buses, carrying 200 passengers each, mostly standing, except for the elderly, pregnant, etc., similar to LRT/MRT, can match the volume of passengers carried by LRT, or the volume of 6,000 regular buses. T hey can transpor t about

1,054,000 passengers daily. The study by the NCTS, then called the UP Transport Training Center (UPTTC), was corroborated by the Department of Transportation and Communications (DOTC), the Department of Public Works and Highways (DPWH) and the Metropolitan Manila Development Authority (MMDA), with all agreeing RBT has the same operating efficiency and capacity of railways, and has an “amazing decongestion factor of 96.8 percent.” These buses are 18-meters long and 2.7-meters wide, and if necessary design, even much longer buses. If Singapore has buses with passengers standing, except for the elderly, pregnant and the disabled, these buses must also allow mostly standing. Rejected by all, except thenPresident Fidel V. Ramos (FVR). Except for Ramos, all past administrations rejected Yuseco’s proposal. Even former President Benigno S. Aquino III’s administration wanted railways, but could neither fix MRT. It even told Yuseco his proposal is allegedly “merely theoretical, unproven and has limited systems capacity.” Under FVR and eight months of study, it was recommended that pilot tests be done along Common-

wealth Avenue and C-5. By October 15, 1997, the Ramos administration made a historic move to award the first RBT project of its kind in the world. Signatories were the late Transportation Secretary Arturo T. Enrile, Public Works Secretary Gregorio Vigilar and MMDA Chairman Prospero Oreta. But when Enrile died, his successor, Josefina Lichauco, had it reviewed, but approved it anyway. To waive a public bidding, what were invoked was a constitutional provision favoring local inventors; Republic Act (RA) 7459, providing incentives to Filipino investors, and RA 8293, respecting intellecturalproperty rights.

Gains WB, world attention YUSECO shows “two vital documents proving indisputably that it gained more attention abroad and that it is Filipinos—the inventor, engineers and academe—who are the originators of the global phenomenon [BRT].” One is the World Bank Internal Memorandum dated April10, 1990, written by World Bank transport expert Gerhard Menckhoff, who met and praised Yuseco for “the vision, features and operating characteristics of the Filipino invention” and recom-

mended it as “the appropriate mass-transit system for developing and developed economies.” He disseminated it to all World Bank officials worldwide. The other is a letter from American Bus Association (ABA) President Georg Wynn on August 31, 1999, citing US Federal Transit Administrator Gordon Linton declaration to “reinvent bus service in the US, with the features and characteristics identical” to Yuseco’s PRT, but baptizing it with the catchy but grammatically wrong BRT. When interests interfered? After getting reviewed and approved twice, Yuseco’s project suddenly screeched to a halt, after the Development Bank of the Philippines (DBP), under the next administration, suddenly demanded P1 billion in hard real-estate collaterals. One can only surmise or hazard a guess of interests interfering. And yet, DBP took bigger risks bankrolling a lease financing for shopping lines, by purchasing the ships and leasing them to industry. It is ironic why a project with great impact is not funded, even by phases, and yet, four foreign investors even get power subsidies of P5.86 billion for 2016 alone as provided under Executive Order 666, a number which sounds unholy to

Christians. Public transport’s interests must also be managed well and told they will not be threatened much because when motorists leave their cars, traffic will ease up, and create a huge demand for public transport along arterial roads feeding into the Intel-Tracks. This is crucial because many good plans are blocked when marginalized transport groups oppose, although the government must carry the higher interests of the bigger riding public. Offtrack maybe, but on-track to the end. Yuseco’s project may have gone offtrack temporarily for almost 30 years, but he hasn’t given up his advocacy, a passion he has developed as early as his first job when he worked with Pantranco North Express. Although he later became an investment banker with companies like Bancom Development Bank, and much later as a partner and executive director of the Philippine Investments Systems Organization, he continued to pursue his passion in transportation. And to quote Les Miserables French writer Victor Hugo, “Nothing can stop an idea whose time has come.” Yuseco should also realize that the government, in the end, can be reasonable, if he is able to reason. To be continued

BIR banking on ‘Duterte magic’ to hike collection Continued from A1

In an exclusive roundtable discussion with the BusinessMirror, Dulay outlined the priority programs of the Bureau of Internal Revenue (BIR) that will focus on improving taxpayer satisfaction and compliance, protecting revenue generation and recapturing the public trust, and attaining collection targets. Reducing the tax paid by individuals and cor-

porations could, in theory, cut the revenue stream by tens, possibly hundreds of billions of pesos each month and severely hamper the delivery of such basic government service as education, security or health costing hundreds of billions to dispense. Such a move could also widen the budgetary shortfall seen averaging 5 percent of local output or the GDP this year alone. A w ider-t han-prog rammed

budget deficit could also force the fiscal sector to borrow more, driving domestic interest rates higher as public-sector borrowers crowd out the private sector. Unless, of course, the decision was to borrow abroad even though this, too, has its share of risks, such as the foreign-currency and foreign interest-rate risks. Dulay aims to reiterate these policy goals at the BIR’s 112th anniversary celebration today, Monday.

“I think if we make the regulations taxpayer-friendly, streamline the processes and make it easier to transact with the BIR, the voluntary compliance will go up,” Dulay said with confidence. According to him, there remains room for expanding the tax base and cited the gaping chasm represented by actively paying members of the Social Security System (SSS) of around 13 million and the number of taxpayers

of only around 2 million.

Large- and medium-scale taxpayers Dulay said the BIR would expand further the jurisdiction of the Large Taxpayers Service (LTS) unit to make up for foregone revenues resulting from the proposed reduction in income tax rates. He said the BIR would continue to review tax regulations hound-

ing business transactions to make it easier for corporations under the LTS jurisdiction to honor their tax obligations without fail. Another prospective source of increased revenues are those taxpayers considered medium scale in terms of income generation and can, therefore, pay more taxes. To ensure the medium-scale industries honor the correct tax obligations, Dulay will create special units in each BIR regional office that will closely monitor their tax compliance. For the small-income earners and those in the so-called underground economy, however, the BIR will be more lenient and would only require them, at most, to register as taxpayers.

Anticorruption efforts Although the bulk of the BIR’s collection comes from voluntary compliance and only some 1.5 percent of it comes from enforcement measures, the BIR will intensify efforts against corruption and the full and earnest prosecution of tax evaders. D u l ay be l ie ves m a ny BIR employees suppor t President Duterte’s campaign against corruption no matter the stereotype BIR employees are all corrupt. “I’m sensing that there are many in the BIR who are upright and who are serious in their support for the President. They’re the ones who voted for him, and they’re ready to support. Like I said, there’s a revolution going on not only here at the BIR, but throughout the country,” he said. A source at the BIR said Dulay is perceived to be “very strict” and intolerant of corruption. Just a month into office, Dulay reiterated the “no-gift” policy at the BIR and has pushed for administrative and criminal charges against revenue employees and officials who have verified complaints against them. “In the past, you can only hear about corruption in the BIR through mere hearsay. But now, the complainants are coming out and are sending written complaints,” Dulay said. “Perhaps, they are emboldened now that they know their complaints will be heard, and I think the message is going through t o t he pu bl ic of f ic i a l s t h at we’re serious against corruption,” he said.

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Monday, August 1, 2016

A3

Senators seek to expedite development works in oil-, gas-rich Reed Bank

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By Butch Fernandez @butchfBM

ENATORS believe the government should lose no time developing the Reed (Recto) Bank, believed to hold vast deposits of oil and gas, and which a United Nations tribunal unequivocally declared as Philippine-owned. In an exchange of text messages with the BusinessMirror over the weekend, the senators agreed the Duterte administration need to move quickly, given the July 12 UN Permanent Court of Arbitration (PCA) ruling and the experts’ estimate that the Malampaya oil field in Palawan, which supplies 40 percent of Luzon’s need, will dry up in 10 years. Initial expert estimates had placed Reed Bank ’s extractable oil and gas resources as being at least 20 percent more than Malampaya’s. Senate Majority Leader Vicente C. Sotto III suggested the government officials concerned should

40% The percentage of power needed by Luzon supplied by the Malampaya oil field in Palawan, according to experts’ estimates

“give it top priority in case the estimates are correct.” “The earlier the better,” Senate Minority Leader Ralph G. Recto said.

S en. R ic h a rd J. G ordon warned that further delays could heighten the risk of losing the oil and gas resources. “If we don’t use it, we lose it,” Gordon told the BusinessMirror. For his part, the Senate Energy Committee Chairman Sen. Win Gatchalian urged the government “to already pursue with utmost caution the development of new energy sources in the Recto Bank.” Gatchalian also voiced concern that “time is running out for Malampaya.” “The Philippines can already undertake preliminary studies of Recto Bank subject to any negotiations with the other claimant countries,” he added. It will be recalled that former Foreign Secretar y A lbert F. del Rosario, when asked last week about post-PCA scenarios, pointed out that the arbitral tribunal had made it clear “that the Reed Bank is exclusively ours, all rights are ours, without equivocation, it’s ours.” Del Rosario was referring to that part of the July 12 ruling of the PCA in The Hague that said Beijing’s “ historic rights” claim to the South China Sea was deemed “extinguished,” being patently incompatible with

House committees to tackle 1,000 bills By Jovee Marie N. dela Cruz @joveemarie

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T least 1,000 bills and 75 resolutions have been referred for committee deliberations at the House of Representatives last week. However, Speaker Pantaleon D. Alvarez said the lower chamber will distribute first the committee chairmanship on Monday before the panels start the deliberation and then approval of these bills. There are at least 41 regular committees and two special committees at the lower chamber, land use and food security. Among the bills that are ready for deliberations include House Bill (HB) 1, or An Act Imposing the Death Penalty; HB 16, or An Act Prohibiting the Imposition of the Death Penalty; HB 2, or An Act Reverting the Minimum Age of Criminal Responsibility; and HB 5, or An Act Providing for Stiffer Penalties for Persons Driving under the Influence of Alcohol and Dangerous Drugs. HB 3, or An Act Granting President Rodrigo Duterte Emergency Power to Address Massive Traffic Congestion in the Country; HB 11, or the proposed Salary Standardization Law; and HB 12, or An Act Establishing the Filipino ID system; are also ready for panel deliberations. Also pending before the lower chamber’s committees are HB 14, or an Act Designating Casino Operators as Covered Persons under AntiMoney Laundering Act of 2001, as amended; HB 15, or An Act Increasing the Authorized Expenses of Candidates and Political Parties during the Campaign Period; HB 17, or An Act Institutionalizing the Conditional-Cash Transfer Program; HB 18, or An Act Mandating the P2,000 Across-the -Board Increase in the Monthly Pension with Corresponding Adjustment of the Minimum Pension of SSS Members; and HB 20, or An Act Restructuring the Income Tax Imposed on Individuals, amending Section 24 of National Internal Revenue Code of 1997. HB 26, or An Act Directing the Reduction of Electricity Rates Through Utilization of Government Share in the Discovery, Exploration, Development and/or Production of Indigenous Sources of Energy for the Purpose of Lowering the Cost of Electricity; HB 32, or the Freedom of Information Bill; HB 35, or An Act Restructuring the Income Taxes Imposed on Individuals and Corporations; and HB 37, or An Act Establishing Free Irrigation. Other bills up for deliberation also include HB 55, or An Act Strengthening the Security of Tenure of Workers; HB 56, or An Act Increasing the Minimum Salary of Public School Teachers; HB 61, or An Act Providing Framework for the Right to Adequate Food and for other purposes; HB 62, or An Act Creating the Coconut Industry Trust Fund, Providing for its Management; HB 81, or An Act Calling for Constitutional Convention; and HB 82, or An Act Establishing An On-Site, in City or Near

City Resettlement Program for Informal Settlers Families. Other bills are HB 99, or An Act Expanding the Grounds for Legal Separation; HB 101, or An Act Decriminalizing Adultery and Concubinage; and HB 116, or An Act Instituting Divorce in the Philippines. HB 117, or An Act Exempting Start-up Enterprises from Taxes Arising from the First Two Years of Operations; HB 123, or An Act Creating the Mindanao Railways Corp.; HB 166, or An Act Prohibiting the Establishment of Political Dynasties; HB 231, or An Act Rationalizing the Grant and Administration of Fiscal Incentives and For Other Purposes; and HB 402, or An Act Requiring All Employers to Pay Their Employees a 14th-Month Salary.

The committees at the Lower Chamber are the following: n Agrarian reform

n Agriculture and food n Appropriations

n Banks and financial intermediaries n Basic education and culture

n Civil service and professional regulation n Dangerous drugs n Ecology

n Economic affairs n Energy

n Government enterprises and privatization n Government reorganization n Health

n Higher and technical education

n Housing and urban development n Human rights

n Information and communication technology n Justice

n Labor and employment n Local government n Muslim affairs

n National security and defense n Natural resources

n Overseas worker affairs n People’s participation

n population and family relations n poverty alleviation n public information

n public order and safety

n public works and highways n revision of laws

n science and technology

n small business and entrepreneurship

development

n social services

n suffrage and electoral reforms n tourism

n trade and industry n transportation

n ways and means

n welfare of children

n women and gender equality

the exclusive economic zones (EEZ) laid down in the 1981 UN Convention on the Law of the Sea (Unclos). Reed Bank is well within the Philippines’s EEZ, the PCA ruled. A lthough Beijing sig ned the Unclos treat y a long w ith Manila, Beijing had, right from the star t, boycotted the proceedings at T he Hag ue. Minutes after the r u ling came out on Ju ly 12, China quick ly declared it il lega l and void, vow ing never to comply w ith it. A Philippine firm, Philex Petroleum, was working in 2012 with UK-based Forum Energy Plc. for an envisioned joint venture with the China National Offshore Oil Co. Philex Petroleum was awarded that year a service contract by the Philippine government to start exploration at Reed Bank. However, drilling and exploration was suspended in early 2015, on advice of the Department of Energy (DOE), in deference to the case filed by Manila before the UN court on the South China Sea. But with the PC A’s ruling, there is an apparent emerging consensus for Manila to assert its right to develop Reed Bank, especially since Malampaya oil and

gas field off Palawan is expected by experts to dry up in a decade. “Malampaya covers 40 percent of Luzon needs, so we have to plan for that,” del Rosario said. “I think Reed Bank is the best option to replace Malampaya.” Recently, Senior Associate Justice Antonio T. Carpio had said a joint venture with China was no longer possible now that the UN ruling had ruled that China violated the Philippines’s right to explore Reed Bank. The Philippine government can grant a service contract to any contractor, even

one that has a foreign partner. It will be recalled that a consortium formed by Shell Philippines Exploration B.V. and Chevron Malampaya Llc. had developed Malampaya. There is concern, however, that if the Philippine government does not move quickly to assert its right to develop Reed Bank, China, with its defiant stand against the UN court, will entrench itself in the area. Also last week, the Palace directed the DOE to provide the Department of Foreign Affairs with updated technical information on Recto Bank.

We urge the government to already pursue with utmost caution the development of new energy sources in the Recto Bank, as time is running out for Malampaya [deep-water gas-to-power project]. The Philippines can already undertake preliminary studies of Recto Bank subject to any negotiations with the other claimant countries.”—Gatchalian

A4 Monday, August 1, 2016

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China’s nuke-power plan sailing into troubled waters

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EIJING—China’s ambitions to become a pioneer in nuclear energy are sailing into troubled waters.

Two state-owned companies plan to develop floating nuclear reactors, a technology engineers have been considering since the 1970s for use by oil rigs or island communities. Beijing is racing Russia, which started developing its own in 2007, to get a unit into commercial operation. In China’s case, the achievement would be tempered by concern its reactors might be sent into harm’s way to support oil exploration in the South China Sea, where Beijing faces conflicting territorial claims by neighbors, including Vietnam and the Philippines. Chinese news reports say plans call for deploying 20 reactors there, though neither developer has mentioned the area. Tensions ratcheted up after a United Nations arbitration panel ruled on July 12 that Beijing’s claim to most of the sea has no legal basis. Beijing rejected the decision in a case brought by the Philippines and announced it would hold war games in the area, where its military has built artificial islands. The floating reactor plans reflect Beijing’s determination to create profitable technologies in fields from energy to mobile phones, and to curb growing reliance on imported oil and gas, which communist leaders see as a security risk.

China is the most active builder of nuclear-power plants, with 32 reactors in operation, 22 under construction and more planned. It relies heavily on the United States, French and Russian technology but is developing its own. The latest initiatives are led by China General Nuclear Power Group (CGN) and China National Nuclear Corp. (CNNC) Both have research or consulting agreements with Westinghouse Electric Co. and France’s EDF and Areva, but say their floating plants will use homegrown technology. “They are keen to develop that because they have a lot of oil drilling everywhere in the South China Sea and overseas, as well,” said Luk Bing-lam, an engineering professor at the City University of Hong Kong who has worked with a CGN subsidiary on unrelated projects. “The Chinese strategy is to ensure the energy supply for the country,” Luk said. “Oil drilling needs energy, and with that supply, they could speed up operations.” Russia’s first floating commercial reactor, the Academician Lomonosov, is due to be delivered in 2018, but the project has suffered repeated delays. The Russians have yet to announce a commercial customer.

22 The number of nuclear reactors being built by China

Russia has been “aiming to launch this idea for over two decades by pitching the reactor as a plug-andplay option for fairly remote communities,” said Mark Hibbs, an expert on nuclear policy for the Carnegie Endowment for International Peace, in an e-mail. Russia’s target market was Indonesia and its far-flung islands, Hibbs said. That prompted concern about control over nuclear materials, leading to a recommendation Russia operate the reactor and take back used fuel. The Chinese nuclear agency signed a deal with Moscow in 2014 to build floating power stations using Russian technology. It is unclear whether that will go ahead given the plans by CGN and CNNC to develop their own vessels. Chinese developers can count on sales to the state-owned oil industry without going abroad. CGN has signed a contract with China National Offshore Oil Corp.

This February 9, 2012, photo shows a Chinese oil rig operated in the East China Sea. Two state-owned companies, China General Nuclear Power Group and China National Nuclear Corp., have announced plans to develop floating nuclear reactors for use by oil rigs or island communities. Kyodo News via AP

to support oil-and-gas exploration at sea. The company says it will launch its first vessel by 2020, with plans for 20 more. It declined an interview request and did not respond to written questions. CNNC plans a demonstration unit by 2019. A floating nuclear plant probably would be too costly just to supply power, but could be useful in oil-andgas exploration by also providing heat and freshwater, Luk said. He said CGN engineers told him their design is meant for islands or other remote sites. Tensions with Vietnam have flared over Chinese oil-and-gas exploration near the Vietnamese coast. In January Vietnam complained a Chinese oil company had towed a drilling rig into disputed waters. In 2014 the same rig was parked off Vietnam’s central coast for two months, leading to violent anti-Chinese demonstrations and confrontations at sea as Chinese vessels rammed Vietnamese boats to prevent them from approaching the rig. Reactors have been used on warships since the 1950s. But those vessels regularly visit port for maintenance and face little security risk because they are heavily armed. “The security concerns are clear:

such reactors would be tempting targets for military or terrorist attacks,” Edwin Lyman, a nuclear specialist for the Union of Concerned Scientists in Washington, said in an e-mail. “Maintaining the full contingent of security officers necessary to effectively deter attack would not be feasible.” Other perils include stormy seas—the South China Sea is buffeted by powerful seasonal typhoons— and the need to exchange radioactive fuel at distant sites. CGN says its seaborne unit will have “passive safety,” or features that function without moving parts or outside power, such as control rods that drop by gravity in an emergency. No commercial reactor operates with such features. “There are questions about how reliable passive safety systems will be in extreme conditions,” Lyman said. CGN wants to simplify operations by requiring refueling only once every three years instead of the industry standard of 18 months, Luk said. That would require more highly enriched fuel, with the amount of the U-235 isotope raised to as much as 10 percent from the typical 4.5 percent. “If it were seized by terrorists or someone else, that would be a big problem,” he said. China’s aggressive

pursuit of nuclear technology has run afoul of US law enforcement. In April a Chinese-born American engineer employed by CGN was charged with recruiting experts in the US to help the company with reactor construction without applying for required government permission. Allen Ho, also known as Szuhsiung Ho, also was charged in federal court in Tennessee with acting illegally as an agent of a foreign government. Under a 2007 agreement, Westinghouse transferred to another government company, the State Nuclear Power Technology Corp., technology for its latest model, the AP1000. It was to become the basis for future Chinese reactors that could be sold abroad, but CGN and CNNC pressed ahead with development of their own models. CGN says its 60-megawatt floating reactor, the ACPR50, is a version of the land-based ACPR100 reactor. CNNC says its seaborne unit will be based on another reactor, the ACP100, but has released no other details. Westinghouse has no role in the ACPR50’s development, according to a company Spokesman Courtney Boone. EDF and Areva did not respond to requests for information about their possible role. AP

More Metro Manila workers hired in 2015–PSA By Cai U. Ordinario @cuo_bm

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ew hires in Metro Manila increased in 2015, but most of these employees were hired to replace workers who were laid off or quit their jobs, according to the Philippine Statistics Authority (PSA). In the latest Labor Turnover Survey results, additional manpower ranged from five to 32 workers per 1,000 employed persons in Metro Manila-based enterprises in 2015. For every 1,000 employed persons, the following numbers of persons were added in the manpower of all industries: five in the first quarter; 11 in the second quarter; 32 in the third quarter; and six in the fourth quarter. “The accession rates consistently exceeded the separation rates in all quarters of the year. This means that recruitment, either for expansion or replacement, was higher than

the number of workers who were laid off or quit their jobs,” the PSA said. Data showed that accession rates recorded for the year ranged from 8.5 in the fourth quarter to 11.07 percent in the third quarter. New hires due to replacement ranged from 4.8 percent in the fourth quarter to 8.2 percent in the second quarter of 2015. Accession due to expansion of business activities recorded lower rate ranging from 2.55 percent to 4.72 percent. These new hires or accession refer to permanent or temporary additions to employment in firms due to expansion of business activities or replacement of workers who were laid off or quit their jobs. “Generally, enterprises hired new workers greatly to replace separated workers during the period,” the PSA said. Data showed that eight out of 18 industry groups recorded higher accession rates due to replacement

than expansion the quarters in 2015. These were manufacturing; electricity, gas, steam and air-conditioning supply; wholesale and retail trade repair of motor vehicles and motorcycles; and accommodation and food service activities. The list includes financial and insurance activities; education; human health and social work activities; and arts, entertainment and recreation. Meanwhile, the PSA said separation of workers was lowest in the third quarter at 7.87 percent and highest during the first quarter of 2015 at 10.17 percent. “Except in the second quarter, employer initiated [laid-offs] employeeinitiated industries,” the PSA said. Data showed that four industry groups significant number of laid workers. These were mining and quarrying from 3.64 percent to 16.51 percent; and construction, 12.3 percent to 22.81 percent.

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Editor: Max V. de Leon • Monday, August 1, 2016 A5

Singapore Air warns of tougher days after 181% profit jump

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sia’s marquee airlines are warning tougher competition is squeezing them.

Singapore Airlines Ltd. said on Thursday passenger yields—a key measure of profitability in the industry—remain under pressure amid “aggressive capacity injection.” Yields declined to their lowest in more than six years in the first quarter. The stock fell 2 percent in Singapore on Friday, the most in more than two months. Earlier this month, Ivan Chu, CEO of Cathay Pacific Airways Ltd., which dominates the Hong Kong financial hub, said there is “intense pressure” on the metric. The expansion of the Middle East’s “Big Three”—Emirates, Etihad Airways and Qatar Airways—and an unprecedented surge by budget airlines in the region is hurting the pricing power of Asian carriers. Singapore Air CEO Goh Choon Phong and his Cathay counterpart Chu have ordered some $20 billion in new aircraft to modernize their fleet and take on their competitors who are offering luxuries, like onboard shower and butlers. “Yields will continue to erode for many quarters to come,” said Shukor Yusof, founder of aviation consulting firm Endau Analytics in Malaysia. “We are still in the downside of the cycle, especially for the premium sector. There is still some overcapacity in the market.” Shares of Singapore Air dropped to S$10.98, while the city’s Straits Times Index fell 1.7 percent. Singapore Air—the only Asian airline to have flown the Concorde and first in the world to fly the A380 superjumbo—on Thursday reported first-quarter profit almost tripled as lower oil prices reduced costs and the company benefited from the sale of a stake by its subsidiary. Net income jumped to S$256.6 million ($190 million) in the three months ended in June, even as sales declined 2.1 percent to S$3.6 billion. Yields, or the revenue earned from a passenger for flying a kilometer, was 10.3 Singapore cents in the quarter ended in June, compared with 10.7 Singapore cents in the same quarter a year earlier. “The business outlook for the parent airline company remains challenging amid economic weakness and geopolitical concerns in some markets,” Singapore Air said in the statement.

Commuters walk past a portrait of Thailand’s Queen Sirikit, consort of King Bhumibol Adulyajej, at a BTS station in central Bangkok on Sunday. AP/Grant Peck

Thai queen improves after lung-infection treatment

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Singapore Airlines aircraft

Bloomberg news

“Competition remains intense with aggressive capacity injection, and yields will continue to remain under pressure. Yields will be further diluted if key revenue-generating currencies depreciate against the Singapore dollar.” Cathay Pacific, which is due to detail first-half earnings next month, is projected to report a net income of HK$5.13 billion ($661 million) for the year, according to the average estimate of 17 analysts compiled by Bloomberg. Last year the carrier had a net profit of HK$6 billion. Singapore Air’s first-quarter numbers benefited from an increase in passenger numbers, ,as economic growth from China to Southeast Asia to India allowed more people to travel for work and leisure. Goh took over low-fare subsidiary Tiger Airways to integrate with longhaul budget airline Scoot. Singapore Air carried 4.63 million passengers at its main airline in the fiscal first quarter, 1.3 percent more than the 4.57 million a year earlier. It filled 75.8 percent of seats, compared with 76.3 percent a year earlier. A more than 50-percent decline in oil prices in the past two years has helped reduce costs for most airlines, whose single biggest expense is fuel.

White House Singapore state dinner: Beef, yellow flowers

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ASHINGTON—High-end American beef and yellow blossoms will feature prominently at the first White House state dinner for Singapore in more than three decades. Floral arrangements for Tuesday’s black-tie soiree honoring Prime Minister Lee Hsien Loong and his wife Ho Ching will consist of yellow orchids, yellow roses and other yellow flowers. American Wagyu beef dressed with roasted yams, wilted kale and heirloom carrots will anchor the main course for some 200 guests seated on black chairs at round tables in the East Room. White House officials previewed President Barack Obama’s third state dinner of the year, and 12th overall, on Friday. Yellow symbolizes the friendship between the US and Singapore, said chief florist Hedieh Ghaffarian. Lee’s official visit will mark 50 years of diplomatic relations between the US and Singapore. Daniel Krittenbrink, a White House adviser on policy toward Asia, described the southeast Asian country as “one of our strongest, closest and most reliable partners.” The US and Singapore are partners in the Trans-Pacific Partnership free-trade agreement, which includes 10 other countries, but is stalled in Congress and opposed by Hillary Clinton and Donald Trump, the respective Democratic and Republican presidential nominees. Singapore is also a member of the USled coalition trying to eradicate the Islamic State group, and both signed onto last year’s Paris climate agreement. More than 3,500 US companies have a presence in Singapore, Krittenbrink said. Dinner will open with Maryland blue crab salad tossed in an Asian citrus curd

White House Executive Chef Cristeta Pasia Comerford holds up an example of the first course during a press preview in the State Dinning Room of the White House in Washington on Friday ahead of next Tuesday’s State Dinner for Singapore’s Prime Minister Lee Hsien Loong. Pasia holding a plate of Maryland Blue Crabs, Calamansi Curd, Crisped Root Vegetables and Spiced Crab Tuile. AP/Pablo Martinez Monsivais

and rimmed with slivered baby cucumbers. The salad course will showcase heirloom tomatoes from Ohio paired with lime basil from Michelle Obama’s garden, as well as mangoes, cucumbers, green papayas and soursop sorbet. Dessert is peach sangria cake accented with coconut milk and kaffir lime leaves, a citrus fruit native to Asia, and dressed with White House honey. Pastry Chef Susie Morrison also showed off the handmade, spun-sugar orchids and roses she prepared for sharing at each table. California and New York red, white and sparkling wines will be served. After dinner, R&B and soul singersongwriter Chrisette Michele is scheduled to entertain guests. The White House last held a state dinner for Singapore in October 1985, during Ronald Reagan’s presidency, for Lee’s late father, Prime Minister Lee Kuan Yew, according to the White House Historical Association. AP

Singapore Air needs new passengers to stem a slide in earnings. The carrier is counting on cabin comforts to lure higher-end passengers used to its fully flat beds, as well as more priceconscious customers. The carrier has been looking to build alliances abroad as part of a multihub strategy. It partnered with India’s Tata Group to start Vistara in January 2015 and owns about 23 percent of Virgin Australia Holdings Ltd. The company’s Scoot unit also teamed up with Nok Airlines Pcl. of Thailand to set up NokScoot. Singapore Air started flying its Airbus Group SE 253-seat A350 aircraft to Amsterdam from May 9. The carrier will receive the ultralong-range version of the plane in 2018 for services to New York, which will become the world’s longest nonstop flight. Bloomberg News

ANGKOK—Thailand’s royal palace says that 83-yearold Queen Sirikit suffered a lung infection but her condition has improved. An announcement issued on Saturday night says Sirikit was moved on July 24 from Bangkok’s Siriraj Hospital, where King Bhumibol Adulyajej has been living for most of the past few years, to Chulalongkorn Hospital for treatment of minor lung

inflammation and blood infection. It said that, after treatment, symptoms of fever and cough had subsided. Both the queen and the 88-yearold king have been in ill health in recent years, with Siriraj Hospital serving as the de facto royal residence. Bhumibol and Sirikit have also suffered strokes, with the queen’s apparently being the more severe case. Bhumibol is the world’s longest serving monarch, since 1946. AP

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The World BusinessMirror

Monday, August 1, 2016 • Editor: Lyn Resurreccion

briefs

Bipartisan backlash for Trump, after questioning Khan family YOUNGSTOWN, Ohio—Donald Trump sparked bipartisan backlash, after the Republican attacked the bereaved parents of a Muslim US Army captain who spoke at the Democratic convention last week. Critics from both parties on Saturday questioned whether Trump had the empathy and understanding to be president, particularly after he questioned why mourning mother Ghazala Khan stayed silent during her husband’s Thursday night address. “He was kind of trying to turn that into some kind of ridicule,” Democratic vicepresidential nominee Tim Kaine said after a campaign event in Pittsburgh. “It just demonstrates again kind of a temperamental unfitness. If you don’t have any more sense of empathy than that, then I’m not sure you can learn it.” Former President Bill Clinton, who joined his wife and Kaine at the event, agreed: “I cannot conceive how you can say that about a Gold Star mother.” AP

Pope to youth: Try politics, activism; don’t be couch potato T

Japanese detained for ‘endangering state security,’ china says BEIJING—The Chinese Foreign Ministry has confirmed media reports that authorities have detained a Japanese citizen on suspicion of endangering China’s state security. The ministry said in a statement faxed to The Associated Press on Sunday the Japanese Embassy in China has been notified about the investigation into the Japanese national. The statement did not provide any other details. Japan’s Kyodo News Agency reported, cited a diplomatic source, that a Japanese man who had been visiting Beijing in July might have been detained on possible allegations of spying. Kyodo says the man worked for a group that set up exchanges between the two countries and that he had planned to stay in Beijing between July 11 and 15, but failed to return to Japan. AP

Man in Belgium charged with ‘terrorist murders’ attempt BRUSSELS—A man in Belgium has been charged with attempting to commit “terrorist murders” and participating in a terror group, and his brother has been released without charge, the Federal Prosecutor’s Office announced on Saturday. The prosecutor’s office said a 33-yearold man identified only as Nourredine H. and his brother Hamza H. were taken in for questioning on suspicion of plotting a terror attack following police searches on Friday evening of seven houses in the city of Liege and the Mons region. Belgian prosecutors said late on Saturday Nourredine H. was charged and his brother was freed. Officials said no further information would be released. The police searches were carried out at the request of a magistrate specializing in terrorism investigations. Brussels was hit on March 22 by suicide bombings that killed 32 people at Brussels Airport and in the Brussels subway. That attack was claimed by the Islamic State extremist group and carried out by the same cell that killed 130 people on November 13 in Paris. AP

Attack at Yemen border kills 7 Saudi border guards

RIYADH, Saudi Arabia—The Saudi-led military coalition says seven Saudi border guards, including an officer, have been killed in a cross-border clash with militants from Yemen. In a statement early on Sunday, the coalition fighting Yemen’s rebels said Saudi border guards on Saturday repelled a rebel attempt to cross the kingdom’s southern borders in the Najran area. It said Saudi air force jets and helicopter gunships killed dozens of the attackers and destroyed their vehicles. The coalition backs Yemen’s internationally recognized government against the Shiite rebels, known as Houthis, and their allies who control territory inside Yemen. The statement said the attacks were in violation of a cease-fire, which was declared by the United Nations on April 10. The cease-fire remains shaky, with both sides reporting numerous breaches. AP

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Pope Francis poses for a selfie with youths after he had lunch with them at the Bishop’s residence in Krakow, Poland, on Saturday. The religious celebrations on Saturday came on the fourth day of the pope’s five-day visit to Poland, his first-ever visit to Eastern Europe, where he has been gathering with young Catholics attending World Youth Day, a global event. L’Osservatore Romano/Pool Photo via AP

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RZEGI, Poland—Pope Francis challenged hundreds of thousands of young people who gathered in a sprawling Polish meadow to reject being a “couch potato” who retreats into video games and computer screens, and instead engage in social activism and politics to create a more just world. Peppering his speech with contemporary lingo, the 79-year-old pope, despite a long day of public appearances, addressed his eager audience with enthusiasm on Saturday on a warm summer night. Francis spoke of a paralysis that comes from merely seeking convenience, from confusing happiness with a complacent way of life that could end up depriving people of the ability to determine their own fates. “Dear young people, we didn’t come into this world to ‘vegetate,’ to take it easy, to make our lives a comfortable sofa to fall asleep on. No, we came for another reason: To leave a mark,” Francis told a crowd that

Polish media estimated at over 1 million in a huge field in Brzegi, a village outside the southern city of Krakow. Organizers said 1.6 million people came to hear the pope on Saturday night, but the police did not give a crowd estimate. Francis decried a modern escapism into consumerism and computers that isolates people. The same message ran through a ballet performance at the site before his speech: a lonely woman seeks human connections but is rebuffed by people on computer tablets and cell phones until one man emerges from behind a see-through barrier to connect.

For Francis, Jesus is the “Lord of risk...not the Lord of comfort, security and ease.” “Following Jesus demands a good dose of courage, a readiness to trade in the sofa for a pair of walking shoes and to set out on new and uncharted paths,” Francis said. He challenged his sea of listeners, spread out on blankets, to make their mark on the world by becoming engaged as “politicians, thinkers, social activists” and to help build a world economy that is “inspired by solidarity.” “The times we live in do not call for young couch potatoes,” he said to applause, “but for young people with shoes, or better, boots laced.” Like a politician working a crowd, Francis yelled out to his audience: “You want others to decide your future?” When he didn’t get the rousing “No!” he was going for, he tried for a “Yes.” “You want to fight for your future?” he asked. “Yes!” they roared. “The pope does not order us to do things, he encourages us,” Szymon Werner, a 32-year-old from Krakow who was at the meadow, told The Associated Press. “It’s true, there are many temptations, weaknesses in life and we should try to do something about them.” “I will give more attention to my family,” he vowed. “Last night, I gave a lift to some foreign pilgrims who missed their bus—so I think the pope’s presence is working!” Francis’s evening appeal came

hours after he celebrated a Mass with priests, nuns and young seminarians whom he also urged to leave their comfort zones and tend to the needy in the world. He said Jesus wants the church “to be a church on the move, a church that goes out into the world.” That homily came at a shrine dedicated to Saint John Paul II, the Polish pontiff whose staunch defense of workers’ rights in the 1970s and 1980s challenged his nation’s then-Communist rulers. A year after John Paul II was elected pope in 1978, he returned to his homeland, urging millions of his beleaguered compatriots behind the Iron Curtain—in nuanced and coded words—to oppose communism and defend individual freedoms. That visit inspired the birth of Solidarity, a labor movement that eventually became a key factor in the collapse of communism in 1989 in Poland and throughout Eastern Europe. Francis has carried a grueling schedule since arriving in Poland on Wednesday, making his first-ever visit to Eastern Europe. On Friday he visited the Nazi German death camp of Auschwitz-Birkenau, where he met with concentration camp survivors, as well as aging saviors who helped Jews escape certain doom. The pope ends his visit to Poland on Sunday after a Mass in the same meadow in Brzegi, the crowning event of this year’s world jamboree for young Catholics. AP

3rd Chicago cop relieved of powers over man shot in back

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HICAGO—Chicago Police Supt. Eddie Johnson on Saturday relieved a third officer of his police powers in the death of a suspect after autopsy results showed the 18-year-old died of a gunshot wound to the back. Johnson’s move came hours after the Cook County Medical Examiner’s Office ruled Paul O’Neal’s death a homicide. In a statement, police spokesman Anthony Guglielmi said Johnson spent hours reviewing video evidence with other officials following the release of the autopsy report.

Although a formal investigation is still ongoing, “Johnson has pledged that Chicago Police Department will conduct a thorough and fact-based administrative review,” Guglielmi said. Two other officers were relieved of their powers on Friday. O’Neal, from Chicago, was shot on Thursday night during a stolen vehicle investigation in the city’s South Shore neighborhood. Authorities have said officers stopped a Jaguar convertible that had been reported stolen. The police said officers opened fire after the driver, identified as O’Neal, put the

car in drive and sideswiped a squad car and a parked vehicle. He was later pronounced dead at a hospital. O’Neal was black; the police have not provided any identifying information about the officers who were involved. The handling of officer-involved shootings in Chicago has come under intense scrutiny since the release last November of a video that shows a white officer fatally shooting black teenager Laquan McDonald 16 times. That shooting, and the initial statements by a union spokesman about McDonald lunging at the police that

turned out to contradict what was on the video, raised serious questions about what the public was being told about police shootings. Investigators from Chicago’s Independent Police Review Authority (Ipra), which investigates police misconduct cases and officer-involved shootings, arrived at the scene on Thursday and obtained footage from cameras that the officers were wearing or were mounted on their squad cars. Ipra Spokesman Mia Sissac said the footage would be posted online within 60 days, per city policy. AP

Tunisian lawmakers pass no confidence vote, firing PM UNIS, Tunisia—Tunisia’s parliament passed a vote of no confidence in Prime Minister Habib Essid on Saturday, effectively disbanding the government of the US-trained agricultural economist. The no-confidence motion was passed by 118 votes, easily crossing the country’s 109-vote threshold after a debate that stretched late into the night. Although the result was expected—Essid had faced criticism from across Tunisia’s political spectrum—the vote was a mark of the instability, which has bedeviled the North African country since it kicked off a wave of prodemocracy rebellions across the Arab world in 2011. Parliament President Mohamed Ennaceur told lawmakers that Tunisia was “living through a difficult situation that demands sacrifices from all” and added that “we must now look to the future to return hope to all Tunisians.” Unlike fellow Arab countries, such as Egypt, Yemen, Syria and Libya—whose revolts have degenerated into coups or anarchic civil conflicts—Tunisia has maintained its parliamentary democracy in the face of jihadi attacks, inflation and stubbornly high unemployment rates. But the difficulties have steadily sapped the authority of Essid, whose position has also been undermined by political maneuvering within Tunisia’s secular Nida Tounis party and pressure from the country’s President Beji Caid Essebsi who called for a new national unity government last month. Essid said he would do his best to make sure the transition to the new government was a tranquil one. Despite fierce criticism of his government during an extraordinary parliamentary session, he said that the debate “consecrated Tunisia’s nascent democracy.” “Despite the serious problems our country faces, we have no fear for Tunisia, which has the resources to face up to the challenges,” he said, before being given a standing ovation by the lawmakers who’d ousted him. Constitutional law expert Nawfel Saied said the no confidence vote, although unprecedented in the country’s short history with democracy, was actually a positive point. Similar mechanisms exist in other parliamentary democracies, he said. He suggested the move could result in a more prominent role for the more religiously oriented Ennahda party, which currently has the largest number of seats in parliament following defections and splits within Nida Tounis. That’s because Essebsi now has a month to pick a new prime minister, who, in turn, has a month to appoint a cabinet, which has to be presented to parliament. The president “will have a central role to play in this delicate political operation, which needs the support of various political parties, especially the Islamist Ennahda party,” he said. AP

Tokyo votes for governor

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OKYO—Japan’s capital is voting on Sunday for its leader, after two predecessors resigned over money scandals as Tokyo prepares to host the 2020 Olympics, and hopes to lead the nation in an economic turnaround. Among the top candidates for the governor of Tokyo, with a population of more than 13 million people and an annual budget bigger than Sweden’s, are former Defense Minister Yuriko Koike, journalist Shuntaro Torigoe and former rural governor Hiroya Masuda. If Koike wins, she would become Tokyo’s first female governor. All the candidates are promising cleaner politics and efforts to respond to everyday issues such as the need for more child care centers so more women can work. One of the first jobs for the winning candidate will be going to the Rio de Janeiro Olympics as the representative of the city that’s hosting the next games. Yoichi Masuzoe, the former governor, resigned in June after acknowledging exorbitant, though not illegal, spending of taxpayers’ money, including for suite hotel rooms and expensive artwork purchases. The governor before him had also resigned in disgrace. AP

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Texas hot-air balloon catches fire, crashes; no apparent survivors

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By Jim Vertuno | The Associated Press

OCKHART, Texas—A hotair balloon carrying 16 people caught on fire and crashed in Central Texas, and it appeared no one survived, authorities said. Authorities would not confirm the exact number of deaths in Saturday’s crash, but Lynn Lunsford, with the Federal Aviation Administration (FAA), said the balloon was carrying at least 16 people. Caldwell County Sheriff’s Office said in a statement it didn’t look like anyone survived. If 16 people were killed, it would be the one of the worst such disasters, possibly the worst in US history. The deadliest such disaster happened in February 2013, when a balloon flying over Luxor, Egypt, caught fire and plunged 1,000 feet to the ground, crashing into a sugar-cane field and killing at least 19 foreign tourists. Erik Grosof, with the National Transportation Safety Board (NTSB), said a full-bore investigation would begin on Sunday when more federal officials arrive. “This will be a difficult site for us to work through,” Grosof said. Saturday’s crash happened at about 7:40 a.m. in a pasture near Lockhart, which is about 30 miles south of Austin. The land near the crash site is mostly farmland, with corn crops and grazing cattle. Cutting through that farmland is a row of massive high-capacity electrical transmission lines about four to five stories tall. The site of the crash appears to be right below the overhead lines, though authorities haven’t provided further details about what

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The number of passengers of the hot-air balloon that crashed

happened. Aerial photos showed an area of charred pasture underneath power lines. Margaret Wylie lives about a quarter-mile from the crash site and told The Associated Press (AP) that she was letting her dog out on Saturday morning when she heard a “pop, pop, pop.” “I looked around and it was like a fireball going up,” she said, noting that the fireball was under large power lines and almost high enough to reach the bottom of them. Wylie, who called 911, said the weather seemed clear and that she frequently sees hot-air balloons in the area. The balloon was operated by Heart of Texas Hot Air Balloon Rides, according to two officials familiar with the investigation. The officials spoke on condition that they not be named because they weren’t authorized to speak publicly. Heart of Texas’s web site said it offers rides in the San Antonio, Houston and Austin areas. The company’s Facebook page features

photos of a hot-air balloon with a smiley face with sunglasses on it up in the air, people waving from a large basket on the ground and group selfies taken while up in the air. The operation does not appear to be registered with the state of Texas. Authorities have not released the names of those who were on board and have not said who was flying the balloon. Skip Nichols identifies himself on his Facebook page as the chief pilot of Heart of Texas and pictures posted by him are on the business’s Facebook page. Nichols, 49, is also the registered owner of Missouribased Air Balloon Sports Llc. No one answered the door at a home in Kyle, Texas, believed to be his. Calls to Heart of Texas Operations Manager Sarah Nichols, 72, rang unanswered, and a woman in Missouri believed to be his sister did not return calls seeking comment. Warning about potential highfatality accidents, safety investigators recommended two years ago that the Federal Aviation Administration impose greater oversight on commercial hot-air balloon operators, government documents show. The FAA rejected those recommendations. In a letter to FAA Administrator Michael Huerta in April 2014, the National Transportation Safety Board urged the FAA to require tour companies to get agency permission to operate, and to make balloon operators subject to FAA safety inspections. The FAA’s Huerta responded that regulations were unnecessary, because the risks were too low. After Huerta’s reply, the NTSB classified the FAA’s response to the two balloon safety recommendations as “open-unacceptable,” which means the safety board was not satisfied with the FAA’s response. Speaking to the AP just before

In this aerial photo authorities investigate after a hotair balloon caught on fire and crashed (lower center) in Central Texas near Lockhart, Texas, on Saturday, causing what authorities described as a “significant loss of life.” Rodolfo Gonzalez/Austin American-Statesman via AP

leaving for Texas to lead the crash investigation, NTSB board member Robert Sumwalt said he was studying the board’s recommendations from previous hot-air balloon accidents. “I think the fact that it is

open-unacceptable pretty much speaks for itself,” he said. He also noted that the team was still trying to gather basic information about the accident. FAA Spokesman Lynn Lunsford

said it’s difficult to say whether the Texas crash will cause the agency to reconsider NTSB’s recommendations “until we’ve had a chance to gather and examine the evidence in this particular case.” AP

France left reeling as PM May mulls over nuke-power plant Putin tests West’s crippling

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ranÇois Hollande has had concerns for at least a week about whether Theresa May’s government was committed to the Hinkley Point nuclear plant. The cool public response the United Kingdom (UK) gave the deal matched the new prime minister’s private comments when the French president asked her about it in their first meeting. Even so, the French were stunned on Thursday evening when Britain said it needed more time to think about the plan. A planned signing was canceled. Hollande, with an election coming next year, has been attacked by labor unions who say the €18-billion ($24-billion) project could bankrupt stateowned Electricite de France (EDF) SA. “The UK needs a reliable and secure energy supply and the government believes that nuclear energy is an important part of the mix,” Business and Energy Secretary Greg Clark said in a statement. “The government will now consider carefully all the component parts of this project and make its decision in the early autumn.” May has been prime minister less than three weeks, following an unexpectedly short campaign to succeed David Cameron in the wake of Britain’s vote to leave the European Union, and Hinkley Point is just one among many problems the new leader didn’t expect to find in her lap. Now that it’s there, she has a small window in which she can reject it and blame her predecessor for the mess.

First meeting

It’s still not clear whether she will. May and Hollande had their first discussion about the subject during a meeting in Paris on July 21. This was the first time

the two leaders had had any substantial conversation about anything, and the main focus of the talks was Brexit. But as they went over other issues, Hollande brought up Hinkley Point. According to people who were present, May responded that it was a matter for EDF, and that it was very early days for her government. The French, used to Cameron’s enthusiasm for the deal, were troubled. Did this signal a change of policy, or simply a change of style from a woman with a less exuberant temperament than her predecessor? Clark had a meeting on Friday morning in London with the CEOs of EDF and China General Nuclear Power Corp., which is funding a third of the project, in an effort to reassure them. He told them May wanted time to understand the details of the deal, according to two people familiar with the discussions, and that this didn’t mean UK policy had changed. He suggested an answer would come in September.

Home secretary

Much is unknown about the views of Britain’s new prime minister on a range of issues. Even though she’s been at the forefront of British politics for well over a decade, her style has been to hold her cards close to her chest. Only rarely has she strayed from the brief she’s held for the last six years as home secretary, overseeing the police and the security service MI5. If she has given much thought to nuclear power in that time, it will have been from a security perspective, and this may be significant, given the Chinese involvement. “There are probably three things going on,” said Joel Kenrick, a political adviser to Energy Secretary Chris Huhne

from 2010 to 2012. “One is skepticism about the Chinese involvement in the project, I’d be surprised if the Home Office and its related organizations didn’t have concerns about that. Then there’s that so much has changed about energy in the last few years. And the third element might be her wanting to say ‘I’m in charge, don’t think things are going to be the same.”’

Energy calculus

A study by Britain’s National Audit Office published on July 13 set out the way the energy calculus has shifted in recent years. The government’s projections of the cost of wholesale energy in 2030 fell 22 percent between 2012 and 2015, the result of declining prices for fossil fuels, as well as the increase in renewable sources. The UK agreed the price that would be paid for energy from Hinkley Point in October 2013 and in the past year, the expected subsidy has more than doubled to €37 billion. There is also the question of how secure it would be. Whereas Cameron and former Chancellor of the Exchequer George Osborne saw China as a potential investor to be wooed, May has spent her time in government dealing with people who view the country much more as a threat. May’s joint chief of staff, Nick Timothy, last year described the decision to allow Chinese involvement in the project as “baffling.” He raised the prospect of China being able to shut down British energy production “at will” in an article for the Conservative Home web site.

Brexit talks

But there are risks to blocking the deal. It would infuriate the French, a needed

ally in the Brexit talks. It would also lead to a dispute over where the costs of unwinding the project should fall. And there would be a hole in Britain’s future energy supply—Hinkley Point was supposed to deliver about 7 percent of the country’s electricity needs. It could also make it more difficult to agree deals on the five other nuclear projects that are due to follow this one. Besides Clark, the only member of the new government to comment on Hinkley Point has been Chancellor of the Exchequer Philip Hammond, who said on July 14 that he was “confident” it would go ahead. The Confederation of British Industry, (CBI), which represents 190,000 businesses, urged the premier to fully commit to the project.

‘Timely decisions’

“While it is understandable the government wants to get to grips with the details of the Hinkley contract, it must press ahead to finalize the deal as soon as possible,” CBI Deputy Director General Josh Hardie said in a statement. “The UK is facing a major investment challenge to ensure a secure, low-carbon and affordable energy supply. It’s crucial that we see clear and timely decisions, and send a definite message that the UK is well and truly open for business.” May is likely to take more notice of the CBI than the opposition Labour Party, which urged her to carry out a full review of the deal before renegotiating it. “My assumption is still that the UK will probably sign off on it,” Kenrick said. “But then, I can’t actually see it being built. EDF have just got such a poor track record.” Bloomberg News

sanctions on visit to Slovenia

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RSIC, Slovenia—Russian President Vladimir Putin struck a conciliatory tone on Saturday on a visit to Slovenia, shaking hands and honoring dead soldiers as he tested Western resolve in maintaining crippling sanctions against the Kremlin for its role in Ukraine. Slovenia, a small Alpine nation where US Republican presidential nominee Donald Trump’s wife Melania was born and grew up, is a member of both the 28-nation European Union (EU) and North Atlantic Treaty Organization (Nato). It has kept friendly relations with Russia even as it joined EU sanctions against Moscow for its 2014 annexation of Ukraine’s Crimean Peninsula and its support for insurgents in eastern Ukraine. On only his third visit to an EU nation this year, Putin attended the centenary commemoration of a chapel in the Julian Alps that was erected in honor of over 100 Russian and other World War I prisoners of war who died in an avalanche while building a winding mountain road for their Austrian army captors in 1915. At the small, Orthodox-style wooden church named Saint Vladimir chapel, Putin was met by Slovenian President Borut Pahor. Thousands of people packed in front of the chapel in the blazing heat as a chorus sang old Russian church songs. They greeted Putin with a long applause and loud cheers. He waved back and shook their hands. “This chapel has become a symbol of the friendship of the Russian and Slovenian peoples, a symbol of our mutual striving for peace, cooperation and prosperity,” Putin said. He also said Russia was ready to help strengthen security in the world. “So that we not only remember the

horrors of war, but together work on strengthening mutual understanding, trust and security in Europe and the world,” he said. He thanked Slovenians for “caring about our common history, for remembering the Russian citizens whose fate was connected with these tragic events on Slovenian soil.” Security was tight for the visit and included closing the country’s main highway to Austria, which caused huge traffic backups. Slovenian officials portrayed Putin’s visit as strictly informal and ceremonial, but said he would talk with officials on economic and bilateral issues. Putin said the talks focused on “mutual economic projects important for both countries.” He said Russian trade with the EU has dropped almost in half because of sanctions “and not that much” with the United States. “Both things are not good,” he told the Slovenian leader. Russia is Slovenia’s top non-EU trading partner, but trade between the two has dropped nearly 30 percent since the Western sanctions and Russian counter-sanctions. Some Slovenian opposition parties believe that Putin’s visit was an attempt to break Western unity over maintaining the sanctions against Moscow. “We knew from the start that the controversial guest would use the visit primarily to demonstrate his influence in an EU and Nato member-state,” said Jozef Horvat, deputy president of the New Slovenia party. Slovenia, a country of 2 million people, split from the former Yugoslavia in 1991. It joined Nato and the EU in 2004. AP

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Gaza’s Hamas hands out land hoping to avoid financial crisis

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French soldiers patrol near the Biarritz’s beach, southwestern France, on Saturday. The challenge of protecting churches, synagogues, tourist haunts, beaches, summer festival sites, airports and train stations is among the most daunting tasks security forces have faced in recent times in France and Europe. AP/ Bob Edme

What’s safe? Europe grapples with security after attacks

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ARIS—You can’t put a guard in every church and patrol every beach. But after a wave of attacks in Western Europe, authorities are struggling to protect their people as best they can. The French Riviera city of Cannes has banned large backpacks on beaches lest they hide explosives, and Britain is providing extra funding for security at tens of thousands of places of worship. The grisly slaying this week of an elderly priest celebrating Mass in a Normandy church, less than two weeks after 84 revelers were mowed down by a truck on a beachfront promenade in Nice, sounded the alarm that nothing is sacred and no place is safe. Four attacks in a week in Germany sealed that conviction. “Churches take great pride in being open. But there comes a time when the reality of crime and the reality of terrorism may mean that some of that balance needs to be readjusted,” said Mark Gardner, spokesman for Community Security Trust, which provides extensive protection to Jewish synagogues and schools throughout Britain. The Trust started operating in 1994 after a car bomb attack on the Israeli Embassy in London injured roughly 20 people and a devastating attack on a Jewish cultural center in Buenos Aires, Argentina, killed 85 people. T he attacks in France and two of the four in Germany were claimed by the Islamic State (IS) group, thousands of miles away in strongholds in Syria and Iraq. Their preferred targets are symbols of what they label the “crusader” West in Europe, but with so many to choose from, no one can predict where terror might strike anew. A police couple was killed in June in their home west of Paris, in an attack also claimed by the IS. France has been muscling up its security forces since two waves of IS-claimed attacks in 2015 that left 147 dead—and after two March attacks in Belgium that killed 32.

10,000 The number of soldiers who President François Hollande has ordered to stay in the streets

President François Hollande has ordered 10,000 soldiers who have been patrolling since last year to stay in the streets, has called up reserves to bolster police and borders, and plans to use some to create a National Guard. But the challenge of protecting churches, synagogues, tourist haunts, beaches, summer festival sites, airports and train stations is among the most daunting tasks security forces have faced in recent times in France and Europe. The city of Nice, citing the terror threat, canceled a memorial march set for Sunday to honor victims of the attack on the famed Promenade des Anglais. French Interior Minister Bernard Cazeneuve visited security forces sent on Friday at the start of a famed two-week jazz festival in the village of Marciac in the Gers, an annual treat for hundreds of thousands of jazz lovers—but a high-risk event for police. Cazeneuve reiterated what the French hear daily—”There are no miracle solutions”—but insisted on the need for the “physical presence” of police at summer festivals around France.

Some towns are pitching in as they can, or inventing new rules to ward off threats. The Riviera city of Cannes, 33 kilometers from Nice, has banned big bags on beaches until at least the end of October, bags that Mayor David Lisnard says “could contain explosives or weapons.” More controversially, the mayor of Rive-de-Gier, a small town near Lyon, decided this week to “systematically refuse” new applications by residents to bring their families to live with them, a process most often used by immigrants with loved ones in another country. Whether the mayor can actually change national policy allowing families to live together remains to be seen, but the initiative reflects a rising level of fear—often directed at immigrants even though many assailants have been European-born. “Today, no commune in France is safe,” Mayor Jean-Claude Charvin said in a statement on the town’s web site. “Each day, the government says ‘We’re at war’... [it] must give small towns the means to protect their citizens.” Trying to prevent attacks using intelligence is just as daunting. French security services twice missed catching the two 19-yearold Frenchmen who slit the throat of Rev. Jacques Hamel before they acted. In a glaring example of the challenge, four days before the attack the main counterterrorism agency issued an all-points alert to police with a photo of one of the attackers warning the man pictured may be preparing an attack—but no one knew his name. Now, a lot of attention is focused on securing places of worship, particularly small vulnerable churches like the one in Saint-Etienne-duRouvray that came under attack on Tuesday. Shockwaves crossed religions and borders. Some of Rome’s more famous churches and basilicas already figure among the more than 4,000 places in Italy deemed at particular risk for extremist operations, but the French attack has also brought attention to the vulnerability of little-known churches in outlying neighborhoods. Officials have also requested additional police security at Milan’s Duomo cathedral after the attack and in light of a security breach that saw an American tourist spend the

night on the spired rooftop after being overlooked by security. “I don’t see a reason to militarize churches,” Cardinal Angelo Bagnasco, the head of Italian Bishops Conference told Sky TG24. “Of course you can’t let down your guard, it is always necessary to be alert and to collaborate with Europe. But there is no need to be afraid, because otherwise you play the game of these homicidal fanatics.” In Britain, where the overall threat level is judged “severe,” police have warned Christian religious institutions throughout the country to be extra vigilant, and even small rural parishes are expected to take note and review procedures and defenses. The British government announced the details of a plan to provide extra security funding to places of worship on the day of the attack on the French church. France has more than 50,000 Catholic churches, Britain has roughly 47,000 chapels and meeting houses of various Christian denominat ions, a nd steeples dot the landscape of most other European countries. In France most synagogues, mosques and major Christian churches have been protected by police or soldiers since the deadly attack at the Charlie Hebdo satirical newspaper and a kosher supermarket in Paris in January 2015. After the French president met with religious leaders this week, the president of the Protestant Federation of France, François Clavairoly, stressed that much has already been done to protect places of worship of all faiths. “Obviously, more security measures for every place of worship in the country are absolutely inconceivable and unfeasible,” he said. Since the priest was killed, Muslims in France and elsewhere in Europe have stepped forward to embrace the nation’s Catholics in a way rarely seen, an act of bravery because the IS group views Western Muslims as the enemy, too. The head of the Finsbury Park Mosque in London, which has distanced itself from extremism since being associated with it in the 1990s, says “extra measures to be careful” are being added to its closed circuit TV cameras and security guards. AP

HAN YOUNIS, Gaza Strip— Earth movers dig into sand dunes on land where once Jewish settlements stood—prime real estate that the Gaza Strip’s ruling Hamas group hopes will ease its worsening financial crisis. Hamas has begun handing out plots of the land to 40,000 civil servants loyal to the Islamic militant group, to make up for millions of dollars in salaries it owes them for the past two years. The land giveaway is the latest sign that Hamas is struggling financially after almost a decade of uncontested power in the coastal strip. Gazans grumble about lack of jobs, constant electricity shortages and a blockade imposed by Israel and Egypt that has confined the territory’s 1.8 million people to the tiny strip. The World Bank says unemployment is 38 percent. Since 2014, Hamas’s main problem has been a dire lack of cash amid Egypt’s clampdown on smuggling tunnels underneath Gaza’s border with Egypt’s Sinai Peninsula. Before the tunnels closed, Hamas earned millions of dollars from taxes on smuggled consumer goods, including subsidized Egyptian fuel. Later that same year, Hamas and its rival, West Bank-based Palestinian President Mahmoud Abbas, agreed to form a unity government for both Gaza and the West Bank. Abbas had lost Gaza to a Hamas takeover in 2007, and this was an attempt to heal the split. But the deal stalled, partly because Abbas refused to add the 40,000 employees hired by Hamas since 2007 to the payroll of his Palestinian Authority (PA). In time, Hamas resorted to paying its loyalists 40 percent of their salaries at 50-day intervals. Since March, after Hamas collected additional taxes, these civil servants have been receiving 45 percent of their salaries on a monthly basis. The price of cigarettes went up 35 percent and an additional $30 in taxes was imposed on each ton of fruit entering Gaza from Israel. The land giveaway allows each group of four Hamas employees to share a 500-square-meter plot that they can either build on or sell. Even the sand collected on the land can be sold for about $100 a truckload. About 13,000 civil servants have already signed up for certificates attesting to their ownership of the plots. Bulldozers are working to

get three initial projects launched in August. Most of the land once was part of Jewish settlements in southern Gaza, near the towns of Rafah and Khan Younis. The settlements were demolished when Israel pulled settlers and soldiers from the coastal strip in 2005. Earlier this week, earth-moving equipment dug into a high hill near Khan Younis, scooping out sand and loading it into trucks at the site designated for the Al-Isra 2 housing project. Riham Khalil, one of the civil servants, said Hamas owes her 64,000 shekels (about $17,000) in back salaries. Last month, she and three of her colleagues were allocated a 500-square-meter plot in Al-Isra 2. “We had to accept it on a ‘bird-in-the-hand’ basis because there was no cash,” she said. “I wish I could find someone to buy the land and get the money.” Senior Hamas official Salah alBardawil said the land giveaway is a temporary fix, “not yet a strategic one” that would solve the group’s financial problems for good. If Abbas had put Hamas employees on his payroll, he would have likely encountered major problems with donor governments, including the United States, suspicious of money ending up in the pockets of Hamas, which much of the West considers a terrorist group. The West Bank-based Palestinian Authority opposes the land-formoney program. “No one has the authority to issue decisions to privatize government-owned land in the public interest, except for President Abbas,” said PA Spokesman Jamal Dajani. He dismissed Hamas’s claims that Abbas has neglected Gaza. The PA still pays the monthly salaries of some 70,000 civil servants in Gaza who are loyal to Abbas and left their posts after the Hamas takeover. The Gulf Arab state of Qatar has bailed out Hamas in the past and recently announced it was giving about $30 million to help pay a full month’s salary to all Hamas employees in Gaza. In October 2014 Qatar sent cash to half of Hamas’s public employees, excluding the security forces. Hamas has been spending some of its new revenue to fund summer camps, where children are exposed to its militant anti-Israeli ideology, or for large communal evening meals known as iftars during the Muslim holy month of Ramadan. AP It is also looking to its patron

Bavaria gov hits Merkel’s ‘we will manage’ mantra

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ERLIN—Bavaria’s governor distanced himself anew on Saturday from Chancellor Angela Merkel’s mantra that “we will manage” the refugee crisis following several attacks in Germany, including two committed by asylum-seekers and claimed by Islamic State (IS) extremists. Three of the four attacks in Germany since July 18, among them the IS-claimed ones, took place in Bavaria. The deadliest incident—the Munich shooting, in which an 18-year-old killed nine people then himself—didn’t involve Islamic extremism. Merkel and Bavarian Gov. Horst Seehofer, a conservative ally, have disagreed publicly for months over her welcoming approach last year to refugees. At a news conference on Thursday, Merkel firmly defended her policies and repeated her insistence that Germany “will manage” integrating asylum-seekers and other challenges, a phrase that has irked critics but helped make her Time magazine’s Person of the Year 2015. “With the best will, I can’t embrace this sentence,” Seehofer told

reporters on Saturday after a meeting of his state Cabinet in Bavaria. “The problems are too big for that and the solutions we have so far are too unsatisfactory.” Seehofer said border checks still need to be improved, among other things. Merkel on Thursday pledged to do “everything humanly possible” to keep Germany safe. She called for a better “earlyzwarning system” against signs of radicalization, faster progress on plans to create a center to help crack encrypted messages and better international intelligence cooperation, among other measures. But she said it’s too early to say what more may be required beyond tightening asylum and security laws. More than 1 million asylumseekers were registered in Germany in 2015. Numbers have since dropped dramatically, and Merkel says a repeat of last year’s influx has been “ruled out.” In Berlin, police estimated 1,300 people held a right-wing march on Saturday under the slogan “Merkel must go”—a protest smaller than similar ones earlier this year. AP

news@businessmirror.com.ph

The World BusinessMirror

Many GOP foreign-policy experts see Trump unfit to be president

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ASHINGTON—To the extent Donald Trump has articulated a coherent foreign policy, it appears a dark shoot-from-thehip unilateralism that puts him at odds with thinking that has dominated the Republican Party for generations. As Trump starts his general election campaign, many Republican foreign-policy and nationalsecurity advisers and thinkers who have spent decades promoting America’s pre-eminent role in world affairs remain deeply skeptical of his views. They say they are aghast that the GOP nominee boasts of reading little and ignoring expert advice, and instead of gleaning his knowledge of global events from Sunday TV talk shows. “Donald Trump still has the habits of a reality show host. He says things as dramatically and as provocatively as possible,” said Dimitri Simes, president of the Center for the National Interest, a Washington think tank founded by President Richard Nixon. Tr ump rang establishment alarms—again—last week, when he urged Russia to find Hillary Clinton’s deleted State Department e-mails, apparently daring a foreign adversary to hack a federal agency or a US presidential candidate. (Trump later said he was being sarcastic.) The episode, along with his fresh criticism of US alliances during the Republican National Convention, cemented doubts for many who still had hopes Trump would tamp down his rhetoric for the fall race against Democratic nominee Hillary Clinton. “When he entered the race, the overarching concern was lack of experience and an inability or unwillingness to define what his policy would be,” said Elliot Abrams, a Middle East expert and military hawk who served as deputy national security adviser to George W. Bush. “Now, particularly after the convention, he has defined it. And it would destroy the greatest single

121 The number of selfdescribed members of the Republican nationalsecurity community who signed a public letter pledging to work against Donald Trump’s election

asset we have, which is our alliance structure,” he added. It was hardly Trump’s first break with orthodoxy. Trump not only has expressed admiration for Russia’s authoritarian leader, Vladimir Putin. He has said he might recognize Russia’s military annexation of Crimea, which America and its allies consider illegal, and might lift US sanctions imposed on Moscow for its regional aggression. Trump has challenged the importance of North Atlantic Treaty Organization (Nato), the transatlantic military alliance born out of World War II, and shaken one of its pillars by saying he might not defend a member nation under attack from Russia or other invaders, as the treaty requires. He has called for using torture against terrorism suspects, and has said America has no standing to lecture other nations on human rights and the rule of law, as administrations have done since the depths of the Cold War. He also has suggested upending decades of US efforts aimed at stopping the spread of nuclear weapons by suggesting Japan and

Republican presidential candidate Donald Trump holds Kellen Campbell of Denver (right) and Evelyn Keane of Castle Rock, Colorado, during a campaign rally on Friday in Colorado Springs, Colorado. AP/Evan Vucci

South Korea should build their own atomic arsenal, rather than rely on the US nuclear umbrella. By embracing these and other controversial positions, Trump has turned America’s postwar political dynamic on its head. Many foreign-policy experts now view the Democratic nominee as a more stable hand on national security than the wobbly GOP. Trump’s most ardent supporters see his freewheeling approach as refreshing. They relish his role as a rule breaker who mocks the pious language of diplomats and policy wonks. They agree with his allegation that so-called experts have made America weaker and less respected.But the response from the GOP foreign-policy and national-security establishment has been fierce. Some sta lwarts—including Richard Armitage, a former highranking Pentagon and State Department official, and Brent Scowcroft, who counseled four Republican presidents—have thrown their support to Clinton. “It’s the fact that our friends aren’t going to trust us and our enemies aren’t going to fear us” if Trump is elected, said Paul Wolfowitz, a deputy defense secretary under George W. Bush. Wolfowitz said he has serious concerns about Clinton’s foreign policy but will probably vote for her. And he mocked Trump’s refusal to release his tax returns, as other presidential candidates have done for decades. “I wonder how [he would] feel if they leaked his tax returns,” he quipped, referring to suspicions

that Russia hacked and leaked Democratic Party e-mails. The criticism emerged early in the primaries when Trump began rising in the polls. In February Robert Kagan, a prominent neoconservative who argues for American exceptionalism, free-market capitalism and an interventionist foreign policy, called Trump a “Frankenstein’s monster,” capable of destroying the GOP. He has since backed Clinton. In March 121 self-described me mb e r s of t he R e pu bl ic a n nationa l-secur it y communit y signed a public letter pledging to work against Trump’s election and blasting him as utterly unfit for the White House. “His vision of American influence and power in the world is wildly inconsistent and unmoored in principle,” they wrote. “He swings from isolationism to military adventurism within the space of one sentence.” Eliot A. Cohen, a senior State Department official under President George W. Bush, said he helped draft the letter “so I can look my grandchildren in the eye 15 years from now.” “It’s not just demagoguery,” Cohen said of Trump’s campaign rhetoric. “It’s an appeal for a certain kind of dictatorship.” While others won’t go that far, at least publicly, they have expressed grave concerns about Trump’s lack of specifics on how and when he would use US power. “Donald Trump, essentially, has simply indicated that he would be tough enough to sock it to him,” said Richard Lugar, a former Indiana senator

who chaired the foreign relations committee and now leads a think tank devoted to global leadership. “There’s not a great deal of analysis [and] almost none at all for the complexities.” Condoleezza Rice, national security adviser and then secretary of State under George W. Bush, declined a request for comment. But someone familiar with her thinking said she has been “disgusted by this whole thing.” Like her, many in the foreignpolicy elite cut their teeth in the Cold War. They see Trump’s apparent camaraderie with Putin, who is steadily reasserting strongman rule in Russia, as naive. Lanhee Chen, policy director for the 2012 GOP nominee, Mitt Romney, decried what he called Trump’s “flippant nature” in addressing foreign policy. Romney, a former governor of Massachusetts, took time to study and think about foreign policy questions long before he ran for president, Chen said. “It’s a little bit late in the game” to start now, he said. “But the temperament is not something you can study. It’s just sort of who you are.” Trump has begun receiving briefings from more knowledgeable policy experts, and now that he is the nominee, will be offered classified intelligence briefings from US officials. Some conservative policy experts say Trump is being underestimated. “He appears to have a number of strong instincts that have not yet crystallized into a comprehensive world view,” said Paul Saunders, executive director of the Center for the National Interest. Saunders said wearing his lack of expertise on his sleeve may not impress foreign-policy circles, but likely appeals to some voters. Trump appears unbothered by criticism from people who should be his political allies. His gamble is that voters will disdain “experts” as much as he apparently does. Those experts, he told a news conference on Wednesday in Florida, got the world in the trouble it’s in. “So a lot of the people that you think are good because you know their name or because you see them on television, I don’t think are good,” he said. “Because look at the end result. The end result is our country is a mess.” TNS

Monday, August 1, 2016

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Brazil on rebound as investments return, resume

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onfidence in Brazil is recovering as investors return and Congress prepares for the final vote on the impeachment of Dilma Rousseff, Acting President Michel Temer said in an interview with foreign correspondents. Temer cited $4.3 billion in foreign investment in the oil and power industries, as well as Brazilian bond issues this month, as evidence of an initial recovery in Latin America’s largest economy. Rousseff ’s impeachment should be concluded in the Senate on August 25 or 26, further boosting investor confidence, he said. “The world needs to know who is the president of Brazil,” Temer said in his office in the presidential palace in Brasilia. “This interim situation doesn’t give the Brazilian state the same strength.” Temer said he could cancel his participation in the meeting of the Group-of-20 countries, scheduled for September 4 and 5 in China, if the vote on Rousseff’s impeachment is delayed. Both foreign leaders and investors need to know with whom they’ll be dealing during the next two years, he said. Hopes that Temer will adopt marketfriendly policies and rein in a near-record budget deficit have fueled a rally in Brazilian financial markets since he took over from President Dilma Rousseff, who was suspended in May to face an impeachment trial in the Senate. Congress has approved his central bank nominations, as well as revisions to this year’s budget target, that give him more room to maneuver on spending. The Bovespa stock index rallied more than 30 percent this year while the real gained 21 percent, more than any major equity or currency market in the world. Investors expect not only that Rousseff will be definitively ousted but that Temer will obtain Congressional approval for his constitutional reform proposal to cap government spending. A widening budget deficit under Rousseff ’s administration cost Brazil its investment grade-credit rating last year, and Temer said his government is working to resolve political and fiscal imbalances that triggered the downgrade. “Our hope is that the government, with the measures being taken and support from Congress, can regain credibility,” Temer said. “If we can restore this, it’s not improbable that risk agencies will change our classification.” The government plans to send a proposal to reduce pension expenditures to Congress before municipal elections in October if an agreement can be reached with labor unions, Temer said. He said reforms of both labor laws and the pension system may not be voted in Congress until next year. Economic growth prospects have improved on the back of recovering business and consumer confidence. Brazil’s economy will grow by 1.1 percent in 2017 after contracting for two consecutive years, according to the latest central bank survey of analysts. AP

At 90, Fidel Castro is symbol of Cuban resistance to change H AVANA—White-haired, thin and bent at nearly 90, Fidel Castro in person is a faint echo of the man who remade his country, defied the United States and fueled socialist uprisings around the world. But 10 years after he handed control to his brother Raul, Cuba’s former leader has taken on a powerful new role in a country suffering an economic crisis and debating its direction in a new era of normalization with Washington. After a decade out of the public eye, Castro has surged back in the run-up to his August 13 birthday as the inspiration for Cubans who want to maintain strict Communist orthodoxy in Cuba in the face of mounting pressures to loosen political control and allow more private enterprise. “We reiterate our commitment to stay faithful to the ideas he’s fought for throughout his life and to keep the spirit of resistance, struggle and dialectic thought alive,” Jose Ramon Machado Ventura, the hard-line second secretary of the Cuban Communist Party told the nation on Tuesday at the

celebration of Castro’s 1953 attack on a government barracks. The peak of Castro’s return to public prominence came on April 19 at the closing session of the Cuban Communist Party’s seventh Congress. The three-day gathering featured a string of speeches denouncing President Barack Obama’s visit to Cuba the month before, in which the US leader called on Cubans to look toward a future of reconciliation and greater freedom. Castro opened with a defense of his communist ideology, declaring the Russian Revolution of 1917 to be “a grand social revolution that represented a great step forward in the fight against colonialism and its inseparable companion, imperialism.” During 47 years in power, Castro was a constant presence for Cubans but prohibited the statues, portraits and other tributes beloved by other total leaders. Today his image is everywhere as the country fills with tributes to him on his 90th birthday. Castro is now mentioned by hardliners in the same breath as Jose

Marti, the 19th-century poet and revolutionary fighter whose status is similar to that of the founding fathers in the US. “In the ideology of Marti, and the path of Fidel, we’ve been warned about the need to prepare ourselves for a war of ideas, and to be informed, so we can’t be confused,” the head of Cuba’s official journalists’ union wrote on Sunday. “We have the historic privilege of having shared our fate with Castro.” The editorial went on to reject a series of recent calls by young journalists for greater freedom to work for the foreign press. “ T here i sn’t t he sl ig htest doubt that conservatives who don’t want to advance look for backup in Castro,” Cuban political scientist and former diplomat Carlos Alzugaray said. “There’s been a backlash from all of those who fear change.” There are billboards across the country with Castro’s portrait and best-known phrases. State television is filled with interviews reminiscing about his time in power. Cultural events are dedicated to him.

Traffic passes by a billboard with pictures of Cuban Revolution leader Fidel Castro at different stages of his life ahead of his upcoming 90th birthday in Havana, Cuba. At nearly 90, Castro in person is a faint echo of the man who remade his country, defied the United States and fueled socialist uprisings around the world. AP/Desmond Boylan

There’s a newly created government e-mail address to send him best wishes on his birthday. A group of students in the central city of Santa Clara even developed a mobile app allowing users to pull up

quotations from his written works and speeches. His family home in the eastern city of Biran has been refurbished and planted with trees. “I’ve lived through everything

and I can tell you that there’ll never be another like him,” said Sara Castillo, a 77-year-old retired nurse. “May he have more years of life and health. He should be the guide for all Cubans.” AP

Tourism&Entertainment BusinessMirror

A10 Monday, August 1, 2016

Editor: Carla Mortel-Baricaua

Counting on Secretary Teo’s game plan Dr. Mina T. Gabor

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THE bm traveler

n July 11 the industry leaders of Philippine tourism gathered at the Libra-Capricorn Room of the Diamond Hotel, eagerly awaiting the latest pronouncement from the new secretary of tourism, Wanda Corazon T. Teo.

Some 50 leaders and association presidents from Luzon to Mindanao were in attendance. It was the biggest gathering of such distinguished personalities since the early 2000s. But it took all of four hours before Secretary Wanda arrived. Meantime, the group had a chance to network, exchange

ideas and reminisce on past tourism activities. The prepared menu started with a bouquet of garden greens topped with pistachio crusted goat cheese and orange segments, followed by a soothing roasted pumpkin soup with mushroom and cream cheese crepes, pumpkin seed oil and her-

Kuwait Discovers Huma Island Resort & Spa, Palawan

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he International Trade Holdings Co. (ITHC), a Kuwaiti company, in cooperation with Philippine Airlines, hosted a ghabka on June 14. A ghabka is a “meal of late night,” a get-together that comes between futoor (breaking past) and suhoor (just before dawn) time-wise. Invited at the ghabka were key players in the travel trade industry and friends from media to introduce the Huma Island Resort & Spa, a resort investment located in the beautiful island of Palawan. Palawan is recognized by Conde Nast as among the world’s best islands for its pristine waters and beaches. Huma Island Resort is a holiday

destination for the elite traveler—a sanctuary for discoveries. Approximately 15 kilometers perimeter, it has 81 spacious thatched roof highceiling villas. The island resort was recently awarded by Booking.com for 2015 for gathering a score of 9.2 (out of 10) from actual guests, for its overall service and facilities. It is also a finalist in the World Luxury Spa Awards. These recognitions are an indication of Huma’s drive for excellence. The ghabka was held at the Al Mawardy Tent of the Convention Center & Royal Suites Hotel inside the Kuwait Free Trade Zone, Shuwaikh.

Healthier options at Marco Polo Ortigas Manila’s Lung Hin

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ISCOVER classic Cantonese cuisine with a new twist: lighter yet flavorful menus thoughtfully planned with your health in mind, only at Marco Polo Ortigas Manila’s Cantonese restaurant, Lung Hin, bringing in more of its authentic flavors. Lung Hin is known to serve only the most authentic dishes. With the change of 70 percent of its menu, the Cantonese restaurant is combining health and flavor into dishes that will surely bring more of its authentic flavor, for a unique flavorful experience for every dine. Starting off with a culinary masterpiece, Steamed Shrimp Balls with Dried Scallops, which consists only the freshest seafood. Deep Fried Tofu with Seaweed Salad, a crowdfavorite starter combines shredded taro, cabbage and carrot, with thin slices of seaweed on top, and Japanese Tofu on

the side. It is drizzled with special sesame dressing that brings a slightly sour flavor to it. Another favorite Bean Curd Roll, is having another twist as minced pork, garlic chives and special XO sauce is combined to it, and deep-fried to perfection. Taking seafood to the next level is the Stirfried Crystal Prawns, which Lung Hin only gets the freshest seafood to serve. An interesting take on the Cantonese Spareribs, is a deep-fried version swimming in Black Vinegar Sauce, which complements the tenderness of the Spareribs. Other healthy and authentic dishes also include Poached Live Garoupa with Mushroom, Sauteed US Scallops with Fresh Ginseng and Black Fungus, and Chilled Drunken Shrimp. Indulge in these superb culinary masterpieces at Lung Hin, on the 44th floor of Marco Polo Ortigas Manila, open for lunch and dinner.

bed cream. To prepare our palate for the main course, we had lemon and basil sorbet. The main course was a choice of salmon or chicken. I chose chicken as I had salmon the night before. I should have stopped after the sorbet. The pan-seared stuffed breast of chicken with sage and prosciutto farce, topped with rich burgundy sauce, proved too much for me. Congratulations to the Diamond Hotel chef! The meal was not too grand and plentiful—it was just right to while away the day’s hard work. Unfortunately, Secretary Wanda failed to taste the dinner prepared by Diamond Hotel as she had already eaten by the time she arrived. The reason for the delay—the Cabinet meeting started at 8 p.m. Soon as she settled in her seat, she was called to welcome and proceeded to put forward her plans for tourism. According to Secretary Wanda, she has been asked from Day One of the Department of Tourism’s (DOT) plans and programs for the industry. She advised that whatever direction the DOT will pursue, it would not be successful without the inputs from the stakeholders—so that it becomes “OUR collective plan.” She enumerated her aspirations for the Philippine tourism by crafting its policies, programs and promotion efforts: First, she emphasized the need for a stable tourism industry, “with a secure baseline that the private sector can rely on, no matter what.” Second, she stressed that our

tourism industry must be resilient, with the ability to “anticipate shocks, manage risks, continue the business and be ready to bounce back with every storm that passes the shores.” Third, she highlighted the importance of sustainable tourism programs that are “ecologically responsible, participative, culturally sensitive, economically viable, and ethically and socially equitable for local communities.” Fourth, the tourism industry should be transformative, “constantly keeping abreast with emerging trends, so that it can develop tourism products and services that will remain competitive in the global market.” Finally, she emphasized that the fruits of what the Philippine tourism industry should be inclusive and shared, “especially for those who need them the most.” She promised to “implement whatever programs have been committed by the DOT for 2016, but for 2017 and beyond, the programs will have to be aligned to the priorities that will be defined by the DOT with the inputs of the private sector.” The secretary hinted on some of the programs such as reviewing the accreditation system; looking into the potential of the MICE business; recognizing the potential of agri-ecotourism, homestay, medical tourism and retirement services; preparing the program specifics for the Asean’s 50th anniversary next year, with the Philippines as host; hosting the Miss Universe pageant next year; review-

ing the national Tourism Development Plan; ensuring there are more and better tourism products to offer; aggressively marketing and promoting destinations; and updating the data collection to come up with statistics for the stakeholders. I personally got so excited when she mentioned her plans to rejuvenate and revive Manila, especially since she is interested in hosting the next Miss Universe pageant. It has always been my dream to see Escolta and Intramuros become a tourism hub, Makati, Manila and Pasay become major shopping destinations in Asia, the CCP complex an art and culture center, and the Pasig River for a riverboat cruise. The tourism secretary also responded to some queries and suggestions: What will the DOT do to curb the proliferation of tour guides that are not accredited? Review the accreditation system as there are new developments in this area, like the retired professionals who wish to guide. There is a specialized need for guides with specific tourism products, like ecotourism, heritage, culinary, culture, etc. Also, there must be a script specific for every tourism destination based on the current information, be it national, regional, or provincial. Review airport facilities, especially those in the provinces. Will take up with concerned agencies. Will the DOT continue with the current slogan since a good deal of money was spent on this but it was not fully implemented? For a while, but soon we will come up with a new one appropriate

to the thrust of the DOT. Will you still require hotel rates to be brought down? No, since the hotel owners have presented their side to this matter; their rates are competitive. How about the request to bring down the minimum required vans to one instead of three before a small business could get a license to operate a tour transport. This will be reviewed. Will the Madrid Fusion be continued considering the staggering amount spent for each event? This is also subject for review and assessment whether only a few are benefited, or the promotions have made a dent in the international market. Tourism Secretary Teo’s parting statement: “We will make it easy for you to work with us and through us. Let us make tourism fulfill its promise to improve the lives of the Filipinos.” Dr. Mina T. Gabor is the founder and president of the Center for International Trade Exhibitions and Missions Inc. (Citem) of the Department of Trade and Industry, and the secretary of the Department of Tourism from 1996 to 1998. She continues to work on her passion of promoting the Philippines through trade and tourism as the president of the International School of Sustainable Tourism, as founder and president of the Philippine Small and Medium Business Development Foundation Inc., and the president of the Automobile Association of the Philippines Travel Agency. For any feedback, please contact this writer at minagabor2010@ gmail.com.

MÖvenpick Hotels & Resorts offers ‘Fam-tastic’ children’s activities Asia

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Övenpick Hotels & Resorts is offering exciting activities at its resort in Asia that focus on fun, creativity and learning to cross the generational divide. The pioneering resort group is putting the fun firmly into family travel as it identifies multigeneration families as a key traveling demographic in Asia with grandparents, parents and children all packing their bags and heading off together. The award-winning Swiss hospitality company’s Asian hotels have created programs that provide a precious balance between “us time” for moms, dads and grandparents and “our time” as families play together and stay together at hotels in Thailand, the Philippines, Vietnam and China. “Families have always been one of the key drivers of our business and as we have grown in Asia, we have noticed that large multigenerational groups love to travel together,” said Andrew Langdon, Mövenpick Hotels & Resorts senior vice president-Asia. “This is a unique characteristic in Asia and a central, reason we have developed the ‘Fam-tastic’ programs with suitable room configurations, healthy meals, creative fun and learning activities for all ages,” Langdon added. Highlights include creative arts

and dance activities in Thailand and the Philippines, a kids corner at the weekend brunch at Chef’s Theatre restaurant in China, and a chance to play hotelier in Vietnam. One program at the Mövenpick Hotel Hanoi even turns the tables on adult guests as kids can sign up to “play hotelier for a day” wherein they get to check guests

in, roll out their sleeves and work in the kitchen. At Mövenpick Resort & Spa Karon Beach in Phuket, activities include candle making and face painting, while kids at Mövenpick Resort Bangtao Beach Phuket get the chance to be a mini chef, and learn key kitchen essentials, like how to make pizza dough.

The fun continues at Mövenpick Siam Hotel Pattaya with kayaking, beach volleyball, water cycling and special entry to Cartoon Network Amazone Waterpark, with fast-lane access, a 15-percent discount off F&B and retail merchandise, a free park gift bag and free transfers to and from the park. At Mövenpick Hotel Sukhumvit 15 Bangkok kids get front-row seats to weekly night of movies with popcorn. Bracelet and necklace making, figurine painting, paper crafts and a dance workshop are of offer at Mövenpick Hotel Mactan Island Cebu, while children can enjoy the Chef’s Theatre Restaurant play area at Mövenpick Hotel Enshi China during the Weekend Brunch. When it comes to “our time” for the adults, Mövenpick resorts offer an engaging choice of destination dining experiences, dynamic bar concepts with creative cocktails, as well as indulgent spa treatments to melt away stress and help heal the body and mind. As an added service, all hotels and resorts have a well supervised complimentary kids’ club for children.

Tourism&Entertainment BusinessMirror

Editor: Carla Mortel-Baricaua

Tourism council ‘called to action’

Monday, August 1, 2016

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Nagoya at the heart of Japan Just a short train and bus ride away from the city is Magome, a postal town that was an integral route for government officials and locals alike during the Edo Period.

Toyota didn’t only revolutionize the way they made cars, but also the way they produced textile. DOT officials, led by Tourism Secretary Wanda Corazon T. Teo, with some of the tourism industry leaders.

Tourism Secretary Wanda Corazon T. Teo addressing the tourism industry leaders.

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ourism Secretary Wanda Corazon T. Teo said she will convene the Tourism Coordinating Council (TCC) as soon as possible to address urgent issues confronting the country’s tourism industry. Teo noted the need to “reactivate” the TCC as increased concern for tourism security, as well as insufficient infrastructure, were expressed during the industry reception for the tourism leaders and new Department of Tourism (DOT) officials. Officials of at least nine government agencies, headed by the DOT secretary, comprise the council tasked to ensure the smooth implementation of the government’s tourism program. Teo, a longtime industry player herself, acknowledged that the TCC has not convened for oneand-a-half year despite widespread alarm over kidnapping of foreigners, and poor access roads and lack of direct flights to tourist destinations. The DOT head said Philippine National Police chief Dir. Gen. Rolando dela Rosa has assured

police visibility at tourist areas and augmentation of the Tourist Police units. Teo also said Transport Secretary Arthur P. Tugade, likewise, guaranteed improvements of airport facilities all over the country. “Secretary Tugade said airport renovations are already ongoing and new routes, as well as direct flights from abroad to Manila and Clark. They are also resolving the shortage of yellow taxicabs,” Teo said. Public Works Secretary Mark Villar has also promised to improve and build more “airport-toparadise roads” in the country’s tourist destinations. Traffic congestion, destruction of historical sites, massive number of street people and “colorum” tour guides and taxi services were also raised during the open forum between Teo’s team and tourist industry leaders. “We cannot sweep these issues under the rug. It is the mandate of the Tourism Coordinating Council to resolve such issues,” Teo stressed.

A CALL FROM SPAIN: FRIDAY FUSION COCKTAIL BUFFET

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on’t let Friday pass you by without bringing adventure to your palate. Makati Diamond Residences took a cue from Spain’s social and vibrant tapa bar culture to bring back one of its best buffets—the Friday Fusion, a cocktail affair that celebrates great food, drinks and company. Featuring a symphony of flavors, the cocktail buffet has appetizers that are served as soon as you are seated. Enjoy a burst of spices from the hotel’s crowd pleaser, the Truffle fries with Poached Eggs and Prosciutto slices, or discover its new Rose Water Macaron before savoring the simple, yet satisfying, lineup of entrées.

Fill up your plates with pastas that are cooked on the spot, or go right ahead with helpings of the Jamon Serrano Montenevado and Jamon Iberico E. Tomas that are available all throughout the promotion. No cocktail buffet is ever complete without unlimited alcohol, and Makati Diamond Residences has a tempting selection for the occasion. Glasses of Negroni, Boulevardier, Margarita, Bloody Mary, Caipirinha, Brandy and Rob Roy are yours for the taking, all for only P1,000 net per person. Friday Fusion runs from July 17 to August 26, 6 to 9 p.m.

A visit to the Commemorative Museum of Industry and Technology will show visitors some of the ways Toyota manufactures cars.

Shirakawagou is accessible from Nagoya by train or bus to Takayama then another bus ride from the latter.

Story & photos by Joshua Berida

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hen we think of Japanese cities, the first two that come to mind are either Osaka or Tokyo. Their bustling streets, Tokyo’s Shibuya crossing comes to mind, the glitzy shopping centers (Dotonbori, Shinjuku and Harajuku) and the food are top of mind. However, when someone mentions Nagoya, what do they think of? Quite frankly, when I booked my tickets, I wasn’t sure what I will discover. But, in the spirit of adventure, I kept an open mind and let things happen.

An old soul

There was something familiar about Nagoya; it has an oldness about it that is similar to the other commercialized Japanese cities I’ve been to. A walk through its narrow streets will take you to ancient temples, a castle and shopping areas that might date back to a century or so ago. The construction of Nagoya Castle (¥500 entrance fee) began at the beginning of the Edo period. The ruling Tokugawa family made it one of their three branches. As a prominent city, the castle was one of the largest in Japan, and the town surrounding it subsequently became the fourth-biggest city. Air raids in 1945 led to massive destruction of many of the castle’s buildings, but reconstruction has returned some of the castle’s former glory. It’s impossible not to see any ancient, old or new Buddhist temples walking around Japan. In Nagoya Osu Kannon is one of the most prominent in the city. The temple was originally from Gifu Prefecture, built in the Kamakura Period (11921333). Tokugawa Ieyasu decided to move the sacred structure to its current place in Nagoya in 1612. Worshippers visit Osu Kannon to pay their respects to the goddess of mercy, Kannon. Beneath the temple’s main hall is the significant Shinpukuji Library. The latter has more than 15,000 Chinese and Jap-

anese classical texts. One of which is the most ancient copy of the Kojiki, this chronicles the mythological origins and early history of the country. The city kept its old soul, despite the massive commercialization and developments around it. Walking in and out of old streets and shopping districts, weaves one with the city’s past and present.

City bustle

Nagoya is the biggest city in the Chubu region and is Japan’s fourth-most populated urban area. A city this big has everything you need; from shopping in its many underground plazas to glitzy commercial centers that offer local and foreign branded goods. There is even a shopping street just next to Osu Kannon Temple; here visitors can find good deals on anything from adidas sneakers to discounted clothes, jackets and other apparel, and souvenir items. Nagoya may not have the famous Glico Man of Osaka nor the mayhem of Shibuya crossing in Tokyo, walking along its streets at night are quite a visual spectacle. We stumbled upon a shopping street that had a colorful ferris wheel attached to it. An elevator ride up Nagoya Tower (¥700 ticket) provides you with an overlooking view of the city during blue hour, or at night when it is lit up. You can see one of the major transport hubs in its unique circular shape turn from

A lift up Nagoya Tower allows you to get a bird’s eye view of the city lit up at night.

The Osu Kannon Temple is one of the most significant places of worship in Nagoya.

blue to green or other colors. Toyota, one of the biggest car brands in the world, traces its roots to Nagoya. The company has its headquarters and several domestic production factories around the city. A trip to the Commemorative Museum of Industry and Technology (¥500 entrance fee) will show visitors the company’s humble roots as a textile manufacturer to its days as a premier automobile manufacturer. The guides demonstrated how some of the machines worked and displayed finished products. One can tinker with some of the machineries to see how it transforms spools of thread into a colored cloth or how an engine works.

Gateway to the countryside

Nagoya’s central location allows visitors to explore the country’s central highlands and verdant countryside. Old postal towns, such as Magome and Tsumago, are a few hours away by train. These small, quaint towns were an integral part of the Kiso Valley trail that connected Kyoto and Tokyo in the Edo Period. These postal towns will give you a glimpse of how government officials and locals traveled to and from Kyoto and Tokyo. A step into either Magome or Tsumago will transport you to a time several centuries ago. The well-preserved wooden houses create a picturesque view. These towns have plenty of ryokans (guesthouses) and maintained honjins (a principal inn that served govern-

ment officials) to preserve their lostin-time ambiance. After time traveling to older towns along the Kiso Valley, head to Gifu to explore Shirakawagou, this little village has quaint, wooden houses built in the gasshozukuri traditional style, meaning hands in prayer design. This United Nations Educational, Scientific and Cultural Organization-listed site is tucked in the mountains and has a view point that shows them spread in the verdant farmlands below. Nagoya’s position at the heart of Japan is more than just geographical. It is an important part in the country’s industrialization and commercialization. The old and new connect with its weaving streets and the glitzy lights of its shopping districts at least approximate that of bigger cities, like Tokyo and Osaka. Its central location allows it to be a portal to travel back in time to the old postal towns of Magome and Tsumago, and a gateway to discover Japan’s beautiful countryside. The city and surrounding prefectures has more to discover, I only managed to scratch the surface during my trip. Keeping an open mind to surprises is the best way to uncover what a place has to offer.

How to get to Nagoya

There are direct flights from Manila to Nagoya from Cebupacific and Jetstar.

Green Monday BusinessMirror

BusinessMirror

A12 Monday, August 1, 2016

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

Survival of the fittest for Philippine eagle

Sinabadan ready to claim own territory

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By Jonathan L. Mayuga

@jonlmayuga

its survival instinct during this period. Those that are not strong enough either die of hunger or fall prey to other predators, either animals or and humans. Many young eagles have fallen prey to hunters. PEF records reveal that most of the eagles it has rescued from captivity or injuries sustained from bullet wounds have died. “Half of the 16 eagles we have rescued and released back into the wild have been killed after a few months,” Salvador said. Since 2000, the PEF has tagged a total of 17 eagles, but only four remain active. These include Sinabadan and its mother, and two other eagles in Mount Kimangkil, Bukidnon, and in Pudtol, Apayao, Ibanez said.

inabadan was only seven months old when its father was shot and killed in 2014. After two years, covered with thick whiteand-brown feathers, claws sharp and strong, with a completely grown feather tails and wings that span like most juveniles eagle, Sinabadan is now ready to leave her nest and explore the world on her own. The story of Sinabadan offers a ray of hope for the conservation of her species, the Philippine Eagle. Scientifically named Pithecophaga jefferyi, the Philippine Eagle is endemic to the Philippines. It is the rarest of all birds of prey and considered as the largest in the world. The population of the Philippine Eagle, only about 400 pairs left in the wild, are concentrated in the main islands of Luzon and Mindanao, and in Samar and Leyte provinces in the Visayas. Unfortunately, the Philippine Eagle, also called the monkey-eating eagle, is considered still critically endangered or in the brink of extinction, said Dennis Salvador, executive director of the Philippine Eagle Foundation (PEF).

Single parent

Sinabadan, named after an indigenous people’s group in Davao, is, perhaps, the first of her species ever to be raised by a single parent, PEF said. The group has documented Sinabadan’s young life. Sinabadan lost her father, Sibulan, to hunters in August 2014. A team from the PEF came looking for Sibulan and discovered the eagle’s carcass. Necropsy report on Sibulan revealed he died of a gunshot wound in the head, which killed him instantly. Since the demise of Sibulan, the unnamed mother of Sinabadan was forced to fend for the young eaglet on her own.

Senseless killing

Most eagles killed by hunters are victims of senseless killing, Salvador said. Nearly half of the

Community support

total of 16 rescued eagles that were released into the wild were shot and killed after a few months upon their release, he noted. “Many of those we rescued and released back into the wild were killed. The primary survival issue is human persecution,” he added. He said the eagle’s habitats, especially in Mindanao, have fragmented forest.

Healthy eagle

Despite being raised by a single parent, Sinabadan is healthy, said Ana Maria I. Lascano, field and attending veterinarian of the PEF. In her report, Lascano said Sinabadan is “apparently bright, alert and responsive, with good appetite and in good state of health” before she was released on the same day upon examination. The PEF closely monitored several eagles, including Sibulan, through a Global Positioning Satellite (GPS) transmitter, or tracking device, to determine the eagles’ exact location and the areas they had been to. GPS transmitters help scientists study animal behavior in the wild by knowing where they go, how long they stay in a place, or where they spent the night or day to rest. “It [Sinabadan] could have not survived had its mother decided to abandon it, which is commonly observed among the species,” Jayson Ibanez of PEF’s Research and Conservation Department said.

Healthy ecosystem

Fortunately, he said, the mother and young female eagles’ territory represents a healthy ecosytem. “Timely, maybe, that the for-

Philippine Eagle Sinabadan is now more than two years old and is ready to claim her own territory. John McKean

est is abundant with local food source. The mother eagle had to work double time to bring food to Sinabadan to feed it,” Ibanez said. PEF’s partners on the ground spotted the mother eagle bringing bats, flying lemurs, and, on one time, a monkey to her nest to feed Sinabadan. It takes both the male and the female to incubate and take care of their young, taking turns during the incubation period and in finding food for their young until they are old enough to hunt on their own. Mother eagles do most of the work, but without the father eagle, incubation and nurturing would be impossible—except in the case of Sinabadan.

Unique breeding

The Philippine Eagle’s unique breeding habit makes the Philippine Eagle prone to extinction, Director Theresa Mundita Lim of the Biodiversity Management Bureau (BMB) of the Department of Environment and Natural Resources (DENR) said. “Normally, when one of the parent eagles die, no matter how hard

the surviving parent works, the eaglet also dies. Even if it survives, the eaglet becomes malnourished and would not be able to survive on its own,” Lim said. She said an eagle needs to feed on protein-rich food, which both parent eagles should be able to provide to ensure the eaglet becomes strong and survive. “Most carnivorous animals are dependent on their parents. Some birds take months to survive. The Philippine Eagle takes longer, and the eaglet needs to feed a lot to become strong and healthy,” she said.

Survival of the fittest

It w i l l not be long when Sinabadan’s mother would be ready to find a mate and, hopefully, breed again. The PEF received reports from community partners who also serve as forest guards that the mother was flying with another adult eagle. The increased aerial displays, frequent stay near the nest and nest-building activity, mark the start of the courtship period for this rare species. Courtship among

Philippine Eagles, particularly in Mindanao, usually starts in July. Soon, Sinabatan’s mother and her new partner would be fixing their own nest, hauling nesting materials and would be ready to lay egg again. Meanwhile, Sinabadan is starting to hunt farther and farther away from her nest. Eagles are territorial raptors. For a pair to survive, they have to defend their territories, which usually covers 7,000 to 13,000 hectares. Ibanez said that, in some cases, when the ecosystem is very healthy and preys are abundant, 5,000 hectares would do.

Elimination of the weak

Ibanez said it would take at least three more years before Sinabadan would be old enough to breed, if it is able find a mate and, more important, survive in the wild. The first few months after an eaglet leaves its nest are crucial. This is the time that the eagle has to find its own prey and feed or defend itself from other predators—including humans. An eagle learns and enhances

Also crucial to Sinabadan’s survival, like other Philippine Eagles, is the support of the communities and the enforcement of environmental laws, Salvador said. In most cases, indigenous peoples (IPs) hunt down the eagles or are helping hunters find the eagle. In the case of Sinabadan, the communities were tapped as forest guards and protectors of the Philippine Eagle. In 2010, as part of its effort to protect and conserve the species and their habitats, the PEF has partnered with IPs under its Indigenous Forest Guard Program. A total of 647 indigenous forest guards from eight ethno-linquistic groups in 24 villages are currently actively protecting 18 Philippine eagle-nesting territories. Altogether, the forest guards monitor wildlife and habitats, and help enforce laws in over 74,000 hectares of forest habitats, according to PEF. Information, education and communication and, more important, livelihood support to the communities is crucial to wildlife protection and conservation program, Salvador said. He said the PEF is strengthening its partnership with IP communities as part of their social preparation for the inevitable influx of tourists—including bird watchers and photographers— who would soon be rushing for adventure once they learn of the eagle’s location. There is hope for the Philippine Eagle, Salvador said, as long as their habitats remain intact and the people keeps their distance, or better, stay away from wild animal’s marked territories.

Taiwan firm’s pollution Testing confirms new, rarely seen whale in Pacific Ocean affected 200,000 Viets A

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ANOI , V iet n a m—T he Vietnamese government said the toxic pollution a Taiwanese-owned company has acknowledged discharging from its steel complex has harmed the livelihoods of more than 200,000 people, including 41,000 fishermen. The pollution from a unit of Formosa Plastics Group also decimated tourism in central provinces, the Thanh Nien newspaper on Friday quoted the government saying in a report to the National Assembly. Formosa acknowledged late last month that it was responsible for the pollution and pledged to pay $500 million to clean it up and compensate affected people. An estimated 115 tons of fish washed ashore along more than 200 kilometers of Vietnam’s central coast in April, the report said, adding 140 tons of farmed fish and 67 tons of farmed clams have died. The incidents sparked rare protests across the country. The report said the government must learn from the incident and carry out proper

oversight of the environment, especially when the country wants to attract more foreign investment following the signing of the 12-member trade pact, the TransPacific Partnership, that includes the United States and Japan. The report said the government would begin to compensate affected people next month, in what officials have called the country’s worst environmental disaster. The Formosa Ha Tinh’s $10.6-billion steel complex, which includes a steel plant, a power plant and a deep sea port, is one of the largest foreign investments in Vietnam. It said wastewater containing toxins, such as cyanide and carbolic acids, were released into the sea during a test run of the plant. A preliminary assessment of the damage caused by the pollution showed that it affected 450 hectares of coral reefs, of which 40 percent to 60 percent were destroyed. The report said some groups of sea creatures in affected areas were depleted by half. AP

NCHOR AGE , A l ask a— Genet ic tests conf ir m that a mysterious, unnamed species of beaked whale, rarely seen by Japanese fishermen, roams the northern Pacific Ocean, according to research published this week. The testing shows the black whales, with bulbous heads and beaks like por poises, are not dwarf varieties of more common Baird ’s beaked whales, a slate-gray animal. Japanese researchers sampled three black beaked whales that washed up on the north coast of Hokkaido, the country’s most northern island, and wrote about them in a 2013 paper. The challenge to confirm the existence of the new animal was finding enough specimens from a w ider area for testing and matching genetic samples, said Phillip Morin, a National Oceanographic and Atmospheric Administration (NOAA) research molecular biologist. He and his team uncovered five other whales, all found in Alaska, that matched the species

found in Japan. “Clearly, this species is very rare and reminds us how much we have to learn about the ocean and even some of its largest inhabitants,” he said in an announcement. The largest beaked whale varieties can reach 40 feet and spend up to 90 minutes underwater hunting for squid in deepwater. They are hard to research because they may spend only a few minutes at the surface, Morin said by phone on Thursday. They rarely breach, travel in small numbers and blend into their surroundings. Japanese fishermen reported occasionally seeing a smaller, black beaked whale that they called karasu, the Japanese word for raven, or kuru tsuchi, black Baird’s beaked whale. The Japanese researchers in 2013 were limited in declaring that they had found a new species because their three samples were from one location, said Morin, who works at NOAA’s Southwest Fisheries Research Center in San Diego. “My first idea was to go to our collection, where we have the

largest collection of cetacean samples in the world,” he said. In a paper published on Tuesday in the journal Marine Mammal Science, Morin and fellow authors describe analyzing 178 beaked whale specimens from around the Pacific Rim. They found five that matched with the Japanese whales. The oldest was a skull in the Smithsonian Institution recovered from the Aleutians in 1948 and formerly thought to be a Baird’s beaked whale. Another specimen discovered in Alaska was in the collection of the Los Angeles County Museum of Natural History. The Southwest Fisheries Science Center had tissue from a whale found f loating in the Bering Sea. It also had tissue from a black beaked whale stranded on Unalaska Island in the A leutians in 2004. Local teachers and students had photographed and measured the animal, and its skeleton was put on display at Unalaska High School. The most recent was a 24-foot, adult specimen that washed up in 2014 on Saint George Island, in the Bering Sea. Residents notified

Michel le R idgeway, a mar ine ecologist with Oceanus Alaska, who documented the animal. “We knew it was not any whale we knew from our area,” Ridgway said in the announcement. Litt le is k now n about t he range of the new species, although the Saint George Island whale give a clue. The whale had scars from cookie-cutter sharks, which live in tropical waters and bite flesh from larger creatures, like a cookie cutter out of dough. Morin said scientists have more questions than answers about the new species, which is about two-thirds the size of a Baird’s beaked whale. “They’re hard to see, especially if the water is anything but perfectly calm,” he said, adding that acoustic research may help find them so they can be studied. Japanese researchers are in the formal process of “describing” the species, Morin said. That will include giving the whale a Latin and common name and formally defining its measurements and how it differs from other beaked whales. AP

Science Monday

Monday, August 1, 2016 A13

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

next move After the SC reversed its earlier ruling that stopped the field testing of Bt eggplant

Scientists: Commercial propagation of Bt ‘talong’

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By Manuel T. Cayon | Mindanao Bureau Chief

OS BAñOS, Laguna—Filipino scientists here said they would apply for commercial propagation of the genetically modified (GM) eggplant, following the unanimous ruling of the Supreme Court (SC) reversing its earlier ruling that temporary stopped the field testing of the GM eggplant. Dr. Desiree M. Hautea, the project leader of the Bacillus thuringiensis (Bt) talong (eggplant) project, said the application would proceed immediately after they would have consolidated the data from the series of tests done since 2004. The tests included contained trial in the laboratory, a limited confined field trial and a multilocation field trials in Luzon and Mindanao. The tests done would probe into the biosafety feature of the genetically engineered eggplant; its health safety to human and animals; and environmental safety in relation to other plants around the area planted to the Bt eggplant. “It’s a good scenario,” Hautea told visiting journalists on Friday at the compound of the Southeast Asia Regional Center for Graduate

Studies and Research in Agriculture that is stationed inside University of the Philippines Los Baños (UPLB) campus. She said the High Court’s decision has cleared the way for further research and development studies on Bt eggplant and other genetically modified organisms (GMOs). She hoped the application for commercial propagation would be approved w ithin the year to allow them to proceed with seed production for the openpollinated and hybrid varieties. The UPLB-based plant and agricultural scientists have already identified the areas for planting during the last 10 years “that we have monitored and observed these areas.” Pangasinan is on top of the list of prospective planting sites, owing to its dominant production

volume of a third of total Philippine eggplant harvest. Despite the uprooting of eggplants in the Davao City field-testing area, it remained in the top 10 preferred sites for final propagation.

Social conflict

Hautea said they would hold another round of public hearings to increase public adaption of Bt eggplant, presenting the result of the laboratory and field tests as their proof of biosafety and economic profitability for farmers. She said it was likely conflicts will arise, though, in the farms as disagreements and misunderstandings persist on GM crops. “ That’s where the local governments must come in to manage it,” she said, but emphasized that she would not expect any case of uprooting anymore, even in the level of the farms after the SC ruling. “No one has the right anymore to uproot these plants,” she added.

Supreme Court reverses ruling

In a unanimous decision, the Philippine SC on July 26 reversed its December 2015 ruling, which temporarily stopped the field testing, propagation, commercialization and importation of GMOs in the country. In the en banc session, the SC granted nine motions for reconsideration filed by Bt talong proponents and issued a new one, dismissing on the ground of mootness the petition for writ of continuing mandamus and writ

Staff members of University of the Philippines Los Baños Institute of Plant Breeding at a Bt eggplant field trial site in Santa Maria, Pangasinan, in 2010. Lyn Resurreccion

of kalikasan filed by Greenpeace Southeast Asia (Philippines) and Magsasaka at Siyentipiko sa Pagpapaunlad ng Agrikultura. The SC agreed with the petitioners that the case should have been dismissed in view of the completion and termination of the Bt talong field trials and the expiration of the biosafety permits in 2012, Crop Biotech Update said in its web site. The Court also said it should not have

Govt to harness benefits of S&T to spur devt By Rizal Raoul Reyes @brownindio Contributor

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he Department of Science and Technology (DOST) is serious in bringing science and technology closer to more Filipinos to enable them to realize that the two disciplines are the engines of growth and progress In his message, Science Secretary Fortunato T. de la Peña said the government, under the administration of President Duterte, is determined to harness the benefits of science and technology to spur development, especially in the countryside, to boost inclusive growth. In the pursuit of empowering the people belonging from the bottom of the pyramid, de la Peña pointed out that the government, spearheaded by the DOST, is to craft an environment conducive to research and development. “We are quite aware that research and development foster innovation,” he said in his remarks during the opening of the weeklong celebration of the 2016 National Science and Technology Week (NSTW) held at the DOST headquarters in Taguig City. De la Peña said the DOST will pursue the development of regional-based research and development hubs to address the needs of the people in the provinces for economic empowerment. “We want to make sure research and development will harness the potential of the regions for economic development,” he explained. He said there would be times people will need to step out of their comfort zone to pursue the objective. “For me, I have to break out of my comfort zone from retirement,” he chuckled. De la Peña joined the DOST in 1982 as head of planning service division of the National Science and Technology Authority (DOST’s forerunner). Later he joined academe as assistant to

resolved the case on its substantive merits due to mootness, and should not have acted on the constitutional question of whether the Department of Agriculture (DA) Administrative Order (AO) 08-2002 was unconstitutional, citing that this matter was only collaterally raised. The Court also said the exceptions to mootness were not present and, thus, the Court should not, in the first place, have decided the

PHL inventors appeal for govt support By Claudeth Mocon-Ciriaco Correspondent

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Science Secretary Fortunato T. de la Peña heads the opening ceremony of the National Science and Technology Week held at the auditorium of the Department of Science and Technology (DOST) in Bicutan, Taguig City. The ceremony was attended by staff leaders of DOST agencies and regional offices. ALYSA SALEN

the executive director of the National Engineering Center in the UP-Diliman, and then served as chairman of the College of Engineering’s Department of Industrial Engineering and Operations Research. In 2001 he assumed the post of undersecretary for Scientific and Technological Services of the DOST under the leadership of Dr. Estrella F. Alabastro. In his 13year stint as undersecretary of the DOST, the chemical engineering graduate from UP Diliman implemented several major information technology and e-commerce programs prior to the creation of the Department of Information and Communications Technology. These include the e-Government Program of the DOST and the Philippine e-Library Project, for which he received the highest civil-service award in the Philippines in 2005. To make science closer to the people, de la Peña noted the synchronized celebration of NSTW in all DOST regional offices besides the four major hubs in Bicutan, Taguig; Quezon City; Manila; and Los Baños, Laguna. “This is the first time that the DOST [held] a simultaneous cel-

ebration not only in Manila, but to the different regions of the country, de la Peña explained. He added the DOST hopes to uphold the enthusiasm on science and technolog y created by the administration of President Benigno S. Aquino III and pursue the programs that were unfinished for the “ benefit of even those who are in the outskirts of development.” To make science more relevant and interesting to the people, de la Peña said it must grow in response to the times. “It must work in the creation of development,” he said. “Moreover, science and technology must be the leader in this task.” Meanwhile, the DOST awarded four scientists for their significant contributions to scientific research. n Dr. Gisele Concepcion, a professor at the Marine Science Institute-UP Diliman and vice president for Academic Affairs of the UP System, received the Dioscoro L. Umali Medal for her outstanding accomplishments in research, science education and championing the advocacy of science and technology.

n Dr. Junie Billiones, a member of the faculty of the Health Sciences Center of the Philippines in UP Manila, was awarded the Eduardo Quisumbing Medal for his pioneering studies on “Computer-aided Discovery of Leads against the Druggable Targets of Mycobaterium Tuberculosis.” n Dr. Roel Suralta received the Eduardo Quisumbing Medal “in recognition of his significant contributions to crop science research on root plasticity in rice under soil-moisture f luctuations.” In 2009 the DOST-National Academy of Science and Technology cited Suralta in its search for Young Scientist Award. n Dr. Alonzo Gabriel, a full professor of food science and nutrition at the Department of Food Science and Nutrition, College of Home Economics, UP Diliman, is this year’s recipient of the Julian Banzon Medal for his outstanding research on “Precision Food Processing,” which establishes and integrates models for microbiological inactivation, nutritional quality deterioration, physiochemical changes and sensory quality changes in the processing of food.”

matter, Crop Biotech added. In December 2015 the SC not only stopped the field testing of Bt talong, but also temporarily stopped any application for f ield test ing , conta ined use, propagation and importation of GMOs; it also nullified DA AO 08-2002, saying the order lacked the minimum safety requirements under Executive Order 514, which established the National Biosafety Framework.

iven the right support and resources, Filipino investors can be on a par with their foreign counterparts. The Filipino Inventors Society Producers Cooperative (FISPC) is hopeful that the administration of President Duterte will give them attention and the support they have been needing. Francisco Pagayon, FISPC president, told the BusinessM irror they are seeking an audience with President Duterte to present their proposal for a separate agency that will serve the Filipino inventors, stressing that they have been suffering from “lack of government support.” Pagayon expressed fear that the state of Filipino inventors is “dying.” “Dying in the sense that inventors are not united. That is why, we at FISPC, want to help our fellow inventors,” Pagayon said partly in Filipino. By doing so, they have organized a cooperative and set up a showroom in Quezon City. The shop showcases the best products of Filipino inventors, which they introduce in the market. “We want to assist [the inventors] and help, especially the inventors who have the potential but have no financial capacity. No one will understand their situation but their fellow inventors,” Pagayon added. Pagayon and his group participated in the 2016 National Invention Contest and Exhibits at SMX Convention Center, SM Mall of Asia in Pasay City last week. With the theme “Invention and Innovation for One Nation,” Pagayon expressed confidence that the event will help showcase the capacity of Filipino inventors. Being one of the well-organized and respected groups of inventors, FISPC was invited by Technology Application and Promotion Institute and the Department of Science

and Technology to participate in the event. Edgardo Vasquez, former president of Filipino Inventors Society and an FISPC member, told the Business M irror that creating an agency that would serve as an “incubation” office for inventors “can help guide and fund” local inventors. “Once the invention is already in good position, it should be patented, and when the product is already there and the market is also ready, the obligation of the office of incubation will match the need of industry,” Vasquez explained. Vasquez added: “The inventors don’t have capital. All they have is wealth of intelligence. We should harness this genius together.” Just like Mr. Duterte, who is also a product of San Beda College, Vasquez expressed confidence that the President will look into their plight. “As Bedans, we try to solve problems in a simple way and we all love our country. One Bedan asking help from one Bedan.... Maybe he will hear us,” he said, as he expresses hope for his fellow inventors. “Who knows one day we can be a Bill Gates, Albert Einstein, we can be Galileo, “ he said. The FISPC has a showroom at the ground floor of Delta Building at the corner of West Avenue and Quezon Avenue. Pagayon said the showroom was put up to help show Filipino ingenuity, like various innovative products that are designed for fuel and energy conservation, environmental protection, water purification, alternative medicine, personal care and recreation. Antifungal soap, organic medicine and other organic products are also available. Pagayon said one of their objectives is to help local investors survive from lack of government support, as well as to generate, produce and market indigenous inventions and technologies; attain economic progress and industrial prosperity for the country.

A14 Monday, August 1, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

How can we ‘fix’ the rail system

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n President Duterte’s State of the Nation Address he said he will prioritize: the rehabilitation of existing rail lines, the construction of new railway lines across the archipelago and increase the number of trains on the Metro Rail Transit (MRT) 3 and operating speed from 40 to 60 kph. He also promised that he would fast-track these projects and finish before his six-year term ends. For those who spend several hours a day commuting Metro Manila’s gridlocked roads, this was a breath of fresh air. To fast-track these projects, the Department of Transportation and Communications (DOTC) announced it will accept unsolicited bids through the publicprivate partnership (PPP) scheme, allowing the private sector to build, finance and operate these projects to deliver infrastructure at no cost to the government. An unsolicited bid, by definition, is a proposal from the private sector without official bidding solicited by the government. This allows the private sector to determine the viability of projects, which will be then submitted to the government for approval. Once approved, the private sector will undertake the complete design, financing, construction and operation of the project. This comes as a change to the previous administration’s policy of preference for solicited proposals. That is why several unsolicited bids—San Miguel’s $10-billion Manila Bay airport and Metro Pacific’s $600-million MRT 3 Rehabilitation Project—were shelved. The reason for public bidding is to allow a more competitive and transparent process in awarding contracts and to seek more players to participate. While it would seem unreasonable to reject a proposal from the private sector, there is a good reason for being cautious and treading carefully in awarding such contracts. An example is the MRT 3 build-lease-transfer agreement signed between the former DOTC and Metro Rail Transit Corp. (MRTC) in 1997. Under the 25year agreement, the private company will build/maintain the system, while the DOTC will operate. The DOTC also pays rent, provides a guaranteed 15-percent return on investment, gives up commercial development rights at stations, and grants a sovereign loan guarantee. The DOTC and MRTC have been embroiled in legal battles while the system has significantly deteriorated, with dilapidated and overcrowded trains, non-functioning elevators and escalators, overcrowded stations and outdated and aging railway components burdened by the line’s overcapacity. Meanwhile, no new trains have been added and no significant upgrades have been made. A recent posting on social media of the MRT 3’s control room gives an insider’s view on how outdated the system is. An obsolete mainframe and interface computer inside a dirty and ill-maintained room controls the movement and speed of the trains. Commuters have correctly complained why the computer system has not been replaced despite using decades-old technology. While we welcome President Duterte’s openness to unsolicited proposals from the private sector to get the job done, we hope that the private entities entering these deals are better scrutinized so the Filipino people can get the better end of these deals. Since 2005

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Looking forward to an even better economy Atty. Jose Ferdinand M. Rojas II

RISING SUN

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ongratulations to President Duterte on his excellent first State of the Nation Address (Sona) that laid out with clarity the plans and programs of his administration for the next six years.

In his Sona that he delivered on July 25 at Congress, the President mentioned his vision for maintaining, and even further improving, the present robust state of our economy. “On the macroeconomic management,” he said, “my administration will continue and maint a i n c u r rent m ac roeconom ic policies, and even do better. We will achieve this through prudent fiscal and monetary policies that can help translate high growth into more and better job creation and poverty reduction.” According to the Philippine Statistics Authority, GDP growth for the first quarter of 2016 is at 6.9 percent, poverty incidence as of the first semester of 2016 is at 26.3 percent and the unemployment rate as of April 2016 is 6.1 percent. “By the end of my term,” said

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need to give everyone a chance for employ ment or business: “We must also invest in human capital and ensure equal access to economic opportunities. When employment is not an option, for instance, in extremely rural neighborhoods, entrepreneurship will be advocated.”

Reading PPP into the Sona By Alberto Agra

BusinessMirror is published daily by the Philippine Business Daily Mirror Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines. Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025. (Advertising Sales) 893-2019; 817-1351, 817-2807. (Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.

President Duterte, “I hope and pray to hand over an economy that is much stronger, characterized by solid growth, low and stable inflation, high dollar reserves and robust fiscal position.” He promised to pursue “tax reforms toward a simpler and more equitable and more efficient tax system that can foster investment and job creation. We will lower personal and corporate income tax rates…” Likewise, he said reforms are necessary “to ensure competitiveness and promote ease of doing business will be mandatory. Relaxing restrictions on the economy will be needed to make more investments to come and to develop labor-intensive industries, such as manufacturing, agriculture, and tourism shall be pursued.” The President emphasized the

The President emphasized the need to give everyone a chance for employment or business: “We must also invest in human capital and ensure equal access to economic opportunities. When employment is not an option, for instance, in extremely rural neighborhoods, entrepreneurship will be advocated.” His plan to boost the local business environment includes “addressing bottlenecks in business registration and processing, streamlining [the] investment application process, and [integrating] the services of various government offices.”

PPP Lead Continued from A1 At the onset, it must be underlined that PPP is not the end in itself. PPP is one of—not just the only means—many vehicles that may be used by the government to reach its development goals. PPP presupposes that government needs a “partner”. Government cannot realize its vision of society on its own. Gover nment c a nnot br i ng about “pover t y reduction,” a Sona-stated vision, by relying on its own resources. “Lasting peace” can only be achieved if basic services are delivered, some of which can be done through PPPs. PPPs can bring about a “ better economy” and “robust growth” at the national and local government levels.

PPPs, during the construction and operations stages, will surely facilitate “employment”. PPPs will not only create “economic opportunities” for the private-sector proponent but for the community, as well. “Competitiveness” among provinces, cities, municipalities, even barangays will be enhanced if these local governments promote PPPs. To fast-track development, PPP processes must be “streamlined”. Of the President’s Sona-listed projects, most, if not all, can be undertaken through PPPs. More PPP on “roads” like the Daang Hari-Slex Link, Naia Expressway and Cavite-Laguna Expressway are needed. Aside from the joint venture on the Cebu CityMunicipality of Cordova Bridge, national government agencies

The President’s Sonalisted projects, most, if not all, of which can be undertaken through PPPs. More PPP on “roads”, like the Daang Hari-Slex Link, Naia Expressway and Cavite-Laguna Expressway, are needed. Aside from the joint venture on the Cebu City-Municipality of Cordova Bridge, national government agencies and local governments, together with the private sector, can do PPPs on “bridges” and “interisland linkages”. and local governments, together with the private sector, can do PPPs on “bridges” and “interisland linkages”. “Tourism sites” and economic zones can be established through PPPs. In addition to the PPP School Infrastr ucture Project, other “soft” PPP projects like “harvest and postharvest,” “public health”

His plan to boost the local business environment includes “addressing bottlenecks in business registration and processing, streamlining [the] investment application process, and [integrating] the services of various government offices. Government financial institutions shall come up with out-of-the-box financing packages to capacitate our small and medium entrepreneurs.” Moreover, President Duterte assured the nation of the construction and rehabilitation of transport, energy and agricultural infrastructure to support and drive economic development. He identified the tourism sector as one of those that will benefit from the improvement of infrastructure, particularly with regard to greater accessibility brought about by a better system of roads and bridges. Working with industry and in unity, we can look forward to the fruition at the proper time of these strategies and other plans and programs that will enhance the Philippine economy and uplift the standard of living of the Filipino people. nnn

Atty. Rojas is vice chairman and general manager of the Philippine Charity Sweepstakes Office.

and “rehabilitation” facilities can be developed. Water-related projects are also needed. Concession agreements, like the Metropolitan Waterworks and Sewerage System concession arrangement, or build-operate-transfer law projects, like the Bulacan Bulk Water Supply project, can be replicated for “irrigation” and septage projects. It is also envisioned that PPPs can be the preferred strategy for “alternative transportation modes” like “ fer r y ser v ices,” “rails,” even monorail projects. Airports and “general aviation” facilities can be improved and rehabilitated through PPPs. To address the power gap, “power” and waste-to-energy projects can be implemented at various levels of government. Informationtechnology schemes, like the Automated Fare Collection System, for public Wi-Fi can be prioritized by the newly created Department of Information and Communications Technology. We are off to a good start. Let us all collectively sustain the momentum. Purposive partnership is the solution.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Monday, August 1, 2016 A15

Services by ROHQ to its Rate cuts are better than negative rates If reducing rates can parent company: VAT-able stimulate growth, why not keep going into negative or non-VAT-able? territory? The reason, as the Atty. Lorna Patajo-Kapunan

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legally speaking

hen a regional operating headquarter (ROHQ) based in the Philippines renders qualifying services to its affiliates, subsidiaries or branches outside the Philippines but the resulting goods from these services are directly exported to the ROHQ’s parent company outside the Philippines, which, in effect, means that the services were directly rendered by the ROHQ to its parent company, is this transaction subject to value-added tax (VAT)? Section 108 of the National Internal Revenue Code (NIRC) provides for the transactions subject to zero-percent rate of VAT. The processing, manufacturing or repacking of goods for other persons doing business outside the Philippines, which goods are subsequently exported, and the services rendered to a person engaged in business conducted outside the Philippines or to a nonresident person not engaged in business who is outside the Philippines, are subject to zeropercent VAT. It may appear that services rendered by the ROHQ based in the Philippines to its parent company outside the Philippines are subject to zero-percent VAT, but this is not true. The services rendered by an ROHQ based in the Philippines to its parent company outside the Philippines do not fall under the transactions subject to zeropercent VAT rate. In the case of Accenture Inc. vs. Commissioner of Internal Revenue (GR 190102, 11 July 2012), the Supreme Court ruled that “the recipient of the service must be doing business outside the Philippines for the transaction to qualify for zero-rating under Section 108[B] of the Tax Code.” Und e r R e pu bl ic A c t ( R A ) 8756, or the Omnibus Investments Code of the Philippines, an ROHQ is defined as a foreign business entity, which is allowed to derive income in the Philippines by performing qualifying services to its affiliates, subsidiaries or branches in the Philippines, in the Asia-Pacific region and in other foreign markets. In the decision of the Court of Tax Appeals (CTA) in the case of “Institutional Shareholder Services Inc., Philippine ROHQ vs. Commissioner of Internal Revenue” (CTA Case 7662, 03 June 2010), it held that, from the definition of ROHQ under the Omnibus Investments Code, the recipients of the qualifying services, to be rendered by ROHQ, are limited only to its affiliates, subsidiaries

or branches. It pointed out that the phrase “other persons doing business outside the Philippines” contemplated in Section 108 of the NIRC is deemed to pertain only to “affiliates, subsidiaries or branches” of the ROHQ as enumerated under RA 8756. The CTA further held that the parent company of an ROHQ may not be considered as an affiliate, subsidiary or branch for the simple reason that ROHQ and its parent company must be considered as one and the same entity for purposes of taxation. ROHQ is a mere administrative arm of the parent company, and through the establishment of an ROHQ, the parent company may now do business and derive income in the Philippines from the qualifying services rendered by the ROHQ to its affiliates, subsidiaries or branches. The mother company is considered as doing business in the Philippines through its ROHQ. The requirement for VAT zero rating that the recipient of the services must be other persons doing business outside the Philippines is not met. Thus, transactions between the ROHQ and its parent company do not fall under zero-rated VAT transactions. An ROHQ cannot be deemed to enter into “sale transactions” with its parent company since they are considered to be one and the same entity. Thus, there is no transaction where the zero-rated VAT may be applied. However, as a precautionary measure, it will be more prudent for an ROHQ having this kind of transaction with its parent company to request for a specific ruling from the Bureau of Internal Revenue, so that any issue may be formally and properly ruled upon based on its peculiar circumstances. This way, the taxpayer will have a concrete, valid and legal basis on how it shall treat and apply taxes. For comments, you may e-mail me at lpkapunan@kapunanlaw.com.

Turkey’s crackdown on the economy

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olitical turmoil in Turkey is putting new stress on an economy that was already coping with depressed export markets, weak investment and sagging business confidence. The economy has many strengths and great potential, but to make the most of these it also needs political stability, the rule of law and a commitment to international economic engagement. The July coup and its aftermath have put all three in doubt. President Recep Tayyip Erdogan prevailed against the coup-plotters, drawing on support from much of the political opposition. Turks rallied to the government in defense of democracy. From this position of strength Erdogan should make establishing the conditions for greater prosperity a main goal. At the moment the prevailing mood among investors is alarm. The lira plunged to a record low against the dollar and investors have dumped equities in the biggest sell-off since 2008. In a sweeping purge of suspected oppo-

nents, the government has dismissed tens of thousands of people from positions in the army, civil service, academia and judiciary. Dozens of media outlets have been ordered closed. The scale of these measures is extremely disturbing. In a new twist, this week the head of research at one of Turkey’s big financial firms was stripped of his license over a report on the impact of the attempted coup; he is now facing criminal charges. The head of the banking regulator said it disapproved of “reports that would turn expectations and the atmosphere negative.” Efforts to prohibit such reports are far more likely to do that than anything analysts might say. On Erdogan’s watch, the economy has made real progress. The proportion of people below the official poverty line has fallen from some 30 percent of the population in 2002 to less than 2 percent. Life expectancy, years of schooling, output and formal employment have all gone up at respectable rates. Bloomberg View

Paul Donovan

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onetary policy has become increasingly complicated. We have rising interest rates in some parts of the world. We have falling interest rates in other parts of the world. Some central banks have taken rates negative. For investors, it is important to understand how such changes in monetary policy affect the economy at large. Lower rates can boost economic growth in three ways. Traditionally, lower rates may encourage borrowing. This is old-fashioned supply and demand. If the price of borrowing goes down, the demand for borrowing goes up. The problem is that borrowing is not just about the price of credit. Borrowing also depends on confidence. Borrowers need to be confident about their future. Lenders need to be confident about the borrower’s future. If there is a lack of confidence then borrowing is not likely to be encouraged by falling interest rates. Lower rates may reduce saving. This is different from encouraging borrowing, because confidence in the future seems to play less of a role. If savers receive a lower return on their savings, their attitude may be “I might as well spend;

there is no point in saving.” There is an exception to this rule. If I am “saving up”—saving money to buy a car or for a holiday—then it will take longer to save the required amount if interest rates are reduced (therefore, I will delay my spending). Reducing interest rates will move money between different groups in society. Lower rates take income from people who have savings and give it to people who have debt. The fact that the Bank of England is likely to cut rates in August makes my father unhappy, because he has savings. The fact that the Bank of England is likely to cut rates in August makes me happy, because I have a variable interest-rate mortgage. The Bank of England is reducing my father’s income and increasing my income (clearly, I view this as

Swiss, Swedes and Danes have discovered and the Japanese may be about to find out, is that negative rates do not necessarily act as an economic stimulus. Negative interest rates are a tax on banks and large savers, and are, thus, a thinly disguised fiscal policy.

a good thing. My father does not share that view). If reducing rates can stimulate growth, why not keep going into negative territory? The reason, as the Swiss, Swedes and Danes have discovered and the Japanese may be about to find out, is that negative rates do not necessarily act as an economic stimulus. Negative interest rates are a tax on banks and large savers, and are, thus, a thinly disguised fiscal policy. Banks are legally required to hold reserves with the central bank. The central bank charges banks a negative rate of interest on those reserves. This creates a legal obligation to pay the central bank money. A legal obligation to pay a branch of the government money is commonly refer red to as a tax. If negative rates act as a tax,

then the economic stimulus of negative rates is the same as the economic stimulus of increasing a tax. Increasing taxes are not generally considered an economic stimulus. Banks can pass on negative rates to large customers, who have no choice but to hold cash in a bank. Small customers can avoid negative rates by holding physical cash. The increase in demand for high denomination bank notes in countries with negative interest rates indicates this demand for cash. Large bank customers may choose to try and reduce their cash holding in the face of negative rates. By spending or lending cash as their deposit rates turn negative, large bank customers may boost economic growth. So, reducing rates should be an economic positive—although how rate cuts impact the economy will vary. Taking rates negative is less clearly an economic positive. The stimulus of negative rates will depend on whether the disincentive to save can offset the effects of the tax that negative rates represent. Investors should bear all this in mind as interest rates continue to move around. Paul Donovan’s latest book The Truth About Inflation was published by Routledge in April 2015. Visit www.ubs.com/ pauldonovan for more research. Paul’s commentaries in the UBS series of documentaries on Nobel Laureates in economics is available at www.ubs.com/nobel.

Financial reporting of the Social Security System Lina J. Valcarcel

DEBIT CREDIT

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ometime in July the University of Philippines Virata School of Business (UPVSB and formerly UP College of Business Administration) had a partial celebration of its 100th anniversary featuring academic lectures on different subjects of interest. I attended one that dealt with government-owned corporations, which was the Social Security System (SSS). Dr. Helena Agnes Valderrama, a UPVSB faculty member, presented An Assessment of the Quality of Financial Reporting of the Social Security System. The study finds that, despite the unqualified opinion given the reports by the Commission on Audit (COA), there are inadequacies in the reporting practices of the SSS as regards receivables, investment property, and its pension and insurance liabilities.” The SSS reported unfunded liability of P1.22 trillion as of 2011.

At the end of the presentation, I reacted, not by focusing on the above finding but by questioning the basis of its audited financial report. According to the audit report of the COA, “the financial statements of the SSS have been prepared in accordance with Philippine Financial Reporting Stan-

dards [PFRS].” The Statements of Profit or Loss and Other Comprehensive Income for the year 2015 (and preceding years for that matter) report revenues as coming from members’ contribution and investment, and other income. Now, the PFRS defines revenue as the gross inflow of economic

benefits during the period arising in the course of the ordinary activities of an entity when those inflows result in increases in equity, other than increases relating to contributions from equity participants. In the above financial statements, members’ contributions form the major source of revenue of the SSS. The report showed the amount of P133 billion of contributions in 2015, as compared with P29 billion from investment and other income. I consider the above reporting of revenues faulty and misleading. For how can one consider members’ contributions as revenues as defined by PFRS? For private companies, revenues come from income-generating activities of the firm, such as sales of products or services. Any fund coming from owners would be considered as capital contributions. To consider the members’ contributions as revenues would be like receiving capital contributions and using the same to pay members for benefits. Is this not similar to a Ponzi pyramiding scheme? There are problems related to this. I will mention only one, for lack of space.

Such practice would hide the efficiency (or lack of it) of management’s ability to earn revenues from the investment activities of the SSS. This practice of including members’ contribution as revenues of the SSS would overstate the reported revenues. It would look as if the SSS was earning a lot of money when in reality it is not. In the above case, the SSS only earned P29 billion from income-generating activities, out of which, benefits of P63 billion were returned to members in different forms of benefits. If the intention were to pay off members’ benefits from contributions, the report should show that and not hide the shortage through misrepresentation. Lina J. Valcarcel is an emeritus professor in accounting at the UPVSB School of Business. She was executive director of UP Provident Fund for 14 years, from 2000 to 2014 This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@gmail.com

Neda clarifies report on ‘problematic’ ODA projects MAIL

Please e-mail your letters to the editor to oped@businessmirror. com.ph. Letters chosen for publication in this section are edited for brevity and clarity.

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his refers to the July 20 article of Ms. Cai Ordinario on the BusinessMirror web site (http://www.businessmirror. com.ph/2016/07/20/neda-2-problematic-oda-projects-caused-loanavailment-delays/). May we provide herewith some clarifications, and request that necessary corrections be made.

First, the headline: Neda: 2 ‘problematic’ ODA projects caused loan-availment delays. This is inaccurate, as there are actually 12 problem projects identified in the Calendar Year 2015 Official Development Assistance Portfolio Review Report. The first paragraph: “ T H E Nat io n a l E c o no m i c a nd De ve lopment Aut hor it y [Neda] named two ‘problematic’ official development assistance [ODA] projects that caused the government to extend t he loa n-ava i l ment pe riod due to delays and other implementation issues.” It seemed that the intention of the report is to discuss the 12 problematic projects, and since not all problematic ODA projects had extensions in loan-validity period, we suggest this paragraph to be

rewritten as follows: “The National Economic and Development Author it y [Neda] named twelve “problematic” official development assistance [ODA] projects that caused the government, in some cases, to extend the loan-availment period due to delays and other implementation issues.” The second and third paragraphs: “In the 2015 ODA Portfolio Review obtained by the BusinessMirror, the Neda said these projects contributed 50 percent of the country’s availment backlog in 2015.” “ T he ava i l ment bac k log reached $888.27 million in calendar year 2015. Some $444.47 million were attributed to these ODA projects.” Note that the $444.47-million backlog is attributed to the 12 problematic projects, and not only on the two projects referred

to in the headline. The last paragraph: “Projects that did not have availment backlogs were Participatory Irrigation Development Project; Community-Based Forest and Mangrove Management Project; and Italian Assistance to the Agrar ian Reform Community Development Support Program.” This is inaccurate since it would seem that only three projects did not have availment backlogs in the entire ODA portfolio in 2015, which is not the case. We suggest this statement instead: “Three of the 12 ‘problematic’ ODA projects did not have availment backlogs. These were....” Raymond Paul G. Pineda Monitoring and Evaluation Staff of National Economic and Development Authority

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Monday, August 1, 2016

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Business groups back Con-ass

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By Jovee Marie N. dela Cruz @joveemarie & Catherine N. Pillas @c_pillas29

“The legislators would be the better judge. They are, after all, elected public officials. Let’s accept what they have to do and let’s see how deliberations would be done in two to three years,” PCCI President George T. Barcelon said. Barcelon echoed the sentiments of Management Association of the Philippines (MAP) President Perry L. Pe, who also backed the amendment of the Constitution via Con-ass. “[Con-ass] is more pragmatic. Assembling the constitutional convention [Con-con] is ideal, but considering the constraints, Conass should be accepted,” Pe said. He noted that there will be safeguards to ensure the integrity of the process, such as tapping 30 to 50 advisers to help lawmakers who will constitute the Con-ass. “More or less, there will be an injection of fresh thoughts. We’re supporting the speaker on that,” Pe added.

Defending Con-ass

Leaders of the House of Representatives on Sunday vowed not to railroad proposals to hasten the country’s shift to a federal form of the government.

House Majority Leader Rep. Rodolfo C. Fariñas of Ilocos Norte said there’s no “inordinate fasttracking” of Charter change following the Duterte administration’s pronouncement that it prefers to do it via Con-ass instead of Con-con. “There’s no ‘inordinate fasttracking.’ It’s simply practical and plain common sense. A constitutional assembly would spend no more than P2 billion, while a Concon, from P6 billion to P7 billion, and that figure is only for the election of delegates,” Fariñas said. “Congress can earmark the estimated billions to be spent for a two-year Con-con to other productive uses, such as education and health, or perhaps even mitigation of traffic congestion in Metro Manila,” he added. Earlier, Liberal Party Rep. Edcel B. Lagman of Albay accused the House majority of installing a “fake opposition group” to expedite the push for federalism after the Duterte administration abandoned its Con-con plan for Con-ass. “The order of the day is inordinate fast-tracking with the hegemony of supermajorities assured,” Lagman said.

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he Philippine Chamber of Commerce and Industry (PCCI) threw its support behind the plan of Congress to convene into a constituent assembly (Con-ass) to amend the 1987 Constitution.

Fariñas agreed with House Speaker Pantaleon D. Alvarez, who said the savings from Con-ass could underwrite the plan of President Duterte to hike the salaries of government-security forces. “As echoed by A lvarez, the President desires an immediate increase in the salaries of uniformed personnel. In fact, the president, just a couple of days ago, said soldiers will immediately see an increase in their pay this month,” he said. “Apart from the savings, the Con-ass can complete its work in a year’s time, if the members of

both houses of Congress will study what existing provisions need to be amended or revised or new ones included in a new Charter,” Fariñas added. Budget Secretary Benjamin E. Diokno said a Con-con will take longer to organize. It will cost P7 billion to hold separate elections but it would cost “much less” if it can be synchronized with the barangay elections. “How many delegates will we elect? If it’s by district, then that’s going to be very expensive. You have to pay the salaries of the delegates and their staff, purchase vehicles. You need to organize a separate secretariat, rent office space, buy office supplies and equipment. And you cannot predict a definite timetable as to when it can complete its work,” Diokno said. He said this would be a “major overhaul” of the Constitution after 30 years, saying “my reading is that President Duterte

wants Charter change done as soon as possible. He has even said that if Charter change is completed and federalism is already in place in three to four years, then he is willing to step down.” Earlier, Alvarez said President Duterte now wants Congress to constitute itself into a Con-ass to amend the 1987 Constitution and jumpstart the country’s shift to a federal form of government, saying it is “cheaper and faster” than Con-con, which could cost up to P7 billion.

There are three modes of amending the Constitution—through Conass, Con-con or people’s initiative. Under Con-a ss, Cong ress, through its “constituent power,” constitutes itself into a body and would perform the task of amending the charter. Amending the Constitution via Con-con will require the election of delegates. Registered voters may also launch a petition to change the Constitution. It should be signed by 12 percent, or 6.6 million, of 54.4 million registered voters.

Congress can earmark the estimated billions to be spent for a two-year Con-con to other productive uses, such as education and health, or perhaps even mitigation of traffic congestion in Metro Manila.”—Fariñas