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Piñol sees strong farm Just do it sector recovery in H2 3.48% D T By Jasper Emmanuel Y. Arcalas
Teddy Locsin Jr.
@arteliterary
espite the 3.48-percent decline in farm output in the January-to-June period, the Department of Agriculture (DA) remains upbeat over the growth prospects for the sector this year.
INSIDE
OUT TODAY
Agriculture Secretary Emmanuel F. Piñol said the various interventions he is implementing for the sector should allow it to post optimal growth by the end of 2016.
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1 Tuesday, August 16, 2016
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AsiA’s NExt tigER:
Good afternoon, Vietnam
I
N 2009, when Jonathan Moreno’s company, Diversatek, was looking for a location for a new factory to make its medical devices, it ruled out much of the world. Europe and the Americas were too expensive, India was too complex and intellectual-property rights in China were too patchy.
enough it will start aging more rapidly, but its urban work force has much scope to grow. Seven in 10 Vietnamese live in the countryside, about the same as in India—and compared with only 44 percent in China. The reservoir of rural workers should help dampen wage pressures, giving Vietnam time to build labor-intensive industries, a necessity for a nation of nearly 100 million people. Many other countries also boast young work forces, but few have had as effective policies as Vietnam. Since the early 1990s the government has been open to international trade and investment. This has given foreign companies the confidence to build factories. Foreign investors are responsible for a quarter of annual capital spending. Trade accounts for roughly 150 percent of national output, more than any other country at its level of per-person GDP. Investors also have taken heart from the stability of Vietnam’s longterm planning. Like China, it has used five-year plans as rough blueprints for development. However, also like China, its governance allows scope for innovation: Its 63 provinces compete with each other to attract investors. A model of developing industrial parks with foreign money and managers began in Ho Chi Minh City in 1991 and since then has been replicated elsewhere. Vietnam’s work force is not only young but also skilled. Public spending on education is about 6.3 percent of GDP, two percentage points more than the average for low-or-middle-income countries. Although some governments spend even more, Vietnam’s expenditures have been well focused, aiming to boost enrolment levels and ensure minimal standards. In global rankings, 15-year-olds in Vietnam beat those in America and Britain in math and science. That pays dividends in its factories. At Saitex, a high-end denim manufacturer, workers must handle complex machinery from lasers to nanobubble washers, all to produce the worn jeans so popular in the West. On top of this solid foundation, Vietnam is reaping benefits from trade deals. It is set to be the biggest ben-
PreSident Barack obama and vietnamese President tran dai Quang stand under a statue of the late vietnamese revolutionary leader Ho Chi Minh, during a signing ceremony at the international Convention Center in Hanoi, vietnam, May 23, 2016. the U.S. is rescinding a decades-old ban on sales of lethal military equipment to vietnam, obama announced at a news conference in Hanoi on Monday, ending one of the last legal vestiges of the vietnam War. Doug mills/tHe new york times eficiary of the Trans-Pacific Partnership (TPP), a 12-country deal that includes America and Japan. With American politics turning hostile to trade, there is a risk that the TPP will fail. Even if that happens, though, Vietnam will do well. The TPP already has helped to advertise its capabilities. Besides, there are
other major agreements: A free-trade pact with the European Union is in the works, and one with South Korea went into force in December. Vietnam also faces a series of challenges, however, any of which could impede its rise. Speculative excesses in the past helped fuel a real-estate bubble
which burst in 2011, saddling banks with bad debts. Vietnam created a “bad bank” to house the failed loans and has started cleaning up its banks. However, it has been slow to inject new capital into its banks and hesitant about modernizing their operations. In one crucial area it compares
A vendor arranges her stall selling Chinese-made toys at dong Kinh market in the northern town of Lang Son in vietnam, bordering with China, September 23, 2014.
poorly with China: getting the most out of the private sector. Private Chinese companies generate about 1.7 yuan of revenue per yuan of assets, more than double the 0.7 ratio for state-owned enterprises. In Vietnam private-sector productivity has slumped during the past decade to the 0.7 level, the same as state-owned enterprises, according to the World Bank. One reason is that large groups in Vietnam sprawl across 6.4 separate industries on average. Those in China operate in only 2.3, according to the Organization for Economic Cooperation and Development. After years of solid growth, Vietnam has nearly reached a milestone. Now that it is classified as a middle-income country, it is about to lose access to preferential financing from development banks. In 2017 the World Bank will start to phase out concessional lending. For Vietnam it is a moment to reflect on how far it has come and also to ponder the trickier path ahead. It has a chance to be Asia’s next great success story. It will take courage to get there.
1 United States 2 Great Britain 3 China 4 Russia 5 Germany 6 France 7 Italy 8 Japan 9 Australia 10 South Korea 11 Hungary 12 Netherlands 13 Spain 14 New Zealand 15 Canada 16 Kazakhstan 17 Colombia 18 Switzerland 19 Belgium 19 Thailand 21 Croatia 22 Iran 22 Jamaica 54 Philippines
@llectura
G 26 15 15 9 8 7 7 7 6 6 5 4 3 2 2 2 2 2 2 2 2 2 2 0
S 21 16 13 11 5 8 8 4 7 3 3 2 0 6 2 2 2 1 1 1 1 0 0 1
B 22 7 17 10 4 7 6 15 9 5 4 3 2 0 9 4 0 2 1 1 0 1 1 0
T 69 38 45 30 17 22 21 26 22 14 12 9 5 8 13 8 4 5 4 4 3 3 3 1
See “Piñol,” A2
Continued on A11
By Jovee Marie N. dela Cruz
© 2016 Economist Newspaper Ltd., London (August
rio olympics medal tally
the sector could hit the growth target set by the previous DA chief. In June Piñol said he has crafted a road map following his biyaheng bukid initiative, which helped him identify factors that hindered the growth of the farm sector. Aside from providing free seeds and other farm inputs to farmers and fishing boats to fishermen,
HE Chief Justice, whose office is coequal in constitutional dignity to that of the President, advised judges under her court not to surrender unless served with warrants issued by judges. She is correct. President Duterte answered with the nonsequitur, “Do you want me to declare martial law?” He was wrong.
By Lenie Lectura
6). All rights reserved. Reprinted with permission.
Hoang DinH nam/agence France-Presse/getty images
The decline in the January-toJune farm output
Federalism seen to offer uncertain future for mining, power sectors DUTERTE SEEKS P3.35-T 2017 ‘BUDGET FOR REAL CHANGE’
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Part Two
NERGY industry stakeholders weigh in on the potential impact of a shift to a federal form of government under the Duterte administration. Regulators, industry players and observers agree that a push for federalism has its advantages and disadvantages. Definitely, they noted, federalism would allow, on one hand, the autonomous regions to realize their full potentials as self-governing units. On the other hand, there are challenges, and probably conflicts, that will be encountered but must be dealt with in order to achieve the very objective of a federal form of government. The Energy Regulatory Commission (ERC), an independent and quasijudicial five-man regulatory body, said there is a need to thoroughly study this possible structure. ERC Chairman Jose Vicente B. Salazar, in an interview, said an advantage of a shift to a federal system of government is that this would allow for the adoption of regulatory policies that are dependent on the economic development and condition of a specific region. “These policies would, therefore, be more attuned to the particular situation in that region,” Salazar said. However, this advantage could also be a disadvantage, as jurisdictional conflicts
PESO exchange rates n US 46.6990
Continued on A2
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@joveemarie
he House of Representatives on Monday received the Duterte administration’s proposed P3.35-trillion national budget for next year. Of the P3.35-trillion proposed budget for 2017, Budget Secretary Benjamin E. Diokno said 40.14 percent, or P1.34 trillion, will be for empowering human resources through education, health care, social welfare and other social services. Diokno added that 27.6 percent, or P923 billion, will go to economic services, including infrastructure network, agriculture and the rural sector, as well as initiatives to generate more jobs and livelihood. For general public services and defense, the secretary said the government will allocate 22 percent, or P729 billion. The 2017 budget is higher by 11.6 percent compared to this year’s P3.002 trillion. As a percentage of GDP, the 2017 budget represents 20.4 percent, slightly higher than this year’s 20.1 percent of GDP, according to the Department of Budget and Management. FILE PHOTO
In the end Vietnam was the one candidate left standing. It still seemed risky, because the country was only then emerging as a destination for foreign investors. Seven years later Moreno surveyed the scene at the factory, as employees assembled delicate diagnostic probes in a room that resembled a laboratory, and had no doubt about where Diversatek will expand next. “To the back, there and there,” he said, pointing to either side. It is far from alone. Foreign direct investment in Vietnam hit a record in 2015 and has surged again this year. Deals reached $11.3 billion in the first half of 2016, up by 105 percent from the same period last year, despite a sluggish global economy. Big free-trade agreements explain some of the appeal, but something deeper is happening. Like South Korea, Taiwan and China before it, Vietnam is piecing together the right mix of ingredients for rapid, sustained growth. Vietnam already has a strong, often underappreciated record. Since 1990 its growth has averaged nearly 6 percent a year per person, second only to China’s. That has lifted it from among the world’s poorest countries to middle-income status. If Vietnam can deliver 7-percent growth for another decade, its trajectory would be similar to those of China and the Asian tigers. That is no sure thing, however. Should growth fall back to 4 percent, it would end up in the same underwhelming orbit as Brazil and Thailand. Perhaps the biggest factor in Vietnam’s favor is geography. Its border with China, a military flashpoint in the past, now is a competitive advantage. No other country is closer to the manufacturing heartland of southern China, with connections by land and sea. As Chinese wages rise, that makes Vietnam the obvious substitute for companies moving to lower-cost production hubs, especially if they want to maintain links back to China’s well-stocked supply chains. A relatively young population adds to Vietnam’s appeal. Whereas China’s median age is 36, Vietnam’s is 30.7. Soon
“I cannot project a growth of 3 percent [by the end of 2016], but I believe that we are moving toward that,” Piñol told the BusinessMirror, when asked whether
free fire
No fund for Cha-cha
But there will be no fund alloca-
tion specifically for the proposed Charter change (Cha-cha) next year. Diokno said there would be no expenses in changing the Constitution, as President Duterte wants Congress to convene itself into a constituent assembly (Con-ass) to jump-start the country’s shift to a federal form of government. “There is no budget for Charter change here, [because] President Duterte prefers to change the Charter through Con-ass, and that does not involve additional expenses,” he said. However, should President Duterte opt for a constitutional convention (Con-con), the budget would come from the contingency fund of the Office of the President. “[But if through Con-con] we can get it from the contingency fund, if you elect the delegates, as proposed to be synchronized with the barangay captains, you don’t need additional budget for that,” Diokno added. There are three modes of amending the Constitution—through Conass, Con-con or a people’s initiative. Under Con-ass, Congress, through its “constituent power,” constitutes itself into a body and would perform the task of amending the Charter. Amending the Constitution via See “Duterte,” A2
n japan 0.4617 n UK 60.4005 n HK 6.0213 n CHINA 7.0405 n singapore 34.7204 n australia 35.7387 n EU 52.1768 n SAUDI arabia 12.4531
Source: BSP (15 August 2016 )
BMReports BusinessMirror
A2 Tuesday, August 16, 2016
Federalism seen to offer uncertain future for mining, power sectors Continued from A1
may arise between federal and state regulators, he explained. “Hence, policy differences may affect national development plans.” As such, Salazar said, lawmakers and concerned parties must weigh in on the possible impact this could have on the power sector. “In considering the shift, a careful study on the impact on the system as a whole and on the rates to be recovered from all consumers must therefore be taken into consideration,” the ERC chief said.
Harmonizing difficulties
THE ERC is tasked to promote competition, encourage market development, ensure customer choice and penalize abuse of market power in the electricity industry. To carry out this undertaking, the ERC promulgates necessary rules and regulations, including competition rules. The ERC can also impose fines or penalties for any noncompliance with or breach of the Electric Power Industry Reform Act (Epira) and its implementing rules and regulations (IRR). Penalties also carry on violations of other rules and regulations the ERC promulgates or administers, as well as other laws it is tasked to enforce. An industry expert, meanwhile,
Piñol. . .
Continued from A1
Piñol said he will conduct a nationwide inspection of irrigation services, dredging of silted dams and provide shallow tube wells. The DA is also crafting a “color-coded agricultural guide map,” which will guide farmers on which crop or farming practices are suitable based on geographic, climatic and soil conditions. Data from Philippine Statistics Authority (PSA) showed that agricultural output declined by 2.34 percent in April to June due to El Niño. The crops subsector, which accounted for 48.31 percent of total output, recorded a 4.97-percent drop in output in the second quarter. Palay production at 3.71 million metric tons (MMT) was 6.10 percent lower than last year’s level. The PSA attributed this to “significant decreases” in harvest areas and yield caused by the prolonged dry spell in Soccsksargen, Autonomous Region in Muslim Mindanao (ARMM), Caraga, and the Visayas regions. “Corn production at 910,000 metric tons [MT] was lower by 10 percent during the second
commented on the difficulty in harmonizing an overall policy. “For example, in the US federal system, California is going extremely for green energy. But some states in the US are still into coal,” said the person familiar with the matter but is not authorized to speak for the Department of Energy (DOE). “What happens is that it is quite difficult to impose an all-out clean-energy policy on a national level.” With federalism, the needs of different regions would be easily addressed. “It can be observed that a policy imposed on all may not be effective in one province because the needs of one locality differ from the other,” the energy expert said. “Hence, different policy approach per region seems beneficial as varying needs can be easily addressed.”
Spug areas
FORMER House Energy Committee Chairman Reynaldo V. Umali said he is in favor of a federal form of government.“It is definitely more advantageous. Under the present system, the smaller towns, barangays and some local government units are somewhat neglected,” Umali said in an interview. “But soon, they will have the opportunity to chart their own course.” He cited the National Power Corp. (Napocor)-Small Power Utilities Group (Spug) as one of those quarter. Reduction in area harvested and lower yields because of the dry spell in Western Visayas, Northern Mindanao, Soccsksargen and ARMM were the main reasons for the drop,” the PSA said. PSA data showed that production gains were recorded by sugarcane, eggplant, mongo, abaca and pineapple. In the first half of the year, crop production went down by 6.8 percent. The livestock subsector grew 6.56 percent and contributed 17.66 percent to the total agricultural output in the second quarter. “Hog, the major driver of growth, expanded at 7.41 percent. At current prices, the subsector grossed P63.9 billion, a 2.75-percent increase from last year’s earnings. In the first half of 2016, livestock production grew by 5.6 percent,” the PSA report read. PSA data showed that production in the poultry subsector rose by 1.25 percent in April to June. It accounted for 15.72 percent of total agricultural production. “Output gains were recorded for both chicken eggs and duck eggs while their corresponding meat production declined. From January to June, the subsector recorded a 1.12-percent growth in output,” the PSA said.
that will definitely benefit if and when a federal form of government is put in place. “In Spug areas, assistance is not often provided. If at all there is assistance from the government it’s still not enough. Improvement is not felt in in these areas,” Umali said. “But under a federal form of government, these communities can chart their own programs that they themselves will benefit from.” Through its Spug, the Napocor continues to pursue its mandate to provide electricity in off-grid areas, particularly in areas where private investors hesitate to come in due to lack of infrastructure and political and security concerns. The Spug areas include Palawan, Romblon, Marinduque, Mindoro, Catanduanes, Basilan, Sultan Kudarat, Masbate, Antique, Guimaras and Cagayan. Umali said these areas continue to seek investments. “One disadvantage is that since they are small ‘states,’ so to speak, the ability to raise capital maybe limited. You need large investments to develop stable, reliable and affordable power,” he added. “They may encounter difficulties, especially for poor areas that do not have too much revenue source. Mahihirapan sila makakuha ng [They would have difficulty securing] funding kasi malaki ang investment sa power [because of the huge amount of in-
It was a different story for the fisheries subsector, which accounted for 18.31 percent of total farm output in the second quarter. Production contracted by 5.9 percent as lower output was noted across fish species. Major gainers were milkfish and tiger prawn, which grew by 1.57 percent and 7.65 percent, respectively. “At current prices, the subsector grossed P60.2 billion, or 6.91 percent lower than last year’s level. In the first half, the subsector recorded a 5.92-percent drop in production,” the report read.
Sanguine outlook
Local economists agreed with Piñol, saying the farm sector’s output could still recover in the second half of the year. University of Asia and the Pacific (UA&P) Center for Food and Agri Business (CFA) Executive Director Rolando Dy told the BusinessMirror that the rains in the second semester of the year will help boost agriculture production. Rice, which accounts for 15 percent of total farm output, will benefit from the increase in rainfall as it is a water-loving crop. “[Positive growth is] possible with better rains. But it will not be
vestment required].”
Uncertainty worries
SINCE there are several models of federal states to study, Umali said he is confident the current administration would carefully layout its plans and programs that are necessary in order to achieve its goal. An industry source, meanwhile, explained how a shift to federalism might bring “uncertainty” in the power system. “If there is a federal state then the transmission lines and other sources of power generation could be affected,” the person said. “Hence, there could be possible power interruption or inefficient delivery of power. Why? Because some may claim that this area is ours, which could include these vital power facilities.” The person who requested anonymity to avoid a backlash from players in a tight industry added: “As it is now, we are already having transmission right-of-way problems.” “Can the NGCP [National Grid Corp. of the Philippines] still perform its duties? What about the long-term contracts that had been entered into? Would these still be enforced or scrapped?” Indeed, changing the rules in the middle of the game only brings uncertainty and may only discourage investors, the person said. To be concluded easy. Magat Dam in Isabela with 85,000 hectares [is still at] critical level. Nonetheless, we still have five months to go,” Dy said. The 2.34percent decline in farm output in the second quarter of the year is the lowest since the third quarter of 2014, when production contracted by 2.99 percent, according to the PSA. Between 1998 and 2015, the sector recorded the lowest growth in the third quarter of 2001, when it declined by 18.05 percent. “To exceed zero for full year 2016, agri must grow 3 percent to 3.5 percent in [the] second half. Key result areas would be short term crops, [like] rice, corn, sugarcane and banana productivity, among others,” Dy said. Philippine Institute for Development Studies Research Fellow II Roehlano Briones said the decline in farm production due to El Niño in the first half was “worrisome.” He noted that the last time the agricultural output declined was in 2014, which was also an El Niño year. Prior to 2014, the El Niño episode experienced by the Philippines was during the 1997-to-1998 period. Briones said the intervals between El Niños seem to be getting shorter. With this, the Philippines should prepare for these kinds of weather events twice, or even thrice, in a span of a decade. While much of the country’s agriculture growth is based on nature and farmer’s planting intentions, Briones said the government can prioritize efforts to improve basic foodproduction systems. “Maybe we should go back to the basics and see how the underlying food production system can be made resilient. This will not happen overnight or even in a year,” he said. He added that these foodproduction systems include irrigation. Briones said many irrigation systems nationwide do not get repaired immediately after typhoons and other disasters, reducing the efficiency of these systems to provide water to farms. Briones said the government can focus on improving these systems by ensuring adequate water supply, silt-free and aggressively spending for their maintenance. The government must also ensure that the actual service received by farmers from irrigation systems nationwide is sufficient. By so doing, the country can be better prepared when the next El Niño occurs. With a report from Cai U. Ordinario
www.businessmirror.com.ph
Duterte. . .
Continued from A1
Con-con will require the election of delegates. Registered voters may also launch a petition to change the Constitution. It should be signed by 12 percent, or 6.6 million, of the 54.4 million registered voters. Speaker Pantaleon D. Alvarez also said Congress’s annual budget can be used to fund the conduct of the Con-ass. In the proposed 2017 budget, the government allocated P14.12 billion to the Congress.
Revenue goal
The total revenue next year is expected to reach P2.48 trillion, or around 10 percent more than the government target this year. It is equivalent to 15.6 percent of the GDP. The national government budget deficit next year is expected at 3 percent of GDP, or P478.1 billion. This funding shortfall will be funded through borrowings. The total borrowings in 2017 will reach P631.3 billion. The GDP is expected to grow by 6.5 percent to 7.5 percent in 2017 through sustained expansion of the services and industry sectors, and the expected rebound of the agriculture sector. “We are putting the money where the mouth is. This budget is consistent w ith President Duterte’s call for genuine change. This is a transparent budget that is compliant with two landmark Supreme Court decisions on PDAP [Priority Development Assistance Fund] and DAP [Disbursement Acceleration Program],” Diokno said.
‘Budget for real change’
By department and special purpose allocations, Diokno said the top 10 are: Department of Education, with P567.7 billion; Department of Public Works and Highways, with P458.6 billion; Department of Interior and Local Government, with P150 billion; Department of National Defense (DND) with P134 billion; Department of Social Welfare and Development, with P129.9 billion; Department of Health, with P94 billion; state universities and colleges, with P58.8 billion; Department of Transportation (DOTr), with P55.4 billion; Department of Agriculture (DA), with P45.2 billion; and Autonomous Region in Muslim Mindanao, with P41.7 billion. Diokono said the “budget for real change” focuses on programs and projects that will help achieve the country’s 10-point socioeconomic development agenda. Diokno added that the Philippine economy is “deficient in all types of infrastructure.” He said the Duterte administration is committed to hike infrastructure spending from a low 5 percent to a high 6 percent to 7 percent of GDP next year. He said the total proposed budget for infrastructure is P860.7 billion, or 13.8 percent higher than this year’s budget. “We have proposed that P355.7 billion for infrastructure be spent for fixing and building road networks, railways, seaport and airport systems. The infrastructure outlay in 2017 is equivalent to 5.4 percent of the GDP. This would eventually make the Philippines on a par with its Asean neighbors by the end of this administration,” Diokno added. He also said the government has given the Mindanao Logistics Infrastructure Network P31.5 billion, higher than this year’s allocation of P19 billion, as part of the Duterte administration’s promise to pay equal attention to connecting lagging regions with growth centers. To support the administration’s drive against crime, illegal drugs and terrorism, the secretary said the funds allocated for the Philippine National Police (PNP) and Armed Forces of the Philippines (AFP) were increased substantially. “The PNP will receive P110.4 billion, higher by 24.6 percent than in 2016, to hire more policemen, acquire more guns and patrol ve-
hicles, and finance other activities for more effective crime suppression,” he said. Diokno said the AFP will receive P130.6 billion, which is 15 percent higher than in 2016, to intensify its counterterrorism efforts and to protect our boarders. The revised AFP modernization program will have P25 billion to give soldiers more weapons and equipment. According to the DBM secretary, the administration will increase the salaries of the military and police officers by pursuing a law that increases the base pay of uniformed personnel but reforms the pension system of retirees, as well. To declog the courts by creating more Hall of Justice and implementing the Enterprise Information System, P32.5 will be set aside for the Judiciary, which is higher by 21.5 percent than in 2016, he said. He added that the proposed budget for the agriculture and agrarian- reform sector is P120.5 billion, including the DA’s allocation of P45.3 billion to boost the production and marketing of crops, fisheries and livestock. Part of the DA’s budget is for speeding up the construction of farm-to-market roads, postharvest facilities and other infrastructure projects. The DBM also hiked the funding for the National Irrigation Authority to P36.4 billion to build and rehabilitate irrigations systems nationwide, and to subsidize the user’s fees that used to be charged to poor farmers. He said the education sector is proposed to have an allocation of P699.95 billion, or 20.9 percent of the total budget. “The Department of Education’s budget will be the highest among all departments, with P570.4 billion, a 31-percent hike compared to this year’s budget. This includes the P2.8-billion estimated allocation for new teachers from the Miscellaneous Personnel Benefits Fund,” he said. “This will sustain the K to 12 Program, construct nearly 37,500 classrooms for k to 12, including those for senior high school, hire 53,831 additional teachers and provide assistance to 2.7 billion students in private schools,” he said. Health sector is proposed to have an allocation of P151.5 billion, Diokno said. “The Department of Health will get P94 billion for the continuation of its universal health-care program. This allocation will, among others, be used to deploy more doctors and health workers to rural areas, and enhance the health facilities, such as local hospitals and drug-abuse rehabilitation centers,” he said. According to Diokno, the proposed 2017 budget also ensures the full implementation of the reproductive-health law, with P4.3billion allocation. He said the Philippine Health Insurance Corp. will be given P50.2 billion to sustain the health-insurance coverage of about 15.4 million indigent families and 5.4 million senior citizens. One of the pressing social problems of the country is affordable housing for the poor. With this, Diokno said the National Housing Authority will receive P12.6 billion for socialized housing, particularly the resettlement of informal settlers from danger zones and housing assistance for calamity victims. The DOTr will be given P7.3 billion for the resettlement of informal-settler families to be affected by the North-South Railway Project, he said. For his part, National Unity Party Rep. Karlo Alexei B. Nograles of Davao City, chairman of the House Committee on Appropriations, said his committee will allow each member of the lower chamber to scrutinize the national budget for next year. “We will allow House members to scrutinize each and every department and agency of the government on what they intend to do in order to effect the change that the President wants to bring in to the new administration,” Nograles said.
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A3
Illegal-drug trade linked to wildlife trafficking
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By Jonathan L. Mayuga @jonlmayuga
HERE is a possible link between the illegal-drug trade and wildlife trafficking. This is something authorities should look into, as the newly created antienvironmental crime task force moves to intensify the campaign against illegal-wildlife trade, an official of the Department of Environment and Natural Resources (DENR) said.
Biodiversity Management Bureau (BMB) Director Theresa Mundita S. Lim said illegal-wildlife trade is still rampant in the Philippines and it continues to be on the list of top trans-boundary crimes being committed with impunity, next to illegal drugs, arms and human trafficking. Lim said there is a need to look into the use of wildlife as drug mules, as law enforcers vowed to go after environmental offenders, like criminals, engaged
in the illegal-drug trade. “There are reports in other countries on the use of wildlife as drug mules,” she said. “Sometimes, shipments of wildlife caught by law enforcers include other contrabands,” Lim added. Lim said the DENR-BMB would provide the interagency environmental task force reports on the illegal-wildlife trade activities it has uncovered over the past years for input and possible integration in the task force’s strategic plan
Multibillion railway project to fast track Mindanao growth By Butch Fernandez @butchfBM
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multibillion-peso Mindanao railway project is expected to fasttrack development of President Duterte’s home region. Senate President Aquilino L. Pimentel III proposed on Monday the creation of the Mindanao Railways Corp. (MRC), which he envisions to “hasten the development of the entire island.” To pursue the railway project, Pimentel filed Senate Bill 112 to create the MRC, citing the collective experience of Japan, Canada, the United States and most of Europe, where, he noted, railroad networks spurred and sped up their national development. Pimentel pointed out that these nations railroads “opened up vast land areas for human settlement and made it possible to transport tremendous number of people and huge volume of goods at the lowest cost.” He also noted that the “influx of people into areas previously unsettled, the easy mobility of the populace, and the availability of goods and services needed for civilized life means higher productivity of the land and its people.” According to Pimentel, the proposed railroad network crisscrossing Mindanao would considerably shorten travel time between Zamboanga and his home city in Cagayan de Oro or Davao and Cagayan de Oro. “That will, in turn, mean a reduction of the travel cost for the people and for the transportation cost of goods whose end destination is the Visayas or
Luzon, or beyond our northern shores, or vice versa,” he added. The Senate President asserted the Philippines must benefit from the experience of other countries whose railway systems until today provide people and goods the cheapest and fastest way of mass-transit movement. Under Pimentel’s proposal, the MRC would have a corporate existence of 50 years, with an authorized capital of P100 billion, divided into P500 million common shares with par value of P200, fully subscribed by the national government. He added the initial paid-up capital of the MRC will be set at P20 billion with the balance provided under a continuing annual appropriation of not less than P2 billion from the national treasury. “Being a factor for socioeconomic development and growth,” Pimentel said the MRC, which is proposed to be headquartered in Cagayan de Oro, would be “part of the infrastructure program of the government, and would remain under government control during its existence.” The Senate leader added: “It would be administered with the view of serving public interests at optimum service, and while aiming at its greatest utility by the public, the utmost viability of its operation must also be protected.” He said this is intended to “ensure that services are rendered at the minimum passenger and freight prices possible.” Pimentel’s bill provides that the MRC, envisioned as an attached agency of the Department of Transportation, would be exempted from payment of all taxes.
Being a factor for socioeconomic development and growth [the MRC, which is proposed to be headquartered in Cagayan de Oro], would be part of the infrastructure program of the government, and would remain under government control during its existence.”—Pimentel
for enforcement. Unscrupulous individuals working for illegaldrug syndicates could be the same people behind the rampant illegalwildlife trade, using the same elaborate schemes, she said. Prior to the creation of the Task Force ng Kalikasan, there is the Philippine Operations Group on Ivory and Illegal Wildlife Trade, also known as Task Force Pogi, led by the DENR, which investigated illegal-wildlife trade. In January this year authorities seized five boxes containing tarsiers, a critically endangered species, and other endemic wildlife, and arrested an employee of the Office of the Transport Security (OTS) of the Department of Transportation (DOTr) following a sting operation in Pasay City. The operation, led by Task Force Pogi, conducted, in collaboration with the National Bureau of Investigation, uncovered an elaborate scheme to illegally export endemic wildlife, a modus operandi believed employed by members of a syndicate engaged in the illegal-wildlife trade, currently estimated to be worth $20 billion in Southeast Asia alone. The seized boxes, bearing stickers of the Bureau of Plant Industry, which say “Inspected,” yielded 11
$20B The estimated value of illegal-wildlife trade in Southeast Asia
tarsiers, 11 monitor lizards, eight sailfin lizards, six water snakes, five rat snakes, three scops owls, and two juvenile and one adult Philippine Eagle owls. The suspect, a middleman, who facilitated the illegal activity, Gerald Bravo, was eventually sacked from the Office of Transport Security under then DOTr. Bravo prepares the wildlife, applies for the permits and physically sends the animals to Japan via Philippines Airline’s cargo service. He is now facing charges for violation of the Wildlife Resources Conservation and Protection Act. The creation of the National A nt i - E nv i ro n me nt a l C r i me s Task Force, or Task Force ng Kalikasan, Lim said, is a welcome development and would boost the agency’s effort to combat wildlife trafficking. “This means
there will be more focus. On our part, we will continue to conduct information, education and communication campaigns,” Lim said. Environment Undersecretary for Field Operations Arturo Valdez, the designated head of Task Force ng Kalikasan, told the BusinessMirror the interagenc y task force would make life difficult for wildlife traffickers. The task force expects various law-enforcement agencies “to respond quickly to verified reports” of environmental crimes from affected communities. The task force is composed of at least five national government agencies, including the departments of the Interior and Local Government, Transportation, National Defense and Justice. The Armed Forces, the National Police and the Coast Guard will also play a major role in the enforcement of key environmental laws, including the logging ban, fisheries law and wildlife act. The DENR, being the agency mandated to manage the country’s environment and natural resources, w i l l lead the task force in going after large-scale environmental crimes. The task force, Valdez said, will
map out potential strategies and identify potential targets of operations, but immediately identified at least two specific targets as far as the illegal-wildlife trade is concerned. He said Palawan, considered as the countr y’s last ecological f rontier and Taw i-Taw i, particularly the Turtle Islands, are being closely monitored, along w ith several key biodiversity areas in Mindanao. A side from il lega l-mining, -logging and -fishing activities, the task force will also intensify the campaign against harvesting of forest and marine resources prohibited by law. Valdez said the task force expects the full support and cooperation of the military, the police and the Coast Guard, as he also vowed to build airtight cases backed by a complete staff work on each case. “ In t wo week s, t here w i l l be results. Our mandate is to stop environmental crimes. Lahat. Illegal logging, fishing and hunting,” he said. Like those engaged in the illegal-drug trade, wildlife traffickers have learned to avoid detection, smuggling in and out of the country, selling exotic or native wildlife.
More tourists from Thailand seen after DOT chief visit to BKK By Ma. Stella F. Arnaldo
Special to the BusinessMirror
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HE Department of Tourism (DOT) projects an increasing number of tourists from Thailand, with an “exchange tourism” agreement recently concluded with the Philippines. The DOT’s confidence is also boosted after travel agents from Thailand said they were coming to Manila in September for the Philippine Travel Exposition (Phitex), and tour major destinations in the Philippines, according to a news statement from the DOT. This developed as the Philippines registered a 13-percent hike in foreign visitors from January to May 2016, according to latest data from the DOT. The top 5 sources of foreign tourists were South Korea at 576,332 (up 5.6 percent from January to May 2015); the United States at 377,595 (up 7.7 percent); China at 285,348 (up 81 percent); Japan at 223,042 (up 9 percent); and Australia at 108,382 (up 6 percent). “Total earnings gained from tourism activities from January to May 2016 amounted to about P106.61 billion. This recorded a double-digit growth of 13.53 percent compared to P93.91 billion earnings for the same period in 2015,” a report from the DOT said. Tou r i sm Sec ret a r y Wa nd a Corazon T. Teo was in Bangkok recently to participate in the celebration of the 84th birthday of Thailand’s Queen Sirikit, who was born on August 12, 1932. Teo was there on invitation of the Tourism Authority of Thailand. In 2015 visitors from Thailand dipped by 4.2 percent to 44,038.
Department of Tourism officials at the Thai Travel Agents Association Meeting
13 percent The hike in tourist arrivals in January to May Tourists from Thailand account for less than 1 percent of the total foreign visitors to the Philippines. From January to May 2016, visitors from Thailand grew by 7.8 percent to 20,703, accounting for 0.82 percent of the total foreign visitors for that period. During the DOT chief ’s working visit, she met with Kobkarn Wattanav rangku l, T hai land ’s Minister of Tourism and Sports, who offered to cooperate with t he Ph i l ippi nes a nd e x plore projects in farm tourism, youth development, as well as women and indigenous communities. Teo, likewise, met with the Thai Travel Agents Association (TTA A) at the Tawana Ramada Hotel. It was during that meeting that TTA A President Suparerk
Soorangura revealed that his group would be visiting Manila and tour the cities of Cebu, Davao and Cagayan de Oro. Soorangura said their group especially wants to see the Mayon Volcano in Legazpi, go deep-diving, shop and get a taste of authentic Filipino cuisine, the news statement added. Teo, a top travel executive and tourism advocate herself, said she could learn from the Thai tourism executives in the government and private sector on how they were able to catapult their country to become one of the most favored destinations by travelers in Southeast Asia. In 2015 Thailand received 30 million foreign visitors, up 20 percent from 2014. It also earned some $45 trillion in tourism receipts in 2015, up almost 11 percent from 2014. In contrast, foreign visitors to the Philippines reached 5.4 million in 2015, an 11-percent from 2014. It earned $5.3 billion in tourism receipts last year, up 1.3 percent from 2014.
Teo was treated to a grand reception by the Royal Thai Navy and toured the Royal Grand Palace, the Emerald Buddha Temple, the Queen Sirikit Textile Museum, the Bang Pa-in Summer Palace, Bang Sai Royal Folks Arts and Crafts Center and the Asiatique Riverfront mall. The DOT secretary said she felt at home during her four-day visit to Bangkok because the Philippines and Thailand share a lot in common in terms of its scenic destinations, culture, traditions and quiet hospitality. “I realized that one would find their sceneries somewhat familiar to those that we have here but what struck me is the fact that we have a lot more to offer,” Teo said. She was invited to promote the Philippines in the Thai International Travel Fair in February 2017. Meanwhile, the DOT reported that other top visitor markets for the Philippines in the first five months of 2016 include Taiwan at 89,792 visitors (+29.45 percent); Canada at 82,340 (+11.42 percent), the United Kingdom at 76,275 (+14.85 percent); Singapore at 75,756 (down by 2.12 percent); and Malaysia at 60,911 (down by 6.5 percent). The DOT report pointed out that countries with substantial growth in inbound traffic during the five-month period were India with 36,823 arrivals (+17.85 percent); France with 28,336 (+24.20 percent); Spa i n w it h 11,737 (+26.14 percent); Sweden with 12,852 (+19.18 percent); Switzerland with 14,152 (+9.88 percent); the Netherlands with 14,088 arrivals (+12.81 percent); and Denmark with 9,038 (+25.39 percent).
Poor to benefit from hike in excise taxes—Pernia By Cai U. Ordinario
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@cuo_bm
oor Fi lipinos stand to benef it f rom t he pro posa l of the Depar tment of Finance (DOF) to hike f uel excise ta xes, according to the Nationa l Economic and Development Author it y (Neda). Socioeconomic Planning Secretary and Neda Director General Ernesto M. Pernia told reporters that higher fuel taxes mean more government revenues most of which can be used to address the needs of the poor.
“The philosophy is there should be burden sharing for the sake of nation-building, for the economy to develop, and to reduce poverty. Actually, the poor are the ones who are going to benefit from more revenues,” Pernia said. T he Ned a c h ief t hrew h is suppor t behind the DOF ’s plan to hike excise taxes for gasoline to P10 per liter from the current P4.53 per liter. T he DOF a lso proposed to hike excise ta xes for diesel to P6 per liter from P5.35 per liter. Pernia said there are also proposals to make
the excise-tax rate the same for diesel and gasoline because many big cars use diesel. “[It will have an impact on the labor force] but now is a good time to do that because of the low price of oil,” Pernia said. Based on the 2012 Family Income and Ex penditure Survey, Fi lipinos spent P73.987 bil lion in cash and in k ind for f uel and lubr icants. This is composed of P73.312 billion worth of cash expenses for fuel and lubricants in 2012 and P675 million in in-kind expenses.
This is the largest expense under the operation of personal transport equipment, which amounted to a total of P93.168 billion cash and in-kind expenses in 2012. In terms of taxes, Filipinos spent a total of P85.952 billion in 2012. The largest component of this is income taxes worth P79.973 billion, followed by real-estate taxes at P4.705 billion. The smallest component of this amount is classified under other direct taxes, which amounted to P1.273 billion in 2012.
AseanTuesday BusinessMirror
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Singaporeans glummest since 2009 on job concerns
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ingaporeans are the most pessimistic about the economy in seven years, as they’ve grown more gloomy about their quality of life, their income and job security. Mastercard’s consumer confidence index for the city-state plunged to 33.6 in the first half of 2016, down from 44.3 for the previous six months, the company said in a statement on August 11. It’s at the lowest level since June 2009, when the city’s GDP contracted for four straight quarters. “The drop in consumer confidence suggests that consumers will remain cautious ahead—rightfully so,” said Weiwen Ng, an economist at Australia & New Zealand Banking Group Ltd. in Singapore. “The risk of external weakness spilling into domestic activity, if it materializes, will continue to be a drag on the labor market, muting both growth and inflation outlook.” Singapore’s trade ministry on August 11 lowered the top end of its 2016 growth forecast, after the economy expanded less than previously estimated in the second quarter. Economists forecast Singapore’s economy to grow 1.8 percent this year, the slowest pace since 2009, when its economy contracted 0.6 percent, according to data compiled by Bloomberg. The consumer confidence index closely tracked the year-on-year GDP growth rate in the past two decades. Singapore’s consumer confidence, which Mastercard said has shown a “significant deterioration,” compares with a reading of 32.1 for Hong Kong, the lowest since the second half of 2011 and the weakest score in Asia. The poor outlook on employment contributed most to the decline in Hong Kong’s reading, Mastercard said. Between June and July, survey respondents were asked to give a sixmonth outlook on the economy, employment, regular income, the stock market and quality of life. Singapore’s residential jobless rate rose to a five-year high of 3 percent in the second quarter, reflecting the subdued economic environment. Meanwhile, the number of new homes sold in Singapore rose to the highest in a year in July, with buyers snapping up new projects after almost three years of price declines. Developers sold 1,091 units last month, compared with 536 in June, according to data released on Monday by the Urban Redevelopment Authority (URA). That’s the highest since July 2015, when 1,655 units were sold. Singapore’s government has been steadfast in its commitment to cool the housing market, maintaining real-estate tightening measures rolled out since 2009, even as the city-state’s home prices dropped for an 11th quarter. An index tracking private residential prices fell 0.4 percent in the three months ended June 30 from the previous quarter, capping the longest series of quarterly losses since 1975, when prices were first published, according to data from the URA last month. It is too early to relax the curbs, as doing so could result in a market rebound, National Development Minister Lawrence Wong said in February, while Finance Minister Heng Swee Keat reiterated that view in his budget speech in March, saying it was “premature” to loosen the restraints. Nicholas Mak of SLP International Property Consultants warned that the data series is volatile and there will be fewer projects offered in coming months because the government sold less land to developers in 2015. “However, buyers will still be interested, as there will be a gentle decline in prices this year,” said Singapore-based Mak, an executive director at SLP. He also said he doesn’t see major changes to the government’s curbs over the next 18 months. Home values have dropped 9.4 percent from the peak in September 2013. Bloomberg News
Editor: Max V. de Leon • Tuesday, August 16, 2016 A5
Thai economy expanded more than expected in second quarter
The NESDB said GDP growth this year will be toward the upper end of its range of 3.0 percent to 3.5 percent, with tourism and government spending likely to be the key drivers in the second half. The economic forecasting unit raised its estimate for tourist arrivals to 33.5 million this year, from an earlier estimate of 33 million. “Looking past the supports of tourist-related spending and fiscal stimulus, we continue to see a fragile base for activity in the Thai economy,” Benjamin Shatil, an analyst at JPMorgan Chase & Co. in Singapore, wrote on Monday in a client note. “This points to the possibility of further monetary easing from the central bank, if activity softens more noticeably into the second half.”
Government spending
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People walk along the beach in Hua Hin, Thailand. AP
3.5%
hailand’s economy grew more than analysts estimated in the second quarter, as the military government accelerated spending on road and rail projects to help offset weak demand for the nation’s exports.
GDP expanded 3.5 percent in the three months through June from a year earlier, the National Economic and Social Development Board (NESDB) said in Bangkok on Monday. That compares with the 3.3-percent median estimate in a Bloomberg News survey of 22
Thailand’s GDP growth in April to June
analysts. GDP grew 0.8 percent from the previous three months, compared with a 0.5-percent median estimate. The central bank earlier this month kept its key interest rate unchanged, opting to preserve its scope for future action and allow time for
the government’s fiscal spending to kick start growth. While investor confidence was bolstered by the peaceful completion of a national vote on the constitution on August 7, a series of bomb attacks in Thailand’s southern provinces late last week will test the resolve of a military government that has made security
a top priority since seizing power in a 2014 coup. “The recent bombs should be a onetime event and disappear,” NESDB Secretary-General Porametee Vimolsiri said on Monday at a media briefing. “We expect the government to keep the situation under control. We don’t count this as a risk factor for the second half. Tourists have started to return to affected areas and things are getting back to normal.”
Growth returns
The baht gained 0.2 percent to 34.712 against the dollar as of 11:47 a.m. in Bangkok. The benchmark SET Index of stocks fell 0.1 percent after a slide in tourism-related companies including Airports of Thailand Pcl. and Minor International Pcl.
Indonesia wins air-safety upgrade from US
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ndonesia, an aviation market with one of the world’s worst safety records, had its air-safety rating upgraded by the US Federal Aviation Administration (FAA), a move that may add momentum to flag carrier PT Garuda Indonesia’s expansion plans. The Southeast nation’s transport ministry said it received a letter from the US Embassy saying Indonesia got elevated to Category 1, meaning local carriers, including Garuda, can fly to the US and enter code-share agreements with US airlines. In 2007 the FAA had cut the rating to Category 2, citing serious concerns about the local civil-aviation regulator’s safety oversight and operational control systems. “This is an achievement we’ve been waiting for since 2007,” Suprasetyo, director general for Air Transport at the ministry, told reporters in Jakarta. “There are several airlines that are ready to fly to the US.” The higher rating holds better prospects for Garuda, which returned to profit last year, as it is allowed to add lucrative routes to North America. The upgrade came after the European Union scrapped a flight ban on Garuda in 2009 and in June this year abolished restrictions on three other Indonesian operators—PT Lion Mentari Airlines, Batik Air and Garuda’s low-cost unit Citilink. Among the four, only Garuda has scheduled flights to Europe.
Easing congestion
Among efforts to improve its
New Jakarta airport terminal flooded just days after opening
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A VIEW of a Garuda aircraft taking off.
rating, Indonesia opened a new terminal at its main airport in Jakarta this month to ease congestion and has also added structures and equipment to bolster airport safety. “The efforts of the DGCA over the past year have demonstrated the commitment of the DGCA, the Ministry of Transportation and the government of Indonesia to establishing a system of effective aviation safety oversight,” the US embassy said in its letter, referring to the Directorate General of Civil Aviation, the local regulator. A Category 1 rating means a
This is an achievement we’ve been waiting for since 2007.” —Suprasetyo nation’s civil aviation authority complies with international standards. Category 2 means a country either lacks laws or regulations necessary to oversee its airlines in line with mini-
mum international standards, or its civil aviation authority is deficient in one or more areas. Several aviation accidents in recent years have left Indonesia with a fatal air-crash rate of more than three times the global average, even amid the government’s efforts to improve transportation safety. A shortage of skilled pilots, ground crew and air-traffic controllers, as well as outdated equipment and planes, have all contributed to the deadly accidents, including an AirAsia Bhd. Flight 8501 crash in December 2014 that killed all 162 people onboard. Bloomberg News
Prime Minister Prayuth ChanOcha has issued a series of economic-stimulus measures valued at more than $18 billion since September last year to help support local demand. Fiscal spending from April through June jumped 18 percent from the same period last year to 650 billion baht ($18.7 billion), accelerating from 8.7 percent in the previous three months, according to the central bank. The NESDB expects the government will disburse a further 110.5 billion baht of stimulus funds in the second half, after handing out 217 billion baht in the first six months. The economy is also expected to get a boost from a recovery in domestic spending, after farm incomes expanded for the first time in 10 quarters in the second quarter, according to the NESDB. That may help offset weaker demand for Thailand’s exports, which contracted 3.1 percent in the second quarter. Tourist arrivals rose 8.2 percent from the same period last year to 7.55 million, according to the central bank. Bloomberg News
$560M
he operator of the Indonesian capital’s main airport has apologized to passenThe project cost of gers for flooding at its brand-new the new Jakarta terminal after airport terminal rains overcame drainage pipes and inundated the arrivals area on Sunday. The $560-million terminal opened last week to domestic flights by national carrier Garuda, but has been plagued by complaints about its lack of readiness. The airport operator and government hope the new terminal, and a third runway that is under development, will relieve overcrowding at SoekarnoHatta airport and make Jakarta a rival to Singapore and Bangkok for international stopovers in Southeast Asia. PT Angkasa Pura II, the airport operator, said it brought the flooding under control within an hour and is investigating the cause. Local media said drains might have been clogged by construction debris. The company plans for other airlines to gradually move their flights to the terminal and it plans to start refurbishing two old terminals, built in 1984 and 1992, later this year. Soekarno-Hatta airport will be able to handle 62 million passengers a year once the renovated terminals are fully operational again in early 2018. The airport handled about 54 million passengers last year, making it the 18th busiest in the world, according to Airports Council International. AP
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Tuesday, August 16, 2016 • Editor: Lyn Resurreccion
The World BusinessMirror
Prime Minister Abe avoids war shrine
Japan marks 71st end of WWII
www.businessmirror.com.ph
HK protest leaders avoid jail time for illegal rally in 2014
Three Hong Kong student protest leaders (from left) Joshua Wong, Nathan Law and Alex Chow walk out from a magistrate’s court in Hong Kong on Monday. They have avoided prison time for leading or encouraging an illegal rally that sparked huge prodemocracy street protests two years ago as a magistrate sentenced them to community service on Monday. AP/Vincent Yu
H Japanese lawmakers walk after offering prayers to the war dead at the Yasukuni Shrine in Tokyo on Monday. Japan marked the 71st anniversary of the end of World War II. AP/Shizuo Kambayashi
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OKYO—Japanese Prime Minister Shinzo Abe stayed away from a Tokyo shrine that honors convicted war criminals among the war dead apparently not to spark controversy from neighboring countries as Japan marked the 71st anniversary of the end of World War II. Abe on Monday sent a pair of religious ornaments to the Yasukuni Shrine, apparently as Tokyo tries to arrange a meeting with Chinese President Xi Jinping at the Group of 20 (G-20) summit in China next month. At a state memorial ceremony later on Monday, Abe reiterated his pledge not to allow the tragedy of war be repeated, but he neither mentioned Japan’s wartime actions in Asia nor apologized to its victims. In his last four speeches to mark the end-of-war anniversary, Abe has not acknowledged Japan’s war atrocities or expressed his regrets over them. That contrasted with a statement from Emperor Akihito. “As I reflect the past and bear in mind the feelings of deep remorse, I earnestly hope that the ravages of war will never be repeated,”
Akihito, 82, said after observing a moment of silence with other participants. It was his first public appearance outside the palace since he indicated his abdication wish in a video message last week. Abe visited the Chidorigafuchi National Cemetery for unidentified soldiers on his way to the memorial ceremony at the nearby Budokan hall. As a sign of the lingering bitter feelings in Asia over Japan’s actions, a group of South Korean lawmakers picked the day to land on disputed small islands in the Sea of Japan to celebrate their country’s liberation from Japanese colonization. The islands are controlled by South Korea but also claimed by Tokyo. Chief Cabinet Secretary Yoshihide Suga reiterated Japan’s claims to the islands and said the lawmakers’ actions were “unacceptable and extremely
Japanese Prime Minister Shinzo Abe (left) bows in front of the main altar as Japan’s Emperor Akihito and Empress Michiko watch him during a memorial service at Nippon Budokan martial arts hall in Tokyo on Monday, marking the end of World War II. AP/Shuji Kajiyama
regrettable.” He said Tokyo had protested to Seoul. Tensions between Japan and China have also risen this month as China increased its maritime activities in the disputed East China Sea. Abe’s last visit to the Yasukuni Shrine in December 2012 had drawn sharp rebukes from China and South Korea, which see Yasukuni as a symbol of Japan’s wartime militarism and consider lawmakers visits as whitewashing of Japan’s wartime aggression. His specia l aide Yasutoshi Nishimura, and a ruling Liberal Democratic Party lawmaker, told reporters that he offered a donation from Abe to the shrine along with the religious ornaments and prayed on his behalf. Dozens of law makers paid
their annual tribute to the war dead at the shrine. Hidehisa Otsuji, head of a nonpartisan group of lawmakers who routinely visit Yasukuni, told reporters that Abe’s absence would be understood (by the war dead) “if it’s a judgment based on national interest.” Separately, a group of ultraconservative members chaired by Tomomi Inada, a recently appointed defense minister known for her hawkish remarks and historical views that downplay Japan’s wartime atrocities, also visited the shrine. Inada, who is a regular at Yasukuni during ceremonial occasions, is out of the country this year in Djibouti, an east African nation where Japanese troops are taking part in peacekeeping operations. AP
ONG KONG—Three Hong Kong student protest leaders have av o i d e d p r i s o n t i me for leading or encouraging an i l lega l ra l ly that sparked huge pro-democracy street protests two years ago. A magistrate sentenced Joshua Wong and Nathan Law to community service on Monday, while a third activist, Alex Chow, received a suspended sentence. Nineteen-year-old Wong became the most high-profile leader of the protests that erupted in late September 2014, which marked the former British colony’s most turbulent period since China took control in 1997. Youthful protesters occupied key thoroughfares for 11 weeks to press demands for unrestricted elections for the city’s top leader. Wong and Law were found guilty last month of taking part in an unlawful assembly. Wong was given 120 hou rs of commu nit y service by Magistrate June Cheung, while the 23-yearold Law received 80 hours. Chow, who was found guilty of inciting others to join an unlawful assembly, was also initially given 120 hours of community service. Howe ve r, b e c au s e t he 25-year-old is due to start a yearlong master’s program at the London School of Economics in September, he would be unlikely to complete it so the magistrate instead gave him a three-week prison sentence, suspended for a year. Student leaders and rights groups have slammed the
prosecutions for being politica l ly motivated. Wong told reporters outside court that he would “still commit civil disobedience through nonviolent direct action to show my commitment and persistence to fight for human rights, democracy and freedom in Hong Kong.” The three were charged with storming into a fencedof f cou r t y a rd k no w n a s Civ ic Square beside Hong Kong’s government complex on the evening of Friday on September 26, 2014, in a bid to protest Beijing’s plan to restrict the elections. They and dozens of other young activ ists were detained by the police. In response, crowds of demonstrators f looded the area over the weekend to demand their release. The police responded late on September 28, 2014, w ith dozens of volleys of teargas, a move that back f ired and drove even more people on to the streets, kick-starting what became known as the Umbrella Movement protests. In her sentencing, Cheung said she took into account the fact that the three, who had no previous criminal convictions, did not intend to harm anyone or benefit themselves with their actions. She said she decided not to hand out tough sentences as a deterrent, saying it would be unfair to the three, who she said had shown milder behavior compared with that of other political events that have erupted in Hong Kong since then. AP
Ex-Bush official says Trump’s trade plan is ‘recipe for disaster’ W ASHINGTON—A Republican and former Cabinet secretar y said he’s supporting Democrat Hillar y Clinton to be president partly because Donald Trump’s economic plans are the ty pes of strategies followed by “ver y poor countries” and don’t fit the world ’s largest economy. “I haven’t heard an economic concept come out of Trump’s mouth, except for protectionism and lower taxes,” Carlos Gutierrez, who led the Commerce Department in the George W. Bush administration from 2005 to 2009, said in an interview on Sunday on CNN’s State of the Union. “You put those two together,
that is a recipe for disaster.” W hi le suppor t ing Tr ump’s proposed ta x cuts, the Cubanborn Gutierrez criticized the R e pu bl ic a n nom i ne e ’s t r ade policies. “He has this sort of import-substitution strateg y, which is a strateg y like an underdeveloped countr y,” Gutierrez said. “Ver y poor countries t h i n k t h at way : We h ave to substitute our imports” w ith domestically produced goods. Gutierrez, former CEO of cereal maker Kellogg, said that, while he would have preferred former Florida Gov. Jeb Bush over Trump as the Republican nominee, Clinton “would make a darned good president.” She
le a r ned f rom her hu sba nd ’s presidency in the 1990s that cutting budget deficits drives econom ic g row t h , Gut ier re z said. “I don’t want to live in a society that I think Donald Trump will create,” Gutierrez said. “I’m going to do everything possible to make sure that the GOP doesn’t get destroyed.” Meanwhile, taking a goodcop, bad-cop approach, Trump and his campaign on Sunday blasted the media for what they said was unfair news coverage, while running mate Mike Pence offered a more conciliatory tone in defending the GOP presidential nominee.Trump “speaks his heart and he speaks his mind”
and in doing so has drawn attention to important issues, Pence said on Fox News Sunday. “Stay tuned. It’s still early in this campaign,” Pence added, noting that Trump on Monday will detail his vision for “confronting radical Islamic terrorism.” He offered no details. For much of the last week, the Trump campaign has been responding to his repeated statements that President Barack Obama “founded” the militant Islamic State group. Trump later described his remarks as sarcasm, but the episode was the latest to raise questions about the businessman’s temperament and ability to be commander in chief.
On Sunday Trump took aim at the news media for what he viewed as distorted and biased repor t ing. He t hreatened on Saturday to ban more news organizations from covering his campaign, and he followed up by tweeting that the “disgusting and corrupt media” was to blame for his trailing Hillary Clinton in polls. His campaign chairman, Pau l Manafor t, c laimed that news organizations were ignoring substantive aspects of the campaign and had essentially taken sides with Clinton. “Here was a debate that could have been had,” Manafort said on CNN’s State of the Union, referring to trade, energy and
other issues laid out in economic speeches by both candidates last week. “Instead, the media chose to take…the Clinton campaign narrative and go on attack on Donald Trump.” Pence, for his part, has spoken before about trying to get Trump’s bans against reporters lifted. On Sunday he reiterated his support for the public’s right to know. “And we’ll continue that, we’ll continue to advance that principle.” Asked whether his role was that of the “cleanup crew,” Pence laughed and said, “I couldn’t be more honored to be campaigning shoulder to shoulder with a man who I believe is going to be the next president.” Bloomberg News/TNS
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Tuesday, August 16, 2016
A7
Japan’s economic growth slows as business spending slumps
A shopper buys a product at a dry seafood shop in Tokyo. Japan’s economy grew at a slowerthan-forecast 0.2 percent annual rate in the April-to-June quarter, as the recovery was sapped by weaker exports and business investment, the government said on Monday. AP/Eugene Hoshiko
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apan’s economy grew less than forecast in the three months through June 30, as business spending contracted for a second straight quarter and exporters struggled with the resurgent yen.
Key points
GDP expanded by an annualized 0.2 percent in the second quarter, less than the median estimate of economists for a 0.7-percent increase. Business spending declined 0.4 percent from the previous three months (estimate plus 0.2 percent), according to the data released by the Cabinet Office on Monday. Private consumption increased 0.2 percent over the same period (estimate plus 0.2 percent). Net exports subtracted 0.3 percentage point from GDP.
Big picture
Policy-makers are struggling to find a strategy to produce consistent g row t h, w it h t he economy osci l lating bet ween slight expansion and contraction. Businesses and consumers have been reluctant to spend, resulting in negative GDP numbers in five quarters over the past three years. The data keeps pressure on the Bank of Japan to consider more monetary stimulus at its September meeting, while increasing the need for the government to tackle structural obstacles to growth.
Economist takeaways
“With gains in the yen and declines in stocks, companies are holding off their spending,” said
0.2%
The percentage of GDP growth in the second quarter
Atsushi Takeda, an economist at Itochu Corp. in Tokyo. “The yen’s gains are hurting exports when overseas demand remains weak.” “Look ing ahead, publicworks spending will be the only support for the economy as the f isc a l st i mu lu s pac k age w i l l be carried out later this year,” Ta ked a said. “But there’s no change to the picture that the economy lacks a strong driver to boost growth, so we can’t really expect a solid recover y…. The Bank of Japan will probably have no choice but to take some easing action at its September meeting,” he said.
The details
Measured quarter on quarter, GDP didn’t budge (estimate plus 0.2 percent). Private inventories contribution to GDP was zero. The GDP deflator rose 0.8 percent from a year ago. Purchases of regular cars was firm, while that of mini cars was wea k. Spending on telev isions contributed to growth. There was a decline in eating out. Purchases by non-residents, an indicator for consumption by foreign visitors, fell for first time since the final quarter of 2012. Bloomberg News
Hostesses pose for photos during a break from the Group-of-20 Finance Ministers and Central Bank Governors meeting in Chengdu in Southwestern China’s Sichuan province, on July 24. AP/Ng Han Guan
Should not be distracted by other topics, such as the South China Sea issue
China: G-20 should focus on econ
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hina will seek to keep Groupof-20 (G-20) leaders focused on economic development when they meet next month in Hangzhou. When asked whether China will allow discussion of the South China Sea issue during the September 4 and 5 summit meeting, Vice Foreign Minister Li Baodong said leaders shouldn’t be distracted by other topics. Li made clear China wants to avoid sensitive diplomatic issues. The consensus among members is to “focus on economic development and not be distracted by other parties,” Li said when asked about territorial disputes in the South China Sea. “The Hangzhou summit must focus on economic issues,” Li added. “This is what people want to talk about most at the summit.” Li gave similar responses to questions about China’s resolute opposition to South Korea’s deployment of a US missile defense
system. The G-20 summit is about global economic governance, trade and investment, Li said at the briefing in Beijing on Monday. Leaders of the world’s largest economies will gather at a time of slowing trade and tepid global economic growth. China suffered a setback in July when an international tribunal said its efforts to assert control over the South China Sea exceeded the law—a move that may empower other claimant states. China has largely ignored the ruling. On the economic front, China’s recent stabilization showed signs of faltering in July, as private businesses remain reluctant to invest and authorities seek to curb financial risks and cut excess capacity. Policy-makers have had suc-
cess restoring calm to the nation’s markets, a year after China’s shock devaluation of the yuan rocked assets around the world. Speaking at the same briefing in Beijing on Monday, People’s Bank of China (PBOC) Deputy Governor Yi Gang said yuan internationalization is a market-driven process, and its development has surpassed the expectations of many. Yi said he’s confident in the yuan’s internationalization process. The central bank said it would give markets a greater role in deciding the exchange rate while keeping the currency basically stable, according to the PBOC’s annual yuan internationalization report. China will propose a joint initiative to revive weak global growth at the G-20 summit, amid rising protectionist sentiment in the United States and Europe, officials said on Monday. The meeting in the eastern Chinese city of Hangzhou comes as an unusually weak global economic recovery is helping to fuel the popularity of US and European political movements that advocate protection for local industries.
Details of Beijing’s proposal still are being worked out but will include reforms aimed at strengthening the global financial system and promoting technological innovation, said the Chinese finance and foreign affairs officials. They gave no indication it m i g ht i nc lu d e a n e c o no m i c stimulus. Some investors have expected such a measure but officials at two previous G-20 gatherings this year said the timing was wrong, because individual economies face different conditions and need to take actions tailored to their own needs. The proposal will stress “inclusive growth” to spread economic benefits widely and shore up support for free trade, said a deputy finance minister, Zhu Guangyao. He said governments should be on “high alert” to “anti-globalization” sentiments. “If the people cannot feel the benefits, then this sort of development cannot truly improve people’s lives, and people will have mixed feelings about such development,” he said. Bloomberg News and AP
IMF steps deeper into Mideast cauldron with loan to Egypt S. Africa’s ANC seeks budget
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he International Monetary Fund (IMF) is stepping up lending in a region where economic reformers haven’t exactly had the most success. Hoping to restore the confidence of foreign investors, Egypt announced an initial agreement on Thursday to borrow $12 billion over three years from the IMF, joining Iraq, Tunisia and Jordan in taking money from the Washington-based fund. Egypt’s program is likely to see the government of President Abdel-Fattah El-Sisi move toward a more flexible exchange rate, rebuild foreign-currency reserves and cut spending. The influx of capital offers an opportunity to restore economic stability in a region beset by political turmoil, terrorism and the collapse in the price of oil, its most important export. While all the IMF borrowers, except Iraq, are fuel importers, they’ve received flows of aid and remittances from wealthy producers, such as Saudi Arabia, which are now drying up. The fund faces many of the challenges it encountered when it lent to Egypt and other countries decades ago, such as poor governance and public resistance to belt-tightening.
“The IMF is fighting an uphill battle,” said Jon Alterman, a former State Department official who’s now director of the Middle East program at the Center for Strategic and International Studies in Washington. “The events of the last five years didn’t convince Mideast leaders that the Washing ton Consensus was right. It deepened their suspicions of opening up systems, for fear that if you open up, you invite political instability.” The Washington Consensus, a term coined in 1989, refers to a mix of policies espoused by Washington-based institutions, such as the IMF and World Bank, that emphasizes budget cuts, open trade and capital flows, and deregulation. The IMF, now under the leadership of Christine Lagarde, has softened its position on the need for budget cuts and conceded that capital controls can be useful in some situations.
Urgent matter
“Egypt is a strong country with great potential, but it has some problems that need to be fixed urgently,” Chris Jarvis, IMF mission chief for Egypt, said in a statement after the deal was announced. The new loan program
will support the “comprehensive” reforms approved by the nation’s parliament, he said. If endorsed by the fund’s executive board and Egyptian lawmakers, the agreement will be the IMF’s secondbiggest active traditional loan program after Ukraine. Jordan signed a letter of intent last month for a $700-million credit facility, while Iraq in July received a three-year standby arrangement for about $5.3 billion. The loan to Egypt conjures memories of the country’s experience with the IMF in the 1990s. At the time, then-President Hosni Mubarak implemented many of the policies recommended by the fund, including budget cuts and privatization, and the IMF held up the country as an economic success story. But in the Arab Spring uprising that broke out in Tunisia in 2010, and spread to Egypt and other nations the following year, protesters argued the reforms didn’t improve poverty and inequality. “ T he IMF has a histor ica l proble m of advo c at i ng one size-fits-all policies,” said Wael Gamal, a prominent Eg y ptian economic commentator and a critic of past agreements with the fund. “It still does.”
Tough measures
Ahmed K a m a ly, economics professor at the American University in Cairo, said that the “autocratic nature of most Arab countries means that governments can impose tough economic measures to dodge the bullet with relative ease.” “But once the urgency fades, officials turn away from undertaking reforms, either to appease the public or to protect the interests of cronies,” Kamaly said. Eg y pt’s experience with IMF programs in the 1990s are a clear example, he said. The reform momentum that started in 1991 faded by the end of the decade as the economy stabilized, K amaly said. The risk that the new IMF money would be spent without real reforms is a “big concern,” former Deputy Prime Minister Ziad Bahaa el-Din said in a phone interview. “It’s extremely important for parliament, the society, the media to monitor carefully whether the program is implemented in the right way to ensure positive impact,” he said. “It’s extremely important to have a dialogue on who bears the cost because everybody knows that there will be some level of pain with this.” AP
focus on jobs as support drops
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o u t h Africa’s African National Co n g re s s (A N C ) w i l l p re s s t h e government to prioritize creating jobs and alleviating poverty in the national budget, said Gwede Mantashe, the ruling party’s secretary-general. “It can’t be business as usual,” Mantashe told reporters in Pretoria, the capital, on Sunday after a national executive committee meeting to discuss the ANC’s weaker performance in municipal elections this month. “To effectively deal with the triple challenge of unemployment, poverty and inequality, government in the coming Cabinet lekgotla must reprioritize the budget” to ensure National Development Plan (NDP) programs are funded, he said. The ANC is seeking ways to reverse a decline in support after this months recording its worst performance in an election since Nelson Mandela led the party to power to end apartheid in 1994. It won 54.5 percent of the popular vote in the August 3 municipal ballot, down from 62.2 percent in a national election two years ago, and it gave up outright majorities in four of the country’s eight major cities. The NDP is the government’s 20-year plan to boost economic growth and slash a 27-percent unemployment rate. The poor performance in the election wa s a “s e r i o u s s e t b a c k ” fo r s o c i a l transformation and the party’s leadership agreed to take collective responsibility for
the drop in support, Mantashe said. The party “resolved to take immediate and bold actions to address the weaknesses and shortcomings that led to the decline of our electoral support,” he said.
‘Populist posture’
The NDP was released in 2012 as the government’s proposals to accelerate economic growth, create jobs and attract investment. The central bank projects growth will be flat this year. President Jacob Zuma’s Cabinet will hold a four-day meeting, known as a lekgotla, this week to discuss the economy and other national issues. “For a long time we have been talking about the lax attitude toward the implementation of the NDP, but now there are consequences where they’ve lost municipalities, now they want to talk to Treasury to finance the NDP,” Ralph Mathekga, a political analyst at the Johannesburgbased Mapungubwe Institute for Strategic Reflection, said by phone. “That is why this budget rhetoric is coming out and with a very populist posture.” Finance Minister Pravin Gordhan has pledged to keep spending under control, cutting South Africa’s budget deficit to 2.4 percent of gross domestic product in three years from about 4 percent and to limit debt to less than 50 percent of GDP. Bloomberg News
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The World
Tuesday, August 16, 2016 • Editor: Lyn Resurreccion
BusinessMirror
Boko Haram releases new video of kidnapped Chibok schoolgirls
276
The number of Nigerian schoolgirls kidnapped by Boko Haram in April 2014
This undated image taken from video distributed on Sunday shows an alleged Boko Haram soldier standing in front of a group of girls alleged to be some of the 276 abducted Chibok schoolgirls held since April 2014, in an unknown location. The video posted on Twitter appears to come from the Boko Haram Islamic extremists making threats about the safety of the captive girls if the government battles against the group. Militant video/Site Institute via AP
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OHANNESBURG—Some of the 276 Nigerian schoolgirls kidnapped by Boko Haram have been killed in Nigerian air force bombings, the group said in a video released on Sunday.
The video appeared to be the first proof in months that dozens of the girls are still alive, more than two years after they were captured from the town of Chibok. Their faces bleak, the group of several dozen girls could be seen wearing long Islamic gowns, guarded by a masked man in camouflage. Some fought back tears. Many held babies, likely the product of rape after the girls were forcibly married to fighters. About 40 of the girls have been married off, the
masked man said. “No one cares for us,” one girl, identified as Maida Yakubu, said in the video. “We are suffering here. The aircraft has come to bombard us and killed many of us. Some are wounded,” Yakubu said, according to an Associated Press translation. “Every day we are in pains and suffering. So are our babies. Some of our husbands that we married also are injured, some dead. “Please go and beg the govern-
ment of Nigeria to release the members of our abductors so that they, too, can free us to let us come home,” she said. “We are really suffering, there is no food to eat, no good water to drink here.” The masked fighter, who seemed to represent the Boko Haram faction led by Abubakar Shekau, demanded the release of prisoners in return for releasing the girls. The group split recently, after an Islamic State (IS)-run magazine named Abu Musab Barnawi as the new leader of Boko Haram, angering Shekau and his followers. Both factions have since released video and audio statements attacking one another. The spokesman warned in the video that no one would see the girls again unless the government stopped fighting the group and released Boko Haram prisoners. “Presently, some of the girls are crippled, some are terribly sick and some of them, as I had said, died during bombardment by the Nige-
rian military,” the spokesman said. The video showed what the fighter said were the bodies of girls killed by air strikes. “Let me say again, release our people and we release your girls. Otherwise, they will never be released. If you think you have the power to come and rescue them, go ahead and try,” the spokesman said, according to a translation by a Nigerian newspaper, the Premium Times. The video was posted on Twitter on Sunday by a Nigerian journalist, Ahmed Salkida, who has Boko Haram contacts. The Nigerian army said it was seeking to question Salkida. Boko Haram controlled a vast swath of territory in the northeast of the country until last year, when a coalition of armies from Nigeria and neighboring countries drove the Islamist terrorist group out of all the major towns that it controlled. The Nigerian air force has been bombing Boko Haram’s stronghold in the Sambisa forest, in the north-
east, near the Cameroonian border. Boko Haram’s scorched-earth policies have forced farmers off their land, stopped fishermen from fishing in Lake Chad and prevented the transport of food across the region, leaving a large area facing starvation. The policy appears to have hurt Boko Haram as much as it hurt surrounding communities, with many fighters surrendering to Nigeria’s military because of hunger. The girls were kidnapped in April 2014 from their boarding school, where they had gathered for examinations. Boko Haram fighters stormed the school late at night, loaded the girls into trucks and took them away. Several dozen of the girls managed to escape by jumping from the trucks and running into the bush. One, Amina Ali, was recovered in May, married to a Boko Haram fighter, with a baby. But 218 are still missing. A few weeks after they were kidnapped, about 100 of the girls were shown on video dressed in Islamic clothing. Some 15 were shown in a video released in May this year. The Nigerian government, then under former President Goodluck Jonathan, was harshly criticized for failing to act swiftly to locate and recover the schoolgirls. After the kidnapping, Shekau appeared in a video, grinning and laughing, calling the girls “slaves” and saying he planned to sell them in the market. Activists in Nigeria initiated daily protests and the Twitter hashtag #BringBackOurGirls, triggering peaceful protests and garnering support from people around the world. Los Angeles Times/TNS
N. California wildfire forces 4,000 to evacuate L
OWER LAKE, California—A wildfire destroyed at least 10 homes and forced some 4,000 of people to flee their homes as flames jumped a road and moved into a Northern California town located miles away from a devastating wildfire nearly a year ago. The fire reached Main Street in Lower Lake, a town of about 1,200 about 90 miles north of San Francisco, on Sunday and burned the post office, a winery, a Habitat for Humanity office and several businesses as thick, black smoke loomed over the small downtown strip. Staff at a hospital in Clearlake, a neighboring town of about 15,000, rushed to transfer 16 patients to another hospital, while firefighters carried goats and other animals to safety as homes burned around them. The blaze was one of 11 large wildfires burning in California, where high temperatures combined with parched conditions brought on by a five-year drought raised the fire danger. In central California a dayold wildfire burned 20 structures and threatened 150 homes. Officials confirmed 10 homes around Lower Lake were burned, although witnesses said they could see more. Tragically, the Habitat for Humanity office was working to raise money to help rebuild homes destroyed by a devastating wildfire that killed four people and destroyed more than 1,300 homes nearly a year ago. “Emotions are still incredibly raw from the Valley Fire,” state Sen. Mike McGuire said about last year’s wildfire.
Multiagency fire crews battle a wildfire as structures catch fire in Lower Lake, California, on Sunday. The fire was creating its own weather pattern and shifted northward into Lower Lake in the afternoon, said Suzie Blankenship, a spokesman for the California Department of Forestry and Fire Protection. Hector Amezcua/The Sacramento Bee via AP “I don’t think any of us thought we’d be back where we are tonight,” he said. The fire broke out on Saturday afternoon and grew to nearly 5 square miles as firefighters struggled to get a handle on
the largely out-of-control blaze in 100-degree heat and windy conditions. The fire created its own weather pattern and shifted northward into Lower Lake in the afternoon, said Suzie Blanken-
ship, a spokesman for the California Department of Forestry and Fire Protection. The fire was throwing embers and spreading rapidly as it fed on bone-dry vegetation. Large, explosive fires have
torn through drought-plagued or hardto-reach areas across California this summer, including a stubborn blaze near the picturesque Big Sur coastline that has burned 113 square miles since late July and destroyed nearly 60 homes. Residents in Lower Lake and surrounding communities are still recovering from California’s third-most-destructive wildfire last year, which burned 120 square miles and cost more than $1.5 billion in damages. A report issued last week concluded that faulty wiring in a hot tub ignited the fire. Lt. Doug Pittman, a Marin County sheriff’s spokesman who was working on behalf of Cal Fire, said residents fled their homes very quickly this weekend. “They’ve seen it before,” Pittman told the San Francisco Chronicle. In central California, similar conditions led the wildfire near Lake Nacimiento, about 180 miles northwest of Los Angeles, to explode from 2 square miles to nearly 7 square miles on Sunday, said Cal Fire Spokesman Bennet Milloy. The blaze shifted north toward the lake, prompting authorities to evacuate some residents by boat. In Southern California, forecasters warned of high fire danger due to a heat wave and gusty winds. Temperatures reached triple digits in numerous places, stoking an increased risk of wildfires across the mountains of Ventura and Los Angeles counties through at least Wednesday, the National Weather Service said. AP
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I.s. recruits are know-nothing
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ARIS—The jihadi employment form asked the new recruits to rate their knowledge of Islam on a scale of one to three. And the Islamic State (IS) group applicants, herded into a hangar somewhere at the Syria-Turkey border, turned out to be overwhelmingly deemed ignorant. The extremist group could hardly have hoped for better. At the height of the IS’s drive for foot soldiers in 2013 and 2014, typical followers included the group of Frenchmen who went bar-hopping with their recruiter back home, the recent European convert who now hesitantly describes himself as gay, and two Britons who ordered The Koran for Dummies from Amazon to prepare for jihad in Syria. They were grouped in safe houses as a stream of IS imams filled in the gaps, according to court testimony and interviews by The Associated Press (AP). “I realized that I was in the wrong place when they began to ask me questions on these forms like ‘when you die, who should we call?’” said the 32-year-old European convert, speaking to the AP on condition of anonymity for fear of reprisals. He went to Syria in 2014 and said new recruits were shown IS propaganda videos on Islam, and that the visiting imams repeatedly praised martyrdom. Far from home and unschooled in religion, most of the recruits were in little position to judge. An AP analysis of thousands of leaked IS documents reveal most of its recruits from its earliest days knew little about Islam. According to the documents, which were acquired by the Syrian opposition site Zaman al-Wasl and shared with the AP, 70 percent of recruits were listed as having just “basic” knowledge of Shariah—the lowest possible choice. Around 24 percent were categorized as having an “intermediate” knowledge, and just 5 percent were considered advanced students of Islam. The group preys on this ignorance, because it allows extremists to impose an interpretation of Islam constructed to suit its goal of maximum territorial expansion and carnage as soon as recruits come under its sway. Among the documents were forms for nine of the 10 young men from the eastern French city of Strasbourg recruited—like the European convert—by a man named Mourad Fares. One of them, Karim Mohammad-Aggad, described going barhopping with Fares. He told investigators that IS recruiters used “smooth talk” to persuade him. He traveled with his younger brother and friends to Syria in late 2013. Seven of them returned to France within a few months and were arrested. Two died in Syria, while his 23-year-old brother, Foued, returned as one of the men who stormed the Bataclan on November 13, 2015, in a night of attacks that killed 130 people in Paris. “My religious beliefs had nothing to do with my departure,” Karim MohammadAggad told the court before he was sentenced to nine years in prison. “Islam was used to trap me like a wolf,” he said, according to court documents. When pressed by the judge on his knowledge of Shariah, Islamic law and how IS implements it, Mohammad-Aggad appeared dumbfounded, saying repeatedly: “I don’t have the knowledge to answer the question.” One of his codefendants, Radouane Taher, was also asked by the judge about whether beheadings conformed to Islamic law. He couldn’t say for sure, answering: “I don’t have the authority.” Patrick Skinner, a former CIA case officer with experience with Mideast extremist organizations, said most who claim allegiance to IS are “reaching for a sense of belonging, a sense of notoriety, a sense of excitement.” “Religion is an afterthought,” said Skinner, who now works for the Soufan Group security consultancy. Those who truly crave religious immersion would go to Al-Azhar in Cairo, he added, referring to the thousand-year-old seat of learning for Shariah and Koranic studies among Sunni Muslims. The Soufan Group has said the IS group’s most active supporters often grapple with questions of identity and lack the knowledge about Islam to challenge its ideologues. Take Mohammed Ahmed and Yusuf Sarwar, friends from the British city of Birmingham who joined IS. They were arrested after returning to Britain, and their 2014 trial revealed they had ordered “The Koran for Dummies” and “Islam for Dummies” books in preparation for their trip to Syria. AP
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Tuesday, August 16, 2016
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Racial and partisan divides shape American views of poverty, the poor
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ASHINGTON—Sharp differences along lines of race and politics shape American attitudes toward the poor and poverty, according to a new survey of public opinion, which finds empathy toward the poor and deep skepticism about government antipoverty efforts.
The differences illuminate some of the passions that have driven this year’s presidential campaign. But the poll, which updates a survey the Los Angeles Times conducted three decades ago, also illustrates how attitudes about poverty have remained largely consistent over time despite dramatic economic and social change. Criticism of the poor—a belief that there are “plenty of jobs available for poor people,” that government programs breed dependency and that most poor people would “prefer to stay on welfare”—is especially common among the blue-collar, white Americans who have given the strongest support to Donald Trump. The opposite view—that jobs for the poor are hard to find, that government programs help people get back on their feet and that most of the poor would rather earn their own way—is most widely held among blacks and other minorities, who have provided the strongest backing to Hillary Clinton. Roughly a third of self-described conservatives say that the poor do not work very hard, a view at odds with big majorities of moderates and liberals. But while Americans disagree in how they view the poor, they’re more united in their skepticism of government programs. That skepticism has held true for decades. The first Times poll of American attitudes toward poverty, in 1985, broke ground by surveying enough poor people to compare their views with those of people in the middle class. The new survey, which was conducted by The Times and the American Enterprise Institute, a Washington think tank that is generally conservative, asked similar questions but with some updating. Much has changed since the 1980s. Welfare got a major overhaul
1 in 5 The number of Americans who said that the poor themselves bear the greatest responsibility in taking care of the poor
in the 1990s. The number of poor Americans dropped sharply in that decade, only to partially rise again, particularly during the deep recession that began in 2007. But many attitudes have held steady, the new poll found, particularly doubts about the federal government’s ability to run its antipoverty programs, as well as their justification. Most Americans do not believe that the government bears the main burden of taking care of the poor. Asked who has the “greatest responsibility for helping the poor,” just over one-third said that the government does. That figure has not budged in three decades. Those who did not think the government has the main responsibility were split about who does. Just under 1 in 5 Americans said that the poor themselves bear the greatest responsibility. Family, churches and charities each got mentioned by 10 percent-15 percent. Among Latinos, family came in second behind government; among blacks, churches took second place; Republicans were most likely to put responsibility on the poor themselves. White Americans were less likely to call government responsible than were minorities, but the difference lay almost entirely with blue-collar whites—those without college degrees. White Americans who graduated from college were as likely to say
Clinton Los Angeles Times/TNS
government has the prime responsibility as were nonwhites. Attitudes toward antipoverty programs also have not changed much since the 1980s. In the original poll, 58 percent of Americans said that such efforts had “seldom” worked, while 32 percent said they “often” had. In the new survey, with a differently worded question, 13 percent of Americans said such programs have had “no impact” on reducing poverty, and 43 percent said they have had “some impact.” Only 5 percent said they have had a “big impact.” Those living below the poverty line and those above it had largely similar views on that issue now and three decades ago. College-educated minorities were most likely in the current poll to say that government programs have had a positive effect on poverty, with more than 7 in 10 taking that view. At the other end of the scale, about one-third of Americans said that government programs had made poverty worse, a view that was particularly common among conservatives, 47 percent, and blue-collar whites, 43 percent. In both surveys, about 7 in 10 Americans said that even if the government were “willing to spend whatever is necessary to eliminate poverty,” officials do not know enough to accomplish that goal. Blacks and Latinos were somewhat more likely to express confidence about the government’s ability to end poverty. Even among those groups, however—and among self-described liberals—majorities said the government does not know enough to eradicate poverty. Asked why antipoverty efforts have failed, more than half of Americans said the main problem was that programs were poorly designed. Among poor people, however, about 3 in 10 said the problem was that programs had not been given enough money to succeed.
Trump Los Angeles Times/TNS
On attitudes toward the poor, divides are sharper than on opinions about government. Blue-collar whites were much more likely than nonwhites to view the poor as a class set apart from the rest of society—trapped in poverty as a more or less permanent condition. Minority Americans, particularly blacks, tended to say that “for most poor people, poverty is a temporary condition” A majority of whites see government antipoverty efforts contributing to poverty’s permanence, saying that benefit programs “make poor people dependent and encourage them to stay poor.” Blacks disagreed, saying that the government help mostly allows poor people to “stand on their own two feet and get started again.” The poor themselves divided evenly on the question. Latinos leaned closer to the skeptical view about government programs expressed by white Americans. Asked whether poor people “prefer to stay on welfare” or would “rather earn their own living,” Americans by a large majority, 61 percent-36 percent, said they believed the poor would rather earn their own way. Blue-collar whites were more closely divided on the question, 52 percent-44 percent. That was one of several questions on which the views of minorities and college-educated whites were close to each other, while whites without a college degree stood out as different. Nearly two-thirds of whites without college degrees, for example, said that benefits encourage poor people to remain in poverty. Among college-educated whites, about half took that view. Blue-collar whites also took a dimmer view of President Barack Obama’s handling of poverty than did other Americans. The majorities of blacks, Latinos and other minorities, as well as whites with college degrees, approved of Obama’s han-
dling of poverty. But among bluecollar whites, fewer than one-third approved, and nearly two-thirds disapproved. Not only are Americans skeptical about whether antipoverty programs work, nearly 6 in 10 said that the percentage of people in poverty has been increasing from year to year. About 1 in 4 say poverty has stayed the same, and 1 in 8 say it has gone down. Whether the public view of poverty getting worse is accurate or not is a tough question. A lot depends on the time frame. Measured by the government’s official poverty line, the percentage of Americans who were poor declined during the 1960s, plateaued during the 1970s, rose during much of the 1980s, then declined again during the boom years of the 1990s, only to rise again since 2000, especially during the recession. In the last few years, the poverty rate has leveled off at about 15 percent. The official poverty measure, however, does not include the value of government benefits designed to help the poor. Including those payments, the share of people who are impoverished is now considerably lower than it was in the 1960s, although slightly higher than it was at the end of the 1990s. One question on which views have changed somewhat since the 1980s is whether poverty is a temporary or a permanent condition. In the 1985 survey, Americans by a very large majority, 71 percent-21 percent, said that most poor people would probably remain poor. Today, that remains the majority view, but the gap has narrowed somewhat, with 60 percent seeing poverty as mostly permanent and 33 percent saying it is a temporary condition that people can move into and out of again. The poor divide closely on that question. So do minorities. A correct answer to that question
is complex. Census figures show that in recent years, people who fell below the poverty line typically stayed poor for about six months. A lot of people, however, cycle in and out of poverty, rising only slightly above the official poverty line, then falling back. One recent census study found that about one-quarter of poor people were in poverty only briefly—the result of a job loss or other crisis. About 1 in 7 were chronically poor, spending much of their lives impoverished. In between are many who churn in and out of poverty. Across the board, Americans overestimate how high the government’s poverty line is and how many people live below it. Asked to estimate the poverty line for a family of four, those polled, on average, put it at slightly more the $32,000, which is about a third higher than the actual figure of slightly more than $24,000. The public’s figure may be more realistic, however; many poverty experts think the official level is far too low. Those polled also estimated that about 40 percent of Americans live below the poverty line—far more than the actual figure of 15 percent. Again, though, the public may have the clearer view. Many experts on poverty say that in addition to the roughly 45 million Americans who live below the official poverty line, roughly an equal number are “near poor.” Many federal benefit programs, including health care subsidies, food stamps and Medicaid in many states, are open to people earning significantly more than the official poverty threshold. The survey was conducted by Princeton Survey Research Associates, one of the country’s largest nonpartisan polling organizations. The survey was conducted from June 20 to July 7 among 1,202 adults aged 18 and older, including 235 who live below the poverty line. The survey has a margin of error of 4 percentage points in either direction for the full sample. TNS
Failed Turkey coup was decades in the making I
STANBUL—Turkish investigators call it the ultimate long game. In 1986 the Turkish military expelled dozens of cadets suspected of loyalty to a young Muslim cleric named Fethullah Gulen, seen as a potential threat to the country’s strict secular rule. Officials, a magazine reported at the time, said an alleged recruiter had told the students to work their way through the ranks and wait for instructions that would come in a few decades. Fast-forward 30 years to July 15, when renegade officers staged a failed coup and President Recep Tayyip Erdogan accused Gulen of orchestrating it. Gulen, now based in Pennsylvania, denies any involvement, but a rising tide of allegations challenges the moderate image promoted by his Islamist movement and casts it as a cover for secret designs on Turkish power that included efforts to infiltrate state institutions decades ago. In the 1970s, when Turkey was run by a military-backed, secular government, the group seemed like a conventional religious movement that attracted young, middleclass recruits through a successful network of schools and dormitories.
Gulen, who had been associated with Islamic mysticism, promoted a message of tolerance and charity along with Turkish patriotism. His group—known as Hizmet, Turkish for “service”—raised money through donations from individuals and businesses. By the early 1990s it was expanding into other countries with a network of schools, burnishing an international reputation as an advocate of interfaith harmony. The movement’s benevolent message initially enabled its followers to dodge the harshest persecution of Turkey’s secular rulers. But as it grew in influence, the government began to view the movement with suspicion. Authorities alleged its supervisors— known as “brothers”—helped followers cheat on exams to land government jobs. Once they were in place, according to Hanefi Avci, a former national police chief who investigated the group, they “acted in a coordinated effort to promote and protect one another and eliminate opponents.” The group enjoyed wide influence in schools, the news media and police forces in an expanding power base, and authorities began to crack down on pieces of the
movement such as the 1986 purge of military cadets. Authorities point to Gulen’s own words as evidence of his designs. In comments recorded in the 1980s, Gulen referred to crackdowns on Islamists in Syria and Egypt and told a group of followers to bide their time, saying: “You must move within the arteries of the system, without anyone noticing your existence, until you reach all the power centers.” Gulen, who later said those remarks were misinterpreted, moved to the United States in the late 1990s while facing trial on charges of plotting to overthrow Turkey’s government. His movement continued to grow, and eventually helped to topple the staunchly secular leaders who had been so wary of it. In the 2002 elections, Gulen’s followers supported the candidacy of the former Istanbul mayor, who himself had been jailed for several months by secular authorities and won with the backing of a pious Muslim class that had been sidelined to decades. His name was Erdogan. Erdogan insists he put up with the Gulenists as a practical matter: He needed all the help he could get to defeat the secularists.
“We tolerated them for the sake of the widespread aid, education and solidarity activities—inside and outside of the country—that they seemed to be conducting,” he said this month. “We tolerated them because they said ‘Allah.’” The military leadership remained unconvinced. Ilker Basbug, who was Turkey’s military chief from 2008 to 2010, said in a recent interview with CNN Turk television that he warned Erdogan about the threat from Gulen’s backers in the military, which had stopped purging suspected Islamists. “Today this threat is to us, tomorrow it’s to you,” he says he told Erdogan. According to Basbug, Erdogan responded: “My commander, you are exaggerating.” After he retired, Basbug was jailed on charges of plotting to overthrow the state, one of hundreds of people associated with the old secular order who were targeted by alleged Gulen sympathizers in the police and judiciary. Avci, the former national police chief who had written a book about the alleged threat from Gulen’s supporters, was also imprisoned. Erdogan initially supported some of the investigations, but he eventually disowned
A woman carries a child as another one follows them in front of a banner, covering a building under renovation and depicting old Istanbul on Sunday. Turkish authorities have prepared an official request for the temporary arrest of United States-based Islamic cleric Fethullah Gulen over his alleged involvement in the coup attempt on July 15, Turkey’s state-run Anadolu news agency said on Saturday. AP/Thanassis Stavrakis them amid revelations of forged evidence and other irregularities. Meanwhile, the Turkish leader’s alliance with Gulen was unraveling as he sought to dismantle what he described as a “parallel state” in the police and other institutions. In what Erdogan later described as an attempted coup, prosecutors believed to be loyal to Gulen launched a high-profile corruption probe in December
2013, embarrassing the government. Tensions rose further in 2014, when Erdogan switched from prime minister to president in a move seen by critics as a bid to amass even more power. Finally, on July 15, elements of the military rose up. They occupied airports, bridges and military bases, took the military chief hostage and accused the government of eroding democracy and the rule of law. AP
A10 Tuesday, August 16, 2016 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
Government’s flooding failure
“Worst Flooding in 50 Years”—2009 “Massive Flooding from Habagat”—2012 “Habagat Rainfall Amount this Month Higher than Ondoy”—2013 “Rescuers on Speedboats Haul Rain-soaked Residents off Rooftops”—2015 “Torrential Monsoon Rains Bring Manila to a Standstill”—2016
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he newspaper headlines tell the story. We might have thought that Tropical Storm Ondoy in 2009 might have been the worst in terms of flooding in Metro Manila. We were wrong. Some seven yeas later and nothing has really changed for the better.
Even as recently as last December, the government was saying that “flood projects are in the pipeline,” it would appear that the only thing in the “pipeline” are more floodwaters. As much as it pains us to say it, the previous administration had six long years to take action to spare people and property from the effects of flooding, and nothing was effectively accomplished. It is not as if flooding is a problem that requires reinvention of the wheel. More pumping stations and equipment are needed. The waterways and estero of the metropolis need to be cleaned regularly and kept clean. Areas that are particularly prone to flooding because of the natural topography have to be given special consideration. But nothing is done and the people continue to suffer. Why? The one thing the government is good at is giving excuses. It is not good at taking responsibility. After each of the abovementioned events, the government was quick to pat itself on the back for a job well done in rescuing the affected. But at no time, did the government ever seem to say that its performance to mitigate the flooding was unacceptable. Reducing the flooding problem to manageable levels in Metro Manila is will require a concerted effort by several government agencies, including the Department of Environment and Natural Resources and the Department of Public Works and Highways, as well as the Department of Social Welfare and Development and the Metropolitan Manila Development Authority. A unified effort across all levels of government from barangay to Malacañang is going to be necessary. But one thing we know that is crystal clear. This situation can no longer be allowed to continue as it is. The administration needs to prioritize the flooding problems and appoint a task force to come up with a complete and comprehensive plan to address the problem. No longer can stopgap measures be employed. No longer can the emphasis be on rescue while ignoring long-term solutions. This is a local problem, but only the national government has the resources and the authority to get the job done. It is completely unacceptable that every time there are a few days of heavy rain, Metro Manila must come to a standstill. While the government did little since 2009 to address the failures of the past, it is time for the Duterte administration to take charge.
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Off to a good start
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The consensus is that the second quarter also turned in the same result, if not better. Pending the release of the official economic report later this month, Bangko Sentral Governor Amando M. Tetangco Jr. said that, based on leading indicators, he believed second-quarter growth was the same, if not better, than the first quarter.
Again, as it had done in past global crises, the Philippine economy weathered the challenges, and ended the first quarter as one of Asia’s fastest-growing economies. Growth in terms of GDP reached 6.9 percent in the first three months of 2016. The consensus is that the second quarter also turned in the same result, if not better. Pending the release of the official economic report later this month, Bangko Sentral Governor Amando M. Tetangco Jr. said that, based on leading indicators, he believed second-quarter growth was the same, if not better, than the first quarter. Japan-based Nomura Securities Co. Ltd. is even a bit more optimistic,
The CCAP hopes to convince the foreign companies to outsource their operations in the Philippines. These companies comprise of inhouse back office and third-party outsourcing operators. The Philippine outsourcing industry, which has become a significant dollar earner for the country, expects to generate $25 billion this year. Meanwhile, cash remittances from overseas Filipinos coursed through banks reached $10.9 billion for the first five months of 2016, representing a 2.9-percent growth from the same period last year. The cash remittances for the month of May alone totalled $2.2 billion, up 1.9 percent year-on-year, according to the Bangko Sentral
Manny B. Villar
THE Entrepreneur he financial slump in China in 2015, which triggered a chain of volatility in the world’s major markets and the weakening of the Chinese market, which hit commodity prices, also dampened the prospects for the Philippine economy at the beginning of 2016.
The political zombie apocalypse John Mangun
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saying GDP growth in the second quarter could have exceeded 7 percent. The forecasts are not overly optimistic because the country’s fundamentals remain strong, and recent developments further strengthened the economy’s growth prospects. About 100 foreign companies are expected to visit the Philippines in September this year to look at opportunities in the outsourcing industry. According to the Contact Center Association of the Philippines (CCAP), this is the first time for the industry group to bring in foreign investors during the 11th International Contact Center Conference and Expo on September 27 and 28.
OUTSIDE THE BOX
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he word “apocalypse” has been around for 2,000 years, meaning the complete final destruction of the world, at least when used in the biblical sense. More recently it has come to describe some sort of widespread destruction or even a complete breakdown of society. A “zombie” was a term used in some Caribbean and African religions to describe a corpse brought back to life through witchcraft. In contemporary fiction, it is a person that has been turned into a creature, which feeds on human flesh. The term zombie apocalypse has been used in this column several times in the past year to describe what I see as a developing situation. However, I do not use this phrase humorously. Allow me to explain why. Through books and films going back to the 1950s, there is no definite cause for humans turning into zombies. It could be the result
of a weapon or a mutated virus. But there are some common characteristics of the event and these are the reasons I am using the term zombie apocalypse. There is no grey area. You are either a fully functioning human or you are a zombie. Further, the zombie condition is irreversible. No matter which you happen to be—zombie or human—members of the other group are your deadly enemy to whom no mercy or remorse can be shown. It is kill or be killed. There can never be a return to normal times. Whatever might have been acceptable before is now gone.
You are either in favor of senseless extrajudicial murders or you are a drug-lord coddler. There is no room for any discussion exactly like between the humans and the Walking Dead. This is the current political situation and the economic zombie apocalypse is already developing.
A completely new lifestyle and attitude must be embraced in order to survive, again no matter which species you are. There is no turning back the clock. It is impossible to fully place blame for the zombie apocalypse having occurred. But each individual knows one thing is absolutely certain—it is not their fault. The cycle of political transition —which always precedes major economic transition—follows the same path as the zombie apocalypse. While it is a process, it seems as if suddenly and without warning the world is divided into “us versus them.” Your next-door neighbor, your childhood classmate, or even your spouse whom you always thought you could trust is now trying to kill
ng Pilipinas (BSP). In a separate report, the BSP said net foreign direct investments (FDI) stood at $3.9 billion for the period of January to May, more than double the $1.6 billion net FDI inflows during the same period last year. The tourism industry also continues to grow. International tourist arrivals in May 2016 reached 445,449, up 7.61 percent from the same month last year. This brought tourist arrivals for the first five months to 2.52 million, up 13 percent, from 2.23 million year-on-year. Robust consumer spending fueled by remittances and the businessprocess outsourcing industry, plus the growing tourism industry and stronger public spending under the new administration are expected to provide a strong push for the economy this year. With the jitters from the weakening of China gone, and the series of positive developments in the domestic market, I believe it is fair to say that, for the Philippine economy, 2016 is a good start. The challenge is to use such a good start to build the momentum for faster, long-term growth. For comments, e-mail mbv.secretariat@gmail. com or visit www.mannyvillar.com.ph.
and eat you, or trying to kill you to avoid being eaten. While no one might purposely go out and try to become a zombie, deep down inside we know that if they had been a little more careful or a little smarter, they would still be human and, therefore, almost deserve to be zombies. Look at the current political landscape around the world. In the US people are either “globalists” selling their souls for mere wealth or selfish “protectionists” who care nothing about the human race. The Japanese are divided between cowardly pacifists who won’t protect their nation and bloodthirsty militarists seeking an empire. You are either in favor of senseless extrajudicial murders or you are a drug-lord coddler. There is no room for any discussion exactly like between the humans and the Walking Dead. This is the current political situation and the economic zombie apocalypse is already developing. 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.
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Tuesday, August 16., 2016 A11
Right moves by DOE’s Cusi Honoring the Paris Agreement Ernesto M. Hilario
ABOUT TOWN
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resident Duterte appears to have named Cabinet officials who would rather do their job away from the limelight and out of reach of controversies.
Among them is new Energy Secretary Alfonso G. Cusi. The guy has been landing in the news recently and only after he has made some good moves that can help the President make good a promise he made last elections. It looks like Cusi has acted quickly on reports that the country is facing thinning power supply. It will be recalled that the power sector went on heightened alert several weeks after rotating brownouts hit Metro Manila and nearby provinces. There are three good moves on the part of Cusi. First, he immediately went to inspect the country’s major power plants. Second, he tapped the help of the private sector. Third, he got the Energy Regulatory Commission (ERC) to work closely with him. Cusi’s inspections of the power plants were recently announced by his department spokesman. “Technical audit” is how it was described. We presume this means Cusi intends to find out if the power shortage is real and not merely the product of “technical maladjustments.” This should send clear signals to the power industry that he does not intend to take alleged powershortage situations sitting down, and that he intends to be a handson energy secretary. This should also send signals to everyone that Cusi does not intend to champion big business interests that currently influence the directions of the industry he now oversees. This is a good move, especially since earlier there was talk that Cusi has strong links to a big business conglomerate that has been a power-sector player for quite some time. Cusi had apparently once been a senior executive in one of the units of this big business group. Other industry players are reportedly wary of this group because of the tendency of its bosses to throw their weight around. It is good for Cusi to have gone out of his way to serve notice that he is not a pawn of any business group. It was apparent in the past that reforms in this sector had been rather slow because the top energy man may not have stood firmly against pressure from powerful interests. One agency that has been taking a strong stand is the ERC. Again, it was a master stroke on the part of Cusi to get the ERC as its strongest ally. ERC has the regulatory powers and is tasked with making sure that reforms in the power sector as mandated by existing laws are put in place fast. Cusi was quoted by media as saying that he “will work with the Energy Regulatory Commission that
Also working in Cusi’s favor is the fact that the ERC head, likewise, has no ties with business interests in the power sector. The current ERC chairman, former Justice Undersecretary Jose Vicente B. Salazar, has been a career government official and had not worked with any of the organizations now running businesses in the electricity industry. all standards are enforced to ascertain reliable, stable and reasonably priced electricity.” He is right. In a way, the ERC is the “enforcement arm” of the Department of Energy. The department is concerned more with programs and policies. This explains the wisdom of Cusi’s move. He has the “enforcer” to stand by him if ever he should take a bold stand against the wellentrenched interests in the sector he oversees. Also working in Cusi’s favor is the fact that the ERC head, likewise, has no ties with business interests in the power sector. The current ERC chairman, former Justice Undersecretary Jose Vicente B. Salazar, has been a career government official and had not worked with any of the organizations now running businesses in the electricity industry. The media had earlier reported that Salazar is both a lawyer and a graduate of electrical engineering. The ERC head’s technical and legal competence should boost whatever strong position Cusi might adopt, as reforms are put in place in the power sector. Cusi’s move appears to be in stark contrast to that of those who had previously occupied his post. Some of them apparently wanted to do a one-man show and bent on creating the impression that the industry could be reformed and policed by one single person. Cusi, apparently, has no appetite for one-man shows, preferring to share the task with other agencies and private-sector stakeholders. An example of this was Cusi’s move to tap the help of the Institute of Integrated Electrical Engineers of the Philippines (IIEE) in the ongoing technical inspection of the power plants. Private-sector organizations, like the IIEE, have both the competence and the objectivity. By tapping them, Cusi has given us all the assurance that the result of the audit would be believable. It looks like the new energy secretary has been making the right moves. We hope these moves lead to lower power rates as promised by the President.
E-mail: ernhil@yahoo.com.
Just do it Teddy Locsin Jr.
Free fire Continued from A1
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o be sure, he can declare martial law. Indeed, he can declare anything like he’s been doing lately—including to the ambassador of the world’s only superpower. (Don’t do that. Degrade the ambassador and you degrade the country in whose he stands before the host country and the world. Degrade him and you may, as well, assassinate him, for by putting him down in one sense, you are inviting others to put him down in a sense for which the retaliation must be massive.)
Edgardo J. Angara
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resident Duterte explicitly stated in his first State of the Nation Address (Sona) that countering global warming will be a top priority of the Philippines. For sure, he cautioned that the global solution proposed be based “upon a fair and acceptable equation.” In his recent meeting with US State Secretary John F. Kerry, he said the Philippines would abide by the Paris accord. And he asked the Senate, as the treaty-ratifying body and the President’s partner in foreign relations, to give him advice regarding the Paris accord. The President’s views jive with the concept of “climate justice,” calling for the world’s top carbon emitters to take the lead not just in reducing emissions, but also in lending finance and technology support to developing countries transitioning to a zero-carbon mode of economic development. President Duterte is quite firm in believing that the country should
work to mitigate global warming, but he is also convinced that the country’s development should not be stifled as a consequence. I would argue that by pursuing a carbon-neutral economy more single-mindedly, the Philippines would get developed smartly and do so sustainably. By signing the Paris accord with nearly 200 other countries last December, the Philippines affirmed
that the country’s “intended nationally determined contribution” (INDC) is to reduce expected carbon emissions by 70 percent by 2030, under a “business-as-usual” (BAU) scenario. This is, yes, an ambitious target and a huge commitment—but one that is contingent on “the extent of financial resources, including technology development and transfer, and capacity building that will be made available to the Philippines.” In other words, our treaty obligation to reduce emissions is conditioned on how much financial and technical assistance we receive from our partner-countries. Hence, abiding by the Paris accord is to safeguard a strategic opportunity for us to leverage the resources of our more prosperous friends to decarbonize our economy, without jeopardizing our efforts to grow and industrialize it. Honoring the Paris accord is equally about keeping people safe and healthy. The Philippines is not even a net carbon emitter, but it is among the most vulnerable and most affected countries because of climate
If history teaches us a lesson Cecilio T. Arillo
database
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F history teaches us a lesson, it is that four of the five presidents who succeeded the late strongman President Ferdinand E. Marcos vehemently opposed his burial at the Libingan ng mga Bayani (LB) in Fort Bonifacio. They are Presidents Corazon Cojuangco-Aquino, Fidel V. Ramos, Gloria Macapagal-Arroyo and Benigno S. Aquino III. Only President Joseph Ejercito Estrada, who stopped the practice of giving sovereign guarantee to energy projects, did not oppose his burial at the LB. The question is why? Here’s a historical event that may provide an answer to that delicate query: There’s a common thread that runs through the four presidents: they were the ones, starting from Mrs. Aquino, who bungled the country’s most successful multibillion-peso energy project of President Marcos. Between 1973 and 1985, the Marcos administration, based on indisputable government records, had succeeded in reducing the country’s dependence on Middle East oil, from 92 percent in 1973 to 71 percent in 1980, and further to 57 percent in 1984. By 1985, the Philippines stood as the world’s second-largest user of geothermal power, next to California, resulting further to 44percent reduction of the country’s dependence on imported oil worth billions of pesos. In order to attain its ultimate objective of total electrification and industrialization of the country, the Marcos administration
had as its arm the National Power Corp. (NPC). Established in 1936 by President Manuel L. Quezon under Commonwealth Act 120, NPC reached a significant landmark in its corporate existence with the enactment of Republic Act 6395 in the second term of the Marcos regime in 1971, giving birth to a revised charter for NPC. President Marcos, recognizing the power industry as the backbone of economic progress, issued Presidential Decree (PD) 40, which paved the way for the setting up of island grids with generating facilities and cooperatives for the distribution of power, mainly in the country’s rural areas. In 1972 Marcos authorized the NPC, “to own and operate as a single integrated system, all generating facilities supplying electric power to the entire area embraced by any grid set up by NPC.” Targeted to be integrated in this system were all Manila Electric Co. (Meralco) generating units. After a long series of selling negotiations by the Lopez family, a contract was finally signed and the government purchased Meralco’s power-generating units at P1.1 billion. The acquisition of Meralco’s thermal plants was in line with NPC’s plan to centralize all generating capacities in Luzon as part of the socalled Luzon grid.
Going back to our subject: but without the approval of Congress, he cannot impose it. Sure, he may get Congressional approval easily from a Senate, with a boxer and a comedian, and the Batasan, which is shaped like an automated teller machine and which possesses a minority that will only echo the majority whence it comes— inappropriately: a minority that’s faux, which is French for fake. But you cannot impose martial law to suppress a lawless violence that is not evident; if you discount the lawlessness of the government itself. All the violence is coming from the government side. Nor can you declare martial law to suppress the courts when martial law was intended to protect and
uphold them. The problem with the drug problem is it spreads without lawlessness: in dark dirty alleys for poor addicts and in exclusive clubs for rich ones. So no President Duterte cannot declare martial law. I mean, he can, but it would not be martial law, but a Palace takeover of the democratic state. I have no problem with martial law. I do have a problem with the ignorant reason advanced for it: getting the Supreme Court out of the way. Are you kidding? The executive exists in great part, and is armed with martiallaw power mostly, for the reason of protecting the justice system so that the President can
As a response to the 1973 global oil crisis, President Marcos was determined to build a nuclearpower plant that shall supply the country’s energy demands and further decrease our dependence on imported oil. Thus, the construction of the Bataan Nuclear Power Plant began in 1976.
In another breakthrough move, Marcos increased the capitalization of NPC to P50 billion in 1978 through PD 1360, thus, it catapulted NPC’s financial strength and capacity to tap possible sources of power, particularly in nuclear-power development.
A sleeping giant
AS a response to the 1973 global oil crisis, President Marcos was determined to build a nuclear-power plant that shall supply the country’s energy demands and further decrease our dependence on imported oil. Thus, the construction of the Bataan Nuclear Power Plant (BNPP) began in 1976. When the BNPP was finished in 1984, with its cost totaling to $2.3 billion, it was one of the state-ofthe-art nuclear power station in the world. The BNPP was designed to withstand an intensity-8 earthquake in the Richter scale, making it sturdier and safer than the Fukushima power plant in Japan, which in 2011 survived an intensity-7 earthquake before the subsequent tsunami hit. If the Bataan plant had operated, it would have produced 621 megawatts of electricity, enough to power at least 10 percent of the present power requirements for the Luzon grid. It would have addressed our looming energy crisis. It could have ushered the country into nuclear power and brought our economy at greater heights. However, this facility sitting on
discharge his oath to do justice to every man. Frankly, all this talk of martial law is boring. “Just do it,” is what I say, to borrow the words of Nancy Reagan, borrowed by her from the Nike ad. Then we will see what happens. Martial law is not odious in itself. If it were this Constitution would not contain it. This Constitution provides for martial law; albeit with only a safeguard against abuse, which the President can buy Congress to ignore. So just do it. If anyone might do martial law right, it is Mr. Duterte. He is old. And he won’t last long. If President Duterte did martial law right—e.g., without cronies to
change. Last November a United Nations report determined that the Philippines was the fourth-most disaster-prone country in the world. Data from the World Meteorological Organization (WMO) showed that the average sea level rise in the Philippines since 1901 was 60 centimeters, three times faster than the global average of 19 centimeters. If such rate continues, some 171 coastal towns and municipalities are projected to go underwater, displacing up to 13.6 million Filipinos, according to a University of the Philippines study. Doing an about-face on the Paris accord—that is, to allow governments around the world, including ours, to continue burning carbon in the name of economic development—is a step toward an increasingly unsafe and vulnerable future for the Philippines, where achieving prosperity would be next to impossible. This only makes it imperative that we honor the historic agreement.
E-mail: angara.ed@gmail.com.
a 369-hectare property in Morong, Bataan, remains idle from the time of its completion in 1984 until today. It is a “sleeping giant,” reduced into an artifact for tourists to see, buried in years of misguided priorities and baseless fear.
Down the drain
The so-called People Power Revolution in 1986 overthrew Marcos. With the BNPP standing as a Marcos regime relic, the unfounded allegations of overprice in BNPP construction, and the 1986 Chernobyl disaster as a horror story, the succeeding administration of Mrs. Aquino decided to leave the giant sleeping. Yet, because of her rigid mandate to “honor all debts,” the Philippines spent P120 billion in principal and interest charges for the BNPP, which never produced a single kilowatt of electricity. Four months after the Edsa Revolution, exactly on June 19, 1986, President Cory Aquino’s administration, likewise, deliberately abolished the Ministry of Energy and placed the multibillion-peso Philippine National Oil Corp. (PNOC), a successful Philippine firm featured successively in Fortune’s 500 Best Corporations, under the administrative supervision of the Office of the President. The rest is history, and the stark details of how they bungled the energy sector is retold by this writer in two books, Greed & Betrayal and a Country Imperiled-Tragic Lessons of a Distorted History, both published by Amazon, one of the world’s largest publishing houses. On reflection, can you imagine a serene scenario with Mr. Marcos sharing the same graveyard of the four other presidents when the time comes? To reach the writer, e-mail cecilio.arillo@ gmail.com.
steal for him—it might finally generate faith in martial law as a weapon to defend democracy but not kill it, like Ferdinand E. Marcos did. Democracy needs martial law to protect it. Yes, not just from foreign invasion and civil discord but from something the American Founding Fathers never experienced: a drug trade so vastly and deeply embedded, so well-funded, so brutal and so numerously staffed, that it can do more than just attack democracy. It can buy democracy. And thereby, kill our country and our race. It is just that we have only had a bad taste of martial law; mostly stealing for personal gain—what else?— and killing like the assassination of Benigno “Ninoy” Aquino Jr.
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