BMReports
Wanted: Filipino
game changers
By Rizal Raoul Reyes @rizreyes
Part One
I
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T’S oxygen to business. Innovation, according to executives polled by PriceWaterhouseCoopers (Pwc), has become a “competitive necessity” for companies. Innovation, the executives said, promises revenue growth. Of the 96 CEOs who participated in the PwC’s local survey, the majority (84 percent) believe innovation is key to their organization’s growth. For Antonio S. Yap, innovation is the key to further growing the Philippine economy. People are always in constant search for change, because people want to improve the old order, Yap, chairman of the Benita and Catalino Yap Foundation (BCYF), told the BusinessMirror. “The search for something better on a continuous basis is what defines individuals and organizations.” Yap’s belief led him to push for recognizing Filipinos who have wielded innovation in their businesses or their chosen fields of profession. Continued on A2
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Monday, February 13, 2017 Vol. 12 No. 124
Mine shutdowns worry PSE, future engineers $22B
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By Jonathan L. Mayuga & Catherine N. Pillas
The projected amount of mining investments that will be put on hold due to the DENR’s decision Philippine Stock Exchange (PSE) President and CEO Hans B. Sicat told reporters in a recent news briefing hosted by the Philippine Chamber of Commerce and Industry that the failure of the DENR to give advance notice to affected mining
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What is the legacy of PPPs? What is yours? PPP Lead
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he decision of the Department of Environment and Natural Resources (DENR) to padlock large-scale mines, particularly those that are publicly listed, could cause firms to incur losses and worsen unemployment in the country.
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W
HAT is a legacy? What is or what should be the legacy of public-private partnerships (PPPs)? What is yours? Merriam-Webster defines a legacy as something, such as property or money, that is received from someone who has died. Breaking down this definition, there is a material gift, not to oneself, and the giver must die. Impliedly, there is a beneficiary or recipient who has a relationship with the giver. Continued on A15
TOURISTS IN SURIGAO Govt urged to roll out tax-reform package CITY, SIARGAO ‘SAFE’ T he government under President Duterte could lose its investment-grade status should current efforts at financing a very ambitious infrastructure buildup program fail to get solid backup from a slew of revenue-enhancing tax-reform measures still being deliberated in Congress, the influential global financial giant Deutsche Bank AG said. In its most recent readings on the Philippines, the lender said
that, while latest indicators continue to paint a buoyant economy, concerns over revenue shortfalls are rising, and could prompt the credit-rating agencies to reassess the creditworthiness of the $292billion Southeast Asian nation of 100 million people, stressing markets as a result. Just last month, the House of Representatives adopted a revised proposal lowering the personal income-tax (Pit) rate along with
PESO exchange rates n US 49.8880
accompanying offsetting measures. Now under House Bill 4774 titled Tax Reform for Acceleration and Inclusion, the revised proposal seeks to exempt those with annual earnings of P250,000 and below from paying PIT, with graduated adjustments for middle- and highincome earners. To offset the potential revenue losses from the tax cuts, the bill includes the imposition of excise tax on petroleum and the removal of
See “Mine shutdowns,” A2
particular tax perks. “In our view, the passage of the first package would be a welcome development to a low-income country with one of the highest incometax rates in Asia. It would also give the Duterte administration the momentum to push for the rest of the tax reforms in the pipeline, in turn helping to counter downside risks to investments,” Deutsche Bank said in a research note. See “Tax-reform,” A16
By Ma. Stella F. Arnaldo
@akosistellaBM Special to the BusinessMirror
T
WO days after a powerful 6.7-magnitude earthquake struck Surigao City, tourists in the city were reported to be safe and accounted for. To the north, resorts in the popular resort island of Siargao also reported their guests as unaffected by the earthquake.
As of February 11, the Regional Disaster Risk Reduction and Management Center in Caraga (Region 13) reported six dead and 112 injured. The Surigao City Airport, a gateway to Siargao and jumpoff point to other ecotourist areas in the Caraga region, will be closed for repairs for a month. As such, PAL Express flights 2P 2095 (Manila-Surigao) and 2P 2096 (Surigao-Manila), as well as Cebu See “Tourists,” A2
n japan 0.4406 n UK 62.3849 n HK 6.4304 n CHINA 7.2643 n singapore 35.1374 n australia 38.0496 n EU 53.2006 n SAUDI arabia 13.3063
Source: BSP (10 February 2017 )
A2 Monday, February 13, 2017
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Wanted: Filipino game changers On February 7 the BCYF chose several finalists for its BCYF Innovation Awards (BIA), which the group hopes could inspire other Filipinos to continue embracing change and wield its positive effects on the country and, hopefully, outside of its geographical borders. “My hope is very simple. The average person whether they are leaders or followers, we believe that each one can make a difference, Yap said. According to him, innovation doesn’t need to be done inside a science laboratory, university campus, a factory or a corporate boardroom. “It can be extended to the family, society’s basic unit, as its members can exchange views on what’s best for them.” One of the innovators could be just around the corner, Yap added.
‘Yo soy’ Layson
ONE of the finalists that could bag the top BIA is entrepreneur Gadmer G. Layson. Layson, a police beat reporter for a local media company, has been known on certain to be handing out for free his company’s products to strangers: bottled soy drink. But while soy drinks is nothing new, Layson’s 4-year-old business has caught the eye of BIA judges for its instant soya coffee. According to Yap, this is the first time he heard of soy linked to t he product of a not her or different bean. The 47-year-old Layson said he roasts the soybeans manually. The taste testing of his company’s products start with friends and family members. According to Layson, the first product—soy milk—was tested by him, his wife and their three children. Because they enjoyed it, I name t h e c o m p a n y — 3K— t o t h e m :
Mine shutdowns. . . Continued from A1
companies is “worrisome”. “One main job at the PSE is to operate a financial market that is not only efficient, but more important, is fair. The surprise announcement in the media of the suspension and closure of particular mines, including those that are publicly listed, is a very worrisome trend, if not an irresponsible move by the DENR,” Sicat said. “Our concern was not just wealth lost by some of these firms but clearly with a lot of confusion in the marketplace, there was misdirection in one level from the financial market viewpoint,” he added.Sicat said the PSE and the Capital Markets Integrity Corp., the PSE’s independent audit unit, continues to survey movements of share prices to determine if these were “unusual”. Of the firms shuttered by the DENR, 20 are publicly listed. The mining industry as a whole accounts for 3 precent of all listed companies’ value. (See related story on B2)
Engineers’ apprehension
The University of the Philippines’s Mining
Engineering Society (UP Miners) on Sunday said the decision of Environment Secretary Regina Paz L. Lopez to close mines would not only mean the loss of thousands of jobs, but also employment opportunities for future miners. In a statement, UP Miners reiterated its call for transparency in the conduct of the mine audit and backed the call for review of the mine audit as resolved by the Mining Industry Coordinating Council (MICC) last week. Despite the MICC’s call for review of the mine audit, Lopez said the 28 of the 41 mines which failed her audit criteria will stay closed unless they appeal to the DENR or President Duterte, who has the final say on the issue. An antimining advocate, Lopez said the MICC multistakeholders committee’s recommendation or advise to the DENR will be set aside if it is incongruent with the reasons behind her decision to close the mines. “The MICC is only recommendatory,” she said. UP Miners, however, insisted that the details of the mine audit should be made public “in the name of transparency.” “For as long as the transparency of the mining audit remains inaccessible, as future engineers, we shall keep invoking our right to access detailed
information regarding the said mining audit in order for us to know what needs to be improved in the industry,” the group said. “As students of the University of the Philippines, we uphold honor, excellence and the values of responsible mining. We, thus, challenge the government to do the same,” the statement added. The UP Miners, whose primary goal is to advance the mining engineering profession and help ensure responsible mining, questioned the credibility of the audit done by Lopez on the 28 affected mine sites. “For the DENR to ban the Mines and Geosciences Bureau during the [press] conference, where the mine suspensions list was released, places the integrity of the department and credibility of the audit in jeopardy,” the group said. The group added that even mine sites with an international ISO-14001 certification eventually failed the audit. This, even as Lopez initially deemed the certification as sufficient to prove that a firm adheres to international standards. The UP Miners also questioned how an audit done by Lopez’s team was eventually preferred over one that was based on international standards. “The action by the DENR has instigated issues of employment panic and dilemma to future engineers and scientists of the industry, aside from the questionable mining audit itself,” the group said. “It defeats the purpose of studying the technicalities and philosophies of the field and the industry when the industry itself is without a defined standard acceptable to the government,” it added. The closure of mines, the group said, jeopardized the future of new graduates and students of mining engineering, geology, metallurgical engineering and other related fields, along with the plight of some 1.2 million people in the affected mine sites. According to the Chamber of Mines of the Philippines (COMP), Lopez “is slowly killing an industry that has faithfully paid billions in taxes and fees annually.” The mining industry paid P10.1 billion in taxes to the government in 2015. The mining operations that were closed or suspended accounted for 46 percent, or P4.6 billion, of the amount. The COMP added that about $22 billion (equivalent to around P1 trillion) in mining investments will be put on hold as a result of the government’s “inconsistent policies on mining”.
Tourists. . .
Continued from A1
Pacific flights to and from Surigao City are suspended from February 11 to March 10, according to a travel advisory issued by the Department of Tourism (DOT). The DOT Office of Public Affairs also reported “two tourism accommodations facilities were badly damaged. Others sustained slight structural damages” in Surigao City. The report, a copy of which was obtained by the BusinessMirror, did not name the damaged hotels. The report indicated that 10 guests checked in at Jec Pension House “were confirmed safe and are properly accounted for.” At Parkway Hotel, “all 32 guests, including one foreigner, were safely transferred to other hotels and private residences, according to the hotel manager.” It added that the seven-story Tavern Hotel and its four-story annex “sustained minor structural damages. None were injured. All guests are safe and accounted for.” The report was silent, however, on the number of guests at said hotel. Meanwhile, resorts and guests on Siargao Island, known as the Surfing Capital of the Philippines, were basically unaffected by Friday’s earthquake in Surigao City. In an interview with the BusinessM irror, the manager of Buddha’s Surf Resort, one of the highly rated resorts on the island, said: “We felt a slight tremor but no damage occurred. All our guests felt it but they’re still hanging out, or out surfing.” While February doesn’t fall in the usual surfing season in Siargao, “we still get a lot of waves; it just depends on the wind.” He said the resort is now registering 90-percent occupancy. For her part, Estella Poitiers, manager of Siargao Inn, another top-rated resort on the island, said: “We did feel the quake, but it was not particularly alarming and none of our guests considered to leave just because of that. Our guests are doing fine.”
Continued from a1
Kyla (15 years old), Kyle (8) and Kevin (3). He said his children were also the inspiration for his soy ice candy.
Roots
BORN to a marginalized and big family in Mexico, Pampanga, Layson experienced a rough and tough life starting in his growing years. Nevertheless, he maintained a positive outlook in life and never complained about his deprived condition in life. Instead, Layson rolled with the punches, so to speak. He grabbed every opportunity that comes his way that he considers as blessings. Layson recalled his inspiration to extirpate himself from the shackles of poverty came from his special neighbor who is a person with a disability (PWD) who works as a photographer. “If he can take photos with his camera even without fingers, what more I who has a complete set of hands?” Thus, Layson embarked on a career as a commercial photographer. To jump-start his ambition to become a photographer, he bought a camera from his share of this father’s palay harvest. For a start, he initially focused on the most popular source of photographer’s bread and butter fondly called KBL—weddings, baptisms and funerals. Furthermore, Layson also penetrated the school market by working on class pictures and graduation pictures. He even covered show-business events and the night club scene during its heydays. His break in the media came when a reporter from a tabloid asked him to be his partner-photographer. He immediately grabbed the opportunity and this signaled the start of his journalistic career. To be continued
She reported a 90-percent occupancy at the resort, as well. The surfing season on Siargao is from May to October. A manager at an upscale international resort on Siargao said their guests were also unaffected by the earthquake that hit Surigao City. “We felt it, but nothing happened. There was no problem.” She asked, however, that the resort’s name not be published. Many of the tourists in Siargao fly directly to the island’s Sayak Airport via Cebu Pacific’s Cebu-Siargao daily flights. As of Sunday, operations at said airport were normal. In 2015 the Caraga region recorded 1.14 million visitor arrivals, of which, Surigao del Norte, including Siargao, accounted for 145,950 arrivals, including foreign tourists. This was 19.25 percent higher than the arrivals in 2014. Siargao alone has been posting a 10-percent increase in visitors since 2013, according to published reports. Surigao City itself recorded 272,863 visitor arrivals in 2015 up 11.35 percent from 2014, latest DOT data show. In a statement issued on Saturday, the DOT said “[it] has made available all its resources to provide for and assist in [the tourists’] immediate needs.” The agency expressed its deepest concerns to those who were affected by the earthquake and enjoined “potential travelers and those already in the country [to] check with DOT overseas and regional offices for updates of travel situations in affected areas.” It assured travelers that it “will provide all the support necessary to help the tourism sector in the said destinations to recover and rebuild and remain to be one of the country’s key tourist haven.” PAL President Jaime H. Bautista said passengers from Surigao City “can take our flights out of Butuan.” Added airline Spokesman Cielo Villaluna, “We are providing rebooking/rerouting with waivers of fees/charges, as well as full refunding.” (http://bit.ly/2kjE9BP) Region 13, known as Caraga, was created in 1995, which includes Agusan del Norte, Agusan del Sur, Surigao del Norte, Surigao del Sur and Dinagat Islands. Surigao City, where the earthquake struck, is the capital of Surigao del Norte.
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Monday, February 13, 2017 A3
PSALM debt payments hit ₧84.86B in 2016
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By Lenie Lectura
@llectura
he Power Sector Assets and Liabilities Management Corp. (PSALM) said it has paid off P84.86 billion worth of debts, bringing down the state firm’s obligations to P506.34 billion. “Payments made in 2016 amounted to P84.86 billion, consisting of financial obligations of P65.10 billion and the interest payment in the amount of P19.76 billion,” PSALM Officer in Charge Lourdes Alzona told the BusinessMirror. The debt payment last year was higher than the P78.751 billion in 2015. Of the amount, P29.041 billion were principal debts service, including debt prepayment of P6.32 billion, while independent power producer lease obligations service reached P26.357 billion. In addition to debts service, interests on principal debt, amounting to P23.353 billion, were also paid in 2015. Alzona said with last year’s principal payments, PSALM’s outstanding financial obligations as of end-2016 went down to P506.34 billion, or $10.17 billion. “During the year, the Philippine peso depreciated further from 47.166 to a dollar at end-2015 to 49.813 to a dollar at end-2016.”
She said PSALM, the agency tasked to manage state-owned power assets, is determined to reduce the debts of the National Power Corp. (NPC). Under the Electric Power Industry Reform Act, PSALM is the government agency tasked to repay the debts of NPC. “We are continuously identifying certain measures to avoid and/or minimize costs, specifically on refinancing. Among these are stringent management of collectibles, sale of real-estate assets, disposal of other assets, which entail high costs for maintenance,” Alzona added. PSALM, she said, plans to sell some real-estate assets that could fetch an estimated P5 billion. “The sale would be staggered, since we still have to sort out which can be sold, depending on the land title. There are areas that can be sold, such as the resort in Puerto Asul, while there are others that can’t be sold, such as the
FILE PHOTO
one in Bagac,” Alzona said. This plan, she added, will be over and above the universal charge administration and other regular activities to support the liquidation of PSALM’s financial obligations. PSALM sourced internal funds
—from operations of remaining plants and collection of privatization proceeds—to pay off NPC’s debts. The remaining obligations would also be settled through privatization collection proceeds. The power assets that have yet to be privatized include the
850-megawatt (MW) Sucat Thermal Power Plant, the 200-MW Mindanao Coal-Fired Thermal Power, the 982-MW Agus-Pulangi hydropower complex, Malaya thermal power plant, the 40-MW “security capacity” of the Unified Leyte Geothermal Power Plant
(ULGPP) and the bulk capacity of the ULGPP itself. Alzona said PSALM is in constant consultation with the Department of Finance (DOF) and the Department of Energy on policy directions. The DOF chief serves as the PSALM’s chairman of the board.
Agriculture/Commodities BusinessMirror
A4 Monday, February 13, 2017 • Editor: Jennifer A. Ng
news@businessmirror.com.ph
PHL rice stocks down 13.5%–report By Jasper Emmanuel Y. Arcalas
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@jearcalas
he country’s rice inventory at the start of 2017 declined by 13.5 percent to 2.77 million metric tons (MMT), from 3.2 MMT recorded a year ago, according to a report from the Philippine Statistics Authority (PSA). The rice inventory as of January 1, however, was enough for the country’s rice requirement for 81 days, the PSA said in its monthly report, titled “Rice and Corn Stock Inventory”. “Stocks in the households would be adequate for 37 days, those in commercial warehouses for 28 days, and those in NFA depositories for 16 days,” the PSA said in the report. The January 1 rice-stock inventory was also 17.19 percent lower than the December’s inventory of 3.34 MMT. “This month’s rice stocks in all sectors declined compared with their levels the previous year. Stocks in the households decreased by 4.75 percent, in commercial warehouses by 1.79 percent, and in NFA depositories by 39.2 percent,” the report read. Of the January’s total rice-stock inventory, 45.91 percent were with households, 34.29 percent were in commercial warehouses, while 19.8
percent were in NFA depositories, the PSA said. The rice stock in NFA depositories reached 547,460 MT, of which nearly 80 percent, or 435,340 MT, was imported. Mea nwhi le, r ice stoc k s in households and commercial warehouses reached 1.269 MMT and 948,050 MT, respectively. “Compared with their levels the previous month, stocks in all sectors dropped. Stocks in the households decreased by 24.34 percent, in commercial warehouses by 13.55 percent, and in NFA depositories by 2.96 percent,” the report read. The government periodically monitors the country’s rice stocks to determine whether there is a need to import the staple. In the same report, the PSA said the country’s corn inventory as of January 1 reached 382,130 MT, slightly lower than the 386,960 MT recorded in 2016. However, the figure was 3.28
File photo
percent higher than the 369,980 MT corn-inventory level recorded in December last year. “Compared with the previous year, corn stocks in the households increased by 68.64 percent,” the report read.
“Stocks in commercial warehouses and NFA depositories decreased by 26.96 percent and 9.03 percent, respectively,” it added. The PSA said more than half the total corn-stock inventory as of January 1 were in commer-
cial warehouses, 45.81 percent were with the households and 0.34 percent in NFA depositories. Corn stocks in commercial warehouses reached 205,780 MT, while those in households and NFA warehouses reached 175,060 MT and
1,290 MT, respectively. “Month-on-month, corn stocks in the households and in NFA depositories grew by 16.3 percent and 24.78 percent, respectively. However, stocks in commercial warehouses dropped by 5.79 percent,” it added.
DA eyes live cattle imports from Australia next year Former agri chief to be honored by global research agency T
he Department of Agriculture said over the weekend that it will seek to include in its 2018 budget the procurement of Australian live cattle to boost the livestock industry. Agriculture Secretary Emmanuel F. Piñol said he discussed the possible importation beginning next year with Australian Ambassador to the Philippines Amanda Gorely, who called on him at his Quezon City office last week. Using the imported cattle as surrogates for embryos, which are likely to be procured from Argentina, the DA said it intends to establish dairy municipal multiplier farms in the Cordillera region and Bukidnon, where the climate is cold. Technicians will be provided to the farms to ensure proper care of the cattle. Piñol said Gorely has expressed Australia’s intention to continue exporting wheat and shark’s fin to the Philippines. She said Australia is
also keen on exporting live bees to the country. The DA chief said he and Gorely will send off a container of Philippine mangoes sourced from all over the country to Australia soon. The Australian government approved last October the export of Philippine mangoes, except those grown in Palawan. Piñol said Gorely also discussed the seven ongoing projects of the Australian Centre for International Agricultural Research (ACIAR) with DA agencies, which are focused on supporting the production of trees and fruits, and soil management for vegetables in the country. He said he expressed interest in replicating the success of sea-cucumber production in Mindanao as he learned of ACIAR’s sea-cucumber project in IIolilo.
Pork, chicken inventory
The country’s inventory of frozen pork as of January 30 declined 12.05
percent to 13,815.59 metric tons (MT), from 12,329.79 MT recorded a year ago, according to latest figures released by the National Meat Inspection Service (NMIS). The figure is also 18.7 percent lower than the 16,993.45 MT frozenpork inventory level recorded at the start of 2017, NMIS data showed. Figures from the NMIS revealed that the bulk of the inventory of frozen pork in government-accredited cold storages was purchased abroad. Imported frozen pork in cold storages reached 12,921.35 MT, 13.79 percent higher than the 11,355.68 MT imported frozenpork inventory posted last year. Local pork in cold storages declined 8.20 percent to 894.25 MT, from 974.11 MT a year ago, NMIS data showed. The NMIS said it accounted the stock inventory in accredited commercial and in-house cold storage in slaughterhouses and meat-processing
plants for the frozen-pork inventory data. Data from the attached agency of the DA also showed that the total number of dressed chicken in local cold storages as of end-January went down by 8.46 percent to 16,465.49 MT, from 17,986.37 MT a year ago. The current chicken inventory is also lower by 32.06 percent compared to the 24,238.49 MT recorded at the start of the year. As of January 30, NMIS data showed that imported dressed chicken in cold storages was 20.22 percent higher than locally produced poultry. The inventory of imported dressed chicken reached 8,988.52 MT, 11.61 percent higher than the 8,053.61 MT recorded a year ago, NMIS said. For the dressed-chicken data, the NMIS said it included accredited cold-storage facilities. Freshchilled chicken and mechanically deboned meat were excluded from its survey. Jasper Emmanuel Y. Arcalas
Warm ocean water triggered vast seabird die-off, experts say
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NCHORAGE, Alaska—A year after tens of thousands of common murres, an abundant North Pacific seabird, starved and washed ashore on beaches from California to Alaska, researchers have pinned the cause to unusually warm ocean temperatures that affected the tiny fish they eat. Elevated temperatures in seawater affected wildlife in a pair of major marine ecosystems along the West Coast and Canada, said John Piatt, a research wildlife biologist for the US Geological Survey. Common murres are an indicator of the regions’ health. “If tens of thousands of them are dying, it’s because there’s no fish out there, anywhere, over a very large area,” Piatt said. To see such effect over two sizeable mar ine ecosystems is extraordinary, he said. Deaths of common murres in Alaska likely were multiplied when starving birds in December 2015 were hit by vicious Gulf of Alaska winter storms, Piatt said. Common murres look like thin penguins. They can fly miles in search of schools of finger-length fish and can dive and swim nearly 600 feet deep
In this January 7, 2016, file photo, dead common murres lie washed up on a rocky beach in Whittier, Alaska. A year after tens of thousands of common murres, an abundant North Pacific seabird, starved and washed ashore on beaches from California to Alaska, researchers have pinned the cause to unusually warm ocean temperatures that affected the tiny fish they eat. AP/Mark Thiessen, File
to capture them. However, the birds’ high metabolism means they have to eat a lot. If they don’t eat prey matching 10 percent to 30 percent of their body mass daily, they can use up fat reserves and drop to a critical threshold for starvation within three days. Com mon mu r res eat sm a l l forage fish: capelin, from the smelt family, and juvenile pollock, which as adults are caught for fast-food fish sandwiches. Both fish were largely absent when the National Marine
Fisheries Service conducted surveys in summer 2015. Common murres paid the price. Volunteers and federal researchers last year counted the carcasses of 46,000 dead murres in Alaska and another 6,000 in California, Oregon and Washington. Die-offs of seabirds occur periodically, but this one was spectacular. Only a fraction of the dead birds likely reached shore, Piatt said. And only a fraction of Alaska coastline was
surveyed. A conservative extrapolation indicates 500,000 or more common murres died, Piatt said. Nearly all were emaciated. As birds starved, they consumed their own fat and protein until they lost deadly amounts of body mass. “You can’t keep yourself heated, and then you die,” Piatt said. “It’s an agonizing, awful death. And then on top of that, some of them probably drowned.” Starting in 2014, the temperature in the upper 300 feet of water was as much as 4.5 degrees warmer than normal. National Aeronautics and Space Administration explained it like this: An unusually strong and persistent ridge of atmospheric high pressure appeared over the northeastern Pacific, weakening winds and easing normal, wind-driven churning, which promoted upwelling of deep, cold water to the surface. It led to a lens of unusually warm surface water that a University of Washington meteorologist dubbed “the Blob”. Forage fish feed on zooplankton, and cold water produces the biggest, fattiest versions, said Shannon Atkinson, a physiologist and researcher at the University of Alaska Fairbanks. AP
F
ormer Agriculture Secretary William D. Dar will be honored by the International Crops Research Institute for the Semi-Arid Tropics (Icrisat) in Patancheru, India, in recognition of his achievements as its director general for an unprecedented three five-year terms, from 2000 to 2014. In his honor, a new facility at Icrisat, housing the Agribusiness and Innovation Platform (AIP), will be named after him. “In recognition of all your achievements as director general, and particularly for your vision in the creation of Inclusive Market Oriented Development [Imod], the institute has decided that the building housing the Agribusiness Innovation Platform will bear your name,” said Chandra A. Madramootoo, chairman of the Icrisat governing board, in a letter inviting Dar to attend the facility’s unveiling ceremony. Dar, with wife Beatriz, will witness the unveiling of a plaque with his name at the AIP building on February 17 at Icrisat in Patancheru, India. “On behalf of Icrisat, the institute will be honoring your 15 years of outstanding and dedicated service to the organization while you were director general. You moved the institute to the forefront in all aspects of science, research and financial sustainability. Through your leadership, the institute significantly enhanced its research prowess to improving the livelihoods of the small farmers and their families in the semiarid tropics,” Madramootoo noted. “You also had the foresight to advance the mission of the institute toward Inclusive-oriented Market Development, thereby pushing the results of the research toward new business opportunities and income generation for the rural poor,” he added. Two months ago, President Duterte honored Dar and two others as The Outstanding Filipino (Tofil) awardees for 2016, for their “exemplary achievements and selfless dedication to their profession or vocation that resulted not only in the advancement of their respec-
tive fields of endeavor, but also made significant contributions to the betterment of our countrymen and to our country at large.” “We see this in William D. Dar, who found a way to feed millions of people. His works in steering and directing the International Crops Research Institute for the Semi-Arid Tropics and other agricultural research institutions have been instrumental in giving food and opportunities not only for our countrymen, but also for people all over the world, especially in India and the Sub-Saharan Africa,” Duterte said in his speech during the Tofil awarding ceremony in Malacañang last December. A native of Santa Maria, Ilocos Sur, Dar is the only Filipino who has served as head of a global agricultural research institute. He turned around Icrisat into a financially stable and a leading global research institute, receiving several awards, particularly from the CGIAR, a consortium of 15 international agricultural research institutes. Through his leadership, he has quadrupled the income and investments poured into Icrisat, from $21 million in 2000 to $85 million in 2014. Upon his retirement from Icrisat, Dar founded the InangLupa Movement Inc., a social volunteer group that advocates for the modernization and industrialization of Philippine agriculture, which is inclusive, science-based, resilient and market oriented. Currently, he serves as the strategic adviser for global expansion of Prasad Seeds Private Ltd., which operates a seed-processing facility in Pangasinan, and engages in contract growing of hybrid rice and corn seeds with farmers’ groups. He also serves one of the advisers of the Young EntrepreneurFarmers (YEF) Philippines, along with Arsenio Barcelona of Harbest Agribusiness Corp. YEF is part of the Kapatid Agri Mentors Group, led by Presidential Adviser for Entrepreneurship and Go Negosyo founder Joey Concepcion, which has committed to help the Duterte administration implement Negosyo Para sa Kapayapaan sa Sulu project.
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AseanMonday BusinessMirror
Editor: Max V. de Leon • Monday, February 13, 2017 A5
Vietnam poised to become Asia’s ‘Silicon Valley’
M
OSCOW—Vietnam is likely to become one of the most important markets for Google and many other informationtechnology (IT) companies in the near future. This is thanks to its talented IT students, ambitious high-tech projects and pursuit of innovation.
Although most of the Asean countries are rapidly developing the high-tech sectors of their economies, Vietnam is the most likely to become a leader in this field and turn into a kind of “Silicon Valley” in the Southeast Asian region, the Asian Correspondent wrote. The Vietnamese government aims to transform the country into a regional center for technology and innovation. An example of this is the ambitious project of a Silicon Valley, supported by the Ministry of Science and Technology. Known for being a thriving center for the manufacturing of electronics for Korean and Japanese firms, like Samsung, LG Electronics, Panasonic and Toshiba, the country will now focus on research activities, innova-
tion and development. Taking into account the efficient education system, government support, foreign investments and talented IT specialists, Vietnam has all the prerequisites to achieve its goals and become a high-tech leader in the region, the Asian Correspondent wrote. A similar opinion has been expressed by the head of one of the largest Vietnamese Misa IT-companies, Li Thanh Long. In an interview with Sputnik Vietnam, he noted that a high level of mathematical knowledge among Vietnamese youth and the growth of foreign investments in Vietnam are very encouraging. However, there are several obstacles that must be overcome at the state level.
Bloomberg
“The education of our young people is more academic, nonpractical, which prevents the creation of innovative products. Therefore, in order to educate a large number
of highly qualified professionals, we need a radical modernization of the education system. However, the legal system in Vietnam is very complicated and creates obstacles
to the opening of new businesses,” Long said. “A clear example is Article 292 of the new Civil Code, according to which the entrepreneur who created
a new profitable product, for example, a video game, but did not register it, could go to jail. The state partially prevents the development of private enterprises, particularly in the field of digital technology, giving preference to state-owned companies,” the expert added. Research fellow at the Russian Center for Strategic Research Anton Tsvetov also believes these issues could prove to be serious obstacles on the country’s way to innovation. “Innovation and high-tech growth is possible only in conditions of a developed private economy, including small- and mediumsized enterprises. This requires a kind of institutional environment that will encourage private initiatives and ensure property rights, including intellectual property,” he told Sputnik. According to the expert, it would be difficult to combine a traditional system of economic regulation with the the explosive growth of innovation. Such growth will require a new level of economic freedom, which should somehow be put in compliance with the political context of modern Vietnam—a creative task that the Vietnamese government will have to resolve in the near future, the expert concluded. PNA/Sputnik
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Abe, Trump show unity vs N. Korea missile test ‘Dangerous’ refugees flooding US, Trump says
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A man watches a TV news program reporting about North Korea’s missile launch at the Seoul Train Station in Seoul, South Korea, on Sunday. North Korea reportedly fired a ballistic missile in what would be its first such test of the year and an implicit challenge to President Donald J. Trump’s new administration. Details of the launch, including the type of missile, were scant. The letters read “The ruling and the opposition parties denounce North Korea’s missile launch.” AP/Lee Jin-man
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orth Korea fired an unidentified ballistic missile into nearby seas on Sunday, drawing a joint rebuke from Japanese Prime Minister Shinzo Abe and US President Donald J. Trump.
Abe, speaking at a briefing with Trump in Florida, said the missile test “can absolutely not be tolerated” and called on North Korea to fully comply with United Nations Security Council resolutions. The launch was the first provocation by North Korea since Trump took office. “The United States of America stands behind Japan, its great ally, 100 percent,” Trump said in brief remarks. Neither Abe nor Trump took questions. Kim Jong Un’s regime has accelerated North Korea’s efforts to develop nuclear weapons and missiles that can strike the US and its allies in Asia.
In response, the US has looked to deploy a missile defense system known as Thaad in South Korea, a move opposed by China—North Korea’s primary ally. South Korea’s military said the missile was launched at 7:55 a.m. local time from the North Korea’s northwest, the same region where Kim’s regime fired a midrange Musudan missile last October. It flew 500 kilometers into its East Sea, also known as the Sea of Japan, South Korea’s joint chiefs of staff said in a text message. South Korea’s defense ministry said it couldn’t confirm whether the projectile was a long-range bal-
listic missile capable of reaching US territory, which North Korea had threatened to test launch in recent weeks. Trump had vowed last month to prevent the country from developing the capability to strike the US with a missile. The US Strategic Command said in a statement that the North launched a medium- or intermediate-range ballistic missile, which posed no threat to North America. US forces remain vigilant against North Korean provocations, and are fully committed to working with allies in Japan and South Korea, the statement said. South Korea Presidential Security Adviser Kim Kwan Jin called US counterpart Michael Flynn after the launch, the Blue House said in a statement. They agreed to cooperate in seeking ways to deter provocation by North Korea, it said.
Greater range
The range of the missile fired on Sunday, if confirmed, is greater than an intermediate-range Musudan missile that North Korea
500 km
The distance the missile flew into North Korea’s East Sea, also known as the Sea of Japan fired last year, according to Cheong Seong-chang, senior fellow at the Sejong Institute. That would show that North Korea’s missile capability is reaching a “stable level”, he said. “The North’s improvement in missile capability shown today will be met by the Trump administration’s strong opposition and will likely accelerate the Thaad deployment on South Korea,” Cheong said. “That would, of course, trigger a backlash by China, which will likely retaliate against South Korea further.” North Korea fired at least 25 projectiles last year, according to the United Nations, which bans it from pursuing ballistic missile technology because it could be
used to deliver nuclear warheads. Pyongyang also detonated two nuclear devices in 2016. Kim said on January 1 his country was in the “last stage” of preparations to test-fire an intercontinental ballistic missile, leading Trump to write on Twitter, “It won’t happen!” Trump did not give specifics of how he’d stop Kim’s missile development. The UN Security Council unanimously passed a fresh resolution in late-November that tightened sanctions on North Korea, including cutting the country’s coal exports, after the regime conducted its fifth nuclear test last September. Japanese Defense Minister Tomomi Inada told reporters on Sunday in comments carried by NHK that the ministry will continue to gather information and make utmost efforts to monitor the situation vigilantly. Foreign Minister Fumio Kishida said Japan would look to strengthen cooperation on information sharing with the US and South Korea, Kyodo reported. Bloomberg News
resident Donald J. Trump said on Saturday that judicial decisions that halted his executive order banning travel from seven predominantly Muslim countries had allowed a flood of “dangerous” refugees to pour into the country. “Our legal system is broken!” Trump wrote in a Twitter post a day after he said he was considering a wholesale rewriting of the executive order to circumvent legal hurdles quickly but had not ruled out appealing the major defeat he suffered last Thursday in a federal appeals court. “SO DANGEROUS!” the president added. Trump cited a report in The Washington Times that asserted that 77 percent of the refugees who entered the United States since Judge James L. Robart of US District Court in Seattle blocked the order on February 3 had been from the seven “suspect countries”. Still, his allusion to a rush of dangerous refugees is somewhat misleading. According to an analysis of data maintained by the State Department’s Refugee Processing Center, the percentage of refugees arriving from those countries— Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen—has risen considerably since the directive was suspended, but the weekly total of refugees arriving from the targeted countries has risen by only about 100. And all are stringently vetted. At the same time, refugee arrivals from countries not affected by the order have fallen sharply. Since the judge blocked the ban, 1,049 of the 1,462 refugees who have arrived in the US, or 72 percent, were from the seven countries affected. In the week before Trump issued his order, more refugees arrived, 2,108, and 935 of them, representing 44 percent, were from those seven nations. The figures suggest that the State Department and refugee resettlement agencies, which meet weekly to determine which individuals and families to admit to the US, may be increasing their efforts to help refugees from the seven countries. New York Times News Service
Trump foreign policy quickly loses its sharp edge, now less radical
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A SH I NGT ON —W he n President Donald J. Trump took a phone call from the leader of Taiwan last December and asserted that the United States might no longer be bound by the “OneChina” policy, his defenders hailed it as a show of strength—the latest delicate issue on which Trump was willing to challenge decades of diplomatic orthodoxy. Last Thursday evening, Trump fell back into line. In a call with President Xi Jinping of China, he pledged fealty to One China, a 44-year-old policy under which the US recognized a single Chinese government in Beijing and severed its diplomatic ties with Taiwan. Trump has also tacked to the center on Israel. After presenting himself as a stalwart defender of Prime Minister Benjamin Netanyahu who would buck the pressure campaign against Israeli settlements in the West Bank, Trump warned Israelis this week that he did not believe that “going ahead with these settlements is a good thing for peace”. And on Iran, where Trump threatened as a candidate to rip up the nuclear deal struck by President
Barack Obama, advisers to the new president told the European Union’s top foreign policy official, Federica Mogherini, that the US would fully carry out the agreement. As Trump begins to shape his foreign policy, he is proving to be less of a radical than either his campaign statements or his tempestuous early phone calls with foreign leaders would suggest. Last Friday, as he welcomed Prime Minister Shinzo Abe of Japan to the White House, Trump characterized America’s alliance with Japan as a “cornerstone of peace and stability”. Those time-tested words bore little resemblance to his threats during the campaign to mothball the partnership. “Every president discovers that it looks different from the perspective of the Oval Office than it did on the campaign trail,” said Martin S. Indyk, executive vice president of the Brookings Institution. “The fact that President Trump is proving flexible on some key foreign-policy issues suggests he’s less ideologically driven than his early moves would imply.” To some extent, Trump is simply undergoing the same evolution
that all of his predecessors went through. Obama, who ran as an antiwar candidate, became an avid user of drone strikes and other covert counterterrorism operations pioneered by George W. Bush. In Trump’s case, however, the recalibration is starker because of the extreme nature of the positions he had staked out on issues like China, Russia and the North Atlantic Treaty Organization alliance, as well as the Trump campaign’s thin ranks of policy advisers and his slowness in assembling a full national security team in the White House. It also stands in stark contrast to his more uncompromising approach on other matters like the legal challenges to his executive order on immigration. “He made it all the way to inauguration without doing the deepdive policy reviews and internal debates that every other successful administration does during the campaign and the transition,” said Peter D. Feaver, who served in Bush’s National Security Council. Secretary of State Rex W. Tillerson, administration officials said, was among those who urged Trump
to publicly endorse the One-China policy as a way to defuse tensions with Xi. Before Thursday, the two leaders had not spoken since November 14; administration officials said the Chinese leader would not get on the phone with Trump without assurances from the administration that he would commit to the policy. Defense Secretary Jim Mattis has also emerged as an influential player, officials said. He recently returned from a trip to Asia during which he offered reassurances of US support for allies, like Japan and South Korea. Among his travel companions was Matthew Pottinger, who recently became the senior director for Asia in the National Security Council. “There finally is an administration beginning to take shape around him, which there was not before— Tillerson and Mattis in particular,” said Jeffrey A. Bader, a former top China adviser to Obama. “During the transition, no one had the nerve or expertise to contradict him.” In addition to his Cabinet officers, Trump and his aides are beginning to soak up advice from other leaders. The president stiffened his tone
on settlements after he met briefly with King Abdullah II of Jordan; his advisers, including Jared Kushner, spoke with Arab officials, who urged the administration not to give Israel a free hand on the issue. In an interview with an Israeli newspaper, Israel Hayom, which was published last Friday, Trump said settlements “don’t help the process”—a phrase that is not substantially different from those used by Obama or Bush. “Every time you take land for settlements, there is less land left,” Trump continued. When the White House issued an initial statement on settlements last week, some analysts read its ambiguous wording as leaving Israel plenty of room for maneuvering. It said settlements were not an impediment to peace, but they “may not be helpful”. Trump’s remarks were more pointed, however, and experts said they suggested a genuine shift. “The right-wingers who looked at him like he was going to be the master builder of the Middle East— that was not warranted,” said David Makovsky, a senior fellow at the Washington Institute for Near East
Policy. “The more he immerses himself in this, he will see there are conflicting pressures and realities. He is going to have to navigate within those constraints.” The White House’s pledge to carry out the Iran nuclear deal does not reflect a change of heart on Tehran. The administration last week imposed new sanctions on Iran for its launching of a ballistic missile. But officials in the White House are more focused on curbing what they see as a pattern of aggressive behavior by Iran from Syria to Yemen. Trump’s retreat on One China, experts said, also should be seen in a regional context. He offered the concession to Xi on the eve of a three-day visit by Abe, during which the Japanese leader had lunch at the White House and is Trump’s guest at Mar-a-Lago, where they and their wives are having dinner, and the two men are playing golf at a nearby club. To allow the tensions between China and the US to fester during such a fulsome display of hospitality to the Japanese, analysts said, would have further poisoned relations between Washington and Beijing. New York Times News Service
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Trump, Abe agree on new trade, investment talks
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apan and the US will begin new talks on trade and investment following President Donald J. Trump’s decision to withdraw from the TransPacific Partnership, the two governments said in a statement after their leaders met in Washington last Friday.
The announcement came after Trump criticized Japan for what he said were “unfair” trade practices hampering US auto exports to the country. Japan had the second-largest trade surplus with the US last year, with the bulk of the difference due to trade in vehicles. Japanese Prime Minister Shinzo Abe has rejected the charge and underscored the fact that Japanese automakers in the US provide jobs for US citizens. The two leaders “emphasized that they remain fully committed to strengthening the economic relationships between their two countries and across the region, based on rules for free and fair trade,” they said in their statement. Vice President Mike Pence and Japanese Deputy Prime Minister Taro Aso will lead the economic talks, Abe said at a joint news conference with Trump. Pence is expected to pay a visit to Tokyo following an invitation from the Japanese government.
Economic ‘threat’
Abe had warned earlier in the day that hacking, antitrust laws and mistrust between the world’s largest nations are hindering global trade, warning of a “threat” to the
UK can cut EU migration by only 50,000 a yr
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rexit is unlikely to significantly help Theresa May in her ambition to cut net migration to the UK by more than two-thirds, a study found, pointing out that many of those who move to Britain are needed by employers. The report published on Friday by Global Future, a new pro-immigration think tank, suggested that tighter controls, as promised by the prime minister, would only shave 50,000 off the current net migration total of 335,000—15 percent. May has stuck with her predecessor David Cameron’s promise to get immigration down to the “tens of thousands”—generally interpreted as meaning below 100,000. Annual net migration from the European Union in the year ending June 2016 was 189,000, according to official data. But many of those people are working in industries that would suffer if they weren’t allowed to employ foreign workers. Tighter restrictions on European migrants might also make employers more willing to look at non-EU migrants, who are currently harder to bring into the country. “There has been considerable debate about the consequences of leaving the single market but very little about whether ending freedom of movement will have anything like the impact many people desire,” Global Future Director Gurnek Bains said in an e-mailed statement. “People do need to ask whether a reduction in net migration of less than one-sixth—and potentially nothing at all—is worth a long period of huge economic uncertainty, the collapse of the pound, reductions in inward investment, the loss of British citizens’ rights in the EU and the potential breakup of the UK.” Bloomberg News
70%
The percentage of Japanese cars intended for the American market that are produced in the US
world economy in a speech to the US Chamber of Commerce. Abe noted in his speech to business leaders that 70 percent of Japanese cars intended for the American market are produced in the US, adding that no one in Japan complains about losing jobs because the Japanese have gained from the business, as well. Abe traveled with Trump to his Mar-a-Lago resort in Palm Beach, Florida, for the weekend after their meeting in Washington. Abe has already achieved one of his goals for the visit, with the US confirming that the two nations’ military alliance covers East China Sea islands that are disputed with China. The two nations oppose any unilateral actions to undermine Japan’s administration of the islands, Trump and Abe said in their statement.
President Donald J. Trump (second from right) and First Lady Melania Trump (right) stop to pose for a photo with Japanese Prime Minister Shinzo Abe (second from left) and his wife, Akie, before they have dinner at Mar-a-Lago in Palm Beach, Florida, on Saturday. AP/Susan Walsh
Disputed islands
Such reassurance had been one of Abe’s top priorities going into the meeting, after Trump had previously threatened to pull US troops out of Japan, accusing the country of failing to pay enough for their maintenance, in comments that stirred concern among the Japanese public.
Hemmed in by a pacifist Constitution, Japan is reliant on the US “nuclear umbrella” to deter potential threats from a rising China and an unstable North Korea. Trump called Japan a “steadfast ally” during the news conference and thanked Abe for hosting US military forces. Ships and planes from China and Japan frequently tail one another
around the uninhabited East China Sea islands known as Senkaku in Japanese and Diaoyu in Chinese. While Defense Secretary James Mattis and Secretary of State Rex Tillerson have already confirmed that the US regards the isles as part of its commitment to the alliance, Japanese Foreign Minister Fumio Kishida has said he will continue to
seek reassurance. Japan welcomed Trump’s first phone call with Chinese President Xi Jinping late Thursday, though ties between between China and Japan, strained by disputes over wartime history, have worsened amid acrimony over the islands, as well as China’s actions in the South China Sea. Bloomberg News
Japan limited workers’ immigration; now it’s short of workers
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IFU, Japan—Liu Hongmei was fed up with her job at a Shanghai clothing factory, where she worked long hours for little pay. So three years ago, she quit to take a job in Japan. A garment factory there promised Liu three times her $430-per-month Chinese wage, and she hoped to save thousands of dollars for her family, which was growing with the recent birth of a son. “It seemed like a big opportunity,” she recalled. Call it an opportunity, maybe, but don’t call it work. Legally, the time Liu spent ironing and packing women’s wear in Japan is considered “training”. She had entered the murky and at times abusive world of Japan’s technical trainees—essentially second-class laborers brought in from abroad to fill jobs that Japanese citizens aren’t taking. Just like the United States and other developed countries, Japan has a hard time finding people to pick vegetables, collect nursing-home bedpans and wash restaurant dishes. In the United States many of these low-skilled, low-paying jobs are filled by immigrants in the country illegally, an arrangement attacked by President Donald J. Trump during his campaign. Japan, on the other hand, long ago achieved what Trump has promised: It has very little illegal immigration and is officially closed to people seeking blue-collar work. Now, though, its tough stance on immigration—legal and illegal—is causing problems. Many Japanese industries are suffering from severe labor shortages, which has helped put a brake on economic growth. That is prompting Japan to question some fundamental assumptions about its labor needs. The debate is politically delicate, but changing realities on the ground—in Japan’s factories and fields—are forcing politicians to catch up.
A dormitory for “technical trainees” who have lost their housing along with their jobs at a labor union office in Hashima, Japan, last December 2. Japan’s foreign-born labor force recently topped 1 million people, many of them on visas reserved for technical trainees. The system is rife with worker abuse and fraud, and it is growing. Ko Sasaki/The New York Times
Japan’s total foreign-born labor force topped 1 million for the first time last year, according to the government, lifted in part by people entering the country on visas reserved for technical trainees. That growth has also led to an increase in cases of worker abuse and fraud, labor activists say. Liu is part of that debate. She arrived in Japan in debt after paying brokers $7,000 to arrange her visa. Once there, she said, she found onerous working conditions and lowerthan-promised pay. Her bosses, she said, “treat us like slaves.” Liu and other Chinese workers at her factory came to Japan through a government-sponsored internship program. Its purpose is to square the circle between Japan’s labor shortage and its ban on low-wage immigration. Farms, food-processing businesses and many manufacturers would struggle to stay afloat without foreign trainees, specialists say. “Practically every vegetable in the supermarkets of Tokyo was picked
by a trainee,” said Kiyoto Tanno, a professor at Tokyo Metropolitan University. To appease business groups, the government has created immigration loopholes, and hundreds of thousands of low-wage workers like Liu have poured through them. They come from China and Vietnam, Cambodia and the Philippines, and they are filling empty jobs in Japan as the Japanese population shrinks, becoming a crucial if under-acknowledged motor of the economy. Their numbers are soaring. The trainee program has doubled in size in the last five years, to over 200,000, according to official data, and the government is planning to expand it. The biggest source of workers has been China, but much of the recent growth has come from Vietnam. Few doubt that “training” is a fig leaf. Beyond a short period of language study, most trainees receive little or no instruction that would distinguish them from regular manual laborers, specialists and participants say. “The system is like calling a
crow white,” said Yoshio Kimura, a member of Parliament from the governing Liberal Democratic Party who heads the party’s labor committee. “What we’re really doing is importing labor.” Training is not the only way around Japanese immigration restrictions. There are also students in part-time jobs, asylum seekers waiting for refugee applications to be processed—almost all are ultimately rejected—and South Americans of Japanese descent who can obtain special visas based on their ancestry. Demand still outstrips supply. The number of working-age Japanese has been falling since the mid1990s, a consequence of decades of low birthrates. Nationwide unemployment is just 3 percent, and in some places, jobs are simply going begging. There are three to four positions open in nursing care and construction for every person who applies, according to government surveys. Eventually, Japan plans to lengthen the maximum time that trainees can stay in the country to five years, from three, and allow more kinds of businesses to hire them, including nursing homes and cleaning companies for offices and hotels. Parliament approved the creation of a new agency to oversee the trainee program last year, in response to criticism over worker exploitation. Once it is in place, the plan is to bring in more workers. Kimura and some other lawmakers want to go further, by establishing a formal guest-worker system. Though it would not open a path to immigration—workers would still be expected to go home eventually—it would be more forthright than the current approach. Business groups favor the proposal, and the Liberal Democrats approved it as party policy in May. The government of Prime Minister Shinzo Abe has not indicated whether it will follow through.
“If we want economic growth in the future, we need foreigners,” Kimura said. Nobuya Takai, a lawyer who has represented foreign trainees in labor disputes, said the pretense that trainees are not workers contributes to problems. Companies do not hire them directly, but through a Byzantine system of government and privatesector middlemen. Most trainees end up thousands of dollars in debt to pay broker fees before they even arrive, say Takai and others who have studied the program. And because trainees cannot easily switch jobs—their visas tie them to a single company—they lack what should be major leverage: the ability to walk out on a bad employer. “They can’t change jobs, and they lose money if they go home,” Takai said. In 2011 a US State Department report on human trafficking flagged the trainee program for what it said were inadequate protections against “debt bondage” and other abuses. When trainees don’t save enough to repay broker fees, they sometimes stay on illegally. Almost 6,000 did so in 2015, according to Japan’s Justice Ministry. There are about 60,000 foreigners total in Japan without valid visas, according to the government, compared with an estimated 11 million unauthorized immigrants in the United States. The New York Times spoke with more than a dozen trainees. All of them said they had paid labor brokers in their home countries, usually $7,000 to $11,000, to come to Japan to work. Most borrowed the money from family or banks. The trainees came from several countries in Asia and worked in different industries, in different parts of Japan: a Cambodian construction worker, a Chinese lettuce picker, seamstresses from China and Vietnam. New York Times News Service
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Reports of raids shake unauthorized immigrants
Marlene Mosqueda, who said her father was detained at his home last Thursday, speaks during a news conference on the immigration raids in Los Angeles on February 10. Andrew Cullen/The New York Times
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N Austin, Texas, unauthorized women working in a laundromat cowered in the back of the room, petrified after seeing a video and a photograph of apprehensions outside a local grocery store and burger joint.
A day laborer and mechanic on Staten Island, New York, told his 17-year-old son where the list of
emergency contacts were, including the name of the guardian who would take responsibility for him and his
two younger siblings. In Savannah, Georgia, unauthorized restaurant workers were asking for rides rather than walking home, afraid they might be stopped and questioned. As reports of immigration raids and roundups have rocketed across Twitter, Facebook and texts around the country, unauthorized immigrants, their lawyers and advocacy groups are bracing for the ramped-up enforcement that President Donald J. Trump has called for. Susannah Volpe, a managing at-
torney at Ayuda, an immigrant legal services group in Washington, said she had noticed what seemed to be roundups of people, like those without criminal records, that the government had not previously paid much attention to. “These are agents going into apartment buildings or agents going to worksites,” said Volpe, who had a client arrested, along with five others, at a construction site in Washington last week. “This is new.” School principals in Los Angeles have been sent a checklist of things to do in case immigration agents turn up. The Mexican government even warned “the entire Mexican community” in the United States “to take precautions and to keep in touch with their nearest consulate,” after the deportation of a woman who had previously been allowed to remain in the US. Her case “illustrates the new reality” in the US, said the message, from the foreign ministry. In an executive order on January 25, Trump greatly expanded the categories of unauthorized immigrants who would be priorities for deportation, in keeping with his campaign pledge to be tough on illegal immigration. But despite numerous reports of mass roundups, it was still unclear on Friday whether the promised surge in enforcement had begun. Officials at Immigration and Customs Enforcement (ICE) said the immigration roundups that people were seeing did not represent an increased tempo. The agency has about 100 fugitive teams constantly working to bring in those wanted on a variety of immigration offenses, and these teams have been just as active as they were during the Obama administration, officials said. In 2012 the most active year for deportations during Barack Obama’s presidenc y, 409,849 people were deported.
960,000 The number of people with deportation orders, but who are not in custody
In a news release last Friday, ICE described as routine a five-day “targeted enforcement action” in which roughly 160 people were arrested in six counties around Los Angeles. Of those, 150 had criminal histories, some of them serious. Some had been ordered deported before Trump took office; according to ICE statistics, there are 960,000 people with deportation orders who are not in custody. “The rash of recent reports about purported ICE checkpoints and random sweeps are false, dangerous and irresponsible,” ICE said in a statement last Friday. “These reports create panic and put communities and law enforcement personnel in unnecessary danger.” Officials noted, however, that they expected the numbers and deportations to increase in line with the president’s order. In Los Angeles, for example, the county sheriff’s department was told by ICE that it planned to issue “detainers” for every unauthorized immigrant charged with a crime, no matter how serious, according to Capt. Elier Morejon. Jonathan Blazer, advocacy and policy counsel for the American Civil Liberties Union, said the group had been wary of deportation tactics for years. “One challenge here is that every single enforcement action done outside the jail looks like Trump’s deportation force,” he said. “But as we know, under Obama enforcement was very high.” “The distinguishing factor under Trump is justifiable fear and anxi-
ety,” he added. “Those are categorically new.” Though New York City is a sanctuary city where police and jail officials do not automatically cooperate with immigration agents, unauthorized immigrants can still be picked up in many places. Patricia Lavelle, a public defender in New York who represents immigrants in criminal cases, has begun telling her clients about the two main places where they could be apprehended by immigration officials: outside of courthouses before or after appearances, or at home, if they are living at the same address that they provided to the police when they were charged. “I’ll ask, ‘Are you still at that address? Because if you are not, it’s harder for them to find you,'” she said, “You sort of let them put two and two together.” As to whether that advice could lead some clients to avoid showing up for court—lawyers are not supposed to encourage clients to become fugitives—“there is a tension there,” Lavelle said. “But I would tell them that a warrant issued for your arrest is not something you would want.” Immigrant advocacy groups like Make the Road New York have been holding regular “Know Your Rights” workshops in case ICE comes to the door, and one on Wednesday in Queens drew 40 people. On the advice of La Colmena, a group that assists day laborers on Staten Island, Armando, 45, who asked that his last name not be used because he is unauthorized, filled out an emergency packet, hid it inside his home and told his oldest son, Johnny, where to find it. “He told me, ‘Do not worry, nothing is going to happen,'” Armando said. “I don’t know if he says that to keep us calm or because he just does not want to think about it.” New York Times News Service
Ivanka, McCain: Don’t mess with political dads, daughters
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A SH I NGT ON — A f te r Nord st rom d rop p e d Ivanka Trump’s fashion line, President Donald J. Trump quickly tweeted his disapproval. A day later, the president was the target of venom from Meghan McCain, angry over Trump’s criticism of her father, Arizona Sen. John McCain. Different circumstances, the same lesson: Don’t mess with political dads and their daughters. For Trump, getting involved in the Nordstrom situation wasn’t without risk. His tweet that Ivanka had been treated “so unfairly”—later retweeted from the official presidential account—drew the ire of ethics experts who questioned the use of his platform to comment on a family business. But when it comes to his kids, Trump is known to be protective. Ivanka Trump has not publicly commented on the situation. A person close to her said she did not ask him to do this and she is staying out of it because she takes seriously her pledge to separate from her business. The president reiterated his support for his daughter in another tweet last Saturday. “I am so proud of my daughter Ivanka,” he wrote. “To be abused and treated so badly by the media, and to still hold her head so high, is truly wonderful!” The Trumps weren’t the only father-daughter duo showing support this past week. Meghan McCain sprang to her father’s defense after Trump slammed the Republican lawmaker on Twitter. The president accused McCain, a decorated veteran and former prisoner of war, of emboldening the enemy for disputing the administration's insistence that a deadly US military mission in Yemen was a success. The senator did not weigh in, but his daughter tweeted: “Trump has never served. My father can’t
President Donald J. Trump and his daughter Ivanka walk to board Marine One on the South Lawn of the White House in Washington on February 1. Trump this week risked bad headlines and fresh ethics woes to defend his daughter Ivanka, and her brand, from bad publicity. AP/Evan Vucci
bend one of his knees or lift one of his arms above his head. I am done with this today.” These are just the latest examples of political families fighting for each other. Before Twitter was available, President Harry Truman backed his daughter the old-fashioned way. Truman sent an angry letter to a Washington Post music critic who wrote a less than favorable review of one of Margaret Truman’s concerts. After the concert, Paul Hume wrote that she “cannot sing very well.” Truman responded by sending a note to him on White House stationery, dated December 6, 1950, calling it a “lousy review”. He added: “Some day I hope to meet you. When that happens you’ll need a new nose, a lot of beefsteak for black eyes, and perhaps a supporter below!” Katherine Jellison, head of the history department at Ohio University, asked: “If Twitter had existed in those days, would Harry Truman have tweeted the critic instead of writing a letter?” More recently, President Bill Clinton defended his family’s decision to
send his daughter, Chelsea Clinton, to a private school while he was in the White House. At a town hall meeting in 1993, Clinton said his daughter was “not a public figure. He continued that “she does not like getting a lot of publicity. And frankly, she has more privacy and more control over her destiny where she is than she would if she were at the public school that she was also interested in attending.” Several years later, Chelsea Clinton gave a silent show of support for her father when, at the height of her parents’ public marital problems in 1998, she was photographed walking between them holding both of their hands. To many, it looked as though she was holding the family together. At other times, presidents have supported their daughters more silently. When Jenna and Barbara Bush drew some unwanted headlines for underage drinking during his time in the White House, President George W. Bush did not weigh in publicly. These family political bonds sometimes even extend to furry friends. AP
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ACB and KfW sign phase 2 of Small Grants Programme
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Philippine Eagle, named Sarangani Pride, is released in Sarangani’s forest. Sarangani Information Office
PHL Eagle released to habitat in Sarangani’s ‘last frontier’
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rehabilitated juvenile Philippine Eagle was recently released to its habitat less than a month after it was found on Mount Busa, a key biodiversity area in Maitum town in Sarangani. The eaglet, named Sarangani Pride by Sen. Manny Pacquiao, was found dehydrated and malnourished in the upland village of Batian on January 2, and was brought by the municipal government staff to the Philippine Eagle Center (PEC) in Davao City. The release team was composed of Philippine Eagle Foundation (PEF) Director for Conser vation Dr. Jayson Ibanez, PEC Executive Director Dennis Salvador, Maitum OIC-Municipal Environment and Natural Resources Officer Nanette Nacional, City Environment and Natural Resources Officer-Ki-
400
The estimated number of pairs of Philippine Eagles left in the wild
amba Jhing Guilao, Department of Env ironment and Natura l Resources Soccsksargen region representatives and Sarangani Information Office.
Salvador said the eagle was released on the basis of its health and physical conditions. During its rehabilitation, an x-ray result showed an embedded pellet in its left groin, and had to be nurtured into prime condition. A team of biologists will be monitoring the bird’s condition for 10 days. “Our staff will be monitoring this eagle postrelease via satellite and radio transmitter. We want to make sure that the eaglet will be accepted back by its parents and fed until it fully fledges,” Salvador said. According to Executive Director Emma Nebran of the Sarangani Environmental Conservation and Protection Center (ECPC), the forest where the eaglet was released is considered the last frontier of the province. “Mount Busa is the remaining forest we have here in Sarangani, and we must protect, conserve and preserve the biodiversity that we have here,” she said. She added that the provincial government, headed by Gov. Steve
Solon, supports efforts in protecting Mount Busa and has committed funds to support conservation initiatives in the area. The 114,000-hectare Mount Busa, which covers the towns of Maasim, Kiamba and Maitum, is threatened by land conversion to farmland, kaingin (slash-andburn), wildlife hunting, illegal logging and mining. In a related development, Maitum Mayor Alexander Bryan Reganit said the municipal government would declare the barangays of Batian and Tuanadatu as protected areas. He pointed out that the presence of the Philippine Eagle in the forest of Maitum shows that it is still pristine, healthy and is worth conserving. He said local communities could help in the conservation by informing local authorities in case of sightings of birds in distress. The PEC estimates that there are only about 400 pairs of Philippine Eagles left in the wild in Mindanao, Samar, Leyte and Luzon. Sarangani Information Office
he Asean Centre for Biodiversity (ACB) and Kf W Development Bank signed the second phase of the ACBKf W Small Grants Programme (SGP), funded by the German government, in order to continue promoting biodiversity protection while providing alternative livelihood opportunities to the local communities of Asean Heritage Parks (AHPs). The financing and separate agreements, instruments that detail the arrangement of fund transfer, project design and implementation of the SGP, were signed recently by ACB Executive Director Roberto V. Oliva and KfW East Asia and Pacific Director Dr. Christine Heimburger at a hotel in Mandaluyong City. Also present during the signing were Michael Hasper, deputy head of mission of the Embassy of the Federal Republic of Germany Manila; Reinhold Strauss, regional manager of KfW for East Asia and Pacific; Clarissa Arida, director of ACB Programme Development and Implementation; and Corazon de Jesus Jr., coordinator of the SGP Project. “The overall objective of the SGP is the strengthening of biodiversity protection and management of natural resources in line with the basic needs of the local population in the Asean region by strengthening the ACB in its role to
promote biodiversity protection. The first phase, which started in 2014, is currently being implemented in selected Asean Heritage Parks in Myanmar and Indonesia,” Heimburger said. “We are always thankful for the support of the German government through KfW to the Asean region, and to the conservation of its rich biodiversity. The SGP provides an opportunity to not only highlight the conservation efforts in the AHPs, but also the importance of collaborative management in these parks, bringing in the participation and involvement of other stakeholders,” Oliva said. Other than conservation, the SGP also emphasizes livelihood interventions for communities living in adjacent areas of AHPs. These interventions are aimed at minimizing the dependence of these communities on the resources within the protected areas and, at the same time, involving them in conservation activities. The ACB is an intergovernmental organization that facilitates cooperation and coordination among the Asean memberstates and with relevant national governments, regional and international organizations on the conser vation and sustainable use of biological diversity, guided by fair and equitable sharing of benefits arising from the use of such natural resources.
Deutsche Bank vows to end new coal lending in line with Paris deal
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he Paris Agreement and the global divestment campaign has secured one of its biggest victories to date, after banking giant Deutsche Bank announced it would halt investment in new coal projects in line with its commitment to the international climatechange treaty. In a short statement on its web site under the heading“Amended Guidelines for Coal Financing, “the European banking giant said the company and its subsidiaries“will not grant new financing for greenfield thermal-coal mining and new coal-fired power-plant construction.” It added that the bank also will “gradually reduce its existing exposure to the thermalcoal mining sector”. The bank said the reforms were directly linked to its support for the Paris Agreement, which in late 2015 committed all governments to the development of a net zeroemission economy this century. “By signing the Paris Pledge for Action, alongside over 400 private and public organizations, the bank has welcomed the universal climate agreement made at the 2015 Climate Summit in Paris,” the statement read.
“This emphasizes the bank’s commitment to protect the climate and to contribute to the overall targets set by the Paris Agreement to limit global warming to 2 degrees Celsius above pre-industrial levels.”The move also follows a high-profile 2014 campaign in Deutsche Bank’s native Germany, which led to the bank pulling out of a deal to invest in the expansion of the Abbott Point coal port in Australia. The latest decision is part of a growing trend that has seen thousands of investors commit to divest their holdings in coal and other carbonintensive projects, following warnings they could be investing in a “carbon bubble”. Some analysts have warned that if policymakers honor the commitments in the Paris Agreement demand for coal, oil and other carbonintensive fuels will fall sharply in the coming decades as rival clean technologies become increasingly dominant. They argue that as a result many fossil-fuel assets that promise long-term returns are overvalued and could deliver diminishing returns in the future, with the most carbon-intensive assets, such as coal, deemed the most at risk.
Trump’s nominee appears poised to cut EPA with a scalpel, not a cleaver
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A SHINGTON—Scott Pruitt, President Donald J. Trump’s pick to run the Environmental Protection Agency (EPA), is drawing up plans to move forward on the president’s campaign promise to “get rid of ” the agency he hopes to head. He has a blueprint to repeal climate-change rules, cut staffing levels, close regional offices and permanently weaken the agency’s regulatory authority. But Pruitt, a lawyer who made a career suing the EPA, is not likely to start with the kind of shock and awe Trump has used to disorient Washington. Instead, he will use the legal tools at his disposal to pare back the agency’s reach and power, and trim its budget selectively. “Here’s my impression about Pruitt: I don’t think he’s going in there to blow up the agency,” said Jeffrey Holmstead, a senior EPA official during the George W. Bush administration who has been mentioned as a possible deputy to Pruitt, and who has joined forces
with him on lawsuits against the agency. “I think, he’ll be very careful to make sure they’ve done everything legally to cross all the t’s and dot all the i’s.” With a zeal that has shocked or thrilled much of the countr y, Trump has been making good on campaign promises that once seemed outlandish, and those pledges included a vow to dismantle the agency charged with protecting the nation’s air, water and public health “ in almost ever y form.” Myron Ebell, an internationally prominent climate-change denier who led Trump’s EPA transition team, has recommended that the new administration slash the EPA’s staff by two-thirds, to 5,000 from about 15,000. And the president has promised to “eliminate” former President Barack Obama’s major environmental regulations, including a global-warming rule that was one of Obama’s proudest achievements and another major regulation to curb pollution in lakes,
streams and rivers. “Environmental protection, what they do is a disgrace,” Trump said after the election. “Every week they come out with new regulations.” But in Pruitt, who is expected to be confirmed by the Senate this week, the president has tapped a surgeon, not a butcher, to fulfill those pledges. As much as anyone, Pruitt knows the legal intricacies of environmental regulation— and deregulation. As Oklahoma’s attorney general for the past six years, he has led or taken part in 14 lawsuits against the EPA His changes may not have the dramatic flair favored by Trump, but they could weaken the agency’s authority even long after Trump has left office. “ The point here will be, more than in any prior administrat ion, to reduce t he agenc y ’s effectiveness so much that it can’t recover even when t he politica l w inds change,” said David Doniger, an EPA lawyer in the Clinton administration who now works for the Natural
Resources Defense Council, an advocacy group. The problem with many of Trump’s promises for the environmental agency is that they cannot be met quickly without violating the law. Tr ump is ex pected to sig n an executive action announcing the repea l of Obama’s ambitious but contentious reg ulations on planet-war ming carbon-dioxide pol lution soon after Pr uitt is confir med. But lega l ly, it w i l l be impossible for Tr u mp, or P r u it t , to do that w ith the stroke of a pen. A completed reg u lation must go through the same arduous process to be reversed. Even if he could kill the Obamaera Clean Power Plan outright, he would not eliminate a legal requirement for the EPA to continue regulating greenhouse-gas emissions. A repeal would simply force the Trump administration to write its own climate rule. Pruitt’s allies and advisers say he is aware of the gap between
Trump’s demands and the requirements of the law, and he is carefully plotting out a course to go after the EPA with a scalpel rather than a meat cleaver. Pruitt has not spoken to the news media since Trump nominated him in December. However, in his answers to senators during a Januar y confirmation hearing, and in his written answers to over 1,000 follow-up questions, Pr uitt made c lear that while he is no fan of federal environmental regulations, he does intend to hew to the laws that require them. “If confirmed, I will implem e nt t h e l a w s t h a t E PA i s charged to administer,” he wrote to Sen. Thomas Carper of Delaware, the senior Democrat on the Senate Environment and Public Works Committee. Among those laws, Pruitt said in his answers, is the Clean Air Act provision requiring that the EPA regulate the carbon dioxide pol lution that warms the planet. “I believe the administrator
has an important role when it comes to the regulation of carbon dioxide,” he wrote. That indicates that if Trump repeals the Obama climate-change rule, Pruitt is prepared to write a Trump climate rule—but one that is far less environmentally aggressive and far friendlier to industry. In 2014, as he prepared to sue the Obama administration over the climate-change rules, Pruitt wrote a draft of what such a rule might look like, noting, “An anticarbon agenda should not be forced upon the public through executive or administrative fiat”. The Obama climate plan is aimed at transforming the nation’s electr ic-power system, driving it away from fossil fuels to renewable sources of energy. It would most likely close most of the nation’s approximately 600 coal-fired power plants and replace them with wind and solar facilities, aiming to cut 2005 levels of greenhouse-gas pollution nearly a third by 2030. New York Times News Service
Biodiversity Monday BusinessMirror
Asean Champions of Biodiversity Media Category 2014
Monday, Febuary 13, 2017 A13
Editor: Lyn Resurreccion • www.businessmirror.com.ph
From mining to ecotourism
Renewed hope for Dinagat Islands E By Jonathan L. Mayuga
@jonlmayuga
She said 82 percent of the income of all mining companies go to the companies, with only 18 percent going to the government. Of the 18 percent, 95 percent goes to the national government, leaving only 5 percent for the local government. Lopez said communities rarely benefit from whatever taxes mining companies paid in exchange for the billions worth of mineral deposits they ship out of the country. She noted that only 20 percent of the people from Dinagat are employed by mining companies. “Mining is not labor-intensive. It is capital-intensive. In 2014 there was a government report that stated that mining has created 235,000 jobs all over the country, while tourism has [provided] 4.7 million [jobs],” she said.
nvironment Secretary Regina Paz L. Lopez has ordered the closure of 23 mining operations and suspended five others for failing mining and environmental standards on February 2.
Accord ing to L opez, m ining h a s on ly c au sed soc i a l i nju s t ice i n m a ny a f fe c t e d com mu n it ies, a s it c au ses m a ssive env i ronment a l dest r uc t ion a nd su f fer i ng to t he people. Such happened on Dinagat Islands, the island-province in the Caraga region with a population of 127,152, according to a 2015 census of population. Dinagat Islands is known as the “Mystical Island, Province of Love.” Rich in natural resources, it was declared as mineral reservation area by Proclamation 391, s. 1939 on March 13, 1939, by President Manuel L. Quezon. It was declared a province by virtue of Republic Act 9355, signed on October 2, 2006, by President Gloria Macapagal-Arroyo. Dinagat Islands has seven towns: Dinagat, Basilisa, Cagdinao, Libjo, Loreto, San Jose and Tubajon.
Besieged by mining
Lopez, a staunch environmental advocate, now wants to transform the entire island-province from a mining to an ecotourism haven and nature reserve, where the people will be the primary beneficiaries of what its natural wealth on land and surrounding marine environment has to offer, something local officials and its people have been hoping for. These are mines operated by the AAMPHIL Natural Resources Exploration, Kromico Inc., SinoSteel Philippines H.Y. Mining Corp., Oriental Synergy Mining Corp., Wellex Mining Corp., Libjo Mining Corp. and Oriental Vision Mining Phils. Corp. For yea rs, since Dinagat ’s declaration as a mineral land reser vation, Lopez said mining has caused massive environmental destruction to the island ’s forest ecosystems. The massive extraction of its rich mineral deposits caused Dinagat Islands to lose much of its forest ecosystems and severely affected rivers and watersheds, she said.
Biodiversity
The Alyansa Tigil Mina (ATM) said more than 20 mining companies have mining claims over various parts of the province, covering a total of 69,205.74 hectares, or approximately 69 percent of its total land area of 1,036.34 square kilometers or 103,634 hectares. A total of 19 mining companies have approved Mineral Production Sharing Agreements (MPSAs) over Dinagat Islands, covering a total of 44,480.52 hectares, and many of these mining tenements overlap with supposedly conservation areas. ATM records showed that the total land area with overlapping mining claims over conser vation areas is 6,289.67 hectares, an area larger than Caloocan City’s 5,320 hectares. ATM said four mining companies have pending applications for MPSAs covering a total of 8,091 hectares.
Green groups back Lopez
ATM and various environmental
69,205.74 ha The number of hectares, or 69 percent of Dinagat Islands’ land area, covered by claims of 20 mining companies groups lauded Lopez for her decision to close and suspend some mining operations. Clemente Bautista, national coordinator of the K alikasanPeople’s Network for the Environment (Kalikasan-PNE), said the operation of large-scale and corporate mining in Mindanao, especially on Dinagat Islands, has brought so much environmental degradation, resource depletion and widespread poverty to our communities. Besides c losing these mines, B aut i st a s a id t he gover n ment shou ld be ready i n prov id i ng i m me d i at e re l ie f to t he a f fe c te d com mu n it ies. “In the short term, miners should be given alternative livelihoods and financial assistance to cope with their economic displacement. Local industries, particularly agriculture and fishing, should be prioritized for development, particularly in island-based ecosystem like Dinagat,” he said. More i mpor t a nt , B aut i st a said, it is important to implement a land-transfer program that will benefit farmers and affected miners who stand to lose their jobs and livelihood. “We suggest to Secretary Lopez to directly coordinate with [Agrarian Reform] Secretary [Rafael] Mariano in implementing this. Providing land to the tillers will ensure [their] source of livelihood and food for the family. Simultaneously, the DENR and the government should immediately rehabilitate the affected ecosystems in the area, particularly the water source and marine areas,” Bautista said. Farmers and those living on the Dinagat Islands do not own properties because of the island’ sstatus as a mineral land reservation. Many of them have been denied the right to own land even for their own homes or small farms. While lauding Lopez’s political will, Bautista said the decision to close the mines is a temporary victory. “DENR Secretary Lopez and President Duterte should pass the people’s mining bill, which ensures both the welfare and interest of our people and environment,” he added.
Rich biodiversity
Director Theresa Mundita S. Lim of the DENR’s Biodiversity Management Bureau (BMB) said the decision to stop mining on Dinagat Islands wou ld boost the government effort to protect and conser ve the countr y’s rich biodiversity. Lim added that previous studies conducted by the DENR-BMB recommended rationalization of Dinagat’s land use. Lopez’s pronouncement, Lim said, promises to boost the ecological services
More jobs, livelihood
AN area on Dinagat not affected by mining. DENR Strategic Communication and Initiatives Service
An aerial survey of destruction on Dinagat. DENR Strategic Communication and Initiatives Service
provided by Dinagat Islands’s unique ecosystems. “I’ve been to Dinagat. It has a vast bonsai forest. Scientists also discovered a stick insect which could be unique to Dinagat,” Lim said. Lim also noted that, besides being ideal for fishing, Dinagat Islands and its surrounding marine environment is rich in biological diversity.
Unique species
The island is home to unique species of endemic wildlife, such as rodents, tarsiers and several bird species. In 2006 two areas on Dinagat Islands—the Mount Redondo and Mount Kambinliw— were declared as key biodiversity areas (KBAs), and became part of the 117 KBAs under the Philippine Biodiversity Conservation Priority-Setting Program. A previously believed to be extinct species of rat, such as the Dinagat cloud rat, was rediscovered by scientists on Dinagat Islands. The International Union for the Conservation of Nature listed the Dinagat cloud rat to be a critically endangered species. Dinagat Islands is a lso home to t he end angered Dinagat g y mnure or the Dinagat ha ir y-ta i led rat, dec lared by the EDGE Species Programme of t he Zoolog ic a l Soc iet y of London as one of the top 100 most evolutionar y distinct and globa l ly endangered species in the world. The province is also home to the Dinagat tarsier, which scientists recently declared as unique to the island and an entirely different species from the Bohol
tarsiers, or those found in other areas in Mindanao.
Bonsai forest
The island-province also hosts around 1,000 hectares of bonsai forest, which Lopez said could be the largest in the country. Lim added the pygmy forest itself is a promising ecotourism magnet. When tourists start arriving, people can start small environment-friendly and ecosystem-based enterprises. Lim added that the province’s ecosystem remains vastly unexplored and offers a lot of promising potential for scientific research and discovery, particularly for plants with pharmaceutical potentials. “Its wide variety of plants may have genetic materials where communities can benefit once developed for its medicinal or pharmaceutical value,” she said. Lim added that to maximize Dinagat Islands’s potential, it is important to provide alternative jobs and livelihood to the communities. “Side by side with the gradual phaseout of mining in the area, it is important to introduce livelihood opportunities,” she said.
Protection against mining
Lopez said she would ask President Duterte to repeal Proclamation 391, which declared Dinagat Islands as a mineral land reservation. She would also push for its declaration as protected area covered under the National Integrated Protected Areas System (Nipas) Act. Once declared as a protected area, Dinagat Islands would be protected against future mining projects. Executive Order
79 declares protected areas as “off-limits” to mining. Repea ling Proclamation 391 w il l require the sig ni n g o f a n o t h e r p r e s i d e nt i a l proc lamation or an execut i v e o r d e r b y D u t e r t e . Once declared as a protected area, an act of Congress is needed to back it up with adequate funding to sustain rehabi litation and development efforts geared toward conser vation.
Ecotourism
Lopez said Dinagat Islands has vast ecotourism potentials. She added there are more reasons to develop it, rather than allowing mining companies to continue exploiting its rich mineral deposits for profit. Blessed w ith beautiful beac hes, L opez sa id Dinagat Islands is a potentia l ecotourism destination. Pr istine waters and corals surrounding the island ma ke it idea l for sw imming, water spor ts and other recreationa l activ ities sought by loca l and foreig n tour ists.
Still poor
“I want to give Dinagat a rest. They [mining companies] have been mining in Dinagat for 77 years,” Lopez said. She lamented that people in the province remain poor after decades of mining. “If it is true that people have benefited from mining, why are the people on the island still poor?” she said. Lopez argued that mining contribution to the national economy is nil, chipping only less than 1 percent to the country’s GDP.
Lopez said more jobs and livelihood opportunities await people in ecotourism more than mining. She insisted that sustainable economic development could be ac h ieved w it hout dest roy ing the environment and causing suffering to people. Using the sustainable integrated area development (SIAD) approach, Lopez said the DENR would assume the developmental role of providing sustainable livelihood, while teaching environmental conservation to affected communities, such as the Dinagat Islands. “We will create ecological economic zones where there is respect for nature and value adding in resources, and where people benefit from the resources of the place,” Lopez said. The DENR chief added that massive planning and consultations will be conducted from February 16 to 18 in areas affected by the closure orders, including Dinagat Islands, where alternative jobs for displaced mine workers will be discussed. Lopez said she is intending to use the mine-rehabilitation fund of the closed mining firms in rehabilitating mining sites “to heal the land”.
Partnership
The DENR is also tapping the services of a team of experts from the Sixto K. Roxas Foundation in the rehabilitation of the mining sites, and is looking at the potential of biochar as a tool for mine rehabilitation. Affected mine workers will also be tapped for reforestation under the Enhanced National Greening Program, as well as the government’s planned expansion of bamboo and mangrove plantations to fight climate change and poverty. Under the SI A D approach, “mini economic zones” will be created in order to generate employ ment , l ive l i hood a nd income-generating activities in communities where mining companies operate, Lopez assured. “Dinagat is beautiful. It has a bonsai forest, I think the largest in the countr y. That is an ecotourism pull. It has forests, mountains, corals, islands. It has great potential. But, first, the mining must stop, then we can sell the beauty of the place,” she said. According to Lopez, Dinagat has a total of 185 potential ecotourism sites, from which the people can benefit. “ It shou ld be D i n agat for t he people of Dinagat. T hat is a rea development. T hat is soc i a l just ice,” she sa id.
A14 Monday, February 13, 2017 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
Demand for Philippine nurses: Here we go again
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HE headline from the BBC story read “Nursing Dream Turns Sour in the Philippines”. “At the beginning of this year, more than 200,000 registered Philippine nurses could not find work, and an estimated 80,000 are graduating this year to join an already saturated job market. Western countries were not hiring, so they’re all now stuck in the Philippines. A decade ago, it all seemed so simple. Would-be nurses, most, but not all, of whom were female, studied and worked for a few years in the Philippines before taking up far more lucrative jobs abroad.” That was on July 5, 2012.
Now at the beginning of 2017, the headlines read (interaksyon.com) “United Kingdom Needs More Filipino Nurses” and from The Atlantic magazine “The US Is Running Out of Nurses”. The normal boom-bust business cycle almost always creates a situation where excess demand creates a shortage of supply. Realizing the opportunities to fill that demand, supply often increases to the point of overshooting the demand. The equilibrium between demand and supply is rarely exactly in balance for an extended period. During the early part of the 21st century, there was a great demand for Filipinos abroad. While superbly qualified for call-center positions, many large outsourcing companies found that hiring newly graduated nurses was a losing proposition. Many were taking employment only while waiting for overseas deployment. Out of the 21,500 foreign-trained registered nurses who sat for the United States Certification Program Nurse Qualifying Exam in 2005, 55 percent were educated in the Philippines. Then the pendulum went the other way. Nursing schools seemed to spring up on every corner, creating excess supply. Further, many of these schools that wanted to capitalize on the industry turned out unqualified graduates who were unable to find foreign jobs and were barely suitable for local employment. Now demand in the foreign markets is rising once again. From The Atlantic: “America’s 3 million nurses make up the largest segment of the health-care work force, and nursing is currently one of the fastestgrowing occupations in the country. Despite that growth, demand is outpacing supply. According to the Bureau of Labor Statistics, 1.2 million vacancies will emerge for registered nurses between 2014 and 2022.” The demand for qualified nurses in the United Kingdom is becoming severe enough that the UK is lowering the minimum standard for its International English Language Testing System. And the demand is for the most lucrative paying jobs. From Interaksyon.com: “Philippine Labor Attaché Joan Lavilla said nurses will be needed in the fields of cardiology, critical care, cardiac surgery, cardio thoracic, coronary care and catheter lab, and theater practitioners.” This is obviously a good development for those young Filipinos who wish to pursue a health-care career. It may also signal a longer-term trend. The Atlantic magazine reports that “by 2025, the shortfall is expected to be more than twice as large as any nurse shortage experienced since the introduction of Medicare and Medicaid in the mid-1960s.” Further, “between 2010 and 2030, the population of senior citizens will increase by 75 percent”. However, the caution once again is that the government must be vigilant in monitoring the educational standards provided to our nurses. We cannot allow the same failures that occurred in the past. While it is all well and good that many foreign health care-providing institutions prefer that Filipinos fill the nursing positions, competition from Sri Lanka, India and many African countries is growing. We cannot be complacent as we were before.
The problem with free tuition Atty. Jose Ferdinand M. Rojas II
RISING SUN
I
N a few months, the next school year will begin, but the proposed free-tuition legislation is still being discussed. One of the most recent developments was the joint position paper released by economic managers, basically stating that the proposed free-tuition policy will not be an efficient use of government funds.
In lieu of paying the tuition fees of undergraduate students in state universities and colleges (SUCs), Socioeconomic Planning Secretary Ernesto M. Pernia, Finance Secretary Carlos G. Dominguez III and Budget Secretary Benjamin E. Diokno recommended the full funding of the Unified Student Financial Assistance System for Tertiary Education (UniFAST). They said it is a “better alternative because it provides a more coherent and com-
prehensive framework to address the educational needs of the students and is better designed to ensure a more efficient and effective use of government funds”. The economic experts cited several reasons, first of which is the fact that only 12 percent of the students in SUCs belong to the bottom 20 percent of the family-income classification. This means that government funding will largely be spent paying for tuition of
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enrolments increase in the coming years, this amount would still balloon substantially. The UniFAST was established in 2014 through Republic Act 10687. Its task is to unify and harmonize all modalities of publicly funded Student Financial Assistance Programs (StuFAPs), like scholarships, grants-in-aid and student loans for tertiary education. The economic experts see it as a wiser, more prudent move to support UniFAST instead so it could do its job efficiently. They all agree that “the UniFAST is better designed to ensure a more efficient and effective use of government funds”. The economic managers raised valid points our lawmakers need to consider before the legislation is passed. This issue definitely deserves thorough study since the nation’s budget is not that huge and we definitely need to be prudent about our spending priorities. Education is very important, more reason the limited money should go to those who need it most.
Trump’s chance to walk back his Asia bluster
Since 2005
✝ Ambassador Antonio L. Cabangon Chua
students who may be able to afford to pay, anyway. Another reason given was that tuition constitutes only one-third of the annual cost of attending college. Other expenses include living expenses and instructional materials. That said, the poor families would still be unable to send their children to college even if tuition were free, because it would still be difficult to raise the bigger chunk of money (two-thirds) needed to pay for a full college education. Apart from these important issues, the economic managers are concerned about the possible exodus of students from private higher educational institutions toward the SUCs. This would have an effect on the quality of graduates and also affect the government’s budget. “The budgetary support for free tuition will be difficult to sustain,” they said in their position paper. The SUCs would require about P28 billion from the government to cover the tuition of the 1.4 million students currently enrolled. If the
Noah Feldman
BLOOMBERG
U
.S. President Donald J. Trump’s phone call with Chinese President Xi Jinping and the weekend visit of Japanese Prime Minister Shinzo Abe are important reminders of a basic reality: While we Americans obsess over the constitutionality of the president’s executive order on immigration, the rest of the world keeps on going. Measured by the number of people it affects, foreign policy outranks domestic affairs. If Trump manages to create diplomatic chaos in Asia, history won’t pay much attention to the rest of his presidency.
The call with Xi, in which Trump agreed to continue the US’s “One China” policy, was a sign of foreignpolicy rationality—and a recognition the US is weaker relative to China than Trump seems to have imagined before he took office. As if to prove it, Xi used Trumpstyle tactics before the call, insisting he wouldn’t get on the phone unless Trump agreed in advance to embrace One China. That’s more or less what Trump did to Mexican President Enrique Peña Nieto, insisting Peña Nieto shouldn’t come to Washington unless he agreed in advance to pay for a wall along the US-Mexico border. The difference, of course, is Peña Nieto didn’t knuckle under, preferring to give up the visit, and Trump did. It can’t have been pleasant for Trump to admit that, as the White House put it, he “agreed, at the request of President Xi, to honor our One China policy”. But Trump had
little choice. He couldn’t forgo all communication with the leader of the second-most-influential country in the world. In practice, One China means only that if a country wants to have diplomatic relations with China, it can’t also have formal diplomatic relations with Taiwan. US presidents, since Richard Nixon, have been prepared to live with this. But Trump called the policy into question last December through his much-publicized phone call with Taiwanese President Tsai Ing-wen. Then, Trump told Fox News, “I don’t know why we have to be bound by a One China policy unless we make a deal with China having to do with other things, including trade.” Trump now has an answer to his question: The reason the US has to be bound by the policy is that it would lose too much by abandoning it. The price that China could extract
In practice, One China means only that if a country wants to have diplomatic relations with China, it can’t also have formal diplomatic relations with Taiwan. US presidents, since Richard Nixon, have been prepared to live with this.
would be much too high for any benefit that might be gained by creating diplomatic ties with Taiwan. And that benefit would certainly be minimal. The US has very close de facto ties to Taiwan, including a purposefully vague quasicommitment to defending it from Chinese attack. The only reason to end the One China policy would have been to use it as a bargaining chip with China. Trump clearly thought that he might be able to gain concessions from doing so. Xi’s point in making the policy a condition of the phone call was to show Trump that he can’t change the terms of the bargain between the two countries unilaterally. This round went to Xi. Abe’s visit affords Trump another opportunity to walk back hostile comments and conduct Asia policy rationally. On the campaign trail, Trump sharply criticized the traditional US-Japan relationship, characterized by US security guarantees and strong trade ties. Among other things, Trump said the US should be “prepared to walk” in negotiations with Japan, leaving it to “defend itself against North Korea”. It might be good strategy in a real-estate deal to be able to walk
away from the table at any time. But that’s preposterous coming from a superpower, particularly one that has sought for almost 75 years to maintain its hegemony in the Pacific. It’s worth remembering that Japan didn’t choose to be under US security guarantees. The US made that arrangement after defeating Japan in World War II and forcing it to relinquish its capacity for offensive war on a permanent, constitutional basis. To walk away from the table with Japan would mean inviting Japan to arm itself and assert a dominant position in Asia. It would also signal US-weakness vis-à-vis China. Now Trump will have to use the visit to reassure Japan about US security guarantees—in other words, to walk back his previous policies. As for trade, Trump will have to explore some way to work out a bilateral deal, because his first week in office he trashed the Trans-Pacific Partnership (TPP) that would have included Japan. Abe had expended significant political capital getting legislative agreement to join the TPP. Trump will be hoping to take advantage of the efforts Abe made on behalf of closer ties to the US. That would be a lot easier if Trump hadn’t cut off Abe at the knees with his TPP announcement. The upshot is that Trump now has the chance to start pursuing a more tenable Asia policy. That would be good. And if it works, maybe he can start rethinking some of his domestic policies, too. I can think of at least one executive order that would benefit from being scrapped and redrafted from scratch.
opinion@businessmirror.com.ph
Opinion
Going global
What is the legacy of PPPs? What is yours?
BusinessMirror
By Alberto Agra
Joel L. Tan-Torres
PPP Lead
DEBIT CREDIT
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ECENTLY, our profession has been very active in its involvement in the international accountancy arena. The Philippines, through the Board of Accountancy (BOA), joined the rest of the nine other Asean countries in opening up for their accountants to have liberalized access to work in their territories with the signing of the Asean Mutual Recognition Arrangement (MRA) for Accountancy Services. I recently came from Semarang, Indonesia, for our regular meeting of the Asean Chartered Professional Accountants Coordinating Committee. This committee is responsible for putting in place the rules for the MRA implementation. I expect that, by the middle part of this year, our Certified Public Accountants (CPAs) can start applying with the Monitoring Committee of the BOA for qualification as Asean Chartered Professional Accountants who will be entitled to the mobility privileges of the MRA. I was elected in April 2016 for a three-year term to the United Nations Conference on Trade and Development Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (UN Isar). For this, I was nominated by both the Professional Regulatory Commission and the Department of Foreign Affairs to join the 34 members of the UN Isar Working Group of Experts, which includes nine African, seven Asian, six Latin American, three Eastern European and nine Western European and other states. The UN Isar was created in 1982, and is the focal point within the UN system to address issues of corporate transparency and accounting. The UN Isar regularly meets in Geneva to discuss important matters affecting the accountancy profession. I am honored to be the first Filipino to be elected to this position The BOA and the Philippine Institute of CPAs (Picpa) have been interacting with the various regional accountancy bodies, including Confederation of Asian and Pacific Accountants (Capa) and the Asean Federation of Accountants. In 2016 AFA meetings were held in Bangkok, Singapore and Vientiane, Lao. Capa had meetings in 2016 in Kuala Lumpur and Hyderabad, India. The Philippines will be hosting a Capa event this March. The Picpa, as the designated member of the International Federation of Accountants (Ifac), had been participating in the various activities, including attending of meetings, providing feedback to the discussion papers and updating of the Statement of Members Obligations. Ian Caruthers, the chairman of the International Public Sector Accounting Standard Board (IPSASB), visited the Philippines on October 12 and 13, 2016, and talked with the government accountants. The IPSASB is one of four independent standard-setting boards that are supported by the Ifac. Caruthers will visit again the Philippines to talk in the Government Association of CPAs and Philippine Association of Local Government Accountants in May. Prominent leaders of international accountancy bodies who have visited the Philippines in 2016 included Jarett Decker, head of the Centre for Financial Reporting Reform at the World Bank; Bonnie Sirois of the CFRR; Gerard Eee, president of the Institute of Singapore Chartered Accountants; Mark Campbell, head of International Capacity Building of Institute of Chartered Accountants of England and Wales; Lucia Real Martin, director of Emerging Markets of Association of Chartered Certified Accountants (Acca); Sha Ali Khan, director of Regulatory Development of Acca; Andrew Smart, head of Emerging Markets Asia of Acca; Alex Malley, CEO of CPA Australia; Peter Docherty, general manager of Public Practice at CPA Australia; Mark Chau, regional manager, International Employer and Emerging Markets of CPA Australia; Lyle Handfield, vice president
The Picpa, as the designated member of the International Federation of Accountants (Ifac), had been participating in the various activities, including attending of meetings, providing feedback to the discussion papers and updating of the Statement of Members Obligations. Ian Caruthers, the chairman of the International Public Sector Accounting Standard Board (IPSASB), visited the Philippines on October 12 and 13, 2016, and talked with the government accountants. International-Asia Pacific Business Development of CPA Canada; Eric Hespenheide, chairman of the Global Reporting Initiative (GRI); Michael Meehan, chief executive of GRI; Dato’ Mohammad Faiz Azmi, president, Malaysian Institute of Accountants; Roberto Tarallo, manager East Asia and Pacific region, Governance Global Practice, World Bank; Sonexay Silaphet, president of Asean Federation of Accountants; Patrick Corrigan, of AARC Ltd.; Josh Heniro, director, Southeast Asia Operations of the Institute of Management Accountants; Mieke Schrijver, the country coordinator for the Philippines of PUM Netherlands (PUM); Paul Hurks, Ferdi Beuting and Wim Boone, all from PUM; and Bou Tharin of the National Accountancy Council of Cambodia. These accounting leaders were able to exchange ideas with the BOA and other Filipino accountants on mutual areas of concern. The BOA now regularly interacts with the regulators and standard setters of other countries, including the Public Company Audit Oversight Board of the United States of America (USA), American Institute of Certified Public Accountants, National Association of Accounting State Boards of the USA, Financial Reporting Council of the United Kingdome, Accounting and Corporate Regulatory Authority of Singapore, Asean Audit Regulators Group, International Forum of Independent Audit Regulators, Asian-Oceanian StandardSetters Group and the Australian Accounting Standards Board. The interaction with these institutions brings to the attention of the BOA the latest developments and best practices in the area of accounting and auditing. Definitely, with all of these activities, the Philippine accountancy profession is now recognized as a bona-fide member the global accountancy community. This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@gmail.com. Joel L. Tan-Torres is the chairman of the Professional Regulatory Board of Accountancy. He is a Certified Public Accountant (CPA) who placed No. 1 in the May 1979 CPA Board Examinations. He is concurrently a tax partner of Reyes Tacandong & Co., CPAs. He was the former commissioner of the Bureau of Internal Revenue.
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his columnist particularly likes the description of a legacy project by Susan Bosak. She describes a legacy as being “about life and living. It’s about learning from the past, living in the present and building for the future”, and there is an “interconnection across time, with a need for those who have come before us and a responsibility to those who come after us”. She continues by saying that legacy “gives you a perspective on what’s important”, and that “it helps us decide the kind of life we want to live and the kind of world we want to live in.” n The givers and beneficiaries. In a PPP arrangement, the government and the private sector, jointly, are the givers. They are contractually, legally and even morally bound to the consumers, end-users and us, the beneficiaries of PPP projects. The people are the
true north of PPPs. Thus, all PPPs must be legacy projects. n The interconnection. PPPs are inter-, even intra-, generational. PPP projects benefit not just the future, but also the present generation. For 50-year PPPs, the benefits of a project can already be felt and
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PPPs are inter-, even intra-, generational. PPP projects benefit not just the future, but also the present generation. For 50-year PPPs, the benefits of a project can already be felt and realized even before the contract expires. However, for a PPP project to be truly successful, the givers and the beneficiaries must be cochampions and co-owners, and parts of the gift.
realized even before the contract expires. However, for a PPP project to be truly successful, the givers and the beneficiaries must be cochampions and co-owners, and parts of the gift. n Not just material gifts. While PPP projects are tangible, PPP legacies are more than the gifts themselves. Beyond the roads, bridges, reclaimed land, new markets, water systems, health facilities, and other hand and soft PPP projects, PPP must bring about change, happiness, comfort and better quality of life. PPPs are about
New code of corporate governance for publicly listed companies Atty. Lorna Patajo-Kapunan
legally speaking
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HE Securities and Exchange Commission (SEC)—in its en banc meeting on November 10, 2016—approved the Code of Corporate Governance for Publicly Listed Companies. Pursuant to SEC Memorandum Circular 19, the code took effect on January 1, 2016. All publicly listed companies are required to submit a new manual on corporate governance to the SEC on or before May 31, 2017. The draft of the code was released by the SEC on September 22, 2016, with feedback period until October 14, 2016. Precursor was the Philippine Corporate Governance Blueprint of 2015. The Code of Corporate Governance is intended to raise the corporate governance standards of Philippine corporations to a level on a par with its regional and global counterparts. The latest G-20/ Organisation for Economic Cooperation and Development Principles of Corporate Governance and the Asean Corporate Governance Scorecard were used as key reference materials in the drafting of the code. The code defines “corporate governance” as “the system of stewardship and control to guide organizations in fulfilling their long-term economic, moral, legal and social obligations toward their stakeholders. It is a system of direction, feedback and control using regulations, performance standards and ethical guidelines to hold the board and senior management accountable for ensuring ethical behavior—reconciling long-term customer satisfaction with shareholder value—to the benefit of all stakeholders and society. Its purpose is to maximize the organization’s long-term success, creating sustainable value for its shareholders, stakeholders and the nation.” The code adopts the “Comply or Explain” approach. This approach combines voluntary compliance with mandatory disclosure. Companies do not have to comply with the code, but they must state in their annual corporate governance reports whether they comply with the code provisions, identify any areas of noncompliance and explain the reasons for noncompliance. The code does not, in any way, prescribe a “one-size-fits-all ” framework. It is designed to allow boards some flexibility in establishing their corporate governance arrangements. Larger companies and financial institutions would generally be expected to follow most of the provisions. Smaller companies may decide that the cost of some of the provisions outweigh
the benefits, or are less relevant in their case. Hence, the “Principle of Proportionality” is considered in the application of its provisions. The code is arranged into Principles, Recommendations and Explanations. According to the SEC, the Principles can be considered as high-level statements of corporate governance good practice, and are applicable to all companies. The Recommendations are objective criteria that are intended to identify the specific features of corporate governance good practice that are recommended for companies operating according to the code. Alternatives to a Recommendation may be justified in particular circumstances if good governance can be achieved by other means. When a Recommendation is not complied with, the company must disclose and describe this noncompliance, and explain how the overall principle is being achieved. The alternative should be consistent with the overall Principle. Description and explanations should be written in plain language and in a clear, complete, objective and precise manner so that shareholders and other stakeholders can assess the company’s governance framework. Quoted hereunder are the 16 Principles listed in the code:
The board’s governance responsibilities
n Principle 1: The company should be headed by a competent, working board to foster the longterm success of the corporation, and to sustain its competitiveness and profitability in a manner consistent with its corporate objectives and the long-term best interest of its shareholders and other stakeholders. n Principle 2: The fiduciary roles, responsibilities and accountabilities of the Board as provided under the law, the company’s articles and bylaws, and other legal
The code is arranged into Principles, Recommendations and Explanations. According to the SEC, the Principles can be considered as high-level statements of corporate governance good practice, and are applicable to all companies. pronouncements and guidelines should be clearly made known to all directors, as well as to stockholders and other stakeholders. n Principle 3: Board committees should be set up to the extent possible to support the effective performance of the Board’s functions, particularly with respect to audit, risk management, related party transactions and other key corporate governance concerns, such as nomination and renumeration. The composition, functions and responsibilities of all committees established should be contained in a publicly available Committee Charter. n Principle 4: To show full commitment to the company, the directors should devote the time and attention necessary to properly and effectively perform their duties and responsibilities, including sufficient time to be familiar with the corporation’s business. n Principle 5: The Board should endeavor to exercise objective and independent judgment on all corporate affairs. n Principle 6: The best measure of the Board’s effectiveness is through an assessment process. The Board should regularly carry out evaluations to appraise its performance as a body, and assess whether it possesses the right mix of backgrounds and competencies. n Principle 7: Members of the Board are duty-bound to apply high ethical standards, taking into account the interest of all stakeholders.
Disclosure and transparency
n Principle 8: The company should establish corporate disclosure policies and procedures that are practical and in accordance with best practices and regulatory expectations. n Principle 9: The company should establish standards for the appropriate selection of an external auditor, and exercise effective oversight of the same to strengthen the external auditor’s independent and enhance audit quality. n Principle 10: The company should ensure that material and reportable nonfinancial and sustainability issues are disclosed.
“life and the living”. n No need to die. For those who issued the PPP policy, awarded the contract and cut the ribbon during the inauguration, they do not have to die first before the gifts are given and enjoyed by the people. Apologies, for being morbid. The preparation of the PPP gift happens after the notice to proceed is issued and the gift is bequeathed right after construction. n “Learning from the past, living in the present, and building for the future.” The country has a wealth of experience on PPPs, at the national and local government levels, even at the government corporation level. There is a need to document the many ups and downs of PPPs. These learnings are valuable in terms of the current journey of the new administration. In the future, we will see, hopefully, more legacy PPP projects. Now may be a good time to reflect on your legacy. What is yours? What is important to you and the people you care and are responsible for? What do you want this world to be?
n Principle 11: The company should maintain a comprehensive and cost-efficient communication channel for disseminating relevant information. This channel is crucial for informed decision-making by investors, stakeholders and other interested users.
Internal control system and risk-management framework
n Principle 12: To ensure the integrity, transparency and proper governance in the conduct of its affairs, the company should have a strong and effective internal control system and enterprise risk management framework.
Cultivating a synergic relationship with shareholders
n Principle 13: The company should treat all shareholders fairly and equitably, and also recognize, protect and facilitate the exercise of their rights.
Duties to stakeholders
n Principle 14: The rights of stakeholders established by law, by contractual relations and through voluntary commitments must be respected. Where stakeholders’ rights and/or interests are at stake, stakeholders should have the opportunity to obtain prompt effective redress for the violation of their rights. n Principle 15: A mechanism for employee participation should be developed to create a symbolic environment, realize the company’s goals and participate in its corporate governance processes. n Principle 16: The company should be socially responsible in all its dealings with the communities where it operates. It should ensure that its interactions serve its environment and stakeholders in a positive and progressive manner that is fully supportive of its comprehensive and balanced development. According to the SEC, the Code of Corporate Governance for Publicly Listed Companies is the first of a series of codes that is intended to cover all types of corporations in the Philippines under supervision of the SEC. While the code sets the “Gold Standard” for governance in the corporate world, there are external factors that corporations have no control over—among them, the political decisions of our leaders; social, economic and financial risks that will affect the business climate; government stability; law and order; external and internal conflict; bureaucracy quality; the military/ police. It is imperative, therefore, that the corporate boards adopt a risk-management policy as part and parcel of corporate strategy and good governance!
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‘Areas not grappling with traffic should be exempted from higher car excise tax’
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By Jovee Marie N. dela Cruz
@joveemarie
o reduce the impact of the proposal to impose higher excise taxes on cars, the chairman of the House Committee on Ways and Means said it should only be implemented in areas where traffic is a major concern.
PDP-Laban Rep. Dakila Carlo E. Cua of Quirino, the panel chair, said the government should find ways to exempt areas with no traffic problems from higher excise taxes on automobiles. “I am not totally convinced with the proposal imposing excise tax on automobiles [to address traffic congestion in the country]. Traffic is limited to urban areas, like Metro Manila, Cebu and a few other parts of the country. In places like Quirino, traffic is not much of a problem,” Cua said. “We should find other solutions. A targeted solution would be better,” he added. Earlier, Finance Secretary Carlos
G. Dominguez III said the government’s proposal to raise excise taxes on automobiles would help ease the worsening traffic problem in Metro Manila. He noted that cars are now “very cheap” and higher taxes will temper sales growth. The proposal to increase excise taxes on vehicles is one of revenue-offsetting measures under the Duterte administration’s comprehensive tax-reform package, which seeks to lower the personal income tax rates. In its proposal, the government wants to levy, assess and collect an ad valorem tax on automobiles based on the manufacturer’s or importer’s selling price,
net of excise and value-added tax. Under the measure, if the net manufacturer’s price/importer’s selling price is P600,000, the excise tax will be 4 percent. If the net manufacturer’s price/ importer’s selling price is P600,000 to P1.1 million, the excise will be P24,000 plus 40 percent of the value in excess of P600,000 If the net manufacturer’s price/ importer’s selling price is P1.1 million to P2.1 million, the excise will be P224,000 plus 100 percent of the value in excess of P1.1 million. If the net manufacturer’s price/ importer’s selling price is P2.1 million, the excise will be P1,224,000 plus 200 percent of the value in excess of P2.1 million The bill also amends the definition of an automobile to mean “any four- or more wheeled motor vehicle regardless of seating capacity, which is propelled by gasoline, diesel, or any other automotive power except purely powered by electricity.” However, buses, trucks, cargo vans, jeeps/jeepneys/jeepney substitutes, single cab, chassis and special-purpose vehicles will not be considered as “automobiles”.
Cua said the lower chamber will listen to all the recommendations and suggestions of stakeholders during his committee’s third deliberation on the tax proposal on Monday. The session could focus on higher excise taxes on automobiles. Aside from the Department of Finance (DOF), the panel also invited officials of the departments of Transportation and Trade and Industry (DTI), the Land Transportation Franchising and Regulatory Board, Bureau of Customs and the Bureau of Internal Revenue. The committee also invited representatives from the automobile industry to give their position on the proposal. Among those invited are the Chamber of Automotive Manufacturers of the Philippines Inc. and the Association of Vehicle Importers and Distributors. Earlier, Dominguez said he is standing by his proposal to hike excise taxes on automobiles as a
way to ease traffic congestion and raise revenue collection. This is amid the plea of the DTI for the DOF to go slow on the auto industry, whose manufacturing operations in the country are currently being revived by the government through its Comprehensive Automotive Resurgence Strategy Program.
‘Imprudent’
Deput y Speaker and Liberal Party Rep. Romero S. Quimbo of Marikina City said it will be difficult for Congress to pass the tax-reform package as a whole or without amendments. “In my opinion, the entire tax package will have difficulty passing without amendments, as there are portions that are clearly objectionable for being antipoor and makes the country unattractive to investors,” Quimbo told the BusinessMirror. He said a radical overhaul of
the country’s tax system “is not only imprudent, time-wasting and fiscally unhealthy, but it will also bring about more harm than good in the long run”. Quimbo also called for more consultations with affected sectors whose tax privileges will be withdrawn, including business-process outsourcing companies, cooperatives and socialized-housing developers. According to Quimbo, the lower chamber and the DOF should prioritize the passage of the personal income tax-reform bill, which has been effectively held hostage by the contentious tax package of the DOF. “What is happening now is that the personal income-tax reform we have been asking for is being held hostage by the DOF, which has promised to ‘release’ it only if Congress gives a ransom in the form of additional excise taxes on fuel and other additional new taxes,” he said.
U.P. CONFERS GAWAD OBLATION AWARD TO VILLAR Former Senate President and Villar Group Chairman Manny Villar receives the UP Gawad Oblation Award for his extraordinary service and contribution to the university. In his acceptance speech, Villar expressed his thanks to the university for challenging him to dream big and helping him shape what he has become today. Conferring the award are outgoing UP President Alfredo Pascual and UP Vice President for Public Affairs Dr. Edna Co.
Tax-reform. . .
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The German financial services giant warned
that should spending accelerate, given the current administration’s vow to scale up the state of infrastructure in the country but without adequate revenue support from a practical tax-reform program, could spell problems for the economy in the medium to long term. “But given its loose fiscal stance, the government, in our view, would face market scrutiny over its ability to shore up revenues this year even before the reforms kick in, and to keep the deficit within the 3 percent of GDP ceiling,” the bank said. This pertains to the inadequacy or shortfall in the nation’s budget, as percent of local output, or the GDP, that in 2015 equaled 45.05 percent of GDP. Deitsche Bank said should the deficit further rise to 4 percent of GDP in the next two years because of inadequate revenues, the national government debt would push heigher to 50 percent of GDP just five years down the line. “Rising debt ratios do send the signal that the near-term economic gains from the government’s spending push would come with long-term pains, as interest payments increasingly eat up in the annual budgets,” the bank said. Adding to concerns is the stress from the erosion of the current-account surplus of the Philippines, which the bank forecasts to have reverted to a deficit in the last quarter of 2016. The current account has remained in a state of surplus for many years and meant that the Philippines has since become a net lender to economies around the world, whose current-account balance is in deficit. The bank sees a slower pace of growth in 2017, in contrast to the government’s higher growth target for the year. “Some upside to consumer spending can be expected from the recently approved pension increases for the Social Security System beneficiaries and the planned salary increases for military and civil servants,” the bank said. “But we are not keen to revise up our 5.8-percent growth outlook just yet, given risks of private-sector investment deceleration amid concerns over President Duterte’s controversial drug war and protectionist moves under a Trump-led US,” the bank added. The government projects growth to hit 6.5 percent to 7.5 percent for 2017 up until 2022. Bianca Cuaresma