Issuu

media partner of the year

BusinessMirror

United nations

2015 environmental Media Award leadership award 2008

A broader look at today’s business

www.businessmirror.com.ph

Friday, August 31, 2018 Vol. 13 No. 321

2016 ejap journalism awards

business news source of the year

P25.00 nationwide | 5 sections 32 pages | 7 days a week

Federalism price tag higher at ₧243B

Medal Tally As of 8:30 p.m.

Country

S B Total

1 China

109 72 53

234

2 Japan

59 49 64

172

3Republicofkorea

38 46 55

139

4 INDONESIA

30 23 37

5 iR iran

19 19 20

6 Uzbekistan

15 19 19

7 chinese taipei

14 17 24

8 India

12 20 25

9 DPR Korea

9 11

10 bahrain

11 KAZAKHSTAN

10 11 38

12 thailand

13 36

13 Malaysia

11 9

14 Vietnam

15 14

15 Hongkong,china

13 17

16 Qatar

17 Philippines

1 13

18 UAE

19 Singapore

4 10

20 mongolia

21 Kyrgyzstan

6 11

By Cai U. Ordinario

@cuo_bm

HE shift to federalism could cost the national government an additional P243 billion annually, according to the National Economic and Development Authority (Neda). This is almost double the initial estimates made by experts of the true cost of shifting to federalism. Neda Undersecretary for Planning and Policy Rosemarie G. Edillon said the central planning agency recommended a 15-year transition period to shift to a federal form of government to allow the country to adjust to the structural changes brought by the new charter. “[The] incremental cost assumes the structure in the draft Charter,”

Edillon told the BusinessMirror via SMS on Thursday. “[The costs will kick in] once [the federal government is] operational, once FRs [Federated Regions], the RLAs [Regional Legislative Assembly] and the new judiciary offices are in place.” BasedonthepresentationtotheEconomicDevelopmentCouncil andsome Consultative Committee

“If the ARMM will be used as the pattern for regional governments, then this means having regional Cabinet secretaries have the rank of a Usec [Undersecretary]. In regional offices today, heads would only have a rank of Director 4. This means ranks and salaries will have to be increased.”—Edillon

(Con-com) members on Wednesday, the Neda said he recurring expense for Personnel Services and Maintenance and other Operating Expenses would reach some P156.6 billion under a minimum scenario and P243.5 billion under the maximtum scenario. However, in the first year of implementation, Edillon said the government needs to spend an

PESO exchange rates n US 53.4110

ITING airline industry estimates, Sen. Sherwin T. Gatchalian disclosed Thursday that foreign and local airlines landing at the Ninoy Aquino International Airport incur nearly P4 billion in annual losses as their aircraft are compelled to take holding patterns and go around Naia’s air space as inbound planes are unable to land due to congestion. “That P4 billion can be translated into ticket discounts if we can avoid these kinds of delays,” said Gatchalian, chairman of the Senate Committees on Energy and on Economic Affairs. In a statement, Gatchalian aired hopes short-term solutions being worked out by airport authorities to decongest the country’s main airport would “focus on the simple things” that would effectively upgrade airline performance and “improve passenger convenience.” See “Win,” A2

@BNicolasBM

Continued on A2

@butchfBM

House leader prods Senate: Pass rice tariffs measure

By Bernadette D. Nicolas

By Butch Fernandez

See “Federalism,” A2

Estimates on federal shift bloated —Con-com EMBERS of the Consultative Committee (Concom) are disputing the estimates presented on the cost of the federalism shift by the National Economic and Development Authority, describing the figures as “bloated.” According to Con-com’s presentation during the meeting, the estimated total incremental cost directly attributed to federalism features would only amount to P13.29 billion, way below what was presented by the Neda—

WIN: CONVERT P4-B AIRLINE LOSSES TO FARE DISCOUNTS

FIRST SILVER IN ASIAD JUDO Filipino-Japanese Kiyomi Watanabe shows her silver medal after the awarding for judo’s women’s -63 kgs in the 18th Asian Games on Thursday night in Jakarta. Watanabe lost to Japan’s Nami Nabekura, 0-10, in the final to miss the gold. Her silver is the Philippines’s first medal in the sport that was added to the Asiad program in the 1986 Seoul Games. Story on C3. NONIE REYES

LEADER of the House of Representatives on Thursday urged the Senate to pass the proposed Revised Agricultural Tariffication Act to address the country’s problems on rice supply and high prices. In pushing the passage of the proposed Revised Agricultural Tariffication Act, Majority Leader Rolando Andaya Jr. said: “The sooner we institutionalize a rulebased system of importing rice, the better. That’s the only way of legally bringing in rice; all other methods are smuggling. The House has passed the rice tariffication bill, the Senate should do the same,” said Andaya. The bill is currently pending before the Senate Committee on Agriculture and Food. Andaya, however, also admitted

that replacing quantitative import restrictions on rice with duties is only one of the ways to make rice affordable and abundant. “We must also look into the budget of the DA [Department of Agriculture] and overall public spending for food security. [In areas where there is] scarcity [or the rice supply is not enough], the government can rush stocks to beef up the buffer,” he added. “The long-term view is to stick to the existing road map for food security. Let us fund and implement it so there will be no repeat of the turbulence rocking the rice sector,” he said. T he law maker added pr ice speculators and hoarders should also be “fumigated and flushed out of the system.” See “Rice tariffs,” A12

n japan 0.4784 n UK 69.5892 n HK 6.8053 n CHINA 7.8310 n singapore 39.1490 n australia 39.0328 n EU 62.5443 n SAUDI arabia 14.2414

Source: BSP (30 August 2018 )

News

BusinessMirror

A2 Friday, August 31, 2018

www.businessmirror.com.ph

Tax measures must ‘move in next 8 weeks’–Diokno By Bernadette D. Nicolas

@BNicolasBM

UDGET Secretary Benjamin E. Diokno said on Thursday the government needs to work double time in the next two months to ensure the passage of all the remaining tax measures under the Comprehensive Tax Reform Program (CTRP) before the year ends.

Diokno said this is because it will be “more difficult” for Congress to have a quorum during the election season, especially when lawmakers start filing their candidacy in October. “My fearless forecast: All [tax measures will be passed] before the year ends, but there have to be serious and relentless efforts to move them in the next eight weeks,” he said in a message sent to the BusinessMirror. In a separate statement during the forum organized by the Tax Management Association of the Philippines, Diokno said he is “confident” that the remaining tax measures will be passed before the year-end because they have already filed all of them in Congress. He noted that the rest of the measures are just “minor” compared to the Tax Reform for

“My fearless forecast: All [tax measures will be passed] before the year ends, but there have to be serious and relentless efforts to move them in the next eight weeks.”—Diokno

Acceleration and Inclusion (TRAIN) Package 1 and the Tax Reform for Attracting Better and High Quality Opportunities (Trabaho bill) or Package 2. “That’s all or nothing for us this year,” he said. The remaining tax measures include Package 1B, Package 2, Package 2 Plus, Package 3 and Package 4. Package 1 of the CTRP lowered the per-

sonal income tax for all taxpayers except the richest, and slapped higher excise taxes on petroleum products, automobiles and sugar-sweetened beverages. It was passed in December 2017 and took effect on January 1 this year. Package 2 or the Trabaho bill, now undergoing deliberations in Congress, seeks to lower the corporate income tax rate from 30 percent to 20 percent by 2029 and rationalize fiscal incentives. Package 1B provides for a general and estate tax amnesty and relaxes the Bank Secrecy Law. Package 2 Plus includes measures on increasing excise taxes on “sin” products, namely tobacco and alcoholic products, mining, coal and casino operations. Package 3 talks about single valuation for real property while Package 4 is focused on financial taxes. Moreover, the goal for Package 3 is to lower the rate of transaction taxes on land while the offsetting measures include the rationalization of valuation of properties or increasing valuation closer to market prices. Package 4 aims to reduce the taxes imposed on interest income earned on peso deposits and investments from 20 to 10 percent. Offsetting measures include the harmonization of capital income-tax rates for dollar deposits and investments, dividends, equity and fixed income rates to 10 percent. It also increases the tax on stocks traded in the stock market from 0.5 percent to 1 percent on gross selling price.

Estimates on federal shift bloated–Con-com Continued from A1

Win. . .

“because the spare parts for its repair had not yet arrived.”

Continued from A1

In Wednesday’s Senate inquiry into the recent Xiamen Air runway fiasco at Naia, Gatchalian provided probers a photo he took during one of his flights showing passengers boarding a Philippine Airlines plane from the ground despite the availability of a tube or jet bridge at one of the gates of Naia Terminal 3. There are 50 terminal access points in Naia, and based on these access points, according to Gatchalian, “kaya naman po na sabay-sabay bumaba at umakyat sa mga eroplano [It is possible for riders to simultaneously disembark and board the planes].” This means, he said, that de-planing and boarding of passengers can be facilitated. “Unfortunately, this is a normal occurrence that we’re seeing in the new terminal at Terminal 3—there is a tube but it’s not being used,” the senator said, lamenting that “there were senior citizens, pregnant women, parents holding children while boarding in the rain, but the passenger tube was not used. And this contributes to the delay.” Gatchalian recalled that during a previous trip, he approached the airport maintenance crew about this but was told the passenger tube was not being used

Federalism. . . Continued from A1

additional P10 billion to finance the construction of various government offices. This was based on an estimate of P100 million per building, and the number of agencies that still do not have buildings. Edillon said computing the recurring expense involved the functions and responsibilities of the Federal Government (FG) and the FRs and their cost sharing for these functions. She added that the estimates also took note of the shared functions of the FG and FRs particularly education, health and law enforcement, among others. Both estimates included the equalization fund which accounts for 3 percent of the annual General Appropriations Act. The equalization fund aims to help FRs become economically viable. “[The cost] would be somewhere

Short-term solutions At the Senate hearing, the senator suggested to Manila International Airport Authority General Manager Ed Monreal to consider shortterm solutions that would address “such simple things that mean a lot to passengers.” “These spare parts will improve the turnaround time, will improve passenger convenience, and it will improve on-time performance of the airline,” Gatchalian added. The senator said he had also discussed the matter with aviation experts who confirmed that slow boarding and deplaning of passengers cause longer turnaround times for aircraft, effectively decreasing the “maximum events per hour,” referring to takeoffs and landings per hour, on Naia’s two intersecting runways. Gatchalian added: “Right now, the maximum at Naia is only 50 events per hour. And one of the reasons [that we discovered and heard of was that the turnaround of aircraft is too slow].” The senator suggested that transportation officials “focus on the simple things that can improve the number of takeoffs and landings of our current airports.”

in between [the two scenarios]. But our basis for saying that it will definitely be higher than the scrap and build scenario [scenario 1] is we were looking at the structure, we were looking at the staffing requirement of the ARMM,” Edillon said. “If the ARMM will be used as the pattern for regional governments, then this means having regional Cabinet secretaries have the rank of a Usec [Undersecretary]. In regional offices today, heads would only have a rank of Director 4. This means ranks and salaries will have to be increased. After that, you need a number of Asecs [Assistant Secretary] and we think that because there will be additional responsibility, there should be additional personnel as well,” she explained.

Transition

Based on Neda’s proposal, the first year of the transition period should involve the amendment of the Local Government Code and

estimates as low as P156 billion to as high as P243 billion. The figure presented by Neda in their meeting on Wednesday with the Economic Development Cluster is an annual recurring expense, Con-com said. The “different” estimates notwithstanding, Con-com said they are still “willing to reconcile” their position with the figures of other agencies. “We would like to know because they are the experts. We would like to know if there are many things that they see that we don’t see,” Con-com member Arthur Aguilar said. For his part, Con-com chair and retired Chief Justice Reynato S. Puno told the BusinessMirror they also asked for time to respond in writing to the areas of concern on the draft Charter raised during the meeting. Asked about the purpose of the meeting, Puno said, “Before Congress examines the draft, at least the Executive branch is united with respect to the fiscal formula.” The Wednesday meeting was presided by Finance Secretar y Carlos G. Dominguez III. Aside from Puno and Aguilar, Con-com members Edmund Tayao, Atty. Susan Ubalde-Ordinario, as well as Socioeconomic Planning Secretary Ernesto M. Pernia,

the Administrative Code. The amendment of these laws will start the transition process for Local Government Units to become more independent. This includes training on fiscal responsibility and accountability. It will also mean introducing courses such as Urban Planning and Governance in all state universities and colleges to prepare for the necessary manpower needed in FRs. Under Phase 1 of the transition road map, Neda said this will take one year and will involve the analysis of socioeconomic and political landscapes. It will also be the time when the government will make an accounting of government work force and functions; mapping of existing laws and regulations and policies; and identifying Constitutional issues in the 1987 Constitution that need to be addressed. Phase 2, Edillon said, will take five years to complete. It will lay

Neda Undersecretary for Policy and Planning Rosemarie G. Edillon and Budget undersecretary Laura B. Pascua were among those who attended. Sought for clarification, Aguilar said the figures they computed on the cost were based on 2018 General Appropriations Act. The components of the total estimated incremental cost included the following: Senate with 12 new senators (P2.9 billion); House of Representatives with 108 new lawmakers (P4.06 billion); Regional Assembly with 450 new Regional Assemblymen (P1.08 billion); Additional budget for Federated Region for Personal Services and Maintenance and Other Operating Expenses, which is on top of Regional Director or Staff Budget for 18 Federated Regions (less Bangsamoro) (P3.4 billion); Capital Expenditures and Contingency Fund for 18 Federated Regions (less Bangsamoro) (P850 million); and Federal Intergovernmental Commission (P1 billion). Con-com also noted that the computation does not factor in savings from the rationalization of the national bureaucracy. The Committee also expects more savings than expenditures in the long run. The proposed sharing of total government revenues is two thirds for the Federal Government and one third for Federated Regions.

down the foundation for federalism such as the adoption of the transitional period Charter and establishment of the Federal Transition Commission. This will also involve rationalizing government structures and functions; preparing regions; and civic education and public consultation. The third phase which will take three years to complete focuses on the activation of the transitional government. It means preparing the bureaucracy for genuine devolution and formulating amendments to the 1987 Constitution. The second to the last phase, which will take five years, will operationalize more developed regions based on readiness and willingness. By this time, the Bangsamoro region may become operational. The last phase will take one year and move for the ratification of the amended Constitution for full transition to Federalism. This will deactivate the transitional

Based on 2017 data, total Federal Government funds will amount to P2.2 trillion while the total for Federated Regions is P1.1 trillion. The Con-com’s draft also said the federated regions will have a share of not less than 50 percent of all collected income taxes, excise taxes, value-added taxes and customs duties—the top revenue sources of the central government. The other 50 percent will go to the federal government. The Con-com is also proposing that the federated regions collect and levy the following taxes: real property tax; estate tax; donor’s tax; documentary stamp tax; professional tax; franchise tax; games and amusement tax; environmental tax, pollution tax and similar taxes; road users tax; vehicle registration fees; transport franchise fees; and local taxes and other taxes which may be granted by federal law. Con-com said there will be “no drastic change” after ratification, since the transition will be carried out in phases with hardly any disruption in the economy and fiscal administration. The Transition Plan, the Con-com said, should seize the opportunity for the two levels of government to practice zerobased budgeting and right sizing in designing organizations, staffing patterns and plantilla positions.

government; Regional Development Councils will start serving as interim regional governments; and the continuation of the capacity building of subnational government agencies. “Even the Palace and the Concom, they realize that this is a working draft. In fact they would have wanted to have this parang revalida [like a group critique] with us before they submit it to the President,” Edillon said.

Criticisms

Edillon said, however, that the draft Constitution was able to improve on some aspects of the 1987 Constitution. This included using indigenous peoples compared to indigenous communities. The only problem there entailed the responsibility given to the FRs instead of the FG. Edillon said this could be a problem for nomadic indigenous peoples. Other concerns include the rising cost of doing business since

FRs will be the one in charge for the regulation and licensing of professionals as well as tax collection from professional taxes, among other functions. Further, costs involved in the sharing between the FG and the FRs, based on Neda’s estimates, is nowhere near the Con-com’s 50-50 sharing. Based on Neda’s estimates, the cost sharing could be 80 to 20 with the FG taking the lion’s share of the costs. “ E st i m ates show t h at t he split in the spending between FG and FR is not 50:50 but 60:40. Estimation did not include subsidy, tax expenditures, interest payments, net lending, financial expense and capital outlay. If included the split in spending would be around 80:20,” the Neda presentation stated. “ M i s m at c h i n f u n d s a n d spending, especially for FG, will impede the delivery of goods and services under its jurisdiction,” Neda added.

www.businessmirror.com.ph

The Nation BusinessMirror

Garin, 36 others face 3 new cases in connection with vaccine fiasco By Joel R. San Juan @jrsanjuan1573

HREE more criminal cases were lodged before the De pa r t ment of Ju st ice (DOJ) against former Health Secretary Janette L. Garin and 36 others in connection with the deaths of schoolchildren due to alleged complications caused by Dengvaxia, an anti-dengue vaccine. Garin was charged anew with reckless imprudence resulting in homicide under the Revised Penal Code andviolationsofAnti-TortureActand Consumer Act along with former health officials and executives of Dengvaxia manufacturer Sanofi Pasteur Inc. and distributor Zuellig Pharma Corp. The new cases were filed by the families of Clarissa Alcantara, 12; Erico Leabres, 10; and Christine Mae de Guzman, 10. The three believed to have died after being inoculated with Dengvaxia vaccine. The families of the three children were assisted by the Public Attorney’s Office (PAO), which was tasked by the Department of Justice (DOJ) to conduct fact-finding investigation and case buildup on the Dengvaxia controversy. A total of 15 criminal cases have

now been filed against Garin and other respondents before the DOJ by the PAO, which has documented over 80 cases of deaths from the vaccine. Based on the complaint, Garin and her fellow respondents are being accused of negligence through “arbitrarily, maliciously and deliberate failure to inform the Dengvaxia recipients and their parents/families of the dangers and risks related to Dengvaxia and to obtain their informed consent.” It also cited the failure of the DOH under Garin to conduct proper screening of Dengvaxia recipients and to implement an active and aggressive monitoring and surveillance over the recipients considering the risks posed by the vaccine to seronegative recipients, or those who had no history of dengue. The PAO earlier filed 12 cases involving the deaths of victims Aejay Bautista, Angelica Pestilos, Lenard Baldonado, Zandro Colite, Abbie Hedia, Jansy n Bataan, Mark Axel Ebonia, Rey Justin Almagno, Alexander Jaime, Naomi Nimura, Michael Tablate and John Paul Rafael. Garin and other respondent have already sought the dismissal of the complaints for lack of basis.

GMA says she’ll retire in 2019, won’t run in midterm elections

ouse Speaker Gloria Macapagal-Arroyo has confirmed she will not run for any position in the next midterm elections, and will retire when her term ends as Pampanga’s second district representative in 2019. Arroyo made the announcement on Wednesday in a television interview on CNN Philippines. “I am retiring. I don’t plan to run for anything in 2019. So, yes that’s sure,” she said. Arroyo said nothing can stop her from retiring next year, stressing that she is “looking forward” to it as she plans to write her own memoirs. “I think there’s a time when we should retire and I think there’s some benefits to retiring for myself.... When you reach your retirement age, you have more wisdom, you become more tolerant, you become more willing to forgive and be forgiven,” Arroyo said. The Speaker expressed confidence that her young colleagues in the lower chamber would do a “good job” in taking on leadership posts in the government. “My being Speaker now is that I’ve been exposed to so many young congressmen. Looking at how they work and seeing what they do, I’m confident that when they take over the reins of government they will be doing a good job. So it’s really time for us to retire,” she said.

I think there’s a time when we should retire and I think there’s some benefits to retiring for myself.... When you reach your retirement age, you have more wisdom, you become more tolerant, you become more willing to forgive and be forgiven.” —Arroyo Arroyo also dispelled allegations that she would become the country’s prime minister once the proposed shift to a federal system succeeds. She noted that the draft Charter proposed by the Consultative Committee (Con-com) provides for a federal-presidential system of government. “It is not in the draft submitted by the administration, and so therefore I have no plans of becoming prime minister,” Arroyo said. PNA

Editor: Vittorio V. Vitug • Friday, August 31, 2018 A3

Magnetic lifters contained shabu, PDEA chief insists By Jovee Marie N. dela Cruz

@joveemarie

espite a negative swab test result, the Philippine Drug Enforcement Agency (PDEA) on Thursday said it is still convinced that the recently found four magnetic lifters contained P6.8 billion worth of shabu. PDEA Director General Aaron N. Aquino insisted this during the hearing of the House Committee on Dangerous Drugs after his agency and the Philippine National Police conducted a swab test on Wednesday on two containers intercepted in Manila International Container Port

(MICP). These two containers were allegedly connected to the four magnetic lifters found at a warehouse in General Mariano Alvarez, Cavite. According to Aquino, swab testing cannot 100 percent prove the presence of illegal drugs. “It doesn’t mean that if you swab

something and it’s negative, there’s no drugs there,” Aquino said. “...[The magnetic lifters] contained drugs because what we intercepted [in MICP and in Cavite are]... identical, ’yung shabu lang ang wala [only the shabu was gone],” Aquino told lawmakers. He earlier said the two magnetic lifters found in MICP contained 355 kilograms of shabu with a market value of P2.4 billion. Moreover, Aquino said, drugsniffing dogs responded positively as they detected drugs in the four magnetic lifters. “K9 units can detect scents better than human beings... we believe in our K9,” he added. The PDEA K9 unit conducted sweeping operation, which yielded positive response twice from the K9. The Bureau of Customs (BOC) already said the four magnetic lifters

were tested negative for illegal drugs. Customs Commissioner Isidro S. Lapeña said the shipment was tagged red, had been x-rayed and no derogatory information about it has been found. On August 10 Aquino said that about 1 ton of shabu from Taiwan worth around P6.8 billion slipped past the BOC and other law-enforcement authorities and could already be circulating around the country. Four magnetic lifters with traces of the illegal drug were discovered by antidrug authorities at a warehouse in General Mariano Alvarez, Cavite. For his part, Surigao Rep. Robert Ace S. Barbers, chairman of the dangerous drugs committee, urged the BOC and PDEA to share intelligence information to stop the entry of illegal drugs in the country.

DILG taps barangay execs to solve garbage woes in localities

he Department of the Interior and Local Government (DILG) has ordered newly elected barangay officials to create their own solid-waste management committees that will focus on addressing environmental problems brought about by the garbage menace. In a news statement, Interior Sec-

retary Eduardo M. Año said barangay officials should be mindful of the environment and promote proper solid-waste management practices to prevent flooding, especially during heavy rains. Under Memorandum Circular 2018-112, the DILG chief ordered the newly elected barangay officials to organize and mobilize their respec-

tive Barangay Ecological Solid Waste Management Committee (BESWMC), which should lead the conduct of community solid-waste management program consistent with that of the city or municipality where they belong. The BESWMC is composed of the barangay chairman, a Sangguniang Barangay member, Sangguniang Kabataan chairman, president of

homeowners association, public/ private-school principal or the parents and teachers association president or kinatawan, a representative from the religious sector, business community, environmental nongovernment organization, junk shop’s owners organization and president of market vendors’ association as members. Jonathan L. Mayuga

briefs fox given 30 days to appeal deportation order

THE Bureau of Immigration is giving Australian nun Patricia Anne Fox another days to seek legal remedies to prevent her deportation following the agency’s denial of her motion for reconsideration. If Fox fails to seek a reversal of the BI’s resolution, her deportation will likely become final and executory. “The 30 days is for the period that she needs to file an appeal. If she fails to do so, she can voluntary present herself [to the BI] with the requirements [for her deportation,” BI Spokesman Dana Krizia Sandoval said. Earlier, Justice Secretary Menardo I. Guevarra said Fox may still appeal the ruling of the BI either before the Department of Justice or the Office of the President. Joel R. San Juan

No motorcycles with sidecar on expressways–C.A.

THE Court of Appeals has affirmed the ruling issued by the regional trial court (RTC) in Makati City that motorcycles with sidecars are banned from using limited access facilities or expressways. In a 13-page decision penned by Associate Justice Rafael Antonio Santos, the CA’s Special Twelfth Division junked the petition filed by Motorbelle Corp. and its officers seeking a declaration that Department of Transportation and Communications’s (now Department of Transportation) Department Order 2007-38 covers motorcycles with or without sidecars. The said DO provides that “only motorcycles with an engine displacement of at least 400 cubic centimeters [cc] shall be allowed to operate within the limited access facilities.” The petitioners argued that such declaration would prevent confusion among motorists and traffic enforcers. Motorbelle is the exclusive distributor in the Philippines of Ural Motorcycles with sidecars and engine displacement of 750cc. Its officers claimed that it was important that the court clarified that motorcycles with sidecars are covered by the DOTC order as most of their buyers would often ask whether their units are allowed on expressways.

They added that the confusion over the implementation of the order has also hurt the sales of Motorbelle. Joel R. San Juan

bomb prank leads to arrest of pal passenger Legacy carrier Philippine Airlines (PAL), adhering to security protocol, turned over to the Police Aviation Security Group on Thursday a male passenger bound for Cotabato from Manila after uttering a bomb-related joke. The carrier issued an apology to passengers of flight PR 2959 for the inconvenience when they were required to disembark “so that authorities could inspect the aircraft thoroughly,” according to PAL Spokesman Cielo Villaluna. “These incidents are taken very seriously, as the security and safety of the passengers are the topmost concern of the airline and the authorities,” she said. PAL also thanked a broadcast journalist and her crew, who promptly reported the bomb joke comment they heard, alerting the crew of PR 2959. Recto Mercene

japanese carrier drops anchor in subic on friday

A Japanese helicopter carrier and her two destroyer escorts will dock at the former US naval base in Olongapo City on Friday in a visit by the biggest flotilla of ships yet by Japan’s military into the country. The helicopter carrier Kaga (DDH-184) with five SH-60K patrol helicopters onboard and her escorts Akizuki-class destroyer Suzutsuki (DD-117) and Murasame-class destroyer Inazuma (DD-105) will drop anchors at the Alava Wharf in Subic at around 8 a.m. President Duterte, accompanied by Philippine Navy officials, is expected to visit the carrier, later according to Navy Spokesman Commander Jonathan Zata. Zata said the visit of Kaga and her two destroyer escorts from the Escort Flotilla Four of the Japan Self Maritime Defense Force was the third visit by Japanese military vessels in the country. Rene Acosta

A4 Friday, August 31, 2018 • Editor: Vittorio V. Vitug

Economy BusinessMirror

www.businessmirror.com.ph

DBM nixes subsidy grant to minimum-wage earners By Samuel P. Medenilla

@sam_medenilla

overnment economic managers have officially thumbed down a proposal raised by the Department of Labor Employment (DOLE) to grant financial subsidy to minimum-wage earners.

National Wages and Productivity Commission (NWPC) Executive Director Maria Criselda R. Sy told the BusinessMirror that the Department of Budget of Management (DBM) had already rejected the proposal of the DOLE to extend aid to marginalized workers similar to the Unconditional Cash Transfer (UCT) program of the Department of Social Welfare

and Development (DSWD). “DBM already gave its reply that the proposal could not be given due course until 2020 because the 30-percent revenue coming from TRAIN [Tax Reform for Acceleration and Inclusion] is already allotted for the DSWD,” Sy said in an ambush interview at the sidelines of the DOLE’s budget hearing on Thursday at the House of Representatives.

Aside from the UCT, she said the DBM also noted the fund will also be used by the Department of Transportation for its gas subsidy for public-utility vehicles through its Pantawid Pasada cash card program. The DOLE was pushing for an initial P200 monthly financial subsidy for minimum-wage earners this year. The amount was supposed to be increased gradually during the course of its implementation up to 2020. The good news, Sy said, was that the DBM and the Department of Finance (DOF) are now in the process of finalizing the joint memorandum circular, which will provide unemployed and jobless workers with noncash benefits. “The specific intervention includes training from the Tesda [Technical Education and Skills Development Authority] and discount from the NFA [National Food Authority],” Sy said.

Both benefits are expected to take effect once the concerned agencies issue the necessary implementing rules and regulations. Sy said they already provided DBM and DOF the means to identify the beneficiaries of the said programs. She said this is pursuant to the provision of Republic Act 10963, also known as the TRAIN law, requiring the government to provide social-benefit program for minimum-wage earners. To complement these interventions, Sy said, several Regional Tripartite Wages and Productivity Boards (RTWPBs) have already raised the minimum-wage rates in their respective regions. This includes the Cordillera Administrative Region, Regions 1, 3, 4A, 6, 7, 8, 9, 11, 12 and the Autonomous Region of Muslim Mindanao. “The amount [of the wage in-

crease] range from a low of P8 to a high of P56. It aims to essentially restore the purchasing power of workers,” Sy said. The labor official said the amounts approved by the RTWPBs are usually higher than the prevailing inflation rate in their areas. Meanwhile, the RTWPBs in Regions 2, 4B, 5 and 10 are now in varying stages of consultation on the possible wage hike in their areas of jurisdiction. The RTWPBs in the National Capital Region (NCR) and Caraga region are still not allowed to start their consultations since they have yet to celebrate the anniversary dates of their previous wages orders. Sy added the RTWPB in NCR has already initiated a motu propio assessment of the socioeconomic condition in preparation for the end of its one-year ban in issuing a new wage hike on October 5, 2018.

FAO to grant $22.6-M aid for PHL food security, nutrition, agri sector By Cai U. Ordinario

@cuo_bm

he Food and Agriculture Organization (FAO) will be extending a total of $22.6 million in grant assistance to the Philippines in the next six years, according to its Country Programming Framework (CPF) for 2018 to 2024. The new six-year plan aims to help the Philippines achieve greater food security, improve nutrition, and further develop the country’s agricultural sector. The FAO also aims to help the country strengthen the resilience of Filipino communities against the threats of climate change and human-induced disasters. “The FAO and our partners acknowledge that there is much more to be done to ensure that every Filipino will have access to safe, affordable and nutritious food and is resilient against threats of climate change and human-induced disasters,” Kundhavi Kadiresan, FAO assistant

director general and regional representative for Asia and the Pacific, said in a recent news statement. Based on the CPF, the FAO said about $6.4 million of the amount is already available, while the other $16.2 million will be raised by the FAO through its development partners and other sources. Of the $16.2 million, around $13.2 million will be obtained from its development partners and the remaining $3 million will be sourced from FAO’s Technical Cooperation Program. The FAO said it will also obtain funding and technical cooperation from the Global Environment Facility, Green Climate Fund and the Unilateral Trust Fund to source for a bigger share of funds for future initiatives. “This estimate does not include resource requirement for the provision of emergency relief interventions. During the last six years, an average of $1.7 million was mobilized annually for emergency relief,” the CPF stated.

The CPF has three outcomes: improved nutrition for all; expand economic opportunities in agriculture, fishery and forestry (AFF) and ensured ecological integrity, clean and healthy environment; and reduced vulnerabilities among individuals and families and just and lasting peace. The total amount resources needed to meet the first outcome is $2.76 million; the second outcome, $6.52 million; and the third outcome, $13.3 million. Under the first outcome, the FAO aims to help the Philippines meet its Philippine Development Plan (PDP) targets to decrease stunting among children under 5 years old to 21.4 percent by 2022 and decrease prevalence of wasting among children under 5 years old to less than 5 percent by the end of 2022. The outcome also aims to meet the proportion of households meeting the 100-percent recommended energy intake to 37.1 percent by the end of 2022. The proportion of subsistence

poor individuals will fall from 8.1 percent to 5 percent. For the second outcome, the FAO aims to help the Philippines attain its PDP targets of increasing the gross value added of AFF to 2.5 percent to 3.5 percent by end of 2022, and increase the growth of labor productivity of farmers and fisher folk by 5 percent to 6 percent by end of 2022. The second outcome will also help the FAO increase forest cover by the end of 2022, or above 6.8 million hectares and decrease degradation of hot spots to about 2 million hectares by the end of 2022. With regard to the third outcome, the FAO will help the country provide relief assistance to families affected by natural and human-induced calamities; communities in conflict-affected and conflict-vulnerable areas protected and developed; and increase the adaptive capacities and resilience of ecosystems. “[The framework] does not merely indicate cooperation but also our renewed commitment and partnership for development. The FAO’s development experience and expertise, which match our needs and priorities, make them a strong and dependable partner in development,” Socioeconomic Planning Secretary Ernesto M. Pernia said. “Hence, this framework is focused on areas where the FAO can make transformative contributions. These areas include human capital development, specifically the outcome on improved nutrition for all; economic opportunities in agriculture, fisheries and forestry; ecological integrity; reducing vulnerability of individuals and families; and just and lasting peace,” he added. The CPF is aligned with the priorities of the PDP 2017 to 2022, the United Nations—PFSD, the 2030 Agenda for Sustainable Development, as well as other national policies, strategies, and plans related to agriculture, fisheries and forestry sector. While reports indicate that there is enough food to feed the entire country, many Filipinos, especially children below the age of 5, continue to suffer from malnutrition due to inadequate intake of food and nutrients. The FAO will contribute to improving nutrition by strengthening capacities at the national and local levels on mobilizing resources, incorporating nutrition-sensitive food systems in development plans, and establishing or enhancing information systems related to food security and nutrition, such as the Early Warning System-Food and Nutrition Security and the Integrated Food Security Phase Classification.

D.E.N.R. to expand coverage of mining reservation areas By Jonathan L. Mayuga @jonlmayuga

he government may soon declare more areas as areas reserved for mining to ensure equitable access to mineral resources and generate more nontax revenues for the government. In a news statement issued on Thursday, Undersecretary for Mining Analiza Rebuelta-Teh of the Department of Environment and Natural Resources (DENR) said the Mines and Geosciences Bureau (MGB) is now in the process of identifying “mineralized areas and high mineral potential areas, including all existing operating mines,” for declaration as mineral reservation areas (MRA). Certain sites have undergone the process prescribed by law and are ready for endorsement to President Duterte for declaration as mineral MRAs, pursuant to Republic Act 7942, or the Philippine Mining Act, she said. “The law provides that when the national interest so requires, such as when there is a need to preserve strategic raw materials for industries critical to national development, or certain minerals for scientific, cultural or ecological value, the President may establish mineral reservations upon the recommendation of the MGB director through the DENR secretary,” Teh said. Teh issued the statement in the wake of news reports regarding an Audit Observation Memorandum (AOM) issued by the Commission on Audit (COA) Regional Office 13 on the alleged failure of the DENR to collect almost P2.6 billion in royalty fees from five mining companies in Caraga region. The AOM stated that royalties should have been imposed against the mining companies since they extract mineral resources that are owned by the government. However, Teh clarified that the present mining law requires payment of royalty fees only in areas declared as mineral reservations. “The five mining companies mentioned in the COA report are operating outside the Surigao Mineral Reservation Area. Thus, the permits granted to them do not contain any provision for them to pay a royalty,” Teh explained. Teh said that all actions of the DENR and MGB on the matter were “in accordance and consistent with existing laws and regulations.” To address the concerns of the COA and the government in general and to generate more revenues from the mining industry, Teh said the DENR is looking at the declaration of more mineral reservations to include sites where the five mining companies operate as a solution. The DENR, she added, also proposed to the Department of Finance to include the imposition of royalty fees on mining firms operating outside mineral reservations in the second package of the Tax Reform for Acceleration and Inclusion or TRAIN law. “Should an amendatory law be passed, the imposition of royalties on mining operations outside mineral reservations will be applied prospectively,” Teh said.

No delay in crafting of IRR of ease of business law, says DTI’s Lopez

rade Secretary Ramon M. Lopez on Thursday clarified there is no delay in the crafting of the implementing rules and regulations (IRR) of the ease of doing business (EODB) law. In a text message to reporters, Lopez argued his agency is on track and on time to complete the IRR of Republic Act 11032, dubbed the EODB and Efficient Government Service Delivery Act, before the October 22 deadline. His statement was in response to the Presidential AntiCorruption Commission’s (PACC) call to the Department of Trade and Industry

(DTI) to expedite the IRR. “The IRR has been drafted and [the] deadline is October 22. It is not delayed,” he explained. “It is now being presented to various stakeholders from government agencies and private-sector institutions for comments.” In a news statement, the PACC told the DTI that businessmen themselves are disappointed the IRR for the law has yet to be issued. The deadline for the IRR, however, is still on October 22, as stated by Trade Undersecretary Rowel S. Barba. Elijah Felice E. Rosales

Agriculture/Commodities BusinessMirror

www.businessmirror.com.ph

COA flags ₧22.128 billion in unliquidated DA funds

By Jasper Emmanuel Y. Arcalas @jearcalas

he Commission on Audit (COA) called out the Department of Agriculture (DA) for “unliquidated and unsupported” fund transfers amounting to P22.128 billion as of end-2017.

The funds, according to the COA’s annual audit report on the DA, were transferred to implementing agencies (IAs) and nongovernment organizations/ peoples organizations (NGOs/ POs) a decade ago. The report noted that about P1.95 billion, or nearly 9 percent, of the total funds in question are considered “dormant” a s t hese h ave been relea sed 10 years ago. “Considering that the fund transfers were granted several years ago, there is a strong pos-

sibility that the funds had already been expended and the projects/ activities should have been completed,” the state auditors said in the report. “The likelihood of occurrence of misuse of funds is also high due to lack of liquidation of the fund transfers,” they added. In terms of source breakdown, the DA’s total fund transfers to local government units (LGUs) were the highest unliquidated amount at P11.53 billion. This was followed by dues from national government agencies

which tallied to P3.6 billion over the years. The DA’s unliquidated fund transfers to government-owned and -control led cor porations and NGOs/POs accumulated to P4.116 billion and P1.121 billion, respectively. Among the factors cited by the COA report that lead to the accumulation of DA’s unliquidated fund transfers over the years were lack of monitoring and enforcement on the submission of liquidation reports. In particular, the COA report noted that the memorandum of agreement between Bureau of Animal Industry (BAI) and IAs “ lacked the prov ision on the monthly submission of the Report of Checks Issued and the Report of Disbursements to support the utilization of funds.” The COA report observed that there was a failure in the part of the management of Bureau of Soils and Water Management and Foreign Assisted Projects “to closely monitor and enforce the submission of liquidation reports by AIs.” In the case of the Cordillera Administrative Region (CAR), the

COA report said its LGUs did “not bother to liquidate the funds on time as required.” The state auditors noted that there was “weak monitoring policy over the project implementation and utilization due to lack of personnel.” The change of leadership in LGUs also affected project implementation, according to the report. The COA report said the DA also made fund transfers to IAs amounting to P54.115 million that “were not duly supported contrary to COA Circular 2012001 dated June 14, 2012.” “We recommended and the management agreed to instruct all DA offices to send demand let ters to I A s/ NGOs/ POs to compel them to submit the liquidation reports, as well as the progress reports/terminal reports and/or require refund of the unused funds, if any; and request for write-off of dormant fund transfers in accordance with COA Circular 2016 - 005,” the COA report read. The state audit agency required the DA “to submit the lacking documents for fund transfers to IAs to avoid disallowance.”

Editor: Jennifer A. Ng • Friday, August 31, 2018

LandBank, Jica roll out relending facility for Mindanao farmers

he Japan International Cooperation Agency (Jica) and the Land Bank of the Philippines (LandBank) launched a P2.12-billion relending facility for farmers and small and medium enterprises in the Autonomous Region in Muslim Mindanao (ARMM) and conflictaffected areas in Mindanao (CAAM). The facility called “HARVEST” stands for Harnessing Agribusiness opportunities through Robust and Vibrant Entrepreneurship Supportive of peaceful Transformation. The five-year relending facility will give private enterprises access to a credit line with LandBank for their capital investments, operations, expansion initiatives and agriculture-related projects that support agri-related economic activities in the region. “By improving access to finance and stimulating economic activities, the cooperation aims to help create jobs, improve living standards and contribute to peace building,” said Jica Philippines Senior Representative Yo Ebisawa. “Giving them access to finance will help sustain job creation and raise their productivity through equipment and trainings, while also boosting the region’s agro-industry sector,” he added. The facility is financed by an official development assistance (ODA) from Jica to provide concessional loans to small and medium enterprises, corporatives (plantation farm management services), large agribusiness enterprises, cooperatives and participating financial institutions in ARMM and other

conflict-affected areas. Under the program, Jica will provide human-resource training and technical assistance to LandBank, agriculture cooperatives and other participating institutions. Aside from financial support, availers of loans under the HARVEST Project will also be provided with technical assistance in the form of capacity-building trainings, seminars and market linkage initiatives. “Through this investment opportunities in agribusiness, we hope to help fuel growth in a region beleaguered by decades-old conflict and ultimately uplift the quality of lives of our fellow Filipinos in these communities,” LandBank President and CEO Alex V. Buenaventura said. In the Philippines farmers remain one of the country’s poorest sectors with poverty incidence as high as 34.3 percent, based on a 2015 report released by the Philippine Statistics Authority. Situations are worse in conflict-affected areas. LandBank and Jica signed the loan agreement for the HARVEST Project on January 12, 2017, with Japan Prime Minister Shinzo Abe and Philippine President Duterte leading the bilateral signing ceremony held at Malacañan Palace. Japan is the Philippines largest source of ODA financing. In 2017 total ODA from Japan amounted to $6.16 billion or 39.89 percent of total ODA during the period. The assistance from Japan includes $6.01 billion worth of loans and $157.07 million in grants. The total ODA received by the Philippines last year was $15.45 billion. Cai Ordinario

The World BusinessMirror

Friday, August 31, 2018

Canada stunned, worried about Trump trade threats

ORONTO—It started with President Donald J. Trump’s attacks on Canadian dairy farmers. Then Washington slapped tariffs on Canadian steel, citing national security. There was that disastrous G-7 summit in Quebec. Now it’s a new North American free-trade agreement that excludes America’s northern neighbor.

Canadians are stunned by the repeated broadsides from what has long been their closest ally and some have even begun boycotts. “Everybody is afraid,” said Margot Lajeunesse, who helps run a family-owned bistro in Quebec. “We depend a lot on the US.” About 75 percent of Canada’s exports go to the US so the tariff threat looms large after Trump snubbed Canada and reached a preliminary deal with Mexico. LaLa Bistro, owned by the Lajeunesse family, is among Canadian businesses that are boycotting California wines, American ketchup and other US products in protest. Some Canadians have canceled US vacations, particularly after Trump assailed Canadian Prime Minister Justin Trudeau at the G-7 meeting in June, calling him a “weak” and “dishonest” backstabber. “It’s not the way you treat a friend,” Lajeunesse said. “It’s revolting, agreed Raymonde Kennedy, who has ceased buying American products like mustard and clothing. “We won’t be insulted like that, by a man with no brain.” Luc Routhier, co-owner of Bar Le P’tit Canot in Quebec, also banned American wine from his eatery after Trump announced tariffs on Canadian aluminum and threatened Quebec’s dairy industry.

“I’m not even going to the US this year,” he said. “I’m a golfer, and normally I do two trips a year to the US with my buddies.” “I’ll only go back to the United States when Trump is gone.” To intensify the pressure on Canada, Trump threatened this week to impose new taxes on Canadian auto imports if Canada didn’t negotiate “ fairly.” Canada must now decide whether to sign onto an agreement it didn’t negotiate, or risk that the US and Mexico will make good on threats to do a two-way deal that excludes it. Canada could lose 60,000 jobs in a trade war and take a 1-percent hit to its GDP—a significant drop because Canada’s economy is projected to grow just 2 percent next year, according to estimates from the C.D. Howe Institute, a Torontobased think tank. Canada had been left out of the trade talks for the past five weeks, but Trudeau said there was still a “possibility of getting to a good deal for Canada” by Trump’s deadline of Friday. “But,” he added, “as I’ve said all along it has to be the right deal for Canada. We will not sign a bad agreement.” Trump expressed optimism on Wednesday that a deal could be reached. “We gave until Friday and I think we’re probably on track,”

Trump said. “We’ll see what happens. I love Canada. And you know what, I love Mexico too.... I like them both the same.” There is some optimism in Canada’s automotive sector despite the Trump tariff threats. Among other things, the USMexico deal mandates that 40 percent to 45 percent of a car be made in a country with a minimum hourly wage for auto workers of at least $16 to qualify for duty-free status—a requirement that could stem the flow of auto-sector jobs to Mexico, where auto workers earn on average just $5 an hour. “This should stop the bleeding in Canada,” said Jerry Dias, president of Unifor, Canada’s largest private-sector union. Bank of Montreal chief economist Douglas Porter said the US deal with Mexico leaves Canada in a near take-it-or-leave-it situation. Still, he noted investors have welcomed the news and that helped push the Canadian dollar up 0.5 percent. Stocks of Canadian auto parts companies were up, too. “Perhaps the clearest indicator that the market is viewing the US-Mexico deal as a positive for Canada is the strengthening of the Canadian dollar,” Porter said. Reaction in the Canadian press reflected the mixed feeling about the US-Mexico deal. “Canada scrambles as US, Mexico ink Nafta pact,” headlined the Globe and Mail, Canada’s national newspaper. The Toronto Star had a different take. “PM cool in the face of Trump’s Nafta heat,” it read. Canadian Foreign Affairs Minister Chrystia Freeland hurried to Washington this week to try to repair the damage and was in talks on Wednesday with US Trade Representative Robert Lighthizer and other US officials. “Mexico has made significant concessions which will be really good for Canadian workers. On that basis we are optimistic,” Freeland said of the talks. But the opposition Conservative Party accused Trudeau of mishandling negotiations by letting

Mexico and the United States cut a deal without Canada. “Canada is on the outside looking in while Canadian jobs hang in the balance,” Conservative Leader Andrew Scheer tweeted. Foreignaffairs critic Erin O’Toole said in a statement that “Mexico has usurped our role as the key US trade partner.” Still, the ties between the US and Canada are without parallel anywhere in the world. Trade between the two neighbors totaled an estimated $673.9 billion in 2017, with the US enjoying a nearly $3-billion surplus with Canada. Each day, about 400,000 people cross the world’s longest international border. There is close cooperation on defense, border security and law enforcement, and a vast overlap in culture, traditions and pastimes. Trudeau’s father, the late Prime Minister Pierre Trudeau, offered this take on sharing a continent with the United States. “Living next to you is in some ways like sleeping with an elephant,” he said. “No matter how friendly and eventempered the beast, one is affected by every twitch and grunt.” Perhaps the younger Trudeau had his father’s words in mind when he asserted that he wouldn’t let Canada get pushed around by the US at a news conference at the end of the contentious G-7 summit in June—a remark that enraged Trump. “He made this point that he’s going to make Canadians pay,” said Nelson Wiseman, a political science professor at the University of Toronto. University of Toronto professor Robert Bothwell said the latest trade deal excluding Canada shows Trump is more focused on exerting American economic might than reaching a fair deal with friends. “This is going to have a horrendous impact on Canada-American relations,” Bothwell said. “Canada may well have to give in to this because of the threat to the auto trade, but it’s going to leave a very bad taste.” AP

CNN stands by story despite Trump’s claim he knows nothing about meeting

EW YORK—Despite a key source backing off his assertion, CNN is sticking by a story casting doubt on President Donald J. Trump’s claim that he did not have prior knowledge of a June 2016 meeting with a Russian lawyer to get damaging information on Hillary Clinton. CNN said it had more than one source for its story, coauthored by Jim Sciutto and Watergate legend Carl Bernstein. CNN’s story, written on July 27, said that Trump’s former lawyer Michael Cohen was willing to say that he heard Trump’s son, Donald Trump Jr., tell his father about the Russians’ offer to share material about Clinton, his Democratic rival for the presidency. It also said that Trump gave the go-ahead to take the meeting at Trump Tower. If true, that would contradict what Trump and representatives have long said, that he didn’t know about the meeting until long after it happened. Such information would be of great interest to special counsel Robert Mueller a n d h i s i nve s t i g at i o n i nto R u s s i a n i nvo l ve m e nt i n t h e 2 0 1 6 Am e r i c a n presidential campaign.

Why was the story called into question?

Cohen’s lawyer, Lanny Davis, has recently taken back earlier remarks, and now says that he is no longer certain that Cohen could legitimately claim Trump knew about the meeting, and that he didn’t have information to prove it. He said he was a source for other news organizations that tried to match CNN’s original story

comment. You can’t have it both ways. That’s a big no-no in journalism.

Why does it matter?

In this August 24 file photo, President Donald J. Trump arrives to speak at the Ohio Republican Party State Dinner in Columbus, Ohio. CNN is sticking by a story casting doubt on Trump’s claim that he did not have prior knowledge of a June 2016 meeting with a Russian lawyer to get damaging information on Hillary Clinton, his Democratic rival at the time. AP/Evan Vucci

and, indeed, that he was a source for CNN. CNN, in its story on Tuesday, quoted Davis as saying, “I should have done a much better job of speaking with more suspicion than certainty, and I regret my mistake.” Some CNN critics wondered if Davis’s subsequent statement meant that CNN should retract its entire story. But CNN made a distinction: its original story did not assert that Trump definitely knew about the meeting ahead of time—only that Cohen had been making the claim while talking with prosecutors. CNN said on Tuesday that “we stand by our story, which had more than one source, and are confident in our reporting of it.”

Where is cnn vulnerable?

The network walked a delicate line in

its discussion. Its original story cited “sources with knowledge” telling the n e t wo r k a b o u t Co h e n’s c l a i m . Th e network noted in Tuesday’s story that Davis had admitted to being one of the sources for its original report. CNN technically didn’t confirm that in that Tuesday stor y—networks hate to be in a position of revealing confidential sources—but a spokesman confirmed to The Associated Press that Davis was one of the confidential sources. The problem for CNN is that the July 27 story said “contacted by CNN, one of Cohen’s attorneys, Lanny Davis, declined to comment.” Yet, if Davis was actually an anonymous source for CNN, the story should not also say that Cohen’s lawyer declined to

The president loves to rail about “fake news” telling untrue stories, and CNN arguably is his most frequent target. E a r l y We d n e s d a y t h e p re s i d e n t tweeted more criticism. “’Anonymous Sources are really starting to BURN the media.’ @FoxNews The fact is that many anonymous sources don’t even exist. They are fiction made up by the Fake News repor ters. Look at the lie that Fake CNN is now in. They got caught red handed! Enemy of the People!” He continued the attack on the network later in the day in another tweet: “CNN is being torn apart from within based on their being caught in a major lie and refusing to admit the mistake.” He also launched a personal attack against Bernstein, accusing him of “making up story after story.” CNN responded with a tweet saying it “stands by our reporting and our reporters.” Bernstein also tweeted, saying: “I have spent my life as a journalist bringing the truth to light, through administrations of both parties. No taunt will diminish my commitment to that mission.” If real doubt can be raised about CNN’s reporting on an important, damaging story regarding Trump and the Russia investigation, it gives Trump and his suppor ters major ammunition in its ongoing effort to make CNN seem like an unreliable news source. AP

www.businessmirror.com.ph | Editor: Angel R. Calso

Companies hoping to grow in US hampered by Trump’s tariffs

he maker of Sylvania light bulbs wants to expand its US manufacturing and add American jobs, just as Donald J. Trump advocates. But the president’s tariffs are getting in the way. Ledvance Llc. said proposed duties on imported LED components are putting at risk efforts to shift production from China to plants in Kentucky and Pennsylvania, states where a $10 million upgrade last year means bulbs can be made four times faster and shipped more quickly to Walmart Inc. and other customers that want US-made goods. The company is among hundreds of US firms asking for relief from tariffs, which are meant to address a trade deficit with China and allegations of intellectual-property theft. The White House says the economy is strong enough to absorb the impact of tariffs, and the long-term payoff will make the short-term pain of higher duties worthwhile. Many businesses say the tariffs will increase their costs, forcing them to raise prices for consumers and even consider moving manufacturing offshore. “ Th e a d m i n i s t r a t i o n w a n t s U S production, they want US manufacturing, and in this particular case, they’re driving the exact opposite effect,” said Jennifer Dolin, regulatory affairs manager for Wilmington, Massachusetts-based Ledvance.

$200 billion

Trump has imposed tariffs on $50 billion in Chinese imports and identified an additional $200 billion in goods targeted for duties of as much as 25 percent, ranging from chemicals and seafood to vacuums and bicycles. Those duties could take effect after a comment period ends September 6. Dolin and about 350 individuals from US companies, trade associations and other entities testified this month in six days of hearings on the duties, with most asking that products be spared. But there’s little evidence that tensions between Washington and Beijing will ease up and allow the White House to scrap tariffs. Speaking to repor ters during his announcement on Monday of a preliminary agreement with Mexico to replace the North American Free Trade Agreement, Trump said he is rejecting overtures from China to negotiate as he tries for a less “one-sided” trade policy. “It’s just not the right time to talk right now,” he said.

Reverse ratio

LEDVANCE, which was sold last year to a Chinese investment consortium and has operations in more than 140 countries, makes Sylvania incandescent, halogen, fluorescent and LED light bulbs. The company produces about 30 percent of its LED bulbs in the US and 70 percent in China. But after upgrading plants in Saint Marys, Pennsylvania, and Versailles, Kentucky, it planned to reverse that ratio and more than double production in the fiscal year starting October 1, Dolin said. The company converted traditional production lines in the US to make LED bulbs, preserving the jobs of 200 workers and adding 20 new posts. The two facilities

and supporting distribution centers employ about 650, she said. Components imported from China to make LED bulbs are among the $200 billion in goods targeted for duties, and those parts are mostly made in China with limited other options to obtain them, Dolin said. While the duties would add costs to US production, there are no additional tariffs on finished bulbs imported from China, she said.

Increasing costs

LEDVANCE is asking the administration to either remove the tariffs on the components, impose duties on imported bulbs, or both. The company’s US factories could ramp up production if tariffs on imported bulbs boost demand for its American-made products, Dolin testified last week in Washington. Th e co m p a ny d o e s n’t t h i n k t h e administration intends to disadvantage US manufacturing and just wants “a level playing field so that US production is not more expensive than buying straight from China,” she said. Some company executives also say Trump’s tariffs are increasing the cost of manufacturing in the US. But they’re reluctant to speak publicly because of the backlash firms such as Harley-Davidson Inc. have received for moving some production overseas. Trump has fired off angr y tweets about the motorcycle manufacturer and even backed a boycott after the company announced in June it’s shifting some production to sidestep tariffs from the European Union in retaliation for Trump’s separate duties on steel and aluminum imports.

1,000 jobs

Trump’s tariffs also could affect plans announced by China-based Wanhua Group to build a $1.2-billion chemical complex in Louisiana that the company estimates would create more than 1,000 jobs directly and indirectly in Louisiana, Texas and Pennsylvania. The list of $200 billion in goods targeted for tariffs includes aniline, which the company plans to impor t from China to make methylene diphenyl diisocyanate, or MDI, James Newport, general manufacturing site manager for Wanhua Chemical US Operations Llc., testified last week. It’s a chemical used primarily for foam insulation for residential and commercial construction, he said. Newport declined to discuss the status of the project, announced last year and expected to open by 2021, as well as what impact the tariffs may have. But the company has asked to have chemical feedstock products removed from the tariff list and said its investment plans achieve Trump’s goals of bringing manufacturing to the US and addressing the trade gap with China. “What we’re doing in our company is exac tly what the administration is encouraging to happen,” Newpor t testified. Bloomberg News

American lawmakers seek sanctions on China over treatment of Muslims

bipartisan group of US lawmakers is urging the Trump administration to sanction senior Chinese officials over alleged human-rights abuses against Muslims, potentially opening a new front in the geopolitical tussle between the world’s two largest economies. The 17 legislators—led by Sen. Marco Rubio of Florida and Rep. Chris Smith of New Jersey—sought the penalties on Wednesday in a letter addressed to Secretary of State Michael Pompeo and Treasury Secretary Steven Mnuchin. They want to unleash the Global Magnitsky Act of 2016, which has been employed to punish Russian oligarchs and Turkish officials, to restrict the travel and freeze the assets of top Communist Party officials. The proposal, which had been previously floated by at least one State Department official, represents the most serious response yet to reports that China may be holding as many as 1 million Muslims and others in “reeducation” camps in its far western region of Xinjiang. The bid underscores the potential for relations to deteriorate further as Trump pressures Chinese counterpart Xi Jinping over trade

and blames the dispute for derailing nuclear talks with North Korea. “There have been recent reports of deaths in custody, including suicides, in Xinjiang, and the Chinese government shows no signs of halting these rights violations,” the lawmakers said. “At a time when the Chinese government i s s e e k i n g to ex p a n d i t s i n f l u e n ce through the ‘Belt and Road’ initiative, the last thing China’s leaders want is international condemnation of their poor and abusive treatment of ethnic and religious minorities.” The lawmakers specifically called for sanctions against Xinjiang’s Regional Party Secretary Chen Quanguo, a member of China’s 25-member Politburo who has helped create one of the world’s most restrictive security regimes after a series of attacks in 2013 and 2014. The Alaska-sized area has become a land of checkpoints, police stations and security cameras, where residents must install satellite tracking systems in their cars and submit to facial scans to enter markets, buy fuel or visit bus terminals. Bloomberg News

Editor: Angel R. Calso | www.businessmirror.com.ph

Oil-rich South Sudan to resume production in war-hit region

UBA, South Sudan—Emboldened by a new peace deal, civil war-torn South Sudan says it will resume oil production in a key region next month to make up for more than $4 billion of revenue lost during years of fighting. South Sudan, with Africa’s third-largest oil reserves, will renew drilling in northern Unity State for the first time since the fields were destroyed when the conflict began in late-2013, oil ministry officials told The Associated Press. The goal is to have all five locations there operational by the end of the year and working alongside the oil fields in Upper Nile State, which operated throughout the civil war. South Sudan’s economy is almost entirely dependent on exports of oil from its 3.5 billion barrels of reserves. Most of the oil rigs were shut down or destroyed by the civil war. The fighting that killed tens of thousands of people has also devastated the economy and sent prices for everyday items soaring. Oil was central to South Sudan’s potential when it won independence from Sudan in 2011. In the seven years before the civil war began, oil brought in more than $13 billion in revenue, according to the finance ministry. South Sudan’s government is optimistic about the resumed production, even attributing the peace deal signed early this month to the country’s reserves. “Without oil there probably wouldn’t be peace right now,” Awow Daniel Chuang, the oil ministry’s director general, told the Associated Press. AP

The World BusinessMirror

Friday, August 31, 2018

Trump: Korea military drills could be restarted W

ASHINGTON—President Donald J. Trump said on Wednesday that there’s no reason to spend a lot of money on military wargames with South Korea, but warned he could “instantly” relaunch the exercises again, and they would be “far bigger than ever before.” Trump made the comment in a series of tweets that primarily took aim at China, blaming it for lack of progress on getting North Korea to end its nuclear program, following the president’s landmark summit with Kim Jong Un in June. But there was also a loaded message for Kim: mixing an expression of goodwill to the North Korean autocrat with an implicit military threat that will add to speculation over the direction of Trump’s attempted rapprochement with a long-time adversary. “The president believes that his relationship with Kim Jong Un is a very good and warm one, and there is no reason at this time to be spending large amounts of money on joint US-South Korea war games,” Trump said, citing what was presented as a White House statement. “Besides, the president can instantly start the joint exercises again with South Korea, and Japan, if he so chooses. If he does, they will be far bigger than ever before.” Trump caught military leaders by surprise in June when he announced the suspension with the South, “unless and until we see the future negotiation is not going along like it should.” He called the drills costly and provocative. The cancellation was an olive branch to Pyongyang, which has long complained that the exercises were invasion preparations. Often the North has reacted to the exercises with its own demonstrations of military might, including firing a new intermediate-range missile over Japan last year as a countermeasure to the drills. There was some hope that the gesture of shelving the fall exercises would foster goodwill and help nudge the North in the denuclearization talks. But beyond returning the potential remains of about 55 US troops missing from the Korean War, and its continuing suspension in its missile and nuclear tests, there has

been little movement from the North. As a result, the US last week shelved a planned trip to Pyongyang by Secretary of State Mike Pompeo, citing lack of progress on denuclearization, but remaining open to future talks. As doubts grow in Washington and beyond over Kim’s willingness to relinquish his nukes, Trump has been heaping blame on China, which is North Korea’s traditional ally and main trading partner. On Wednesday the president accused Beijing of pressuring the North because of current tensions in US-China trade relations, and also of providing North Korea money, fuel, fertilizer and other commodities, which he said was not helpful. China cooperated with the US last year in adopting tough international sanctions against North Korea and maintains it is still enforcing the restrictions adopted by the United Nations Security Council. But in his tweets, Trump also signaled that the US has its own military means of exerting pressure on Pyongyang. His remarks compounded confusing messages from the Pentagon over the past two days that have revived speculation over the drills. On Tuesday, Defense Secretary Jim Mattis told reporters the US might carry out drills with South Korea next spring after having canceled a major exercise this summer. He said no decision has been made on when to resume military exercises, but his statements suggested the recent cancellation might not be repeated. Several US officials acknowledged on Wednesday that planning is going forward for the spring exercises, which require months of preparation. “Routine planning continues for major US-ROK exercises on the peninsula in accordance with the normal exercise-program planning cycle,” said Air Force Col. Patrick Ryder, spokesman for the Joint Chiefs of Staff, referring to the acronym for South’s official name, the Republic of Korea. Other US officials also said preliminary work on the drills has begun, noting that it is much easier to cancel an exercise than it is to slap one together quickly. The officials spoke on condition of anonymity to discuss internal conversations. David Maxwell, a senior fellow at the

Washington-based Foundation for Defense of Democracies, said the initial planning for the exercises can begin a year in advance, including the funding, scheduling and movement of forces and units that will participate. As time goes on, planners would

nail down the war game scenario and other details. “We continue to plan for exercises, but we can stop them on a dime,” said Maxwell, a retired Army colonel who served five tours in Korea. “We can’t restart them on a dime.” AP

Friday, August 31, 2018

Banking&Finance BusinessMirror

DOF open to AIIB proposals for financing ‘BBB’ programs

By Rea Cu @ReaCuBM

HE Department of Finance (DOF) has welcomed a proposal by the Asian Infrastructure Investment Bank (AIIB) to explore the possibility of local currency financing and a variable spread facility in providing loans to help fund the “Build, Build, Build” (BBB) program of the Duterte administration.

During the meeting of the Philippine delegation with Chinese officials in China last week, Fi n a nce Sec ret a r y C a rlos G. Dominguez III pointed out that the AIIB is also eyeing possible cofinancing arrangements with other multilateral institutions in terms of implementing bigticket infrastructure projects

under the BBB initiative. AIIB President Jin Liqun assured Philippine officials that the bank will focus on “the act u a l work ” i n i mplement i ng infrastructure projects to ensure that they get completed on schedule without any hidden or added costs, according to Dominguez.

“We are quite sensitive to interest rates. Although they may seem small amounts, we do not want to reverse the trend of lowering our spreads. So it is very encouraging that you are considering variable spreads [over the Libor facility]. I was hoping for an update on it. We are happy about the local currency bonds, as well,” Dominguez told AIIB officials during the meeting. Libor, or the London Inter Bank Offered Rate, is the benchmark reference rate used for debt instruments. “We explore other possibilities and we are looking at the possibility of variable interest rate, we are looking at the possibility of local currency financing,” Jin said. Doming uez ex plained that the Philippines now has a lot of headroom in funding its massive infrastructure program through various financing arrangements, following the passage and implementation of the first package of President Duterte’s Comprehensive Tax Reform Program (CTRP), along with improved tax administration efforts of the government, substantially increased revenue collections for the first seven months of this year. The AIIB’s first project with

the Philippines, which was approved on September 27, 2017, is the $500-million Metro Manila Flood Management Projec t, wh ic h it i s cof i n a nc i ng with the World Bank. The bank also shortlisted several Philippine projects, including the Pasacao-Balatan Tourism Coastal Highway and the Camarines Sur Expressway for possible financing. The AIIB is a multilateral development bank that aims to aid the building of infrastructure in the Asia-Pacific region. It currently has 86 member-states from around the world. Earlier, the Philippine delegation met separately with China’s State Councilor and Foreign Minister Wang Yi, Commerce Minister Zhong Shan to discuss the progress of the Duterte administration’s flagship infrastructure projects and ways to swiftly address challenges in their implementation. The delegation also met with Vice Premier Hu Chunhua, who underscored the need to further strengthen bilateral relations with the Philippines through enhanced cooperation in the areas of trade, investment and people-to-people exchanges.

REUNION COURTESY OF MONEYGRAM Emilia Moncada from Trece Martires, Cavite (seen posing with MoneyGram officers) received one of 12 grand prizes at the second annual MoneyGram Idol Awards, which entitles winners to bring loved ones from abroad, who make sacrifices for their welfare, for an all-expense paid holiday to Manila. Unlike most winners reuniting with OFW family members, Emilia is going to have a long-awaited reunion with her fiancé, James Howard from the United Kingdom, who she said has been financially helping her, with MoneyGram as a reliable money transfer provider. Besides the roundtrip ticket for James from the UK, they will also receive a three-day, two-night accommodation at Solaire Resort and Casino in Manila and a tax-free cash gift of P30,000. The second annual Idol Award is MoneyGram’s way of honoring the heroism and sacrifice of OFWs who help support their loved ones in the Philippines.

www.businessmirror.com.ph

Pag-IBIG members’ H1 savings rise 4% to ₧18.5 billion T

HE Home Development Mutual Fund (Pag-IBIG Fund) has reported that its collections from member savings during the first six months of the year increased by 4 percent to reach P18.463 billion, with more members saving through its modified Pag-IBIG 2 (MP2) savings program. According to Pag-IBIG Fund, its members saved more during the first semester of 2018, with total collections reaching P18.463 billion, expanding by 4 percent from the P17.687 billion recorded during the same period last year. “Following President Rodrigo Roa Duterte’s directives to prioritize the needs of our citizens, PagIBIG Fund ramped up its savings campaign and further encouraged its members to save, and save more. This complements the housing sector’s Balai [Building Adequate, Livable, Affordable and Inclusive] Filipino communities program in ensuring that Filipinos will have a better future, in which they have the double security of home ownership and savings,” said Housing and Urban Development Coordinating Council (HUDCC) Chairman Eduardo D. del Rosario. Collections from its MP2 savings program was reported to show an increase of 175 percent reaching P1.568 billion, compared to the P571 million collected in the first half of 2017. Pag-IBIG Fund CEO Acmad Rizaldy P. Moti added that the P1.568 billion collected in the first half of 2018 under the MP2 savings program is 121 percent of the total MP2 collection in 2017 amounting to P1.3 billion. “We already surpassed the 2017 figures, as more and more Pag-IBIG

members opt to enroll with our additional savings program that is the MP2. Our MP2 savers even save more than the required minimum amount of P500 monthly,” Moti said. Moti explained that the increase in member savings can also be attributed to the enhanced campaigns conducted by the agency to encourage more Filipinos to save more through Pag-IBIG. “ The ongoing Dagdag Ipon Raffle Promo urges our members to upgrade their savings. We also offer Penalty Condonation for eligible employers to settle their obligations with Pag-IBIG Fund and enable their employees to enjoy the benefits of Pag-IBIG membership,” he added. For 2017 Pag-IBIG Fund declared an unprecedented 7.61-percent and 8.11-percent dividend rates for its Pag-IBIG 1 and MP2 savings programs, respectively. The dividends were credited to the savers’ respective Pag-IBIG 1 and MP2 accounts. The MP2 savings program provides active Pag-IBIG members and retirees with another savings option aside from the Pag-IBIG 1, which is required by Republic Act 9679, or Pag-IBIG Fund Law of 2009. It has a term of five years and can be withdrawn after maturity. MP2 savers may opt to have an annual dividend payout or have this compounded. Pag-IBIG Fund was created to help address the need of Filipino workers for a national savings program and an affordable shelter financing. It was established on June 1978 by virtue of Presidential Decree 1530 primarily to address these two important needs. Rea Cu

Case clippings

By Justice S J Ranada Jr.

MOOT CASES–rule and exceptions Generally, the courts do not entertain petitions which have been rendered moot. The exceptions are where: a) there was a grave violation of the Constitution; b) the case involved a situation of exceptional character and is of paramount public interest; c) the issues raised require a formulation of controlling principles to guide the Bench, the Bar, and the public; d) the case is capable of repetition yet evading review. City v Masweng 04 Jul. 2018

GR 195905 Martirez, J

BIR files raps vs 4 alleged Associations learn from retailers, too delinquent taxpayers

HE Bureau of Internal Revenue (BIR) announced in a statement on Thursday that it has filed four separate criminal complaints with the Department of Justice against delinquent taxpayers for willful failure to pay taxes under the National Internal Revenue Code of 1997, as amended (Tax Code). Charged for violating Section 255 of the Tax Code was Sonie Crisistomo Gagay, of 400 M. Arce Street, Barangay 75, Zone 7, Heroes Del 96, Caloocan City, who is engaged in the business of manpower services. She is being sued for a total deficiency tax liability for taxable year 2011 amounting to P2,745,332.42, exclusive of interest and surcharges. A lso charged for v iolating Section 255 in relation to Sections 253 (d) and 256 of the Tax Code were Just Best Sales Cor p. (J B SC) a nd its cor po rate officers—presidents Jerry Mariano (2013 and 2014) and Angeles G. Manuel (2015). JBSC is engaged in impor ting and wholesaling of meat and other related products. JBSC is being sued for a to-

tal deficiency ta x liability of P1,082,088,860. BIR Caloocan City records of investigation showed that the respondents were served the corresponding Letters of Authority, Requests for Presentation of Records, Subpoena Duces Tecum, Preliminary Assessment Notices, Final Assessment Notices, Formal Letters of Demand with details of discrepancies, and final decision on disputed assessments but failed to pay, to protest and submit relevant supporting documents to either substantiate their claims or to refute said assessments, or to appeal in court the said assessments, hence making the said assessments final, executory and demandable. The subsequent issuance of Preliminary Collection Letters, Final Notices Before Seizure, Warrants of Distraint and/or Levy, and Warrants of Garnishment were ignored by the respondents, and the said assessments remained unpaid. The cases against the delinquent taxpayers are under the Run After Tax Evaders program of the BIR under the leadership of Commissioner Caesar R. Dulay. PNA

ETAILERS differ from manufacturing companies in that they do not produce any tangible product. They purchase merchandise from these manufacturers in large quantities for resale to consumers at a profit. The domestic retail industry in the country, represented by the Philippine Retailers Association (PRA), is mature and highly competitive. So, what have retailers got to do with associations? I recently read with interest the “KPMG Global Retail Trends 2018” and thought I’d share with you the top lessons from the report for retailers which are relevant, to associations, as well: n Customer experience is key to success. The commercial battleground is no longer just price, product, or efficient supply chain. It is now customer experience. This is an important insight for associations. Members are also customers who expect great experiences from their associations: be it a conference, a training course, a publication, or a networking event. n Don’t give up on brick and mortar. Understand the balance of digital and e-commerce required in order to reach your customer. Many associations simply “ jump into the online bandwagon” because it is the fad. But consider that associations are first and foremost, “social” organizations that still need face-to-face interaction among members. Understand how AI can help your business. In 2018, there will be more AI adoption. Retailers need to understand where AI fits within their organization. Similarly, associations

Association World Octavio Peralta have to explore what AI can do for them. My column last August 24, 2018 (AI: Association Intelligence) suggests how associations, through member engagement techniques, can benefit from AI. n Look externally to help build your technology. The best way for many companies to achieve successful implementation of technologies is to look outside their own four walls. Associations need not work in isolation. The Philippine Council for Associations and Association Executives (PCAAE), the “association of associations” in the country, provides sharing of information, ideas, and experiences in many aspects of association governance and management, including technology. n Stay true to the core of your brand. Customers want authenticity and transparency. They want to know exactly who they are buying from. Studies show that remarkable associations do not deviate from their avowed purpose, advocacy, or cause—their key branding asset—even in challenging times and this makes their members “stick to them as a community.”

n Understand that the customer has changed. It is important to understand that the old ways of doing customer segmentation aren’t sufficient. You need a multidimensional view of your customer. For associations, developing “member personas,” i.e., getting to know your members through research, surveys and interviews, help determine what products and services would appeal to members. More on this in my column on February 21, 2018 (Association Member Personas). R ecog ni ze that c u stomer ex pec tat ions have changed and retailers who don’t meet expectations are no longer contenders. Disruption is here to stay. Associations will be vulnerable if they do not adapt quickly to cater to their members aspirations and expectations. The column contributor, Octavio “Bobby” Peralta, is concurrently the secretar ygeneral of the Association of Development Financing Institutions in Asia and the Pacific and CEO and founder of the Philippine Council of Associations and Association Executives. PCA AE is holding its 6th Associations Summit on November 23-24, 2018, at the Subic Bay Exhibition and Convention Center. The event is hosted by the Subic Bay Metropolitan Authority and supported by the Tourism Promotions Board. PCA AE enjoys the support of ADFIAP, TPB and the Philippine International Convention Center. E-mail: obp@adfiap.org

www.businessmirror.com.ph

The Regions BusinessMirror

Editor: Dennis D. Estopace • Friday, August 31, 2018

Govt rejects Region 8’s P94-B proposed infra projects

ACLOBAN CITY— The central government disapproved the funding for P94 billion worth of infrastructure projects in Eastern Visayas, which were endorsed by the Regional Development Council (RDC) for implementation in 2019. Of the P123.46-billion projects proposed by four regional offices and backed by the region’s highest policy-making body, only P29.49billion projects have approved funding next year, the National

Economic and Development Authority (Neda) disclosed in a meeting on Wednesday. Neda Regional Director Bonifacio Uy, RDC vice chairman, said every year not all project

proposals are accepted, also citing the cash-based budgeting system to be implemented by the national government starting next year as reason for the limited disbursement of funds. For the Department of Public Works and Highways, only P27.4 billion, out of the P120.33 billion endorsed by the RDC, has been included in the 2019 National Expenditure Program (NEP). Most of the unfunded projects are roads leading to airports, seaports and economic hubs. The RDC also endorsed P2.22 billion for the improvement of airports and seaports under the Department of Transportation (DOTr), but only P1.11 billion was considered for financing. Out of the 10 airports pushed by the DOTr for upgrading in

2019, only the Catbalogan Airport in Samar and the Tacloba n A i r por t w i l l get budget next year. Some P450 million will be set aside to extend the Catbalogan Airport runway and P50 million for building the Tacloban Airport’s control tower. The Maritime Industry Authority will only get P79.93 million, out of the P140 million endorsed by the regional body. It will only finance the agency’s regulatory and supervision program. Also disapproved is the long-awaited construction of its P80 million regional office building. Of the 10 projects of the Department of Information and Communications Technology with P77.46-million budget requirement, only one was considered

for funding under NEP. This is the P18.79 million for telecommunications management and enforcement program. The Department of Budget and Management prepares the NEP with recommendations from Cabinet secretaries. It contains detailed proposed programs submitted to assist Congress in the review and deliberation of the proposed national budget for the legislation of the annual appropriations measures for the next fiscal year. Oliver Cam, cochairman of the RDC infrastructure and utilities development committee, has renewed the body’s call for the 13 members of the House of Representative from the region to strongly lobby for the proposed development projects.

“We have done our part and we fought for it. It all points back to national level offices. I hope our congressmen will really push for the realization of these development projects,” Cam said. He urged lawmakers to personally attend the regular RDC advisory committee meeting and not just send their staff to listen to presentations of key RDC members. The meeting is held twice a year at the House of Representatives in Quezon City. The RDC organized the committee to advise, assist and support it in discharging its functions. It is composed of key RDC leaders and members of the House of Representatives, who have signified their intention to join the body. PNA

Hinatuan Bay in Surigao del Sur NIA, Daewoo to ink Jalaur now free of red tide–BFAR project contract next week T

Photo shows a market vendor selling various types of shellfish. The Bureau of Fisheries and Aquatic Resources has removed Hinatuan Bay in Surigao del Sur from the list of areas where shellfish is unsafe to eat. FILE PHOTO

he Bureau of Fisheries and Aquatic Resources (BFAR) has removed Hinatuan Bay in Surigao del Sur from the list of areas affected by the toxic red tide. In its Shellfish Bulletin 22 dated August 29, the BFAR removed Hinatuan Bay from the list of areas where shellfish should not be eaten following the laboratory tests it conducted on the water sample from the area. The BFAR said, however, that a number of areas in Eastern Samar, Surigao del Sur, Bohol and Palawan remain positive for paralytic shellfish poison that is beyond the regulatory limit. The agency attached to the Department of Agriculture (DA) urged the public to refrain from eating shellfish collected at Ma-

tarinao Bay in Eastern Samar; Lianga Bay in Surigao del Sur; the coastal waters of Dauis and Tagbilaran City in Bohol; and Puerto Princesa and Honda Bays in Palawan. “All types of shellfish and Acetes sp. or alamang gathered from [these] areas are not safe for human consumption,” the BFAR bulletin read. “Fish, squids, shrimps and crabs are safe for human consumption provided that they are fresh and washed thoroughly, and internal organs such as gills and intestines are removed before coooking,” it added. The Bfar said all other areas and coastal waters remain free from red tide. These include the coastal waters of Cavite, Las Piñas, Parañaque, Navotas, Bula-

can and Bataan in Manila Bay. Eating shellfish products with red tide can cause paralytic shellfish poisoning (PSP), an illness that can cause death. Early symptoms of PSP include tingling of the lips and tongue, which may begin within minutes of eating poisonous shellfish or may take an hour or two to develop. Depending upon the amount of toxin a person has ingested, symptoms may progress to tingling of fingers and toes and then loss of control of arms and legs, followed by difficulty in breathing. If a person consumes enough poison, the muscles of the chest and abdomen become paralyzed. Death can result in as little as two hours, as muscles used for breathing become paralyzed.

he signing of the contract for the construction of the P11.2-billion Jalaur River Multipurpose Project Phase 2 (JRMP II) is set for September 3, Sen. Franklin M. Drilon said on Thursday. The contract will be signed by the National Irrigation Administration (NIA) and the project’s contractor, Korean firm Daewoo Engineering & Construction Co. Ltd. “It’s finally happening,” Drilon said in a statement. “This signals the start of the project which will bring back rice productivity in the Western Visayas region, spur the local economy and the ecotourism industry, and increase employment opportunities, particularly in Iloilo.” The contract signing will be held at the NIA Building in Quezon City. Aside from Drilon, the event will be graced by officials of the NIA, led by Administrator Ricardo R. Visaya and Region 6 Director Gerardo P. Corsiga; and officials of the Korea Export-Import Bank (Kexim) and Daewoo. It was Drilon who initiated the project in April 2011, when he met with the Korean government for the funding requirement. With the JRMP II, Drilon said he is confident that agricultural production in the region will improve. Once completed, the first large-scale reservoir dam outside of Luzon will provide uninterrupted irrigation water supply to 32,000 hectares of farmland, benefit more than 783,000 farmers and increase annual production of rice to 300,000 metric tons from 140,000 MT in Iloilo. The project will also generate approximately 17,000 local jobs equivalent to P1.3 billion in basic wages per year, he added. Drilon also said he is confident that the project will not suffer from any more delays given the NIA and Daewoo’s commitment to fast-track the implementation of the project. “I share the optimisim of NIA

photo from nia.gov.ph

that we can already proceed at the soonest with the groundbreaking and actual construction,” Drilon said. JRMP II includes the construction of 109-meter Jalaur high dam, 38.5-meter afterbay dam, 10-meter Alibunan catch dam, 80.74-kilometer high line canal; generation of new areas for irrigation; and rehabilitation of existing irrigation system. Drilon said agriculture in Western Visayas has suffered a decline for the past years, citing the contribution of agriculture (in real terms) to the gross regional domestic output of the region on a downward trend—from 14.1 percent in 2010 to -3.3 percent in 2013 due to a sharp decline in sugarcane and palay production. He noted that the volume of production for palay has been declining in Western Visayas— from 2.292 million metric tons (MMT) in 2012, 2.09 MMT in 2013 and 2.052 MMT in 2014. “Agriculture is the second-biggest contributor at 24.4 percent to the domestic output of Western Visayas, next to services at 57.2 percent. Hence, a decline in

employment in the sector has a bearing on the poverty incidence in the region and on the economy,” Drilon said. He said the decline in farm output affected agricultural employment in the region, from 5.63 percent in 2011 to -2.89 percent in 2013. JRMP II was first implemented by NIA in the 1960s after the fourth Congress passed Republic Act 2651, which provides for the construction of the JRMP in Iloilo. Its first phase was completed in the 1980s but its second phase was derailed for over five decades. Drilon said it was the Korean government, through its ExportImport Bank’s Economic Development Cooperation Fund, which extended P8.95-billion as official development assistance to implement the project through. The government counterpart fund is P2.2 billion. Drilon said the interest rate for JRMP II is the lowest the country can get at 0.15 percent compared to the loans being offered by China, which carries an interest rate of 3 percent.

A10 Friday, August 31, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

www.businessmirror.com.ph

editorial

Let’s drink to this!

bout 2.4 billion people in the world drink alcohol. If you’re one of them, take note: A study published in the journal The Lancet said that there is no amount of alcohol intake—whether you drink beer, gin or wine—that is safe for your overall health. With a kilometric title—“Alcohol use and burden for 195 countries and territories, 1990-2016: A systemic analysis for the Global Burden of Disease Study 2016”— the study combined almost 700 sources to estimate the most accurate levels of alcohol consumption worldwide, even trying to find drinking that might otherwise be missed (from tourism, for instance) to predict the harm from alcohol. The study said that alcohol was the leading risk factor for disease and premature death in men and women between the ages of 15 and 49 worldwide in 2016, accounting for nearly 1 in 10 deaths. For this study, a drink was defined as “10 grams of pure alcohol, as much as you might get in one ounce of spirits [a small shot glass] that is 40 percent alcohol; 3.4 ounces of wine that’s 13 percent alcohol; or 12 ounces of beer that’s 3.5 percent alcohol.” “This study is a stark reminder of the real, and potentially lethal, dangers that too much alcohol can have on our health and that even the lowest levels of alcohol intake increase our risks,” Helen StokesLampard, chairman of the Royal College of General Practitioners in the UK, said in a statement. Alcohol lovers, however, have their own colorful defender. David Spiegelhalter, Winton professor for the Public Understanding of Risk at the University of Cambridge, said in a statement: “Given the pleasure presumably associated with moderate drinking, claiming there is no ‘safe’ level does not seem an argument for abstention. There is no safe level of driving, but governments do not recommend that people avoid driving. Come to think of it, there is no safe level of living, but nobody would recommend abstention.” The Alcohol Information Partnership, a group comprising eight of the world’s biggest liquor companies, said in a statement that “nothing in this study challenges the array of studies suggesting that choosing to drink moderately is associated with a decreased risk of some health issues and a lower risk of death. We advocate sensible drinking by those who choose to drink and support consistent, evidence-based advice, which enables people to make their own informed choices about alcohol.” Some notable findings: For each set of 100,000 people who have one drink a day per year, 918 can expect to experience one of the 23 alcoholrelated problems in any year. Of those who drink nothing, 914 can expect to experience a problem. This means that 99,082 are unaffected, and 914 will have an issue no matter what. Only 4 in 100,000 people who consume a drink a day may have a problem caused by the drinking. For diabetes and heart disease, the risks actually go down with light or moderate drinking. The authors argue that this result is overrun, however, by risks for things like cancer and tuberculosis, which go up. But for many individuals, the risks for diabetes and heart disease are much higher than those for cancer and tuberculosis. We don’t know how this information will affect alcohol lovers in the Philippines. We guess there’s no problem for light or moderate drinkers. But to those who drink heavily, there’s wisdom in this adage—alcohol is a perfect solvent: It dissolves marriages, families and careers. Since 2005

BusinessMirror A broader look at today’s business

Timbre James Jimenez

spox

imbre. The word has its origins in music, referring to the quality of a note that distinguishes it from another, even if the two have the same pitch and loudness. When a sound is described as being rich, or warm, or perhaps tinny, that’s a description of timbre. The word, however, has also been applied to politics for as long as I can remember. Specifically, it is used in discussions about people aspiring for the presidency, although the term can be used in conjunction with any elected office, like senator, for instance. What actually constitutes timbre, however, isn’t too easy to pin down. In some cases, it can refer to someone’s track record for getting the job done; in other instances, timbre can be used to refer to one’s perceived erudition or intelligence; and in yet other cases, timbre can simply mean that a person seems to embody what voters want in an elected official. As

you can imagine, there was a time in politics when timbre was a significant factor in predicting whether a candidacy would fly high or go down in smoke. Increasingly, however, it is starting to feel like those days are irretrievably gone. Today, sometimes it seems that jackasses have the upper hand. You can thank social media for that.

A creative economy in the Philippines

✝ Ambassador Antonio L. Cabangon Chua Founder Publisher Editor in Chief Associate Editor News Editor Senior Editors

Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos Dennis D. Estopace Ruben M. Cruz Jr. Angel R. Calso

Creative Director Chief Photographer

Eduardo A. Davad Nonilon G. Reyes Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Marvin Nisperos Estigoy Aldwin Maralit Tolosa Rolando M. Manangan

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

www.businessmirror.com.ph

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

Better Days

Lourdes M. Fernandez

Online Editor Social Media Editor

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

Sonny M. Angara

T. Anthony C. Cabangon

Jennifer A. Ng Vittorio V. Vitug

The basic calculus of politics is, and always will be, that the most popular candidate wins. In the old days, popularity typically meant you had done something massively significant and good—good for the nation, for the community, for the people—such that you made it to the news. The whole idea was to insinuate yourself into the national conversation. Once your name was in the papers or on television, people would know your name and talk about you and probably remember to vote for you on election day. No longer. The rise of social media has all but supplanted the news as the primary engine of fame. Sure, you can still become popular through the traditional route of getting your name in the papers because you did something exceedingly well, but why bother when it is far easier to turn yourself into a meme? With any sort of luck, your gimmick can become viral, and thanks to our cultural obsession with fame, you can eventually be thought of as a legitimately awesome person. With apologies to Tevye from Fiddler on

ome say that where “oil was the primary fuel of the 20th-century economy,” creativity is what drives economic growth and development in the 21st. A 2010 UN report noted that between 2000 and 2010, so-called creative industries grew at an annual pace that was more than twice of services, and more than four times of manufacturing in many Organisation for Economic Co-operation and Development (OECD) and developing countries. In 2015 creative industries represented 3 percent or around $2.2 trillion of the world’s GDP and employed 30 million people worldwide per United Nations Educational, Scientific and Cultural Organization (Unesco) estimates. Experts claim that this segment of the world economy will only keep on growing, as it is believed to be immune to developments in automation and artificial intelligence, which have put the manufacturing sector on the edge. These industries—which the Unesco defines as sectors which produces, reproduces, promotes and distributes goods, services and activities of creative, artistic or heritage-related nature—have, in fact, become

the bread and butter of many cities. San Sebastian City in Spain moved away from its origins as a fishing village, and through the years became a capital in the culinary world. The city holds the highest number of Michelin stars per square meter in the world. Highly regarded events, such as the San Sebastian International Film Festival, are also being held in this tiny city. Buenos Aires in Argentina has also benefited from a creative economy boom. A 2016 World Economic Forum report said that 9.3 percent of the city’s GDP and 9.1 percent of its work force can be attributed to its creative industries. Last year the Department of Trade and Industry (DTI) reported

that in the Philippines, the industry contributed over P600 billion and employed 14.4 percent of the labor force. Thankfully, the creative economy’s appeal and benefits haven’t been lost in our country. The DTI, through the Center for International Trade Expositions and Missions and the Design Center of the Philippines, spearheaded numerous activities, such as the Create Philippines and the Asean Creative Cities Forum and Exhibition, to give support and avenue for individuals, groups and businesses to penetrate this lucrative market. However, this industry still gets “overlooked” sometimes, despite its already huge impact. The government should take advantage not only of our young population but also of their propensity for creativity. Hence, we should jump-start policies and programs that incentivize the industry’s growth and development. The country could employ the strategy of Buenos Aires, wherein the city established the Creative Districts Initiative in 2008, which provided tax incentives to creative businesses. There is also room for our government to invest more in training and promotions. In New York City the city government has been working with industry leaders to train both

the Roof, “when you’re famous, they think you really know.” Even better, if you get enough online notoriety, you can even become newsworthy and maybe even snag a few seconds of airtime on network news. None of this even has to be organic. Virality, which was a term that originally described the phenomenon of online content being shared from person to person (like a virus), used to happen naturally. People either liked your content or they did not; they either shared your tweet or Facebook status or they ignored it. But now, anything can be made to go viral. And once content has been shared enough times, it no longer matters that the first few shares or retweets were totally bogus. In the end, anyone who wants it hard enough can now actually worm his way into the national conversation—and eventually parlay that into an elected office— without having to achieve anything actually noteworthy; without ever having shown timbre. And that is a terrible place for a democracy to be.

aspirants and novices on film, television and media production. The South Korean government—cognizant of the popularity of K-pop worldwide—established over 25 Korean cultural centers to further support the rising trend. Some thought should also be paid on giving incentives to artists, animators, filmmakers, musicians, dancers, writers and other creative professionals who win international competitions for their creative works. An incentives scheme could be formulated, similar to what’s in place right now for our national athletes—some of whom (like Hidilyn Diaz) will be receiving cash gifts for garnering medals in the recent 2018 Asian Games. John Newbigin, former Special Advisor to the UK Minister for Culture, once said that in a time of rapid globalization, many around the world recognize that “the combination of culture and commerce that the creative industries represent is a powerful way…of helping [a country or city] stand out from its competitors.” I’m hopeful that this is a bandwagon the Philippines jumps right into soon.

Angara was elected in 2013, and now chairs the Senate committees on local government, and ways and means. E-mail: sensonnyangara@yahoo.com| Facebook, Twitter and Instagram: @sonnyangara

Opinion BusinessMirror

www.businessmirror.com.ph

South Korean leader pushes ahead on plan to meet Kim By Choe Sang-Hun New York Times News Service

EOUL, South Korea—President Moon Jae-in of South Korea sees a more urgent need to travel to North Korea next month and meet with its leader, Kim Jong Un, now that Secretary of State Mike Pompeo’s planned trip there this week has been canceled, Moon’s office said on Wednesday. North and South Korea had earlier agreed to hold a third summit in Pyongyang, the North Korean capital, next month. But Moon had hoped that Pompeo would break a logjam in talks over denuclearizing the North, making it easier for him to push his agenda of increasing economic and other inter-Korean ties when he sat down with Kim. Moon’s plan was cast into doubt after President Donald J. Trump on Friday abruptly canceled Pompeo’s trip. But on Wednesday Moon’s office said he was intent on working as a mediator between Kim and Trump, just as he helped broker their first meeting in June. “Now that North Korea and the United States remain deadlocked, a new South-North Korean summit meeting, if anything, will play an even bigger role in helping resolve problems and overcoming obstacles,” Kim Eui-kyeom, a spokesman for Moon, said Wednesday. In Washington on Tuesday Heather Nauert, a State Department spokesman, did not voice an objection to another meeting of the Korean leaders but reminded Moon of his repeated promise to keep any progress in inter-Korean relations tied to progress in denuclearizing the North. US analysts have raised concerns that Moon’s eagerness to improve inter-Korean ties may undermine Washington’s efforts to apply “maximum pressure” on the North to denuclearize, although Moon’s aides called such fears unwarranted. Moon’s office reaffirmed that he was keen to meet with Kim, doing so a day after Defense Secretary Jim Mattis said that the Pentagon had “no plans at this time to suspend” joint military exercises with South Korea. Coming only days after the cancellation of Pompeo’s trip, Mattis’ comments were widely taken as indicating that the Pentagon may revive the exercises. After Trump met with Kim in Singapore, the US and South Korean militaries nodded to diplomatic prog-

ress by suspending several of their major annual joint military exercises. North Korea has traditionally protested these drills, calling them rehearsals for invasion. Both Seoul and Washington have said they have not decided about future exercises, including large-scale drills scheduled for next spring, indicating that it will depend on whether North Korea moves toward denuclearizing. On Wednesday the South Korean government played down the significance of Mattis’s comments, saying they reiterated an existing American-South Korean joint policy. It said there had been no discussion between the allies on whether and when t o resume major military exercises. In his meeting with Trump in Singapore, Kim offered a vague commitment to “work toward the complete denuclearization of the Korean Peninsula” in return for Trump’s commitment to build “new” bilateral ties with North Korea and a “lasting and stable peace regime” on the peninsula. But bilateral talks have since stalled over differences over how to carry out the deal, leading to the cancellation of Pompeo’s North Korea trip. The latest hitch in the talks centers on the North’s demand that the US join the two Koreas in jointly declaring an end to the 1950-1953 Korean War, Suh Hoon, director of Seoul’s National Intelligence Service, told a closed-door parliamentary hearing on Tuesday, according to lawmakers who briefed journalists on it. North Korea is seeking an end-of-the-war declaration as a prelude to negotiating a formal peace treaty to replace the armistice that halted the war. But Washington insists that before such a declaration is made, North Korea must promise to dismantle its nuclear weapons, Suh was quoted as saying. North Korea says, as it has for years, that it will move toward denuclearization only in “phases” and in exchange for “simultaneous” reciprocal concessions from Washington. When Pompeo visited Pyongyang last month, North Korea accused him of making a “unilateral and gangsterlike demand for denuclearization.” It even shrugged off the significance of Washington’s decision to suspend military exercises with the South, calling it “a highly reversible step, which can be resumed anytime.”

Trump lawyer is ushered out via abrupt tweet By Julie Hirschfeld Davis, Michael S. Schmidt & Maggie Haberman New York Times News Service

ASHINGTON—President Donald J. Trump surprised Donald F. McGahn II, the White House counsel, on Wednesday by abruptly announcing that McGahn will be leaving his job this fall, effectively forcing the long-anticipated exit of a top adviser who has cooperated extensively in the investigation into Russian election interference. The president made the declaration on Twitter without first informing McGahn, according to people close to both men. It came 11 days after The New York Times reported the degree to which McGahn—who was by Trump’s side at major moments as the president sought to keep control of the Russia inquiry—has emerged as a key witness in the investigation. McGahn’s departure leaves the White House without one of the few senior advisers who has been willing to push back against Trump. It also raised the prospect of further West Wing exits, particularly in the White House Counsel’s Office, where McGahn has had a loyal staff.

Trump’s decision did not appear to be a direct response to the disclosure that McGahn had been cooperating closely with the special counsel, Robert S. Mueller III—a fact his team was aware of— though its timing inevitably led to questions about whether the president was cutting loose an aide who he believed had provided damaging information about him. But on Wednesday afternoon at the White House, Trump praised McGahn and said he had nothing to fear about what his counsel had told Mueller, even as he appeared to confirm that he was not completely aware what that was. “I don’t have to be aware,” Trump said. “We do everything straight. We do everything by the book. And Don is an excellent guy.” In his tweet on Wednesday morning, Trump said McGahn would leave after the Senate votes on the confirmation of Judge Brett M. Kavanaugh to fill the vacant seat on the Supreme Court, the culmination of a quiet but intensive effort McGahn has directed to install scores of conservative federal judges. McGahn’s departure has been rumored for months. Trump had grown tired of seeing reports that McGahn might leave, according to people familiar with his thinking.

Friday, August 31, 2018 A11

Small-scale corn farmers’ misfortunes Clarice Colleen Q. Manuel

EAGLE WATCH

orn is one of the major crops produced in the Philippines. According to the latest Census of Agriculture and Fisheries, rice still has the largest allocation of land at 1.958 million hectares, while corn places second with1.050 million hectares. On average, a parcel of land measures about 1.2 hectares and is likely to be managed by household farmers. Sadly, however, farmers are among the poorest in our society, even if they have land to produce their necessities. Farmers face a poverty incidence of 34.3 percent, a considerably higher figure than the national average of 21.6 percent. In-depth interviews with corn farmers in Malaybalay and Cabanglasan in Bukidnon reveal serious problems in the corn industry that have likely contributed to the high poverty incidence among farmers. A common lament among the interviewed farmers is the occurrence of drought, strong winds and rains, which have led to corn crop losses for the past 10 years. Most of the corn farmers plant in sloped areas, which are naturally prone to landslides; thus, extreme weather conditions would likely result in crop failures. By some accounts, in 2012 there were farmers who experienced zero yield because of Typhoon Pablo, whose strong winds flattened corn stalks and made the fallen corn cobs an easy target for hungry field rats. Indeed, corn farmers face much

risk from unpredictable weather. If this persists, then these smallscale farmers would remain poor. Not much could be done about the weather, so farmers need to find a way to diversify their crops in order to protect their income. Moreover, consistent corn-production failure in these areas are likely to reduce the total production of corn. Although they have land, corn farmers find it difficult to keep planting every season. It is a challenge for them to acquire capital to buy corn inputs and pay for additional labor. It becomes necessary to seek credit from cooperatives, financiers and banks. Based on interest rates, banks and cooperatives offer the lowest rates, while local financiers charge the highest. Although it seems ideal for

farmers to borrow from banks and cooperatives, the farmers opt to take credit from the financiers because of less stringent requirements. Most of these formal banking institutions require land titles or proof of land use, collateral and farm plans, which small-scale farmers find difficult to provide. Nevertheless, most financiers do not require documents, while others require only guarantors. With higher interest rates, farmers are left with smaller incomes after paying off their debts every cropping season. Many stories shared by the farmers pertained to taking credit from a financier, suffering crop failures, and owing huge debts. Some have been in debt for more than eight years, while some were able to pay off their debts in succeeding cropping seasons. Nowadays, farmers try their best to avoid this setup. They are so afraid of falling into debt that they choose to plant cheaper corn varieties with lower yields. In worse cases, they simply give up, and they end up selling or leasing their land to other farming households or financiers in order to pay off their debts. Small-scale farmers are receiving lower net incomes because of the lower production from the cheaper varieties of corn or from the higher interest rates from financiers. Thus, they remain in a cycle of poverty. Generally, the lack of access to credit limits the production of corn to levels far below potential. Although corn has a price floor with the National Food Authority, farmers are at the mercy of traders

who buy their corn, and they cannot complain if the buying price gets too low. They consider low corn prices as a crop failure, and most of them have experienced it. In fact, it has gone as low as P7 per kilo, as reported by the farmers. With the low price, they cannot recover the amount spent during the entire cropping season and would have a negative net income for that season. Mostly, farmers have buying agreements with traders they borrow from, so even if the price floor is higher than the buying price of the trader, the farmers still receive a lower price. Unstable corn prices result in unstable incomes for the farmers. Without stable incomes, it would be more difficult for them to prepare their household budget for the months after harvest. Another major consequence of this is that a sudden inflow of corn and corn-product imports will push the buying price further down, thereby putting the corn farmers’ livelihood at risk. They are not ready to face international competition in this setup. The corn industry needs arbitration primarily in expanding credit access and creating corn price stability to ensure that its production will remain steady despite climate change, and to improve the net income of the small farmers who work incessantly to provide for their family and the Filipino nation. Clarice Colleen Q. Manuel was a faculty member of the Ateneo de Manila Economics Department. She is pursuing a doctorate degree in development economics at Université de Namur in Belgium.

How John McCain got the last word against Donald Trump By Michael D. Shear & Katie Rogers New York Times News Service

ASHINGTON—Not long after Sen. John McCain learned last summer that he had terminal brain cancer, he began convening meetings every Friday in his Capitol Hill office with a group of trusted aides. The subject was his funeral. He obsessed over the music, selecting the Irish ballad “Danny Boy” and several patriotic hymns. He choreographed the movement of his coffin from Arizona, his home state, to Washington. And in April, when he knew the end was coming, he began reaching out to Republicans, Democrats and even a Russian dissident with requests that they deliver eulogies and serve as pallbearers. By the time he died Saturday, McCain had carefully stage-managed a four-day celebration of his life— but what was also an unmistakable rebuke to President Donald J. Trump and his agenda. For years, Trump had used Twitter and the presidential bully pulpit to mock and condemn the senator from Arizona. In death, McCain found a way to have the last word, even quietly making it clear through friends that Trump was not welcome at the services. “I think it’s fair to say that they have a very different view of this country and what this country means, here and abroad,” said Mark Salter, the senator’s longtime friend and coauthor who sat with McCain—often with a lump in his throat—during the many discussions about his looming death. “His overall message was: ‘It doesn’t have to be this shitty.’” The series of events honoring McCain is the kind of grandiose spectacle that is normally reserved for someone who became president, not someone who twice failed to do so. Friends said that McCain was surprised by the level of interest in his death even as he planned it. When advisers suggested that his coffin should lie in state at the Arizona Capitol, McCain said he believed the legislature would never approve such a rare honor for him, recalled Rick Davis, who had been at McCain’s side for decades and served as his 2008 campaign chairman. “Every inch of the way, he underestimated what he thought this would be about,” Davis said. The memorial events this week began in Arizona on Wednesday, when McCain’s body was taken to the Capitol, and will continue on Thursday at a service at North Phoenix Baptist

Church. The procession will then shift to the nation’s capital, when McCain’s coffin will arrive at an air base outside Washington as the president holds one of his raucous, campaign-style rallies for supporters in Indiana. By the weekend, when virtually all of official Washington—Democrats and Republicans alike—gathers at the National Cathedral for a nationally televised farewell, Trump is expected to have retreated to Camp David, where White House aides hope he will contain his anger at the attention being lavished on McCain. McCain’s closest friends insisted this week that the senator did not harbor a personal grudge toward the president, even at the end. They described him as mostly interested in promoting the cause of bipartisanship and compromise that, as a “maverick” lawmaker, he had carefully fashioned into one of the most durable political brands of the last half-century. “He wanted to reinforce his message that there is more that unites us than separates us,” said Steve Duprey, a businessman from New Hampshire. But they also acknowledged what has been plain to just about everyone since the two men repeatedly clashed, sometimes in the most personal ways, in recent years: McCain had little respect for the president. As such, it was perhaps inevitable, they conceded, that a celebration of McCain’s worldview would be viewed as a critique of the president’s. “Trump has been a catalyst for him to speak more strongly and more vigorously about the need for those things that Trump doesn’t do,” said John Lehman Jr., who served as secretary of the Navy under President Ronald Reagan. Lehman, who visited with McCain at his picturesque home near Sedona, Arizona, every month for the last year, said he did not believe the funeral arrangements were “directed against Trump.” But he added, “Trump was definitely a catalyst to get him focused on pushing those symbolic issues.” Davis said the planning sessions in the senator’s office were so difficult for

his aides that they often went to the bar afterward. But McCain treated the meetings with the dispassionate discipline of a campaign strategy session. “It was as if he was dealing with someone else but himself,” Davis recalled of the meetings, which included himself, Salter and Carla Eudy, the senator’s longest-serving aide. Cindy McCain, his wife, sometimes called in. When she didn’t, it fell to Davis to fill her in. In the spring, McCain began the uncomfortable task of asking people to speak for him after he died. In April he approached former Presidents Barack Obama and George W. Bush, a bipartisan request to the men who defeated him in his quests for the White House. But prominent politicians will not be the only participants. Pallbearers include friends McCain made over the years, including actor Warren Beatty and Frederick Smith, the founder of FedEx. Larry Fitzgerald, the wide receiver who played for McCain’s beloved Arizona Cardinals, was asked to speak at Thursday’s memorial service in Phoenix. Some received messages by phone, and others were asked in person. Former Vice President Joe Biden was among those summoned to Sedona, when McCain began executing his funeral plans with a newfound urgency. They spoke for hours before McCain asked Biden to deliver a eulogy at his funeral in Arizona. Biden immediately accepted, said someone close to the vice president, and he will also serve as a pallbearer Saturday in Washington. Jim Mattis, Trump’s secretary of defense, said he had been asked long ago to be a pallbearer at the final event, a private service that will be held Sunday at the US Naval Academy in Annapolis, where McCain is to be buried. “I’ve known that for months,” Mattis said of the senator’s request. “And it’s an honor.” Vladimir Kara-Murza, a Russian activist who survived two poisoning attempts for his opposition to Vladimir Putin’s government, said that McCain, who was widely seen as one of the Russian leader’s fiercest detractors, had asked him to be a pallbearer in April. “He spoke the truth regardless of party or political situations,” KaraMurza said of McCain. “That was his defining characteristic.” In Washington, a town where Trump has given Putin an open invitation to visit, Kara-Murza said that McCain’s choice of a Russian pallbearer — one repeatedly brought to the brink of death for challenging his country’s authoritarian brand of politics—was “actually pretty symbolic.”

McCain’s career in politics was built around his reputation for that kind of trademark bluntness. During the 2000 and 2008 presidential campaigns, he spent hours talking with reporters — on the record — sitting on couches in the back of a bus that he strategically named the “Straight Talk Express.” In death, some of his messages were equally direct. On Monday Davis read McCain’s final, pull-no-punches remarks to reporters. It escaped no one that McCain was talking about the current president. “We weaken our greatness when we confuse our patriotism with tribal rivalries that have sown resentment and hatred and violence in all the corners of the globe,” McCain wrote. “We weaken it when we hide behind walls, rather than tear them down, when we doubt the power of our ideals, rather than trust them to be the great force for change they have always been.” Other messages during the week have been less explicit. But Trump clearly took offense anyway. After McCain died, the president refused for two days to issue a formal statement praising his service to the nation. And he ordered the White House flag to fly at half-staff for the week only after pressure from his staff, Republican lawmakers and veterans groups. Inside the White House, the president’s aides briefly considered the optics of hosting events—including Thursday’s rally just as the senator’s body is scheduled to be in transit to Washington—but ultimately decided that they could not hold up White House proceedings for several days. Several aides, battle-hardened by constant outside controversies, concluded that they could weather the criticism directed at them over the White House response to McCain, according to two people familiar with the planning who spoke on condition of anonymity. The president, who has privately groused that the news media has been much more critical toward him than toward McCain, ultimately believes the will of the world bends to him, not the other way around, one former adviser said. Trump particularly delights in attending political rallies and rarely cancels them—in February, he canceled and quickly rescheduled one after a school shooting in Florida. But this weekend, it will be McCain, not Trump, who will draw a crowd and capture the attention of the nation, and the world. “He was hoping,” Lehman said, “that all of these things would help to bridge gaps and smooth some of the bitterness and divides that he really deplored so much.”

2nd Front Page BusinessMirror

A12 Friday, August 31, 2018

www.businessmirror.com.ph

DFA: WPS joint exploration deal will be legal

By Jovee Marie N. dela Cruz

@joveemarie

HE Department of Foreign Affairs (DFA) on Thursday gave assurances of the constitutionality of a planned joint exploration agreement between the Philippines and China in the West Philippine Sea (South China Sea).

“We don’t get the oil and gas in exchange for our sovereignty. We are only discussing economic rights here.” —Cayetano

In a news conference following the DFA’s 2019 national budget hearing, Foreign Secretary Alan Peter S. Cayetano said, “Rest assured that we are working on a legal framework where both countries will be agreeable and would pass the

Supreme Court in flying colors.” He also assured the public that officials are carefully considering and addressing all legal questions regarding the joint exploration, which has raised concern among critics of the Duterte administration’s “too-friendly” stance toward China, but which has gotten qualified support from Senior Associate Justice Antonio Carpio. In the past, the latter had also warned against Manila’s possibly forfeiting, by inaction, its historic victory in July 2016 at the UN arbitral tribunal against Beijing. “Those [legal questions] are

Boracay reopening plan is a nod to Ibiza, Mallorca transition By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

HE Department of Tourism (DOT) could be on the right track in deciding to transition Boracay Island to a more wholesome tourism destination. In a webinar on Thursday on the “Impact of seasonal closures in the Philippines-Reopening of Boracay,” Fenady Uriarte, business development manager for Southeast Asia of STR, said, “the Spanish government is now veering away from the shortstay, party-driven market” for destinations like Ibiza and Mallorca. STR is a global tourism market research company that gathers data on the hospitality industry. While clubs in Ibiza—famous for its nightlife, party scene and drug culture—continue to host parties with international DJs, Uriarte said these events are now held only from 5 p.m. to 12 midnight. “They are transitioning from the party scene to a more sustainable tourism, and responsible tourism market,” she said.

DOT Secretary Bernadette Fatima Romulo Puyat earlier announced that large-scale parties such as Laboracay, held over the May 1 Labor Day holiday, will be banned in Boracay. (See, “Will it still be fun? Party ban, curfew mulled for Boracay when it reopens,” in the B usiness M irror , August 21, 2018.) STR data showed that Mallorca has experienced a boom in boutique hotels with the transition to a “longer-stay, higher purchasing power, family-driven demand markets,” posting a 3.1-percent increase in revenue per available room (RevPAR) in the first half of 2018. RevPAR, a key performance indicator of a hotel’s profitability, is computed by dividing the total room revenue by the total rooms available. Before Boracay’s closure, STR research showed hotel occupancy among the island’s resorts averaged about 62.6 percent, slightly lower than the total Philippines hotel occupancy rate of some 70 percent from January to July 2018. Boracay hotels also recorded an average daily rate of P17,523.85, and a RevPAR

LOW PRESSURE AREA 630 KM EAST OF GUIUAN, EASTERN SAMAR SOUTHWEST MONSOON AFFECTING EXTREME NORTHERN LUZON as of 5:00 pm - August 30, 2018

of P10,966.11. Uriarte underscored though that the company’s Boracay sample was very limited, and focused on mid-scale to high-end resorts. She noted that similar resort island destinations, such as Phuket, Thailand, might have benefited from the closure of Boracay, as the former’s hotels posted a 17.8-percent RevPAR growth in the first seven months of the year. She said this was despite the closure of the popular Maya Beach. As this developed, Undersecretary for Tourism Development Planning Benito C. Bengzon Jr. reiterated that the DOT is well on track with its 7.4 million visitor arrivals target, as Boracay Island’s closure also became an opportunity to introduce and boost the awareness of travelers of other tourism destinations in the country. This, he said, was key to retaining the country’s positive month-onmonth performance on tourism arrivals. July 2018 arrivals grew by 5.86 percent to 601,322 from July 2017. “The fact that we have kept ourselves afloat is a very strong reflection of how resilient the industry is, how

quick we are to make adjustments with our marketing and promotions and, I think, also a very strong communication of how prepared the other destinations are in welcoming the influx of tourists who otherwise would have gone to Boracay,” he said in a news statement. A worldwide advertising campaign is set to be launched by the DOT in the following months, to be accompanied by strengthened promotions for various Philippine destinations, including the much-awaited reopening of Boracay, tagged as one of the beast beaches in the world. (See, “New DOT ‘More Fun’ campaign to get P500 million,” in the BusinessM irror, August 29, 2018.) This campaign is projected to entice more travelers to visit more destinations aside from Boracay, as trainings and workshops for better sustainability practices are now being disseminated to industry players all over the country. This is guaranteed to provide better services to future clients, he stressed. “When you look at it overall, we really have to make sure that when we roll it out, when we relaunch Boracay, it would be a better destination, more environment-friendly, and it will be more secure and we have to make sure that, more important than anything else, we avoid the problems that led to its closure in the first place,” said Bengzon. The DOT official assured travelers of better visitor experiences with the agency’s projects already laid out for the coming months. “For our part, we will make sure that the accommodation establishments comply with the require ments of the Departments of Environment and Natural Resources, and of the Interior and Local Government, before they qualify for DOT accreditation,” he said. “Manpower training programs will be extended to the accredited establishments so that the frontline services are much improved prior to the closing,” added Bengzon. “And lastly, we will have to work on a very intensive marketing promotions. So in our travel fairs, in our sales missions, Boracay will be showcased as a better destination for our markets,” he said. In 2017, foreign visitor arrivals reached 6.6 million, up 10.6 percent from the 5.97 million arrivals in 2016.

Rice tariffs. . . Continued from A1

T he House of Representatives approved on third and final reading earlier this month House Bill 7735, which seeks to liberalize rice imports by replacing the quantitative import restrictions on rice with tariffs, and create the Rice Competitiveness Enhancement Fund. The bill aims to protect producers of agricultural products, ensure food security and make the agricultural sector viable and globally competitive.

part of discussions. We have to take them into consideration. That is what makes it tricky. That is why I said we will have a legal framework if both sides will propose provisions that, in effect, will set aside the issue of our claims, so that it will not damage the negotiation,” he added. The secretary also reiterated the 60-40 split on the joint exploration of natural resources—60 percent for the Philippines and 40 percent for China. “We don’t get the oil and gas in exchange for our sovereignty. We are only discussing economic rights here,” Cayetano said.

According to Cayetano, the joint exploration could happen in six months to one year. “Exploration is easy because it is just like having an x-ray. We will be able to see what is in there. It can happen in six months to one year. But joint development, that’s the hard part, since it will take four to six years. China will have to accept it [joint agreement] within their laws, Filipinos have to accept it within our laws,” said Cayetano. He said the two countries have agreed not to set a deadline for the joint exploration.

Better deal for Pinoy maids, caregivers eyed in Israel, Jordan trip By Bernadette D. Nicolas

@BNicolasBM

SRAEL and Jordan are expected to sign labor agreements with the Philippines on employment, meant to improve the working conditions of Filipino caregivers and domestic workers, respectively. The signing of the labor agreements will happen during President Duterte’s historical visits to the two countries from September 2 to 8. The Philippines decided to visit those countries following the invitation of Israel Prime Minister Benjamin Netanyahu and King Abdullah II of Jordan. Foreign Affairs Undersecretary Ernesto C. Abella announced on Thursday that both trips will be the first by a sitting Philippine president. “Now, both these visits will be a huge leap in the Philippines’s bilateral partnerships with both countries after decades of diplomatic relations. Today, we are to build on these relationships and our nations have much to gain from deepening ties, enhancing economic cooperation, sharing expertise in science and agriculture,” Abella said. For Israel, Abella said a memorandum of understanding on scientific cooperation will be signed, along with an MOU between the Philippine Board of Investments and Invest in Israel, aside from an MOU on the employment of the Filipino caregivers. “In the future, we expect improvements in deployment procedures and the elimination of excessive placement fees imposed on Filipino workers bound for Israel. We also expect progress resulting from cooperation in the areas of science and agriculture. We also expect enhanced two-way trade and investments,” he said. For the Jordan trip scheduled from September 6 to 8, these labor agreements will be signed: agreement on the employment of do-

Earlier, House Committee on Agriculture and Food Chairman Jose Panganiban Jr. of ANAC-IP partylist said the P20-billion projected annual tariff to be collected from imported rice is a big help to the country’s rice farmers. Panganiban said the country will have about P29 billion to P30 billion that will directly benefit the rice sector. The P20 billion will come from the annual rice tariff, and the additional P9 billion from the Department of Agriculture. With the advent of the rice tariffication regime, Panganiban said the country must improve

mestic workers; an MOU on labor cooperation wherein the country expects improvement of working conditions of Filipino domestic workers bound for Jordan; MOU on defense cooperation wherein an upgrade is expected on the country’s defense capabilities; and an investment agreement with Jordan Investment Commission. Pressed on the details on the labor agreement for Filpino domestic workers in Jordan, Abella said the agreement establishes the proper procedures for the recruitment, deployment and arrival of Filipino domestic workers in Jordan through licensed Jordanian recruitment agencies in partnership with licensed Philippine recruitment agencies. “The agreement provides that the recruitment and employment of Filipino domestic workers will be governed by a standard employment contract and other measures that will ensure the protection of the rights and welfare of workers,” he said. Moreover, Abella said they expect political consultations on trade and investments, enhancement of two-way trade and investments and a mutual recognition of Standard of Training and Certification of Watchkeepers for Seafarers (STCW) to happen in Jordan. Abella added the renewal and expansion of the country’s relations with both countries are in pursuit of a “friends to all, enemies to none” foreign policy. “The Philippines expects to do its part in promoting peace and stability in the region,” he said. He also noted that the strengthening ties with the nations will promote economic growth, create new employment opportunities and enhance security. “A closer relationship with these nations means more opportunity to share expertise with each other in the fields of science, agriculture, industry and counterterrorism” he said. the local rice production to reduce t he produc t ion cost of rice farmers. Also, Camarines Sur Rep. Luis Raymund Villafuerte, an author of the tariffication bill, said it is a “win-win” situation for consumers and farmers at this time when Filipinos are reeling from higherthan-target inflation. Villafuerte said the measure liberalizes the entry of cheaper rice and consumers will benefit from this because the lifting of the QR on rice imports is expected to slash the retail cost of the staple by as much as P7 per kilo. Jovee Marie N. dela Cruz