BMReports
Govt banks on free education to get an ‘A’ in easing poverty By Jovee Marie N. dela Cruz
A
@joveemarie
Part Two
DECADE ago, Filipino Alethea Florido sounded off the centuries-old belief ingrained in the minds of the country’s middle class. At the University of North Carolina at Chapel Hill in 2006, Florido noted the deep influence of US colonial rule. “Filipinos internalized the American ideal of a democratic society in which individuals could get ahead through attainment of a good education,” the Charlotte-Meck Schools Visiting International Faculty Program member said in a conference on K to 12. “Middle-class parents make tremendous sacrifices in order to provide secondary and higher Continued on A2
The headquarters of the University of the Philippines Open University in Los Baños, Laguna, a public research university and distance-learning institution. State universities and colleges were given a P58.7-billion budget this year, up by 24 percent from P47.4 billion in 2016. Ed davad
media partner of the year
United nations
2015 environmental Media Award leadership award 2008
BusinessMirror A broader look at today’s business
www.businessmirror.com.ph
n
Tuesday, February 7, 2017 Vol. 12 No. 118
Meat processors to feel pinch of lifting of rice QR
T
By Jasper Emmanuel Y. Arcalas
@jearcalas
he impending removal of import quotas for rice traded under the World Trade Organization (WTO) would increase the production cost of processed-meat manufacturers, triggering price spikes down to the level of retailers, according to the Philippine Association of Meat Processors Inc. (Pampi).
40% Continued on A12
PCC ‘to shame’ firms, agencies with anticompetitive practices
T
he Philippine Competition Commission (PCC) said it will release in the next two weeks the results of its review, which will identify sectors and government agencies that engage in anticompetitive practices. PCC Commissioner El Cid R. Butuyan said the National Competition Policy Review will be included in the Philippine Development Plan of the Duterte administration. “The review is part of our regulatory look-back exercise. We try to cover the concept of government as potential source for anticompetitive environment and the related issue of competitive neutrality,” Butuyan told the BusinessMirror. He added the report has identified some “anticompetitive” sectors and agencies, but he refused to identify
them, saying the National Economic and Development Authority is still vetting its results. The PCC’s National Competition Policy Review maps the whole competition landscape in the Philippines— an initiative rolled out by the agency upon its creation last year. The review was undertaken by a high-level technical team, composed of UP Economics Professor Emeritus Raul V. Fabella, former Public-Private Partnership Executive Director Andre C. Palacios and former Agriculture Secretary Senen C. Bacani. The review of government agencies, with regulations on private firms, and government-owned or -controlled corporations was triggered by the case involving the Manila Water Co. Inc. and the
PESO exchange rates n US 49.8010
Philippine Contractors Accreditation Board (PCAB). The antitrust body had moved to nullify PCAB’s nationality requirement in its licensing scheme for contractors. While no sectors and agencies have yet been identified, pushing for competitive neutrality —or ensuring a level playing field between stateowned and private businesses—is key to the review of the PCC. Butuyan said the PCC is empowered to deal with sectors and agencies flagged for possible anticompetitive behavior in three ways: ■ Intervene in actual cases and weigh in why certain issues are violative of the law or the Constitution; ■ Advocate for the repeal of existing laws with respect of convincing agencies or departments to do the
review and reform, including any necessary legislation; and ■ Actual cases where the regulatory issue is intertwined with the conduct of certain private companies, which could be resolved through an investigation. “Depending on each sector and the nature of the findings, the PCC will need to calibrate what to do next: Are we going to go to the agency and talk to them in repealing certain issues; are we going to go to court to expedite the resolution of the issue, or raise it to the level of the Supreme Court and send an amicus curiae to the secretary of the department? Those would be the next steps,” Butuyan said. He said the technical team may also release a more detailed report on the results of its review within the month. Catherine N. Pillas
business news source of the year
P25.00 nationwide | 5 sections 30 pages | 7 days a week
Creative solution: A two-pronged approach to infra
The tariff rate to be imposed on raw materials for processed-meat products when the rice QR expires Pampi Executive Director Francisco J. Buencamino said the lifting of the quantitative restriction (QR) on rice on July 1 would make mechanically deboned meat (MDM)—the raw material used in making processed-meat
2016 ejap journalism awards
the entrepreneur Manny Villar
T
he Philippines has always been seen as a country with a huge potential for growth and prosperity because of its endowments, including rich natural resources, numerous tourist spots, fertile lands, and a large pool of skilled and hardworking labor force, among others. In recent years, the economy has also enjoyed the right environment for investments, such as stable banking system, low interest rates, remittances from overseas Filipino workers and the business-process outsourcing (BPO) industry. Continued on A10
PHL SEEING 40% HIKE IN SALARIES OF EXECS By Cai U. Ordinario @cuo_bm
F
ilipino executives who opted to work abroad due to higher pay can now seriously consider coming home, because salaries in the country have been increasing by 20 percent to 40 percent annually, according to a study by an international professional recruitment consultant. In an interview, Robert Walters
Philippines Country Manager Eric Mary said apart from the salaries, Filipino professionals also no longer need to be over 5,000 miles away from their families to pursue rewarding careers. Mary added this is especially the case for those in the field of information technology (IT), human resource (HR), finance and accounting, and banking and financial services, which
n japan 0.4428 n UK 62.2413 n HK 6.4195 n CHINA 7.2462 n singapore 35.3952 n australia 38.1924 n EU 53.7751 n SAUDI arabia 13.2788
See “Salaries,” A2
Source: BSP (6 February 2017 )
BMReports BusinessMirror
A2 Tuesday, February 7, 2017
www.businessmirror.com.ph
Govt banks on free education to get an ‘A’ in easing poverty Continued from A1
education for their children.” Attaining the former goal has been alleviated by the Free Public Secondary Education Act of 1988. Persistence of poverty, however, has made it difficult for the middle class to attain the latter goal for their children. This may be one of the reasons there are at least 50 pending bills in the House of Representatives that seek to provide full free tertiary education in state universities and colleges (SUCs).
Salceda bill
THERE is House Bill 2772 being forwarded by Albay Rep. Joey S. Salceda which seeks to provide a “study-now, pay-later” system. Salceda’s bill seeks to provide loan assistance for Filipino taking up any four to five year bachelor’s degree program in any private higher education institutions (HEIs). “This is based on the guiding principle—kapag may pinag-aralan, magkakatrabaho at makakabayad [An educated person has the ability to get a job and pay],” Salceda said. “Thus, the entire educational system should be compelled to be effective and efficient in producing graduates for jobs created, good jobs of the future here and abroad.” According to Salceda, the bill has two components. One is free public tertiary or higher education to all qualified students enrolled
Singapore. . . Continued from A12
Hong Kong listing for the company, which could come with anchor investments from Chinese funds, people familiar with the matter said last year. Company executives have also mentioned the possibil-
in any bachelor’s degree and technical-vocational programs offered in all SUCs. The second component is the establishment of what he calls the system of Higher Education Contribution (HEC).
HEC system
THE bill refers to HECs as the entire system wherein the government provides a loan to Filipino citizens who seek higher education, mainly four-year or five-year courses in private HEIs and local community colleges. Repayment is collected by the Social Security System, Government Service Insurance System and other mechanisms on top of monthly premium contributions and is based as percentage of their monthly income once their income reaches a certain level. “W hile free public tertiar y education is straightfor ward, its absorptive capacity is limited and there is a need to level the playing field to those who would find admission in private higher education institutions,” Salceda said. “Thus, the HEC is designed, and hereby established, to grant concessional loans to and collect repayments from Filipinos, from students who are admitted and enrolled in private colleges and universities.” The lawmaker added there are only few qualifications to HECs. “The qualifications are only admission, Filipino citizenship and family income.” ity of listing in London, New York, Tokyo or Canada.
Manchester United
The biggest Singapore IPO by a foreign company was the $980-million offering in 2006 from Thai Beverage Pcl., the maker of Chang beer backed by billionaire Charoen Sirivadhanabhakdi, according to data compiled by Bloomberg. Sin-
According to Salceda, neither the Comissionn on Higher Education nor HEIs can impose additional qualifications, including, among others, choice of course. “If the number of application exceeds the HEC budget, applicants will be chosen on a ‘first-come, first-serve’ basis,” Salceda said.
Repayment scheme
UNDER the system, Salceda said Filipino students enrolled in accredited HEIs who desire to avail themselves of HECs would have the education loan assistance deducted or credited to their billing at the beginning of each semester for the next eight to 10 semesters based on their baccalaureate courses. “The private HEIs would submit a list of their total HECs releases at the end of each of semester and the HECs would after verification reimburse the amount to the HEIs,” he said. The bill said the HEC loan will then be repaid by the beneficiaries once they find employment. Moreover, payments will be triggered only once their gross income reaches the compulsory repayment threshold, which is the minimum amount of annual gross income. “In short, ‘no job, no repayment,’” Salceda said. The bill said HECs would be institutions owned and controlled by the government. These institutions would manage the highereducation loan fund, which shall be funded initially by the national gapore’s average daily stock trading was about $761 million last year, compared with $5.8 billion in Hong Kong and $7.4 billion in London, the data show. “SGX is the world’s most international exchange and offers unique access to Southeast Asia’s markets,” the bourse operator said in an e-mailed statement, without commenting specifically on a po-
government through national appropriations which may take eight years of continuous contribution of at least P30 billion annually, according to Salceda. The government shall seek longterm funding from bilateral and multilateral institutions, which provide deeply concessional interest rates, multiyear releases with tenor up to 30 years, he added.
Substantial returns
FOR many individuals, the economic returns to education are substantial, as well, Salceda said, citing data from government think tank Philippine Institute for Development Studies. He said in 2014 the medial daily earnings of college graduates were 116 percent higher than the earning of high-school graduates. The latter’s medial daily ear nings, on the other hand, are 26 percent higher than those who only graduated from basic education. “Even those with college units enjoy a 27-percent advantage over those with secondary education,” Salceda said. “These differentials are large and have been growing.”
Forever young
ANOTHER bill turns to the Baby Boomers. Lakas Rep. Yedda Marie Kittilstvedt-Romualdez of Leyte has proposed a law granting full scholarships to undergraduate senior citizens. Romualdez, vice chairman of tential Aramco listing. “Singapore is a well-regulated international financial center with strong corporate governance.” A representative for Aramco declined to comment, while a representative for Singapore sovereign wealth fund GIC Pte. didn’t immediately respond to an e-mail seeking comment. Temasek Holdings Pte., the Singapore state-owned
the House Committee on Government Enterprises and Privatization, said her bill would help undergraduate senior citizens to improve their lives by giving them the chance and opportunity to finish their four-year degree in any SUC. “Education of the elderly is a must, as it leads to improvement in the quality of their lives, influences their self-esteem, their feeling of accomplishment and self-realization, while providing the younger generations with the opportunity to take advantage of the experiences of the seniors,” House Bill (HB) 3704, or the Senior Citizen Scholarship Act of 2016, said. “It is my personal appeal to all of you to make this a reality for our country’s senior citizens with the passage of HB 3704,” Romualdez asked fellow legislators. “The primary objective of this bill is to protect and promote the constitutionally upheld right to quality education and to ensure that education is accessible to all, without discrimination on the basis of age,” she added. According to her, senior citizens are a valued part of Filipino society. “In fact, the Constitution promotes not only their well-being and social security, but, more important, their continued personal growth and development.” Under her measure, a senior citizen will be given automatic full scholarship in the form of free tuition in an SUC. To be concluded investment company, “looks at opportunities for investment based on its intrinsic value tests,” spokesman Stephen Forshaw said by e-mail. “We do not provide views on our interest or intentions with respect to individual companies.” SGX has previously tried to attract big-ticket listings from overseas. Magnus Bocker, who was then the exchange’s chief executive officer, personally led a 2011 push to win a $1-billion IPO from famed English soccer team Manchester United, people with knowledge of the matter said at the time.
$2-trillion company
The Southeast Asian bourse was also trying to woo a 2012 share sale by Formula One that could have raised as much as $3 billion, according to people with knowledge of the matter. Manchester United eventually chose to list in the US, while Formula One’s IPO didn’t take place in part due to a volatile equity market. Aramco plans to sell shares on at least two or three stock markets in 2018 with a base listing in Riyadh, Saudi Energy Minister Khalid Al-Falih told reporters last week. No single bourse would be able to absorb the entire offering, Al-Falih said. The kingdom plans to sell less than 5 percent of Aramco as part of plans by Deputy Crown Prince Mohammed bin Salman to set up the world’s biggest sovereign wealth fund and reduce the economy’s reliance on oil. Saudi Arabia has estimated that the entire company could be worth more than $2 trillion. Aramco has asked banks, including Goldman Sachs Group Inc. and HSBC Holdings Plc., to pitch for an advisory role on the IPO, people with knowledge of the matter said last month. Saudi Arabia, the world’s largest oil exporter, estimates that it holds more than 266 billion barrels in crude reserves. The country pumped 10.48 million barrels a day of oil last December, data compiled by Bloomberg show. Bloomberg News
Salaries. . .
Continued from A1
Robert Walters specializes in. “We believe that for some people based abroad, they are based abroad because they [do] not realize that [there] are opportunities here in terms of career progression, in terms of challenging jobs, in terms of salary. The market is completely different than two years ago, [or] a year ago. It will become more and more different,” Mary told the BusinessM irror. Mary said the Philippines’s economic success is creating a vacuum of mid- to senior-level executives. With more companies wanting to take part in the country’s booming economy, mid- to high-level skills will also be in demand. While this does not reflect the training and career paths taken by existing professionals in IT, HR, finance and accounting and banking and financial services in the country, their numbers are not sufficient. Mary said there are many good candidates in the country. However, they cannot be hired because they are currently employed and do not want to leave their companies. Despite this, demand for employees in IT, HR, finance and accounting and banking and financial services are bound to increase starting this year, because many local businesses are looking to expand, while foreign firms are also keen on investing in the country. “The growth last year was nearly 7 percent. It creates opportunities and there are a lot of companies that are expanding their business and there are also a lot of foreign companies who want to do business here in the Philippines. It has an impact on the level of competition. The competition is increasing and if the competition is increasing, that means that you need to be even more efficient in the service you deliver. That means you have to have the right people,” Mary said. Data from Robert Walters’s survey, which focused on basic salaries alone, showed that in accounting in finance, chief financial officers’annual salary can reach P5 million to P9 million in 2017, from P5 million to P8 million in 2016. The position with the lowest salary in this sector is those of cost controllers, whose annual salaries are expected to increase to P900,000 to P1.4 million in 2017, from P800,000 to P1.3 million in 2016. In banking and finance, the highest annual salaries are for vice presidents for market operations that can earn P3.6 million to P6.8 million in 2017, higher than P3.6 million to P6.5 million in 2016. Assistant managers or managers for financial/regulatory reporting, who have the lowest salaries in the mid- to top-level executives, are expected to earn P780,000 to P1.3 million in 2017, the same level in 2016. In the human resource sector, HR directors are bound to receive higher annual salaries this year at P4.5 million to P9 million, from P4 million to P8.5 million in 2016. HR Training and development managers and organization and development managers are expected to see their annual salaries increase to P1.4 million to P1.9 million in 2017, from P1.3 million to P1.7 million in 2016. In information technology, chief technology officers and chief information officers are expected to earn P6 million to P11 million in 2017, the same in 2016. Voice/network engineers, the lowest level in the mid- to senior-level positions in the sector, are seen earning P1 million to P2.6 million in 2017, the same as last year. “While salary is always a key factor in attracting and retaining employees, the opportunity for structured career progression will become increasingly important. Employers are advised to effectively communicate career development plans with their employees in order to retain them,” the study stated. The Salary Survey is based on an analysis of placements made across our network of offices and specialist disciplines during the course of 2016. Now on its 18th year, the Survey is used by employers, HR managers and employees for benchmarking salary levels within their industry.
The Nation BusinessMirror
news@businessmirror.com.ph
Editor: Dionisio L. Pelayo • Tuesday, February 7, 2017 A3
Peace group pleads with Duterte: Continue peace talks with NDF
A
By Marvyn N. Benaning | Correspondent
PEACE-advocacy group has asked President Duterte to change his mind about ending the peace talks with the National Democratic Front of the Philippines (NDF). In a statement, the Kapayapaan Campaign for a Just Peace (Kapayapaan) said a termination or even suspension of the talks would reverse the “positive and substantial gains achieved by three rounds of talks between the government and the revolutionary movement”. Kapayapaan was formed in early-2015 as a campaign network pushing for the resumption of the peace talks under thenPresident Benigno S. Aquino III. Among its original members were then-Davao City Mayor Rodrigo R. Duterte and Party-list Rep. Silvestre H. Bello III of 1-BAP, now chairman of the government’s peace panel. “The way we see it, the talks are progressing at an unprecedented rate. It would be tragic for the President to stop the talks at this point. It is unfortunate that both sides have lifted their unilat-
eral cease-fire declarations, but the talks can and should continue,” said Fr. Ben Alforque, Kapayapaan convener. He said that in the third round of talks last month, the government and NDF panels signed a supplemental agreement on human rights and international humanitarian law, while their reciprocal working committees agreed on several provisions of the Comprehensive Agreement on Social and Economic Reforms. On top of that, drafts were exchanged on the agreement on political and constitutional reforms, while talks for a bilateral cease-fire are scheduled later this month. “President Duterte does not have to look far to find a compelling reason to continue the talks. Peace is the only and most compelling reason for the talks. We ask the President to stay, the course. Please listen to the cry of the poor and the na-
tion. It is in their behalf that peace negotiations should continue,” added Alforque, his former colleague at Kapayapaan.
‘Left’ groups to Duterte: Please reconsider
PARTY-LIST Rep. Carlos Isagani T. Zarate of Bayan Muna has urged Duterte to reconsider his decision to terminate the peace negotiations with the NDF. Zarate, vice chairman of the House Committee on Peace, Reconciliation and Unity, described as “very unfortunate” Duterte’s ending the peace negotiations between the GRP and the NDF. “We hope that the President will reconsider his decision because in less than a year, the peace talks have significantly progressed. In the same breath, the peace process should continue even without a cease-fire in place,” Zarate argued. Zarate is an observer of the peace negotiations and was on hand to see how the latest edition of the talks progressed in Rome. The Communist Party of the Philippines and the New People’s Army (NPA) announced the termination of their unilateral cease-fire on February 3, saying the truce will end at 11:59 p.m. of February 10. They justified their decision by saying the Duterte administration had not reined in its troops, leading to clashes with the NPA, and at least 20 farmers and lumad leaders were killed during the cease-fire,
practically all of them shot dead by suspected soldiers or paramilitary men employed by the Duterte administration. Moreover, the promised freedom of nearly 400 detained activists did not materialize, and Duterte insisted he never promised to free anyone, considering them as “aces” in the negotiations, a position consistent with the tack of the military. “Considering the advances already made in so short a period these past months on the substantive agenda of the talks, these troubling developments do not augur well in solving the root causes of the armed conflict in our country. It will only embolden the militarists in and out of the government to continue a system that impoverished our country and people, as well as spawned widespread violations of human rights,” Zarate warned. Continuing the peace negotiations is in the best interest of farmers who are pressing for genuine land reform, land distribution and real change under the Duterte administration. This was declared by the Kilusang Magbubukid ng Pilipinas (KMP), after Duterte ordered the termination of the peace talks. “Farmers want the peace negotiations to continue. We want the peace talks to help address the problem of land monopoly, landlessness of farmers, unemployment and to realize the equitable distribution of social wealth,” KMP Chairman Joseph Canlas said.
TV network’s talents lose case at NLRC
A
LABOR arbiter has upheld the suspension of a television network’s former talents. Edmalynne A. Remillano, Carmela E. Pamiloza, Winchele V. Ochoa, Nyorly Gail S. Montero, Maria Evrheene J. Balbuena and Vianca Legarce Vega filed charges against the network after they wre suspended from work. The six were creative talents of GMA Network hired under a series of talent agreements. Labor Arbiter Albert B. Dolosa of the National Labor Relations Commission found that there was no illegal suspension in the case and that, regardless of the status of the complainants’ employment, the respondent had the prerogative to discipline its employees according to law and the contract entered into by the parties. Dolosa ruled that owing to the “sufficient basis shown” and “due process observed” the suspension of Remillano “must be upheld both under the terms of the talent agreement as well as by way of valid exercise of management prerogative in good faith by respondent GMA.” Remillano absented herself from work to join a protest action organized by the Talents Association of the Philippines. As for the other complainants, Dolosa ruled that the break from their services with GMA cannot be deemed “an overt act of suspension” imposed by GMA as said complainants sought employment elsewhere or declined the offer of GMA to renew their talent agreements. Felipe L. Gozon, GMA chairman who was included as a party-respondent, was dropped from the case owing to the complainants’ failure to show cogent basis to “digress from the general rule that a corporation, like respondent GMA, has a personality separate and distinct from the persons composing or managing it.”
Economy
A4 Tuesday, February 7, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon
BusinessMirror
news@businessmirror.com.ph
gold mine in mt. diwata, compostela valley
Miners formally ask Duterte to trash Lopez’s closure orders
T
By Jonathan L. Mayuga
@jonlmayuga
he mining industry’s big players belonging to the Chamber of Mines of the Philippines (COMP) on Monday asked President Duterte to review the closure and suspension orders issued by Environment Secretary Regina Paz L. Lopez.
In a statement, COMP said Lopez’s decision to close 23 large-scale operating mines and suspend five others has “serious repercussions” to the country. Lopez earlier announced the closure and suspension of 28 of the 41 largescale metallic mines for failing environmental standards. Most of the mines recommended for closure, according to Lopez, caused massive environmental degradation and pollution of rivers and functional watersheds that threaten the country’s sustainable supply of freshwater. Before making her announcement on the
results, Lopez assured the meticulous conduct of the mine audit and that the decision is for the greater good, anchored on social justice, which is the “heart and soul” of the Department of Environment and Natural Resources (DENR) under her watch. Lopez said the decision is final, and urged those affected to appeal to Duterte for reconsideration. COMP earlier urged the Mining Industry Coordinating Council (MICC) to look into Lopez’s decision. In its appeal to Duterte, COMP said the suspension and closure of certain mining operations under the guise of
“healing the hurt” were “irresponsible, unfair and illegal”. Lopez’s actions, the group said, “have finally revealed her true bias: to stop all mining in the Philippines”. Ironically, COMP said the DENR chief has “trained her guns on legitimate operations, while turning a blind eye to unpermitted, undocumented, nontaxpaying and noncompliant mining operations, which are the real violators of environment”. In ordering the closure and suspension of the operating mines, COMP said Lopez is condemning to poverty more than 1.2 million Filipinos, whose livelihood depend on legitimate, legal, permitted mining, and crippling local government units (LGUs) and communities that benefit from taxes and social-development management programs (SDMPs) of mining companies. “She is creating an unstable policy environment resulting in threatening the economic growth momentum under the Duterte administration and putting in limbo $22 billion [P1.1 trillion] worth of investments,” COMP said. According to COMP, Lopez is attacking the only industry in the country that has replanted over 20 million trees nationwide. The group said Lopez “deceptively” used images of active mining areas as “evidence” that no rehabilitation is happening. It expressed concern that Lopez is slowly killing an industry that has faithfully paid billions in taxes and fees annually to the government. “She is strangling current operations by the nonissuance of tree-cutting permits, environmental compliance certificates, ore-transport permits, mineral ore-ex-
[Lopez’s actions] have finally revealed her true bias: to stop all mining in the Philippines.”—COMP
port permits and other DENR-controlled permits, and stopping future projects by withholding and canceling ECCs previously issued and nonprocessing of other required permits,” COMP said. COMP added the DENR chief has effectively established a mining moratorium in the Philippines and trampled on the Philippine Mining Act, a law that she had sworn to uphold and implement. Also to be affected, according to COMP, are the logistics companies that provide drilling, construction, hauling and shipping; processing companies; manpower and transportation service providers; and even those in the education and health sectors. Other strategic industries, such as energy and petroleum, “are also being shackled and slowly strangled to death” by stopping the issuance and processing or canceling of existing ECCs. The COMP explained that Lopez’s predecessor, former Environment Secretary Ramon J.P. Paje, required the mining companies to subject themselves to a yearlong certification process under ISO 14001, which Lopez herself described on July 1, 2016, as “another way of saying responsible mining”. But COMP said Lopez is now using the results of this second audit rather than the results of the ISO standards, “revealing her inherent bias against the industry as a whole”. Carlos Arcilla, director of the University of the Philippines-National Institute of Geological Sciences, urged Lopez to reveal the basis of her decision. A geology expert, Arcilla said future engineers and geologists should learn from Lopez’s decision on how to enforce responsible mining practices. In a statement, Arcilla said he agrees with Lopez that only responsible miners should be allowed to operate, but added the DENR chief should also reveal the basis of her actions. “We are interested to know what the bases are for closing mines—we have to teach future geologists and engineers the correct and scientific ways to mine, so as not to endanger the environment.”
Solon: Households should pay electricity carbon tax
A
leader of the House of Representatives is pushing for a measure seeking to impose a climate or carbon tax on electricity. Nacionalista Party Rep. Luis Raymund Villafuerte of Camarines Sur, vice chairman of the House Committee on Economic Affairs, said his House Bill 4739, or the Piso Para sa Kalikasan Act, is a first of its kind in the country. “This bill introduces the climate tax—a levy on the level of carbon-dioxide (CO2) emissions from electricity consumption. The CO2 emission shall be measured in kilograms per kilowatt-hour. A kilogram of CO2 emission shall be worth P1,” he said. He noted that CO2 emissions from electricity and heat production have doubled in the Philippines, from 25.83 percent of total fuel combustion in 1972 to 49.74 percent in 2013. Under the measure, all monies collected under the act shall be earmarked solely and used exclusively for providing programs that assist communities in adapting to climate change and managing disaster risks; improving the resiliency of critical infrastructure; protecting environmental quality and wildlife; and meeting international commitment made by the Philippines to assist with climate-change adaptation and disaster risk reduction and management. The bill, however, provides that consumers will be exempted from paying this proposed climate tax if their monthly consumptions do not exceed 60 kilowatt-hours (kWh) each, or if the electricity they consume are generated from renewableenergy sources. “It recognizes the unfortunate status quo of the environment and encourages every Filipino to act now. The proceeds of the fund from this shall be used to explore alternative and cleaner sources of energy, provide better public transportation and disseminate climate-change awareness,” Villafuerte said. “This bill’s purpose is two-pronged: It is a revenuegenerating measure but, at the same time, also a tool to protect and preserve the environment”. According to the lawmaker, the swift approval of the bill will send a clear signal to the global community of the country’s strong commitment to international climate policy and Congress’s affirmation of the people’s right to a balanced and healthy ecology. Villafuerte said the measure is meant to help the countr y meet its commitment under the Intended Nationally Determined Contribution to the United Nations to undertake measures that would reduce greenhouse-gas emissions by 70 percent. The Philippines is “ground zero for climate disaster”, and has been classified by the World Bank as one of the countries most vulnerable to natural disasters caused by climate change, Villafuerte said. Jovee Marie N. dela Cruz
Health groups, Quezon City govt in joint efforts to make children’s first 1,000 days better
M
alnutrition in children continues to be a major concern in the country, particularly during their first 1,000 days. Thus, various Philippine medical societies and private health organizations have entered into a memorandum of agreement (MOA) with the local government of Quezon City to implement nutrition-specific interventions to mothers and their infants in marginalized communities. The first 1,000 days is the period that covers conception up to a child’s second birthday and there are health risks, which are irreversible, that occur during the said period. The “First 1,000 Days Program” is a joint project of the Quezon City government, the Philippine Obstetrics and Gynecological Society (POGS), the Philippine Pediatric Society (PPS) and Kabisig ng Kalahi Inc. The pilot program will run for three years, or until September 30, 2019, with the intention to upscale the program for all Quezon City health units and their constituents. Together, the organizations will implement an intervention program to address the lack of adequate nutrients received by Filipino children during the first 1,000 days of their lives, which cause irreversible damage or gaps in their physical, as well as mental, development. Some of these interventions are micronutrient supplementation, exclusive breastfeeding, immunization and proper nutrition. “We are glad to participate in this public-private initiative to address maternal and child health concerns of our constituents, particularly since it is among the key priorities of our city government,” said Quezon
Seated, from left, are Dr. Mila Bautista, past president, Philippine Pediatric Society (PPS); Quezon City Mayor Herbert Bautista; Vicky Wieneke, president, Kabisig ng Kalahi Inc.; Dr. Mayumi Bismark, vice president, Philippine Obstetrics and Gynecological Society (POGS); Councilor Gian Sotto (standing, from left), Councilor Alexander Herrera, Councilor Godofredo Liban, Councilor Elizabeth Elarmente, Councilor Eric Medina, Councilor Allan Francisco, Councilor Lala Sotto, Quezon City Vice Mayor Joy Belmonte and Dra. Verdades Pena Linga, Quezon City health officer III.
City Councilor Lala Sotto-Antonio, who will file a resolution to back the First 1,000 Days Program. Quezon City Mayor Herbert Bautista, who signed the MOA, reiterated what he emphasized in his most recent or seventh State of the City Address (Soca) that publichealth services is a necessity in poverty alleviation. “Our objective has been to improve the survival rate of our newborns and reduce maternal mortality. The Batang 1,000 program that our City Health Department operationalizes in partnership with various groups seeks to provide the health protection and nutrition needed to ensure the normal development of a child from the time he is born to 2 years of age,” Bautista said. He urged all mothers to register
in their barangays for the program to receive comprehensive care package during their pregnancy, up to the time they give birth, and for their child, as well. Participation and compliance, according to Program Manager Maria Christine Joy B. Tanteo, MD, DPPS, is very crucial in the success of the program. “The mothers really have to avail themselves of the interventions that we are offering and to comply with the entire program. That is the key in getting all the health and nutritional benefits for themselves and their child. There are no shortcuts. They have to go through the entire program.” “We are hoping with this kind of program, we can increase the awareness of mothers, help them adopt the right attitude toward motherhood, take active participa-
tion in their pregnancy and care of their child,” said Luz Ma. Theresa Garcia, MD, medical director of SafeBirth Lying-In Clinic. The first 1,000 days is a period that opens a critical window for most beneficial intervention and positive resulting outcomes. Likewise, it is also a period when both mothers and children are at a greater risk of malnutrition. Thus, the role of Kabisig ng Kalahi Inc. in providing the nutritional requirements of the mothers and children through supplemental feeding is very crucial. “We have been doing this for a long time already in various parts of the country. We will help mothers take care of their own nutrition and that of their children by teaching them to plan and prepare nutritious meals,” said its founder and president, Victoria V. Weineke.
Proper nutrition and sustenance can give children a very good head start early on in their lives. The program’s regimen can deal with risks associated with lack of adequate nutrients or malnutrition, such as its most prevalent and serious manifestation, which is stunting. Based on the findings of the eigth National Nutrition Survey Philippines conducted by the Food and Nutrition Research Institute (FNRI), three out of 10, or 30.3 percent, children among 0 to 5 years old were stunted. Stunting is a major contributor to child mortality due to common childhood infections, such as diarrhea and pneumonia. Stunting is also related to increased risk of overweight and noncommunicable disease, such as diabetes and cardiovascular disease, later in life. Besides, stunting, the other physical manifestations or signs of malnutrition include underweight, overweight and wasting. Brain or mental development is just as important, according to PPS, the outcome of the brain development during the first 2 years of a child determines to a large extent a person’s mental capacity for the rest of his or her life. “Brain development should be at par with the child’s chronological age,” said Milagros Bautista, MD, immediate president of PPS. In effect, it is an early investment into the future of the children as it will give them a good head start in life. They will be nourished very well, thus will grow up to be physically and mentally equipped. Indirectly, that is the key in breaking the chain of intergenerational poverty. Poverty, particularly intergenerational poverty, is still prevalent among Filipinos. Poverty is
transmitted from one generation to another. Poor parents’ children eventually become poor adults themselves, because they were not provided with proper nutrition, health care and education, among others. Thus, they have limited or lack opportunities life. In the Philippines the monthly poverty threshold for a family of five is at least P9,140—this is the amount the family needs to meet both basic food and nonfood needs. Poverty threshold also refers to the minimum income a family or individual must earn in order to be considered “not poor”. The top 2 goals among the 17 Sustainable Development Goals (SDGs) are: end poverty in all its forms everywhere; and end hunger, achieve food security and improved nutrition. POGS Vice President Mayumi S. Bismark, MD, said the First 1,000 Day Program is a seamless approach and that participation of the key health groups, which are experts in all aspects of care—from the women’s pregnancy to maternal and child care, will ensure its comprehensive implementation. The clinical program is also meant to generate local data to support protocols that have been tested in other countries to ensure efficiency if and when it will be rolled out for implementation all over the country. “It is the collective aim of all the organizations involved that the First 1,000 Days Program will be followed by others and will be implemented nationwide. We have gone beyond theories and concepts to actual implementation. Hopefully, we can bring the program down to the communities, so it can be adapted nationwide,” Bismark said.
Agriculture/Commodities BusinessMirror
news@businessmirror.com.ph
Editor: Jennifer A. Ng • Tuesday, February 7, 2017
A5
DA spending ₧750M to hike palay output Govt rushing to amend law allowing QR on rice
T
File photo
By Jasper Emmanuel Y. Arcalas
T
@jearcalas
he Department of Agriculture (DA) said on Monday it will allocate at least P750 million for the establishment of 150 units of solar-powered irrigation systems nationwide to increase paddy-rice output this year.
A g r icu lture Secretar y Emmanuel F. Piñol said some 15,000 hectares of rice farms in 15 regions will initially be covered by the DA. This intervention, he said, will translate into an additional production of 58,000 metric tons (MT) of umilled rice. “I asked them [DA regional directors] to identify 10 pilot sites
in every region—excluding the National Capital Region—that would mean 15 regions multiplied by 10 sites, that’s 150 units,” Piñol told reporters in an interview. “Multiply 150 sites by 100 hectares, so that’s equivalent to 15,000 hectares, which will serve as pilot areas,” he added. Piñol said the funding for the
establishment of the 150 units of solar-powered irrigation systems will come from the budget of the DA’s rice and corn program. “Each unit would cost about P5 million, so that’s about P750 million for 150 units. Our budget for the rice program this year is P9 billion, while our corn program has a budget of around P4 billion to P5 billion,” he said. Piñol said a unit of solar-powered irrigation system could be set up within a month if there a re ade qu ate m ate r i a l s a nd resources. Earlier, he said he would ask Congress for an additional budget of P20 billion for next year to roll out solar-powered irrigation systems nationwide. Piñol said the amount will be used to irrigate at least 1 million hectares of rice farms. “That’s what I told the President—give me the money, and we can irrigate a million hectares
and be able to achieve rice selfsufficiency,” Piñol said. “If we can irrigate rice lands during the dry season, then farmers can produce another 4 metric tons per hectare,” Piñol said, referring to the 2.7 million hectares of rice farmers, who depend on rainfall. The DA chief expressed optimism that President Duterte will back his request for an additional allocation of P20 billion for his solar-powered irrigation initiative. “The President has committed to give the DA the budget it needs to produce food for the country, so [his approval for the additional funds] won’t be much of a problem,” Piñol said. He noted that Duterte has already approved the additional P1 billion for the Survival and Recovery Loan program. “So the P20 billion to build more solar-powered irrigation systems, I don’t think the President will deny it.”
he government is racing against time to come up with a new law that will replace rice-import quotas with tariffs by June 30, according to an official of the National Economic and Development Authority (Neda). Neda Assistant Secretary Mercedita A. Sombilla also said the government is considering all possible alternatives as the expiry of the quantitative restriction (QR) on rice extended by the World Trade Organization (WTO) nears. Sombilla said a bill to amend Republic Act (RA) 8178 has already been drafted, but it has yet to reach Congress, as it will be subjected to consultations. “Definitely, we may not be able to amend RA 8178 before June 30. We still have to consult a lot of agencies with regard to that because there are sensitivities about the matter,” she told reporters in an interview on Monday. Sombilla said the government is looking at other options to fulfill the country’s obligations to the WTO while the amendment of RA 8178 is ongoing. “There are measures that we are actually discussing with agencies on how best we would tackle this issue,” she said. “We have to talk about alternative measures. It’s not acceptable that the traders and stakeholders are left hanging,” Sombilla added. Philippine Institute for Development Studies senior research fellow Roehlano Briones, however, warned that the Philippines could be involved in legal disputes if it fails to lift the QR on rice. “There would be implications if RA 8178 will not be amended. Other WTO members could insist on their right to export [more] rice to the Philippines,” Briones told the BusinessMirror. “The government can say we still have the QR [due to the continued existence of RA 8178], but WTO members could say
it’s not our fault. So we could be subjected to legal disputes the longer we maintain the inconsistencies between domestic laws and international treaties,” he added. Briones said Congress could consider filing a “simple amendment” and to assign an equivalent tariff for the rice import caps. “Basically, the amendment repeals the provision for the QR and sets the equivalent tariff based on the WTO rules.” Upon its accession to the WTO in 1995, the Philippines was allowed to enjoy the rice QR for 10 years. Manila was able to secure an extension when it lapsed in 2004. After it lapsed in 2012, Manila again negotiated for an extension. In 2014 the WTO gave its go signal to the Philippines to implement the QR up to June 30 next year. According to the WTO General Council Ruling in July 2014, the Philippines should subject rice imports to ordinary customs duties right after the QR-waiver extension expires on June 30. To do this, Congress needs to amend RA 8178, which allowed the Philippines to retain the nontariff barrier on rice, according to Agriculture Undersecretary Segfredo R. Serrano. “What I’m telling the economic managers is that even if the WTO waiver expires, the department is duty bound to implement the provisions of RA 8178 because it has no expiry date,” Serrano said. Earlier, an official of the Neda told the BusinessMirror that the agency would recommend to the President a tariff ranging from 40 percent to 50 percent once the country converts the rice-import quota into tariffs. Under the QR scheme, rice imports within the minimum access volume (MAV) of 805,200 metric tons per year are slapped with a lower tariff of 35 percent, while imports in excess of the MAV are slapped a higher tariff of 50 percent. Jasper Emmanuel Y. Arcalas
DTI eyes $118.61M in export Tokyo’s catch of the day: Flying fish, superior margins sales from Ifex Philippines 2017 R
T
he Center for International Trade Expositions and Missions (Citem) said it is targeting to attract 770 exhibitors and total export sales of $118.61 million for this year’s edition of the International Food Exhibition (Ifex) Philippines. The Department of Trade and Industry (DTI) said the biennial event will support the country’s campaign to drive up trade opportunities and inclusive growth in the Asean region. “As partners for change in engaging the world, Citem envisions the upcoming Ifex Philippines 2017 as a cuisine compass for international foodindustry players and market buyers that want tyo source premium food and ingredients in Southeast Asia, particularly in the Philippines,” Citem Executive Director Rosvi Gaetos said in a statement. Citem, an attached agency of the DTI, said Ifex Philippines 2017 will feature the historical, geographical and cultural influences behind some of Southeast Asia’s distinct cuisines. With the theme “Taste Asean,” Ifex Philippines will showcase the region’s unique tropical fruits, vegetables, fresh and processed seafood, sauces and condiments, and other food products that contribute to a vibrant food scene in global market. Citem said it has tapped the embassies and leading companies from Asean countries, including Indonesia, Malaysia, Singapore, Thailand and Vietnam, to participate in Ifex Philippines under its “International Hall”. Aside from Asean member-states, Citem said partners and potential exhibitors from China,
South Korea, Taiwan and Turkey also confirmed their participation in the said hall. At the launch of the Asean 2017 Business and Investment Program on January 24, the DTI noted that the Asean is an “economic powerhouse”, as it is the third-largest market in the world with over 620 million people, the third-largest economy in Asia and the seventh-largest economy in the world, with a combined GDP of $2.3 trillion. In the Asean Economic Community Blueprint for 2025, members are pushed to put forward programs, events or interventions, such as Ifex Philippines 2017, that strategically develop and promote Asean as an organic food-production bases. The 2025 Asean economic road map also promotes engaging stakeholders on regional integration efforts, with emphasis on the sharing of best practices and expanding their reach to external markets and the global value chains. Citem said Ifex Philippines 2015 recorded a 99.17-percent buyer satisfaction and 15,000 buyers and visitors. During its three-day run, 700 exhibiting firms generated $162 million worth of onsite deals. Out of its total exhibitors, 123 were foreign companies from 20 different countries. Ifex Philippines is organized by Citem, the export-promotion arm of the DTI, with support from the Department of Agriculture. The biennial event will be held from May 19 to 21 at the World Trade Center and the Philippine Trade Training Center in Manila. Interested Philippine and international exporters are encouraged to visit the Ifex web site.
yohei Nomoto wants to put fresher sashimi on your plate, and more money in the wallets of Japan’s struggling fishermen. His venture airfreights freshly caught fish from across Japan, processes them on the grounds of Tokyo’s Haneda airport, and distributes the produce to the city’s notoriously choosy eaters and restaurants across Asia—but Nomoto’s goal isn’t just freshness. He wants to reinvigorate a declining fisheries industry by cutting out the middleman and giving more income to the nation’s underpaid fishermen. “We turn freshness of fish into money through speed and traceability,” said Nomoto, who runs CSN Chihou Sousei Network Co. “So much time is usually wasted getting fish to customers, which results in loss of freshness and an increase in expenses.” At Tokyo’s iconic Tsukiji market, fish caught on Monday might not be on sale until Friday, Nomoto says—he aims for same-day turnaround.
Flying fish
Japan’s fish-loving but finicky eaters have a wealth of choices and a keen appreciation of freshness. CSN aims for “lightning-fast fresh fish”, using a tie-up with ANA Holdings Inc. to fly the chilled cargo from ports around the country to the airport in Tokyo and out again. In a pristine environment reminiscent of a semiconductor clean room, just hundreds of meters from the international terminal’s baggage claim area, workers clad in protective masks and caps scoop organs and bones out of freshly arrived fish. The processed product is vacuum sealed and shipped to restaurants and retailers by noon the same day. Some 40 percent of the produce is sent overseas, and can be rotating on the conveyor belts of sushi restaurants in Singapore
Fish delivered from CSN are sold at Takashimaya in Tokyo. or Shanghai the same day it was caught. By eliminating fishing cooperatives that buy at a flat rate, or markets such as Tsukiji, CSN says it can pay fishermen more for their catch. The nation’s fishermen need any help they can get. Many are not far from the poverty line, with average income for coastal fishing households in 2014 at ¥1.99 million ($17,500), about half the national average of ¥4.15 million. Makoto Higasayama, a 45-year-old fisherman in Kagoshima, southern Japan, sells fish to CSN. He works the waters of Koshikishima island and says the venture has helped boost the popularity of the island’s specialty, kibinago, a type of herring. “It used to take more than a day to reach places beyond Kagoshima, but now we can sell kibinago anywhere in Japan on the same day as
Komaki Ito/Bloomberg
we catch them,” he says. “We’re hearing from customers that the freshness is like nothing they’ve ever tasted.” CSN has contributed to rising prices and better income stability, he says.
Fishermen gutted
Although it has the sixth-longest coastline in the world, Japan’s population has been turning away from fishing. The number of fishermen has dropped almost by half since 1998, government statistics show. “In order to survive, fishermen need to change their mentality and think about ways to sell at a high price,” Kanta Kubo says. After 10 years as an engineer, he joined a fishing company in Tsushima, an island in the Sea of Japan, after attending a job-matching fair for inexperienced fishermen. Now he runs the company. Bloomberg News
A6
The World BusinessMirror
Tuesday, February, 7 2017
www.businessmirror.com.ph • Editor: Lyn Resurreccionph
Japan’s 0.5% wage hike last year the biggest since 2010
T
he w a l le t s of Jap a n’s workers ended up a bit f a t t e r l a s t y e a r, w it h tota l ear nings r ising the most since 2010.
$33,673
The average pay of Japanese workers after the 0.5 percent increase
Total pay rose 0.5 percent from the previous year to an average ¥3.78 million ($33,673), while the number of hours worked dropped. Regular workers saw an increase in pay, while part timers, who are an increasingly large sector of the work force, saw their income decline 0.1 percent. The rise provided some good news for workers and the government, which has repeatedly exhorted employers to boost workers’ pay to create a virtuous cycle of rising wages and profits that translate into higher spending and inflation. Even so, total pay was still less than in 2014, showing the effect of stingy raises, which are undercutting spending and inflation. Core consumer prices fell in 2016, the first annual decline since
British Prime Minister Theresa May (right) speaks with German Chancellor Angela Merkel as they walk during an event at an European Union summit in Valletta, Malta, on February 3. EU heads of state and government gathered last Friday for a one day summit to discuss migration and the future of the EU. AP/Rene Rossignaud
S. Koreans see China’s ire over missile shield in export hurdles
Split by Brexit, May and Merkel S diverge on wider issues, too
L
ONDON—In another era they could have been allies. Both vicars’ daughters and born just a few years apart, Chancellor Angela Merkel of Germany and Prime Minister Theresa May of Britain share an understated pragmatism and conservative roots, and have made their way in the still largely man’s world of politics. But there could be so much more. At a t ime when President Donald J. Trump is lashing out at friend and foe, and when the macho politics of strongmen is resurgent from Moscow to Manila, when not just the European Union (EU) but high-minded Western values, free trade and security alliances are under attack, the two women might have worked together to defend the liberal global order. Instead, because of Britain’s vote last June to leave the EU, they find themselves on opposite sides of the biggest divorce in recent European history, a chasm that has fundamentally reordered their priorities and is hindering them from cooperating on the broader issues. At a meeting of European leaders in Malta last week, May and Merkel abruptly canceled a planned bilateral meeting after a brief exchange during a sightseeing excursion was deemed enough. After lunch, when it came to discussing the threats facing Europe, May was shown the door. Their differing priorities were on ample display last week as they dealt with Trump and President Recep Tayyip Erdogan of Turkey. Merkel, whose overriding strategic ambition as Germany’s leader is to save the EU, has kept her distance from Trump. After his
election, she firmly outlined the liberal values on which she was prepared to work with him, and she swiftly condemned his travel ban aimed at seven Muslim-majority countries. May, whose priority is to sign bilateral trade deals to offset her country’s departure from Europe’s single market, rushed to be the first foreign leader received by Trump after he took office. Apparently pleased to be caught on camera holding his hand, she extended a speedy invitation for a state visit with Queen Elizabeth II. “Opposites attract,” she beamed. The invitation has since become a polarizing issue in Britain’s sharply divided political landscape, and reinforced a view on the Continent that as Britain cuts ties with Europe, it will become the United States’s lap dog. “It’s chalk and cheese,” said Timothy Garton Ash, a professor of European history at Oxford. “But none of this tells you very much about the contrasting character of the two women. It tells you about the contrasting positions of the two countries.” If Merkel can still afford to be an idealist, Britain’s plan to leave the EU, or Brexit, has turned May into a calculating realist. Within hours of leaving Trump, she was on a plane to
Haruhiko Kuroda took over at the Bank of Japan with a mandate to end deflation. Adjusting for that drop meant that workers actually got a 0.7 increase in income last year, which had fallen in real terms in the previous four years. Last year’s wage gain is welcome news, said Masaki Kuwahara, senior economist at Nomura Securities Co., but shouldn’t be overstated. “It’s good that the increase was high, but it wasn’t that high,” he said. “It’s positive, but I’m not attaching that much importance to it.” The data comes ahead of annual spring wage negotiations between business management and labor leaders. Japan’s labor market is surprisingly tight, with the unemployment rate just a fraction over 3 percent. Key stumbling blocks here are unions and employees who’ve put job security above pay hikes, low productivity in areas of strong demand for workers, and a growing number of people in contract and part-time roles with little bargaining power. “Unions are focused on protecting employment, and they’re not asking for strong wage increases,” Nomura’s Kuwahara said. “No matter how hard the government pushes for higher wages, that won’t change.” Bloomberg News
Turkey. Upon arriving, May waff led in her judgment of Trump’s travel ban, later stiffening her criticism after a public outcry. She also negotiated a deal with Turkey involv ing t he Br itish defense company BAE Systems. Five days later, Merkel paid her own visit to Erdogan and looked far clearer in her resolve when faced with the autocratic Turkish leader, calmly noting that she had raised controversial issues, like press freedom and Turkey’s future constitution. Privately, German officials express some sympathy for May’s sometimes clumsy diplomacy, understanding that she needs new partners if she is to make good on her promise of a “Global Britain”. But only occasionally have there been glimpses of the partnership that might have been. Last July Merkel was almost effusive in welcoming May, who chose Berlin for her first foreign trip as prime minister. The German chancellor emphasized their countries’ “common values”. During a news conference, both women stiffly answered questions about Brexit. Then a journalist asked about their first impressions of each other. Their body language visibly loosened. Merkel laughed, and May said, “We have two women here who, if I may say so, want to get on with the job.” Their shared gender has led to many lazy comparisons, said Rosa Prince, author of a biography of May that is to be published this month. “When you are a female political leader of a certain age, you are inevitably compared to Margaret Thatcher and Angela Merkel,” she said. “Theresa May is nothing like Margaret Thatcher, but as it happens has quite a lot in common with Angela Merkel.” Each cautious and deliberate, t hey are bot h chi ld less, have quiet husbands and enjoy watching sports (Merkel knows
soccer; May prefers cricket). An Oxford graduate and lawmaker since 1997, May was Britain’s longest-serving home secretary of modern times before taking over from Prime Minister David Cameron in the confusion that followed the Brexit referendum. As Prince put it, “She was the last woman standing after all the men got burned or ran away.” Merkel, a scientist before she went into politics, is used to being the only woman in the room. Evelyn Roll, a German biographer of Merkel, said that, on the advice of a German actress, the chancellor had deliberately lowered the pitch of her voice to deter men from talking over her. Both women endured condescension and outright misogyny as they rose. May has been called a “bloody difficult woman” by a fellow minister. Merkel’s predecessor and mentor, Helmut Kohl, patronized her as “my girl”. Even after Merkel unseated Kohl as leader of the Christian Democrats amid a party financing scandal, Germany’s maledominated news media belittled her as efficient but bland—until she took office in 2005 and gradually became “Mutti”, the mother of the nation. “The only way men can process that a woman is in power is apparently to liken her to their mother,” Roll said. Merkel, who grew up in Germany’s former Communist east, has never branded herself a feminist. But on her watch Germany has introduced boardroom quotas for women and created a generous system of paid parental leave shared between mothers and fathers. May once wore a T-shirt that read, “This is what a feminist looks like.” In 2005 May cofounded a group called Women2Win to elect more women to Parliament and then nurture them, something that Thatcher was often criticized for not doing. New York Times Service
outh Korea is increasingly concerned that China may be stepping up economic retaliation over its decision to deploy a US missile shield, and it sees worrying signs in everything from blocked imports of high-tech bidets to the cancellation of music concerts. South Korea’s Finance Minister Yoo Il-ho has said he thinks China may be taking unfair and indirect action in some cases. China opposes the deployment, with a foreign ministry spokesman last month saying it hoped South Korea will “take China’s concern seriously and create better conditions for the normal friendly exchanges between our people.” Higher trade barriers hurt South Korea’s economy, which is relying on exports for growth amid domestic political turmoil that’s crimping domestic consumption. There is little prospect for improvement in the situation, given China’s clear opposition to the high-altitude missile defense system, known as Terminal High Altitude Area Defense (THA AD), and South Korea’s need for strong defense cooperation with the US to counter the threat from North Korea. “China’s government will refrain from saying any of their actions are retaliation, but I see several incidents that can be named as such,” said Shin Jongho, a director at the state-funded Korea Institute for National Unification in Seoul. “I expect these tensions to continue across a wider range of areas.” Shin cited as examples the cancellation of concerts in Beijing, Shanghai and Guangzhou that were planned for Korean soprano Jo Sumi in February. Jo said on her Twitter account that these February events were canceled for no clear reason. The Chinese foreign ministry said it was unaware of the issue. Although China takes a quarter of Korea’s exports, the backlash is yet to appear in the data. The number of Chinese tourists visiting South Korea reached a record 8 million in 2016, and exports rebounded in the past three months. The South Korean government raised its concerns with China on nontariff trade barriers at a
joint committee on the free-trade agreement last month, the trade ministry said. The issues included China extending anti-dumping duties on optical fiber, a rise in disapproval of cosmetics imports, ending subsidies to electric cars with South Korean batteries, and restrictions on flights and tourism to South Korea, according to the statement. Still, the rejection of some cosmetics and toilet seats can partly be attributed to Korean companies not abiding by China’s strengthened rules, according to Kang Jun-young, a professor specializing in China at Hankuk University of Foreign Studies in Seoul. Even so, if diplomatic relations had been better, the Chinese authorities may not have been so strict, he said. China opposes the deployment of the system, claiming it will “seriously damage the regional strategic balance and the strategic security interests of China and other countries in the region,” according to a recent defense white paper. Kang at Hankuk University said China could be exploiting political turmoil in South Korea to increase anti-THA AD sentiment and may hope the next president blocks its deployment. Should the constitutional court approve Park Geun-hye’s impeachment as president, there will be an election sometime before the end of August. Former opposition leader Moon Jae-in is leading in polls, and has said that decisions on THAAD should be handed over to the next administration. US Defense Secretary James Mattis and his South Korean counterpart agreed to deploy the system this year as planned last Friday, according to a text message from the defense ministry. A meeting held the same day by Lotte Group, which owns the site the Korean government chose as the location for THAAD, failed to approve the land transfer to the government, Yonhap reported. One indicator of how serious the issue is will be whether Korean companies are mentioned on China’s name and shame night, when state broadcaster CCTV airs its annual look at consumer complaints and dodgy products. Bloomberg News
Editor: Lyn Resurreccion • www.businessmirror.com.ph
The World BusinessMirror
Tuesday, February 7, 2017
A7
Trump clashes early with courts, portending years of legal battles W ASHINGTON—President Donald J. Trump is barreling into a confrontation with the courts barely two weeks after taking office, foreshadowing years of legal battles as an administration determined to disrupt the existing order presses the boundaries of executive power.
Lawyers for the administration were ordered to submit a brief on Monday defending Trump’s order temporarily banning refugees from around the world and all visitors from seven predominantly Muslim countries from entering the United States. An appeals court in California refused on Sunday to reinstate the ban after a lower court blocked it. As people from the countries targeted by Trump struggled to make their way to the United States while they could, the president for the second day in a row expressed rage at the judge in the case, this time accusing him of endangering national security. Vice President Mike Pence defended the president’s tone, but lawyers and lawmakers of both parties said Trump’s comments reflected a lack of respect for the constitutional system of checks and balances. Late in the day, Trump took to Twitter to preemptively blame the judge and the judiciary for what the president suggested would be a future terrorist attack. “Just cannot believe a judge would put our country in such peril,” Trump wrote, a day after referring to the so-called judge in
the case. “If something happens blame him and court system.” Even before the latest post, Republicans joined Democrats in chiding him. Sen. Mitch McConnell of Kentucky, the Senate majority leader, said it was “best not to single out judges.” “ We a l l ge t d i s a p p o i nt e d f rom t i me to t i me,” he sa id on CNN’s State of the Union. “I think it is best to avoid cr iticizing judges individually.” The White House offered no evidence for Trump’s suggestion that potential terrorists would now pour over the border because of the judge’s order. Since September 11, 2001, no American has been killed in a terrorist attack on US soil by anyone who immigrated from any of the seven countries named in Trump’s order. The impassioned debate over the immigration order brought to the fore issues at the heart of the Trump presidency. A businessman with no experience in public office, Trump has shown in his administration’s opening days that he favors an actionoriented approach with little regard for the two other branches of government. While Congress, controlled by
Arafat Ashegaa, an American citizen of Yemeni descent, his wife Zahrah, a Yemeni citizen who was granted an American visa, and their son Ayhm arrive at John F. Kennedy International Airport in New York on February 5. At the end of a stomach-knotting week of dreams seemingly deferred, beleaguered and exhausted travelers began arriving in the United States after a federal judge issued an emergency stay on President Donald J. Trump’s travel ban. Victor J. Blue/The New York Times
Republicans, has deferred, the judiciary may emerge as the major obstacle for Trump. Democrats and some Republicans said Trump’s attack on the courts would color the battle over the nomination of Judge Neil M. Gorsuch to the Supreme Court, as well as the president’s relationship with Congress. Other presidents have c l a s h e d w it h t h e j u d i c i a r y. The Supreme Court invalidated parts of Franklin D. Roosevelt’s New Dea l, forced R ichard M. Ni xon to tur n over Watergate tapes and rejected Bill Clinton’s bid to delay a sexua l-harassment lawsuit. The last two presidents battled with courts repeatedly over the limits of their power. The judiciar y ruled that George W. Bush overstepped his bounds in denying due process
to terrorism suspects and that Barack Obama assumed power he did not have to allow millions of unauthorized immigrants to stay in the countr y. Charles Fried, solicitor general under Ronald Reagan, said the ruling by a US District Court in Washington state blocking Trump’s order resembled a ruling by a Texas district court stopping Obama from proceeding with his own immigration order. Rarely, if ever, has a president this early in his tenure, and with such personal invective, battled the courts. Trump, Fried said, is turning everything into “a soap opera” with overheated attacks on the judge. “There are no lines for him,” said Fried, who teaches at Harvard Law School and voted against Trump. “There is no notion of, this is in-
appropriate, this is indecent, this is unpresidential.” Other Republicans brushed off the attacks, noting that judges have lifetime tenure that protects them from criticism. But even some Republicans said Trump’s order raised valid legal questions for the courts. “If I were in the White House, I’d feel better about my position if the ban or moratorium or whatever you call it were based on an actual attack or threat,” former Attorney General Alberto R. Gonzales, who served under Bush, said in an interview. Still, he said, when it comes to noncitizens overseas, “the executive has enjoyed great deference from the courts.” Judge James Robart, a US District Court judge in Seattle appointed by Bush, last Friday issued a nationwide suspension of
Trump’s order while its legality was debated. The administration quickly asked the 9th US Circuit Court of Appeals to overrule the judge, but it refused early on Sunday and instead ordered the government to file a brief on Monday. The quick briefing schedule indicated that the appeals court could issue a ruling on the merits of the president’s order within days. In the meantime, refugees vetted by the government can proceed to the United States, as can any travelers with approved visas from the seven targeted nations: Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen. Still, widespread confusion and anger were reported at overseas airports last Sunday. Unsure which orders to follow, airlines stopped even some of the people named in the lawsuits who were technically cleared to come to the country, according to a government official. The assertion of broad latitude by the president in areas of national security resembles the struggles of the Bush years, when in the months after the September 11 attacks the administration claimed sometimes sweeping power in the name of fighting terrorism. Jack Goldsmith, who as head of the Justice Department’s Office of Legal Counsel under Bush argued that some of the initial orders went too far and forced them to be rolled back, said last Sunday that there were similarities. “But Bush ’s legal directives were not as sloppy as Trump’s,” he said. “And Trump’s serial attacks on judges and the judiciary take us into new territory. The sloppiness and aggressiveness of the directives, combined with the attacks on judges, put extra pressure on judges to rule against Trump.” New York Times News Service
Not everyone in tech cheers visa program for foreign workers S
A N F R A N C I S C O —T h e “ knowledge transfer sessions” started a few months after Jeff Tan received notice last summer that he and about 80 coworkers would be laid off by the University of California, San Francisco (UCSF), at the end of February. At daily two-hour meetings with employees from HCL Technologies, an Indian tech services company that had landed the outsourcing contract from UCSF, Tan trained HCL staff members in India by videoconference and employees brought to the United States on H-1B visas how to do his job. More than any other industry, tech companies depend on the 85,000 foreign workers allowed into the United States annually under the H-1B visa program. The H-1B is a temporary visa intended to bring in foreign professionals with college degrees and specialized skills to fill jobs when qualified Americans cannot be found. Technology giants like Microsoft and Google have pressed for increases in the annual quotas, saying there are not enough Americans with the skills they need.But for tech workers like Tan, the program has had very negative consequences. “I thought the pur pose of H-1B visas was to give America a competitive edge, not help companies ship American jobs a broad ,” s a id Ta n , w ho h ad
worked for the university as an i n for m at ion-tec h nolog y ( I T ) systems administrator for 20 years. “ This is now standard practice in the technology industry.” The debate over H-1B visas has gained new urgency as employers prepare for President Donald J. Trump to sign an executive order to overhaul the program. It is not clear what action Trump plans to take, but a draft of a proposed executive order on the matter was leaked last week. It included a passage saying options for modifying the H-1B program would be considered to “ensure that beneficiaries of the program are the best and the brightest.” The H-1B program’s critics say the system provides a way for US companies to turn over technology departments to outsourcing companies. These are gaming the system to snap up the visas so they can replace American workers with less expensive, temporary staff members. A research report by Goldman Sachs estimates that 900,000 to a million H-1B visa holders now reside in the United States, and that they account for up to 13 percent of US technology jobs. In 2014 13 outsourcing firms accounted for one-third of all H-1B visas. They use a loophole in the current first-come, first-served lottery system to flood the applicant pool with their candidates. In many cases, those candidates
are paid slightly more than the $60,000-a-year minimum salary required by the program—but less than what American technology workers make.
85K
The number of foreign workers allowed into the United States annually under the H-1B visa program Audrey Hatten-Milholin, 54, was notified last July that she would be laid off from the University of California, San Francisco, at the end of February after 17 years in its technology department. Along with eight others, she filed a complaint last November with California’s Department of Fair Employment and Housing, charging that replacing her and others with “significantly younger, male” workers “who will then perform the work overseas” was discriminatory. “We are at a disadvantage as Americans,” Hatten-Milholin said. “They look at it like, where can we get it cheaper? And for UC, it’s not here.” Proponents of the H-1B system argue that it is an important vehicle to attract top talent to America.
After coming to the United States, these visa holders may apply their skills to start new companies or create new, innovative products— leading to more jobs in America. The debate over who wins and who loses as a result of the H-1B visa program echoes similar discussions of how free trade helps or hurts the economy. While the benefits are spread broadly throughout the economy, the costs are much more concentrated and easy to identify. In other words, it’s true that cheaper labor helps employers increase profits and grow, and having more skilled workers in the United States contributes to economic innovation. But at the same time, individual American employees do face more salary pressure from newcomers who will work for less. And in some cases, they risk losing their jobs entirely, especially older employees who earn higher salaries. After 11 years working in the IT department of Northeast Utilities, a Connecticut-based company now named Eversource Energy, Craig Diangelo was among 220 employees laid off in 2014. Before leaving the company, he was told he needed to train his replacement if he wanted to receive his severance. Diangelo, who is now 64 and was receiving $130,000 a year in salary and bonus, said he trained an employee from the Indian outsourcing firm Infosys who was an H-1B visa holder making
$60,000 a year. There was also a team of workers in India making $6,000 a year that shadowed him on the computer. “The problem,” he said, “is that my job is still there. I went away. The American worker went away.” A representative of Infosys declined to comment. Al Lara, a spokesman for Eversource Energy, said in a statement: “We made changes to our IT department three years ago during a period of transition and change to support the merger of our two companies while under much regulatory scrutiny. We are proud of the new IT organization.” Lara was referring to a merger with NStar in 2012. In other instances, the jobs are filled only temporarily by H-1B workers—before the outsourcing firm moves the job permanently to a lower-cost country. “ That’s the endgame,” said Sara Blackwell, a law yer representing former employees of Walt Disney Co., Abbott Laboratories and other companies in discrimination claims pertaining to tech-job outsourcing. Some economists are skeptical about the claimed lack of qualified workers, especially an oftcited 500,000 open positions in technology that cannot be filled. “I’m sure employers might not have as much choice as they would like, but if the shortage story were true, we’d see wages rising more rapidly than they are,” said Dean Baker, co-director of the liberal
Center for Economic and Policy Research in Washington. There is substantial unemployment, Baker said, even among workers in socalled science, technology, engineering and math fields. Lawrence F. Katz, a prominent labor economist at Harvard, said companies like the H-1B visa program because it expands the pool of applicants. That means having to pay less in salary and retaining more control over employees. “From the point of view of an economist, there are two big winners,” he added. “The workers who come here with H-1B visas and the companies that employ them.” While it remains to be seen what Tr ump w ill do, var ious members of Congress have proposed measures to change the H-1B system. One idea is to raise the minimum salary of an H-1B worker to $100,000 or more, from the current $60,000 minimum. The hope is that this will narrow the gap between the standard pay for an American tech worker and that of a foreign worker. Another proposed measure is to change the current first-come, first-served lottery system that is benefiting outsourcing firms. Yet,another idea is for a salary bidding system, in which companies bid on what they would be willing to pay an applicant, potentially making it more difficult to flood the applicant pool with lower-cost workers. New York Times news Service
A8
The World BusinessMirror
Tuesday, February 7, 2017
www.businessmirror.com.ph • Editor: Lyn Resurreccion
Afghan civilian casualties rose 3% in 2016, UN says
K
People carrying a puppet depicting the leader of the social democratic party, Liviu Dragnea, attend a demonstration in Bucharest, Romania, last Sunday. Romania’s government met last Sunday to repeal an emergency decree that decriminalizes official misconduct, a law that has prompted massive protests at home and widespread condemnation from abroad. AP/Vadim Ghirda
Romanian protesters seek more changes after decree’s repeal
B
UCHAREST, Romania—The largest antigovernment crowds since the violent 1989 revolution that toppled dictator Nicolae Ceausescu succeeded last Sunday in pressuring Romania’s new government to repeal a hastily adopted decree that would have eased penalties for official corruption.
The law, opposed by the inf luential Romanian Orthodox Church, would have weakened the country’s emerging anticorruption effort, which has begun to make progress against a ruling culture accustomed to acting with impunity. The government backed down last Sunday following six days of street protests, but plans to introduce another version of the law in Parliament, where it would be debated and possibly passed. T he late-night introduction last week of an emergenc y ordinance to tur n a blind eye toward abuse in office by officials if the amount involved was less than about $48,500 provoked a lightning response from Romania’s civ il societ y. Nightly throngs in Bucharest and other major cities pit angry citizens who believe a modern, pro -European Romania must not condone corruption in high places against a moneyed elite that stands to benefit, if the law eventually passes. “We want all people to be equal before the law, and no privileges for the people in Parliament,”
6
The number of days the street protests have been going on said retired engineer Profira Popo, protesting in crowded Victory Square. “This government is organized from the high level to the low like a mafia, and we don’t want something like this.” Opponents see it as legitimizing criminal activity—if it’s done by people with inf luence. It would not only go lightly on future offenses, but take some politicians off the hook for cases pending against them. “The law protects a layer of exCommunist politicians who kept stealing for years,” said software engineer Dorin Popa, 36, who was carrying a somewhat vulgar sign
about the government. He said the tough anticorruption drive, which began in 2008, had “panicked” the ruling elite. “The rule of law is kind of working, so the only thing they can do is change the law,” he said. “They think the Romanian people are fools.” The protests so far have been largely peaceful, even festive. Parents brought young children and large pets, while volunteers distributed fresh-baked sweets to kids bundled up in wool hats and winter wear. Even after the repeal, tens of thousands packed the Victory Square outside the government of f ices l ast Sund ay evening , waving Romanian f lags, blowing horns and carr ying giant puppets of politicians dressed as convicts. They yelled, “You thieves!” and “Resign!” Thousands protested in the cities of Cluj, Timisoara, Craiova, Ploiesti and even in the Moldovan capital, Chisinau. There was also a pro-government demonstration last Sunday as several hundred people gathered around the presidential palace to protest President Klaus Iohannis’s decision to side with the protesters seeking repeal of the measure. One part of the ordinance that gained less attention also would weaken human-rights protections and ease penalties for related crimes. It would have substantially reduced the sentences for officials who violated or restricted the rights of people based on race, religion, disability or HIV status. It would also, in some cases, decr imina lize discr imination committed by officials.
C luj Cour t Judge Cr isti Da ni let, a for mer member of the Supreme Counci l of Mag ist rates, sa id t he c ha nges wou ld open the door to f uture abuses a nd “creates t he possibi l it y of issu ing rac ist leg isl at ion.” Amid the sounds of the Romanian national anthem and the red, yellow and blue colors of the national flags waving at Victory Square, gymnasium owner Cornel Sain, 53, carried an American flag. Sain said he wanted to thank US officials for calling for a repeal of the law. He said the huge crowds of the last six days reminded him of the 1989 revolt that ushered in the post-communist era as Soviet rule collapsed in Romania and much of Eastern Europe. “This fight is different than 1989—no bullets, no casualties. It’s a moral fight. But it’s almost as important,” Sain said. “That fight was...with death and suffering. This is a fight for hope.” R om a n i a’s Con s t it ut ion a l Court is still scheduled to rule on the legality of the just-repealed proposal. Among those it might have benefited is Social Democratic Party leader Liviu Dragnea, whose path to becoming prime minister is effectively blocked by corruption charges. Prime Minister Sorin Grindeanu, who is also a Social Democrat, said the draft should respect the court’s rulings, European directives and Romania’s criminal code. Sain said the new government, in power just one month, must step down despite its reversal on the emergency decree. “It’s too late,” he said of the government’s about-face on the new law. “Their credibility is zero.” AP
7% of Australian Catholic priests accused of abuse
S
YDNEY—Seven percent of priests in Australia’s Catholic Church were accused of sex ua l ly abusing chi ldren over the past several decades, a lawyer said on Monday as officials investigating institutional abuse across Australia revealed for the first time the extent of the crisis. The statistics were released during the opening address of a hearing of Australia’s Royal Commission into Institutional Responses to Child Sexual Abuse. The royal commission—which is Australia’s highest form of inquiry—has been investigating since
2013 how the Catholic Church and other institutions responded to the sexual abuse of children over decades. The commission has previously heard harrowing testimony from scores of people who suffered abuse at the hands of clergy. But the full scale of the problem was never clear until Monday, when the commission released the statistics it has gathered. Commissioners sur veyed Catholic Church authorities and found that between 1980 and 2015, 4,4 4 4 people repor ted they had been abused at more t han 1,000 Cat hol ic inst itu-
t ion s ac ros s Au st r a l i a , s a id Gail Furness, the lead law yer assisting the commission. The average age of the victims was 10.5 for girls and 11.5 for boys. Overall, 7 percent of priests in Australia between 1950 and 2010 were accused of sexually abusing children, Furness said. Francis Sullivan, CEO of the Truth Justice and Healing Council, which is coordinating the Catholic Church’s response to the inquiry, said the data reflected “a massive failure” by the church to protect children. “These numbers are shocking, they are tragic and they are indefensible,” a tearful
Sullivan told the commission. “As Catholics, we hang our heads in shame.” The Vatican has watched the proceedings closely. Cardinal George Pell, who was Australia’s most senior Catholic before becoming Pope Francis’s top financial adviser, has testified at previous hearings about how church authorities responded to allegations of child sex abuse during his time in Australia. Several senior Australian Catholics will be testifying over the next few weeks. The commission’s final report is due by the end of this year. AP
ABUL, Afghanistan—The number of civilians killed and wounded in Afghanistan’s conflict rose by 3 percent in 2016 compared to the previous year, the UN mission said in its annual report released on Monday. The UN 2016 Annual Report on the Protection of Civilians in Armed Conf lict in Afghanistan was released on Monday. It says that between January 1 and Deccember 31, 2016, the mission documented 11,418 civilian casualties—3,498 deaths and 7,920 wounded. That marked a 2-percent decrease in civilian deaths and a 6-percent increase in civilians wounded, amounting to an overall 3-percent increase in casualties compared to 2015. The United Nations Assistance Mission in Afghanistan (Unama) said in the report, “Conflict-related violence exacted a heavy toll on Afghanistan in 2016, with an overall deterioration in civilian protection and the highest-total civilian casualties recorded since 2009, when Unama began systematic documentation of civilian casualties.” Unama recorded 3,512 casualties among children, with 923 deaths and 2,589 wounded—a
24-percent increase from 2015, and the highest number of child casualties recorded by Unama in a single year. The report said the disproportionate rise in child casualties across Afghanistan in 2016 resulted mainly from a 66-percent increase in casualties from leftover or discarded munitions. “This appalling conf lict destroys lives and tears communities apart in every corner of Afghanistan,” the report quoted Tadamichi Yamamoto, United Nations special representative of the secretary-general for Afghanistan, as saying. “Real protection of civilians requires commitment and demonstrated concrete actions to protect civilians from harm and for parties to the conflict to ensure accountability for indiscriminate and deliberate acts of civilian harm.” Unama attributed 61 percent of civilian deaths and injuries to what it called antigovernment elements, mainly the Taliban, and 24 percent to pro-government forces. Of those pro-government forces, it attributed 20 percent to the Afghan national security forces, 2 percent to pro-government armed groups and 2 percent to international military forces. AP
Trump’s Supreme Court pick adheres closely to Constitution
J
udge Neil Gorsuch recalls being blinded by tears in the middle of a ski run after someone rang his cell phone with news of the unexpected death of Supreme Court Justice Antonin Scalia. The reaction illustrates not only the depth of Gorsuch’s admiration for his mentor but also how thoroughly he has modeled his conser vative constitutionalist views after Scalia. “ I i m me d i at e l y lo s t w h at breath I had,” Gorsuch, who sits on the 10th US Circuit Court of Appea ls, said in a speech last Apr il. “A nd I am not embarrassed to admit that I cou ldn’t see the rest of the way down the mountain for the tears.” One year later the 49-year-old Colorado native is President Donald J. Trump’s pick to replace Scalia, as the Republican leader heeded calls by many conservatives to find someone as near to a Scalia philosophical clone as possible. Like Scalia, Gorsuch believes judges must focus primarily on the text of the 230-year-old Constitution and resolve legal disputes by following the Founding Fathers’ intentions. Gorsuch has said that if judges factor in personal beliefs, societal changes or calculations about maximizing social welfare, they risk becoming “little more than politicians with robes.” Gorsuch, who once went flyfishing with Scalia, said Scalia helped remind Americans about the roles of judges and lawmakers. In a speech last year at Case Wester n Reser ve Un iversit y, Gorsuch said that message was that “legislators may appeal to their own moral convictions and to claims about social utility to reshape law.... But that judges should do none of these things in a democratic society.” Scalia, who died last February, was a leading proponent of originalism, an approach that seeks to resolve constitutional disputes by focusing on the document’s text, its historical context and the framers’ intentions. Originalism often is viewed as a conservative philosophy, but adherents can often hold strong civil libertarian views. Scalia, for example, held that flag burning was protected speech. Scalia frequently complained that the concept of originali sm w a s m i su nderstood . He e x pl a i ned t h at a n emph a si s
on text and historical context is f lexible enough to be applied to moder n phenomena like radio and the Inter net. A nd he said or ig ina lism left open avenues for change, including through c o n s t it ut i o n a l a m e n d m e nt s and leg islation. “You want to create new rights and/or destroy old ones?” Scalia asked in a 1996 speech. “A legislature and the electoral franchise are all that you need. The only reason you need a constitution is because there are some things which you don’t want a majority to be able to change.” Originalism’s critics say judges should treat the Constitution as a living, breathing document that’s able to encompass society’s evolving values. An example of this approach is the 2015 Supreme Court ruling that says constitutional rights to due process and equal protection supports a right to same-sex marriage. In his dissent, Chief Justice John G. Roberts Jr. wrote that the Constitution “had nothing to do with” that ruling by the court majority. In his 2016 speech, Gorsuch also quoted Scalia as saying that, to be a good judge, “you have to resign yourself to the fact that you’re not always going to like the conclusions you reach. If you like them all the time, you’re probably doing something wrong.” Despite his adherence to a conservative legal philosophy, Gorsuch has also warned against rigidity. When asked at his 2006 confirmation hearings for the appeals court about the kind of judge he considers unacceptable, Gorsuch answered: “Someone who is not willing to listen with an open mind to the arguments of counsel, to his colleagues and to precedent.” But Gorsuch ’s tendency to harken back to the framers is ref lected in his shar p criticism of the Chevron doctrine, which holds that judges should defer to fe der a l de pa r t me nt s a nd agencies to fill in the blanks of certain laws, including on immigration and the environment. The framers, Gorsuch wrote last year, intended for lawmakers to make the laws, executives to execute them and judges to decipher their meaning. “A government of diffused powers, they knew, is a government less capable of invading the liberties of the people,” he wrote. AP
news@businessmirror.com.ph
AseanTuesday BusinessMirror
Vietnam allows betting on intl soccer matches
V
ietnamese gamblers will soon be allowed to place bets on international soccer competitions under a pilot project. Under the decree signed by Prime Minister Nguyen Xuan Phuc that takes effect by the end of March, Vietnamese over 21 years of age will be allowed to place bets of up to $44 a day, with a minimum bet of 44 cents. The government will allow only one company to do this business during the five-year trial period and that company must have an investment capital of at least 1 trillion dong ($44 million). After the five-year period, the government will decide whether to continue the arrangement. The decree also allows betting on local horse and dog races. Last month the government issued a decree allowing local people into casinos, which had been open only to foreigners. Vietnam has long banned most types of gambling, but Vietnamese
$44
The maximum bet a day that a Vietnamese over 21 years old can place on soccer competitions
are passionate about soccer and bets on European soccer games are very common. There are no official figures on how much money have been placed on illegal soccer bets, but police nationwide have busted multiple illegal soccer betting rings in recent years. Last June the police in central Quang Binh province arrested 13 people for their involvement in a ring that organized bets on European soccer, with betting amounting to $132 million. AP
Editor: Max V. de Leon • Tuesday, February 7, 2017 A9
Indonesia economy grows less than forecast on spending cut
I
ndonesia’s economy expanded less than forecast in the fourth quarter, as government spending was curbed by a legal cap on the fiscal deficit.
GDP rose 4.94 percent in the fourth quarter from a year earlier, the statistics bureau said in Jakarta on Monday. The median estimate of economists was for a 5-percent growth. GDP declined 1.77 percent in the fourth quarter from the previous three months, while economists expected a contraction of 1.8 percent. The economy grew 5.02 percent in 2016, matching forecasts. Mean-
while, growth for 2015 was revised to 4.88 percent, from 4.79 percent, as government spending fell 4.05 percent in the fourth quarter from a year earlier, while household consumption grew 4.99 percent
Big picture
Southeast Asia’s biggest economy is still undershooting President Joko Widodo’s growth target of 7 percent, amid a slowdown in China and lower
Bangladesh sticks to plan to relocate Rohingya
5.02% Indonesia’s fullyear 2016 growth
commodity prices. That’s even after the central bank cut rates six times last year in a bid to boost lending and growth. While the economy is expected to pick up this year, with the International Monetary Fund forecasting a 5.1-percent growth, the government is warning of headwinds from global uncertainty, including from policies being introduced by US President Donald J. Trump.
B
angladesh is sticking to its plan to relocate Rohingya Muslims, who fled Myanmar in the face of persecution, from overcrowded and unhealthy camps in a southern coastal district to a low-lying island still not ready for human habitation. Foreign Minister A.H. Mahmood Ali briefed about 60 diplomats and representatives of various agencies and sought their help to relocate the Rohingya to Thengar Char in eastern Bangladesh, a government statement said on late Sunday. More than 300,000 Rohingya Muslims have been living in Bangladesh for decades while about 66,000 more have crossed the border since October, amid renewed persecution and targeted attacks by soldiers and majority Buddhists in Myanmar’s Rakhine state. The low-lying island proposed for the new camp is difficult to reach without boats and often becomes flooded. The United Nations said over the weekend Myanmar security forces are “very likely” to have committed crimes against humanity against Rohingya Muslims in recent months, citing an unprecedented upsurge in violence, such as gang rape and brutal killings of children as young as 8 months old, at times before the eyes of their own mothers. UN human rights chief Zeid Ra’ad al-Hussein commissioned a “flash report “ that was released last
360,000 The estimated number of Rohingya Muslims that sought refuge in Bangladesh
Friday based on scores of interviews last month and indicates that violence against the long-persecuted Rohingya has reached a new level. Zeid urged the government of Buddhist-majority Myanmar— which has generally ignored international appeals to take action—to “immediately halt these grave human-rights violations.” The report, which will raise pressure on the governing party of Nobel Peace Prize-winning Aung San Suu Kyi, is based on harrowing accounts from over 200 people among an estimated 66,000 Rohingya who have fled to neighboring Bangladesh since October, when Myanmar’s military began a crackdown following attacks on border posts. The report said the violence against the Rohingya has been widespread and seemingly systematic, involving killings, enforced disappearances, torture, rape and other sexual violence, arbitrary detention and deportation, “indicating the very likely commission of crimes against humanity.” “Things like this have been
happening throughout,” Ilona Alexander, a member of the UN investigating mission, said at a news conference. “But from what we have gathered, the [recent] level is unprecedented.” Rights office spokesman Ravina Shamdasani said the vast majority of the people interviewed reported witnessing killings. “Of the 101 women interviewed, more than half reported having suffered rape or other forms of sexual violence,” she said. The report’s authors said most of the people interviewed accused the security forces, not civilians, of the crimes. Violence in 2012 between ethnic Rakhine Buddhists and Rohingya Muslims left scores dead and forced well over 100,000 people, mostly Rohingya, to flee their homes for refugee camps, where most still remain. The UN Office of the High Commissioner for Human Rights headed by Zeid said reports indicate the intensity and frequency of security forces’ operations have been declining so far this year but are still continuing. “The violence is still ongoing, people are still fleeing,” mission leader Linnea Arvidsson said. “The most important thing that needs to happen now is for this to stop.” Myanmar authorities have been presented with the allegations in the report, but have not immediately responded. They have faced many accusations in recent months that
soldiers and police have killed and raped Rohingya and burned their homes, and were targeting people based on their religion and ethnicity. Mosques were occupied by soldiers, used as sites for rape or burned down, the report said. Shamdasani cited “especially revolting” accounts that children were “slaughtered with knives”, and said one 8-month-old infant was reportedly killed while his mother was gang-raped by five security officers. “What kind of hatred could make a man stab a baby crying out for his mother’s milk?” Zeid said in a statement. He deployed the investigating team to Bangladesh, which authorized their visit, after Myanmar’s government denied repeated requests for access to the worst-hit areas of Rakhine state. The region is also almost totally closed off to journalists. A number of Muslim-majority countries have expressed concern about the treatment of the Rohingya. Last Friday Malaysian Prime Minister Najib Razak sent off a ship carrying 2,200 tons of aid for them. “The Food Flotilla for Myanmar” will deliver supplies to officials in Yangon, Myanmar’s main city, and then sail to Bangladesh. “We want to make a statement, which is enough is enough of all the sufferings of the Rohingya, enough is enough, enough is enough,” Najib said at the launch. AP
The recent rise in commodity prices has provided a strong terms-of-trade tailwind, said Weiwen Ng, an economist at Australia & New Zealand Banking Group Ltd. in Singapore. “This, along with a stabilization in domestic demand, has mitigated the negative impact that fiscal spending cuts—needed to minimize fiscal slippage in 2016—have on Q4 growth.” The data is disappointing with growth now expected to remain stuck at about 5 percent over the next couple of years, as policy-makers run out of scope for further stimulus, said Gareth Leather, senior Asia economist at Capital Economics Ltd. in London. “The upshot of all this is that while growth is unlikely to slow further, we don’t expect it to accelerate either,” Leather said. Bloomberg News
Singapore wrestles with corporate life support
T
Volunteer members wave good-bye from the deck of Nautical Aliya vessel before setting out on an aid mission at the Boustead Cruise Centre port in Port Klang, Malaysia, on Friday. The vessel left the port en route to Myanmar carrying tons of humanitarian aid, consisting foods and medical supplies, to be distributed to ethnic minority Rohingya. AP
Economist takeaways
he going-concern issue is becoming a problem in Singapore. Ezra Holdings Ltd., an oil-services company, was the latest to indicate it faces debt hurdles that require a restructuring. Under Singapore law, as in the US, that could mean a stay on interest payments until creditors and shareholders agree on a balance sheet that allows the company to keep operating and eventually to pay most of its dues. Specialized courts and judges also should lead to better outcomes, which is partly why the city-state is trying to become a regional hub for restructuring. This doesn’t always work. While the legal system is well-versed in the challenges of debt defaults, creditors are new to the game. In their enthusiasm to get a result, bondholders and banks are pushing companies into liquidation, the worst outcome for all stakeholders. Another oil-services firm, Swiber Holdings Ltd., has started liquidating a unit because creditors so far have failed to agree on an amicable restructuring. A container-shipping company, Rickmers Maritime, perhaps is the best example of what’s going on. It offered noteholders a plan to replace 60 percent of the value of their bonds for shares in the company and change the maturity of the remaining amount to 2023, with a rising rate that started at 2.7 percent and maxed out at 5.2 percent. That compares with the original coupon on the bonds of 8.875 percent, with a 2018 maturity. Last December two-thirds of the bondholders voted against the proposal. It’s all about capital structure. Secured lenders get first dibs, as they can claim any amount raised from selling assets that were backing loans. Next come unsecured claims, both loans and bonds. Shareholders are left with what remains, which might be nothing. It’s unclear what kind of deal was being offered to Rickmers’s unsecured lenders, but since the Decem-
ber vote, the company agreed to sell at least two of its vessels to repay secured loans. It’s not as if this is the best scenario for the banks, either. Rickmers said the deal to sell one of the ships, the Kaethe C. Rickmers, requires an impairment of $31.6 million against book value. It’s hard to know the number on the balance sheet for that ship, but the discount on the sale was more than six times a previous impairment, when charter rates plunged by more than half. Even secured lenders suffer when assets are sold in a hurry. The lesson, learned long ago by seasoned investors in distressed companies, is simple: Liquidations reduce the recovery value for everyone. But Singapore investors are neither focused on this nor are experienced in it. Making matters worse, the great majority of bonds are held by private individuals, who are less likely to accept a deal that they see as giving them lower recovery. In the US, by contrast, corporate bonds are held mainly by funds and insurers. They have a much higher tolerance of losses because their portfolios are big and diversified. When stress is evident, they sell those notes to hedge funds that specialize in court restructurings. Losses can be deep, but the securities can be passed on to pros who can wait years to turn a profit. Banks in the US are also more used to dealing with trouble, so they know it’s best to reach an agreement with the (less numerous and savvier) bondholders than to send the company into liquidation. In Singapore those making the best returns from the recent round of stress are institutions that specialize in liquidation and insolvency management, usually accounting firms. For all its aspirations to become a role model for restructuring, Singapore will need to overcome the challenge of dealing with its own companies and investors. This column does not necessarily reflect the opinion of Bloomberg LP and its owners. Bloomberg Views
A10 Tuesday, February 7, 2017 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
Logged out
I
n 1991 massive flooding and landslides brought on by a strong typhoon resulted in the deaths of nearly 8,000 people in Ormoc City, Leyte. The Ormoc tragedy, as it became known, was largely blamed on logging and deforestation. Calls for a total logging ban rang loud in the halls of Congress and Malacañang then.
In 2004 hundreds of people died in floods and landslides in Quezon, Aurora and Nueva Ecija after a series of storms. Blame was again cast on loggers who have stripped forests bare and turned lowland villages into death traps. Politicians talked all over again of enforcing a total logging ban. What do they say about people who do not learn the lessons of history? They are doomed to repeat them. So, here we are again. Expressing his anger over the unabated logging that reportedly is also to blame for the massive floods that recently claimed lives and destroyed properties in Northern Mindanao, President Duterte reportedly told Environment Secretary Regina Paz L. Lopez during a Climate Change Commission meeting last week to “stop all logging operations with no exemptions”. The President ordered the departments of Environment and Natural Resources, Agriculture and of the Interior and Local Government to form a committee to create the implementing rules of a nationwide logging ban. We will not tire from saying this, shouting it from the rooftops even. Skewed public policies can lead to the creation of disasters. It is not just climate change and the weather. We have suffered one tragedy after another as a result of rampant logging and, yet, what have we done to prevent the next? Administrations have responded in a reactive manner that did nothing to prevent further disasters. Lessons should have been learned after what happened in Leyte, Aurora, Quezon, Nueva Ecija and many other provinces. Floods and landslides are not just natural, but man-made, disasters. They are rooted in poverty, corruption and environmental abuse. For as long as we do nothing to significantly reduce these problems then we would keep repeating the tragic mistakes of history. So another total or partial logging ban by another administration is now in the works. Over two decades ago, during public hearings in the Senate, thenSen. Orly Mercado noted that there’s hardly any difference between illegal loggers and legal loggers. He said the only difference is that the so-called legal loggers have the political clout to get timber license agreements. Indeed, for years environment groups have blamed legal logging for the denudation of Philippine forests. They say logging companies have used their legally allocated cutting permits to illegally access logs in areas outside the official limits of their permits. Enforcing partial logging bans is actually more difficult than enforcing total logging bans. To begin with, primary forests from which absolutely no logging must be done have not been properly or clearly identified by the government. Also, the government does not have the manpower to monitor logging activities in restricted areas. Even if they have people in these areas, they’re usually no match to the military might big-time loggers wield. Another thing is, once the timber is cut, even the stolen can become legally clean. Forest laws around the world have hardly been enforceable. This is why logging has been generally unsustainable. In pursuing a total or partial logging ban, therefore, the question is not whether it is right but whether it is enforceable. Coming out with any kind of ban is one thing and having it followed is another. In the real world, implementing the law has less to do with justice than with strategy. For instance, could the people responsible for forest management implement any ban successfully given the poor implementation of present forestprotection laws? If present laws can only be strictly implemented, the impact would already be similar to a total logging ban. Also, for a lot of people in upland communities, logging is the only way to feed their families. So any policy solution must provide for the creation of alternative jobs and community support for them. There must be incentives for compliance that would be more attractive to logging. We know what we must do, the really hard part is doing it. There is no alternative but to try to rehabilitate the damage that our inaction has caused the environment, our forests, in particular. The government, in the past, has been the last to act on rampant logging and our people have paid for its neglect dearly with their lives.
Since 2005
BusinessMirror A broader look at today’s business ✝ Ambassador Antonio L. Cabangon Chua Founder
Publisher Editor in Chief Managing Editor Associate Editor News Editor City & Assignments Editor Senior Editors
T. Anthony C. Cabangon Jun B. Vallecera
Ruben M. Cruz Jr. Angel R. Calso
Creative Director Chief Photographer
Eduardo A. Davad Nonilon G. Reyes Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Marvin Nisperos Estigoy Aldwin Maralit Tolosa Dante S. Castro
Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines. Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025. (Advertising Sales) 893-2019; 817-1351, 817-2807. (Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.
www.businessmirror.com.ph
Printed by brown madonna Press, Inc.–San Valley Drive KM-15, South Superhighway, Parañaque, Metro Manila MEMBER OF
THE Entrepreneur
Continued from A1
D
espite these endowments and advantages, our economic growth has lagged behind the country’s neighbors, such as Malaysia and Thailand. Based on its performance in 2016 and estimates for 2017, the Philippines is being touted as the fastestgrowing economy in Southeast Asia, and one of the leaders in Asia. In terms of stage of economic development, however, the Philippines is still catching up with its peers. There is no mystery behind the catching-up status. Local and foreign economists, including multilateral agencies, like the World Bank and Asian Development Bank, have been pointing to inadequate infrastructure as the major barrier to the inflow of investments throughout the country. True, the government did not have enough resources in the past to finance infrastructure projects, which generally require substantial funds. This is no longer true today, or in recent years, because the growing economy—notwithstanding inadequate infrastructure in many areas—as well as reforms, helped
the government increase its financial capacity. In 2011 the government launched the Public-Private Partnership (PPP) Program to undertake big-ticket infrastructure projects. The belief is that the participation of the private sector will accelerate infrastructure development. It did not happen as expected. With the availability of funds (from the private sector) and the partnership with private companies, an old problem only became more evident: implementing infrastructure projects has been a long, tedious process. The first project under the PPP program is a good example. The Muntinlupa-Cavite Expressway (MCX), a 4-kilometer toll road, was awarded in December 2011 and was
completed in the middle of 2015. Roughly, it took 12 months to complete each kilometer of the project. In addition to the MCX, the PPP Center’s web site lists three other completed PPP projects, namely, the PPP for School Infrastructure Project-Phase I, Automatic Fare Collection System and the Ninoy Aquino International Airport Expressway Project (Phase II). With the financing part no longer a major worry, President Duterte’s economic team is confronting the implementation part. The President has vowed to reduce poverty, and he recognizes that the way to achieve this is to accelerate economic growth, which requires accelerating infrastructure development. Instead of relying solely on the PPP, which had been the previous administration’s flagship infrastructure program, the Duterte administration is opting to avoid the PPP scheme if the government can undertake the project by itself. The Department of Public Works and Highways (DPWH), according to Finance Secretary Carlos D. Dominguez III, would implement some projects because these could be approved faster and would entail lower costs than if these projects were done under the PPP Program. The DPWH has already been tasked to directly undertake two road-widening projects in Bulacan and north of Manila, totaling about
Government should not be fair John Mangun
OUTSIDE THE BOX
Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos
BusinessMirror is published daily by the Philippine Business Daily Mirror
HOM
Manny B. Villar
Max V. de Leon Jennifer A. Ng Dionisio L. Pelayo Vittorio V. Vitug
Online Editor Social Media Editor
Chairman of the Board & Ombudsman President VP-Finance VP Advertising Sales Advertising Sales Manager Group Circulation Manager
Creative solution: A two-pronged approach to infra
T
he government of Singapore is as close as any nation has come to being led under a “benevolent dictatorship”. That term has been used to describe a theoretical form of government, where an authoritarian leader with near-absolute political power wields that power for the benefit of the population as a whole. The Singapore that I lived and did business in during the early-1980s is not the Singapore of today. Smoking was allowed in bars, most restaurants and nightclubs. The Philippines passed its Tobacco Regulation Act in 2003. Singapore did not ban smoking in those places until 2007. Visiting tourists were able to have a cigarette with their beer and the government knew that. Intellectual-property piracy was a concern and illegal in all advanced countries of which Singapore was supposed to be a part. Yet, while not actively encouraging it, the
government turned a blind eye to the fact that on virtually every street corner you could have a cassette tape made-to-order. The government knew that tourists dropped an extra $10 or more buying this pirated music to take home. At that time there were 320 companies making legal cassettes. Today there are 882 companies producing legal music. Legal cassette sales back in the 1980s were limited only to those that wanted and were willing to pay much more for better quality. However, even then littering laws were harsh and strictly enforced. The
government wanted to maintain its reputation to the tourists that Singapore was one of the cleanest cities on earth. That was good for business, as was illegal music. The problem with the government trying to make policies that are “fair” is that overall excellent performance is hampered and delayed. Lee Kuan Yew said: “At the end of the day, the basic problem of fairness in society will need to be solved. But, first, we have to create the wealth.” Which policy makes more sense? “The price of rice should be no more than P10 per kilo to help the urban poor working family”. “The farmgate price of rice should be no less than P50 per kilo to help the rural poor farming family”. So the government walks the middle line and neither the urban poor nor the rural poor see much positive economic change in their lives, which is probably not fair either. Is there a rational solution? Maybe none. But today being fair means catering to the most powerful vested interest. The proposed US Border Adjustment Tax stands to greatly benefit exporters, who would pay no taxes
40 kilometers.Under the PPP Program, a project usually takes 13 months to get going because of the time spent for bidding and contract negotiations, Sometimes, even 13 months may not be enough to get a PPP off the ground, because of possible challenges from losing bidders or questions raised by some groups. Also, proponents of a PPP project may request for changes in the contract while construction is already ongoing, which results in further delays. We are not abandoning the PPP Program, under which numerous projects, like expressways and airports, will be implemented with the private sector as the lead partner. At the same time, the simultaneous implementation of other projects by the DPWH and other agencies gives the government a twopronged approach to infrastructure development. This is what I call a creative solution, which can only be expected to accelerate economic development. Hopefully, the Philippines would achieve not just fast growth, but reach the same economic status as its current wealthier neighbors. (Note: BMI Research, which was cited in my January 24 column, is a unit of Fitch Group, instead of international credit-rating agency Fitch.) For comments, e-mail mbv.secretariat@gmail. com or visit www.mannyvillar.com.ph.
on exports. US importers would be hit with 15 percent to 20 percent higher duty. On one hand is the noble-sounding Americans for Affordable Products who oppose it. On the other side is the also noble-sounding American Made Coalition. Americans for Affordable Products is an alliance of more than 100 retailers, including Wal-Mart, Best Buy and Target. The American Made Coalition includes US exporters, Boeing, Dow Chemical, and pharmaceutical companies Eli Lilly and Pfizer. Both sides are claiming that the government must be “fair” to their own interests. Each side proclaims that their interests are the best for the people and the country. Lee Kuan Yew did not put “fairness” on his todo list. In 1986 he said, “What are our priorities? First, the welfare and survival of the people. Then, democratic norms and processes, which from time to time we have to suspend.” E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.
Opinion BusinessMirror
opinion@businessmirror.com.ph
Tuesday, February 7, 2017 A11
Breakdown in peace process Democracy, inequality and an indifferent elite Ernesto M. Hilario
ABOUT TOWN
I
’m not surprised at all that the peace talks between the government and the communist-led National Democratic Front of the Philippines (NDF) has been terminated by President Duterte.
I would even say that it was doomed right from the start. Why do I say this? It’s been a one-way street from Day One, with Duterte offering concessions to the NDF but getting nothing from the other side in return. After assuming office, Duterte talked by phone to Jose Ma. Sison, the Communist Party of the Philippines (CPP) founding chairman, who was his professor at Lyceum University way back in the 1960s. It was during this conversation that they both agreed to resume the stalled peace talks. The peace talks between the government and the NDF had actually begun in 1987, but was scuttled in the aftermath of the Mendiola Massacre. It resumed only in 1995, but was also terminated after the arrest of a ranking communist leader who was later killed by the New People’s Army (NPA). The talks restarted during the Benigno “Noynoy” S. Aquino III administration but were terminated again after the chief government negotiator simply gave up, frustrated at the intransigence of the other side. Soon after the phone conversation, Duterte said he was willing to give government positions to nominees of the NDF as a confidence-building measure and to show his sincerity and goodwill in getting the negotiations off the ground. Thus, two Leftist personalities were named secretaries of the departments of Agrarian Reform and of Social Work and Development. Another was appointed as undersecretary in the labor department and still another to head the National AntiPoverty Commission. What the NDF should have done was to respond in kind, to reciprocate this confidence-building measure by the government with a similar move. There was none. There was no pledge to, say, stop the so-called revolutionary taxation imposed on business enterprises, including mining firms, in the countryside. Even as the peace talks finally got going under the aegis of the Norwegian government, I noticed other red flags that indicated a possible rupture in the relations between the government and the NDF. The NDF side floated the idea of a coalition government once a comprehensive peace agreement had been reached. They did not elaborate on what they meant by a “coalition government”, but it seemed as though they wanted co-equal status under such a government, with communist leaders holding half the politicial power—and half of the national budget. They did not explain their concept of power sharing under a coalition government.
Another red flag was the statement of the chief NDF negotiator at the time that the NPA would not agree to give up their arms even after a comprehensive peace agreement had been signed, as they wanted the agreed-upon social, economic, political and constitutional reforms to be already in place, say, after at least two years, before they finally turn over their firearms to a third party. Even if it denies setting any preconditions for the peace talks, the NDF insisted on the release of more than 400 political prisoners before agreeing to a bilateral cease-fire. Meanwhile, even as the talks were ongoing, there was an incident of busburning in Mindanao attributed to the NPA. Just recently, the rebel group attacked the security office of a property development project in Batangas and seized firearms and equipment. The last straw for Duterte was the death of an army officer in a clash between the NPA and government troops in an encounter last week somewhere in Mindanao. All this raises the question: Is the CPP-NPA-NDF serious in achieving peace through negotiations? A CPP paper back in the 1980s on this issue, if I recall right, said the revolutionary movement can conduct peace talks with the government but without losing sight of the ultimate objective, which is the seizure of political power through the barrel of the gun. This means that peace negotiations are a mere tactic to gain propaganda mileage and win political points at government’s expense. Duterte has not only terminated the formal peace talks with the rebels, he has also declared the CPP-NPA-NDF a terrorist organization, and wants all those he released from prison to turn themselves in to authorities. I don’t think the NDF “peace consultants” will do that; most likely is that they have already gone underground. What happens now to the Leftists in the government? As they are there as a confidence-building measure by Duterte, I think they have no other choice but to tender their resignation. With full-scale war between the government and the NPA in the horizon, hopes for peace in the countryside have been dashed to the ground. This is an unfortunate development. Both sides can try to patch up their differences, but I think the gap between them is just too wide at this point, and the essential first step is a bilateral cease-fire. As experience has shown, fighting while negotiating simply doesn’t work.
E-mail: ernhil@yahoo.com.
Edgardo J. Angara
F
reedom in the Philippines is declining, according to Freedom House’s most recent report Freedom in the World 2017. The report cited the thousands of extrajudicial killings committed since the start of the President’s war on drugs as the primary reasons for the downward trend. The report also identified the Philippines as among countries that “may be approaching important turning points in their democratic trajectory, and deserve special scrutiny during the coming year.” Others in that category are Iraq, Zimbabwe, Kyrgyzstan and Tanzania.
The ongoing debate over the current administration’s drive against drugs and criminality is important, especially for its impact on our democracy as a whole. But we should not overlook the underlying cause of our nation’s malaise—the yawning gap between the few who are very rich and the millions of Filipinos who struggle daily to survive. A 2010 study led by Romulo Virola, former secretary-general of the National Statistical Coordination Board (NSCB), found that only 0.1 percent, or 19,738 Filipino families, belong to the high-income group, with an average monthly income of P194,965. In contrast, 80.8 percent, or 14.07 million families, belong to the low-income group with an average monthly income of only P7,513. The 2015 Family Income and Expenditure Survey (FIES) shows that the income of the richest 10 percent of the population is nine times more than the income
of the poorest 10 percent. The total net worth, in fact, of Forbes’s 10 richest Filipinos for 2016 is $53 billion, or P2.63 trillion, which is almost 20 percent of the country’s GDP. In fact, their total net worth is just P372 billion shy of the 2016 national budget (P3.002 trillion). Exacerbating the problem appears to be a largely disconnected—if not entirely indifferent—elite, comprised of both the wealthy and powerful. To be clear, a 2011 Economist Intelligence Unit (EIU) report noted that the Philippines has among the longest recorded histories of organized giving in Asia, while a 2014 Singapore Management University study on Southeast Asian philanthropy noted that the Philippine philanthropic sector is fairly mature compared to its neighbors. But when one looks at the charities the rich and powerful pursue and spend for, the projects are repetitive and duplicative. For instance, some large business
Here they go again Cecilio T. Arillo
database
T
HE recent move by antismoking buffs urging the Bureau of Internal Revenue (BIR) to conduct a third-party audit on the oldest Filipino-owned Mighty Corp. (MC), whose cigarettes ate away a large portion of its multinational rivals’ market in recent years, is an old discredited idea. In July 2014 antitobacco advocates came up with an idea to allow third-party auditors and examiners to look into the operations of MC, through a so-called congressional resolution, but then BIR Commissioner Kim S. Jacinto-Henares shot it down, telling them she cannot allow them to encroach on a very sensitive function of the BIR. Henares ex pressed ser ious concern over the accountability of the private examiners if ever it would be allowed to conduct parallel investigation. She explained that the BIR has revenue officers assigned to cigarette factories
for the strict enforcement of tax rules and regulations and ensure the collection. These revenue inspectors are charged with monitoring production, packaging and transport of finished products which activities are confidential. The revenue officers are also sworn to protect the trade secrets of cigarette producers, prohibiting them, among others, from disclosing the kind of raw materials and ingredients used in the blending and manufacture of products. Under Section 270 of the Tax Code, a revenue officer is liable to
Trump’s unworthy attack on a federal judge By Noah Feldman Bloomberg View
I
t’s no surprise that President Donald J. Trump initiated a Twitter attack on Saturday on federal judge James Robart for freezing the executive order on immigration from seven majority-Muslim countries. The ultimate fate of the order will depend on proceedings in the 9th Circuit Court of Appeals, which denied the government’s emergency request to reinstate the ban, and possibly, even the US Supreme Court. But because judges issue rulings, not press releases, it’s also up to civil society and the news media to defend the judge and the rule of law from the president’s bluster. So here’s the legal truth: The Seattlebased judge’s decision, which, unlike earlier rulings against the order, forces the entire executive branch to comply, was completely legitimate. Rather brilliant-
ly, Robart, a George W. Bush appointee, cited the precedent of the federal judge in Texas who in 2015 froze President Barack Obama’s executive order on immigration. Turnabout is fair play. The same judicial power that thwarted Trump’s predecessor is now being used against him. Robart’s order resembles the order against Obama’s Deferred Action for Parents of Americans (Dapa) and Lawful Permanent Residents program in two key ways. First, the challenge to Dapa was brought by Texas and 25 other states —not by an individual who claimed to have been injured by the executive order. Similarly, the case that gave rise to Robart’s temporary restraining order against the Trump administration was brought by the states of Washington and Minnesota. The federal district judge in the Dapa case found that the states had constitutional standing to sue the executive branch. The main theory was that the states would have to use their resources
on the undocumented people whom the order permitted to remain in the US, specifically by issuing them driver’s licenses. The US Court of Appeals for the 5th Circuit upheld this rationale for allowing the states to sue. The Obama administration asked the Supreme Court to overturn this, and the court took the case. Very probably, justices would have upheld the Texas judge’s decision, as well. The only reason we don’t know for sure is that, after Justice Antonin Scalia’s death, the justices split 4-4 on the Texas case. An equally divided decision means that the appeals court decision remains in effect. The justices didn’t reveal how each voted in the 4-4 split. But it’s overwhelmingly likely that the divide followed partisan lines, with the liberal justices voting for the Obama administration and the conservatives voting for Texas. The Texas precedent remains in place in the 5th Circuit. In the 9th Circuit, where Robart sits, it is persuasive, but not settled law. Had Scalia lived, the court
would presumably have reached the same result in the Texas case, 5-4—in which case the states’ ability to sue would have been the law of the land. The other way Robart’s order matched the Texas order was that both restrained the president, and hence, the whole country. Robart cited the 5th Circuit for precisely this point. The Obama administration had argued that the Texas judge abused his discretion by binding the whole country. The appeals court said pointedly that “the Constitution requires ‘an uniform Rule of Naturalization.’” On that basis, the 5th Circuit—and Robart—concluded that it made no sense for different rules to govern immigration in different parts of the country. The Obama administration didn’t bring this issue to the Supreme Court. That might have been done for tactical reasons, but it at least implies that the administration conceded there was something odd about a checkerboard of rules for who can lawfully enter or remain in the US.
associations and chambers of commerce do almost the same thing— build school houses. Certainly, a school house is necessary to education. And the perennial lack of classrooms is one of the biggest factors that greatly pulled down the quality of our children’s schooling. But education—with public health and housing—is a public good that the government is dutybound to provide. Despite massive funds from private organizations, foreign aid agencies and individual donations, the classroom shortage persists. Is it because ironically private philanthropy and foreign support have become a disincentive for government to allocate more for school houses? And does this not suggest also that the elite are not addressing equally grave issues eating into our society’s heart—such as the pitiable state of malnutrition among our school-age kids? 2015 data from the government’s Food Nutrition and Research Institute (FNRI) showed that up to 33.5 percent—one out of three—Filipino children under 5 were chronically malnourished. They are either underweight or short in height. This so-called chronic malnutrition rate was the highest in 10 years. A 2016 Save the Children report even estimated that severe malnutrition among our children cost the country at least P328 billion in economic losses—around 2.83 percent of our 2013 GDP. Malnutrition is not a new problem of the country, however. In fact, as early as 2002, this public-health hazard motivated me and a group of business and civic leaders to launch the Kalusugan ng Bata, Karunungan ng
Bayan (K and K) program—involving the launching of the first scientifically formulated school-meal menu. This program ran until the early 2010s. With help from the Department of Social Welfare and Development and donations from the private sector, 25,500 students from 50 partnerschools across seven provinces and five cities were put under a 120-day feeding program for three years. The dropout rate in their schools plunged by more than 50 percent. Academic performance and physical health dramatically rose. Later, we launched the OMG (“Oh My Gulay!”) campaign, where elementary students were encouraged to eat healthy by getting them involved in planting and maintaining in-campus vegetable and fruit gardens. We hope that the government and other private groups adopt good practices and come up with more comprehensive and sustained programs to combat the ongoing scourge of child malnutrition. The response so far has been lackluster and discouraging. Aren’t our business tycoons and their executives aware and shouldn’t they be fearful of the absenteeism and low productivity such stunted workers unhappily show? If so, their philanthropy ought to be applied to ameliorating, if not eliminating such a health hazard. Just a fraction of the combined $53 billion, or P2.63 trillion net worth, of the 10 wealthiest Filipinos would spark national rejuvenation.
E-mail: angara.ed@gmail.com, Facebook and Twitter: @edangara
be dismissed from the service, fined up to P100,000 and sent to jail up to five years for unlawful disclosure of trade secrets. BIR officials reacted then to news circulated by health advocates that the late OFW Family Club Party-list Rep. Roy Seneres and former Rep. Emil Ong of the Second District of Northern Samar would file a resolution deputizing the Framework Convention on Tobacco Control (FCTC) to visit cigarette factories to audit and determine if they are paying correct taxes. Ong, however, when contacted, said he was not filing any resolution to support FCTC’s proposal to visit cigarette factories to audit and determine if they are paying correct taxes. This time, the same advocates using different groups and questionable talking heads are using the so-called fake stamps stories as a justification to intrude into the BIR’s exclusive investigative and oversight authority under the tax code. A ranking BIR official last Friday said they cannot share with third party or any outsider information the agency gathered on taxpayers.
“Otherwise,” said Gaudencio Mendoza, chief legal counsel of BIR Commissioner Caesar Dulay, “a revenue official or employee sharing such data with outsiders is liable to be sent to prison under the Tax Code titled Unlawful Divulgence of Trade Secrets.” The Code covers “any officer or employee who divulges to any person or makes known in any manner than maybe provided by law information regarding the business, income or estate of any taxpayer, the secrets, operation, style of work, or apparatus of any manufacturer or producer, or confidential information regarding the business of any taxpayer, knowledge of which was acquired by him in the discharge of his official duties.” MC earlier dismissed allegations that it was using fake strip stamps, claiming the BIR is closely monitoring production and withdrawal at its only factory in Bulacan, having been the first one to install closed-circuit television cameras to monitor its operations in compliance with BIR regulations since 2014.
The events of last week support Robart’s argument for uniformity. The idea that lawful visa holders could enter the US at Boston’s Logan Airport or at Los Angeles International, but nowhere else, makes a mockery of the immigration laws. The other judges who bravely stayed the Trump executive order were trying to be modest. Robart was being braver still— and more consistent in defending a uniform rule of law under the Constitution. If Trump’s executive order is unlawful and unconstitutional, it shouldn’t apply anywhere. Of course, the underlying legal issue of whether the order really is unlawful is different in the two cases. In my view, the Obama order was constitutional, while the Trump order violates the Constitution. Robart also made a judgment on that question—and I think it was the right one, although the 9th Circuit and the Supreme Court could decide otherwise. That’s normal for every judicial decision. Which brings us back to Trump’s attack on Robart as a so-called
judge and on his order as ridiculous. It’s fine for the president to disagree with a judicial decision and appeal it. The word ridiculous is overstated and frankly childish, but for the president to use it doesn’t threaten the structure of the US Constitution. It is, however, a dangerous threat to the separation of powers for the president to question the legitimacy of a judge, whose role is enshrined in Article III of the Constitution. The label so-called is more than a garden-variety insult. It suggests that judges who decide cases against Trump aren’t really speaking for the Constitution. They are. Robart’s order is a blow for the supremacy of the Constitution as interpreted by the judicial branch, which has the duty to say what the law is. Trump had better get used to it. And civil society and the free press had better be ready to stand up for judges who take the chance of defying the president. Without them, our rights won’t be worth the parchment they’re written on.
To reach the writer, e-mail cecilio.arillo@ gmail.com.
2nd Front Page BusinessMirror
A12
Tuesday, February 7, 2017
DOT forges stronger ties with LGUs to push for inclusive tourism benefits
T
By Ma. Stella F. Arnaldo
@akosistellaBM Special to the BusinessMirror
he Department of Tourism (DOT) is working toward promoting more inclusive tourism goals by helping local impoverished communities around destinations to benefit from its tourism efforts. “Tourism, no matter how profitable it becomes, is irrelevant if it will not help improve the quality of life of the ordinary people,” Tourism Secretary Wanda Corazon T. Teo in a statement said. She said the DOT and other government tourism agencies will work hand in hand with local government units (LGUs) to get the local communities involved in the country’s tourism program. “If we aspire for inclusive growth, then we must encourage inclusive participation at the domestic level,” Teo added. This developed as the DOT chief
expressed appreciation over the inclusion of the Great Santa Cruz Island (also called Isla de Santa Cruz) in Zamboanga City in the list of the 21 Best Beaches in the World by the international publication National Geographic. “We are so proud about this citation and happy about its very timely announcement, which comes right after our visit in December, when I had pushed for the island’s immediate improvement and development as an ecotourism destination,” she said. Teo added she had instructed DOT Region 9 Director Antonio
M. Blanco to coordinate with the Tourism Infrastructure and Enterprise Zone Authority (Tieza) to assist the local government in upgrading the island’s facilities, providing additional cottages, as well as offering more naturebased recreational activities. “The planned development will highlight its conservation and preservation, the island being a protected area. Nonetheless, the outcome should enable locals and foreign visitors alike to enjoy the island’s beauty, but still strictly maintaining it as a day destination. We would like to attract genuine ecotourists as they take ‘responsible, ethical and sustainable tourism’ to heart,” she stressed. On its web site (www.nationalgeographic.com), NatGeo said: “Hardly lacking in gorgeous beaches, the Philippines claims a pink-sand variety, too. The blush color comes from billions of pieces of crushed red organ-pipe coral, seen in every handful of sand. The number of visitors to the island is regulated, and advance arrangements should be made through the tourist office in Zamboanga.” The Great Santa Cruz Island used to be under the Tieza, formerly the Philippine Tourism Authority. In 2011 it was turned over to the local government under the
City Tourism Office, Protected Management Unit. Teo also noted that the DOT needs the LGUs’ and the communities’ help to identify every region’s “tourism gaps”, defined as the difference between what the markets expect and require and what the destinations can offer and actually serve. “Together with other national government agencies and LGUs, we will identify the tourism gaps in our regions and their localities. And together, we will fill them up with our respective resources and every support we can muster,” she said. “It is imperative for us to work hand in hand with the LGUs, because of the huge contribution of tourism to national employment, tax revenues, GIR [gross international reserves] and the local economy, as expressed in GDP,” she added. Data from the DOT showed that the tourism industry added some 5
million jobs to the economy, generated visitor receipts amounting P227.62 billion, and accounted for 10.6 percent of the GDP. “Domestic tourism is a prerequisite and the foundation of a successful global tourism. A nation of a domestically well-traveled citizenry has more effective and active marketers than the world’s biggest advertising agency,” Teo said. “By sheer number and actual experience, the Filipinos who have traveled around their own country can effectively generate WOM (word-of-mouth) marketing even outside the Philippines through their friends and relatives abroad, especially with social media.” The DOT chief said the upcoming Travel Tour Expo (TTE) will showcase this ideal partnership with the LGUs and local communities, which are essentially its primary beneficiaries. The TTE will be held from February 10 to 12 at the SMX Convention Center in Pasay City.
If we aspire for inclusive growth, then we must encourage inclusive participation at the domestic level.”—Teo
Meat processors to feel pinch of lifting of rice QR Continued from A1
products—more expensive. Buencamino said this could cause the price of some of their processedmeat products to go up by at least 12 percent in the second half of the year. “We are bothered by the rawmaterial concern, because in July, when the rice QR is lifted, the preferential tariff rate of MDM will go up,” he told the BusinessMirror on the sidelines of a signing ceremony between some Pampi members and Aboitiz Power Corp. held recently in Bonifacio Global City. “If government reverts MDM tariff back to 40 percent, that will move prices up by 12 percent to 17 percent. We are talking about the price of processed-meat products from the supplier to the outlets. Therefore, the suggested retail price of processed-meat products could even be higher,” Buencamino added. The Philippines’s rice quota waiver to the World Trade Organization is set to expire on June 30. As part of its concession for the second extension of its rice quota in 2012, the Philippines lowered its tariff on MDM to 5 percent, from 40 percent, for the duration of the extension. Under Executive Order (EO) 190, signed by former President Benigno S. Aquino III, the Philippines will restore its tariff on MDM to the original rate of 40 percent starting July 1 this year. “The volume of MDM that we are using, the volume we consume, is huge. So the rate from 5 percent will become 40 percent, which is stated in the EO. So we have a problem with that—on how to handle that,” Buencamino said. Latest data from the Bureau of Animal Industry (BAI) showed that from January to October last year, chicken MDM imports reached
134,630 metric tons (MT), slightly higher than the 133,027 MT imported in 2015. BAI data also showed that MDM pork purchased abroad during the 10-month period jumped to 2,425 MT, from 703.28 MT imported in January to October 2015. Earlier, Dr. Rolando T. Dy, executive director of the University of Asia and the Pacific’s Center for Food and Agri Business, told the BusinessMiror that the lifting of the QR on rice would cause poultry meat imports to become more expensive. This would result in an increase in the prices of processedmeat products, like hot dogs. “But other poultry products, such as chicken-leg quarters, would not become expensive, as these are heavily discounted [by the US],” Dy said. In 1995 the Philippines, upon its accession to the WTO, was allowed to implement a rice QR for 10 years. Under the QR, rice imports within the minimum access volume of 805,200 MT were slapped with an in-quota tariff of 35 percent, while all imports in excess of the MAV were assessed with a higher 50-percent tariff. In 2004 Manila applied for a seven-year extension of the QR. In December 2006 the request was approved by the WTO, subject to tariff concessions on certain agricultural products for membercountries. Among those concessions was a reduction in tariffs for MDM and mechanically separate meat of poultry. After securing another extension of the rice QR in 2012, Manila retained prior concessions. The government also had to grant new concessions, which include a reduction in the tariffs for dairy products, oil-seed meals and frozen potatoes.
JEEPNEY DRIVERS STRIKE Commuters stranded along Commonwealth Avenue in Quezon City walk toward buses during the strike conducted by some of Metro Manila’s jeepney drivers protesting the consecutive increases in gas prices. NONOY LACZA
Singapore plan a slew of perks to lure Aramco public share sale
S
ingapore is considering a range of measures to lure a listing from energy giant Saudi Arabian Oil Co., according to people familiar with the matter, as global exchanges compete for a slice of what could be the world’s largestever initial public offering (IPO). The island-nation is studying proposals, including inviting one of its state investment companies, to become a cornerstone investor in Aramco’s IPO, as well as potential Singapore coopera-
tion with the Saudi government on future investments, the people said. Singapore Exchange Ltd. management, including CEO Loh Boon Chye, visited Saudi Arabia late last year to pitch a listing on the bourse, according to the people who asked not to be identified, as the information is private. Singapore, the biggest oil-trading center in Asia, is hoping a full package of government incentives will give it a better chance of winning a piece of the listing than
a standalone proposal from the stock exchange, the people said. Aramco is yet to make a final decision on the venue for the IPO, and Singapore faces challenges from larger international exchanges, the people added. The country’s plan shows the extent to which Asian economies are vying for a share of the IPO, which is estimated to be about $100 billion in size. Aramco officials have also received pitches on a potential See “Singapore,” A2
www.businessmirror.com.ph
Govt resumes assaults on rebels after talks scrapped JALANDONI: “We’re saying the peace talks are still possible in the absence of a cease-fire.”
G
overnment troops have resumed assaults against communist rebels, killing at least one guerrilla, after President Duterte scrapped peace talks with the insurgents, military officials said on Monday. Duterte on Friday lifted the government’s six-month-old ceasefire with the rebels, and said on Saturday he was discarding the talks brokered by Norway. Those moves came after the Marxist guerrillas abandoned their own truce and killed six soldiers and kidnapped two others in new flareups in the 48-year insurgency. The government and the rebels separately declared cease-fires last year to foster the peace talks, which progressed steadily for months before rapidly deteriorating in recent weeks. On Monday rebel adviser Luis Jalandoni accused the military of violating the government’s ceasefire by deploying troops in 500 villages across the country, occupying village halls and schools, and continuing surveillance operations that he said inevitably led to clashes. The guerrillas want to continue with talks set from February 22 to 25 in Europe to negotiate a possible joint cease-fire agreement, Jalandoni said, adding the government has not issued the formal notice required to terminate the talks. “We’re saying the peace talks are still possible in the absence of a cease-fire,” Jalandoni told radio dzMM by telephone from Europe. Troops have resumed combat operations after Duterte lifted the cease-fire, military spokesman Col. Edgard A. Arevalo said. The operations were in response to complaints from villagers of rebel extortion and efforts to rescue the kidnapped soldiers, he said. A r my troops c lashed w it h about 20 New People’s Army guerrillas last Sunday in Occidental Mindoro province, south of Manila, killing one rebel, and last Saturday troops and policemen arrested a rebel couple in Misamis Occidental province in the South for a multiple attempted murder case, the military said. At least three other combat operations were staged elsewhere. Duterte called the insurgents terrorists for their attacks on troops, and said several rebel leaders who were temporarily freed to join the peace talks should be returned to jail, threatening to have them arrested if they refused. Jalandoni, however, said the 17 freed rebels are protected by a 1995 agreement, under which the government agreed to grant them immunity from arrest while serving as peace-talks consultants. All have returned to the Philippines after joining a recent round of talks in Rome and should not be arrested, he said. Duterte has said he may reconsider his decision if there was a compelling reason, but he did not elaborate. The setback in the talks is the latest reality check for Duterte, whose crackdown on illegal drugs, which has killed thousands of drug suspects since he took office last June, has been widely criticized. AP