Businessmirror december 14, 2017

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Thursday, December 14, 2017 Vol. 13 No. 64

PHL seen sustaining 6.7% GDP growth for the year

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By Cai U. Ordinari

@cuo_bm

he Asian Development Bank (ADB) raised its forecast for the Philippines’s GDP expansion this year to 6.7 percent, although Socioeconomic Planning Secretary Ernesto M. Pernia said this is just “the minimum” growth the government is now expecting given the economy’s performance thus far.

This outlook assumes that growth in the government’s infrastructure program will accelerate, supported by improvements in budget execution”—ADB

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WB bats for ‘new social contract’ for East Asia Rene E. Ofreneo

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In its Asian Development Outlook (ADO) Supplement, the Manila-based multilateral development bank also upgraded its 2018 growth forecast for the Philippines to 6.8 percent. This is on the

n recent years, the World Bank and the International Monetary Fund (IMF) have been adjusting their neoliberal growth panacea for borrowing countries. In an earlier column, we reported on how the IMF’s research department, in an article entitled “Neoliberalism oversold” (published in the IMF’s Finance & Development, June 2016), documented and decried the inequality and unsustainability outcomes arising from their own neoliberal prescriptions, specifically the policies promoting the unrestricted flow of capital and the downsizing of the state capacity in intervening in the economy.

Continued on A2

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Asia’s top inflation-targeting central bank may be preparing to hike rates

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new christmas attraction Filipinos pose for souvenir shots at the “Christmas House” owned by businessman Alexander Cruz in Cainta, Rizal, on Tuesday. The whole house, decorated with hundreds of thousands of LED lights, has attracted local and foreign tourists. AP/Bullit Marquez

small economy that’s constantly battling risks beyond its control like typhoons and oil prices has been one of the most successful at managing inflation in Asia. The Philippine Central Bank, which has an annual inflation target that’s currently set at 2 percent to 4 percent, met its goal six times in the past eight years, and the two times it failed were because prices were too low. That was a better outcome than other inflationtargeting banks in Asia, namely, Indonesia, Thailand and South Korea, according to data compiled by Bloomberg. Japan and India adopted formal targets more recently, while in China, the government sets the goal. Polic-makers’ credibility in the Philippines is now being put to the test. The economy is expanding more than 6 percent a year and risks overheating, adding to inflation pressures. Economists predict the Central Bank will be among the first to follow South Korea in raising interest rates next year, with two analysts saying it could happen as early as Thursday. The rest

forecast the benchmark rate will be held at a recordlow 3 percent. “Growth is robust and inflationary risks are tilted to the upside,” said Gundy Cahyadi, an economist at DBS Group Holdings Ltd. in Singapore, who predicts a rate increase this week. “Given the expansionary fiscal policy and strong investment growth, a rate hike is probably warranted to prevent overheating risks.” Continued on A12

‘Gains from TRAIN closer to what govt needs’ PHL thumbs down tariff cuts on farm goods

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espite some new measures being introduced to the first package of the Comprehensive Tax Reform Program (CTRP) by the bicameral conference committee on Monday, the Department of Finance (DOF) said the final version of the proposed Tax Reform for Acceleration and Inclusion (TRAIN) Act is seen to yield net revenue gains at a level that is closer to what the government wants. According to Finance Secretary Carlos G. Dominguez III, the DOF has accommodated other provisions that were introduced by lawmakers in the reconciled version of the TRAIN bill.

“We did not propose [the new provisions] in Package One. However, we respect the right of the legislature to introduce taxes as they see fit. It’s part of the law, and we accept that,” Dominguez said on the sidelines of the Holcim Philippines Geocycle coprocessing tour in Norzagaray, Bulacan on Tuesday. Measures that were inserted in the final TRAIN bill under the scrutiny of the bicameral conference committee include the increase in coal excise taxes, minerals, tobacco products and the inclusion of a tax on cosmetic procedures. The increase in coal excise tax, which was originally proposed to be included in the DOF’s fifth

PESO exchange rates n US 50.4350

package of the CTRP, was raised from the current P10 per metric ton (MT) to P50 per MT in the first year of implementation, P100 in the second year and P150 in the succeeding years. The approved TRAIN version also proposes to double the tax rates for all nonmetallic minerals and quarry resources, and metallic minerals, including copper, gold and chromite to 4 percent. Increase in tobacco excise-tax rates was included in the final version of the bill, from the current P30 per pack, it will be raised to P32.5 in the first half of next year and to P35 starting from July 2018 to December 2019 Continued on A12

in exchange for safeguard deal at WTO meet By Jasper Emmanuel Y. Arcalas

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@jearcalas

egotiations on the establishment of a special safeg uard mechanism (SSM) for developing countries, such as the Philippines, and least-developed countries (LDCs) ended in stalemate on the third day of the 11th World Trade Organization (W TO) Ministerial Conference (MC11). Raul Q. Montemayor, national business manager and program officer of the Federation of Free Farmers (FFF), told the BusinessMirror

that some member-countries have asked for deeper tariff cuts in exchange for their nod for SSM. ”It’s a stalemate; we are still having meetings until the evening. There were negotiations earlier, and it seems nothing has been agreed upon,” Montemayor said in an interview early Wednesday (December 13, Philippine time). “Some of the countries want to link the SSM with tariff cuts. They are saying that SSM cannot be stand-alone. They are arguing that ‘we will give you SSM, but lower your tariffs in exchange,’” he added.

Montemayor, who is part of the Philippine delegation to MC11 in Argentina, said Philippine negotiators will remain firm in pushing for SSM without reducing the tariffs of developing countries and LDCs. “In the previous ministerial conferences, there have been ministerial declarations that there would be an SSM. However, it was not stated in those declarations that it would be linked to tariff cuts,” he said. “So, that is what our negotiators are pushing here right now. This Continued on A2

n japan 0.4444 n UK 67.1946 n HK 6.4606 n CHINA 7.6168 n singapore 37.3040 n australia 38.1339 n EU 59.2410 n SAUDI arabia 13.4486

Source: BSP (13 December 2017 )

A2 Thursday, December 14, 2017

BMReports BusinessMirror

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PHL seen sustaining 6.7% GDP growth for the year Continued from A1

back of the Duterte administration’s strong infrastructure push. In an earlier ADO Update 2017 released in September, the ADB projected the country’s GDP expansion at 6.5 percent this year and 6.7 percent in 2018. “This outlook assumes that growth in the government’s infrastructure program will accelerate, supported by improvements in budget execution, with more large investment projects under way,” the ADB said in its report. Pernia told BusinessMirror on Wednesday that the ADB’s new es-

timate was expected, given that the economy already posted a 6.7-percent growth in the first three quarters of the year. He said the 6.7 percent is just “the minimum” growth expected by the government this year. The official government estimate is 6.5 percent to 7.5 percent for the year. “ This [forecast] is just our minimum [expected] growth for this year because we’re already at 6.7 percent in the third quarter,” Pernia said. The ADB explained that its revision was due to the increased government spending for infrastructure. This makes it easier

for the country to meet its infrastructure-spending target of 5.3 percent of GDP. Apart from this, the ADB said household consumption remained strong despite a slowdown compared to 2016. Other reasons, ADB said, included a positive net exports growth in the January-to-September period and robust business-process outsourcing, finance and real-estate services growth, which accounts for nearly 60 percent of Philippine GDP. The ADB added that strong food-manufacturing growth, which contributes about 30 percent to

GDP growth, and the recovery of the farm sector from the El Niño phenomenon last year are also expected to boost the economy’s performance this year and next year. “Infrastructure investment continued to play important roles in Indonesia, the Philippines and Thailand. Private consumption aided by benign inf lation has provided strong support to most subregional economies in 2017,” ADB said. Meanwhile, the ADB said economic expansion in developing Asia will accelerate to 6 percent in 2017 due to stronger-than-expected exports and domestic consumption.

Excluding Asia’s newly industrialized economies, growth is now expected at 6.5 percent this year. Growth for Southeast Asia, the ADB reported, is picking up faster than initially projected, with GDP set to expand by 5.2 percent in 2017 and 2018, compared to the bank’s September 2017 forecasts of 5 percent and 5.1 percent. “Developing Asia’s growth momentum, supported by recovering exports, demonstrates that openness to trade remains an essential component of inclusive economic development,” said Yasuyuki Sawada, ADB chief economist. “Countries can further take advantage

of the global recovery by investing in human capital and physical infrastructure that will help sustain growth over the long term.” Further, the ADB said rising commodity prices have not yet driven inflation across the region, with consumer price inf lation tame and stable. Price inflation is unchanged from previous projections of 2.4 percent in 2017 and 2.9 percent in 2018. However, inflation in the Philippines was slightly higher at 3.2 percent in the January-to-November period. Nonetheless, this is still within the Central Bank’s target of 2 percent to 4 percent this year.

PHL thumbs down tariff cuts on farm goods in exchange for safeguard deal at WTO meet Continued from A1

is for the developing countries so that their farm sectors will not be hurt and they could compete in the international market, especially against countries who have highly subisidized products,” Montemayor added. The Philippines has proposed an improved special safeguard (SSG) on agriculture as an alternative to SSM. Under the its proposal, the trigger price for SSG, which is currently being computed based on the import price in 1986-1988, will use a rolling three-year average price of imports. Also, the Philippines had proposed the phase out of the

current complicated formula for SSG remedy. Under its proposal, once the SSG is invoked, countries could slap an additional tariff on imported goods by as much as 90 percent of the price difference between the trigger price and imported price. ”For example, your trigger price for poultry imports is P100 per kilogram [kg] and chicken priced at P80 per kg enters your borders, so, that will allow you to invoke SSG. So 90 percent of P20 pesos is P18. That will be your additional tariff,” Montemayor said. The FFF official said the Philippines’s proposal has a ”50-50” chance of getting the nod of other

WTO members, as negotiators go into another set of talks during the final day of MC11. A post-work program would be the likely outcome of MC11 for agriculture if negotiations would break down, according to Montemayor. ”Countries want to come up with an agreement on agriculture, that’s why there is more pressure tomorrow,” he said. A source who is privy to negotiations in Buenos Aires told the BusinessMirror that WTO member-countries did not find ”convergence” on any negotiated outcome in agriculture. The WTO member-countries are now “focusing on a work program

post-Buenos Aires,” according to the source. Quoting Minister Facilitator for Agriculture Amina Mohamed, WTO Spokesman Keith Rockwell said member-countries have not reach a middle ground on the ministerial text for agriculture so far. “She has been conducting consultations in various configurations. She urged members to put for ward a compromised text, none did so,” Rockwell said in a news briefing on December 13 (Philippine time). “She asked everyone to approach the text with an open mind—it may not contain everything you like but it strikes a careful balance.

She urged members to progress on this area, without progress on agriculture it would be difficult if not impossible to make progress elsewhere,” Rockwell added. Montemayor said the establishment of SSM is a “crucial trade remedy” for the Philippines, as Filipino farmers are vulnerable to import surges. “Our tariffs are already low, so there’s more tendency for imports to come in. So there’s really a need for trade remedies like this, that’s the value of SSM for us,” he added. “That’s why the countries who export to us do not want this because the cost of goods they sell to us would be more expensive,”

Montemayor said. SSM is a trade measure that will allow developing countries to raise tariffs temporarily to deal with import surges or price falls, according to the WTO. Earlier in his speech before fellow farm ministers at MC11, Agriculture Secretary Emmanuel F. Piñol said the Philippines will not agree to a new farm deal sans a concrete SSM for developing countries and LDCs. Piñol urged W TO membercountries to act upon the Philippines’s proposal on establishing SSM if they want to get Manila’s nod for any agricultural deal in the ongoing MC11.

The Nation BusinessMirror

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Editor: Vittorio V. Vitug • Thursday, December 14, 2017 A3

Congress approves 1 more year of martial law in Mindanao imposing martial law is far from being the comprehensive response that we need from this government,” Bag-ao said. “We do not need martial law in Mindanao. We need better military intelligence. We need quicker military response. We need active citizenship in our communities. We need to institute structural reforms. We need a strategic response, and not just be comfortable with the shortcuts offered by martial law and the shrinking of democratic and political rights of citizens—of Filipinos—in Mindanao,” Bag-ao said.

By Jovee Marie N. dela Cruz @joveemarie & Butch Fernandez @butchfBM

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ith security officials’ position that rebellion has not been totally quelled in the southern region, the 17th Congress on Wednesday voted to extend martial law in Mindanao for the entirety of 2018.

Convening in a joint session, the Senate and House of Representatives, through Resolution of both Houses 13, granted President Duterte’s request for a martial-law extension for a period of one year, from January 1, 2018, to December 31, 2018. A total of 240 members of Congress voted to approve the extension of martial law and the suspension of the privilege of writ of habeas corpus until December 31, 2018, as against only 27 who voted against it. There were no abstentions. Fourteen senators voted in favor of the motion, while four were against it. Meanwhile, 226 members of the lower chamber approved the motion, while 23 rejected it. Duterte signed Proclamation 216, imposing martial law and suspending habeas cor pus in Mindanao on May 23 following the attacks of the Maute group in Marawi City. Section 18 of Article VII of the Constitution empowers the President to declare martial law and suspend the writ of habeas corpus only “in case of invasion or rebellion, when public safety requires it.” Under the Constitution, Congress, voting jointly, has the sole power to extend martial law. A majority vote of the two chambers—or at least 158 members—voting jointly is needed to pass the motion. Executive Secretary Salvador C. Medialdea told lawmakers, “We do not ask for unlimited martial law. What we are seeking is unlimited peace.” “Despite the death of Isnilon Hapilon and Maute fighters, the Daesh-inspired Da’awatul Islamiyah Waliyatul Masriq continue to rebuild their organization through recruitment and conduct financial and logistical buildup,” Medialdea said. “It was these atrocities that compelled the President to declare the NDF-CPP-NPA [National Democratic Front-Communist Party of the Philippines-New People’s Army] as terrorist organizations,” he added.

Support

PARTY-LIST Rep. Sherwin Tugna of Cibac said the continued existence of rebellion in Mindanao justifies the extension of martial law. “Several events that occurred in

other areas in Mindanao, and not only confined in Marawi City, show that rebellion still exists in Mindanao,” he said. While commending the Armed Forces of the Philippines in regaining Marawi from the terrorists, Tugna reminded the military about a familiar phrase everybody knows: “With great power comes great responsibility.” “The martial-law rule gives the military power to easily apprehend suspected rebels because rebellion has become a continuing crime. They can apprehend without a warrant of arrest. Also, the suspension of the privilege of the writ of habeas corpus has extended the right to detain arrested rebellion suspects for a period of 72 hours, or three days, from the usual 36 hours,” he said. “Another effect of the imposition of martial law is the restriction of some constitutional rights, such as the right to privacy of communication, the right to travel and the right to liberty of abode,” Tugna added. For his part, Rep. Frederick W. Siao of the Lone District of Iligan, a member of the House Committees on Mindanao Affairs, said recovery and rehabilitation efforts for Marawi will not prosper if people’s safety is not assured and remaining pockets of terrorism are not quashed. “Mindanao is ready to forge ahead as the new economic powerhouse of the Philippines, not just in agriculture but also in manufacturing, services and tourism. The security and safety of workers, investors and tourists will be assured in the short term by the martial-law extension and in the long term by the political solutions, such as the BBL [Bangsamoro basic law], progressive Charter change and movement of economic legislation empowering local governments and creating jobs,” he said. Party-list Rep. Mikee Romero of 1-Pacman, also assistant majority leader, said the country needs a strong economic war on the root causes of the rebellion and terrorism, particularly in Mindanao. “The victory of the military and police in Marawi has won the trust of millions of Mindanaoans. We need to take advantage of the one-year extension to solidify

Senators’ vote

Senate President Aquilino L. Pimentel III and House Speaker Pantaleon D. Alvarez preside over Congress’s joint session at the House of Representatives to decide on President Duterte’s request for a one-year extension of martial law in Mindanao on Wednesday. In a 240-27 vote, Congress granted the extension of martial law in the region from January 1, 2018, to December 31, 2018. PNA/Avito C. Dalan

Despite the death of Isnilon Hapilon and Maute fighters, the Daesh-inspired Da'awatul Islamiyah Waliyatul Masriq continue to rebuild their organization through recruitment and conduct financial and logistical build up.”—Medialdea that trust and build upon it with economic, social and political solutions,” he said.

Opposition

Meanwhile, Party-list Rep. Gary Alejano of Magdalo said the Marawi crisis is over, and “I see no basis for the extension of martial law for another year.” “Extension of martial law would run counter to the provisions of 1987 Constitution, which states that martial law would be declared when there is actual rebellion or invasion and when public safety requires it. It is clear that no such thing exists. Reports on continuing recruitment of terrorists and skirmishes with NPA could not be the basis of imposition of martial law,” Alejano said. “There is no stopping the President and the armed forces from going after terrorists even without declaring martial law. Martial law is not equivalent to combat operations,” he added. According to Alejano, the military can very well arrest suspected terrorists and search houses during combat operations as what has been done before even in the absence of martial law. “Defense and intelligence infrastructure are in place in the whole of Mindanao and were provided with operational and intel-

ligence funds. There is no doubt that an arrest or search warrant could be secured from courts when supported with solid intelligence information. Relying on martial law to arrest a person is short of admitting that intelligence gathering is inefficient. This could lead to shotgun approach or witch hunt,” he said. “Extending martial law for one year is an admission that civilian authority is not anymore functioning, which necessitates military rule. I believe this is not the case,” Alejano added. He said the prolonged exposure of the military to martial law could weaken civilian supremacy over the military, which is a fundamental principle of our democracy. “I cannot reconcile the fact that, while President Duterte is using the NPA to justify extension of martial law for one year, he is sleeping with their allies in government,” he added. “Rebels, terrorists and secessionists have been there since the 1970s. They are not new. In varying degrees, they all have been soliciting foreign funding and conducting terroristic acts like beheading, bombings and kidnappings. It is not new that foreign fighters are killed in the rebel camps and hideouts. Numerous all-out wars have been

carried out by the military in the past, but it did not solve the problems. On the contrary, our security situation has aggravated,” Alejano added. Senior Deputy Minority Leader Lito Atienza of Buhay party-list questioned the Constitutional basis for the request of the President to extend martial law in Mindanao for one year. “We are asking for a clarification from the Chief Executive and the military on the provisions of the Constitution—Article VII, Section 18, clearly limits the power of the President, any president, to declare martial law, if needed, and to suspend the writ of habeas corpus for a maximum not to exceed 60 days,” Atienza said. He added Congress should follow and respect the limitations provided for by the Constitution. “We maintain, therefore, that Congress, in performing its task, after having been requested by the President, should limit its extension within the bounds of the 60-day period. One week, two weeks, one month, 60 days—but not beyond 60 days. Congress may decide to extend, but aren’t we supposed to respect the limitations set forth by the Constitution? We should, and we must!” Atienza said. Rep. Kaka J. Bag-ao of the Lone District of Dinagat Islands said the “Battle of Marawi” has already been won by government forces, saying the larger war against terrorism will not be ended with martial law as the sole solution. “Our soldiers deserve a better strategy to carry out their duty to protect our citizens—citizens in Mind anao who have been greatly affected by the conf lict,” she said. “The war against terror is a complex problem that needs a comprehensive response, and hastily re

Senators, attending the joint session of Congress on martial-law extension for one year, voted 14-4 in favor of approving President Duterte’s request. The combined votes by members of the House of Representatives and the Senate showed 240 lawmakers voting in the affirmative and 27 casting votes opposing the extension. The Liberal Party senators who voted against extending martial law until December 2018 were Minority Leader Franklin M. Drilon and Sens. Paolo Benigno A. Aquino IV, Risa Hontiveros-Baraquel and Francis N. Pangilinan. Sen. Panfilo M. Lacson Sr., who voted in favor of the extension, cited the “psychological boost” it would give the military establishment in its mission to restore order in Mindanao. Apart from that, Lacson clarified the extension does not include any “extra powers” for those enforcing Duterte’s martiallaw edict. “We all know the conditions under martial law are no different, as far as the powers of the military, the President [is concerned] everything associated with powers...nothing has been added,” Lacson said. Lacson believes that Duterte’s decision to extend martial-law imposition by one year could be a “blessing in disguise” as the State security forces would be “more conscious” if their troops commit abuses, knowing they are being watched. “If there was no martial-law declaration, there would not be much attention,” the senator said, adding: “In my view, in a way, it is a blessing in disguise due to the consciousness and awareness of the people that there is martial law, and the focus is on our security forces.” At the same time, Sen. Joseph Victor G. Ejercito observed that President Duterte’s martial-law declaration is “favored by most lawabiding citizens in Mindanao.” “Warlords and private armies cannot move and lord over it the way they used to,” Ejercito said, even as he noted that the “thousands of loose firearms problem needs to be addressed to establish atmosphere conducive to business and tourism” in the South.

Duterte renews work ties with Malacañang media, says public interest is foremost By Elijah Felice E. Rosales @alyasjah

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resident Duterte on Tuesday night maintained his administration is committed to its longstanding relations with the media, and cleared his harsh words against the press as “nothing personal.” In a speech, the President said he never considered the media as an enemy, and the press, in turn, should never consider him as one. He said he understands why the government and the media are always at loggerheads, as the business of one is at the expense of the other. “I am not your enemy. Your quest for truth, that’s your business, not mine. At the end of the day, it’s not my property,” Duterte said during an event with the Malacañang Press Corps.

Infamous for slamming the media as biased, the President departed from his usual threats by patting the back of members of the press in attendance. He said he intends to work closely with the media no matter what. “Never mind about our relationship, it’s always adversarial. Your truth is not my truth and everybody’s truth, so [it appears] we fight with each other,” he said. Wala naman tayong galit [We don’t have beef against each other]. We do not fight each other. I do not hate anybody here, or else I will not be inviting you to my place,” he added. Duterte said it is just that the government and the media have opposing views not only on how to run the country but also on what is true. In numerous occasions, he attacked a television network,

Truth is something [that] is relevant, but, at the same time, a very contentious word. Like I said, there are always two sides of the coin: My truth, your truth and the public perception.”—Duterte

a daily newspaper and an online news outfit for allegedly misleading the public with slanted reports about him tracing back to the campaign period. “Truth is something [that] is relevant, but, at the same time, a very contentious word. Like I said, there are always two sides of the coin: my truth, your truth and the public perception,” he said.

The President concluded that, at the end of the day, it is the public that will decide which side is true. “It’s just public interest foremost and, I think, it’s the only one, the only standard is the public standard,” he said. Duterte’s pronouncement was supported by his Spokesman Harry L. Roque Jr., who said the media plays an important role in relaying to the

public “the work and progress of the President and his administration.” “It is through the press that the people become acquainted with the work and progress of the President and his administration. Kaya naman sa gobyerno ay kinikilala namin ang mahalagang papel na inyong ginagampanan sa lipunan [That’s why, in the government, we recognize the crucial role you play in society],” Roque said. He also added Malacañang considers news reports about the administration as a daily scorecard that they keep track of. “Kaya naman kapag kami ay nakakabasa ng magagandang balita sa dyaryo, nakakarinig ng masasayang kurokuro sa radyo o nakakapanood ng kaaya-ayang pangyayari sa telebisyon patungkol sa gobyerno, kami ay nagagalak dahil alam namin na kami ay nakakagawa naman nang

mainam sa mamamayan at sa bansa [That’s why, when we read good news about the government in the media, we get happy because we know we are doing relevant things for the people and the country],” Roque said. Apparently referring to vocal Duterte supporters, or the socalled bloggers, the Palace official said he does not regret defending the freedom of the press. “So far, I have not regretted anything that I said concerning freedom of the press,” he said. Roque earned the ire of vocal Duterte supporters when he came in defense of a Malacañang reporter attacked by an administration-supporting blogger. He said supporters of the President should leave reporters unharmed, and allow them to do their duty as watchdogs of the society.

Economy

A4 Thursday, December 14, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

CA decision on spot-market case seen raising electricity rates anew

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By Lenie Lectura

@llectura

citizen-advocacy group on Wednesday said an amount of P17 billion could be passed on to consumers as a result of a recent Court of Appeals (CA) decision that declared valid the November and December 2013 spotmarket prices. The CA recently reversed a 2014 order from the Energy Regulatory Commission (ERC) that voided the prices in the Wholesale Electricity Spot Market (WESM) for the supply months of November to December, when simultaneous unscheduled and extended shutdowns coincided with the scheduled maintenance closure of Malampaya caused rates to skyrocket. The intervention by the ERC reduced rates and impact to consumers to more than a third, from P24 billion to P7 billion, according to the group Citizen Watch. “Electricity consumers in Luzon will bear the burden of the CA decision as it would force distribution utilities to collect from end-users more than P17 billion just so the generation companies can get additional profits,” said lawyer Tim Abejo, Citizen Watch convener. Abejo said a typical household would pay an average of P700 on top of its monthly electricity bill, while commercial and manufacturing establishments can expect hikes of

₧17B The amount that the group Citizen Watch said will be passed on to consumers as an offshoot of a CA decision that declared the validity of the November and December 2013 spot-market prices

P10,000 and P350,000, respectively. A lready, reports said some P50-billion profits were made by power generation companies in 2013, which is set to increase even more given the additional multibillion windfall. “Consumers should not suffer by reason of this decision. We trust the that ERC, under the newly appointed Chairman Agnes Devenadera, and the Supreme Court will take the appropriate actions

in protecting the rights of the Filipino consumers,” he added. The ERC is expected to file a motion for reconsideration. “A motion for reconsideration is currently being prepared,” ERC Spokesman lawyer Rexie Digal said. In a 42-page decision, the fifth division of the appellate court said the assailed orders dated March 3, 2014, March 27, 2014, May 9, 2014 and October 15, 2014, of the ERC in ERC Case 2014-021 MC are declared null and void and set aside. “Accordingly, the prices for the November and December 2013 supply months in the WESM are reinstated and declared valid,” the CA decision stated. The CA said the assailed ERC orders were issued in violation of the constitution and laws rendered without any factual and legal basis. It said that the ERC committed errors of fact and law in the exercise of its quasi-judicial functions, which warrant the reversal of the assailed orders. “ D u r i n g t he i s s u a nc e of the March 3 order, the ERC had no credible basis to conclude that the entire power-generation industry withheld capacity in the controversial “tight supply months” of November and December 2013 and precisely because the IU [investigating unit] has not yet concluded its investigation. “Such erroneous act is basically akin to having a judge issuing a final sentence on a defendant even if the trial on the case is still ongoing,” the CA said. The ERC’s IU released a report that identified 11 power-generat-

ing firms allegedly engaged in anticompetitive practices of generation companies (gencos). The 11 gencos identified in the report are the Power Sector Assets and Liabilities Management Corp., Pan-Asia Energy Holdings, Therma Mobile (TMO), CIP II Power Corp., Trans-Asia Power Generation Corp., 1590 Bauang, AP Renewables Inc., Udenna Management Resources Corp., Strategic Power Development Corp., GNPower Mariveles Coal Plant Ltd. and SEM-Calaca. The country’s largest power distribution-utility firm Manila Electric Co. (Meralco) was also found to have committed “market abuse” during the November and December 2013 supply months. Based on the report, Meralco was included because of its agreement with TMO and the manner by which its supply deal with the power producer was carried out. The case stemmed from the P4.15-per-kilowatt-hour (kWh) rate hike that Meralco was supposed to collect in December 2013 and the P5.33-per kWh rate increase that was supposed to be collected in January 2014, the implementation of which, however, was prevented by the Supreme Court. Prior to the release of the report conducted by the ERC IU, the Philippine Electricity Market Corp. also identified the same players that breached the WESM rule on the must offer. Under the must-offer rule, gencos registered in the WESM must declare and offer the maximum generating capacities of their power facilities in the spot market.

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FAO urges PHL to accelerate food security and rural devt investment By Manuel T. Cayon @awimailbox Mindanao Bureau Chief

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AVAO CITY­—The United Nations’ Food and Agriculture Organization (FAO), noting a resurgence in hunger in developing countries like the Philippines, is calling on the country’s leaders to accelerate investment in food security and rural development, especially in Mindanao. José Luis Fernández, FAO representative in the Philippines issued the call during the FAO Year-end Development Partners Forum in Makati City late last month, a belated posting from the FAO information office said. The FAO statement said Fernandez “underscored the need for increased and accelerated investments in food security, rural development, resilience building and peace in Mindanao.” “After steadily declining for over a decade, global hunger is on the rise again, affecting 815 million people in 2016. It is imperative that we reevaluate the way we work to ensure that we remain responsive to the needs of our time. As we have witnessed over the past four decades, bringing safe, affordable and nutritious food to everyone’s table is as important as it is complex.” he said. Fernández said, “Investments in the systems that address the most basic needs of people should continue to be a priority.” “We cannot solve poverty, hunger, lack of education, ensure good health for all, achieve lasting peace and build sustainable cities when access to food and livelihoods, especially in rural areas, are not fully addressed,” he added. It was Vice President Maria Leonor G. Robredo who attended the event as guest of honor.

She lauded the FAO for its presence, saying that the 40 years it was in the country had “enhanced the lives of hundreds of thousands of Filipino families.” “Our generation is tasked with its greatest challenge to eradicate poverty and extreme hunger while ensuring food security for all in a volatile world,” she said. Robredo cited, as an example, the “urgent need to restore of the food-supply chaininareasaffectedbythefive-monthlong armed conflict in Marawi City.” “In communities like Marawi, where the economy and people’s livelihood rely greatly on agriculture, the effects of conflict can be felt deeply across the food-value chain. That is why the job of rebuilding and reconstructing Marawi will have to take into account the reestablishment of sustainable food systems,” she said. The FAO said the Philippines was among the 34 nations that founded FAO in October of 1945 “to ensure humanity’s freedom from hunger, increase levels of nutrition, improve the condition of rural populations and contribute toward an expanding world economy.” It also said the FAO’s work in the country started in the late-1950s with a research program in marine fisheries biology, followed by “several emergency response efforts, including controlling a coconut disease called cadang-cadang, which had already decimated some 10 million trees, and the livelihood recovery assistance in Mindanao after the catastrophic Moro Gulf earthquake and tsunami in 1976.” A FAO country office was later established in November 1977 and officially opened its doors the following year.

PWC backs Buenos Aires Declaration on women economic empowerment By Cai U. Ordinario

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@cuo_bm

he Philippines has thrown its support behind the Buenos Aires Declaration on Women and Trade at the ongoing World Trade Organization (WTO) Ministerial Conference in Argentina. The Philippines was one of over 120 countries and economies that supported the declaration, which also aimed to contribute to efforts that seek to meet the Sustainable Development Goals (SDGs) by 2030. The Philippine Commission on Women (PCW) said the declaration will not only help in meeting SDG 5 on achieving gender equality, but also

SDG 9, which aims to promote inclusive and sustainable industrialization. “Actions toward women’s economic empowerment will not only support the attainment of SDG 5 on achieving gender equality and the empowerment of women and girls; it will also contribute to attaining SDG 9 on building resilient infrastructure, promoting inclusive and sustainable industrialization and fostering innovation. Certainly, women have a place in all these,” PCW Executive Director Emmeline L. Verzosa told the BusinessMirror on Wednesday. The declaration provides that all the signatories share their experiences in crafting trade policies that concern women; best practices in gender-based analysis of trade policies; and methods and procedures for the collection of gender-disaggregated data. The document also provides that, signatories work together with

the WTO to remove barriers that prevent women’s economic empowerment and participation in trade and ensure that Aid for Trade implement more genderresponsive trade policies. The declaration also provides that, over the succeeding months, the members will hold seminars on the promotion of female entrepreneurship and trade; identification of barriers that limit women’s trade participation; and promote financial inclusion and access to trade financing and financial assistance for women traders. The seminars will also focus on enhancing women’s participation in public procurement markets; inclusion of women-led micro small and medium enterprises in value chains; trade facilitation for women; and creating an inventory of information sources and identification of data gaps. “In 2019 we will report on progress toward implementation of this joint declaration on trade and women’s economic empowerment,” the declaration stated. Data from the Philippine Statistics Authority showed that there are around 14 million women in the Philippines this year.

Beachside shirt shop

Textile craftsmen paint the colorful and artistic designs emblazoned on the souvenir shirts at a shop in the world-famous Boracay island resort. More tourists are interested to buy the painted shirts after seeing the way the craftsmen apply painted design on the shirts. ALYSA SALEN

IT-BPM resurgence to propel ’18 office-property market expansion

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he office-property market is expected to continue expanding next year with a resurgence of the information technology-business process management (IT-BPM) and growth of the offshore onlinegaming industry. David Leechiu, CEO of Leechiu Property Consultants, anticipates a “dramatic resurgence” of the IT-BPM industry in 2018 resulting from reaffirmed relations between the Philippines and the United States, and the bicameral version of the comprehensive tax-reform law, which is friendly to the IT-BPM industry. Leechiu noted the recent upgrade of the Philippines’s credit rating is also a positive development. “A handful of the world’s largest companies by market capitalization are in final stages of setting up shared ser-

vices operations that will be employing tens of thousands of Filipinos, which will assure the world that all is well in the Philippines,” he said at a news briefing on Tuesday. Leechiu said there is a “very good chance” that Metro Manila office take up would reach 800,000 to 850,000 square meters (sq m) in 2018. Metro Manila office take-up rate is forecast in 2017 to register at an all-time high of 750,000. As of end-November, take-up was at 728,305 sq m. “Exponential growth from the offshore online-gaming industry fuelled robust office demand and more than made up for a slack from the IT-business process manufacturing Industry,” he said. Leechiu further said online gaming expanded by 306 percent, from only 56,700 sq m in 2016 to 230,102 sq m

A handful of the world’s largest companies by market capitalization are in final stages of setting up shared services operations that will be employing tens of thousands of Filipinos, which will assure the world that all is well in the Philippines.”—Leechiu as of the end of November. IT-BPM take-up, on the other hand, was 28 percent less at 347,660 sq m as of November, from 485,100 sq m in 2016. Online-gaming firms took up spaces mostly in Bay City, the business dis-

tricts rising along Manila Bay. Bay City accounted for 67 percent of all onlinegaming take-up as of last month. Meanwhile, vacancy rate across Metro Manila registered at a manageable 6.62 percent. PNA

Agriculture/Commodities BusinessMirror

www.businessmirror.com.ph

Editor: Jennifer A. Ng • Thursday, December 14, 2017

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PHL has enough chicken for the holidays–group By Jasper Emmanuel Y. Arcalas

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@jearcalas

he country’s chicken supply remains ample and is enough to meet the expected spike in demand for poultry meat during the holiday season, according to the United Broiler Raisers Association (Ubra).

HARVEST TIME IN PUERTO PRINCESA Two hundred and thirty-nine beneficiaries completed their training under

SM Foundation’s Kabalikat sa Kabuhayan rural farming program. The graduates are vegetables farmers, Pantawid Pamilyang Pilipino Program beneficiaries and college students from 29 barangays in Puerto Princesa and the municipalities of Aborlan and Roxas. The culminating activity started with the Harvest Festival, where the fresh produce were marketed to interested buyers. The Kabalikat sa Kabuhayan Farmers’ Training Program is a corporate social responsibility program of SM that aims to provide not only sufficient vegetables for the marginalized farmers but also provide them with alternative means of livelihood. SM FOUNDATION PHOTO

”Supply has been stable for all market segments, although wet-market prices, as usual, are more volatile,” Ubra President Elias Jose Inciong told the BusinessMirror. ”So far, no complaints [on supply]. Higher prices in wet markets have nothing to do with supply levels. Inciong added the latest case of avian influenza in Cabiao, Nueva Ecija, has not affected chicken prices and supply. He revealed that the farm-gate price of broiler could go up to more than P100 per kilogram (kg), from the current P94 to P100 per kg, in the next few weeks due to the expected hike in demand. ”Farm-gate price could increase

Getting some tuna loving: Notes on the international fisheries meeting

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t might not be a highly publicized event but Manila hosted last week an important international conference that will have a huge impact on that grilled tuna you will be eating for this year’s Christmas party—the annual meeting of the Western and Central Pacific Fisheries Commission (WCPFC). The WCPFC, which is based in Micronesia and established in 2005, was tasked to manage and conserve highly migratory fish stocks, such as tuna. The commission is made up of key fishing countries like Japan and the Philippines and the small Pacific islands whose economies rely heavily on its fishery industry. The WCPFC is also mandated to manage and conserve other migratory fish like sharks and manta rays, but, in most of the commission meeting, the most contentious debates center on the sustainability of tuna. This is not surprising as the Western and Central Pacific Ocean is one of the world’s biggest sources of tuna. It accounted for nearly 60 percent of the global tuna catch in 2016—this is equivalent to 2.9 million tons of tuna, worth over $5 billion. And then there’s the fact that tuna is not only highly migratory, but are also widely traded and consumed. Because, let’s face it, our bleeding environmentalist hearts may mourn the extinction of sharks and mantra rays as this will affect the marine biodiversity and other yadah yadah that at best are mostly mental to us. But tuna is different, its possible extinction hits us in the gut. Because unless we can cultivate tuna in our fishponds, the only way we can have tuna is to catch them in the sea. And unless an international body like the WCPFC can legally bind its members to agree on certain measures that will ensure continuous supply of tuna for a long time, we might finally have to say good-bye to canned tuna and tuna sashimi. The good news is, after a marathon five-day meeting which lasted until 3 a.m. last Friday (December 8), WCPFC membercountries and territories finally agreed to a set of interim measures for the conservation and management of tropical tuna varieties like skipjack (used mostly for canned tuna), bigeye and yel-

Prime Sarmiento

prime commodities lowfin (both of which are served to us either as grilled tuna steaks or as ahi tuna sushi/sashimi). These measures, which will be in place in the next three years, include limiting the use of fish-aggregating devices (FADs)—buoys used to attract and catch fish. When large fishing vessels use large purseseine nets with FADs to catch tuna, these nets also end up accidentally catching other marine animals like sharks, sea turtles and dolphins, hence threatening the marine ocean systems. These nets also accidentally catch juvenile tuna, which can keep them from breeding and repopulating. The WCPFC has prohibited the use of FADs for three months in the exclusive economic zones (EEZs) and two months in the high seas, excluding Kiribati-flagged vessels which fish in the high seas adjacent to the Kiribati’s EEZ, and Philippine vessels operating in high seas pocket one. The WCPFC has also set a certain number of fishing days in the high seas and EEZs. But while this is a welcome development, several conservation and public-interest groups are not happy with one major provision in the agreed conservation and management measures for tuna—that is increasing the catch limit for bigeye tuna by nearly 10 percent more than current levels, or practically ignoring the scientific committee’s recommendation that, while bigeye tuna is not overfished, it’s still important to maintain the catch limit at its current level so as not to decrease biomass spawning stock. A statement issued by Amanda Nickson, director of international fisheries for The Pew Charitable Trusts, said tropical tuna management in the western and central Pacific Ocean “took a disappointing turn when governments at the Western and Central Pacific Fisheries Commission agreed to a measure that does not achieve the scientific advice, leading to an unacceptable risk that the bigeye tuna population

will drop below healthy levels.” n nn I find it encouraging that cannedtuna manufacturers in Southeast Asia are also taking the sustainability issue to heart. After all, if the manufacturers themselves refused to recognize the importance of conservation and management measures, how can we consumers expect to have a more sustainably sourced canned tuna? Sure, we can always boycott products that are not ethically or sustainably produced, but unless the manufacturers themselves are pressured (or encouraged) to do the right thing, don’t expect things to change. This is why I welcome the Southeast Asia Cannery Intervention’s position paper that was submitted in last week’s WCPFC meeting. The position paper, signed by some of the region’s biggest canneries, including the Philippines’s Alliance Select Foods International Inc., Thai Union and PT Aneka Tuna Indonesia, called for stronger conservation and management measures, including limiting the use of FADs and longliners, promoting a low-impact fishing method like handlining and using pole and liner and stopping slave labor employed in some fishing vessels. The processors in Southeast Asia also committed to “implement reforms to address human rights, transshipment, longline and FADs with clear milestones by 2020.” They also agreed to more dialogues with key stakeholders, including government agencies, non-governmental organizations (NGOs), workers and consumers groups. nnn If there’s one thing that can be frustrating about the WCPFC meeting, the lack of transparency is high up on the list. The last time Manila hosted this event was in 2012, and I remembered that, at that time, a journalist like me can join the sessions as a nonparticipating observer. I’m also free to interview officials and other concerned parties. I honestly don’t know why things changed this year as I didn’t only had to register (which is on par for the course given the number of hao siao reporters out there), but journalists were also blocked from attending meetings and from conducting ambush interviews. If we want interviews with officials, we had to schedule it by submitting a

request to the media center which was managed by the Department of Agriculture and the Bureau of Fisheries and Aquatic Resources. Which I dutifully did, and as of this writing, I’m still waiting for that interview schedule. But it’s not only the media that had a hard time gaining access to an event which has a huge impact to the public. Vince Cinches, head of delegation from Greenpeace Southeast Asia-Philippines, questioned why conservation NGOs were excluded in some key discussions. I asked him if such exclusion happened in past meetings held in other countries, such as Fiji and Indonesia. Cinches, who has been attending these meetings for the past few years, said that was never an issue in other WCPFC meetings. In a statement issued after the meeting, Cinches said the new measure raising catch limit for bigeye tuna “is more of a political compromise arrived behind closed doors with some Pacific nations, such as Papua New Guinea, pushing NGOs out. It failed to recognize the scientific advice nor side on precautionary measures.” He then suggested the need for a more open discussion that will include other stakeholders like NGOs and small-scale tuna fishers. nnn It will take more than my column to discuss tuna and sustainability. But if you want to know more about it, there are some resources online that you might want to check out. If you want to know more about slave labor in the high seas, you might want to read this Pulitzer Prize-winning investigative piece by the Associated Press: https://www. ap.org/explore/seafood-from-slaves. If you want to know if your favorite brand of canned tuna is sustainably sourced, you can download Greenpeace’s report on Southeast Asian canneries at this link: http://www.greenpeace.org/seasia/ PageFiles/742678/GreenpeaceCanned%20Tuna%20Report%20 2016%20online.pdf. Prime Sarmiento is a longtime business journalist who specializes in food, agribusiness and commoditiestrade reporting. Her stories have been published in both local and international publications, including Nikkei Asian Review, China Daily, Science and Development Network and Dow Jones Newswires. Comments and ideas are welcome at prime.sarmiento@gmail.com.

but after Christmas, it would collapse,” Inciong said. Poultr y growers in Central Luzon incurred huge losses after the government announced in August that bird flu struck Pampanga. The farm-gate price of broiler fell to as much as P15 per kg, as consumers avoided eating chicken for weeks following the announcement. Farms in Jaen and San Isidro in Nueva Ecija were also affected by avian influenza (AI). Poultry growers in Pampanga and Nueva Ecija were forced to cull their flocks to prevent the spread of the virus. While a farm in Cabiao, Nueva Ecija, was struck by the virus last

month, farm-gate and retail prices were not affected because of the government’s timely intervention, according to Agriculture Secretary Emmanuel F. Piñol. “The earlier AI incident had a massive impact on the prices of chicken because we did not know what to do then. So we took extra precautionary measures because that time, we did not know the extent of the problem,” Piñol said. “But this time around, it is farmspecific. What was hit was one farm, in Cabiao. We did not make a big fuss out of it anymore [as] it is already under control,” he added. Data from the National Meat Inspection Service, as of November 27, indicated that traders have started to fill up cold storages as the country’s total dressed-chicken inventory grew by 31.43 percent to 27,217.48 metric tons (MT), from the previous week’s 20,708.99 MT. However, the figure was 28.04 percent lower than the 37,822.56 MT recorded in the same period last year. Data from the Philippine Statistics Authority (PSA) showed that the retail price of dressed chicken by end-November was unchanged. For instance, the retail price of dressed chicken in the National Capital Region remained at P150 per kilogram, PSA data showed.

UP prof develops test to detect shellfish toxins I By Elmer Recuerdo

| Correspondent

LOILO CITY— A University of the Philippines (UP) professor developed a method to immediately detect the presence of toxins in shellfish that could help minimize casualties in many coastal communities prone to paralytic shellfish poisoning. Dr. Sharon Nuñal, a faculty member of the Institute of Fish Processing Technology, College of Fisheries and Ocean Sciences at the UP Visayas, came up with a detection tool using molecular techniques that would determine the presence of pathogens and bacteria in oysters and mussels. Nuñal presented her study to a group of community journalists participating in a science journalism workshop “Blue Economy for Sustainable Seas” organized by the UP College of Mass Communication, in line with its Communicating Science and Technology/Research and Development of the University of the Philippines program. She said using molecular techniques offers many advantages over conventional methods of identifying the pathogens in shellfish. She added molecular technique saves time, has high throughput, reduces spoilage and contamination and increases the marketability of products. “You can get the result within hours as compared to the usual two to seven days, depending on the bacteria, when you have to study the specimen on a petri dish. This is only for bacterial analysis, and testing for viruses is another thing,” she said. The traditional way of studying the toxicity of shellfish samples takes many days that some victims die first before a ban on gathering and selling of shellfish in red-tide affected areas is imposed. Even without red tide, many shellfish species have high levels of bacteria and toxic pathogens and consuming them could cause poisoning. The World Health Organization estimates around 600 million people worldwide, or 1 in every 10 people, have become ill from eating contaminated food, resulting in the death of around 420,000 people. Nuñal said people get sick due to the bacteria and viruses that are not killed while cooking shellfish. “Oysters and mussels are stationary and are known filter-feeders. They maintain and accumulate what is in the water, including bacteria and viruses,” she added. “The manner that we cook is not enough to eliminate all the viruses that are present.” Data from the Department of Health showed 1.4 million Filipinos get salmonella infection from eating shellfish every year. Also, 3 in every 4 people who eat shellfish are at risk of

salmonella poisoning. Infection caused by Escherichia coli, a type of bacteria commonly found in human waste, made up 2 percent of food-borne infection cases recorded in the country from 1995 to 2004. In the same period, 985 cases of salmonella infection were recorded out of 3,313 cases of food-borne poisoning. Other diseases that have been associated with eating seafood include cholera, hepatitis A and norovirus infection. Norovirus is very contagious and can cause stomach, or intestine inflammation, leading to stomach pain, nausea and diarrhea. “It is important to determine the presence of these bacteria and pathogens in oyster and mussels,” she said. “Bacteria and viruses contain DNA that can be explored so that detection can be more specific and more sensitive even if there are very few samples.” Nuñal’s research project is funded by the UP Balik PhD, a program of the University of the Philippines to invite foreign-trained Filipinos with postdoctoral degree to pursue research and mentor undergraduate and graduate students in the Philippines.

Making seafood safe

Data from the Department of Agriculture indicated that Filipinos consume an average of 7.48 kilograms of seafood, including shellfish, a year. In 2016 18,800 metric tons (MT) of mussels and 19,500 MT of oysters were harvested, providing additional income to thousands of fishermen in the country. Nuñal said early detection of presence of harmful pathogens in seafood will help ensure that what goes to the market is safe for human consumption. “What we want to achieve is to develop a protocol that can be adopted by different stakeholders in the supply chain from producers to processors,” she said. She added that this will also support food-safety programs of regulatory agencies like the Bureau of Fisheries and Aquatic Resources. “We are lobbying for the adoption of the protocol by government agencies. We don’t know how far, or near, we are now. But the science side is already complete,” she said. Nuñal added that having a reliable detection method for food-borne pathogens will make the country’s seafood exports compliant with international standards. “We have the potential to export mussels and oysters to the United States, Europe and other Asian countries, which will mean increased income for our marginal fishermen.” “Scientists and researchers are in continuous search for improved tools that are faster, more accurate and more sensitive than ever before,” Nuñal said. “Everybody has a role to play in keeping food safe.”

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S the curtain of “unfair trade” closes for the interests of farmers from developing countries, the Philippines stands in the middle: no one’s going home yet.

When the Philippine delegation to the 11th Ministerial Conference (MC11) of the World Trade Organization (WTO) arrived in Buenos Aires, Argentina, where more than 160 trade officials met to discuss the future of global trade, they came with one goal: protect the country’s small-scale farmers. The Ministerial Conference, which is attended by trade ministers and other senior officials from the organization’s 164 members, is the highest decisionmaking body of the WTO. Under the “Marrakesh Agreement Establishing the WTO,” the Ministerial Conference is set to meet at least once every two years. Discussions during the Ministerial Conference revolve on issues that would pave the way for the growth of global trade. These issues may include talks on agricultural goods, export subsidies, farm productivity, technology, gender and anything under the sun that has something to do with trade. But some global trade issues have remained contentious, such as negotiations on agriculture, including commitments on tariff cuts and protecting domestic farm sectors.

Safeguard

JUST before the Philippine delegation left for MC11, which started on December 11, President Duterte instructed them to get the best for Filipino farmers. “Of course [we will protect the farmers]. The President will always protect the farmers. But not to the point of straining the Philippines’ relationship with other countries,” Agriculture Secretary Emmanuel F. Piñol said in an interview during the opening of the 14th Regular Session of the Western and Central Pacific Fisheries Commission held in Pasay City on December 3. “We have to negotiate what is best for Philippine agriculture. I will just play a supporting role to the trade secretary because he is the head of the delegation,” added Piñol before heading for the airport that day. “But I assure the Filipino people that, as agriculture secretary, I will make sure that our interests are protected.” At the onset of the three-day MC11, the country’s trade negotiators have already rejected the efforts of rich countries to implement deeper tariff cuts on farm products. The Philippine trade negotiators were lukewarm to the idea of allowing developing countries to protect their domestic industries from harmful import surges. In his speech delivered before fellow farm ministers, Piñol emphasized that the Philippines will not agree to new agricultural deals without passage of a concrete special safeguard mechanism (SSM) for developing countries and least developed countries (LDCs). “The Philippines once more wants to reiterate its firm decision that none of the priority of the WTO members provide sufficient political basis for us to support any concrete substantive outcome in this conference in the absence of a specific solution on SSM,” he said. “This minimum requirement is even critical for the Philippines as members continue to evade the needed reforms in domestic support, especially phasing out tradedistorting support, including an interim commitment to limit sup-

ports at the product-specific level,” he added.

Push

PIÑOL urged WTO member-countries to act on the Philippine proposal to establishing SSM if they want to get the Southeast Asian country’s nod on any agricultural deal in the ongoing MC11. “Indeed, time is not on our side and members must not second guess our resolve if we are to make MC11 truly a success,” he said. “I therefore call on members with extreme urgency to act now and engage us on our proposal to have a specific and targeted solution on SSG [special safeguards] for some members on the basis of our proposal under ‘JOB AG 121’ and ‘JOB AG 123.’” SSM is a trade measure that will allow developing countries to raise tariffs temporarily to deal with import surges or price falls, according to the WTO. It has become one of the most contentious trade issues within the WTO, especially between developed and developing countries. In 2004 WTO member-countries agreed that SSM will be established for use by developing countries, as indicated in the so-called July Framework. In the 2005 Hong Kong Declaration, WTO developing country members will have the right to recourse to SSM based on import quantity and price triggers. However, 13 years after the SSM was first floated within the WTO, a concrete framework on it has yet to be crafted. One of the most contentious issues concerning SSM is the “trigger level” and the rate of tariffs that will be imposed. Under the current WTO Agreement on Agriculture, the Philippines has applied SSG to at least 118 farm commodities. SSG serves as contingency restrictions on imports taken temporarily to deal with special circumstances, such as a sudden surge in imports, according to the WTO.

Proposal

LAST month, the Philippines filed a proposal that sought to improve the current SSG measures within the WTO framework. This was after oppositions on the creation of an SSM were raised. Raul Q. Montemayor, national business manager and program officer of the Federation of Free Farmers of the Philippines, told the BusinessMirror that since a lot of WTO member-countries derail talks on SSM, the country had to recourse to an alternative plan, which is to improve the current SSG system. “What we presented is actually an alternative, which is to improve the existing SSG, particularly a price-based SSG,” he said. “It is actually an improved version of the current SSG in the hopes that they would agree on this.” Montemayor, who is part of the Philippine delegation to MC11, explained that the country proposed the changes as the present SSG regime has stiff conditions making it ineffective to protect local farm sectors. For one, the formula used to compute a country’s trigger price is still based on 1986-1988 prices, which is somehow inappropriate to present global prices, according to Montemayor. “For example, for our rice imports, our trigger price is around P4 to P4.50 based on the 19861988 formula. But when you buy

A FARMER plants rice in the rain at the famed Banaue Rice Terraces, 2,000-year-old terraces that were carved into the mountains of Ifugao. HIJODEPONGGOL | DREAMSTIME

rice today in the international market, it costs around P15 per kilogram,” he said. “So, in that sense we cannot use the SSG.” Under the Philippine proposal, the present 1986-1988 trigger price basis for SSG will be changed to a rolling three-year average import price. Meaning, the trigger price, which is the price point wherein a country could invoke SSG, will depend on the prevailing import price in the recent three-year period. Furthermore, the Philippines proposed to phase out the current complicated formula for additional tariffs when invoking SSG. Under its proposal, once the SSG is invoked, affected countries could slap an additional tariff duty on the imported goods by as much as 90 percent of the price difference between the trigger price and imported price.

At the onset of the three-day 11th Ministerial Conference, the country’s trade negotiators have already rejected the efforts of rich countries to implement deeper tariff cuts on farm products. The Philippine trade negotiators were lukewarm to the idea of allowing developing countries to protect their domestic industries from harmful import surges.

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debates future of global trade

This is different from the current SSG regime wherein countries will apply additional tariffs for imports as a trade remedy. “For example, your trigger price for poultry imports is P100 and an P80 chicken enters your border, so that will allow you to invoke SSG. So 90 percent of P20 is P18, then that will be your additional tariff,” Montemayor said. “You will not set a tariff value in comparison to your trigger price. And this proposed SSG change applies per shipment, because there could be shipments that do not go below trigger price,” Montemayor added.

‘High time’

DURING his speech at the plenary session, Trade Secretary Ramon M. Lopez said inequities in agricultural trade continue to exist as few WTO member-countries maintain their

large subsidies on farm products. “It is high time that members made bold contributions today, once and for all, to address these gross imbalances and inequities in agriculture,” Lopez, who heads the Philippine delegation to MC11, said. “I therefore call on members to substantially reduce, toward elimination, trade-distorting subsidies by phasing out AMS [aggregate measurement of support] and limit supports at the product-specific level.” The Trade Secretary pointed out that it is high time that an effective SSM be created at WTO as farm sectors of developing countries and LDCs have been damaged by highly subsidized exports for more than a decade now. “Developing countries and LDCs must also be provided with an accessible and effective trade remedy tool, through the estab-

lishment of a special safeguard mechanism [SSM] that can protect their small and subsistence farmers from import surges and price depressions and shield them from subsidized exports,” he said. “After more than a decade of negotiations for SSM and ministers’ reaffirmation of our political commitment, developing countries and LDCs cannot get back home empty-handed once more.” In a ministerial communiqué, the Group of 33 (G-33), which includes the Philippines, said the establishment of an SSM remains as the priority of the group to safeguard their food security, livelihood security and rural development interests. “We wish also to reiterate that the Nairobi Ministerial Decision on SSM has strengthened the mandate in the July Framework and the Hong Kong Ministerial Decla-

ration and reaffirms that developing members shall have recourse to both a price-based and volumebased SSM,” G-33 said in the document dated December 10. “Members shall be engaged constructively and focus the discussion on outstanding issues and refrain from making any linkage with other issues, with a view to find a pro-development and balanced SSM, which is accessible and effective in addressing the impact of import surges and price depressions caused by short-term and cyclical volatilities,” the group added.

Opposition

FOR his part, Montemayor said the establishment of an SSM is a must in the current global trade regime as small-scale farmers remain at risk from highly subsidized imported goods. “This is our trade remedy and

we need this at a time wherein all our tariffs are low. So there’s more tendency for imports to come in and that’s why we need remedies like SSM,” he said. However, talks on the establishment of SSM in Geneva, Switzerland, before going to Argentina have been stalled as WTO member-countries expressed divergent views on the trade remedy, with most nations showing disinterest to discuss the issue, according to a Geneva-based trade official. Jonathan Hepburn, agriculture senior program manager at Geneva-based International Centre for Trade and Sustainable Development, said the passage of an effective and concrete SSM at the WTO has been delayed due to changes in priorities and interests of member-countries throughout the years. “The negotiating dynamic at the WTO has evolved significantly since the Doha Round talks were launched in 2001—partly because government policies and international markets have changed, and partly because talks on trade have moved ahead in other fora, such as through bilateral and regional talks,” Hepburn told the BusinessMirror. “Today, a number of exporting countries say they are only willing to pursue talks on a special safeguard mechanism as part of a broader negotiation on market access—including both developed and developing country exporters,” he added. Hepburn noted that the Philippines’ negotiating stance on new agriculture deals at MC11 reflects the continued significance for its smallscale farmers. Hepburn added that it is unlikely that there could be an SSM outcome at the end of MC11 as signified by the WTO Committee on Agriculture Chair. “At present, the chair of the WTO agriculture negotiations has told the membership that he doesn’t see the SSM as likely to be able to generate the consensus needed for an outcome at the 11th Ministerial Conference,” he said. For his part, Roehlano M. Briones, Philippine Institute for Development Studies senior research fellow, said developed countries remain lukewarm to the creation of SSM as their exports would be the ones to be put at risk with such trade measure. “That’s natural. They will probably find themselves on the receiving end of SSM complaints,” Briones told the BusinessMirror. Briones said the Philippines could capitalize SSM to protect commodities largely produced by its local sectors such as rice, corn, poultry and hogs. “They found the current framework lacking of punitive tariffs to impose and has stiff trigger mechanisms, so [creation of SSM] is really important for the Philippine side,” he said. “From my perspective, really, this is to assure domestic stakeholders that they will not be disadvantaged by the onslaught of cheap foreign imports. It’s more like a political gambit to appease local stakeholders,” he added. For Pork Producers Federation of the Philippines Inc. President Edwin G. Chen, the establishment of a working and effective special safeguard measure would ensure that local hog producers would not incur losses. Chen argued that the hog sector is prone to import surge as tariffs imposed on pork imports are low. “That [SSM] is very important. In the past we have become dumping grounds [of cheap imports],” Chen told the BusinessMirror. “For example, imports of [pork] offal,rinds and fats are being dumped here with very low tariff rates of 5 percent, 7 percent and 10 percent. And they are without [minimum access volume], so they have open volume,” Chen added. Chen said pork import surges

tend to depress the farm-gate price of locally produced pork, bringing them below the normal average price level.

MSMEs

ANOTHER priority of the Philippines in the MC11 is the development of micro, small and medium enterprises, or MSMEs. “On MSMEs, our economy is comprised mainly [that’s 99.6 percent] of small enterprises that serve as the backbone and the prime mover of both domestic and regional growth. The decisions we make must therefore be effective and meaningful to them,” Lopez said in his speech. “In this regard, the Philippines supports the establishment of a work program on MSMEs that would further enhance their ability to participate meaningfully in international trade whether directly or as part of global value chains. There must be more of competence and capacity building sharing,” Lopez added. The trade chief said the work program should also look at the different characterizations of MSMEs at national levels to create the appropriate support and assistance for them. “Let us work toward positive efforts such as aligning size definition to ensure that real MSMEs, particularly those in developing countries, secure a share in the growth in international trade commensurate with the needs of their development,” Lopez said. In November, the Friends of MSMEs, a 28-nation group that includes the Philippines, asked the WTO to establish a program that would reduce trade costs and make it easier for more MSMEs to participate in and benefit from international trade. The group submitted a draft ministerial decision on establishing a work program for MSMEs to the WTO General Council. The draft ministerial decision, a copy of which was obtained by the BusinessMirror, has been circulated among WTO membercountries upon the request of the Friends of MSMEs. The group hopes that it will get the nod of member-countries at MC11. “Costs related to foreign trade operations represent a significant burden for MSMEs interested in participating in international trade,” it read. Once the draft ministerial decision is adopted by WTO membercountries at MC11, a work program addressing the issues surrounding the participation of MSMEs in global trade shall be established. Among the issues to be tackled by the program is the improvement of access to information on trade requirements, regulations and markets for MSMEs. It will also address the ways to promote a more “predictable” regulatory environment for MSMEs. Measures that contribute to reducing trade costs for MSMEs in areas, such as trade facilitation, shipping and logistics, and procedures and requirements related to origin will be identified. The draft ministerial decision indicated that access to trade finance for MSMEs, including those through cooperation with other multilateral institutions, will be promoted. The work program must identify MSMEs’ issues that could be addressed in WTO Trade Policy reports and consider how they could benefit from technical assistance and capacity-building initiatives. “The discussions under the work program shall favor horizontal and nondiscriminatory solutions, which are likely to yield benefits for the participation of MSMEs in international trade, taking into account the specific needs of developing countries and least-developed countries,” the draft ministerial decision read.

Banking&Finance BusinessMirror

A8 Thursday, December 14, 2017 • Editor: Jun B. Vallecera

SSS pensioners residing in PHL no longer need Acop

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ome 1.32 million retiree pensioners of state-run Social Security System (SSS) are no longer required to report for the Annual Confirmation of Pensioners Program (Acop), or the yearly reporting to SSS, to ensure the continuous payment of their monthly pension. SSS President and CEO Emmanuel F. Dooc said 58.64 percent of the 2.3 million pensioners as of end-September 2017 will benefit from the removal of the Acop compliance requirement for retiree pensioners based in the Philippines. “In fulfillment of our duty to bring better quality services to our dear pensioners, we are glad to announce that retiree pensioners who are residing here in the Philippines are no longer required to go to any SSS branch on their birth month for the Acop starting October 30 this year,” Dooc said. Instead, SSS is conducting verification procedure to confirm if the pensioner is still alive and entitled to SSS benefits. The Acop requires pensioners to annually report to SSS to ensure the continuous payment of their benefits. It was implemented in 2012 to avoid circumstances, wherein the rightful recipients are not receiving their monthly benefit. All retirees residing outside the countr y, total disability, sur vivor pensioners and dependent children and their guardian, meanwhile, are still required to comply with the Acop. Based on SSS Circular 2017-012, the schedule of compliance for retiree pensioners residing abroad and total disability pensioners is on their birth month; survivor pensioners on the birth month of the deceased member; while minor or incapacitated dependent pensioners should comply with their guardian on the birth month of the member or deceased member. “C o m p l i a n c e s i x m o nt h s b e fore the schedule shall be allowed a nd considered a s ea rly compl iance if the pensioner complied with t he Acop on t he prev ious yea r,” the circular read. Dooc clarified, however, that Acop compliance for retiree pensioners based in the Philippines who are 85 years old and above and survivor pensioners who cannot report personally due to sickness, illness or injury would still be checked through a mandatory home visit by SSS employees. Me d ic a l Fie ldwork S e r v ice or the home visit by SSS doctors may also be provided for total disability pensioners. SSS reminded its pensioners that non-compliance with the Acop will result in the automatic suspension of their pension on the month after the birth month of the pensioner or SSS member. “Resumption of pension shall be within two months from the date of the compliance of the pensioner. All recalled pensions from the pensioner’s depository bank, if any, and all accrued pensioner shall be remitted to the pensioner’s depository bank for crediting to the pensioner’s account,” SSS said. As of end-September this year, total number of SSS pensioners stood at 2.31 million.

BSP assures sufficient liquidity during the long Christmas holidays

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By Bianca Cuaresma

@BcuaresmaBM

ore efficient use of bank funds allowed the monetary authorities on Wednesday temporarily to stop offering its 28-day term deposits at next week’s auction, the Bangko Sentral ng Pilipinas (BSP) said. The one-off cessation highlights the ample rather than excessive levels of liquidity in the financial system, as the Philippines rushes forward to the long Christmas holidays ahead when consumption activities are at their most frenetic.

Guinigundo the coming week, hence, the adjustment. “TDF offerings are based on our careful liquidity forecasts. Our numbers suggest that banks continue to lend more, buy FX for imports, debt servicing and foreign investments. Hence, they have sustained demand for funds that would translate into lower excess demand in the system,” Guinigundo told reporters. “It follows that the BSP should trim its open market operation lest we see tight market conditions. Banks continue

to demand very short-term instruments like the seven-day TDF to allow them greater flexibility in servicing the needs of their clients and deploying the rest of their funds,” he added. Guinigundo further said the banks have greater demand for funds on account of the long holidays. Demand for the 28-day TDF on Wednesday was rather thin best indicated by continued undersubscription during the week. In particular, the banks sought to deploy an aggregate of only P33 billion during the week, significantly less than the P40 billion the BSP requires to accept and take custody of funds that otherwise would only serve no one any good by being idle for roughly the equivalent of a month. The seven-day TDF was also undersubscribed, as bids aggregated only P38.92 during the week versus the total BSP offer of P40 billion. The 28-day TDF rate went up this week to 3.4954 percent, from only 3.494 percent last week. As for the seven-day TDF, the rate also jumped higher to 3.4542 percent, from 3.4171 percent last week.

In its indicative calendar on Wednesday, the BSP said there would be no 28day term-deposit offering on December 20. The volume of the seven-day term-deposit facility (TDF), however,

was kept at P40 billion for next week. BSP Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo said a higher demand for funds is expected from banks and financial institutions in

Banks in Asia Pacific show stable outlook

Stronger Manila-Tokyo economic relations seen

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oody’s Investors Service said banking systems in Asia Pacific show a stable outlook for 2018, but that challenges are apparent in terms of long-term risks related to the high level of private-sector leverage. “Solvency metrics will be stable in most of the banking systems rated by Moody’s in Asia Pacific, driven by a synchronized global recovery and moderate credit growth,” said Eugene Tarzimanov, vice president and senior credit officer for Moody’s Financial Institutions Group. “Furthermore, bank funding and liquidity will remain strong, while most governments will maintain their supportive stance toward the banks, with a low likelihood that senior creditors will be required to bail-in banks,” Tarzimanov added. Moody’s conclusions are contained in its just-released “Banks—Asia Pacific, 2018 Outlook.” Of the 16 banking systems discussed, two have positive outlook, one negative and the remaining 13 were rated stable. Support for banks’ asset quality comes from the steady global and regional economic recovery, as well as largely stable commodity prices, while problem loan ratios are steadying and problem loan coverage is generally strong. In addition, capital buffers have improved due to moderate growth in risk-weighted assets and more stringent regulatory requirements, and profitability at the banks will be broadly stable in 2018. Funding and liquidity also remain a strength, and Asian banks are mostly depositfunded with liquid balance sheets, while their reliance on wholesale funding is moderate. Meanwhile, banks in Australia and New Zealand—which rely more on wholesale funding —have shown tangible improvements since 2008. However, the high level of private-sector leverage—both corporate and household —remains a medium-term risk but will not spill over into bank balance sheets in 2018. In this context, China and India are most exposed to high corporate leverage risks, while Australia, New Zealand and Korea are most exposed to household-related risks.

Case clippings

By Justice S J Ranada Jr.

CIVIL PROCEDURE–dismissal with prejudice An order or a judgment is deemed final when it finally disposes of a pending action, so that nothing more can be done with it in the trial court. A dismissal with prejudice is deemed an adjudication on the merits, and it disallows and bars the refiling of the complaint. It is a final judgment and the case becomes res judicata on the claims that were or could have been brought in it. HGL v. Hon Penuela 05 Jan. 2016

www.businessmirror.com.ph

GR 181353 Leonardo-De Castro, J

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he Japan External Trade Organization (Jetro) has vowed to further boost trade and investments between Manila and Tokyo, underscoring the vast investment potentials in the country, according to the Department of Finance (DOF). In a letter to Finance Secretary Carlos G. Dominguez III, Jetro Executive Vice President Yuri Sato also cited the success of the Philippine economic briefing that happened in September in Tokyo. That event, he said, opened the eyes of Japanese investors to the vast investment potentials under the government’s “Build, Build, Build” infrastructure modernization program. “With seven key Cabinet members of the Philippine government presenting their commitment to Japanese investors regarding the deregulation of foreign direct investments and tax reform,

the briefing received high praise from participants,” Sato said. The Jetro is a Japanese governmentrelated organization that works to promote mutual trade and investments between Japan and the rest of the world. “Jetro will continue its efforts to increase cooperative activities between the Philippines and Japan. We would appreciate your continued kind support and encouragement,” she said. At the briefing in Tokyo, Dominguez cited the robust and mutually beneficial relationship between Manila and Tokyo for the past six decades and thanked Japan for its support for continued Philippine economic development under the watch of Japanese Prime Minister Shinzo Abe who has pledged a ¥1-trillion investment and development-aid package for the Philippines. According to Dominguez, the country’s

proposed subway line made feasible and possible through Japanese financing and technical support will be “a great monument to the friendship” between the two countries. The exchange of notes between Manila and Tokyo for the ¥104.5-billion loan for the Metro Manila Subway Project (Phase 1) was signed in November when Prime Minister Abe was a guest of the state and represented his country at the 31st Asean Summit and Related Meetings. Apart from Dominguez, the other high-ranking officials at the briefing were Executive Secretary Salvador C. Medialdea, Socioeconomic Planning Secretary Ernesto M. Pernia, Budget Secretary Benjamin E. Diokno, Public Works Secretary Mark A. Villar, Transportation Secretary Arthur P. Tugade and Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla Jr. Rea Cu

Association board-recruitment process

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aving an organized board-recruitment process in place not only makes it possible to fill vacancies on a board in an effective and speedy manner, but it creates a foundation for building a skillful and diverse board. This is according to BoardSource, a Washington, D.C.-based nonprofit organization, which specializes on board service and governance, strategy and planning, whose article below I am sharing with you.

Board profile

To achieve the best results, define your goals first. Start by analyzing the present composition of your board. A board profile can help you determine the specific skills and qualities that would benefit your board. Do you need to find more people who are particularly well connected with your constituents? Is your board diverse enough to enable you to benefit from different points of view? Do you need extra fundraising capacity? These are some of the questions you may ask yourselves.

Governance committee

Your search for board members should be ongoing. The governance committee is essential for board-member recruitment as it focuses on the search process on a regular basis. One of the committee’s tasks is to find the best candidates, convince them of the benefits of board service, present the candidates to the full board, and after the final nomination, make sure the new board members are well equipped to do the best possible job.

Search strategies

A continually changing and growing pool of candidates adds to the success of a governance committee. Committee

that this is not the right time for him or her to take on additional responsibilities, you should acknowledge it.

Association World Octavio Peralta members constantly need to observe their environment and community to locate suitable prospects. Committee members need to enhance the profile of the association and make its mission known. They need to portray the board member’s role objectively and accurately, as well as present any challenges in positive terms. In other words, mere willingness to join is not enough; explicit commitment to serve is a must.

The CEO’s role in the board -recruitment process

The CEO executive director, secretarygeneral, etc.), having the most intimate knowledge of the association, can provide valuable assistance to the governance committee by helping assess the organization’s and the board’s current leadership needs, identifying valuable prospects and helping to inform and integrate new board members into their new roles.

Cultivation process

Molding prospects into willing, eager and capable new board members can be time consuming. Decide first who is going to make the initial contact. If a board member knows the prospect, he or she might invite the prospect to a meeting to discuss board service. But it is important to be sensitive to the reaction of the prospect. If he or she clearly indicates

Extending the invitation to join the board

If the cultivation process has been successful and the prospect clearly indicates his or her willingness to being considered as an official candidate (after understanding what the commitment means), the governance committee presents him or her to the full board for a vote. After the board has approved membership, the chairman or another suitable board member will extend an official invitation to the newly chosen member.

Orientation

All newly elected board members need a thorough orientation, no matter how extensive their previous board experience is. Every board has its special characteristics, personal dynamics, requirements for involvement and a structure that needs clarification. The governance committee with the chief executive’s involvement is normally in the best position to organize orientation for new board members, taking care to invite as many current members as possible. The column contributor, Octavio Peralta, is concurrently the secretary-general of the Association of Development Financing Institutions in Asia and the Pacific (Adfiap) and CEO of the Philippine Council of Associations and Association Executives (PCAAE). PCAAE enjoys the support of Adfiap, the Tourism Promotions Board and the Philippine International Convention Center. E-mail obp@adfiap.org.

The Regions BusinessMirror

www.businessmirror.com.ph

Editor: Efleda P. Campos • Thursday, December 14, 2017

A9

Pampanga gov cites efforts of Bantay Bayan

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By Joel P. Mapiles | Correspondent

ITY OF SAN FERNANDO, Pampanga—Gov. Lilia Pineda, together with Vice Gov. Dennis Pineda, cited on Wednesday the efforts of 5,679 Bantay Bayan members for curbing illegal drugs and reducing the crime rate in the province.

“With your help, Pampanga is now one of the peaceful provinces in Central Luzon,” the lady governor told the Bantay Bayan members from the Second District (2,796) and Third District (2,883) during the Year-End Assessment on Managing Man-Made Disasters held separately at the Lubao Gymnasium and Bren Z. Guiao Convention Center. D u r i ng t he e vent , P i ned a recognized at least 66 senior members of the Bantay Bayan

PAMPANGA Gov. Lilia Pineda recognizes 66 older members of Bantay Bayan aged at least 70 years old during the Year-End Assessment on Managing Man-Made Disasters held at Bren Z. Guiao Convention Center. JUN JASO/PIO

aged 70 yea rs old a nd older for render ing voluntar y serv i c e s t o t he i r c o m mu n it ie s despite their age. T he s e n ior B a nt ay B ay a n members received P2,000 each, or a total of P132,000 from the provincial government. The lady governor said a separate recognition will be organized for Bantay Bayan members of the province who have been in service for years. She enumerated several benefits for Bantay Bayan members, suc h a s f ree hos pit a l i z at io n t h rou g h Ph i l He a lt h and free tuition fees to state universit ies and col leges for their children. In a brief speech, Third District Board Member Rosve Henson applauded the senior Bantay Bayan members, noting old age is not an excuse or barrier in serving the community. Members of Bantay Bayan individually received two whole chickens, one pack of hotdogs and P500 each amounting to P2,839,500. A l s o p r e s e nt d u r i n g t h e prog ram were Board Members Cherry Manalo, Jun Canlas, Jerome Tubig, PCL President Olga Frances-David Dizon and Provincial Police Director Joel Consulta.

Neda okays 2 Korea-funded infra projects in Visayas By Cai Ordinario @cuo_bm

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HE interagency Investment Coordination Committee (ICC) Cabinet Committee (Cabcom) approved the loan validity extension for two Koreanfunded infrastructure projects in the Visayas in its last meeting for the year. In a statement, the National Economic and Development Aurhority (Neda) said the two projects—the Samar Pacific Coastal Road and the second stage of the Jalaur River Multi-purpose Project—encountered implementation delays, the reason for the loan extensions. The ICC-Cabcom approved the request of the Department of Public Works and Highways (DPWH) to extend the loan validity for the Samar Pacific Coastal Road Project and the 46-month extension of the National Irrigation Administration (NIA) for the Jalaur River Multi-purpose Project.

The Neda said the DPWH requested the loan validity to be extended from January 18, 2018, to January 17, 2020, and the implementation duration and schedule to be revised from January 2018 to December 2019, for the remaining work. It also said the ICC-Cabcom approved changes in the scope and construction period of the P1.03 billion worth Samar Pacific Coastal Project. The project is a 109.3-kilometer road under the Arterial Road Network, which will link towns facing the Pacific and eventually complete the circumferential loop for Samar Island. Meanwhile, the ICC-Cabcom approved loan validity for Jalaur River Multi-Purpose Project (JRMP) Stage Two to March 28, 2022, from May 28, 2018. The new project completion schedule was extended from November 28, 2017, to September 28, 2021. Data earlier obtained by the

American investor eyes IT, entertainment hub in Iloilo By Jun N. Aguirre Correspondent

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LOILO CITY—An American investor in Iloilo is eyeing to make the city the hub of entertainment and information technology (IT) in Panay Island. In an interview, Paul Chatman, a musician and owner of the Saxxys Bar and Grill at Smallville here, said he is giving himself three years to “assemble” his plans. Chatman was currently organizing the return concert of Stephen Speaks not only in Iloilo, but also in the major cities of Davao, Manila, Laoag and Boracay. He said he met Stephen Speaks in several concerts in the United States as he himself is an independent saxophone performer. The series of Stephen Speaks concerts in the Philippines will run from January to February 2018 at different key cities in the country.

“I have traveled around the world and I have fallen in love with Iloilo. I love the calmness and progress now happening in the city. My family was in Laoag, but I prefer to put my investment in Iloilo,” he said. Aside from organizing the concert series, he is also planning to organize a national dance contest. He is also planning to invite the international band Earth, Wind and Fire to perform in the country. For IT, Chatman said he is planning to coordinate with the Technical Educational Skills and Development Authority to help train young people in the field of computers. “I have worked for the Google company for several years and I know computers and the IT could help alleviate poverty. The IT may have both positive and negative sides, but what is important is how we train our young people appreciate the good side,” he added.

BusinessMirror showed the JRMP Stage Two only has a physical accomplishment rate of 14.5 percent and less than 5-percent utilization in its loan from South Korea. The JRMP, which costs P11.21 billion, involves the construction of dam and irrigation facilities, including a high dam and reservoir with afterbay and catch dams in Iloilo and its neighboring towns. Meanwhile, the ICC-Cabcom also discussed and noted the Department of Transportation/ Philippine Coast Guard report on the comparative analysis of lease-and-purchase options for the Maritime Disaster Response Helicopter Acquisition. The following projects were also discussed, for notation: The joint proposal of the Department of Agriculture and Philippine Fisheries Development Authority to review the third phase of the Nationwide Fish Ports Project as five separate projects; the

proposal by the DPWH on project cost-breakdown adjustments for the Metro Manila Flood Management Project–Phase 1, and the Fuel Marking Program under the Tax Reform for Acceleration and Inclusion of the Department of Finance. The ICC is composed of the secretary of finance as chairman and the Neda secretary as cochairman. It’s members include the executive secretary, Cabinet secretary, governor of the Central Bank and the secretaries of budget, energy and trade. It evaluates the fiscal, monetary and balance-of-payments (BOP) implications of major national projects, and recommends to the President the timetable of their implementation on a regular basis. The ICC also advises the President on matters related to the domestic and foreign borrowings program and submits a status of the fiscal, monetary and BOP implications of major national projects.

Arrest of Defend Ilocos leader for ‘rebellion’ slammed by green groups

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HE leader of a network of environmental advocates based in the Ilocos Region was arrested on Tuesday night for alleged rebellion. The arrest was seen as the start of police and military crackdown against activists and leaders of militant groups critical of the Duterte administration. Sherwin de Vera, the regional coordinator of Defend Ilocos, was arrested by police while on his way to Candon, Ilocos Norte, around 6:30 p.m., said Lee Vizcara of the human rights group Ilocos Human Rights AllianceKarapatan. De Vera is currently detained at Camp Elpidio Quirino in Bulag, Bantay, Ilocos Sur, facing charges of rebellion. In a previous interview by the BusinessMirror, de Vera said he is an activist, but not a New People’s Army (NPA) rebel or member. He said he knows he is the subject of a surveillance operation by the military and police on suspicion he is a member of the local NPA, which he belied during the interview. Sketchy reports indicated that de Vera, a soft-spoken community organizer, is facing rebellion, based on an arrest warrant stemming from a 2014 case filed before the regional trial court by the police in the province of Abra. Environmental groups under Kalikasan-People’s Network for the Environment (PNE) said de Vera is known for his environmental advocacies in the North. Defend Ilocos played a key role in leading the Save the Abra River Movement, which rallied against the detrimental effects of the continued operations of the Lepanto Mining Co. on downstream communities in Ilocos Sur. The group also coorganized the People’s Summit against the planned exploration activities of the Cordillera Exploration Co. Inc. in Cervantes. They are also involved in mobilizing and organizing against the proposed setting up of a coal-fired power plant in Luna, La Union. Defend Ilocos also participated in various activities in connection with the recent Lakbayan of

DE VERA

the National Minorities here in Metro Manila. Kalikasan-PNE said it is not Sherwin’s first brush with the authorities. “Prior to his arrest, he was already receiving threats and intimidation from state-armed forces due to his work,” the KalikasanPNE said in a statement. “De Vera’s arrest shows how the Duterte regime’s intensifying crackdown on perceived political dissidents affects environmental advocates, as well. Sherwin’s arrest threatens to send a chilling effect on other environmental advocates who dare to stand up against natural-resources plunder and government negligence and indifference to people affected by environmental problems and issues,” the group added. Kalikasan-PNE demanded the Philippine National Police (PNP) to release de Vera and junked what it described as trumped-up charges against him. “We call on our fellow environmental advocates to unite and resist the creeping dictatorship of the Duterte regime,” the group said. The Duterte administration called off the peace talks with the National Democratic Front of the Philippines and the Communist Party of the Philippines (CPP) prompting the CPP to call on the NPA to intensify the campaign in the countryside against the Armed Forces of the Philippines and the PNP. Several militant groups have been accused of being fronts of t he C PP- N PA , w h ic h h a s been at war with the Philippine government for more than 30 years. Jonathan L. Mayuga

China donation to light up Antique, Palawan communities with solar-street lamps

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HINA is donating close to 3,000 units of solar-powered LED street light and a home solar-power system to communities in the province of Antique and the town of El Nido in the province of Palawan, the Department of Environment and Natural Resources (DENR) said. Environment Secretary Roy A. Cimatu and China’s Zhang Young, vice chairman of the National Development and Reform Commission (NDRC), recently signed a memorandum of understanding (MOU) for the grant of solar-energy devices to Antique and El Nido, Palawan.

The MOU signing was held in Malacañan Palace during the recent visit of Chinese Premier Li Keqiang to the Philippines. In a statement, Cimatu said the signing of the MOU strengthens mutual trust and cooperation between the Philippines and China, particularly in the area of climate-change adaptation and mitigation. The project is expected to benefit “off-the-grid” communities not reached by electricity or those with no street-lighting facility. At the same time, the donation from the Chinese government will help promote the use of renewable

energy in local communities to mitigate climate-change impacts, Cimatu added. “We hope that through this agreement, we will be able to promote renewable energy in the far-flung areas in the Philippines and reduce carbon emissions,” Cimatu said. Under the MOU, the DENR is tasked to oversee the delivery of 2,117 units of solar-powered street light and 769 units of a household solar-power system to the beneficiaries. In Antique a total of 100 barangays, or 116,080 individuals, will benefit from 1,562 units of

solar LED street light, while 151 barangays, or 179,848 individuals, will gain from 769 units. A total of 555 units of solar LED street light will be distributed to six barangays in El Nido, with 7,025 residents expected to benefit from the donation. The DENR agreed to assume all the taxes and other cost arising for the goods entering Philippine territory, and for clearance, delivery and transportation of goods once they arrive. The agency will also supervise the installation of the devices and provide training for technical staff. Jonathan L. Mayuga

Big waves sink fishing vessel off Pangasinan

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NFANTA, Pangasinan—Big waves tossed and sank a fishing vessel in the West Philippine Sea 30 nautical miles off the coast here, sending at least three fishermen from this town to go missing in cold waters, the Philippine Coast Guard (PCG) reported on Tuesday morning. A PCG team led by Capt. Alvin Pavor and aided by 19 volunteer

divers on board FB Prince Japhet are now scouring the high seas in an effort to locate and rescue the fishermen. Reported missing were Roy Mas, Diosdado Gumtang and Ariel Gumtang, all residents of this town, who were with two other fishermen on board FB Vanze Allen that capsized and sank after it was smashed by giant waves.

Barangay Capt. Carlito Maniago of Cato village, this town, said the fishermen sailed to the high seas on December 5, ignoring stern warnings by authorities of turbulent waters spawned by the heightened cold front, which had been hitting the northern Ilocos provinces since three weeks ago. The two fishermen rescued were

Felipe Arabis and Alejandro Ali who are now being treated by doctors at the Pangasinan district hospital in Alaminos City. Pangasinan fishermen have been into similar sea tragedies almost yearly during the cold-front season, defying stern warnings of dangerous waves just to earn a living. Orly Guirao

A10 Thursday, December 14, 2017 • Editor: Angel R. Calso

Opinion

BusinessMirror

www.businessmirror.com.ph

editorial

China Telecom to break duopoly

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alacaÑang last Sunday announced that the Chinese government has chosen China Telecom Corp. Ltd. to invest in the Philippines in a bid to break the current duopoly in the local telecommunications industry. The announcement came after President Duterte made the investment offer to Chinese Premier Li Keqiang during their bilateral talks at the recent Association of Southeast Asian Nation summit in Manila. The offer was made to China, the Palace said, because of its proven capability to provide telecom services to millions of users. China Telecom is the second-largest telecommunications company in China, with around 215 million mobile subscribers, 123 million wire line broadband subscribers and 127 million access lines as of end-2016. Communications Secretary Martin M. Andanar said China Telecom would now need to look for a local partner in keeping up with rules on foreign ownership limitations under the 1987 Philippine Constitution, which provides that only companies with at least 60 percent Philippine ownership can operate as a public utility. Andanar said the Duterte administration is facilitating the entry of a third telco player because of incessant complaints about dropped calls and slow Internet. We agree that there’s a pressing need for a third telecommunications service provider in the country to improve the service, pricing and coverage. Internet service in the country is among the slowest and most expensive in Asia, and an improved service will not only benefit millions of Filipinos but will also give local businesses a better chance to compete in the global stage. This early, however, opposition to the entry of a Chinese player in the Philippine telecommunications industry has emerged. Some lawmakers, for example, have raised security concerns over the entry of a Chinese telco amid the unsettled dispute between Manila and Beijing over the West Philippine Sea (South China Sea). Palace Spokesman Harry L. Roque Jr., however, said it was a “political decision of the President to offer it to a Chinese company.” He added that the Duterte administration will not open its doors to foreign telecommunications companies unless they are from China. Explaining the need to have a third telco player in the country, Roque said it has become an urgent matter owing to public complaints of poor service from the existing players. He explained: “It was brought up in bilateral negotiations between the Philippines and China. And the eventual player that was chosen by China, China Telecom, without a doubt is one of the biggest in the world. It was intended to strengthen our bilateral ties with China, coupled with the fact that given the huge telecoms market in China, Chinese companies ought to have already technical know-how in providing competent and reliable telecom services.” If China Telecom can guarantee faster Internet services, wider coverage and better pricing, let’s all welcome it with open arms. However, let’s not forget that the last time the government entered into a communications deal with a Chinese company in 2007, the transaction was riddled with anomalies, including allegations of overpricing and corruption among government officials who brokered the deal. We expect to see fair and transparent business transactions under the Duterte administration. Since 2005

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How not to be holding an empty bag John Mangun

OUTSIDE THE BOX

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e hear a lot about how an infinitesimal percentage of Filipinos invest in the Philippine stock market. That is a fact. What we do not hear about that—also a fact—is that virtually the entire Philippine banking industry is listed on the Philippine Stock Exchange (PSE). The same can be said about the property development, gaming and telecommunications industries. The majority of companies involved in power generation, shipping, retail, food and beverage, construction, consumer goods and infrastructure are all publicly listed companies. Mining and oil companies have always been a key sector of the PSE. Everyone of those companies must submit quarterly and annual reports of their financial condition to both the PSE and the Securities and Exchange Commission. The annual reports, at the least, are subject to an external audit. Further, each of the corporations usually provides a statement from its board of directors and president as to what its business activities and changes in

the company’s business were for the previous year. If you want to understand the state of the Philippine economy, you need to look at the business section, not the front-page. In fact, looking at the front page may give you a false or distorted view of the nation. You may have to spend a little time to understand what the corporate reports are saying and how to interpret them. But at least you will have a clearer picture of Philippine business that you will not find through the nonsense from most of the politically driven pundits. The presentation of corporate numbers may be biased in one direction or another, but the numbers themselves never voted for or against any politician. Here is another fact about listed companies. Scandals, scams and

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frauds are few and far between; that is why they are front-page news. Some involve accounting fraud where the books are cooked to take bad things from the mother company and hide them in off-thebooks subsidiaries. Enron Corp. in the United States and Victorias Milling here in the Philippines are examples of that. Sometimes, the financial numbers are simply falsified as recently in Japan with Kobe Steel and Toshiba Corp. A slightly similar situation occurred here with 2GO Group Inc. and the LBC courier group’s defunct banking affiliate LBC Development Bank. Note that these were “slightly similar.” Smaller investors can sometimes be collateral damage in a Clash of the

Titans as happened long ago with BW Resources when one side wants the price higher and another wants the price to go down. And don’t believe everything you read on the frontpage when the words “stock manipulation” is used. Sometimes it is true; often it is not. However, even if these things happen only once in several blue moons, you do not want to be the foolish idiot holding the bag at the end of the day. The solution is easy and simple. Remember these lyrics from US country singer Tom T. Hall: “Greed kills more people than whiskey.” Occasionally, an average investor will be caught in a situation that could not be avoided. But then again, which blue-chip issues—none of which are “get-rich-quick” stocks—have cost anyone the family fortune and the kid’s educational fund? “But I wasn’t trying to get rich quick when I bought XXX and the company was delisted.” Maybe, but if you had bought a boring company with “boring” management like D&L Industries Inc. In 2014 your money would be tied up with a 300-percent profit instead of in cash and available to buy XXX. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.

WB bats for ‘new social contract’ for East Asia

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You may have to spend a little time to understand what the corporate reports are saying and how to interpret them. But at least you will have a clearer picture of Philippine business that you will not find through the nonsense from most of the politically driven pundits. The presentation of corporate numbers may be biased in one direction or another, but the numbers themselves never voted for or against any politician.

Continued from A1

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nregulated capital-account liberalization is heaven sent to vulture or speculative capitalists who do not create new jobs and wealth for society; on the other hand, a program of fiscal austerity, which is part of the bigger “privatization” program, weakens a government’s ability to stimulate the economy, as amply demonstrated in the case of Greece. The soundness of some of the assumptions that are used to justify key neoliberal policies are also debated internally—and much longer and more public—in the World Bank, the twin sister of the International Monetary Fund. As is well known, the global mission of the World Bank is to reduce poverty by providing development loans and policy advisories (more accurately dubbed as “policy conditionalities”) to borrowing countries. In the 1980s and 1990s the World Bank was at the forefront of the global proselytizing on the so-called virtues of untrammeled

globalization, which was translated into “structural adjustment” policies aimed at tearing down trade and investment walls, privatizing government assets and services and deregulating various sectors of the economy. In the specific case of the Philippines, the “structural adjustment program” (SAP), was rationalized by the World Bank and Filipino economic technocrats as the key in advancing industrialization, modernizing agriculture and making the economy efficient. However, the development outcomes of SAP in the Philippines and other countries were largely

negative, as documented by trade unions, farmer organizations, civilsociety groups and industry associations. Dani Rodrik, a Washingtonbased economist, wrote that SAP can in fact lead to the opposite— “premature deindustrialization,” as what happened in the case of the Philippines. Proof: the country’s growth momentum in the last two decades is not due to the SAP program instituted in the 1980s1990s; growth is fueled largely by two non-SAP phenomena: the explosive growth of overseas Filipino workers remittances and the rise of the call center/business-process outsourcing sector. Another proof: the Department of Trade and Indistry is trying to revive Philippine manufacturing through its “manufacturing resurgence” program. At any rate, the World Bank has been adjusting its arsenal of antipoverty policy prescriptions. In the 1990s, the World Bank, in response to the growing global criticisms on SAP modified the SAP program by emphasizing the role of “institutions” and the need to curb “moral hazards” (code name for “corruption”) in borrowing countries. The SAP-oriented “Washington Consensus” of the two Washington-based sisters was rebaptized as the “new Washington Consensus.”

In 1997-2000 a maverick economist, Joseph Stiglitz, became the chief economist of the World Bank. Stiglitz created a furor by immediately questioning the soundness of some aspects of the SAP program and the appropriateness of a number of development policies being pursued by the World Bank. One policy issue questioned by Stiglitz was the Bank’s obsession to promote the privatization of social security in borrowing countries. After the departure of Stiglitz, the World Bank dropped the debate on pension privatization. Instead, it promoted itself as the defender of the marginalized sectors or those who are not covered by any formal social insurance by making social protection for these sectors a priority-flagship development program. In Latin America it conceived the Bolsa de Familia, or the conditional cash transfer (CCT) program, as the mechanism to address the needs of households who have limited incomes and whose children are unable to go to schools. In Southeast Asia, the World Bank, after dilly-dallying on what to do to assist the displaced victims of the 1997-1998 Asian financial crisis, eventually recognized the importance of a universal health-insurance scheme, as pioneered by Thailand’s See “Ofreneo,” A11

Opinion

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Physical and psychological Witnessing in truth violence inflicted on victims of the anti-dengue scandal Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

Cecilio T. Arillo

database

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HE Senate Blue Ribbon Committee has barely scratched the surface in its probe on the dreadful multibillion-peso antidengue drug scandal and, by all indications, it will uncover more scams involving former President Benigno S. Aquino III and other key officials in the health department.

The committee, however, is just tasked, in aid of legislation, to investigate wrongdoings of government officials and attached agencies, including government-owned and -controlled corporations, and suggest new laws and propose amendments to existing laws. Or, as part of its oversight function, may recommend to proper authorities the prosecution of people involved in graft, plunder and other scams. The primary task of determining criminal and civil liabilities are with the state’s Executive and Judicial branches, as well as the constitutional commissions. Strangely, the four constitutional bodies tasked to strictly observe and enforce the Code of Ethical Standard for Public Officials and Employees (Republic Act 6713), which was approved on February 20, 1989, by thenPresident Corazon C. Aquino, have not shown even just a whimper of concern for the protection of the victims. The four are the Office of the Ombudsman, the Commission on Audit (COA), the Civil Service Commission (CSC) and the Commission on Human Rights (CHR). Specifically, the Ombudsman can investigate and prosecute on its own anti-graft and corrupt practices acts, plunder and other fraud committed by officials in the government, both elected and appointed; the COA is meant to protect and account public funds; the CSC is ordained to ensure that only qualified officials and employees are to serve the government with utmost ethical standard; and the CHR to protect the rights of children, among others. Is it because these constitutional agencies are staffed with “yellowtards” and the people mostly involved belonged to this group? The Code said: “Public officials and employees shall, at all times, be accountable to the people and shall discharge their duties with utmost responsibility, integrity, competence and loyalty, act with patriotism and justice, lead modest lives and uphold public interest over personal interest.” Section 11, of the Code, also said: “[a] Any public official or employee, regardless of whether he holds office or employment in a casual, temporary, holdover, permanent or regular

Ofreneo. . .

continued from A10

Prime Minister Thaksin Shinawatra. With the bank’s prodding, the Philippines adopted the CCT during the second term of Gloria Macapagal-Arroyo. It was christened as the 4Ps—Pantawid Pamilyang Pilipino Program. The CCT immediately became the priority program in a bundle of other World Bank-supported anti-poverty programs, such as the Kapit-Bisig Laban sa KahirapanComprehensive and Integrated Delivery of Social Services (KalahiCIDSS). The CCT was continued and expanded during the Aquino Administration. Today, the CCT is not only being continued by the Duterte administration; it is also being expanded further in collaboration with the World Bank and Asian Development Bank, to complement the government’s job creation “Build, Build, Build” program. In summary, the World Bank, since the turn of the millennium, has become a major exponent of

capacity, committing any violation of this Act shall be punished with a fine not exceeding the equivalent of six months’ salary or suspension not exceeding one year, or removal depending on the gravity of the offense after due notice and hearing by the appropriate body or agency. “If the violation is punishable by a heavier penalty under another law, he shall be prosecuted under the latter statute. Violations of Sections 7, 8 or 9 of this Act shall be punishable with imprisonment not exceeding five years, or a fine not exceeding P5,000, or both, and, in the discretion of the court of competent jurisdiction, disqualification to hold public office. “[b] Any violation hereof proven in a proper administrative proceeding shall be sufficient cause for removal or dismissal of a public official or employee, even if no criminal prosecution is instituted against him. “[c] Private individuals who participate in conspiracy as coprincipals, accomplices or accessories, with public officials or employees, in violation of this Act, shall be subject to the same penal liabilities as the public officials or employees and shall be tried jointly with them. “[d] The official or employee concerned may bring an action against any person who obtains or uses a report for any purpose prohibited by Section 8(d) of this Act. The court, in which such action is brought, may assess against such person a penalty in any amount not to exceed P25,000. If another sanction hereunder or under any other law is heavier, the latter shall apply.” In the minds of many people now, is this: Who will now answer for the physical and psychological violence inflicted on the 830,000 grade schoolers, their parents and the 15,000 or more policemen who were injected with this high-risk experimental antidengue drug Dengvaxia? By the way, isn’t this a case also for the International Court of Justice in The Hague? Undoubtedly, whatever is the result of the investigation of this shocking and despicable act of humanity will be on the conscience of those who committed it and for sure, it will hound them forever.

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he Third Sunday of Advent is defined by the antiphon: “Rejoice! The Lord is near.” Thus its name Gaudete (Rejoice) Sunday. That we may experience the joy of salvation, John the Baptizer prepares us for the coming of the Lord by his truthful witness to Jesus, (John 1:6-8, 19-28).

A witness John, called the Baptizer because his signature activity, was to prepare the people for the coming Messiah by baptizing or washing them at the River Jordan, was a witness par excellence to the Mighty One coming after him. He was the last in the long line of messengers who proclaimed the Savior to come. The fourth evangelist purposely presents a string of witnesses and testimonies swearing to Jesus: first John himself (1:6-8), then the Samaritan woman (4:39), and Jesus’ own works (5:36), and the words of the Jewish scriptures (5:39), and the Advocate, the Spirit of truth from the Father (15:26), and finally the disciples (15:27), including the evangelist himself (21:24). In these instances, the testimony of the believer in Jesus moves others to see the truth and the light of faith,

and to believe, too. John the Baptizer came “so that all might believe through him.” A witness points beyond oneself to somebody or something that really matters. John was sent to testify to the light, to the Word through whom came life and the joy of humankind. This light shines in the darkness which has not overcome it.

In truth

John himself was not the light. The temple priests and Levites sent to John by the leaders in Jerusalem were to make an official investigation regarding the person of John and his trending activities in the wilderness by the Jordan. The Pharisees also got into action, these self-appointed custodians of Jewish law and tradition. John must have been subjected to interrogations and inquiries one after

Tax reform highlights Atty. Rodel C. Unciano

Tax Law for Business

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S of today, phase 1 of the proposed tax reform is yet to be signed into law. However, with the approval of the bicameral conference committee on the Tax Reform for Acceleration and Inclusion Act, it is almost certain that, by the start of next year, changes in the tax law will be in place.

Thursday, December 14, 2017 A11

John himself was never in doubt or confused regarding his identity and secondary role; he had no illusions about his importance. The categories of greatness in the eyes of his investigators, he turned down with ringing denials: No, he was not the Messiah, nor Elijah, nor the prophet. And he interpreted the rite of washing he was doing to the people at the river as merely a water ablution symbolic of repentance for one’s sins. another. The gist of John’s testimony clarified that he could be understood only in reference to someone he was not, the Messiah. He was the “voice in the desert” (Isaiah 40:3) crying and alerting the people to “make straight the way of the Lord.” John was only a precursor, a witness to testify to the eternal Word, the life and light of the world. John himself was never in doubt or confused regarding his identity and secondary role; he had no illusions about his importance. The categories of greatness in the eyes of his investigators, he turned down with ringing denials: No, he was not the Messiah, nor Elijah, nor the prophet. And he interpreted the rite of washing he was doing to the people at the river as merely a water ablution symbolic of repentance for one’s sins. It was his and the people’s joint effort

As approved by the bicameral conference committee, for individual income earners, taxable income of not over P250,000 a year shall now be exempt from income tax effective January 1, 2018. For income earners of over P250,000, graduated tax rate of 20 percent to a maximum rate of 35 percent shall be imposed.

To reach the writer, e-mail cecilio.arillo@ gmail.com.

As some groups would claim, prices of commodities will probably increase once the bill is signed into law, due to the imposition of higher excise taxes on petroleum and sweetened products. Prices of automobiles will likewise increase, with the imposition of higher excise taxes on automobiles, which shall now be computed at 4 percent for automobiles with net manufacturer’s price/importer’s selling price of up to P600,000; 10 percent for over P600,000 to P1 million; 20 percent for over P1 million up to P4 million; and 50 percent for over P4 million. The good news is that, lowerincome families, which comprise the majority of our population, are expected to recoup through a bigger net of tax take-home pay.

As approved by the bicameral conference committee, for individual income earners, taxable income of not over P250,000 a year shall now be exempt from income tax effective January 1, 2018. For income earners of over P250,000, graduated tax rate of 20 percent to a maximum rate of 35 percent shall be imposed. For those earning over P8 million a year, there is a slight increase on the maximum rate that will be imposed, from the maximum rate of 32 percent under the current tax system to 35 percent under the tax-reform package. Self-employed individuals and/ or professionals whose gross sales or gross receipts during the year do not exceed P3 million shall have the option to avail themselves of an 8percent income tax on gross sales or

gross receipts, in lieu of the graduated income-tax rates and percentage tax. For mixed-income earners, the income from compensation shall be taxed following the graduated tax rate of 20 percent to 35 percent, while the taxable income from business and other income shall be subject to either graduated tax rate of 20 percent to 35 percent, or at 8-percent tax based on gross sales or receipts in excess of the income subject to zero-percent tax, at the option of the taxpayer. In sum, the tax reform aims at providing lower-income families a higher take-home pay amid possible increases in cost of some commodities brought about by higher excise tax on some products. Advocates say this is a good measure to increase economic activity.

social protection and human capital development ostensibly for the benefit of the poor and those left out in the globalization processes. When the Arab Spring broke out in 2011, ushered in by the Tunisian Revolution lit by the self-immolation by a young jobless vendor, the World Bank started looking more closely not only into issues of inequality and extreme poverty but also on how the poor, young, women and even middle-class segments of society are being excluded in the sharing of wealth and power in the Middle East and other regions. The World Bank took the unprecedented step in its anti-poverty development advocacy in the last seven decades, that is, by calling on concerned governments to embrace a “social contract” in support of inclusive growth. Thus, for 2015, the World Bank’s development report for the Middle East and North Africa region was boldly titled “Towards a New Social Contract.” Some of its policy recommendations are also quite bold, such as competition policy to level the field against those who hold do-

mestic power and monopolize the domestic market, measures to make the government accountable to the “citizens” in the delivery of public services and transforming government subsidies into outright cash transfers ala-CCT for the poor. At the same time, the World Bank wrote that the proposed “incremental reforms” are not meant to “dislodge the system,” obviously to shield the bank from any backlash that autocratic leaders in the region may unleash. It would be interesting to find out if the report was read by the kings and sheiks who rule the Middle East. Now for East Asia, the World Bank has just come out with a regional report entitled “Riding the Wave: An East Asian Miracle for the 21st Century” (for general release in 2018). Like the past World Bank reports on the region, Riding the Wave highlights the role of the region as a motor of global economic growth and how millions in the region (mainly from China) are being lifted out of poverty in the process. At the same time, the report reiterates past observation: Growth

is generally uneven and growth benefits distributed unequally. It noted further that in some countries like the Philippines, there was very “little mobility” (p. 4) for those stuck in the lower end of the income-class structure. The report warns that middle classes in the region are vulnerable to “systemic shocks” and can slide down in the income ladder if the social protection system is not fully developed, such as having protection against a destructive flood disaster. Most of the economic observations in the report are not new. What is new in the audacious proposal for “a new social contract” to promote inclusive growth based on what the World Bank calls as three pillars: fostering economic mobility, providing greater economic security and strengthening institutions in support of inclusive growth. Are these not the same proposals being aired by trade unions and civilsociety organizations in Asean and other global, regional and national forums? The bank then goes on enumerating anti-poverty measures,

such as CCT for the low-income classes, expansion of the social insurance coverage, progressive taxation, competition policy and so on. Clearly, the World Bank’s proposal for a “new” social contract in East Asia is bold and quite advanced compared to its past anti-poverty programs, especially those developed around the old discredited SAP program, which merely listed technocratic solutions on how to open up the market via trade and investment liberalization, privatization of government assets and services and deregulation of economic sectors. However, key elements of a progressive and truly inclusive social contract are hardly mentioned or amplified in Riding the Wave. These include “voice,” “human rights” and “representation” for the marginalized. Central in modern and democratic social contract is citizens’ participation in the crafting of policies directly affecting them. This requires institutions and mechanisms for the conduct of frank and sustained social dialogue among the stakehold-

to make ready the way of the Lord. John was committed to prepare the hearts of his listeners, so that when the Word of God and the light of the world came, he would be recognized—the “One” standing among the people whom they do not know, the one whose sandal thongs John was not worthy to untie. Alálaong bagá, to be an effective witness with a credible testimony, John was the personification of truthfulness. In contrast to the “I am” the truth, life, light, bread, way, good shepherd of Jesus punctuating the fourth gospel, John the Baptizer had humbly and truly proclaimed “I am not” the Messiah, Elijah, the prophet. In plain truth, he said he was only “the voice of one crying in the desert.” We today do need more voices to bring us the good news of the One still really unknown to so many, effective and credible witnesses, who live what they proclaim, to lead us to the light and the truth. Amid all the investigations and proclamations going on in our society, we still grope in the darkness of untruth and obfuscations into more chaos. It will certainly be a howling desert for our people if we continue to be deprived of witnesses in truth. Join me in meditating on the Word of God every

Sunday, from 5 to 6 a.m. on DWIZ 882, or by audio streaming on www.dwiz882.com.

On tax administration, significant to note is the simplification of the individual and corporate incometax returns, from multipager returns to only two-pager returns, and shall only contain basic information, such as personal/corporate profile and information, gross sales or receipts, allowable deductions, taxable income and the income tax due and payable. This may be a good news for individual taxpayers. But for corporate taxpayers a two-pager return may not be sufficient to contain basic information. Certainly, the proposed tax reform has some advantages and disadvantages. However, with this proposed tax-reform package, we expect the government to now be able to provide us better infrastructure, health, education, jobs and social protection, which are the very objectives it aimed to achieve. The author is a senior associate of Du-Baladad and Associates Law Offices (BDB Law), a memberfirm of WTS Global. The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported therefore by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at rodel.unciano@ bdblaw.com.ph, or call 403-2001 local 140.

ers in growth and development. Again, these are missing in the bank’s proposal. Moreover, the appropriateness of certain economic measures prescribed by neoliberal economists in the past and present still need to be debated and evaluated. For example, the issue of freeing “property rights” and “land rights,” as proposed in the report and by some neoliberal economists, is contestable. This is seen by farmers in Cambodia, Indonesia, Myanmar, the Philippines and other countries as a green light for corporate land invasion and poses a direct threat to small farmer livelihoods and well-being. The idea of a social contract in each of the East Asian countries and in the region as a whole is a good one. But forging a democratic and liberating social contract requires a full-blown honest-to-goodness social dialogue involving all key stakeholders and a closer scrutiny of whether past and present World Bank policies have truly contributed or not to inclusive growth and development.

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A12 Thursday, December 14, 2017

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Duterte’s legislative adviser proposes new parliament setup under federal system

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residential Adviser on Legislative Affairs Adelino B. Sitoy has drafted his own version of federal parliament in the Philippines as an alternative proposal to that of former Senate President Aquilino Q. Pimentel Jr. The Presidential Legislative Liaison Office (PLLO) that Sitoy heads, has been undertaking its information drive on the principles of the fundamentals of federalism. “I have my personal advocacy, this is not of the PLLO,” Sitoy said. For the federal parliament, Sitoy’s proposal prescribes that a state must have a population of 1 million to 1.5 million to be entitled to one senator or federal parliamentarian. If the required population is exceeded by not less than 750,000, the state will be entitled to an ad-

ditional federal parliamentarian. For the state parliament, an area with a population of 250,000 is entitled to one state parliamentarian, and an excess population of 125,000 or more entitles it to another state parliamentarian Instead of 12, as proposed by Pimentel, Sitoy proposed 45 federal states with 67 senators to compose the unicameral body known as the Federal Parliament. The senators will be exclusively elected at large by every state. The Parliament will be headed by a prime minister elected by the

67

The number of senators that will make up the Federal Parliament under the proposal of Presidential Adviser on Legislative Affairs Adelino B. Sitoy federal parliamentarians upon the nomination by its party. Sitoy proposed that a two-party system be institutionalized and strictly observed. No crossing of party lines is allowed among elected officials, unless they are ousted from their own party. Turncoatism is penalized. Each federal state shall consist of cities and towns that shall remain within their respective boundaries.

Highly urbanized and component cities shall be known as cities only. The cities and the towns shall commonly elect state parliamentarians, proportioned at 250,000 population per parliamentarian. The state shall be headed by a governor, with the vice governor automatically elected upon the governor’s election. Every town and city is headed by an elected mayor, whose vice mayor goes with the mayor’s election. Every barangay is headed by a barangay captain. Each barangay council is composed of eight councilors. Each party shall put up its candidates for governor, vice governor, mayor, vice mayor, barangay captain and councilors. No direct election is allowed. The party that succeeds to elect the majority of its state parliamentarians shall be entitled to the governorship and vice governorship. The party electing the majority of its barangay councilors shall be entitled to its barangay captain. The party electing the majority of the barangay

captains shall have its mayor and vice mayor. The barangay captains shall constitute the city council or municipal council. “In short, there is no more Sangguniang Panlalawigan and City Council/ Sangguinang Panlungsod and Municipal Council/Sangguniang Bayan directly elected by the people,” Sitoy said. Relationships up to the fourth degree of consanguinity or affinity between governors and vice governors, mayors and vice mayors are banned. “But there is no term limit among elected officials,” he said. Sitoy also proposed that the Barangay system of justice be strengthened. In effect, 42,000 barangay courts can be created. Barangays shall be entitled to barangay courts with sufficient powers and authority to hear, settle and decide cases arising from the barangay. Settlement of the controversy is the goal. Each barangay court shall be assisted by members of the Integrated Bar of the Philippines to be assigned thereto by the Execu-

tive judge with compensation. Each state shall have only four kinds of courts: a)The Barangay Courts b)The Pre-trial Courts; c)The Trial Courts; and d)The Court of Appeals of nine justices (in three divisions), which is the state’s Supreme Court. All pretrial incidents shall be handled by the Pre-trial Courts, including the completion of pleadings, the resolution of incidents, and the definition of issues. Trial Courts shall only handle trials that shall be terminated soonest. “Trial judges should know the language of the place of their assignment. The courts and the parties shall record the proceedings separately. No translation of testimony is allowed in open court,” Sitoy said. The highest court of the State is the State Court of Appeals, whose decision on questions of fact and law shall be final, except on constitutional issues that are appealable to the Federal Supreme Court composed of fifteen justices (in five Divisions). Charles R. Pepito

Martial law in Mindanao proves to be a come-on for investors–MinDa head By Elijah Felice E. Rosales

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President Duterte inspects guns and weapons captured, confiscated, surrendered and recovered from the enemy during the siege in Marawi City, before they are destroyed at the Philippine Army Headquarters in Manila on Wednesday. Congress voted overwhelmingly on Wednesday to approve Duterte’s request to extend martial law in Mindanao by a year after the military warned that terrorist threats continue to lurk, despite the defeat of a disastrous pro-Islamic State group. Related story on A3. AP/Aaron Favila

‘Gains from TRAIN closer to what government needs’ Continued from A1

A 5-percent tax was also slapped on procedures involving invasive cosmetic procedures, surgeries and body enhancements. According to DOF estimates, the final version of the TRAIN is seen to yield the government net revenues amounting to an estimated P130 billion during its first year of implementation. “The net revenue effect is certainly very close to the bill that was passed in the House. So we are very pleased that the legislature has given us the wherewithal to begin a really serious infrastructure program,” he added. The DOF’s first package under the CTRP aims to slash personal income-tax rates from 32 percent to 25 percent, along with implementing other offsetting measures. Its original proposal

which was submitted last September 2016, was seen to generate an estimated P157 billion in its first year of implementation. House Bill 5636, or the TRAIN version of the House of Representatives, expects net revenues amounting to P134 billion, while Senate Bill 1592 estimates net revenues only amount to an estimated P59.9 billion. The final version of the TRAIN bill was pointed out to be submitted for ratification on Wednesday (December 13). Majority Leader Rodolfo C. Fariñas Sr. of the First District of Ilocos Norte earlier pointed out that the Senate and the House have until December 13 to pass the tax-reform bill and submit it to Malacañang for President Duterte’s signature. Fiscal policy-reform group Action for Economic Reforms (AER) said, however, that the TRAIN bill

has veered away from the goal of the tax-reform measure which is to make the tax system “more simple, efficient and equitable.” According to the AER, while it supports some of the measures embedded in the bicam-approved version of the TRAIN, including adjustment of the personal-income tax; raising mining taxes to 4 percent; and the increase in coal taxes; the overall bill “lacks structural changes” that will make the tax system “fairer and more equitable.” Among others, the group has pointed out that the increase on tobacco excise taxes of a mere P2.50 annually is “too small” to help reduce the consumption of the product defeating its purpose of being a health measure. “With so many moving parts, we will only come to know the welfare and economic impact when TRAIN rolls next year,” AER said. Rea Cu

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rade and business will proceed as usual in Mindanao despite the extension of martial law for a year in the region, according to the Mindanao Development Authority (MinDA). MinDA Secretary Datu Abul Khayr Alonto said the agency supports the extension of military rule in the southern third of the country. Congress on Wednesday approved President Duterte’s appeal to continue the imposition of martial law in Mindanao for the entire year of 2018. “We believe in the pure intent of the President to maintain the high security level in Mindanao, and to prevent another Marawi from happening. It is worth noting that the decisive action of the President to end terrorism in Mindanao once and for all is gradually yielding positive results for the island-region,” Alonto said in a statement. He also added trade and business remain upbeat in the island in spite of the tight security protocol implemented by government troops. Alonto bared a number of

Alonto: “We continue to receive investment interests from various local and foreign investors despite Mindanao being under martial law.”

businessmen expressed interest to invest in Mindanao. “As a matter of fact, we continue to receive investment interests from various local and foreign investors despite Mindanao being under martial law. Major infrastructure projects are being approved and rolled out as well. Rest assured that there is no letting up in our pursuit for economic progress and sustainable peace in the island-region, even in the midst of a martiallaw declaration,” the Mindanao development chief said. Malacañang welcomed Congress’s approval for the extension. Presidential Spokesman Harry L. Roque Jr. said the public should rally behind the government in its efforts to crush the Islamic

State and the New People’s Army in Mindanao. “We welcome the approval of both houses of Congress to extend the proclamation of martial law and the suspension of the privilege of the writ of habeas corpus in the whole of Mindanao beginning January 1, 2018, until December 31, 2018,” Roque said. “Public safety is our primordial concern; thus, we ask the public to stand behind the administration and rally behind our defenders to quell the continuing rebellion in Mindanao; eradicate the Daesh-inspired Da’awatul Islamiyah Waliyatul Masriq and other likeminded local and foreign terrorist groups and armed lawless groups, and the communist terrorists and their coddlers, supporters and financiers; and ensure the unhampered rehabilitation of wartorn Marawi and the lives of its residents,” he added. Roque said it is everyone’s duty to assist the government in achieving peace and order in the country. “This is everyone’s shared responsibility. Together, we will prevail,” he said.

Asia’s top inflation-targeting central bank may be preparing to hike rates Continued from A1

The Central Bank adopted inflation-targeting in 2002 in the aftermath of the Asian financial crisis in the late-1990s, when consumer prices soared beyond 10 percent. Since then, it’s managed to bring inflation consistently down. It forecasts inflation at 3.2 percent this year, Governor Nestor A. Espenilla Jr., who took office in July, said this month. “We certainly take pride in our decision to shift from monetary aggregate targeting to flexible inflation targeting,” Deputy Governor Diwa C. Guinigundo said in an e-mail. “It makes monetary policy more preemptive, forward-looking and accountable.” It’s that proactive stance that may push policy-makers to move.

The currency has been the worst performer in Asia, dropping 1.5 percent against the dollar this year to trade at 50.465 as of 2:25 p.m. in Manila on Wednesday. The economy is set for its first current-account deficit in 15 years, while bank loans are growing more than 10 percent. “We aren’t sure they are on top of the game right now,” said Eugenia Victorino, an economist at Australia & New Zealand Banking Group in Singapore. “They may be behind the curve, as there’s a risk inflation will breach the target next year. They should be managing inflation expectations, not just actual inflation.” The Central Bank’s policy framework has won plaudits from creditrating companies and the World Bank, which in October said the

Philippines had one of the most effective monetary policies in developing Asia. The World Bank measured the impact of a Central Bank policy intervention on lending rates in the economy over the following four quarters, using the US as a benchmark. The Central Bank constantly refines its policy tools. It transitioned to a rate corridor in 2016 for greater flexibility and is now crafting a strategy of gradually lowering banks’ reserve requirement. “They’re not the type who will kick the can on reform initiatives,” said Emilio Neri, an economist at Bank of the Philippine Islands in Manila. “In the midst of uncertainty and volatility, they’re always innovating and that gives them better tools to achieve their inflation mandate.” Bloomberg News