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Monday, February 6, 2017 Vol. 12 No. 117

Higher oil prices to raise February electricity rates

By Lenie Lectura

@llectura

HE Manila Electric Co. (Meralco) said it is expecting an increase in generation charge, a major component of an electricity bill, this month due to higher crude-oil prices.

“There will likely be an increase in the February generation charge,” Meralco Utility Economics Head Lawrence S. Fernandez said in a text message. Actual figures have yet to be finalized by the utility firm. An announcement within the week will be made. “We

are still gathering data from suppliers,” he added. Aside from higher crude-oil prices, Fernandez said expensive fuel being used by the gas plants, as well as the normalization of capacity fees of the Pagbilao and Ilijan power plants,

would cause the upward adjustment in generation charge. “We expect the generation charge to normalize from the reduction in January. There was a reduction then in the capacity fees of Pagbilao and Ilijan due to the annual reconciliation of outage allowances. This reduction will no longer be present in February,” he added. Generation charge last December stood at P3.70 per kilowatt hour (kWh), See “Oil prices,” A2

BMReports

Govt banks on free education to get an ‘A’ in easing poverty

business news source of the year

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PRA highlights PPPs and G2G for Legacy Islands on Water

₧3.70 per kWh The generation charge last December

2016 ejap JOURNALISM awards

PPP Lead Alberto C. Agra

n February 3 the Philippine Reclamation Authority (PRA) marked its 40th founding year with the theme “Grand life begins at 40”. In its 77-day accomplishment report, the new PRA leadership, headed by this columnist, as chairman of the Board, and the General Manager/CEO lawyer Janilo E. Rubiato, highlighted public-private partnerships (PPPs) and government-to-government collaboration (G2GC). These arrangements are aimed at building Legacy Islands on Water (LIoWs). Since November 16 last year, the PRA has inked three memorandums of understanding with the city of Manila for the 79-hectare port facility of the Manila Harbour Centre, city of Bacoor and municipality of Minglanilla, Cebu; two expressions of collaboration with province of Aklan and city of Puerto Princesa for the implementation of infrastructure development projects through reclamation; and one expression of partnership with the Philippine Economic Zone Authority, to explore opportunities for cooperation in pursuing land-reclamation projects for possible establishment of regional economic zones. Continued on A15

DENR CHIEF INSISTS ECONOMY WOULD GROW SANS MINING By Jonathan L. Mayuga @jonlmayuga

nvironment Secretary Regina Paz L. Lopez said the Philippine economy would flourish even without mining, allaying fears that the closure of 23 operating mines would cause job losses that could affect 1.2 million people and billions of tax losses to both the national and local governments.

235,000

The jobs that the mining industry has created in 2014, according to a government report

In this photo, students attend a flag raising on the first day of school this year. They are just few aspiring for a free education when they reach college, which hangs on a balance, as Senate Bill 198, which seeks to provide for a full tuition subsidy for all current and future enrollees in state universities and colleges, remains being debated by stakeholders. NONIE REYES By Rea Cu

@ReaCuBM

Part One

ENATE Bill (SB) 198, or the Free Higher Education bill, has been allotted an additional budget of P8.3 billion, which will enable for tuition-free state universities and colleges (SUCs) in the country.

According to the bill ’s author, Sen. Sherwin T. Gatchalian, the country’s good macroeconomic fundamentals, its strong performance and growth, as well as improvements made in tax administration, will enable the government to provide subsidies to fund free education for public schools.

PESO exchange rates n US 49.7830

In earlier reports, Gatchalian pointed out the bill only proposes a budget that is less than 1 percent of the amount the government has allocated for its 2017 spending. Our proposed budget in making SUCs tuition-free is only 0.35 percent of the P3-trillion national appropriations for next year, according

to Gatchalian. He claims SB 198 will benefit around 1.3 million students enrolled in SUCs. Under the 2017 General Appropriations Act (GAA), the Department of Education (DepEd) was allotted a budget of P544.1 billion. This saw an increase of 32 percent from the 2016

Sought for reaction to news stories saying the closure order would affect millions of jobs, Lopez said reports that 1.2 million people would be affected by the closure order are incredible. A staunch environmental advocate, Lopez said in 2014 the mining industry employs only around 235,000 people. Continued on A3 There are 41 operating mines in the country, she added. “So where are they getting this number [1.2 million]?” Meanwhile, the Philippine Mine Safety and Environment Association (PMSEA) issued a statement affirming its commitment for responsible mining. However, PMSEA, through its President Louie R. Sarmiento, said it appears that full details of the results of the mining audit has yet to be furnished to the concerned companies. See “DENR,” A2

Continued on A2

n japan 0.4416 n UK 62.4229 n HK 6.4157 n CHINA 7.2352 n singapore 35.2921 n australia 38.1288 n EU 53.5914 n SAUDI arabia 13.2787

Source: BSP (3 February 2017 )

A2 Monday, February 6, 2017

BMReports BusinessMirror

Govt banks on free education to get an ‘A’ in easing poverty Continued from A1

GAA of P411.9 billion. While the Commission on Higher Education (CHEd) where the funding for SB 198 will come from, has been allotted P18.7 billion in 2017 from P5.6 billion in 2016, P8.3 billion is earmarked for the freetuition tack. SUCs were given a budget of P58.7 billion this year, which is up by 24 percent from the P47.4 billion in 2016. The amount is expected to help fund scholarships and capital outlays.

Exodus

WHILE SB 198 has yet to pass in the Senate, the approval of an additional P8.3 billion for the CHEd was already agreed upon by lawmakers under the Senate version of the 2017 GAA. The approval pushed up the CHED budget to P18.7 billion. Special provisions for the additional

DENR. . .

Continued from A1

“T he c losures and suspensions, if affirmed, will have farreaching effect, especially in mining communities that play host to these mines—employees and their dependents, contractors and mine-dependent small businesses will be the biggest losers,” Sarmiento said. “In the spirit of transparency and due process, the PMSEA exhorted the DENR to release the results of the mining audit to clear any doubts and air of suspicions. As

funds will be created under the Higher Education Support Fund (HESF), which is to be issued by the CHED and the Department of Budget Management (DBM) after consultations with SUCs. In earlier reports, representatives from the CHEd expressed reservations with regard to SB 198 explaining that free education in public schools will harm private schools since students may migrate to studying in the former institutions since it is free. According to the CHEd, the tuition-free policy will likely result to a “massive exodus” of students from private higher-education institutions (HEIs) to SUCs, which will aggravate the system more since it is gearing up for the K to 12 transition. CHED Executive Director Julito Vitriolo also earlier stressed that the Philippine Constitution only provides for free elementary and secondary education. But Gatchalian has challenged

critics of the bill to present factual data to defend their opposition to the measure. He urged representatives of HEIs to provide data in support of claims that the free-education policy in a mass migration.

HOUSE Bill (HB) 5909, the counterpart of SB 198 in the Lower House, is being eyed to be passed by legislators this month in line with the start of the program to offer free education to undergraduate students in SUCs in June this year. Funds to help support the measure will be sourced from the implementation of the Comprehensive Tax Reform Program (CTRP) presented by the Department of Finance (DOF). According to Finance Secretary Carlos G. Dominguez III, the passage of the CTRP in its entirety will enable the government to build more classrooms and hire more teachers over the next five years.

Package One of the CTRP was submitted to Congress in September last year. The package aims to lower personal income-tax (PIT) rates to make it at par with rates in the region, expanding the value-added ax (VAT) base by limiting exemptions to necessities, such as raw food, education and health care, while increasing excise taxes on oil and automobiles. According to Dominguez, the congressional approval of the taxreform plan will enable the government to achieve 100-percent enrollment and completion rates, build 80,066 more classrooms and hire 157,412 more teachers between 2017 and 2020. The tax reform plan has an end in view of attaining the ideal teacher-to-student ratio and classroom-to-student ratio under more conducive learning environments for the youth. “Without improving on our revenues, many of our children will

continue walking to get to school and our classrooms will continue to be packed beyond capacity,” Dominguez said. “The poorest Filipinos will continue to have little or no access to health services. Our farmers will be unable to raise their productivity and, thus, remain poor.” The finance chief further pointed out that if only the lowering of the tax rates will be approved sans the offsetting measures, funds to support the infrastructure buildup will not be present. Thus, he said, infrastructure will not improve. The latter, he added, will result to children in the rural areas still walking to miles to go to school. Classrooms will remain packed beyond its capacity. “If we fail to pass the revenue enhancement measures, we will lose the growth momentum that took us years to build,” he said. “We will face the spectre of large budget deficits and move closer to a debt crisis.” To be continued

always, as a partner organization, the PMSEA is offering its expertise to the DENR,” Sarmiento said. Lopez, however, is not keen on releasing the findings and recommendations of the 15 audit teams, saying she has no obligation to do so, unless President Duterte asks her to do it. Lopez said the mine audit was meticulously done. She said the closure of the listed mines would be for the greater good, as it will prevent destruction caused by mining and protect the community’s environment and natural resources. Lopez was reacting to state-

ments issued by the Chambers of Mines of the Philippines (COMP) about the potential adverse impact of the closure order to jobs and livelihood once this is enforced. COMP C h a i r m a n A r tem io Disini said 1.2 million people, which include employees and their families, would be affected by the closure order. Representing mining industry’s big players, COMP will appeal their case to Duterte as they called on the Mining Industr y Coord inat ing Counci l (MICC) to convene and tackle the closure order. On Friday Finance Secretary

Carlos G. Dominguez III said an emergency employment program is needed to absorb workers who will lose their jobs. He also expressed concern over the impact of the closure order to local government units that heavily rely on taxes from mining. Lopez told the BusinessMirror that, if done properly, area development would allow the local economy to flourish even without mining. She said ecotourism, for example, has the potential to generate more jobs and more livelihood for the people than mining. “Mining is not labor intensive. It is capital intensive. In 2014

there was a government report that mining has created 235,000 jobs all over the country, while tourism has generated 4.7 million,” she added. She said the benefits of mining is not enough to allow the majority of the people in the community to suffer while mining companies rake in huge profits from the exploitation of the community’s natural resources. Lopez said that w ithin 18 months, area development will allow communities to earn from ecotourism and social enterprises through agro-forestry and massive tree-planting activities.

Reforms

www.businessmirror.com.ph

GOP. . .

Continued from A16

“Now, what used to be a wish list of the oil and coal and gas industry has become the to-do list for Congress and the White House.” For Republicans, these first moves are the easy part, made possible by a law that gives Congress the power to reverse regulations within 60 legislative days with a simple majority vote in the House and Senate. Other Republican efforts to exploit this 20-year-old law— which, until this week, had been used only once to nullify a new rule—were thwarted five times with vetoes by President Barack Obama since 2015. Once the 60-day window expires, Republicans will have a harder time reversing Obama’s regulations, but will still have tools at their disposal, including cutting financing for the enforcement of rules, issuing new rules that are weaker, or negotiating with Democrats to pass new legislation. They have bold ambitions, including rescinding a rule enacted by the Obama administration that could close dozens of coalburning power plants, and another that would extend overtime pay eligibility to an estimated 4 million Americans. At a private meeting on Thursday hosted by the National Association of Manufacturers, a trade group, a senior White House adviser provided a plan on how the administration would handle efforts to curtail environmental regulations beyond the initial rush under way to nullify recently adopted rules, said one energy industry executive, who participated in the meeting and spoke on the condition of anonymity because details were confidential. Industry advocates and their allies in Congress said the longawaited moves toward deregulation was good for consumers and the economy, as they simply wanted to eliminate measures that they believed cost jobs and drove up prices. Among the regulations being targeted: the methane rule, an Interior Department measure meant to reduce flaring, when gas leaking from wells is burned off like a giant blowtorch. New York Times News Service

Oil prices. . . Continued from A1

P0.22 per kWh lower compared to January 2016’s P3.92 per kWh. This was attributed to the P0.59per-kWh reduction in the cost of power supplied by PSA (power supply agreement) plants caused by the lower capacity charges of Pagbilao and Ilijan. The reduction in capacity fees is due to the annual reconciliation of outage allowances that is done at the end of each year under the contracts approved by the Energy Regulatory Commission (ERC). Fernandez said the capacity fees from these suppliers normalized in February. Another reason behind the anticipated hike in generation charge is the shift to alternative fuel by the gas plants that are affected by the 20-day shutdown of the Malampaya gas facility. The gas facility fuels three gas plants: Santa Rita (1,000 MW), San Lorenzo (500 MW) and Ilijan (1,200 MW). These plants use alternative fuel to operate and generate electricity during the maintenance period, which started on January 28 and will last until February 16. However, this is more expensive than natural gas. Natural gas as fuel costs only around P4 per kWh, while replacement fuel, such as diesel, costs around P6-P8 per kWh. Thus, a rate hike is forthcoming. A Department of Energy official earlier said a rate hike could not be avoided. “It’s an issue of a change of fuel from a cheaper one to a more expensive one,” Energy Undersecretary William Felix Fuentebella said.

The Nation BusinessMirror

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Pineda, Arroyo open hygiene facilities for Aetas

PINEDA

ARROYO

By Joel P. Mapiles Correspondent

ORAC, Pampanga— Gov. Lilia Pineda and former President and now Lakas-Kampi-CMD Rep. Gloria Macapagal-Arroyo of Pampanga led the inauguration and blessing of the deep-well pump and health and hygiene facilities in the Aeta upland community of Sitio Pidpid, Sapang Uwak, this town late last week. The P175,000 facilities were the result of a joint project between Holy Angel University (HAU) and Kkottongnae University (KU) in Korea under the auspices of the Academy Partnership Program of the Korea International Cooperation Agency (Koica), an international overseas development agency under the Ministry of Foreign Affairs of Korea. KU Dean of Planning and Director of Catholic Global Education Eun-MI Yang, said that aside from undertaking research activities, the project also aims to monitor the health and hygiene levels, as well as determine needs of the Aeta community in Sitio Pidpid and create and implement a healtheducation program for them. Pineda expressed her gratitude to Eun-Mi Yang, Roberto Tantingco, vice president for student services and affairs of HAU, and other HAU officials for the project that will benefit some 75 Aeta families or at least 300 individuals living in the said sitio. She said the provincial government acknowledges the initiatives of HAU and KU in advocating the cause of the Aeta community in Sitio Pidpid. Pineda also disclosed that the provincial government would assist in the project of the partner schools to cater the needed social services of the Aetas in the said community. “It’s my first time to visit this community. From now on, the provincial government will help our Korean partners to provide the needs of the Aetas in Sitio Pidpid,” the governor said. During the event, former Arroyo announced that the land titles of Aetas in this town are already available at the National Commission for Indigenous People. The former president added that she filed a bill to amend the Indigenous Peoples Rights Act to give tribesmen the right to subdivide the mother title based on what is appropriate and convenient for them.

MMDA ready for transport strike By Claudeth Mocon-Ciriaco | Correspondent

HE Metropolitan Manila Development Authority (MMDA) on Sunday said it is ready for Monday’s protest action by a group of jeepney drivers and operators against the reported phaseout of old passenger jeepneys.

MMDA acting Chairman Tim Orbos said a total of 4,800 soldiers, policemen and nonuniformed personnel from the Department of Transportation (DOTr), Land Transportation Franchising and Regulatory Board, the Coast Guard, the Department of Public Works and Highways (DPWH), Office for Transportation Security and the MMDA will be deployed to maintain peace and order, as well as ferry stranded commuters during the strike. Orbos said the agency has set contingency measures in place, including the dispatch of 100 private buses, 85 government vehicles, 50 motorcycles and two vessels to ferry stranded passengers in case the strike succeeds. There will be free rides on the government buses and trucks. The private buses, however, will collect minimal fares. Orbos said the government will

provide all the needed services and manpower to make sure that the commuting public will not be inconvenienced by the protest action. Meanwhile, the Alliance of Concerned Transport Organizations (Acto) said it will not participate in the planned transport strike. Efren A. de Luna, Acto chairman and national president, said Transportation Secretary Arthur P. Tugade assured his group in a dialogue on December 21, 2016, that there will be no phaseout of old jeepneys. “Nilinaw ni Secretary Tugade sa naganap na dialogue na dinaluhan din ng ibang mataas na opisyal ng DOTr na walang magaganap na phaseout. Imbes, ito ay modernization at ito ay gradual o unti-unting palitan. Ang hindi na kumikita dahil sa kalumaan ay papalitan ng bagong unit at kung maganda naman ang body ay makina na lamang ang papalitan na walang ilalabas na pera ang operator,” de

Luna said in a statement. Likewise, George San Mateo of Pagkakaisa ng mga Samahan ng Tsuper at Opereytor Nationwide said the group will not also participate in the said protest action because its leaders and members are holding a national council until February 7. However, San Mateo said, his

group will picket the LTFRB office in Quezon city or DOTr in Mandaluyong City on Monday. He said the group is also planing to conduct a protest action in the coming days. “Meanwhile, we symphatize po sa magsasagawa ng tigil pasada sa Lunes. Nagagalak kami na dumarami and lumalaban sa jeepney phaseout,” San Mateo said.

Earlier, the transport group Stop and Go Coalition said about 74,000 jeeps and thousands of UV Express vehicles will participate in the nationwide protest, which will be held in Metro Manila and nearby provinces on February 6. The strike is in protest against the government’s order calling for the phaseout of dilapidated jeepneys.

HRW: UN must lead probe into Philippines’s drug war Malacañang, Congress leaders mull By Marvyn N. Benaning Correspondent

HE New York-based Human Rights Watch (HRW) has urged the United Nations to lead an independent international investigation into the deaths of more than 7,000 people in the course of President Duterte’s “war on drugs”. HRW pleaded with new UN Secretary-General Antonio Guterrez to take the inquiry seriously since not a single police officer or a member of a vigilante group encouraged by Duterte to eliminate drug users and drug pushers has been arrested or indicted since the new President took power at noon on June 30, 2016. The group, which has been at loggerheads with Duterte since he was mayor of Davao City for more than two decades, said despite the announced “pause” in the campaign by National Police chief Director General Ronald M. dela Rosa, for “internal cleansing” did not mention anything about the summary executions perpetrated by his underlings. Worse, the pause became the only option for dela Rosa and Duterte following the confession of some policemen that abducted South Korean businessman Jee Ick Joo was killed by a police executioner on the same day he was snatched on October 2016 and right at the National Police general headquarters in Camp Rafael Crame in Quezon City, about 100

meters from the official residence of dela Rosa. The murder raised a howl in the large Korean community in the Philippines and in both South Korea and North Korea as the businessman was the subject of an arrest warrant for purportedly being the deputy of a Chinese drug lord. Phelim Kine, Duterte’s nemesis and HRW deputy Asia director, also scolded Duterte for not apologizing for the hundreds of innocent minors, elderly men and women and even pregnant women who were killed in the course of his antidrug war, with the President brushing their demise as “collateral damage”. “Since July 1, 2016, more than 7,000 Filipinos have been killed in Duterte’s antidrug campaign. However, not a single police officer is known to have been prosecuted for extrajudicial executions or related crimes. Dela Rosa made clear that the suspension of police operations is temporary and that investigations are to purge police ranks of personnel implicated in the illegal-drugs trade, not provide accountability for unlawful killings. Duterte said in his January 29 overnight news conference that the ‘drug war’ will continue ‘to the last day of my term,’ indicating that the abuses will continue indefinitely,” HRW said. “Suspending police antidrug operations could reduce the kill-

ings, but they won’t stop without a meaningful investigation into the 7,000 deaths already reported,” Kine said. “The Philippine police won’t seriously investigate themselves, so the UN should take the lead in conducting an investigation.” Policemen have killed 2,551 suspected drug users and dealers in the past seven months and said law enforcers had no other recourse but to shoot since the suspects “resisted arrest and shot at police officers.” However, the National Police has not provided any piece of evidence to prove that the police acted in self-defense. “The National Police has failed to investigate or prosecute any personnel responsible for those deaths, despite compelling evidence that some police units are summarily gunning down suspects. Dela Rosa’s announcement also makes no mention of an additional 3,603 killings by ‘unidentified gunmen’ since July 1, despite mounting allegations that ‘death squads’ composed of police personnel operating in civilian clothes, are committing some and, perhaps, many of those killings,” Kine argued. “The abduction and killing in October of Jee Ick Joo, allegedly by antidrug police officers at National Police headquarters in Quezon City, suggests that police officers are exploiting the ‘drug war’ for corrupt personal gain,” he added.

BuCor starts investigation on killing of whistle-blower

UREAU of Corrections (BuCor) Director Benjamin de los Santos on Sunday ordered the creation of an investigation team to probe the killing of a security officer of the Bureau Davao Penal Colony (Dapecol) on Saturday morning in Carmen, Davao del Norte. The Davao del Norte police command identified the victim as Kabunsuan Makilala, who was shot dead by gunmen who were riding in tandem on a motorcycle. “We will let no stone unturned in this senseless killing. I have directed the officer in charge of Dapecol to create a special investigation team to conduct thorough investigation

Editor: Dionisio L. Pelayo • Monday, February 6, 2017 A3

and closely coordinate with National Bureau Investigation [NBI] and the National Police,” de los Santos said in a statement. “We condole with the bereaved family of PG3 Bong Makilala and will provide assistance in their hour of grief,” he added. De los Santos also instructed the bureau’s deputy director for security and operations, Rene Orbe, to supervise the Dapecol special investigation team in coordination with the NBI and the National Police. Orbe was scheduled to arrive at Dapecol on Sunday to immediately start the investigation of the death of Makilala.

Senior Supt. Ferdinand Sifuentes, Deval del Norte police commander, reported that Makilala was shot by two unidentified gunmen while he was inside a bus. Sifuentes said based on their investigation, Makilala was about to go home when he was followed by the assailants from the Dapecol premises in the town of Braulio E. Dujali, Davao del Norte. The body of the victim is now at the Carmen Funeral Homes and will be taken to his hometown in Tacurong, North Cotabato, after the autopsy. It can be recalled that Makilala, a prison guard, accused then-

BuCor Director Gaudencio Pangilinan of v iolating Republic Act 9184, or the Government Procurement Act, of authorizing the transfer of inmates, cutting historical trees and appointing BuCor A ssistant Director for Operations Romeo Fajardo, all of which were reportedly not within Pangilinan’s authority and mandate. Makilala was a former assistant head of the BuCor’s bids and awards committee. Based on reports, all the accusations were denied by Pangilinan. Makilala was supported by anticorruption crusader Sandra Cam. PNA

decision on Charter-change mode By Butch Fernandez @butchfBM

ALACE and Congress leaders are looking to firm up a decision on the preferred mode for amending the Constitution by mid-year yet, Senate President Pro Tempore Franklin M. Drilon said. Drilon, however, said Congress could not fast-track approval of the enabling law for Charter changes before adjournment of sessions next month (March 17), because lawmakers still need to conduct more public hearings, before a committee report could be finally submitted for plenary consideration. He cited time constraints when asked if the committee on constitutional amendments, which he chairs, would be ready with its report by March. “Mahirap,” Drilon said. “Siguro by June 2017, because we will have another hearing in mid-February and two or more hearings out of town, tentatively.” But he confirmed that during the recent Legislative-Executive Development Advisory Council meeting at Malacañang, the lawmakers conveyed to the Palace Congress leaders’ timetable for reaching a decision on the Charterchange issue. “We estimate that by the third quarter of this year we should be able to decide,” Drilon said. “In other words, by the time that we open the Second Regular Session of the 17th Congress we should have that laid to rest.” At the same time, Drilon reported that Malacañang will submit to the Congress a separate list of Palace priority bills. “The Executive branch will also propose its own list,” Drilon said. He added that the priority list is likely to include “the income-tax reform, emergency power to resolve the traffic, the free irrigation services, salary standardization, free Internet access, expanded absentee voting, the Philippine Passport Act amendments and national identification system bills.”

DRILON: “We estimate that by the third quarter of this year we should be able to decide.”

“We also want to strengthen the rule of law and a working justice system through the indexation of the Revised Penal Code, the Government Procurement and Reform Act, the amendments to the Corporation Code, as well as the endo bill, or the measure banning the practice of cutting short the services of a worker just to avoid employing him on a permanent basis. Those are some of the items that we have included in our legislative agenda,” the senator said. Drilon reported that “ both houses of Congress have submitted this common list to the Executive and the Executive will look at this, and they will have their own list.” “In the next 60 days, we should come up with the agenda, which we will work on for 17th Congress. This is without prejudice to other bills which each senator may propose,” he added. Drilon disclosed that Palace officials and Congress leaders also agreed to closely monitor the progress of the bills. “There will be monitoring. That is why, upon my suggestion, we will meet every quarter,” Drilon said. “But in between, there should be an Executive committee that will monitor the developments in each item as we go along.” In an earlier interview, Drilon indicated Palace officials and Congress leaders also have yet to agree on the mode of amending the Constitution—through Congress as a constituent assembly or by elected delegates to a constitutional convention—to lift existing restriction on foreign ownership of business in the country.

Economy

A4 Monday, February 6, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

news@businessmirror.com.ph

PHL remains attractive to Australian investors–PIDS

By Cai U. Ordinario

@cuo_bm

OW labor costs and high quality of the labor force will continue to make the country an attractive destination for Australian investments, according to the Philippine Institute for Development Studies (PIDS).

In a policy note, PIDS visiting research fellow Peter K. Ross and entrepreneur Mike O’Hagan said Australian firms can provide opportunities for the local businessprocess outsourcing (BPO) market. Small and medium enterprises (SMEs) from Australia can be a potential market for micro-offshoring services offered by Philippinebased BPO firms. “The extent and competitive nature of the Australian SME sector also suggest that the growth of Australian SME clients is likely to continue. This provides entrepreneurial opportunities for local Filipino SMEs looking to enter and tap this market,” they added. Advantages linked to the Philippine BPO sector is that it is one of top BPO destinations worldwide and it has a well-educated work force increasing 600,000 tertiary graduates, including 3,000 public accountants yearly. The country’s location also favors Australian firms because there is only a two-hour difference to the Australian Eastern Standard time. The BPO companies in the Philippines also enjoy competitive labor rates compared to Australian salaries. Data obtained by the authors from Payscale, labor rates in 2016 for the bottom 30 percent in Australia was at P1.38 million, while the top 10 percent receive P2.05 million a year. This results in a median annual pay of P1.58 million in Australia.

In the Philippines the bottom 10 percent earn P103,630 and the top 10 percent earn P308,963 a year. This results in a median annual salary of P192,241. The authors said that, while BPO rates are confidential and vary according to client requirements and employee experience, the full cost of an administrative or customerservice worker would be around A$15,000 to A$20,000 per year, less than half of the Australian salary for an equivalent job. “Median labor rates in the Philippines for call-center type of work are around eight times lower than in Australia,” the authors said. “Taking these overhead and other labor expenses into account, a widely quoted statistic across many Filipino BPO sites suggests that Australian firms can secure up to 70-percent labor cost savings,” they added. Despite these advantages, the Philippine BPO sector is plagued by challenges, such as government red tape, conflicting government requirements and poor infrastructure and traffic congestion. The outsourcing sector in the country is also faced with expensive, unreliable utilities, as well as claims that adjudication of labor cases is biased. The authors said the extensive labor law provisions make it difficult to fire Filipino workers. This places more pressure on firms to carefully document all em-

MORAL GUARDIAN

Former legislator and now MTRCB Chairman Maria Rachel J. Arenas (right) recently took her oath before Rep. Rose Mari J. Arenas of the Third District of Pangasinan. The simple ceremony was witnessed by former Court of Appeals Justice Manuel Lazaro.

ployee activities in case they need to lay off a worker. “Some respondents felt the adjudication of labor cases before the National Labor Relations Commission tends to be biased in

favor of employees. Nonetheless, most respondents advised that the labor law could be navigated, but firms needed to be aware of and abide by its provisions,” the authors said.

This policy note is based on a research conducted in 2016 on the BPO sector in Metro Manila and Clark Freeport Zone in Angeles City, Pampanga. Data were obtained through in-

terviews and discussions with BPO managers, Australian SME clients and other relevant persons. It is further supported by the long-term industry experience and knowledge of one of the authors.

Status quo sought on zero-VAT exemption for exporters Think tank urges govt to focus on Naia upgrade T By Lorenz S. Marasigan @lorenzmarasigan

HILE it is better to build a new international gateway than to privately develop the “spaceconstrained” Ninoy Aquino International Airport (Naia), an aviation think tank believes the old airport may still be improved, even as Filipinos wait for the completion of a new facility a decade or so from now. In a recently published report, the Center for Asia Pacific Aviation (Capa) said the Philippine government has to make key airport decisions in 2017, as spending billions of pesos to develop a facility with no room for expansion would only be wasteful. “A new airport for Manila is required, but the reality is it could take a decade before the new airport is opened. In the meantime, the government has an opportunity to improve service levels further and increase capacity,” the research agency said. It recommended the government to adopt a single runway system, while expanding all four Naia terminals. The government should also carefully review the terms of the project, which was placed under the Public-Private Partnership (PPP) Program. “A privatization can be considered, but

the Philippine government should be careful and only proceed with the PPP scheme if it can be ensured that the new owners will make the appropriate investments without significantly raising the costs for airlines or passengers,” Capa said. Currently, the government is in the process of finalizing the terms for the P75-billion contract to redevelop the Naia, a deal under the PPP Program with a concession period of about 15 to 20 years. Bidding is slated for the second half of 2017. With these initial terms, Capa said it is not confident that the private operator will complete all the needed upgrade. Should it do so, it could opt to “raise charges significantly in order to recoup the investment quickly.” Extending the concession period to 25 years may the best solution, as it could provide the right mix of benefits for all stakeholders, it said. But, a longer concession at the Naia could impact investor appetite in the new airport project. “The Philippines may ultimately be best to retain ownership in the Naia and invest in upgrades under the current structure, while proceeding with a PPP scheme for the new airport,” it said.

HE Philippine Exporters Confederation Inc. (Philexport) is petitioning for a status quo to the zero value-added tax (VAT) exemption, which currently applies to both indirect and direct exporters, even as the Department of Finance (DOF) proposes to retain the zero rating only for direct exporters. In a position paper, Philexport said it supports the move to reform Philippine tax policies and administration for greater compliance and higher collection, which will allow the government to deliver public services efficiently and sufficiently. However, it said it does not subscribe to the proposal to remove the zero VAT exemption for indirect exporters as part of the government’s action plan to push for accelerated and inclusive tax reforms. Philexport in its position statement dated February 1 called for “status quo, that is, zero VAT exemption to remain for indirect exporters who supply materials or services to direct exporters.” It pointed out that taking away the zero VAT rating for indirect exporters will hurt the entire export community and won’t solve the DOF’s issue that there is leakage brought about by indirect exporters reportedly reusing the zero-rated VAT certificates to get as many VAT exemptions. It suggests instead that, the DOF “set up the Track-and-Trace System to identify legitimate transactions that qualify

as zero-rated VAT.” Under the system, it added, “qualified transactions for zero-rating should be logged in. Each transaction is uniquely identified, goes through an approval process and then cancelled when products are finally exported”. It further states that the Track-andTrace System will be implementable and consistent with mandating e-receipts. In appealing for the retention of the zero VAT exemption for indirect exporters, Philexport said zero rating for exports is “an international practice and is not really an incentive.” At the same time, it also helps direct exporters to be price competitive, as their export prices will not carry the cost of local taxes, in this case, VAT. “Imposing nonzero rated VAT on local inputs would increase costs from 3 percent to 8 percent, depending on the amount of local raw materials and services in the products,” the trade association said. Other benefits of the zero rating for indirect exporters are that it eases the cash flow of direct exporters, as they do not have to “advance” payments of VAT for their locally sourced raw materials and services. It also encourages exporters to source from domestic producers of goods and services; thus, increasing the overall local trade, creating inclusive growth and expanding value added of industries.

Likewise, It motivates domestic industry to upgrade quality and develop upscale products for international market, while helping to diversify local industries to serve both local and foreign markets and promote job creation to help reduce poverty. In his presentation before the House of Representatives Ways and Means Committee on February 1, Finance Undersecretary Karl Kendrick Chua said the country needs to “clean” its VAT system of “numerous exemptions leading to large leakages.” One of these cleanup measures is to levy nonzero rated VAT on local inputs. In response, Oscar Barrera, Philexport trustee and chairman of the Legislative Committee of the Export Development Council, said the concern of the export community is the difficulty in getting refunds. He cited many Japanese investors who have billions in refunds accumulated for up to 20 years that have yet to be returned. Chua assured during the Congress hearing that the zero rating will not be removed unless a refund system is installed for the return of input taxes from local purchases. He said that the DOF will work for a three- to-four-week processing of refunds, which is the benchmarked practice in other countries. Philexport News and Features

Blanket exemption of AFP, PNP members from estate taxes sought

EP. Sherwin T. Gatchalian of Valenzuela City filed House Bill (HB) 4881 granting a blanket exemption from estate taxes to members of the Philippine National Police (PNP) and the Armed Forces of the Philippines (AFP). “Our men and women in uniform regularly risk their lives protecting our freedoms. Through their services during their lifetime, they have

already given much to our country, as such relieving their families from the additional burden of taxation is a small thing that we can do. The crux of this bill, therefore, is ultimately about honoring our men and women in uniform,” Gatchalian said. In his explanatory note for HB 4881, Gatchalian highlighted how the work of both the PNP and the AFP guarantees the “fullest enjoy-

ment of a citizen of his freedoms” as they protect it from lawless elements who threaten them. “They are modern-day heroes in the truest sense of the word. You and I are able to sleep at night with the peace of mind that our streets are safe because of our uniformed men who ensure that they are,” Gatchalian added. The representative from Valenzuela also notes how this measure

would work as a much-needed boost in the morale of our uniformed men, a day after the New Peoples’ Army (NPA) declared cessation of the unilateral cease-fire following a number of bloody skirmishes with the Philippine Army and in a week where the PNP has been at the center of intense criticism. “They are performing a really tough job for us. Just this Wednes-

day, we read from the papers the story Second Lieutenant Miguel Victor Alejo, a new graduate from the PMA [Philippine Military Academy] , in the prime of his life, and who was recently engaged, die after an encounter with the NPA,” said Gatchalian, reflecting on the newest casualty following an NPA attack in Sitio Paliwason, Barangay Lambog in Manay, Davao Oriental, on Wednesday afternoon.

“We should, therefore, remind them that the country has their backs and that come what may, they can be certain of the fact that the government would continuously push for measures that lessens the burden on their family,” he added. If HB 4881 is passed into law, the estate of a deceased policeman or soldier could save up to more than 20 percent in tax duties.

Agriculture/Commodities BusinessMirror

news@businessmirror.com.ph

Editor: Jennifer A. Ng • Monday, February 6, 2017

DA seeks P20B for solar-powered irrigation PHL chicken inventory down 1.94%–report T

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By Jasper Emmanuel Y. Arcalas @jearcalas

HE Department of Agriculture (DA) said it would ask Congress for an additional budget of P20 billion for next year to roll out solar-power irrigation systems to increase the country’s rice production. Agriculture Secretary Emmanuel F. Piñol said over the weekend that the amount will be used to irrigate at least 1 million hectares of rice farms. “The DA would promote the establishment of solar-powered irrigation system as an answer to the lack of irrigation for most of the country’s 3.9 million hectares of rice lands,” Piñol said in a statement. The DA chief noted that solarpowered irrigation systems could

PIÑOL

pump 400 to 1,000 gallons of water a day, enough to cover 150

hectares of rice farm. Piñol said 1.2 million hectares of the estimated 3.9 million hectares of rice farms benefit from communal irrigation systems that allow farmers to plant rice twice a year. Many farmers, he said, continue to depend on rainfall. “To achieve sufficient rice supply for the country, at least 1 million hectares of the 2.7 million hectares of rain-fed areas must be irrigated for farmers to be able to plant twice a year, which would mean an additional harvest of 3.9 million metric tons [MMT],” Piñol said. At a milling recovery rate of 65 percent, the DA estimated that irrigated rain-fed areas could produce 2.9 MMT of rice. “With the population growing 1.9 percent a year and an average rice consumption of 111 kilograms per Filipino, the country needs to produce an additional 221,445,000 kg of rice a year,” Piñol said. According to a National Irrigation Administration (NIA) report on the status of its irrigation development, there are about 3.2 million hectares of irrigable area

in the country. As of December 31, 2015, the agency has covered 53 percent of the total available irrigable area, or around 1.73 million hectares, according to the NIA report. Piñol said the DA will push the distribution and set up of solarpowered irrigation system in farming communities all over the country starting next year. “Given this support, the DA could ensure that the country would have sufficient rice before the end of term of President Duterte,” he said. On Friday the President switched on the first solar-powered irrigation syterm for North Cotabato in Barangay New Janiuay in the municipality of M’lang. Other systems would be coming on line soon, with the one in the municipality of Montevista to be the pilot in Compostela Valley province, the provincial information office said. Montevista was adjudged as the best site for the first solarpowered system for the Davao region following a two-day assessment conducted by Piñol last week. With a report from Manuel T. Cayon

HE country’s chicken inventory as of January 1 declined by 1.94 percent to 175.316 million, from 178.792 million recorded a year ago, according to the latest data from the Philippine Statistics Authority (PSA). The PSA data showed that 44.71 percent, or 79.398 million, of the current chicken inventory consisted of native chicken. The figure was 3 percent lower than the 80.852 million recorded last year. Broiler-chicken inventory as of January 1 also declined by nearly 5 percent to 62.444 million, from the 65.713 million recorded in 2016. PSA data also showed that the number of egg-laying chickens rose by 6.97 percent to 34.473 million at the start of 2017. The agency said the volume of dressed chicken in 2016 expanded by 11.56 percent to 567 million, from 508.242 million recorded in 2015. The PSA report published on February 3 indicated that the biggest inventor of dressed chicken was recorded in the third quarter of 2016, when it reached 148.028 million. Earlier, United Broilers Raisers Association (Ubra) President Elias Jose Inciong told the BusinessMirror that chicken output expanded last year due to the increase in the number of poultry producers.

Kalinga farmers told to plant coffee instead of marijuana By Alladin S. Diega Correspondent

Cocoa rout spurs concern some farmers will return to cocaine

HE worst cocoa price rout in more than 17 years is raising concern that farmers in South America may quit growing the raw material used in chocolate, and shift to alternative crops, such as cocaine, industry groups said. The beans traded on ICE Futures US in New York have tumbled for the past five months, the longest slide since May 1999. Cocoa is trading near the lowest since March 2013, pushed down by an expected global surplus. In Ecuador, the world’s thirdlargest exporter, the industry is “very concerned” that the current price will discourage farmers, prompting them to seek better returns from bananas, corn, rice or shrimp, said Juan Pablo Zuniga, president of the National Association of Cocoa Exporters. Cocoa for March delivery fell 0.6 percent to close at $2,072 a ton in New York on Friday. Current prices barely cover production costs that range between $1,800 and $1,900 a ton, he said in a telephone interview from Guayaquil. Yields are typically below 500 kilograms per hectare (1,102 pounds) on aging and small properties, which make up about 40 percent of the coun-

try’s planted area. That’s far less than the 2 tons per hectare that farms with new, higher-yielding varieties can produce.

Peru worries

UNFAVORABLE weather spurred by El Niño’s weather pattern in Ecuador cut supplies by 18 percent to 248,000 tons in 2015-2016. Output is expected to rebound this year to 280,000 tons, cementing Ecuador as the third-largest shipper of beans behind the Ivory Coast and Ghana. In Peru, where a four-year cocoa rally through 2015 encouraged former cocoa farmers to quit growing the raw material to make cocaine, concern is growing that weak returns will encourage a return to illegal alternatives, said Eduardo Montauban, general manager of Peru’s coffee chamber. While President Pedro Pablo Kuczynski wants to promote more cocoa and coffee production to deter illicit plantings, current prices may make that goal difficult to achieve. “If prices fall further, that could reduce next year’s production,” Montauban said by telephone from Lima. “Coffee and cocoa have been the leading alternatives to the development

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of coca production.” Peru’s cocoa crop production climbed about 59 percent over the past five years to 55,800 tons in 2015 as rising prices attracted more growers, Montauban said, citing government data. Growers had been encouraged by high prices after they sold their beans at an average of $3,096 a ton in 2016 and $3,200 in 2015.

Futures have averaged $2,173 a ton this year in New York. Citigroup Inc. and Rabobank International expect a global surplus in the season that started October 1. Ecuadorean shippers are optimistic that futures will rebound to $2,500 to $2,700 in the second half of the year as global demand recovers, led by Asia. Bloomberg News

T he PSA data also showed that the country’s hog inventory reached 12.427 million, 5.1 percent lower than the 12.478 million recorded a year ago. Nearly 66 percent of the hogs were grown by backyard raisers. Last year the PSA said the number of hogs slaughtered grew 6.96 percent to 11.49 million, from 10.742 million in 2015. The agency recorded the most nu mber of hogs sl aughtered last year during the Octoberto-December period, when demand was higher due to the holiday season. Pork Producers Federation of the Philippines Inc. (ProPork) President Edwin G. Chen earlier told the BusinessMirror that the hog industry will grow this year at the “usual rate” of at least 1 percent to 2 percent. Chen attributed the growth to higher demand consumption driven by the increase in the purchasing power of Filipinos. The PSA data also revealed that the total volume of slaughtered carabao and cattle in 2016 expanded by 4.23 percent and 0.37 percent, respectively. Chicken and pork are used in making many Filipino dishes and demand for the two farm commodities rises during the opening of classes and the holiday season. Jasper Emmanuel Y. Arcalas

NSTEAD of planting marijuana, Kalinga farmers are being encouraged to venture into the equally profitable and more socially acceptable coffee, according to the regional project director of the Department of Agriculture’s (DA) Philippine Rural Development Project (PRDP) in the Cordillera Administrative Region. “At P92.50 per kilogram of dried beans, coffee can be profitable to farmers, [hence] they do not need to plant the [prohibited] crop,” Dr. Lorenzo M. Caranguian said during the recent Luzon A Cluster meeting attended by World Bank representatives. Caranguian made this pronouncement in response to a remark that the hinterlands of Tinglayan, Kalinga, is known as a plantation area for marijuana. Last year some P2.2 billion worth of marijuana plants and derivatives found in a 15-hectare plantation in Tinglayan were destroyed. K a l i nga Gov. Jocel Ba ac said the addictive mar ijuana is destroying the lives of many people, yet, some continue to plant it as it is highly profitable. “A small bottle of dried marijuana can easily be sold for P1000 in some downtown areas in the

province,” Baac said, adding that the profit is irresistible to many farmers. But according to Baac, the PR DP ’s enter pr ise develop m e nt s u b p r o j e c t f o c u s i n g on coffee production in the province is a very much welcome alternative livelihood for Kalinga farmers. To help develop the promising coffee industry in Kalinga, the PRDP has earlier approved a P14.8-million funding assistance for the Kalinga Integrated Coffee Processing and Marketing Enterprise subproject. The assistance is expected to improve the production of coffee beans in the highlands, which has undergone initial improvements under the supervision of the PRDP. Known for its low acidity and full flavor, Kalinga coffee is highly sought in the local and even in the international market. According to Kalinga Provincial Agriculturist Domingo Bakilan, the desirable traits of Kalinga’s Robusta variety might be a result of being planted in the altitude between 7,000 to 8,000 feet above sea level. Bakilan added that the elders in different local communities say the best-tasting beans are those planted in rich and moist soils w ith clay components that quickly store and drain excess water.

AseanMonday

A6 Monday, February 6, 2017 • Editor: Max V. de Leon

BusinessMirror

Indonesia signals end of easing cycle on US policy uncertainty

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NDONESIA’S central bank gave its strongest signal yet that it may be done with cutting interest rates, as it adopts a cautious stance with the US Federal Reserve set to tighten further and President Donald J. Trump pursuing a new trade policy.

Bank Indonesia (BI) cut its benchmark rates six times in 2016, by a total of 150 basis points, in a bid to boost lending and revive economic growth. The bank left rates unchanged last month while maintaining at the time that there was room for further easing. The aggressive easing seen last year—which made Indonesia the biggest rate cutter in Asia—could however be at its end with Bank Indonesia Governor Agus Martowardojo saying

on Friday that policy-makers were taking a more cautious approach in the face of growing global economic uncertainty. The central bank is closely monitoring US fiscal and trade policies as they “will have a big impact on the world,” he said. Trump’s decision to dump the Trans-Pacific Partnership has stoked concerns that the world’s biggest economy was set to adopt a more protectionist stance on trade.

“Based on those considerations, our stance in general is cautiously accommodative. If previously the stance was an easing bias, now we’re cautious about easing,” Martowardojo said after a meeting of Indonesia’s Financial System Stability Committee. Bank Indonesia kept its sevenday reverse repurchase rate at 4.75 percent when it last met in January. A Bloomberg survey last November showed most economists were expecting the bank to remain on hold through 2017 and into 2018. “Given Bank Indonesia’s preference to keep the real rate positive, in part to support a stable currency, we believe room for further cuts remains limited,” Nomura Holdings Inc. economists Euben Paracuelles and Lavanya Venkateswaran said in a report dated February 1. “We reiterate our forecast that BI will keep its seven-day reverse repo rate unchanged at 4.75 percent this year.” Indonesia may post “much better” economic growth this year and the country’s financial stability would “be manageable” though it faced some domestic and external risks, Finance Minister Sri Mulyani Indrawati said on Friday. Southeast Asia’s largest economy, which has been growing at about 5 percent annually, may expand 5.3 percent in 2017, the World Bank estimates. “External risks that need to be watched out for are global economic recovery that isn’t solid or stable, the dynamic of global market that is influenced by the policy direction taken by the US government and a plan to raise the Fed funds rate, which will pressure capital flows and exchange rates,” Indrawati said. “We also view the process of economic balancing in China to potentially add to the pressure and risks.” Bloomberg News

China assails US pledge to defend disputed islands controlled by Japan

EIJING—China reacted with strong displeasure on Saturday to a promise by Defense Secretary Jim Mattis that the United States would defend two uninhabited islands in the East China Sea that Japan controls but China also claims as its own. Mattis, the first member of President Donald J. Trump’s Cabinet to visit East Asia, had told Japanese officials earlier Saturday that US defense obligations to Japan extended to the disputed rocky outposts, known in China as the Diaoyu and in Japan as the Senkaku. The chief spokesman for China’s Foreign Ministry, Lu Kang, accused Mattis of putting regional stability at risk and urged him to forgo what he called a Cold War mentality. “We urge the US side to take a responsible attitude, stop making wrong remarks on the issue involving the Diaoyu islands’ sovereignty, and avoid making the issue more complicated and bringing instability to the regional situation,” Lu said in a statement posted on the ministry’s web site. He described the 1960 defense treaty between the US and Japan, which Mattis cited in pledging to defend the islands, as a “product of the Cold War, which should not impair China’s territorial sovereignty and legitimate rights.” Mattis was not staking out a new position; while in office, President Barack Obama said the US would defend the islands. But the defense secretary’s words were reassuring to Japanese officials, who had been unnerved by Trump’s remarks as a presidential candidate suggesting that he might reduce US military commitments to its Asian allies. The disputed islands have been among a number of potential points of contention as China builds up its presence in the East and South China

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seas. Chinese and Japanese vessels regularly maneuver at close quarters in the waters as China tries to challenge Japan’s control of the islands. Last year China sent a warship to within 24 miles of the islands. President Xi Jinping of China declared much of the East China Sea to be a Chinese air defense zone in 2013, and since then China has regularly sent fighter jets to patrol the area. At a news conference in Tokyo, Mattis cited Article 5 of the USJapan treaty, which commits the United States to defend Japan or territories that it administers against attack. “I made clear that our long-standing policy on the Senkaku Islands stands—the US will continue to recognize Japanese administration of the islands,” Mattis said. “And as such, Article 5 of the US-Japan security treaty applies.” Before going to Japan, Mattis went to South Korea to offer as-

surances to that ally about defense commitments, and China’s reaction was similar. Lu struck a strident tone on Friday in expressing China’s opposition to US plans to deploy a missile defense system in South Korea, one that Mattis said was intended to protect the country from North Korea’s nuclear threat. “We firmly oppose” the deployment, Lu said at a regular news briefing. “This will not change and has not changed.” The system, which China says is a US attempt to interfere with China’s nuclear deterrent, “will undermine the strategic balance,” he said. China has threatened South Korea with economic consequences if it agrees to the deployment of the system, known as THAAD, which stands for Terminal High Altitude Area Defense. With the South Korean government in disarray and a presidential

election coming there, the Chinese government has been wooing the opposition Minjoo Party, which opposes the THAAD deployment. Officials of that left-leaning party have visited Beijing twice in recent months, offering reassurances that they oppose the system. While Mattis was in Tokyo on Friday, China’s top foreign policy official, Yang Jiechi, spoke by telephone with Trump’s national security adviser, Michael T. Flynn, the Foreign Ministry said on Saturday. The conversation, which the ministry said was initiated by the White House, appeared to be a preparatory step for a call between Xi and Trump. The ministry’s account of the conversation was upbeat. Flynn said the United States was committed to “developing strong and powerful US-China relations” and “properly managing the sensitive issues,” the ministry said. For his part, Yang emphasized the two countries’ “broad

common interests and great cooperation potential,” according to the ministry. Trump criticized China on a variety of fronts during the presidential transition, but the White House has had little to say about the country during the president’s first two weeks in office. And although Trump has held phone conversations from the Oval Office, several of them stormy, with a variety of world leaders, Xi has not been among them. There has been speculation among diplomats in Beijing and among US business groups in Washington that the two leaders would talk by phone in the coming days. Yang and Flynn last spoke in New York, a month after the presidential election, and from Yang’s point of view the meeting was not helpful. Just two days later, Trump astounded the Chinese government by asserting that the One China policy, under which the United States recognizes the government of Beijing and not Taiwan, was far from sacrosanct. “I don’t know why we have to be bound by a One China policy unless we make a deal with China having to do with other things, including trade,” Trump said on Fox News. Although there was no indication that Trump was reacting to anything Yang had said to Flynn, the episode was embarrassing for the Chinese official so soon after their meeting. Earlier last December, Trump upended decades of US diplomatic practice by speaking with Taiwan’s president by telephone. The Chinese have since stressed on several occasions that the One China policy is not negotiable. The Foreign Ministry’s statement on the conversation on Friday between Yang and Flynn did not say whether the two had discussed Taiwan, only that they had discussed regional affairs. New York Times News Service

news@businessmirror.com.ph

Public outcry forces Vietnam to review FDI strategy

O Nguyen Tan Phong, a farmer in Vietnam’s Mekong Delta, the foreign-owned paper mill built upriver from his catfish ponds was an ecological disaster waiting to happen. Phong feared a repeat of last year’s toxic spill from a steel plant owned by Taiwan’s Formosa Plastics Corp. that devastated central coast fishing communities and cut annual economic growth by 0.3 percentage point. Then something happened that Phong didn’t expect: The central government abruptly delayed last summer’s scheduled opening of the $1.2-billion mill owned by Hong Kong’s Lee & Man Paper Manufacturing Ltd. It’s now undergoing stringent environmental tests to get final approval. “Local governments used to accept foreign direct investment projects because they brought in huge amounts of capital,” Phong, 65, said last month. “Now, because of environmental concerns, they dare not accept it.” Rattled by the outpouring of public anger over the Formosa incident, Vietnam’s Communist leaders are rethinking the strategy of courting foreign investment at almost any cost. Now they are vowing to reject environmentally harmful investment and introduce regular factory inspections to ensure companies comply with the law. Minister of Natural Resources and Environment Tran Hong Ha has ordered provincial officials to make regular checks at factories a “key task in 2017” to help “better prevent and handle any environmental violations”, according to a January 19 posting on the government’s web site.

Communist legitimacy

FINDING the right balance will be key. With foreign companies contributing more than 70 percent of export revenue, the government faces pressure to avoid hurting an economy that grew 6.21 percent last year—one of the highest rates in Asia. Disbursed foreign direct investment climbed 9 percent to a record $15.8 billion. Lee & Man said it’s installed new waste facilities at the paper mill. It’s now undergoing a trial run that will continue into February, according to an e-mailed statement from the company. The public outcry over Formosa prompted a reaction from Vietnam’s leaders in part because they are realizing that environmental risk can threaten the legitimacy of the Communist Party, said Nguyen Xuan Thanh, a Ho Chi Minh City-based senior fellow at the Harvard Kennedy School of Government. That will be tested by powerful state-owned enterprises, influential private companies and a growing number of coal-fired power stations to meet increasing demand for electricity, he said.

Economic disaster

“IT’S the dilemma China faced 20 years ago,” Thanh said. Until last April’s toxic spill in central Ha Tinh province, the government paid little heed to the environment as it opened the country to outside investors, according to Pham Chi Lan, who served as an economic adviser to former Prime Minister Phan Van Khai. That created “favorable conditions for polluters,”she said, adding that now the government realizes that environmental disasters can hurt the economy. The Ministry of Natural Resources and Environment didn’t immediately respond when reached by phone. Ha Tinh saw a 17-percent drop in growth after the Formosa spill devastated the local tourism and fishing industries. Prime Minister Nguyen Xuan Phuc has said he will shut down the steel mill if it happens again, and has ordered officials to closely monitor other projects. After the disaster, government officials found 53 violations from the company. Formosa took full responsibility and agreed to pay $500 million in compensation. Vietnam last month said it would punish four government officials over the incident. Even so, government oversight is so lax that for most foreign enterprises the cost of complying with local environmental standards in Vietnam is as much as 50 percent less than in their home countries, said To Trung Thanh, an associate professor at the National Economics University in Hanoi. Bloomberg News

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The World BusinessMirror

Editor: Lyn Resurreccion • Monday, February 6, 2017 A7

Trump admin moves to appeal ruling on travel

EST PALM BEACH, Florida— The Trump administration moved on Saturday night to appeal a United States District Court ruling that blocked the president’s immigration order, setting the stage for a legal showdown over his authority to tighten the nation’s borders in the name of protecting Americans from terrorism. The brief notice of appeal came after a chaotic day in which the government complied with the district court’s ruling by allowing the entry of refugees and travelers from seven predominantly Muslim nations, even as President Donald J. Trump unleashed a fusillade of criticism at the ruling and the judge who had issued it. At airports around the world, small numbers of travelers from the previously banned countries began venturing trips to the US, knowing that the judge’s ruling could be overturned at any time. The State Department reversed its cancellation of visas for people from the seven affected countries— Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen—and aid groups scrambled to take advantage of what they acknowledged might be a brief window for refugees to enter the United States. On Saturday night, as Trump arrived at a Red Cross gala at Mar-aLago, his waterfront Florida resort, where he was spending the first getaway weekend of his presidency, reporters asked him if he was confident that he would prevail in the government’s appeal. “We’ll win,” he replied. “For the safety of the country, we’ll win.” The legal maneuvering led Trump to lash out at Judge James Robart of the US District Court in Seattle throughout the day, prompting criticism that the president had

failed to respect the judicial branch and its power to exert a check on his authority. In an early-morning Twitter post, Trump wrote, “The opinion of this so-called judge, which essentially takes law-enforcement away from our country, is ridiculous and will be overturned!” Late on Saturday, the Justice Department filed papers saying it would seek to have the 9th US Circuit Court of Appeals block the judge’s decision. Robart, who was appointed by President George W. Bush, declared in his ruling on Friday that “there’s no support” for the administration’s argument that “we have to protect the US from individuals” from the affected countries. Robart’s ruling also barred the administration from enforcing its limits on accepting refugees. The State Department said on Saturday that refugees, including Syrians, could begin arriving as early as Monday. Syrians had faced an indefinite ban under the executive order. His ruling applied nationwide. It was not clear how quickly the 9th Circuit court would move. In a note posted on Saturday night on its electronic filing system, the court said it would soon issue an order setting a briefing schedule. In ordinary cases, the first brief would not be filed for almost a month, but the federal government will no

COMMUTERS at John F. Kennedy International Airport in New York on February 4. A day after a federal judge temporarily blocked President Donald J. Trump’s immigration order, Trump took to Twitter to attack the judge, calling him a “so-called judge” whose “ridiculous” ruling would be overturned. ALEX WROBLEWSKI/THE NEW YORK TIMES

doubt ask the appeals court to move much faster. In emergencies, the appeals court’s rules sometimes allow a single judge to act alone or to convene a three-judge panel by telephone. Despite Trump’s vehement criticism of the lower court’s ruling and the certainty that it would be appealed, the government agencies at the center of the issue, the State Department and the Department of Homeland Security, moved quickly to comply. Lawrence Bartlett, the State Department’s director of refugee resettlement, wrote in a departmental e-mail that officials were working to rebook travel for refugees who had previously been scheduled to leave for the United States over a threeweek period ending February 17.

A State Department official said the extended time frame accounted for the fact that some refugees would have to make difficult journeys back to airports from refugee camps. Until there is a new order from the courts, the official said, the department would go back to vetting refugees, booking their travel and bringing them to the US. A United Nations spokesman, Leonard Doyle, said about 2,000 refugees were ready to travel. Airlines, citing US customs officials, were telling passengers from the seven countries that their visas were once again valid. Those carriers, however, have yet to report an uptick in travel, and there appeared to be no rush to airports by visa holders in

Report shows varied ways on how to examine the job market

ITH the January jobs report released last Friday by the Labor Department, we know that President Donald J. Trump took office amid a relatively low unemployment rate (it ticked up to 4.8 percent in January), strong job growth (227,000 positions added that month) and weak wage growth (average hourly earnings up 0.1 percent in January and 2.5 percent over the past year). There was even some welcome progress in the number of people who count themselves as part of the labor force. But he made amply clear in his campaign that he doesn’t care for the way that government agencies and mainstream economists summarize the state of the job market. The unemployment rate, he said last December, is “totally fiction”. He claimed at one point during the campaign that the real jobless rate was not the number below 5 percent widely cited by economists, but something like 42 percent. There is certainly a filament of truth in that. The unemployment rate counts only people who say they want a job and have looked for one in the last month—meaning that millions of Americans who dropped out of the labor force during the aftermath of the 2008 recession do not count as unemployed by the standard definition. But we have some exciting news for the president. The Bureau of Labor Statistics doesn’t just issue the widely cited headline unemployment rate (again, 4.8 percent in January). This month’s jobs report, for example, offers 42 pages’ worth of figures that allow anyone who knows how to read them an infinite variety of ways to

examine the labor market. No one forces you to treat the standard unemployment rate as gospel; it is just a convention, and any economic analysts worthy of their spreadsheets use a wide range of data to assess how things are going. So if the White House wants to choose a different measure of jobmarket health to emphasize on the first Friday of every month, we’re all ears. The nice thing about a convention is you can change it. Here, in fact, is a menu of labor market measures that might be plausible alternatives to the main number—and why the Trump administration may, or may not, want the world to watch it. n Underemployment The Bureau of Labor Statistics publishes six different unemployment rates, from a relatively narrow definition to relatively broad. The jobless rate most often cited is the third of the six, known in bureaucratese as U-3, and includes only people who say they want a job and have actively looked for one in the last month. The broadest of these unemployment rates, U-6, also includes people who want a job but haven’t looked in the last month and people who have a part-time job but want full-time work. That rate: 9.4 percent. n Share of population not employed If Trump really believes the 42-percent unemployment rate he floated last year is a useful measure of joblessness, here’s the math that almost gets him there. The proportion of the adult population that is working is 59.9 percent, so the remainder of that—the share

of US adults not working—was 40.1 percent in January. Think of it as a measure of nonemployment, not the more precisely defined unemployment. There are some problems with that measure. It includes people who are not working and who have no desire whatsoever to do so. It includes 17-year-old high-school students, 80-year-old retirees, disabled adults and parents who voluntarily stay home with their children. Moreover, if Trump wants to focus on this measure, he may not be pleased with the results. Because the baby boom generation is hitting retirement age and voluntarily stepping out of the labor force, this measure of nonemployment is likely to rise in the years ahead. n Share of prime-age population not employed One way to avoid the most obvious problems with that measure is simply to limit the age bracket you look at. Jordan Weissmann at Slate argues that a better all-encompassing measure of the health of the job market is the share of the population ages 25 to 54 who are working. That number was 78.2 percent in January, so its remainder implies a 21.8-percent jobless rate. This still isn’t perfect—it includes people who fall in that age bracket who have no desire to work, and also fails to include people younger than 25 or older than 54 who really do want a job but can’t find one. But as a quick-anddirty measure of the health of the labor market, Weissmann is right that you could do a lot worse. n Average hourly earnings A common complaint about the media focus on how many jobs are

Europe and the Middle East intent on making their way to the US. Etihad Airways, the United Arab Emirates’s national carrier, said in a statement: “Following advice received today from the US Customs and Border Protection unit at Abu Dhabi Airport, the airline will again be accepting nationals from the seven countries named last week.” Other Arab carriers, including Qatar Airways, issued similar statements. A group of advocacy organizations that had worked to overturn the executive order and help immigrants and refugees stranded at airports issued a statement on Saturday afternoon encouraging travelers “to rebook travel to the

being created is that it doesn’t account for whether they are good jobs. But this is a tricky concept to measure; everyone can agree that a minimumwage burger-flipping position is not as ideal as a highly paid computerprogramming gig, but it’s hard to get at more subtle differences. Is a job as a truck driver better or worse than one as a hotel assistant manager? It’s pretty subjective. What isn’t subjective is compensation. And data on average hourly earnings helps convey not just whether people are getting raises for existing jobs, but also whether the composition of jobs in the economy is shifting toward higher pay. Average hourly earnings for all private-sector employees was $26 in January, and for nonmanagerial private-sector employees it was $21.84. An economy in which those numbers rise significantly faster than inflation is an economy in which working-class people are feeling better about the world and are seeing greater rewards for their labor. There are plenty more options for the Trump administration to consider as job market measures to emphasize. Unemployment in the construction sector (currently 9.4 percent)? The jobless rate among people who didn’t go to college (currently 5.8 percent)? The options are nearly endless. But—and this is important—if the president wants to set a different measure of the job market for his administration to focus on and improve, it would be best if he could let us know what it is, so that we can really assess whether things get better or worse during his presidency. New York Times News Service

United States immediately.” “We have been in contact with hundreds of people impacted by the ban, and we are urging them to get on planes as quickly as possible,” Clare Kane, a law student intern at the Jerome N. Frank Legal Services Organization at Yale Law School, one of the groups involved, said in a statement. But some officials were being more cautious, advising travelers to wait for further clarity. The US Embassy in Baghdad said it was waiting for additional guidance from Washington. “We don’t know what the effect will be, but we’re working to get more information,” the embassy told The Associated Press in a statement. New York Times News Service

Germany’s surplus waning, research says

HE Trump administration appears intent on escalating the long-standing US practice of attacking Germany’s current-account surplus. Good news for those on the receiving end: It has probably peaked. As officials like National Trade Council Director Peter Navarro rail against the trade imbalance that dominates the balance of payments between the two countries, pensioners, home-buyers and immigrants are quietly working to bring that $297-billion currentaccount surplus down. According to research by Deutsche Bank, demographics and a housing boom are two factors that will drive the current account balance—the difference between what a country earns from abroad and what it spends—to its lowest level in seven years by 2020. That may offer little consolation to the German delegation when it hosts a Group of 20 meeting of finance ministers in March, as they’ll likely face intensified criticism for allowing such an imbalance to continue. Germany has long faced flak, both within the euro area and outside it, for failing to encourage greater domestic spending and imports to balance out its external excess. Still, while the weaker euro will continue to make German exports attractive in the US— think expensive sedans, high-tech

machinery—there are countervailing factors at play on the other side of the equation. “In the medium term we expect the demographic development and the solid domestic economy, driven by a sustained positive development on the property market, to push the surplus down to 7 percent of GDP,” Deutsche Bank economist Heiko Peters said by phone. A rising share of pensioners in the German population, who normally have less money to save than people in jobs, will crimp household savings rates, while an increasing number of immigrants such as refugees will contribute to boosting German imports, Peters wrote in a study first published last year. And with housing valuations outpacing income and rent growth since 2009, home owners feel richer, save less toward retirement and borrow against their property. That leads to rising imports of building materials to fuel the property boom and increased demand for foreign consumer goods on the back of the wealth effect. Seven percent of GDP is still a mighty big number for an economy as large as Germany’s. “That’s still a relatively high level until 2020,” Peters says. “But an even greater demographic effect is then expected for 2020-2025, and the surplus should then decline clearly further.” Bloomberg News

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Monday, February 6, 2017

Anti-Trump sentiment rising in Mexico ‘Chavez wannabe’

THERE’S at least one Latin American precedent that’s encouraging for a left-leaning, nicknamed politician on the comeback trail. Luiz Inacio Da Silva finally won Brazil’s presidency for his Workers’ Party in 2002 after three failed attempts. If Amlo can repeat Lula’s feat, it will spell trouble for Washington, according to Jose Cardenas, a former senior official at the State Department. The Brazilian toned down his populism once he took office. Lopez Obrador, according to Cardenas, bears a closer resemblance to another Latin leader who didn’t. Amlo is a “Hugo Chavez wannabe,” Cardenas wrote in National Review. He warned of likely disputes “on everything from border security, counterterrorism and drugwar cooperation to deportations and restricting Central American migration.” Every item on that list is a hotbutton issue for Trump. But, as seen from Mexico, they’re primarily northern problems. South of the border, corruption and violence—especially the disappearance and killing of dozens of students two years ago, in which the police were implicated—had spread disillusion with the political establishment well before Trump’s arrival.

PERUVIAN JOAQUIN NUNEZ takes a selfie between wax replicas of US President Donald J. Trump (left) and Mexico’s President Enrique Peña Nieto, at the Wax Museum in Mexico City. AP/REBECCA BLACKWELL

Y the time the last brick is laid atop President Donald J. Trump’s Mexican wall, it’s a fair bet that someone more antagonistic toward the US will hold power on its southern side. Especially if that someone is Andres Manuel Lopez Obrador. Which, thanks to Trump, looks increasingly likely. The politician known locally as Amlo is the early frontrunner in Mexico’s 2018 presidential race. By itself, that may not mean much: Polls are unreliable, voting is a long way off, and Lopez Obrador is a two-time election loser in a country that stood aloof from Latin America’s populist turn and instead tethered its economy ever closer to the US. But good luck selling that line to Mexicans right now. The momentum on Amlo’s side is palpable. Amid a spasm of national rage, voters are increasingly sympathetic to the cries of a radical outsider who promises to end a relationship of “ subordination” to the US and rebuild the domestic economy. In other words, Trump—with his brash pledges to rewrite the North American Free Trade Agreement (Nafta) and stick Mexico with the bill for building the wall—has created the perfect climate for an anti-

17%

The percentage decline of Mexico’s peso after US President Donald J. Trump’s election win Trump south of the border. “Winner of today’s US Mexico dust-up: Andres Manuel Lopez Obrador,” Eurasia Group President Ian Bremmer tweeted last week. “Hope Trump is looking forward to working with him.”

‘Bad hombres’

EVEN if it doesn’t come to that, the relationship is getting tense, as Mexico’s mainstream parties are pulled in Amlo’s direction. President Enrique Peña Nieto, who can’t run for reelection, canceled a visit with Trump scheduled for this week. And he’s begun to stress the

importance of bolstering the local economy and raising wages—even though keeping them low, to make Mexico attractive to American corporations, has effectively been government policy for decades. Mexico’s peso slid about 17 percent after Trump’s election win, before recovering some of those losses since he took office. Still, almost every time the new president talks about Mexico, there’s something to make investors uneasy—and Mexicans madder. Last week, for example, he’s said to have suggested the US might send troops to deal with “bad hombres down there,” a comment later downplayed as “ lighthearted”. On Friday a report showed Mexican consumers have never been so pessimistic about their economic prospects. Popular feeling is running so strong that Mexican politicians have little choice but to fall in line. Online campaigns are calling on Mexicans to vacation at home (“Adios Disneylandia.... Hola Mexico”). Local governments and activists demand boycotts of US products. Many Mexicans have draped the national flag across their social media pages. It just sounds less convincing coming from leaders who’ve made a career out of close US ties. Peña Nieto’s approval rating is 12 percent. Jose Hernandez Solis, a 56-yearold street vendor at an Amlo rally in Mexico City on Monday, certainly wasn’t persuaded.

‘Boot-licker’

“THE president is a boot-licker,” Solis said. “Lopez Obrador has the guts to stand up to Trump and tell it like it is.” Straight talk, of course, is exactly the reason many US voters gave for backing Trump. At the rally, Lopez Obrador—a 63-year-old with a shock of white hair who’s recently taken to sporting sideburns—did what he usually does. He blamed “neoliberalism” for rampant inequality and violence, and vowed to protect local farmers from northern competition. “Everything depends on strengthening Mexico,” he said, “so we can confront aggression from abroad with strength.” Such rhetoric almost won him the presidency in 2006. Lopez Obrador lost that election by less than 1 percentage point. His supporters shut down central Mexico City for weeks afterward, claiming the vote was rigged. The standoff irritated many Mexicans, and may have contributed to Amlo’s defeat by Peña Nieto in 2012, when the margin was wider. An Amlo presidency would be a step into the unknown for Mexico. His Morena party is only two years old; by contrast, Peña Nieto’s PRI has roots in the Mexican Revolution of a century ago, and has been in power for all but 12 years since then. An early test of the 2018 contenders may come in June this year when several states hold local elections.

Nafta ‘straitjacket’

LOPEZ Obrador would add the country’s US-friendly energy and agriculture policies to the catalog of woes. He says Mexico will consume its own gasoline and food on his watch, instead of importing it. That would mean changes to Nafta, probably not the ones Trump has in mind—assuming the trade pact survives at all. Its impact on Mexico is hotly debated in any case, and both sides can cite data that backs up their arguments. Nafta has made no inroads into Mexico’s poverty rate. It stood at 53 percent in 2014, pretty much unchanged from two decades earlier when the trade accord went into effect, according to the World Bank. But the country has attracted billions of dollars of foreign investment in that period, turning it into the worlds seventh-largest automaker and creating thousands of jobs. Lopez Obrador and his supporters take the glass-half-empty view. “Nafta is a straitjacket that has kept 50 percent of our society in poverty” said Sen. Manuel Bartlett of the Labor Party. “This is not about being antagonistic to the United States, it’s about being nationalist in defense of Mexico’s interests.” Americans north of the wall may soon get to decide for themselves which description fits Amlo best. He’s planning a speaking tour of US cities with large immigrant communities. First up, on February 12, is Los Angeles. Bloomberg News

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France’s prexy candidate warns on US global role

RENCH presidential candidate Emmanuel Macron told voters that the US is giving up its role as global peace keeper, and during a campaign rally in Lyon welcomed entrepreneurs disgruntled with President Donald J. Trump to France. “The US may be abandoning its historic mission of preserving world peace,” Macron told supporters. In this context, “France has an enormous responsibility.” Macron said that if elected, he would push French defense spending back above the threshold of 2 percent of GDP required of North Atlantic Treaty Organization (Nato) member countries. The country’s military spending was an estimated 1.8 percent of GDP in 2015, Nato figures show, and was last above 2 percent in 2009. In a wide-ranging speech that touched on everything from simplifying the country’s labor code to lengthening library opening hours, the independent also made several references to US politics without mentioning Trump by name. “There will be no wall in my program,” Macron said, adding that France’s Maginot Line defense, a series of concrete fortifications and weapons installations built after the First World War, failed to prevent Germany from invading in 1940.

‘Solemn call’

MACRON, 39, also made reference to disgruntlement in Silicon Valley, home to many US technology companies, with Trump’s proposed immigration restrictions. After the president stopped entry to the US of refugees and travelers from seven predominantly Muslim countries, Google, Facebook, Salesforce and others railed against the move, saying it violated the country’s principles and risked hobbling its engine of innovation. “In fact, I want to make a solemn call to all the researchers, academics, businesses who in the United States are battling obscurantism,” Macron said. “I want everyone defending innovation, excellence in the United States to hear us and see us: You now have, and you will have from next May, a motherland: France.” Anti-immigrant candidate Marine Le Pen leads in polling for the first round of ballots on April 23, with about 25-percent support. Macron and Republican François Fillon are on about 20 percent, according to Ifop’s latest daily tracking poll. Macron, a former economy minister under President Francois Hollande, and former Prime Minister Fillon would both beat Le Pen in a run off, according to a separate poll this week by Elabe. Bloomberg News

India state elections test PM Modi’s popularity after currency-decree chaos

EW DELHI—Nearly three years ago, Indian Prime Minister Narendra Modi won a sweeping national election victory with promises to develop the economy and root out corruption. But with a series of key state elections beginning this weekend, Modi’s popularity—and his surprise currency decree that sparked months of financial uproar—is now being tested. India is just emerging from the fallout of a November decision that withdrew India’s two largest currency notes from circulation and caused weeks of chaos as people waited to get their money back in new bills. Modi and his Bharatiya Janata Party (BJP) hailed the move as a way to curb tax fraud and corruption and push India toward more digital spending. Opponents say it was a self-inflicted blow on the

world’s fastest-growing economy, causing enormous hardship for the vast majority of Indians, who often rely completely on cash. While the five state elections will not decide whether Modi remains in office, a loss would be seen as a serious blow to his political image. Most important is the northern state of Uttar Pradesh, whose immense population of 204 million means state elections often help shape the national political agenda. “In these elections, Uttar Pradesh is the real biggie,” said Ajoy Bose, a political analyst in New Delhi. “If the BJP were to lose in Uttar Pradesh, it would be a huge setback, both for the party and for Modi. It would destroy the myth of Modi, who has been projected as this political juggernaut of invincible proportions,” Bose said. Elections were held on Saturday

INDIAN women display their election identity cards as they stand in a queue to cast their votes outside a polling station, at Chogawan village, about 20 kilometers from Amritsar, in the northern Indian state of Punjab, on Saturday. AP/PRABHJOT GILL

in the northern state of Punjab and the beach resort state of Goa. Hundreds of paramilitary troops and police were posted near voting stations across Punjab to ensure secu-

rity as voters stood in long lines to cast their ballots. By evening, when voting ended in Punjab, around 83 percent of the state’s eligible voters had cast ballots, officials said.

In Goa more than 83 percent voters had cast their vote when polling ended Saturday. In the next phase of the election, the Himalayan state of Uttarakhand votes on February 15, and remote northeastern Manipur votes on March 4 and 8. Elections in Uttar Pradesh begin on February 11, but because of the state’s size, voting is divided into seven phases. Results from all the elections will be declared on March 11. In 2014 the BJP had won an overwhelming 71 out of 80 parliamentary seats in Uttar Pradesh, or 15 percent of all national legislators in the powerful lower house, ensuring that it emerged as the single largest party in Parliament. But Modi now faces a tough fight in Uttar Pradesh, with the state’s current top official, Akhilesh Yadav, in a political alliance with the Congress

Party, led by Rahul Gandhi, scion of the Nehru-Gandhi family that ruled India for decades. While the Congress Party is a shadow of its former self, it remains the country’s second most popular. The alliance is seen as a way to boost the chances of Yadav’s Samajwadi Party while the Congress Party tries to remain relevant in a politically key state. All those candidates must also face Mayawati, a former chief minister of the state and a master of caste-based politics. Mayawati, who uses only one name, is a Dalit, the name given to the lowest rung of India’s caste hierarchy. She commands strong support among the state’s Dalits, who form more than one-fifth of the population. Uttar Pradesh voters are divided over the recent currency decree, analysts say. AP

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CARGILL AT ODDS WITH TRUMP, WARNS ON IMMIGRATION, TRADE

HE CEO of Cargill Inc., the largest closely held US company, has become the latest corporate leader to voice concerns about immigration and trade protectionism. In a speech and an opinion column, David MacLennan warned of the economic dangers posed by curbs to legal immigration. He also said trade protectionism risks creating food shortages and even sparking conflict. “The current climate has many of our smartest people from outside the US questioning whether they want to stay here,” he wrote in the Huffington Post on Friday. “We don’t want to drive away talented people and their innovative thinking. It would weaken not only our food system, but the US economy.” While the substance of MacLennan’s comments aren’t totally surprising—the 152-yearold company was already a supporter of trade liberalization and immigration reform—it’s unusual for Cargill’s leader to step into the middle of a fierce national political debate. Trump’s executive order to curb immigration from seven predominantly Muslim countries, a move he says is necessary to maintain national security, has also been criticized by the CEOs of Starbucks Corp., Google and Goldman Sachs Group Inc. Trump has also signed an executive order to pull the US out of the Trans-Pacific Partnership and is pushing to renegotiate the North American

Free Trade Agreement, a deal he has labeled as unfair. Cargill is “eager” to improve North American Free Trade Agreement but “not dismantle it,” according to MacLennan. Any slowdown in the flow of international trade would be a problem for Cargill and competitors, such as ArcherDaniels-Midland Co., Bunge Ltd. and Louis Dreyfus—the so-called ABCDs of global agricultural trading. Cargill’s earnings have already come under pressure in the past few years from low commodity prices and the slowing growth of some economies. Based in Minneapolis, and still controlled by its founding family, Cargill’s business is truly global, employing 150,000 people in 70 countries and with $107 billion of revenue in its most recent fiscal year. As well as the trading and distribution of staple crops such as corn and wheat, the company has branched out into meat processing, vegetable oil and fish food. “We cannot wall ourselves off” from the 96 percent of the global population that lives outside the US, MacLennan said on Friday in a speech at the University of Saint Thomas in Saint Paul, excerpts from which were tweeted by Cargill. “We’ve seen what happens when protectionism disrupts the free flow of food,” he said. “It can provoke famine, cause conflict and even war.” Bloomberg News

Monday, February 6, 2017 A9

New Pentagon chief an instant winner in Japan, South Korea

United States Defense Secretary Jim Mattis (left) and Japanese Prime Minister Shinzo Abe shake hands at the prime minister’s office in Tokyo on Friday. AP/EUGENE HOSHIKO

OKYO—In his debut abroad as the first retired general to lead the Pentagon in more than half a century, Jim Mattis found that in Japan and South Korea his experience in uniform is seen as an asset.

Not everyone who knows Mattis well in the US shares that view, but he clearly was an instant hit in northeast Asia. Japanese Prime Minister Shinzo Abe was effusive in his endorsement as the two shook hands on Friday before a phalanx of Japanese and international news reporters and cameras. “I was very encouraged,” Abe said, “to see someone like you who has substantial experience, both in the military and in security, defense and diplomacy, taking this office.”

41 The number of years new US Defense Secretary Jim Mattis worked in the Marine Corps

Mattis won easy confirmation by the US Senate just hours after President Donald J. Trump’s swearing in on January 20. But some had questioned the wisdom of breaking a long American tradition of picking defense secretaries with primarily civilian backgrounds. In fact, it has been more than a tradition. There is a legal prohibition on appointing a defense secretary who has not been out of uniform for at least seven years. Mattis retired from a 41-year career in the Marine Corps in 2013. The Congress had to pass a bill making a onetime exception for Mattis, who was widely praised as a thoughtful, level-headed leader. The only other time in history that such an exception was made was for George C. Marshall, the former Army chief of staff who had served as secretary of state before President Harry Truman picked him as defense secretary in September 1950, at a crucial point in the just-started Korean War. Abe noted that Mattis’s military career included a stint on Okinawa, which the US returned to Japanese control in 1972 based on an agreement signed a year earlier to end the postwar period of US military control. “So I believe that you are quite familiar with the situation surrounding Japan,” he said. In Seoul, where civilian control of the military has a mixed history, Mattis's counterpart, Han Min Koo, portrayed him as a kindred spirit. Han told reporters he knew why they were able to forge a bond in their very first meeting. “I believe this was possible because we both served as active-duty servicemen for 40-plus years,” Han said. Mattis was not shy, either, about highlighting his military background. In Tokyo he recalled training in Okinawa and elsewhere in Japan

as a newly minted lieutenant in 1972. He said he made Japanese acquaintances that have lasted a lifetime. Asia is hardly Mattis's forte, however. He spent the bulk of his career focused on the Middle East, including combat tours in Iraq and Afghanistan. He also served as Nato supreme allied commander transformation, focused on Europe, from 2007 to 2009. In picking Mattis, 66, to lead the Pentagon, Trump seemed enamored of the general’s popular nickname, “Mad Dog”, as if this served as a warning to the world not to mess with America. Mattis, however, insists that the nickname was a media invention that he does not embrace. He certainly came across as anything but “mad” or rabid on his visits to Japan and South Korea. He was a picture of sober restraint at his several public appearances, including a news conference Saturday in Tokyo. He expressed caution on Iran, saying its adventurism did not mean the US should send more military forces to the Middle East. And he called for diplomacy to address China’s militarization of disputed islands and land formations in the South China Sea. Even some of his biggest admirers have questioned, however, whether he is the right man for Trump’s Pentagon. One such skeptic is Erin Simpson, a noted defense strategist who wrote about a prospective Secretary Mattis last fall, before he had been selected. “Not only does the role of secretary of defense not play to Mattis’s strengths,” she wrote, “but success in that role would compromise much of what we admire most in him: his bluntness, clarity and single-minded focus on war fighting. The secretary’s job is by necessity much more political than all that.” AP

US: A nation of immigrants, but ambivalent on immigration

EW YORK—America’s selfimage is forever intertwined with the melting pot. It’s a nation that welcomes the world’s wretched refuse, a nation built by immigrants, a nation whose very motto is “E Pluribus Unum”—Out of Many, One. America’s history also is replete with efforts to shut the golden door to arrivals from China, from Eastern and Southern Europe—and most recently, from predominantly Muslim nations. America’s relationship with immigration is...complicated. “Many of us—politicians, people who are speaking out against the impact of the administration’s actions—are saying, ‘We are a nation of immigrants. This goes against our most important values.’ And that is absolutely true,” said Erika Lee, director of the Immigration History Research Center at the University of Minnesota. “But we also have a long record of barring immigrants, denigrating them, building walls. That’s the flip side.” Said Mae Ngai, a professor of history at Columbia University and author of Impossible Subjects: Illegal Aliens and the Making of Modern America: “We struggle over these things. Both strains have always been present.” The leaders of colonial America knew they needed immigrants to populate their new land. But Benjamin Franklin grumbled about an influx of “swarthy” Germans, and the Alien and Sedition Acts of 1798 made it harder to attain citizenship and easier to deport non-citizens deemed dangerous. The acts were controversial; most were allowed to expire in a few years, but the deportation law remains, even today. And their justification— that some or many immigrants were

PEOPLE hold a placard on February 4 as they take part in a protest march in London, against US President Donald J. Trump’s ban on travelers and immigrants from seven predominantly Muslim countries entering the US. AP/MATT DUNHAM

dangerous interlopers—has been invoked again and again. The rise of the Know Nothings, a nativist and populist movement of the 1840s and 1850s, was spurred by the rise in German and Irish immigration, and by fears that the Catholic newcomers were loyal to a foreign entity— the pope—and incompatible with American values. “If you substitute ‘Muslim’ for

‘Catholic,’ they would sound very similar to what you hear today,” Lee said. In 1868 the US signed a treaty encouraging Chinese migration; 24 years later, the Chinese Exclusion Act turned away immigrants from what was even then the world’s most populous nation. What had happened in between? The Chinese immigrants who had shouldered much of the work of

building the West had come to be seen as a threat—the “Yellow Peril.” Fear and bigotry were intermixed. In 1917, Congress passed legislation requiring a literacy test for immigrants, though only after four presidential vetoes. “They knew they couldn’t say, ‘Keep out the Jews and the Italians,’” but that was the purpose, Ngai said. In 1921 and 1924, in the after-

math of World War I and the Red Scares that followed the Russian Revolution, the first quotas took effect, setting limits for immigration from countries that were seen as undesirable. There was to be little immigration from Africa, none from Asia or Arab countries, and the flow from southern and eastern Europe was curtailed. Jewish refugees from Europe were blocked during and after World War

II—first because of fears that they might be German sympathizers, then because of fears that they were Communists. “History doesn’t look too kindly on this, because we know how preposterous this was,” said Rebecca Kobrin, an assistant professor of history at Columbia. But for all Americans’ suspicions of immigrants, said Maria Cristina Garcia, professor of American studies at Cornell University, there has been an appreciation of what they did. “Since the early republic, Americans have recognized that immigrants are essential to nation-building: Immigrants farmed the prairies, worked in the factories, built the streets, canals and railroad tracks. They mined the ore, planted and harvested the crops, and provided basic services. Government and business actively recruited foreign labor to facilitate economic growth," she said. As hard as it often was—and as much bigotry as immigrants endured— immigration became central to the American narrative. “It’s fundamental,” said William Thiesen, 37, a New Yorker visiting the city’s Tenement Museum on Tuesday. “I think being an American is being an immigrant. It’s the American fabric. We’re all immigrants.” It was Israel Zangwell, a British writer, who dubbed America “the Melting Pot” in his 1908 play of the same name. His Russian-Jewish immigrant hero proclaims: “what is the glory of Rome and Jerusalem where all nations and races come to worship and look back, compared with the glory of America, where all races and nations come to labor and look forward!” More than 100 years later, despite some apprehensions of the moment, that feeling persists. AP

A10 Monday, February 6, 2017

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Romania government vows to repeal law that decriminalizes corruption

DEMONSTRATORS wave with Romanian flag during a protest in front of the government building in Bucharest, Romania, on Saturday. Thousands of Romanians took to the streets for a fifth consecutive day to protest the decree, that waters down the country’s anticorruption fight. AP/Darko Bandic

UCHAREST, Romania— After mass protests that have rocked the country for days, Romania’s government announced on Saturday that it will repeal a highly controversial emergency decree that decriminalizes official misconduct.

Prime Minister Sorin Grindeanu said the government would hold an emergency meeting on Sunday to withdraw the decree, which has sparked the biggest protests in Romania since the end of communism in 1989. “I don’t want to divide Romania... Romania in this moment seems broken in two,” Grindeanu told reporters. Protesters were angry that the measure would water down the country’s fight against corrupt officials. Tens of thousands took to the streets for the fifth consecutive day on Saturday, marching through Bu-

charest and forming a human chain around the Palace of the Parliament built by late Communist leader Nicolae Ceausescu. There were also large-scale protests Saturday evening in the cities of Cluj, Timisoara, Sibiu, Constanta and Brasov and more planned for Sunday. The Social Democrat-led coalition government has come under huge pressure at home and abroad to repeal the emergency decree it passed on Wednesday without Parliament input, which critics say will drastically weaken an anticorruption fight widely praised by

Romania’s Western allies. Grindeanu said the proposal would be sent to Parliament for debate, a move that is not likely to appease all protesters. One protester, Florin Dutu of Bucharest, said he wasn’t totally satisfied with the development but said it was important government understood the determination of the people. “Romania is a strong democracy. People are on the streets and you cannot avoid doing the right thing,” he said. Presidentia l spokeswoman Madalina Dobrovolschi called the development “a step toward normality”. The Constitutional Court was expected to rule next week on whether the measure violates the constitution. The ordinance decriminalizes official misconduct if the funds involved are less than 200,000 lei ($47,800), which critics said would just encourage officials to steal on the job up to that point. Grindeanu said he would consult with other parties about scrapping

$47,800

The Romanian ordinance decriminalizes official corruption with funds involving less than this amount the monetary threshold. Liviu Dragnea, head of Social Democrats, is one of those who would have benefited from the new decree. He is banned by law from serving as prime minister because he was handed a two-year prison sentence in April 2016 for voterigging. Adults came to the protest Saturday in Bucharest with their children or dogs, stressing the peaceful nature of the rally to fight corruption. Cristian Busuioc came with his 11-year-old son. “I want to explain to him...what democracy means, and the way the ones who govern must create laws for the people and not against them or in their own interest,” he said. AP

Rebels: Commander killed in Ukraine car bombing

VDIIVKA, Ukraine—A top rebel commander in eastern Ukraine was killed along with another person when their car exploded, rebels said on Saturday, blaming Ukraine’s special services for the blast. Ukraine’s military, meanwhile, said three soldiers were killed in shelling over the past day. Fighting between government forces and Russia-backed separatist rebels has escalated over the past week in eastern Ukraine, killing at least 33 people, including civilians, and wounding several dozen. More than 9,800 people have died since the war began in April 2014. The rebels’ Lugansk Information Center reported on Saturday that Lugansk People’s Militia com-

mander Oleg Anashchenko died in the explosion along with an unnamed person. Ukrainian President Petro Poroshenko spoke late on Saturday with President Donald J. Trump, who he said expressed “deep concern” over the escalation. The surge in violence began the day after Russian President Vladimir Putin spoke by telephone with Trump for the first time since Trump entered the White House. Poroshenko has cast the outburst of fighting as an argument for continuing Western sanctions imposed on Moscow for its actions in Ukraine. During Saturday’s call, a statement issued by Poroshenko’s office said the two leaders “noted the urgent necessity of establishing a

complete cease-fire.” The Ukrainian president thanked Trump for his “strong support for the sovereignty and territorial integrity of Ukraine.” The White House said Trump had a “very good call” with Poroshenko. “We will work with Ukraine, Russia, and all other parties involved to help them restore peace along the border,” Trump said in a statement. The government-held town of Avdiivka, just north of the main rebel-controlled city of Donetsk, has been the focus of the fighting. A temporary cease-fire had been called to allow workers on both sides to restore electricity to freezing residents as shelling eased for much of the day. But the Ukrainian military said rebel

forces began a mortar barrage of Avdiivka in the evening. The daily shelling has left locals in the industrial town of about 35,000 traumatized. Olga Duzhikova’s apartment was hit by a shell. “I lost my head. I don’t know what I felt—I took my kids to hide them and I was waiting for someone to help me leave the place,” she said. Trump’s repeated promises to improve relations with Russia have fueled concern in Ukraine that Washington would back off some of the sanctions. But the new US ambassador to the United Nations, Nikki Haley, has said sanctions imposed for Russia’s 2014 annexation of Crimea will remain. AP

China hits Mattis’s remarks on East China Sea island

EIJING—The United States is putting regional stability in East Asia at risk, a Chinese spokesman said, following remarks by President Donald J. Trump’s defense secretary that a US commitment to defend Japanese territory applies to an island group that China claims. Chinese Foreign Ministry Spokesman Lu Kang on Saturday called on the US to avoid discussion of the issue and reasserted China’s claim of sovereignty over the tiny uninhabited islands, known in Japanese as the Senkaku and Chinese as Diaoyu. The 1960 US-Japan treaty is “a product of the Cold War, which should not impair China’s territorial sovereignty and legitimate rights,” Lu was quoted as saying in a statement posted on the ministry’s web site. “We urge the US side to take a responsible attitude, stop making wrong remarks on the issue involving the Diaoyu islands’ sovereignty, and avoid making the issue more complicated and bringing instability to the regional situation,” Lu said. On his first trip to Asia as secretary of defense, Mattis explicitly stated in Tokyo that the Trump administration will stick to the previous US stance that the US-Japan security treaty applies to defending Japan’s continued administration of the Senkaku islands. The islands that lie between Taiwan and Okinawa were under US administration from the end of World War II until their return to Japan in 1972. China cites historical records for its claim, and Japan’s move to nationalize several of the islands in 2012 set off anti-Japanese riots in China and prompted the government to dispatch ships and planes to the area around them as a challenge to Japanese control. AP

www.businessmirror.com.ph

Louvre reopens as attacker is identified

ARIS—The Louvre in Paris reopened to the public on Saturday morning, less than 24 hours after a machete-wielding assailant shouting “Allahu Akbar!” was shot by soldiers. In drizzly weather, tourists filed by armed police and soldiers outside the central Paris museum, which had been closed immediately after Friday’s attack. The attacker was shot four times after injuring a soldier patroling the underground mall. An Egyptian interior ministry official confirmed to The Associated Press on Saturday the identity of the attacker as Egyptian-born Abdullah Reda Refaie al-Hamahmy, 28. The official said the initial investigation found no record of political activism, criminal activity or membership of any militant groups at home. The official spoke on condition of anonymity because he was not authorized to brief the media. Tweets about a trip from Dubai to Paris were sent from the Twitter profile of an Abdallah El-Hamahmy on January 26. In the profile photo, the man is seen smiling and leaning against a wall in a blue-and-white sports jacket. In another tweet, the user went on a tirade, posted: “No negotiation, no compromise, no letting up, certainly no climb down, relentless war.” The assailant remains in grave condition in a hospital, according to French authorities who have yet to confirm the identification. Louvre visitors expressed mixed feelings on Saturday on the incident with some tourists planning to leave Paris earlier than planned. “We heard on the news that a terrorist attack took place....We stayed at the hotel and we’re thinking about cutting our vacation in Paris short,” said Lucia Reveron from Argentina. Others were stoic and felt safe because of the heightened security presence. “I went around yesterday, in the evening, and security was everywhere. Even now when we arrived [at the Louvre] we were checked and it’s secure. I don’t feel any threats,” said Kurt Vellafonde from Malta. With the spate of attacks on the country in the last couple of years many permanent residents have become resilient, even blasé. “There have been very good security measures taken, and it does not scare me at all,” said Regine Dechivre, laughing. “It’s the phenomena of a person a little bit disturbed. The investigation will tell us what exactly happened,” she added. The United Arab Emirates (UAE) condemned the attack after a French official said Friday night that the attacker was believed to have been living in the UAE. UAE officials offered no comment on Saturday about his possible connection to the country. The country, which includes the Mideast commercial hub of Dubai, is a major destination for guest workers from Egypt and numerous other countries. Foreign residents outnumber native Emiratis roughly four to one. “The UAE, while strongly condemning this hideous crime, affirms its full solidarity with the friendly French Republic in these circumstances and its support for whatever measures France may take to preserve its security and safety of its citizens and residents,” the Ministry of Foreign Affairs and International Cooperation said in a statement. The ministry called for an intensification of international efforts to fight extremism and terrorism, and praised French soldiers for their response to the attack. AP

Green Monday BusinessMirror

A12 Monday, February 6, 2017

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

A materials-recovery facility in Taytay, Rizal. File photo

Govt, green groups clash on WTE deals By Jonathan L. Mayuga

@jonlmayuga

hile pursuing the strict implementation of Republic Act (RA) 9003, or the Ecological Solid Waste Management Act of 2000, the government is also looking at a quick-fix solution—by converting garbage into energy—to address the looming garbage and energy crisis in the Philippines.

Environmental groups, however, said the waste-to-energy (WTE) scheme is not the way to go. They said WTE would neither address the environmental and health problems caused by garbage, nor will it provide sustainable energy supply, like solar or hydroelectric power. With its population of 105 million, the Philippines produces 40,000 tons of garbage a day, equivalent to 14.6 million tons of garbage a year. With the huge volume of garbage produced every day and the failure of concerned local government units (LGUs) to enforce RA 9003, a senior official of the Department of Environment and Natural Resources (DENR) considers garbage as potential source of methane fuel or electricity using various WTE technologies. While environmental advocates are strongly opposed to WTE, the DENR and the National Solid Waste Management Commission (NSWMC), through its secretariat are finding a common ground to avoid conflict, particularly on the use of waste incinerators, which is prohibited under RA 8749, or the Clean Air Act.

PHL-Japan WTE partnership

As early as October 2016, DENR officials, led by Undersecretary for Foreign Assisted and Special Projects Jonas Leones and counterpart officials from the Japanese government, were discussing the potential of WTE in the Philippines.

During a visit in the Philippines last November, Japan’s Ministry of Environment, led by Shigemoto Kajihara, vice minister for global environmental affairs, met with Leones to strengthen the strategic partnership between the two countries on waste management, especially on WTE. The two countries are eyeing Quezon City and Davao City as potential pilot sites. They are mulling over to start this year at least eight more similar projects in various parts of the country. T he p a r t ne r s h ip i nv ol v e s suppor t from Japan cities and pr ivate companies.

Finding a common ground

As the use of incineration is the biggest hurdle in the implementation of WTE projects, officials of the DENR and NSWMC backing WTE insisted that not all incineration, are bad and will cause adverse impact to the environment. They also insisted that there are now advance WTE technologies that do not require the use of incinerators. Accord ing to Env ironment Secretar y Regina Paz L. Lopez she is keen on allowing WTE under her watch on the condition that the technology will not use waste incinerators. “As long as it is not incineration, because that [incinerators] pollute. But there are [advance] technologies,” Lopez said. Chuck Baclagon of 350.org said as long as WTE will not involve

combustion or incineration technology the government and his group will find a common ground. He said that for 350.org, the anaerobic biodigestion-type technology is acceptable. The technology uses micro-organisms to hasten decomposition to allow faster recovery or harvest of methane. “It has no emission unlike incineration,” he said. While passi onate about waste reduction through recycling, Lopez added that, if properly implemented, WTE has the potential to address the country’s garbage problem. Lopez recently ordered Quezon City Mayor Herbert Bautista and Cebu City Mayor Tomas Osmeña to permanently close their respective city’s sanitary landfills to prevent water pollution. The Payatas Sanitar y Landfill is near the La Mesa Watershed, where water from Angat and Ipo dams are stored for treatment before distribution a s t ap w ater for 12 m i l l ion people living in Metro Manila. Situated in a reclaimed area, the Inayawan Sanitary Landfill in Cebu City was the subject of a Court of Appeals Special 19th Division closure order.

Legal basis

NSWMC Resolution 669, adopted on June 9, 2016, provides for the “Guidelines Governing the Establishment and Operation of WTE Technologies for Municipal Solid Wastes,” paving the way for the use of WTE. Among the WTE technologies allowed under the guideline are gasification, pyrolysis, bioreactor, biomethanation, hydrolysis, pyrolytic gasification, plasma and other thermal processes. “ These technologies do not use incinerators. There are a number of waste-to-energy technologies that we can adopt to reduce GHG [greenhouse gases] and convert garbage into energy,” NSWMC Executive Director Ely Ildelfonso said. On the other hand, Leones, a lawyer, said there is already a legal basis for the application of WTE, even with the use of incinerators. Citing the case of Metropoli-

tan Manila Development Authority (MMDA) v. JanCom Environmental Corp. (SC), wherein the Supreme Court said “not all incineration violate the law,” Leones had insisted that not all incineration technology is illegal. “Incineration [technology] that complies with emission standard is allowed,” Leones said. He added that over the years, the DENR has been investing on capacity-building by training Environment Management Bureau (EMB) employees in the use of the most sophisticated laborator y equipment to measure dioxin and furans. The dioxins/furans laboratory at the DENR-EMB is currently being calibrated and will be ready for use by March. Paeng Lopez of Campaigner for Healthy Energy Initiative of Health Care Without Harm Asia, a member of Stop WTE Alliance, debunked the claims of the DENR and NSWMC that there is a SC order “legalizing” incinerators in the application of WTE technologies. Lopez said Leones and Ildelfono use WTEs and incinerators interchangeably. He said the WTE guideline was approved in a haste to “legitimize waste burning.” Quoting the SC order regarding the case MMDA v. JanCom, Lopez said Section 20 does not absolutely prohibit incineration as a mode of waste disposal; rather, only those burning processes which emit poisonous and toxic fumes are banned. “If I remember it right, the World Health Organization US EPA [Environment Protection Agency] and EU consider every WTE burn process that NSWMC peddles such as pyrolysis, gasification, and plasma arc, as waste incineration. There is no waste burning process any where in the world that does not absolutely emit poisonous and toxic fumes,” he said.

Silver bullet?

With the failure of most LGUs to fully enforce the solid waste management law, Leones and Ildelfonso are one in saying that WTE is the country’s best option to address the looming garbage crisis.

Leones likened WTE to “hitting two birds with one stone” because it will not only address the garbage problem, it will also help “energize” the country and lessen the country’s dependence on coalfired power plants. Ildelfonso said the government has been relentless in pushing for the implementation of the garbage law, but with little very little success. He said proper waste segregation, recycling and composting has the potential of reducing waste by 75 percent, leaving 25 percent residual waste. On the other hand, WTE, which uses incineration, he said, can eliminate garbage by up to 95 percent.

Poor implementation, law enforcement

Nevertheless, the NSWMC is not giving up on its mandate to oversee the implementation of R A 9003. Last year a total of 600 local officials from 50 LGUs were slapped with criminal and administrative complaint by the Office of the Ombudsman for failing to enforce RA 9003, mostly for failing to close open dumps and controlled dumps in their respective localities. Around 3,000 local officials belonging to 300 LGUs failed to enforce the law are facing the same fate. Most of those facing charges also failed in proper waste collection, segregation, recycling and disposal. Ildelfono said uncol lected wastes are either burned in backyards, or dumped in vacant lots and unused lands. A huge chunk of garbage end up being swept away during f loods, clogging esteros and rivers in the process. Aguilar of Greenpeace said green groups are one in opposing WTE. She said various studies suggest that WTE is not a solution to garbage problem. “There are many WTE proponents coming in. This is alarming. During the Zero Waste Month celebration, we were told that some WTE companies were there, and even had booths,” she said.

Real solution

Waste and pollution watchdogs

opposed to WTE and Abigail Aguilar, Greenpeace’s toxic and waste campaigner, ex pressed alar m over the government’s plan to promote WTE. “Properly implemented, waste segregation, recycling and composting will address the garbage problem,” Aguilar said. She insisted that the DENR, NSWMC and LGUs should enforce Republic Act 9003 to the letter and the problem on waste will go away. A member of Stop WTE Alliance agreed with Aguilar that WTE is not the solution or the silver bullet that will kill the monster created by human apathy. “We cannot win our perpetual battle with trash unless we temper the sinister buy-and-throwaway culture in our midst. WTE technologies that burn resources, which are better recycled in a nontoxic way, will only lead to the further exploitation of the ecosystems and the generation of more waste to keep these facilities profitably running,” the Stop WTE Alliance said. The alliance wants NSWMC’s g uidelines for t he establishment a nd operat ion of W T E technologies repealed and, instead, have susta inable zero waste strategies mainstreamed. Citing the opinion of environmental scientist Dr. Jorge Emmanuel, adjunct professor at Silliman University, the alliance believes that there is no such thing as “clean incineration.” Emmanuel had said all incinerators release toxic particulates; toxic gases, such as carbon dioxide and carbon monoxide; toxic metals, like lead and mercury; and other pollutants in addition to dioxins.” In lieu of W TE technologies that terminally destroy resources and release toxic environmental pollutants, Stop W TE A l liance said the gover nment and the pr ivate sector shou ld invest in “rea l solutions,” such a s i nt e n s i v e s e g re g at io n at s ou rc e , comp o s t i n g a nd re c yc l ing , e x tended producer responsibilit y, and clean production to prevent and reduce garbage volume and toxicit y.

Biodiversity Monday BusinessMirror

Asean Champions of Biodiversity Media Category 2014

Monday, February 6, 2017 A13

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

Biodiversity office calls: Protect Tañon Strait

he Department of Environment and Natural Resources (DENR), through its Biodiversity Management Bureau (BMB), called for the protection of Tañon Strait against commercial fishers, and emphasized that overfishing could lead to ecosystem collapse. “We believe that commercial fishing in an unsustainable manner is one of the major threats to our marine environment. Overfishing, as one of the many negative environmental consequences, is a primary cause of species extinction and ecosystem collapse,” DENR-BMB Director Mundita G. Lim said in a letter addressed to Oceana. The bureau expressed concern over the proposed moratorium on commercial fishing ban in the Tañon Strait Protected Seascape, one of the largest marine protected areas in the Philippines. Some local government officials in Cebu initiated the proposal, which, if approved, will allow commercial fishing within municipal waters, beginning at 10.1 kilometers from the coast. Municipal waters include biologically impor tant near-shore areas, where mangroves, seagrass and coral reefs thrive. Near-shore areas ser ve as the nesting and breeding ground for f i s h a n d o t h e r m a r i n e o rg a n i s m s . “A s managers of the seasc ape, our positions and decisions will always consider sustainable management of the area, wherein the overall health of the vulnerable marine resources should not be jeopardized and the community benefits will be ensured,” Lim said. Tañon Strait is a critical marine habitat and important migratory path for 14 of the 27 species of whales and dolphins in the Philippines. It boasts of at least 90 species of fish, 20 species of crustaceans, 26 species of mangroves and 18,830 hectares of coral reef. The rare chambered nautilus, giant diamond-backed squid and critically endangered dugong can also be found in its waters. It is also a rich fishing ground for artisanal or municipal fishers who live along the coastal areas within the 42 cities and municipalities in the provinces of Cebu, Negros Oriental and Negros Occidental. “Oceana is firm in its stand that commercial-fishing activity is prohibited in marine protected areas. It is clearly defined in the National Integrated Protected Area System [Nipas] Act, in the Amended Fisheries

Code, and supported by the Tañon Strait General Management Plan,” said lawyer Gloria Estenzo Ramos, vice president for Oceana Philippines. Ramos said commercial fishers continue to enter and illegally fish in municipal waters in a lop-sided competition with the municipal fisherfolk for the declining fish stock—marginalizing them further, the fisherfolk being among the poorest of the poor in the Philippines. “Allowing the commercial fishing activity is not only unlawful, it also violates and is, in fact, an abdication of the mandates of the various agencies, including local government units [LGUs], of the shared responsibility to maintain a healthful and balanced ecology, protect our marine wealth and ensure that the livelihood of our suffering small fisherfolk will not be impaired further,” Ramos added. The DENR-BMB also echoed the need to give preferential access to municipal fisherfolk, who are allowed to use passive or nondestructive fishing gears—such as hook and lines, fish traps and crab pots—within municipal waters and consider Tañon Strait their fishing areas for decades. “The marginalized fishermen should be given preferential access to their traditional fishing grounds and should not be limited by the technological capacities of the commercial fishers,” Lim said. She also said the DENR-BMB, through the Protected Area Office (PAO) of Tañon Strait, would closely coordinate with LGUs to address the issue on commercial fishing. The PAO of Tañon Strait, along with LGUs, fisheries bureau and other national enforcement agencies, are collaborating in the seaborne patrol operations and apprehension of commercial fishers as part of the strengthened enforcement measures to deter illegal and destructive fishing within the protected seascape. The Department of Agriculture (DA), likewise, is strengthening the fight against illegal fishing. Agric ulture Secretary Emmanuel F. Piñol committed to recommend to President Duterte the suspension of local government officials who fail to stop illegal fishing in their areas within six months. Duter te will award the countr y’s outstanding coastal communities, which search the DA launched last year. It includes a successful campaign against illegal fishing among the criteria.

Where are the trees? Not in Paris, Treepedia finds

OSTON—Where are the trees? More important, where aren’t the trees? A lab at the Massachusetts Institute of Technology (MIT) is helping some of the world’s cities answer both questions in an attempt to make them more pleasant places to live and work. In an effort to enhance the critical role trees play in urban environments— providing cooling shade, alleviating air and noise pollution and easing the effects of climate change—the school’s Senseable City Lab has developed an online platform that maps out the canopy in some major cities to make it easier for urban planners and ordinary citizens to see where more are needed. The project, called Treepedia, uses Google Street View to create what the MIT team calls the Green View Index. Trees block shortwave radiation and increase water evaporation, creating more comfortable microclimates and mitigating air pollution, lab Director Carlo Ratti said. But they also just make people feel better, Ratti said, channeling Harvard biologist E.O. Wilson’s biophilia theory that humans innately seek out connections with nature. “W, as humans, have a natural willingness and desire to be in green spaces,” he said. The interactive web site gives bird’s eye views of 15 cities, with trees represented by green dots. Users can zoom into a particular neighborhood or individual street to see ground-level images. The City of Lights apparently isn’t the city of trees. Of the cities mapped so far, Paris scores lowest with a Green View Index score of 8.8 percent. North American cities tend to score higher than European cities. Singapore,

however, ranks the highest with a 29.3-percent score, slightly ahead of Vancouver, British Columbia. The other cities mapped so far are Amsterdam; Boston; Frankfurt, Germany; Geneva, Switzerland; London; Los Angeles; New York; Sacramento, California; Seattle; Tel Aviv, Israel; Toronto; and Turin, Italy. More cities are being added. “In the future, the goal of this project is to start a conversation, so that cities can see how they compare with one another and how they can learn from each other,” Ratti said. He also hopes ordinary citizens will use the web site to check out their own homes, and advocate with municipal officials for more trees in their neighborhoods. The project was inspired by the World Economic Forum’s Global Agenda Council on the Future of Cities, which included increasing tree canopy cover on a list of top 10 urban innovations. “We hope that this endeavor will give citizens a greater appreciation of their city’s green canopy and appreciate that the green canopy can assist in responding to climate change,” Council Manager Alice Charles said in a statement. The project’s maps aren’t perfect. It appears as if there are no trees in some of the world’s most famous parks. New York’s Central Park, Boston Common and London’s Hyde Park appear as large black swaths of nothing—probably because Google Street View vehicles can’t get into those areas. Ratti hopes to eventually fill those gaps using satellite data, but adds that cataloging street trees is the project’s primary goal. “Streets are important, because that’s where we spend most of our time,” he said. AP

Philippine Coast Guard (PCG) personnel participate in the demolition of illegal fish pens and cages in Laguna de Bay on January 26. Joining them are the Philippine National Police and the National Bureau of Investigation. DENR Strategic Communication and initiative Service

Govt eyes stakeholders’ help to ‘revive’ Laguna de Bay

By Jonathan L. Mayuga

@jonlmayuga

he Department of Environment and Natural Resources (DENR) and the Laguna Lake Development Authority (LLDA) are eyeing to tap various stakeholders within the Laguna de Bay region to help revive the country’s largest freshwater lake.

Environment Undersecretary Arturo T. Valdez, also the National Anti-Environmental Crime Task Force (NAECTF) head, said reviving the lake to make it productive once more begins with clearing the lake of illegal fish pens and fish cages. He said the ambitious target to clear the lake’s surface by June 2017 is possible only with the help of various stakeholders. Disappointed by the progress of the ongoing demolition of the illegal structures in Laguna de Bay, which started on January 26, the official said they are now looking at tapping people living in communities near the Laguna de Bay. He said the DENR and LLDA, led by newly appointed General Manager Jaime Medina, will meet this week to work out a plan that will hasten the on-going demolition of fish pens and fish cages within the Laguna de Bay. Medina, who took over as general manager of the LLDA on Monday last week, said they target to clear the lake’s 2,000 hectares by the end of year.

2,000 ha The area of Laguna de Bay that the Laguna Lake Development Authority is targeting to clear Valdez said that, while LLDA’s target is realistic, the NAECTF’s goal is to clear the lake of all illegal fish pens and cages by June 2017. “It [demolition] is too slow. I am disappointed. We need to [hasten] the demolition to meet our target to clear [the lake of] all illegal structures by June this year,” Valdez said. He said the demolition crew has been removing fish pens and fish cages since January 26, but said the job will be a lot faster with small fishermen helping in the operation. According to the Bureau of Fisheries and Aquatic Resources (BFAR) data, there are 23,678 registered fishermen who regularly catch fish within Laguna

de Bay as of 2016. During the first day of the dismantling of illegal structures, the LLDA was able to remove two fish pens only, effectively clearing 100 hectares of the lake’s surface. “We still need to the meet [Medina] to work things out. But definitely, fishermen who will take part will receive something for helping demolish fish pens and fish cages,” Valdez said. He a l s o s a id he h a s a l s o reached out to at least five bishops in the dioceses around the Laguna de Bay region to help accomplish the task. Valdez said the only way to revive the Laguna de Bay is by stopping the operation of fish pens and fish cages. That way, he said, small fishermen would have more areas to cover to fish. “If the community will help us, the demolition will be a lot faster,” he said. He added that abandoned fish cages and fish pens would be the first to go. Valdez said operators of fish cages and fish pens are welcome to voluntarily demolish their fish pens and fish cages after ha r vest ing t heir stoc k s. He, however, warned that all fishcage operations must abide by the fish-cage operation moratorium ordered by Environment Secretary Regina Paz L. Lopez. The Laguna de Bay, the countr y’s largest freshwater lake, is also the biggest aquaculture hub in the countr y, with over 13,000 hectares of its 90,000 hectares surface area being utilized to raise bangus (Milk fish) and tilapia. T he estimated annual fish output from fish-cage and fish-

pen operations in 2015 was recorded at 62,915.91 metric tons (MT), according the Philippine Statistics Authority (PSA). This is twice the 36,185.29 MT of fish caught in open waters during the same period. Most bangus and tilapia supplies in the local market in Metro Manila and around the Laguna de Bay came from the bay, fanning fears that the price of the two most common and affordable fish in the market will go up in the ensuing months as supply might go down. The number of fish cages and fish pens within the Laguna de Bay swelled since the 1970s because of its popularity among businessmen, who took advantage of the government’s policy to promote food security. According to LLDA, only municipal fishing is allowed in Laguna de Bay, but commercial fishing in deep sea, where the depth is beyond 7 meters, is also allowed. Last December, taking the cue from President Duterte, Lopez ordered a one-year moratorium in the building of fish pens and fish cages in the area. Since last December, the DENR has not renewed the permits of fish-cage and fish-pen operators, making the operation illegal. This effectively stopped the operation of 223 fishing companies, 14 cooperatives and 117 individuals with permits to operate prior to the moratorium. The DENR, through the NAECTF chief, vowed to spare fish traps, or baklad, built by small fishermen to boost their daily fish catch. However, Valdez said he would have to meet with baklad operators for regulatory purposes.

A14 Monday, February 6, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Fake news affecting elections?

ISTORTED and blatantly false news items appearing through the Internet have been with us for years. It seems as if any time there is a large rainstorm, pictures from the 2009 Tropical Storm Ondoy flooding appear to prove a particular agenda from government inaction to “prove” some evil organization has found a way to manipulate the weather. But now we have a label for this: Fake news. It is all fun and games until the public’s perception of what is actually happening is twisted and actions are taken that could be counterproductive and utterly foolish. Notice that at every gas station there is an ominous warning to turn off your cell phone, required by law through the efforts of misinformed legislators who failed to do any research. The US Federal Communications Commission completely agrees with the Cellular Telecommunication Industry Association that “there is no evidence whatsoever that a wireless phone has ever caused ignition or explosion at a station anywhere in the world”. But why let facts get in the way of a good story, a good fake news story. The increasing intrusion of the Internet, and especially social media, into the election process came to maturity in 2016. US presidential candidates—across all platforms, including Facebook, Twitter, YouTube and Instagram—had “followers” equal to over 10 percent of the total votes cast. In addition to the traditional opinion polls, numbers of “Likes”, “Retweets”, “Views” and “Subscribers” were also figured into the opinion polling equation. “Fake news” stories—previously called propaganda, which by definition is of a biased or misleading nature—have been frequently cited as having been a factor in both the Philippine and US elections. Interestingly, it is the losing candidates that make this claim. Will we see a day when the winning candidate says, “Yes, fake news got me elected, only showing how dumb the electorate really is”. But is there any evidence to show that fake news was a significant factor? A study by researchers at Stanford and New York University shows that fake news stories favorable to Republican nominee Donald J. Trump far outnumbered similar stories about Democrat nominee Hillary Clinton. However, only 8 percent of voters actually read those stories, and even fewer recalled or believed what they were reading. “Our data suggest that social media were not the most important source of election news and even the most widely circulated news stories were seen by only a small fraction of Americans,” lead researchers Hunt Allcott and Matthew Gentzkow wrote. In order for a fake news item to have had a genuine effect on the election, it would have had to have been as persuasive as 36 television ads, the study concluded. The key then was not only the amount of exposure but also the believability. Both researches are with the National Bureau of Economic Research, a highly credible 90-year-old think tank. The takeaway from the study might be summarized as that the people are not as ignorant and easy to fool as the media might think. And it was the US press and media that pushed the “fake news helped cause the election results” narrative. But then again, both candidates and news organizations have tended to disrespect voters and election outcomes. Since 2005

BusinessMirror A broader look at today’s business

PHL hosts Asean Summit this year Atty. Jose Ferdinand M. Rojas II

RISING SUN

N the midst of recent developments in America, Russia and China in relation to the country’s economy, it would be interesting to witness how the Asean Summit would unfold this year. The Philippines holds the chairmanship for 2017. Former Ambassador and Foreign Affairs Undersecretary Lauro Baja Jr. said the chairmanship is an opportunity for the Philippines to highlight its own issues, including the war on drugs, terrorism and the South China Sea dispute. The latter is a growing concern among Asean leaders, as they have been calling for a peaceful resolution to the disputes.

The 2017 summit also marks Asean’s 50th founding anniversary. As one of the five founding members, the Philippines helped give birth to Asean, together with Indonesia, Malaysia, Singapore and Thailand. The theme this year is “Partnering for Change, Engaging the World”. For Foreign Affairs Secretary Perfecto R. Yasay Jr., the Asean Summit is an “opportunity to further strengthen ties within the region.”

Aside from delegates from the member-nations, leaders from the US, China and Japan are also expected to attend the summit. The country is spending around P15.4 billion for Asean-related activities. This amount will be distributed to five agencies: the Office of the President; the departments of Tourism, the Interior and Local Government, Trade; and the Presidential Communications Office.

Inflation strikes back

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PAUL DONOVAN

Jun B. Vallecera

NFLATION is back. Low oil prices dragged down headline inflation rates in recent years, creating a low inflation illusion. Crude oil is not directly part of consumer spending—pouring a barrel of crude oil into the engine of your car will have negative consequences. However, consumers indirectly buy crude oil as gasoline, airline tickets (aviation fuel) and food (diesel-powered delivery trucks). The prices of gasoline, airline tickets and food are in consumer-price inflation. Crude oil is embedded in these prices. Crude oil generates about 5 percent of a developed economy’s consumer-price basket. In recent years the price of crude oil fell about 75 percent from peak to trough—obviously impacting headline inflation. Domestic labor costs generate about 70 percent of a developed economy’s consumer-price basket. This is obvious for service prices; legal fees are nearly all labor costs. However, domestic labor costs also affect imported goods prices. Import prices are increased by the costs of a shop assistant, advertising executive, or truck driver—domestic labor costs. As labor costs rise, firms either accept a lower profit margin or attempt to pass on higher labor costs

to their customers by raising prices. Now that oil prices have stopped falling, labor cost pressures on inflation are more obvious. The return of inflation is not straightforward, however. There are three complications. 1. Where you are matters Domestic labor costs are created by domestic economic circumstances. Inflation is a local issue. This is why Venezuela had hyperinflation at exactly the same time Switzerland had deflation. Now that oil prices have stopped falling, Germany and the United States (with higher wage pressures) are likely to experience stronger inflation. Greece (with fewer wage pressures) is likely to experience subdued inflation.

Apart from hosting the summit itself, the country will also be staging events to celebrate the organization’s anniversary. The Office of the Asean Affairs of the Department of Foreign Affairs said there are more than 100 Asean meetings to be held nationwide, including Metro Manila, Laoag, Pampanga, Legazpi, Palawan, Boracay, Cebu, Iloilo, Bacolod, Bohol, Cagayan de Oro and Davao. Two are leaderslevel summits, plus 15 ministerial meetings, 31 senior officials meetings and more than 60 workinggroup meetings. It is important that Filipinos understand the relevance of Asean in their lives so they can respond to the call of the President to “partner with the government during this year’s chairmanship.” He had said that “Now more than ever, it is our spirit of bayanihan that helps define us as a responsible leader of our region during this crucial time.” Proper information dissemination through the right channels, especially through social media, is crucial so that more Filipinos will understand the relevance of the summit and get to see the impact

2. Equities are not inflation proof Not all companies listed on equity markets have the same pricing power. Thus, not all equities hedge inflation risks. Most companies sell to other companies, not consumers; it is producer prices not consumer prices that matter for corporate pricing power (the retail sector is the exception). If taxes or tariffs raise consumer prices, earnings for companies that sell to other companies receive no benefit. Inflation also varies by sector. Housing, health care and education are 45 percent of the US consumer-price basket, but are far less important in the basket of US equities. Indeed, rising prices for housing, health care and education may leave consumers with less income to spend on other products. Pricing power in health care could reduce spending on leisure, for example. Leisure sector stocks would not hedge health-care inflation. 3. Who you are matters Different consumers buy different things. The spending pattern of the elderly is different to that of the young. The spending pattern of highincome groups is different to that of low-income groups. Generally, the inflation rates experienced by the lower income or the older consumers are above average; it is cheaper to be young and rich, if you can manage it. Inflation inequality has political implications. Lower-income groups “left behind” by prosperity may feel

that it has on their lives. There is a need to raise the level of awareness among the sectors of society on the benefits of a united Asean. Thus, the importance of using social media for wider information dissemination. I wouldn’t be surprised to find out that a lot of Filipinos know close to nothing about the Asean. The information campaign needs to be given priority so that ordinary citizens may be turned into stakeholders. Apart from that, economic policies and decisions will be made that will affect their business and employment in a very real way. It is only proper that people are informed about what is going on in the region as far as economic, political and sociocultural changes are concerned. nnn

TODAY we also remember former President Benigno “Noynoy” S. Aquino III, the country’s 15th president, who is celebrating his birthday on February 8. The country is grateful for the service and leadership of President Noynoy and we wish him good health and happiness for the years to come.

that their standard of living is not improving if inflation inequality continues. If trade protectionism disproportionately increases the prices of goods purchased by lowerincome groups, the subsequent inflation inequality could undermine the living standards of those who supported political populism in the first place.

Living with inflation

2017 is the year that inflation emerges from the shadow of the low oil price. Investors, rightly, need to consider what rising inflation indices mean for their portfolios. However, inflation is not a simplistic concept. The nuances of inflation may be its most interesting aspect as the world returns to the old normal of accelerating price increases. Paul Donovan’s latest book The Truth About Inflation was published by Routledge in April 2015. Visit www.ubs.com/pauldonovan for more research. Paul’s commentaries in the UBS series of documentaries on Nobel Laureates in economics is available at www.ubs.com/nobel Donovan is the managing director and deputy head of global economics of Zurich-headquartered UBS. He is responsible for formulating and presenting the UBS Investment Research global economic view, drawing on the bank’s worldwide resources. Donovan took up philosophy, politics and economics at Oxford University. He holds an MSc in financial economics from the University of London. In the Philippines his column will appear exclusively once a month in the BusinessMirror.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Monday, February 6, 2017 A15

Jury System: The answer to EJK? PRA highlights PPPs and G2G for Legacy Islands on Water By Alberto Agra

Atty. Lorna Patajo-Kapunan

PPP LEAD

LEGALLY SPEAKING

INCE 2005, a campaign has been launched calling for the establishment of a Jury System in the Philippines. Principal proponent of the campaign is the Philippine Jury Campaign International (PhilJury, UK), one of the three organizations based in the United Kingdom urging for change in our judicial system. PhilJury argues the need to have a

Jury System in the Philippines since justice seems to favor the rich who can afford more competent lawyers and possibly influence the outcome of the trial. Their claim is that the present judicial system is wrong as there is only a single judge who is corruptible and not all knowing and all seeing. This leaves those who are poor at the losing end, unable to get justice at all. Another reason cited is the need to create an efficient and transparent judiciary process. A Jury System will allegedly prevent delays, discourage corruption and miscarriage of justice. The identities of the Jurors are kept secret for their protection against bribery and coercion. This campaign for a Philippine Jury System has intensified recently in the spate of extrajudicial killings (EJK). Apologists for the EJK maintain that it is the most efficient way to rid our society of criminals and scalawags, especially drug pushers who victimize our innocent countrymen. Since “Justice delayed is Justice denied”, EJK, which is swift and instant, is justified. Due process and the rule of law are set aside allegedly for the greater good. According to Amy Balilao, executive director of PhilJury UK, a Jury System “will show that legal justice is not just for the rich and powerful, but is equal and attainable for all Filipinos” (http:// www.psst.ph). The Jury System is a judicial process where a group of ordinary people are called by law to secretly investigate and decide serious and criminal cases brought to trial. It operates on the principle that one has the right to judge and be judged by his own peers or equals. The proposed Jury System shall consist of two separate types—“the Grand Jury” and the “Trial Jury”—with powers to decide independently from government control. The proposed Grand Jury shall serve as the voice of the people. It will be composed of 23 ordinary citizens/college graduates to be called jurors, who are chosen by lottery. They remain anonymous and shall serve for just six months. They have 45 days to decide with a fixed majority rule and by secret ballot if a probable cause exists. They will be formed in cities, provinces and regions for every 200,000 registered voters. As in our present criminal justice system, preliminary investigation is still done by the police, National Bureau of Investigation, Bureau of Internal Revenue, Ombudsman and other government agencies. But in the proposed P hilippine Jury System, it is the Grand Jury (not the Fiscal or Judge), which secretly investigates and decides if there is probable cause. If there is, the Grand Jury charges the suspect in court, where it then goes to a trial jury, which decides the case. The Trial Jury will be composed of 12 ordinary citizens, at least 21 years old, of average intelligence, who are randomly selected from the electoral register to participate in deciding the guilt or innocence of the accused in serious criminal cases. Their decision is final. The presiding judge does not participate in the decision-making. He is limited to enforce order in the court, rule on the admissibility of evidence, educate the Jurors on the laws involved in the case and their demeanor/duties as Jurors and sentences the accused if found guilty. Under the proposed Jury System, grand jurors shall be paid double the minimum wage and trial jurors paid minimum wage. PhilJury UK argues that our “slow legal system, with each case taking an average of six weeks (actually six months to six years from my personal experience) is due to a “one-man judge” per case. The Jury System, on the other hand, requires only approximately six days for each case, and even less for simple litigation. PhilJury UK claims that Trial-by-Jury is the legal standard for several countries, including Singapore, Hong Kong, Australia, the United Kingdom, Canada and the United States. The Jury System allegedly will improve the quality of legal justice in the Philippines by creating a more efficient and transparent judiciary process, reducing risks of delays, corruption and miscarriage of justice.

I am against the Jury System for the Philippines, for now, at least. We are not ready for it, for obvious reasons. The first is culture. Filipinos have a tendency to be swayed by emotion. Because of this, we cannot be expected to give a rational and logical decision on matters, like serious cases and crimes. The media is partly to blame in influencing minds of viewers. Usually, it is the victim’s side that is highlighted with emotion and drama. The accused is already found guilty even before the trial starts or the complaint is filed. This is mind-conditioning trial by publicity. Also, since the proposed Jury System will pick jurors by lottery from a list of 200,000 registered voters in the community, it is highly improbable for a Juror not to be related to the accused or the other party by consanguinity, affinity, or the kumpadre system (e.g., binyag, kasal, kumpirma, kaklase, kagolf, kabarilan). Objectivity can hardly be expected in such a situation. There is also a logical and financial aspect that augurs against the Jury System. This would mean reconfiguring existing courtrooms (which can hardly fit the judge, litigants, lawyers, witnesses and court records). With 12 trial jurors, no existing courtroom is big enough. How can the jurors expect to remain “anonymous” in such a small space. Also, the jurors need to be sequestered somewhere secure. They have to be billeted, fed and cared for and isolated from family, friends, relatives and, especially, the media (the traditional press and social media)—which means no cell phones. The ordinary Filipino will die without a cell phone. There is also the matter of allowances and per diems. Our Judiciary purportedly get the lowest salary in the region compared to their counterparts. Under the Jury System, the cost will be unthinkable considering the number of cases and number of jurors per case. No court case has a definite “ending” date. The case ends when it ends. UKbased proponents of the Jury System are of the mistaken belief that a case can be decided in six days. Maybe in the UK—but certainly not here—even under a Jury System. So the budget to maintain and compensate Jurors is not finite. On an operational level, the disposition of cases will be even more delayed by the jury selection process—initial selection from the voter rolls, prequalifying eligible candidates (citizenship, language, disabilities, etc.) summonses to those qualified for Jury duty, “voir dire” by the lawyers on the case, back up or replacement jurors if the selected are disqualified or refuse to serve, etc. To administer (and administrate) a Jury System, it needs a highly coordinated and well-financed framework to select and operate the Jurors to serve their duties. If a juror refuses to serve, there is the issue of whether the Juror can be penalized by fine, imprisonment or both, in the discretion of the court. Where do we jail these jurors? Our prisons are already so congested—hardened criminals are mixed with minor offenders. Prisoners take turns sleeping on the floor—some sleep standing up for lack of floor space. Furthermore, the Jury System is not perfect—it can also be prone to corruption. The Jury System does not guarantee fairness if the wrong people are chosen and they are already corrupted or are corruptible by reason of relationship, poverty, bias, prejudice, etc. The court just cannot pick 12 people from the list chosen by lottery then proceed with legal battles. Ordinary citizens (which is the only requirement) should be educated about the legal process, how it is carried out, the roles and expectations of a juror, how to appreciate facts and discern truth. Given these factors, among others, the Philippines is not yet ready to have a Jury System. Unless Filipinos can be socially and politically mature, capable of making rational decisions instead of being ruled by publicity or sentiment, display a sense of honesty, righteousness and integrity, appreciate the meaning of the rule of law, the Jury System will not happen in this country. There must be a better solution to extrajudicial killings.

Continued from A1

.R.A. hopes to sign similar collaborative agreements with the cities of Manila (for another project), Mandaue, Catbalogan, Naga (Cebu), Masbate, Sorsogon, Baybay, Ormoc, Samal and Panabo, and the municipalities of Consolacion and Tuburan (Cebu). PRA is set to sign an Expression of Partnership with the Metropolitan Manila Development Authority for a possible “green island” or solid waste-management facility. PRA plans to initiate discussions with the Department of Public Works and Highways, Laguna Lake Development Authority, Philippine Fisheries

Development Authority, Philippine Ports Authority, National Housing Authority, Civil Aviation Authority of the Philippines, Bases Conversion and Development Authority, Tourism Infrastructure, Philippine Retirement Authority, Subic Bay Metropolitan Authority, Philippine Veterans Investment Development

Corp., National Power Corp. and Union of Local Authorities of the Philippines, among others, for possible partnerships. All future LIoWs, which includes the 96 reclamation projects in the pipeline, must be liveable, resilient, safe, sustainable, green, generative, propeople, future-proofed and innovative, and a smart community. On LIoWs and related developments, built with nature, PRA envisions the integration or combination of economic zones, smart-community infrastructure, mangroves, flora and fauna ecosystems, renewable-energy facilities, coastal protection structures, green landscapes and blue water, socialized housing units, water collection systems, waste management methodologies, public access networks and mixed-used development, even sports facilities on LIoWs. All the possible LIoWs that are being eyed or will be considered by PRA cannot be built or funded by

Integrity is our middle name Dr. Conchita L. Manabat

DEBIT CREDIT

“An accountant is someone who solves a problem you didn’t know you had in a way you don’t understand.”—Anonymous

T this time of the year, the professional accountants are in their busy period for their companies/clients with business year ending December 31. The period from mid-December until the deadline for filing of income-tax returns may be considered as a “crazy period” for the accounting professionals. Accountants/auditors are professionals who deal with business source documents, records of transactions, spreadsheets, financial reports, analyses thereof and more. Long hours of work, objectivity, thoroughness and professional skepticism are a few of the words that describe the attributes of accountants/auditors. They put on the line their reputation as they do their tasks. From a strictly professional conduct of work, one can say the accounting profession is very straightforward—concepts and principles, as well as standards of accounting, auditing, code of ethics, business and tax laws and regulations serve as guideposts to these professionals. Oftentimes, accountants are described as reserved, introvert who

only appreciate numbers, and are not necessarily people persons. They are perceived as secretive as they are into the particulars of the businesses they work on and are bound by confidentiality. Some business scams and highprofile cases are peppered with dimensions or roles of accountants and auditors. On a lighter note, let me cite a significant high profile case and some interesting recent fictions. Alphonse Capone, the famous criminal who led the most profitable crime syndicate during the Prohibition era in the United States and mastermind of the notorious 1929 “Valentine’s Day Massacre”, was never indicted on his crimes but only on account of a tax case. Agent Frank J. Wilson, who was

the chief of the United States Secret Service at the time, was the former accountant who earned a reputation throughout prohibition as a thorough, if not obsessive investigator of tax returns and income, was persistent in going through the examination and audit of voluminous records; and thus, was subsequently able to establish a tax case against Capone. The lesson from the case is: “A profitable businessman, no matter how he earns his income does have to pay his taxes.” Recently, a movie entitled The Accountant showcased the story of an autistic man who is a forensic accountant described as one with affinity to numbers than people. Using as cover a small-town CPA office, his chief clients are major crime families. He is the man whom despots and drug kingpins the world over go to for their books. Then, he takes on a legitimate state-of-the-art robotics company where an accounting clerk has discovered discrepancy involving significant amounts. Engaged to “uncook the books”, and as he gets closer to the truth involving massive embezzlement, people start dying at the hands of hired assassins while the Federal Bureau of Investigation (FBI) is unable to stop the murders. I just finished reading Sting, the latest book of Sandra Brown, where an autistic accountant outwitted and stole $30 million from his ruthless notorious criminal boss. The twists

Canada, leading the free world Nicholas Kristof

NEW YORK TIMES

TTAWA—President Donald J. Trump’s harsh travel ban reflects a global pattern: All around the world, countries are slamming the doors shut.

One great exception: Canada. It may now be the finest example of the values of the Statue of Liberty. This isn’t just because Canadian leaders are particularly enlightened, although there’s some of that. It’s mostly because the Canadian people themselves remain astonishingly hospitable, with many groups clamoring for more Syrian refugees. “Thank you, Canada,” Omar al-Omar, a Syrian who was shot at age 15 as the war started, said to me at a center here where refugees are getting lessons in English and in Canadian habits, such as excruciating politeness. “I’m very happy. I feel welcome.” “I’m sad Arab countries aren’t doing enough for refugees,” Omar added. “I’m really happy Canada does what others don’t.” President Barack Obama admitted 12,000 Syrian refugees, triggering a furor and a backlash. Meanwhile, Canada, with a far smaller population,

has admitted 40,000 Syrians. Ahmed Hussen, Canada’s immigration minister, told me that one of the criticisms he faces from ordinary Canadians is that he’s not bringing in enough Syrians. And Hussen is himself an emblem of the country’s openness: He arrived at age 16 as a refugee from Somalia and now runs the ministry that once served him. “We want people to join the Canadian family,” he said, noting that the country is trying to figure out how to keep more foreign students from leaving after graduation. And his trajectory is not unique: Two of the last three governors general arrived as refugees, one from Haiti and the other from Hong Kong. Canada also noted last year that it had more Sikhs in its Cabinet than India did. Let’s be clear: Canada has xenophobes, too, and, indeed, six people were just killed at a mosque in Quebec. Its people are not intrinsically nicer or more tolerant than Europeans or Americans.

Historically, Canada had a “white Canada” immigration policy steeped in racism and xenophobia. In the late 1940s and early 1950s, 96 percent of immigrants were from Europe, and even Pierre Trudeau, who as prime minister championed tolerance, started out his career as a racist who joined an antiSemitic riot. Yet over the last 50 years, Canada transformed itself—because of determined political leadership, partly by Trudeau, whose son is today prime minister and extols similar ideals. Almost one-fifth of Canadians are what people here describe as “visible minorities”—mostly ethnic Chinese or people with roots in Africa or South Asia—and Muslims constitute three times the percentage of Canadians as of Americans. By 2036, almost half of Canadians are expected to be immigrants or children of immigrants. When I asked lily-white Canadians about their views on that, they looked puzzled and inquired, “And what’s the problem?” Canada’s leaders nurtured multiculturalism into a sacred part of the country’s identity. As the rest of the world bangs the doors shut, Canadians celebrate their openness—and, polls show, now take more pride in multiculturalism than in hockey. “The results in Canada have been spectacular,” Jonathan Tepperman noted in a recent book, The Fix, which explores government successes around the world, including Canada’s immigration policy. “They turned a small, closed, ethnically homogeneous state into a vibrant global powerhouse and one of the

PRA alone. It needs partners and cochampions—other government agencies, private-sector proponents, contractors, local and foreign, and civil-society organizations. PRA is poised to issue its PPP guidelines. The guidelines will outline the modalities and procedures for engaging with the private sector. PRA is open to unsolicited proposals. To date, it has received proposals for its new office, the operations and maintenance of ManilaCavite Toll Expressway Project, and two long-term lease arrangements in Naic, Cavite, and Panglao, Bohol. We aim to “grow our land ” through partnerships and be a “much larger, more vital agency in the years to come”, a challenge posed by Finance Secretary Carlos G. Domiguez III, PRA’s guest speaker last Friday. PRA is walking the talk and talking the walk. The grand life of PRA and the people it serves begins today. Happy 40th anniversary to PRA.

and turns of the story include the involvement of the older sister/protector of the accountant, the FBI and the police. The story leaves the reader speculating on the conclusion until the epilogue. Usual motivations for those accountants who take the wrong path of practicing the profession are money, advancement, greed and more. To the accountants who may read this article, may I share my usual statements to students and young accounting professionals: “The accounting profession is a rewarding vocation. For an accountant to be worth his or her salt, he or she should adopt integrity as his or her middle name. Beyond the salaries/ compensation or professional fees, public interest should be foremost in an accountant’s mind.” May all professional accountants have a smooth and “episode free” tax season. And may the ethical professional accountants thrive. Dr. Conchita L. Manabat is the president of the Development Center for Finance. Dr. Manabat was once the chairman of the Board of Accountancy. A past chairman of the International Association of Financial Executives Institutes (IAFEI), she is now the chairman of the Advisory Council of the said organization and serves as independent director in a few companies. This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@gmail.com.

most open and successful multicultural nations in the world.” It helps that Canada wasn’t beset by illegal immigration, and that economic policies limited the hollowing out of the middle class. Canada also has a brilliant system of citizen sponsorship. Five or more people can form a group to sponsor a refugee family, and even though this often involves a commitment of thousands of dollars per sponsor, there is a waiting list for getting refugees. These volunteers integrate the newcomers into the community and help them get jobs and education. This focus on integration is one reason Canada’s immigrants have thrived and become doctors and lawyers, almost never terrorists. The sponsors also untangle cultural clashes, noted Jessie Thomson, a sponsor of a Syrian family, as we shared a Middle Eastern feast in the family’s new home. When Thomson helped the Syrians open a bank account, she assumed it would be a joint account in the names of the husband and wife. But the family thought it should be in the name of the father, or perhaps the grandfather. In the end, everyone’s name went on the account, and each side learned something. I asked the foreign minister, Chrystia Freeland (herself a daughter of a Ukrainian immigrant), if the Trump travel ban would help Canada poach the best of the world’s scientists and entrepreneurs for itself. “That’s exactly right!” she responded, and she noted that she had heard from CEOs that Canada was now more attractive than ever. Then she made her pitch directly, through me.

2nd Front Page BusinessMirror

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Monday, February 6, 2017

Visitor arrivals in 2016 fall short of govt’s 6-M target By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

HE Philippines’s Department of Tourism (DOT) has asked its counterparts in the Association of Southeast Asian Nations (Asean) to help spread the word on the many exciting events that will happen in the country this year. This will help boost visitor arrivals in the Philippines, especially from its neighboring countries, of which contributed 461,698 tourists in 2016. This developed as the DOT released its year-end visitor arrivals report, which showed 5.97 million tourists coming to the Philippines from January to December 2016. Visitor receipts, likewise, registered only a slight 1.11-percent growth to P230.13 billon in 2016. The shortfall in visitors may be attributed to the slight slowdown in Chinese arrivals following the International Court of Arbitration’s ruling last July that China did not own the islands and atolls in the South China Sea.

Following that ruling, the Beijing government discouraged its citizens to travel to the Philippines, which resulted in millions of pesos in lost revenues reported by hotels and resorts in Cebu, Bohol and Boracay, as well as the suspension of chartered flights between certain points in China and resort areas of the Philippines via Philippine carriers. During the recent Asean Tourism Forum (ATF), Tourism Secretary Wanda Corazon T. Teo presented major events that would be happening in the Philippines, including the recently concluded Miss Universe pageant, the third Madrid Fusion Manila, and the sixth United Na-

tions World Tourism Organization International Conference on Tourism Statistics. Also ongoing are Asean meetings; the Philippines assumed the chairmanship of the regional body this year. “Pursuant to the Asean Tourism Strategic Plan, we would like to emphasize the importance of Asean working assiduously to ensure that a sustainable and inclusive growth path for tourism will be achieved. We must develop programs and policies to improve the competitiveness of Asean as a tourist destination, and to promote Asean a single destination,” Teo stressed to her regional counterparts during the ATF. The Asean is comprised of 10 member-countries, namely, Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Singapore, Thailand, Vietnam and the Philippines. According to the DOT report, arrivals from South Korea hit 1.48 million in 2016, up 10 percent from its arrivals in 2015. The market also accounted for 24.72 percent of total arrivals in 2016. The United States remained as the second top market, with 869,463 visitor arrivals, up some 11.6 percent from the 2015, and accounting for 14.57 percent of total arrivals. Despite the temporary slowdown in arrivals

in the third quarter of 2016, the Chinese market still managed to grab the third spot, with 675,663 arrivals, up a staggering 37.65 percent from 2015, and representing a market share of 11.32 percent. Other markets that followed were: Japan, with 535,238 arrivals; Australia, with 251,098 arrivals; Taiwan, with 229,303 arrivals; Singapore, with 176,057 arrivals; Canada, with 175,631 arrivals; the United Kingdom, with 173,299 ar r iva ls; and Ma l aysia, w it h 139,133 arrivals. “We don’t have to look far to find what we are looking for. In 2016 115 million projected international arrivals can be attributed to the Asean countries,” Teo said. “Let us not forget that our neighbors, Vietnam, Thailand, Singapore and Malaysia, for instance, are considered affluent nations and major outbound travel sources,” she added. While no data was made available by the DOT of Asean arrivals in 2016, cumulative number of tourists from January to November 2016 indicated Singapore delivered the most number of arrivals for the Philippines, with 161,194 visitors; followed by Malaysia (128,077); Thailand (4 4,372); Indonesia (40,651); Vietnam (31,555); Brunei (7,378); Myanmar (6,832); Cambodia (3,278); and Laos (1,112).

www.businessmirror.com.ph

‘RESPONSIBLE’ LOGGING SHOULD BE ALLOWED IN SELECT AREAS–NEDA By Cai U. Ordinario

@cuo_bm

he National Economic and Development Authority (Neda) said it is more partial to “responsible” logging in select areas, saying a total log ban would hurt the local furniture industry. In a recent briefing, Neda Director General Ernesto M. Pernia told reporters that logging should only stop in places that have already been denuded. Pernia also said the President may have just been “thinking out loud” when he was quoted as saying that there should be a total log ban. “The president did not declare [a total log ban] but he was thinking out loud ‘maybe you should impose a total log ban’,” Pernia said. “There are areas where trees should not be cut and areas where it can be allowed.” Neda Assistant Secretary Mercedita A. Sombilla told the BusinessMirror that the oversight agency was not consulted regarding the President’s plan to impose a log ban. Sombilla said, however, the agency expects to be included in a technical working group (TWG) that will discuss the log ban and the map that will be created.

Last Thursday Presidential Spokesman Ernesto C. Corpuz said the tripartite convergence committee was tasked to study logging permits. The committee was also tasked to create a map of areas that should have a total log ban and where logging can continue. Areas where logging can continue, Abella said, include industrial farms, where trees are cultured to support furniture and other wood-based industries. He also said the President has expressed concern for farmers who use wood in their households. Based on the final results of the 2013 Annual Survey of Philippine Business and Industry-Agriculture, Forestry and Fishing Sector, there were seven firms involved in growing timber forests. These firms were engaged in growing timber forest species, such as gemelina and eucalyptus, planting, replanting, transplanting, thinning and conserving of forest and timber tracts. These firms employed 676 employees, but only 672 were considered paid employees. The companies booked an income of P138.5 million and expenses amounting to P128.88 million in 2013.

GOP hurries to slash oil-and-gas rules, ending industries’ 8-year wait

ASHINGTON—The document carried the title “A Roadmap to Repeal”, a concise list of Obama administration environmental regulations that a Koch brothers-backed group was pressing President Donald J. Trump and Congress to quickly reverse after Inauguration Day. It was a tally of rules that energy industry executives and lobbyists had waged a futile fight against for eight years, donating millions of dollars to lawmakers who vowed to help block them, filing lawsuits to try to overturn them and hiring experts to generate reports that questioned the need for them. But in a flurry of activity this past week, Congress

did what Charles G. and David H. Koch—who own a conglomerate that sells hundreds of products, including gasoline, jet fuel and coal— and other industry leaders had been asking for. Using a rarely invoked law, the Republican-controlled Congress nullified a measure intended to curb the venting of gas wells on federal lands, and began the process of rolling back other regulations, including one enacted to limit damage that coal mines cause to streams—each items on the “Roadmap to Repeal”. Last Friday, with his own executive orders, Trump took up two more items on the list, including a call to rewrite major provisions of the Dodd-Frank Act, legislation crafted by the Obama administration and passed by Congress in response to the 2008 financial meltdown. Not since the Reagan administration has Washington moved so quickly to roll back or nullify so many federal regulations, one of the clearest signs of an abrupt shift of power in a government under oneparty control that has flipped the script of winners and losers. “It is a big, fat victory, after all this time,” said Luke Popovich, a vice president at the National Mining Association, an industry trade group. A three-way alliance has been formed among Congress, the Trump administration and industries that struggled to reverse what they saw as an out-of-control rush to regulate by the Obama administration. This new alignment of power is causing alarm among not only environmental groups but also other—mostly liberal— advocates who have spent much of the past eight years pushing for new rules to cover Wall Street banks, broadband providers, teacher preparation requirements, prepaid credit cards and even companies that sell high-calorie foods in vending machines. All of these measures, and many others, stand a chance of being reversed, watered down or blocked. “For the last several years, whenever Congress would concoct some way to roll back a rule protecting clean air or clean water or undermine the fight against climate change, we always felt confident as we had an adult in charge at the White House,” said Michael Brune, executive director of the Sierra Club, an environmental group. See “GOP,” A2