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Monday, December 4, 2017 Vol. 13 No. 54
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By Butch Fernandez @butchfBM
& Jovee Marie N. dela Cruz @joveemarie
T
he bicameral conference committee tackling the Duterte’s administration proposed Tax Reform for Acceleration and Inclusion (TRAIN) Act is eyeing to approve this week the Senate and House of Representatives joint version of the taxreform program. House Committee on Ways and Means Chairman Dakila Karlo E. Cua of Quirino and Deputy Speaker Romero S. Quimbo of Marikina, members of the bicameral committee, said both houses of Congress will continue to thresh out differences between their respective versions of TRAIN this week. The bicameral committee will meet for the second time on Tuesday. After consolidating Congress’s two versions of the TRAIN, the lawmakers said the bicameral committee will approve this week the House of Representatives and the Senate joint version of the tax bill. According to Cua, representatives and senators have already covered 40 pages of the 100-page matrix of the TRAIN. “We discussed for almost eight hours last Friday from 2 p.m. to midnight,” he said. “I am hopeful that we can finish the bicameral [meeting] on the next meeting. Target approval is this week, as well.” Quimbo said the congressional committee should approve the consolidated version this week to ensure its passage before Congress goes on Christmas break. “Target [approval] is definitely this week to ensure that it can be ratified by both houses before we
go on our break,” Quimbo said. The bicameral conference committee is composed of members from each House of Congress—both from the majority and minority blocs—to settle, reconcile or thresh out differences or disagreements on any provision of the bill. The conferees are not limited to reconciling the differences in the bill, and may also introduce new provisions germane to the subject matter or may report out an entirely new bill on the subject. Once the bicameral committee finalizes its version of the bill, the measure will immediately be transmitted to the both houses for ratification and submitted to the Palace for President Duterte’s signature. The government is eyeing to implement the TRAIN by January 1, 2018. Members of the bicameral committee have already agreed to exempt all workers earning less than P250,000 a year from paying personal-income tax. However, there are several contentious provisions, including excise tax on petroleum, coal, minerals, cosmetic procedures and sugar-sweetened beverages that are pending before bicameral committee consideration. Other contentious provisions in the Senate and House versions of the TRAIN bill are the imposition of higher tax rates on automobiles and provisions on value-added tax (VAT) zero rating and lifting of VAT exemptions on senior citizens, among others. Last week Minority Leader Danilo E. Suarez of the Third District of Quezon, also a member of the bicameral committee, reminded their counterparts in the Senate that the 1987 Constitution provides that all tax measures must come from the lower chamber. See “Tax reform,” A2
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PPP conversations No. 11 with PNOC President Lista
@jearcalas
resident Duterte’s marching order to the country’s trade negotiators is to see to it that agreements forged at the World Trade Organization (WTO) meeting would not be detrimental to the Philippine farm sector, according to Agriculture Secretary Emmanuel F. Piñol.
SENATE, HOUSE TARGETING TO FINALIZE TAX-REFORM MEASURE THIS WEEK
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PHL to insist on ‘fair’agri package at WTO meet By Jasper Emmanuel Y. Arcalas
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PIÑOL: “We are going to Argentina with the idea of negotiating and getting what is best for Filipino farmers and fishermen.”
Alberto C. Agra
ead
PPPC.LAgra Alberto
“Of course [we will protect the farmers]. The President will always protect the farmers. But not to the point of straining the Philippines’s relationship with other countries,”
O
ne of the government agencies undergoing transformation in order to be more relevant and truly developmental is the Philippine National Oil Co. (PNOC). From a holding or “passive” company, it is now reengineering itself to be an operating or “active” company.
See “PHL,” A2
Continued on A15
BMReports
PHL pre-need insurance industry: Reconciling past for brighter future By Rea Cu
@ReaCuBM
T
Part One
HE president’s ink barely dried on the Education Act of 1994 when the College Assurance Plan Inc. (CAP-Education) fiasco exploded. Early into the new millennium, CAP-Education took a turn for the worst when its investments in real estate nose-dived. According to reports, CAP-Education had been investing its funds heavily on real estate—mostly owned by its board members. The investments even exceeded the cap set by the pre-need industry’s regulator that time: the Securities and Exchange Commission (SEC). The questionable real-estate investments resulted to the fall of CAP-Education, which was considered a pioneer in the pre-need insurance industry in the country and was prominently known for providing educational insurance plans to clients. The company ultimately had to stop its operations: Its license to sell educational plans was revoked. This has resulted to delays in the payment of claims to its estimated 800,000 plan holders. CAP-Education has committed to pay tuition obligations until 2012, despite an estimated P4.1 billion in liabilities, including its obligations to plan holders estimated at P1.2 billion for the first semester of school year 2005-2006.
This file photo shows students at a flag-raising ceremony. Two decades ago the College Assurance Plan Inc. became unable to pay for the tuition of beneficiaries of holders of a pre-need education product. The firm’s ills deeply affected the pre-need insurance industry. NONIE REYES
“The CAP traditional pre-need plan was conceived in 1980 to provide parents with an inflation-free savings vehicle that guarantees payment to the school of tuition fees due when the beneficiary of the plan enters college,” CAP-Education said on its web site. By 2008 the power to regulate the pre-need industry was transferred to the Insurance Commission (IC), which led to the creation of the operational framework for the industry known as the Pre-need code.
Court roles
IN 2013 the Regional Trial Court
(RTC) in Makati City approved a revised rehabilitation process under the supervision of a Rehabilitation Court for CAP-Education. The decision led CAP-Education to resume payments for the benefits of its plan holders nationwide within 10 years, starting from the early part of the first quarter of 2014. Mamerto Marcelo Jr. is the RTC-appointed rehabilitation receiver for the company. In 2014 the Supreme Court (SC) issued a Temporary Restraining Order (TRO) putting on hold the implementation of the Extended and Modified Rehabilitation Plan approved by the RTC in Makati
City . This resulted to the temporary suspension of the payment of claims by the company. According to the IC, the SC issued the TRO to afford itself time to evaluate and decide on certain issues raised by the SEC concerning the rehabilitation plan approved by the RTC in Makati City and upheld by the Court of Appeals (CA). “Thus, at this juncture, we have no recourse but to await the SC’s orders relative to the lifting of the TRO and payment of CAPEducation claims,” the IC said in a statement. Continued on A2
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A2 Monday, December 4, 2017
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PHL pre-need insurance industry: Reconciling past for brighter future Continued from A1
TRO effects ACCORDING to Elmer M. Lorica, president of the Philippine Federation of Pre-Need Plan Cos. Inc. (Pre-Need Federation), CAP-Education had stopped paying planholders’ claims due to the TRO. “But policy holders can still claim once the TRO is lifted. CAP is under the Court supervision. Unless the court decides on their case, it cannot proceed with its payment of claims,” Lorica told the BusinessMirror. He added that policyholders who have further inquiries can contact the CAP office in Makati City. The IC also pointed out that CAP-Education policyholders can contact the commission’s conservatorship, receivership and liquidation division for further inquiries. The issues and challenges that were faced by CAP-Education had led to a number of pre-need companies to close shop. From 200 companies, the total number went down to 40 as of 2013, data from the IC showed. “From as high as more than a hundred companies, now there are only 14 companies issued with a license,” Lorica said. “But only five to six companies are selling the pre-need products.”
CAP’s path ACCORDING to Lorica, several other preneed companies, most of them pioneering in the industry, followed CAP-Education’s path due to the insufficiency of their trust fund to answer the liabilities. “The earning rate of the products has not been earned, therefore the deficiency in their trust fund,” Lorica said. “The rate was too high to be earned—as high as 18 percent—while the earning was only a single digit—as high as 5 percent to 6 percent only.” But the challenges proved to be a learning
PHL. . .
Continued from A1
Piñol said in an interview during the opening of the 14th Regular Session of the Western and Central Pacific Fisheries Commission held in Pasay City on December 3. “We have to negotiate what is best for Philippine agriculture. I will just play a supporting role to the trade secretary because he is the head of the delegation. But I assure the Filipino people that, as agriculture secretary, I will make sure that our interests are protected,” he added. Piñol said he is prepared to block any trade agreements that would put Filipino farmers at a disadvantage. “Of course, if [an agreement] is detrimental to Philippine agriculture and fisheries, we will
Tax reform. . . Continued from A1
Article V I, Section 24 of the Philippine Constitution,
block it.” “But we do not go to Argentina just to block deals. We are going to Argentina with the idea of negotiating and getting what is best for Filipino farmers and fishermen,” he added. The Philippine delegation to the 11th WTO Ministerial Conference (MC11) slated from December 10 to 14 in Buenos Aires, Argentina, is headed by Trade Secretary Ramon M. Lopez. Piñol said Agriculture Undersecretary for Policy and Planning Segfredo R. Serrano is also part of the delegation to MC11. The ministerial conference is the biennial meeting of the WTO’s topmost decision-making body. Documents obtained by the BusinessMirror earlier indicated that the Philippines is poised to reject any new agreement on agriculture at MC11 if it would not include the special safeguard mechwhich provides “all appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application and private bills, shall originate exclusively in
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anism (SSM) that would allow developing countries to protect their farm sectors from import surges. The country’s statement concerning its priorities for MC11, a copy of which was obtained by the BusinessMirror, indicated that the passage of a “concrete framework” for SSM would play a “critical role” in getting the nod of Manila for any agricultural package at MC11. The Philippines’s statement was delivered by Trade Undersecretary Ceferino S. Rodolfo Jr. during the informal ministerial meeting in Marrakesh, Morocco, on October 9 and 10. “Let me underscore that the Philippines’s priority in MC11 is SSM. Developing countries, including the Philippines, have been denied access to SSM since the July Framework Mandate in 2004, thus, the House of Representatives, but the Senate may propose or concur with amendments.” The Senate-approved Tax Reform for Acceleration and Inclusion (TRAIN) is targeting to raise
it is high time that a concrete and operational decision on SSM is issued at MC11,” Rodolfo said. “The Philippines would be put in a very difficult position agreeing to any package of agriculture outcomes in MC11 without SSM included thereto; thus, meaningful engagement on SSM must be demonstrated in good faith if we are all to succeed,” he added. Rodolfo said the Philippines may not support new issues at MC11 if core issues relevant to agricultural trade, such as SSM, is not tackled. “Denying developing countries once more the access to SSM is not only unacceptable, this is also a remiss of our mandates that all our ministers already decided a long time ago under the July Framework, Hong Kong Declaration and Nairobi Decision. Thus, inaction for SSM cannot be and is
P130 billion in revenues to finance the Duterte administration’s ambitious infrastructure program. The Senate passed “a 3,000percent increase in coal taxes” to be collected in three tranches until 2020, which means the current P10 excise tax will be raised to P100 in 2018, P200 in 2019 and P300 by 2010. It also adopted a 10-percent excise tax on cosmetic procedures for aesthetic purposes. At the same time, senators voted to double excise taxes on minerals and mineral products and quarry resources that proponents said was intended to promote “responsible mining and environmental protection.” With this, Suarez said he would call for the deferment of the approval of the tax measure should the Senate push the passage of its version of the tax reform program. “I am hoping that the bicameral conference committee will adopt the House version of the tax package [on the other hand], we will call for the deferment of the [tax reform] if the Senate will insist its version,” Suarez said.
‘No delays’
Senate President Pro Tempore Ralph G. Recto over the weekend voiced conf idence the lawmakers can meet the
experience, as the challenges paved the way for the creation of the Pre-Need Code, which is considered to be a stronger framework to better guide the industry. “The crisis of the industry is a blessing in disguise,” Lorica said. “Not only did it lead to the enactment of the Pre-Need Code, the weaknesses or errors of the industry were remedied by the remaining players of the industry.” According to Lorica, the Pre-Need Code covers the operation of all models: industry management, industry sales, organizational and industry product. “Now, the industry is more stable as it corrected the errors and weakness of the past,” he added.
RA 9829 THE Pre-Need Code, or Republic Act 9829, instructs all preneed insurance companies to fall under the supervision of the IC. The IC was placed as regulator for the industry. “All pre-need companies, as defined under this Act, shall be under the primary and exclusive supervision and regulation of the IC,” the Pre-Need Code said. “The commission is hereby authorized to provide for its reorganization, to streamline its structure and operations, upgrade its human-resource component to enable it to effectively and efficiently perform its functions and exercise its powers under this code.” The code has emphasized that “it is the policy of the state to regulate the establishment of preneed companies and to place their operation on sound, efficient and stable basis to derive the optimum advantage from them in the mobilization of savings and to prevent and mitigate, as far as practicable, practices prejudicial to public interest and the protection of planholders.” After the issues that plagued the pre-need industry in the past, Lorica believes the industry is trying to stabilize its structure and operations once again.
not an option if we are to succeed in MC11,” he said. “Reaching the needed balance for success requires exhaustion of all efforts on all priorities of members for a MC11 decision, especially that there is no clear deliverable yet at this juncture,” Rodolfo added. The SSM has become one of the most contentious trade issues within the WTO, especially between developed and developing countries. SSM is a tool that will allow developing countries to raise tariffs temporarily to deal with import surges or price falls, according to the WTO. In 2004 WTO member-countries agreed that SSM will be established for use by developing countries, as indicated in the so-called July Framework. In the 2005 Hong Kong Declaration, WTO developing country members will have the
fast-approaching deadline to pass the TR AIN bill and the proposed national budget for 2018 before the December 15 adjournment. This, as Recto allayed concerns that last-minute hitches could derail timely passage of the P3.7-trillion 2018 budget bill in time for their year-end recess. “I don’t expect a reenacted budget, that’s not good for the country.” Recto added: “It [operating under the 2017 budget] will be a P300-billion-less budget, so I don’t expect a reenacted budget. I’m sure it will not be difficult to come to terms with the House,” he said, referring to bicameral talks to reconcile the Senate and House versions of the annual money measure. The senator played down speculations that the SenateHouse conference committee tasked to reconcile the two chamber’s version of the budget law could end up in a deadlock as Congress adjourns next week, forcing the Duterte government to operate under last year’s budget until a new one is passed soon as lawmakers reconvene on January 15. “That [talks of potential deadlock] is only a negotiating posture,” Recto said. “Don’t take too much out of it. I’m confident that there will be an agreement.”
right to recourse to SSM based on import quantity and price triggers. However, 13 years after the SSM was first floated within the WTO, a concrete framework on it has yet to be crafted. One of the most contentious issues concerning SSM is the “trigger level” and the rate of tariffs that will be imposed. Under the current WTO Agreement on Agriculture, the Philippines has applied the special safeguards (SSG) to at least 118 farm commodities. SSG serves as contingency restrictions on imports taken temporarily to deal with special circumstances, such as a sudden surge in imports, according to the WTO. Some of the agricultural issues to be discussed at MC11 include domestic support, cotton, market access, export restrictions and sanitary and phytosanitary measures.
Bird flu. . .
Continued from A16
The culling started on November 12 and ended on November 22. In an interview with reporters on December 3, Piñol said the incident is now under control and the Department of Agriculture (DA) is nearing the completion of its cleaning and disinfection procedures in the AIaffected farm. The DA chief also said he does not expect the prices of broilers to decline significantly due to the latest bird-flu incident. “The earlier AI incident had a massive impact on the prices of chicken because we did not know what to do then. So we took extra precautionary measures because that time, we did not know the extent of the problem,” he said on the sidelines of the opening of the 14th Regular Session of Western and Central Pacific Fisheries Commission held in Pasay City last Sunday. “But this time around, it is farm-specific. What was hit was one farm, in Cabiao. We did not make a big fuss out of it anymore [as] it is already under control,” Piñol added. He disclosed that he received reports of “unusual chicken mortalities” in the Cabiao farm on November 12, and received confirmation that it was caused by bird flu on the same day. Piñol said the strain that hit the Cabiao farm was also H5N6. Once the disinfection procedures are completed, the government will observe a 21-day rest period prior to the restocking of sentinel poultry, which will serve as determinants of the prescence of the bird-flu virus in the affected area, according to the AI Protection Program Manual of Procedures of 2016. Piñol said the AI incident in the Cabiao farm has dealt a blow to efforts of the Philippines to be recognized as a bird flu-free country this month. “We were expecting that we are already free from bird flu and already preparing to apply to the OIE. But this [Cabiao incident] has pushed back our timetable,” he said.
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Editor: Vittorio V. Vitug • Monday, December 4, 2017 A3
Senate probers to expand inquiry into P3.5-B dengue-vaccine mess
F
By Butch Fernandez
@butchfBM
rench pharmaceutical Sanofi’s revelation that its dengue vaccine poses risk of “serious disease” for recipients who never had previous infections prodded the resumption of a Senate investigation that earlier looked into the Department of Health’s (DOH) “undue haste” in sealing the Sanofi supply contract, Sen. Richard J. Gordon said over the weekend. This, even as the chairman of the Senate Health and Demography committee, Sen. Joseph Victor G. Ejercito, bared plans to also call for an inquiry into the issue, most probably in January, as Congress is racing to finish its legislative agenda for the year before going on Christmas break on December 16. Sessions will resume on January 15, 2018. Ejercito said in an interview with DWIZ that the January schedule for an inquiry into the Dengvaxia fiasco will also allow time for more crucial information to be updated by the Department of Health (DOH) and the World Health Organization (WHO) to ensure a smoother flow of questioning. On his Twitter account, Ejercito also explained: “Looking at January for a hearing on the dengue vaccine. Will let the experts and doctors and the DOH deal with the issue first, then will wait for their findings and recommendations.” Health Secretary Francisco Duque III reported last Friday that a comprehensive surveillance effort was in place to separate the children who never had prior infections when they were vaccinated from those who had previous bouts with dengue before they received the vaccine. Sanofi had admitted to French regulators last week that an ex-
panded assessment of its clinical trials indicated that while the vaccine protects previously infected people from further dengue episodes, the so-called virgin recipients—those who had no prior infections—were at risk of “serious disease,” possibly from more virulent dengue strains, as a result of receiving the vaccine.
Possible joint inquiry
Ejercito raised the possibility of conducting joint hearings saying he will talk to other senators keen on inquiring into the issue, including Gordon, Senate Blue Ribbon Committee chairman, for a possible joint investigation to ensure a more comprehensive inquir y while avoiding duplications. In an interview with the BusinessMirror, Gordon said he initiated the inquiry early-2016 because he was alarmed by the serious monetary and health implications of the program. The “inordinate haste” with which officials of the Aquino administration moved to approve the mass vaccination and ensure funds were available— even outside the DOH’s organic budget—smacked of a “conspiracy” with pos-
Piston calls off strike By Lorenz S. Marasigan
T
@lorenzmarasigan
he planned two-day transport strike by labor group Pinagkaisahang Samahan ng mga Tsuper at Operator Nationwide (Piston) has been cancelled, following the appeal of a senator for a dialog and a proper hearing for their concerns on the government’s jeepney-modernization program. Piston President George San Mateo said his group has decided to call off the strike set on Monday and Tuesday after Senate Committee on Public Services Chairman Sen. Grace Poe sought a proper venue to hear the group’s side on the phase-out of the iconic jeepney. Tentatively, the hearing for the said issue will be on Thursday. “We will give way to the appeal of Sen. Grace Poe for a hearing on December 7, which we will join. For Monday we will hold a big protest transport caravan to Mendiola to charge President Duterte on his threat to remove the jeepney starting January 1,” San Mateo said. During the dialog, he said his group will bring to light the “bogus and capitalistic” modernization program of the Duterte administration. “We will discuss this and the need for the Senate to call for the junking of the current program, and for the crafting of a new alternative modernization program that is nationalized, inclusive, democratic, pro-people and efficient mass transport system,” San Mateo added. Land Transportation Franchising and Regulatory Board Spokesman Aileen Lizada welcomed this development, but said her group will not rely on news statements. Instead, her camp will continue on monitoring the roads should there be a surprise transport strike. “We have directed the head of enforcement to observe all the terminals of Piston, as well as the routes involved, then we will decide before noontime on Monday if we will proceed with the monitoring for the whole day,” she said. Lizada added that the regulator has also disseminated the directive to regional offices. “This directive has been, likewise, given to all regional offices— for them to check the respective routes and terminals of Piston and their allied groups,” she said. “We cannot afford surprises.” Earlier, the transportation department threatened the transport group’s members with the revocation of their franchises should they push through with the strike. Just two months ago, Piston and other transport groups staged a nationwide strike that resulted in the cancellation of classes and suspension of government work in different parts of the country. During the strike, the groups called on the government to junk its Public Utility Vehicle Modernization Program, claiming that the said scheme will “displace and dispossess” a huge chunk of the 209,124 jeepney drivers nationwide. Under the said program, jeepneys 15 years and older will be phased out due to their environmental and safety hazards.
sible implications of “corruption,” Gordon added. The Senate chief prober, however, was prompted to set aside temporarily the initial inquiry into what was seen to be a “midnight deal” during the previous administration due to the approaching May 2016 elections. Gordon listed three issues that, he said, impelled his 2016 inquiry, citing first the alleged undue haste of which the Aquino administration, chiefly through then-Budget Secretary Florencio Abad and thenHealth Secretary Janette Garin, had forged the contract. Gordon said the Blue Ribbon probe was also on track to ascertain the potential danger for children of the “unproven and untested” vaccine. The senator said Senate probers were also poised to look into the reportedly disproportionate cost for the Dengvaxia program—P3.5 billion—considering other diseases like Tuberculosis are killing more children than dengue. Recalling the events leading up to the approval of the mass-vaccination program, Gordon pointed to media reports of a meeting in December 2015 between then-President Benigno S. Aquino III and Sanofi Pas-
teur officials, led by CEO Olivier Charmeil, who called on him at Hotel Scribe in Paris where he flew for the climate change summit. This, noted Gordon, was Aquino’s second meeting with Sanofi officials, having met with them earlier in Beijing. Aquino was accompanied at the Paris meeting by Garin, former Finance Secretary Cesar V. Purisima, former Trade Secretary Gregory L. Domingo and former Transportation Secretary Joseph Emilio A. Abaya. Gordon pointed out that, soon after those two meetings, all steps were taken to ensure the vaccine program is approved by all relevant agencies, and funds set aside. No less than Abad helped look for funds for it, he added. Money for the Dengvaxia program was taken by the Department of Budget and Management from unobligated funds of other agencies, congressional probers learned later. Ejercito, in a separate interview with DWIZ, said the Senate will ask the DOH to provide it with regular updates on the condition of thousands of persons injected with the dengue vaccine. Ejercito did not rule out the possibility that Garin will also be
invited for questioning by Senate probers to shed light on the controversial DOH deal. “More likely [Garin will be summoned] because the transaction was consummated during the previous administration; but I don’t want to conclude anything,” Ejercito said. “We will give Secretary Garin a chance to clear the issues that will be raised in our inquiry.” Meanwhile, the Justice department is set to look into the possible liabilities of the DOH and other government officials responsible for the controversial P3.5-billion dengue-vaccine project that has been found to cause health risks to children. Justice Secretary Vitaliano N. Aguirre II last Sunday said he would tap the National Bureau of Investigation to conduct a fact-finding probe on the matter to hold those responsible for the project, which was initiated during the term of Aquino through Garin. “I will prepare as soon as possible the appropriate department order. Everybody who has some involvement will be included and appropriate charges will be filed against them, if warranted,” he added. Aguirre said he personally re-
ceived a number of complaints from parents of children injected with the Dengvaxia vaccine. “One complained to me that his son, who was inoculated of that antidengue vaccine in April 2016, is now sick of ‘baby TB,’ and his immune system is now very weak and has become a financial burden to them,” Aguirre said. Based on the initial information reaching the Justice department, the program was approved by the Aquino administration and implemented strong objections from medical experts due to lack of certification from the WHO. It was also learned that the DOH was properly warned about the possible effects of the first dengue vaccine to those who have not contracted dengue yet, but it still approved the program—apparently making Filipino children guinea pigs of a clinical test. The Philippines was the first Asian country to approve this vaccine for individuals aged 9 to 45 years old in December 2015. Duque has ordered the suspension of the dengue vaccination program pending recommendation on further action from experts from the World Health Organization. With reports from Joel R. San Juan
Economy
A4 Monday, December 4, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon
BusinessMirror
www.businessmirror.com.ph
DENR finalizing rules for tapping Green Climate Fund
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By Jonathan L. Mayuga
@jonlmayuga
he Department of Environment and Natural Resources (DENR) is currently finalizing the procedures governing the national organizations’ access to the Green Climate Fund (GCF). This early, officials of the DENR are advising organizations to develop project ideas that can be endorsed for funding or financing under the GCF mechanism. A global initiative aimed at helping developing nations to tackle climate change, the GCF has identified eight impact areas that will deliver major mitigation and adaptation benefits. This includes shifting to lowemission sustainable development pathways, such as 1) low-emission energy access and power generation; 2) low-emission transport; 3) energy-effacing buildings, cities and 4) industries; sustainable land use and forest management, and increasing climate-resilient sustainable development for 5) enhanced livelihoods of the most vulnerable
people, communities and regions; 6) increased health and well-being, and food and water security; 7) resilient infrastructure and built environment to climate-change threats; and 8) resilient ecosystem. For the Philippines, the DENR is the national designated authority (NDA) to the GCF, which is a global financial mechanism under the United Nations Framework Convention on Climate Change (UNFCC). Under a DENR Special Order, the agency’s Climate Change Service and the Office of the Undersecretary for Climate Change were named as the GCF secretariat, and the national program director and focal point, respectively, under the country’s Green Climate Fund Readiness Programme. “As NDA to the GCF, the DENR
Dario Pignatelli/Bloomberg
will provide leadership in helping Philippine organizations get to implement projects that help meet the country’s priorities to reduce emissions and achieve the country’s Nationally Determined Contributions (NDCs) on climate change,” Environment Secretary
Roy A. Cimatu said in a statement. The 10-member Association of Southeast Asian Nations came up with a Joint Statement on Climate Change on November 13. The statement was delivered at the 23rd Session of the Conference of the Parties to the UNFCC held in Bonn, Germany.
Cybersecurity and cybercrime–Are companies protected?
T
he European Innovation, Technolog y and Science Center (EITSC) in partnership with lawyer Geronimo Sy conducted a Workshop on Cybersecurity and Cybercrime for the private sector to introduce the key concepts of securing an organization’s cyberspace and how to respond to incidents and breaches. The good turnout of participants in the first of a series of events on
29 November 2017 indicated that businesses are now highly aware of the need to build capacity for chief technology officers, informationtechnology personnel, compliance and audit teams to understand the relevant laws and regulations. The Cybercrime Prevention Act and its impact on the cyber environment was heavily discussed. Risk management and governance were emphasized as essential frameworks.
Creation of online interagency information system pushed
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ey players of chemicals, housing, logistics, power and public transportation industries are pushing for the development of an online interagency information system or database to facilitate ease of doing business in the country. Arnel Abanto, head of Development Academy of the Philippines’s Center for Productivity and Development, said businesses spend much time, effort and money to obtain documents from one agency required by another agency. “The online facility [is] similar to National Single Window, or the Philippine Business Registry, and expand that one to allow access of information by an agency on related information that we normally ask them to submit, taken from another agency,” he said during the Modernizing Government Regulations public forum last week. Abanto said it is thus imperative that businesses information can be shared, accessed and/or obtained for assessment and verification of requirements, such as Social Security System (SSS) to obtain taxpayers identification number from the Bureau of Internal Revenue. “The important thing, if such information can be shared across agencies, most especially information coming from the LGUs [local government units], such requirements need not be resubmitted. So this is really a big challenge to implement this one,” he added. Apart from development of an online interagency information system or database, the five industries recommended other initiatives to ease of doing business. These are adopting a single-business identification system, strengthening of the Anti-Red Tape Act and the creation of regulatory reform oversight body. “We are proposing the establishment of an oversight body that can influence regulatory agencies when we talk of energy regulation, labor regulation, agriculture, trade and industry, etc., because businesses nowadays could span across sectors of the economy,” Abanto said. Philexport News & Features
The online facility [is] similar to National Single Window, or the Philippine Business Registry, and expand that one to allow access of information by an agency on related information that we normally ask them to submit, taken from another agency.”—Abanto
Henry J. Schumacher, the president of EITSC, outlined that cyberthreats continue to grow in both scope and severity. The number of recurring high-profile security breaches continue to accelerate. Beyond the damage in terms of money and reputation incurred by security and data breaches, companies around the world—including the Philippines—are forced by regulations to protect the data they
collect and store. Failure to comply is a criminal offence. Negligence is a mode of commission. Schumacher added EITSC and Sy will run regular programs in near future to create a network of cyber-savvy work forces that involves a holistic approach to training and to develop an operations manual for cybersecurity and procedures for cybercrime investigation.
Want your ads to reach more people? Consider out-of-home, study suggests
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espite the heavy traffic, Marianne braves the stretch of Edsa every day to get to work. Apart from silently complaining about the massive volume of vehicles and getting constant migraine attacks, looking at the huge billboards constitutes her daily commute. “They call your attention, how can you not look?” she said. Marianne is just one of the thousands reached by out-of-home (OOH) advertising. According to a study by Strategic Consumer and Media Incites Inc., brands are more likely to impact more people with OOH ads just because of the daily traffic in Metro Manila’s main thoroughfares. Just in Edsa alone, there are already 1,604 OOH advertising sites—that’s roughly 44 percent of all billboard sites in Metro Manila. The study also shows that top companies are already seeing the impact of these ads, as OOH expenditures have amounted to nearly P2 billion during the first quarter of 2017, an increase of approximately 5 percent from the previous quarter. OOH remains to be one of the most effective forms of brand and product awareness and promotion. It has improved and expanded from billboards and tarpaulins to LED displays and bus wraps.
Complements other media channels
Based on the study, billboards have proven to extend the reach of other forms of media. OOH ads have proven to increase the power of TV ads by 4 percent, the Internet by 27 percent and radio by 29 percent. This form of advertising has also used the digital landscape to its advantage by transforming traditional billboards to personalized ads on interactive LED screens. The digital billboard’s goal is two-pronged—relay a message and elicit an instant response from the public.
More digital OOH sites in Metro Manila thoroughfares
With the rise of digital, it won’t be long before the OOH game shifts to accommodate the necessary changes in consumer engagement. Just recently, the infrastructure arm of San Miguel Corp. has granted MacGraphics Carranz (MGC) an exclusive deal for its OOH requirements. The media agency will now have the sole rights to offer clients ad spaces along the South Luzon Expressway, the Metro’s only Skyway, the Ninoy Aquino International Airport Expressway and the Star Tollway. Apart from strategically located billboards in the Metro, MGC has a similar agreement with the local government of Mandaluyong to line roads and streets with OOH displays, especially in the bustling commercial district of Ortigas. MGC initially plans to supply tollway displays and lamppost banners, but the agency aims to upgrade the spaces with world-class LED displays and new outdoor technologies. OOH proves to be the remaining form of traditional media that innovates over time. As some experts would say, the future is bright for OOH advertising. They are quick to deliver the message, they are hard to miss, and they stand tall and proud—literally. “Two ways to think about it. Some would say it’s cluttered, but it can also look creative. It can be nice and pretty depending on the execution. In fact, billboards can even challenge that of a blockbuster movie or rival your favorite TV commercial when it comes to generating awareness,” said Dr. Donald Patrick Lim, Country CEO of Dentsu Aegis Network Philippines. “It’s all about creating the talkability. Ways to cut through a cluttered market,” he added.
One of the salient points of the joint statement was the appeal for GCF to facilitate and promote direct access of the fund by the Asean and other developing-country parties for the “achievement of the sustainable development and global goals of the Paris Agreement.”
Organizations, such as government agencies, civil society, development partners and the private sector that meet the required fiduciary standards can apply as Accredited Entities that can submit proposals to the GCF for funding. As the NDA, the DENR, with support from the GCF Readiness Programme, is establishing a “No Objection Procedure”, which included a screening and prioritization tool (SPT). The SPT will prioritize concept notes that meet the GCF investment criteria and can potentially contribute to the country’s priorities in adapting and mitigating climate change. The DENR will also be providing technical assistance to entities interested in applying for GCF accreditation. Environment Undersecretary for Climate Change Service Analiza R. Teh, whose office serves as the country’s focal point to the GCF, said the DENR will facilitate the processing of all climate-change mitigation and adaptation funding proposals. “ T h i s a n nou ncement w i l l strengthen our ongoing commitment to adopt a whole-of-government approach to a climate-resilient Philippines,” Teh said. Teh urged concerned organizations to develop project ideas that can be endorsed to GCF for funding.
PHL seeks to strengthen economic relations with Hong Kong By Recto Mercene @rectomercene
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he Philippines wants to attract more trade and investment from Hong Kong as it moves to further strengthen economic relations with the special administrative region. The Department of Foreign Affairs (DFA) said economic cooperation was on top of the agenda during the meeting between Foreign Secretary Alan Peter S. Cayetano and Chief Executive Carrie Lam Cheng Yuet-Ngor of the Hong Kong Special Administrative Region (SAR) last Friday. “We are optimistic about the future of Philippine-Hong Kong relations, and we look forward to taking giant steps in various areas of cooperation,” Cayetano said while on official visit. During the meeting, Cayetano said he discussed with Lam a wide range of issues, including the enhancement of economic relations between the Philippines and Hong Kong, cultural cooperation, people-to-people exchanges, and matters related to the Filipino Community in Hong Kong. “We talked about opportunities to further strengthen cooperation in the areas of trade and investments, labor, tourism and people-to-people exchanges, especially with the signing of the Asean-Hong Kong Free Trade Agreement,” Cayetano said. According to the DFA chief, he offered to assist investors from Hong Kong in exploring opportunities in the Philippines and encouraged the opening of an Economic and Trade Office in Manila. He said tourism is an area for growth that Hong Kong investors should seriously take a look at, as Cayetano also took the opportunity to thank Lam for the hospitality extended to the close to 219,000 Filipinos working in the SAR. The Secretary said the Hong Kong chief executive also expressed her appreciat ion for the contribution of Filipinos to Hong Kong’s economic growth and development, and emphasized that she “wants Filipino
workers to work and live in Hong Kong happily.” Cayetano was accompanied during the meeting by incoming Consul General Antonio Morales, Foreign Undersecretar y for International Economic Relations Manuel Teehankee, presidential adviser on Investments Antonio Cablitas and other DFA officials. Joining the call from the Hong Kong side were Secretary of Commerce and Economic Development Edward Yau Tang-Wah and Acting Secretary for Labor and Welfare Casper Tsui. It is common knowledge that the majority of trade between the Philippines and Hong Kong is purely a transit point, for trade to and f rom Mainland China. However, it is a route that many businesses prefer, as Hong Kong still retains the advantage of being a duty-free por t, operating under recognized international standards. An Association of Southeast A s i a n Nat ion s br ie f i n g l a s t month said that, as of the end of 2016, there were approximately 185,000 Filipinos residing in Hong Kong, most of them working as domestic helpers in the city. According to the Hong Kong Census and Statistics Department, 33 Philippine companies had set up their local offices in Hong Kong as of June 2016. Tourism between the Philippines and Hong Kong has increased significantly since the attack on a Hong Kong tourist bus traveling through Manila in 2010. According to the Hong Kong Tourism Board, the number of visitors coming from the Philippines amounted to 701,296 in the first 11 months of 2016, an increase of 12.5 percent year-onyear. The number of Hong Kong tourists visiting the Philippines reached 115,000 in 2016. The Philippines was the 13thlargest trading market for Hong Kong, in both the first 11 months of 2016 and 2015. Hong Kong’s total exports to the Philippines in 2016, dropped 2.5 percent to $3 billion, following an increase of 7.9 percent in 2015.
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Editor: Jennifer A. Ng • Monday, December 4, 2017
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PHL wants to continue fishing in tuna-rich high seas By Jasper Emmanuel Y. Arcalas
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@jearcalas
he Philippines is seeking to secure a five-year extension of its access to the tuna-rich high seas pocket one (HSP1) to sustain the growth of the local fisheries sector, according to the Department of Agriculture (DA). Agriculture Undersecretary for Fisheries Eduardo B. Gongona said continued access to HSP1 is one of the country’s priority agendas in the 14th Regular Session of the Western and Central Pacific Fisheries Commission (WCPFC) being held at the Philippine International Convention Center in Pasay City, from December 3 to 7. “There are two things we are negotiating with the commission. One is the continuous access to high seas pocket one and the continued application of [Fisheries Administrative Order] 236 during the FAD [fish-aggregating devices] closure period as a compatible measure to the [WCPFC] Conservation and Management Measure,” Gongona told reporters in a news briefing during the opening of the 14th WCPFC last Sunday. Gongona, who is also the Bureau of Fisheries and Aquatic Resources (Bfar) national director, said 75 percent of the country’s tuna catch are exported, while the remaining volume are processed locally. The four-year access to the HSP1 granted by the WCPFC to the Philippines in 2013 is expiring this year. The Philippines caught a combined total of 333,209 metric tons (MT) of tuna (bigeye, skipjack and yellowfin species) from commercial and municipal fisheries in 2016, according to the annual report submitted by the BFAR to the WCPFC in August. The same report also indicated that the Philippines caught a total of 24,424 MT tuna from HSP1 last year. “The Philippines was given limited access to High Seas Pocket 1 as Special Management Area, allowing only 36 traditional fresh/ ice-chilled fishing vessels operating as a group. Philippine-flagged vessels operating in HSP1 are managed under the DA-BFAR Fisheries Administrative Order 245-3,” the report read. “Out of 36 catcher vessels there were 32 vessels that entered HSP1 for 2016. The total catch of these vessels operating in HSP1 for the period of January to December 2016 was around 24,424MT,” it added. The Western and Central Pacific Ocean (WCPO) is the source of about 2.8 million metric tons of tuna valued at $5.3 billion, representing 79 percent of the aggregate catch in the entire Pacific Ocean and 56 percent of the global tuna catch, according to the BFAR. “The Philippines, in particular, contributes an annual tuna catch of 248,000 MT, or 9 percent to 10 percent of the total production of WCPO,” it said. WCPFC is a regional fisheries-management organization that governs fishing activities, particularly of tuna, in the high seas or waters that do not belong to any country. The WCPFC’s annual meetings are aimed at establishing
Cooperatives–the key to success in agriculture (3)
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ichael M. Alunan is reminding me for the second time in his BusinessMirror column last Wednesday, with the title “Duterte reforms in coop Henry J. Schumacher sector key to poverty alleviation,” how important the expansion of the cooperative europe Beat movement would be in the Philippines to address the poverty in agriculture. I was appalled to learn from him that it takes three to 10 months to get registered with the Cooperative Development Authority. Looking at my investment in coffee-growing in Camarines Norte and having convinced young farmers there to create a cooperative, I can just imagine how enthusiastic they will be to wait up to 10 months to get their initiative approved by the government. There is no doubt that the economic team of the Duterte administration should look into this, together with the Agriculture secretary. What will the administration gain by actively supporting the creation of more cooperatives? If farmers are getting together, developing a social form of business that relies on a sense of community, it will lead to competitive farming, mechanization of farms, the application of the latest technologies, the focus on high-value crops, the exclusion of the middleman and the creation of effective supply and value chains. Allow me to remind you that over 20 million people in Germany are members of cooperatives; organizations that work according to the motto: “What one person cannot accomplish alone can be accomplished by many.” This enables them to establish enterprises they would not be able to finance alone. The Philippines has a long history in creating cooperatives, but only a few cooperatives are successful. What are the reasons early cooperatives failed? n Incompetent management; n Lack of proper understanding of the principles, practices and true aims and purposes of cooperatives; n Improper use of credits by the borrowers who, instead of using the money for production, spent it on nonessentials; n Defective securities; n Inadequate character and moral responsibility in handling the other fellows’ money; and n Lack of adequate safeguards against unscrupulous officers who took advantage of their position to benefit themselves. Heavy public and private investments into agriculture will allow the consolidation of farmland, as farm consolidation is of great importance. The best models of Philippine cooperatives should be copied and cascaded. The adoption of advanced farming technologies can only be achieved by management systems that can focus on competitive land sizes, good research and development in coordination with existing research institutes in the country, supported by increased extension service to be provided by the government. If cooperatives are the key for the future of agriculture and having examples of very successful cooperatives, isn’t it high time that the government and the private sector got together to jointly find solutions to cascade the successful cooperatives throughout the country? There are many options for cooperatives, from farming to food production, from finance to marketing and sales. As mentioned above, cooperatives can be main players in creating and driving agri-food supply and value chains, always assuming that they are managed by people with experience and integrity. Comments are welcome; e-mail me under Schumacher@mcasia.org.
conservation and management measures for highly migratory fish stocks, as tuna, according to the BFAR. This is the second time the Philip-
pines is hosting a WCPFC meeting at the same venue. The first one was held in December 2012. The WCPFC is comprised of Australia, China, Canada, Cook
Islands, the European Union, Federated States of Micronesia, Fiji, France, Indonesia, Japan, Kiribati, Republic of Korea, Republic of Marshall Islands,
Nauru, New Zealand, Niue, Palau, Papua New Guinea, the Philippines, Samoa, Solomon Islands, Chinese-Taipei, Tonga, Tuvalu, the United States and Vanuatu.
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Banking&Finance
Monday, December 4, 2017 • Editor: Jun B. Vallecera
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Five-port November collection allowed BOC to report 15% more revenues
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he Bureau of Customs (BOC) collected P46.47 billion in November, higher by 15.4 percent, from only P40.239 billion in the same month last year, basically on account of the five main collection ports exceeding their target collection for the month.
According to preliminary data from the BOC, the P46.47-billion revenue collection in November was the highest recorded monthly haul in agency history. Customs Comm issioner Isid ro S. Lapeña said the five collection districts, which include the ports of Batangas, Davao, Cagayan de Oro, Clark and Tacloban, were able to surpass their respective monthly target. Data from the bureau’s Financial Service unit show the following ports achieved their monthly collection targets: the Port of Batangas with P13.339 billion, or an 18-percent overperformance against target revenue of only P11.36 billion; the Port of Tacloban with P59 mil-
lion, 177 percent higher against target of only P21 million; the Port of Cagayan de Oro with P1.273 billion, 1.1 percent more than target of only P1.259 billion; the Port of Clark, with P149 million or 6.6 percent more than the target of P140 million; and the Port of Davao with P1.56 billion, also 6.6 percent higher against target of only P1.464 billion for the month. “We have been achieving historical collection figures since September, but the latest November collection was really a milestone, being the highest ever achieved by the BOC. This happened despite having only 19 working days to achieve our collection goal. I think we could have surpassed our monthly target has No-
vember had the usual number of working days,” Lapeña said. According to Lapeña, apart from the collection efficiency of the BOC and the “no tara policy” strictly being enforced, the increase in the November collection was marked by the increase in oil prices. He added that auction sale proceeds, a nontraditional source of revenue for the bureau, also contributed significantly to the collection feat. According to data from the Port Operations Service, total auction proceeds for the month of November alone reached P62.515 million. Total auction proceeds from January to November stood at P256.830 million. This came from auction proceedings of BOC ports nationwide. “I am really optimistic that by December, the BOC will finally be able to hit, if not surpass, its monthly target. Together with all the ports, we are really hoping that we will achieve this,” Lapeña said. Rea Cu
Insurer hot line now available 24/7 F
WD Life Philippines (FWD Life) has made available its so-called connect hot line on 24/7 basis starting on Monday to better serve its customers. FWD Life is the first insurer in the Philippines to extend its customer hot line service operating hours all days of the week nonstop 24 hours a day. The service is made available through the hot line +632-888-8388. According to FWD Life, its customer connect service now allows customers to get in touch with the company’s representatives at their convenience for policyowner servicing and claim requests. “ To en r ic h c u stomer e x per ience
Case clippings
By Justice S J Ranada Jr.
SEXUAL ABUSE–no penetration of vagina in a rape case Where the victim in a rape case merely testified that her father touched her breasts and vagina, and thereafter placed himself on top of her, and there was no specific mention of a penetration of the accused’s penis or fingers into her vagina, the accused cannot be held liable for rape by sexual intercourse as charged in the information; however, said accused can still be convicted of sexual abuse under Article III of Republic Act 7610. People v. Ursua 04 Oct. 2017
GR 218575 Peralta, J
and remain competitive, we are moving toward a digital 24/7 multichannel customer-engagement center that offers diverse service options for our customers,” FWD Life President and CEO Peter Grimes said. FWD Life customers can also chat with a customer service representative online through its Live Chat feature on the FWD Life web site at http://fwd.com.ph, which is also available throughout the day. “Our vision is to change the way people feel about insurance, and so we want to give our customers the choice to engage with us any way and any time, at their own convenience. FWD Life is also preparing more operational, technical and technological enhancements to our services that will help us provide customers with relevant and timely support and continue to grow our customer engagement,” he added. In October FWD Life had launched a dollar-denominated single-payment insurance protection and investment plan in the country, giving customers the opportunity to take advantage of the long-term growth potential of international economies, while giving them lifetime insurance protection. Premiums pa id for t he plan w i l l be invested in FWD Life’s new Global United States Dollar Equity Index Fund, which provides access to a wellbalanced portfolio of worldwide investments and invest in top corporations of the world.
Perspectives Eternal Plans releases pension benefits to small-business owner
Ledwina Ruiz Montane of Masbate (third from left) has received her pension maturity benefit worth P500,000 from Eternal Plans Inc. (EPI). Montane bought the plan 15 years ago with her earnings from from her small-scale koprahan business. “I took out the plan, and with patience, blood and sweat, I paid for it. I now know that Eternal Plans really gives out plan benefits,” she said during the release of her check. She plans to use the money to build apartment units for rent. With Montane and companions is EPI Claims and Availment Manager Christian Jerome Aguilan (left).
Central banks find tool to curb bubbles doing the job
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entral bankers are starting to see promising results from one of the recent additions to their monetary policy toolbox. Lending curbs to stem financial risk— so-called macroprudential limits—have helped slow risky borrowing and temper property price bubbles in countries from New Zealand to Canada, a host of financial stability reports showed this week. While there hasn’t been uniform success —Hong Kong’s housing market shows no signs of cooling—it’s given central banks some breathing space to be more gradual in tightening monetary policy. “If you think about lessons from the global financial crisis, macroprudential is one of the key lessons,” said Steven Bell, chief economist at BMO Global Asset Management in London. “It was a tool of counter-cyclical credit tightening, and I think that’s going to be a permanent feature.” Asia-Pacific nations have recently been among the boldest in trying to curb the effects of ultra-easy monetary policies. In New Zealand, where tighter mortgage lending rules helped to curb soaring property costs, the central bank is now ready to reverse restrictions from January 1, acting Governor Grant Spencer said last Wednesday, adding that price pressures will continue to moderate. Macroprudential tools came of age in the aftermath of the financial crisis as central banks turned to them to cool markets without bludgeoning them and hurting overall economic growth with the blunt instrument of interest rates. The hope is,
if successful, rates can be kept lower for longer to support the economy. Australia’s measures are biting, with a housing boom all but over as property prices in Sydney decline. The Reserve Bank of Australia sees tightening lending standards as necessary medicine that’s already making the balance sheets of banks and borrowers healthier, although a record debt overhang for households remains a worry. Risks in the housing market “have not gone away, but the fact that they are not building at the rate they have been is a positive development,” Reserve Bank of Australia Governor Philip Lowe said in a November 21 speech. China is set to see the first decline in home sales since 2014, owing to interventions over the past year-and-a-half to cool the property market, including tighter down-payment requirements and restricting non-resident buyers. Officials are keeping up the enhanced rules, betting that they will help ensure the world’s No. 2 economy can manage a controlled cooling without triggering a growth slump. In Southeast Asia Singapore earlier this year tweaked some property curbs that were meant to cool the market, helping reverse a housing slump. The Monetary Authority of Singapore, in its financial stability report released last Thursday, said enhanced postcrisis restrictions on banks in South Korea and Hong Kong—such as limits on cross-currency swaps—helped reduce vulnerabilities in the region.
Insurance CEOs face new risks, new requirements
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nsur ance executives and their risk functions will need to go deeper and think differently to keep pace as the risk environment continues to evolve. These are not easy times for insurance CEOs and their risk-management functions as the risk environment continues to evolve. Based on KPMG International’s recent survey, the executives are currently focused on three big risks: emerging technology risks, operational risks and regulatory risks. Besides, 45 percent of the insurance CEOs highlighted that the uncertainty of today’s political landscape is having a greater impact on their organization than they had seen in years. Most insurers are now working hard to improve their risk-management capabilities. More than three-quarters of our respondents (76 percent) are spending “much more” time on scenario planning and 70 percent said that they are recruiting new skills and specialists to help them better understand the geopolitical risks. Furthermore, 70 percent of insurance CEOs plan to increase investment into their governance and risk functions over the next three years; almost a quarter (23 percent) suggest that this new investment will be “significant.”
Go deeper and think differently
More investment, improved capabilities and increased focus on scenario planning will certainly be important as risk managers fight to get their arms around a wider and more uncertain risk environment. However, our experience suggests that CEOs and their risk managers may have to go deeper and think differently if they hope to keep up with the pace of change and
meet the needs of the organization. Increasing the frequency and scope of scenario planning, for example, will certainly help insurers prepare for the risks that they know. It will also help decision-makers start to better understand the roles, responsibilities and reactions to undertake when unexpected risks arise. But that is just the first step. Once the scenarios are understood and developed, the next step is to convert the findings into a tactical action plan. Knowing what you want to do when faced with a particular situation is one thing. Knowing how you will do it is another thing altogether.
organization to focus more on being the “enablers” of the business. Rather than simply identifying and raising risks, they should be working with the business and stakeholders to find ways to make those risks more manageable. Other than conducting scenario planning to uncover unexpected risks, they should also be looking for the unexpected opportunities that could emerge from the different scenarios. They could be using their technology to speed up processes in a way that hands flexibility back to the business rather than using it to simply speed up the identification of risks.
Moving to higher value activities
Time for a step-change
The commitment to hire more specialists and recruit new skills will help improve the capacity and capabilities of the risk-management function. In today’s analytical enterprise, the risk function desperately needs more data analytic capability and more resources capable to identify new risks and support growth. Along with adding more bodies, risk management functions will also need to enable those resources to start focusing on more “high value” activities. This can be accomplished by leveraging new technologies and tools to automate many of their manual and repetitive tasks and processes. To be fair, risk-management functions have come a long way with automation over the past few years. But much more can—and should—be done.
Looking for the opportunity in the risk
Another way that risk managers could be better protecting themselves and their stakeholder is by shifting their role from being the “police” of the
As the risk environment continues to change, so do the business and st a keholders’ e x pec t at ions. R iskmanagement functions will need to find ways to dig deeper and to think differently about the way they serve the business and the value they return to customers and stakeholders. The fact that CEOs are planning to increase investment into the risk function is good news. Now it’s time for the risk function to use those new capabilities and resources to make a real step-change in the way they operate. The article “Insurance CEOs face new risks, new requirements” is written by Michael van Vuuren, KPMG in Hong Kong. © 2017 R.G. Manabat & Co., a Philippine partnership and a member-firm of the KPMG network of independent memberfirms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. For more information on KPMG in the Philippines, you may visit www.kpmg. com.ph.
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Editor: Lyn Resurreccion • Monday, December 4, 2017 A7
House GOP set plan to avert Dec. 8 govt shutdown
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ouse Republicans announced a plan last Saturday to pass a two-week extension of federal government funding without Democratic votes and avoid a shutdown on December 8.
The legislation would push the next deadline to the Friday before Christmas, giving House and Senate lawmakers time to knit together their respective tax-cutting bills into a single piece of legislation to present to President Donald J. Trump. “Continuing funding for federal operations is critical to our nation’s stability, our economy and for the well-being of the American people,” Rep. Rodney Frelinghuysen of New Jersey, chairman of the House Appropriations Committee, said in a statement. “It is a necessary step to ensure the programs and services that all Americans rely on are maintained and available to all,” Frelinghuysen said. Rep. Richard Hudson, a North Carolina Republican, said last Friday that the leadership team planned to press rank-and-file members to vote for the funding extension without any extraneous provisions that could cause delays. A handful of conservatives, including Reps. Scott Perry of Pennsylvania and Jim Jordan
of Ohio, had said earlier that they wouldn’t vote for it. The short-term spending bill, known as a continuing resolution, would still need support from some Democrats in the Senate, where 60 votes will be required to advance the measure and Republicans have only 52 members. But being able to get it through the House by relying just on the Republican majority removes some Democratic leverage to press to include other issues.
Deadline set
The December 8 deadline was set in September when Trump agreed with Democratic leaders to fund the government and suspend the debt limit for just three months. Republicans usually need a bipartisan agreement on stopgap measures, even in the House were they have a solid majority, because many conservatives strongly oppose short-term solutions that leave the military operating under previous funding levels. Now, however, Republicans bet
that putting all their energy into a legislative win on tax cuts will convince enough of their own members to push the spending negotiation off. The House passed its version of the tax legislation in November, and the Senate wrapped up its measure early last Saturday. A conference committee, which could begin meeting in days, will reconcile the two versions into a final bill that must be passed by both chambers before heading to Trump for his signature.
Tax negotiations
The strategy for the funding measure grew in part from the complicated coalition that Republican leaders have to build for their tax overhaul. As part of the negotiation to convince moderate Republican senators like Susan Collins of Maine to support the tax bill, Majority Leader Mitch McConnell of Kentucky promised that a bipartisan proposal to stabilize health-insurance markets would be attached to must-pass legislation—like a spending bill to avoid a government shutdown—before the end of the year. Collins made the demand because the Senate tax bill would end the Obamacare mandate that individuals have health coverage, which is forecast to make insurance premiums rise. The leading health proposal, from Republican Lamar Alexander of Tennessee and Democrat Patty Murray of Washington, is unpopular in the House, and Speaker Paul Ryan
of Wisconsin said as recently as November that he doesn’t support it. Attaching the bipartisan healthcare bill to a stopgap spending bill would risk enraging conservatives.
Fulfill promises
BY creating another government shutdown deadline on December 22, the Senate leadership can still try to fulfill its promises to moderates by attaching the Lamar-Alexander legislation to a must-pass bill before the end of the year—and hope by then the tax overhaul is already on the president’s desk. Another lingering contentious issue is the legal status of young immigrants brought to the United States illegally as children. There’s support in both parties for legal protection that would allow so-called Dreamers to remain in the country under certain conditions. Trump earlier this year ended the Obama-era program known as Deferred Action for Childhood Arrivals (Daca) and gave Congress until March to come up with a fix. Democrats and some Republicans, including Sen. Jeff Flake of Arizona and Rep. Carlos Curbelo of Florida, demand a solution before the end of the year.
Daca solution sought
Curbelo said he would vote for a short-term spending bill that lasts until December 22, but “I would not support funding the government beyond December 31, unless we
have a solution for Daca,” he said last Friday. Also, appropriators probably won’t have time to finish their package of actual spending bills before December 22, because Republican and Democratic leaders still haven’t agreed on topline spending levels. Under the law, the defense-spending cap is to drop to $549 billion in 2018, from $551 billion in 2017, while nondefense spending is to drop to $516 billion from $518 billion. Some Republicans want a large boost to the defense cap and Democrats have demanded an equal size increase to nondefense spending in return. Even once caps are agreed upon, hundreds of line items and policy provisions in the final spending bill need to be hammered out. House Minority Leader Nancy Pelosi of California and Senate Minority Leader Chuck Schumer of New York didn’t attend a White House meeting on November 28 to discuss these spending caps because Trump tweeted that morning that he didn’t think a deal would be possible.
Debt limit looms
That means the legislation to avert a government shutdown on December 22 will probably have to be another stopgap measure lasting until at least sometime in January, the aides said. Andy Biggs, a Republican from Arizona, said House leaders recognized that possibility in their Friday morning meeting.
Congress won’t have to decide this month how to raise or suspend the federal debt limit, which was a part of the September deal, because the Treasury can use so-called extraordinary measures to avoid defaulting on its debt obligations. These steps, such as suspending some government investments, could push that deadline back until sometime in late-March or early-April 2018, according to a report from the Congressional Budget Office. Still, even with remarkable Republican unity on the tax overhaul buying some goodwill, there are Republican House members who resent being forced to perform the most basic function of Congress—funding the government—via a series of short-term crisis-avoidance bills.
Freedom caucus
Jordan, a founder of the conservative House Freedom Caucus, said last Friday he’d vote against a twoweek measure to avoid a government shutdown, and he’ll consult the other members of his group to check on their support. Perry, another Freedom Caucus member, said he has a “whole host of concerns” about the strategy to fund the government for just two weeks. He said such shortterm solutions, often presented at the last moment, are bad for the military and give Democrats more ways to make policy demands. “I don’t know if it’s a failure of leadership,” Perry said. “But it seems to me to be a failure of vision.” Bloomberg News
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Monday, December 4, 2017
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Europe set to award ‘holy grail’ to China with tariff-rules revamp
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Cargo shipping operations at ECT Delta and Euromax terminals in the Netherlands Bloomberg
uropean industries from steel to solar are bracing for a new set of tariff rules that may make it harder to fend off low-cost imports from China and other foreign countries. European Union (EU) governments are due on Monday to rubber-stamp the biggest revamp of the bloc’s method for calculating duties aimed at countering belowcost—or “dumped”—imports. The move is a response to longstanding Chinese government demands for more favorable treatment while stopping short of saying those shipments are fairly priced. The overhaul will end an EU presumption that Chinese exporters and those in nine other members of the World Trade Organization (WTO) operate in non-market conditions. That approach, which has allowed for higher European antidumping duties, is being replaced by a more opaque procedure for determining whether imports unfairly undercut domestic producers. “There’s going to be much more work for European industries to make their dumping cases,” said Laurent Ruessmann, a partner and trade expert in the Brussels office of law firm Fieldfisher Llp. “There’s a lot of discretion for EU trade
China has coveted market-economy status as the ultimate recognition from the West…. It’s their holy grail.” —Lee-Makiyama authorities in the new system. The question is how that discretion is used and what the political influence will be.”
Political, economic rewards
The European Union carrot to China comes as both seek to claim a global leadership role in trade amid US President
Donald J. Trump’s protectionist stance, which has shaken the post-World War II commercial order. The US has taken a different tack from the EU, rejecting China’s claim of marketeconomy status and refusing to alter how it calculates antidumping duties. Europe is offering political and economic rewards to Beijing by removing China from the European list of nonmarket-economy countries in dumping investigations. While being the EU’s No. 2 trade partner behind the US, China is grouped with the likes of Belarus and North Korea in lacking market-economy designation by Europe and faces more European antidumping duties than any other country. Such European Union levies cover billions of euros of Chinese exports, such as reinforcing steel, solar panels, aluminum foil, bicycles, screws, paper, kitchenware and ironing boards, curbing competition for producers across the 28-nation bloc. “China has coveted market-economy status as the ultimate recognition from the West,” said Hosuk Lee-Makiyama, director of the European Centre of International Political Economy in Brussels. “It’s their holy grail.”
European protection
The EU has traditionally used other
nations’ figures to calculate antidumping levies against China on the grounds that Chinese state intervention artificially lowers domestic prices and makes them an unreliable indicator of a good’s “normal value.” This practice, known as the analogue-country model, has resulted in higher European Union duty rates against Chinese exporters and—by extension—more protection for European manufacturers. China’s agreement on joining the WTO 16 years ago made it harder for the EU to justify using the analogue-country model against Chinese exporters after a specific provision expired in December 2016. To drive home the point, Beijing filed a complaint the same month against the European Union at the Geneva-based global trade arbiter, hastening European deliberations over an overhaul of antidumping rules. EU legislators negotiated a deal in October and the full European Parliament offered its endorsement the following month, leaving national governments to give their final approval on December 4. The legislation, due to be published on December 18, features elements of compromise between free-trade governments in northern Europe allied with China and more protectionist member-countries in the south.
‘An elegant solution’
“It’s quite an elegant solution,” said LeeMakiyama. “The EU has found a near-impossible compromise between the demands of European industry that thinks China is the enemy and the bloc’s legal obligations under the WTO. There remains plenty of scope to defend manufacturers in Europe because, in a way, Europe is abolishing the diploma just as China graduates.” To ease the impact of the new system on European manufacturers, the European Union will have recourse to a special formula for calculating antidumping duties against countries whose markets are deemed to have “significant distortions’’ resulting from state intervention. Under the new rules, the EU will be able to construct the normal value of a good in an exporting country using undistorted costs. In a sign of the balance that the new system strikes, the Chinese government is sending out skeptical signals about the European Union changes. The Ministry of Commerce in Beijing said in mid-November the notion of significant market distortions will cause “serious damage” to the WTO’s antidumping legal system. The ministry also said “China reserves its rights under the WTO disputesettlement mechanism and will take the necessary measures to protect the rights of Chinese companies.” Bloomberg News
First baby born from a uterus transplant, a milestone in US
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he first birth as a result of a womb transplant in the United States has occurred in Texas, a milestone for the US but one achieved several years ago in Sweden. A woman who had been born without a uterus gave birth to the baby at Baylor University Medical Center in Dallas. Hospital Spokesman Craig Civale confirmed last Friday that the birth had taken place, but said no other details are available. The hospital did not identify the woman, citing her privacy. Baylor has had a study underway for several years to enroll up to 10 women for uterus transplants. In October 2016 the hospital said four women had received transplants, but that three of the wombs had to be removed because of poor blood flow. The hospital would give no further information on how many transplants have been performed since then. But Time magazine, which first reported the US baby’s birth, says eight have been done in all, and that another woman is currently pregnant as a result. A news conference was scheduled on Monday to discuss the Dallas baby’s birth. A doctor in Sweden, Mats Brannstrom, is the first in the world to deliver a baby as a result of a uterus transplant. As of last year, he had delivered five babies from
The first baby born as a result of a womb transplant in the United States lies in the neonatal unit at Baylor University Medical Center in Dallas. Baylor University Medical Center via AP
women with donated wombs. There have been at least 16 uterus transplants worldwide, including one in Cleveland from a deceased donor that had to be removed because of complications. Last month Penn Medicine in Philadelphia announced that it also would start offering womb transplants.
Womb donors can be dead or alive, and the Baylor study aims to use some of both. The first four cases involved “altruistic” donors—unrelated and unknown to the recipients. The ones done in Sweden were from live donors, mostly from the recipients’ mother or a sister. Doctors hope that womb transplants
will enable as many as several thousand women born without a uterus to bear children. To be eligible for the Baylor study, women must be 20 to 35 years old and have healthy, normal ovaries. They will first have in vitro fertilization to retrieve and fertilize their eggs and produce embryos that can be frozen until they are ready to attempt pregnancy. After the uterus transplant, the embryos can be thawed and implanted, at least a year after the transplant to make sure the womb is working well. A baby resulting from a uterine transplant would be delivered by cesarean section. The wombs are not intended to be permanent. Having one means a woman must take powerful drugs to prevent organ rejection, and the drugs pose long-term health risks, so the uterus would be removed after one or two successful pregnancies. The American Society for Reproductive Medicine issued a statement last Friday calling the Dallas birth “another important milestone in the history of reproductive medicine.” For women born without a functioning uterus, “transplantation represents the only way they can carry a pregnancy,” the statement said. The group is convening experts to develop guidelines for programs that want to offer this service. AP
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San Francisco defends ‘sanctuary city’ policy
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AN FRANCISCO—The attacks on San Francisco and other cities with similar immigration policies began moments after a jury acquitted a Mexican man of killing a woman on a popular pier, some calling for a boycott of the city that fiercely defends its reputation as a refuge for all. President Donald J. Trump called the verdict a “complete travesty of justice,” and US Atty. Gen. Jeff Sessions demanded cities like San Francisco scrap immigration policies that bar cooperation with federal deportation efforts. Twitter users turned to the hashtags #BoycottSanFrancisco and #kateswall to demand construction of the United States-Mexico border wall that Trump has called for. Conservative politicians and celebrities, such as former Alaska Gov. Sarah Palin and actor James Woods, lambasted the city as unsafe. City officials vowed to stand behind their “sanctuary city” policy. It’s what led Jose Ines Garcia Zarate to be released from San Francisco’s jail despite a federal request to detain him for deportation several weeks before Kate Steinle was fatally shot in the back in 2015. He had been deported five times and was wanted for a sixth. “San Francisco is and always will be a sanctuary city,” said Ellen Canale, a spokeswoman for Mayor Ed Lee. Sanctuary policies improve public safety by allowing immigrants to cooperate with police without fear, said state Sen. Scott Wiener, a Democratic former San Francisco supervisor. “This family has been through hell, but there are people, including our president, who continue to use this tragedy to demonize immigrants and to slander immigrants by suggesting they are all criminals, and that is not true,” he said last Friday. San Francisco was among the first US cities to establish a sanctuary law in 1989 as part of a national wave of local policies intended to help Central American refugees. Since then, the city consistently has been an early adopter of some of the most immigrant-friendly policies nationwide, and it takes pride in serving as a safe place for religious and gender minorities, non-English speakers and people in the country illegally. Hundreds of other cities have similar immigration policies. A judge did not allow immigration politics into the courtroom for Garcia Zarate’s trial. San Francisco Deputy District lawyer Diana Garcia urged jurors to convict Garcia Zarate of first-degree murder, saying he had come to the pier with a gun and a desire to hurt someone. His attorneys argued that he found a gun wrapped in cloth under a chair on the pier, and it fired when he picked it up. Jurors rejected charges of murder and involuntary manslaughter but did convict Garcia Zarate of being a felon in possession of a firearm, which carries a maximum sentence of three years in jail. It’s likely he will have served long enough behind bars considering his time in custody. US Immigration and Customs Enforcement said it would “ultimately remove” Garcia Zarate from the country. During the 2016 presidential campaign, then-candidate Trump and others pointed to Steinle’s death as reasons the country’s immigration laws should be tightened. Trump called the verdict “disgraceful” and posted on Twitter that “the Kate Steinle killer came back and back over the weakly protected Obama border, always committing crimes and being violent, and yet this info was not used in court.” “His exoneration is a complete travesty of justice. BUILD THE WALL,” Trump tweeted. Garcia Zarate’s convictions were immigration and drug-related, but he had no record of violence. Former President Barack Obama had kept his Republican predecessor’s policy of allowing US immigration officials to ask local police to detain people suspected of living in the country illegally for up to 48 hours. Garcia Zarate had finished a federal prison sentence for illegal reentry into the US and had been transferred to San Francisco’s jail in March 2015 to face a 20-year-old charge for selling marijuana. The sheriff’s department released him a few days after prosecutors dropped the marijuana charge despite a request from federal officials to detain him for deportation. Federal officials got an arrest warrant for Garcia Zarate days after the shooting, which they say was a violation of his supervised release on the illegal reentry conviction. A judge unsealed that warrant last Friday. Michael Cardoza, a longtime San Francisco Bay Area lawyer, said the prosecutor overreached in asking for a first-degree murder conviction, which would have meant that Garcia Zarate intended to kill Steinle despite strong evidence that the bullet ricocheted around 90 feet (27 meters) before striking her. Cardoza said a better case could have been made to convince jurors that Garcia Zarate had a “reckless disregard for human life” and to convict him of seconddegree murder. Steinle’s father, Jim, told the San Francisco Chronicle that “justice was rendered, but it was not served.” “We’re just shocked—saddened and shocked... that’s about it,” he said in an interview described as the family’s last. AP
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Trump suggests openness to nego on GOP tax plan Apple chief tells China: Internet must have security, humanity
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pple Inc. Chief Executive Tim Cook has called for future Internet and artificialintelligence (AI) technologies to be infused with privacy, security and humanity. Cook made the comments last Sunday at the opening ceremony for China’s World Internet Conference— an event designed to globally promote the country’s vision of a more censored and controlled Internet. It’s the second Chinese appearance in two months for the executive, who met with President Xi Jinping in October. “ The theme of this conference—developing a digital economy for openness and shared benefits—is a vision we at Apple share,” Cook said. “We are proud to have worked alongside many of our partners in China to help build a community that will join a common future in cyberspace.” Cook’s comments come at a pivotal point for the company’s future in China, which is now its biggest market outside of North America. It relies on the sale of hardware and services in the world’s most populated country to propel revenue and profit growth. But the efforts required to stay in China’s good graces are causing tensions with civil libertarians and politicians at home. He said Apple’s operations began three decades ago with a handful of employees. Today, it helps support more than 5 million jobs in China, including 1.8 million local mobileapp developers, he added.
Under fire
Apple has come under fire for cooperating with Chinese authorities in removing apps that give users there uncensored communications. In November Apple complied with government orders to pull Microsoft Corp.’s Skype phone and video service from the Chinese version of its popular app store. Cook used an earnings call with investors to justify such moves, saying it obeyed the laws of the markets where it operates. “Much has been said of the potential downsides of AI, but I don’t worry about machines thinking like humans. I worry about people thinking like machines,” he said. “We all have to work to infuse technology with humanity, with our values.” Technology of the future should have openness, creativity and safeguards to protect users while providing privacy and decency, he added. It’s a goal that, according to Cook’s Chinese hosts, can only be accomplished through more laws and regulations that control what can be shared online. Politburo member Wang Huning called for a global emergencyresponse team that would respond in times of crisis using new and undetermined measures.
New order
“What we propose is we should promote a controllable security and build a new order,” Wang said through a translator. “Cybersecurity is a serious challenge. Cyber crimes and cyber terrorism has grown more rampant. The world’s destiny has become more intertwined in cyberspace.” Alphabet Inc.’s Sundar Pichai also delivered a speech and joined a panel last Sunday. Other leading technology executives taking part include Alibaba Group Holding Ltd. Chairman Jack Ma, Cisco Systems Inc.’s Chuck Robbins, Tencent Holdings Ltd.’s Pony Ma and Baidu Inc. founder Robin Li. Bloomberg News
President Donald J. Trump holds a girl in his arm and waves to members of the media as he arrives at the White House in Washington on December 2 after traveling to New York for fund-raising events. AP/Andrew Harnik
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ASHINGTON—President Donald J. Trump suggested last Saturday he may be willing to negotiate changes to a significant portion of the tax overhaul, the corporate-tax rate, injecting an element of uncertainty into the tax plan only hours after it cleared the Senate.
Highlights of Senate, House GOP bills to overhaul tax code
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he Senate and the House seek to achieve a sweeping overhaul of the nation’s tax code but go about it in different ways. With the Senate bill passed last Saturday and the House bill passed two weeks ago, congressional Republicans now will work quickly on a compromise measure to send to President Donald J. Trump by Christmas. A comparison of the Senate and House bills, each coming in at nearly $1.5 trillion: Personal income tax rates: Senate bill retains the current number of brackets, seven, but changes them to 10, 12, 22, 24, 32, 35 and 38.5 percent. Under current law, the top bracket for wealthiest earners is 39.6 percent. The House measure condenses seven brackets to four: 12, 25, 35 and 39.6 percent. Under the Senate bill, the reductions in personal income-tax rates are temporary, ending in 2026. They’re permanent in the House bill. Standard deduction: Used by about 70 percent of US taxpayers, currently $6,350 for individuals and $12,700 for married couples. Senate and House bills both double those levels to $12,000 for individuals and $24,000 for couples. Personal exemption: Both bills eliminatethecurrent$4,050personalexemption. State and local taxes: Senate and House bills end federal deductions for state and local income and sales taxes, but they allow the deduction for up to $10,000 in property taxes. Tax credits: Senate doubles perchild tax credit to $2,000. House raises per-child tax credit from $1,000 to $1,600, extends it to families earning up to $230,000. Creates a $300 tax credit for each adult in a family, which expires in 2023. Both bills preserve the adoption tax credit. Homemortgage-interestdeduction: Senateretainsthecurrentlimitforthedeductiontointerestpaidonthefirst$1million of the loan. House reduces the limit to $500,000, for new home purchases. Other deductions: Senate bill preserves deduction for medical expenses not covered by insurance but ends deductions for moving expenses and tax preparation. House eliminates medical expense deduction. Individual insurance mandate: Senate bill repeals the requirement in Democrat Barack Obama’s healthcare law that people pay a tax penalty if they don’t purchase health insurance.
Senate Majority Leader Mitch McConnell, Republican-Kentucky, answers reporters’ questions during a news conference last Saturday in Louisville, Kentucky. The Senate passed the tax bill early last Saturday morning with a 51-49 vote. AP/Timothy D. Easley
House bill does not. Alternative minimum tax (AMT): The AMT is aimed at ensuring that higher-earning people pay at least some tax. Senate bill doesn’t repeal it but reduces the number of people who have to pay it. House measure repeals the tax. Inheritance tax: Currently, when someone dies, the estate owes taxes on the value of assets transferred to heirs above $5.5 million for individuals, $11 million for couples. Senate bill doubles those limits but does not repeal the tax. House initially doubles the limits and then repeals the entire tax after 2023. Corporate taxes: Senate, House bills both cut current 35 percent rate to 20 percent, but Senate has one-year delay in dropping the rate. Pass-through businesses: Millions of US businesses “pass through” their income to individuals, who then pay personal income-tax on those earnings, not corporate tax. Senate bill lets people deduct 23 percent of the earnings and then pay at their personal income-tax rate on the remainder. Housemeasuretaxesmanyofthepassthroughbusinessesat25percent,pluscreatesa9-percentrateforthefirst$75,000in earnings for some smaller pass-throughs. Businesses: Senate and House bills both expand write-offs allowed for companies that buy equipment. Multinational corporations: Senate, House bills impose a one-time tax on profits that US-based corporations are holding overseas. Senate bill also ends tax advantages for firms moving overseas, and requires corporations to continue paying the business version of the alternative minimum tax. House measure seeks to eliminate tax incentives that encourage some US companies to move overseas. AP
Trump told reporters at the White House before a trip to New York City that he would consider setting the corporate-tax rate at 22 percent, compared to a 20-percent rate that he has pushed for with House and Senate Republicans during the fall. Pointing to expected talks between House and Senate negotiators this month, Trump predicted “something beautiful is going to come out of that mixer” and the business tax would come “all the way down from
35 percent to 20 percent. It could be 22 percent when it comes out, but it could also be 20 percent. We’ll see what ultimately comes out.” Trump spoke after the Senate approved a $1.5-trillion tax bill early last Saturday that would rewrite the nation’s tax code, cut individual rates and slash the corporate-tax rate from 35 percent to 20 percent beginning in 2019. If enacted, the bill would provide the most sweeping changes to the tax system in three decades and help Trump deliver the first major legislative win of his presidency. Trump’s suggestion of a higher corporate-tax rate than what has been included in legislation approved by the House and Senate represented an about-face after the president and administration officials maintained a hard line that a corporate rate higher than 20 percent was a nonstarter. Vice President Mike Pence said in a speech to the Tax Foundation in mid-November that the administration would “cut the corporate-tax rate from one of the highest in the developed world down to 20 percent—and not a penny more.” TreasurySecretaryStevenMnuchin, who accompanied Trump to New York for fund-raisers last Saturday, said in September that the 20-percent corporate rate was “not negotiable.” The shift perplexed some Republicans. Sen. Marco Rubio, Republican-Florida, tried to pare back the proposed cut in corporate-tax rates to 20.94 percent to provide a more
$1.5T The tax bill that the US Senate approved last Saturday
generous increase in the child-tax credit. But he was rebuffed. “Senate leaders & White House fought hard to defeat expanded #ChildTaxCredit b/c of 20.94 percent rate but now 22 percent is ok?” Rubio tweeted last Saturday. White House officials did not immediately respond to questions seeking clarity on Trump’s views of the proposed corporate-tax rate. Senate and House Republicans now head into a new phase of seeking to reconcile differences in the legislation passed by both chambers, a behind-closed-doors process that could move quickly. Trump has said he wants to sign the tax package into law before Christmas. Republicans have pointed to the tax bill as crucial to retaining its House and Senate majorities in next year’s midterm elections. Democrats have said the bill will solely help the wealthy and corporations at the expense of more modest-earning workers. Democrats have noted that while the corporate-tax rates would be permanently reduced under the plan, it would only offer temporary tax cuts to individuals, lasting until 2026. AP
A10 Monday, December 4, 2017
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AS CASE IS LEADING UP TO THE PRESIDENT
Trump: ‘Nothing to hide’ on Flynn
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ormer National Security Adviser Michael Flynn’s guilty plea has given Special Counsel Robert Mueller new leverage that may help him pursue more serious charges against others close to US President Donald J. Trump, perhaps leading up to the president himself. Trump, however, greeted the news with a show of confidence, signaling that he believes his campaign and transition teams are on solid legal footing in Mueller’s probe. In a Saturday tweet, Trump said Flynn’s contacts with Russians before the inauguration didn’t violate law. “I had to fire General Flynn because he lied to the Vice President and the FBI [Federal Bureau of Investigation]. He has pled guilty to those lies. It is a shame because his actions during the transition were lawful. There was nothing to hide,” Trump told his almost 44 million Twitter followers. Democratic lawmakers seized on the president’s tweet. “Trump’s claim today that he fired Flynn because of lies to FBI, as well as [Mike]Pence, shows knowledge of law-breaking he concealed— never before disclosed,” Sen. Richard Blumenthal of Connecticut, a former state attorney general, said on Twitter. “Obstruction of justice in the Oval Office unfolding before our eyes in real time.” Rep. Adam Schiff of California, ranking member of the House Intelligence Committee, asked in a tweet, “Why did you fail to act until his lies were publicly exposed? And why did you pressure” then-FBI Director James Comey “to ‘let this go?’”
Trump hits back
Trump hit back in a later tweet last Saturday night in which he said: “So General Flynn lies to the FBI and his life is destroyed, while Crooked Hillary Clinton, on that now famous FBI holiday ‘interrogation’ with no swearing in and no recording, lies many times...and nothing happens to her? Rigged system, or just a double standard?” Flynn is now cooperating with Mueller, and as part of his plea deal, he provided information related to Trump’s son-in-law and senior adviser Jared Kushner, according to two people familiar with the matter—a sign that Mueller’s probe is closing in on the president’s inner circle. Legal experts said Mueller may seek to use Flynn’s testimony to build a broader case of conspiracy or obstruction of justice. Earlier last Saturday, Trump said he wasn’t worried about what Flynn may tell investigators probing possible collusion between Russia and
members of the Trump team during the 2016 presidential campaign. “There has been absolutely no collusion. So we’re very happy,” Trump told reporters as he prepared to board Marine One at the White House.
Contacts with Russians
Senior White House officials have privately backed Trump’s remarks, saying they believe Flynn didn’t violate law in his contacts with Russians, but did when he lied to the FBI, one senior administration official said. The person, who spoke on condition of anonymity, believed that Flynn didn’t know that the contacts were lawful and, therefore, felt the need to lie about them. Flynn told Mueller that he communicated with Russia’s ambassador to the US during the presidential transition in December 2016 about American foreign policy with the knowledge and direction of senior Trump associates, according to a court document. The contacts with Russia could violate the Logan Act of 1799, which prohibits United States citizens from interfering with relations between the United States and foreign governments, said Sen. Dianne Feinstein of California, the top Democrat on the Senate Judiciary Committee. It’s unlikely Mueller would bring criminal charges solely based on the Logan Act, which doesn’t appear to ever have been used as grounds for prosecution, according to 2015 report by the Congressional Research Service. One US official, who asked to remain anonymous, said a Logan Act case would be a victory for Trump and laughable as the grounds for impeachment moves by Congress. Another White House official said the Logan Act wouldn’t apply during the period between Trump’s election in November and his January inauguration. The administration instead believes that the transition team—which used a government e-mail system and worked out of federal facilities—would be covered by transition guidelines that authorized them to talk with foreign governments. Still, if Mueller identifies violations of the Logan Act, they could be a building block in making a broader case against Trump or his
Former Trump national security adviser Michael Flynn (center) arrives at federal court in Washington last Friday. Flynn admitted to lying about his conversations with Russia’s ambassador to the United States during the transition period before Donald J. Trump’s inauguration. AP/Susan Walsh
associates, according to Patrick Cotter, who prosecuted mobsters as an assistant US attorney from 1986 to 1994. “Mueller’s not sitting there saying ‘I’m building the world’s greatest Logan Act case,”’ said Cotter, who now heads the white-collar criminal defense practice at Greensfelder, Hemker and Gale PC in Chicago. “The Logan Act is rare. Conspiracy—not so much.”
Sergey Kislyak
Under his deal with Mueller, Flynn pleaded guilty of one count of lying to federal agents and provided details about the controversial conversations he held with then-Russian ambassador Sergey Kislyak. In those discussions, Flynn urged Moscow not to react strongly to sanctions imposed by then-President Barack Obama and to help head off a United Nations resolution condemning Israel. Trump was president-elect at the time and Flynn was a private citizen, although the retired Army lieutenant general was expected to be named to the White House national security post. According to a court filing, Flynn said that a “very senior member” of the presidential transition team asked Flynn on December 22 to contact Russian officials to help delay or defeat the UN resolution on Israel. The very senior member was Kushner, according to the people familiar with the events.
Bannon, Priebus
Another person familiar with the push against the UN resolution said it was a collaborative effort that involved advisers Stephen Bannon and Reince Priebus, who went on to become Trump’s first White House chief of staff, as well as Kushner.
I had to fire General Flynn because he lied to the Vice President and the FBI. He has pled guilty to those lies. It is a shame because his actions during the transition were lawful. There was nothing to hide.”–Trump Ultimately, Obama decided not to exercise the usual US veto against such condemnations of Israel, and the resolution went through. Flynn also said he reported back on December 29 to a “senior official” in the transition team at Trump’s Mar-a-Lago resort in Florida on his conversations with Kislyak about the sanctions that Obama imposed on Russia because of its meddling in the presidential campaign, the document said. That official, according to the people familiar with the matter, is K.T. McFarland, who was brought into the transition team and later the White House by Flynn. The people asked not to be identified discussing internal matters. The transition official and Flynn “discussed that the members of the Presidential Transition Team at Mar-a-Lago did not want Russia to escalate the situation,” according to the court document. Shortly after, Russian President Vladimir Putin announced he wouldn’t take retaliatory measures against the Obama sanctions.
Conspiracy ‘hub’
White House lawyer Ty Cobb downplayed the significance of Flynn’s decision to cooperate with Mueller.
Cobb noted that Flynn was ousted from his post in Trump’s administration for misleading Vice President Mike Pence about the nature of his conversations with Kislyak. “Nothing about the guilty plea or the charge implicates anyone other than Mr. Flynn,” Cobb said in a statement. But now that Flynn has “flipped” from target to witness, to use a favorite term of prosecutors, Cotter said Mueller has a central figure who can provide insight into what was happening within Trump’s inner circle. “Flynn becomes, potentially, the hub of a wheel of conspiracy,” Cotter said. “It’s not at all surprising to people who do this kind of work that the actual charges as you are building your case don’t go to the heart of the criminal enterprise that you’re investigating,” Cotter added. “This is clear evidence that Mueller has now moved an entire level up the ladder of his investigation.” In a statement released last Friday, Flynn said his guilty plea and agreement to cooperate with the special counsel’s office “reflect a decision I made in the best interests of my family and of our country.” Bloomberg News
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CIA director warns Iranian general on Iraq
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ASHINGTON— CI A Director Mike Pompeo said last Saturday that he sent a letter to a top Iranian military official, warning him that the United States would hold Tehran accountable for any attacks it conducted on American interests in Iraq. Pomp e o, w ho h a s v oi c e d staunch opposition to Iran, said he sent the letter to Gen. Qassem Soleimani, a leader of Iran’s Islamic Revolutionary Guard Corps and elite Quds Force, but the general didn’t read it. “I sent a note. I sent it because he had indicated that forces under his control might in fact threaten US interests in Iraq,” Pompeo said at a defense forum at the Ronald Reagan Presidential Foundation and Institute in Simi Valley, California. “He refused to open the letter—didn’t break my heart to be honest with you.” “What we were communicating to him in that letter was that we will hold he and Iran accountable...and we wanted to make sure that he and the leadership of Iran understood that in a way that was crystal clear.” Pompeo said Iran is working to strengthen its influence throughout the Middle East. As a Republican congressman from Kansas, Pompeo was highly critical of the Iran nuclear deal, which the US and other nations negotiated with Tehran to lift sanctions in exchange for reductions in its nuclear program. Pompeo said Iran is currently in compliance with that agreement. In Iran, Mohammad Mohammadi Golpaygani, the chief of staff for the country’s supreme leader, said Soleimani ignored the letter. “Recently, when...the CIA chief through one of his contacts in the region sent a letter to General Soleimani, he responded by saying, ‘I did not either receive or read the letter. I have nothing to tell these people’,” Golpaygani said. In a wide-ranging panel discussion, Pompeo would not answer questions about speculation that he could replace Rex Tillerson as secretary of state. Pompeo, an outspoken conservative, has a close relationship with President Donald J. Trump and personally delivers an intelligence briefing to the president nearly every day. Pompeo declined to say whether he has had conversations with Trump about the possibility of replacing Tillerson, saying only that he was very focused on his job as CIA director. On North Korea, Pompeo said US intelligence on the progress of Pyongyang’s nuclear-missile program is good. “I think we have a pretty good understanding of the scope and scale of their program and how far they are making progress toward being able to reliably deliver that system against the United States,” Pompeo said. AP
Brexit brings UK lawyers to Ireland to retain EU practices L
awyers are having their own Brexit. More than a thousand United Kingdom lawyers have registered in Ireland since 2016 to make sure they can represent clients in European Union courts after the UK leaves the bloc. Figures from the Law Society of Ireland show 511 lawyer from England and Wales have registered in Ireland this year, on top of 806 who did so in 2016—a total of 1,317. Usually, only about 50 to 100 a year make the move, according to Ken Murphy, director general of the Law Society of Ireland. Few attorneys are actually moving to Ireland, he said. The lawyers, mostly antitrust
and trade specialists, also fear they’ll lose a right that blocks authorities investigating a company from seizing the legal advice provided by its attorneys. Loss of the privilege, which is grounded in EU membership, could put UK lawyers “at some disadvantage” against those retaining the right, Murphy said. London’s status as a global hub for advice on European Union competition law and regulation may fade if attorneys lose access to the European Court of Justice. Mickael Laurans, who manages the Law Society of England and Wales’s international team, warned that more firms might move
staff to Brussels, Paris and other regional hubs. Ministers at the UK’s Department for Exiting the European Union believe “people holding qualifications or in the process of acquiring them should be allowed to continue or begin their careers as they do now” throughout the region, Brexit Secretary David Davis said last month. Lawyers aren’t willing to take a risk, and Laurans said London’s loss of prestige might present an opportunity to other European cities. “It may be that English firms will need to look at where they position people,” he added. “A lot of EU law advice is done out of London today.
One question is, to what extent will this continue in the future?” Eversheds Sutherland Llp. had the largest number of lawyers registering in Ireland in 2017, at 132, according to the Law Society of Ireland. Freshfields Bruckhaus Deringer Llp. was second with 130 and Slaughter and May was third with 79. Spokesmen for Freshfields and Slaughter and May declined to comment, and a spokesman for Eversheds said no one was available. It is just one of the ways in which law firms in the UK are feeling the effects of the country’s 2016 vote to leave the European Union.
London’s biggest firms benefited from the weaker pound in the wake of the referendum, as they sought out growth overseas. The weaker currency also helped push up salaries for some of the city’s top young lawyers. Meanwhile the UK government is trying to keep London at the center of European commercial legal disputes after Brexit. Registering in Ireland takes a month or two and requires some paperwork and an administrative fee of about €300 ($357). The UK’s departure may complicate things, Murphy said. Laurans said it’s possible that future generations will have to take an
exam to register in Ireland, which would be “onerous.” The right to speak in an EU court, known as “rights of audience,” is restricted to lawyers who are qualified and regulated in a member-state, “so on the face of it that would exclude UK lawyers post-Brexit,” Murphy said. Murphy added attorneys saw their clients’ right to take advice without having it shared with investigation authorities as sacred. Some lawyers have tried to bolster their ability to work in the EU by seeking nationality of a member-state, Murphy said. He added he knew of lawyers that had become Irish and Belgian citizens. Bloomberg News
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Remembering 1963 eruption, Bali’s elderly wary of another
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LUNGKUNG, Indonesia— Bali’s glowering Mount Agung has seemingly quieted since hurling huge columns of ash from its crater a week ago, but some villagers on the Indonesian island who survived the catastrophic 1963 explosions believe a bigger eruption is coming. Ash plumes have dissipated in the past few days though an online seismogram from the mountain’s monitoring post resembles a crazed abstract painting, indicating the tremendous forces churning within. Explosions from the smoking crater and tremors still rattle the surrounding region, and authorities have maintained Agung’s alert at the highest level. Its 1963 eruptions killed about 1,100 people. “The situation now is almost the same,” said Nengah Tresni, who was 12 when Agung erupted in 1963. She recalls being at one of the Hindu temples that dot the volcano’s slopes and the sky suddenly turning dark as she left with her family. “I’m sure there will be a big eruption. It is just a matter of time,” said Tresni, who came with family members on Tuesday to an ageing sports center that’s serving as an evacuation camp after officials told them to leave their village. “In the old eruption, many people did not expect it to be big because there were small eruptions for a long time, and villagers just went to the temple to pray,” she said. It’s the second time Tresni has fled to the camp since September, when the 10,300-foot volcano burst into life after more than half a century of inactivity. Officials lowered the volcano’s alert level at the end of October and most of the 140,000 people who had evacuated returned home. It proved to be a brief respite. “I actually didn’t want to go back because I thought there would be big eruptions, but my family wanted to go home,” she said. “And now, we’re refugees here again.” Nyoman Siki from a village high on the volcano’s slopes was six or seven years old in 1963 and remembers it being said that 200 people from his area were killed. But he was philosophical about the situation. When people returned a year after the eruption, he said they were happy because it had renewed the fertility of the land. “After years of cultivation, the volcano is just about to erupt again,” he said. More than 55,000 people are living in shelters, such as sports halls, temples and tent camps since officials expanded the no-go area around the volcano on Monday. Many centers appear well organized, but one visited by Associated Press reporters in Rendang district last Saturday was tightly packed and muddy from the frequent rains. Tourists who were stranded when the idyllic island’s airport closed for nearly three days have rushed to leave. Nyoman Merta said that, after the 1963 eruption, he and his family walked for three days from their village before authorities picked them up and took them to an evacuation camp. “I was 9 years old, but I can remember many people still stayed. There were no warnings like now, and maybe that was why many people were killed then,” he said. The family stayed in Denpasar in the south of Bali for a year. When they returned home, he said, their house was uninhabitable because of damage caused by the eruptions. He compared the recent months of escalating danger signs from Agung with 1963. Scientists agree the danger remains though making an exact prediction is difficult if not impossible. “At all volcanoes, we can expect fluctuations in activity. This does not mean that the threat is over,” said Heather Handley, a volcanologist at Sydney’s Macquarie University. “It is clearly still in an active phase.” AP
Monday, December 4, 2017 A11
Myanmar’s Suu Kyi meets China’s Xi as Rohingya censure intensifies
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EIJING—Myanmar’s civilian leader Aung San Suu Kyi, facing growing international criticism over her country’s persecution of Rohingya Muslims, said last Friday that her government has made progress in creating a peaceful society but acknowledged that “much still remains to be done.” In remarks on a visit to Beijing, Suu Kyi did not directly address the crisis that has seen more than 620,000 Rohingya flee the country over the last few months in what the United Nations and the United States say is a campaign of ethnic cleansing by Myanmar. Suu Kyi, who spent 15 years under house arrest during the nation’s military rule, has come under widespread criticism for not speaking out against the violence. But she was warmly welcomed in China, Myanmar’s friendly northern neighbor, including when she met with Chinese President Xi Jinping last Friday. Suu Kyi spoke at a gathering of political parties hosted by China’s ruling Communist Party and said her National League for Democracyled government “has made progress in its endeavors to create a peaceful, stable and harmonious society.” “But much still remains to be done,” she added. China has avoided criticizing the crisis, and state media did not say whether the issue was discussed during her meeting with Xi. The two leaders hailed the potential for future cooperation through a “ChinaMyanmar economic corridor,” state
broadcaster CCTV reported. Suu Kyi’s visit comes just a week after Min Aung Hlaing, the commander of Myanmar’s military, held his own talks with Xi in Beijing. Myanmar’s army remains politically powerful, and the civilian government has no control over certain areas, such as defense and national security. Analysts said Beijing has likely won greater leverage over Myanmar by helping shield it from criticism over the Rohingya crisis. “Myanmar has leaned toward China because of international criticism and condemnation on Myanmar over the crisis,” said prominent Myanmar political analyst Yan Myo Thein. Beijing immediately saw that the crisis provided an opportunity for China to restructure a relationship that stalled after Myanmar began opening to the West earlier this decade, said David Mathieson, a former human-rights researcher who is now an independent analyst based in Myanmar. The international outrage and a UN human-rights investigation into Myanmar’s armed conflicts has “given Beijing the opportunity to redefine and rejuvenate its support for the Myanmar state—but at a hefty price,” Mathieson said.
Myanmar’s civilian leader Aung San Suu Kyi arrives to give a speech at the Great Hall of the People in Beijing, on December 1. AP
China was a longstanding friend of Myanmar during the Southeast Asian country’s isolation from the West, and its present interests in the country include security along China’s southern border, access to Myanmar’s natural resources and the construction of dams, pipelines and other projects. Among the biggest, a recently opened pipeline running through Myanmar carries oil from the Middle East and the Caucuses to China’s landlocked Yunnan province, allowing it to bypass the Malacca Strait. The pipeline starts at the Bay of Bengal in Rakhine state in western Myanmar, the epicenter of the antiRohingya violence. Chinese projects have been
blamed for uprooting villagers and harming the environment, factors that led Myanmar in 2011 to suspend the $3.6-billion Myitsone dam primarily funded by Chinese energy interests. The suspension remains a sore point, and China is eager to see resumption of work on the project, which had hardly broken ground when it was stopped. Although Suu Kyi’s delegation includes the country’s minister of electricity and energy, real progress on the dam issue is unlikely, said Yan Myo Thein, the analyst. “There is only a small possibility that this particular dam project will be implemented under a Suu Kyi-led government because it’s a controversial national project,” he said.
Singtel-backed Thai firm AIS targets tripling fiber customers
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DVANCED Info Service Pcl. (AIS), the top wireless operator in Thailand, intends to triple subscribers for its fiber-based high-speed Internet service as it grapples with intense competition in the mobile sector. The Bangkok-based business is targeting 2 million fiber subscribers in three years, up from as many as 600,000 currently, AIS CEO Somchai Lertsutiwong said in an interview. The goal is to become the preferred platform for digital services in homes and offices, as well as on the road, he said. “AIS has to transform itself,” he said in his office in Bangkok on Wednesday. “By 2020 we’ll be the major player in fixed broadband.” China Mobile Ltd.-backed True Corp. has used aggressive handset subsidies to expand its share of the Thai wireless
market, overtaking Telenor ASA’s Total Access Communication Pcl. and hurting industry profitability. Operators also face a spectrum auction next year with minimum license prices of more than $1 billion, in a country at risk of a bandwidth shortage as data demand expands. While AIS has enough spectrum “for a while,” it will definitely bid in the auction and is interested in both the 850 MHz and 1,800 MHz bands, Somchai said. The firm’s other notable targets include boosting sales to companies to as much as 30 percent of total revenue from the current 9 percent. Service revenue growth in 2018 is likely to be a little above the pace of economic growth, Somchai said. That implies a range of 4 percent to 6 percent, if GDP increases 3 percent to 4 percent, he added.
Advanced Info Service’s revenues would be more diversified if it succeeds in scaling up the number of highspeed subscribers to its fiber network, said Jitra Amornthum, the head of research at Finansia Syrus Securities Pcl. in Bangkok. A duel for subscribers and spectrum costs have weighed on the three dominant companies in Thailand’s wireless sector. Operating margin for Advanced Info Service, 23-percent owned by Singapore Telecommunications Ltd., dropped to about 26 percent last year, the lowest since 2009, according to data compiled by Bloomberg. Total Access’s margin slumped to 4.7 percent in 2016, less than half the previous year. True reported an operating loss for 2016, the fourth annual deficit in five years. Bloomberg
Indonesia sees 3-way Freeport talks leading to Feb. deal
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NDONESIA expects to conclude a deal with Freeport-McMoRan Inc. by February that will see the United States miner shed its majority ownership of the giant Grasberg copper and gold mine. The basic structure of the deal may be in place by the end of the year and signed by February, State-Owned Enterprises Minister Rini Soemarno said in an interview in Jakarta on Tuesday. The government was happy with the progress of negotiations with Freeport and its partner Rio Tinto Group, she said. Riza Pratama, a spokesman for Freeport’s local unit, said the negotiations are “going well” and constructive. Eric Kinneberg, a spokesman for the Phoenix-based parent company, said it had nothing to add beyond Pratama’s comments. A Rio spokesman declined to comment. Freeport shares were down 1.1 percent at 2:35 p.m. in New York as copper declined for a third day. Even though Pratama’s language was favorable, “some investors get
nervous anytime there is talk of a deal,” said Jeremy Sussman, an analyst with Clarksons Platou Securities Inc. Soemarno’s comments signal an easing of tension between the two sides. In September, Freeport rebuffed government proposals on the valuation and method of divestment of the miner’s Indonesian unit within a framework agreement reached in August. Under the deal, state ownership will rise to 51 percent in exchange for a license that will allow Freeport to operate the project through 2041. “Sometimes when we go to a negotiation table, you know everybody’s a bit suspicious of what’s what,” Soemarno said. “But I think, after a few sessions, all of us realize and believe that we want to do a good thing, the best thing for everybody, a win-win for everybody. We are in a good position, and we are quite confident that we should be able to get it done by February. ” Under Freeport’s pact with Indonesia, Grasberg will see an investment of as much
as $20 billion through 2031 to further develop the mine, including the construction of a smelter. In January 2016 Freeport valued its Indonesian operations in a government filing, excluding an interest held by Rio, at $16 billion, according to Freeport CEO Richard Adkerson. Freeport has maintained that the divestment process was contingent on reaching an agreement on “fair value” for the stake. How that value would be determined, and other details—including timing—were left to be negotiated later. Freeport also needs to reach an agreement with Rio Tinto over its income stream asset that’s part of the joint venture agreement. The minister said she was happy with the progress of those two-way talks. “We’re discussing with Rio Tinto, we’re discussing with Freeport, and Freeport is also discussing with Rio Tinto,” Soemarno said. “So it becomes a three-way conversation, which I think has gone very well. We’re very happy.” Bloomberg
Instead, the two sides may discuss alternative projects such as a road serving the Kuming-MandalayYangon-Kyaukphyu economic platform, he said. Xi and Cambodian Prime Minister Hun Sen were also among those who addressed the gathering at the Great Hall of the People, the hulking seat of China’s legislature in the heart of Beijing. Other participants included US Republican National Committee Treasurer Tony Parker. The gathering of delegates representing more than 200 political parties from around the world was hosted by China’s ruling Communist Party, which last month reappointed Xi to a second five-year term as its leader. AP
Former Asean Sec-Gen Surin dead at age 68
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ANGKOK— Former Association of Southeast Asian Nations Secretar y -General Surin Pitsuwan has died in Thailand. He was 68. Thailand’s Democrat Party said Surin died last Thursday in Bangkok of a sudden heart attack. Surin is former Secretary-General of the Association of l a w m a k e r f r o m Southeast Asian Nations Surin Pitsuwan AP the party who also served as Thailand’s foreign minister in the late-1990s under a Democrat-led government. He is best known for his time at the head of the 10-member Asean from 2008 until 2012. His name was also mentioned as a possible candidate for United Nations secretary-general. Surin remained active in regional diplomatic circles until his death. Thailand’s Ministry of Foreign Affairs said Surin “contributed greatly to the advancement and interest of Asean, as well as the promotion of Asean on the international stage. His outstanding personality, knowledge and wisdom were truly recognized by global leaders.” Surin appeared to be in good health before he died. Posts on his official Facebook page show him visiting a Bangkok coworking space on Wednesday. Two weeks ago, Surin spoke at a conference marking the 50th anniversary of the Asean. His remarks, punctuated with emphasis in his trademark deep voice, lauded cooperative organizations like the Asean as a means of “creating a space for the region to talk to itself.” He asked, “How can we unleash the energy, the creativity, the power of 640 million people onto the platform of the Asean?” He also suggested that a new era—possibly one of less cooperation—may be emerging. “It has been an age of multilateralism, talking to each other in a big group,” Surin said. But, he lamented, “the era of multilateralism is disappearing.” “Be ourselves,” he said of Asean nations. “Be self-sufficient. Be helpful to each other before we wait for contributions from the outside.” AP
Green Monday BusinessMirror
A12 Monday, December 4, 2017
www.businessmirror.com.ph • Editor: Lyn Resurreccion
Investments in low-carbon bldgs in PHL could reach $2B in 2020 B
Combating climate change? Fight land degradation–UNCCD chief
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By Rizal Raoul Reyes
@brownindio
he International Finance Corp. (IFC) of the World Bank group on Monday said investment opportunities in low-carbon buildings in the country could reach $2 billion in 2020.
In his opening message at the Green Brea kt hroughs for um, IFC Countr y Manager Yuan Xu said the Philippines is in dire need of sustainable business solution to tackle the challenges of the countr y’s growing infrastructure requirements and climate-change issues amid its rapidly growing population and rapid urbanization. “The way to deliver on this is to create a vibrant market for green buildings that attract private-sector investment,” he said during the Green Breakthroughs forum held in Makati City. “Green buildings should be the new normal for property companies, developers and investors,” he added. Xu said the potential is bright as green buildings can be strong entities in getting a market share of 20 percent to 25 percent by 2025.
To ensure a strong market performance, organizations, such as the Philippine Green Building Initiative (PGBI), should be complemented by several measures, such as policy support, tax benefits, educational and awareness programs and realized savings from energy efficiency. In 2010 the IFC noted that buildings accounted for 36 percent of the Philippines’s total annual power consumption and emitted 33.28 million metric tons of carbon dioxide. Seven years later the IFC said rapid urban migration is expected to increase the number of buildings by 20 percent on annual basis. With this scenario, the IFC said countries, like the Philippines, should be serious in developing green buildings, which integrate sustainable measures
The panel discussion on green financing at the Green Breakthroughs forum is participated in by moderator Norman Tilos (from left) of the Association of Development Financing Institutions in Asia and the Pacific; Jo Anne Eala, head of Bank of the Philippine Islands’ sustainable energy program; George Siton of the Organization of Socialized Housing Developers’ Association; Anita Salayon, senior assistant vice president of Development Bank of the Philippines; and Joseph Roderick Lledo, vice president of BDO Unibank. Alyssa Salen
in design and construction, promoting efficient use of energy, water and other resources with low carbon footprint. In the panel discussion on green financing, Jo Anne Eala, head of Bank of the Philippine Islands’ (BPI) sustainable energy program, said that government support is important to ensure the success of the program. “Government has to be there to make the program moving,” she said. She added that the private sector can only do as much as it could
because of certain limitations. Ea la said BPI is for tunate bec au se t he su st a i n able de velopment agenda is cascaded from the top to the ground level w ith no less than its Chair man Jaime Aug usto Zobel de Aya la II spearheading the advocac y. “ We’re for t u nate t hat ou r chairman is very supportive of the green agenda. On the other hand, we have to bring awareness to our smaller brothers and sisters in the industry. It is not easy and cheap for the other private banks,” she explained.
Living off a glacier, while it lasts V
IRU, Peru—The desert blooms now. Blueberries grow to the size of PingPong balls in nothing but sand. Asparagus fields cross dunes, disappearing over the horizon. The desert produce is packed and shipped to places like Denmark and Delaware. Electricity and water have come to villages that, long had neither. Farmers have moved here from the mountains, seeking new futures on all the irrigated land. It might sound like a perfect development plan, except for one catch: The reason so much water flows through this desert is that an ice cap high up in the mountains is melting away. And the bonanza may not last much longer. “If the water disappears, we’d have to go back to how it was before,” said Miguel Beltrán, a 62-year-old farmer who worries what will happen when water levels fall. “The land was empty, and people went hungry.” In this part of Peru climate change has been a blessing—but it may become a curse. In recent decades accelerating glacial melt in the Andes has enabled a gold rush downstream, contributing to the irrigation and cultivation of more than 100,000 acres since the 1980s. Yet the boon is temporary. The flow of water is already declining as the glacier vanishes, and scientists estimate that by 2050 much of the ice cap will be gone. Throughout the 20th century, enormous government development projects, from Australia to Africa, have diverted water to arid land. Much of Southern California was dry scrubland until canals brought water, inciting a storm of land speculation and growth—a time known as the “Water Wars” depicted in the 1974 film Chinatown. Yet, climate change now threatens some of these ambitious undertakings, reducing lakes, diminishing aquifers and shrinking glaciers that feed crops. Here in Peru the government irrigated the desert and turned it into farmland through an $825-million project that, in a few decades, could be under serious threat. “We’re talking about the disappearance of frozen water towers that have supported vast populations,” said Jeffrey Bury, a professor at the University of California at Santa Cruz who has spent years studying the effects of glacier melt on Peruvian agriculture. “That is the big-picture question related to climate change right now.”
A Quechua family harvests flowers at the foot of Huascaran, Peru, in the Cordillera Blanca region on August 29. Accelerating glacial melt in the Andes caused by climate change has set off a gold rush downstream, but as the ice vanishes, the vast farms below may do the same. Tomas Munita/The New York Times
A changing climate has long haunted Peru. One past civilization, the Moche people, built cities in the same deserts, only to collapse more than a millennium ago after the Pacific Ocean warmed, killing fish and causing flash floods, many archaeologists contend. Now dwindling water is the threat. While more than half of Peru sits in the wet Amazon basin, few of its people ever settled there. Most inhabit the dry northern coast, cut off from most rain by the Andes range. While the region includes the capital, Lima, and 60 percent of Peruvians, it holds only 2 percent of the country’s water supply. The glaciers are the source of water for much of the coast during Peru’s dry season, which extends from May to September. But the ice cap of the Cordillera Blanca, long a supply of water for the Chavimochic irrigation project, has shrunk by 40 percent since 1970 and is retreating at an ever-faster rate. It is currently receding by about 30 feet a year, scientists say. Farmers along the 100-mile watershed that winds its way from the snowcapped peaks to the desert dunes say they are already feeling the effects of the change. The retreat of the ice cap has exposed tracts of heavy metals, like lead and cadmium, that were locked under the glaciers for thousands of years, scientists say. They are now leaking into the groundwater supply, turning entire streams red, killing livestock and crops and making the water undrinkable. Temperatures in this area have risen
sharply, leading to strange changes in crop cycles, farmers say. Over the past decade, corn—which since precolonial times was grown only once a year in the mountains—can now be harvested in two cycles, sometimes three. That would be a windfall, said farmers like Francisco Castillo, if it were not for all the pests that now thrive in the warmer air. For Castillo, who plants corn and rice near the Santa River in Chimbote, it was a worm that became the scourge for him and neighboring farmers. It suddenly started devouring their crops in the early-2000s. Then, last year came the rats. “This wasn’t a place you had rats before,” Castillo said. For Justiniano Daga, a 72-year-old farmer, the breaking point for his cotton crops came when red ants ate away the buds. This year he has decided to plant sugar cane instead and move some of his production to higher altitudes where it is colder. “But the pests will arrive there, too,” as temperatures keep rising, Daga said. The Chavimochic project, which lies just north of where the Santa River meets the Pacific Ocean, is a crown jewel of Peruvian agriculture and civil engineering. The government aimed to create industrial-scale agriculture in Peru’s northern deserts through a sprawling system of locks and canals. The idea’s supporters promised profits through exports to markets in North America, Asia and Europe, where the fruit seasons were reversed.
The first phase of the project started in 1985 with a 50-mile canal that irrigated a valley and brought a large hydroelectric plant, providing electricity to residents. In the early-1990s Peru began a second phase, which irrigated two more valleys and created a water-treatment plant that served 70 percent of the surrounding population. All told, more than 100,000 acres of desert were brought into cultivation. “Years ago, if I gave you a plot of land here, you’d have said, ‘What do I do with this?’” said Osvaldo Talavera, a spokesman for the water district. “Now you’d say, ‘Do you have another plot for me?’” Among the investors was Rafael Quevedo, a wealthy Peruvian landowner who began snapping up arid tracts after studying desert hydroponic techniques in Israel. His proposition was simple: With enough water and fertilizer, asparagus could be grown directly in the sand—and at yields per acre far higher than in the United States because Peru has no cold season and more days of sun. “We’ve started a new chapter in the history of cultivation,” said Quevedo, who runs a farming company called Talsa. Blueberries on a sandy hillside here grow to be five times as big as a normal-size blueberry before being sent to China, where they are prized for their size. A form of white asparagus, favored by Europeans, is grown by burying the stalks in sand. A reservoir was created out of a dune. More than 8,000 tons of produce grows here every year. Yet, at the headwaters of the Santa River, in the mountain city of Huaraz, César Portocarrero, a Peruvian climatologist, sees problems afoot for those downstream. The temperature at the site of the glaciers rose 0.5 to 0.8 degrees Celsius from the 1970s to the early-2000s, causing the glaciers of the Cordillera Blanca to double the pace of their retreat in that period, Portocarrero said. Several times a year, he and other scientists would make brutal hikes into the glacial valleys, where they found entire sections of the ice cap gone. One part of an exposed glacier revealed fossils of dinosaur footprints. A 2012 study by scientists from the US and Canada showed that water flow in the Santa River was falling, and that at current rates, the river could lose 30 percent of its water during Peru’s dry season. “Each year, there is less water; each day, there is less water,” Portocarrero said. New York Times News Service
ONN, Ger many—Land restoration is not a “glamorous subject even when you give all the numbers,” adm it ted Mon ique Ba rbut, t he executive secretar y of United Nations Convention to Combat Desertification (UNCCD). But she also said that by 2050, the world population would reach 10 billion. To feed the extra 2.4 billion, current food production would need to be increased by 75 percent. “To do that, we will have to add, from now to 2050, 4 million acres of new land every year. So unless urgent action is taken to restore degraded land, the world is looking at an acute food-insecure future,” she told Inter Press Service in an interview on the sidelines of the recently concluded 23rd UN Climate Conference of Parties in Bonn, Germany.
Land vs energy: A popularity game?
At the conference where ideas, actions, innovations and resources were brought in the open to design a road map to tackle climate change, the discussions were dominated by ending coal, producing renewable energy and making green technologies more accessible. Land was an issue largely ignored, except by some indigenous peoples’ groups, who stressed the need to maintain soil fertility. But Barbut asserts that land is indeed integral to climate actions and policies taken both at the UN and at the national level. “In the INDCs [Intended Nationally Determined Contributions, or what countries will do to cut carbon emissions] they have submitted, more than 140 countries have said that land was part of their solution or their problem in terms of climate change,” she pointed out. One of the countries is India, where an estimated 30 percent of total land is already degraded. According to a 2016 report by the Indian Space Research Organization, titled “World Day to Combat Desertification,” the degrading area has increased over 0.5 percent to 29.3 million hectares in the past decade. Desertification also increased by 1.16 million hectares (m ha) and stood at 82.64 million hectares during 2011-2013, the report said. As a signatory to the UNCCD, India has committed to combat desertification and land degradation and become land degradation neutral by 2030. In simple terms, this means having a balanced proportion of land loss and land gain. However, though an ambitious goal, this is seldom talked about by the officials. In sharp contrast, India’s other environmental actions, especially the Solar Mission which aims to produce 175 gigawatts of renewable energy by 2022, is widely lauded. Anand Kumar, the secretary of India’s Ministry for New and Renewable Energy, is quick to point out that the International Solar Alliance—a group of 44 countries committed to produce 1,000 gigawatts of solar energy— has promised investments of $1 trillion by 2030. No land restoration initiatives are likely to garner that kind of private investment, Barbut admitted, as the job is more labor intensive. “Even the most degraded land can be restored with a small investment of $300 per hectare. So, what is needed is not a large sum of money, but lots of manual labor. So, perhaps, there is not a lot of scope for huge investment and large profits,” she said. However, at the same time, she shared some good news: The UNCCD, in collaboration with Mirova, the governments of France, Luxembourg, Norway and the Rockefeller Foundation, has launched a special fund for restoring degraded land and fighting desertification.
Named the Land Degradation Neutrality Fund, this new finance vehicle was launched on September 12 this year, during the 13th Conference of the Parties of UNCCD in Ordos, China. “We have launched the biggest land impact fund. It is managed by Matistix. It is a public-private fund. By the beginning of next year, we hope to have about $300 million of capitalization of the fund,” Barbut added.
Land and women’s rights
The connection between the environment and women’s rights is an integral one, Barbut said. “Whether it’s drought, land degradation or desertification, women suffer more than others. In fact, they not only suffer from the consequences of drought or desertification, but also from the fact that in most cases, women do not have rights to land,” she said before sharing some experiences from Africa where plots of degraded land were restored, but because women did not have rights to the land, they could not stake their claim. One such example is in the Mboula region of Senegal, where the regional government allocated tracts of land to women’s groups for collective farming. The initiative has been a big success as the women’s collective managed to grow more food than expected. As a result, the women now have received training to venture into growing crops for market, besides their own consumption. Similarly, in Eastern Uganda, the government started a new initiative with women who had no ownership over their land. They have been trained in marketing and managing a collective that cultivates arable land that was once degraded, but is now restored. Besides supporting these local initiatives at the country level, UNCCD is also mainstreaming gender equality in its own policies and actions. “We now have a Gender Policy Framework and it’s the most advanced framework in all the UN Conventions and which we will apply in particular, to all the transformative projects,” Barbut explained.
Land and climate change
According to Barbut, climate change’s effects on land are becoming more and more of a global problem, with major social and political consequences. She mentioned the recent droughts witnessed by France, Canada and successive droughts in the US, and also pointed out the recent exodus of people from drought and desertification in the global south. “If you see all the migrants coming to Europe, 100 percent of them— not 90 percent but 100 percent—are coming from drylands. There are also migration and radicalism linked to land degradation and desertification. For example, in the drylands of Africa, where desertification is happening, we are seeing food riots and then, we are seeing Al Qaeda,” she said, pointing to a study published by UNCCD that explores these links. Citing another study by the British government’s Defense Ministry, Barbut added that “By 2045, there will be 130 million people who will migrate because of desertification, and out of them, 60 million will come from south of the Sahel and Africa.” But all is not hopeless. Barbut shared her vision of a food-secure future and a clear way to achieve that goal: “By 2050, we will need millions of hectares of new lands to grow 75 percent extra food. Today we are taking new land from forests and wetlands. At the same time, on this planet, you have 2 billion hectares of degraded land. Among this, 500 million are abandoned agricultural land. If we restored 300 million of these 2 billion hectares of land, we can ensure food security for all by 2050.” IPS
Biodiversity Monday BusinessMirror
Asean Champions of Biodiversity Media Category 2014
Monday, December 4, 2017 A13
Editor: Lyn Resurreccion • www.businessmirror.com.ph
A second look at ‘closed fishing season’
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By Jonathan L. Mayuga @jonlmayuga
not addressing the problem of over fishing, citing “rea lities” that consider the biogeographic character istics of sardines, genera l f isher ies assessment and the socioeconomic lens.
arious stakeholders in the Visayas closed ranks on November 15 to enforce the “closed fishing season” for herring, mackerel and sardines in the Visayan Sea by virtue of Fisheries Administrative Order (FAO) 167-3.
Law of supply and demand
“After the closed fishing season there are lots of fish to catch. Howe ver, t h i s on ly benef it s commercial fishing,” explained partly in Filipino, adding that big fishers resort to canning because of oversupply of fish. She said as the law of supply and demand dictates, the oversupply of fish brings down the price in the local market, which is “bad news” for artisanal or municipal fishers. She cited that the closed fishing season in the Sulu Sea has caused economic disruption, adversely affecting the livelihood of fishers and producers of tuyo (dried fish) and tinapa (smoked fish). “There should be a comprehensive framework on how to manage sardines. Closed fishing season alone is not effective. What we need are measures that will address overfishing after the closed fishing season,” she said.
Naturally productive
Sardines at a fish landing (fish port) in Estancia, Iloilo Oceana Philippines
“Large-scale commercial fishing fleets must be strictly prevented from conducting fishing expeditions within the municipal fishing zone to save marine resources from further exploitation and degradation,” Hicap said.
Fisheries management framework
A fish porter shows a flying fish at the General Santos City Fish Port. Jonathan L. Mayuga
The three-month closed fishing season ever y year—from November 15 to February 15— prohibits commercial fishing of the three important fish species in the Visayan Sea. During the closed fishing, the fishes are allowed to spawn. FAO 167-3, or the Establishing a Closed Season for the Conservation of Sardines, Herrings and Mackerels in the Visayan Sea, specifically prohibits the catching, killing, selling or possessing the sexually mature, young, fry or larvae of the three species, which are the most common and abundant group of fish caught in the territory. FAO 167-3 aims to protect and conser ve herrings, mackerels and sardines during the period to allow the fish stock to recover from overfishing. Similar closed fishing seasons are being implemented in other areas.
Major fishing ground
The Visayan Sea is a major fishing ground and is known to provide abundant fish during the fishing season. In a 2004 report, titled “The Fisher ies of Centra l Visayas, Philippines: Status and Trends,” expert Corazon M. Corrales, the then-regional director of the Bureau of Fisheries and Aquatic Resources (BFAR)-Central Visayas, said: “[The region] is strongly dependent on its marine capture fisheries to supply the main source
of animal protein in the region, as well as to provide livelihood to over 150,000 fishers in commercial and municipal fishing sectors.” Central Visayas has a number of fishing grounds, foremost of which is the Visayan Sea, where mackerel, herring and sardines thrive. Its ecosystem has a total of 242.1 kilometers (km) coastline. The provinces of Cebu, Negros Occidental, Iloilo, Masbate and a portion of Leyte share the ecosystem of the Visayan Sea. The fisheries resources of the Visayan Sea are mostly pelagic, which feed on sea floors, such as Indian mackerels and sardines. In 1995 it was the top 3 contributor to fish and other marine fisheries products in the country, with landings of approximately 208,883 tons, making up 12.4 percent of total fisheries landings. It is the country’s top producer in the commercial fishing sector and ranked third in the municipal fisheries sector. L ately, however, l i ke ot her f ish i ng g rou nd s t roubled by e nv i ron me nt a l de g r ad at ion , e xcessive commerc i a l f ish ing a nd dest r uct ive f ish ing , t he f i s h c at c h cont i nue s to d e c l ine, in bot h t he commerc i a l and municipa l f ishing sectors.
of lack of comprehensive study on its environmental, social and economic impacts. At best, declaring closed fishing season is a temporary solution that will, in the long run, fail to ensure sustainable capture fisheries, experts say. While certain areas are declared “off limits,” commercial fishing in other areas continues. Since herring, mackerel and sardines, like other fish species, are highly mobile and migrate to other areas in search of rich feeding grounds, they eventually end up being caught elsewhere where commercial fishing is allowed. Although not the intended target of the ban as closed fishing season expressly prohibits large-scale commercial fishing in a particular area during a certain period, artisanal or small-scale fisheries often suffer as a consequence of closed fishing seasons. Artisanal fishing, or subsistence fishing, involves various small-scale, low-technology, lowcapital fishing practices undertaken by fishing households.
Temporary solution
Unintended target
While the closed fishing season appears to succeed in its objective of repopulating fishing grounds, questions have been raised over its wisdom because
The Pambansang Lakas ng Kilusang Mamamalakaya (Pamalakaya), an umbrella organization of fishers, strongly opposed the declaration of closed fishing season.
“In reality, closed fishing seasons always target not only the commercial fishers but also the small-scale fishers. Fish caught in the seas are exploited and depleted because of irreverent entry of large-scale fishing vessels weighing 3 gross tons and above into the 15-km municipal fishing waters intended for municipal fishermen,” said Fernando Hicap, national coordinator of Pamalakaya. According to Hicap, months of preserving fish species, through the declaration of a closed fishing season, is futile because local government units allow commercial fishing back to business right after the lifting of the periodic fish ban. “It is like we breed fish so that commercial fishers have a bounty catch to indulge after. Declaring parts of the communal waters as closed season [to fishing] will do nothing to preserve a sea’s dwindling fish catch. Rather, it is detrimental to small fishers who will be deprived of the right to livelihood,” Hicap lamented. Pa m a l a k ay a s a id t he e x i st i ng f i sh i ng l aw, t he Fi sher ies Code of 1998, inst it ut iona l i zes com merc i a l i nc u rsion i nto t he mu n ic ipa l w aters des pite it s a m e n d m e nt s , w h i c h a r e supposed to deter dest r uc t ive com merc i a l f i sh i ng.
Oceana Philippines Vice President Gloria Estenzo Ramos, admitted at a news conference in Dumaguete City during the announcement of the closed fishing season in the Visayan Sea on November 15, that the measure is just one of many interventions needed to ensure sustainable capture fisheries. Oceana Philippines has joined other stakeholders in reaffirming its commitment to protect the Tañon Strait Protected Seascape (TSPS). The TSPS, the country’s largest marine protected area, is “off limits” to commercial fishing but is often raided by erring commercial fishers to catch fish. Oceana Philippines is among the stakeholders pushing to declare the Visayan Sea a Fisheries Management Area, to draw a comprehensive management plan that will protect and conserve Central Visayas’s important fishing ground from abuse. “There’s really a need to come up with a management plan for our f ishing g rounds because closed fishing season alone is not enough. We need other measures to enforce after the closed fishing season to prevent the race to fish that leads to overfishing,” she said.
Science takes a back seat
Jimely Flores, a marine biologist at Oceana Philippines, said fisheries management is the least of priority in the Philippines despite being an archipelagic country and one of the top 20 seafood producers in the world. In a telephone interview on November 20, Flores said the poorest of the poor belonged to the fisheries sector because its management is using the least science. A review conducted by experts from the University of Visayas, she said, revealed that closed fishing season in the Visayan Sea has no significant impact. Flores said Philippines t y l e c lo s e d f i s h i n g s e a s on i s
She added that fish like sardines are biologically productive—they grow fast, mature early, small in size and known to be serial spawner. “However, that high productivity is naturally controlled by their vulnerability to changes in environmental conditions and the abundance of their natural predators,” she said. “In the presence of anthropogenic factors, such as too many and very efficient fishing, increasing ocean temperatures, ocean acidification and marine pollution, that vulnerability is further magnified,” she added. According to Flores, while the closed fishing season is indeed one of the recipes from age-old fisheries management regulatory tools, it only becomes effective when implemented honestly and guided by correct science. Flores said that in the Philippines, the efficiency of such control or regulation in capture fisheries is compromised. “On a broad scale, during a closed fishing regime, landings are expected to decrease in the first few years due to the decrease in fishing effort. Of course, because some months are closed to fishing. And ideally, landings increase after maybe two years due to the abundance of fish in the waters, as a good result of the closed fishing.”
Race to fish
However, she said the experience in sardines in the Philippines is showing the opposite trend because immediately after the months of closed fishing, a race to fish occurs. This, she said, in essence, effectively removes a lot of fish out of the water. “The closed fishing months give a chance for the fish to spawn and grow, only to be caught afterward. The race to fish is true for all the months after the closed fishing,” she said. As a result, she added, very few fish remain to spawn on the next closed fishing season. Flores said the only way closed fishing would become effective is by putting a limit on fishing on the months it is allowed. In effect, she said closed fishing is not solving overfishing, particularly in sardines. “Worst, it is acting as a shroud of mist masking the continued overfishing. It is a sham!” she said. Flores added that the only way to ensure sustainable fisheries is to stop overfishing and enact genuine solutions that will regulate the commercial fishing industry.
A14 Monday, December 4, 2017 • Editor: Angel R. Calso
Opinion BusinessMirror
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editorial
From ‘killing dengue’ to endangering our children
F
rench pharmaceutical company Sanofi Pasteur is the largest company devoted entirely to vaccines, with 2016 sales of over $5 billion. With 13,000 employees, the company spends $1 million per day on its research and development programs.
This past week Sanofi announced that its highly promoted dengue vaccine —Dengvaxia—could lead to more serious infections if used in the wrong setting. Unfortunately, the “wrong setting” is what the company promoted the drug for in the first place. Sanofi now says: “If Dengvaxia is given to individuals who haven’t been exposed to dengue, they could get more serious infections when they encounter the virus naturally. For individuals who have not been previously infected by dengue virus, vaccination should not be recommended.” Ironically, almost exactly two years ago on December 12, 2015 we wrote about “killing dengue.” We provided the background of the new drug. “The search for a vaccine against dengue fever has been ongoing for 86 years. Mexico approved the drug [Dengvaxia] after trials on 40,000 people in 15 nations [including the Philippines]. These tests showed that vaccine reduced the risk of hospitalization by 80 percent and lowered the possibility of developing the severest, hemorrhagic form of the disease by 93 percent.” “Both the Department of Health [DOH] and the Philippines’s Food and Drug Administration are pushing to fast-track approval and include the drug in its vaccination program in 2016. A study done in 2012 estimated that the annual cost to the nation could run as high as P15 billion considering the cost of diagnosis, treatment and income loss for patients and caregivers.” Then-President Benigno S. Aquino III attended the launching of the drug by the DOH on April 5, 2016. Since then, over 700,000 Filipino children have been vaccinated and it is probable that they are now potentially exposed to a serious health risk, if they have not previously contracted dengue. The Aquino administration spent P3.5 billion on the program maybe with the best of intentions. Aquino critics are asking: “Was the Dengvaxia vaccination rushed in time for the 2016 presidential campaign to boost Mar Roxas’s candidacy?” And comments like, “A giant pharma company connives with a corrupt government to force a vaccine of dubious efficacy upon an unsuspecting populace.” This may be over-the-top political commentary, but there is no doubt that the previous administration was alone in its speed to use the vaccine. Malaysia waited until April 2017—one year later than the Philippine launch—to approve Dengvaxia for a two-year study involving only volunteers, not in the general population. Thailand was part of the initial testing program and in December 2016 began offering Dengvaxia but not forcing people to take it. Only in the Philippines was there a national immunization program. So significant was the program that when Sanofi reported poor sales of the dengue vaccine for the first quarter in May 2017, it specifically cited the Philippine government purchases of Dengvaxia, saying, “The Philippines continues its public vaccination program. The vaccine has notched more than a dozen approvals around the world but hasn’t been included in nationwide vaccination programs outside of the Philippines.” While the actual risk to the 700,000 children has not been qualified, there is no doubt that the previous administration rushed this vaccination program for whatever reason. Was this good intention gone wrong or something more sinister? Sen. Joseph Victor G. Ejercito, chairman of the Senate health committee, on Saturday said he would open an inquiry. Those involved in this vaccination decision must provide thorough explanations, he said. Ejercito better make sure that there’s no cover up. The parents of those vaccinated children are watching.
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N November 30, when the whole nation celebrated the 154th birth anniversary of the Supremo Andres Bonifacio, President Duterte encouraged all Filipinos to emulate the hero’s nationalism. It came largely unnoticed by many of those who read the president’s message, but it is something that may not be taken so lightly. A tall order, to say the least, because the Katipuneros of Bonifacio’s time, and especially the Supremo himself, pledged in blood their loyalty for country and for their compatriots. The Katipuneros believed that it is only when people have good intentions for each other will true well-being and freedom be attained. Emilio Jacinto, a general during the Philippine revolution and one of the country’s brave heroes, penned the Kartilya ng Katipunan, or the Katipunan’s Code of Ethics.
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The 14-point guideline served as the members’ touchstone when it came to behavior, character and intentions. Allow me to reprint here the Katipunan’s Code of Ethics, to inspire us to act, think and speak like the Supremo and his loyal Katipuneros. 1. Life which is not consecrated to a lofty and sacred cause is like a tree without shadow, if not a poisonous weed. 2. A good deed that springs from a desire for personal profit and not a desire to do good is not kindness.
O
N June 18, 1898, Emilio Aguinaldo issued a decree officially instituting a revolutionary government to fight for the independence of the Philippines. A national revolution took place whose goal was independence from 350 years of colonial control through armed revolt. The enemy—Spain. Under former President Corazon C. Aquino, a revolutionary government was established to restore the democracy our country lost during martial law. The enemy—former President Ferdinand E. Marcos. If President Duterte were to declare a revolutionary government, who would he be ousting? A foreign colonizer, a ruling dictator? No—he would be ousting himself. As this is obviously an absurd scenario, Duterte himself has backed out of his threats to declare a revolutionary government. The alleged destabilizers, coup plotters, allies of the opposition Liberal Party and other groups whose aim is to destabilize the government or oust the sitting President—are now being lumped together as “terrorists” and can, and will be, dealt with accordingly, with the full force of the law—the President said. Despite this, supporters of the
President continue to urge him to pursue a revolutionary government and news from the provinces confirm reports that there are moves to recruit core groups to push a revolutionary form of government. The challenges today remain the same as when people power installed Corazon Aquino as president. “Whereas, the direct mandate of the people as manifested by their extraordinary action demands the complete reorganization of the government, restoration of democracy, protection of basic rights, rebuilding of confidence in the entire government system, eradication of graft and corruption, restoration of peace and order, maintenance of the supremacy of civilian authority over the military and the transition to government under a New Constitution in the shortest time possible.” (Proclamation 3, S. 1986)
3. True greatness consists in being charitable, in loving one’s fel low men and in adjusting every movement, deed and word to true reason. 4. All men are equal, whether the color of their skin is black or white. One may be superior to another in knowledge, wealth and beauty, but no one may be superior in being. 5. He, who is noble prefers honor to personal gains; he, who is mean prefers personal profit to honor. 6. To a man with a sense of shame, his word is inviolate. 7. Don’t waste away time; lost riches may be recovered, but lost time can never be regained. 8. Defend the oppressed and fight the oppressor. 9. An intelligent man is he who is cautious in speech and knows how to keep the secrets that must be guarded. 10. In the challenging path of life, the man leads the way and his wife and children follow. If the leader goes the way of evil, so do the followers. 11. Think not of women as objects for whiling time away but as a helper and partner in the
hardships of life. Respect her in her weakness and remember the mother who brought you into this world and who cared for you in your childhood. 12. What you do not want done to your wife, daughter and sister, do not do to the wife, daughter and sister of another. 13. The nobility of a man does not consist in being a king, nor in the sharpness of his nose and the whiteness of his skin, nor is it in being the priest representing God, nor in the exalted position he has on this earth; but pure and truly noble is he who, though born in the woods, possesses an upright character, who is true to his word, who has dignity and honor, who does not oppress and does not help those who oppress, and he who knows how to look after and love the land of his birth. 14. When these doctrines spread and the Sun of beloved liberty shines with brilliant effulgence on these unhappy isles and sheds its soft rays upon the united people and brothers in everlasting happiness, the lives, labors and suffering of those who are gone shall be more than recompensed.
Most critics say that former President Cory Aquino reigned but did not rule. Old oligarchs were replaced by new oligarchs, old vested interests by new vested interests. The mandate given to then President Cory to install immediate and effective reforms was vast and sweeping. Articles II and III of Proclamations 3, S. 1986, referred to as the “Freedom Constitution” provided as follows: “Article II The President The Vice President and the Cabinet Section 1. Until a legislature is elected and convened under a New Constitution, the President shall continue to exercise legislative power. The President shall give priority to measures to achieve the mandate of the people to: a) Completely reorganize the government and eradicate unjust and oppressive structure, and all iniquitous vestiges of the previous regime; b) Make effective, the guarantees of civil, political, human, social, economic and cultural rights and freedoms of the Filipino people and provide remedies against violations thereof; c) Rehabilitate the economy and promote the nationalist aspirations of the people; d) Recover ill-gotten properties amassed by the leaders and supporters of the previous regime and protect the interest of the people through orders of sequestration or freezing of assets of accounts;
e) Eradicate graft and corruption in the government and punish those guilty thereof; and f) Restore peace and order, settle the problem of insurgency, and pursue national reconciliation based on justice. Section 2. The President shall be assisted by a Cabinet, which shall be composed of Ministers with or without portfolio who shall be appointed by the President. They shall be accountable to and hold office at the pleasure of the President. Section 3. The President shall have control of and exercise general supervision over all local governments. Section 4. In case of permanent vacancy arising from death, incapacity or resignation of the President, the Vice-President shall become President. In case of death, permanent incapacity, or resignation of the Vice-President, the Cabinet shall choose from among themselves the Minister with portfolio who shall act as President. Section 5. The Vice-President may be appointed Member of the Cabinet and may perform such other functions as may be assigned to him by the President. Section 6. The President, the Vice-President and the members of the Cabinet shall be subject to the disabilities provided for in Section 8, Article VII, and in Section 6 and 7 Article IX, respectively, of the 1973 Constitution, as amended. See “Kapunan,” A15
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Let your voice be heard
PPP conversations No. 11 with PNOC President Lista
BusinessMirror
By Alberto Agra
Joel L. Tan-Torres
PPP Lead
DEBIT CREDIT
T
here are several situations when we can voice out our comments or decisions on important matters. One way is when we vote for our leaders during elections. We can also provide feedback to issues by writing or e-mailing to the editors of the various media outlets, including newspapers and other publications. However, most of us have not been exposed to this system of responding to surveys to provide inputs to relevant concerns. This should not be the case since surveys are useful tools in the communication of ideas, especially for accountants. The International Federation of Accountants (Ifac) has regularly been conducting surveys to generate feedback from accountants all over the world. The Ifac has conducted and released the results of its 2016 Global Small Medium Practice (SMP) Survey and disclosed a good number of findings. The Professional Regulatory Board of Accountancy (BOA) launched formally its “Let your voice be heard” Survey project during the oath taking ceremony of the new Certified Public Accountant (CPAs) in the Philippine International Convention Center on November 27. This survey project consists of the BOA putting online surveys that are intended to provide feedback from the various stakeholders to the BOA on pertinent accountancy issues. Those responding to the surveys will be able to communicate to the BOA their perception and comments on relevant matters. Furthermore, the survey results can be the basis for the BOA to formulate appropriate measures affecting the profession. Those who are expected to respond to the surveys include CPA, graduates of accounting programs, accounting students and other stakeholders. Since the surveys are online, the accomplishment and tabulation thereof is facilitated. The CPA respondents to these surveys will be qualified to get Continuing Professional Development credits under the self-directed approach. BOA novelty items will also be given to the respondents via a “raffle” system. The BOA has been conducting several surveys already and has been using the feedback therefrom in the programs and decisions that it has been formulating. To date, several surveys have been released and/or are ongoing. These include the Sectoral surveys for CPAs in Academe, Public Practice and Commerce and Industry; Survey on Satisfaction services of Philippine Institute of Certified Public Accountants (Picpa); Survey on Access to Accountancy
Kapunan. . .
continued from A14
Article III Government reorganization Section 1. In the reorganization of the government, priority shall be given to measures to promote economy, efficiency and the eradication of graft and corruption. Section 2. All elective and appointive officials and employees under the 1973 Constitution shall continue in the office until, otherwise, provided by proclamation or executive order or upon the designation or appointment and qualification of their successors, if such is made within a period of one year from February 25, 1986. Section 3. Any public office or employees separated from the service as a result of the reorganization effected under this Proclamation shall, if entitled under the laws then in force, receive the retirement and other benefits accruing thereunder. Section 4. The records, equipment, buildings, facilities and other properties of all government offices shall be carefully preserved. In case any office or body is abolished or reorganized pursuant to this proclamation, its funds and properties shall be transferred to the office or body to which its powers, functions and responsibilities substantially pertain.”
web site and Facebook sites; New CPA Tracker Surveys; and various Mini Surveys. The surveys which are still open and the links thereto are indicated below as follows: n AE—https://www.surveymonkey.com/r/CPASurveyAE; n PP—https://www.surveymonkey.com/r/CPASurveyPP; n CI—https://www.surveymonkey.com/r/CPASurveyCI; n New CPA Tracker Survey— https://www.surveymonkey.com/r/ cpatrackerand https://www.surveymonkey.com/r/102017cpatrack; n Survey on Satisfaction on Picpa—https://www.surveymonkey. com/r/mspicpa; and n Survey on FB and web site— https://www.surveymonkey.com/r/ webfbfeedbck. Those interested in taking the surveys have until December 31 to do this. The CPAs and the other accountancy stakeholders should take this opportunity to let their voice be heard by participating in these BOA online surveys. It is noteworthy to cite that over 9,200 respondents have already participated in the various BOA surveys. Don’t be left behind. Go online and do your survey. Chairman Joel L. Tan-Torres is the chairman of the Professional Regulatory Board of Accountancy. He is a Certified Public Accountant who placed No. 1 in the May 1979 CPA Board Examinations. He is a partner of Reyes Tacandong & Co., CPAs. He was the former Commissioner of the Bureau of Internal Revenue from 2009 to 2010. This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@gmail.com.
What this country needs is not a revolutionary government, which would undermine the rule of law and scrap the Constitution. What we need is a strong leader with political will and pure intentions. Article VI, Section 23 of the 1987 Constitution states that Congress has the power to authorize the President “to exercise such powers necessary and proper to carry out a declared national policy.” The national debate should shift, in my opinion, from a discussion on a revolutionary government to the need to strengthen the powers of the President to enable him to carry out the declared national policy “to establish a government that shall embody our ideals and aspirations, promote the common good, conserve and develop our patrimony and secure to ourselves and our posterity the blessings of independence and democracy under the rule of law and a regime of truth, justice, freedom, love, equality and peace xxx (1987 Constitution, Preamble). If Congress needs a blueprint, it can consider the powers given to then President Cory under Article II and III of the Freedom Constitution. Maybe a strong leader with political will, pure intentions, with a competent and dedicated core support will be able to address the hunger of a frustrated citizenry for genuine reforms and drastic changes. Hope springs eternal!
Continued from A1
R
ecognizing its limitations while capitalizing on its resources and assets and furthering the programs of the Department of Energy (DOE), the Philippine National Oil Co. (PNOC) is poised to enter into public-private partnerships (PPPs) for liquefied natural gas (LNG) and real-estate development.
PPP lead chats with PNOC President Reuben S. Lista to know where PNOC is headed. n W hat is your concept of PPP? PPP is a tool that harnesses the strengths of the private sector in attaining developmental objectives of the government. It capitalizes on the expertise of the private sector as it lessens the financial exposure of PNOC while limiting its business
risks but provides a way for the private sector to recoup its investment. n What makes PPP a viable and preferred development strategy for PNOC? The PPP aids in accelerating the learning and development of expertise on the technical and operations aspect of the PPP, which PNOC needs as it transitions from a purely holding company to an operating company. PNOC, as a government-owned and
True to yourself Siegfred Bueno Mison, Esq.
THE PATRIOT
W
hen I was studying in New York, I was under the care of my foster mother, Aurora Manalili Ocampo. Alone and at the objection of her parents, she migrated to the United States in the 1980s in search of greener pastures—and she found them working as a customer and sales agent for Delta Airlines. This courage and determination remained a running theme in her life and, indeed, as she tread her last few months here on Earth.
Tita Au taught me how to iron clothes, cook in the style of the Capampangans, treat women like a true gentleman, and, most important, how to enjoy life. She raised four sons—me being the fourth, and retired early. Retirement was indeed good. Her pension allowed her to travel to the Philippines every year. She spent more quality time with her husband Jorge. But lightning struck when she was recently diagnosed with a brain tumor and given three months to live.
Every time I go to the United States, I always give her a call. Tita Au is the kind of person who, once she’s set her mind to it, is determined to achieve it. She is unbending, unyielding; and it is with this spine of steel that she lived her life. No one could stop her when she decided to move to Florida, or construct her vacation house in Pampanga, or even when she refused medical treatment for the tumor. In hindsight, she reminds me of another influential woman:
Monday, December 4, 2017 A15
controlled corporation (GOCC), acts as a catalyst for pioneering projects that will pave the way toward the development of the natural gas/ LNG industry in the Philippines, consistent with the DOE’s nine-point agenda, policy pronouncements and other rules and regulations. n Is PNOC ready for PPP? Why? What projects are you looking at? PNOC has received several interests from the private sector, both for the development of the LNG industry and of its valuable real-estate asset in a prime location at Bonifacio Global City. PNOC also needs to maximize the use of its other real-estate assets, such as those in Bataan and Batangas. PNOC recognizes that PPP projects would require business-development skills that are necessarily interdisciplinary. PNOC’s readiness is in its firm commitment to realize these PPP projects within the term of this administration. n What are the challenges and risks of PPPs by PNOC? Structuring its PPP projects is one of the major challenges faced by PNOC. Doing the right thing right
from the start will prevent costly delays in attaining PNOC’s objectives. As PNOC is still transitioning to become an operating company and its reorganization plan still subject for approval by the Governance Commission for GOCCs, the lack of in-house technical expertise is both a challenge and a risk. When the PPP projects of PNOC are already operational, its organizational structure should also be ready by then to provide the required personnel in engineering, maintenance and operations, finance, economics, etc.. n What is your message to the public? The development of the LNG industry in the Philippines toward becoming an LNG hub is PNOC’s vision. “We intend to attain this in tandem with the monetization of our banked gas in order that we will not have to put up any loan. We will build the PNOC Energy Center to house all energy-related agencies and companies, and we will enter into a business-partnership venture in order to have a continuing income for PNOC/DOE, and offer a new image for our country.”
Margaret Thatcher. The so-called Iron Lady was Britain’s Prime Minister, infamous for her bold economic policies but admired for her grit and determination. Unfortunately for her, Parliament voted her out of office, but her legacy of persistence carries on. In life, people who remain true to who they are will always find peace and prosperity. Whenever crises appear, they remain balanced because they know what they should do. In business, companies who know who they are survive and flourish despite all kinds of trials. Starbucks, for example, knew the exact nature of its business. CEO Howard Schultz understood that Starbucks was not just selling coffee, but an experience and a social status. So even when other coffee shops cut their prices, Starbucks doesn’t balk, knowing that its business is beyond just selling coffee. It was not an instant success but it prospered because it remained true to itself. It did not see 3 in 1 coffee mixes, as well as mom and pop coffee bistros as competitors. It did not have any problems with its identity, just like my Tita Au. As a believer, I try my best not to waver especially when trials test my
faith. So many before us acted with their faiths. Chapter 11 of Hebrews mentions Abraham, Noah, Jacob, Moses and Samuel as among those persons whose faith delivered them to perform His will despite facing seemingly insurmountable odds. We all must remain true to who we are. As His children, we must strive to keep our eyes on Him. We may not get what we prayed for, but we will always get what is good for us. My Bible study mentor told me that I should be happy whenever trials come my way since He gives these trials to make me draw closer to Him. In Hebrews 11:39-40, the Bible says, “These were all commended for their faith, yet none of them received what had been promised, since God had planned something better for us so that only together with us would they be made perfect.” Life is a cycle of fortunate and unfortunate events. Our balance will be tested by untimely events like a brain tumor in the case of my Tita Au. To be able to withstand these events, we simply have to remain true to who we are—children of our loving Father. Remain strong and unyielding, Tita Au. I love you.
The upside of giving up on North Korea By Eli Lake Bloomberg View
A
mbassador Nikki Haley’s remarks this week at the United Nations after North Korea’s latest missile test sounded like what a superpower should say. If war comes, “the North Korean regime will be utterly destroyed.” If China doesn’t cut off oil to the Hermit Kingdom, “we can take the oil situation into our own hands.” It would have been a great speech in 1997. That was when signatories to the nuclear nonproliferation treaty were loath to violate it. It was before North Korea had tested its first nuclear device. It was before the United State cut a deal with Iran to overlook its past nuclear transgressions in exchange for a temporary freeze on its nuclear program and a free pass to test missiles. In 2017, though, Haley’s warnings and the cruder ones from her boss, President Donald J. Trump, are disconnected from reality. And here it’s important to remember why the president and his envoys are making threats in the first place. All of this is in the service of a discredited policy to not allow North Korea to obtain a nuclear weapon. The idea has been to threaten, coddle and tempt Kim Jong Un to start negotiations that would lead to him abandoning them. Well, this is never going to happen. America and her allies have been trying this for about a quarter century and the North Koreans burn us every time. Now North Korea only needs to perfect a
nuclear warhead that can survive reentry into the atmosphere to have a credible nuclear threat against the US. As Michael Auslin, a fellow in contemporary Asia at the Hoover Institution, told me this week: “That’s only a matter of time. It’s a technical issue at this point. They are going to get it.” So it’s time for a new approach: Give up. America should never “accept” North Korea as a nuclear-weapon state. But it can end the pointless cycles of pressure and negotiation. The North Koreans have used all that posturing to buy time to perfect their nukes, and the Chinese have artfully used that dance to distract us from countering China’s own predations. And yes, I know “give up” sounds dangerously un-American. Let’s put it another way: Focus on a battle we have not yet lost. Instead of wasting the resources of an already depleted State Department on preparing for more talks with representatives of an Asian prison state, America’s diplomats and strategic planners can focus on improving our deterrence against North Korea. American diplomacy and military bandwidth can be devoted to countering China’s militarization of the South China Sea and its broader economic and political strategy to turn our Pacific and East Asian allies into vassals of Beijing. In the future, Trump and his diplomats won’t have to spend their meetings with Chinese counterparts pleading with them to get their client state to behave. That’s China’s problem now. America is developing even
better technology to shoot North Korean missiles out of the sky before they land. Then there’s credibility. It’s true that America would have taken a hit with a “give up” strategy a few years ago. But today North Korea is almost there. Despite Trump’s occasional tweeted threats, it’s hard to believe he will order a preemptive strike. Even if he did, it would probably not be all that effective. The fact that North Korea tested its missile this week on a mobile launcher makes it that much more difficult to take out these sites. This says nothing of the risk that the North would retaliate with conventional artillery shells by destroying the capital of South Korea, Seoul. Besides, nuclear weapons are expensive. Countries already integrated into the global system face penalties and pressure that outlaws like North Korea really don’t. “By acknowledging the reality of North Korea as a nuclear power, it doesn’t automatically mean Zimbabwe wants a nuclear weapon,” Auslin told me. “Those who want nuclear weapons are already trying to get them.” To give up on prevention is to focus on treatment. We need more creative options to deal with the North Korean menace. No longer will American diplomats have to worry about how Pyonyang’s tyrant will react to senior officials speaking the truth about his debased regime. Kim Jong Un wants nukes so his regime can survive. Nuclear negotiations meant assuring him that America has no interest in seeing his people live in dignity and freedom. America will not
have this problem anymore. Think of the opportunities. The president could elevate and call attention to brave North Korean dissidents. He could encourage them to begin planning for a transition to Korean democracy. Imagine a White House conference: “Planning for a Korea Without the Kim Regime.” Who knows? With a little luck maybe a constellation of dissidents could form a government in exile. Giving up on stopping a North Korean nuke means getting America on the right side of Korean history. Finally there is the benefit of stability. Kim will no longer have the ability to throw the region and the world into crisis every time he tests a nuclear device or a missile. America should still try to sabotage his program through cyber viruses and more conventional means. But in the short term, Kim will lose his ability to get the world to focus on his threats whenever he wishes. It’s something the Trump administration should think about. And maybe the next time Kim decides to provoke, the US response can be measured and boring. The Pentagon should trot out some deputy assistant under secretary to say the US frowns upon the latest move, but that North Korea knows full well what will happen if it ever attacks America or her allies. Meanwhile Trump could tweet something about his upcoming White House conference: “Imagining a World Without North Korea.” It sure beats empty threats in the service of dead-end talks.
2nd Front Page BusinessMirror
A16 Monday, December 4, 2017
Bird-flu case in Cabiao to delay resumption of chicken exports 40,000 E By Jasper Emmanuel Y. Arcalas
@jearcalas
xporters would have to wait until the first quarter of 2018 for the Philippines to regain its bird flu-free status, after a new case of avian influenza (AI) was discovered in Cabiao, Nueva Ecija. The discovery of AI in a layer farm in Cabiao, Nueva Ecija, reset the country’s countdown to bird flu-free status. Under the Terrestrial Animal Health Code of the World Organisation for Animal Heath, or OIE, a country will only be declared free from bird flu if it would not report any outbreak within 90 days after the final disinfection of the affected areas.
Bureau of Animal Industry (BAI) Animal Health and Welfare Division Chief Dr. Arlyn Vytiaco told the BusinessMirror that the Philippines may notify the OIE that it is bird flu-free as early as February next year, instead of the initial target date of December 20. “Earliest [notification to the OIE] would be the last week of February,” Vytiaco said in a text message.
The number of bird fluaffected layers in a Cabiao farm that were culled
Earlier, BAI Officer in Charge Ronnie D. Domingo said the government wanted to notify the OIE that the Philippines is already bird flu-free by December 20, more than four months after the virus was discovered in San Luis, Pampanga. “The OIE does not give official recognition. What is important is that we report to them 90 days after our last disinfection so that our report will come out in the OIE database that the Philippines is already cleared of the
AI,” Domingo said. “What our trading partners want to see is that we did something to arrest the problem,” Domingo added. Due to the discovery of bird flu in Cabiao, Vytiaco said the import ban imposed by the country’s trade partners on Philippine poultry exports would remain in place. At present, Philippine poultry exports are banned in a number of countries, including Japan, South Korea, Singapore, the United Arab Emirates and Saudi Arabia. The ban was imposed after the government announced in mid-August that bird flu struck Pampanga and Nueva Ecija. On December 1 Agriculture Secretary Emmanuel F. Piñol confirmed that a poultry farm in Cabiao, Nueva Ecija, was hit by bird flu, resulting in the culling of at least 40,000 layers. See “Bird-flu,” A2
www.businessmirror.com.ph
GOVT PANEL NO LONGER PURSUING TALKS WITH COMMUNISTS–DUREZA By Elijah Felice E. Rosales @alyasjah
T
he government panel has denied it is engaged in backchannel talks with the National Democratic Front (NDF), belying the allegation of an opposition lawmaker that the Duterte administration is still pursuing negotiations with the communists. Presidential Adviser on the Peace Process Secretary Jesus G. Dureza said government negotiators are no longer communicating with their NDF counterparts in compliance with President Duterte’s directive to terminate the peace talks. “After President Duterte cancelled talks through Proclamation 360, all talks, informal or otherwise, stopped,” Dureza said in a text message. “Any talks after are unauthorized and not by the government,” he added. In relation to this, Dureza said he has not received any reports of unauthorized negotiations with the NDF since the termination of the peace talks. Party-list Rep. Gary C. Alejano of Magdalo over the weekend alleged the government is holding backchannel talks with the NDF. He said he received an information that the government panel and the NDF
are still threshing things over in the negotiating table. “In fact, as a result of these negotiations, a proposed simultaneous signing of agreements this December is being prepared. The agreements include the comprehensive agreement on social and economic reforms, a general amnesty for political prisoners and an agreement on coordinated cease-fire,” Alejano said. Under the coordinated cease-fire, he said government forces will be instructed to stand down, while New People’s Army units will be directed to stay behind their guerilla zones. However, Alejano did not reveal where he got his information. The opposition lawmaker also said it is difficult to believe the instant and radical policy shift of the President given his long-standing ties with the communists, which traces back to his decades-long rule in Davao City. He added left-leaning leaders continue to head a number of government agencies. “Initially, the appointments could be seen as confidence-building measure. However, if the President really abhors the [communists] now, whom he wants to be tagged as terrorists, shouldn’t they be removed from the government at once?” Alejano said.