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Monday, August 21, 2017 Vol. 12 No. 312

PHL poultry products banned in 3 countries By Jasper Emmanuel Y. Arcalas

@jearcalas

apan, South Korea and Singapore have imposed a temporary ban on poultry products and pet birds from the Philippines after Manila confirmed the outbreak of bird flu in Pampanga. Documents obtained by the BusinessMirror showed that the three Asian countries notified Manila about the import ban after the Department of Agriculture (DA)

Tuna catchers nix draft vessel-monitoring rules By Jonathan L. Mayuga

@jonlmayuga

wners and operators of commercial fishing vessels in General Santos City opposed the draft rules and regulations for the implementation of vessel-monitoring measures (VMMs), as mandated by Republic Act (RA) 10654, or the amended Fisheries Code. Speaking during the public consultation organized by the Bureau of Fisheries and Aquatic Resources (BFAR) in General Santos City last Friday, they sa id t he proposed r u les and regulation, which will form part of a Fisheries Administrative Order, is f lawed and would adversely affect the tuna industry in genera l. W hile they recognized the w i sdom of put t i ng i n pl ace VMMs to check the movement and exact location of commercial fishing vessels, they raised questions pertaining to the cost of the vessel-monitoring device and monthly subscription to be

Instead of choking us to death, we expect government support. This new policy is anti-poor. Only largescale commercial fishing companies can possibly comply with these rules and regulation.” —Gonzales charged by a BFAR-accredited service provider. “Some of us were consulted on the general provisions of RA 10654. But we were never consulted in the drafting of this proposed rules and regulations,” said Raul Gonzales, president of the Alliance of Tuna Handliners, which has over 1,000 members based in General Santos City and Saranggani province. The BFAR, he said, drafted the proposed rules without consulting the industry’s small players, referring to operators engage in small-scale fishing. See “Tuna catchers,” A16

PESO exchange rates n US 51.3010

announced on August 11 that bird flu struck thousands of fowls in San Luis, Pampanga. In an official communication dated August 14, South Korea’s

HPAI H5 The virus that killed thousands of fowls in Pampanga, according to the DA

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Dissecting PPP contracts #5: Grant of rights PPP Lead Alberto C. Agra

Ministry of Agriculture, Food and Rural Affairs (Mafra) informed the Philippine Agriculture Office (PAO) in Seoul that it has “prohibited the importation of Philippine fresh, chilled, frozen chicken meat and pet birds” effective August 12.

y what authority can a private-sector proponent (PSP) in a public-private partnership (PPP) arrangement operate a project that is traditionally government’s? By what right can that PSP charge and collect fees from the consumers or public? What does government get in return under the scheme? In a PPP, let us say, for water supply, power transmission, public market, toll road or bridge, airport, reclamation or telecommunications, how can the PSP undertake these? In order for the PSP to do these, there must be a “grant of rights”.

See “Poultry products,” A2

Continued on A15

BMReports

Can 13-year-old manual save PHL from bird flu? By Jasper Emmanuel Y. Arcalas @jearcalas

Part One

T was a day Joy Lagayan dreaded as she rummaged through shelves looking for something “valuable”. It was something that Lagayan, a veterinarian working for the government, never thought she would pull out from rows and rows of books. She dreaded that day a glossy-white covered book would be put to use after more than a decade. Because Lagayan knew, as she took a deep sigh, the book spelled death. “It’s our bible,” Lagayan said, while taking by the head the Avian Influenza Protection Program (AIPP) Manual of Procedures.

Dreaded

LAGAYAN, a staff of the Bureau of Animal Industry’s Animal Health and Welfare Division for five years, explained taking out the AIPP manual is bringing her stress. Continued on A2

Chickens crowd a cage in Jaen, Nueva Ecija, northern Philippines, on August 18. As the Department of Agriculture said a strain of avian influenza has spread to this province, government experts, like veterinarian Joy Lagayan, bank on a 13-year-old manual to address bird flu. NONIE REYES

n japan 0.4682 n UK 66.0449 n HK 6.5576 n CHINA 7.6872 n singapore 37.5474 n australia 40.4457 n EU 60.1504 n SAUDI arabia 13.6799

Source: BSP (18 August 2017 )

A2 Monday, August 21, 2017

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Can 13-year-old manual save PHL from bird flu? Continued from A1

“It’s stressful; very, very stressful,” Lagayan told the BusinessMirror, when she learned that the Avian Influenza (AI) virus has landed in the Philippines. “It’s good we have this. It made things a little bit easier for us,” said Lagayan, a doctor of veterinary medicine for 13 years now, tapping the cover page of the AIPP. The government, led by thenPresident Gloria-Macapagal Arroyo, started crafting the AIPP in 2004, when the feared AI, commonly known as “bird flu”, resurfaced in Asia. The goal was to protect the country’s borders from the virus that killed millions of birds in Southeast Asia back then.

Border protection

BY virtue of Executive Order (EO) 280, Series of 2004, Arroyo outlined the powers, functions and responsibilities of government agencies in preventing and addressing the bird-flu virus. “Due to an outbreak of the

Visas. . .

Continued from A16

arrived in the country amounting to some 2.98 million. “In the face of challenges, the country continued to receive a growing influx of tourists from across the globe, desiring to see our world-class

bird- flu virus, which has affected many countries in Asia, including the deaths of at least twelve people in Vietnam and Thailand, bold, preemptive, active and immediate measures must be taken by the Philippines in order to avert or minimize its grave effects,” Arroyo said in EO 280, signed on February 5, 2004. “In the event the epidemic can no longer be prevented and, in order to confine, minimize, restrict or regulate the further spread of the contagion, such measures and actions relative to fowl, poultry, other birds or animals and people, infected or suspected to be infected with the virus, need to be implemented,” Arroyo added. Through EO 280, the secretaries of Health and Agriculture were designated as crisis manager and comanager, respectively, should the bird-flu virus reach the Philippines. Both Health and Agriculture secretaries were given full power and authority necessary to restrict the entry of bird-flu virus

destinations and experience the renowned Filipino hospitality,” Teo said. Following President Duterte’s state visit to China in October 2016 and the lifting of Beijing’s travel restrictions to the Philippines, Chinese visitor arrivals surged by some 38 percent to 675,663 by year-end. “Accommodating our visiting Chinese friends with a visa grant

in the country. The Department of Health (DOH) is particularly tasked to control any possible transmission and cases of bird flu in humans. The Department of Agriculture (DA) was tasked to protect the monitor and protect the Philippine poultry industry from the virus. The crisis managers are also given the power to “call” upon all government agencies for assistance and support in carrying their respective duties. These government agencies include the departments of Interior and Local Government, Foreign Affairs, Transportation and Communication, Education, Labor and Employment and National Defense. The Office of the Press Secretary was also called to support the crisis managers.

Secure regions

BY 2005 the government intensified its efforts to keep the country’s borders free from AI. The government, through the DOH, released the “Preparedness and Response Plan for Avian and upon arrival will only help keep the speedy momentum going for Chinese arrivals into the country,” Teo added. “In welcoming our Chinese visitors with open arms, we also share the enthusiasm of the DOJ, through the Bureau of Immigration, to further improve bilateral relations with Beijing,” she said.

Pandemic Influenza”, (PRPAPI) paving the way for the codification and institutionalization of measures the state shall undertake in preventing, controlling and addressing the dreaded virus. In gist, the document outlines four possible stages the Philippines could encounter with bird flu: 1) an AI-free nation; 2) AI outbreak in poultry; 3) AI transmission from poultry to huimans; and 4) AI transmission among humans. “The pandemic clock is ticking. It cannot be predicted when the pandemic will occur, but it is always best to be prepared all the time,” then-Health Secretary Francisco T. Duque III said in the preface of the document. “After all, it wasn’t raining when Noah built the ark.” In the same year the DA and DOH issued Joint Administrative Order 01, which authorized the adoption of the AIPP and the establishment of the National Avian Influenza Task Force. The order emphasized that the AIPP manual is the official AI prevention and preparedness

plan of the country.

Shake the disease

TO date, the AIPP only outlines procedures to undertake for Stage 1 and Stage 2 of a bird-flu scenario as outlined by PRPAPI. There are generally three types of avian influenza: A, B and C, according to the Food and Agriculture Organization of the UN (FAO). Avian-influenza viruses are divided into: highly pathogenic and low pathogenic (LPAI) strains based on its ability to cause disease in poultry. An LPAI “is a natural infection of waterfowl that may cause minimal to no signs of disease in domestic poultry and wild birds and is not a serious threat,” the FAO said. “Highly pathogenic avian influenza is rarely found in waterfowl, but causes severe disease in domestic poultry with a high death rate.” The AI viruses are further classified according to their strains, or subtypes based on two proteins: haemglutinin (H) and neuraminidase (N). There are currently 16

Poultry products. . .

“The Philippine government is requested to stop issuing Korean export quarantine certificate and export shipment of chicken meat and pet birds from August 12,” read the official communication, which was translated by the PAO office. “Please note that chicken meat and pet birds shipped from August 12 will be treated as import-prohibited items,” it added. However, the Mafra clarified that any poultry shipments from Manila that are scheduled to arrive before the effectivity of the temporary ban will be allowed to enter Seoul only if these pass the additional quarantine requirements. “Philippine pet birds, which are in the process of import quarantine or scheduled to arrive [except for the shipment from August 12] will undergo additional clinical examination and HPAI [highly pathogenic avian influenza] medical examination [antigen examination],” the Mafra said. “Philippine chicken meat, which is in the process of import quarantine or scheduled to arrive [except for the shipment from August 1], will undergo strengthened examination,” the Mafra added. Tokyo also informed Manila of its decision to prohibit the entry of Philippine poultry products in Japan via an official communication dated August 14. Japan’s Chief Veterinary Officer Norio Kumagai addressed his letter to Agriculture Assistant Secretary for Livestock Enrico P. Garzon Jr. “This is to inform you that we have suspended the import of poultry

Tuna catchers. . .

for fisheries-management measures, aid in the seafood-traceability and catch-documentary requirements of the government, ensure safety for fisheries through a tracking device that would monitor the vessels’ location during accidents and disasters and implement policies embodied in the amended Fisheries Code and its implementing rules. Gonzales said RA 10654, including the proposed Fisheries Administrative Order presented by BFAR’s technical working group, is anti-poor and would only kill the tuna

Continued from A1

products [other than feather and down] from the Philippines as of August 12, based on the information on the detection of HPAI [virus serotype H5] at a poultry farm in the Philippines, which was notified to OIE by your authority,” the letter read, a copy of which was obtained by the BusinessMirror. However, Kumagai said poultry products produced before July 2 will be allowed to enter Tokyo. “According to the information provided to the OIE, the date of start of the event is the July 24. Based on this date and the maximum incubation period of avian influenza [21 days], we have estimated the earliest date of exposure as the 3rd of July,” he added. “Poultry products attached with health certificates certifying that the products were produced in the Philippines on and before July 2 and were stored and handled in a way to prevent exposure of pathogens of any animal infectious diseases prior to shipment will be the exception from the suspension,” Kumagai said. Kumagai, who is also the Director of Animal Health Division of Japan’s Ministry of Agriculture, Forestry and Fisheries’s Food Safety and Consumers Affairs Bureau, said the import ban will be imposed “indefinitely”. “We would like you to provide us with detailed information of the outbreak, including date of stamping out and disinfection for affected premises when it becomes available to let us review this suspension appropriately,” he said. Also on August 14 Singapore’s Agri-Food

Continued from A16

handliner subsector. Handline tuna fishers dominate the industry. There are around 3,000 commercial fishing vessels, which are either based in or using the General Santos City Fish Port as tuna-landing site. It was learned that while a radio frequency-based or telecommunicationbased VMM would cost only as low as P800 a month, the installation of satellite-based vessel-monitoring device would cost nearly P100,000 plus a monthly subscription of at

recognized H types and nine N types, according to the FAO. The combination of these strains dictate the extent of effect of the virus: Is it dreadful to humans or just mere sickness among chickens? For the Philippines, the biggest concern now is whether the confirmed AI subtype, A H5 virus in two barangays in San Luis, Pampanga, could be transmitted to humans. Only H5N1 and H5N6 are known to date to be transmissible to humans. Recent government laboratory tests ruled out that the AI virus the Philippines has contains the strain of H5N. As for H5N6? The country is still awaiting further information from the Australian Animal Health Laboratory, where samples from the Philippines were brought to. “We always boast to the international community that we are AI free, for years, in the region,” Lagayan said. “And they always doubted us. They do not believe we were AI free. But now, it’s real. It’s here,” she added. To be continued

& Veterinary Authority (AVA) informed Garzon it will “immediately” ban the importation of ornamental birds from the Philippines. “[The] AVA will impose a temporary restriction on the import of ornamental birds from the Philippines with immediate effect,” said Charmain Chng, senior veterinarian at the AVA, in the letter, a copy of which was obtained by BusinessMirror. “We note that there are currently no establishments in the Philippines that are approved by the AVA for the export of poultry, poultry products and egg products to Singapore,” Chng added. The AVA said it would await updates from Manila, particularly the eradication and surveillance measures rolled out by the government. Under the Terrestrial Animal Health Code of the World Organisation for Animal Health, or OIE, a country will only be declared free from bird flu if it would not report any outbreak within 90 days after the final disinfection of the affected areas. Agriculture Secretary Emmanuel F. Piñol said the government is almost done culling 200,000 birds within the 1-kilometer contain area of ground zero farms in San Luis, Pampanga. After all fowls have been culled, the government will observe a 21-day rest period before deploying sentinel birds in the ground zero area. Should the sentinel birds show no signs of bird flu after 35 days, then the area will be declared free from the disease, according to Piñol. The DA chief last Friday announced that bird flu also struck two towns in Nueva Ecija. Piñol vowed to put in place measures to stop the spread of the virus in the province. least approximately P3,000 a month. According to Gonzales, even small-scale commercial fishing vessels need to go beyond Philippine waters to fish. Some risks to fish in high seas to be able to catch enough commercially viable tuna like yellow fin, big eye, blue marlin or black marlin, to cover the costs of the operation. He said many commercial fishing operators, particularly those that make use of handline fishing method, will not be able to comply, given the cost of installation and monthly subscription to be charged against them by BFAR-accredited private companies, particularly for commercial fishing. “We have been neglected and overregulated already. Now this?” Gonzales told the BusinessMirror in an interview. Gonzales lamented that the draft IRR lumps tuna handliners with commercial fishers that use active gear, which catches tuna on a massive scale. Handline fishing makes use of traditional hook, line and sinker in catching tuna and is considered the most environmentfriendly and sustainable tuna-fishing method. Sometimes, it takes handline fishing vessels a month to catch enough tuna before going home with enough tuna to cover cost. Compared to purse-seine methods used by medium-scale and large-scale commercial fishing vessels, it avoids accidental bycatch, like juvenile tuna or other fish species. Most medium-scale and large-scale fishing vessels also use fish-aggregating device that draws fish closer for easier catching.

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Editor: Vittorio V. Vitug • Monday, August 21, 2017 A3

Online passport appointment for OFWs waived

By Recto Mercene

@rectomercene

he recruitment agencies for migrant workers were able to get the commitment of Foreign Affairs Undersecretary Jose Luis Montales to waive the online appointment needed for new applicants wanting to secure a passport in lieu of a special lane for overseas Filipino workers (OFWs).

To qualify for exemption, however, OFWs must meet the following condition: A certification by the deploying agency that the OFW applicant has been hired by companies accredited by the Philippine Overseas Employment Agency (POEA). That the OFW has been endorsed by either the Federation of Manpower Exporters Inc. [Fedamex] and the Coalition of Licensed Agencies for Domestic and Service Workers (CLADS). That the passport applicant under the items above will be entertained in a special OFW Lane, which will be opened in all passport issuing

offices all over the country. The DFA has also committed to acquire additional machines and personnel, set up more regional offices and expanditsMobilePassportingServices. Federation President Alfredo Palmiery and CLADS President Lucy Sermonia were able to get the commitment during a meeting with Montales on July 25. During the meeting, both agencies pointed out that the two to three months delay in securing an appointment with the Consular Affairs Department of the Department of Foreign Affairs (DFA) has cut the chances of applicants to work abroad. The two pointed out that 60 to 90

days of delays have lessened the OFW chances to be hired since there are stiff competition from other countries with migrant workers. Asking OFWs to get an appointment online has restricted the efforts of the recruitment industry to provide hundreds of OFW jobs within a given frame of time, recruitment consultant Manny Geslani said. As per POEA figures, there are between 250,000 to 300,000 new applicants deployed by land-based agencies, plus another 100,000 from the sea-based sector that need new passports annually. The problem of providing easyto-get passport has persisted for the

past three years, when a new set of officials removed the no-appointment privileges enjoyed by the recruitment industry in 2014. Meanwhile, in Kabul, Afghanistan, one of the most dangerous places in the world, where daily occurrences of suicide bombings are considered normal, a DFA consular team flew into the city to renew or extend the passports of OFWs working in the Green Village in Kabul, Geslani said. About 200 Filipinos are working at the “Green Zone” in Kabul for international institutions, like the World Bank, IMF, Red Cross, US-AID, European Union, ADB and other international offices.

Tax-reform critics challenged to submit alternative proposals By Alladin S. Diega Correspondent

nstead of their continued criticisms over the government’s tax-reform program that seeks to fund health care and education, groups, like Bayan Muna and Freedom from Debt Coalition, should come up with proposals on how to finance the said programs, the Action for Economic Reforms (AER) said over the weekend.

“These critics oppose the proposed excise tax on fuel, tobacco and sugar, but they don’t propose concrete solutions. They demand efficiency in tax collection, yet, they resist the reforms that will improve collection, like the broadening of the valueadded tax [VAT] base and the adjustment of fuel taxes to inflation,” said AER, the group that first lobbied for the legislation of the “sin” tax that became law in 2012.

According to Jo-an Diosana, the critics are correct in calling for taxing the rich, but they are not aware that the revenue from taxing the rich, which the tax reform in fact includes, will still be insufficient to meet the revenue goal to fund AmBisyon 2040, adding, “all citizens have a responsibility to pay taxes, with those having the ability to pay having to pay more.” Diosana said the critics are

opposing the tax reform, but “they want money for free public education, universal health care and modernization of public mass transportation.” According to Diosana, funding health care, education and social protection is most urgent. At the same time, the reduction in personal income-ta x rates, which will provide relief to the middle class and working class and other income earners,

will cut revenues by P141.4 billion. “There is no escaping tax reform, to fund the development requirements, to recover revenue losses from the personal incometax relief and to correct the weaknesses of the tax structure,” she added. Diosana said her organization is, thus, calling on all civil-society organizations to change their old approach and take

the opportunity to secure tax reform that will fund government’s programs, especially on education, universal health care, social protection and pro-poor infrastructure. “Statements and actions critical of the tax reform bring publicity but on their own, without concrete, feasible proposals, they’re unlikely to bring about the progressive change in the tax system,” she said.

Economy

A4 Monday, August 21, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

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PHL to overtake Thailand in motorcycle sales this year

By Catherine N. Pillas

@c_pillas29

he Philippines could surpass Thailand’s motorcycle sales this year, despite the difficulties being encountered by the local motorcycle industry, according to the Motorcycle Development Program Participants Association (MDPPA).

MDPPA President Armando B. Reyes said his group has a more sanguine outlook for the motorcycle industry this year, after sales in the first semester grew 13 percent to 614,896 units. Reyes said total sales could hit 1.8 million units this year, 12 percent higher than the 1.6 million sold in 2016. “Among Asean countries, we were sixth in terms of sales last year. In fifth place is Thailand. We think we

can overtake Thailand,” the MDPPA chief told the BusinessMirror. Based on MDPPA data, Philippine motorcycle sales in the January-toMay period amounted to 504,931 units versus Thailand’s tally of 773,748 units. “[Sales] growth has been continuous. If the motorcycle boom really hits its peak, I don’t know how it will be handled,” Reyes said. MDPPA remain optimistic despite

the numerous problems besetting the local motorcycle industry, such as the policy of the Land Transportation Office (LTO) concerning the registration of motorcycles. Reyes said some 100,000 motorcycles have yet to be registered with the LTO. This figure could rise in the coming months due to the cumbersome registration process of the agency. “Buyers of motorcycles are individuals who commute and who want to use their units immediately. But the problem is the delay in the registration process,” he said. Reyes added the MDPPA is already in talks with the LTO to determine the best way to reduce, or eliminate altogether, the registration backlog. He said the delay could stunt the growth of the industry that has entered the so-called golden age because it has been experiencing rapid growth. The MDPPA noted that motorcycle demand has been picking up since 2008 and would continue to grow until 2025.

“Motorcycle sales could reach 2 million units by 2025,” Reyes said. The e-commerce boom in the Philippines in recent years can be partly credit for this surge in sales, according to the MDPPA. Microentrepreneurs selling products online usually purchase motorbikes to ensure same-day delivery of orders. Data from the MDPPA showed that automatic motorcycles accounted for the bulk of sales, or 40 percent, of sales in the first half of the year. This was followed by “business motorcyles”, which recorded an 18-percent share. Reyes added another factor driving motorcycle sales is the increase in the purchasing power of Filipino consumers. Just like car buyers, he said motorcycle enthusiasts now prefer pricier models. “Buyers are upgrading; A lot of riders are shifting to models with a higher cc and a lot are into big bikes too,” he said. In terms of production, MDPPA members appear to have a lot of room to grow as the production capacities of Honda, Yamaha, Suzuki and Kawasaki have facilities that are suited to a larger market. Honda Philippines Inc., where Reyes is vice-president, has an installed capacity of 1 million units but utilization has not even reached half. The key to attaining full-capacity utilization, he said, is the provision of fiscal incentives to manufacturers. “If we’re reaching 2 million units, of course we’ll be expanding the facilities. That’ll mean manufacturers will be investing and I don’t know if there will be incentives from the Board of Incentives [BOI] for that,” Reyes said. The Motorcycle Development Program of the BOI, under the broader Motor Vehicle Development Program (MVDP), already extends preferential treatment to completely knocked down parts and components that are either imported or produced for assembly. Each motorcycle participant in the MVDP is required to invest $2 million in the manufacture of motorvehicle parts in its first year.

Domestic trade reached ₧871.67B in 2016—PSA report By Cai U. Ordinario

@cuo_bm

WIKIMEDIA COMMONS PHOTO

he value of goods and commodities that were traded within the country’s borders increased 35.6 percent in 2016, according to data released by the Philippine Statistics Authority (PSA). The value of domestic trade reached P871.67 billion in 2016, higher than the P642.64 billion posted in 2015. The amount covered 24.35 million tons worth of goods. This volume was 25 percent higher than the 19.49 million tons posted in 2015. “The domestic trade data in this report pertains to goods that passed through airports and seaports in the country, whether for the government or private use, or for commercial purposes,” the PSA said. In terms of value, PSA data showed machinery and transport equipment posted the highest value of P281.71 billion of the total, followed by food and live animals with P216.23 billion, or 24.8-percent share of the total value in 2016. The commodity with the lowest value of P2.95 billion was animal and vegetable oils, fats and waxes. In terms of volume, food and live animals commodities had the highest quantity with 6.61 million tons, while animal and vegetable oils, fats and waxes had the least with less than 0.10 million tons. PSA data also showed that the National Capital Region (NCR) posted the highest outflow value amounting

to P275.64 billion, or 31.6 percent from the total outflow in the country. It was followed by Central Visayas and Western Visayas, with P141.65 billion and P116.316 billion, respectively. Ilocos region had the least outflow value of P1.52 million only in 2016. In terms of inflow value, Central Visayas recorded the biggest inflow value amounting to P173.96 billion in 2016. This translates to 19.9-percent share to total of all traded com-

modities. Cordillera Administrative Region had the smallest inflow value of P10,000 in 2016. PSA data showed that, out of the 17 regions, 10 regions had unfavorable trade balance, while seven regions yielded positive trade balance. The regions with the highest trade balance were Metro Manila with P164.31billion; Central Luzon, P49.84 billion; and Eastern Visayas, P30.99 billion. The regions with the largest trade

deficits were Caraga, with a deficit of P78.81 billion, followed by Zamboanga Peninsula, with P38.71 billion; and Davao region, P34.16 billion. “Outflow refers to the total quantity and value of commodities, which goes out of the specified region or province, while inflow refers to the total quantity and value of commodities, coming in the specified region,” the PSA said. “Trade balance is the difference between the outflow and inflow.”

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House to OK supplemental budget for free tuition in SUCs By Jovee Marie N. dela Cruz @joveemarie

he chairman of the House Committee on Appropriations last Sunday said the lower chamber will pass a supplemental budget to finance Republic Act (RA) 10931, or Universal Access to Quality Tertiary Education Act. Rep. Karlo Alexei B. Nograles of Davao City, the panel chairman, said several government agencies have unused funds under 2015, 2016 and 2017 appropriations laws. The appropriations committee has identified the Department of Information and Communications Technology (DICT), the Department of Agrarian Reform (DAR) and the Department of Transportation (DOTr) as among those agencies that have low absorptive capacity. Nograles said he is doubtful if these agencies will be able to utilize those funds that will expire on December 31. “I am looking at these funds as savings, and I will write a supplemental budget. Instead of reverting [the funds] to the national treasury, we can declare them as savings to use as fund for the free higher education law,” the lawmaker said in a radio interview. Nograles, citing the Department of Budget and Management’s National Budget Circular 567, said government agencies has to ensure obligation of projects and programs funded under 2017 General Appropriations Acts (GAA) not later than December 31. He said that, while allocations under 2015 and 2016 GAA cannot be tapped for the 2018 national expenditure program, it can still be programmed for spending under a supplemental budget by the lower chamber. During the budget deliberations of the Commission on Higher Education (CHED), the agency estimated that P34.1 billion is needed to fund

I am looking at these funds as savings, and I will write a supplemental budget. Instead of reverting [the funds] to the national treasury, we can declare them as savings to use as fund for the free higher education law.” —Nograles

the free tertiary education. RA 10931 will benefit students in 114 state universities and colleges (SUCs), 16 local universities and colleges accredited by the CHED and 122 technical-vocational institutions under Technical Education and Skills Development Authority. Earlier, Nograles said the DICT, the DAR and the DOTr can contribute at least P37.5 billion to fund the free college education law. Nograles added the DICT has P2.7 billion of unused appropriations in 2016 and P2.695 billion in unused appropriations in 2017. Also, Nograles said that an additional P5 billion can be sourced from the DAR and P30 billion from the DOTr. Nograles also said the DOTr has failed to utilize P33 billion in 2015, and in 2016 “they have so far failed to obligate P30 billion of their budget allocation.”

Pinoy MSMEs need ‘scale and scope’ to join Asean production networks, economist says

N untapped major economic advantage presented to the Philippines by Asean integration is that it can serve as leverage for Filipino micro, small and medium enterprises (MSMEs) to join regional production and distribution networks, according to economists. Dr. Josef Yap, professorial lecturer at the UP School of Economics and former president of the Philippine Institute for Development Studies (PIDS), pointed out that “the heart of economic integration in Southeast Asia is regional production and distribution networks”. As such, he said, the Philippines can benefit more from being part of the Asean Economic Community (AEC) by working toward greater participation in the supply chain. But he said that at present, “the Philippines lacks scale and scope to participate in these regional production networks”. Yap, speaking at a forum on Asean integration in University of the Philippines Diliman on August 17, said this deficiency is evidenced by the destinations of foreign direct investments (FDI) flowing through the region, with the Philippines trailing Vietnam and other neighbors in FDI share. “We have fallen behind not only in FDI but also in exports,” he said, pointing to published statistics. “The AEC can help us and in

order for it to be more inclusive, we have to encourage small and medium enterprises to participate in these regional production networks,” he said. The launching of the muchawaited National Single Window in the Philippines can be a way forward for these enterprises. Unfortunately, Yap said, the project remains stalled. Government support for MSMEs can also be realized providing them technology and financing, and pursuing physical connectivity and bringing down borders by fasttracking the building of more roads, bridges and ports, he added. Dr. Erlinda Medalla, a senior research fellow at PIDS and project director at the Philippine Apec Center Network, agreed. In her speech, she underscored the need to involve MSMEs in regional production, calling for a Philippine game plan “ in the form of a comprehensive road map for industry and manufacturing” to achieve this goal. She continued that a conducive business environment is essential to making the Philippines a more competitive player in the AEC, and this can be accomplished by making improvements in “three critical areas”—logistics, infrastructure and connectivity, “not just across borders but within the nation’s borders”. Philexport News & Features

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Editor: Jennifer A. Ng • Monday, August 21, 2017

Banana growers see lower export receipts this year

By Jasper Emmanuel Y. Arcalas

@jearcalas

he Pilipino Banana Growers and Exporters Association (PBGEA) said revenues from banana exports could go down this year, as other foreign producers have increased their shipments to the Philippines’s traditional markets for bananas. PBGEA Executive Director Stephen Antig told the BusinessMirror that the volume of bananas shipped from January to May this year reached 634,191 metric tons (MT), 8 percent higher than the 588,085 MT recorded a year ago. Despite the increase in terms of volume, data from the Philippine Statistics Authority (PSA) showed that export receipts from bananas during the five-month period declined slightly to $236.122 million, from $237.3 million last year. “We hope that volume will normalize this year and will be bigger than last year. [The possible increase] is due to better weather conditions,” Antig said. “We are not certain, though, if total revenues this year will be higher than that of 2016, because other countries flooded some of our [traditional] markets with bananas, which will bring down prices,” he added. PBGEA said, however, it is still finding it hard to fulfill the additional demand

of other countries for Philippine bananas because local growers could not expand their plantations. “The pronouncement of other countries, such as South Korea, to buy more bananas from us is definitely a big boost to the industry,” he said. “But to meet the demand, there is a need to expand the production areas. However, this is a problem because of the seemingly conflicting policies of different government agencies,” Antig added. He noted the contrasting views of the Department of Agriculture (DA) and Department of Agrarian Reform (DAR) with regard to the use and expansion of Philippine agricultural lands. “While the DA is encouraging the expansion of [banana] plantations to meet the demand from importing countries, the DAR has other ideas,” Antig said. “Several bills have been proposed that intend to control the lease arrangement between investors and landowners.

This will definitely dampen investors’ interest.” Antig said the productivity of the banana sector is also being stunted by “perennial problems”, such as attacks staged by the New People’s Army. “The problems confronting the industry production are still the same. These are peace and order, pests and diseases, and climate change,” he said. Antig added that the industry has yet to fully recover from Panama disease, which struck major banana plantations in Mindanao two years ago. “However, we have been able to contain the spread of the disease by instituting control measures and testing other varieties that are resistant to Panama,” he said. In March Agriculture Secretary Emmanuel F. Piñol said South Korea will import more Cavendish bananas from the Philippines this year to satisfy the increasing demand of Korean consumers for it. Piñol said South Korea needs about 35 million boxes more of Cavendish bananas valued at $280 million (P14 billion). The 35 million boxes of bananas—with an average weight of 13 kilograms—would be equivalent to 455,000 metric tons (MT). He said the DA will open banana plantations in former conflict-torn areas in Mindanao to increase production. The Philippines accounts for more than 90 percent of bananas being imported by South Korea annually. Exporters shipped a total of 238,496 MT of bananas to South Korea, valued at $114.54 million in 2016, according to data from the PSA.

Cooperatives–the key to success in agriculture

tives but only a few cooperatives ver 160 years ago, two are successful. What are the reamen in Germany desons early cooperatives failed? veloped a social form of business: the cooperative. It n Incompetent managerelies on a sense of community. ment; Over 20 million people in n Lack of proper underHenry J. Schumacher standing of the principles, Germany are members of cooperatives, organizations that work practices and true aims and according to the motto: “What purposes of cooperatives; one person cannot accomplish n Improper use of credits by alone can be accomplished by many.” This enables the borrowers, who, instead of using the money them to establish enterprises they would not be for production, spent it on nonessentials; able to finance alone or, for example, to actively n Defective securities; contribute to the energy transition through n Inadequate character and moral responsione of 900 energy cooperatives. bility in handling the other fellows’ money; and Cooperative associations play a perfectly n Lack of adequate safeguards against unnormal and influential part in everyday life. scrupulous officers who took advantage of their If you were to use all the cooperative services position to benefit themselves. available, a day in Germany could look like this: As I said in my previous column: “Heavy Herr Müller (the equivalent of Juan de la Cruz public and private investments into agriculture in the Philippines) gets up at 7 a.m. The milk will allow the consolidation of farmland; farm for his coffee comes from one of the 250 coopconsolidation is of great importance. The best erative dairies in Germany and the bread rolls models of Philippine cooperatives should be copies from one of the 17,000 bakers who are members and cascaded. The adoption of advanced farming of the Cooperative for Bakers and Confectioners. technologies can only be achieved by management The butter and jam were bought in a cooperative systems that can focus on competitive land sizes, supermarket, like Rewe or Edeka. Herr Müller good research and development in coordination leaves his apartment, which he rents from one with existing research institutes in the country, of the 2,000 German housing cooperatives. On supported by increased extension service to be his way to work in the taxi that belongs to a taxi provided by government.” cooperative, he reads the daily newspaper taz, If cooperatives are the key for the future of which is produced by a publishing cooperative. agriculture and having examples of very sucAfter work, Herr Müller withdraws money from cessful cooperatives, isn’t it high time that the his cooperatively managed Volksbank or Raifgovernment and the private sector got together feisenbank. These banks do not primarily aim to to jointly find solutions to cascade the successful maximize profit; each member receives a share cooperatives throughout the country? As menof the profits as a dividend. tioned in the German situation above, there are Why am I informing you about the German many options for cooperatives, from farming to success in the cooperative movement? Because food production, from finance to marketing and I firmly believe that cooperatives are the key to sales. Cooperatives can be main players in creating success in agriculture in the Philippines. The and driving agri-food supply and value chains. Philippines has a long history in creating cooperaThe time to move is Now.

europe Beat

Banking&Finance BusinessMirror

Monday, August 21, 2017 • Editor: Jun B. Vallecera

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Duterte administration can tap $25.6 billion from ADB for social services, infra projects

By Rea Cu

@ReaCuBM

he Department of Finance (DOF) said the government can tap $25.6 billion from the Asian Development Bank (ADB) to help finance the Duterte administration’s social services programs and infrastructure projects. According to the DOF’s International Finance Group (IFG), the Philippines can tap around $3.8 billion in loans and $21.8 billion in the form of nonlending programs from the ADB to fund the Duterte administration’s socioeconomic programs. The lending pipeline under the ADB’s Country Operations Business Plan (COBP) for the Philippines will focus on three priority areas, including $1.8 billion, or 47.4 percent of the proposed funds for infrastructure development; $1.5 billion, or 39.5 percent of the fund for education and skills development, access to finance, expanded

social protection and employment opportunities for the youth; and $500 million, or 13.1 percent for programs on good governance and finance. ADB’s COBP for the Philippines will cover the period 2018 to 2020. “Program loans under the proposed lending pipeline make up 39 percent of the COBP while project loans account for 61 percent,” the IFG said in its report to Finance Secretary Carlos G. Dominguez III at a recent DOF Executive Committee meeting. The IFG added that the ADB has agreed to explore cofinancing arrangements with

The ADB lending pipeline will help finance railway projects. FILE PHOTO

the Japan International Cooperation Agency (Jica) for the Philippines’s major infrastructure projects, such as the proposed Philippine National Railways’s MalolosClark Railway project and the PNR Com-

BSP reports $678-M BOP deficit in July By Bianca Cuaresma

@BcuaresmaBM

he Philippines reported is largest balance of payments (BOP) deficit for the year in July on the back of the national government’s maturing foreign-exchange obligations, according to the Bangko Sentral ng Pilipinas (BSP). Data from the Central Bank showed the country’s $678-million BOP deficit in July is the largest deficit recorded since November last year when it hit $1.67 billion. The shortfall in July is also $109 million larger than the previous month’s deficit, a reversal of the $215-million surplus in the same month last year and is the third consecutive month that the country has incurred a deficit in its BOP. The BSP attributed the higher deficit to foreign-exchange operations of the BSP and to payments made by the national government for its maturing foreign-exchange obligations during the review month. The Central Bank said outflows during the month could have been larger, if not partially tempered by net foreign-currency deposits of the national government and BSP’s income from investments abroad. “BSP’s foreign-exchange operations remained driven by increasing market demand for foreign exchange, largely to finance capi-

tal goods imports,” the Central Bank said. The July deficit brought the total BOP deficit in the first seven months to $1.38 billion, significantly higher compared to the end-2016 deficit of $420 million, and a reversal of the $848-million surplus in the same seven-month period in 2016. The BSP pegged its BOP projection for 2017 at $500-million deficit. Thus, the BSP expects that the recovery in merchandise exports and higherthan-expected overseas remittances and

business-process outsourcing (BPO) revenues would mitigate the current account and the overall balance of payments for the whole of 2017. Earlier, the BSP said it expects a stronger external payments position in the second half of the year on account of remittances, tourist receipts and BPO revenues. The Central Bank also said the projected $500-million deficit for 2017 is still “doable”, citing expected influx of foreign direct investments in the second half of the year.

Case clippings

By Justice S J Ranada Jr. NOTARY PUBLIC–affidavit of perjured witness Where a lawyer-notary public prepares and notarizes an affidavit for a witness, despite his belief that the latter is a perjured witness, his notarial commission should be revoked, and he should be disqualified from being a notary for two years. Notarization is not a meaningless routinary act, and is invested with substantive public interest, as it converts a private document into a public document, making that document admissible in evidence without further proof of authenticity. Samonte v. Atty Jumamil 17 Jul 2017

AC 11668 Perlas-Bernabe, J

muter South Line project. On this aspect, the ADB agreed to help the Philippines beef up its capacity in handling and financing infrastructure projects, particularly on the construction of

IC issues reporting guidelines for preneed firms

he Insurance Commission (IC) has signed the guidelines for the submission of quarterly, as well as annual, reports for the life, nonlife and preneed insurance sectors in line with its compliance with the compilation of Other Financial Corporation Survey (OFCS) required by the International Monetary Fund (IMF). Insurance Commissioner Dennis B. Funa recently signed the guidelines in line with the establishment of the Special Data Dissemination Standard (SDDS) Plus by the IMF. “The compilation of OFCS begins with the construction of the balance sheet for the OFCs subsector,” Funa said. The financial database, or the SDDS, was expanded to include the reporting of OFCS. The IC pointed out that the preparation for the generation of the insurance data series for the consolidation and pilot compilation of OFCs is targeted in December 2017. The OFCS is an analytical survey that, when consolidated with the present Depository Corporation Survey, will complete the monetary statistics framework, which will provide a comprehensive measure of the claimed and liabilities of the entire financial sector. The OFCS covers the accounts of all resident OFCs subsector, including the life-insurance sector, nonlife and the preneed-insurance industry.

Perspectives Insurers are on the road to strategy-aligned deal-making

he insurance industry is rapidly evolving. Disruption is ever ywhere. The pressure to transform is immense. Not surprisingly, deal activity in the sector is expected to rise. In fact, in a recent survey of decision-makers at more than 200 insurance organizations around the world, we found that 84 percent of firms think they will undertake one to three acquisitions over the coming year, while 94 percent plan at least one divestiture. But, at the same time, industry players are also becoming more strategic about inorganic growth initiatives; everyone recognizes that the traditional reactive approaches to mergers and acquisitions (M&A) opportunities are no longer sufficient in today’s environment.

A strategy-aligned approach is emerging

By taking a strategy-aligned M&A approach, insurers are hoping to enhance strategic clarity about which markets, geographies, products and channels they should “play in” going forward. And that helps them decide which processes, technology infrastructure, talent and culture will best support

transformation of the operating model for future growth. However, nontraditional approaches require nontraditional capabilities. And that means that insurers will need to improve their holistic data and analytics enabled deal-evaluation capabilities, particularly regarding due diligence, integration and separation activities, in order to extract maximum value from their proposed acquisitions. Insurance decision-makers certainly understand that strategy-aligned M&A will require a different mind-set and a renewed focus on execution: 39 percent of firms said aligning their deal evaluation process to corporate strategy objectives is the key factor for M&A success. But it is also clear that there is more work to be done. Many organizations surveyed admitted that their corporate development and M&A teams’ objectives were not fully aligned to their overall corporate strategy. Many respondents also admitted that their M&A priorities continue to be “reactive” to market opportunities, as opposed to targeting deals strategically aligned to

overall corporate strategy.

No better time for an M&A ‘playbook’

What can insurance leaders do to improve the transformative value they receive from their M&A deals? One of the first steps insurers may want to consider is the development of an enterprisewide M&A “playbook” to enhance and deepen their evaluation of the strategic fit a potential acquisition target offers. To improve deal outcomes over the long term, the playbook would need to cover all aspects of M&A activity, including due diligence, deal evaluation and postdeal integration/separation processes. Others are taking a more strategic approach by focusing their efforts on partnerships and alliances. In fact, respondents in our survey told us that partnerships are the clear choice for transforming the business model: 87 percent of organizations expect to partner for gaining access to new operating capabilities, and 76 percent are looking to partnerships to help improve access to new technology infrastructure. Asia Pacific is expected to see the most partnerships and alliances forged, with China and India ranking as the top

the country’s railways. The ADB also agreed to the country’s request to hold quarterly meetings, which will ensure that the partnership strategy is aligned with the government’s priorities under the Duterte administration. “The bank has also responded positively to our request to increase the Philippines’s lending envelope and provide more grants and technical assistance,” the IFG said. According to the IFG, the projects covered by the COBP for 2018 to 2020 include the Central Spine Roll-On/Roll-Off Project and the Mindanao River Basin Flood Control Project. The DOF added that the ADB has committed to design a $300-million package of critical transportation infrastructure initiatives to ease Metro Manila traffic, and is now exploring the possibility of co-financing this initiative with other multilateral institutions, such as the Asian Infrastructure Investment Bank and the Agence Française de Développement. For the nonlending component of the COBP, the programs include support for project preparations and capacity-building of various government agencies, the IFG added.

2 destinations in the region. The majority of the respondents also said they intend to forge strategic partnerships and alliances with larger firms—those with values ranging from $250 million to $1 billion. To stay abreast of emerging trends in technological innovation, several insurance companies have already established (or are considering establishing) in-house corporate venture capital (CVC) investment capabilities, largely as a way to invest in innovative technology capabilities. Among firms with established CVC models, the majority stated that their investment activities are focused on non-insurance technologies. While more than a quarter of insurers with CVC models boast more than $1 billion in allocations, 90 percent say the median value of their CVC investments ranged between $10 million and $50 million.

Seven steps to a strategy-aligned deal environment

1. Identify and prioritize the primary synergies of a deal, including the unique synergies that only your company can create. 2. Identify targets with unique strategic fit and value creation potential.

In February 2016 the IC entered into a Memorandum of Agreement with the Bangko Sentral ng Pilipinas (BSP), the Securities and Exchange Commission and the Governance Commission for Governmentowned and -controlled corporations (GCG), wherein all parties agreed to collect data from the OFCs subsector under each parties’ respective supervisory and regulatory jurisdictions and to conduct data gap analyses. “As part of this statistical undertaking, the IC, in coordination with the BSP, developed three sets of reporting templates for life nonlife and preneed insurance companies that will facilitate the consolidation and analysis of the OFCS,” Funa said. The reports to be submitted to the IC must be made using the reporting templates and accompanied by a Statement of Changes in Equity, and a certification by an officer of the company with the rank of at least vice president. “In order to meet the additional reporting requirement of the IMF, the IC imposed the specific deadlines set forth under the Circular Letter addressed to all life, nonlife and preneed insurance companies,” he said. The SDDS Plus completes the three tiers of the IMF’s data standards initiative, with the first tier being the SDDS and the General Data Dissemination Standard as its second tier. Rea Cu

3. Conduct due diligence that is focused on the strategically relevant parts of the business. 4. Value targets based on how they fit uniquely with your business (rather than just rely on average “multiples”). 5. Select an appropriate deal type and structure to realize your competitive strategy. 6. Plan for an integration approach that will foster the unique synergies that you will create and achieve maximal value capture. 7. Set in place post-transaction performance assessments that track value creation on an ongoing basis. The article “Insurers are on the road to strategy-aligned deal-making” by Ram Menon, KPMG in the US, was taken from KPMG’s publication entitled The Frontiers in Finance. 2017 R.G. Manabat & Co., a Philippine partnership and a member firm of the KPMG network of independent member-firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. For more information on KPMG in the Philippines, you may visit www.kpmg.com.ph.

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The World BusinessMirror

Editor: Lyn Resurreccion • Monday, August 21, 2017 A7

GOP doubts about Trump burst into the open

ASHINGTON—President Donald J. Trump’s racially fraught comments about a deadly neo-Nazi rally have thrust into the open some Republicans’ deeply held doubts about his competency and temperament, in an extraordinary public airing of worries and grievances about a sitting president by his own party.

Behind the high-profile denunciations voiced last week by GOP senators once considered Trump allies, scores of other, influential Republicans began to express grave concerns about the state of the Trump presidency. In interviews with Associated Press reporters across nine states, 25 Republican politicians, party officials, advisers and donors expressed worries about whether Trump has the self-discipline and capability to govern successfully. Eric Cantor, the former House majority leader from Virginia, said Republicans signaled this week that Trump’s handling of the Charlottesville protests was “beyond just a distraction.”

“It was a turning point in terms of Republicans being able to say, we’re not even going to get close to that,” Cantor said. Chip Lake, a Georgia-based GOP operative who did not vote for Trump in the general election, raised the prospect of the president leaving office before his term is up. “It’s impossible to see a scenario under which this is sustainable under a four-year period,” Lake said. Trump’s handling of the protests in Charlottesville, Virginia, has shaken his presidency unlike any of the other self-created crises that have rattled the White House during his seven months in office. Business leaders have bolted from White House councils, wary of being

The number of Republican politicians, party officials, advisers and donors who have expressed worries about whether Trump has the selfdiscipline and capability to govern successfully

associated with the president. Military leaders distanced themselves from Trump’s assertion that “both sides”—the white supremacists and the counterprotesters— were to blame for the violence that left one protester dead. And some members of Trump’s own staff were outraged by his combative assertion that there were “very fine people” among those marching with the white supremacists, neo-Nazis and Ku Klux Klan (KKK) members. Importantly, the Republicans interviewed did not line up behind some course of action or an organized break with the president. Some expressed hope the recent shakeup of White House advisers might help Trump get back in control of his message and the GOP agenda. Still, the blistering and blunt statements from some Republicans

have marked a new phase. Until now, the party has largely kept its most troubling doubts about Trump to whispered, private conversations, fearful of alienating the president’s loyal supporters and upending longsought GOP policy goals. Tennessee Sen. Bob Corker, the chairman of the Foreign Relations Committee and a foreign policy ally of the Trump White House, delivered the sharpest criticism of Trump, declaring that the president “has not yet been able to demonstrate the stability nor some of the competence that he needs to” in dealing with crises. Corker’s comments were echoed in the interviews with two dozen Republican officials after Trump expressed his views in Tuesday’s news conference. More than half spoke on the record, while the others insisted on anonymity in order to speak candidly about the man who leads their party and remains popular with the majority of GOP voters. A handful defended Trump without reservation. South Carolina Gov. Henry McMaster, an early supporter of the president, said he “proudly” stands with Trump and said he was succeeding despite a “constant barrage of negative attacks from the left.” But others said recent events had shifted the dynamic between the president and his party. “I was never one that was convinced that the president had the character to lead this nation, but I

was certainly willing to stand by the president on critical issues once he was elected,” said Clarence Mingo, a Republican state treasurer candidate in Ohio. “Now, even where good conservative policies are concerned, that progress is all negated because of his inability to say and do the right things on fundamental issues.” In Kentucky Republican state Sen. Whitney Westerfield called Trump’s comments after the Charlottesville protests “more than a gaffe.” “I’m concerned he seems to firmly believe in what he’s saying about it,” Westerfield said. Trump has survived criticism from establishment Republicans before, most notably when GOP lawmakers across the country distanced themselves from him in the final weeks of the campaign following the release of a video in which the former reality television star is heard making predatory sexual comments about women. Many of those same lawmakers ultimately voted for Trump and rallied around his presidency after his stunning victory. GOP efforts to align with Trump have largely been driven by political realities. The president still commands loyalty among his core supporters, though some recent polls have suggested a slight weakening there. And while his style is often controversial, many of his statements are often in line with those voters’

beliefs, including his support after Charlottesville for protecting Confederate monuments. Brian Westrate, a small business owner in western Wisconsin who is also chairman of the 3rd Congressional District Republican Party, said Trump supporters long ago decided to embrace the unconventional nature of his presidency. “I don’t think that anything has fundamentally changed between now and when the election was,” he said. “The president remains an illartful, ill-timed speaker who uses Twitter too often. That’s not new.... The president is still the same guy and the left is still the same left.” Some White House officials do privately worry about slippage in Trump’s support from congressional Republicans, particularly in the Senate. GOP senators couldn’t cobble together the 50 votes needed to pass a health-care overhaul and that same math could continue to be a problem in the fall, as Republicans work on reforming the tax code, which is realistically the party’s last opportunity to pass major legislation in 2017. Tom Davis, a Republican state senator representing a coastal South Carolina district, said that when Trump can move beyond the crisis of the moment, he articulates policies that could help the country’s economic situation. But Davis said Trump is also part of the reason not much progress has been made. AP

The World BusinessMirror

Monday, August 21, 2017

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Bannon’s out, but agenda may not be

ASHINGTON—In his West Wing office, Stephen Bannon kept a chart listing trade actions—on China, steel and autos—that the Trump White House planned to roll out, week by week, through the fall. Now that Bannon, the president’s chief strategist, has been pushed out, the question is whether his agenda will be erased along with him. It is not just trade: Bannon has had a strong voice on issues, from climate change and China to immigration and the war in Afghanistan. He has been an unyielding advocate for a visceral brand of nationalism, and, though he lost as often as he won in policy debates, his departure could tip the balance on some fiercely contested issues toward a more mainstream approach, even if the core tenets of his philosophy survive. Bannon’s dormlike office functioned as a sort of command center for the administration’s nationalist wing. He met there with a coterie of mostly young, like-minded colleagues, planning strategy and plotting against foes, from Lt. Gen. H.R. McMaster, the national security adviser, to Gary D. Cohn, the director of the National Economic Council. Some of Bannon’s protégés have already been sidelined while others may depart soon, people in the White House said. He will no longer have access to briefing papers or sit in meetings, like a regular Tuesday morning session in the Roosevelt Room where he sparred with Cohn and other officials over the timing of trade moves against China. Still, there are reasons to believe Bannon’s core worldview will outlast him. Last Friday the US announced it would open an investigation into China’s alleged theft of technology from US companies. The decision, only days after Donald J. Trump formally asked his trade representative to look into the issue, suggested the US would continue to pursue a hard economic line against China, even without Bannon. On immigration, Trump listens to another adviser, Stephen Miller,

He will temporarily be more dangerous on the outside, but he still won’t be able to get anything done on the inside, and that’s the problem.” —Stone who pushed the administration’s travel ban on Muslims. Miller has strengthened his position in the West Wing, in part by building a rapport over 18 months with Trump’s son-in-law, Jared Kushner. Miller, who has been seen by some as a member of the Bannon camp, chafes at suggestions that he is a creation of Bannon. “Trump and Bannon share similar views on these issues,” said Chris Ruddy, a longtime friend of Trump, who said he advised both the president and Bannon to part ways. “The big difference is that Donald Trump is much more practical and pragmatic than Steve.” Even if Bannon had hung on to his job, it is clear his bomb-throwing style was not going to work well in a West Wing under the control of Trump’s new chief of staff, John Kelly. Kelly, a retired Marine Corps general, has moved to tighten discipline and access to the president, cracking down on a culture where aides often loitered around the Oval Office without appointments, interrupting scheduled meetings to bend Trump’s ear on their pet issues.

Steve Bannon, President Donald J. Trump’s chief strategist, at the White House in Washington on June 1. Now that Bannon has been pushed out of the West Wing, the question is whether his agenda on trade, climate, China and Afghanistan will be erased along with him. Al Drago/The New York Times

Kelly, officials said, has particular disdain for people sounding off on sensitive national-security issues without background or expertise, as Bannon did when he told a liberal publication, The American Prospect, that the US had no military option against North Korea. Although he was saying what virtually every military commander believes—that a military attack on the North would prompt a catastrophic reprisal on the South—his comments contradicted Trump’s bellicose warning to the North Korean leader, Kim Jong Un, that he would rain “fire and fury” down on him. Bannon, a former Navy officer who spent most of his career in banking and media, also immersed himself in how the US should wage the military campaign in Afghanistan. He pushed unorthodox proposals, like substituting mercenaries for US soldiers, which were greeted with disdain by military commanders but appealed to the president. His departure helps those in the administration who favor a more interventionist military approach, whether on Syria, where Bannon opposed Trump’s missile strike on

President Bashar al-Assad, or on Afghanistan. Last Friday, Trump met with his national security team at Camp David, and has all but decided on a more conventional plan that would keep nearly 4,000 US troops in the country. But, prompted in part by Bannon’s persistent questioning, the US will place more demands on the Afghan government, according to officials. Bannon’s departure was a victory for Cohn and Treasury Secretary Steven Mnuchin, who tangled with him on trade, as well as whether the US should withdraw from the Paris climate accord. Cohn argued against the withdrawal—as did the president’s daughter Ivanka—but Bannon prevailed by appealing to Trump’s nationalist instincts. Still, Cohn’s future is also in question. Officials said he is lobbying for Trump to appoint him chairman of the Federal Reserve to replace Janet L. Yellen. An erroneous report that Cohn was leaving the White House in the wake of Trump’s statements on the deadly clashes in Charlottesville was enough to roil stock markets last Thursday.

Similarly, Bannon’s exit has uncertain implications for McMaster. The two men clashed bitterly over Afghanistan, and some officials suspected Bannon was behind a campaign in right-wing media to discredit McMaster by saying he was anti-Israel. With Bannon out of the picture, McMaster will have less internal resistance to his proposals for Afghanistan. But Trump himself has expressed deep skepticism about an open-ended US military commitment in that country. And Bannon is likely to turn up the pressure on McMaster from his perch at his old employer, Breitbart News, where he is again the executive chairman. Bannon predicted he would be far more effective outside the White House. He plans to use Breitbart to champion all the themes he pushed while in government. He also anticipates he will continue talking to Trump, whom friends say often prizes advice he gets from outsiders or on cable-news shows more than the guidance he gets from his staff. Bannon and Trump had an easy chemistry, a crucial factor for the president with his aides, until the

Nafta’s end wouldn’t be end of world for Mexico–biz envoy

s negotiators entered their third day of talks to update the North American Free Trade Agreement (Nafta), the top representative for Mexico’s private sector said the nation needs to be prepared for all scenarios, including the possible end to the deal. Most Mexican products exported to the US would face a low average tariff of 2.5 percent and 5 percent if the Nafta were to disappear, said Moises Kalach, the trade head for the national business chamber known by its Spanish abbreviation, CCE. That would leave Mexico no worse off than Europe, China and Japan, who trade more than $1 trillion in total with the US each year despite lacking a free-trade agreement, he added. Mexico sees a clear opportunity for a Nafta update that also benefits the US and Canada, and the chances of reaching a deal have been improving over time, but the possibility of its end can’t be ruled out, Kalach said in an interview last Friday in Washington. Mexico should make changes in its own domestic law to provide foreign companies with legal certainty and protection of their investments in Mexico similar to those that they have under Nafta, he added. The end of the Nafta “would be the loss of a very valuable instrument, a hard hit for Mexico, an unwanted hit, but we would have to move forward,” he said. “We’re a country, we’re not going to disappear. If our situation changes, we need to take steps, regroup and have a clear vision” for going forward. President Donald J. Trump isn’t looking for a “mere tweaking” of the Nafta and

will be seeking a major overhaul to a deal he believes has failed Americans, his top trade official said last Wednesday. While the US is focused on protecting American workers and improving its trade balance, Mexico and Canada have emphasized the need to preserve the broad gains of

trade to all three nations. This week’s talks are set to wrap up on Sunday, with the next round set for Mexico in September. While US Trade Representative Robert Lighthizer last Wednesday signaled that a Nafta update could require the use of “substantial US content” for products made in

the region, Mexican Economy Minister Ildefonso Guajardo said such a requirement on a national rather than regional basis could be “highly complicated.” Guajardo added he expects dialogue over time to help close the differences between the US and Mexico in the talks. Bloomberg News

New York Times News Service

Trump’s worth to Twitter: $2B

Container vans in Mexico’s port

relationship frayed. In his eight months in government, Bannon said, he got a crash course in how the bureaucracy functions, which he will use to advance his positions on trade, taxes and China. Critics of Bannon said his influence on Trump’s positions had been overstated: The president’s views on trade and military intervention date to the 1980s. Other officials said Bannon’s policy portfolio was never as broad as his Wizard-of-Oz profile suggested, while some faulted him for not bringing in the allies he needed to get more done. “He will temporarily be more dangerous on the outside, but he still won’t be able to get anything done on the inside, and that’s the problem,” said Roger Stone, an informal adviser to the president for decades, who has recently become deeply critical of Bannon. Some White House veterans said Bannon should not underestimate the value of geographic proximity. “I don’t think Bannon can have more influence on policy from the outside, whatever he does, simply because he won’t be at the table to make the case when decisions are made,” said David Axelrod, who served as former President Barack Obama’s chief strategist and has written about his frustration over his diminished access to Obama after he left the White House in 2011. “A lot depends on Trump,” Axelrod continued. “If Bannon and Breitbart are spinning him up, Trump may dial him up on a regular basis. That may give him leverage.” As always, the wild card in assessing this White House is the president himself. On many issues, he and Bannon are philosophical soul mates. But their relationship curdled over Trump’s resentment that his staff member was taking credit for his election victory. Trump reached out to Bannon last Friday after the split was made public, but the two did not speak, according to White House officials. Last Saturday the complexities of Trump’s relationship with Bannon were on vivid display. “I want to thank Steve Bannon for his service,” the president tweeted. “He came to the campaign during my run against Crooked Hillary Clinton—it was great! Thanks S.”

ithout Donald J. Trump, Twitter Inc. could lose almost a fifth of its value. That’s the conclusion of Monness Crespi Hardt and Co. analyst James Cakmak, who said that the social-media company would see as much as $2 billion in market value wiped out if @realDonaldTrump quit tweeting. It’s not that the president’s defection would touch off a mass exodus, lowering the number of “monetizable” daily active users, Cakmak said in an interview. Instead, losing its most prominent user would hit Twitter’s intangible value and lead to what’s known as multiple compression. “There is no better free advertising in the world than the president of the United States,” said Cakmak, who has a neutral rating on Twitter shares. While Twitter doesn’t disclose the total number, Cakmak estimates daily users are around 125 million, about 30 percent fewer than Snap Inc. Twitter said in July that daily active users rose 12 percent in the second quarter, compared with the same period in 2016. Trump has 36 million followers and has tweeted more than 35,000 times since joining the socialmedia service in 2009. Twitter’s business doesn’t face much risk from “potential diminishing political relevancy,” Cakmak said in a note published last Thursday. “What’s most important is the execution of the right strategy, since, at the present state, we find Twitter not capitalizing on the opportunity that’s in front of them.” Twitter shares have fallen 14 percent since Trump won the presidency in the November 8 election. The company’s market cap is about $11.7 billion, according to data compiled by Bloomberg. Bloomberg News

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Most pressing challenges facing Europe

S summer draws to a close, the European Union (EU) will seek to tick off a number of boxes from the top of its to-do list, leveraging its new-found political capital following the ascent of pro-EU leaders on the continent.

Brussels will have its hands full as negotiations ramp up with the UK on its impending exit from the 28-nation bloc, with some eastern European countries testing the boundaries of antidemocratic initiatives and the euro area still working on reforms to protect its economic well-being. Here are the main topics to look out for in the coming months:

Brexit talks

The UK and EU have three more rounds of negotiations on Britain’s departure from the bloc before a summit in October. It’s at that gathering in Brussels that leaders are supposed to give approval for the start of phase two of the talks—dealing with how the relationship between the two sides will look once the UK has left in March 2019. But there’s already doubt about whether there will be sufficient progress by then on phase one—how the UK will protect rights of EU citi-

28 The number of membernations of the European Union

zens and Britain’s financial obligations to the EU—to allow that to happen as scheduled. And if timing is delayed, it raises the prospects of the UK slipping out of the EU without a deal, which would mean no foundation for a future trade agreement and no transitional period to soften the blow, something that neither side wants. That makes the next few weeks

crucial. The British government will publish documents setting out its positions on various issues as negotiators on both sides try to agree on complicated topics, such as the border between Northern Ireland and the Republic of Ireland and the role of the European Court of Justice in post-Brexit Britain. If Prime Minister Theresa May, under pressure at home and due to face members of her Conservative Party at its annual conference in the first four days of October, can leave the EU summit on October 19 and 20 having won approval for the start of trade discussions, it will be a sign that Brexit negotiations are on course. But it’s a very big if.

Rule of law

IN the coming months, Poland is facing the threat of unprecedented EU penalties from the first-ever probe of a member’s respect for the rule of law. The European Commission said last month there was excessive political influence over the legal system in Poland and launched action against the country for violating EU law in a process that could see the EU suspending its voting rights. The European Commission sent Warsaw a “letter of formal notice” in July, giving the government one month to reply. The next step in the infringement process would involve a final warning by the commission to the Polish government in the form of a “reasoned opinion”, after which a lawsuit could be filed.

The battle between EU regulators and the Polish government over its plans to weaken the judiciary’s independence underscores the emergence of a new fault line between eastern and western Europe and comes as scrutiny of democratic standards within the EU has moved up the bloc’s agenda. The government in Warsaw is at the sharp end of a campaign to rein in errant states, as populist leaders in Poland and Hungary have been emboldened by Donald J. Trump’s US presidency and Britain’s decision to quit the EU. The spat is unlikely to be resolved soon, and could become a key issue between the EU and some of its members in coming months as the bloc tries to balance sensitive Brexit negotiations.

Reform of the euro area

Discussions over how to reboot the euro have already started taking place in recent months, having been given fresh impetus by the election of Emmanuel Macron in France, a staunch advocate of further integration. While there is no consensus yet among the currency bloc’s 19 members on if and how the euro area should get its own finance minister, budget or a regional Monetary Fund, talks are expected to pick up steam after the German election in September. The EU’s biggest economy has so far resisted calls for further fiscal integration, but Chancellor Angela Merkel has signaled her willingness to discuss

some of these issues in the future. Euro-area leaders and finance ministers have repeatedly said the currency union needs to adjust to be able to withstand future financial shocks. Whether this will come in the form of new responsibilities for the bloc’s bailout fund or greater integration in the areas of banking union and financial regulation will depend on the political constraints of member-states and on their priorities. But the matter of further integration will likely feature prominently in finance ministers’ discussions over the coming months, while some decisions could be taken as soon as the end of this year.

Investment screening

The European Commission could make proposals as early as September on possible ways to better scrutinize investments from third countries into the EU, following pressure from leaders, including Macron, to move to protect the bloc’s industries from foreign takeovers in strategic sectors. The proposed measures will come after the commission published a reflection paper on “harnessing globalization” in May and after EU leaders—who met in June—asked the commission to “analyze investments from third countries in strategic sectors while fully respecting memberstates’ competencies”. But divisions on whether the bloc should take a more protectionist approach persist among its members,

even as they combat a rise of populism backed by voters who feel left behind by globalization. While some governments want to bolster the EU’s defenses to protect industries from foreign takeovers, others are concerned that would be a step back from openmarket commitments, especially at a time when the Europe wants to lead globally on free trade.

Greek review

Negotiations on the third review of Greece’s bailout are set to kick-start later this year, with the hope of concluding the talks and disbursing fresh loans by January. While the economic overhauls involved are not as contentious as in previous reviews, the negotiations will likely drag on, especially on issues such as the reform of the energy sector and government spending on social benefits. Following the German election in September, questions will likely arise again over the International Monetary Fund’s (IMF) participation in the Greek bailout. While the fund has agreed in principle to extend more loans to Athens, it has said it won’t do so until the country gets more debt relief from its euro-area creditors—a step Germany has so far resisted. Meanwhile, another issue to look out for is whether Greek banks are asked to undertake another asset quality review and stress test to ensure they are adequately capitalized before the end of the program—a step requested by the IMF. Bloomberg News

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Spain, a leader in foiling attacks, falls victim to one

or more than a decade, Spain seemed immune to the steady eruptions of violence by Islamic militants that rocked other European countries where radicalized young men, often from poor immigrant backgrounds, carried out devastating bomb, gun or vehicular attacks.

Spain’s security forces carved out a reputation as some of Europe’s most dogged counterterrorism operators, fighting an intense battle beneath a deceptively placid surface in a country whose long Mediterranean coastline, just across from Morocco, makes it an inviting entry point into Europe for jihadis. But the illusion of a Spanish haven was shattered last Thursday when a van swerved down Las Ramblas, Barcelona’s famous pedestrian boulevard, leaving behind a trail of bodies, including 13 dead and about 100 injured. Another person was killed in a second attack at a nearby seaside resort that ended when the police shot dead five suspects. Now, authorities are rushing to answer how a group that included teenagers was able to carry out a well-planned and coordinated attack in a country that has parried danger for so long, despite being such a tempting and symbolic target for Islamic militants. “For the jihadis, Spain is still very much a front-line country,” said Bruce Hoffman, a Georgetown University professor who has advised the US government on terrorism. Since 2004, when a series of bombs ripped through commuter trains in Madrid, killing 192 people, Spain has foiled a long list of plots by Islamic militants—not least in the coastal area around Barcelona where Thursday’s attacks took place. Over 700 suspected extremists have been arrested since 2004, according to the Interior Ministry. They include Pakistanis plotting suicide attacks on the Barcelona subway in 2008; a terrorist cell in

Melilla, Spain’s territory in North Africa; and nine, mostly Moroccan, men arrested in April in connection with the March 2016 attacks in Brussels that targeted the city’s airport and a subway station. Last year the Spanish authorities quashed a possible plot to drive a truck through crowds, similar to earlier attacks in Berlin and in the French city of Nice, and they intercepted a shipment by sea of 20,000 uniforms being smuggled to jihadis in Syria and Iraq. “The Spanish authorities are at the top of the game in Europe,” said Matthew G. Olsen, a former director of the National Counterterrorism Center. “My sense is they have been extremely successful in identifying and disrupting attacks.” Galvanized by the 2004 Madrid attacks in the same way the September 11, 2001, terrorist attacks served as a wake-up call for Americans, the Spaniards built on their decades of experience in fighting ETA, the Basque separatist movement, and introduced a raft of laws that helped to disrupt radical cells. But counterterrorism is partly a matter of luck, and last Thursday, Spain’s ran out with a plot whose size and complexity offered a sobering reality check. Some of the young men involved in the attacks in Barcelona and Cambrils were teenagers, and investigators believe they had lived double lives as they planned the attacks for a year at a house in Alcanar, a sleepy town 120 miles down the coast from Barcelona. It offered a stark reminder of the challenge in Catalonia, a region with

Mourners gather at Las Ramblas, where a deadly van attack took place last Thursday, in Barcelona, Spain, on August 19. Spain has a reputation as one of Europe’s most dogged counterterrorism operators, and officials are struggling to answer how a group of youths carried out a deadly attack. Samuel Aranda/The New York Times

a reputation as a burgeoning hub of Islamic extremism. The economic boom in Catalonia, home to just over a quarter of Spain’s almost 2 million Muslim residents, attracted large numbers of Muslim migrants from Morocco, Algeria and South Asia. But many struggled to integrate and were drawn to clusters of radical Salafi mosques that sprang up around a handful of smaller towns. In a diplomatic cable in 2007, State Department officials warned that the area, with its large population of disaffected, male and unmarried Muslim immigrants, had become “a magnet for terrorist recruiters.” As far back as the September 11, 2001, attacks, investigators found themselves scrutinizing the area. “There is a history there,” said Lorenzo Vidino, the director of the George Washington University Program on Extremism. “If you look at Google maps, the next town over from Cambrils is Salou. You can literally walk it. And Salou is the town where Mohamed Atta had his last meeting in Europe before 9/11,” he said, referring to the pilot of the first plane to fly into the World Trade

Center, who is believed to have met with an al-Qaeda figure in Salou before the 2001 attack. But Spain does not loom as a primary focus for Islamic militants. Although a staunch North Atlantic Treaty Organization (Nato) ally, the country has been a marginal player in the United States’s wars in Iraq and Afghanistan. Even as they aggressively intercepted terrorist cells, Spain’s leaders have prided themselves on their efforts to integrate Muslims into mainstream society. Despite an economic crash and high unemployment since the 2008 financial crisis, Spain has not seen the emergence of hard-line, antiMuslim political movements as elsewhere in Europe. Around 200 Spanish residents are believed to have traveled to Syria and Iraq to join the fighting there— a fraction of the hundreds who have gone from countries like Britain and France. Yet Spain cannot escape its symbolic attraction for Islamic militants that is rooted deep in its history. Between the eighth and 15th centuries

Eclipse turning day into night to send temperatures tumbling

etting ready to watch the solar eclipse? Bring a sweater along with those special glasses because the mercury could dip as the moon’s shadow crosses the land. Millions of Americans across a 113-kilometer corridor from Oregon to South Carolina will see the sky darken as the sun disappears from view, albeit for only a few minutes at a time. Temperatures in those areas could tumble by as much as 5.6 Celsius, according to Paul Walker, a meteorologist with AccuWeather Inc. in State College, Pennsylvania. Other parts of the nation will only experience a partial eclipse. “That is assuming a totally sunny sky,” Walker said by telephone. “We will see a temperature drop where totality happens,” he said, referring to the path the eclipse will take across the US where the sun will be completely blocked out. The eclipse will disrupt the sun’s power to heat the ground, warm the atmosphere and supply electricity. It could also be ruined by a rainy day, patch of fog or even just a sudden thunderstorm in the wrong place. Given the limits of modernday forecasting, predicting any one of those days in advance for an event that only lasts minutes is near impossible. “It’s a difficult forecast challenge,” said Bob Henson, a meteorologist at Weather Underground in Boulder, Colorado. “You’re not forecasting a day’s weather, but for two minutes.” The chill in the air will peak about five minutes to 20 minutes after the moon’s shadow passes by. Temperatures could take three hours

a large part of the Iberian Peninsula was ruled by Muslim caliphs, and extremist web sites often speak fancifully about a return to the era of Al-Andalus, as medieval Spain was known. A nd despite its ef for ts at integration, Spain has struggled with extremist currents inside its Moroccan communities, in much the same way as British officials deal with Pakistani communities and the French with residents of Tunisian or Algerian descent. That problem is linked to Spain’s close, if sometimes testy, historical relationship with Morocco, which accounts for much of the country’s Muslim migration. Almost all of the dozen suspects in Thursday’s attacks have been identified as Moroccans or of Moroccan origin. That is the same background as the ringleader and the foot soldiers of the Paris attacks on November 13, 2015, as well as of the men who rolled suitcase bombs into the Brussels airport on March 22, 2016. In Aug ust 2015 Ayoub ElKhazzani, a Moroccan-born man who lived in the south of Spain,

Counterprotesters surge into Boston, overshadowing a planned rally

Solar eclipse Bloomberg

to rebound across the Great Plains and East Coast, said Brad Harvey, meteorologist with MDA Weather Services in Gaithersburg, Maryland. “The change in temperature may be larger and take longer to recover in the West,” Harvey said. The eclipse will start to be seen in the morning, which is “the time of day when temperatures are rising most rapidly.” On the West Coast, the eclipse is due to start a little after 9 a.m. local time and peak about 10:15 a.m. In the central US, that will happen at 1:18 p.m. in Saint Louis. The East Coast will see the biggest effect after 2:30 p.m. As many as 12,000 megawatts of solar power will vanish along the path of the moon’s shadow along with the decrease in temperatures. Natural gas generators, as well as hydroelectric plants and other sources,

will help fill in the gaps. There will be little impact on winds, according to Harvey. “Gusts may be reduced because of stabilization of the air,” he said. The effect could be similar to a sea breeze, Henson said. One of the odd things that could happen on a microscale is for fog to occur as sunshine fades and temperatures drop. That the path of totality crosses three distinct weather zones also has to be factored in by meteorologists. One is the Pacific Northwest, which is often clear and sunny at this time of year, except along the coast, Henson said. So people living inland will likely have a good chance of seeing the eclipse. Smoke from wildfires could threaten to obscure the celestial event, said Frank Pereira, a forecaster

at the US Weather Prediction Center in College Park, Maryland. “In terms of cloud cover, it will be minimal across a good portion of that area.” Showers and thunderstorms forecast to cross the region from Nebraska to Missouri Sunday night could linger into Monday, Pereira said. Southern Illinois, Kentucky and Tennessee should all have good weather. Finally, east of the Mississippi, the typical summertime pattern can be one of afternoon thunderstorms that are difficult to forecast in advance and could make viewing the eclipse that much harder. “If they pop up over you, you aren’t going to see it,” Henson said. And it that happens? Well, North America gets another crack at a total solar eclipse in April 2024. Bloomberg News

was over powered by passengers on a high-speed train traveling between Amsterdam and Paris after he opened fire with a Kalashnikov rifle. Khazzani was said to have been radicalized in a mosque in Algeciras, Spain. Over 1,600 Moroccans have joined the Islamic State (IS) in Syria and Libya, according to Morocco’s Interior Ministry, and security experts believe there are hundreds of sympathizers inside the country. “What’s astounding is that an attack like this hasn’t taken place inside Morocco,” said Issandr El Amrani, an analyst with the International Crisis Group, which recently published a study of IS activities in North Africa. Spanish counterterrorism relies heavily on cooperation with the Moroccan security forces, who have successfully penetrated migrant communities across Europe through a strong network of informants, despite concerns from human rights groups about their methods, Amrani said. But that assistance also depends on the political relationship between the countries, which has been dogged by tensions over Ceuta and Melilla, Spain’s enclaves in North Africa, and a simmering dispute over the Western Sahara region. While it has cut costs in other areas, the Spanish government raised both the staff numbers and the budget this year for its intelligence services. Toughened antiterrorism legislation has allowed authorities to arrest suspects at an earlier stage of attack planning than in Britain and elsewhere. Until this week’s attacks, 54 people had been arrested this year on suspicion of terrorist activity in Spain, where the threat of returnees from Syria is deemed relatively small. But like so many intelligence agencies in Europe, the Spanish are overwhelmed by the volume of potential terrorism plots they are trying to monitor, said Seth G. Jones, a terrorism specialist at the RAND Corp. “They’re totally swamped with leads,” he said. “There is no way they can cover all their current open cases.” New York Times News Service

OSTON—Tens of thousands of demonstrators, emboldened and unnerved by the eruption of fatal violence in Virginia last weekend, surged into the nation’s streets and parks last Saturday to denounce racism, white supremacy and Nazism. Demonstrations were boisterous but broadly peaceful, even as tension and worry coursed through protests from Boston Common, the nation’s oldest public park, to Hot Springs, Arkansas, and to the bridges that cross the Willamette River in Portland, Oregon. Other ra l lies played out in Atlanta, Dallas, Houston, Memphis, Tennessee and New Orleans, among other cities. The demonstrations—which drew 40,000 people in Boston alone, according to police est imates— came one week af ter a 32-year-old woman died a m id c l a shes bet ween wh ite nationalists and counterprotesters in Charlottesville, Virginia, and they unfolded as the nation was again confronting questions about race, violence and the standing of Confederate symbols. President Donald J. Trump, who has faced unyielding, and bipartisan, criticism after saying there was “blame on both sides” in Charlottesville, wrote on Twitter last Saturday that he wanted “to applaud the many protestors in Boston who are speaking out against bigotry and hate. Our country will soon come together as one!” He also wrote: “Our great country has been divided for decades. Sometimes you need protest in order to heal, & we will heal, & be

stronger than ever before!” It was an abrupt shift in tone. The president posted earlier last Saturday that it appeared there were “many antipolice agitators in Boston.” Law-enforcement officials were on alert throughout the day, wary of being seen as irresolute and ineffective after the protests in Virginia turned into running street battles and turned fatal when someone drove a car through a crowd. Officers in riot gear sometimes faced off with demonstrators to maintain order. There were scattered scuffles and arrests; in Boston, the site of the largest of the weekend’s protests, the police said there had been 33 arrests, mostly involving charges of disorderly conduct. Boston, where officials had pledged to enforce a policy of zero tolerance for violence, had been facing dueling demonstrations, but a rally to promote “free speech” was brief and unamplified beyond the small bandstand where it was held. The event, whose participants appeared to number only in the dozens, was undercut by police planning and starved by an enormous buffer zone between the handful of protesters and the overwhelming numbers of their opponents. Organizers of the speech rally had said they were appealing to “libertarians, conservatives, traditionalists, classical liberals, Trump supporters or anyone else who enjoys their right to free speech.” New York Times News Service

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8 charged in Thailand’s latest case of insulting monarchy

ANGKOK—At least eight people have been charged with insulting the monarchy for allegedly burning portraits of members of Thailand’s royal family, a legal aid group said last Thursday. Thai Lawyers for Human Rights said the suspects were first arrested in May in the northeastern province of Khon Kaen and faced multiple charges for vandalizing portraits of Thailand’s late King Bhumibol Adulyadej and his son and successor King Maha Vajiralongkorn Bodindradebayavarangkun. The portraits were on ceremonial arches typically found on public streets. Lese majeste, as the offense is known, is punishable by three to 15 years’ imprisonment. At least 93 cases of lese majeste involving 138 people have been prosecuted since the military seized power in 2014, according to the lawyers’ group. Rights groups say the government’s actions are a way of silencing critics and asserting political control. The suspects were not initially charged because the police said their investigations found that the actions were more likely driven by personal conflicts or for local benefits. It said most of the suspects were 18 to 20 years old, with the youngest 14 years old. They had been held for 48 days before being released. They were rearrested and charged last Wednesday.

They also face additional charges of criminal association and destruction of public property. The lawyers group said it was uncertain about the 14-year-old’s case because it was being treated under a separate system for juvenile offenders. Bail requests for the suspects had been denied when they were initially detained, and the lawyers group says it is less likely the suspects would be granted bail now that they have been charged. Thai Prime Minister Prayuth Chan-ocha was reported to have said last Wednesday that the king has no interest in punishing people for lese majeste, but that such cases are necessary for protecting national security. “Regarding the offense, or anything else that should not have been disseminated, His Majesty always says he does not want people to be punished for it,” Prayuth was quoted saying by the Bangkok Post. He said that protecting the institution of the monarchy is a key part of national security strategy. “Some people already know the law but they try to defy it,” he was quoted saying. Prayuth was speaking in reaction to questions about a student activist who was sentenced last Tuesday to two-and-a-half years in prison after he pleaded guilty to lese majeste for sharing a BBC article about King Vajiralongkorn on Facebook. AP

Singapore workers get a taste of commuting chaos

ingapore’s reputation for slick infrastructure and efficient public transport received a knock last Friday morning as two of its five mass transit rail lines suffered signaling failures, leaving thousands of disgruntled passengers late for work and unleashing a tirade of criticism on the social-media sites of the two rail operators. “Lovely.... I’ll send ye the bill for the cab I’m having to take to work,” wrote one commuter. “Hello #mrt where are you? forgot to get out of bed this morning?” riffed another. Pictures of packed stations, queues for buses and stranded trains soon did the rounds in a city unused to the kind of disruptions that commuters in places like New York and London face regularly. Singapore’s Mass Rapid Transit operators, SBS Transit Ltd., which runs the newest and driverless Downtown line, and SMRT Corp., operator of the oldest North-South line, both blamed faulty signaling for the delays. The two lines, which both run north from the city center, were operating normally by 9:15 a.m. last Friday. SMRT advised commuters to cater for “additional traveling time” on the North-South Line last Friday evening. The delays are symptomatic of a learning curve that many Asian cities are facing as they upgrade infrastructure to cope with swelling urban populations. In Singapore, where car ownership is discouraged with taxes that push the cost of a Ford Focus over S$100,000 ($73,300), commuters are in the front line of the change to driverless rail networks. For decades, the city’s award-winning airport, bougainvillea-fringed highways and spotless mass transit trains have been the envy of neighboring countries. But since 2000, the island-nation’s population has jumped from less than 4 million to more than 5.6 million, straining a public-transport network that has struggled to keep up.

System review

The efficiency of the system led to overconfidence, said Lock Kai Sang, engineering professor at the Singapore Institute of Technology and a former member of an Independent Advisory Panel appointed by the Land Transport Authority to assess the rail system’s power supply. “At a certain point, there wasn’t

sufficient attention being paid to the maintenance,” he said. “They were too confident at one point.” Now, he said, the government and rail operators are putting in a lot of effort to install systems that allow predictive maintenance, designed to stop problems before they occur. Friday morning’s troubles occurred because of two separate and unrelated faults, Singapore’s Land Transport Authority said in a statement. A fault on SBS’s 3-year-old line meant the trains had to be manually driven from the shed onto the main line before the computers could take over, causing delays on the route. On SMRT’s North-South line, the second mass transit rail to open in Southeast Asia, trains had to run at reduced speeds for safety reasons due to signaling faults. The 29-year-old line has been plagued with glitches for months as the company installs and tests a new signaling system that would ultimately allow that route to also be driverless. The Land Transport Authority said both incidents behind Friday’s delays would be “thoroughly investigated”.

Improving service

While SMRT runs its lines, the rail network and stations were taken over by the government in 2016 to allow the operator to concentrate on improving service. Previous disruptions to the network, which is less than half the size of the New York subway system, have sometimes been punished with fines of as much as S$5.4 million for the operator. But Singapore commuters are losing patience. For most workers, the MRT system is the only quick and affordable way to get to work. It has also tarnished the city’s reputation, especially among workers who remember when they could brag that they had one of the best rail systems in the world. “With the recent setbacks, I would not want to boast that the Singapore system is world class,” Lock said at the Singapore Institute of Technology. “Once we have the problem fixed, I think we’re moving there.” Or, as one commentator on social media remarked, next to a picture of school kids queuing at a train station to get an excuse note for being late for examinations: “Poor kids. When I was their age I could set my watch according to the train schedules.” Bloomberg News

Editor: Max V. de Leon • Monday, August 21, 2017 A11

Among Asian currencies, Philippine peso is unloved

sian emerging-market currencies have been having their best year since before the 2013 taper tantrum, bolstered by pace-setting growth rates and attractive yields.

But the Philippine peso has been left out of the party—ironically after it held up better than peers, including Indonesia’s rupiah back in 2013. Unless things change, it’ll be a fifth straight year of declines for the peso, which is down 3.4 percent so far in 2017 versus a 7.9 percent rise for Thailand’s baht. For now, that slide may be set to deepen as traders test the tolerance levels of Philippine policy-makers, who have, so far, refrained from actions to prop up the exchange rate. “The market appears to have turned to the view the Philippine authorities do not care about the Philippine peso,” said Callum Henderson, managing director of global markets-APAC at Eurasia Group UL Ltd. in Singapore. “In my view that is wrong, but recent statements may not be enough and the central bank may have to match words with deeds.” It’s hard to make a concise case for why the peso is so forlorn, given the country’s growth trending above 6 percent the past half decade. Currency analysts list a series of reasons: n The current-account deficit is set to widen because of ambitious infrastructure plans. n Uncertainty over the passage of tax reforms that are winding their

way through the legislature. n Political upheavals, such as President Duterte’s war on drugs, are harming sentiment. n Battles between government troops and Islamic State-linked militants in the southern city of Marawi have prompted additional caution among investors, and the cost of the military activity is putting pressure on the budget deficit. “When you’re looking at other currencies in the region, it’s less appealing from that perspective,” said Stephen Innes, head of trading for Asia Pacific with Oanda, in an interview in Hong Kong on August 17. “You have the current account increasing, the waves of instability in the political landscape, and it just becomes the local whipping boy.” NatWest Markets, ANZ Banking Group and Goldman Sachs Group Inc. are among those who are bearish on the currency. Philippine Finance Secretary Carlos G. Dominguez III said last week that the peso’s slump is mainly due to a deteriorating trade outlook because of rising imports of capital goods, which is “normal for a country that is growing very fast”. Last Thursday GMA News reported that Socioeconomic Planning Secretary Ernesto M. Pernia had said an ex-

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change rate of 52 to the dollar would be acceptable. Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla Jr. said last Friday that there will be no free fall for the currency as the economic fundamentals are strong. He told Bloomberg Television’s Regina Lay that the market may have overreacted to the outlook for the current account deficit. The peso has become an obvious target for selling as tensions have risen, Innes said—not only domestically but more widely with international concerns, such as North Korea’s nuclear saber-rattling.

Intervention

There are no signs that the central bank plans to intervene to stem the currency’s losses. “It’s still too early to say,” Ben Luk, global macro strategist with State Street Global Markets, said in a phone interview. “I expect them to be at a plateau level right now.” Jonathan Ravelas, chief market strategist at Banco de Oro Unibank Inc., sees no need for the central

bank to intervene heavily. Fluctuations have been limited and the peso is bound to recover given that the economic fundamentals remain generally sound, he said. “Once the tax reform comes in and more infrastructure is built we may see the peso recover,” Ravelas added. “This is like the darkest hour just before dawn.” Gross international reserves have fallen over the past year, with the central bank blaming the decline on foreign-exchange operations and the national government’s payment of maturing obligations. Traders say the monetary authority’s presence in the spot foreign-exchange market is meant to smooth out fluctuations rather than reverse the currency’s direction. “It’s always been geared toward managing foreign-exchange volatility and controlling irrational movements,” said Steven Michael Reyes, senior vice president at Rizal Commercial Banking Corp. in Manila. “There’s no indication that strategy would change.” Bloomberg News

Vietnam battles dengue outbreaks with 42% more cases

ANOI, Vietnam—Vietnam has been battling raging dengue-fever outbreaks with more than 10,000 new infections reported over the past week stretching its medical system. The number of admitted patients represents a 42-percent increase over the same period last year along with seven more deaths, the Ministry of Health said last Friday. A total of 90,626 people have been infected, of whom 76,848 have been hospitalized and 24 have died. The ministry attributed the rise of dengue outbreaks to higher temperature, more rains and rapid urbanization that promote the breeding of virus-carrying mosquitoes. Dr. Vu Minh Dien of the National Hospital of Tropical Diseases in Hanoi, where the most severe cases were being treated, said 800 to 1,000 people have been checking in daily complaining of fever. That compares to only several cases that reported to the hospital in June and July last year, he said. Dien said some 300 dengue patients were being treated, stretching the hospital’s resources, including longer working hours without weekend leaves. Tran Thi Xuyen, a fruit and vegetable seller in a small market in Son La province, said she did not know how she contracted dengue fever, which also infected her fellow saleswoman. “I took antibiotics prescribed by the local district hospital for four days, but the fever did not go away and I admitted myself to this hospital where doctors said I had dengue fever,” she said from her hospital bed. There is no cure for any of the four strains of the mosquito-borne virus that causes high fever, exhaustion and, in some cases, a vicious skin rash.

Doctor Vu Minh Dien examines dengue patient Tran Thi Xuyen at the National Hospital of Tropical Diseases in Hanoi, Vietnam, on August 18. AP Photo/Tran Van Minh

Patients most at risk of dying are the elderly, children or those with other medical complications. Hanoi and the southern commercial hub of Ho Chi Minh City are the hardest hit. The government last Thursday urged residents to actively engage in killing mosquitoes and mosquito larvae, particularly at construction

sites and housing for workers. “The joint efforts by the people, as well as our political system in searching and eliminating mosquito larvae, emptying water containers, which are fertile for larvae to breed, and spraying chemicals to kill mosquitoes are key factors to curb dengue fever,” Dien said. AP

IS cleric granted early release in Indonesia is rearrested

AKARTA, Indonesia—A radical Islamic cleric granted an early release from prison to mark Indonesia’s Independence Day has been rearrested for alleged involvement in several militant attacks. Aman Abdurrahman, who has led an Islamic State group-affiliated militant network from prison, was among more than 90,000 inmates granted sentence reductions for Thursday’s national holiday. Ibnu Chuldun, who heads the

Justice Ministry’s provincial office in Central Java, said last Friday that Abdurrahman was transferred from Nusa Kambangan prison island to a paramilitary police detention center near Jakarta. Chuldun said the cleric is being questioned about his role in attacks, including a January 2016 suicide bombing in central Jakarta that killed four civilians and four attackers. Abdurrahman was serving a

nine-year sentence for helping set up a jihadi training camp in a remote mountainous area of Aceh in 2010. He was released on parole in 2008 from a seven-year sentence for a failed plot that involved a bomb prematurely detonating at his home. The police say the 45-year-old, whose real name is Oman Rochman, was the main Indonesian translator for IS propaganda and led Jemaah Anshorut Daulah, a network of

almost two dozen Indonesian extremist groups that formed in 2015. Indonesia, the world’s most populous Muslim nation, has carried out a sustained crackdown on militants since the 2002 Bali bombings that killed 202 people, but a new threat has emerged from IS sympathizers. Twin suicide bombings in May killed three police officers in the deadliest militant attack in Jakarta in a year. AP

Green Monday BusinessMirror

A12 Monday, August 21, 2017

www.businessmirror.com.ph • Editor: Lyn Resurreccion

Asean Biodiversity Outlook 2 launched; Biodiversity Conservation and Management of Protected Areas program signed

ACB’s new home: A symbol of commitment

Story & photos by Stephanie Tumampos

key to achieving area-based Aichi targets,” she added. Aichi biodiversity targets were created in the 10th meeting of the Conference of the Parties (COP 10) held in Aichi Prefecture in Japan in 2010. The meeting adopted a revised and updated Strategic Plan for Biodiversity, including the Aichi Biodiversity Targets, for the 2011-2020. Vergara also highlighted the need to ensure effective management of protected areas and establish area networks. “ There is a need to expand t he conser vation communit y beyond the already informed support groups and we all need to be responsible for biodiversity conservation in the region,” she said.

he Asean Centre for Biodiversity (ACB) has a new home. The regional biodiversity center inaugurated its new building within the University of the Philippines Los Baños campus in Laguna recently.

Inside the newly inaugurated Asean Centre of Biodiversity (ACB) building in Los Baños are Laguna. Director Theresa Mundita S. Lim (seated, left) of the Biodiversity Management Bureau talks with Sen. Loren Legarda. At the back are Asean, ACB and Philippines officials and biodiversity advocates.

Dr. Sheila G. Vergara (left), ACB Biodiversity Information Management director, distributes the Asean Biodiversity Outlook 2 to (from second from left): ACB Executive Director lawyer Roberto V. Oliva; Director Dr. Theresa Mundita S. Lim of Biodiversity Management Bureau; Wendy Yap, director, International Relations National Biodiversity Centre, National Parks Board, Singapore; Win Naing Thaw, director, Nature and Wildlife Conservation Division, Ministry of Natural Resources and Environmental Conservation, Myanmar; Chairman of ACB Governing Board Lonkham Atsanavong; Shaharudin Anwar, representative, Department of Environment, Parks and Recreation, Brunei Darussalam; Vann Monyneath, chairman, Asean Senior Officials on the Environment (Asoen)-Cambodia; Syaiful Anwar, representative, Research Centre; Nguyen Thi Thanh Tram, head, Deputy Asoen Office-Vietnam Department of International Cooperation and Science and Technology; and Asean Secretariat Deputy Secretary General Vongthep Arthakaivalvatee.

Environment Secretary Roy A. Cimatu (left) with ACB Director lawyer Roberto V. Oliva.

The historic event also saw the launching of ACB’s Asean Biodiversity Outlook 2 (ABO2) and the signing of the grant agreement for five-year Biodiversity Conservation and Management of Protected A reas (BC A MP) program in Asean supported by the European Union (EU) with €10-million (P593.699 million as of July 29) funding. All these were part of ACB’s celebration of Asean 50th anniversary this year. The ceremonies was led by ACB Executive Director lawyer Roberto Oliva and Environment Secretary Roy A. Cimatu. It was attended by officials of the Asean, ACB and the Philippines, diplomats and biodiversity advocates. Although Asean occupies only 3 percent of the world’s Earth surface, Oliva said Asean is home to 18 percent of all known flora and fauna, 30 percent of coral reefs and 35 percent of mangrove forests. “Three countries, namely Indonesia, Malaysia and the Philippines are considered among the 17 megadiverse countries in the world,” Oliva said in his speech. He noted that other Asean countries are also megadiverse. “Even a small country like Singapore, prides itself as a city in a garden with biodiversity as the centerpiece of its further devel-

5-year mission for conservation

cause in maintaining a liveable environment for the present and future generations,” Cimatu said.

opment. And Brunei has probably one of the most best preserved mangroves in the world.” But, despite a these treasures, the region’s biodiversity is in peril, he said.

Second biodiversity report

Symbol of commitment

As a global biodiversity hot spot, Southeast Asia is working hard on preservation and conservation. This is why its newly constructed headquarters in Laguna would serve as a beacon of all what the ACB and the rest of the Asean community firmly stands for, and a clear symbol of Asean’s commitment to biodiversity conservation and a gift of the Philippines to Asean and to the world, Oliva said. “In 2005 the Asean Centre for Biodiversity was established to put together regional efforts toward biodiversity conser vation,” he said. “Founded on the same principles of unity, friendship and cooperation, 12 years after, the establishment of the ACB [headquarters] and with the close guidance of ACB’s governing board and the working group of nature conservation in biodiversity, the ACB has gone a long way.” For Cimatu, “the stakes are high,” noting in his speech that “the various ecological ser vices

European Union (EU) Delegation to the Philippines Chargé d’Affaires Mattias Lentz (left) and ACB Executive Director lawyer Roberto V. Oliva show the documents after the signing of the five-year Biodiversity Conservation and Management of Protected Areas program grant agreement with €10-million (approximately P593.699-million) funding from the EU.

we der ive from our env ironment speak of our dependence on biodiversity.” He c ited t he people’s u se of environment as source for medicine as cure for illnesses, materials for shelters, food for nourishment, sites for creation, among others. He said the abusive use of natural resources “will lead to our own fall as many depend on the environment for livelihood.”

Cimatu also said the new ACB building is a humble share of the Filipinos in the noble cause of biodiversity conser vation. He said it is a testament of endeavors in conservation. “The government of the Philippines intends this edifice to be a sanctuary for biodiversity conservation. For all individuals, regardless of color and race, status and religion, come as one and share the resources in the noble

A nother mi lestone for the Asean biodiversity community was the launching of the second edition of the ABO2, a descriptive summary of the current state, research and recommendations for biodiversity conservation. Dr. Sheila Vergara, director of biod iversit y i nfor m at ionmanagement unit of ACB, led the launch and turnover of the ABO2. A copy of the report was handed to Bambang Dahono Adji, chairman of the ACB-Asean Working Group on Nature Conservation and Biodiversity, and to members of the ACB governing board and other officials. ABO2’s four chapters include progress reports in Asean’s efforts toward achieving the Aichi Biodiversity projects, the state of ecosystems and implementation of actions of Asean’s priorities, recommendations and the next biodiversity outlook for the year 2020 and beyond. “The recommendations present our analysis that there is a need for a common understanding of our biodiversity in the region,” Vergara said. “Asean memberstates with large jurisdictions are

The many years of partnership of the EU and the ACB gave birth to a new program—the BCAMP. The program aims to enhance conservation of biodiversity and effective management of protected areas in Southeast Asia. EU Delegation to the Philippines Chargé d ’A ffaires Mattias Lentz, who delivered the speech of EU Ambassador Franz Jessen, said, “ T he EU is an impor tant par tner in promoting biod iversit y i n t he i nter n a tional development agenda and advocates for ecosystems conser vation in its development cooperation polic y.” Back in 2010 during the COP 10, the EU agreed on a strategic plan with all other participating parties to achieve 20 targets by 2020 which were the “Aichi biodiversity targets.” In 2012 and 2014, during the COP 11 and COP 12, the EU pledged to double its financial resources on biodiversity for developing countries between 2015 and 2020. “This assistance has increased from €50 million in 2003 to €250 million in 2015,” Jessen said. Since the ACB center was established in 2005, the EU and Germany have supported the center. “ The project [BC AMP] will improve the ef fectiveness of biodiversity conser vation and the management of a number of n at ion a l pa rk s i n A sea n. It will enhance the scientific knowledge on biodiversity and ma inst rea m t he biod iversit y dimension in the educational systems,” Jessen added. Oliva said that the ACB’s commitment to conservation is for each and every citizen in the Asean region and the rest of the world. “Our dream is to let every citizen of the Asean know the value of biodiversity whether an environmental advocate, student, lawyer, soldier or ordinary stakeholders. We want them to get involved in biodiversity conservation, because the prosperity and future of Asean depends on maintaining and preserving our rich biodiversity,” Oliva said. “And just like Asean, the ACB will become a model for biodiversity conservation in the world.”

PHL native-plant conservation is focus of workshop R

ecommendations, such as the revision of the list of threatened, endangered and critically endangered plants; simplification of the policies and protocols; revival of the Philippine Wild Flora Council; and the intensification of research and development (R&D) in Philippine native plants and product development and its utilization, were among the outputs of a workshop for the conservation of Philippine native plants and flora.

The activity was cosponsored recently by Philippine Council for Agriculture, Aquatic and Natural Resources Research and Development of the Department of Science and Technology (DOST-PCAARRD). Hosted by the the Department of Environment and Natural ResourcesBiodiversity Management Bureau, the workshop was titled “National Symposium/Workshop on the Sustainable Use of Philippine Native Plants”. It was

attended by advocates from government agencies, private sector and state universities and colleges. The workshop aimed to identify species of wild plants with potential or actual commercial use for inclusion in the list of Economically Important Species. It also targeted to document best conservation practices and sustainable uses of native plants; generate recommendations for R&D agenda for native plants; and provide a venue to review

the draft policy on the registration of plant nurseries establishments engaged in commercial propagation of plants. Dr. Jocelyn E. Eusebio, director of DOST-PCAARRD’s Crops Research Division, discussed the ongoing and completed programs and projects collaborated with international and local agencies, organizations and institutions in line with the overall goals of DOST-PCAARRD’s Industry Strategic Science and Technology Program (ISP)

for Biodiversity. The ISP promotes biodiversity conservation and development of biodiversity-based products. The programs and projects under the ISP focus on the conservation of the Philippine native agricultural genetic resources. During the two-day training, workshops on the identification and use of economically important plant species and the R&D Agenda on Philippine Native Plants were conducted. The participants discussed the different issues

with regard to the current situation of the floriculture industry, and the existing policies and protocols in the conservation and protection of Philippine native plants and flora. The workshop served as a tool for the bureau to solicit suggestions and recommendations on the different sectors in the implementation of the rules and regulations on sustainable use of native plants for the benefit of the industry. S&T Media Service

Biodiversity Monday BusinessMirror

Asean Champions of Biodiversity Media Category 2014

Monday, August 21, 2017 A13

Editor: Lyn Resurreccion • www.businessmirror.com.ph

ASEAN BIODIVERSITY HEROES SPEAK

‘Understand, protect, share benefits of biodiversity’ By Jonathan L. Mayuga

‘M

@jonlmayuga

any species in our country were already extinct before I was born,” lamented Sophea Chhin, a young biodiversity information specialist from Cambodia. Nevertheless, he said, there’s always new species waiting to be discovered—protected and conserved. Chhin, who was among the 10 recognized as Asean Biodiversity Heroes, said governments play a very important role in biodiversity conservation, citing his country’s experience, wherein the protected areas (PAs) coverage doubled—from 3 million hectares in 2016 to 7 million hectares to date. Along with the other Asean Biodiversity Heroes, Chhin spoke on the topic “The Role of Governments in Promoting Biodiversity Conservation” during the Asean Biodiversity Heroes Ceremony and Forum held in a hotel in Malate, Manila, on August 7. According to Chhin, after suffering from the Pol Pot regime in 1970s, biodiversity conservation in Cambodia eventually started from scratch. He said there was no scientist in Cambodia nor there was not much biodiversity left to protect to start with because of the war.

War and biodiversity

“Many people died during that time. After the war, many land mines remain in our country,” he said. After the Pol Pot regime, which he described as the worst in Cambodia’s history, poverty was felt across the country and biodiversity conservation was not a popular idea. Poverty took its toll on Cambod i a’s forest a s t he dem a nd from forest resources grew, he said. From 1973 to 2014 Cambodia lost about 20 percent of its forest cover, he said. Yet, growing up even as a young student, Chhin said he saw it as an opportunity to get involved in environment conservation despite the danger that lurks in the forests not from wild animals—but because of land mines. “When I was young, I saw a lot of people who used sling shot to shoot birds for food. I started thinking, when they grow up, they would steal. I thought [it’s better] to use camera instead to promote biodiversity. I started to get involved [in biodiversity conservation] in 2007. At that time, I don’t know anything about conservation. My family and friends were asking me why get involved in conservation?” he narrated.

A dangerous work

Chhin said biodiversity conservation was a very dangerous endeavor in his country. “Sometimes people died in the forest. Many died before they could get to the hospital due to accident,” he said. That is why to be a conservation advocate, he said, “we need to have commitment.” Chhin, who popularized wildbird photography, bird watching, blog ging and information sharing of Cambodia’s unique bird species, was credited for increasing t he level of awareness on biodiversity among Cambodia’s young generation today. Because he had no money to bring students to the forests, he started to take photographs to show them the wide variety of bird species in Cambodia’s wildlife. Many students were afraid to go to forests and even parents would

caution their children from going on adventurous trips to forests. “They don’t want their children to go to the forests because they are afraid. The forest is dangerous because of landmines,” he recalled.

Passion, commitment

According to Chhin, the credit on biodiversity conservation in Cambodia should also go to the current government. He said Cambodia is lucky to have a young, passionate environment and biodiversity advocate as Cambodia’s environment minister. “We have a young minister. The minister of environment is very committed to biodiversity. He is not just a politician. He is also a scientist. He involves himself in conservation,” Chhin said. Before 2016, he said Cambodia only have 23 PAs covering about 3 million hectares. Today, Cambodia has a total of 45 PAs covering almost 7 million hectares. “That is the commitment of the government in conserving the biodiversity [in Cambodia] because we know that protecting the habitat is the only way to protect the animals, as well.”

Clear policy

Eyad Samhan, the Asean Biodiversity Hero from Brunei Darussalam who presented the role of his government in biodiversity conservation, underscored the importance of having a clear-cut policy in protecting the country’s ecosystems. Brunei, he said, has a policy against cutting of trees and ban on exporting forest products— particularly wood products. With a total area of 5,765 square kilometers, and a population of only a little over 400,000, environmental protection is not much of a problem in Brunei. The government also bans plastic bags, and promotes reforestation in communities. Environmental protection and biodiversity conservation, he said, is reinforced by the initiative to educate Brunei’s younger generation by integrating it in the school curricula. To be a biodiversity advocate, he said, people need to appreciate nature. Interaction with nature, especially the forest, he said, is a very important aspect in appreciating its beauty and importance to life. “The forest is my home. We need to interact with the forest. You have to go out in the field to know more about biodiversity. There is a lot more to do. There is a lot more to find and to understand. There are a lot more species in Brunei,” he said. According to Samhan, government officials should go out in the field, “to know more about what needs protection.” As a policy, Brunei do not export much. “We don’t export. Mainly, we import. That is why we were able to protect our forests. There is no logging, no cutting of trees. We have cheaper price to import,” he pointed out.

People’s participation

Alamul Huda Adnan of Brunei’s Department of Environment, Parks and Recreation of the Ministry of

ALCALA

chHIn

samhan

zakri

Development of Brunei Darussalam, added dur ing the for um that the st reng t h of Br u nei ’s env i ronmenta l protection lies in the active participation of members of v i l lage leg islative counci ls. “Local communities are encouraged to conduct community assembly [to make the public] understand the significance of biodiversity,” he said. Brunei, he said, also promotes the one-village, one-product policy so that villagers can benefit from its natural resources. He said the communities in Brunei are also “teachers” in a sense. “W hen you go to the forest, you need to walk with the communities and learn,” he said.

pine Eagle, one of 800. He was also caught. In another instance, in China, a person was caught eating a whale shark. He suspected that whale shark was a sea monster,” he lamented.

in our part of the world, is still undiscovered,” he said.

eventually led to resource depletion in the 1960s. “Humans need biodiversity. But we must learn to harness our resources. We need to learn how to manage them sustainably,” he said. According to Alcala, every organism, every species, is important as part of the food chain. He cited the dreaded crocodiles, which are beneficial to the ecosystem. He said crocodiles fertilizes soil and water, and helps plankton grow. In turn, small fish feed on plankton and become prey to bigger fish. “W here there are crocodiles, there are plenty of fish,” he said. In coastal and marine ecosystems, he also cited the importance of giant clams to ensure a healthy marine ecosystem. Alcala said every species is important in biodiversity conservation. While saying that people have to rely on biodiversity for food, conservation is key to harvesting them sustainably. “We have to conserve them, harness them and use them sustainably. We have to make biodiversity sustainable for humans,” he said. According to Alcala, local government units (LGUs) have a very important role to play in biodiversity conservation, citing his experience in establishing MPAs in the Philippines. Along with coastal communities, LGUs can establish locally managed MPAs, making fishing sustainable. Alcala said the National Integrated Protected Areas System Act is an important piece of legislation, which strengthened the protection of PAs in the Philippines, thereby boosting the countr y’s ecotourism sector. “We have 5 million tourists every year because we are protecting some of our areas,” he said. According to Alcala, the establishment of more PAs is one way of ensuring sustainable fisheries. In the Philippines, he said, only around 5 percent of the coastal and marine waters are protected or covered by no-take policy. On the other hand, around 70 percent to 80 percent of the Philippine oceans, he said, are targeted for fishing. He said it takes decades for marine ecosystems to recover from devastation caused by destructive fishing methods. Based on scientific studies, on Sumilon Island, in Cebu, after establishing a no-take zone, it took 20 years for the area to become productive again, as the fish catch around the area have started to increase dramatically. On Apo Island, a similar study revealed that it takes a lot longer. “ T h at i s why prote c t ion i s ver y i mpor t a nt i n biod iversit y conser vat ion,” A lc a l a sa id.

One policy

According to Adnan, the government of Brunei was able to get the communities on board in biodiversity conservation because in every project and every activity, the government makes it a point to invite them to take part. In Brunei, he said, for whatever projects or activities various government agencies want to implement, it has to go to one person—the king. “When he said yes, all government agencies must agree. All the ministers have to agree. There is no conflict, for example, like in tree cutting. You cut one, you plant four. No plastic bags, everybody would have to agree with that. [There is only] one policy. There is no intertwine,” Adnan said.

Understanding biodiversity

Malaysia’s Asean Biodiversity hero, Prof. Zakri Abdul Hamid, the science advisor to the prime minister of Malaysia, meanwhile, underscored the need for better understanding of biodiversity, its sustainable use, the need for science diplomacy and the importance of access and benefit-sharing among Asean member-countries. He said people in the urban areas have less appreciation of biodiversity than those living close to biodiversity-rich areas. Lack of understanding of the importance of biodiversity, he said, often results in tragedy, like the death of a critically endangered species. A scientist, educator and diplomat, Zakri is one of the Founding Fathers of Biodiversity Conservation and is credited for raising awareness in biodiversity among global leaders. Hamid shared “horror stories” about lack of understanding of biodiversity and sustainable use of biodiversity. “A policemen in Indonesia was caught shooting an Orangutan and cooking it. Of course, he was punished. A few years back, a Filipino farmer killed and cooked a Philip-

Science diplomacy

Z a k ri said there’s a need for more science in negotiating for biodiversity conser vation in a regional or global scale. He recalled how he, more than 20 years ago, attempted to ask the head of Malaysia’s delegation to a meeting in Kenya, but he went home instead because of his dismay. “I could not understand the notion of diplomats then talking to negotiate about biodiversity,” he said. He said there is hope for the younger people to stand up and be counted. “You must learn. You have a role to play. You must be taught of understanding and appreciating biodiversity. Diplomats need to train people. We need scientists to be involved in negotiations,” he said.

Conservation versus development

Z a k ri , du r i n g h i s t a l k , s a id there’s a strong disjoint between con ser v at ion a nd s u st a i n a ble use of biod iversit y. He said the interest in biodiversity was not originally initiated by the government, but by non-governmental organizations (NGOs) and civil society. “In Asean, countries are megadiverse. In Indonesia, Malaysia and the Philippines most of the original demand for biodiversity conservation did not originate from us [in government]. It was political. Countries like us in Asean, we appreciate the need to conserve but we also need to develop,” he stressed. He said sometimes people criticize overfishing in the Philippines, but he explained that people need to eat and they need to support their families. “When we mention about conservation, it should always be balanced by the right to development,” he said. In Malaysia, he cited, the development of oil-palm plantations, which he said should be respected. However, he was quick to explain that there is an accompanying responsibility on the part of governments to avoid destroying land ecosystems. Asean is rich in biodiversity, Zakri said. “[It is rich in plants, animals and marine organisms. We only scratched the surface. The gentlemen from Brunei talked about discovery of more species. There are an estimated 15 million to 30 million species in the world. Those discovered by science is, at best, below 2 million. The point here is, beside those number, biodiversity

Access and benefit sharing

There is a lot of potential in biodiversity, whether plants or microorganisms, Zakri said. “We already know about local knowledge and the Philippines is very advanced in that. There is a lot of potential for industrial use and pharmaceutical products. We must work together,” he said. H e a d d e d d o n o r c o u nt r i e s shou ld a lso be rewarded for t he i r cont r ibut ion s. “Despite our being mega-diverse, the third objective of the Convention [on Biological Diversity] has not been fulfilled. There is very little development. We need to access and share benefits,” he said. For that to happen, he said Asean needs to enhance knowledge, underscoring the need for the region’s people to be educated, trained and engage more in research and development. “ T h at i s t he f ut u re. A sea n must not be forever a recipient of technology or funding. We should upgrade our skill. We should improve our scientific knowledge, including our academic, legal and social [know-how] so we can be equal partners in the quest for conservation and sustainable use of biodiversity,” he said. The Malaysian biodiversity added: “Science diplomacy needs more involvement from the youth. Knowledge is very important.”

Human survival

Philippine National Scientist A ngel C. A lcala, the Philippine’s biodiversit y hero, underscored the importance of biodiversity to human sur vival. “We look at biodiversity for our benefits but we should harness them sustainably,” he said. “ We ne e d t o l e a r n ho w t o make biodiversity sustainable,” he added. A former secretary of the Depar tment of Env ironment and Natural Resources (DENR), Alcala said every species has a role to play to complete the so-called cycle of life. A marine biologist, Alcala established some of the first no-take marine reserves in the Philippines. Humans, he said, needs biodiversity to survive.

Protected areas

In the forum, Alcala cited the successful establishment of several marine protected areas (MPAs) in partnership with various stakeholders. The Philippines has one of the largest marine species in the world. In the 1940s he said the country’s forest and coastal areas are teeming with life. Overexploitation, he said,

A14 Monday, August 21, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Losing trust

e all want to be trusted by the people in our lives. Equally important, we want to be able to trust those same people that are around us. Having said that, we also expect to be given the benefit of the doubt, sort of like “presumed innocent until proven guilty”. But we also are fully aware of something American humorist and famous newspaper columnist Will Rogers wrote in 1930: “It takes a lifetime to build a good reputation, but you can lose it in a minute”. The same is true of trust. The reality is that the closer and longer the relationship, the consequences of losing someone’s trust can be flexible. An employee who has been with the company for a long time is usually not fired simply on the suspicion of wrongdoing. A marriage can withstand repeated failures of trust as long as those failures are not substantial or frequent. Political leaders face the same situation in their relationship with the people. No person can be elected to public office by a plurality of the voters without being trusted. The people expect their trust to be respected and are always watching. But they always give their leaders the benefit of the doubt…up to a point. Looking back, there is almost always a turning point when trust begins to deteriorate. The presidency of George W. Bush was never the same when it was finally concluded that there were no weapons of mass destruction found in Iraq. Hillary Clinton’s trust rating peaked in December 2012 but continued a downtrend to the lowest in her public life, primarily as a result of loss of confidence in her handling of the 2012 attack and killing of the US ambassador in Benghazi, Libya. Former President Gloria Macapagal-Arroyo’s trust rating never recovered to a net positive after the revelations in the “Hello Garci” scandal. President Duterte has had the majority of the people at his back since the beginning of his war against illegal drugs. Even while sometimes expressing great apprehension at the methods used and, more specifically, the conduct of the police, strong support has been reasonably consistent during the past year. The shooting to death by the police of Kian Loyd Delos Santos may be the turning point in the people’s trust of Duterte and his policies. Malacañang better realize very quickly that a failure of trust about the war on drugs will negatively affect the public’s view about all of the president’s initiatives, from foreign policy to local transportation. A lack of trust in a person is not confined to the immediate matter at hand. If a company cannot trust an executive about a small expense account item, can it trust that same person not to reveal trade secrets? Presidential Spokesman Ernesto C. Abella, describing the killing as an “isolated” incident, is, perhaps, the weakest possible answer to this potential crisis of trust and confidence. The next few days and weeks, as the investigation into the killing continues, may well determine what the next five years of the relationship between the President and the people will be and whether his presidency will be a success. The President and his advisors are at a crossroads. Any indication of a lack of transparency in the investigation or attempts to diminish the seriousness of this potential crime will be met with increasing outrage. Someone once said, “Trust is like a vase. Once it is broken, though you can fix it, the vase will never be the same again”.

Remembering a courageous man Atty. Jose Ferdinand M. Rojas II

RISING SUN

oday, August 21, is a nonworking holiday in the country in remembrance of Benigno S. Aquino Jr., “the greatest president we never had”. I want to pay special tribute to his courage, which he demonstrated many times over during the course of his service to the nation. From the moment he started opposing the policies of the government at that time, up until his years in prison, his continued attacks against the Marcos regime despite his illness and a death sentence, Ninoy displayed sheer bravery in the face of threat, risk to himself and family and even death. Some of Ninoy’s daring may have come from his bloodline, being a grandson of Servillano Aquino y Aguilar, a general in the anticolonial Philippine Revolution of 1896 and the Philippine-American War in 1898.

In a final display of courage, done in the name of the country he dearly loved, Ninoy returned to the

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Philippines even if he knew that he would most probably be killed. And he was, in a last ditch effort to

THE PATRIOT

hen leaders make tough decisions, they rely on two things: intuition and data. While intuition is personal and acquired over time, complete and reliable data reduces the risk of failure and helps leaders choose the best option. Companies with large amounts of information can use data analysis to spell the difference between success and failure. In one forum I recently attended, one speaker boldly declared that the usual scheme of doing business—a series of compliance, regulatory and procurement activities—will be replaced by revolutionary digital tools, such as cloud services, consolidated databases and online procurement of goods and services with active and/or instant customer interaction. The speaker emphasized customer centricity inasmuch as any business only becomes profitable whenever customers, old and new, patronize its product. Customer feedback reflected in social-media barometers often provide unbiased critical information that enables business leaders to change courses if needed. Thus, information from customers, as well as other stakeholders, such as employees, government regulators and industry experts, when taken and analyzed together, can make a leader’s intuition-based decision less risky. Data analytics allow for a more comprehensive and technologybased information processing, more known as business intelligence.

Similar to how AAA ratings are given to certain investments, companies and even countries, business intelligence takes into account the historical, current and predictive views in a particular sector or industry together with all available data to assist business leaders in coming up with rational conclusions. Philippine Airlines (PAL) conducts quarterly town-hall meetings to answer queries, listen to comments and study suggestions coming from the employees themselves. These meetings allow management to consolidate all information from its employees and apply data-analytics tools to improve processes or initiate new projects. Similar to PAL town-hall meetings, the Philippine Development Forum, entitled “Sulong Pilipinas”, is the government’s way of soliciting feedback from one of its key stakeholders: big business. Sulong Pilipinas 2016 produced the top 10 actionable recommendations, such as the adoption of a comprehensive tax reform, the improvement of transport services, the reduction of bottlenecks in PPP and

silence him by men who had none of his bravery. Little did they know that this would only fire up the nation to start a revolution. The Spanish Jesuit and philosopher Baltasar Gracian y Morales famously said, “Without courage, wisdom bears no fruit”. Unfortunately, there are plenty of personalities in power who believe that their intelligence, their smarts, or even their wisdom, would be enough to create lasting and significant change. But even our national hero, Dr. Jose Rizal, without taking up arms or any weapon aside from his pen, displayed fearlessness and daring when he fought for freedom against the colonial rule of Spain. Coming from the lives of these two great men—Ninoy and Rizal—we come to know that wisdom coupled with courage is a combination that carries the potential to topple over entire regimes and foreign colonizers. May it be a guide for those who are

currently running the nation. Allow me to end this column with a famous quote from another warrior, war veteran and former US President Theodore Roosevelt, who, once in his life, delivered a long speech right after an assassination attempt, still bleeding from the bullet lodged in his chest. “It is not the critic who counts, not the man who points out how the strong man stumbled or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes short again and again, who knows the great enthusiasms, the great devotions and spends himself in a worthy cause, who at best knows achievement and who at the worst, if he fails, at least fails while daring greatly so that his place shall never be with those cold and timid souls who know neither victory nor defeat.”

the improvement of Internet and telecommunication services, among others. A few days ago, Sulong Pilipinas 2017 revisited these 10 items. Commentary on the performance of the Duterte administration were sent online and instantly posted for all to see in large electronic displays. Cabinet members present during that forum immediately took note and reacted to such comments. In the same way that PAL President Jaime Bautista and senior management listened to their employees in PAL town-hall meetings, President Duterte and his Cabinet listened to the private sector in this forum. A quote from the Bible from Proverbs 11:14 comes to mind: “Without wise leadership, a nation falls; there is safety in having many advisers.” PAL can have its millions of passengers and 8,000 employees as its advisers; the Philippine government can have 100 million Filipinos. Having gathered data, the next logical step is to make use of it. Lito Alvarez works as the senior vice president for Corporate Planning of PAL. His office functions include determination of routes in terms of frequency, time slots and destinations, as well as aircraft-acquisition plans for fleet modernization. In senior management meetings where PAL managers present projects for approval, Alvarez asks numerous questions as he tries to extract all available information from the project proponent, similar to how lawyers conduct a cross examination. He even checks relevant web sites on his smartphone to validate the facts and figures presented. While some proponents are thrown off by the questions raised, the fact remains that senior management

appreciates t he infor mat ion otherwise not revealed during the presentation. As a result, the executive management group of PAL can make informed decisions by taking into consideration all available data, some of which are elicited or provided by Alvarez. Paraphrasing his mantra, he said that data, when made available and analyzed, can help leaders apply management principles to anticipate market trends and customer preference, as well as leverage whatever resources available to minimize risks of losses. In Proverbs 12:15, the Bible tells us, “The way of a fool is right in his own eyes, but a wise man listens to advice.” Leaders will always need advice, especially from the people to whom they swore to serve, no matter how learned or experienced they are. PAL town-hall meetings and Sulong Pilipinas are just some key initiatives where leaders can get uncensored information and advice. Filtering such advice will always be a challenge, hence the use of sophisticated data analytics. Alvarez’s use of his on-the-spot data analytics instantly converts data given during presentations to triple A information to help reduce second guessing on the part of the decision makers. Alvarez was more known as, AAA, or triple A, when he was the Commissioner of the Bureau of Customs (BOC) a few years back. In the BOC, AAA stands for Angelito Arciaga Alvarez. Now, with PAL, Alvarez can still be referred to as AAA. This time, it may as well stand for “Ask, Analyze and Advice”. It has been his signature move during PAL meetings. For questions and comments, please e-mail me at sbmison@gmail.com.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Monday, August 21, 2017 A15

The week when President Dissecting PPP contracts # 5: Grant of rights Donald Trump resigned

By Frank Bruni | New York Times News Service

s the worst week in a cursed presidency wound down, I spotted more and more forecasts that Donald J. Trump would resign, including from Tony Schwartz, who wrote The Art of the Deal for Trump and presumably understands his tortured psyche. They struck me not as wishful or fantastical. They struck me as late. Trump resigned the presidency already—if we regard the job as one of moral stewardship, if we assume that an iota of civic concern must joust with self-regard, if we expect a president’s interest in legislation to rise above vacuous theatrics, if we consider a certain baseline of diplomatic etiquette to be part of the equation. By those measures, it’s arguable that Trump’s presidency never really began. By those measures, it’s indisputable that his presidency ended in the lobby of Trump Tower last Tuesday afternoon, when he chose— yes, chose—to litigate rather than lead, to attend to his wounded pride instead of his wounded nation and to debate the supposed fine points of white supremacy. He abdicated his responsibilities so thoroughly and recklessly that it amounted to a letter of resignation. Then he whored for his Virginia winery on the way out the door. Trump knew full well what he should have done, because he’d done it—grudgingly and badly—only a day earlier. But it left him feeling countermanded, corrected, submissive and weak, and those emotions just won’t do for an ego as needy and skin as thin as his. So he put id before country and lashed out, in a manner so patently wrong and transcendently ruinous that TV news shows had to go begging for Republican lawmakers to defend or even try to explain what he’d said. Those lawmakers wanted no part of him. The same went for the corporate chieftains he considers his peers. And for the generals he genuinely reveres. The heads of the Army, Navy, Air Force and Marines all went out of their way to issue statements condemning the hatred that Trump wouldn’t take on. A soft coup against a cuckoo: It confirmed how impotent Trump had become. Last Tuesday he “relinquished what presidents from Roosevelt to Reagan have regarded as a cardinal duty of their job: set a moral course to unify the nation,” wrote The Times’s Mark Landler, in what was correctly labeled a news analysis and not an opinion column. Landler’s assessment, echoed by countless others, was as unassailable as it was haunting, and it was prompted in part by Trump’s perverse response to a question that it’s hard to imagine another president being asked: Did he place the neo-Nazis in Charlottesville, Virginia, on the same “moral plane” as those who showed up to push back at them? “I’m not putting anybody on a moral plane,” Trump answered. Indeed, he wasn’t. And if you can’t put anybody on a moral plane, you can’t put yourself on Air Force One. Last Friday Trump finally dismissed his polarizing chief strategist, Steve Bannon. That’s excellent. And irrelevant. A president’s team doesn’t matter when he himself is this lost. In The Atlantic, under the headline “Donald Trump Is a Lame-Duck President,” David Graham wrote: “For most presidents, that comes in the last few months of a term. For Trump, it appears to have arrived early, just a few months into his term. The president did always brag that he was a fast learner.” In Axios, Mike Allen and Jim VandeHei noted that the president had “systematically damaged or destroyed his relationship with—well, almost every group or individual essential to success.” They then listed these “methodically alienated” constituencies: “the public”, “CEOs”,

“the intelligence community”, “every Democrat who could help him do a deal”, “world leaders”, “Europe”, “his own staff”. In The Times, Michael Shear, Maggie Haberman and Glenn Thrush reported that several of his top advisers couldn’t see how his presidency would recover. “Others expressed doubts about his capacity to do the job,” they added. Striking a similar note, Tennessee Sen. Bob Corker, who has not been among Trump’s frequent Republican critics, told reporters, “The president has not yet been able to demonstrate the stability nor some of the competence that he needs to demonstrate.” This is a question of more than competence. It’s a question of basic interest, and when I look back through the lens of the present wreckage at all that’s happened since Trump descended that escalator in Trump Tower in June 2015, I see clearly that he never in fact wanted or set out to be president, not as the position is conventionally or correctly defined. He revealed that repeatedly as he rejected the traditional rules and usual etiquette, refusing to release his tax returns, bragging about his penis size, feuding with the Muslim father of a fallen American soldier and electing puerility over poetry at nearly every meaningful moment. Because of his victories in the Republican primary and then the general election, his campaign was hailed for its tactical genius. But it was driven by, and tailored to, his emotional cravings. All that time on Twitter wasn’t principally about a direct connection to voters. It was a way to stare at an odometer of approval and monitor, in real time, how broadly his sentiments were being liked and shared. Applause. Greater brand exposure. A new layer of perks atop an existence already lavish with them. Utter saturation of Americans’ consciousness. These were his foremost goals. Governing wasn’t, and that was obvious in his haziness and dishonesty before Election Day and in his laziness and defiance after. He made clear that conflicts of interest didn’t trouble him, drawing constant attention to Trump properties and incessantly pointing out that nothing in the law of the land compelled him to divest his business interests. He opened the White House door wide to unmoored and unserious people, most recently Anthony Scaramucci, who, during his nanosecond as communications director, disparaged Bannon as someone engaged primarily in a limber act of self-gratification. That was on the record. Then Bannon disparaged his administration adversaries as being so threatened by him that they were “wetting themselves”. That was on the record, too. A president is supposed to fill important posts. Trump dallied. A president is supposed to be involved in lawmaking, but members of Congress who met with Trump about the repeal-and-replace of Obamacare were aghast at his ignorance of the legislation and of the legislative process itself. A president is supposed to safeguard the most sacred American institutions, repairing them if need be. Trump doesn’t respect them. He has sought to discredit and disempower the judiciary, the free press, the FBI, the Congressional Budget Office. He even managed to inject politics into, and pollute, the Boy Scouts. This is the course of a tyrant. I haven’t mentioned Russia. How astonishing that it can be left out and there’s still a surfeit to rue.

By Alberto Agra

PPP Lead Continued from A1

ndispensability. No grant, no project. Without this grant, concession, license, or vestiture of authority by government, the PSP cannot supply water, transmit power or operate a public market, charge fees and earn from the project. The PSP, on its own, cannot do these “public” projects without an express grant. Grantor. The relevant government agency—national government agency, government corporation or instrumentality, regulatory agency or local government unit—which, under its mandate, has the responsibility to pursue or regulate a particular PPP project, must accede and make such grant.

Grantee. In a PPP, the grantee is the winning PSP. After going through competition for the market, the PSP secures the award. Object. By reason of the grant, the grantee-PSP, under the terms of the PPP contract or grant instrument, is empowered and becomes responsible and accountable for

financing, designing, constructing and operating the project. Under a build-operate-transfer modality, the PSP assumes these, while in a joint venture, these functions are shared. Exclusivity. Depending on the sector, project, relevant law and terms of reference, the grantee-PSP, to the exclusion of others, could be vested the exclusive authority to provide the service. Period. The extent of the concession or grant of right normally coincides with the period of the effectivity of the PPP contract. At the end of the grant period, the grantee loses its right and the right returns to the source, i.e., the grantor. If there is a termination of the arrangement, then the grant is, likewise, canceled. Form. The grant of rights can be embodied in the main PPP contract or contained in a separate agreement, typically if another agency will be the grantee. The contract or license is the enabling instrument and proof of the grant.

Consideration. Government does not make the grant for free. Government expects payment of a grant or concession fee. This amount can be the floor or reserve price in a competitive process. The grant can also take the form of government participation in a PPP arrangement, like a joint venture, where the grantor-government gets, at the minimum, the equivalent value of the grant. Subject to regulation. The grant comes with a condition, payment included. The terms of that condition are intimately connected with the terms of the main PPP contract. A grant of rights does not result in the abdication of government’s power to regulate, set policy and determine the rates. For us consumers and end-users, we must make sure that the grant is not abused or unused or wasted. After all, the reason the government makes such a grant is for our own benefit.

Dawning of the new era in accountancy education Joel L. Tan-Torres

DEBIT CREDIT Part One

t started way back in 2014 when I first met Dr. Arnel Uy, the chairman of the Commission on Higher Education (CHED) and Board of Accountancy Technical Committee tasked to review the accountancy-education curriculum. We exchanged ideas on the directions and future that we envision for the accountancy education in the Philippines.

The profile of this sector is quite impressive. There are more than 500 schools offering the Bachelor of Science in Accountancy (BSA). Over 125,000 students enrol each year in the BSA. Over 21,000 BSA graduates take the Certified Public Accountant (CPA) Licensure Examination each year. More than 8,500 pass these Board Examinations to become CPAs each year. The BSA in its current form was prescribed by the CHED in January 2007 in CHED Memorandum Order (CMO) 03 Series of 2007. It has been over 10 years since the BSA was first offered. The past decade has seen the emergence of so

many developments affecting the business environment, in general, and the accountancy profession, in particular. So many changes and innovations have arisen in the areas of technology, governance, business models, industry expectations, competencies, etc. The BSA has been rendered obsolete as a result of these developments. Three years after my initial conversation (and many other discussions) with Dr. Arnel, the CHED released four CMOs on May 9. These are CMOs 27 to 30 Series of 2017. These CMOs prescribed the Philippine Accounting Education Framework (Paef) and the Program

The accountancy programs or degree courses that are prescribed in the CMOs include a revised BSA and three new accounting programs. The new BSA reduces the minimum number of academic units from the previous 210 to 173 units.

Standards and Guidelines (PSG) for four accountancy programs, namely: n BS in Accountancy (revised); n BS in Accounting Information System (ex BSAIS); n BS in Internal Audit (BSIA); and n BS in Management Accounting (BSMA). These will become effective in school year 2018-2019. The Paef provides the minimum standards and requirements for the accountancy-degree programs that can be offered by the higher education institutions. The Paef is consistent with the latest competency framework for professional accountants issued by the International Federation of Accountants through its International Education Standards (IES), including IES 2 (Technical Competence), IES 3 (Professional Skills), IES 4 (Professional values, ethics and attitudes) and IES 5 (Practical experience).

Child safety and school security By Conchita Cristal Villar

hen a child feels safe, that child is able to do all the things he loves, to explore and to try new things that capture his interest and imagination. Simply put, a safe and caring environment makes learning possible. Parents probably do not take school safety as a top priority anymore. Most of us are only concerned about the quality of teaching, proximity of the school and tuition-fee rates that we forget how important safety is inside and outside the school of our children. Let’s examine what security is really all about: The primary purpose of security is to protect your child from strangers and other unauthorized individuals. Experts encourage school ad-

ministrators to implement holistic strategies and tools that focus on improving overall school climate and teacher/student relationships in order to build a school culture that emphasizes security and self-control. This approach, rather than trying to police a culture dominated by cruelty and stress, might be the best prevention against school violence. Some security measures for school implementation include: Outdoor security: Outdoor play is critical for your child’s development. Therefore, a school must offer a secure environment for your child’s exploration and gross motor activity. A quality preschool will have a play area that does not allow a visitor or stranger (a workman or an unfamiliar adult picking up a child for the first time) access without staff accompaniment. The

playground should be fully enclosed by a fence of adequate height and strength, and gates that can be appropriately locked. Building Access: A quality school will have a system that allows them to grant or deny an individual access to the school, while, at the same time, empowering parents to access their child at any time. This is successfully accomplished through three factors. The first is a reception area that allows a director, school principal or another staff person the opportunity to greet, welcome and acknowledge the people entering the school. Another factor is a security system that monitors all access points to the building. This may be in the form of a card-access system, for example, or a log in book, which allows identified adults with a pass card to access their child after

Take the addiction out of smoking

magine a world in which teenagers who experiment with cigarettes never make a habit of smoking them. This is a future the Food and Drug Administration (FDA) envisions with its bold new plan to rid cigarettes of most of their nicotine, the substance that makes them so highly addictive. It’s an intriguing idea, potentially one of the best to come along in the decades-old fight against smoking—

which still kills almost half a million Americans a year. Making cigarettes nonaddictive is an old idea whose time has arrived, thanks to new supporting evidence and powers extended to the FDA. New studies have shown that smokers who try very-low-nicotine cigarettes do not, as feared, compensate by inhaling more deeply or smoking more cigarettes. On the contrary, in one study, after several

weeks of trying cigarettes containing 0.4 to 2.4 milligrams of nicotine (normal cigarettes have about 16 milligrams), subjects cut their daily consumption significantly—with only minimal feelings of withdrawal. For brand-new smokers, better still, such cigarettes could prevent addiction before it starts. While it’s easy enough for cigarette makers to lower nicotine content—since

The Paef uses a learner-centered and outcome-based approach that is geared toward addressing the requirements of the profession and various stakeholders. The accountancy programs or degree courses that are prescribed in the CMOs include a revised BSA and three new accounting programs. The new BSA reduces the minimum number of academic units from the previous 210 to 173 units. The three other degree courses of BSAIS, BSMA and BSIA institutionalize the accountancy programs that will address specialized requirements of the industry and profession. With these developments, we are now seeing the dawning of a new and exciting era in the accountancy education in the Philippines. (To be continued)

Chairman Joel L. Tan-Torres is the chairman of the Professional Regulatory Board of Accountancy. He is a Certified Public Accountant who placed No. 1 in the May 1979 CPA Board Examinations. He is concurrently a tax partner of Reyes Tacandong & Co. CPAs. He was the former commissioner of the Bureau of Internal Revenue from 2009 to 2010. This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@gmail.com.

being greeted, but makes sure that a visitor or stranger can enter the preschool only after being identified and accompanied by a staff member. In addition, all exterior doors should be locked with no access from the outside, except with a key. Classroom access: Full-time monitoring of a classroom greatly adds to a family’s peace of mind. A quality school will have one or more ways for a parent, grandparent or guardian to observe classroom activity. Above all, school administrators should make sure that their staff are well trained, know how to respond to different emergency concerns and are up-to-date with policies and security practices of the school. The author is Teacher 3 in Pattao National High School in Buguey, Cagayan.

the mid-20th century, they’ve had the technology to set whatever level they want—the FDA was unable to require lower levels until Congress passed the 2009 Tobacco Control Act. Even with this authority, the FDA is expected to face legal resistance. For that reason, lowering the nicotine in cigarettes is going to take a while. That’s a shame, but all the more reason to get started right away. Bloomberg View

2nd Front Page BusinessMirror

A16 Monday, August 21, 2017

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PHL urged to use differential subsidization in sugary drinks T

By Jasper Emmanuel Y. Arcalas

@jearcalas

he government could consider imposing a differential-subsidization scheme as a tax measure on sugarsweetened beverages (SSBs) to reduce the risks of Filipinos’ becoming diabetic, according to renowned endocrinologist.

Dr. Robert Lustig, pediatrics professor at University of California San Francisco (UCSF), said the government could explore putting a higher levy on SSBs, with the collection from the sales of sugary drinks to be channeled to subsidies for drinking water. In this tax scheme, Lustig said, the government places a “win-win” situation for both Filipinos and the beverage makers. “Therefore, people will be able to pay less for water and move toward water, which is good for them as opposed to sugar-based soda, which is bad for them. People will nudge toward water and away from soda because it is expensive,” Lustig told the BusinessMirror on the sidelines of a news conference recently in Makati City. “The beverage makers wouldn’t care because they are the one also making the water. So, they will sell more water and the grocery stores

will still make money. Because what do they care? Sales.” Lustig added. Lustig, who is also an affiliate faculty of UCSF’s Institute for Health Policy Studies, said differential subsidization is a policy that they recommend to countries and governments that are in the midst of imposing tax measures on sugarbased products and other healthrisking commodities. “I think it would be a good idea, so that would be my suggestion,” he said. “I think it could [work] for [the Philippines] if the government supports it. I think it is very doable.” Lustig said Nordic countries, including Sweden, Denmark and Norway, have imposed a differential-subsidization scheme to curb the increasing number of alcoholics in their respective countries. The three countries collectively adopted two pieces of legislation: first, nationalizing the liquor stores

Dr. Robert Lustig, pediatrics professor at University of California San Francisco, speaks at a recent forum organized by the Philippine Society of Endocrinology and Metabolism and United Laboratories Inc.

resulting in same products sold at the same amount; second, taxing high-alcohol spirits and subsidizing low-alcohol beer with the income from high-alcohol spirits, according to Lustig. “What they were able to do was to nudge the public away from the hard spirits toward the low-alcohol beer, thus, reducing alcohol consumption. They were able to get people to reduce their alcohol consumption, hospitalization went down, car accidents went down, cirrhosis of the liver went down and economic productivity went up,” he said. “And those policies are still in placed today.” Under the proposed compre-

hensive tax-reform package of the Department of Finance, SSBs—including soft drinks, soda, flavoredcarbonated or noncarbonated beverages, fruit drinks, sports drinks, sweetened tea, coffee drinks and energy drinks, among others— would be taxed P10 per liter. According to Finance Undersecretary Karl Kendrick T. Chua, a tax on SSBs at P10 per liter is a health measure helping more Filipinos to switch to eating healthier products and for the manufacturers to create healthier food and beverage alternatives. “Because this is a health measure, the objective really is to reduce consumption. Studies have

shown that a 20-percent increase in price is sufficient or necessary to reduce significantly that consumption,” Chua said. However, the Beverage Industry Association of the Philippines said the proposed taxes would only serve to unduly burden “those who can least afford such an increase, while achieving nothing of real significance to address the health angle it purports to target”. Lustig said measures, such as taxation, dietary guidelines and blue laws are imposed to curb the ill effects caused by substances— parituclarly hedonic ones, including cocaine, alcohol and even sugar—to the society. Lustig added that among these measures, taxation is the easiest one to impose because it doesn’t cost much, but, at the same time, it is usually opposed by consumers, saying that it is “regressive” in nature. “People don’t want to usurp the power of the market, but in case of hedonic substance, you have to. There’s taxes in tobacco, in alcohol, in all sorts that are bad for society‚ sin taxes if you will,” he said. “Sugar makes the same criteria, therefore, we need to think about what makes the most sense. People say taxes are regressive against the poor, but diabetes is more regressive against the poor—the cost of taking care of diabetes [patients] far outstrips the cost of taxes,” he added. Lustig said the imposition of taxes on SSBs is now a global legislative debate, as countries like

United Kingdom, Australia, Saudi Arabia, South Africa are mulling over such schemes. Lustig said the Philippines is consuming approximately 70 grams to 75 grams of sugar per day, which is almost triple the 25 grams to 37.5 grams per day recommended consumption by the World Health Organization. “Here in the Philippines, you are just behind us in terms of prevalence of diabetes. You now have 7.2-percent diabetes rate and 30-percent obesity rate in adults,” he said. “You are a developing country, we are a developed country. We cannot afford our health-care crisis, which means you as developing country, cannot really afford this health-care crisis which is about to engulf you,” he added. Citing data from the Eighth Philippine Natural Nutrition Survey (PNNS), Health Delivery System Inc. Medical Director Robert Castro said the country’s diabetes prevalence was pegged at 7 percent in 2013. Castro added that 3 of 10 Filipinos are overweight, based on the PNNS. “The prevalence of malnourished adults with age more than 20 years old since 1993 to 2013 has rapidly increased, from 16.6 percent in 1993 to 31.1 percent in 2013,” Castro said. Lustig visited the country to meet with some 700 Filipino medical practitioners, with whom he shared findings on several studies on fats, sugars and metabolic syndrome, organized by the Philippine Society of Endocrinology and Metabolism and the United Laboratories Inc.

Manila seeks $771.3-M fresh ADB financing

Visas on arrival for Chinese to T lift PHL tourism

By Cai U. Ordinario

By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

HE Duterte administration’s new program allowing Chinese citizens to get visas on arrival is seen lifting the number of foreign visitor arrivals in the Philippines. In a news statement, the Department of Tourism (DOT) also said the visa-on-arrival program may catapult China as a top source market of tourists. Tourism Secretar y Wanda Corazon T. Teo added that this visa program would also attract more Chinese investors to the Philippines. “We also believe this will serve as an incentive to Chinese guests who may be prospective investors wanting to prove that the country is not only a safe haven for tourists, but also a lucrative business location.” As this developed, the DOT chief recently committed to lawmakers that the agency will mount an “all-out promotion campaign” to attract more foreign visitors to the Philippines. During a congressional hearing on the DOT’s budget for 2018 on August 9, legislators said they would approve a P1-billion marketing fund to boost the agency’s promotional efforts abroad. “Amid setbacks and mounting challenges, tourist arrivals [in the

first half of the year] are way up. Beefing up the DOT’s war chest [with a P1-billion marketing fund] would go a long way in boosting our branding campaign that will be at par with those of our Asian neighbors,” Teo stressed. The DOT has asked Congress to approve a P3.38-billion budget for 2018, to be able increase foreign visitor arrivals to 7.4 million for said year. Foreign visitor receipts in 2018 are targeted to rise to P564 billion in 2018. Meanwhile, Teo expressed her appreciation to the Department of Justice for granting the DOT’s long-standing proposal to ease the visa rules and requirements for key tourist markets, especially China. She admitted to the BusinessM irror, however, that the visa-on-arrival program was not reciprocal for Filipinos, who still have to follow the visa requirements for visiting China. This year about 6.5 million foreign tourists are targeted to arrive in the Philippines, but with the Beijing government’s commitment to send 1 million tourists to the country, this number is projected to reach some 7 million. Data from the DOT showed arrivals from China increased by 33.4 percent to 454,962 in the first half of 2017. Chinese arrivals accounted for some 13.6 percent of the total foreign tourists which See “Visas,” A2

@cuo_bm

he Philippines has proposed some $771.3 million worth of projects for Asian Development Bank (ADB) financing as of the first semester of 2017. The pipeline included various loan-, technical assistance- and grant-funded projects for infrastructure, finance, education, employment and others. The project with the largest proposed funding is the Secondary Education Support Program. The Philippine government is seeking a $300-million loan from the ADB for the project. The project targets to refine the secondary-education curriculum; upgrade and maintain secondaryeducation infrastructure; reform the junior high-school financing system; and strengthen the management of the secondaryeducation sector. “[The outcome is a] secondaryeducation system that equips youth

Tuna catchers. . . Continued from A1

Commercial fishing is classified according to gross tonnage or fishing capacity of the vessels used. Small-scale commercial fishing is fishing with passive or active gear utilizing fishing vessels of 3.1 gross tons (GT) to 20 GT. Mediumscale commercial fishing utilizes active gears and vessels of 20.1 GT to 150 GT. Large-scale commercial fishing employs active gears and vessels of more than 150 GT. The Philippines is a signatory to the Convention on the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific Ocean and is a party to various regional fisheries-

with the essential competencies and skills for lifelong learning and employability,” the ADB stated in the project’s data sheet. The Philippines is also asking for a $200-million loan from the ADB for the Enhancing Rural Enterprise and Rural Employment Project and a $100-million loan each for the Infrastructure Preparation and Innovation Facility and Metro Manila Wastewater Improvement Project (formerly Metro Manila Water and Sanitation Development Project). Two projects, the Strengthening Public-Private Partnerships in the Philippines (Phase 2) and the Empowering Bangsamoro Communities Through Adult Literacy and Productivity Enhancement Programs, which are proposed for technical assistance (TA) and grant funding, respectively, do not have cost estimates as of press time. Meanwhile, as of June 2017, the Manila-based multilateral development bank has approved $305 million worth of projects.

The two approved projects were the Facilitating Youth School-toWork Transition Program (subprogram 1) and the Strengthening Infrastructure Capacity and Innovation for Inclusive Growth. The ADB approved a $300-million loan for the Facilitating Youth School-to-Work Transition Program (subprogram 1), which aims to help the government shorten young Filipinos’ schoolto-work transition. The project will help in improving youth employment rates, as well as enhance the long-term partnership between the ADB and the government. The bank also approved a $5-million technical assistance for the Strengthening Infrastructure Capacity and Innovation for Inclusive Growth project. “The transaction TA is split into two phases: Phase 1 will ensure smooth and timely start-up of the proposed project and Phase 2 will implement a project management and monitoring system,” the ADB said.

The TA will directly support the government and the proposed project by screening and prioritizing projects for inclusion and enhancing the current management and monitoring system and structures. It will also help identify key specialist support to augment capacity in the Department of Finance, National Economic and Development Authority, Department of Public Works and Highways and Department of Transportation, and support the implementation of a project management and monitoring system as part of the “Build, Build, Build” program. The ADB’s future assistance to the Philippines is closely aligned with the long-term vision of the Philippines toward 2040 (Ambisyon Natin 2040), as well as the Philippine Development Plan for 2017-2022. The ADB is considered one of the country’s largest sources of official development assistance, with average annual lending of $745 million in the past 10 years.

management organizations (RFMOs), such as the Western Central Pacific Fisheries Commission (WCPFC) and other Tuna RFMOs. As such, the Philippines is compelled to implement measures, such as vesselmonitoring systems (VMS), in accordance with the convention and resolutions of RFMOs. Section 2 of the amended Fisheries Code states that no commercial vessel shall engage in fishing activity without the vessel-monitoring measures, which apply to licensed Philippineflagged fishing vessels operating within and outside Philippine waters. On the other hand, the vessel-monitoring system shall apply to all licensed Philippineflagged commercial fishing vessels authorized by the BFAR to operate in the high seas and those fishing vessels with access rights to fish in other countries’ exclusive economic zones.

The VMS shall be implemented within one year for 50 GT to 99 GT commercial fishing vessels, and within two years for 30 GT to 49 GT. For vessels weighing 3.1 GT to less than 30 GT, the nonsatellite or satellite VMM shall be implemented upon registration or renewal of license within three years from the effectively of the proposed Fisheries Administrative Order. All vessels weighing 100 GT and above must have installed a corresponding VMS by the date of affectivity of the Fisheries Administrative Order. Basically, a VMS makes use of satellite-based vesselmonitoring device or transponder, while VMM can either use Internet-based or radiofrequency based transponders. Both VMS and VMM will allow the BFAR and the operators of commercial fishing vessels to

track and pinpoint the location of the vessels. During the forum, the BFAR representatives led by DA Region 12-Regional Director Usop Pendaliday Jr. and BFAR Fisheries Management Information Center (FMIC) OIC Zaldy P. Perez explained the importance of VMM and VMS. The installation of a vessel-monitoring device or transponder would enhance monitoring of fishing operations for fisheries management. It will also enhance law enforcement to regulate the output of the fisheries sector and achieve long-term resource sustainability. It also aims to track fishing behavior for scientific research and data, establish a system that will facilitate law enforcement, and aid in case building and prosecution of fisheries law violations, gather data on fishing effort as basis See “Tuna catchers,” A2