Businessmirror august 11, 2016

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Thursday, August 11, 2016 Vol. 11 No. 306

SENATORS MAKING SURE DUTERTE WILL NOT ABUSE EXTRA POWERS

Safeguards swamp emergency powers

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INSIDE

@butchfBM

enators on Monday started refining safeguards to ensure the grant of emergency powers—limited to three years—to the Duterte administration to solve the traffic crisis would not be abused.

21 and counting for phelps in rio

Sports

By Butch Fernandez

POE: “We also need to define the limitations of the extra powers.”

Appearing before senators tasked to scrutinize President Duterte’s proposed extra powers, Transport Secretary Arthur See “Emergency powers,” A2

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rio olympics medal tally

1 United States 2 China 3 Hungary 4 Australia 5 Russia 6 Italy 7 South Korea 8 Japan 9 France 10 Thailand 11 Great Britain 12 Germany 12 Sweden 14 Brazil 15 Chinese Taipei 16 Belgium 16 Greece 16 Netherlands 19 Argentina 19 Colombia 19 Croatia 19 Kosovo 19 Slovenia 19 Vietnam 25 Indonesia 25 New Zealand 25 North Korea 25 South Africa 29 Canada 30 Kazakhstan 31 Ukraine 32 Azerbaijan 32 Denmark 32 Malaysia 32 Mongolia 32 Philippines

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Dulay issues gag order on tax rules

By David Cagahastian

@davecaga

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nternal Revenue Commissioner Caesar R. Dulay has issued a gag order to all officials and employees of the Bureau of Internal Revenue (BIR) on matters relating to tax policies, unless approved for publication by him.

Dulay issued Revenue Memorandum Order 46-2016 ordering all BIR employees to refrain from publicizing all advisories, revenue decisions and policy statements that may affect the rights and remedies of taxpayers, unless approved for publication by the BIR commissioner.

He said the centralized dissemination of policy statements will allow taxpayers to “better avail [themselves] of the tax-assistance and tax-compliance services offered by the agency.”

“It is to the best interest of the BIR and the general public that taxpayers be informed of all tax and tax-related issues and developments in the BIR in a clear, correct and unmistakable manner, so that they can better avail [themselves] of the tax-assistance and tax-compliance services offered by the agency and enjoy to the fullest the opportunities available for the protection and enhancement of their rights,” the memo read.

“Strictly for this reason, all advisories, revenue actions/decisions and policy statements that substantially affect the basic rights and remedies of the taxpayer relative to the assessment and collection of taxes or put in issue the government’s exercise of its taxing powers and tax administration responsibilities shall not be posted on the BIR web site or released to the print and broadcast media without the prior approval of the commissioner,” it added.

Dulay is said to be on the lookout for a spokesman for the BIR, and appears to be particularly wary of pronouncements from his subordinates, which could be construed as policy statements of the BIR itself.

Last week the BusinessMirror ran a story wherein a deputy commissioner of the BIR was quoted as saying that the BIR’s Evaluation Board is agreeable to a compromise worth P1 billion from Sen. Emmanuel D. Pacquiao if he so offers as settlement for his P2.26-billion tax-deficiency assessment.

Under Dulay’s new memorandum, BIR officials and employees found to be in violation of the gag order shall be subject to “appropriate disciplinary action.”

WATCH YOUR COASTAL PROPERTIES AS RISE IN SEA LEVEL ACCELERATES Strong growth, hike in Pinoys’ C income to boost retail sector

Lawyer Paul Santos (left), Philippine Retailers Association (PRA) president; and Frederick Go (right), 23rd National Retail Conference Expo overall chairman and PRA vice chairman, present to Carlo Lopez Katigbak, ABS-CBN Corp. president and CEO, the plaque of appreciation for addressing the attendees to the conference, with the theme “Shifting Gears in Retail: Consumption in the Digital Age.” Nonie Reyes

Roderick Abad

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@rodrik_28 Contributor

he Philippine retail industry will continue to grow, but players were urged to integrate traditional retailing with technological advances to sustain the success of their business.

Frederick Go, overall chairman of the 2016 National Retail Conference and Expo (NCRE), said on Wednesday the increase in retail sales could be attributed to strong GDP growth and the improved buying power of Filipino consumers.

“I think everybody had a good July, [although] the month has just

PESO exchange rates n US 46.8890

passed. I believe everybody is enjoying a generally high ‘single-digit’ growth [in terms of retail sales],” Go told reporters on the sidelines of the opening ceremonies of the 23rd NCRE and Stores Asia Expo held at the SMX Convention Center in Pasay City.

“Basically, [the retail industry’s performance] is very good. I think the economy is doing great. There’s a lot of confidence, I think, with the new administration—the Duterte administration. So, I think, consumer spending is up,” added Go, who is also president of Robinsons Land Corp.

While online platforms of selling

or e-commerce is now thriving, he said “the traditional marketplace is still the dominant venue where people conduct their shopping.”

“I think everybody is trying to establish a digital platform to reach out to the customers.

But I’m sure that the majority of sales are still transacted in the traditional marketplace,” he said, referring to the brick-and-mortar or physical stores.

Go noted that different store formats are sprouting all over the country, which proves that the Philippine sector is enjoying robust growth.

Continued on A2

Limate scientists have long warned of a rise in sea level, as global warming melts the world’s glaciers. But while the level has been increasing at about 3.5 millimeters a year, the rate of increase itself has fluctuated, leading some people to doubt the warnings and the broader impact of rising carbon emissions.

Fresh evidence, in a study published in Scientific Reports, suggests the scientists were right, and that satellite measurements have been distorted by the eruption in 1991 of Mount PinatuTbo in the Philippines.

The volcanic eruption, the second largest of the 20th century, is estimated to have spewed almost 20 million tons of sulfur dioxide into the stratosphere, lowering global temperatures by about 1 degree Fahrenheit from 1991 to 1993, as gas and dust particles blocked solar radiation, and causing sea levels to drop. The researchers—from the National Center for Atmospheric Research

(NCAR), the University of Colorado at Boulder and Old Dominion University— used models to calculate the impact of the Pinatubo eruption, and found that sea levels fell about 6 millimeters.

The confusion lies in the timing.

The 6 mm drop took place right after satellite measurements of the sea level began in 1993, followed by a bounceback in the sea level. From today’s vantage, that makes it look like the rate of increase hasn’t risen over the past few decades. In fact, it makes it look as if it’s fallen. If you take the eruption out, the satellite surveillance would show a clear acceleration in the rate, the researchers conclude.

Pinatubo “doesn’t affect the overall trend between the two endpoints, but it does affect how you estimate the acceleration, because of the pattern of rise during that interval,” said NCAR scientist John Fasullo, who led the study.

See “Coastal Properties,” A2

n japan 0.4602 n UK 60.9791 n HK 6.0453 n CHINA 7.0403 n singapore 34.8980 n australia 35.9686 n EU 52.1499 n SAUDI arabia 12.5030

Source: BSP (10 August 2016 )

BMReports BusinessMirror

A2 Thursday, August 11, 2016

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ATM, CSOs join Lopez’s mining-audit teams

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By Jonathan L. Mayuga

@jonlmayuga

he Department of Environment and Natural Resources (DENR) has formally invited civil-society organizations (CSOs) including, antimining groups, to take part in the ongoing audit of mining operations in the Philippines.

The BusinessMirror learned that during the first audit, CSOs were not among the audit teams, prompting the DENR to conduct a second wave of audit, this time, ensuring that CSOs would be part of the process.

A memorandum signed by DENR Undersecretary for Field Operations Joselin Marcus E. Fragada, dated by August 8 to the DENR Mine Audit Team, ordered the participation of the CSOs in the audit process as promised by Environment Secretary Regina Paz L. Lopez.

The BusinessMirror learned t hat t he A lya nsa Tig i l Mina (ATM), a vocal critic opposing the government’s mining-liberalization policy, which started during the Arroyo administration, had already accepted the invitation to

take part in the process. Sought for reaction, Chamber of Mines of the Philippines (COMP) Vice President for Legal and Policy Affairs Ronald Recidoro declined to comment.

COMP officials, he said, still need to get “a clear picture” of what will be the role of the ATM and other CSOs, as well as the extent of their participation in the audit process.

“COMP will ask members to comment on this first to come up with an official statement,” he said.

In the memorandum addressed to All DENR audit team leaders, Fragada said the decision to involve CSOs is to ensure full transparency in the ongoing audit.

DENR Senior Undersecretary and Mining Audit Team Head Leo L. Jasareno said there are 15 different

Strong growth, hike in Pinoys’ income to boost retail sector

Sen. Juan Miguel Zubiri (fourth from left), opens the Stores Asia Expo 2016 on Wednesday at the SMX Convention Center with (from left) Philippine Long Distance Telephone Co. First Vice President and Head of PLDT Alpha Juan Victor Hernandez; Philippine Retail Association (PRA) President Paul A. Santos, president of Picture City; PRA Vice President for Research and Information Rosemarie B. Ong, COO of Wilcon Depot Inc.; PRA Vice Chairman President of Robinsons Recreation Corp. and Robinsons Land Corp. Frederick D. Go; and PRA Vice Chairman Ma. Alegria Sibal-Limjoco, president of Central Books; President and CEO of ABS-CBN Corp. Carlo Joaquin Tadeo Katigbak; and PRA Vice Chairman and President of SM Retail Inc. Jorge T. Mendiola.

Continued from A1

“It looks like everybody is building a lot of malls,” Go said. He cited the recent nationwide opening of their new outlets, including the Robinsons Galleria Cebu, as well as its own branded malls in Tagum, Davao del Norte and General Trias, Cavite. “[Also] this year, we’re still opening [in] Jaro, Iloilo, in September. We also just expanded our mall in Ilocos Norte. Then, next year, we have [new outlets opening in the cities of ] Iligan and Naga,”he added, without disclosing the amount of investment for expansion.

Seeing that technology plays a pivotal role in consumer’s lifestyles and buying behavior, the top executive of Robinsons reminded retailers and businesses to adapt to this.

PLDT Alpha First Vice President Juan Victor Hernandez shares Go’s sentiment and challenged local retail-

ers to stay in the competition by continuous innovation while embracing technological trends, such as mobile and digital platforms.

“If you tie in technology and traditional retailing, the purpose of the store today is really, really fundamentally changing. Once a retailer is able to deliver that experience, I think that’s going to be the key to success. And all of that is because of the ever-changing patterns and behavior of today’s consumers,” Hernandez said.

“That’s the kind of customers we want.

And the only way for us to deliver that is combining both the benefits of technology to be able to deliver customer experience. So it’s not just about technology; it’s about the overall customer experience.

While this is the future, what is critical is that for us to realize that the future is actually now. All of these technologies are available [now],” he added.

Coastal properties. . .

Funded by Nasa, the US Department of Energy and the National Science Foundation, the study used historical tide gauge records, employed before satellites to estimate sea levels, and ran NCAR’s Community Earth System Model 40 times with various starting conditions. To assess the impact of Mount Pinatubo’s eruption, the researchers used a separate set of model simulations that omitted particles sent into the atmosphere by volcanoes.

Then they compared the two.

Other recent volcanic eruptions haven’t had a major impact on sea levels because

Continued from A1

of the specific conditions needed to lower global temperatures, said Benjamin Horton, a professor in Rutgers University’s Department of Marine and Coastal Sciences, who wasn’t involved in the study. Horton is an author of a study published in February showing that the rise in sea level in the 20th century was faster than in any of the previous 27 centuries.

It has to be “a violent enough eruption to send the aerosols and dust high into our atmosphere. It has to be the right type of aerosols and dust to reflect incoming solar radiation,” Horton said. Bloomberg News

audit teams that are now simultaneously visiting large-scale mines in various parts of the country.

Officials from the DENR Central Office are leading the audit teams. The members are officials from the regional offices of the DENR, Mines and Geosciences Bureau, Environmental Management Bureau, the Department of Health, the Department of Agriculture and Bureau of Fisheries and Aquatic Resources, together with representatives from the Social Action Centers and CSOs as members.

“CSOs have always been part of the audit team. But during the initial audit, some were missed out, that is why a second wave would be conducted for the CSOs,” Jasareno said. So far, 18 of the 40 large-scale operating mines have undergone audit.

“In line with public policy on full transparency, all the DENR mine-audit teams shall ensure that the various civic-society groups are able to participate in the conduct of the audit. In connection, every team shall coordinate and consult with the various civic-society groups concerned accordingly prior to and after the conduct of every audit undertaken,” Fragada said.

Lopez, an environmental advocate, had included in the audit

criteria the social, environmental and, lately, biodiversity aspects of mining operations.

Lopez wants to make it a policy that CSOs and affected communities take part in the DENR’s mining-regulatory processes.

Since assuming the top DENR post, Lopez had already caused the suspension of at least seven mining operations—six nickel-mining companies: two in Zambales, two in Palawan, one on Manicani Island and one in Surigao del Norte; and one iron-mining firm in Bulacan.

The audit of large-scale mining companies in the Caraga region is ongoing and the teams would submit recommendations to the DENR chief within the week.

Antimining groups under the ATM have accepted the call for civil-society organizations (Csos) participation halfway through the audit of mining operations.

ATM, for its part, welcomed the invitation from the DENR chief for broader participation of CSOs in the conduct of the mining audit.

Jaybee Garganera, national coordinator of ATM, told the BusinessMirror in an interview that the group decided to engage in the mining audit “to ensure that the accurate and complete picture of mining operations are witnessed and documented by the audit teams.”

Garganera said ATM’s network

Emergency powers. . .

P. Tugade promptly assured that the safeguards to be set by the Committee on Public Services chaired by Sen. Grace Poe “will be followed.”

During a break in the marathon hearing, Poe confirmed to reporters the proposed law granting emergency powers to Duterte to address the transport crisis will be limited to three years.

She added that the law they are crafting would require that all biddings for projects to be undertaken under the emergency powers “should be open.”

“We also need to define the limitations of the extra powers, including how long would it take and who are the responsible officials here,” the senator said. “We owe it to the public to erase from their minds these powers would not be abused and there would be no excesses,” Poe added.

Detailed plan

She said they would need to craft an emergency-powers bill “that is detailed and we will require timelines and identify who are the responsible officials.”

She suggested to administration officials at the hearing it is time to develop an integrated multimodal transport system, even as Senate Minority Leader Ralph G. Recto insisted that government biddings for traffic-reduction measures “should be in favor” of road users and commuters.

In taking turns “grilling” Tugade on details of the Palace-requested emergency powers to address the traffic mess, the committee members initially tackled: Institutional reforms—including suggestions to merge the Department of Transportation and the Metropolitan Manila Development Authority into a single agency; Policy reforms—including relocation of 27 bus terminals in Edsa (formerly Highway 54) and opening up private subdivisions as alternative routes to ease traffic in major thoroughfares; Relaxing difficult procurement rules and exemptions from temporary restraining orders; and Enlisting more partners in public-private railway industry, among others.

Sen. Richard J. Gordon, however, cited potential issues involving resettlement of residents along train side tracks that he observed would require social engineering.

Continued from A1

He asked the proponents to also lay out legal issues to be reckoned with.

Tugade, for his part, backed the transfer of government agencies outside of Metro Manila. To decongest the metropolis, the secretary said he is willing to move the Department of Transportation’s head office from Quezon City to the former Clark Air Base in Pampanga.

Done by Christmas

Poe said the committee also intends to invite officials of the Department of the Interior and Local Government, Department of Budget and Management and the National Economic Development Authority for their inputs in the next hearing.

“We are looking to pass the emergency-powers law before Congress adjourns for Christmas recess,” the senator told reporters, adding that they plan to conduct two hearings a week to meet their self-imposed deadline.

She added that they hope to finish the hearings and submit the bill for plenary deliberations before the Christmas break in December. “It is important for the public to be assured that we are

of CSOs would be taking part in the audit. He said, so far, ATM memberorganizations have been advised to engage in the ongoing audit in the Caraga region. “We started to engage in the audit upon the invitation of the DENR,” Garganera told the BusinessMirror.

“We assert that ATM can make a meaningful contribution to the mining audit by giving the audit team the other side of the story and not only the stories of the mining companies,” Garganera said.

ATM opposes large-scale mining operations because of the massive destruction of the environment.

The group said the cost far outweighs the benefits of large-scale mining. Garganera said massive destruction of forest, pollution of water bodies, militarization and humanrights violation are among the complaints against mining companies.

ATM believes that the benefits of mining, in terms of taxes to the national and local government,

employment, and other benefits in host-communities through the mining firm’s individual social development and management programs and corporate social responsibility projects, are a far cry to mining’s promised economic benefits.

“We want to articulate the voices of the mining-affected communities and even the LGUs [local government units] who are opposing mining operations,” Garganera said.

According to Garganera, the participation of ATM and other CSOs and community-based groups would ensure that evidences gathered by the communities and LGUs [local government units] are formally submitted and received by the mining-audit team.

ATM has been calling for passage of a people-centered, propoor mining measure, and the scrapping of the Philippine Mining Act of 1995 and Executive Order 79.

CSOs have always been part of the audit team. But during the initial audit, some were missed out that is why a second wave would be conducted for the CSOs.”—Jasareno following the right process kasi delikado talaga kapag binibigay sa isang tao ang kapangyarihan,” Poe told reporters.

FOI-compliant

At the same time, Poe, in winding up the initial hearing on Wednesday, said the emergency-powers law requested by the Duterte administration must comply with transparency provisions of the Freedom of Information (FOI) Act. “There should be no room for abuses in the exercise of the President’s emergency powers to solve the traffic mess crippling the metropolis and other urban areas,” Poe said, as she assured proposals in solving traffic woes will be put into closer scrutiny by the Senate.

The senator indicated they would insist that all contracts and transactions that the government will enter into must be transparent. “First, it must be FOI-compliant. This is one nonnegotiable principle,” Poe declared, while presiding over the initial public hearing.

“Though we are open to innovation, we must also be responsible with our actions. Giving the President emergency powers necessarily raises concerns about concentration of powers to one

person, as these could easily be abused. We must have clear-cut parameters as to what constitutes as an emergency. Second, we must be clear on what those emergency powers will be used for and whether they can effectively address the problems,” she added.

‘We will cooperate’

Still, Poe also assured Malacañang “we will not be competing with you in finding problems, we will be cooperating with you in finding solutions,” even pointing out that current transportation woes require “extraordinary powers to solve.

“What are the limitations of the emergency powers? It should be clear that timetables must be set for specific projects, how much is the implementation cost and who are responsible,” Poe later told reporters, adding that a “traffic czar” should be appointed to take responsibility.

Senator Juan Edgardo M. Angara indicated that senators may include provisions in the emergency-powers bill setting “limitations to bidding.”

Angara asserted that what is important is for the bidding of projects be “open to the public.”

There should also be monthly reports, he added.

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news@businessmirror.com.ph

Freeing telco sector up to govt–Velarde B

REAKING the chokehold by two companies on the country’s telecommunications sector is now up to government, according to Now Corp. CEO Mel V. Velarde.

Velarde said one of the ways the Duterte administration can do so is for the Supreme Court to finally decide on his company’s petition for a 3G license.

“It’s been nine years and some of the players involved in that petition has either been bought or folded,” Velarde told reporters after a news briefing on Wednesday.

“We’re the only one left.”

According to Velarde, the listed technology firm is ready to roll out investments once Now Corp. gets the license.

“In a year’s time, we can start

rolling out about 300 cellular sites,” he explained. “That would be good for poor Filipinos because it may mean lower prices in mobile broadband access.”

Velarde expects to become a “strong third-player” in the telecommunications sector currently dominated by Globe Telecom Inc. and PLDT Inc. He added that the company would give the voice and text business to the two firms.

“Ibibigay na namin sa kanila ‘yon,” Velarde said adding the company’s telecommunications subsidiary

would concentrate on data.

According to Velarde, the broadband services to enterprise market alone is worth $25 billion.

And that is only being generated by the business-process outsourcing sector, he said. “There’s the second $25 billion, which is generated by remittances by overseas Filipino workers.”

Vel a rde sa id t he compa ny promises to deliver two things: no overloading and no maximum data cap.

Velarde is challenging the two telcos to disclose the frequency being used by each of their respective cellular sites.

By doing so, he said, the public would be aware how much frequency these companies have but are not using.

Likewise, Velarde said government should look into how these companies acquired these frequencies.

“They got these for free,” he said. “[The] government should at least earn something from these frequencies.”

Velarde believes Filipino consumers shou ld not be shor tchanged, as “they have the purchasing power greater than what they have six or nine years ago.”

“As long as you offer them quality services, we believe the Filipino consumer would pay even if the service is a little more expensive.”

A ccord i ng to Ve l a rde, t he company is putting in $30 million once it receives its license.

He said the fund would mostly go into the putting up of cellular sites, which is estimated to cost at $150,000 each.

Velarde said they are open to accomplishing the goal of putting up 300 cellular sites with a foreign partner.

“We’ll let you know who when we get the license.”Dennis D. Estopace

Thursday, August 11, 2016 A3

briefs

San Miguel doubles profit

San Miguel Corp., the Philippines’s largest company, more than doubled profit in the first half, boosted by higher sales at its food units and a windfall from the sale of its telecommunication assets.

Net income rose to P35.3 billion ($755 million) in the six months ended June, 107 percent more than a year earlier, the company said in an e-mailed statement on Wednesday. Net sales fell 1 percent to P329.2 billion, according to a presentation posted on the company’s web site. It didn’t provide second-quarter figures or a full-year forecast.

San Miguel agreed on May 30 to sell its telecommunication business to PLDT Inc. and Globe Telecom Inc. for about P70 billion, including debt, ending its telecommunication ambitions. The sale resulted in a one-time gain of P11.8 billion, the company said. The company also traced its solid first-half performance to better refining margins at its oil unit and higher returns from its power and infrastructure businesses.

Fuel and oil accounted for 49 percent of San Miguel’s sales in the first half, compared with 56 percent a year ago. Food and drinks accounted for more than 35 percent, while power generation was 12 percent. In 2008 food and drinks were about 90 percent of sales.

First-half net income at unit Petron Corp., the nation’s largest oil company, rose 55 percent to P5.28 billion. San Miguel Pure Foods’s first-half profit surged 37 percent to P2.5 billion, while San Miguel Brewery Inc.’s net income rose 20 percent to P8.25 billion. Bloomberg News

EXPORTS DROP 11.4 percent IN JUNE

The country’s export earnings posted a contraction of 11.4 percent in June and 7.5 percent in the January-to-June period, a dire development that should prompt exporters to identify nontraditional markets, such as Europe and the Asean, “to reduce the external shocks from times of weak demand from traditional markets,” Socioeconomic Planning Secretary Ernesto M. Pernia said.

“We should also ensure that the programmed spending on infrastructure projects, particularly those related to transportation and logistics, to support the country’s growing industries,” he said, adding that there is a need to transform the agriculture sector from just traditional farming to a globally competitive agribusiness sector.

The country’s earnings from its merchandise exports is already on its 15th consecutive month of decline to only $4.754 billion in June 2016 from $5.364 billion in June 2015. Total merchandise exports for the period January to June declined to $26.832 billion in 2016 from $29.002 billion in 2015. Cai U. Ordinario

Ongpin to sell all his shares in Philweb

This August 19 photo shows executives of Now Corp. discussing the road map of the listed media technology firm (from left) Digital Media Specialist and System Architect Joel Gonzales, President and CEO Mel Velarde and Enterprise Marketing Head Kristian Noel Pura at a hotel in Mandaluyong City. NONOY LACZA

Businessman Roberto Ongpin on Wednesday said he will sell all of his shares in Philweb Corp., a company that operates the electronic game stations of state-owned Philippine Amusement and Gaming Corp. (Pagcor).

Ongpin, who resigned last week as Philweb chairman, following President Duterte’s statement against the country’s oligarchs, said he will auction off all of his shares, which account for more than half of the company.

Philweb has asked for its shares to be suspended for trading at the Philippine Stock Exchange until the end of the month starting on Wednesday.

Ongpin said he will have an auction of his shares on August 23, but the winning bidder has until the end of the month to walk away on the deal if Philweb failed to secure the renewal of its contract with Pagcor.

“I really have to be totally completely out of the picture for them [Pagcor] to renew the contract. I need to step out of the way and hopefully they will [reconsider],” Ongpin said.

Ongpin owns 771.74 million shares of Philweb, or 53.76 percent of the total outstanding shares of the company. Philweb was last traded at P4.25 per share on August 9 before it asked suspension of trading, but that price already plunged from its 52-week high of P28.50. It was trading at a high of P20 per share as recent as end June.

At Tuesday’s the closing price, Ongpin’s shares are worth P3.27 billion.

Philweb closed down on Thursday all of its e-game stations that it operate for Pagcor after the regulator refused to renew its Intellectual Property Licensing Management Agreement.

‘Constitutional crisis looms if Duterte disregards Judiciary’

By Jovee Marie N. dela Cruz @joveemarie

A

LAWMAKER on Wednesday warned the government that the country could be heading to a constitutional crisis if the Executive Department will continue to disregard the Judicial Branch.

Party-list Rep. Harry Roque of Kabayan said the Palace should respect the Judiciary because they are coequal branches of the government.

“There are three branches of government, so each will fiscalize the other. He [President Duterte] is resisting the role of [the] Judiciary. That makes a mockery of the Constitution,” Roque said.

“He should follow the process, [Chief Justice Maria Lourdes A.] Sereno is right when she said that [judges linked to the illegal drugs trade] should not surrender to [police] authorities without warrants of arrest. Only judges can order the arrest [of the accused in criminal cases]. He [Mr. Duterte] should respect the rule of law,” he added.

On Tuesday President Duterte hit Sereno for questioning his decision to name the alleged “narcojudges.”

Duterte also raised the possibility of declaring martial law if Sereno

will stop him in his ongoing war against illegal drugs. Sereno has said judges tagged by Duterte should not surrender to authorities without warrants of arrest.

War on drugs

ROQUE also warned Mr. Duterte that the International Criminal Court (ICC) may indict him for the continuing spate of extrajudicial killings related to the government’s campaign against illegal drugs.

In a privilege speech delivered to commemorate International Humanitarian Law (IHL) Day on August 12, Roque said that so long as the ICC believes the war on drugs is “widespread” and “systematic,” they are likely to investigate the killings.

“While it would be imprudent for [him] to say with certainty that President Duterte has already committed a crime against humanity, it would be a disservice to this entire nation if [he] did not warn [the President] to be careful,” Roque said, citing jurisprudence decided by other international tribunal.

“Neither the Rome Statute nor general international law prescribes a minimum number of victims for an indictment. From what we can see today, it is clear that the civilian population is being attacked—news

There are three branches of government, so each will fiscalize the other. He [President Duterte] is resisting the role of [the] Judiciary. That makes a mockery of the Constitution.”–Roque

reports all around us overwhelmingly establish that hundreds of Filipinos have been killed either directly by government forces or with their support or tolerance. It is also clear that the President is aware that these acts are ongoing. Even without proof of a directive on his part, he has, in many instances, spoken about the use of violence against drug syndicates,” Roque said.

Malacañang, meanwhile, clarified that President Duterte’s reference to the declaration of martial law was “mere rhetoric” to illustrate how speedier his style of law enforcement is than the due process of law prescribed by the Constitution.

Presidential Communications Secretary Martin M. Andanar said Mr. Duterte did not threaten to declare martial law if the Judiciary gets in the way of his war against drugs.

“The President merely asked a rhetorical question and said it un-

der the context that his antidrug campaign cannot wait for the slow wheels of justice—Philippine style.

We have an action man for a President, who believes justice delayed is justice denied. He is the type who, at the onset of his presidency, simply wants to hit the ground running and rid society of drugs, crime and corruption with urgency,” Andanar said in a statement.

Sereno on Tuesday wrote a letter to Duterte expressing her concern over the publicized list of suspected drug coddlers, which included some judges. Sereno pointed out that some of these judges have already died, or retired, or did not have jurisdiction over drugs cases.

Sereno mum

SERENO has opted to keep mum on Duterte’s tirade against her over a resolution issued by the Court directing the Palace file formal com-

plaints against four judges whom he implicated in the illegal drugs trade in the country.

“Many things have been said, the Chief Justice sees no need to add to what are being said,” Sereno said through Supreme Court Spokesman Theodore O. Te. In his speech before Army troops in Camp General Edilberto Evangelista in Cagayan de Oro City on Tuesday, a visibly irate President Duterte lambasted Sereno for ordering Executive Secretary Salvador C. Medialdea to submit formal complaint-affidavits against the four judges that Duterte linked to the drugs trade within seven days and furnishing the judgest with a copy of the complaint.

Duterte even threatened to declare martial law if Sereno continues to block his efforts to address the country’s problem on illegal drugs.

In a resolution issued on Tuesday, the Court ordered the conduct of a fact-finding investigation on the alleged involvement of four incumbent judges in the country’s illegal drugs trade.

Sereno earlier said only four out of the seven judges on the “war on drugs” list are still active.

They are Judge Exequil Dagala of the Municipal Trial Court in DapaSocorro, Surigao del Norte; Judge

Adriano Savillo of Branch 30 of the Regional Trial Court (RTC) in Iloilo City; Judge Domingo Casiple of Branch 7 of the RTC in Kalibo, Aklan; and Judge Antonio Reyes of Branch 61 of the RTC in Baguio City, Benguet.

Meanwhile, the Court directed the four judges to submit their answer to the complaint within one week from receipt of the complaint-affidavit.

Associate Justice Roberto A. Abad was appointed by the Court to conduct the investigation and submit his recommendation to the Supreme Court en banc within 30 days.

In her letter to the President, Sereno said judges Dagala and Savillo do not have jurisdiction over drug cases, while Casiple is the judge of a court of general jurisdiction without jurisdiction over drugs cases until the Court’s recent decision to make all RTCs as drugs courts under an administrative circular.

On the other hand Reyes presides over the designated drugs court in that multisala court.

Sereno also said the Court no longer has jurisdiction over three other judges named by the President owing to various circumstances.

But, Duterte assailed Sereno for advising the judges not to surrender without a warrant of arrest. With Joel

San Juan and David Cagahastian

A4 B4

11,2016 2016 Thursday, August 4,

BusinessMirror

www.businessmirror.com.ph

Asean

BusinessMirror Editor: Max V. de Leon • Thursday, August 11, 2016 A5

www.businessmirror.com.ph

Terrorists channeling funds into Asean, risk study says Highlights of the 48th Asean Economic Ministers’ Meeting Asean-EU Perspective

HENRY J. SCHUMACHER

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HE ministers exchanged views on the recent global developments and their impact on the economic performance and integration agenda in the region.

They highlighted that, collectively, Asean has achieved important and positive achievements in its regional integration initiatives, and, in general, Asean member-states have remained relatively resilient in the midst of global uncertainties. The ministers underscored the significance of the year 2016 as the inaugural year of the Asean Economic Community (AEC) following its formal establishment, and highlighted the need to use this momentum by strengthening its commitment toward deeper integration under the AEC Blueprint 2025.

The ministers expressed concern over the diminished outlook in global growth, which presented inevitable challenges to the region’s economic performance. They were encouraged that Asean total merchandise trade remained resilient and reached $2.28 trillion in 2015, of which 24 percent was intra-Asean trade, highlighting the continuing development of regional production networks. Among its external trading partners, China remained the top trading partner of Asean with total bilateral trade at 15.2 percent of total Asean trade, followed by Japan at 10.5 percent, European Union (EU)-28 at 10 percent, and the US at 9.3 percent. 5. The ministers also noted that foreign direct investment (FDI) inflows to Asean stood at $120 billion in 2015.

While intra-Asean FDI remained stable at $22.1 billion in 2015, its share of total FDI has increased to 18.5 percent in 2015, signalling the positive impact of Asean economic integration on promoting the region as a preferred investment destination. The EU remained the largest external source of FDI flows, accounting for 16.4 percent of the total inflows to the region, followed by Japan at 14.5 percent, the US at 10.2 percent and China at 6.8 percent. The services sector remained as the largest recipient of FDI in 2015 with $74.9 billion, or 62.5 percent, of total FDI inflows to Asean, followed by the manufacturing sector with 24.2 percent.

The ministers welcomed the finalization of the sectoral-work plans on areas under its purview, and to this end adopted the following: n AEC 2025 Strategic Action Plan for Trade in Goods; n the Strategic Action Plan for Services 2016-2025; n the 2016-2015 Investment Work Programme; n Asean Standards and Conformance Strategic Plan 2016-2025; n Asean Competition Action Plan 2016-2025; n Asean Strategic Action Plan for Consumer Protection 2016-2025; n Asean Intellectual Property Rights Action Plan 2016-2025; n Asean Community Statistical System Strategic Plan 2016-2025; and n Asean Work Plan for Enhancing the GVC Agenda.

The sectoral-work plans will be reviewed and updated periodically to ensure their relevance and effectiveness.

The ministers adopted the Asean Trade Facilitation Framework, which would further the region’s trade-facilitation agenda in line with the AEC Blueprint 2025: n the Asean Food Safety Regulatory Framework, which would also be adopted in parallel by the Asean Ministers on Agriculture and Fisheries and the Asean Health Ministers’ Meeting; n the Asean Institutional Framework on Access to Finance for the Micro, Small and Medium Enterprises (MSMEs), which would contribute to the development and empowerment of MSMEs in the region; n the Report and Work Programme on Starting a Business in Asean, which would advance the region’s agenda in streamlining the starting a business process; and n the Asean Guidelines for Special Economic Zone (SEZ) Development and Collaboration, which will serve as a nonbinding reference of best practices in the development and operation of SEZs and potential collaboration/complementarities in the region.

The ministers also urged Asean member-states to exert best efforts in expediting the ratification of the Protocol on the Legal Framework to implement the Asean Single Window so that the live operation of ASW can commence in 2016.

They commended the ongoing works on the implementation of the Asean Customs Transit System (ACTS) Pilot Project to be conducted among three member-states, namely, Malaysia, Singapore and Thailand. The success of the ACTS Pilot Project would pave the way for the ACTS system to be rolled out to other Asean memberstates. Noting the importance of this initiative in promoting seamless movement of goods across the region, the ministers called for the finalization of the Protocol 2 (Designation of Frontier Posts) of Asean Framework Agreement on Facilitation of Goods in Transit (AFAFGIT) and the full ratification of Protocol 7 (Customs Transit System) of AFAFGIT by all Asean member-states.

The ministers welcomed the completion of the signing of the Protocol to Implement the Ninth Asean Framework Agreement on Services Package done last November 27, 2015, in Makati City, the Philippines.

The ministers noted that four strategic goals in the Asean Intellectual Property Rights Action Plan 2016-2025 will be achieved in the next 10 years through 19 initiatives that span the full spectrum of the intellectual property life cycle.

The ministers noted that five Asean member-states (Cambodia, Lao PDR, the Philippines, Singapore and Vietnam) are already parties to the Madrid Protocol and commended efforts by the remaining Asean member-states to move forward with their accession processes.

The ministers welcomed the significant progress in enacting comprehensive competition laws, with nine Asean member-states having such competition laws to date. They noted the key performance indicators identified in the Asean Competition Action Plan 2016-2025, which would monitor progress toward effective and enforceable competition rules that support a competitive Asean with efficient and well-functioning markets.

The ministers welcomed the strengthening of the role of the private sector as outlined in the AEC Blueprint 2025, which encourages greater involvement and more structured participation of the private sector in Asean integration work. In this connection, the ministers noted the efforts made by the Asean Business Advisory Council to initiate engagement of relevant Asean sectoral bodies, starting with the Asean Coordinating Committee on MSME, aside from its annual highlevel engagement through dialogue with the Asean economic ministers, and with the Asean leaders.

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ECURITY ministers from more than 20 countries meeting in Bali have been told that groups, such as Islamic State, are increasingly channeling funds into Southeast Asia to finance terrorism.

A regional risk assessment jointly prepared by Indonesia, Malaysia, Singapore, Thailand, the Philippines and Australia also warned that the use of charities and nonprofit groups to support terrorism was rising. Indonesia’s financial intelligence agency—the PPATK—estimates that foreign sources transferred more than $763,000 to fund terrorism in the country between 2014 and 2015.

“Given only small sums are required to stage a deadly attack, even modest amounts of funding from foreign terrorist groups pose a significant risk to the region’s security,” the assessment said. “The cross-border movement of cash is the highest-risk method of moving terrorism funds across the region.”

The assessment also said that porous land borders and close maritime boundaries allow extremists and terrorist networks in parts of the region to move funds across borders with ease, adding that poor visibility over cash-smuggling routes compounds the problem.

The counterterrorism financing summit, also attended by representatives from countries including the United States, India, the United Kingdom and China, is the first major gathering of international counterterrorism officials since attacks earlier this year in France, Germany, the US and Indonesia. Bali itself was hit by a terrorist bombing in 2002, which killed more than 200 people.

Pipe bombs

SCOTT STEWART, vice president for tactical analysis at the US-based privatesector security firm Stratfor, said that, while the regional terrorism threat had fallen a notch since the Bali attacks, cells with the ability to conduct small-scale attacks using pipe bombs and firearms remained a concern.

“They have really been able to take out a lot of the experienced terrorist cadre,” Stewart said by phone. While it didn’t take much to carry out a small attack, he said, part of limiting that threat was following the money.

“If the money is allowed to flow in freely, that’s going to give them a lot more latitude to not only pay recruits, to bribe officials, to acquire the raw materials to construct bombs, to

$763,000 The terror fund channeled to Indonesia between 2014 and 2015

buy cars, safe houses, other things, Stewart said. “It’s really significant to keep those money flows constrained as much as possible.”

The report called for deeper intelligence cooperation and the strengthening of domestic and regional frameworks to help underpin efforts to counter terrorism financing. It also warned that small funds sent through the banking and remittance sectors were hard to distinguish from ordinary transactions.

‘Generational’ terrorism

ADDRESSING the increase in the frequency and severity of terrorist attacks globally in a speech at the summit on Wednesday, Australian Justice Minister Michael Keenan said individuals unknown to authorities were becoming quickly radicalized and carrying out violent attacks.

“International terrorism will be generational—it will confront us for decades to come,” Keenan said. “We must work closely and in collaboration with regional and global partners to disrupt terrorism financing and to combat this threat. Large terrorist organizations, such as ISIL, rely on networks and facilitators enabled by criminals, corrupt officials and others co-opted or willfully blind to their endeavors both within and outside their territory.”

In December last year a joint investigation by Indonesian and Australian authorities uncovered a suspected terror-financing conduit through which $384,000 had been sent from Australia to Indonesia to recruit and arm extremists, as well as supporting their families. Since 2006, seven people have been convicted in Australia for offenses related to terrorism financing from a total of 21 individual prosecutions.

Bloomberg News

Indonesia weighs Iran govt’s proposal for $8.4-B oil refinery

I

NDONESIA will study a proposal from Iran to build an oil refinery, along with bids from other countries, as it seeks to boost refining capacity to catch up with rising consumption.

Iran proposed a plant with processing capacity of more than 100,000 barrels a day and pledged to provide the crude, IGN Wiratmaja Puja, director general of oil and gas at the Energy and Mineral Resources Ministry, said in Jakarta on Tuesday. The project’s value is estimated at $8.4 billion and would be built over four or five years in Java, Iran’s state run news agency Mehr reported, citing Hassan Khosrojerdi, head of the joint Iran-Indonesia refinery’s board of directors.

Indonesia, already the only Organization of Petroleum Exporting Countries (Opec) member that’s a net oil buyer, may need to import half of its annual fuel needs even after increasing its refining capacity by 500,000 barrels a day in the next seven years, according to BMI Research. Iran is seeking to boost crude exports after international

sanctions on its economy were eased in January.

A feasibility study on the refinery’s economic justification is being conducted, a spokesman for Iran’s oil ministry said. The National Iranian Oil Co. has not signed any deals on the project, he said. Indonesia has made no decision on Iran’s proposal because it’s still preliminary, Puja said.

Bontang refinery

INDONESIA has also received proposals from China, Kuwait and Russia, Puja said. The ministry hasn’t come to any decisions on the bids. The government plans to offer the Bontang refinery in East Kalimantan to investors before other projects, he said.

Indonesia’s refining capacity may grow 2 percent by 2025, while consumption surges 31 percent in the same period, according to BMI. The country, which reactivated its membership in the Opec this year, produced 740,000 barrels a day of crude in July, according to data compiled by Bloomberg.

Bloomberg News

TheBroa

Business

A6 Thursday, August 11, 2016

Federalism No better time than now

President Duterte delivers his first State of the Nation Address before the 17th Congress on July 25, 2016, in Quezon City. AP/Bullit Marquez

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By Butch Fernandez @butchfBM & Jovee Marie de la Cruz @joveemarie

N fulfilling President Rodrigo Duterte’s dream to install a federal system in place of the existing presidential form of government, his chief advocate, Senate President Aquilino L. Pimentel III proposes to adopt the best features of federal governments in Europe, North America, Australia and even Malaysia.

Pimentel suggests that the framers of the new system, most likely the current members of Congress sitting as a constituent assembly (Con-ass), should, likewise, look at newly formed federal governments in South America and Africa as guides. He added the experience of these countries could serve in crafting the Philippines’s version of a federal government responsive to Filipinos’ needs.

Pimentel III points out that since the shift from the Presidential to the federal system will empower thousands of local government units (LGUs) from Luzon, the Visayas and Mindanao, the shift would require provision of adequate resources to enable LGUs in federal states to fulfill their mandates.

To do this, Pimentel III proposes to increase the revenue-sharing ratio of local governments to “as high as

80%

The expected share of voters favoring Charter change after a massive information campaign, according to House Speaker Pantaleon D. Alvarez 70 percent to 80 percent” of all government revenues. He explains the sharing ration would be “consistent with our belief that local governments deserve a bigger share of government resources, since they are in a better position to address the needs of their constituents.”

Equalization Fund

PIMENTEL III concedes not all states under the envisioned federal govern-

ment would have the same resources and financial standing, which was why he also supports putting up a federal government-administered “equalization fund” that memberstates can avail themselves of if they require funding assistance.

The federal system will keep the LGUs intact, but their shares in the total revenue of the Republic shall be increased to ensure their viability, according to Pimentel III’s father, former Senate President Aquilino Q. Pimentel Jr.

The formula that the elder Pimentel suggested is 80-percentto-20-percent sharing ratio between the federal government and the states, which he estimates would number to 11 or 12 states. The same formula is suggested between the state government and the LGUs, with the state government getting 20 percent and the latter, the lion’s share.

This is much bigger than the 40-percent share that LGUs get under the Local Government Code (LGC).

Loan Commission

BUT since not all federal states are born equal in terms of resources and opportunities and, therefore, even an 80-percent share might not be enough for some, the Pimentel scheme involves setting up an Equalization Fund. The fund would be administered by the federal government to assist states in dire need of development funds that the elder Pimentel said should be created.

Federal states would be represented in the authority administering the Equalization Fund, he explained. A loan commission would also be created to ensure

that foreign loans are faithfully paid, with both the federal government and all the states represented in the commission.

At least one-fourth of the loan commission members must come from qualified and accredited nongovernmental organizations (NGOs), he explained.

Equitable shares of the loan repayments will be borne by the States that benefited from the loans, Pimentel Jr. told a recent Senate forum.

Urgent steps

Pimentel III, meanwhile, asserts that the timetable for shifting to a federal system should be fasttracked, with the Senate and the House of Representatives passing the enabling law within the year to pave the way for either Congress as a Con-ass or by elected members of a constitutional convention (Concon) to start working on Charter changes next year.

“There is no time to lose,” he says, insisting that “we must go federal” if the Filipino people and their leaders want to jump-start progress and economic development, as well as forge lasting peace in Mindanao.

Even as he is pushing to fasttrack the shift in form of government, Pimentel III acknowledges that federalism’s complex nature also needs to undergo careful scrutiny by its framers, citing findings by scholars there is “no one model in the world that fits all.”

He suggests that the Charter framers would need to figure out a version of federalism suited to peculiar

conditions of Philippine society. Pimentel III points out the framers can learn from “good and bad experiences of existing federal governments.

No cure-all

THE senator cautions early converts that the federal form adopted by First World countries, like the United States and the European Union, should not be “seen as a cure-all to problems besetting the Philippines.

But while the federal system may not be perfect, Pimentel III allows it could provide the formula for addressing the decades-old Philippine predicaments ensuing from its cultural diversity.

Pimentel III believes now is the most opportune time for shifting to federalism, with full backing from the current tenant in Malacañang.

He recalls Mr. Duterte’s campaign pitch running on a platform of federalism espoused by the PDP Laban, the party founded in 1982 by his father and other prodemocracy leaders standing against the Marcos dictatorship that was installed following the imposition of martial law in 1972.

Local autonomy

IN preparing the groundwork, former Senate President Aquilino Q. Pimentel Jr. introduced the landmark LGC in 1990. The Code was passed into law and took effect the following year.

The Code granted the LGUs certain powers of government pertaining to health, agriculture and social welfare, “and snippets of power over education, environment, tourism, and, to some extent, the police had

been devolved to and exercised by local governments.”

The LGC of 1991 bestowed local autonomy that meant less reliance on the national government.

Such autonomy includes the “allotments” given by Imperial Manila, and, at the same time, boosting the LGUs’ reliance on internally generated resources, or resources jointly generated with other institutions, be these other LGUs or private institutions.

Pimentel III recalls that prior to the adoption of the Code, taxes and revenues accruing to the government from natural resources, like geothermal plants, gold, copper and iron mines, and timber had been “monopolized by the central government.” But when the Code took effect in 1991, these taxes were mandated to be shared between the central government and the LGUs.

Logical step

SENATE President Pimentel III says federalism is now “the next logical step,” should Filipinos choose the decentralize government when a national plebiscite is called to ratify Charter changes envisioned to take place by midterm of the Duterte administration.

Pimentel III points out the voters’ decision to shift to another form of government “should be well-informed, well-thought of and participatory.”

He adds that, “in the ultimate analysis, federalism is a covenant that is made by citizens and, ultimately, the decision to federalize should reflect the will of the people who choose to unite amid their diversity.”

aderLook

sMirror

Under a federal system, Pimentel III explains that sovereignty is constitutionally divided between a central governing authority and constituent political units, like states or provinces, where each level of government usually has its particular jurisdiction; areas of public policy in which it alone has final authority, unless it decides to share it with the other.

“Simply put, federalism can be viewed as a system that accommodates both self-rule of the constituent unit and shared rule at the federal level,” he said.

Finalizing draft

HOUSE Speaker Pantaleon D. Alvarez said he is now finalizing the draft of an Executive Order (EO) creating the 20-man constitutional commission (Con-com) that will draft the proposed amendments to the Constitution.

He said the Palace asked him to draft the EO, and submit it within the week.

The lawmaker said the ConCom will help Congress, acting as a Con-ass, in drafting the proposed changes to the charter.

According to Alvarez, the creation of the commission would help allay the reservations aired by some quarters and the public against amending the Charter through Conass, instead of a Con-con.

He said the commission will include constitutional law experts like former Supreme Court Chief Justice Reynato S. Puno, Pimentel Jr., lawyer Reuben R. Canoy and Dean of San Beda Law School Fr. Ranhilio C. Aquino. Alvarez added

the commission would also include representatives from NGOs, academe and other sectors of society.

“They will be tasked to study and review the present Constitution and then draft a new Charter, which will be submitted to the constituent assembly, where it will be discussed thoroughly,” Alvarez said.

He, however, said it is still the Con-ass that would discuss and approve the proposed changes to the Charter.

“And after Congress approves the proposed amendments, it’s not final yet. The public must still agree to the proposed changes,” Alvarez said. “That’s why it’s safe because, in the end, it’s the people who would decide whether they agree or not with the proposed new Constitution.”

The move to amend the Charter is meant to pave the way to change the present system of government to a federal one.

Alvarez said Con-ass will tackle all the proposed amendments or revisions, whether politically or economically.

The Speaker said the Con-ass will not only focus on the proposal changing the form of government from republican to federalism.

Alvarez added he is open to former Speaker Feliciano R. Belmonte Jr.’s proposal lifting the economic provisions of the Constitution in the 17th Congress.

“When you revise the Constitution, you have to change everything,” Alvarez said. “We need to tackle everything either in constitutional convention or constitutional assembly.”

www.businessmirror.com.ph | Thursday, August 11, 2016

Legally nonbinding

MEANWHILE, PDP Laban Rep. Alfredo B. Benitez of Negros Occidental, author of a resolution calling for Con-ass, said the Con-com is only a recommendatory body.

“The Con-com may start drafting while Congress is deliberating the proposed 2017 national budget,” Benitez said. “But remember, Concom is only a recommendatory body, but at least there is guide to start.”

“With the EO [creating the Concom], the President appoints the members of the commission. We have the [same] Constitution for 30 years now under six administrations,” the lawmaker said in an interview with reporters. “But the question is, how will we bring development to the country? Is it [through right] leadership or structural changes? We have to discuss [these] now.”

In the same interview, Pimentel Jr., who was a delegate during the 1971 Constitutional Convention, backed the creation of Con-com.

“A commission will be created to proposed amendments or revisions to the Constitution, and this will be submitted to the Con-ass,” he said. “That’s a good thing.”

30 percent

ALVAREZ said once the Filipino people understand the merits of the proposed Charter change toward a federal form of government, the majority of them will support it.

A nationwide survey said 44 percent of the Filipino respondents are against Charter change.

“I am more encouraged by the 30 percent [who] said the Charter should be revised,” Alvarez said.

The Speaker said that, through a massive information campaign explaining the merits of the proposed Charter change, support for the move could even reach around 80 percent or more.

“It’s only a question of explaining to the people, especially in the regions, maybe not anymore in Metro Manila.”

Alvarez added that a shift to the federal form of government would bring a long-lasting solution to the centuries-old problem of poverty, because growth of the regions had been stifled under the unitary form of government that colonizers, like Spain and the US, imposed on the country primarily for better control.

“Right now, all the provinces and regions are being controlled by the central government because we have a unitary form of government,” Alvarez said. “Now by shifting to a federal form of government, these regions or states can now manage their own economy; manage their own natural resources; and create opportunities for their people.”

Under such a system, the masses will also enjoy the benefits of an improved economy, unlike in the present system, where the benefits of economic growth are not felt by ordinary people, he added.

New workweek

NACIONALISTA Party Rep. Luis Raymund F. Villafuerte Jr. of Camarines Sur said the chamber could work even faster in changing the Charter by implementing a five-day session per week.

Under a five-day workweek, Villafuerte said the lawmakers can

significantly advance their schedule of proposing amendments to the Constitution via Con-ass route to pave the shift to federalism.

“Holding sessions from Mondays to Fridays would give us enough time and make us work faster in performing our lawmaking duties, along with the extra workload of amending the Constitution,” the lawmaker said.

Earlier, Alvarez said Congress will prioritize the passage of the 2017 budget before changing the Constitution.

Moreover, Villafuerte said that by stretching their workweek, House members could either finish budget deliberations ahead of schedule or begin discussions on federalism before the year-end, or start deliberations on Charter change right now by setting aside specific days per week for lawmaking and for Con-ass days for federalism. ​

Currently, the lower chamber only conducts sessions from Monday to Wednesday.

Far sighting

ACCORDING to Budget Secretary Benjamin E. Diokno, there are various types of federal government.

Diokno explained that public spending will depend on the form of federal framework that the Duterte administration would implement.

“It depends on what form of federalism, and there are many variants that emerge,” Diokno told the BusinessMirror through a text message.

He said the Department of Budget and Management (DBM) is focused more on the 2017 national budget. Diokno said this needs to come

a7

first before the discussion on the shift to federalism of the country.

The proposed budget by the DBM for 2017 is about P3.35 trillion to support the various spending initiatives of the Duterte administration.

The Department of Finance (DOF) is also waiting cue from other branches of government.

Finance Undersecretary Gil S. Beltran said the DOF is reviewing studies on the proposed shift to a federal form of government. Beltran agreed with Diokno that since there are a number of variants of federalism, the Philippines’s variant should match the needs of the economy.

The road

Pimentel III elaborates that, while there is no single model of a federal system in the world, there are common attributes that characterize federal systems. These attributes include the distribution of powers between central and constituent units; participation of constituent units in central decision-making; constitutional autonomy of constituent units; accommodation of diversity; fiscal equalization; and intergovernmental instruments.

At the end of the road, he says, it’s really the Filipinos who will create their own model of federalism, merging these common attributes with the best practices of others while considering the peculiar context of the country. It’s a long journey that cannot promise automatic progress, but to its true believers, there’s no better time to take to the road than now. With additional report by Rea Cu

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The World BusinessMirror

Thursday, August 11, 2016

www.businessmirror.com.ph

Pentagon report bares status of Guantánamo detainees

A

Taliban closing in on key city in the south–Afghan official

K

According to Kareem Atal, the head of Helmand ’s provincial council, Taliban fighters have completely surrounded Lashkar Gah after weeks of intense fighting across the province. Army and police units have now been pulled back from checkpoints farther afield and brought back to reinforce the city.

Also, “new forces are arriving”

in the city, he added. The fighting has closed all the highways leading into Lashkar Gah, forcing up prices for food and other basics inside the provincial capital, Atal said.

Doctors Without Borders, the international medical charity, has reduced its international staff in Lashkar Gah and is maintaining basic emergency and surgical services, Country Representative

400 The number of patients who arrived at the emergency room of the hospital maintained by Doctors Without Borders in Lashkar Gah

Guillem Molinie said. The charity, known by its French acronym MSF, has a 300-bed hospital in the city and usually functions with 25 international staff. Molinie would not say how many staff had been evacuated.

He said the number of people arriving for treatment after being caught up in fighting in dis-

tricts around the city had been reduced in recent days by road closures. “With fears of the town bei ng t a ken, non- emergenc y patients prefer to delay their treatment,” he told The Associated Press, though 400 patients arrived at the hospital ’s emergency room on Tuesday.

“We are concerned about urban fighting—it is getting closer to the urban center,” he said.

Helmand is a strategically impor tant prov ince for bot h the Kabul government and the Taliban, whose insurgency is now in its 15th year. It produces opium, which is the raw material for most of the world ’s heroin and which funds the insurgency.

Sout her n A fghanistan is considered t he Ta l iba n hea r tl a nd. Dur ing t he Ta l iba n 1996 to 20 01 r u le of t he cou nt r y, they made neighbor ing K andaha r prov ince t he seat of t heir e x t rem ist reg ime. AP

As Venezuela recall stumbles, opposition calls for protest

V

ENEZUELA’S opposition is calling for a national protest next month in hopes of forcing a presidential recall this year—even after authorities on Tuesday released an electoral calendar suggesting it might not happen until 2017.

The coalition of opposition parties, known as the MUD, is asking people from all over Venezuela to descend on Caracas on September 1 to agitate for the vote.

“We will have a recall referendum in 2016 because it’s technically possible, politically pertinent and socially necessary,” the organization’s Secretary General Jesus Torrealba said in a statement.

The announcement came after Tibisay Lucena, president of the National Electoral Council (CNE), on Tuesday laid out a timeline for the referendum in a nationally televised speech.

According to her calendar, the opposition might be asked to collect 3.9 million signatures—or 20 percent of voter rolls—at the end of October, and the CNE would have until the end of November to

review those signatures and call a referendum. But the electoral body can schedule that critical vote any time during the next 90 days, making a vote in January or February a possibility.

Fragile social dynamics

THE timing is crucial.

If the recall happens before January 10 it will trigger new elections. However, if President Nicolas Maduro were to lose a recall vote after that date, his hand-picked vice president would finish out his term through 2019.

The opposition has been accusing the electoral body of dragging its feet on the process to protect the unpopular president and his socialist administration.

Lucena defended the process, saying that a failed 2004 recall effort against the late President Hugo Chavez took 319 days to organize. And she warned the opposition that it was “wasting its time” with protests. “This electoral power does not accept pressure from anyone,” she told an audience of administration officials. “Our

In clear ing him for transfer, the rev iew board said he has not ex pressed anti-US sentiment or any intent to reengage in militant activ ities.

Mohammed Rajab Sadiq Abu Ghanim, 41, of Yemen (awaiting transfer)

Majid Mahmud Abdu Ahmed, 36, of Yemen (awaiting transfer)

AN experienced militant believed to have acted as a guard for alQaeda chief Osama bin Laden in Afghanistan, Ghanim arrived in Afghanistan in late 2000. He fought for the Taliban against the US-backed Northern Alliance and worked for a charity linked to al-Qaeda.

He associated with several individuals responsible for the attack on the USS Cole, which killed 17 American sailors in Yemen, but there is no evidence that he had a role in the October 2000 attack. He was arrested in Pakistan in late 2001.

In approv ing his transfer, a detainee review board noted that his behavior had improved since mid-2013 and he tried to educate himself while at Guantánamo and immerse himself in American culture.

An Afghan man pedals his bicycle past American University of Afghanistan in Kabul, Afghanistan, on August 8. A new elite Taliban force is proving its strength in the strategic southern province of Helmand, pointing to the insurgents’ ability to refine their battlefield techniques to match Afghanistan’s increasingly professional national army. AP

ANDAHAR, Afghanistan— Afghan troops are being deployed to the capital of the key southern province of Helmand amid intense fighting with the Taliban in surrounding areas and fears the city could fall to the insurgents within days, officials said on Wednesday.

new Pentagon report to Congress details some G u a nt á n a mo B a y d e t a inees awa it ing t ra nsfer or recently transferred.

duty is to guarantee the constitutional rights of all Venezuelans.”

In a letter to subscribers, New York-based analysis firm Eurasia Group predicted the administration will avoid a recall this year “at all costs.”

“As such, the only avenue for a political transition in 2016 is a socia l ex plosion that br ings masses out to the streets demanding change, including the chav ista base of suppor t,” the organization said, refer r ing to Chavez’s stil l-loya l base. “Ab sent an ex plosion, the gover nment w il l likely a l low a reca l l to ta ke place in early 2017 in an effor t to respond to r ising i nt e r n a t i o n a l p r e s s u r e a n d frag ile socia l dy namics.”

Not this year

T HE e lec tor a l c a lend a r i s a bitter blow to the opposition, which believes that Maduro’s ouster this year is the only way out of a deep economic, social and political crisis. Venezuela is seeing triple-digit inflation and a tanking economy amid depressed

oil prices and draconian price and currency controls that have throttled domestic production.

The malaise has caused a shortage of just about everything, including food and medicine. Hunger—in what was once of Latin America’s most prosperous nations—is on the rise.

Pol ls show that the president would likely be swept out in a referendum. For months, Maduro and some of his closest advisers have said the recall wouldn’t happen this year. And Lucena’s statements only seem to reinforce that idea. But the calendar does leave open the possibility that the vote could happen before Januar y 10.

And some in the opposition say it’s up to the people, protesting on the street, to make that happen.

“There’s no legal or technical reason that the referendum can’t be held this year,” said Henrique Capriles, the opposition governor of Miranda state and a former presidential candidate. “Venezuelans together are more powerful than Ms. Lucena.” Miami Herald/TNS

Mahamedou Ould Slahi, 46, of Mauritania (awaiting transfer)

SLAHI is a militant who trained at an al-Qaeda camp. While living in Germany, Canada and Mauritania, he recruited other militants, primarily to fight in Bosnia or Chechnya.

The report said he facilitated the travel of future 9/11 operational coordinator Ramzi bin alShibh and two future 9/11 hijackers to Chechnya via Afghanistan in 1999.

Slahi was skilled with electronics and computers.

He was arrested in Senegal in January 2000 and moved to Mauritania where he was arrested again in November 2001, arriving at Guantánamo in August 2002. In approving his transfer, the board noted his compliant behavior in detention, his recognition of his past activities and change of mind-set.

Karim Bostan, 48, of Afghanistan (awaiting transfer)

BOSTAN is the suspected leader of an improvised explosive device cell affiliated with al-Qaeda that is thought to have targeted USled coalition forces in eastern Afghanistan.

“In t his role, he probably planned, directed or conducted multiple attacks against coalition forces,” the report said.

Bostan is believed to have ta ken orders from a senior a lQaeda paramilitar y commander in Pa k istan. He has consistent ly denied any involvement in militant activ ities.

Since arriving at Guantánamo in March 2003, he has learned to read and write and has stayed fit.

His law yer, Paul R ashkind, say s t he det a i nee i s a “ loving father and grandfather, a shopkeeper and deeply reverent man,” who dreams of returning to his village to help run the family f lower shop.

In approving his release, the board said that, while he presents some level of threat, he has offered “credible statements regarding his commitment to live a peaceful life.”

Obaidullah, 36, of Afghanistan (awaiting transfer)

OBAIDULLAH has admitted to acquiring and planting antitank mines to target US and other coalition forces in eastern Afghanistan. He was captured by US special forces in July 2002.

Twenty-three antitank land mines and a notebook containing schematics for detonators were recovered during his capture. He arrived at Guantánamo in October 2002.

AHMED was recruited in his late teens in Yemen to fight for the Taliban. He trained with al-Qaeda in Afghanistan. He fought on the front lines, became a bodyguard for bin Laden and was captured by Pakistani authorities with 30 other al-Qaeda affiliated individuals.

His detainee profile in November 2015 said Ahmed had been largely uncooperative with interrogators, “still harbors anti-US sentiments and holds conservative Islamic views.” In clearing him for transfer, the review board noted Ahmed’s candor in talking about his time in Afghanistan, his acceptance of mistakes he has made and mentioned the young age at which he was recruited.

Muhammad Abd al-Rahman alShumrani, 41, of Saudi Arabia (transferred)

A Saudi recruiter and fighter for al-Qaeda, detained since January 2002, who “almost certainly remains committed to supporting extremist causes and has continued to incite other detainees against the detention staff at Guantánamo,” the report said.

Since February 2014, he has indicated possible plans to reengage in terrorist activity and has followed the activities of Islamic State militants in Syria and Iraq. He told the review board that he is happy to return to Saudi Arabia and attend a government rehabilitation center.

The board determined that any risk to his release could be adequately mitigated by Saudi Arabia. He was transferred there in January.

Omar Khalif Mohammed Abu Bakr Mahjour Umar, 44, of Libya (transferred)

HE underwent extremist training in Libya, Sudan and Afghanistan and was a trainer in military skills, including explosives, at al-Qaeda camps.

Pa k i st a n i forces det a i ned Umar in 2002 at a safe house run by senior al-Qaeda figure Abu Zubaydah. T here are no indications that he is in direct contact with militants outside Guantánamo, but he has tried to relay greetings to several Libyan former detainees, including one who has emerged as an extremist leader and could be in a position to help him reengage.

In approving his transfer, the review board noted his “significantly compromised health condition” and his recent contact with his family, indicating his intent to move forward in a positive manner. He arrived at Guantánamo in 2002 and was transferred to Senegal in April.

Abdel Malik Ahmed Abdel Wahab al Rahabi, 37, of Yemen (transferred)

A member of al-Qaeda and former body guard for bin Laden, he also might have been selected by al-Qaeda at one point to participate in a hijacking plot. Since mid-2013, Rahabi has complied with guards.

He has made statements suggesting he continues to harbor animosity toward the US and possibly sympathizes with extremist causes. His brother-inlaw in Yemen is in contact with extremists in Syria.

Rahabi was transferred to Montenegro in June. He told the board that he wants to forget the past and embark on a peaceful future with his wife and daughter.

In approving his transfer, the board noted his changed mindset, desire to reintegrate into society and his acknowledgement of past mistakes. AP

The World BusinessMirror

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Pop stars, diplomacy victims of cooling China-Korea ties

B

EIJING—Growing Chinese anger at South Korea over a United States antimissile defense system bodes ill for everything from pop-star appearances to United Nations action against North Korea’s nuclear and missile threats.

South Korea’s mighty entertainment sector has been on edge since Beijing criticized Seoul’s decision last month to proceed with the Terminal High Altitude Area Defense, or THAAD, system, with reports of event cancellations and possible bans on South Korean TV series, amid scattered calls for a total boycott of imports from the South.

In the latest cancel lation, Youku, China’s biggest streaming site, deep-sixed a meet-andgreet for fans with South Korean stars Kim Woo-Bin and Bae Suzy to promote the hugely popular TV drama Uncontrollably Fond.

A company statement gave the reason simply as “forces beyond our control.”

A chill has already descended over the political relationship, with Chinese state media employing its trademark searing rhetoric in daily screeds against South Korea and the US over the Thaad plans.

State outlets have even hinted that Beijing will stop future cooperation with the US against North Korea at the United Nations Security Council. Thaad “has declared the death of that short-lived United Front,” the English-language China Daily said in a recent editorial. The Foreign Ministry did not respond directly to a faxed question about future UN sanctions cooperation, but said the Security Council’s resolutions on North Korean missile tests contained “clear rules.”

Major blow

SOUTH Korean media, citing diplomatic sources, have reported that

China may have already blocked the Security Council from issuing a statement denouncing the North’s recent missile launches.

On Sunday K im Sung-woo, spokesman for South Korean President Park Geun-hye, urged China to take issue with North K ore a’s nuc le a r a nd m i s s i le threats instead of criticizing THA AD, calling Chinese media’s criticism “unreasonable.”

China had warned for months that a decision to deploy Thaad would deal a major blow to relations with South Korea. Beijing sees itself as the system’s true target, dismissing its ability to defend against North Korean short-range missiles, while complaining that it would allow the US to peer up to 1,400 kilometers into China.

“If South Korea willfully deploys the system, there will be a larger impact on relations and in trade. Economic ties will inevitably get hurt because China considers the deployment as a hostile act, so how could it be possible to develop relations under these circumstances?” said Lu Chao, a Korea expert at the Liaoning Academy of Social Sciences in northeast China.

The US, which retains 28,500 troops in South Korea, says Thaad is a defensive system focused only on destroying any North Korean missiles targeting the South.

Cultural exports

THE rapid deterioration of relations is even more stunning given how cozy they were barely a year ago, when Park paid her Chinese counterpart Xi Jinping an enormous compliment by attending a

September military parade in Beijing, the only head of state from a US ally to do so. That underscored a long-term effort by South Korea to walk a fine line of seeking both deeper trade and cultural ties with Beijing and a strengthened alliance with the US Cultural exports are a big deal to South Korea, and a prolonged dow nturn in the China market could have effects on other products. According to the stateowned Korea Creative Content Agency, China, including Hong Kong, was the second-biggest importer of South Korean books, comics, music, video games, movies, animation and other content businesses, accounting for 24 percent of those types of exports at $189.99 million in 2014, the last year for which figures were available. North America was the biggest market, absorbing 29 percent of South Korea’s cultural exports that year.

While that’s a fraction of South Korea’s total exports to China, which totaled $145.3 billion in 2014, with South Korea enjoying a hefty surplus, the entertainment sector can have a heavy knock-on impact on the popularity of other South Korean goods, especially cosmetics, fashion, food, consumer electronics, smartphones and cars, as well as tourism.

Strong effect

W H AT K-Pop stars wear, eat and use can exert a strong effect on Chinese consumers. Chinese tourists spend their time in South Korea visiting spots where popular K-drama series were filmed and buying Korean cosmetics that K-Pop stars use and eating local food that K-Pop stars enjoyed on screens.

President Park clearly knows the entertainment sector’s value to South Korea’s exports and tourism, as well as the broader economy. “We live in an era when one drama can stimulate many industries and K-Pop could be an important trigger of our products,” Park said in April as the South Korean blockbuster T V ser ies Descendants of the Sun

was enjoying huge popularity in China.

Chinese consumer boycotts can be both spontaneous and directed from the top, with the government setting the tone and passing on suggestions or orders, usually verbally so as not to be traced. An editorial in the nationalistic tabloid Global Times, published by the Communist Party’s flagship People’s Daily, suggested both factors were in play.

The impact on cultural exports will only worsen if South Korea moves ahead with Thaad, the paper said. “By then, there will be no need for any official order, as TV stations broadcasting South Korean dramas will be resisted

by Chinese netizens.”

Exerting control

SOUTH Korean officials are clearly worried about any economic retaliation and last month the government designated one official from each economic affairs-related ministry to monitor any developments related to nontariff barriers, such as official or unofficial bans.

The Chinese government and state media have also been eager to provide a platform for South Koreans who oppose THA AD, and Beijing this week hosted opposition South Korean lawmakers for a discussion on Thaad at Peking University. Park criticized the lawmakers, saying they don’t understand the diplomatic efforts the government has been making.

The implication that they were being used by China seemed have had an effect and the group canceled a planned news conference.

Beijing’s approach could backfire if it ends up alienating South Korean’s and driving their country into a stronger alliance with the US and China’s old nemesis Japan, but it is a risk China seems willing to take.

“Ultimately, South Korea will face China’s military countermeasures, since t he C hinese military will definitely not to let the situation develop without exerting control,” the Liaoning Academy’s Lu said. AP

Two words keep ailing Samsung workers from data: trade secrets

S

EOUL, South Korea—As a high-school senior, Hwang Yu-mi went to work bathing silicon wafers in chemicals at a Samsung factory that makes computer chips for laptops and other devices. She died of leukemia four years later.

After Yu-mi’s death in 2007, her father, Hwang Sang-gi, learned a 30-year-old worker at the same semiconductor line also had died of leukemia. The taxi driver launched a movement demanding the government investigate health risks at Samsung Electronics Co. factories.

When Hwang sued after his first claim for government compensation was denied, he struggled to get details about the factory environment because Samsung did not release that information to worker-safety officials.

An Associated Press (AP) investigation has found South Korean authorities have repeatedly withheld from workers and their bereaved families crucial information about chemicals they were exposed to at Samsung’s computer chip and liquid crystal display factories. Sick workers need access to such data through the government or the courts to apply for workers’ compensation from the state. Without it, government officials commonly reject their cases.

In at least six cases involving 10 workers, the justification for withholding the information was trade secrets. South Korean law bars government agencies from withholding public health and safety-related information because of trade-secrets concerns, but there are no penalties for violations.

‘Chaebol’

SAMSUNG no longer omits lists of chemicals

corporate conglomerates, that powered South Korea’s rapid industrialization after the 1950 to 1953 Korean War.

Disclosure

In this April 22 photo, a man looks at boards showing portraits of victims who were former employees of Samsung semiconductor and LCD factories outside the Samsung buildings in Seoul, South Korea. An Associated Press investigation has found South Korean authorities have, at Samsung’s request, repeatedly withheld crucial information about the chemicals that workers were exposed to at its computer chip and liquid crystal display factories. Workers who have fallen ill due to the chemicals have the right to access such data so they can apply for workers’ compensation from the state. Without this information, government officials commonly reject their cases. AP

used on production lines from reports on workplace safety, as it did in Hwang Yu-mi’s case. But officials have withheld details about exposure levels and how the company’s chemicals are managed.

“Our fight is often against trade secrets. Any contents that may not work in Samsung’s favor were deleted as trade secrets,” said Lim Ja-woon, a lawyer who has represented 15 sick Samsung workers.

Lim’s clients have been unable to see full, third-party reports on inspections of the factories and have accessed only excerpts of some independent inspections

in some court rulings, he said. Samsung says it has never “intentionally” blocked workers from accessing information and that it is transparent about all chemicals it is required to disclose to the government.

It said in a statement that there was no case where information disclosure was “illegally prevented.”

“We have a right to protec t our information from going to a third party,” Baik Soo-ha, Samsung Electronics vice president, told the AP. Government policies have generally favored Samsung and other chaebols, or

OFFICIALS say corporate interests take priority, evaluating trade secrets claims is difficult, and they fear being sued for sharing data against a company’s will.

“We have to keep secrets that belong to our clients,” said Yang Won-baek, of the Korea Occupational Safety and Health Agency, or Kosha.

Samsung is by far South Korea’s biggest company, with about 100,000 workers. It has dominated memory-chip makers since the early 1990s, but that success involves use of toxic and often carcinogenic chemicals, such as arsenic, acetone, methane, sulfuric acid and heavy metals, such as lead, well-known risks in the production of semiconductors, mobile phones and LCDs. The worker-safety group Banolim, or SHARPS in English, has documented more than 200 cases of serious illnesses, including leukemia, lupus, lymphoma and multiple sclerosis, among former Samsung semiconductor and LCD workers. Seventysix have died, most in their 20s and 30s.

Worker-safety advocates want South Korea’s courts and government to more flexibly interpret links between workplace conditions and diseases, since the exact causes of many of the factory workers’ ailments are unknown even to the medical community. They also want thorough disclosure of workplace hazards. AP

Thursday, August 11, 2016

A9

Australian online census shut down by cyber attacks

C

A NBERR A , Australia— Australia’s first attempt to conduct a census online was in disarray after several cyberattacks and a hardware failure led to the web site being shut down, officials said on Wednesday.

T he Au st ra l i a n Bu reau of Statistics shut down the site to protect data on Tuesday night, shortly after a blocking shield failed to stop traffic from a fourth denial-of-service attack that came from somewhere overseas, the government said.

Prime Minister Malcolm Turnbull said the Bureau of Statistics shut down the site “out of an abundance of caution” and would be reopen it once the bureau, government-security agency Australian Signals Directorate and the systems provider IBM were confident that it was safe from cyberattack.

“I want to assure Australians that the unequivocal advice we have received...is that their Australian census data is safe, it has not been compromised,” Turnbull told reporters.

The bureau’s chief statistician, David Kalisch, said he decided to shut down the site after the blocking failure led to an overloaded router breaking down, potentially making data vulnerable to hacking during a peak period, and the performance monitoring system “throwing up some queries to us that we needed to investigate.”

Special Adviser to the Prime M i n i s t e r on C y b e r S e c u r it y Alastair MacGibbon said, while

2.33M The number of Australians who managed to access an online access site before it was shut down by cyber attacks

government agencies routinely weather such cyberattacks without disruption, the bureau of statistics was the victim of a conf luence of events. “There were a series of events that only by lining them up end-on-end led to the unfortunate circumstances of last night,” MacGibbon said.

The opposition blamed underfunding for the bureau for the failure, saying it would reduce responses to the census and compromise the results.

“This has been the worst-run census in Australian history and one of the worst informationtechnology debacles Australia has ever seen,” opposition lawmaker Andrew Leigh said. The bureau of statistics said 2.33 million Australians, including Turnbull, managed to access the site on Tuesday before it was shut down. Australia’s Privacy Commissioner Timothy Pilgrim said in a statement he was investigating the cyber attack “to ensure that no personal information has been compromised.” Australian security officials were attempting to determine the source of the attacks, officials said. AP

Scottish leader reaches out to Germany in bid to stay in EU

B

ERLIN—The head of the Scottish government has reached out to Germany, the European Union’s (EU) most populous member, as she tries to keep Scotland in the bloc—and is arguing that Scotland should be able to remain part of the EU without leaving the United Kingdom.

Scottish First Minister Nicola Sturgeon told German broadcaster ARD that “because we are in unprecedented circumstances, we should be prepared to think about unprecedented solutions.

And that’s the spirit that I will have in any discussions.”

The UK, as a whole—which includes England, Scotland, Wales and Northern Ireland—voted narrowly to leave the EU in

a June 23 referendum, but voters in Scotland voted by a wide margin to remain in the 28-nation bloc. “I would have thought it was very positive for the wider EU for a part of the UK, if not the whole of the UK, to want to stay and continue to be part of the European family of nations,” Sturgeon said on Tuesday.

The Scottish leader, who already has traveled to Brussels to press the same argument, met in Berlin on Tuesday with Germany’s Deputy Foreign Minister Michael Roth. He is responsible for European issues at the German Foreign Ministry.

Sturgeon reiterated her stance that a new referendum on Scottish independence from the UK remains “one option” for Scotland to stay in the bloc. AP

A10 Thursday, August 11, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

President to name, shame tax cheats

T

he Bureau of Internal Revenue (BIR) earned its reputation as one of the most corrupt government agencies because, for the longest time, it has been a center of dishonest practices. But the evil of corruption in government always comes in pairs. As an old saw goes, “it takes two to tango.” Ironically, bribe-givers see nothing wrong when they offer grease money to evade paying correct taxes. In their eyes, only those who receive the bribes are corrupt.

It’s time to stop the charade. We, the Filipino people, must take our share of the blame for our role in creating an execrable agency.

President Duterte knows that the seducer is the evil one. That’s why he called tax evaders criminals “who are deceiving the Republic of the Philippines.” And the President will call the police to go after tax cheats he will name and shame.

The President warned suspected tax evaders to pay their correct taxes or they will be humiliated in public and subjected to police visit, much like “Oplan Tokhang,” a campaign launched by the Philippine National Police to stop the drug menace in the country. Here’s the good news: The President promised honest taxpayers there would no longer be any harassment from the BIR. Mr. Duterte said he would ask Internal Revenue Commissioner Caesar R. Dulay to provide him a list of suspected tax evaders who will be visited by the police. And all suspected tax evaders will be on the watch list of the Bureau of Immigration to restrict their right to travel. The President warned: “If you’re rich and you don’t pay the correct taxes, you cannot travel anymore. I will tell the immigration to stop you because you committed a violation. I will order the BIR to file cases and, once it’s pending in court, the freedom of movement is restricted.” He said those facing criminal charges are not allowed to travel, and suspected tax evaders should not be treated differently.

There’s no official estimate of the government’s foregone revenues from tax evasion. However, former Internal Revenue Commissioner Kim Jacinto-Henares has been quoted as saying 90 percent of Filipino professionals are tax evaders. Currently, there are around 1.7 million self-employed professionals in the country. If Henares is correct in saying each of them should be paying P100,000 in taxes on the average, then foregone revenues from tax evasion amounts to hundreds of billions of pesos annually. And that’s only from dishonest doctors, lawyers, accountants, engineers, architects, entrepreneurs, boxers and entertainers, among others.

President Duterte said his administration needs the foregone revenues from tax evasion to fund the billions of pesos required to build massive rehabilitation centers for some 3 million drug dependents nationwide. Unless the country is rid of illegal drugs, the President said the Philippines could become a narcotics state. He sees the millions of drug addicts as potential criminals or drug pushers, because drug abuse is a very expensive habit to maintain. If we want to end drug-related crimes in this country, we should give our full support to Mr. Duterte’s antidrugs campaign. We can help lift an enormous burden on society just by paying the correct taxes.

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How market predictions fail John Mangun

OUTSIDE THE BOX

D

uring the past 20 years, some 3,000 columns about the stock markets in general, and the Philippine Stock Exchange (PSE) in particular, have been pounded out on my computer keyboard. I have seen the PSE index go from 500 to 3,000 back to 1,000 and, recently, to 8,000.

Most of the time, I have been generally positive on the upside trend of the local market...except when I wasn’t. But the fact is that the PSE has been going higher since the low in 1991. I have often been criticized for being too “optimistic” about the market. However, bear in mind that the general medium- and long-term analysis for public consumption may be slightly different than the shortterm considerations that people actually pay me for.

The one concept I have learned in the last 45 years of watching the markets is that “anticipation” is the killer. You watch a basketball player who is at exactly the right spot to block a fantastic shot and you think what a genius for anticipating where the shooter would be. But, the truth is, the blocker instinctively reacted to how the shooter was moving. If the player anticipated where the shot was coming from, and then blocked it,

Outlier Siegfred Bueno Mison, Esq.

THE PATRIOT

A

n outlier is defined as someone or something differing from all other members of a particular group or set, or a statistical observation that is markedly different in value from the others of the sample. In his best-selling book Outliers, author Malcolm Gladwell says that it takes roughly 10,000 hours of practice to achieve mastery in a field.

In a study of violin students, Gladwell discovered that 5-year-old violinists roughly logged in the same number of practice hours. As these virtuoso artists mature, the practice hours logged in determined the level of skill achieved by each violinist.

The study showed that by age 20, the elite performers averaged more than 10,000 hours of practice each, while the less able performers only averaged about 4,000 hours of practice. Gladwell theorized that since the elite had more than double the practice hours of the less capable performers, natural talent by itself does not take you to the level of an outlier. Practice makes perfect.

Most of us do not know that Microsoft founder Bill Gates and Paul Allen had thousands of hours of programming practice prior to founding Microsoft. The two cofounders

covertly had access to their private school’s computer in Seattle, where they became addicted to programming. As a teenager, Gates fed his programming addiction by sneaking out of his parents’ home to use the computer at the Lakeside school and at the University of Washington.

Gladwell theorized that Gates and Allen became computer geniuses not by birth but by practice, as they both acquired their 10,000 hours of programming before they founded Microsoft in 1975. Practice leads to improvement.

To a certain extent, heroes are outliers as they have done something extraordinary. They have the tenacity to do something daring, something different. Both outliers and heroes stand out from the crowd.

A product of Western Mindanao State University, prosecutor Dar-

there was probably more luck involved than we would like to admit.

The problem is that most “predictors” always make the same assumptions based on the same analysis.

When I coached teenage basketball there was a player who had an earthshattering 80-percent three-point shooting from a particular spot on the court. When the other teams figured that out, they would tripleteam him to block the shot. That left an easy pass for an easy two points.

The stock market rarely does what you think it will do.

Last time I wrote about two incredibly bad stock-market forecasts from two incredibly qualified market players. When those predictions failed, two other experts came on board.

Peter Schiff, one of the most wellknown American stockbrokers, forecast the Dow Jones index going down to 2,000 and gold going to $5,000.

American stock-market analyst Robert R. Prechter Jr.—the guru of financial forecasts using the Elliott Wave Principle—has been calling for

lene Pajarito is known to have secured the very first sex-trafficking conviction in 2005 and the first labor-trafficking conviction in 2011.

Aside from numerous awards here in the country, she is a recipient of the US State Department’s Ten Trafficking in Person (TIP) Hero Award and the only Filipino recognized as a TIP Hero in America.

In 2015 she was appointed as the first executive director of the InterAgency Council Against Trafficking in the Philippines.

But Darlene is far from being an overnight sensation. It took her tons of investigative and prosecutorial practice, perhaps more than the Gladwell-prescribed 10,000 hours, to achieve the recognition of being the No. 1 human-trafficking fighter in the country. Way back in 2004, as an inexperienced prosecutor, she handled her first trafficking case, which eventually went to the Supreme Court. Republic Act 9208, the applicable antitrafficking law then, was untested. However, Darlene managed to secure a favorable decision, which became a precedent in the Philippines with regard to trafficking cases. She could not have won the case without exerting the long hours of investigation, interview and evidence-gathering.

After successfully prosecuting that first case, Darlene became devoted to the cause of antitrafficking and has secured more convictions than any other prosecutor in the

a stock-market collapse to 1,000 for several years even as recently as 2015.

Sure, maybe eventually everyone is going to be correct, just like “On a long enough time line, the survival rate for everyone drops to zero” (Chuck Palahniuk, Fight Club). But that will not make you any money.

The smartest and most profitable stock-market forecast is this: “If the price does not go up, it will go down.”

You may think that is silly but ask the shareholders of PLDT Inc. (no longer Philippine Long Distance Telephone Co.) that saw a 7-percent drop last week. Why? Because for five consecutive weeks, the stock price was unable to move above P2,150.

Every stock-price prediction should include “If the current trend continues.” That way an investor is instantly ready to react to a change in the trend.

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.

Philippines. When prosecuting a trafficking case, she actually goes to the scene of the crime, such as the borders of Western Mindanao and neighboring Malaysia and Indonesia, and even to the houses of the suspects, victims and witnesses, with little regard to her personal safety. Constant practice and handling of trafficking cases has made Darlene an expert in this field.

Gladwell concludes that the conditions and circumstances surrounding our lives are the significant influential factors that determine our success, not our inner ability or talent. There are no born outliers; they are made. Heroes are not born great; they achieve great things through practice and as a result of some favorable alignment in the universe.

When Darlene’s antitrafficking work began in 2004, the Philippines was then in the US State Department Tier 2 Watch List. Ten years after, or in 2014, the Philippines was elevated to Tier 2 status. Early this year, the Philippines was listed as a Tier 1 country largely due to the efforts of border-control officers, investigators and prosecutors like Darlene. Due to the confluence of events in the country and having a heart to protect the rights of women and children, Atty.

Darlene Pajarito became an outlier, a hero and a human trafficker’s worst nightmare.

For questions and comments, e-mail me at sbmison@gmail.com

Opinion BusinessMirror

opinion@businessmirror.com.ph

Why the mining industry To burn with zeal is in such a mess Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

Val A. Villanueva

Businesswise

I

am one of those who believe that the mining industry, done properly in accordance with national environmental laws, could be a catalyst for the country’s sustainable economic growth.

It is with this premise that I sought the Chamber of Mines of the Philippines (COMP) for hard data on how much the industry has already contributed to the national coffers, and how it has supported the communities where its member-firms operate.

I was told by a friend in the industry to coordinate with a certain May Anne Cacdac of COMP for me to have a complete grasp of the ins and outs of the much maligned industry.

Instead of being enlightened, I came to know firsthand why the industry has been losing the perception war.

Requesting to gain access to salient facts and figures to counter the hotly emotional handle of die-hard environmentalists against the country’s mining industry, I got the feeling that this lady doesn’t have what it takes to be in the forefront of the industry’s communications platform.

“I don’t have my laptop today, sir,” Ms. Cacdac told me last Friday.

When I told her that I write on the weekend prior to the publication of my Thursday column, she replied that she could send me the data I needed on Monday yet. I said I was willing to wait. Come Monday noon, after receiving no e-mail from her, I followed up my request. I was told that she was just in a meeting and would send the necessary materials thereafter. Five days have come and gone with no courtesy explanation or update from Ms. Cacdac. It was as if our conversation never happened.

Now I know why the industry is in such a mess.

I learned that this COMP spokesman did a background check on me, to verify whether I was friendly to the industry. For a public-information officer, what she did was rude, frustrating and irresponsible. She is the human form of the country’s mining industry, and should have been able to effectively connect with anyone, either through the media or in person. As a communicator acting in behalf of the industry, she should be able to provide access to both allies and foes. How else can you win “enemies” over to see the benefit of keeping the mining industry active and healthy?

COMP is so used to information spoon-feeding, and issuing press releases and column feeds to various media entities. Instead of highlighting what the industry has positively done, it unleashed a demolition campaign against Environment Secretary Regina Paz L. Lopez, an unwise and dangerous tack to execute.

Providing honest and verifiable information to the people through the media is the right thing to do.

COMP’s inept communications initiatives run by nincompoops is a prescription for disaster.

What a pity! The Philippines is just like a poor man sitting on a pot of gold. It is estimated that the country could extract over $1.4 trillion worth of minerals from identified mining areas. But this is much harder to attain now under Duterte’s administration, which believes the Philippines could live without these expected revenues from the industry.

As it is, in one fell swoop, the government has shut down several mining companies in Zambales without a thorough vetting process. It has been documented that those responsible for environmental degradation in that area are seven Chinese companies that had gouged out the area, using nickel mining as pretext.

If this is, indeed, what happened, then the responsible mining companies that have been suspended were

W

ait for the Lord; He hears the afflicted and draws him out of the pit, putting a new song in his mouth (Psalm 40:2, 3, 4, 18). Following Jesus means the challenge of a life of contradiction: attaining joy that is borne of pain and peace that comes through division (Luke 12:49-53).

Lord, come to my aid not the cause of the large-scale environmental ruin in that province.

Last year the Office of the Ombudsman has found probable cause to charge Zambales Gov. Hermogenes E. Ebdane Jr. with graft and usurpation of duty in connection with the alleged anomalous issuance of permits to a small-scale mining firm.

The permits allegedly paved the way for the illegal hauling and shipping of chromite, valued at more than P211 million, from the province.

In a 32-page resolution, the Ombudsman Special Panel for the Environment concluded that Ebdane had usurped the functions of the Provincial Mining Regulatory Board by issuing several Small-Scale Mining Permits to Geoking Asia Mining Corp. to haul chromite from the site of the Coto Chromite Project in Sitio Coto in Masinloc, Zambales, despite the existing agreement between the provincial government and largescale mining company Consolidated Mines Inc. The resolution said Ebdane’s action constitutes violation of Section 3 (e) of Republic Act (RA) 3019, which prohibits government officials from using their positions to give unwarranted benefits, advantage or preference to private party, as well as Usurpation of Official Functions under Article 177 of the Revised Penal Code.

Aside from Ebdane, also indicted for Theft of Minerals under Section 103 of RA 7942, or the Philippine Mining Act of 1995, were Gojo, Eciso, Cheng and three other individuals from Geoking. Also last year, in the aftermath of Typhoon Lando, the local government of Zambales required mining firms operating in the province to donate up to P2 million each to rehabilitate damaged areas or face the prospect of a moratorium on all forms of mining.

In a meeting called by the Provincial Engineering Office presided by Engr. Domingo Mariano on November 10, 2015, which was attended by representatives of LnL Archipelago Minerals Inc., Benguet Corp Nickel Mines Inc., Eramen Minerals Inc. and Zambales Diversified Metals Corp., the mining firms were asked to cough up the amount intended to rehabilitate the towns of Santa Cruz and Candelaria, which were devastated by Lando.

Insiders revealed that the Sanggunian told the mining companies the “donation” was only a request, but it will be forced to issue a moratorium if the request would not be granted.

The moratorium, according to insiders is meant to appease antimining advocates who had accused the local government units of being “in the pocket” of these mining companies and for “media control.”

For local media, Mariano requested for monetary help amounting to P52,500 to cover live local radio coverage, as per the November 9, 2015, billing statement from Zambales Mix FM Media Advertising System, which was addressed to the governor. For national media, Mariano requested reimbursement (or payment?) amounting to P1.350 million, which was allegedly paid to a public-relations group hired to do media liaison with top broadsheets, such as The Philippine Daily Inquirer and Manila Standard, to obtain positive news or tone down negative ones related to mining operations in Santa Cruz.

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

Full of thanksgiving for his past deliverance, the psalmist begs God for further help. He has waited for the Lord before, standing patiently until God came to his assistance after hearing his cry. God is pictured stooping and reaching down in rder to draw him up and rescue him from the pit, recalling a scene from Jeremiah (38:6) who was thrown down by his enemies into a cistern deep in the mud. Here, the pit and the miry swamp both connote death or whatever diminishes life, like sickness or misfortune. The psalmist experienced being rescued by the Lord

from the pit of destruction and from the mud of the swamp; instead of falling further into the pit and sinking deeper into the mud, the Lord placed him on a secure rock that gave him safe footing.

This rescue is celebrated with a new song of praise and gratitude to the Lord. But the song also serves as a testimony to others for the loving kindness of the Lord for the afflicted and for the divine power manifested in his favor. In awe, those who hear of it cannot but also trust in the Lord.

The psalmist himself, knowing that he is poor and afflicted and has nobody else to turn to but the Lord,

Thursday, August 11, 2016 A11

believes that the Lord thinks of him and does not forget him. Convinced that God’s past favors guarantee God’s help for the present and even for the future, he now speaks to God directly proclaiming his faith that the Lord is his help and deliverer, and calling on Him not to delay and to come to his aid.

Burning with zeal

IN the gospel, Jesus understands His coming as like a dramatic prophetic visitation: to cast fore on the Earth, meaning to bring severe judgment, just like the prophet Elijah did (2 Kings 1:10-14). He is burning with zeal to see the fire already blazing and purifying the Earth; He is eagerly waiting to be baptized with the baptism of suffering and death, through which His mission will be accomplished. As He is ready to embrace it, He is also in anguish because he dreads it.

The keynote that applies the words of Jesus to all who want to follow Him is the issue of division.

As a man of peace, Jesus proclaims a message that is plainly divisive. His teachings cut to the core of prevailing religious thoughts and customs; its demands on people challenge them to the bottom of their being, insist-

ing that commitment to His gospel must take precedence over any other loyalty. Thus, the graphic division even in the family, as fidelity to Him can tear apart those naturally bonded together. Those who are able to live up to His teaching will be ostracized by those who do not or cannot or will not. The animosity and antagonism brought on by His teaching would in fact result in His own death.

Alálaong bagá, Jesus’ passion and death were the baptism He was burning with zeal to see accomplished, because it would be the fire to purify the Earth. It is the blazing flame that will separate those who accept Him from those who do not, those who keep the course from those who give up the faith and buckle down before the radical demands of discipleship. The cost of discipleship makes us realize that, by ourselves, we cannot manage it. We need assistance. And the Lord it is, who thinks of us and comes to our aid, stooping down to draw us out of the pit we often find ourselves in.

Join me in meditating on the Word of God

every Sunday, 5 to 6 a.m. on dwIZ 882, or by audio-streaming on www.dwiz882.com.

Holding company and local business tax Atty. Irwin C. Nidea Jr.

Tax law for business

I

S a holding company subject to local business tax? Local government units (LGUs) are prohibited from imposing income tax, except when it is on banks and financial institutions. A holding company is not a banking institution. But can it be considered a financial institution that is liable for local business tax?

In the case of Michigan Holdings (Court of Tax Appeals [CTA] Case 1093, June 17, 2015) the court held that the local government court (LGC) defines “banks and other financial institutions” to include nonbank financial intermediaries, lending investors, finance and investment companies, pawnshops, money shops, insurance companies, stock markets, stock brokers and dealers in securities and foreign exchange. This enumeration appears to be exclusive of other entities.

Nowhere in the entirety of the definition is a holding company mentioned.

If the business of a holding company is in the same class as that of a bank or other financial institutions, the court held that the law could

simply have included holding companies in the same vein as banks and other financial institutions, instead of placing them all by themselves in a separate provision. Since holding companies, exclusively, were placed in a separate section, shows that they comprise a category distinct from the class of banks and other financial institutions.

The court also added that taxing holding companies on its dividend income shows a deliberate intent to circumvent the prohibition that the taxing powers of LGUs shall not extend to the levy of income tax, except on banks and other financial institutions.

This is the settled rule until the

recent case of Fernandez Holdings, Inc. (CTA AC 133, July 21, 2016) came along. In this case, the CTA held that a holding company’s act of investing in equity securities and holding of shares of stocks of another company may be considered an activity of a financial intermediary whose dividend income may be subjected to local business tax.

Like in the Michigan case, the company is registered with the Security Exchange Commission as a holding company.

However, the CTA said the purpose clause of the Articles of Incorporation of the company is extensive enough to cover most of the principal functions of a financial intermediary. It is worth noting that the purpose clause of Michigan and Fernandez Holdings are similarly worded.

The court added that, while the purpose for which the company was incorporated appears to set a qualification that it cannot act as an investment company or a securities broker or dealer nor exercise the functions of a trust corporation, the same cannot prevail over the real nature of the transaction of a holding company, which is mainly investing or placement of funds. The company according to the court cannot hide under the mantle of the qualifying provision as it is clearly a nonbank financial intermediary.

The court in Fernandez Holdings did

not squarely destroy the argument that was upheld in Michigan, that since holding companies, exclusively, were placed in a separate section, shows that they comprise a category distinct from the class of banks and other financial institutions. Instead, it focused on how the company derives its income. The act of investing in equity securities, holding of assets consisting of shares of stocks and placement of funds on a regular and recurring basis affirms the conclusion that the company is a nonbank financial intermediary whose income may be subjected to local business tax.

The Fernandez Holdings case, although more recent, was decided by a division of the CTA, while the Michigan case was decided by the CTA en banc.

These are conflicting decisions that the court will hopefully resolve in unison.

The author is a partner of Du-Baladad and Associates Law Offices (BDB Law), a member-firm of World Tax Services (WTS) Alliance.

The article is for general information only and is not intended, nor should be construed, as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at irwin.c.nideajr@ bdblaw.com.ph or call 403-2001 local 330.

The trouble with doing business in the Philippines Ariel F. Nepomuceno

DECISION TIME

I

n the inaugural speech by our President, he ordered all his department secretaries and heads of agencies to refrain from changing the rules, contracts and projects that were already approved previously. He also emphasized the need to reduce the requirements and the processing of all applications from submission to release. The President mandated the removal of all redundant requirements and that the compliance with one department shall be accepted as sufficient for all.

This message was emphatically repeated in his State of the Nation Address when he promised reforms to ensure competitiveness and promote ease of doing business. These policy pronouncements were hailed by the investment community and, of course, the general public, who are awaiting genuine change in their daily lives.

Ease of doing business parameters

But what exactly do we mean by “ease of doing business?” Ease of business is actually an index

published by the World Bank Group.

When a country ranking is high, it indicates that an individual or entrepreneur will not find it difficult establishing and running a business when complying with local rules and regulations. There are essentially 11 domains in the usual life cycle of a business. For 2016, the World Bank included the following parameters: starting a business, dealing with construction permits, getting electricity, property registration, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing

For direct foreign investments to increase and, thereby, create more jobs and usher in economic prosperity for the bulk of our populace, one of the most critical decision points is obviously the presence of a business environment that promotes a good licensing system, a fair-tax regime and an efficient government bureaucracy that promotes inclusive progress.

contracts and resolving insolvency.

From a ranking of 97 in 2015, the Philippines is down to 103 in 2016.

The biggest changes in rank are reflected in starting a business, construction permits, getting credit and resolving insolvency.

End the red tape and move forward

SO when the President mentioned his abhorrence for red tape, inaction and inefficiency in the regulatory space, it only means that it is time for business to be enabled and empowered by government and not hindered nor blocked. For direct foreign investments to increase and, thereby, create more jobs and usher in economic prosperity for the bulk of our populace, one of the most critical decision points is obviously the

presence of a business environment that promotes a good licensing system, a fair-tax regime and an efficient government bureaucracy that promotes inclusive progress.

Add to these low regulatory risks, a predictable legal system and framework where contracts are respected and a level playing field fostered. As federalism is one of the key cornerstones of the current administration, it would be highly advisable to tackle inconsistencies between local and national government policies and how these would impact on the ease of doing business. The review of the Philippine Constitution and some of its antiquated economic provisions is an excellent opportunity to truly assess whether our legal milieu supports the promotion and protection of investments.

The perfect timing is now. Asean integration is happening and our competitiveness rankings have increased consistently through the years . Likewise, we have seen very good marks in global good governance and corruption indexes and we should leverage on the momentum that we are experiencing right now. A new government always brings hope. This renewed optimism should sustain us in moving forward and upward.

BusinessMirror

Federal Philippines P rising resident Duterte, in his first State of the Nation Address (Sona); Senate President Aquilino L. Pimentel III, in his inaugural speech; and Speaker Pantaleon D. Alvarez, in his acceptance speech, made reference to a federal form of government to boost the Philippines’s bid for inclusive economic growth. Alvarez outlined that “Federalism will allow the autonomous regions to realize their full potentials as self-governing units that are directly answerable to their respective constituents.”

We are aware that there are several “models” of federal states, such as Canada, Germany, Switzerland, the United States, Malaysia and many more; and that there are forms of parliamentary systems with strong “presidents,” like France (Mr. Duterte referred to that in his Sona, too).

There is no doubt that much more information is needed on the various forms of federalism, and what federalism will do to the way business is done, interaction with government is done on a national and local level, and how federalism will affect the attractiveness of the Philippines as a destination for foreign investment.

It is in this context that the BusinessMirror, the leading business paper in the country; and the European Chamber of Commerce of the Philippines (ECCP), being the bridge between European business and Philippine business—in both directions— since 1978, have partnered to start the dialogue/discussion/ information process on federalism/on “models” of federalism/on best practices and on “bad” practices, with the aim that there will be better understanding where we are heading, what timeframe is realistic, and to what extent business will have to adjust.

Federalism/Presidential Parliamentary System/ Decentralization: What Will It Do to Business 23 August 2016 | 8:30 a.m.-12 nn | Marriott Manila

PROGRAM 7:30-9:00 a.m. Registration & Breakfast 9:00-9:10 a.m. Welcome and Opening Remarks BusinessMirror/ECCP 9:10-9:30 a.m. Keynote Address Rep. Pantaleon D. Alvarez Speaker of the House of Representatives 9:30-9:45 a.m. Case Study—Federal Republic of Germany Benedikt Seemann Head

Konrad Adenauer Foundation 9:45-10:00 a.m. Case Study—Canada Julian Payne

President Canadian Chamber of Commerce of the Philippines Laurent Le Godec 10:00-10:15 a.m. Case Study—France Deputy Head of Mission Embassy of France to the

Philippines 10:15-10:30 a.m. The Philippine Scenario Aquilino Q. Pimentel Jr.

Former Senate President 10:30-10:45 a.m. The Philippine Scenario Rep. Alfredo B. Benitez House of Representatives 10:30-11:30 a.m. Panel Discussion/Open Forum Teddy Boy Locsin For inquiries/registration, contact Julie Coronado at 845-1324 or e-mail Julie.coronado@eccp.com