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Friday, February 9, 2018 Vol. 13 No. 121

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ollowing the decision of the National Food Authority Council (NFAC) to push through with the importation of rice, Agriculture Secretary Emmanuel F. Piñol said he would urge President Duterte to cap the price of commercial rice.

The changing wealth of nations

PIÑOL: “The price of rice in the market now is not acceptable anymore.”

Edgardo j. angara

T “I will recommend [to the President] that there should be a cap on the price of commercial rice. The price of rice in the market now is not acceptable anymore,” Piñol told the BusinessMirror in an

he World Bank recently released its report, The Changing Wealth of Nations 2018, where it suggested that GDP was an incomplete indicator of a nation’s economic health and development. Instead, the report argues, a nation’s development should be seen as the astute management of its broad portfolio of assets or its “wealth,” which includes produced, human, and natural capital. Similar to how a company judges its prospects via its income statement and balance sheet, a nation should therefore monitor its GDP (“its income”) alongside its management of its wealth (“its balance sheet”).

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Labor groups to Duterte: Fulfill your promise

BSP KEEPS RATES STEADY DESPITE HIGHER FORECAST INFLATION FOR THIS YEAR

By Bianca Cuaresma @BcuaresmaBM

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he Bangko Sentral ng Pilipinas (BSP) refused to be stampeded into using a blunt instrument to help the economy manage more recent price pressures and kept the rate at which it borrows from or lend to banks unchanged on Thursday.

This means the cost of borrowing from any of the banks for both businesses and household should not spike upward as a consequence and should help keep so-called inflation expectations in check over the next 18 to 24 months.

This developed as the BSP kept the overnight borrowing rate fixed at 3 percent on Thursday, when quite a number of analysts—foreign and local—feared that rampaging inflation of 4 percent in January would compel the monetary authorities to ramp up its lending rate and its term deposit rates, as well.

But the policy-making Monetary Board did hike the forecast inflation rate this year to 4.3 percent from only 3.4 percent to help signal higher but temporary price pressures down the line. The forecast inflation this year pushes past the ceiling of the 2-percent to 4-percent official target to reflect price factors that did not form part of the forecast equation the BSP made only last December.

The last time inflation stood above 4 percent was in 2014, when it averaged 4.1 percent.

In the statement read for BSP Governor Nestor A. Espenilla Jr. by BSP Managing Director for the Monetary Policy Subsector Francisco Dakila Jr.,

the BSP said the decision was based on the assessment that, while latest baseline forecasts show higher inflation outturns for 2018, the inflation path should moderate and settle within the target range of 2 percent to 4 percent in 2019. Dakila said the impact of the tax -reform adjustments was not included in the 3.4-percent baseline forecast in the December meeting and this explains the ramped-up inflation forecast.

For 2019, the BSP also plotted forecast inflation averaging higher to 3.5 percent, from only 3.2 percent in the December review.

Other factors contributing to the marked rise in forecast inflation include the continued increases in global oil prices as well as the high inflation outturn in January.

Dakila and BSP Deputy Governor for the Resource Management Sector Maria Almasara Cyd Tuaño-Amador said the above-target inflation rate in January was caused by supply-side factors and by that measure, transitory.

Dakila also expressed optimism that second-round effects from the reform measure, known as the Tax Reform for Acceleration and Inclusion, “appear to be well contained.”

“Nevertheless, the Monetary Board observed that the risks to the inflation outlook remain weighted toward the upside, owing mainly to price pressures emanating from possible further increases in global oil prices,” Espenilla said. “The Monetary Board stands ready to take appropriate measures as necessary to ensure that the monetary-policy stance continues to support price and financial stability,” he added.

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Piñol to cap rice prices as NFAC okays imports

By Jasper Emmanuel Y. Arcalas

2016 ejap journalism awards

By Samuel P. Medenilla @sam_medenilla

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Duterte has repeatedly rejected calls from his allies to extend his six-year term.

united labor front on Thursday threatened to stage bigger demonstrations on Labor Day if President Duterte will not sign the new executive order (EO) on contractualization next month.

Labor coalition Nagkaisa and militant labor group Kilusang Mayo Uno (KMU), which represent 90 percent of the country’s organized workers, said they will no longer tolerate the President’s foot-dragging on the issue.

They also said any attempt from the government to implement a watered-down version of their EO will be met with more protests.

“Come May [on Labor] Day, we will hold one of the biggest marches if ever the President will not make good on his promise come March,” KMU Chairman Elmer Labog told reporters in a news briefing on Thursday. “[The nonsigning of the EO] will push more workers to be on the streets to call for the junking of contractualization, or the signing of the EO,” Labog added.

Trade Union Congress of the Philippines (TUCP), one of the members of Nagkaisa, said more labor organizations are expected to take up their cause.

“Instead of fighting each on

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BALLOON FIESTA The 22nd International Hot Air Balloon Fiesta, which kicked off on February 8 at Clark, Pampanga, showcased 26 colorful hotair balloons from different countries.

LAILA D. AUSTRIA

Duterte’s vow to abbreviate term raises eyebrows

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ew elected world leaders have more constitutional power than President Duterte.

From Malacañan Palace, Manila’s answer to the White House, the Philippine President controls 83 percent of all public expenditure and appoints 12,000 government officials. US President Donald J. Trump, by comparison, is responsible for around 4,000 political appointees and needs Congress to approve his spending proposals.

Even so, Duterte is backing a push to give more power and money to regional governments, which would be the first change to the Philippine

Constitution since the overthrow of former dictator Ferdinand E. Marcos in 1986. The proposal would create the position of a prime minister and may scrap restrictions on foreign ownership in some industries.

While Duterte says the move is necessary to boost economic growth and quell a decades-long Muslim insurgency, his opponents see it as a ploy to stay in power. Since taking office in 2016, the 72-year-old leader has launched a deadly drugs crackdown and sought to silence political opponents, drawing the ire of humanrights groups.

“The administration, particularly Duterte, really believes that there will be real political and economic benefits—from better dispersion of growth to less political anger in the more remote areas,” said Bob Herrera-Lim, a managing director at Teneo Intelligence, a global political risk advisory firm. “Insofar as allowing the President to serve another term, that’s going to be a very big fight.”

‘No dictatorship’

n japan 0.4673 n UK 71.0856 n HK 6.5498 n CHINA 8.1501 n singapore 38.6526 n australia 40.0388 n EU 62.7849 n SAUDI arabia 13.6549

Source: BSP (8 February 2018 )

BMReports BusinessMirror

A2 Friday, February 9, 2018

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Piñol to cap rice prices as NFAC okays imports Continued from A1

interview. “The rule of thumb in pricing rice is that it should be double the buying price of palay.

Right now we have not heard of reports that palay is being bought at P25 per kilogram [kg], the highest now is P20. So, the price of rice should not be higher than P40,” he added.

He said the price of commercial rice should be capped at P42 to P44 per kg, while the regular-milled variety should not exceed P40 per kg.

“Prices should not be higher than

Labor groups. . .

is becoming politically dangerous because it is creating a situation where the frustration of workers and ordinary citizens will eventually catch up,” TUCP Vice President Luis Manuel C. Corral said.

Corral also questioned the reservations of Duterte on their draft EO, despite its “more relaxed” position on contractualization.

“We have already retreated from very strong position of total prohibition and criminalization toward essentially what is the most fair language there is. There is no more point of retreat with respect to the proposed executive order,” Corral said.

Under their proposed EO, a company will only be allowed to contract out a positions, which will be approved by the Department

these figures as no one is buying paddy at P25 per kg.”

Piñol said the Department of Agriculture (DA) will open a rice outlet on Valentine’s Day, where farmers’ groups would be allowed to sell rice at P38 per kg.

National Food Authority (NFA) Spokesman Rex Estoperez confirmed to the BusinessMirror that the food agency has been allowed to purchase 250,000 metric tons (MT) of imported rice following Duterte’s directive to Cabinet Secretary Leoncio B. Evasco Jr. to green light the importation.

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of Labor and Employment and its advisory council, the National Tripartite Industrial Peace Council.

TUCP also allayed the concerns of Duterte that the new EO will drive away potential foreign investors from the country.

“No company has ever shut down its operations from giving the right wages. The problem is our expensive power cost, corruption and lack of infrastructure,” Mendoza said.

TRAIN layoffs

Labor groups also said they are now bracing for the possibility that more workers would lose their jobs because of the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law.

Kilusang Mayo Uno (KMU)

Evasco disclosed in a television interview on Thursday that Duterte called him on Wednesday evening to activate the standby authority of the NFA to import 250,000 MT of rice.

Evasco chairs the NFA Council, the food agency’s highest policymaking body.

“NFA is proposing to buy rice via government-to-government, [because] we have a standby for 250,000 MT. The President called me [on Wednesday] night, giving us the order to buy,” Evasco said.

NFA Administrator Jason L.Y.

Aquino also confirmed that the food agency has been allowed by the President to push through with the purchase of 250,000 MT of imported rice importation to beef up its buffer stock.

However, Estoperez said the NFAC will decide on Monday the mode of procurement and the budget for rice imports. “The details of the procurement will still be discussed but talks with NFA colleagues point to the fastest mode.”

Estoperez said the NFA has two options for purchasing rice from abroad: government-to-govern-

Chairman Elmer Labog noted that Coca-Cola Femsa Philippines Inc. is now using the impact of TRAIN as an excuse to dismiss 600 of its employees.

“I think they will be kicking out workers from the sales force, and just leaving the delivery and production aspect as regular [workers],” Labog said.

Earlier this week, Coca-Cola Femsa Philippines Inc. announced it will be dismissing some its workers as part of the “restructuring” of its operations, but it did not disclose the number of its employees who will be affected by it.

Beverages companies have already expressed their concern on the impact of TRAIN since it is expected to raise their production cost and at same time reduce demand for their products.

T R A IN, wh ic h took ef fect

last month, imposed new taxes for oil, cars and sugary drinks, among others. Corral said they expect similar displacements in other industries.

“One month into the TRAIN, and it is already [being used] as a scapegoat by some companies to let go of workers because corporate profits are being affected,” Corral said.

“We expect [layoffs] in the automanufacturing sector. That is one major area that will take a major hit. We also expect it to affect companies that are dependent on imports for their operations and plantations,” he added.

Both KMU and TUCP are now urging the government to continue monitoring the effects of TRAIN to ensure it will not be abused by unscrupulous employers and that its affected workers will be given aid.

ment (G2G) or via government-toprivate scheme.

“If we follow the procurement law, it’s too long considering the process and preparation that should be followed. G2G importation is faster but the problem is it should be acceptable to the members of the NFAC because there’s a notion that it is prone to corruption,” he added.

The current rice stockpile of the NFA is around 1.2 million 50-kilogram bags, which is equivalent to two days of the country’s total rice consumption. This is reserved for

the needs of calamity-prone areas and rice requirement of island municipalities and provinces.

The state-run food agency has already suspended its distribution of rice to almost all retailers across the country due to the depletion of its stockpile.

Grains Retailers’ Confederation of the Philippines Inc. warned that once the NFA’s stockpile is completely depleted, the price of commercial could go up by P5 per kg, as 10 million Filipinos would have no other recourse but to purchase the commercial variant.

De Lima wants selection of third telco scrutinized Continued from A12

Taiwanese company are reportedly interested in setting up operations in the Philippines in partnership with local firms.

But de Lima cited a study conducted by a local brokerage firm, Papa Securities, about the security risks China Telecom brings as its main obstacle for its expansion in the Philippines. She said the study revealed “there has been 76 state-sponsored cyberattacks linked with China since 2005, about 75 of which are primarily espionage in nature, while 44 of these state-sponsored attacks targeted toward the US

during the period.” “We should not forget that the Philippines has also experienced being on the receiving end of Chinese cyberattacks,” the senator said.

De Lima further recalled that on July 12, 2016, Chinese hackers launched a series of online attacks against Filipino government networks, as the court in The Hague rejected China’s historic territorial claims in the South China Sea, locally referred to as West Philippine Sea. “The breach of these networks follows a string of Chinese cyberattacks targeting Southeast Asian claimants to the disputed waters, coinciding with times of heightened geopolitical tensions,” she added.

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Editor: Vittorio V. Vitug • Friday, February 9, 2018 A3

Duterte ready to defend legality of drug war before ICC–Palace

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By Azer N. Parrocha | Philippines News Agency

resident Duterte is ready to face the International Criminal Court (ICC) to “personally” defend the legality of his administration’s war on drugs, Malacañang said on Thursday.

Presidential Spokesman Harry L. Roque Jr. issued this statement following reports that the ICC Office of the Prosecutor would begin preliminary examination on the crimes against humanity linked to the campaign against illegal drugs.

“The President has said that if need be, he will argue his case personally before the International Criminal Court,” Roque said at a Palace briefing, noting that he had a two-hour discussion with Duterte about the matter on Wednesday night.

Roque further said that Duterte welcomed the preliminary examination as a chance to defend his drug war because he’s “sick and tired” of being accused of crimes

against humanity.

“This is an opportunity for him [Duterte] to prove that this is not subject to the court’s jurisdiction, because of both complementarity that domestic courts, and the fact that we have a domestic, international, humanitarian law, statuted in our jurisdiction are reasons enough for the court not to exercise jurisdiction,” Roque said.

No jurisdiction

Roque said that the case was not subject to the jurisdiction of the ICC because Philippine courts were “more than able and willing” to exercise jurisdiction.

The Palace spokesman said that there was even a pending com-

plaint against the killings allegedly attributed to the war on drugs in the Office of the Ombudsman.

He said that the Ombudsman had the power to recommend an impeachment, which if successful, would lead to a criminal prosecution against Duterte.

“The President has made it clear that he will communicate, he will assert the principle of complementarity, he will assert the legality of the war against drugs as a valid exercise of sovereign powers and, therefore, the element required for a crime against humanity is lacking,” Roque said.

In a slide show, Roque explained that elements required for a crime against humanity must be either widespread or systematic attack directed against civilian populations with knowledge that it was being directed against civilian population.

Roque said that alleged extrajudicial killings “will not prove anything” because of the lawful sovereign act to deal with the problem of illegal drugs.”

“Because the war on drugs is a lawful, legitimate police operation, it cannot be characterized as an attack against civilian populations because they are civilians. It is a lawful use of force and, therefore, we submit that

the element of directing an attack against directing an attack is simply lacking,” he added.

He said Duterte was looking forward to engaging the ICC Office of the Prosecutor and expressed confidence that it would not go beyond its preliminary examination.

“The President himself is a lawyer, he looks forward in fact to engaging the prosecutor of the court as a former prosecutor himself,” Roque said.

Roque also said that Duterte stood by his position that he swore an oath to protect this republic against all threats to national security, including the war on drugs.

of the ICC Office of the Prosecutor stemmed not from a complaint but two “communications” submitted by lawyer Jude Sabio, and Sen. Antonio Trillanes IV and Party-list Rep. Gary Alejano of Magdalo in 2017.

Sabio, in his communication, cited the number of people allegedly killed by the so-called Davao Death Squad in Davao City and the war on drugs, which began in June 2016. Meanwhile, Trillanes and Alejano also cited Duterte’s pronouncements on killing drug addicts.

“It’s not a complaint, it’s a communication because there’s no complaint yet, there are no charges yet.

It emanated from the communica-

Domestic ‘enemies’

This is an opportunity for him [Duterte] to prove that this is not subject to the court’s jurisdiction, because of both complementarity that domestic courts, and the fact that we have a domestic, international, humanitarian law statuted in our jurisdiction, are reasons enough for the court not to exercise jurisdiction.”—Roque

Roque said Duterte wanted to put the prosecutor on the stand to ask who prodded them to proceed to preliminary examination, noting that it was his suspicion that it was because the domestic enemies of the state behind this.

“Obviously, there’s been concerted public-relations initiative against the President. Obviously, this is intended to embarrass the President. But the President is a lawyer.

He knows what the procedures are.

They will fail,” Roque said.

He clarified that the decision

tion filed by individuals alleging crimes against humanity in the Philippines,” Roque said.

Roque also pointed out that it was not a preliminary investigation but examination because it merely involved the “collection and verification of information.”

He said that the objective of the ICC Office of the Prosecutor to conduct a preliminary examination is to determine if there is reasonable basis to proceed to a preliminary investigation.

“I repeat no one should claim victory because we are only in a stage of preliminary examination,” Roque added.

Army ups recruitment quota to 8,000 for ’18

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he Army will recruit an additional 8,000 personnel this year as it continues to build its forces amid the military’s continuing campaign against all threat groups.

A r my Spokesm a n Lt. Col .

Louie Villanueva said the 8,000 is higher than the regular 3,600 annual quota replacement in the Army, which is in the forefront of the military’s internal security operations.

“The higher quota is also due to the ongoing activation of 10 additional Army infantry battalions, which aims to further strengthen the Philippine Army’s capability to be more responsive in addressing the various threats, particularly terrorism that besets the country,” Villanueva said.

Last year the Army was able to fill its 2017 recruitment quota of about 350 new officers and about 13,000 newly enlisted personnel.

Of the number, 8,892 soldiers were hired to fill up the special quota approved by President Duterte, 1,069 went to the newly organized 54th Engineer-

About 400 were successfully integrated to the rank, and deployed mostly in the Eastern Mindanao area, while there are 348 who are still undergoing training.”

—Villanueva ing Brigade and the remaining 3,600 soldiers represented the annua l quota replacement in the Army.

Villanueva said that a total of 1,000 slots were allocated for indigenous people in 2017.

“About 400 were successfully integrated to the rank and deployed mostly in the Eastern Mindanao area while there are 348 who are still undergoing training,” he said.

Villanueva added that most of the recruits for will fill up the manpower needs of the infantry, cavalry and artillery units. There are also recruits who filled up the engineer, communication, logistics and other administrative functions of the Army.

R ec r u it ment centers h ave been identified in Cagayan de Oro City, Cebu City and Fort Bonifacio, Taguig City. “ T h e c o nt i nu o u s r e c r u it ment of the Philippine A r my is a good oppor tunit y for our youth to discover a new dimension on how to better ser ve and show their love for our countr y,” Vil lanueva said.

“There may be lots of vocation, occupation and profession waiting around, but joining the noblest profession, particularly the Army, is something different and worthwhile,” he added. Rene Acosta

Love blossoms

A worker puts finishing touches on a synthetic set of cherry blossom that blooms on display at the San Juan Town Plaza, in preparation for the forthcoming commemoration of Valentine’s Day on February 14 and Chinese Lunar Year on February 16. Nonie Reyes

Presidential visit to Kuwait now possible, Malacañang spokesman says

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resident Duterte may likely visit Kuwait soon following his recent meeting with Kuwaiti Ambassador to the Philippines Saleh Ahmad Althwaikh, Malacañang said on Thursday.

“Since the President mentioned

it, then I can make confirmation although I was told that I should not.

But there is a trip in the offing to Kuwait,” Presidential Spokesman Harry L. Roque Jr. said at a Palace briefing.

Duterte and the Kuwaiti envoy held a closed-door meeting

on Wednesday amid issues involving the overseas Filipino workers (OFW) in Kuwait.

“I don’t know the agenda because only the President met with the ambassador. No one was allowed in the room,” Roque said.

“I could only surmise that the invitation was made during the bilateral meeting. I guess Kuwait wants to assure the President that our Filipino nationals are protected in Kuwait and to see for himself,” he added.

The President had earlier ordered

a temporary suspension of the OFWs deployment in the Gulf state following the deaths of OFWs there.

Duterte had even said he might ask all Filipinos in Kuwait to go back to Manila if another OFW dies in Kuwait.

“One more incident about a wom-

an, a Filipina being raped there, I’m going to stop, I’m going to ban,” Duterte said in his speech before leaving for his trip to India last month.

There are more than 250,000 Filipinos in Kuwait, many of them work as domestic helpers. PNA

Economy

A4 Friday, February 9, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon

Duterte admin urged to submit Bangsamoro economic plan

By Butch Fernandez @butchfBM

A

l aw m a k er asked the Duterte administration on Thursday to provide the Senate with economic data that will support the Bangsamoro government’s bid for fiscal autonomy.

In a news statement, Senate President Pro Tempore Ralph G. Recto said the requested data should provide details showing how the Bangsamoro basic law (BBL) will be sustained, stressing that the “law is in the details.”

The lawmaker suggested that the Duterte administration officials concerned submit “the economic fine print that will underpin the proposed Bangsamoro government’s fiscal autonomy.”

Recto revealed that he coursed his request through Sen. Juan Miguel F. Zubiri, asking specifically for “facts and figures that will bolster the financial feasibility” of the Bangsamoro self-ruled homeland.

The senator said the “submission of these [data] will clarify ambiguities in the provisions in Bangsamoro basic law bill,” adding that it will also “hasten its passage in the Senate.”

The Senate leader added: “Like any bill, if you scratch the surface of a provision of the BBL, you will find the price tag underneath.”

Recto clarified that the requested data should include, among others, national revenue collections in the Autonomous Region in Muslim Mindanao “since its creation to the present,” as well as budget utilization of the ARMM, including relevant financial statements, “from the time it was created.” Likewise, included are “budget allocations and subsidies lodged in different national government agencies, earmarked and offbudget revenue sources.”

The senator said the purpose of the request is to “find out if past

allocations to the ARMM were at levels sufficient to meet the imperatives of growth.”

He added the request was made because if relevant data is “historically lacking, then we are properly informed not to commit the same mistakes with the future Bangasamoro government.”

Recto also requested the submission of additional data on the formula used in computing and allocating the proposed annual block grants, or “funds which are to be automatically appropriated and released by the national government.”

For 2019, he noted, “the block grant is pegged at P72 billion. What, then, is the revenue basis used in setting this amount?”

At the same time, Recto requested an “elaboration” on the nature of the Special Development Fund or SDF, which has been pegged at P100 billion for 20 years, P10 billion of which shall be given by the national government the year following the ratification of the BBL. “What is the basis for the SDF? What are examples of projects to be funded by this?” Recto asked.

He also sought submission of the “negative list of projects or programs,” which cannot be funded by the block grant or by the SDF. In addition, Recto requested for social and economic indicators at all levels of the present ARMM, and “programs that will result in better socioeconomic numbers.”

The senator advised BBL proponents in the Executive branch to provide senators with a comparative matrix between Republic Act (RA) 6734 (ARMM Organic Act) RA 9054 (Amended ARMM organic act) and the BBL. “A side by side tale of tapes, comparing past, current models and future one would help us create the best BBL, which will encapsulate all our dreams and visions for a peaceful, progressive south,” Recto said.

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Meralco: Power rate up P1.08/kWh in Feb

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By Lenie Lectura

@llectura

he Manila Electric Co. (Meralco) on Thursday said electricity rates for February are up by P1.08 per kilowatt-hour (kWh), mainly due to an increase in generation charge.

However, the utility firm will not implement the full amount this month. “This will not be implemented in full, in the interest of consumer welfare,” the power utility firm said.

It added: “ The distribution utility advised the public to await the official announcement on the final rate adjustment for February, and how the remainder of the increase will be implemented.”

No other details were provided.

Mera lco Utilit y Economics Head Lawrence Fernandez had warned that February power rates would increase.

“As in prior years, we expect capacity fees of PSAs [power-supply agreements] to normalize in February. Hence, we see an uptick in the gen charge next month, though we still need to await final supplier bills to see the effect of such factors as

WESM [Wholesale Electricity Spot Market] charges, forex [foreign exchange] rate, fuel prices and others,” Fernandez said last month.

Separately, power rates in February are expected to go up by P0.80 centavos per kWh as a result of the new Tax Reform Inclusion and Acceleration (TRAIN) law.

“We estimate that the effect of the VAT on transmission would be P0.70 per kWh, while the effect of the excise tax on coal would be P0.10 per kWh, for a total of P0.80 per kWh,” Fernandez added.

Meralco rates for the past two consecutive months went down by P0.90 per kWh for a typical household.

Last month power rates went down by P0.5260 per kWh, mainly due to a P0.5277-per-kWh reduction in the generation charge, which decreased from P4.6045 per kWh in

December last year to P4.0768 per kWh in January this year.

Fer nandez e x pla ined t hat the January generation charge reduction was largely due to lower capacity fees following the annual reconciliation of outage allowances.

The January charges from PSAs registered a decrease of P0.9810 per kWh. The lower PSA charges were brought about by a reduction in capacity fees as a result of the annual reconciliation of outage allowances done at the end of each year under the PSAs approved by the Energy Regulatory Commission.

The reduction in capacity fees of generation companies represents savingsimmediatelypassedontoconsumers by way of lower electricity rates.

PSA s prov ided 40 percent of Meralco’s total energy requirement during the December supply month, which was reflected in the January bills of consumers.

Aside from lower capacity fees, WESM charges also decreased

by P1.6943 per kWh due to lower

We estimate that the effect of the VAT on transmission would be P0.70 per kWh, while the effect of the excise tax on coal would be P0.10 per kWh, for a total of P0.80 per kWh.”—Fernandez

Pag-IBIG Fund reports stellar 2017 financial performance

By Rea Cu

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Shotguns to be issued to DENR forest guards

By Jonathan l. Mayuga @jonlmayuga

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ield employees of the Department of Environment and Natural Resources (DENR), particularly forest-protection officers, will be armed with shotguns commonly issued to security guards in the performance of their duties.

At a news conference in Quezon City on Wednesday, DENR Undersecretary for Policy, Planning, International Affairs and Foreign-funded Projects Jonas R. Leones said forestprotection officers and field personnel of the DENR are now undergoing arms proficiency training.

There are around 2,000 forestprotection officers all over the country, but only a few will be allowed to carry the firearm and they will not be allowed to bring them home, Leones said.

Those who will be allowed to carry firearms are those assigned in critical areas, like Palawan or areas where illegal-logging activities are rampant, Leones, the designated spokesman of Environment Secretary Roy A. Cimatu, said.

Leones was reacting to reports brought up by reporters of an environmental group’s allegation that the Philippines is now among the deadliest countries in the world for environmental activists and environmental defenders.

The group cited the 2017 finding of an international nongovernmental organization called Global Witness, which is based in London. The report also declared, the Philippines as the deadliest for environmental activists and defenders in 2016.

In response, Leones said such findings need further verification.

“I need to check the veracity of the

figures. I need to learn the methodology first. The secretary is looking at it seriously,” he said.

Nevertheless, Leones added, the country’s top environment official is also considering the safety of the DENR’s field personnel, especially those targeted by illegal loggers and other organized crime groups that are armed with highpowered firearms.

“There are a lot of deaths [from the DENR] for doing their jobs. We need to look after our employees,” Leones said.

According to Leones, the DENR chief has issued specific orders to teach the field personnel on how to defend themselves.

“And, of course, we will arm them,” he said, noting the risks forest-protection officers and other field personnel in fighting off illegal loggers who are armed with high-powered weapons, while they, on the other hand, are only armed with batons.

Leones added that in arming the DENR’s forest-protection officers and field personnel with firearms, it is imperative to teach them about the “rules of engagement.”

“We are [conducting training]. Our field offices are training them. This will only be used, in the meantime, in selected hot spots, like Palawan. The areas will be identified based on the necessity,” he said.

According to Leones, in the past two years, the most serious attack against a DENR forest-protection officer happened in Palawan last year. The forest-protection officer was injured by suspected illegal loggers while patrolling his area of jurisdiction, he said.

“There was also a report of the death of a barangay chairman in the same province,” he added.

spot prices resulting from a reduction in power demand in the Luzon grid. The share of WESM purchases to Meralco’s total requirement in January was 19 percent.

On the other hand, charges from the independent power producers (IPPs) increased by P0.3808 per kWh due to lower average plant dispatch. The share of IPP purchases to Meralco’s total requirement in January was at 41 percent.

Meralco’s distribution, supply and metering charges, meanwhile, have remained unchanged for 31 months, after these registered reductions in July 2015.

Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges.

Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the National Grid Corp. of the Philippines. Taxes and other public policy charges like the feed-in-tariff-All are remitted to the government.

Dispersal program

The Philippine Army (PA), represented by its commanding general, Lt. Gen. Rolando Bautista (left), and Tarlac Heritage Foundation (THF) Cofounder Isa Cojuangco-Suntay hand over a calf to a farmer in Barangay Abogado, Paniqui, Tarlac, last Friday as part of a program to alleviate the plight and provide sustainable livelihood to farmers in the province. Since its inception, the PA and THF’s Animal Dispersion Program has distributed 24 cows, seven carabaos, five goats and 11 ducks to farmer-beneficiaries, benefiting some 110 families who, in turn, are required to produce animal offspring to ensure the continuity of the program. Also with Bautista and Cojuangco-Suntay during the dispersal program was Brig. Gen. Felicisimo Budiongan (second from left) of the PA’s Mechanized Infantry Division. Nonie Reyes

Pinoys in search for house and lot property, but condo inquiries up

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nline marketplace for properties Lamudi Philippines revealed that most Filipinos are looking for house and lot properties, but inquiries on residential condominiums are increasing.

At a news briefing on Thursday, Lamudi Philippines CEO Bhavna Suresh said 59 percent of its property searches in 2017 were house and lots.

Almost half of house and lot searches were looking for properties with a value of P5 million and below; 35 percent were looking for house and lot priced up to P20 million; 13 percent were searching for properties amounting to up to P150 million; and 4 percent were searching for house and lots with a value of more than P150 million.

However, Suresh noted that the share on searches for house and lots declined from the past years,

which was about 70 percent.

She said searches for other types of property were rising, particularly for condominiums, accounting for 14 percent of searches in Lamudi last year.

About 12 percent of searches in Lamudi were raw land or lots, while apartments shared 11 percent to the total searches in 2017.

Suresh said 15 million users who visited Lamudi’s web site last year spent 2.7 million hours searching for property online.

She added that Lamudi had seen a large increase in the number of visits to its platform in 2017, which signaled a rise in Filipinos’ acceptance of property technology or PropTech.

“More developers, brokers, and owners are now breaking the brick and mortar barrier to cros over to

the click and discover business environment,” Suresh said.

Last year Lamudi Philippines had a total of 100,000 active listings from residential condominiums, house and lots, apartments, commercial spaces, raw lots and foreclosed properties across the country.

A total of 1.1 billion square meters of property spaces were listed on Lamudi’s platform in 2017.

In terms of sources of properties, majority or about 18 percent of supplies were in Quezon City, followed

by Makati City with 12 percent.

Other top supplies of property listings in Lamudi include Parañaque, Pasig, Taguig and Manila.

In terms of demand, a big chunk still came from Quezon City and Makati City, with 15 percent and 10 percent, respectively. PNA

@ReaCuBM

he Home Development Mutual Fund (Pag-IBIG Fund) has reported a record-breaking performance for 2017, with its gross income totaling P43.3 billion, or a 13 percent increase from the P38.2 billion in 2016.

Pa g - I BIG Fu nd C h a i r m a n Eduardo D. del Rosario said the agency’s stellar financial performance can be attributed to the reforms that are continuously being implemented by the fund.

Pag-IBIG’s net income for 2017 reached P30.2 billion, expanding by 21 percent from the P25 billion in 2016. “For the first time, we hit P30 billion in our net income. Our members will reap the benefits of this as they will receive dividends of at least 7 percent in their Pag-IBIG savings,” Pag-IBIG Fund CEO Acmad Rizaldy P. Moti said.

Pag-IBIG recorded home loan takeouts for the year amounting to P65.1 billion, expanding by 14 percent from the P57.3 billion in 2016.

It was able to collect around P51.6 billion from housing loans, which saw an increase of 9 percent from the P43.7 billion in 2016.

The agency was able to provide home loans to 80,964 of its member borrowers, with 24,705 being provided for socialized housing for low-wage earners.

The agency was able to record its highest ever performing loans ratio at 90 percent for the year from the 89 percent in 2016, while its nonperforming loans ratio for the year decreased to 9.8 percent.

Dividends for the year amounted to P27.2 billion, increasing by 22 percent from the P22.3 billion recorded in 2016. Its dividend rate was recorded at 7.61 percent from the 6.93 percent recorded in 2016.

The monthly contribution from an individual member by the fund still stands at P100.

Pag-IBIG Fund recorded its highest member savings collection for the year at P36.3 billion, while its multipurpose loan releases reaching P45.3 billion.

“2017 reaffirmed Pag-IBIG Fund’s standing as a strong and reliable partner of Filipino workers and other stakeholders,” del Rosario said.

Agriculture/Commodities BusinessMirror

www.businessmirror.com.ph

Editor: Jennifer A. Ng • Friday, February 9, 2018

A5

PHL bans poultry products from 3 countries

By Jasper Emmanuel Y. Arcalas

T

@jearcalas

he government said it has temporarily suspended the issuance of import permits for poultry meat and other poultry products from three countries, where a lethal strain of the bird-flu virus has been detected.

In three separate memorandum orders published recently, the Department of Agriculture (DA) ordered the temporary ban on the importation of poultry meat and poultry products—including day-old chicks and semen—from Saudi Arabia and some parts of the Netherlands and Russia.

The DA made the decision after the three countries reported outbreaks of the highly pathogenic avian influenza (HPAI) virus in some of their poultry farms in the past two months to the World Organisation for Animal Health (OIE).

“There is a need to prevent the entry of the HPAI virus to protect

the health of the local poultry population,” Agriculture Secretary Emmanuel F. Piñol said in Memorandum Orders 3, 4 and 5, copies of which were given to reporters on February 8.

The Netherlands’s Ministry of Economic Affairs reported to the OIE that the H5N6 HPAI virus struck fattening ducks in Biddinghuizen, Flevoland.

Also, Russia’s Ministry of Agriculture reported to the OIE that the HPAI virus, with a strain of H5N2, was found in birds in ZAO Pticefabrika Kostromskaya, Kostromskoy, Kostromskoya Oblast. The bird-flu outbreak was confirmed by Moscow’s national laboratory.

Saudi Arabia’s Ministry of Environment, Water and Agriculture told the OIE that there were outbreaks of H5N8 HPAI in Riyadh, Al Kharj, and Al Mazahmyia,

which affected birds.

With the ban in place, the Philippine government has suspended the processing, evaluation of the application and issuance of sanitary and phytosanitary import clearance of domestic and wild birds and poultry products from affected areas in Saudi Arabia, the Netherlands and Russia.

The DA warned that it will confiscate all shipments of the banned commodities originating from the two abovementioned countries. The ban does not cover heat-treated products.

“Frozen poultr y meat with slaughter/process date of 21 days prior to the HPAI outbreaks are allowed to enter the country subject to veterinary quarantine rules and regulations,” Piñol said.

The Philippines does not source poultry products from Saudi Arabia and Russia.

Masbate mine’s gold output seen declining by 11% this year

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he gold produc t ion of the Masbate Gold Project (MGP), the country’s top producer of the precious metal, is expected to fall to a three-year low in 2018.

Canadian gold producer B2Gold Corp. (B2Gold), which operates MGP, said in a statement that it expects the mine’s gold output this year to settle between 180,000 and 190,000 ounces, which will be sourced primarily from the highergrade Main Vein pit.

The gold production forecast is at least 11.09 percent lower than the 202,468 ounces the MGP produced last year.

“In 2018 Masbate is budgeted to process a total of 6.8 million tons of ore at an average grade of 1.26 grams/ton and process recovery of 65.9 percent,” the Vancouverbased B2Gold said.

“The increase in grade and decrease in recovery versus 2017 is due to the change in ore source from the Colorado oxide ore [lower grade and higher recovery] to the Main Vein ore [higher grade and lower recovery],” it added.

For this year, B2Gold said it is allocating $16.6 million for capital costs of the Masbate mine. The company will also spend $32.5 million for non-sustaining costs, which include the expansion of the Masbate processing plant.

“A detailed capital cost estimate of $25.5 million was recently completed by Lycopodium for the expansion of the Masbate processing plant to 8 million tons

Andrey Rudakov/Bloomberg

per year [$23 million in 2018 and $2.5 million in 2019]. The expansion primarily consists of adding a third ball mill and upgrading the existing crushing circuit,” it said.

“No addition to the mining fleet is required as the additional feed will come from the lower grade material that is currently in the mine plan and scheduled to be stockpiled,” it added.

Once the processing plant expansion is completed, the Vancouver-based firm expects to keep Masbate’s annual gold production at close to 200,000 ounces per year

during the mining phase and above 100,000 ounces annually when low-grade stockpiles are processed at the end of the project life.

MGP’s gold production in 2017 declined by 1.8 percent from a record-high output of 206,224 ounces in 2016.

However, MGP’s output in 2017 of 202,468 ounces exceeded the firm’s expectations of producing between 180,000 and 185,000 ounces.

“Masbate’s 2017 gold production exceeded the upper end of both its revised and original production guidance ranges by

9 percent [or 17,468 ounces],” B2Gold said.

“The higher production was due to better than expected recoveries and grades, mainly driven by significantly higher than budgeted oxide ore tonnage from the Colorado Pit,” B2Gold added.

Philippine Gold Processing and Refining Corp., the owner of the mineral processing facility at MGP, is a subsidiary of B2Gold.

B2Gold holds a 40-percent stake in Filminera Resources Corp., which holds the mining tenements that include the Masbate mine. Jasper Emmanuel Y. Arcalas

Millions of hungry swine are keeping German wheat business alive

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erman wheat traders are discovering that their best customers are swine.

Demand for wheat to use in livestock fodder—normally of lesser quality than grain milled into flour—is so strong it’s now selling at a premium to wheat used for baking. The sales, mostly to feed the nation’s roughly 30 million pigs, have helped inject some life into an otherwise moribund market.

“If it weren’t for the feed industry, we would have a really big problem,” said Frank Deckert, a senior trader at Ceravis AG, a Rendsburg-based grain collector. “It’s the only stable element in the market.”

German wheat sales outside the European Union have sunk by more than half this season, battered by low prices amid record harvests from top exporter and low-cost grower, Russia. At the same time, heavy rainfall last summer reduced the availability of high-quality grain. Overall supply is also smaller

because of fewer imports from Poland and the Czech Republic, themselves hurt by bad crops.

Valued at about €7.1 billion ($8.7 billion), the country’s feed industry is Europe’s largest, catering mainly to pig farmers in Lower Saxony and North Rhine-Westphalia. While health concerns and an influx of refugees are changing German eating habits, the country remains Europe’s biggest hogproducing and pork-eating nation, slaughtering almost 58 million pigs last year.

Compound feed manufacturers change their recipe depending on the price of the ingredients, and wheat currently costs less than alternatives like soy and corn.

Cheaper grains, such as rye and barley are not as cheap as before.

“They are all looking for protein, the cheapest source of protein,” said Katharina Kleingarn, the owner of Kleingarn Agrarprodukte GmbH, which supplies ingredients to the

feed industry. “They have programs that calculate and optimize the recipe.”

Feed wheat for delivery in February or March is fetching €168 a ton on the domestic market, compared with €164 a ton for milling wheat delivered to Hamburg, according to Getreide AG, a trading house based in the city, the grain’s main export hub.

Some farmers prefer to sell milling wheat to feed manufacturers, which helps avoid any future discounting should the grain fail to meet millers’ quality requirements, according to Getreide’s trader Tobias Fallmeier.

“It’s helping us to survive in a market where nothing else is happening,” Jens Kass, managing director of C. Mackprang jr. GmbH, said in an interview in Hamburg.

“The feed industry usage here in Germany, and in the western and northern region of Europe, is quite good.” Bloomberg News

Krisztian Bocsi/Bloomberg

Irri eyes public-private sector support for wider DSR adoption

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he International Rice Research Institute (Irri) is targeting more publicprivate support to address key challenges in the successful and wider adoption of DirectSeeded Rice (DSR) systems in South and Southeast Asia.

Presented during the recent launch of the Direct-Seeded Rice Consortium (DSRC), Irri’s main proponent for the initiative, were priority areas for DSR research with particular focus on improving mechanized and precise direct-seeding practices to help current DSR end-users maximize its full benefits.

“DSR is a more resourceefficient, climate-resilient and sustainable alternative agricultural system to manual transplanting but gaps are still present. Many agronomic DSR practices have become inefficient because of lack of mechanization, precision application and proper education, hence the prevalent preference for manual systems,” Irri senior scientist and DSRC Coordinator Dr. Virender Kumar said.

DSR systems are more rapidly and easily planted, less labor intensive, consume less irrigation water, mature earlier, are more conducive to mechanization, and have fewer methane emissions. Overall analysis of 77 published studies shows that various methods of direct seeding reduced the cost of production by $9­—125 ha compared with conventional transplanting methods.

While DSR is widely practiced in many Asian countries, such as Malaysia, Sri Lanka, Vietnam, Thailand, Cambodia and the Philippines, Manual Puddled Transplanted Rice (PTR) system is still the predominant method or rice establishment in most parts of Asia. Other setbacks to its wider adoption are DSRassociated risks including weed infestation and yield losses.

To address these gaps and ease end-users’ transition from PTR to DSR, the consortium

will propose science-based, scalable solutions for precise crop and weed management, characterizing areas suitable for DSR, GIS-guided sowing windows and crop-modelling approaches, and efficient evaluation of new superior rice cultivars adapted to DSR conditions.

“This consortium will strengthen collaboration between public and private sectors and eventually will lead to availability of resourceefficient and sustainable production practices and technologies not just for relevant business entities but also the small holder farmers across Asia,” said Jacqueline Hughes, Irri’s Deputy Director General for Research.

“This partnership with Irri will expand our reach and expertise, and we are confident that this will contribute to the faster and wider dissemination of rice technologies and solutions that raise rice productivity and farmers’ income at the same time.

Through this collaboration, we are excited to provide products and program support that contribute to food security in a significant and environmentally sustainable way,” adds Gustavo Palerosi Carneiro, head of BASF’s Crop Protection Division in Asia Pacific and co-convenor of the DSRC. Data and results-sharing through Irri’s Open Access and Data Management Policy and Research Data Management best practices will be made available to all consortium members, among other benefits.

Eager to become the major driver of change in the agricultural systems in South and Southeast Asia, DSRC welcomes more partners from any government organizations, including Nares partners, NGOs, civil societies and farmers’ groups.

“We want to encourage a richer exchange of ideas, knowledge and technologies to overcome key constraints in this initiative,” Hughes said.

Banking&Finance BusinessMirror

A6 Friday, February 9, 2018 • Editor: Jun B. Vallecera

www.businessmirror.com.ph

PHL dollar reserves slip to $81.2B in January

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By Bianca Cuaresma @BcuaresmaBM

fforts by the Bangko Sentral ng Pilipinas (BSP) to put order in the foreign-exchange market helped push the country’s dollar reserves lower in January.

Latest data from the BSP showed the country’s gross international reserves (GIR), representing the country’s holdings of foreign currency and gold, fell during the month to only $81.2 billion.

The BSP, in a statement, said the decline was “marginal” and $400 million short of the December foreign-currency reserves of $81.6 billion. It was also $170 million lower than the January 2017 GIR of $81.38 billion. “ T h e m o nt h - o n - m o nt h m a r g i n al decline in the GIR level was due mainly to outf lows arising from the foreig n-exchange operations of the BSP and payments made by the national government for its maturing fore i g n - e x c h a n ge obl i g at io n s , t he BSP said.

Among analysts, Central Bank speaks citing foreign-exchange operations is really shorthand for the buying and selling of foreign currency to achieve a particular exchange rate advantageous to the $305-billion economy.

Data show that both the BSP’s income from foreign investments, as well as gains from its foreign-exchange operations were down during the month, with

foreign investments hitting $65.36 billion, from the previous month’s $65.82 billion, while foreign-exchange inflows stood at $5.7 billion, from $5.78 billion last December.

The local currency averaged P50.509 per dollar in January, weaker than the P50.395 per dollar set in December last year.

The BSP also said the decline could

.have been larger were this not partia l ly tempered by the foreig n-currency deposits of the national government and by so-called revaluation adjustments on the BSP’s gold holdings resulting from the increase in the price of gold in the international market.

The BSP’s gold holdings increased significantly from December 2017 ’s $8.34 billion to $8.5 billion in January this year.

Despite the decline, the BSP maintained that the current level of GIR remains sufficient to cover the country’s requirements. “[The] GIR represents more than ample liquidity buffer and is equivalent to 8.2 months’ worth of imports of goods and payments of services and primary income. It is also equivalent to 5.8 times the country’s short-term external debt based on original maturity and 4.2 times based on residual maturity,” the BSP said.

Case clippings

By Justice S J Ranada Jr.

LAND REGISTRATION–not a mode of acquiring ownership It is an enshrined principle in this jurisdiction that registration is not a mode of acquiring ownership. A certificate of title merely confirms or records title already existing and vested. The indefeasibility of a Torrens title should not be used as a means to perpetrate fraud against the rightful owner of real property. Good faith must concur with registration because, otherwise, registration would be an exercise in futility.

Sps v. Ayala 26 Jul 2017

GR 173120 Mendoza, J

BAP supports amendments to Access Devices Act

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he Bankers Association of the Philippines (BAP) commends the unanimous act of the House of Representatives to pass House Bill 6710, or “An Act Amending Republic Act 8484 Otherwise Known as the Access Devices Regulation Act of 1998,” on third and final reading without a single objection.

The House of Representatives, through the able leadership of Rep. Ben P. Evardone of the Lone District of Eastern Samar, chairman of the Committee on Banks and Financial Intermediaries, recognized the gravity and the profound economic impact of financial fraud and crimes committed through the use of electronic devices and technical gadgets. Besides the direct loss from financial and trade transactions, the rising incidence of system breach has the propensity to erode public

trust on finance and banking institutions.

Declaring the commission of such crimes as heinous and a form of economic sabotage and raising the punishment to the maximum

allowable by law are expected to deter criminals from further committing such acts. This bold move will help in ensuring the safety, security and stability of the Philippine financial system.

The stiffer penalties are preventive measures against foreign crime syndicates who simply post bail if caught, then immediately leave the country, limiting the reach of our local law-enforcement agencies.

The road ahead is long as this bill will still require the ratification of the Senate and finally the bicameral conference committee, which we hope can be successfully concluded. In the implementation of the law, a concerted effort of all law-enforcement agencies, financial regulatory agencies, affected stakeholders and the community at large, is necessary.

Golf season

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any people feel that once Christmas is over, the exc itement a nd t he fest ive atmosphere dies down.

However, for the regular golfers, the fun is just about to begin with what I think is the prime time for golfing in the Philippines, which is January and February. This is really the best time to play golf, when there are no rains and the weather is the coolest we can get. This is also normally the time that the various private membership clubs schedule their signature member-guest golf tournaments and other regular corporate and club tournaments are also scheduled.

For me, these are the Mango Tee of Alabang Country Club, which is my home course but is currently under renovation, the Golden Tee of Manila Golf and the Santa Elena Cup. From a financial perspective, this is the best investment you can make. Whatever you pay for your team registration is easily doubled from the giveaways, cocktails, dinner and awarding ceremonies, raff le pr izes, equiva lent green fees for your guest partner and so much more.

Not only do you get so much stuff back, the fun factor is also priceless.

You get a chance to run into so many old friends, business associates and of course, spend quite a bit of time with your chosen partner, doing what you both like to do, play golf. These events can also be quite memorable and fulfilling like when you actually place in the tournament or better yet make a hole in one where typically the prize will be a nice luxury car.

Different companies have different policies on playing golf during office hours. For the government, this is typically not allowed and understandably so, since the majority of the people and taxpayers expect their paid civil servants to be on the job. Unless your company is in some way connected to golf courses and golf equipment, even in the private sector it would be difficult to justify an employee or executive regularly playing golf on company time.

Then again, there are a number of situations when companies allow or even expect their executives to play golf on a weekday. Typically this happens when there is a company sponsored golf

FINEX free enterprise George S. Chua tournament, entertaining clients and business associates, or being invited to play in a tournament by a company one does business with. Some people even play golf daily as part of their routine before going to work.

Is it worth buying and becoming a member in a golf club? Again, different companies have different philosophies on this. Some view golf club memberships as an unnecessary expense and distraction while other companies automatically assign golf shares to certain key executives. Personally, I have found that owning my own golf club share has been beneficial on so many fronts.

First is that the status of a member is much better than that of a gues. As a proprietary owner, your spouse and dependents are entitled to similar membership privileges, and you can feel at home in your club. After all, you are a part owner.

O f cou rse, t he re a re cost s of ownership, such as the purchase of the club share itself, transfer fees and the monthly dues. However, if you play golf regularly enough, you can save money by not having to pay the green fees if you had been a guest. Another significant source of your cost recovery is the capital appreciation of your golf club share, which can be quite significant. I have bought club shares that have doubled in value over the last three years.

Owning golf shares have been a positive investment for me, and while it may not offer me the highest returns on my investment, it has certainly provided me with the most fun. I want to wish all the participants in the 16th FPI Golf Classic at Tagaytay Midlands today to have a great round of golf and good luck in the raffle.

Comments may be sent to georgechuaph@yahoo.com.

17thPre-need Consciousness Week

“PRE-NEED: KABALIKAT NG BAWAT PILIPINO”

BusinessMirror Special Feature

www.businessmirror.com.ph

Friday, February 9, 2018

A7

PHILIPPINE FEDERATION OF PRE-NEED PLAN COS. INC.

PROMOTING PRE-NEED CONCEPT OF PREPARATION

AND PLANNING A BETTER FUTURE T

By Leony R. Garcia

HE pre-need industry used to be a flourishing business in the country before the Asian financial crisis with over 200 preneed firms. Today there are only less than 20.

Pre-need company refers to any corporation registered with the Insurance Commission (IC) and authorized/licensed to sell or offer to sell pre-need plans. The term “pre-need company” also refers to schools, memorial chapels, banks, nonbank financial institutions and other entities which have also been authorized/licensed to sell or offer to sell pre-need plans insofar as their pre-need activities or business are concerned.

Based on the IC’s data, 16 preneed companies were licensed to operate in 2016, including AMA Plans, Incorporated, Ayala Plans Inc., Caritas Financial Plans Inc., CityPlans Inc., Cosmopolitan Climbs Life Plan Inc., Destiny Financial Plans, Inc., Eternal Plans Inc., Financial Freedom Plans Inc., Himlayang Pilipino

Plans Inc., Manulife Financial Plans, Inc., Mercantile Care Plans Inc., PhilPlans First Inc., Saint Peter Life Plan Inc., Sunlife Financial Plans Inc., Transnational Plans Inc. and Trusteeship Plans Inc. These companies sell pre-need plans which are contracts, agreements, deeds or plans for the benefit of the plan holders which provide for the performance of future service/s, payment of monetary considerations or delivery of other benefits at the time of actual need or agreed maturity date, as specified therein, in exchange for cash or installment.

The amounts can be with or without interest or insurance coverage and includes life, pension, education, interment and other plans, instruments, contracts or deeds as may in the future be determined by the IC.

Many people have benefited from pre-need plans. Students were able to study and graduate from reputable schools because their parents got them the plan while they were young. Young mothers were able to hurdle the problems of the death of their husbands because they left some insurance money for them and their children. Expenses for houses or cars are being minimized because of insurance money in times of accidents and calamities. Moreover, in times of sickness and hospitalization, some people are assured they will be taken cared for by the hospital and their loved ones because they have the money to spend through insurance.

Under Circular Letter 2015-27, issued by then-IC Commissioner Emmanuel F. Dooc, preneed companies are mandated to enlist as members of the Pre-Need Federation to help strengthen the industry and promote cooperation and discipline among the members.

“To promote the interest of the preneed industry and foster cooperation, discipline and harmony among preneed companies, this commission hereby directs all preneed companies authorized to transact business in

the country and those intending to do preneed business to become a member of the Pre-Need Federation,” the circular said. Membership in the Pre-Need Federation was made a requirement for the issuance or renewal of a certificate of authority to do business and issued only by the IC. According to Elmer M. Lorica, top honcho at the Philippine Federa-

tion of Pre-Need Plan Cos. Inc. (PreNeed Federation), pre-need is a multibillion industry despite the handful players. And to rev up membership and promote camaraderie among its members, the Federation celebrates yearly. The celebration also aims to foster a bond of unity among member companies and promote the pre-need concept of preparation and planning as

a way to a better future.

The federation held its 17th Preneed Consciousness Week on February 6-9, 2018, with the theme is “Preneed: Kabalikat ng Bawat Pilipino.”

Highlighting the 3-day affair were the Thanksgiving Mass at Greenbelt Chapel, a bowling tournament at SM Megamall and the group’s Forum & Fellowship at Edsa Shangri-la Hotel.

A8

Friday, February 9, 2018

The World BusinessMirror

Senate leaders reach deal to raise spending for 2 yrs

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ASHINGTON—Senate leaders struck a far-reaching bipartisan agreement on Wednesday that would add hundreds of billions of dollars to military and domestic programs over the next two years while raising the federal debt limit, moving to end the cycle of fiscal showdowns that have roiled the Capitol.

The accord between Sens. Mitch McConnell of Kentucky, the majority leader, and Chuck Schumer of New York, his Democratic counterpart, would raise strict caps on military and domestic spending that were imposed in 2011 as part of a deal with then-President Barack Obama that was once seen as a key triumph for Republicans in Congress.

The deal would raise the spending caps by about $300 billion over two years. The limit on military spending would be increased by $80 billion in the current fiscal year and $85 billion in the next year, which begins on October 1.

T he l i m it o n no nd e fe n s e spending would increase by $63 billion this year and $68 billion next year.

But the accord was not without dramatics. Rep. Nancy Pelosi of California, the House Democratic leader, took the House floor on Wednesday morning in opposition, protesting that the deal did nothing to bring lawmakers closer to protecting young immigrants brought to the country illegally as children.

She then delivered a recordbreaking speech that tied up the House for the entire day and into the night.

$300B The estimated increase in spending caps for over two years The budget agreement, coming a day after President Donald J. Trump threatened to shut down the government, would effectively negate Trump’s demands to broadly reorder government with deep cuts to nondefense programs like env ironmental protection, foreign aid and health research that were to offset large increases in military spending.

Trump is to release his second budget request on Monday, but the deal—championed by the top congressional leaders from his own party—amounts to an unequivocal rebuke of many of the budgetary demands he has put forth.

The deal would give Trump bragging rights for a major military. “The bottom line is that, thanks to President Trump, we can now have the strongest military we

Defense Secretary Jim Mattis speaks to reporters during the daily briefing at the White House in Washington on February 7. Tom Brenner/The New York Times

have ever had,” the White House press secretary, Sarah Huckabee Sanders, said on Wednesday.

At least for now, it could put an end to the fiscal crises Trump has at times seemed to welcome.

Nonetheless, the president threw his weight behind the accord on Wednesday evening, writing on Twitter, “Republicans and Democrats must support our troops and support this Bill!”

If the deal passes on Thursday, lawmakers would then put together a long-term spending package over the coming weeks that would fund the government through September, granting a measure of peace to Washington as attention turns to the midterm elections in November.

Heading into the midter m elections, it would also enable lawmakers to go home and claim success at delivering funding for pressing needs, like fighting the opioid epidemic.

By setting overall spending levels through September 2019, the deal would ease passage of spending legislation in the next fiscal year, as well.

The agreement will cause federal budget deficits to grow even larger, on top of the effects of the sweeping tax overhaul that law-

makers approved last December.

But because the deal gives longsought victories to both parties, the deficit effect appears to be of little concern. Defense Secretary Jim Mattis and Speaker Paul Ryan of Wisconsin both quickly embraced it.

From the increase in domestic spending, Schumer said the deal includes $20 billion for infrastructure, $6 billion for the opioid crisis and mental health, $5.8 billion for child care and $4 billion for Veterans Affairs hospitals and clinics. It also includes almost $90 billion in disaster relief in response to last year’s hurricanes and wildfires.

The agreement includes an additional four-year extension of funding for the Children’s Health Insurance Program, on top of the six-year extension that Congress approved last month.

T he dea l a lso extends the debt limit until March 2019, pushing any future confrontation over that issue until after the midterm elections. The Congressional Budget Office recently projected that the Treasur y would probably run out of cash in the first half of March if the limit were not raised.

New York Times News Service

Workers try to shore up tilted buildings after Taiwan quake

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UALIEN, Taiwan—Workers placed steel beams to stabilize a dangerously tilted building, while rescuers on the other side try to pull survivors from their residences on Thursday morning, more than a day after a deadly quake shook Taiwan’s east coast.

The Yunmen Tsuiti building was one of several damaged by late Tuesday’s 6.4-magnitude quake.

At least four midsized buildings in worst-hit Hualien county leaned at sharp angles, their lowest f loors crushed into mangled heaps of concrete, glass, iron and other debris. Firefighters climbed ladders hoisted against windows to reach residents inside apartments.

The National Fire Agency reported on Thursday that death toll had risen to 10 people. More than 260 people were injured and 58 were unaccounted for. At least three of the dead were tourists from the mainland, Chinese state broadcaster CCTV reported.

Japan’s Foreign Ministry said nine Japanese were among the injured. Six mainland Chinese were also injured, the Chinese Communist Party-run People’s Daily reported.

President Tsai Ing-wen reassured the public every effort would be made to rescue survivors.

On her Facebook page, Tsai said she “ordered search-and-rescue workers not to give up on any opportunity to save people, while keeping their own safety in mind.”

A rescuer looks at a broken pillar during a search operation at an apartment building that collapsed after a strong earthquake in Hualien County, eastern Taiwan, on Thursday. A 6.4-magnitude earthquake that struck late that Tuesday night caused several buildings to cave in and tilt dangerously. AP/Chiang Ying-ying

At the Yunmen Tsuiti building, clothes and other personal items were visible on the balconies as the rescue work continued.

The shifting of the buildings was likely caused by soil liquefaction, when the ground loses its solidity under stress, such as the shaking of an earthquake.

The quake also buckled roads and disrupted electricity and

water supplies to thousands of households.

Japan’s Chief Cabinet Secretary Yoshihide Suga said his country was dispatching a rescue team to help in the search effort.

Ta iwan has f requent ear t hqu a kes due to its posit ion a long t he “R ing of Fire,” t he seismic fau lts encirc ling t he Pacif ic Ocean where most of

the world ’s earthquakes occur.

A quake two years ago collapsed an apartment complex in southern Taiwan, killing 115 people.

Five people involved in the construction of the complex were found guilty of negligence and given prison sentences.

A 7.6-magnitude quake in central Taiwan killed more than 2,300 people in 1999. AP

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Merkel, SPD finally enter a deal

A

fter fou r mont h s of brinkmanship with her Social Democratic frenemies, Chancellor Angela Merkel finally has a coalition agreement.

But the cost of the deal is high, strengthening the Social Democratic Party’s (SPD) hand in pursuing European integration and signaling the German chancellor’s limits as Europe’s de-facto leader.

In a marathon, 24-hour session at the headquarters of Merkel’s C hr ist i a n Democ rat ic Un ion (CDU) alongside a tree-lined canal in central Berlin, the chancellor handed key Cabinet posts to the SPD, including the finance ministry her party has held for the last eight years.

Merkel, 63, ac k nowledged a f ter w a rd t h at Wed nesd ay ’s endgame to unlock her fourth term required concessions that “weren’t exactly easy.” They were required, though, as prizes for the Socia l Democrats, whose members now have the final vote on another stint as her junior partner in government.

“The SPD got their wish list,” said Holger Schmieding, chief economist at Berenberg bank in London. “This government will have an even clearer Social Democrat stamp than the former grand coalition did.”

Finance ministry?

Hamburg Mayor Olaf Scholz, a centrist Social Democrat who’s no darling of the party’s left, is being tipped to run finance, according to German media reports. Social Democrats’ boss Martin Schulz, who last year led the party to its worst national election result since World War II, looks headed for the Foreign Ministry. They’ll have a platform to fulfill the party’s pledges to deepen euro-area cooperation.

Most of the final stretch of talks involved high-stakes bargaining between Merkel and Schulz over Cabinet posts, with Social Democratic demands, including the

finance and foreign ministries, according to a CDU official who asked not to be identified.

The result is a boost for French President Emmanuel Macron’s campaign for a joint budget and a common finance minister for the 19 countries that use the euro.

While Merkel has welcomed the idea of deeper integration among European Union states to raise the bloc’s global profile, she has been noncommittal about ceding more financial control.

SPD ballot

For her part, Merkel got a coalition deal after a failed first attempt last November. If it’s approved by Social Democratic members, she can keep governing from the political center with a partner she knows well.

“I think the coalition agreement that we’ve assembled can be exactly this: the basis of a good and stable government that our country needs and that many in the world expect from us,” Merkel told reporters.

A day after a wage deal between employers and IG Metall, Ger many’s big gest industr ia l union, Merkel ’s breakthrough toward a new government signals that the country’s consensual system of politics and labor relations still has legs.

The coalition deal must be approved by the Social Democ rats’ 4 63,0 0 0 ra n k-a nd-f i le members, many of whom bristle at the prospect of enabling yet another star turn for Merkel in Germany and abroad.

Schulz, though, will be able to claim he played a losing hand into a position of strength that belies his party’s decline at the polls.

Merkel will need to rally her base around an agreement that’ll look like a black eye to conservatives in her CDU-led party bloc.

While no one is openly challenging her leadership, some in her party voiced dissatisfaction.

Bloomberg News

Pence pouring cold water on warming ties of 2 Koreas

Y

OKO TA A I R B A SE , Japan—United States Vice P r e s i d e n t M i k e Pe n c e is pouring cold water on the war ming ties bet ween North and South Korea just as the two still-warring countries are joining up to compete together in the Winter Olympics.

Making his way to Pyeongchang to lead the US delegation to Friday’s opening ceremonies, Pence has embarked on a set of symbolic visits designed to draw attention to the North’s terrible humanrights record and nuclear aggression. With determined rhetoric— and the promise of more “aggressive” economic sanctions against the North—Pence is looking to refocus American allies on the North Korean threat.

“We will not allow North Korea to hide behind the Olympic banner the reality that they enslave their people and threaten the wider region,” Pence said on Wednesday after meetings with Japanese Prime Minister Shinzo Abe in Tokyo.

Pence arrived in Seoul on Thursday for meetings with President Moon Jae-in just as South Korea seizes on the games for a diplomatic opening with the North, including the first visit of North Korea’s ruling family since the end of the 1950-1953 Korean War. Aides say the vice president is advancing a counter message, using the games as an opportunity for the South and the broader international community to exert what President Donald J. Trump has termed “maximum pressure” against the North.

Before departing for Korea, Pence announced that the US would unveil in coming days “the

toughest and most aggressive round of economic sanctions on North Korea ever.”

He also ratcheted up his rhetoric on the North’s human-rights abuses in a speech to US service members at Yokota Air Base in Japan. “As we speak, an estimated 100,000 North Korean citizens labor in modern-day gulags,” Pence said on Thursday before departing Japan. “Those who dare raise their voices in dissent are imprisoned, tortured and even murdered, and their children and grandchildren are routinely punished for their family’s sins against the state.”

Pence toured joint US and Japanese operations centers at the United States base that monitor and react to crises on the peninsula and the region at large. He told troops to “be vigilant,” warning against falling for the North’s diplomatic overtures. “We are ready for every eventuality,” he added.

Pence’s strenuous efforts to highlight the threat from the North and its treatment of its people present a dilemma for Moon. The South Korean leader has long advocated engagement with Pyongyang and sees the Olympics as an opportunity to quell tensions that have escalated over its nuclear program. He has limited room to maneuver as his guest from Washington strongly criticizes the North and emphasizes the need to crank up the pressure campaign.

US officials declined to offer details on the expected new sanctions beyond Pence’s comments, citing concerns that any additiona l infor mation could be used by those trying to skirt the new measures. They are expected to be implemented before the conclusion of the games. AP

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Friday, February 9, 2018

A9

China January trade surges amid tension with US

B

EIJING — China’s ex por t growth accelerated in January, amid mounting trade tension with Washington, while imports surged as factories stocked up ahead of the Lunar New Year holiday.

Exports rose 11.1 percent compared with a year earlier to $200.5 billion, up from December’s 10.9-percent growth, trade data showed on Thursday.

Exports surged 36.9 percent to $180.1 billion, up from the previous month’s 4.5 percent. China’s politically sensitive trade surplus with the United States widened by 2.3 percent from a year ago to $21.9 billion, while its global trade gap narrowed by 60 percent to $20.3 billion.

“Export growth remained robust in January, indicating steady global demand momentum,” Louis Kuijs of Oxford Economics said in a report.

“While we expect the favorable external setting to continue to support China’s exports, rising US-China trade friction remains a key risk,” Kuijs said.

“We expect the US administration to scale up on measures impeding imports from China.”

Beijing’s steady accumulation of multibillion-dollar trade surpluses with the United States has prompted demands for import controls.

President Donald J. Trump’s administration has increased duties on Chinesemade washing machines, solar modules and other goods it says are being sold at improperly low prices. It is due to announce results of a probe into whether Beijing improperly pressures foreign companies to hand over technology, which could lead to further penalties.

Exports to the United States rose 12.1 percent in January from the same time last year to $37.6 billion, while imports of US goods rose 26.5 percent to $15.7 billion, according to the General Administration of Customs of China.

Exports to the European Union, China’s biggest trading partner, rose 11.6 percent to $33.7 billion, while purchases of European goods rose 44.4 percent to $23.8 billion.

China reported a $9.9-billion trade surplus with the EU but that was down 29.8 percent from a year earlier.

Chinese authorities have accused Trump of threatening the global trade regulation system by taking action under US law, instead of through the World Trade Organization (WTO).

Beijing has filed a challenge in the W TO against Washington’s latest trade measures.

“We oppose this unilateralism and protectionist approach and hope the United States will deal with it prudently,” said a Ministry of Commerce spokesman, Gao Feng, at a regular news briefing on Thursday. Beijing announced an antidumping investigation last weekend of US sorghum exports.

In response to suggestions the move was retaliation for Trump’s increase tariffs, Chinese government spokesmen say

it is a normal regulatory step.

“I emphasize this is a normal case of trade remedies,” Gao said.

“We will carry out trade-remedy practice strictly in accordance with the WTO rules and China’s relevant laws,” he said.

“We also hope that WTO members concerned will abide by international rules and properly resolve their economic and trade differences through dialogue and cooperation.”

January’s import growth was driven in part by demand from factories that are restocking before shutting down for the two-week holiday. Each year, the holiday falls at different times in January or February, distorting trade data.

Forecasters expect Chinese demand to weaken this year as Beijing tightens controls on lending to slow a rise in debt.

That is a blow to its Asian neighbors, for which China is the biggest export market, and for suppliers of iron ore and other commodities, such as Brazil and Australia.

“While we still expect import growth to cool this year, after the rapid expansion in 2017, we do not expect a sharp slowdown,” Kuijs said. “Key downside risks to domestic demand stem from a more pronounced-than-expected impact of the planned financial tightening and slower real-estate activity.”

“High imports are related to base effects and rising commodities prices, which may give a lift to domestic inflation this year,” said Liao Qun, chief economist at China Citic Bank International Ltd. in Hong Kong. “Dollar-dominated oil prices rise as the dollar weakens, and the growth rose again when being converted into yuan terms.”

Trade friction will likely intensify this year, but a trade war is unlikely, according to UBS Group AG economists led by Wang Tao in Hong Kong.

“Targeted tariffs and restrictions may hurt related stocks or sectors, but the macro impact on China’s exports or GDP growth will be very small as a stronger global recovery helps to drive 2018 export growth,” she wrote.

“China imports more from the US than their shipments to the US. As the trade tension of the two biggest nations intensifies, this figure is timely,” said Raymond Yeung, chief greater China economist for Australia and New Zealand Banking Group Ltd. in Hong Kong.

“The Chinese side is expected to use this number to show their effort to narrow the trade gap.”

“More working days would definitely have an impact,” said Gai Xinzhe, an analyst at Bank of China’s research institute, referring to the holiday in January 2017. “Though the yuan is getting much stronger against the dollar, its overall rates against other currencies are relatively stable, which could explain why exports data are better than expected. Trade data in the first two months are extremely volatile and it’s better to look at the first quarter data for a better picture.” AP and Bloomberg News

EU forecasts stronger euro-area growth as Brexit risks remain

T

he euro-area economy will expand faster than previously anticipated this year and next, the European Commission said, though it offered little comfort to the region’s central bank, saying inflation is expected to remain subdued.

It sees expansion of 2.3 percent in 2018, up from 2.1 percent predicted last November and close to the decade-high rate reached in 2017. The 2019 forecast was upgraded to 2 percent—meaning the outlook is broadly in line with the most recent projections from the European Central Bank (ECB) and International Monetary Fund.

The rosier outlook reflects both stronger cyclical momentum in Europe, where labor markets continue to improve and economic sentiment is high, and a stronger-than-expected pickup in global trade, the commission said in the report published on Wednesday. The higher forecasts follow eurozone growth of 2.4 percent last year.

The commission also lifted its forecasts for the European Union excluding the United Kingdom, which is negotiating its exit from the bloc.

Growth is seen at 2.5 percent and 2.1 percent this year and next.

The UK will grow by 1.4 percent in 2018, slightly faster than previously projected, but still below the average for the region. After years tackling the financial crisis, the euro-area economy has racked up 19 straight quarters of

growth and surveys point to continued solid expansion. The momentum provides a further support for the currency union after a critical elec toral year that saw anti-EU populists defeated in a series of key votes, and comes as the bloc seeks to strengthen itself in order to be better shielded from future turmoil.

“Europe’s economy has entered 2018 in robust health,” said Pierre Moscovici, the EU’s economic affairs commissioner. “Growth is also more balanced than it was a decade ago.”

In further good news for the region, German Chancellor Angela Merkel’s bloc concluded a coalition agreement with the Social Democratic Party on Wednesday, ending a four-month stalemate in Europe’s largest economy.

Even with political risks subsiding, the EU is still trying to deal with US President Donald J. Trump’s more-protectionist trade stance, while Brexit presents another source of uncertainty.

The forecasts also come after a global rout that rattled markets in recent days. Wednesday saw a small rebound in European stocks, but markets remain on edge, and a sustained slump could damage confidence and global growth.

The volatility comes at a particularly sensitive time for the ECB, as policy-makers try to judge whether they can end their bond-buying program.

Bloomberg News

A10 Friday, February 9, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

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editorial

Ignorant Filipinos?

T

he headlines read something like “Filipinos 3rd ‘most ignorant’ country on key national issues” and, of course, the discussions started based only on the headlines. The initial reaction of many was, “Look how stupid Filipinos are”, showing their own ignorance by not having any idea of the definition of “ignorance” or what the survey was actually about.

The survey was conducted by the Ipsos Group, a global market research and a consulting firm with headquarters in Paris, France.

The title is the Perils of Perception and examines the perceptions people have versus the reality of the facts. The old idea that “perception is reality” is wrong. But ignorance—not knowing—of the facts can sway people into accepting ineffective national policies and may give a false impression of their own country.

People were asked what they believed about other people. For example, one question was, “Out of every 100 people aged 20-79 in your country, about how many do you think have diabetes?”

Filipinos perceived that 45 percent of the people suffered from diabetes. The actual number is much lower at about 7 percent. The survey results showed that people in every country overestimate the extent of diabetes in their own country, with some thinking nearly half of their population have this health condition.

“Out of every 100 deaths of women and girls aged 15 to 24, about how many do you think were by suicide?” Here again Filipinos missed the reality by a wide margin, saying 20 percent when the actual number is less than 4 percent. Filipinos also assumed that 86 percent of the country owns a smartphone, but the actual percentage is closer to 30 percent. We also think everyone owns an automobile (61 percent), when actual ownership is less than 10 percent.

Ninety-four percent of Filipinos “say they believe in heaven,” even as the perception is that only 82 percent actually do look to an afterlife paradise.

You can search the numbers on these issues of national importance yourself at https://www.ipsos.com.

The countries that had the most accurate perceptions of their country were Sweden, Norway and Denmark. The least accurate were South Africa, India and the Philippines. But this is the most interesting, maybe bizarre, aspect of the survey. “Despite being among the least accurate, respondents in India, the Philippines and Peru are among the most confident in their answers. In contrast, Norway, Germany and Sweden come out among the most accurate in the Index, but are among the least confident in their answers.”

Ipsos does not offer any explanation for this result.

Are Filipino perceptions sometimes far removed from the reality? Absolutely. Are Filipinos overconfident about the accuracy of their perceptions? Obviously. Perhaps, though, this has more to do with 100 million Filipinos of huge disparity of wealth, education and access to reliable information spread over thousands of islands, rather than “stupid” as the Filipino bashers want us to believe. Their perception is wrong.

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‘Matino, mahusay, maaasahan’ James Jimenez

spox

I

T looks like the barangay and Sangguniang Kabataan elections are finally going to take place. Earlier this week, Interior and Local Government Undersecretary for Barangay Affairs Martin Diño unequivocally declared “tuloy na tuloy na.” Although technically speaking, neither the Department of the Interior and Local Government (DILG) nor the Commission on Elections (Comelec) can actually give that guarantee—the matter simply isn’t up to either institution to decide on—I expect that he has a better grasp of the political side of the question, so I’m going to take his word for it—the 2018 barangay and Sangguniang Kabataan elections are on.

Interestingly, the most immediate beneficiaries of that announcement, as it turns out, are the barangays themselves. Almost on cue, the communities I pass through on my morning commute are looking a bit more bustling, with people in officiallooking matching outfits sweeping streets or standing in the middle of the street, waving their arms around in what can only be described as a futile attempt at Jedi mind-tricking traffic away. I would give them an “A” for effort, if only I could forget their

palpable absence when their cozy jobs weren’t on the line.

Which is why I’m particularly glad that the DILG’s announcement of the elections pushing through was accompanied by the announcement of its initiative to encourage voters to choose candidates who are “matino, mahusay, at maaasahan”— that is to say, upstanding, competent and reliable (on an interesting but possibly irrelevant note, of those three attributes, only maaasahan has a direct English translation; matino

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Alvin P. Ang

EAGLE WATCH

T

he announcement of the 4-percent inflation for January was much higher than anticipated. Our own forecast conservatively puts it to about 3.4 percent representing a modest increase from December and already taking into consideration the initial impact of the Tax Reform for Acceleration and Inclusion (TRAIN) Law. In our previous column two weeks ago, we cited the Department of Finance (DOF) maximum estimated impact of adding about 1 percent for the full-year average. Our own initial estimates show that TRAIN impact will add more than 1 percent to average inflation rate and that full impact would come in around April to July, where we see it going beyond 4 percent and then gradually going back to the 3.2-percent to 3.6-percent range toward the end of the year.

The higher-than-expected increase comes at a time of global market corrections led by the biggest one day drop of the DOW last week. The trigger of the global correction is also inflation. The US added much larger wage jobs than expected, raising interest rates spread. The Philippines, as one of the preferred emerging markets for foreign equity funds, also suffered a huge correction in the last three days. In our previous column, we talked about two major sources of inflation: cost push and demand pull.

Cost push is due to higher cost of production that can come from different policies and doing-business activities, while demand-pull is due to rising income, which can cause people to buy or demand more goods/services than what is available. The US and the developed economies were spooked by the latter. The developed countries are now growing consistently showing that they have fully recovered from the 2008-2009 global financial crisis. Similar to a car, a strong growth that triggers a larger-than-expected

I’m particularly glad that the DILG’s announcement of the elections pushing through was accompanied by the announcement of its initiative to encourage voters to choose candidates who are “matino, mahusay, at maaasahan” —that is to say, upstanding, competent and reliable. and mahusay have multiple English equivalents depending on the context). I don’t see anyone disagreeing with those general criteria.

The undersecretary devoted quite a bit of time explaining that the initiative wasn’t an attempt to dictate upon the voters who they should vote for, and I have to agree. This prescriptivist approach isn’t new or unique to the DILG. The difference, however, is that the DILG’s criteria should not be seen as mere suggestions for voters to consider, but as a warning to potential candidates to take a long, hard and honest look at themselves to see if they’re up to standard. As far as the former goes, the DILG really can’t do anything if the voters ignore the suggested criteria; but as to the candidates, when someone with power “suggests” that you be a certain way, it does carry the subtext that it may not be

From the data, inflation has increased faster because the passthrough effects on food were higher.

This is not due to low production, as agriculture continued to post higher growth even during the fourth quarter of 2017. Likewise, demand-pull impact was much higher as people with more purchasing power now preferred eating out. demand pull due to more jobs created can lead to overheating. We also talked about a third force in inflation called expectations. Expectations can have higher impact because it can cause herd behavior change. This is when people’s anticipation becomes larger than reality and so lead to unexpected outcomes.

In this latest inflation reports, we have reviewed our numbers and our assumptions on how TRAIN will impact prices for the rest of the year and beyond. We already imputed in our earlier forecasts the demand-pull impact, which is about P13 billion a month created by the tax cuts. Similarly, the cost-push impact was conservatively imputed affecting mainly the sin taxes, oil products and a pass through for the rest. The increases actually came from these, but the increases were much larger in the sin products, where the month-onmonth increase was 5 percent. In the pass-through particularly for food,

in your best interest to ignore the recommendation.

This is a subtle shift in the political dynamic that, to be honest, I didn’t really expect to see. But it is, to me, a welcome development in that it mirrors the Comelec’s own thinking when it tightened up enforcement of the rule on the submission of Statements of Contributions and Expenditures (Soce) beginning 2013. In enforcing the Soce rule, the Comelec relies heavily on the fact that the DILG has a measure of supervision and control over locally elected officials—including barangay officials—calling on it to flex its regulatory muscle by preventing the assumption of office of those who failed to turn in their Soces.

Following the same logical underpinnings of that Comelec strategy, the DILG now sends the signal that elected barangay officials who end up not meeting the standard of matino, mahusay at maaasahan might find themselves on the receiving end of sanctions. The prescription, in effect, reminds voters that their votes have consequence and urges them to think twice about the choices they make, and not be easily swayed by the pre-election blandishments of the candidates.

the increase was 1 percent. But since food comprises about half of the inflation basket, it easily pull up the rest.

Contrary to perception, the increases in food prices were not similar across the board. Rice and bread increased according to estimates, but fish, cooking oil, fruits and vegetables recorded much higher than past months. Likewise, eating out represented by restaurant inflation already posted large increases. This is significant because eating out is about 12 percent of total inflation. Inflation for this group increase by 3.7 percent as compared to the annual average of only 2.2 percent for 2017.

From the data, inflation has increased faster because the passthrough effects on food were higher.

This is not due to low production, as agriculture continued to post higher growth even during the fourth quarter of 2017. Likewise, demand-pull impact was much higher as people with more purchasing power now preferred eating out. Because of this, we have rerun our numbers and we are seeing that inflation will now average about 4.5 percent for the year.

This means that we will not see it go back below 4 percent for the rest of the year. This, considering that full impact will have been absorbed by the economy by the second quarter of this year. We also take into account that all government workers will See “Eagle Watch,” A11

Opinion BusinessMirror

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The changing wealth of nations

When does grief come?

Tito Genova Valiente

annotations Edgardo J. Angara Continued from A1

U

sing this framework, the World Bank found that global wealth has, in fact, significantly grown between 1995 and 2014. Middle-income countries, specifically those going through rapid growth in Asia, were mainly responsible for this explosion of wealth.

Unfortunately, wealth per capita did not grow during this period, pointing again to the persistent global problem of inequality. In fact, several low-income countries, mostly in Sub-Saharan Africa, experienced declines in their wealth per capita.

The report further found that in all countries, human capital—measured as a person’s projected earnings throughout their lifetime—is the “most important component to wealth globally.”

Hence, a wise leader will and must pour more money into human capital development—training, retraining in new skills, research and development, information and communications technology—to provide solutions to social and ecological problems. Japan achieved first-world

class status because the Japanese working class acquired and imbibed a culture of learning, despite Japan’s sparse natural wealth.

But a country’s true economic well-being lies in its natural endowments, with its growth coming from the sustainable development of these endowments. If its forests, rivers and lakes, and mineral and precious gems are gone—or used irresponsibly, then a country would have deprived itself of the sources of its future growth. Yes, its population will continue to increase. But its capacity to feed, teach and shelter them is disabled if it does not manage its natural wealth sustainably.

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Caritas Manila to launch ‘Alay Kapwa 40 for 40’ campaign Rev. Fr. Antonio Cecilio T. Pascual

SERVANT LEADER

A

S response to the situation of Mayon Volcano in the province of Albay, for the internally displaced people (IDP) of Lanao del Sur due to the Marawi siege, and other disasters and emergencies, and fulfill our principle “daig ng maagap ang sakit at sakuna”, we in Caritas Manila are extending our effort to assist and help many affected people through our “Alay Kapwa 40 for 40” campaign beginning on Ash Wednesday, February 14.

During the 40 days of Lent from Ash Wednesday to Holy Saturday, we are encouraging the Catholic faithful to abstain from certain food, habits, luxuries, or undertake physical sacrifices. In turn, from these things that one has given up, one can save at least P40 a day and support the Alay Kapwa 40 for 40 campaign.

The campaign is part of “Alay Kapwa,” the annual Lenten evangelization and fund-raising program of the Church for social services of the poor and most in need, especially during times of disaster. It aims to raise awareness and funds that will be used to provide immediate help during times of emergencies through

Eagle Watch. . . continued from A10

receive further salary increases due to SSL III and this will add to demandpull. Likewise, public transportation and electricity rates have not yet adjusted their rates and they could put more pressure on overall prices. This will make the Bangko Sentral ng Pilipinas adjust rates faster and possibly higher than 1 percent this year (the Monetary Board should have made a decision by this time, as this was written before their meeting).

The higher than expected impact of TRAIN may have to do more with expectations than actual passthrough rates as estimated. As we have pointed out in our Eagle Watch

Caritas Damayan, the Preventive Health and Disaster Management program of Caritas Manila.

Pledges and inspiring stories of Lenten sacrifices will be acknowledged in the Good Samaritan program of Radio Veritas airing Monday to Friday from 1 p.m. to 3 p.m.

To know more about the Alay Kapwa 40 for 40 campaign and other means to support Caritas Manila, please call 254-5519 or 562-0020 to 25.

To know more about Caritas Manila, visit or follow us on Facebook: CaritasManilaInc. For your donations, please call our DonorCare lines 563-9311, 564-0205, 0999-7943455, 0905-4285001 and 0929-8343857.

briefing on January 25, inflation expectations are like “self-fulfilling prophecies.” In the recent days, media has been talking about the lack of NFA rice in some Metro Manila markets. As this is seen on national TV, the impression is now there is lack of rice in general.

The herd behavior can naturally lead to higher demand not much different than the one we saw in 2008 when we had double-digit inflation due to rice. The latest report shows we have good agricultural production in 2017 and rice prices have not gone up significantly this January 2018.

The government, the private sector and the buying public should work together to tame inflation expectations if we want the TRAIN to run its course for everybody’s benefit.

I

t has been six months since my mother has passed on. On the last day of January, I noticed, on my way out, that the cluster of orchids—different varieties bundled up in a small forest of dry woods and leaves—had two blooms. One was purple with a persistence of pink hidden beneath the petals; the other was light brown and yellow.

She must be happy where she is, I assured myself.

Each morning, I would check on the orchids. It is true what they say, orchids, for all their delicate appearance, can survive tough weather.

Lately, the nights and days had been cold and, out there at the porch, the two clusters braved the chill and the solitude, or so I imagined.

On the first day of February the sun came out and dappled the plants.

The two blooms were in their peaks: The purple had turned violet and with the orange and yellow, burnt red had taken over.

I will bring the flowers to my mother’s grave. The thought, oddly, made me sad. Alone in the house, I was nearly crying. This is good, I told myself. I had not grieved yet for my mother. Things were fast. Death is always fast. It comes and takes away life, that sole agent which makes the thinking of passing possible.

Grieving, in my book, requires strong tears. It demands, and this need not be for the public to see, that one cries so much the eyes, the chest—the heart if you please—are hit by the deepest of pains, the kind that slashes across a space you never thought is there between your head and your guts.

I should have this grieving.

The day of grieving arrived, or so I thought. It was morning, the second day of February. The sun was out but pale. I found myself in the memorial park with the purple orchids in my hand. I was certain where they were. Soon I was

standing in front of the markers.

The wind was strong. My eyes were dry. My heart was empty. I was waiting for something to overcome me but I just kept looking around, taking in the sight of the greenest of grasses. The ground below me was so still I could sense tiny grasses creeping up. The birds were there, the insects, I am sure, were making their own histories with the rotting

Friday, February 9, 2018 A11

Grieving is remembering each day, for a second or a minute, all of them. Grieving is when you do not have to assure yourself you will forget. There is no need to cry, no need to be in pain, but just to remember.

Remembering, remembering, just remembering. twigs. The day was ordinary. The day, in fact, passed on.

That evening at the porch, Leona, the youngest of the family, she who had declared herself a princess, looked at us and asked, where were the flowers? She was talking of the purple ones. I took them to your Lola Lily. She looked at us. I cut them and took them to your Lola Lily. Do not do that, Leona said, the flowers will cry.

I know now what grieving is all about. It is grieving when you, with determination, cut a flower so gently, so you could offer it to departed

The taming of a demagogue

By Ross Douthat

New York Times News Service

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ecent political history has offered few spectacles more depressing than the acquiescence of leading Republican politicians to the rise of Donald J. Trump. The selection of a nominee for president is an act of moral gravity, and party elites have an obligation to resist and exclude figures who are ethically and temperamentally unfit to wield the presidency’s powers. That so many Republicans, while obviously believing Trump unfit on both counts, followed strategic failure with moral abdication and essentially shrugged at his ascent was an indictment of their leadership and a reason to root for their defeat.

I am less persuaded, however, by the argument that what leading Republicans have done since Donald Trump was elected president has been somehow more disastrous and morally culpable than their original surrender, and that conservatives who declined to vote for Trump but otherwise still voted Republican in 2016 should look at what’s happened since and begin voting lock step for the Democrats.

You hear this argument implied by liberals of all stripes, but it’s brought to a sharp point in The Atlantic this month by Ben Wittes and Jonathan Rauch, both writers who generally deserve the label “centrist.” Urging a “boycott” of the GOP, they write that “the Republican Party, as an institution, has become a danger to the rule of law and the integrity of our democracy,” and that it therefore makes sense not only for swing voters but even for principled conservatives to cast ballots for the Democrats at every

level until the danger of Trumpist authoritarianism has passed.

As a conservative who opposed Trump, attacked the party for nominating him, argued that he could reasonably be removed from office for unfitness and generally regards the GOP as a broken vehicle for serious policy-making, I am pretty close to the target audience for the Rauch and Wittes argument. So let me explain why—for now—I think their case falls short.

Basically, Republican politicians who accommodated themselves to Trump during the 2016 campaign offered the following reassurance to their more Trump-wary voters: “Vote for us, and we will contain him.” Yes, the Republican nominee indulged in wildly irresponsible and authoritarian rhetoric; yes, if he followed through on many of his promises, various disasters could ensue. But “vote for us, and we will contain him.”

There were good reasons to be skeptical of this promise. The presidency’s powers (over foreign policy especially) have waxed as Congress’s have waned, the bully pulpit belongs to the White House, and since Trump’s populist ideas on economics were more popular than the existing Republican agenda, it was easy to see how he could roll over efforts at containment.

But a year later, the project of containment has been much more successful than its critics feared. Here is a short list of moves—some authoritarian, some just destabilizing—that Trump promised or threatened during the campaign: reinstating waterboarding and allowing torture, even over military objections; shaking up North Atlantic Treaty Organization and striking a deal that abandons American allies to a Russian sphere of

influence; pulling the United States out of North American Free Trade Agreement; changing libel laws to make it easier to bankrupt his critics in the press; launching a major trade war with China; pulling the US out of the Iranian nuclear deal; installing cronies and relatives in high judicial posts; banning Muslim entry to the United States; and deporting millions of illegal immigrants in an enormous sweep.

A year later none of these things have happened; few have even been meaningfully attempted. In almost every case the establishment Republicans crowding his Cabinet or influencing him from the Senate have had a gentling or restraining (or, from an alt-right perspective, cucking) effect upon Trump’s presidency. You could argue, if you squint, that versions of the last two policies have been pursued—but even there the case is weak, the Trump administration’s behavior less than authoritarian. The travel ban the White House put forward affected a small fraction of the world’s Muslims and has been easily impeded in the courts. Likewise, interior immigration enforcement has become more aggressive and punitive than under Barack Obama—but this increase in arrests has already run into a bureaucratic and judicial backlog that will make mass deportation impossible unless Trump actually short-circuits the judicial process...which, to date, he conspicuously has not.

So for the kind of Atlantic-reading, Whole Foods-shopping, Trumpskeptical Republican whom Wittes and Rauch are addressing, the trend in Trumpian policy offers considerable evidence that their elected representatives’ promise to constrain the president’s actions (if not his words) is actually being kept.

mother. It is not waiting for a windy day and on some precipice of emotions, you wait for sorrows to clutch you and raise you up to the heavens till the votive candles in your mind melt. Grieving is that gentility in your manners as you hold the flower so carefully as if they will die with the cold. Grieving is when you comb your hair in the morning and you remember a gentle mother. It is when you sip a coffee and a father’s propensity to memorize old poems crosses your mind. Grieving is even when you are about to drink beer and you think of a brother with his wild genius and the blues you shared with him.

Grieving is remembering each day, for a second or a minute, all of them. Grieving is when you do not have to assure yourself you will forget. There is no need to cry, no need to be in pain, but just to remember.

Remembering, remembering, just remembering.

E-mail: titovaliente@yahoo.com

So, too, with the specific cases that the Atlantic essay focuses on: Trump’s insouciance about Russian interference in the last presidential election, and his continuing attacks on law-enforcement professionals over the probe into his campaign’s possible involvement with that interference. Just consider the following caveat that Wittes and Rauch append to their brief: “We don’t mean to deny credit where it is due.... Last year pressure from individual Republicans seemed to discourage Trump from firing Attorney General Jeff Sessions and probably prevented action against Special Counsel Robert Mueller. Moreover, Republicans as a group have constrained Trump on occasion. Congress imposed tough sanctions on Russia over the president’s objections. The Senate Intelligence Committee conducted a serious Russia investigation under the leadership of Richard Burr. But the broader response to Trump’s behavior has been tolerant and, often, enabling.”

Now it’s quite true that other Republicans, especially in the House, have run interference for Trump’s attacks on Mueller’s probe, and encouraged rank-and-file conservatives and frequent “Hannity” viewers to believe the worst about the FBI and other “deep state” organs. But partisan attacks on a special counsel’s probe are not the same thing as a sustained presidential assault on democratic institutions. Nor are angry presidential tweets that lack any sustained follow-through: If the president yells about his persecutors and little or nothing happens—the Mueller probe continues, Rod Rosenstein keeps his job, etc.—what’s undermined is presidential authority, not the rule of law.

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DENR’s resort-to-resort inspection to pinpoint polluters of Boracay

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By Jonathan L. Mayuga

@jonlmayuga

he Department of Environment and Natural Resources (DENR) will conduct a house-to-house and resort-to-resort inspection to check the sewer connections on Boracay Island, the country’s top tourist destination, in Malay, Aklan.

This was disclosed by DENR Undersecretary for Policy, Planning, International Affairs and Foreign-Assisted Projects Jonas R. Leones following Secretary Roy A. Cimatu’s directive to crack down on erring establishments that are contributing to water pollution in Boracay.

The DENR is now closely coordinating with the Deptartment of Tourism (DOT) to identify establishments that are discharging their untreated wastewater directly to the sea, or illegally connecting to the drainage system of the DOT’s

Tourism Infrastructure and Enterprise Zone Authority (Tieza).

Leones said all tourism establishments on the island are required to connect to the sewage-treatment plant of the Boracay Island Water Co. (BIWC).

Instead of connecting to the BIWC treatment plant, Leones added, some establishments have reportedly tapped into Tieza’s drainage system, which is only intended for rainwater.

This, he said, is a clear violation of laws and policies, including the Clean Water Act.

LEONES: “With the huge number of establishments on the island, we have to trace the source and endpoint.”

The Tieza drainage pipes, he added , can only accommodate rainwater. “Wastewater should not be directed there,” he said, explaining that the pipes overflow and wastewater are discharged directly to Boracay beach.

According to Leones, the inspection of the establishments will determine which are illegally connected to the drainage pipes.

“With the huge number of establishments on the island, we have to trace the source and endpoint,” he said.

He added the DENR’s Environmental Management Bureau (EMB) is tasked to ensure that all industries comply with the effluent standards. “If these firms can manage their wastewater through good housekeeping, that will be

fine. But if they cannot, wastewater should be treated.”

A notice of violation will be issued against erring establishments, after which the owners or managers will be called to a technical conference. The violator will be given two months to address their violations. The EMB is also tasked to evaluate the violator’s compliance with corrective measures ordered by the DENR. If the issues were not addressed, the EMB can elevate the case to the Pollution Adjudication Board, with a recommendation to issue a cease-and-desist order against the violator.

Cimatu, who was tasked by President Duterte to act on the environmental problems besetting the top tourist destination, has issued a stern warning that he will not hesitate to close down establishments found to be releasing untreated wastewater and sewage into the beach.

“We need a serious and honestto-goodness crackdown on these erring establishments that are contributing to the water pollution in Boracay,” he said.

De Lima wants selection of third telco scrutinized

By Butch Fernandez

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Continued on A2

PHL HOTELS RECOGNIZED IN ASEAN TOURISM AWARDS

By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

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WENTY-TWO hotels and resorts from the Philippines recently won in the Asean Tourism Standards Awards.

A news statement from the Department of Tourism (DOT) said 11 of them were recognized for adhering to “green hotel” standards, making their operations friendly and sustainable to the environment, while another 11 were acknowledged as among the best MICE (Meetings Incentives Conventions Exhibitions) venues in the hotel category.

Representatives of the hotels and resorts received their respective awards during the Asean Tourism Forum (ATF), which was held in Chiang Mai, Thailand, from January 22 to 26. The ATF awarding ceremony was also attended by awardees from other Asean member-states, which were also nominated by their own respective national tourism offices.

The winners from the Philippines were later recognized in a local ceremony at the Diamond Hotel on January 31. In her keynote address, Tourism Undersecretary for Tourism Coordination and Resource Generation Alma Rita Jimenez commended the improving services of Philippine hotels, hailing them as assets in the country, and helping boost the local economy. “Our tourism partners like you are the backbone that make quality visitor experience tangible,” she said.

The Asean Green Hotel Awardees are Amorita Resort (Panglao, Bohol); Baguio Country Club (Baguio City); Bluewater Maribago Beach Resort (Lapu-Lapu City, Cebu); Conrad Manila (Pasay City); The Bellevue Resort Bohol (Doljo, Bohol); Bohol Beach Club Resort (Panglao); Crimson Resort and Spa Mactan (Mactan Island, Cebu); Fun-

dacion Pacita Batanes Nature Lodge (Basco, Batanes); Pangulasian Island Resort (El Nido, Palawan); P & I Resorts Inc.-Pulchra (San Fernando, Cebu); and The Manor at Camp John Hay (Baguio City).

Awardees in the Asean MICE Venue (Hotel Category) are: Conrad Manila; Radisson Blu Cebu; Crimson Hotel Filinvest City Manila (Alabang, Muntinlupa City); Waterfront Cebu City Hotel and Casino (Lahug); JPark Island Resort and Waterpark (LapuLapu City, Cebu); Diamond Hotel Philippines (Manila); Discovery Primea (Makati City); Baguio Country Club; Shangri-La Mactan Resort and Spa, Cebu (Lapu-Lapu City); The Bellevue Resort; and Quest Hotel and Conference Center in Cebu.

Meanwhile, Davao City, Pasig City, and San Carlos City, Negros Occidental, won awards for Asean Clean Tourist City, while the Asean Sustainable Tourism Award went to “Walk on the Wild Side” by Daluyon Beach and Mountain Resort, the Puerto Princesa Subterranean River National Park, the Community Park Warden Association and Sabang Sea Ferry Multi-Purpose Cooperative, the “Palina Greenbelt River Cruise Experience Along the Landscape of 3 Coastal Ecosystem Operated by a Fisherfolk Organization” by the Palina River Development Association Inc., the Roxas City local government unit, Pueblo de Panay (El Circulo Convention Center), Hotel Veronica, Las Islas Travel and Tours Ph Inc. and Cafe Pueblo.

The Asean member-states set up the Asean Tourism Standards awards to improve the standards of tourism service providers, helping them reach international hotel standards. The awards help Asean achieve its vision as a “Quality Single Destination.”

Preliminary data show there were some 125 million foreign visitor arrivals in 2017, up 8.4 percent from 2016. Visitor receipts last year amounted to $93 billion.

Labor groups to Duterte: Fulfill your promise

@butchfBM

en. Leila de Lima on Thursday filed Resolution 603 calling for a scrutiny of the selection process for the third telecommunications operator, as she voiced serious concern over President Duterte’s “apparent partiality to pick a telco firm from China.”

In a statement, the detained senator asser ted “a need for greater transparency in the selection process to ensure that all factors are considered, including the matter of national security, especially since the President has all but instructed the DICT [Department of Information and Communications Technology] to pick the Chinese telecom.”

“There must be a thorough congressional scrutiny to ensure that the entry of the new telco player will not jeopardize the security of our information and telecommunications infrastructure,” the senator stressed.

She rec a l led t hat Duter te had publicly announced last year he wanted a third telecommunications firm to be running within the first quarter of 2018 in a bid to force telco giants—Smart Communications and Globe Telecom— to improve their services.

De Lima noted that, although the Philippines has yet to choose between telecommunications operator from China, Japan, South Korea and Taiwan, Duterte had revealed his “biased preference” for China to be the country’s third telecommunications carrier.

The senator added that, so far, state-run China Telecom Corp. Ltd., KDDI Corp. of Japan, LG Uplus Corp. of South Korea and an unidentified

www.businessmirror.com.ph

Continued from A1

nutrition and livelihood partners The Department of Environment and Natural Resources and the Bureau of Soil and Waste Management join hands with Sen. Cynthia A. Villar at the launching of the Gulayan sa Gasangan (Edible Gardening) program and the planting of mangroves at a livelihood caravan in Baseco, Tondo, on Thursday. Villar, chairman of the Senate agriculture and food committee, believes that edible gardening is a simple but effective tool in helping solve two of the country’s challenges—poor nutrition and lack of livelihood. Villar has provided livelihood opportunities that improve the lives of people, particularly those in poor communities. Also in the photo is Metropolitan Manila Development Authority Chairman Danilo D. Lim. ROY DOMINGO

these issues [contractualization and regularization], we decided to unite. We should thank President Duterte for this,” TUCP President and Party-list Rep. Raymond C. Mendoza said.

On Wednesday Duterte met with labor leaders to discuss several labor issues, particularly the EO. He, however, deferred signing the EO so he could further study its possible impact on the economy.

The EO, which has been endorsed by the Department of Labor

and Employment (DOLE), is now being reviewed by the legal team of the President.

Duterte scheduled another meeting with the “study group” from the labor sector on March 15 to discuss a subsidy for minimumwage earners, the lowering of electricity rates and the EO. The TUCP said it will attend the meeting, but added that it will expect some “breakthrough” by March 15.

“There is a real cause for alarm that there is foot-dragging and it See “Labor groups,” A2

Duterte’s vow to abbreviate term raises eyebrows Continued from A1

Last month the House of Representatives passed a resolution to convene both chambers of Congress to draft changes to the country’s Constitution, which could still include an extension. “No dictatorship. No extension. I am ready to abbreviate my term,” Duterte said on Tuesday.

But his opponents don’t believe him.

Sen. Leila de Lima, Duterte’s staunchest critic who was jailed by his administration on drug charges, called on supporters to fight against the plan during a court appearance last month.

“He just wants to stay in power for many years more through federalism,” she said.

“We all have to be vigilant and not allow this sinister plan.” The Senate now must approve of the amendments before they are put to a public referendum among the country’s 109 million people spread across 7,000 islands. At its quickest, the amendment process will take

at least one year.

Under the proposal, as many as 13 new regional governments would take responsibility for planning, development, housing, hospitals, education, infrastructure, water supply and irrigation. Budget allocations for regional and local government would be constitutionally guaranteed at 60 percent of the national revenue share.

A prime minister would be elected by the national assembly and become head of government, with the authority to choose a Cabinet and responsibility for domestic and economic policy. The president would remain head of state, with power over defense, foreign policy and national security.

Foreign ownership

To win the business community’s support, members of Duterte’s ruling PDP Laban party lawmakers are also promising to scrap a constitutional provision capping foreign

ownership in some Philippine enterprises at 40 percent, a rule seen to have deterred investment in areas like telecommunications and even tourism.

“There is a reason that the Philippines attracts only a 4 percent share of the foreign direct investment into Asean,” said Eduardo Araral, a political economist at Singapore’s Lee Kuan Yew School of Public Policy who’s advising Duterte’s party on the proposal. The amendment could add one or two percentage points to economic growth “each year, every year,” he said.

Growth in the Philippines has been among the fastest in the region, staying above 6 percent since 2012. Advocates of lifting foreignownership restrictions have predicted a surge in investment and infrastructure spending outside central Manila and the surrounding areas, which produce around 62 percent of the country’s gross domestic product.

Around Asia, decentralization has seen

mixed success. Indonesia, which spread power and money across the archipelago after the fall of Suharto in 1998, saw a surge in graft cases.

“A shift to federalism is a lethal experiment,” former Justice Hilario Davide said at a Senate hearing. “The poor will become poorer.

Inevitably, the people will be burdened with more taxes of all kinds to support and maintain the federal bureaucracy.”

Potential nightmare

Duterte’s opponents aren’t the only ones raising concerns. Finance Secretary Carlos G. Dominguez III last month acknowledged challenges surrounding taxation and revenue sharing under federalism, telling business leaders “there’s a potential for it to become a nightmare.”

Much will depend on the final constitutional reform, especially the fiscal arrangements, said Alex Wolf, senior emerging markets economist at Aberdeen Standard Investments.

“Constitutional reform is not a magic wand that will reduce income inequality or reduce the power of political dynasties, but if done well and enough resources are paid to building successful local institutions, a shift toward federalism could decentralize power from Manila and increase economic competition,” he said.

And those regions of great economic activity—the capital region and Luzon—will guard against letting go of revenue, said Joey Cuyegkeng, an economist at ING Groep NV in Manila.

Even lawmakers who support Duterte are concerned that a new tier of regional governments could end up being taken over by already powerful provincial dynasties.

“Shifting to federalism may strengthen families’ hold on local government units,” Sen. JV Ejercito, the son of former President Joseph E. Estrada and an ally of the Duterte administration, said in an interview.“We cannot rush the process.” Bloomberg News