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Wednesday, December 20, 2017 Vol. 13 No. 70
TRAIN to hasten rollout of big-ticket govt projects
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By Elijah Felice E. Rosales @alyasjah & Cai U. Ordinario @cuo_bm
he government’s infrastructure program has further gained ground with the approval on Tuesday of the tax-reform bill and the 2018 national budget, both of which are intended to accelerate the Duterte administration’s “Build, Build, Build” program.
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The projected haul of the government from TRAIN
After months of deliberation, Republic Act (RA) 10963, or the Tax Reform for Acceleratiotn and Inclusion (TRAIN), was enacted into law by the President. The first package of the Duterte administration’s Comprehensive Tax Reform Program (CTRP) was signed along with the General Appropriations Act (GAA) for 2018. Continued on A12
free fire Philippine statement delivered by Ambassador Teddy Locsin Jr. on December 5, 2017, at the United Nations General Assembly, New York.
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he Philippines thanks Mr. Them-bile Joyini of South Africa and Mr. Andreas Kravik of Norway for coordinating the annual resolutions on Oceans and the Law of the Sea and on Sustainable Fisheries. Continued on A10
MASSIVE INFRA PUSH SEEN BMReports BOOSTING INVESTMENT PLEDGES BY 10% IN 2018 VIP security business seen booming in PHL By Catherine N. Pillas
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LOPEZ: “There will be a bigger equity inflow next year.”
@c_pillas29
he rollout of big-ticket infrastr ucture projects would make the Philippines more attractive to investors and increase investment pledges approved by the Board of Investments (BOI) by at least 10 percent next year, according to Trade Secretary Ramon M. Lopez. On the sidelines of the MVP Group’s Voyager Innovation’s launch of Digihub, Lopez said investment pledges could grow by a “reasonable” 10 percent in 2018. “At least a 10-percent growth is reasonable for next year.” Aside from the implementation of infrastructure projects, he said the easing of restrictions in economic activities would hike the number of fresh projects approved by the investmentpromotion agency. “We are undertaking a lot of re-
forms, starting with the Foreign Investment Negative List and the liberalization of retail and the amendment of the definition of public utilities. The infrastructure buildup will generate a lot of interest in areas outside of Metro Manila,” Lopez said. On Monday the government announced that investment pledges approved by the BOI this year reached a record P616.7 billion, surpassing the previous all-time high of P570.1 billion posted in 1997. The figure is also 39.5 percent higher than last year’s haul of P442 billion.
PESO exchange rates n US 50.4290
See “Infra,” A12
By Rene Acosta
have been deployed for VIP duties, but it apparently failed. Apart from the twin issues of lack of personnel and “legitimate” armed goons, the police leadership apparently realized that lawmen are being paid with taxpayers’ money in order to serve and protect Filipinos and not only the “gods” or the “privileged few.” Aside from their salaries, policemen deployed for VIP protection also receive extra pay or allowance in differing amount from the people they were guarding, especially if their patrons are wealthy or corrupt politicians.
@reneacostaBM
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Conclusion
F one wants to look into the business of very important person (VIP) protection in the country, he or she only has to train his or her sights to the Philippine National Police (PNP) and the Armed Forces of the Philippines (AFP). These two institutions legally, even questionably, pioneered the art. Both agencies were—and still are—the most organized and best sources of highly trained and readily available bodyguards or security escorts, even for wily and crooked politicians. No less than President Duterte has voiced his alarm last year over the witting use and abuse by politicians of the provision for security, as he noted how they have turned their escorts
A Filipino-American combat instructor demonstrates a live burst firing in an open firing range. Protection of very important persons is best provided by those who served and still serve in the Philippine National Police, which has issued rules to guide the provision of such service. NONIE REYES
into armed goons. He said that a politician, at the extreme, should only be entitled to two policemen/bodyguards.
Several years back, the PNP has attempted to totally stop the practice of allowing policemen to act as bodyguards by recalling those who
Expenses
IN 2009 the PNP, through its Police Security and Protection Group (PSPG), reported that it was spending more than P800 million yearly for the salaries of policemen assigned as bodyguards for the government Continued on A2
n japan 0.4481 n UK 67.4992 n HK 6.4514 n CHINA 7.6211 n singapore 37.4380 n australia 38.6538 n EU 59.4154 n SAUDI arabia 13.4478
Source: BSP (19 December 2017 )
A2 Wednesday, December 20, 2017
BMReports BusinessMirror
VIP security business seen booming in PHL Continued from A1
and private individuals. The PSPG is mandated by law to provide security to government officials, foreign dignitaries, private individuals authorized to be given protection and key government installations, a PNP document revealed. Likewise, the PNP’s elite counterterrorist force Special Action Force is tasked with VIP protection. The PSPG listed at that time more than 5,000 policemen who were detailed as security personnel for senators, congressmen, governors, mayors, other government officials and private citizens. Out of the number, 1,434 policemen, who were receiving P19,359 in monthly salaries from the PNP, are directly from the PSPG while their remaining 3,658 colleagues come from other units of the PNP. They have been also assigned as security details to individuals by the head of the National Police Commission, the chief of the PNP and even by the regional, provincial and city police chiefs. The massive deployment of policemen for bodyguard duties
TRAIN. . .
Continued from A12
Essential sugar-sweetened beverages (SSB), such as 3-in-1 coffee and milk, will be exempt. Estate and donors’ taxes are fixed at 6 percent under the TRAIN. The valueadded tax (VAT) base was also modified, repealing 54 special laws in the process, mostly on VAT exemptions deemed as nonessential. Medicines for chronic diseases, such as
prompted the PSPG to complain of depletion in personnel for police duties.
Rules
THERE are rules governing the availment of protective security. One was issued seven years ago in July via PNP Memorandum Circular 2010-009. The circular was applied “to any person whether public official [elected or appointed] or private individual who intends to avail himself/herself or engage the services of PNP Protective Security Personnel [PRP] and protection agents from Private Detective Agencies [PDAs].” According to the circular, other public officials and private individuals may avail or engage the services of PNP-PSP subject to the approval of the PNP chief. However, the provision of this service must meet certain conditions. One is that the applicant requesting for security is under actual threat or threats of death and/or physical harm. The threat or threats, likewise, “is assessed to be imminent” or has a high diabetes, high cholesterol and hypertension, are exempted from VAT. The TRAIN will also continue to exempt purchases of senior citizens and persons with disability from VAT. The controversial increase in excise tax on coal will also push through at P50, P100 and P150 for 2018, 2019 and 2020, respectively, and will cover both domestic and imported coal. Roque assured the public that “this will translate only to a very small increase in terms of price of electricity.” Cosmetic procedures will be slapped with 5-percent tax. Excise
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Marsh uk questioned before ic
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IN January last year the PNP announced that it will recall at least 700 policemen who have been acting as bodyguards for politicians in preparation for the elections. The announcement belied the previous effort of the PNP to return policemen to their units from VIP protection or security detail duties. Early last month a fuming PNP
Director General Ronald dela Rosa also ordered for the recall of the 700 policemen following a drug bust that involved a Taiwanese woman, whose bodyguards are two PNP-assigned policemen. It turned that out of the 700 policemen, 400 are assigned with private citizens while the remaining 300 are acting as security details for government officials. Dela Rosa issued the recall order after operatives of the Philippine Drug Enforcement Agency arrested Diana Yu Uy and seized in her condominium unit near Malacañang a P10 million worth of illegal drugs. The woman, who has been provided with two police bodyguards, is a daughter of convicted Taiwanese drug queen Yu Yuk Lai, who is held at the Correctional Institute for Women. Had the PNP known that she was a daughter of a drug queen, she would not have been provided with security, dela Rosa said, while also ordering for the investigation of Uy’s two policemen-bodyguards who have been working for the woman since 2010.
he Insurance Commission (IC) met with representatives of global reinsurer Marsh UK and leading Filipino insurance company Prudential Guarantee and Assurance (PGA) to discuss the ongoing complaint against Marsh UK for regulatory violations. Specifically, the practice of using Filipino “fronting insurers” in order to do business in the Philippines was reviewed. For the insurance needs of a leading airline, Marsh appointed Pioneer Insurance as its “fronting insurer,” while they would assume all the insurance risks and liabilities. Under Sect ion 10 0 of t he Amended Insurance Code, however, a reinsurance broker may only tender brokerage services to an insurer, and cannot tender insurance brokerage services nor insurance services directly to a client. Moreover, the same section states that the original insured would have no cause of action to recover insurance-proceeds from the reinsurer. Conversely, the reinsurer is not liable to the original insured, since they are not a cosigner of the policy issued. Lawyer Jose Bernas, legal counsel of PGA, noted that apart from violating Section 100 of the insurance code, this constituted a clear case of doing business in the Philippines without a license. “It isn’t our place to tell others how to do their business or
to critique how they cover risks as a business decision. However, we believe that Marsh is operating illegally in the Philippines, and t he IC shou ld do something about in order to protect the industry and to assure that the insured will be protected,” Bernas emphasized. “Since the insurer in this case is only a front, what happens if the reinsurance company refuses to pay a claim? Using a fronting insurer invites all sorts of risks, and that’s precisely why the IC has clear guidelines about the role each company plays,” he further added. Under the guidance of IC hearing officer lawyer Brian Sibuyan, a mediation meeting was set between the two parties. Bernas, however, pointed out that a mediation meeting was an unusua l way of resolv ing the issue. “We always welcome dialogue with the IC in order to provide insights that will help policy formation,” he said. “It is somewhat confusing, though, that today’s meeting with Marsh was termed as a ‘mediation meeting.” There is nothing to mediate between the two private parties (PGA and Marsh); we have no point of conf lict. What we have brought before the commission is a regulatory v iolation that is detrimental to the entire industry, and the Filipino business community as a whole,” he added.
tax on mining was also doubled under the TRAIN to 4 percent from 2 percent. Gerard H. Brimo, chairman of the Board of Trustees of the Chamber of Mines of the Philippines , said mining firms can absorb the increase in tax if the price of metals in the world market continues to improve. Brimo, the President and CEO of Nickel Asia Corp., the country’s largest nickel producer and exporter, described as “acceptable” the proposal to double the taxation in mining to 4 percent of the gross income from the current
2-percent excise tax. But he noted that the price of metals remains unstable. In his assessment, Brimo said prices are “a little bit better” this year compared to last year. The price of metal next year, he said, will determine whether mining companies can cope with the increase in taxes. “No one wants to pay more taxes, of course. It is a reality. Our taxes are being doubled. Four percent plus 5-percent royalty, and if you happen to be operating within an ancestral domain, you will be paying another 1 percent [to
indigenous peoples] and if the LGU is charging higher business permits, that will be an additional 1 percent so allin-all, that will be 11 percent of gross income,” he said. “We can say after this move, the industry pays its fair share. We have done our computation, we are a bit on the expensive side now. So be it, we accept it, let’s hope for prices to improve. Hopefully, we can deal with the moratorium on new mining permits,” he said. The TRAIN is expected to deliver P121.2 billion, or 0.7 percent of the country’s total GDP,
to government coffers. A hefty chunk of the TRAIN’s revenue is allocated to the government’s infrastructure program, dubbed as the “Build, Build, Build.” Roque said 70 percent of the TRAIN’s revenue will be directed to public infrastructure, while the other 30 percent will be allotted to social services. He added a portion of it will be spent on mitigating measures for the poorest Filipinos that will suffer from the tax hikes. Under the TRAIN, the poorest 10 million households will receive P200 monthly in 2018 and P300 monthly in 2019 and 2020. According to Roque, this is “to cushion the impact of indirect taxes” imposed by the TRAIN.
possibility of occurring. The security service to the private individual “may be withdrawn or terminated anytime or even before the expiration of the detail when the demands of the PNP so require” or when specific provisions are violated in the circular and other related issuances. When these conditions are met, the individual can expect the deployment of a maximum of two PNP-PSP and four protection agents. A private individual seeking PNP protection was required to pay P5,000 as application fee in 2010, the year the circular was issued by then-PNP Director General Jesus A. Verzosa.
Repetitive
2018 budget Duterte also signed into law the P3.767trillion General Appropriations Act of 2018. The national budget for next year is 12.4 percent higher than the purse for this year and is equivalent to 21.6 percent of the country’s GDP. Infrastructure and capital outlays will receive 25.4 percent, or P956 billion, of the 2018 budget, and is just 4 percent behind the 29.4-percent allocation, or P1.108.7 trillion, for personnel services. Under Duterte, the government is hell-bent on completing big-ticket public infrastructure, such as the North Luzon Expressway Harbor Link, Luzon Spine Expressway, Philippine National Railway North and South Rails and the Metro Manila Subway. In order to achieve this ambitious goal, the government intends to accelerate infrastructure-to-GDP ratio to 7.4 percent, which will amount to as much as P9 trillion by the end of Duterte’s term in 2022. The government has allocated P3.6 trillion for its infrastructure program over the next three years. Most of the public infrastructure listed under the “Build, Build, Build” are situated in Metro Manila and other major urban centers.
With Jonathan L. Mayuga and Rea Cu
Duterte. . .
Continued from A12
the government has slammed for providing consumers expensive yet slow Internet service. According to Akamai Technologies’s “State of the Internet Report” for the first quarter of 2017, the Philippines recorded the lowest average connection speed at 5.5 megabits per second among Asia-Pacific countries. However, it forecasts the country may see improvements in the coming years with the implementation of a national broadband plan estimated to cost to as much as P200 billion.
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Editor: Vittorio V. Vitug • Wednesday, December 20, 2017 A3
Relief of Navy FOIC ‘shocks’ defense, military establishment
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By Rene Acosta
@reneacostaBM
he relief of Navy Flag Officer in Command (FOIC) Vice Adm. Ronald Joseph Mercado and the appointment of a Navy acting commander on Tuesday sent shocks to the military and defense establishments.
The military hierarchy did not give reasons for the relief of Mercado and the installation of Rear Admiral Robert Empedrad, the former Armed Forces of the Philippines (AFP) Deputy Chief of Staff for Reserve and Retirees Affairs, as acting Navy commander.
The AFP Chief of Staff Gen. Rey Leonardo Guerrero has implemented the instructions from higher authorities to: Assign Vice Adm. Ronald Joseph Mercado to the office of the chief of staff, AFP on Special Duties; and install Rear Admiral Robert Empedrad as Acting Flag Officer in Command, Philippine Navy. The reason for this change-of-command will be explained in due time.”—Arevalo A statement from acting military Spokesman Col. Edgard Arevalo, however, the order of relief came from unnamed “higher authorities” and was only implemented by Armed Forces Chief of Staff Gen. Rey Leonardo Guerrero. “The AFP Chief of Staff Gen. Rey Leonardo Guerrero has implemented the instructions from higher authorities to: Assign Vice Adm. Ronald Joseph Mercado to the office of the chief of staff, AFP on Special Duties; and install Rear Admiral Robert Empedrad as Acting Flag Officer in Command, Philippine Navy,” the statement said. “The reason for this change of command will be explained in due time,” Arevalo’s statement added. Unlike in the past, the relief of Guerrero and the installation of Em-
BI deports 47 South Korean fugitives By Joel R. San Juan
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@jrsanjuan1573
HE Bureau of Immigration (BI) on Tuesday said it has deported 47 South Korean fugitives wanted for various crimes in their homeland. The number of deportees, according to BI Commissioner Jaime Morente, was the first ever mass deportation involving South Koreans. Morente said the Koreans were deported on December 14 and were turned over to Korean police authorities upon their arrival at the international airport in Incheon. Forty-five of the deportees were flown aboard a Jeju Air flight from the Ninoy Aquino International Airport, while the two others, who were arrested in Cebu, departed from Mactan on the same day. They were turned over to Korean Police authorites by Department of Justice Secretary Vitaliano N. Aguirre II, Justice Undersecretaries Raymund L. Mecate and Erickson H. Balmes, BI Deputy Commissioner J. W. Tobias Javier, Legal Division Chief Arvin Santos, Board Secretary Jing Oliver Balina, Port Operations Division Chief Marc Red Marias, BI Prosecutor Homer Arellano, Deportation Unit Head Candy Tan and Intelligence Officer Maynard Mariñas. “All of them were expelled pursuant to deportation orders issued by our board of commissioners, and they were all placed in our blacklist of undesirable aliens to prevent them from reentering the Philippines,” Morente said. The mass deportation was conducted as part of the BI’s efforts to decongest its detention facility in Camp Bagong Diwa, Taguig City. Morente added that some of the deportees have been “overstaying” in their cells, even if there were no more legal impediments to their deportation. “We have secured the necessary clearances to make sure that they have no pending civil and criminal cases before our courts,” the BI chief said. Lawyer Ma. Antonette Mangrobang, BI spokesman, said that most of the deportees are facing cases of swindling and Internet fraud, including voice phishing, while two of them are wanted for assault and physical injuries and one for illegal drugs. Among the deportees were seven overstaying Koreans who voluntary requested that they be deported. “All of them were arrested in separate operations by operatives from our fugitive search unit in various places throughout the country over the past several months,” Mangrobang said.
pedrad was not announced publicly. It was only announced or confirmed after the Armed Forces has already carried out the change of command and turnover ceremony. The sudden, swift and unexpected relief of Mercado, the first in the history of the Armed Forces in recent years, has rocked the four walls of the military’s general headquarters, with soldiers groping for reasons. However, reports said that the former Navy chief was taken out of his post because he was questioning a pro-
curement project related to the Armed Forces’s modernization program, which is being pushed by higher officials. Mercado, member of the Philippine Military Class of 1983, assumed the top Navy post in November last year and is set to retire in March next year. He was the former commander of the Armed Forces Western Command before he was named as the commander of the Navy. Despite the controversy, the Navy said it will follow
the order and welcomed Empedrad as its chief. “The Philippine Navy, as a professional organization, always follow a lawful order from the chain of command. With the Change of Command ceremony this morning, the Philippine Navy extends its gratitude to Vice Adm. Ronald Joseph S. Mercado, AFP, for his dedicated service rendered as the Flag Officer in Command of the Philippine Navy,” the Navy said in a statement through its spokesman, Capt. Lued Lincuna.
Economy
A4 Wednesday, December 20, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon
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Senators eye to ‘detach’ FDA from DOH amid vaccine mess
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By Butch Fernandez
@butchfBM
he Senate Committee on Health is set to pursue a separate hearing next month on the Dengvaxia vaccine mess in aid of crafting remedial legislation that will assess plans to detach the Food and Drug Administration from the Department of Health (DOH). Sen. Joseph Victor G. Ejercito confirmed the plan as the Blue Ribbon Committee, chaired by Sen. Richard J. Gordon, is poised to wrap up an ongoing probe that looked into the involvement of ranking Aquino administration officials in the questioned purchase of P3.5-billion anti-dengue vaccines injected to 830,000 schoolchildren. The Dengvaxia vaccine supplied by Sanofi Pasteur pharmaceutical company was later found to be “risky” when injected into zero negative persons, or those who never had infections prior to injection of the vaccine, prompting a joint inquiry by the Gordon-chaired Blue Ribbon panel and the Health committee chaired by Ejercito. “Before the end of the last hearing, Sen. Gordon indicated there may be one more hearing, but he was not definite. So, the Health Committee is mulling [over] the possibility of conducting further hearings focused more on the health issues,” Ejercito said. “Moving forward, we want to
pursue the probe to address public apprehensions so we need to hear health experts and doctors who were not able to testify on health aspects in the Dengvaxia controversy,” he added. Ejercito recalled that the Blue Ribbon hearing was principally focused more on the questionable procurement of the vaccine. “So, we may have to call a separate hearing solely on the health aspect,” Ejercito said. The senator said they may recall health experts, including former Health Secretary Enrique Ona, who was questioned at the earlier hearing mostly “about procurement and accountability,” which is the jurisdiction of the Blue Ribbon committee. “I will talk to Sen. Gordon to confirm if he will call one more hearing because I really intend to pursue the health aspect to address the concerns of doctors and experts who were not able to expound on it because the earlier hearing dwelt on procurement,” Ejercito said. He also intends to take up with Sen.
Gordon more questions that cropped up in the last hearing, including the reported pressure on from former Health Secretary Paulyn Jean B. Rosell-Ubial, on which Ejercito did not elaborate. “A lot of questions are still begging to be asked during the last committee hearing, foremost among was the alleged pressure on former Health Secretary Ubial to continue with the program. There are matters that we have to pursue in the hearing, although the more substantial parts have been covered,” he said in Tagalog. Ejercito indicated, however, they may not require former President Aquino to appear anew at the next Dengvaxia hearing. “We may not require the attendance of former President Noynoy Aquino this time, but I think the presence of former Budget Secretary Florencio Abad, former Health Secretary Janet Garin and former Executive Secretary Francisco Ochoa, whose explanations are still needed, will be required.” “Iba rin ’yung, syempre, andun si Pangulong Aquino we treat him with utmost respect and courtesy. Pero siguro, this time around, kahit si former Aquino Budget Secretary Florencio Abad na lang and former Health Secretary Jeanette Garin and former Executive Secretary Francisco Ochoa, whose explanations are still needed” he said. The senator added there are “many more unanswered questions” that Aquino administration officials concerned need to address, as senators assess the need to craft remedial legislation to plug gaps in the government’s medicineprocurement rules in order to avert a similar controversy in the future.
Fruit fiesta
A sidewalk entrepreneur conducts a detailed inventory of her round fruit stock less than two weeks before New Year’s Eve celebration. The demand for round fruits is expected to spike for the traditional New Year celebration. NONIE REYES
BAI details budget requirement for PHL anti-rabies program By Jasper Emmanuel Y. Arcalas
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@jearcalas
he government may have to shell out at least P240 million for the Philippines to become a rabies-free country by 2020, according to the Bureau of Animal Industry (BAI). BAI Veterinarian II Dr. Joy O. Lagayan said their national rabies program would need an annual allocation of P140 million for 2019 and 2020 to achieve the Asean target of becoming rabies-free country by 2020. “Just for the vaccines alone, we would be needing at least P90 to P100 million. But we would be needing a minimum of P140 million for a full-blown program, [which includes] vaccine procurement, vaccinators and support for IEC [information, education and communication] materials,” Lagayan said at a news briefing last Monday. “We are concerned on [our budget] for the following years, as our target [to become rabies-free] is 2020. We are still working on increasing the budget, especially for 2019 and 2020,” Lagayan added. Lagayan said the BAI’s budget next year for its rabies program is around P20 million to P30 million, which she noted is “insuffiicient” to sustain the government’s efforts to become rabies-free by 2020. “It is not sufficient to purchase vaccines to provide for the number of animals to be vaccinated,” she added. Lagayan noted that rabies cases in the country continue to increase due to the lack of available vaccine in the previous years. However, in 2014, the Department of Health (DOH) allocated P69.5 million for BAI’s national rabies program, allowing the agency to have a sufficient supply of vaccines until next year, according to Lagayan. “The trend of our rabies cases [have] increased this year. You have to understand that, for the past years, we did not give emphasis [on our rabies program], especially on vaccination; we lack vaccines to provide for the local government units,” she said. “We only have sufficient vaccines in the past two years and until now, which is capable of vaccinating at least 70 percent of the total dog population in the country,” she added. The Philippines, as part of the Association of Southeast Asian Nations, has a target to be a rabies-free country by 2020, and is also committed to achieve the world-wide target of rabies freedom by 2030. Based on their estimates, the country’s total dog population is roughly 10 percent of the country’s total human population, according to Lagayan. This would mean that there is at least 10 million dogs in the Philippines, of which, 70 percent must be vaccinated to be declared as a rabies-free nation, Lagayan added. “We need to control rabies and eliminate it. To achieve it, we have to vaccinate at least a minimum of 70 percent of the total dogs and cats in the country,” Lagayan said. The BAI launched its smartphone application called “Rabies Free 2020,” which seeks to increase awareness and consciousness among Filipinos on rabies-related issues. The app contains information on rabies, its preventive measures, symptoms and effects. It also allows users to locate the nearest animal treatment centers in their vicinity. Roughly about 250 Filipinos die because of rabies annually, according to BAI.
ADB exec endorses road-rating system By Cai U. Ordinario
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@cuo_bm
he Asian Development Bank (ADB) is recommending that its developing member countries, including the Philippines, should use star ratings to ensure road safety. In an Asian Development Blog, iRAP Strategic Projects Managing Director Greg Smith said star ratings are international benchmarks that are used to gauge the safety of roads for motorists, pedestrians and cyclists. A road rating of five stars means a road poses the least risk of death and/or injury to people, while a rating of one star means a road poses the highest risk. “ADB prefers that designs for new roads or to upgrade existing ones have at least a three-star rating standard, and encourages all its developing member-countries to rate their roads for safety,” Smith said. Smith said data from the Organization for Economic Cooperation and Development road deaths are increasing. Among 31 countries for which data are consistently available, there was a 3.3-percent increase in road fatalities in 2015 compared to the year before. In 2016 the number of fatalities increased in 14 countries. Around 10 countries registered more road deaths for two consecutive years in 2015 and 2016. In the Philippines ADB earlier said more than half or 52.5 percent of road deaths occur involving two to three-wheeled vehicles, while only 25.3 percent die in four-wheeled vehicles. This was based on 2013 data where there were a total of 10,379 road deaths in the Philippines. This translates to 11 people out of 100,000 dying in road accidents. ADB said the safest place in Southeast Asia to be a pedestrian is Malaysia, where only 6.6 percent of road deaths involve them. In contrast, Thailand is the most dangerous place for pedestrians where 26.9 of road deaths involve them. “More and more, governments are using star ratings as an internationally recognized, evidence-based approach to guiding design and investment and for policy setting. Why? Because investing in safer road infrastructure results in safer, happier and more productive communities,” Smith said. Ensuring road safety will also be part of the Improving Growth Corridors in Mindanao Road Sector Project, which ADB is financing. ADB will be extending a $380 million-worth loan to the Philippine government to improve 280 kilometers of national primary, secondary and tertiary roads and bridges in Mindanao. The total project cost is estimated at $503 million, with the Government of the Philippines contributing $123 million. The project also include improvements, such as paving earth roads, replacing damaged road sections, widening existing roads, adding surface overlays, and replacing and strengthening bridges. The project roads will be designed with features to strengthen resilience to climate change. “Road safety will be improved by stabilizing unstable sections, installing road-safety barriers, including proper traffic- engineering signs and display boards,” the project documents stated. Efficient road transport is crucial for the Philippines’s economic growth, but the sector has not kept up with population growth. About 23 percent of the national road network is in poor condition due to various reasons, including inadequate funding, lack of maintenance and the impact of climate change, such as flooding. Mindanao’s road network is less developed than the national average, with only 70 percent of the roads paved, compared with 82 percent in Luzon and 89 percent in the Visayas. Despite its rich natural resources, ADB said Mindanao also has the highest poverty incidence among the Philippines’s three island groups at 32 percent, largely because of civil conflict and low economic growth.
A6
The World BusinessMirror
Wednesday, December 20, 2017 • Editor: Lyn Resurreccion
Mixed signals emerge as Trump presents national security policy
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ASHINGTON—President Donald J. Trump presented a blueprint for the country’s national security on Monday that warns of a treacherous world in which the United States faces rising threats from an emboldened Russia and China, as well as from what it calls rogue governments, like North Korea and Iran.
To fend off these multiple challenges, the report says with Cold War urgency, the government must put “America First,” fortifying its borders, ripping up unfair trade agreements and rebuilding its military might. But in his speech announcing
the strategy, Trump struck a much different tone. Instead of explaining the nature of these threats, he delivered a campaign-like address, with familiar calls to build a wall along the southern border with Mexico and a heavy dose of self-congratulation for the bull
President Donald J. Trump, with Vice President Mike Pence, speaks about the administration’s national security strategy, at the Ronald Reagan Building in Washington, on December 18. Trump’s plan envisions a world in which the United States confronts two “revisionist” powers—China and Russia—that are seeking to change the global status quo, often to the detriment of America’s interests. Doug Mills/The New York Times
market, the low jobless rate and tax cuts, which, he promised, were “days away.” “America is in the game, and America is going to win,” he said, to an audience that included Cabinet members and military officers. The disconnect between the president’s speech and the analysis in his administration’s document attests to the broader challenge his national security advisers have faced, as they have struggled to develop an intellectual framework that encompasses Trump’s unpredictable, domestically driven and Twitter-fueled approach to foreign policy. The same confusion has confronted foreig n gover nments trying to understand Trump’s conflicting signals. Trump, for example, spoke of how Russia and China “seek to challenge American influence, values and wealth.” But he made no mention of Russian interference in the 2016 presidential election, even though the document itself makes fleeting reference to “Russia using tools in an attempt to undermine the legitimacy of democracies.” Indeed, Trump preferred to focus on a Sunday phone call from President Vladimir Putin of Russia, who thanked him for intelligence that the Central Intelligence Agency had passed on to Russian authorities, which Trump said foiled a terrorist attack in Saint Petersburg that could have killed thousands of people. “That’s a great thing,” he said, “And the way it’s supposed to work.” Outlining a national security strategy is mandated by Congress, but Trump broke with his two most recent predecessors, Presidents Barack Obama and George W. Bush, in announcing one himself.
His aides said that reflected his enthusiastic approval of the exercise, and that the Trump administration published its strategy months earlier than either the Bush or Obama administrations. The strategy—which administration officials said was drawn from speeches that Trump had delivered during the 2016 campaign and as president while at the United Nations and on trips in Europe and Asia—ranges widely and includes jihadi extremism, space exploration, nuclear proliferation and pandemics. But it is animated by a single idea: That the world has been on a three-decade holiday from superpower rivalry, and it suggests that that holiday is now over. “After being dismissed as a phenomenon of an earlier century, great power competition returned,” the document says. China and Russia, it says, “are determined to make economies less free and less fair, to grow their militaries, and to control information and data to repress their societies and expand their influence.” The document’s call to push back against China on trade is familiar from the campaign, but its description of the challenge posed by Russia seems at odds with Trump’s own refusal to criticize Putin for his seizure of Crimea, his efforts to destabilize Ukraine and his violations of a key nuclear treaty with the US. While Obama’s two national security strategies emphasized cooperation with allies and economic partners, Trump’s strategy attempts to walk the line between his campaign slogan of America First and an insistence that he is not rejecting working with US partners—as long as they do so
on terms advantageous to the US. Trump’s strategy contains more than a few hints of a return to a Cold War view of the world. Obama used his strategies to de-emphasize nuclear weapons as a key to US defense, but Trump calls those weapons “the foundation of our strategy to preserve peace and stability by deterring aggression against the United States.” The national security strategies of past administrations were sometimes strong predictors of future action: It was Bush’s 2002 strategy that revived a national debate about the justifications for preemptive military action. And it helped frame the rationale for the invasion of Iraq six months later, arguing that the risks of inaction in the face of a major threat made “a compelling case for taking anticipatory actions to defend ourselves.” The new strategy never uses the word “preemption,” including in its discussion of North Korea. This omission comes despite the fact that Trump’s national security adviser, Lt. Gen. H.R. McMaster, has said that if diplomacy and sanctions fail, “preventive war,” or a preemptive strike, might be needed to keep the North from attacking the US. Obama viewed China as a potential partner in confronting global threats, from Iran’s and North Korea’s nuclear programs to climate change, although he was critical of it on human-rights issues. Trump defines China as a “revisionist” power, reflecting the administration’s worry that Beijing is trying to rewrite the rules of the post-World War II order to match its own economic interests and global ambitions. (Russia is also described as revisionist, though it does not have China’s economic reach or influence.) The Trump administration’s language suggests it will push back hard on China’s state-driven economic practices and expansionist claims in the South China Sea, while not challenging it on rights issues. Trump has tried working with China to curb North Korea’s nuclear and missile programs, even setting aside his America First trade agenda in an effort to persuade President Xi Jinping to put more economic pressure on the government of Kim Jong Un. But the document suggests a return to his campaign promises, and states explicitly that “the United States will no longer turn a blind eye to violations, cheating or economic aggression.” New York Times News Service
US vetoes UN resolution on Jerusalem
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NITED NATIONS—The United States on Monday vetoed a resolution supported by the 14 other UN Security Council members that would have required President Donald J. Trump to rescind his declaration of Jerusalem as the capital of Israel, a vote that showed the depth of global opposition to the US move. The United States was certain to veto the Egyptian-sponsored resolution, but its Arab supporters wanted the vote to demonstrate that countries everywhere and even many US allies, such as Britain, France and Japan are against Trump’s action. The Palestinians immediately announced that they would seek a resolution with similar demands in the 193-member General Assembly, where there are no vetoes. But unlike the Security Council, the assembly’s resolutions are not legally binding. Palestinian Ambassador Ri-
yad Mansour told reporters after meeting with the General Assembly president that he expects a vote this week. He said he hopes for “overwhelming support” telling the Trump administration that the international community doesn’t accept the US position, which he said violates international law and Security Council and General Assembly resolutions. United States A mbassador Nikki Haley called the Security Council resolution “an insult” that won’t be forgotten, saying the UN forced the US to cast a veto simply because of its right to decide where to put its embassy. She said the veto—the first cast by the US in more than six years—was done “in defense of American sovereignty and in defense of America’s role in the Middle East peace process.” The vetoed resolution would
have demanded that all countries comply with 10 resolutions on Jerusalem, dating back to 1967, including requirements that the city’s final status be decided in direct negotiations between Israel and the Palestinians. It would also have affirmed that “any decisions and actions, which purport to have altered, the character, status or demographic composition of the holy city of Jerusalem have no legal effect, are null and void and must be rescinded.” Trump shattered decades of unwavering United States neutrality on Jerusalem on December 6 when he declared that the US recognizes the divided holy city as Israel’s capital and will move its embassy there. Trump insisted that after repeated peace failures it was past time for a new approach, saying his decision was merely based on reality. AP
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briefs China warns of ‘pressure, challenges’ after Trump report
BEIJING—China’s main official news agency warned on Tuesday that United States-Chinese relations will face “more pressure and challenges” following President Donald J. Trump’s decision to label Beijing a rival in a national security report. The decision reflects a “victory of hardliners” in Trump’s administration, said the Xinhua News Agency on its official microblog. It said Trump’s stance “probably means Chinese-US economic and trade relations will face even more pressure and challenges.” The Global Times, a newspaper published by the ruling Communist Party, said the report “reflects Washington’s reluctance to accept the reality of China’s rise.” AP
Singapore bans 2 more people from finance for 1MDB breaches
Singapore banned two more financial professionals over breaches related to 1Malaysia Development Bhd. (1MDB), taking to eight the number of prohibitions handed down by the city in connection with the troubled state investment fund. The Monetary Authority of Singapore issued a lifetime prohibition order on former private banker Yeo Jiawei and placed a three-year ban on Kevin Scully, the former CEO of NRA Capital Pte., it said on Tuesday. Singapore is taking steps to safeguard its reputation in the aftermath of the largest money laundering probe in its history. The city shut the local units of two Swiss banks, seized hundreds of millions in assets and convicted several people over offenses connected to 1MDB, which has consistently denied wrongdoing. Bloomberg News
House G.O.P. unveils $81-B relief for hurricanes, fires
WASHINGTON—House Republicans on Monday unveiled an $81-billion disaster-aid package to help hurricane-ravaged communities and states hit by wildfires, almost double the amount requested by President Donald J. Trump. GOP leaders promised a vote this week on the measure, which would bring the total provided in response to this year’s devastating round of hurricanes to more than $130 billion—exceeding the cost to taxpayers of Hurricane Katrina. The emergency aid would provide $26 billion for community development block grants, which would help Florida, Texas and the Caribbean rebuild, along with Western states recovering from wildfires. There’s funding for prevention of future flooding, highway repairs and help for small businesses. There’s almost $28 billion for the government’s chief disaster-aid account, $4 billion of which could be used to help cashstrapped governments, such as Puerto Rico’s stay afloat. AP
Amtrak train on new route hurtles onto highway, kills 3
DUPONT, Washington—An Amtrak train making the first-ever run along a faster new route hurtled off an overpass south of Seattle on Monday and spilled some of its cars onto the highway below, killing at least three people, injuring dozens and crushing two vehicles, authorities said. Attention quickly turned to the train’s speed. A web site that maps location and speed using data from Amtrak’s train-tracker app showed the train was going 81.1 miles per hour (129 kilometers per hour) about a quarter of a mile from the point where it derailed, where the speed limit is significantly lower. There were 80 passengers and five on duty crew when the train derailed and pulled 13 cars off the tracks. Authorities said there were three confirmed deaths. More than 70 people were taken for medical care—including 10 with serious injuries. AP
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Banking&Finance BusinessMirror
Wednesday, December 20, 2017 • Editor: Jun B. Vallecera
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Sovereign credit standing gets R&I nod
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By Bianca Cuaresma @BcuaresmaBM
redit-rating agency R&I on Tuesday affirmed the Philippines’s BBB rating on the basis of solidgrowth prospects backed by a statesupported and aggressive investment in infrastructure. The Japan-based credit watcher said the affirmation came with the assessment of continued economic expansion, buoyed by robust private consumption traced in part to stable remittance inflows. R&I also particularly lauded the country’s rising share of investment in local output or the GDP, noting the aggressive public investment program initiated by President Duterte would serve as “a platform” for economic growth in the near-term.
The rating affirmation was also given a “stable” outlook, implying little to no room for a ratings movement in the next 12 to 18 months. “The rating outlook is stable, because at present there are few factors that will exert downward pressure on the sovereign’s creditworthiness,” R&I said. Cited as particular threats to the economy include the stubbornly low income levels of Filipinos despite accelerated growth, as well as rising price pressures attributed
Dominguez seeking greater MSME inclusion measures T
he Department of Finance (DOF) on Tuesday committed to support the swift passage of legislative measures that ensure greater financial access for micro, small and medium enterprises (MSMEs), such as the use of nontraditional collateral for loans, for instance. According to DOF Undersecretary Gil S. Beltran, there are bills in Congress seeking to strengthen the existing secure transactions framework and modernize the country’s warehouse receipts system that help ensure MSME financial inclusion. “I cannot but emphasize how important [the secured transactions law and warehouse receipts law are] given the country’s goals of improving competitiveness, harnessing the potential of the country’s MSMEs, and making these MSMEs, especially with those that have linkage to the global supply chain, on a par with that of regional players,” Beltran said. The secured transactions law seeks to establish a legal framework for the use of nontraditional collateral, such as accounts receivable and inventory, in applying for loans in financial institutions. Modernizing the warehouse-receipts system involves overhauling a 105-yearold law to make way for a computerized central registry of all warehouse receipts used by farmers and other members of the agriculture sector as collateral to obtain credit. According to the DOF, farmers are issued warehouse receipts as proof of ownership of goods stored in warehouses. The receipts are then traded in exchange for credit to informal lenders as banks are often hesitant to extend loans using unreliable and easily tampered paper receipts as collateral. “On the part of the DOF, we remain committed to support the passage of the Secured Transactions Law and the Warehouse Receipts Law. We will also work on creating the enabling environment for these laws to affect their intended benefits, such as creating linkages between financial services suppliers and users, and supporting the development of a market for secured transactions,” he added. Beltran underscored the need to empower MSMEs to realize the global goal of eradicating poverty, pointing out that these enterprises “are the life-force of the regional economy, account for over 40 percent of the total economy, 97 percent of total enterprises and employ half of the labor force in the region.” But more than 40 percent of MSMEs in the region are hampered by lack of
Dominguez hard assets that can be used as collateral and a credible credit-information system that banks used to make loan decisions, according to Beltran. “We focused on MSMEs, recognizing their important role to the economy. MSMEs provide not only employment but also enable linkages in the production chain. We have seen many economies, particularly in Southeast Asia, emerge to be among the engines of global growth, on the back of a healthy MSME ecosystem,” he said. Earlier, Finance Secretary Carlos G. Dominguez III assured the country’s MSMEs that the government is ready to provide funding support to gird them up for competition in the imminent common market for Southeast Asian economies, with two state-run banks having already made available over P82 billion this year to help entrepreneurs in the countryside expand their businesses. Land Bank of the Philippines has extended outstanding loans to MSMEs totaling P71 billion from January to September this year, while the Development Bank of the Philippines has extended a total of P11.6 billion to MSMEs in the first 10 months of 2017. Rea Cu
to local and global developments. “R&I will keep an eye on whether solid economic growth will bring about a steady rise in income levels,” the credit watcher said. “Going forward, given likely inflation pressure from tax reforms, higher oil prices and the weaker currency, as well as from buoyant domestic demand, consumer price trends and the way the Central Bank controls the situation would draw our attention,” the credit watcher said. It also said it was not “disturbed” by the projected current account deficit and wider fiscal deficit this year despite concerns raised by other independent analysts. “R&I does not immediately take a negative view of the shift from a surplus mainly attributable to remittances from overseas, which tend to be used for consumption, to a deficit stemming from capital goods imports that can be the seeds of future economic growth,” R&I said. “Fiscal discipline is of little concern, in R&I’s view. While increasing expenditure particularly on infrastructure investment, the government gives due consideration to revenue generation and fiscal sustainability, as exemplified by
Australia may raise rates as soon as May
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ustralia’s central bank may start raising interest rates from a record low as soon as May, putting the brakes on house-price growth, according to hedge fund manager Brett Gillespie. A drop in the unemployment rate to 5 percent in the second quarter of next year will be the trigger for the Reserve Bank of Australia (RBA) to start lifting rates, said Gillespie, who runs a global macro fund at Ellerston Capital Ltd. The RBA will raise rates twice every 12 months for a cumulative 1.5 percentage-point increase over the next three years, he wrote in a note posted on the firm’s web site. That is a more hawkish view than most economists, with the central bank expected to sit tight until the fourth quarter of 2018, according to the median forecast of 24 analysts in a Bloomberg survey. Australia has held rates at 1.5 percent for the past 16 months to help the economy transition from the end of the mining-investment boom. The drop in unemployment will give the RBA a “green light to ease back on super low interest rates as the mining states recover,” said Gillespie, who spent 11 years at Paul Tudor Jones’s Tudor Investment before joining Ellerston last year. The firm managed almost A$5.4 billion ($4.1 billion) as of November. Housing prices, which have more than doubled since the turn of the century, will go sideways for the next few years, Gillespie said. “Don’t expect a property crash, at least not until you expect a recession, which we don’t,” Gillespie wrote. “Property prices aren’t a bubble about to burst. But it is also an asset class that won’t be a good investment.” Property prices will rise between 0 percent and 5 percent a year for the next few years, he said. “The spectacular returns in property the last 25 years is almost entirely due to moving from a high inflation/high interest-rate environment to a low inflation/low interestrate environment,“ Gillespie wrote. “Low rates have been capitalized into prices. It has happened. It won’t happen again.”
Case clippings
By Justice S J Ranada Jr.
BAIL–denial even if reasonable doubt exists Bail hearings before the Sandiganbayan are limited to the determination of whether there is a strong presumption of guilt. It is merely a preliminary determination, and the Sandiganbayan may deny admission to bail even when there is reasonable doubt as to the guilt of the accused. The prosecution can discharge its burden by proving that the evidence against the accused shows evident proof of guilt or a great presumption of guilt. Napoles v. Sandiganbayan GR 22416207 Nov. 2017 Reyes, J
the ongoing reforms to broaden the tax base. The Duterte administration has the strongest enthusiasm for larger infrastructure investment among recent administrations and is working to improve efficiency in spending,” it added. The ratings agency also took into account the President’s rhetoric, saying his stance seemed to already have “shifted” in the course of his term. “In the first months of his presidency, Mr. Duterte caused diplomatic friction with the US, a traditional partner on
the political and economic fronts, and moved closer to China, with which the Philippines has territorial disputes in the South China Sea. Although such moves signaled potential significant changes in the Philippine government’s diplomacy, he shifted to a more realistic and pragmatic stance over time,” the ratings agency said. “R&I believes that the risk of diplomatic relations dampening the economy has diminished after being elevated following his inauguration,” it added.
Phl business data bank launched
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he country has launched a digital platform that eliminates the need for business owners to bring numerous documented proof when transacting with the government, thus streamlining the application and renewal of business permits. The Web-based Philippine Business Data Bank (PBDB) system allows government agencies to verify the existence of a business entity using a single-reference document. The Department of Information and Communications Technology, which manages the system, said the verification of a specific business entity is limited to exact name searches, which prevents users from resorting to random searches of phishing. The information in the PBDB database is initially provided by the Department of Trade and Industry (DTI), Securities and Exchange Commission (SEC), Cooperative Development Authority and the local
government units, starting with Quezon City. The PBDB will, in the future, include business data of economic locators doing business in the different economic zones of the Philippines. Finance Undersecretary Gil S. Beltran said the PBDB system is among the initiatives of the Department of Finance as lead agency of the government’s anti-red tape program to improve the ease of doing business in the country. Beltran said it will also involve the DTI, which chairs the National Competitiveness Council, the SEC, the country’s economic zones and over 1,600 local government units. The PBDB was developed by a team from the Advanced Science and Technology Institute of the Department of Science and Technology and managed by the Department of Information and Communications Technology.
Will there be a next year?
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e all know that we cannot stop the march of time and yet we sometimes act as if we have all the time in the world. The top 3 things that come to mind in terms of putting things off is attending reunions and visiting close relatives and old friends; getting some work or a project done; and the third is doing something for yourself. There is always the excuse of being busy, having a scheduling conflict and even if you had the time and were available, being tired, thinking about the traffic and parking, together with not knowing how to break the ice makes us justify our situation with a mental note that you will do it next time, after all, there is always next year. The reality of the situation is that, there may be no next time or next year, your relative or friend could be 6 feet under by then and so could you. Before you start feeling guilty about not meeting everyone and attending every single reunion or party, I am talking about people that matter to you because they have done something wonderful for you, they have been genuinely good to you or they raised you up really well. Forget about those fair weather friends who were only there during the good times and those people who threw you under the bus. Take the time to make them feel loved and appreciated. Sometimes just seeing you and spending time with you already makes them happy. Perhaps, the situation is now reversed and you could do something for them. In that case, as long as it is legal, you should. I can only say that the regret of not having done so while you could, will eat you up alive. I am glad that I realized how important this is as I got older, and my only regret now is not having done so earlier and with more intensity. Leaving work undone or not starting a project is not quite as irreplaceable as missing out on the opportunity to spend time with a loved one who is no longer with us. At worst, this is a missed opportunity to make money, such as missing out in investment opportunities like buying a real-estate property or a country-club share when the prices were low.
FINEX free enterprise George S. Chua A very recent example was when Alabang Country Club bid out shares at the start of this year at 4 million pesos a share, and as of today is now doing 6.5 million, a return of 62.5 percent in less than one year. Just think of how much money you could have made if you had acted on a timely basis. Of course, the opposite could also happen when you are on the selling side. With the way real-estate properties keep on moving up, delaying a project might actually end up being in your favor. Third but certainly not the least important is doing something for yourself. This is one item that we are all certainly guilty of. How many of you have been putting off having that check up and seeing the doctor? How many of you have been putting off going on a diet with one excuse after the other? How many of you have been putting off finishing your degree or getting your certification? How many of you have been delaying that long deserved vacation with the wife and kids? The sad thing about delaying doing all these things for yourself is that, it could end up being too late for you. You could die from a health condition that you never take care of, your kids could have grown too old to truly appreciate the wonder of Disneyland, you could have gotten stuck in a job in you never liked and not having achieved the full potential you so richly deserved if only you had the guts to move on to a better job or started your own business. Will there be next year? No one can answer that question but you certainly can do something about it by making the best of this year! Merry Chr istmas and a Happy New Year to everyone! Comments may be sent to georgechuaph@ yahoo.com
ExportUnlimited BusinessMirror
Editor: Efleda P. Campos • Wednesday, December 20, 2017 A9
DTI holds Usapang Exports on Innovative Ideas
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By Gliceria N. Cademia | Trade and Industry Development Specialist, DTI-EMB
HE Department of Trade and Industry’s Export Marketing Bureau (DTI-EMB) conducted an info session dubbed Usapang Exports on Innovative Ideas at St Giles Makati Hotel on December 6. Usapang Exports was one of the activities of the National Exporters’ Week celebrated every first week of December per Presidential Proclamation 931, series 1996 and House Resolution 33. EMB Assistant Director Agnes Perpetua Legaspi told the 80 participants from the government, services, manufacturing and food sectors the forum could provide them with ideas for innovation and collaborate with various sectors of economy and among themselves to help them find and develop new markets. Resource Person Arrian Lim, cofounder of Enlit, a company established to inspire, motivate, teach and enable aspiring or start-up entrepreneurs through seminars, speaking engagements and individualized coaching and consultation, believed that one need not go into business
first to obtain entrepreneurial literacy. Start-ups can collaborate with Enlit which provides this, he said. Lim added customers are the starting point of any business innovation, while innovation is the key to survival. Business must answer two basic questions: “Who are our customers?” and “What do they want?” He described an enlightened entrepreneur as thinking differently and seeking to do things in new ways to better respond to those questions. Lim is also the owner of Snack-Attack Franchise, which Enlit helped expand to four branches and realizing 100-percent return on invest-
ments (ROI) in four months. The innovation he employed was engaging customers through direct experience of the products. “One can’t change the way a product looks, but one can change the way it is seen,” Lim said. Alvin Juban, Game Developers Association of the Philippines president and Synergy88 Digital Inc. director for business development, said collaboration with the government in joining business missions is very helpful. Amina Aranaz Alunan, designer of Aranaz and founder of SoFA Design Institute, said their company
STYLEGENIE Inc. CEO Abigail Joyce Victorino, one of the speakers during the Usapang Exports held at Saint Giles Makati Hotel on December 6 presents “Collaboration: Key to Business Expansion.”
wants to show the world the Philippine innovation in handmade design. In 1980 Aranaz De Lujo Inc. was founded as a manufacturer and exporter of international brands. Its breakthrough in the international scene began when it joined Manila Fame in 2012 by innovating on the raw materials used for their bags. Aranaz was one of the participants of 2016 and 2017 Exclusively By Hand Outbound Business Matching Mission in Japan, which opened several orders of bags for her company. It has been participating in international fashion shows, such as the International Fashion Showcase in London.
Argentinian investments to expand sourcing of local seaweeds
DTI innovates marketing mentorship
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N the sidelines of the meeting of the 11th Ministerial Conference of the World Trade Organization, Trade Secretary Ramon M. Lopez discussed with an Argentinian investor how to expand the sourcing of local seaweeds. Lopez met with one of the owners of foodingredient producer Farmesa, which has a plan to set up a seaweeds-processing plant in the Philippines. The Philippines will be their first manufacturing operations outside Argentina, Agustin Perez, head of Farmesa’s International group. Perez said aside from the big potential of locally sourcing seaweeds, he finds the Philippine business environment stable and the economy very dynamic, which adds to his confidence in pursuing their growth story in the Philippines. He cited the country as one of the fastest-growing economies in the world. Farmesa is an Argentinian family enterprise that specializes in research and development, production and exportation of food additives and ingredients to several food companies worldwide. Lopez reaffirmed their expansion plans can bring them closer to both the source of their main ingredient—seaweeds—as well as the market of their products in the Philippines and Asia. They also recognize the potential of harnessing the free-trade agreements and the general system of preferences (GSP) trade arrangements the Philippines has with other countries in the region, as well as in the United States and European Union. Lopez lauded Farmesa for their decision to choose the Philippines ahead of other candidate countries for the company’s expansion. The availability of raw materials, plus the strategic location of the country factored highly in the country’s evaluation. They currently had to source seaweeds from several Asian countries and bring it to Argentina for processing. Now they can focus their sourcing in the Philippines and do the processing right in the country. While they have existing client companies, they plan to export the bulk of their production. Lopez reassured the investor of President Duterte’s commitment there will be no corruption in their dealings with the government and to ensure their ease of doing business, the full assistance of the Board of Investments and the Philippine Economic Zone Authority will be extended when they start to implement their plans to produce and export. Also in the meeting were the Board of Investments Managing Head, Undersecretary Ceferino S. Rodolfo, and Department of Trade and Industry’s Mexico-based Commercial Counselor for Latin America Vichael Angelo Roaring.
Aranaz has captured high-end markets and generated stockists in Asia, Europe, Middle East and in developed countries, such as the United States and Russia. Aranaz is now available in over 80 stores across Europe, the Middle East, Japan and the US. It also has online presence and visibility in international media. Meanwhile, StyleGenie Inc. CEO Abigail Joyce Victorino presented “Collaboration: Key to Business Expansion.” StyleGenie is “the first styling plus clothing subscription box in the Philippines with mission to grant closet wishes and boosts women’s confidence one box at a
time.” It is available online. It is a start-up business launched in August 2016. Subject Matter Expert/Instructor of CDM Philippines Michael John Menzon presented “E-Commerce Platforms: A Technology Set to Transform Retail Marketing.” He endorsed shifting away from cash because of the high costs of logistics and shipping. Paymaya has already reached P1-billion revenue in 2017. In 2018, DHL and Paymaya will collaborate to serve the international market. Most saleable products in e-commerce are fashion and electronics, Menzon said. He also discussed e-commerce education, landscape, models and innovation in the Philippines. He highlighted five pillars and principles of e-commerce: findability, mobile search, open source e-commerce software, customer satisfaction and the right e-commerce platform. Alibaba Country Managers Michael Lee and Lee Lisa also graced the information forum and announced their online-education service for Philippine business owners on how to set up business on their online platform starting 2018.
PHL GAINS MEMBERSHIP IN GLOBAL HALAL ACCREDITATION FORUM
Positive developments await the Philippine halal industry as the Philippine Accreditation Bureau (PAB) of the Department of Trade and Industry (DTI) formally signed on December 6 a full-membership agreement with the International Halal Accreditation Forum (Ihaf). Being a full member of the Ihaf gives DTI-PAB voting rights at the general assembly and committee meetings that could be highly beneficial to the Philippine halal industry. This membership is also seen to further halal trade between the Philippines and other Ihaf member-countries. The Ihaf is an independent, non-governmental network of accreditation entities mandated to enforce halal standards in their respective countries and regions. Empowered by its mandate to protect the growing number of halal consumers and to facilitate international trade, Ihaf establishes a solid ground for the global industry of halal food and nonfood products. DTI Undersecretary for Trade and Investments Promotion Group Nora K. Terrado (left) is with Ihaf Secretary-General Mohamed S. Badri during a courtesy call held at the DTI International Building, Makati City on December 7.
T the sidelines of the opening of Sikat Pinoy National Trade Fair on December 6, Trade Secretary Ramon M. Lopez signed a memorandum of agreement with Markprof Foundation headed by Josiah Go to create marketing tutorial videos for micro, small and medium enterprises (MSMEs). “We are bringing marketing seminars of the experts in the field of marketing and branding closer to our MSMEs. The videos will be accessible and available in all Negosyo Centers in municipalities and provinces nationwide,” Lopez said. The 22 marketing videos to be produced by Markprof Foundation will be distributed to all 716 Negosyo Centers in the country. The videos will contain different principles, as well as strategies in marketing and brand-building to help local MSMEs overcome challenges and grow their respective businesses. The trade chief also shared that online mentoring will be available soon to make learning and mentoring more accessible to all MSMEs anytime and anywhere. The Department of Trade and Industry (DTI), the government-
agenc y champion promoting MSMEs, takes a holistic and strategic approach in supporting the sector through its 7Ms strategy (mind-set change, mastery, mentoring, money, machine, market access and models of business). The National Trade Fair is one of the initiatives of the DTI to provide market access for the products of MSMEs and features One Town, One Product offerings from all regions in the country. The fair also showcases the output of the DTI’s shared service facilities beneficiaries, including select machineries and equipment that helps in increasing the productivity and improving competitiveness of MSMEs. With the support of the Duterte A d m i n i st r at ion i n e n a bl i n g and providing opportunities to MSMEs, DTI’s Pondo sa Pagbabago at Pag-asenso microfinancing program has benefitted 30,000 MSME borrowers. “We will continue to innovate and come up with more programs to help, support and empower our MSMEs, and encourage more Filipinos to take part in our growth story,” Lopez said.
PHL animation sector participates at Mipcom in France
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HE Outbound Business Matching Mission (OBMM) for the Philippine animation in France in conjunction with the Marche’ International des Programmes de Communications (Mipcom) at the Palais des Festival in Cannes, France from October 14 to 21 was successfully implemented in collaboration with the Philippine Trade and Investment Center-Paris and Animation Council of the Philippines Inc. Mipcom was a gathering of industry players in a four-day event that featured global entertainment content across all platforms. Main activities included company and country exhibits, business meetings, production screenings, and attendance to conferences with topics on new trends and developments in the entertainment content industry, as well as keynote speeches from known industry icons. Mipcom served as a major venue to launch and sell entertainment content. Registered participants included major content buyers, global production companies and key decision-makers in the international and broadcasting and entertainment industry. Major acquisition executives, production studios and producers converged at Mipcom for the main objective of finding the right partners for their latest projects in T V, film, web-based or subscription video on demand (SVOD),
live-action or animation. This OBMM is a strategic approach with the industry to aggressively promote the export of services to increase Philippine export sales and promote the Philippines as a world-class provider of content and animation services. T he par ticipation in Mipcom 2017 boosted the international content communit y’s awareness on the strengths and capabilities of the Philippines in content and animation, generated business leads and oppor tunities for the pa r t ic ipat i ng Ph i l ippi ne compa n ies, establish strateg ic net works and linkages w ith relevant companies, organizations and institutions in the globa l content market. Mipcom 2017 generated 13,979 participants; 1,600 plus producers; 100 plus countries; 1,967 exhibiting companies; 4,702 registered companies; 1,600 VOD and digital buyers; 4,825 buyers; and 24,398 square meter of exhibition surface. The Philippine companies were able to generate initial total sales of $10.726 million, to be realized in one year for production and preproduction services, coproduction and content distribution in animation, achieved through over 103 business meetings, 132 significant business contacts, more than 50 inquiries answered directly at the Philippine Pavilion, which included representatives from
A PHILIPPINE delegation recently joined an Outbound Business Matching Mission for Philippine animation in France, including Takahiro Kishimoto (from left), TV-Asahi; Assistant Director Anthony B. Rivera of the Department of Trade and Industry’s Export Marketing Bureau; Yasuo Kawashima, TV-Asahi; Motoko Nakai, TV-Asahi; actress Cherrie Gil; Jackelyn Chua, Synergy 88; and actor John Arcilla.
France, Italy, Portugal, Spain, Argentina, Ukraine, the Netherlands, Brazil and Sweden, and with the potential to create 150 new employment in the country. Trade leads and related initiatives will be pursued in collaboration with the industry stakeholders. Philippine animation companies
that participated in Mipcom were Synergy88 Digital Inc., ASI Animation Studios Inc., Camsur Animation Studio, 888B Animation Studio, Animation Council of the Philippines, Toon City Academy, Toon City and Toast and Brew Animation and Game Design Studios Inc. Gliceria N. Cademia
A10 Wednesday, December 20, 2017 • Editor: Angel R. Calso
Opinion BusinessMirror
www.businessmirror.com.ph
editorial
Special safeguard scheme crucial for PHL
T
here were unmistakable signs that the 11th World Trade Organization (WTO) Ministerial Conference (MC), dubbed “MC11,” would disappoint rich and poor countries. Months before trade and agriculture ministers headed to Buenos Aires, Argentina, for the biennial gathering, countries like India and the Philippines made it clear that they are prepared to walk away from talks that will not include their priorities.
The Philippines had pushed for substantial reduction and eventual elimination of “trade distorting” subsidies, as well as the inclusion of a special safeguard mechanism (SSM) in a new agricultural trade deal. During MC5 in Hong Kong, developing and least-developed countries (LDCs) even formed an alliance to pressure rich countries to abolish their export subsidies. Twelve years after banding together to push for the removal of trade-distorting subsidies, rich countries led by the United States and the European Union remained noncommittal on the issue. What made it more difficult for the Philippines to return to the negotiating table in Argentina was the refusal of rich countries to give developing countries the SSM—a scheme that will allow developing countries and LDCs to raise tariffs temporarily to deal with import surges or price falls. The SSM would help discourage the dumping of cheap agricultural products from rich countries that provide huge subsidies to their producers. The current special safeguards (SSG) regime, Manila reasoned out, is not adequate to protect their farm sectors from import surges. Philippine trade officials noted that the country’s current trigger price, or trigger level, for corn is 5 cents per kilogram (kg) and $36 per kg for pork imports. This means that Manila could only slap additional tariffs on imported corn and pork if the price falls below 5 cents and $36, respectively. But the government noted that in the past three years, the average price of corn imports is 31 cents, while the average price of imported pork is $1.65 per kg. This makes it virtually impossible for the Philippine government to impose more duties on cheap imports. Manila noted that the formula used to compute a country’s trigger price is still based on 1986 to 1988 prices. These figures are ridiculous, to say the least. Despite the obvious need to scrap the current SSG scheme and replace it with SSM, rich countries remain lukewarm to it. Under the Philippines’s SSM proposal, the trigger price would be computed using a rolling three-year average price of imports. Once the SSG is invoked, affected countries could slap an additional tariff of as much as 90 percent of the difference between the trigger price and the imported price. Apart from making local produce more competitive, the additional tariffs that would be collected by developing countries and LDCs would boost government revenues, which can be used to fund social programs. Trade negotiators achieved practically nothing during the WTO ministerial conference, which concluded last week. But the work does not stop and negotiations would continue. WTO Director General Roberto Azevêdo called on member-countries to show some “flexibility” to come up with new agreements on issues affecting global trade. Poor countries like the Philippines had contended with rules that placed their producers at a disadvantage. It is time for other WTO members to do their part and keep the multilateral trading system going. Since 2005
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Free fire Continued from A1
W
E are poised again to adopt these twin resolutions as the most massive and comprehensive subject that this Assembly considers year after year. We need only to recall the image of our planet in space to understand why: A pale blue planet floating in space because over two-thirds of the surface is water. And one-half of that surface is high seas, beyond the jurisdiction of any state; ideally beyond the grasp of commercial greed and acquisitive ambition for the heritage of mankind and the only promise of its long future. The Romans called the Mediterranean “Mare Nostrum.” Today, in the words of Paul, “Civis Romanus sum”—We are all Romans and all the world’s seas are ours. In June we affirmed, through our Oceans Conference Call for Action, our strong commitment to conserve and sustainably use our oceans, seas and marine resources pursuant to Sustainable Development Goal 14; to raise global awareness of the threat to the oceans; to reverse the seemingly unstoppable decline of the ocean’s vitality; and to mobilize global partnerships for these purposes. Sustainable ocean management is key for an archipelagic country like the Philippines. Indeed, it is the key to the health of any country, advanced or developing. Oceans are not only a source of life-giving goods; everything about it is living. Plow the fertile land but the air above is barren. Farm the oceans and the very medium breathed by
denizens of the deep is alive; every drop teems with life. Oceans are whence we came; from thence the Book of Common Prayer summons us all back to eternal life—“when the sea shall give up its dead.” Our friend Peter Thomson said, “When it comes to the ocean, it’s the common heritage of humankind. There’s no North-South, East-West when it comes to the ocean. If the ocean is dying, it’s dying on all of us.” As a party to the 1995 Fish Stocks Agreement, the Philippines is committed to the conservation of, and sustainable access to straddling and highly migratory fish stocks—within and beyond the exclusive economic zone. It is, likewise, committed to management of those stocks based on the precautionary approach and
the best available scientific information. Equally are we committed to eliminating illegal, unreported and unregulated fishing, and the subsidies that encourage overfishing leading to the irreversible decline of marine life. Our collective neglect—or to be accurate, our greedy exhaustion of the oceans’ resources for immediate gain and at the cost of irreversible damage has resulted, not only in ever smaller fisheries catch, in the worsening illicit trafficking in protected species, but also in ocean acidification, coral bleaching, sealevel rise and coastal flooding, and deadlier tropical cyclones brought on by ocean warming. Mr. President, business cannot go on as usual. Among the threats to the oceans, climate change stands out. Our experience, particularly with Supertyphoon Haiyan (Yolanda) in 2013, confirms this. In the Philippines rising sea levels are three times the global average. At this rate, we will eventually lose 167,000 hectares of our coastline, more than twice the size of New York City. We are using the ridge-to-reef approach toward the sustainable management of our natural resources, while targeting the mining industry as the main culprit. We seek to reverse the adverse impacts of the alteration and destruction of marine habitats from landbased and coastal development. This is consistent with our obligations under the United Nation Convention on the Law of the Sea (Unclos). Unclos is the key to ensuring global and regional peace in the fair and sustainable use of the oceans. It represents a delicate balance of the
Did genocide destroy this village?
Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos Dennis D. Estopace
Online Editor Social Media Editor
Chairman of the Board & Ombudsman President VP-Finance VP Advertising Sales Advertising Sales Manager Group Circulation Manager
The ocean is the common heritage of humankind
Nicholas Kristof
new york times
S
OUTHEAST Bangladesh, near the Myanmar border—“Ethnic cleansing” and even “genocide” are antiseptic and abstract terms. What they mean in the flesh is a soldier grabbing a crying baby girl, named Suhaifa by the leg and flinging her into a bonfire. Or troops locking a 15-year-old girl in a hut and setting it on fire.
The children who survive are left haunted: Noor Kalima, 10, struggles in class in a makeshift refugee camp. Her mind drifts to her memory of seeing her father and little brother shot dead, her baby sister’s and infant brother’s throats cut, the machete coming down on her own head, her hut burning around her…and it’s difficult to focus on multiplication tables. “Sometimes I can’t concentrate on my class,” Noor explained. “I want to throw up.” In the past I’ve referred to Myanmar’s
atrocities against its Rohingya Muslim minority as “ethnic cleansing,” but increasingly there are indications that the carnage may amount to genocide. The United States Holocaust Memorial Museum, backed by a Myanmar-focused human-rights organization, called Fortify Rights, argues that there is “growing evidence of genocide,” and Yale scholars made a similar argument even before the latest spasms of violence. Romeo Dallaire, a legendary former United Nation general, describes it as “very deliberate genocide.” The UN
human rights chief, Zeid Ra’ad al-Hussein, told me, “It would not surprise me at all if a court in the future were to judge that acts of genocide had taken place.” You judge: Here’s what Noor and her mother, Dilbar Begum, say happened in their village, Tula Toli. First, the Myanmar army separated the women and girls from the men and boys. “Then they shot the men and boys,” Dilbar recalled. “I saw them kill my husband and son. I was screaming.” I delicately tried to probe whether Noor had seen the murders of her father and brother, who was just 4 years old. “I saw everything,” Noor said, biting her lip. In a rush of words, she added: “My father was the best man in the world. We were a good team.” She began to cry, and soon my interpreter was wiping away tears, too. And so was I. The Myanmar soldiers herded the women and girls into huts to be raped. Noor and Dilbar were taken into one hut, along with Noor’s 2-year-old sister, Rozia, and another brother, Muhammad Kashel, a baby still nursing. “They took my baby and cut his throat,” Dilbar said in a trembling voice, adding that the soldiers then cut Rozia’s
rights and obligations of all States Parties to what none of them can claim as exclusively its own for any use they choose. In this spirit, the Philippines upholds the primacy of international law as the only foundation of a rules-based and therefore enduring regional and international order. Might is useful to enforce right but it can never, ever, substitute for right. The Philippines supports the strengthening of capacity building, along with the transfer of marine technology, education and the sharing of traditional knowledge on oceans issues, including in the prevention of the smuggling of migrants and human trafficking by sea, and in fighting piracy. When God created heaven and earth, the oceans were there already covered in darkness; His breath hovering over the face of the waters. Then He said, “Let there be light.” The oceans, therefore, cannot be used for dark purposes. We reaffirm our support for the International Tribunal for the Law of the Sea, the Commission on the Limits of the Continental Shelf and the International Seabed Authority; and recognize no other authority but them. If we cherish this pale blue pearl as befits its value to the survival of humanity, a billion years from now mankind may stand on another planet and look up at the night sky. And there…there see the bright ball of flaming gas that was our sun, swallowing our first home, and say, “Because we took good care of it, that bright blue pearl took care of us long enough for us to reach a place of greater safety on another pale blue planet circling another sun.” Thank you.
throat, too. Shortly afterward, Noor remembers a machete blade smashing down repeatedly on her own head, her mother screaming in the background. Then she collapsed unconscious. Dilbar said the soldiers then yanked an earring from her ear— she pointed to her torn lobe—and assaulted her beside the bodies of her children: “One soldier held me down, and another raped me.” When they were finished, she said, the soldiers chopped her on the head with the machete—she has the same angry scars on her scalp as her daughter—and left her for dead while setting fire to the hut. The fire and smoke roused her, she said. She checked the bodies of her children and found that Noor was still breathing. Grabbing the girl, she ran into the woods. Dazed, they hiked for two days through the woods to get to the Bangladesh border. The global and US responses have been feeble, so Myanmar is getting away with murder and rape intended to change the country’s demography. The lesson that the world’s complacency sends to other countries is that, this is an ideal time to eradicate a vexing ethnic group.
See “Kristof,” A11
Opinion BusinessMirror
www.businessmirror.com.ph
Wednesday, December 20, 2017 A11
Asia’s prospects and world Squandering our demographic sweet spot ahead are bleak but bright? Edgardo J. Angara
Michael Makabenta Alunan
on the contrary
A
S year-end approaches, it’s time to look at our crystal ball on “predictions” on what lies ahead in the years to come, which are apparently bright and promising, yet plagued with bumps, threats and hazards, making prospects also bleak.
As there will be aplenty of yearend reports on the Philippines, let me focus instead on externalities, trends and developments in Asia and the world over. After all, we are increasingly linked with the world in an ever-decreasing little global village, making us vulnerable to all these developments, thus, the importance of not becoming parochial. n Global growth softening. Growth in developed countries or even China, which enjoyed doubledigit growth for two decades, are now facing historic slower growth and productivity, despite interest rates down to almost zero, when these are supposed to perk up investments. Asian Development Bank (ADB) President Takehiko Nakao noted that America and European countries are just inching with growth rates of only 1.0 percent to 1.5 percent with Japan at 0.6 percent. Subsequently, slumping economies of the Western world, more so since the 2008 global financial crisis, have affected global trade and exports of many developing countries, including the Philippines. n “Flying geese” model now passe. For many decades, many believed in Japanese scholar Kaname Akamatsu’s 1930s “Flying Geese” model of growth, whereby to succeed one just “followed the leader.” When England started the industrial revolution, Germany and the United States followed the industrialization path. Europe and socialist countries, led by the Soviet Union, also industrialized, followed by Japan, and later the newly industrializing countries of South Korea, Taiwan, Hongkong and Singapore. By 2000s South Africa, Mexico, Brazil, China, India, Malaysia, Thailand and Turkey became the emerging economies, with Indonesia and the Philippines tagging far behind. But American economist Prof. Jeffrey Sachs claims in an ADB forum that “the leader can no longer lead,” making allusions to America, which is no longer a good model to follow with its high growth rates decades back now stagnating dismally at about 1 percent. For Sachs, America now sucks as it is no longer a good model for “ecological reasons.” Having a car for every American and big houses for every family is no longer right as they result in traffic, wasteful energy, high carbon footprint, massive mining, poor urban-space management and resulting unhealthy diets and lifestyles that produce obesity, cancer and cardiovascular problems. Thus, if we still blindly follow America, we may end up like lemmings massively racing to the edge of a cliff only to plunge in mass suicides. n Sleeping giant now stands tall. Meanwhile, as America’s appeal declines, it is worth watching China’s phenomenal transformation. In 2000 Japan was larger than the combined economies of China, South Korea, India, Southeast Asia, Australia and New Zealand. By 2015 China is now as large as all these economies combined, Takashi Shiraishi of Japan External Trade Organization’s institute for Developing Economies says. A power shift has, indeed, taken place. Although the slumping global markets affected China’s exports and growth rates now down to about 6 percent, from double digits for two decades with economic zones like Guangdong and Xiamen even growing by 25 percent, Xi Jin Ping’s paradigm shift for a “win-win
development” strategy under his “Belt and Road” initiative is seen not only to bail out China, but provide development for all. Internally, China suffers from excess productive capacity like cement and steel. But, instead of exporting more finished goods like trucks and buses, it is building bus assembly plants all over like Nigeria, Africa and elsewhere, which enable developing countries to also industrialize. Ride on China’s explosion. China is exploding in projects with over 130 bilateral and regional transport agreements; 356 international road routes; over 4,200 direct flights connecting China with 43 countries; and 39 China-Europe freight train routes as of last summer alone. It is building six industrial development corridors radiating from China, namely: 1) China to CentralWestern Asia, which is extending through Iraq, Syria, Turkey, into Europe and Africa; 2) China to Western Europe to Hamburg, Rotterdam and Madrid; 3) Mongolia-China-Russia corridor involving 32 large projects; 4) China-Pakistan Economic Corridor, with China investing $46 billion and creating 700,000 new jobs in Pakistan alone; 5) Bangladesh-China-India-Myanmar corridor; 6) China-Indochina Peninsular corridor. Moreover, it is building railways and water systems in eastern and central Africa, reversing centuries of colonialism, poverty and ignorance. At the Beijing summit, 20 more agreements with 20 countries were signed. Also significant is the Kra Canal south of Thailand, connecting the Gulf of Thailand to the Indian Ocean, shortening travel by 1,200 kilometers, but affecting ships passing Singapore. It will create 3 million jobs. Another project is the 173-mile Grand Nicaragua Canal, involving $40 billion mostly in China investments. It’s wider, deeper and 3.5 times Panama Canal’s length. It is also tying up with Russia linking Siberia and Alaska at the Bering Straits, followed by projects all the way down to Canada, America’s National Water Alliance Project and South America. n “Trump card” needed. Apparently, China cannot do all of this alone without the United States’s involvement and the signs are encouraging with US President Donald J. Trump’s warm ties with China. This win-win development thrust and cooperation with China and Russia do not augur well for the neoconservative hawks representing the industrial-military complex, which wants perpetual Cold War geopolitics, with China and Russia and fueling little wars and revolutions all over. With America holding a “Trump card,” who is a hothead and accused for his Islamophobic, racial and misogynist remarks and threats on North Korea, the world is still teetering on bleak uncertainty, but because of Trump’s nature as a businessman, known for his book Art of the Deal, prospects are bright as he will make friends and do business with traditional enemies, regardless of adverse propaganda like Russiagate and unfounded Russian mingling in elections, believed machinations of hawkish conservatives out to destroy his friendly overtures with China and Russia. For the Philippines, let’s just play our cards well by focusing more on economics than politics. E-mail: mikealunan@yahoo.com.
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he Philippines improved its rankings for the World Talent Competitiveness Index compiled by the Institute for Management Development (IMD)—rising to 45th out of 63 countries this year, from 51st out of 61 in 2016. According to the report, this points to a jump equivalent of 10 spots.
The improvement is a good reason for some celebration, but the current ranking still puts us fourth among the five Asean members surveyed. It also does not indicate a significant break from the trends our rankings have exhibited since 2005, where we consistently placed in the bottom half of the survey.
For 2017 the Philippines rated very well in terms of work-force readiness (11th), which refers to the availability of skills and competencies in the talent pool. It also placed very highly in terms of labor-force growth (fourth), the availability of skilled workers (sixth) and language skills (13th).
We did not measure up very well for cost-of-living index (33rd), or the availability of a basket of certain goods and services, scoring 73.40 out of 100, where 100 refers to what is available in New York City. We were average in terms of attracting and retaining talent (24th), and the level of work-force motivation in companies (23rd). The Philippines performed poorly in remuneration in service professions (56th), the protection of personal and property rights (49th), quality of life (47th) and the effect of brain drain on the economy (40th). All these dampening factors are most likely explained by how poorly we invest in our human capital. We placed 60th in terms of total public expenditure on education, reaching only 2.7 percent of GDP. With 36 students for every primary-school teacher, and 27 for every high-school teacher,
The insurance regulators of Asean
Lawyer Dennis B. Funa is the current insurance commissioner. Funa was appointed by President Duterte as the new insurance commissioner in December 2016. E-mail: dennisfuna@yahoo.com.
suffers from the beating and from the emptiness left by the murder of Suhaifa, and she has trouble sleeping. “When I fall asleep, I look for my baby,” she said. “I wake up screaming.” It’s tempting to say: That’s terrible, but it’s not our problem. But Noor’s plight, like Anne Frank’s in the 1940s, should prick the global conscience, for one lesson of history is this: Crimes against humanity are an offense against all humanity and require a response from all of us. The latest slaughter began in August after a shadowy Rohingya rebel force attacked police and army posts, killing 12 members of the security forces. Myanmar’s army embarked on a scorchedearth counterinsurgency, and when soldiers couldn’t find rebels, they unleashed their fury on civilians. The brutality varied widely by area, and what happened in Noor’s village was worse than typical. Human Rights Watch says, based on satellite images, that some 345 villages were burned. No one knows exactly what happened to many Rohingya: I searched for people from Rohingya villages I had visited in Myanmar in 2014 and 2015 but couldn’t find them. Doctors Without Borders calculated that at least 9,000 Rohingya, including 1,000 small children, died after the army’s attacks, which were undertaken with a savagery that left hardened war correspondents shaken. These attacks involved the systematic use of rape to terrorize the Rohingya. One 14-year-old girl confided her deepest secret: Four soldiers had gangraped her. She had intended to keep the secret forever, but then she became pregnant and quietly sought medical help. An aid worker helped her get an abortion, but she still hasn’t told even her parents. She shared her story with me only because she is so grateful to the aid organization and it told her that I could be trusted. It’s impossible to know how many
women and girls have been raped, but doctors in the refugee camps report a surge in pregnancies as a result of rape, and I encountered two women who suffered fistulas caused by rape. The Rohingya who have reached Bangladesh live in vast, sprawling refugee encampments, where I interviewed them in their tents and shacks; aid organizations provide desperately needed food, water, toilets and medical care, but cannot offer hope. Bangladesh does not want the Rohingya and does not allow aid organizations to teach Bengali, the national language, or to offer an education beyond primary school. An organization called BRAC runs child centers where children are given paper and pens. Their drawings are wrenching: soldiers shooting guns, friends bleeding, huts burning. “That man being shot is Sayid Azam, my neighbor,” said Ismal, an 11-year-old orphan, explaining his drawing of a huge gun firing at a man. “I saw it. I was hiding behind a bush.” China has proposed a plan that would result in the return of the refugees to Myanmar, presumably to live stateless in concentration camps like the ones for Rohingya that I’ve previously reported on. But most are too terrified to contemplate returning. It would be an outrage to force refugees back. Consider Shafika Begum, a 15-yearold who may be the only survivor in her family. She said she saw soldiers shoot dead her father and four brothers; they then took her, her mother and her 11-year-old sister into a hut. The soldiers cut her sister’s throat in front of her, and she said that when she screamed, the soldiers clubbed her on the head and knocked her out. Flames and smoke brought her back to consciousness: The soldiers had locked the door of the hut and set it on fire. Her mother and sister were dead, and Shafika’s clothes were on fire, but she broke through a wall and fled.
Was she raped? “I was unconscious, so I don’t know what they did to me,” she said. But she added that someone had rearranged her clothes. Shafika walked for four days through the jungle to get to Bangladesh. Her back, left hand and both feet are burned, and she has no money to buy burn medicine. I was concerned that interviewing her might traumatize her again, but she was determined to speak. “I want to tell the whole world my story,” she said. “I want to tell what happens in Myanmar.” The three people whose stories I’ve focused on—Noor, the 10-year-old; Hasina, whose baby was thrown onto the fire; and Shafika, disfigured by burns— are all from the same village, Tula Toli. All these atrocities that I’ve described unfolded on a single dot of the map—and in every direction there are other villages with tragedies of their own. Are the stories they recount true? One thing I’ve learned over the decades (originally while covering China’s murder of Tiananmen democracy protesters in 1989) is that victims lie, as well as perpetrators. Outrage leads to exaggerations, to elevated death tolls, to rumors becoming eyewitness accounts. But the attack on Tula Toli has been well documented by human-rights organizations, including Amnesty International, Human Rights Watch and Fortify Rights, and it is substantiated by satellite photos showing the burned huts. In all, I spoke to seven people who said they were survivors from Tula Toli, and their stories meshed and crossconfirmed one another. There is no easy solution to possible genocide; there never is. But accountability helps, so there should be a major push to prosecute Myanmar military officials in the International Criminal Court. Judges can resolve whether these crimes against humanity also amount to genocide.
T
he Philippine insurance regulator is the only regulator within the Association of Southeast Asian Nations that carries the official title of “insurance commissioner.” We patterned our regulatory setup after the United States. The other nine Asean insurance regulators are called by various titles but none officially as insurance commissioner.
continued from A10
Aung San Suu Kyi, the Nobel Peace Prize winner, has become the apologist for these mass atrocities. Suu Kyi does not control the Myanmar army, but she has defended the military operation and mocked “a huge iceberg of misinformation.” Her Facebook page scoffed at a Rohingya woman’s report of sexual assault by soldiers as “fake rape.” Suu Kyi, if you’re reading this, I hope that for a moment you’ll open your heart and listen to the story of Hasina Begum, 21, and her 1-year-old daughter, Suhaifa. (Begum is a common honorific for women.) Myanmar soldiers held Hasina and other village women at gunpoint, she said, while the troops executed the men and boys, doused the bodies with gasoline and turned the corpses into a bonfire. Then the troops led the women and girls, five at a time, toward a hut. “I was trying to hide my baby under my scarf, but they saw her leg,” Hasina recalled, her voice brittle, her mouth trembling. “They grabbed my baby by the leg and threw her onto the fire.” Hasina said she collapsed on the ground, screaming. The impatient soldiers then began to club her—she showed me scars from the beating —and dragged her into a hut with her sister-inlaw, Asma Begum. The soldiers stripped the women naked and raped them, she said, and finally closed the door and set the hut on fire. As bits of the burning roof fell down on them, Hasina added, she and Asma broke a hole in the side of the hut and ran away naked. They rolled in mud to soothe their burns, and the next day they found a Rohingya house and begged for the man inside to throw out clothes so that they could cover themselves. A three-day hike took Hasina and Asma to Bangladesh. But Hasina still
In Singapore the executive director of the Insurance Department of the Monetary Authority of Singapore (MAS) is the insurance regulator. The post is now held by Ms. Ho Hern Shin. MAS is the central bank of Singapore. Singapore is a constitutional republic. In Thailand the secretary-general of the Office of Insurance Commission (OIC) is the insurance regulator. The OIC is a collegial body composed of seven members of the commission. It is under the supervision of the Ministry of Finance. The secretary-general is now Dr. Suthipon Thaveechaiyagarn. The government of Thailand is a parliamentary and a constitutional monarchy. Finally, in Vietnam the director general of the Insurance Supervisory Authority is the insurance regulator. It is now held by Mr. Phung Ngoc Khanh. It is under the Ministry of Finance. Vietnam is a Marxist-Leninist one-party socialist republic.
directors. In Cambodia the director general of the General Department of Financial Industry (GDFI) is the insurance regulator. It is now held by Dr. Vann Mey. The office is a department under the Ministry of Economy and Finance. Under the GDFI are four subdivisions, one of which is the Department of Insurance and Pension. The government of Cambodia is a unitary one-party parliament and a constitutional monarchy. In Indonesia the deputy commissioner of Non-Bank Financial Indus-
INSURANCE FORUM
Kristof. . .
E-mail: angara.ed@gmail.com, Facebook and Twitter: @edangara
try under the Indonesia Financial Services Authority (or the Otoritas Jasa Keuangan, OJK) is the insurance regulator. The present occupant is Mrs. Anggar B. Nuraini. The OJK is an autonomous agency designed to be free from any interference. It was established in 2011. The government of Indonesia is a presidential system. In the Lao PDR the deputy director general of the Department of StateOwned Enterprises Management and Development, and Insurance is the insurance regulator. The incumbent is Dr. Sonephet Inthavong. This is also under the Ministry of Finance. Lao PDR is a unitary one-party socialist republic. In Malaysia the governor of the Bank Negara Malaysia (BNM), which is the central bank of Malaysia, is the insurance regulator. The governor is Tan Sri Muhammad Ibrahim. The government of Malaysia is federal and a bicameral parliament. In Myanmar the deputy minister of the Ministry of Planning and Finance is the insurance regulator. He is Deputy Minister U Maung Maung Win. The government of Myanmar is a unitary parliamentary constitutional republic.
Dennis B. Funa
The insurance regulatory setup in the various Asean members is really disparate. Perhaps, it is reflective also of their respective types of government. In Brunei Darussalam, an absolute monarchy, the insurance regulator is the deputy managing director of the Autoriti Monetari Brunei Darussalam (AMBD), which is under the Ministry of Finance. Currently, that post is held by Hajah Rashidah Haji Sabtu. AMBD is the Central bank of Brunei Darussalam. AMBD was established on January 1, 2011. AMBD is run by a board of
we ranked 62nd and 59th, respectively, for pupil-teacher ratio. These findings place the Philippines at the bottom (63rd) in terms of the sub-index score for “investment and development,” which measures the “resources committed to cultivate homegrown talent.” The IMD’s World Talent Competitiveness Index 2017 is but another demonstration of how we fail to appreciate and, hence, squander the demographic sweet spot we are fortunate to be situated in. This report should make our leaders keenly aware of this once-ina-millennium gift and spur them to increase investments in human capital—mainly for education, health, training and housing—so that the country can reap huge demographic dividends.
2nd Front Page BusinessMirror
A12 Wednesday, December 20, 2017
PHL opts out of US aid-giving program P
By Elijah Felice E. Rosales
@alyasjah
RESIDENT Duterte has withdrawn Manila from the second compact of the Millennium Challenge Corp. (MCC), citing other priorities as reasons one of which is the rehabilitation of the wardevastated Marawi City, Lanao del Sur. Presidential Spokesman Harry L. Roque on Tuesday said the government has other programs to prioritize, and this does not include committing the country to the Millennium Challenge. “We have opted to withdraw from the second Millennium Challenge, and this is because…of the urgent priority of the [Duterte] administration to rebuild Marawi,” Roque said. “It was deemed that for the time being, we will withdraw our application for the second cycle, and we will focus instead on the rebuilding of Marawi.” The MCC was created by United States Congress in 2004 to deliver
ROQUE: “We have opted to withdraw from the second Millennium Challenge, and this is because of the urgent priority of the [Duterte] administration to rebuild Marawi. It was deemed that for the time being, we will withdraw our application for the second cycle, and we will focus instead on the rebuilding of Marawi.”
American foreign assistance by focusing on good policies, country ownership and results. Compacts
are multiyear agreements between the MCC and a country to fund specific programs targeted at reducing poverty and stimulating economic growth. Roque said that in spite of the withdrawal, Manila has invited Washington to assist in the reconstruction of the Islamic town. “We are confident that the [US] government fully understands the decision to reallocate our funding priority for this year, and that this will not in any way adversely impact our eligibility for another round of compact assistance in the future because it calls for counterpart financing, as well,” Roque said. The Palace official was quick to clarify the move was not politically motivated, nor was it influenced by the MCC Board’s decision last year to postpone its review of the country. He said it is just that the government has to throw in all its sweat and blood next year in rebuilding Marawi. According to Roque, the President made the decision to withdraw Manila’s application for the second compact of the MCC as
advised by his economic team and Foreign Affairs Secretary Alan Peter S. Cayetano. Under the f irst compact worth $434 million in 2010, the MCC f inanced the countr y’s K apit-bisig Laban sa K ah i r apa n Compre he n sive a nd Integrated Deliver y of Social Ser v ices, Secondar y National Roads Program, specifically a 222-kilometer road in Samar and the Revenue Administration Reform Project at the Bureau of Internal Revenue. The MCC Board deferred its decision on granting Manila its second compact last year, owing it to Duterte’s war on drugs. The country’s rating in the MCC dropped due to concerns on rule of law and civil liberties arising from reports of extrajudicial killings attributed to the brutal crackdown on illegal drugs. Socioeconomic Planning Secretary Ernesto M. Pernia has previously said the MCC’s decision to defer the Philippines is not a cause of concern considering the amount of investments other countries are willing to bring in to Manila.
Infra. . .
Presidential Spokesman Harry L. Roque Jr. said the most important provision of the TRAIN is that it will exempt workers with a gross annual income of P250,000 and below from paying personal-income tax (PIT). “Of course, the most important provision is that it will spare 99 percent of our [working] population from the payment of income taxes because those earning not more than P250,000 per annum will now be tax exempt,” he said in a news briefing. Minimum-wage earners, who receive an average of P12,000 monthly, will continue to be exempted from paying PIT under the TRAIN. It will also implement a simplified tax system for micro and small taxpayers at 8 percent on gross sales in replacement of income and percentage tax.
I
ssue the necessary permits and no restraining orders. These are the orders given by President Duterte to all concerned agencies—and even the courts and local government units (LGUs)—to hasten the entry of China Telecommunications Corp. as the country’s third telecommunications company player. In a letter to Information Acting Secretary Eliseo M. Rio Jr., the President directed the Department of Information and Communications Technology (DICT) and the National Telecommunications Commission (NTC) to hasten the processing of China Telecom’s papers. The Beijingbased telecom company was selected by China to challenge the duopoly of Globe Telecom Inc. and PLDT Inc. in the country. “I have instructed the DICT and the NTC to fast-track the entry of the third telecom player to foster competition in the market. I want this implemented during the first quarter of 2018,” Duterte said. He instructed the NTC to draft the terms of reference for the bidding of frequencies, and told all national and regional government agencies, including LGUs, to issue the required permits within seven days upon completion of requirements. The same process must be applied to incumbent telecom players Globe and PLDT. “If the permits are not issued within seven days, the permits are deemed approved,” he said. He also warned the courts not to intervene in the government’s efforts to bring in a third
By Ma. Stella F. Arnaldo
@akosistellaBM Special to the BusinessMirror
T
ASEAN MURAL Asean-ROK Graffiti Collaborative Painting is seen on a building wall in Bonifacio Global City, Taguig. The mural is a project of Bonifacio Art Foundation Inc., in partnership with the Korean Cultural Center. Several artists from different Asean Countries, some local artists and volunteers worked together on the mural in commemoration of the 25th Asean-ROK Cultural Exchange Year and also for the Asean’s 50th year anniversary. ALYSA SALEN
TRAIN to hasten rollout of big-ticket govt projects Continued from A1
Duterte wants China Telecoms to get needed permits by Q1 telecom carrier. “Do not issue any TROs [temporary restraining orders] or injunctions. This is a matter of national interest for the benefit of the public,” the President cautioned. According to Presidential Spokesman Harry L. Roque Jr., China Telecom will still have to find a domestic partner in compliance with the restrictions on foreign ownership. Under the law, foreign investors are allowed to own up to 40 percent of public utilities, including telco services. “They will have to be observed; and I think the scheme that they agreed upon is, while China Telecom will have 40 percent, there will be a consortium of Filipino companies that will own 60 percent,” Roque said. He added the DICT has vowed to be transparent in awarding the frequencies, as well as in the entry of China Telecom. On top of this, Roque said the government will look into security issues that might arise in allowing a foreign entity to operate a telecoms carrier. “Right now, all I can say is we’re beefing up. We’ve given priority to our cybersecurity and I’m sure there would be measures to protect us, to protect our privacy and our national security interests,” the Palace official said. In his bilateral meeting with Chinese Premier Li Keqiang in November, Duterte tendered to China the privilege to operate the third telecom carrier in the country. The offer was made to challenge the Globe-PLDT duopoly, which See “Duterte,” A2
D.O.T.’S‘BRING HOME A FRIEND’ CAMPAIGN LAUNCHED IN SEOUL
Continued from A1
Of the P616.7 billion, P268.18 billion will be channeled to energy/power projects. Infrastructure and public-private partnership projects cornered the second-big gest a mount at P127.658 billion. L o p e z s e e s t he s h a re of infrastructure to take up half of the forthcoming investments next year. As restrictions on foreign participation will be lifted in key sectors, such as retail trade, Lopez sees the share of investments from foreign sources to expand. “This year the interest from foreign investors was there but because of the Marawi conflict, they held off for a bit. Some pursued their investments, of course, but we felt the interest could be stronger. Now that the conflict is over, those that had plans before will come in,” he said. “There’ll be a bigger foreign equity inflow next year.”
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Finance Secretary Carlos G. Dominguez III said the Department of Finance’s preliminary computation indicates the government would be giving “almost P150 billion” back to the people in the form of tax relief under the TR AIN, since it provides for the slashing of PIT rates which will increase the take-home pay of employees. “I don’t think this ever happened before. Never in the past has the government given up revenues. We have here almost P150 billion, first time ever. First time ever we did a tax reform without anybody forcing us to do it. So I am saying that we are making history,” Dominguez said. The TRAIN provides for PIT exemptions for the first P250,000 of taxable income, along with other significant PIT cuts for other tax brackets, which also provides Filipino taxpayers with “much-needed
relief” after 20 years of no adjustment on the rates. “I think it’s a sign of maturity for our country. It is also the first of five packages that will once and for all start fixing the structural problems of the tax system that has become unfair, complex and inefficient,” he added. The National Economic and Development Authority said the CTRP will boost the country’s GDP by as much as 1.1 percent by 2022. In a statement, Socioeconomic Planning Secretary Ernesto M. Pernia said the CTRP will boost real GDP level by 0.5 to 1.1 percent by year 2022, which will help in attaining its medium-term growth targets. “The implementation of TRAIN is essential as it will increase the spending capacity of the average working Filipino, boost revenue-toGDP ratio, and fund government’s
infrastructure and human capital investment program,” Pernia said.
Higher taxes
The TRAIN will also impose excise tax on oil of up to P6 over the next three years: P1 in 2018, P2 in 2019 and P3 in 2020. On the other hand, essential petroleum products, such as diesel, kerosene and LPG, will be slapped with lower rates. Automobile excise tax is placed at 4 percent for vehicles up to P600,000; 10 percent for over P600,000 to P1 million; 20 percent for over P1 million to P4 million; and 50 percent for hybrid vehicles. No excise tax will be imposed on electric-powered cars. The TR AIN will also slap a P6per-liter tax on drinks containing caloric and noncaloric sweetener and a P12-per-liter tax on beverages w ith high-fr uctose corn syrup. See “TRAIN,” A2
HE Department of Tourism (DOT) last Sunday officially launched the “Bring Home A Friend”(BHAF) program in Seoul, South Korea. About 250 overseas Filipino workers (OFWs) gathered at the Lotte Hotel for the event, and were encouraged by Tourism Secretary Wanda Corazon T. Teo to actively take part in all tourism promotions, and specifically become BHAF “sponsors” to create greater interest in and encourage more foreigners to travel to the Philippines. “Umuwi na kayo [come home] and please bring your Korean friends with you,” she said. The DOT is targeting to attract at least 500,000 more foreign visitors with the launch of the revived BHAF campaign, a program that was launched in 1994 by former Tourism Secretary Mina T. Gabor. Under the program, any Filipino, residing in the Philippines or overseas, stands to win an array of prizes under the program that will run for six months, from October 15, 2017, up to April 15, 2018. Among the prizes are a condominium unit from Megaworld Corp., a brand-new Toyota Vios, and a P200,000 gift certificate from Duty Free Philippines Corp. Their “friends,” or foreign guests, can win round-trip international flight tickets and tour packages to Palawan, Cebu and Davao. To join the program, the sponsor should register at the BHAF home page, accessible via DOT’s web site http://tourism.gov.ph Teo also thanked South Korea for continuing to be the Philippines’s top source market for tourists. “This campaign is our way of saying to the growing South Korean tourist market—now counting to over 1.3 million—that our country will always be their second home,” the DOT chief said. Also present during the event were Undersecretary for Public Affairs, Communications and Special Projects Katherine de Castro, Philippine Ambassador to South Korea Raul Hernandez, Tourism Attaché Maria Corazon Jorda-Apo, travel and tour executives, representatives from the South Korean government and South
Korean journalists. Most South Koreans visit the beach destinations of the Philippines, such as Cebu and Boracay, and also come here to learn English as a second language. “Needless to say, we have all the reasons to be proud hosts. In fact, world leading travel magazines have consistently named our islands—Boracay, Palawan and Cebu—among the world’s most beautiful islands,” said De Castro, for her part. Journalist Seong Heiu-pyeon said he already asked his Filipino friends to register him as a BHAF invitee. “A lot of Koreans are traveling to the Philippines and other than the country’s beautiful beaches, I see this as an opportunity to establish a relationship between Korea and the Philippines. See you Philippines, I will definitely book my flight now,” the DOT quoted him as saying. Data from the Department of Foreign Affairs show 9.1 million overseas Filipinos, of which, more than 3 million reside in the United States, while more than 2 million are based in the Middle East. Other countries with large numbers of Filipinos are Malaysia, Hong Kong, Japan, China, Italy and Australia. The Commission on Filipinos Overseas estimated the number of Filipinos in South Korea at 70,000 in 2007, of which 6,000 held permanent residency, while some 15,000 were undocumented. Documented OFWs in South Korea are around 35,000, most of whom work in factories, according to more recent government estimates. South Korea continues to be the top source of visitors in the Philippines, however, its numbers of late indicate some sluggishness. From January to October of 2017, some 1.33 million South Koreans visited the Philippines, up 10.63 percent from the same period in 2016. The market accounted for 24.33 percent of total arrivals for the 10-month period in 2017. The DOT earlier said, the launch of the BHAF program was timed for the Christmas season, which in the Philippines usually lasts from October until January. “We would like to close the year strongly for the tourism industry in terms of visitor arrivals and carry the momentum into the coming year,” Teo earlier said.