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Friday, February 17, 2017 Vol. 12 No. 128

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EXTENSION OF E.O. 190 WILL AVERT HIKES IN PRICES OF PROCESSED MEATS

motoring

Govt told to fast-track EO on meat imports

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By Jasper Emmanuel Y. Arcalas

@jearcalas

he government should issue a new executive order (EO) retaining the low tariffs on offal and mechanically deboned meat (MDM) before June 30 to prevent spikes in the prices of processed meats.

40%

Isuzu kicks off 20th anniversary celebration »E1

The tariff rate that will be slapped on MDM by July 1 sans a new EO

Victorio Mario A. Dimagiba, former trade undersecretary and president of consumer-protection group Laban Konsyumer Inc., said the tariffs on raw materials used

Common station to help metro commuters »E3

Continued on A2

seeing orange»E4

ANG OFFERS $14-B AIRPORT IN BATTLE OF PHL TYCOONS T

japanese garden at the heart of makati biz district Washington Sycip (center), founder of SGV and Co., joins officials of Security Bank Corp. and Mitsubishi UFJ Financial Group (MUFG) of Japan as they unveil the first Japanese garden, named Tsuruki-En, in the heart of the Makati Central Business District. The sake-breaking ceremony was also attended by (from left) MUFG Managing Executive and CEO for the Asia and Oceania Region Takayoshi Futae, Makati City Mayor Abigail Binay, Japanese Ambassador Kazuhide Ishikawa, Chairman Emeritus of Security Bank Corp. Frederick Dy, Ayala Group CEO Jaime Augusto Zobel de Ayala and Security Bank Chairman Alberto Villarosa. ALYSA SALEN

Dalian trains to give MRT riders relief by March By Lorenz S. Marasigan

‘R

@lorenzmarasigan

eally?” With questioning eyes, his left eyebrow raised and mouth almost agape, Mark de Castro, a 23-year-old call-center agent, could only reply with disbelief, when he learned from the BusinessMirror that the new Dalian trains will be deployed next month. “It’s about time; but I guess that’s good news,” he continued.

De Castro, who hails from Quezon City, is one of the 420,000 regular commuters of the Metro Rail Transit Line 3 (MRT 3) who stand to benefit from the 48 new trains to be deployed in March. MRT 3 General Manager Deo Leo N. Manalo said his office is eager to deploy the new trains, all of which have been delivered by Locomotive and Rolling Stocks of China.  “We have received all of the 48 trains from Dalian. We are ready to deploy them next month,”

PESO exchange rates n US 49.9220

he told the BusinessMirror via phone. “We are just waiting for the safety certification from Bombardier.” The German company was subcontracted by Dalian to provide the onboard signaling system for the new trains. “We also have to do a 1,500kilometer test with the new signaling system,” Manalo said.  The Aquino administration jump-started the acquisition of 48 new train cars for the Edsa line.

MANALO: “We have received all of the 48 trains from Dalian. We are ready to deploy them next month.”

It faced several years of delay due to a legal tussle with the owner of the infrastructure. Continued on A2

he battle of Philippine tycoons to build a new airport in the nation’s capital is heating up, as San Miguel Corp. proposed a P700-billion ($14-billion) facility, rivaling an offer from a group led by billionaire Henry Sy. The conglomerate has submitted a plan to the Department of Transportation, with a provision for up to six runways in a 2,500-hectare property in Bulacan province, San Miguel President Ramon S. Ang said in a phone interview. It will be built without any guarantee or a subsidy from the government, he said. “We will finance everything, build everything by ourselves, and take the risk,” Ang said on Wednesday. The government could sell the 600-hectare property where the current Manila airport complex is located for $20 billion and have the area converted into a new business district, he said. President Duterte, who has vowed to boost infrastructure spending to a record, is also counting on private investors to upgrade

ANG: “We will finance everything, build everything by ourselves, and take the risk.”

facilities, as Manila struggles to cope with rising flight traffic and road congestion. All-Asia Resources & Reclamation Corp., a venture of Sy’s Belle Corp. and Solar Group, last October said it proposed to spend $20 billion to build an airport and seaport near a naval and air base at Sangley Point, south of Manila. A ir passengers passing through Manila will probably more than double to 140 million by 2035, from about 60 million in 2014, according to the International Air Transport Association (Iata). The present airport, with four terminals, is already handling traffic in excess of its

n japan 0.4377 n UK 62.1828 n HK 6.4336 n CHINA 7.2656 n singapore 35.1985 n australia 38.5198 n EU 52.9323 n SAUDI arabia 13.3161

Continued on A2

Source: BSP (16 February 2017 )


A2 Friday, February 17, 2017

BMReports BusinessMirror

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Govt told to fast-track EO on meat imports Continued from A1

for manufacturing processed-meat products would revert to 40 percent starting July 1 sans the extension of EO 190. “The time clock ends on June 30, that’s the default [according to EO 190]. We need an EO directing the Bureau of Customs [BOC] not to apply the 40-percent duty,” Dimagiba said during the Tariff Commission’s (TC) public hearing on Thursday. Under EO 190, the 5-percent tariff on MDM will go back to 40 percent upon the expiration of the quantitative restriction (QR) on rice on June 30. The World Trade Organization (WTO) granted the request of the Philippines to extend the QR on rice until this year. In return, Manila had to lower tariffs on offal and MDM, as well as dairy products, oil-seed meals and frozen potatoes. The government also had to increase the minimum access volume (MAV) for rice to 805,200 metric tons (MT). Rice exported to the Philippines under MAV is slapped a tariff of 35 percent, lower than the 50-percent out-MAV duty. The public hearing on tariff lines under EO 1990 was held upon the request of the Cabinet Committee on Tariff and Related Matters (CTRM), according to Tariff Commissioner Ernesto L. Albano. Albano, who presided over the public hearing, said the agency is keen on fast-

tracking the consultations and public hearing, so the TC could come up with a recommendation to the National Economic and Development Authority (Neda). However, the TC has yet to schedule the next public hearing on extending EO 190. Interested parties were given until February 24 to submit their position papers. Under Republic Act (RA) 10863, the TC will submit its findings and recommendation to the Neda within 30 days after the termination of the public hearings. After the Neda has approved and reviewed the recommendation, it will then be sent to Office of the President. “We have to be quick as possible because a new EO will have to be issued before July,” TC Chairman Marilou P. Mendoza told reporters in an interview after the public hearing.

Industry groups’ position

Industry groups that presented their position during the public hearing include the Philippine Association of Meat Processors Inc. (Pampi), United Broiler Raisers Association (Ubra), Rice Watch and Action (R1), and the Meat Importers and Traders Association (Mita). In their respective position papers, both Pampi and Mita proposed the retention of duty on four tariff lines under EO 190: chicken MDM at 5 percent, frozen turkey meat at 20 percent, turkey MDM at 5 percent and other MDM at 20 percent.

Pampi said the extension of EO 190, signed by former President Benigno S. Aquino III in 2015, will prevent increases in the price of processed meats such as hot dogs in the second half of the year. “The use of MDM in processed products has allowed us to maintain affordable protein-filled wholesome processed meats and its use is regulated by the National Meat Inspection Service since March of 2015,” Pampi Executive Director Francisco Buencamino said in the position paper submitted by his group. “The main advantage of using this ingredient is the control in product costs that make processed meats affordable to the consumers,” Buencamino added. Mita said reimposing the 40-percent tariff on MDM would hurt not only meat processors, but also consumers. “Any change in the cost structure of this product will severely impact a lot of consumers. A lot of this [MDM] goes to processed meat and not only impacts the big processors, but severely impacts small- and medium-sized processors that my members are servicing,” Mita President Jesus C. Cham said during the public hearing. Ubra has not yet submitted its position paper but the group’s president, Jose Elias Inciong, requested for a “broader consultation” on extending EO 190. “We are requesting for a broader consultation not only on tariff, but also on how

to assure the rice farmers [of safeguard measures], how to address the governance issue with customs, and also how to address the concerns of the processors,” Inciong told the BusinessMirror. He said the group would ask the government to gradually increase the tariff on chicken MDM to 10 percent to prevent technical smuggling. Ubra will submit their position paper next week.

‘Help rice farmers’

During the hearing, R1 Coordinator Hazel Tanchuling urged the government to immediately put in place measures to ensure the competitiveness of the rice sector before it talks about converting the QR on rice into a specific tariff rate. “As we looked into the 2017 budget, this is not reflected in the allocation of their programs. “The Department of Agriculture direly needs to enhance its efforts, as local rice production even decreased to only 17.6 million metric tons in 2016, from 18.9 MMT in 2014 and 18.1 MMT in 2015,” Tanchuling said. “Members of the rice sector, particularly the poor and small rice farmers demand that the government proceed with the negotiation to extend the QR on rice. The challenge lies in the government’s political will to ensure the local rice industry is competitive within two years,” she added.

Earlier, Agriculture Secretary Emmanuel F. Piñol said the CTRM is keen on extending EO 190, while the amendment of RA 8178, or the Agricultural Tariffication Act, is ongoing. “While the QR on rice is still in place and the law is not yet amended and the new tariff on rice is not yet implemented, we wish to continue the concessions we gave in exchange for the waiver [on special treatment on rice],” said Noel A. Padre, director of DA-Policy Research Service, during the public hearing. “At least we can show that we are maintaining our concessions while the domestic processes is not yet completed to remove the QR on rice, we can how them in good faith that we are doing something moving towards that direction [removal of QR on rice],” Padre added. Last month Piñol said during a Malacañang news briefing that the government has abandoned its plans to ask the WTO to extend the QR on rice due to the lack of time. Ealrier, the Neda said it is no longer possible to amend RA 8178 before June 30. Neda Assistant Secretary Mercedita A. Sombilla said the agency has already prepared a draft bill, but it has yet to be subjected to consultations. Trade experts and the Neda expressed concern that the failure to amend RA 8178 under a post-QR scenario could open the country to WTO sanctions.

Dalian trains to give MRT riders relief by March Continued from A1

Despite having received the first set of trains in early-2016, the deployment of the new coaches was deferred because all 48 light-rail vehicles had to be “optimized and tested”. “During that time, the signaling was expected to be installed immediately. But they did not anticipate changes,” Manalo explained. 

The onboard signaling system was only installed in the trains in November last year. The initial batch of trains should have been deployed in March last year. “The process of installation and testing is really long because the system is an integrator,” he noted.  “There were also issues raised by consultants and suppliers. Each train is unique; the solution for one system is not applicable to all trains.” The management, likewise, had to “test

the system for reliability and compliance, while, at the same time, training our people to be familiar to the new system”. MRT Holdings Inc. (MRTH) initially blocked the procurement of the new trains, saying it is an “unpropitious train-supply contract”. The whole expansion project, amounting to P3.8 billion, will increase the capacity of the line to 880,000 daily passengers, or 66 percent more than the current capacity

of 350,000 commuters per day. Currently, the train line is working at half its capacity. There are about 19 train sets operating at the MRT. This means that of the 73 light-rail vehicles that the train line has on its depot, only 57 tra in cars ply t he Nor t h Edsa-Taf t Avenue train route. Robert John L. Sobrepeña, who chairs MRTH, said that, while his group welcomes this development, the government

must ensure that all tests have been done properly and completely. “If they get it to run safely—that it’s complete and safe—then that’s good news,” he told the BusinessMirror.  With this development, Manalo said commuters, like de Castro, can expect relief from jam-packed train rides and stressful commute.  “I just hope this will not be temporary, and be sustainable for a change,” de Castro said. 

Ang offers $14-B airport in battle of Phl tycoons Continued from A1

capacity of 31 million fliers a year, according to Iata.

Tourism industry

A bigger airport will help the nation’s travel and tourism industry, which accounted for 6.1 percent of the economy in 2016, up from 4.2 percent the previous year, according to data from the World Travel & Tourism Council. The government also plans to double the capacity of an airport at a former US military base north of Manila. San Miguel, the Philippines’s largest company, plans to initially build four runways with a length of 3.5 kilometers and width of 600 meters that can serve 100 million passengers annually. Eventually, the project can be expanded to six runways and service 150 million passengers, according to the proposal. Shares of San Miguel rose 1.5 percent to P106.40 as of 11:47 a.m. in Manila on Thursday, set for highest close since May 2013. The airport proposal in Bulacan, which Transport Undersecretary Roberto Lim on Wednesday said is being reviewed, will also link with San Miguel’s elevated rail project and will complement the airport in the former Clark military airbase. T his is the second air port offer from San Miguel, which submitted a $10-billion plan to build an airport off Manila Bay in 2014. Bloomberg News


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The Nation BusinessMirror

NTC backs legislator’s drive against text scams

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HE National Telecommunications Commission (NTC) is supporting a congressman’s campaign against text scams. Telecommunications Commissioner Gamaliel A. Cordoba lauded the hard stance against fraudulent text messages, which threaten the security and safety of the public, of Liberal Party Rep. Romero S. Quimbo of Marikina City. Recently, Quimbo requested the NTC to help him stop the dissemination of a text message fraudulently using his name and the Tzu Chi Foundation. The text scam advises the recipient that he allegedly won a cash prize in a raffle. Quimbo also urged the NTC to come up with tougher policies, stronger regulatory environment and wider information campaign on text scams. “We looked into the request of Congressman Quimbo, and we agree

that these scams potentially harm the receiver. These text scams do not only deceive, they also damage the name of publicly known figures and organizations when the message particularly indicates a personality to lend credibility to its claim,” Cordoba said. In 2016 the NTC received 433 complaints on text scams. This figure does not include the unreported cases of this scheme, since the victims are often unaware of the recourse available to them. “We have around 110 million prepaid subscribers alone. As these fraudulent acts persist, more people will possibly be victimized, hence we need to identify the perpetrators of these scams. We encourage the public to be vigilant and to report the text scams to the NTC so we can take proper action,” Cordoba said.

‘Do not amend law on children’

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overnment agencies, nongovernmental organizations and child rights advocates are urging Congress not to lower the children’s minimum age of criminal responsibility (MACR), saying that law enforcement should focus on cracking down on syndicate groups and parents who exploit children to commit crimes. Sen. Anna Theresia HontiverosBaraquel and Party-list Rep. Tom Villarin of Akbayan both said lowering the MACR violates a child’s right to life, health, safety and development. Instead, they called

for the full implementation of the comprehensive Juvenile Justice and Welfare law of 2006. Hontiveros reminded her fellow legislators that “lowering the MACR is already the death sentence for children; first, because subjecting them in the criminal justice system can possibly put them on the death row along with hardened criminals; and, if released, the longlasting effects to them socially in the communities. They will only be stigmatized as criminals, and even trigger repeat offense.”

Editor: Dionisio L. Pelayo • Friday, February 17, 2017 A3

Robredo fails to stop PET from hearing Marcos protest

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By Joel R. San Juan

@jrsanjuan1573

ICE President Maria Leonor G. Robredo failed to stop the Supreme Court (SC), sitting as the Presidential Electoral Tribunal (PET), from hearing and resolving the election protest of former Sen. Ferdinand R. Marcos Jr. In an eight-page resolution dated January 30, but released only on Thursday, the PET found sufficient in form and substance Marcos’s election protest and denied Robredo’s motion to dismiss the case on the ground of lack of jurisdiction. “Verily, the Tribunal affirms its jurisdiction over the instant protest, which is sufficient in form and substance. The protestee’s [Robredo’s] prayer to dismiss the protest for lack of jurisdiction and for being insufficient in form and substance is denied,” it added. The PET noted that Marcos’s protest contained narrations of ultimate facts on the alleged irregularities and anomalies in the contested clustered precincts, which the protestant

needs to prove in due time. Contrary to Robredo’s claim, the PET said they have jurisdiction to act on the electoral protest as mandated by the 1987 Constitution. “Section IV, Article VII of the 1987 Constitution in relation to Rule 13 of the 2010 PET Rules provides that the Tribunal shall be the sole judge of all contests relating to the election, returns and qualifications of the President and Vice President. The phrase ‘election, election returns and qualifications’ refers to all matters affecting the validity of the contestee’s title, which includes questions on the validity, authenticity and correctness of the certificates of canvass [COCs]’,” the PET said. At the same time, it stressed that,

while they found the protest sufficient in form and substance, the veracity of Marcos’s allegations against Robredo has yet to be proven. In her verified answer to Marcos’s protest, Robredo argued that the PET has no jurisdiction over the election protest, because it improperly questions the authenticity and due execution of the COCs, and that it should have been raised in a preproclamation case before Congress acting as the National Board of Canvassers. Marcos, through his lawyer and Spokesman Victor Rodriguez, immediately welcomed the PET resolution. “We are hoping that with this resolution, there will be an end to all these delays, and we can finally move forward. There is a need to ferret out the truth as to what really transpired during the vice-presidential race last May,” Rodriguez said. “We just want the truth to come out. It’s that simple,” Rodriguez said. In his election protest, Marcos sought the nullification of the proclamation of Robredo as duly elected vice president of the country, as this was a result of massive electoral frauds committed to ensure her victory. Marcos is specifically contesting the election results in 39,221 clustered precincts in 25 provinces and five highly urbanized cities all over

the country. The former senator pointed out that, through a series of electoral frauds, anomalies and irregularities, people behind the whole operation made sure that Robredo would win and that his votes would be reduced. Marcos explained his petition has three parts—the first is the “flawed” automated election system; the second consists of the more “traditional” modes of cheating, like vote buying, preshading, intimidation and failure of elections, among others; and the third focuses on the unauthorized introduction by Smartmatic’s Marlon Garcia of a new hash code (or a new script program) into the transparency server, as well as the effects brought about by the unauthorized change. The case has reportedly been raffled off to Associate Justice Alfredo Benjamin Caguioa, last appointee of former President Benigno S. Aquino III to the SC. Caguioa is tasked to study the protest and submit recommendations for actions of the PET. Marcos earlier said he decided to file the electoral protest owing to the series of frauds, anomalies and irregularities that marred the May 9 elections, and that such activities made sure he would lose to Robredo, the vice-presidential candidate of the administration’s Liberal Party.


Economy BusinessMirror

A4 Friday, February 17, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

news@businessmirror.com.ph

Malampaya resumes natural-gas delivery

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By Lenie Lectura

@llectura

he 20-day maintenance shutdown of the Malampaya natural-gas facility in Palawan concluded on Thursday, and had resumed providing gas to the gas plants that provide an aggregate capacity of more than 3,000 megawatts (MW) in Luzon.

In a n upd ate prov ided by Shell Philippines Exploration BV (SPEX) to the Department of Energy Undersecretar y Felix William B. Fuentebella, “All major maintenance and engineering works are completed.” Moreover, “systems are being started up already”. “Malampaya natural gas is pressurized and already flowing between offshore platform and

₧2.4B Meralco’s estimated incremental fuel cost over the period of Malampaya’s 20-day outage

onshore gas plant. Flaring already commenced at both facilities,” a text message from Fuentebella read, adding, “manpower at offshore platform back to normal operational levels.” As of late Wednesday, SPEX is coordinating closely with Santa Rita, San Lorenzo and Ilijan power plants for specific time to resume natural-gas delivery. The gas facility fuels the following gas plants: the 1,000MW Santa Rita, the 500-MW San Lorenzo, the 1,200-MW Ilijan and the 97-MW Avion plant. These power plants supply an aggregate capacity of 3,211 MW to the Luzon grid, 2,565 MW of which is supplied to the Manila Electric Co. (Meralco) franchise area. The maintenance activities, which started from January 28 to February 16, include repair of the sub-sea facilities, upgrades on the platform and maintenance on the onshore plant. During a public hearing on Joint Congressional Power Commission (JCPC) at the Senate,

Fuentebella said the Malampaya gas facility started delivering gas at 7 a.m. on Thursday. “This is the latest we got from Shell. It is able to deliver natural gas to the plants. This means the gas plants are now utilizing gas from diesel. So, there’s efficient supply,” the Department of Energy official said. There was no power-supply outage dur ing the schedu led maintenance because of adequate supply. Fuentebella explained the effectiveness of the demand side management, which is aimed at the electric utilities’ activities designed to encourage and inf luence their customers’ use of electricity in ways that will produce desired changes to both the timing and level of electricity demand or load shapes. “The demand side management helped. Also, the low demand was because of the cold weather,” Fuentebella added. These plants utilized alternative fuel to continue operation and generate electricity during

the maintenance period. However, this is more expensive than natural gas. Natural-gas as fuel only costs around P4 per kilowatthour while replacement fuel, such as diesel, costs around P6 to P8 per kWh. Meralco said the estimated incremental fuel cost over the period of the 20-day outage would amount to P2.4 billion. It has a pending application before the Energy Regulatory Commission to collect from its customers an additional P0.30 per kWh in generation charge for three months starting next month, brought about by the expensive fuel utilized by the gas plants during the 20-day shutdown of the Malampaya naturalgas facility. In all, Meralco seeks to collect a total of P0.9174 per kWh. “The incremental fuel costs due to the use of liquid fuel is expected to increase the overall rate of Meralco for the March 2017 billing by about P0.9174 per kWh,” it said in its eight-page application.

‘No need to amend Epira’

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ixteen years since the Electric Power Industry Reform Act of 2001 (Epira) was enacted into law, the Department of Energy (DOE) strongly believes that the law does not need to be amended. “After 16 years, the power generation is now in the majority hands of the private sector. Supply has improved. Price has gone down, WESM [Wholesale Electricity Spot Market] is running at P2 per kilowatt hour [kWh]. There are more players, so the price of electricity is becoming more competitive. In general, the goal is being achieved, but there are some delays,” Energy Secretary Alfonso G. Cusi said during Thursday’s Senate Committee on Energy-First Public Hearing on Joint Congressional Power Commission (JCPC). The delay Cusi was referring to is the implementation of the retail competition and open access (RCOA) and the independent market operator (IMO). “The segments of Epira that are not yet implemented are IMO and RCOA. We are already rushing the IMO. We are waiting for the result of an audit until February 28,” Cusi said. Under Epira, the Philippine Electricity Market Corp. (PEMC), operator of WESM, must be transformed into an IMO one year after WESM was launched in June 2006. So far, PEMC has existed for 11 years now. The transfer of WESM to the IMO is also meant to dispel concerns of continuing government intervention at WESM. Cusi said his office awaits the results of a WESM audit being conducted by the DOE. “The audit is currently being undertaken. We have to wait for the February 28 report,” he said, adding there are issues in the composition of the IMO board. “Pinag-aaralan ko pa talaga. I am not set on anything. Within the year, hopefully,” said Cusi, when asked how long will it take these issues to be resolved. Currently, the PEMC board is a 15-man body made up of representatives from each sector of the electric power industry, as well as independent members.

The PEMC board is chaired by the DOE secretary until the transition to the IMO. Based on a draft DOE circular, the composition of the seven-member IMO board includes an economist, academic, finance person, lawyer, engineer, governance member and the president of the IMO. For RCOA, there was a slight delay in its implementation. “We are targeting this year the completion of RCOA,” Cusi said. Under RCOA, which will be enforced in phases, consumers are allowed to choose their supplier of electricity to encourage competition in the generation and supply sector. The implementation of mandatory migration for contestable customers (CCs) with 1 megawatt (MW) and up average peak demand is on February 26. Mandatory contestability for CCs with 750-kilowatt (kW) to 999-kW average peak demand remains to be effective on June 26. The rules also state that the lowering of the threshold to cover an end-user with an average monthly peak demand of at least 500 kW is set on June 26, 2018, subject to the review of the performance of the retail market by the ERC. Energy Undersecretary Felix William Fuentebella said Epira only needs to be reviewed, and not amended. “We are all looking at the effective implementation of Epira. Some of the segments under Epira are delayed, but these are now being scheduled. We have identified the causes of delay. We have also filed our proposed EO [executive order] that will declare energy-related facilities as projects of national significance,” Fuentebella said. The DOE formally proposed to Malacañang the issuance of the EO about two weeks ago. Cusi stressed the importance to fast-track the implementation of power projects, which normally takes five years for a power plant to be put up. “Permitting takes a lot of time. So, we asked that an EO be issued to declare power projects, not just power plants, as national significance,” Cusi said. Lenie Lectura

briefs china offers emergency aid to quake-hit philippines

BEIJING—The Chinese government will offer $1 million of emergency humanitarian aid to quake-hit Philippines, an official news statement said late Wednesday. China hopes the assistance will help relief work after an earthquake struck a southern Philippines province last week, according to an online Ministry of Commerce statement. A 6.7-magnitude earthquake hit Surigao City last Friday night, killing at least seven and injuring more than 100. Infrastructure facilities, including airport and roads, were damaged during the quake. China’s Foreign Ministry Spokesman Geng Shuang said Tuesday the Red Cross Society of China would offer $50,000 to the Philippines for relief work, adding that the Foreign Minister Wang Yi had conveyed sympathy to his counterpart in the Philippines. “China believes that the Philippines will overcome [its] difficulties and recover from the earthquake at an early date,” the spokesman said. PNA

foreign chambers back use of e-receipts, e-invoice

OFW support

Sen. Cynthia A. Villar distributes sari-sari store packages to seven overseas Filipino workers (OFWs) who were recently repatriated to the country. Villar, an OFW supporter and protector, expressed hope the livelihood packages would help the workers and their families get back on their feet and recover from the trauma caused by abuses that they experienced while working abroad. ROY DOMINGO

THE Joint Foreign Chambers of the Philippines (JFC) has expressed support to the use of e-invoice and e-receipt between registered businesses and their customers as part of the administration’s proposed comprehensive tax-reform package. In a position paper submitted to the House Committee on Ways and Means, the JFC said the maximum use of digital technology in the conduct of business could reduce red tape and help ease traffic congestion. “We strongly support using digital technology to the maximum extent in the conduct of business both between registered businesses and their customers and with the BIR [Bureau of Internal Revenue],” it said. Under House Bill 4774, authored by committee chairman and Quirino Rep. Dakila Cua, electronically generated value-added tax invoices and receipts shall be recognized for input tax purposes. PNA

Alvarez pushes for ERC abolition By Jovee Marie N. dela Cruz @joveemarie

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he Speaker of the House of Representatives has recently filed a measure seeking to abolish the Energy Regulatory Commission (ERC). Speaker Pantaleon D. Alvarez filed House Bill 5020 amid ongoing probe on alleged irregularities and corruption in the commission. Under the bill, the Board of Energy, which shall be an attached agency of the Department of Energy (DOE), will be created replacing the ERC. Under Section 48 of Republic Act 9136, or the Epira, the ERC is tasked to promote competition; encourage market development; ensure customer choice; and penalize abuse of market power in the electric industry. Moreover, the measure said the Board of Energy shall perform the functions of the ERC.

It added the board shall be under the supervision and control of the DOE, and shall be composed of a chairman and two members to be appointed by the President upon the recommendation of the secretary of the DOE. To ensure that there will be no conflict of interests, the bill prohibits the chairman and members of the board or any of their relatives within the fourth civil degree, consanguinity or affinity, legitimate or common law, from holding any interest whatsoever in any company or entity engaged in the energy business. If they have involvement in the energy business, they are required to divest all their interests in the energy sector upon assumption of office, the measure said. The bill also prohibits the appointment to the board of any person who has worked within three years immediately prior to the appointment, or is working in any private firm engaged

in the petroleum or electric industry or any other entity whose main business is related to or connected with any such firm. During the transition period, the ERC and its existing personnel shall continue to exercise their powers and functions. In the filling of positions under the new board, preference shall be given to the personnel of the ERC. In filing the bill, Alvarez cited reports on the suicide of ERC Director Francisco Jose Villa Jr., who left letters alleging shady deals and irregular practices in the ERC. “The suspicions raised against the integrity of the ERC, which is primarily entrusted with regulating the country’s electric industry and promoting competition in the market, cannot be ignored,” Alvarez said. “This will ensure that the newly created board shall be explicitly within the regulatory arm of the government and, specifically, within the direct control and supervision of

the President,” Alvarez said. He added that, while the ERC is tasked to regulate the country’s electricity industry and promote competition in the electricity market, continuous price hikes raised suspicions of collusion and corruption in the commission. Alvarez said such suspicions were bolstered by Villa’s suicide. “In his suicide note, Villa claimed that his superiors exerted pressure upon his person to approve contracts that disregard the proper regulatory procedures,” he said. Earlier, Alvarez also filed House Resolution 776 urging the House of Representatives to direct the Committee on Energy to conduct the investigation in aid of legislation on alleged corruption in ERC. Also, President Duterte has demanded the resignation of all officials of the ERC following the suicide of Villa amid allegations of corruption in the agency.

House panel OKs Salceda’s ‘science for change’ measure T he House Committee on Science and Technology has approved House Bill (HB) 4581, filed by Albay Rep. Joey S. Salceda, which aims to boost the country’s scientific innovations and inventions, research and development (R&D) toward social progress and

global competitiveness. Titled Science for Change Program (S4CP) Act, with the theme of “Science for the People,” and a budget that could reach P672 billion by 2022, HB 4581 is designed to help accelerate science, technology and innovation developments

and enable the country to keep up with current global technology and innovation trends. S4CP was launched by the House Committee on Science and Technology, chaired by Bohol Rep. Erico Aristotle Aumentado. When enacted, it will be implemented by the De-

partment of Science and Technology (DOST). It was hailed by legislators as a key toward higher standards of STI and global competitiveness. The total R&D budget for 2017 is P5.8 billion. The bill proposes an estimated R&D budget, which starts at P21 billion next year, more or less

doubling yearly over the next fiveyear period, and could reach P672 billion in 2022. Salceda said it is his privilege to push legislation for the country’s strong science and technology program, one of the vital components for growth under the Duterte ad-

ministration. S4CP focuses on four core concerns: 1) Program Expansion, 2) New Programs, 3) S&T Human Resource Development and 4) Accelerated R&D Program for Capacity Building of Research and Development Institutions and Industrial Competitiveness. PNA


Agriculture/Commodities BusinessMirror

news@businessmirror.com.ph

Editor: Jennifer A. Ng • Friday, February 17, 2017

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Palawan to expand rice-plantation areas–DA By Jasper Emmanuel Y. Arcalas

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@jearcalas

he local government has pledged to expand rice-plantation areas in the province by 100,000 hectares to boost the Department of Agriculture’s (DA) bid to achieve rice self-sufficiency by 2021. Agriculture Secretary Emmanuel F. Piñol said Palawan Gov. Jose Alvarez made this pronouncement to him when he visited the province recently. Piñol added that the new riceplantation areas are on top of the island-province’s 59,000 hectares of rice farms that have enabled Palawan to achieve 110-percent rice self-sufficiency. “As traditional rice-farming areas are now affected by climate change, the availability of new rice-farming areas in Palawan offers a relief to the problem besetting the country’s rice production,” he said in a statement. Piñol noted that the province of Palawan lies outside of the typhoon path in the Western part of the country and could be developed

into a major food-production area. He said the DA would provide solar-powered irrigation in the new rice plantations, which could increase Palawan’s output by 800,000 metric tons (MT). While Palawan needs more irrigation facilities, Alvarez told Piñol during their meeting that these should not destroy the natural beauty of the province, which is a popular tourism destination. Instead of building water-impounding dams, the DA would introduce to Palawan the solar-powered irrigation systems (SPIS), which will draw water from the rivers. Piñol said he has instructed the DA’s regional director in Palawan to program the construction of the SPIS without having to build dams.

A farmer in Palawan cultivates his rice farm with the help of his carabao. File Photo

He noted that the governor also sought the assistance of the DA to help address Palawan’s highly acidic soil that has kept its rice production relatively low. “I called up Philippine Rice Research Institute [PhilRice] Ex-

ecutive Director Sailila Abdulla to form a team, along with the Bureau of Soils and Water Management, to conduct an extensive soil analysis in Palawan,” he said. Piñol said he has also ordered the procurement of more tractors,

power tillers, harvesters, dryers and rice-processing facilities for Palawan after noticing on his way to Brooke’s Point for the Biyaheng Bukid that farmers and fishermen “lack modern farm equipment”. “A check of a rice farm I passed

by along the way showed that the farmers are still using poor-quality seeds,” he said. Piñol added that he would encourage farmers to use hybrid seeds by providing them fertilizers as incentives.

Agri firms receive ₧3.2B in tax exemptions, perks 20 PHL firms net By Cai U. Ordinario @cuo_bm

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etro Manila-based agriculture firms received all the subsidies extended by the government to the sector in 2014, according to latest report from the Philippine Statistics Authority (PSA). In the preliminary data from the 2014 Annual Survey of Philippine Business and Industry (ASPBI), the PSA said Filipino taxpayers extended P3.2 billion worth of tax exemptions and other perks to agriculture firms in 2014. The subsidies to the sector in 2014 declined by 49.2 percent, from the P6.3 billion recorded in 2013. “Establishments engaged in support activities to agriculture and postharvest-crop activities located in NCR were

the only recipient of subsidies in 2014,” the PSA said. The survey covered agriculture, forestry and fishing for establishments with Total Employment (TE) of 20 and over. Subsidies are special grants extended by the government in the form of financial assistance or tax exemption or tax privilege to aid and develop an industry. Despite the subsidies, the bulk of the total value of output of the sector came from Mindanao in 2014. The total value of output generated by agriculture, forestry and fishing establishments with TE of 20 and over reached P137.9 billion in 2014. Davao region generated the highest value of output, with P36.6 billion, or 26.5 percent of the total.

This was followed by Northern Mindanao and Soccsksargen with respective shares of 18.8 percent, or P25.9 billion, and 17.1 percent, or P23.6 billion. “The top 3 regions in terms of value of output are all located in Mindanao, with a combined value of output of 62.4 percent of the total,” the PSA said. In 2014 there were a total of 1,160 agriculture, forestry and fishing establishments with TE of 20 and over. Among the industries, animal production led the sector with 365 establishments, accounting for 31.5 percent of the total figure. This was followed by the growing of nonperennial and perennial crops with 308 establishments, or 26.6 percent of the total, and 206 establishments, or 17.8 percent, respectively. At the regional level, Western Visayas

recorded the highest number of establishments at 268, or 23.1 percent, of the total. Davao region followed with 174 establishments, or 15 percent. Other regions with more than a hundred number of establishments are Central Luzon, with 131 establishments, or 11.3 percent; Northern Mindanao, 129 establishments, or 11.1 percent; and Calabarzon, 119 establishments, or 10.3 percent. Data collected from the survey provide information on the levels, structure, performance and trends of economic activities of the formal sector in the entire country for the year 2014. The survey was conducted nationwide in April 2015 with the year 2014 as the reference period of data, except for employment, which is as of November 15, 2014.

Bayer, Syngenta clash with EU over bees amid M&A charm offensive

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ayer AG and Syngenta AG, two of the agrichemical giants trying to win the European Commission’s blessing for deals reshaping the global industry, clashed with the European Union (EU) over bans on insecticides that regulators blame for killing honeybees. The EU action not only damages farmers, the agricultural industry and the environment, but throws companies into legal uncertainty, Bayer said on the first day of hearings at the EU’s General Court in Luxembourg. BASF SE is also lining up to attack 2013 bans of previously approved pesticides, based on new studies the EU said showed “unacceptable” risks to Europe’s bee population. “The commission is asking you to give it unlimited powers to withdraw existing approvals as and when it pleases,” Kristina Nordlander, a lawyer representing Bayer, told a five-judge panel on Wednesday. The EU decision was a “disproportionate and intolerable interference” with its rights, according to Bayer. Bee deaths reached alarming levels over a decade ago, when scientists identified Colony Collapse Disorder, a syndrome without a known cause, in which disoriented bees fail to find their way back to their hives and die. Bee welfare has triggered a wave of protests from environmental campaigners at EU level. The legal fight comes as EU competition watchdogs are poring over the potential threat to innovation as they weigh a trio of megadeals in the industry that have also triggered protests from Green groups.

Bloomberg

Trio of deals

Officials have opened in-depth probes into China National Chemical Corp.’s agreement to buy Syngenta and DuPont Co.’s $74-billion tie-up with Dow Chemical Co. Bayer’s agreement to buy Monsanto Co. is also certain to fall under the EU’s remit once it’s formally notified to the Brussels authority. The EU restrictions forced farmers to revert to older, “potentially more harmful chemicals that are sprayed on the fields”, but the commission made no assessment of what would happen after its decision, Nordlander said. “Most insecticides on the market will harm bees” but are considered safe by the commission, while neonicotinoids

are “the most modern technology to minimize exposure to bees”. The EU from December 2013 imposed limits on the use of three so-called neonicotinoids—clothianidin, imidacloprid and thiametoxam—saying they were “harmful” to Europe’s honeybee population, when used to treat bee-attractive plants and cereals. Studies at the time suggested exposure to neonicotinoids at sublethal doses can harm bee health and bee colonies, the European Food Safety Authority said in a report that formed the basis of the EU decision. More study is needed to fill in data gaps, the authority said at the time. T he comm ission sa id its f indings showed that neonicotinoids, or

neonics, are “systemic”, causing the entire plant to become toxic to bees and with this “very disturbing scientific information, it was not possible to postpone the decision by several years”, said Petr Ondrusek, a lawyer for the Brussels-based commission. Leverkusen, Germany-based Bayer, the world’s biggest maker of neonics, has previously warned that the increased presence of varroa, which predates the introduction of its chemicals, is the biggest factor behind the increased losses. “There is no evidence” despite “over 20 years of intense study that neonicotinoids have any link to colony honeybee losses,” Nordlander said. Syngenta, which will plead in court on Thursday, is arguing that the EU imposed the restrictions after “an unreasonable mandate given to EFSA, a rushed procedure that failed to allow proper input from stakeholders, failed to take relevant science into account and without any impact assessment”. T he commission “responded to a‘weight of noise’ instead of t he ‘weight of evidence’, which clearly shows that in reality neonicotinoids pose a minimal threat to bee health compared with a lack of food, diseases and cold weather—a view shared by respected regulators around the world ,” Ba se l , Sw it zerl a nd-ba sed Syngenta, said in a statement. Ludw igsh a fen, Ger m a ny-ba sed BASF will face the EU judges on Friday to challenge a separate EU ban in 2013 of its insecticide fipronil. Bloomberg News

$48.7 million in export deals in US food fair

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wenty local companies secured a total of $48.73-million negotiated sales from 463 inquiries from trade buyers during the 42nd Winter Fancy Food Show (WFFS) held in the United State last month. According to the Center for International Trade Expositions and Missions (Citem), the figure is higher than its sales target of $47 million and the highest recorded by the Philippine delegation in its four years of participation in the WFFS. The WFFS, whch was held from January 22 to 24 in San Franciso, is considered the West Coast’s largest specialty food and beverage event with an estimated 20,000 visitors and 1,500 exhibitors from the US and 28 other countries. Citem said among the country’s best-selling items are premium rice and tuna. Recently introduced in the WFFS, Citem said Philippine corn snacks also garnered “positive reception”. Other top Philippine products sold under the FoodPHILIPPINES products brand include banana chips, nuts, coconut products and other tropical fruits. In the 2016 WFFS, the FoodPHILIPPINES pavilion reported a total of 540 buyer inquiries and negotiated sales worth $44 million from 17 local companies. “As evidenced in its record-breaking sales during the recent WFFS, FoodPHILIPPINES is riding on the momentum as Philippine food is named as one of 2017’s hottest global food trends,” Citem Executive Director Rosvi Gaetos said in a statement. Citem said Food Network had predicted that the “pungent, pucker synthesis of East, Spanish and Pacific flavors” evident in Philippine food will bring “new surprises” this year. The attached agency of the Department of Trade and Industry (DTI) said Bloomberg had also hailed Filipino food as one of the hottest trends this year. In the US alone Citem said many Philippine restaurants are gaining traction, such as Bad Saint in Washington, D.C., and egg-sandwich chain Eggslut. The US is one of the largest foreign investors in the Philippines and the country’s third-largest trading partner. The Philippines has been among the largest beneficiaries of the US Generalized System of Preferences program for developing countries, which provides referential duty-free access to the US market. The DTI said earlier it will pursue free-trade agreement options with the US in light of the Trump administration’s preference for bilateral agreements instead of regional trading groupings. Citem said it will also bring FoodPHILIPPINES to some of the world’s largest food fairs this year, including Gulfood in the United Arab Emirates and Foodex in Japan.


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The World BusinessMirror

Friday, February 17, 2017

www.businessmirror.com.ph • Editor: Lyn Resurreccion

Kim Jong Nam, the hunted heir to a dictator

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U.S. President Donald J. Trump at a meeting with retail chain executives Bloomberg

Trump tells retail execs tax overhaul plan coming soon

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resident Donald J. Trump told executives at major retail chains that he would swiftly submit a tax-overhaul plan to stimulate the economy.

Trump called rewriting the tax code “one of the best opportunities to really impact our economy” during a White House breakfast on Wednesday with chief executive officers of companies, such as Target Corp., J.C. Penney Co. and Gap Inc., who came to Washington to discuss their opposition to a House Republican plan to tax US businesses’ domestic income and their imports while exempting their exports. The president said he would be releasing a proposal in the “not-so-distant future”. The retailers have argued that the border-adjusted levy will raise prices for US consumers. The CEOs planned to meet with members of Congress later on Wednesday to deliver the same message. Trump didn’t address concerns about border adjustments during a brief photo session at the start of the meeting. Instead, he praised the CEOs as “great retailers” that “I’ve read about on the covers of business magazines”.

20% The rate of tax on imported goods sold domestically that would replace the current 35-percent corporate income tax

He s a id t he ret a i l i ndu st r y is “ver y impor tant to t he count r y ” a nd suppor t s “m i l l ion s a nd m i l l ion s of jobs”.

Retail struggles

“We had a positive and productive conversation with President Trump about the important role the retail industry plays in our national economy,” the Retail Industry Leaders Association, which is overseeing the effort to derail

the proposal, said in a statement. “We stressed the importance of taking a thoughtful approach to tax reform for both individuals and corporations.” Trump had initially called the border tax “too complicated”, before aides have more recently said he was warming to it. It’s still unclear whether he will endorse a border levy in his tax plan. The proposed overhaul of the corporate tax code would reward companies that sell products outside the US, while punishing ones that rely on low-cost overseas suppliers—though its supporters say the tax would also lead to a stronger dollar, evening out those effects. The tax would be assessed at a 20-percent rate on imported goods sold domestically and would replace the current 35-percent corporate income tax.

Domestic manufacturing

The issue has pitted corporate giants against one another, with retailers and other net importers on one side and exporters on the other. For companies on both sides, there are billions of dollars at stake. Supporters say the 20-percent border-adjusted tax would encourage domestic production. But opponents complain that it would just force companies to pass the increases to consumers—potentially boosting prices for everything from food and clothing

to gasoline and auto parts—without spurring a revival of domestic manufacturing. The potential changes come at a time when apparel chains and other brick-and-mortar retailers are struggling: About 5,000 stores have been shuttered in the past 18 months, according to Clarion Par tners. Depar tment stores such as Sears Holdings Corp. and Macy’s Inc. have been particularly hard-hit by consumers shifting their spending online. The retail executives meeting with Trump included Brian Cornell, chairman and CEO of Target; Marvin Ellison, chairman and CEO of J.C. Penney; Hubert Joly, chairman and CEO of Best Buy Co.; and Art Peck, CEO of Gap. Other retail executives at the W hite House session included Bill Rhodes, chairman and CEO of AutoZone Inc.; Stefano Pessina, CEO of Walgreen Boots A lliance Inc.; Greg Sandfort, CEO of Tractor Supply Co.; and Jill Soltau, president and CEO of Jo-Ann Fabric and Craft Stores. “The group had a positive and substantive discussion about policies that would promote economic growth and job creation,” Target Spokesman Katie Boylan said in an e-mail. “Target looks forward to continuing the dialogue with the administration and congressional members on this issue.” Bloomberg News

Seoul court begins to deliberate Samsung chief’s arrest

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EOU L , S out h K ore a — A South Korean court began deliberating on Thursday whether to issue an arrest warrant for a Samsung heir in connection to a massive corruption scandal that led to the impeachment of the country’s president. Sa m su ng Elec t ron ic s V ice Chairman Lee Jae-yong walked into the Seoul Central District Court without speaking to the pack of reporters. Lee and other Samsung top executives have been questioned over the past several weeks by prosecutors investigating the influencepeddling scandal that engulfed President Park Geun-hye. Park, whose power was suspended in December by the parliament, is waiting for a decision by the country’s Constitutional

Court on whether to permanently remove her from the presidential seat. The prosecutors are seeking permission for the second time to arrest the 48-year-old billionaire heir to Samsung. They accuse him of giving bribes worth $36 million to President Park and her longtime friend in order to win government favors for a smooth company leadership transition. The prosecutors are also investigating Lee on allegations of embezzlement, hiding assets overseas and lying under oath during a parliamentary hearing. Samsung has denied that it has offered bribes or sought any wrongful favors to the president. If the court approves the arrest warrant, the prosecutors will be able to take him into the custody for up to 21 days before they for-

mally press charges. The approval would also help bring bribery charges against President Park. If the court dismisses the arrest warrant, it will deal another blow to the prosecutors who have until February 28 to investigate the scandal, unless the parliament extends the deadline. The court rejected a first attempt to arrest Lee last month, citing a lack of evidence. Lee Kyu-chul, a spokesman for the special prosecution office probing the scandal, said t he invest igators h ave since strengthened their case w ith additional evidence. That includes evidence that President Park and Choi Soonsil, her long-time friend who has been jailed for the misuse of power and other charges, spoke

several hundred times using mobile phones subscribed under a third party’s name. One reason the cour t dismissed the ar rest request in January was that prosecutors had not questioned Park, who was named an accomplice in the bribery case. The president and prosecutors have still not agreed on a schedule to question her, but the telephone records for Park and Choi could give weight to the prosecutors’ argument. Samsung was the biggest donor among South Korean companies that donated a total of nearly $70 million to two non-profit foundations controlled by Choi. Samsung also funded a huge amount of money to Choi’s company in Germany that financed equestrian training of Choi’s daughter. AP

EOUL, South Korea—When North Korea held a state funeral for its leader, Kim Jong Il, in 2011, one son was conspicuously absent. The absence of Kim Jong Nam—the eldest son of the family, who was bound by Korean tradition to preside over the funeral— was all the evidence outside analysts needed to see how isolated he had become from the center of power in North Korea, the world’s most secretive regime. Never fully accepted by his family, sidelined by his powerful stepmother and haunted by fears of assassins, Kim Jong Nam lived much of his life wandering abroad, in Moscow, Geneva, Beijing, Paris and Macau, the Chinese gambling enclave. On Monday Kim, 45, met his end at Kuala Lumpur International Airport in Malaysia. According to the National Intelligence Service of South Korea, he was poisoned by two women who appeared to be carrying out an assassination order from Pyongyang, the North Korean capital. Kim died on his way to the hospital. Two women have been detained in connection with the killing. It remains uncertain if Kim was traveling alone or if bodyguards were present. It was also unclear how many people were involved in the attack and whether airport cameras captured the episode. Grainy footage released on Wednesday showed a woman suspected of being one of the assassins, who appeared to be of Asian descent and wore a shirt emblazoned with “LOL” in large letters, before she fled the airport. The Royal Malaysia Police announced late on Wednesday afternoon that they had arrested a woman about 8:20 a.m. and that she had been carrying a Vietnamese passport in Terminal 2, where the attack occurred. They said she was “positively identified” from closed-circuit video and was alone at the time of her arrest. She was identified as Doan Thin Hoang, 28, according to the inspector general of the police, Khalid Abu Bakar. On Thursday the Malaysian police said they had detained a second suspect, a woman with an Indonesian passport. A police official told the Bernama News Agency that more arrests were expected. The authorities also said that an autopsy on Kim had been completed. There were no markers or police tape at Terminal 2 on Wednesday to indicate that a crime had been committed. Airport workers said they had been ordered not to discuss the case. South Korea’s acting president, Hwang Kyo-ahn, said on Wednesday his government was working with Malaysian authorities to find the assailants. But officials in Seoul quickly pointed fingers at Kim’s half brother, the North Korean leader Kim Jong Un, who has ordered the execution of a number of senior officials, including his own uncle, who have been deemed a potential challenge to his authority. Ever since Kim Jong Un succeeded his father in 2011, “there has been a standing order” to assassinate his half brother, Lee Byung-ho, the director of the South’s National Intelligence Service, said during a closed-door briefing at the National Assembly, according to lawmakers who attended it. “This is not a calculated action to remove Kim Jong Nam because he was a challenge to power per se, but rather reflected Kim Jong Un’s paranoia,” Lee was quoted as saying. Kim Jong Un wanted his half brother killed, Lee said, and there was an assassination attempt against him in 2012. Kim Jong Nam was so afraid of assassins that he begged for his life in a letter to his half brother in 2012. “Please withdraw the order to punish me and my family,” Kim Jong Nam was quoted as saying in the letter. “We have nowhere to hide. The only way to escape is to choose suicide.” Lee said Kim Jong Nam had no power base inside North Korea, where Kim Jong Un had swiftly established his monolithic rule with what the South called a reign of terror. Kim Jong Nam had arrived in Malaysia last week, Lee said. He was in line at the airport to check in for a flight to Macau on Monday morning when he was attacked by the two women, Lee said, citing security camera footage from the airport. The women fled the airport in a taxi but were still believed to be in Malaysia, Lee said. If North Korea’s involvement is proved, Washington could face intense pressure to put the country back on its list of nations that sponsor terrorism, said Cheong Seong-chang, an analyst at the Sejong Institute, a think tank in South Korea. North Korea was first put on the terrorism list after the South caught a woman from the North who confessed to planting a bomb on a South Korean airliner that exploded over the Indian Ocean, near Myanmar, in 1987. The North was taken off the list in 2008, after a deal aimed at ending its nuclear program. South Korea’s military plans to use loudspeakers along the shared Korean border to inform North Koreans of Kim Jong Nam’s killing and of their government’s brutality, a

South Korean news agency, Yonhap, reported Wednesday. The Defense Ministry declined to confirm the report. “By assassinating Kim Jong Nam, Kim Jong Un may have removed a thorn in the side, but it will further isolate his country,” Cheong said. “It is also expected to worsen his country’s relations with China, which has been protecting his brother.” Kim Jong Nam’s life illuminates the hidden intrigue inside the Kim family, which has ruled North Korea for almost seven decades. While the lives of the rest of the family remained shrouded in mystery, Kim Jong Nam, the oldest of three known sons of Kim Jong Il, has been the closest thing the isolated Stalinist state has had to an international playboy. He was often seen with fashionably dressed women in international airports and spent much of his time in casinos in Macau, where he also kept an expensive house. Outside analysts often saw him as a possible candidate to replace Kim Jong Un if the North Korean leadership imploded and China, traditionally an ally, sought a replacement in its client state. Chinese experts on North Korea said they doubted that Kim Jong Nam had special security protection from Beijing. “Chinese elites had no expectation this guy could play an important political role,” said Cheng Xiaohe, an associate professor of international relations at Renmin University. “If China wanted to use him as an alternative leader, China would have offered good protection, but this assassination shows he had no security protection.” In Macau, where Kim Jong Nam was headed, he was safe just by being there, said Zhang Baohui, director of the Center for Asian Pacific Studies at Lingnan University in Hong Kong. “Macau is part of China and is a safe haven in itself,” he said. Kim Jong Nam was a prince in exile with little chance of returning home, analysts and officials in South Korea said. His wife and a daughter and son are in Macau under Chinese protection, Lee said. The South Korean intelligence agency did not disclose how it had obtained the letter from Kim Jong Nam begging his half brother to spare his life. But government sources said that e-mails Kim Jong Nam sent home through North Korean embassies had been obtained in a hacking operation. In one of the e-mails, they said, Kim Jong Nam bitterly complained that the North Korean government stopped sending him cash after his father died and Kim Jong Un took over. In 2012 a news report said Kim Jong Nam was thrown out of a luxury Macau hotel, unable to pay a $15,000 bill. The Kim family has never been known for its togetherness. Kim Jong Nam’s mother, Sung Hae Rim, a decorated “people’s actress”, was already married with a child when Kim Jong Il forced her to divorce her novelist husband to marry him. Kim Jong Il adored his first son, Kim Jong Nam. He once seated his young son at his office desk and told him, “This is the place where you will one day give orders,” according to Lee Han Young, a relative who defected to the South in 1982. But Kim Jong Nam’s grandfather, the North’s founding president, Kim Il Sung, never approved of the marriage. “My father was keeping highly secret the fact that he was living with my mother, who was married, a famous movie actress, so I couldn’t get out of the house or make friends,” Kim Jong Nam was quoted as saying in a 2012 book by a Japanese journalist. “That solitude from childhood may have made me what I am now, preferring freedom.” Kim Jong Nam was born in secret, and when his mother fell out of favor with Kim Jong Il and was forced to live in Moscow, he was left in the care of her sister. He was later sent to Geneva, where he learned English and French. (His mother was alone in Moscow when she died in 2002.) Kim Jong Il would later begin a relationship with Ko Young Hee, a star of Pyongyang’s premier opera, who gave birth to Kim Jong Chol and then Kim Jong Un. According to a Japanese sushi chef who published a memoir in 2003 about his experience working for the Kim family, Kim Jong Un was by that time the father’s favorite. Kim Jong Nam squandered what little chance he may have had to succeed his father when he embarrassed Pyongyang in 2001; he was caught trying to enter Japan on a fake Dominican Republic passport. He told Japanese investigators that he wanted to visit Tokyo Disneyland. But rumors of intrigue never left Kim Jong Nam, as analysts speculated that if the young, inexperienced Kim Jong Un failed to meet the expectations of hard-line generals, they might summon home the eldest brother. In a way, Kim Jong Nam helped fuel such rumors. In the 2012 book by the Japanese journalist, Kim Jong Nam called his younger brother “a figurehead”. New York Times News Service


Editor: Lyn Resurreccion • www.businessmirror.com.ph

The World BusinessMirror

Friday, February 17, 2017

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Trump labor nominee withdraws W

ASHINGTON—The fast-food executive Andrew F. Puzder withdrew his nomination to be labor secretary on Wednesday, as Republican senators turned sharply against him, the latest defeat for a White House besieged by infighting and struggling for traction even with a Republican-controlled Congress. The toppling of one of President Donald J. Trump’s Cabinet picks was a victory for Democrats, unions and liberal groups that had been attacking Puzder’s business record and his character since he was chosen last December. Conser vative publications, including National Review and Breitbart, had also expressed resistance, zeroing in on Puzder’s employment of an immigrant who was in the country illegally as his housekeeper. And records from his 1988 divorce, disseminated on Tuesday night by opponents, resurfaced spousal abuse accusations that made some Republican senators uncomfortable. His ex-wife had recanted those accusations, but senators from both parties privately screened a videotape from The Oprah Winfrey Show that featured her laying out the charges while in disguise. The opposition from Republicans was broad, and the reasons varied. Among the senators who expressed concerns were John T hune of South Dakota, Rob Portman of Ohio, Thom Tillis of North Carolina, Susan Collins of Maine, Johnny Isakson of Georgia, Lisa Murkowski of Alaska and Tim Scott of South Carolina—more than enough to scuttle the nomination. A s p ok esm a n for P u z de r, George Thompson, said his treatment had been “an unprecedented smear campaign”. In a statement, Puzder thanked the president and those who supported him for their optimism about the “policies and new thinking” he would have brought to the

job. Puzder’s withdrawal came two days after the resignation of Trump’s national security adviser, Michael T. Flynn. Earlier this month, his nominee for Army secretary, the billionaire financier Vincent Viola, also withdrew his name from consideration, saying he could not disentangle his business connections. And his secretary of education, Betsy DeVos, was confirmed only after Vice President Mike Pence cast a tiebreaking vote. The Senate must still vote on the nomination of Rep. Mick Mulvaney, Republican-South Carolina, to be Trump’s budget director, over the loud objection of Sen. John McCain, Republican-Arizona, who took to the Senate floor again on Wednesday afternoon to accuse Mulvaney, a hard-line conservative of being antimilitary. “ This is not personal. This is not political. This is about principle,” McCain said. “ This is about my conviction as chairman of the Senate Armed Services Committee that providing for the common defense is our highest constitutional duty.” Trump’s nominee to head the Environmental Protection Agency (EPA), Scott Pruitt, is facing a revolt by EPA employees scrambling to block him. Collins declared her opposition to him on Wednesday. Republicans blamed Democratic obstruction, not the quality of the president’s choices, for the arduous confirmations process. “I think when you have to put all this energy into an unreasonable nominations process it takes away the energy that could better

Andrew Puzder, the fast-food executive, leaves after meeting with President-elect Donald Trump at his golf resort in Bedminster, New Jersey, last November 19. Puzder, on February 15, withdrew his name from consideration to lead the Labor Department amid rising doubts among Republican senators regarding both his business record and his character. Hilary Swift/The New York Times

be used for other things,” said Sen. Roy Blunt, Republican-Missouri. Democrats cheered Puzder’s withdrawal as a victory for working Americans. The Labor Department regulates workplace safety, enforces wage and hour laws, maintains unemployment and payroll data, and is generally seen as an advocate for workers. Puzder, at the helm of his fastfood company, ardently opposed the Affordable Care Act, cast a skeptical eye on minimum wage and overtime rules, and pledged an assault on regulations that he said in his withdrawal statement would “put America’s workers and businesses back on a path to sustainable prosperity.” Some critics also cast him as a sexist, denouncing fast-food advertisements he championed that featured bikini-clad women eating monstrous hamburgers. “The simple truth is that, given

his relationship to employees at the companies he runs, he was not fit to lead a department responsible for defending workers’ rights,” said Sen. Bernie Sanders, Independent-Vermont, who ran for the Democratic presidential nomination last year. Sen. Chuck Schumer of New York, the Democratic leader, called on Trump to nominate someone who supported the rights of workers rather than suppressed them. “Puzder should never have even been nominated to lead the Labor Department, and Senate Republicans clearly recognized this, too,” Schumer said. “The fact that someone so antilabor was even nominated shows how far President Tr ump is from where he campaigned”. As the chief executive of CKE Restaurants, which ow ns the Hardee’s and Carl’s Jr. fast-food chains, Puzder had come under

intense criticism from Democrats and liberal groups that accused him of mistreating his workers and supporting automation in the workplace. The intense scrutiny of his personal life compounded his troubles. His hearing was repeatedly delayed as he sought to extricate himself from his business and investments. Democrats, who organized screenings of the video of his wife detailing her allegations of abuse, were preparing to make his marriage an issue and to question him about his company’s salacious TV ads. However, as recently as last week he had said through a spokesman that he was “all in” to move forward. Despite the growing backlash, the White House and Republican leaders tried to rally support around him last week, arguing that no nominee was perfect. “I think Andy Puzder is an

outstanding choice,” said Sen. Mitch McConnell, RepublicanKentucky, the majority leader, who counted himself a friend of Puzder’s. “We’re always looking for nominees who have never made a mistake. Frequently it’s impossible to find nominees who have never made a mistake.” Republicans quietly ack nowledged t he setbac k as t he y s a lut e d P u z d e r. “A nd y Pu zder has t he e x per ience and abi l it y to m a ke a n e xce l lent l abor sec ret a r y, but I res pec t h i s dec i sion,” sa id Sen. L a m a r A l e x a n d e r, R e p u b l i c a n -Te n nessee, c h a i r m a n of t he l abor committee. Trump ignored questions about Puzder after a meeting w ith Pr ime Minister Benjamin Netanyahu of Israel on Wednesday after noon, but he w il l be under pressure to quick ly find a replacement. New York Times News Service

Trump’s health-market plan: Repair then repeal W

A S H I N G T O N —T h e Tr u mp a d m i n i s t r a t io n p ro p o s e d ne w rules on Wednesday to stabilize health-insurance markets roiled by efforts to repeal the Affordable Care Act, by big increases in premiums and by the exodus of major insurers. The move came a day after Humana announced that, starting next year, it would withdraw from the public marketplaces c reated by for mer P resident Barack Obama’s signature domestic achievement. It was the first insurer to do so for 2018. The proposed rules, backed by insurance companies, would t i g ht e n c e r t a i n e n r o l l m e nt procedures and cut the health law’s open enrollment period in half, in hopes that a smaller but healthier consumer base will put the marketplaces on sounder financial footing and attract more insurance companies in states with limited choices. B ut p a r t of t he m a r k e t ’s problem stems from President Dona ld J. Tr ump’s deter mination to repea l the hea lth law while the W hite House and Congress str ug gle to find a politica l ly acceptable replacement. Even as the Department of Hea lt h a nd Hu m a n Ser v ices

worked to a nswer insu ra nce company concerns, the Internal Revenue Service (IRS) and Congress were taking steps that could add uncertainty to the jittery insurance economy.

650K The estimated number of people who could see their enrollment delayed annually because of the new requirement to verify eligibility

On Capitol Hill, conser vatives declared that they were not about to accept a health law replacement that remotely resembled the Affordable Care Act. And the IRS adopted a policy for the coming tax season that could weaken the requirement for people to have insurance. The tax agency said it was reversing one aspect of an Obama administration plan after Trump, on his first day in office, issued an executive order instructing

agencies to reduce burdens imposed by compliance with the Affordable Care Act wherever legally possible. T he proposed r u les sig na l t he Tr u mp ad m i n i s t r at ion’s urgency in tr ying to keep other insurers from f leeing the market after Humana’s departure. The company said on Tuesday it was losing money by insuring too many sick people without enough healthy ones enrolling. Humana had already scaled back its participation to 11 states this year, from 19 in 2016. Mark T. Ber tolini, the chief e xec ut ive of A et n a , sa id on Wednesday the market places were in “a death spira l ”, and at a conference sponsored by The Wall Street Journal, he declined to say if his company wou ld par t icipate ne x t year. A nd Molina Hea lthcare, one of the few insurers that seemed to b e f i n a nc i a l ly succes sf u l under the hea lth law, repor ted on Wednesday that it was losing money in the market places and threatened to exit the market if its concer ns about a risk-sharing program requiring the company to pay hundreds of mil lions of dol lars to other insurers were not addressed. Dr. Patrick H. Conway, the

acting administrator of the Centers for Medicare and Medicaid Services, said the rules proposed on Wednesday “will help protect Americans enrolled in the individual and small group health insurance markets while future reforms are being debated”. But Democrats and consumer groups denounced the proposed rules, saying they would make it more difficult for people to enroll and increase costs for some consumers. Sen. Ron Wyden of Oregon, the senior Democrat on the Finance Committee, said the rules sent “a clear message to the American people: Patients are not a priority, and insurance companies are back in charge”. Under the proposed r u les, the annual open enrollment period would be reduced to about si x weeks from t wo months. The shorter time frame would be similar to the open enrollment periods for Medicare and for many employer-sponsored health plans. But the administration ack nowledged that the shor ter sign-up period “could lead to a reduction in enrollees, primarily younger and healthier enrollees” who often sign up near the deadline.

Other par ts of the r u les would limit opportunities for people to hold off on buying insurance until they get sick, a phenomenon that has loaded many health plans offered under the Affordable Care Act with more expensive, sick customers than they expected. By manipulating a system that now precludes insurers from rejecting customers with preexisting medical conditions, consumers are avoiding the purchase of insurance when they are healthy and rushing in when they need it, insurers say. The rules also would require consumers to provide “supporting documentation” to prove they were eligible to enroll in health plans through HealthCare.gov outside the standard open enrollment season. The administration estimated that 650,000 people annually could see their enrollment delayed because of the new requirement to verif y eligibility. People can sig n up after the deadline if they experience certain “ life changes” like hav ing a baby, getting mar r ied or losing employer-sponsored insurance. Insurers have told the gover nment for severa l years that people who sig n up in a

specia l enrol lment per iod use up to 50 percent more ser v ices than those who sig n up in the reg u lar enrol lment season. Insurers and Republican members of Congress welcomed the proposed changes, which will be published in the Federal Register on Friday, giving the public until March 7 to comment. Final rules are likely to be issued in March or April. Insurers must decide by early-May what kinds of health plans they will offer in 2018. Sen. Lamar Alexander, Republican-Tennessee, chairman of the Senate health committee, said the proposals were “important first steps to rescue a collapsing Obamacare individual market”. But insurers cautioned that the proposed rules, while helpful, would in no way provide a solution if, in a few weeks, Republicans introduce legislation to repeal major provisions of the Affordable Care Act, such as the requirement for most Americans to have coverage. Christopher W. Hansen, the president of the advocacy arm of the American Cancer Society, said the tighter restrictions on special enrollment periods could “cause problems for cancer patients”, delaying treatment and reducing their chances of survival. New York Times News Service


A8

Friday, February 17, 2017

The World BusinessMirror

www.businessmirror.com.ph • Editor: Lyn Resurreccion

Trump charts new Mideast course; possible no separate Palestine state

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ASHINGTON—Charting a striking new course for the Middle East, President Donald J. Trump on Wednesday withheld clear support for an independent Palestine and declared he could endorse a one-nation solution to the long and deep dispute between Palestinians and Israel.

President Donald J. Trump listens as Israeli Prime Minister Benjamin Netanyahu speaks during their joint news conference in the East Room of the White House in Washington on Wednesday. AP/Pablo Martinez Monsivais

The American president, signaling a new era of comity between the US and Israel after rocky relations under President Barack Obama, said he was more interested in an agreement that leads to peace than in any particular path to get there. Standing beside Israeli Prime Minister Benjamin Netanyahu, Trump broke not only with recent US presidents but also distanced the United States from the prevailing position of much of the world. While Trump urged Netanyahu to “hold off ” on Jewish settlement construction in territory the Palestinians claim for their future state, he offered unwavering support for Israel, a pledge he appeared to substantiate with his vague comments about the shape of any agreement. While it once appeared that a two-state solution was the “easier of the two” options for the Palestinians and Israel, Trump said he’d be open to alternatives. “I’m looking at two-state and one-state, and I like the one that

6,000 The estimated number of new settler homes Israeli Prime Minister Benjamin Netanyahu has approved in recent weeks in the West Bank and east Jerusalem

both parties like,” he told reporters. “I can live with either one.” The United States has formally backed the two-state solution as official policy since 2002, when President George W. Bush said in the White House Rose Garden that his vision was “two states, living side by side in peace and security.” In practice, the US already had embraced the policy informally. President Bill Clinton, who oversaw the Oslo Accords in the 1990s that were envisioned as a stepping-stone

to Palestinian statehood, said before leaving office that resolution to the conflict required a viable Palestinian state. Separately on Wednesday, Palestinian leader Mahmoud Abbas called on Netanyahu to end settlement building and expressed “willingness to resume a credible peace process”. Also on Wednesday, CIA chief Mike Pompeo secretly held talks in the West Bank with Abbas, the first high-level meeting between the Palestinian leader and a Trump administration official, senior Palestinian officials said. The White House wouldn’t comment on the meeting A l l ser ious peace negot iations in recent decades have assumed the emergence of an independent Palestine. The alternatives appear to offer dimmer prospects for peace, given Palestinian demands for statehood. Dozens of countries, including the US, reaffirmed their support for a two-state accord at an international conference i n Pa r i s l a st mont h , b e fore Trump’s inauguration. In Cairo on Wednesday, UN Secretary-General Antonio Guterres said: “There is no Plan B to the situation between Palestinians and Israelis but a two-state solution.... Everything must be done to preserve that possibility.” At one point on Wednesday, Trump noted the need for compromise in achieving any Mideast peace. Netanyahu interjected: “Both sides.” On terrorism and other matters, there appeared little daylight between the leaders. Echoing l ang uage used by Trump over a need to combat “radical Islamic extremism”, Netanyahu said for peace to be sustainable, two “prerequisites” must be met: “Recognition of the Jewish state and Israel’s security needs west of the Jordan” River. W hile a two-state solution would involve Israel ceding occupied territory that is strategically and religiously significant, many in the country believe a single binational state would be even more difficult to maintain. It would mean granting millions of Palestinians citizenship and voting rights, threatening Israel’s Jewish majority and its Jewish character. Trump’s campaign platform made no mention of a Palestinian state, and his inner circle included allies of the West Bank settler movement. A delegation of settlement leaders

was invited to Trump’s inauguration. But after weeks of dancing around the issue of expanded Israeli settlement construction, Trump asked Netanyahu to “hold back on settlements for a bit”. In recent weeks Netanyahu has approved construction of more than 6,000 new settler homes in the West Bank and east Jerusalem, territories Israel seized in the 1967 Mideast War. He also allowed Parliament to pass a law retroactively legalizing some 4,000 settlement homes built on private Palestinian land. Still, Netanyahu indicated he was open to some sort of arrangement. “We’ll work something out but I’d like to see a deal be made. I think a deal will be made,” he said. And Naftali Bennet, the head of Israel’s pro-settler Jewish Home Party, hailed the new atmosphere between Trump and Netanyahu, saying: “The Palestinian flag was today lowered from the mast and replaced with the Israeli flag.” A mer ic a n president s h ave long struck a delicate balance in addressing the Israeli-Palestinian conf lict, stressing the close US friendship with  Israel  but also sometimes calling out  Israel  for actions seen as undermining peace efforts, such as expanding settlements. Trump and Netanyahu also were to discuss Iran and the president’s campaign pledge to move the US Embassy in Israel from Tel Aviv to Jerusalem. On Wednesday Trump said that he’d like to see the embassy move and said his administration is studying the issue closely. Palestinians and Arab governments have warned that such a move could be deeply destabilizing. After repeatedly clashing with Obama, including over a UN Security Council resolution last December condemning Israeli settlements, Netanyahu has seemed relieved by Trump’s arrival. He even recounted his personal relationships with members of Trump’s family, including son-inlaw Jared Kushner, whom Trump has previously described as the man who could mediate a Middle East peace deal. “C a n I revea l, Ja red , how long we’ve know n you? ” Netanyahu said w ith a chuck le. “I’ve know n the president and his family and his team for a long time and there is no greater suppor ter of the Jew ish peo ple and the Jew ish state than President Dona ld J. Tr ump.” AP

Bucking Trump’s antitrade trend, EU clears agreement with Canada

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RUSSELS—The European Union and Canada on Wednesday cast their newly approved trade deal as a much-needed beacon for cooperation, with the EU criticizing President Donald J. Trump’s protectionist bent as a threat to the continent’s prosperity. After about seven years of negotiations, the EU parliament approved on Wednesday a deal with Canada that will eliminate most tariffs for business between the EU’s economy of half-abillion people and Canada’s 35 million. Though critics claim it will mainly help large companies, proponents say it will create jobs and wealth. And, they argue, it is a sorely needed reminder of the world’s capacity to cooperate at a time when political forces, even within the EU, want to bring back national barriers to migration and trade. “This is the vote that the world was waiting today to hear—whether there will be a progressive voice in the world,” said Canadian International Trade Minister Francois-Philippe Champagne during a visit to Brussels coinciding with the approval. “Canada and Europe, I am glad to say, came up to this challenge and sent a very strong signal to the world.”

The future of global trade was put in doubt after Trump nixed a trade deal with Pacific countries, threatened to get tough on China and renegotiate a freetrade pact with Mexico and Canada. In Europe political parties opposed to the EU’s message of shared markets and open borders for workers are doing well in the polls ahead of elections in countries like the Netherlands and France. The EU parliament approved the Comprehensive Economic and Trade Agreement with Canada by a wide margin of 408 for, 254 against with 33 abstentions, allowing for its provisional entry into force as early as April. At the same time, as the EU lawmakers were voting, the bloc’s executive also took aim at Trump. “While we do not yet know the details of the policies the Trump administration will pursue, we do know that their instincts will be protectionist more than ever,” said Pierre Moscovici, the EU’s economic and financial affairs chief. “That means that the international trading and security architecture to which we owe our unprecedented peace and prosperity is also threatened as never before. So let us mobilize” Moscovici said at the University of Athens.

The belligerent mood was also palpable at the EU’s legislature in Strasbourg, France. “President Trump has given us another good reason to intensify our links with Canada—while Trump introduces tariffs, we are not only tearing them down, but also setting the highest progressive standards,” said Guy Verhofstadt, the leader of the EU parliament’s Alliance of Liberals and Democrats for Europe (Alde) group. Canadian Prime Minister Justin Trudeau is set to address the EU legislature on Thursday. The EU vote should close the drawn-out approval process across the 28 member-states, where some governments and legislations had tried to modify or scupper the deal. The Netherlands could conceivably still hold up the deal if it demands an advisory national referendum. Trade between the EU and Canada amounts to more than €60 billion ($63 billion) a year, and the EU expects the deal to boost this by 20 percent by removing almost all tariffs. Critics say it could dilute standards for food safety or labor rights by giving more power to big corporations. Outside the EU parliament, demonstrating activists were vocal about their worries about the deal. “What will happen is more and more

deregulation, less social protection for citizens, for small companies, for independent workers,” said Maika Fernandes, who had traveled from Alicante, southern Spain. “No one will be able to compete with the multinationals. It will be a financial Europe that will favor only big multinationals.” EU trade chief Cecilia Malmstrom tried to assuage those concerns, saying it “will not change food-safety standards or any other EU requirements. Only the EU institutions can do that.” The deal was approved because three of the four major groups in the EU parliament backed it—the European People’s Party Christian Democrats, the European Conservatives and Reformists and the Alde liberals. The far-right and far-left and a sizable part of the socialist S&D group opposed it. France’s h ard-left presidential candidate Jean-Luc Melenchon said he was shocked such a free trade could still make it at a time of high unemployment and crisis. “It is the last of these old treaties from the 20th century, with a dose of shaggy liberalism, with a totally deregulated free trade. And many people in this parliament seem to find it remarkable, which is appalling to me,” he said. AP

Rats on the trackbed at Union Square in New York on June 15, 2015. New York City is investigating three recent cases—one of them fatal—of a rare disease transmitted through rat urine that have occurred in the Grand Concourse neighborhood of the Bronx, according to the Department of Health and Mental Hygiene. Michael Appleton/The New York Times

Rare disease strikes a Bronx area all too familiar with rats

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EW YORK—The rare disease goes by many names. Mud fever, sewerman’s flu, swamp fever—those are just a few of the monikers for the illness caused by the bacterium Leptospira. As the names indicate, the disease is associated with filth, and in the developed world, it is exceedingly rare. But in the Grand Concourse neighborhood of the Bronx, where the conditions in some of the buildings have long been called unlivable by residents, the disease found its way into the vast rat population and has now been linked to a cluster of infections that have left one resident dead and two others severely ill. The authorities ordered people living in eight illegal apartments in a subcel l a r at 750 Grand Concourse, one of the buildings where the infections occurred, to vacate the premises, and they have stepped up efforts to combat the rat population through extermination and better garbage management. “I want to make clear that this is a very rare infection,” Dr. Mary Bassett, commissioner of the New York City Department of Health and Mental Hygiene, said on Wednesday, calling the f lare-up of leptospirosis cases a “cluster” on this one Bronx block, rather than an outbreak or an epidemic. “Since 2006, we’ve seen some 26 cases in New York City. The last data we have for the country as a whole suggests in 2015 there were fewer than 30 cases diagnosed across the whole country.” The disease is caused by exposure to an infected animal’s urine, Bassett explained, not through bites or by touch or by watching a rat scurry across subway tracks. She urged anyone in the area with flu-like symptoms to seek medical help. The disease can be treated with antibiotics. While the disease might be rare, for residents in the area, the exposure to rats is nothing new. Rosa Flores, 73, has lived for 10 years with her son, her daughter and her nephew in one of the eight illegal basement units in the affected building. Rats have always been a problem, she said, but the situation has been worse in recent months, especially since their cat ran away. The cramped two-bedroom apar t ment was l ittered w it h chipped paint and broken appliances; rats had gnawed several holes in the floor and walls, which were loosely patched over by the city’s Department of Buildings. Last month the family came home to find the refrigerator door ajar and rats crawling everywhere. Soon after, Flores’s son, Braulio, 43, became sick. “He had a bad fever; his whole body ached; he looked terrible,” she said in Spanish. She finally prevailed upon him to go to Lincoln Hospital, where he spent two weeks in intensive care. He was released last week, and the family was relocated to a hotel in Queens. “I want the city to come check

everything out because the rat population is a dangerous thing,” Flores said. The landlord of 750 Grand Concourse, Ved Parkash, was listed as one of the city’s worst landlords by the public advocate, Letitia James, in 2016. The Department of Buildings alone has some two dozen open violations against the property, said Rick Chandler, the department commissioner. Parkash did not immediately respond to a call to his office seeking comment. Maria Torres-Springer, commissioner for the Department of Housing, Preservation and Development, ac k nowledged t he l a nd lord ’s troubled histor y but said his stewa rd ship of t he proper t y was improving. “There are open violations on this building,” she said. “However, if you look at the trend over the last couple of years, the number of open violations for the building has actually gone down significantly.” She added: “A year ago there were about 300 open violations. That number today is about 80.” The Bronx borough president, Ruben Diaz Jr., said the city had not been aggressive enough in fighting on behalf of the residents. “It is unfathomable to me that in this day and age, in one of the most expensive cities in the world and at our most technologically advanced point as a civilization, the city cannot mitigate the rat problem, nor does it have good ideas to do so,” he said in a statement. He continued: “ 750 Grand Concourse has long been regarded as one of the worst buildings in the city, with nearly 1,500 complaints of all kinds, including rodents, with many unresolved. The city knows this and has done nothing to help the tenants alleviate this issue, not only in this building but in communities across the five boroughs.” Late on Wednesday Mayor Bill de Blasio released a statement, saying: “We stand with the tenants. After deploying numerous tools to address persistent problems at this building, we are working with housing advocates and tenants to lodge an action against the landlord to take over operations. We will not rest until we’ve exhausted every measure to ensure the health and safety of these residents.” Sharon Green, 60, works for the Metropolitan Transportation Authority and has lived in a basement apartment near the Flores family for nearly a decade. “The conditions are terrible, and they’ve always been like this,” she said. “Lately, it’s gotten even worse, though.” Green said she often heard rats scampering beneath her f loor, which keeps her dog, King James, up at night and worries her. Last March, she said, an enormous hole opened up in the floor of the basement laundry room, which has since been cordoned off. “We complain and complain, and nothing happens,” she said. “It’s like someone has to die for anyone to pay attention.” New York Time News Service


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Suu Kyi pushes for more FDI as Rohingya crisis deepens

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ung San Suu Kyi’s government in Myanmar is moving to attract more foreign direct investment (FDI), as a refugee crisis makes companies wary of setting up shop in the Southeast Asian nation. Two laws set to take effect by June will make it easier for foreign companies to put money in Myanmar, a nation with one of Southeast Asia’s highest growth rates. The moves are part of efforts to revamp Myanmar’s image among investors, which has suffered of late after a transition to democracy led to a surge in global interest. Suu Kyi, a former political prisoner and Nobel laureate, swept to power last year promising a change of course in a nation where the military ran the government for decades. Yet, while former President Barack Obama last October lifted the last of decades-old sanctions on Myanmar, a refugee crisis spurred by an army crackdown on the country’s Rohingya Muslim minority is raising fresh concerns of humanrights abuses. “There is apprehension that investing in the country may by implication condone the government and military’s actions in repressing the Rohingya, or indirectly give them more resources to do so,” said Dustin Daugherty, a senior associate at professional services firm Dezan Shira & Associates in Ho Chi Minh City. “This is particularly true, given that current and former members of Myanmar’s military have an outsized role in the country’s economy.”

Rape, plunder

The United Nations’s refugee agency said this month that more than 60,000 Rohingya are believed to have sought safety in Bangladesh since October 2016, in addition to the 33,000 Rohingya refugees living in two camps in Bangladesh. A separate UN body last October documented allegations of abuses by the military, including rape, burning down houses and stabbing children to death. Suu Kyi’s government has set up a commission to investigate the allegations and vowed to “spare no effort” in bringing perpetrators to justice, according to a February 8 foreign ministry statement. At the same time, it said, security forces have been told to avoid “excessive force” while still protecting the public from attacks, including an attack on the police in western Rakhine state last year that was “funded and inspired from abroad.” Still, rights groups have accused Suu Kyi’s government of whitewashing the military’s actions, including asserting that Rohingya were setting their own homes on fire in a bid for international attention. The UN special rapporteur to Myanmar, Yanghee Lee, said at the end of a visit last month “the government’s response to all of these problems seems to currently be to defend, dismiss and deny.”

$3.3B Myanmar’s foreign direct investment in 2016, down 65 percent

Investment falls “This response is not only counterproductive but is draining away the hope that had been sweeping the country,” Lee said. The crisis threatens to hinder the government’s efforts to revive FDI, which dipped 65 percent last year to $3.3 billion. The Asian Development Bank forecasts that the expansion will slow to 8.3 percent in 2017 from an estimated 8.4 percent, mostly due to global factors. A revamped companies law, set to take effect by April, will allow overseas investors to buy up to 35-percent equity in local firms before they are considered foreign-owned, Aung Naing Oo, director general of the Directorate of Investment and Co. Administration, said this month. Foreigners will also be able to buy shares on the Yangon stock exchange, he said. A separate investment law in the works would also make foreign companies eligible for tax incentives without first seeking approval from the Myanmar Investment Commission, Aung Naing Oo said.

Backlash

The moves are “expected to increase levels of in-bound direct investment and M&A [merger and acquisitions] opportunities,” said Tom Platts, a partner at Stephenson Harwood Llp., who leads the firm’s Myanmar practice. “People’s expectations have also tended to be quite unrealistic when it comes to Myanmar’s development,” he said by phone. “You cannot revamp the political, legal, social and economic infrastructure of a country overnight, particularly one with as many complexities as Myanmar.” The US first imposed economic sanctions on Myanmar in 1990 in an attempt to weaken the thenmilitary regime and their associated business cronies. In lifting them last October, Obama cited the shift to a civilian-led government and “greater enjoyment of human rights and fundamental freedoms.” Suu Kyi is caught between the demands of the international community and local interests that want action against the Rohingya, a group of people that many Burmese consider illegal immigrants. Last December Bangladeshi banker Muhammad Yunus and other Nobel laureates called on the UN Security Council to intervene. “She is basically in a very difficult position,” Sithu Aung Myint, a political analyst in Yangon who has written about Myanmar politics since the 1990s, said of Suu Kyi. “She cannot take a side.” Bloomberg News

Editor: Max V. de Leon • Friday, February 17, 2017 A9

Strong consumer spending spurs Malaysia’s growth to 1-year high

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alaysia’s economy grew at the fastest pace in a year last quarter, as stronger consumer spending and an export recovery helped counter falling government expenditure.

GDP rose 4.5 percent last quarter from a year earlier, Bank Negara Malaysia said in an e-mailed statement on Thursday. The median estimate of 18 economists surveyed by Bloomberg was 4.4 percent. GDP expanded a seasonally adjusted 1.4 percent from the previous three months. The Malaysian economy grew 4.2 percent in 2016, from 5 percent in 2015.

Big picture

Malaysia’s economy has come under pressure in recent years as lower commodity prices and a slump in global demand hurt exports and crimped revenue. Domestic consumption has been a key growth

driver and the central bank has kept interest rates low to help support spending. A rebound in oil prices gives the government more room to spend, allowing it to roll out infrastructure projects, including new rail lines in the capital and a highway connecting the Borneo states of Sabah and Sarawak. The central bank took steps to curb offshore trading of the ringgit last year, as it plunged about 10 percent against the US dollar in the past six months. Rising inflation may limit the scope for further policy easing to support growth.

Economist takeaways

“We expect Malaysia’s growth to

4.2%

Malaysia’s growth in 2016, slower than 2015’s 5 percent

stabilize at around 4.5 percent over the next couple of years,” Krystal Tan, an economist at Capital Economics Ltd. in Singapore, said in a note. “Against a backdrop of lackluster external demand, the noncommodity export sector is unlikely to provide a significant lift to the economy either, despite the boost to the competitiveness of Malaysian noncommodity exports from a fall in the currency.” “High levels of household debt will constrain private consumption growth,” she said. “What’s more, there is little scope for additional fiscal or monetary-policy support

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to property curbs, he said. Lim was speaking after the Singapore-based developer said net income climbed 74 percent to S$430.5 million ($303 million) in the three months ended December 31. Revenue rose 7 percent to S$1.9 billion. For the year, net profit rose 12 percent to S$1.2 billion. CapitaLand shares closed 0.9 percent higher in Singapore, extending this year’s gain to 16 percent. CapitaLand ’s Singapore home sales more than doubled to 571 units during the year, and sales in China rose 14 percent. Singapore and China

Other details

Private consumption expenditure, which makes up about half of GDP, climbed 6.2 percent last quarter from a year ago. Public-sector spending fell 4.2 percent, while exports rose 1.3 percent, after contracting in the previous three months. Growth in the services industry, the biggest in the economy, slowed to 5.5 percent in the fourth quarter, from 6.1 percent in the previous three months. Manufacturing rose 4.8 percent, from 4.2 percent. Bloomberg News

Second round for Jakarta vote as governor loses momentum

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akarta residents face another two months of campaigning, as the race to lead Indonesia’s capital was headed for a run-off election that will divide the city’s powerbrokers along similar lines to the last presidential election. Unofficial “quick count” tallies showed the incumbent Basuki Tjahaja Purnama, who is backed by President Joko Widodo, leading with around 43 percent of the vote. Close behind with about 40 percent was former education minister Anies Baswedan, who has the support of Widodo’s 2014 opponent, former general Prabowo Subianto. The two would face off again in April should the quick-count tally hold in official results expected by February 27. The bid to lead Jakarta, a city of more than 10 million people with an annual budget of $5.2 billion, was marked by a blasphemy case against Purnama, an ethnic Chinese Christian known as Ahok who assumed the governorship when his running mate Widodo won the presidency. Though race and religion will likely again play a central roll in the run-off campaign, with Ahok’s opponents exploiting religion to torpedo his candidacy, the key will be which of the candidates can carry the votes of Agus Harimurti Yudhoyono, the son of former president Susilo Bambang Yudhoyono, who appeared headed for a last-place finish with around 17 percent of the vote. “Ahok’s path to retaining the governorship now looks like an uphill one,” said Hugo Brennan, an Asia analyst at Verisk Maplecroft who was in Jakarta for the election. “Much will depend on where Agus supporters rally to, but the Anies camp looks like a more natural fit.” The yield on two-year government bonds rose by their most in four weeks, climbing 4 basis points

AN electoral worker writes down votes during the gubernatorial election in Jakarta, Indonesia, on Wednesday. Voting began in the election for governor of the Indonesian capital after a months-long campaign in which the monumental problems facing Jakarta took a backseat to religious intolerance and racial bigotry. AP

to 7.02 percent as of 8:58 a.m. on Thursday in Jakarta, according to Inter Dealer Market Association prices compiled by Bloomberg. The Jakarta Composite Index was little changed in early trading.

Front-runner

Ahok looked like the clear frontrunner when the campaign kicked off last October before he was accused of insulting Islam by criticizing those who said the Koran stated Muslims shouldn’t be led by a nonMuslim. Large anti-Ahok protests led by conservative Islamic groups and an ongoing blasphemy trial cut into the governor’s lead and turned the election into a broader power struggle between conservative and moderate forces in the world’s largest Muslim majority nation and thirdlargest democracy. In January Baswedan was criticized for trying to exploit the

blasphemy issue after he gave a speech to the Islamic Defenders Front, a hard-line group that has been vocal in its opposition to Ahok. If Ahok eventually wins and is later found guilty of blasphemy, he would be immediately dismissed as governor. After casting his vote, Widodo called on people to respect the choices others make. “Let us not allow political differences to destroy our unity,” he said. “I hope that all can be united again as brothers for the sake of the country’s unity after the elections.” Speaking to reporters as he voted on Wednesday morning in South Jakarta, Baswedan said he was praying for a positive result. Ahok urged people to exercise their right to vote “because the choice you make will surely determine the future of Jakarta.” There were no reports of violence or unrest at polling stations across the city.

Singapore property curbs to stay in 2017, CapitaLand says

ingapore’s residential property curbs are set to stay in place for at least another year, amid signs the city’s housing market is stabilizing, the CEO of Southeast Asia’s biggest developer said. “We see volume picking up and the price declines have slowed,” Lim Ming Yan, the president and CEO of CapitaLand Ltd., said in a Bloomberg Television interview with Haslinda Amin on Wednesday. “We see this trend continuing for 2017. There is no compelling reason for the government at this point to make major changes,”

to push growth higher.” “It is an encouraging set of numbers and affirms expectations that growth will remain in a relatively safe zone of above 4 percent,” said Julia Goh, an economist with United Overseas Bank Ltd. in Kuala Lumpur. “The only question I have is the resiliency of the services sector which, if it moderates further, could be a drag to overall growth. There’s also the risk of protectionist policies that could derail the recovery in global trade.”

accounted for 84 percent of annual group earnings before interest and tax, up from 79 percent the previous year. “Singapore and China continue to be CapitaLand’s core markets, while we scale up in markets, such as Vietnam,” Lim said in the earnings statement. The developer has more than 8,000 homes ready to be sold in China and expects to hand over 6,000 this year, the company said. Singapore home prices fell 3 percent in 2016, the third straight annual decline, as the government held steadfast on its cooling measures.

Prices fell for a 13th straight quarter in the three months ended December 31, the longest streak since data was first published in 1975. The existing stock of unsold homes may take three years to sell, according to Augustine Tan, president of the Real Estate Developers’ Association of Singapore. The government has signaled it is reluctant to ease property curbs, including capping debt repayments at 60 percent of a borrower’s income and higher stamp duties, as it wants to avoid overheating the market again.

Bloomberg News A view of prime properties in Singapore

‘Some encouragement’ IF Baswedan defeats Ahok, it could be a boon to Prabowo, the former son-in-law of dictator Suharto, who has hinted that he’d like another crack at the presidency in 2019, and could act as a thorn in Jokowi’s side by taking control of major infrastructure projects. “This might end up being through Anies a source of some encouragement for Prabowo but it’s hardly a knockout blow for Jokowi,” said Greg Barton, a professor of global politics and Indonesia specialist at Deakin University in Australia. And while Baswedan appeared better positioned at this point, it was too early to count out Ahok, given his strong finish after having been severely weakened, Barton said. “You can’t take anything for granted having seen how the last two months have gone,” he said. Bloomberg News


A10 Friday, February 17, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Separation of Church and State

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he current controversy about the Catholic Bishops’ Conference of the Philippines (CBCP) speaking out on issues and government policy that it considers important is a “tempest in a teapot”—an idiom meaning a small event that has been exaggerated out of proportion.

It might be well to remember that for virtually all of recorded history, leaders—from great kings in magnificent palaces to tribal leaders underneath the jungle canopy—sought to establish their credibility by invoking Divine Rights. On the timeline of history, the separation of religion (Church) and government started only a few moments ago. The ancient Egyptian pharaohs from 5,000 years ago were themselves considered “gods”. Shintoists considered the Japanese emperor a divine descendant of the goddess Amaterasu until 1946. Looking back even only a few hundred years past, there was no line between religion and the state. The 1987 Constitution of the Philippines declares: “The separation of Church and State shall be inviolable” and “no law shall be made respecting an establishment of religion, or prohibiting the free exercise thereof”. This is taken from the first legal prohibition of the government establishing a state religion found in the US Constitution. Many different religious groups fled to the colonies in North America to avoid religious persecution, and were not about to start over the same way again. No one with any common sense would deny the absolute right of the CBCP or any individual or group to exercise its rights of freedom of speech and opinion. The argument that the CBCP only speaks for a small segment of Philippine society is immaterial also. That same 1987 Constitution, which enshrined the separation of Church and State, also enshrined party-list representation, which protects special interest groups. The 2016 election saw the PBA Party-list receive the ability not only to give its input on proposed legislation, but to vote for or against laws. By its own mandate, PBA is “responsive to the interests of Filipino athletes”. Aren’t those Filipino athletes already served in Congress by their locally elected representative? What particular broad national interest is served by the Manila Teachers’ Savings and Loan Association having its own congressional seat? As with the 46 special-interest organizations that won in the partylist elections, the CBCP speaks for its particular constituency, and is no different than the ABS-Arts, Business and Science Professionals. But it is the “religious element of the CBCP that seems to get people upset. Would there be the same kind of discussion if the CBCP were the initials of the “Camote Buyers Confederation of the Philippines”? To attack the political positions of the CBCP on the grounds that it is a religious organization is wrong. The current discussion about bringing back capital punishment has absolutely nothing to do with the constitutional guarantee of the separation of Church and State. Further, it is a short walk between stopping a person or group because they hold opinions based on religious belief and stopping those religious beliefs altogether.

Accountability and the woke voter James Jimenez

spox

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raditional voter education teaches us that voters have rights. As a part of the electorate, citizens have the right to free and fair elections; to have the secrecy of their ballots protected, and, for voters running for office, to have free and equal access to government resources. All of that is true, of course, and very important for our democratic way of life to keep on thriving. But one thing—among many, to be honest—traditional voter education doesn’t emphasize nearly enough is the right of voters to hold their elected representatives accountable, once they’ve been installed in power.

According to most voter-education lectures, accountability comes from two main mechanisms: the recall election and the opportunity to vote lemons out of office when they run for reelection. But these solutions are too easy to subvert, too lame and, ultimately, available too late to do much good. For the

woke voter, accountability means so much more. From the point of view of voter education, “holding elected officials accountable” should not be limited to the threat of removal from office—as potent as that threat may be. Rather, the definition should be given a more active

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and don’t forget those what-if questions—what if your proposal doesn’t work? What if things don’t go according to plan? What if your assumptions are wrong? If they refuse to answer, or if they beat around the bush too much, call them out on it, as well. Push for debates—and participate—on the proposed measures; if you can’t do it yourself, support others who can. In this way, you can make sure that the people representing you— even though they aren’t the people you voted for—aren’t just blindly toeing the party-line or, worse, using their elected office to promote their own personal agendas, biases and religious beliefs. In this way, you make sure that elected office is a temporary grant of authority by the true sovereign power—you!— and not an abdication; a duty, not a right; a trust, not permission to be subjugated. James Arthur B. Jimenez is director of the Commission on Elections’s Education and Information Department.

What did Trump know, and when did he know it?

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voice; a more practical component that will help ensure faithful performance, instead of just penalizing bad governance. Voters should be taught, therefore, that one of the best ways to hold elected officials accountable is to get them to openly explain their positions on proposed legislation and policies; not just whether they are for or against it, but also their reasons for coming to the conclusion they did. It is in those explanations that a woke voter will find both the reasons to support the proposals or to oppose them. Do not buy into the fiction that being elected into office means that a person automatically knows more than you do. Just as princes still “ehem” pass gas, so, too, do elected officials still make mistakes. They can still be swayed by the wrong arguments or fall prey to the temptation to use their power for their own benefit. Or, sometimes, they might just simply not get it. So it is very important to ask them questions, like why and how;

D

uring the Watergate scandal, until now the most outrageous political scandal in American history, the crucial question was drawled by Sen. Howard Baker of Tennessee: “What did the president know, and when did he know it?”

Today the question is the same. This is not about Mike Flynn. It is about the president who appointed him, who earlier considered Flynn for vice president. The latest revelation of frequent contacts between the Trump team and Russian intelligence should be a wake-up call to Republicans, as well as Democrats. When Vice President Mike Pence was asked by Chris Wallace of Fox News on January 15 if there had been any contacts between the Trump campaign and the Kremlin, he answered: “Of course not. Why would there be any contacts?” Great quest ion, Mr. V ice President. Look, there’s a great deal we don’t know, but Russian interference in our election is potentially a bigger scandal than Watergate ever was. Watergate didn’t change an election’s result—President Richard Nixon would have won anyway in 1972—while the 2016 election was close enough that Russian interference might have tipped the balance. We don’t know whether the Rus-

sians had domestic help in their effort to steal the US election, but here are a few dots that are begging to be connected: First, the American intelligence community agrees that the Kremlin interfered during the campaign in an attempt to help Donald J. Trump. This isn’t a single agency’s conclusion but reportedly a “strong consensus” among the Central Intelligence Agency, the Federal Bureau of Investigation and the director of national intelligence. Second, the dossier prepared by a former MI6 Russia expert outlines collusion between the Trump campaign and Russia. CNN reports that American intelligence has communications intercepts corroborating elements of the dossier, and the latest revelation of repeated and constant contacts between the Kremlin and the Trump campaign give additional weight to the dossier’s allegations— although it’s also important to note that officials told The Times that they had seen no evidence of such cooperation in election manipulation.

Third, Trump has been mystifyingly friendly toward Russia and President Vladimir Putin. As Jeffrey H. Smith, a former general counsel to the CIA, puts it: “The bigger issue here is why Trump and people around him take such a radically different view of Russia than has been the case for decades. We don’t know the answer to that.” Fourth, Flynn, before taking office, discussed Obama administration sanctions on Russia with the Russian ambassador. Flynn has now resigned, but he was steeped in the principle of a chain of command; I doubt he made these calls completely on his own. Daniel Benjamin, a former counterterrorism coordinator at the State Department who has known Flynn for years, says it would have been out of character for Flynn to do so. So who told Flynn to make these calls? Steve Bannon? Trump himself? We’re back to our question: What did the president know, and when did he know it? The White House hasn’t responded to my inquiries, and Trump lashes out wildly at “the fake news media” without answering questions. He reminds me of Nixon, who in 1974 said Watergate “would have been a blip” if it weren’t for journalists “who hate my guts.” Soon afterward, Nixon resigned. Trump supporters say the real scandal here is leaks that make the administration look bad. A bit hypocritical? It’s dizzying to see a president who celebrated the hacking of his rival’s campaign e-mails suddenly evince alarm about leaks.

Sure, leaks are always a concern, but they pale beside the larger issues of the integrity of our leaders and our elections. Published reports have quoted people in the intelligence community as fearing that information given to the White House will end up in Russian hands, even that the “Kremlin has ears” in the White House Situation Room. I referred to Trump last year as “the Russian poodle,” and we’ve known for years of Trump’s financial ties to Russia, with his son Donald Jr. saying in 2008, “We see a lot of money pouring in from Russia.” It’s all the more important now that Trump release his tax returns so that we can understand any financial leverage Russia has over him. Yet, the same Republicans who oversaw eight investigations of Benghazi shrug at far greater concerns involving Trump and Russia. “I’m just appalled at how little people seem to care about the fact that Russians interfered in our presidential election, clearly, unequivocally, on the part of one candidate,” Michael McFaul, a former ambassador to Russia, told me. “What’s more important than that?” To which I add: Only one thing could be more important—if the Russians had help from within the US. As I said, there’s a great deal we don’t know. But we urgently need a bipartisan investigation, ideally an independent panel modeled on the 9/11 Commission. It must address what is now the central question: “What did the president know, and when did he know it?”


Opinion BusinessMirror

opinion@businessmirror.com.ph

Tax reform: A make-or-break policy

In awe of Japan’s hidden Christians Tito Genova Valiente

annotations

Ser Percival K. Peña-Reyes and Justin Jerome G. Valle

EAGLE WATCH

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uild, Build, Build” is a new development mantra signifying the largest infrastructure push in Philippine history to propel economic growth in the next five to six years. Among the key investments that the Philippine government will make are big-ticket infrastructure projects, specifically roads and bridges, mass urban-transport systems and alternative green city solutions. These are envisioned to solve the problems attributed to traffic congestion, inadequate mass-transport facilities, air pollution and lack of green, healthy community spaces.

Nevertheless, in a world of scarce resources, there is no such thing as a free lunch, which simply means that there is a cost to bear for every benefit one enjoys. “Build, Build, Build” is no exception to this rule, so the importance of tax reform comes to the fore, as it will largely contribute to the funding of these infrastructure plans. This column attempts to provide a condensed explanation of tax reform for everyone’s benefit. For starters, one must consider the government, which, like any other productive unit in society, needs to raise revenues in order to spend. Government spending typically encompasses operating expenses, basic services provision, infrastructure investment and other items. Revenues, in turn, are raised from various sources, notably taxes from firms and individuals. If government collection exceeds spending, there is a budget surplus. If government spending exceeds its collection, there is a budget deficit. If “Build, Build, Build” were to figure prominently on the expenditure side, while no compensating measures were taken on the revenue side, there would likely be a budget deficit that could reach about 3 percent of total economic output for 2017 (approximately P478.1 billion). So, how could the budget deficit be managed? One way is to decrease government spending, which might not be a wise decision, because it could decrease aggregate spending and slow down economic growth. Another way is to borrow money, whose potential drawbacks are higher interest rates and lower private investment—a so-called crowding-out effect. A more innovative approach is the ongoing (and long overdue) comprehensive review of the tax system, known as Tax Reform for Acceleration and Inclusion (TRAIN). It aims to institute progressive tax reform and more effective tax collection, which would require taxes to be indexed to inflation. As our Prof. Dr. Cielito Habito explains, progressivity means that the higher one’s income is, the larger the percentage of that income should be paid in taxes. This is based on the notion of vertical equity, which means that those with a higher capacity to pay should be compelled to pay more, in both absolute and proportionate terms. More effective tax collection means that revenue agencies, most

prominently the Bureau of Internal Revenue and the Bureau of Customs, should collect as much of what is due the government as tax laws provide. Tax compliance should increase, or equivalently, tax evasion and tax avoidance should be curbed. Indexing taxes to inflation has two aspects. One aspect relates to the periodic review of income-tax brackets to inflation so that an ordinary income earner will not be penalized with higher tax rates as nominal income goes up with inflation, even if actual purchasing power remains the same (or even declines). Another aspect relates to the review of certain taxes, fees and charges—particularly those set at an absolute value rather than as a percentage—to ensure that government revenues from these sources will not be substantially eroded over time. Simply put, tax reform is a delicate balancing act where the government will be giving with its right hand while taking with its left hand, so to speak, in order to push economic growth even further (acceleration) by putting more money in the hands of more people who are also likely to spend more (inclusion). A critical success indicator is the tax effort ratio (tax revenues in proportion to total output), as it is believed to be a reliable predictor of economic growth. Currently, the Philippines has a lower tax effort than most of its neighbors, and yet, it has higher tax rates. This observation points to much leakage in the tax system, which the ongoing tax reform would presumably address. So, what would likely happen if “Build, Build, Build” were to push through, sans tax reform? There could be a reversal of the current good fiscal condition, since pursuing an ambitious infrastructure plan without the necessary compensating reforms would lead to huge fiscal deficits. Investments could suffer, and so would economic growth. Moreover, with global uncertainty facing business process outsourcing revenues and overseas Filipino workers remittances, the Philippines must undergo an internal transformation to unleash its growth potential. This is why tax reform is a make-or-break policy. Ser Percival K. Peña-Reyes and Justin Jerome G. Valle are graduate students at the Ateneo de Manila University Economics Department.

Stop dithering over Greece

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s Europe heading back to financial mayhem? Bank of Greece Governor Yannis Stournaras warned this week that it might be. Any further delay in reaching agreement between Greece and its creditors, he said, risked a new recession and a fresh crisis of confidence across the euro zone. Maybe that’s a little alarmist— but he’s right about one thing. This ridiculous saga has dragged on long enough. Greece’s current bailout program (its third) was understood to

be flawed from the start. It failed to recognize that Greece’s debts were unpayable, and it imposed long-term fiscal demands too severe to allow strong and sustainable growth. It did provide some additional debt relief—but the aim was not to solve the problem once and for all, only to delay the inevitable. Once again, the inevitable is bearing down on Greece and its European Union partners. The new deadline is July, when more than €7 billion of debt repayments fall due. Without further sup-

Friday, February 17, 2017 A11

Lord, why are you silent? Why are you always silent? —Silence by Shusaku Endo

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here is a film that should disturb us. Directed by Martin Scorsese, it is called Silence, and is based on the novel of the same title written by Japanese writer Shusaku Endo. The story follows the life of a Portuguese Jesuit who travels from Macau to southern Japan in search of their mentor, also a Jesuit. Throughout the novel, the priest asks, amid the sufferings undergone by the Christians, why God has allowed all this. The “Kakure Kirishitan” as they were called, are at the core of Endo’s masterpiece on faith and its loss, on despair and the overflowing hope in times that did not allow anyone to think of life after faith. In the novel and in the film, one can attribute silence to the Christians who retained their faith even during the era of persecution. I am one of those who hear the silence in the novel as emanating from the heart of the Christians who found ways to hide the most material of the representations of their belief in their God. Rosaries were not thrown away but kept sacred somewhere; pictures of Jesus were tucked or embedded among secular photos of flowers, mountains and other objects. The connection of the early Japanese Christians to sacred images and objects was intense and unusual. This explains, in part, the practice of the Japanese shogunate to order the believers to step on images of Jesus Christ or Virgin Mary order to prove that one was not a

Christian. Called “fumie” (literally, images) to step on (fumi), these images were so loved and venerated that many Christians did not step on them, even as they knew they would be tortured and eventually killed. I could not comprehend how the Japanese could hold on to their faith given how flippant and childish the test for their faith was. There are scholars who see, in fact, in the

fumie the Christian God’s love for His believers. This God would always understand. I would understand this hardiness and unique faith of the Japanese some years back. It was in the fall of 2008 that I, through the invitation from my Japanese brother-in-law, Sadahito Tanaka, traveled to Nagasaki. That year was the beatification of the so-called 188 Martyrs of Japan. I arrived in Nagasaki the morning of the 23rd of November. It was the day before the event. In the city of Nagasaki, I decided to wear my huge ID, identifying me as a Catholic, a mark that would had been dangerous in the 17th century in Japan. The city of Nagasaki, however, had earlier announced that pilgrims could ride for free any kind of transportation in the city. On the eve of the beatification, the television and radio issued a weather report about a rainy 24th of November. The announcement advised everyone to buy raincoats, as no umbrellas would be allowed in the soccer stadium, for they would

obstruct viewing of the ceremony. The next day, there were no umbrellas among the huge crowd. My fear that Christians would be shamed if the stadium was not filled was also put to rest. The stadium was filled to overflowing. At the Offertory part of the Mass, a long procession of people walked solemnly to the altar. Each person was carrying an urn, which bore soil from the respective hometown of the 188 Martyrs. Immediately after the blessing, a huge canvass unfurled behind the altar. On it were the images of the 188 Japanese who were tortured and killed for believing in a different God. The choir started to sing. A multitude of doves was released. Then bells started to ring. By this time, the rains had stopped. I saw upturned faces, tears streaming quietly down their cheeks. The others were all bowed down. In the silence, you could hear the prayers that were said in secret hundreds of years in the mountains, forests and isolated islands of Japan. E-mail: titovaliente@yahoo.com.

Call for prayer and donations to our ‘kababayan’ in Tondo, Manila, and Surigao del Norte

Based on the data of the Bureau of Fire Protection (BFP), the fire that started at 9 p.m. on February 7 reached Task Force Delta, as personnel had a difficult time navigating through narrow streets. At least 3,000 families were left homeless after the 10-hour fire. Three days later, on February 10, a strong earthquake shook the island of Mindanao, affecting a total of 1,034 families, or 5,170 persons, from five municipalities in the province of Surigao del Norte, according to the National Disaster Risk Reduction and Management Council (NDRRMC) on Sunday.

The Catholic Church mounted a relief operation to respond to the basic needs of the victims of the two calamities. For instance, Caritas Manila, the social development ministry of the Archdiocese of Manila through its program Caritas Damayan, released 1,000 relief goods containing food and water, clothes and hygiene kits for the fire affected families in Tondo. Also, the Minor Basilica of the Black Nazarene (Quiapo Church) released 200 relief packs and 500 packed meals. The Parishes of San Agustin in Intramuros, Manila, and Our Lady of Peace and Good Voyage in Delpan,

Tondo, Manila, have also set up soup kitchens for the fire victims. Meanwhile, the Catholic Bishops’ Conference of the Philippines Episcopal Commission on Health Care will conduct a psychosocial support and Water Sanitation and Hygiene (WASH) program for the victims of the earthquake in Mindanao. As we continue with the relief operations to help alleviate the sufferings of our kababayan, we are once again asking for prayers for Divine protection and to extend our help through our donations in cash and in kind. Donations can be made online via http://ushare.unionbankph.com/ caritas/ or by bank deposit: n Banco de Oro — Sav ings Account: 5600-45905 n Bank of the Philippine Islands —Savings Account: 3063-5357-01 n Metrobank-Savings Account: 175-3-17506954-3 For dollar accounts: n Bank of the Philippine Islands —Savings Account 3064-0033-55 Swift Code—BOPIPHMM n Philippine National Bank— Savings Account 10-856-660002-5 Swift Code—PNBMPHMM Donations can also be made via

port from creditors, that’s unlikely to be payable. Recently the yield on one of the bonds in question surged to more than 13 percent on fears that another new patch wouldn’t be forthcoming. Most likely, as usual, a deal of sorts will be done—but it’s hard to see whose interests are served by this perpetual cycle of crisis, confusion and short-term fix. The latest disagreement is unusually complicated because it’s not just between Greece and its creditors. The creditors—EU

governments on one side and the International Monetary Fund (IMF) on the other—have fallen out, too. The IMF has been insisting that Greece’s future budget target should be reduced from a surplus of 3.5 percent of output to a stilldemanding 1.5 percent, and that the debt should be written down to a sustainable level. EU governments are against any further debt forgiveness, reckoning that their voters won’t accept it, and want to stick with the tougher (albeit delusional) fiscal commitment. For

good measure, Greece is quarreling with the IMF over its insistence on pension reforms, which are especially challenging politically. Perfecting the latest impasse, Germany’s government says any deal requires IMF participation. It would have been better, and certainly simpler, if the IMF had never gotten involved. The EU is not a cash-strapped developing country, after all; it has ample resources of its own to deal with the problem. But having insisted on IMF participation as a way of

Rev. Fr. Antonio Cecilio T. Pascual

SERVANT LEADER

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E are challenged as a Church and as a nation to come together and be in solidarity with the thousands of our countrymen were displaced by the fire that hit Parola Compound in Tondo, Manila, and due to the 6.7-magnitude earthquake that hit Surigao del Norte.

Cebuana Lhuillier (free of charge) or dropped off at Caritas Manila office: 2002 Jesus Street, Pandacan, Manila, or at Radio Veritas in West Ave. corner Edsa, Quezon City. For proper acknowledgment of your donations, kindly fax copy of deposit slip to 563-9306 or e-mail a scanned copy to cm@caritasmanila. org.ph or caritas_manila@yahoo.com. Please indicate your name and complete address. Caritas Damayan is one of the programs of Caritas Manila, the social development ministry of the Archdiocese of Manila. Through its Disaster Risk Reduction and Management Program, Caritas Manila has put in place a disaster-management program that allows for quick-response relief operation and effective crisis intervention. Thank you and may God bless your generosity.  

deflecting their own responsibility, EU governments need to accept its analysis. A gentler fiscal regime combined with sufficient debt relief to make Greece’s finances sustainable will, indeed, pose a political challenge for some EU governments. But if they fail to rise to this test, Greece will continue to suffer needlessly, and the recurring threat of financial crisis will stand as proof of the EU’s inability to master its own affairs. In the longer term, that hardly advances Europe’s prospects. Bloomberg View

To know more about Caritas Manila, visit www. caritasmanila.org.ph. For your donations, please call our DonorCare lines 563-9311, 564-0205, 0999-7943455, 0905-4285001 and 0929-8343857. Make it a habit to listen to Radio Veritas 846 in the AM band, or through live streaming at www.veritas846.ph. For comments, e-mail veritas846pr@ gmail.com.


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Conversion of closed mines into ecotourism sites eyed By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

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HE Duterte administration has at least P80 million in funds to develop potential ecotourism sites and help support communities affected by the closure of select mining areas. This was disclosed as Tourism Secretary Wanda Corazon T. Teo said she is ready to sit down with Environment Secretary Regina Paz L. Lopez on potential ecotourism areas. In a text message to the BusinessMirror, Teo said the Tourism Infrastructure and Enterprise Zone Authority (Tieza) can develop closed mining areas into ecotourism sites. “We are actually talking of ecotourism so we can help communities,” she said. The Department of Tourism (DOT) secretary chairs Tieza, an attached agency formerly known as the Philippine Tourism Authority. Asked if exploratory talks have

already been held with Lopez regarding potential ecotourism sites, Teo said, “Not yet. [But] I will sit down with her on this.” Lopez recently announced the completion of a mining audit by her department, and said she was determined to close down several mines that have violated environmental laws and those in watershed areas. Watersheds help protect the supply of drinking water of local communities, as well as irrigation water for farms. She added that the local communities in the closed mining areas will earn more if their sites are devoted to ecotourism activities. Tiez a COO Gu i l ler A sido explained that “part of our mandate is to develop ecotourism projects. And we have identified this effort on ecotourism as a major initiative for 2017”. He added the agency has a budget to develop ecotourism sites: “It’s 5 percent of travel-tax collections; that’s about P80 million. That’s an

ASIDO: “That’s about P80 million. That’s an annual budget that we would like to work on with the DENR and DOT. And with tourism’s multiplier effect, it will really help [the local communities that will be affected by the mining closures].”

annual budget that we would like to work on with the DENR [Department of Environmental and Natural Resources] and DOT. And with tourism’s multiplier effect, it will really help [the local communities that will be affected by the mining closures].” A recent study by the World Travel and Tourism Council (WTTC) showed that travel and tourism directly supported 1.26 million jobs or 3.3 percent of total employment in the Philippines in 2015. “It is expected to rise by 3.1 percent in 2016 and rise by 2.4 per annum to 1.65 million jobs

[3.3 percent of total employment] in 2026,” the WTTC added. In 2015 travel and tourism’s total contribution to employment, “including jobs indirectly supported by the industry”, was 10.3 percent of total employment, or roughly 4 million jobs. “This is expected to rise by 3.5 percent in 2016 to 4,145,500 jobs and rise by 2.5 per annum to 5,288,000 jobs in 2026 [10.6 percent of total],” it also said. In contrast, data from the Mining and Geosciences Bureau (MGB) of the DENR indicated that mining and quarrying jobs accounted for only 0.6 percent of total employed persons in the Philippines, or 236,000. According to the Barcelona Fields Studies Center, “Tourism not only creates jobs in the tertiary sector, it also encourages growth in the primary and secondary sectors of industry. This is known as the multiplier effect, which, in its simplest form, is how many times money spent by a tourist, circulates

through a country’s economy. “Money spent in a hotel helps to create jobs directly in the hotel, but it also creates jobs indirectly elsewhere in the economy. The hotel, for example, has to buy food from local farmers, who may spend some of this money on fertilizer or clothes. The demand for local products increases as tourists often buy souvenirs, which increases secondary employment.” The DOT is targeting a 13.2-percent share in total employment for tourism in 2017. “And the number of poor beneficiaries [Filipinos living below the poverty line] as target is 471,631,” the Tieza chief said. While some of the mining areas to be closed are watershed areas, Tieza still believes it is still feasible to turn them into ecotourism sites. “It’s a matter of agreeing with the DENR on what is the proper framework and guideline to be observed in identifying the appropriate project. There are international standards, as well, [that can be followed in

Even NAPC could not believe govt’s poverty-incidence data

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By Cai U. Ordinario

@cuo_bm

he National Anti-Poverty Commission (NAPC) expressed its disappointment over the quality of government data, citing for instance the big drop in poverty incidence in just a sixmonth period. It noted that accurate data is crucial in the government’s efforts to lift an estimated 6 million Filipinos out of poverty by 2022.

In a briefing in Malacañang on Thursday, NAPC Secretary Liza L. Maza said it was a surprise how poverty data decreased to 21.6 percent in full-year 2015, from the initial estimate of 26.3 percent in the first six months of that year.  In March 2016 the Philippine Statistic Authority (PSA) released its data saying firs-semester poverty incidence reached 26.3 percent. But in October 2016, the statistics agency said 2016 fullyear poverty incidence decreased to 21.6 percent. “I think it is important to note that when we came in, we have a poverty incidence of about 26 percent and then it suddenly dropped to 21 percent. We issued a statement stating my disbelief on the figure, so I mean that has to be settled; what is the poverty incidence of the Philippines today?” Maza said.  Determining the exact level of poverty incidence in the country is the first step toward reducing poverty to 14 percent by the end of the Duterte administration. Maza, however, said she remains confident that addressing the 10 basic needs of Filipinos, primarily through land reform, could lift 9 million to 15 million from poverty. This, she clarified, is based on the 26 percent initially estimated by the PSA.  “ I t h i n k l a nd reform is very vital in solving poverty in our country. We will never escape poverty if we will not undertake true agrarian reform,” Maza said. T h is cou ld be h igher t h a n t he government’s own targets. According

21.6%

The PHL’s poverty incidence at end-2015, according to the PSA to National Economic and Development Authority (Neda) Undersecretary Rosemarie G. Edillon, the Philippine Development Plan (PDP) target is based on the latest poverty data. Based on the full-year 2015 data of the PSA, there were 21.93 million poor Filipinos nationwide. This decreased from the 23.75million estimate in 2012.  “The reduction [of poverty incidence by population] to 14 percent means about 6 million will be lifted from poverty,” Edillon told BusinessMirror on Thursday.  In terms of efforts to reduce poverty, Maza said the NAPC is focusing on efforts to improve Filipinos’ access to the 10 basic needs and these are food and l a nd refor m, w ater, she lter, health, education, work, social protection, healthy environment, peace and participation. She added that pushing for the resumption of the government’s peace talks with the Communist Party of the Philippines-National Democratic Front-New People’s Army (NPA) would help a lot.    Defense Secretary Delfin N. Lorenzana earlier said the President has approved an all-out war against the NPA who extort money from residents in barangays and businessmen.  Lorenzana said the government considers the NPA as terrorists that were no different from the Abu Sayyaf that kidnap individuals with the goal of extorting money from their kin or the government.   “We know that the root cause of [the] armed conflict is also the root cause of poverty. I think it is good to resume the peace talks, so that we can seriously talk about this and reach an agreement on social and economic reforms, like, for example, land reform,” Maza said.  Maza added these are better ways to address poverty, and not through programs, such as the Conditional Cash-Transfer (CCT) Program. The NAPC head said the

Department of Social Welfare and Development (DSW D) is already thinking of removing the CCT. She said that, rather than continuing the CCT, the government would do well to invest its resources on livelihood programs that may have greater impact on the lives of the poor.  “By its very concept, the CCT cannot address poverty. I don’t think it will ever, ever address poverty,” Maza said.  Edillon, for her part, said that while the CCT will not solve the current state of poverty, it remains a “robust solution” that can create long-term rewards for the country.  The World Bank has expressed its support for the CCT as an effective social safety net, but urged that it be implemented alongside efforts to undertake rural-infrastructure projects, electrification and universal access to quality education.  Since the program’s inception, the number of CCT partner-beneficiaries increased from 340,000 to more than 4.4 million at the end of 2015—making it the fourth-largest CCT after programs in India, Brazil and Mexico. “CCT will not solve current povert y [ levels]. It w il l take time and there should be other i nter vent ions to i mprove growth prospects. But it is a robust solution,” Edillon said.  The CCT extends a health grant amounting to P500 mont h ly year-round and an education g ra nt of P30 0 per c h i ld for 10 months each year to each participating household. To receive these cash grants, preg n a nt women mu st ava i l themselves of prenatal- and postnatal care, and be attended during childbirth by a trained professional. Parents or guardians must attend the family-development sessions, which include topics on responsible parenting, health and nutrition.  Other conditions include children aged 0 to 5 must receive regular preventive health checkups and vaccines; those aged 6 to 14 must receive deworming pills twice a year; and children between 3 and 18 must enroll in school, and maintain an attendance of at least 85 percent of class days every month.

developing watershed areas into ecotourism sites],” Asido pointed out. The WTTC study also showed that travel and tourism directly contributed about P570 billion to the Philippine economy as expressed in the GDP in 2015. This was equivalent to 4.2 percent of the GDP. The same study showed that the total contribution of travel and tourism to the country’s GDP was P1.43 trillion in 2015, or 10.6 percent of GDP. “It is forecast to rise by 6.6 percent in 2016, and to rise by 5.4 percent per annum to P2,590 billion [11.2 percent of GDP] in 2026.” The mining industry, on the other hand, contributed only 0.6 percent of the GDP in 2015, with its gross value added at current prices estimated at some P81 billion. WTTC is an international organization of travel industry executives promoting travel and tourism worldwide. It regularly issues reports on the impact of tourism on the global economy, as well as the economies of different countries.

Senators eye Amla coverage of casinos By Butch Fernandez @butchfBM

S

ENATORS looking into the casino operator Jack Lam-Bureau of Immigration (BI) P50-million bribery scandal traced the money trail to Lam’s casino partners, giving impetus to senators’ initiative to amend the Anti-Money Laundering Act (Amla) and include casinos on the law’s list of covered institutions. Sen. Francis G. Escudero suggested its inclusion in Amla after grilling key personalities linked to the case involving former Immigration Bureau officials Al Argosino and Michael Robles, who were reported to have “extorted” P50 million from Lam to release hundreds of Chinese dealers nabbed in Pampanga and Cagayan free-port casinos for working without permits. Under questioning by the investigating committee chairman, Sen. Richard J. Gordon, Lam’s associate Alex Yu admitted Lam asked him to get the money from Lam’s casino partners to secure the release of Chinese casino workers arrested during the raid, led by the two immigration commissioners, who claimed they took the casino money as part of an entrapment operation. Yu told senators that following Lam’s instructions, “we borrowed the money from Lam’s [casino] business partners” and brought it to the parking lot of the house of Philippine Amusement and Gaming Corp. President Alfredo Lim to consolidate the money before it was delivered to the two BI officers purportedly to bail out the Chinese workers. Testifying under oath, former policeman Wenceslao Sombero confirmed to Senate investigators that Argosino allegedly first demanded P100 million to free the 1,800 Chinese workers in Lam’s casinos of which only 800 have working visas. Sombero said he told the BI officer he will convey this to Jack Lam, admitting to Senate probers that he was “shocked” at the amount initially demanded by Argosino purportedly for “goodwill”. Sombero added that Lam wanted to help the arrested Chinese casino workers but did not want to advance the money and instead called his associates and business partners who agreed to put up P50-million fund for “bail money”. But Sombero insisted under questioning by Gordon that he was not involved in getting the bribe money from Lam’s casino operators. “But I was instructed by Alex Yu to get two people [identified only as Martin and Garfield] to pick up the money from the City of Dreams Casino,” Sombero testified, after which the money was taken from three casino partners of Lam and delivered to the two mmigration officials.

Businessmirror february 17, 2017  
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