Businessmirror august 30, 2017

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Climate change: Are we there yet? By Jonathan L. Mayuga

@jonlmayuga

Conclusion

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OR Filipino environmentalist Rodne R. Galicha, most of the global warming seen today is caused by carbon pollution from fossil fuels. Other important contributors include deforestation; transportation; agriculture, such as crops and livestock; and industrial processes, added Galicha, the Philippine manager of the Climate Reality Project. “Climate change is real is when the hot-

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test year is the year you are in. This year may not beat out last year, but it will still be in the top 10 because the statistical probability has shifted,” he said. “[The year] 2016 was the 40th year in a row where temperatures were hotter than 20th-century average.” According to the US National Oceanic and Atmospheric Administration and the National Aeronautic and Space Administration, the year 2016 had a global temperature 1.69 degrees Fahrenheit above the 20th-century average and 0.07 degrees Fahrenheit above Continued on A2

This September 25, 2009, file photo shows men towing a vehicle on a makeshift flotation structure a day after Typhoon Ondoy (international code name Ketsana) hit the Philippine capital. According to Filipino environmentalist Rodne R. Galicha, “With seas rising, global heat records falling and storms becoming more and more devastating, the reality of climate change has never been clearer.” NONIE REYES

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Wednesday, August 30, 2017 Vol. 12 No. 321

Solons hit backdoor attempt to liberalize public utilities

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By Jovee Marie N. dela Cruz

@joveemarie

embers of the so-called Magnificent 7 in the House of Representatives on Tuesday vowed to challenge the constitutionality of House Bill (HB) 5828, which sets the statutory definition of public utilities, once the priority measure is enacted into law. The bill already hurdled second reading on Tuesday night. The lower chamber is expected to approve the measure on third and final reading next week. In a news conference, Rep. Edcel

C. Lagman of of the First District of Albay said if the lower chamber wants to define a public utility, it should amend the economic provisions of the Constitution, either by a constituent assembly or Constitutional convention.

“It [HB 5828] is actually a subterfuge to allow foreigners to own public-utility enterprises without complying with the citizenship requirement imposed by the Constitution,” he said. “[The passage of the bill] is prioritized by the House leadership and they have the supermajority.

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HB 5828 The priority measure that defines public utilities, in effect amending the Constitution, according to lawmakers

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free fire

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ARIS, Goa, Malaya, London—there’s no point in being anywhere else,” wrote Graham Greene, author of The Quiet American, about the CIA in Vietnam. He was obsessed with living dangerously in perilous places—Malaya during the Emergency, Haiti under Papa Doc, Cuba when Castro launched its liberation, and Ho Chi Minh when he did the same in Vietnam. War correspondent Anthony Lloyd entitled his 1999 memoir of the Bosnian conflict, My War Gone By, I Miss It So. And Lara Pawson called hers, This is the Place To Be. She covered the Angolan Civil War. “It was an incredibly intense experience,” she wrote. “I wanted a repeat, like the absurd sensation you get when you take class-A drugs.” Continued on A10

See “Solons,” A2

Peza awaits OP most trusted govt sub-institution Brazil’s offer to sell Palace nod dairy cattle to PHL for Xianglu’s stands–agri minister investments A By Rosabell C. Toledo Correspondent

By Catherine N. Pillas @c_pillas29

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he Philippine Economic Zone Authority (Peza) will let Malacañang decide on the fate of two proposed economic zones reportedly with links to an investor described as a “Taiwanese fugitive” by Taipei. “What the Peza board approves is the prequalification clearance. We give this to an ecozone developer whose project has qualified for registration, is entitled to incentives, but will still have to comply with requirements for a presidential proclamation. In other words, the approval is with the President,” Peza Director General Charito B. Plaza said. The projects in question are the Philippine-Chinese Industrial Economic Zone (PCIEZ) to be built in Pangasinan, and the tourism-IT building intended to be placed in Manila. The project proponent will apply for Peza registration See “Peza,” A12

round 82 percent of Filipinos indicated that they trust the Office of the President (OP), making it the most-trusted government subinstitution this year, according to the latest nationwide Philippine Trust Index (PTI) launched at the Maybank Performing Arts Center in Taguig City on Tuesday. Of the 82 percent, 43 percent said they placed “moderate trust” on the OP. The President Duterteled OP has the “extreme trust” of 39 percent of the population, an unprecedented increase of 24 percentage points from the 15 percent that said they had “extreme trust” on the Aquino-led OP in 2015. The OP is followed by Local Government Units with PTI of 78 percent. The Senate, House of Representatives, Supreme Court and Regional Trial Courts all earned 67 percent overall trust ratings. About 65 percent put their trust in the Cabinet. Having the lowest trust rating in 2017 is the Office

PESO exchange rates n US 51.0950

By Jasper Emmanuel Y. Arcalas

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Moderator Quintin Pastrana (left), EON Corporate Affairs director, facilitates the open-forum segment of the launch of the Philippine Trust Index, as panelists (from left) Roby Alampay, news editor, Bloomberg TV Philippines; Assistant Secretary Kris Ablan of the Policy and Legislative Affairs, Presidential Communications Operations Office; Dr. Clarissa David, professor at UP Diliman College of Mass Communications; Farah Ali Ghodsinia, student, UP College of Law; and Lain Twine, vice chairman of Edelman Asia Pacific, Middle East and Africa, field questions from the audience. ROY DOMINGO

of the Vice President (OVP), earning only 57 percent trust levels from the population, of whom only 17 percent placed “extreme trust” on the OVP. Col le c t ive ly, t he E xe c ut ive branch is the most trusted, while the Legislative branch is the least trusted in the government.

Meanwhile, 93 percent to 95 percent of the respondents considered government agencies providing social services, such as the Philippine Health Insurance Corp., and Social Security System, and the Department of Education to be the most trustworthy. See “OP,” A2

MAGGI: “We recently sent back questionnaires to the Philippines and we are expecting that the Philippines will send a mission here to fine-tune remaining issues.”

@jearcalas

ão Paulo, Brazil—Brasilia remains keen on selling dairy cattle to Manila as part of efforts to boost dairy production in the Philippines, according to Brazilian Minister of Agriculture, Livestock and Supply Blairo Maggi. “Brazil is still interested. In fact, we recently sent back questionnaires to the Philippines and we are expecting that the Philippines will send a mission here to fine-tune remaining issues,” Maggi told foreign journalists in a news briefing here on Monday. “So, yes, we remain interested in selling live cattle because it will help to regulate their market.” Maggi said Agriculture Secretary Emmanuel F. Piñol showed enthusiasm in importing a dairy cattle breed called “Girolando”

during their meeting in July in Rome, Italy. “In July I was in an FAO [Food and Agriculture Organization] meeting and the Philippine minister showed a great deal of interest in dairy cattle,” he said. “As a result of the Philippines’s climate, which is similar to Brazil’s tropical climate, a dairy cattle introduced in the Midwest of Brazil called Girolando breed [could be exported to Philippines]. So, he [Piñol] was interested in seeing this type of particular breed.” See “Brazil,” A2

n japan 0.4677 n UK 66.0914 n HK 6.5311 n CHINA 7.7358 n singapore 37.7531 n australia 40.6818 n EU 61.2169 n SAUDI arabia 13.6250

Source: BSP (29 August 2017 )

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A2 Wednesday, August 30, 2017

Climate change: Are we there yet? Continued from A1

the previous record set in 2015. “Models show that if humaninduced 29 climate change factors were taken out of the models, the amount of warming that occurred in 2016 would have a one-in-amillion odds of occurring due to natural causes,” he said.

US withdrawal

THE Climate Reality Project (CRP) was the first to react to the decision of the US to withdraw from the Paris Agreement. The CRP, a nonprofit organization involved in education and advocacy related to climate change, was quick to point out that other countries should stand together to affirm their commitment. “It may be disturbing for the US to leave the Paris Agreement, but the rest of the world [is] standing up. Grassroots communities shall hold their arms together, and vulnerable countries like the Philippines shall continue demanding for climate justice,” the CRP official statement said. “While urging our own governments to sustain our commitments to reduce greenhouse gas emissions, our villages, local governments and communities are beginning to take drastic actions to address climate crisis bottom-up.” Galicha is urging unity, learn “from the errors of the past”, address “the needs of the present and face the challenges of the future, within the carrying capacity of nature, without compromising the capacity of the next generations to survive”.

Right track

APPARENTLY, the Philippines is on the right track in addressing climate change. Chuck Baclagon

OP. . .

Continued from A1

Howe ver, t he y were more skeptical about agencies they do not encounter regularly and are, therefore, least familiar to them: the Department of Finance (50percent overall trust level), the Development Bank of the Philippines (DBM), and the National Economic and Development Authority (40 percent). As a whole, the government sector is the biggest trust gainer of six key institutions identified by the proprietary research of the EON communications group (the Church, academe, the government, media, the business sector and non-governmental organizations (NGOs). The study revealed 80 percent of Filipinos in 2017 trust the government as a collective institution—a staggering

of 350.org, a global climate-campaigning organization, told the BusinessMirror the overwhelming positive response to climate action that led to the signing of the Paris Agreement is a good start despite shortcomings of the deal. “But all countries that ratified the agreement must follow through on implementing the nationally determined contributions,” he said. “The standing test of climate commitment for all governments, including ours, is to pursue an energy-policy direction that keeps fossil fuels in the ground and hastens the transition to 100-percent renewable energy.” According to Baclagon, the ratification of the Paris Agreement puts the Philippines in the right direction because it opens the potential not just for renewables and the bigger energy sector but also for the overall economy. “With the Philippines being rated as among the most climate vulnerable countries worldwide, our status as a country that ratified the agreement advances the voice of those who should be heard the loudest.

Challenges remain

HOWEVER, Baclagon said there remains the challenge of pursuing a renewable-energy path for the Philippines. What makes it [things] more complicated is given that there were positive prospects that happened last year, like the Climate Change Commission’s resolution for a “comprehensive review” of the government’s energy policy, Baclagon added. He said the latter is expected to reshape the country’s power-development plans and replace coal with renewable and indigenous sources of energy. increase of 30 percentage points, from 50 percent in 2015. Furthermore, extreme trust in the government almost tripled —from 12 percent in 2015 to 29 percent in 2017—an increase of 17 percentage points.

‘A generally more trusting public’ Another huge gainer in the 2017 PTI is the business sector, with an increase of 20 percentage points to 75 percent in 2017, from 55 percent in 2015. For business institutions, public sentiments point to the rise of extreme trust, compared to two years ago. This year the Healthcare, Food and Beverage, Pharmaceuticals, Energy, and Telecommunications industries are regarded as highly trustworthy by 40 percent, 36 percent, 35 percent and 32 percent of Filipinos,

Alongside the energy-policy review, Baclagon noted, was the energy audit by the Department of Env ironment and Natura l Resources, which intended to halt new projects and review the environmental permits filed by coal companies. “However, the results of such initiatives are yet to be seen.” He cited as example the announcement by the Department of Energy last March of several coal projects that are targeted for commissioning and commercial operations this year.

What should be done

BACLAGON said the sobering reality is that there are other battles that need to be won outside the signing of the Paris Agreement. “We are working on all fronts to mobilize and invest toward a low-carbon, resilient and sustainable future that will keep global warming well below 2 degrees Celsius, if not within the aspirational target of 1.5 degrees Celsius,” he said. “And this requires halting all new fossil-fuel development now. Should the construction of all coal plants in the pipeline push through, the Philippines would be locked into 20 to 40 years of coal dependence.” Baclagon reiterated “the need for everyone to do their part at reducing their individual carbon footprint through lifestyle changes that lessen the demand for more energy to fuel our collective consumption of resources”. “The climate crisis has an individual and social dimension that we should deal with,” he said. “Moreover we should also recognize that both the social and personal are arenas of struggle that must be won.” respectively. On the far end are Mining (9 percent), Alcohol and Tobacco (11 percent), Advertising and PR (16 percent), and Legal Industries (9 percent). Despite this, all business industries fared better in their trust ratings in 2017 than in 2015, with the exception of the Water and Sanitation industry, which remained at 29 percent. These figures reaffirm that Filipinos respond favorably to brands that they repeatedly interact with as employees or customers. This is why the most trusted brands are those that come from manufacturing (36 percent), retail (33 percent) and restaurants/fast-food chains (19 percent). Trust in NGOs and academe also rose by 18 and 6 percentage points, respectively, while trust in the media and the Church did not move as much. Trust in academe rose from 87 percent in 2015 to 93 percent in

Sustainable future

GALICHA, for his part, said stopping climate change is the challenge of our time. Still, he cited having the Paris Agreement provides the Philippines the tools to deal with it. “ The sustainable future we want is finally in our hands. With seas rising, global heat records falling and storms becoming more and more devastating, the reality of climate change has never been clearer,” Galicha said. “But with clean-energy solutions like wind and solar getting more affordable, batteries getting better and buildings becoming more efficient every year, neither has the way forward.” “The good news doesn’t end there,” he added. Galicha said with 195 countries that acquiesced to the Paris Agreement to cut greenhouse-gas emissions planetwide, “the world is united in working for a safe and sustainable future with net zero carbon emissions by the second half of this century.” “In formally approving the Paris Agreement, the government of the Philippines has assured that the voices of vulnerable peoples will always be heard.” Galicha added the Paris Agreement is incredibly important for island nations like the Philippines, as deadly typhoons become more frequent and dangerous sealevel rise continues to threaten Filipino families and their abilities to live happy, healthy and comfortable lives. “The government must do all it can to protect this most basic right, and approving the Paris Agreement ensures that we have the entire world in our corner,” he stressed. 2017, while NGOs experienced an increase from 41 percent to 59 percent. While overall trust in the media gained 5 percentage points (73 percent to 78 percent), extreme trust went down by 4 percentage points—from 41 percent in 2015 to 59 percent in 2017. Notably, despite the proliferation of social-media use and citizen journalism among Filipinos, the general public still trusts traditional media channels—television networks (89 percent), radio stations (85 percent) and newspapers (75 percent)—more than social-media sites. Of the 49 percent of Filipinos who have access to social media, 87 percent believe in the truthfulness of social-media sites, while only 73 percent believe in traditional media. Those who trust socialmedia sites tend to believe organic and personal posts by friends and family, and are more doubtful of posts from social-media influencers and strangers. The Church, while still the Filipinos’ most trusted institution at 93 percent, suffered a 7-percentagepoint decrease in “extreme trust” from 73 percent in 2015 to 66 percent in 2017, albeit registering a single-point trust increase overall. The fifth PTI were culled from the responses of 1,200 Filipinos aged 18 and above coming from urban and rural areas all over the country. The study was conducted from March to April 2017. EON Chairman and Chief Executive Junie del Mundo expressed his confidence, that these respondents are highly representative of the nation as a whole, and maintained the importance and uniqueness of the PTI as a trust-discernment study. “Unlike other survey bodies, PTI focuses on institutions, not individuals. The PTI shows us the promise and opportunities in Filipinos’ rising trust in our institutions today. This means that leaders in these key sectors have greater influence but should harness this to help positively improve the daily lives of people in concrete ways,” del Mundo said.

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Brazil. . .

Continued from A1

The Brazilian agriculture minister said they are also open to exporting other genetic materials, as well as other breeds of cattle, such as those used for meat production. “Brazil has a number of markets that are open for slaughter cattle and open for breeding not just for [live] cows but also genetic materials,” Maggi said. “Brazil has this interest and each mission we carried out we present our portfolio to show our interests to send our livestock overseas.” In July Piñol said the Brazilian government has pledged to support Manila’s goal of hiking cattle and dairy production. Piñol said he met with his Brazilian counterparts in a bilateral meeting in Rome, Italy, on the sidelines of the 40th session of the United Nations’ FAO Conference. “Brazilian State Minister for Agriculture Blairo [Maggi], in a bilateral meeting with the Philippine delegation, said his country is willing to share outstanding breeds of cattle, especially the proven Girolando, which is a cross-breed of the Brazilian Gyr and Holstein, and is ideal both for milk and meat production in tropical climates,” Piñol said in a Facebook post dated July 7. “Minister [Maggi] also pledged technical support for the Philippine livestock program, including the development of forage.” This makes Brazil the fourth nation to manifest support for the country’s livestock and dairy program following New Zealand, Israel and Argentina, according to Piñol. He said the first batch of Brazilian Girolandos will arrive in 2019 and will be kept in the community multiplier farms established by the DA. “The first batch of cattle from Brazil will be the ready-to-breed females, or heifers, and will be impregnated using fertilized embryos, which could come from Argentina and Brazil,” Piñol said. The importation of Girolando cattle breeds from Brazil is part of the DA’s plan to ramp up local milk production to meet at least 10 percent of annual domestic requirement by 2022 and reduce the country’s reliance on imports. “The long-neglected dairy and livestock sectors will receive a boost when the DA starts a five-year master plan to empower backyard hog raisers, increase the national cattle population and raise milk production from 1 percent to 10 percent of the national requirement starting 2018,” Piñol said. “The five-year Road Map for Livestock and Dairy, which is now being crafted by the DA, will bring together all of the agencies under the department and focus their resources on the declared targets,” he added. Under the road map, identified

Solons. . .

Continued from A1

“I don’t know whether it will pass the Senate, but once it becomes a law, then it is right to be challenged before the High Court,” he said. Under the 1987 Constitution, public utilities must be owned by Filipino citizens or by corporations, partnerships or associations, where not less than 60 percent of the capital stock is owned by Filipino citizens. Lagman said no less than House Committee on Economic Affairs Chairman Arthur Yap of Bohol has admitted during the deliberations that once House Bill (HB) 5828 is enacted into law, foreigners will be allowed to own public utilities. “In fact, HB 5828 has deleted the requisite Filipino-ownership requirement of public utilities under the Public Service Act, which is identical with Section 11 of Article XII of the Constitution,” he added. In its definition of a public utility, Lagman said HB 5828 deliberately deleted the concept of ownership and limited the definition to the operation, management and control of public utilities, even if there can be no operation, management or control without an owner. He added that the bill also deletes from the enumeration of public utilities traditional types, like common carriers and telecommunications companies, which are presently operating with controlling Filipino ownership. “Another problem with the bill is that traditional public utilities have been deleted from the enumeration of public utilities. Since time immemorial, common carriers were considered as public utilities, and also telecommunications companies were also excluded. If these companies are not included in the enumeration of public utilities, again they can be owned and operated by foreigners,” the lawmaker said. In a separate interview, Party-list Rep. Tom Villarin of Akbayan said the

participating villages or towns will be designated as community multiplier farms, which will be owned and managed by a group of farmers, according to Piñol. He said every community-multiplier farm will have a minimum of 100 heifers and will serve as a breeding farm, a dairy-production area and a learning center. “I have asked technical people to design a shed that will utilize solar technology to provide power and water,” Piñol said. “Under the scheme, whatever earnings are made will be shared among the members of the community multiplier farms and the income could be generated from the sale of the calves and the milk production.” To jump-start the program, the DA chief said the government will establish community-multiplier farms in at least 1,000 communities by 2019, particularly in areas where forage and feed materials, such as sugarcane and corn, are abundant. “That would mean 100,000 heifers, which, at an average birthing rate of 70 percent, would produce about 70,000 calves, which would also be ready for breeding by 2021,” Piñol said. “The 70,000 heifers, which would produce calves, are estimated to produce an average of 5 liters of milk each every day for a national production of 350,000 liters,” he added. Piñol said the DA would set up an additional 1,000 community-multiplier farms by 2020 and another 1,000 by 2021. “To ensure market for the milk production, the DA will collaborate with the departments of Health, Social Welfare and Development and Education to start a milk-feeding program,” he said. Data from the Philippine Statistics Authority showed that the country’s cattle population, as of January 1, was pegged at 2.553 million heads, slightly lower than the 2.547 million heads recorded a year ago. Last year the country’s local milk production grew 3.78 percent to 21,160 metric tons (MT), from 20,390 MT recorded in 2015, according to the latest report of the National Dairy Administration (NDA). The NDA, an attached agency of the DA, attributed the expansion to the increase in the number of the milk-producing herd. Despite this, however, the share of local milk output to the country’s total supply shrank, while that of imports went up. The Philippines bought a total of 65,600 MT of ready-to-drink liquid milk from abroad last year, 53.77 percent higher than the 42,660 MT imported in 2015. On an annual basis, government data showed that Philippine dairy imports expanded by 54 percent to 2.77 million MT in 2016. Dairy products are currently the Philippines’s third-largest agricultural import after wheat and soybean meal. bill , if enacted into law, will be unconstitutional because there is a restriction in the Constitution providing limitation to foreign ownership. “Their [authors of the measures] basis [is that the government] does not allow competition coming from foreign companies . . .because of the restriction in foreign ownership. But the problem is they are opening up a public utility for foreign companies. If they allow this, local companies can be sold eventually to foreign corporations; that’s a big issue,” he added. Under HB 5828, public utility refers to a person that operates, manages and control for public use distribution of electricity as defined by Electric Power Industry Reform Act (Epira), transmission of electricity as defined by Epira, and water pipeline distribution system or sewerage pipeline system as defined by the act creating the Metropolitan Waterworks and Sewerage System. The Epira defines distribution of electricity as the conveyance of electric power by a distribution utility through its distribution system, while transmission of electricity is defined as the conveyance of electricity through the highvoltage backbone system. The bill said no other person, business or service shall be deemed a public utility under the measure unless otherwise provided by law. The measure said the National Economic and Development Authority secretariat, with the Philippine Competition Commission, shall recommend to Congress the classification of a person, business or service as a public utility. It said with the exception of those enumerated in the act, no public service shall operate in the Philippines without possessing a valid and subsisting franchise, certificate, or any other appropriate form of authorization for the operation of a public service as the case may be, to the effect that the operation of said service and the authorization to do business will promote the public interests in a proper and suitable manner.

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Editor: Vittorio V. Vitug • Wednesday, August 30, 2017 A3

House panel readies ‘stiff’ punishment for Faeldon

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By Jovee Marie N. dela Cruz @joveemarie & Joel R. San Juan @jrsanjuan1573

he chairman of the House Committee on Dangerous Drugs on Tuesday said the lower chamber is now eyeing the recommendation of the filing of criminal complaint punishable by life imprisonment to death against former Customs Commissioner Nicanor E. Faeldon for allegedly ordering the planting of evidence in an unauthorized “controlled-delivery scenario” during the P6.4-billion drug raid in Valenzuela City in May. Committee chairman and Rep. Robert Ace S. Barbers of the Second District of Surigao del Norte said Faeldon could also be faulted for conducting the raid without a search warrant and for contaminating the evidence when he ordered to pry open the seized drugs from its metal cylinders without prior coordination with the Philippine Drug Enforcement Agency (PDEA). The lawmaker said the final committee report of his panel is expected to be released today (Wednesday), where it will recommend the filing

of administrative complaints by the Office of the Ombudsman and criminal complaints by the Department of Justice against Faeldon and other concerned public officials and employees and private individuals.

Challenge

A day before finally leaving his post, however, Faeldon challenged Sen. Panfilo M. Lacson Sr. to file charges against him in connection with his accusation that he received P100 million as pasalubong (welcome gift) from smugglers when he assumed

his post last year. Speaking before officials and employees during a flagraising ceremony, Faeldon expressed confidence these charges would not prosper and likely be dismissed even at the prosecutor level for lack of basis. Faeldon also issued the same challenge to Barbers whom he accused of using the investigation on the entry of P6.4 billion worth of shabu into the country through the Bureau of Customs’s (BOC) green lane or express lane to boost his bid for the Senate in 2019. “So I challenge you again to file cases against all those you have named involved in corruption [at the BOC]. If you cannot file a case against us, that is such an idiotic move of yours. You should have asked your conscience if it is appropriate for you to hide behind the cloak of your immunity to malign and further destroy this institution. Do you have an iota of evidence against those you have named? How about our families you have destroyed?” he said. Faeldon also vowed to challenge the constitutionality of lawmakers immunity from suit for privilege speeches delivered in the Congress.

Punishment

Barbers said broker-turned-witness Mark Taguba may also face violation of Section 4, or importation of dangerous drugs, punishable by life imprisonment and with a fine of P500,000 to P10 million under Republic Act (RA) 9165. “First, Faeldon and his men conducted the raid without a search warrant. They pried open the shabu haul

without the presence of PDEA agents, thereby committing an illegal raid and contaminating the evidence,” he said during a news conference. “Second, he [Faeldon] ordered the NBI [National Bureau of Investigation] and PDEA agents to conduct a ‘controlled delivery’ of 100 kilos, out of the total 604 kilos of shabu they seized from the warehouse of Richard Tan to another warehouse. This is tantamount to planting of evidence. Third, a controlled delivery of drugs has to have [the] written approval of the director general of the PDEA which Faeldon has none,” he added. According to Barbers, under Section 29 of RA 9165, (as defined on the criminal liability for planting of evidence) “any person who is found guilty of “planting” any dangerous drug and/or controlled precursor and essential chemical, regardless of quantity and purity, shall suffer the penalty of death.” However, the death penalty was abolished during the time of Arroyo administration. But the lower house has already approved on final reading a measure restoring death penalty for drug-related crimes. The said measure is now pending for the Senate approval. He added the huge shabu shipment passed through the bureau without its officials’ knowledge. Barbers said Faeldon and his men, led by Customs Intelligence Director Neil Estrella, learned of the shipment based on a tip shared by Chinese Customs authorities. They raided the warehouse of Tan on the strength of a Letter of Authority issued by Faeldon on the day the raid was conducted.

Philippines joins condemnation of North Korea’s missile launch By Recto Mercene

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@rectomercene

he Philippines has once again joined the chorus of voices condemning North Korea over its latest launch of missile that was reported to have entered Japan’s airspace over Hokkaido Island and crashing 2,700 miles away over the north Pacific Ocean. “We call on the DPRK [Democratic People’s Republic of Korea] to halt these dangerous and provocative actions, which heighten tensions, increase instability and the risk of miscalculation and could possibly endanger lives,” Foreign Affairs Secretary Alan Peter S. Cayetano said in a news statement issued on Tuesday. “We recall the Asean Foreign Ministers’ Statement on Developments in the Korean Peninsula issued on August 5th and urge the DPRK to fully comply with its obligations under the relevant United Nations Security Council Resolutions,” Cayetano added after he was briefed on the incident. “Asean and the Philippines, as this year’s chairman, remain committed to peaceful resolutions of conflict,” he said. “While we are ready to do our part, provocations, such as this latest missile launch, should stop to help us put in place an environment that would be conducive for dialogue.” Cayetano added he has instructed the Philippine Embassy in Tokyo to continue to closely monitor the situation

and to ensure that approximately 242,000 Filipinos living and working in Japan are safe. “I wish to assure our kababayan in Japan that our embassy in Tokyo and our consulate general in Osaka are prepared to assist them should it be necessary,” Cayetano said. This is the second time the DPRK fired a missile over Japanese airspace. The first missile launch was in 1998. Amid condemnation from Seoul, Tokyo and Washington, a jubilant North Korean leader Kim Jong Un promised more nuclear and missile tests and warned that his country’s weapons could strike the US mainland and Pacific holdings. Kim’s warnings, however, must be taken with wariness, according to experts, who noted that for decades, Pyongyang has threatened to reduce Seoul into a “sea of fire”. CNN, quoting Pentagon Spokesman US Army Col. Rob Manning said, “We are still in the process of assessing this launch.” South Korea’s Joint Chiefs issued a statement that North Korea “fired an unidentified projectile” from an area near Sunan, Pyongyang, toward the sea east of the Korean Peninsula that “flew over Japan”. Japan’s Chief Cabinet Secretary Yoshihide Suga said the missile passed over the Erimo Cape of Hokkaido, and it is estimated have fallen in the Pacific Ocean, about 1,180 kilometer east of the Erimo Cape.

Economy

A4 Wednesday, August 30, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

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Investment pledges climbed 89.4% in first 7 months of 2017–Peza

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By Catherine N. Pillas

@c_pillas29

he Philippine Economic Zone Authority (Peza) on Tuesday reported an increase of investment pledges by 89.4 percent in the first seven months of the year, driven by aggressive ecozone development. The investment-promotion agency reported solid growth numbers in investment pledges, employment and exports from the January-toJuly period for the year. “In January to July, Peza grew new investments to P132.663 billion, an 89.43-percent increase over the P70 billion [registered] in 2016,” Peza Director General Charito B. Plaza said at a news briefing on Tuesday. “The increase in Peza’s performance is due to the economic-zone development, amounting to P75.4 billion, an increase of 95 percent compared to the same period in 2016,” she added.​ Ecozone development comprises some 62.8 percent of the total investment pledges pulled in the seven-month period. In terms of number of proj-

ects, the P132.663 billion translates to 363 projects, up from the 308 recorded in the same period last year. Direct employment in the seven months of the year amounted to 1.35 million, up from the 1.27 million from January to July in 2016. Exports recorded by Peza, which takes up 80 percent of the country’s total export receipts, grew by 12.37 percent, Plaza said. Among the big-ticket items approved in the first seven months is the Philippine Chinese Industrial Economic Zone (PCIEZ) in Dasul, Pangasinan. The applicant company is identified as First Pangasinan Industrial Corp. (FPIC). FPIC grand plan is to expand the PCIEZ—now just in its first phase costing P20.9 billion—into a mixed-

Tourist ride Coachmen wait for tourist passengers inside the historic Fort Santiago in Intramuros, Manila. These horse-drawn carts, which

served as the primary mode of transport in Manila’s major roads in the early 1900s, now ply their route within the Walled City and its environs, catering primarily to tourists and sightseers for a fee of at least P1,000 an hour. ROY DOMINGO

use special economic zone covering a 3,000-hectare land area with a total cost of $360 billion. “This overall plan will be developed over 30 years. An integrated township in Pangasinan forms part of this. Overall, this translates to

a yearly investment input of P600 billion for the local economy,” Plaza claimed. This particular ecozone has been deemed controversial due to its links to Xianglu Dragon Group Chairman Chen You Hao. Plaza, in full defense of the foreign national, said Chen’s participation in the project is limited as a “coordinator” tasked to bring in locator companies to PCIEZ. T ​ o recall, Chen You Hao has been accused of economic crimes by the Republic of China (Taiwan) for allegedly committing fraud on transactions worth billions of dollars. While the controversial businessman has reportedly divested

his interest in companies that will be partaking in investments here in the Philippines, Plaza said the negative news reports may sour the investment climate here. Peza clarified that its board​only granted the project a prequalification clearance, and ultimately, the final go-ahead will be given by Malacañang through an executive order declaring the area as an economic zone. “We issued this to the ecozone developer whose project qualified for registration entitled for incentives, but subject to compliance with all requirements for presidential proclamation,” Plaza said.

Govt rolls out driver’s license with five-year validity period

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he nationwide issuance of the driver’s license cards with five-year validity period shall commence soon, as the Land Transportation Office (LTO) rolled out on Tuesday the first batch of cards in the National Capital Region. Edgar Galvante, the chief of the regulator, said that with the rollout, those who will renew or apply for new licenses starting Tuesday will be issued plastic cards over the counter. “Those who applied prior to August 29 or those who are holders of paper driver’s licenses nationwide from October 2016 to August 25, 2017, shall be released starting in the second week of September due to system adjustment,” he said. For his part, Transportation Secretary Arthur P. Tugade said he is happy at how Galvante addressed the 3.6-million backlog in driver’s licenses in only a year and two months. “Today [Tuesday] marks the day that we answer the pressing question on the issuance of licenses. We will start to issue licenses with a validity of five years,” he said. Prior to these licenses, the regulator only issues plastic-card licenses with a three-year validity period. Data from the regulator showed that there is a backlog of 3.6 million licenses nationwide, of which, roughly a million is in Metro Manila alone, due to a questionable contract with the previous contractor. The joint venture of Dermalog Identification Systems, CFP Strategic Transaction Advisors and Nextix Inc. will handle the printing of the new licenses. Under its P829.6-million contract with the government, the join venture is required to procure, print and deliver 6 million license cards. Lorenz S. Marasigan

Duterte declares Sept. 1 regular holiday

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resident Duterte has declared September 1 a regular holiday in observance of the Muslim festival Eid’l Adha, or the Feast of Sacrifice. The declaration was issued t hrough Proc l a mat ion 297, which the President sig ned

on August 29. The National Commission on Muslim Filipinos (NCMF) has recommended September 1, which falls on a Friday, as the day corresponding to the observance of Eid’l Adha based on the Islamic Calendar.

Eid’l Adha is one of Islam’s two major feasts that is celebrated worldwide each year. The festival commemorates the w i l ling ness of I brahim (Abraham) to sacrifice his son, as an act of obedience to God’s command. PNA

Disaster-resilience office pushed

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ep. Joey S. Salceda of Albay has filed House Bill (HB) 6075, proposing the creation of an independent Department of Disaster Resilience (DDR) to fortify the country’s calamity-defense program and help ensure the country’s development and inclusive growth. The proposed DDR will exclusively handle the encompassing tasks of disaster-risk reduction, response, reconstruction and recovery. It will have an initial budget of P10 billion and will be solely accountable and responsible for overseeing, coordinating and implementing a comprehensive disaster risk and vulnerability reduction and management program and, finally, redirect existing policy drifts among agencies handling these tasks. Salceda said DRR is the answer to President Duterte’s call in his July 24 State of the Nation Address for “both houses of Congress to expeditiously craft a law establishing a new authority or department that will be effectively responsive to contemporary disaster realities, and empowered to best deliver [an] enhanced disaster resiliency and quick disaster response.” The proposed agency, he added, will be equipped with the necessary resources and competency to engage new actors, particularly in risk transfer and insurance, built with the necessary structure to manage broader climate-disaster governance arrangements, and will

spearhead the continuous development of a massive “strategic and systematic approaches to disaster prevention, mitigation, preparedness, response, recovery and rehabilitation,” involving all sectors from the national government down to individual families in communities. Salceda said the DDR should ideally take in at least four government entities critical to an effective disaster planning and operation—the Philippine Atmospheric Geophysical Astronomical Services Administration and the Philippine Institute of Volcanology and Seismology (Phivolcs) under the Department of Science and Technology; the Geoscience Bureau of the Department of Environment and Natural Resources; and the Bureau of Fire Protection under the Department of the Interior and Local Government. The idea is akin to the US Department of Homeland Security that placed under its operational control major federal agencies to effectively confront security threats in many areas. The DRR bill seeks to amend the eight-year-old Republic Act 10121, a landmark legislation but which falls short in creating “an institution that is sufficiently in a high position to oversee the implementation of streamlined disaster-risk reduction and management policies nationwide, and has the necessary authority, mandate and resources to lead and coordinate the efforts of different stakeholders

toward a more resilient nation.” As envisioned, the DRR will be separate from the Office of Civil Defense, which will continue to perform its original mandate, particularly its duty to administer a comprehensive national civil defense and civil assistance program, training of community volunteers for civil defense and assistance, and other mechanisms for community preparedness. Salceda said HB 6075 is a result of “action research, sharing of experiences and dynamic discussions among various stakeholders from national and local government agencies, organizations and communities and is a product of comparable international experiences”. It is designed to “put an end to ‘policy drifts’ and disagreements in the program of reducing the impacts of climate change that can lead to more serious consequences and expensive damages in terms of loss of lives and properties.” He noted that Supertyphoon Yolanda, which hit the country in November 2013 and took nearly 10,000 lives, destroyed billions of pesos of livelihoods and economic assets in one swoop, and other largescale disasters exposed problems in planning, coordinating and implementing large-scale disaster-risk reduction and management efforts, rooted primarily in the nature of our governance framework for disasterrisk reduction and management. PNA

news@businessmirror.com.ph

Banking&Finance BusinessMirror

Editor: Jun B. Vallecera • Wednesday, August 30, 2017

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BTr links mixed T-bills sale outcome to Jackson Hole events

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nvestor appetite for Treasury bills, or T-bills, generally fell on Tuesday led by the 91-day bell weather whose rate fell the most by 1.8 basis points to 2.143 percent, the Bureau of the Treasury (BTr) said. The reduction was noted against a backdrop of oversubscription for government securities that almost always betray liquidity levels in the financial system and the degree of interest these instruments are held by banks and the various trust units. Apart from patent liquidity in the system, National Treasurer Rosalia V. de Leon said such other variables as the resilient peso and the frequent iteration by the Bangko Sentral ng Pilipinas for the market to look at the country’s macroeconomic underpinnings for guidance helped the auction committee sell the entire batch of T-bills

worth P15 billion. She said there clearly is continued interest in shortterm government securities even as the world’s central banks meet in Jackson Hole, Wyoming, to discuss how best to exit from years of monetary-policy easing made more complicated by the refusal of inflation across jurisdictions to trend higher than where it is generally. “So again, we see that there’s demand on the short-tenor bucket given that [markets] are also awaiting the results coming out of the Jackson Hole meetings. But we have heard already last Friday [US Federal Reserve Chairman Janet] Yellen’s statement,” de Leon told

financial reporters. The auction committee awarded P6 billion for the 91-day IOUs, with tenders amounting to P20.867 billion and the committee having to reject P14.867 billion. The three-month rate now averages 1.8 basis points lower to 2.143 percent, from the 2.161 percent at the previous auction. The 182-day tenor was sold in full at P5 billion, as well, with tenders reaching P11.610 billion and rejections totaling P6.610 billion. The six-month T-bill rate now stands at 2.592 percent, which was 1.5 basis points higher than the 2.577 percent at the previous auction. “Of course, the peso has also strengthened. [That] has been communicated by the economic managers last Friday at the Ejap [Economic Journalists Association of the Philippines] forum, [that markets] should be looking at the fundamentals,” she added. The BTr, likewise, sold the entire batch of 364-day securities the full P4 billion, with tenders amounting to P11.229 billion while rejecting P7.229 billion. Its rate was set at 2.935 percent, or a reduction by 1.1 basis points, from 2.946 percent. Rea Cu

Trade group stands firm vs smuggling activities T

he Philippine Cement Importers Association (PCIA) on Tuesday offered to work with cement manufacturers-cum-importers and the Department of Trade and Industry (DTI) to help curb or stop altogether the alleged smuggling of the commodity into the country. “If there is truth to the claims of Cement Manufacturers Association of the Philippines President Ernie Ordoñez, the PCIA shall join hands with them in filing the necessary criminal and administrative cases against the alleged smugglers”, PCIA Executive Director Dani Enriquez, a former military official, said. “I will request Dr. Ordoñez to provide the documents he submitted to the Bureau of Customs so that I can help assess

the violations committed by the importers if there is really proof that they smuggled cement”, to Enriquez added. “I believe the solution to any cement smuggling, if there is any, is to work together to prevent these illegal activities, which rob the government of the needed revenues and, eventually, destroy the legitimate industry players. And I agree with the belief that if an importer can cheat on taxes, he can also cheat in quality or standards”, he said. Enriquez also said the PCIA wants to see the documents first before jumping to conclusions. “The importers have reputations to protect in the cement industry, and it is not fair to make unsubstantiated accusations. I don’t think an importer will smuggle a zero-

tariff and zero-duty product,” Enriquez added. “Nonetheless, this is exactly why the PCIA is proposing to the DTI to strengthen their monitoring and enforcement of compliance with their policies and national laws to ensure consumer welfare and protection,” Enriquez said. “As to the complaint of a certain consumer group concerning alleged ‘expired’ cement being sold in the market, I believe the PNS 7:2005 actually states that, after more than six months from initial testing, cement shall be retested and rejected if it fails conformance to standards. Hence, there is no such thing as expired cement in reference to the [cited] Philippine National Standard,” Enriquez said.

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Wednesday, August 30, 2017

The World BusinessMirror

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

North Korea fires missile over Japan

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EOUL, South Korea—In a first, North Korea on Tuesday fired a midrange ballistic missile designed to carry a nuclear payload that flew over Japan and splashed into the northern Pacific Ocean, officials said. The aggressive missile launch—likely the longest ever from the North—over the territory of a close US ally sends a clear message of defiance as Washington and Seoul conduct war games nearby. South Korea’s Joint Chiefs of Staff said the missile traveled around 2,700 kilometers (1,677 miles) and reached a maximum height of 550 km (341 miles) as it traveled over the northern Japanese island of Hokkaido. The distance and type of missile test seemed designed to show that North Korea can back up a threat to target the US territory of Guam, if it chooses to do so, while also establishing a potentially dangerous precedent that could see future missiles f lying over Japan. Any new test worries Washington and its allies because it presumably puts the North a step

closer toward its goal of an arsenal of nuclear missiles that can reliably target the United States. Tuesday’s test, however, looks especially aggressive to Washington, Seoul and Tokyo. T he Nor t h h a s conduc ted launches at an unusually fast pace this year—13 times, Seoul says— and some analysts believe Pyongyang could have viable long-range nuclear missiles before the end of President Donald J. Trump’s first term in early 2021. Seoul says that while the North has twice before fired rockets it said were carrying satellites over Japan—in 1998 and 2009—it has never before used a ballistic missile, which is unambiguously designed for military strikes. The North also chose not to fire its most recent missile at a lofted angle, as it did in previous launches to avoid other countries. The South Korean military was

People watch a TV screen showing a file footage of North Korea’s missile launch, at the Seoul Railway Station in Seoul, South Korea, on August 29. North Korea fired a ballistic missile from its capital, Pyongyang, that flew over Japan before plunging into the northern Pacific Ocean, officials said on Tuesday. The signs read “ North Korean missile flies 2,700 kilometers.” AP/Ahn Young-joon

analyzing whether the North had launched the Hwasong-12, a new intermediate-range missile that Pyongyang recently threatened to fire into waters near Guam, which hosts a major US military base that the North considers a threat. Tuesday’s missile landed nowhere near Guam, but firing a Hwasong-12 (Hwasong is Korean for Mars, or Fire Star) so soon after the Guam threat may be a way for the North to show it could follow

through if it chose to do so. Guam is 3,50 0 k i lometers (2,200 miles) away from North Korea, but South Korea’s military said the North may have fired the most recent missile at a shorter range. Another interesting aspect of this launch is that it was the first-ever reported from Sunan, which is home to Pyongyang’s international airport. Some outside obser vers wondered if North Korea had

launched a road-mobile missile from an airport runway—something South Korea’s militar y couldn’t immediately determine. The airport’s runways could provide the ideal space to launch a road-mobile missile like the Hwasong-12, while also demonstrating that the North can launch its missiles from anywhere, according to Moon Seong-mook, a former South Korean military official and current analyst for

the Seoul-based Korea Research Institute for National Strategy. North Korea will no doubt be watching the world ’s reaction to see if it can use Tuesday’s f light over Japan as a precedent for future launches. Japanese officials made the usual strongly worded condemnations of the launch. There were no immediate tweets from Trump. “We will do our utmost to protect people’s lives,” Japanese Prime Minister Shinzo Abe said. “This reckless act of launching a missile that f lies over our country is an unprecedented, serious and important threat.” Tokyo said there was no reported damage from the missile, which Japan’s NHK TV said separated into three parts. Residents on Hokkaido were warned of a North Korean missile launch by a “J-Alert” on their cell phones, with loud alarms and an e-mail that told people to stay indoors. A radio speaker broadcast an alert saying “missile is passing, missile is passing.” A US congressman visiting Seoul said Washington is now pressuring North Korea to abandon its nuclear ambitions by shutting down the impoverished country’s access to hard currency, the lifeblood of its expensive weapons program. AP

Brexit branching logjam looms Former loyalists lose faith in Myanmar’s democracy icon at BOE as EU banks consider moves

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logjam is looming at the Bank of England (BOE) as almost 80 foreign banks that are operating UK branches decide on their future in post-Brexit Britain. The first choice for lenders from the European Union (EU) using the passporting mechanism for their UK business—a device that will no longer be available after Brexit—is whether to stay or go. For those who remain, the question is whether to seek authorization from the BOE’s Prudential Regulation Authority (PRA) to continue as a branch—albeit now of a third-country bank—or to incorporate as a UK bank with its own capital and prudential requirements. The timing of and potential delays to that process are becoming an issue for two main reasons. The UK will exit the bloc in about 18 months, about the length of time lawyers say it can take to get authorization. The second issue is the PRA’s resources—over the past 12 months it has issued licenses at a rate of about one every two months, a pace that might need to be stepped up. “If they have to process 80 applications in the next 18 months, they’re going to find that very difficult,” said Dominic Hill, a financial-services partner at law firm Hogan Lovells in London. “They might be worried about the systemic risk they’re taking on by allowing lots of new branches to open. This would be a significant addition to the risk that they’re facing.” Bank branches operate as extensions of their parent company, which offers flexibility in moving funding and capital around. That’s because the home-state regulator takes most of the responsibility for safety and soundness. In contrast, a subsidiary is supervised locally as a standalone entity, meaning the host supervisor has to take much less on trust, Hill said. A PRA spokesman referred to letters by CEO Sam Woods and declined to comment further. In an exchange with lawmaker Nicky Morgan this month, Woods underlined that the authorization and supervision of a large number of new firms “is likely to place a material extra burden on the PRA’s resources,” posing a “material risk to our objectives.” UK authorities face a dilemma. A very demanding approach that makes it difficult or costly for banks to operate in Britain risks scaring them away. But the minimal requirements that were common under the EU’s passpor ting regime may not be commensurate with the responsibility UK regulators have for foreign banks’ entities now. To open a UK operation, a third-country

applicant must fill out an exhaustive 41page form, helped by 38 pages of notes, submit—among much else—a business plan, demonstrate how it will maintain liquidity and offer an overview of the parent company’s resolution plan, according to the BOE web site. Attaching two hard copies and two electronic copies of all documents, one for the PRA and the other for the Financial Conduct Authority, plus a nonrefundable check for £25,000 ($32,000) sets the wheels in motion. The PRA then has six months for a decision if the form is complete when it is submitted, 12 months if not. The regulator also likes to have “a number of structured formal meetings” with applicants before the form is handed in, to explain the process, identify potential concerns and help “submit as complete an application as possible.” It’s ultimately for the PRA to say whether a branch or a licensed bank is the appropriate legal form. The UK’s attitude to third-country b r a n c h e s i s m o re we l c o m i n g t h a n that of other jurisdictions, a legacy of efforts to attract US and Japanese banks to London’s wholesale markets. That welcome doesn’t extend to deposittaking: The regulator caps that at 100 million pounds for branches—except for those of EU lenders. An example for a bank will lose that privilege is Svenska Handelsbanken AB, which gets about 15 percent of revenue from more than 200 branches in the UK, data compiled by Bloomberg show. Handelsbanken is “ver y firmly committed ” to the UK market, CE O Anders B ouvin told Bloomberg T V’s Francine Lacqua, and is preparing for the “possible conversion of the UK branch into a subsidiary” for when the country withdraws from the bloc. Depositors in a branch of a non-UK lender, such as Handelsbanken’s, have to look to the deposit insurance system of the bank’s home state for payment if anything goes wrong. While the EU authorities have been beating the drum for banks wanting to establish units in the bloc to be able to continue using their passports, publicly, the UK hasn’t been as vocal about the need to get the approval process moving. “Europe’s trying to get as many London banks as possible to set up on the Continent,” said Rob Moulton, a partner at Latham and Watkins in London. “They want them to hit the panic button. Instead, we want the business to stay, so we need to be as helpful as possible.” Bloomberg News

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A NGON, Myanmar—A s Aung San Suu Kyi launched a national struggle against decades of harsh military rule, one medical student worked tirelessly at her side, facing down gun-wielding soldiers trying to crush the surging prodemocracy movement. For her activism and loyalty, Ma Thida suffered six years of mostly solitary imprisonment and nearly died of illnesses. Now a medical doctor, novelist and recipient of international human-rights awards, Ma Thida has few kind words for the former mentor she once called “my sister who always remained in my heart.” The criticism by Ma Thida and other formerly ardent supporters is manifold: they accuse Suu Kyi of ignoring state violence against ethnic minorities and Muslims, continuing to jail journalists and activists, cowing to Myanmar’s still-powerful generals and failing to nurture democratic leaders who could step in when she, now 72, exits the scene. Instead, they say her government is creating a power vacuum that could be filled again by the military. Some conclude that Suu Kyi—who espoused democracy with such passion—always possessed an authoritarian streak, which only emerged once she gained power. “We can’t expect her to change the whole country in one-and-ahalf years, but we expect a strong human rights-based approach,” Ma T hid a says of t he Nobel Peace Prize winner once hailed as “Myanmar’s Joan of Arc” and

spoken of in the same breath as South Africa’s Nelson Mandela and Mahatma Gandhi of India. International criticism has focused on Suu Kyi’s lack of action or condemnation of violence targeting the country’s approximately 1 million Rohingya Muslims, who have been brutalized since 2012 by security forces and zealots among the Buddhist majority in western Myanmar. More than 1,000 Rohingya have been killed, while some 320,000 are living in squalid camps in Myanmar and neighboring Bangladesh, according to estimates by the United States-based Human Rights Watch and the United Nations. Thousands more embarked on perilous sea voyages to other Southeast Asian countries. After a new wave of violence and humanitarian crisis erupted last week, with ethnic Rohingya militants attacking police posts and leaving 12 security personnel and 77 Rohingya Muslims dead, her office said military and border police had launched “clearance operations.” She herself condemned the militants for what she called “a calculated attempt to undermine the efforts of those seeking to build peace and harmony in R akhine state.” As usual, she did not address the insurgents’ counterallegations— that the attacks were aimed at protecting Rohingya villagers from “intensified atrocities” perpetrated by “brutal soldiers.” “The violence against the Rohingya is not an isolated event,”

In this March 15, 2016 photo, Aung San Suu Kyi walks in Myanmar’s parliament in Naypyitaw. Suu Kyi has expelled dissident party members, neglected to groom successors, spoken rarely to the press and apparently made command decisions rather than seeking help from capable advisers. AP/Gemunu Amarasinghe

says Stella Naw, an analyst from the ethnic Kachin minority focusing on national reconciliation. “We know the game the army is playing. But as a politician elected by the people, she is accountable for her inaction and failure to condemn the army.” Suu Ky i ’s gover nment has banned a UN investigation team from entering the afflicted region, and, earlier this month, rejected the world body’s assertion that the regime’s actions “very likely” amounted to crimes against humanity and ethnic cleansing. The February report alleged security forces had perpetrated mass killings, hurled children into fires and gang raped Muslim women. The government has mostly blamed the latest round of bloodletting on Islamist militants. Suu Kyi ’s official Facebook page last year flashed a message reading “Fake Rape.” “We don’t have a second choice. People still support her party and government. People must lower their expectations because the problems are so deeply rooted,” says Thant Thaw Kaung, executive director of the Myanmar Book Aid and Preservation Foundation, an initiative to improve the country’s woeful education system. For years, Suu Kyi had courageously defied the military, suffering 15 years of house arrest and separation from her British husband and two sons to helm her National League for Democracy to a landslide victory in 2015 elections. Often referred to as “The Lady,” she retains popularity among the general public as the

liberator from half a century of military oppression. “When she was in the opposition she was so articulate, so vocal, but suddenly now we are faced with silence. Now that Myanmar is back on the democratic path, everyone expects that there should be more openness, but this has not happened,” says Khin Zaw Win, a political prisoner for 11 years who now heads the Tampadipa Institute, a civil-society think tank. Since assuming office in April 2016, Suu Kyi has earned a reputation for being aloof and controlling of information. Explanations for why she’s changed, or faltered in upholding previously avowed goals, are starkly disparate: she is variously cast as a tragic heroine fighting impossible odds and a closet authoritarian with a soft spot for the military. Suu Kyi herself has often said she inherited an affinity for the armed forces from her father Gen. Aung San, a military hero who fought for independence from Britain. Reflecting this puzzlement, a satirical Internet site called Burma Tha Din Network joked that the Suu Kyi in office now was a clone created by Russian geneticists hired by Myanmar’s generals to remove her democratic genes, and that the real Suu Kyi was being held by the military and wondering, “How the hell can people believe I’d do that?” Perhaps the most widespread view is that she simply can’t push her democratic agenda or humanrights demands, lest the military oust her from power. Although her post as government leader places her above the president, the military retains its grip on three key ministries controlling law enforcement, local administration and embattled frontier areas, as well as a mandated 25 percent of seats in Parliament. “She may shake hands with the military across a table, but under it they are kicking her,” says That Thaw Kaung. Some disagree and say her popular mandate gives her the force to challenge the generals who are unlikely to upset an arrangement that still allows them to wield power with seeming impunity while also being able to blame problems on Suu Kyi’s civilian government. AP

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

The World BusinessMirror

Wednesday, August 30, 2017

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Harvey floods keep Houston paralyzed

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OUSTON—Floodwaters reached the rooflines of singlestory homes on Monday and people could be heard pleading for help from inside, as Harvey poured rain on the Houston area for a fourth consecutive day after a chaotic weekend of rising water and rescues.

The nation’s fourth-largest city remained mostly paralyzed by one of the largest downpours in the US history. And there was no relief in sight from the storm that spun into Texas as a Category 4 hurricane, then parked over the Gulf Coast. With nearly 2 more feet (61 centimeters) of rain expected on top of the 30-plus inches (76 cm) in some places, authorities worried that the worst might be yet to come. Harvey has been blamed for at least three confirmed deaths, including a woman killed on Monday in the town of Porter, northeast of Houston, when a large oak tree dislodged by heavy rains toppled onto her trailer home. A Houston woman also said she presumes six members of a family, including four of her grandchildren, died after their van sank into Greens Bayou in East Houston. Virginia Saldivar told The Associated Press her brother-in-law was driving the van last Sunday when a strong current took the vehicle over a bridge and into the bayou. The driver was able to get out and urged the children to escape through the back door, Saldivar said, but they could not. “I’m just hoping we find the bodies,” Saldivar said. Houston emergency officials cou ldn’t confir m the deaths. But Police Chief Art Acevedo said he’s “really worried about how many bodies we’re going to find ” amid the disaster, which unfolded on an epic scale in one of A mer ica’s most sprawl ing metropolitan centers. The Houston metro area covers about 10,000 square miles, an area slightly bigger than New Jersey. It’s crisscrossed by about 1,700 miles of channels, creeks and bayous that drain into the Gulf of Mexico, about 50 miles to the southeast from downtown. The storm is generating an amount of rain that would normally be seen only once in more than 1,000 years, said Edmond Russo, a deputy district engineer for the Army Corps of Engineers, which was concerned that floodwater would spill around a pair of 70-year-old reservoir dams that protect downtown Houston. The flooding was so widespread that the levels of city waterways have equaled or surpassed those of Tropical Storm Allison from

2001, and no major highway has been spared some overflow. The city’s normally bustling business district was virtually deserted on Monday, with emergency vehicles making up most of the traffic. Rescuers continued plucking people from the floodwaters. Mayor Sylvester Turner put the number by the police at more than 3,000. The Coast Guard said it also had rescued more than 3,000 by boat and air and was taking more than 1,000 calls her hour. Chris Thorn was among the many volunteers still helping with the mass evacuation that began last Sunday. He drove with a buddy from the Dallas area with their flat-bottom hunting boat to pull strangers out of the water. “I couldn’t sit at home and watch it on TV and do nothing since I have a boat and all the tools to help,” he said. They got to Spring, Texas, where Cypress Creek had breached Interstate 45 and went to work, helping people out of a gated community near the creek. “ It ’s ne ver f loo de d here,” Lane Cross said from the front of T hor n’s boat, hold ing his brown dog, Max. “I don’t even have f lood insurance.” A mandatory evacuation was ordered for the low-lying Houston suburb of Dickinson, home to 20,000. The police cited the city’s fragile infrastructure in the floods, limited working utilities and concern about the weather forecast. In Houston questions continued to swirl about why the mayor did not issue a similar evacuation order. Tur ner has repeated ly defended the decision and did so again on Monday, insisting that a mass evacuation of millions of people by car was a greater risk than enduring the storm. “Both the county judge and I sat down together and decided that we were not in direct path of the storm, of the hurricane, and the safest thing to do was for people to stay put, make the necessary preparations. I have no doubt that the decision we made was the right decision.” He added, “Can you imagine if millions of people had left the city of Houston and then tried to come back in right now?” The Red Cross quickly set up the

In this August 27 photo, residents of the La Vita Bella nursing home in Dickinson, Texas, sit in waist-deep floodwaters caused by Hurricane Harvey. Authorities said all the residents were safely evacuated from the facility. Trudy Lampson via AP

George R. Brown Convention Center and other venues as shelters. By Monday night 7,000 people have arrived at the shelter set up inside the George R. Brown Convention Center—which originally had an estimated capacity of 5,000. Red Cross Spokesman Lloyd Ziel said that volunteers made more space inside the center, which also was used to house Hurricane Ka-

trina refugees from New Orleans in 2005, in part by pushing some cots closer together. A shortage of cots means some people will have to sleep on chairs or the floor. The center settled down at night, after an occasionally chaotic day that saw thousands of evacuees arrive in the pouring rain. Officers and volunteers at times rushed to attend to those

with medical needs, including two men who were suspected of having taken a street drug. Officials said both recovered within an hour. At the Addicks and Barker reservoirs, the Army Corps started releasing water on Monday because water levels were climbing at a rate of more than 6 inches (15 cm) per hour, Corps Spokesman Jay Townsend said.

The move was supposed to help shield the business district from floodwaters, but it also risked flooding thousands more homes in nearby subdivisions. Built after devastating floods in 1929 and 1935, the reservoirs were designed to hold water until it can be released downstream at a controlled rate. In the Cypress Forest Estates neighborhood in northern Harris County, people called for help from inside homes, as water from a nearby creek rose to their eaves. A steady procession of rescue boats floated into the area. Harvey increased slightly in strength on Monday as it drifted back over the warm Gulf, according to the National Hurricane Center. Forecasters expect the system to stay over water with 45 miles per hour (72 kilometers per hour) winds for 36 hours and then head back inland east of Houston sometime Wednesday. The system will then head north and lose its tropical strength. Before then, up to 20 more inches (51 cm) of rain could fall, National Weather Service Director Louis Uccellini said on Monday. That means the flooding will get worse in the days ahead and the floodwaters will be slow to recede once Harvey finally moves on, the weather service added. Sometime on Tuesday or early on Wednesday, parts of the Houston region will probably break the nearly 40-year-old US record for the biggest rainfall from a tropical system—48 inches, set by Tropical Storm Amelia in 1978 in Texas, meteorologists said. The amount of water in Houston was so unprecedented that the weather service on Wednesday had to update the color charts on its official rainfall maps to indicate the heavier totals. In Louisiana the images of the devastation in Houston stirred up painful memories for many Hurricane Katrina survivors. “It really evoked a lot of emotions and heartbreak for the people who are going through that now in Houston,” Ray Gratia said as he picked up sandbags for his New Orleans home, which flooded during the 2005 hurricane. In Washington President Donald J. Trump’s administration assured Congress that the $3-billion balance in the Federal Emergency Management Agency’s disaster fund was enough to handle immediate needs, such as debris removal and temporary shelter for displaced residents. The White House said on Monday night that the president and first lady will visit Corpus Christi and Austin on Tuesday. They will receive briefings on the relief efforts by local leaders and organizations. Harvey was the fiercest hurricane to hit the US in 13 years and the strongest to strike Texas since 1961’s Hurricane Carla, the most powerful Texas hurricane on record. AP

China’s $1-T power industry overhaul just starting C

hina’s move to create the world’s biggest power company is expected to be the first such government-managed mega-merger by the largest energy consumer. The newly created China Energy Investment Corp.—a combination of Shenhua Group Corp., the nation’s largest coal miner, and China Guodian Corp., one of its top 5 power generators—may be the first of multiple consolidations, which Wood Mackenzie Ltd. estimates would include almost $1 trillion in assets. “ T he Shenhua- Guodian merger is just the beginning of a wave of massive consolidations in China’s energ y sector,”

said Frank Yu, a Beijing-based a na lyst at Wood Mac ken zie. “ The landscape of major power utilities could be fundamentally reshuff led.” The merger is one of the clearest signals of President Xi Jinping’s commitment to consolidate China’s power industry as his government seeks to cut industrial overcapacity and accelerate the overhaul of state-owned enterprises. It also dovetails with efforts to lower the country’s reliance on coal and expand the use of renewables and natural gas. At 1.65 terawatts, China has more than 40 percent more generating capacity than the US.

“More central state-ow ned enterprise integration—particularly between power generators or between coal and power companies—will likely emerge,” Jenny Yang, director of China power and renewables at IHS Markit Ltd., wrote in a research note. “Some of the other large power generation companies will likely be targets for future mergers.” China’s top 5 power producers were formed from the 2002 break up of State Power Corp., aimed at improving the sector’s efficiency. That followed the 1997 creation of State Power, which was carved from what was then the Power Industry Ministry to

separate the business and regulatory functions of the sector.

Possible partners

China Huaneng Group, the countr y’s biggest coal-fired power producer, may merge with State Power Investment Corp. (SPIC), Bloomberg repor ted i n May. SPIC Chairman Wang Binghua said in July that the company is in contact with Huaneng Group about a restructuring and “something big may happen later.” C h i n a Hu ad i a n Cor p. a nd C h i n a Dat a ng Cor p. a re t he remaining t wo of China’s large st ate - power compa n ies. T he asset va lue of t hose big f ive

generators, as wel l as t he nation’s two nuclear power developers a nd top 2 coa l m iners, could reach close to $1 tr illion, accord ing to Wood Mackenzie. “ T he 2002 refor m was a success in terms of raising China’s power-generation capacity, and achieved what it was desig ned to achieve: to brea k power monopoly and say good-bye to the old planned economy,” said Simon Powell, head of Asian utilities research at UBS Group AG in Hong Kong. “ W hat it failed to achieve was to set r u les for ‘economic dispatch ’ or limiting what k ind of power plants generators can and cannot build.”

In 2003 power supply was unable to keep pace with demand, with weekly power failures hitting more than half of China’s provinces and regions, as well as major cities, including Shanghai. Power generation more than tripled from then until last year, hitting 5.9 trillion kilowatt-hours. The glut of supply has forced the nation’s generators to run at the lowest utilization rate since 1964, according to the National Energy Administration. Cutting the number of generators through mergers is one way the government can manage that current overcapacity, Powell said. Bloomberg News

August 30, 2017

Ambassador Antonio L. Cabangon Chua 1934 - 2016

Remembering you with love on your birthday. Your precious memories will remain in our hearts and your legacy will continue to live on.

ExportUnlimited BusinessMirror

Aurora province takes spotlight as PHL’s ‘City of Charm’ at Caexpo 2017

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HE Province of Aurora will take center stage as the Philippines’s “City of Charm” in the 14th China-Asean Expo (Caexpo) in Nanning, Guangxi, China, from September 15 to 17.

As part of the Philippine delegation led by the Department of Trade and Industry-Center for International Trade and Expositions and Missions (DTI-Citem), the local government of Aurora will highlight their province’s sights, culture and its investment opportunities in the City of Charm pavilion. In their booth, the Aurora provincial government is also set to feature the sights and economic potential of each of its eight municipalities: Baler, Casiguran, Dilasag, Dinalungan, Dingalan, Dipaculao, Maria Aurora and San Luis. Caexpo is the second-biggest

trade event in China, with a total exhibition space of about 80,000 square meters and 4,600 exhibition booths with around 57,000 participants. It is the only international trade fair in the region dedicated to promoting the building of China-Asean Free Trade Area and celebrating regional economic and trade cooperation. “Aurora will be given a chance to promote its premier agriculture sector and tourist destination in the Chinese and Southeast Asian market. This will lead to more employment and livelihood opportunities to its locals through the entry of foreign and domestic capital that will boost our

income-generating industries,” Citem Executive Director Clayton Tugonon said. “Ha r nessing t he economic competitiveness of Aurora province will enable its local government to diversify its products and improve the services it can offer to the local and international markets,” Tugonon said. Agriculture is the main economic driver in Aurora, employing approximately half of the population in this booming industry. About 49,991 hectares or 15 percent of the provincial land area are cultivated farmlands. Major crops include rice, coconut, coffee, bananas, root crops, corn, citrus fruits, peanuts and abaca. The province is also a major producer of the Philippine’s best-tasting virgin-coconut distilled wine, known locally as lambanog, which is made from the sap or tuba of coconut-tree flowers. As a tourist destination, Aurora is filled with exciting water adventure. The Pacific Ocean brings the northeast monsoon wind, creating versatile waves suitable for surfing amateurs, enthusiasts and profes-

Editor: Efleda P. Campos • Wednesday, August 30, 2017 A9

DTI promotes PHL’s ‘Exclusively By Hand’ brand to Tokyo, Japan

sionals—earning the reputation as a world-renowned surfing hub. The province’s marine biodiversity is a sight to behold for scuba divers, as its underwater terrain is a habitat for a variety of fishes, sea snakes, turtles, mollusks and other marine creatures. Some of the fascinating water spots in Aurora are the Dinadiawan Beach, Sabang Beach, Dingalan White Beach, Dimadimalangat Islet, Dicasalarin Bay and Banju Springs. Nestled in the arms of the Sierra Madre mountain range, the province is teeming with various land escapades, whether you are a hiker, trekker or simply a nature lover. It has a most captivating rainforest, a lively ecoparadise for distinct Philippine flora and fauna. “In fact, Aurora is where you can find the 600-year-old balete tree designated the official “Millennium Tree” of the Philippines, the largest tree of its kind in Asia. It is also home to the endangered Philippine eagle and other rare species of amphibians, reptiles and other birds,” Tugonon said.

PHL cacao beans chosen among world’s best in 2017 T By Gil Gabriel D. Ragil

Senior Trade and Industry Development Specialist and Product Officer, Emerging Products Division, DTI-EMB

T

HE Cocoa of Excellence Program has selected cacao-bean samples sent by Charita Puentespina of Puentespina Farms in Davao as part of the best 50 samples from a total of 166 samples received from 40 countries for the 2017 edition. The samples were sent through freight with cost shouldered by the Department of Trade and Industry (DTI) Davao City. The DTI Export Marketing Bureau was instrumental in expediting the release of a Food and Drug Administration Certificate of Product Registration, which resulted in the departure of the company’s very first shipment to the United States on time. Puentespina Farms is a member of Puentespina Group of Companies, based in Malagos Garden Resort in Davao City. They produce the world-acclaimed Malagos Chocolate brand. Cacao plants, which first made it to Philippine shores in 1670 through a Spanish friar, is currently one of the country’s key crops with a huge potential in the world market. The Philippines produces more than 10,000 metric tons of cacao per year and exports about $6 million worth to the international market. The country, however, imports more than $100 million worth of cacao from other cocoa-producing countries. The Department of Foreign Affairs said the imbalance between cacao production and importation is because the Philippines exports raw cacao, while it imports fermented cacao beans, which give chocolate bars and other products the taste and texture needed to produce the sweet type of chocolate people buy in stores. Seeing the potential of cacao and chocolate in the export market, the Philippine government has endorsed a target to increase cacao crops to 100,000 metric tons per year by the year 2020. Euromonitor International forecasted that the Philippine chocolate market is set to grow 13 percent to $306.3 million in just four years. Malagos Chocolate’s venture into cacao production started in 2003 when founders Roberto and Charita Puentespina leased a cacao farm in Malagos, Baguio District, Davao City. Puentespina, known as a farmer at heart, rehabilitated their cacao trees and, soon after, harvested the cacao pods. They now operate a 60-hectare cacao farm and employ around 50 in-house farmers. In addition, they also source wet cacao beans from more than 80 small growers in the area to promote sustainability in the community. They also built a training facility on their farm to teach their farmers good cacao-growing practices. They grow Trintario clones, a cross between the Criollo and Forastero varieties, specifically and predominantly the UF 18, BR 25 and PBC

123 clones. These fine flavors are the main ingredients in their award-winning chocolates that have earned nine international and two local victories to date. The Cacoa of Excellence Program web site is the entry point for cacao producers to participate in the International Cocoa Awards (ICA). The ICA is a global competition recognizing the work of cocoa farmers and celebrating the diversity of cocoa flavors. Every two years this unique program, spearheaded by Bioversity International and Event International, recognizes the quality, flavor and diversity of cacao according to their origin. By bringing together leading sensoryevaluation experts, the chocolate industry and the next generation of cocoa pioneers, the Cocoa of Excellence Program recognizes and rewards cacao with exceptional and unique flavours, while bringing know-how, cacoa-evaluation tools, market opportunities and incentives for safeguarding cacao diversity to farming communities and national organizations globally. Bioversity International’s vision is for agricultural biodiversity to nourish people and sustain the planet. It delivers scientific evidence, management practices and policy options to use and safeguard agricultural and tree biodiversity to attain sustainable global food and nutrition security. In an e-mail letter on August 2 bearing the subject “Philippines: Cocoa of Excellence Program 2017—selection of the best 50 samples,” Ines Drouault informed Puentespina and Valente Turtur of their sample’s inclusion in the selection. He informed them the sensory evaluation of all 166 samples (as liquor and untampered chocolate) was done in May, June and July 2017 by the Cocoa of Excellence Program Technical Committee. The selection of the 50 best samples was the result of the statistical analysis of the data. The 50 bean samples are now being processed into chocolate, and the next step will be the sensory evaluation by a large panel of 40 experts in September 2017. The selection of the 12 to 15 ICA will be made by mid-October. All 50 chocolate samples will be celebrated at the Salon du Chocolat in Paris from October 28 to November 1 where the Cocoa of Excellence Program will take a stand. The ICA ceremony will take place on Monday evening, on October 30. Drouault is a consultant/research assistant, Cacao Genetic Resources, Coordination of the Cocoa of Excellence Program. Prior to this latest recognition, Malagos Chocolate garnered two awards from the equally prestigious 2017 Great Taste fine food competition held in London, United Kingdom. Organized by the Guild of Fine Food, Great Taste is the acknowledged benchmark for fine food and drinks considered as the “Oscars” of the food world. Great Taste wins received this year by this local chocolate maker were for its Malagos

100-percent Unsweetened Chocolate accorded a 1-Star accolade under Food Category 419 (any other hot drink including hot chocolate). It was the second Great Taste Award received by their Malagos 100-percent variant. The other win was for its Malagos 65-percent Dark Chocolate under Food Category 902 (chocolate bars, dark, milk and white), which was given a 1-Star accolade, a first-time win in this competition for the variant. In June 2017 Malagos Chocolates also received awards from the UK’s Academy of Chocolate Awards, namely a Silver for their Malagos 100-percent Pure Unsweetened Chocolate; two Bronzes for Malagos 65 percent and 72-percent Dark Chocolates; and one Commendation for Malagos 85-percent Dark Chocolate. The company has harvested impressive awards since it joined various chocolate competitions. In 2016 Malagos Unsweetened Chocolate (drinking-chocolate category) won Silver and 2 Stars out of 3 Stars, respectively, at the Academy of Chocolate and Great Taste Awards in London, UK. In October 2015 Malagos 65-percent Dark Chocolate was given a Silver at the World Drinking Chocolate competition organized by the International Chocolate Awards in Hannover, Germany. In April of that same year Malagos Unsweetened Chocolate also won the Bronze Award for Best Unflavored Drinking Chocolate at the 2015 Academy of Chocolate Awards in London, UK. All these awards bestowed on its products are all marks of excellence in their taste, form and quality. Malagos Chocolate proudly promotes its chocolate bars and drinks as from “Tree to Bar”; “Single-Origin” from Davao, Republic of the Philippines; “Award-Winning” “World-Class”; and “Proudly Filipino” (made and sourced product). All of these support the observation that Filipino-made pure chocolate is on the rise. Artisan chocolate makers, by selling their life’s work, seek to educate Filipino consumers about the true taste, health benefits and value of pure chocolate. The artisan singleorigin chocolate making reflects the passion and mastery of the craft by its makers. Every chocolate bar is unique, especially if that is handcrafted single-origin chocolate made from the finest Philippine cacao. Like wine sources, this tropical fruit bears the distinct flavor of the land where it originates, its terroir. The trees of Criollo, Forastero and their hybrid Trinitario varieties, grow mostly in the southern parts of the country. The pods are harvested; the beans are roasted, cracked and ground into chocolate liquor, which is then refined with sugar and more cocoa butter. Conching—the final step necessary for the chocolate to lose some of the cacao’s bitter and harsh qualities— takes several hours to develop its flavor— and result in the final smooth and creamy mass molded into bulk bars. This is artisan single-origin chocolate making where ev-

ery bar reflects the passion and mastery of craft of its maker. Filipino chocolates have a distinct Asian flavor. But can they compete with Belgian and Swiss market favorites? Let us share with you the story of Ralfe Artisan Chocolates (Ralfe Gourmet), which started its humble beginnings in Raquel’s kitchen in Cebu and has now come a long way. Like Malagos Chocolate, it is making a buzz not just for its pure, delectable chocolate products but also for its distinctly Filipino cacao—in the international market. Raquel Choa practically grew up with chocolate. Her grandmother taught her how to plant and roast cacao, followed by the process of making tablea—local chocolate made from Filipino cacao beans. It is also known in the Visayas as sikwate, a chocolate drink. As age 7, Raquel was already making them on her own. Some would readily think that making a tablea drink only meant placing tablea chocolate in a clay pot, adding water and whisking it with a batirol to create froth. Raquel believes there is more to chocolate than that. When asked what makes her creations stand out, Raquel said it is because their chocolate is given that extra ingredient. “We put heart into the chocolate. There’s passion put into it, “she said. “We give love in our work.” Realizing that she just couldn’t keep on making tablea since they will only be ingredients to what chefs in hotels and restaurants are making, she decided to evolve. Her decision was to make artisan chocolate. Initially, people in Cebu started to notice her carefully crafted bonne bouchet that they eventually attracted more attention—from the right people. Raquel was given a chance to showcase her chocolates to diplomats in Manila at an event organized by Ambassador Jose Maria Cariño. He believed Raquel’s products have a place in the world’s evolving chocolate market—as a good alternative to Belgian and Swiss favorites due to its distinct Asian flavor. The woman from Cebu who started making her delicacies in her own small kitchen was immediately asked for about 1.5 tons of her chocolate to be exported to China, and more orders are coming in. Prior to the event, Raquel was already exporting tablea to gourmet stores in Vancouver, Canada. Talks are also ongoing to bring artisan chocolates to Singapore and Germany. Foreign Affairs Undersecretary Rafael Seguis, who was at the event, made a speech about how Raquel’s business is among the economic factors that can help restore economic activity in the Visayas—a region frequently ravaged by earthquakes and typhoons. Raquel’s cacao farmers come from both Cebu and Bohol. Some of them are affected by natural disasters. Business, however, continues to operate to generate livelihood and raise the quality of life in their community.

HE Department of Trade and Industry-Export Marketing Bureau (DTI-EMB) is again promoting its “Exclusively by Hand ” brand during the Good Design Marunouchi in Tokyo, Japan, from September 11 to 25. The DTI-EMB is joining the exhibit again in cooperation with the Philippine Trade Investment Section, Embassy of the Republic of the Philippines in Tokyo, Japan Institute of Design Promotions, Japan Management Association Japan Retailers Association and Tokyo Metropolitan Government to promote home and fashion design products and services at the exposition. Following through the success of the initial attempt to promote design services through the Philippine business-matching mission at the Good Design Marunouchi in 2016, the Outbound Business Matching Mission (OBMM) in 2017 will be held to sustain the Philippine branding of Exclusively by Hand and for Philippine design services to have a consistent presence and position in the Japanese market. The Japanese are known to love products designed with indigenous materials that are practical enough for regular use and are predominantly handmade. Philippine designs and execution by craftsmen and women have become artisanal with a unique sense of sophistication that entice Japanese interest. The venue is Good Design Marunouchi, where the Marunouchi Naka Dori Avenue introduces the “total quality life” concept—a place where an array of high-end brand shops, lifestyle-themed stores like Hermes, Baccarat, Rimowa, Comme des Garcons, Follie Follie, La Maison du Chocolat, Kate Spade, Brooks Brothers, Jo Malone and Tiffany & Co. are located. Philippine participants are Zacarias 1925, AdanteLeyesa Atelier, Filip + Inna, AnnTiu (by Ann Pamintuan), Calli Fashion, Joanique Inc., Bella Trading and Services (Beatriz Accessories), AranazDelujo Inc., MarconoliCustodio Shoe Design & Leather Craft, Mele + Marie and CSM Philippines. For 2017 the exhibit tells the story of the people of the Philippines. The objects narrate the country’s ideas of beauty and the desires of its people. A new exhibit of original design with product showcase and business-matching sessions will be conducted as major components of the OBMM in Tokyo for the Philippine design

sector. The mission will be participated in by 11 Filipino designers with the banner theme Exclusively by Hand. Designers will be able to draw clients looking for customized concept designs that can be applied to global brands by way of brand designing. T his year’s Exc lusively By Hand carries the theme “Indigenous”. The event promotes a new breed of designs providing authentic, original and intricate Filipino craftsmanship. T he mission puts together the latest collections from the collaboration of the country’s young, promising, and multiawarded established designers. Use of natural materials is the main feature of Exclusively by Hand Indigenous theme considering the Philippines is well endowed with minerals and is reported to rank third in gold, fourth in copper, fifth in nickel and sixth in chromite deposits in the world based on land mass. The richness of the Philippines in terms of mineral resources is attributed to its location at the western fringes of the Pacific Ring of Fire. The Philippines is situated along the Circum-Pacific Rim of Fire where the processes of volcanism and plate convergence caused the deposit of minerals, both metallic and nonmetallic. The Philippine archipelago is a collection of more than 7,100 islands that are homes to over 100 distinct indigenous groups. Through the centuries, these people have forged a unique and vibrant culture that distinguishes them from the rest of Asia. Through different ways of life, traditions and even celebrations, they have woven an identity supported by their artistic inclinations, mastery of indigenous crafts and creative ways with raw materials. These rich and native cultures are being kept alive today in the works of a new crop of Filipino designers who give the world their own perspectives of creativity. Indigenous materials used are, but not limited to, rattan, leather, wood, paper, shells, copper, brass line and cotton. The collection of bags, shoes, clothing, fashion accessories and home décor, being completely in the modern world, use original design elements and manipulation of materials that are, however, inspired by a cultural history that has existed in the Philippines since time immemorial. These new and contemporary objects are enriched by knowledge gleaned from the olden traditions.

A10 Wednesday, August 30, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

More R&D funds needed to fight animal diseases

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ollowing the Department of Agriculture’s (DA) announcement on August 11 that highly pathogenic avian influenza (HPAI), or bird flu, struck poultry farms in San Luis, Pampanga, a lawmaker called on the government to assess the long-term economic effect of the outbreak. Occidental Mindoro Rep. Josephine Ramirez-Sato, vice chairman of the House Economic Affairs Committee, said she also wants to know the budgetary requirements of concerned agencies, particularly those under the DA, to help them address the problem. Ramirez-Sato expressed concern for small farmers and consumers as some birdflu strains could kill humans. The Philippines is no stranger to outbreaks of animal diseases. Before HPAI H5N6 affected fowls in Pampanga and Nueva Ecija, the Newcastle disease killed thousands of fowls in Luzon last year. The foot-and-mouth disease, porcine epidemic diarrhea (PED) and the porcine reproductive and respiratory syndrome (PRRS) wreaked havoc on hog farms. PED, which strikes piglets, threatened to wipe out hog farms in Batangas and Bulacan in 2006. In 2008 tests conducted by the United States National Veterinary Services on samples taken from hogs affected by PED and PRRS revealed the presence of the Ebola Reston virus. Certainly, the evaluation of the economic impact of these diseases on the livestock and poultry subsector is a worthy endeavor. This will allow the government to immediately roll out interventions to help producers cope with trade disruptions caused by animal diseases. The bird-flu outbreak alone resulted in a steep decline in the liveweight price of broilers, despite the government’s assurance that the virus only affected commercial layers. Small poultry growers in affected areas had no other recourse but to cull their flocks so they could avail themselves of government assistance pegged at P80 per head. Unfortunately, their recovery would largely depend on how soon they would regain the trust of local consumers. But apart from determining the economic impact of animal diseases, Congress must also consider increasing funds for government research and development (R&D) activities. The bird-flu outbreak, while unfortunate, provides Filipino scientists an opportunity to look into it and come up with strategies and biosecurity measures to prevent future outbreaks. A good starting point would be the Bureau of Animal Industry’s (BAI) five-year development plan and strategic map, which it launched last year. One of the key programs in the BAI’s strategic map is the pursuit of more R&D activities to uplift the livestock sector. The government must also work with the private sector to set up state-ofthe-art animal diagnostic laboratories in key production areas to ensure the prompt and adequate diagnosis of existing and emerging animal diseases. The National Federation of Hog Farmers Inc. (NFHFI) sought the government’s assistance to put up these laboratories after Ebola Reston was detected in some hog farms in 2008. Hog raisers belonging to the NFHFI wanted to tap the Agriculture Competitiveness Enhancement Fund (Acef) at the time, but its loan application was not approved. The President on Monday said that he is open to the idea of slapping fines on poultry growers who will keep bird flu-infected fowls from government examination. Currently, there is no clear penalty for not reporting animal diseases, but Congress should consider enacting measures that would allow compulsory reporting and mandatory inspection of poultry and hog farms. These measures are but a small price to pay to strengthen a sector that provides livelihood to millions of farmers, vendors and retailers.

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When love is not lovelier the second time around Art Amansec

All About Social Security

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N Philippine society, it is neither illegal nor immoral for a widow to remarry after her husband dies. The same goes true with a widower. This is because death legally terminates a marriage and, if the surviving spouse remarries, he cannot be accused of bigamy or polygamy.

Our society does not demean a widow or a widower who remarries. In fact, society is happy that she or he will not be as lonely as before and it hopes that she or he will find life worth living again. Society wishes the new couple good luck and expects them to live happily ever after. A song written by Sammy Cahn and Jimmy Van Heusen and popularized by Frank Sinatra tells us, “Love is lovelier the second time around, Just as wonderful with both feet on the ground….” On the other hand, the Four Aces singing Chopin and Morris Stoloff’s work croons, “And if we should lose love, We have the right to love again….” Section 8 (k) of the SSS law, or Republic Act 8282, lists the qualified beneficiaries to a member’s death benefits: “Section 8 (k) Beneficiaries—The dependent spouse until he or she remarries, the dependent legitimate, legitimated or legally adopted and

illegitimate children, who shall be the primary beneficiaries of the member: Provided, that the dependent illegitimate children shall be entitled to 50 percent of the share of the legitimate, legitimated or legally adopted children: Provided, further, that in the absence of the dependent legitimate, legitimated children of the member, his or her dependent illegitimate children shall be entitled to 100 percent of the benefits. In their absence, the dependent parents shall be the secondary beneficiaries of the member. In the absence of all the foregoing, any other person designated by the member as his/her secondary beneficiary. Please note that under the quoted provision, the dependent spouse qualifies as beneficiary “until he or she remarries”. Needless to say, if the surviving spouse remarries, his or her pension is cut off by the SSS and can be given to other qualified beneficiaries, if there be any.

Real journalism Teddy Locsin Jr.

Free fire Continued from A1

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illions of Filipinos did not turn up at the first anniversary celebration of the world-stunning event they pulled off, when each of them left the house with their family to stand in Edsa in the dead of night alone against the Marcos dictatorship. They found the company of legions like themselves, making world history together. A commemoration is watery stuff, pale placed against the real event. Lara got the same feeling watching black kids scramble for holes at the sound of incoming artillery or people jumping to their deaths from the

World Trade Center towers. It is what a candidate feels in a short, but seemingly endless, campaign when he rushes around grabbing every hand for any vote he can get, risking shame of defeat and the

The reason behind the prohibition against a remarriage or a live-in relationship by the surviving spouse may arguably be due to the respect accorded by law to the deceased spouse and the kids who may not want the surviving spouse to be enjoying life and his money with another person, or it may be due to the need of the state to lessen the claims against the SSS funds, the better to extend its fund life. Or it may be for other noble reasons.

A surviving spouse who enters into a live-in or common law relationship is covered by the legal prohibition. He or she loses the right to the pension just the same as if he or she remarries. In this connection, former SSS President Emilio S. de Quiros Jr., in an Office Order dated February 11, 2010, enumerated six circumstances that the SSS would consider as substantial evidence of cohabitation, which will disqualify the surviving spouse from further enjoying the death-benefits pension. a) A final judgment by a competent court or an admission in a judicial or quasi-judicial forum. b) Birth of a child or children by the surviving spouse with the live-in partner. c) Use of the surviving spouse’s surname by the paramour. d) Barangay Certification attesting to the relationship. e) Living as husband and wife for

Sometimes, letting feelings push aside objectivity shows the truth better. But not every journalist is entitled to be subjective. He or she must have earned it—covering dangerous people and lifethreatening events. To earn it you must put yourself in real danger and not just the people you are interviewing by outing them. penury to get elected in this place. It is what a public-affairs journalist went out of his way to feel when he walked to the edge of an airstrip until the army officer with him nervously said, pointing at the line of trees, “We have been walking within range of sniper fire.” “I know,” he said. At a fund-raising for African relief, Lara almost vomited hearing bankers feel good forking out money

at least a year. f) Affidavits of credible persons attesting to the relationship. The reason behind the prohibition against a remarriage or a live-in relationship by the surviving spouse may arguably be due to the respect accorded by law to the deceased spouse and the kids who may not want the surviving spouse to be enjoying life and his or her money with another person, or it may be due to the need of the state to lessen the claims against the SSS funds, the better to extend its fund life. Or it may be for other noble reasons. However, some people hold the view that the prohibition is basically illegal, as it violates the surviving spouse’s Constitutional right to pursuit of happiness. They say that it may also violate his or her human right to enjoy the loving and intimate company that only a spouse can provide. They opine that the surviving spouse needs the pension to pay for his or her basic necessities: food, clothing, shelter and medicine. Why deprive him or her of the pension and make his or her life miserable just because he or she falls in love again? Is he or she marrying a millionaire who can pay for his or her basic needs? In the meantime, while the prohibition subsists and while Congress has not yet seen it fit to amend Section 8 (k) of the SSS law, surviving spouses, if they do not want to lose their right to the pension arising from the death of their spouses, should remain sadly or happily celibate.

to save lives in conflicts from which they profited. “The whole point about war,” Lara said, “is that it is intrinsic to life.” The South African photojournalist Kevin Carter took his own life after shooting the horrors in Sudan. What else was there after that? Sometimes, letting feelings push aside objectivity shows the truth better. For objectivity, the BBC bowed to public pressure and gave racism an exclusive chance to make its case. It invited only the fascist Marine Le Pen, to the exclusion of moderate candidates in the French election. But not every journalist is entitled to be subjective. He or she must have earned it—covering dangerous people and life-threatening events. To earn it you must put yourself in real danger and not just the people you are interviewing by outing them.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Wednesday, August 30, 2017 A11

Can Trump last disastrous The Appointed Actuary System internal, external political tug-of-war? Dennis B. Funa INSURANCE FORUM

Michael Makabenta Alunan

on the contrary

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NITED States President Donald J. Trump is now caught in manifold contradictions in a political policy tug-of-war on the external front and within his camp that could either spell an escalation toward possible global nuclear war or genuine peace and development with Cold War archenemies Russia and China and the rest of the world. n Internal policy cracks. Policy differences within his Cabinet are increasingly becoming visible. Vice President Mike Pence, who toured Balkan nations to promote conflict with Russia, even praising Montenegro as an “inspiration” for standing up against Russia and joining the North Atlantic Treaty Organization, while Secretary of State Rex Tillerson declared he and Russian Foreign Minister Sergey Lavrov are “finding ways to bring our relationship back closer to one another”, and are “working closely together” in the successful fight against ISIS in Syria. In Estonia Pence met with leaders of Estonia, Latvia and Lithuania and offered to deploy Patriot missiles against Russia, which has annexed Crimea from Ukraine and occupied one-fifth of Georgia. Pence’s aggressive posturing complements the US Congress sanctions bill against Russia. However, while Trump signed the bill in support for “national unity”, he declared it “flawed” for violating some constitutional provisions. Tillerson added, “I think the American people want the two most powerful nuclear powers in the world to have a better relationship.... Neither the President nor I are very happy about the Congress sanctions bill, but it will not stop us from restoring the relationship.” n ‘Russiagate’ that’s causing tension a hoax? The current tension with Russia is traced to the “Russiagate” of Russia allegedly hacking the US elections to favor Trump, which turns out to be a hoax, says the Veteran Intelligence Professionals for Sanity (VIPS), claiming Russians had no hand in the alleged hacking. It was not a hacking case, but a leak starting with the controversial Democratic National Convention (DNC) e-mails to WikiLeaks, with the Democrat leadership’s move to junk Bernie Sanders in favor of Hillary Clinton, but using the same maneuvers to blame Russia to bring down Trump as manifested in the Russiaphobia barrage ever since he took office. WikiLeaks founder Julian Assange declares it “not an Intelligence report” but “a press release for political purposes”. This is similar to the manufactured lies in history to justify wars like the “Gulf of Tonkin” incident, which triggered the US war on Vietnam; or British Prime Minister Tony Blair’s doctrine for regime change and lying about “weapons of mass destruction” that justified the US invasion of Iraq, triggering the conflagration and the Arab Spring. The same British links and George Soros’s allegiance to the British financial oligarchy that are believed behind the creeping Trump coup. Soros is believed funding the “color revolutions” like the Orange Revolution in Ukraine; Rose Revolution in Georgia; the failed White Revolution in Russia; Yellow Umbrella Revolution in Hong Kong; Arab Spring and, lately, against Trump. n New hawks’ double talk. Even within the US military and intelligence establishment, there seems to be conflicts with Trump firing FBI chief James Comey. Pentagon’s deep state has installed top generals in charge of nu-

clear weapons to ensure Trump, the perceived “megalo-wacko-maniac”, does not trigger a mad nuclear war, but on the contrary, it is Trump himself, with his “Art of the Deal” who has pushed to do business and befriend Cold War archenemies Russia and China. For him, there is nothing wrong doing business with Russia or joining China’s One Belt, One Road (Obor), now involving 130 countries. The neo-conservatives, particularly the new “Hawks” who want war, do not want Trump to unite with the big powers that will result in world peace and development, and the demise of the military-industrial complex. More so, the world’s financial oligarchs, including Wall Street, who feel threatened by Trump’s pronouncement to revive Franklin Roosevelt’s Glass Steagall Act of 1933, which brought stability to the banking system for 65 years until its repeal in 1999 that liberalized the financial markets, but resulted in erratic financial bubbles, the worst being the 2008 financial crisis. As Russiaphobia has failed, they are blaming Trump for his insensitivities over the Charlottesville incident, which is another manipulation reviving Neo-Nazis and Klan White Supremacists. n Is Trump’s card playing China’s card? Many hate Trump’s misogynist, Islamophobic and racial remarks, which his opponents are capitalizing on, but he seems to be playing his Trump card right as China shuffles its policy deck toward a paradigm shift called Obor or the New Silk Road. Recently, China’s top four banks are mobilizing savings of Chinese to redirect them to invest in the Obor projects worldwide, including those in the US. If Trump wants America to be great again, he needs to play China’s card right by joining Obor. And by helping China with building infrastructure worldwide, both will think less of hegemonic militarism that could dangerously lead to the classic Thucydies Trap, which led to the fall of the Greek civilization, following the 27-year-long Peloponnesian War due to stupid arrogance, fear and honor. China’s focus on building physical wealth is a complete contrast to the US economy focus on empty financial growth as corporate debt even increased from $8 trillion in 2008 to $14 trillion today, to drive up stock prices, and not learning from the 2008 crisis, as this is dangerously building up another financial bubble. Wall Street’s derivatives or fictitious debts have hit over $750 trillion, way above US GDP of $15 trillion a year, even bigger than global GDP of $70 trillion. Ironically, while big banks were bailed out to arrest the crisis, it is only deferring another blowup as small banks lending to real physical wealth creation were forced into bankruptcy. From 2007 to 2012 alone, scores of these small American banks closed shop. China’s Obor appears to be adopting more what Franklin Roosevelt did during the Great Depression, when he created 4 million jobs in a month’s time, equivalent to over 10 million today, says a book by Nick Taylor, entitled When FDR put the Nation to Work. E-mail: mikealunan@yahoo.com

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he Actuarial Society of the Philippines (ASP), through its Professional Standards and Review Council (PSRC), has proposed to the Insurance Commission (IC) the adoption of the Appointed Actuary System “as a means to strengthen corporate governance and protect policyholder interest”. In its proposal, the Appointed Actuary shall prepare an annual Appointed Actuary Report (AAR) for the company’s board of directors, senior management and the IC. The AAR, as proposed, shall include, among others, a commentary on “assets backing liabilities”, “returns on reserve investment funds compared to assumptions”, “commentary on product pricing”, a “summary of existing reinsurance arrangements” and a discussion on the “solvency position and risk-based capital”. An Appointed Actuary is appointed directly by the board of directors of an insurance company and is charged with documenting the liability reserve of an insurer. They are engaged by the insurer “to ensure compliance with all required reserve statutes”. They are not appointed by management to avoid management pressures. They are autonomous from the company. To ensure this autonomy, notice must first be sent to the regulator in case of resignation or termination of the actuary and must state therein the reasons for such resignation or termination. They play “an important role within insurers by providing independent advice to boards and senior management on the key financial risks facing an insurer”. Thus, the Appointed Actuary plays a key role in the protection of policyholder interests. Its main purpose “is to ensure that the board [of directors] has unfettered access to expert and impartial actuarial

advice and review, to assist with the sound and prudent management of an insurer and that the insurer gives adequate consideration to the protection of policyholder interests.” It is accountable to both the company management and the insurance regulator. He must also have access to the auditors of the company. The functions of the Appointed Actuary have expanded over the years to include giving an opinion on the overall financial position of the company. Far from just monitoring the reserves, the Appointed Actuary vouches for the solvency of the insurer. In so doing, the actuary considers several factors, such as: premium rates, nature of the contracts in force, investments and investment policies, marketing plans, level of expenses, the company’s free reserves, reinsurance arrangements, vulnerability to fluctuations, allocation of profits to policyholders and shareholders, and tax position of the company.

Hence, the appointed actuary must have access to information on all these matters. The regulator can rely, to a certain degree, on this actuarial report. The regulator can be unburdened from going into the details of sufficiency of premium rates, policy conditions and reserving standards. In a way, the regulator will have to rely on the professionalism of the appointed actuary. Following the crisis in the savings and loan industry and the occasional insolvency of a number of insurance companies in the US, the National Association of Insurance Commissioners (NAIC) adopted a new valuation law in 1990 and in it introduced a new concept called the Appointed Actuary. The standard valuation law requires an annual opinion by a qualified actuary, usually three months after the end of the financial year. The opinion would include a statement on reserves computed in accordance with accepted actuarial standards. The Appointed Actuary became responsible “for ensuring that all benefits provided by insurance contracts have adequate reserves”. To explain the concept of loss reserves, we quote the Encyclopaedia of Actuarial Science: “Because of the long-term nature of most lifeinsurance policies, the estimation of the period profit of a mutual lifeinsurance company involves more than counting the cash in the vault. The estimation requires a valuation of contingent liabilities involving future benefit payments less future premium payments, which may not be realized as cash payments for many years. The resulting estimate of the value of future liabilities must be subtracted from an estimate of the value of assets.” In other words, the actuary makes a statement on the unpaid claims liability. Loss reserves is the largest

When it rains in Ilocos, it pours Ernesto M. Hilario

ABOUT TOWN

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he House Committee on Good Government and Public Accountability recently resumed its hearings on allegations of anomalies in the Ilocos Norte provincial government headed by Gov. Imee Marcos. This time, the committee led by Rep. Johnny Pimentel, was able to unearth more irregularities on top of earlier illegal vehicle purchases totaling P66.45 million. It appears that Marcos approved more cash advances amounting to P26 million in 2012 that are unauthorized under the rules and regulations set by the Commission on Audit (COA). The questionable purchases made with cash advances totalling P26,049,723.68 consisted of the purchase of a portrait bust sculpture and services for the Paoay Museum (P2,986,344); materials and installation of precast concrete for Paseo de Paoay (P4,838,191.68); purchase of medicines and libspray 211 (P5,999,788); purchase of Panlabanan 5EC (P10,475,400); and another purchase of medicines (P1,750,000). As the hearings unfolded, it was revealed that the memorandum of agreement with the private contractor for the development of the Paoay Museum—Integrated Conservation Unlimited Inc.—was signed on July 26, 2012, or at the same time that the provincial government was still drafting its acceptance and inspection report for the project. On the P5.9-million acquisition of medicines and libspray, it was pointed out that the obligation requests for the transactions either contained no date and no payee and no signature of Marcos, and was sourced from the proceeds from the excise taxes on Virginia tobacco. Meanwhile, House Majority Leader Rodolfo C. Fariñas Sr. also

discovered that retired COA resident auditor Rizalino Franco had been receiving a P20,000 a month in consultancy fees from the provincial government, raising questions about possible collusion between him and the Ilocos Norte provincial government after the original documents on earlier questionable vehicle purchases had gone missing. During one hearing, it was also revealed that the check for the new set of uncovered cash advances— around P5.9 million—was for medicines and libspray, a form of insecticide, which a committee member said was highly irregular. Aside from this, no date was specified in the notice of award for the medicines. The P26-million worth of purchases also violated COA rules and regulations, particularly Sections 9, 45 and 46 of COA Circular 92-382 dated July 3, 1992, which states that: one, all disbursements shall be made by check except otherwise provided; two, cash payments shall be made only on duly approved payrolls/disbursement vouchers/liquidation vouchers out of regular cash advances or special cash advances; and three, regular cash advances are allowed only for salaries and wages, commutable allowances, honoraria and other similar payments to officials and employees, petty operating expenses, while special cash advances are allowed only on the explicit authority of the local govern-

House Majority Leader Rodolfo C. Fariñas Sr. also discovered that retired COA resident auditor Rizalino Franco had been receiving a P20,000 a month in consultancy fees from the provincial government, raising questions about possible collusion between him and the Ilocos Norte provincial government after the original documents on earlier questionable vehicle purchases had gone missing. ment chief executive for confidential expenses and expenditures for the activities undertaken in the field when it is impractical to pay checks. Amid the revelations of new irregularities, Fariñas said Ilocos Norte led by Marcos does not deserve the Seals of Good Local Governance (SGLG) that it had received from the Department of the Interior and Local Government (DILG). Besides violating COA rules, the purchase of medicines, like the earlier vehicle acquisitions tackled by the committee, also allegedly violated provisions of Republic Act (RA) 7171. RA 7171 refers to the law creating a special fund to provide Virginia-tobacco producing provinces, like Ilocos Norte, a share in the proceeds from the excise taxes on locally produced Virginia cigarettes. The law states that the funds allotted to the provinces can only be used for programs that would benefit tobacco farmers, such as livelihood, cooperative, agro-industrial and infrastructure projects. When Marcos attended the July 25 hearing of the committee, she insisted that the COA had cleared earlier transactions involving the procurement of 40 multicabs worth P18.6 million, five secondhand buses priced at P15.3 million and 70 mini trucks costing P32.5 million. However, the July 25 hearing and the earlier hearings of the committee, along with documentary evidence, uncovered the fact that the COA issued an Audit Observation

liability of insurers. The Appointed Actuary is tasked “to provide an actuarial valuation of loss reserves”. It is the accuracy of this loss reserves and other policy liabilities (i.e., the unearned premium reserve) that is the duty of the Appointed Actuary (reserve opinion). Thus, the Appointed Actuary System introduced the practice of using actuaries as “Instruments of Regulation”. The United Kingdom has had an Appointed Actuary System for lifeinsurance companies since 1974. It was introduced by a 1973 Act of Parliament “to continuously monitor the financial position of the assigned insurance company.” The system also exists in such countries as the US, Australia, Canada, Italy and Ireland. In Asia it is practiced in Hong Kong, Vietnam, Malaysia, Singapore, Indonesia and Thailand. In the 1992 Annual Statement Instructions issued by NAIC, the annual statement shall include a “Statement of Actuarial Opinion” giving the opinion of the actuary to the board of directors relating to loss reserves for P&C insurance companies. There is also such requirement in the life standard valuation law. Notably, in the UK and Canadian setup, appointed actuaries have the added responsibility to “blow the whistle” on companies. While the Appointed Actuary is being compensated by the company, he has the professional duty and obligation to advise the company that a particular course of action is not sound and to report such matter to the regulator. He does not become an executive of the company, and his access to the board of directors must not be hampered. Dennis B. Funa is the current insurance commissioner. He was appointed by President Duterte as the new insurance commissioner in December 2016. E-mail: dennisfuna@yahoo.com.

Memorandum (AOM), which said the use of cash advances to buy the vehicles violated COA rules and regulations. It also confirmed that Ilocos Norte’s funds representing its share of excise taxes on Virginia tobacco were used to purchase the vehicles.

Thriller

Unless you’ve been hiding in a cave for sometime, you would no doubt be well aware by now of the controversy surrounding Commission on Election Chairman Andres Bautista and his estranged wife Patricia’s allegation that he has amassed nearly a billion pesos in hidden wealth. The controversy hit the headlines in a big way, as it involved a prominent government official holding a sensitive position. What has emerged here is not only a marriage gone sour, but that the wife wants a hefty portion of their conjugal property. But it seems that certain quarters want to put politics in the forefront, even suggesting that the estranged wife should be admitted to the Department of Justice’s Witness Protection Program. It is curious that an individual of her stature, a well-known socialite and staunch believer in New Age philosophy, could be so civic-minded and so concerned with public interest all of a sudden. Is this a profound change of heart or not? All the talk about her so-called third eye and claim of finding her soulmate may have gotten her media attention, but are political considerations getting in the way? Is this part of a political plot designed to lead to one of the country’s favorite spectacles: an impeachment trial? For every explanation Andy tries to provide, two more complications grow in its place. As the plot thickens, the political motives are starting to emerge. When can we expect the truth to come out of this seemingly orchestrated spectacle? Let’s wait and see.

E-mail: ernhil@yahoo.com.

2nd Front Page BusinessMirror

A12 Wednesday, August 30, 2017

PCC OKs sale of Mighty Corp.

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By Elijah Felice E. Rosales

tive for the parties to engage in anti-competitive coord inated behavior,” the statement read. “Suf f icient competitive constraints remain from other market participants after the sale,” it added. The transaction lands the sales and distribution

net work, manufactur ing and equipment and inventories of Mighty Corp. at the hands of JTPI, while the trademark and associated intellectual property of Mighty Corp. and Wong Chu King Holdings Inc. ends up at Japan Tobacco International SA’s (JTI SA) ownership. JTIP is engaged in the business of importation, manufacturing, distribution and marketing on wholesale basis of tobacco products, while the JTI SA is in the business of manufacturing and sale of tobacco products. The PCC also green lighted the joint transaction of Rockwell Land Corp. and Mitsui Fudosan Asia Pte. Ltd., which are set to

develop, construct and sell realestate properties in the country through the joint-venture company Rockwell-Mitsui Fudosan Asia Corp. (RMFA). Rockwell and Mitsui Fudosan will purchase and subscribe to shares in RMFA, where 80 percent of the total outstanding shares of RMFA will be held by Rockwell and 20 percent will go to Mitsui Fudosan. The process of incorporation, according to the PCC, will be supervised by the Securities and Exchange Commission. The PCC, under the Philippine Competition Act, is mandated to review mergers and acquisitions in a bid to ensure maintain competition in the market.

The Taiwan Economic and Cultural Office (Teco) in Manila released a scathing statement last week, accusing the businessman of economic crimes, and asking the National Bureau of Investigation to hand him over to the Taiwanese government. But the Peza said the allegations against Chen have no bearing on the two investment projects since the businessman has no stake in the companies directly involved. “The Xianglu Development Group is just the consolidator, tasked to invite and bring in the consortia of investors that will locate in the zone. Some of the industry locators [in the zone] could be subsidiary companies,

some are owned by his children, especially by the petrochemical facility, but he has divested his shares to the company,” Plaza clarified. The actual proponent of the PCIEZ is First Pangasinan Industrial Corp., and the mixed-use tourism-IT building is a project of Uni-Link Land Properties Inc., the government official said. Both companies are 60-40 joint ventures with Filipino partners, and have Chinese, Taiwanese and Singaporean equity. Peza’s top officials, after getting wind of Teco’s allegations in July, embarked on a“fact-finding”investigation, visiting the Xiamen operations and facilities of Xianglu Development Group in August.

A comprehensive report on the visit has been forwarded to Trade Secretary Ramon M. Lopez and President Duterte. Since the Peza already cleared the two projects, Plaza said it will be collecting additional requirements for proclamation, and will submit these to Duterte for his approval. “We are in the process of collecting documents for the proclamation of the zones. These include submitting a description of the land, land-conversion certification by the Department of Agrarian Reform, the Environmental Compliance Certificate from the DENR [Department of Environment and Natural Resources], and local government unit clearance,” Plaza added.

@alyasjah

he State’s antitrust agency on Tuesday approved Japan Tobacco Philippines Inc.’s (JTPI) acquisition of the controversial tobacco maker Mighty Corp. In a statement, the Philippine Competition Commission (PCC) said the transaction does not violate any provision of the Philippine Competition Law, nor will it produce any anticompetitive effects in the market. “There appears to be no ability nor incen-

Peza. . .

Continued from A1

for the Manila project in September. The two projects have been under intense scrutiny, as they are said to have links with a businessman convicted of fraud by the Taiwanese government, Xianglu Dragon Group’s Chen You Hao. The Peza early this year lauded the massive investment to be poured by Chen’s group into the two projects, with the economic zone having a project cost of $360 billion. Just recently, however, reports have surfaced on the alleged fraudulent dealings of Chen in Taiwan.

www.businessmirror.com.ph

MARCOSES TO RETURN PORTION OF WEALTH TO SUPPORT INFRA BINGE

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resident Duterte on Tuesday said the Marcos family is now willing to return a portion of its ill-gotten wealth after the government engaged them in backchannel talks. In a speech, the President said he has sent someone to dialogue with the Marcos family on the return of ill-gotten wealth accumulated during the regime of the late President Ferdinand E. Marcos. According to Duterte, the backchannel talks were successful. “I have to select a guy so people will not say the talks are bogus. And the Marcoses, I will not name their spokesman, they said [the government can] open everything and, hopefully, return everything [the government] sees,” the President said. Duterte said the Marcoses saw the government might end up with a deficit due to the pile of public infrastructure it is planning to roll out. With this, the family saw the need to return some of its ill-gotten wealth to assist the government in its infrastructure blitz. “ They told me my deficit might balloon, as the projected

spending for [government projects] might be big. They said what they will return is not a big amount, but it can help the government and they are ready to open [it] and bring [it] back, even a few gold bars. This is not that big, this is not Fort Knox,” Duterte said. The Chief Executive added that he will accept the Marcos family’s explanation, “whether or not it is true”. He said what’s done is done, and what’s important is that the family is ready to return some of its ill-gotten wealth. The Presidential Commission on Good Government (PCGG) is tasked to recover the ill-gotten wealth of the Marcoses accumulated during the Marcos administration. However, the PCGG is on the verge of abolition under Duterte, as the government is targeting the agency for rightsizing. In July Budget Secretary Benjamin E. Diokno said the PCGG should be dissolved because its functions are no longer useful and relevant. The PCGG was created by late-President Corazon C. Aquino through Executive Order 1, Series of 1986. Elijah Felice E. Rosales