Businessmirror august 02, 2017

BMReports

Hedging vs risks: Can govt afford more debt?

By Bianca Cuaresma

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United nations

2015 environmental Media Award leadership award 2008

Conclusion

HILE economic managers of the current administration claim that the government has enough fiscal space for more debt—especially as the current administration vows to speed up infrastructure spending—global ratings agency Moody’s International Service said the country’s debt affordability will largely depend on its capacity to ramp up revenues with new reforms in place.

International credit watcher Moody’s Vice President and Senior Credit Officer Christian

People walk besides a building of the Bangko Sentral ng Pilipinas in Manila. Global ratings agency Moody’s International Service has noted the Philippines’s ability to borrow more is relative to the revenues the country can generate that, in turn, relies on the effect of a tax-reform program. NONIE REYES

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A broader look at today’s business n

Wednesday, August 2, 2017 Vol. 12 No. 293

PHL seeks more elbow room in setting rice tariffs

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By Jasper Emmanuel Y. Arcalas

@jearcalas

he Philippines could set the maximum tariff rate on rice at a range of 50 percent to 700 percent, reflecting the government’s intent to have a wide policy space in balancing the interest of farmers and consumers.

700 percent The bound tariff rate on rice proposed by Gloria MacapagalArroyo

This was evident in the stance of the Executive and the Legislative branches during the meeting of the House Committee on Agriculture and Food Technical Working Group (TWG) on the amendment of Republic Act (RA) 8178, or the Agricultural Tariffication Act, on Tuesday.

See “PHL,” A2

Continued on A2

@cuo_bm

UBER NEWS BRIEFING Damian Kassabgi (right), Uber Asia Pacific head of public policy; and Laurence Cua, general manager of Uber Philippines, lead the company’s news briefing on August 1. The Uber officials said ride sharing is flexible, with most drivers looking at Uber as an opportunity to earn additional income. NONIE REYES

WESM doing wonders for power sector

By Lenie Lectura

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@llectura

LEVEN years since it was launched in Luzon and seven years after in the Visayas, the Wholesale Electricity Spot Market (WESM) has promoted competition and transparency—and has continued to multiply investors—in the power sector.

WESM stakeholders Philippine Electricity Market Corp. (PEMC), National Grid Corp. of the Philippines (NGCP), the Department

PESO exchange rates n US 50.5020

of Energy (DOE), Energy Regulatory Commission (ERC), powergeneration companies (gencos), distribution utilities (DUs) and directly connected customers agree on this.

The Manila Electric Co. (Meralco), which partly sources its power requirements from the spot market, sees WESM as an enabler of a competitive and transparent market.

“WESM rates mirror actual market conditions and generally reflects the market. Information from the market is also useful in terms of

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Mine, mine, mine Teddy Locsin Jr.

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free fire

haven’t said anything about mining. Let me fix that.

Mining always takes out far more than it ever gives back.

But that is true of any economic activity. Except primitive agriculture by cavemen and buffalo hunting by Injuns. Even then, the buffalo nearly became extinct.

Minerals don’t grow back. After mineowners get the lion’s share of proceeds, nothing worth mentioning ever goes back to the earth or to the people in the mined-up places.

This is why mining must take several steps more than pure extraction. This is the polite way of saying scrapping off the thin fertile layer of the earth and leaving nothing behind on which anything can grow.

Continued on A10

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By Cai U. Ordinario

he Philippine economy is still on track to achieving its growth targets of 6.5 percent to 7.5 percent this year despite its slow start, Socioeconomic Planning Secretary Ernesto M. Pernia said.

In a presentation at the budget hearing on Tuesday, Pernia said, given the 6.4-percent GDP growth in the first quarter, attaining the high end of the target will require an average quarterly growth of 7.9 percent for the rest of the year, while meeting the 7-percent midpoint goal would require an average GDP expansion of 7.2 percent for the remaining quarters.

“So far, the country’s real GDP growth remains respectable, recording a 6.4-percent growth in the first quarter of 2017,” Pernia said. “With this, the country remains on track to meeting the midpoint of its full-year target of 6.5-percent to 7.5-percent GDP growth for 2017.”

Local economists agreed with

2016 ejap journalism awards

Manufacturers’ optimism falls to lowest since Jan

Pernia says 7% growth still doable for the year

Continued on A12

de Guzman told the BusinessMirror the government’s new Comprehensive Tax Reform Program (CTRP) will be crucial to providing the government the fiscal space needed to carry on more debt to finance its infrastructure ramp-up promise.

“The capacity of this government to carry more debt will ultimately depend on revenue performance, hence the administration’s focus on passing the Comprehensive Tax Reform Package,” de Guzman said.

“At the same time, debt sustainability is aided by the high rates of nominal GDP,” the Moody’s official added.

BusinessMirror

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@BcuaresmaBM

policy-making, and assists participants in terms of research and planning, and also analyzes current state of the market,” the country’s largest power-distribution firm said in an e-mail.

WESM is a venue for trading electricity as a commodity. It was created by virtue of Section 30 of Republic Act 9136, otherwise known as the Electric Power Industry Reform Act (Epira) of 2001. Similar to the stock market, WESM is where the power Continued on A2

hilippine manufacturers—apparently affected by the martial-law declaration and contraction in overseas demand—showed less optimism to grow their business in July based on the country’s latest Purchasing Managers’ Index (PMI) that fell to its lowest level since January, Nikkei and international think tank IHS Markit reported.

Still, the Philippines’s 52.8 PMI in July was the best in the Asean, followed by Vietnam’s 51.7. The other countries in the region are projected to have a contracting manufacturing sector based on their below-50 PMIs, particularly Thailand at 49.6, Myanmar at 49.1, Indonesia at 48.6, Malaysia at 48.3 and Singapore at 47.9.

The PMI is a composite index, calculated as a weighted average of five individual subcomponents. Readings above 50 signal an improvement in business conditions on the previous month, while readings below 50 show deterioration. The Philippine manufacturing sector, in particular, showed signs of softening demand in July.

“Although growth in new business inflows increased at a solid

PMI survey data showed that, while growth in output and new orders remained solid, both slowed from June. However, business optimism remained elevated, suggesting that companies expect the pullback in business activity to be transient.” —AW

rate, the latest reading showed a noticeable slowing from June and was well below the historical survey average. Anecdotal evidence suggested that marketing activity and new models underpinned the upturn, alongside higher demand for products such as electronics,” the organization said.

See “Manufacturers’,” A2

n japan 0.4581 n UK 66.7434 n HK 6.4663 n CHINA 7.5051 n singapore 37.2846 n australia 40.4117 n EU 59.8146 n SAUDI arabia 13.4679

Source: BSP (1 August 2017 )

BMReports BusinessMirror

A2 Wednesday, August 2, 2017

Hedging vs risks: Can govt afford more debt?

Continued from A1

The Philippines’s unconsolidated general government debt fell to 38.3 percent of GDP in 2016, from a recent peak of 47.8 percent in 2009, as supported by strong GDP growth and tighter fiscal policy.

Moody’s noted the Philippines’s improvement in its general government debt is bucking the trend of its similarly rated peers—whose unconsolidated general government debt has trended higher in recent years.

Government options

DE Guzman forecasts the country’s general government debt to fall to around 37 percent of GDP by 2017.

Moody’s definition of general government debt, as projected, strips out the government’s holdings of its own bonds in the Bureau of the Treasury’s (BTr) bond-sinking fund—holding an accounting difference with how the BTr computes its forecast for the national government debt.

De Guzman said the risks to their longer-term fiscal outlook still also depend on how revenue shapes up, especially with how the government intends to implement the new tax-reform package.

“In the absence of additional revenue that could be generated by [the] CTRP, the government faces

PHL. . .

Continued from A1

Rep. Gloria Macapagal-Arroyo of Pampanga noted that the Philippines is under pressure to convert the quantitative restriction (QR) on rice into tariffs, as it is the lone country that continues to implement it after South Korea and Japan have tariffied their import caps.

However, Arroyo said the Philippines should invoke its independent foreign policy and should consider binding its rice tariff at 700 percent to protect local farmers.

“We have an independent foreign policy, so we should interpret our agreements and commitments to our favor. These two other countries [South Korea and Japan] are violating the World Trade Organization [WTO] formula, and they are getting a range of 500 [percent] to 700-percent and are not yet sanctioned up to now,” she added. “Why are we now going to be so strict in the interpretation of ‘commitment’?

Let’s also be liberal, that’s why I’m proposing a 700 percent bound rate,” Arroyo said.

The lawmaker added she would include her bound-tariff proposal under a bill seeking to amend RA 8178, which she authored.

The Department of Agriculture’s (DA) had recommended a much lower boundtariff rate for rice at a range of 50 percent to 125 percent. Agriculture Undersecretary Segfredo R. Serrano said the figures were based on the DA’s initial estimates.

“We have had calculations using the formula, and we shall provide an updated document with these calculations for the

a choice between curtailing expenditure to keep deficits manageable and, on the other hand, maintaining spending at the expense of wider fiscal deficits and higher debt,” de Guzman said.

The House of Representatives passed the first package of the CTRP earlier this year and is currently being tackled in the Senate.

The President has also called for a speedy passage of the tax-reform program in both houses in his recent State of the Nation Address.

Moody’s has earlier expressed positive views on the tax-reform package, saying this is credit positive for the Philippines. Currently, Moody’s puts the Philippines at Baa2 with a stable outlook, noting that the country still collects less revenue than most of its similarly rated peers.

government, and will continue to make, will be allocated for productive expenditures, mainly in infrastructure, as what the Duterte administration is concentrating on.

“With lower debt-service burden, more and more of proceeds from borrowings are being allocated for productive expenditures, particularly infrastructure, as we ramp up spending to address infrastructure deficiencies with investments to amount to 5.3 percent of GDP in 2017,” it added.

Deciphering debt

THE international credit watcher also said although estimates of the tax reform’s revenue effect are still forthcoming, Moody’s expects that the country’s debt-affordability ratio will fall to less than 13 percent by 2018, from the 24.4 percent in 2010, should the bill pass into law later this year.

This is, however, still materially above the 8.5-percent median debt-affordability ratio amongst Baa2-rated sovereigns.

The borrowings made by the

NON-GOVERNMENTal group Freedom from Debt Coalition (FDC) said to fully understand the country’s debt ecosystem, an audit is required.

A debt audit is a process to fundamentally decipher the country’s debt, FDC President Eduardo C. Tadem told the BusinessMirror through electronic mail.

“It will look into context and circumstances surrounding the transactions, process of transactions and finalization of debt contracts, content of the contracts, purpose of the debt, how the funds were actually used, impacts of the policies and projects funded by the debt and impact of the conditionalities accompanying the debt contracts,” Tadem explained.

“The debt-audit initiatives aim to develop a critical, comprehensive,

information of the committee in agriculture and food and the TWG [technical working group],” Serrano added during the meeting on August 1. “I think the numbers are ranging from 50 [percent] to around 100 [percent] to 125 percent,” Serrano said, referring to the tariff-equivalent formula provided under Annex 5 of the WTO Agreement on Agriculture (AoA).

Annex 5 of the AoA states that the tariff equivalent of converting any nontariff measures shall be based on the difference between the domestic price and international price (cost, insurance and freight unit value or CIF) of the commodity for 1986 to 1988.

Paragraph 10 of the Annex 5 states that the tariff equivalent coming from the formula “shall be bound in the Schedule of the Member concerned”. Bound tariffs are maximum tariff rates that a WTO member-country could impose on a certain commodity.

The authority to set bound tariffs is vested in Congress. But under the Customs Modernization and Tariff Act, the President, upon the recommendation of the National Economic and Development Authority, has the power to modify the tariffs applied on Philippine imports.

During the meeting of the TWG, Serrano also urged lawmakers to prioritize the conversion of the QR into tariffs so as not to prolong the period that the Philippines is in breach of its commitment to the WTO. “Even though the executive order [EO] of the President has removed the motivation from our negotiating partners, that doesn’t guarantee that no member of the WTO will sue because we are in breach of our

obligation,” he said. “Therefore, the No. 1 priority would be tariffication, and we may have to postpone other peripheral issues for later legislation or bills.”

The Philippines is now under pressure to convert its QR on rice into ordinary customs duties after its waiver on the special treatment on rice expired on June 30.

The WTO General Council approved the waiver, which allowed Manila to keep its rice QR until June 30, on the condition that the Philippines will subject its rice imports to ordinary custom duties by July 1.

“At the expiration of this waiver, and no later than June 30, 2017, the importation of rice shall be subject to ordinary customs duties in accordance with paragraph 10 of Annex 5, Section B, of the Agreement on Agriculture,” the WTO General Council decision read.

However, in an earlier COA meeting in Geneva in March, the Philippines informed WTO members that it is facing delays in converting the QR due to the nonamendment of RA 8178, which imposed the import caps on rice indefinitely. As a sign of “goodwill” to its trading partners, Duterte signed EO 23 last month, extending the concessions made by the Philippines in securing the waiver in 2014.

The temporary modification of mostfavored nation-tariff rates is effective until June 30, 2020, or until such time a law amending certain provisions relating to rice in RA 8178 is enacted, whichever comes first.

“The EO of the President is good, because we will preserve the concessions so there would be no motivation for our negotiating partners to sue us,” Serrano said in an earlier interview.

Revenue effect

participatory and transparent examination of the debt problem with the end in view of producing far-reaching and comprehensive systemic solutions and formulating immediate policy proposals and advocacy platforms based on the findings.”

Furthermore, FDC said, the debt audit is a method to evaluate the country’s debt problem, policies, existing laws and institutions that impact on the state’s borrowing tack. “It [audit] is useful in identifying relevant structural flaws and deficiencies that exacerbate, compound and perpetuate the debt problem,” Tadem said.

He added the debt audit is expected to create more fiscal space for the government and lead to reforms in public fiscal policy.

The reforms include renegotiating, canceling or repudiating, based on widely accepted principles, standards and procedures, debts proven to be illegitimate.

Likewise, FDC expects the audit would lead to the institutionalization and implementation of more prudent, democratic and responsible sovereign lending and borrowing policies.

“It would also redound to the benefit of the Filipino people in terms of potentially greater revenue streams for immediate and strategic development needs,” Tadem said. With Rea Cu

Manufacturers’. . .

Continued from A1

The martial law imposed in Mindanao has also been said to affect sales, according to surveyed firms.

There was also a noted pullback in overseas demand from June, with new export orders rising at the weakest pace since February.

The slower increase in new sales was matched by a similar trend in production and resulted in a slower employment growth during the month.

But while the latest reading is the slowest for the country since January, the organization expressed optimism on the local manufacturing industry, saying the number “still indicated a robust improvement in the health of the sector”.

IHS Markit economist Bernard Aw also said the diminished July PMI is expected to be “short-lived”.

“PMI survey data showed that, while growth in output and new orders remained solid, both slowed from June.

However, business optimism remained elevated, suggesting that companies expect the pullback in business activity to be transient,” the economist added.

Bianca Cuaresma

Faeldon. . .

Continued from A12

quick to pin the blame on another unqualified official under their command and handpicked by them whose fault is that he wears a different uniform,” Barbers said. “ These developments show that they are not fit for the job.

Yet, they have the balls to tell the Speaker [Alvarez] that the longtime employee whom he endorsed for promotion is not qualified.

Look who’s talking,” he said, referring to the endorsement of Alvarez to promote a BOC official.

But Faeldon said only President Duterte can fire him. “I am a soldier. I do not treat this position as a job; it is a mission. And a soldier does not quit from his mission, but a soldier can be fired. So let the President fire me.”

Meanwhile, Alvarez, in interview, backed the calls for Faeldon’s resignation. He also described the Customs chief as “grossly incompetent”.

“Well, I support the call of resignation that Chairman Ace Barbers is pushing for because, if I were in his place, I would definitely resign if there’s still a semblance of shame in me,” Alvarez said.

www.businessmirror.com.ph

WESM doing wonders for power sector Continued from a1

generators sell their excess capacities not covered by contracts, and where the customers buy additional capacities on top of their contracts.

The WESM commenced commercial operations in the Luzon grid on June 26, 2006. Four years into the commercial operations in Luzon, the Visayas grid was integrated into the WESM and commenced commercial operations on December 26, 2010. At present, the WESM in Mindanao is under trial.

Meralco Assistant Vice President Joe Zaldarriaga said that apart from promoting acountability, it also demonstrates transparency, as the rate culled from the WESM serves as indications of relevant power costs. “The effectivness of [the] WESM demonstrates and proves that allowing the market to operate freely ultimately benefits electricity consumers,” he said in an interview.

For consumer group Laban Konsyumer Inc. the WESM is helpful for both the consumers and the industry players. “Overall, yes, it is benefiting them. The spot-market technical regulations are transparent, and plants are able to tender competitieve prices, whether off-peak or peak hours,” said the group’s president Vic Dimaguiba, a former trade undersecretary, in a text message.

The chalenge, however, is to transform the WESM as the sole and exclusive marketplace of electicity, he added. “Thus, there is a necessity to change the law to expand the WESM universe,” Dimaguiba pointed out.

How the WESM works

Power generators submit online hourly energy offers through the Market Management System (MMS). The offers must include the volume of energy capacity and its price (for example, 100 megawatts [MW] for P10 per MW).

These offers are submitted by accessing the Market Participant Interface of the MMS through the generator’s computers installed with digital certificates.

The PEMC, which acts as the Market Operator that administers the operation of the WESM, matches the offers of generators with the demand of customers through the MMS. The bids are automatically ranked from the lowest price to the highest, until the required amount of power is met.

The last offer to fit into the power requirement becomes the market-clearing price. All accepted offers for that hour, regardless of initial quotations, would be paid at clearing-price level. Since the WESM is a 24/7 market, the trading cycle simply repeats every hour, and pricing tends to differ each time.

Prices of electricity traded in the WESM are determined based on the ERC-approved Price Determination Methodology. The rates are driven by market forces, inlcuding demand conditions.

From the initial WESM membership of six participants in June 2006, wholesale-market participation now stands at 280, or a fiftyfold increase in market membership.

For Aboitiz Power Corp., the WESM “is extemely valuable”.

“It offers a venue for all parties to trade shortages and excesses. It is a very good indicator of supply and demand. It is also a clear indicator of price that can be traded,” company President Antonio Moraza said in a text message.

AC Energy Holdings, Inc. President John Eric Francia, commented that the WESM “is serving its purpose very well”, particularly in periods of oversupply. “The fact that we have reserves shows that the market is working. Despite outages in the Malampaya gas facility, earthquakes, [the] shutdown of Sual plant…it goes to show that we’re a maturing market,” he said in a text message.

Lowest WESM price

WESM prices plummeted to sixyear lows in January, as more customers sourced power from the spot market.

According to the PEMC, the effective settlement spot prices (ESSPs) plunged to P1.90 per kilowatt-hour (kwh) for the January billing period, the lowest since January 2011. ESSPs refer to the average prices paid by wholesale customers for energy purchased from the spot market.

The resulting prices resulted in customer confidence, thereby augmenting their supply sourced from the WESM, where wholesale customers sourced 23 percent of their electricity requirements for the January 2017 billing period.

The PEMC said this was the highest percentage that customers sourced from the WESM since December 2006. “We believe this shows competitive pricing being given by [the] WESM,” PEMC Corporate Planning Division Manager Isidro Cacho said.

Over the past three years, WESM prices have been steadily declining —from P5.58 per kwh in 2014, P4.46 per kwh in 2015 and P3.33 per kwh in 2016, PEMC data showed. The decline in prices was due to the notable market reforms and developments that ushered in transparency and competition in the electric-power industry.

“The WESM has been an aid to the economic growth of the country and developments in the electricpower industry. More than the competition, supply augmentation, investment simulation and advancements that the WESM has contributed in nation-building, the WESM boasts years of integrity through transparency,” said PEMC President Melinda Ocampo.

Price cap

The PEMC assures that there won’t be a repeat of the 2013 record-high WESM price because mitigating measures have been put in place to prevent abnormal price spikes.

“There is a threshold that will prevent higher WESM prices,” Ocampo said.

The WESM’s primary offer cap was lowered to P32 per kWh, from P62 per kWh, in a bid to prevent excessive price spikes. It can be recalled that WESM prices soared by P4.16 per kWh in December 2013 as a result of the Malampaya natural gas field shutdown. Besides the primary cap, a secondary cap was implemented to further protect consumers from excessive price spikes triggered by supply tightening.

Called the pr ice-threshold mechanism, the P6.245 per kWh secondary cap kicks in once an average threshold of P9 per kWh is reached over a 168-hour period. “Actually, the price caps were made permanent, but there is a colatilla that there will be a continuing review. There is a provision that there will be a review, so depending on the situation, they will study it,” Ocampo said.

The ERC is currently evaluating if there is a need to adjust the price ceiling on power traded at the spot market. This, after the DOE raised the possibility of further lowering the secondary price cap. “We are reviewing how to lower the secondary price cap in the WESM with ERC,” said Energy Undersecretary Felix William B. Fuentebella.

The price cap is the highest offer that sellers could give when they sell their electricity to the market.

When sought for comment, ERC Spokesman, lawyer Rexie Digal said there is an ongoing review on the price cap, including the primary cap set at P32 per kWh. “Given that the present offer price cap and secondary price cap were determined based on 2014 data, the commission is already in the process of reviewing these levels using the most recent available input parameters and update them if necessary,” Digal said in a text message. To be continued

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DOJ sets hearing of drug charges vs Lim, 7 others

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HE Department of Justice (DOJ) has ordered businessman and suspected drug lord Peter Lim to answer the illegal-drugs charges filed against him and several others by the Philippine National Police-Criminal Investigation and Detection Group (PNP-CIDG).

Aside from Lim, also ordered to respond to the complaint filed by the PNPCIDG are Rolan “Kerwin” Espinosa, convicted drug lord Peter Co, a certain Marcelo L. Adorco, Max Miro, Lovely Adam Impal, Ruel Mangalindan and Jun Pepito, who are all facing a complaint for alleged violation of Section 26 (b) of RA 9165 or the Comprehensive Dangerous Drugs Act. Section 26 (b) is an attempt or conspiracy for the sale, trading, administration, dispensation, delivery, distribution and transportation of any dangerous drug and/or controlled precursor and essential chemical. The complaint was filed on July 5, and the DOJ has set the preliminary investigation of the case on August 14.

The preliminary probe will be headed by Assistant State Prosecutors Aristotle Reyes and John Michael Humarang.

Justice Secretary Vitaliano N. Aguirre II earlier issued an immigration lookout bulletin order (Ilbo) against the accused.

An Ilbo is different from a court-issued hold departure order since the former only directs the Bureau of Immigration to be on the lookout for the subject and to verify the status of a case against the subject person and not to restrict an individual from leaving the country.

However, a person subject to the Ilbo should seek an allow departure order from the justice department to be allowed to leave. Joel R. San Juan

Editor: Vittorio V. Vitug • Wednesday, August 2, 2017 A3

Govt to ‘waste’ ₧1B with postponement of barangay, SK polls–Comelec official

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By Joel R. San Juan

@jrsanjuan1573

HE Commission on Elections (Comelec) warned on Tuesday that the government is likely to lose almost P1 billion in government funds if lawmakers would decide to postpone anew the barangay and Sangguniang Kabataan (SK) elections in the middle of the poll body’s preparations.

In a media forum, Comelec Spokesman James B. Jimenez admitted that the Comelec is delaying its schedule of preparations for the barangay and SK elections to avoid government funds being wasted.

“We may reach about P1 billion because we are not just talking about the actual ballot printing.

We are also purchasing supplies, like fingerprint taker, ballot boxes.

These are included in our costs,” Jimenez disclosed.

The barangay and SK elections are scheduled on October 23, 2017.

In Comelec Resolution 10177, the poll body set the election period

from September 23 to October 30 this year.

The filing of certificates of candidacy will be from September 23 to 30.

The campaign period for candidates will be from October 13 to 21.

“We are trying to minimize the possibility of public funds going to waste,” Jimenez added.

The poll official said this is why they are asking lawmakers to decide whether they would postpone or order the elections to proceed.

“The ‘deadliest’ deadline is the second week of August,” Jimenez said, adding they may have no other option but to push through

AFP holds psychosocial drills for Marawi’s young refugees

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River-ferry quandary

Jose Antonio E. Goitia (left), newly appointed executive director of the Pasig River Rehabilitation Commission, gestures as he opens the news conference on the state of the Pasig River at the Sulo Riviera Hotel in Diliman, Quezon City, on Tuesday, with his deputy Gregorio M. Garcia. Goitia said it may take yet another three months to restore the Pasig River ferry commuter service due to lack boats. Nonoy Lacza

Rightsizing program in bureaucracy to affect 10K to 20K state workers

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he chairman of the House Committee on Appropr iations on Tuesday admitted that 10,000 to 20,000 state workers will be affected by the initial implementation of the government rightsizing program.

In a news briefing, National Unity Party Rep. and Panel Chairman Karlo Alexei Nograles of Davao City, however, said the rightsizing program does not necessarily mean that all of the government employees will immediately lose their posts.

“Now, the 200,000 state workers that will allegedly be affected (by the program), not all of them will be affected. If ever, about 5 [percent] to 10 percent of the said number will really be affected by the rightsizing,” he said.

Under the rightsizing law, Nograles added a technical working group (TWG)will be created to scrutinize and study the agencies and offices that will be affected.

He said the study of the TWG will be then submitted to a committee, composed of the Department of Budget and Management (DBM), the Executive Secretary, the National Economic and Development Authority and the Civil Service Commission.

“This committee will provide the final recommendation that will be submitted to President Duterte for final decision,” he added.

In anticipation of the enactment of the proposed Rightsizing the National

with the printing of ballots if there is no decision yet by that time from Congress.

“We will pursue the ballot printing whatever happens by the second week of August, except if they already come out with a decision,” he said.

It can be recalled that separate bills have been filed in Senate and House of Representatives seeking the postponement of the barangay and SK elections to October 2018 and May 2020, respectively.

The bills were filed following President Duterte’s statement, saying that he was inclined to postpone the process.

Government Act, Nograles said some P10-billion fund was also allotted for its initial implementation under 2018 national budget.

“There are funds allotted for the rightsizing program in the 2018 budget under the pension and gratuity fund. In case the rightsizing bill is enacted into law by 2018, the DBM has prepared for its implementation.

If I’m not mistaken, it’s P10 billion under the pension and gratuity fund,” he added.

“In fact, those who will be affected will be placed under a training pool, which will retool and retrain them for deployment to another government office. There is another option wherein they could receive a separation package offered by the government through this rightsizing bill.

This is optional, this is not firing out, this is not mass layoff. This is not downsizing. We are just correcting the bureaucracy to make it leaner and trimmer, thus making delivery of public service more efficient,” he said.

For his part, Budget Secretary Benjamin E. Diokno assured lawmakers that teachers and health workers w ill not be affected by rightsizing program.

The rightsizing bill, certified as urgent by Duterte, was approved last week on the third and final reading by the House of Representatives.

Nograles, the primary author of the proposed rightsizing law, said his panel will conduct a performance au-

dit on all government agencies so that they could determine if the funding allotted to them in 2017 were put to good use.

“We cannot keep on funding agencies that are perennial underperformers,” Nograles said.

Meanwhile, Party-list Reps. Antonio Tinio of ACT Teachers and France Castro opposed the approval of House Bill 5707 or the Government Rightsizing Bill.

Instead of answering the just demand of government employees and workers for salary increase and regularization, they said the government, through rightsizing, will only effect massive layoffs, retrenchment and displacement, and worsen contractualization.

The lawmakers, citing the DBM, said 16 percent of the 1.6 million total government positions—or 255,295 state workers—will be affected in the first year alone.

“Rightsizing will further deteriorate public services, since necessary personnel complement in frontline offices will be thinned. Those who will remain in government service, including teaching and medical positions, which allegedly will not be affected, will not be spared, as they will be forced to shoulder heavier workloads,” Tinio said.

The bill covers all agencies of the Executive branch, including departments, bureaus, offices, commissions, boards, councils and all other entities attached to or under

their administrative supervisions, government-owned or -controlled corporations (GOCCs) not covered

by Republic Act 10149, or the GOCC Governance Act of 2011.

It provides for the optional adoption of the rightsizing program by the Legislature, the Judiciary, the Constitutional Commissions, the Office of the Ombudsman and local government units.

Under the bill, the President is granted the authority in the rightsizing of the operations of the Executive branch to pursue functional shifts/modifications; to undertake organizational actions; to undertake other functional/organizational actions as necessary, consistent with the policies, principles, frameworks and standards of the Act; to develop and provide safety nets, including their implementation strategies, for employees of departments/agencies who may be affected by the government’s rightsizing efforts; and to formulate an organizational development program to strengthen the institutional capacity of the agencies and improve productivity of employees.

Earlier, Duterte asked Congress to pass the rightsizing bill as the departments, agencies and other offices under the national government has reached 186 from just 176 in 2000.

He also said the government work force currently stands at 1.5 million positions compared to just 1.1 million in 2000. Jovee Marie N. dela Cruz

he military and social-service workers jointly administered on Monday psychosocial exercises to at least 71 children whose families were among those displaced by the conflict in Marawi City.

Armed Forces Western Mindanao Command Spokesman Capt. Jo-ann Petinglay said the series of activities for the young refugees, aged from 3 to 12, was held at the Lanao del Sur provincial social hall.

A combination of fun games, artwork, socialization and entertainment was conducted to address the stress experienced by the children affected by the conflict in the city.

Petinglay said the children were temporarily sheltered at the Lanao del Sur capitol evacuation center.

Combined personnel of the Joint Task Groups Ranao and Tabang were among those who mingled and played with the children.

“Despite the language gap, beneficiaries were noticed genuinely laughing and enjoying the series of activities and the interactions,” Col. Tom Sedano of the Joint Task Group Tabang said.

“Most of the instructions were done through sign language so that the kids will be able to understand the mechanics of the activity. The ultimate goal is for them to enjoy and to have fun,” he added.

Petinglay said a 7-year-old boy claimed he was happy when he was asked how he felt about the activity.

The psychosocial activities were administered to help the children refugees in evacuation centers cope up with their current situation and divert their attention from the stressful environment to a fun and enjoyable situation even for a short period of time.

“We want to take part in the initiatives of the government and concerned stakeholders in assuring the protection and welfare of the civilians who are caught in the crossfire,” said Brig. Gen. Ramiro Rey, commander of the Joint Task Group Ranao.

“Programs that benefit the evacuees are currently being implemented, manifesting the sincerity of the government and the military in liberating the besieged city,” he added.

ML justification

The human-rights watchdog Karapatan, meanwhile, has scored the Duterte administration for rounding up Marawi evacuees and tagging them as members of the Islamic State of Iraq and Syria (ISIS) in order “to justify continued martial law [ML] in Mindanao.”

Karapatan, Kalinaw Mindanao, Gabriela and other national and local organizations joined the Second National Interfaith Humanitarian Mission among Marawi evacuees from July 27 to 29.

Aside from conducting psychosocial intervention programs, medical missions and relief distribution, the team also documented human-rights violations under the context of martial law’s implementation.

“Information gathered during the mission indicate a worrisome trend wherein State forces start rounding up evacuees in evacuation centers to wrongfully present them as ISIS members,” Karapatan Secretary-General Cristina Palabay said.

“This is martial law’s new phase—the phase of manufacturing enemies to justify the extension of martial law. The level of repression is further heightened as military elements are seen loitering around in evacuation centers, becoming defensive and even aggressive when the word ‘justice’ is so much as spoken by either the mission team or the evacuees,” Palabay said.

“We seriously question information about the numbers presented by the military, and about the real security situation in Marawi. The Duterte administration cannot forever hide behind the veil of ‘national security’, especially with the evacuees’ own perceptions that civilian casualties are far worse, the numbers sanitized and recalibrated to appease public discontent. The growing number of illegal arrests and other forms of human-rights violations inflicted against those already displaced by the conflict are proof of State terror. Such brazen abuses ought to be condemned, stopped, and their instigators brought to justice,” she said. Rene Acosta with Marvyn N. Benaning

Economy

A4 Wednesday, August 2, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

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Factory-worker demand in Metro Manila rose 227.9% in Q1–PSA

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By Cai U. Ordinario

@cuo_bm

he demand for factory workers in Metro Manila nearly quadrupled in the first quarter of 2017, according to the Philippine Statistics Authority (PSA).

The surge in manufacturing vacancies contributed to the 45.18 percent in job vacancies in agricultural and nonagricultural firms in the first quarter of 2017.

PSA data showed that total job vacancies reached 82,772 in the January-to-March period this year, compared to only 57,015 in the fourth quarter of 2016.

The number of job vacancies in the manufacturing sector increased to 8,896 in the first quarter of 2017, a 227.9-percent growth from 2,713 recorded in the last quarter of 2016.

The PSA said the higher demand for workers was most evident in the industry sector in general, which almost tripled at a growth of 130 percent in the first quarter of 2017, compared to the same period last year.

Job vacancies in industry increased to 13,088 in the first three months this year, from 5,690 in the October-to-December period in 2016.

Labor turnover

Meanwhile, the PSA said the

82,772 The total job vacancies reported by the PSA in the January-to-March period, compared to 57,015 in the fourth quarter of 2016

labor turnover in the National Capital Region sustained a positive growth at 1.27 percent in the first quarter of 2017.

Data showed that this is higher than the posted 0.96 percent in the same period in 2016, but lower than the registered 3.36 percent in the previous quarter.

“This infers that 13 workers per 1,000 employed were added to the work force in the 13,099 total enterprises, with an estimated employment of 2,431,994 during the period,” the PSA said.

The accession rate of 8.79 percent indicates that there was an addition of 88 workers per 1,000 employed

to the enterprise work force, due to either expansion or replacement of separated workers.

In contrast, separation rate at 7.52 percent implies that for every 1,000 employed, 75 workers were either laid off or quit their jobs.

The agriculture, forestry and fishing sector obtained a positive labor- turnover rate of 2.5 percent, in which accession and separation of workers were recorded at 6.01 percent and 3.5 percent, respectively.

The highest labor-turnover rate for the period was recorded in the industry sector at 2.84 percent, with an accession rate of 8.53 percent and separation rate of 5.69 percent.

All industries under this sector posted employment gains where the most significant was in mining and quarrying (14.88 percent).

In the manufacturing sector, the growth was 3.89 percent, while in the water supply, sewerage waste management and remediation activities, the growth was 2.15 percent.

The services sector, meanwhile, posted the highest accession rate and separation rate throughout the period at 8.86 percent and 7.92 percent, respectively.

However, among the three major sectors, services recorded the lowest labor-turnover rate at 0.94 percent.

The sector was the only one that had industries with negative labor-turnover rates, though very minimal, at 0.11 percent (administrative and support-service activities) and 0.89 percent (other service activities).

From trash to cash An elderly craftsman working at what used to be called the Smokey Mountain in Tondo, Manila, transforms scrap paper into necklaces and bracelets that are exported to New Zealand and other foreign markets. The Smokey Mountain once stood as the country’s symbol for poverty and urban degradation. NONIE REYES

Bottom 30 households bore brunt of higher inflation in Q2

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igher cost of food and housing caused the poorest Filipinos to experience higher inflation in the second quarter of 2017, according to the Philippine Statistics Authority (PSA).

Data showed that inflation for the bottom 30 percent of income households at the country level increased by 2.8 percent in the second quarter of 2017, the same rate it posted in the first quarter of 2017 and a two-year high.

The PSA noted that the food, beverages and tobacco (FBT) index increased 2.9 percent, and housing and repairs (H&R) increased 2.1 percent during the period.

The increase in food prices alone reached 2.8 percent in the second quarter of 2017, higher than the 2.7 percent posted in the first quarter and 1.3 percent in the second quarter of 2016.

The PSA said the increase in food inflation was driven by higher rice prices, which grew 1.2 percent; fish, 7.3 percent; and meat, 4 percent.

Meanwhile, the quarter-onquarter growth of the consumer prices for the bottom 30 percent income households at the national level slowed 0.4 percent during the period in review.

This was primarily brought

2.8% The increase in the level of inflation in second quarter of 2017, the same rate it posted in the first quarter of 2017 and a two-year high

about by cheaper fuel, light and water (FLW) at 0.1 percent. Moreover, lower mark-ups were registered in the indices of FBT at 0.5 percent and H&R, 0.5 percent.

The increase in inflation experienced by the poorest in the National Capital Region or Metro Manila slowed in the second quarter of 2016.

The slowdown in price increases in Metro Manila reached 5.2 percent in the second quarter of 2017, compared to 5.4 percent in the previous quarter and 0.4 percent in the second quarter of 2016.

The PSA said slower annual gains were noted in the indices of FBT at 5.3 percent; H&R, 0.2 percent; and FLW, 7.5 percent. The rest

of the commodity groups exhibited higher annual increases.

In areas outside of NCR, the poorest Filipinos saw inflation increase by 2.8 percent. This was higher than the 1-percent year-onyear increase recorded in the same period last year.

The PSA said higher annual upticks were seen in the indices of FBT at 2.9 percent and H&R at 2.2 percent.

The annual growth of the food alone index picked up by 2.8 percent during the quarter. In the previous quarter, it exhibited an annual rate of 2.7 percent and in the same period in 2016, 1.3 percent “Nine regions had higher annual growths during the quarter with ARMM [Autonomous Region of Muslim Mindanao] still registering the highest annual rate of 5.7 percent. Meanwhile, the lowest annual inflation of 1.1 percent remained in Region VI [Western Visayas],” the PSA said.

For the second quarter, the PSA said the data did not include information collected from Lanao del Sur due to the peace and order situation in Marawi City.

The computation of the consumer price index for the second quarter of 2017 excluded Lanao del Sur and Marawi City. Cai U. Ordinario

New agreement seen boosting PHL, Czech Republic economic cooperation

By Catherine N. Pillas @c_pillas29

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he Philippines and the Czech Republic have recently signed an economic cooperation agreement, signaling further cooperation on trade, industry, and investments.

In a news statement issued on Tuesday, Trade Secretary Ramon M. Lopez announced the signing of a cooperation agreement on economic development, outlining key areas of significance for both countries.

“The strengths and resources complementarities have long been untapped. It is our desire to be with alternative markets and forge new partnership,” Lopez said in the same statement.

In particular, there are industry complementaries on technology-oriented industries, auto and aerospace parts, electronics, agriculture, energy, transportation and tourism.

Other areas of cooperation include partnership of micro, small and me-

dium enterprises, specifically in the areas of food and beverage, agriculture and agri-processing, energy and defense and security solutions.

On trade, specifically, there is a potential for the Philippines to increase exports of midpriced apparel to the Central European country, as well as for frozen marine products, dried fruits and vegetables.

These products are eligible under the European Union Generalized Scheme of Preferences Plus that allows entry of goods at zeropercent tariff rate.

Meanwhile, on investments, opportunities for promotion are in the areas of information-technologybusiness-processing management, knowledge-process outsourcing, processed and specialty food, energy, design-driven products and aerospace/aeronautics.

While the Philippines continues to pursue a free-trade agreement with the EU, the renewed engagement with the Czech Republic aligns with

LOPEZ: “The strengths and resources complementarities have long been untapped. It is our desire to be with alternative markets and forge new partnership.”

the government’s strategy of rebalancing trade relations with nontraditional partners with an independent foreign policy.

Considering these opportunities, the economic cooperation paves the way for the creation of a permanent platform for engagement, or a Philippine-Czech Republic Joint Economic Cooperation.

In 2016 the Crezh Republic, the country’s 31st trading partner (out of 226); 28th export market (out of 213); and 33rd import supplier (out of 207), with total bilateral trade amounting to $283 million.

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Editor: Jennifer A. Ng • Wednesday, August 2, 2017

A5

PHL meat imports down 13% in H1

By Jasper Emmanuel Y. Arcalas

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ARMM cassava production continues to expand

@jearcalas

he country’s meat imports in the first half of 2017 declined by nearly 13 percent to 280,269.056 metric tons (MT), from 322,013.273 MT a year ago, according to latest data from the Bureau of Animal Industry (BAI).

Data obtained by the BusinessMirror from the BAI showed that pork accounted for almost half, or 47.31 percent, of meat products purchased from abroad during the period. On an annual basis, the country’s pork imports declined by 9.70 percent to 132,622.608 MT. The bulk of pork imports during the period were offals, which accounted for 43 percent of the total volume. Purchases of imported pork offals reached 57,014.272 MT, 7.24 percent lower than the 61,462.927 recorded last year.

Data from the attached agency of the Department of Agriculture also showed that chicken was the second-most bought meat from abroad, accounting for 31.57 percent of total imports. Chickenmeat imports during the period fell by 20.31 percent to 88,489.449 MT, from 111,048.694 MT in January to June 2016.

Mechanically deboned meat (MDM) of chicken accounted

for 73.23 percent of the total chicken-meat imports during the period.

Purchases of imported chicken MDM, a raw material mainly used by meat processors, reached 64,808.037 MT, 22.07 percent lower than the 83,165.789 MT recorded a year ago.

Data from the BAI showed that the volume of imported lamb, turkey and buffalo meat was also lower.

Buffalo-meat imports went down by 30 percent to 13,580.756 MT, from 19,400.074 MT last year.

Purchases of imported lamb and turkey meat declined by 33.83 percent and 31.98 percent, respectively. Lamb-meat imports reached 297.254 MT, while turkey-meat imports amounted to 979.634 MT. Beef imports, however, expanded 3.51 percent to 44,201.071 MT during the six-month period.

BAI data also showed that pur-

Z

File photo

chases of imported duck meat during the January-to-June period rose by 10.96 percent to 98.284 MT, from 88.575 MT recorded a year ago.

The US was the top source of meat products for the Philippines in the first half of the year, accounting for nearly 20 percent of total imports. Philippine meat imports from the US reached 55,925.680 MT. Germany was another major source of impor ted meat products for the Philippines. It shipped a total of 35,918.254

Water, milk or shampoo: Coconut’s versatility stokes planting boom

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oconuts seem to be everywhere these days. Whether as “water” in PepsiCo Inc.’s Naked drink range, as “milk” in Starbucks Corp.’s coffees, as shampoo in L’Oreal SA’s products or even as a patty in Beyond Meat’s vegan burgers, the tropical fruit has captured new markets with a growing reputation as a healthy, natural product.

The popularity has been a boon for prices, with the cost of coconut oil alone more than doubling since its low in 2013. But it hasn’t translated into increased production, as diseases, natural disasters and aging plantations kept global output stagnant over the past decade.

That’s about to change thanks to a program of replantings and rehabilitation across the tropics.

Output of copra, the dried coconut meat that’s used to make coconut oil, will jump more than 30 percent in the decade to 2026 as yields in the biggest growers rebound, according to a July 10 report by the Organisation for Economic Co-operation and Development (OECD) and the UN’s Food and Agriculture Organization (FAO).

“The international market is not only buying the oil, which they purify into cooking oil,” Danilo D. Valdez, the managing director of trading company Raco Commodities Phils. Inc., said in a July 20 interview. “They also have found out uses for virgin coconut oil, coconut water and those kinds of derivative products from coconut, which are very good for people, that they’ve positioned for an organic and healthy lifestyle.”

The key to the coconut’s popularity comes from the many products that a single nut produces. One package offers a high-energy food, a versatile oil, a nutrient-rich water, and coir—a fiber that’s used to make rope and bedding. And that’s all contained in a water-tight package that helped it spread across the globe’s tropical regions from the Philippines to the Caribbean.

MT during the period.

BAI Assistant Director Simeon S. Amurao Jr. earlier told the BusinessMirror that local traders reduced their purchases after international prices went up due to tight global supply.

“Only a few traders are applying for import permits compared to last year. This is still caused by the high price of meat abroad, which has not changed since the start of the year,” Amurao said in an interview.

Meat Importers and Traders

Harvest area shrank in last 5 years–PSA T

Coconut nurseries that are home to more than 28,000 seedlings in the Supertyphoon Haiyanaffected areas in Leyte province Cargill Inc./Bloomberg

Its versatility has led to the coconut being dubbed the “Swiss Army Knife” of plants and has made it staple product in many countries.

It remains so important in the Philippines, the biggest producer of copra, that the FAO estimates a quarter of its 100 million people are dependent on industries associated with it.

“There’s great demand in foreign countries, like South Korea and Canada,” said Carlito D. Villamayor, a coconut farmer in the Philippine province of Quezon who has switched his palms to make coconut sugar rather than copra because prices are higher. “Now, China is ordering from us, so we have to increase our production.”

Investment in production will lift copra output by 1.1 million metric tons by 2026, according to the OECD and FAO report. Plantation yields in Southeast Asia will climb 15 percent in that time thanks to the replanting of aged palms and rehabilitation of growing areas, particularly in storm-hit parts of the Philippines and Indonesia—which provide almost three quarters of global copra production between them.

That follows a decline of more than 5 percent in the 12 years to

2016 due to aged palms, pests and diseases, which effectively neutered the 1 million hectares of new coconut plantings in the past decade, according to the FAO. Following Supertyphoon Haiyan (local code name: Yolanda) in 2013, “a main feature of the rehabilitation program was to make the conditions of the affected coconut farmers better than pretyphoon conditions,” Philip Soliven, the president of Cargill Inc.’s Philippine unit said in an interview. Cargill led a replanting program in Leyte province that helped more than 400 coconut farmers. A second phase program should help about 3,300 more in the Philippines and Indonesia.

Price relief

Coconut palms start bearing fruit about five years after planting, which means supplies may begin picking up soon. Copra production in the Philippines is forecast to rise to 2.255 million tons this year, from 2.081 million tons in 2016, Yvonne Agustin, executive director of the United Coconut Association of the Philippines (Ucap), said in an interview from Manila. Exports will likely rise 6.5 percent this year, she said. Bloomberg News

Association President Jesus C. Cham said the decline in meat imports is caused by a “confluence of events”.

“We’re seeing a confluence of events that impact negatively on imports—high prices abroad, weak peso, volatile foreign exchange and bans on imports,” Cham told the BusinessMirror in an earlier interview.

“Prices are still trending higher, but increases are not as high as before. Hopefully, prices are already peaking,” he added.

he country’s harvest area has contracted at an average of 0.5 percent annually in the past five years, according to the latest report of the Philippine Statistics Authority (PSA).

In its annual report, titled “A g r icu ltura l Ind icators System: Output and Productivity”, the PSA said the total harvested area of agricultural crops in 2016 of 13.09 million hectares is nearly 2 percent lower than the 13.354 mil lion has recorded in 2012.

The PSA report showed that the harvested area of palay production shrank by an average of 0.71 percent annually. Corn area harvested also contracted by 1.06 percent annually during the fiveyear period.

“Declining trends were exhibited by most of the other major crops during the five-year period,” the report read.

“Camote and onion indicated the biggest area declines, corresponding to average negative growth rates of 4.29 percent and 3.33 percent per year. Average yearly decreases ranging from 1.54 [percent] to 2.57 percent were registered in cabbage, tomato, mongo and peanut,” it added.

In 2016 the PSA said the country’s harvested agricultural crops hectarage reached 13.09 million hectares, 5.66 -percent big ger than the 12.39 million has recorded in 2006.

Economist Pablito M. Villegas, vice president of the Confederation of Filipino Consulting Organization of the Philippines, attributed the contraction in harvested area to various factors, including land conversion and climate change.

“That is the impact of land conversion, the agricultural lands being urbanized and converted for housing projects, factories, and constrution,” Villegas told

the BusinessMirror. “Another thing is land banking. Some are buying agricultural lands, big agricultural lands, which they would not be using for farming.”

Villegas said the risks posed by climate change are evident in the contraction in harvest area. “ St rong t y phoon s, f lood i ng , droughts have caused harvest area to shrink.”

He also said the perception that farming is not profitable may have driven farmers out of the agriculture sector. “There’s no incentive anymore for the farmers to produce or till the land. So they shift to more beneficial ones such as sari-sari stores or the construction sector,” he added.

“Farmers are not earning in the agriculture sector, because in the supply chain they are being victimized by traders, middlemen and money lenders, to the extent that farming has become a losing proposition,” he added.

The PSA report also showed that the farm sector’s palay and corn output during the five-year period declined at an annual average of 0.52 percent and 0.58 percent, respectively.

“A similar trend was exhibited by nine major crops, namely, coconut, sugarcane, banana, coffee, rubber, peanut, garlic, calamansi and cabbage,” it said.

“Calamansi posted a significant decline averaging 9.06 percent. This was followed by coffee at 6.16 percent, rubber at 4.69 percent and sugarcane at 3.97 percent,” it added.

The PSA releases the report as a monitoring indicator of the possible trends in the performance of the country’s agriculture sector.

“The performance of the crops industry can be monitored by looking at the changes in area, production and yield through the use of indices and growth rates,” it said. Jasper Emmanuel Y. Arcalas

A MBOA NGA CIT Y—T he Department of Agriculture and Food in the Autonomous Region in Muslim Mindanao (DAF-Armm) on Tuesday announced that the cassava production in the region has continued to increase with the growing domestic industrial demand.

Dr. Albert Usman, DAF-Armm cassava coordinator, said the provinces of Lanao del Sur and Maguindanao are the top cassava producers in the autonomous region.

Usman said cassava harvested in these areas are sold mainly for industrial consumption, while those in Basilan and Tawi-Tawi are generally used for food.

Usman further noted that cassava is considered as a crop with high economic potential that can have a significant contribution to the Armm’s agricultural output.

Cassava is regarded as the third most important food crop in the tropics, after rice and corn. Valued by small-scale farmers for its tolerance to drought and infertile soil, the crop is essentially ecoefficient.

The Armm is ranked second in the entire country in terms of cassava production, with 16.9 percent of the national output, based on data from the Philippine Statistics Authority covering the first quarter of this year.

Northern Mindanao is on top among cassava-producing regions, with 189.41 thousand metric tons harvest, or 32.1 percent of the national output. Cagayan Valley is third, with 16.6 percent.

Usman emphasized that his office, through its Gender and Development (GAD) unit, has conducted a series of training sessions on cassava food processing in the Talayan, Guindulungan and Sultan Mastura towns in Maguindanao Usman said the training could expand the livelihood opportunities for residents in rural communities and, at the same time, boost the production of the crop in the Armm.

Usman added the training focuses on improving the lives of less-favored sectors of the rural population by means of utilizing available farm crops, like cassava, which is abundant in the region’s agricultural areas.

He said he participants were taught how to make cassava cake, cassava jelly, cassava puto taktak and other cassava-based products and delicacies.

The program also caters to the needs of the farmers, such as giving machinery and cassava graters.

The training program attracted 148 active participants in the towns of Talayan Guindulungan, as well as in Sultan Mastura.

The training program is currently implemented in the provinces of Maguindanao, Tawi-Tawi and Basilan.

GAD focal person Ramla Macatabang said the training is also geared at empowering women and youth to gain basic skills in cassava food processing for entrepreneurial activities, increase their productivity and to improve family income. PNA

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Wednesday, August 2, 2017

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WH panel recommends declaring national emergency on opioids

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ASHINGTON—President Donald J. Trump’s commission on the opioid crisis asked him on Monday to declare a national emergency to deal with the epidemic.

The members of the bipartisan panel called the request their “ f irst and most urgent recommendation”.

Trump created the commission in March, appointing Gov. Chris Christie of New Jersey to lead it. The panel held its first public meeting last month and was supposed to issue an interim report shortly afterward but delayed doing so until now. A final report is due in October. “ W it h a p p ro x i m at e l y 14 2 A mer ic a n s dy i ng e ver y d ay, America is enduring a death toll equal to September 11 ever y three weeks,” the commission members w rote, refer r ing to the 9/11 terrorist attacks. “Your declaration would empower your Cabinet to take bold steps and would force Congress to focus on funding and empowering the Executive branch even further to deal with this loss of life.”

In add it ion to seek ing a n e m e r g e n c y d e c l a r at i o n , t h e commission proposed waiving a federal rule that shar ply limits the number of Medicaid recipients who can receive residential addiction treatment.

It also called for expanding access to medications that help treat opioid addiction, requiring “prescriber education initiatives” and providing model legislation for states to allow a standing order for anyone to receive naloxone, a drug used to reverse opioid overdoses.

Some public health experts said the main effect of declaring an emergency would be to make Americans regard the epidemic more urgently.

“It’s really about drawing attention to the issue and pushing for all hands on deck,” said Michael Fraser, the executive director of the Association of State and Territorial Health Officials. “It would allow a level of attention and coordination that the federal agencies

might not otherwise have, but in terms of day-to-day lifesaving, I don’t think it would make much difference.”

T he gover nors of A r izona, Florida, Maryland and Virginia have declared states of emergency regarding the opioid addiction crisis; in Alaska, Gov. Bill Walker has issued a disaster declaration.

In addition to Christie, the members of the commission are Gov. Charlie Baker of Massachusetts (a Republican), Gov. Roy Cooper of North Carolina (a Democrat), Patrick Kennedy, a former congressman from Rhode Island (a Democrat), and Bertha K. Madras, a Harvard Medical School professor who specializes in addiction biology.

Dr. Tom Frieden, the director of the Centers for Disease Control and Prevention during the Obama administration, said declaring a public-health emergency under the Stafford Act, as the commission recommended, was usually reserved for natural disasters, like hurricanes.

“This is not a natural disaster; it’s one caused by overprescription of opiates and f looding of illegal opiates into the country,” Frieden said. “ The critical measures for reversing the opioid epidemic are improving prescribing and increasing interdiction of illicit opioids.”

Gary Mendell, the founder and chief executive of Shatterproof, an anti-addiction advocacy group, said an emergency declaration would be “a significant first step toward acknowledging the severity of the crisis we face and the urgent need for action, including national emergency funding and suspending regulatory hurdles that limit our ability to save lives”.

Cooper said in a statement that he considered the report “incomplete when it comes to making sure all Americans have

Macau casinos’ July gains cap year of recovery as VIPs flock

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rebou nd i n Mac au’s casino revenue accelerated in July as spending by high rollers continued to add momentum to the yearlong recovery despite China’s efforts to curb capital outflows.

Gross gaming receipts in the world’s largest gaming hub rose for a 12th straight month, increasing 29 percent to 23 billion patacas ($2.9 billion), according to data released by Macau’s Gaming Inspection and Coordination Bureau on Tuesday. That topped the median estimate for a 26-percent increase in a Bloomberg survey of nine analysts, and is the biggest gain since February 2014.

Macau’s gaming revenue has been steadily recovering after China’s corruption crackdown and slowing economy hit the market for more than two years. While an improving economy and the opening of new facilities have helped bring players back to Macau, the outlook still bodes uncertainties as Chinese authorities introduce efforts to halt hundreds of billions of dollars worth of outflows, some of which exit the mainland

via gambling operations.

“Risk of heightening enforcement and potential policy pressures we had flagged have certainly not gone away,” said Daiwa Capital Markets Hong Kong Ltd. analyst Jamie Soo in a note on Tuesday. “Some of the pressure on the gaming revenue does take time to manifest itself, and the seasonal impact of stronger mass numbers for summer months may very well smooth out the potential negative impact of this in the near term.”

Still, the third quarter looks to be off to a strong start, and the market will likely react favorably to the numbers, Soo added.

Wynn Macau Ltd. shares rose as much as 1.2 percent before paring its advance after the data’s release on Tuesday. MGM China Holdings Ltd., which was raised to a buy at Morningstar, trimmed gains after climbing 2.3 percent.

Bloomberg Intelligence’s index of Macau gaming stocks has rallied 20 percent this year through on Monday. Wynn Macau surged 37 percent in the period, while Galaxy Entertainment Group Ltd. jumped 43 percent. Bloomberg News

Cook County Sheriff Tom Dart shows naloxone, an overdose-reversal nasalspray drug at the sheriff’s office in Cook County Jail, the largest single-site jail in the US, which has joined the growing number of jails to hand to inmates on their way out the door kits containing naloxone. AP/G-Jun Yam

142 The estimated number of American opioid addicts dying every day, a death toll equal to September 11 every three weeks

access to affordable health care, which includes mental-health and substance-abuse treatment”.

He added, “I urge the commission to make a stronger stand on the accessibility and affordability of health care.”

Meanwhile, Chicago now gives at-risk inmates the overdose-reversing drug naloxone upon their release from jail, and Los Angeles is poised to follow suit, putting the antidote in as many hands as possible as part of a multifaceted approach to combatting the nation’s opioid epidemic.

The Cook County Jail in Chicago, which is the largest singlesite jail in the country, has trained

about 900 inmates how to use naloxone nasal-spray devices since last summer and has distributed 400 of them to at-risk men and women as they got out. The devices can undo the effects of an opiate overdose almost immediately and are identical to those used by officers in many of the country’s lawenforcement agencies.

Sheriff Tom Dart, whose office runs the jail, said addicts are most at-risk of fatally overdosing in the two weeks after getting out because of their time away from drugs while locked up.

“We’ve got to keep them alive [and] if we can get them through t hat t wo -week w indow, t hey might get treatment, get off drugs,” he added.

D r. Con n ie Men ne l l a , t he chairman of Correctional Health for the county’s health and hospitals system, which administers the program, said only inmates are being trained to use naloxone, but she eventually hopes their relatives and friends can also be trained.

“We are trying to saturate this community with this drug, and we are educating them to tell their buddy, mother, father how to use it, where they keep it and, ‘If you come home and see me not

responding, to go get it and use it,’” she said.

Proponents say such jail programs can be the difference between a former inmate living and dying, as the naloxone often can be administered by an overdosing addict, a friend or family member before emergency responders can reach them.

And Dr. Arastou Aminzadeh, the correctional health-medical director for the Los Angeles County Department of Health Services, said the kits are particularly important for just-released inmates because the same amount of drugs they once used to get high before they were locked up could now kill them.

“Their threshold has dropped but they may use the amount of drugs they used to use,” said Aminzadeh, who is helping Los Angeles jails prepare to begin its naloxone program early next year.

It is too soon to gauge the effectiveness of Cook County’s program, but Dart said anecdotal evidence suggests that the kits have saved lives, including a man who was arrested again, returned to jail and told of how a friend he had trained to use the kit had done so when he overdosed.

New York Times News Service and AP

1MDB misses $603-million payment to Ipic

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Malaysia Development Bhd. (1MDB) failed to make a $603-million payment to Abu Dhabi’s sovereign wealth fund as part of a settlement over a debt dispute, according to a person with knowledge of the matter.

International Petroleum Investment Co. (Ipic) is expected to make an announcement in London on Tuesday, said the person who asked not to be identified, as the information isn’t public yet.

The obligation, which was due on July 31, is half the amount 1MDB and the Malaysian finance ministry agreed to make to Ipic, with a second payment by the end of 2017. 1MDB and the Ministry of Finance didn’t immediately respond to e-mails seeking comment on the nonpayment.

While Malaysia is regaining favor as investors shrug off far-reaching investigations into 1MDB and focus on encouraging signs of an economic turnaround, analysts have warned that failure to pay Ipic could hurt sentiment and become a contingent liability for the government.

The ringgit was little changed as of 2:20 p.m. in Kuala Lumpur. Fiveyear credit-default swaps protecting Malaysia’s sovereign notes were at 81 basis points on Monday, near the lowest in almost three years, prices from CMAN show.

1MDB’s 5.99-percent notes due 2022 were little changed at 108.6 to the dollar on Tuesday, according to prices compiled

by Bloomberg.

Ipic completed a merger with Abu Dhabi sovereign wealth fund Mubadala Development Co. earlier this year. A Mubadala representative couldn’t immediately comment on the matter.

Debt tussle

1MDB and Ipic were locked in a tussle that spilled over to repayments on two sets of bonds issued by the Malaysian state fund, leading to a default in April 2016. Ipic was seeking $6.5 billion from 1MDB and the Malaysian government for failure to perform their debt obligations as the dispute moved into arbitration at the London Court of International Arbitration.

In April the parties said they reached an agreement. On top of the $1.2-billion payment, 1MDB would also assume the coupon and principal obligations for $3.5 billion of bonds issued by it and coguaranteed by Ipic. The settlement would be funded by the sale of 1MDB’s investment-fund units, it said then.

Among the issues between the 1MDB and Ipic were billions in allegedly missing funds. 1MDB has said it could be a victim of fraud if payments intended for Ipic never made it there, while the latter had denied ownership in the company that the Malaysian investment firm transferred money to. Bloomberg News

How Japan could remove melted atomic fuel

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ore than six years after three nuclear reactors melted down in Japan, the country is homing in on the lost fuel inside one of them. Japan’s biggest utility and owner of the wrecked Fukushima Dai-Ichi plant, Tokyo Electric Power Co. Holdings Inc. (Tepco), last week released images that, for the first time, showed what’s likely melted fuel inside the No. 3 reactor.

If confirmed, the nation will have to devise a way to remove the highly radioactive material, a mixture of melted nuclear fuel and reactor debris known as corium.

The cleanup process that may last 40 years and cost ¥8 trillion ($72 billion) will require technology not yet invented.

Here are a few ways the removal could be done, including the government’s preferred approach by taking it out the side: “Special tools and techniques will have to be developed to undertake such a task that has never been attempted before anywhere in the world,” said Dale Klein, an adviser to Tepco and a former chairman of the US Nuclear Regulatory Commission. “Once Tepco

At the Fukushima Dai-Ichi nuclear-power plant Bloomberg

has identified the characteristics of this material, then they can develop a plan to remove this material in a safe manner.”

The search for the fuel has left a trail of dead experimental robots specifically designed to find and photograph the estimated combined 600 metric tons of fuel and debris in the three melted reactors.

While the No. 3 reactor was the

last unit to be probed, its the first to produce a strong indication of where the fuel came to rest. The removal process is slated to begin in 2021.

Long-handled devices guided by a television-monitor system were developed to remove fuel-core debris at Three Mile Island in the US after its 1979 meltdown. The so-called defueling process took

from 1985 to 1990 and involved removing the partially melted fuel core from inside the pressure vessel of the No. 2 reactor, which remained intact.

Fukushima offers a more complex challenge, since three reactors suffered total meltdowns, with melted fuel rupturing pressure vessels and falling to the bottom of the units.

No such effort is being made at Chernobyl, where a concrete sarcophagus was used to entomb the wrecked plant that melted down in 1986.

Technology research and development should focus on removing fuel through the side, the Nuclear Damage Compensation and Decommissioning Facilitation Corp., Tepco’s top government shareholder, said on Monday. That method is safer for workers than flooding the reactor, which would also require the management of radioactive water.

Japan will decide how it will remove the fuel by September, Industry Minister Hiroshige Seko said after the discovery last week, according to national broadcaster NHK. Bloomberg News

The World BusinessMirror

www.businessmirror.com.ph

Wednesday, August 2, 2017

A7

Ex-general Kelly leads White House shake-up

W

ASHINGTON—John F. Kelly, President Donald J. Trump’s new chief of staff, firmly asserted his authority on his first day in the White House on Monday, telling aides he will impose military discipline on a free-for-all West Wing, and he underscored his intent by firing Anthony Scaramucci, the bombastic communications director, 10 days after he was hired.

Scaramucci was forced out of his post, with the blessing of the president and his family, just days after unloading a crude verbal tirade against other members of the president’s staff, including Reince Priebus, Kelly’s beleaguered predecessor, and Stephen Bannon, the chief White House strategist, in a conversation with a reporter for The New Yorker.

Trump recruited Scaramucci as a tough-talking alter ego who would ferociously fight for him the way others had not. But “the Mooch,” as he likes to be known, quickly went too far, even in the eyes of a president who delights in pushing the boundaries of political and social decorum.

A s Kel ly, a for mer four-star Marine general, began his first day on the job, Sarah Huck abee Sanders, the W hite House p r e s s s e c r e t a r y, a n no u n c e d that Scaramucci was out.

“The president certainly felt that Anthony’s comments were inappropriate for a person in that position,” Sanders said. “He didn’t want to burden General Kelly, also, with that line of succession.”

In a post to Twitter just hours before the announcement, Trump insisted that there had been “No WH chaos!” Yet, even as he sought to reassure supporters that all was well, several administration aides fretted that the impetuous president and the disciplined Marine were already on a collision course that could doom the unlikely partnership.

Kelly, the first former general to

occupy the gatekeeper’s post since Alexander Haig played that role for President Richard M. Nixon during Watergate, is charged with quelling the chaos that has defined, distracted and often derailed Trump’s White House. But the president gave Priebus many of the same assurances of control, and then proceeded to undercut and ignore him—to the point where Priebus often positioned himself at the door of the Oval Office to find out whom the president was talking to.

In his brief time at the White House, Scaramucci seemed to epitomize its chaos. A wealthy New York financier, he burst onto the political scene with a memorable performance in the White House briefing room, where he portrayed himself as a major, new player who had been assured he would report directly to the president, without the interference of intermediaries like Priebus or Sean Spicer, the president’s first press secretary.

It was soon clear that Scaramucci would not be a fixture of the administration, but a transitory figure who created an opportunity for Trump, with his daughter Ivanka and son-in-law Jared Kushner, to undertake the far-reaching shakeup intended to purge the White House staff of leakers and aides viewed as not sufficiently loyal to his cause.

Spicer quit the day Scaramucci was hired; Priebus left shortly after the rant in which Scaramucci accused him of undermining the president through leaks of information to reporters.

President Donald J. Trump (right) with John Kelly, his new chief of staff, in the Oval Office of the White House in Washington on July 31. Kelly firmly asserted his authority on his first day in the White House on Monday, telling aides he will impose military discipline on Trump’s free-for-all West Wing. Doug Mills/The New York Times

The president certainly felt that Anthony [Scaramucci]’s comments were inappropriate for a person in that position.”—Sanders Kelly, who was Donald Trump’s first secretary of homeland security, arrives at a critical juncture, when the president is confronted with North Korea’s growing nuclear ambitions, Russia’s aggressive diplomatic moves and continuing fighting in Iraq and Syria.

The new chief of staff will also be charged with reviving a stalled legislative agenda. Trump’s campaign promise to repeal and replace the Affordable Care Act ended in failure last week, and there has been little progress on other major goals, like overhauling taxes or rebuilding the nation’s infrastructure.

A nd despite his desire for discipline, it took only hours on Monday for Kelly to face his first White House leak, and it was about him.

CNN reported that Kelly had been so upset about the president’s firing of James Comey as Federal

Bureau of Information director in May that he called Comey to say he was considering resigning, an account that was confirmed by a former law-enforcement official who was told of the conversation.

Kelly resisted the president’s entreaties to take over for Priebus during the past several weeks.

After his appointment was announced last Friday, he met with Trump and demanded assurances that he would wield the usual sweeping authority over personnel, the flow of information and access to the Oval Office that chiefs of staff have traditionally been given.

In early morning staff meetings at the White House on Monday, Kelly made it clear that the president had agreed to let him impose more d isc ipl ine over what had been an unruly and i ne f f i c ie nt d e c i s ion - m a k i n g and communications process

under Priebus, who had none of Kelly’s experience in government or the militar y.

Kelly also made it clear that everyone in the staff—including Bannon, Ivanka Trump and Kushner—would clear policy proposals, personnel recommendations and advice from outsiders through him.

“General Kelly has the full authority to operate within the White House, and all staff will report to him,” Sanders told reporters later. But she added that Donald Trump would decide how that would work.

Scaramucci’s fall and Kelly’s rise highlighted the diminished, but still important, role in shaping the West Wing played by Ivanka Trump and Kushner, both of whom serve in the White House as senior advisers to the president.

Trump and Kushner had hoped to persuade Donald Trump to appoint Dina Powell, the deputy national security adviser, as chief of staff. Donald Trump, who likes Powell, considered doing so, but later—when it became apparent that Trump had settled on hiring Kelly—the pair supported the choice of the general, according to people involved in the White House’s internal discussions.

While Kelly’s concerns were the decisive factor in Scaramucci’s departure, they said, it was clear that Trump had quickly soured on the wisecracking, Long Island-bred former hedge-fund manager, and so had his family.

Ivanka Trump and Kushner had initially pushed the president to hire Scaramucci, seeing him as a way to force out Priebus, former Republican National Committee chairman, and his allies in the West Wing, like Spicer.

Spicer resigned just hours after Scaramucci’s hiring was made public. And shortly after Scaramucci called Priebus a “paranoid schizophrenic, a paranoiac”—adding a more vulgar term to the beginning of the phrase—Priebus, too, offered his resignation.

Donald Trump was initially pleased by Scaramucci’s harsh remarks, directed at Priebus, as well as Bannon. But that view seemed to change as people around Trump told him that Scaramucci’s overthe-top performances were not well received.

In addition, Scaramucci seemed to be, at least for the moment, overshadowing him—a fact that Breitbart News, which Bannon used to run, pointed out in a headline describing Trump as second fiddle to his communications director.

O ver the weekend, af ter speaking with his family and Kelly—who refused to even consider retaining Scaramucci—the president began to see the brash actions of his newly high-profile subordinate as a political liability, according to three people familiar with his thinking.

For the time being, the White House may leave the communications director post open, said a person close to the internal discussions about the job, though Kelly has the latitude from Trump to fill the post with someone from the Department of Homeland Security.

Two perennial candidates to fill the post are Kellyanne Conway, a White House senior adviser and the president’s former campaign manager, and Jason Miller, who held the communications post during the campaign. Trump has long wanted to bring Miller, who serves as an informal adviser, into the administration.

New York Times News Service

New chiefs at China’s top banks signal further reshuffles ahead T

he reshuffle at the top of two of China’s largest state-controlled banks is the latest phase of a management change for the country’s $40-trillion financial industry, as the government seeks to restrain any turbulence ahead of a twice-a-decade meeting of the ruling Communist Party.

Tian Guoli, formerly chairman of Bank of China Ltd., has been named as the new chairman of China Construction Bank Corp., succeeding Wang Hongzhang, who is retiring, people familiar with the matter said on Monday.

Chen Siqing, previously Bank of China’s president, has been promoted to become the bank’s party secretary, a Communist party role that typically paves the way for him to take the chairmanship, the people added.

The changes “show leadership reshuffles in financial and economic sectors will become a general trend,” said Hu Xingdou, an economics professor at the Beijing Institute of Technology. “The leadership wants to install people that they can trust to clean the troublesome financial industry.”

As President Xi Jinping prepares for a leadership transition this fall, China’s regulators have been attempting to clamp down on financial risks, with policy-makers now targeting everything from corporate acquisitions to returns on savings products banks sell to yield-hungry consumers.

Other moves at the top of state banks and at the country’s regulators are likely, and

suggest the government is maintaining its tight control over the levers of the financial system ahead of the Party congress, said Oliver Rui, professor of finance at the China Europe International Business School in Shanghai.

“We are going to see further consolidation of power from the Party over its control of China’s biggest financial institutions,” Rui said.

As well as filling Chen’s role at Bank of China, the government is expected to appoint a new chairman for the China Insurance Regulatory Commission and an assistant chairman for the China Banking Regulatory Commission, as former officials holding the jobs are being probed for corruption.

Another senior financial role will come vacant if Ma Kai, one of the country’s four vice premiers and responsible for macroeconomic policies, retires as expected after the party congress. Wang Yang, another vice premier who oversees commerce, is likely to take a new role. And Zhou Xiaochuan, the nation’s longest-serving governor of the central bank, may retire.

Regulatory roles

Senior Chinese financial officials can move seamlessly between posts at the top of the state-owned banks and at the country’s financial regulators. During the last major management reshuffle in the nation’s financial industry, in late 2012 and early 2013, Tian Guoli took the helm of Bank of

China from Xiao Gang, who went on to head the China Securities Regulatory Commission until he was removed after the 2015 stockmarket crash.

“In the West, we also see bankers move to become regulators, but there’s normally a cooling period, which you don’t see in China,” noted Rui. Tian, born in 1960, joined Bank of China as chairman in May 2013 from state-controlled Citic Group. Before that, he was head of China Cinda Asset Management Co. and also held various positions at Construction Bank.

Tian used to work under Wang Qishan, who ranks sixth in the Communist Party hierarchy and oversees Xi Jinping’s signature anticorruption campaign. Tian was the assistant president at Construction Bank in 1997 when Wang was the president of the bank.

Bank’s expansion

Bank of China expanded assets under Tian’s leadership by over 40 percent from the end of 2012 to stand at 18 trillion yuan ($2.7 trillion), making it the world’s fourth-largest lender by assets. Industrial & Commercial Bank of China Ltd., Construction Bank and Agricultural Bank of China Ltd. held the top 3 spots. Bank of China also spearheaded the nation’s lending efforts on Xi’s Belt and Road Initiative, with a commitment to provide over $100 billion of financing to 460 projects by the end of March. Bloomberg News

Saudi Arabia desert Bloomberg

Saudi unveils plans for mega Red Sea tourism project

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audi Arabia plans to turn swathes of its untouched Red Sea coastline into a global tourism destination fitted with luxury hotels and transport hubs, as part of a master plan to reduce the economy’s reliance on oil.

The Red Sea project will cover more than 30,000 square kilometers between the cities of Umluj and Al Wajh, boasting 50 islands, beaches, as well as dormant volcanoes, according to a statement released late on Monday. Tourists from most nationalities will not require a visa or will be able to obtain one online.

The initial groundbreaking is expected in the third quarter of 2019 and the first phase will be completed by the fourth quarter of 2022, including “the development of hotels and luxury residential units, as well as all logistical infrastructure—including airland- and sea-transport hubs,” according to the statement.

The project, which will be developed by the kingdom’s sovereign wealth fund, fits into Crown Prince Mohammed bin Salman’s efforts to transform the biggest Arab economy after the plunge in oil prices.

As part of the plan, known as Vision 2030, the conservative kingdom is relaxing the rules on its entertainment and tourism industry as authorities seek to bolster non-oil revenue and create more jobs.

If successful, the Red Sea project will transform a tourism industry that relies almost solely on millions of Muslim pilgrims visiting holy shrines in Mecca. The kingdom, which practices a strict version of Sunni Islam, bans alcohol, imposes a strict dress code and has curbs on gender mixing.

Bloomberg News

A8

Banking&Finance

Wednesday, August 2, 2017 • Editor: Jun B. Vallecera

BusinessMirror

news@businessmirror.com.ph

Q1 external sector numbers mirror growth path

T

he ratio between the economy and the net value of services and compensations paid by foreign enterprises to Filipinos rose in the first quarter of the year, climbing higher the measurement ladder.

Based on Finance Undersecretary Gil S. Beltran’s latest Economic Bulletin, the country’s services trade and income in the balance-of-payments (BOP) stood at 13.31 percent of GDP in January-toMarch period.

The end-March figure was an improvement compared to 12.35 percent registered in the same period last year.

In a report Beltran submitted to Finance Secretary Carlos G. Dominguez III, he said the expansion in the first three months was aligned with the upward trajectory the country saw in the past four years.

“Trade in services, primary income and secondary income balances all rose as a percent of GDP,” Beltran said, noting the economic ratio was at 13.32 percent last year, 12.85 percent in the previous year and 11.57 percent in 2014. “ The biggest contributor to this growth was secondary income, which consists of unrequited transfers mostly from remittances. It grew 9.5 percent during the quarter,” said Beltran, who is also the Department of Finance (DOF) chief economist.

Net receipts in the secondary income account reached $6.5 billion, higher than the $5.9 billion registered in the previous year, due to increased personal transfers, which mainly came from overseas Filipino workers’ remittances “Trade in services came second with services balance rising by 19 percent, as services exports rose by 6.3 percent and services imports lagged behind at 2.0 percent. Business-process outsourcing (BPO) services account for over a half of services exports,” Beltran said.

Net receipts in trade in services rose to $2.37 billion in the first quarter from $1.99 billion in the same period last year, owing to higher net receipts in technical, trade-related and other business services; manufacturing services on physical inputs; and computer services.

Export revenues in BPO sector totaled $5.5 billion at end-March, a growth of 9.9 percent from the $5-billion earnings in the previous year.

“Primary income, which comes mainly from outward direct and portfolio investments by Filipinos less payments for inward foreign investment and foreign loans,

also rose by 5.7 percent and has been growing from a measly 0.24 percent of GDP since 2014,” the finance official said.

The primary income account posted net receipts in the first quarter, jumping by 5.7 percent to $678 million, from $642 million last year, owing to decline in net payments of investment income.

In nominal terms, the country’s total services and income in BOP amounted to $9.52 billion in the first-quarter, up by 11.4 percent from $8.545 billion in the same period last year.

The Philippines’s full-year 2016’s total services and income reached $40.6 billion, higher compared to $37.59 billion in 2015 and $34.47 billion in the previous year.

Beltran, meanwhile, noted that the surplus in services compensated for the

trade deficit in goods, which enabled the country to raise import volumes of capital goods without causing any foreignexchange crisis.

“The rise of services trade and income balances buttresses the country’s capability to sustain rapid economic growth.

Remittances and business-process outsourcing services, which account for a significant percentage of these balances, boost investible savings that fuel the country’s expansion,” Beltran said.

“The country should continue to invest in education and health to sustain this stream of exports. At the same time, it should continue to maintain the health of the financial sector, which allocates these resources to their most efficient uses,” he said.

Case clippings

By Justice S J Ranada Jr. RAPE–lack of laceration of hymen The essence of rape is the carnal knowledge of a woman against her consent. A freshly broken hymen is not one of its essential elements. Even if the hymen of the victim is still intact, the possibility of rape cannot be ruled out. Penetration of the penis by entry into the lips of the vagina, even without rupture or laceration of the hymen, is enough to justify a conviction for rape.

People v. Bisora GR 218942 05 Jun 2017 Tijam, J

Security Bank posts P5.2-B net income

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ecurity Bank Corp. posted P5.2 billion in net income in the first h a l f, up 8 percent f rom yea r ago level. This result was driven by a 26-percent, or P1.9-billion, increase in net interest income to P9.3 billion.

Noninterest income, including trading gains, was P2.9 billion, a 15-percent or P0.5-billion decrease.

From April 1 to June 30 net income grew 32 percent from year-ago level to P2.43 billion, keyed by a 24-percent rise in net interest income to P4.9 billion.

In the first six months the increase in net interest income was driven by a 27-percent growth in the loan portfolio to P340 billion and a 26-percent growth in deposits to P380 billion. Low-cost deposits increased 21 percent. Wholesale loans grew 25 percent, of which corporate-loan growth was 23 percent and middle-market loan growth was 27 percent. Consumer loans increased 49 percent.

Net interest margin was 3.2 percent in the second quarter of 2017, up from 3.1 percent in first quarter of 2017. Service charges, fees and commissions grew 4 percent to P1.1 billion.

Five things to watch after the Sona

M

ore important than the State of the Nation Address (Sona) is, perhaps, tracking down the fulfillment of the five most important promises President Duterte made to the Filipino people.

What are the five potential “game changers” that we should look for in the next 12 months after the Sona?

Topping the list should be the passage of the Comprehensive Tax Reform Program (CTRP) that would translate to P9 trillion worth of funds to finance the “golden age of infrastructure” into the year 2022.

The scheme is not just progressive in that the tax burden is shifted from the poor to the rich, but it taxes the more luxurious goods and services rather than the essentials needed by Juan de la Cruz.

The infrastructure boom, on the other hand, will not just create jobs in the countryside but also make the country competitive, infrastructurewise, with our neighbors in the Asean.

We do not expect the fiercely independent Senate to approve the House version of the CTRP lock, stock and barrel. But as long as the final version remains in keeping with the budgetary fiscal exercise, that should be fine and dandy. A cat can be skinned in as many ways as the imagination can make.

Second is the success of the forays into improving the peace-and-order situation through the passage of the Bangsamoro law and a peace accord with the Reds after decades of fratricidal battles. It will not just precede future decades of peaceful coexistence at last among warring brothers but an opportunity to use the funds heretofore used to wage war into waging development.

Third is the emergence of a truly independent foreign policy. Not substituting one’s former master with another, such policy should instead open new doors for geopolitical stability (rather than tensed strife), commercial trade possibilities and a fresh look at new cultures.

That independence could, perhaps, translate into a peaceful resolution of the West China Sea issue delving into possible coexploration by all claimants for the good of all. Of course, such a landmark economic cooperation venture should also make sure that all international ships crossing the area of development are not denied safe passage.

And one must not see a contradiction in independent foreign policy when huge nations, like the US, China and Russia, are allowed to help the country in our committed fight against the global threat of terrorism. The Free World, after all, has one common enemy.

It will also be one great exercise of political will if the government finally approves the Nationa l Land Use Act. For decades, land-classification turf battles have ensued between the Register of Deeds, the Depart-

Finex free enterprise Zoilo ‘Bingo’ Dejaresco III ment of Energy and Natural Resources and local government units.

As a consequence, what have been impeded are the speedy run of housing projects, the resolute defense of the environment, ascendancy of authentic food security for the nation and the property rights of the many indigenous tribes.

That the National Land Use Act should come too late in the day speak volumes as to how fragile our institutions have become.

Duterte, in his Sona, was in his elements when he spoke about corruption. One could almost hear the president grit his teeth and grunt in his underbelly as he called on government officials to behave like public servants and avoid the display of pomp and privilege while in public service and that all of them must have clean hands, the left and right.

This is one area where the president can speak with credibility because his actions and preferences do not display any hint at coveting an excess of material goods and privilege.

This is where the president, we think, won the most pogi points.

The drama on mining was unexpected. After losing Environment Secretary-designate Regina Paz L. Lopez at the Commission of Appointments and the many powerful friends lording over the mining industry, the President made a sudden turnaround.

In no uncertain terms, he told the miners to share more of their net income by way of taxes, restore the damage done to the environment and provide for the welfare of inhabitants at the mine sites, like hospitals, schools and livelihood centers.

“Or I will tax you to death,” was his final threat.

Winning the war against corruption and straightening the collars of the mining bosses will also be scenarios worth watching.

Bingo Dejaresco, a former banker, is a financial consultant, media practitioner, chairman of both the Professional Development and Broadcast Media of Finex and a Life member.

His views here are personal and do not necessarily ref lect those of Finex. E-mail: dejarescobingo@yahoo.com.

ExportUnlimited BusinessMirror

PHL enters $3-T global halal market

TRADE Secretary Ramon M. Lopez (center) is joined by Director Senen M. Perlada (left) of the Department of Trade and Industry’s Export Marketing Bureau and Commissioner Aisha G. Flores-Malayang of the National Commission on Muslim Filipinos on July 26, durinag the signing of the implementing rules and regulations of Republic Act 10817, or the Philippine Halal Export Development and Promotion Act of 2016.

By Kate Bondoc

Trade and Investments Promotion Group, Department of Trade and Industry

T

HE Philippines is now ready to join the $3.2-trillion global halal market after the Philippine Halal Export and Development Promotion Board, led by the Department of Trade and Industry (DTI), adopted on July 26 the implementing rules and regulations (IRR) of Republic Act 10817, or the Philippine Halal Export Development and Promotion Act of 2016.

“As the implementing rules and regulations are now in place,

all member-agencies of the Halal Board will collectively develop

and implement an integrated Philippine halal-export development and promotion road map.

The DTI will beef up development and promotional activities for the Philippine halal-export sector which will open new economic opportunities for the country, and ultimately unlock the gateway for an all-inclusive growth through Halal export-related trade and investments activities. Purposively, we will cascade these prospects to benefit primarily the Mindanao region,” Trade Secretary and Philippine Halal Export Board Chairman Ramon M. Lopez said.

The IRR on Philippine halal exports, which establishes the foundation for the implementation of the law, is seen as an instrument to establish the strategic development of the Philippine halal ecosystem, positioning the country to become a major player in the lucrative global halal market.

The IRR covers the formula-

tion and implementation of a comprehensive Philippine Halal Export Industry Development and Promotion Program that will increase the export, sale and provision of halal products, processes and services, aside from ensuring a more competitive Philippine halal-export program through research and product development, quality-assurance measures and value-adding mechanisms.

Behind the signing of the IRR on Philippine halal exports is the breakthrough convergence of the government agencies mandated to work together toward the development and promotion of Philippine halal-certified products and services.

The Philippine Halal Board members include the DTI; the National Commission on Muslim Filipinos; the departments of Agriculture, Health; Science and Technology; Foreign Affairs and the Tourism; the Bangko Sentral ng Pilipinas; and the Mindanao Development authority.

The DTI, through its Export Marketing Bureau (EMB), has set up its Halal Section dedicated to conducting capacity-building activities for and among halal stakeholders. It also provides necessary assistance to local halal-certifying bodies about the dynamics of the new Philippine halal law.

“DTI’s primary role is to promote the sector and ensure that Philippine manufacturers are ready to take part in the global halal-value chain and ensure compliance with international standards,” EMB Director Senen M. Perlada said.

The DTI aims to make the Philippines an active player in the regional and international markets for halal. A national strategic planning for Philippine Halal 2022 will involve regional and national government agencies, Muslim religious leaders, the private sector and consumers.

High on its agenda is the harmonization of existing government projects and programs for the halal sector.

Editor: Efleda P. Campos • Wednesday, August 2, 2017 A9

PHILIPPINES signs Asean protocol on electronic exchange of trade data

By Reynaldo Santos Jr.

Communications Manager, Inter-Agency Business Process Interoperability Project, Department of Finance

T

HE Philippine government has paved the way to improve and ease the country’s trading of goods in the region.

The Philippines can now exchange shipment information electronically with exporters and importers in Asean countries to facilitate trade in the region.

President Duterte signed on June 28 the ratification of the Protocol on the Legal Framework (PLF) to Implement the Asean Single Window (ASW), which provides guidelines on the operations, interactions and electronic processing of transactions between Asean member states.

ASW is an electronic gateway which provides seamless and simplified information sharing among exporting and importing Asean countries to reduce clearance times and promote risk management.

Asean member-states connect to the ASW gateway through their respective National Single Windows.

The country’s ratification of the PLF complies with its commitment under the Asean Economic Community Blueprint, and was based on the objectives, principles and obligations established by the ASW Agreement and other international standards. The PLF was signed in Hanoi, Vietnam, on September 4, 2015.

With the signing of the PLF ratification, the Philippines can now electronically send and receive information in the ATIGA Form D, which serves as proof of origin of traded goods for customs purposes. Other cross-border documents will also be exchanged under the

ASW Gateway in the future.

This will facilitate trade between the Philippines and its Asean neighbors, and modernize customs techniques and practices through a seamless, standardized and harmonized routing and communication of trade and customsrelated information and data.

In the Philippines, Asean connectivity will be covered by a newly built system called TradeNet. gov.ph, a system that will allow importers and exporters to apply for accreditation or permits, licenses and certifications online, and will enable all trade-related agencies to automatically receive applications and send feedback in real time.

The installation of the connection between TradeNet.gov. ph and the ASW gateway is expected to commence in August and the connection is expected to go live in December.

The country’s connection to the ASW will help increase the Philippines’s competitiveness in terms of ease of doing business (EODB).

While the country climbed four notches in the global EODB ranking (from No. 103 in 2016 to No. 99 in 2017), the country remains low at No. 8 out of 10 economies in the Asean region.

This connection will increase transparency in cargo processing by providing more accurate, timely and cost-efficient exchange of information. It will promote the fast movement of cargoes (either by sea or air) from vessel to the market by providing advanced border protection capabilities to law enforcement agencies.

The Philippine ratification of the PLF was endorsed to the President by the Department of Finance and the Bureau of Customs.

DTI intensifies design, packaging campaign for domestic brands

CIAP, EMB ink partnership to promote PHL construction industry

By Gliceria N. Cademia

Trade and Industry Development Specialist, Export Marketing Bureau, Services Division

Part One

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IXTY construction-industry players and consultants, along with the Department of Trade and Industry’s Construction Industry Authority of the Philippines-Philippine Overseas Construction Board (DTI CIAP-POCB) and the Services Division of Export Marketing Bureau (EMB), participated in a capacity-building seminar for POCB-registered companies at Emperor Hall, Makati Palace Hotel in Makati City on July 5.

Jocelyn C. Carrasco, acting chief of CIAP-POCB, marked the date as the beginning of a joint cooperation between CIAP-POCB and EMB, which coorganized the seminar to promote and market the Philippine construction industry overseas.

The seminar discussed topics, such as understanding construction contracts for overseas projects, negotiation techniques and possible Outbound Business Matching Missions (OBMM).

Understanding construction contracts for overseas projects

ROLAND G. Rosales, chief legal counsel of Sta. Clara International Corp., discussed the types and forms of construction contracts, and common issues encountered by contractors during project implementation.

He said there are two types of construction contracts: One is the

method of project delivery and the other is costing and payment terms.

Project delivery includes the building and engineering works being designed by the employer (designbid-build) and building and engineering works being designed by the contractor (design-build).

There are two subtypes of design-build project delivery: Turnkey contract; and engineering, procurement and construction contract (EPC contract).

A turnkey contract is a contract where the contractor completes a project and turns it over to the owner fully.

He also differentiated the three types of costing/payment terms: 1) cost plus contract; 2) remeasurement contract; and 3) lump sum.

Cost plus contract is a kind of construction contract where the contractor is reimbursed by the owner for the actual cost of performing the work, plus additional payment for profit. The additional payment may be a fixed amount agreed upon by the party or a percentage of the total cost. Remeasurement contract, or unit-price contract, is where there is a bill of quantities (BOQ), or estimates of the materials, parts and labor.

During the construction, the actual quantity of work performed by the contractor shall be jointly measured by the contractor and owner and valued at the unit price of price quoted in the BOQ. Lump-sum contract, or fixed-cost contract, is where the contractor is paid based on a fixed cost for the completion of the project. The fixed cost is not dependent of the resources and time spent.

He also cited the verbal and written forms of construction contracts. The written form consists of own forms, standard forms and modified forms. He recommended the standard form as it is aligned with internationally accepted contract form. He said modified form can also be used to suit the specific needs of the parties and the accomplishment of the work.

Rosales also discussed the 6 standard forms of international construction contracts which include those of the International Federation of Consulting (Fidic), Institution of Civil Engineers, New Engineering Contract, The Joint Contract Tribunal, Major Project Form and American Institute of Architects. Those of Fidic are widely used in the international construction industry. The rights, obligations and risk of the contractor and employer are properly balanced. It is flexible to the necessities of the project or the needs of the contractor and employer.

Fidic contracts are either: 1) red book, where conditions of contract for construction of building and engineering works are designed by the employer; 2) silver book for EPC/turnkey projects; 3) yellow book for plant and design build; 4) green book, which is a short form of contract usually used for small-scale projects; and 5) gold book for design, build and operate projects (BOT).

Rosales said the common issues encountered by contractors during project implementation include scope and specifications not being properly defined; the responsibili-

ties of contractor and employer not clearly specified; and accountability not defined for defects in the design, plans and specifications.

To minimize issues on variations, they should either be approved by the employer; or be part of the contract (Turnkey, EPC); and employer approval of the variation, but not the cost.

The parties should also be aware of extension of time (EOT), including failure of the contractor to document the cause of delay, to notify the employer of the cause of delay and impact on the project schedule and responses to claims for EOT. The contractors should document everything and notify the employer every time they encounter delay to prevent the issue on EOT. The delay in the project schedule is also an issue when the employer fails to reply to a claim for EOT and when it fails to approve a variation. In force-majeure cases, the contractor should identify everything that will be included in the claim for EOT. Rosales emphasized that different countries have different laws. Some use common law and others, civil law like the Philippines.

Outbound business matching mission

MARIA Teresa S. Loring, chief of the Services Division of EMB, said one of the sectors identified in the Philippine Export Development Plan is construction materials which directly complement construction services along with aerospace and other related services.

To be continued

ANNA Meloto-Wilk (left) of Gandang Kalikasan Inc. and Rex Puentespina of Malagos Chocolates discuss the design and packaging challenge before the participants of the recent Pick Pack Boom Design Challenge sponsored by the Department of Trade and Industry’s Design Center of the Philippines.

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N an effort to further support Philippine brands in accessing the global market, the Department of Trade and Industry’s (DTI) Design Center of the Philippines recently held a design challenge for young design professionals dubbed as “Pick Pack Boom” at the exhibition hall of Design Center in Pasay City.

The one-day packaging-design challenge urged young design professionals to develop and recreate sustainable and locally sourced recycled and sustainable packaging materials for the two world-renowned Philippine brands, namely, Human Nature and Malagos Chocolates.

Participants developed a prototype for Human Nature’s bath-soap bar and Malagos Chocolates’s gift bag that took into consideration the concept of sustainable design. With the celebration of the World Industrial Design Day, the event also served as a support of the Design Center in this year’s theme and focus on United Nations Sustainable Development Goal No. 12 of “Responsible Consumption and Production”.

The design challenge featured Anna Meloto-Wilk from Gandang Kalikasan Inc., which produces Human Nature; and Rex Puentespina of Malagos Chocolates. Wilk and Puentespina both shared their respec-

tive brands, social-entrepreneurship thrusts and their local-to-global business narratives.

The event included design sprint sessions, which tested participants’ ideation and design skills for the prototyping competition. The best prototypes included an origami concept, integrating konyaku as a material to protect and reinforce the packaging for Human Nature’s bar-bath soap; and the graphic storytelling of Malagos’s tree-to-bar single origin cacao, incorporating the terroir elements for the Malagos Chocolates gift pack. All prototypes developed during the session will be turned over to Human Nature and Malagos for further development.

The Design Center of the Philippines is a member of the World Design Organization (WDO), and is committed to the use of design as a tool for improving the quality and competitiveness of Philippine products.

The WDO, formerly known as the International Council of Societies of Industrial Design, is an international nongovernmental organization that promotes the profession of industrial design and its ability to generate better products, systems, services, and experiences; better business and industry; and ultimately a better environment and society.

A10 Wednesday, August 2, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Food production and appropriations

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awmakers have begun their scrutiny of the proposed P3.767-trillion national budget for 2018 on Tuesday. The House Committee on Appropriations kicked off the budget hearings by inviting the members of the Development Budget Coordination Committee—Budget Secretary Benjamin E. Diokno, Socioeconomic Secretary Ernesto M. Pernia, Finance Secretary Carlos G. Dominguez III and Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla Jr.—to discuss the details of the proposed 2018 budget. House Speaker Pantaleon D. Alvarez was quoted as saying that the lower chamber intends to pass the 2018 budget by October.

It is clear that the national budget for 2018 is meant to usher in the so-called golden age of infrastructure, as the Department of Public Works and Highways is seen getting an allocation of P643.3 billion, 37.5 percent higher than what it received for this year. The rollout of more infrastructure projects is expected to create thousands of jobs, especially for low-skilled workers in the construction sector. The construction of more roads, bridges and other public infrastructure would surely boost government efforts to reduce unemployment and cut poverty rate.

The Department of Agriculture (DA), the agency that leads food production in the Philippines, got a measly allocation of P54.2 billion. This amount is nearly one-third of the P213.2-billion budget proposed by the National Agriculture and Fisheries Council to the Department of Budget and Management (DBM). Agriculture Secretary Emmanuel F. Piñol said the amount given to his department would not allow him to roll out new initiatives or significantly improve existing ones to increase food production.

For a country that has to contend with a new nemesis in climate change, the low budget could present challenges to making food more affordable and available to the poor—one of President Duterte’s campaign promises. In his second State of the Nation Address, the President had given the marching order to concerned agencies to climate-proof food production. Agencies, led by the DA, cannot do this with a meager budget.

Boosting food production is an expensive proposition, something that cannot be done overnight. Some experts have earlier thumbed down the self-sufficiency goals of the DA, saying it is too costly to achieve and that importing food could be a better alternative as farm products, such as rice, are produced cheaply by neighboring Southeast Asian countries. But the 2008 global food price crisis reminded nations that food-exporting countries would always prioritize their citizens and cut back on shipments when push comes to shove.

Lawmakers must allow the DA to help Duterte make good on his campaign promises and to carry out his marching orders. Unless the government is ready to provide millions of farmers and farmworkers with a good alternative to their current source of livelihood and unless the Duterte administration decides to just import food for 104 million Filipinos, there is no other recourse that can ensure food security other than supporting the agriculture sector.

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All About Social Security

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URING their en banc meeting on July 25, the Social Security System (SSS) commissioners unanimously passed a resolution reassigning to the Marawi City and Ormoc City calamity victims a substantial amount of the budget for the 60th nationwide anniversary celebration of the creation of the SSS scheduled in September of this year.

SSS Chairman Amado D. Valdez instructed that a small portion of the anniversary budget, as previously arranged, should largely go to sports activities that would promote camaraderie among SSS employees.

The near-scrapping of the anniversary celebration, which already passed the planning stage, was a big letdown to management, which has spent time and effort in conceptualizing an appropriate anniversary celebration program and to SSS employees who have been expecting a festive respite from their daily grind of hard work patiently entertaining and laboriously processing claims of thousands of private-sector employees.

The commissioners, however, predicted that the SSS management and employees will understand the rationale in redirecting the anniversary budget, which is principally to lend some measure of timely and meaningful empathy and support to

the Marawi City and Ormoc City victims whose very physical survival depends on a pouring of voluntary financial assistance from every nook and cranny of the universe, more so, from their countrymen.

Moreover, the commissioners’ action partakes of a sensitive response to President Duterte’s recent State of the Nation Address calling for aid to the Marawi City victims.

Furthermore, the commissioners think that a nationwide celebration, where naturally there will erupt some festivities, no matter how subdued, could be misinterpreted as failing to consider or ignoring the current sufferings of our brothers and sisters in Marawi and Ormoc, particularly the grieving families orphaned by our dead soldiers and civilians.

It will be recalled that only last month, the SSS, through the commissioners, donated half-a-million pesos to the Red Cross chaired by Sen. Richard J. Gordon, the great Fili-

Mine, mine, mine

Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Marvin Nisperos Estigoy Aldwin Maralit Tolosa Rolando M. Manangan

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Big part of SSS anniversary budget diverted to Marawi and Ormoc victims

Teddy Locsin Jr.

Free fire Continued from A1

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hat said, let me add: Every country has lived by mining; every civilization did more mining to become great.

The Roman Empire thrived on mining. Mining even created jobs for slaves but it must be said that miners today at least pay slave wages.

The US grew great by mining itself near to desolation.

So did Canada. So did every strong countr y in the world.

England tore up its countryside and cut down all its trees and mined all its coal to pay the cost of navy and empire before they paid dividends.

pino humanitarian, as their share in helping the families of soldiers who unfortunately died or got wounded in the ongoing Marawi City battle.

This is not to say that the SSS is bloated with surplus funds such that it is in a position to be charitable and to donate to any worthy cause.

Like other government-controlled corporations, the SSS has been embarking on austerity and collectionefficiency programs to maintain the stability of its well-guarded funds.

The present commissioners have always been careful to disapprove unnecessary expenses, untested areas in investments and to approve only investment proposals that have undergone thorough study by the agency’s own group of expert investment managers.

One area of its operations that the commission is giving focus on is its coverage and collection endeavors.

Coverage and collection during the past administrations have been anemic and lackluster such that mem-

bership had remained stagnant at 30 or so million members and such that millions of unremitted delinquent accounts remain uncollected.

The SSS is fortunate to have Commissioner Gonzalo T. Duque of the famous Pangasinan Duque clan to head the commission’s Committee on Coverage, Collection and Related Matters. As a desperate measure to run after delinquent employers, Duque conceptualized the Warrant of Distraint Levy and Garnishment. Through this legal strategy, the SSS will immediately secure the warrant upon its filing of a collection of delinquent account complaint in court or with the SSS Commission. That way, its collection efforts would not be delayed by legal maneuverings of the respondents.

Another problem that Duque and the commissioners are now trying to address is the failure of the SSS’s collecting banks to remit immediately the premiums they have collected from employers and employees on behalf of the SSS. This problem has been causing the SSS some financial headaches. While one commissioner has seriously recommended to picket the erring banks until they remit the amounts collected, another commissioner has proposed to bring the matter to the courts. The SSS chairman and SSS president, however, showing sober leadership, believing that some workable and just solution to the problem will soon unravel, want the few ballistic commissioners to, in the meantime, cool down.

So did France and Germany, and Latin America, when it was rich at the turn of the last century as it never will be again.

Not to mine at all, indeed, to condemn mining across the board is correct—until you stop and think: “What is the value of minerals to men if they stay in the ground?” Nothing. You cannot even admire the beauty of minerals underground.

It is wrong to say that all mining is bad. That is like saying cattle grazing and farming are bad.

Taken to extremes, they create deserts where grass doesn’t grow nor buffalo run.

The correct thing to say is that, mining, like farming and cattle raising, is fine, if responsibly done, so the earth renews itself and these

activities can continue—productively, sustainably; wiser and more profitably done.

Mining is not renewable; so do it in a way that the land left behind sustains another activity when all the mining is done.

It is wrong to say that all mining is bad. A distinction must be made.

And the mining industry must take the initiative.

Instead of hanging together the good miners with the bad, usua l ly sma l l-time miners— leave the irresponsible to hang separately.

And in lieu of the present Chamber of Mines of the Philippines put up another in its place. A group composed of responsible miners.

And call it—the Respectable Chamber of Mines.

The commissioners think that a nationwide celebration, where naturally there will erupt some festivities, no matter how subdued, could be misinterpreted as failing to consider or ignoring the current sufferings of our brothers and sisters in Marawi and Ormoc, particularly the grieving families orphaned by our dead soldiers and civilians.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Fortified rice and new Insurance broking dieting tips for businessmen Dennis B. Funa

INSURANCE FORUM

Michael Makabenta Alunan

on the contrary

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ising obesity among Asians that is traced to excessive intake of bad carbohydrates—like rice, white bread, sugary drinks and sweets—can be checked with simple changes in dieting behavior, a shift to brown rice and the recent launching of the International Rice Research Institute’s (IRRI) new thrust toward biofortification of rice. n GIycemic index is on the rice? Glycemic index (GI), which measures bad carbohydrates (carbs), has been on the rise among Asians.

That means glucose released from excessive carbs can trigger spikes in insulin from the pancreas that could develop into diabetes.

At the recent IRRI launching of its new research thrust, surprisingly not covered by media from Metro Manila, Prof. Jeyakumar Henry of the University of Singapore presented interesting study findings worth adopting by our businessmen-readers who have developed “sedentary” lifestyles sitting all day long at their offices, while ironically on the fast lane, grabbing fast-food meals and always on the go.

Professor Jeya, as he is fondly called, revealed that obesity of Westerners, like Americans and the British, are caused more by high-fat diets of about 33 to almost 40 percent, compared to Asians, whose diets are composed of 67-percent carbs and only 21-percent fats. Much of an Asian’s diet is rice that is on the rise, whereby what is not burned as energy is converted into fats that is causing the Asianobesity phenomenon. n Sitting on your work is unhealthy? Rapid urbanization and the rising office-based business-process outsourcing industry will also see the rise of unhealthy lifestyles of fast foods, graveyard sleeping habits and day-long or night-long work, literally sitting on their jobs.

Thus, old friend V. Bruce J. Tolentino, PhD, and IRRI deputy director general, who is worried over his paunch on the rise, is doing again the unconventional by raising his office desk on stilts, to four-feet high to force himself to work while standing.

Apparently, he can’t stand the idea of sitting the whole day.

When he was agriculture undersecretary a few decades back, Bruce did the unusual with his desk facing the wall and his back to an open door, which meant he was open as a public servant, but could not be distracted easily as he pored on his work.

Google and Youtube upload synopses of studies, saying that indeed “Sitting will kill you,” because you only exercise a little. We sit most of the time—when we drive, we sit; when we work, we sit; when we watch TV, we sit; when we dine, we sit, etc. Too much of sit is not sweet but bwisit in any Filipino language. Locally, sitting on one’s job (inupuan ang trabaho) figuratively means delaying work or not letting papers move.

The World Health Organization reveals that prolonged sitting can increase risks of developing diabetes by 90 percent, and lead to cardiovascular diseases, colon and breast cancer, depression and others. n Choose for more chews. Jeya’s comparative time and motion studies on the use of fingers, spoons and chopsticks and their impact on GI resulted in interesting findings.

For the same volume of rice eaten, he measured the comparative number of mouthfuls, the number of chews per mouthful, the chewing time per mouthful, the chewing rate, the volume of rice per mouthfu and the total time consumed per portion. It turns out spoons ended with the higher GI of 81.3, followed by fingers with 73.3 and chopsticks with only 67.9.

T his only indicates that it is healthier to take smaller bite sizes and spend more time chewing, and this requires dining with company or converting your meal times as opportunities for social interaction.

It is good to revive the old Spanish tertulia of having eat chats, or the local salabatan, which means discourse while taking salabat or (ginger) in a garden or gazeeboo or patio sa labas or outside the house proper.

You need not shift to chopsticks, so still use the more convenient and hygienic spoon, but this time, chat in between bites and never gobble down food in a rush. So choose to chew slowly, or go slow not fast food. Prof.

Jeya says meals with soups also lower the GI, maybe because they enhance digestion. The same works for salad vegetables. n Rise of fortified rice. The bigger problem is still quantity or agricultural production, and their equitable distribution with 3 million children under 5 still dying from lack of food and nutrition in war-ravaged or backward countries.

IRRI Director General Matthew Morell stressed, however, that while 3.5 billion people suffer from insufficient nutrition, either over or under nutrition as we increasingly wipe out pockets of famine, a new phenomenon is rising—the 1.4 billion people struggling with obesity. This may worsen with 50 percent of Southeast Asians to live in urban centers by 2020.

And because you cannot stop the culture of Asians from eating rice, which shares 67 percent of meals, the challenge, therefore, is to produce quality rice that is biofortified with the necessary vitamins, minerals and maybe protein.

And even without scientific biofortification, brown rice by itself, which is essentially less-milled rice that keeps the nutritious bran intact that is naturally packed, if I recall rightly, with 40 healthy micronutrients, minerals and vitamins. Unfortunately, these are scraped off to produce white rice.

Surprisingly, brown rice is more expensive and should be cheaper as it no longer undergoes further scrape milling of the bran. The reason is simple, the supply produced is less than the rising demand being a novelty.

So the next challenge if people still prefer white rice is to biofortify the grains themselves so poor people can attain a close to a balanced diet by just eating rice.

E-mail: mikealunan@yahoo.com

A

n insurance broker is defined as a person or company whose job is to give people independent advice about what insurance is available from different companies, and to arrange insurance for them.

An insurance broker represents the insured’s interest, and generally has no contractual agreements with the insurer. Brokers are not aligned with any one company and can explore and offer products and services available in the market and can tailor fit insurance packages for the client’s needs. If a broker acts on behalf of an insurer, it should promptly inform the insured. It is a fact that in certain transactions, the broker may act on behalf of both the insured and the insurer. Section 301 of the Amended Insurance Code defines an insurance broker as “any person who for any compensation, commission or other thing of value acts or aids in any manner in soliciting, negotiating or procuring the making of any insurance contract or in placing risk or taking out insurance, on behalf of an insured other than himself”.

In the market, brokers “tend to service larger and more complicated business insurance needs”. As an insurance intermediary, brokers play a vital role in bringing insureds and insurers together. An insurance agent, on the other hand, is an insurance company’s representative.

Several companies would prefer to deal with insurers through brokers

for a number of reasons, such as: a) ease in selecting an insurer and the right insurance policies—in other words, the broker can save the client time, money and worry; b) dealing with only one entity for various insurance needs, instead of dealing with several insurers; c) getting the best premiums within the insurance budget; and d) assistance in the management and settlement of claims and other administrative matters.

Brokers can also assist a client in defining clearly the insurance needs and obtaining the best insurance quotes and rates. Insurance policies can be complicated and the broker can assist the client in understanding them. They can also give advice on risk management. Brokers must understand the risks facing the clients and assist them in reducing risk.

The practice of dealing directly with insurers rather than through brokers is called disintermediation.

Insurance broking in the Philippines

Under the Insurance Code, no compensation is allowed to be paid to any broker not licensed by the Insurance Commission. All brokers are required to be licensed. Prior

Bloomberg View

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oliticians and Washington talking heads are falling all over themselves to describe how the new White House chief of staff, John Kelly, might bring some order to a chaotic, dysfunctional and failing presidency.

Wrong. He’s the wrong person for the wrong job for the wrong president.

The more sanguine assessments, and

contrasts to his hapless predecessor, Reince Priebus, will continue for weeks, maybe months. It won’t last.

Kelly, a retired general, lacks the prerequisite skills for this powerful post, which is the consummate political job, not a command-and-control managerial task. It requires keen political sensitivities about policy priorities, Congress, the administration and bureaucracy, the party, interest groups and the voters. And a president

written examination is required.

Brokers, as with the agents, are covered by the requisite of competence and trustworthiness. Applicants for a broker’s license must clearly indicate the words “insurance broker” or “reinsurance broker” in their corporate names.

Representing the interests of the insured, brokers cannot issue policies neither can it involve itself in the process of its issuance. Under Section 311, a broker is required to post a bond in favor of the people of the Republic of the Philippines in such amount as may be fixed by the Insurance Commissioner, but in no case less than P500,000, to answer for funds coming into the broker’s possession. Also required are error and omission policies for breach of duty as insurance broker.

Fiduciary duties to insureds

An insurance broker is bound by the duties of honesty and competence.

But is there a fiduciary duty toward the insured? Section 413 (h) speaks of a duty to hold the insureds’ funds in a fiduciary capacity.

In a New York case, People ex rel.

Cuomo v. Wells Fargo Ins. Services, Inc., the New York Court of Appeals ruled that “an insurance broker does not have a common-law fiduciary duty to disclose to its customers ‘incentive’ arrangements that the broker has entered into with insurance companies.” Attorney General Cuomo had argued that Wells Fargo Insurance Services Inc., an insurance broker, breached its fiduciary duties to its clients, the insureds, by failing to disclose the contingent commissions it received from insurers in connection with its client’s insurance placement. The Court held that while brokers are

also covered by the “general rule that an agent owes a duty of loyalty to its principal”, undisclosed compensation arrangements with insurance companies did not in and of themselves violate any such duty.

Although brokers are agents of their clients and that the principal-agent relationship is fiduciary in nature, the court recognized that brokers, as intermediaries, have a “dual-agency status” performing functions for both insurers and insureds. It also pointed out that brokers are very often paid for their services in placing insurance by the insurer. And, as such, Wells Fargo’s collection of contingent compensation was both “commonplace” and merely reflective of “industry custom”.

Brokers’ commissions

Commissions received by brokers have been contentious in certain jurisdictions. According to A.M. Best, commission and brokerage charges accounted for 26 percent of US property and casualty insurers’ expenses in 2015. Lloyds of London has also reported higher commission and fees with operating expenses of £9.2 billion, 44 percent more than the figure five years earlier. Another issue is the undercutting of rates and the discounting or rebating of commissions. Excessive lowering of insurance prices could be detrimental to the insured client which makes the insurers stricter in interpreting claims, while lower revenue for brokers results in service cutbacks. This has led some jurisdictions to impose minimum fees for the brokers.

Dennis B. Funa is the current insurance commissioner. Funa was appointed by President Duterte as the new insurance commissioner in December 2016.

E-mail: dennisfuna@yahoo.com.

Global Innovation Index 2017: PHL’s areas for improvement Josephine Rima-Santiago

Intellectual Property Matters

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HE strengths of the Philippines within the framework of the Global Innovation Index (GII) was the focus of our last column. Now, let us look at the flipside of the same coin and see the areas that we need to address to improve our innovation ranking.

Old data Let me give you first a silver lining: 6 of our 11 weak points are due to outdated data, which results in the GII ranking not reflective of current conditions.

Data from 2013 places us at rank 99 (out of 111 economies with data, 89th percentile), when it comes to pupil-teacher ratio in secondary education. The 2009 data on government expenditures: 1) on education, puts us at rank 109 (of 117, 93rd); and 2) per high-school student places us at rank 99 (of 106, 93rd). Older data from 2008 on tertiary level inbound mobility, or the percentage of foreign students with respect to the total enrolment, lands us at 105 of 107 (98th). These indicators so far belong to the human capital and research pillar.

In addition, with data from 2012, we ranked 92 out of 105 (88th) for the new business-density indicator (belonging the knowledge and technology output (KTO) pillar), or new registrations per thousand population of ages 15 to 64 years old. Last, data for printing and publishing output

from 2012, part of the creative outputs (CO) pillar, places us at 90 of 99 (91st).

To address this, relevant government agencies should strive to provide updated information in relation to the indicators measured in the GII. This will lead to a more accurate result in the GII and, hopefully, a better ranking.

Areas for improvement The remaining five weaknesses listed in this year’s GII come from the institutions, human capital and research, KTO and CO pillars. Looking at the glass half-full, no weakness was registered in the infrastructure, marketsophistication and business-sophistication pillars.

A weakness in the CO pillar is the low number of video uploads made between 15 and 69 years old on YouTube. In the world, the US, Latvia and the UK scored the highest here. In the Asean, Singapore leads at rank 13, followed by Thailand at 46, Vietnam at 52, Indonesia at 56 and Malaysia at 58. The Philippines trails the Asean at 63 out of 73 (86th).

Trump’s new chief of staff is destined to fail

By Albert R. Hunt

Wednesday, August 2, 2017 A11

who wants to govern.

While knowledgeable about the politics of the Pentagon and the Department of Homeland Security, which he has headed for the past six months, he is inexperienced in most of the ways of Washington. That’s difficult to learn on the job.

His reputation as a straight shooter has suffered during his stint in the Trump administration. That might be why the president likes him. Many

thought he would be a brake on Trump’s mean-spirited, anti-immigration views.

He hasn’t been.

And while many national-security experts were stunned when Trump’s son-in-law, Jared Kushner, privately tried to set up a secret communications system with the Russians, run out of Moscow, Kelly said it was “normal” and “acceptable”.

Further, it’s doubtful that all the warring White House factions, work-

The other weakness in the KTO pillar is our number of scientific and technical articles published, where we ranked 120 of 126 (95th percentile). Iceland is at the top, followed by Denmark and Switzerland. Singapore leads the Asean at rank 28, then Malaysia at 58, Thailand at 84, Brunei at 88, Vietnam at 94 and Cambodia at 99.

Note that the Philippines at 120 comes before Indonesia, which is last at 124.

In the human-capital and researchinput pillar, we are ranked last (43 of 43) in the indicator pertaining to average expenditure of the top 3 global companies by research and development. The Philippines got a score of zero, along with 85 other economies. According to the GII, this means that there are no listed global companies in the economy as indicated in the data source. But this might be inaccurate as even Hong Kong got a score of zero.

The last two weaknesses belong to the institutions pillar. First, the cost of redundancy dismissal places us at 111 out of 127 (87th) with Israel, and a few notches better than Malaysia, Thailand and Indonesia. This indicator measures the cost of advance notice requirements and severance payments due when terminating a redundant worker, expressed in weeks of salary.

Finally, the Philippines is ranked 120 of 127 (94th) in the index relating to the ease of starting a business, placing second to the last among the Asean nations before Cambodia. In this indicator, New Zealand, Canada and Hong Kong ranked the highest. Singapore again leads the Asean at rank six, Thailand at 64, Brunei at 68, Malaysia at 86, Vietnam at 92 and Indonesia at 112.

ing for a president with few core beliefs, lend themselves to a chain of command structure. It’s reported that Kelly has a good relationship with Stephen Bannon, the alt-right, immigrant-bashing Trump senior adviser. That won’t be reassuring to politicians, like House Speaker Paul Ryan, who was close to Priebus, a fellow Wisconsinite, and who is detested

by Bannon.

This gets to the overarching issue: Trump, who revels in humiliating people.

Improving the areas

WE have to bear in mind that the GII serves to provide a snapshot of the level of innovation of an economy. As performance in the GII is heavily based on data obtained from various sources, the Philippines must constantly update the relevant data we provide; otherwise, we get an imprecise assessment of our level of innovation. And even when data is up to date, the GII might even still paint inaccurate images. But what is certain is that the GII may serve as a guide for economies—as a benchmark for future policy directions in terms of innovation.

Thus, we have much work to do to have a better performance in the GII. With respect to the government-policy side, the crafting of the National Intellectual Property Strategy (NIPS) spearheaded by the Intellectual Property Office of the Philippines is under way. Secretaries Ramon M. Lopez (Department of Trade and Industry) and Fortunato T. de la Peña (Department of Science and Technology) support the NIPS and have agreed to be intellectual property rights champions.

Meanwhile, each government agency is encouraged to study the GII, and look at which indicator it can contribute to raise the ranking of the Philippines. After all, it takes the strong collaboration of both public and private sector to push for the creation of a creative and innovative Philippines.

Josephine Rima-Santiago, Ll M, is currently the director general of the Intellectual Property Office of the Philippines. She has had more than 20 years of extensive experience in Intellectual Property as a public servant, educator, practitioner and researcher. E-mail: jrsantiago@ columnist.com.

There will be a time when he humiliates Kelly because that’s what he does. Will the general pull a Priebus and just bow his head? Trump doesn’t want anyone to stop him from being Trump.

The last time a military commander was named chief of staff for a beleaguered president was Al Haig, 44 years ago, in the Nixon administration. It didn’t take long to see that the problem was the emperor, not the clothes. That’s true today.

2nd Front Page BusinessMirror

A12 Wednesday, August 2, 2017

Duterte’s state visits triggered 40% hike in Jan-July BOI pledges

I

nvestment pledges registered at the Board of Investments (BOI) jumped by 40 percent in the first seven months of the year, thanks partly to the numerous state visits of President Duterte that heightened the interest of investors for the Philippines, the Department of Trade and Industry said.

In a statement, the investmentpromotion agency announced that fresh investment commitments reached P294.8 billion in January to July, from only P 210.4 billion in the comparable period last year.

“Presidential visits and the agency’s investment missions abroad have increased the interest of investors, as they gained awareness of the Philippines, convinced of the country’s potential,” Trade Secretary Ramon M. Lopez said in a statement.

“What further makes the Philippines attractive are plans of the administration to ramp up infrastructure spending that is seen to

₧294.8B The amount of fresh investments approved by the Board of Investments in the first seven months of the year

increase economic activities, the country’s demographic dividend, highly skilled workforce, and the strategic location of the country, which can serve as a gateway to the rest of the Asean market,” Lopez added.

T he number of jobs to be

generated from fresh investment pledges in the seven-month period is estimated at 58,758, an increase of 57 percent from the same period in 2016.

The number of projects approved also went up by 40 percent to 268.

The BOI said the increase in July can be credited in part to the start of implementation of the 2017 Investment Priorities Plan (IPP).

Significant projects registered in July include Mindanao-based projects, namely: ■ The P 3.5-billion hydropower project of Alson’s in Maasim, Saranggani; ■ The P 2.1-billion hydropower project of Repower Energy Development Corp. in Maramag, Bukidnon; ■ The P 1.5-billion hydropower project of Repower Energy in Cabanglasan, Bukidnon; ■ The P455-million corrugated boxes for export project of Smartflute Corrugated Packaging Company, in Carmen, Davao del Norte; and the P179-million Go Hotel in Iligan City, Lanao del Norte.

Committed investments in July 2017 reached P106.8 billion, to be used for 32 new projects, a 347-percent surge from P23.9-billion capital infusion for 30 projects committed in the same month last year.

Among the biggest projects registered is the P 79.2-billion

infrastructure development of San Miguel Corp. involving the construction of a 23-kilometer railway line from San Jose del Monte, Bulacan, to Metro Rail Transit Line 3 North Avenue in Quezon City and the 22-kilometer asphalt road from Bocaue Interchange of the North Luzon Expressway to the intermodal terminal in Tala.

A notable project also approved in July was the P5-million online tax-filing services project of Taxumo Inc., a Philippine start-up focused on the development of an end-to-end tax-preparation software that allows self-employed individuals and professionals to do “do-it-yourself ” online tax filing from submission to payment.

Other notable projects for the month include the P6.5-billion expansion project of Eagle Cement Corp., the P 5.1-billion Aruga Hotel

by Rockwell Land Corp. in Makati City and the P 1.8-billion Calaca, Batangas Liquefied Petroleum Gas project of South Pacific Inc. Trade Undersecretary and BOI Managing Head Ceferino S. Rodolfo said they have already achieved 59 percent of the year-end target of P500 billion in fresh investment commitments, making it likely that they will exceed the goal for 2017.

Catherine Pillas

Pernia says 7% growth still doable for the year Pernia that the country’s 2017 growth targets remain attainable, but not at the 7-percent level.

Ateneo de Manila EagleWatch Senior Fellow Alvin Ang, for one, estimates full-year growth to be between 6.4 percent to 6.6 percent in 2017.

University of Asia and the Pacific School of Economics Dean Cid Terosa said Pernia’s growth expectations remain realistic. He expects growth to be around 6.3 percent to 6.8 percent this year.

These projections include forecasts that are below target, mainly due to various external factors that could hurt consumption and investments in the country. These e x ter na l factors w i l l have a greater impact on the economy compared to that of the crisis in Marawi City.

More than the economy, the siege of Marawi City could cause the country’s poorest Filipinos to fall further into poverty, according to local economists.

Lanao del Sur, based on the 2015 Poverty Statistics, is the poorest province nationwide, with a poverty-incidence rate of 71.9 percent in 2015.

The province’s capital city, Marawi, had a poverty-incidence rate of 60 percent based on the Philippine Statistics Authority’s

CHANGE IN LEADERSHIP STALLS M.I.C.C. REVIEW OF MINE CLOSURES

By Jonathan L. Mayuga @jonlmayuga

T

he appointment of Roy A. Cimatu as Secretary of the Department of Environment and Natural Resources (DENR) has caused considerable delay in the ongoing review of the mine closure and suspension orders by the Mining Industry Coordinating Council (MICC).

Interviewed by reporters following a news briefing highlighting the partnership forged by the DENR and the Volunteers Against Crime and Corruption (VACC), Mines and Geosciences Bureau (MGB) Assistant Director Danilo U. Uykieng said the composition of the MICC as well as the review team also changed.

As DENR chief, Cimatu automatically becomes the cochairman of Department of Finance (DOF) Secretary Carlos G. Dominguez III. Asked whether it means “back to zero” as far as the review process is concerned, he said “Not necessarily. It is just a matter of putting the right people.”

He added the MICC met last week to tackle the review of former Environment Secretary Regina Paz L. Lopez’s controversial mine closure and suspension orders that affected 28 large-scale operating mines.

However, he clarified that it is all part of MICC’s mandate, even as mining companies have sought for the MICC to convene to review the closure and suspension orders slapped against more than half of the country’s large-scale operating mines.

“Because of the change of lead-

T

CAR AWARDS GROUP Enjoying a light moment (from left) are: Andy Rodriguez, internal vice president of Car Awards Group Inc. (Cagi); Ronald de los Reyes, president of Cagi; Niky Tamayo, technical director of Cagi; Jun Vallecera, editor in chief, BusinessMirror; Joel Salud, Graphic editor in chief; and BusinessMirror Publisher, T. Anthony C. Cabangon during the signing of a memorandum of the agreement at the BusinessMirror office in Makati City. Cagi is a 13-year-old nonprofit/nonstock organization composed of local motoring journalists. Since 2004, the group has been giving awards to the best vehicles every year. NONIE REYES

Small Area Estimates in 2012.

“It is possible to come close to the target. External events such as the ambivalence of the Trump administration, fragile Middle East political situation, and tensions in East Asia can drag the economy more than the Marawi crisis,” Terosa told BusinessMirror.

Pe r n i a s a i d g r o w t h t h i s year will be driven by stronger hou se hold con su mpt ion a nd the lifting of the quantitative restriction on rice, which will ease inf lation pressures.

He added that government expenditures will be boosted by the higher spending on human-cap-

ital development programs like the K to 12, and social-protection programs such as the Conditional Cash Transfer and unconditional cash transfers.

Pernia also said exports are expected to improve on the back of the Asean economic integration and improving bilateral relations with China.

T he gover nment’s massive Build, Build, Build infrastructure program will also provide a significant boost to economic growth.

“Investments will be supported by public construction, including infrastructure and reconstruction; private construction; the re-

duction in cost of doing business; and the proposed reduction in foreign-investment restrictions,” Pernia said.

In the January-to-March period, the government reported that GDP growth reached 6.4 percent on the back of strong manufacturing, trade and Other Services growth.

Among the major economic sectors, Services had the fastest growth of 6.8 percent. Industry decelerated to 6.1 percent as compared with the 9.3-percent growth recorded in the first quarter of 2016. Agriculture recovered with 4.9-percent growth from a decline of 4.3 percent in the previous year.

ership, there was a change in the composition of the MICC. There is also change in the composition of the review team,” Uykieng said.

“Right now, the MICC is short listing the experts who will be included in the review process,” he added.

He clarified that the MICC is mandated by Executive Order (EO) 79 to conduct periodic review of mining operations. Under EO 79, he said the MICC is tasked to review every two years large-scale mining operations, including the 28 mining operations affected by Lopez’s closure and suspension orders.

Uykieng said the MGB will continue to strictly monitor the operations of large-scale mining companies to ensure their compliance of mining and environmental laws pending the result of ongoing reviews of the closure and suspension orders by the MICC and the DENR. “Those that pass the mine audit are being monitored. Those that are under appeal are also being monitored,” he said.

Uykieng added the result of the DENR’s review of mine closure and suspension orders being conducted by the DENR’s Legal Affairs Department will be based on the provisions of Republic Act 7942, or the Philippine Mining Act of 1995.

He said the mining companies that have appealed their closure or suspension orders continue to operate the mines.

The law, he said, provides the steps to be followed as far as suspension or closure of mining operations are concerned.

House leaders call for Faeldon’s resignation

By Jovee Marie N. dela Cruz

Continued from A1

www.businessmirror.com.ph

@joveemarie

he chairman of the House Committee on Dangerous Drugs on Tuesday called for the resignation of Bureau of Customs (BOC) officials led by Commissioner Nicanor E. Faeldon, following the entry of P6.4 billion worth of illegal drugs. This was immediately seconded by House Speaker Pantaleon D. Alvarez.

House Dangerous Drugs Committee Chairman Rep. Robert Ace S. Barbers of Surigao del Norte made the call, as Rep. Wes Gatchalian of the First District of Valenzuela City disclosed that another cargo of illegal methamphetamine hydrochloride, or shabu, is missing in Valenzuela City.

In the continuing congressional investigation on the entry into the country of illegal drugs from China, Gatchalian said there was a second raid that happened four days after the discovery of P6.4 billion worth of shabu in two warehouses in Valenzuela City on May 26.

The BOC confiscated 604 kilograms of shabu packed into plastic bags and hidden in five metal insulators used for printing presses in Valenzuela City upon the tip of the General Administration of China Customs.

“Residents of Valenzuela City are worried that the missing shabu shipment would end up in their neighborhood,” Gatchalian said, referring to the alleged second shipment that was searched by BOC operatives allegedly without the knowledge of the Philippine Drug Enforcement Agency (PDEA).

Gatchalian said four days after the discovery of the first shipment, BOC operatives returned to F. Bautista Street in Barangay Ugong to look for additional contraband.

“On May 30 the BOC operatives

were looking for additional shabu shipment based on the letter of authority issued by BOC chief to do the second raid. Unfortunately, they were not able to produce the said contraband,” the solon said.

Gatchalian added barangays of Paso de Blas and Ugong are industrial areas near North Luzon Expressway, which could have been used by illegal drug smugglers to transport the contraband to other parts of Luzon.

Gatchalian earlier filed House Resolution 1057, calling for a congressional inquiry into the BOC’s express-lane system that allowed the entry of the contraband.

Gatchalian said it is alarming that the BOC allowed the subject cargo to pass through the “green lane”, notwithstanding the fact that compared to other cargoes carrying the same declared contents, the subject cargo weighed nearly twice the normal weight.

“We also call on the authorities not to rest until they find the second contraband which could end up in the street and exacerbate the illegal-drug problem in the country,” Gatchalian said. “This is also an opportunity for the lawmakers to review our laws to fill in the gaps so that once and for all we are able to have a truly comprehensive answer to the drug problem in the country.”

During the congressional investigation on the shabu shipment, Barbers said Faeldon should follow the “delicadeza” practiced in many countries, wherein officials involved in public scandals, corruption and controversies immediately resign from their positions.

“In other countries, these incidents would have all the officials resigning for delicadeza’s sake. But hey, only [in] the Philippines, as they say, our Customs officials are See “Faeldon,” A2