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Thursday, February 23, 2017 Vol. 12 No. 134
₧1.22T needed to fund Duterte’s tourism plan By Ma. Stella F. Arnaldo
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@akosistellaBM Special to the BusinessMirror
HE Duterte administration is working to attract at least P414.14 billion in privatesector investments in the country’s tourism destinations to boost visitor arrivals to 12 million by 2022.
In a news briefing by the Tourism Infrastructure and Enterprise Zone Authority (Tieza), COO Guiller B. Asido said that, according to the National Tourism Devel-
opment Plan (NTDP) of 2016-2022, these private-sector investments will “cover needs of travelers, such as accommodation, transport units [and] aircraft acquisition”. He
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the broader look
The required private-sector investments under the 20162022 NTDP
noted, for instance, that there is an estimated shortfall in the number of hotel rooms at 120,000. Under the NTDP, the Duterte administration is also hoping to attract 89.2 million domestic tourists and generate revenue of some P4 trillion from domestic and foreign travelers by 2022. It also targets the employment of See “Tourism,” A2
‘Breaking hearts’ legally costly for many Filipinos By Jovee Marie N. dela Cruz @joveemarie
Part Four
Is responsible mining possible? »A6-A7
Challenges of the 4th Industrial Revolution Zimmytws | Dreamstime.com
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₧414.14B
BMReports
ONE other than the highest law of the land—the 1987 Constitution—recognizes the Filipino family as the foundation of the State. It also mandates the government to protect marriage as an inviolable social institution. However, while some of the country’s lawmakers believe that most marriages are supposed to be solemnized in heaven, there are also solons who accept the reality that there are many marriages that plummet into hell—in irremediable breakdown, spousal abuse, marital infidelity and psychological incapacity, among others, which bedevil marriages. In the 17th Congress, there are bills easing the annulment or separation process, as well as introducing absolute divorce in the country. But all these measures are still under debate at the committee level in the lower chamber. In House Bill 1062, Rep. Robert Ace S. Barbers of the Second District
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Rene E. Ofreneo of Surigao del Norte said a marriage may also be annulled if the parties have been separated for at least five years. Barbers said his proposal seeks to acknowledge a factual and existing marital condition that plague not a few unions. “Without dwelling on the deep-
er reasons behind the separation, this bill offers a remedy without opening Pandora’s box or a can of worms that are usually precedent during annulment proceedings,” he said.
Adjustments
ACCORDING to Barbers, five years
of actual separation would make the couples estranged enough that a reconciliation is nil. “Besides, five years should have made the parties adjust and move on with their individual lives without further straining the relationship. This, they should be Continued on A2
EO 190 extension, 2 other tariff measures OK’d
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he President Duterte-chaired National Economic and Development Authority (Neda) Board has approved three tariffrelated measures meant to facilitate cheaper entry of inputs for the manufacturing and agriculture sectors. In a text message to reporters on Monday evening, Trade Secretary Ramon M. Lopez said those approved were the comprehensive tariff-reform program, the World Trade Organization (WTO) Information Technology Agreement (ITA) II and the extension of Executive Order 190, series of 2015, governing the quantitative restriction on rice and other
PESO exchange rates n US 50.3050
agricultural products. “We thank the President and Cabinet secretaries in Neda Board for supporting and approving last night our recommendation to enhance tariff-reform program and pass our three recommended executive orders. This will lead to lower cost of inputs for manufacturers, like mechanically deboned meat [MDM] for canned meats, agriculture feedmills for farmers, infant formula for better infant health, steel rails for MRTs [Metro Rail Transit] etc., also inputs to IT [information technology] and computers as part of the Information Technology See “EO 190,” A2
LOPEZ: “This will lead to lower cost of inputs for manufacturers, like mechanically deboned meat for canned meats, agriculture feedmills for farmers, infant formula for better infant health, steel rails for MRTs, etc., also inputs to IT and computers as part of the Information Technology Agreement.”
laborem exercens
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he unfinished Philippine Development Plan 20172022 has a n u nderde veloped Chapter Two, titled “An Overview of Prospects and Other Developments that Could Affect the Philippines’ Socioeconomic and Institutional Development”. Are our economic planners now taking a closer look at what is happening in the real world, and are prepared to abandon the old and simplistic export-or-perish and open-up-or-shrink economicdevelopment formulas? Yes, the country needs to do serious stock-taking by rigorously assessing global and national developments. The protectionist America First policy initiatives of the Trump administration and the Brexit phenomenon that has shaken Europe to the core should clearly be on top of the National Economic and Development Authority list, for both these developments have serious impli-
cations on the Philippine trade and industrial policies and the situation of the country’s overseas Filipino workers. The must-assess list should also include two more trade-related issues: the failure of the World Trade Organization’s Doha Development Agenda (DDA) to take off after one and a half decades of fruitless global trade talks; and the sudden collapse of the much-ballyhooed Trans-Pacific Partnership (TPP) agreement. Economic technocrats of the past administrations pinned so much hope in the DDA and the TPP as possible platforms for Philippine trade and economic expansion. However, one major development that both those in the government and civil society should not ignore are the changes in the market and the workplace that are continuously being churned out by what the superelite in the Davos annual summit call as the “Fourth Industrial Revolution”. Continuned on” A2
n japan 0.4428 n UK 62.7454 n HK 6.4817 n CHINA 7.3107 n singapore 35.4286 n australia 38.6393 n EU 53.0567 n SAUDI arabia 13.4147
Source: BSP (22 February 2017 )
A2 Thursday, February 23, 2017
BMReports BusinessMirror
www.businessmirror.com.ph
‘Breaking hearts’ legally costly for many Filipinos Challenges of the 4th Continued from A1
granted the best relief that they can have, annulment. This way, they can go on separate ways peacefully, as no other reason is needed to justify the annulment this avoid opening old wounds,” he added. HB 1062 seeks to amend Title 1 Chapter 3 of the Executive Order 209, or the Family Code of the Philippines. Also, Rep. Gwendolyn Garcia of Cebu and Rep. Yedda Marie Romualdez in their HB 1629 and HB 3705, respectively, both seeking to legalize church annulment or dissolution of certain marriages. In her proposal, Garcia said, although marriage is an institution that the State is interested in, it is also a religious act. In fact, she said for the predominant Catholic of the country, it is a sacrament, and marriage is not considered valid insofar as Catholics are concerned, unless celebrated in accordance with the solemnities of the church. “Marriage, therefore, is an element in the exercise of religious freedom. So logically if the marriage insofar as the contracting parties are concerned, is validated by the laws of the Church, then it necessarily follows that by the same laws, such marriage can also be invalidated or annulled,” she said.
Solemnity
GARCIA added that the law recognizes as valid a marriage solemnized in accordance with the laws of the Church, saying the State respects the laws of the church. “To give full force and effect to this principle of State recognizing the law of the church, it is but
EO 190. . .
Continued from A1
Agreement,” Lopez said in the message. The expansion of the WTO’s deal, known as the ITA II, was agreed upon during the WTO’s Ministerial Conference in Nairobi. The ITA II eliminated tariffs on an additional 201 IT goods, with global trade valued at $1.3 trillion. The Philippines, as one of the 53 signatories to the WTO agreement,
Tourism. . .
Continued from A1
6.5 million people, which will raise the share of tourism jobs to 14.4 percent of total employment, and reach 702,000 poor beneficiaries. Asido added the total publicsector outlay needed to develop tourism destinations and support the growth in tourist arrivals is P810 billion from 2016-2022.
proper, if not logical, that the state must also respect the annulment of a marriage that results from application of church laws. This holds true to all other established churches or religions,” he added. Under the Garcia’s bill, whenever a marriage, duly and legally solemnized by a priest, minister, imam, rabbi, or presiding elder or an established church or religion in the Philippines, is subsequently annulled or dissolved in a final judgement or decree by said church or religion, in accordance with the canons or precepts of the latter, the said annulment or dissolution shall be recognized and given full force and effect in the Philippines. It also added the final judgment or decree of annulment or dissolution shall be recorded in the appropriate civil registry within 30 days from issuance of said final judgment or decree of annulment or dissolution In HB 3705, Romualdez, meanwhile, said in the Philippines marriage is viewed as a sacrament and can be validly contracted only under the approved rites of the Church. “On the other hand, persons married under the laws of the Church, must likewise be recognized as married under the laws of the State,” she said. “A marriage solemnized by the Church, therefore, should have not only canonical but civil effects, as well. Priest, pastors, imams and rabbis who solemnize granted by the State. Therefore, if marriage can be legitimately contracted under the laws of the Church, then it follows that under the same laws, such marriage can also be nullified or annulled,” Romualdez added.
Streamlining
is obligated to submit modified tariff schedules and commitments to the multilateral trading body. EO 190, signed by former President Benigno S. Aquino III in 2015, on the other hand, focuses on modifying the MFN rates of duty on select agricultural products under the Tariff and Customs Code of the Philippines. Under EO 190, the Philippines will restore its tariff on MDM to the original rate of 40 percent on July 1 this year. The World Trade Orga-
nization (WTO) has allowed the Philippines to implement the quantitative restriction on rice until June 30 of this year. As a concession, Manila had to lower the tariff on MDM to 5 percen—from 40 percen—for the duration of the extension. However, as the QR restriction is seen to expire soon, the tariff rate on MDM will also be restored without a new order from Malacañang. In a recent development, Agriculture Secretary Emmanuel F. Piñol also said the Committee
on Tariff Related Matters has decided to formally request the WTO to give the Philippine government more time to amend R A 8178, which allowed the QR on rice. Under WTO rules, the rice QR would have to be replaced by tariffs upon its expiration. Meanwhile, the comprehensive tariff reform, covering 686 tariff lines, will set in motion a scheduled tariff reduction from 2017 to 2022. Lowered rates can range from 0 to 3 percent, Lopez said. Catherine N. Pillas
This will support the construction of vital infrastructure, such as roads, ports and bridges, to improve access to tourism destinations; expand capacity of secondary international airports; and market-competitive tourism destinations, among others. Other government agencies, such as the departments of Public Works and Highways, Transportation, and Tourism, and local government units, etc., are supposed to
fund this public-sector outlay. Thus, the total cost of public and private investments needed to attain the Duterte administration’s tourism goals is P1.22 trillion from 2016 to 2022. The amount is 430 percent higher than the P231.8 billion in public and private investments eyed under the NTDP from 2012 to 2016. Also, under the old NTDP, the Aquino administration targeted foreign visitor arrivals to reach 10 million by 2016.
Of the estimated total public outlay, Tieza is supposed to invest P16 billion from 2017 to 2022, “to support infrastructure, such as access roads and utilities, as well as land acquisition costs in support of the TEZs,” said Asido. At present, the government agency’s flagship TEZs are San Vicente, Pa lawan; R iza l Park Complex in Manila; Mount Samat Shrine in Pilar, Bataan; Bucas Grande in Socorro, Surigao del Norte; and Panglao Bay Premiere (South Palms) in Bohol. It also oversees private TEZs, which include Resorts World Manila in Pasay; Ciudad de Victoria in Bulacan; Queen’s Castle in Cebu; Bravo Golf in Negros Oriental; Hijo Plantation in Tagum, Davao del Norte; and Kingdom Global City in Davao. Tieza Deputy COO Joy Bulauitan, however, clarified that the government agency only “grants and administers the [fiscal and nonfiscal incentives] for these private TEZs. We will not put up the infrastructure for them.” The Bureau of Internal Revenue finally issued Revenue Regulations 7-2016, which extended fiscal and nonfiscal incentives for TEZs, in fulfillment of Republic Act 9353, or the Tourism Act of 2009. In a previous interview, Asido estimated Tieza will be able to generate about P70 billion in investments into economy this year with the grant of fiscal incentives to TEZs. (See “Tax perks to yield P70-B tourism investments— Tieza” in the BusinessMirror, January 15, 2017.)
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ECENTLY, Romualdez said significant reforms in the canonical procedure in marriage nullity cases have been introduced in the Catholic Church by Pope Francis in the document Mitis ludex Dominus lesus (The Lord Jesus, Clement Judge). According to Romualdez, the Apostolic letter Motu propio streamlined many of the steps involved in the nullity process, such as the elimination of an automatic second review by an appellate tribunal; concession to the diocesan bishops in granting the annulment themselves in certain circumstances, such as spousal abuse of when extramarital affairs has occurred and ensuring that the process should be free, except a minimal administrative cost. “Same procedures are also available in other religious denominations subject to their own rules and traditions,” she added. Vatican documents said the Apostolic letter Motu propio seeks to start a reform in the Church’s procedures for determining the nullity of marriage cases. “The Family Code of the Philippines recognizes as valid marriage solemnized under the laws of the Church. If marriages so solemnized are recognized by the State, it is only proper that the very Church that solemnized the marriage should also have the power to rule that attendant infirmity that rendered a marriage null and its effects binding on the State. This is also same to all other established churches and religions,” Romualdez said. Under Romualdez’s bill, whenever a marriage, duly and legally solemnized by a priest, minister,
imam, rabbi or presiding elder of an established church or religion in the Philippines is subsequently annulled or dissolved in a final judgment or decree by the said church or religion, in accordance with the canons and precepts of the latter, the said declaration of nullity, annulment or dissolution shall be recognized and given full force and effect in the Philippines.
Absolute divorce
THE principal author of the reproductive-health law, Rep. Edcel Lagman of Albay said the 17th Congress is the right time for the enactment of a law on absolute divorce, as the Philippines is the only country in the world which has no law on absolute divorce. “It is because of the existence of failed marriages beyond redemption that all countries in the world, except the Philippines, have legislated the grant of divorce in varying liberality and stringency. In fact, it is said that the advent of divorce is contemporaneous with the institution of marriage,” Lagman added. Presently, Lagman said the grounds for legal separation and annulment of marriage provided for in the Family Code of the Philippines have been adopted as among the grounds for absolute divorce. The law said the existing grounds for legal separation are marital abuse, sexual infidelity, attempt against the life of the other, abandonment, de facto separation, conviction for a crime when the sentence is more than six years, contracting a subsequent bigamous marriage, drug addiction or habitual alcoholism and lesbianism or homosexuality.
Industrial Revolution Continued from A1
Why Fourth?
According to economic historians, there are three epochal Industrial Revolutions. The first happened in the 18th and 19th centuries, when the factory system powered by the steam engine and new machines replaced the cottage or home-based production of textiles and various goods in Europe and, subsequently, in America and elsewhere. The revolution was amply celebrated in the 1776 book of Adam Smith, The Wealth of Nations, which described the explosive growth of production under the extended division of labor in a capitalist factor y system. T he book also advanced the thesis that nations prosper because of the “invisible hand ” that unleashes the animal spirits among “free” capitalists as they build factories and trade goods everywhere. The new wealth, however, was appropriated by a few who ignored the rights of the “proletariat” to eight-hour work, unionism and better conditions of work. These rights took two centuries of working-class struggle before they came to be recognized in many countries. The Second Industrial Revolution is dated to have taken place in the late 19th century up to the early decades of the 20th century. This period saw advances in steel making, railway construction, gas exploration and refining, telegraph communication, chemical formulation, electrification and development of the bicycle and automotive. T his period also witnessed the transformation of the factory system into mass-production system involving giant conveyor belts, thousands of workers and the application of the ideas of Frederick Taylor on “scientific management” (alternatively known as the one-best-way approach in business operation). The Third Industrial Revolution is largely based on the In for m at ion Com mu n ic at ion Technolog y (ICT) Revolution. The ICT Revolution supposedly began in the 1950s with the development of digital systems and rapid advances in computing power, which have enabled new ways of generating, processing and sharing information. The ICT Revolution intensified in the last three to four decades with the digitization of the analog system of communication; launching of communication satellites; development of the personal computer and m ic ro pro ce s s or s; e me r ge nce and commercialization of cellular communication; the spread of the Internet; and the endless discover y on the endless uses of ICT in various phases of commerce and aspects of life. These decades, also happened to be decades, too, of the dominance of “ free trade” thinking, alias “Washington Consensus”, in national and global tradepolicy formulation. Today the Fourth Industrial Revolution builds on the advances under the ICT. This is described as the fusion of “cyber-physical systems” providing entirely new capabilities for people and machines. One author asserts the Fourth Industr ial Revolution “represents entirely new ways in which technology becomes embedded within societies and even our human bodies”, as exemplified by the emergence of new “technology breakthroughs”, such as robotics, artificial intelligence, nanotechnology, biotechnology, Internet of Things, 3D printing and autonomous vehicles. The breakthroughs include a host of mind-boggling innovations and discoveries, for example, human organs, such as
liver, are now being duplicated through the magic of 3D printing and the use of new materials, while Google, the search engine firm, has successfully piloted the production of the “autonomous car” sans any driver, which is now being sold in the market. With the huge flow of productivity-enhancing technical innovations and technologies it is able to generate, the Fourth Industrial Revolution clearly provides humanity a historic opportunity to liberate all Earth’s inhabitants from hunger, ignorance and disease. This, unfortunately, is not happening. The revelation by Oxfam International that eight men have wealth equivalent to the collective wealth of 3.6 billion people or half of humanity captures the extent of inequality in the world. Instead of easing, inequality is deepening between and among countries, between and among social classes. In the Philippines the bottom onefourth of the population has remained stuck in the quagmire of poverty since the 1990s, despite the government’s commitment to halve poverty under the old UN Millenium Development Goals for 2000-2015. The bigger challenge, however, is: Will the Philippines be able to post sustainable growth and create more and better jobs as the Fourth Industrial Revolution continues to churn out new technological products and processes? It is a given that the arrival of any new technological product in the workplace has a “disruptive” impact on existing jobs, which often leads to some form of technolog y-trig gered u nemploy ment. In t he pa st, such unemployment is eventually offset by the growth of new investments and jobs in related industries, such as farm mechanization spurring the growth of agri-processing industry. This time, the problem, per study by Martin Ford, author of The Rise of the Robots (2015), job displacement in some industries can be massive and job losses cannot easily be offset. Which is the reason Ford is pushing for a “basic income guarantee” for all citizens regardless of whether they have jobs or not. This is like making the existing Conditional Cash Transfer (CCT) initiated first by the Arroyo administration universal. These two topics—CCT and basic income guarantee— deserve a separate discussion. Meantime, the threat of massive job displacement under the ongoing Fourth Industrial Revolution is real, and should be treated seriously by the Philippines. For example, the two biggest industries at home—electronics assembly and call center/BPO services—are vulnerable, jobs-wise, to the advances in automation. On the other hand, the demand for OFW services in various countries may also weaken (apart from the recent impact of the rising tide of anti-immigrant attitudes in developed countries) due to the rise of robots and DIY (do-it-yourself) technological breakthroughs. The hopes of some economists that more jobs can be created if the Philippines focus on certain value chain phases of the multinational GPNs are now being dashed by the efforts of developed countries to bring back low-cost manufacturing in their home turfs. In short, the world of work under globalization is changing radically under the Fourth Industrial Revolution. Is it not time for the Philippines to reassess, indeed, its overall position globally and at home? Should it not draw up a more balanced program of regional and global integration simultaneous with the scaling up of its domestic agricultural and industrial capacities?
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Journalism getting more dangerous
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OURNALISTS face unprecedented risk as insurgent and criminal groups spread globally, a New York-based media watchdog said. The risks include kidnapping for ransom or political gain, and murder by insurgents who see journalists as surrogates of an enemy too powerful to attack directly, the Committee to Protect Journalists said in a report. Journalists are caught in crossfire or targeted by drug cartels as a warning to other unwelcome reporters, the report said. While technological changes enable more people to engage in acts of journalism, those same changes bring new risks, such as surveillance and tracking, it added. The report said journalists have become increasing targets since the early 2000s, and most notable was the kidnapping and videotaped beheading of Wall Street Journal correspondent Daniel Pearl in Karachi, Pakistan, in 2002. “His death signaled a new era in which violent non-state
actors use journalists as pawns in asymmetrical warfare with foreign powers,” it said. Meanwhile, attacks and threats against journalists in Brazil jumped by 60 percent in 2016, compared to the year before, a report released on Tuesday said. The figure puts Brazil among the 10 most dangerous countries in the world for reporters, warned the Brazilian Association of Radio and Television Networks in a study titled “Violations Against Freedom of Expression”. At least 174 journalists denounced having been the target of a physical attack or threat last year, compared to 116 in 2015, news agency O Globo reported, citing the study. The year 2016 was a year of political turmoil in Brazil, where left-leaning President Dilma Rousseff was impeached by a conservative legislature for alleged fiscal wrongdoing. Most of the violent incidents targeting reporters occurred during clashes between pro-Rousseff supporters and those in favor of impeachment. PNA-Xinhua
Editor: Dionisio L. Pelayo • Thursday, February 23, 2017 A3
Duterte not yet off the hook on Davao executions–CHR
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By Jonathan L. Mayuga
@jonlmayuga
RESIDENT Duterte is not yet off the hook in connection with the killings involving the Davao Death Squad (DDS), the Commission on Human Rights (CHR) said, debunking claims made by Communications Secretary Martin M. Andanar that the human-rights body had already “absolved” the former Davao City mayor.
The existence of the DDS was affirmed by retired Senior Officer 3 Arturo Lascañas, a retired Davao City policeman who admitted to being part of the notorious group at a news conference at the Senate on February 20. Last year Lascañas appeared
during a Senate inquiry on the existence of DDS to investigate the claims of Edgar Matobato on the alleged involvement of Duterte in the extrajudicial killings when he was still city mayor. Andanar, downplaying Lascañas’s statement to the media, said
Duterte was already absolved by the CHR, even though a majority vote in the Senate has cracked wide open the case of extrajudicial killings involving DDS and Duterte anew. “The commission did not clear the former mayor of Davao City of extrajudicial killings and his alleged involvement in the Davao Death Squad,” the CHR said in a statement issued on Tuesday. The CHR said the resolution it issued on June 28, 2012, titled “In re: Extra-Judicial Killings Attributed or Attributable to the so-called Davao Death Squad”, did not contain any portion mentioning that the commission had exonerated Duterte from the killings. The commission said what it stated in its resolution was that the “continuing pattern of killings and the failure to conduct a meaningful investigation of such incidents can be construed as tolerance on the part of the authorities of the crimes hereto described, thereby contributing to the climate of impunity.” Thus, in the same resolution, the
CHR recommended “that the Office of the Ombudsman investigate the possible administrative and criminal liability of Mayor Duterte for his inaction in the face of evidence of numerous killings committed in Davao City and his toleration of the commission of these offenses.” The CHR said it was “clear from the quoted portions of the resolution that deaths have occurred in significant numbers and no investigations were conducted by the local government.” “Deaths continued to occur with impunity during the term of the former mayor. Hence, the commission forwarded its resolution to the Ombudsman. The [Office of the] Ombudsman, based on its recent pronouncements, has resumed its investigation according to news articles,” the comnmission said. It added: “Extrajudicial killings may be committed not only by direct participation but also as a result of the failure of [the] government to investigate and hold people [who did the killings] to account.”
Economy
A4 Thursday, February 23, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon
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NGCP eyes ₧52-billion VisMin SC finally shelves 2009 RFID project power interconnection by 2022 ₧29,894,200 By Joel R. San Juan
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By Manuel T. Cayon
@awimailbox
AVAO CITY—The power interconnection between the Visayas and Mindanao has remained on track, after the National Grid Corp. of the Philippines (NGCP) struck out the Leyte-Surigao transmission line from the probable power-transmission connection points.
This time, it shifted to the western side, specifically the Cebu-Dipolog areas, as probable connection points, NGCP Spokesman Cynthia Alabanza said. The Leyte-Surigao hydrology survey had turned out to be improbable due to “adverse factors”, including unexploded World War II ordnance and sunken warships. The western connection was decided last year after scouting for probable connection points, as the government pursued the interconnection project, initially to relay excess electric supply from Luzon and the Visayas to power-starved Mindanao grid back then, she said. But Mindanao appeared to be heading for an expected big excess of as much as 1,000 megawatts (MW) beginning next year, the Mindanao Development Authority (MinDA) said. A feasibility study has been commissioned for this new con-
1,000 MW The projected excess of electricity supply for Mindanao beginning next year nection prospect, and included a new hydrology profile study on the seabed terrain where the submarine cable would be laid. The shortest timetable to finish the P52-billion interconnection project would be in December 2022, Alabanza said, adding the interconnection distance would cover about 100 kilometers of undersea cable. She could not ascertain yet, however, on whether the NGCP would tap Filipino contractors to undertake the project, saying it would depend on the result of the bidding and the capability of the contractors.
Alabanza was here on Wednesday for a public consultation on the implementation of the Wholesale Electricity Spot Market for Mindanao, the third leg of the road show before the target implementation by June this year. The interconnection project has been started two decades ago, as Mindanao continued to reel on succeeding energy crisis over its high dependence on hydroelectric power and as El Niño began to wreak havoc with its longer cycles and shorter respite from each cycle.
Excess supply
“IT would be a sentimental journey back then, when we were talking about a deep shortage of power supply in Mindanao,” Alabanza said, stressing that the intention of the interconnection project with Leyte as the connection point “was to bring excess power from Luzon and the Visayas to Mindanao.” “But now, we may be expecting mutual and two-way transmission of supply, including from Mindanao to other areas like, including Luzon, probably,” she said. In the same consultation and news briefing, Romeo Montenegro, public affairs chief of the MinDA, said Mindanao would expect supply to be in excess by about 1,000 MW, when the Ayala-owned coal plant in Kauswagan, Lanao del Norte, will go online with the Mindanao grid. The said coal plant alone, he said, has a capacity of 540 MW, with 160 MW expected to be available by the end of this year, he said.
Several areas, like General Santos City and Digos City, were already in excess since two years ago, after new investors established their own bunker fuel-run generating plants, and a solar plant in Digos City. These cities were among the areas that experienced in as much as eight hours of long blackouts during the power crisis periods in the last two decades. The last severe power shortage in 2015 affected even Davao City, which used to have backup sources. Montenegro said the Department of Energy has also received applications for 260 projects to develop renewable-energy projects that would generate 3,000 MW, but these projects may still take a long time to start over technical and documentary requirements. He said, though, that the “competitive” or higher electricity rates here have also attracted investors to Mindanao, “due to the reduction of the cheap hydroelectric power in the profile of the energy mix in the Mindanao grid”. From 90-percent dependency of the Mindanao grid to the hydroelectric-power plants in the Agus River in the Lanao provinces and Pulangui River in Bukidnon, the aging plants have also forced the decline in production capacity that brought it down to only 30-percent composition of the grid. With new plants, mostly ran on coal and bunker fuel, the grid now has an installed capacity of 3,000 MW, with dependable capacity at 2,500 MW. The demand was running at 1,600 MW.
‘Keep ROW clearances of transmission lines free from obstructions’ By Lenie Lectura @llectura
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he National Grid Corp. of the Philippines (NGCP) continues to appeal for the support of the public to keep right-of-way (ROW) clearances free of any and all obstructions. T h i s a f ter a coconut t ree breached the ROW c learance of the Borongan-Quinapondan 69-kilovolt (kV) line, affecting Eastern Samar Electric Cooperative Inc. The incident happened last month. A not her inc ident c ited by NGCP involved a bamboo scaffolding that fell on the OrmocLemon-Tolosa-San Isidro 69-kV line, causing power interruption for customers of five electric cooperatives—the Biliran Electric Cooperative, Leyte V Electric Cooperative (Leyeco V), Leyte III Electric Cooperative (Leyeco III), and Don Orestes Romualdez Electric Cooperative. Also, NGCP said Leyte IV Electric Cooperative and Leyeco V suffered a repeat power interruption due to a toppled coconut tree violating the Ormoc-Baybay 69-kV line clearance. The grid operator also said strong winds caused a bamboo tree to lean on the Nasaug-SogodSaint Bernard 69-kV line, affecting the Southern Leyte Electric Cooperative . “While NGCP continues to work toward improving power-transmission lines and facilities, we depend on our partner communities to help us maintain over 20,000 circuit kilometers of transmission lines. These right-of-way violations and the subsequent power interruption and inconvenience to consumers it usually brings are avoidable,” the NGCP said. A l l power inter r upt ions caused by ROW violations have since been restored and the lines energized.
On the right track
A family in Santa Mesa, Manila, goes on a weekend cruise onboard a wooden, foot-powered trolley fitted with steel bearing along the railway tracks of the Philippine National Railways. Nonie Reyes
DTI slates MSME natl food fair for next month
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he Department of Trade and Industry (DTI), through the Bureau of Domestic Trade Promotion (BDTP), is set to showcase regional food and delicacies with 200 participating micro, small and medium enterprises in the forthcoming SikatPinoy National Food Fair “Piling-piling Pagkaing Pilipino” from March 15 to 19 at the SM Megamall in Mandaluyong City. “The National Food Fair is one of the many avenues provided by the DTI to our local businesses in the regions to introduce their products to a broader domestic market. We hope to invite Filipinos to look for best Philippine food products at the fair and help promote our local produce,” DTI’s Industry Promotion Group Undersecretary Nora K. Terrado said. Supported by the DTI regional and provincial offices, the five-day national food fair will feature a wide array of food products and produce selected from various regions and provinces of the Philippines. Products that are up for sale include fresh farm produce, processed-food products and regional food delicacies.
“Every year, we aim to showcase upgraded products that the Philippines can boast of not just in the domestic market, but also in the global market. This year, through our screening process, we would like to introduce more outstanding products from our trade exhibitors,” BDTP Director Rhodora Leaño said. Aside from the buying public, members of various trade associations and retail and wholesale institutional buyers seeking subcontractors and suppliers of intermediate and finished products are expected to attend and visit the said trade fair. Sikat Pinoy National Food Fair is conducted annually by the DTI-BDTP as a means of promoting Philippine products at the domestic level. It also recently held the Sikat Pinoy National Arts and Crafts Fair, which promoted the indigenous products of the Philippines and world-class talents of Filipino artisans. Jedidiah’s Turmeric Tea, RAMC’s Shrimp Paste and Delicacies, and Sta. Maria Yogurt and dairy products, among others, will be the pride of Bulacan in the upcoming fair. Catherine Joy Maglalang
@jrsanjuan1573
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HE Supreme Court (SC) has declared null and void the Radio Frequency Identification Project (RFID) memorandum of agreement (MOA) entered into by the government with the Stradcom Corp. in 2009, which was awarded to the latter without the benefit of public bidding. The project entails an additional charge of P350 for every motor vehicle. Thus, the Court ordered a refund of the RFID fees collected during the project’s implementation prior to the Court’s issuance of a status quo ante order on January 12, 2010, which enjoined its enforcement. The Court noted that the Land Transportation Office (LTO) had already generated P29,894,200 in RFID fees during its brief implementation. In a 30-page decision penned by Chief Justice Maria Lourdes P. A. Sereno, the Court granted the petitions filed by Reps. Satur Ocampo and Teodoro A. Casiño of Bayan Muna, Rep. Joel Maglungsod of Anakpawis, Rep. Liza Maza of Gabriela Women’s Party, Pagkakaisa ng mga Samahan ng Tsuper at Operator Nationwide and Automobile Association of the Philippines, who sought to declare the project unconstitutional. “The RFID fees collected during the implementation of the RFID project prior to the issuance of this Court’s status quo ante order are, likewise, ordered refunded to the payors thereof,” the Court ruled. Under the RFID project, all vehicles would be required to install stickers containing a microchip that stores vehicle information. It is an automatic identification technology whereby digital data encoded in an RFID tag or “smart label” are captured by a reader using radio waves. For a onetime fee of P350, the LTO plans to install the RFID tags on some 4,760,593 vehicles, which is expected to raise P1.6 billion in revenues. The RFID tag, which is intended to last for 10 years, will be procured from Stradcom Corp. Stradcom said the RFID project was an enhancement to the current motor-vehicle registration system, thus, there was no need for a public bidding for the project. On June 16, 2009, the RFID MOA was entered into between Stradcom and the government through the then Department of Transportation and Communications (DOTC) and LTO. The petitioners argued that the project should be declared null and void, as it violates the provisions of Republic Act (RA) 9184, or the Government Procurement Reform Act, requiring all government procurements to be done through competi-
The RFID fees collected by the LTO during the brief implementation of the project at P350-per-vehicle registration tive public bidding. Their position, however, was contradicted by transport groups, such as Federation of Jeepney Operators and Drivers Association of the Philippines, Alliance of Transport Operators and Drivers Assocations of the Philippines, Land Transportation Organization of the Philippines, NTU-Transporter, Pasang-Masda Nationwide Inc. and Alliance of Concerned Transport Organizations. The Court ruled that the RFID project should have undergone public bidding pursuant to Section 5 of the Build-Operate-Transfer (BOT) law, which provides that upon the approval of a project, a notice must be made inviting all prospective project proponents to a competitive public bidding. “In this case, it is patently admitted by DOTC/LTO that no public bidding was conducted on the RFID project, which was presented by Stradcom as a proposal that would enhance the existing LTO IT Project,” the Court held. It added that neither does this case fall under the exception to the rule on public bidding per Section 5-A of RA 6957, as amended by RA 7718, which states that “direct negotiation shall be resorted to when there is only one complying bidder left”. “The RFID MOA must, thus, be struck down by this Court for failure to comply with the rules on public bidding. There is no guarantee that the RFID fee that will be charged to the public is a fair and reasonable price, as it has not undergone public bidding,” the SC said. Likewise, the Court said there is no guarantee that the public will be receiving maximum benefits and quality services, especially from the additional hardware, such as the RFID tags and readers. It noted that these are to be procured by Stradcom from its two suppliers, which have not been identified and are not even parties to the RFID MOA. “On the other hand, Stradcom, which has been awarded the exclusive right to develop and operate the RFID system without having undergone competitive public bidding, stands to earn considerable amounts of revenue from the contract,” the SC added. Contrary to Stradcom’s claims, the Court held that the RFID MOA is not a mere enhancement but a substantial amendment of the buildown-operate agreement.
briefs MNTC UNVEILS P38-M TRAFFIC-CONTROL ROOM MABALACAT CITY, Pampanga—The Manila North Tollways Corp. (MNTC) on Wednesday unveiled the upgraded Subic-Clark-Tarlac Expressway (SCTEx) Traffic-Control Room (TCR), housed at the SCTEx Toll Operations Center Building in Barangay Dolores, this city. MNTC, concessionaire of the 94-kilometer SCTEx, upgraded the TCR and its systems for P38 million as part of the rehabilitation and modernization projects slated for the expressway since it was turned over to MNTC by the Bases Conversion and Development Authority in 2015. The SCTEx TCR features a central traffic-management system that monitors real-time traffic in key areas of the expressway 24/7, which, in turn, ensures the safety and convenience of motorists. The monitoring includes 15 toll plazas from Tarlac to Tipo. With 104 closed-circuit television cameras installed in various locations at the SCTEx and 15 monitors mounted inside the TCR, SCTEx patrol officers can respond faster to motorists who may need assistance. PNA
e-jeepneys ply sm clark-clark airport route for free ANGELES CITY, Pampanga—With the increasing number of flights at Clark International Airport (CRK), both domestic and international, the SM City Clark Management has launched its e-Jeep services for passengers from the mall going to the airport and vice versa. According to SM City Clark Officials, there are four available e-Jeeps. The e-Jeeps, with a cost of P1.2 million each, will ply the route between SM Clark and the CRK on a daily basis. Because the service is on a trial stage, the rides are still free. PNA
Agriculture/Commodities BusinessMirror
news@businessmirror.com.ph
Editor: Jennifer A. Ng • Thursday, February 23, 2017
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Piñol urges Duterte to allow corn exports
DA inks MOU with Coca-Cola for water-access technology distribution in 10 provinces
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bloomberg
By Jasper Emmanuel Y. Arcalas
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@jearcalas
he Department of Agriculture (DA) has formally asked President Duterte to amend the guidelines of the National Food Authority (NFA) to allow farmers to export yellow corn this year. In a letter addressed to the President, Agriculture Secretary Emmanuel F. Piñol said shipping corn to other countries would stabilize domestic prices and boost farmers’ income. “The existing policy of the NFA before we could export corn is the 200-percent sufficiency benchmark, if only we could amend the policy and guideline reducing it to 100-percent sufficiency benchmark, then we could immediately export corn,” Piñol said in his letter dated February 2, a copy of which was obtained by the BusinessMirror. “In view of the urgency of the situation, I am respectfully and humbly recommending the immediate amendment of the policy guideline issued by the NFA, which is currently under the Office of the President,” he added. Citing reports from the DA, Piñol said there’s an expected surplus of corn harvest this year due
to favorable weather and better planting intentions. He said corn output in 2017 could go up by 12.19 percent to 8.1 million metric tons (MMT), from 7.22 MMT produced last year. “It is my distinct honor to inform you that we are on the verge of achieving another milestone for the Filipino people. Indeed, for the first time in history, the Philippines is ready to export corn to our neighboring countries, as corn harvests is expected to hit 8.1 MMT, surpassing the 5 MMT to 6 MMT domestic requirement,” he said. “As reported by our National Corn Program coordinator, Assistant Secretary Federico Laciste Jr., the tremendous yield, which translates into 120-percent corn sufficiency, is already assured, despite the series of natural calamities that ravaged extensive agricultural areas of the country,
including the seven-month El Niño cyclical occurrence,” Piñol added. He said the DA is implementing two interventions to hike the country’s corn production this year—the adoption of drip-irrigation with solar-powered irrigation systems deployed in strategic areas; and the use of hybrid-corn seeds and distribution of fertilizer to farmers. “Our country’s corn production during the next five years of your presidency shall double and allow us to finally export to our neighboring countries,” he said, adding the DA would soon launch a program, dubbed as Programang MA MAIS: Mas Marami, Mas Masagana!, to hike corn output. The DA chief said the export of corn would stabilize the current low farm-gate price of the grain in the local market. Earlier Piñol said the DA is eyeing to export corn to Malaysia, Taiwan and South Korea. “Our corn farmers’ interest in boosting corn production is actually dampened by the very low prices manipulated by the corn traders arising from oversupply. Exporting is one doable solution that will benefit all industry stakeholders, as well as expedite the growth of the corn-farming sector,” Piñol said. The latest data from the Philippine Statistics Authority (PSA) showed that farm-gate prices of both yellow- and white-corn grains in the second week of February
were lower than those recorded a year ago. Farm-gate prices of yellow-corn grain and white-corn grain were pegged at P11.40 per kilogram and P12.18 per kilogram, 5.08 percent and 9.81 percent lower than prices recorded in 2016, respectively. The NFA oversees the regulation and stabilization of grains prices and supply in the country. Before farmers could export grains, such as corn, the interagency NFA Council must first declare that there’s a surplus, according to Presidential Decree (PD) 4. “In the exercise of this power, the Authority shall directly undertake the exportation of rice, corn and other grains and/or their substitutes and/or by-products/ end-products whenever there is an excess in production and/or supply, or it may allocate export quotas among certified and licensed exporters,” PD 4 read. “Provided, however, that the council shall first certify after to such excess production and/or supply after proper consultation with the Office of the President,” it added. Based on the report of the PSA on the country’s food sufficiency, corn self-sufficiency ratio (SSR) was pegged at only 91.35 percent in 2015, the lowest since 2011. The SSR shows the extent to which a country’s supply of commodities is derived from its domestic production, according to the PSA.
he Department of Agriculture (DA) said on Wednesday it has entered into a threeyear memorandum of understanding (MOU) with Coca-Cola Far East Ltd. (CCFEL) to provide water-access technologies in the poorest provinces in the country. “The community beneficiaries will come from the country’s 10 marginalized provinces that have existing natural sources of water that are difficult to access for agricultural use,” Agriculture Secretary Emmanuel F. Piñol said in a statement. The DA said the MOU, which would be effective until December 31, 2020, will help increase food production and alleviate poverty incidence in the 10 poorest provinces identified under the Special Areas for Agricultural Development (SAAD). Under the MOU, CCFEL will shoulder the technical and funding support for the installation of water-access technology to waterscarce communities in the country until 2020. The CCFEL will also assist in the social preparation and capacitybuilding of the community in terms of maintaining the water facility,
proper caring for the natural water resource environment and organizing water association. “We need to have good farmers who are willing to organize a water association; willing to undergo various capacity-building and trainings; and willing to participate in any postproject evaluation and documentation activities,” Piñol said. He added a team from the DA will work closely with the CCFEL to provide technical expertise all throughout the project implementation. SAAD is the DA’s flagship program in line with President Duterte’s thrust to increase food production and cut poverty through the provision of livelihood projects. Under the SAAD, 10 identified priority provinces per year will receive livelihood programs and other related support from the DA, amounting to at least P80 million. The 10 poorest regions, which the DA has included in the SAAD program are Apayao, Negros Oriental, Zamboanga del Norte, Lanao del Sur, Cotabato, Sarangani, Maguindanao, Eastern Samar, Western Samar and Northern Samar. Jasper Emmanuel Y. Arcalas
Siquijor vegetable farmers get assistance from DOLE
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EBU CITY—Vegetable farmers in Siquijor have recently received farm implements costing P388,980 from the government, according to an official of the Department of Labor and Employment (DOLE). DOLE-7 Director Exequiel Sarcauga said the assistance benefited 34 members of Purok Sudlon Farmers’ Association (PSFA) of Barangay Cangmunag in the municipality of San Juan. Sarcauga said onion and garlic farmers received various tools and equipment, materials and jigs. The assistance released to beneficiaries on February 2 included 1,000 meters of enclosure nets; rolls of nylon thread, shovels, sprinklers, rakes, hoes, sprayers, bolos, 400 meters of hose, plastic water drums, garden trowels, cans of onion seeds, 120 kilograms of garlic and sacks of fertilizer. “We also provided the farmers with a diesel-engine hand tractor, wheel cage, harrow disc and plows. We hope that these equipment will be of great help to them in their chosen project,” said Nole Torres, head of the DOLESiquijor field office. Torres said the local government unit of Barangay Cangmunag served as the DOLE’s partner in the initia-
tive by helping in the canvassing and purchase of the needed materials and farm equipment. Barangay Captain Virgie Olpoc expressed her gratitude to the DOLE for providing aid to farmers in her locale. “We are so grateful to the DOLE for extending assistance to our barangay. The assistance we received will surely contribute to making the beneficiaries become more productive members of the community,” Olpoc said. The municipality of San Juan is a fifth-income class municipality, where fishing and farming are the chief sources of the residents’ income. Lodie Maghinay, president of PSFA, said the assistance would help farmers become more self-reliant and would encourage others to go into farming. The livelihood assistance extended to PSFA was made possible under the DOLE Integrated Livelihood and Emergency Employment Program, which seeks to contribute to poverty reduction and reduce vulnerability to risks of the poor and marginalized workers. Under the program, marginalized workers refer to those who have not benefited from education, health, employment and other opportunities by reasons of poverty, geographical inaccessibility, culture and gender, among others. Charles R. Pepito
Battle brews as world’s largest coffee exporter eyes imports
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battle is brewing in Brazil for the second time in less than a year over the government’s decision to import robusta coffee beans. Brazil is the world’s largest producer and exporter of the commodity. However, a two-year drought has led to a collapse in output of robusta beans in Espirito Santo state, the country’s biggest grower of the variety. Agriculture Minister Blairo Maggi said on Monday the government will allow so-called green robusta imports from Vietnam, following months of lobbying from Brazilian makers of instant coffee. On Tuesday Congressman Ricardo Ferraco, from Espirito Santo state, filed a bill in the country’s Senate to stop the move. “If this decision is not reversed, the weight of it will fall on Brazil’s
President Michel Temer,” Espirito Santo Deputy Evair Vieira de Melo said by phone. “We are mobilizing congressmen from coffee states, such as Bahia, Rondonia and Minas Gerais, to fight.” Brazil unsuccessfully tried to import green coffee in May 2016. The government had authorized 400 metric tons of coffee from Peru and, later rescinded the measure after producers protested. The issue is pitting the country’s roasters and the instant-coffee industry against farmers. Imports are needed because of the scarcity of beans, Maggi said on Monday. He said the country lost instant-coffee market share in January and February. “I respect growers, but imports are needed, amid a lack of coffee in the domestic market,” Maggi said.
Plunging prices
Domestic robusta prices have plummeted 22 percent from a record high on November 14 on import talks, according to the University of São Paulo’s Cepea research unit. Since then coffee farmers in Espirito Santo have lost 500 million reais ($161 million) of potential revenue because of the price decline, Melo said. Brazil’s agriculture ministry on Monday published phytosanitary requirements to import robusta green coffee from Vietnam. It includes a 1 million-bag quota for the domestic market and unlimited amounts of green coffee imports for processing and reexporting, a practice known as drawback, Luis Eduardo Pacifici Rangel, Brazil’s secretary for agricultural defense, said by phone. Potential importers may be con-
cerned that beans grown abroad could bring in pests or other phytosanitary threats into the country’s farms, Johannesburg-based trader I. & M. Smith Ltd. said in a report on Tuesday. While this could slow the pace of possible inbound purchases, once successful imports are completed, the pace could accelerate soon after, it said.
Raising cattle
Robusta prices in London are up 54 percent in the last 12 months, amid supply concerns, while arabica futures in New York have climbed 30 percent compared with a year ago. The president of Brazil’s top robusta grower Cooabriel, Antonio Joaquim de Souza Neto, said imports would discourage robusta coffee farmers from producing the bean. “Growers will convert their farms to produce pepper or raise cattle,”
Workers dump harvested coffee cherries in a truck at a plantation in the Minas Gerais state near Guaxupe, Brazil. Patricia Monteiro/Bloomberg
Neto said by phone. Brazil’s largest arabica coffee cooperative Cooxupe also opposes coffee imports. Objections from growers may succeed in blocking the imports, Marcio Candido Ferreira, director at robusta coffee trader Tristao Cia.
de Comercio Exterior, said by phone from Espirito Santo state. “I don’t think this government decision is definitive,” Ferreira said. “I see growers, politicians trying hard to intervene to stop that.” Bloomberg News
TheBroad
Business
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By Jonathan L. Mayuga
ITH Environment Secretary Regina Paz L. Lopez’s order to close or suspend operating mines and cancel 75 mining contracts, the debate over the issue of mining in the Philippines is far from over. While initially supporting Lopez on the decision of the closure of 23 operating mines and suspending five others, President Duterte later admitted that Lopez “messed up” on her decisions, which warrant a careful review. Upon Duterte’s instruction, the Mining Industry Coordinating Council (MICC), which Lopez cochairs along with Finance Secretary Carlos G. Dominguez III, has started the review process. The process would take into account the potential economic impact of closing down large-scale operating mines. Rep. Robert Ace S. Barbers of the Second District of Surigao del Norte, a member of the MICC, said the review will take at least three months. Fighting for its life and mining’s constituents, mining industry’s big players, represented by the Chamber of Mines of the Philippines (Comp), vowed to fight Lopez. The people behind Comp said the eventual closure of 28 of the 41 operating mines will have severe impact on the economy. They added Lopez’s decision condemns to hunger and poverty 1.2 million people in various parts of the country. However, Lopez said her decision is final and only the President has the authority to reverse her closure orders.
Marcopper disaster
LOPEZ said her decision aims to protect the country’s watersheds against the adverse impact of mining operations. She said the destruction caused by irresponsible mining threatens the country’s source of water, citing the 1996 Marcopper mining disaster in the province of Marinduque. Lopez said the disaster has led to the death of rivers. The Marcopper tragedy remains one of the largest mining disasters in the country’s history. Reports said a fracture in the drainage tunnel of a large pit containing leftover mine tailings led to a discharge of toxic mine waste into the Makulapnit-Boac river system and caused flash floods in areas along the river. One village, Barangay Hinapulan, was buried in 6 feet of mud. About 400 families were displaced and 20 other villages had to be abandoned. Lopez noted that the drinking water was contaminated, while fish and other food in the river vanished. In terms of toxicity, the Marcopper mining disaster was the worst in the country’s history. The Boac River was declared “biologically dead”. “Until now, there is no fish in the river,” Lopez said.
Mines blamed
ANOTHER mining disaster was the leak from Tailings Pond 3 at the Padcal mine operated by Philex Mining Corp. in Tuba and Itogon, Benguet, on August 1, 2012. Over 20 million tons of mine tailings sediment were dumped into the Agno River and Balog Creek. The contamination reached and affected the San Roque Dam. In terms of volume, it was the country’s worst mining disaster. The government slapped Philex Mining with over P1 billion in fines. After settling the fine, Philex was allowed to resume operation by the DENR in 2014. Along with 11 other mining operations, Philex’s Padcal mine passed the mine audit, even though Lopez said the closure and suspension orders, as well as the cancellation of mining contracts, are preventive measures to protect watersheds. In Zambales mining’s adverse impact to the environment claimed the lives of seven people, according to Lopez. She also blamed the most
recent flooding that hit Agusan provinces to logging and mining activities. In Surigao destruction is happening from “ridge to reef”, with Lopez showing aerial photos and videos showing the discoloration of rivers and coastal areas in Surigao provinces. An official Twitter account of the Department of Environment and Natural Resources (DENR) blamed mining for the disastrous earthquake that left six people dead, a pronouncement that experts said is “untrue” and lacks scientific basis.
Death, destruction
ACCORDING to Lopez, the massive destruction of ecosystems in mining tenements—the massive cutting of trees, blasting of mountains, the digging and hauling to extract mineral ores—are to blame for the siltation of rivers, as well as degradation of coastal environments that affect agricultural and fishery production. People suffer because of these. Before announcing the cancellation of MPSAs on Valentine’s Day—her “gift of love”, Lopez defended the order to close largescale mines. The DENR chief said mining rakes huge profit at the expense of the environment. Lopez also blames mining for the war in Mindanao. “You take away their land, you take away their resources, you take away their livelihood,” she said. “That is why there is war in Mindanao.” Environment and human-rights groups have been blaming mining for militarization, killings and humanrights abuses in mining areas. Kalikasan-People’s Network for the Environment (KalikasanPNE) said many of the extrajudicial killings (EJK) that took place under the Duterte administration involve activists fighting destructive mining companies. The killings took place from July 1, 2016, to January 20, 2017. The victims were identified as Gloria Capitan, Makinit Gayoran, Jimmy Saypan, Joselito Pasaporte, Mario Cantaoi and Veronico Lapsay Delamente. The list excludes EJKs involving antimining advocates, Kalikasan-PNE said.
Arbitrary, lacking due process
AT a news conference on February 3, a day after Lopez announced the closure order, COMP Chairman Art Disini and Vice President for Policy and Legal Ronald Recidoro condemned Lopez’s decision. They said the decision was “arbitrary” and ignored due process. Disini and Recidoro said Lopez set aside the findings and recommendation of the mine audit teams, denied mining companies the right to make the necessary corrective measures or even challenge the findings of the mine audit. According to Recidoro, many of their members have yet to receive the closure order or the audit reports detailing the violations committed. “We want to know what led to the DENR chief’s decision to issue closure orders. Mining companies want to know their violations,” Recidoro told reporters. “If they violated the Clean Water Act, what is the basis? If it’s the Clean Air Act, we want to know what corrective measures can be done to address the problem.” Recidoro said some companies are protesting in disbelief that they failed the mine audit, even with representatives of antimining civil-society organizations (CSOs) joining the team that inspected the mines. Lopez had said some of the findings appeared to ignore the grave violations committed by
mining companies and recommended mere slap-in-the-wrist penalties and fines. COMP said that most, if not all its members, have acquired ISO 140001 certification, indicating that it passed the highest environmental standards for mining. According to COMP, Lopez’s questionable decision to close the mining operations will directly affect 20,000 employees. Standing pat on her decision, Lopez promised to help those who stand to lose their jobs by implementing area development that will provide green jobs in miningaffected communities. She added it is her duty to protect the country’s freshwater supply for present and future generation, as mandated by the Philippine Mining Act of 1995, which is also enshrined in the Constitution.
Roots in Surigao
SURIGAO del Sur and Surigao del Norte are among the areas that stand to be affected by Lopez’s closure orders. Richly endowed with metallic minerals, such as copper, gold, chromite, cobalt, nickel and lead zinc, Surigao del Sur and Surigao del Norte are also endowed with nonmetallic minerals, like limestone, coal and feldspar, clay diamotite/bentomite and coarse or fine aggregates. Along with Dinagat Islands, which used to be part of Surigao but now an independent province,
Surigao del Sur and Surigao del Norte have been besieged by mining for decades. Ironically, Lopez said mining failed to improve the lives of the people. Surigaonons remained poor despite mining. “They have been mining in those areas for 77 years. This has to stop,” Lopez said. “I want to give Dinagat a rest.” Mining operations on Dinagat Islands and Surigao provinces were among the 23 large-scale mining operations ordered shuttered by Lopez. These are mines being operated by Aamphil Natural Resources Exploration; Kromico Inc.; SinoSteel Philippines H.Y. Mining Corp.; Oriental Synergy Mining Corp.; Wellex Mining Corp.; Libjo Mining Corp.; Oriental Vision Mining Phils. Corp.; Adnama Mining Resources Corp.; Claver Mineral Development Corp.; Platinum Development Corp.; CTP Construction and Mining Corp.; Carrascal Nickel Corp.; Marcventures Mining and Development Corp.; and Hinatuan Miing Corp. Small-scale mining activities also take place in Surigao municipalities of Barobo, Carmen and San Miguel.
Mining evolution
MINING and the administration of mining activities in the Philippines date back during the Spanish era, from small-scale artisanal gold mining or gold panning to large-scale, open-pit mining method. According to the Mines and
Geosciences Bureau (MGB) of the DENR, the country’s mining regulatory agency, the first mining measure was Inspeccion General de Minas, which saw the creation of an office that took charge of the administration and disposition of minerals and mineral lands. The office, however, was abolished on July 1, 1886. Its functions and personnel were merged with the General Directorate of Civil Administration, according to an article posted on the MGB web site, which narrates the history of the bureau. Like other areas, mining in Surigao can be traced back to the promulgation of the Commonwealth Constitution reverting the Regalian Doctrine—which particularly asserts that minerals belong to the State and their disposition, administration, exploitation and development shall be done through license, concession or lease. On November 7, 1936, Commonwealth Act 136 and Commonwealth Act 137 were enacted. The former created the Bureau of Mines, while the latter, otherwise known as the Mining Act of 1936, was actually the first major mining law. As mining evolved, laws evolved, as well, through the years. Presidential Decree (PD) 463 (Mineral Resources Decree of 1974) aims to provide for, among others, a modernized system of administration and disposition of mineral lands and to promote and encourage the development and exploration of the mining industry.
PD 463 was later revised by PD 1385 and PD 1677. On June 6, 1978, PD 1281 was promulgated revising Commonwealth Act 136 boosting the Bureau of Mines with additional tasks, as well as authority to make it more responsive to the objectives of the government for its minerals sector. A year after, some sections of PD 1281 were amended by PD 1654 to include renaming the Bureau of Mines as the Bureau of Mines and Geosciences. The passage of Republic Act 7942, otherwise known as the Philippine Mining Act of 1995, on March 3, 1995, paved the way for the mining liberalization policy in the Philippines. A Supreme Court decision on February 1, 2005, further galvanized the constitutionality of the Philippine Mining Act of 1995 in a case questioning foreign investment in mining. In particular, the Court noted the Financial and Technical Assistance Agreement the Philippine government signed in 1995 with the Western Mining Corp. of the Philippines. A separate law applies to smallscale mining. RA 7076, signed on June 27, 1991, provides for the creation of “Minahang Bayan” to be governed by the Provincial Mining Regulatory Board.
Economic potential
THE Philippines has a total land area of 30 million hectares, with over 9 million hectares identified as hav-
derLook
sMirror
www.businessmirror.com.ph | Thursday, February 23, 2017 horrifying picture during and after mining activities, particularly in Surigao provinces. Mining severely affected Surigao’s forests, rivers and coastal areas, Lopez said, and the destruction will not stop unless mining activities stop. A known critic of the openpit mining method, Lopez said 95 percent of mining companies practice open-pit mining—which, mining experts say, is the fastest, safest and most efficient way of extracting mineral ores. Open-pit mining causes massive destruction of forest ecosystems—as forests are shaved, mountains flattened, and the digging and hauling continue, until huge bowl-like holes are formed. Citing the potential damage of the Tampakan Copper-Gold Project which Lopez stiffly opposes, she said forests, watersheds and highly productive agricultural areas the size of 700 football fields will be devastated once proponents of potentially the biggest gold-mining project begin commercial operation. “That area is the food basket of Mindanao,” Lopez said. “There are rivers and farms in those areas.” Lopez said miners explode dynamites to tear down mountains or in digging holes to fast-track the extraction of mineral ores.
Mining, earthquakes
ing high mineral potential. Around 811,000 hectares, or 2.7 percent, of the country’s total land area are covered by mining tenements. This went down to approximately 740,000 hectares as of January this year. Two years ago, the MGB reported that exports of minerals, which include copper, gold and nickel, reached close to $2.8 billion, with Japan, Australia, Canada and China as major destination countries. Mining employs around 236,000. According to the MGB, it is conservatively assumed that for every job in the mining industry, about four indirect jobs may be generated by the mining industry. In 2015 taxes paid by the mining industry to national and local governments, including royalties, reached P25.78 billion. As of August last year, mining companies have committed P13.15 billion through various Social Development Management Programs (SDMP) for host communities that will benefit a total of 767 barangays. Gross value added, or the industry-wide value of goods and services, at current prices in 2015 is pegged at P80.9 billion. The country is rich with minerals such as gold, copper and nickel. In 2015 estimated gold produced is P35.33 billion; nickel and nickel products, P54.90 billion; and copper, P18.98 billion.
Losses
THE COMP said that because of inconsistent policy, mining invest-
ment in the Philippines went down. It estimated that around $22 billion, or P1.1 trillion, in potential investment will be lost because of uncertainties in mining regulatory policies, from the time Executive Order 79 was signed by former President Benigno S. Aquino III to the closure or suspension of 28 of the 41 operating mines and cancellation of 75 MPSAs and one FTAA. According to Lopez, mining contribution to the Philippines is not enough to cover for the economic losses. Last year mining’s contribution in terms of GDP, or the total goods and services produced in the Philippines, is a measly 0.9 percent. Mining-exports receipts are pegged at $2.8 billion, or only 4.8 percent of total exports, according to the Philippine Statistics Authority (PSA). Mining companies claim that they provide the good life to employees with high-paying salaries and a package of nonfinancial benefits, including housing, health, education for their children, clothing and even rice subsidy, which Recidoro said are a lot better than planting mangroves and bamboo, or serving as ecotourism guides as suggested by the DENR chief.
Green economy ‘better’
LOPEZ insists that the Philippines is better off with a “green” economy, where people will benefit and not suffer from mining. The official said that, com-
pared to mining, ecotourism offers better economic opportunities, in terms of jobs and livelihood. “Mining is not labor-intensive,” Lopez said. “It is capital-intensive.” Lopez said a 2014 government report stated that mining created 235,000 jobs all over the country, while tourism has resulted in 4.7 million jobs. While admitting that mining provided jobs and livelihood, Lopez argued that, although many benefit from mining, several times more that number suffer. She vowed to transform mining areas into ecotourism sites, with the promise of infusing National Greening Program (NGP) funds and using mining companies’ funds for SDMP to boost jobs and livelihood anchored on the protection and conservation of the environment and natural resources. She said that within 18 months, she can get the people out of poverty, with those employed getting as much as P7,000 to P10,000 a month from various ecotourism activities.
Fragile environment
THE DENR chief said the Philippines is highly vulnerable to climate change, and irresponsible mining is making the already fragile environment more fragile and prone to disasters. Lopez has the habit of showing aerial photos and videos of rivers and lakes—showing the beauty of the areas before mining, and the
SURIGAO is prone to floods, landslides and other geological hazards, such as earthquakes. While mining may actually trigger earthquakes, experts say that irresponsible mining may exacerbate the effects of geological hazards, such as flooding and landslides. Renato Solidum of the Philippine Institute of Volcanology and Seismology (Phivolcs) said mining does not trigger earthquakes. “Mining has no relation to the earthquake in Surigao,” the Phivolcs director said. “It did not trigger the earthquake.” Asked if there is a possibility that mining may worsen earthquakes, Solidum said: “No. Hindi ganun ’yun dapat tignan.” “Remember that fault movement cannot be triggered by mining activity. But fault movement can cause ground shaking and ground shaking can cause either landslide and other hazards. I think the question that you need to look at would be how mining activity can exacerbate the hazards that can happen during earthquake events. Kung rain ’yan, madali lang. Loose slopes can be eroded by rain. Sediments can go to the river and it goes down to the sea,” he said. He said even the blasting of dynamites or other explosive devices during mining cannot trigger earthquakes. “It can cause shaking but the shaking is localized,” Solidum explained. A geologist at the Land Survey Management Division of the MGB, who spoke on condition of anonymity, told the BusinessMirror that earthquakes are either related to tectonic or volcanic activity. “Activities related to mining, like blasting, are limited to ground shaking over a small area, not wide areas, where the impact will be great,” the source explained.
Mining exacerbates geohazards
THE person familiar with the matter said surface activities may cause destabilization of ground surface. This, the source said, can exacerbate geohazards like landslides. However, the source said that most of the time, such as in largescale mines, engineering intervention prevents landslides from happening. “In large-scale mining, in some cases, if mining activity is not carried out, landslides can happen,” the geologist said. Engineering intervention in mining includes slope stability, so as not to disrupt the operation. The source said MGB has monitoring teams that undertake environmentally social activities related to mining, to make sure that mining companies are compliant.
Threat to biodiversity
THE master planners of the 18 major river basins commissioned by the River Basin Control Office
(RBCO), a unit under the DENR, also identified mining among the major threats to Philippine rivers. Theresa Mundita S. Lim of the DENR’s Biodiversity Management Bureau (BMB) said that, while rehabilitation is possible, the extensive damage of open-pit mining leads to irreversible biodiversity loss, considering the Philippines is rich in endemism, particularly site-endemic species of animal and plant wildlife. “When you cut trees and haul soil, you kill forests, which are home to threatened species,” Lim said. Even the nutrients in soil taken out in the extraction of mineral ores, she said, are important to the growth of plant species that thrive in a particular area. The DENR chief has included biodiversity consideration in the recent mine audit, leading to the cancellation of environmental compliance certificates (ECCs) and closure or suspension of mines, because of the threat of causing biodiversity loss.
Responsible mining
LOPEZ clarifies she is not antimining and not against the mining industry, per se. “I am only against irresponsible mining,” she said. Experts agree that irresponsible mining may cause irreversible damage to the environment. While Lopez ordered the closure of 23 and suspended five others, 12 large-scale operating mines passed the mine audit. On that account, based on the strict mine audit criteria, which include environmental, social and biodiversity consideration, those that passed the audit qualify Lopez’s standard as “responsible miners”. Antimining groups under the Alyansa Tigil Mina (ATM), however, said responsible mining is not possible at this time. “First, there is no legal definition that can set parameters on how responsible mining can be done, much less how this can be measured whether in terms of compliance or best practice,” ATM National Coordinator Jaybee Garganera said. Garganera said responsible mining can only be operationalized if mining is done in the context of other laws that are enforceable. He cited these as the Indigenous Peoples’ Rights Act (IPRA) Local Government Code, National Integrated Protected Areas System Act and the Afma. Garganera added that mining cannot rely solely on the implementation of the mining law. “If there is land conflict between mining law and other laws, responsible mining is difficult, unless these conflicts are resolved.” Garganera also pointed out that responsible mining framework is a multistage process, based on the COMP model. “What CoMP is not saying is that the model has not been completed in a single mine site. Steps 1 to 4 were done in Australia, [while] steps 5 to 8 were done in Africa. Steps 9 to 12 were done in Canada.” He said not one mine has proven the hypothesis of their responsible mining model. “Responsible mining was a fallback position of the mining industry after it failed to defend the concept of sustainable mining,” Garganera said. “Global environmental groups shot down this concept.” He said responsible mining is only possible if there is a clear national industrialization plan. This plan, he said, should be able to tell us what minerals we need to industrialize, how much of these minerals we need to fuel our industrialization and when do we need these minerals. “After we have clear answers to these, only then do we talk ‘where’ do we get these minerals, or where we will allow mining?,” Garganera said. “This is not only responsible mining; this is also rational mining.”
Cost-benefit analysis
LOPEZ said the DENR is doing cost-benefit analysis of mining operations using total economic value (TEV) as model. This way, Lopez said, ecosystems services will be fully accounted in weighing the cost as against
A7
the benefit of mining in a particular area. The TEV teams from Palawan State University, Bicol University and Mindoro State College of Agriculture and Technology, who are experts in various disciplines, came up with the conclusion that the benefits of mining are minimal. In the Bicol study, which focused on the operation of the Perlite mining in Legazpi City, Lopez said that after 40 years of mining, the poverty rate remains high at 45 percent. The poverty rate in the two barangays where there is ongoing mining is higher at 58 percent. Legazpi City generates from mining an annual revenue of P22,000, which includes the P20,000 real property tax and around 2,000 from special education fund. Out of 12,000 households, only 18 people are employed by the mining company, she said. Total benefits in terms of employment, social development program, taxes and multiplier effect of the SDMP reached only P22.7 million. The costs, which include agricultural resources, coastal and marine resources, forest resources, health impact, tourism, soil erosion and “option value”, reached P169 million. In Palawan, which focused on the operation of Citinickel mine in Barangay San Isidro, Narra town, total benefits in terms of employment, SDMP, IP royalties and taxes reached P151 million. But because of the effect of mining, the costs exceeded the benefits because of the dwindling fish catch, damaged coral reef and health costs, Lopez said. In Oriental Mindoro, which focused on the operation of a nickel mining company in Naujan town, total projected benefit is pegged at P4.7 billion, as against the relevant costs totaling P5.3 billion. COMP’s Recidoro, in previous discussions with the BusinessMirror, questioned the TEV modality, saying the benefits provided by mining companies, such as free education, free health care, roads and bridges built, school buildings and health-care facilities, are not measured or taken into consideration in the cost-benefit analysis. “How would you account for the the benefit of mining, which helped children graduate or complete college degrees? How can you account for the livelihood projects or the trees that were planted by mining companies during progressive mine rehabilitation?” he stressed. Environmental groups, including the ATM, KalikasanPNE, Save Sierra Madre Movement Inc., the Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas (Pamalakaya) and their networks of community-based groups and people’s organizations, are opposed to mining.
Indigenous peoples
NOT all are excited about the impending closure of mining operations. Indigenous peoples’ tribes that benefit from mining want mining in their ancestral lands. In Surigao mining stakeholders are up in arms for the impending closure of mining operations. Six tribal chiefs from three towns in Surigao del Sur expressed support behind mining and even filed opposition to the interim appointment of Lopez before the Commission on Appointments. In a letter dated February 17, 2017, Datu Engwan Ala and Datu Ryan Huniog of Carrascal, Datu Benjamin Adjawon, Datu Escobal Angeles and Datu Felipe Antad of Cantilan, and Datu Benjamin Tindogan of Madrigao said mining provided jobs and livelihood to the people. The tribes are from the towns of Carrascal, Cantilan and Madrigao. They fear that those who would lose their source of income from mining may be tempted to go back to a life of crime, or worse, even join insurgents and criminal organizations or syndicates involved in kidnapping, illegal drugs, or illegal logging. Arguably, the debate over mining, whether responsible mining is possible, or whether the costs outweigh the benefit, is for the long haul.
The Regions
A8 Thursday, February 23, 2017 • Editor: Efleda P. Campos
BusinessMirror
DOE to use WESM to dispatch electricity in Mindanao by H2
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By Manuel T. Cayon | Mindanao Bureau Chief
AVAO CITY—By June 26, Mindanao would be shifting to the Wholesale Electricity Spot Market (WESM) system in dispatching electricity to different areas in Mindanao, the Department of Energy (DOE) said. The WESM is a market system that allows buyers, electric cooperatives and distribution utilities to select their preferred energy source, usually the cheaper priced, from the list of available power and their respective available capacity. Melinda L. Ocampo, president of the Philippine Electricity Market Corp. said the WESM would post online the available capacities and their
current price every five minutes. The prices would be moving according to the demand and their availability, Energy Undersecretary Felix William B. Fuentebella said. The WESM has been implemented already in Luzon in 2006 and in the Visayas in 2010. He said the WESM was already necessary after Mindanao posted increasing reserve and poised to have
excess capacity by next year. Last year the DOE said Mindanao “had an additional generating capacity of 782 megawatts [MW] and is expecting the commercial operations of 1,208 MW more this year.” Romeo Montenegro, public affairs chief of the Mindanao Development Authority, said the entry next year of the Ayala-owned coal plant in Kauswagan, Lanao del Norte, would increase the excess capacity to about 1,000 MW. Two consultations were earlier held in the cities of Cagayan de Oro and Zamboanga, and the succeeding consultations were scheduled in Butuan City on February 28 and in General Santos City on March 7. Montenegro said the contracting system done by owners of power-generation sources with electric cooperatives and distribution utilities would still operate as owners seek to ensure the full subscription of the capacities of
their generation plants. “The establishment of the WESM [would] serve as the mechanism to efficiently tap the excess capacities in the area to avoid rotating brownouts and ensure 24-hour continuous electricity service,” the DOE said. Fuentebella said the WESM structure in Mindanao was among the conditions that would make Mindanao attractive to investors. For several years, the government and energ y-industr y players have pointed to the prevailing low prices of electricity as the reason that discouraged investors from putting up new generation plants. Montenegro said the increasing rate of electricity in Mindanao was also due to the lower dependability of the hydroelectric plants to churn out baseload power and the emerging reliance to new sources, such as coal and bunker fuel.
Bulacan gov issues ban on swimming, sightseeing at sitio
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ITY OF MALOLOS —Gov. Wilhelmino Sy-Alvarado signed an executive order (EO) temporarily prohibiting swimming and sightseeing in Sitio Bakas, Barangay Matictic in Norzagaray town, to ensure the safety of citizens. EO 2, Series of 2017, entitled “An order regulating the conduct of field trips, educational tours, foot and off-road trekking and like activities along Sitio Bakas found at Barangay Matictic, Norzagaray, until after the improvement of early-warning devices in the said area”, was released on January 13. Section 2 of the EO states the local government units concerned shall not issue any business or mayor’s permit for the construction of damara, kalandong, booths and other kinds to anyone and any establishment while completing the said precautionary measures. Based on the Section 3 of the EO, once the installation of early warning devices is executed and the said area returned to operations, it will require anyone to file a request letter or written permission for coordination to the office of the mayor of the town and village hall, at least five days before going or conducting activities, which also required the guidance of barangay police who were in the area for additional security. Supt. Rizalino Andaya, the acting chief of police of Norzagaray, said, “We have a public-safety plan in Angat river system for Bakas, Balugan and Pogpog, such as alarm systems, lifeguards, rescue equipment, such as salbabida, and prohibition of liquor.” There is also a prevalent joint monitoring system, organized by the Philippine National Police, barangay officials and rescue unit in the vicinity of the rivers. They also have close coordination to the offices of tourism, municipal disaster and other stakeholders, he added. The EO was issued after a recent drowning incident killed two students of Bulacan State University at Bakas River in Norzagaray town in this province. The victims were identified by Bulacan police operatives as Jericho Burgos, 17, a second-year legal management student of Bulakan town; and Jaycie Ronwill Balitaosan, 19, a mass communication student of Meycauayan City. Based on the investigation, the two students, together with their friends, went to Bakas River to shoot a short movie that would be entered in the Sine Bulacan Film Festival. Catherine Joy L. Maglalang
news@businessmirror.com.ph
Cebu university, Phinma Properties partner with LGUs to build town development By Felix U. Basadre Jr. Correspondent
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OUTHWESTERN University (SWU) and Phinma Properties are at the forefront of a collaborative effort to build a development the partners are calling Southwestern Town in the northern part of Cebu City. The effort involves local government units (LGUs), including several barangays in the city. The proposed project will rise in a thickly populated place, mostly by informal setters, in an area under the jurisdiction of Sitio Pailob in barangays Sambag Uno and Sambag Dos. Launching the proposed development, Dr. Chito B. Salazar, SWU president, said the master plan will create a “community citizenship” that will improve the two barangays’ well-being through “institutionalized, collective and organized action responsive to the aspects of education, economic development, health, environment, safety and security.” The idea, Salazar said, is to make barangays Sambag Uno and Sambag Dos “a destination place of Cebu” after the two barangays become “vibrant and dynamic communities”. The first phase of the master plan was the groundbreaking of the Pailob Project in Sitio Pailob, Sambag Uno, which is a joint project of the residents of Pailob, Phinma Properties and SWU. The activity was witnessed by SWU officials, Sacred Heart Hospital doctors, local housing and health authorities, residents of Pailob and Barangay Captains Lemar Alcover of Sambag Uno and Carlos Belarmino of Sambag Dos.
Under the “community citizenship” program, local LGUs, headed by the Cebu City government, other educational institutions and key private-sector entities will work together “to build a partnership arrangement and strengthen stakeholdership”. The same partnership, Salazar said, will work as a team to identify community needs and assess the condition and status of the communities involved based on key social and economic indices. Salazar emphasized that SWU will align with the university and college outreach programs with the community needs and, in so doing, institutionalize its implementation. Right now, Salazar said, the SWU and the Sacred Heart Hospital— both owned and operated by Phinma Properties, which runs seven other universities in the country—have looked into the health and education needs of the two barangays and are now offering maternal and infant care and attending to charity cases. The SWU-Phinma Sacred Hospital is also working with the barangays’ health clinics. An important part of the community revitalization, the SWU president said, is holding regular community events open to the whole Cebuano community. These events, he said, are night markets, Sugbo Mercado and weekend markets. Reshaping the physical environment of both barangays include drainage and electrical setup, sidewalks, greening of streets and putting up good roadways. “All together, Sambag Uno and Sambag Dos will soon become the Southwestern Town,” Salazar said.
Soldier wounded in military clash with ASG in Sulu By Rene Acosta @reneacostaBM
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ORGANIC VEGGIES
Vegetable trader Carmen Balberan of Villa Gonzaga, Santiago City, gathers young mustard leaves from the vegetable farm cultivated by her husband. The leafy vegetables are organically grown, making it easier to market. LEONARDO PERANTE II
18,690 entrepreneurs in Central Luzon undergo DTI trainings By Catherine Joy L. Maglalang Correspondent
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ITY OF SAN FERNANDO, Pampanga—At least 18,690 existing and potential entrepreneurs benefited from 378 training sessions given by the SME Roving Academy (SMERA) of the Department of Trade and Industry (DTI) in 2016. “Our Nueva Ecija Provincial Office had 54 training sessions, with 3,679 participants; while Bulacan had 61 sessions, with 2,851 attendees; and Pampanga had 49 sessions, with 3,437 participants,” DTI Regional
Director Judith Angeles said. DTI Tarlac had 84 training sessions with 3,560 participants; Zambales, 55 sessions, with 1,702 participants; Bataan, 55 sessions, with 2,344 participants; and Aurora, 20 sessions, with 1,119 participants. “For 2017, we are targeting 365 SMERA sessions, where Aurora will have 25 sessions; Bataan, 50 sessions; Bulacan, 60 sessions; and Nueva Ecija, 65 training sessions,” Angeles said. Pampanga will also be conducting 50 sessions this year; Tarlac, 75 sessions; and Zambales, 40 sessions. DTI provides capability-building
sessions in the SMERA program to support the growth and competitiveness of micro, small and medium enterprises. Participants are trained in areas such as product development, visual merchandising, food labeling and food safety, money and cash-flow management, financing forum, taxation, good manufacturing practices, bar coding, business ethics and accounting. “Entrepreneurs who are interested to participate in the training sessions may go to their nearest DTI provincial office and Negosyo Centers to inquire on how to participate in the said trainings,” Angeles said.
SOLDIER was wounded on Tuesday as government troops searching for captives of the Abu Sayyaf Group (ASG) clashed with members of the local terrorist group in Indanan, Sulu. The Armed Forces Western Mindanao Command said elements of the Army’s 69th Infantry Battalion under the Joint Task Force Sulu were on operations when they encountered at least 20 terrorists under Aldin Bagadi at Barangay Paligi, Indanan. After 10 minutes of firefight, the ASG members escaped, reportedly bringing along with them their casualties. One government soldier was wounded. “Our troops are currently on the ground to pin down the Abu Sayyaf who are on the run and are evading military forces,” said Armed Forces Western Mindanao Command commander Major General Carlito Galvez Jr. of the operation. “It is obvious that the corridors of the bandits have already been constricted due to their inability to hide
in populated areas after the locals themselves resisted their presence within the communities,” he added. The military is currently undertaking intensified operations in Sulu in line with its six months deadline of beating the ASG, not only in the province, but even in Tawi-Tawi and Basilan. The offensive was heightened by the government’s effort to rescue kidnap victims in the hands of the local terrorist group. Among those held by the ASG was 70-year-old Jurgen Kantner, whom the ASG threatened to behead if its ransom demand of P30 million is not paid by February 26. The German and his partner were abducted in November last year while they were sailing on a yacht in Sabah. Last Sunday suspected members of the ASG intercepted and boarded a Vietnamese vessel in Sulu, where they killed one of its crewmen and snatched seven others. The attack on Vietnamese vessel MV Giang Hai happened at 17 nautical miles, north of Pearl Bank, Sulu. Troops are still searching for the abducted crewmen.
Gov works to stop decline of Pangasinan language
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INGAYEN, Pangasinan— Noting that the number of Filipinos using the Pangasinan language is now continuously decreasing as gleaned from a recent survey, Gov. Amado Espino III stepped up efforts to further strengthen and encourage its use in schools, homes and workplaces. Speaking during the opening of the training for the pedagogy of the Pangasinan orthography, sponsored by the Pangasinan provincial government, the Department of Education (DepEd) and the Komisyon sa Wikang Pilipino at the Pangasinan Training and Development Center here Wednesday, Espino said every effort to save the Pangasinan language must be done now for the sake
of future generations. More than 200 teachers from various towns of Pangasinan, tasked by DepEd to teach Pangasinan language to their pupils, are attending the training to further learn and study the proper usage of particular words in oral and written communications. Espino lauded the training program, whose ultimate aim is to save the Pangasinan language from dying or from being forgotten by the next generations of Pangasinenses. He said DepEd at present is teaching Pangasinan language as one of the mother tongues among pupils in all schools in Pangasinan, but so with Iloko in towns in the province populated and dominated by the Ilocanos. PNA
112 YEARS Officials and employees of the Baguio Country Club release doves during the celebration of the club’s 112th anniversary. MAU VICTA
Asean
BusinessMirror
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Asean economic integration winners and losers Asean-EU Perspective
HENRY J. SCHUMACHER
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T is fair to say that the countries and regions around the world have taken the creation of the single Asean market with 600 million people and a combined GDP of $2.1 trillion seriously, and have studied the opportunities Asean offers and are looking at the best entry points into the region. At the same time, the Asean member-states have encouraged their business sectors to get ready. The name of the game is competitiveness. In this process, it is essential that we look at winning sectors and at sectors that will be challenged. Let’s look at some sectors: n Transport Southeast Asia is not only a vast and developing market, it is also bound by the dynamic economies of China, India, South Korea and Australia. Facilitation of trade is vital for all Asean countries, which occupy an area at the heart of these leading global manufacturers. Trade among member-countries themselves is steadily increasing with intratrading expected to increase to 30 percent of total trade. As a result, transport and logistics have become big business in Southeast Asia. For the Philippines this means to accelerate the implementation of transport infrastructure; the Philippine government has to address cost, quality and competitiveness issues in domestic logistics. n Aviation The aim of the Asean Single Aviation Market is to foster a competitive airline industry and propel the region’s carriers into the global market. It is a strategy that seeks to increase market access, establish central authorities and industrial standards for a sector that is undergoing unprecedented expansion. Open skies will yield a host of opportunities for Asean members by removing obstacles to growth, such as restrictive airspace and route constraints. In the Philippines the decision has to be made to expand Clark and modernize the Ninoy Aquino International Airport, provide night-landing equipment to airports and improve civil aviation regulation. n ICT Sustained investment in information and communications technology (ICT) is proving to be one of the most potent drivers of development for emerging economies. The strong focus on ICT development is having a significant impact on the Asean region. There is a master plan to deliver ICT as an engine of growth for allmember-states and to establish the region as a global communications hub. The Philippines is a leader in business-process management (BPM) and will have to improve its telecoms infrastructure/broadband if it wishes to maintain that position. n Health care Health spending in Southeast Asia is expected to double in real terms over the next decade, outstripping GDP growth, as governments seek to improve standards and widen the scope of care available. There are wide variations in the region. Several Asean members have passed laws to establish national health insurance systems and mandated universal coverage, including the Philippines. n Services Within Asean, the services sector accounts for 40 percent to 70 percent of each economy’s GDP. Education, the upgrading of local skills, infusion of foreign skills (which will lead to mutual technology/knowledge transfer) and overall productivity increases are the cornerstone of a competitive economy. The Philippines has a great chance to take dominant positions in BPM (we are already No. 1 in voice in the world) and in various creative sectors, from animation to game development to digital content and digital design). n Agriculture The sector’s output derives almost entirely from small holdings, which dominate the region’s agricultural landscape. Many farms occupy less than 2 hectares and have low access to technology, information, finance and, crucially, to markets. The problem is that poor techniques and low-grade inputs, including seeds, lowers productivity, while farmers struggling to survive are driven to over culture their lands and deplete scarce water resources as a result. The integration of the agri sector will be challenging with winners and losers. The Philippines will not be among the winners in the short term. n Manufacturing In the last 25 years Asean countries have become established as a preeminent destination for global manufacturers seeking a well-resourced, costeffective manufacturing base for garments and textiles, electronics and a huge variety of branded goods that stock the shelves of retailers in Europe and North America. There is a developing strategy among many Asean states to move from low-cost manufacturing and become providers of value-added products in many sectors, involving ship and drilling rigs, automotive, mineral smelting and refining, biomedical and biochemistry, petrochemicals, health care, agro-biotechnology and many more. n Food and beverage Almost all countries in Asean are experiencing high economic growth accompanied by rapid changes in the consumption pattern. A growing middle class is developing preferences for food and beverages that are more convenient and packaged well, especially juices and premium beverage alcohols. The Philippines must take the agri-food supply chain much more seriously and develop strategies to increase farm productivity through mechanization, consolidation of farmland and the application of new technologies. n Consumers The ever-growing diverse consumer market of Asean with a combined GDP of $2.4 trillion will be the fourth-largest economic region in the world by 2050, according to research conducted by McKinsey&Co. (McKinsey Global Institute analysis). The growth of the region’s various economies and its rising middle class speak volumes for the future as companies can tap into expanding opportunities. By 2025, McKinsey expects the size of this consumer-driven market to almost double to 125 million households. n Tourism The travel sector is helped by growing connectivity in the region, which supports to stimulate tourism. As a result, the travel and tourism industry is seen as crucially important for development. Tourism is vital for its socioeconomic benefits, as it promotes people-to-people connectivity, one of the key strategies toward achieving the Asean community. Income received from international tourism is at an estimated $21 billion for Malaysia in 2013, $18.9 billion for Singapore, $9.3 billion for Indonesia, $7.5 billion for Vietnam, $4.7 billion for the Philippines, $2.7 billion for Cambodia and a huge $42 billion for Thailand. In conclusion, there are definitely more winners than losers. And where challenges exist, governments and the private sector should get together to find solutions without delay jointly. Asean is a big adventure.
Editor: Max V. de Leon • Thursday, February 23, 2017 A9
World’s tiniest stock exchange hungers for foreign players $1,270 M
yanmar has a stock exchange. Who knew? Not many people, inside or outside the country formerly known as Burma. Now a year old, the Yangon Stock Exchange is home to just four companies. None of them has raised new capital, and trading is dominated by small investors, many of whom buy stock for less than 20,000 kyat, or $15. On a recent day, fewer than 17,000 shares changed hands, about as many as the world’s biggest stock market in New York traded in an eighth of a second. Since Myanmar emerged from a half-century of military rule and elected a democratic government in December 2015, many of the 51 million Burmese have eagerly embraced cars and social media, and three-quarters own a smartphone. Just don’t expect them to show enthusiasm for finance. With an average annual income of $1,270 and a history of wariness toward banks, the Burmese have yet to establish a sturdy economic system. Myanmar has little in the way of retail banking, mortgages, credit cards, retirement accounts or corporate bond market. Yet, the government’s first and most expensive financial project was the creation of the Yangon exchange. Another problem: foreign investment is forbidden on the exchange. A revision of the Local Company Law, which would allow non-Burmese to own as much as 35 percent of a Burmese company, could come as early as this month, said Daw Tin May Oo, a commissioner of Myanmar’s Securities and Exchange Commission. But until something changes, the
exchange’s four companies—First Myanmar Investment Co., Myanmar Thilawa SEZ Holdings Public Ltd., Myanmar Citizens Bank Ltd. and First Private Bank Ltd., which joined on January 20, will keep muddling along in what’s essentially a show of the country’s fledgling capitalism.
‘Vanity project’
“It’s difficult to see the exchange now as anything but another vanity project for the government, which is unfortunate because they did so many other good things,” said Mike Dean, a London native and cofounder and director of Myanmar Investments, a private equity firm based in Yangon. The government has had to start its financial industry from less than zero. During the military regime, which started in 1962, Burmese grew accustomed to storing wealth anywhere but in financial institutions. A 2003 bank run that wiped out much of the savings kept in the country’s private banks remains a particularly bitter memory, Dean said. “Especially after that, they’d rather keep their money in virtually anything else,” Dean said. When the exchange opened, enthusiasm was high, May said. About 200 people from rural areas showed up in Yangon looking to trade precious metals and gems in handwoven baskets for shares, May said. Once it became clear that a relationship with one of the six authorized brokers was required, most
The average annual income of Burmese
lost interest, he said. “It’s been disappointing, to say the least,’’ May said.
Public engagement
The lack of public engagement has made the stock market an anomaly unconnected to many Burmese, like the overly optimistic and largely empty 20-lane highways connecting the new capital, Naypyidaw, with sparsely patronized luxury hotels and shopping malls. One afternoon in January, at the imposing neocolonial exchange building in downtown Yangon, the pothole-pocked commercial capital with the population of New York City, the only noise came from the four brokers. They were huddled around one of the trading tables playing cards. The day’s activity swelled in the afternoon, before the market’s close, when a dozen or so uniformed Burmese business-school students wearing “visitor’’ lanyards filed into the room. A few minutes past 1 p.m., a 90-second jingle played to mark the end of the trading day. Foreign interest is keen, Dean said. Investment vehicles of choice have included joint ventures, rather than equity stakes, especially as regulations remain light, he said. “It’s like Hong Kong in the 1980s,” Dean said.
Foreign investors
The sleepy exchange would benefit from foreign investors—at least
enough to keep its traders busy with something other than card games, said Thaung Han, the head of CB Securities, one of the six brokers on the exchange. Under current law, a company can be booted from the exchange for accepting foreign investment. Despite the penalties, some companies welcomed Chinese investors, even though it was done secretively, Han said. “They’d bring in a Myanmar citizen as a local proxy, and we wouldn’t know if it’s his wife or someone else,” Han said. “It’s not allowed, but the government couldn’t do anything but give a stern warning because it’s so hard to prove.” Han sounded almost desperate for a loosening of the Local Company Law, which he says is the only way to get the Yangon exchange out of its rut. “It has to happen,’’ he said. “we really need those funds. It’s the only way to support its growth.’’ At times, it can seem as if the government doesn’t want Burmese to participate on the exchange, Han said. Trying to capitalize on the country’s smartphone obsession, all six security brokers created mobile trading platforms for their clients. The government outlawed all six, Han said. “They think we need to interact face to face and educate investors before they make trades,” Han said. His clients often get investment tips from fortune tellers and neighborhood rumors, he said. To trade on the Yangon Stock Exchange, an investor must go to the market or call and speak with a broker, Han said. Trades of more than $8,000 have to be reported and approved by the securities commission. Many of those large trades don’t get approved, Han said. “That’s Myanmar,” Han said. Bloomberg News
Framework of South China Sea pact possible soon
T
he Philippines’s top diplomat said on Tuesday it remains to be seen whether China will cooperate fully in ongoing efforts to craft a legally binding pact designed to prevent aggressive behavior in the disputed South China Sea. Despite the likelihood of tough negotiations ahead, Foreign Secretary Perfecto R. Yasay Jr. expressed confidence that the 10-nation Asean and China could at least complete a framework for such a pact, called a code of conduct, as early as June. Efforts to forge such a regional nonaggression pact have dragged on for years without any concrete sign of when it might be completed. Asian and Western governments, led by the United States, have called for the rapid conclusion of such an accord as territorial disputes in the South China Sea escalated in recent years. China, however, has opposed a legally binding agreement that could block its actions to assert its claim to virtually the entire South China Sea, a senior Southeast Asian diplomat involved in the negotiations for the nonaggression pact told The Associated Press. Yasay said he was confident a framework for the agreement could be finalized by mid-year “on the basis of the fact that everyone, including all of the Asean member-states, and China are pushing hard for this.” “Whether, in fact, China will be able to cooperate along the way is something that we cannot say for now,” Yasay said, without elaborating, after hosting a closed-door meeting of Asean foreign ministers on
In this photo provided by the Presidential Communications Operations Office Asean, foreign ministers from the region link arms during the Asean Foreign Ministers’ Retreat in Boracay, Aklan, on Tuesday, including (from left) Lao PDR’s Saleumxay Kommasith, Malaysia’s Anif H Aman, Myanmar’s U Kyaw Tin, Thailand’s Don Pramudwinai, Vietnam’s Pham Binh Minh, the Philippines’s Perfecto R. Yasay Jr., Singapore’s Vivian Balakrishnan, Brunei Darussalam’s Pehin Dato’ Lim Jock Seng, Cambodia’s Prak Sokhonn, Indonesia’s Retno Marsudi and Asean Secretary-General Le Luong Minh. AP
the central Philippine resort island of Boracay. “China will not agree to anything that will tie its hands,” said Jay Batongbacal, who heads the Institute for Maritime Affairs and Law of the Sea at the state-run University of the Philippines. China’s cooperation is crucial, Yasay said. While Southeast Asian governments generally want a strong pact, Yasay suggested the regional group would not want to craft a framework that is unacceptable to Beijing and would simply be “a piece of paper that will just further prolong discussions on the matter without getting any tangible results.” When China seized Philippineclaimed Mischief Reef in 1995, the Manila government strongly protest-
ed and took steps that led to the start of negotiations for a regional accord with China to discourage actions that might spark armed confrontations. Bejing’s opposition to a legally binding pact then, however, led to the signing in 2002 of a nonbinding declaration to encourage China, Brunei Darussalam, Malaysia, the Philippines, Taiwan and Vietnam to avoid aggressive actions in one of Asia’s potential flashpoints. China and r iva l claimantcountries, however, have traded accusations of violating the 2002 pact, which urged them to “exercise self-restraint in the conduct of activities” and refrain “from action of inhabiting on the presently uninhabited islands, reefs, shoals,
cays and other features.” In the last three years, China has turned seven mostly submerged reefs, including Mischief Reef, into man-made islands, including at least three with runways. It also reportedly installed defense missile systems on the new islands, sparking alarm and protests from rival claimants. The Philippines used to be the most vocal Southeast Asian critic of China’s actions in the disputed waters, successfully questioning the legal basis of Beijing’s claims in an arbitration case Manila won in July last year. Current President Duterte, however, has taken steps to reach out to China and has prioritized improved economic engagement. AP
A10 Thursday, February 23, 2017 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
One false information can destroy the media
P
residential Communications Secretary Martin M. Andanar recently tried to torch the credibility of Senate reporters when he declared on national television that as much as $1,000 was offered to them as payment for covering a press conference, where a former policeman accused President Duterte of paying Davao Death Squad members to kill.
Coming from a Cabinet official, that was a serious charge. Journalists who work for mainstream media outlets are counting on the credibility they have gained over decades of reporting to lift them above so-called news sources online. The Senate reporters know that once they lose their credibility, they lose everything. That’s because they rely on the trust of their readers who believe in the veracity of their reports. Andanar, however, seems not to mind tarnishing their reputation, despite the absence of credible proof to back up his payola claim. Asked where the dollars came from, Andanar speculated it could be from the “opposition”. However, he backtracked later, saying it was difficult to speculate on where the supposed money came from. Senator Antonio F. Trillanes IV, who helped arrange the press conference where former policeman Arturo Lascañas declared that Duterte had ordered killings as mayor, blasted Andanar for spreading false information. “That’s the height of irresponsibility for a Cabinet official to say that publicly,” Trillanes said. “I categorically deny that I or anyone else paid $1,000 to reporters to cover the press conference. We won’t do such a thing. We have enough respect for the Senate media.” Members of the Senate media instantly issued a statement to condemn Andanar’s claim: “We, broadcast, online and print journalists covering the Senate strongly protest the unsubstantiated and irresponsible claims made by Press Secretary Martin Andanar that reporters were given as much as $1,000 each to cover the press conference of alleged former Davao Death Squad leader Arthur Lascañas. To our knowledge, no such incident occurred. Such practice is not tolerated among Senate reporters.” The Senate reporters dared Andanar to prove that $1,000 was, indeed, offered or distributed. “We would like to ask the secretary to prove his allegations as such statements placed our credibility and our respective media entities under a cloud of doubt. Otherwise, we demand a public apology from Secretary Andanar for spreading ‘fake news’, truly unbecoming of someone who, just a few months ago, came from the media industry.” We don’t know why Andanar wanted to alienate himself from Senate reporters with his reckless remarks. As a former TV personality, he should be more circumspect in his pronouncements. He must not invent statements that could tear down the media’s reputation. So far, Andanar has issued no apology. And the National Union of Journalists of the Philippines (NUJP) is calling on reporters who covered the controversial press conference of an alleged member of the Davao Death Squad to file charges against Andanar who claimed they received bribes. The NUJP said legal action should be taken against Andanar for tarnishing the reputation of Senate reporters: “We encourage our colleagues present at the press conference, as well as the outfits they work for, to consult their counsel and take a legal action against Mr. Andanar for shamelessly besmirching their reputation, and in this age of tokhang, even putting their safety at risk.” We hope that Andanar has learned a lesson from this incident. Responsible government officials must always strive to err on the side of ethical action, which ensures that everyone’s best interests are protected. Sometimes, it is best to zip your mouth than to broadcast unverified and derogatory information on national television.
Since 2005
BusinessMirror A broader look at today’s business
And now, the good news John Mangun
OUTSIDE THE BOX
I
f you have been around long enough, you see trends that peak and then fail and I am not talking about the stock market. Except that this idea does also apply to the stock market.
But in the long run, things that today we think are going to last forever don’t. It is like that highschool friendship that was pretty much gone by the end of the first year of college. In 1969 the first man walked on the moon and here was the dawning of a new age in the history of the human race. What was next? Would we have a permanent base on our nearest space neighbor? Would a trip to Mars soon follow? Yet, three years and five months later, the last moon landing happened and we have not been back since. All those dreams that kids had in 1969 of going to the moon turned out to be fantasy. Now 45 years later private companies are sending
rockets up, and space tourism may soon be a reality. But that young boy or girl who fantasized in 1969 will probably be too old to experience their dream. Humans by nature are pessimistic, expecting negative trends to continue based on the past and the present. Draw a line between two points and extend it out. But usually just when everyone is on board with the gloom-and-doom, that is the peak. In May 2016 California Gov. Jerry Brown warned of a “permanent drought” for the state and the New York Times published a “scholarly” article, titled “California Braces for Unending Drought”. By February 2017, the mountain snowpack is
Edsa revisited
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Part Two
How she wrecked the entire government
O
UTGOING Prime Minister Cesar Virata, obviously oblivious of what was happening in Malacañang, formally turned over to Salvador Laurel the Office of the Prime Minister in a simple ceremony at the Executive House at 1 p.m., March 25, 1986. Two hours after the symbolic turnover, President Corazon C. Aquino invited Laurel, Juan Ponce Enrile and other Cabinet members to attend a press conference in Malacañang. Suddenly, Mrs. Aquino proceeded to read Proclamation 3, abolishing the 1973 Constitution, the Parliament, the Supreme Court, the office of the Prime Minister, and all national and local positions. Laurel, Enrile and the rest of the officials present could not believe their ears. Aquino and her advisers had unilaterally set up a revolutionary government. Furious and feeling betrayed, Laurel recalled later: “It was not only politically reckless, but economically
disastrous, as the country would be pushed back to the martial law years.” Enrile, Laurel, the rebel officers, as well as the United Nations Industrial Development Organization leaders, had played a very important role in the ouster of Marcos. They gambled with their lives and gave up so much of their time to bring the new government to power. Any decision involving no less than the abolition of the Constitution should have at least been discussed and debated with them. Yet, they were not even consulted. They felt betrayed and it was too late to complain. “History,” Laurel said later, “might have taken a different course if President Aquino had not abolished
The Philippine stock market has been in the longest period of “hibernation”—for the past 15 years—with little movement and narrow ranges. We will soon “skyrocket” or “collapse”. I do not have a clue as to which way it will go and I don’t care. 178 percent of normal and the reservoirs are at 125 percent of normal and both are rising. Neither good times nor bad times last forever, but we always seem to ignore that fact. The prediction in 1968 of hundreds of million people starving because of overpopulation did not happen. In fact—as I said before—the global birth rate peaked in 1970. When crude oil was at $150 per barrel in June 2008 and going to $250 according to the “experts”, that was the peak. The world is always “self-correcting”. The cure for high oil prices was high prices. The industry developed new technology and found new places to drill. Prices came down. The lesson is that just when you think the trend cannot get any worse and that idea is firmly in the public consciousness, that is
the 1973 Constitution, and if her avowed objective was to achieve political stability at the earliest possible date, she should have repealed only the highly objectionable Marcos amendments, particularly Amendment 6, which had clothed himself with legislative powers and perpetuated military rule. “It was like burning a whole house just to kill a rat!” Laurel was right because when she demolished the infrastructure of dictatorship, she wrecked the entire political structure and, thus, derailed the application of much needed solutions to the country’s worsening political, social and economic problems. Besides, there would have been no need up to now to debate the wisdom or the lack of wisdom of going back to a parliamentary form of government or a federal system of government. Or of wasting time and taxpayers’ money arguing whether to amend or revise the Constitution. Laurel said: “We could have saved precious years and the billions of pesos spent in running the country under a revolutionary government, in framing a new but flawed Constitution and in holding expensive local and national elections. “We could have avoided bitter partisan resentments caused by the arbitrary replacement of elected local officials by favored officers in charge.
usually the end of the trend. Yes, the US is going to face a recession because that is the way the cycle works. The US economy grew by 4.2 percent in 1988. In 1991 there was a recession. The global political upheaval will continue for another 12 moths and then the reset will create a period of calm. Yes, there will be a sovereign debt default this year or by mid-2018 at the latest, and then debt-based spending will halt. The Philippine stock market has been in the longest period of “hibernation”—for the past 15 years —with little movement and narrow ranges. We will soon “skyrocket” or “collapse”. I do not have a clue as to which way it will go and I don’t care. So here is the good news. That umbrella you own is the most effective tool you can possibly have to protect yourself from bad weather. It works both to keep the pouring rain off your head and guards you from the burning sun. There is no permanent trend. There is permanent preparation. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.
“We could have addressed the urgent national problems sooner and gained political stability earlier.” As for Laurel and the rest, the worst was yet to come. During the 100-day honeymoon period, Laurel and Enrile, in particular, were systematically eased out of Malacañang’s inner circle. Barely a month after Mrs. Aquino’s oath taking, they became less and less privy to the decision-making process of the palace and more and more reduced to being outsiders, whose access to the presidency was being substantially sabotaged by a cordon sanitaire. Laurel and Enrile were no longer invited to Malacañang, except for Cabinet meetings. Military intelligence reports that they used to receive every week stopped reaching them. Something was, indeed, cooking in Malacañang. “And stoking the fires,” Laurel recalled, “was the intense power struggle between two camps: one a left-leaning clique bereft of experience in statecraft that hated Enrile and the reformist officers and the other just as inexperienced but allied with big businesses” and the powerful Catholic Church. To be continued To reach the writer, e-mail cecilio.arillo@ gmail.com.
Opinion BusinessMirror
opinion@businessmirror.com.ph
The Church in our political life
Trust in God Msgr. Sabino A. Vengco Jr.
Alálaong Bagá
Ariel Nepomuceno
DECISION TIME
O
ur Constitution enshrines the inviolability of the separation of Church and State, and reinforces the principle by further stipulating that no law shall be made respecting an establishment of religion or prohibiting its free exercise. On the other hand, Mark 12:17 mentions that one must “pay to the emperor what belongs to the emperor, and pay to God what belongs to God”. These precepts from the basic law of our land and the Bible came to mind amid the recent vigorous exchanges of views between the leaders of the Catholic Church and Malacañang. This seeming conflict is not anymore unusual. The current stand of the Catholic Church about the policies of the Duterte administration was fully articulated in its January 30, 2017, pastoral letter, where the bishops communicated their deep concern with the many deaths and killings in the campaign against prohibited drugs, the worsening of the lives of the families of those killed and the reign of terror in many poor communities. To top it all, our Church leaders are shocked by the indifference and apathy of many to these events, as if the latter were just normal and, sometimes, just have to be done.
Divided flock
While some fully nod while listening to this letter being read, some uneasily squirm in their seats. Perhaps, a true reflection of the great divide among our citizens’ perception on where the Church should situate itself in trying times like these, here in the country and abroad. Interestingly, the debates about when, how and why should the Church participate in our political life date back to both the Spanish and American colonial eras. It is an institution so deeply entrenched and part of our way of living that one cannot discount its potent power to install, enthrone, destroy and remove any public official. One shouldn’t forget the tremendous role Cardinal Sin played in the Edsa revolution; the nonsupport for Joseph Estrada in the elections due to his rumored “womanizing” ways; the participation of bishops Gaudencio B. Rosales and Socrates B. Villegas in whisking off a witness with the “Hello, Garci” tapes from his safe house to the military; and its refusal to join the peoples’ demand for President Arroyo to resign in the height of the scandals. The significance of how the Church can impact politics
should not be disregarded. But should the Church and our political leaders fight for who is in the hearts and minds of the Filipinos? It need not be so. While the State and the Church have different jurisdictions—the State taking care of the basic material and economic needs of its citizens and the Church the spiritual purpose and ends of the ecclesia. They both minister to the wants and desires of the same group of people with the ultimate goal of achieving the common good. As such, there is strategic advantage for both to work together in a collaborative but discerning environment.
Inherent differences
AS Fr. Alex Balatbat, my friend in the clergy, advocated, “the Church and State must agree to disagree, and allow both sides to perform their distinct functions, which are both geared toward the best welfare of our people”. Furthermore, he said, “like husbands and wives, disagreements and opposing views should be treated as normal and not be a basis to be violent against each other. Instead, differences should make the relationship stronger”. The Church is a strong, influential social force, while the government has vast resources and capabilities. Putting them together and achieving unity of purpose will forge a formidable partnership for the improvement of the Filipino lives. We have seen this throughout our history as a people and as a nation. Leaders come and go both within these two groups but the institutions remain. There is still so much to be done, and the partnership between these institutions should drive us to greatness once more. And so the Proverbs say, “without wise leadership, a nation is in trouble,” and that “Godliness exalts a nation”. Moving forward together is divinely possible. For comments and suggestions arielnepo. businessmirror@gmail.com.
Invalidating RR 10-2008 Atty. Esther M. Weigand
Tax law for business
O
N January 24 the Supreme Court (SC) nullified Sections 1 and 3 of Revenue Regulations (RR) 10-2008, the implementing regulations of Republic Act (RA) 9504. Recall that RA 9504 amended certain provisions of the National Internal Revenue Code by, among others, increasing the basic personal exemption for individual taxpayers to P50,000 and the additional exemption for each dependent to P25,000. The same law granted minimum-wage earners (MWEs) exemption from payment of income tax on their minimum wage, including holiday pay, overtime pay, night-shift differential and hazard pay. The law became effective on July 6, 2008, after it was signed by the President and the required publication was made.
In implementing the new law at that time, RR 10-2008 made the availment of the benefits of the law effective only on July 6, 2008, the date when RA 9504 took effect. For the increase in personal
and additional exemption, this was done by pro-rating over a period of six months. Likewise, RR 10-2008 made the exemption of the income of MWEs subject to some conditions. Essentially, an MWE would
I
N another lesson from Jesus regarding discipleship, we are told that trusting God who cares for us should liberate us from our anxieties and make us free to focus on our commitment to God’s kingdom (Matthew 6:24-34).
Focusing on the kingdom of God The absolute loyalty Jesus demands of His disciples is founded on the truth that no one can serve two masters at the same time. And what can possibly rival our commitment to God, if not wealth? Money or wealth (mamonas = kayamanan) here stands for earthly goods in contrast to heavenly realities. Inordinate attachment to money easily becomes idolatry of worldly possessions. What fills up our consciousness and with what we identify ourselves is what dominates and masters us. What we do accept as our ultimate value dictates our actions and insists that we attend to it wholeheartedly, relativizing other concerns. For the followers of Jesus that cannot be money but the kingdom of God. To have wealth is not bad;
possessions is not being rejected here, but any inordinate attachment to them is incompatible. Jesus is not being naïve or simplistic about our human need for food, clothing, shelter and material support, nor is He espousing laziness or passivity. He is setting our priorities straight and putting our material needs in their proper perspective. God is to be valued above all; only God is master to us, and we serve only God. This fundamental choice makes all other choices fall into place. We know that money cannot be the real foundation of our security; only God can provide us with the real, lasting security.
Overcoming anxiety with trust in God
Choosing God means faith in
Thursday, February 23, 2017 A11
God’s goodness and providence. Jesus points out that if God provides for the birds and the flowers, how much more does God provide for His more precious creatures, human beings made in His image and treated as His children? We are prone to be anxious about our daily needs, but we must learn to trust that God provides us abilities and opportunities to procure what we need. We have to be conscious that life is more than just food or clothing. Life is a gift from God; it is more than just an anxious project how to survive. Life is about love, companionship, activities that are ennobling and beneficial to all, etc. Worrying in itself is ineffective and nonproductive; it accomplishes nothing. Chronic anxiety in its future thrust is paralyzing in that worrying about tomorrow makes today so emptied of living. As it is said, live life one day at a time; take on tomorrow with its own loads when it becomes today. Frantic worrying, indeed, shows little faith, which means that one has not contemplated on how God takes care of His loved ones, or how the revelation of Jesus assures us of divine providence. To join Jesus on His level of consciousness means to be freed from preoccupation with
Fate of mining industry up to Duterte
Duterte says he will ensure due process will be observed this time around, explaining the closure of mines should be weighed in with the loss of jobs and economic disruptions Lopez’s closure order will cause. In trying to untangle such mess, what I believe the government and mining stakeholders should focus on is whether there is truth in her assertion that those she ordered closed are really operating in watersheds and if the mining firms concerned are creating environmental havoc. Lopez earlier ordered the closure of 23 mines and the termination of 75 mineral production sharing agreements, claiming they are all operating in watershed areas. She also says mining should be prohibited both in legally decreed and “functional” watersheds. This assertion, I find disturbing. Can she, as Department of Environment and
Natural Resources (DENR) secretarydesignate, amend or totally abolish an established jurisprudence? What I know is that mining activities are prohibited by law in watersheds declared as “critical”, and that it is beyond Lopez to declare which, because only Duterte as the country’s president has that power.The Revised Forestry Code, or Presidential Decree 705, issued in 1975 defines a watershed as “a land area drained by a stream or fixed body of water and its tributaries having a common outlet for surface runoff”. The law also describes a “critical watershed” as “a drainage area of a river system, which supports existing and proposed hydroelectric power, irrigation works or domestic water facilities that need immediate protection or rehabilitation”. The DENR’s River Basin Control Office has identified 142 critical watersheds
across the country. From where I sit, the law does not say anything about “functional watersheds”, and if we go by Lopez’s definition, then even Edsa nestles on a watershed. Now, let’s delve into the issue of whether these mining operations pollute the waters. In September 2015 Mines and Geosciences Bureau OIC Regional Director Danilo U. Uykieng supported the earlier findings of local geologists that there is no nickel contamination in the rivers of Zambales. In a Senate hearing, Uykieng said, upon questioning by Environment Committee Chairman Francis G. Escudero, “…for the record, Your Honor, there is no actual nickel contamination in Zambales. However, there is impact on the sedimentation because of natural erosion.…” Such pronouncement echoes the findings of local geologists, who said earlier that what caused the color of the Zambales rivers to turn reddishbrown was soil erosion, which occurs during heavy rains. They claimed the soil in the mining areas is rich in nickel laterites, which render the area inhabitable by large trees. Trees are a natural deterrent to soil erosion, as they rein in the soil they are planted on. They explained that, even without mining, the soil will cascade downstream and cause the waters to turn reddish-brown. This
be exempt from tax if his or her bonuses and other additional benefits do not exceed the allowable amount (ceiling) of other benefits of P30,000 (now P82,000). If such worker or employee does not pass the requirement, his or her entire earnings are not exempt from income tax. Consequently, his or her minimum wage will be subject to withholding tax. In declaring the July 6, 2008, effectivity of the new benefits, as provided in RR 10-2008, null and void, the Court ruled RA 9504, being a social legislation, should be enjoyed by individual taxpayers for the entire year of 2008, and not just beginning July 6, 2008. The Court also noted the policy in this jurisdiction, especially on personal and additional exemptions, is full taxable year treatment. As to the added condition for the entitlement of MWEs to tax exemption, the Court declared that the added requirement is not found in the law. Hence, it was also nullified. Because of these pronouncements, the SC directed both the
secretary of finance and the commissioner of internal revenue to grant a refund or allow the application of the refund by way of withholding-tax adjustments, or allow a claim for tax credits by (i) all individual taxpayers whose incomes for taxable year 2008 were subjected to the prorated increase in personal and additional tax exemptions; and (ii) all MWEs whose minimum-wage incomes were subjected to tax for their receipt of the 13th month pay and other bonuses and benefits exceeding the threshold amount. According to the National Statistics Authority, the total number of employed persons in 2016 was approximately 40.8 million. With this, wage and salary workers accounted for 61.7 percent of the total employed persons, with employees in the private sector accounting for the largest number at 48.2 percent. For the period January 2001 to October 2004, about 43 percent to 53 percent of employed Filipinos were wage and salary workers. Assuming that such statistics also apply for the
year 2008, the finance department and the Bureau of Internal Revenue (BIR) would have to review millions of taxpayers’ records to determine the correct amount of taxes to be refunded, only to comply with the SC’s directive. With administrative feasibility being one of the pillars of a sound tax system, compliance with the Court’s directive to grant the refund could cause undue burden upon the government, and even the taxpayers who could be forced to prove their entitlement to the refund. It would be best if the finance department and the BIR issue rules for the efficient implementation of the SC’s order. The portion that has impact in the present and future tax compliance, though, is the nullification of the added condition for the exemption of MWEs. Both the employers and the employees should now be aware that the minimum wage should always be exempt from tax, even if the employee earns other income over and above the ceiling of the nontaxable other benefits. The taxation of
Val A. Villanueva
Businesswise
I
T looks like President Duterte will have the final say on what to do with what he calls “the mess” created by Environment Secretary-designate Regina Paz L. Lopez.
physical survival and to have one’s life grounded in God and in creative service to others. It is with confidence to seek first the kingdom of God and its righteousness. Alálaong bagá, putting wealth or money concerns topmost in my hierarchy of values comes down to building my life on shifting sands. It is to serve a master who cannot deliver, who cannot actually free me from endless worries. Material possessions cannot secure anyone against death, nor do they automatically bring happiness, much less eternal peace and joy. But we have to get our material needs provided for, so that we can move on to more important projects in life. We need to integrate our money concerns with our real priorities as disciples of Jesus, and always on the alert that perishable goods have the tendency to consume and master us, turning us into slaves and captives and obstructing our full growth as God’s liberated children. In God alone is our fullness and our absolute trust; no substitute satisfies. To follow Jesus is to be confident of the divine love and mercy. Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on dwIZ 882, or by audio-streaming on www.dwiz882.com.
phenomenon has been going on for centuries and cannot be attributed to mining, they said. Perhaps, this was what Lopez saw from the vantage point of a helicopter when she did an ocular inspection of the affected areas. Based on the visual images she saw, she made that erroneous decision, glossing over the latest scientific findings of her own people in the audit report. There is no question that the environment should be protected, but a rational DENR secretary should be adept at striking the balance between the need to preserve our ecosystem and the need to harness our natural resources for the benefit of all. For as long as we rely on products and services related to mining, the government should see to it that access to them should remain unhampered, and that regulatory agencies are on their toes for any signs of abuse. The Mining Act is pregnant with clauses that control the operations of mining companies. All the government has to do is implement them with vigor, but never constrict mining operations to the detriment of their host communities, which rely on the industry, and the national treasury to which these companies make substantial contributions. For comments and suggestions, e-mail me at mvala.v@gmail.com.
the excess over these other benefits should not affect the exemption of the minimum wage. As the Court says, the law exempts the amount afforded to the lowest paid employees and should always be exempt from tax. These rules may, of course, change again with the tax-reform program being crafted by Congress. And as we have learned from this new case, a new beneficial rate, regardless of when the law becomes effective, should be available for the whole year, unless the law itself will provide for its effectivity. The author is a senior associate of Du-Baladad and Associates Law Offices (BDB Law), a memberfirm of WTS Global. The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at esther.weigand@bdblaw.com.ph or call 4032001, local 340.