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Monday, December 12, 2016 Vol. 12 No. 61

House panel still waiting for DOF’s revised PIT bill

By Jovee Marie N. dela Cruz

inside

CUA: “Most likely, it will pass the panel in January next year and the plenary in the middle of 2017.”

With this, Committee on Ways and Means Chairman and Liberal Party Rep. Dakila Carlo E. Cua of Quirino said they have decided to push back the timetable for the bill’s passage in the House to around June 2017.

The invisible heavens

THE WATCHTOWER SHARED BY LUISA M. LACSON, HFL Word&Life Publications • teacherlouie1965@yahoo.com

Editor: Gerard S. Ramos • lifestylebusinessmirror@gmail.com

Life

Monday, December 12, 2016

TOTA PULCHRA MISS CHARLIZE

@misscharlize

AGEANT fans—this one included—couldn’t hide their hysteria as 10 candidates from the Asia-Pacific region arrived in the country for the kickoff ceremony of the 65th Miss Universe Competition at the swank S Maison Mall at the Mall of Asia Complex. With Miss Philippines Universe Maxine Medina, 26, as their host, the candidates will enjoy first dibs at experiencing the much-heralded hospitality of Filipinos as they take a whirlwind tour of Cebu, Manila and Siargao for prepublicity promos for the pageant. Their early presence gives them a chance to endear themselves to fans ahead of their 80 other competitors. The kickoff event was hosted by Wilson Tieng of Solar Entertainment, the largest provider and content operator in Southeast Asia that will be the official local media partner. At the event were Tourism Secretary Wanda Corazon T. Teo and Tourism Undersecretary Kat de Castro, with partners Okada Manila, SM Lifestyle Entertainment Corp., Philippine Airlines, San Miguel Corp., Jpark Island Resort and Waterworld Cebu, and the Hotel & Restaurant Association of Baguio, Rep. Joey S. Salceda of Albay and beneficiary Pass It Forward. “Tonight we officially kickoff the Miss Universe Competition being hosted in the Philippines next year. Let us then give ourselves a salute and a big round of applause that we have come this far—we are now just a few weeks closer to the final show, the coronation on January 30, 2017, at the Mall of Asia Arena,” declared former Ilocos Sur Gov. Luis “Chavit” Singson of the LCS Group, the major mover among the sponsors of the pageant. “Soon the country will occupy the global centerstage, as more than half-a-billion Miss Universe fans and supporters watch us in over 190 countries and territories in the entire world.” Paula Shugart, president of the Miss Universe Organization (MUO) who has a Pinoy fanbase of her own, was equally enthusiastic. “I love the Philippines! I want to thank you for what you’ve done to the MUO over the years. This is a dream come true not just for Pia; it’s also a dream come true for me. We have 11 candidates tonight. Imagine in over a month, we’re gonna have 90 contestants from all around the world. Come January 30, here, everyone is going to know about the Philippines.” The first to arrive at Friday dawn was Tania Pauline Dawson, 23, an actress, singer, teacher and model who won Miss New Zealand 2016. She has Pinay blood and wishes to be the second Miss U from her country after Lorraine Downs in 1983. Deshauna Barber, 27, a lieutenant in the United States Army Reserve, arrived on Friday morning. She is Miss USA 2016 and was crowned by Olivia Jordan, who will host the pageant along with Steve Harvey and Joey Mead King. Jenny Kim, 23, is a South Korean model who was Miss World Korea 2015 first runner-up and was appointed Miss Universe Korea 2016 by Park Jeongah, national director of Miss Universe Korea. Caris Tiivel, 23, won Miss Universe Australia 2016 on her second try. She will try to better the feat of her predecessor, Monika Radulovic, who was fourth runner-up last year, or third runner-up depending on who you believe between her and Miss France Flora Coquerel. If she wins, Caris will be the third Australian winner after Kerry Anne Wells in 1972 and Jennifer Hawkins in 2004. In 1994, the second time the pageant was held in Manila, Michelle van Eimeren was a heavy favorite and eventually married singer Ogie Alcasid. Model Chalita Suansane, 21, is Miss Universe Thailand 2016. Areeya Chumsai, her country’s rep in 1994, was also a crowd darling. Thailand has produced two winners, Apasra Hungsakula in 1965 and Porntip Nakhirunkanok in 1988. Miss Japan Sari Nakazawa, 23, a model from Shiga, hopes to crack the top 10 like her predecessor Ariana Miyamoto last year, or perhaps win the title like Akiko Kojima in 1959 and Riyo Mori in 2007. Dang Thi Le Hang, 23, was second runner-up at the 2015 Miss Universe Vietnam pageant and was appointed Miss Universe Vietnam 2016 by Tony Nguyen Quoc Toan, the national director of the Miss Universe Vietnam pageant. Miss Myanmar Htet Htet Htun, 24, is an actress, TV host and model. She was also Miss Myanmar World 2014 second runner-up. Her country is a relative newbie to the pageant and Htet hopes to make a splash. Kiran Jassal, 20, is a model who was crowned Miss Universe Malaysia 2016. Her mother was Mrs. Malaysia 2015. She honed her catwalk skills under Malaysian supermodel Amber Chia. Kezia Warouw, 25, is a model who won Puteri Indonesia 2016. A towering 6 footer, she easily stands out and will be closely watched after the victories of her Puteri batchmates Felicia Hwang (second runner-up at Miss International 2016) and Ariska Putri (Miss Grand International 2016) Miss China Li Zhenying, 24, arrived on Saturday evening and will join the others on the tour. I thought Miss Singapore, Cheryl Chou, would be joining them, too, but she was a no-show. Queen Pia, who admits to still being attached to her crown and was “hesitant” to relinquish her title, also welcomed the visiting beauty delegates. “It’s not only a dream of Paula’s, a dream of the Miss Universe Organization, but also a dream of mine to bring back the competition here, and to show the world how beautiful the Philippines is. And it would really be great if I can finally have a proper walk onstage, in no less than in my home country, of course,” the teary-eyed, but visibly excited, reigning titleholder said. ■

MISS Australia Caris Tiivel, Miss Indonesia Kezia Warouw, Miss Japan Sari Nakazawa, Miss Korea Jenny Kim, Miss Malaysia Kiran Jassal, Miss Myanmar Htet Htet Htun, Miss New Zealand Tania Pauline Dawson, Miss Philippines Maxine Medina, Miss Thailand Chalita Suansane, Miss Vietnam Dang Thi Le Hang and Miss USA Deshauna Barber flank Miss Universe 2015 Pia Alonzo Wurtzbach for the kickoff event of the 65th Miss Universe Competition on January 30, 2017. PHOTOGRAPHED BY GEORGE BUID

Life

Alberto C. Agra

hen government enters into a public-private partnership (PPP) arrangement, is it “procuring”? When government procures, is it entering into a PPP? What is the difference between a PPP arrangement and a procurement contract? Some consider PPPs as procurement contracts and vice versa. To some extent, this is true. For those who define PPPs as any relationship between the government and the private-sector proponent (PSP), then all procurement contracts, save agency-to-agency agreements, are PPPs. In the selection of the PSP for PPP contracts, some refer to this as a “procurement process.” Continued on A15

PHL coconut-rehab program in Yolanda-hit areas yet to bear fruit

Miss Universe is on! P

PPP Lead

BMReports

AND THEN SOME: IT WAS THAT ONE TIME D4

BusinessMirror

PPP is not procurement

Continued on A2

MISS UNIVERSE IS ON! EAR Lord, permit us to appreciate the following visions of Your Kingdom, as we stand and admire our future dwelling place: “A throne was in its position in heaven, and someone was seated on the throne. And the One seated had the appearance of a jasper stone and a sardius stone, and all around the throne was a rainbow like an emerald in appearance”—Revelation 4:2,3. “There was a brilliance all around Him like that of a rainbow in a cloud on a rainy day. That was how the surrounding brilliant light appeared. It was like the appearance of the glory of God the Father”—Ezekiel 1: 27,28. These visions, given to the apostle John and the prophet Ezekiel, depict the splendor of the Most High God, with things we can readily envision-dazzling gemstones, a rainbow and the majesty of a throne. May God’s presence be one of awe-inspiring beauty, pleasantness and serenity in our hearts. Amen.

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@joveemarie

he House Committee on Ways and Means has directed the Department of Finance (DOF) to tweak its proposal lowering personal-income tax (PIT) and the accompanying offsetting measures, citing “contentious provisions” that need to be addressed for faster approval.

2016 ejap JOURNALISM awards

content is king, distribution is queen E4 Monday, December 12, 2016

Perspective BusinessMirror

www.businessmirror.com.ph

Content is king, distribution is queen

By Roger Pe

here are many products that do not become brands and eventually become failures. Blame it on hit-and-miss marketers who do not begin with the basic: Market research. Market research has been called the bedrock of brand success. When companies ignore it for new product development or testing new advertising campaigns, the result often becomes disastrous. Millions of pesos are wasted from failed new product launches, precisely because consumer research was not done, improperly executed or results were ignored. Market research veteran and broadcast industry icon Nic Gabunada has seen it all. Afterall, he was general manager of Media Pulse (predecessor of AC Nielsen), former head of ABS-CBN Research and Business Analysis, eventually, senior vice president of the same network’s Integrated Sales and Marketing. He was also CEO of Omnicom Media Group, driving the group’s media brands, like OMD, PHD and M2M, as well as its ideation, digital and brandengagement specialized units to profitability. Let’s take a look how he landed in research and broadcast media. Gabunada begins by saying, “I call it Serendepity. It was not planned.” The year was 1984. Gabunada was then a research tutor at Center For Research and Communication (CRC), now University of Asia Pacific. Back then, he was also a teacher at University of the Philippines Manila, and part of the antiMarcos movement. He remembers the crisis the country was going through. The economy was spinning downward after Ninoy Aquino’s assassination. The anti-Marcos movement was gaining momentum, and he, a year earlier, finished graduate studies in industrial economics. “That was a period in my life that I built a network of connections within the marketing and research industry. I met the country’s top marketing, advertising and research practitioners, and learned from them. I was surprised to hear them admit that they also learned something from me,” he reminisces. It was a time that sharpened his leadership and organizational skills, providing him a good laboratory to craft his communication (anti-martial law propaganda) strategies. He implemented them and made sure these were cascaded to help mobilize people into action. The same experience may have also developed his preference to stay in the background. “My first job [at around 11 years old] was a shoeshine boy and a farm-goods trader at our town market. I made shoes glisten and, on the side, bought farm livestock from farmers and resold them to buyer-consolidators. Strictly speaking, I was not buying but simply facilitating the exchange.” Gabunada earned more than enough for his school allowance. He gave the rest to his parents and shared it with his siblings. In college, he was a scholar and earned extra by giving tutorial lessons to students who were having difficulties coping up with their academic requirements. He taught mathematics at Ateneo de Davao University after college, but was detained because of his anti-martial law activities. To “cool off”, he transferred to Manila and took graduate studies at CRC, an Opus Dei institution, perfect training ground for those who wanted a career in economics. A Hans Seidel Foundation scholarship would fall on his lap,

in exchange for working with CRC for three years after graduation. He became an economist at the center’s industry monitoring unit, assigned to cover all consumer industries, such as fast-moving consumer goods, pharmaceuticals and QSR (quick service restaurants), among others. He eventually became the point person for CRC’s economics of marketing seminars, where he worked with industry icons in marketing, advertising, sales and distribution. They were the rock stars of the marketing industry whom he invited as trainors. Among them were JJ Calero, Minyong Ordonez, Jess Dinglasan, Ely Santos, Benjamin Dy, etc. “It was in this phase of my career [from 1983 to 1985, yes, I was 25 year old in 1984] when I started to like marketing and its various components, media research included,” he says. He then joined Pulse Research Group under Rosario Chiew, known to be the doyen of market research in the Philippines. He was appointed general manager of Media Pulse, the arm doing research on media habits of consumers. That exposed him to network executives and advertising agencies and had an inside track of what they were doing, type of information they needed and their decision-making processes. The company provided audience research studies and measurements to advertisers, ad agencies and media suppliers (radio and TV networks and print publications). Gabunada helped set up what became popularly known as the TV people meter, a first in the country. “I was challenged and got excited with the task of providing the industry a concrete basis for their advertising and media planning,” he says. It was a more accurate way of reading TV viewing habits. In his job, Gabunada had the chance to go around the country doing studies on media habits of regional consumers, as well as familiarized himself with media facilities outside of Manila. He joined ABS in 1990 as head of research and business analysis, and was in that post till 1997. He transformed the unit into a group that is responsive to the strategic and operational requirements of the network. I only “left” research, when, to my surprise, I was called by Freddie Garcia to his office in 1997 and was instructed that from that point, I was to take the role of head of Sales and Marketing of ABS-CBN. I asked if I have a choice and he said “No” but assured me that he will teach me the tricks of the trade, which he thought I still have to learn. More important, will personally call his close friends in the industry to also mentor me,” he proudly relates.

First Pilipinas Conference

Business leaders Enrique K. Razon Jr. (left), chairman and CEO of International Container Terminal Services Inc., and Jaime Augusto Zobel de Ayala, chairman of Ayala Corp., share their insights on the state of the Philippine economy at the First Pilipinas Conference in Makati City. The event was organized by private think tank Stratbase Albert del Rosario Institute in cooperation with the Philippine Trade Foundation.

At the time of his appointment, the network was facing an advertiser/ad agency boycott, a full steam test for his negotiation skills to resolve critical issues. Despite losing more than two months of revenues because of the boycott, his team ended the year hitting the company’s revenue targets. As head of Sales and Marketing of ABS-CBN, his key achievements were quadrupled company revenues, from P266 million per month in 1996 to more than P1 billion per month in 2005 and missed hitting revenue targets during his stint. He also institutionalized the use of program intrusions, events and other below the line activities in order to generate audience and customer affinity to the various channels offered by ABS-CBN, as well as designed and implemented a competitive commercial spots monitoring system. Why is consumer research important in developing a media strategy? Gabunada says, “You have to understand your target market in order to best craft your message, what to communicate,

how to communicate, which geographic unit to target, which medium/media is best for your message,” he says. He stresses that one must also know where the audience is and what time of day/week it is best to hit him with your message. “You also have to know what is the best and the most cost-efficient medium available to air/print/show your messages. All these require research, and having said that, you also need to be able to make decisions even without the benefit of full information,” he adds. Can social media drive a country to be great and move forward? Gabunada says, social media is a great amplifier of messages. “Great campaigns that will help this country move forward and its people to feel great and proud of being Filipinos can use social media as the vehicle for doing these campaigns. It is proven it can be an effective tool. It is there for the taking.” What does he think advertisers should do and shouldn’t do on social media? “In social media and in any communications plan, for that

matter, “Content is king. Distribution is queen. Engagement builds and expands the kingdom.” A great social-media content, he says, engages the target audience, evokes emotions and/or prods them to take action. Social-media posts could be heart-touching, funny; may hugot and kilig or one that makes people angry. No rules as to the format that would make for good content. It could just be a 25-word tweet, a photograph, a very well-designed meme or a simple video.” What kind of a manager is he? “I prefer to be in the background and enjoy seeing how my campaigns have helped a brand, a person and/or a cause succeeds. His work philosophy: Do your best. On the explosion of mobile apps: “They can only go upward. New apps are introduced everyday. New advertising tools are now available to practitioners. If only our Internet speed in the country could be made faster, in less than five years, almost mobile app usage among Filipinos should be at 100 percent or double the levels now,” he says.

The man who has come full circle from the heyday of traditional media to digital and ever-changing media has organized Gabunada and Associates, which puts together experts whenever there is somebody who needs help in mounting a communications and/or marketing campaign via online platforms. He plans to drive around the country, from Manila to Ilocos to Cagayan and back and drive from Manila to Davao and back. “This I have not done and I really love to do this with friends and socialmedia volunteers to document the beauty of the Philippines,” he says. Wanna join him as soon as he can organize one? Gabunada just finished a successful stint as the lead person in executing the above the line (TV/ radio) strategy of the Duterte presidential campaign and also strategizing and managing the campaign’s social-media component. A strong strategic thinker and team builder, he is a data-driven executive but can make effective decisions even without the benefit of full information.

perspective

‘institutional conspiracy’

Sports

Ex-high pick Bickford suspended 50 games

BusinessMirror

EW YORK—Milwaukee right-hander Phil Bickford, the 18th overall pick in baseball’s 2015 amateur draft, has been suspended for the first 50 games of next season following a second positive test for a drug of abuse under the sport’s minor league drug program. Bickford, 21, is on the roster of Milwaukee’s Class A Carolina Mudcats of the Carolina League. He signed with the San Francisco for a $2,333,800 bonus and was traded at this year’s August 1 deadline to the Brewers along with catcher Andrew Susac for left-hander Will Smith. Bickford was 7-7 with a 2.93 earned runs average (ERA) in 22 starts and one relief appearance for three Class A teams this year, striking out 135 in 120 innings. He pitched in the All-Star Futures Game in San Diego. In addition, Toronto right-hander Pedro Loficial was suspended for 72 games following a positive test for metabolites of Stanozolol and Miami outfielder Casey Soltis was banned 50 games following a second positive test for a drug of abuse. Loficial, 21, was 1-0 with a 1.35 ERA in three relief appearances and 6 2/3 innings for the Dominican Summer League Blue Jays. The 21-year-old Soltis, a fifth-round pick in 2014, hit .190 this year in 52 games at Class A Greensboro of the South-Atlantic League. Major League Baseball announced the discipline on Friday. There have been 95 suspensions this year under the minor league drug program and 13 under the major league program. AP

| Monday, deCeMber 12, 2016 mirror_sports@yahoo.com.ph Editor: Jun Lomibao Asst. Editor: Joel Orellana

phil BickfoRd has been suspended for the first 50 games of next season following a second positive test for a drug of abuse under the sport’s minor league drug program. AP

John daly will pursue a spot on the team that will represent the united states at the 2018 pyeongchang games. AP

Time To make Russians pay foR olympic doping

‘INSTITUTIONAL

CONSPIRACY’ T

By Tim Dahlberg The Associated Press

HERE are really only two possible explanations why two members of the Russian women’s hockey team at the Sochi Olympics had urine samples that contained male DNA. One, there were men inside those baggy uniforms of a team that won its first three games before losing in the quarterfinals. Two, someone was messing with the samples. It’s a bit easier to figure out why eight other Russian athlete samples in Sochi had salt content that was physiologically impossible in a healthy human. Simply put, the host country was cheating on a level never before seen in organized sports. That news is not exactly new, of course. Doping investigators first nailed the Russians for covering up and tampering with drug tests in July in a report that should have gotten them kicked out of the Rio Olympics. It didn’t, because the International Olympic Committee (IOC) bowed to Vladimir Putin and allowed individual sports federations to decide which Russians could compete. A lot of them did, and Olympic officials were exposed as the hypocrites they are when it comes to ridding sports of cheaters. Putin and his minions basically dismissed the first McLaren report commissioned by the World Anti-Doping Agency (WADA) as unfounded and full of lies. Putin himself claimed Russian track-and-field athletes were being discriminated against. And just last month, the former Soviet minister brought out of retirement by Putin to lead Russia’s future strategy on doping declared that there was no statesanctioned program to help Russian athletes win medals. “There was no organized doping system on the state level,” Vitaly Smirnov said. “We believe that the participants in this were individuals, who were pursuing their own goals.” The release on Friday of the second McLaren report says otherwise, and is backed with a ton of evidence. Any Russian denials will ring hollow, even to the ears of previously tone-deaf Olympic leaders. In voluminous detail, Canadian lawyer Richard McLaren documented how more than 1,000 Russian athletes were involved in the doping scheme. The report unveiled a vast “institutional conspiracy” in more than 30 sports along with the corruption of the drug-testing system at the 2012 and 2014 Olympics. Russians cheated like crazy in London, with 15 medal winners part of the deception. They took it to a new level at home in Sochi, where Vladimir Putin led the cheerleading, as juiced Russian athletes led their country to the top spot on the medal table. The cheating even included tampering with the urine samples of six Russian athletes who won a total of 21 medals at the Sochi Paralympics.

“For years, international sports competitions have unknowingly been hijacked by the Russians,” McLaren said. Indeed, they have. Now the question is, what will Olympic officials and leaders of sports around the world do about it? The release of the first report got some Russians banned from Rio, though the IOC, at the last minute, rejected WADA’s request to ban the entire team. Russians are also being systematically stripped of their medals from both London and Sochi. But that’s hardly punishment enough for a cheating conspiracy that seemed to begin after Russia was embarrassed by an 11th-place showing in the medal standings at the 2010 Winter Olympics in Vancouver. It involved top officials in the Russian Sports ministry, FSB intelligence service and the country’s antidoping agency. IOC President Thomas Bach, who resisted efforts to ban Russia from Rio, finally seems to get it. He said on Friday any athlete or official involved “in such as sophisticated manipulation system” should be banned for life from the Olympics. Again, though, not enough. The McLaren report shows a scam carried out by agencies among the highest levels of Russian government. The punishment should hit the highest level of Russian government. A good start would be a complete ban on Russia

at the 2018 Games in Pyeongchang, South Korea. This should be a no brainer, with just 14 months left before the games and the Russians still in denial. Next, Olympic officials should immediately push to move the bobsled and skeleton world championships set for Sochi in February. American bobsled and skeleton athletes were already discussing a possible boycott of the championships to protest the doping scandal. Third, Russia should be put on Olympic probation, where anything other than strict compliance will mean a ban of Russia for the Tokyo Olympics in 2020. Last, there needs to be an Olympic housecleaning. Bach and other Olympic officials who caved in to Russia in Rio should be replaced with new leaders who show a greater commitment to cleansports. The ball was fumbled in July when Olympic leaders could have made an emphatic statement about clean sports and levelplaying fields. It’s time to make sure it doesn’t happen again.

Bob, skeleton athletes wary of tests, may skip Sochi Worlds

LANA MEYERS TAYLOR and Steven Holcomb are dealing with the same problem. Both want to compete in this season’s world bobsled championships, since it this will probably be their final opportunities to do so before retirement. Except, for now, those races are scheduled to be in Russia. “And I don’t see how it’s safe for any athlete,” Meyers Taylor said. There’s plenty of drug testing at world championship meets, and put simply, the trust level among plenty bobsled and skeleton athletes that their samples would be secure in Russia is below minimal—especially after the second report issued by World Anti-Doping Agency (WADA) investigator Richard McLaren on Friday showed systemic tampering with such tests. So some tricky decisions await. Will athletes have to skip a world championships in Sochi out of fear that going there might make them susceptible to doctored tests—which Friday’s report showed the Russians are extremely capable of doing— that come back positive and leave them banned to compete at the 2018 Olympics? Or will the International Bobsled and Skeleton Federation simply move worlds elsewhere? “They’re running the doping control? That’s just dumb,”

Holcomb said. “You’re telling me the biggest country in the world, that just cheated with the biggest doping plan in the world, and you’re going to take my urine sample and go test it? That’s insane. I’m not going to let you take that. They haven’t really come out and said what they’re going to do about that. I don’t know. Nobody knows.” To be clear, athletes have been talking about their fears about racing in Russia for months. What came out on Friday only heightened concerns, especially after that report showed proof of how in-depth the practice of tainting samples has been. A handful of athletes—including Britain’s Lizzy Yarnold, who won Olympic gold on the Sochi track in 2014—have also talked about boycotting, though few national federations have openly suggested that as an option. “I want to compete in a World Champs that’s drug free & safe for all. Russia, is not an option,” US bobsledder Lauren Gibbs tweeted. It is not a unanimous thought right now. The Russian reaction to talk of moving the worlds is essentially this: The Americans fear losing on unfamiliar ice. When US bobsledder Lolo Jones—an Winter Olympian in sliding, and a past Summer Olympian in hurdles—asked on her Facebook page about why worlds aren’t being moved from Russia, some of the first reactions she received suggested the Americans should be investigated, as well. US officials are backing their athletes, and acknowledge their concerns are real. “We can’t pretend like we haven’t had cyber attacks or we haven’t had privileged athlete information publicized,” USA Bobsled and Skeleton CEO Darrin Steele said. “Our athletes have been targeted and we can’t ignore that. Now how far that goes, I don’t know. But I’m not going to tell an athlete, ‘You’re being silly, nothing could happen to you.’ “Do I think the food’s going to be tampered with or samples going to be tampered with? I personally don’t, because I think Russia’s got something to prove,” Steele added. “But I can’t guarantee anything. I’m not going to tell an athlete they need to go. We’ll respect the positions of those who opt out and those who compete.” For now, it’s unclear if anyone will go, or anyone will skip the worlds. The athletes want answers, and right now have nothing but questions. “If I had to decide today, would I go? Good question,” Meyers Taylor said. “I don’t think I’ve made a clear-cut decision yet, because I want to make the most informed decision I can and I’m still in the fact-finding stage. But if it comes down to it and I’m in a position where I’m not comfortable, I will definitely not go.” AP

Sports »

This is one of Russia’s national drug-testing laboratories in moscow, Russia, where Russian athletes allegedly given a “cocktail” of banned substances. AP

Govt employees under contract subject to VAT, 3% tax rate–BIR

HE Bureau of Internal Revenue (BIR) has clarified the tax treatment of salaries paid by the government to its personnel who are engaged under a contract of service or job-order arrangement. Internal Revenue Commissioner Caesar R. Dulay issued Revenue Memorandum Circular 130-2016, citing a common issue, “which arise on the appropriate rate of withholding tax that will be imposed on the payment of services rendered by government personnel rendering services under a job-order arrangement.” Dulay’s circular said government personnel hired under job-order arrangements are not employees of the government, and are, thus, considered

PESO exchange rates n US 49.6490

as service contractors who are taxed differently on the remuneration they receive for rendering such services. “It is settled that under existing policies and guidelines of the Civil Service Commission, defining the terms ‘individual contract of services/job order’ and clarifying the terms ‘contract of service’ and ‘ job order’, there is no employeremployee relationship created under either a job order or contract for service, and that services rendered pursuant thereto shall not be considered government service,” the circular clarified. Thus, the circular said government employees who are nonprofessionals shall be taxed either as a value-added

tax (VAT)-registered taxpayer, if he qualifies as such, or as a service contractor required to pay a 3-percent withholding tax on money payments received from the government. “The performance of services by the job-order personnel pursuant to Executive Order 782 or Executive Order 366 is not under an employeremployee relationship,” the circular said. “Hence, it is a sale or performance of service.” If such sale or performance of service amounts to more than the VAT threshold of P1,919,500 for the taxable year, then such job-order personnel shall be subject to the payment of 12 percent VAT. See “Govt,” A2

This December 6 photo shows rows of coconut trees lined up like skyscrapers on an island in Davao del Norte. Included in Region 11, Davao del Norte’s coconut-farming sector is also struggling with the aftermath of Supertyphoon Yolanda. NONIE REYES By Jasper Emmanuel Y. Arcalas @jearcalas & Elmer Recuerdo|Correspondent

Part One

ACLOBAN City and Manila—He almost choked. But Renato Empillo suppressed, for the nth time, the tears welling up in his eyes and the wail that wanted to exit his throat. Empillo, one of nearly half-a-million farmers relying on coconut farming, pulled again the string revving up the chainsaw and proceeded to cut the 49th tree that day. His muffled cry drown out by the roar of the chainsaw as the rolling blades hit the trunk. “Para kang naghihiwa ng sarili mong laman hanggang wala ng natira sa buhay mo,” Empillo told the BusinessMirror later. “Alam mo na bukas sa paggising mo wala na ang bumuhay sa iyo [It’s like cutting your own flesh until your life gets snuffed out. All the while, you know tomorrow the things that made you survive in life for years are all gone].” Fifty-two more coconut trees lie strewn around Empillo, their brown-and-green branches broken like straw because of two words: “Storm surge”. On that tragic November night three years ago, Mother Nature brought those two words into fruition on Empillo’s farm in Santa Fe, Tacloban, via Supertyphoon Yolanda (International code name Haiyan). The number of coconut trees in his farm appears a dot in the government’s final count of trees damaged by Yolanda—42,343,905, to be exact, across three regions. Continued on A2

n japan 0.4356 n UK 62.5031 n HK 6.4021 n CHINA 7.2138 n singapore 34.8977 n australia 37.0332 n EU 52.7123 n SAUDI arabia 13.2408

Source: BSP (9 December 2016 )

A2 Monday, December 12, 2016

BMReports BusinessMirror

www.businessmirror.com.ph

CENTENNIAL MAN Romarico G. Vitug, a prominent citizen of Lubao, Pampanga, marked his 100th birthday with a dinner at Guevarra’s Restaurant in San Juan on Thursday night. Celebrating with him are (standing, back row) daughter Dra. Charina Vitug-Villegas, his wife Helen, son Paolo and five grandchildren. Vitug was an accountant-lawyer who practiced both in Metro Manila and Pampanga. Full story will be featured in Our Time on Saturday, December 17. NONOY LACZA

PHL coconut-rehabilitation program in Yolanda-hit areas yet to bear fruit Continued from A1

Ravaged land

House panel still waiting for DOF’s revised PIT bill Continued from A1

“Most likely it will pass the panel in January next year and the plenary in the middle of 2017,” Cua told the BusinessMirror. “[We decided to move the measure’s approval] because we are still finalizing our version of the measure and the DOF is the one drafting it.” According to Cua, they still need to settle contentious provisions in the DOF’s bill, which was submitted by the agency to Congress in September.

Offsetting measures

The imposition of excise tax on petroleum, removal of value-added tax (VAT) exemptions for senior citizens and person with disabilities (PWDs) and ad valorem tax on automobiles are among the offsetting measures being pushed by the DOF to cover for the estimated P159 billion in foregone revenues from the planned changes in PIT rates. Lawmakers, however, rejected some of these proposals. Cua said they now expect the finance department to retain the VAT exemptions for senior citizens and PWDs. Cua said the lower chamber also wants to include a provision on revenue-collection efficiency in the tax-reform package, instead of removing the VAT exemptions for senior citizens and PWDs as what the DOF wants. He said lawmakers also want the DOF to exempt workers earning P25,000 monthly, or P300,000 annually, and below from the PIT. However, the DOF proposal seeks to exempt from PIT only those with a monthly salary of P20,833, or P250,000 annually. “We will see the final version once the DOF resubmits the bill to Congress,” Cua added. In the current setup, those earning P10,000 or less per month pay a 5-percent income tax, while those with yearly earnings of P500,000 and above pay a 32-percent income tax.

‘Drop auto excise tax’

Meanwhile, Cua said he personally opposed the plan of the DOF to impose excise tax on automobiles to help solve the traffic crisis. “As a representative of Quirino, the imposition of excise tax on automobiles to solve traffic is unfair to us [people of Quirino]. They should find other solution to solve it,” he said. “If you ask me, I do not 100-percent subscribe to that notion because this [traffic] issue is limited to the urban areas, like Metro Manila, Cebu and a few other parts of the

country. In places like Quirino or maybe Mindoro, traffic is not much of a problem. So we would like also for the people who are in the provinces to have the option to purchase a vehicle at an affordable package,” Cua added. Earlier, Cua admitted that the country’s car industry will be affected with the ad valorem tax on automobiles being pushed by the DOF as one of offsetting measures. “We have to admit that they will be affected. We will talk to [the DOF] about this; maybe there should be classification of vehicles [depending on the selling price]. We have to remember we are using cars as our economic tool and not just for luxury,” the lawmaker added. He said the imposition of an ad valorem tax on automobiles will give an additional P40 billion to P50 billion in revenue to the government. Under the DOF version of the bill, if the net auto manufacturer’s price/importer’s selling price is P600,000, the excise tax will be 5 percent. If the net manufacturer’s price/importer’s selling price is P600,000 to P1.1 million, the excise tax will be 20 percent of net manufacturing/importation price. If the net manufacturer’s price/importer’s selling price is P1.1 million to P2.1 million, the excise will be 40 percent of net manufacturing/importation price. If the net manufacturer’s price/importer’s selling price is P2.1 million, the excise tax will be 60 percent of net manufacturing/ importation price. The bill said the brackets reflecting the manufacturer’s price or importer’s selling price, net of excise and VAT, will be indexed by the secretary of finance once every two years, if the change in the exchange rate of the peso against the dollar is more than 10 percent from the date of effectivity of the act.

No rush to tackle ‘sin’ tax

The Senate, set to adjourn for Christmas recess this week, is in no rush to take up a P14-billion additional revenue measure on the verge of being passed in the House of Representatives reverting to two-tier “sin tax” rates for high-priced and lowend cigarettes. This was confirmed over the weekend by Sen. Juan Edgardo Angara, chairman of the Ways and Means Committee, tasked to review all tax proposals before such money measures emanating from the House are taken up by senators for plenary consideration and approval. “There is no version of that [House] bill

here,” Angara said, indicating no senator has filed a counterpart bill yet. “Nobody filed it here.” The House of Representatives last week passed House Bill 4144 on second reading aimed at reverting to the two-tier tax rates from the existing unitary tax on all cigarette brands, as provided in Republic Act (RA) 10351, also called the Sin Tax Reform Act. Angara acknowledged concerns that amending the bill could negate efforts by health advocates to discourage smoking habits that lead to cancer by imposing higher tax on all brands of cigarettes. “If unitary tax, there will be no high end and low end.... There is no more classification.” The senator noted, however, the House version passed on second reading last week would jack up cigarette tax rates at a higher level “because next year it [tax rate] is supposed to be 30. We have a two tier this year. Next year it’s going to be unitary. Ang gusto nila is to preserve the two tier, but the higher rate.” He expects the tax measure would be transmitted to the Senate soon after it is passed by the House on third and final reading, but could not say for sure the bill would be passed by congressmen before adjourning for Christmas recess later this week.

House passage of bills

The House is expected to pass this week the cigarette-tax bill, as well as a measure increasing by P2,000 the monthly pension of the Social Security System (SSS) pensioners. House Majority Leader and PDP-Laban Rep. Rodolfo C. Fariñas of Ilocos Norte, chairman of the House Committee on Rules, said these two measures will be approved before Congress goes on break on Wednesday. Fariñas said House Bill 4144, which seeks to amend RA 10351, or the Sin tax Reform Act, will give an additional P14-billion government revenue while curbing smoking in the country. Cua said the proposal will help generate additional revenues for the government. “We see that this measure will bring about additional revenues to the government, and perhaps, since it proposes a higher rate or excise tax on tobacco, as compared to the scheduled rate in 2017, we hope that it also addresses or further improves the law’s ability to curb smoking or the prevalence of smoking.” Party-list Rep. Eugene B. de Vera of ABS, principal author of the measure, said his bill will protect local tobacco farmers, especially those from Northern Luzon, who would be displaced by the uniform excise tax rate. With Butch Fernandez

GOVERNMENT estimates put more than half of the total figure, covering Regions 6, 7 and 8 (around 26,147,288 coconut trees) had chance of recovery. According to the latest report of the Philippine Coconut Authority (PCA) on its Yolanda Rehabilitation and Recovery Program (YRRP), the bulk of the damaged coconut trees were in Region 7. The report, which was presented during a Cabinet meeting in late-November, emphasized that Eastern Visayas suffered the brunt of Yolanda after it made its first landfall in Guiuan, Eastern Samar. Some 33,944,402 coconut trees were recorded damaged in Eastern Visayas. The Department of Agriculture (DA) valued at P17.9 billion Yolanda’s total damage to the coconut sector in Regions 6, 7 and 8. Before the supertyphoon crippled the coconut industry in the Visayas, the area is one of the top coconut-producing regions in the country accounting for about 17 percent of the country’s coconut output in the past five years, according to the PCA. The Eastern Visayas region, in particular, which is composed of the two main islandprovinces of Leyte and Samar, is a rich source of coconut products and by-products producing 12 percent of the coconut output of the country, next to Davao region, according to the PCA.

Seed funding IN the report of then Budget Secretary Florencio B. Abad, the government’s total budget —then under President Benigno S. Aquino II—for the comprehensive efforts to uplift the devastated Visayan regions was P150.029 billion. Of the total funding, 4.97 percent, or around P7.468 billion, is allocated for the rehabilitation efforts of the PCA to restore the vigor of the coconut industries in the Yolanda-affected regions, Abad’s report showed. PCA Deputy Administrator for Operations Roel M. Rosales disclosed that the PCA requested around P3 billion to P4 billion of the funding allocated to their agency to kick-start their rehabilitation efforts for coco farmers affected by Yolanda. According to Rosales, P2.868 billion was released from the Department of Budget and Management to respond to the requirements of the Yolanda-affected areas in the Regions 6, 7 and 8. Rosales, who is also part of the government’s post-Yolanda agriculture rehabilitation program, told the BusinessMirror the most affected in terms of losses would be Region 8.

Govt. . .

Continued from A1

In determining whether a job-order personnel of the government has reached the VAT threshold, his other income from other lines of business, which can be subjected to VAT shall be aggregated with his income from the sale or performance of service in the job-order contract with the government. Even if the job-order personnel does not meet the VAT threshold, he would still be required to pay a percentage tax of three percent to be withheld at source. Dulay’s circular cited Section 5.116 of Revenue Regulations 2-98 requiring the withholding of percentage tax to any money payment made by the government or any of its bureaus, offices and instrumentalities, including government-owned or -controlled corporations. Under the cited provision, persons exempt from VAT shall be required to

The PCA’s budget for Yolanda rehabilitation was released in January 12, 2014. “In our estimate we lost about 16 million coconut trees,” Rosales added. “We decided then to implement a four-prompt program—one program after another to be able to build up from where the ruins are.”

Program branches THE PCA’s mother plan for the Yolanda-damaged areas is what it calls the YRRP. The four-point YRRP is composed of debris management, replanting, fertilization and intercropping. According to PCA documents, the YRRP aims to resurrect the coconut industries in the three Yolanda-affected provinces in the long term. At the same time, the YRRP also serves as a mitigation program to ease up and aid economic status of the coconut farmers. Under the debris management (DM) component, the PCA targets to cut around 10 million of totally devastated coconut trees to clear public and private lands of the debris that pose hazard to the environment and health. The DM project also aims to prevent occurrence of pest infestation, support organic fertilization and aid in the shelter development program of the government, the PCA said. In the implementation of the DM project, the PCA will offer a cash-for-work program for hired chainsaw operators, which mostly are the affected coconut farmers in the said concerned provinces. There are about 456,243 coconut farmers on the Visayas Island affected by Yolanda.

Tree cutting ROSALES further explained that of the 16 million totally damaged trees, only 10 million will be cut and the rest will be left to nature. “Because these 10 million trees are located in the mountains and interlands, so it is not economically viable or logistically impossible to move them.” The timber from the coconut trees were used to rebuild some of the shelters of the locals while some sold the timber for money, he added. “We bought thousands of chainsaw just to facilitate the DM project,” he said. “We lend them to the farmers and also to the local government units.” The PCA finished cutting the target 10 million trees in May of 2015, Rosales says. For the duration of the DM component, the PCA used 2,736 chainsaws, wherein 29,947 coconut farmersbenefitted from the program, PCA documents show. Rosales said they allotted around P800 million for the DM component of the YRRP.

To be continued

pay a 3-percent withholding tax on gross money payments made by the government to them. Dulay’s circular provides for a higher tax rate on job-order personnel who are professionals, such as law yers and accountants. “In general, individuals who follow an independent trade, business or profession, in which they offer their services to the public, are not employees,” the circular said. “For professionals who are paid for the services they render, they are subject to a withholding tax rate of 10 percent or 15 percent, whichever is applicable, on their gross professional fee,” it added. For professionals having a gross income of more than P720,000 for the current taxable year, a creditable withholding tax of 15 percent shall be imposed on the gross income; if the gross income is less than or equal to P720,000 then the creditable withholding tax rate shall be 10 percent. David Cagahastian

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Monday, December 12, 2016 A3

NCC to start implementing one-form system in permits renewal next year

By Catherine N. Pillas

@c_pillas29

he National Competitiveness Council (NCC) will start the implementation of the oneform system for business-permit renewals next year, in keeping with the Duterte administration’s economic agenda of keeping government red tape at a minimum.

“Along with the two days or less goal for business-permit renewals, we’re trying to get an automation system and national business-name database. We want a one-form system, we’ll have partial implementation next year and in 2018 we’ll be near full implementation,” Guillermo M. Luz, cosector chairman of the NCC, said at the sidelines of the Project Repeal Day 2. This move is in line with President Duterte’s marching order to cut bureaucratic red tape, and is expected to contribute to further easing of the process of setting up a business that is often cumbersome for small entrepreneurs.

A memorandum of agreement was recently signed by the Department of Trade and Industry and the Department of the Interior and Local Government to enable this system. There are a myriad of steps in setting up and doing business, as detailed in the World Bank’s Ease of Doing Business Report, that the NCC is aiming to reduce. The one-form system is seen to help cut down the “starting a business” step, which now takes six processes and eighth days. The official target of the Philippines is the global benchmark of three steps, the norm in highly competitive countries, such as Singapore and New Zealand.

The Ease of Doing Business Task Force met on Friday to discuss which local government units will pilot the implementation. Paying taxes as a process involves 36 steps, which the NCC aims to cut down to 11. “The reason we have 36 steps is you have monthly submission for SSS [Social Security System], PhilHealth [Philippine Health Insurance Corp.] and Pag-IBIG [Home Development Mutual Fund], and quarterly and annually for the BIR. Automating these will reduce the burden. Eventually, we can bring that down to the neighborhood of 10,” Luz added. Meanwhile, the NCC’s work plan

for 2017 also includes planning to estimate the total cost of compliance of businesses, to show the possible savings that can be accrued if red tape is reduced. Luz said the NCC has secured a technical assistance grant from the British government to learn the standard-cost model to compute the cost. “We’ll put a peso figure on it. We’ll see first how many days and how many people comply with a regulation and try to put a cost to it in terms of transportation and paperwork,” he added. “We’ll train every agency to learn this standardcost model, and we’ll get this started around February of next year.”

Atienza airport to see ₧1-B rehab ahead of $20-B Sangley project–Lim

olar Group-led All-Asia Resources & Reclamation Corp. is ready to shell out P1 billion to rehabilitate the Danilo Atienza Airport, a military airbase in Cavite, to support the existing air hub in Manila while a new and larger facility is being constructed nearby. All-Asia Resources Vice Chairman Edmundo Lim said over lunch on Friday his group plans to develop the military airbase into a com-

mercial airport for low-cost carriers to further decongest the Ninoy Aquino International Airport (Naia) while its replacement is being built. “The total investment needed for the airport rehab is P1 billion. In less than a year, we can fix that up,” he said. “It is an unsolicited proposal that will complement our Sangley offer.” Currently, the P1-billion proposal is with the National Eco-

nomic and Development Authority (Neda) Board, chaired by President Duterte. It was submitted in August. Lim said once the airport has been rehabilitated, it can accommodate A320 jets generally used by low-cost carriers. It can also be used as a hub for private aircraft. He added that traffic potential at Danilo Atienza Airbase has been estimated to grow from 60,000 passengers in the first year of op-

eration to approximately 1.8 million passengers in a decade. When approved, the deal will undergo a Swiss challenge, which gives other parties the chance to submit a better proposal. The original proponent, meanwhile, has the right to match the offer. A ll-Asia, controlled by the Tieng family, has partnered with Belle Corp., part of Henry Sy’s SM Group and China Communications Construction Co., to invest in a

$20-billion airport in Sangley that will replace the aging the Ninoy Aquino International Airport in Manila. Its plan involves the reclamation of 2,500 hectares of land near a naval and air base at Sangley Point. The project includes a new airport for up to 90 million passengers per year. The existing Naia airport will be replaced by new urban development. According to a study conducted by Danish consulting engineering

company Ramboll Group, the new airport, when built, will have two parallel runways to secure future capacity, three terminal spaces and a reserved space for cargo and maintenance facilities. Naval Station Sangley Point, surrounded by Manila Bay and occupying the northern portion of the Cavite City peninsula, was a former communication and hospital facility of the United States Navy. Lorenz S. Marasigan

Economy

A4 Monday, December 12, 2016 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

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Ethanol output to hit 322M liters in 2017 By Jasper Emmanuel Y. Arcalas

@jearcalas

he country’s bioethanol output could expand to 322 million liters in 2017, as two new plants will begin operations next year, according to the Sugar Regulatory Administration (SRA). The SRA said local bioethanol output will be boosted by ProGreen AgriCorp. Inc., a wholly owned subsidiary of Emperador Distillery Inc. and Cavite Biofuels Producers Inc. “So we have two bioethanol producers that will come on stream and their combined production capacity is 60 million [liters]. Total production capacity could reach 322 million [liters] next year,” SRA Policy and Planning Manager Rosemarie Gumera told reporters in an interview recently. Despite the projected increase in output, Gumera said the local distillers would only be able to supply less than half of the mandated ethanol requirement. “Because we have a shortage in feedstock, local distillers may only be able to supply less than 50 percent of the mandated requirement,” said the SRA official, adding that the agency has yet to come up with an estimate of the mandated requirement for 2017.

Gumera said the country’s total bioethanol output this year could reach at least 220 million liters, lower than the mandated 570 million liters bioethanol required by the Department of Energy (DOE). “As of September, [production] is 177 million liters but I estimated that it will reach no less than 220 million liters by the end of this year,” she said. Under the Biofuels Act of 2006, all liquid fuels for motors and engines sold in the Philippines should contain locally sourced biofuel components. Oil companies were required to sell gasoline with at least 10-percent ethanol blend. Oil companies, however, find it difficult to comply with the provisions of the law due to the lack of locally produced ethanol. However, oil companies are allowed to import if the local industry could not supply the total mandated ethanol requirement, Gumera said. There are currently eight bioethanol producers in the country: Abso-

lut Distillery, Leyte Agri Corp., Far East Alcohol Corp., Universal Robina Corp., Balayan Distillery Inc., Green Futures Innovation Inc., San Carlos Bioenergy Inc., Kooll Co. Inc. and Roxol Bioenergy Corp. Distillers use sugar cane as feed stock to produce ethanol. Gumera, however, said the shortage in feed stock has made it difficult for distillers to produce the local requirement. Last year the country’s total bioethanol requirement was at 522 million liters, but output reached only 168 million liters. “Although our existing capacity of existing plants today is at 282 million liters, we were not able to supply the demand of 522 million liters in 2015,” Gumera said. The US Department of Agriculture’s Foreign Agriculture Service (FAS) in Manila projected that Philippine ethanol output would increase this year and next year. Based on the FAS Global Agriculture Information Network (GAIN) report published in mid-August, Philippine ethanol output this year could reach 266 million liters while production in 2017 may expand to as much as 296 million liters. “This is premised on an optimistic capacity-utilization rate of above 90 percent for 2016 and 2017. As a result, imports are projected to decline through 2017,” the report read. The Gain report noted that imports are expected to decline to 281 million liters this year from 311 million liters in 2015. Imports in 2017 could go down further to 278 million liters.

Higher infra spending to boost manufacturing sector—Pernia By Cai U. Ordinario

@cuo_bm

igher infrastructure spending by the government and its efforts to help industries grow will allow the manufacturing sector to flourish, according to the National Economic and Development Authority (Neda). In a statement, Socioeconomic Planning Secretary and Neda Director General Ernesto M. Pernia said higher infrastructure spending will improve producer’s access to local and international markets. “With the Duterte administration’s commitment to fast-track implementation of infrastructure projects and programs, construction-related manufactures will be a major contributor to the growth of the sector,” Pernia said. The Neda chief said government efforts must be geared toward improving the business climate. He said this can be done via the industrial strategy of of the Department of Trade and Industry. Pernia said this strategy has the potential to generate more employment and encourage entrepreneurship nationwide. This will also help boost the country’s

PERNIA: “With the Duterte administration’s commitment to fast-track implementation of infrastructure projects and programs, construction-related manufactures will be a major contributor to the growth of the sector.”

competitiveness in the global marketplace by creating new products and reaching new markets. “To raise the local industries’ competitiveness in the increasingly integrated global economy, we need to increase both public and private investments in research and development. This will surely help in the exploration and development of new products, processes and markets,” Pernia said. Last Friday the Philippine Statistics Authority (PSA) said the volume of factory output rose by 8.4 percent in October 2016, compared with a minimal increase of 1.5 percent during the same month of last year.

The value of manufacturing output, meanwhile, also expanded by 4.3 percent, a turnaround from the 6.2-percent decline in the same period last year. For consumer goods, the food subsector recorded double-digit growth in October, with 14.3-percent and 16.8-percent growth rates in volume and value of production, respectively. These are reversals from the -14.7-percent and -14.9percent contraction last year. For intermediate goods, the petroleum products subsector continued to strongly recover with growth rates of 37 percent and 29 percent in volume and value production, also sharp reversals from the -21.7 percent and -35.1 percent recorded in October 2015. For capital goods, transport equipment subsector also posted 19.4-percent and 17.7-percent growth rates in volume and value of production, which are improvements from last year’s 6.3 percent and 7.5-percent growth rates. Nonelectrical machinery subsector also grew by 24.4 percent and 8.8 percent in volume and value of production, a turnaround from last year’s -2.6 percent and -1.4 percent.

Agriculture/Commodities BusinessMirror

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Editor: Jennifer A. Ng • Monday, December 12, 2016 A5

PHL eyes $250-M earnings from cacao exports

By Manuel T. Cayon Mindanao Bureau Chief

AVAO CITY—The Duterte administration has maintained the target of generating an additional $250 million in export receipts from cacao by 2022, under a blueprint for hiking the local production of the commodity. Under the cacao road map, the Philippine Center for Postharvest Development and Mechanization (PhilMech) said the government is targeting to plant 1 million cacao trees annually until 2022. “At least 100,000 metric tons [MT] of quality cacao beans would be produced by then, earning for 100,000 cacao farmers an additional income of P130,000 per hectare per year,” said Dr. Dioniso G. Advincula, executive director of PhilMech. “We would also be seeing additional export earnings of at least $250 million,” Advincula added. PhilMech said this is based on the scenario the Philippines would have at least 50 million cacao trees producing 2 kilograms of beans by 2022.

The attached agency of the D e p a r t me nt o f A g r i c u lt u re (DA) sa id it intends to help fa r mers t he product ion t a r get by providing them with the necessary equipment. The PhilMech official noted that cacao is not considered as one of the top export crops of the Philippines. The Philippine Statistics Authority (PSA) listed only abaca, coconut, coffee, rubber, sugarcane and tobacco as among the top nonfood and industrial crops of the country. Advincula said cacao was already included in the list of highvalue cash crops for development due to its “high potential for income both for the farmers and the country.” Industr y leaders, including those in the Cacao Industry De-

velopment Association of Mindanao Inc. (Cidami), said the Philippines should position itself as a reliable supplier of the commodity, given the “severe shortage” of cacao. According to government data, the Philippines was able to produce only 10,000 MT of cacao beans in 2013. To raise output to 100,000 MT a year, the road map calls for opening up 150,000 hectares of farms for cacao or expand plantations by 17,000 hectares annually. Advincula said the plan would require “increase in production level, expand production areas, move up the value chain, strengthen ma rket presence t hrough branding, and level up quality standard.” He said PhilMech would address the common problems in postharvest processing of beans, such as the high drying costs and inefficient drying technologies and facilities; antiquated and inefficient handling, storage, processing facilities and practices; and the low quality of tablea and other chocolate products. The agency, based in Nueva Ecija, said the government has developed biological control of the vascular streak disease and black pod rot. Philmech has also come up with the formulation for vinegar, wine, soft drinks and ethanol using cacao drippings and a machine to generate briquettes for the discarded pods.

Crop insurance for banana farmers not sustainable–Pids By Cai U. Ordinario @cuo_bm

he current crop insurance available for banana farmers is unsustainable due to its low coverage, according to a study released by the Philippine Institute for Development Studies (Pids). In a study, titled Impact Evaluation of Banana Insurance Program of the Philippine Crop Insurance Corp. (PCIC) in the Davao Region, researchers found that only 55 percent of the cost of banana production is covered by the government’s crop insurance. “PCIC insurance, at its present coverage level, is not sufficient to create impact on stabilizing income of banana farmers hit by shocks,” the study stated. “Without the subsidy of the government, and status quo on coverage and premium rate, crop insurance in the country will not be sustained especially in the case of banana,” it added. Apart from the low coverage, the PCIC insurance offering for banana growers has a low penetration rate among farmers due to lack of information.

The study said this may be due to the lack of PCIC personnel in the Davao region. The researchers found that PCIC only has 11 regular personnel and 25 job orders covering seven provinces in the region. The researchers recommended that satellite offices must be created in municipalities to make crop insurance for banana farmers. “It is encouraged to improve information and education campaign to encourage more farmers to avail [themselves] the insurance packages. Tarpaulin containing PCIC packages should be posted in strategic location in every MAO [Municipal Agriculture Office]/ FITS [farmers’ information and technology services] Centers,” the study read. The lack of information also affect the willingness of banana farmers to pay for the crop insurance. The research found that on the

average, for a maximum coverage of P300,000 per hectare, those willing to pay for crop insurance will only shell out P1,278.87, instead of the annual premium of P10,500. Those who are not willing to pay P3,000 for the same maximum coverage are only willing to pay P421.19 annually. “Willingness to pay of crop insurance premium for a maximum coverage of P300,000 per hectare is very low among banana farmers,” the study stated. “The reliance of farmers to government subsidy entails a future problem on the sustainability of PCIC,” it added. The insurance cover or sum insured for banana farmers are the cost of production inputs as agreed upon by PCIC and the insured. This includes a portion of the value of the expected yield but it should not exceed 120 percent of the cost of production inputs. The premium rate ranges from 2 percent to 7 percent of the total sum insured, subject to deductible and coinsurance provisions. Those under the premium subsidy by the government automatically have a 3-percent premium rate.

The Nation BusinessMirror

A6 Monday, December 12, 2016 • Editor: Dionisio L. Pelayo

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Legislator asks PSA to explain deal with US computer company

By Marvyn N. Benaning | Correspondent

LEGISLATOR on Sunday asked the Philippine Statistics Authority (PSA) why it allowed the US company Unisys to win the P1.59-billion contract for the computerization of the civil registry system when it was the sole bidder.

Party-list Rep. Carlos Isagani Zarate of Bayan Muna, a lawyer, explained that a sole bidder is a contradiction in terms since a single company cannot compete against itself but the PSA declared it as the sole complying bidder. Zarate also questioned PSA about its failure to discipline Unisys, which had failed to comply with the original contract provisions for 12 years. The Civil Registry System-Information Technology Project Phase 2 (ITCP2) deal between the PSA and Unisys Corp. will be the second contract for the company, which also controlled the first phase of the project under the defunct National Statistics Office (NSO). Earlier, Zarate filed Resolution 592 asking the House of Representatives to inquire into the P1.59-billion contract and urging the House Committee on Government Enterprises and Privatization to look into the deal, which will be in effect for the next 12 years. Resolution 592 said “the PSA, with their failure to sanction Unisys, even allowed the latter to se-

cure two contract extensions that ran from 2012 up to 2015, apparently with the go-signal of a higher authority. The PSA, in its reply to the Commission on Audit [COA], did not name who specifically that ‘higher authority’ was. Clearly, this project was so lopsided in favor of Unisys, evident with the fact that Unisys was even the sole bidder of the project.” The resolution also argued that the COA itself had “raised apprehension over a foreign company having full and unbridled control over the country’s civil registry system, as this would surely be compromising to public interest and security. The COA, in its 2004 Sectoral Performance Audit of the Civil Registry System project, noted the government’s inadequacy of controls to protect the interest of the government and the public.” It also raised the possibility that “having foreign companies Unisys and PriceWaterhouseCoopers [who shall supervise the project] control the country’s civil registry system would permit them to collect and retrieve stockpile of information

Unisys Corp. headquarter in Blue Bell, Pennsylvania

about Filipino citizens and share the same with their other clients, such as various branches of the US armed services and possibly, US intelligence agencies. Unisys is in a rolling contract with the US government. “What is more alarming is that the PSA could not even disclose safeguarding measures to monitor how troves of information would be kept and managed by these foreign companies,” Zarate said. Resolution 592 said “it is imperative that the PSA finally take

over the operations of the country’s civil registry system, in compliance with the original contract and impose sanctions to Unisys for its violations therein.” The resolution also noted that Unisys had committed gross violations of the contract provisions for the first phase of the project, and this was confirmed by the COA in its 2005 and 2015 reports. Zarate warned that, with Unisys having “unbridled control” of the civil registry system, the US government can easily have undiminished

access to all civil documents of more than 100 million Filipinos. He said on October 3 Unisys executive Juan Ingersol Castro and PSA Director General Lisa Grace Bersales signed the concession agreement for under the PublicPrivate Partnership (PPP) Program. “The recent deal, in sheer disregard of the said audit, still proceeded with Unisys, given again full control of all civil registry documents nationwide and government getting a mere 45.5 percent of the revenues,” Zarate said, while

Unisys secured the rest despite the original provision of the contract that calls for the government to have 58.7-percent share. “The COA, in its audit, castigated both the PSA [then the NSO] and Unisys for violating the original contract. It was stipulated in the original 12-year contract (CY 20002012) that Unisys shall transfer operations and control of the civil registry system to the PSA five years before the contract’s expiry in 2012, but Unisys did not abide. Perplexingly, the PSA did not even muster any initiative to take over controlling the civil registry system, even failing to impose sanctions to Unisys despite the latter’s violation of its contractual obligations,” Resolution 592 said. “This seeming intention of Unisys not to hand over the civil registry system was already evident in the early years of the project when the COA, in its 2004 Sectoral Audit of the CRS-ITP 1, observed that Unisys had not trained the PSA personnel to operate the system. Moreover, the PSA has neither possession nor took part in the monitoring of records on actual purchases and inventory of items to be turned over to the PSA. In fact, this isolation of the PSA from the implementation of NSO Serbilis Centers eventually led to the anomalous contract extension of Unisys,” the resolution added. The same resolution stressed that “had the PSA taken over control of the country’s civil registry system, the government would not have needed the rollout of CRS-ITP 2, thus saving government billions of pesos. Moreover, revenues would have been solely realized by the government.”

Group to govt: Stay focused Cancer victims: Don’t smoke at Christmas parties on power retail competition

ONSUMER welfare is getting sidetracked in the ongoing controversy involving the Energy Regulatory Commission (ERC), which is in danger of being abolished as announced by Congress. Action for Consumerism and Transparency in Nation-Building (Action), a non-governmental consumer advocate, warned that the brouhaha might further delay the full implementation of retail competition and open access (RCOA) in the electric-power industry. “Who benefits from this turmoil? I am sure it is not the consumer because every time RCOA is delayed, they end up paying the price,” said Jake Silo, Action spokesman. He explained that before the controversy erupted last month, the industry had finally gained momentum on RCOA, which suffered years of delay until the current ERC leadership set it in motion earlier this year, after 15 years in the making. In May the ERC promulgated a definite timeline for mandatory contestability and new safeguards against collusion. There was an attempt to derail these twin moves, but the Supreme Court (SC) temporarily set aside an injunction issued by the Regional Trial Court in Pasig City, citing the grave and irreparable injury it posed on the energy industry, the Philippine economy and electricity end-users. Issued in October, the SC’s order paved the way for implementation of mandatory contestability by February next year. If it had not been challenged, mandatory contestability would have been implementable by December 26. Mandatory contestability sets the stage for RCOA by freeing customers with peak demand of 1 megawatt from the captive market, to enter into contracts with retail electricity suppliers of their choice. This is currently being implemented on a voluntary basis at a threshold of 750 kilowatts, largely among industrial consumers, such as firms in export processing zones. The February 2017 timeline for mandatory contestability kickstarts a process that will gradually free more consumers from the

captive market, until the power to choose reaches the household level. “But now everything is up in the air all over again, because the talk has shifted to abolishing the regulator,” Silo said. “Before our lawmakers jump on the ‘Abolish ERC’ bandwagon, they might do well to consider this: In a multibillionpeso industry, why is the world turning on the anxieties of one person over a 490,000-peso contract that wasn’t even awarded? What is the net effect of abolishing the ERC or even contemplating on it at this critical juncture? These are the questions begging for answers.” Action called on lawmakers to ensure the full implementation of RCOA, which culminates wide-ranging reforms begun 15 years ago with the enactment of the Electric Power Industry Reform Act (Epira) of 2001, or the Epira law. To recall, the Philippine economy teetered on a precipice following the Asian financial crisis of 1997, among the worst impacts of which was the ballooning of the National Power Corp.’s (Napocor) debts. Then a government monopoly providing generation, transmission and distribution services, Napocor had to be bailed out with subsidies that electricity end-users eventually paid for. The resulting backlash was the impetus for the Epira, which created the ERC as an independent body to ensure market competition in the electricpower industry. All over the world, whether in developed or developing economies, it is the certainty of market competition and a level playing field that drives consumer costs down. Making this happen in the Philippines has been an arduous task of incrementally building an ecosystem conducive to market competition. Continuity is critical in this painstaking process. “If the government and lawmakers are serious about their pledge to free consumers from the burden of high-electricity costs, then it is incumbent on them to consider very carefully the ramifications of disrupting energy sector reforms at this critical juncture. The Filipino people deserve no less,” Silo added.

EEP your Christmas parties smoke-free. This was the appeal of New Vois Association of the Philippines (Nvap) President Emer Rojas saying spending Christmas parties smoke-free does not only adhere to having a healthy lifestyle, but will also shield family members against the deadly secondhand smoke. “As we go to our string of Christmas get-togethers and parties, let us keep them smoke-free. It will not only be a good gift for ourselves to maintain good health, but also show care for your loved ones by protecting them from secondhand smoke,” Rojas said.

He pointed how such gatherings are usually conducive for smoking cigarettes owing to the presence of food and drinks and the prolonged periods of conversation with relatives and friends. “Having a healthy and smokefree Christmas party will not rob us of the joy in being with our loved ones and sharing food, drinks and stories with them,” Rojas said. Secondhand smoke is defined as those that are inhaled involuntarily from cigarettes being smoked by others. Rojas said having the promised executive order (EO) for a smoke-free Philippines would

have been a great tool in discouraging people from smoking during Christmas parties. “We would have hoped that the EO is already in place by this time. It would have forced people to adopt smoke-free Christmas parties anywhere in the country,” the cancer survivor-turned-health advocate said. To note, President Duterte has yet to sign the EO that will outlaw smoking in all public places nationw ide just as he promised in during the presidential campaign. Without the EO, Rojas appealed to law enforcers to instead

strictly implement provisions of the Tobacco Regulation Act of 2003 regarding smoking ban in public places. “The law clearly provides that smoking in public places are prohibited, thereby, making it illegal to puff cigarettes in establishments, where most of Christmas gatherings take place,” Rojas said. Data from the Tobacco Atlas show that about 15,570,000 adults continue to use tobacco each day in the Philippines. Records also show that an estimated 24 million Filipinos are exposed to tobacco smoke every day. Claudeth Mocon-Ciriaco

Tesda launches crackdown Death penalty seen to obstruct justice on fake training certificates By Claudeth Mocon-Ciriaco Correspondent

LARMED by reports of alleged fake certificates of competency being distributed nationwide, the Technical Education and Skills Development Authority (Tesda) asked the National Bureau of Investigation (NBI) to investigate the syndicate behind the illegal activivity. Tesda Director General Guiling A. Mamondiong expressed concern over the production of fake national certificate (NC) and certificate of competency (COC), which are only given by the government agency. The distribution of fake certificates nationwide besmirches the image and credibility of Tesda, he said. Reports reaching Tesda said a syndicate is behind the production of fake certificates, which are being sold to the public, who eventually use them in applying for jobs. Mamondiong also warned the

public against the distribution of fake certificates and those who patronize them, saying it is against the law. Charges will be filed against those who will be arrested if they will be found guilty of their involvement in the fake production of Tesda certificates. Mamondiong also ordered provincial and regional Tesda offices to conduct a similar investigation on fake certificates. The NC is given to those who finish a course or pass the Tesda assessment after they have completed their skills training, while the COC is given to those who cannot acquire the NC. Mamondiong was surprised about the fake certificates because the material used in the production is a security paper from the Bangko Sentral ng Pilipinas. The Tesda chief also encouraged the public to inform the agency of anyone involve in the production of fake certificates, so that they could arrest them and file charges.

HE revival of capital punishment is bound to set back the government’s efforts to bring to justice criminals who have fled abroad, House Senior Deputy Minority Leader Lito Atienza warned on Sunday. “Once Congress restores the death penalty, we could lose the ability to bring home and prosecute drug lords, plunderers, embezzlers and even murderers who have slipped out of the country,” Atienza said. Many countries around the world are rightfully repulsed by capital punishment, and would refuse to send fugitives back tothe Philippines if they could face trial here for felonies that may be punished by death sentences, according to Atienza. “We may have situations wherein Filipinos with arrest warrants issued by Philippine courts are captured overseas, but foreign governments won’t repatriate the escapees on grounds they could be executed here after trial,” Atienza said. Atienza cited the case of China, which adheres to the death penalty, and which he said has been unable to put on trial corrupt Chinese officials who stole huge amounts of public funds and bolted to Europe, Australia,

Canada and other countries. The opposition leader said many of the 102 countries that reject the death penalty are signatories to international treaties that categorically forbid executions and any form of cruel, inhuman or degrading punishment. “These countries consider it their duty to protect the right to life of every human being. Their governments won’t expose people, regardless of citizenship or race, to the threat of potential death verdicts,” Atienza pointed out. T he Hou se Com m it tee on Justice, voting 12-6 with one abstention, approved last week a bill reinstating death verdicts for heinous offenses, such as drug trafficking, murder, rape, robbery, carjacking, kidnapping, bribery, plunder, parricide, infanticide, destructive arson, piracy and treason. The bill is expected to be submitted for plenary approval shortly, in accordance with President Duterte’s wish to put 50 convicts to death every month to help deter crime. But Atienza said the death penalty “actually does not serve any purpose that is not already being served by the punishment of life imprisonment.” Jovee Marie N. dela Cruz

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AseanMonday BusinessMirror

Editor: Max V. de Leon • Monday, December 12, 2016 A7

Asia trade pact gains traction in Jakarta talks countries, such as Australia and Japan, would cover almost half the world’s population and 30 percent of the global economy. Indonesian Trade Minister Enggartiasto Lukita told China’s official Xinhua News Agency on the sidelines of the RCEP talks that negotiations on goods, services and investment sectors were intensifying, with major disagreements persisting. Not all countries are giving up on the TPP, yet. Australia is pushing ahead with ratifying the pact, Ciobo said in an interview, while Japan and Vietnam have signaled they are proceeding. Vietnam Prime Minister Nguyen Xuan Phuc warned on Thursday of the growing risk of

T Bloomberg NEWS

he US’s imminent exit from a massive Asia-Pacific trade deal has renewed urgency among nations huddled in Indonesia to hammer out a separate, China-backed pact. The 16 nations seeking the Regional Comprehensive Economic Partnership (RCEP) accelerated their efforts during talks this week as rising protectionism threatens a system that has lifted hundreds of millions of Asians out of poverty. Negotiators said they neared agreement on protections and assistance related to small- and medium-sized enterprises, and also made progress on competition policy. Matters, such as intellectual property rights, as well as trade in goods and services, remain unresolved. The next talks will be held in Japan in February. “The Asian region generally appreciates that trade and engagement with the world is crucial to higher living standards in the future,” Australian Trade Minister Steve Ciobo said in Jakarta on Wednesday, as his country and Indonesia push ahead

with a bilateral trade pact. “That’s a point of contrast in some respects to other parts of the world, where they have adopted a more protectionist approach.” Focus on the RCEP, which was launched four years ago and could potentially create the world’s biggest free-trade bloc, has sharpened as US President-elect Donald J. Trump prepares to quit the Trans-Pacific Partnership (TPP). Trump’s elevation has seen China become an unlikely champion of trade liberalization at a time other protectionist headwinds are blowing: The World Trade Organization (WTO) projects the slowest growth in trade since the global financial crisis, while the UK’s decision to leave the European Union has added to the uncertainty. The TPP was the economic component of the Obama administration’s effort to assert US influence

in the region amid China’s military and economic rise. For China, which is a party to the RCEP but not the TPP, Trump’s election has created an opportunity to push ahead with an Asia-focused agreement that the US is not involved in. Chinese President Xi Jinping cited the deal last month among the measures needed to integrate his country into the global economy. A Ministry of Commerce spokesman said November 24 that China wanted to seal the RCEP deal as soon as possible. “This is an opportunity for RCEP members to drive the process,” said Carlos Kuriyama, a senior trade analyst with the Asia-Pacific Economic Cooperation secretariat, giving his personnel view. “If TPP doesn’t go through, they can try and cover that hole.”

Supply chains

The RCEP aims to levy tariffs and rules on the region’s supply chains, liberalize investment and introduce dispute-resolution mechanisms. Unlike the TPP, it wouldn’t require members to take steps to protect labor rights or improve environmental standards. The deal, which includes Southeast Asian nations plus

Thai Navy shows off technology to fight fishing abuses

AMUT SAKHON, Thailand—Thailand’s navy on Friday showed off new technology to monitor fishing boats in a renewed effort to crack down on illegal fishing, forced labor and corruption in the seafood industry. New equipment the navy has been testing includes a GPS tracking system to monitor fishing vessels, a central database and a scanner for officials to check documents. The system, demonstrated to reporters, won’t fully be in place until April, but outside groups are already skeptical it will achieve what it’s set out to do unless more human enforcement is put into place. Thailand has been under pressure from the European Union (EU) after revelations that it relied heavily on forced labor, and is facing a potential total EU ban on seafood imports unless

it reforms its fishing industry. “We’re doing this to increase the effectiveness of inspection, because putting humans in the loop has caused some errors in the past,” said Cdr. Piyanan Kaewmanee, head of a Thai navy group that oversees illegal fishing, who pointed to corrupt officials as a major issue. “We can ensure that our workers are accounted for, and aren’t lost at sea or transferred from ship to ship.” New on Friday was a handheld scanner that can read crew identification and other papers to make sure workers are documented and the fishing gear is licensed. During the inspection demonstration, workers crouched and huddled together, holding up green identification cards, as Thai navy sailors boarded their ship, looked through documents, and patted down workers.

The scanners will be integrated into a vessel monitoring system, which will keep track of the location of all Thai fishing vessels using GPS technology and a central database. The monitoring improvements follow international pressure after an Associated Press report last year revealed that Thai boats were using slaves from countries, including Myanmar, Cambodia and Laos, to catch fish, putting a spotlight on illegal practices in the industry including unregistered boats and unsustainable fishing. In April 2015 the EU gave Thailand a “yellow card” on its fishing exports, warning the country that it could face a total ban if it didn’t clean up its act— prompting Thai Prime Minister Prayuth Chan-ocha to exercise executive powers to create a Command Center for Combating Illegal Fishing soon after. AP

a return to protectionism, clouding the outlook for an economy that was cited by economists as one of the biggest beneficiaries of the TPP. “The world and Asean region are facing big challenges in various areas, including security, finance, climate change and risk of returning protectionism,” Phuc said at the Bloomberg Asean Business Summit in Hanoi. The renewed push to get the RCEP across the line comes in the wake of the WTO’s downgrade of this year’s global trade growth forecast to 1.7 percent from 2.8 percent. Next year’s expansion was was seen as ranging from 1.8 percent to 3.1 percent. Negotiators will meet next in Kobe, where they hope to achieve

progress simplifying the current “noodle bowl” of overlapping freetrade agreements between the Association of Southeast Asian Nations and individual countries. One risk would be that countries decide they want to incorporate elements of the TPP into the talks, slowing progress, Asia-Pacific Economic Cooperation’s Kuriyama said. The Jakarta talks are “building a foundation to enter the next step to the finish line,” said Iman Pambagyo, director general for international trade negotiation at Indonesia’s Trade Ministry. All parties must be prepared to “put something on the table” for the talks to move forward, he said. Bloomberg News

The World BusinessMirror

Monday, December 12, 2016 • Editor: Lyn Resurreccion

Trump taps biz execs to top posts Offers Exxon’s Tillerson to lead State Department

with “high confidence” that Russia sought to influence the US election on behalf of the Republican, an assessment Trump has rejected. The president-elect’s deliberations over his pick to lead the State Department—particularly his consideration of Mitt Romney for the post—have exposed anew the deep rivalries within Trump’s team. Campaign manager Kellyanne Conway warned publicly that Trump supporters would feel betrayed if he were to choose a fierce rival for the post, especially given that some loyal allies—most notably former New York City Mayor Rudy Giuliani—also wanted the job. Giuliani officially took himself out of consideration for the Cabinet on Friday, though his standing had already been diminished. In addition to Romney, Trump has also been considering Tennessee Sen. Bob Corker and John Bolton, the former US ambassador to the United Nations. Trump’s team has discussed bringing Bolton on as a No. 2 to Tillerson. The people who have spoken to Trump and the transition team about the State Department decision insisted on anonymity because they were not authorized to discuss the internal deliberations publicly. Internal divisions were also complicating efforts to set up Trump’s senior White House staff. Longtime aides are fearful of being left out of the mix as incoming White House

Exxon Mobil CEO Rex Tillerson delivers remarks on the release of a report by the National Petroleum Council on oil drilling in the Arctic in Washington in March 2015. AP

chief of staff Reince Priebus builds out the West Wing team. Trump had given Priebus wide authority in the decision-making over White House jobs. But four people involved in the transition said Trump was irritated after learning of his loyalists’ frustrations with Priebus in recent press reports. Trump made his displeasure clear to Priebus, who has begun outreach to some of the people who worked on Trump’s campaign from the start. Two of those sources said Trump’s irritation contributed to a decision to hold off on announcing his pick to succeed Priebus at the Republican National Committee (RNC). Priebus, who is fiercely protective of the RNC, is said to back Michigan GOP chairman Ronna Romney McDaniel for the job. She appeared at Trump’s rally in Michigan on Friday night, but no announcement was made. McDaniel, who is Mitt Romney’s niece, is still likely to get the RNC job, a Trump transition official said.

Curbs to China investment risk US jobs, Wanda’s Wang says

ASHINGTON—Presidentelect Donald J. Trump moved closer to nominating Exxon Mobil CEO Rex Tillerson as his secretary of state on Saturday, a decision that would bring a business leader with close ties to Russia into the Cabinet.

Trump has privately signaled that he plans to tap Tillerson for the powerful Cabinet post, but had not formally offered him the job as of Saturday evening, according to people who have spoken with Trump and his transition team. Some advisers worry that Tillerson’s Russia connections would lead to a contentious Senate confirmation hearing and keep alive questions about Trump’s own relationship with Moscow. Trump and Tillerson met privately in New York on Saturday, their second meeting in a week. The president-elect’s transition team said an announcement was not expected over the weekend. Tillerson rose to prominence through Exxon’s Russian energy business and was awarded Russia’s Order of Friendship. He has argued against sanctions the US and European allies imposed on Russia after it annexed Crimea from Ukraine in 2014. In an interview airing on Sunday, Trump praised Tillerson as “much more than a businessman.” “He’s a world-class player,” Trump said on Fox News on Sunday. “To me, a great advantage is he knows many of the players and he knows them well. He does massive deals in Russia, he does massive deals, not for himself, for the company.” Trump’s own relationship with Russia was an issue through much of the campaign. The Central Intelligence Agency has concluded

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Priebus was among a handful of Trump advisers who traveled with him to Maryland on Saturday for the annual Army-Navy football game. The president-elect was cheered by the crowd as he joined decorated officers in private boxes at the stadium and he pumped his fist in the air a couple of times. The president-elect flew to Maryland from New York, where he’d met privately with Tillerson. Trump is said to be intrigued by the prospect of putting an international businessman at the State Department. He’s already selected others with predominantly private-sector experience to his Cabinet, including billionaire investor Wilbur Ross for Commerce. The 64-year-old Tillerson is a Texas native who joined Exxon straight out of college in 1975 and never left. Exxon also has operations in Indonesia, Azerbaijan, Chad, Equatorial Guinea and many other countries. Africa and Asia were its leading sources of oil production in 2015, ahead of the US. The company says it

has a diverse portfolio of oil-and-gas projects around the world to mitigate risks, including political ones. Tillerson has held posts in the company’s operations in both Yemen and Russia. Success in the latter post required aligning the company’s interests with that of the Russian government. Early in the company’s efforts to gain access to Russian market, Tillerson cut a deal with state-owned Rosneft. The neglected post-Soviet company didn’t have a tremendous amount to offer, but Exxon partnered with it “to be on the same side of the table,” Tillerson said, according to Private Empire, an investigative history of Exxon by reporter Steve Coll. Tillerson, who became CEO on January 1, 2006, is expected to retire in 2017. Tillerson’s heir apparent, Darren Woods, was put in place a year ago, so there would be virtually no additional disruption to Exxon’s succession plans if Tillerson were to become secretary of state. AP

ny move to curb investment by Chinese companies in the US after Donald Trump is sworn in as president could put at risk the jobs of 20,000 Americans employed by Dalian Wanda Group Co., Chairman Wang Jianlin has warned. The Chinese property and media tycoon has asked Christopher Dodd, chairman of the Motion Picture Association of America, to relay the above message to Trump, according to the transcript of a speech delivered by Wang during a forum in Beijing on Saturday. “I’ve invested over $10 billion in the US, employing over 20,000 people,” Wang said. “If something goes wrong, these 20,000-plus people might be out of jobs. Other things aside, in the film and entertainment industry, you have to understand that English-language films are relying on the Chinese market for growth.” Wanda is poised to become owner of the largest cinema chain in the US, pending AMC Entertainment Holding’s acquisition of Carmike Cinemas Inc. The Chinese conglomerate also owns movie studio Legendary Entertainment Llc. and has agreed to buy Golden Globe Awards producer Dick Clark Productions Inc. In addition, the Chinese billionaire has repeatedly expressed interest in buying one of Hollywood’s six biggest studios. The shopping spree has alarmed some US lawmakers who’ve called for more scrutiny over Chinese takeovers, including deals, such as those made by Wanda. “This shows Wanda has grown more influential in the US, otherwise [the lawmakers] wouldn’t have named us,” Wang said. “We will watch for Mr. Trump’s attitude toward Chinese entertainment companies.” Bloomberg News

Trump offers Goldman’s Cohn National Economic Council job Brazil’s Temer cited 44 times in corruption testimony

ohn, who has spent more than 25 years at the investment bank, has been asked to head the National Economic Council (NEC), among the most influential panels inside the White House, helping to coordinate and develop the president’s economic program. Installing the Wall Street firm’s president would strengthen its influence in Washington while clearing the way for the next generation of Goldman Sachs leaders. NBC reported earlier that Trump had offered him the job. Cohn didn’t immediately respond to phone and email messages seeking comment. Jake Siewert, a Goldman Sachs spokesman, declined to comment. Cohn, 56, would be the third and most senior Goldman Sachs alumnus to take a prominent role in the incoming administration, despite the presidentelect’s fierce criticism of Wall Street and the bank, in particular, on the campaign trail. Cohn became Goldman Sachs’s copresident in 2006, and later sole president, holding an office that, in recent decades, has been used to groom the next CEO. Both Blankfein and his predecessor, Henry Paulson, served as presidents of the company before ascending to the top spot. But after 10 years there, Blankfein has signaled no intention of stepping down, leaving Cohn to explore other opportunities.

President’s objectives

The NEC was set up as a counterpart to the president’s National Security Council. The group is comprised of representatives of various executive

Goldman Sachs COO Gary Cohn talks on his phone as he waits for the start of a meeting with President-elect Donald J. Trump at Trump Tower in New York. Trump is expected to pick Cohn to lead the White House National Economic Council, according to two people informed of the decision. AP

branch departments and is overseen by the director. The director is expected to represent the president’s interests and serve as an honest broker among competing agencies and departments to carry out the president’s economic objectives. Some directors have spearheaded top presidential initiatives. The position isn’t subject to confirmation by the Senate. Past directors include two former Goldman Sachs leaders, Robert Rubin and Stephen Friedman. Rubin went on to become Treasury secretary. His deputy and successor in that post, Larry Summers, later led the council, as well. Its current leader, Jeff Zients, is a former management consultant. As Blankfein’s top lieutenant, the 6-foot-3-inch Cohn has long been seen as fiercely loyal to Goldman Sachs’s CEO, serving as his eyes and ears and, sometimes, as his enforcer.

For years, Cohn was known to walk the bank’s floors, meeting with business heads, as well as clients and investors. By 2013, he estimated he spoke to about 400 CEOs annually. While colleagues and customers once described his style as abrasive, Cohn has increasingly served as a public emissary of the bank in recent years, speaking on television and at conferences about the global economy, financial regulation and the future of Wall Street. He has chided US officials for imposing onerous rules on banks in the wake of the financial crisis, arguing that they hamper growth. “I seem to be in Washington every week, trying to explain to them the unintended consequences of over-regulation,” he told an audience last year at the Jack Welch College of Business at Sacred Heart University in Connecticut. He called unemployment figures published during President Barack

Obama’s term “very, very fictitious”, because they exclude many people who’ve given up looking for jobs. He’s criticized the tendency of central banks to provide frequent guidance, saying they end up boxing themselves into situations where they either have to take steps as telegraphed or roil markets. And he’s said China should play an important role in global growth. Trump hasn’t shied from surrounding himself with billionaires and bankers after a campaign that pledged to rein in Wall Street. The president-elect named former Goldman Sachs partner Steven Mnuchin to run the Treasury, and one of his first acts after winning the election was to select another alumnus of the firm, Stephen Bannon, as chief strategist. He also picked billionaire investor Wilbur Ross to lead the Commerce Department. A registered Democrat, Cohn didn’t make public pronouncements about the presidential candidates during their campaigns. He has, however, been a prolific donor to candidates in both parties. He contributed more than $275,000 to Democrats, including donations to Obama and Hillary Clinton in their race for the Democratic presidential nomination in 2008, according to Federal Election Commission records. He’s also donated more than $225,000 to Republicans, with most of the money coming in recent years. In 2015 he sent cash to Kelly Ayotte’s Senate campaign in New Hampshire and Tom Cotton’s in Arkansas. He donated to Florida Sen. Marco Rubio’s campaign for the Republican presidential nomination but not to Trump’s, records show. Bloomberg News

IO DE JANEIRO—A former executive at a mega-construction company cited Brazilian President Michel Temer 44 times during testimony to federal prosecutors in a corruption probe, making accusations of illegal campaign financing that put his embattled administration at an even bigger risk of ending within months. The 82 pages of testimony by former Odebrecht Director Claudio Melo Filho was obtained by The Associated Press on Saturday. If his allegations that Temer illegally financed his campaign are confirmed by Brazil’s top electoral court next year, the president will be removed and Congress will pick a successor. Melo Filho, one of the many executives who signed plea-bargain deals in the corruption investigation at state-run oil giant Petrobras, made accusations against Temer, senior Cabinet members and close aides and allies of the president. About 100 business executives and politicians have already been arrested or are under investigation in Brazil for allegedly overcharging contracts with Petrobras and other state-run companies to pay for bribes and election campaigns. In the most damaging of Melo Filho’s accusations against Temer, the former executive told prosecutors that in 2014 his colleagues at Odebrecht agreed to illegally contribute some $3 million to finance Temer’s party’s election campaign. At the time, Temer was both Brazil’s vice president and chairman of the centrist Brazilian Democratic Movement Party, known as the PMDB. Melo Filho said he took part in a dinner with Temer at the vice-presidential residence where the agreement was reached. “Michel Temer requested, directly and personally, to Marcelo [Odebrecht] financial support for the PMDB campaigns in 2014,” Melo Filho told prosecutors, referring to the former CEO of the construction company. Temer, who took over Brazil’s presidency after his ally-turned-enemy Dilma Rousseff was impeached in May, issued a statement dismissing the allegations, calling them “false accusations.” The plea-bargain testimony needs to be validated by Brazil’s top court to count as evidence in the electoral-court investigation, but adversaries of Temer are already calling for his impeachment. The former Odebrecht executive said most of the $3 million was used to finance Temer’s candidate in the 2014 São Paulo state gubernatorial race, Paulo Skaf. The rest of the money, according to Melo Filho’s allegations, was channeled to the man who is now Temer’s chief of staff Eliseu Padilha. The executive also suggested that part of the money was paid in cash to Jose Yunes, another aide and close friend of Temer. AP

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Monday, December 12, 2016 A9

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Consumers haven’t felt this good about govt econ policies

Trump Bloomberg News

he US presidential election was only a month ago, but President-elect Donald J. Trump is already having a massive impact on consumers’ confidence and outlook for the future. In the preliminary reading of the University of Michigan’s (UofM) December index of sentiment, consumer confidence jumped by more than expected amid a rosier outlook for their own personal finances and their best opinion on the government’s economic policies in seven years, with unprompted mentions of an improving policy backdrop reaching an all-time high. “When asked what news they had heard of recent economic developments, more consumers spontaneously mentioned the expected positive impact of new economic policies than ever before recorded in the long history of the surveys,” the statement from Richard Curtin, director of the survey, reads. In the December preliminary release, the index that tracks’ respondents opinion of the government’s economic policies rose to its highest level since 2009. “Bottom line, this is all about Trump enthusiasm,” Peter Boockvar, chief market analyst at the Lindsey Group Llc., wrote in a note following the report. “With the rise in optimism, we’ll soon see to what extent this translates into a change in economic behavior.” Due to a strengthening job market and optimism about better economic policies laying ahead, 40 percent of those surveyed also said they are expecting to be in a better financial situation a year from now, the most in a decade. This uptick has not occurred for all demographics across the country, however.

“There were a few exceptions to the early December surge in optimism,” the UofM says. “Mainly among those with a college degree and among residents of the Northeast, although no group has adopted a pessimistic outlook for the economy.” The share of Republicans expecting the nation’s economy to get better in a year has spiked since the election—with the assumption being that the implementation of their preferred policies under the new administration will buoy growth. However, the jump in this UofM opinion of government’s economic policy index— along with a similar move in a poll from Gallup—demonstrate the extent to which partisanship can influence readings of consumer sentiment. Both of these cases reflect instances in which households’ evaluations of current conditions (as opposed to expectations) changed markedly. Of course, Trump has yet to take office, though he’s directly inserting himself into business decisions made by Corporate America. If confidence is to stay elevated, Trump will need to quickly make good on pledges to boost the nation’s economic performance after January 20. “President-elect Trump must provide early evidence of positive economic growth, as well as act to keep positive consumer expectations aligned with performance,” Curtin writes. “Either too slow growth or too high expectations represent barriers to maintaining high levels of consumer confidence.” Bloomberg News

UK 1976 crisis protagonists evoke lessons for Brexit world

falling pound. An uncertain economic backdrop. Twin budget and trade deficits. Nervous overseas investors. A government with a small majority. Feeling a sense of déjà vu? That was the picture in 1976 when Britain was forced to take a $3.9-billion bailout from the International Monetary Fund (IMF) following more than a year of pressure on sterling. While the situation isn’t as dire now, there are echoes today in the concerns about the willingness of foreign investors to keep funding a large current-account deficit as Britain prepares to leave the European Union. The world can learn parallels from financial upsets, such as Britain’s emergency loan, and people shouldn’t completely rule out a rerun of the debacle, according to Johannes Witteveen, who helped negotiate the UK loan four decades ago as managing director of the Washington-based lender. “The situation is rather different now,” the 95-year-old said in an interview in London. “But whether it will happen again nobody can tell you. It could be possible.” Witteveen’s recollections came at an event on Thursday that brought together current officials and those involved at the time. It was held to launch a book about the crisis, which culminated 40 years ago this week when James Callaghan’s Labour government agreed

to accept the IMF’s demands for deep spending cuts in return for the financial lifeline. The episode became a defining moment in British political history, marking a policy shift away from fiscal spending toward controlling inflation. Margaret Thatcher saw it as a national disgrace. It was cited in 2010 by then Chancellor of the Exchequer George Osborne as he stressed the importance of tackling a budget shortfall of 10 percent of GDP, almost double that in 1976. The author of When Britain Went Bust, King’s College London Prof. Richard Roberts, said the sharp decline in sterling this year has parallels with the market turmoil seen four decades ago. The pound fell 28 percent against the dollar during 1975 and 1976. It’s dropped 16 percent since the June 23 Brexit vote, at one point reaching a three-decade low. Partly fueling the drop are concerns about a current-account deficit running at more than 5 percent of GDP.

‘Long-term trait’

“Britain’s use of currency depreciation as an economic solution is a notable long-term trait,” Roberts said during the debate organized by the Official Monetary and Financial Institutions Forum, which published his book. “Britain appears to have an ingrained propensity for living beyond its means, rectified by

occasional adjustments. As with 1976, the recent Brexit depreciation is unlikely to be the last.” Still, another appeal for IMF assistance seems “almost inconceivable,” he said. Witteveen said if there was a bailout now, the political stakes would be far higher and opposition to any loan conditions would be fiercer than that he encountered when he led the IMF team sent to London.

Debt sensitivity

A big difference was the severe sensitivity in the 1970s about every month’s public borrowing figures and the level of sterling, according to Bernard Donoughue, who was a senior policy adviser to Callaghan. “The worries about our debt levels then were very acute and very immediate,” said Donoughue, 82. “My feeling is that other than among the very professional class that’s no longer the case. That may be dangerous.” One element that does link now and 1976 is sentiment, according to several speakers. “I personally felt the whole issue was one of confidence,” said David Owen, a minister at the Foreign Office in 1976 and later foreign secretary. More recent, “although the economic news has been remarkably better” than forecast ahead of the Brexit vote, “we shouldn’t rely on that too much,” Owen, 78, said. Bloomberg News

Japan ratifies Trans-Pacific Partnership despite Trump’s plan to withdraw

OK YO—Japanese Prime Minister Shinzo Abe won parliamentary approval on Friday for ratification of the TransPacific Partnership (TPP), despite US President-elect Donald J. Trump’s plan to withdraw from the 12-nation trade pact. Upper house lawmakers approved the TPP on Friday, heeding Abe’s calls to push ahead with it despite Trump’s rejection of the free-trade initiative championed by President Barack Obama. Abe’s ruling Liberal Democratic Party has an ample majority in both houses of parliament. Ratification of needed regulatory revisions by the Cabinet is expected soon. The market opening measures required by the trade pact are seen as a way for Abe to push through difficult reforms of the agricultural and health sectors. So far, Abe has made scant progress on a slew of

60%

The percentage of GDP the US covers in the GDP requirement of Trans-Pacific Partnership changes he has proposed to help improve Japan’s lagging productivity and competitiveness. Trump has vowed to take steps to exit the pact right after he takes office. A US withdrawal would kill the trade pact unless its terms are revised. The agreement between the dozen members requires both the US and Japan to join to attain the required 85 percent of the group’s total GDP since the US economy accounts for 60 percent of that total,

Japanese officials (from left) Economic Revitalization Minister Nobuteru Ishihara, Foreign Minister Fumio Kishida and Agriculture Minister Yuji Yamamoto bow after the Trans-Pacific Partnership was approved during a special committee at the parliament’s upper house in Tokyo on Friday. AP

and Japan less than 20 percent. After expending political capital to fight vested interests fearful of market opening and reforms likely to be required by the trade pact, Abe and other leaders in Asia have bemoaned the impending loss of the US as TPP flag bearer. “We want to carry this out and expect others will follow suit,” Abe recently told a parliamentary committee. An opposition lawmaker, Eri Tokunaga, derided Abe’s insistence on going ahead with ratification as “egocentric”. “There is basically zero chance of this coming into effect since the next president, Trump, plans to leave it,” Tokunaga told fellow lawmakers on Friday. Leaders in New Zealand and several other countries have said they still hope to find a way to rescue the initiative. The outgoing Obama administration welcomed Japan’s parliamen-

tary approval of TPP. State Department Spokesman Mark Toner said TPP was important for establishing trade rules in the Asia Pacific and it was in everyone’s interest who has signed on to it to see it come into effect. He said that, regardless of what happens in the US, “the rest of the world is moving forward.” The TPP was meant to help give the US a leading role in setting trade rules reaching beyond tariffs and other conventional trade barriers. It’s possible demise could spur faster progress on another, much less discussed trade agreement called the Regional Comprehensive Economic Partnership. That trade grouping includes no countries from the Americas but all the big hitters in Asia: China, India, Japan, South Korea, as well as Australia, New Zealand and the 10 members of the Association of Southeast Asian Nations. AP

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IS militants reenter Syria’s historic Palmyra

EIRUT—Islamic State (IS) militants reentered the historic city of Palmyra in central Syria on Saturday for the first time since they were expelled by Syrian and Russian forces nine months ago.

The activist-run Palmyra Coordination network said the militants had nearly encircled the city and entered its northern and northwestern neighborhoods. The group, which maintains contacts inside the city, said IS fighters were approaching the city’s United Nations Educational, Scientific and Cultural Organization heritage site, as well. Osama al-K hatib said government soldiers were f leeing Palmyra. “The army, as an institution, has dissolved,” he said. Some soldiers and militiamen remain in the city, along with 120 families who have not been able to leave, Khatib said. He spoke to The Associated Press from Gaziantep, Turkey. “There is strong fighting on all sides,” he reported. “There is no exit except through a corridor to the west.” The dramatic reversal in Palmyra comes days after IS militants in the Iraqi city of Mosul launched a major counterattack that surprised Iraqi soldiers, killing at least 20 and halting their advance. Iraqi special forces units have entered the eastern outskirts of the largest remaining IS-held city, but their advance has been greatly slowed by both a desire to limit civilian casualties and the resilience of the IS fighters. On Saturday US Secretary of

Defense Ash Carter announced that an additional 200 US soldiers would be dispatched to Syria to accelerate the push on the selfdeclared IS capital of Raqqa. The 200, to include special operations troops, are in addition to 300 already authorized for the effort to recruit, organize, train and advise local Syrian Arab and Kurdish forces to fight IS. “These uniquely skilled operators will join the 300 US special operations forces already in Syria, to continue organizing, training, equipping and, otherwise, enabling capable, motivated, local forces to take the fight to ISIL [Islamic State in Iraq and Libya],” Carter said, using an alternative acronym for the extremist group. “By combining our capabilities with those of our local partners, we’ve been squeezing ISIL by applying simultaneous pressure from all sides and across domains, through a series of deliberate actions to continue to build momentum.” During the 10 months that IS held Palmyra, from May 2015 to March 2016, the militants dynamited several of the city’s famed ancient Roman monuments and executed its archaeological director. After the city was retaken, the Russian government staged a classical music concert in the city’s soaring Roman amphitheater last

A Syrian man carries a carpet through a devastated part of the town of Palmyra as families load their belongings onto buses in the central Homs province in Syria in April. AP/Hassan Ammar

200

The number of additional US soldiers to be sent to Syria May to celebrate the success. The Syrian and Russian government maintain they are defending the global community against Islamic

At least 60 killed as crowded church collapses in Nigeria

AGOS, Nigeria—The roof of a crowded church collapsed onto worshippers in southern Nigeria on Saturday, killing at least 60 people, witnesses and an official said. The Reigners Bible Church International in Uyo, capital of Akwa Ibom state, was still under construction and workers had been rushing to finish it in time for Saturday’s ceremony to ordain founder Akan Weeks as a bishop, congregants said. Hundreds of people, including Gov. Udom Emmanuel, were inside when metal girders crashed onto worshippers and the corrugated iron roof caved in, they said. Emmanuel and Weeks, who preached that God would make his followers rich, escaped unhurt. Bodies of at least 60 victims have been retrieved but the toll could mount as a crane removes debris, according to a rescue official who spoke on condition of anonymity because he is not authorized to speak to reporters. The governor’s spokesman, Ekerete

Udoh, said the state government would hold an inquiry to investigate if anyone compromised building standards. Buildings collapse often in Nigeria because of endemic corruption with contractors using substandard materials and bribing inspectors to ignore shoddy work or a lack of building permits. In 2014 116 people died when a multistory guesthouse of the Synagogue Church of All Nations collapsed in Lagos, Nigeria’s largest city. Most victims were visiting South African followers of the megachurch’s influential founder T. B. Joshua. Two structural engineers, Joshua and church trustees have been accused of criminal negligence and involuntary manslaughter after a coroner found the building collapsed from structural failures caused by design and detailing errors. But Lagos state government efforts to bring them to court have been foiled by repeated legal challenges that have delayed a trial. AP

way out for civilians. According to Homsi, only 350 families had returned to the city of its original 30,000 inhabitants after the government retook the city to great fanfare in March. IS militants were shelling the government’s military airport to the east of the city, according to the Coordination group. T he Br it a i n - ba s e d Sy r i a n Observatory for Human Rights says the militants reached the city’s Tadmor Hospital and its wheat silos.

The militants advanced on Palmyra after seizing several government positions, oil fields and strategic hilltops in the surrounding countryside in a lightning three-day campaign. Earlier on Saturday, the milit a nt s’ A a m aq Ne w s A genc y claimed the group shot down a government warplane in the Jazal oil fields west of the city. The Observatory said the jet had crashed for reasons unknown. It reported the militants had taken the oil fields. AP

Trump team challenges intel on Russian election influence

In this image taken from a video, people stand at the scene after the roof of The Reigners Bible Church International collapsed onto worshippers in Uyo, southern Nigeria, on Saturday, killing dozens, witnesses and an official said. Channels TV via AP

terrorism in the country’s devastating five-and-a-half-year war. After taking Palmyra, the two states turned their attention to wiping out the internal opposition in Damascus and Aleppo, leaving the historic city relatively unguarded. Syrian state media had no comment. Mohammad Hassan Homsi of the Palmyra News Network reported that a military division withdrew from the city earlier on Saturday without leaving a

ASHINGTON—Donald J. Trump’s presidential transition team on Saturday challenged the veracity of US intelligence assessments that Russia was trying to tip the November election to the Republican. A top Senate Democrat demanded a full congressional investigation. The Central Intelligence Agency (CIA) has now concluded with “high confidence” that Moscow was not only interfering with the election, but that its actions were intended to help Trump, according to a senior US official. The assessment is based, in part, on evidence that Russian actors had hacked Republicans, as well as Democrats but were only releasing information harmful to Trump’s rival, Hillary Clinton. The official was not authorized to discuss the private intelligence assessment publicly and insisted on anonymity. Trump’s public dismissal of the CIA assessment raises questions about how he will treat information from intelligence agencies as president. His view also puts Republicans in the uncomfortable position of choosing between the incoming president and the intelligence community. In a statement late on Friday, Trump’s transition team said the finger-pointing at Russia was coming from “the same people that said Saddam Hussein had weapons of mass destruction.” On Saturday Spokesman Sean Spicer told CNN there were “people within these agencies who are upset with the outcome of the election.” Spicer denied a New York Times report that Russia had broken into the Republican National Committee’s computer networks. The US official who disclosed the CIA assessment to The Associated Press said only that Republican entities had been targeted during the election. Democratic Sen. Chuck Schumer, Democrat-New York, said he would press for a congressional investigation in the new year.

“That any country could be meddling in our elections should shake both political parties to their core,” he said. “It’s imperative that our intelligence community turns over any relevant information so that Congress can conduct a full investigation.” Republican Sens. John McCain of Arizona and Lindsey Graham of South Carolina have also said they plan to pursue investigations into Russian election interference. Other Republicans have played down the reports. Texas Sen. John Cornyn wrote on Twitter on Saturday that Russian hacking had been going on for years. He said the matter was “serious, but hardly news”. There was no immediate official response from Moscow. But Oleg Morozov, a member of the foreign relations committee in the upper house of the Russian parliament, dismissed the claim of Russian interference as “silliness and paranoia,” according to the RIA Novosti news agency. Morozov described the allegations as an attempt to force the next administration to stick to Obama’s anti-Russian course. President Barack Obama has ordered a full-scale review of campaign-season cyber attacks to be completed before he leaves office in January. The investigation ordered by Obama will be a “deep dive” into a possible pattern of increased “malicious cyber activity” timed to the campaign season, White House Spokesman Eric Schultz said on Friday, including the e-mail hacks that rattled the presidential campaign. It will look at the tactics, targets, key actors and the US government’s response to the recent e-mail hacks, as well as incidents reported in past elections, he said. The president ordered up the report earlier in the week asked that it be completed before he leaves office next month, Schultz said. “The president wanted this done under his watch because he takes it very seriously,” he said. “We are committed to ensuring the integrity of our elections.”

The Kremlin has rejected the hacking accusations. In the months leading up to the election, e-mail accounts of Democratic Party officials and a top Hillary Clinton campaign aide were breached, e-mails leaked and embarrassing and private emails posted online. Many Democrats believe the hackings benefited Trump’s bid. Schultz said the president sought the probe as a way of improving US defense against cyberattacks and was not intending to question the legitimacy of Trump’s victory. “This is not an effort to challenge the outcome of the election,” Schultz said. Obama’s move comes as Democratic lawmakers have been pushing Obama to declassify more information about Russia’s role, fearing that Trump, who has promised a warmer relationship with Moscow, may not prioritize the issue. Given Trump’s statements, “there is an added urgency to the need for a thorough review before President Obama leaves office next month,” said Rep. Adam Schiff, Democrat-California, senior Democrat on the House intelligence committee. If the administration doesn’t respond “forcefully” to such actions, “we can expect to see a lot more of this in the near future,” he said. The White House said it would make portions of the report public and would brief lawmakers and relevant state officials on the findings. It emphasized the report would not focus solely on Russian operations or hacks involving Clinton campaign chairman John Podesta and Democratic National Committee accounts. Schultz stressed officials would be reviewing incidents going back to the 2008 presidential campaign, when the campaigns of Sen. John McCain and Obama were breached by hackers. Intelligence officials have said Obama and Republican presidential nominee Mitt Romney were targets of Chinese cyber attacks four years later. AP

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Venezuela seizes millions of toys, accuses importer of hoarding

enezuela price regulators on Friday seized almost 4 million toys from warehouses around greater Caracas and said they would distribute them to low-income children ahead of the Christmas holiday. William Contreras, the country’s price czar, accused toy importer Distribuidora Kreisel of hoarding and price gouging and asked that the company’s directors be detained and prohibited from leaving the country. Flanked by national guardsmen, he said the company had received preferential exchange rates for goods it imported as early as 2009 and then raised prices by as much as 50,000 percent. “These products will be put to use by the Clap,” he said, referring to the government’s community-based network that distributes food to lowincome residents. “Venezuela’s boys and girls will have their baby Jesus guaranteed, and these companies will learn that they can’t play with the rights of the Venezuelans.” Triple-digit inflation and a collapsing currency have made many nonessential items out of reach for most Venezuelans, where a monthly minimum wage buys only around $20 on the black market. Government authorities have in the past several years ordered price cuts ahead of the Christmas holiday, and price regulators ordered clothing stores in downtown Caracas to cut prices by 30 percent earlier this week. In 2013 President Nicolas Maduro accused retailers across the South American nation of price gouging and deployed the military to slash prices at electronics and home appliance stores. The event became coined the “Dakazo,” after the socialist leader ordered an electronics chain called Daka to slash its merchandise prices to “fair” levels and liquidate their inventory on live television. Since then, Venezuela’s government has cracked down on prices across the entire economy—everything from eggs to children shoes— levying sanctions or confiscating the merchandise of business owners who don’t comply. Bloomberg News

Monday, December 12, 2016 A11

Lagarde in French spotlight as negligence trial begins

The IMF’s member-countries knew about Lagarde’s legal issues in the long-running Tapie case when she was first appointed in 2011, and are, therefore, unlikely to lose confidence in her regardless of the outcome of the trial, said Edwin Truman, a senior fellow at the Peterson Institute for International Economics in Washington.

Little impact

Peru’s President Pedro Kuczynski welcomes Christine Lagarde, managing director of the International Monetary Fund, to the opening session of the annual Asia-Pacific Economic Cooperation summit in Lima, Peru, on November 20. AP/Martin Mejia

hristine Lagarde heads to court on Monday in a case that promises to gain attention in France but is unlikely to have much bearing on her job as head of the International Monetary Fund (IMF). Lagarde, 60, will stand trial on charges of negligence before a special panel that includes judges and French lawmakers. She

is accused of failing to prevent a massive government payout to businessman Bernard Tapie eight years ago while serving as

France’s finance minister. Lagarde, who has denied the charges, could learn the verdict as early as Friday or the hearing may continue into next week. A s t he he a d of t he I M F, Lagarde manages an institution that was on the front lines of the effort to combat the global financial crisis and provides billions of dollars in loans to countries at risk of default. She’s also a prominent voice in debates about the global economy at Group-of-20 meetings and other international forums.

$16,000 The amount of fine IMF Head Christine Lagarde will pay and one-year imprisonment if she is found guilty A conv iction of negligence charges carry a maximum penalty of one year in prison and a fine of €15,000 ($16,000).

briefs china conducts flyover of waterways near japan, taiwan BEIJING—China has conducted a flyover of strategically important waterways near Taiwan and Japan, in what it calls a routine exercise. China’s Defense Ministry says it flew planes on Saturday over the Miyako Strait between two Japanese islands. The Taiwanese Defense Ministry says the Chinese also flew over the Bashi Channel adjacent to Taiwan. The waterways are two of the connections between the contested South and East China seas and the Pacific Ocean. China has previously run similar exercises. But Saturday’s flyover was the first since Taiwanese President Tsai Ing-wen spoke to President-elect Donald J. Trump, a call denounced by China. China’s Defense Ministry did not mention Taiwan in its statement about the exercise, denouncing Japan, instead, for scrambling two jets to monitor its planes. Japan’s Defense Ministry did not immediately comment. AP

iran proposes regional bloc vs terror to include saudis TEHRAN, Iran—Iran has proposed the formation of a bloc of Muslim countries to fight terrorism and boost economic cooperation that would include its regional rival Saudi Arabia. Parliament Speaker Ali Larijani told a security conference on Sunday that the two countries, along with Turkey, Egypt, Iraq and Pakistan, should join together to promote “regional peace” and defend the Palestinians. Shiite-majority Iran and mainly Sunni Saudi Arabia are bitterly divided, and support opposite sides in the civil wars in Syria and Yemen. Saudi Arabia cut diplomatic ties with Iran in January after Iranian demonstrators stormed Saudi diplomatic facilities to protest the execution of a prominent Saudi Shiite cleric. Saudi Arabia announced the formation of a 34-member “Islamic military alliance” against terrorism nearly a year ago, which excluded Iran. AP

cargo train in china hits workers, killing 6

BEIJING—Six workers are dead in China after being hit by an express cargo train on the railway line connecting Beijing and the southern city of Guangzhou. A local government statement about the Saturday accident said authorities are still investigating why the workers were on a live track. State media reported in July that the number of train-related accidents and deaths had declined during the first half of 2016. China’s national safety regulator, the

State Administration of Work Safety, reported 1,037 train-related deaths in 2015 and blamed most of them on pedestrians and drivers improperly crossing tracks, as well as typhoons and other natural disasters. The agency reports one other major fatal train accident this year on its online database, a crash in May that killed three people, though the database may not include all crashes. China has surpassed 20,000 kilometers of high-speed rail, with a target of adding another 10,000 kilometers by 2020. The World Bank estimates China has spent $360 billion on high-speed rail, building by far the largest network in the world. AP

french legion of honor awarded to kerry for peace

PARIS—US Secretary of State John Kerry is now an officer in France’s Legion of Honor. French Foreign Minister Jean-Marc Ayrault bestowed the award on Kerry on Saturday after the two held talks on Syria’s war. Calling him a “friend to France,” the Foreign Ministry said he earned the distinction for “his indefatigable efforts in favor of peace.” Accepting the award, an emotional Kerry recalled visiting Normandy D-Day beaches as a child with his French mother, and watching her cry. “That’s when I began to understand the cost of war, and the need for all of us to keep fighting for peace, always.” He also hailed Napoleon for creating the Legion. AP

more than 30 dead as tanker rams into vehicles in kenya

NAIROBI, Kenya—A tanker carrying chemical gas slammed into other vehicles and burst into flames on a major road in Kenya, killing more than 30 people and injuring 10, officials on Sunday. The vehicle lost control while going downhill on the road from the capital of Nairobi to Naivasha late Saturday, said Mwachi Pius Mwachi, the deputy director and communications officer for the National Disaster Management Unit. “This is a serious chemical incident,” Mwachi said. “The police and other rescuers are still on the scene...clearing debris.” Felestus Kioko, the Red Cross coordinator of the region, said more than 30 bodies had been recovered. The police said 10 people were injured. Eleven vehicles were burnt in the accident. AP

“The only impact is if she’s found guilty and incarcerated,” said Truman, a former assistant secretary of the US Treasury. “Otherwise, I don’t think it’ll make much difference.” Lagarde, 60, star ted a second , f ive -ye a r ter m i n Ju ly after no cand idates emerged to cha l lenge her. T he ter ms of her 2011 appointment say she must avoid “even the appearance of impropr iet y.” IMF Chief Spokesman Gerry Rice said last week the executive board has been briefed on the matter and continues to support Lagarde. The Cour de Justice, a court created in 1993 specializing in ministerial misconduct, is made up of three professional judges and 12 lawmakers. A h a nd f u l m i n i sters h ave stood trial before the court, including current Environment and Energy Minister Segolene Royal in a defamation case and Laurent Fabius in relation to the distribution of contaminated blood when he was prime minister. Both were cleared. Lagarde is accused of failing to block an arbitration process in 2008 that brought to an end a long-standing dispute between former state-owned bank Credit Lyonnais and Tapie, a supporter of then-French President Nicolas Sarkozy. Tapie walked away with an initial award of about €285 million before it was cut to zero by an appeals court. Bloomberg News

Greece passes austerity 2017 budget, eyes 2.7% growth

THENS, Greece—Greece’s Parliament passed a budget of continued austerity as mandated by the country’s creditors, but which forecasts robust growth for 2017. Prime Minister Alexis Tsipras said it would mark Greece’s “final exit” from its nearly decadelong financial crisis. The budget adds more than €1 billion in new taxes, mostly indirect taxes on items from phone calls to alcohol. It also cuts spending by over €1 billion. The budget was backed by the left-dominated ruling coalition and opposed by all other parties. It passed by a vote of 152-146 on Saturday. Despite the continued austerity, Tsipras predicted that 2017 would be a “landmark year” with 2.7-percent economic growth. He underlined that his government achieved a 2016 primary surplus—excluding debt servicing—more than double the original forecast and defended his decision to a total of €617 million this Christmas to some 1.6 million low-income pensioners, replacing a holiday bonus scrapped by Greece’s bailout creditors. Tsipras also said the current assessment of Greece’s third bailout program would be completed soon, without additional austerity measures. There are those, however, who believe that the budget’s growth estimate is exaggerated. The Parliament’s own Budget Office has said the combination of extra taxes and spending cuts will “in the short term” have “a recessionary effect.” And Finance Minister Euclid Tsakalotos confirmed to Parliament that the International Monetary Fund demands additional measures, including wage and pension cuts, worth €4.5 billion ($4.75 billion) starting in 2019, as well as publicsector layoffs. Opposition leader Kyriakos Mitsotakis said Tsipras’ handout to the pensioners was a desperate move and that the prime minister was preparing a so-called heroic exit through early elections that he is bound to lose. Tsipras, on its part, insisted electons will take place as scheduled, in 2019. AP

Science Monday

A12 Monday, December 12, 2016

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

Japanese astronaut Koichi Wakata talks about his childhood dream

Making the big leap happen Story & photos by Stephanie Tumampos | Special to BusinessMirror

o dream to become an astronaut is one thing, to be there finally in space looking back on Earth is surreal.

Japanese astronaut Koichi Wakata have always longed to fly and work in space ever since he saw that one big moment in history when he was 5 years old, when mankind finally made that big leap—landing on the Moon. During the 23rd Asia-Pacific Regional Space Agency Forum that was held in Manila last month, Wakata led various sessions and meetings related to space and space explorations. Between his busy schedule of talks and meetings, the BusinessMirror had a chance to interview him about his childhood dream, making it happen, his experience in space and his message to the next generation who also want to take that big leap. Wakata is a Japanese engineer by profession. After he was selected to be an astronaut in 1992 for the Japan Aerospace Exploration Agency (Jaxa) and trained at the National Aeronautics and Space Administration (Nasa) Johnson Space Center, he first flew to space in 1996. He had had a total of four Nasa Space Shuttle missions, a Russian Soyuz mission and a long-duration stay at the International Space Station (ISS). According to Jaxa, he became the first Japanese ISS commander for Expedition 39 and has accumulated 347 days, eight hours and 33 minutes in space spanning four missions—a record he held as the longest stay in space for the Japanese human space-flight history. Below are excerpts of the BusinessMirror’s inter view with Astronaut Wakata:

Why did you want to be an astronaut or did you dream to be an astronaut?

I have always longed to fly and work in space when I saw the Apollo Lunar landing when I was 5 years old. I think it’s fascinating to go to a different world like on the surface of the moon. But I always thought it was impossible as a Japanese because [during that time] there was no Japanese astronaut. But I guess, without having my people and country involved in this business [space and space exploration], probably I won’t get to be able to get there [in space].

Dr. Joel Joseph S. Marciano Jr. speaks on “Rocket Science” before fellows of the 20th Graciano Lopez Jaena Community Journalism Seminar Workshop on Science Journalism. Graciano Lopez Jaena Community Journalism Seminar Workshop

How not to be a rocket scientist and still rock By Leia Castro-Margate

Special to the BusinessMirror

KOICHI Wakata

When you were selected to be an astronaut, how did it feel?

It was unbelievable! I applied when I saw the astronaut selection on a newspaper back in 1991. I thought it was probably impossible for me to be selected. Still, I applied and after going through five different selections, academic tasks, interviews, medical tests and psychological tests, I was selected from 400 candidates. I couldn’t believe it. I think I was just lucky because there were so many talented engineers and medical doctors who applied at the same time. But I have always been grateful. I am very thankful Japan provided an opportunity for me and I hope more countries will be able to provide those opportunities to their very dedicated people in this field.

What was the hardest challenge when you were training to be an astronaut?

Well, technically, that[physical, emotional and mental training] was something I expected. But the most difficult for me was learning and communicating in English. I never lived outside Japan before I was sent to Houston for training. In the simulator of the space shuttle launches [one of his trainings], there were four astronauts inside the cockpit and you have to understand 100 percent of what’s going on. If you lose track, which one is that and which engine is this, which computer is down, you will lose the situational awareness. I failed, I crashed many times because of that.

Wakata learns how to dance the tinikling

No m at ter how muc h you study very thick manuals, if you don’t understand the conversation, you’ll lose it. That’s why I recorded all the communications in the simulators and repeatedly listened to that in the car. I did that for one year and I was able to catch up on what they were saying. It’s always tough in the beginning. The language was tough but I made it. And since I had that experience in overcoming the difficulty in the English language, I did the same thing with the Russian language [during his Russian Soyuz mission training]. That was hard, but I learned a lot, I gained a lot of friends.

What can you say to those who want to be an astronaut?

How was it living in space?

For kids who want to be an astronaut?

Living in space is pretty exciting. It is very easy to transport from one place to another because you can push your body. It’s very easy. The view of the Earth is outstanding. Of course, sometimes, it is very inconvenient because if you lose something like your pen, it will float and disappear very quickly. You have to control everything that you carry so it doesn’t get lost. But, it’s very comfortable. You’ll enjoy it. I always miss it.

Well I would say, it doesn’t have to be an astronaut-related business or you should be in astronomy or engineering. Every kid, every adult, everybody is different and that’s okay. Everybody has his or her own merit or something that nobody else can do better. So I always tell the kids to find what kind of person you are and what are you interested in. Find yourself and then make a clear goal after analyzing who you are. After setting the goal, work toward it. Even if you fail, don’t give up. Then someday, your dream will come true.

For kids, it’s the same thing. If you want to be an astronaut, think what you want to do in space because an astronaut’s work involves really a lot of work. It’s important to determine what you really want to do in space. And if you finally have figure out what you want to do in space, then you’ll know what you need to study to become an astronaut. After that, the path will be open for you to go to space.

Science journalism training Journalists from the regions of Ilocos, Cagayan, Central Luzon and the Cordillera participated in a training-workshop on “Science Simplification and Reporting.” The training was held by the Department of Science and Technology (DOST) Ilocos Region Office and the Science and Technology Information Institute (STII). Among the speakers were broadcaster Mario Garcia, freelance and online journalist Shaira Panela, Malaya Business Insight reporter Paul Icamina and the BusinessMirror Science Editor Lyn Resurreccion. In the photo with the participants are (seated, from left) Felicidad Gan, provincial director, Pangasinan S&T Center; Dr. Paulina P. Nebrida, assistant regional director for Technical Services Division of DOST Ilocos Region; Beth Padilla of STII; Garcia; Richard Burgos, STII director; Panela; Resurreccion; Dr. Aristotle CArandang of STII; Icamina; and Dr. Ismael D. Gurtiza, planning officer of the DOST Ilocos Region. Henry de Leon/S&T Media Service

ot many can claim to be a rocket scientist, yet among those who most people could consider as befitting the term, Dr. Joel Joseph S. Marciano Jr. still demurs to the title. “I am not a rocket scientist, I am an electrical engineer,” Marciano clarifies with emphasis before beginning his presentation on “Rocket Science” to fellows of the 20th Graciano Lopez Jaena Community Journalism Seminar Workshop on Science Journalism on November 29. “Rocket Science”, as the fellows would jokingly remember hours after the mind-blowing presentation, refers to Marciano’s presentation on Diwata I, or the Philippines’s First Earth Observation Microsatellite. Hearing the word “satellite” immediately evokes visions of outer space, of astronauts (or “Fi l ipinauts”) gl id ing ef for tlessly in zero gravity, and a stern but geeky looking head scientist supervising all operations from the Earth station. Marciano certainly looks the part of the head scientist, wise and stern looking at first glance, but the longer you watch and listen to him discuss the science behind space technology, the more you would behold him in a rock-star manner. After finishing his BS Electrical Engineering degree at the University of the Philippines Diliman (UPD), Marciano said he planned to work at the then-emerging telecommunications company of Smart, but was convinced by a mentor to teach at UP instead. He never looked back. He later took his PhD in Electrical Engineering and Telecommunications at the University of South Wales in Australia. He is currently a Dado and Maria Banatao Professor of Electrical and Electronics Engineering at the College of Engineering at UPD, and acting director of the Advanced Science and Technology Institute of the UP Department of Science and Technology. Building Diwata I started with a burning question: “Who knows how to build a satellite?” The search for Filipino experts yielded nothing. Marciano said, “No one knows how to build one.” The better question came next in the form of a proposal: “Who would like to learn how to build the Philippines’s first Earth Observation microsatellite?” Qua lif ied Fi lipinos who wouldn’t jump at this once-in-alifetime opportunity to trail blaze space-technology research in the country must be out of their minds. Marciano was chosen to head the Philippines (PHL)-Microsat Program. He started putting together a team of very young and talented engineers, scientists and researchers from various fields.

“It’s a very daunting challenge. It requires a village to do something like this,” Marciano said. “Fortunately, I have been collaborating with a very good team.” Backed by the Department of Science and Technology (DOST) and UP, the team tied up with experts from two universities in Japan: Tohoku and Hokkaido. The Japanese have been in the space race for decades and the team saw it best to learn from people in the know. Marciano went on to regale the journalism fellows about the science behind launching a satellite, the lessons and experiences they had on the field from the preparations made in the Philippines, the yearlong development of the test model and actual models of Diwata 1 in Japan, the launching of the satellite in the United States, to receiving the first photographs from space, and giving updates on the status of Diwata 2. After his presentation, he was swamped with questions about Diwata 1 and 2, which he answered with every ease of an experienced front man. But asked how he feels about being in the forefront of Philippine Space Technology research, he gets stumped. “That’s a good question, I haven’t really thought about it that much,” he said, while contemplating his answer to the question. Then he relayed how his children feel about him leading the program. “My kids tell me they talked about Diwata 1 in school but they cannot brag about it because when they ask me questions about it I tell them it is top secret,” he added with a smile. “Maybe someday we will be in the textbooks.” Even after accomplishing such astronomical feat, the Engineer shows no sign of stopping. He knows that Diwata 1 is only the beginning of more opportunities. “The government needs help to develop space-science research,” he said. “It feels good to be contributing. I see myself as a provider of opportunities to younger people because I am in a position to connect the DOST to them.” “Maybe space is not the ultimate destination, but along the way, we may discover where we want to go,” Marciano says on looking forward to the future. After Diwata 1 and with Diwata 2 in the works by Filipino scientists, the question on “Who knows how to build a satellite?” will no longer be met with silence. But whether Marciano would be the first to raise his hand in assent would be uncertain, I suspect he would just be waiting and smiling in the background ready to roll—rock-star style. Leia Castro-Margate won first prize for this article at the 20th Graciano Lopez Jaena Community Journalism Seminar Workshop on Science Journalism, which was organized by the University of the Philippines College of Mass Communication Journalism Department from November 27 to December 2.

Green Monday BusinessMirror

BusinessMirror

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

Monday, December 12, 2016 A13

Tañon Strait LGUs, stakeholders strengthen enforcement plan

oncerned government agencies, local government units (LGUs), fishing industry stakeholders and civil-society organizations (CSOs) reviewed and strengthened on Tuesday an enforcement plan to protect Tañon Strait from commercial, illegal and destructive fishing operations. The recent Tañon Strait Protected Seascape (TSPS) Enforceme nt Su m m it re v ie we d a nd identified gaps to strengthen the Tañon Strait enforcement plan, and forge their respective commitments to strongly implement the plan in the next several years. The summit, attended by more than 120 participants, was held in Cebu. “The participants represent key people in enforcement and respective agencies that are crucial in operationalizing the enforcement plan for Tañon Strait,” said Daniel Ocampo, campaigns manager of Oceana Philippines, one of the summit organizers. “It was inspiring to hear the different regional heads speak and give their respective commitments to supporting the enforcement of fisheries laws in Tañon Strait,” Ocampo said. One of the country’s major fishing grounds, Tañon Strait lies between Cebu and Negros. It was declared as a protected seascape in 1988. However, despite its declaration, commercial, illegal and destructive fishing operations still abound, depriving small fishermen in Cebu and Negros to benefit from its bounty. Tañon Strait is the largest marine-protected

5,182 sq km The area covered by Tañon Strait, the largest marineprotected area in the Philippines area (MPA) in the Philippines with an area of 5,182 square kilometers, more than three times the area of the Tubbataha National Park in Palawan. It is 160 kilometers long, and 5 km to 27 km wide. It is home to dolphins, whales, sharks and manta rays, and many other species. Concerted efforts in recent years to protect Tañon Strait from commercial and illegalfishing operations have scored modest accomplishments. As a result, “Tañon is slowly gaining reputation nationally and internationally on protection, management and enforcement,” said Dr. Al Orolfo, Negros Island regional director of the Department of Environment and Natural Resources (DENR), in his message during the summit’s opening program at a hotel in Cebu on December 6. “Efforts to protect Tañon Strait

More than 50 million Filipinos depend on fish for food. The Philippines is the 11th producer of wild-caught fish in the world. As the center of marine biodiversity in the world, it holds the responsibility to save its oceans to ensure the protection of diverse marine habitats, and secure sustainable seafood supply for the future. Daniel Ocampo

should be sustained,” said Department of Environment and Natural Resources (DENR) Central Visayas Director Emma Melana, as she emphasized the role of their agency in safeguarding the biodiversity of Tañon Strait. Director Allan Poquita of the Bureau of Fisheries and Aquatic Resources in Central Visayas said the bureau will provide full support to the TSPS protected area office and the DENR and local government units to ensure that enforcement in Tañon Strait are sustained. BFAR’s support includes a donation of two patrol boats to the TSPS protected area office to help in the monitoring and apprehension of commercial and illegal-fishing operators in Tañon Strait. In this regard, a ceremonial signing of a memorandum of agreement was held during the summit. TSPS Protected A rea Supt. Prospero Am Lendio presented

the approved general management plan of Tañon Strait, as well as the proposed measurers for the operationalization of the enforcement plan. The participants reviewed and refined it, providing their inputs and commitments to implement it in the near future. The TSPS protected-area office and all other MPAs nationwide are under the supervision of the DENR under its Biodiversity Management Bureau. Other officials who served as resource persons during the summit were Assistant Regional Director Elias Fernandez Jr. of the Department of the Interior and Local Government Central Visayas. He emphasized the important role of LGUs as stewards of the environment, and the protection of Tañon Strait is clearly in their mandate. Supt. Agustin D. Molina, chief of the Philippine National Police Regional Maritime Group 7, who

as one of the front liners in enforcement activities, ensured they will actively participate in implementing the enforcement plan on Tañon Strait. Staunch environmental lawyer lawyer Antonio Oposa enjoined participants to the singing of “What a Wonderful World” as a way to encourage all to make our world a better place to live in. Other summit attendees included representatives from the Coast Guard, Coast Guard Auxiliary, Navy, Army, National Bureau of Investigation, deputized park rangers and fish wardens; LGU officials from Tañon Strait coastal towns in Cebu and Negros, and from Siargao; Ocean Heroes finalists and awardees; and other CSOs, such as Tambuyog Development Center, Coastal Conser vat ion a nd Educ at ion Foundation, Zoological Society of London and Environment Law Assistance Center.

Climate-resistant beans could save millions C

ALI, Colombia—A global food watchdog works around the clock to preserve crop biodiversity, with a seed bank deep in the Colombian countryside holding the largest collection of beans and cassava in the world and storing crops that could avert devastating problems. Plants are the vital elements in our ecosystem that clothe us, feed us, give us the oxygen that we breathe and the medicines that cure us. But one in five of world’s plant species are at risk of extinction. According to a report launched by experts at the Royal Botanic Gardens Kew in May, the biggest threats are the destruction of habitats for farming—such as palm-oil production, deforestation for timber and construction of buildings and infrastructure. Global warming is also expected to reduce the areas suitable for growing crops. The United Nations Food and Agriculture Organisation (FAO) estimates that 75 percent of the world’s crop diversity was lost between 1900 and 2000. “We do not [even] know what we have, and we are losing what we have. Why not try to correct that a bit?” Daniel Debouck of the International Center for Tropical Agriculture (CIAT) in Colombia told Inter Press Service (IPS). Only about 30 crops provide 95 percent of human food energy

Seed bank head Daniel Debouck at International Center for Tropical Agriculture, Colombia. Ida Karlsson/IPS

needs, according to the FAO. Dependency on a few staple crops magnifies the consequences of crop failure. Botanists are already taking extreme measures to save those plant species deemed useful. Some 7.4 million samples are in seed banks around the world, but huge gaps exist. Way up north, in the permafrost, 1,300 kilometers beyond the Arctic Circle, sits the Svalbard Global Seed Vault, a socalled doomsday bank buried in the side of a mountain. Within the enclosure sit more than 860,0 0 0 sa mples, representing 5,100 different crops and their relatives. And located among green sugarcane plantations near Cali, Colombia’s third-largest city, a seed bank with the largest collec-

tion of beans in the world is housed in a former meat-quality lab. The seed bank preserves some of humanity’s most important staple crops and contains over 38,000 samples of beans in all shapes, colors and sizes. Varieties developed at CIAT feed 30 million people in Africa. Every September there is a major shipment to Svalbard to keep copies at the seed bank there. The 300 scientists and support staff at CIAT have a mandate from the UN to protect, research and distribute beans and cassava, staple foods for 900 million people around the world. Altogether 500,000 materials have been distributed so far. After the war in Rwanda, CIAT put seeds back in the hands of farmers. “The seeds from the Americas

are absolutely critical for food security in Africa. Without cassava and beans, people would not manage,” Debouck told IPS. The researchers have garnered seeds from around the world for their seed bank. On a mission in Peru in the 1980s, Debouck narrowly escaped capture by guerrillas. “But we came back with 300 varieties of popping bean and increased the CIAT collection significantly,” he said. The popping beans can be prepared without cooking. It is enough if they are heated on a hot surface. This could be important in areas where fuel and kitchen facilities are lacking. The seed bank also stores beans that can offer climate-friendly options for farmers struggling to cope with rising temperatures. The heat-tolerant beans developed by conventional breeding by scientists at CIAT are crosses between the modern kind and the tepary bean, a hardy survivor cultivated since pre-Columbian times. Beans that can beat the heat could be essential to survival in many regions. “The heat-tolerant beans may be able to handle a worst-case scenario of a temperature rise of 4 degrees Celsius. Northern Uganda, southeast Congo, Malawi, and the eastern Kenya are not bean producing areas now because of the heat there. But what we have

at present at CIAT could expand the bean production there,” Steve Beebe, a senior bean researcher at CIAT, told IPS. The new findings would not have been possible without CIAT’s seed bank containing wild varieties and related species of the common bean. Only 5 percent of the wild relatives of the world’s most important crops are properly stored and managed in the world’s seed banks, according a study published in March by the online journal Nature Plants. Debouck says there is lack of education around food. “We think we have food security but we are tremendously vulnerable. If the US would experience drought and Europe would have excessive rains, we would all be in trouble,” Debouck said. Agronomists used to act as a liaison between farmers and agricultural scientists. But during the last 20 years, many agronomists have disappeared and today mostly for-profit agribusiness firms reach out to farmers, according to Debouck. The companies are often interested in selling agrochemicals, he said. Bean researcher Beebe pointed out that beans and other legumes are self-pollinated plants and seed need only be sold once. “That is why the industry is not that interested in promoting them,” he told IPS. IPS

New scientific climate study will impact investments

ne w government-suppor ted scientific study is bound to change the way institutional investors look at opportunities in the energy, urban services and transport sectors. The Low Carbon Monitor (LCM) report by a climate science and policy institute, Climate Analytics, was launched by the United Nations Development Programme and the Climate Vulnerable Forum (CVF) at the UN Climate Change Conference in Marrakech (COP22). The repor t was called for by the governments of the Philippines and Ethiopia as chairmen of the CVF, and was previewed at the Philippine Senate in July this year. The LCM report examines the benefits and opportunities of limiting warming to 1.5-degree Celsius as enshrined in the goal of the Paris Agreement on climate change. Specifically, the report highlights that “limiting warming to 1.5°C requires the rapid phaseout of coal and fossil-fuel power generation in favor of renewable energy in the power and transpor t sectors, significantly reducing ambient air pollution.” If developed countries are serious about transitioning to low-carbon economies, the rapid phaseout of coal and fossil-fuel power generation must be internationally internalized. To start, the accounting modalities for climate finance should subtract any and all coal funding. It is important to note that financing coal plants, regardless if they are marketed to be “highefficiency,” is not climate finance. Though this may be unpopular or controversial with Japan and Australia, this is a necessary turnaround to stay within the bounds of a 1.5°C warming limit. For example, between 2007 and 2015, Japan financed $21 billion worth of international coal plant projects along with $10 billion committed for new coal plant projects, according to the Natural Resources Defense Council. Before COP21 in Paris last year, Japan pledged $10.6 billion per year in climate finance for developing countries from 2020. If coal finance is subtracted from climate finance, Japan may be in a situation where their climate finance contribution is negative or zero. The Green Climate Fund (GCF) and other climate financing instruments would be wise to follow suit and unaccredit or give strict conditional offers and penalties to direct and indirect coal funders utilizing public climate financing. By doing this, we may be closer to reaching peak coal carbon dioxide emissions by 2020. As the Climate Change Commission, Department of Environment and Natural Resources, and the National Economic and Development Authority look to translate and put the Philippines’s nationally determined contributions on track to pursuing the 1.5°C limit, the national debate advances considerably. On the other hand, the Department of Energy (DOE) is insisting on a coaldependent pathway for the country. This is a dangerous precedent being set which can be devastating for the poorest and most vulnerable of people. Moreover, this precedent can be detrimental to the economy. The LCM report highlights an average annual percentage loss of per capita GDP of minus 0.2 percent in the 2030s and minus 0.4 percent in the 2040s. The report also shows that ecosystem risks are material as “coal is a significant source of mercury and other toxic metals harming ecosystems.... It significantly reduces crop yields and diminishes food security. In India the annual cost of ozone pollution to agriculture has been estimated at around 3.5 million tons of foregone wheat production and 2.1 million tons of rice, which could have fed over 90 million people.” Planning agencies need supportive policy and control levers to take into account the imminent economic consequences of breaching the 1.5°C threshold, as well as the benefits of keeping to it. The report highlights that “producing energy from coal or oil creates the least possible jobs, whereas sustainable biomass or renewable hydro energy have among the highest employment contributions. 1.5°C policies could thereby create double the amount of jobs come 2050—the energy plan we would choose”. Sara Jane Ahmed

A14 Monday, December 12, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Strong dollar; good or bad?

o paraphrase the old saying, “If it wasn’t for misinformation there would not be any information at all”. In a world where ideas must be reduced to 140 characters and people think they are knowledgeable having read the headlines and not the accompanying article, this is particularly true about the Philippine peso. Since August the peso has lost about 7.5 percent of its value against the US dollar.

That has raised the cost of debt repayments of dollar-denominated loans by both the private and public sector, reduced purchasing power for imported goods and created a capital outflow. On one hand, there has been a bit of “peso panic” among the pundits and a calming “Don’t worry; all is under control” from the genuine experts, such as the Bangko Sentral ng Pilipinas (BSP). The panic pundits are correct to the extent that the argument that a weaker peso will increase financial benefits to those who receive overseas remittances is simplistic. If in a worst-case scenario of a depreciating peso the price of gasoline went to P100 per liter and electricity cost doubles, it would not matter how much more overseas worker families were receiving. The BSP is correct in looking at the larger economic picture rather than trying to pick the winners and losers of peso depreciation. When the Titanic was sinking, it did not matter whether you were staying in the fanciest stateroom or at the bottom of the ship. There were simply not enough lifeboats to save everyone. So far, the biggest loser in terms of capital flight has been China, as investors try to flee the depreciating currency. “This carries the risk of becoming a disorderly process and China has spent a considerable share of its foreign-exchange reserves trying to manage it,” as global intelligence company Stratfor has reported. Of the 15 countries most at risk from a strong dollar, Brazil is No. 1 and the list includes Asian neighbors Indonesia, India, Malaysia and Vietnam. In the top 15 also are Mexico, Chile and South Africa. Stratfor looks at three variables, all as a percentage of GDP: foreign reserves, dollar-denominated debt and current-account balance. Indonesia—the fourth most risky—for example, has foreign reserves at 12 percent of GDP, dollar debt at 7.5 percent, and its current account is at a negative 2.25 of GDP. By comparison, the Philippines’s foreign reserves are at 28 percent of GDP and we have a current-account surplus of 2.5 percent of the country’s GDP. However, even as the Philippines total foreign debt as a percentage of GDP is lower than most, our dollar-denominated debt is higher. The positive is that the bulk (82 percent) of this debt is long term with an average maturity of 23 years for the government. The potential problem, though, is the private-sector debt has an eight-year maturity. The bottom line is that the Philippines can handle a stronger dollar much better than most. But taking on more foreign debt must be done with caution, even if local interest rates are substantially higher than what has to be paid for borrowing from abroad. This is particularly true of the private sector. Since 2005

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Time for Christmas shopping Atty. Jose Ferdinand M. Rojas II

RISING SUN

ith less than two weeks to go before Christmas day, we are all trooping to the stores to get gifts for our loved ones, especially for the children. A word of caution: there are toys that are not safe for kids, and I am dedicating this column to help readers become aware of the dangers posed by some of the toys available in the market. Here are tips to consider when buying toys for gifting. Avoid choking by buying toys that are bigger than the child’s mouth. Those toys that have small parts or can break into small parts are not suitable for very young children. This includes stuffed toys with buttons or eyes that could come off and get swallowed. Be careful that you don’t buy toys that contain chemicals that can damage the health of the child: arsenic, chromium, lead, mercury, phthalates, etc. Toys with paint may also be

harmful, especially if the child gets to lick or bite it. This includes art supplies or cosmetic products that contain toxic chemicals. Some toys could cause problems when harmful chemicals are inhaled by the child. There are toys with sharp or pointy edges that may cut the child’s skin. Avoid these, together with toys that have long strings or cords that could strangle the child or cause him/ her to trip and fall. Think twice about buying toys

Be careful that you don’t buy toys that contain chemicals that can damage the health of the child: arsenic, chromium, lead, mercury, phthalates, etc. Toys with paint may also be harmful, especially if the child gets to lick or bite it. This includes art supplies or cosmetic products that contain toxic chemicals. that shoot small or pointed objects into the air. It could cause eye injuries or even blindness, and other bodily injuries. Battery-operated toys may not be appropriate for very young children, especially if the toy has tiny batteries that are not firmly secured or batteries that may leak and cause chemical burns. Because young children have sensitive hearing, don’t give them loud musical toys or squeeze toys that make shrill noises. It would also be good to avoid toys that encourage violence and aggression, like knives or swords, guns and other ammunitions. If you are buying electronic toys

We’re ceding global leadership to China

By Daniel K. Gardner | TNS

emember when China was the climate-action outcast, the obstacle standing in the way of progress in the global fight against a warming planet? What a difference a few years—and an election—can make. Over the past few weeks, world leaders, delegates to the climatechange conference in Marrakech and activists everywhere have expressed alarm that, as president, Donald J. Trump might actually realize his “America First Energy Plan.” Any one of the proposals would set back the environmental movement—withdrawing the US from the Paris Climate Agreement, abandoning President Barack Obama’s Clean Power Plan to reduce carbon emissions, reviving the coal industry, opening up more public land to oil-and-gas drilling, dismantling the Environmental Protection Agency—but together they conjure up dystopian dread. If President Trump follows through with candidate Trump’s promises, it will be all but impossible to limit global temperature rise to 2 degrees Celsius. China, of course, was no more prepared for the results of the American election than the US. But it has been quick to size up the environmental implications of a Trump victory, and officials in Beijing are contriving to cast China in a fresh role, to project the country as a—perhaps the— global leader on climate change. During the Marrakech talks, the official Xinhua News agency stated,

“China is playing an active role in negotiation and global governance on climate change. Self-motivated and willing to work with others to save the planet, China has taken steps, including billions of dollars of investment, to tackle climate change and provide new-energy technology.” No need to make the contrast with the US more explicit. Lost on much of the world is that, even as a soupy smog blankets its skies, China has been going green and clean with a vengeance in recent years. As the environmental and health consequences of fossil-fuel emissions have become more widely understood, Beijing has bolstered its efforts to curb coal consumption and vehicle exhaust. China invested $111 billion in renewable energy in 2015—more than any other country in the world and, indeed, more than the US ($44 billion), Japan ($36.2 billion) and the United Kingdom ($22.2 billion) combined. In the same year, it led the world in installed wind power, solar power and hydropower (with a total renewable capacity of 500 gigawatts, compared with 220 gigawatts in the US). China today is the world’s leading manufacturer—and exporter—of wind turbines and

solar panels. And, next year, Beijing will inaugurate a nationwide carbon-emissions trading program. In an effort to wean the Chinese public from fossil fuel-powered transportation, the state provides hefty subsidies for the purchase of electric vehicles (up to $16,000 for a unit). China’s high-speed rail system, at some 12,000 miles already the longest in the world, will add 7,000 additional miles by 2020. Also by 2020, the Ministry of Transport plans to add 200,000 new-energy buses and 100,00 new-energy taxis to the nation’s streets. For China, going greener and cleaner has been driven in considerable part by environmental necessity. But at least as important, China is betting that clean energy and green technology will be what powers the global economy of the 21st century. Already in 2010, then-US Secretary of Energy Steven Chu alerted Americans to what is at stake: “From wind power to nuclear reactors to high-speed rail, China and other countries are moving aggressively to capture the lead. Given that challenge, and given the enormous economic opportunities in clean energy, it’s time for America to do what we do best: innovate.” If China is right, if Chu is right, to renege on the Paris Agreement, to expand oil-and-gas drilling, to rebuild the coal industry, to cancel federal funding for research and development of new, cleaner forms of energy—as Trump has proposed — not only will cede global leadership

or gadgets, make sure they are safe enough not to cause overheating, burning, or fire. Read the labels carefully and pay attention to warnings, age recommendation and safety instructions. Encourage the gift’s receiver or his or her guardian or parent to read these, as well. Finally, buy only from reliable stores or suppliers. Don’t forget to get your official receipt so you can have the toy replaced if necessary. As a responsible consumer, take note of product manufacturing details and the manufacturer’s license to operate number, which all legitimate toy manufacturers, importers, or distributors should have. Sometimes, when you’re trying to save some cash by buying the cheap alternatives, you end up compromising the welfare of the receiver. So be vigilant about the quality of the toys you are buying, as well as the legitimacy of the manufacturer or distributor. Take extra precaution to make sure that your money is well spent and that the health and safety of the gift’s receiver are prioritized. Then it will be a happy Christmas, indeed, for everyone.

on climate change to China but also undermine American leadership of the global economy. Finally, if Trump’s proposals surrender the leading role played by the US on climate change and in the global economy, they threaten to diminish its moral influence in the world, as well. Developing countries are counting on the UN-sponsored Green Climate Fund to assist them in their efforts to combat the ill effects of climate change. Of the $3 billion the US has pledged to the fund, only $500 million has been paid out. Trump’s “America First Energy Plan” proposes “to stop all payments of US tax dollars to UN global warming programs,” suggesting that developing countries may be waiting a long time to get the remaining $2.5 billion. So much for America’s word. In Beijing last week the government reaffirmed its commitment to set up a $2.9-billion fund to help poor countries adapt to climate change. “China is surprising us daily. Whatever they’ve promised, they’re delivering,” Tosi Mpanu-Mpanu, chairman of the Least Developed Countries Committee, said in Marrakech. As 2017 approaches, China is poised to assume global leadership on climate change, and the US is poised to become the new climateaction outcast. In Marrakech for the climate talks, Erik Solheim, head of the United Nations Environmental Program, spoke right to the point: “It’s a new world order.”

Opinion BusinessMirror

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Triumphing the small PPP is not procurement business cash management By Alberto Agra

PPP Lead

Filbert Tsai

DEBIT CREDIT

mall businesses typically measure their wealth on the basis of cash availability. Thus, we frequently see in practice that startups and small businesses’ cash is under the same personal bank account of the entrepreneur. Don’t get me wrong, there is absolutely nothing wrong with this practice, but it pays to split that out—for one very compelling reason—it is absolutely (or almost) free to set up a separate bank account for your company.

Managing cash is the foremost important hurdle that the budding entrepreneur should learn in the context of finance. There is nothing more important than learning where your business’ cash is going. You should always have a clear visibility over how your business’ cash is spent (or even earned). This allows better financial management and ability to spot what went wrong to your business finance. The traditional practice of retaining the business bank account to personal bank account can prove problematic in the long run. While there are too many reasons to justify why your business’ cash should be absolutely split out from your personal cash balance, let me give three reasons for you to make the move now.

Work and life should be balanced

Ask yourself how many times you’ve tried to know how your business is doing and you look at your own bank account? Definitely—a lot of times. The problem in maintaining the same cash account is that you risk spending your invested cash in your business as if they are your personal earnings. One day you’ll wake up realizing that you have caused a massive deterioration in your company’s liquidity. I hope this does not happen, but why go that route when you can get out of it now—for free. What’s more? You’ll immediately feel the need to grow your business to improve your personal cash balance to be able to spend on personal things.

Learn financial management for free

With your personal cash account split out from your business’ cash, you’ll absolutely learn to manage

and monitor both you and your business’ expenses. The first step to small business financial management is mastering cash management, which means how fast you can generate cash from your receivables and how slow you can pay out your expenses— now this gets complex. The more cash you see, the more you deem that your business is growing. Keeping tab of your payables paves the way for you to avoid running into bankruptcy. Know your business performance immediately. Cash equals wealth. This is how we usually look at start-ups and small businesses. While you know how to look at your profit or loss (hopefully, you can find how much your net income is), small businesses should learn to look at their liquidity status (which is mostly cash) as the basis of their real wealth. While your accountant (hopefully) will tell you how much your profit or loss is (or your net assets are), it just doesn’t really make sense to think about these as wealth. Your performance as a budding entrepreneur is judged financially by the cash you generate. As I close, it is important for me to call again businesses to take action and split out their personal cash from their business’ cash. Let this sink in for now before addressing other personal financial matters. Filbert Tsai is a Filipino accounting advisor in the UK with global and public-sector experience. His key areas of interests are start-ups and MSMEs. His blog and page, Ask the Accounting Advisor, provide relevant insight for start-ups and MSMEs in the Philippines. 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.

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anagement and service contracts whereby public funds are used are PPP arrangements governed under the Government Procurement Reform Act (GPRA). The overlaps between these two approaches are confined there. However, there are at least seven differences between the two. Governing laws. Procurement of goods, services and infrastructure is governed by the GPRA, or RA 9184, while buildoperate-and-transfer (BOT) or build-transfer-and-operate (BTO) arrangements are governed by the BOT law, or RA 6957, as amended by RA 7718. Joint ventures (JV) by government corporations and instrumentalities are regulated by the 2013 guidelines issued by the National Economic and Development Authority (JV Guidelines). Objects of contract. Under the

Bloomberg View

he post-election rally has taken stock markets to all-time highs. Readers know I am not a fan of making stock-market predictions, but the recent gains do raise some interesting questions. Rather than offer up a silly and very likely wrong forecast, I prefer to share, instead, some thoughts that you might have overlooked. I hope you will find them useful. Sentiment has gotten frothy as the market has run up. One of the more interesting ways to track sentiment is to use the Wall Street Journal as a reference guide. Stock-market researcher Laszlo Birinyi notes that when new market highs are consigned to page C4 or, otherwise, buried in the back pages, it is still early in the cycle. By the time it makes it to the front page, we might be getting ahead of ourselves. Valuations are elevated: Markets are overvalued relative to historical averages. This may be true, but it misstates an important fact. Markets are rarely fairly valued. When stocks are undervalued, people can be too nervous to put capital to work; when they are expensive, they are reluctant to overpay. Here is the thing about

equities: Pricey markets often become pricier, cheap markets often become cheaper. It is important to remember that markets are at fair value for only the briefest of moments. Then they quickly careen off course, staying cheap or overvalued for years at a time. Earnings: It may be counterintuitive, but consider this: markets are forward looking and valuations look elevated sometimes, because the economy and corporate profits have to catch up with prices. That’s what the first three-quarters of this year were about: Stocks prices were little changed as they waited for earnings to rise enough to justify valuations. Then there’s the CAPE ratio: This is Yale economist Robert Shiller’s measure of cyclically adjusted price-to-earnings ratio. My colleague Michael Batnick crunched the numbers on CAPE, and he found that “over the past 25 years, the CAPE ratio has been above its historical average 95 percent of the time. Stocks have been below their historical average just 16 out of the last 309 months. Since that time, the total return on the S&P 500 is over 925 percent.” In other words, CAPE is a useful guide to give you some ideas about future expected returns, but as a market-timing tool, it is of little use.

Management and service contracts whereby public funds are used are PPP arrangements governed under the Government Procurement Reform Act. The overlaps between these two approaches are confined there. However, there are at least seven differences between the two. is allowed to innovate, provided the desired outcomes or inputs are achieved. Sources of funds. In procurement, public funds are used to buy the objects. For BOT law variants, PSP funds are used, save in the instance where government shares in the project cost. Under a JV, both parties contribute and the contribution may be cash or noncash. Transfer of ownership. When government procures or buys, there is a transfer of ownership where private property becomes public. Under a BOT arrangement, the government becomes the owner of the asset at the end of the contract period. In a BT, the government becomes the owner and operator after construction and acceptance.

In a BTO, the government becomes the owner even before the term expires and the PSP becomes the operator after the turnover. In a build-own-operate (BOO), the PSP becomes the owner in perpetuity. In a JV, the government or the PSP can be the owner depending on the arrangement. Procedures. Under the GPRA, open bidding is the default procedure. In certain instances, the procuring entity can negotiate. Under the BOT law and JV Guidelines, the government may solicit bids or accept unsolicited proposals. Bidding parameters. For procured goods and infrastructure projects, the parameter is the purchase price (i.e., lowest), while for services, the rating (i.e., highest). Under the BOT law, the options are highest revenues or concession fee, least government burden or subsidy, or lowest fee to be paid by the end-user. For JVs, the highest revenue or percentage share is the measurement. The choice lies with the government, whether PPP or procurement. Regardless of the approach, the public good is the true index because we pay for all these, regardless.

Technology as a powerful tool to transform learning in public schools By Clarita Salvador, PhD

he 21st century has seen unprecedented advancement in technology that could benefit educators and students. However, public schools in the country are still trying to face up to the challenge of integrating advanced technology in classrooms to facilitate fruitful engagement among students. Public schools, for example, can harness the power of the Internet to facilitate a more personalized learning. And digital textbooks can help students visualize and interact with complex concepts virtually. With all the advanced technologies at their fingertips, public-school teachers have the power to profoundly improve the quality of education in our public schools. There’s a general consent among technology buffs that the power of commercial electronic gadgets constantly doubles every six months. Given this idea, one wonders how

Six things to consider as stocks break records By Barry Ritholtz

BOT law, the objects are infrastructure or development projects traditionally provided by the government. Under the JV Guidelines, the project must be for an investment activity. Under the GPRA, government procures either goods, services or infrastructure projects. Specifications. In procurement, the “specifications are specific” whereby, typically, the contractors must follow them to the letter. In a PPP, minimum specifications or outputs are determined by the government, and the PSP

Monday, December 12, 2016 A15

New market highs are bullish: We said this two years ago, but it remains true today. I am always astonished when I hear that new market highs are a reason to avoid equities. Of all of the many factors that have been demonstrated to generate returns, I believe momentum—and, in particular, trend—is misunderstood by many investors. Think of it this way—which is the better way to generate gains, investing in markets that reach new lows or new highs? The election is over: The CEO of Southwest Airlines noted that bookings have risen since the election. Maybe this is because everyone is so enthusiastic about Donald Trump’s victory and his plans to cut taxes and roll back regulations. My guess is that this election—the most insane, bizarre, surprising, reality show of a car wreck of our lifetimes—left many people too exhausted to think of doing anything other than watching the spectacle unfold. Regardless of who you supported, and whether America is, or was, or will be great again, many people are relieved that the race is over. People are returning to their regular lives, and that means working, traveling, spending and investing in the equity markets.

powerful the next models of computers will be. This also makes educators like us think: Do our students still need to carry books and pens to school in the next five years? While others envision an even more advanced model of classrooms, where robots will replace the students’ favorite teachers, and blackboards or whiteboards will no longer be visible inside the classroom as virtual boards with Internet connection will be the norm, how will all these developments affect learning in the 21st century and beyond? Our children, especially the millennials who were born in this new age of technology, will be the beneficiaries of the impending change in our educational system. Thanks to the proliferation of wireless technology, educators are given the chance to leapfrog the evolution of digital learning or technology education. Even in the provinces, we are certain of these impending changes in public schools. As our students can

no longer live without the Internet, it’s just a matter of time before we totally embrace virtual education in all public schools. Knowing that technology can be a powerful tool for transforming learning, the biggest challenge for us, educators, is how to integrate advanced technology into our school environment and create learning modules tailored to the individual needs of our students. We have to reinvent our system of teaching and adapt learning experiences to meet the needs of our students. With millions of students nationwide, public schools could become exploration centers. Educators should be collaborators in learning, seeking new knowledge and constantly acquiring new skills alongside their students. To fully realize the benefits of modern technology in our education system, educators must find ways to effectively use technology in the classroom. Academic leaders should set a

Slippery slope of censorship

ressured by governments around the world, four companies operating some of the world’s most popular Internet sites and services— Facebook, Twitter, Google’s YouTube and Microsoft—announced this week a joint effort to censor “violent terrorist imagery or terrorist recruitment videos or images”. It’s an effort to fight a bad use of technology with more technology, in the hope of curtailing the use of social media by Islamic State and other terrorist organizations to recruit followers and promote their murderous agendas. According to a blog post by Google, whenever one of the four companies deletes a terrorism-related image or video, it will have the option of submitting the file’s unique identifier to a shared database. The other companies will then review the file to see whether it violates their terms of service, and if so, they can use its unique identifier to delete it from their pages. The database is similar to the one the National Center for Missing and Exploited Children uses to catalog and remove child pornography. And the goal of the companies’ effort is similar, as well: to push jihadist material out of the most widely used spaces online, making it harder for Islamic State and its ilk to radicalize people remotely. The announcement is both welcome and worrisome. Counterterrorism experts have long sought to close the spigot of jihadist propaganda online, arguing that social media plays an integral role in sustaining groups, like Islamic State. Yet, Monday’s brief, relatively low-key announcement leaves many questions

unanswered about what criteria the companies will use to decide what to block, how proactive they will be in censoring content, and whether users will be able to appeal when their images or videos are blacklisted. This isn’t mere quibbling over the finer points of free-speech rights (and besides, the First Amendment isn’t applicable here, because it limits only censorship by the government, not by private companies). The four entities involved have enormous power to shape users’ experiences online, which is one reason they should remain as neutral as possible when it comes to the content they host. We may all agree that jihadists shouldn’t be allowed to use these platforms to distribute beheading videos, but that’s just a fraction of the material used to recruit and radicalize. Should speeches by Islamic State leaders and sermons by extremist clerics be censored, too? What about news photographs of, say, victims of Israeli or American air strikes, or photos of detainees tortured in Abu Ghraib? Bear in mind that the database doesn’t distinguish between different potential uses of blocked imagery; if Facebook censored a video circulated by Islamic State propagandists, CNN wouldn’t be able to use that footage on its Facebook pages either. Clearly, the line between what is and isn’t acceptable will be hard to draw. To their credit, at least some of the four companies plan to take a narrow view of what to block, at least initially, and to have humans, not software, decide when a file needs to be censored. That will give them more time to develop

vision for creating learning experiences that provide the right tools and support systems for public students to thrive. Fortunately, some schools are blazing the trail. For example, Filipino high-school students are now competing in international robotics competition and are bringing home medals and trophies. For the education department to bring public education to a higher level of teaching and learning, it needs to focus on the challenges at hand. Meanwhile, the government must provide a bigger fund for our technology department so it can tailor-fit the brand of learning that our students need. So, will our elementary and highschool kids still need teachers in this new millennium and beyond? Of course, no computer can replace the warm presence of our compassionate ma’ams and sirs.

The author is Principal 2 at Camalaniugan Central School.

clearer standards for determining what content is unacceptable and avenues to appeal their decisions to censor. Admittedly, the threat posed by jihadist groups is so great, the usual bromides about defeating bad speech with more speech don’t offer much reassurance. And the longer the companies maintained their hands-off posture, the more they risked being compelled by Congress or European governments to act—a development that could have been far more threatening to the free flow of information online. Yet, the slope the companies have started down is slippery. Governments will surely push to extend the blocking effort to more online sites and services, such as Telegram (a messaging app that’s popular with extremists) and Google’s search engine. They may also pressure companies to use technology to scour their sites proactively for suspected terrorist content, as they do for child pornography, rather than letting human reviewers decide what to block. And if the effort to interdict jihadist propaganda is successful, what other kinds of content will governments want these platforms to exclude? Hate speech? Indecent material? Fake news? Cartoons that ridicule the government—a form of expression that’s a crime in some parts of the world? The precedent being set here is that a handful of powerful private companies could take the place of courts and juries in setting limits on speech that, because of these companies’ collective dominance online, would apply broadly across the Internet. TNS

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They are... 13th Lasallian Scholarum Awards for Outstanding Media Coverage

PAJ-SMC Binhi Awards

n Agriculture/Commodities Page, Agriculture Section of a National Paper of the Year n Mary Grace Padin, Agricultural Journalist of the Year n Mary Grace Padin, Agriculture Reporter of the Year n Jonathan L. Mayuga, Environmental Journalist of the Year (3rd place) n Mauricio E. Victa, Agriculture Photojournalist of the Year

Gawad Sulo ng Bayan 2016

25th Journalism Awards of the Economic Journalists Association of the Philippines (Ejap)

n BusinessMirror, Best Business News Source of the Year n Mary Grace Padin, Agribusiness and Mining Reporter of the Year n Lenie Lectura, Energy Reporter of the Year n Cai U. Ordinario, Macroeconomy Reporter of the Year n Lorenz S. Marasigan, Best Business Feature Story, for “PHL’s slow but expensive Internet service”

2016 Jose G. Burgos Awards for Biotech Journalism

n BusinessMirror, First Place, Institutional Category n Mary Grace Padin, First Prize, Best News Story Category, for “Genetically modified corn allowed farmers to earn $560 million–study”

n Leonila R. Garcia, Outstanding Feature Story, for “Journey of a Lasallian Scholar”

n Tet Andolong, 2016 Prestigious Seal Award for Real Estate Journalism

Second Sarihay Media Awards

n Jonathan Mayuga, Best News Story for Print (National), for “Ugly Scars Left Behind by Miners Overshadow Development” n Jonathan Mayuga, Best Feature Story for Print (National), for “Saving Danjugan Island”

Department of Agriculture Biotechnology Program

n Lyn Resurreccion, Filipino Faces of Biotechnology

WWF-Philippines

n Certificate of Recognition for BusinessMirror’s continued support in promoting WWF activities

Our 2016 haul BusinessMirror Best Business News Source