Businessmirror february 07, 2018

BMReports

US-version Silk Road: Is PHL ready for Internet’s dark side?

By Rizal Raoul S. Reyes

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@brownindio

Conclusion

illustration BY JIMBO ALBANO

HESTER Wisniewski of Sophos Group Plc. said the current scenario is quite different from the past, as any Juan, Pedro and Jose can develop and release a virus today.

“Gone are the days when ransomware was developed and distributed by skilled cyber criminals,” Wisniewski told the BusinessMirror through e-mail. “Today, anyone can easily build and launch ransomware, as there are only two key requirements—bad intent and access to the Dark Web, a marketplace where

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A broader look at today’s business

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Wednesday, February 7, 2018 Vol. 13 No. 119

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By Jasper Emmanuel Y. Arcalas

@jearcalas

he government’s decision to thumb down rice importation has left the National Food Authority (NFA) with virtually no inventory of cheap rice, with the poor in Metro Manila the first to suffer.

HARE prices plunged for the second straight trading session on Tuesday, with the Philippine markets not spared from a contagion-like fall of other markets across the region.

The benchmark Philippine Stock Exchange index fell 65.58 points to close at 8,550.42 points, mainly on foreign selling that reached a net sell of P1.44 billion.

“Philippine markets could do little to withstand another round of sell-off regionally, with the US recording its worst one-day point drop in history and it was down more than 1,500 points intraday before settling to 24,345.75,” Regina Capital and Development Corp. said in a research note.

The market already opened weak at 8,475.08 and even sunk as low as 8,379.83, recovering only before the close of trade. All other subindices were down, led by the Mining and Oil index that sunk 256.71 points, or 2.2 percent, to 11,509.38 points.

The broader All Shares index was down 42.51 points to 5,027.91; the Financials index fell 24.16 to 2,179.92; and the Holding Firms index shed 97.66 to 8,689.61.

Value of trade reached P10.42 billion, while losers edged gainers 159 to 52, and 44 shares were unchanged. Ayala Land Inc. was the day’s most actively traded and it lost P0.80 to P44 per share; SM Investments Corp. was down P5 to P1,000; lender BDO Unibank Inc. shed P0.50 to P150; property developer SM Prime Holdings Inc. See “Wall Street,” A2

By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

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HE Department of Tourism (DOT) is considering rejecting or not renewing the applications for accreditation by resorts on Boracay Island while they are being investigated for possible environmental, easement and building violations.

This was confirmed to the BusinessMirror by Tourism Undersecretary for Public Affairs Katherine de Castro, even as President Duterte rejected a proposed executive order (EO) to strengthen the membership of the interagency task force overseeing the development of the resort-island, and giving the group the power to bring administrative sanctions on any government member that fails to address Boracay’s many concerns.

The current rice inventory of the National Food Authority

This, after the NFA suspended indefinitely its distribution of governmentsubsidized rice in the National Capital Region (NCR) as its stockpile is down to around 64,000 metric tons (MT), which is being reserved for calamityaffected areas.

Continued on A12

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Duterte rejects new EO on Boracay, but gives task force 6 mos to end mess

64,000 MT

Wall Street miseries drag down market for second straight day

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Zero-importation policy eases NFA out of market

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Continued on A2

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By VG Cabuag

malware kits are advertised the way a traditional online retailer promotes regular items like clothes and shoes.”

It is a challenge to track users on the Dark Web, he replied to questions sent via e-mail.

According to Wisniewski, most of these users are anonymous and protected by a privacy feature “baked” directly into The Onion Router, or Tor, browser.

“This also means that law-enforcement authorities are unable to identify where the web sites are, who owns them, who uses them or who to arrest,” he explained.

Continued on A12

GOVT WANTS MORE THAN JUST TAXES FROM MINERS, EYES FAIR REVENUE-SHARING SCHEME

By Jonathan L. Mayuga

@jonlmayuga

LEONES: “What we are trying to push is revenue sharing, the government should really have a share; that is why there is the moratorium on new mining contracts.

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A trader walks inside the hall of the Philippine Stock Exchange in Makati City. Philippine shares on Tuesday treaded on signals from trades on Wall Street. The benchmark Philippine Stock Exchange index fell 65.58 points to close at 8,550.42 points. ALYSA SALEN

Contractualization issue unites labor factions

By Samuel P. Medenilla

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@sam_medenilla

hile the contractualization issue has polarized employers and employees, it also bonded moderate and labor groups that they are staging a joint rally today (Wednesday) to press President Duterte to choose the executive order (EO) they prefer over the draft EO being supported by business groups.

Labor Secretary Silvestre H.

PESO exchange rates n US 51.5490

Bello III said he will present to Duterte today two EO versions— both tackling contractualization but with differing provisions on the definition of security of tenure (SOT). Instead of just presenting the latest version of the EO, which was updated by labor groups last month, Bello said they will also submit the original version of the EO, which was already approved by employers last year, for the consideration of the President.

“This will give the President a wider latitude of choice...assuming he will sign the EO,” Bello told reporters in an ambush interview.

Duterte will then meet with labor groups at 4 p.m. in Malacañang to discuss the approval of the new government policy on cont rac t u a l i z at ion. Bel lo ex plained that employers rejected the latest version of the EO after labor groups decided to change the definition of SOT so See “Contractualization,” A12

he government is now putting finishing touches to a road map that will promote fair revenuesharing between the government and its mining contractors, thus, requiring an amendment to the Philippine Mining Act of 1995, an official of the Department of Environment and Natural Resources (DENR) said.

Jonas R. Leones, the designated spokesman of Environment Secretary Roy A. Cimatu, told reporters at a news conference at the DENR Conference Hall on Tuesday that the development of the mining industry road map came after Cimatu conducted consultations with mining stakeholders and the DENR’s own unit in charge of regulating the industry, the Mines and Geosciences Bureau (MGB).

He said the DENR believes that an amendment to the current mining law is needed to ensure that the government gets its fair share in the minerals being exploited by the mining contractors.

“If you see the Mining Act, it is not that good, in the sense that the sharing between the industry and the government is not clear. Under the Mining Act, we only get 2-percent excise tax and 5 percent if the activity is undertaken in a mineralreservation area,” he said.

But Leones was quick to point out that Cimatu’s mining policy is guided

by President Duterte himself. “The President wants the community to be

protected and well compensated, so that is our direction.”

The target, Leones added is to complete the road map within the year, although Cimatu wants it done at the earliest possible time.

Asked if the 2-percent increase under the Tax Reform for Acceleration and Inclusion Act is not enough to make the government lift the moratorium on new mining projects, he said: “It seems to be the direction; even at 4-percent tax. But it is not revenue sharing, it is an excise tax.

“There’s also the corporate tax.

What we are trying to push is revenue sharing, the government should really have a share; that is why there is the moratorium on new mining contracts,” he said.

Leones noted that in other countries, the government’s share in mining profits reach up to 50 percent to 60 percent. But he made it clear that the President will always have the final say when it comes to mining. “As I’ve said, the direction of the DENR under Secretary Cimatu will always depend on the pronouncement of the President.”

n japan 0.4720 n UK 71.9985 n HK 6.5918 n CHINA 8.1902 n singapore 39.0257 n australia 40.6515 n EU 63.8641 n SAUDI arabia 13.7464

See “Govt,” A2

Source: BSP (6 February 2018 )

A2 Wednesday, February 7, 2018

BMReports BusinessMirror

US-version Silk Road: Is PHL ready for Internet’s dark side?

Continued from A1

Wisniewski points out this easy access to the Dark Web boosts ransomware-as-a-service distribution models, which essentially allow cyber criminals to download and use ransomware. Since ransomware is cheap to purchase and spread, it also provides a quicker payout than stealing credit-card data or personal information.

Challenges

WISNIEWSKI cites the case of “Philadelphia,” a ransomware variant released in 2016 that is easy to customize and deploy and uses common marketing strategies to reach potential customers.

“Cybercrooks only have to pay once to get an executable [file] that can generate unlimited ransomware samples,” he added.

“There is even a production-quality introductory video on YouTube, explaining the nuts and bolts of the kit and ways to customize the ransomware with a range of feature options. Hence, with ransomware variants like Philadelphia, [even] criminals with limited technical skill [can easily commit a cybercrime].”

In fact, Wisniewski reveals there are ransomware variants on the Dark Web delivered via cloud that offer a host of menu options to guide crooks on how much ransom to charge and the distribution spectrum of the attack.

For a ransomware campaign to succeed, he says attackers must hurdle the main challenges. Some of these challenges in-

BSP. . .

Continued from A12

He added this will not carry on as a trend this year, as the TRAIN’s effect will soon be stabilized. “I might be wrong, but I don’t expect this trend to continue.

I think it is a temporary blitz driven precisely by expectations of higher prices brought about by TRAIN,” Briones told the B usiness M irror.

Eventually, consumers will already factor in the additional taxes slapped by TRAIN. After that, everything will be stable again, “and the normal trend kicks in,” Briones said.

Pernia called for the streamlining of the distribution of assistance under the UCT program. “With the initial inflationary effects of

clude the creation of ransomware samples, sending these samples to victims and managing the attacks by collating statistical information, checking payment, etc.

Wisniewski recommends organizations must undertake steps to ensure attackers do not cross these challenges successfully.

For one, the organization must put up a command-and-control server to communicate with victims, he said. “[T hey mu st] u nderst a nd u nder ground trends and train employees on how the Dark Web works,” Wisniewski said. “[They should also] increase the frequency of security monitoring and reporting in the organization.”

“Patch early and patch often, even if you’re using an unsupported version of XP, Windows 8 or Windows Server 2003,” he added.

Wisniewski, principal research scientist of the British security software and hardware company, said nothing beats vigilance.

“The organization must recognize if employees or customers are being targeted.”

‘Infostructure’ defense

ACCORDING to Allan S. Cabanlong of the Department of Information and Communications Technology (DICT), the agency is currently organizing the National Cyber Intelligence Platform.

Once operational, a system will be in place for real-time monitoring of cyberattacks across the Dark Web, the Deep Web, fraudster-to-fraudster social-media conversations and other digital channels, TRAIN, we must ensure faster provision of financial assistance through the unconditional cash transfer program.”

The UCT program is the government’s mitigating measure to help poor Filipinos cope with the impact of the implementation of the TRAIN law. Under this, the poorest 10 million households will receive P200 monthly this year and P300 monthly in 2019 and 2020.

Pernia also called on lawmakers to tarrify rice imports to stabilize the country’s rice supply and lower the price of rice. “When the quantitative restrictions are replaced by tariffs, the government will also be better able to help enhance the country’s competitiveness and productivity in agriculture.”

“Revenues from tariff on imported rice will be used to finance government programs for agriculture,” Pernia added. With Rea Cu

among others, DICT Assistant Secretary Cabanlong said. He said the system is also expected to provide actionable intelligence and alerts to help organizations take the right steps to protect their financial assets, brands and customer reputations.

With the establishment of the National Cyber Intelligence Platform, this will enable the DICT to pursue strategic monitoring of the Dark Web. Moreover, it will provide near real-time threat intelligence before, during and after cyberattacks that are propagated via the Dark Web, the Deep Web, chat rooms, Pastebin sites and threat actor groups in social networks.

“The center will enable deep visibility into the most obscure and dangerous layers of the Internet, automatically monitoring and identifying threats in order to provide actionable intelligence to the agencies and organizations concerned,” Cabanlong told the BusinessMirror.

He added that as a developing country, the Philippines should fast-track the implementation of its cybersecurity road map, or the “National Cybersecurity Plan 2022.”

He warns that cyberattacks targeting critical information infrastructures or “infostructures” are surging. A growing number of these threats are propagated by entities lurking in the most hidden regions of the Internet, Cabanlong said.

Anti-Dark Web

Cabanlong said the DICT welcomes any offer for cooperation in the fight against

Govt. . .

Continued from A1

Also, Leones said the road map will provide policy direction or guideline in the conduct of progressive rehabilitation.

He said Cimatu, who visited mining areas in Caraga, discovered idle areas damaged by mining operations.

Some mining companies argue that leaving portions of a mining tenement exposed is a strategy, but Cimatu does not want that because anytime, when rains pour, there will be flood and landslide, he added. “Based on the road map, we will be requiring mining companies to rehabilitate the areas.”

Cimatu wants immediate rehabilitation to be done whenever possible.

“Another policy direction, instead of export-

cybercrime and criminals operating in the Dark Web. He told the BusinessMirror “there are existing cybersecurity collaborations and cybercrime-prevention initiatives” with member countries of the Association of Southeast Asian Nations. Cabanlong, however, did not elaborate on these “collaborations.”

Nonetheless, he doesn’t want to totally condemn anonymity as malfeasance.

Anonymity can be used for both good and bad, Cabanlong said. “It [anonymity] can be a powerful weapon as an economic solution or for political retr ibution,” he added. “But there are also those who take advantage of this on l i ne a nony m it y to u se t he Da rk Web for illegal activities, such as controlled substance trading, illegal financial transactions, identity theft and so on. Needless to say, the Dark Web adversely impacts a country’s national security and economy.”

The easiest way to avoid the Dark Market is to stay away from it because they are often filled with contraband and booby-trapped software, Cabanlong said.

“The average citizen is more likely to find themselves scammed, or hacked, or worst, getting caught up in a criminal conspiracy, if they don’t know what they’re doing,” F5 Networks Inc. Worldwide Security Evangelist David Holmes said. “Dark Markets are not places for someone who aren’t trained in cybersecurity and using specialized defensive software.” ing the minerals, mining companies will also be asked to do the processing. These are some of the directions to address problems besetting the mining sector.

He said the road map is already finished and Cimatu wants the final draft presented as soon as possible.

Meanwhile, Leones shared that the DENR still has no particular lawmaker in mind who will champion whatever mining-law amendment is necessary based on the road map.

Nevertheless, he said there are several bills pending in Congress where the DENR is actively engaging lawmakers in the discussions.

“Discussions in Congress about these things are ongoing and the DENR is really participating in the discussions, looking at the possible amendment to the mining law,” he added.

www.businessmirror.com.ph

Wall Street. . .

Continued from A1

rose P0.55 to P35.80; Ayala Corp. declined P25 to P1,005; and PLDT Inc. shed P15 to P1,530.

Tuesday’s trade was worse than Monday’s when the PSEi closed at 8,616, as Wall Street signaled the end of a bull run.

“Markets in Asia also opened lower in response to the weak overnight markets,” RCDC’s research note on February 5 read.

“The trading saw renewed selling pressure on high-momentum sectors, such as holding firms and properties.”

Not alone

THE Philippines, however, was not alone in the field as Asian markets were also rattled on Tuesday by the miseries on Wall Street: Japan’s Nikkei 225 index briefly dipped more than 7 percent.

T he Tok yo b e nc h m a rk b ou nce d throughout the day, ending 4.7 percent lower at 21,610.24.

All regional bourses were battered a day after the Dow Jones industrial average suffered its worst percentage decline since August 2011 and its biggest point drop ever.

The Shanghai Composite index fell 3.4 percent to 3,370.65 and Hong Kong’s Hang Seng skidded 5.1 percent to 30,595.42.

Australia’s benchmark S&P ASX 200 slid 3.2 percent to 5,833.30 and South Korea’s Kospi declined 1.5 percent to 2,453.31.

Gains erased

Two days of steep losses erased the US market’s gains from the start of this year, ending a spate of record-setting calm for stocks in a pullback that market pros have been predicting for some time.

Declines of 10 percent or more are common during bull markets. There hasn’t been one in two years, and by many measures stocks have been looking expensive.

The same is true of many global markets, where investors have been bracing for a correction while hoping not to see one.

“There would be few places to hide from the risk-off atmosphere that is expected to extend its stay in Asian markets today in a significant manner,” Jingyi Pan of IG said in a commentary. “This is fear rolling over itself.”

Panic in other markets can send investors racing for the “safe haven” of Japanese yen holdings, she noted. That is painful for Japanese and other regional export manufacturers, whose competitiveness is hurt by stronger currencies that push their prices relatively higher.

Losses downplayed

JAPANESE officials sought to downplay the losses.

“The economy has had record-high corporate earnings and improving wages and labor conditions. Consumer spending is also recovering and so the Japanese economy is stable,” said Toshimitsu Motegi, the economy minister. “As for market movements, I will watch closely for any impact on the economy.”

The US dollar ticked up to ¥109.14 from ¥109.12 late Monday. The euro rose to $1.2390 from $1.2369.

At its lowest ebb during Monday’s roller-coaster trading on Wall Street, the Dow had lost 1,597 points. That came during a 15-minute stretch, where the 30-stock index lost 700 points and then gained them back.

The Dow finished down 4.6 percent at 24,345.75. The Standard & Poor’s 500 index, the benchmark most professional investors and which many index funds use, sank 4.1 percent, to 2,648.94. That was its biggest loss since August 2011, when stocks were reeling as investors fretted over European government debt and the US credit rating was downgraded after the debt-ceiling impasse.

The Nasdaq composite fell 3.8 percent to 6,967.53, while the Russell 2000 index of smaller-company stocks sank 3.6 percent to 1,491.09.

Bad drop

INVESTORS have sold shares out of concern that with inflation creeping higher, the Federal Reserve might raise interest rates more quickly, making it more expensive for people and businesses to borrow money and derailing the economic expansion and the prolonged share price rally.

The S&P 500 has fallen 7.8 percent since it set its latest record high on January 26.

Monday’s drop was bad, but there were worse days during the financial crisis, including a 777-point plunge in the Dow in September 2008 that was equivalent to 7 percent, far bigger than Monday’s decline.

A 10-percent drop from a peak is referred to on Wall Street as a “correction.” With AP

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Local Sulu leaders help mop up loose firearms

By Rene Acosta @reneacostaBM

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ore firearms are being surrendered in Sulu through the efforts of local officials who were responding to the call of Marine forces in the province for them to help in the unified effort to bring peace in Sulu and make it a “tourism haven.”

Other than running after members of the Abu Sayyaf Group (ASG), Marine forces in Sulu are also operating to seize unauthorized firearms in the hands of civilians, believing that the existence and proliferation of loose firearms exacerbate Sulu’s current security problem.

Marine Spokesman Capt. Rowena Dalmacio said 11 firearms, along with magazines and ammunitions, were surrendered on Monday in Pata, Sulu to the Marine Battalion Landing Team 1, led by Lt. Col. Stephen Cabanlet.

The firearms were surrendered through the efforts of the barangay chairmen of Luuk Tulay, Sangkap, Nyog-nyog, Kamawi, Andallan, Kayawan and Kanjarang, all in Pata, according to Dalmacio.

The turnover of firearms followed the successive yielding of other firearms, including machine guns in various caliber, during the past days by officials, led by no less than the mayor of Pata.

Dalmacio said the local officials were encouraged by the call of the Marine Ready Force-Sulu under Col. Armel Tolato to help in the grand effort of making Sulu a peaceful province.

The Marines are pushing for a blueprint that will make Sulu a tourism haven in Mindanao, but before the idea could be implemented, the

military has to first clear Sulu from terrorists and other members of lawless groups.

It also has to take all those loose firearms that are now in the hands of the residents of the province.

Cabanlet said the continuing surrender of civilian firearms was also the result of the civil-military operations that the Marines were conducting in Pata and other parts of the province.

Armed Forces Western Mindanao Command (Wesmincom) Spokesman Capt. Jo-ann Petinglay said that from January 1 to February 4 this year, a total of 172 ASG members have already surrendered to the military’s joint task forces in Sulu, Basilan, TawiTawi and Zamboanga provinces.

Of the number, 77 yielded to troops in Basilan, 60 in Sulu, 33 in Tawi-Tawi and two in Zamboanga City.

“We want to work for peace without the use of arms, that is why we are encouraging the rest of the Abu Sayyaf members to surrender because our thrust for internal security in Mindanao is sincere,” Petinglay quoted Wesmincom commander Lt. Gen. Carlito Galvez Jr. as saying.

Meanwhile, 217 of the 683 reported members of the New People’s Army who have surrendered to the military were sent to Manila on Tuesday for their scheduled “dining session” with President Duterte on Wednesday.

Armed Forces Eastern Mindanao Command (Easmincom) Spokesman Major Ezra Balagtey said the 217, who were presented at the Easmincom headquarters on December 21, composed the first batch “shipped” to Manila from Davao for their dinner with Duterte at Malacañang.

Editor: Vittorio V. Vitug • Wednesday, February 7, 2018 A3

SC: ‘No jurisdiction over House, Senate Charter change impasse’

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By Joel R. San Juan

@jrsanjuan1573

HE Supreme Court (SC) on Tuesday junked for lack of jurisdiction a petition seeking to end the impasse between the House of Representatives and the Senate due to their conflicting positions on how to amend the 1987 Constitution to pave the way for a federal form of government.

At a news briefing following the Court’s regular en banc session, SC Spokesman Theodore O. Te said the 15-man High Tribunal was unanimous in dismissing the petition for declaratory relief filed by Arturo de Castro, a professor of Law and Mandatory Continuing Legal Education lecturer, dean of the College of Criminology and associate law dean and bar review director of the University of Manila.

The Court held that it has no original jurisdiction over declaratory relief actions, as such jurisdiction belongs to the regional trial court.

“Its jurisdiction is limited to appellate review of declaratory relief judgments rendered by the trial courts,” the SC declared.

It also pointed out that the

petition effectively sought an advisory opinion from the Court on the manner of voting of Congress in amending the Constitution, which it does not render as its role is to settle actual controversies and not give advisory opinions.

In his petition, de Castro said the Court’s intervention is necessary to avoid an impending constitutional crisis, which may lead to another People Power Revolution and the establishment of a revolutionary government.

Specifically, de Castro is seeking the Court’s declaration on whether the votes of the Senate and the House of Representatives should be counted separately or jointly to determine the three-fourths majority.

De Castro is also asking the Court to rule on whether the

revision of the Constitution is a political question outside of the jurisdiction of the SC. The petition stemmed from the Senate’s refusal to heed the call of the House of Representatives for a joint constituent assembly to propose revision of the Constitution to shift from unitary to federal system of government.

As a result, the House of Representatives decided to go ahead with the proceedings to propose revisions to the Constitution even without the participation of

the Senate, and to draft a revised Constitution to be submitted to the people in a plebiscite.

He also cited the conflicting opinions expressed by legal luminaries in the interpretation of Section 1 (1), Article XVII of the 1987 Constitution on Amendments or Revisions.

De Castro noted that the SC, as the final arbiter of constitutional questions, should resolve the constitutional issue of whether the House of Representatives alone may propose amendments to the Constitution.

DOLE eyes reverse job fairs for Qatar, Saudi OFWs FFW asserts 3-percent hike on SSS

monthly contribution violates law

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ome 20,000 job opportunities in the country will be offered to Filipinos in Qatar and Kingdom of Saudi Arabia through job fairs by the Department of Labor and Employment (DOLE).

According to Labor Secretary Silvestre H. Bello III, they are planning to conduct a one-week job-search activities showcasing different employment opportunities in the Philippines.

“We are planning to send a job fair in Qatar and in Saudi Arabia. This is reverse job fair. We would be conducting a job fair in Qatar and in Saudi for jobs available in our country and there are 18,000 jobs ready for them here,” he told a news conference on Tuesday.

Bello said the 18,000 jobs would be provided by former Senator Manuel B. Villar.

“So, in the meantime, we are getting the profile of our overseas Filipino workers in the Middle East and also, at the same time, we are planning to meet with former Sen. Manny Villar who is in need of 18,000 skilled workers,” he said.

“We will get a profile of our overseas workers and then we will check with former Senator Villar on the jobs that they need. The job fair is for local deployment. There are 18,000 available jobs,” Bello added.

By Nelson S. Badilla Correspondent

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A local job fair

DOLE PHOTO

The DOLE chief said he would be meeting with Villar on Friday to discuss the matter, including what kind of jobs he was offering.

Bello added he would be sending a team to the host countries for the planned job fairs. “We will send a team this time to be headed by Philippine Overseas Employment Administration Administrator Bernard Olalia,” he said.

“Maybe we have one week for the job fairs. We have to coordinate with the former senator so we will know what kind of workers he may need.

And then, the team goes there to sell the available jobs in the country.

Hopefully, this will help address the displacement of our workers there,” the DOLE chief explained.

Aside from the 18,000 jobs, some 2,000 teachers are needed by the Department of Education.

DOLE figures show that there are some 250,000 Filipino workers in Qatar, of which about 75 percent are household service workers.

“If there are really no jobs there, the best thing to do is to come home.

Hopefully, there are jobs here waiting for them. In case there is none, livelihood assistance will be provided to them, extended to them under the reintegration program of OWWA.” PNA

Duterte wants third telco player by March

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resident Duterte wanted to stick with the original time frame to allow the entry of a third telecommunications (telco) carrier by March this year, Malacañang said on Tuesday.

Presidential Spokesman Harry L. Roque Jr. bared this in a Palace briefing, noting that Duterte had rejected the request of the Department of Information and Communications Technology Officer in Charge Eliseo Rio Jr. to extend the deadline to name the third telco carrier to May. “There was a request from [DICT] Officer in Charge Rio that they be given two additional months, or until May, to award and ensure that the third telecom carrier is up and

about,” Roque said.

“This was not approved in Tuesday’s Cabinet meeting, so we stick it out with the original time frame of a third telecom player by March of this year,” he added.

Rio sought for an extension to give prospective telco players more time to prepare bidding documents.

Roque said that Duterte was “emphatic” and issued a warning to the detractors of the entry of the third telco player not to test the will of the government.

He stressed that the President was particularly displeased with the fact that the government needed to buy back frequencies from a company, which he did not name, to give to the third telco

player. Moreover, he said that “frequencies are owned by the state.”

“Frequencies are owned by the state.

They were given for free and the President last night was emphatic. Since we gave these frequencies for free, he will not allow the holders to benefit from a free privilege by charging us anything to enable the third telecoms player to operate,” Roque said.

Roque, meanwhile, assured that the government would comply with all legal requirements to allow the entry of the third telco, including holding a bidding.

At present, three firms have expressed interest in becoming the country’s third major player in the local telco industry. PNA

he proposed 3-percent increase on the monthly contribution of the members of the Social Security System (SSS) is a violation of the SSS law, according to a leader of one of the biggest labor groups in the country.

Jose Sonny Matula, president of the Federation of Free Workers (FFW), said the plan of SSS leaders, headed by Chairman Amado Valdez and President Emmanuel Dooc, to raise the monthly contribution of workers from the private sector by 3 percent is a violation of Republic Act (RA) 8282, otherwise known as the Social Security Law of 1997.

Matula said Valdez and Dooc should “not anchor the 3-percent increase in the monthly contribution on the P1,000 pension increase made last year and the coming P1,000 increase in 2022 as Section 4 [2] of the RA 8282, or the Social Security Law of 1997, clearly prohibits the SSS to recommend increase in benefits that would require an increase in contribution.”

Wilson Fortaleza, spokesman of the Partido Manggagawa (PM), agreed with Matula, saying that “the increase in pension fund has long been debated before it became a Republic Act. [But] none in that Act [says the] premium payment should be hiked by 3 percent.”

Matula’s reaction was a direct reply of the FFW to the impending increase in SSS contributions, as admitted recently to the media by Dooc.

Dooc said that he and Valdez have already sent the proposal to President Duterte.

Presidential Spokesman Harry L. Roque Jr. said Duterte is already studying the matter.

Dooc argued that the 3-percent increase, from 11 percent to 14 percent, will add life to the SSS funds.

He added that he and Valdez strongly believe that the SSS

monthly contribution hike is the “best” solution to save and extend the life span of the SSS funds after it was shortened by the P1,000 hike on the monthly pension of the retired workers last year.

Dooc said the SSS life span will be further cut once another P1,000 hike on the monthly financial benefits of the pensioners is implemented by 2022.

Leody de Guzman, president of the Bukluran ng Manggagawang Pilipino (BMP), said the proposed 3-percent hike is an “additional burden” to the workers, because it would mean a 14-percent cut from the monthly income of the workers.

De Guzman said “the 3-percent increase will be an added burden to all SSS members.”

He added BMP is against the idea precisely because it will further reduce the purchasing value of the workers’ minimum wage of about P200 to P500 daily, as the prices of the various commodities and services are increasing this January after the Department of Finance and the Bureau of Internal Revenue started the implementation of the Tax Reform for the Acceleration and Inclusion law.

According to Matula, a veteran labor leader and veteran labor lawyer, “the FFW is of the opinion that the SSS can only implement an increase in benefits, subject to the approval of the President, if such increase is based on the actuarial soundness of the reserve fund and as such, shall not require any increase in the rate contribution.”

Matula said that if Valdez and Dooc really believe that the fund of the SSS is on the verge of collapse, they should urged the Department of Budget and Management to include in next year’s budget of the national government its share to the funds of the SSS as guaranteed by RA 8282.

Matula, who is knowledgeable on SSS issues and problems because of his experience as a representative of the labor sector in the Social Security

Council, pointed out that Section 20 of RA 8282 under the subtitle “Government Contribution” said: “As the contribution of the Government to the operation of the System [referring to the SSS], Congress shall annually appropriate out of any funds in the National Treasury, not otherwise appropriated, the necessary sum or sums to meet the estimated expenses of the system for each ensuing year.”

“In addition to this contribution, Congress shall appropriate from time to time such sum or sums as may be needed to assure the maintenance of an adequate working balance of the funds of the System as disclosed by suitable periodic actuarial studies to be made of the operations of the System,” the SSS law said.

Matula’s argument is based on the context that the taxpayers’ money will be returned to the workers.

Thus, Matula averred that there is no need for the top honchos of the SSS to convince Duterte to issue a green light for the 3-percent hike to start in April.

Fortaleza asserted that PM is also against the hike in monthly contribution, but his group does not agree with the idea of Matula that the government should put some of its funds to the SSS since it also came from the taxpayers.

He said the 3-percent hike is indeed huge, especially to the voluntary members.

According to de Guzman, instead of resorting to an increase, Valdez and Dooc should train their guns on how to increase the collection rate, end anomalous contracts like the media contracts that allow some SSS officers to earn a commission of these contracts, reduce the salary and benefits of the officials, force the capitalists who do not remit the correct amount of monthly SSS contribution of their employees, and stop graft and corruption practices like investing on stocks using the SSS stocks for personal gains of some corrupt officials.

Economy

A4 Wednesday, February 7, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

www.businessmirror.com.ph

House panel OKs reinforced Consumer Act

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By Jovee Marie N. dela Cruz

@joveemarie

he House Committee on Trade and Industry has endorsed for plenary approval a measure strengthening the Consumer Act of the Philippines.

The panel on Monday approved the unnumbered substitute bill seeking to establish a Timbangan ng Bayan Center, or weighing centers, in all markets nationwide, amending Chapter II of Republic Act 7394, known as the Consumer Act of the Philippines.

Rep. Gloria Macapagal-Arroyo of the Second District of Pampanga, principal author of the bill, said her proposal aims to promote honesty in the marketplace, particularly with use of a weighing scales.

Under the bill, individuals, who fraudulently alter any scale, balance, weight or measure after it was officially sealed, will be slapped with a fine between P50,000 and P1 million, and/ or imprisonment between one and five years.

The Consumer Act that was signed into law on April 13, 1992, currently prescribes a fine of just P300 and a one-year jail term for offenses.

The bill said that all local government units, through their provincial, city or municipal treasurers, shall establish a Timbangan ng Bayan Center in all public markets nationwide, where instruments for determining weights and measures shall be open for and accessible to anyone who wants to verify the accuracy of the quantity and measurement of the products that they purchased.

It added that the safekeeping and main-

tenance of the instruments shall be under the control and supervision of the market supervisor who shall, likewise, be in charge of keeping a record of every product found to be wanting in quantity or substandard in dimension, as well as the establishment where the same was bought, including the name of the proprietor or manager thereof.

A certification duly issued by the market supervisor or his authorized representative reflecting the contents of such record shall be prima facie evidence of violation of the prohibited acts under this law.

According to Arroyo, the violability of the Philippine economy due to numerous uncontrollable factors, one of which is the global economic slowdown, has caused prices of prime commodities to scale to prohibitive heights making it more power difficult for the average Filipino household to put a decent meal on their table.

“The establishment of a Timbangan ng Bayan Center in all public markets nationwide will provide the buying public an effective means of checking the accuracy of the weight and quantity of the goods they are buying while, at the same time, discouraging dishonest vendors to commit any irregularity because of the imminence of getting caught in flagrante delicto,” Arroyo said.

Steel work

Workers painstakingly connect the steel bars to reinforce the concrete structures of the building they are constructing in Manila. According to reports, one of the concerns of foreign investors, who choose Vietnam over the Philippines, is the lack of infrastructure. Alysa Salen

Senate approves reduction of system-loss charges passed on to power consumers

By Butch Fernandez @butchfBM

A

fter approving a proposed law embodying government’s energy management plan, the senators subsequently passed on third and final reading a companion measure, Senate Bill (SB) 1623, reducing the systemloss charges passed on to consumers’ monthly electric bills by power distribution utilities.

Sen. Sherwin T. Gatchalian said SB 1623, to be known as the Recoverable System Loss Act, aims to bring down the present systemloss caps prescribed by the Energy Regulatory Commission (ERC) from 8.5 percent to 5 percent for private distribution utilities (DUs), and from 13 percent to 10 percent for electric cooperatives.

Gatchalian pointed out that electricity consumers are being “ forced to shoulder excessive charges from these losses that electric companies should be taking care of in the first place.”

He estimates that the reduction of systems-loss cap to 5 percent could result in monthly savings for power

consumers’ electric bills.

The senator cited a 2017 World Bank report, which notes that the Philippines has one of the highest average system losses in East Asia at 9.4 percent in 2014, as compared to countries like Korea with 3.3 percent and Singapore with 2.0 percent Under his proposal, the ERC will be mandated to conduct a periodic review every three years to determine whether the caps should be reduced further, based on load density, sales mix, cost of service, delivery voltage and other technical considerations.

It shall also devise a Performance Incentive Scheme for DUs to further encourage system-loss reduction. He recalled that the ERC last reduced system-loss rates in 2010.

Gatchalian’s bill also mandates that the ERC conduct an annual review of system-loss charges to “ensure that only allowable costs within the caps stipulated are being recovered.”

He added that the review should be based from the quarterly mandatory report submissions by the DUs to ERC, which should contain their Segregated System Losses.

His proposal further provides that noncompliance will subject

the distribution utilities to fines of P300,000 for its first violation, P400,000 for second violation and a P500,000 fine on the third violation.

The measure similarly imposes penalties for false or fraudulent information submitted by the DUs of P1-million fine on the first offense, P2 million on the second offense and P3-million fine on the third offense, with an automatic recommendation by the ERC to the Joint Congressional Power Commission for the revocation of the DU’s franchise.

It also provides that administrative sanctions shall be imposed on ERC officials who “fail to discharge their responsibilities or comply with the requirements” detailed in the measure.

The senator gave assurance “this measure will definitely help shield Filipino consumers from the outrageous cost of electricity rates.”

He added that with the new legal mechanisms, electric companies will also be compelled to improve their infrastructure in order to avoid further losses, thus, making delivery of electricity across power lines “more reliable and efficient.”

BOC optimistic to reach collection goal of ₧598B

By Rea Cu

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@ReaCuBM

he Bureau of Customs (BOC) has expressed optimism that the agency can hit its collection goal for this year amounting to P598 billion on the back of continuous reforms it is implementing.

According to Customs Commissioner Isidro S. Lapeña, the attainment of the goal will strengthen the Duterte administration’s infrastructure program.

“Mr. President, the BOC is giving its full commitment to hit its 2018 collection target,” Lapeña said during the agency’s 116th anniversary on Tuesday at its headquarters in Manila.

The BOC’s collection target for this year is higher by 28 percent compared to the P467-billion revenue target in 2017.

The Development Budget Coordination Committee (DBCC) had revised

downward the bureau’s revenue target for this year from the original target of P627 billion.

He pointed out that full automation of the agency, which is under its modernization program, is his top priority this year.

Last year the BOC had solicited the assistance of international institutions to implement its modernization program to which the World Bank had responded.

A $200-million Philippines Customs and Trade Facilitation Project was discussed with the Washingtonbased lender last year, aiming to support export-led economic growth through the reduction of trade cost, improved transparency, and a more efficient revenue collection for the BOC. The project is still up for review by the World Bank board. The Customs chief bared that he is hopeful that the implementation of the project

will enable BOC processes to be on a par with international standards.

The establishment of a “Customs Academy” is also being looked into by the BOC for this year to help strengthen the training future Customs employees. The bureau has bared that it is studying to establish the academy in the Subic area in Zambales.

It was also pointed out that a task force would be created by the BOC this year to help enhance the country’s border-control capabilities.

Employees from the BOC’s intelligence and enforcement group, it’s action team against smugglers and from the Bureau of Internal Revenue, are being eyed to comprise the members of the team.

For 2017 the revenue collection of the bureau reached P457.6 billion falling short by 2.1 percent from its target for the year amounting to P467.8 billion.

Agriculture/Commodities BusinessMirror

www.businessmirror.com.ph

Editor: Jennifer A. Ng • Wednesday, February 7, 2018

A5

PHL nickel output down 33% in 2017 House urged to look into rice-supply situation

The National Food Authority stores its buffer rice stock consisting of imports and paddy it purchased from farmers in its warehouses. FILE PHOTO

By Jovee Marie N. dela Cruz @joveemarie

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party-list lawmaker is asking the House of Representatives to conduct an inquiry into the “true state” of the country’s rice supply after the National Food Authority (NFA) announced that its stockpile is good for only three days.

Party-list Rep. Gary Alejano of Magdalo filed House Resolution 1648 on Monday after the staterun food agency said it will no longer be able to sell governmentsubsidized rice in some areas.

The NFA announced that its rice buffer stock has gone down to some 93,000 metric tons (MT), enough to supply the country’s requirement for three days. The volume, however, is less than the 15-day buffer stock mandated by the Legislative-Executive Development Advisory Council.

The lawmaker said this admission comes after they assured the public last month that they had enough stock to distribute to accredited retailers.

“This, along with the steep price of rice in the current market, displays severe inefficiency on the part of the NFA. Further, this

betrays their mandate of ensuring food security and stable rice supply in the country,” he said.

“The shortage in supply of NFA rice will certainly lead to a sudden increase in the price of rice in the market, to the detriment of the Filipino people, as its availability is expected to moderate the price of commercial rice sold to the public. Presently, NFA rice sells at P27 per kilogram (kg) to P32 per kg, while commercial rice varieties are sold at P36 per kg to P41 per kg,” Alejano added.

He said Filipinos purchase NFA rice because it is cheaper.

In the absence of governmentsubsidized rice, Alejano said consumers would be forced to buy the more expensive variants.

“The prevalence of the problem on maintaining a stable rice supply illustrates the lack of a strategy that would address food security, one that would ensure the promotion and protection of our domestic food production, and ensure the availability and affordability of food to ordinary Filipino consumers,” Alejano said.

The Magdalo legislator added that an investigation should be conducted to address possible rice shortage and institute policies to

improve production.

The NFA sought the permission of the interagency NFA Council, the agency’s highest policy-making body, to import 250,000 MT of rice so it could beef up its stockpile but this was rejected by the council.

“Through proper legislation, remedial measures to address possible shortage and policies to improve domestic rice production would surface. Ultimately, the goal is to develop an effective strategy that would secure the country’s food supply for years to come,” he said.

In a report released on January 31, the Philippine Statistics Authority (PSA) noted that the price of regular milled, special and well-milled rice rose in a number of provinces.

“The price per kilogram of special was priced higher by P1 in Batangas City and Legaspi City during the [fourth] week of January,” the PSA report read.

“In Legaspi City the price for well-milled rice picked up by P1 per kg during the period. Price mark-ups of P1 and P2 per kg of regular milled rice were noted in Zamboanga City, Butuan City and Batangas City,” it added.

P

By Jasper Emmanuel Y. Arcalas

@jearcalas

hilippine nickel mine production in 2017 fell to a six-year low of 230,000 metric tons (MT) after the government suspended and shuttered some mining operations, according to a report from the United States Geological Survey (USGS).

Preliminary data released by the USGS indicated that the country’s total nickel mine output in 2017 declined by 33.71 percent from 2016’s record of 347,000 MT. This is the country’s lowest nickel mine output since 2012, when production reached 424,000 MT volume, data from the USGS showed.

“The largest decrease in production took place in the Philippines, owing to the continued suspension of as many as one-half of the country’s mining operations for failing to meet environmental standards,” the USGS said in its annual report, titled “Mining Commodities Summaries 2018.”

Despite the 33.71-percent cut in the output of the Philippines—the world’s top nickel producer—total global production in 2017 nearly remained unchanged at 2.1 million metric ton.

“The decreases were offset primarily by increased production in

Indonesia, which in January eased an export ban on direct-shipping ore for companies that intend to construct nickel-processing facilities,” the USGS report read.

Indonesia’s nickel mine output last year doubled to 400,000 MT, from the previous year’s 199,000 MT, effectively overtaking Philippines as the top nickel mine producer in 2017.

Philippine nickel mine output has been steadily increasing in the past decade, registering a recordhigh of 554,000 MT in 2015.

The country’s nickel mine production have declined since 2016 after registering a 31.4-percent production cut due to low prices in the international market, unfavorable weather conditions, and the suspension of mining operations, according to the Mines and Geosciences Bureau (MGB).

This was even before former Environment Secretary Regina Paz L. Lopez launched an audit on all

the country’s mining operations, the MGB noted in its 2016 yearend report.

In February 2017, Lopez ordered the closure and suspension of some 26 mining operations in the country due purportedly to their detrimental effects to the environment, particularly the watersheds.

Lopez’s order resulted in the further reduction of the country’s total nickel output, triggering an increase of at least 2 percent in the prices of nickel at the London Metal Exchange (LME) due to perceptions of possible supply gap in the global market.

“The Philippines, the world’s leading producer of nickel ore, suspended one-half of its mining operations in September [of 2016] for failing to meet environmental standards, triggering a 2-percent increase in LME nickel prices, helping the recovery of global nickel prices,” the USGS said in a report published last year.

However, the suspended and shuttered mining firms were allowed to resume operations after they appealed to the Department of Environment and Natural Resources and the Office of the President.

A list available at the MGB web site showed that there are about 17 operating nickel mines in the Philippines as of June 13, 2017. The list also indicated that seven nickel mines were suspended by the MGB. Last month Environment Secretary Roy A. Cimatu said his agency will release the results of the government’s review of the mining firms’ appeals by March.

Cooperative scheme eyed for abaca tuxy buying project

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he government plans to implement a cooperative scheme in abaca tuxy buying project in its bid to develop the abaca sector.

The Philippine Fiber Industry Development Authority (PhilFida) said the project aims to organize and empower abaca farmers nationwide as a cooperative to produce their own abaca fibers as a group, which will result to better quality, competitive price and increased quantity of fibers.

This will help group of farmers to sell their harvest directly to grading and baling establishments and local processors.

“This will strengthen the cooperativism approach, which is an effective tool in the implementation of government agricultural projects and interventions and this will create additional benefits and advantages to all members,” PhilFida Executive Director Kennedy Costales said.

The abaca tuxy buying project also aims to reduce by half to only six steps the 12 stages traditional way of abaca fiber extraction and harvesting.

These are topping, tumbling, tuxying, tuxy bundling, tuxy transporting/hauling and tuxy trading/ selling.

“The traditional process is very much labor intensive. This scheme will remove the burden of the abaca farmers of the other six activities and just let them continue producing all the abaca tuxies they want for the day before selling it to their cooperative that same day. This project will surely increase abaca fiber production,” Costales explained.

The project envisions the abaca farmers capable of running their own cooperative and having their own health-care centers and grocery stores to cater to the various needs of its members.

As they progress, farmer members may eventually venture into exporting their abaca baled fibers, establish their own cordage factory or even pulp their own abaca, and manufacture it into sophisticated end products.

Also under the project, they will not just be farmers but will become entrepreneurs since the project

targets to eliminate the participation of traders/middlemen.

PhilFida technicians will train, guide and assist the abaca farmers on all aspects of production, including administrative work, warehousing and fiber trading, grading and classification.

PhilFida aims to replicate such process in the extraction of other natural fibers like banana, pineapple, coir, salago, buntal, raffia, maguey, sisal and cotton after in-depth study and research.

Meanwhile, three varieties of commercially planted abaca have been registered with the National Seed Industry Council—abuab, inosa and tangongon.

The approved varieties would be the ones recommended for commercial planting, especially in the abaca plant nurseries that are applying for accreditation in the agency.

The registration of such varieties, a first for abaca, provides assurance these have passed the test of fiber quality in terms of yield and fiber recovery, among others. Philexport News & Features

Commodities dragged into global sell-off as oil to copper get hit

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ommodities from crude oil to metals and iron ore dropped as the global equity rout and surge in market volatility spurred investors to pare risk, cutting positions in raw mater ials even as banks and analysts stood by the asset class given the backdrop of solid global growth.

Brent crude slid as much as 1.2 percent to $66.82 a barrel, heading for a third daily drop and the longest losing run since November. On the London Metal Exchange, copper sank as much as 2 percent to $7,025 a metric ton as zinc, lead and nickel declined.

Iron ore futures fell 1.2 percent in Singapore.

Global equity markets are in retreat after Wall Street losses that began in the final session of last week worsened on Monday, with the Dow Jones Indus-

trial Average posting its biggest intraday point drop in history.

The selloff—triggered in part by an initial rise in bond yields and concerns about the pace at which the Federal Reserve will raise interest rates—is spilling into commodities, which rallied in late-January to the highest level since 2015. Still, Citigroup Inc. said now’s the time for investors to add positions in metals.

“Clearly there is a risk off tone in the markets that will weigh on the sector,” said Daniel Hynes, a senior commodities strategist at Australia & New Zealand Banking Group. “But there is no fundamental reason for this selloff to change our view of commodity markets.”

BHP drops

Miners and energy companies fell as share benchmarks spiraled

downward. In the United States on Monday, Exxon Mobil Corp. and Chevron Corp. were among the worst performers in the Dow. In Sydney BHP Billiton Ltd., the world’s largest mining company, dropped 2.7 percent as Rio Tinto Group traded lower. Oil producer PetroChina Co. lost as much as 7.3 percent in Hong Kong.

Gold, often seen as a haven in times of turbulence, has so far failed to push much higher. Bullion for immediate delivery added 0.3 percent to $1,343.08 an ounce at 5:48 a.m. in Singapore after rising 0.5 percent on Monday.

Vitol Group, the world’s top independent energy trader, signaled—in comments released on Tuesday—that the crude market looks solid after Organization of the Petroleum Exporting Countriesand allies showed better-thanexpected compliance with supply

cuts and cold weather aided demand. “We always look at the oil fundamentals: They are absolutely fine,” CEO Ian Taylor told Bloomberg TV. Citi’s case for metals rested on its analysis they do better than other assets during periods of solid growth when inflation is picking up. “Global growth is synchronized, solid and forecast to accelerate, output gaps are closing and risks to inflation are skewed to the upside,” it said in the February 5 report.

“The recent selloff in rates and equities, and spike in VIX, presents an opportunity to rotate into industrial metals,” the bank said in a report. “We recommend asset managers raise their exposure to industrial metals over the coming month, particularly at the expense of bonds and other fixed income.”

There was similar sentiment from other analysts that the

Taylor Weidman/Bloomberg

broader picture remains supportive of commodities, echoing January remarks from billionaire bond manager Jeffrey Gundlach that raw materials may be one of this year’s best investments as they surge during the late phase of the economic cycle.

“The drop in US equities mar-

ket is currently dragging prices of commodities down,” said Will Yun, a Seoul-based commodities analyst at Hyundai Futures Corp. “However, it’d be too early to say commodities have joined the global selloff because the fundamental picture is still looking positive.” Bloomberg News

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Wednesday, February 7, 2018

briefs Asian shares tumble after Dow has worst day since 2011

TOKYO—Asian markets were rattled on Tuesday by the miseries on Wall Street, with Japan’s Nikkei 225 index briefly dipping more than 7 percent, but investors seemed to be taking the gyrations in stride. See related story below The Tokyo benchmark bounced throughout the day, ending 4.7 percent lower at 21,610.24.

All regional bourses were battered a day after the Dow Jones industrial average suffered its worst percentage decline since August 2011 and its biggest point drop ever.

The Shanghai Composite index fell 3.4 percent to 3,370.65 and Hong Kong’s Hang Seng skidded 5.1 percent to 30,595.42.

Australia’s benchmark S&P ASX 200 slid 3.2 percent to 5,833.30 and South Korea’s Kospi declined 1.5 percent to 2,453.31. AP

Bloody 24 hours as Syria, Russia escalate attacks

BEIRUT—Syrian opposition rescue teams pulled babies from incubators in a hospital under attack, rushing them to safety in a pickup truck.

Elderly patients lay motionless on the ground and rescue workers searched for survivors in the rubble of a destroyed apartment building as stepped up air strikes by Syrian government forces and their Russian allies on the country’s last remaining rebel strongholds killed at least 28 civilians on Monday.

“It is like the end of days,” said Raed Saleh, the head of the first responders known as White Helmets, describing the last 24 hours of attacks on the oppositionheld eastern Damascus suburb of Ghouta and northwestern Idlib province. The escalating offensive, which included a suspected chlorine attack a day earlier, reached a new ferocity after insurgents downed a Russian Su-25 over the weekend, the first time they scored such a major hit against the government’s main ally, Moscow. AP

U.S. accuses Russia of protecting Syria over chemical attacks

UNITED NATIONS—United States Ambassador Nikki Haley accused Russia on Monday of protecting Syrian President Bashar al-Assad from responsibility for what she said were multiple chlorine gas attacks on civilians in recent weeks. Haley told the UN Security Council that Russia has delayed adoption of a council statement condemning the use of chemical weapons, including a reported chlorine gas attack last Thursday in the opposition-held Damascus suburb of eastern Ghouta that injured over 20 civilians including children.

Russian Ambassador Vassily Nebenzia retorted, “It’s completely clear to us the goal is to basically accuse the Syrian government of chemical weapons use where no perpetrators have been identified.” AP

U.S. states, cities are taking the lead on bump-stock bans

In the immediate aftermath of the deadliest mass shooting in modern US history, there was a fevered pitch to ban bump stocks, the device that allowed the shooter’s semiautomatic rifles to mimic the rapid fire of machine guns.

With that push stalled at the federal level, a handful of states and some cities are moving ahead with bans of their own.

Massachusetts and New Jersey—two states at the time led by Republican governors—as well as the cities of Denver and Columbia, South Carolina, have enacted laws prohibiting the sale and possession of the devices, which were attached to a half-dozen of the long guns found in the hotel room of the Las Vegas shooter who last October killed 58 people and injured hundreds more attending a nearby outdoor concert. A little over a dozen other states are also considering bans on bump stocks. AP

The World BusinessMirror

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Bipartisan immigration measure surfaces; Trump knocks it down

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ASHINGTON—A bipartisan immigration proposal surfaced on Monday in the Senate, only to be quickly knocked down by President Donald J. Trump via Twitter.

Firing back, one senator pushing the narrowly focused compromise said Trump’s “unconstructive engagement” has hurt congressional efforts to strike a broader deal.

Sens. John McCain, Republican-Arizona, and Chris Coons, Democrat-Delaware, said their le g i s l at ion wou ld pro v id e a pathway to legal status—potentially including citizenship— for immigrants who entered the US illegally as children, known as Dreamers.

It would also require the government to strengthen border security by 2020, but stops short of specifically providing the $25 billion Trump wants for a US-Mexico border wall.

“Any deal on DACA that does not include STRONG border security and the desperately needed WALL is a total waste of time.

March 5th is rapidly approaching and the Dems seem not to care about DACA. Make a deal!”

Trump tweeted.

The Dreamers have been protected by the Deferred Action for Childhood Arrivals program (Daca) created by former President Barack Obama.

Trump has said he’s terminating the program but gave Congress until March 5 to renew it, though a federal judge’s temporary order preserving Daca has left that deadline’s impact murky.

Trump has proposed offering a

route to citizenship for up to 1.8 million young immigrants. He would also reduce the types of relatives legal immigrants can sponsor for citizenship—excluding their parents, a sticking point—and eliminate a lottery that provides visas to people from diverse places like Africa.

In a conference call with reporters, Coons said tackling a wider bill has “gotten more politically complicated” because of Trump’s “unconstructive engagement on immigration.” Coons said he was referring to Trump’s use of a vulgarity last month to described African nations.

Coons added that Trump’s push to limit legal immigrants’ relatives is the “most divisive and difficult” of his proposals.

Coons said he believed his plan with McCain would protect around 1.8 million to 2 million young immigrants. It would create a road to legal status for Dreamers who arrived in the US by the end of 2013 and meet other criteria, including no convictions for serious crimes.

Once t hey ’ve become l awful permanent residents, they cou ld fol low e x ist i ng proce dures to apply for citizenship.

In a further blow, the proposed compromise received a cool reaction from moderate senators. Sen. Mike Rounds, Republican-South Dakota, said it lacked sufficient border security provisions, while

The 1-year-old daughter of Yesenia Aguilar of Reading, Pennsylvania, holds a placard during a rally on January 23. AP/Andrew Harnik

[Tackling a wider bill has] gotten more politically complicated [because of Trump’s] “unconstructive engagement on immigration.”—Coons Sen. Susan Collins, RepublicanMaine, cited Trump’s opposition and said it wasn’t “a viable vehicle.”

McCain is being treated in Arizona for cancer and was not on the conference call.

The plan was unveiled days before the Senate plans to begin debating immigration legislation, a battle that faces an uncertain outcome in a politically polarized climate.

It remains unclear what measure Senate Majority Leader Mitch

McConnell, Republican-Kentucky, will use to commence debate and what amendments will be offered.

GOP leaders leaving on Monday evening meeting said Senate debate would likely begin next week.

Trump said last September that he was ending the Daca program, complaining that Obama had overstepped his legal authority in creating it.

But while his 2016 election campaign was laced with anti-immigrant remarks, he’s expressed

sympathy for the Dreamers and he gave Congress until March 5 to pass legislation protecting them.

Democrats and some Republicans want to give Dreamers a pathway to citizenship, but oppose cuts Trump would make in the number of legal immigrants allowed to enter the United States.

Conservatives oppose letting Dreamers become citizens.

That stalemate has led many to believe the likeliest outcome is a narrowly focused bill or even no legislation at all. Some senators have discussed a potential compromise extending Daca protections and financing border security for one year.

The senators’ proposal is similar to a bipartisan House package by Reps. Will Hurd, Republican-Texas, and Pete Aguilar, Democrat-California. AP

Democratic memo faces Bad day turns terrifying as Dow its next hurdle: Trump suffers worst point plunge ever

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ASHINGTON—The House Intelligence Committee voted unanimously on Monday to make public a classified Democratic memorandum rebutting Republican claims that the Federal Bureau of Investigation (FBI) and the Justice Department had abused their powers to wiretap a former Trump campaign official, setting up a possible clash with President Donald J. Trump. The vote gives Trump five days to review the Democratic memo and determine whether he will try to block its release.

A decision to stop it could lead to an ugly standoff involving the president, his top law enforcement and intelligence advisers and Democrats on Capitol Hill.

Trump vocally supported the release of the Republicans’ memo last week, declassifying its contents last Friday over the objections of Democrats and his own FBI, which issued a rare public statement to warn that it had “grave concerns” about the memo’s accuracy.

Last Saturday he claimed, incorrectly, that the memo “totally vindicates” him in the continuing investigation into Russia’s interference in the 2016 election.

The 10-page Democratic document is certain to be less flattering to his case.

Democrats have said the memo corrects mischaracterizations by the Republicans and adds crucial context to actions by the FBI and the Justice Department in obtaining a secret Foreign Intelligence Surveillance Court order to wiretap the former Trump aide, Carter Page, in October 2016. If Trump tries to block the Democratic memo’s release, House rules allow Democrats to seek a closed-door vote of the full House of Representatives to override the president.

With some Republicans now arguing for

its release, the House could override the president’s decision in a rare rebuke to his authority. Democrats were clearly nervous about what might happen during the White House review period.

Rep. Adam B. Schiff of California, the Intelligence Committee’s top Democrat, said the Democrats had already shared their memo with the FBI and the Justice Department and would seek specific explanations from the department and the White House for any changes they might request.

“I think it’s going to be very hard for the White House, like it was hard for the Republicans on the committee, to block the release of this,” Schiff told reporters after the vote. “I am more concerned that they would make political redactions.”

A White House official said on Monday that it was prepared to review the memo.

“We will consider it along the same terms that we considered the Nunes memo—which is to allow for a legal review—national security review—led by the White House Counsel’s Office,” a White House spokesman, Raj Shah, told reporters aboard Air Force One. But the memo’s fate is uncertain. Trump signaled earlier on Monday that he had little goodwill toward the committee’s Democrats, launching a broadside at Schiff.

Trump accused Schiff on Twitter of illegally leaking confidential information from the committee, called the congressman “Little Adam Schiff” and ominously said that he “must be stopped.”

In a separate tweet later in the morning, Trump praised Rep. Devin Nunes of California, who spearheaded the Republican memo as the committee chairman, calling him a “Great American Hero for what he has exposed and what he has had to endure.”

New York Times News Service

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ven before the opening bell, Monday looked like a bad day for the United States stock market. But not even pessimists were prepared for the white-knuckled ride that, for 15 harrowing minutes, sent the Dow Jones Industrial Average tumbling almost 1,600 at its lowest point—its biggest intraday point decline in history.

Coming after a 666-point rout last Friday that shook investor confidence, Monday’s plunge left many investors wondering just where the pain would end.

With the back-to-back declines, the 5.8-percent gain in Januar y has been more than wiped out. And futures trading on Tuesday signaled the sell-off isn’t over, with S&P 500 Index contracts sinking as much as 3 percent before recovering to be 1.2 percent lower as of 5:32 a.m. in London.

“There’s certainly a concern,” said Paul Nolte, a portfolio manager at Kingsview Asset Management in Chicago. “It’s should we get out? What do we do here?

They’re afraid of a crash. Certainly to see the market down as much as they are is disconcerting, especially with the nice run that we’ve had even into this year. They don’t want to give up the gains.”

Despite the magnitude of Monday’s decline—the Dow closed

down 1,175 points, or 4.6 percent, paring about one-third of its biggest plunge—few traders saw panic in the market.

Rather, the move appeared to reflect a growing sense that a strong economy might stoke inflation and push interest rates higher even faster than people have been expecting.

“We had gone too far too fast in the month of January and a little brush fire like this is not a bad thing,” said Philip Blancato, CEO of Ladenburg Thalmann Asset Management in New York.

“Today was a classic risk-off day when so much of the selling is going to be program trades based on technicals. It cleans up some of the people who are on the fence.

You got the irrational exuberance out of the market.”

Adding to the angst were concerns that computer-driven trading strategies—some geared to the low market volatility of late— might have abruptly accelerated the decline.

A few analysts used the term “ f lash crash ” to describe the events, a loose term that denotes everything from exchange malfunction to harmonized selling by quant funds.

“Millions of quant orders went in one direction, and it overwhelmed a lot of these breakers.

That’s it,” Dennis Debusschere, head of portfolio strateg y at

Evercore ISI, said by phone from New York. “It was very quant, very systematic.”

A group that may be suffering the most is anyone who is shorting volatility, a trade that amid two years of market tranquility has been a route to some of the easiest money on Wall Street. As markets buckled, the Cboe Volatility Index surged 124 percent to 38.8. It closed at 37.32, still up 115.6 percent.

T hat sa id, tod ay’s sel l- of f isn’t completely unprecedented, particularly in comparison to the period during and after the financial crisis. For four days in August 2011 the Dow alternated up and down days of 4 percent and 5 percent, and it tumbled as much as 6.6 percent on August 24, 2015. Those days were quick ly forgotten as the bull market picked up steam.

“I don’t sense a whole lot of panic,” Doug Ramsey, chief investment officer at Leuthold Group Llc. said by phone. “Just 10 days ago momentum was at the highest level in the S&P history and it would be very unusual if the stocks made a final bull high when the momentum was that strong. I’m not sure this is the end of the adjustment, but the odds are in favor of the market stabilizing here in the short term and trying to push to a higher high.”

Bloomberg News

www.businessmirror.com.ph

The World BusinessMirror

China’s next debt bomb is an aging population

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hina’s pension shortfall is emerging as the next big challenge for policy-makers as they intensify their yearslong campaign to keep rising debt from derailing the economy.

Aging in the world’s most populous country means pension contributions by workers no longer cover retiree benefits, forcing the government to fill that gap since at least 2014.

Pension expenses rose 11.6 percent to 2.58 trillion yuan ($410 billion) in 2016, leaving the government a 429.1-billion-yuan tab to cover the shortfall, according to the latest available data from the Finance Ministry.

That shortfall will reach 600 billion yuan this year and 890 billion yuan in 2020 if the system isn’t reformed, according to Wang Dehua, a researcher at the National Academy of Economic Strategy in Beijing.

Enodo Economics in London, which has advised policy-makers on the matter, forecast last year that it could soar to 1.2 trillion yuan by 2019. The Finance Ministry doesn’t release estimates.

“China’s biggest fiscal risk is pension risk,” said Wang, whose institute is under the Chinese Academy of Social Sciences, the government’s top think tank. “There are big problems in the pension system if it can only keep operating with large fiscal subsidies.”

The shortfall adds urgency to President Xi Jinping’s quest to stem rampant growth in corporate debt, given the government will need to fund widening deficits of its own in coming years.

Leaders may offer an update to the pension outlook on March 5 when they convene for the annual National People’s Congress in Beijing.

W hile government revenue rose 7.4 percent last year for its first acceleration since 2011, that’s unlikely to keep rebounding amid slower economic growth.

That would limit Beijing’s ability to cover the shortfall, which may push policy-makers to issue debt to bridge the gap.

“China has been doing so well in many aspects in the past years, but it has really been left behind in pensions,” said Stuart Leckie, chairman of Stirling Finance Ltd. in Hong Kong, a consulting firm for pension funds and asset managers in Hong Kong and mainland China.

Though the government may always be able to pay pensions, contributions from employees and companies could rise drastically or payouts may be cut, he added.

Premier Li Keqiang pledged in his report to last year’s congress to increase the allowances.

“We will weave a strong safety net to ensure people’s well-being,” Li said. “We will continue raising basic pension payments and see they are paid on time and in full.”

T he popu lation is g ray ing quickly. The State Council said last year that about a quarter of China’s population will be 60 or older by 2030, up from 13.3 percent in the 2010 census. Meanwhile, scrapping the one-child policy hasn’t raised birth rates as high living costs deter larger families. Births fell to 17.2 million last year, from 18.5 million in 2016.

Still, unbalanced demographic and employment trends may help the economy as they support further rebalancing and consumer spending, Enodo’ Chief Economist Diana Choyleva said.

“China’s graying population is often analyzed in the context of a rising old-age dependency ratio and the strain it implies for the public finances,” she wrote in a report this month. “But it’s worth pointing out that a higher proportion of pensioners, who consume but do not produce, should lead to a structural increase in the share of consumer spending in GDP.” Those benefits aside, signs of strain are already visible in the pension system, and the deficit is poised to “quickly increase” after 2020, according to Liu Shangxi, director of Chinese Academy of Fiscal Sciences, a think tank affiliated with the Finance Ministry.

The central government said last November that a handful of larger state-owned enterprises and financial institutions would transfer 10 percent of their stateowned equity to social security funds to help ease pension payment pressure. New details haven’t been released.

The Finance Ministry and Ministry of Human Resources and Social Security (MOHRSS) didn’t respond to requests for comment faxed on Monday morning. The MOHRSS has delayed the release of annual social insurance reports, offering a less-timely glimpse into the nation’s pension burdens.

China has been paying retirees with contributions made by the working population since it set up the current pension system in early-1990s. The gap between money coming in and payments going out has been widening as more retire and fewer join the work force.

“China should encourage individuals to invest more for their retirement to reduce the burden on the government, which can’t shoulder the responsibility all on its own,” said Zhang Bin, a senior researcher at the China Finance 40 Forum, a Beijing-based think tank. New York Times News Service

Wednesday, February 7, 2018

A7

From oil to solar: Saudi plots a shift to renewables

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HAHRAN, Saudi Arabia— Life in Saudi Arabia has long been defined by the oil that flows from the kingdom. Over decades, the vast wealth it pumped out paid not just for gleaming towers and shopping malls, but also for a government sector that employs a majority of working Saudis.

Now, Saudi Arabia is trying to tie its future to another natural resource it has in abundance: sunlight.

The world’s largest oil exporter is embarking, under Prince Mohammed bin Salman, on an ambitious effort to diversify its economy and reinvigorate growth, in part by plowing money into renewable energy.

The Saudi government wants not just to reshape its energy mix at home but also to emerge as a global force in clean power.

Reaching that goal is a big if.

But the strategy is finally making progress after fits and starts.

R iyadh on Monday tapped ACWA Power, a Saudi energy company, to build a solar farm that would generate enough electricity to power up to 200,000 homes.

The project will cost $300 million and create hundreds of jobs, according to Turki al-Shehri, head of the kingdom’s renewableenergy program.

By the end of the year, Saudi Arabia aims to invest up to $7 billion to develop seven new solar plants and a big wind farm. The country hopes that renewables, which now represent a negligible amount of the energy it uses, will be able to provide as much as 10 percent of its power generation by the end of 2023.

“A ll the big developers are watc h ing Saud i,” sa id Jenny Chase, an analyst at Bloomberg New Energy Finance, a market research firm.

“The country has made grand plans and pronouncements, but various bodies within it have failed to agree on the new way forward,” Chase added. She referred to the agreement as “the first step in creating what is widely expected to be a major market.”

Saudi Arabia has talked a big game when it comes to renewables.

It adopted ambitious targets for green power several years ago, but no major projects were carried out, and little changed. That

$7B The amount Saudi Arabia aims to invest to develop seven new solar plants and a big wind farm

is not unusual.

The country’s biggest solar farm in operation covers a parking lot of the national oil company, Saudi Aramco, here in Dhahran.

Lying just a couple of miles from a fenced-off area honoring the country’s first commercially viable oil well, it generates enough power for a nearby office block.

Still, the experiment with solar power has been an important catalyst, and the company built a team of experts in renewable power. The experience helped Saudi Arabia focus on conventional solar panels over another system, known as concentrated solar, in

which mirrors focus sunlight to create heat.

The renewables strategy finally started to take real shape when Khaled al-Falih took over as energy minister in 2016. Falih made solar and wind a priority for the kingdom, and set up a new unit last year to expedite the work. Much of the staff was drawn from Aramco.

Shehri, who had worked at Aramco before leading the kingdom’s renewables program, said he faced an “extremely challenging” task.

Meeting Saudi Arabia’s targets would require contracts for a series of new facilities to be awarded by the end of 2020. “The only way this was possible,” he said, “was because we have done previous work.”

Saudi Arabia, with its vast oil resources, would seem an unlikely champion for renewables. But the country’s location and climate mean it has plenty of promising sites for solar and wind farms.

The costs of installing and operating those two technologies have fallen drastically around the world in recent years. That means that even in a country where oil is plentiful, renewables beckon as a cheap, and clean, alternative to traditional fossil fuels.

For the project announced on Monday, Riyadh received bids for the solar farm, which will be built in Sakaka, in northern Saudi Arabia, that rivaled the lowest ever submitted at auctions anywhere.

At 2 cents to 3 cents per kilowatt-hour, a wholesale measure of electricity, solar power here would be below the cost of fossil fuelgenerated electricity, Shehri said.

“Ju st look at t he pr ices,” Chase said. “ That is why they are doing it.”

A big push into wind and solar power would also have other benefits, notably allowing Saudi

Arabia to sell more of its oil.

Saudis rely on air-conditioners for much of the year, and the scorching Arabian summer sends demand for power soaring. Much of that electricity today is generated at power plants fueled by oil.

Last June the facilities burned an average of 680,000 barrels of oil a day, according to data supplied by the Joint Organizations Data Initiative, a monitoring group.

That figure—comparable to the output of a modest-size oilproducing country like Egypt— was down from nearly 900,000 barrels a day in 2015, but it still essentially represents wasted cash. Had it been sold overseas, that crude could have added $47 million a day to government revenue, at current prices.

Sel l ing oi l inter nat iona l ly is central to funding the Saudi budget. The terms of the Sakaka project’s auction required that developers pay the upfront cost of the solar farm, in return for payments for the power they supply to the grid. That would allow Saudi Arabia to continue focusing on producing and exporting oil while it makes the shift to cleaner power.

In the 1920s the area surrounding the Aramco offices here was little more than a series of rocky hills. But then a team of American geologists discovered crude, and everything changed.

Dhahran is now home to the headquarters of one of the world’s most advanced and prolific energy companies, with a series of research laboratories, training centers and even a golf course on site. What had been a scattering of small towns is now a major metropolitan area housing around 4 million people.

New York Times News Service

A 3D drilling simulator, an advanced tool to teach students at the Saudi Aramco Upstream Professional Development Center in Dhahran, Saudi Arabia, on January 10 Christophe Viseux/The New York Times

Malaysia, Singapore agree to create new stock exchange trading link

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China’s aging population Bloomberg

ingapore and Malaysia said they would create a trading link to connect their national stock exchanges.

The two markets have reached sufficient sophistication and maturity to set up a market corridor, Malaysian Prime Minister Najib Razak said at a Securities Commission conference in Kuala Lumpur on Tuesday. The link will be established by the end of the year, he added.

Singapore and Malaysia’s regulators and national exchanges will work on the arrangements for the system that will connect markets with more than $1.2 trillion in value and about 1,600 listed companies.

The move comes just months after the closure of an earlier attempt to connect the markets,

which started in 2012. While that effort failed, the success of Hong Kong’s links with exchanges in mainland China made it more pressing for bourses in Southeast Asia to establish their own regional alliance, said Song Seng Wun, an economist at CIMB Private Banking in Singapore.

“Reg iona l competition has put pressure on the exchanges,” Song said. “ The two exchanges don’t want to be left behind and have investors f lock elsewhere so now they’re waving a f lag and saying, ‘we, too, will have a trading link.’”

As well as the cross-border buying and selling of stocks, the link will cover arrangements, including clearing and settlement, a first for the two markets, according Singapore Exchange Ltd.

The agencies will create a supervisory and enforcement arrangements, and will work with Singapore Exchange and Bursa Malaysia to start the link’s operation.

“Once the link is there, it would encourage a lot of crossborder research reports and, in this case, the exchange of information would be easier,” Danny Wong, chief executive officer at A reca Capital Sdn. in Kuala Lumpur, said by phone. “ We hope to cover more on the small- and mid-caps. With this kind of trading link we hope to expand into more undiscovered gems in the market.”

T he t wo n at ions he ld t a l k s as early as 2004 about a l low ing i nvestors to t rade sec u r it ies on eac h ot her ’s e xc h a nges by t he end of 20 05. A system t hat

con nec ted stoc k m a rket s i n Ma laysia, Singapore and T ha il a nd shut l a st yea r, f ive yea rs a f ter it s h igh- prof i le debut.

The Asean Trading Link had star ted w it h Bursa Ma laysia and Singapore Exchange, with the Stock Exchange of Thailand also joining.

“The trading link will help lower trading costs for investors and encourage greater cross-border investments in the stocks listed on each other’s exchanges,” Lee Boon Ngiap, assistant managing director at the Monetary Authority of Singapore, said in a statement. “This will improve the liquidity of both our stock markets.

I hope this initiative will in time expand to include the rest of the stock exchanges in Asean.”

Bloomberg News

Banking&Finance BusinessMirror

A8 Wednesday, February 7, 2018 • Editor: Jun B. Vallecera

www.businessmirror.com.ph

‘Seven-year bond rate not worth accepting’

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ROSPECTS of higher credit costs as early as this week aggravated by rapid and unnerving developments in the equities markets, including the Philippines, compelled Treasury officials on Tuesday to reject all offers on P20 billion worth of Treasury bonds (T-bonds).

At the maiden sale of seven-year Tbonds, none of the offers from the various government securities eligible dealers (GSEDs) pushed past the auction committee who opted to pass up on some P29 billion worth of offers as bid rates were as high as 5.27 percent.

This compared with the seven-year bond rate averaging only 4.39 percent at the sale of the same seven-year T-bonds in October last year.

The drastically ramped-up bond rate prompted the Bureau of the Treasury (BTr) to reject all offers at the Tuesday sale.

“We see that their rates are really way beyond our estimates of what the reasonable rates we expected from this tenor, for this new issuance,” National Treasurer Rosalia V. de Leon said.

Should the BTr award at least half of the P20 billion on offer, around P10.574 billion, the average annual rate would have already reached 5.17 percent increasing by 78 basis points, from the previous auction rate of 4.39 percent.

She attributed the sharp but aborted escalation in seven-year bonds to inflation expectations all too suddenly higher in recent days. This developed also in the wake of the latest price survey in which the rate at which prices changed in January bolted to 4 percent, from only 3.3 percent in December last year.

“And, of course, given expectations on inflation following the January rate of 4

CTRP Package 2 seen filed this month

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LAWMAKER has expressed optimism that the second package of the Comprehensive Tax Reform Program (CTRP) will be filed with the House Committee on Ways and Means within the month.

According to Rep. Dakila Carlo E. Cua of the Lone District of Quirino, he is positive that the proposal submitted by the Department of Finance (DOF) on Package 2 of the CTRP will be filed at the Committee on Ways and Means before the end of February.

“Give me maybe two weeks, before two weeks definitely,” Cua told financial reporters on Monday.

Cua is also the chairman of the Committee on Ways and Means at the House of Representatives.

Under Package 2 of the CTRP, the DOF proposes to lower the corporate-income tax to 25 percent, from the current 30 percent, and rationalize the fiscal incentives for businesses to make them performance-based, targeted, time-bound and transparent. The package is touted as revenue neutral.

The DOF submitted Package 2 only last month when legislators resumed regular sessions on January 15.

According to the DOF, the government said the incentives granted to businesses would generate jobs, stimulate the economy in the countryside and promote research and development. It also contains sunset provisions so that tax perks do not

last forever and regularly reported so the government can determine the magnitude of their cost and benefits to the economy.

Cua said the committee will tackle both Package 1B and Package 2 simultaneously when the latter is at the committee level.

“We can do simultaneous consideration,” he said.

Republic Act (RA) 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) Act, contains initial gains under the CTRP as Congress passed two-thirds of the potential revenues from the first package. The other third is contained in Package 1B of the TRAIN. Package 1B has provisions for a estatetax amnesty, a general tax amnesty, the

proposed adjustments to the motor vehicle users charge, as well as amendments to the bank-secrecy law and the automatic exchange of information.

“There’s a large possibility that this package will be more successful than the last,” he said.

About 70 percent of the incremental revenues generated from the TRAIN will help underwrite the buildup of public infrastructures under President Duterte. The remaining 30 percent will be used for social protection programs.

The DOF expects RA 10963 or the TRAIN package to generate estimated revenues totaling P130-billion ion its first year alone. Rea Cu

Case clippings

By Justice S J Ranada Jr.

CORPORATION–liability of debtors after dissolution The mere revocation of a defendant corporation’s certificate of registration by the SEC does not result in the abatement of the proceedings. The dissolution of a creditor-corporation does not extinguish any right or remedy in its favor, as provided in Section 145 of the Corporation Code. As a necessary consequence of this rule, the corresponding liability of the debtors of a dissolved corporation must also be deemed subsisting Reyes v. Bancom 11 Jan. 2018

GR 190286 Sereno, C J

Bitcoin breaches $6,000 as cryptocurrency exodus accelerates

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RYPTOCURRENCIES continued their 2018 swoon as worries over escalating government scrutiny combined with a broader flight from riskier assets to send Bitcoin to its lowest level since November.

The biggest virtual currency sank as much as 16 percent to $5,992 on Tuesday and was trading at $6,103.93 as of 2:51 p.m. in Hong Kong. Alternative coins Ripple, Ether and Litecoin all tumbled at least 14 percent.

The latest bout of regulatory jitters centered on the United State, with Bloomberg reporting that the country’s two top market watchdogs are planning to ask Congress to consider federal oversight for digital-currency trading platforms. Chiefs of the Commodity Futures Trading Commission and Securities and Exchange Commission will

appear together at a Senate Banking Committee hearing on Tuesday.

Cryptocurrencies tracked by Coinmarketcap.com have lost more than $500 billion of market value since early-January as governments clamped down, credit-card issuers halted purchases and investors grew increasingly concerned that last year’s meteoric rise in digital assets was unjustified. This week’s sell-off has coincided with a rout in global equities, with markets in Asia extending losses on Tuesday following a white-knuckle day for US stocks.

Some technical indicators suggest the rout in Bitcoin has further to go.

The cryptocurrency’s Moving Average Convergence Divergence indicator, the most profitable of 22 trading signals tracked by Bloomberg over the past year, is flagging further downside after turning bearish last December.

Bitcoin also dipped below its 200-day moving average for the first time in more than two years on Tuesday. The last time that happened, in August 2015, the cryptocurrency sank as much as 24 percent over the following two weeks.

DE LEON

percent,” de Leon said.

She quickly added that while the actual inflation print ultimately proved higher than most analysts anticipated, the headline inflation in January was actually “embedded in our own estimates.”

Government commits to embrace digital space innovations

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HE Department of Finance (DOF) said the Philippines needs to catch up with developments in the digital space, starting with modernizing its physical infrastructure and adapt to the changing needs of the global economy.

According to Finance Secretary Carlos G. Dominguez III, the government also has to encourage people and industries to embrace the digital economy to prepare the country for the future now being shaped by technology companies like Alibaba.

“The Philippines has to catch up first like China. But first, we have to raise money and convince people, encourage new industries,” Dominguez said at the New Economy Workshop organized by the Alibaba Business School for visiting Philippine officials and representatives of the business sector in Hangzhou, China.

Brian Wong, the Alibaba Group vice president and head of globalization initiatives, said that like China, the Philippines can capitalize on the digital era by cultivating entrepreneurship in e-commerce and come out with regulations supportive of digital trade and electronic payments systems.

He said electronic payments in China were nonexistent in 1999 but has now expanded to 11 times the size of similar transactions in the US. In 2016 China recorded

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ORE than ever, we live in interesting times. The insatiable appetite to be on top led to sophisticated and innovative schemes/structures. Everything has consequences, though, and oftentimes, the extent of the likely occurrences of “damages and risks” is at best an estimate.

An organizational development consultant says, “The winds of change are life generating opportunities but the waves of development invariably require order and stability. There is always a paradox

in every change. As a law of life, out of order comes the need for change, but out of change comes the need for order. The order and norms of things require the system to take stock of breath to settle down for stability and sustainability.”

To have order, the agent of change must be a role model and must have the credibility and respect of all.

Large-scale change programs are successful only when they are led from the “top” by committed and honest change agent leaders. More important, the programs should be implemented with purpose and passion anchored on discipline.

Peter Senge describes a leader with personal mastery as someone who constantly strives to see cur-

$790-billion electronic transactions against the United States’s $79 billion, data from a research report showed.

“That is the type of change that can happen in the country. In the Philippines with a hundred million plus population, has a massive market that can be developed. Like the secretary said, you can catch up and leapfrog,” Wong said.

The New Economy Workshop for Philippine officials is the first overseas training program organized by the Alibaba Business School. The program will be expanded to more countries in Southeast Asia.

Upon the invitation of Alibaba Group Founder Jack Ma, Dominguez, along with Foreign Secretary Alan Peter S. Cayetano, Budget Secretary Benjamin E. Diokno, Bangko Sentral ng Pilipinas Deputy Governor Maria Almasara Cyd Tuaño Amador, Bases Conversion and Development Authority President and CEO Vivencio B. Dizon and other government officials and representatives from the Philippine business sector attended the Alibaba’s three-day workshop designed to gain a wider understanding of an e-commerce ecosystem including the digital technologies that can be employed to improve the country’s nascent online payments system in pursuit of inclusive growth. Rea Cu

SSS automated tellering accepts contribution payments using PRN

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HE Social Security System (SSS) said all 94 branches nationwide are ready to accept contribution payments from employers and individually paying members under the Enhanced Contribution Collection System using generated Payment Reference Numbers (PRNs).

Since January 16, self-employed, voluntary and overseas Filipino worker members are required to have their PRN when paying to enable real time posting of their contributions (RTPC).

“Individual members who have registered their mobile numbers with the SSS receive their PRN through SMS. Those who have registered in our My.SSS facility at the SSS web site can access their statement of account with the corresponding PRN. On the other hand, members who have not yet registered in the My.SSS facility will be redirected to the SSS branch’s e-center or the Member Services Section for assistance,” SSS President and Chief Executive

In the midst of changes “To survive and succeed, every organization will have to turn itself into a change agent.” ­— Peter Drucker

According to her, the high bid rates from the banks arose from ostensibly higher inflation expectations and from apprehension over what the Monetary Board meeting this Thursday would decide on when they sit down and decide on the rate at which the Bangko Sentral ng Pilipinas borrows from or lends to banks.

“Maybe also it’s a calibration of the expectations on the February 8 policy ratesetting [meeting] of the Monetary Board given the inflation print today of 4 percent,” de Leon said.

The BTr last sold seven-year T-bonds in October last year when all P15 billion worth of bonds were sold even as the rate retreated by 0.5 basis points.

That sale received almost twice the amount in tenders totaling P29.023 billion. The BTr rejected a total P14.023 billion. Rea Cu

FINEX FREE ENTERPRISE Dr. Conchita L. Manabat rent reality clearly and understands that there may be differences between her or his perceptions, mental models and true reality.

The encouraging results of economic development put the country as one of the performers in this side of the world. Against this good news, the pursuit of changes in our country is so widespread—the system of government, educational

system, taxation, laws, regulations, international alliances and more.

We should welcome change for the greater good. It is recommended that each player attempt to rise above the perceptions, the over-emphasis of negative information and even fake news, and seek out the positive developments as closely as the negative developments are sought out for them. May those taking the lead be real role models, committed and honest. May they share good deeds and exercise discipline leading all to a better life.

As a people and for our own sake, we should pull our act together and care for ourselves. In the midst of these many changes, let our love of country prevail for nobody else will

Officer Emmanuel F. Dooc said.

Dooc also said that a special lane in all SSS branches was created so members can personally access their My.SSS account to check and edit their SSS records.

The PRN-based system will address delays in the posting of contribution payments that result in ineligibility to SSS benefits and loans and delays in the processing of claims. The SSS receives thousands of requests for manual verification and correction of contribution records monthly. Most of the time, these are caused by errors in the contribution collection reports submitted by the employers and delayed or nonsubmission of such reports.

Aside from the My.SSS facility, individually paying members can also get their PRN by calling the PRN Helpline at 920-6446 to 55, or the Toll-Free Hotline 1-800-10-225, which is open 24 hours, Monday to Friday. Members can also send their PRN queries and requests via e-mail through PRNHelpline@sss.gov.ph.

care for us. At the end of the day, history will judge all the players and all of us.

Dr. Conchita L. Manabat is the President of the Development Center for Finance, a joint undertaking between FINEX Foundation & the UP Virata School of Business. A past President of FINEX and past Chair of the International Association of Financial Executives Institutes (IAFEI), she is now the Chair of the Advisory Council of IAFEI. She is also a member of the Consultative Advisory Groups of the International Auditing & Assurance Standards Board and the International Ethics Standards Board for Accountants. She can be reached at clm@clmanabat.com.

ExportUnlimited BusinessMirror

Editor: Efleda P. Campos • Wednesday, February 7, 2018 A9

DTI-EMB leads local organic-food makers to Biofach 2018 in Germany

By Gil Ragil

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IPPLES Plus-enrolled companies with organic-certified products recognized by the European Union are set to participate in Biofach 2018, touted to be the world’s leading trade fair for organic food slated to be held from February 14 to 17 in Nuremberg, Germany.

Ripples Plus, or the Regional Interactive Platform for Philippine Exporters Plus, is a program that prepares participating Philippine companies, most of whom are small and medium enterprises, to make them export-ready, and to enhance their export capacity and competitiveness. After attaining both, the program seeks to match them with prospective foreign buyers and vigorously pursues the promotion of their products in the global market.

The Export Marketing Bureau (EMB), under the Department of Trade and Industry (DTI), with Alegria C. Donado, assistant chief of its Emerging Products Division, as head of mission, has organized and is set to conduct and manage an Outbound Business Matching Mission composed of Philippine companies manufacturing and producing natural and organic products.

The products are as diverse as coco water/juice/milk, virgin coconut oil, instant powdered beverages, botanicals, candies, cosmetics, seasonings and raw brown sugar (muscovado).

Participating Philippine companies include Ahya Coco Organice Food Manufacturing Corp., Herbanext Laboratories Inc., Healthy Sweets Mindanao Corp., Japan Philippines Malunggay Eco Farm Inc., Pasciolco Agri Ventures, Raw Brown Sugar Milling Co. Inc., Team Asia Corp., Tropicana Food Products Inc., Tree Life Coco Sugar and Wellness International Corp.

This will be the very first time that Philippine companies will be exhibiting at Biofach since it started in 1990.

As posted in the official Biofach 2018 web site, Organic is more than a label or certification: Organic stands for quality and conviction—for the responsible use of nature’s resources. Biofach in the Exhibition Centre Nuremberg is the place where people share their passionate interest in organic food, get to know each other

and exchange views, and this, since 1990. To date, 2,950 exhibitors and more than 50,000 visitors [including Vivaness] from the national and international organic sector are expected at Biofach 2018. The perfect opportunity for visiting professionals to meet organic producers from the organic market and be inspired by the sector’s latest trends.

Opinions on Biofach were elicited from notable persons, including Dr. Felix Prinz zu Lowestein, chairman of the German Federation of the Organic Food Industry (BOLW); Markus Arbenz, managing director of Biofach’s international patron, Ifoam—Organics International; and Petra Wolf, member of NÜrnbergMesse’s management board.

Lowenstein said, “The exhibition center became a lively international marketplace dominated by impressed exhibitors and visitors in aisles of Biofach. The fact that this trade fair is attended by a number of top political, administrative and diplomatic corps representatives means it has become one of the main places for debates concerning the future of food and organic farming industries. With Germany appearing as the country of the year, the German organic enterprises at the exhibition were able to highlight their abilities in the areas of innovation and sustainability in a special way.”

Arbenz, meanwhile, stated that, “It’s been a record year for the organic sector and a record year for Biofach. The trade fair reflects the great mood in the industry excellently. It is where attention is drawn to the topics that affect the professionals in production, trade, services and politics and that people have to be aware of if they want to be successful with organic products. For both Germany and the rest of the world, organic farming is a tool that can be used to achieve the United Nation’s global Sustainable Development Goals, which are officially supported by most countries.”

Wolf said, “After four successful days at the exhibitions, we and the organic industry are pleased that there was a great atmosphere in the halls and that those who came were able to meet high-quality contacts. As well as by the country of the year, Germany, plenty of inspiration was provided by the Stadtlandbio [city country organic] congress and the varied programs entitled Nuremberg the Organic City.

We’re already looking forward to the next edition for the exhibition duo and seeing in all the market players for Biofach and Vivaness 2018.”

How was it a year ago? The exhibition duo consisting of Biofach, the world’s leading trade fair for organic food, and Vivaness, the international trade fair for natural personal care, set a new record in 2017 by welcoming a total of 51,453 trade visitors.

People traveled to Nuremberg for the industry get-togethers from 134 countries, and were impressed with the range of products offered by the 2,793 exhibitors (258 of these were at Vivaness) from 88 countries and allowed themselves to be inspired by the country of the year, Germany.

The organic industry as a whole continued to progress, too: In 2016 German households spent 9.9 percent more on organic food and drink than in the year before with sales amounting to €9.48 billion, according to the German Federation of Organic Food Industry. More and more clients are opting for natural cosmetics, as well.

The results of a joint survey conducted by naturkosmetick konzepte, the Society for Consumer Research (Gfk), IRI, IMSHealth and BioVista, showed that the German natural-cosmetics market has a market share of 8.5 percent and is worth €1.15 billion, meaning it is the strongest naturalcosmetics market in Europe.

The exhibitors at the world’s leading trade fair for organic food were extremely satisfied at the end of the event. According to a survey carried out by an independent institute, 89 percent of the exhibitors at Biofach said the exhibition had been a success overall. About 93 percent praised the quality of the visitors at their stands and were able to reach their target groups, while conversations at the stands also led to the initiation of new business relationships for 93 percent.

In addition, 85 percent expected post-exhibition business as a result of contacts acquired over the four days. Following the positive response to their products, 88 percent of the Biofach exhibitors intend to take part again in the future. As regards the visitors, 97 percent were happy with

the range of products available and 94 percent plan to come again.

The 2017 Biofach and Vivaness congresses drew great interest from all the market players, too. The industry and knowledge forums, which included over 120 different events altogether, were attended by a total of 8,125. The most popular event relating to Germany as the country of the year was the German Federal Ministry of Food and Agriculture’s (BMEL) presentation on its strategy for the future in organic farming (ZOL), which was attended by over 150. The event with the most attendees overall was “Global Market Overview,” which was attended by over 240.

The area of market research in the Vivaness congress also attracted special interest. More than 100 attended the presentation, entitled “The 2016 natural cosmetics year: Looking back and looking forward.”

Like Biofach, the 2017 presentation of its natural personal-care counterpart held for a cosmetics market which is becoming greener all the time ended with good results. In addition to the pavilions of Vivaness’s two honorary sponsors, Cosmos and Natrue, visitors showed keen interest in numerous other highlights. These ranged from the novelty stand, displaying 196 innovative products to the “German Newcomers” pavilion, which was supported by the German Federal Ministry for Economic Affairs and Energy (BMWi) and housed 10 exhibitors, to the young innovative companies from abroad involved in the special show Breeze. With representatives from nine countries, Breeze was even more international than in 2016 and included enterprises from Australia and the United States, among others.

Said Harald Dittmar, the managing director of the German Association of Industrial and Retail Companies for Medicines, Health Foods, Food Supplements and Cosmetics (BDIH), which is one of the founding members of Cosmos: “Vivaness 2017 was a complete success for Cosmos and the BDIH. Even the companies from abroad exhibiting Cosmos-certified products at the Cosmos pavilion this year for the first time were all very positive with their experience at Vivaness. This shows that the market for natural and organic cosmetics is continuing to grow steadily and there are good opportunities even with smaller companies and startups. The demand for certification in accordance with the Cosmos standard has increased significantly once again both in and outside of Germany, and the fact that compliance with the standard became compulsory for allo

Cosmos members on January 1, 2017, is bound to have contributed here. As one of Vivaness’s honorary sponsors, they were delighted to be able to enrich the trade fair with and appearance dominated by internationality.”

Said Klara Ahlers, the president of Natrue: “Congratulations on producing such successful trade fairs. Over 50,000 visitors confirms how great the international interest in Biofach and Vivaness and in the organic and natural cosmetics industries is. Vivaness informed, inspired and showcased current trends through product worlds, a specialized supporting program and discussions. As an honorary sponsor of Vivaness, they are pleased it was a success. It is an international meeting place and an important shop window for certified natural cosmetics and Natrue. They marked Natrue’s 10th anniversary at Vivaness and they can’t imagine a better place to have celebrated the occasion. The Natrue team met a lot of interesting people and were able to acquire a large number of new contacts. The 10 exhibitors in the Natrue pavilion were also very happy.”

A wide range of newly developed products and innovative discoveries were presented at the Biofach and Vivaness novelty stands once again in 2017. There were 770 new products registered for these two stands altogether (Biofach, 574; Vivaness, 196), and visitors were given the opportunity to vote for those products that they believed were the most interesting and worthy of recognition.

In order to give participating Philippine companies and interested individuals a glimpse on what these interesting products are, the lucky winners of the resulting Best New Product Awards can be viewed at www.biofach. de/best-new-product and www.vivaness. de/best-new-product.

The Olive Oil Awards were also presented in the Olive Oil World of Experience at Biofach. A list of winners here can be viewed at www.biofach.de/olive-oil-award.

The DTI-EMB said they hope “that the international recognition has given our Philippine natural and organic businesses and individuals the impetus to pursue their respective commitments and interests in all things natural and organic. The entire world is waiting for Philippine natural and organic producers to offer it what they have been nurturing and taking care of all these years. We wish them nothing but success in Biofach and Vivaness 2018 for we know that they have what the world demands and requires when it comes to natural and organic products be it food, botanicals or cosmetics.”

upcoming events

FEB 8

Time: 6 p.m.-8:30 p.m.

Event: BASIQS: QBO’s Introductory Class on Startups Venue: QBO Innovation Hub, G/F, DTI International Building, 375 Sen. Gil Puyat Avenue, Makati City

FEB 9-13

Event: Outbound: QBO’s Introductory Class on Startups Venue: QBO Innovation Hub, G/F, DTI International Building, 375 Sen.

Gil Puyat Avenue, Makati City

FEB 9-13

Event: Outbound Business Matching Mission in Ambiente 2018 in Frankfurt, Germany

Venue: Frankfurt, Germany

FEB 11-21

Event: Outbound Business Matching Mission at BIOFACH in Nuremberg, Germany Venue: Nuremberg, Germany

FEB 13

Time: 6 p.m.-10 p.m.

Event: QBO QLITAN Special: Let’s Play a Love Game! CA Pre-Vday Startup Game Night)

Venue: QBO Innovation Hub, G/F, DTI International Building, 375 Sen. Gil Puyat Avenue, Makati City

FEB 15

Time: 1 p.m.-4 p.m.

Event: QBO QONSULTATION: Design and Branding Venue: QBO Innovation Hub, G/F, DTI International Building, 375 Sen. Gil Puyat Avenue, Makati City

HUNGARIAN OFFICIALS VISIT DTI

The Ambassador of Hungary Dr. József Bencze, with Hungarian Deputy Chief of Mission Dávid Ambrus, paid Trade Secretary Ramon M. Lopez a courtesy visit on January 29 to discuss to the Philippine delegation the upcoming Hungary Roadshow in 2018. In photo are (from left): Department of Trade and Industry’s (DTI) Industry Development and Trade Policy Group Undersecretary Ceferino S. Rodolfo, DTI Trade and Investments Promotion Group Assistant Secretary Rosvi Gaetos, Lopez, Bencze, Ambrus and Board of Investments Director Angelica M. Cayas.

Export potential map

T

HE Philippines’s biggest markets for bananas, fresh or dried, are Japan, China and Russia.

The country also has closest export links with Japan. However, the Philippines has yet to maximize its export potential in Japan and China.

In Japan there remains $95.5 million worth of

untapped potential in the banana industry. The Chinese market has a $6.9-million export potential yet to be capitalized on.

Germany shows the largest absolute value difference between potential and actual exports in value terms. This untapped potential is valued at

$536.9 million. Following Germany, Belgium the United Kingdom, and the United States, Germany also has some of the largest export potential for bananas, worth $150 million to $170 million.

Source http://exportpotential.intracen.org/#/home

Ripples Plus exhibitors to showcase Filipino brand in Ambiente 2018

P

ARTICIPANTS under the Regional Interactive Platform for Philippine Exporters (Ripples) Plus program will be part of the Ambiente 2018 from February 9 to 13 in Messe Frankfurt, Germany.

The local companies participating in Ambiente are Artisana Island Crafts, Silay Export, Marsse Tropical Timber Plantation, Red Slab Pottery and PumicUnlimited Ventures.

The RIPPLES Plus Program is headed by DTI-Export Marketing Bureau (EMB) in partnership with DTIRegional Operations Group (ROG).

The program is assisting emerging micro, small, and medium enterprises in the development of their products and services through strategic interventions such as trainings and capacitybuilding; investment, marketing and promotions, support for innovation, product development and design; market access facilitation through Mutual Recognition Arrangements and certifications. These interventions or modes of assistance will ensure that the companies are competent and exportready. The program has worked toward increasing the number of internationally competitive local product and services exporters with EMB at the helm.

The Philippines’s Ambiente 2018 participation is under the Lifestyle Philippines brand with the theme “Sustainability through Design,” in which the brand bridges the ecological gap between ethics and aesthetics, infusing nature and artisanship in crafting products for modern living.

Returning and new Filipino exhibitors from the home-décor sector will showcase products under the trade fair’s three categories: Dining, Giving, and Living.

Marsse Tropical Timber Plantation and Celestial Arts qualify for the Dining category, which covers table, kitchen, houseware and household products. GSG Paper is in the Giving category for their handmade and vibrant products that fit in the group’s varied gift selection.

Red Slab Pottery, Artisana Island Crafts, Silay Export, Tadeco Home Décor, PumiceUnlimited Ventures, 33 Point 3, Arden Classic, Chanalli, Finali Furniture & Home Accessories, Freden Export, Larone Crafts and Nature’s Legacy are under the Living category’s home interiors and design collection.

The country has a trademark on featuring products with sustainability but, still have beautiful and excellent design. Most designers are inspired on plants and other natural resources abundant in the archipelago to materialize their vision.

This is the Philippines’s third collective participation at Ambiente, the leading international trade fair for consumer goods happening in Messe Frankfurt, Germany. Table settings, kitchen accessories and household products take the spotlight in the show. Gifts, interior trends and home concepts are also showcased.

From abaca, raffia, bamboo, rattan, coconut husk, mother of pearl, fine bone china, artisan communities of the Philippines transform these renewable materials into consciously crafted objects, thus minimizing the negative impact on our country’s resources and at the same time, connecting the buyers with the Philippines’s natural environment.

The Philippines’s Ambiente 2018 participation is organized by the Citem, the export promotion arm of the Department of Trade and Industry (DTI). Citem is targeting $1.8 million worth of export sales.

A10 Wednesday, February 7, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

www.businessmirror.com.ph

editorial

NFA must step up price monitoring

T

he National Food Authority (NFA) recently announced that it will no longer sell government-subsidized rice in select areas. The staterun food agency made the decision after its stockpile, which consists of rice bought from local farmers and imports, fell to 93,000 metric tons (MT), enough to supply the country’s requirement for three days. The depletion of the NFA’s buffer stock also came at a time when farmers have already harvested their main crop.

The food agency currently attached to the Office of the President is mandated to stabilize the price and supply of grains in the country. In keeping with this mandate, the NFA buys paddy from farmers at P17 per kilogram, depending on the quality, during harvest. The food agency also imports rice to augment its stocks.

The NFA increased its purchases of palay from farmers after the global food-price crisis in 2008. The Philippine government had wanted to import rice at the time, but could not buy the volume it needed because exporters did not have enough supply. The poor had to line up for cheap NFA rice, which was sold at P18.25 per kg in 2008. Commercial rice was sold at around P30 per kg.

The signals from the government, as well as the consequent hike in prices, caused panic among consumers who bought more rice to store at home. The government said unscrupulous traders also took advantage of the situation by hoarding rice in the hope of gaining more profit. Hoarders knew that Filipinos would be willing to shell out more for their staple food.

But, unlike in 2008, NFA officials said the current rice inventory of the country is enough for 90 days. What is worrisome, however, is that most of the inventory is with commercial traders and households. The NFA has also now refused to divulge its current rice inventory and has only made assurances that it would be able to supply the rice requirement of calamity-affected areas. Further compounding the situation is the fact that the NFA Council has rejected the NFA’s request to import rice to beef up its stocks. Government officials must cross their fingers and/or pray that the country would not be hit by a strong typhoon from now until March and that Mayon Volcano’s subsequent eruptions will not be disastrous.

The most that the NFA could do now is to step up its price monitoring. The food agency has already vowed to do this, but it must be more vigilant in calamity-affected areas like Albay, where food production is affected by the activity of Mayon Volcano. The food agency’s vigilance is also needed at this time, when it has suspended the sale of subsidized rice in urban areas.

After lifting the quantitative restriction (QR) on rice, Congress must immediately focus on amending other policies that impact on rice production and distribution. If the Duterte administration really intends to get out of its current practice of buying rice at a high price and selling it low, it must stop dragging its feet on amending the NFA’s charter. It must also be clear about its rice policy, in view of its decision to remove the QR on the staple. Government managers are vocal about the advantages of removing import quotas, but the strategies to help local producers cope with more rice shipments from abroad have yet to be put in place.

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JLT Re would make several acquisitions, expanding its reach and expertise. In June 2008, for example, JLT Re acquired Harman Wicks & Swayne (HWS) Limited, also a premiere reinsurance broker.

In 2017 JLT Re would enter the Philippine market, appointing William Pang as managing director for the Philippines. The Philippine office reports to JLT Re Asia, based in Singapore. According to Stuart Beatty,

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Has Trumphoria finally hit a wall?

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JLT Re Asia Pacific CEO, “The Philippines is a natural progression for JLT Re’s regional expansion plans, given that it’s the fourth-largest economy among Asean members after Indonesia, Thailand and Malaysia.” Today, the JLT Philippines President and CEO is Raul Bantug Tan.

(Plc.). It is a British multinational corporation with headquarters in London, England. JLT Group’s two main businesses are risk and insurance, and employee benefits.

It traces its origins to Jardine Insurance Brokers (JIB), founded in 1972, which was then a division of Jardine, Matheson & Co. JIB would be listed in the London Stock Exchange in 1991, with Jardine, Matheson & Co. retaining majority control. JIB would merge, in 1997, with Lloyd Thompson to form the JLT Group, and making JLT Group the fifth-largest insurance broker in the world. Jardine, Matheson Holdings Ltd. would retain a 30-percent shareholding in the merged business. In 2011 (up to the present), this would increase to a 40-percent shareholding. In July 2009 it removed the names “Jardine Lloyd Thompson” and decided to just use the acronym JLT. Lloyd Thompson was founded in 1981 and listed on the London Stock Exchange in October 1987. From its origins as specialists in marine hull and energy, Lloyd Thompson grew rapidly in all classes of wholesale and reinsurance businesses, developing a

W

hen talking about stock markets, there are three rules you have to remember. First, the stock market is not the economy. Second, the stock market is not the economy.

Third, the stock market is not the economy.

So the market plunge of the past few days might mean nothing at all.

On one side, don’t assume that there was a good reason for the slide (although the fact that the Dow fell 666 points last Friday hints either at satanic forces or at some mystical link with the Kushner family’s bum investment at 666 Fifth Avenue). When stocks crashed in 1987, economist Robert Shiller carried out a real-time survey of investor motivations; it turned out that the crash was essentially a pure self-fulfilling panic. People weren’t selling because some news item caused them to revise their views about stock values; they sold because they saw that other people were selling.

And on the other side, don’t assume that the stock price decline tells us much about the economic future, either. The great economist Paul Samuelson famously quipped that the stock market had predicted nine of the past five recessions.

That 1987 crash, for example, was followed not by a recession, but by solid growth.

Still, market turmoil should make us take a hard look at the economy’s prospects. And what the data say, I’d argue, is that at the very least America is heading for a downshift in its growth rate; the available evidence suggests that growth over the next decade will be something like 1.5 percent a year, not the 3 percent Donald Trump and his minions keep promising.

There are also suggestions in the data that risky assets in general— stocks, but also long-term bonds and real estate—may be overpriced.

Leaving Bitcoin madness aside, we’re not talking dot-coms in 2000 or houses in 2006. But standard indicators are well above historically normal levels, and a reversion toward those norms could be painful.

About that plummet: If there was any news item behind it, it was

Friday’s employment report, which showed a significant, although not huge, rise in wages. Now, rising wages are a good thing. In fact, the failure of wages to rise much until now has been a deeply frustrating deficiency in the otherwise impressively durable economic recovery that began early in the Obama administration.

But we’re now seeing fairly strong evidence that the US economy is nearing full employment. The low measured unemployment rate is only part of the story. There’s also the growing willingness of workers to quit their jobs, something they don’t do unless they’re confident of finding new employment. And now wages are finally rising, suggesting that workers are gaining bargaining power, too.

Again, this is all good news. But it does mean that future US growth can’t come from putting the unemployed back to work. It has to come either from growth in the pool of potential workers or from rising productivity, that is, more output per worker.

Yet, with baby boomers retiring, growth in the US working-age population, especially in prime working years, has slowed to a crawl, while productivity growth has been disappointing. Together, these factors suggest an economy likely to grow only half as fast as Trump promises.

Did the markets believe Trump?

At the very least, they’ve been acting as if the US economy still had lots of room to run; throwing cold water on

strong presence in London.

In September 2013 JLT (Jardine Lloyd Thompson) Group acquired Towers Watson’s reinsurance broking business for $250 million in cash, to form JLT Towers Re. Towers Watson is an actuarial consultancy firm. In September 2014 JLT Towers Re dropped the name “Towers” and was rebranded back to simply JLT Re.

Jardine, Matheson Holdings

Jardine, Matheson & Co. was founded by William Jardine (17841843) and James Matheson (17961878), in 1832, in Canton (now Guangzhou), China. It is a highly diversified conglomerate with interests in retail, real estate, shipping and aviation, hotels and financial services and is headquartered in Hong Kong. It originally traded on tea, cotton and opium. It later diversified to shipping, railways and insurance.

It is now controlled by the Keswick family, descendants of William Jardine. Interestingly, Jardine installed the very first elevator in China in the city of Tianjin. Jardine and Matheson are both graduates of the University of Edinburgh in Scotland.

that belief should mean both higher interest rates and lower stock prices, which is what we’re seeing.

But should we be worried about something worse than a mere downshift in growth?

Well, asset prices do look high: A widely used gauge of stock valuations puts them at a 15-year high, while a conceptually similar measure says that housing prices have retraced a bit less than half the rise that culminated in the great housing bust.

Individually, these numbers aren’t that alarming: Stocks, as I said, don’t look nearly as overvalued as they did in 2000, housing not nearly as overvalued as it was in 2006. On the other hand, this time both markets look overvalued at the same time, at least raising the possibility of a double-bubble burst like the one that hit Japan at the end of the 1980s.

And if asset prices take a hit, we might expect consumers — who have been spending heavily and saving very little—to pull back.

Still, all of this would be manageable if key policy-makers could be counted on to act effectively. Which is where I get worried.

It’s surely not a good thing that Trump got rid of one of the most distinguished Federal Reserve chairs in history just before markets started to flash some warning signs. Jerome Powell, Janet Yellen’s replacement, seems like a reasonable guy. But we have no idea how well he would handle a crisis if one developed.

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Conflicts emerge as Trump trumps out ‘trumped-up’ charges Michael Makabenta Alunan

on the contrary

U

NITED States President Donald J. Trump’s skirmishes with “Russiagate probe” on his Russian links and the latter’s alleged intervention in US elections took new twists with the recent release of the “Nunes Memo,” revealing that it was actually British intelligence and the Democrat cabal led by Obama and Hilary Clinton behind the campaign to oust Trump.

Pandora’s box opened? The Russia-probe pressuring Trump and his associates in congressional probes and investigations by Special Counsel and ex-Federal Bureau of Investigation Director Robert Mueller have created their own negation and backlash that are opening up the figurative “can of worms” or the proverbial “Pandora’s box” of the bitter truth that the Trump accusations were all “trumped-up” charges.

Rep. Devin Nunes of California, chairing the House Intelligence Committee, released his controversial Nunes Memo revealing that Russiagate was orchestrated

by British intelligence Christopher Steele for the Democratic National Committee (DNC) and Clinton’s and Obama’s intelligence community.

Nunes’s Memo said “Steele, an FBI source, was paid over $160,000

by DNC-Clinton, via law firm Perkins Coie and research firm Fusion GPS, to obtain derogatory information on Trump’s ties with Russia.” Peter Strzok, an FBI agent, bragged texting messages about a “secret society” to bring down Trump after elections and that there was no substance to Russian collusion.

Even the Veterans Intelligence Professionals for Sanity declared “there was no Russian hack. Rather, the Wikileaks report was produced by a lead from inside DNC, not a Russian hack. The DNC leak was a “cut-andpaste job to make it look like it was product of a crude Russian hack.”

Seth Rich of DNC, one source of the leaks, was surprisingly murdered in July 2016 and remains unsolved. Congressman Dan Rohrbacher, who met Julian Assange of Wikileaks, also confirms the DNC/ Podesta e-mail trove was a leak, not a Russian hack.

Thawing cold war vs toeing line for war. We hate Trump for his obnoxious bloated ego and many racist, misogynist and Islamophobic remarks magnified by his opposition, but cluelessly he has stepped on the toes of neo-conservative war-hawks representing the military-industrial complex.

Trump declared to stop regime changes, called the Cold War Nato obsolete, and wants to cut down defense spending abroad after wasting trillions of dollars in exporting war during the Bush-Obama terms.

He also dismissed the “color revolutions” backed by George Soros and similar groups, like the 2004 Orange revolution in Ukraine; 2003 Rose Revolution in Georgia; 2005 Tulip revolution in Kyrgyzstan; 2005 Cedar Revolution in Lebanon, Yellow Umbrella Revolution in Hong Kong; Arab Spring in the Middle East and North Africa; the failed White Revolution in Russia; and lately the Purple destabilization against Trump that has faded in color.

These groups want Trump to toe their line, but Trump simply wants to thaw the ice and warm up relations with Cold War rivals Russia and China.

Art of the Deal is his Art of War. Trump allegedly has no depth, hates books and prefers abbreviated shoot-from-the-hip Twitter messages, but because of his inherent nature known for his Art of the Deal book, he is achieving slowly global peace by doing business

with arch-enemies. More so, with China’s global win-win development Belt and Road Initiative, which is a total contrast to the “zero-sum dog-eat-dog game” of “globalization” and “geopolitics” that result in “winners and losers” or massive poverty amid pockets of rising wealth for a few, and perpetual military conflicts. Effectively, he breaks what British Empire Lord Palmerston’s support for “Permanent Wars and Permanent Revolutions.” Palmerston is also known for the saying, “There are no permanent friends and enemies, but permanent interests.”

It is ironic Obama got a Nobel Peace Prize, but has fueled wars in Libya, Syria, the Arab Spring and his Pivot to Asia, which triggered tensions with China in the West Philippine seas, the installation of Terminal High-Altitude Area Defence missiles in South Korea, Japan reconsidering its anti-war constitution and the Philippines’s Enhanced Defense Cooperation Agreement, allowing US troops under its Visiting Forces Agreement to rent bases, an agreement not ratified by the Senate and mocks our antinuclear and antimilitary bases constitution.

In contrast, Trump threatened North Korea, encouraging the neocons, but welcomes the Winter Olympics participation of North Korea. In short, while Obama talks peace, but funds war, Trump’s braggadocio makes him talk of war, but does peace.

Executive Intelligence Review Mike Billington says North Korea is not crazy to go to war knowing it could easily be wiped out. It abandoned its nuclear war program in 1994, and by 2002 joined South Korea’s “Iron Silk Road” to build railways from Busan, through North Korea, up to Rotterdam, plus an industrial complex at the border in Kaesong, employing over 50,000 North Koreans by 123 South Korean companies. These were all stopped during Bush’s time. Trump can do a Sun Tzu if he can revive this, so everybody wins without firing a shot.

Conflicting forces remain. Apparently, there are still conflicting forces within Trump’s administration, which do not want Trump to talk peace with traditional enemies.

Even two weeks before he took office, Obama undermined Trump by sending 4,000 troops to Poland in an act of provocation with Russia and disrespect for Trump. Since then other forms of aggression followed, which could have triggered Russia to retaliate, but both Putin and Trump have kept their cool.

At the recent Davos World Economic Summit, Andrei Kostin, a Russian top banker and Putin ally, complained to Financial Times of North Atlantic Treaty Organization’s arms buildup, increasing tension and risks. Former US Defense Secretary William Perry also expressed worry of the “reckless US military buildup in both Europe and the Pacific bringing the world closer to war than ever existed during the Cold War.” Kostin warned that the US Congress threats of “more sanctions on Russia would be like declaring war, much worse than the Cold War. Congress is playing with fire, turning the relationship from bad to worse.”

Fortunately, Trump blocked them.

How nations recover David Brooks

new york times

R

ecently, I’ve been looking for examples of national comebacks—nations that were plagued by turmoil, inequality and polarization, but that managed to get their act together and emerge stronger than before.

I’ve been especially interested in the way Britain revived itself between 1820 and 1848. Its comeback has some humbling lessons for us today.

Britain was roiled by economic and demographic changes. There were financial crises, bad harvests and a severe depression. There was crushing inequality. The average life expectancy nationwide was 40, but in the industrial cities of Manchester and Liverpool it was around 28. There were widespread riots and government crackdowns.

In 1819 1,206 “radicals” were given the death sentence, though only 108 of them were executed.

The nation responded to the turmoil both from the bottom-up and the top-down.

There were, first, a series of social movements: There was the Clapham sect. This was a group of evangelical leaders, arising from the general religious revival, that sought to eradicate slavery, spread the faith, discourage indebtedness, build Sunday schools, reform behavior and basically spread what we now call Victorian morality.

There were the Chartists. This was a radical workers’ movement that hosted giant rallies across the country in three bursts. The Chartists cohered around The People’s Charter, which had six demands, including universal male suffrage, vote by ballot and equal electoral districts. In 1842 the Chartists presented a petition to Parliament with 3 million signatures.

Finally, there was the Anti-Corn Law League. This was the best organized and best funded pressure group in 19th-century Britain. It promoted free-trade legislation to reduce the power of the landed gentry, to make food cheaper for the working classes and to encourage international exchange and cooperation.

The social movements were impressive, but the key to Britain’s success was the way political leaders responded to them. Britain was blessed by a stable parliamentary system and by a legislative culture that valued deliberation and debate.

Political leaders in both parties understood that the winds of change were blowing and they had better

Wednesday, February 7, 2018 A11

initiate reforms if they wanted to head off a revolution.

The political parties represented vested interests but were not particularly ideological. They were used to handing off the reins of power and then taking them up again. As a result, while they certainly had their bitter rivalries, they shared a common patriotism and understood that each party had a role to play.

The Whig Party dominated the 1830s. The Whigs passed the democratic Reform Act of 1832. This law wouldn’t pass muster by contemporary standards (it allowed only 1 in 5 adult males to vote), but it tackled the most corrupt practices of the old oligarchy. The Whigs also passed a series of other reforms, such as the Factory Act, which regulated workplaces, and the Municipal Corporations Act, which reformed local government. In his new book, Victorious Century, David Cannadine writes that this glut of reforms “meant the 1830s were the pivotal decade in the history of the 19th-century United Kingdom.”

The Tories, led mostly by Robert Peel, controlled the government before and after. In a time of social decay, Peel personified rectitude and good character. “Peel brought to the job of prime minister a fine intellect and a Christian conscience, a broader range of outlook and connection than was common among the ruling elite,” Cannadine writes.

He turned his party into a moderate conservative party, endorsing Whig reforms and passing a bunch of his own. Over the course of his career, Peel reformed the criminal justice system to reduce the prevalence of the death penalty. He emancipated

China could steer self-driving cars

By Adam Minter Bloomberg View

I

N China the cars are becoming smarter. Last week Alibaba Group Holding Ltd. and Foxconn Technology Co. Ltd. led a $348-million fund-raising round for Guangzhou Xiaopeng Motors Technology Co. Ltd., a three-year-old start-up developing Internet-connected, electric cars. The investment might seem an odd one for online retailer Alibaba. But it’s part of a larger vision for transportation that includes tools to design and run entire cities. Indeed, with backing from the Chinese government, Alibaba could soon seize the lead over European and American competitors in the race to define the future of transportation.

In many respects, the cuttingedge self-driving systems found in vehicles like the Tesla Model X already belong to the past. Their arrays of cameras, radars and computing power can maneuver a vehicle into a tight parking space, safely change lanes on the highway and even respond to a summons by the driver. But, as remarkable as these capabilities are, they tend to rely on line-of-sight connections. That works great when sensors can clearly see a stoplight or stop sign—less so, say, in foggy conditions, or if someone has deliberately changed

the sign in order to spoof the onboard computer.

One way around that problem is to enable stoplights to “talk” to cars via Wi-fi. So long as the Wi-fi signal is strong, the car not only knows when to slow down; in theory, it could obtain that information long before arriving at an intersection and adjust its route for maximum time and fuel efficiency. If other cars had the same capability, then that “smart” stop light could direct traffic better than a human, let alone a traditional light.

This isn’t a new idea. Proponents of autonomous cars have long imagined linking them to centralized traffic infrastructure in order to make trips more efficient. (If secured properly, such a system would also help counter the spoofing threat.) Experimental efforts to build such systems have begun all over the world. The US state of Ohio has outfitted a 35-mile stretch of highway with sensors and fiber optics to support autonomous vehicles. South Korea is planning $64 billion in smart highways.

Not surprisingly, China’s plans are the most ambitious. The Chinese government has named autonomous cars one of the key sectors in its “Made in China 2025” initiative, meant to transform China into a world-beating manufacturer of high-end, innovative

products. Official policies encourage collaboration between Chinese technology companies involved in various aspects of transportation, from the cars themselves to satellite navigation.

Alibaba is among the biggest of those firms. The company has developed something it calls, ominously, “City Brain”—an artificialintelligence hub that utilizes big data to “automatically deploy public resources and amend defects in urban operations.” In less-Orwellian terms, it’s “smart city” software designed to manage how public resources like water and electricity are monitored and distributed.

The system is operational in the company’s hometown of Hangzhou, where it’s focused on traffic management and—according to Alibaba —has reduced travel times by 10 percent since its launch in 2016.

Since then, it’s been deployed in at least two additional Chinese cities and, later this year, will be rolled out in its first foreign location, Kuala Lumpur.

So far, City Brain only uses realtime video of traffic patterns to adjust stoplights. If it can be linked to cars, though, it could change those traffic patterns themselves. Alibaba already has an automotive operating system that allows for two-way communication with technology, such as City Brain. Presumably, Xiaopeng’s

The puzzle for Powell on day one

J

erome Powell takes over as chairman of the Federal Reserve (the Fed) just as new figures show earnings and inflation edging up. It’s good news that the recovery is helping wages to rise faster and bringing inflation closer to the Fed’s target of 2 percent—but as last week’s big drop in equity prices suggests, it also complicates Powell’s job.

Though the central bank has been gently reducing its monetary stimulus in recent months, its policy is still very expansionary. Powell needs to prepare investors for a faster withdrawal of this support.

Unemployment now stands at just 4.1 percent—lower, maybe, than can be sustained into the medium term.

Nonfarm payrolls expanded by 200,000 in January, faster than expected.

POWELL Average hourly earnings beat expectations, as well, growing at 2.9 percent over a year earlier—the biggest rise since 2009. Measures of long-term inflation expectations have lately been inching up.

These developments aren’t alarming on their own—taken in isolation, in fact, just the opposite. The recovery since the crash of 2008 has been painfully slow, failing to follow the standard pattern. Despite unprecedented

efforts by the Fed to boost demand, core inflation has stayed well below target, even giving rise at times to fears of a deflationary “new normal.” At last, a tightening labor market seems to be bringing wage growth and inflation closer to what’s needed. This doesn’t call for a sudden change in the Fed’s whole approach, but it does call for a careful look at the pace of monetary tightening.

Investors are wise to the issue. In recent weeks they’ve been expecting another small rise in the policy interest rate next month—from 1.25 percent to 1.5 percent to 1.5 percent to 1.75 percent— followed by two more such rises in the rest of the year. January’s new figures for jobs and wages have already nudged more analysts toward expecting four increases this year, not three.Long-term interest rates rose and equities fell when

the Catholics, founded the London police force, reduced tariffs on wheat, sugar and ultimately corn. The government passed 442 railway acts between 1844 and 1847, resulting in more than 2,000 miles of new track, and it did it while running a surplus.

In 1848 worker revolutions swept across Europe, endangering regime after regime. But Britain was largely spared, because worker complaints had been at least partially addressed. Britain never fully healed its social divisions, but the nation cohered, and for the next 65 years it reigned as the greatest power on Earth, the global center of science, trade and literature.

We Americans have not mobilized as the 19th-century Britons did in their moment of crisis.

Americans have produced many small organizations but few compelling national movements. The Tea Party and Black Lives Matter come closest.

We have not passed a steady drumbeat of pragmatic reforms the way the Whigs and the Tories did.

Over the past 15 years, the United States has managed to pass just a few major pieces of social reform— Dodd-Frank, Obamacare and I guess the Trump tax reform.

The biggest gap is in the realm of political leadership. The Victorian politicians had a stewardship mentality. They listened to the people, but stood slightly apart, deliberating, seeing governance as a shared professional responsibility. Our leaders come from a much broader swath of society, but they have lower standards of behavior, and less of a shared stewardship mentality.

So our revival is still in doubt.

new electric cars will use it.

Alibaba and its Chinese peers have other advantages over European and American competitors.

First, data privacy is much less of a concern in China and Southeast Asia than it is in other markets, making it easier and less controversial to collect, store and use data on how citizens move around cities.

Second, the Chinese government is clearly committed to helping Chinese companies lead the world in such technology. At a minimum, it’s unlikely to allow foreign rivals to engage in mapmaking and comprehensive data collection on Chinese soil.

Third, China is already scaling up. City Brain operates in cities housing nearly 35 million people, while China is poised to become the biggest autonomous-car market in the world. Other companies—and global standards—will have to adjust to whatever developments take place on the mainland.

Of course, there’s no guarantee that Alibaba will win this race; some of its Chinese partners are working on competing systems. Meanwhile, foreign companies will benefit from a growing wariness among Western governments and citizens about sharing data with Chinese companies linked to the government. For the moment, though, China’s moving into the fast lane.

the numbers were announced.

The Fed’s position is that the risks of policy being too tight or too loose are roughly balanced. Even if that’s right for now, it may not be right for much longer. As the Fed continues to slowly unwind its enlarged balance sheet, loose financial conditions will prevail. Meanwhile—thanks, in part, to protracted monetary accommodation—asset prices are disturbingly high. This is a sign of economic optimism, to be sure, but also of financial vulnerability.

In sum, the risk is growing that policy is, or soon will be, too loose. Powell’s first challenge will be to persuade investors that the Fed is alert to this danger and willing to act. His second will be to do this without starting a panic. Janet Yellen may have timed her exit well.

Bloomberg View

2nd Front Page BusinessMirror

A12 Wednesday, February 7, 2018

BSP seen hiking key rates after Jan inflation hit 4% I

By Bianca Cuaresma @BcuaresmaBM & Elijah Felice E. Rosales @alyasjah

nflation rate in January accelerated to 4 percent, the fastest in three years, raising expectations among analysts that the Bangko Sentral ng Pilipinas (BSP) would soon hike key policy rates.

The January inflation reported by the Philippine Statistics Authority (PSA) on Tuesday touched the upper end of the government’s target range of 2 percent to 4 percent for 2018 and BSP’s forecast of 3.5 percent to 4 percent. This is the fastest growth of consumer prices since October 2014, when it hit 4.3 percent.

The rise in consumer prices in January, from the 3.3-percent inflation rate recorded last December, was not unexpected, BSP Governor Nestor A. Espenilla Jr. said.

“The higher January reading was expected by the BSP although it is

at the top end of our forecast for the month. Due mainly to the combined first-round effects of TRAIN [Tax Reform for Acceleration and Inclusion], oil prices and food to some extent,” Espenilla said.

“We think these are temporary drivers of inflation and would eventually stabilize,” he added.

Espenilla, however, seemed to have shifted to a stance that seems to favor a rate hike, saying the “BSP will be closely monitoring the situation” and will “stand ready to take timely action based on our evaluation of all relevant data.” The BSP is set to meet for its first monetarypolicy meeting on February 8.

Contractualization. . . that it will now refer to the direct hiring relationship between principal employer and the employee.

“The management will stick with the proposed [executive] order, which they concurred between labor and management. That is their preference,” the labor chief said.

Except for the contentious issue on the SOT, he said both versions of the EOs are practically the same.

The EO bans contractualization if it contravenes with the rights of workers on SOT, organizing themselves into unions and to bargain collectively.

When asked which version of the EO the DOLE will endorse, Bello said he will only reveal his preference if he is asked by the President. “But he will not probably ask me about it.” To push for their approval of their version of the EO, leftist and moderate labor groups will hold a joint demonstration in Manila on Wednesday for the first time in decades.

“It’s about time the President makes good on his vow to end contractualization and stay true to his

ING Bank Manila economist Joey Cuyegkeng said the likelihood of a tightening move at T hu rsd ay ’s meet ing has “ increased significantly.” “We are now looking at advancing the timing of our rate hikes and are reviewing our two-rate hike forecast for 2018,” Cuyegkeng said.

Singapore-based DBS Bank economist Gundy Cahyadi also said earlier the BSP may hike its policy rate this week to curb inflationary pressures.

“Second-round effects are still to be determined by regulators.

Second-round effects are likely to push inflation higher within the

year, which could push inflation to breach the upper end of the forecast range for some months of 2018,” Cuyegkeng said.

“We think that the BSP would need to anchor inflation expectations. Aside from second-round effects from the initial increases in excise taxes, further increases in excise taxes in 2019 would keep inflation elevated,” he added.

The BSP’s current monetary setting is at 3 percent for its main policy rate.

Mitigation measures

The government must hasten the delivery of its unconditional cash

transfer (UCT) program so poor Filipinos will be able to cope with the inflationary impact of the tax-reform law, according to the National Economic and Development Authority (Neda).

The Neda also urged lawmakers to prioritize the tarrification of rice imports to make the country’s rice supply stable and competitive. This after food and nonalcoholic beverages, which accounted for 39 percent of the consumer basket, accelerated by 4.5 percent in January, from 3.5 percent last December.

The index for alcoholic beverages and tobacco surged to a double-digit annual markup at 12.3 percent, from last year’s 6.4 percent.

“The push in inflation is partly due to TRAIN, considering particularly the excise on fuel and additional sin taxes,” Socioeconomic Planning Secretary Ernesto M. Pernia said.

Pernia noted, however, that the effects of the TRAIN will be “minimal and temporary.”

Roehlano M. Briones, senior research fellow at the Philippine Institute for Development Studies, agreed with Pernia.

See “BSP,” A2

Continued from A1

commitment to us during our last dialogue on Labor Day to issue an EO to fulfill this promise,” Nagkaisa and Kilusang Mayo Uno (KMU) said in a joint statement.

Nagkaisa is composed of 40 labor groups, which are mostly moderate, while KMU is currently among the most visible militant labor groups in the country that is known for its leftist leaning.

“Leaders of the Nagkaisa labor coalition and Kilusang Mayo Uno, who have varied views on a wide range of labor and employment issues, are one in putting a stop to contractualization and other schemes that employers use to avoid regularizing workers,” the joint statement said.

Both have committed to deploy their members to Mendiola near Malacañang ahead of Duterte’s meeting with the labor sector in the afternoon.

“We want the President to issue an executive order prohibiting all forms of contractualization based on the position we submitted,” Nagkaisa and KMU said.

A shopper checks out sweetened drinks displayed at a supermarket in Parañaque City. The government said the 4-percent hike in consumer prices in January was largely due to the implementation of the tax-reform law, which imposed higher excise taxes on oil, petroleum products, automobiles, sugar-sweetened beverages and tobacco. NONIE REYES

www.businessmirror.com.ph

Zero-importation policy eases NFA out of market Continued from A1

While the NFA said it accounts for only around 10 percent of the total Philippine rice market, its stockpile effectively discourages traders from jacking up prices as the government could sell more cheap rice if they resort to price and supply manipulation.

“The NCR office of the NFA has a remaining stock of around 100,000 bags and they are already reserved for calamity-affected areas.

NFA-NCR also serves the requirement of the Batanes Islands,” NFA Spokesman Rebecca Olarte told the BusinessMirror in an interview.

“Eighty percent of the rice supply in Batanes comes from the NFA. So the NFA-NCR office reserved the stocks to serve their needs,” Olarte added. Government-subsidized rice sold by the NFA is usually bought by the poor. But the food agency has suspended the sale of cheap rice “indefinitely” until it secures additional supply via local procurement or importation.

“The suspension will remain in place as long as there are no new rice stocks. Distribution [of cheap rice] would resume once the NFA’s stockpile has been replenished,” Olarte said.

“But because there is no clear source of new stocks, the sale of NFA rice has been suspended and the remaining stocks would serve the needs of those affected by calamities,” she added.

The NFA Council, the highest policy-making body of the NFA, earlier thumbed down the request of the food agency to import 250,000 MT of rice to boost its stockpile.

The agency could not step up its purchases of paddy as farmers in many rice-growing areas, including Nueva Ecija, have yet to harvest their crop. Also, traders are offering to buy local paddy at P18 to P20 per kilogram (kg), higher than the NFA’s buying price of P17 per kg.

Olarte said the NFA’s total palay procurement has so far reached 6,683 50-kg bags, or 334.15 MT. The food agency has allocated P5.1 billion to buy at least 6 million bags of palay from farmers this year.

“On the side of procurement, the [farmgate] price of palay remains high, the average price of palay is now at P20.48 per kg,” she said.

“That’s why we cannot buy more from farmers.”

Jaime O. Magbanua, national president of Confederation of Grains Retailers Association of the Philippines Inc., told the BusinessMirror that the price of commercial rice in the local market could go up due to the absence of NFA rice.

Magbanua added that governmentsubsidized rice is not only missing in the NCR. “The suspension [covers] many areas in the country. Definitely, this would have an impact on the price [of commercial rice].”

“There are around 10 million Filipinos who are depending on NFA rice, which is needed in non-palay producing areas like the NCR. The consuming public will not have the option to buy cheaper rice in the market now, they will be forced to buy commercial [variants], which is naturally more expensive,” he said.

However, Magbanua did not give an estimate as to the rate of increase in the price of commercial rice.

The latest price-monitoring report released by the Philippine Statistics Authority on Tuesday showed that the average farm-gate price of palay in the fourth week of January reached P19.23 per kg.

The latest quotation was 0.26 percent higher than last week’s level and 6.36 percent more the previous year’s level.

Duterte rejects new EO on Boracay, but gives task force 6 mos to end mess Continued from A1

“According to Secretary Teo, that’s a big possibility,” de Castro said, referring to the DOT’s move to hold accreditations of resorts in Boracay in abeyance, while these are being evaluated for various violations. The proposed EO, prepared by the DOT and the Department of Environment and Natural Resources (DENR), was presented to President Duterte for signature on February 5.

Speaking with reporters, de Castro said, “The President said he would review the executive order....

They will study it. But they said the problem with an EO is that, there are just too many steps to do, the process would be too slow.”

Instead, Duter te gave t he DENR and the Department of the Interior and Local Government

(DILG) six months to address the problems of Boracay Island, popular over the world for its powdery white-sand beach.

De C a st ro e x pl a i ned t h at Duterte instead “wants immediate action.... Basically he wants the environmental laws to be implemented right away. He’s giving a six-month deadline to the DENR and DILG to fix the problems of Boracay, i.e. going after the establishments who violated the laws and, at the same time, run after those officials and other individuals who issued permits to establishments, which they knew from the start, were already violating some laws.”

She said the DOT submitted a list of 200 establishments operating in Boracay, which were found to have various offenses. Some have violated the easement law, where 30 meters between the shore to the

inland should be a no-build zone.

“For another, there are those who have illegally tapped the rainwater drainage pipes of Tieza [Tourism Infrastructure and Enterprise Zone Authority] and connected their sewage pipe,” she added.

“For others, they were found not to be connected to the sewage pipes, so their untreated water and sewage are being dumped directly into the sea or the roads,” she said.

Environment Secretary Roy A. Cimatu said he will take the lead role in the task force that will rid Boracay of problems threatening the sustainability of the country’s top tourism destination.

Cimatu told reporters that President Duterte has already approved in principle the draft EO prepared by the DOT on the Task Force Boracay. “It was the DOT that recommended the creation of the

task force and it named the DENR as head of the task force. I accepted the challenge and the President already gave instructions to me,” Cimatu said.

The task force, Cimatu added, was given six months to address the issues that for weeks had put Boracay in a bad light.

Under the EO, the task force will be led by the DENR. Since there is already a Task Force Boracay created before the DOT recommendation, Cimatu said they will follow its organizational structure for the initial composition. But there will be an assessment to determine if expanding the Task Force Boracay will be needed to involve other government agencies.

He said the task force will look into the various environmental issues besetting Boracay, especially

the compliance with environmental regulations of resorts and homeowners on the island.

Some of the issues and concerns were raised by tourists and residents themselves, Cimatu added.

“The environmental compliance of resorts will be tackled. The people there, some tourists, they tell about the sad plight of tourists, and the water in the beaches. Second, the wastewater is not channeled to proper waste-treatment facility.

Then the garbage,” he said.

He noted that there are buildings constructed very near the beach, when the distance of the nearest building or structure should be 25 meters from the shore. “We receive complaints that some structures are closer to the shores.”

“Likewise, there are some structures that were built inside forest reservations and timberlands. This

is not allowed by law,” he said. Nevertheless, Cimatu acknowledged that the resort and hotel owners can apply for forest-land agreements for tourism use.

“The President wants us to do something about these problems and come up with a report after six months,” he said.

Cimatu will meet with DILG and Local Government officials on Wednesday.

Initial investigations, he added, have been conducted jointly by the DOT and DENR even before the proposed EO. “We have conducted inventories and checked the violations. We conducted house-to-house and resortto-resort [inspection]. We will be very serious in implementing the instruction of the President. We will be serious in enforcing the law,” Cimatu said. With Jonathan L. Mayuga