Businessmirror august 07, 2017

BMReports

Davao biz to grab growth options Duterte gave to city

By Manuel T. Cayon |

@awimailbox Mindanao Bureau Chief

D

AVAO CITY—Businessmen want the city’s economy to fly higher on the President’s master strokes in putting Davao on the world map.

Members of the Davao City Chamber of Commerce and Industry Inc. (DCCCII) believe the first step is granting the city its own airport authority.

Such status would give wider latitude to the region’s business and tourism planners in attracting direct air links to the travel market.

Without the authority, business leaders

This file photo shows the skyline of Davao City, featuring its famous Royal Mandaya Hotel. Members of the Davao City Chamber of Commerce and Industry Inc. believe the first step to opening more opportunities for the local economy’s growth is granting the city its own airport authority. MANUEL CAYON

media partner of the year

United nations

2015 environmental Media Award leadership award 2008

Part One

argued that the airport here, ranked as one of the country’s major airports, would remain partially utilized.

The Davao City international airport would also be below the priority of national aviation planners who “only have eyes” on the heavily congested and critically dangerous Ninoy Aquino International Airport (Naia).

“It’s again time to let our national leaders know that we have our own vision to develop robust regional f light hubs other than the congested Naia,” saidArturo Milan, a member of the DCCCII board of trustees.

According to Milan, maybe it’s time to allow the Davao team “to craft our own [path to] development”.

Continued on A2

BusinessMirror A broader look at today’s business

www.businessmirror.com.ph

n

Monday, August 7, 2017 Vol. 12 No. 298

PHL to China: Cut tariff on sugar imports to zero

By Jasper Emmanuel Y. Arcalas

M

@jearcalas

anila will ask Beijing to slash tariffs on sugar imports to zero so the Philippines could expand its sugar shipments to China, according to the chief of the Sugar Regulatory Administration (SRA).

245 MT

The volume of sugar exported by the Philippines to China in 2016 SR A Administrator Anna Rosario V. Paner said a zero tariff on imports would “ level the playing field ” in sugar trade, as China exports high-fructose corn syrup (HFCS) to the Philippines duty-free.

2016 ejap journalism awards

business news source of the year

P25.00 nationwide | 5 sections 34 pages | 7 days a week

TALKS TO END TENSION IN SOUTH CHINA SEA TO START IN NOVEMBER

By Recto Mercene

@rectomercene

C

hinese Foreign Minister Wang Yi last Sunday said official talks for a code of conduct {COC) in the disputed waters of South China Sea may be announced by the heads of state of China and the 10-member Association of Southeast Asian Nations (Asean) during the Leaders’ Meeting in Manila in November if there is no disruption from outside parties, apparently referring to the United States.

“If the situation in South China Sea is generally stable and if there is no disruption from outside parties, then we will consider during the Leaders’ Meeting in November, we will jointly announce the official start of the COC consultation,” Wang said during a news briefing at the Philippine International Convention Center.

“Regarding what kind of COC will be produced, that is up to the discussion by the 11 parties of Asean plus China,” he said.

“I don’t want to prejudge the result of that negotiation. Actually, the 10 Asean countries don’t have a consensus yet on some of the issues.

See “Tension,” A2

See “Tariff,” A2

Meralco bill to increase slightly in August Hasten motorcycle

registration, LTO told

By Lenie Lectura

T

@llectura

HE generation charge component of Manila Electric Co. (Meralco) consumers’ electricity bill is expected to go up by a few centavos this month.

Generation charge covers the cost associated with Meralco’s purchase of power from its suppliers—independent power producers (IPPs), power producers with power supply agreements (PSAs) with Meralco and power producers using renewable energy (RE) and the Wholesale Electricity Spot Market (WESM).

During a forum at the editorial office of the BusinessMirror, Meralco Spokesman Joe Zaldarriaga said generation charge could go up anywhere between six centavos and 10 centavos.

“Although spot prices registered a reduction, we see generation costs as having a slight upward movement of probably around six centavos to 10 centavos mainly due to higher fuel costs,” Zaldarriaga said.

O vera l l generat ion c ha rge a l s o i nc re a s e d s l i g ht l y l a s t month by P0.0799 per kilowatthour, from P3.8586 per kWh in June to P3.9385 per kWh in July, mainly due to higher IPPs and WESM charges.

Zaldarriaga added the August overall power rates reflect the last three-month installments of the refund of over-recovery on

By Catherine N. Pillas

T

MERALCO officials, led by Jose Antonio T. Valdez (seated, second from left), vice president and head of marketing; Joe Zaldarriaga (seated, fourth from left), assistant vice president and Public Information Office head; Lawrence Fernandez (seated, right), vice president and head of Utility Economics; and Cyril Garvida (seated , leftmost), respond to questions during the Aliw Media Forum, headed by Chairman D. Edgard A. Cabangon (seated, center), of Aliw Media Group in Makati City. Also in photo are (standing, from left) Psyche Mendoza of the Philippines Graphic magazine, Eunice Celario of Pilipino Mirror newspaper, Raoul Esperas of DWIZ and Lenie Lectura of the BusinessMirror. BY RUDY ESPERAS

pass-through charges from January 2014 to December 2016, totaling around P6.9 billion.

“This will be the last of the said refund. Thus, we are definitely looking at an increase in September rates,” he said.

On May 11 the Energy Regulatory Commission (ERC) granted Meralco’s petition for refund for

PESO exchange rates n US 50.3650 n japan 0.4578

implementation from June to August this year. The refund is not shown as a separate line item in the electricity bill but is embedded in the different pass-through charges indicated in the bill, which include generation, transmission, and system-loss charges, and lifeline and senior citizen subsidies.

For residential customers, the re-

fund translates to a reduction of P0.79 per kWh, excluding taxes.

During the forum, Meralco Utility Economics head Lawrence Fernandez said one of the main reasons power rates in the Philippines are among the highest in the region is the absence of government subsidies for electricity.

See “Meralco bill,” A2

@c_pillas29

he Motorcycle Development Program Participants Association (MDPPA) Inc. again asked the Land Transportation Office (LTO) to speed up its registration process, as the backlog of unregistered motorcycles have ballooned to 100,000 units.

MDPPA President Armando Reyes of Honda Phils. Inc. noted that since the LTO’s move in 2014 to centralize registration procedure in regional offices—giving birth to a slew of other issues—registration has proceeded on a “snail’s pace”, leading to a steady increase in backlog.

“The lead time is too long. It takes months before an OR/CR [official registration/certificate of registration] can be obtained by the motor vehicle dealers. In the past, district offices per region can process but that has since been changed and there’s only one office per region that can process papers,” Reyes told the BusinessMirror in an interview.

“Buyers of motorcycles are commuters. They want to use [their bikes] as soon as possible. Aside from that, the market is growing and the sales volume is increasing,” he added.

The rapid increase in motorcycle sales have outpaced the registration

The entire industry, including non-MDPPA members, would sell 1.8 million units of motorcycles this year.”—Reyes

process of the LTO, which is still plagued by human-resource issues and is still awaiting the installation of new computers and systems.

Reyes noted that, while they are in consultations with the LTO, they are requesting for a decentralization of processing to the district offices while the LTO builds up its capacity to handle the volume of registration.

The backlog of 100,000 units does not include figures from nonmembers of the MDPPA. According to Reyes, the LTO has pledged to speed up the process but has yet to heed their suggestion to decentralize the registration.

He said the backlog is further aggravated by recent issuances of the See “Registration’,” A2

n UK 66.1846 n HK 6.4432 n CHINA 7.4976 n singapore 37.0740 n australia 40.0301 n EU 59.7933 n SAUDI arabia 13.4310

Source: BSP (August 4, 2017 )

A2 Monday, August 7, 2017

BMReports BusinessMirror

Davao biz to grab growth options Duterte gave to city Continued from A1

“It [the Davao team] could embark now on its own marketing and hopefully get the critical air links to boost the name of the city as also a destination for tourism, business and investment,” Milan added.

With an airport authority, the international airport would have flexibility in financial budgeting and planning as an independent unit sans going through the intricate web of approval and lobbying from the national government.

Open for business MILAN said the push to have an airport authority came up in the days while organizing the fourth investment conference, an initiative of the DCCCII. He said the City Investment Conference (CIC) has also acquired an international character following the commitment of foreign chambers and business contacts to participate in the sessions.

One hundred delegates confirmed their participation. Japan has the bulk of commitments from individual and business groups, coming in strongly after the recent state visit of President Duterte and reciprocated by the visit of Japan Prime Minister Shinzo Abe. There were also commitments from Europe, with the European Business Chamber frequenting the city over the past several months since the incumbency of Duterte. A business delegation would be coming too from the mainland China.

Reliable Asian neighbors Indonesia and Malaysia have their own participation, as the local Indonesian Consulate here has organized its first manufacturing product exposition two days after the CIC. Indonesian Consul General Berlian Napitupulu said a score of Indonesian distributors and manufacturers of automotive parts, traditional Indonesian cloth batik, garments and textiles, cosmetics, farm tractors and paper and pulp products, would be joining the business matching activities of the

Meralco bill. . .

Continued from A1

“Based on a study, Philippine power rates are cost reflective. This means that it reflects the true cost of generation, transmission and distribution. Unlike in other countries, such as Indonesia, Thailand and Malaysia, where the government subsidizes electricity costs,” he said.

Fernandez added that, based on the same study, “reflecting the true cost of electricity is an economically sound policy”. Zaldarriaga said other countries no longer want to subsidize electricity rates because it is not feasible

CIC. “We are optimistic of the success of the event.

We are expecting foreign delegates,” said Ronald Go, the current DCCCII president.

Go added the participation of Indonesia would boost the recent launching of the “roll-on, roll-off” (Roro) cargo shipping in the Celebes Sea. He expressed optimism on the Roro as generating volume for shipping. Milan said the CIC would announce that Davao City “is now open for investment, because in the past, Mindanao is saddled with energy shortage and having rotating brownouts”.

“That situation discourages investors to come to Davao City. Now that we have reversed the situation, it’s time to have investments in other areas as well, especially in agri-tourism and manufacturing to balance sustainable development,” Milan said.

Opportunities WHEN Duterte embarked on his independent foreign policy, he practically yanked open the door of business opportunity for the Philippines.

“It has been good for this country,” Go said, noting the President’s unorthodox leadership style and dealing with nontraditional partners, like China and Russia. With such move, Go said “we have a bigger market now; we now have investors not traditionally coming in” into the city.

CICs are “very good opportunities to showcase the whole of the Davao Region, as well”, Milan said.

“We are being highlighted by big events. We want to take advantage of the window of opportunity because seldom are we given” such chance.

However, he said having greater flexibility in managing the airport would significantly boost the city’s drive to make investors stay longer and invest more in the city.

That’s why we are lobbying to have our own airport authority, Milan said.

“We would lobby for AirAsia to become its international hub, to promote the Davao region as a business and tourism destination.”

in the long term to do so.

Meanwhile, Meralco has, so far, registered 65,000 users of its prepaid electricity service.

Meralco Head for Marketing and Customer Solutions Jose Antonio Valdez said the numbers are very encouraging, as more consumers are becoming budget conscious.

“We now have 65,000 prepaid electricity customers.

Every month, we add about 5,000 to 7,000 new customers,” he said. The company is targeting to register 100,000 users of its prepaid-electricity service, dubbed as “Kuryente Load” (KLoad), by the end of the year.

The service is available in select areas in Makati, Manila, Pasig, Mandaluyong and Rizal. It will expand the coverage

Milan said the airport authority “is already a long proposal and still pending in Congress”.

“We want the private sector to help in the lobby for that,” he said, citing the reason for the DCCCII’s leadership of the lobby for an airport authority.

To have an airport authority is to become autonomous and adds to marketing destinations in Mindanao, he said. Milan added Cebu “was there first”. “Davao would have its way to think what it

would be its [airport’s] best use,” he added.

To be continued

Registration. . .

Continued from A1

LTO, like the “No OR/CR, No Travel” policy and the standardization of temporary plates.

The rules, Reyes said, tend to hamper the rapid expansion of the local motorcycle industry. “We project that the entire industry, including nonMDPPA members, to sell 1.8 million units this year,” he said.

The industry notched total sales of 1.6 million units in 2016, with MDPPA members—Honda Philippines Inc., Kawasaki Motors (Philippines), Kymco, Yamaha and Suzuki Philippines Inc.— accounting for 1.14 million units.

According to the Asean Automotive Federation Statistics, the Philippines has sold some 614,000 motorcycles and scooters in the first half of the year. This is 12.7 percent higher than the figure recorded in the same period last year and is the largest recorded growth among Asean countries.

of the service in Marikina, Caloocan, Quezon City, Pateros, Pasay, San Juan and Taguig within the year.

The KLoad service runs on the latest “smart”meters and can detect outages instantly, allowing for faster restoration.

The prepaid-meter system allows customers to monitor their electricity consumption, giving them control over consumption and spending.

Based on research from actual consumer usage, customers who shifted from postpaid to prepaid are able to effectively monitor their consumption daily via textmessaging service. As a result, they can save an average of 20 percent on electricity consumption, translating to total savings of around P300 per customer.

www.businessmirror.com.ph

Tariff. . .

Continued from A1

“We would ask the Department of Trade and Industry to help us organize a bilateral talk with China,” Paner told reporters on the sidelines of the Department of Agriculture’s budget deliberation at Congress last week.

“If China’s HFCS enter the Philippines dutyfree, then we hope that our sugar would also enter their market at zero tariff”, she added.

According to data from the Philippine Statistics Authority, the Philippines exported 245 metric tons (MT) of sugar valued at $706,000 last year.

Paner noted China continues to protect its sugar industry by imposing high tariffs.

China slaps a 15-percent tariff on in-quota sugar imports, and 50 percent for those outside of the quota. It allocates a minimum importquota of 1.94 million metric tons (MMT) as part of its trade commitment to the World Trade Organization.

Paner also said the SRA would not mind if Beijing would cap Philippine sugar exports.

She added the Philippines broached the idea of taking a regional approach in asking China to slash its tariff on sugar imports during the Asean Sugar Alliance Summit held in July.

Paner said Asean member-countries welcomed the proposal, as other sugar-producing nations, such as Thailand, are also experiencing difficulties in exporting to China.

“That’s one consensus during the meeting, to hopefully work as a group to ask for favorable concessions from China”, she added.

“The prohibitive tariffs being imposed by China encourage sugar smuggling. So, we said, maybe we can have a uniform tariff for all Asean countries”, Paner said.

In May China’s Ministry of Commerce announced that it would be implementing a threeyear safeguard measure after a government investigation found out that imported sugar “has

Tension. . .

Continued from A1

“One thing is clear, whether it is the 2002 DOC or the future COC, all the 11 countries, [when they put] their signatures on the document, they shoulder the responsibilities, and they need to adopt the document,” Wang added.

He said, so far, the 11 foreign ministers attending the 50th anniversary of the Asean in Manila have agreed to sign the framework of the COC sometime within the year.

The Asean foreign ministers last Saturday formally endorsed the framework of the COC to address disputes in the South China Sea for eventual adoption by the regional grouping and China.

Beijing and its Southeast Asian neighbors have agreed to a framework of the COC in an effort to ease tension or prevent future clashes in the resource-rich waterways. Foreign ministers from 27 countries are in Manila for the 50th Asean Foreign Ministers’ Meeting and Related Meetings from August 2 to 8.

Among the topics of immediate concern are the South China Sea, North Korea and Muslim militants.

Wang said the discussions have, so far, been friendly with broad consensus among the participants in preparation for the Leaders Summit in November.

“It was a friendly, positive and very successful meeting,” he said.

Like in a previous meeting in Laos, the draft framework contains only the elements and is not the final, legally binding document, but the conclusion of the framework could be considered a milestone among the competing countries that include (aside from the Philippines and China) Vietnam, Brunei Darussalam, Malaysia and Taiwan.

Wang said by end of August, the joint working group will meet and the parties will discuss the thinking principles for the next stage of the COC. “China and Asean have to work together to maintain regional peace and stability, and we will work out regional rules that were mutually agreed upon so as to open a bright future for our future relations,” he added.

Ask about China’s reactions from the US’s demand

SOUTHWEST MONSOON AFFECTING THE WESTERN SECTION OF LUZON AND VISAYAS LOW PRESSURE AREA NASA LAYONG 525 KM EAST OF HINATUAN, SURIGAO DEL SUR (As of 4:00 AM - August 6, 2017)

caused serious damage” to the local industry.

Beijing would be now be increasing the tariff it slaps on sugar imports outside the import quota to 95 percent for year 2017-2018, which would go down to 90 percent and 85 percent by 2018-2019 and 2019-2020, respectively.

However, Beijing pointed out that the safeguard measure will not apply to developing countries where China sources its sugar, such as the Philippines.

The Philippines has started to impose an import cap on HFCS this year after reaching a compromise with beverage manufacturers that make use of the alternative sweetener, according to Paner.

She added the SRA has limited the entry of imported HFCS this year to 287,000 MT. The figure is 23.08 percent lower than the 373,137.994 MT imported in 2016.

Paner said the import cap is a “moving volume” and that it could increase depending on local sugar-supply situation. The 287,000 MT will serve as the “base volume”.

“We could increase the cap if there is a need for such. For example, there’s a typhoon and the sugar industry is greatly affected, to the point [that] there’s limited supply to be sourced,”Paner added. The SRA chief said she will also ask the Bureau of Internal Revenue to reconsider the tax it imposed on refined-sugar exports.

“The government has reimposed the 12-percent valued-added tax on our refined-sugar exports. That makes our exporters uncompetitive,” Paner added.

Data from the Bureau of Customs showed that the Philippines imported 373,137.994 MT of HFCS last year, 50.94 percent higher than the 247,204.570 MT recorded in 2015. The total volume of HFCS imported in 2016 was equivalent to 287,316.256 MT of raw sugar.

The SRA and sugar-industry stakeholders said the importation of HFCS by beverage companies slashed the price of local sugar by as much as P500 per 50-kilogram bag in crop year 2016-2017.

for sanctions against the Democratic People’s Republic of Korea (DPRK), now pursuing an aggressive missile and nuclear program, the envoy said, “We have all along opposed unilateral sanctions, and we oppose imposed sanctions on another sovereign state by citing a domestic law. That has no basis in international law.”

“China stands ready to work with all parties and under the framework of the UN Security Council to produce effective resolutions that is consistent with international law regarding the situation in the Korean Peninsula,” Wang added.

When asked whether Pyongyang would agree to start six-party talks, Wang said it is not easy.

“It is not that easy, but it is the direction that we need to work together. Only dialogue and negotiations are the correct way to address the Korean Peninsula issue. That is also provided for in the just concluded UN Security Council Resolution endorsed by the 15-member National Security Council, including the US.” The six parties being alluded to are the US, China, Japan, Russia, North Korea and South Korea.

Wang said that while North Korea has reaffirmed the position that it has been saying all along, “I don’t think it really matters much.”

“What really matters is that the Foreign Minister of the DPRK is here, so he has the chance to listen to the views of those parties regarding the situation in the Korean Peninsula. Such exchange is useful not only for the other parties but also for the DPRK. It will help the DPRK make the right and smart decision,”Wang added.

With regard to the different opinions being raised against China, which seemed bent on militarizing the South China Sea despite a ruling by the International Tribunal, Wang said China does not comment on which individual country or countries have raised the issue.

He added the foreign ministers “recognize valuable progress during the past years, thanks to the concerted efforts of everyone. We need to cherish the positive momentum in the South China Sea”.

Responding to a question on bilateral issues, Wang said, “According to Article 4 of DOC, they should be addressed directly by parties involved in bilateral consultation.“ “As long as we commit to dialogue and consultation and international law, including Unclos, we will be able to stabilize the situation and find a way out.”

The Nation BusinessMirror

news@businessmirror.com.ph

Editor: Vittorio V. Vitug • Monday, August 7, 2017 A3

Interpol help sought to locate 2 Indonesians

T

By Joel R. San Juan

@jrsanjuan1573

he National Bureau of Investigation (NBI) has sought the assistance of the International Police (Interpol) for the immediate arrest and extradition of two Indonesian nationals who are facing trial for qualified theft in a case filed by the infrastructure unit of San Miguel Corp. before the Regional Trial Court (RTC) in Marikina City.

In a report to the Department of Justice, NBI Deputy Director for Forensics Services and concurrent chief of the bureau’s International Operations Division (IOD) Interpol Ferdinand Lavin said the agency has officially requested Undesecretary Allan C. Guisihan, head of Interpol National Central Bureau Manila, for the issuance of “Red Notice” against Indonesian businessman Ery Shadik Wahono and Nadiya W. Stamboel, who both have standing warrants of arrest issued by the Marikina City court.

Lavin said the issuance of a Red Notice against the two Indonesians would alert all Interpol membercountries to locate and apprehend the fugitives for their eventual extradition to the Philippines to

face the criminal charges filed against them.

The request for the issuance of Red Notice stemmed from the complaint made by San Miguel Holdings Corp.(SMHC) seeking assistance in securing the arrest of the two Indonesians.

Wahono and Stamboel were charged with qualified theft case before the RTC in Marikina City for allegedly causing Citra Metro Manila Tollways Corp. (CMMTC), which was jointly owned then by the SMHC and Wahono, to make an unauthorized disbursement, which he then used to incorporate another company called Citra Central Expressway Corp. (CCEC).

A separate complaint of estafa is also pending with the

Department of Justice (DOJ) against Wahono and his company for allegedly duping SMHC in the amount of P50 million.

The DOJ, through the investigating fiscal, Senior Assistant State Prosecutor Ma. Emilia Victoria, has terminated its preliminary investigation into the estafa complaint filed last week and a resolution is expected soon.

SMHC accused Wahono for the alleged unauthorized disbursement of P50 million in funds of CMMTC, where both SMHC and Wahono were major shareholders.

SMHC’s complaint said the transfer of money was as a “loan” from CMMTC to Wahono’s PT Citra Lamtoro Gung Persad (CLGP), used for the incorporation of CCEC. Wahono subsequently entered into a separate partnership with SMHC for CCEC to undertake the Skyway Stage 3 project.

However, SMHC said it did not know that Wahono got the money from CMMTC to fund the establishment of CCEC. SMHC added that Wahono and her coaccused did not notify the CMMTC board and shareholders about the alleged loan. Consequently, there was also no board approval for the loan.

The company added that CMMTC was expressly barred by its contractual obligations from extending any form of loan.

SMHC said Wahono and company

kept the allegedly unauthorized disbursement secret, and it was duped into paying Wahono and company the same amount of money that it allegedly disbursed from CMMTC when SMHC bought into CCEC later on.

Under strict orders from NBI Director Dante A. Gieran, operatives of NBI-IOD served the warrant of arrest on July 14 against Wahono at his known address in Rockwell Center in Makati City.

However, Wahono was not apprehended because he was no longer staying in his condo unit for the past four months.

The NBI also failed to arrest Stamboel when they served the warrant at her residence in Renaissance 3000 in Pasig City since she has already left the country in May 2017 and has not returned since then.

Records also showed that Wahono arrived in the Philippines on October 21, 2014, but with no date of departure, while Stamboel arrived in the country on May 5, 2017, and departed on May 17, 2017.

In the estafa complaint, SMHC accused Wahono of misrepresenting his company CLGP, as the legal owner of CCEC shares that it acquired.

SMHC argued that CLGP cannot be the legal and beneficial owner of such shares, since the subscription price was actually paid for by CMMTC funds of which SMHC was also a beneficial owner at that time.

Stiffer penalties, higher fines to deter environmental crimes

A

n official of the Department of Environment and Natural Resources (DENR) last Sunday lauded the committee on natural resources of the House of Representatives for approving the consolidated bill that seeks to expand the coverage and give more teeth to the National Integrated Protected Areas System (Nipas) Act of 1992.

In a telephone interview, Director Theresa Mundita S. Lim of the DENR’s Biodiversity Management Bureau said the passage of the Expanded-Nipas (E-Nipas) bill, which will impose stiffer penalties and higher fines, will deter environmental crimes, aside from increasing by 94 the number of protected areas (PAs) backed by legislative measure.

Fines ranging from P50,000 to P5 million and imprisonment of one to 12 years are the proposed penalties to amend the old law that prescribes fines of P5,000 to P500,000 and imprisonment of one to six years.

To ensure stronger protection of areas under Nipas, it should be backed by legislative measure, Lim said. This will also ensure

funding for the PAs’ rehabilitation, development and protection, particularly against mining, logging, wildlife trafficking and other destructive human activities, including treasure hunting and bioprospecting.

The official urged members of the House of Representatives to pass its version of the bill to increase areas covered by PAs that are backed by legislation, noting that the Senate has already passed its version in Senate Bill 2712, which declares 97 natural parks, protected landscapes or seascapes and reserves as PAs. The E-Nipas measure, if signed into law, will be a big boost to the current thrust of the Duterte administration to protect the environment, as well as DENR Secretary Roy A. Cimatu’s policy pronouncement to conserve the country’s rich biodiversity.

Cimatu recently urged biodiversity integration in mining operations, underscor ing the country’s rich biodiversity a nd w a r ne d m i n i n g compa nies to strictly follow mining and environmental laws or face sanctions. Jonathan L. Mayuga

Economy

A4 Monday, August 7, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

news@businessmirror.com.ph

Consumer spending to boost GDP in H2

T

By Cai U. Ordinario

@cuo_bm

he expected increase in household and government consumption would help GDP grow by more than 7 percent in the second half of the year, according to the National Economic and Development Authority (Neda).

Socioeconomic Planning Secretary Ernesto M. Pernia recently told reporters that in the third and fourth quarters, GDP expansion could reach 7.2 percent.

This augurs well for meeting the government’s GDP growth target of 6.5 percent to 7.5 percent this year. The economy grew 6.4 percent in the first quarter while the government will release the official second-quarter GDP growth figures in mid-August.

“If there’s a kick in spending, it’s possible. [Particularly] in the third quarter,” Pernia told reporters in a recent interview. “[For the second quarter] I’m not so sure. I have to be cautious.”

Pernia is optimistic about the prospects of GDP growth because of the “structural transformation” of the economy in recent years.

In a presentation last Thursday, Pernia noted the shift in the growth drivers of Philippine economy. While consumption remains

a major source of economic growth, the expansion of the manufacturing sector has been accelerating since 2010.

Pernia said the average growth of the industry sector rose to 2.8 percent in 2016, from an average of 2.4 percent between 2010 and 2015.

The sector grew by only 0.7 percent and 1.2 percent in 1990 to 1999 and 2000 to 2009 periods, respectively.

Apart from this, Pernia said total factor productivity in the Philippines has also been increasing and is now more comparable, if not higher, than other Asean countries. “ Tot a l factor product iv it y growth of the economy in recent years has been the fastest in Asean, at 2.3 percent. Which also means that capital efficiency [incremental capital output ratio] has been improving,” Pernia said.

The Duterte administration’s

Thousands of Filipinos usually troop to mall sales in Metro Manila to buy discounted items. The National Economic and Development Authority is confident the economy will grow by more than 7 percent in the July-to-December period due to faster consumption spending. File photo

vow of ushering in the “golden age of infrastructure” in the Philippines is also expected to help GDP grow faster.

The government aims to spend around P8.1 trillion on infrastructure until 2022.

For the proposed 2018 budget, the proposed infrastructure outlay

is P1.1 trillion, which is equivalent to 6.3 percent of GDP. The infrastructure projects and programs will be outlined in the Public Investment Program (PIP) for 2017 to 2022. The PIP is the accompanying document of the country’s medium-term socioeconomic blueprint, the Phil-

ippine Development Plan (PDP).

“The PIP serves as a mechanism to improve resource mobilization by ensuring the linkage of the planning and budgeting processes toward the achievement of our goals,” Pernia said.

The goal of increasing public investments in infrastructure

will not only boost GDP but also address the infrastructure gaps nationwide.

Earlier, Neda Infrastructure Staff Director Roderick M. Planta said in a presentation the infrastructure gap in paved provincial roads in terms of kilometers is 71.4 percent.

The infrastructure gap in barangays covered by municipal recycling facilities was also significant at 46.2 percent.

Neda data also showed that the infrastructure gap in paved city roads was at 38.2 percent and barangays covered by solid wastemanagement facilities is at 36.1 percent.

Double-digit infrastructure gaps were also observed in Mindanao’s household electrification level at 27.6 percent; access to broadband in cities and municipa lities, 23.6 percent; and access to irrigation service, 13.6 percent.

Planta told the BusinessMirror, however, that the assessment does not include the gap in the number of health facilities, classrooms, housing and other similar infrastructure needs.

Aside from implementation delays and changes in project scope, he said, institutional issues, such as weak regulation and poor project planning, caused these gaps.

Other challenges include operational issues, such as unsynchronized planning, investment programming and budgeting.

‘Audit of agencies aimed at hiking Drilon doubts BOC funds for free college education’ can hit P468-B

T

o determine the underperforming and underspending agencies, the House Committee on Appropriations will conduct a performance audit of all government offices.

National Unity Party Rep. Karlo Alexei B. Nograles of Davao City, the panel chairman, said his committee would look at the budget of underperforming agencies, underspending offices, unspent funds and unutilized funds in 2017.

These could serve as fund sources for the Universal Access to Quality Tertiary Education Act, which was recently signed into law

by President Duterte.

“We can derive our free college education fund from the allocations of underperforming agencies and those with poor absorptive capacity,” Nograles said.

Under this year’s national budget, Nograles said at least P8 billion was allotted in the Higher Education Support Fund (HESF) to finance free tertiary education in state universities and colleges “so there should be no problem at all in sourcing the funds needed to finance the free college-education law.”

The Department of Budget and Management (DBM) said at least P8 billion to P16 billion is needed to fund the free tertiary education next year.

Also, Nograles said the lower chamber can still adjust Malacañang’s proposed P3.767-trillion national budget for 2018 “so that the government’s free college education program is fully implemented”.

“I’m sure we can easily raise at least P8 billion which will be programmed in the 2018 national expenditure program for full implementation of the free-education act,” Nograles said.

“We have already reviewed the possible financial implications and complications of this proposal, and I can safely say that there is enough money to jumpstart this and sustain it in the long term,” Nograles added.

According to the lawmaker, his panel will push for the inclusion of the DBM in the technical working group which would draw up the implementing rules and regulations for the free college education law.

For his part, House Committee on Appropriations Vice Chairman Luis Raymund F. Villafuerte of Ca-

marines Sur said the President’s signing into law of the free-tuition bill will go a long way in helping the government achieve economic inclusion for all, “as education is the great social equalizer”.

“Giving youths access to college education will enable them to eventually get quality and better paying jobs, which, in turn, will spell better living standards for them,” Villafuerte said.

“Hence, this measure is crucial to the President’s agenda for high and inclusive growth,” he added.

Supplemental budget

Meanwhile, Rep. Edcel C. Lagman of the First District of Albay urged Malacañang to ask Congress for a supplemental budget to finance the free tertiary education law.

“The needed funds for school year 2018-2019 can be sourced by excising the usual excess fat in the proposed budget, or it can be covered by a supplemental budget to be proposed by the President for inclusion in the 2018 budget,” he said.

The lawmaker added the amount to be appropriated for free tertiary education in government institutions should include a “realistic” estimate of increases in enrollment of qualified students consequent to the enactment of the law.

“The budget needed should not be pegged at present enrolment levels which are likely to be surpassed,” Lagman said.

“Students who come from families who could afford to pay tuition fees must be encouraged to opt out in order to reduce the total amount needed,” he added.

Lagman also said the supplemental budget can also include requisite increases in the appropriations for the Department of Agriculture (DA).

Last week the House Committee on Appropriations deferred the consideration of the P60-billion budget of the DA for 2018, as several lawmakers sought for increased in funding for the agency.

House Committee on Agriculture and Food Chairman and Partly-list Rep. Jose T. Panganiban Jr. of Anac-IP backed the original P220-billion budget proposal of Agriculture Secretary Emmanuel F. Piñol. Jovee Marie N. dela Cruz

target for 2017

S

enate Minority Leader Franklin M. Drilon, blaming “high level of corruption” at the Bureau of Customs (BOC), is pessimistic that the bureau can meet its P468-billion collection target for this year.

Increasing revenue collection is crucial to financing the Duterte administration’s “Build, Build, Build” projects.

Pinpointing persistent corruption resulting in lower collection, the senator suggested over the weekend that “heads must roll” at the graft-tainted agency recently embroiled in a major controversy involving the P6-million shabu shipment from China allowed to pass through Customs.

Drilon seriously doubted the BOC’s capability to reach its full-year revenue target, noting BOC’s P210.64-billion reported collection for the first half of the year already fell short of its P218.71-billion goal for January to June 2017.

He warned the failure of the Customs to raise revenues will negatively impact the government’s capability to deliver on its promises.

According to Drilon, the Customs shabushipment controversy also undermined the credibility and effectiveness of the Duterte administration’s much-hyped anti-illegal drugs campaign.

“It’s a slap in the face of the administration whose flagship program is to eradicate illegal drugs. It is bad enough that you lose revenues due to smuggling, but to take advantage of the system to smuggle drugs is far worse,” he said.

In a statement, Drilon said the Duterte administration “can no longer rely on the current leadership of the BOC to collect taxes necessary to fund the government’s programs, particularly big-ticket infrastructure projects that the government has outlined under its ‘Build, Build, Build’ program.”

The senator said the BOC ranks as the “second-biggest” tax-collecting arm of the government, but it had repeatedly failed to reach collection targets “due to a high level of corruption” in the agency.

“Such a situation forces the government’s hands to put the burden of raising revenue on the people by way of increasing taxes,” said Drilon, voicing hope that, “if only corruption does not thrive in the customs and smuggling is arrested, the proposal to raise taxes on fuel products will not be necessary to offset a reduction in the personal-income taxes.”

Drilon declared that, “Incompetence and complacency has no place in the government especially in an agency as crucial as the BOC,” adding: “We can no longer trust the incompetence of its officials led

by Commissioner Nicanor Faeldon.” He also insisted that BOC officials linked to the P6.4-billion shabu shipment should be made accountable, insisting that “a major revamp in the BOC is made necessary by what happened.” Butch Fernandez

Agriculture/Commodities BusinessMirror

news@businessmirror.com.ph

Editor: Jennifer A. Ng • Monday, August 7, 2017

A5

BRF seeks clarification on import ban

B

By Jasper Emmanuel Y. Arcalas

@jearcalas

Farms drawing diners who eat near fields that produced food

razilian firm BRF S.A., one of the world’s top poultry exporters, is asking the Philippine government to clarify its decision to stop accepting shipments from three of its accredited meat-packing plants.

“As one of the biggest poultry exporters in the world, BRF takes product safety and quality very seriously. BRF understands that three of our plants were temporarily suspended on July 27 after one specific shipment tested positive for salmonella,” BRF said in a statement e-mailed to the BusinessMirror.

“We are cooperating actively with the Philippine authorities through the Brazilian embassy to clarify the type of salmonella found in it is not harmful to health,” it added.

BRF noted that there are around 2,600 types of salmonella, commonly found in food products of animal and vegetables, but most of which are easily killed through proper cooking.

“With regard to this topic, certain important facts must be clarified to better understand the question. There are around 2,600 types of salmonella, a common bacterium in food products of animal or vegetable origin,” it said. “All types are easily eliminated with adequate cooking of the food.”

“Having served the Philippines market for the last 10 years, BRF has always complied with Philippines regulation and has never faced any quality complaint,” BRF added.

Agriculture Secretary Emmanuel F. Piñol signed Memorandum Order (MO) 30 authorizing the temporary ban on the importation of beef and poultry meat from 25 Brazilian meat establishments.

Piñol made the decision after several shipments of beef and poultry meat from 25 accredited foreign-meat establishments (FMEs) in Brazil tested positive for salmonella.

“Memorandum Circular 9-2008-5, Series of 2008, provides the ‘Guidelines on the Assessment of Microbiological Quality of Fresh, Chilled, and Frozen Meat’, wherein the microbiological limit for salmonella spp. must be absent in 25 grams sample,” MO 30 read.

The agriculture chief has also suspended the accreditation of the 25 FMEs in Brazil for one year.

“Moreover, all shipments shall be at-

In this August 1, photo, visitors get a tour of Valley Dream Farm before sitting down to eat a weekly farm dinner there in Cambridge, Vermont, featuring produce from the farm and other Vermont-made products. AP Photo/Lisa Rathke Meat production in Brazil Dado Galdieri/Bloomberg

tached with Certificate of Analysis attesting negative for salmonella spp. and other infectious biological contaminants with SPS [sanitary and phytosanitaty] implications and shall be duly certified by the Competent Veterinary Officer of Brazil,” Piñol added.

The 25 suspended FMEs include those affiliated with JBS S/A, one of the world’s top beef exporter; Seara Aimentos LTDA, Minerva S.A., Friboi LTDA, Bertin LTDA, Cooperativa Central Aurora Alimentos,

Frigoestrela S.A, C. Vale-Cooperativa Agroindustrial and Copacol-Cooperativa Agroindustrial Consolata.

Out of the 25 FMEs three are affiliated with BRF, namely, those with establishment numbers SIF 1001, SIF 103 and SIF 2014.

Piñol earlier announced a blanket ban on all meat imports from Brazil. He told the BusinessMirror in an interview that he will amend MO 30 to formalize his pronouncement.

PHL to expand rubber production via clones T

he Department of Agriculture (DA) is spending P7.5 million to test the performance of rubber clones from abroad as part of government efforts to increase annual yield to 3 metric tons (MT).

Philippine Rubber Research Institute (PhilRubber) Executive Director Rodolfo L. Galang said the current annual average rubber yield is just less than a metric ton, or about 0.8 MT. “We will test the performance of these clones and identify right away what is high yielding and suitable to the country’s different climate and environment situation,” Galang told reporters in a recent interview.

Galang said the Philippines received 22 rubber clones from five different countries: Thailand, China, India and Ivory Coast each provided five clones, while Myanmar gave two. He added that eight more clones—five from Ghana and three from Indonesia—are on the way.

“We will have performance trials in Zamboanga Peninsula, Cotabato region and in Caraga region. Because there are different planting environments,” he added.

“Eastern Mindanao is more vulnerable to typhoons compared to the Western part.

We also planning to put up one in Palawan, because it has a big potential, and another one in Negros Oriental,” he said.

The DA’s performance trial is a joint program of its two attached agencies, PhilRubber and the Bureau of Agricultural Research, which provided the P7.5million grant for the initiative.

“We are still expecting 18 more clones from Myanmar. We just recently signed a memorandum of agreement,” Galang added.

He said the reproduction of the planting materials has already started in PhilRubber’s office in Zamboanga Sibugay.

The PhilRubber chief also said at least 200 planting materials per clone is required for every identified area for the

performance trial.

Galang added that the planting of the clones in Zamboanga area and Cotabato could start within the first half of next year, just in time for the start of the rubber-planting season.

“We are now preparing a 20-hectare area in Zamboanga. It’s already okay in principle and we’re just waiting to sign the memorandum of agreement with the Jose Rizal Memorial State University,” he said.

“We have also identified an area in Cotabato, which is also 20 hectares, and we will set up a fence there. We’re just clearing the area,” Galang added.

The Philippines and its partner-countries usually exchange natural rubber clones. Galang said the Philippines has only one rubber clone, called USM 1, which was developed by University of Southern Mindanao more than a decade ago.

Once the performance trial is completed, the PhilRubber would identify the most

Urban farms: Projects from around the world

A

structure. The plants slowly rotate, as if on a Ferris wheel, so each tray gets sufficient exposure to sunlight.

Sky Greens harvests and delivers vegetables to Singaporean markets every day. http://www. skygreens.com/

s social entrepreneurs find novel ways to make agriculture an integral part of urban life, I would like to share 10 innovative approaches with you from around the world:

Philippines: Quezon City Vice Mayor Maria Josefina “Joy” Belmonte’s campaign, “The Joy of Urban Planting” The city currently has 68 farms of various sizes found in barangays, public-elementary schools, day-care centers, parishes and nongovernmental organizations. The city works with the Department of Environment and Natural Resources and the Department of Agriculture, which provide financial grants.

Even if city farmers fail to bring their items to market, urban farming is still a win-win situation. “If they don’t produce [enough] for selling, as long as they can eat their products to decrease the issue of malnutrition, it’s already a triumph,” Belmonte said.

GrowUp Box, London, UK Kate Hofman and Tom Webster are giving newmeaningtothephrase“boxlunch”withtheir reinventedshippingcontainer,the GrowUpBox. Inside the 20-foot container, tilapia are farmed in tanks especially designed to ensure there is enough room for fish to grow, while on top, greens are cultivated in vertical columns.

The water from the tilapia tanks circulates through the columns, where the fish waste provides nourishment to about 400 plants. The fish and greens are sold to area restaurants.

The project’s parent company, GrowUp Urban Farms, consults with people looking to build their own boxes and is set to start building the first commercial-scale aquaponics farm in London, Hofman said. http://growup. org.uk/#%21for-schools-and-universities/c1v6f Beacon Food Forest, Seattle, Washington, US The Beacon Food Forest in Seattle is turn-

Henry J. Schumacher

europe Beat ing a piece of public land into an edible forest garden. Residents will be welcome to forage in the forest, a 7-acre plot­—adjacent to a city park—featuring fruit and nut trees, a pumpkin patch and dozens of berry bushes. The goal is to mimic a natural ecosystem, creating a space that requires less maintenance and offers higher yields, cofounder Glenn Herlihy says. http:// www.beaconfoodforest.org/ Farmery, North Carolina and TBA, US Benjamin Greene, founder of the Farmery, plans to make the journey from farm to store more efficient by eliminating it almost entirely.

The Farmery is an 8,000-square-foot market with food shopping on the lower level and mushrooms, greens and fruits growing on the upper level. Whatever is not grown on site will be sourced locally. http://www.thefarmery.com/ Sky Greens, Lim Chu Kang area, Singapore Singapore, one of the most densely populated nations in the world, has little room available for farming. So inventor and entrepreneur Jack Ng created the Sky Greens system to grow more food in less space. Think of it as a plant skyscraper.

The equipment holds up to 32 trays of greens—including lettuce, spinach and a variety of Asian greens—on a tall, narrow A-frame

Brooklyn Grange, Brooklyn, New York, US The Brooklyn Grange comprises two and a half acres of growing space high atop a pair of office buildings. “We’re looking at ways to increase food production without increasing agricultural footprint,” Spokesman Anastasia Plakias said.

The operation grows more than 50,000 pounds of food each year, which it sells through farmers’ markets, CSA subscriptions and wholesale accounts. In addition to boosting New York City’s local food supply, the farm also absorbs more than 1 million gallons of stormwater every year, reducing the load the city’s systems must manage. www.brooklyngrangefarm.com Deu Horta Na Telha, São Paulo, Brazil After 30 years of building urban gardens in São Paulo, agricultural technician Marcos Victorino started running out of cultivable land.

As part of his research work at local college Faculdade Cantareira, he designed a way to turn roofs, balconies and paved areas across the city into miniature farms. Victorino turns large roof tiles upside down, creating a long, V-shaped trough that can be filled with soil.

These tile beds are elevated, making them easily accessible to children and the handicapped. Because the tiles are watertight, they hold in moisture, allowing growers to make the most of an increasingly limited water supply.

Prinzessinnengarten, Berlin, Germany The Prinzessinnengarten is an urban farm nestled in the shadow of the former Berlin Wall, between unused subway stops,

suitable clone to plant in the country and would be recommended for the approval of the National Seed Industry Council.

Galang attributed the country’s dismal rubber yield to the failure of farmers to adopt modern planting technologies.

“Much of our small farmers, for example in Zamboanga Sibugay, who are only yielding as much as 0.4 ton, are still planting seedlings. This is prominent in the Zamboanga peninsula,” he said.

Data from the Philippine Statistics Authority showed that the country produced 362,625.97 MT of rubber in 2016, 8.91 percent lower than the 398,136.64 MT recorded in 2015.

Zamboanga Peninsula was the top rubber-producing province for 2016, accounting for 45.34 percent of the total output. Production in the region reached 164,413.87 MT last year, 7 percent lower than the 176,771.93 MT it produced in 2015. Jasper Emmanuel Y. Arcalas

graffitied concrete walls and aging apartment blocks. Inside vine-covered fences grows a wide range of vegetables, all planted in easyto-move containers—recycled Tetra Paks, rice sacks and plastic crates—that allow the entire operation to be moved if needed. Visitors can pick vegetables, learn about seed harvesting and vegetable pickling, or visit the café to enjoy snacks made from the garden’s produce. http:// prinzessinnengarten.net/about/ Urban Organics, St. Paul, Minnesota, US Located in a building formerly occupied by a commercial brewery, Urban Organics is an aquaponics operation that provides salad greens and fish to grocery stores and restaurants using just 2 percent of the water of conventional agriculture. Founder Fred Haberman, CEO of Minneapolis marketing agency Haberman, hopes the for-profit farm will prove the commercial viability of aquaponics and help spur economic development in the area. “If we can do that, I believe you’ll see more of these types of facilities popping up,” he said. http://urbanorganics.com/ Lufa Farms, Montreal, Canada The goal of Lufa Farms in Montreal is to create a “local food engine”, says the company’s greenhouse director Lauren Rathmell.

At the heart of the operation are two sprawling rooftop greenhouses—currently totaling 1.75 acres—that produce a range of vegetables: greens and herbs, peppers and eggplants. The produce is packaged with locally sourced goods like handmade pastas, fresh bread and dark baking chocolate, and delivered to approximately 4,000 customers each week. https://montreal.lufa.com/en/ Comments are welcome; contact me at hjschumacher59@gmail.com.

C

AMBRIDGE, Vermont—What was once a smattering of farms offering expensive dinners within view of the fields where the food was raised has sprouted into popular summer and fall events that run the gamut from multicourse dinners to weekly burger nights at farms across the country.

These farm feasts are popping up from California to Vermont and are part of the growing agritourism movement. Diners enjoy locally raised foods; farmers supplement their income.

“It makes you appreciate farmers in a different way. And you can’t beat the food,” said Barbara O’Connell, of Ardsley, New York, who with her family recently attended a farm dinner for a second year in a row at Valley Dream Farm in Cambridge, Vermont.

They were among the 60 people seated on hay bales around two long tables on the farm stand’s open-air porch on a clear hot evening.

A neighbor’s cows chomped on grass across the road, and an occasional truck passed by on the rural road pulling trailers of freshly cut hay.

The feast included a salad of lettuces, kale and blueberries; maple mustard chicken; tiny new potatoes; grilled zucchini and summer squash; and homemade vanilla ice cream with maple syrup. The dinner—$65 for adults, $39 for children under 10—came after a hay wagon tour of the lush green fields where the organic produce is grown.

At least five farms now offer regular farm dinners in Vermont. Farm dinners also have grown in the Midwest, said Bob Benenson, spokesman for the nonprofit FamilyFarmed, which works with farmers and food entrepreneurs to help grow their businesses.

“By using these dinners to draw people down to a farm, it serves to educate them, enlighten them more about sustainable agriculture practices and hopefully, at the end of it, they go back to wherever, Chicago, the suburbs, and they start shopping more at farmers markets and things like that,” he said.

Kruger’s Farm in Portland, Oregon, couldn’t survive on farming alone, said its president, Don Kruger.

“I’m telling you, just farming doesn’t make it. You got to do everything else to make things work,” said Kruger, whose farm serves meals to patrons under a 300-year-old oak tree with a huge canopy.

“I think when people come to farm-to-plate dinners they’re really supporting the farm. I mean, it’s getting farms a chance to make a living,” he said.

Diners generally must preregister, and many of the farms don’t have liquor licenses. Customers can bring their own bottles of wine or beer at some. Farms that do offer booze or pairings of wine or beer with meals are pricier; one starts at more than $200 per person.

The dinners can also be culinary feats. Granor Farm in Three Oaks, Michigan, has started running periodic weekend meals this summer. A recent menu included coddled egg with garlic scapes, mushroom cream sauce and frybread; and brown butter and pork belly with wheat berries, rhubarb and fennel.

A multicourse meal costs $75. The 16-person dinners, which run until November, sold out in July. AP

A6

Banking&Finance BusinessMirror

Monday, August 7, 2017 • Editor: Jun B. Vallecera

news@businessmirror.com.ph

2017 inflation seen mid-range at 3 percent

T

By Bianca Cuaresma

@BcuaresmaBM

he Bangko Sentral ng Pilipinas (BSP) is confident the forecast inflation path this year should prove within target no matter the apprehension over oil-price hikes down the line or weather disruptions in the waning months.

According to monetary officials, forecast inflation, as low as 2 percent but no higher than 4 percent, remains on track and that there is continued optimism the anticipated path could be comfortably met.

BSP Governor Nestor A. Espenilla Jr. himself expressed confidence in a statement that inflation this year should average close to the midpoint of the official target of 2 percent to 4 percent.

This developed in the wake of apprehension that inflation will start trending up in the second half of the year due to rising oil prices, unfavorable weather conditions and the initial impact of the proposed Comprehensive Tax Reform Program seen enacted later this year.

Espenilla’s statement came after the Philippine Statistics Authority (PSA) said inflation averaged 2.8 percent in July. This was slightly up from the 2.7-percent revised price survey in June but significantly

lower than that in March and April, when it was fastest at 3.4 percent.

“The BSP continues to see a manageable inflation outlook over the policy horizon, after taking into consideration the latest inflation reading in July,” Espenilla said.

“The inflation path will be supported by the continued strength of the domestic economy, as well as negative base effects in the last four months of 2017,” he added.

The anticipated price path, according to Espenilla, allows the central bank “flexibility” to employ monetary tools that “further enhance” their ability to respond to the evolving requirements of the economy, with “due consideration of external factors” that could impact the economy.

The BSP is scheduled to meet this Thursday to decide on the monetary-policy settings appropriate at this point for the $305-billion economy. The rate-setting meeting

of the seven-man Monetary Board of the BSP will be the first under Espenilla’s leadership.

Singapore-based DBS Bank economist Gundy Cahyadi said that, while there is less pressure on the Central Bank to act on rates, volatilities linked to such influences as the anticipate US Federal Reserve adjustments could push the BSP to make appropriate adjustments.

At the rate-setting meeting of the Monetary Board six-weeks earlier, the seven-man Monetary Board kept the rate on the overnight borrowing or reverse repurchase (RRP) window at 3 percent.

The corresponding rates on the overnight lending and deposit facilities were similarly kept steady.

The reserve requirement ratios were also unchanged.

Forecast inf lation was also scaled back at the June meeting.

For this year, the inflation expectation should prove lower than earlier projected at 3.4 percent to only 3.1 percent.

For next year and in 2019, forecast inflation was seen at a steady 3 percent.

Headline inflation in July rose slightly as a result of such non-food influences as components the Philippine National Railways (PNR) fare increase, upward price adjustments in gasoline and diesel products, the increase in electricity rates due to higher generation charges and higher rental rates for housing.

First Gen-PREHC tender offer agreement First Gen Chairman and CEO Federico R. Lopez (third from left) and Macquarie Infrastructure and Real Assets Senior Managing Director David Luboff (second from left) shake hands after announcing a tender offer agreement between First Gen and Philippines Renewable Energy Holdings Corp. Flanking them are Richard B. Tantoco (left), president and COO of First Gen subsidiary Energy Development Corp.; and Francis Giles B. Puno (right), First Gen president and COO.

Case clippings

By Justice S J Ranada Jr.

SHERIFFS–dereliction of duty and grave misconduct Where a sheriff, instead of implementing a decision of the MCTC in an ejectment case, substitutes his own judgment and acts on his own belief that a specific portion of the subject property should be excluded from the execution, insisting that the property should be first be resurveyed, is guilty of dereliction of duty; likewise, for having received P15,000 from the plaintiffs without approval of the court, said sheriff is guilty of grave misconduct and dishonesty.

Geronilla v Montemayor 05 Jun 2017

AM P-17- 3676 Perlas-Bernabe, J

Eternal Gardens and the Feast of the Transfiguration of Jesus

C

elebrating its 41st anniversary on August 11, Eternal Gardens carries on with its self-appointed task of promoting awareness of and devotion to the Image of the Transfiguration of Jesus.

Last Sunday the Feast of the Transfiguration of Jesus and five days before the company’s anniversary celebration, Eternal Gardens offered masses in honor of the feast in several of its branches, namely, the parks in Baesa, Caloocan City; Barangay Balagtas and Concepcion in Batangas City; and the parks in the cities of Dagupan, Naga, Cagayan de Oro and Cabanatuan.

While the celebration in these branches was simple, the Cabanatuan Park held a special program at the Court of the Transfiguration, a newly developed area that is dedicated to the image.

Some branches offered masses for the Feast of the Transfiguration of Jesus in their parishes. These included the parks in Lipa City, Batangas; and in Biñan and Santa Rosa in Laguna.

In the same way, Eternal Gardens, by embracing the Transfiguration as its corporate symbol, affirms the people’s faith in life eternal where the truth and beauty of God’s love is finally revealed to mortals. By promoting the devotion to the venerated image, it has become an active partner of the church in propagating and strengthening faith in eternal life.

This is the meaning of the company’s corporate slogan of “a glimpse of heaven on a patch of earth”.

T he Transf ig urat ion image first rose at its very first park in Baesa, Caloocan City, which officially opened on August 11, 1976.

Done by National Artist Napoleon Abueva, the giant figure of Christ in steel and bronze has become a

famous landmark in the area where the North Expressway starts.

Dean Abueva would later design and execute the Transfiguration Image in Cabanatuan and Santa Rosa branches. The iconic statue now also looms over nine other parks in key areas, with the newest found in the company’s 10th park in Cagayan de Oro City.

Besides Baesa and Cagayan de Oro, other places where the Transfiguration image has become a familiar presence are Dagupan City, the second to open after Caloocan; and the cities of Biñan in Laguna, Lipa, Batangas City. with two branches in Barangay Balagtas and Concepcion; Naga, Cabanatuan and Santa Rosa cities.

Baesa residents were initially resistant to the opening of a memorial park in their midst. But eventually, they were won over when they saw that Eternal Gardens was designed as a park, with tasteful landscaping, and with a masterful work of sculptural art as centerpiece: Abueva’s Transfiguration would become a national landmark.

Nick Joaquin wrote in his biography of the founder, Antonio L. Cabangon Chua: A Saga of Success: “It was an inspired idea to set up in Eternal Gardens a monument to Christ transfigured—and just as inspired was the choice of the artist to create the monument: sculptor Napoleon ‘Billy’ Abueva, National Artist.

“Abueva did a giant figure of Christ in flowing robes soaring heavenward from a base representing the earth opening up for the resurrection of the body. The metal statue, rising 45 feet high, is in steel and bronze and has now become a familiar presence in that area where the North Expressway starts. The sight of that mighty soaring Christ has caused in people riding by an elevation of the spirit.”

Perspectives Making automation work: Insurers adopt digital labor

E

ven with significant investment toward automation, most insurers are still facing challenges moving from pilot to profit on their investments. Many are struggling to come up with a strategic, enterprisewide approach to automation.

Our experience working with leading insurers suggests that creating the right digital labor strategy is an important enabler to transforming the enterprise. And our work suggests there are clear factors that drive success in formulating and executing a digital labor strategy in the insurance sector.

As insurers rapidly become more digitally enabled, many are starting to think much more strategically about how they use “digital labor” to drive their transformation strategies and achieve their long-term objectives. Activity (and investment) has been feverish.

Some insurers have been incubating their own concepts for digital labor in their digital garages and venture-capital units. Others have been talking with new insurtech start-ups and creating partnerships to explore and exploit new technologies. Many are simply hoping that their business-process outsourcing providers will continue to innovate and introduce new digital labor concepts as they are commercialized.

What is digital labor?

When we talk about digital labor, we are broadly referring to the automation of labor by leveraging digital technologies to augment, or automate the tasks undertaken by knowledge workers in your business. This extends from simple robotic automation through to machine learning and cognitive automation. The spectrum of potential digital labor use cases can be very broad—ranging from automating simple swivel-chair activities, such as cutting and pasting content from one system to another, right up through cognitive solutions (software that can think and reason) performing activities (e.g.,business, medical, legal) previously performed exclusively by humans—and often performing these activities far better than their human predecessors.

Classes of digital labor

Basic robotic process automation (RPA) 1. Macro-based applets n Screen scraping data collection n Work flow n Vision-type building blocks

n Process mapping n Business-process management

2. Enhanced process automation Built-in knowledge repository n Learning capabilities (e.g., “learning assist” by watching and recording) n Ability to work with unstructured data n Pattern recognition n Reading source data manuals (e.g., natural language processing 3. Cognitive automation n Artificial intelligence (AI) n Teaching vs programming n Natural language recognition and processing n Self-optimization/self-learning n Digestion of super data sets n Predictive analytics n Hypothesis generation n Evidence-based learning

Taking the first steps

Progress has also been encouraging. Almost every insurer we work with already has some type of robotics pilot project or automation initiative under way in one or, more often, multiple parts of the organization. Many have already automated some of their more routine processes, particularly in the finance function. Most are now trialing more sophisticated robotics techniques deeper in the organization.

Recent research also suggests that insurance CEOs expect digital labor to start to make an impact on their operating models almost immediately. In fact, almost a third of insurance CEOs say it is extremely likely that 5 percent or more of their technology work force will be replaced through automation within the next three years.

However, most efforts to introduce digital labor within the insurance sector have largely been focused on RPA; basically using robots (or, more accurately, algorithms) to speed up processes that had often already been automated. RPA reduces errors, improves processing time and encourages digitization by 30 percent to 40 percent and, therefore, is a great first step toward the adoption of digital labor.

But insurers will need to become more sophisticated about their use of digital labor if they hope to drive

real transformation and competitive advantage.

Cognitive competition

Here, too, competition is heating up. Enabled by newer technologies, such as machine learning and natural language processing, some of the leading insurers are starting to develop new cognitive capabilities that could usher in a new era of productivity and customer-centricity. They are letting their bots watch their actuaries as they make their decisions; they are feeding them warehouses of historical data and decision records; and then they are starting to let them make key decisions in areas, such as specialty commercial policy renewals and personal line claims approvals.

Interestingly, the leaders are the ones that recognize that—rather than delivering value through cost savings and head-count reductions—the real value of digital labor actually comes from its ability to unlock unprecedented levels of productivity, organizational agility, confidence and competitive advantage. And that will allow some insurers (particularly larger, traditional ones) to operate and compete on a more level footing with their nimbler startup rivals not only in terms of cost, but also in terms of customer responsiveness and experience.

Now where?

The problem, however, is that few insurers know exactly how to move forward from here. The vast majority are struggling to take their pilot projects into full-scale production in a way that is meaningful to the business.

Value-generating ideas and capabilities from one part of the organization are not being shared with other parts of the enterprise. And duplication is rampant. As a result, few insurers have any real road map to help guide their digital labor strategy.

Many also face significant capability challenges. Internally, few have the resources, skills or talent to drive forward an enterprise-wide digital labor strategy, let alone the underlying supporting information-technology architecture. And while the external vendor environment is certainly evolving, knitting together the right combination of solutions to enable the business is still highly complex. Few insurers want to play the technology developer/integrator role. Most would much rather focus on improving their core business.

news@businessmirror.com.ph • Editor: Lyn Resurreccion

The World BusinessMirror

Monday, August 7, 2017

A7

US cities welcome foreign product: Jobs

C

HATTANOOGA, Tennessee—At the airport here, there is a reminder to travelers of the jobs that global trade can bring. A shiny 2017 Volkswagen Passat is stationed near the entryway and labeled: “Designed in Germany.

Built in Chattanooga.”

The American map is dotted with towns drained of jobs after homegrown factories bolted to lowerwage countries. But for many spots throughout the country, the same strategy of moving operations overseas—when practiced by foreign companies—has buoyed local fortunes.

In Chattanooga and the surrounding region, for example, more than two dozen companies from 20 countries have set up shop, generating billions of dollars in investment, employing thousands of workers and helping drive Tennessee’s jobless rate to 3.6 percent in June, a record low for the state.

But political and business leaders in Hamilton County, a conservative stronghold where President Donald J. Trump won a majority of the votes, worry that the president’s attacks on trading partners and exhortations to “Buy American” could set off a protectionist spiral of tariffs and import restrictions, hurting consumers and workers.

“I’m nervous,” Mayor Andy Berke said over sweet tea and French toast at the Bluegrass Grill on Main Street.

Berke will travel to Japan this fall in hopes of persuading more companies to hang a shingle at the foot of the Appalachians.

“Trade and foreign investment is a big part of Tennessee’s portfolio, and it affects many people in our area,” he added. “And I don’t know exactly what the policies will be.”

Pushing to rewrite his predecessors’ free-trade approach, Trump has reopened the North American Free Trade Agreement with Mexico and Canada, threatened tariffs and quotas on steel imports, moved to revise a trade agreement with South Korea and signaled his support of US businesses by declaring a “Made in America” Week. A trade case accusing China of intellectual-property violations is also in the works.

At the same time, the president has cited the jobs foreign businesses can bring, announcing at the White House recently that Taiwanese electronics supplier Foxconn would cre-

ate at least 3,000 jobs with the help of hefty tax credits at a new plant planned for Wisconsin. And after two Japanese carmakers announced last Friday a joint decision to build an assembly plant, he tweeted: “Toyota & Mazda to build a new $1.6B plant here in the USA and create 4K new American jobs. A great investment in American manufacturing!”

For employers and workers here, though, the labels can be confusing. “There is no such thing as just ‘American built’ anymore,” said Randy Topping, who owns a tractor and equipment dealership in Chattanooga.

He saw his business explode in 2010, thanks in part to growing sales of vehicles made by Indian manufacturer Mahindra. Topping is now teamed up with the company and is president of Southeast Mahindra, where nearly 60 people assemble and distribute small red tractors suited to gentleman farmers.

The parts are made in the US, as well as India, South Korea and Japan. “Everything has foreign content,” he added.

Production workers at Southeast Mahindra start at a wage of $12 an hour, eventually earning up to $20 an hour. The competition with rivals, both in the US and in developing countries, can be brutal, and success is counted in nickels and minutes. Like other Southern states, Tennessee makes a selling point of the scarcity of unions, largely a result of laws exempting workers who don’t join from paying the equivalent of dues.

“It’s hard work,” Topping acknowledged, as the temperature outside neared 97 degrees, making the air in the assembly shed hot and thick.

“But this is a close-margin business,” he said, explaining why he is not offering more money despite adding a second shift.

Bill Phillips, 57, the productionline leader, worked for Mahindra in Northern Georgia for eight years before transferring to this plant in 2009. Whether it’s a foreign company or not, “it’s still a job,” said Phillips,

Bill Phillips, the production-line leader, works on a tractor at Southeast Mahindra, an assembly plant and distribution center for the Indian manufacturer, in Chattanooga, Tennessee, on July 26. The region has become a magnet for investment from overseas, helping drive Tennessee’s unemployment to a record low. Whether it’s a foreign company or not, “it’s still a job,” Phillips said. Melissa Golden/The New York Times

whose shaggy gray mustache hangs on his face like an upside-down U. “I’m working. I’m making a living.”

Tennessee, which actively courts firms from abroad, ranks first in the nation in jobs created by foreign-owned companies, according to the State Economic and Community Development Department: 136,000 workers at 931 foreignbased businesses.

In the Chattanooga area, where the unemployment rate dropped to 3.3 percent, foreign companies account for roughly 20,000 jobs, according to a list compiled by the local Chamber of Commerce.

“We love to say, ‘Buy American,’” said William B. Kilbride, the chamber’s president and chief executive, “but we both know how hard that is.”

He pointed to Pilgrim’s Pride, a large chicken-processing plant in the Southside neighborhood. It employs 1,200 people, and many of the chickens are raised on North Georgia farms, but most of the profits flow back to the majority owner, JBS of Brazil.

“So are you buying American or not?” he asked.

Volkswagen, which made this spot its North American manufacturing headquarters, now employs more than 3,200 people at the plant it opened in 2011. The automaker’s presence has attracted other firms, like the Spanish company Gestamp, which manufactures metal automotive components and employs 634 people.

“You can throw a baseball and almost hit the Volkswagen plant,”

Mueller asks White House for documents on Flynn

W

ASHINGTON—Investigators working for the special counsel, Robert S. Mueller III, recently asked the White House for documents related to former national security adviser Michael Flynn and have questioned witnesses about whether he was secretly paid by the Turkish government during the final months of the presidential campaign, according to people close to the investigation.

Although not a formal subpoena, the document request is the first known instance of Mueller’s team asking the White House to hand over records.

In interviews with potential witnesses in recent weeks, prosecutors and Federal Bureau of Investigation (FBI) agents have spent hours poring over the details of Flynn’s business dealings with a Turkish-American businessman who worked last year with Flynn and his consulting business, the Flynn Intel Group.

The company was paid $530,000 to run a campaign to discredit an opponent of the Turkish government who has been accused of orchestrating last year’s failed coup in the country.

Investigators want to know if the Turkish government was behind those payments—and if the Flynn Intel Group made kickbacks to the businessman, Ekim Alptekin, for helping conceal the source of the money. The line of questioning shows that Mueller’s inquiry has expanded into a full-fledged examination of Flynn’s financial dealings, beyond the relatively narrow question of whether he failed to register as a foreign agent or lied about his conversations and business arrangements with Russian officials.

Flynn lasted only 24 days as national security adviser, but his legal troubles now lie at the center of a political storm that has engulfed the Trump administration. For months, prosecutors have used multiple grand juries to issue subpoenas for documents related to Flynn.

President Donald J. Trump has publicly said Mueller should confine his investigation to the narrow issue of Russia’s attempts to disrupt last year’s presidential campaign, not conduct an expansive inquiry into the finances of Trump or his associates. Flynn declined to comment. Ty Cobb, special counsel to Trump, said,

“We’ve said before we’re collaborating with the special counsel on an ongoing basis.”

“It’s full cooperation mode as far as we are concerned,” he added.

After Flynn’s dismissal, Trump tried to get James Comey, the FBI director, to drop the investigation, Comey said. Mueller is investigating whether Trump committed obstruction of justice in pressing for an end to the Flynn inquiry. The president fired Comey on May 9.

Investigators are also examining the flow of money into and out of the Flynn Intel Group—a consulting firm Flynn founded after being forced out as the director of the Defense Intelligence Agency—according to several potential witnesses who have been interviewed by prosecutors and FBI agents.

Taking money from Turkey or any foreign government is not illegal.

But failing to register as a foreign agent is a felony, and trying to hide the source of the money by routing it through a private company or some other entity, and then paying kickbacks to the middleman, could lead to numerous criminal charges, including fraud. New York Times News Service

said Corey Jahn, the Gestamp plant director, standing next to powerful cold-stamping machines that press sheets of metal into wheelhouses, door sills and floor plenums. The neighborhood supply chain significantly reduces shipping costs and turnaround times, while an American presence avoids the effect of currency fluctuations on profits. “ We follow our customers

throughout the world,” Jahn added.

Japan is the biggest foreign investor, employing 3,000 nearby residents at Japanese companies, like Komatsu, Toshiba, Hitachi Metals and Toyota.

The Haier Group of China has 1,500 people working at its appliance-manufacturing factory. Wacker Polysilicon North America, a German company, employed 650 people

full time in its Bradley County plant after investing $2.5 billion—the largest private investment in the state’s history. A $150-million expansion will add 50 jobs.

Many of the companies have also established apprenticeship, training and internship programs with the local community college and high schools, Kilbride said.

Foreign businesses seeking to expand their piece of the North American market say they are drawn to Chattanooga’s location; its rail, port and interstate highway connections; dependable electric power; supply pipelines; probusiness tax provisions; and trainable work force.

Political leaders and the chamber also highlight as incentives the lack of state property and income taxes and the absence of unions.

Still, the antitrade talk streaming out of the White House is unsettling.

“That keeps me up at night,” said Mary Beth Hudson, vice president of Wacker Polysilicon. “We depend on global trade.” Some raw materials, equipment and spare parts come from abroad, she added.

Of greater concern are the import duties that the Trump administration could impose on the foreign solar-panel makers that Wacker supplies, potentially cutting into the sales of the final product in the US. “We want to make sure there’s customers out there to buy our materials,” Hudson said. New York Times News Service

A8

The World BusinessMirror

Monday, August 7, 2017

www.businessmirror.com.ph

UN imposes tough new sanctions on N. Korea

U

NITED NATIONS—The UN Security Council unanimously approved tough new sanctions last Saturday to punish North Korea for its escalating nuclear and missile programs, including a ban on coal and other exports worth over $1 billion—a huge bite in its total exports, valued at $3 billion last year.

US Ambassador Nikki Haley called the resolution “the single largest economic sanctions package ever leveled against the North Korean regime” and “the most stringent set of sanctions on any country in a generation.”

But she warned that it is not enough and “we should not fool ourselves into thinking we have solved the problem—not even close.”

“The threat of an outlaw nuclearized North Korean dictatorship remains...[and] is rapidly growing more dangerous,” Haley told council members after the vote.

The US-drafted resolution, negotiated with North Korea’s neighbor and ally China, is aimed at increasing economic pressure on Pyongyang to return to negotiations on its nuclear and missile programs—a point stressed by all 15 council members in speeches after the vote.

President Donald J. Trump tweeted: “The United Nations Security Council just voted 15-0 to sanction North Korea. China and Russia voted with us. Very big financial impact!”

US Secretary of State Rex Tillerson, in Manila for talks with regional counterparts, called it “a good outcome.”

China’s Foreign Minister Wang Yi called for all sides in the nuclear

$1B

Chinese Ambassador to the United Nations Liu Jieyi votes during a Security Council meeting on a new sanctions resolution that would increase economic pressure on North Korea to return to negotiations on its missile program, on August 5 at UN headquarters. AP/Mary Altaffer

dispute to return to negotiations and repeated Beijing’s proposal for a “double suspension,” or a halt to North Korean nuclear development and joint US-South Korean military exercises.

Haley told the Security Council that US-South Korean military exercises have been carried out regularly and openly for nearly 40 years and “they will continue.”

The Security Council has already imposed six rounds of sanctions that have failed to halt North Korea’s drive to improve its ballistic-missile and nuclear-weapons capabilities.

The resolution’s adoption follows North Korea’s first successful tests of intercontinental ballistic missiles capable of reaching the US on July 3 and 27.

It condemns the launches “in the strongest terms” and reiterates previous calls for North Korea to suspend all ballistic missile launches

and abandon its nuclear weapons and nuclear program “in a complete, verifiable and irreversible manner.”

The centerpiece is a ban on North Korea exports of coal, iron, lead and seafood products—and a ban on all countries importing these products, estimated to be worth over $1 billion in hard currency.

According to a Security Council diplomat, coal has been North Korea’s largest export, earning $1.2 billion last year, which was then restricted by the Security Council in November to a maximum $400 million. This year Pyongyang was estimated to earn $251 million from iron and iron ore exports, $113 million from lead and lead ore exports and $295 million from fish and seafood exports, the diplomat said.

The resolution also bans countries from giving any additional permits to North Korean laborers—another source of money for Kim Jong Un’s regime. And it prohibits all new joint ventures with North Korean compa-

The estimated amount of North Korea’s exports affected by the new sanctions on North Korea

Oil pares weekly drop as US job growth improves demand outlook

O

il pared a weekly decline as strong US jobs growth improves the outlook that rising demand may counter the supply glut roiling the market since 2014.

Futures rose 1.1 percent in New York last Friday, trimming a weekly drop to 0.3 percent. While American production hovers at its highest since July 2015 and output from Organization of Petroleum Exporting Countries (Opec) climbed last month, sliding stockpiles and the prospects for improved demand growth lent to a more positive sentiment. The US economy added 209,000 payrolls in July.

“The good jobs report made people think that the economy is still going strong and demand will be rebalancing the market faster than expected,” Michael Lynch, president of Strategic Energy and Economic Research in Winchester, Massachusetts, said by telephone.

The US benchmark settled above $50 a barrel earlier this week for the first time since May, following an 8.6-percent rally last week, the biggest this year.

The breach of the key level didn’t last long, though, as doubts still linger that the Opec and its allies will succeed in rebalancing the market. Russia says it has kept output levels from May and plans to do so until the Opec productioncut pact expires.

West Texas Intermediate (WTI) for September delivery added 55 cents in its biggest one-day rally of the week, settling at $49.58 a barrel on the New York Mercantile Exchange. Total volume traded was about 2.3 percent below the 100day average.

Brent for October settlement gained 41 cents to close the session at $52.42 a barrel on the

London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $2.69 to October WTI.

Seasonal Strength

U.S. oil output expanded by 20,000 barrels a day to 9.43 million last week, the Energy Information Administration said last Wednesday.

Nationwide crude stockpiles have declined the past five weeks and fuel demand jumped by 21,000 barrels a day to 9.84 million last week, a record high.

But as the summer driving season ends next month, the boost it has given to the oil market may fade.

“To really push above $50, we need to see signs that this isn’t seasonal strength in the market,” said Gene McGillian, market research manager at Tradition Energy in Stamford, Connecticut.

Oil-market news

The number of oil rigs in the US dropped by one this week, to 765, according to Baker Hughes data.

US crude exports averaged about 786,400 barrels a day in June, a six-month low, according to Bloomberg calculations of US Census Bureau data released last Friday.

Shale explorers from Pioneer Natural Resources Co. to Devon Energy Corp. are among drillers amassing hedges that protect their future proceeds as far out as 2023, according to data compiled

by Bloomberg.

Russian oil giant Rosneft PJSC disclosed a $1.02-billion advance payment to Venezuela’s state producer after the US sanctioned President Nicolas Maduro last Monday.

Bloomberg News

nies and bans new foreign investment in existing ones.

It adds nine North Koreans, mainly officials or representatives of companies and banks, to the U.N. sanctions blacklist, banning their travel and freezing their assets. It also imposes an asset freeze on two companies and two banks.

The council diplomat, who was not authorized to speak publicly and insisted on anonymity, called the newly sanctioned Foreign Trade Bank “a very critical clearing house for foreign exchange.”

The Mansudae Overseas Project Group of Co. which was also added to the blacklist, is described in the resolution as engaged in exporting workers for construction, including of monuments, in Africa and Southeast Asia.

The resolution asks the Security Council committee monitoring sanctions against North Korea to ban the import of many more so-called dual-use items, which have commer-

cial purposes but can also be used in conventional, biological, chemical or nuclear weapons.

It also gives the committee a green light to designate specific vessels that are breaking sanctions from entering ports all over the world and to work with Interpol to enforce travel bans on North Koreans on the sanctions blacklist.

The resolution expresses regret at North Korea’s “massive diversion of its scarce resources toward its development of nuclear weapons and a number of expensive ballistic missile programs”—a point stressed

by Haley. It notes UN findings that well over half the population lacks sufficient food and medical care, while a quarter suffers from chronic malnutrition.

“These sanctions will cut deep, and in doing so will give the North Korean leadership a taste of the deprivations they have chosen to inflict on the North Korean people,” Haley said. “Revenues aren’t going toward

feeding its people. Instead, the North Korean regime is literally starving its people and enslaving them in mines and factories in order to fund these illegal missile programs.”

Though the economic sanctions have teeth, Washington didn’t get everything it wanted.

In early July Haley told the Security Council that if it was united, the international community could cut off major sources of hard currency to North Korea, restrict oil to its military and weapons programs, increase air and maritime restrictions and hold senior officials accountable.

Neither oil nor new air restrictions are included in the resolution.

Its adoption follows Tillerson’s comments last Wednesday reassuring North Korea that Washington is not seeking regime change or an accelerated reunification of the Korean Peninsula—comments welcomed by China’s foreign minister.

Russia’s UN Ambassador Vassily Nebenzia said Moscow hopes Tillerson’s assurances “would be clear that the United States is not seeking to dismantle the existing...situation [in North Korea] or to force to reunite the country or militarily intervene in the country.”

Tillerson also said the US wants to talk eventually with North Korea but thinks discussions would not be productive if Pyongyang comes with the intention of maintaining its nuclear weapons. North Korea has repeatedly said it will never give up its nuclear arsenal, which it sees as a guarantee of its security.

The resolution reiterates language from previous ones supporting a return to six-party talks with the goal of denuclearizing the Korean Peninsula; expressing the Security Council’s commitment “to a peaceful, diplomatic and political solution to the situation”; and stressing the importance of maintaining peace and stability in northeast Asia. AP

Gene editing for ‘designer babies’ highly unlikely

N

ow that science is a big step closer to being able to fiddle with the genes of a human embryo, is it time to panic? Could embryo editing spiral out of control, allowing parents to custom order a baby with Lin-Manuel Miranda’s imagination or Usain Bolt’s speed?

News that an international team of scientists in Oregon had successfully modified the DNA of human embryos has renewed apprehensions that babies will one day be “designed.” But there are good reasons to think that these fears are closer to science fiction than they are to science.

Here is what the researchers did: repair a single gene mutation on a single gene, a defect known to cause—by its lonesome—a serious, sometimes fatal, heart disease.

Here is what science is highly unlikely to be able to do: genetically predestine a child’s Ivy League acceptance letter, front-load a kid with Stephen Colbert’s one-liners, or bake Beyoncé’s vocal range into a baby.

That’s because none of those talents arise from a single gene mutation, or even from an easily identifiable number of genes. Most human traits are nowhere near that simple.

“Right now, we know nothing about genetic enhancement,” said Hank Greely, director of the Center for Law and the Biosciences at Stanford. “We’re never going to be able to say, honestly, ‘This embryo looks like a 1550 on the two-part SAT [satellite chromosome].’”

Even with an apparently straightforward physical characteristic like height, genetic manipulation would be a tall order. Some scientists estimate height is influenced by as many as 93,000 genetic variations. A recent study identified 697 of them.

“You might be able to do it with something like eye color,” said Robin Lovell-Badge, a professor of genetics and embryology at the Francis

Crick Institute in London.

But “if people are worried about designer babies, they’re normally thinking of doing special—different things than the normal genetic stuff.”

The gene-modification process used in the new study also turns out to be somewhat restrictive. After researchers snipped the harmful mutation from the male gene, it copied the healthy sequence from that spot on the female gene.

That was a surprise to the scientists, who had inserted a DNA template into the embryo, expecting the gene to copy that sequence into the snipped spot, as occurs with gene editing in other body cells. But the embryonic genome ignored that template, suggesting that to repair a mutation on one parent’s gene in an embryo, a healthy DNA sequence from the other parent is required.

“If you can’t introduce a template, then you can’t do anything wild,” Lovell-Badge said. “This doesn’t really help you make designer babies.”

Talents and traits aren’t the only thing that are genetically complex.

So are most physical diseases and psychiatric disorders. The genetic message is not carried in a 140-character tweet—it resembles a shelf full of books with chapters, subsections and footnotes.

So embryonic editing is unlikely to prevent most medical problems.

But about 10,000 medical conditions are linked to specific mutations, including Huntington’s disease, cancers caused by BRCA genes, Tay-Sachs disease, cystic fibrosis, sickle cell anemia and some cases of early-onset Alzheimer’s.

Repairing the responsible mutations in theory could eradicate these diseases from the so-called germline, the genetic material passed from one generation to the next. No future family members would inherit them.

But testing editing approaches on

each mutation will require scientists to find the right genetic signpost, often an RNA molecule, to guide the gene-snipping tool.

In the study reported last week, it took 10 tries to find the right RNA, said Juan Carlos Izpisua Belmonte, a coauthor and geneticist at the Salk Institute. Greely noted that while scientists work to get human embryonic editing ready for clinical trials (currently illegal in the US and many countries), alternate medical treatments for these diseases might be developed. They may be simpler and cheaper.

“How good one technique is depends on how good the alternatives are, and there may be alternatives,” he said. The authors of the new study do not dismiss ethical implications of their work. In fact, Belmonte served on a committee of the National Academies of Science, Engineering and Medicine that in February endorsed research into gene editing of human embryos, but only to prevent serious diseases and conditions, and as a last resort.

“In theory this could lead to the kind of intervention which, of course, I’m totally against,” Belmonte said.

“The possibility of moving forward not to create or prevent disease but rather to perform gene enhancement in humans.” For example, soon “we will know more and more about genes that can increase your muscle activity,” he said. The hormone EPO (erythropoietin), which some athletes have been disciplined for taking, “is produced by a gene, so you could in theory engineer yourself to produce more EPO.” That is the kind of genetic engineering that raises alarm.

“Allowing any form of human germline modification leaves the way open for all kinds—especially when fertility clinics start offering ‘genetic upgrades’ to those able to afford

them,” Marcy Darnovsky, executive director of the Center for Genetics and Society, said in a statement. “We could all too easily find ourselves in a world where some people’s children are considered biologically superior to the rest of us.”

Scientists and ethicists share the concerns about access. “Any intervention that goes to the clinic should be for everyone,” Belmonte said. “It shouldn’t create inequities in society.”

Unequal access is, of course, a question that arises with almost any new medical intervention, and already disparities deprive too many people of needed treatments.

But there is a flip side to ethical arguments against embryo editing.

“I personally feel we are duty bound to explore what the technology can do in a safe, reliable manner to help people,” Lovell-Badge said. “If you have a way to help families not have a diseased child, then it would be unethical not to do it.”

Genetic engineering doesn’t have to be an all or nothing proposition, some scientists and ethicists say.

There is a middle ground to stake out with laws, regulation and oversight.

For example, Lovell-Badge said, Britain highly regulates pre-implantation genetic diagnosis, in which a couple’s embryos are screened for certain harmful mutations so that only healthy ones are implanted in the woman’s womb.

“They allow sensible things to be done, and they don’t allow non-sensible things,” he said. “And every single embryo is accounted for. If someone tries to do something they shouldn’t have done, they will find out, and the penalties for breaking the law are quite severe.”

According to a 2015 article in the journal Nature, a number of countries, including the US, restrict or ban genetic modification of human embryos. New York Times News Service

The World BusinessMirror

news@businessmirror.com.ph

New Venezuela assembly ousts chief prosecutor

V

enezuela’s newly convened assembly ousted Chief Prosecutor Luisa Ortega Diaz, the highest-ranking member of President Nicolas Maduro’s administration to break ranks. Separately, the oil-rich nation was suspended from the regional trading group Mercado Común del Sur (Mercosur, or Southern Common Market in English).

The assembly, elected in a ballot on July 30 that the opposition boycotted, voted last Saturday to permanently remove Ortega Diaz, 59, from her post after the Supreme Court ruled last Friday evening to suspend her and send her to trial.

Human Rights Ombudsman Tarek William Saab, a Maduro supporter, was named as her replacement. The assembly also voted last Saturday to stay in place for a maximum of two years. That will allow it to “take new economic and institutional measures to reorganize the state,” including a restructuring of the public prosecutor’s office over the coming weeks, Hermann Escarra, a constitutional expert and adviser to Maduro, told state TV. “There’s a coup being carried out against the Constitution led by the Supreme Court and the executive branch,” Ortega Diaz said in a statement posted on the Public Prosecutor’s office’s Twitter account. “I’ll keep fighting for the freedoms and rights of Venezuelans until my last breath.”

The government, which is becoming increasingly isolated and remains under threat of economic sanctions from the US, has wasted no time in using the constituent assembly to go after the last vestiges of criticism in public institutions and to weaken the opposition-led congress. The day after the July 30 ballot, Maduro jailed two prominent opposition leaders.

Sanctions questions

A more difficult task, however, will be to fix the economy. The currency has sank in the past week to about 18,000 per dollar in the black market compared with official rates of 10 per dollar and 2,800. Beyond threatening to jail merchants who raise prices, Maduro hasn’t said what economic measures he may take to address skyrocketing inflation and a deep recession that has entered its fourth year.

Additional US actions are possible, including moves to target Venezuelan oil exports. Venezuela, a founding member of the Organization of Petroleum Exporting Countries, has the world’s largest proven oil reserves and is South America’s largest crude exporter.

Maduro already has been personally sanctioned by the US, which accused him of undermining democracy. Venezuela’s suspension from Mercosur—for the second time in the past year—came after foreign ministers from Brazil, Argentina, Uruguay and Paraguay held an emergency meeting in Sao Paulo. Mercosur members said the suspension would continue until democratic order is restored.

“Today’s unanimous decision for the suspension of Venezuela is a serious political sanction,” Aloysio Nunes Ferreira, Brazil’s foreign minister, said on his verified Twitter account. A country that commits such barbarities against fundamental freedoms cannot be part of our association.

Mercosur’s members will take measures aiming at reducing the negative impacts of today’s decision on Venezuelan people, the ministers said in a statement.

Earlier, National Guard officers surrounded Ortega Diaz’s Caracas offices. She posted photographs of the uniformed guards outside the building on her Twitter account and labeled it a “siege.” The Public Ministry’s Twitter account said the guards were not allowing workers to enter or leave. Bloomberg News

Monday, August 7, 2017

Immigration curbs may be wrong way to boost weak US wage gains

I

t’s high time American workers saw bigger paychecks. But President Donald J. Trump’s plan to do that by limiting immigration may not be the right tool for the goal.

Average hourly earnings rose 2.5 percent in July from a year earlier for a fourth straight month, matching the rate of the past two years, according to Labor Department data issued last Friday.

While hiring continued at a solid pace and the unemployment rate matched a 16-year low, growth in worker pay has stalled at levels below recent expansions that typically produced gains of 3 percent or faster, even as companies frequently cite labor shortages.

Enter Trump, who this week endorsed a proposal to restrict legal immigration and give priority to those with higher skills, arguing that in the process, wages would rise across the board.

While attracting the world’s best and brightest may be a worthy goal, many economists doubt that shrinking the pool of foreign workers will make employers boost compensation, or help the economy, attributing the weak pay gains to other factors.

“Weak wage growth has to do with the real change we’re seeing in corporate behavior and longer-term trends” such as automation and the rise of megafirms that have more leeway to limit labor costs, said Scott Brown, chief economist at Raymond James Financial in Saint Petersburg, Florida. “Companies are not going to boost your salary until you have one foot out the door. That’s the way Corporate America works these days.”

Besides, “I don’t think immigration has that big of an impact on wages,” so the new plan to restrict it “doesn’t make much sense at all,” Brown added.

Green cards

Republican Sens. Tom Cotton of Arkansas and David Perdue of Georgia have proposed legislation to evaluate visa applications based on merit, with a preference for people with higher

education or job skills.

The bill, seeking to dramatically overhaul the current system, would significantly slash the number of green cards issued and eliminate some benefits for prospective immigrants with family members already in the US. It would also cap annual refugee admissions, and end a visa lottery meant to diversify the immigrant population.

The plan “will reduce poverty, increase wages and save taxpayers billions and billions of dollars,” Trump said at the White House last Wednesday. The US should “favor applicants who can speak English, demonstrate they can financially support themselves and their families and demonstrate skills.”

While the bill is unlikely to pass the Senate, Trump’s support reflects pledges he made on the campaign trail to limit immigration and help working Americans.

Meanwhile, the solid run of hiring, business and consumer surveys—as well as company comments—indicate workers at all levels of the skills ladder are in demand.

Job openings remain elevated and the Federal Reserve’s (the Fed) regional surveys mention worker shortages. The National Federation of Independent Business reported that in July the share of small firms having trouble filling positions was the highest since 2000.

While supporters of the proposed immigration restrictions say they would help lowincome and minority Americans gain employment, the July data showed Americans on the sidelines and those who are less qualified are also getting absorbed. This is happening even as current levels of immigration remain intact, indicating there’s work for those who want it.

Local demand

Still, few employers are willing to pay more,

Bare-breasted Putin goes spearfishing

In this photo released by Kremlin news service on August 5, Russian President Vladimir Putin rests after fishing during a minibreak in the Siberian Tyva region, a few days ago. Alexei Nikolsky/Sputnik, Kremlin Pool Photo via AP

B

race yourselves for the latest addition to President Vladimir Putin’s macho exploits in the wilds of Russia. The Kremlin says he went spearfishing during a brief vacation last week, donning a wetsuit and snorkel mask equipped with a GoPro camera to film himself in a chilly Siberian lake.

Footage released last Saturday by Russian state television stations showed Putin steering an inflatable boat and fishing barechested with a rod, accompanied by Defense Minister Sergei Shoigu and other officials.

“He was chasing a pike for two hours and just couldn’t hit it, but he managed to get it in the end,” Kremlin Spokesman Dmitry Peskov told reporters on a conference call last Friday.

“It’s a good catch,” a beaming Putin said, displaying his spoils.

While the lake isn’t usually warmer than 17 degrees Celsius, “that didn’t keep the president from going for a swim”, and he wore a wetsuit and snorkel mask equipped with the camera while fishing, Peskov added.

Putin spent two days in the remote region of Tuva, Southern Siberia, accompanied by Shoigu, going hiking in the taiga and riding rafts and motor boats on a mountain lake, Peskov said.

The Kremlin plans to release “absolutely brilliant” drone footage of the visit on Monday, as well as “unique” material from Putin’s camera, he added. The fishing trip adds to Putin’s tradition of outdoor adventures, all faithfully captured on camera to bolster his action-man image for the public.

In 2008 he shot a Siberian tiger with a tranquilizer gun, reportedly saving a TV crew from attack.

Two years later he hugged a sedated polar bear during a visit to the Arctic. He’s also been shown in the past catching a giant pike and discovering ancient Greek urns while scubadiving in the Black Sea. Putin also scored seven goals in a hockey game for his 63rd birthday in 2015.

Bloomberg News and AP

and the industries and regions seeing a pickup are driven by localized supply and demand, said Brown, who’s noticing this in his area in Florida.

Fed economists, as well as Chairman Janet Yellen, have made the case that immigrant workers would expand the labor force and cushion the slide in the participation rate under way due to an aging population. By spurring innovation, foreigners have also helped boost US productivity and create new businesses.

Even with changes in immigration, “in the long run, it shouldn’t affect aggregate wage growth,” said Michael Feroli, chief US economist at JPMorgan Chase ang Co. At the same time, it could potentially affect how wages of skilled workers perform relative to their lessskilled counterparts, he added.

A9

The persistent weakness in worker pay is entrenched in other longer-term trends.

Among those: robots or technological change, low productivity and more consolidation that has created bigger firms with greater power to set wages.

Outsourcing to low-cost overseas locations and the decline in union membership in recent decades also has hurt workers’ bargaining power.

“I don’t think immigration policy can be finely tuned to address cyclical economic issues” such as wage growth, said Feroli, who previously worked at the Fed. Achieving an acceleration in earnings in the shorter term is “probably better addressed by things like monetary policy than immigration policy.” Bloomberg News

A10 Monday, August 7, 2017

The World

The company started a single project with 13 employees in Davao City sometime in the early 2000s.

8990 Housing Development Corp. was established in 2003 and Atencio became its CEO in 2005.

Atencio earlier announced during 8990’s annual stockholders’ meeting that he is stepping down from his position by the end of the year, hoping to retire from the property industry after a quarter of a century.

Atencio, the de facto face of the mass housing developer that became public in 2014, will be replaced by current chief operating officer Willibaldo Uy, who “shall take a more active and decisive role for the rest of the year”.

“As early as two years ago, I started telling everyone, my partners, relatives, family of my intention to retire at 55. Next year, I would be celebrating 25 years in the housing industry as I turn 56 in January,” he said.

“Realizing that I am at the homestretch of life and wanting to do something else, my partners and the board have agreed with my wish to retire on December 31 this year. And so I am happy, excited even to say goodbye to this industry that has given me a meaning life, and has prepared me for the next chapter of my book, whatever that may be,” he said.

Atencio and his partners established 8990 some 13 years ago, “driven by the idea that housing is not about houses, it’s about people and how we can use this housing business as a vehicle to make people lives better. We, together with our executive and teams continue to live this vision everyday.”

Atencio will leave 8990 as the company is experiencing a sluggish growth, after it failed to sustain its number of launches due to its inability to secure several permits.

BusinessMirror

www.businessmirror.com.ph

N. Korean missiles add urgency to Hiroshima A-bomb appeals

H

“The new dump trucks and hydraulic excavators are designed to be more fuel efficient so they will contribute to the reduction of our carbon footprint and operating costs,” said Consunji.

According to its Japanese heavy equipment supplier, fuel consumption of the new dump trucks may be reduced by as much as 14 percent compared to older models. Fuel expenses account for about 40 to 45 percent of SMPC’s mining costs. as well as Japan, to join the nuclearsurvive reentry into the atmosphere “This is just the start of our fleet modernization program.

We plan continue thisby next decommissioning aging heavy equipment and replacing them with newer models,” said Consunji. weapons banto treaty adopted theyear byfrom space or even our hit an intended target. Such developments draw United Nations in July. mixed feelings from Kim Ji Nho, a Fujimori said that each August 6, pro-Pyongyang ethnic Korean who his late mother, who also survived, was born in Hiroshima. insisted on retelling the story of the Kim, 71, is a hibakusha, or atomicattack to children in their neighborbomb survivor, who was exposed to hood, saying she had to keep remindradiation when his mother, pregnant ing them to help prevent the same with him, went to the ruins of the city mistake from happening again. to search for a daughter who went Decades later, 73-year-old Fujimori missing in the blast. He grew up in a himself is a leader of Hidankyo, a community of ethnic Koreans in the major organization of atomic-bomb city and has a relative who had since survivors.

“We must eradicate nuclear weapmoved to North Korea. ons from the Earth to make the world He is critical of the US, and says a safe place to live,” he said in an inonly dialogue, not military actions When the US dropped the bomb sense of alarm in Hiroshima, where terview. “There is still a lot to do and or threats, can resolve tensions with we must keep working on it.” the erratic leadership in Pyongyang. on August 6, 1945, Toshiki Fujimo140,000 died in that first A-bomb atHe said the adoption of the UN But regarding nuclear weapons, ri’s mother was carrying him, then tack, which was followed on August nuclear weapons ban, which was “We hibakusha and our groups share just a year old, piggyback to the 9, 1945, by another that killed more boycotted by all nuclear-armed naa clear goal, which is to abolish nuhospital. The impact of the explothan 70,000 people in Nagasaki. tions, shows that most of the world clear weapons from the world,” Kim sion threw them both to the ground, “This hell is not a thing of the said. “Nuclear weapons should never nearly killing him. past,” Hiroshima Mayor Kazumi supports that cause. be used.”

“Obviously, tensions are growMatsui said in his peace declaration Two recent test-firings of HwaLike his father, many Koreans ing as North Korea has been pushat Sunday’s ceremony. “As long as song-14 intercontinental ballistic were brought to Hiroshima, a waring ahead with nuclear tests and nuclear weapons exist and policymissiles suggest that major US citPeople attend a ceremony to mark the 72nd anniversary of the world’s first atomic bombing that time military hub, as forced laborers development,” Fujimori said. “Numakers threaten their use, their ies, such as Los Angeles and Chicago, killed 140,000 people at the Peace Memorial Park in Hiroshima, western Japan, on August 6. during Japan’s colonization of the clear weapons just are unacceptable horror could leap into our present at are within range of North Korean Ryosuke Ozawa/Kyodo News via AP Korean Peninsula in the first half for mankind.” any moment. You could find yourself weapons. Such missiles could be In his message to Hiroshima, UN of the 20th century. They and their cause being hibakusha could only Many Japanese and others in the suffering their cruelty.” armed with nuclear, biological or mean more trouble. The two surviSecretary-General Antonio Guterres descendants have endured outright region seem resigned to North KoToday, a single bomb can cause chemical warheads, although many vors said Japan’s refusal to join the said the presence of some 15,000 discrimination by Japanese. rea’s apparent newfound capacity even greater damage than the bombs experts say North Korea hasn’t fully UN nuclear treaty, apparently benuclear weapons along with “dangermastered miniaturizing nuclear warSo have A-bomb survivors: Kim’s to launch missiles capable of reachdropped 72 years ago, he said. “Hucause it’s protected under the US nuous rhetoric regarding their use” has heads and might not have the techfather had told him to keep mum ing much of the continental United mankind must never commit such an clear umbrella, was heartbreaking. exacerbated these threats. AP act,” he said, urging nuclear states, nology to ensure a warhead would about his radiation exposure, beStates. But the threat lends a deeper

IROSHIMA, Japan—Hiroshima’s appeal of “never again” on the anniversary last Sunday of the world‘s first atomic-bomb attack has gained urgency as North Korea moves ever closer to acquiring nuclear weapons, showing its growing prowess with increasingly frequent missile launches.

OBITUARY

Rosauro “Roy” Acosta Aug. 18, 1941 – Aug. 4, 2017 ROSAURO “ROy” G. ACOSTA, former editor in chief of the BusinessMirror, passed away on August 4, 2017. He was a few days short of 76.

He is survived by his wife the former Carmelita del Mundo, daughterin-law Mabel Guia Acosta, and granddaughters Xeres Jasmine and Xeleena Jordan; brother Samuel; sisters Eufrocinia and Aurora; nieces and nephews; grandnephews and grandnieces; and other relatives.

Before joining the BusinessMirror, Mr. Acosta worked as a reporter with the Philippine Herald covering the Vietnam War, DZHP (Herald’s radio station), desk editor at Times Journal, managing editor at the Philippine Daily Inquirer, and Manila Standard.

Viewing of ashes is until August 7 at the Imperial Classic Chapel in Funeraria Paz on Araneta Avenue in Quezon City.

Interment will be on August 8 in Himlayang Pilipino.

In lieu of flowers, the family requests Mass cards for “Tatay” Roy.

news@businessmirror.com.ph

AseanMonday BusinessMirror

Time to turn a new leaf on South China Sea issue

B

EIJING—The foreign ministers of China and Asean endorsed the framework of the Code of Conduct (COC) in the South China Sea last Saturday for eventual adoption at the Asean-China meeting last Sunday in Manila, the Philippines, a substantial step toward calming disputes in the waterway and reaching a long-term solution to a once thorny issue.

The draft document on the COC, an official declaration professing common aspiration to maintain peace and stability in the region, is regarded as a concrete step to resolving the South China Sea dispute.

Such encouraging advancement notwithstanding, related parties should cherish the hard-won results achieved through numerous rounds of bargaining accommodation, remain vigilant against outside interference and deliver on their joint commitments.

China and the Asean committed to reaching a final COC 15 years ago.

The framework was agreed upon in May during a senior officials’ meeting on the implementation of the Declaration on the Conduct of the Parties in the South China Sea (DOC) in Guiyang, southwest China’s Guizhou Province.

Setting a rough outline of a COC designed to prevent clashes in the South China Sea, the draft marked a crucial achievement and was hailed as a pivotal milestone for further talks.

Under the agreement, all parties are obliged to reach a final COC to build a South China Sea of peace, friendship and cooperation.

All parties should uphold using the framework of regional rules to manage and control disputes, to deepen maritime cooperation and jointly maintain peace and stability in the South China Sea. In 2002 China and Asean signed the DOC, committing all members

to directly resolve their territorial and jurisdictional disputes through peaceful means.

More than one year after an illfounded award at a South China Sea arbitration unilaterally delivered by an ad hoc tribunal in The Hague, the situation in the South China Sea has stabilized and improved, thanks to the wisdom and sincerity of China and the parties concerned.

Since 2016, the related parties have agreed to set up a senior diplomat hotline to cope with maritime emergencies, and apply the Code for Unplanned Encounters at Sea (Cues) in the South China Sea, which would help cement trust and avoid unexpected issues.

In a joint communique issued in January, China and Vietnam pledged to manage maritime differences and avoid any acts that may complicate the situation and escalate tensions.

In a sign of improvement in bilateral relations, foreign ministers of China and the Philippines decided late last month to seek ways to carry out joint exploration in the South China Sea. In waters where there is an overlapping of maritime rights and interests, unilateral action might complicate the situation and lead to tensions, Chinese Foreign Minister Wang Yi stressed.

China always respects the freedom of navigation and overflight in the South China Sea in compliance with international law, but it should by no means be used as an excuse by certain countries outside the region to stir up trouble.

Asean celebrates its 50th anniversary this year. No time than now is better for all parties to value the sense of community that exists in the South China Sea, object to interference of any form, and move the COC negotiations in the right direction.

Editor: Max V. de Leon • Monday, August 7, 2017 A11

Asean economies face common challenges

W

HILE economies in the Asean remain to be among the most dynamic and resilient in the world, the regional bloc must be wary of the “political consequences” of its economic relationships, a private think tank in Manila said last Friday.

“Asean has some 600 million people or about 10 percent of the global population. Collectively, the Asean economy is the seventh largest in the world. It includes some of the fastest growing economies in the world,” former Foreign Affairs Secretary Albert F. del Rosario said.

“Asean members have shown a skillfulness in exploiting economic

niches,” said del Rosario, chairman of Stratbase ADR Institute (ADRi), in his speech during the “Asean at Fifty: The Way Forward” conference in Makati City. “Our Economic Community, through which we engage the world, helps us to do that.”

“America’s seeming retreat from global leadership on such matters ranging from guarantor of peace

to economic liberalism and even to climate change has led to worldwide uncertainty and lack of direction,” said Ambassador Robert R. Romulo, chairman of the Carlos P. Romulo Foundation. “At the same time, China’s economic clout has translated into the geopolitical sphere.

Russia has again become a player in global security.”

ADRi President Dindo Manhit said the Asean is in “a very tricky” political situation with its neighbor China, which also happens to be the group’s second-largest trading partner after intra-Asean trade.

Manhit cites the case of the Philippines, whose relationship with Beijing had soured following a yearslong arbitration case over disputed territories in the South China Sea. “For the Philippines, there is little to separate our political disagreements with China from our economic ties with it,” he said.

Manhit said China’s status as

an economic power vis-à-vis its much-criticized militarization of the important sea lane, including the recent installation of more facilities in disputed islands, has “translated into fear” among Asean countries, Manhit added.

“Governments fear economic retaliation or backlash.”

This puts at risk the potential of the Asean bloc, whose combined GDP is the sixth-largest in the world and which grew amid a worldwide slowdown. The 625 million people, meanwhile, who call the region home account for nearly a 10th of the global population. The key, Manhit said, is for Asean to define its own leadership.

“To start, the largest states, Indonesia, the Philippines and Vietnam, should consider offering that leadership and serving as the tip of our spear,” Manhit said. “To do otherwise is to cede the initiative to an outside power.”

N. Korea, sea-feud issues, delay Asean communiqué

Xinhua/PNA

Canada pledges $10-M grant for students, professionals

C

ANADA has pledged to provide a $10-million scholarship program for Asean students and professionals in the next five years.

Canadian Foreign Minister Chrystia Freeland said this initiative aims to strengthen people to people ties between the country and Asean through educational exchanges.

“This program will be open to all Asean countries. It will equip students and midcareer professionals with a particular focus on women to provide them critical knowledge and skills to help them contribute in the fight against poverty,” Freeland said in her opening remarks during the Asean-Canada Ministerial Meeting held last Sunday at the Philippine International Convention Center. “We’re excited for the prospects of this program that we will be able to welcome more Asean students and build on people-to-people relationships.”

The foreign minister further stated that Canada is interested to join the East Asia Summit and the Asean Defense Ministers Meeting Plus.

Canada, likewise, vowed to help the Asean in fighting terrorism and violent extremism, as well as promote free trade within the region in line with its foreign policy goals.

“Our core goals internationally: supporting the international rules based order, fighting climate change, fighting terrorism, empowering girls and women. These are goals that are important in our partnership with Asean. We believe that working together we can advance these goals in a meaningful way,” Freeland said.

Canada has been an active dialogue partner of Asean since its first meeting in February 1977, that was later formalized in 1981 with the signing of the Asean-Canada Economic Cooperation Agreement, which came into force on June 1, 1982. PNA

Australia’s Foreign Minister Julie Bishop (sixth from left) links arms with the Asean foreign ministers during the Asean-Australia ministerial meeting on August 6 in suburban Pasay City. The annual forum, hosted

by Asean, brings together the top diplomats from 26 countries and the European Union for talks on political and security issues in Asia Pacific. AP

D

ISAGREEMENTS over North Korea’s intercontinental ballistic missile tests and territorial disputes in the South China Sea prevented the region’s foreign ministers from promptly issuing their joint communiqué after an annual gathering in Manila, two Southeast Asian diplomats said last Sunday.

One of the diplomats told The Associated Press (AP) that Cambodia expressed concern over the issuance by the Asean’s foreign ministers of a separate statement criticizing North Korea’s two ICBM tests last month.

Cambodia wanted its sentiments on the Korean Peninsula better reflected in the Asean foreign ministers’ joint communiqué, stalling its issuance last Saturday after the

ministers concluded their meeting, the diplomat said, adding that Cambodia’s stance may have been influenced by China.

Both Cambodia and North Korea are China’s allies.

The escalating tensions on the Korean Peninsula and efforts by Washington to isolate Pyongyang diplomatically, the long-seething disputes in the South China Sea and alarm over Islamic extremism amid a disastrous siege by Islamic State group-linked militants of a southern Philippine city dominated the ministerial talks.

A Philippine government spokesman, Robespierre Bolivar, had said the ministers’ joint communiqué would be issued promptly on Saturday. He took back the announcement

later and said the communiqué may be made public with other statements on Tuesday.

Another diplomat said that wordings on the South China Sea issue to be included in the communiqué had not yet been finalized, with Vietnam reiterating its position that Asean should cite regional concern over China’s land reclamation and construction of its man-made islands.

The 10-nation Asean may reach an agreement on how to depict their concern on the territorial disputes faster with language that will not include sensitive issues that China objects to, the diplomat said. All the ministers have acknowledged Beijing’s crucial economic and trade relations with each of their countries, the diplomat said.

Both diplomats spoke to the AP on condition of anonymity because they were not authorized to discuss the issues publicly.

China has steadfastly opposed any mention in Asean statements of its island-building in the disputed waters, its reported installation of a missile defense system on the new features and an arbitration ruling that invalidated Beijing’s historic claims to the strategic waters.

Although it’s not an Asean member, China can exert its influence on allies, like Cambodia, to reject any move it deems inimical to its interest. An unwieldy bloc of democracies, monarchies and authoritarian regimes, Asean decides by consensus, meaning just one member-state can shoot down any proposal. AP

SEA association, Korea to advance bilateral ties

T Canadian Foreign Minister Chrystia Freeland delivers her statement during the Asean-Canada ministerial meeting of the 50th Asean foreign ministers’ meeting and its dialogue partners on August 6 in suburban Pasay City. The Philippines is the chair of the meeting, which is represented by Foreign Affairs Undersecretary Enrique Manalo. AP

HE Asean and South Korea vowed to advance their existing bilateral relations.

During the Asean-Republic of Korea (ROK) Ministerial Meeting at the Philippine International Convention Center (PICC) last Sunday, Korean Foreign Minister Kang Kyung-wha said ROK’s government is committed to expand its diplomatic horizon by strengthening partnership with Asean.

Kang noted that Korean President Moon Jae-in sent a special envoy to the Asean, reiterating the importance of the Asean-ROK relations.

She added that the Korean

government has three directions in strengthening Asean-ROK ties, which include pursuing mutual and sustainable prosperity, increasing people-to-people exchanges and partnering in building a peaceful and safe “new East Asia”.

“In translating these aspirations into reality, we should continue to carry out the Plan of Action to implement the Joint Declaration on Asean-ROK Strategic Partnership for Peace and Prosperity for the year 2016-2020,” Kang said.

“And we count on Asean’s undivided support and collaboration in this process,” added Kang, who is the

first female Korean foreign minister.

Moreover, Cambodian Foreign Minister Prak Sokhon—the cochair for the Asean-ROK ministerial Meeting—reaffirmed the regional bloc’s readiness to work with South Korea to further strengthen and elevate Asean-ROK strategic partnership. Cambodia is the country coordinator for the Asean-ROK dialogue relations.

“Asean is very pleased with the progress of our cooperation with the ROK in many areas covering from the sensitive political and security areas to trade and investment, culture, arts and people-to-people

exchange,” Prak Sokhon said. He added an Asean Cultural House in Busan will be launched next month.

On the economic front, the diplomat emphasized that Asean is keen on concluding the Regional Comprehensive Economic Partnership—a free trade agreement (FTA) among Asean, Australia, New Zealand, India, Japan, China and South Korea.

Prak Sokhon, likewise, noted that the Asean-Korea FTA will help the two parties achieve their $200-billion bilateral trade target by 2020, as well as help micro, small and medium enterprises in Asean and ROK. Kris M. Crismundo/PNA

Green Monday BusinessMirror

A12 Monday, August 7, 2017

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

₧50M worth of ‘hot logs’ ready for Marawi’s rehab–DENR exec

The climate shift: Warming to warning

P

olar ice caps in Antartic are said to be formed some 33.6 years ago. Several million years ago, the Earth had undergone natural climate phase. Layers of snow piled up and compressed together forming gigantic layers of ice.

Scientist gradually studied patterns and sequence of weather conditions in that area. They invested much of their time generating new knowledge through numerous explorations and research.

Polar ice caps are home to numerous magnificent colorful creatures often times seen in television cartoons. Certainly, polar bears and penguins topped the most adorable animals in the minds of the children. Polar animals, as well as its environment, became one of the most interesting fields of study.

However, one of the things they found out is that the disturbance in the natural phasing of the earth’s climate can be felt mostly in the cold region. The effect of anthropogenic activities on climate became very alarming.

Global warming is a natural phenomenon wherein the Earth, through greenhouse gases, trap sun’s energy and radiate it in all directions. As a result, it makes the planet livable. Without these gases, the earth will be approximately 30 degrees Celsius colder.

Still, human-induced global warming caused by burning of coals and fossil fuels adds up to the greenhouse gases in the atmosphere, trapping more and more heat, eventually making the global temperature much warmer.

Due to this, melting of polar ice caps occurs. It is important to note that global warming is a “symptom” of climate change.

The United Nations’ Intergove r n me nt a l Pa ne l on C l imate Change had discussed the changes in the behavior of the animals, for instance, the earlier breeding season for birds or forced migration of animals due to i n ad apt a ble we at he r cond it ion. A n i m a l s t h at a re not capable of adapting to the new and f luctuating weather condition are ver y vulnerable to extinction.

It is not only animals that are extremely affected by this abrupt shift in climate. This imbalance creates a lot of negative consequences for humans. One of which is the sea-level rise. Coastal countries, like the Philippines, may experience severe flooding.

In one of the plenary presentations at the 17th Science Council of Asia Conference, hosted by the National Research Council of the Philippines (NRCP) in June at the Philippine International Convention Center, Dr. Josefino C. Comiso, a senior scientist from the National Aeronautics and Space Administration-Goddard Space Flight Center, proposed several actions on how to combat climate change.

Research efforts vs climate shift

Comiso pointed out that gradual shift of energ y source from coa l and fossil f uel to other renewable-energ y sources, like geothermal, solar, the wind and biofuel, can accelerate the recover y of the planet.

In the 2016 Power Situation report of the Philippines’s Department of Energy, the country still gets most of its energy supply from coal-power plants but the growing trend to shift from renewable energy is undeniable.

Comiso added that the popularity and potential of new technologies and innovations, like smart cars, powerful batteries, cheap solar cells, hydrogen fuel, nuclear fusion and flywheel storage system, can hasten dramatically the shift to a more sustainable future.

Comiso It was in 1997 when the NRCP Division of Earth and Space Sciences (NRCP Division 12) started to shift its focus from mining studies to natural disasters and climate change.

Research prog rams were veered toward these fields, concentrating on mitigating and adapting to the various impacts and its long-term effects, like the continuous rise temperature, the changes in the period of wet and dry season. They include the changes in the precipitation pattern, drought, heat waves, intense typhoon and the sea-level rise and tremendous flooding.

Since then, the members of NRCP Div ision 12 who are acclaimed geolog ists, geophysicists and meteorolog ists committed to contributing through var ious research undertak ings in the resolution of the climate c h a n ge - re l at e d p robl e m s t o protect the lives of the Filipino people and prevent the continuous deterioration of the countr y’s env ironment.

Restoration and resilience strategies

Comiso also proposed restoration and resilience strategies, which are not very new but still applicable these days.

Planting trees, for one, has

countless benefits for the environment. This reduces flooding and landslide, as well as it sequesters carbon and conserving soil.

A single mature tree can absorb carbon dioxide at a rate of 48 pounds a year and release enough oxygen back into the atmosphere to support two human beings, according to Mike McAliney in “Arguments for Land Conservation: Documentation and Information Sources for Land Resources Protection, Trust for Public Land” in Sacramento, California, in December 1993.

Trees are also considered as natural air conditioners. They help stabilize the temperature, making the surroundings much cooler by as simple as blocking direct sunlight to a more sophisticated chemical process of cooling.

This is the most basic activity people can do to help solve the problem of climate change. People engaging in this activity as young as possible will help them appreciate nature more and understand the balance and processes of the Earth. In addition, there are a lot of health benefits in joining treeplanting activities.

Reforestation would also lead to the protection of biological d iversit y. Rehabi l it at ing t he natural habitat of plants, animals and microorganism reduces the harmful effects of climate change to them. It is important to ponder on that by simply veering away from the people-centric mind-set and considering that people share the same Earth with the other living creatures will really make a difference.

Human activ ities, good or bad, create a ripple effect, natural cycles and processes keep the balance. Joselito Carteciano and Queenie

Chico/S&T News Service

“Hot logs” were seized during an anti-illegal logging operations in Surigao del Sur, one of the illegal logging hot spots in Mindanao. DENR Strategic Communication and Initiatives Service

By Jonathan L. Mayuga

@jonlmayuga

S

ome P50 million worth of “hot logs” will be donated by the Department of Environment and Natural Resources (DENR) for the rehabilitation of Marawi City.

Director Nonito Tamayo of the DENR’s Forest Management Bureau (FMB) said Environment Secretary Roy A. Cimatu has ordered the DENR to prepare the deed of donation for the person who will be tasked to take charge of the rehabilitation.

“The DENR secretary wants us to ready the deed of donation. We are currently conducting an inventory,” Tamayo said.

The ongoing military and police offensive against the Maute Group in Marawi caused massive death and destruction over the past several weeks.

As the military and the police continues to f lush out the re m a i n i n g te r ror i st s out of Marawi, the Duterte administration is readying rehabilitation of the war-torn Islamic City in Southern Philippines.

According to Tamayo, based on initial inventory report he received, at least 1 million board feet of seized wood are available for the donation.

“At P50 per board beet, we already have P50 million worth of lumber. It could be more than that,” he said.

The hot logs to be donated to Marawi City were seized by authorities from all over Mindanao as part of the DENR’s intensified campaign against illegal logging, he said.

“The [DENR] secretary wants us to prepare the donation. As soon as the situation in Marawi improves, we will be releasing the confiscated forest products,” he said.

It has been the practice of the DENR to donate the confiscated hot logs to the Department of Education (DepEd). The hot logs are being used to make school furniture, such as armchairs, desks and cabinets.

“Because the president promised to rehabilitate Marawi, Secretary Cimatu has ordered us to make the donation instead to Marawi,” he said.

T he DENR-FMB chief said they are also preparing to donate confiscated hot logs to help the rehabilitation in Leyte province, which was recently hit by a strong earthquake. “But our priority right now is for the rehabilitation of Marawi,” he added.

Lawin Forest and Biodiversity Protection System

According to Tamayo, t he DENR has intensified the campaign against illegal logging, particularly in so-called “ hot spots” following reports of resurgence of the illegal activities in certain areas.

There are still 20 remaining illegal logging hot spots mostly located in Mindanao, and a few in the Visayas and Luzon, particularly the Sierra Madre Mountain Range.

“We are using the Lawin technology to strengthen our campaign. This is a Web-based forest protection program. We are training our forest protectors

using high-tech gadgets,” he said.

The official is referring to the Lawin Forest and Biodiversity Protection System launched on March 10, 2016, in Ilagan Sanctuary, Fuyot Spring National Park in Ilagan City, Isabela.

Lawin is a project of the DENR in partnership with United States Agency for International Development (USaid) through the Biodiversity and Watersheds Improved for Stronger Economy and Ecosystem Resilience Program.

It is an integration of sciencebased assessment, user-friendly and the use of innovative technology on the monitoring the status of the forest. It provides assistance in environmental monitoring, especially in the forest.

The system allows the communities and environment authority to alleviate the status of the natural forest and also to properly manage the ecosystem against degradation and deforestation.

“We have trained our forest rangers do regular patrols using latest technologies and gadgets,” he said.

Using smart phones or tablets, forest rangers can report threats.

The data are received by data managers. Data managers can be housed at DENR regional, provincial, city or municipal offices.

He said the DENR is still working to improve response time.

“When we receive information about a threat, such as illegal logging, what we do is dispatch our people and, using drones, we are able to pinpoint the area,” he said.

The DENR is closely coordinating with the military and the police in their respective jurisdiction.

Forest monitoring

He said even the Community Environment and Natural Resou rce Of f icers (Cenros) a re required to join routine patrols to boost forest and biodiversity protection efforts.

“All Cenros do regular patrols,” he said. “R ight now, ou r ra nge h a s reac hed 4 0,0 0 0 k i lome ters. A l l our 1,500 forest rangers do simultaneous patrolling nat ionw ide, he sa id.

“All forms of forest disturbance, including wildlife trafficking [and], illegal forest occupancy, are also being monitored,” he added.

Cutting of trees, basically, by upland dwellers, is a major problem. Technically, he said, it is timber-poaching.

“They are not large-scale commercial logging; they are timber poaching. Another problem is illegal occupancy of forest and illegal small-scale mining,” he said.

Although forest rangers are unarmed, he said the real-time reporting of the threats makes it possible for the DENR to immediately request for assistance from law enforcers to conduct the operation,” he said.

“In fact, incidences of illegal forest activities have gone down. But there are many Cenro offices, which need to intensify patrolling to increase their range,” he said.

“That is why I have asked our regional offices to make sure that all our employees with the item of forest ranger or foresters are dispatched to do regular patrols,” he said.

Biodiversity Monday BusinessMirror

Asean Champions of Biodiversity Media Category 2014

Monday, August 1, 2017 A13

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

Oposa’s book walks people back to nature

R

a mon Magsaysay awardee lawyer Antonio “Tony” Oposa has been Mother Nature’s leading litigator way before it became fashionable to do so.

His landmark cases against the Philippine government, which included the depletion of virgin forests and cleanup of the Pasig River, has rallied people on the need for awareness and education on the environment.

This time, he is breaking ground in his advocacy in a new book that is rich in vision, visuals and virtue told in a narrative that is passionate, persuasive and personal.

Launched recently at the Henry Sy Sr. Innovation Hall of Miriam College, Quezon City, Shooting Stars and Dancing Fish: A Walk to the World We Want, is a picture-andstorybook that speaks to ordinary people, especially to the young, thought-leaders and action-oriented citizens.

The Oposa Doctrine

New readers will find the book interesting as Oposa recalled his very first environmental case that would later be a springboard to his other cases. After all, his major contribution to international environmental law is the principle of intergenerational responsibility, which is also known as the Oposa Doctrine. It argued that future generations could be protected in court, and set a precedent on how citizens can leverage the law to protect the environment.

“I argued that at the rate we were cutting down forests, there would be nothing left for my children to see, and other children of the generations and those yet unborn,” Oposa explained.

For all his landmark legal victories and his practices on environmentalism and environmental law, he was awarded the prestigious Ramon Magsaysay Award in 2009. He received the The Outstanding Young Man in 1993 and the United Nations Env ironmental Program Global Roll of Honor in 1997, as well as the internationally acclaimed International Environmental Law Award in 2008.

Game changer for the environment

When asked if he considered h imsel f a n act iv ist, Tony replied in the opposite.

“I consider myself an ‘actionist,’” he said. “Many activists tend to talk and theorize but do not make concrete action. W hen I have an idea of things, I translate them into actions.”

He is advocating two radical solutions that he felt would spell a big difference for the environment—edible landscaping and rain gardens, and road sharing.

Edible landscaping means turning idle land into plots for growing vegetables and fruits. “It would solve problems of starvation,” he said.

“All people can benefit from it. People should learn to share resources, like food and benefit from others, too.”

One setup may be to involve planters into farming cooperatives to divide the harvests and the profits from selling cops.

“This way, even if you don’t have money you don’t worry if

Miners clear the entrance of a tunnel from debris in a collapsed gold mine in Mount Diwata in Compostela Valley province in southern Philippines, as they help in the recovery of blast victims in October 2005. Advocates say the mining industry has not helped provinces climb out of the shackles of poverty. At the same time, experts say it is a serious threat to the environment. AP

lawyer Antonio Oposa shows his book, Shooting Stars and Dancing Fish: A Walk to the World We Want.

you get hungry.”

On the other hand, rain gardens are man-made c atc hments for ra in outpour. “Instead of the water f lowing out from canals, the run-off become natural irrigation for plants and foliage,” Oposa explained.

One of his most ambitious ideas yet would be the roadsharing scheme, in which he proposed for a dedicated lane for public transportation, lesser use of private cars and creating dedicated bicycle lanes.

“The problem with us is that we patterned our development after the West and we called it ‘progress’,” he said.

He added that the idea was even plausible to all the transport groups, but was sidetracked by the transition in government last year.

“I wrote to Transportation Secretary Arthur P. Tugade,” he revealed. “Until now I have yet to receive a reply.”

Merging love for art and the environment

At present Oposa is rebuildi n g a nd re pu r p os i n g h i s Bantayan Island property, which he previously called the School of the Sea and Earth Advocates and now known as Sea and Earth Advocates of Culture, Arts and Music, which will include a mini museum and galler y.

He is inviting people to visit it as soon as the renovations are finished in 2018.

“I’ ll give you a tour of the pl ace mysel f,” he eagerly said. “Children can do art activities and learning about nature. I have a rainwater g a rd e n w he r e m i g r at o r y egrets come.”

The launching of his newest book was an intimate gat her ing of some of his closest friends and fellow colleagues in the environmental movement, which included former Environment secretaries Angel C. Alcala and Elisea Gozun, former Head Grace Pulido-Tan, former Puerto Princesa mayor Edwa rd S. Hagedor n a nd Crav ings Group President Susana Pascual-Guerrero. “ No ot he r m a n t h at I know here in the countr y has the passion like that of Tony,” said Pascual-Guerrero, who is also a president of the Zero Waste Philippines and a kindred spirit. “I have learned a lot of things from him as an environmentalist myself. We owe him a lot and we can return the gesture by sharing his wisdom and ideas to the world through this book.”

Experts: Declare protected areas ‘off-limits’ to mining

E

By Jonathan L. Mayuga

@jonlmayuga

nvironment Secretary Roy A. Cimatu last Monday vowed to uphold at least one policy pronouncement made by his predecessor, Regina Paz L. Lopez— declaring watersheds “off-limits” to mining operations.

Watersheds are home to a diverse species of plants and animals, including those that are considered as site-endemic or unique to the Philippines—some of which are situated w ithin protected areas (PAs) under the National Integrated Protected Areas System (Nipas) Act. “Definitely, there will be no mining in watersheds,” Cimatu said during a news conference last Monday, where he again reiterated his commitment to promote responsible mining in line with President Duterte’s policy pronouncements.

Rich biodiversity

The Philippines is endowed with natural wealth—a beautiful environment teeming with one of the most diverse plant and animal species in the world—and rich natural resources—including gold, one of the most sought-after metals by mining companies.

The Philippines has a total of 228 key biodiversity areas (KBA) in various regions. These KBAs are home to 855 globally important species, including those that are freshly discovered, according to Department of Environment and Natural Resources (DENR) data.

Tak ing cue from Duterte’s State of the Nation Address in July, Cimatu issued a directive to mining companies to integrate biodiversity protection and conservation in their operations.

Cimatu cited a recent study highlighting the discovery of new mammal species in Luzon.

The study by the Field Museum of Chicago (FMC), titled “Doubling diversity: A cautionary tale of previously unsuspected mammalian diversity on a tropical oceanic island”, involves 56 newly discovered mammal species, 93 percent, or 52, of them are found nowhere else in the world.

Conducted by a team of Filipino and American researchers, led by Dr. Lawrence Heany, an ecologist and evolutionary biologist, the result of the study was published in the scientific

56

The number of newly discovered mammal species in Luzon, 52 of which are found nowhere else in the world

journal Frontier of Biogeography.

Heany is a curator of mammals at FMC. “The study has arguably amplified the president’s call to mining companies to strictly comply with existing rules and regulations,” Cimatu pointed out.

The discovery backs the new mining policy direction of the Duterte administration, which puts premium on the protection and preservation of the nation’s flora and fauna species and their habitats, Cimatu said.

“Integrating biodiversity conservation into their mining project cycle would surely help mining companies restore, possibly to near-original condition, miningaffected forests in the country,” Cimatu said. The mining sector, Cimatu added, will benefit immensely in giving a positive image to the general public by protecting and conserving biodiversity.

He said such move would amplify mining companies’ efforts to reduce biodiversity loss and provide significant contributions to national and global conservation initiatives.

Driver of biodiversity loss

Mining companies claim that progressive rehabilitation addresses concerns about mining’s adverse impact on the environment as mandated by Republic Act 7942, or the Philippine Mining act of 1995.

Debunking this claim, Dr. Perry Ong, a professor in Wildlife Biology at the University of the Philippines’s Department of Biology, said mining is not only a serious threat to the environment, but a driver of biodiversity loss.

In a telephone interview last Monday, Ong said mining, particularly large-scale mining, destroys the environment and the effect could be irreversible.

Citing cases in the Philippines, he said large-scale mining means large-scale destruction.

“Mining involves removal of earth to access resources—metallic and nonmetallic. As a result, it transforms the land. When this happens, biodiversity, including genes, species, ecosystems, will be affected, temporarily or permanently,” he added in a text message to the BusinessMirror.

“Initially, the scale of mining was limited to addressing local human needs. Thus, the impact was almost negligible. When the population increased, the demand increased, the scale expanded, greed came into the picture. This is where we are now,” Ong added.

Short-term benefit

He said to minimize the effect of mining, PAs should be strictly declared “off-limits” to mining, saying the benefits of mining is temporary as against the longterm benefits of maintaining a healthy ecosystem.

Ong added that PAs, which are supposed to be “protected” against destructive development projects, should be preserved.

To do that, he said mining contracts that target to extract minerals within PAs should be canceled.

At t he ver y least, he sa id the government should strictly monitor the activities within the PAs, which have been declared as mining “no-go” zones

by Executive Order 79.

“Ideally, MPSAs [Mineral Production Sharing Agreements] should be canceled in favor of protected areas. But lawyers will scream prior rights. In these instances, their operations should be covered by stringent measures,” he suggested.

“Mining’s benefits are short term while biodiversity’s benefits are long term. It also ensures our survival as a people, as a species, in the maintenance of life. This is where the seeming conflict lies,” he added.

According to Ong, mining companies should start mending their ways by adhering to the highest standards of responsible mining that puts premium not only to human life, but to the diverse wildlife that are being threatened with extinction by mining operations.

“The business-as-usual mode of doing mining is not acceptable. President Duterte is not against mining per se. He is asking mining to clean up their acts and incorporate biodiversity in their business plans. If greed wins, everybody loses,” Ong said.

Biodiversity assessment

Director Mundita S. Lim of Biodiversity Management Bureau of the DENR, meanwhile, said mining companies should adopt more responsible measures in their operations.

Interviewed last Monday, Lim underscored the importance of conducting a biodiversity assessment before, during and after mining operations. Such assessment, she said, should lead to the creation of a data base of plants and animal species in the areas to be affected by mining.

“This way, we will know what we really stand to lose in those areas,” she said.

She added that the Philippines is known to host unique species of plant and animal wildlife that will be forever lost in case of extinction.

Mainstreaming biodiversity

According to Lim, mining companies shou ld star t to mainstream biodiversit y and make it part of their long-ter m development plans.

She said mainstreaming biodiversity is already a global trend and many companies have started to integrate biodiversity protection and conservation as part of their programs and projects.

Incidentally, she said, mainstreaming biodiversity in the sectors of energ y and mining is a major agenda for discussion in the upcoming meeting of the Scientific and Technical Advisory Body of the United Nations Convention on Biological Diversity (UN- CBD).

Lim was elected by the Conference of the Parties of the UNCBD in December 2016 to chair the subsidiar y body meeting set in December of this year in Montreal, Canada.

“The mining sector should take into account results of scientific studies that reveal significance of wildlife species in maintaining healthy ecosystems,” she said.

She urged mining industry’s big players to take the opportunity in partnering with the DENR in striking a balance vis-à-vis mining.

“Our potentials are limitless if we can continue to conserve a nd sust a inably ma nage ou r biodiversity and, at the same time, we are still able to pursue development of our extractive industries,” she said.

A14 Monday, August 7, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Asean and N. Korea: China gets lucky

T

he region covered by the Asean is like a gated community.

Everybody does business with each other but also tend to mind their own business. The region enjoys the highest economic growth of any area on Earth.

Borders are well defined and nobody is at war with anyone else. Each nation holds its own national interest as the top priority but that does not interfere with bilateral relations.

There is cooperation and mutual assistance.

In fact, the only serious and significant problem is that big and, sometimes nasty, interfering neighbor down the road—China. And China is a problem that Asean has been trying to come to terms with for many years.

The one part of the region that affects all the member-states is the South China Sea. Asean has been trying to put together a Code of Conduct (COC) to govern the disputed South China Sea for more than a decade, long before China militarily occupied those waters. All of Asean have vested interests, with Indonesia, Malaysia and Brunei Darussalam deep in the discussions. But part of the reason for the delay is that only two countries—the Philippines and Vietnam—have to deal directly with that area on a daily basis.

Confusing the issue of the COC is that Taiwan also has its finger in the pie with territorial claims against the Philippines in the Luzon Strait, the northern part of South China Sea, and even with areas off the Vietnamese coast and as far south as the Natuna Islands located near the island of Borneo.

You might think that Asean would be firmly dedicated to getting something on paper to straighten out this mess. No such luck.

The COC is still at the framework stage and even the current draft framework document is little more than a nonbinding agreement with scant legal enforcement that simply commits all parties to “play nice” with each other. And the idea that any agreement from Asean that would actually condemn Chinese government activities in the South China Sea is far from reality. Vietnam is the only country that is really pushing for Asean to step up and fight back. But even Vietnam knows that is not going to happen, and its strong complaining may be more for good government public relations to its citizens.

Given the chance, at the current meetings in Manila, Asean would probably like to see a best-of-three arm wrestling match between the foreign ministers of the US and China to decide who “wins” the South China Sea. But since that is not on the official agenda, Asean has found a way to basically avoid the whole South China Sea disputed territory issue.

The problem of North Korea, its potential for effective intercontinental missiles and its nuclear-weapons programs, is a global issue that can only be handled through the United Nations and the “Six-Party Talks”, which include Japan, Russia and South Korea.

But since China is not openly threatening any one with a nuclearweapons attack, the current and ongoing tensions on the Korean peninsula gives Asean an opportunity to issue a strong statement against North Korea, give the impression of being relevant, and use the North Korean “serious threat to global peace and security” as an excuse to ignore the China issue.

Since 2005

BusinessMirror A broader look at today’s business

Making technology more accessible Atty. Jose Ferdinand M. Rojas II

RISING SUN

T

here was good news on August 2, when President Duterte signed the bill that would provide free Internet access in public places. This means that if you find yourself in government offices, state universities and colleges, hospitals and health centers, parks and plazas, libraries, airports and seaports, transport terminals and other such places, then Internet connection would be available for free.

The funding for this program will be coming from the Free Public Internet Access Fund (FPIAF) under the management of the Department of Information and Communications Technology (DICT).

Everybody is saying that this new law (Republic Act 10929) will boost productivity and increase the country’s competitiveness, resulting in economic gains. Sen. Grace Poe, who is a cosponsor of the bill for Free Public Internet Access Program, said free Internet will be good

Atty. Lorna Patajo-Kapunan

legally speaking

Founder T. Anthony C. Cabangon

Editor in Chief

Jun B. Vallecera

Managing Editor Associate Editor City & Assignments Editor

Max V. de Leon Jennifer A. Ng Vittorio V. Vitug

Senior Editors

Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos Dennis D. Estopace

Online Editor Social Media Editor

Ruben M. Cruz Jr. Angel R. Calso

Creative Director Chief Photographer

Eduardo A. Davad Nonilon G. Reyes

Chairman of the Board & Ombudsman President VP-Finance VP Advertising Sales Advertising Sales Manager Group Circulation Manager

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

BusinessMirror is published daily by the Philippine Business Daily Mirror Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines.

Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025.

(Advertising Sales) 893-2019; 817-1351, 817-2807.

(Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.

www.businessmirror.com.ph

Printed by brown madonna Press, Inc.–San Valley Drive KM-15, South Superhighway, Parañaque, Metro Manila MEMBER OF

nnn

The economist and former chief of the National Economic and Development Authority, Cielito Habito, encouraged business-process outsourcing (BPO) workers to “look forward” amid the changing landscape as far as artificial intelligence (AI) is concerned. It is being anticipated that AI, or intelligent machines that work like humans—may replace many positions in the BPO industry and other sectors.

We stand a lot to lose because in our country there are more than 1 million Filipinos who are working in the BPO sector, which is, in fact, the country’s second-largest source of dollar earnings. With the advent

Rightsizing the national government

✝ Ambassador Antonio L. Cabangon Chua Publisher

for education, communication and public service.

I am just hoping, however, that connection will always be reliable (especially during emergencies) and fast. We all know that the conditions of the Internet service in this country leave a lot to be desired. We also hope that measures will be put in place so users may not abuse the service to allow those with legitimate and urgent needs to enjoy fast and uninterrupted connectivity.

Republic Act 10929 will boost productivity and increase the country’s competitiveness, resulting in economic gains. Sen. Grace Poe, who is a cosponsor of the bill for Free Public Internet Access Program, said free Internet will be good for education, communication and public service.

I

n his second State of the Nation Address (Sona), President Duterte urged Congress to pass a “rightsizing bill” to cut government bureaucracy “soonest”. In his Fiscal Year 2017 Budget Message, the President expressed concern over the size of the bureaucracy. Specifically, he noted that, although the expansion of the bureaucracy is a response to the growing demand of public services, “there is still fat in government that we must trim.”

Heeding the call of the President, the House of Representatives, two days after the Sona, passed on third and final reading House Bill (HB) 5707, “An Act Rightsizing the National Government To Improve Public Delivery of Services”. The principal author of the bill, Rep. Karlo Alexi Nograles of Davao City, said the measure will whip up a “lean and mean bureaucracy”. The Senate, earlier on March 15, under the committee chaired by Sen. Loren B. Legarda, submitted consolidated Senate Bill (SB) 1395, known as “Rightsizing the National Government Act”. In her sponsorship report, Legarda said, “From 176 agencies in 2000, there are now 186 agencies in the national government. Moreover, the national government work force currently stands at 1.6 million, compared to 1.1 million positions in 2000. The increase in the number

of government agencies, without doubt, has a significant impact on our budget. For 2017, 29.57 percent (or P990.5 billion) of our budget of P3.35 trillion is allocated for Personnel Services (PS), an increase from 2016’s 27.05 percent (P812 billion) and 2015’s 28.62 percent (P746 billion). Aside from these budgetary implications, a big bureaucracy has a negative impact on government performance and efficiency. For example, the overlapping jurisdictions and redundant functions of several agencies result in confusing regulatory rules, duplicating requirements, red tape and inefficient delivery of public goods and services.”

Both HB 5707 and SB 1395 cover the Executive branch, including departments, bureaus, offices, commissions, boards, councils and all other entities attached to or under their administrative supervision;

and government-owned and -controlled corporations (GOCCs) not covered by GOCC Governance Act of 2011. The Legislature, Judiciary, Constitutional Commissions, Office of the Ombudsman and local government units may, likewise, rightsize their respective offices, consistent with the guidelines provided for under both bills. The bills, likewise, provide for the creation of a committee on rightsizing the Executive branch, chaired by the Executive Secretary, cochaired by the Department of Budget and Management (DBM), with the secretary of socioeconomic planning, chairman of the Civil Service Commission and head of the Presidential Management Staff as members.

Generally, the organizational actions to be followed are: 1. Regularize ad hoc offices whose functions are vital and significant, thus must be continually undertaken by the government; 2. Merge or consolidate agencies whose functions are necessarily overlapping or duplicating and can be undertaken by a single entity; or clients are similar or related to rationalize the use of government resources; 3. Split agencies with multifarious functions which are deemed distinct and equally serve important aspects of governance; 4. Transfer offices to other agencies wherein their functions are more aligned; and 5. Abolish agencies: (i) which functions are already redundant or no longer relevant or necessary, or

of the intelligent robots, we can’t say for sure if this sector can still continue to help the economy in a big way.

The affected agencies and organizations are presently preparing for this new development, but the employees or workers themselves, as Habito suggested, need to step up by enhancing their skills, learning new things, reading up on trends and, if necessary, preparing to change their career tracks.

Schools need to offer new courses that will prepare their students to participate in the changed environment. Organizations, like the outsourcing industry group Information Technology and Business Process Association of the Philippines, are likewise helping their employees upgrade their skills by “working closely with the industry, academe and the government”.

The Department of Science and Technology (DOST) is also in consultation with experts and stakeholders to develop a program on AI. This is according to DOST-Philippine Council for Industry, Energy and Emerging Technology Research and Development Deputy Executive Director Raul C. Sabularse.

better undertaken by another entity; (ii) which are no longer achieving the objectives and purposes for which these were originally created; (iii) which are not cost-effective since these do not generate the desired levels of outputs and outcomes vis-à-vis the resource inputs; and/ or (iv) which have already become nonoperational, dormant and/or outlived their purposes (HB 5707, Section 4).

Although approved by a majority of 230 representatives, six militant Party-list lawmakers rejected the bill as “an affront to the security of tenure of the public-sector workers in the guise of efficiency”. The DBM admitted “16 percent of the 1.6 million government positions, or 255,295 state workers, would be affected in the first year alone”.

Both bills, however, provide that government workers affected may avail themselves of retirement benefits, separation incentives, refund of Pag-Ibig contributions and commutation of unused vacation and sick leave credits.

I fully support the rationale for the rightsizing program of the President—which should start with the Office of the President itself, where a number of agencies, clusters, ad hoc committees and task forces can be dissolved without affecting quality and efficiency in the delivery of services. GOCC, which give themselves hefty bonuses, should probably be dismantled and its functions devolved to the private sector.

See “Kapunan,” A15

Opinion BusinessMirror

opinion@businessmirror.com.ph

Understanding the new CPD

Speak up, speak loud, speak smart Siegfred Bueno Mison, Esq.

THE PATRIOT

Filbert Tsai

DEBIT CREDIT

C

ertified Public Accountants (CPAs) are now required to comply with the new continuing professional development (CPD) requirement to renew their licence. Many were shocked with the sudden increase, from the previous 60-unit requirement to the 120-unit requirement, prescribed by the Board of Accountancy (BOA) Resolution 358-2016 as a result of Republic Act 10912, otherwise known as the CPD Act of 2016.

The requirement to comply with the 120-unit of CPD over a period of three years is a requirement of International Education Standard 7 (IES 7). As a member of the International Federation of Accountants, the global accounting community, all Filipino CPAs are required to comply with this requirement.

IES 7 prescribes for: a. Completion of at least 120 hours (or equivalent learning units) of relevant professional-development activity in each rolling three-year period, of which 60 hours (or equivalent learning units) shall be verifiable; b. Completion of at least 20 hours (or equivalent learning units) of relevant professional-development activity in each year; and c. Measurement of learning activities to meet the above requirements.

BOA Resolution 254-2017 provided additional clarification and information on the implication of this new CPD requirement. The highlights of this resolution are: 1. The 120-hour CPD requirement is being rolled out over a period of three years with the following staggered adoption:

January to June 2017 July to December 2017 January to December 2018 January 2019 onward

Minimum CPD units in a three-year compliance period 60 80 100 120

Maximum credit units for selfdirected and/or lifelong learning 24 32 40 48

Basically, 40 percent of the total CPD requirements can be obtained from sources other than the CPD providers. These can be self-directed learning and/ or lifelong learning, which generally can be anything, the January-to-June 2017 cycle limits these to 20 flexible hours.

2. The CPD hours are generally flexible, except for 40 credit units that must be in the following CPD learning areas:

Other than the above minimum 40 units, which is required to be within the learning areas to be taken from accredited CPD providers, the remaining CPD units are considered flexible CPD units.

Section 7 of BOA Resolution 254-2017 provides that a CPA may take learning programs other than those provided by accredited CPD provider. However, there is a caveat that these are subject to approval by the CPD Council. The fee to submit these requirements appear reasonable (i.e, P1,000 for every threeyear rolling period as long as CPD claims are made one time).

I am for these CPD measures with a few reservations: For self-directed learning, it is not clear how much is the required payment for the accreditation of CPD units (i.e., whether payment is one time or for each CPD course.). I believe that the cost is just P1,000 for the three years provided that you list down in one accreditation application all the self-directed learning units that you are claiming. CPD providers are sprouting like mushrooms everywhere. We need better quality control and pricing control to make sure that providers are not exploiting the market for this opportunity.

Pruning existing CPD providers matched with an increased barriers to entry for new CPD providers would be crucial to provide quality updates to our professionals. Further, the BOA has to do more work delivering thought leadership through free webinars and courses to ensure a consistent message is sent across the profession, instead of relying too much on the accredited professional organization to deliver.

Earning the remaining 60 percent of the required CPD, through CPD providers, is considered a financially burdensome process for CPAs. While I recognize the potential opportunity for cost issues to diminish with quality online CPD providers, this will take time before contents are made available and for prices to become competitive.

These are interesting times with these recent developments in our CPD. Filbert Tsai is a Filipino accounting advisor in the UK with global and public sector experience. His key areas of interests are start-ups and MSMEs. His blog and page, Ask the Accounting Advisor, provide relevant insight for start-ups and MSMEs in the Philippines.

This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@gmail.com.

Kapunan. . .

continued from A14

A big step in drastically removing “fat” from the Legislative branch would be to revert to a unicameral legislature, which would mean abolishing the Senate, which has no geographical constituency anyway.

A bicameral legislature, which we currently have, is not only a waste of taxpayers money, it is also not efficient as both Houses still have to reconcile their separate versions of their bills before they come out with a consolidated version for submission to the President

Monday, August 7, 2017 A15

to sign into law.

On the part of the Judicial Branch, rightsizing should not be “downsizing“ but “upsizing”: create more courts, appoint more judges and prosecutors, public defenders and court personnel. This will ensure the more efficient administration of Justice, hopefully.

Indeed, rightsizing is a laudable move. But if corruption is not solved, what it would only mean is that there are fewer government agencies to corrupt.

We need not only trim the “fat”, but also to eliminate the “pork” at all branches of government. Only then can we be a healthy nation.

N

ever be afraid to speak up is one piece of advice I vividly remember from my days as a cadet in West Point. While plebes are trained to only have four standard responses when asked, one professor told me to always ask whenever confused. And I was one confused plebe having difficulty understanding American slang and culture. My professor encouraged the entire class to freely make comments as he allotted the last five minutes in class for free discussion. His only rule was that whenever we decide to speak freely, we should be respectful. As I always tell my children, you can say anything, but it must always be said carefully and respectfully.

A former student, now a lawyerconsultant for the Bureau of Customs, was recently criticized for calling the Speaker of the House an “imbecile” in a Facebook post. Lawyer Mandy Anderson’s propriety has, thus, been commented on by lawmakers, lawyers and the public.

Admittedly, it was posted in her capacity as a private citizen exercising her freedom of expression, but it does raise a question: having spoken loudly and clearly, was it smart to do so when she is a public servant?

Proverbs 16:20 tells us, “The hearts of the wise make their mouths prudent, and their lips promote instruction.” That is

exactly how a colleague in Philippine Airlines (PAL) speaks during meetings. I have yet to attend a management meeting where Mr. Emilio Yu will not speak with much articulation and passion. As special assistant to the Chairman Lucio Tan, Yu will always share his observations, comments, and queries—from the simplest spelling error to the most complicated issues presented by the managers of PAL. Owing to his vast experience and commanding voice, everyone listens whenever Yu has to say something. He never shies away from sharing his insights, not to show off, but to benefit the

company he has served for so many years. Often referred to as the brainchild behind PAL’s vision to become a five-star airline by 2020, Yu speaks up during meetings with prudence, carefully using the right words to promote collaboration among the senior leaders in PAL. He is respected, even if others may not always like what he says. Yu shares his thoughts and concerns in a way that never demeans or degrades.

Free speech is one of the basic rights guaranteed in any democratic society. But whenever we exercise this sacred right, we should be mindful that our words should build and not destroy. Our objective in speaking up should be to make things better and not vilify nor persecute. And there are occasions where prudence dictates not to speak up.

My colleague in the legal profession, lawyer Ernesto “Ticky” Tabujara, has been a very vocal promoter of responsible gun ownership. Some of the reforms in our gun-licensing policies can be attributed to his constant and persistent criticisms. He easily becomes upset when he sees the lack of empathy among public servants, particularly those in the police force. He nonetheless exercises, as best as he can, polite language to point out inefficiencies in government bureaucracy. While his arsenal of profane words can easily outmatch that of President Duterte’s, Ticky engages his Facebook friends in an intelligent discourse through

Can people change after middle age?

I

By David Brooks | New York Times News Service

sometimes read that people don’t change much after middle age. But everyday experience contradicts this on a weekly basis.

For example, this week in Shreveport, Louisiana, I met two guys in their 60s named Bo Harris and Mike Leonard. Bo was a football star at Captain Shreve High School. During his junior year, the school was integrated, but in the worst possible way.

The black players, whose high school was closing, were told to watch the existing team practice through a chainlink fence. Words were exchanged and Bo went out and pinned one guy, who had a broken bottle in his hand, up against the wall before administrators intervened.

Racial tensions ripped through the school, and for his own safety Bo was told to come to school only for the classes he absolutely needed for graduation.

He went on to play linebacker at LSU and wasn’t always a gentle soul.

“Anger was a resource I called upon on the field”—and sometimes off it.

Mike joined Bo on the LSU football team a few years later, though they didn’t get along. Mike’s father, who died when he was 14, had the bigoted attitudes of the time and place. Mike was raised in that tough-guy culture.

Once, an LSU fan threw a whiskey bottle

at Mike and hit him in the back. Mike charged the stands to take revenge.

Both went on to lead successful lives. Bo played for the Cincinnati Bengals for eight years before returning to Shreveport to work as a financial adviser. Mike created one of the city’s most successful dental practices.

And things went on that way for a few decades. Until they didn’t.

Bo joined a group of 14 guys who had breakfast together every week. The friendships opened his heart. Then in 2009 he was driving with his preteen son with a .45 automatic rattling around on the dashboard. Bo heard an explosion and felt a pain in his leg worse than anything he’d experienced in the NFL. His son called 911 and drove the car to a place where they could be met by an ambulance. The EMT looked at Bo and said, “In all my years of doing this, I’ve never seen a guy as lucky as you.” The emergency room doctor and nurse said the same thing. If the bullet had gone one way it would have hit an artery and killed him. If it had gone the other it would have meant amputation. Bo was left in his hospital room to think about life.

Meanwhile, Mike was prospering in the normal way, serving his patients, going to church and playing golf. But internally, he was troubled. He heard about Arnold Toynbee’s theory of civilizational decline and worried about America. Personally, he felt unfulfilled.

When he went to the Pearly Gates would Saint Peter really care how low his handicap was?

“In the dark recesses of my mind I didn’t trust people enough to let them know what was going on.” Then he was handed a book called The Master Plan of Evangelism and by Page 5 his life was altered.

Shreveport saw a lot of ugliness during the civil-rights era. But it is fortunate today to have Community Renewal, one of the nation’s most impressive community-building groups.

Community Renewal builds settlement houses for kids in crime-ridden communities. It sponsors over 1,500 Haven Houses in neighborhoods rich and poor where volunteers sponsor activities and build relationships. It’s one of the most successfully integrated organizations I’ve seen.

Mike pulled out of his dental practice at age 49 and works at Community Renewal, often without pay. Bo heard about the organization from a member of his breakfast group and is now a volunteer and donor. When I sat with Bo and Mike after the staff and volunteer meeting last Monday, three things

Japan Inc. might have to pay up

By Daniel Moss Bloomberg View

S

omething may be stirring deep within Japan’s labor market. The country’s aging and shrinking population is traditionally thought of as a deflationary factor, driving down potential growth. Yet, after years of resisting wage hikes, companies are starting to recognize the need to lock in staff before they literally disappear. In its most recent minutes, the Bank of Japan (BOJ) used an Orwellian phrase to describe the trend: “securing the labor force”.

The unemployment rate is 2.8 percent and declining steadily as Japan goes through something of a growth streak. At the same time, baby boomers are approaching retirement, while the countryremains resistant to any largescale immigration. An influx of women and older workers has compensated for this somewhat. But the pool of workers appears close to being depleted.

Japan’s demographic challenges aren’t new. And despite low unemploy-

ment, wage growth has remained sluggish—only around 0.6 percent. That’s hampered the BOJ’s efforts to drive up inflation to 2 percent, a target that seems increasingly elusive.

Yet, the headline numbers obscure some dynamic forces at work. They’re heavily influenced by big companies, where unions tend to have a cozy relationship with management and have accepted paltry raises despite the firms’ swelling profits. On the other hand, while their salaries start from a lower base, part-time workers have seen wage gains of around 2.5 percent to 3 percent.

It’s all a question of the tipping point: When do labor shortages become so acute that there’s a scramble and employers both big and small have to pay up or risk, literally, running out of people?

Izumi Devalier, head of Japan Economics at Bank of America-Merrill Lynch, thinks we’ve reached that point.

“There have been many false dawns, so making the case this time can be quite difficult,” she acknowledges over lunch.

But, using an admittedly anecdotal example, she observes that famously high

levels of service at Japanese restaurants are starting to slip subtly because of the gathering labor shortage. “People know that if they don’t secure talent now, it’s going to get harder and harder.”

For those that want to stay in business, the need to retain staff will outweigh all others. Yamato Holdings Co. Ltd., the parcel delivery company with the cat-and-kitten logo that seems to be everywhere in Tokyo, is instructive.

Faced with a shortage of drivers and efforts by competitors to poach those it did have, the firm raised its base rate for customers in April.

It took almost three decades, but what’s important is that it happened.

Fierce competition among delivery firms had made Yamato Transport wary of raising prices, but overworked and underpaid staff had better offers. Something had to give. Forty-seven thousand employees were subsequently compensated for unpaid overtime.

One might compare the shock to the system to the 1985 Plaza Accord, when Japan and West Germany agreed to let their currencies strengthen against the

carefully chosen words and diplomatically correct language. Of course, among friends, Ticky easily unleashes his verbally vicious attack on certain persons in government.

The fact that he has chosen not to openly use abusive language in public is a clear sign that my good friend has matured and mellowed.

In his song “Say What You Need to Say”, John Mayer sings, “You better know that in the end, it’s better to say too much than never to say what you need to say again. Even if your hands are shaking and your faith is broken; even as the eyes are closing, do it with a heart wide open.

Say what you need to say.”

Some say that we need to learn how to say what we need to say to relieve stress. When words are left unsaid, we become anxious and regretful.

A mark of a servant leader is that he is never afraid to speak his mind.

By speaking up, a servant leader may inspire others to be more outspoken when the situation calls for it. But whenever a servant leader decides to speak up, it should be loud enough for others to understand and smart enough for others to learn from his words. So, why should we emulate Anderson, Yu and Tabujara? Being forthright with a noble purpose is the right thing to do when it is done with love and respect.

For questions and comments, please e-mail me at sbmison@gmail.com.

struck me, which often strike me about people who have transformed their lives for the final lap.

First, they’ve gone through a sort of moral puberty, as if a switch turned.

They’ve lost most of their interest in egoistic calculation and some sort of primal desire for generativity has kicked in.

Second, they have what Baylor’s Paul Froese calls existential urgency, and obsessive connection to a social problem. When Gallup asked people around the world in 2007 if they felt a sense of meaning in their lives, Liberia came out as the nation where most people felt they led meaningful lives and the Netherlands came out last. It’s not that life is always easy in Liberia, but people are gripped by an urgent and communal desire to address the problems around them.

Finally, they speak in the middle voice. Sometimes we speak in the passive voice, when things are happening to us. Sometimes we speak in the active voice, when we’re lecturing and taking charge. But mature activists speak in the middle voice, which is receiving and volleying, listening and responding, the voice of equal and intimate relationship.

Mike says his younger self would have looked at his current self as some sort of crazy person. “I was unused to crying all the time.” But leaving the practice “was the greatest decision I ever made”. People change all along the way.

dollar. Among other things, Plaza accelerated the overseas expansion of Japanese corporations. Now companies need to make equally wrenching decisions about how best to deal with shrinking labor liquidity.

While demography is ultimately driving these labor-market dynamics, there is an important role for government. A year ago, Abe unveiled workplace reform plans that aimed to reduce the gap between what part-time and full-time workers are paid. Abe also wants tighter regulation on the amount of overtime an individual worker can be forced to work, which is one way companies get around hiring new staff. The changes await legislative approval.

Ultimately, the real role may be for the BOJ. By continuing an ultra-accommodative policy, Kuroda can run the economy hot for a while longer, keep it growing and keep the jobless rate on its downward trajectory. The BOJ’s distance from its 2-percent target argues for that approach. It may have the added benefit of forcing more and more employers to face demographic reality.