Businessmirror august 17, 2017

media partner of the year

United nations

2015 environmental Media Award leadership award 2008

BusinessMirror A broader look at today’s business

www.businessmirror.com.ph

n

Thursday, August 17, 2017 Vol. 12 No. 308

PHL may rely on imported chicken to stabilize supply

T

By Jasper Emmanuel Y. Arcalas

@jearcalas

he government is likely to remove import restrictions to entice traders to bring in additional shipments of cheaper chicken, as a shortage in poultry supply looms due to the bird-flu outbreak, according to Agriculture Secretary Emmanuel F. Piñol.

Piñol said the special importation of chicken is one of the Department of Agriculture’s (DA) options in dealing with the aftermath of the discovery of the bird-flu outbreak in San Luis, Pampanga. “We’re thinking of [special

importation]. There’s no problem with that. The moment we learn that we are really short in supply, we will import, including live chicks and eggs,” he told the BusinessMirror. Piñol made an assurance that

the Philippines would buy from bird flu-free countries should the government decide to allow the special importation. The DA chief made the statement after he revealed that the number of birds to be culled would increase

to 600,000, from the original estimate of 200,000. The figure went up, he said, because some 30 farms within the 7-kilometer radius of ground zero of the outbreak volunteered to sacrifice some 400,000 birds to prevent more losses. “The offer to depopulate came from the farmers themselves. Because even if they are outside the 1-km contained area, they find it hard to sell their produce. Also, they

Rene E. Ofreneo

laborem exercens

T

he Manila office of the International Labor Organization (ILO) has just come up with Decent Work Country Diagnostics: Philippines 2017. The Diagnostics is a comprehensive compilation of facts and figures on the quality—or lack of quality—in Philippine employment. The term “decent work” was coined by the ILO in 2000 to mean work obtained “in conditions of freedom, equity, security and human dignity”. A little backgrounder on how the ILO developed its “decent work agenda” is in order. The decade of the 1990s saw widespread criticisms by trade unions and civil-society organizations (CSOs) all over the world on the unequal outcomes of economic globalization in both developed and developing countries in the post-Berlin free-trade era. The deep-seated anger against globalization and its social and economic impact was dramatically shown in 1999, when the trade unions Continued on A12

‘BBB’ program of govt to create 10 million additional jobs–DOLE

B

See “28-day TDF,” A2

Decent work deficits in the Philippines

Continued on A2

Fewer takers for BSP’s 28-day TDF

an k s a nd t r u st e nt i ties on Wednesday showed strong interest in the central bank’s short-term deposit offer, but remained reluctant to bid in the central bank’s longer-dated deposit window. Latest data from the central bank’s term deposit facility (TDF) auction show the one-week TDF posting an oversubscription, in contrast to its 28-day counterpart that failed to generate the full amount the Bangko Sentral ng Pilipinas (BSP) anticipated. In particular, the total amount tendered by banks and trust entities for the seven-day TDF hit P50.05 billion, or 125 percent of the P40 billion on offer. The aggregate amount tendered for the 28-day TDF hit P103.33 billion, equal to only 73.8 percent of the P140 billion offered this week. Also, the interest the banks and trust entities will earn from the deposit facilities contrasted sharply, with the one-week TDF posting a lower rate. In particular, the shorter-tenor averaged lower to 3.3241 percent, from 3.3327 percent a week earlier. The 28-day tenor, meanwhile, averaged higher, to 3.4958 percent from 3.4936 percent. The BSP kept the volume deposit minimum unchanged at P40 billion for the seven-day TDF and P140 billion

business news source of the year

P25.00 nationwide | 4 sections 28 pages | 7 days a week

600,000 The number of fowls that will be culled by the DA in Pampanga to prevent the spread of bird flu

2016 ejap journalism awards

By Jovee Marie N. dela Cruz

T

panel observer A visitor at the main offices of the Asian Development Bank (ADB) films its rooftop solar panels. The solar photovoltaic system is another landmark project of the Manila-headquartered ADB whose offices are now powered by 100-percent renewable energy. NONIE REYES

Espenilla: Central Bank will lift rates if economy overheats

T

he Philippine central bank is prepared to raise interest rates if it sees signs the economy is growing too fast, while tolerating a weaker currency for now, according to Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla Jr.. “When you do start jacking up interest rates is when we see signs of overheating in the economy,” he said in an interview in Singapore

on Tuesday. “We’re not there yet,” he added, saying that the peso’s decline should be a signal to companies to avoid too much foreign borrowing and hedge their currency risk. Economic growth in the Philippines, already among the world’s highest, probably accelerated in the second quarter, officials said before data due on Thursday. The country is set to post its first annual

current-account deficit in 15 years amid strong domestic spending and an infrastructure program that’s pushing up imports. The budget shortfall is widening and the peso has dropped 3.2 percent against the dollar this year, the worst performance in Asia. Espenilla, who took over as governor last month, is “much more laissez-faire” about the curSee “Espenilla,” A2

@joveemarie

he Department of Labor and Employment (DOLE) on Wednesday said there would be no Filipinos who will look for jobs abroad after the end of the term of President Duterte, as 10 million jobs will be available in the next five years due to the “Build, Build, Build” (BBB) program of the government. During the budget deliberation of the DOLE, Secretary H. Silvestre Bello III told lawmakers that domestic employment is seen to generate 2 million jobs annually, with infrastructure projects already in the pipeline to boost economic activity. “This BBB program will generate almost 2 million jobs every year by end of this term. We’re talking of 10 million jobs [in the next five years] that’s why our workers will no longer go abroad to look for jobs because jobs are available here,” Bello said. Earlier, the Asian Development Bank Institute (ADBI), in its report titled, “Safeguarding the Rights of Asian Migrant Workers from Home to the Workplace”, said the number of Filipinos going abroad is expected to continue falling until 2025.

₧10.816B The proposed budget of the DOLE for 2018

It said the net migration rate of the country will continue to decline to -0.7 per 1,000 population in the 2020-to-2025 period. As much as P1.097 trillion have been allocated for government infrastructure projects next year under the 2018 proposed P3.- trillion national budget. It is 29.5 percent, or P249.8 billion, higher than the 2017 national budget’s allocation for public infrastructure. In his budget message, the President said the 2018 budget will focus on public infrastructure listed under the government’s Build, Build, Build campaign. He added among the objectives of the 2018 budget proposal is to accelerate strategic infrastructure under the government’s bid to sustain development. The 2018 budget is currently under the House’s Committee on Appropriations. “In all, we plan to spend a total of P8.1 trillion for infrastructure development from 2017 to 2022,” Duterte added. See “BBB,” A2

BMReports BusinessMirror

A2 Thursday, August 17, 2017

PHL may rely on imported chicken to stabilize supply Continued from A1

cannot ship their products outside the 7-km radius,” he said. “If culling their birds would contain the spread of the virus, they said they are willing to make a sacrifice. So rather than continuously feeding their flocks and earn nothing, they just opted to depopulate,” Piñol added. Because of this, the DA chief did not discount the possibility of a shortage in poultry products in Luzon. “Earlier I called on producers in the Visayas and Mindanao to hike their production,” he said. “We are expecting a shortage in Luzon in the coming ‘ber’ months due to the bird-flu incident.” The last time the DA allowed the special importation of chicken was in 2014, when traders were given the go signal to bring in 5 million kilograms of chicken sans the special safeguard (SSG) duties. Additional tariffs and restrictions are slapped on imported chicken that would come in at less than the trigger price of P93.9 per kilogram. The government authorized the special importation of chicken in 2014 to stabilize supply and prices during the holidays. Under Republ ic Act 880 0, which allows SSG on imports, only those brought in within the minimum access volume (MAV) are exempted from it. However, the law also stipulates that it is the discretion of the de-

Espenilla. . .

partment secretary if he would suspend the SSG for imports outside MAV or for special importations.

‘Premature’

United Broiler Raisers Association (Ubra) President Elias Jose Inciong said it is premature to talk about importing as the country currently enjoys a high chicken inventory. “It has only been five days since [the outbreak was announced]. Currently, the problem is oversupply of chicken. To talk about shortage and special importation is not appropriate at this time as it could worsen the misery of growers who are suffering losses,” Inciong told the BusinessMirror. “The DA secretary can have a dialogue with the sector because, right now, it doesn’t make sense to talk about shortage if there’s no demand. Local chicken in cold storages will serve as buffer,” he added. Based on reports from Ubra members, Inciong said sales of chicken in Central Luzon have gone down by as much as 80 percent. Inciong said it will also be more costly if poultry products, particularly poultry meat, will be sourced from the Visayas and Mindanao. He added that these regions produce chicken meat at a higher cost compared to those in Luzon. For this year, 124 private firms were allowed by the government to import 54,210 metric tons (MT) of frozen-poultry meat under MAV. The figure is lower than the 141

Continued from A1

rency and isn’t worried about peso weakness, Citigroup Inc. analysts including Johanna Chua in Hong Kong wrote in a note released on Wednesday. Solid fundamentals will eventually cap declines, they wrote. The Philippine cur-

rency plumbed a new 11-year low of 51.61 per dollar on Wednesday. It was little changed as of 1:49 p.m. in Manila after falling as much as 0.5 percent earlier. “ The peso is market-determined,” Espenilla said. “In accept-

that were granted licenses last year. Some of the firms allowed to import under the 2017 MAV for frozen-poultry meat are Delichicken Corp., Virginia Foods Inc., The Purefoods-Hormel Co. Inc., Puregold Price Club Inc. and Rustans Supercenters Inc. Manila currently imposes a 40-percent tariff on poultry-meat imports.

Given the increase in the number of birds to be culled, Piñol estimated that the DA would need some P52.8 million to compensate all the affected poultry growers. “This is a welcome development for us because according to our experts if we would also depopulate the farms within the 7-km radius then it would serve as a buffer zone to our ground zero,” Piñol said. “If the periphery of the area is clean and cleared, then the chances of the virus spreading outside the area will actually be reduced.” The DA chief said he would seek P100 million from President Duterte to compensate growers, pay laborers and for other expenses that may be incurred by the department in the clearing process. “I have a meeting with President Duterte and I will ask him to immediately release calamity funds,” Piñol said. “The total computation for the compensation of the 600,000 birds does not include the income loss of farm workers who will not have a job in the next three months,” he

added. On top of the compensation, Piñol said they are also planning to roll out other livelihood programs, which could be funded by the DA, such as planting rice to help the affected farmers. Piñol said he has also sought help from the Philippine Army, Armed Forces of the Philippines and the Philipine National Police (PNP), to fast-track the culling of fowls. He said PNP Chief Ronald M. dela Rosa has promised to provide men to aid in the DA’s operations. Also, Philippine Army Commanding Officer Rodel Alarcon has committed to send at least 300 people in San Luis to hasten the culling of birds. With the additional manpower from various government agencies, Pinol said he expects the culling of 400,000 birds to be done by August 19. As of Wednesday, the DA chief said they have culled 73,110 birds, which include layers, ducks, fighting cocks and native chickens. Piñol said the department has opted to burn the dead birds instead of continuing with the current culland-bury procedure to fast-track the depopulation of farms. “While we would like to conform to the Clean Air Act, some farms are near wetlands. Our veterinarians said it will be more dangerous to bury the chickens, presumably with bird flu, near those areas,” he said. Piñol added he would formally ask Environment Secretary Roy A. Cimatu to allow the DA to incinerate the dead fowls.

ing that the currency will adjust and will be more volatile, that also sends a signal. It creates market discipline, as well.” For merly deput y gover nor at Bangko Sentral ng Pilipinas, Espenilla kept the benchmark interest rate unchanged at 3 percent on August 10 in his first policy decision since taking of-

fice. Most economists surveyed by Bloomberg predict the central bank will raise rates by at least 25 basis points this year. Inflation and the fiscal position remain under control, the governor said. The current-account deficit isn’t blowing up in a way that’s hard to sustain, and previous surpluses were due to underspending,

Government aid

www.businessmirror.com.ph

BBB. . .

Continued from A1

Under the accelerated infrastructure spending, the government aims to improve road transport to spur trade movement, air transport to impel air mobility, sea transport to boost port activity and rail transport to ease urban congestion. To reduce logistics costs in Mindanao, Duterte said the Mindanao Logistics Infrastructure Network will receive a 10.3-percent increase in funding, from P21.4 billion in 2017 to P23.6 billion in 2018. Also, Duterte said the Aviation Infrastructure Program of the Department of Transportation will obtain a 48.5-percent budget increase, from P6.8 billion in 2017 to P10.1 billion in 2018, “to maximize and expand existing airports and build new ones”. Duter te added the government provided some P2.7 billion for night-landing capabilities of the Clark International Airport to help decongest the Ninoy Aquino International Airport. Some P1.7 billion is also allocated for the modernization of ports and harbors nationwide, including the Al-Barka Ports Cluster in Al-Barka, Basilan; Volcano Island Port in Talisay, Batangas; and Agkawayan in Looc, Occidental Mindoro. Duterte said the government will also shell

Manufacturers. . .

out P5.3 billion for maritime infrastructure program “to boost maritime-patrol capabilities”. On top of this, the rail-transport program will receive P26 billion under the 2018 budget proposal, of which P6.6 billion is allocated for the Mindanao Railway Project Phase 1.

‘Endo’

B e llo admitted that there are still contractual employees in the private and government sectors despite the implementation of Department Order 174, which prohibits labor-only contracting. In the same budget hearing, Bello said it is impossible to completely eradicate contractualization in the services sector, which include security guards, janitors and construction workers, whose jobs are outsourced usually. “This may not be a perfect department order, but it is an order that prohibits illegal or illegitimate contractual relations,” Bello said. “Logic will dictate that you have to outsource it if you can’t have regular employees. It would be difficult to make it absolute,” Bello said. The secretary also said of the DOLE’s 6,300 employees nationwide, 686 are contractual workers. The labor department is seeking P10.816 billion in the 2018 proposed national budget. It is lower than this year’s P11.439 billion.

Continued from A12

percentage to total volume of liquid petroleum is now at 2 percent. Palm oil is used as a feedstock, particularly in biodiesel, to be mixed with petroleum diesel. According to Arranza, the price of palm oil is half of that of coconut oil in the world market, or $ 1,500 per metric ton for coconut versus $725 per metric ton for palm oil.

The association head said that, given the higher yield of palm oil per hectare, this should be given a chance to be considered as a fuel additive. “The potential for growth of palm-oil production is at least a million hectares. As a cheaper additive, you can bring down the price as well,” Arranza added.

he said. Nevertheless, any shortfall will be kept within 1 percent of GDP, which is “very manageable and sustainable” and consistent with the Philippines’s economic growth potential of 7 percent, Espenilla said.

will probably exceed the 6.4-percent pace recorded in the first three months of the year, Budget Secretary Benjamin Diokno said in a Bloomberg TV interview on Tuesday. GDP increased 6.4 percent last quarter from a year earlier, according to the median estimate in a Bloomberg survey. The economy is on track to post growth of 7 percent for the full year, he said, underpinned by President Duterte’s plan to ramp up spending on roads and railways. Espenilla said the central bank also isn’t worried on the inflationary impact from a tax-reform bill that would help fund the government’s infrastructure spending of $160 billion to $170 billion over the next five years. Inflation could quicken by 0.5 percentage point next year to 3.7 percent, from a revised forecast of 3.2 percent, and then fall in 2019 as the tax reforms lure “confidencebuilding” inflows that are expected to boost the peso, he said. “The tax reform should not be responded to by monetary policy.”

GDP report

GDP data for the second quarter

Catherine N. Pillas

Bloomberg News

28-day TDF. . . Continued from A1

for the 28-day TDF. These volumes have been in place since May this year. The BSP earlier expressed confidence on what is happening at the weekly auctions, saying everything was in line with expectations. “This is, after all, expected by the BSP because we want the excess funds to be channeled to financing productive economic activities, including infrastructures,” a BSP official earlier said. He quickly added the BSP will continue to assess the various features of the interest rate corridor, including the volume of the weekly auctions. In July the deposit windows showed undersubscriptions, indicating the banks find investing in government securities to be rewarding. Bianca Cuaresma

The Nation BusinessMirror

news@businessmirror.com.ph

Editor: Vittorio V. Vitug • Thursday, August 17, 2017 A3

CA votes against Taguiwalo’s confirmation as DSWD secretary

L

By Jovee Marie N. dela Cruz & Elijah Felice E. Rosales

@joveemarie @alyasjah

eft-leaning members of the Duterte Cabinet on Wednesday criticized the decision of the Commission on Appointments (CA) to reject the appointment of Social Welfare Secretary Judy M. Taguiwalo. In a news statement, the National Anti-Poverty Commission (NAPC) said Taguiwalo earned the ire of lawmakers for “her principled stand against the pork-barrel system”. The NAPC is headed by Liza L. Maza, who, like Taguiwalo, was a nominee of the National Democratic Front (NDF). “We have allowed the oligarchs again to triumph over the Filipino people. The poor have already little representation, and we keep denying them the chance to be served by

government officials like Secretary Judy, who is a staunch advocate of the poor and marginalized,” the statement read. The NAPC said Taguiwalo has supported the agency’s flagship campaign, dubbed “Kilos Sambayanan”. “She believes there is a need for convergence of all the programs of the government agencies that provide direct social services to the Filipino people, which is what Kilos Sambayanan is,” the NAPC said.

Monreal reminds airport passengers, and well-wishers: No bullets please By Recto Mercene

@rectomercene

S

ome travelers at the airport never seem to learn. Notwithstanding reports of previous arrests and detention for the offense, a new batch of seven Filipino and foreign nationals are now being investigated for illegal possession of ammunition in their luggage or personal belongings in a span of three days from August 12 to 13. Manila International Airport Authority General Manager Ed Monreal said, despite numerous signs posted at all passenger terminals of the Ninoy Aquino International Airport (Naia) reminding passengers to refrain from carrying bullets, “the public continue to bring with them these illegal items, hiding them in their check-in luggage or wallet”. “ The airport authorities are appealing once again to the riding public and to all senders and well-wishers to refrain from bringing either live or empty bullet shells into the airports,” Monreal added. He said that aside from the three male Japanese who were stopped at the Naia Terminal 2 while about to board a connecting flight to Japan on August 13, three more were caught on the same day with the same offense. A report forwarded to Monreal by Ma. Consuelo Bungag, chief of the airport Public Affairs Office, showed that on August 12, at 7:47 p.m., a caliber 38 bullet was intercepted from Elizabeth Bermido, of Olympia, Makati City, including a well-wisher at the arrival gate 2 of the Naia Terminal 3. An airport supervisor informed the Airport Police Department regarding the bullet detected inside the wallet of Bermido.
 After confiscation and documentation of the bullet, the wellwisher was released and turned over to PO1 Ronald Morata of the police airport security along with the confiscated ammunition. Justifying her possession of the banned item, Bermido claimed the bullet was her amulet to cast away bad luck, which seems not to have worked to her favor that time when bad luck caught up with her on that day she was arrested, the airport police said. In the morning of August 13, at Gate 6 security checkpoint, at Naia 3, Jenevie Eroy Angot, a Filipino, of Kabayan San Jose City, and a well-wisher, was caught in possession of two bullets inside her wallet. At 7:29 a.m. at the final x-ray section also at the Naia Terminal 3, Bencaben Tomacas, 83, of Xavier Heights, Cagayan de Oro City, and a departing passenger of Cebu Pacific flight 5J-383 bound for Cagayan de Oro, was found with one bullet shell in his pocket. Then, at around 11 a.m., Japanese nationals Ryo Matsuraa, Akira Nishonono and Narise Noda were found with three bullets in their trolley bags as they passed security at the departure area of the Naia Terminal 2. They said they had a target shooting in Guam and took the bullets as souvenirs. On August 12 at 10:10 a.m. two rounds of caliber .45 bullets were found on departing passenger Rhodora Vargas as she was to board a flight bound for Tagbilaran at the initial screening checkpoint of the Naia Terminal 4. After investigation, all of the passengers and well-wishers were released from police custody without being charged. Monreal said the passengers and well-wishers were allowed to leave without the filing of cases.

Kilos Sambayanan is the NAPC’s poverty-reduction measure, which listed food and agrarian reform, water, shelter, education, health care, work, social protection, healthy environment, peace and participation as the 10 basic needs of the poor. “Secretary Judy served the people well. In her first months in office, she was able to accomplish what her predecessors failed miserably to deliver in years—prompt and efficient delivery of services to the greatest number of poor Filipinos who need them most,” the NAPC added. Labor Secretary Silvestre H. Bello III, for his part, said he was astonished by the decision of the CA to reject the appointment of Taguiwalo. “It’s unfortunate that the CA did not confirm her as social welfare secretary. She is, to me, one of the top performers,” Bello told the BusinessMirror. Cabinet members, such as Presidential Communications Secretary Martin M. Andanar, also expressed their disappointment with the rejection of Taguiwalo. “Secretary Judy is

A

of Anakpawis said the rejection of Taguiwalo “will be a great lost not only to the department, its establish reforms, but also to poor Filipinos that have been given service under her watch.” “ The rejection of Secretary Taguiwalo only shows that the interest of patronage politics and corruption prevails. Those who are opposing her confirmation clearly are against pro-people reforms in the department,” Casilao said. Casilao added many Duterte appointees who are members of powerful political clans and former army officials have been swiftly confirmed, while, on the other hand, progressive Cabinet members experience the opposite. “We are hoping that the next DSWD secretary should continue the reforms in which Secretary Taguiwalo had started, promoting propeople reforms, timely concern to the welfare of the poor and untainted by corruption style of work. It would be a waste if this reforms will not be kept”, Casilao said.

For their part, Gabriela Reps. Emmi De Jesus and Arlene Brosas, in a joint statement, said the CA “once more shamefully reveals its bias against the poor in rejecting Taguiwalo, consequently putting an end to the competent, honest and efficient service that Taguiwalo has offered to the people during her stint”. The lawmakers also challenged members of the CA to reveal their votes and their reasons for rejecting Taguiwalo. The lawamkers said Taguiwalo has stood against using the DSWD for political patronage, “barring pork-hungry officials from gaining full access to DSWD funds and ensuring that services and relief are delivered to those who truly need them”. Bayan Muna Rep. Carlos Isagani T. Zarate, meanwhile, said, “The Duterte administration will be losing a very competent and dedicated DSWD secretary with this rejection and the majority of the people catered to by the DSWD would be the ones to suffer.”

BIR forms team to probe Bautista’s ‘ill-gotten wealth’ By Joel R. San Juan

@jrsanjuan1573

T

HE Bureau of Internal Revenue (BIR) has started gathering evidence for possible tax-evasion case against beleaguered Commission on Elections (Comelec) Chairman Andres D. Bautista. This was disclosed by Justice Secretary Vitaliano N. Aguirre II at a news briefing on Tuesday, adding that the BIR has formed a five-member team to investigate possible violations of the National Internal Revenue Code by Bautista following allegations of hidden wealth of about P1 billion. T he Depa r t ment of Just ice (DOJ) released to the media a copy of BIR Special Order 706-2017, which was signed by Commissioner Caesar R. Dulay. In the said order, Dulay designated Regional Director Glen Geraldino of Revenue Region 8 (Makati City) as head of the probe team, with Regional Director Manuel Mapoy and Revenue District Officers Petronilo Fernando, Bethsheba Bautista and Isabel Paulino as members. In a separate letter, Dulay sought Aguirre’s assistance in the BIR probe. “To help in the effective discharge of the team’s investigative authority, kindly furnish it, through Director Geraldino, with any and all affidavits, reports and documents, which your office may deem pertinent to the tax investigation,” the BIR chief asked. Aside from Bautista, Aguirre said also covered by the BIR probe are Bautista’s estranged wife Patricia Paz, law dean Nilo Divina and his Divina law firm, Luzon Development Bank (LDB) “and other related parties”. Patricia claimed in her recent affidavit that her estranged husband had money in banks, condominiums, and interest and shares in companies established overseas that the poll chief allegedly did not declare in his 2016 Statement of Assets, Liabilities and Net Worth (SALN), with a total estimated value of almost P1 billion. Bautista has declared a P176.3

Troops kill BIFF bomb expert in Maguindanao bomb expert of the Bangsamoro Islamic Freedom Fighters (BIFF) was killed on Tuesday night during a law-enforcement operation by policemen and soldiers in Maguindanao. Capt. Arvin Encinas, spokesman of the Army’s 6th Infantry Division, identified the suspect as Ebrahim Ali, alias Ebs, 49, who was included in the list of wanted persons sought with the declaration of martial law in Mindanao. Encinas said Ali was a bomb instructor of the BIFF under Muhaiden Animbang, alias commander Kagi Karialan. Encinas added elements of the Army’s 603rd

one of the most hardworking Cabinet members and, for one year that we had her, we learned a lot from her dedication at work and for the country,” Andanar said in an interview with reporters. He, however, assured social-welfare efforts intended for victims of the conflict in Mindanao will not be affected by the rejection of Taguiwalo. “I believe the democracy in the Department of Social Welfare and Development [DSWD] is stable...and the officials there can sustain the work,” Andanar added. Taguiwalo is among the three leftist Cabinet members appointed by the President with the endorsement of the NDF. She is the third presidential appointee to be rejected by the CA, following the fate of erstwhile Foreign Affairs Secretary Perfecto R. Yasay Jr. and Environment Secretary Regina Paz L. Lopez. Militant lawmakers, for their part, also strongly condemned the CA decision. Party-list Rep. Ariel B. Casilao

Brigade and the police Criminal Investigation and Detection Group were dispatched to arrest Ali on Tuesday. However, Ali reportedly drew his gun upon sensing the government troops at his lair in Barangay Awang, Datu Odin Sinsuat, Maguindanao, at around 7:15 p.m. “The subject pulled out his gun from his sling bag when about to be arrested, prompting the arresting team to shoot him,” Encinas said. Encinas added the operating troops recovered a .45 caliber pistol with a magazine loaded with six live bullets. Rene Acosta

million total net worth in his 2016 SALN. She also alleged that the Comelec chief had pay slips and checks received from Divina law firm “as commission for assisting the law firm clients with the Comelec”. Patricia, likewise, claimed that Bau-

tista had 35 passbook accounts at LDB with a total balance of P329,220,962. Aside from the BIR, the National Bureau of Investigation is also conducting a case build-up for possible graft and violation of the Anti-Money Laundering Act against Bautista. Aguirre added he received several

documents indicating possible anomalies in the Presidential Commission on Good Government (PCGG) when Bautista was still chairman during the previous administration. Thus, the DOJ chief said he has directed the PCGG to look into these reported anomalies.

Economy

A4 Thursday, August 17, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

ADBI pushes ‘kicker bonds’ to boost PHL infra revenue By Cai U. Ordinario

T

@cuo_bm

he Asian Development Bank Institute (ADBI) has proposed the use of “kicker bonds” to boost infrastructure revenues in developing countries, including the Philippines. In an Asian Development Blog (ADB) posted on Wednesday, ADBI Dean Naoyuki Yoshino and Legal Advisor Grant Stillman said the infrastructure needs of developing countries, like the Philippines, cannot be borne exclusively by the government. Yoshino and Stillman added tapping private-sector funds, such as through the issuance of kicker bonds can provide the much needed resources to finance trillions worth of infrastructure needs. “An infrastructure bond that can tap future tax revenues and share a fair proportion of the newly reaped revenue streams with the original investors could solve this problem. We have nicknamed it a ‘kicker bond’ in honor of Oregon’s tax-rebate system, in which budget surpluses are returned to state taxpayers,” Yoshino and Stillman said. However, Yoshino and Stillman added kicker bonds have not yet been used. Nonetheless, they said the idea to create these bonds came from the experiences of Japan, the US and Europe. Initially, Japan and the US sold or allowed the development or even granted rights to use real estate surrounding big-ticket infrastructure projects, such as railways to the private sector to boost tax revenues once the projects have been completed. However, Yoshino and Stillman said this is harder to implement today since most of the available land is already occupied and, as such, cannot be given to the private sector. The issuance of the kicker bonds will not necessitate the granting of land or land use to any private company. For their investment, the private sector can reap their returns once the bonds mature. There was a similar measure done in Europe where the government issued five-year immunization bonds. The bonds were backed by government

contributions pledged over a 20-year period. This ensured higher yields of up to 30 basis points and enabled the collection of more funds for muchneeded immunization needs. “Financial engineering is driven by new approaches to old problems, as the surprising success of green bonds and social or development impact bonds has shown us. Hopefully, the time of the kicker bond for infrastructure has arrived,” Yoshino and Stillman said. The ADB said the 45 developing member-countries must invest $26.166 trillion until 2030. This translates to $1.744 trillion, or 5.9 percent of the region’s GDP annually. ADB said Southeast Asian economies need to invest 5.7 percent of GDP until 2030. This means investing a total of $3.147 trillion between 2016 and 2030 using 2015 prices and an annual investment of $210 billion until 2030. In the Philippines, National Economic and Development Authority (Neda) said infrastructure funds are most needed in addressing the infrastructure gap in paved provincial roads in terms of kilometers (km) is 71.4 percent. This means of the 36,075 km, only 28.7 percent, or 10,353.53 km, of provincial roads have been paved. The country still needed around 25,721.48 km to pave all subnational roads. Neda data also showed that funds are also needed to address the infrastructure gap in paved city roads was at 38.2 percent, of 15,376 km of city roads. This means only 61.8 percent, or 9,502.37 km, have been paved. The infrastructure gap in barangays covered by municipal recycling facilities was also significant at 46.2 percent. In terms of barangays covered by solid-waste management facilities, the gap is at 36.1 percent. Double-digit infrastructure gaps were also observed in Mindanao's household electrification level at 27.6 percent; access to broadband in cities and municipalities, 23.6 percent; and access to irrigation service, 13.6 percent.

news@businessmirror.com.ph

Solon highlights ‘flaws’ in 2018 budget spending By Butch Fernandez

P

@butchfBM

rojecting the national budget to grow by P1 trillion within two years, from P2.682 trillion in 2016 to P3.767 trillion in 2018, Senate President Pro Tempore Ralph G. Recto on Wednesday voiced concerns that government agencies do not have have “the capacity to spend their allocations”. Recto sought assurance from the Duterte administration’s economic managers that the agencies can “spend the money in full, for the right things and on time” during the initial Senate deliberations on the 2018 spending program. Recto, citing official figures, aired apprehensions over “the disturbing trend of overappropriations and underspending”. For instance, the senator noted that the budget for personal services, of which P746 billion was spent in 2016 out of a budget of P794 billion, “or an underspending or over-appropriation of P48 billlion” allocated for payroll and other compensation expenditures for state employees and pensioners. Moreover, Recto raised the case of maintenance and other operating expenses (MOOE), whose disbursements, he added, reached P1.011 trillion out of the P1.127 trillion provided for in the

2016 budget, “or a slippage of P116 billion”. He noted that MOOE covers nonsalary operating expenses like utilities, supplies, rent and grants. “Even in allocations for debt service we overdo it,” Recto said, recalling that the previous administration “over-requested by asking Congress to allocate P392 billion to service debts but only P304 billion was spent, or an excess of P90 billion.” He surmised this happened because the officials concerned “bloated forex assumption in computing interest payments”. Recto added: “The worst manifestation of underspending is in capital outlays, largely infrastructure.” For instance, Recto recalled that in 2016, the Executive asked for P1.175 trillion, but managed to obligate P823 billion, or a shortfall of P352 billion. “In all, unreleased appropriations

₧1T The estimated hike in the 2018 budget compared to the 2016 level of P2.682 trillion, according to Senate Pro Tempore Ralph G. Recto

reached P63.43 billion in 2016, on top of the unobligated allotments of P544.53 billion.” The Senate leader lamented that "the utilization rate is low”. “We betray the people when we are slow, or if we fail, in returning the taxes they have paid, through the national budget,” Recto said. “The results penalize a people who have the right to expect the things promised in the budget, and the fault lies in the tendency of officials to ask for more than they can spend.” He added, “Most of the time they even complain the fund is not enough but, at the end of the day, the appropriation is not used.” Recto raised the possibility that the bureaucracy may have reached “peak capacity” in implementing projects and programs. “This could be a result of a technical deficit, which, in the case of agencies with infrastructure assignments, is “due to lack of engineers and technical people,” the senator said.

The mad hatter An itinerant hat vendor finds a novel way to display a set of hats he sells to local and foreign tourists in foray at the Walled City of Intramuros in Manila. He sells the hats at an average price of P150. STEPHANIE TUMAMPOS

C3 Expressway Project undergoes DPWH review By Lorenz S. Marasigan @lorenzmarasigan

T

he unsolicited proposal of Ayala Corp. and SM Investments Corp. for the construction of an expressway to decongest major thoroughfares in Metro Manila, including the heavily congested Edsa, is currently being reviewed by the public-works department. Public Works Secretary Mark A. Villar said the P23.7-billion C3 Expressway (C3EX) proposal of the two conglomerates may be in conflict with some of the government’s planned projects, noting, however, that the review of the initial proposal has yet to be finished. “We are reviewing it. It is at the very early stage of submission, so we are studying its effects on the existing projects. There might be some conflicts on alignments,” he said in a mix of English and Filipino. He added that in order for his group to draw a conclusion out of the pro-

posal, the companies must submit a few more requirements, including a complete viability study. “They still have to submit a fullblown feasibility study. Some when they have submitted all of the requirements, we’ll be able to give [a decision]. But we already started the vetting process,” Villar said. Earlier this year, the a consortium led by AC Infrastructure Holdings Corp. and SM Investments submitted an unsolicited proposal for the financing, design, construction and operations and maintenance of the C3EX. Under the initial proposal, the two groups will build an 8.6-kilometer road that will start from the fringes of the Skyway Stage 3 at Santa Mesa in the city of Manila. It will continue across the San Juan and Pasig Rivers through the Santa Ana District in Makati City and then to the northern edge of Makati Central Business District before traveling west to end at Diokno Boulevard in Pasay City. The road, when completed, is ex-

pected to serve over 50,000 vehicles per day upon completion of construction to relieve traffic congestion along Quirino Avenue and Edsa. Villar noted that should there be conflicts on the alignment of the proposed C3EX, the public-works department may suggest the proponent to modify its proposal. “There is an initial proposal, then we would note if there is a conflict or not, and then suggest changes. We are open to all projects, and there’s no problem to that. We are entertaining unsolicited proposals,” Villar said. The said project is being opposed by San Miguel Corp., the operator of Skyway and Ninoy Aquino International Airport (Naia) Expressway. Ramon S. Ang, the company’s president, was quoted as saying that the C3EX will “cannibalize” the Naia Expressway, and that by doing so, the government must pay the company a sum of P26 billion—P11 billion for the premium it paid for the project, and P15 billion for building the toll road.

Agriculture/Commodities BusinessMirror

news@businessmirror.com.ph

Editor: Jennifer A. Ng • Thursday, August 17, 2017

A5

Farm output to grow 6% in 2017–Piñol By Jasper Emmanuel Y. Arcalas

D

@jearcalas

espite the outbreak of bird flu in Pampanga, the Department of Agriculture (DA) expressed confidence that farm growth would still reach 6 percent on the back of higher crops production.

Agriculture Secretary Emmanuel F. Piñol said the performance of the crops subsector would offset the adverse effects of the avian influenza (AI) incident in San Luis, Pampanga, on the local poultry subsector. “ The impact would be very minimal for the third and fourth quarter. Based on reports from the regions, palay harvest during the period will be good,” Piñol told reporters in an interview on Wednesday. “I think we will be able to sustain growth in the first half, but it will not be more than that,” he added. The DA, however, maintained its farm-growth target of 6 percent to 7 percent for this year. The Philippine Statistics Authority (PSA) projected that palay production this year would expand by 9 percent to 19.22 million metric tons (MMT), from

17.63 MMT recorded in 2016. The figure is also 3.5 percent higher than the DA’s target palay production of 18.57 MMT. The PSA attributed the possible increase in palay output to the expansion in rice areas. “Harvest area may increase 5.1 percent year-on-year. Yield may improve from 3.87 metric tons [MT] per hectare to 4.01 MT per hectare, or by 3.77 percent,” the PSA said in its report, titled “Rice and Corn Situation Outlook, July 2017 round”. The report noted that palay area this year would expand to 4.788 million hectares, from 4.556 milion hectares last year. As for corn, the PSA said harvest this year could reach 8.02 MMT, 11.02 percent higher than the 7.22 MMT recorded last year. The PSA said more farmers would plant corn due to favorable planting conditions.

File photo

Piñol said the crops subsector, particularly palay, would drive the agriculture sector’s performance in the second half of the year. “Barring strong typhoons, we would be able to become self-sufficient in rice as early as 2019,” he said. Philippine palay output in 2014

reached a record high of 18.97 MMT, according to data from the PSA. Piñol added he also expects the livestock subsector, which contracted by 1.1 percent in the second quarter, to recover in the fourth quarter of the year. “Raisers have started to raise

more hogs after the porcine epidemic diarrhea incidence last year. So, I expect hog production to recover in the last quarter,” he said. The DA chief ’s pronouncement came after the agriculture sector grew by 5.71 percent in the January-to-June period, as it continued to recover from the adverse

impact of El Niño, which hit the country last year. Earlier, economists told the BusinessMirror that Philippine farm output could grow at a slower pace in the second half of the year following the discovery of the bird-flu outbreak in San Luis, Pampanga.

DA crafts 5-year road map to boost mango output PHL reopens market for British beef

O

fficials of the Department of Agriculture (DA) enjoined mango growers and local chief executives to help the government craft a fiveyear road map to develop the local mango industry. Agriculture Secretary Emmanuel F. Piñol met with local government officials and stakeholders in the mango industry on August 11 in Lingayen, Pangasinan. “Mango growers should take this opportunity to look out for possible technology development for [their] fruit production,” Piñol said in his speech before farmers and other stakeholders in the local mango industry. He added Philippine mango is one of the best mangoes in the world and is preferred by many foreign countries. To fill the world’s increasing demand for Philippine mango, Piñol said he will prioritize the increase in its output. “The government is very serious in its intentions to craft a road map for the development of this fruit,” Piñol said. “We need to stop ignoring the commodities our country is known for. We will exert all our efforts and maximize all available funding to rehabilitate the mango industry,” he added. Piñol encouraged mango growers to group themselves and identify areas that will serve as a model

farm or learning center for farmers who want to learn different techniques in mango growing. “We will build a model farm with dormitories and audiovisual facilities for our farmers. We will, likewise, set up protocols to combat cecid-fly infestation and all must follow these protocols,” Piñol said. According to Philippine Mango Industry Foundation Inc. President Virginia de la Fuente, the mango production in Region 1 has declined from 2009 to 2014. “Though there is an increase in areas planted with mango, we experienced a huge loss, particularly in 2016, because of infestation of cecid fly affecting more than 50 percent of the mango growers in the region,” de la Fuente said. Agriculture Undersecretary for High-Value Crops and Rural Credit Evelyn G. Laviña led the forum, which was attended by more than 500 participants from different provinces of Luzon. Laviña stressed the importance of innovation and good agricultural practice in the mango fruit-production program of the department. “The development of the mango industry is the responsibility of everyone. Let’s embrace something that we know will help the industry,” Laviña said. The stakeholders’ forum will continue on August 18 in Cebu and on August 23 in Guimaras.

War on sugar has food giants vying to make stevia tastier

O

ver the past decade, a little-known herb 200 times sweeter than sugar has become a $4-billion global industry, showing up in everything from CocaCola sodas to Heinz ketchup. Not a bad start for a product that many people still think has a bitter aftertaste. The stevia plant, which can be processed into a zero-calorie sweetener, has taken off as a sugar alternative. Consumption tripled from 2011 to 2016, according to data from researcher Euromonitor International. While it’s still a small part of sweetener sales, companies, such as Cargill Inc. and ED&F Man Holdings Ltd. are investing more— including to improve the taste. “This is a market that has huge growth potential,” said Jonathan Hugh, head of the agri-industrial division at London-based commodity trader ED&F Man, which has a stake in the stevia-based Unavoo Sweetener. “We see a lot of investment opportunities.” Finding a low-calorie sugar substitute that doesn’t alter the taste of iconic brands has been a longtime quest in the food industry, especially with a global obesity epidemic and rising rates of diabetes. Over the years, that’s led to artificial man-made sweeteners, such as aspartame, sucralose and xylitol. But many consumers report unpleasant side effects from those products, or they worry about ingesting chemical additives.

Stevia, often marketed as a natural sweetener because it is derived from plant extracts, has almost no calories and a glycemic index of zero, which means it can be consumed by diabetics.

Cargill boost

Named after a Spanish botanist, stevia is a member of the sunflower family of plants and grew in South America for hundreds of years. It didn’t get much attention until 2008, when Minneapolis-based Cargill—one of the world’s largest agricultural companies—introduced its stevia-based Truvia sweetener in the US. Demand accelerated after that, including in 2011, when the European Union approved stevia use in food. It’s now found in salad dressings, chewing gum and even face wipes for babies. The plants—which thrive in sunny, warm conditions—are now grown in more places, including Paraguay, Kenya, China, the US, Vietnam, India, Argentina and Colombia. More than 10,000 stevia-containing food and drink products have been added in five years, with more than 70 percent being introduced in the past three years, according to PureCircle Ltd., a Malaysia-based stevia maker partly owned by commodity traders Olam International Ltd. and Wilmar International Ltd. Bloomberg News

By Catherine N. Pillas

B

@c_pillas29

eef from the United Kingdom will soon return to the Philippines more than two decades after Manila banned it due to concerns over bovine spongiform encephalopathy, or mad-cow disease. In a statement, the British Embassy in Manila said the UK’s Department of Environment, Food and Rural Affairs was able to secure an export deal from the Philippine government valued at £34 million (P2.2 billion). “I am delighted to see that British beef is coming back to the Philippines and looking forward to serving this fantastic British product,” British Ambassador-designate to the Philippines Daniel Pruce said in a statement. UK-sourced beef will now join poultry, lamb, pork and dairy among the British agricultural products with access to the Philippine market. “Securing market access for our world-class beef to the Philippines is a huge vote of confidence for a sector that already exports more than £350 million around the world, including Hong Kong and Canada,” UK Food Minister George Eustice said.

“The UK beef industry is the envy of the world and this strong demand globally for our traditional breeds reared to the highest welfare standards is what drives our exports and creates opportunities for our farmers,” Eustice added. Manila withdrew market access for British beef in 1996 due to mad cow and the ban was lifted in 2010. According to reports, Philippine meat inspectors visited the UK last year to reassess its food-safety standards. The British E mbassy in Manila noted that the Philippines is the largest food and drink market in Southeast Asia, with meat consumption expected to grow by 10 percent over the next 10 years. The Philippines first opened its doors to UK pork more than a decade ago, with the UK’s market share increasing substantially over that period. UK pork shipments grew four times between 2015 and 2016, with pork offal shipments rising by 40 percent in the same period.

A6

TheBroa

Business

Thursday, August 17, 2017

The next big experien

panoramic view of the coast in the beautiful surroundings of Tablas. Softlightaa | Dreamstime.com

M

By Roger Pe

ARBLE’S a marvelous mineral. From enhancements that beautify walls and lobbies of elegantly designed skyscrapers to giving character to hotels, offices and homes; bathrooms looking so clean one can sleep in them to balustrades, stairs, monuments, hallways, terraces and tiles that, literally, can floor you (pun intended): What else can you not make beautiful with marble? Unlimited if the people of Romblon, undisputed as the marble capital of the Philippines, are asked this question. The southern Philippine province of Romblon, 264 kilometers from Manila, has carved a proud name for itself. A quick visit to the outskirts of the main town reveals mountains sitting on a bed of marble lodes, running through its entire geographical vein. And it is not just ordinary marble. Romblon’s of high-grade Italian quality, a fact that, had Michelangelo found out so, the artist could have sailed to our shores and built an atelier in the town. Perhaps he could have also sculpted Pietà right here, or maybe, imported tons of boulders from the Philippines to Italy, con amore.

One giant rock

THE whole island of Romblon is one giant rock, blessed by nature with infinite supply of marble that comes in shades of white, green, pink, red and black. The Mines and Geosciences office estimates that the province has about 150 million metric tons of marble. “At current rates of extraction, the supply may last for three more centuries,” according to the bureau. Though the province is comprised of two other bigger islands, Tablas and Sibuyan, which are equally rich in gold and nickel, it

is marble that has made Romblon famous and gave its people livelihood for more than half a century. But there’s more to Romblon than just marble. It is an emerging tourist destination about to debut on world stage. Her beauty is slowly unraveling, its charm, history and attractions are hot on people’s bucket lists. We are pretty sure that after reading this, it will also be on a traveler’s top picks. One reason for choosing Romblon is because it will host the third Mimaropa Festival in Odiongan, from November 20 to 25.

Day One: Flight

OUR trip to Romblon was made possible by the Department of Tourism (DOT) to promote uncharted places in the country: the beautiful and stunning, different yet inviting, undiscovered yet comparable to the best in the world and destinations unique in their own persona. Regional focus on Mimaropa (Mindoro, Marinduque, Romblon and Palawan) was scheduled for August, giving spotlight on Romblon this time. Cecille Aranton, DOT head for Mimaropa market and product development, laid the groundwork and made sure travel itinerary for invited media guests ran like clockwork. Typhoon Gorio delayed our flight for a week, but on our next

Monday flight, the sun shone brightly—perfect, just as we wanted. I arrived at the domestic airport way ahead of the group, to avoid long queues and possible bedlam. To begin with, the mood at the terminal was festive as if nothing was happening in the South. Seats were full of foreign and local tourists. By a little past noon, our airplane jetted off quietly. The 76-seater Cebu Pacific ATR plane then glided over 18,000 feet, moved gently with the clouds and showed us Manila’s beautiful skyline. In a little over 20 minutes, we were cruising above Batangas and, a few minutes later, a big island with a large inland body of water beckoned. I whispered to myself: “That’s Mindoro and that’s Naujan Lake.” I checked my map, gee, I was right. The aircraft then veered southeast, signaling that we were approaching Tablas, Romblon’s biggest island and where the province’s commercial airport is located.

Arrival

WE arrived exactly after an hour. The flight is rated pleasant and comfortable: no air pockets and bumps; smooth all the way. After disembarking, we traversed an almost 20-kilometer well-paved road at the foot of Tablas’s mountain ridges. Romblon is a place I’ve known only in textbooks and newspapers. It lies at the foot of a lush mountain range so green you readily get refreshed at the onset. The immediate feeling you get is “the people have been waiting for you; feel at home.” Our vehicle snaked through a highway astride a quiet sea that rocked Romblon a week prior. Halfway through, just as I was about to be lulled to sleep by the long ride, I saw a sign on the road: Watch out for falling rocks. My desire to take a nap faded. Getting closer to San Agustin town, our jump-off point to the capital, it dawned on me that most of Romblon’s towns, if not all, belonged to a category of places that have remained quaint, undisturbed and unbelievably quiet to the point of being bucolic. One might call it

Marble plant workers in Romblon. runkokokrun/wikimedia commons

too “provincial.” And here lies Romblon’s beautiful charm: far from the maddening, rambunctious city crowd, an experience that money can’t readily buy. Serenity pervades all over. After about 45 minutes, the very welcoming town-hall people served us a hearty lunch of inihaw na bangus (grilled milkfish), adobo (meat stewed in vinegar and soy sauce), tinolang manok (chicken stew) and Romblon’s pride, sarsa. The latter is a local dish made of small shrimps caught in river streams, mixed with young coconut and chili. Wrapped in coconut leaves, it is then steamed to delectable goodness. And then, we’re finally off to the capital town.

The governor

AFTER a visit to the town plaza, we made a courtesy call to the softspoken Governor Eduardo Firmalo at the provincial capitol. A doctor by profession, Firmalo’s paternal uncle was also Romblon’s provincial governor from 1938 to 1941. Firmalo is on the

honor list of the Duterte administration for his antidrug and nomining policies. In 2011 Firmalo signed a moratorium on metallic mining in the province and mobilized people to oppose large-scale mining activities in the area. “It is tourism that can help spur growth in Romblon, not destructive mining,” Firmalo has said. The governor is focusing on building more infrastructure projects to improve accessibility and make commuting between Romblon islands a pleasant experience for all. Only Cebu Pacific flies to Romblon (three times a week). Firmalo is hoping that the airline will increase it to four. He is also working to attract excess tourists from Boracay to visit the province for a change of atmosphere. Firmalo hopes tourism realestate investors would turn their eyes on the province (just 30 minutes by boat ride) so tourists can escape the “party” scene of Boracay and enjoy Romblon’s tranquillity. More than ever, the governor

wants to improve the health conditions of his fellow Romblomanons. As a doctor, he believes that a healthy and strong populace can build a better Romblon. In recent years, his team has initiated countless fitness programs for the youth aside from continuing its feeding programs and watching over the province’s senior citizen populace. Firmalo also hopes a modern hospital would soon rise on his native turf. He eyes more boat terminals to ease congestion at the main dock. He would like to see improvement of ferry boat service between Romblon and its neighboring islands to boost commerce and tourism that he said had tripled in recent years.

Day Two: Historicity

VIEWED from a distance, the province’s eponymous town looks like a Portuguese village, creating a Mondrian art feel. Some may call it serendipity: Francisco “Paco” Sanz, the province’s first appointed governor, after a long list of Spanish officials, was born in Portugal.

aderLook

sMirror

www.businessmirror.com.ph | Thursday, August 17, 2017

A7

nce: ‘Romblown’ away

Marble ware from Romblon. Milexfabula/wikimedia commons

Speaking of things European, a stroll away from the dock is a line of small tratorrias and pizzerias. One can also enjoy German, Italian and Dutch lager in these establishments. Interisland boats of all sizes dock on the port round-the-clock. The structures in the town flaunt the colors of the rainbow. By sunset, the kaleidoscope adds a palette of drama to the panorama. Nature’s art direction by now is jaw dropping. Further up, a belfry and a cathedral (Saint Joseph’s), still stand mighty proud near the town plaza. They’re one of about seven original structures of old Romblon still existing. Erected by the Spanish Recollects in 1726, they have survived Moro pirate raids, countless typhoons and World War II. The municipal town hall still carries its old architecture. A cuartel (jail) underneath the building is a must-see. In front of the edifice is a century-old narra tree so massive you can tell it is a mute witness to the town’s colorful past. On top of a hill fronting the bay is Romblon’s Fuerza San Andres, a fort built by early Spanish conquistadors in 1644 to warn townsfolk of impending raids. During this period, bloody skirmishes between Filipino-reinforced Spanish army and marauders often occurred.

Restoration

ROMBLON chronicles indicate a Dutch invasion in the 1700s. Moro raids were also aplenty after the Spanish came. Living testaments to these fierce battles are old canons displayed in the renovated landmark. They now serve as relics of a bygone era. Today, the governments of Australia and other European countries, in cooperation with the National Commission for Culture and the Arts and the National Museum, continue to contribute efforts to restore the historic place. As we moved into the town’s innermost sanctum, more century-old houses greeted us. There was the former governor’s residence, the old elementary school and a number of antique structures that had changed ownership through the years. We then explored a marble quarrying concession and saw men unloading raw marble boulders straight from the mountain source. Adjacent to the site was a heavy equipment warehouse where giant slabs of marble stones are cut, further shaped and cleaned for export.

Sanctuary

COBRADOR was the first island we visited, a 45-minute boat ride from the town and said to be a favorite place of

former Environment and Natural Resources Secretary Gina Lopez. The island offers the clearest body of water, so clear the water sparkles. It is a self-contained community with a school built on plastic trash gathered from its surroundings. A Roro boat then took us to Sibuyan, one of Romblon’s three major islands. We landed in invigorating Magdiwang, a flourishing town, all green and refreshing to the senses. We enjoyed a bit of paradise in Sanctuary Garden Resort located in barangay Tampayan. Here, you can see myriad of birds chirping, delighting you as they perched on flower gardens and trees around the wooded villas. I actually saw hummingbirds and yellow oreoles, and whispered, “Wow!” The resort, indeed, is a refuge. A river, a few steps away, runs through it, perfect for kayaking. The amenities are traveler-friendly and comfortable, the bathroom floors are, of course, made of— what else?—marble. Also in Magdiwang is Mount Guiting-Guiting, popular among mountaineers because of its jagged rooftop. The degree of difficulty one encounters in reaching this mountain’s summit is a big challenge. “It is our adventure bestseller,” says Magdiwang municipal tourism officer Rommel Radan, who hosted our dinner at the Sanctuary Garden. The crown jewel of Romblon, Mount Guiting-Guiting has been declared a protected natural park by the government because of its diverse wildlife species.

Day Three: Sunshine

WE woke up early in the morning and hailed a jeepney to take us to Romblon’s fabled Cresta del Gallo. We passed through Marigondon, Taguilos, Cajidiocan, Alibagon, Azagra and Campalingo under the scorching hot sun. Well-paved roads greeted us, but they would be intermittently cut short by ongoing construction in-between. As we plodded along the way, more road-widening work loomed in the horizon causing our vehicle to slow down. And when it did,

dust would furiously swirl and hover around us we had to duck and cover our faces. “Are we there yet?” I heard someone ask just as I was about to ask, “How many more minutes?” We finally reached San Fernando town after four hours. Vice Mayor and Municipal Tourism Officer Arben Rosas met us at the pier. From there, we took another one-hour boat ride to Cresta de Gallo. Meanwhile, the sun was getting hotter and hotter, and I murmured: “I hope this is worth the long trip.” Midway, I saw a school of flying fish and farther, a big splash spurted out of the sparkling turquoise blue waters. “What could it be?” I asked while removing my sunglasses to get a better view. Then I heard everyone yell, “Dolphins! Dolphins!” Yes, those dolphins escorted us until we reached Cresta del Gallo’s spectacular white sandbar. It is certainly worth the trip. I couldn’t ask for more and didn’t mind getting my skin burned.

Cresta de Gallo

CRESTA de Gallo is a five-hectare kidney-shaped islet with a stretch of white-sand beach. By low tide, the beautiful sandbar is a stunning sight and, some say, much better than those in Kalanggaman and Camiguin. Only one person lives here: the caretaker and his dogs. On a 20-meter radius, the whole island is surrounded by the clearest body of water, teeming with wide variety of marine life. I was told that you camp for the night and sail back to Sibuyan the morning after. Sibuyan is also full of underrated rivers and waterfalls that invite you to stay longer. I, for one, wouldn’t jump for a swim had Cantingas River was not so tempting and crystal-clear. We went back to Romblon town tired but still managed to squeeze in some time to see the beauty of Bonbon and Nonok, two beautiful resorts with white-sand beaches. If long trips bore you, these two can

readily satisfy your craving for sun, sea and surf, and they are right within the town vicinity, a few steps from the dock.

Forward Mimaropa

THE Mimaropa Region is composed of five island provinces of the Southern Tagalog region. It is located at the heart of the archipelago and is home to numerous marine sanctuaries, unspoiled white-sand beaches, rich flora and fauna with unique products and lovely people, making it the “Treasure Trove” of the South. Mimaropa is also home to several national parks, World Heritage sites, protected aquamarine areas and even wild safari parks that make it unique and special compared to other regions in the country. One will experience and find only rugged roads and palmfringed secluded white beaches. In the short term, the DOT wishes to make all the provinces that comprise Mimaropa “a mustsee”, “must-experience” and “naturally, a destination of choice in the country,” Aranton said. In the long term, “we want Mimaropa to help in our move to achieve the tourism vision of developing a highly competitive, environmentally sustainable and socially responsible tourism industry that promotes inclusive growth through employment generation and equitable distribution of income.” “We want to develop and market competitive tourist destinations and products, continue to participate in sales missions, tourism fairs and road shows abroad and around the country, where there is connectivity to the region, such as the cities of Manila, Cebu and Iloilo,” Aranton said.

DOT plans

ARANTON said she considers the DOT lucky “to be in a region where there is solidarity among the local chief executives to push Mimaropa as the ‘next big thing in the Philippines’.” “The biggest challenge is a call for a collaboration of efforts, continued support and partnership with government line agencies,

local government units and the private sector for us to be able to achieve our tourism programs.” She thanks Firmalo, his executive assistant Myrna Silverio and “all the hospitable people of Romblon for making us all well taken cared of throughout the trip.” Aranton added the DOT also takes inspiration from the belief that “when tourism progresses, poverty retreats” to develop and promote an environment-friendly and socially responsible tourism that delivers more widely distributed income and employment opportunities. Hence, she said the DOT includes Romblon among other locations seeing increased port calls from international leisure cruise ships. “We also would like to organize domestic media and travel trade familiarization trips specifically in emerging destinations and support the conduct of foreign travel trade and media invitational programs of the Tourism Promotions Board,” Aranton added. “We would like to make strong representations with government line agencies to improve market access and connectivity, strengthen the Convergence Programs with infrastructure agencies for the development and upgrading of roads leading to tourist destinations, airports and seaports.”

Day 4: Perfect hideaway

ON our last day, we headed back to Tablas for our flight back home. We needed to spend the night in the town for our noon flight the next day. Aglicay Resort prepared us a feast of the freshest, yummiest seafood welcome dinner. The place is a perfect hideaway for the sports-minded. It has tennis, two beach volleyball courts and a long stretch of white-sand beach fronting the dining area. Though hay fever and sinus problems bothered me a lot, I was still able to enjoy its very idyllic setting. Romblon does not disappoint the wanderlust in me. Indeed, the Philippines’s marble capital is the next big experience in terms of tourism.

A8

Banking&Finance

Thursday, August 17, 2017 • Editor: Jun B. Vallecera

BusinessMirror

news@businessmirror.com.ph

Homegrown, external issues hound peso Interest income pushes UnionBank earnings higher

U

nion Bank of the Philippines (UnionBank) grew its net income by 11.29 percent to P4.37 billion in the first six months this year, from P3.92 billion in the same period last year, as interest incomes rose in doubledigits led by trading and investment securities at 26.01 percent, according to a regulatory filing at the Philippine Stock Exchange. Total interest income increased by 14.91 percent to P11.19 billion, from P9.74 billion. The yields include loans and receivables, which rose by 13.12 percent, and interbank-loans receivables, which surged by 198.94 percent. Return on deposits climbed by 32.97 percent to P2.70 billion as time deposits also expanded. This contributed to the total interest expense that reached P3.12 billion, or 26.44 percent higher than P2.47 billion a year ago. However, interest income due from

the Bangko Sentral ng Pilipinas and other banks sunk by 38.15 percent to P0.19 billion, from P0.31 billion. Thus, the interest-incurring assets and liabilities resulted in a net interest income of P8.07 billion, from P7.27 billion a year ago, up by 10.99 percent. Other incomes from services charges, fees and commissions also moved up by 13.01 percent to P2.24 billion. Gains from sale and redemption of nontrading financial or physical assets contributed P0.27 billion. Expenses, on the other, increased by 16.82 percent to P2.04 billion, from P1.75 billion, with higher deposit insurance and fees on credit card, advertising, security, messengerial, clerical and janitorial services. However, depreciation and amortization costs declined by 5.70 percent as transportation equipment was improved. Kathryn Jose

T

he weakness of the local currency the peso in recent weeks cannot be blamed solely on external influences but on homegrown issues as well, according to a foreign bank analyst.

expected export growth in June in tandem with a year-on-year drop in imports resulting to more moderate than expected June trade deficit. “No support was also forthcoming from a relatively dovish central bank position at the Thursday policy-rate meeting,” Cuyegkeng said. “Market seemed to have concluded the economic managers would be more tolerant than before with a weaker peso,” he added. This week the local currency traded within the P51-per-dollar territory, with Tuesday’s P51.34 per dollar, its weakest since August 2006. The peso has fallen more than 3 percent against the dollar thus far, the worst performance in the region, according to currency traders. This development comes at a time when not only is the country’s external sector slightly weakened in the form of a current-account deficit but that the fiscal sector is also just beginning to spend for infrastructure and has planned a budgetary shortfall, as well. Bianca Cuaresma

taled $81.32 billion. Compared to the In his most recent macroeconomic previous year, this was $4.72-billion weakreadings, Joey Cuyegkeng, senior econoer than the $85.51 billion in the same mist at ING Bank in Manila, said that month last year. while the peso was dragged along with Despite the decline, however, the other weakened Asian currencies on BSP gave assurance the foreign-curheightened geopolitical risk, the peso’s rency reserves should be sufficient to underperformance can also be traced cover 8.6 months worth of imports of to t he cou nt r y ’s sl ight ly enfeebled goods and payments of services and external sector. primary income. Cuyegkeng said recent data showing a It was also equivalent to 5.5 times the diminution of the country’s foreign-curcountry’s short-term external debt based rency reserves or the gross international on original maturity and 3.7 times based reserves (GIR) as reported by the Bangko on residual maturity. Sentral ng Pilipinas (BSP) clearly had an Cuyegkeng also cited the weaker-thanimpact on market sentiment on the Philippines. The GIR was reported at only $80.786 billion in July, significantly lower compared to both the previous month’s and the previous year’s level. By Justice S J Ranada Jr. Compa red to t he pre ANTIMONEY LAUNDERING–rights of account holder v iou s mont h, t he GIR i n The holder of a bank account that is subject of a banks inquiry order issued ex parte July was $530 million lower than in June when this tohas the opportunity to question the issuance of such an order after a freeze order has

Case clippings

been issued against the account. The account holder can then question not only the finding of probable cause for the issuance of the bank-inquiry order, but also the finding of probable cause for the issuance of the bank-inquiry order. Republic v. Bolante 17 Apr 2017

GR 186717 Sereno, CJ

Future-proofing associations

I

was reluctant at first to accept the kind invitation of fellow association executive, Evelyn Salire, secretary-general of the Philippine Retailers Association (PRA), to attend the opening of its 24th National Retail Conference and Stores Asia Expo 2017 on August 10. Besides not being in the retail business, I also was not sure if I can have takeaways from the conference that I can relate to my work and for this column. I was glad I did and here’s why. First, the theme of the event was “FutureProofing Retail”, which sounds intriguing. Wikipedia defines “future-proofing” as the process of anticipating the future and developing methods of minimizing the effects of shocks and stresses of future events. However, future-proofing is mainly used in industries, such as electronics, medical, industr ial design and, more recent, in design for climate change. So if you can future-proof retail, can you do the same for associations? Two: great plenary speakers at the PRA conference tickled my imagination on how future-proofing retail could also apply to associations. Irwin Lee, CEO of Rustan Supercenters Inc., summed up his talk that futureproofing retail entails a “balanced approach” on whether to (1) go online or offline; (2) go small or big; and (3) go for millennials or “feelennials” (interestingly coined for baby boomers for “feeling millennial”). I thought the issue of going online or offline resonates, too, with associations in terms of the services they provide to their members, such as educational programs and publications. This is the reason blended learning—i.e., combining e-courses and faceto-face seminars—now exists. The same is true with e-newsletters and printed magazines that still coexist in most associations’ service portfolios. Going small or big relates to associations, too, in the context of the knowledge content they provide to members. Due to competition from countless Internet content providers, associations now find merit in being content curators, separating the “grain from the chaff ” so to speak, to supplement their own original content. This creates a balanced niche of knowledge resources for members. The same can be said about targeting the millennials or feelennials. Associations have reached out to both demographics and have balanced their services to cater to both.

Association World Octavio Peralta Another speaker at the PRA conference was Vic Tria, vice president and head of PLDT Alpha. His message to retailers was to consider “redefining” themselves to be relevant and to survive in the future. He also showed the new buying cycle, which consists of three elements: discovery, purchase and retention. Again, these guideposts relate to associations, as well. Giving a new meaning to and evolving your offerings to suit your members’ new needs and demands for professional growth, solutions to day-to-day operations, and business opportunities, are a must in today’s disruptive environment. Likewise, the buying cycle for retailers and the membership lifecycle for associations (read my column on March 16, 2017) are actually similar. Potential members have to know first and learn more about the association (the “discovery”) before becoming a member (“purchase”) and remaining a member (“retention”). At the end of the day, both speakers said it is the customer experience that will ultimately make or break one’s future-proofing plans. In like manner, it is the member’s experience in the association that will spell the difference between leaving and staying on as a member. The column contributor, Octavio “Bobby” Peralta, is concurrently the secretary-general of the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) and the CEO and founder of the Philippine Council of Associations and Association Executives (PCA AE). PCA AE is holding the Associations Summit 5 (AS5) on November 22 and 23, at the Philippine International Convention Center (PICC), which is expected to draw over 200 association professionals here and abroad. T h e t wo - d a y e ve n t i s s u p p o r t e d b y ADFIAP, the Tourism Promotions Board and the PICC. E-mail inquiries@adfiap.org for more details on AS5.

AseanThursday BusinessMirror

news@businessmirror.com.ph

Scientists potentially narrow MH370 search area to 3 spots

C

ANBERRA, Australia—Scientists have potentially narrowed the search area for the missing Malaysian airliner to three specific locations in the southern Indian Ocean through new satellite and drift analysis of the 2014 crash released Wednesday. But the Australian Transport Safety Bureau cautioned that the drift analysis by Australian science agency CSIRO is based on French satellite images of “probably manmade” floating objects without evidence that they were from Malaysia Airlines Flight 370. Still, the locations could provide potential starting points to search within a 25,000-square-kilometer (9,700-square-mile) expanse identified by a panel of experts in November as the most likely resting place of the Boeing 777 and the 239 passengers and crew on board. That expanse adjoins the original search zone far southwest of Australia that was identified through satellite analysis of the final hours of the flight, which apparently ended when the plane ran out of fuel. Malaysia, China and Australia agreed to suspend the deep-sea sonar search in January after 120,000 square kilometers (46,000 square miles) of seabed were combed without finding any trace of Flight 370. The new analysis is based on French military satellite images gathered on March 23, 2014—two weeks after Flight 370 mysteriously veered far off course during a flight from Kuala Lumpur, Malaysia, to Beijing — that were taken near the original underwater search zone. The Australian bureau took over the search for Flight 370 from Malaysia a week later. Satellite experts at Geoscience Australia were not asked to analyze the images until March this year. The experts concluded that a dozen objects appeared to be man-made. CSIRO then investigated where the objects might have originated before drifting for two weeks. CSIRO identified three potential crash

sites—35.6 degrees S, 92.8 degrees E; 34.7 degrees S, 92.6 degrees E and 35.3 degrees S, 91.8 degrees E. “So that is a way of potentially narrowing down the search area with the very important caveat that, of course, we can’t be totally sure that those objects seen in the images are actual pieces of plane,” CSIRO oceanographer David Griffin said. “This might be a really good clue. It might be a red herring. But if you are going to search, then you’d be silly to ignore this potential clue,” he added. The Australian bureau’s chief commissioner, Greg Hood, said in a statement, “Clearly we must be cautious” of the lack a definite link to Flight 370. Malaysian Deputy Transport Minister Aziz Kaprawi said the civil aviation department would need to evaluate the data since it’s based on satellite images from a few years ago. “We will need to verify the data to see if it’s credible before we make any decision,” Aziz told The Associated Press. Malaysia, China and Australia have decided that the search will remain suspended unless new evidence pinpoints the wreckage’s whereabouts. But seabed exploration company Ocean Infinity, based in Houston, Texas, said last week it has offered to launch a private search for the Malaysian-registered airliner. Voice370, a support group for victim’s families, said under the terms of the offer made to Malaysia in April, Ocean Infinity “would like to be paid a reward if and only if it finds the main debris field.” They urged Malaysia to accept the offer. Aziz said Wednesday that the offer was still being negotiated. He said there were some other “monetary terms” set by the firm that were unacceptable to the government. “There are three categories of findings in the offer. The terms are a bit ambiguous,” Aziz said. “The government wants the terms to be transparent and clear.” He declined to give details. AP

Indonesia president: Spread wealth, protect diversity

Indonesia’s President Joko Widodo (center) delivers his State of the Nation Address ahead of the country’s Independence Day at the parliament building in Jakarta, Indonesia, on August 16. AP Photo/Tatan Syuflana

J

AKARTA, Indonesia—Indonesia’s president on Wednesday vowed a fairer distribution of the nation’s wealth and a renewed commitment to protecting diversity after volatile months in which the country’s reputation for tolerance was undermined by religious tensions and attacks on minorities.

Joko “Jokow i ” Widodo repeated familiar themes in his an-

nual address to parliament that comes a day before celebrations

Taming of Asia’s most volatile currencies creates new danger

P

olicy-makers in Indonesia and Malaysia have been so successful in quashing currency volatility that this is breeding a new danger: complacency. Traders are being deprived of the experience to cope when fluctuations inevitably return, according to PT Bank OCBC NISP in Jakarta. At the same time, companies may cut back on hedging, exposing themselves to potential losses, says PT Sinarmas Sekuritas. Three-month historical volatility for Indonesia’s rupiah has slumped for four straight quarters, falling to a four-year low of 2.53 percent in May from as high as 16 percent in 2013. Ringgit volatility has shrunk by two thirds this year to 2.95 percent. The two currencies were previously the most volatile in Asia—now they are the least after China’s yuan. “The problem with stability is that it generates instability because you become complacent,” said Michael Every, head of financial markets research at Rabobank Group in Hong Kong. “You think things will always be the same and you don’t bother hedging and looking at risks at how things could change. You build the entire house on the beach and then the tide comes in and it gets swept away.” The central banks of Indonesia and Malaysia both took steps last year to limit currency swings after volatility surged following the election victory of US President Donald Trump. Bank Indonesia said it stepped in to stabilize the rupiah on November 11 and traders have reported officials have been in the market regularly since then.

Malaysian curbs

Bank Negara Malaysia cracked down on speculators around the

off by the dwindling volatility. The new-found stability is boosting the appeal of carry trades, which involve borrowing in lower-yielding currencies and investing in higheryielding ones.

Attractive carry

Bloomberg Photo

same time as the ringgit slumped toward the weakest since the 1998 Asian financial crisis. Policy makers enforced pre-existing curbs on trading in offshore non-deliverable forwards, which some investors said made it more difficult to hedge currency exposure. Malaysia’s central bank has continued its clampdown, saying last week offshore ringgit derivatives traded on the exchanges of neighboring Singapore contravened its laws. At the same time, it has tried to address investor concerns by allowing funds to fully hedge their currency exposure. The ringgit has stayed between 4.25 and 4.30 per dollar since the end of May, compared with 3.85 to 4.49 last year. The rupiah traded in a range of just 1.3 percent in the second quarter, versus a quarterly average of almost 9 percent since 1991. “It’s in the best interests of the economy to have deeper currency and interest-rate markets with sizable liquidity to execute, in order to support our aspirations for growth in the Indonesian economy,” said Johannes Husin, managing

Editor: Max V. de Leon • Thursday, August 17, 2017 A9

director for treasury at OCBC NISP in Jakarta. “It’s important for all Indonesian market stakeholders to stay alert and agile, in skill and in talent development, to cope with continuous changes in the global financial markets.”

Looming problem

Companies are also at risk from low volatility as they will be tempted to save costs by forgoing currency hedging, says Jeffrosenberg Tan, head of strategy at Sinarmas Sekuritas in Jakarta. “Looking at the stability of the currency, I’m sure they will have less hedging,” he said. “Right now the global liquidity is still abundant and there are lot of funds flowing into emerging-market bonds. As long as that continues it’s fine, but in one or two years from now, if they have to pay the debt at a higher USD rate, they will have a problem.” Indonesian companies excluding banks and insurance companies, have $40 billion of outstanding dollar-denominated bonds, according to data compiled by Bloomberg. Not everyone is being turned

“Declining foreign-exchange volatility for the rupiah and the ringgit increases the attractiveness of carry from a foreign investors’ perspective,” said Divya Devesh, Asia foreign-exchange strategist at Standard Chartered Plc in Singapore. “Valuations are very attractive for the ringgit, while high volatility-adjusted carry should keep the rupiah supported.” The rupiah’s stability and rising demand for emerging-market assets lured $8.3 billion of inflows into Indonesia’s bonds in the first seven months of the year. That’s the most for a comparable period since Bloomberg started compiling the data in 2010. Foreign holdings of Malaysia’s bonds have climbed from a two-year low in March. Bond issuers from the Asian Development Bank to the International Finance Corp. are considering selling debt denominated in rupiah to global investors, which Indonesia’s Financial Services Authority plans to facilitate. The lack of volatility still reduces the appeal of the two markets, according to Samsara Wang, an emerging-market strategist at Credit Agricole CIB in Hong Kong. “Given the rupiah is expected to be rangebound this year, not much value can be dug from it,” she said. “There isn’t much profit that can be earned in the short term as the levels are trapped in a tight range. The thin profit will be consumed by the bidask spread anyway.” Bloomberg News

of the 72nd anniversary of Indonesia’s independence from Dutch colonial rule. Jokowi, the first Indonesian president from outside the ranks of the elite or military, said economic development must be spread to all corners of the world’s most populous Muslim-majority nation. “Equitable development will unite Indonesia. Fair development will make us stronger in facing global competition,” he said. Indonesia is the third largest democracy after India and the U.S. and as a member of the Group of 20 major industrialized and developing nations, its economy is among the biggest in the world. But it has

dramatic extremes of wealth and poverty, grappling with both childhood stunting from malnutrition and a mounting health care burden from obesity-related diseases among the wealthier. About 11 percent of the country of more than 250 million people lives in extreme poverty and large numbers are just above that poverty line. People in far-flung areas of the archipelago such as the westernmost province of Aceh, a region granted substantial autonomy under a peace deal in 2004 with separatists, should be able to get the same standard of education, health care and other services as their “brothers” around the country, Jokowi said. He also singled out the easternmost Papua region, one of the country’s poorest areas where Indonesian rule is deeply resented by indigenous Papuans, saying he wants Papuans to feel the same nationalistic pride as other ethnic groups that make up Indonesia. He said the government will strengthen its commitment to protecting the idea of “unity in diversity” and “Pancasila,” the official state ideology that promotes principles such as social justice, democracy and belief in one God. It has been seen as under increasing threat from an upsurge in religious conservatism that led to the imprisonment earlier this year of the then-governor of Jakarta, a minority Christian and ethnic Chinese, on charges of blasphemy. Persecution of LGBT people has surged in the past two years and religious minorities have faced an increase in violations of religious freedom and acts of intolerance including the eviction of more than 7,000 members of the Gafatar religious community in Kalimantan in early-2016. AP

Thailand activist gets prison for posting BBC story about king

B

ANGKOK—A court in Thailand on Tuesday sentenced a student activist to 2 1/2 years in prison after he pleaded guilty to the charge of lese majeste—or insulting the monarchy—for sharing a BBC article about the country’s new king on Facebook. Jatupat “Pai Dao Din” Boonpattararaksa was initially sentenced to five years by the court in the northeastern province of Khon Kaen, but had his sentence halved because he pleaded guilty, a standard practice in Thai courts, said Poonsuk Poonsukcharoen of Thai Lawyers for Human Rights. Jatupat was arrested last December for sharing a profile of King Maha Vajiralongkorn Bodindradebayavarangkun that was posted online by the BBC’s Thai-language service. It included mentions of the king’s personal life when he was crown prince, including details of three marriages that ended in divorce and other material Thai news media can publish only at their own peril. The verdict was issued after a closed trial that barred reporters and the defendant’s relatives from the courtroom. Poonsuk said Jatupat’s lawyers advised him to plead guilty to the charge because his requests for bail had repeatedly been denied. Jatupat’s father, Viboon Boonpattaraksa, said on the first day of the trial that Jatupat has been denied bail 12 times. With no guarantee that an appeal would be successful, he could gain his freedom sooner by serving time and then getting parole or a pardon. “If we could have posted bail our legal fight would not be going in this

direction,” Poonsuk said, adding that defendants in lese majeste cases are rarely granted bail after being been arrested. Jatupat is a prominent member of Dao Din, a small student organization that has protested against Thailand’s military government. He was presented the Gwangju Prize, a human rights award from The May 18 Memorial Foundation in South Korea, in May while he was in detention. He was put under close watch by Thai authorities after November 2014, when he and several other Dao Din members held up a threefingered salute, a resistance gesture borrowed from The Hunger Games movies, during a speech by Prime Minister Prayuth Chan-ocha, chief of the military junta that had taken power in a coup six months earlier. He was also among about a dozen students arrested in June 2015 for participating in anti-government protests. His arrest was the first under Thailand’s strict lese majeste law since King Maha Vajiralongkorn succeeded his late father last November, sparking criticism from international rights groups that urged authorities to drop the charge and release Jatupat. Critics of the lese majeste law, which carries a punishment of three to 15 years’ imprisonment, say it is used to silence political dissidents. The military regime that took power in 2014 has especially cracked down on commentary on the internet. According to iLaw, a group that tracks royal defamation cases, 82 people have been charged under the lese majeste law since the coup three years ago. AP

A10 Thursday, August 17, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

How do you solve a problem like TNC?

T

he Land Transportation Franchising and Regulatory Board (LTFRB) suspended on Monday the operations of transport network company (TNC) Uber for violating the agency’s July 26 order to stop accepting applications for accreditation of transport network vehicle services until its drivers have secured the proper permits. In slapping the TNC with a one-month suspension, the LTFRB said Uber defied its July 26 order by activating at least three vehicles. Uber initially obeyed the August 14 suspension order and shut down its app on Tuesday morning. This enraged commuters, who lashed out at the transport agency for taking away what had become for them a trusted alternative to bad public transport. But, on Tuesday afternoon, Uber activated the ride-hailing app, telling commuters via Twitter that it had launched a legal appeal and would continue operations until the dispute was settled. The LTFRB, however, stood its ground despite pressure from commuters. In a show of support to the LTFRB, President Duterte’s spokesman defended the transport authority’s decision. “We affirm the positive and beneficial service offered by the transport network companies. However, as per the LTFRB, Uber Systems unduly challenged its rules and instructions,” Ernesto C. Abella said. Now it’s official: Uber will be out of business for 30 days. Uber, which officially launched in Manila in 2014 and later rolled out services to other cities, got itself into trouble because it wants to tweak the country’s transport laws. For instance, the LTFRB wants Uber to get permits for its drivers and vehicles in the same way taxi companies are required. However, Uber insists the drivers are independent contractors and, thus, do not have to get the permits. In a Senate hearing, company representatives disclosed that Uber has 66,000 drivers in the country. Together with the other TNC—Grab—they service about a million users a month. Government authorities need not be math geniuses to see how big the TNC business in the country has become. Indeed, Uber and Grab have become essential parts of urban life, providing comfortable rides in exchange for a few hundred pesos, depending on the distance and time you need their services. At its core, the business involves an app for matching commuters with freelance drivers. However, taxi companies and critics portray TNC as a reckless and dangerous operation that puts unregulated drivers on the road with passengers. For example, if a crash happens involving a Grab or Uber driver, can the TNCs be sued? This was the question that Ako Bicol Representative Rodel Batocabe posed to TNCs and the LTFRB at a House hearing last month. Batocabe said his nephew died in Singapore while riding Uber. “Let’s say this happened in the Philippines. Who do I sue?” he asked. The committee hearing came after the LTFRB encountered a regulation deadlock with the TNCs, as the transport agency attempted to put a cap on the number of Uber and Grab vehicles in the Metro Manila. These problems notwithstanding, there’s also the tax-avoidance issue that needs to be resolved. As one critic explains, TNCs exploit regulatory grey areas and weak enforcement and, in so doing, avoid the costs associated with having to comply with the regulatory regimes that govern their competitors. Obviously, transport regulators and lawmakers have some homework to do. As Batocabe said, “They [TNCs] can’t just operate with apps and everything without any regulation, especially when it involves public utilities and public service and especially when it involves our people.” Since 2005

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

T. Anthony C. Cabangon

Editor in Chief

Jun B. Vallecera

Managing Editor Associate Editor City & Assignments Editor

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

Senior Editors

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

Online Editor Social Media Editor

Ruben M. Cruz Jr. Angel R. Calso

Creative Director Chief Photographer

Eduardo A. Davad Nonilon G. Reyes

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

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

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

www.businessmirror.com.ph

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

Too many are like Jon Snow John Mangun

OUTSIDE THE BOX

A

t some time in the future, when the world looks back on the beginning of the 21st century, on the list of trivia will be the television series Games of Thrones. And from this will come a phrase that has entered the global language: “You know nothing, Jon Snow”. Considering that the series is now seen in 170 countries, you can imagine how many languages that phrase has been dubbed or subtitled into. It is probably a good motto for our times. Looking back, the future will see that we had one particular concern during this early 21st-century world: Wealth and income inequality. When the “Developed Nations” looked in the mirror and saw that their own countries seemed to be divided into “First” and “Third”, it became a front-page issue. Unfortunately, because most people know nothing from an historical viewpoint, bankers, governments and the fallback “blame for everything” capitalist system were singled out for scorn. That is partially accurate.

However, there happens to have been a turning point. The rules of the economic ballgame changed in 1971, when the US would no longer convert dollars to gold or silver. A new phrase—the “one percenters”—entered common language in the past decade. Used to describe the top income and wealth bracket, recent economic policies and events are blamed. But here is the reality. In the US the share of income accruing to the bottom 50 percent of income earners peaked at 21 percent of total national income in 1968. At that time, the top 1 percent of income earners was at 11 percent of the total. In 2016 the bottom 50 percent received 12 percent of total income and the “one percenters” now account for

Through more than 40 years of US presidential administrations, Federal Reserve interestrate changes, recessions and economic boom periods and countless government economic policies, the incomeshare trend has been one way since 1971: The rich got richer and the poor got poorer.

21 percent of total income. Through more than 40 years of US presidential administrations, Federal Reser ve interest-rate changes, recessions and economic boom periods and countless government economic policies, the income-share trend has been one way since 1971: The rich got richer and the poor got poorer. Another interesting correlation with that decision in 1971 is that US debt has gone from about $1 trillion—a level that it had been at for 20 years—to the current $50 trillion, both public and private. Global debt has increased from 30 percent of global GDP to nearly 100 percent, even as total global economic output has increased from $3.8 trillion to over $80 trillion. The reality is that when the US dollar became a completely fiat currency—money not backed by a

The awful stench of LTFRB Val A. Villanueva

Businesswise

G

argantuan metro traffic; exasperated and stranded passengers; Metro Rail Transit riders being loaded off to walk to the nearest station because of train breakdowns; abusive and undisciplined legal and colorum-bus drivers weaving in and out of traffic with no regard to traffic laws and the safety of their passengers, and taxi drivers refusing to accept commuters even in emergency situations. These are the same issues—aside from the illegal-drugs problem— which then-presidential candidate Duterte latched on in depicting the inefficiency of the Aquino administration and which he promised to eradicate in three to six months once elected. More than a year after he won, these are the same issues which now define his administration. Why, he even admitted that the drug war he so fetishes about could not be won. He says: “We can’t control it…no country had the resources to control ubiquitous drugs. Others can’t do it. How can we?”

The question now is: Why is he still in power? Didn’t he say that he’ll resign if he couldn’t solve all these problems? Somehow, the private sector found a novel solution to at least alleviate our fiendish traffic problem. Through ride-hailing companies Uber and Grab, commuters now have a reliable and comfortable means of travel. With Uber and Grab, you don’t have to stand at sweltering road sides to get a ride. They’ll pick you up at the comfort of your home, offices or wherever you are. You’d be travelling inside clean, sweetsmelling cars (mostly brand new)

Although they connect paying passengers and drivers through a mobile app, Grab and Uber provide transport much like a taxi service. But they’re not taxi companies, and taxi operators want them banned. Initially, the LTFRB wanted them out too, if not for the outpouring opposition by those who clamor for a decent ride to and from their respective destinations. with courteous drivers. These app-based modes of travel have generated a substantial consumer base—so popular, indeed, that they have become the target of taxi operators and the Land Transportation Franchising and Regulatory Board (LTFRB). Although they connect paying passengers and drivers through a mobile app, Grab and Uber provide transport much like a taxi service. But they’re not taxi companies, and taxi operators want them banned. Initially, the LTFRB wanted them out too, if not for the outpouring opposition by those who clamor for a decent ride to and from their respective destinations.

physical commodity—everything changed. Imagine playing a game of “Monopoly” and, every 30 minutes, the bank gives you new money equal to your cash and properties. If you were a little behind the leader, suddenly you are far behind. An hour later after two more bank giveaways, you are so far behind there is no way you can ever catch up. The rich get richer and the poor get poorer in comparison. In the next 12 to 18 months, the economic game is going to fundamentally change again. Funding to pay both private and public debt comes not from the “one percenters” but from everybody else on the economic ladder and they are broke and broken. US corporate debt defaults in 2016 were the highest since 2007. Household debt is the highest in history. Governments—like the Monopoly banker—bailed out the Western banking system in 2008 with their quantitative easing, but the “Monopoly money” is running out. The game changer will be an important country of the size of Spain or Italy defaulting on its sovereign debt. Watch for it. 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.

On Monday the LTFRB suspended for a month Uber’s operations after it allegedly disobeyed the board’s order, which disallowed all transportation network companies (TNCs) to stop accrediting drivers into their systems starting July 26. The directive should have taken effect on Tuesday, August 15, which would have stopped the operation of some 66,000 Uber drivers who ply the roads for a living. Uber complied with the ruling, and went offline starting 6 a.m. on Tuesday. But the riding public would have none of it. Through social media outlets, commuters expressed their indignation, and some even signed and endorsed petitions calling for the immediate restoration of Uber’s operations. Heeding their customers’ pleas, Uber instantly filed a motion for reconsideration and immediately restored their service. The Uber app’s booking function was online again before noon on Tuesday. Operations “will continue until the motion is resolved”, Uber says, with its appeal pending for the LTFRB to lift or shorten the one-month suspension. LTFRB Board Member Aileen Lizada, however, insists the suspension order against Uber “stands”. See “Villanueva”, A11

Opinion BusinessMirror

opinion@businessmirror.com.ph

President Corazon C. Aquino’s PCGG Cecilio T. Arillo

database Conclusion

The PLDT case

W

AS there a cover up? The question of cover up cropped up soon after former President Fidel V. Ramos took over the presidency and promptly ordered the Presidential Commission on Good Government (PCGG) to take majority control of the 11-man board of the Philippine Long Distance Telephone Co. (PLDT). Ramos’ order confirmed, in effect, that in former President Corazon C. Aquino’s regime, the PLDT was not placed under PCGG control despite evidence showing that 26.9 percent of PLDT was owned by the Philippine Telecommunications Investment Corp. Inc. (PTIC). Prime Holdings, Inc. (PHI), which Marcos owned through his front multibillionaire Jose Yao Campos and his nominees, controlled the PTIC’s 46 percent. Since the PTIC owned 26.9 percent of the PLDT, and since PHI controlled 46 percent of the PTIC, this meant that Marcos owned 12.5 percent, or 2.4 million, shares of the PLDT worth more than P4.3 billion at that time. Campos, who fronted a substantial portion of the Marcos business empire, surrendered the PLDT shares to the PCGG in April 1986 under a compromise agreement. Rolando Gapud, former president of the Security Bank and Trust Co. (SBTC), known as the “Fort Knox” of the Marcoses, also confirmed Marcos’ shares in the PLDT before he (Gapud) was allowed to escape, purportedly after getting death threats. Through the power of sequestration, the Aquino administration took control of the SBTC and the more than P1 billion in cash and other assets, which former Sen. Juan Ponce Enrile exposed to have been subsequently dissipated. Despite the spotty issue in the PLDT, the Aquino administration did not touch the PLDT shares, thus triggering speculations that Mrs. Aquino had secretly interfered in the PLDT’s favor and had kept it under wraps despite her much-publicized policy of transparency. After Ramos’s order to Magtanggol C. Gunigundo to take control of the PLDT shares, the PLDT and the PCGG subsequently forged a temporary agreement to avoid a possible legal confrontation that may disrupt the firm’s multibillion-peso expansion program. The agreement allowed the PCGG to have six government representatives in PLDT’s 11-man board. According to then-PCGG chairman Gunigundo, the agreement (he called it modus vivendi) was good only for that year, pending decision by the Supreme Court on the issue of ownership of the Marcos shares, which were disputed by the heirs of Don Ramon Cojuangco, the father of then-PLDT President Antonio Cojuangco. By comparison to the inaction on the PLDT, the Aquino administration, through the PCGG, promptly sequestered the shares of Eduardo Cojuangco in San Miguel Corp. (SMC), thus confirming the news that spread around that Mrs. Aquino had indeed maintained a double standard of justice, one favoring the Cojuangcos in the PLDT and the other punishing the Cojuangcos in the SMC, and had covered up for it to avoid public scandal. Official records showed that between 1973 and 1982, a total of P9.7 billion in coconut levies was collected under Presidential Decree 276. Of this amount, P2.4 billion was paid out as legitimate subsidies to coconut refineries and other entities. One of Imelda R. Marcos’ projects was the Technological Resource Center Foundation Inc. (TRCFI). Initially funded in the 1980s with

Despite the spotty issue in the PLDT, the Aquino administration did not touch the PLDT shares, thus triggering speculations that Mrs. Aquino had secretly interfered in the PLDT’s favor and had kept it under wraps despite her much-publicized policy of transparency. P20 million from the coconut levies which was originally intended for the scholarship program for deserving children of coconut farmers, the TRCFI grew into a multibillion-peso non-governmental organization. The foundation was registered with the SEC with Mrs. Marcos as the founding chairman, Onofre D. Corpuz as vice chairman and Jose Conrado Benitez, Edmundo Reyes and Jose Yulo as board members. In addition to the initial budget, the TRCFI received grants and aids of more than P230 million from other countries. After a few years the TRCFI’s assets grew to more than P1 billion. Its assets included P14 million in cash, four plush villages (Ecology I, Ecology II, Ecology III and Ecoville), a building and a big prime lot at the corner of Buendia Avenue and Edsa, seven staff houses in Purok Madera Imelda, a big hatchery farm in Parañaque, bank investments, a plane, a helicopter and a fleet of expensive cars, among other things. After the Edsa Revolution, the Aquino administration quietly took over control of the TRCFI, replaced Mrs. Marcos and other trustees, and named her Executive Secretary Joker Arroyo as chairman; her relative Herminio S. Aquino as vice chairman; and Fulgencio Factoran, Jose M. Kalaw and Pablo de Borja as board members. Unlike other assets that the Marcos family had something to do with, the TRCFI was not sequestered. But, over the next few months, some of its multibillion-peso assets disappeared one after the other. And, on February 17, 1987, the name of the TRCFI was mysteriously changed to Philippine Development Alternatives Foundation (PDAF) and was registered with SEC under No. 72296. Then SEC Associate Commissioner Rosario N. Lopez approved the registration. The names of Arroyo and Factoran no longer appeared in the registration. Before Mrs. Aquino left the presidency, Executive Secretary Catalino Macaraeg quietly turned over PDAF to PCGG Chairman David Castro without a complete inventory of its assets. The PCGG filed antigraft charges before the Ombudsman against Mrs. Marcos and Benitez for diverting the P20 million coconut levy scholarship funds to the TRCFI. Strangely, the PCGG did not implead the people who took over the TRCFI, who dissipated its assets, and who changed its name to PDAF. Retrospectively, there’s a need for the Duterte administration to have a second look at some of these PCGG cases for economic and social restitution and punish those who violated the law once and for all. To reach the writer, e-mail cecilio.arillo@ gmail.com.

A stranger with faith Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

A

fter the little faith His followers demonstrated out in a stormy sea, Jesus was amazed to encounter a stranger, a gentile woman, with an irresistible faith in Him (Matthew 13:21-28).

A gentile woman While in the region of Tyre and Sidon, a Canaanite woman from a neighboring pagan territory approached Jesus and asked him to help her daughter tormented by a demon. In the context of the de facto caste system in Jewish society, this woman alone and as a gentile was not qualified to be part of any social interaction. She was a seriously marginalized person and, as unclean, to be avoided at all costs, as the initial silence of the entire group of Jesus indicates. The disciples saw her, as she kept pestering them, a nuisance to be rid of. Following the silent treatment, the privilege of God’s chosen people was voiced to put her in her proper place. Jesus said,

“I was sent only to the lost sheep of the house of Israel.” This priority is graphically driven home by the addition that “It is not right to take the food of the children and throw it to the dogs.” The evangelist actually is here lining up the usual reasons why some early Christians found it difficult to have anything to do with pagans. It was not scorn for the Canaanite woman that was here intended, but the responsibility of Jesus to His mission to take care first of the children of Israel. The woman would bypass this argument with something even more fundamental. She responded aptly that even “the dogs eat the scraps that fall from the table of their masters”. In comparison with the

Thursday, August 17, 2017 A11

children of Israel, pagans may be like dogs, but they usurp nothing from the Jews. In the context of God’s universal love and magnanimity, Jews or Christians do not exhaust divine goodness and mercy, for they are not loved by God to the exclusion of all others.

Oh, great is your faith!

Jesus acknowledged the great faith of the Canaanite woman. She came to Jesus crossing the boundary of pagan territory. She did Him homage, called Jesus not only “Son of David” but “Lord”, and she asked Him, “Have pity on me” and “Lord, save me.” In Matthew’s gospel, that is exactly the way the disciples of Jesus approach and address Him. For instance, Peter on the stormy sea in last Sunday’s story. The woman could not be discouraged or put off. She boldly asserted her faith that Jesus could help her and heal her daughter; she humbly persisted and persevered in her faith in Jesus. Jesus understood His mission to be to Jews. But, after the resurrection, the mission shifted to the gentiles as well, as He sent His followers to “make disciples of all nations” (Matthew 28:19). In the community of Matthew, those who might question the mission to the

Doing business through the Internet Atty. Ronald S. Cuberto

Tax Law for Business

T

he characterization of the term “doing business” in the Philippines has evolved from a judicial pronouncement to its present-day definition as now provided in our statutes. Nonetheless, its concept remains the same as that explained by the Court in a 1941 decision in the Mentholatum Co. (GR L-47701) case. That archaic case remains relevant up to these days, especially in so far as it explained the twin-characterization test in determining whether a foreign corporation is considered doing business in the Philippines. Essentially, the hallmark of what constitutes doing business in the Philippines would pertain to the concept of “continuity”. It is not really the number of the transactions, but, more important, the intention of a foreign entity to continue the body or substance of its business in the country, which may determine whether it is engaged in business in the Philippines. The application of the rule, however, has become a challenge these days with more businesses consummated with the aid of e-commerce, online platforms or through the Internet. As network boundaries overlap and go beyond national borders, questions arise as to where an entity is considered doing business. Questions include issues related to servers being located somewhere else, absence of employees or agents in a certain jurisdiction and no physical presence, among others. This struggle has raised an array of different approaches and analyses that vary widely from jurisdiction to jurisdiction.

Villanueva. . . continued from A10

Her instruction to the Metropolitan Manila Development Authority is: “Uber is online again. Let us apprehend them.” It is no secret that lawyer and former Quezon City councilor Bong Suntay, president of the Philippine National Taxi Operators Association and owner of the Basic Taxi Fleet, has mounted a strong lobby against Uber and Grab. He is perceived by some quarters to have a foot inside the inner circles of the LTFRB. What I cannot comprehend is how the LTFRB can turn a blind eye to various infractions almost committed daily by colorum buses and taxis; and how the operators of these public vehicles have been

Overall, the SEC’s analysis demonstrates the extent to which the Philippines will go in asserting our jurisdiction. While one can embrace the wonders of the Internet’s global electronic reach, one must also embrace the burden and responsibility of a global presence.

Recently, the Securities and Exchange Commission (SEC) still applied the Mentholatum doctrine in concluding that a foreign entity is considered doing business in the Philippines. Said foreign entity is operating online platforms outside the Philippines but offers various content and services, such as online community and an online gaming system, which are accessible to Philippine clients. Interestingly, however, the SEC expounded its opinion and adapted a new test that is tailored to Internet activities. The test is known as the “sliding-scale test”. Historically, the first case to establish an independent test/sliding-scale test for how the Internet affects personal jurisdiction was the Zippo Manufacturing (Zippo) case from the United States District Court for the Western District of Pennsylvania. Zippo was one of the first cases to examine the new reality of e-commerce, in which companies can do more than just advertise; buying and selling products

and services online from and to customers around the world. Many of the cases after Zippo have adopted this sliding-scale approach. (Prewitt and Callahan. “Jurisdiction on the Information Age.” 2017) According to the SEC, the sliding-scale test determines the level or types of activities that will constitute “minimum contacts” for jurisdictional purposes. This is based on the premise that the likelihood that “personal jurisdiction” can be constitutionally exercised is directly proportionate to the nature and quantity of commercial activity that an entity conducts over the Internet. At one end of the sliding scale are “active web sites”, or situations where one clearly does business over the Internet, which establish personal jurisdiction. At the opposite end of the spectrum are “passive web sites”, where one simply posts information on a web site and which alone generally does not generate sufficient contacts with a foreign state to establish personal jurisdiction. In the middle of the spectrum are “interactive web sites” and the exercise of jurisdiction is determined by examining the level of interactivity on a caseby-case basis. In applying the sliding-sale test,

negligent in upgrading their services to benefit the riding public. Most of their fleets have become decrepit and unroadworthy, with many of these vehicles manned by uncouth drivers. One of my readers commented that the chances of being killed by gangrene inside taxis are greater than being hit by a speeding cab. He said most of the side doors in most taxis are chipped by rust that a mere lesion when grazed by this could be a cause for great concern. I believe that laws are made not to oppress but to benefit the citizenry. The reasons are obvious why commuters are gravitated toward these TNCs despite the relatively higher fare they have to shell out. They have grown tired of having to haggle with disrespectful taxi drivers operating a Jurassic vehicle. If

the LTFRB doesn’t get this, then it is not up to the task. The LTFRB reasons that Uber’s actions were “not about pushing innovation in the context of fair regulation but it is about unduly challenging the limit of fair regulation to continue to engage in business in this country, thereby compromising sound business practices”. What? How does operating dilapidated vehicles driven by doubtful characters, as in the case of most taxis, equate to sound business practices? Sen. Grace Poe, a prominent advocate for improving the Philippines’s notoriously shoddy transport services, said the regulator’s order was “cruel and absurd”. She laments that the imposition of a “blanket suspension” against Uber would affect close to 200,000

gentiles have this gospel narration to illustrate to them Jesus’ own recognition of the faith gentiles are capable of. No one is excluded from salvation; all are invited to the faith in Jesus that saves. Jesus Himself welcomed gentiles and brought them salvation, and His disciples are summoned to be open to others as the spread of the faith demands. Alálaong bagá, in obedience to God’s plan that all peoples be included in His one family, we have to cross borders and tear down walls. We cannot build fences between us and those strangers who are different from us. The fences that are there must come down, and our prejudices must be overcome. The faith of the Canaanite woman shows that the time must come when everyone can eat of “the bread of the children” and not only “crumbs falling from the table”. Sitting at the table of the children of God, as at the Eucharist, is an undeserved privilege, an inestimable grace but never a right we could claim for ourselves at the exclusion of others. Join me in meditating on the Word of God every Sunday, from 5 to 6 a.m. on dwIZ 882, or by audio streaming on www.dwiz882.com.

the SEC concluded that the foreign company was clearly doing business over the Internet end of the scale or active web site, as there exists in this case sufficient “minimum contacts” with Philippine-based clients. For instance, the SEC noted that it generates sufficient contacts and business over the Internet, as it offers for sale and is engaged in the selling of content and services to account holders in the Philippines. Although the SEC adapted a new test in an effort to articulate the proper legal standard in articulating what constitutes “doing business” in the Philippines in so far as doing business through the Internet is concerned, it repeatedly emphasized that, in determining whether a foreign corporation is considered doing business in the Philippines, the facts are to be considered on a case to case basis. Further, even with this new concept, it appears that 1941 twincharacterization test espoused in the Mentholatum case remains relevant. Overall, the SEC’s analysis demonstrates the extent to which the Philippines will go in asserting our jurisdiction. While one can embrace the wonders of the Internet’s global electronic reach, one must also embrace the burden and responsibility of a global presence. The author is a senior associate of Du-Baladad and Associates Law Offices (BDB Law), a memberfirm of WTS Global. The article is for general information only and is not intended, nor should be construed, as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported therefore by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at ronald.cubero@ bdblaw.com.ph or call 403-2001 local 350.

riders a day. “Our people deserve to have options when it comes to choosing convenient, safe and reliable transportation services to brave the daily punishing traffic jam,” she said, adding that the suspension order, was in “defiance of the LTFRB officials’ commitment to provide a solution to the issues surrounding TNVS [transport network vehicle service] operations that would benefit the riding public…. I was wrong to think that the LTFRB was on the same page with the committee on how to come up with remedial rules pending the crafting of pertinent legislation”. Maybe Poe suffers from severe cold for her not to smell the stink wafting from the LTFRB’s offices. For comments and suggestions, e-mail me at mvala.v@gmail.com.

2nd Front Page BusinessMirror

A12 Thursday, August 17, 2017

www.businessmirror.com.ph

Sunvar Realty opts to vacate ‘Mile Long’ after successive losses in different courts

S

By Joel R. San Juan

@jrsanjuan1573

UNVAR Realty Development Corp. on Wednesday said it would abide by the ruling of the Regional Trial Court (RTC) in Makati City to vacate the 2.9-hectare “Mile Long” properties in Makati City that is owned by the national government but has been in the company’s possession for 35 years already.

In a statement issued through its lawyer Alma Mallonga, Sunvar said it was served with a “notice to vacate” within three days on Tuesday by the RTC of Makati City Branch 141, pursuant to a resolution promulgated by the Court of Appeals (CA) on August 14 direct-

ing, among others, the trial court to enforce the 2015 decision of the Metropolitan Trial Court (MeTC) of Makati Branch 61 ordering Sunvar to vacate Mile Long and pay back rentals amounting P1.6 billion, exclusive of its legal interest. The CA Former Fifth Division

chaired by Associate Justice Jose Reyes, in its August 14 resolution, granted the plea of the Office of the Solicitor General for the immediate execution, eviction and takeover of the government of the assailed Mile Long Property that was leased to the PrietoRufino family. The CA resolution directed the sheriff of Makati RTC Branch 141 under Judge Mary Ann Manalac to cause the implementation of the eviction order. Earlier, Solicitor General Jose C. Calida filed an urgent motion for execution before the CA after Sunvar failed to get a temporary restraining order from the Supreme Court. “While Sunvar has appealed the MeTC decision, it is committed to abiding by the legal process. In accordance with that commitment, Sunvar will comply and vacate Mile Long,” the statement read. Sunvar recounted that some 35 years ago, it leased the said undeveloped land of the government

upon the understanding that the lease period would expire in 2027. It noted that it paid P16.8 million as advance rentals and expended millions more to build roads, buildings and infrastructure to develop the property, which is why it is so valuable now. “Relying on the same contract and understanding, small business owners and taxpayers purchased condominium units in Mile Long that are now the source of their livelihood,” Sunvar explained. “It has pursued legal remedies to resist ejectment, firmly believing there is a binding contractual commitment on the part of the government to honor a lease that is

set to expire only in 2027. Sunvar understands that the government has taken an opposite view. Sunvar continues to have faith in the law and legal process.” Last month the CA affirmed its ruling issued in January, which gave the government an upper hand in its bid to regain possession of the over 2.9-hectare property. In a six-page decision, the CA’s Former Fifth Division denied the motion for partial reconsideration filed by Sunvar seeking the reversal of its January 26 ruling, which dismissed its petition for injunction filed before the Makati City RTC Branch 59 for lack of jurisdiction.

While Sunvar has appealed the MeTC decision, it is committed to abiding by the legal process. In accordance with that commitment, Sunvar will comply and vacate Mile Long.”—Sunvar

DOMESTIC MANUFACTURERS ASK GOVT TO ALLOW USE OF PALM OIL IN BIOFUELS MIX

T

he Federation of Philippine Industries (FPI) is calling on the government to amend the Biofuels Act to allow the use of palm oil as an additive and not just coconut oil as currently mandated by the law. T his, accord ing to FPI Chairman Jesus L. Arranza, will reduce the cost of biofuels in the country. The association of domestic manufacturers is taking the Department of Energy (DOE) to task over the implementation of the said act, as a technical committee has allegedly put in place some prohibitive rules on the additives to be used in liquid fuels. “The specifications in implementing it [Biofuels

Act]—particularly the formulation for the fuel mix—were made so that only coconut can qualify. We’re suggesting that the details be changed so palm oil, a cheaper additive, can be used,” Arranza told reporters on Wednesday. The Biofuels Act, passed in 2006, mandates mixing a particular percentage of biofuels in the making of local gasoline and petroleum diesel—to decrease dependence on fuel imports, as well as pursue environmental goals. In the law, both bioethanol and biodiesel—the biofuels added to gas and diesel respectively—are governed by the Philippine National Standards. The mandated biofuel See “Manufacturers,” A2

PAYMENT TRENDS Stuart Tomlinson, Visa country manager of the Philippines and Guam, briefs members of the media on consumer payment trends during a news briefing held at the Shangri-La, Bonifacio Global City, Taguig. NONOY LACZA

Decent work deficits in the Philippines

and CSOs combine shut down the Ministerial Conference of the World Trade Organization (WTO) in Seattle. Subsequent WTO Ministerials (such as Cancun 2003 and Hong Kong 2005) also saw pitched battles between the WTO free-trade advocates and global protesters shouting “our world is not for sale”. Up to now, the WTO is unable to craft a new (meaning higher) global trade-liberalization agenda, which is the reason some countries have opted to negotiate for regional and bilateral freetrade agreements, such as what is happening in the Asean and East Asia today. In the ILO, there were endless debates among the tripartite social partners on how unregulated globalization was riding roughshod on the rights of workers, women and minorities. Accordingly, a “race to the bottom” among footloose global investors had weakened trade unionism and labor rights in both the global North, as well as the global South. One major effort to tame this race to the bottom was an American-European resolution in the ILO reaffirming the core labor

rights of workers everywhere as reflected in the UN Declaration on Human Rights and the different ILO Conventions. In 1998 the International Labor Conference adopted the “Declaration on the Principles and Rights at Work”, which restates the duty of ILO member-states to respect the rights of workers to freedom of association, collective bargaining and nondiscrimination at work, as well as their duty not to use forced labor (for example, prison labor) and eliminate extreme forms of child labor. Now, the question arose: How to enforce the declaration? One solution developed by the group of Juan Somavia, the former ILO director general, was the promotion of a “Decent Work Program” in the different ILO member-states. Hence, the ILO has come up with “decent work diagnostics”, monitoring reports on state compliance with core labor conventions and so on. The Philippines, through the Department of Labor and Employment (DOLE), has embraced the ILO’s decent work advocacy. Thus, under the Benigno S.

Aquino III administration, the DOLE translated the Philippine Development Plan 2011-2016 into the Philippine Labor and Employment Plan 2011-2016, with the accompanying subtitle “Inclusive Growth Through Decent Work and Productive Work”. The Labor and Employment Plan (LEP) had four major decent work goals, namely: increases in employment levels; improvements in the quality of employment (by enhancing workers’ rights and their observance); greater social protection for the vulnerables; and marginalized and social dialogue among the tripartite social partners and other stakeholders. LEP was forthright in identifying and listing “decent work deficits” in the country, the most significant of which are the following: ■ Economic growth in the 20 0 0s wa s not accompa n ied by equivalent improvement in employment levels; ■ Labor productivity has been low because of lack of investments, low technology and lack of skills and training, confounded by calamities; ■ The enjoyment of the funda-

mental labor rights, primarily freedom of association and collective bargaining, was limited to a few since the informal sector, public sector and the “flexible” short-term hires were excluded; ■ The Labor Code is not fully aligned with the Philippine Constitution, especially with the latter’s provisions mandating the State to fully empower the workers as society’s “primary economic force”; ■ The country’s social-security schemes covered a mere 31 percent of the total employed, while minimum wage as a social protection measure has limited coverage; ■ There are growing concerns on industry-specific health and safety conditions, especially given the increasing informality of the labor market; ■ Child workers continue to work and engage in hazardous occupations and industries, such as mining and fishing; ■ Trade-union membership and collective bargaining coverage have been on the downward trend; ■ Multiple layers and delays in labor adjudication impede dispute settlement and social dialogue; and ■ There is marked absence of

Continued from a1

avenue for social dialogue involving the majority of workers, meaning those in the informal sector and those working in the micro and small enterprises. What has Diagnostics 2017 found? More facts and figures supporting the foregoing observations. In particular, the new report restates the continuing “disconnect between GDP and employment growth”, which is the Philippine economic story in the last four to five decades. A disturbing finding of the Diagnostics is the big number of the “NEET” sector. This is the youth group “who are neither in employment, education nor training”. Is the NEET in Mindanao not a rich recruitment ground for the Maute Group and other rebels? For those who seek an updated situation on the availability or nonavailability of quality jobs in the Philippines, Diagnostics 2017 is a must read. However, this writer has some reservations on two items: ■ First, the study claims that the informal sector constitutes 38 percent of the total employed (page 6). The truth is that the sector, as estimated by the Em-

PSA raises estimated GNI growth in Q1 to 6.2% By Cai U. Ordinario @cuo_bm

T

he Philippine Statistics Authority (PSA) revised upward its Gross National Income (GNI) estimates in the first quarter, but retained the GDP growth print for the period at 6.4 percent. In a statement on Wednesday, a day before the PSA officially releases the second-quarter growth data, the agency said GNI growth in the January-to-March period grew higher at 6.2 percent, from the initial 5.9 percent. “The PSA revises the GDP estimates based on an approved revision policy, which is consistent with international standard practices on national accounts revisions,” the agency stated. The higher GNI could be due to the upward revision in the estimate of the Net Primary Income (NPI) from the rest of the world to 5.4 percent, from 3.9 percent. The PSA explained that the GNI is computed with the GDP and the NPI. This means GNI stands for the sum of all goods and services produced in and outside the country in a given period of time. The GNI is important, particularly in terms of the goal of the Duterte administration to make the Philippines an upper middle-income country. The government aims to increase the country’s per-capita income to around $5,000 a year, from $3,580 annually, as of 2016. This target, according to Socioeconomic Planning Secre tary Ernesto M. Pernia, could be reached by the end of 2018, four years ahead of the original target date, which is 2022. Pernia said that assuming the country could grow its GNI at 5 percent per annum, per-capita income could just be short of a dollar or two by the end of 2018. Increasing per-capita income nationwide will require the Philippine economy to grow by 50 percent under the plan period. Under the original target in the PDP, poverty incidence could decline to 14 percent in 2022, from 21.6 percent in 2015.

ployers Confederation of the Philippines and the proponents in Congress of the Magna Carta for Workers in the Informal Economy, covers roughly twothirds of the employed. A study by the Philippine Institute for Development Studies even gave a higher estimate, more than 80 percent. The problem is that the research team failed to understand that many in the wage sector, especially those in the micro, small and medium enterprises, have no formal employment contracts. There is also widespread “ f lexibilization” in the hiring system, even among formal enterprises. The study equates informality to a simple summation of the self-employed and the unpaid family workers; and ■ Second, the study has not gone deep enough in analyzing gaps in economic and employment policies and decent work outcomes. The previous LEP 2011-2016 claimed that PDP 2011-2016 was the pathway to decent work fulfillment. Diagnostics 2017 showed it was not. What then is the assurance that PDP 2017-2022 and Ambisyon 2040 will deliver more jobs for everyone?