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Friday, August 12, 2016 Vol. 11 No. 307

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SEMIRARA, SAGITTARIUS, CENTURY ALSO FACE CANCELLATION OF ECC

Creative industry, tourism and local devt in S. Korea

Lopez campaign claims scalp of 2 more miners

INSIDE

By Jonathan L. Mayuga

nvironment Secretary Regina Paz L. Lopez continues to add teeth to her campaign versus environmentally destructive business operations, this time halting the operations of two more miners and threatening to cancel the environmental compliance certificate (ECC) of three other firms.

HOP on Top

Sports

Fernando T. Aldaba and Ser Percival K. Peña-Reyes

@jonlmayuga

LOPEZ: “My commitment is to the welfare of the people.”

EAGLE WATCH

oday South Korea is among the developed economies of East Asia, with a percapita income of about $34,336 (PPP). In the 1960s the Philippine economy was virtually on a par with South Korea, with both countries recovering from their war years, although the latter had just come from a more recent bloody conflict with its northern counterpart in the 1950s. (The Philippine war years happened earlier in the 1940s.)

Lopez announced two more mining operations in Eastern Samar have been suspended by the Department of Environment and Natural Resources (DENR). The operations of Mount Sinai Mining Continued on A2

rio olympics medal tally

Continued on A11

1 United States 2 China 3 Japan 4 Australia 5 Hungary 6 Russia 7 South Korea 8 Italy 9 Great Britain 10 France 11 Kazakhstan 12 Thailand 13 Germany 14 Sweden 15 Netherlands 16 Belgium 17 Brazil 17 Colombia 17 Slovenia 17 Vietnam 21 Chinese Taipei 22 Spain 22 Greece 22 Switzerland 25 Argentina 25 Croatia 25 IOA 25 Kosovo 29 North Korea 30 Ukraine 31 Indonesia 31 New Zealand 31 South Afric 34 Canada 35 Georgia 36 Philippines

G 11 10 6 5 5 4 4 3 3 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0

S 11 5 1 2 1 7 2 6 3 3 2 1 2 2 1 1 1 1 1 1 0 0 0 0 0 0 0 0 2 2 2 2 2 1 1 1

B 10 8 11 5 1 4 3 2 6 1 3 1 1 0 2 1 0 0 0 0 2 1 1 1 0 0 0 0 2 1 0 0 0 5 1 0

T 32 23 18 12 7 15 9 11 12 6 7 4 4 3 4 3 2 2 2 2 3 2 2 2 1 1 1 1 4 3 2 2 2 6 2 1

China’s video-game biz a bright spot even with no PokÉmon

HERO’S WELCOME Hidilyn Diaz, 2016 Summer Olympics silver medalist for weightlifting, kisses her mother Emelita as her father Eduardo Sr. holds her medal, after she arrived at the Ninoy Aquino International Airport on Thursday. Also in photo is William Ramirez, chairman of the Philippine Sports Commission. Story on A12. Nonie Reyes

BSP concedes inflation to miss target; forecast at 1.8% in Aug By Bianca Cuaresma

@BcuaresmaBM

he Bangko Sentral ng Pilipinas (BSP) conceded on Thursday that inflation would most likely miss its annual target range for the second consecutive year this 2016. The pronouncement was made in the news briefing following the fifth

PESO exchange rates n US 46.7770

monetary-policy meeting for the year, where the central bank maintained all key policy rates and instruments in their current levels. “The Monetary Board’s decision is based on its assessment that the inflation environment remains manageable. Latest forecasts continue to indicate that average inflation is likely to settle slightly below the 3-percent plus/mi-

nus 1-percentage-point target range in 2016 and rise toward the midpoint of the target range in 2017 and 2018,” BSP chief Amando M. Tetangco Jr. said in a statement following the meeting. Central bank Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo said the BSP’s forecast was scaled down to 1.8 percent in its August See “Inflation,” A2

f you want an example of China’s rising consumer class, take a look at the burgeoning demand to play video games. Sales will jump an average 7.4 percent a year from 2016 to 2020, according to PricewaterhouseCoopers Llp. (PwC). That’s higher than the 4.8-percent rate forecast for the industry worldwide, PwC said in its global entertainment and media outlook. While in absolute terms games contribute a tiny sliver of GDP, they’re part of the bigger tectonic shift led by consumers who are cushioning the drag from a factory slowdown. China’s gaming population was an estimated 534 million players last year—that’s one out of every 14 humans. Boosting the world’s third-largest video-game market—after the United States and Japan—are sales of streaming video games and e-sports competitions this year, PwC said. In other words, gaming is increasingly social, not solo. The rising popularity of competitions helps the appeal of both PC and mobile games in China, which boosts advertising revenue and will enlarge the “fan economy,” PwC analysts said in the report. Games should get a lift from government policies that favor boosting innovation, as well as generous spending for state-run firms to boost wireless network speeds, Wilson Chow, the Shenzhen-based industry leader for tech, media and telecom in China and Hong Kong at PwC, said in an interview. Tencent Holdings Ltd. also will speed up the development of the country’s game industry, he said. China’s largest Internet company is leading an $8.6-billion acquisition of Finnish gamemaker Supercell Oy. By 2020, China’s gaming sales will climb to $12.85 billion, up from $8.98 billion last year, PwC estimates, outpacing a global revenue increase to $90.07 billion from $71.27 billion in 2015. Shanghai, Beijing and Guangdong are the main hubs of video-game publication, according to PwC. Bloomberg News

n japan 0.4619 n UK 60.8709 n HK 6.0313 n CHINA 7.0447 n singapore 34.8718 n australia 36.0276 n EU 52.2920 n SAUDI arabia 12.4736

Source: BSP (11 August 2016 )

BMReports BusinessMirror

A2 Friday, August 12, 2016

www.businessmirror.com.ph

Lopez campaign claims scalp of 2 more miners Continued from A1

Exploration and Development Corp. and Emir Mineral Resources Corp. on Homonhon Island were stopped by the DENR for failing to meet environmental standards. Mount Sinai, a chromite-mining company, produced 50,000 metric tons (MT) of chromite last year, while Emir produced 150,000 MT of nickel ore. Both companies export their ores to China. Environment Senior Undersecretary Leo L. Jasareno, who also heads the DENR’s Mining Audit Team, said the two companies have been found to cause water pollution in the coastal waters around the island. The suspension of the two mining companies brought to nine the total number of companies whose mining operation were stopped since Lopez took over the helm of the DENR.

Who’s next

Lopez extended her reach to the property industry, as she ordered Century Communities Corp. to

Inflation. . . Continued from A1

assessment, from the 2-percent forecast in its July 23 assessment. This is below the central bank’s target range for the year at 2 percent to 4 percent. Last year the central bank missed its set target range for the year, snapping its six consecutive years of withintarget inflation and warranting them to issue an open letter to the President, explaining why they

prove its Nova by Century housing project within the La Mesa watershed in Quezon City has not violated certain conditions of its ECC. Lopez also ordered the D.M. Consunji Inc. (DMCI)-led Semirara Mining and Power Corp. (SMPC), the country’s largest coal producer, to “shape up” and address the environmental problems caused by its operation on Semirara Island in Antique Province, or lose its ECC. Lopez, during a news conference, also said Sagitarrius Mines Inc.’s Tampakan Copper-Gold Project could also lose its environmental clearance. All three companies were issued show cause orders by the DENR and asked to explain why their ECCs should not be canceled for various violations. Lopez said these companies should meet the conditions set in their ECCs, otherwise, she would order their cancellation, effectively stopping their projects.

The Semirara coal mine has been the

subject of numerous complaints by residents of Semirara Island. Semirara Island has a total land area of 5,000 hectares, where the company extracts low-grade coal. “People on Semirara Island are suffering. My commitment is to the welfare of the people,” she said. “The problem here with Semirara is that they extract the coal and dump it on the waters.” According to Lopez, local residents are not benefiting from the billions of profits of Semirara mining. A resident told reporters during the news conference that the operation of the coal mine has affected not only the mangroves, but has also destroyed corals in surrounding areas. “The natural resources of our country should benefit the people,” Lopez said. Jasareno said Semirara’s open-pit mine is now below sea level, which could endanger the lives of the workers and the residents living on the island. Semirara occupies about 40 hectares, but there is a new expansion

were not able to steer inflation to within target levels for the year. Inflation is at an average of 1.3 percent in the first seven months of the year, with the latest growth of consumer-goods prices hitting 1.9 percent in July. For next year, Guinigundo said while the BSP scaled down its forecast from the June 23 assessment of 3.1 percent in 2017, it is expected to hit the target range at 2.9 percent. For 2018, the BSP kept is forecast of 2.6-percent inflation. The BSP deputy governor said

the still-benign prices of crude oil in the international market and the soft global growth were among the reasons behind the scaled-down forecast. The central bank also considered the impact of the lowerthan-expected June and July inflation of both 1.9 percent in penciling their new assumptions. Guinigundo said upside risks to inflation include possible adjustments in utility rates and possible imposition of taxes on petroleum products—but are not factored in the baseline forecast

‘People are suffering’

area of about 600 hectares in the middle of the island. It is the single major producer of coal in the Philippines. It is currently contributing about 97 percent of Philippine coal production. It also supplies coal to some of the country’s major power plants. The company has several mining operations on Semirara Island.

government,” it added. Semirara shares fell 5.95 percent to P109 after Lopez’s announcement.

‘Not worthy of its Ecc’

“DMCI needs to address the issues and rehabilitate Semirara Island,” he said. In a disclosure to the Philippine Stock Exchange, SMPC said its coal mine complies fully with environmental laws, adding that it has yet to receive a copy of the order. “But we would like to reiterate that SMPC has been fully complying with all relevant laws and regulations,” the company said. “Our mining and environmental protocols also conform with the conditions of our ECCs. We hope that our company will be accorded due process throughout any preand formal audit process of the

The Tampakan Copper-Gold Project, on the other hand, has yet to move forward to commercial operation because of permitting problems. It plans to operate an open-pit mine to extract mineral ores on a massive scale. According to Lopez, Tampakan should not have been given an ECC. Tampakan’s mining tenement also sits in an area where some 3,000 certificate of landownership award (CLOAs) were previously granted to farmers by the Department of Agrarian Reform (DAR). One of the conditions of the ECC issued to Tampakan is to settle the issue with CLOA holders. Lopez said food-production areas, such as those with CLOAs, should be “off limits” to mining. The company has been having a hard time convincing various stakeholders to agree to its plan to

of the central bank. The central bank said the current tame inflation dynamics leave them no reason to change their current monetary-policy stance— which was maintained at 3 percent for the BSP’s overnight reverse repurchase facility. The corresponding interest rates on the overnight lending and deposit facilities were also kept steady. While the reserve requirement ratios (RRR) were, likewise, left unchanged, the consideration of lowering the banks’ RRR is still on the table.

“It is something that is always on the table. It is being studied by the BSP in line with our liquidity management,” he said. Guinigundo added that once the central bank sees that the liquidity floating around has been kept with the BSP and the growth of liquidity is consistent with their price objective then they can consider lowering the banks’ deposit requirement. “Given these considerations, the Monetary Board believes that current monetarypolicy settings remain appropriate,” Tetangco said in the statement.

DMCI answers

operate the mines in the area. Lopez has been vocal against the project, potentially the biggest gold and copper mine in Asia, for the potential damage to the environment that would impact on the people living near the site. The DENR chief also opposes open-pit mining method, which proponents of the Tampakan want to employ in its operation.

Century violating Ecc?

Century, on the other hand, committed numerous violations of the conditions under its ECC, Lopez said. Among other conditions, according to Lopez, the company failed to submit the enhanced environmental monitoring plan for its housing project and failed to submit a copy of the social-development plan for its project. The company also failed to secure favorable endorsement for the project from the DENR and the Manila Waterworks and Sewerage System. She said the housing project would affect 1.2 million residents. “At the same time, increased uncertainty over prospects for growth and monetary-policy action in major advanced economies requires prudence in policy settings. Going forward, the BSP will continue to monitor emerging price and output conditions to ensure price and financial stability conducive to sustained economic growth,” he added. The central bank will be having its next monetary-policy meeting on September 22. This will be the sixth monetary-policy meeting of the BSP for the year.

BMReports BusinessMirror

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DA eyes ₧3B in LBP financing for fish farming technologies By Jasper Emmanuel Y. Arcalas

@arteliterary

he Department of Agriculture (DA) said it may ask the Land Bank of the Philippines (LBP) to bankroll the rollout of fish-farming technologies in Laguna de Bay, which could cost at least P3 billion.

Agriculture Secretary Emmanuel F. Piñol said the DA would need anywhere from P3 billion to P4 billion to implement sustainable fish-farming schemes in the country’s largest freshwater lake. “When you talk of massive fish farming, we are looking at a budget portfolio of P3 billion to P4 billion,” Piñol told the BusinessMirror. Fish pens and cages in Laguna de Bay supply some 36 percent of bangus (milkfish) and tilapia sold in Metro Manila’s wet markets. The closure of fish pens and cages would result in a shortage and an increase in fish prices, Piñol said. Earlier, the DA chief said he was planning to roll out two fish-farming technologies, which were developed abroad, in Laguna de Bay. One would involve establishing

357

The number of registered and unregistered fish-pen owners operating in Laguna de Bay concrete fish tanks, which draw water from 1,200 feet underground using pumps powered by solar energy. The other option would be the development of circular steel-framed Norwegian-type fish cages in different bays around the country. Piñol said they have yet to meet with the affected fishermen in Laguna de Bay in order to craft a relief program. “Our parallel efforts focus on the

distribution of fishing boats. This is how we intend to help fishermen affected by the removal of the fish pens,” Piñol said, referring to the more than 100 fiberglass-reinforced plastic boats the DA turned over to fishermen in Masinloc, Zambales, on Wednesday. In a meeting with the LBP board, Piñol submitted a memorandum urging the bank to provide loans to finance the DA’s projects to support small-scale fishermen in the country. The DA chief is a member of the LBP board. Piñol said he wants the LBP to “relax” its requirements in availing loans, to make it easier for fishermen to access financing. “I asked LBP if there is a way we could relax their stringent requirements for loan availment, because one of the problems of fishpond operators is that they cannot mortgage their fishponds because these are government property,” he said. Aside from Piñol, the LBP board is also made up of other Cabinet members, including Finance Secretary Carlos G. Dominguez, who serves as its chairman, and Agrarian Reform chief Rafael V. Mariano. Piñol vowed to personally endorse to the LBP board the fishermen’s loan applications. The Laguna Lake Development

Authority (LLDA) said almost 13,000 hectares of Laguna de Bay are occupied by fish pens and cages, or 4,000 hectares more than the lake’s 9,000-hectare capacity for aquaculture. There are 357 registered and unregistered fish-pen owners operating at the 90,000-hectare lake as of June 30, according to the LLDA. The LLDA has dismantled 1,700 hectares of fish pens, of which 1,300 hectares were dismantled during the previous administration. Since President Duterte assumed office, LLDA General Manager Nereus Acosta said fish pens in 400 hectares have been removed. “We need [to dismantle] more than 2,000 hectares,” Acosta told reporters in a news briefing on Wednesday. The Department of Environment and Natural Resources (DENR) is fast-tracking the removal of more fish pens in Laguna de Bay, in line with the directive of Mr. Duterte to turn the lake into a “vibrant economic zone.” However, Acosta said the illegal fish pens and cages in Laguna de Bay may not be removed immediately. “The DENR says we should do it before the end of the year. Realistically, we are asking for at least a year because there are legal implications.”

Friday, August 12, 2016 A3

VISTA LAND’S INCOME UP 11% IN JAN-JUNE

roperty developer Vista Land and Lifescapes Inc. said its net income grew 11 percent in the first half of the year to P3.9 billion, from last year’s P3.5 billion on higher contribution from its commercial business segment. The company said consolidated revenues for the period ending June reached P15.7 billion, up by 9 percent from previous year’s P14.5 billion. Recurring revenue, which came from its commercial businesses, such as office leasing for the business process outsourcing sector and shopping malls, posted a 64-percent increase to P2.1 billion from P1.3 billion last year. The company’s leasing business contributed 23 percent to the total earnings before interest, depreciation and appreciation of P6.21 billion for the period. Real-estate sales grew a slim 3 percent to P12.57 billion, from last year’s P12.18 billion. “Vista Land continues to deliver solid performance fueled by the substantial contribution from our commercial assets coupled with the sustained momentum of our core housing business,” Manuel Paolo A. Villar, the company’s president and CEO, said. “We remain optimistic for the industry, given the strong demand for our commercial space and housing products, propelled by the stable growth in the disposable income, overseas Filipino remittances and sound Philippine macroeconomic fundamentals,” he added. Capital expenditures (capex) for the first half of the year amounted to P14.7 billion or about half of the P30.9 billion budget for the year. Of the total capex, some P23.3 billion will be for construction, P5 billion for land development and P2.6 billion for land acquisition. “We ended the period with a gross floor area of over 860,000 square meters of investment properties. We also remain bullish on our core housing business as we continue with our strategy of opening in new areas and end the year with a presence in at least 100 cities and municipalities around the Philippines,” Villar said. Vista Land intends to focus on the development of mixed-use properties, integrated urban developments combining lifestyle retail, prime office space, schools, health care, themed residential developments and leisure components.

A4 Friday, August 12, 2016 • Editor: Max V. de Leon

AseanFriday BusinessMirror

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Indonesia to allow seekers of tax amnesty to purchase gold, property

or Indonesians seeking to bring back billions of dollars stashed overseas, the government just opened up more avenues to park their funds under a tax-amnesty plan.

Individuals who sign up to the amnesty will be allowed to invest in assets, such as gold, property and infrastructure projects, according to the Finance Ministry. Participants can also move funds between approved assets before a three-year holding period ends, the ministry said in rules notified on its web site on Wednesday. The amnesty program may bring back about 560 trillion rupiah ($42.7 billion) in assets stashed offshore, according to Bank Indonesia. President Joko Widodo, also known as Jokowi, aims to use the taxes from the plan to pay for an ambitious infrastructure agenda and boost economic growth. More avenues to park the repatriated funds may encourage greater participation and help Jokowi partly plug a shortfall in tax revenue, as the nation grapples with a slowdown in China and low commodity prices. “I see it as a positive development that will create a more conducive environment by allowing people to switch between asset classes, switch between things they can hold even though they still have to keep it in Indonesia for three years,” said Wellian Wiranto, an economist at Oversea-Chinese Banking Corp. (OCBC) in Singapore.

Vietnam’s pharmaceutical market in 2015

The funds that the amnesty program is expected to bring back to Indonesia

A VIEW of some residential buildings in Indonesia. BLOOMBERG NEWS

through the parliament, which is a big deal on its own.”

Easy withdrawals

Participants may also withdraw returns from investments made using repatriated funds before the holding period ends, as long as the original amount is kept with gateway lenders, according to the Finance Ministry. Jokowi appointed Sri Mulyani

Indrawati as finance minister last month, returning the former World Bank managing director to a role that she held from 2005 to 2010. Indrawati, who successfully steered Indonesia through the global crisis and spurred investment and restructured the tax office during her previous stint, will bolster the implementation of the amnesty plan, Wiranto said last month. While the amount of flows from

the amnesty is still uncertain, anticipation of extra inflows appears to be putting upward pressure on the rupiah, domestic-asset prices and demand, Edward Teather, a Singaporebased senior economist at UBS Group AG, said in a note e-mailed before the rules were announced. The rupiah is up 5.1 percent this year after finishing as the secondworst performer in Asia last year. Bloomberg News

Singapore cuts top end of 2016 GDP forecast on weak outlook

ingapore cut the top end of its 2016 growth forecast after the economy expanded less than previously estimated in the second quarter, underscoring a weakening global environment. The benchmark stock index fell. Its GDP expanded an annualized 0.3 percent from the first quarter, the Ministry of Trade and Industry said on Thursday. That compares with last month’s advance estimate of 0.8 percent, which was also the median forecast in a Bloomberg survey of nine economists. The economy grew a revised 0.1 percent in the first quarter. The new 2016 forecast of a 1percent to 2-percent expansion is “in line with weaker global growth outlook, and barring the full materialization of downside risks,” the ministry said. The previous forecast was for as much as 3 percent. The island-nation, a financial center and major trading hub, faces what could be its slowest year since the global financial crisis. The world’s prospects have weakened since May, with the UK’s vote to leave the European Union adding uncertainties and China’s economy at risk from a potential spike in debt defaults, Singapore’s trade ministry said. Manufacturing growth weakened in the second quarter from the previous three months, according to the report. A separate release showed total merchandise trade declined by 5.7 percent last quarter from a year earlier, nonoil domestic exports were flat and non-oil reexports fell. “The growth of externally oriented services sectors, such as finance and insurance and wholesale trade, has slowed,” the trade ministry said. “While the manufacturing sector has seen an improvement in performance on account of pockets of strength in segments such as semiconductors and biomedical

IN this April 20 file photo, two kayaks are dwarfed against the skyline of the Marina Bay area—which is home to popular hotels and tourist attractions, such as the Singapore Flyer, the city-state’s observation wheel (seen at right)—in Singapore. AP

0.3%

Singapore’s annualized GDP growth from the first quarter

manufacturing, this may not be sustained in the light of sluggish global economic conditions. Growth in the construction sector is also likely to weaken in the coming quarters.” The benchmark Straits Times Index slid 0.7 percent as of 9:26 a.m., set for its first decline in three days. Economists are forecasting a 1.8-percent growth for Singapore’s

s Vietnam opens up to more foreign money, the country’s fast-growing pharmaceutical industry is emerging as one of the most attractive prizes for overseas investors.

$4.2B

$42.7B While Jokowi estimates the government will levy 165 trillion rupiah in taxes from the plan this year, Bank Indonesia says the program will generate a more modest 53 trillion rupiah. Inflows, however, have been slower than expected, with 761 billion rupiah being repatriated so far, according to the nation’s tax office. The amnesty came into effect last month and runs until March 2017. OCBC’s Wiranto said some details were missing when the amnesty program was first rolled out, and that Indonesians would be more likely to participate now that they are able to invest in assets such as gold and property, and will be able to withdraw returns on those investments. “I think they didn’t quite prepare the ground so much before this. They were probably focusing too much on getting the whole thing

Vietnam drug stocks surging as foreigners covet industry

economy in 2016, which would be the slowest since 2009, according to a Bloomberg survey before the GDP report. Still, the Monetary Authority of Singapore (MAS) signaled it’s not ready for a second round of easing after an unexpected move in April. The “current stance of monetary policy remains appropriate,” MAS Deputy Managing Director Jacqueline Loh said at a briefing Thursday. “Additional downside risks in the global economy remain” and the central bank is closely monitoring the economic situation, she said. On hold? The Singapore dollar was little changed at 1.3418 against the US currency as of 9:25 a.m. local time. “It suggests to me that the MAS

will stay on hold in October but also suggests to me that we might see further easing down the road,” said Vaninder Singh, an economist at Royal Bank of Scotland, referring to the GDP numbers. “We need to see actual recession before, I think, the MAS will be ready to move again.” The government adjusted its 2016 trade forecast, predicting nonoil domestic exports to decline 3 percent to 4 percent, the upper end of its previous estimate. Nonoil domestic exports, the most commonly used gauge of Singapore’s sales to foreign countries, fell 2.3 percent in June from a year earlier. The halving of Brent crude prices in the past two years has also hit home. Singapore accounts for 25

percent to 35 percent of commodities trading in Asia, according to government agency International Enterprise Singapore. It’s also the region’s largest physical oil trading hub and home to the world’s biggest bunkering port. To read about the broadening challenges to Singapore’s economy, click here. Singapore’s marine and offshore industry, which includes the world’s two biggest oil-rig builders Keppel Corp. and Sembcorp Marine Ltd., provides about 19 percent of the island-nation’s manufacturing jobs. Both companies have cut thousands of jobs. Unemployment rose to its highest level in more than two years in the second quarter, at 2.1 percent. Bloomberg News

Domesco Medical Import-Export JSC, the third-biggest listed drugmaker, has shot up 151 percent this year as it got shareholder approval to scrap the 49-percent foreign ownership limit on its stock. DHG Pharmaceutical JSC, the largest, has risen 44 percent, with Japan’s Taisho Pharmaceuticals Holdings Co. buying a 24.5-percent stake last month. Vietnamese health-care companies have returned 46 percent in 2016, the best performance among 10 industry groups on the VN Index. The government cleared Vietnam Dairy Product JSC, the biggest listed company, to scrap its foreign investment cap in July, driving the VN Index to an eight-year high amid optimism further approvals would follow. Overseas ownership of many local drugmakers is already at or near the limit, creating pent-up demand from money managers seeking to benefit as the nation’s burgeoning middle class spends more on health care. “If Domesco gets approval to remove the foreign cap, it will be a good catalyst for the market in general and for the stock in particular,” said Tran Hoang Son, the Hanoi-based head of market strategy at MB Securities JSC. “The pharmaceutical industry is already an attractive sector for overseas investors.” Vietnam’s pharmaceutical market is forecast to increase from $4.2 billion in 2015 to $7.2 billion by 2020, and then maintain double-digit annual growth through 2025, according to a report by BMI Research. The industry will keep growing at around 10 percent to 15 percent a year, said Chris Freund, the founder of Mekong Capital Ltd., a private equity firm. “Vietnam’s pharmaceutical sector is still very fragmented and the management standards are typically quite poor,” he said from Ho Chi Minh City. “There’s an opportunity for strategic investors to invest in pharma companies, help them to build their management teams, to form international partnerships and apply more best practices.” Traphaco JSC, the second-biggest local listed pharmaceutical company, has risen 76 percent this year. Imexpharm Pharmaceutical JSC and Cuu Long Pharmaceutical JSC, which round out the five biggest drug companies on the Ho Chi Minh City gauge, are up 41 percent and 151 percent, respectively. The benchmark VN Index has added 14 percent so far in 2016. Domesco closed up 3.9 percent on Thursday, while DHG increased 3.8 percent and Cuu Long surged 6.7 percent. Even with their surging share prices, valuations are still relatively low. Domesco has a 12-month price-to-earnings ratio of 7.2, DHG Pharmaceutical is 12.3 and Traphaco is 18.1. That compares with a ratio of 13.4 for the Stock Exchange of Thailand Personal Products & Pharmaceuticals Index and 38.3 for South Korea’s Kosdaq Pharmaceutical Index. “The sector is relatively cheap compared with pharmaceutical stocks in emerging markets,” said Le Hong Lien, head of Institutional Research at Maybank Kim Eng Securities JSC in Ho Chi Minh City. Bloomberg News

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 Teodoro L. Locsin Jr. For inquiries/registration, contact Julie Coronado at 845-1324 or e-mail Julie.coronado@eccp.com

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Man climbs Trump Tower

EW YORK—A man who wanted an “audience” with Donald Trump spent three hours scaling the glass façade of Trump Tower on Wednesday using large suction cups, climbing as high as the 21st floor before police officers grabbed him and hauled him to safety through an open window. The climber, identified by police as a 20-year-old Virginia man, wore a backpack and used a harness and rope stirrups to fasten himself to the side of the 68-story Manhattan skyscraper. For a long time, the climber played a slow-motion cat-and-mouse game with would-be rescuers. Officers smashed windows and broke through ventilation ducts to block his progress. Police also lowered themselves toward him using a window washer’s platform. The man kept his distance by

The number of stories of the Trump Tower in Manhattan

methodically working his way back and forth across the facade, repeatedly repositioning suction cups resembling a type commonly used by window washers to remove big panes of glass. The chase ended dramatically just after 6:30 p.m. As a crowd gasped on the street below, two officers leaned far out of a window, grabbed the climber’s arm and harness, and in a flash yanked him from his dangling stirrups. He went through the opening head first, his legs pointed skyward. “I reached out. I took hold of his hand and I said, ‘Sir, would you come with me,’” said detective Christopher Williams, who made the grab. Police had deployed large, inflated crash pads at the scene, but it was unclear how much protection they would have offered if the climber fell. A day before the ascent, police said the climber posted a video on YouTube entitled, “Message to Mr. Trump [why I climbed your tower].” He posted the video under the name Leven Thumps, which is a character in a series of children’s fantasy novels by the writer Obert Skye. “I am an independent researcher seeking a private audience with you to discuss an important matter. I guarantee that it’s in your interest to honor this request,” he said. “Believe me, if my purpose was not significant, I would not risk my life pursuing it. The reason I climbed your tower is to get your attention. If I had sought this via conventional means, I would be much less likely to have success because you are a busy man with many responsibilities.” New York Police Department (NYPD) Assistant Chief William Aubrey said the man, who was not named by police, told officers the same thing after he was safely inside the building. “At no time did he express that he wanted to hurt anybody,” he said. The tower is headquarters to Donald Trump’s Republican presidential campaign and his business empire. Trump also lives there, though he was in Virginia in the afternoon and was headed to Florida for an evening event. A Trump campaign spokesman didn’t immediately respond to a request for comment. “This man performed a ridiculous and dangerous stunt,” Michael Cohen, an executive at the Trump Organization, said in an e-mailed statement. “I’m 100-percent certain the NYPD had better things to do.” Later on Wednesday evening, Trump tweeted “Great job today by the NYPD in protecting the people and saving the climber.” The climber began his ascent from a terrace that is open to the public during the day. Police said he was taken to a hospital to be evaluated. AP

A man scales the all-glass façade of Trump Tower on Wednesday in New York. A police spokesman says officers responded to Donald Trump’s namesake skyscraper on Fifth Avenue in Manhattan. The 68-story building is headquarters to the Republican presidential nominee’s campaign. He also lives there. AP/Julie Jacobson

Trump accuses Obama as the ‘founder of ISIS’

UNRISE, Florida—Donald Trump accused President Barack Obama on Wednesday of founding the Islamic State (IS) group that is wreaking havoc from the Middle East to European cities. A moment later, on another topic, he referred to the president by his full legal name: Barack Hussein Obama. “In many respects, you know, they honor President Obama,” Trump said during a raucous campaign rally outside Fort Lauderdale, Florida. “He is the founder of ISIS [Islamic State in Iraq and Syria].” He repeated the allegation three more times for emphasis. The Republican presidential nominee in the past has accused his

opponent, Democrat Hillary Clinton, of founding the militant group. As he shifted the blame to Obama on Wednesday, he said “crooked Hillary Clinton” was actually the group’s cofounder. Trump has long blamed Obama and his former secretary of state— Clinton—for pursuing Mideast policies that created a power vacuum in

Iraq that was exploited by IS, another acronym for the group. He sharply criticized Obama for announcing he would pull US troops out of Iraq, a decision that many Obama critics say created the kind of instability, in which extremist groups like IS thrive. The White House declined to comment on Trump’s accusation. IS began as Iraq’s local affiliate of al-Qaeda, the group that attacked the US on September 11, 2001. The group carried out massive attacks against Iraq’s Shiite Muslim majority, fueling tensions with al-Qaeda’s central leadership. The local group’s then-leader, Jordanian-born Abu Musab al-Zarqawi, was killed in 2006 in a US air strike, but is still seen as the IS group’s founder. Trump’s accusation—and his use of the president’s middle name, Hussein—echoed previous instances where he’s questioned Obama’s loyalties. In June, when a shooter who claimed allegiance to IS killed 49

people in an Orlando, Florida, nightclub, Trump seemed to suggest Obama was sympathetic to the group when he said Obama “doesn’t get it, or he gets it better than anybody understands.” In the past, Trump has also falsely suggested Obama is a Muslim or was born in Kenya, where Obama’s father was from. The president, a Christian, was born in Hawaii. Trump lobbed the allegation midway through his rally at a sports arena, where riled-up supporters shouted obscenities about Clinton and joined in unison to shout “lock her up.” He railed against the fact that the Orlando shooter’s father, Seddique Mateen, was spotted in the crowd behind Clinton during a Monday rally in Florida, adding, “Of course he likes Hillary Clinton.” Sitting behind Trump at his rally on Wednesday was former Rep. Mark Foley, Republican-Florida, who resigned in 2006 after allegations he sent sexually suggestive messages to former House pages. AP

U.S. Air Force struggles with fighter pilot shortage

ASHINGTON—The US Air Force is struggling to fill a shortage of 700 fighter pilots by the end of the year, even as the US battles in three air wars against the Islamic State (IS) group in Iraq, Syria and Libya. Air Force Secretary Deborah Lee James also told Pentagon reporters on Wednesday that she is planning to pay drone pilots a $35,000 a year retention bonus to encourage them to stay in the service. The retention bonus would be an increase over $25,000 bonus the service has been allowed to provide. And all drone pilots would be eligible once their service contract is up. She added that Air Force needs the authority to increase bonuses for all pilots in order to address the shortage. The Air Force has grappled with pilot retention for some time, particularly as airlines look to hire them, promising higher salaries and benefits. James said the pilot shortage could grow to 1,000 in a couple years. “The airlines are forecast to be hiring a lot more,” she said, adding that the Air Force also needs to increase its training of new pilots. She and Gen. David Goldfein, Air Force chief of staff, said they want to improve pilots’ quality of life and their military service conditions, including training and housing. “It is a crisis,” Goldfein said. “Air superiority is not an American birthright, it’s actually something you have to fight for.” He said fighter pilots are leaving at a higher rate, and that improving their quality of service as well as beefing up the retention bonus will help address the problem. AP

45,000 IS fighters taken off battlefields, US military says

ASHINGTON—The military campaigns in Iraq and Syria have taken 45,000 enemy combatants off the battlefield and reduced the total number of Islamic State (IS) fighters to as few as 15,000, the top US commander for the fight against IS said on Wednesday. Lt. Gen. Sean MacFarland said both the quality and number of IS fighters is declining, and he warned that it is difficult to determine accurate numbers. Earlier estimates put the number of IS fighters between 19,000 and 25,000, but US officials say the range is now roughly 15,000 to 20,000. Saying that “the enemy is in retreat on all fronts,” MacFarland said US-backed local forces in both Iraq and Syria have been gaining ground. And he said the flow of foreign fighters into Iraq and Syria has decreased and that many people pressed into fighting for the IS group are unwilling or untrained. “All I know is when we go someplace, it’s easier to go there now than it was a year ago. And the enemy doesn’t put up as much of a fight,” he told Pentagon

reporters in a video conference. MacFarland said Syrian democratic forces are on the brink of defeating IS in Manbij, Syria, in a matter of weeks. The city, he said, is largely in the hands of the Syrian democratic forces and the pockets of enemy resistance are shrinking daily. “I don’t give it very long before that operation is concluded, and that will deal a decisive blow to the enemy,” he said. Asked how long it will take, he said possibly a week or two, but noted that there are still a lot of enemy foreign fighters there battling hard to keep control of the city. MacFarland said that Iraqi forces are in a position to begin to retake the northern city of Mosul. But he added that the US still has quite a bit of work to do at the Qayyarah Air Base in northern Iraq before it can be used as a hub for the battle to retake Mosul. President Barack Obama authorized the deployment of 560 more US troops to Iraq to help transform the air base into a staging area for the eventual battle to oust IS from Mosul. The group has held

Mosul since June 2014 and has used it as a headquarters. The US troops will include engineers, logistics personnel, security and communications forces. Some teams of US forces have been in and out of the base to evaluate it and the work that must be done, but officials say large numbers of troops have not yet arrived. MacFarland cautioned that, while there have been successes in both countries, IS will continue to be a threat. “Military success in Iraq and Syria will not necessarily mean the end of Daesh,” he said, using an Arabic acronym for IS. “We can expect the enemy to adapt, to morph into a true insurgent force and terrorist organization capable of horrific attacks like the one here on July 3 in Baghdad and those others we’ve seen around the world.”

US-backed Libyan forces takeover IS HQ in Sirte

Meanwhile, US-backed Libyan forces said on Wednesday they have taken over IS’s headquarters in Sirte, the militants’ final bastion in Libya, breaking a

weeks-long stalemate with the help of US air strikes. The fighters said they had seized control of the sprawling convention center that was used as IS’s headquarters in the coastal city. The fighters, who are mainly from the nearby city of Misrata, launched their offensive against IS in June. They also said they had seized the city’s main hospital of Ibn Sina from IS militants. A statement posted on the forces’ Facebook page declared that “Sirte is returning to Libya.” The government-supported operation, known as al-Bonyan al-Marsous, also said that it lost contact with one of its warplanes and the pilot. In an online statement, IS claimed responsibility for shooting down the plane and killing the pilot. Mohammed Shamia, a spokesman for the operation, posted on his Facebook page a list of 14 anti-IS fighters who have been killed in the past 24 hours. Since August 1, US warplanes have launched a series of air strikes targeting IS positions in the city. The US Africa Command said in a

news release on Tuesday that the total number of strikes has reached 29 and added, “these actions, and those we have taken previously, will help deny Daesh a safe haven in Libya, from which it could attack the United States and our allies.” It used an Arabic acronym for the IS group. The air support came in response to a request for assistance from Libya’s UNbrokered government after battles in Sirte stalled. IS militants seized control of the city, the hometown of Libya’s former dictator Muammar Qaddafi, in 2015. Libya descended into chaos following Qaddafi’s ouster in 2011. The country has been divided between warring parliaments and governments, with each backed by a loose array of militias and tribes. In December last year, the United Nations struck a deal to unify the country’s rival governments and created a third unity government led by Fayez Serraj, who still needs a crucial vote of confidence from the eastern-based parliament. The forces fighting IS in Sirte are under the command of Serraj’s government. AP

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China warns UK: Relations hang on Hinkley nuke plant

he Chinese ambassador in London said the Hinkley Point nuclear power plant represents a “crucial historical junction” for relations between the United Kingdom and China, which has a minority stake in the £18-billion ($24-billion) project. In an opinion piece published in Tuesday’s Financial Times, Liu Xiaoming said the cancellation of the plant could affect commerce with Britain’s second-largest trading partner outside Europe. The comments, an unusually forceful intervention in a domestic-policy decision, come as Prime Minister Theresa May surprised the business world when she stalled the deal last month in order to review the power project in southwestern England and said the government is considering whether to proceed with Britain’s first nuclear reactors in more than 20 years. Before May took office, one of her closest allies had questioned whether allowing China a role in UK’s nuclear industry posed a national security threat. “Mutual trust is the very foundation on which bilateral cooperation is built,” Liu said. Hinkley Point, designed to replace aging atomic plants and help the UK meet carbon-reduction targets, has been criticized for its expense. Electricite de France SA (EDF), the French utility leading the project, approved the plant’s construction at a board meeting last month, but the British government said that it needed more time to think, delaying the final investment decision until September.

Careful consideration

The UK is “carefully” considering the future of the nuclear power plant and will continue to seek a strong relationship with China, May’s office said in an e-mailed response to Liu’s warning on Tuesday afternoon. “Britain remains open for business and we are the same outward-looking, globally minded country we have always been,” read the statement. In a blog post written last year before becoming May’s chief of staff, Nick Timothy exposed additional concerns about energy security. He warned that involvement by Chinese partners in the project could allow them to “shut down Britain’s energy production at will.” Liu pointed to a 30-year track record of safe nuclear operations at home and his country’s membership in the International Atomic Energy Agency.

International standards

“Thanks to safeguards of international standards, there has never been a concern that foreign companies might control China’s nuclear reactors,” he wrote. China has invested more in UK over the past five years than Germany, France and Italy combined. President Xi Jinping said they were in a “golden era” of bilateral

The tower of French state-owned power giant Electricite de France (EDF) is seen in the La Defense business district, west of Paris. French energy company EDF is due to decide whether to go ahead with a major nuclear power-plant project in southwest England that some consider too costly. AP/Jacques Brinon

$24B The cost of the Hinkley Point nuclear powerplant project

relations during his visit last year, which secured deals valued at £40 billion. The ambassador asked for clarification in the role of nuclear in the country’s energy policy and that Chinese companies are considered to be good partners. He also said that he hopes that the UK government will come to a decision as soon as possible. The UK’s decision to subsidize power generated from Hinkley Point at about twice the current market rate for electricity, or £92.50 a megawatt hour, has prompted criticism at home and abroad. “There are lots of other things we can do with the Chinese which are much positive and are economically, socially useful,” Legal and General Group Plc.’s CEO Nigel Wil-

son said on Tuesday in an interview on Bloomberg Television. He favors abandoning Hinkley in favor of smaller power generation units.

‘Open to China’

The ambassador wrote that he hoped “the UK will keep its door open to China.” He urged the British government to decide as soon as possible to proceed with Hinkley Point. Some British politicians and diplomats are wary of the enthusiasm the previous government of Prime Minister David Cameron showed for boosting ties with Beijing. Britain rolled out the red carpet for Xi during a lavish state visit in October, complete with a stay at Buckingham Palace as the guest of Queen Elizabeth II. Cameron said Britain would be China’s “partner of choice” in the West. The visit also saw protests by pro-Tibet and human rights demonstrators concerned about the British government’s lavish welcome for the Chinese leader. And there was later embarrassment when the queen was caught on microphone saying Chinese officials had been “very rude to the ambassador” while the visit was being organized. Bloomberg News and AP

Tiny Polish car catches wave in auto-crazy Cuba

AVANA—Ramses Fernandez’s most cherished possession is barely larger than a refrigerator, with the legroom of an economy airplane seat and a little more horsepower than a riding lawnmower. “That’s my second baby,” said Fernandez, smiling proudly at the 39-yearold automobile purchased about the time his 10-month-old son was born. “My wife says that car is my child.” A humble two-cylinder Polishmade hatchback, the Fiat 126p was forgotten by most people after the fall of the Berlin Wall. Decades later, the car lovingly known as the Polski is basking in a Cuban revival. Buses and taxis are in short supply as Cuba struggles with cutbacks in subsidized oil from Venezuela. The average salary is about $25 a month, but government-controlled car and gasoline prices are among the highest in the world. With around just 24 horsepower, depending on exactly how each one has been altered, the half-ton Polski offers families a shot at independent mobility for a few thousand dollars, a sum within reach of those able to save from private jobs or family sending money from overseas. So the self-taught mechanics who’ve kept Cuba’s famed American sedans running for decades are turning their talents to this automotive artifact from the Cold War, equipping Polskis with stronger suspensions, more powerful motors, even high-end sound systems and upholstery. “2016 has been the year of the Fiat Polski 126p,” said Hendy Coba, president of Friends of the Car, an officially sanctioned Havana car owners club. An estimated 10,000 Polskis are registered in Cuba, according to aficionados. Although many are out of service, thousands of others buzz along Cuban roads, literally overshadowed

Fiat Polski 126p owners (from left) Raul Seoane, Ramses Fernandez, Evilio Aguilar, Rigoberto Mesa and Pedro Fernandez proudly pose with their cars in Havana, Cuba. With around just 24 horsepower, depending on exactly how each one has been altered, the half-ton Polski offers families a shot at independent mobility for a few thousand dollars, a sum within reach of those able to save from private jobs or family sending money from overseas. AP/Ramon Espinosa

by the 1950s American behemoths known as almendrones, and even by the rattling Ladas and Moskovitches imported from the Soviet Union. Fernandez, an auto mechanic, said he sold his motorcycle around the time of his son’s birth and bought his Polski with the proceeds, about $5,000. He’s equipped it with disc brakes, new tires, an upgraded gearbox and a water-cooled engine nearly twice as powerful as the one it came with. The normally air-cooled Polski is

so prone to overheating in Cuba that many owners drive around with the rear hatch open in an attempt to suck hot air away from the engine. Fernandez’s closed hatch, and his car’s relative nimbleness, makes him the object of constant admiring comments from other drivers at red lights. “People love my car,” he said. “Everybody says, ‘What a beautiful vehicle!’” Raul Seoane’s family saved years of remittances from relatives working in Spain and spent $2,000 for a

well-worn red Polski manufactured in 1986. Seoane, a 32-year-old computer technician, said the family mainly uses the car to run errands, get to work and take older relatives to doctors’ appointments. He’s been surprised by the number of tourists who ask to pose with the family vehicle. “Foreigners take photos as if they’ve never seen something like this,” he said. “For being an economical car, the Polski has really caught on.” AP

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Bidders from China banned from leasing a Sydney power grid

ANBERRA, Australia—Australia announced on Thursday it plans to block Chinese bidders from leasing a major Sydney electricity grid on national security grounds.

Treasurer Scott Morrison said Chinese state-owned State Grid Corp. and Hong Kongregistered Cheung Kong Infrastructure Group had until next Thursday to respond to his preliminary view that their leasing a 50.4-percent stake in Ausgrid over 99 years would not be in the national interest. The decision almost certainly sinks the deal for the New South Wales state-owned electricity network that would have earned more than A$10 billion ($7.6 billion). The money would have been spent on Sydney rail and road infrastructure projects. Morrison declined to detail the security issues raised by the deal. “The issues are real, they’re matters obviously of national security interest to the Commonwealth and elaborating on those obviously would not be in the national interest either,” Morrison told reporters. “When it comes to foreign investment, particularly in an asset such as this, the nationalsecurity issues are paramount,” he said. Some security analysts said a Chinese-controlled Ausgrid could become vulnerable to being shut down by cyberattack as hackers linked

briefs

German minister to present new package of security measures

BERLIN—Germany’s interior minister is presenting a package of measures meant to beef up security in the country following a recent string of attacks. Chancellor Angela Merkel pledged last month to do “everything humanly possible” to keep Germany safe. That came after several attacks rattled the country, including two carried out by asylum-seekers and claimed by the Islamic State group. German media reports have indicated that Interior Minister Thomas de Maiziere’s proposals on Thursday will include making it easier to deport terror suspects. Some members of Merkel’s conservative party have called for measures such as a ban on all-body veils worn by some Muslim women and a tightening of the rules on dual citizenship. Those appear to have little chance of becoming reality. AP

Ecuador to set date for Assange to be questioned by Sweden LONDON—Ecuador says it’s ready to set a date for Swedish prosecutors to question WikiLeaks founder Julian Assange, who has been holed up in the South American country’s embassy in London for four years. Assange is wanted for questioning by Swedish police over sexual offenses stemming from his visit to the country in 2010. He denies all the accusations against him made by two women. Ecuador said in a statement on Thursday that a date for the questioning in the embassy will be set “in the coming weeks.” Ecuador says it stands by its August 2012 commitment to grant Assange asylum due to “fears of political persecution.” AP

Canada terror suspect dead after police op TORONTO—A suspect banned from associating with the Islamic State group was dead after Canada’s national police force thwarted what an official said was a suicide bomb plot. A senior police official said late on Wednesday the suspect allegedly planned to use a bomb to carry out a suicide bombing mission in a public area but was killed in a police operation. The official, who spoke on condition of anonymity because he was not authorized to speak about details ahead of a Thursday news conference, identified the suspect as Aaron Driver. AP

to Russia had done in the Ukraine last December. Hackers used a coordinated attack to take down part of western Ukraine’s power grid, blacking out more than 225,000 people after hitting regional electric power-distribution companies. US officials called it the realization of a nightmare scenario—hackers able to take down a critical system on which a country depends. Chinese foreign investment, particularly from state-owned companies, has become increasingly contentious in Australia as China takes a more aggressive stance in territorial disputes in the South China Sea. Such investments have to be approved by Morrison after investigations by the Foreign Investment Review Board establish that they are in Australia’s national interests. He has recently added emphasis to the national security aspects of that decision-making process by appointing a former spy agency chief and former defense consultant to that board. Morrison said the message from the Ausgrid decision to potential foreign investors was that Australians “have a robust process for examining foreign investment.” AP

2 G.O.P. incumbents break from trump on immigration

HICAGO—Two Illinois Republicans considered among the nation’s most vulnerable congressional incumbents are breaking from their party and its outspoken presidential nominee, Donald Trump, to push laws that would include a path to citizenship for people living in the country illegally. Rep. Bob Dold and Sen. Mark Kirk joined GOP Rep. Mario DiazBalart of Florida and business leaders at an event on Wednesday in Chicago. They argued comprehensive immigration reform would help the economy, ensure companies have the workers they need and is the right thing to do. “It’s about people before politics,” said Dold, whose district north of Chicago is home to large numbers of Hispanic voters and Fortune 500 companies. “We need to fix a broken system.” Immigration has been a tricky issue for Republicans, particularly as the electorate has grown more and more diverse. After a dismal showing at the polls in 2012, leaders said the party must become more inclusive if it is to win back the White House. The following year 14 Republican senators voted for an immigration overhaul proposal that stalled in the House. The measure would have strengthened border security, increased visas for legal immigrants and given some 11 million undocumented immigrants a path to become citizens. The 14 GOP senators who backed the plan included Kirk and Sens. Kelly Ayotte of New Hampshire and John McCain of Arizona, who also are trying to hold on to their seats in November. Trump has moved in the opposite direction, saying he wants to build a wall along the US border with Mexico and make Mexico pay for it. He also has called some Mexican immigrants rapists and promised to deport millions of immigrants living in the US illegally. Other endangered Republicans have pushed back on Trump’s more divisive statement statements about immigration but are still supporting his candidacy. After Trump said all Muslims should be banned from entering the US, Ayotte said she opposes any “religious-based test for our immigration standards.” Republican Sen. Rob Portman of Ohio blasted Trump for saying a federal judge of Mexican descent couldn’t be impartial because of Trump’s proposal to build the wall. The pushback has been particularly strong in left-leaning places such as Illinois, where in recent years lawmakers have approved driver’s licenses and extended health care for some immigrants who are in the country without legal permission. Even Bill Kunkler, an executive vice president at a Chicago company who has faithfully voted for Republicans for president his entire adult life, called Trump’s comments about immigrants “ugly and hateful” and predicted it will hurt Republicans in November. “I hope Trump and his supporters are humiliated at the polls,” said Kunkler, who attributes his success in business to the Mexican immigrants who worked beside him in his early years supervising an Illinois quarry. Dold, who’s in a rematch with Democratic former US Rep. Brad Schneider, has said he won’t support Trump. Kirk, facing a difficult challenge from Democratic US Rep. Tammy Duckworth, first said he would support the GOP nominee but withdrew his backing in June. Kirk peppered his remarks at Wednesday’s event with Spanish, talking up a program he started to reunite Mexican families by providing visas for people in Mexico to come to the US. AP

Editor: Lyn Resurreccion • Friday, August 12, 2016

A10 Friday, August 12, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

The real Goliath PHL is fighting

rior to the International Court of Arbitration decision, we were told that this was a battle between the “David” of the Philippines and the “Goliath” of China. Since then—with the exception of Japan and, to a lesser extent, the US—the global reaction has been mostly “Goliath what? David who?”

However, the Philippines is fighting a genuine Goliath. That is the illegaldrugs industry. In the last few weeks, President Duterte’s “war on drugs” has been dissected in countless ways. There has been discussion of its morality. We are told that foreign investment will avoid the Philippines. The legality has been questioned. Both valid and foolish arguments have been presented. However, it must also be put in the context of plain and simple economics. Treatment and associated costs from dengue fever cost the country about P15 billion a year. The government reports that in 2014, P37 billion worth of foreign agricultural goods were smuggled into the country. The United Nations Office for Disaster Risk Reduction said in 2015 we sustained about P90 billion in economic damage from natural disasters. Each of these situations costs Filipinos money, money that could be put to productive purposes. The UN Office on Drugs and Crime (UNODC) estimates the illegal-drugs trade in the Philippines amounted to P384 billion in 2013. That number seems high, considering our poverty level. Let’s be more conservative, and cut it by 50 percent. No, we will go even farther and cut the UNODC estimate by 70 percent, all the way down to P115 billion. In comparison, it is estimated that illegal-jueteng gambling is a P100-billiona-year industry. The UNODC estimates that 2.7 percent of the Philippine adult population regularly uses illegal amphetamines, including shabu/methamphetamine, second highest in the world. We are followed closely by Australia, the United States and New Zealand. But those countries are better able to pay for their drug habit. We cannot. The apologists point out that Filipinos also spend money on alcohol—Filipinos are the largest gin consumers in the world—and tobacco. However, those vices generate profits and jobs for Filipinos with some of the largest public companies, including San Miguel Corp., Emperador Distillers and LT Group, in these businesses. Not only does the illegal-drugs industry divert financial resources away from productive enterprises, a portion of every centavo spent on shabu goes to the global methamphetamine supplier—China. No one is happy either with the current drug situation or with the killings. Richard Branson, owner of the British Virgin Group of Cos., has been most vocal in criticizing the Philippines. He said, “I’ve, for years, argued that we should treat drug use as a health issue. People who struggle with drug addiction deserve access to treatment.” We completely agree that more treatment facilities are critical. But the Philippines is not the United Kingdom with an economy nine times our size. We would welcome Virgin Group’s generosity in funding all the drugrehabilitation centers in the Philippines it could possibly afford. Branson can call us anytime. Maybe we can get more help with this Goliath than we did with the first.

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Gender equality James Jimenez

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ccording to a 2003 study by the Women Workers Network Makalaya, only 5,350 punong barangays out of 41,917 were women. Records also showed that a greater number of women were serving in appointive positions as barangay secretaries and treasurers than men. The study showed that a total of 49,173 women occupied appointive positions, wherein 23,983 served as barangay secretaries, as against 15,988 males. There were 25,190 female barangay treasurers compared to 14,794 males, the study further showed. From all indications, things haven’t gotten much better since then. While the fact that only 12 percent of punong barangays were women can be attributed to many different factors, this statistic at least indicates that there is room for women’s participation to grow; that, indeed, there are fewer women in barangay-leadership positions than would be considered “equal”. Quite contrarily, however, the Makalaya studies showed that 57 percent of barangay secretaries

were women. Once again, there can be many explanations for this, but this statistic closely tracks the sad reality that the position of secretary is probably still traditionally considered a woman’s job. Despite prevailing social and cultural norms, however, the fact remains that women are every bit men’s equals by all meaningful measures. So, why aren’t they becoming barangay captains as often as men are?

Despite prevailing social and cultural norms, however, the fact remains that women are every bit men’s equals by all meaningful measures. So, why aren’t they becoming barangay captains as often as men are? Is it because many people—women included—feel that the woman’s “proper” place is in the home? Or is it because many people—women included—still cling to the fiction that women are more emotional than men and, therefore, less reliable in stressful situations? Or might it be because there are still too many people—women included—who don’t take women seriously simply because they’re pretty? These stereotypes still exist, and the only good thing I can say about them is that they have precious little to do with political opportunity. In this country, there are no legal impediments to women seeking office. We have had, just in case you’ve forgotten, two female Presidents. That’s two more than many other of the world’s democracies. In other words, the problem lies not in the political infrastructure of the

country, but in the attitudes of its voters and politicians toward half the population. And the good thing about that, is that the solution to the problem doesn’t depend on some drawn out legislative process, or some controversial empowerment initiative. The solution lies in each of us. With more than half of the country’s 54 million registered voters being women, these disproportionate statistics clearly indicate that it is time for society as a whole to start moving toward emphasizing gender equality, and encouraging more women to participate in the polls as candidates, rather than just as voters. Regardless of whether the barangay elections push through—the rumblings of postponement do seem to be growing louder—I hope that people realize the disappointingly low number of women punong barangays is a state of affairs that can no longer be countenanced. I know, somewhere, the great Comelec Commissioner Haydee Yorac is nodding her head. James Arthur B. Jimenez is director of the Commission on Elections’s Education and Information Department.

Opinion BusinessMirror

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Friday, August 12, 2016 A11

Creative industry, tourism Vanished fruits and local devt in S. Korea Tito Genova Valiente

annotations

Fernando T. Aldaba and Ser Percival K. Peña-Reyes

EAGLE WATCH Continued from A1

outh Korea’s rapid transformation to a developed economy could be gleaned from its industrial strategies that began in the 1960s. In an exposure trip last week, our delegation was delighted to visit a tourist attraction that was also part of an important strategy for the local economic development of Gwangmyeong City.

Gwangmyeong Cave (or Gahak Mine Cave) was originally a mining site operated by the Japanese during their colonial rule. Producing gold, silver, copper, zinc and other minerals, the cave was the largest metal mine in metropolitan Seoul from 1912 to 1972. It spans 7.9 kilometers in length and reaches 275 meters in depth. According to coal-construction data, the cave produced over a hundred kilograms of gold until 1972, when its operations ceased due to a huge flood that submerged the area for many years. The cave epitomizes the evolution of modern industries in Korea and serves as a historical landmark of the Japanese colonial period. With the bankruptcy of its operating company, the mine was closed down and was subsequently bought by a businessman who turned it into a warehouse for salted shrimp. In 2011 the city government, led by Mayor Yang Ki-dae, purchased the mine for 4.3 billion won (P182 million) and immediately began its redevelopment. The project was inspired by urban-revitalization projects in other countries, such as the conversion of the closed Zollverein Coal Mine Industrial Complex (Essen, Germany) into a major tourist venue with museums and exhibitions, the Westergasfabriek (Amsterdam, the Netherlands), and the Musee d’Orsay (Paris, France). Having undergone a complete makeover, the cave reopened its doors in 2011 as a living museum and historical site. Its major attractions include an underground aquarium (Cave Aqua World), a music and art hall, a golden waterfall, golden paths and golden palaces. Apart from its historical importance, the cave offers another compelling reason for tourists to flock—the tasting of 78 varieties of fine wine from eight different Korean vineyards. Today, the cave is a cultural tourism attraction with 1.5 million visitors annually. Its underground temperature is maintained at 12 degrees Celsius, which attracts more tourists in the summer season. Since it began charging admission fees in April 2015, its sales through June of this year have amounted to 7.9 billion won (P335 million). Indeed, the cave park has created hundreds of jobs that are critical to the city and its people. Moreover, it enables Gwangmyeong to share its

cultural and artistic heritage with young people from Korea and the whole world. Of course, several insights can be distilled from this case study. One, a local government can turn a disaster into an opportunity, especially if it uses its available resources wisely. It can also be engaged in a successful entrepreneurial activity in partnership with the private sector in the tourism industry. Two, although the cave theme-park project got its inspiration from other successful initiatives around the world, it has managed to improve on them. The Gwangmyeong cave, for example, is now being hailed as a major cave theme park in the world. Three, the creative economy and technological advancements can be harnessed in the transformation of a site into a tourist attraction. Four, a successful theme park can create positive externalities (spillovers) for other sectors in the local economy. The cave has spawned the development of other tourism-related sectors in the local economy. Last, attracting global talents and professionals can further enhance an already successful tourist site (e.g., design competitions in the cave, concerts of renowned artists, and so on). These insights should inspire the Philippines to follow suit, as it tries to revitalize local industries and spur tourism, which is widely considered as an inclusive growth driver. The Philippine mining industry, in particular, has been the focus of a heated debate that weighs environmental sustainability and economic progress against each other. The Korean experience, however, suggests that these do not have to be mutually exclusive outcomes. Fostering a creative synergy between the private and public sectors can unleash a lot of economic potential from which many Filipinos will benefit. The country for sure has a number of areas, including those affected by disasters, that can be turned into golden opportunities.

hen was the last time you ate duhat? an old friend was asking me. How does a duhat look like? My question was serious. I do not remember anymore what a duhat looks like. I do not know how it tastes. I remember some people calling it lomboy. My memory that afternoon brought me back to a storage of memories—childhood. But my storage was near empty. It rattled. I found a fruit hiding somewhere in that dark storage: balig-ang. In the island of my birth, it was balig-ang but in the city it has mellowed into baligang. I searched and researched; I was not wrong. The duhat has the same scientific name, Syzigium. As labels are victims of memories as well, even the scientific names have been, perhaps, already forgotten. Fruits we knew as children are gone not from the gardens or woods, but from our consciousness. My grandfather, Lolo Amboy, provided a garden—or sackful— of fruits from his farm across the lake. Pili was a regular gift. This was not the nut but the fruit: a purple, longish fruit, or fruit, that we soaked in hot water. The skin was taut and easy to peel. Revealed was the flesh, part purple, part yellowish. Even as I recall now the taste of pili flesh, I maintain it is, indeed, a cultivated taste. The aroma is leathery; the flesh bears a pungency that is a cross between a burning gas and potato. Lolo Amboy would introduce us

to kamagong. Its English name is “velvet apple,” a name owing to its skin, which has the sheen of velvet. The good grandfather warned us: it had a strong smell. Memories must have played great tricks because kamagong or mabolo has the sweetness of the more commercial mango. If fruits are cinemas, then atis will always be the indie favorite. I do not know if there are attempts to produce it commercially. It seems to thrive by just leaving it on the tree. If you are not careful, the ripening can turn the skin to black. It rots away and falls off. The atis is my own bluesy favorite, my strange fruit. In high school, the study of simile and metaphor always partook of fruits. The succulence of papaya was a favored metaphor for women and their pulchritude; lips were as red as makopa. Going into labels, I discover that makopa is related to duhat. Colors, indeed, are never demarcations. Call it generational but I still prefer lips as red or pink as tambis than some concocted tints like glori-

Please e-mail your letters to the editor to oped@businessmirror. com.ph. Letters chosen for publication in this section are edited for brevity and clarity. WE write in reaction to a news article published in the BusinessMirror on August 4, 2016, titled “Slow

probability. The scientific names I found attached to my childhood fruits are warm reference, but they do not share with me the story of the fruits. Childhood is the narrator of these fruits. But childhood has since vanished for all. In its place is the narrative of technologies, which are also fruits, fruits of what we call change.

E-mail: titovaliente@yahoo.com.

Dr. Aldaba is dean of the School of Social Sciences at Ateneo de Manila University, while Peña-Reyes is a faculty member of the Economics Department under the said school. The other members of the delegation to South Korea are Dr. Olivia Habana (History), Dr. Maitel Ladrido (Communication), Sarah Lipura (Korean Studies), Oliver Quintana (Political Science) and Patrick Capili (Modern Languages). The team is grateful to Sogang University (c/o Dr. Dong-taek Kim) for being such a gracious host. Gamsahamnida!

Govt bureaucracy cause of slow Internet MAIL

ous sunset or pale sunrise. But who would buy products that are named after obscure fruits? Speaking of commodification of fruits, sineguelas or Spanish plum really never made it sincerely to malls and groceries. There is always something rakish about sineguelas. Peter Berger, the sociologist of knowledge, talks of science as not really the realm of certainty but

Internet due to weak competition.” This piece of reportage is misleading and the writer took liberties by taking his source document out of context to lend credibility to his article. In the “news story”, the writer referenced a Fitch Ratings press article, titled “PLDT, Globe to Benefit from San Miguel’s Telco Exit,” with the purpose of making his supposition about the industry credible. In the first paragraph, the writer declared, “…competition in the sector started to weaken” and proceeded to lift from the commentary by international credit agency Fitch Ratings to say, “…the Philippine telco industry suffered a blow on competition…” as if the two ideas were connected.

We acquired a copy of the press release from Fitch Ratings and the actual text was, “the acquisition… removes the threat of heightened competition.” The commentary from Fitch also provided an optimistic report on how competition will drive the two industry players to improve mobile Internet by “investing aggressively to expand their data services, now having access to the coveted 700-MHz spectrum.” There was nothing in the Fitch article to say that, “slow Internet was due to weak competition” nor any inference that there is no or weak competition in the industry. Heightened competition referred to the presence of a third player who will have the tendency to increase

competitive activity. With the absence of the third player, only the threat of heightened competition would have been removed but competition still remains. We are of the opinion that the “news story” was made to appear factual in order to support the cause of Internet Society of the Philippines whose officers, namely, Winthrop Yu and Grace Mirandilla-Santos, were quoted heavily in the article. As an industry player, we wish to clarify that the current state of Philippine Internet is not related to the writer’s assessment of socalled weak competition. In a free market state, the competitive environment is characterized by low

pricing mechanism and quality of service. The intensity of competition can be felt through price wars, product innovation, service quality improvements and customer preference. All these indicators are being experienced in the Philippine telco industry despite having only two major national players, the other players have chosen to go into niche regional presence. The reason for the lagging Internet speed, specifically for fixed Internet, is due to underinvestment in this area. Today, the industry is on a catch-up mode to build the appropriate infrastructure and improve this service. On the other hand, our mobile Internet has more developed infra-

structure, allowing us to support all technologies, namely, 2G, 3G, 4G and LTE, which provides mobile Internet speeds comparable with other countries. The writer failed to mention that the primary cause of our “slow Internet” issue has to do with our challenges in infrastructure brought about by government bureaucracy at the local government unit level, with 25 permits to build one cell site or roll out fiber over eight months. Having known what the problem is, herein also lies the solution. Yoly Crisanto SVP, Corporate Communications Globe Telecom

2nd Front Page BusinessMirror

A12 Friday, August 12, 2016

HERO’S WELCOME FOR OLYMPIC SILVER MEDALIST HIDILYN DIAZ By Recto Mercene

@rectomercene

lympic silver medalist and the country’s athletic hero, Hidilyn Diaz, said she would like to set up a weightlifting gym using the incentives she was given for bringing honor to the Philippines. Diaz also revealed that she would also like to enroll in a culinary school so she could learn how to cook and, eventually, set up her own restaurant. “I’ll buy a lot where I can put up a gym for weightlifting,” she said. Earlier, Diaz confessed to fellow travelers that she likes to eat and would like to enroll in a culinary class. Diaz arrived in the country on Thursday and was met at the airport by her parents Emilita and Eduardo, along with Reps. Jose Manuel Dalipe and Celso Lobregat, as well as Philippine Sports Commission Chairman William Ramirez. She was accompanied by Philippine Olympic Committee Second Vice President Jeff Tamayo. She was smiling and in high spirits when she was greeted by airport officials and personnel. “I want to cry. I never expected this warm welcome from you. I want to offer this medal to my mother who celebrated her 53rd birthday on August 7,” Diaz said in Filipino. She is the first Filipino to win an Olympic medal since 1996, when Mansueto Velasco won the silver for boxing at the Atlanta Olympics. Diaz received P5 million under the National

Athletes and Coaches Benefits and Incentives Act and will get other monetary gifts from Sen. Emmanuel D. Pacquiao and other donors, who were impressed by her performance. Aside from her mother, Diaz also dedicated her victory to the Filipino children, who she wished would also become Olympic winners. “This is for the Filipino children because I want them to become Olympians.” During an airport interview, Diaz said she would like those who will follow in her footsteps to be fully supported by the government so that Filipino Olympians will finally win a gold medal for the country. Encouraged by her victory, she said retiring is out of her mind at the moment and confessed that she missed the routine of weightlifting. After the Rio Olympics, Diaz said she looks forward to participating in the Tokyo Olympics, scheduled in 2020. Asked how she felt about winning the silver, Diaz said maybe it was “God’s will” that the Philippines would be known for its world-class weightlifters. Diaz is scheduled to fly to Davao City aboard an executive jet provided by tycoon Manuel V. Pangilinan to meet President Duterte. She said she is excited and honored to show Mr. Duterte her medal. Aside from the cash incentives, Diaz will also receive a meritorious promotion from the Philippine Air Force, where she is an Airwoman 2nd class.

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Enforcing antitrust law: 60 mergers reviewed

By David Cagahastian

@davecaga

ore than 60 mergers and acquisitions (M&A) have already been reviewed in the past year as the Philippine Competition Commission (PCC) begins to enforce the landmark antitrust law of the country. On the PCC’s first anniversary, Chairman Arsenio M. Balisacan asserted the jurisdiction of the PCC and cited the more than 60 M&A, which have been reviewed by the commission, as recognition by the private sector of its role in ensuring healthy competition in the business environment. “While still young, the PCC has been vigilant in safeguarding market competition to ensure consumer benefit,” Balisacan said in a statement on Thursday. T he Philippine Competition Act, or Republic Act 10667, took effect on August 8, 2015, and established the PCC as the independent quasi-judicial

agency to guard against anticompetitive M&A and abuses of market dominance. Since its official organization only in February of this year, the PCC had already processed and decided on over 60 M&A, which were voluntarily submitted for the PCC’s review by the parties to the transactions. The M&A covered a diverse range of

industries, including health care, retail and telecommunications, the PCC said. Balisacan said the agency would engage the public in discussions to educate them about anticompetition practices and allow them to participate in guarding against illegal activities. “We believe that engaging the public is one of the best ways to ensure that their welfare is the primary consideration on the exercise of our mandate,” Balisacan said. He said the PCC would continue to serve its mandate of promoting competition among rivals in various industries to make goods and services better for the consuming public. “I hope the business community will see the PCC not as an additional burden or red tape, but as their partner in making our country more attractive to investments. The PCC will continue to serve its mandate, which we believe is a vital contribution not only for sustaining the Philippine economy’s robust growth, but also for making this growth more inclusive,” Balisacan said.

While still young, the PCC has been vigilant in safeguarding market competition to ensure consumer benefit.” —Balisacan