Page 1


Wanted: Filipino

game changers

By Rizal Raoul Reyes @rizreyes



Amid |

CONOMISTS have emphasized that only a strong innovation ecosystem could boost the performance of the country’s agriculture and manufacturing sectors. Citing the US National Science Foundation, the United States Agency for International Development (Usaid) defined innovation ecosystem as referring to the “economic dynamics of the complex relationships between actors or entities whose functional goal is to enable technology development and innovation”. The “growth of the innovation ecosystem requires that two distinct but interdependent systems—the knowledge economy [driven by fundamental research] and the commercial economy [driven by the marketplace]— work together to move innovation from laboratory to marketplace,” as USAid report said. According to the report, the working together of these drivers allows “a fraction of profits from business” to be “channeled to support research activities, either directly or through government spending”. Continued on A2

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Wednesday, February 15, 2017 Vol. 12 No. 126



aying it is her “gift of love” to the Filipino people on Valentine’s Day, Environment Secretary Regina Paz L. Lopez on Tuesday announced the cancellation of a total of 75 mineral productionsharing agreements (MPSAs) to protect the country’s watersheds.


Is responsible mining feasible?    Edgardo j. angara


The number of MPSAs canceled by the DENR chief

Lopez also canceled the Financial and/or Technical Assistance Agreement (FTAA) of the Tampakan Gold-Copper Project purportedly to See “MPSAs,” A2

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DENR cancels MPSAs to protect watersheds By Jonathan L. Mayuga

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ow that Malacañang has put on hold the recent closure and suspension orders over 28 mines across the Philippines, the time should be used to pause and think—especially on the question whether responsible mining is actually feasible.     The Philippines is blessed being one among the countries in this planet with abundant mineral deposits.  We are considered among the top mining countries in the world—third  in gold, fourth in copper, fifth in nickel and sixth in chromite—not to mention our immense nonmetallic deposits like marble.  The estimate is there is roughly $840 billion—or P41.9 trillion—worth of mineral deposits that have yet to be tapped. The Chamber of Mines of the Philippines estimates that some 9 million hectares of the country’s 30 million land area have high-mineral potential, yet only 2 percent of this—180,000 hectares—are covered by contracts or formal mining permits.  Continued on A11



ATTAHIP, Thailand—The highest-ranking US official to visit Thailand since a 2014 coup urged the country to restore democracy while reaffirming the partnership between the two nations, saying on Tuesday America needs “a strong and stable ally” in Southeast Asia. Adm. Harry B. Harris, the head of the US Pacific Command, spoke

at the start of the annual Cobra Gold Thai-US joint military exercises, the largest in the Asia-Pacific region. “We look forward to Thailand’s reemergence as a flourishing democracy, because we need Thailand as a strong and stable ally,” Harris said. “We need Thailand to get back to being the regional and global leader that it always has been.” See “Thailand,” A2

PESO exchange rates n US 49.9250

By Catherine N. Pillas



he departments of Finance (DOF) and Trade and Industry (DTI) have seen eye to eye with regard to the tax rates that will be slapped on cheaper cars, according to an official of the DTI. Trade Undersecretary Ceferino S. Rodolfo said the DOF’s latest proposal in House Bill (HB) 4774

will effectively shield two car models enrolled in the Comprehensive Automotive Resurgence Strategy (CARS) Program of the government and other models that are considered volume sellers. Under HB 4774, a 4-percent excise tax will be slapped on vehicles priced up to P600,000. For the second tier, or vehicles costing P600,000 to P1.1 million, the excise will be P24,000,

4 percent The proposed excise tax for vehicles costing P600,000 and below

plus 40 percent of the value in excess of P600,000. For vehicles valued 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 P 2.1 million and above, the excise will be P1,224,000, plus 200 percent of the value in excess of P2.1 million. Rodolfo said the DTI is more concerned with the vehicles in the P600,000-to-P900,000 price

n japan 0.4392 n UK 62.5361 n HK 6.4343 n CHINA 7.2586 n singapore 35.0720 n australia 38.1577 n EU 52.9155 n SAUDI arabia 13.3165

See “Tax rates,” A2

Source: BSP (14 February 2017 )

A2 Wednesday, February 15, 2017

BMReports BusinessMirror

Wanted: Filipino game changers Continued from A1

“In turn, investments in research generate innovation-induced growth in the economy, creating greater profits in the commercial sector through new products and services,” the report said. “When new profits are reinvested in research activities, the cycle becomes self-reinforcing, and sustained technology-led economic growth is the result.” While the Philippines reflected a “positive momentum” in its stride to develop an innovation ecosystem, the USAid report noted “several issues” still needs to be addressed “for a more smoothly functioning innovation ecosystem to emerge” in the country.

Innovation awards

TAKING cue from findings of assessments like that of the USAid, the Benita and Catalino Yap Foundation (BCYF) launched its Innovation Awards (BIA). The BIA, according to BCYF Chairman Antonio Yap, seeks to honor Filipino innovators. They are, Yap said, people who focus on how things could be done better. “The search for something better on a continuous basis is what defines individuals and organizations,” Yap said. Yap’s group also searched for

MPSAs. . .

Continued from A1

remove its threat to freshwater sources in South Cotabato. In a news briefing in Quezon City, Lopez said the 75 MPSAs are for various mining projects that are not yet operating commercially and are within or near watersheds. The cancellation of the MPSAs will effectively stop 37 mining projects in Mindanao, 11 in the Visayas and 27 in Luzon. The MPSAs include that of bigticket projects, such as Kingking Copper-Gold Project of Kingking Mining Corp. in Pantukan, Davao del Norte. A n MPSA is an agreement wherein the government shares in the production of the contractor, whether in kind or in value, as owner of the minerals. In return, the contractor shall provide the necessary financing, technology, management and personnel for the mining project. On February 2 Lopez announced the closure of 23 operating mines and the suspension of five other mines. Of these mining operations, 15 are within watersheds. While saying her policy declar-

Fuel challenge

BUMAGAT is now embarking on a new challenge to fight poverty through sustainable agribusiness. Based on documents he provided the BCYF, that battle started in March 2011, when he established Trophy Farm Supplies. It was six years ago when he operated his first tunnel ventilated building for broiler production in the town of Montebello, Kananga, a firstclass municipality in the province of Leyte. He entered into a contract growing arrangement with San Miguel Foods Inc. with a capacity of 36,000 birds. The initial venture experienced a rough sailing when his produce came below the standards of the conglomerate, Bumagat said. To turn things around, the alumnus of the Philippine Military Academy introduced innovations in poultry raising,

such as the UV-Light Filtration System. With an initial investment of P19,000, he built the UV system composed of four units of sediment-carbon filtration system and an ultraviolet tube. With moderate exposure to the ultraviolet radiation, Bumagat believed that chickens, like human being, can also benefit from it. “I surmised that what could be highly applicable to humans can also be applicable to chickens. I attached the system to my main watering line and medication equipment to guarantee that all liquids running through the watering lines and directly into the chickens when they drink to the ‘nipples’ is 99.9 percent bacteriafree,” explained Bumagat in his summary presented to the BCYF screening committee. The introduction of the new system yielded a positive result when the mortality rate dropped from 5 percent to 2 percent. Moreover, it was smooth sailing when he did not experience any water-related problems in his succeeding grows from that time to the present. “San Miguel asked me to share my UV-water filtration technology to other contract growers in the Visayas region and I have supplied several other large-scale poultry farms in Region 8 with the same setup.”

ing watersheds as “off-limits” to destructive development activities is “non-negotiable”, Lopez said show-cause orders would be issued to affected mining companies, giving them seven days to “contest” the decision. As DENR chief, Lopez maintained that protecting the country’s watersheds, the source of the country’s freshwater, is mandated by law—the Philippine Mining Act of 1995—and is enshrined in the Constitution. Asked about the coverage of her policy and her definition of “functional watershed”, Lopez said all watersheds would be strictly offlimits to destructive development projects, particularly mining. She said these MPSAs should not have been awarded by the government to the mining companies, noting that it will severely affect watersheds. “Water is life. If you destroy these watersheds, you destroy our source of life.” “It is my duty to protect the people who live there. Now and in the future. If you put at risk the water supply, you put at risk the quality of life of the people for gold, nickel,” Lopez added. The Philippines has 412 principal river basins in 119 proclaimed watersheds, according to the Water

Environment Partnership Asia. Watersheds can also refer to bodies of water such as rivers, streams, lakes, marshes. Lopez said the cancellation of the MPSAs will prevent the potential adverse impact of mining on health and the environment, and will improve the quality of life of those living in areas where the mining projects are located. The DENR chief said her decision to cancel the 75 MPSAs would not result in job losses. “These are nonoperating mines.” Lopez said closed mines would be transformed into ecotourism sites within 18 months to provide livelihood opportunities to those who lost their jobs. The DENR also defended its decision not to close the mining operations of Philex Mining Corp. despite its operation of a mine near the Agno River. In 2012, the accidental leak from its broken tailings pond spilled mine waste into the Balog Creek and Agno River, and contaminated water in the San Roque Dam. Energy Undersecretary Marlo Mendoza said Philex’s tunnel mining operation does not require the scraping of topsoil or cutting of as many trees compared to open-pit mining. “Philex is mining gold. Those

into gold use tunnels. It has very minimal disturbance on the surface of the forest,” Mendoza said. Lopez said she will work with the 12 mining companies that passed the audit and urge them to tap into their Social Development Management Program (SDMP) fund to help people in their surrounding communities. Environment Undersecretary Philipp Camara said the DENR plans to create green jobs that are anchored on ecotourism and sustainable agriculture and organic farming in Dinagat and Surigao. “Ecotourism gives high-quality jobs where the people can live with dignity, unlike mining. Alternative multiplies into agriculture such as organic agriculture, maintaining the biodiversity that will flow into health and wellness product from the biodiversity,” Camara said. “The most immediate thing to do is to revegetate [former mine] areas. We will generate 1,000 jobs that will pay as much as P7,000 a month, which matches the average monthly salary of a miner,” he added. The DENR chief also said she is looking at the possibility of converting mineral-rich areas previously covered by MPSAs into Minahang Bayan for small-scale miners.

these searchers and arrived at 104 nominations. Seven were nominated for the agribusiness category, 60 for government service, 25 for small and medium enterprise and a dozen for technological-vocational education. The number was trimmed to less than 10 finalists, who included retired Philippine Navy Col. Troy Bumagat for the agribusiness category.

New battle

BUMAGAT said one of the challenges in the fledgling years of Trophy Farm was the high cost during the brooding period, the first 14 days of the chicken inside the poultry building. He explained that in 2011 the buildings consumed 10 50-kilogram tanks of liquefied petroleum gas (LPG), which cost P2,700. Hence, he developed a “gasifier”, which was redesigned from a heater originally used for cooking. He also used ipa (rice husk) as fuel. “This has drastically reduced our brooding expenses by as much as 70 percent, with only three 50-kg LPG tanks utilized per grow,” Bumagat claim. “My total investment per gasifier is only P1,200, or P6,000 for the five units of gasifiers inside the building.” At present, Trophy Farms has four poultry buildings with a total capacity of 130,000 birds. It has 30 employees. Bumagat said he continues to pursue innovation to address the potential threats of broiler farming focusing on zero waste. He has been converting the wastes incurred in his poultry production into organic fertilizer since 2012, enabling his business to provide the fertilizer needs of sugar, rice and vegetable growers of Ormoc,

Leyte, Biliran and Samar.

Other finalists

OTHER finalists vying for the BIA, the awarding ceremonies of which would be held on February 20, include Jayvee Tyron Uy, governor of the Compostela Valley, and the Department of Science and Technology (Dost) Mimaropa Region 4B and oneStore. ph. All three are competing for the government service category awards of the BIA. Uy is being nominated for wielding his authority to cascade a nutrition-security program for the whole Compostela Valley province. The governor is credited for mandating the construction and operation of a central kitchen that serves iron-fortified rice (IFR) to 820 of 105,000 schoolchildren in the province of 750,000 people. Uy is also credited for mandating all government units under the province to use IFR. Likewise, he has asked all retailers to sell IFR as “added option”. The Dost-Mimaropa region, on the other hand, is being nominated for its innovation in the use of solar energy in the DOST offices in the provinces of Occidental Mindoro, Oriental Mindoro, Marinduque, Romblon and Palawan.

Thailand. . . Continued from A1

But even as he asked Thai leaders to step up, he made it clear the US remains committed to the countries’ military relationship. Harris’s visit, planned under the Obama administration, is widely seen as a signal that the US will continue to back Thailand. “Folks, our alliance is a big deal,” Harris said. “Nations don’t enter security treaty alliances lightly. It means we’re in it for the long haul.” Twenty-nine countries, including China, India and Malaysia, are participating in or observing the exercises. Some 3,600 American troops are attending this year, hundreds more than last year. Cobra Gold comes at an uncertain time for Thailand’s relations with the US, China and Russia. Thailand, for decades a stalwart American ally, saw relations with the US cool after its military overthrew a democratically elected government in 2014. In response to the coup, the US froze millions in military aid. In the past few years, the Thai army has turned to Chinese and Russian tanks and helicopters to re-

Tax rates. . .

HIV. . .

range, which are more affordable to Filipinos. Fortunately, he said, the impact of the proposed hike in excise taxes for this particular segment would be minimal. Rodolfo added that the flexible financing scheme offered by auto makers will ensure that sales will not go down drastically. The DTI official noted that the burden of higher excise taxes will be carried by those who will buy vehicles priced above P1.1 million. However, Rodolfo expressed his misgivings on the bill’s provision to exempt pickups from higher taxes. Single-cab pickups are not considered automobiles, according to the proposed bill. Exempting pickups may give this segment an “undue advantage” over other vehicle segments. The CARS Program is a manufacturing-stimulus program providing P27 billion worth of government support to boost local auto production, with the intent of expanding the local supply chain and, further, to increase local auto production.

“If you’re under 18, you can’t get tested without parental consent, and we all know how hard it is,” Seguerra said.   “That’s why actually we’re pushing also to lower it down, the age of testing and providing RH [reproductive health] services,” she added. Apart from pushing for this amendment, the NYC has also outlined campaigns urging parents and children to talk and be more open about sex and its consequences.  Seguerra also said it may be wise for parents to start talking about sex and its consequences even before girls reach menstrual period. The NYC chairman also said the government supports free HIV/AIDS testing for all. There are also free antiretroviral medicines for HIV/AIDS patients from the government.  Ending the HIV/AIDS epidemic has been part of the eight Millennium Development Goals (MDGs) and the 17 Sustainable Development Goals (SDGs). 

Continued from A1

Continued from A12

Finally, is nomi n ated for its i nnovat ion i n the use of digital technology. is an e-commerce web application that allows micro, small and medium enterprises (MSMEs) assisted by the DOST to sell products online. “We help MSMEs widen the scope of their target market,” an article on the portal said. According to Pacita Juan of the Asean Women Entrepreneurs Network (Awen), social enterprises like some of the BIA finalists have grown also because of the Internet and technology. “But what most social enterprises lack is the formal structure to accept impact investors,” Juan said, when asked how innovation has impacted social enterprises. “They need to incorporate or establish a company to be able to take in equity from impact investors,” Juan, Awen chairman, said in an electronic mail. Reena Francisco, operations director of social enterprise ECHOstore, added they harness social media for marketing. “Social media is our only way to promote our products to the general public,” Francisco said in an e-mail. “So the use of technology is very vital for the sustainability of our business model.”

place outdated American equipment. It also has been ramping up joint military exercises with China, and last year the army announced it would buy three Chinese submarines in a deal worth about $1 billion. China frightens many in Southeast Asia with expansionist policies in the South China Sea. However, China’s claims do not clash with Thai territorial waters, paving the way for friendly relations. “It’s like a balancing scale,” said Panitan Wattanayagorn, a professor at Bangkok’s Chulalongkorn University and an adviser to Thailand’s defense minister. “Thailand is a small country between superpowers, and it has to balance to make sure the scale doesn’t tip too much in one way.” With an eye on China, the US has been trying to draw Thailand closer again recently, despite political differences. “Washington is sorely trying to show the Thai junta and Southeast Asian governments that it prioritizes formal relations with them,” said Paul Chambers, research director at the Institute of Southeast Asian Affairs. “In other words, geopolitics is more important than liberal values, regardless of human-rights violations.” AP The Philippines was considered an early achiever in terms of HIV prevalence under the MDGs period of 2000 to 2015. However, toward the last few years of the MDGs, the Philippines started seeing an increasing trend in the detection of new HIV cases.  In March 2016 the HIV/AIDS and ART Registry of the Philippines data showed there were 736 new HIV Ab seropositive individuals in the country.  Most, or 97 percent, were male while the median age was 28 years old, with HIV positive individuals aged 8 years to 63 years old. More than half belong to the 25 to 34 year age group, while 27 percent were youth aged 15 to 24 years.  The regions with the highest number of reported cases for March 2016 were the National Capital Region with 284 cases, or 39 percent; Region 4A with 94 cases, or 13 percent; and Region 3 with 82 cases, or 11 percent.  In Region 7 there were 71 cases, or 10 percent of the total; Region 11 with 65 cases, or 9 percent; and 140 cases, or 19 percent, came from the rest of the country.

The Nation BusinessMirror

Campus editors assail proposal for govt regulation of journalists By Marvyn N. Benaning Correspondent


HE College Editors Guild (CEG) has condemned the proposal for state regulation and licensing of journalists in both print and broadcast media. CEG National President Jose Mari Callueng asked Sen. Sherwin T. Gatchalian and other lawmakers who want to “professionalize” journalism to reconsider supporting a proposal that actually looms as a Sword of Damocles over a “free and untrammeled press”. Callueng said, “Regulating the media profession is a misguided attempt to address the proliferation of malicious and fabricated information on the Internet, particularly on social media.” Callueng noted that newspapers, as well as radio and television news programs, are governed by professional rules and ethics that set the parameters for the conduct of journalists in the print and broadcast industry. “First of all, the Constitution explicitly states that ‘No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition the government for redress of grievances’ [Section 4, Article III of the Philippine Constitution]. This constitutional freedom guarantees our right to freely utter and publish our thoughts without prior restraint, so long as it is found not injurious to a third person with a right recognized by law, or is not contrary to law,” Callueng argued.

“The rationale behind this inalienable freedom of speech is not only to protect an individual’s right but also to give the public at large the duty to speak out and criticize the state whenever it abuses the citizenry, or violates the Constitution. Without this right, there can never be any platform for the people to dissent or even form opinion on pressing issues faced by the country,” he added. “Hence, legally speaking, a proposal to ‘professionalize the journalism industry’ is contrary to the highest law of the land. The proposal infringes on the people’s right to know and impart what someone deems to be necessary and correct. It also smothers our moral and intellectual development,” Callueng added. “Moreover, a state-sponsored regulatory body designed to ‘weed out incompetent and unethical journalists’ is, in itself, prior restraint. This body will inflict upon the press the standards based on the biases and sensibilities of lawmakers,” Callueng warned. “Journalism is a noble profession, and it practices at the highest code of ethics that goes beyond serving the interests of any individual, group, or even the government for that matter. It is a principled profession that aims to air the voices of the unheard; it is public service that one puts effort on, even at the expense of his or her own life, to deliver what must be known about the society’s crises. The only license journalists need to practice their profession comes from people’s mandate to tell the truth and make it prevail,” Callueng said.

Editor: Dionisio L. Pelayo • Wednesday, February 15, 2017 A3

Military open to localized peace negotiations with NPA groups


By Priam F. Nepomuceno | Philippines News Agency

HE Armed Forces is open to pursuing localized peace talks with communist rebels.

This was stressed by the Armed Forces Public Affairs Office chief, Col. Edgard Arevalo, in a press briefing at Camp General Emilio Aguinaldo in Quezon City. Request for such negotiations came from New People’s Army (NPA) groups operating in the Visayas and Masbate, Arevalo added. These groups were reportedly surprised at the decision of the Communist Party of the Philippines (CPP)-NPA-National Democratic Front (NDF) national leadership to terminate the unilateral cease-fire with the government effective 11:59 p.m. of February 10. But, while the military is open to such negotiations, Arevalo said a mechanism must be first crafted so that common ground rules between the two parties can be set up. The military has long believed that the CPP leaders on self-exile in the Netherlands have only “tenuous control” over the NPA units in

the field. A senior military officer said the NPA units in the field may feel abandoned by their leaders who are abroad. “Besides, it is the NPA units, through extortion, or so called revolutionary taxes, that are supporting the CPP leaders abroad,” the officer said. Thus, he said the communist guerrillas feel that, aside from being abandoned by their leaders, they are also made to support them.

Troops capture 8 NPA rebs

GOVERNMENT forces captured eight NPA guerrillas, while another has surrendered in a series of operations in the hinterlands of A label tow n in Sarangani province. Col. Tyne Bañas, commander of the Army’s 1002nd Infantry Brigade, said the rebels were separately arrested following clashes

between troops under the 73rd Infantry Battalion (IB) and the NPA’s Front 71 on February 6, 8 and 11 in sitios Tangis and Silutan, Barangay Datal Anggas in Alabel. Six of the captured rebels were formally presented to the media late Monday afternoon in a news conference at the Kasfala Hall in Alabel. They were identified as Simeon Salda, Jun Moda, Claude Palbe, Garzon Palbe, Rene Ompao and Sabelo Colano. The two others were identified as Nonoy and Moreno Salaman. Seized from the rebels were five M-1 Garand rifles, two M-16 rifles and a caliber .30 carbine. A lso presented was a surre nderer, ide nt i f ie d on ly a s an a lias K a loy, who repor ted ly ser ved a s spokesm a n i n t he NPA’s rec r u it ment ac t iv it ies among the Taga k aolo tr ibe in par ts of Sarangani. Bañas said the 73 IB launched the combat operations based on a directive from the Armed Forces following the termination of the unilateral cease-fire with the NPA by President Duterte. He said the operations were also in response to an attack staged

by NPA rebels on troops securing a government road project in the outskirts of Alabel on January 29, when the cease-fire was still in place. Lt. Col. Marion Angcao, 73 IB commander, said they don’t consider the captured rebels as enemies, but “victims of the NPA”. He said most of them were new recruits of the NPA, and were only duped into joining the group on promise of monetary benefits. Following the declaration of the government’s unilateral cease-fire in July last year and the opening of the peace negotiations with the CPP-NDF, he said they monitored “heavy recruitment activities” of the NPA in the area. “Kung tutuusin, sila [those captured], wala talagang kasalanan [In truth, they did not commit any wrongdoing]. They were victims of the deception by the enemy. That’s why they are being treated well,” Angcao said. In the three encounters with the NPA, he confirmed one soldier was wounded but is now in stable condition at a hospital in Davao City. Angcao said they are currently verifying reports of casualties on the side of the rebels.


A4 Wednesday, February 15, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon


BOC suspends accreditation of 101 importers and brokers 11,000 T he Bureau of Customs (BOC) has temporarily suspended the accreditation of 101 importers and brokers due to “questionable shipments”.

Customs Commissioner Nicanor E. Faeldon on Tuesday ordered companies, including a cigarette manufacturer, to provide proof that their alleged misdeclarations were not intentional. He noted that the black-listed importers, companies and brokers failed to pursue their appeal with the Customs, as they were not able to submit proof of declaration and evidence to absolve them and, eventually, restore their firms to the list of accredited companies,

brokers and importers. The BOC has served a notice of suspension to Mighty Corp. and 50 others, and were asked to respond within three days after their shipments were seized for misdeclaration. Faeldon said the cigarette company’s exports of cigarette materials did not match their imports documents, and claimed it purchased 2.05 kilos of acetate tow, or equivalent to 13.7 billion cigarette sticks, but only

The current number of accredited brokers and importers on the BOC’s list, all of which will undergo examination for any possible violation of the Customs law

exported 2.218 billion sticks, translating to a discrepancy of 11.49 billion sticks. The company also declared prices of their imports of acetate tow, a raw material used for cigarettes, at $0.36 per kilo, below the actual price of its suppliers of $5 to $6 per kilo.

The BOC vowed to continue to publicly release the lists of traders with alleged violations and audit the paper trail to identify those who violated customs laws. “There are currently 11,000 accredited importers, companies and brokers on the bureau’s list, and all of these will be examined to find out who violated the customs laws,” Faeldon said in a news statement issued on Tuesday. He revealed they were able to generate P2.2 billion in their antismuggling efforts between August 2016 and January 2017. On the other hand, Faeldon also ordered to conduct probe on other local cigarette manufacturers that were allegedly producing fake branded cigarettes being sold in Metro Manila and nearby areas at very low price. PNA

‘Hot air’ lifts Clark fiesta By Ma. Stella F. Arnaldo

Real-estate firms got ₧724.1M worth of subsidies in 2014 By Cai U. Ordinario @cuo_bm


ilipino taxpayers extended nearly a billion pesos in subsidies to real-estate firms in 2014, according to the Philippine Statistics Authority (PSA). Based on the final results of the 2014 Annual Survey of Philippine Business and Industry (ASPBI) for the real-estate sector, tax exemptions and other perks of the sector reached P724.1 million in 2014. However, this was a 25.42-percent reduction from the P970.9 million worth of subsidies extended to real-estate firms in 2013. “Subsidies are grants received from the government in the form of financial assistance or tax exemption to aid and develop an industry,” the PSA said. The subsidies extended to the sector went to two industries engaged in real-estate activities on a fee or contract basis and real-estate activities with own or leased property industry. Of the two industries, those engaged in real-estate activities on a fee or contract basis received the bulk of the subsidies, which reached P566.3 million, while firms engaged in real- estate activities with own or leased property industry accounted for the remaining P157.8 million. In terms of income, the real-

estate sector generated P497.5 billion in 2014. About 79 percent of the gross income was contributed by establishments with a total employment of 20 and over amounting to P389.8 billion. Real-estate activities with own or leased property contributed the major share of 94.2 percent amounting to P468.8 billion, while real-estate activities on a fee or contract basis accounted for a mere 5.8 percent, or P28.6 billion. In terms of expense, the sector spent P316.3 billion in 2014. The bulk of the expense was made by real-estate activities with own or leased property. “Being the major contributor in income, real-estate activities with own or leased property also had the largest share in expense of P290.5 billion, [or] 91.9 percent,” the PSA said. The remaining expense was made by real-estate activities on a fee or contract basis, which accounted for P25.8 billion, or 8.1 percent, of the total. In 2014 there were a total of 4,862 establishments in the formal sector of the economy were engaged in real-estate activities. The majority, or 89.6 percent, or 4,358 establishments had a total employment of less than 20. The remaining 504 establishments, or 10.4 percent, were with total employment of 20 and over.

Special to the BusinessMirror

Filipinos in Germany are most ‘generous’ long-distance lovers


VIATION enthusiasts, adventure-sports practitioners, balloonists and families converged at the Clark Field in Angeles, Pampanga, over the weekend for the 21st Philippine International Hot Air Balloon Fiesta. Tourism Undersecretary for Public Affairs Katherine de Castro said at the fiesta’s opening ceremony on February 9: “The event has served not only as a fascinating air show, but also as a showcase of genuine Filipino hospitality, where we make our guests feel at home with family.” De Castro said she has been attending the annual event—this year themed “Weekend of Everything That Flies and Exchange of Cultures”—since she was 15 years old. A news statement from the Department of Tourism (DOT) said delegations of aviators from 12 countries, including a first-time participant from China, joined various groups of Filipino flyers for the fourday festivities, attracting thousands of balloon hobbyists from across the globe, as well as students, soldiers and aviation executives. “No wonder the Philippine International Hot Air Balloon Foundation [Pihabf] has won the participation of flying aficionados from all over the world. We do have great scenery and warm climate conducive for flying and, most important, our genuine Filipino hospitality,” de Castro added. The festival featured sky diving, paragliding, air firefighting demo, kite flying, aircraft exhibit, model airplane show and an aviation seminar-workshop. “We will continue to support wholesome and unique activities like these that help lift our

Participants of the recently concluded Clark Hot Air Balloon Festival prepare to take flight. Photo courtesy of D.O.T.

tourism industry,” she stressed. The DOT official was joined at the opening ceremony by Pihabf event director and pilot Capt. Joy Roa, Clark Development Corp. President Noel Manankil, Transportation Undersecretary for Aviation Roberto Lim and Pihabf President Vicencio Dizon. In Manila, on the same day, meanwhile, Tourism Secretary Wanda Corazon T. Teo sat down with Metro Manila mayors, local government unit representatives, tourism officers, line agency representatives and private sectors to thresh out pressing issues, concerns and plans to revitalize tourism in Metropolitan Manila. In her keynote speech at the Metro Manila Tourism Forum’s opening ceremony at the Crowne Plaza Galleria in Ortigas, the DOT chief noted, “the price that we all seem to be paying for [Metro Manila’s] progress, the traffic, the congestion, lack of urban planning”, are already taking their toll on the metropolis. But, she said, the DOT will con-

tinue to be supportive of forums and dialogues as part of the “steps to address these concerns and start the big task of changing the ‘face’ of the city for tourists”. She also assured the LGU representatives that a cruise-tourism program that will greatly benefit the Metro is already in the pipeline, as well as plans to increase the number of tourist police, in cooperation with the Philippine National Police and the Department of the Interior and Local Government. “The successful staging of the Miss Universe pageant gave Metro Manila the chance to remind people all over the globe that it is a thriving city with much to offer. And we at the DOT provided you with a platform to reintroduce the cities,” Teo added. She, likewise, shared the DOT’s continuing rehabilitation of Intramuros, a “place where we are exerting the most effort to ensure that its history is preserved.” The DOT head observed that Manila has a great potential to survive

despite its progress and challenges, because it has retained its old-world charm. “And if we can restore its architectural landmarks, it can continue to be the regal queen of the country,” she stressed. During the two-day forum, former Tourism Secretary Mina Gabor, now with the Automobile Association Philippines Travel, enjoined all tourism stakeholders to “put Metro Manila on the list of the next top 20 destinations in the world.” For his part, Quezon City Mayor Herbert Bautista underscored the “importance of tourism on the economic life of our country’s cities now that travel has become much easier and cheaper. Almost everyone now can be a tourist.” Teo assured tourism stakeholders the DOT will remain at the forefront of advancing the country’s tourism agenda. “Beautiful destinations are not accidents; they are the results of deliberate, thoughtful planning, careful execution and much passion,” she said.

Mica Alcantara (left), smiles as she is kissed by her boyfriend Richmond Ulap after receiving a bouquet of edible rose-shaped bacon at a restaurant which is offering it as part of their Valentine’s promotion, in Manila. A dozen edible rose shaped bacon bouquet costs P2,200 and can be delivered to love ones during Valentine’s Day as an alternative gift to sending real flowers. AP


ilipinos in Germany may be far from home, but their loved ones are near to their hearts on Valentine’s Day. Money-transfercompanyWorldRemit analyzed remittances from Filipinos abroad, and found those in Germany were the most generous, sending home on average $32.5 more than usual around Valentine’s Day last year. Following closely were Filipinos in Norway, who sent on average $24 more, and in New Zealand, who remitted on average $12.5 more during the week around Valentine’s Day, compared to the amount they sent in

the previous week. Comparative government data are not available. Central Bank statistics show Filipinos in the US send the most money home overall, followed by those in Saudi Arabia and the United Arab Emirates. According to the World Bank, migrants’ remittances to the Philippines in 2015 reached $28.48 billion, the third highest next to India and China. Millions of Filipinos live and work abroad, sending home money that make up about 10 percent of the Philippines’s GDP. AP

NGCP justifies recent ₧0.15/kWh power-transmission charge hike By Lenie Lectura



he National Grid Corp. (NGCP) on Tuesday shed light to the P0.15-per-kilowatthour (kWh) increase in transmission charge collected by the Manila Electric Co. (Meralco) from its customers in their March electricity bills. Last week Meralco announced that power rates this month will shoot up by P0.92 per kWh, which brought overall rate to P9 per kWh. The upward adjustment was mainly due to the P0.62-per-kWh increase in generation charge, P0.15-per-kWh increase in transmission charge and another P0.15-per-kWh upward ad-

justment in taxes and other charges. On transmission charge, Meralco attributed the P0.15-per-kWh upward adjustment to the increase in Power Delivery Service Charges caused by the implementation of higher interim Maximum Allowable Revenue (iMAR) by the NGCP. Higher ancillary service charges also contributed to the increase in the transmission charge, Meralco said last week. NGCP officials, in a news briefing, said “there was technically no increase, but nominally consumers will feel” the impact nonetheless because the adjustment was brought about by “an unrecovered portion

of iMAR in 2016.” NGCP applied for a P45.28 billion iMAR) for 2016. The Energy Regulatory Commission (ERC), however, approved in early 2016 an amount of only P41.65 billion. The grid operator filed a motion for reconsideration, which the ERC increased to P43.789 in December 2016. Since the ERC order that adjusted NGCP’s iMAR to P43.789 billion was released in December 2016, it needs to recover about P2 billion. This amount represents the difference in the ERC approved 2016 iMAR from an initial P41.65 billion to P43.789 billion later. “We have an under recovery of P2 billion, which we were allowed to col-

lect this in 2017,” NGCP Spokesman Cynthia-Perez Alabanza said. The P0.15-per-kWh increase in transmission charge in the March electric bills of Meralco already reflects the adjustment in NGCP’s iMAR. However, Alabanza clarified that NGCP is not aware how much of the P0.15 per kWh adjustment was attributed by Meralco to the adjustment in iMAR. “There are other factors that affect transmission charges. One of which is ancillary charge,” Alabanza said. Meanwhile, the NGCP will commence the construction of 20 major transmission projects this year. Seven of the 20 projects are transmission

backbone projects that will ensure sufficiency and reliability of power supply. These are the Calaca-Dasmariñas 500-kV (kilovolt) project, the Hermosa-San Jose 500-kV project, the Pagbilao Extra-High Voltage project, the Cebu-Negros-Panay 230kV Backbone project, the Mindanao 230-kV backbone project, the Luzon and the Visayas Voltage Improvement projects, and the TuguegaraoMagapit 230-kV project. “These are all backbone projects. It will come back to the grid as investments,” said Alabanza. The NGCP, according to Alabanza, has secured the provisional authority (PA) to implement these seven projects. All 20

projects are expected to be finished within three to five years. The NGCP is required to seek prior approval from the ERC of any plan for expansion or improvement of its facilities in relation to its authority and responsibility to construct, install, finance, improve, expand, rehabilitate and repair the nationwide transmission system and the grid. Along with its responsibility for the planning, construction and centralized operation and maintenance of its high voltage transmission facilities, it is indispensible for NGCP to ensure a reliable and high-performance operation of the transmission system.

Agriculture/Commodities BusinessMirror

Editor: Jennifer A. Ng • Wednesday, February 15, 2017


PHL to S. Korea: Slash pineapple tariff to zero By Catherine N. Pillas



anila has asked Seoul to bring down to zero the tariff it slaps on Philippine pineapple exports to South Korea, according to the chief of the Department of Trade and Industry (DTI).

Trade Secretary Ramon M. Lopez said he made this request to Korean Minister of Trade, Industry, and Energy Joo Hyungh-wan, who made a quick trip to the Philippines this week. “We had a meeting with the Korean trade minister. He was in town to visit energy projects and met with me and Energy Secretary [Alfonso G. Cusi],” Lopez told reporters in an interview on Wednesday. “On our part, our common interest is to conclude the Regional Comprehensive Economic Partnership, advancement on the discussion on the [Asean-Korea Free Trade Agreement] AKFTA as a whole, and also a request to lower tariffs on local bananas and pineapples,” he added. Currently, the DTI noted that Seoul slaps a 30-percent tariff

on pineapples being shipped to South Korea. Lopez said Seoul was keen on expanding the access of South K ore a n st r aw b er r ies to t he Philippine market. Despite the controversy surrounding the death of South Korean businessman Jee Ick-joo, the DTI chief made an assurance that Seoul’s trade and investment outlook on the Philippines remains “sanguine”. “[Seoul] understood that it was an isolated incident, so we assured them that that will be resolved by the government. They’re aware of the overall peace and order situation,” Lopez told reporters. As proof, Lopez said Samsung Electronics Philippines Corp. announced last week an expansion project in the Philippines costing $200 million. Korea Electric Power Corp. (Kep-

A BOY rides a horse to deliver pineapples to a market in Indang, Cavite. Calabarzon, which includes Cavite, is considered as one of the major pineapple-growing regions in the Philippines. ROY DOMINGO

co) has already announced its plan to invest in a coal-fired power plant in Cebu. These investments are apart from the interest expressed by auto maker Hyundai Motors to fill up the third slot in the DTI’s Comprehensive Automo-

Govt allows 251 firms to import pork, chicken under MAV By Jasper Emmanuel Y. Arcalas @jearcalas


he government said it granted 251 private companies licenses to import pork, poultry and corn under the minimum access volume (MAV) of the World Trade Organization (WTO) this year. Government data obtained by the BusinessMirror showed that the companies allowed to import the three agricultural commodities were fewer than the 276 firms granted licenses in 2016. The MAV allocations for pork meat, poultry meat and corn were the same as last year’s level: pork at 54,210 metric tons (MT); poultry, 23,490 MT; and corn, 216,940 MT.

Of the 251 private firms, 114 were granted licenses to import 54,210 MT of frozen pork. These include Century Pacific Food Inc., Foodsphere Inc., Mekeni Food Corp., Pampanga’s Best Inc., Mayon Consolidated Inc. and Jollibee Foods Corp. The number of firms allowed to import under the 2017 MAV for frozen pork was lower than the 121 recorded last year. Pork imported within the MAV are slapped a 30-percent tariff, while those outside of MAV are leved a 40-percent tariff. As for frozen-poultry meat, 124 firms were allowed to import it under MAV. Last year the number of companies given licenses was higher at 141.

Some of the firms allowed to import under the 2017 MAV for frozenpoultry meat are Delichicken Corp., Virginia Foods Inc., The PurefoodsHormel Co., Inc., Puregold Price Club Inc. and Rustans Supercenters Inc. The government imposes a 40-percent tariff on poultry-meat imports. Data also showed that 13 firms were allowed to import 216,940 MT of corn under MAV this year. These include San Miguel Foods Inc., Universal Robina Corp., Pilmico Animal Nutrition Corp. and Pilmico Foods Corp. Corn imports within the MAV are slapped a 30-percent tariff, while traders have to pay a 50-percent tariff for imports brought in outside of the MAV.

Scientists in Uganda develop technique to boost mango production during off-season


AKISO, Uganda—Scientists in Uganda have developed a technique of increasing mango production during off-season in a bid to increase household incomes. Researchers at the state-owned National Crop Resources Research Institute, Namulonge in central Uganda are exploring a technique called Foliar Flower Induction to ensure mango production even during the off-season. Gabriel Ddamulira, the lead researcher, told Xinhua in an interview recently that reagents, also known as f lower inducerpotassium nitrate, is applied on the mango plant one month before and after regular mango flowering periods. The inducer helps the mangoes to flower again and bare more fruits just after the normal harvest. This, according to the researchers will ensure year-round harvests. Ddamulira said preliminary experiments have shown positive results, noting that studies will be concluded by the end of this year.


Mango is a major fruit in Uganda, with immense potential to generate income and nutritional security to small holder farmers. The production season for most mango varieties in Uganda is from November to January, leaving a vacuum in mango supplies once harvesting is over. During this period, large volumes of mangoes are imported from neighboring Kenya but even

then they cannot satisfy the demand and are highly priced. Ddamulira said the money spent on importing mangoes from Kenya could instead be used to grow mangoes in Uganda if appropriate technologies are developed. “This research work will boost farmers’ incomes and livelihoods given that the price of mangoes doubles during the off-season period due to scarcity,” he said. PNA/Xinhua

tive Resurgence Strategy Program. Lopez said he intends to put forward the country’s trade interests within the framework of the AKFTA before the Asean Economic Ministers’ Meeting in April.

NFA assures enough rice supply in quake-hit Surigao


he National Food Authority (NFA) on Tuesday said the rice supply in Surigao del Norte will be enough to meet the requirements of the province for more than two weeks. NFA Administrator Jason Laureano Y. Aquino said the food agency’s warehouses in Caraga have rice stocks amounting to more than 232,000 50-kilogram bags, or about 11,600 metric tons (MT). Aquino said the agency already released 200 50-kg bags of NFA rice upon the request of the local government of Surigao del Norte for its relief operations after the magnitude 6.7 hit the province on February 10. “It is one of the mandates of NFA to provide rice to a calamity-stricken area within 22 hours from the occurrence of a calamity or emergency,” Aquino said. Aquino also said the NFA has enough rice inventory nationwide, pegged at 8.88 million 50-kg bags equivalent to 444,080.6 MT as of February 10. The NFA said it has standing memorandum of agreements with various relief agencies, which allow local government units (LGUs) to withdraw rice on credit from the food agency anytime during calamities and emergencies. “The NFA Regional Office in Caraga is also coordinating with other LGUs, Department of Social Welfare and Development, Regional Disaster Risk Reduction and Management Council, and other relief agencies for further issuance of rice for distribution to affected families and those in the evacuation centers,” the NFA said in a statement. The NFA added it has deployed market-monitoring teams to assess the rice supply and price situation in the market after the earthquake struck the region. “The teams were also instructed to inspect NFA-accredited rice-retail outlets to ensure that affordable government rice is readily available and accessible to the consuming public especially those in affected areas in the region,” the NFA said. Based on the reports of their monitoring team, the NFA said the prevailing market price of commercial rice in Caraga remains stable. Local government officials earlier placed Surigao City under a state of calamity. Jasper Emmanuel Y. Arcalas


Wednesday, February 15, 2017

The World BusinessMirror • Editor: Lyn Resurreccionph

Flynn steps down over scrutiny on Russia call


ASHINGTON—Michael T. Flynn, the national security adviser, resigned on Monday night after it was revealed that he had misled Vice President Mike Pence and other top White House officials about his conversations with the Russian ambassador to the United States.

Flynn, who served in the job for less than a month, said he had given “incomplete information” regarding a telephone call he had with the ambassador in late December about US sanctions against Russia, weeks before President Donald J. Trump’s inauguration. Flynn previously had denied that he had any substantive conversations with Ambassador Sergey I. Kislyak, and Pence repeated that claim in television interviews as recently as this month. But on Monday, a former administration official said the Justice Department warned the W hite House last month that Flynn had not been fully forthright about his conversations with the ambassador. As a result, the Justice Department feared that Flynn could be vulnerable to blackmail by Moscow. I n h i s re s i g n at ion le t te r, which the White House e-mailed to reporters, Flynn said he had held numerous calls with foreign officials during the transition. “Unfortunately, because of the fast pace of events, I inadvertently

Court: Valentine’s Day banned in Pakistan capital


SLAMABAD—A Pakistani judge on Monday banned all Valentine’s Day celebrations in the country’s capital, Islamabad, saying they are against Islamic teachings. The judge ruled on a petition seeking to ban public celebrations of the Western holiday, court official Niaz Saleh said. He said the order had been sent to Pakistan’s media regulator to ensure a blackout on any Valentine’s Day promotions in print or electronic media. The ban applies only to Pakistan’s capital as the Islamabad high court has no jurisdiction beyond the city. The regulator in a statement directed all Pakistani media outlets not to print or broadcast anything that promotes Valentine’s Day. No event shall be held at any official level and at any public place, the statement quoted a part of the court order. Later on Monday, the government issued an order to local police to enforce the court ban. A similar order was in place last year in Islamabad. Islamist and rightwing parties in Pakistan view Valentine’s Day as vulgar Western import. However, the annual homage to romance on February 14 has become popular in recent years across the Middle East and also in Pakistan. Though some Muslim countries, such as Saudi Arabia, also have sought to stamp out Valentine’s Day, with the religious police mobilizing ahead of February 14 and descending on gift and flower shops to confiscate all red items, including flowers, it is still celebrated widely in other places, such as Dubai. AP

briefed the vice president-elect and others with incomplete information regarding my phone calls with the Russian ambassador,” he wrote. “I have sincerely apologized to the president and the vice president, and they have accepted my apology.” “I am tendering my resignation, honored to have served our nation and the American people in such a distinguished way,” Flynn wrote. The White House said in the statement that it was replacing Flynn with retired Lt. Gen. Joseph K. Kellogg Jr. of the Army, a Vietnam War veteran, as acting national security adviser. Flynn was an early and ardent supporter of Trump’s candidacy, and in his resignation he sought to praise the president. “In just three weeks,” Flynn said, the new president “has reoriented American foreign policy in fundamental ways to restore America’s leadership position in the world.” But in doing so, he inadvertently illustrated the brevity of his tumultuous run at the National Security Council (NSC), and the

National Security Adviser Michael Flynn (center) at a joint news conference held by President Donald J. Trump and Prime Minister Justin Trudeau of Canada in the East Room of the White House in Washington on Monday. Flynn faced an uncertain future on Monday as White House officials delivered conflicting messages about whether he still enjoys the confidence of Trump and Vice President Mike Pence. Stephen Crowley/The New York Times

chaos that has gripped the White House in the first weeks of the Trump administration—and created a sense of uncertainty around the world. By Monday evening, Flynn’s fortunes were rapidly shifting—his resignation came roughly seven hours after Kellyanne Conway, counselor to the president, said on MSNBC Trump had “full confidence” in the retired general. And when he did step down, it happened so quickly that his resignation does not appear to have been communicated to NSC staff members, two of whom said they learned about it from news reports. Officials said Pence had told others in the White House that he believed Flynn lied to him by saying he had not discussed the topic of sanctions on a call with the Russian ambassador in late December. Even the mere discussion of

policy—and the apparent attempt to assuage the concerns of a US adversary before Trump took office—represented a remarkable breach of protocol. The FBI has been examining Flynn’s phone calls as he came under growing questions about his interactions with Russian officials and his management of the NSC. The blackmail risk envisioned by the Justice Department would stem directly from Flynn’s attempt to cover his tracks with his bosses. The Russians knew what had been said on the call; thus, if they wanted Flynn to do something, they could threaten to expose the lie if he refused. T he Ju st ice De pa r t ment ’s warning to the White House was first reported on Monday night by The Washington Post. In addition, the Army has been investigating whether Flynn received money from the Russian government

during a trip he took to Moscow in 2015, according to two defense officials. Such a payment might violate the Emoluments Clause of the Constitution, which prohibits former military officers from receiving money from a foreign government without consent from Congress. The defense officials said there was no record that Flynn, a retired three-star Army general, filed the required paperwork for the trip. Earlier on Monday, Sean Spicer, the W hite House press secretary, told reporters that “the president is evaluating the situation.” Spicer said Trump would be talking to Pence and others about Flynn’s future. Rep. Adam B. Schiff of California, the top Democrat on the House Intelligence Committee, said in a statement late on Monday that Flynn’s resignation would not close the question of his contact with Russian officials. “General Flynn’s decision to step down as national security adviser was all but ordained the day he misled the country about his secret talks with the Russian ambassador,” said Schiff, noting that the matter is still under investigation by the House committee. The White House had examined a transcript of a wiretapped conversation that Flynn had with Kislyak in December, according to administration officials. Flynn originally told Pence and others that the call was limited to small talk and holiday pleasantries. But t he conversat ion, according to officials who saw the transcript of the wiretap, also included a discussion about sanc-

tions imposed on Russia after intelligence agencies determined that Putin’s government tried to interfere with the 2016 election on Trump’s behalf. Still, current and former administration officials familiar with the call said the transcript wa s a mbig uous enough t h at Trump could have justified either firing or retaining Flynn. Trump, however, had become increasingly concerned about the continued fallout over Flynn’s behavior, according to people familiar with his thinking, and told aides that the media storm around Flynn would damage the president’s image on national security issues. It was not clear whether Kellogg would be asked to stay on as Flynn’s permanent replacement. W hite House of f icia ls were discussing several potential contenders for the job, and Trump is consulting Jim Mattis, the secretary of defense and a retired four-star general. Among the options are David H. Petraeus, former CIA director, and Thomas P. Bossert, head of Trump’s domestic security council. Petraeus, also a retired four-star general, was forced out as director of the CIA because of an affair with his biographer, to whom he passed classified information. Petraeus would not need confirmation by the Senate as national security adviser. Petraeus is expected to be at the White House on Tuesday, said a senior administration official who was not authorized to discuss the meeting and spoke on condition of anonymity. New York Times News Service

In shadow of California dam, water turns from wish to woe


ROVILLE, California—It was not so long ago that residents here had to drag their houseboats into a dusty field from the barren banks of Lake Oroville, which had almost no water left to keep them afloat. Now after weeks of rain, that dusty field is swelling with water and nearly 200,000 people had to evacuate the area when the state’s second-largest reservoir developed a hole in its auxiliary spillway and threatened to catastrophically flood nearby towns. “It was just pandemonium outside,” said Kurt Richter, a rice farmer living in Yuba City, who headed toward nearby Colusa, a town about 50 miles southwest of the dam in a two-car caravan with his wife and child, as the sudden evacuation order prompted chaos in the area. Richter described people driving on the shoulders, medians and the wrong side of the road. The sudden chaos offers a dramatic reversal for this small town in the Sierra Nevada foothills, which had been deeply affected by more than five years of drought and is now overwhelmed by winter storms. A few years ago, “you couldn’t even see the lake,” said Jesse Hollis, a floor and tile contractor who grew up in Oroville. “It was empty.” He added, “Nobody thought that this was going to happen.” Richter added, “We go from hard-core conservation mode— curtailments, restrictions, all these regulations that are imposed on us, justifiably so—and now we’ve got more water than we can physically manage.” “ T here’s an element of human danger that’s hanging over our head for who knows how long,” he said. “ We’ve got another huge storm system that’s coming this week.” Since October, Northern California has been pounded by unrelenting rain and snow. The storms have replenished severely depleted water reserves, blanketed the

Members of a swift water rescue team from Sacramento and others watch from an overlook as water moves down the damaged spillway at the Oroville Dam in Oroville, California, on Monday. Workers were assessing how to shore up the spillway that officials feared could collapse at the Oroville Dam, where thousands below have been evacuated and more rain is anticipated. Jim Wilson/The New York Times

Sierra Nevada in snow and turned brown hills to green across the state. But they have also wreaked havoc and raised questions about whether the state could have done more to prevent a break. R ivers unable to contain the runoff from the mountains have repeatedly burst their banks, f looding homes. The latest trouble started last week, after heavy rainfall rapidly lifted Lake Oroville, built into a canyon about 70 miles north of Sacramento. As water was drained through two spillways over the weekend, officials became concerned that one was poised to collapse. If that happened, they said, it could unleash a 30 -foot wall of water into the Feather R iver that would tear through several cities in the valley below. Last Sunday emergency officials issued urgent warnings: Evacu ate now or r isk ever ything. Thousands heeded the call, streaming away out of town in bumper-to-bumper traffic. Gov. Jerry Brown has requested that the White House make an emergency declaration for Yuba,

Butte and Sutter counties. By Monday, the area remained precarious with more storms set to hit later in the week. Evacuation orders remained in place. “This is still a dynamic situation,” said Kory Honea, the sheriff of Butte County, which contains Oroville. In Oroville there were a few signs of life. There was light traffic. A handful of gas stations a nd re st au r a nt s we re o p e n . Charles Smith, an ironworker in town, said his neighborhood was high enough to avoid the danger. His neighbors, however, were not so sure. “When I woke up this morning, we were the only people there,” said Smith, 36. Water has since stopped flowing over the auxiliary spillway, allowing crews to assess the damage there. Water was flowing at the rate of 100,000 cubic feet per minute over the main spillway, which has a hole of its own but is not worsening. There is no damage to the dam itself—which, at 770 feet, is the tallest in the country and a critical piece of the state’s water system. Saturday was the first time the emergenc y spil lway

came into use since the dam was completed in 1968. On Monday helicopters were bringing in large rocks and other building materials for engineers to use to shore up the damage. The Federal Emergency Management Agency said it had activated coordination centers in response to the situation at the dam. Pentagon officials in Washington said they were closely watching the looming crisis. Capt. Jeff Davis, a Defense Department spokesman, said on Monday all 23,000 California National Guard members had been put on alert. Those troops report to Brown. Davis also said the Pentagon was prepared to send emergency aircraft, reconnaissance equipment, water rescue units, medical supplies and tents, if needed. The emergency spillway, like many others, is made largely of earth, with only a concrete weir, or sill, at the top. Water spilling over it cascades down an earthen hillside that is easily eroded. Environmental groups, including Friends of the River, a California-wide organization, requested in 2005 that the state

cover the hillside with concrete. The request was rejected. “They didn’t think they would ever need it, and they were confident that erosion was not going to be a problem,” said Ron Stork of Friends of the River. “Both of those have now been demonstrated to be inaccurate assessments.” At a news conference on Monday, Bill Croyle, the acting director of the California Department of Water Resources, said he was not familiar with that request and that the use of the emergency spillway—and the resulting erosion—was a “new, neverhappened-before event.” In Colusa evacuees found a place to rest at the fairgrounds. Roughly 200 people stayed in the parking lot or in exhibition halls opened up for the night. T he cr isis has highlighted socia l issues that plag ue this a rea , wh ic h h a s h i stor ic a l ly suffered from high rates of unemploy ment and pover t y. T he reg ion a lso has a ver y v isible homeless popu lation. In Marysville and Yuba City, organizations rushed to evacuate the many homeless people. John Nicoletti, a former county super visor and staff member with Habitat for Humanity, said local officials and nonprofit organizations pooled resources to bus those who did not have cars. M i g ue l Va z que z , 41, w ho works in an auto paint and body shop, was worried about the prospect of losing work for a few days in Yuba City. He said residents, especially farmworkers and others reliant on the agricultural economy, were concerned. “A couple of years ago everybody needs water,” Vazquez said. “Now there’s extra water.” Some residents without transportation evacuated on foot. William Wright, 35, said it took him 12 hours to walk from Yuba City to the fairgrounds in Colusa. “It makes no sense to sit there below a dam when it’s in question,” Wright said. New York Times News Service

Editor: Lyn Resurreccion •

The World BusinessMirror

Wednesday, February 15, 2017


US Justice Department, states weigh options on Trump’s travel ban


ASHINGTON—The Ju st ice D e pa r t ment said in a brief filed on Monday it would continue to defend President Donald J. Trump’s targeted travel ban in the federal appeals court in San Francisco, which on Thursday refused to reinstate it. T he depar tment did not say whether it wou ld tr y to appeal that ruling to the Supreme Court. But its silence on t he m at ter sug gested that the Tr ump administration wou ld not pursue an immediate appea l. T he administration had asked a three-judge appea ls cour t panel for prompt action to aver t a nationa l secur it y e me r ge nc y — a nd w a s re buffed last week—after a tr ia l judge had blocked the ban, a l low ing ref ugees and v isitors from seven Muslim-major it y nations into the United States. T he Justice Depar tment has moved at a more deliberate pace since its loss on T hu r s d ay, a n i nd ic a tion that it w il l not file an emergenc y appl ication in the Supreme Cour t. The administration may have decided that the chances of success at the Supreme Court are poor. For the last y e a r, t he c ou r t h a s h a d just eight members, and a 4-4 tie would leave the appeals court ruling in place. It would take five votes to overturn the ruling, and it appears unlikely that any of the court’s four more liberal justices would support the administration’s position. The Justice Department asked the trial judge, Judge James L. Robart, of the US District Court in Seattle, to “postpone any further proceedings” in his court while the appeals court, the 9th US Circuit Court of Appeals, considers whether to rehear the case. Lawyers for Minnesota and Washington state, which are challenging the ban, urged Robart to order the parties to start exchanging information in preparation for trial. “G i v e n t h e g r a v it y o f t he st ates’ const it ut iona l a l l e g a t i o n s , d e f e n d a nt s ’ s t at e d n at ion a l s e c u r it y concer ns and the public interests at st a ke, t he st ates res pec t f u l ly subm it t h at d iscover y shou ld proceed w it hout de l ay,” No a h G. P u rcel l, Wash ing ton’s so l ic itor genera l, w rote. At a hearing on Monday afternoon in Seattle, Michelle Bennett, a Justice Department lawyer, urged Robart to halt proceedings in the trial court. Robar t said he was surpr i sed to hea r her m a ke that arg ument, in light of a st atement f rom Tr u mp after the 9th Circuit’s r u ling. “See you in cour t,” Ro bart said, quoting a Twitter post by Tr ump, which drew a laugh in the cour troom. “I’m not prepared to slow t h is dow n,” Roba r t sa id. “ There is a very sensitive time issue.” Unless the appeals court or the Supreme Court acts, Robart’s Februar y 3 temporar y restra ining order, which blocked the key provisions of targeted travel ban, will remain in place. The ban, one of the first executive orders Trump issued

after taking office, suspended worldwide refugee entry into the US. It also suspended travel from seven Muslimmajority nations—Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen—for 90 days. On T hu rsd ay, a t hree judge panel of the 9th Circ u it ref u sed to st ay R o bart’s order. Last Friday an unidentified appeals court judge called for a vote on w he t he r t he t h re e - jud ge pa ne l ’s r u l i ng shou ld be reheard by a larger panel of the 9th Circuit. Those briefs are due on Thursday. If a majority of the court’s active judges voted to rehear the case, it would typically be considered by an 11-member panel made up of the circuit’s chief judge and 10 judges chosen at random. Rehearing motions filed by parties and requests for votes on rehearings requested by judges are not particularly unusual. The 9th Circuit rehears decisions issued by three-judge panels 15 to 25 times a year, the court said. T he 9t h C irc u it has 25 act ive judges, 18 of whom were appoi nted by Demo c r a t i c p r e s i d e nt s . I n a sepa rate order, t he t hree judge pa nel on T hu rsd ay set a sc hedu le for subm itt ing br iefs in t he u nderlying appea l. ( T he quest ion dec ided on T hu rsd ay was whet her to st ay t he t r i a l cou r t order. T he quest ion at issue in t he new br iefs is whet her t hat r u l ing was cor rect.) T he l ast of t hose br iefs is due Ma rc h 29. Robart, meanwhile, was considering on Monday what should happen in his court in the meantime. On Februar y 3 he asked the states and the Justice Department to file briefs on whether there was a need for further proceedings in his court. Ordinarily, after a t e mp or a r y re s t r a i n i n g order i s i ssued , t he pa r t ies wou ld f i le add it ion a l br iefs a nd , perh aps, sub m it e v idence on whet her to m a k e t he order more per m a nent b y enter i ng a pre l i m i n a r y i nju nc t ion. Before t he 9t h C irc u it ruled, Robart ordered the parties to file those briefs starting February 9 and ending February 17. But the 9th Circuit’s ruling complicated matters by treating the order as a preliminary injunction, suggesting that there was nothing more for Robart to do for now. Purcell said that was the right interpretation of the appeals court’s ruling. “In shor t, bec ause t he 9th Circuit has construed t he Febr u a r y 3 order to grant all the preliminar y relief the states would have sought through a motion for a preliminar y injunction, no add itiona l br ief ing or evidence is required in the district court on the propriety of preliminar y relief,” Purcell wrote. The Justice Department, in a brief signed by Bennett, did not take a firm position on that question, saying only that “ further proceedings in the 9th Circuit will likely inform whether additional proceedings on a pre l i m i n a r y i nju nc t ion motion are necessar y in the district court.” New York Times News Service

President Donald J. Trump gestures during a news conference with Canadian Prime Minister Justin Trudeau in the East Room of the White House on Monday in Washington. AP/Evan Vucci

Trump assures Trudeau on US trade relationship with Canada


resident Donald J. Trump assured Prime Minister Justin Trudeau that Canada isn’t the main target of his plans to reset US trade relationships, as both leaders said they are committed to maintaining commercial ties and economic integration that support millions of jobs on both sides of the border.

At a joint news conference with Trudeau at the White House, Trump emphasized that, in dealing with the US’s two North American Free Trade Agreement (Nafta) partners, he’s more bothered about trade imbalances with Mexico than with Canada. “We have a very outstanding trade relationship with Canada,” Trump said, adding that they will be “tweaking it” in order to make it better for both countries. “It’s a much less severe situation than what’s taken place on the southern border.” Tr ump’s comments mark a victory for Trudeau, whose government has sought for weeks to

$541B The volume of Canada’s annual trade with the US

distance itself from Mexico on trade matters in a bid to protect a relationship with the US that is worth $541 billion a year. The conciliatory remarks are also in line with investor expectations, which have shown little concern about a major trade upset between Canada and the US. Canada’s currency, which was

little changed today, has advanced 1.6 percent since Trump’s election on November 8, the best-performing among its G-10 peers. “ The Nafta comments, and favorable compa r ison of t he trade relationship with Canada relative to Mexico, should give at least some comfort to Canadian economy watchers,” Canadian Imperial Bank of Commerce Chief Economist Avery Shenfeld wrote in a research note after the news conference. Trade was at the top of the agenda for the first meeting between Trudeau and Trump as leaders of their respective countries. There’s a great deal at stake for the US and its northern neighbor. Three quarters of Canadian exports head south across the border, and 18 percent of American exports cross in the other direction. Almost all of Canada’s oil goes to the US and most of the country’s manufacturing is geared toward meeting US demand. At the joint news conference, Trudeau said keeping a healthy trading relationship with the US is a real concern for Canadians, repeating continuously how the two countries are integrated economically, historically and culturally. “We know our economy is very dependent on our bonds, our rela-

tionship with the United States,” Trudeau said. “We continue to understand that we have to allow this free flow of goods and services.” Still, it’s unclear what may happen to Canada if Trump pushes ahead with a renegotiation of Nafta. Any restrictions on what has been known as world’s longest undefended border would potentially drive up costs and crimp profits for some of Canada’s biggest companies, including Suncor Energy Inc. and auto-parts supplier Magna International Inc. Trump has repeatedly said he wants significant changes to Nafta, which he has called a “disaster”. Trudeau’s Cabinet believes that Canada isn’t his target, but they are concerned about suffering collateral damage from changes to the pact. Trudeau has expressed some willingness to discuss and possibly rework the deal, which has led to an expansion of trade between the three nations since it went into effect in 1994. “Our relationship with Canada is outstanding, and we’re going to work together to make it even better,” Trump said. “And as far as the southern border is concerned, we’re going to get that worked,” adding that the changes will be fair and ensure that “everybody is happy.” Bloomberg News

Trump vows to deal with N. Korea actions ‘very strongly’


.S. President Donald J. Trump promised to deal “very strongly” with North Korea after Kim Jong Un’s latest missile test demonstrated progress in his quest to develop longerrange nuclear weapons. Trump called the nation a “ big , big problem” du r i ng a joint news conference at the W hite House on Monday with Canadian Prime Minister Justin Trudeau. “We will deal with that very strongly,” Trump said. Officials from South Korea, Japan and the US held a video conference on Tuesday to share information on the missile test,

South Korea’s Defense Ministry said. The three nations agreed the missile program posed a grave and consistent threat to the Korean Peninsula and Northeast A sia, the ministr y said, adding that the US confirmed its “ iron clad ” commitment to defend its two Asian allies. The test launch North Korea carried early on Sunday local time—in the midst of a Trump summit with Japanese Prime Minister Shinzo Abe—showed improvements in the country’s medium-range missile, the South Korean military said. The projectile f lew 500 kilometers into the

Sea of Japan, also known as the East Sea. While Trump has vowed to prevent North Korea from developing the capability to strike the US with a missile, the administration hasn’t yet announced a detailed policy on the issue. Trump and Abe, who at the time of the launch were at the president’s Mar-a-Lago resort in Palm Beach, Florida, responded with a joint rebuke. Abe said the missile test could “absolutely not be tolerated ” and called on North Korea to fully comply with United Nations Security Council resolutions. Trump said the US “stands behind Japan, its great

ally, 100 percent.” China, which remains North Korea’s dominant trading partner, said on Monday that it opposed the test and called on all sides to avoid escalating tensions. A Chinese foreig n m i n i st r y spokesm a n said the country would take a constr uctive and responsible role in discussions. The United Nations Security Council strongly condemned the missile launch in an emergency meeting on Monday. Members agreed to take more measures against North Korea while also stressing the need to reduce tensions in the region. Bloomberg News


Wednesday, February 15, 2017

The World BusinessMirror • Editor: Lyn Resurreccion

Saudi warms to solar to help exports


he nation most identified with its massive oil reserves is turning to wind and solar to generate power at home and help extend the life of its crucial crude franchise.

Starting this year, Saudi Arabia plans to develop almost 10 gigawatts of renewable energy (R E) by 2023, st a r t ing w it h wind and solar plants in its vast northwestern desert. The effort could replace the equivalent of 80,000 barrels of oil a day now burned for power. Add in natural-gas projects set to start later this decade, and the Saudis could quadruple that number, according to Wood MacKenzie Ltd. That could supplant all the crude burned in the kingdom during its winter months. The effort goes hand in hand with a drive by the royal family to broaden the economy following two years of budget deficits tied to low oil prices. More industry, though, means more energy, with the amount of power used at peak times growing by 10 percent in the last year alone. “ R ene w able energ y i s not a l u x u r y a n y m o r e ,” M a r i o Maratheftis, chief economist at

80K The number of barrels of oil Saudi Arabia use for power a day

Standard Chartered Plc., said in an inter view. “If domestic use continues like this, eventually the Saudis won’t have spare oil to export.” In all, Saudi Arabia is seeking $30 billion to $50 billion worth of investment in renewables, Energy Minister Khalid Al-Falih said this month. The ministry will set up a division to handle the tenders until the country establishes a new independent buyer for all power supplies. “The terms on renewable contracts will be motivating, so that

Operations inside Welspun Energy Solar Plant, the largest in India. Bloomberg

the cost of generating power from these renewable sources will be the lowest in the world,” Al-Falih said at a news conference in Riyadh. The kingdom will award its first tenders to build 700 megawatts (mw) of solar and wind energy in September, Al-Falih added.

Energy pricing

The gover nment has a lready raised domestic energ y pr ices to slow dema nd g row t h a nd ca l led for g reater ef f icienc y, according to the R iyad hbased K ing Abdullah Petroleum

Studies and Research Center. Failing to tap more sources, including R E, natura l gas or even nuclear reactors could erode the oil exports still vital to the economy, the center wrote in an October report. Improving the country’s energy efficiency by just 4 percent a year could save the equivalent of 1 million barrels a day of crude by 2030, according to the report. The cornerstone of an economic transformation plan championed by Deputy Crown Prince Mohammed bin Salman, a son of the king, is the sale of as much as 5 percent of Saudi Arabian Oil Co. With the company worth about $2 trillion, according to estimates from the prince, the share sale would be the worlds’ largest initial public offering. The kingdom, Organization of the Petroleum Exporting Countries’s (Opec) biggest member, is the linchpin of the group’s effort to prop up crude prices by cutting output to reduce a global supply glut. Saudi Arabia said it cut production by 717,600 barrels a day last month, its biggest cut in more than eight years, to 9.748 million a day, according to a monthly report from the Opec.

Aramco plants

Saudi Aramco, as the state energy producer is known, already earns most of the Persian Gulf kingdom’s income by pumping one in every 10 barrels sold every day. It’s also driving the country’s

first steps toward a RE industry. At its sprawling campus of office buildings, control rooms and suburban-style residential compounds in Dhahran in the countr y’s east, Saudi A ramco r u n s t h e c o u n t r y ’s b i g g e s t solar plant, a 10 -MW facilit y mounted on a park ing lot roof. In Januar y it star ted the k ingdom’s f irst commercia l w ind turbine to power a facilit y in the nor thwest. T he solar panels atop the parking facility cut the need for the equiva lent of about 30,000 bar rels of oil and the w ind turbines w il l eliminate demand for about 19,000 bar rels, according to A ramco. As the kingdom strives to build industries and spread jobs, other state companies are expanding projects. The Saudi Arabian Mining Co. operates a phosphate plant and is building a new industrial city in the northwest. Power for sections of the vast area where those projects are located will partly come from renewables and new gas projects. “Sma l l projects a re ver y impor t a nt in helping d iversif y t he cou nt r y ’s energ y sou rces,” Stewart Williams, Wood Mackenzie v ice president for Midd le East resea rc h, sa id in a tele phone inter v iew. “ T hese a re steps towa rd bu i ld ing up t he cou nt r y ’s energ y base.” Without a lter native power sources, including gas and renewables, the kingdom would be forced to increase its crude burn.

That can reach as high as 900,000 barrels a day during the kingdom’s summer months, according to data from the Joint Organisations Data Initiative. Saudi Arabia has already taken steps to substitute natural gas for oil in power plants, a change that’s had “immense” impact on the crude burn, the Opec said in its Monthly Oil Market Report released in January. The use of crude for domestic power has fallen by nearly a third since the Wasit gas plant began operations in March 2016, according to the Opec report.

300,000 barrels

Saudi A ramco w il l br ing online the similar-sized Fadhili gas project in the countr y’s east by the end of the decade. T hat gas project and the renewable projects planned for completion by 2023 cou ld save about 300,000 bar rels of oil from being bur nt for power, according to estimates based on IE A and Opec data. Alternative energies are “a key factor in the economic transformation,” Fabio Scacciavillani, chief economist of the Oman Investment Fund, said in an interview. “This region has a great competitive advantage in lowcost energy production and that will continue with renewables. That will create a big advantage particularly in energy intensive industries.” Bloomberg News

UK technology startups eye moves to the continent as Brexit sows anxiety


ritish technology startups are beginning to stress out over Brexit. Initially confident their industry wouldn’t be harmed by Britain’s break from the European Union, UK tech entrepreneurs are now girding for a bevy of challenges. A poll of 940 start-up executives in the UK and other nations found that Brexit, which is set to be triggered in March, is sowing anxiety about fundraising, the hiring of non-British employees, and accessing the European market. Less than half the executives believed 2017 would be a better year than 2016, according to the survey released on Tuesday by the London unit of Silicon Valley Bank, a Santa Clara, California-based investment bank. More than a fifth of fledgling UK tech ventures expect to open offices in continental Europe, and one out of 10 are considering moving their headquarters across the English Channel. Despite the angst, the UK should remain the biggest technology hub in Europe for some time, thanks to supportive regulation and London’s vibrant startup scene, said Phil Cox, president of Silicon Valley Bank UK branch.

“I’m not saying it’s going to be easier but these companies are very disruptive and they will find a way to employ the right people and sell their products and services across borders,” Cox said. The survey is another sign that Brexit may exact a toll on an industry that’s been a bright spot in the British economy since the 2008 global financial crash. London has become a hotbed for groundbreak ing financial technology (fintech) that’s reshaping the banking and payments processing industries. But in 2016, venture capital investments in British fintech firms dropped 34 percent to £625 million ($783 million), according to a report released last week by Innovate Finance, a Londonbased trade group. By contrast, German fintech companies received 35 percent more funding than their counter parts in the UK in the first three quarters of 2016, according to a separate report from KPMG and CB Insights, a New York research firm. The performance marked the first time Ger man f intech ventures attracted more investment than their British counter parts.

A number of nations are trying to follow Germany’s lead by encouraging fintechs. France, Spain, and the Netherlands are offering government-backed investments, subsidized office space, and tax incentives to start-ups. Portugal recently unveiled a €200 million($213-million) fund to invest in local ventures. Some UK based entrepreneurs say Prime Minister Theresa May’s vow to leave the European single market and prioritize immigration was a body blow. Hiring talent is the biggest concern of start-ups. Even if a visa regime favors highly skilled workers, they’ll be tied to the companies that hire them. That means employees won’t easily be able to hop from one firm to another like they do now, nor quit and start their own enterprises. Such mobility is crucial to fomenting a thriving technology hub. “Leaving the single market is going to brutalize our start-up culture,” said Jennifer Arcuri, the founder of Hacker House Ltd., a Manchester-based firm that consults companies on cyber security. “Running startups is hard enough, we don’t need the extra burden.” Bloomberg News

ExportUnlimited BusinessMirror

DTI issues circular on proper use of certification marks By Catherine Joy L. Maglalang Correspondent


ITY OF MALOLOS—The Department of Trade and Industry’s Bureau of Philippine Standards (DTI-BPS) issued a memorandum circular to clarify the proper use of the Philippine Standard (PS) and Import Commodity Clearance (ICC) marks on products under mandatory certification. The BPS disseminated Memorandum Circular 16-04, or the Clarificatory Policy on the Use and Monitoring of the Product Certification Marks, prescribed by Department Administrative Order (DAOs) 04:2008 and 05:2008 and their implementing guidelines to address concerns of manufacturers, importers and traders on the use of the prescribed PS mark logo and on the location where to affix the ICC stickers. The circular specifies how a PS mark or an ICC sticker should be affixed; and provides the appropriate dimensions and design of the PS mark; and the verification process for the marks. The circular also specifies the PS or ICC mark should be placed on the product. As exceptions, the circular indicates when a mark/sticker is not practicable, such as on a ballast, lamp, circuit breaker, electric tape, wires

and cables, and flat cord; and when affixing the sticker will cause damage to its original packaging, such as on a television set, air-conditioning unit, refrigerator and microwave oven. The correct design of the PS mark, including the license number, is prescribed in Annex C of the IRR of DAO 04:2008. The PS license number shall be part of the PS mark indicated at the bottom of the said mark. On the verification of the PS mark or ICC sticker, the circular also indicates the manufacturers and importers shall allow the DTI monitors and enforcers to access their stock room or warehouse to verify their product inventories bearing either the PS or the ICC mark. When a manufacturer or importer fails to present the appropriate product’s box/ package, the circular cites it shall be construed as a violation of the provisions and be dealt with in accordance with established rules and policies. Signed on August 19, 2016, BPS Memorandum Circular 16-04, or the Clarificatory Policy on the Use and Monitoring of the Product Certification Marks Prescribed by the DAO 04:2008 and 05:2008 and the Respective Implementing Guidelines took effect after its publication in a national newspaper of general circulation last December 16.

Editor: Efleda P. Campos • Wednesday, February 15, 2017 A9

PHL, China prepare for SME cross-border trade and investment conference


FFICIALS of the Department of Trade and IndustryExport Marketing Bureau (DTI-EMB) met recenty with representatives of the Bank of China (BOC), Philippine Chamber of Commerce and Industry (PCCI) and International Chamber of Commerce of the Philippines (ICCP), in preparation for the PhilippinesChina SME Cross Border Trade and Investment Conference on March 21.

The organizers, in partnership with BDO Unibank Inc., Eastwest Banking Corp. and Land Bank of the Philippines, recognize the role

of small and medium enterprises (SMEs) in the country’s economic and social development, and thus, would want to provide SMEs access

to the global marketplace and participate in the global value chain. The conference aims to bridge Philippines-China trade and investments through business matching using BOC’s six-step matchmaking service and to arrive at a cooperative declaration between Philippine and Chinese enterprises. The BOC’s six-step matchmaking service consists of (1) building the database of Chinese and Philippine SMEs; (2) pairing SMEs based on their respective needs and interests; (3) arranging video-conference meetings between paired SMEs; (4) face-to-face meetings during the conference itself; (5) field study through site visits, and (6) the provision of end-to-end financial services to facilitate cooperation from both companies. The DTI-EMB, which Undersecretary Nora K. Terrado said could be “the champion of micro, small and medium enterprises’ [MSMEs] internationalization,”

hopes to host about 500 Philippine companies that will engage in business- matching sessions with the 200 companies coming from China. Companies from different industries—such as food processing, building materials, furniture, agriculture, fisheries, e-commerce and information technology, construction, construction equipment, textile and garments, iron and steel, tourism and real estate —are targeted to participate in the conference. Aside from one-on-one meetings between businesses, the conference will also include plenary sessions to discuss various topics, such as Ease of Doing Business and MSME Internationalization, among others. SMEs interested in participating in the conference may contact Rudolph Jay Velasco of DTI-EMB through e-mail at or call him at 465-3300 local 217.

The Belgians are coming! By Jose Antonio Buencamino

Commercial Counselor, Philippine Trade and Investment Center-(PTIC)-Brussels &

Jeoffrey Houvenaeghel Trade Assistant, PTIC-Brussels



Part One

F plans push through, a Belgian business mission will be coming to town in the first quarter of 2017. It will not be a huge delegation accompanied by high officials and ministers and led by Belgian royalty— like the last that came some 20 years ago, and the first that graced the inauguration of the first light-rail transit system more than 30 years ago. But it will, nonetheless, be one that will be hungry for opportunities in this more than 100-million-strong market, the Philippines.

Without necessarily whetting anyone’s appetite for the business mission, we take a look at available data to see how Belgium has traded with the Philippines. Just to warn the reader, the numbers can be underwhelming, although they could also portend higher values and deeper trade flows in the future. That is, precisely, the challenge.

Belgium in international trade

the Belgian Foreign Trade Agency said Belgium was the 12th-largest exporter and 14th-largest importer of goods in the world in 2015. Data provided by Eurostat indicate Belgium’s two-way global trade reached €695.9 billion in 2015 (roughly six times that of the Philippines) and has been steadily, albeit marginally, growing each year on average by 0.7 percent from 2011 to 2015. Two-way trade with the European Union (EU) in 2015 accounted for 67 percent of the total, while 33 percent was with the rest of world. Belgian exports increased by an average of 1.2 percent while imports increased on average by 0.2 percent from 2011 to 2015. Belgium had an overall trade surplus of €19.7 billion in 2015. But Belgium’s international bilateral trade mainly relies on a

large part on its EU neighbors (Germany, the Netherlands, France, the United Kingdom and Italy) and the United States. These six countries combined accounted for roughly 61 percent of Belgium’s total global trade from 2011 to 2015. Analyzing Belgian bilateral trade with non-EU countries reveals Belgium has been importing more than it is exporting every year (average growth of 3.79 percent from 2011 to 2015) and its exports have been far from consistent, having declined in 2014, but performing exceptionally well in 2012. Belgium has built a considerable trade deficit with nonEU countries over the years. In 2015 it had a trade deficit of €25 billion with non-EU countries. Belgium’s trade performance revealed it is a strong exporter to its EU neighbors, but it is increasingly importing from non-EU countries.

Belgium-EU trade

AS mentioned above, Belgium’s trade relies heavily on six countries of which five are EU neighbors (Germany, the Netherlands,France,theUnitedKingdom and Italy). These five EU countries combined represent an annual average of 80 percent of Belgium’s total bilateral trade with the EU from 2011 to 2015. To be continued


Trade Secretary Ramon M. Lopez and Industry Promotion Undersecretary Nora K. Terrado lead the press conference on the recent hosting by the Department of Trade and Industry of Asean-related activities held at the Board of Investments AVR Penthouse in Makati City. ALYSA SALEN

DTI holds session for franchisors in Vietnam By Gliceria N. Cademia

Trade and Industry Development Specialist DTI’s Export Marketing Bureau


HE Export Marketing Bureau (EMB) of the Department of Trade and Industry (DTI) recently held an information session for the franchising sector at the DTI International Building in Makati City to prepare them for an Outbound Business Matching Mission in Vietnam in June. The event was attended by members of the Association of Filipino Franchisors Inc., the Philippine Franchise Association (PFA) and staff of the EMB-Services Division (SD). Vu Viet Nga, trade counselor of the Vietnam Trade Office, made a presentation on the franchising market in Vietnam to familiarize Filipino exporters and aspiring exporters. She said Philippine franchisors are encouraged to put up franchises in Vietnam, especially since this concept is quite new in that country. Traditionally, the Vietnamese do not want to share business and business knowledge. She said there are no restric-

VU VIET NGA, trade counselor of the Vietnam Trade Office, discusses the franchising market in Vietnam during the Outbound Business Matching Mission information session held at the DTI International Building on February 7.

tions for franchising in Vietnam. The only requirement for a license is a dossier to be registered with the Vietnam Ministry of Industry and Trade or to the local governments’ DTI. She described Vietnam as open for investment with favorable investment incentives and exemptions on income tax, land lease and

import duties. Overall investment policy is lax, with foreign investors given a maximum share of 68-percent ownership. She said there are supermarkets, but no big malls, in Vietnam. The Vietnamese prefer health and spa services, explore new things and love buying imported processed food. Millennials traveling to Thailand

and Malaysia bring imported products from these countries. Vietnam is one of the world’s biggest exporters of seafood, rice, Robusta coffee, rubber, cashew, pepper, textile and garments, and footwear. Like the Philippines, Vietnam enjoys benefits of economic integration and has made dramatic steps in the integration process over the past 20 years. It generated a revenue of $5.4 billion in 1995, increasing to $165 billion in 2015. The Philippines has established 65 projects in Vietnam, amounting to $284 million, as of 2013. The companies include United Laboratories, San Miguel Corp., Universal Robina Corp., Oishi, Manila Water and Jollibee. EMB-SD Chief Maria Teresa Loring clarified definitions of product and service sectors. She differentiated the service-sector and product-sector promotion. She said the World Trade Organization classifies franchising under distribution services together with retailing and wholesaling. A franchisor that establishes a branch in another country is considered an exporter.

A10 Wednesday, February 15, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror


Gray areas


HE quantitative restriction (QR) on rice, a nontariff barrier that has allowed the Philippines to limit rice imports, will be lifted on June 30 this year.

The World Trade Organization (WTO) has allowed the Philippines to impose rice-import quotas since 1995. Manila has committed to remove this starting July 1 and to reinstate the tariffs on certain agricultural commodities, such as pork offal and mechanically deboned meat (MDM) and mechanically separated meat (MSM)—raw materials used in manufacturing processed-meat products. The government also slashed the tariffs on butter, buttermilk, grated cheese, frozen French fries and rapeseed meal. Despite the fact June 30 is fast approaching, the government has yet to make up its mind on the strategies it would pursue to ensure the country’s smooth transition to a QR-less environment. The signals the government has been sending to sectors that may be affected by its removal have been vague. While it appears the Duterte administration has decided the extension of the QR is no longer worth pursuing, officials have yet to come up with safety nets to help farmers go head to head with their counterparts in Southeast Asia. In recent weeks, there have also been pronouncements from key Cabinet officials that the government is keen on extending the validity of an executive order (EO) that reduced the tariffs on offal and MDM. The government said this can be done while it seeks to amend Republic Act (RA) 7178, the law which allowed the QR on rice. Officials have maintained that pending the amendment of the law, Manila would ask the WTO to be “patient” with the Philippines while it irons out kinks in its regulatory environment. However, the government could not say when it would be able to submit the draft bill to amend RA 7178 to Congress. And before it could reach Congress, the draft bill would have to be subjected to the scrutiny of affected stakeholders. There is also the matter of extending the validity of EO 190, which was signed by former President Benigno S. Aquino III. The government is unclear as to how long it intends to continue implementing the tariff concessions prescribed in the EO. In the meantime, affected sectors, such as meat processors, cannot do anything, but wring their hands and wait with bated breath as to when the government would finally be upfront about its plans regarding the removal of the QR and when the low tariff on offal would be raised to its previous level of 40 percent. Reverting the tariff on offal and MDM to 40 percent would surely increase the wholesale and retail prices of some processed-meat products. Businesses are averse to uncertainty and instability. Farmers are anxious about the future. The Duterte administration should say once and for all how it intends to help sectors cope with the impending removal of the rice- import quotas. Silence, in this case, is not advisable. Since 2005

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The new Social Security Commission Susie G. Bugante

All About Social Security Part Two


side from Social Security Commission (SSC) Chairman Amado D. Valdez and Vice Chairman and Social Security System President and CEO Emmanuel F. Dooc, the other members of the SSC include Labor Secretary Silvestre H. Bello III, who sits in an ex-officio capacity.

A seasoned lawyer and humanrights advocate, Bello has always been a worker for peace and a longtime public servant. In fact, he has unselfishly served the government under four presidents in various capacities. During the time of President Corazon C. Aquino, he was named undersecretary of the Department of Justice (DOJ) from 1986 to 1991, then appointed secretary until 1992. He served as solicitor general for two years during the term of President Fidel V. Ramos, and again as justice secretary in 1998. Under the administration of President Gloria Macapagal-Arroyo, he was tasked to lead the government panel in talking peace with the Communist Party of the Philippines-New People’s Army-National Democratic Front—a post he held for a few years. Under the administration of President Duterte, aside from getting assigned with the task of negotiating for lasting peace, he was also entrusted to lead the charge to end endo, illegal contractualization and ensure industrial peace. Another members of the SSC who share the responsibility in the governance of the SSS in terms of providing policy directions, monitoring and overseeing management actions pursuant to the powers and duties granted under Republic Act 8282 (Social Security Act of 1997) is Diana Pardo-Aguilar. Aguilar sits as the chairman of the Investment Oversight Committee that oversees the SSS investmentreserve fund, amounting to P465 billion as of October 2016, and the Information Technology Committee. She is, likewise, a member of the Risk Management Committee and a resource person of the Audit

Committee. As chairman of the SSS’s Investment Oversight Committee, Aguilar sets the direction in making strategic initiatives and policy reforms, which contributed to generating a higher ROI in the investment performance of the SSS. Some of these reforms are synchronizing the renewal of accreditations, amending pertinent policy guidelines to enhance the transparency in the selection of brokers and governance of investible funds. Another member of the SSC is Arthur L. Amansec, founder and first national president of the Christian Labor Organization of the Philippines. He is an experienced labor lawyer and a longtime labor arbiter prior to his appointment to the SSC. As commissioner, he chairs the Governance, Organization and Appointments Committee, and is a member of the Committee on Coverage, Collection and Other Related Matters, and Investments Oversight Committee. Michael G. Regino was appointed to the SSC in October 2016, representing the public sector. He sits as a member of three SSC Committees: SSC-IT (Information Technology) Committee, Committee on Coverage, Collection and Other Related Matters and Governance, Organization and Appointments Committee. Regino has more than 30 years of corporate experience in various fields, including subdivision development, housing construction and property management, among others, where he conceptualized, organized, developed and successfully operated these enterprises in a harmonious and non-unionized working environment.

All SSC members have quasijudicial functions through the decisions rendered in the evaluation of cases involving disputes on SS coverage, benefits, contributions and penalties.  

1992), was part of the Philippine Overseas Employment Administration (POEA) as Director IV (19941996) and then deputy administrator (1996-1998), and acted as consultant of the House of Representatives Committee on Education (2005), and of the Commission on Higher Education (2009).         Duque is currently the chancellor of Lyceum Northwestern UniAs a result, these enterprises versity (LNU) and the chairman of directly created over 3,000 prothe Dagupan City Water District. fessional and labor-intensive emHe is also the chairman of Daguployment and indirectly produced pan City Peace and Order Council, another 5,000 work opportunities. Policy Advisory Council Province Aside from his present job as soof Pangasinan, Pangasinan Historicial security commissioner, he also cal Culture Commission, Dagupan serves as the president and memCity Historical, Cultural and Arts ber of the board of directors of San Commission, a member of the PhilAgustin Services Inc., Agata Minippine Constitution Association, ing Ventures Inc., and Exploration and a consultant of the Dangerous Drilling Corp.; senior vice president Drugs Board.         and COO of St. Augustine Gold and Finally, Anita Bumpus-Quitain Copper Ltd.; and executive direcis the other woman-member of the tor of TVI Resources Development SSC representing the labor sector.  Phils. Inc. He, likewise, sits in the She sits as a member of the followboard of directors of Nationwide ing SSC committees:  Governance, Development Corp., as well as of Organization and Appointment KingKing Mining Corp., where he is in charge of Davao operations.         Committee; Investment Oversight Committee; Coverage, Collection Jose Gabriel M. La Viña was apand Other Related Matters Compointed member of the SSC in Nomittee; Media Affairs Committee; vember 2016. He currently chairs and Audit Committee. Although the SSC Audit Committee, as well still a neophyte member of the SSC, as the Media Affairs Committee Quitain has already notched an and is a member of the Investment achievement of major importance Oversight and Risk Management or significance, that is, by voting Committees. yes on the increase in the pension Prior to his appointment to the of SSS pensioners. Additionally, SSC, La Viña was the social-media as an employee for 31 years of the director of the Duterte 2016 presiSocial Security System assigned to dential campaign and a member of the  Region 9 office in Davao City, its Media Central and Communicaher major achievement as such emtions Group. He has behind him 32 ployee was when she took charge of years experience as founder and the operations of the then newly CEO in various industries, includopened SSS Representative Office ing home-mortgage brokerage, real in Digos City, Davao del Sur, as ofestate, cooperative banking, techficer in charge. She stayed there nology, auto sales, supply-chain for five years.         management, hospitality and muAll SSC members have quasisic entertainment.         judicial functions through the deGonzalo T. Duque, a most outcisions rendered in the evaluation standing Pangasinense, most of cases involving disputes on SS outstanding public servant, most coverage, benefits, contributions outstanding educator, most outand penalties. standing youth leader and most outstanding Bedan, sits as chairFor more details on SSS programs, members can man of the Coverage, Collection drop by the nearest SSS branch, visit the SSS web site and Other Related Matters Com(, or contact the SSS call center at mittee and a member of the Media 920-6446 to 55, which accepts calls from 7 a.m. on Affairs Committee. Duque began Monday all the way to 7 a.m. on Saturday. his professional career by working Susie G. Bugante is the vice president for public as a hearing officer in the Securiaffairs and special events of the SSS. Send comties and Exchange Commission ments about this column to susiebugante.bmir(1980-1981). He was later elected as Pangasinan vice governor (1987-

Opinion BusinessMirror

When govt and transport Supervisory colleges react wrongly to laws Atty. Dennis B. Funa


Michael Makabenta Alunan

on the contrary


ast numbers of the commuting public and the public transport drivers and operators are often at the mercy of either the government’s wrong interpretation of its own policies or by knee-jerk reactions of some transport leaders who can’t offer reasonable alternatives. n Pareto Principle distorted? On government’s side, Congress’s Traffic Crisis Act, or House Bill 4334, and the Department of Transportation’s (DOTr) transport modernization defy logic, despite the support of academe familiar with the Pareto Principle, or the 80-20 law on uneven law of development. While over 80 percent of vehicles on public roads are private cars, the government looked at the other 20 percent by penalizing public transport instead, not realizing its impact on millions of commuters. The government can’t seem to see the “elephant in the room” and, therefore, can’t see that private cars are the biggest contributor to traffic. A private car carries an average of only 1.2 passengers, says a study by Japan International Cooperation Agency, which also  estimated  that as much as P2.4 billion is lost  daily due to traffic. In this country, the government spares private cars, but developed countries like Singapore penalize private cars that help worsen traffic. Singapore generates $6 billion a year from car parking fees, apart from  high excise taxes  on car ownership. n Govt reads public’s pulse wrongly? House Bill 4334 is silent on private cars, but has five  provisions on public transport. These are Section 14  on “Route Rationalization” of   Public  Utility Vehicles (PUVs);  Section 15  on  the “Revocation and  Modification of  PUV Franchises  and Permits”;  Section 16,  “Suspension  of  PUV Franchising  Authority” previously granted to local government units (LGUs);  Section 17, “Government Takeover of Franchises; and Section 18, “PUV Operator Obligations  and  Responsibilities”, which also proposes converting drivers  into monthly salaried  employees.  Transport leaders fear  HB 4334 will put them out of business, as it also reinforces the DOTr’s transport modernization, which effectively replaces small operators with fleet-management systems  along  big  corporate business models. Once signed, taxis and  AUV operators must have a minimum capitalization  of  P12 million and 10 units; jeepney operators, a minimum capital  of  P7 million for 10 units  starting  this  year, 20 units by 2018 and  40 units  by  2019. This only allows big businesses to edge out small operators, many of whom are  drivers themselves. Most operators own just one or  two  units, and only a  sprinkling few own over 10 units. Some were former overseas Filipino  workers. n Must business rule over public service? Modernization also translates to an effective phaseout for vehicles 15 years and older, and the installation of  new Euro 4 engines to achieve cleaner emissions. Ramil Padrigo, president of the Cubao Rosario Operators and Drivers Association, said there is no assurance Euro 4 engines will reduce emissions, as many brand-new vehicles incur emission problems even after purchase. “Why change an entire vehicle, or

engine, if there are other alternatives to wipe out emissions even by 99 percent,” Padrigo said, asking, “why the 15 years of age is based on the oldest component, when some car parts can even last maybe 100 years, like the chassis, or even  the  engine  block, unless some big businesses  just want to sell  entire vehicles  and engines.” Citing the likely influence of those in academe, who may have suggested the installation of  Global Positioning System (GPS), Wi-fi and other gadgetry  in the draft program, Padrigo said this is ridiculous, as a GPS is useless with the jeepney’s fixed routes. With 250,000 jeepneys nationwide, a Euro 4 engine replacement at P700,000 each means a maximum wholesale market of P175 billion; and for a total jeepney replacement at P1.2 million, that’s a market of P300 billion. By any computation, amortizations will  burden the sector. n Transport leaders or dealers? How transport leaders reacted vary wildly. Some leaders swallowed the program on rumors they will earn fat commissions of P200,000 per unit. Other groups opposed the program by calling for a “Tigil Pasada” (Stop Driving) without offering alternative solutions. Worst, some operators and drivers in some areas  like Marikina were threatened from access to terminals and other privileges, etc., if they do not join the protest, although it is supposed to be voluntary. Pasay City was not paralyzed, as it did not participate, but Benjamin Fabia of the Pasay transport Service  Cooperative, which is pushing for viable alternatives, was maliciously cited  in a tabloid as a strike participant when he pushed for “Tuloy Pasada” (Continue Driving). n Some leaders on the right track. Fabia’s response to modernization’s “fleet management” is cooperativism that enables them to band as one to qualify with the capitalization and the increasing number of units. Fabia, Padrigo  and other transport leaders oppose what is wrong with the government’s program, but do not want rallies or  strikes. They want to offer  better solutions. These sensible leaders argue, on the contrary, why blame public transport  for worsening  traffic when  franchises have long been restricted in many routes, while  over 350,000 private vehicles and close to 1  million motorcycles  are  sold  every year. Fabia says a jeepney with 20 passengers is equivalent to 16 private cars of road space. For buses with a seating capacity of  60 passengers and 10 to 20 passengers  standing,  that’s  about 50 to 60 cars of road  space. They also asked that if they can reduce emissions, rehab and repaint their vehicles to look like brand-new, do they still have to be phased out in favor of brand-new vehicles or engines? If so, then the government may be unwittingly used  by interest  groups  just wanting  to make money.



N March 2017 the Philippines will be participating in a meeting of a supervisory college in Hong Kong. Supervisory colleges is defined by the International Association of Insurance Supervisors (IAIS) as “a forum for cooperation and communication between the involved supervisors established for the fundamental purpose of facilitating the effectiveness of supervision of entities, which belong to an insurance group; facilitating both the supervision of the group as a whole on a group-wide basis; and improving the legal entity supervision of the entities within the insurance group”.

It has also been defined as a “joint meeting of interested regulators with company officials and include detailed discussions about financial data, corporate governance and enterprise risk-management functions. Supervisory colleges are intended to facilitate oversight of internationally active insurance companies at the group level [IAIG]”. Another definition provides that “supervisory colleges are groups of regulators from different countries that work together

to oversee large cross-border financial organizations or multiple jurisdictions”. It pertains only to insurance companies under their respective jurisdictions that are part of groups “with cross-border operations”. The subject also finds relevance in the regulation of insurance-holding company systems with international operations. In April 2008 the Financial Stability Forum (now the Financial Stability Board, or FSB) issued a

Blended over single origin Teddy Locsin Jr.

Free fire


HE New York Times, bastion of liberal opinion, published an article that by 2060 minorities will be the majority in America. So, it seemed that Americans should extend a warm welcome to newcomers who may be welcoming their posterity into a country changed into the newcomers’ image. Psychologist Allison Skinner says the effect was the opposite—not a feeling of welcome, but one of fear at the prospect that Americans today will be Strangers in a Strange Land, to borrow the title of Ursula Le Guinn’s classic fable. Skinner discovered this when she

conducted a test on American reaction to the New York Times article. The respondents showed fear and hostility. Another test confirmed this finding—a test of computerized reaction time when subjects had to quickly pair their reactions to pictures of white and colored

Wednesday, February 15, 2017 A11

report to the G-7 finance ministers and central bank governors setting out a comprehensive set of recommendations for strengthening the global financial system. One key recommendation therein was the operationalization and expanded use of supervisory colleges for certain global financial institutions. Subsequently, the IAIS Insurance Core Principles 17 provided: “The supervisor supervises insurers on a legal entity and group-wide basis”. ICP 25 provided: “The supervisor cooperates and coordinates with other relevant supervisors and authorities subject to confidentiality requirements.” The underlying objective of these colleges is to contribute to the stability of financial markets. On October 24, 2009, the IAIS adopted the “Guidance Paper on the Use of Supervisory Colleges in Group-Wide Supervision.” Under the definition of supervisory colleges, supervisors are allowed to acquire understanding of an insurance group with respect to: a) risk exposures and inherent risks; b) financial position and soundness; c) capital adequacy and business activities; and d) risk management

and governance systems. A supervisory college “has no legal or binding authority as a decision-making body”. Instead, the effectiveness of the college depends upon agreement and cooperation. It does not seek to replace entity-level supervision, but rather supplements the “solo-level supervision of single entities with a group”. Supervisory colleges are also practiced in the banking sector. The supervisory college is called to convene or is initiated by the group-wide supervisor, also called the chairman of the college, which “would normally be the supervisor with the statutory responsibility to supervise the head of the insurance group”. Usually, it is the location where: a) the parent of the insurance group is based; b) the insurance business activities of the group are actively controlled; c) the largest portion of the group’s balance sheet is located; or d) the main business activities of the group are undertaken. A basic hallmark of these meetings is the confidentiality of information.

folk. The results showed that telling the dominant race about the increasing size or increasing political power of minorities triggers fear and hate. It doesn’t help when minorities, in a natural reaction to majority prejudice, emphasize their difference in dress, custom and accent-speaking English. True, colored folk are all American citizens. But feelings are not changed by law. Obama said change needs the heart not just the law—though law is a good start. But the Civil Rights Act, like the Confederate defeat, gave a new lease of life to old bias. A good law doesn’t change the fact that no one likes strangers among themselves. It has happened everywhere even in continents where the people are all colored. Hutus massacred Tutsis, and Tutsis paid them back. Oddly, South African whites put down but never massacred blacks. And blacks never retaliated against their white African brothers. What is the solution?          

It’s found in coffee. Blend.             A brother of former House Speaker Joe de Venecia told a rapt audience of Filipinos aspiring to emigrate, “Stop eating tuyo”. It scares the other people in the building that someone is eating what smells like a decomposing corpse; in the case of durian, the odor of genitals. Or so I’m told.          Blending in is only polite. Single origin coffee ground is prized but blended isn’t much different. I say this out of concern for the safety of immigrants. Even Catholic teaching tells us to avoid martyrdom for our Catholic beliefs, Hugh Benson wrote in The Lord of the World—Pope Francis’s favorite sci-fi fiction. Practice, but don’t show off your faith if it offends society. I say this also with deep regret that Americans have forgotten that they are not just any race of men but a promise of solidarity among all people in one world under a triune but single God who made them all.

Is responsible mining feasible? Edgardo J. Angara  

Continued from A1


ining’s bad side, however, is equally well-documented. Entire mountains in Palawan, Samar and the Caraga region get bulldozed and exported, while the country—especially the LGUs where the mines can be found—gets very minimal benefit. Many times, local communities are left environmentally damaged, and residents suffer various ailments and chronic illnesses in the wake of unscrupulous mining operations. 

Properly harnessed, developed and processed, our minerals can help finance our bridges, roads, schools and hospitals, as well as a

host of social services. Utilizing a fraction of our deposits could already spur immense countryside growth not just in mining, but in

ancillary industries, as well. But leaving the industry unregulated and its fiscal regime grossly lopsided against the national government and local communities, mining could just end up becoming a bane, rather than a boon, for the country.  Technology and global best practices may provide solutions and help us save our treasures.  In 2012 the Congressional Commission on Science & Technology and Engineering, which I chaired, pushed for the creation of innovation clusters for responsible mining—tripartite partnerships among mining companies, universities and government agencies in research and development (R&D) and technology transfer.    Through these clusters, responsible mining companies could tap local universities and communities to conduct biodiversity inventories, water-quality tests and social-

World’s biggest debt market faces huge test from Trump By Tracy Alloway Bloomberg View


resident Donald J. Trump is a man obsessed by imports, and untroubled by exports. Since he first hit the campaign trail, Trump has been squarely focused on boosting domestic production by limiting cheap imports from places like China and Mexico, and replacing them with homegrown offerings. Much more rarely has he talked about selling those homegrown offerings—be they Ford Explorers or Boeing 747s—to the rest of the world. It’s a curious state of affairs, like encouraging people to cook by

banning restaurants. Disconcertingly, Trump’s brand of import substitution is now playing out in the world’s biggest debt market. Debt is, without a doubt, the US’s biggest export. The US Treasury market is not just worth trillions ($13.9 trillion, to be exact), but also represents the “risk-free” rate against which other financial assets are judged, if not fully pegged. To overstate its importance is difficult: It is huge, big league—one of the few markets to which Trump’s brand of hyperbole might actually apply. And yet, US Treasuries have been finding far fewer foreign buyers in recent months—a trend that has so far been offset by higher domestic

demand. US investors have been buying longer-term government debt at a record pace since June, while recent data show Japanese buyers, the biggest owners of US Treasuries, have reduced their holdings for two consecutive months. Demand for US Treasuries has moved “from global to local”, Bank of America Merrill Lynch rates strategists Carol Zhang and Shyam Rajan wrote in a note to clients last week, calling the shift “the biggest macro theme” playing out in markets. That might be music to the ears of market mercantilists, but it comes at a cost. Adversaries of import substitution have long argued that the strategy boosts short-term growth at the ex-

pense of longer-term health. It flies in the face of comparative advantage—a central tenet of classical economic theory—and precludes economies from enjoying all of the benefits that come with specialization, including lower prices. A similar dynamic applies to the transformation of the US Treasury market. While a pickup in domestic demand can initially help offset selling by foreign investors—such as the People’s Bank of China attempting to stabilize the yuan or Saudi Arabia reducing reserves to deal with lower oil prices—it may well leave the market more fragile over the longer term. US pension funds, banks and insurance companies can opt to “Buy

American” with Treasuries, but there are limits, and there are risks. Those risks became painfully clear during the euro-zone debt crisis, when troubled European Union members used central-bank liquidity facilities to buy their own debt after foreign buyers went on strike. The move helped them weather the worst of the crisis, but it also became a pressure point as investors fretted over a “feedback loop” of codependency and negative sentiment between banks and bonds. That feedback loop idea has most recently been revived by Paul Schmelzing, a doctoral candidate at Harvard and a visiting researcher at the Bank of England, who has warned that a sharp

Dennis B. Funa is currently the deputy insurance commissioner for Legal Services of the Insurance Commission. E-mail:

impact assessments of their operations. With the help of the government, they could usher in the transfer of the world’s top mining technologies that are also environmentally safe. Such collaboration could help create a deep talent pool for highvalue jobs in science and technology for mining and its associated skills in refining and logistics, while ensuring that the industry is not only environmentally sustainable but socially acceptable, as well.  In 2012  Time  magazine ran an article saying that the Philippines, with the previous administration’s moratorium on new mining permits, could set the standards of extractive industries across the globe. Better R&D and technology transfer would make that happen.  It didn’t.                                                 

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sell-off in bonds could be worsened as investors are forced to offload their holdings as they lose value. Certainly, American investors are buying US Treasuries at a tricky time; rumors of the death of the 30-year bull run in bonds have been much exaggerated, but they are gaining steam. The fact that investors have been buying longer-maturity bonds exposes them to significant duration risk, meaning they’re more exposed to changes in interest rates at a time when the Federal Reserve is expected to raise. Perhaps more relevant to Trump’s ambitions are the self-apparent limits that a domestically funded budget will put on his growth plans.

2nd Front Page BusinessMirror


Wednesday, February 15, 2017



By Cai U. Ordinario



t least one young Filipino is infected with the human immunodeficiency virus (HIV) every hour. This was the chilling message of National Youth Commission (NYC) Chairman Aiza Seguerra, who revealed that around 24 young Filipinos are infected with the virus every single day.  Seguerra said 85 percent of new daily infections are accounted for by infections among young Filipinos aged 15 to 30.  “Of 28 Pinoys who get infected, 24 to 26 of them are from the youth. [Around] 62 of new infections [are from]…15 to 24 years old,” she said.  The increase in the number of Filipinos living with HIV has been exponential in recent years, and Seguerra attributes this to greater awareness and testing among the young.  In the hopes of stemming the increase in HIV prevalence among young Filipinos, Seguerra said the NYC is now pushing for the lowering of the age limit for obtaining HIV testing without parental consent to 15 years old.  Seguerra added Filipinos are starting to experiment with sexual intercourse at a younger age. She said the NYC has received reports that some girls got pregnant at 10 years old by 11-year-old school boys. The early onset of sexual intercourse not only open young Filipinos to pregnancy, but also to sexually transmitted diseases, such as HIV, which could lead to full-blown acquired immune deficiency syndrome (AIDS). Under Republic Act 8504, otherwise known as the Philippine AIDS Prevention and Control Act of 1998, Filipinos who are of legal age, or 18 years old, are the only ones who can get tested for HIV without parental consent.  

The number of young Filipinos infected with HIV every single day

See “HIV,” A2

SC restores tax privileges of minimum-wage earners T By Joel R. San Juan


HE Supreme Court (SC) has invalidated several provisions under Revenue Regulation (RR) 10-2008 of the Bureau of Internal Revenue (BIR) granting tax privileges to minimumwage earners under Republic Act (RA) 9504. In a decision written by Chief Justice Maria A. Lourdes Sereno, the Court en banc nullified  Sections 1 and 3 of RR 10-2008 insofar as they disqualify minimum-wage earners earning purely compensation income from enjoying exempt status when they receive bonuses and other compensation-related benefits exceeding the statutory ceiling of P30,000.   A lso declared null and void was the provision in Section 3, providing for the prorated application of the personal and additional exemptions under RA 9504 for taxable year 2008, and for the applicability of the minimum-wage earner exemption to begin only on July 6, 2008. The SC directed the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) to grant

RR 10-2008

The BIR directive that scrapped the tax-exempt status of minimum-wage earners a refund, or allow the application of  the refund by way  of  withholding-tax adjustments, or allow a claim for tax credits by all individual taxpayers whose incomes for taxable year 2008 were subjected to the prorated increase in personal and additional tax exemption. Also covered by the refund order were minimum-wage earners whose 13th-month pay and other bonuses and benefits were subjected to tax. The decision stemmed from the consolidated petitions filed by several lawmakers, individuals and labor groups seeking to nullify the provisions of RR 10-2008. T he BIR issued the revenue

reg u l at ion on September 24, 2008, to implement the provisions of  RA  9504, which granted, among others, income-tax exemption to minimum-wage earners and an increase in personal and additional exemptions for individual taxpayers. The protesting legislators, labor groups and individuals argued the RR departed from the actual intent of RA 9504, as this restricted the implementation of the minimum-wage earners ’ income-tax exemption only for the period starting July 6, 2008, instead  of  applying the same the whole year. The protesters also challenged the adoption of the prorated application of the new set of personal and additional exemptions for taxable year 2008. Likewise, the group contested the validity of the imposition of a condition for the availment of the exemption provided by RA 9504, such that in receiving other benefits in excess of P30,000 renders them ineligible for tax exemption. The petitioners contended the law provides for the unconditional exemption of minimum-wage earners from income tax. In granting the consolidated petitions, the Court held the DOF and the BIR committed grave abuse of discretion in promulgating Sections 1 and 3 of RR 10-2008. “Sections 1 and 3 of RR 10-2008 add a requirement not found in the law by effectively declaring that a minimum-wage earner who receives other benefits in excess of the statutory limit  of  P30,000 is no longer

entitled to the exemption provided by RA 9504,” the SC said. The SC noted the increased exemptions were already available much earlier than the required time of filing of the return on April 15, 2009, while RA 9504 came into law on July 6, 2008, or more than nine months before the deadline for the filing of the income-tax return for taxable year 2008. “Here, not only did RA 9504 take effect before the deadline for the filing of the return and payment for the taxes due for taxable year 2008, it took effect way before the close of that taxable year. Therefore, the operation of the new set of personal and additional exemption in the present case was all the more prospective,” the Court said. The High Tiribunal added there was nothing in R A 9504 that provided or even suggested a prorated application of exemptions for taxable year 2008. Thus, the DOF and the BIR went beyond the enforcement of the law in issuing the revenue regulations  mandating the prorated application  of  the new personal and additional exemptions for 2008. “Therefore, there is no legal basis for the BIR to reintroduce the prorating of the new personal and additional exemptions. In so doing, respondents overstepped the bounds of their rule-making power. It is an established rule that administrative regulations are valid only when these are  the laws they administer,” the High Tribunal added.

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