Issuu

“He’s going to win parts of Ohio, where people are really hurting. There will be sections he will win, because people are angry, frustrated and haven’t heard any answers. But I still think it’s difficult if you are dividing, to be able to win in Ohio. I think it’s really, really difficult.”—Ohio Gov. John Kasich, on CNN’s State of the Union about Donald Trump’s chances of winning the key battleground state.AP

media partner of the year

“A lot of times you hear this rap about how politics doesn’t affect their life. But that changes when it’s personal, and there’s nothing more personal than Donald Trump talking about deporting 11 million immigrants.”—Yvanna Cancela, political director of Las Vegas largely immigrant Culinary Union, on whether the Republican presidential candidate’s views on immigration will increase turnout from the 27.3 million Hispanics eligible to vote.AP

“When I was on the block, I honestly thought my heart was going to explode out of my chest. I was so hyped tonight and so excited.”—Michael Phelps, who extended his Olympics record with a 19th gold medal as the United States captured the 4x100-meter freestyle relay. AP

BusinessMirror

United nations

2015 environmental Media Award leadership award 2008

www.businessmirror.com.ph

A broader look at today’s business n

Tuesday, August 9, 2016 Vol. 11 No. 304

P25.00 nationwide | 6 sections 36 pages | 7 days a week

Stakeholders expect yellow status to prevail as power plants go on either scheduled or forced outages

Cusi: Power reserve remains critical By Lenie Lectura

nergy-sector stakeholders on Monday met to discuss how they can address the insufficient power reserves in Luzon, as projections for the week show that the “yellow alert” status would be issued for the entire week.

INSIDE

the olympics won’t save rio

BusinessSense BusinessMirror

analysis, ideas and commentary from

1 Tuesday, August 9, 2016

www.businessmirror.com.ph

ThE OLympiCs WON’T sAvE RiO

Brazilian President Dilma rousseff lighting the Olympic torch at Planalto Palace in Brasilia following the flame’s arrival from Geneva on May 3, 2016, beginning the flame’s journey across the country before the start of the 2016 Olympic Games on august 5, 2016. Evaristo sa/agEncE FrancE-PrEssE/gEtty imagEs

LMOST seven years ago, when Rio de Janeiro won the right to host the Olympic games in 2016, the cidade maravilhosa (wonderful city) seemed to deserve its nickname. Violence, as much part of Rio’s image as its beaches, had been falling for more than a decade. Rio’s economy, and that of the surrounding state of Rio de Janeiro, was booming, thanks to the world’s demand for the oil that lies off its shores. The games would show off a prosperous, self-confident city, its organizers claimed. Equally important, if Rio could show that it can plan as well as it parties, it would bury the idea that “Brazil is not a serious country,” as a Brazilian diplomat put it in the 1960s. “Those who give us this chance will not regret it,” then-President Luis Inácio Lula da Silva promised. Recently, Rio’s self-confidence is looking shaky. On July 24 the Australian team stormed out of the Olympic village in the district of Barra da Tijuca, complaining of clogged toilets and loose wires. However, those are trivial glitch-

es compared with the other problems plaguing the host city. Guanabara Bay, where Olympic sailors are to compete, remains in parts an open sewer. A 2015 outbreak of the mosquito-borne Zika virus, which causes birth defects, has scared away some sportsmen. Male golfers, in particular, are shunning Rio as if Ipanema beach were a giant sand trap. Policemen, whose salaries have been delayed by a bankrupt state government, have greeted visitors at the international airport with English-language signs that read “Welcome to Hell.” A new metro line and bus corridor, the games’ main legacy to cariocas, as the city’s residents are called, are behind schedule. These local difficulties are compounded by national crises. Brazil is suffering from a severe recession. President Dilma Rousseff is being impeached on charges that she manipulated govern-

ment accounts, so an interim government, led by Vice President Michel Temer, is in charge. Rio is one of the centers of national dysfunction. Petrobras, the statecontrolled oil company at the center of a multibillion-dollar scandal that fueled demands for Rousseff’s impeachment, has its headquarters there. The city’s policemen are no exception to the violent Brazilian norm: They killed 40 people in May alone. Its reputation as an urban Dorian Gray, gorgeous to behold but infected by corruption, is not entirely undeserved. Rio may yet confound doubters. It hosts a huge Carnival every year without plunging into chaos. The sporting arenas are ready. Rio’s cost overruns for building them and for other Olympic spending are smaller than average for host cities, and most of the money was from private sources. The federal government has given the state $890 million in emergency aid, in part to pay policemen’s salaries. It has sent 27,000 soldiers and national guardsmen to fight crime and prevent terrorism, and on July 21 police said that they had foiled a plot by homegrown jihadists. The bus links are late but working, and organizers promise that the metro will be running by July

30. After quick repairs to their quarters, the displaced Australians returned. They and the 500,000 sports fans expected to attend the games will leave the city once they are over. Rio’s 6.5 million inhabitants will remain. Whether the Olympics dazzle or disappoint, cariocas will find that they have done little to arrest the city’s long decline. Whether they live on Rio’s glitzy seafront, in one of the city’s 1,000odd favelas (shantytowns) or in dowdy dormitory districts, the mood is grim. A law student who came three years ago, intending to stay after her studies, now wants to leave: She is fed up with cuts to the budget of her state university and with strikes that have forced it to cancel classes. A group of businessmen tried to improve the state’s governance in 2008 by paying for a renowned consultant to offer management advice to the administration. A few years later the bureaucrats slipped back into clientelistic habits. Carioca friends of film director José Padilha, who lives in Los Angeles, have been telling him to stay there. According to a poll conducted last September, 56 percent of cariocas want to leave the city, up from 27 percent in 2011. No tourist will fail to notice the jarring juxtapositions of wealth and

poverty, a consequence of Rio’s exuberant topography as well as its poor governance. Residents of lush Gávea can expect to live past 80, 13 years longer than their neighbors in Rocinha, a large favela next door. Crime rates vary wildly. Last year 133 people died violently in Santa Cruz, a deceptively tranquil district at Rio’s western tip, where broccoli and books are sold side by side in a shabby central market. In the three beachfront barrios of Zona Sul, the southern zone, whose joint population is roughly equal to Santa Cruz’s, only 11 did. A priority in middle-class Copacabana, where a quarter of the residents are 65 or older, is fixing uneven pavements, said Fernando Gabeira, a writer who was an unsuccessful candidate for mayor in 2008. In Complexo do Alemão, a large northern favela with a young population, it is better schools and jobs. Everyone worries about crime. The vast majority of cariocas live neither along beachfront avenues nor in the alleyways of ramshackle favelas. Zona Sul is home to 11 percent of the city’s inhabitants. Favelas account for only 3.7 percent of the city’s area and house only 22 percent of its people. Most of the rest live in charmless, lowrise apartment blocks that arch across

Rio’s north and west. Then there is Barra da Tijuca, a fast-growing miniMiami of car dealerships, marshland and cookie-cutter condominiums with names like “Sunflower” and “Villaggio Felicitá.” Tourism and other services provide most jobs, and a quarter of young people work in bars and restaurants. Many have long commutes. Emanuel, a jovial 60-year-old with a missing front tooth, grumbled that it took him an hour-anda-half to commute to Leblon, where he sells biscuits and iced tea along the beachfront, from Jacarepaguá, 14 miles to the west. Some 2 million workers stream into Rio daily from its underdeveloped periphery. A successful games could lift Rio’s downbeat mood. That will not be enough to make the city an economic dynamo, however. The spectacular scenery makes people want to come, but it will take more enlightened crimefighting, better fiscal management and improved public services to make them want to stay. Until its leaders provide that, Rio will not become a great city, merely a great setting for one.

EXPERT RUG ADVICE FROM A GENERATION OF MAKERS

LIFE

comes of Age

South ForbeS GolF City

A little course A

Story and photos by Mike Besa

s golfers, Filipinos are a spoiled lot. We have tee boys and girls tee balls up for us on the driving range and we have caddies and umbrella girls to do the menial things, like take care of our clubs, rake the bunkers, put sand in our divots and shield us from the sun. Even our golf courses spoil us. Most courses are built to championship standards, capable of playing host to and testing the best players in the game. » F2

| Tuesday, augusT 9, 2016 sports@businessmirror.com.ph Editor: Mike G. Besa | www.pinoygolfer.com

The sun rises on the short par-4 third at South Forbes Golf Club.

“In a meeting attended by the officials of the DOE [Department of Energy], NGCP [National Grid Corp. of the Philippines] and Meralco [Manila Electric Co.], projections show that there will be yellow alerts for the rest of the week, due to insufficient power supply brought about by scheduled and forced outages of power plants,” Energy Secretary Alfonso G. Cusi said.

LIFT OF FAITH

Hidilyn Diaz proves it can be done, and in a sport that symbolizes so many things—from the hardships an athlete goes through and transcends to every Filipino’s effort to ease each burden in his everyday life—a lift of faith, indeed. Diaz’s silver medal in women’s weightlifting at the Rio de Janeiro Olympics on Sunday shines like gold, and now, life won’t be the same for this 4-foot-11 pocket Lady Hercules from Zamboanga City. Story on C2 and C3. AP

BMReports

1,000+ MW The needed reserve to lift yellowalert status, according to National Grid Corp. of the Philippines

A LITTLE COURSE COMES OF AGE

GOLF

@llectura

According to NGCP, power reserves should be a little over 1,000 megawatts (MW) in order to lift a yellow alert. However, based on NGCP’s monitoring outlook, the projected power reserves in a day for the week is a little over 1,000 MW. “In the web site, the projections are done a day ahead. As we draw closer, the figures are becoming more accurate. Remember that there are unplanned outages on top of the planned outages that unexpectedly occur,” NGCP Spokesman Cynthia Alabanza said when sought for comment. Luzon was placed on yellow-alert status by NGCP on Monday, from 9 a.m. to 4 p.m., but was later lifted at 1 p.m. due to sufficient ancillary reserves. Team Energy, operator of Sual and Pagbilao power plants, said on Monday all units of the two power plants are fully available as of 11 a.m. It added that Sual’s Unit 2 (600 MW) will go on planned maintenance shutdown from August 27 to September 26. The recent series of yellow- and redalert status in the Luzon grid began on July 26. There were a number of power plants in Luzon that simultaneously shut down for maintenance, several others on forced outage and others operated on limited capacity, triggering a sharp increase in the prices of electricity and rolling outages. Continued on A2

PESO exchange rates n US 46.9590

Private sector sees mass-housing demand as source of growth

PHL still grappling with housing ills By Roderick L. Abad

Contributor

@rodrik_28

Part Two

HE country’s housing backlog, particularly in the mass sector, is seen to continue to exist as a challenge to national growth if drastic change is not done today. By the end of this year, dwelling requirement is projected to reach 5.5 million units, Jose Romarx Salas said, sans citing his source. “Servicing the estimated demand for housing at 5.5 million for this year, even just a small portion of it, is a key driver of growth,” Salas, Pinnacle Real Estate Consulting Services Inc. (Precsi) sales and research director, told the BusinessMirror. The notion of oversupply in the country, according to him, can be attributed to the brisk development of residential condominium buildings in Metro Manila, mainly catered to middle-income earners. “The mid-market residential is a very competitive space because of the presence of a lot of [big developers],” Salas said. “This is so because they are successful in selling their products.” According to Salas, competing against these players for the same market segment, though, is not advisable. “They have the marketing and financial clout to build, sell and deliver

their projects.” While the high level of competition in this segment is good for the buyers and tenants because they would have a lot of choices, he emphasized that other categories have a lot of catching up to do. “Both the high-end and affordable housing markets remain underserved,” he said. While the luxury residential market is priceresilient, since the target market looking for its premium facilities and services that suit their tastes and whims are willing to pay higher costs, the latter faces a challenge of the priceconscious buyers, who have limited budget or without the capacity to buy at all. Several factors identified to have caused the huge housing problem in the country over time would include rapid urbanization, population growth, climate change, government budget constraints, limited land for residential use and low-affordability of targeted beneficiaries, according to Salas. If no program will be implemented to aggressively address this malaise, preliminary estimate of the country’s housing need for the period 2017 to 2022 is projected to reach 6,050,267, based on the study conducted by the Philippine Statistics Research Training Institute. Even further, the University of Asia and the

5.5 million –

The total housing units required for 2016, according to Jose Romarx Salas, Pinnacle Real Estate Consulting Services Inc. sales and research director

Pacific’s research shows the backlog could rise to 6.5 million by 2030. Such perennial problem that has been plaguing the Philippines since the 1980s will continue “unless a massive-housing program is set in place,” noted Habitat for Humanity Philippines Inc. Managing Director Charlito S. Ayco.

Socialized housing

SOCIALIZED housing traces its roots to the social-justice policy of then-Philippine Commonwealth President Manuel Luis Quezon. Quezon that time ordered the immediate creation of the People’s Homesite Corp. (PHC) as the first state housing agency and a subsidiary of the National Development Co. (NDC) on October 14, 1938. Continued on A2

n japan 0.4604 n UK 61.4412 n HK 6.0555 n CHINA 7.0610 n singapore 34.8800 n australia 35.7264 n EU 52.0541 n SAUDI arabia 12.5214

Source: BSP (8 August 2016 )

BMReports BusinessMirror

A2 Tuesday, August 9, 2016

www.businessmirror.com.ph

Private sector sees mass-housing demand as source of growth

PHL still grappling with housing ills Continued from A1

Up on s u g ge s t ion of D on Alejandro Roces Sr., who was appointed PHC chairman of the board, a resolution was approved on October 10, 1939, to buy a tract of land consisting of 15,723,191 square meters in Diliman Estate owned by Doña Teresa Tuazon at P0.50 per sq m, public records revealed. The property was intended to be subdivided into small lots to sell to poor people at a price so low it would be within their reach. On September 17, 1945, the government created the National Housing Corp. (NHC) but merged it with PHC into the People’s Homesite and Housing Corp. (PHHC) on October 4, 1947. In the years that followed, other related agencies were formed—the

Presidential Assistant on Housing and Resettlement, Tondo Foreshore Development Authority, Central Institute for Training and Relocation of Urban Squatters, Presidential Committee on Urban and Resettlement, Sapang Palay Development Committee, and Interagency Task Force—to undertake the relocation of families in Barrio Nabacaan, Villanueva, Misamis Oriental.

Sapang Palay

THE Slum Clearance Committee was established in 1950. Squatter families were evicted and transported to relocation sites outside the metropolis. A decade after, Sapang Palay, a small resettlement 40 kilometers north of Manila, became the des-

tination of relocated families. Since then, large-scale evictions were done from 1963 to 1964. More than 4,000 families who lived within the walls of Intramuros were moved by the truckload to Sapang Palay. The area at that time was not prepared for a relocation of this size. Apart from the insufficient preparation of land, Sapang Palay did not provide for employment and burdened the inhabitants with large transportation costs to Manila, where most of them sourced their livelihood. As a result, about half of the families relocated to Sapang Palay returned again to slums in Manila.

PHHC

THE PHHC administered 19 hous-

ing projects in 1969. Approximately, 12,000 sites for housing had been prepared or sold to put up relocated squatter families. Six years later, the National Housing Authority (NHA) came into being as the only national agency tasked to engage in housing production for families with low income. Its establishment was the second attempt of the government to integrate all housing efforts under a single agency, 28 years after the merger under the PHHC.

MHS and the present

BY virtue of Presidential Decree 1396, the Ministry of Human Settlements (MHS) was created in 1978. It adopted a holistic approach to housing and placed housing offices,

including the NHA, in its purview in 1981. That time the NHA identified 415 blighted areas with a total population of 1 million to be considered for onsite development. Other areas, according to NHA documents, will be eradicated. Strong opposition hounded the project because the beneficiaries will carry the burden for improvements in the infrastructure when they cannot even often meet their basic needs. Upon the assuming office, President Corazon C. Aquino abolished the MHS on March 26, 1986, by issuing Executive Order (EO) 10. The EO placed government’s housing agencies under the administrative supervision of the Office of the President.

Cusi: Power reserve remains critical …

A yellow alert is issued by NGCP when contingency reserve is less than the capacity of the largest synchronized unit of the grid. In Luzon this is equivalent to 647 megawatts (MW), or one unit of the Sual power plant. A red alert, meanwhile, means that there is severe power deficiency.

To mitigate the effects to the public and while awaiting for affected power plants to be synchronized to the grid, the following were agreed upon: ■ Encourage consumers to conserve energy. ■ Meralco and non-Meralco covered areas to encourage more

participation in the interruptible load program (ILP). ■ NGCP to increase its importation of electricity from the Visayas without affecting their energy requirements. ■ Meralco to explore the possibility of entering into contracts with diesel-powered plants to

augment supply. “In the long term, the DOE will require a more efficient synchronization of the system and a more accurate data to determine the needed supply,” the agency said. The DOE gave no details on the participation of the power-generating companies that attended

Subsequently, EO 90 was issued on December 17, 1986, citing the need to “rationalize the housing structure in the government along lines of specialization and concentration.” In line with this, the HUDCC was created as an umbrella agency for housing. It was charged with the main function of coordinating the activities of various government housing agencies engaged in production, finance and regulation. Later on, EO 20 in 2001 was issued and reaffirmed mass housing as a centerpiece program in government’s poverty-alleviation efforts. Likewise, it reaffirmed the HUDCC’s administrative supervision over government’s housing agencies, including the NHA. To be concluded

Continued from a1

the meeting. For NGCP’s part, the grid operator said it will “pursue to encourage non-Meralco ILP” participants. Alabanza said these are the heavy commercial or industrial users who are outside of the Meralco franchise area. “The ERC already approved the

framework for this last year, but we received a lukewarm response. We will pursue this nonetheless. NGCP will also maximize our line so we can import power from the Visayas without compromising their own supply in terms of stability and supply,” the NGCP official added.

BMReports BusinessMirror

news@businessmirror.com.ph

Tuesday, August 9, 2016

More spending on consumption, infra in H2 seen to boost growth 7 percent R By Cai U. Ordinario @cuo_bm

OBUST consumption and infrastructure spending in the second half of the year will likely boost the country’s GDP growth to nearly 7 percent, according to the National Economic and Development Authority (Neda).

Socioeconomic Planning Secretary Ernesto M. Pernia told reporters more infrastructure spending,

as well as public-private-partnerships (PPPs), will be rolled out in the second half of the year.

“Consumption spend ing is going to remain bullish because of the confidence and I think investors are also encouraged. In other words, those who were waiting by the sidelines, those w ith wait-and-see attitude, I think some of that, or most of that, has been eased or lifted,” Pernia said. This is the same growth outlook, or around 7 percent, that Pernia forecast on the secondquarter growth of the Philippine economy. Pernia said this growth will be driven mainly by the 2016 elections, as well as the confidence of consumers and businessmen to spend and invest between the April-to-June period.

Take care of Marcos burial, Veterans Affairs Office told By David Cagahastian @ davecaga & Jovee Marie N. dela Cruz @joveemarie

HE Department of National Defense (DND) has ordered the Philippine Veterans Affairs Office (Pvao) to arrange everything needed for the burial of the late dictator Ferdinand E. Marcos. In a memorandum, Defense Secretary Delfin N. Lorenzana told the Pvao the decision to bury the former president at a cemetery for heroes is “in compliance to the verbal order of [President Duterte] to implement his election campaign promise to have the remains of...Marcos to be interred at the Libingan ng mga Bayani.” “Kindly undertake the necessary planning and preparations to facilitate the coordination of all agencies concerned, especially the provisions for ceremonial and security requirements,” Lorenzana’s memorandum read. Mr. Duterte has said he would let the Marcos family finalize the details regarding the date and interment arrangements at the Libingan ng mga Bayani. Mr. Duterte defended his decision to allow the burial of the former president at the Libingan ng mga Bayani, which was earlier opposed by former President Benigno S. Aquino III. Mr. Duterte said there are only two qualifications for a dead person to be buried at the consecrated burial grounds for Philippine heroes: for the dead person to be a soldier or for him to be a former president. “ There are only two qualifications and the former President Marcos fits in both qualifications,” Mr. Duterte said. The Commander in Chief’s decision received the support of several lawmakers.

Support

IN a news conference on Monday, Deputy Speakers Nationalist People’s Coalition Rep. Mercedes K. Alvarez of the Sixth District of Negros Occidental, National Unity Rep. Fredenil H. Castro of Capiz and PDP-Laban Rep. Eric D. Singson of Ilocos Sur said Republic Act 289 allows Marcos to be buried at the Libingan ng mga Bayani. The lawmakers said the law, which was enacted in 1984, is clear in its aim to allow former presidents to be buried at the Libingan ng mga Bayani. They said the law aims “to perpetuate the memory of all the presidents of the Philippines, national heroes and patriots for the inspiration and emulation of this generation and of generation still unborn.” Castro said the law is clear and the literal meaning should apply. “The literal meaning is that the only qualification is for being the president of the country,” Castro said. “The law does not provide any prerequisite for Marcos to be buried at the Libingan ng mga Bayani. We cannot give meaning to the law except the literal meaning because the law is very clear.” However, the lawmaker said the humanrights violation and ill-gotten wealth are different issues leveled against Marcos and his family. “These are different issues,” Castro said.

“Even if [Mr. Marcos] had already been buried the ill-gotten wealth or the other issues relevant may still be discussed. The only issue here is whether he will be physically buried in the Libingan ng mga Bayani.” Castro added that any other issue “other than the physical burial of Marcos, cannot be associated with his being buried in the Libingan ng mga Bayani.

Rights

FOR his part, Singson said the Marcos family only invokes the right of the former president. “[The] Marcos family desires to put him in the Libingan ng mga Bayani,” Singson said. “They are asking [for this] because it is the right of every former president to be buried if the family wishes to.” N a c i o n a l i s t a Pa r t y R e p. R ay m u n d Villafuerte of Camarines Sur agreed with the lawmakers “so we can finally move forward and unite as a nation.” “ The government should continue to make effor ts to foster peace and reconciliation with all sectors of society,” said Villafuerte, who was not in the news conference organized by Castro. “Peace and unity is the goal of our President in making these decisions.” The body of Marcos’s has been on display at a mausoleum in Batac, Ilocos Norte. Marcos died in exile in Hawaii after fleeing the Philippines in 1986 after a bloodless revolution.

Opposition

OTHER lawmakers believe Marcos’s remains should remain in Ilocos Norte. In the same news conference, Deputy Speaker Liberal Party Rep. Romero Quimbo of Marikina said burying Mr. Marcos at the Libingan ng mga Bayani “will not wash away his sins.” Quimbo said in Tagalog that, while burials usually mean closure and serenity, the interment of Marcos’s remains is the opposite. “While the burial is symbolic to some, the bigger question here is giving justice to those who greatly suffered during his reign,” Quimbo said. “The burying of Marcos at the Libingan ng mga Bayani, basically declaring him as a ‘hero’ is contemptuous to the sacrifices of martiallaw martyrs and victims who stood up against the dictatorship and fought for democracy,” Bayan Muna Rep. Carlos Isagani T. Zarate said. Party-list Rep. Tom S. Villarin of Akbayan, meanwhile, urged the government to scrap its decision burying Marcos at the Libingan. “Burying Marcos at the Libingan ng mga Bayani is tantamount to burying the numerous atrocities he committed under his authoritarian regime,” Villarin said. Mr. Duterte said he would allow those opposed to the planned burial to demonstrate for two weeks, and that he would instruct the local mayors concerned to issue the permits. But he said demonstrators would have to deal with the averse public opinion in case their rallies result in heavy traffic in adjacent areas. “If they want to exercise their rights, then I would let them do so, subject to the exercise of the rights of those who will be affected,” Mr. Duterte said.

The forecast GDP growth for the second half of 2016, according to Socioeconomic Planning Secretary Ernesto M. Pernia

He s a id t h at , des pite t he prev ious administration’s announcement t hat 87 percent of the budget a lready released, t hese e x pend it u res m ay not have been spent during this per iod. T hus, the second ha lf of the year may benefit from these

unspent budget a l locations. “From May to end of June, [President] Duterte, may impact na rin ’yun, ’yung confidence, people became more optimistic. The businessmen, many of them were against [Mr.] Duterte before, but after the election, there were a lot of converts to President Duterte’s side, especially because of the Davao consultation,” Pernia said. In July the Asian Development Bank (ADB) said the Philippine economy will continue to post robust growth this year and next year despite slower growth in the second semester and global uncertainties due to Brexit. In a supplement to the Asian Development Outlook (ADO),

the A DB retained its grow th forecast for Philippine GDP at 6 percent this year and 6.1 percent next year. In the first quarter of the year, the Philippine economy grew 6.9 percent, 1.9 percentage points higher than its performance in the same period of 2015. Domestic consumption is expected to continue for the rest of the year, as inflation is seen to average 1.8 percent this year, lower than government expectations and the ADB’s own forecast of 2.3 percent in the ADO. However, the ADB said its inflation forecast for 2017 was revised slightly upward to 2.8 percent, in anticipation of higher gains in oil prices.

BMReports BusinessMirror

A4 Tuesday, August 9, 2016

news.businessmirror@gmail.com

Foreign visitors flock to PHL despite air-connection disadvantage–DOT

By Ma. Stella F. Arnaldo

@Pulitika2010

HE Philippines recorded the fourth-largest growth in terms of international tourist arrivals among Southeast Asian countries, according to the latest report of the United Nations World Tourism Organization (UNWTO). The UNWTO Tourism Highlights for 2016 showed international tourism arrivals in the Philippines rising by 11 percent in 2015, following Myanmar, which received a 52-percent hike in foreign tourists, Thailand (20.4 percent) and Lao PDR (12 percent). In absolute terms, however, the Philippines ranked sixth in terms of international tourist arrivals at 5.36 million, after consistent topranking Thailand that recorded close to 30 million arrivals in 2015, followed by Malaysia, at 25.72 million; Singapore, at 12.05 million; Indonesia, 10.41 million; and Vietnam, at 8 million. After the Philippines, follows Cambodia at 4.78 million; Myanmar, at 4.68 million; Lao PDR, at 3.54 million, and Brunei Darussalam, at 218,000. No data was available for Timor Leste in 2015, although it registered 60,000 foreign visitors in 2014. In a text message, Undersecretary for Tourism Development Benito Bengzon Jr. of the Department of Tourism (DOT) said: “The UNWTO report is an affirmation that the Philippines is on the right track with its trajectory to grow the tourism business in the coming years.” He added that “in fact, inbound visitors for January to May 2016 continued to register a double-digit growth [at 13 percent].” As a region, Southeast Asia, which recorded 104.63 million in international tourist arrivals, accounted for some 9 percent of the

1.2 billion worldwide tourist arrivals in 2015. The UNWTO also found that, despite safety and security concerns, France topped the global list in terms of international tourist arrivals last year, followed by the United States, Spain and China. “Asia and the Pacific welcomed 279 million international tourists in 2015, 15 million more than in 2014, corresponding to a 6-percent growth,” according to the UNWTO report. “The region earned $418 billion in international tourism receipts, an increase of 4 percent in real terms. Asia and the Pacific account for 24 percent of the world’s arrivals, and 33 percent of receipts. By subregion, Southeast Asia [+8 percent in arrivals] and Oceania [+7 percent] recorded the strongest growth.” The DOT has always underscored the fact that growth in international tourist arrivals of neighboring countries, like Singapore, Malaysia, Thailand, even Cambodia, Myanmar and Lao PDR, are driven by tourists merely crossing over the border. “It is only the Philippines, where 99 percent of international visitors arrived via air, unlike other Southeast Asian countries,” Bengzon explained. He stressed, however, that “visitors in the Philippines stayed longest at 9.8 nights and spent $1,000 [P47,000] per trip,” compared to visitors in other Southeast Asian countries. The DOT forecasts some 6 million foreign visitors to arrive in the

FOREIGN visitors arrive at the Ninoy Aquino International Airport. The Department of Tourism forecasts some 6 million foreign visitors to arrive in the country this year, down from its 10-million original target under the National Tourism Development Plan of 2011 to 2016. Nonie Reyes

country this year, down from its 10-million original target under its National Tourism Development Plan of 2011 to 2016. Other findings by the UNWTO: n Tourism flows were influenced by three major factors in 2015: the unusually strong exchange fluctuations; the decline in price of oil and other commodities; and increased global concern about safety and security in some destinations. n China, the United States and

It is only the Philippines where 99 percent of international visitors arrived via air unlike other Southeast Asian countries.”—Bengzon the United Kingdom led outbound tourism in their respective regions in 2015, fueled by strong currencies and economies.

Pakistan, PHL agree to develop social safety nets for Asia’s poor By Recto Mercene @rectomercene

he chairman and Minister of Pakistan’s largest social safety net had a bilateral meeting with the chief of the country’s Department of Social Welfare and Development (DSWD) to present her country’s model for helping the poor. Minister Marvi Memon presented to the Philippines her country’s social safety net for the poorest of the poor, which was given an allocation of $1.7 billion by Pakistan’s Ministry of Finance. “My government, prime minister and finance minister are both very keen that this program should flourish because it’s for the poor. We take care of 5.3 million of our poorest families [by] giving them a quarterly stipend,” Memon told the BusinessMirror during an interview at the Pakistani Embassy in Makati last Friday. Memon came to Manila to participate in an ongoing Asian Development Bank (ADB) conference and spoke about Pakistan’s social safety nets.

“In the process, I also met your social minister, and I’m happy to meet her, she is a dynamic woman,” she said. Memon and Social Welfare Secretary Judy M. Taguiwalo discussed the achievements and challenges of Pakistan and the Philippines in social protection and safety nets, including targeting, payment mechanisms, poverty-alleviation programs, disaster-risk management, women empowerment, food subsidies, health and educational conditional cash transfers, and communication strategies. She said they decided to work together on developing the League of Social Safety Nets for Asia to contribute to the “Asian century.” They also agreed to work on women empowerment by promoting the “sisters in success” concept, which will highlight women role models and help women get out of poverty. Memon said she and Taguiwalo have agreed on encouraging corporate multinationals headquartered in Asia, such as Coca Cola, IMB and other large multinationals, to tailor their corporate social-responsibility

Memon

programs to the needs of the poor. The Pakistani official also visited the Philippine General Hospital’s Medical Foundation, a private organization for the poor. She met the Chairman of the Board Dr. Gregorio Alvior and had meetings with philanthropists and women entrepreneurs, such as former Tourism Secretary Mina Gabor and Nicky Tang. Memon said the region has entered the Asian century “so the Asian poor must get out of poverty fast. It is very important, this needs to be

Asia’s century and the poverty needs to finished faster at the rate it needs to be and the poverty needs alleviation, whatever you want to call it.” According to Memon, the ADB has yet formalize ways of allowing the social ministers to work together, “so my idea was to create a League of Social Safety Nets for all [government officials] to come together to share their knowledge.” Since every country has its own peculiarities and Asia has certain cultures, traditions and values, Memon suggested that “we must go into our roots, we must capitalize on our capabilities and must mobilize our resources together.” “If we win, we win as Asia, so we cannot afford to lose on this war against poverty. As a Pakistani politician, it’s my dream to see this come true for Asians,” she said. Memon conveyed the best wishes of Pakistan Prime Minister Nawaz Sharif and Finance Minister Sen. Ishaq Dar to President Duterte and her Filipino counterpart. Memon was accompanied by the Pakistani Ambassador to Philippines Safdar Hayat.

n Over half of international tourist arrivals, or 632 million, traveled for holidays, recreation and other forms of leisure; 14 per-

cent traveled for business; and 27 percent visited friends and relatives, were on religious pilgrimages, or had health treatments. The UNWTO forecasts international tourist arrivals worldwide to expand by at least 3.3 percent annually between 2010 and 2030. This is seen reaching 1.8 billion in 2030. It added that the market share of emerging economies is seen hitting 57 percent by 2030, equivalent to 1 billion international tourist arrivals.

World’s least miserable live in Asia, thanks to disinflation

he Land of Smiles really is the happiest place in the world, at least in terms of holding a job and keeping the rising cost of goods in check. The Misery Index, computed by adding inflation to the unemployment rate, gives Thailand a score of 1.11 percent, which is the best—or least miserable—for all 74 economies surveyed by Bloomberg. Singapore and Japan are close runner-ups, with 1.40 percent and 2.70 percent, respectively. The United Kingdom ranks the 17th least miserable country, while the US takes 21st place. China follows closely in 23rd spot. Venezuela is at the other end of the scale, as plunging oil revenues have led to chronic shortage of food and medicine, and inflation running at 181 percent. With an index of 188.2 percent, the South American country is easily

the “world’s most miserable” place. It is followed by Bosnia at 48.97 percent and South Africa with 32.90 percent. Thailand’s unemployment rate was around 1 percent at the end of June, while its consumer price index rose 0.1 percent year-on-year in July versus a 0.4-percent increase in June. Even so, it’s not all roses and rapture for the Southeast Asian nation. Slowing inflation, though welcome for consumers, may signal a less than healthy economy. Disinflation is a sign that demand for goods and services is insufficient to match supply in an economy, Sumitomo Mitsui Banking Corp. global market analyst Satoshi Okagawa says. It encourages consumers to delay purchases until goods become cheaper, further lowering demand. In this deflationary spiral, wages will drop, Okagawa adds. Bloomberg News

AseanTuesday BusinessMirror

news@businessmirror.com.ph

Baht advances as vote result buoys hopes for democracy

hailand’s stocks rose the most in more than two weeks and the baht strengthened after voters approved a militarybacked constitution, putting the nation on track for elections next year. The SET Index advanced 1.1 percent to 1,534.89 as of 11:30 a.m. in Bangkok, on course for the highest close since April 2015. The gauge is up 19 percent this year in the best performance in Asia. The baht climbed 0.4 percent to 34.94 a dollar, while Thai government bonds fell, pushing the 10-year yield up five basis points to 2.05 percent. The passing of the charter means the junta, which has boosted public spending in an attempt to spur economic growth, is more likely to stick to its current timeline of holding elections by late 2017. The document could also boost the military’s influence over future governments and may ultimately mean more political turmoil for Thailand, which has seen 12 coups since the end of absolute rule by kings in 1932. “A win might be a vote of confidence in the junta and, at a stretch, better policy execution in Thailand,” said Carl Berrisford, an analyst at UBS CIO Wealth Management in Hong Kong. “But it’s really a reiteration of the status quo and the elections target for next year.” The Election Commission said late on Sunday that with 94 percent of votes counted, the draft constitution had received 61.4 percent yes votes to 38.6 percent no votes, though official results aren’t expected for several days. Officials said turnout was around 55 percent of the 50.2 million people eligible to vote, around the same as past such ballots.

Bolster confidence

Foreign funds have bought a net $2.4 billion of Thai stocks this year and have pumped $9.5 billion into the country’s bonds, exchange data show. The approval of the constitution will bolster investor confidence and help draw more inflows amid optimism that consumption and private investment will rebound, said Kesara Manchusree, president of the Stock Exchange of Thailand. The baht was the only emerging-market Asian currency to rise on Monday as the greenback strengthened after better-than-expected US jobs data. “This settles political uncertainty but it’s too soon to tell if this is a genuine move by the junta to release power,” said Wu Mingze, a foreign-exchange trader in Singapore at INTL FCStone Inc., a Nasdaq-listed global payments-service provider. The baht is likely to trade in a range of 34.80 to 35.30 this week, as the passage of the constitution bolsters investor confidence in Thai assets in the short term, TMB Bank Pcl.’s Bangkok-based strategist Jitipol Puksamatanan wrote in a note on Monday. “The result provides relief to investors,” says Tsutomu Soma, Tokyo-based general manager of fixed-income at SBI Securities. “Stability in Thailand is likely to remain, which should encourage inflows to continue for now.”

Bloomberg News

Editor: Max V. de Leon • Tuesday, August 9, 2016 A5

Laos’s thirst for Mekong River dams imperils fishing, farming

HIANG KHONG, Thailand— Dismissing its neighbors’ pleas, impoverished Lao PDR is rapidly building a Mekong River dam that threatens fisheries crucial to millions of Southeast Asia’s poorest people. The site of the Don Sahong dam, less than 2 kilometers (1 mile) from the Lao-Cambodian border, is in an area famous for spectacular waterfalls and deep pools that is among the few habitats of the endangered Irrawaddy dolphin. A “coffer dam” blocks one of the Mekong’s main channels to allow construction of the hydropower project, which will suck inasmuch as half of the river’s water during the dry season. Landlocked Laos is Southeast Asia’s poorest state, and all its neighbors far exceed its population of 7 million. But by virtue of geography and burgeoning Chinese influence, its authoritarian leaders wield unaccountable power over a 4,800-kilometer-long (3,000-milelong) river that begins in Tibet and winds through six countries before emptying into the South China Sea. China has built six dams on its stretch of the Mekong since the mid1990s, and Laos plans nine. Many dams have been built on Mekong tributaries, as well, and dozens more are planned. Experts say they are already damaging the world’s largest inland fisheries and degrading a rice bowl delta that helps feed Cambodia and Vietnam, the two countries farthest downstream. Even building a few dams on the lower Mekong will dramatically compound the damage to a river basin that 60 million people rely on, according to scientific models of dam impacts. The Don Sahong dam “is like a 1-ton bomb above us,” said Phoy Vanna, a tourist boat owner and

The population of landlocked Lao PDR, whose authoritarian leaders wield unaccountable power over a 4,800-kilometer-long river that begins in Tibet and winds through six countries before emptying into the South China Sea

IN this June 20 photo, a fishing boat passes near a construction site of the Don Sahong Dam, near Cambodia-Lao PDR borders, in Preah Romkel village, Stung Treng province, northeast of Phnom Penh, Cambodia. Landlocked Laos is the poorest state in Southeast Asia, but by virtue of geography and growing Chinese influence, its secretive authoritarian leaders wield a huge and unaccountable power over a river that winds through six countries. AP

father of 10 who has joined hundreds of other Cambodian villagers in protests. The rest of Southeast Asia is powerless to stop Laos. Under an international agreement on protecting the Mekong, the country is obliged only to consult its neighbors. At 256 megawatts, Don Sahong will have relatively little power capacity, but it could be especially damaging because it blocks a major route for fish migrations. In an environmental impact study that did not consider effects on neighboring countries, Laos says it will protect fisheries by deepening an inlet and blasting rapid to create new routes for fish to swim upriver. “We don’t know what the claims that things will be fine are based upon. This is unacceptable considering the high stakes,” said Ian Baird, a

geography professor at the University of Wisconsin-Madison who studies Mekong fisheries. Laos has said the power will help fuel development in the south of the country. Yet, overall, its plans for nine hydro dams call for exporting most of the electricity to Thailand and Vietnam. Research indicates the combined effect of planned Mekong dams would be devastating. Most recently, a study for Vietnam by Danish water consultancy DHI predicted Mekong Delta rice production would drop steeply because the dams would trap sediments, reducing nutrients flowing downstream. The study predicts annual fishery and farming losses of more than $760 million in Vietnam and $450 million in Cambodia, the two worst affected countries. With Don Sahong, Laos followed a pattern established five years earlier

when it went ahead with the Xayaburi dam in northern Laos over the objections of neighboring countries. Philip Hirsch, a professor of human geography at Sydney University, said China has emboldened Laos. Chinese dams have raised dry-season water levels, making downstream hydro development more viable. And Beijing’s influence has made Laos less dependent on Vietnam, the country worst affected by Mekong dams. The effects of existing Chinese dams are apparent to many across the Mekong from Laos in the sleepy northern Thailand town of Chiang Khong, which once bustled with hundreds of fishing boats. More than a decade ago, a day’s catch could be 10 or more kilograms. Today it’s 1 kilogram or 2 kg or often nothing. Some species of fish have gone altogether. Fishing as a main livelihood

has almost disappeared. “I’m a fisherman but I feel like I have to buy a can of fish to eat,” 60-year-old Somdet Tanatunyakul said. Unpredictable dam releases also damage riverbank gardens that line the Mekong throughout Southeast Asia. More than half that riverbank land will be lost if all proposed mainstream dams are built, according to an Australian study. Pianporn Deetes, a campaigner with International Rivers, an advocacy group, said the Mekong will be irreversibly damaged within the next decade without a binding agreement to control development. “Each dam will be owned and operated by different companies, from different countries. Each of them will be focused on extracting the resources of the Mekong for the highest profit they can make,” she said. AP

Thai voters overwhelmingly approve junta-backed constitution

ANGKOK—Thai voters on Sunday overwhelmingly approved a new junta-backed constitution that lays the foundation for a civilian government influenced by the military and controlled by appointed—rather than elected—officials. A lthough near-final results showed that more than 60 percent of voters in a referendum called by the military government approved of the constitution, the vote is likely to be met by some skepticism. The junta— led by Prime Minister Prayuth Chanocha, a retired army general who has severely curtailed dissent since coming to power in a 2014 coup—imposed severe restrictions on public discussion of the proposed constitution. Ahead of the referendum, the junta banned political rallies and open discussion about the constitution, and criticism of the draft was made punishable by 10 years in jail. Critics say the restrictions ensured that most people were unaware of the pitfalls of the charter, and were probably anxious to get the long-drawn process over with so that they could move on. The “yes” vote “adds that touch of legitimacy to the coup makers,” Pavin Chachavalpongpun, an associate professor at the Center for Southeast Asian Studies of Kyoto University in Japan, told The Associated Press (AP). “It gives them the green light for the next few steps they want to take. They will say the opposition cannot say anything now,” said Pavin, who is Thai and is a vocal critic of the junta. Prayuth’s office, however, said in a statement late on Sunday that the referendum “was conducted

with a high degree of transparency and openness on part of the government.” Despite the curbs on civil liberties, Prayuth’s rule has brought a measure of stability and ended the frequent street violence and divisive politics that had frayed Thailand’s social fabric for years. That veneer of stability could help explain the yes vote for the new constitution. There was also the allure of new elections that Prayuth has promised to hold in 2017, after the approval of the new constitution, although he’s said he would call the vote even if the referendum was defeated. The charter “speaks to a lot of worries and concerns that a majority of Thai people have,” Gothom Areeya, a professor at Thailand’s Mahidol University, told the AP. “Many Thais want to see an end to corruption and the return of peace and development. Even though experts like me may criticize it a lot, our message just didn’t reach a lot of the people.” With 94 percent of the ballots tallied when counting was suspended for the night, 61 percent of the voters said they approved of the constitution, while 39 percent rejected it. The official final count is expected to be issued on Wednesday. Only about 58 percent of Thailand’s roughly 50 million registered voters cast ballots in the referendum. In addition to asking for an opinion on the constitution, the referendum also asked a supplementary question on whether voters wanted an appointed Senate to choose a prime minister. That question elicited a less enthusiastic approval—58 percent yes and 42 percent no.

Thai soldiers line up to check their names before voting in a referendum on a new constitution at a polling station in Bangkok, Thailand, on August 7. Thais voted on Sunday in a referendum on a new constitution that critics say is tailor-made for the military government to stay in control for several years and entrench a new, quasi-democratic system that gives vast powers to appointed officials. AP

Analysts have said a yes vote would be a setback for democracy in Thailand. Pavin, the Kyoto University professor, said even when the military is no longer in power and a civilian government is in place after the 2017 elections, the military “will have the constitution as a remote control. The constitution can be used as a device to hold onto political power.” The main criticisms of the draft constitution are: n A transition period of at least five years to civilian rule. n A 250-member appointed Senate that includes the commanders of the army and other security services. n A deadlock in the 500-member elected lower house could trigger a selection of a prime minister who is not an elected member of parliament.

Under the abolished 2007 constitution, half the Senate was elected, and the prime minister had to come from the lower house. n Emergency decrees enacted by the junta without any parliamentary consent remain valid. Thailand has endured 13 successful military coups and 11 attempted takeovers since it replaced an absolute monarchy with a constitutional one in 1932. This would be Thailand’s 20th constitution. Leaders of the latest coup say frequent political conflicts had made the country ungovernable and that military rule was necessary for stability. The junta set up handpicked committees to draft a charter that would enshrine its declared goal of reforming politics by eliminating corruption. But others believe the new consti-

tution has a different aim: to weaken allies of former Prime Minister Thaksin Shinawatra, the central figure in the roiling of Thai politics. Thaksin’s political machine has easily won every national election since 2001, mainly due to the support of working-class and rural voters who benefited from his populist policies. Leading the other side is Thailand’s traditional ruling class and royalists—known as the “yellow shirts”—unnerved by Thaksin’s support, especially as it contemplates its future. King Bhumibol Adulyadej, whose righteous rule has anchored the kingdom since 1946, is 88 and ailing. The army ousted Thaksin in a 2006 coup, after yellow-shirt protesters took to the streets and accused him of abuse of power, corruption and disrespecting the king. He has lived abroad since 2008 to avoid prison for a corruption conviction that he says was politically motivated. The 2014 coup ousted his sister Yingluck Shinawatra, who was elected prime minister in 2011. Those who brought Thaksin down now seek to weaken major political parties, which would ensure that real power stays in the hands of what is dubbed the permanent bureaucracy: the military, the courts and other unelected guardians of the conservative bloc. Gothom, the Mahidol professor, said Thailand may see peace now, but that it will likely be a peace enforced by military power. “How much or how little freedom of expression will be allowed to the people, we will just have to wait and see,” he said. AP

The W

Business

A6 Tuesday, August 9, 2016 • Editor: Lyn Resurreccion

Iran executes nuke scientist convicted of spying for US

EHRAN, Iran—Iran executed a nuclear scientist convicted of spying for the United States, an official said on Sunday, acknowledging for the first time that the nation secretly detained and tried a man who was once heralded as a hero. Shahram Amiri defected to the US at the height of Western efforts to thwart Iran’s nuclear program. When he returned in 2010, he was welcomed with flowers by government leaders and even went on the Iranian talk-show circuit. Then he mysteriously disappeared. He was hanged the same week that Tehran executed a group of militants, a year after Iran agreed to a landmark accord to limit uranium enrichment in exchange for the lifting of economic sanctions. Amiri first vanished in 2009 while on a religious pilgrimage to Muslim holy sites in Saudi Arabia. A year later, he reappeared in a series of contradictory online videos filmed in the US. He then walked into the Iranian-interests section at the Pakistani Embassy in Washington and demanded to be sent home. In interviews, he described being k idnapped and held against his will by Saudi and A mer ica n spies. US of f icia ls said he was to receive millions of dollars for his help in understanding Iran’s nuclear program. Iranian Judiciary Spokesman Gholamhosein Mohseni Ejehi said Amiri “ had access to the country’s secret and classified information” and “had been linked to our hostile and No. 1 enemy, America, the Great Satan.” The spokesman told journalists that Amiri had been tried in a deathpenalty case that was upheld by an appeals court. He did not explain why authorities never announced the conviction, though he said Amiri had access to lawyers. News about Amiri, born in 1977, has been scant since his return to Iran. Last year his father told the BBC’s Farsi-language service that his son had been held at a secret site. Ejehi said Amiri’s family mistakenly believed he received a 10-year prison sentence. On Tuesday Iran announced it had executed a number of criminals, describing them mainly as militants from the country’s K u r d i s h m i no r it y. T h e n a n obituary notice for Amiri circulated in his hometown of Kermanshah, a city 500 kilometers southwest of Tehran, according

$5M The alleged payment to Iranian nuclear scientist Shahram Amiri for him to offer the Central Intelligence Agency information about Iran’s nuclear program, though he left the country without the money

to the Iranian proreform daily newspaper Shargh. Manoto, a private satellite television channel based in London believed to be run by those who back Iran’s ousted shah, reported on Saturday that Amiri had been executed. BBC Farsi also quoted Amiri’s mother saying her son’s neck bore ligature marks suggesting he had been hanged by the state. T he A ssociated Press (A P) cou ld not immediately reach Amiri ’s family. His disappearance came as Western countries stepped up their efforts to impede Iran’s nuclear program under the government of hard-line President Mahmoud Ahmadinejad. The US actively tried to recruit nuclear scientists to defect. Later, four Iranian nuclear scientists were assassinated between 2010 and 2012, and Iran blamed the slayings on Israel and the West. The Stuxnet computer virus, widely believed to be a joint USIsraeli creation, also disrupted thousands of centrifuges at a uranium-enrichment facility in Iran at the same time. In June 2010 a shaky online video emerged of Amiri saying he had been kidnapped by American and Saudi agents and was in Tucson, Arizona. A short time later, he appeared in a professionally shot online video near a chess set, saying he wanted to earn a doctorate in America and return to Iran if an “opportunity of safe travel” presented itself. His wife and son remained behind in Iran.

In this July 15, 2010, photo, Iranian nuclear scientist Shahram Amiri greets his son Amir Hossein as he arrives at the Imam Khomeini airport after returning from the United States. AP/Vahid Salemi

“I have not done any activity against my homeland,” he said. But soon, another clip contradicted that, and he appeared at the Pakistani Embassy. Hillary Clinton, who was then the secretary of state, stressed that Amiri had been in America “of his own free will.” “He is free to go,” she said. US officials at the time told the AP that Amiri was paid $5 million to offer the Central Intelligence Agency (CIA) information about Iran’s nuclear program, though he left the country without the money. They said Amiri, who ran a radiation-detection program in Iran, traveled to the US and stayed there for months by choice. Analysts abroad suggested Iranian authorities might have threatened Amiri’s family back in Iran, forcing him to return. On his return from the US, Amiri was greeted at airport by high-ranking government officials and was invited to TV talk shows where he explained how he bypassed a US trap to get home. Many newspapers published accounts of his return on their front pages and some suggested a movie be made from his story. He said Saudi and American of f icia ls had k id napped him while he visited the Saudi holy city of Medina. He said Israeli agents were present at his interrogations and that CIA officers offered him $50 million to remain in America.

“I was under the harshest mental and physical torture,” he said. Amiri’s case indirectly found its way back into the spotlight in the US last year with the release of State Department e-mails sent and received by Clinton, now the Democratic presidential candidate. The release of those e-mails came amid criticism of Clinton’s use of a private account and server that has persisted into her campaign against Republican candidate Donald Trump. An e-mail forwarded to Clinton by Senior Adviser Jake Sullivan on July 5, 2010—just 10 days before Amiri returned to Tehran—appears to reference the scientist. “We have a diplomatic, ‘psychological’ issue, not a legal one. Our friend has to be given a way out,” the e-mail by Richard Morningstar, a former State Department special envoy for Eurasian energy, read. “Our person won’t be able to do anything anyway. If he has to leave, so be it.” Another e-mail, sent by Sullivan on July 12, 2010, appears to obliquely refer to the scientist just hours before his appearance at the Pakistani Embassy became widely known. “The gentleman...has apparently gone to his country’s interests section because he is unhappy with how much time it has taken to facilitate his departure,” Sullivan wrote. “This could lead to problematic news stories in the next 24 hours.” AP

Clinton’s ‘Moscow Spring’ ended as Putin returned to power

ASHINGTON—As secretary of state, Hillary Clinton basked in a diplomatic “Moscow Spring,” seizing on Vladimir Putin’s break from the presidency to help seal a nuclear arms-control treaty and secure Russia’s acquiescence to a North Atlantic Treat y Organization (Nato)-led military intervention in Libya. But when Putin returned to the top job, things changed. Clinton, the Democratic presidentia l nominee, has vowed to stand up to Putin if elected, drawing on her four years of ups and downs as the public face of President Barack Obama’s firstter m “reset” w ith Russia. By comparison, her Republican opponent, Donald Trump, has rung alarm bells in Washington and Europe with his overtures to the authoritarian Russian leader. But Clinton’s wrangles with Russia led to mixed results. And her fortunes dipped dramatically after Putin replaced Dmitry Medvedev as president in May 2012. Just weeks later, Russia outmaneuvered her in negotiations over a complicated Syria peace plan, dealing her what was arg u ably her worst d iplom at ic defeat. While Clinton hailed it as a triumph, the war only escalated. And while her aides still insist she came out on top, the blueprint effectively gave Syria’s Moscow-backed president, Bashar al-Assad, a veto over any transition government, hampering all mediation efforts still. “There is no doubt that when Putin came back in and said he was going to be president, that did change the relationship,” Clinton said in a Democratic debate last year. “We have to stand up to his bullying and specifically, in Syria it is important.” Clinton’s history with Russia is significant, given the surprising role Russia has played in the US presidential campaign. Clinton and her supporters say she would be far tougher on Moscow than Trump, whose unusual foreign-policy statements include musings about Nato’s relevance and suggestions that he could accept Russia’s annexation of Ukraine’s Crimea region. Russia’s reported hacking of Democratic Party e-mail accounts also has led to charges that Putin’s intelligence services are meddling in the election, and Trump aided that perception by publicly encouraging Russia to find and release more of her emails. Clinton’s first encounters in Russian d iplomac y began on much more hopeful note. Meeting Foreign Minister Sergey Lavrov in 2009, Clinton initiated the effort to repair years of bitter relations, punctuated by a Russian war with neighboring Georgia a year earlier. Offering a large red reset button, Clinton outlined a broad agenda of cooperation.

The new policy paid dividends. With Putin focused on domestic matters during a four-year stint as prime minister, Medvedev opened up a new corridor for US forces and materiel heading to Afghanistan. The two nations sealed their most ambitious arms-control pact in a generation. Washington and Moscow united on new Iran sanctions. Years of trade negotiations culminated in Russia’s entry into the World Trade Organization. But it was perhaps Clinton’s unlikeliest diplomatic breakthrough that began the downward spiral: Libya. As America’s European allies sought a military intervention against Libyan dictator Moammar Qaddafi, Clinton played the role of skeptic, refusing to jump aboard. When she finally did, it proved critical in persuading Russia to abstain. The rebels overthrew Qaddafi five months later. Returning as president in May 2012, Putin was immediately confronted with Syria’s Libya-like escalation from Arab Spring protests to full-scale civil war. He played his cards differently than Medvedev, hinting to Obama that he could drop his support for the Syrian leader while shielding Assad from any UN pressure or foreign action that might chase him from power. Seeking Russia’s cooperation, Obama and Clinton avoided any talk that might threaten Russian equities in Syria, including a large naval base there. Their message was clear: The US wouldn’t try to pull a future post-Assad government out of Moscow’s orbit. It didn’t matter. When the UN proposed a peace plan that involved ushering Assad out of power and included penalties for noncompliance, the Russians balked. Faced with stalemate, the US and Russia arrived at a formula for a new government comprised of individuals chosen by the “mutual consent” of Assad and the opposition. A lt hough C l i nton c l a i med credit for the June 30, 2012, compromise in Geneva, it appeared to be Russia’s objective all along. Assad is still president. Clinton has acknowledged her frustration with an increasingly hostile Russia on Syria and other matters as her time in office wound down. In her final months, Russia ordered the end of all US Agency for International Development programs in the country. It approved a new law constraining the work of Russian and foreign non- gover n ment a l orga n i z ations. It banned US adoptions of Russian children. In December 2012 Clinton accused Putin of trying to “reSovietize” its region. And just before leaving, she wrote a memo to Obama urging him to finally suspend a reset that ended once and for all with Russia’s military incursions in Ukraine and annexation of Crimea in 2014—well after Clinton had left government. AP

Texas Hispanic voting bloc largely untapped H

OUSTON—Diana Villenas begins her pitch in English, but switches to Spanish if she gets blank stares, which happens often. It’s a tough sell in any language. “Are you registered to vote?” asks the 21-year-old environmental studies student at Saint Thomas University in Houston. “Do you want to be?” “No, gracias,” the bearded man in the black baseball cap says. Another ambling by with a cell phone to his ear shakes his head, as does a guy in a black-felt cowboy hat and a woman wearing a yellow blouse. The man in an American flag T-shirt even turns her down. As brassy Banda music blares from a nearby stage at a sprawling Hispanic festival adjacent to the Houston Texans’ dome, Villenas and other volunteers with Mi Familia Vota, a nonpartisan nonprofit which encourages Latino civic engagement,

exhort possible voters. They find most aren’t eligible to vote because they’ve not yet turned 18 or are recent immigrants who aren’t US citizens. Many others, though, simply aren’t interested. Texas is home to 10.2 million Hispanics, 19 percent of the country’s Latino population. Excluding noncitizens and those under 18, about 5 million Texas Hispanics will be eligible to vote in the 2016 presidential election, but less than half may register and fewer still are likely to cast ballots. Consider the 2014 midterm elections, when less than 2.3 million Texas Hispanics reported in US. Census surveys that they were registered to vote—about 46 percent of the nearly 4.9 million that were eligible and about 300,000 fewer than reported being registered in 2012. Turnout in 2014 was worse than 2012: 22 percent of eligible Texas Hispanics voted compared

to 39 percent. Nationwide, 48 percent of Hispanics reported voting in 2012, which declined to 27 percent in 2014. That untapped electorate helps explain how, even though a majority of the state’s residents will be Hispanic by around 2030, Texas has grown increasingly conservative. No Democrat has won statewide office here since 1994, the country’s longest political losing streak. S o m e H i s p a n i c s s u p p o r t Te x a s conservative causes, such as religious values and opposing abortion, but overall, Latinos statewide still lean strongly Democratic, as do their counterparts elsewhere. Higher Latino turnout won’t turn this red state blue in November’s presidential election, but given how much the Hispanic population is booming, even small improvements could make a big difference in the future. The trick will be pulling that off. “We should know that demography

is not destiny,” said Henry Munoz III, a longtime San Antonio community organizer who now serves as the Democratic Party’s national finance committee chairman. Hispanic voting habits are like church attendance, said Mario Salinas, Mi Familia Vota’s deputy Texas director. “If you grow up in a house where mom and dad go to church, you’ll go too as an adult. If they don’t, you probably won’t,” Salinas said. “If parents don’t vote, the kids won’t.” Texas ranks near the bottom nationally in total voter turnout, due in part to a heavily under-30 population, which tends to vote less than elder counterparts. Count Lesley Resendiz, a 20-yearold from Houston, among them. She is registered and said she knows how important it is for Hispanics to embrace voting, but that her work schedule kept her from doing so in the March primary. AP

Erika Jaramillo (center) and others hold signs supporting Democratic presidential candidate Hillary Clinton during a Democratic National Convention watch party in San Antonio on July 26. In Texas, where 39 percent of the population is Hispanic, Democrats have been shut out of statewide elections for decades. During 2014’s midterm elections, fewer than 2.3 million Texas Hispanics reported being registered to vote, or about 46 percent of the nearly 4.9 million who were eligible, according to US Census Bureau surveys. AP/Eric Gay

World

sMirror

www.businessmirror.com.ph | Tuesday, August 9, 2016

China’s imports, exports fell anew in July

EIJING—China’s exports fell again in July by an unexpectedly wide margin, while a decline in imports accelerated in a possible sign of weakness in the world’s secondlargest economy. Exports contracted 4.4 percent to $184.7 billion, a slight improvement over June’s 4.8-percent contraction, customs data showed on Monday. Imports fell 12.5 percent to $132.4 billion, accelerating from a decline of 8.4 percent. Weak global demand has hampered efforts to shore up Chinese trade and stave off job losses in export industries. The contraction in imports reflects possible weakness in the domestic economy, but the figures also are depressed by a decline in prices of oil and other commodities. Chinese economic growth held steady at 6.7 percent in the quarter ending in June, compared with a year earlier, though that was the lowest quarterly level since the aftermath of the 2008 global crisis. The declines in both exports and imports were worse than many forecasters expected. “The data dash hopes that a pick-up in global manufacturing growth last month might have buoyed shipments from China,” Julian Evans-Pritchard of Capital Economics said in a report. “The country’s export growth is likely to remain subdued for

4.4 percent The percentage of decline of Chinese exports in July some t ime,” Evans-Pr itc hard said. “While we think the worst is probably over for many emerging markets, global growth is likely to remain lackluster well into next year.” The slump in imports meant C h ina’s globa l t rade su r plus swelled by 22 percent from the same month a year ago to $52.3 billion. China’s trade surplus with the European Union, its biggest trading partner, was $11.8 billion. The surplus with the United States was $24.7 billion. Even taking lower prices into account, the Chinese figures suggest imports fell by 5.3 percent, according to Louis Kuijs of Oxford Economics. “It implies that volumes dropped substantially month on month,” Kuijs said in a report. “It may herald that domestic demand started to slow down in July.” AP

Container ships are docked at a port in Qingdao in eastern China’s Shandong province on Monday. Chinatopix via AP

China-Japan tensions rise Australian security key to Beijing investment around disputed isles

hina is stepping up pressure on Japan over disputed islands with hundreds of fishing boats and more than a dozen coast-guard vessels spotted in the area, encroaching at times on what Japan sees as its territorial waters. Japan hit back with formal complaints to China’s ambassador in Tokyo over the incursions in the East China Sea, while the Nikkei newspaper said officials also protested what Japan said was the installation of a militarygrade radar on a gas platform near the median line between the two nations in the area. The latest developments mark an escalation in a long-running dispute between Asia’s two largest economies over the uninhabited islands, and raise the risk of an unintended military clash. The friction also comes ahead of the September Group-of-20 summit in China, where there has been talk of a potential summit between President Xi Jinping and Prime Minister Shinzo Abe. Ties between the major trading partners suffered a sharp deterioration in 2012 when Japan bought three of the East China Sea islands from a private landlord, but tensions receded several years into Abe and Xi’s administrations. China had also been focused primarily on separate territorial disputes it has in the South China Sea. Still, military activity near the islands has again picked up, while a bilateral maritime and aerial communications system for the area, which has been under discussion for almost a decade, has yet to come into effect. Fourteen Chinese coastguard vessels were seen early on Monday in the contiguous area that lies just outside what Japan sees as its territorial waters surrounding the islands, which are known as Diaoyu in China and Senkaku in Japan. A Japanese coast guard spokesman, who asked not to be

identified, citing government policy, said this was a record. While large flotillas of Chinese fishing boats have been known to gather in the area at this time of year, they do not usually enter territorial waters, which are out of bounds to them under a fishing treaty, the spokesman said. The operations by Chinese coastguard vessels amounted to the biggest show of strength since 2013, when eight ships entered Japanadministered waters. “Japan will respond firmly and calmly, in accordance with international and domestic law,” Chief Cabinet Secretary Yoshihide Suga told reporters on Monday. “The coast guard is stepping up its presence in the area.” He said Japan would continue to urge China not to escalate tensions.

‘Strongly hope’

China is working to “properly manage the situation,” Foreign Ministry Spokesman Hua Chunying said in a statement on Saturday. “We strongly hope that the Japanese side will honor its principled agreement with us, deal with the current situation with a cool head, instead of taking actions that may raise tension or make things complicated.” The weekend’s events came after Japanese fighter jets scrambled a record 199 times against Chinese aircraft between April and June this year. A Chinese military ship was spotted in the contiguous zone in June for the first time, while China accused Japan of conducting a scramble in an unsafe manner. Abe and Chinese Premier Li Keqiang aired their differences at a meeting last month, including over the South China Sea. While Japan is not a claimant in that case it has pressed China to comply with an international court ruling that denied its claims. Japan has provided equipment and training to Southeast Asian nations in disputes with China. Bloomberg News

ANBER R A , Australia— Australia’s treasurer said on Monday that national security would be his overriding consideration when he makes a decision on whether to allow a Chinese consortium to lease a major Sydney electricity grid. Scott Morrison said he was close to making a decision on whether to allow Chinese state-owned State Grid Corp. and Hong Kong-registered Cheung Kong Infrastructure Group to buy a 99-year lease for half of the New South Wales state-owned electricity network Ausgrid for more than A$10 billion ($7.6 billion). “This is not an easy decision,” Morrison told Sydney Radio 2GB.

“Nationa l secur it y out ranks everything.” Chinese foreign investment, particularly from stateowned companies, has become increasingly contentious in Australia has China takes a more aggressive stance in territorial disputes in the SouthChina Sea. P r e s i d e nt B a r a c k O b a m a ra ised quest ions w it h Pr ime Minister Malcolm Turnbull last year, after Australia allowed a Chinese company, Landbridge to secure a 99-year lease over the strategically important Port of Darwin, which has become a US Marines training hub in norther n Aust ra l i a. Tu r nbu l l sa id Australian defense and security officials determined the A$506-

million deal did not threaten national interests. Senator Nick Xenophon, the leader of three senators whose support could be crucial to the government to pass legislation t h rou g h t he upper c h a mber when Parliament resumes this month, said the foreign investment decision-making process lacked transparency. “I don’t believe it is in the national interest for a state-owned enterprise to control one of our biggest power assets in this country,” Xenophon told Australian Broadcasting Corp. New South Wales state Premier Mike Baird is relying on the Ausgrid deal to fund major infrastructure projects.

Baird and Morrison are members of the state wing of the conservative Liberal Party. Opposition leader Bill Shorten said Morrison should not be swayed by Baird’s political needs in deciding on Ausgrid, which provides power to 1.7 million homes and businesses in Sydney and its surrounds. “What we don’t need is for the Liberal Party just to rush this through at they did with the Port of Darwin,” he told reporters. Morrison in May blocked a Chinese-led consortium from buying Australia’s largest private landholding, S. Kidman and Co. Ltd., saying the cattle empire was too big to be owned by foreigners. AP

Trump to propose moratorium on new financial regulations

onald Trump will propose a temporary moratorium on new financial regulations in an economic speech on Monday in Detroit in an effort to draw a stark contrast with the domestic policies of Hillary Clinton, who he says “punishes” the American economy. Trump’s speech will focus on providing regulatory relief for small businesses, according to senior campaign aides familiar with its contents. More broadly, the Republican presidential nominee will state that he will not propose any new financial regulations until the economy shows “significant growth,” the aides said. (Trump has previously said he would repeal and replace the 2010 DoddFrank Act.) Trump will also propose a repeal of the estate tax, also known as the “death tax.” Under current law, the 40-percent tax applies only to estates larger than $5.45 million for individuals and $10.9 million for couples. For US businesses, Trump will propose a tax rate of 15 percent and suggest strengthening intellectual property protections. He’ll also call for the elimination

of special tax treatment for carried-interest income at privateequity firms and other investment firms—the latter of which is a proposal his Democratic rival Hillary Clinton also supports. Carried interest, which is a portion of investment gains paid to certain investment managers, is currently taxed like capital gains—at rates that can be as low as 23.8 percent. Trump proposes to tax them as ordinary income, but for members of partnerships, that could actually mean a rate cut to 15 percent. Trump will continue to stress his opposition to the proposed Trans-Pacific Partnership trade agreement backed by the Obama administration and many prominent Republicans in Congress, and he will also reinforce his commitment to the coal industry. He will portray Obama’s regulatory policies as having crushed middle- and lower-class Americans and will propose making all child-care tax deductible. Clinton, in contrast, has proposed a cap on childcare costs at 10 percent of a family’s salary, aides said. Trump will take direct aim at

the Clintons and Obama, pointing to Detroit as an example of their failed economic policies. He will argue that their “record-breaking pace of new regulations, tax increases, restrictions on privateenergy production and one-sided trade deals” have hurt Detroit and other cities, according to a portion of the remarks shared with Bloomberg Politics. He will call Obama’s Clinton-backed reg u lations a “dead-weight on the economy, an anchor dragging us down.” And he will say that Americans “need to hit the pause buttons on these regulations so our businesses can reinvest in the economy.” “She’s the candidate of the past and ours is the campaign of the future,” Trump plans to say in the speech, according to the portion shared with Bloomberg. “Every policy that has failed Detroit has been fully supported by Hillary Clinton. The one common feature of every Hillary Clinton idea is that it punishes you from working and doing business in the United States.” His campaign aides noted that this is part of several economic speeches Trump will deliver this

summer. One will include the unveiling of an infrastructure spending plan, while another will focus on financial regulations, such as Dodd-Frank, the aides said.

Crunch time

For Trump, the challenge at this stage in the race is twofold: his campaign is coming off one of its worst weeks following a series of self-inflicted gaffes that led to a sharp dip in national and swing state polls. And it also comes as economic indicators suggest that the economy is improving. The nation’s unemployment rate in July was 4.9 percent—a sharp decline from a post-recession peak of 10 percent in October 2009, according to federal statistics. Clinton spent the week following the Democratic National Convention attacking Trump on the economy. “Donald Trump offers no real solutions for the economic challenges we face,” Clinton said at a campaign stop in Raleigh, North Carolina, last week. “He just continues to spout reckless ideas that will run up our debt and cause another economic crash.” Bloomberg News

The World BusinessMirror

Tuesday, August 9, 2016

www.businessmirror.com.ph

Syria victory to empower Assad, confound US, Putin says

OSCOW—Vladimir Putin may be on the cusp of a pivotal victory in Syria’s civil war that would make it much harder for the US to achieve its goal of ousting President Bashar al-Assad without a major military escalation. Assad’s troops, backed by Russian air power, are bearing down on rebels entrenched in Aleppo, Syria’s most populous city before fighting erupted in 2011. Reclaiming Syria’s commercial capital would give Assad control over all major population centers and cement his hold on land from Turkey to Jordan that makes up almost half of the country. “Russia will stick to its guns in Syria and show the whole world we are right,” said Frants Klintsevich, deputy head of the defense committee in the upper house of the Russian parliament. Driving the last rebel groups out of Aleppo within a few months is now “quite realistic,” he said. It’s been almost a year since Putin stunned the US and its allies by entering the conflict to battle Islamist militants and prop up an old ally, turning the tables on Western and regional powers intent on regime change. What started as a crackdown on peaceful protesters developed into a multifaceted proxy war that triggered Europe’s worst migrant crisis since World War II and facilitated the rise of Islamic State (IS). Opposition militias in Aleppo over the weekend managed to open a route out of besieged eastern neighborhoods where about a quarter of a million people live, but renewed strikes by government and Russian forces are preventing them from securing it, according to the Britain-based Syrian Observatory for Human Rights, which monitors the war through activists on the ground. The joint siege of Aleppo got an unexpected boost last month, when a failed coup in neighboring Turkey accelerated a rapprochement between President Recep Tayyip Erdogan and Putin, who called Turkey’s downing of a Russian fighter near the Syrian border last year a “stab in the back.” With authorities in Ankara accusing the US of complicity in the attempted coup and US and European Union officials condemning Erdogan’s resultant purge, the Turkish leader is turning to Putin to forge a new strategic partnership. The two leaders will meet in Saint Petersburg on Tuesday, a day after Putin holds talks with the president of Iran, Assad’s other major benefactor. Key to the Turkish detente for Putin is getting Erdogan to curtail the flow of arms and men to militias fighting his sworn enemy Assad, which he’s been doing since the failed coup, according to director Rami Abdurrahman of the observatory. Turkey has slowed weapons shipments from Arab countries for the Aleppo battle, while cutting its own flows significantly, he said. “The Syrian regime wouldn’t have been able to besiege Aleppo had it not been for the TurkishRussian rapprochement,” Abdurrahman said. “The military support is not what it used to be.” The capture of Aleppo, whose eastern neighborhoods have been held by rebels since 2012, would give Assad control of more than 40 percent of Syrian territory and 60 percent of the population, leaving IS with about 35 percent of the country, mostly desert, according to observatory estimates. The Kurds have about 15 percent of Syrian land, with the rest split between other groups. Robert Ford, a former US ambassador to Syria, said it’s now clear that Assad won’t be forced out, leaving the next president with few good options for dealing with a Kremlin-backed leader at the epicenter of Islamic extremism. Bloomberg News/AP

The police and soldiers from the Belgian Army secure an area in front of the Belgian Prime Minister’s office, prior to a media conference in Brussels on Sunday. A man attacked two police officers with a machete near the police headquarters in Charleroi, Belgium, on Saturday before being apprehended. AP/Virginia Mayo

IS claims Belgium machete attack

RUSSELS—The Islamic State (IS) group on Sunday claimed responsibility for a weekend machete attack that wounded two policewomen in the Belgian city of Charleroi, calling it an act of reprisal carried out by one of its “soldiers.”

Belgian prosecutors identified the machete-wielding assailant as a 33-year-old Algerian known to police for criminal offenses, but not for extremist acts. Belgian media reported that he was in the country illegally, despite two separate orders being issued for him to leave. The government didn’t immediately confirm the reports. The attack on Saturday afternoon is being treated as a terrorist incident, notably because the man shouted “Allahu akbar!”—Arabic for “God is great”—as he slashed at the officers outside Charleroi’s main police station, Prime Minister Charles Michel said.

The number of policewomen who were wounded by a machete-wielding attacker

The assailant, shot by a third officer, died later in a hospital. A statement by the IS-affiliated Aamaq News Agency, posted on Sunday on an IS-linked Twitter account, said the attack on the

policewomen was in response to the “Crusader coalition’s” military campaign against IS and its selfdeclared caliphate in Iraq and Syria. Belgium, a longtime US ally, is a member of the American-led coalition combating IS, and has supplied warplanes to participate in anti-IS operations. The Belgian Federal Prosecutor’s Office said the attacker, who it identified only as K.B., had lived in Belgium since 2012. “Since there are indications that the attack may have been inspired by a terrorist motive, the federal prosecutor’s office decided to take over the investigation from the district prosecutor’s office of Charleroi,” the federal office said in a statement. The office said two police searches were carried out overnight in the southern Belgian city, but that no further information about the investigation would be made public. Broadcast media, including state-owned RTBF, said K.B. was in Belgium illegally despite receiving two separate orders from government authorities to leave. Michel didn’t directly confirm the reports. But he told RTL television

that more must be done to combat illegal immigration, saying it was difficult to persuade Algeria to accept the return of its nationals. Both policewomen were “severely injured in the face and neck” in the attack, the federal prosecutors’ statement said. RTL said both were placed in an artificial coma to allow surgeons to operate on them. Michel said the prosecutors were treating the attack on the officers as a case of “attempted terrorist murder.” The prime minister spoke to reporters following an emergency meeting with top Belgian lawenforcement officials on Sunday morning. Michel cut short his vacation in the south of France following the Charleroi attack, which had some police unions clamoring for greater protection for police officers and installations. “We must keep a cool head,” Michel said. “We must avoid panic, of course—not give in to terror. That’s the trap that has been set for us.” Belgium has been on high alert since the March 22 suicide bombings claimed by IS extremists that killed 32 people in Brussels. Many of the perpetrators of the

November 13, 2015, carnage in Paris that killed 130 people were also residents of Belgium. That attack was also claimed by IS. “We know we must be constantly, constantly vigilant,” Michel said. D e f e n s e M i n i s t e r St e v e n Vandeput said the government’s Crisis Center would meet to determine if additional measures should be taken to protect police buildings and staff. On Sunday Charleroi police posted a request on their Twitter account asking reporters not to divulge officers’ identities. “We are targets,” Charleroi police explained. Prosecutors said K.B. was carrying a backpack at the time of the attack, but that a bomb-squad search found no explosives or other weapons inside. On June 27 Belgium deployed six F-16s to the Middle East for a year as part of the US-led coalition, with orders to strike Islamic State targets while operating in Syrian and Iraqi airspace, the Belgian Defense Ministry announced at the time. Until returning home in July 2015, Belgian F-16s took part in earlier anti-IS missions over Iraq. AP

Rising star defying Pakistan norms killed

HAH SADDERUDD, Pakistan—In this Punjab village where a family’s worth is tallied in the number of males it can produce, Muhammed Azeem was different. He valued his daughters as much as his sons. He raised the three girls to be independent young women. When one of them married, she refused to take her husband’s name. Another changed hers to Qandeel Baloch and became famous, shocking this conservative Islamic country with risqué videos that showed her in skin-tight clothing grinding against men. Azeem didn’t care. He loved Qandeel—whose new name meant “torch” in their native language. “I supported everything she did,” Azeem says. “I liked everything she did.” Her father’s love helped make Qandeel a role model to a generation of young Pakistani women. But it may have also planted the seeds of her destruction. Her you nger brot her Mu hammed Wazeem seethed. Villagers would constantly show him her Facebook posts and criticize his family for allowing her to make the videos. He decided he had to save the family’s “honor.” Last month he

drugged Qandeel and then, as their parents slept downstairs, strangled her. In most so-called honor killings, families close ranks around the killer. Not this time. “My son was wrong,” Azeem says. “I will not forgive him.”

Honor killings

This is the story of a girl from one of the poorest, most backward areas of Pakistan who emerged to transfix a nation—and then was killed for her role in its clash between tradition and modernity, between Islamic fundamentalism and secularism. Qandeel’s home village, Shah Saddaruddin, is a seven-hour drive from the capital, Islamabad, a journey through sugar-cane and mango fields, often on roads that are no more than dirt tracks. Most girls are hidden away once they reach puberty, and many are married shortly afterward to a boy chosen by their parents. In a country where 1,000 people die each year in honor killings, women are the main target. “Women here are strictly controlled,” Qandeel’s sister Munawar Azeem says. “It’s our tradition, but Qandeel was stubborn, she always wanted more, had different ideas.”

Weeping for her sister, she says their father loved his girls “too much.”

‘Spreading vulgarity’

Qandeel was always different, even when she was still a little girl named Fauzia. One day she saw her older brother practicing karate and judo. Every day after that, the 8-year-old could be found outside working on her martial arts moves. Her mother, Anwar Bibi, smiles at the thought of her daughter. “I don’t know why she was the way she was, but she never cared what anyone thought,” Bibi says. “She was always brave.” Fauzia told her mother she’d be famous one day. Her first public performance was in 2012 on Pakistan Idol. It was a disaster. Judges cringe as she sings, and afterward she sobs backstage. The video went viral. Her notoriety grew, and soon she was amassing millions of views for her YouTube videos—and thousands of thumbs-down. One user on her Facebook page wanted Qandeel ar rested for “spreading vulgarity.” One with a rudimentary grasp of English wrote, simply, “We hete you.” But she inspired many others.

One wrote: “You are strong like men,” and another said: “Fabulous style and confidence. U r such a superstar my QB.”

Short marriage

Qandeel’s transformation from fame-hungry celebrity to fledgling feminist may have its roots in her short marriage, one she said was marked by abuse. It seemed like a love match at first. Unlike many here, it wasn’t an arranged marriage. She fell for a family friend. As Ashiq Hussain, her ex-husband, tells it, Fauzia would pursue him, writing him letters. “Even sometimes she would use her own blood to write,” he says. “There was no Qandeel then. She was Fauzia.” She was obsessed with moving to the city, buying a house and wearing pretty clothes, he says. “Maybe in her heart,” he says, “she was already thinking of being a star.”

Praise

If any moment captures Pakistan’s clash of cultures, it is the selfie Qandeel took two months ago, during the holy month of R amadan. In it, she is almost sitting on the lap of Muslim cleric Maulvi Abdul Qavi in a Karachi

Social-media star Qandeel Baloch takes a selfie in this image posted online and released by her family. After escaping her childhood poverty and an abusive marriage to find online fame, she was killed by her brother in July 2016 for refusing to live a life dictated by repressive tribal and religious traditions. Qandeel Baloch family via AP

hotel room. She wears his pointed cap perched above her flaring eyeliner. Her mouth forms an exaggerated “O” of surprise. On a recent day, Qavi sits cross-legged on the floor of his office in Multan, the Punjab city where Qandeel was killed. One of the members of his entourage fans him in the 113-degree heat. When asked about a police investigation into his possible involvement in inciting violence against Qandeel, he struggles for composure. “The main thing is, it is condemnable,” he says of her killing. Not everyone has condemned the killing, however. “A girl who decides to publish her naked pics for sake of publicity...what her brother is sppose to do?” one tweet said. AP

The World BusinessMirror

www.businessmirror.com.ph

Camp focused on Mideast shifts aim to divided US

briefs

Gunmen abduct American, Australian in Kabul–official

TISFIELD, Maine—The nation’s divide has become bad enough that a camp created to help Arab and Israeli teens find common ground is putting an emphasis on hatred and violence in the United States. Officials at Seeds of Peace, a lakeside camp in the woods of Maine, thought things were bad when they made their decision to hold the special pilot program. Then came racial discord over police shootings and divisive political rhetoric. “People are coming to the realization that this stuff doesn’t just happen all over the other side of the world. It’s happening here,” 17-year-old camper Matt Suslovic of Portland said. Executive Director Leslie Lewin said the goal is to tackle deep-seated racism, antirefugee and antiMuslim sentiment, socioeconomic issues, gender discrimination and lesbian, gay, bisexual and transgender issues through the sharing of personal stories and discussion. That sounds like a tall order. But camp officials say their formula of dialogue has worked since 1993, when Seeds of Peace first brought together Israeli and Palestinian teens. T he 67-acre ca mp has e xpanded its reach over the years, bringing in teenagers from other trouble spots, such as Afghanistan, India, Bosnia and Pakistan. The special session that began last week features teens from all religious, racial and ethnic backgrounds from Los Angeles, New York and Chicago. Also participating are teens from Maine and Syracuse, New York, who’ve been coming to the camp for years. The formula is the same: Each day, campers spend 110 minutes in dialogue sessions, where they share their stories, listen to fellow campers and try to understand each other. In their free time, they share in traditional summer camp activities, like boating, swimming, games, drama, art and music. Tim Wilson, who’s been with Seeds of Peace since the beginning, encourages campers to bite their tongues and listen to what others have to say. “My father told me, ‘God gave you two ears and one mouth for a reason,’” he said in an oft-repeated phrase at camp. It can be a bit disorienting at first. The lush greenery and cool lake is just as foreign to big-city teenagers as it is for teenagers coming from the 120-degree heat of a Middle Eastern summer. Kejuan Smith, 15, of Chicago, found himself plucked from his dangerous neighborhood and plopped in the woods where he was serenaded by coyotes on his first night. Most teens leave feeling empowered—and wanting to return. Salat Ali, whose parents are Somalian, said he quickly learned upon his arrival in Syracuse from a refugee camp at age 11 that things weren’t going to be perfect. He lived in a poor neighborhood, and others constantly picked fights with him. But he found his voice at Seeds of Peace, and he’s returned as a counselor. “I used to feel like I was by myself. Now people have my back. This is my renaissance,” said Ali, now 22 and attending college. “This is exactly the feeling I was looking for. These are the friends I wanted. These people make me feel like my family.” Trang Ng uyen, 15, a lso of Syracuse, said she remains optimistic despite episodes of hatred and the divisive rhetoric of the presidential campaign. “If it can happen here on a small scale, then it’s possible on a larger scale,” she said. “There are a lot of messed up things, but it can change. This is living proof.” AP

Thursday, August 9, 2016

Rogelio Yerena in Bogota, Colombia, is helping collect medicine at his restaurant, Budare’s, to send to Venezuela on August 2. Private donations have become critical to Venezuelans who can’t find medicine amid the country’s grinding economic crisis. Jim Wyss/Miami Herald/TNS

Venezuela’s health crisis gives rise to drug donations

OGOTA, Colombia—Ten to 15 times a week, Jorge repackages a stash of bottles and pills and then sends a message to his network of couriers. There’s always someone willing to carry the package to Venezuela tucked into their luggage.

There’s nothing illegal about this trafficking operation—it’s prescription medicine on its way to people who desperately need it. But in Venezuela, where such acts of kindness are often seen as a political statement, Jorge wants to remain anonymous. “It’s simple,” he said of the secrecy. “If you use my name, the government might accuse me of being a smuggler or a bachaquero”—the price-gougers who are often targeted by the government. “Everything I say can be used against me.” It’s no secret that Venezuela lacks just about everything. But the shortage of life-saving drugs, even over-the-counter medicine, is, perhaps, the most heartbreaking. Venezuelans are increasingly dependent on loose networks of people who live abroad, like Jorge, to stay alive. The Pharmaceutical Federation of Venezuela, an industry group, says more than 85 percent of all drugs are either impossible or difficult to find in the country. While there’s no way to know how many people have died because of a lack of medicine, anecdotal evidence abounds. In June the family of Susana Duijm—an actress and model who won the Miss World pageant in 1955—took to Twitter and Instagram pleading for blood-pressure medication after she was hospitalized. She died. In March an 18-year-old girl died of a shellfish allergy after the

85 percent The percentage of drugs which the Pharmaceutical Federation of Venezuela says are either impossible or difficult to find in the country hospital she was taken to didn’t have epinephrine or oxygen. Infant mortality increase more than 100 percent between 2012 and 2015, often due to lack of basic medical supplies. “People here are dying from incredibly stupid ailments,” said Mildred Varela, 45, who has had breast cancer since 2014. For those in need of hard-to-find oncology medicine, stakes are high. A f ter Va re l a f i n i shed her c hemot herapy a nd rad i at ion treatment last year, she was prescribed letrozole, an inhibitor used to reduce the risk of relapse. But she couldn’t find the medication for three months. Since then, Varela and 66 other cancer survivors have formed Aconvida, a network that helps its members find medicine either in Venezuela or abroad. The medicine that has been hand-carried from places, like Miami, Madrid and Bogota, has been a literal lifesaver, she said. “It’s not always the quantity we need and it doesn’t come in

with the frequency we need it, but it helps,” she said. The daily pressure of finding medicine is particularly cruel for cancer survivors, who are told to avoid stress during recovery, Varela said. “How are we supposed to be relaxed in a situation like this? My level of frustration is so high just looking for medicine all the time,” she said. “I feel like I’ve been thrown in the ocean with a stone around my neck.” The government blames the shortages on such things as “economic warfare” waged by its enemies, and Colombian smugglers. Health Minister Luisana Melo said this year the problem was that Venezuelans took too much medicine and she asked her countrymen be more “rational” in their health care. To complicate matters, Venezuela is refusing offers of help, even as the United Nations last month urged Caracas to “consider accepting humanitarian aid.” The attitude is perplexing. During the height of its oil boom, Venezuela was one of the region’s most generous countries, sending subsidized oil to its allies and providing billions of dollars in in aid and investment to troubled countries in the region. “The government of Venezuela will not accept that it has a problem,” said Freddy Ceballos, the president of the Pharmaceutical Federation of Venezuela, which represents the industry. R ather than admit that its socialist system is to blame, Venezuela insists that corrupt distributors and shadowy forces are causing the shortages. Ceba l los said a combination of draconian price and currency controls have destroyed the industr y. The government owes Ve n e z u e l a’s p h a r m a c e ut i c a l sector $5 billion, he said. And without that money, local labs haven’t been able to pay their international suppliers. W hile

Venezuela has 22 pharmaceutical plants, it has to import most of its raw materials, so hard currency is critical. Hit by falling oil revenue, Venezuela has been forced to reduce its imports. And in a country that produces little else but crude oil, those cuts are reflected in empty shelves and growing hunger and discontent. Even so, the situation in Venezuela is hard to comprehend, Ceballos said. “No other petroleum-exporting country has hungry people on the street or is denying their people medicine,” he said. The pharmaceutical sector has been in negotiations since January. And while the administration occasionally releases money, it’s not enough to cover debts or reopen supply lines. “What we need is a change in attitude,” Ceballos said. “Health can’t wait and every day people are dying.” It’s that sense of urgency that’s leading people to take the risks of being drug couriers. While it’s not illegal to carry medicine for a specific person, carrying the medicine in bulk—without the approval of Venezuelan authorities—can be problematic. Travelers have reported having suitcases full of medicine confiscated at the airport. Since last year, the Association of Venezuelans in Colombia has sent more than a ton of donated medicine across the border. Often it goes in dribs and drabs in luggage, but they recently sent 34 boxes packed with medicine. How they got it into Venezuela, which sealed its land-border with Colombia a year ago, they won’t say. “Because Venezuela denies that it needs anything, there’s always the fear that it could be confiscated,” said the organization’s president, Daniel Pages. “The reality is they need everything from gauze to aspirin to things that are more complicated, like cancer drugs.” TNS

KABUL, Afghanistan—Five gunmen wearing Afghan military uniforms have abducted an American and an Australian in the Afghan capital, Kabul, a security official said on Monday. Sediq Sediqqi, spokesman for the Afghan Interior Ministry, said the two foreigners were taken from their sportutility vehicle while driving on Sunday night on a main road near the American University of Afghanistan. They are believed to be employees of the university, he said. Sediqqi added that initial reports show that up to five armed men stopped the foreigners’ vehicle and carried out the kidnapping. AP

39 killed by mudslides in Mexico

MEXICO CITY—Mountain communities in two Mexican states are recovering from weekend mudslides that killed 39 people during heavy rains brought by remnants of Hurricane Earl. On the other side of Mexico, authorities prepared as newly formed Tropical Storm Javier churned over the Pacific toward the resortdotted southern end of the Baja California Peninsula. Forecasters said it would close in on that area early on Tuesday as a hurricane. At least 28 people died in multiple mudslides in the mountainous north of Puebla state, National Civil Protection Coordinator Luis Felipe Puente said on Sunday in an interview with ForoTV. He said 25 were killed in different parts of the township of Huauchinango and three died in Tlaola. AP

No more ‘Pokémon Go’ at Hiroshima nuke bomb memorial

TOKYO—It was a bit touch and go for Hiroshima officials, but the atomic bomb memorial park in the western Japanese city is now Pokemon “No.” The city had asked the developer of the popular “Pokemon Go” smartphone game to remove the creatures and sites that appeared in the park by last weekend, when a solemn annual ceremony was held to mark the anniversary of the atomic bombing that killed 140,000 people in the final days of World War II. The “Pokestops” and gyms, and the clumps of players that they attract, were gone by last Thursday, but the monsters that gamers try to catch were still popping up. The city sent an e-mail inquiry to game developer Niantic, and got a response at 1:56 a.m. on Saturday, just six hours before the start of the ceremony. “We were so relieved,” city official Tatsuya Sumida said. “We were worried if those ‘Pokémon’ were really going to go away in time.” AP

Bombing at Pakistan’s Quetta hospital kills 42 Q

UET TA , Pa k istan—A power f u l bomb went off on the grounds of a gover nment-r un hospita l in t he southwester n Pak istani cit y of Quetta on Monday, k il ling at least 42 people and wounding dozens, the police said. The blast took place shortly after the body of a prominent lawyer killed in a shooting attack earlier in the day was brought to the hospital, said Senior Police Official Zahoor Ahmed Afridi, though it was unclear if the two

events were in any way connected. Nearly 100 lawyers and other people had gathered there at the time, he added. No one immediately claimed responsibility for the blast, which struck at the gates of the building housing the emergency ward, on the hospital grounds. Earlier, the police had mistakenly said the bomb struck the hospital’s main gate. Sanaullah Zehri, the chief minister in the Baluchistan province, said it seemed to be a suicide attack, but the police were

still investigating. Sarfraz Bugti, the provincial interior minister, denounced the attack as an “act of terrorism.” A Pakistani news channel reported that one of its cameramen was also killed in the blast. It was also unknown who was behind the killing of lawyer Bilal Kasi, who was gunned down on his way to court earlier in the day. Local TV stations broadcast footage showing people running in panic around the hospital grounds. Afridi said most of the

dead were lawyers who had gathered after Kasi’s body was brought to the hospital. Prime Minister Nawaz Sharif strongly condemned the blast in Quetta and expressed his “deep grief and anguish over the loss of precious human lives” in the attack, in which several senior lawyers were also killed. “No one will be allowed to disturb the peace in the province that has been restored, thanks to the countless sacrifices by the security forces, the police

and the people of Baluchistan,” he said in a statement. Sharif asked the local authorities to maintain utmost vigilance and beef up security in Quetta. He also instructed health officials to provide the best treatment possible to those wounded in the attack. Baluchistan has long been hit by insurgenc y. There are several ethnic Baluch separatist groups operating in the resource-rich province, but alQaeda and other militant groups also have a presence there. AP

A10 Tuesday, August 9, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Press and media: Your last defense

uring the last months we have, at times, expressed some apprehension and disappointment with the local press and media. As part of the ALC Group of Companies along with Philippines Graphic magazine, CNN Philippines, and radio station DWIZ, we want only the best for the industry.

Certainly, members of the press and media can be corrupt. News and commentary can be slanted with not-so-hidden agendas. Trying to make some money can sometimes take priority over fulfilling an obligation to the “public trust”. Irish statesman Edmund Burke called the press the “Fourth Estate” in 1841, when the British House of Commons first allowed the press to cover and report the legislative proceedings. The three traditional “estates” were the church, the nobility or government and the common citizens. Thomas Carlyle, a Scottish writer and historian, said the Fourth Estate was more important than the three, as it served as the eyes and ears of the nation and held the others accountable. It is the press and media that come under the most scrutiny. It can be the voice of the people and the voice of the government. While the church has strong influence in Philippine society, that estate has also come to include business interests. The press and media can reflect the priorities of business to both the people and the government and, at the same time, discuss the failures of “big business”. However, the most important role of the press and media is to be the “canary in the coal mine” against government abuse of power. The little bird dies first if the air in the coal mine becomes poisonous. The press and media are the first to be attacked and to go down if and when the government and its leaders want greater power. Understand that the power-grab is nearly always legal and justified. Of course, the government really does not care what the people think. “Legal and justified” is only for their counterparts in other countries. It can be “martial law during an emergency”, to counter “national security threats”, or a response to an “attack on government”. It does not matter; it is all the same. The United States government allegedly hacked the computer of CBS News correspondent Sharyl Attkisson, who was writing stories critical of the government about its relations with the Mexican drug cartels and the terror attacks in Libya. But the most recent example is Turkish President Tayyip Recep Erdogan’s assault on press freedom, as he has closed three news agencies, 45 daily newspapers, 23 radio stations and 16 television channels. This is in addition to issuing detainment of 47 journalists. You may criticize the press and media, and you should when we deserve it. You can ignore us when we need your help, as with the extrajudicial killing of journalists. But, remember, the free press and media stand as the final tripwire when the government is coming after you. If the press and media ever lose the freedom to openly discuss and disagree with government, it is guaranteed yours will be taken away next.

Lopez and the MSMEs Manny B. Villar

THE Entrepreneur

he Department of Trade and Industry (DTI) is proposing a budget of more than P6 billion for 2017, almost double its P3.7-billion funding for this year. The reason: to speed up the development of the micro, small and medium enterprises (MSMEs) in the country.

Since 2005

BusinessMirror A broader look at today’s business ✝ Ambassador Antonio L. Cabangon Chua Founder

Publisher Editor in Chief Managing Editor Associate Editor News Editor City & Assignments Editor Senior Editors

T. Anthony C. Cabangon Jun B. Vallecera Max V. de Leon Jennifer A. Ng Dionisio L. Pelayo Vittorio V. Vitug Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos

Online Editor Social Media Editor

Ruben M. Cruz Jr. Angel R. Calso

Creative Director Chief Photographer

Eduardo A. Davad Nonilon G. Reyes

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

Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Frederick M. Alegre Marvin Nisperos Estigoy Aldwin Maralit Tolosa Dante S. Castro

The reason behind the higher budget proposal reflects the new DTI leadership’s thrust, which is why I happily welcome the appointment of Ramon M. Lopez as secretary of trade and industry. His thrust, as well as his advocacy, coincides with my own longtime advocacy, both when I was in politics and when I was in business—to promote entrepreneurship. Lopez brings a lot of experience that will be valuable in his job. Until his appointment to the Duterte Cabinet, he had been executive director of Go Negosyo for 11 years, during which he was among the leaders in developing enterprise culture among Filipinos. He has a bachelor’s degree in Economics from the University of the Philippines and a master’s degree

Failed predictions John Mangun

BusinessMirror is published daily by the Philippine Business Daily Mirror

HOM

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

www.businessmirror.com.ph

regional offices n DXQR -93dot5 HOME RADIO CAGAYAN DE ORO E-MAIL ADDRESS: homecdo@yahoo.com ADDRESS: Archbishop Hayes corner Velez Street, Cagayan de Oro City CONTACT NOs.: (088) 227-2104/ 857-9350/ 0922-811-3997 n DYQC -106dot7 HOME RADIO CEBU E-MAIL ADDRESS: homecebu@yahoo.com ADDRESS: Ground Floor, Fortune Life Building, Jones Avenue, Cebu City CONTACT NOs.: (032) 253-2973/ 234-4252/ 416-1067/ 0922-811-3994 n DWQT -89dot3 HOME RADIO DAGUPAN E-MAIL ADDRESS: homeradiodagupan@ yahoo.com ADDRESS: 4th Floor, Orchids Hotel Building,

Rizal Street, Dagupan City CONTACT NOs.: (075) 522-8209/ 515-4663/ 0922-811-4001 n DXQM – 98dot7 HOME RADIO DAVAO E-MAIL ADDRESS: home98dot7@gmail.com ADDRESS: 4D 3rd Floor, ATU Plaza, Duterte Street, Davao City CONTACT NOs.: (082) 222-2337/ 221-7537/ 0922-811-3996 n DXQS -98dot3 HOME RADIO GENERAL SANTOS E-MAIL ADDRESS: homegensan@yahoo.com ADDRESS: 2nd Floor, Penamante Clinic Tiongson Street, General Santos City CONTACT NO.: 0922-811-3998 n DYQN -89dot5 HOME RADIO ILOILO E-MAIL ADDRESS: homeiloilo@yahoo.com

ADDRESS: 3rd Floor, Eternal Plans Building, Ortiz Street, Iloilo City CONTACT NOs.: (033) 337-2698/ 508-8102/ 0922-811-3995 n DWQA -92dot3 HOME RADIO LEGAZPI E-MAIL ADDRESS: homeradiolegazpi@ yahoo.com ADDRESS: 4th Floor, Fortune Building, Rizal Street, Brgy. Pigcale, Legazpi City CONTACT NOs.: (052) 480-4858/ 820-6880/ 0922-811-3992 n DWQJ -95dot1 HOME RADIO NAGA E-MAIL ADDRESS: homenaga@yahoo.com ADDRESS: Eternal Garden Compound, Balatas Road, Naga City CONTACT NOs.: (054) 473-3818/ 811-2951/ 0922-811-3993

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

in Development Economics from Williams College in Massachusetts, United States. His previous stint with the government (National Economic and Development Authority and DTI) and the private sector added to his wealth of experience in development planning in the field of trade and industry. With our persistent problems of poverty and unemployment, I believe putting the micro, small and medium-sized enterprises (MSMEs) at the fore of the DTI’s program of action for the next six years could not have come at a better time. Statistics from the DTI show why MSMEs deserve high priority if the government wants to make a significant impact in creating jobs and

OUTSIDE THE BOX

here is something in our human DNA that makes thinking about the future absolutely necessary. Granted, ancient and not-so-ancient agricultural societies had to know about the timing of the seasonal changes to survive. But every culture had some sort of shaman who was tasked with divining the future. The ancient Greek priestesses at the Oracle of Delphi may be the most famous for predicting the future by inhaling the vapors of the decomposing body of the earth-dragon. However, nothing can match the modern forecasters of the financial and hard asset markets when it comes to quantity, if not quality. The high priestess at Delphi was an older woman of blameless character. Now our financial priests and priestesses are the ones with the most computing power running the latest software and dubious character may be an advantage. We may or may not take these

predictions seriously, but we really like looking back at them in perfect hindsight. It is like watching an automobile race. We go for the speed, action and skill. But if there is going to be a world-class accident, it would sure be great to have been at the race on that particular day. Undoubtedly, there is someone out there with a long list of my market predictions over the past 20 years, ready to reveal the ramblings of a rather ordinary man who tries to be the Wizard of Oz. But the value in looking back at failed market predictions is to learn from the errors,

In terms of employment generation, MSMEs generated more than 4.89 million jobs in 2014, compared with 2.897 million generated by large enterprises. This means MSMEs contributed almost 62.8 percent of the total jobs generated by all types of businesses in that year. MSMEs also play a significant role in foreign trade, accounting for 25 percent of the country’s total revenues from exports. reducing poverty. In 2014 a total of 946,988 business establishments were in the Philippines. Of these, 99.6 percent (942,925) are MSMEs and only 0.4 percent (4,063) are large enterprises. In terms of employment generation, MSMEs generated more than 4.89 million jobs in 2014, compared with 2.897 million generated by large enterprises. This means MSMEs contributed almost 62.8 percent of the total jobs generated by all types of businesses in that year. MSMEs also play a significant role in foreign trade, accounting for 25 percent of the country’s total revenues from exports. The DTI estimates that 60 percent of all exporters belong to the MSME category. Many small businesses contribute to exports through their

Undoubtedly, there is someone out there with a long list of my market predictions over the past 20 years, ready to reveal the ramblings of a rather ordinary man who tries to be the Wizard of Oz. But the value in looking back at failed market predictions is to learn from the errors, offering valuable lessons. offering valuable lessons. In 1999 James K. Glassman wrote a book titled Dow 36,000. In the introduction he writes, “Stocks at the dawn of the twenty-first century: They are cheap. Stocks are now in the midst of a one-time-only rise.” Understand this man is not some “stock-flogger” like me. After attending the most exclusive and private school—Sidwell Friends School—in Washington, D.C., he is a cum laude graduate from Harvard. During that time, he was a fixture in the economic and political press and media. In 2011 he wrote that he was wrong because “stocks at the time seemed undervalued.” This gives me some satisfaction in that I stead-

subcontracting arrangement with large companies or as suppliers to exporting firms. Clearly, the appointment of Lopez as DTI secretary is really good. He is not only directly active in MSMEs; he is also very hardworking. He is passionate in his participation in MSME development, and has a hands-on management style. Thus, his move to the government means he would just be continuing what he has been doing in the private sector, something like a seamless transition. He knows exactly what to do. I mentioned at the beginning of this piece that Lopez and I share the same advocacy—promoting entrepreneurship. I am proud to be a very successful product of entrepreneurship, and I have been trying to share my experience with all Filipinos who want to put up their own businesses and become employers rather than employees. Developing the enterprise culture means changing the Philippines from a nation of employees to a nation of entrepreneurs. That has been my life-long dream. With Secretary Lopez at the helm of the DTI, I believe we have a chance at getting closer to that dream. For comments, e-mail mbv.secretariat@gmail. com or visit www.mannyvillar.com.ph.

fastly believe that “undervalued and over-valued” are relative terms that mean nothing for future performance. If a stock is considered undervalued or overvalued, we expect to see the price move to bring the valuation in balance. Sounds good in theory; reality is a cruel mistress. Further, Glassman wrote, “What happened? The world changed.” Well, that explains it all. Robert Zuccaro was a hugely successful investment manager and certified financial analyst who wrote an equally successful book in 2001, titled Dow 30,000 by 2008: Why It’s Different This Time. His target year of 2008 is so ironic; it probably destroyed an entire galaxy in an alternate universe. He grudgingly admitted his timing was off. What can we learn from this? Rule No. 1: never listen to anyone who thinks that any trend can continue forever. The trend is your friend, but is not your “until death do us part” spouse.

E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Changed conditions Charter change require a new Constitution Ernesto M. Hilario

ABOUT TOWN

as the 1987 Constitution outlived its relevance amid sweeping changes in our country in the last three decades? In 1973 when we changed the 1935 Constitution, there were only 39 million Filipinos. In 1987—or in a span of 14 years—our population had grown to 58 million. In 2016 we have grown further to 104 million, or an increase of 46 million. So why shouldn’t we now adopt measures and implement policies and programs that will respond to the needs and problems of 104 million people by changing the fundamental law?

A Constitution, after all, should not

be cast in stone. It should be a living document that reflects changes in society. It should be amended or revised if it is no longer consistent with our requirements as a nation. Here, it might be instructive to quote what Thomas Jefferson, the third American president and chief drafter of their Declaration of Independence, once said: “Some men look at constitutions with sanctimonious reverence and deem them like the ark of the covenant, too sacred to be touched. They ascribe to the men of the preceding age a wisdom more than human, and suppose what they did to be beyond amendment. Laws and institutions must go hand-in-hand with the progress of the human mind…as more discoveries are made, new truths disclosed, and manners and opinions change with the change of circumstances, institutions must advance also, and keep pace with the times. Each generation has the right to choose for itself the form of government it believes the most promotive of its own happiness.” The 1987 Constitution is not perfect by any means. First, it is too protectionist in the era of globalization as it restricts foreign ownership in the economy to only 40 percent. If we allow foreigners to fully own businesses in the country, then, perhaps, we can attract more investors and create more jobs for a rapidly growing labor force, the inevitable result of a rapidly growing population. Our neighbors in Asean are the ones cornering foreign investments because of our restrictive economic policy. Second, it perpetuates political dynasties. It has this provision that the state shall guarantee equal access to opportunities for public service and prohibit political dynasties as may be defined by law. But what’s wrong with this? It leaves the solution of the problem to the very people it seeks to leave out of the political landscape. The fact is that many politicians want to stay in power for as long as they can, and simply let their spouses, children or other relatives take over once their term expires. That’s the reason no antidynasty bill has been passed by Congress in nearly 30 years. And third, the 1987 Constitution, in effect, also breeds and tolerates corruption. How? There’s this provision that says the state adopts a policy of full public disclosure of all government transactions involving public interest. But wait. The framers of the 1987 Constitution again left it to the discretion of politicians in Congress to pass

an enabling law that would guarantee freedom of information. That’s another glaring flaw that those who do not want the 1987 Constitution to be revised seem to have overlooked. Would members of the legislature with something to hide vote to approve a bill that would expose their indiscretions or even illegal acts? Of course not. Wonder no more that we have been waiting in vain for the passage of the freedom of information all these years. We need to change the Constitution because, as House Speaker Pantaleon D. Alvarez has pointed out: “So many administrations have passed and the problem of poverty is still there. So many motherhood statements were made and this problem has not been addressed properly. Now, we believe that by shifting to a federal form of government, this would be a lasting solution to poverty.” What wrong with our present unitary system? Again, let’s hear from Alvarez: “Right now, all the provinces and regions are controlled by the central government. Now, by shifting to a federal form of government, the regions or states can manage their own economy, manage their own natural resources, create opportunities for their people.” In a federal setup, each state will be able to enact laws based on their own culture and traditions. They can have their own legislative body, their own justice system based on their own culture and traditions but adhere to the same Constitution and its basic principles. President Duterte is also a staunch advocate of federalism, as he believes that the economic development of the various regions can only be accelerated if they have greater autonomy and can attract more investments from here and abroad. And to allay fears that he intends to remain in power under a federal system, here’s what Mr. Duterte said recently: “I can leave anytime, you guys vote for someone else.” For Alvarez, the unitary system of government must go: “We have been into this for centuries, and look where we are now? Compared to our neighbors in Asia, we have been left behind. So for me, I would rather take that risk, because there’s hope there. In a unitary form of government, there’s no hope.” Alvarez wants Filipinos to support the Duterte administration’s determined bid to change the Constitution and shift to federalism as soon as possible, preferably through a constituent assembly: “It’s very seldom that we have a leader who is determined to really change the country. Let us do it now.”

E-mail: ernhil@yahoo.com.

Edgardo J. Angara

harter change (Cha-cha) is absolutely necessary for our country at this time. The 1986 Constitution was a stirring reaction to 20 years of authoritarian regime. A pluralistic politics and entitlement-laden citizenry in a new and revived democracy was established. As a result, we witnessed a proliferation of political parties and sectoral parties, grant of free high schooling, Magna Carta of Rights in favor of various sectors and other welfare measures. The Duterte administration has chosen Cha-cha as the centerpiece of its reform agenda. And that appears undoubtedly the call of the time. Amending the Constitution is a transcendental event. Hence, the country should employ its best—from bright young thinkers to wise old-timers—working long and thinking fulltime how to improve our future. Yet, the country doesn’t have the luxury of time

Bloomberg View

or a long time, there was a recurring stereotype about China’s economy: If growth started to slow significantly, the argument went, prudent technocrats in Beijing could always prop it up with fiscal stimulus and keep the country’s financial institutions afloat. Combined with optimistic official data about deficits, this argument sounded reassuring for a while. Yet now, reality is intervening harshly. China’s public finances are in worse shape than is commonly understood. And as debt levels rise and the economy remains sluggish, the government’s ability to boost growth looks increasingly

precarious. Without reform, that will have some grim consequences. According to the International Monetary Fund (IMF), China is expected to run a moderate budget deficit of 3 percent of GDP this year, with a manageable debt load equal to 46.8 percent of the economy, ranking it 100th out of 184 countries. On the surface, then, it appears well placed to manage any slowdown. But there’s more here than meets the eye. The headline number used by the IMF covers only central government debt, not that of provinces and municipalities. Since more than 80 percent of public spending in China comes from local governments, that’s an important omission. Assume those governments incurred the statutory maximum debt load last year—in

issues, such as foreign-investment limitations on key modern areas of the economy as telecommunications, mass media, transportation and energy, infrastructure and education. But beyond the limitations on foreign ownership, the root cause of the country’s economic malaise, in my opinion, is the overwhelming concentration of power in the Presidency. Our highly centralized government has to be reshaped. More power and control—which include funds—need to be transferred from so-called imperial Manila to the provinces. A federal system may be one solution. But it’s probably too abrupt and drastic a shift in an archipelagic country, with over 70 proud tongues. It’s going to be quite expensive, as well. Each state will have to establish its own school system, judiciary, a health department, police and several new layers of bureaucracy. Hence, a transitional arrangement is necessary: full devolution of authority from the center to the provinces while maintaining

a Presidency that can hold our islands together. Under the present Constitutional setup, the President is made effectively the Fiscal Czar. For instance, he is authorized to reallocate and spend any “savings” without congressional consent. If next year’s annual appropriation doesn’t get passed on time, the current year’s budget is considered reenacted for the succeeding year. That means the entire budget becomes “savings,” and a discretionary fund at the sole disposal of the President. That tremendous fiscal clout has created the opportunity for misuse of public funds—as demonstrated by the controversies over the pork barrel in 2013 and the Disbursement Acceleration Program of the following year. This fiscal black hole coupled with the lack of a programmatic party system are sample issues crying out for reform. These two together hinder and impede the nation’s progress and the prosperity of all Filipinos.

E-mail: angara.ed@gmail.com.

Rebellion and terrorism in this country is strangely compensable Cecilio T. Arillo

database

nknown to many people, the judgment handed down by an American court in 1995 in a class suit has strangely made rebellion and terrorism in this country compensable rather than punishable. “Such extreme stretching of democratic liberalism was used to claim human rights to groups that are mostly now considered globally as terrorist groups,” Dr. Galileo Kintanar, a national security expert, recalled in an interview with this writer. “Subversives and terrorists who were injured, slain or detained in the course of their lawless activities were able to press their claims for enormous amounts of compensation from a private estate rather than from government,” he lamented. “The implication of this is injustice itself. For one thing, the Republic could be heavily penalized for defending itself or its citizens against rebels or terrorists,” he said. For his part, the late retired Gen. Guillermo Pecache himself, a respected lawyer and also a national security expert, wrote on the subject of terrorism and human rights as president of the Asian Institute of Strategic Studies and of the Philippine Chapter of the Asia-Pacific League for Freedom and Democracy, thus: “ T hose who insist that no threat or danger can ever justify the curtailment of certain human rights, stand on a lofty cloud of idealism, yet would not hold themselves responsible for the deaths of

Why China can’t solve its debt problem By Christopher Balding

and people have high expectations. Consequently, the nation cannot be drawn needlessly into endless debate and self-destructive political bickering. The choice of the mode of changing it is critical. Constitutional convention or constitutional assembly? Whatever mode is finally chosen, the more fundamental choice, the game-changing issue, is the shift of the government. Of course, there are other big

Tuesday, August 9, 2016 A11

total, 16 trillion yuan—and you double total public borrowing, raising it by 47 percent of GDP. Yet, even that assumption is generous. An examination by China’s National Audit Office in 2013 found debt outstanding of 18 trillion yuan. In other words, debt already exceeded the 2015 statutory limit three years ago. And since then, local finances have only worsened. The IMF last year estimated a total fiscal deficit of 10 percent of GDP. Goldman Sachs recently put it at about 15 percent. Those are enormous figures: They suggest a total deficit level on a par with the US during the 2008 financial crisis—perhaps, worse. And yet, they still obscure the true amount. Local governments trying to evade debt limits often guarantee

The 1987 Constitution, crafted after President Corazon C. Aquino forcibly took over the presidency in the 1986 People Power revolt, made martial rule and the suspension of the privilege of the writ of habeas corpus virtual impossibilities and of limited potency, making their declaration by the president, as well as their duration, subject to the pleasures of Congress and/or of the Supreme Court.

and Republican state,’ as the 1987 Constitution phrases it, can develop the strength it needs to become competitive internationally and stable internally,” said Kintanar, articulating further “that what is needed to mold a stronger Republic from the national security viewpoint is a disciplined citizenry, responsible government and a fervor for national unity and patriotism.” Not saying that democracy does not figure in the equation, it must be pointed out that in the more than 30 years of democracy that have transpired since the 1986 Edsa uprising, the Republic has yet to enjoy a meaningful moment of strength. Always, the nation wallows in insecurity and instability, not knowing when fuel and power prices will rise again, or whether the current president will complete his or her term, or when the next coup d’état will come, or where terrorists, kidnappers and criminal syndicates might strike next, or which bank or preneed company will collapse soon or whether the government will make compromises in negotiating peace with rebels. Democracy has made the nation neither stronger nor more prosperous and in the final analysis, it has not even gainfully increased liberties and rights, except among dissidents and subversives. Indeed, the practice of democracy is not alien to Filipino temperament and the theory that Asians find greater security or comfort in despotism is hardly applicable to the country. This is so because in the Philippine setting, the practice of democracy has been long on freedom, rights and privileges and short on being responsible, dutiful and disciplined.

innocents. Their impassioned arguments only make it possible for terrorists and the lawless to move about freely and exploit human rights and liberties to violate those of others.” Terrorism is a clear, present and actual danger that compels many to contemplate whether human rights should have primacy over human lives, Pecache argued, adding that “for those who understand the true concept of democracy, moral confusion is not a problem since always the first and highest consideration would be the welfare of the majority, the national interest, public order and public safety much as legitimate demands of minorities and even of deviants are accommodated.” “It would be worthwhile to go back to that basic document, the Universal Declaration of Human Rights, a document that enumerates a long list of rights and people tend to overlook its concluding two Articles, without which the preceding rights would not be viable,” Pecache pointed out. “Although couched in diplomatic language, the Universal Declaration of Human Rights unequivocally affirms that terrorists have no human rights. It tells us that the enjoyment of human rights is subject to the democratic requirements of

public order and the general welfare,” he said. The 1987 Constitution, crafted after President Corazon C. Aquino forcibly took over the presidency in the 1986 People Power revolt, made martial rule and the suspension of the privilege of the writ of habeas corpus virtual impossibilities and of limited potency, making their declaration by the president, as well as their duration, subject to the pleasures of Congress and/or of the Supreme Court. Provisions of the Constitution also make the Republic prone to instability, particularly the shortened terms of office of public officials and limitations on successive uninterrupted terms. While the intention for these are noble, these have only induced dynasties, discontinuity of policies and excessive politicking at the expense of public service. The most glaring weakness of the current charter is less in its text rather than its nonimplementation. Of what use are the provisions on elections, impeachment and recall when presidents can be deposed anytime, and the resulting extraconstitutional succession or take-over ratified or legitimized in unorthodox ways or those inconsistent with laws? “Thus, it is a great wonder if the Philippines, which is ‘democratic

To reach the writer, e-mail cecilio.arillo@ gmail.com.

off-balance-sheet loans (explicitly or otherwise) and create state-owned enterprises to pursue projects on their behalf. Last year their liabilities grew so egregious that Beijing had to engineer a bailout by mandating a debt swap with state-owned banks. Furthermore, investors and ratings firms struggle to draw a clear distinction between government debt and private debt. It’s widely assumed in China that the government stands behind most debt owed by state-owned companies to strategic enterprises or other favored firms. And investors have tended to believe that the government will back most every major company or project. So far, they’ve been right: Despite rising defaults, the government hasn’t allowed any major firm

to collapse for fear of triggering a crisis. Yet, stresses are rising in China’s banking system, and with public debt a more serious problem than official figures let on—and still rising—the government is increasingly constrained. There are a number of steps Beijing could take to address this mess. Deleveraging should be first. Restrictions on what local governments can borrow simply encourage new and creative ways to hide their debt, which actually makes them more difficult to rein in. More effective—if less politically appealing—would be allowing zombie firms to collapse, slowing the rate of investment and accepting slower GDP growth. Instead, Beijing seems to be praying to the Keynesian multiplier,

hoping that, with yet more stimulus, it can grow its way out of its problems, much as it did a decade ago. But the post-2000 period was a unique one, as China joined the World Trade Organization, global growth pushed up export receipts and budgets magically righted themselves. The government must accept that history is unlikely to repeat itself. If it doesn’t, mounting bad debts, double-digit deficits and a rickety financial system are going to make for an increasingly volatile combination. Bearish investors predicting large-scale devaluations and bank crises understand the risks that have historically accompanied such profligacy. If China’s credit can’t expand forever, it must stop—either by choice or by force.

2nd Front Page BusinessMirror

A12

Tuesday, August 9, 2016

Lopez adds biodiversity to mining-audit criteria By Jonathan L. Mayuga

@jonlmayuga

O further tighten the screws on mining, Environment Secretary Regina Paz L. Lopez had ordered the conduct of biodiversity assessment in mining-affected areas, which will now form part of the ongoing mining-audit criteria. Aside from biodiversity experts, environmental groups would also be invited to join and take part in the mining audit under her watch. This is to ensure that the country’s rich biodiversity would be protected against irresponsible mining, Lopez told the the BusinessMirror on Sunday. “Biod iversit y is ou r t reasure. Businesses benefit from biodiversity,” Lopez said. Irresponsible mining operation threatens the country’s already vulnerable biodiversity, as they destroy surrounding environment. “I want to include civil-society organizations and environmental groups, like Conservation International, in the mining audit. Because biodiversity is our treasure,” she said. Officials of the Department of Env ironment and Natura l Resources (DENR) welcomed the move, saying it wil boost

government effort to promote responsible mining in the country. The current audit criteria includes social and environmental aspects of mining operation, as the DENR chief vowed to stop activities that cause environmental destruction and people in mining-affected communities to suffer. Mining would further undergo stricter regulatory measure with the additional audit criteria. Lopez earlier told the the BusinessMirror about her plan to integrate biodiversity in all aspect of mining regulation, particularly in the rehabilitation of mined-out areas, to highlight the importance of protecting the country’s rich flora and fauna. Biodiversity Management Bureau (BMB) Director Theresa Mundita S. Lim said with the BMB team taking part and biodiversity considerations being part of the audit criteria, along with environmental

and social considerations, the ongoing mining audit would be more comprehensive. Lopez issued a special order making the BMB officially part of the audit process, Lim said. Many highly mineralized areas are within protected areas (PAs), which are considered key biodiversity areas that serve as wildlife sanctuary to threatened species. As part of its task, the BMB will assess the impact of mining to the local biodiversity-affected areas, Lim said. “We will try to assess the most likely irreversible damages on biodiversity, which can be attributed to [the] mining operation. It will be a bit challenging because, in most areas, no baseline assessments were conducted prior the mining operation,” Lim said. “One of our approaches would be to also look at the bio-geographical history of the area and the remaining surrounding, intact patches of vegetation and the fauna assemblages, to paint a picture of what the ecosystems would have been like before the mining operation,” she added. This is the first time for the BMB to be involved in assessing mining’s impact. “I’ve been with the DENR for 15 years and this is the only time that an audit of all mining operations are

done with the DENR-BMB officially taking part in the audit,” Lim said. She added the inclusion of biodiversity consideration in the audit criteria will allow the government, through the BMB, to determine and recover some of the important biodiversity areas in the country that can otherwise be utilized for more environment-friendly and sustainable livelihoods. “It will help boost our efforts to promote biodiversity-friendly business and enterprises that can provide substantial benefits to the communities, in terms of not only tangible, but especially nontangible benefits that will eventually translate into a healthier and more productive population,” she said. Environment Senior Undersecretary Leo L. Jasareno, who is leading the DENR’s mining audit, told the BusinessMirror that the BMB would conduct a separate assessment on the effect of mining on biodiversity. “Biodiversity assessment is conducted if the mining project would affect biodiversity, especially if the mining area is near a protected area,” he said. “In mining, if a project is near a protected area, the BMB conducts biodiversity assessment,” he added. Biodiversity assessment, he said, would be important, especially if the mining tenement is near a declared PA.

Biodiversity is our treasure. Businesses benefit from biodiversity.”—Lopez

China’s $1.4-trillion Silk Road is bigger than the Marshall Plan C

hina’s ambition to revive an ancient trading route stretching from Asia to Europe could leave an economic legacy bigger than the Marshall Plan, or the European Union’s (EU) enlargement, according to a new analysis. Dubbed “One Belt, One Road,” the plan to build rail, highways and ports will embolden China’s soft-power status by spreading economic prosperity during a time of heightened political uncertainty in both the US and EU, according to Stephen L. Jen, the CEO at Eurizon SLJ Capital Ltd., who estimates a value of $1.4 trillion for the project. It will also boost trading links and help internationalize the yuan as banks open branches along the route, according to Jen. “This is a quintessential example of a geopolitical event that will likely be consequential for the global economy and the balance of political power in the long run,” said Jen, a former International Monetary Fund economist. Reaching from east to west, the Silk Road Economic Belt will extend to Europe through Central Asia and the Maritime Silk Road will link sea lanes to Southeast Asia, the Middle East and Africa. While China’s authorities aren’t calling their Silk Road a new Marshall Plan, that’s not stopping comparisons with the US effort to rebuild Western Europe after World War II. With the potential to touch on 64 countries, 4.4 billion people and around 40 percent of the global

economy, Jen estimates that the One Belt, One Road project will be 12 times bigger in absolute dollar terms than the Marshall Plan. China may spend as much as 9 percent of GDP—about double the US’s boost to postwar Europe in those terms. “The One Belt, One Road Project, in terms of its size, could be multiple times larger and more ambitious than the Marshall Plan or the European enlargement,” Jen said. It’s not all upside. Undertaking an expansive plan like this one will inevitably run the risk of corruption, project delays and local opposition. Chinese-backed projects have frequently run into trouble before, especially in Africa, and there’s no guarantee that potential recipient nations will put their hand up for the aid. In addition, resurrecting the trading route will need funding during a time of slowing growth and rising bad loans in the nation’s banks. Sending money abroad when it’s needed at home may not have an enduring appeal. Still, at least, China has a plan. “The fact that this is a 30- to 40-year plan is remarkable, as China is the only country with any long-term development plan, and this underscores the policy long termism in China, in contrast to the dominance of policy short termism in much of the West,” Jen said. And that’s a win-win for soft power. “The One Belt, One Road project could be a huge PR exercise that could win over government and public support in these countries,” he said. Bloomberg News

www.businessmirror.com.ph

PPA TO GOVT: DUTERTE ADMIN MUST HONOR PETROLEUM CONTRACTS By Lenie Lectura

@llectura

he Philippine Petroleum Association (PPA) is seeking an audience with Energy Secretary Alfonso G. Cusi to reiterate its position that petroleum contracts entered into with the government should be honored. “We have written the DOE [Department of Energy] secretary, pointing out how much we are concerned with some developments. There’s a possible instability of policy,” PPA Executive Director Benjamin Austria said in a news briefing. He said PPA sent the letter last month to Cusi. The DOE has yet to reply to PPA’s request. The PPA official was referring to the contradicting interpretation by the Commission on Audit (COA) of Presidential Decree 87, or the law that governs the contract between the government and the Malampaya gas project. Last year the COA overruled the petition of the Malampaya consortium that income tax was already imputed in the government’s 60-percent share in the Malampaya royalties. The tax, the consortium said, was deductible from the government’s share of the Malampaya earnings. The COA then ordered the DOE, which was then headed by Jericho Petilla, to collect the unpaid taxes from the consortium members, such as Shell Philippines Exploration BV (SPEX), which holds a 45-percent stake in the project; Chevron Malampaya Llc., with another 45 percent; and Philippine National Oil Co.-Exploration Corp. (PNOCEC), which holds the remaining 10 percent. In particular, the COA mandated the DOE to collect P53.14 billion in unpaid taxes from contractors of the Malampaya deepwater gas-to-power project. The COA said there is no provision in the law stating that the income tax of the contractors forms part of the share of the government. SPEX, the parent firm of Royal Dutch Shell Plc., has sought interna-

60%

The share of the government in Malampaya royalties tional arbitration of the COA ruling. “With this uncertainty, then it’s difficult to get investors,” said Austria, adding that PNOC-EC, a government firm, is “affected” by the COA ruling. “I am sure [PNOC-EC] is one with the consortium,” he added. The PPA, thus, urged the DOE to uphold the sanctity of government contracts, which is in line with President Duterte’s policy pronouncement during his inaugural speech. Austria pointed out that the Philippines is underexplored and there are vast potentials for gas and oil in many parts of the country. But the country will not be able to unlock the local petroleum reserves if the government will not be able to resolve major issues hounding the industry. “If you change the terms of the contract, exploration activities in the Philippines could go down. The number of wells drilled is very low compared to Asean neighbors. Instead of being able to develop indigenous energy resources, we have to look for other sources. It is better for us to develop our own resources for revenue and security,” Austria said. The PPA official said the country maybe vulnerable to supply disruption if it prolongs its dependence on imported fuel. Cusi said he welcomes the arbitration. He said he sees this as an opportunity for the national government to “effect real change” and to come up with definitive and clear-cut policies in dealing with partners. “A nationalistic approach is necessary to make a unified stand. This is in line with the Duterte administration’s vision of unity in our country,” Cusi said.

housing finance Joseph D. Gonzaga (from left), assistant vice president and head of Account Management Department; Sharon C. Carel, manager and account officer, SPS; Renato and Linda Tan, major stockholders of R.J. Lhinet Development Corp.; Mylene D. Leaño, account assistant; and Amerjaphil T. Tugade, assistant vice president of Trust Department. R.J. Lhinet Development Corp. has recently partnered with Citystate Savings Bank (CSB) and entered into an agreement for the former’s latest project—“Sanmara Subdivision”—located at Barangay Mulawin, Tanza, Cavite. R.J. Lhinet Development Corp. is a reputable pocket developer with 20 years of experience in subdivision and condominium development, catering to buyers looking for an affordable new home in a well-planned community. CSB is the banking arm of the ALC Group of Cos., founded by the late Ambassador Antonio L. Cabangon Chua. The conglomerate also includes the Fortune Insurance Group and the Eternal Group of Cos., among other firms. CSB is a proud member of BancNet and Philippine Deposit Insurance Corp., with maximum deposit insurance for every depositor of P500,000.