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PHL’s ‘Smart Cities’ dream: Too slow? Part Two
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he concept of Smart Cities involve innovations in the transportation sector,” University of Bremen Prof. Hans Dietrich Haasis said. “The mobility industry will push the development of the traffic situation anywhere.” Haasis’s view that modern transportation network is an important component of a smart city is shared by local experts. “Of course it is—integrated with communications,” said Alvin P. Ang, Economics professor at the Ateneo de Manila University. University of Asia and the Pacific Dean of Economics Cid L. Terosa noted that a modern transportation network is one of many potential results of efforts to establish a smart city. “The major components of a smart city program is information and communications technology, digital technologies, and the integration of these systems to enhance the features of cities and manage their resources.” To this end, the transportation department—as early as the Aquino administration—has been pushing for innovations in the transport sector, such as the modernization of old jeepneys. Former Transportation Secretary Joseph Emilio A. Abaya drafted the jeepney-modernization program to ensure the safety of commuters and help mitigate the impact of climate Continued on A2
Passenger jeepneys are parked in Makati City, as drivers all over the country went on strike on Monday to protest the planned phaseout of the most popular mode of transportation in the Philippines. NONIE REYES
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Tuesday, February 28, 2017 Vol. 12 No. 139
‘Miners doomed to fail as DENR’s audit biased’ T RADERS and scientists are clamoring for a re-audit of mineral resources and policy, as industry players and the government continue to lock horns on the future of the country’s mining sector after the release of the results of what was deemed as a “biased” audit. The head of the National Institute of Geological Sciences (NIGS) on Monday called for a “proper audit” on the mining industry.
Duterte views Phl-made Mitsubishi Mirage up close By Tet Andolong
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@earth_journey
ITSUBISHI Motors Philippines Corp. (MMPC) presented on Monday the first Philippine-made Mirage G4 to President Duterte in a ceremony held at Malacañang, which was headed by Mitsubishi Motors Corp. (MMC) President and
CEO Osamu Masuko, Sojitz Corp. Vice Chairman Shijeki Dantani and MMPC President and CEO Yoshiaki Kato. The event marks a symbolic milestone not only for Mitsubishi Motors but for the local automotive industry and the Philippine economy. The 21-hectare manufacturing plant in Santa Rosa, Continued on A12
PESO exchange rates n US 50.1970
“A proper audit should be done, not only to determine the status of mining, but also to allow millions of Filipinos to continue working,” NIGS
ARCILLA: “A proper audit should be done, not only to determine the status of mining, but also to allow millions of Filipinos to continue working.”
Director Marco Arcilla told reporters in a news conference. Arcilla called the government’s audit as “bad”, as Environment Secretary Regina Paz L. Lopez “have See “Miners,” A2
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Getting closer to sustainable and inclusive growth
The Entrepreneur Manny B. Villar
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he Philippines’s ranking as one of the fastest-growing economies in Asia, beating even global powerhouse China, is made more significant by the fact that the country is turning out an impressive performance while the global economy is being rattled by uncertainties, such as the United Kingdom’s exit from the European Union, and rising protectionism, particularly in the United States. Despite the volatilities in the international markets, our fundamentals remain strong. Only the stock market is weakening, but it’s also happening all over the world. Our tycoons continue to invest, even in areas they shunned in the past, like Mindanao. Continued on A10
BSP sees above 3% inflation in Feb By Bianca Cuaresma
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@BcuaresmaBM
onsumer prices may have increased significantly in February, as the Bangko Sentral ng Pilipinas (BSP) said it expects inflation this month to hit the highest rate recorded by the Philippines since November 2014. In a statement sent to reporters on Monday, Central Bank Governor Amando M. Tetangco Jr. said
the BSP’s current models suggest that February inflation could settle within the 3.1 percent-to-3.9 percent range. This means inf lation could have expanded from the 2.7 percent recorded in the previous month. The projected February inflation is also a stark contrast to the 0.9 percent rate seen in the same month last year. The BSP’s projection also indicates that the country’s inflation
3.7% The inflation recorded in November 2014, the last time it breached the 3-percent mark
rate would hit above 3 percent for the first time in more than two years. The last time Philippine inflation breached the 3-percent mark was last November, when it settled at 3.7 percent. “The increase in domestic petroleum prices, jeepney and taxi fares, and electricity rates of Manila Electic Co.-serviced areas could exert upside pressures to inflation during the month,” Tetangco said.
n japan 0.4478 n UK 62.6459 n HK 6.4680 n CHINA 7.3067 n singapore 35.7529 n australia 38.5111 n EU 53.0632 n SAUDI arabia 13.3851
See “BSP,” A2
Source: BSP (27 February 2017 )
BMReports BusinessMirror
A2 Tuesday, February 28, 2017
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PHL’s ‘Smart Cities’ dream: Too slow? Continued from A1
change through e-jeeps, which feature a reloadable card-payment system, global positioning system navigation device, Internet and closed-circuit television camera. Abaya had planned to start phasing out the jeepneys this year until all have been replaced by high-technology and environment-friendly vehicles that lessen air pollution. Currently, there is a draft department order (DO) from the transportation department that, when it takes effect in August, shall require operators to replace their old units with new ones. According to the DO, each operator is required to have a minimum capitalization of P7 million, and should have at least 10 units to have a franchise to operate. Of course, jeepney drivers and operators will not just take these changes sitting down. And judging from the transport strike staged by jeepney associations on Monday, the country is still very much dependent on this type of public-utility vehicles (PUVs), with several cities paralyzed resulting in suspension of classes, according to reports. T he n at ionw ide t ra nspor t strike put Metro Manila at a standstill, even as jeepney and other public-transportation drivers in Cebu, Iloilo, Albay, Catanduanes and Camarines Norte
Miners. . .
Continued from A1
included in her audit team people who are ideologically against mining.” “Basically, we don’t turn our backs to science and engineering,” he told reporters. “In the final analysis, who will clean and actually do the job are engineers and scientists.” According to Arcilla, Lopez’s audit had been biased from the start because she included among them Alyansa Tigil Mina (alliance to stop mining) and former Mines and Geosciences Bureau (MGB) Director Leo L. Jazareno, whom Lopez appointed DENR consultant. “The MGB could have done the audit as long as they are transparent from the start, but Jazareno
joined their colleagues in Manila to protest the government’s plan to phase out the iconic jeepneys that have provided cheap and reliable transportation to Filipinos since the end of World War II. Throughout the National Capital Region, thousands of commuters walked to their places of work and other destinations, as some drivers of jeepneys, tricycles and buses refused to ply their routes. The strike was called by the Pagkakaisa ng mga Samahan ng Tsuper at Opereytor Nationwide (Piston) and supported by Anakbayan, Kabataan Party-list and other causeoriented groups and their affiliates nationwide. The head of the Cebu chapter of Piston, Greg Perez, claimed 80-percent paralysis in Metro Cebu. Danny Garcia, spokeman of Albay Gov. Al Francis C. Bichara, placed at 65 percent the number of striking public-transport drivers in the province. Albay was joined by drivers and operators in Camarines Norte and some sympathetic public-transport drivers in Catanduanes. Strikers were also present in Iloilo City, where a strike center was manned by members of Piston, Anakbayan and the Kabataan Party-list, and local drivers. In Davao no transportation-related strike took place, but Bayan led allied organizations and 500
people in marching in Davao City to call for the resumption of peace talks between the government and the Communist Party of the Philippines and the National Democratic Front. Government officials in Metro Manila, including from city governments, the Departments of Education and Transportation, and the Metropolitan Manila Development Authority (MMDA) preempted the worsening of the strike by announcing the suspension of classes at all levels. A c t i n g M M DA C h a i r m a n Thomas Orbos said his agency already announced last Sunday the number-coding scheme for PUVs was lifted to minimize the adverse effect on vehicle owners. He said over 100 vehicles from private and government agencies were deployed on Monday for stranded passengers. There were also shuttles provided by the Land Transportation Franchising and Regulatory Board (LTFRB) for commuters, but these seemed i n su f f ic ie nt to a ssi st me m bers of the riding public who walked several kilometers to reach their destination. In Metro Cebu Perez said several jeepneys were still plying the usual routes of Mambaling, Bulacao and other parts in southern Cebu City. Cebu has 11,000 jeepney units, but Perez could not confirm if 9,000 jeepney units joined the strike.
LT FR B -7 D i rec tor A h med Cuizon claimed only 20 percent of public transport in Metro Cebu was affected, mostly in Lapu-Lapu City and some parts of Mandaue City, from 7 to 8 a.m. He said the striking vehicles were immediately augmented by LTFRB buses with special permits, and other government buses and vehicles. In Mandaue City Traffic Enforcement Agency of Mandaue operation chief Glen Antigua said 15 percent of public transportation affected in the city. He said 15 vehicles were deployed by the city government to ferry stranded passengers. Camarines Norte police provincial director Senior Supt. Rodolfo Dimad said classes in all levels were not suspended. He identified the towns of Daet, Santa Elena, Labo and Vinzons as those that joined the transport strike. The strikers were mostly Piston members, he said. The government also needs to create an efficient rail system in addressing the country’s transport woes, according to the former Deputy Mayor and Central District Mayor of Madrid, Spain. Pedro Ortiz, who is currently serving as a Senior Metropolitan Consultant at the World Bank, said in a presentation last year that Metro Manila’s semicircular road networks have caused traffic to worsen. “Making circles in the end cre-
ates congestion because there’s a barrier between the edge of the circle and the inside of a circle. The radials then are pulling down cars into the center,” Ortiz told the BusinessMirror after his presentation. “You should open up that circular system into a linear [system], but the most important is using the rail tracks to produce a modern rail system.” Based on the 2010 Census, Metro Manila is home to nearly 12 million Filipinos. Ortiz said if Metro Manila increases its population by 5 percent every year, the metropolis can double in size every 14 years. And if the residents in Metro Manila continue buying cars, it will just make it more crowded and could reach the car-saturation point of eight cars for every 10 people. “If Manila is at the level of two cars every 10 people, you must realize that you will have four times more cars on the streets, four times more cars. But if Manila is growing in population, you have to multiply that, as well,” Ortiz said. Ortiz said rail systems not only take advantage of Metro Manila’s naturally linear landscape, but also provide a good alternative for motorists to not buy cars or not use them every day. He said rail systems in cities abroad, like New York and Mumbai, are used by 8 million people. This
helps ease the traffic on the streets. This will be significant for cities like Metro Manila, which has experienced a rapid increase in motorization. “The problem with the Philippines as in many other countries is that motorization is going very fast. You must know that the saturation point of motorization is eight cars every 10 people; seven-to-eight cars every 10 people. And when you reach that level, you don’t buy more cars, you just buy cars to substitute the old ones,” Ortiz said. Ang said heavy vehicular traffic in the megacity of 14 million Filipinos is a threat to the goal of increasing labor productivity in the country. This is just one of the many economic losses attributed to traffic. In 2014 the Japan International Cooperation Agency (Jica) estimated that Metro Manila’s traffic costs could balloon to P6 billion a day by 2030. Jica said this 2.5 times the current estimate of P2.4 billion a day. The study also stated that without intervention, traffic demand could increase by 13 percent in less than two decades. This also means that households need to spend no less than 20 percent of their monthly household income for transport.
worked under the previous administration of former President Benigno S. Aquino III before he was appointed by Lopez, which means he approved a lot of contracts that are now being questioned,” Arcilla told the Business Mirror. On February 2 the DENR announced the closure of 23 mining operations, saying many of them were operating in “functional watersheds”.
canceled as Lopez alleged their mining operations are situated within or near watersheds. SMMCI and PGPI are both wholly owned subsidiaries of Philex Mining Corp., which operates the Padcal mine in Tuba and Itogon, Benguet. Covered by the SCOs are the MPSA (149-99) of SMMCI for the Silangan Gold Project. The order for PGPI covers MPSAs for its following projects: Sibutad (063-97IX), Vista Alegre (096-97-VI), Tambis (344-2010-XII) and Lascogon (148-99-XIII). Prior to issuing the SCOs, Lopez earlier ordered the suspension or cancellation of 28 mining operations purportedly to protect watersheds from the adverse impact of mining to the environment. More than a week later, the
DENR chief came up with a decision canceling 75 mining contracts awarded to various mining companies—27 in Luzon, 11 in the Visayas and 37 in Mindanao. In their letter responding to the SCOs, the SMMCI and PGMI said they were awarded the MPSAs after being subjected to the rigorous process prescribed by applicable law and regulations, which included obtaining the requisite regulatory clearances. The two companies insisted that the areas covered by the MPSAs are open to mining, are valid and are legal. “Mining is not prohibited in all watershed areas,” the company said. “Under Philippine law, only watersheds that are proclaimed, designated or set aside pursuant to law or presidential decrees,
presidential proclamations or executive orders, as watershed forest reserves or as critical watersheds are closed to mining operations.”
the Philippine Mining Act of 1995, the Chamber president said. “Anyone that is given a mining permit must consume the ore that he gets in manufacturing finished products,” Yulo said. “If there’s a surplus, then you can export.”
Off-limits
ON Monday the Silangan Mindanao Mining Co. Inc. (SMMCI) and Philex Gold Philippines Inc. (PGPI) filed separate letters in response to the show-cause orders (SCOs) the DENR issued on February 13. The mining contracts of SMMCI and PGPI were among the 75 mineral production sharing agreements (MPSAs) threatened to be
Middle ground
WHILE thinking along the same line as Arcilla’s, some traders are offering a middle ground. The Chamber of Commerce of the Philippine Islands (CCPI), the country’s oldest, is encouraging government to issue a regulation of the country’s mineral resources that is geared toward building up the local industrial supply c hain, suggesting a review of the mining law. CCPI President Jose Luis U. Yulo Jr. said the Chamber is espousing a “balanced view” of encourage more in-country manufacturing. “We shouldn’t just get the ore and export it to other countries, and import the finished products,” Yulo told reporters. He explained that private companies “should commit to making these in the country and when they do so, they can have access to the mines”. “In turn, when they build up the factories in these areas near the source, you need to take care of the area and this area will develop,” Yulo said. “But make sure you follow environmental rules.” Enticing companies to build up the supply chain using mineral ores as raw materials—such as copper and nickel—will not just increase employment in the industrial sector but scale up human resource skills in the sector, according to Yulo. Once the country builds enough capacity to be able to produce finished products, there can be a minimal allocation of the mineral ores to countries in need of the raw resources, he explained. This proposal merits a review of
BSP. . .
Continued from A1
This expected strong uptick in February, however, is seen to be temporary as the pressures affecting the local prices are largely coming from supply-side issues. “Moving forward, the BSP will continue to monitor closely emerging price conditions to ensure price stability conducive to a balanced and sustainable economic growth,” Tetangco said.
To be continued Lorenz S. Marasigan, Cai U. Ordinario, Manuel Cayon, Claudeth Mocon-Ciriaco, Henry Empeño, Charles Pepito, Manly U. Ugalde
Political decision
ARCILLA said if the earnings are averaged for the entire country, “it would appear that the Philippines earns only 1 percent [from mining], but since mining is occurring in only 3 percent of the country, those 3 percent will lose a lot.” He cited as example Palawan. Arcilla said in 2015 the province earned P23 billion from laterite mining while its tourism receipt was only P10 billion. This meant “mines earn twice more than tourism,” he said. Arcilla added the richest mining is in eastern Mindanao and the Caraga region for its rich chrome, copper and chromite deposit. “ The countr y will not lose much if these mines are closed but pity the 1.2 million workers who would be affected, directly and indirectly,” Arcilla said. He added that small-scale mining operations for gold in Davao represents 80 percent of the country’s total gold production, while 20 percent comes from all of the country’s biggest mines. “These small miners are not taxed. If we allow the big mine operators to extract the gold, we will earn taxes from but would deprive 100,000 people of their jobs.” “This is a political decision and President Duterte knew the big- time miners there,” Arcilla said. “He [Duterte] could solve the problem, provided that we solve the sharing scheme.” Recto Mercene, Catherine N. Pillas and Jonathan L. Mayuga
Earlier this month, BSP Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo said the central bank now expects inflation to hit 3.5 percent this year, higher than the earlier assumption of 3.3 percent. For 2018, inflation is expected to settle at 3.1 percent, also faster than the 3 percent projected earlier. Guinigundo cited higher oil prices and the depreciation of the peso in the last quarter of 2016 as factors that would put pressure on inflation.
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Group presses immediate implementation of RCOA By Joel R. San Juan @jrsanjuan1573
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AYAN Muna Chairman Neri J. Colmenares has warned that the restraining order recently issued by the Supreme Court (SC) against the enforcement of several orders and regulations promulgated by the Energy Regulatory Commission (ERC) and the Department of Energy (DOE), in relation to retail competition and open access (RCOA), would only benefit big power distributors. In a statement, Colmenares said the temporary restraining order (TRO) issued by the SC would prevent many power consumers from having a choice of where their electricity will come from, and at what price. On Tuesday last week, the SC temporarily barred the government from implementing new regulations that compel big consumers to enter into a power-supply deal with any of the retail electricity suppliers (RES) accredited by the DOE and the ERC by February 26. SC Spokesman Theodore O. Te said the Court issued a TRO stopping the implementation of DOE Circular DC2015-06-0010 and ERC Resolution 5, Series of 2016; Article I, Sections 2 and 3 thereof; ERC Resolution 10, Series of 2016; ERC Resolution 11, Series of 2016; and ERC Resolution 28, Series of 2016. The TRO was issued by the 15-man High Tribunal during the regular en banc session on Tuesday last week. “Delaying or stopping open access
works in favor of big distributors,” Colmenares, a former senior deputy minority leader in the House of Representatives, noted. Energy Secretary Alfonso G. Cusi earlier said the energy department is duty-bound to implement RCOA, a key provision of Republic Act 9136, or the Electric Power Industry Reformt Act of 2001 (Epira), despite the SC TRO. Cusi said consumers should have the freedom of choice as to which power provider they prefer to deal with. “The spirit of the RCOA is giving the consumers the freedom of choice, which would result in higher productivity for them. And the power of choice can only be maximized when there is a level playing field for all suppliers,” Cusi said. “It is hoped that whatever the decision by the Supreme Court, it will redound to the ultimate benefit of the consumers, which is really the intent and the spirit of RCOA,” he added. Energy Undersecretary Felix William Fuentebella said the DOE, ERC and the Philippine Electricity Market Corp. will come out with a unified policy for RCOA to address the concerns of the industry players that are affected by the SC ruling. The DOE, Fuentebella said, is determined to explore “all legal remedies”. Under the RCOA, which will be enforced in phases, consumers are allowed to choose their supplier of electricity to encourage competition in the generation and supply sector.
Editor: Dionisio L. Pelayo • Tuesday, February 28, 2017 A3
Ombudsman sacks 2 Enrile aides, 10 others for Pdaf scam By Jovee Marie N. dela Cruz
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@joveemarie
HE Ombudsman has ordered the dismissal, perpetual disqualification from holding public office and forfeiture of all retirement benefits of two staff members of former Sen. Juan Ponce-Enrile and 10 others for their involvement in the Priority Development Assistance Fund (PDAF) scam. Ombudsman Conchita CarpioMorales said the 12 were found guilty of grave misconduct, conduct prejudicial to the best interest of the service and dishonesty. Morales ordered the dismissal of Jessica Lucila Reyes, chief of staff of Enrile; and Jose Antonio Evangelista II, deputy chief of staff of Enrile. She said Victor Roman Cacal (paralegal, National Agribusiness Corp.); Gondelina Amata (president, National Livelihood Development Corp. [NLDC]); Chita Jalandoni (department manager III, NLDC); Emmanuel Alexis Sevidal (director IV, NLDC); Ofelia Ordoñez (cashier,
NLDC); Filipina Rodriguez (budget officer, NLDC); Sofia Cruz (project development assistant IV); Dennis Cunanan (director general, Technology Resource Center [TRC]); Consuelo Lilian Espiritu (budget officer, TRC); and Marivic Jover (chief accountant, TRC) were also dismissed. “In the event of separation from the service, the penalty is convertible to a fine equivalent to respondent’s salary for one year,” Morales said. Reyes and the others are also being tried before the Sandiganbayan for their alleged involvement in the anomalous utilization of the 2007 to 2009 Pdaf of Enrile.
Morales said that, from 2004 to 2010, Enrile continuously endorsed the implementation of his Pdaffunded livelihood and agricultural production projects in different parts of the country to questionable nongovernmental organizations (NGOs) associated with or controlled by Janet Lim Napoles. From 2007 to 2009, Morales added, a total of P345 million was released by the Department of Budget and Management as part of Enrile’s Pdaf. “The P345-million fund was allegedly used to buy tools and implements, financial grants and subsidies, technical assistance technology transfer through video courses, printed materials, vegetable seeds, hand tools, gloves, masks, vests, caps, garden tools, knapsack sprayers, fer-
tilizer, gardening packages, rakes, agricultural livelihood packages, agricultural chemicals and small-scale agri packages,” she said. Morales said based on testimonial and documentary evidence presented, the widespread misuse of the Pdaf allotted to a legislators was coursed through a complex scheme basically involving projects supposed to have been funded by said Pdaf, which turned out to be inexistent or “ghost projects”. “In most instances, the disbursement vouchers [DV] were accomplished, signed and approved on the same day. Certainly, the required careful examination of the transaction’s supporting documents could not have taken place if the DV was processed and approved in one day,” she added.
Economy
A4 Tuesday, February 28, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon
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Ubra thumbs down extension of EO 190
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By Jasper Emmanuel Y. Arcalas
that technical smuggling of meat products is “rampant”. “The records of the Senate Committee on Agriculture under its thenChairman Sen. Cynthia A. Villar, in its investigations into the smuggling of agricultural products, are replete with proof that the MDM tariff differential has been extensively utilized to commit technical smuggling,” Inciong said. He said the argument of the meat-processing sector that MDM is beneficial to consumers to retain the 5-percent tariff is “baseless”. “MDM is meant to be a mere extender or filling material. But since meat processors do not label processed-meat products to indicate the level or rate of inclusion of MDM, how can the consumer determine the value of the product they are buying?” Inciong asked. The Ubra chief said the lack of proper labeling on meat-processed products poses a health concern for consumers. Citing the
@jearcalas
oultry growers belonging to the United Broiler Raisers Association (Ubra) expressed their opposition to the extension of an executive order (EO), which reduced the tariff on mechanically deboned meat (MDM) to 5 percent.
In a position paper it submitted to the Tariff Commission on February 24, Ubra said the tariff discrepancy of 35 percent between MDM and chicken-leg quarters has been “abused” by meat importers to avoid paying higher duties. “We vehemently oppose any proposal to maintain the tariff for MDM at 5 percent beyond the expiration of the quantitative restriction
[QR] on rice,” Ubra President Elias Jose M. Inciong said. “Also, the supposed benefits to the consumers of a lower tariff are, at best, unclear. There are no labels as to the inclusion rate of MDM in processed-meat products,” Inciong added. Citing the records of the Senate Committee on Agriculture, he said there is “sufficient evidence” to show
Food and Drug Administration, Inciong said the safe level of MDM inclusion in meat processing is a maximum of 20 percent. “The representative of the meat processors said, however, that they were using up to 80 percent,” Inciong said, referring to the oral argument of a meat-processing industry stakeholder during the public hearing on EO 190 on February 16 at the Tariff Commission. “Until and unless the meat processors label their products accordingly, there can be no basis for claims about consumer ‘benefits’,” Inciong added. Last week Trade Secretary Ramon M. Lopez said the President Dutertechaired National Economic and Development Authority Board has approved the extension of EO 190. Under EO 190, the 5-percent tariff on MDM will go back to 40 percent upon the lifting of the QR on rice on June 30. The World Trade Organization (WTO) granted the request of the Philippines to extend the QR on rice until this year. In return, Manila had to lower tariffs on offal and MDM, as well as dairy products, oil-seed meals and frozen potatoes. The government also had to increase the minimum access volume (MAV) for rice to 805,200 metric tons (MT). Rice exported to the Philippines under MAV is slapped a tariff of 35 percent, lower than the 50-percent out-MAV duty.
‘Useless QR’
Inciong, who also serves as vice president of non-governmental organization Alyansa Agrikultura, said the government has failed to make the local rice sector competitive de-
spite the two-decade QR on rice. “The QR was supposed to protect the rice sector by buying it time to achieve competitiveness. By ‘buying’, it meant paying compensation or concessions under the WTO system,” he said. “Among such concessions was the reduction of the tariff on MDM from 40 percent to 5 percent. The resulting tariff differential has been injurious to the local broiler industry,” Inciong added. He said “governance problems”, such as smuggling and unfair trade, have undermined the effectiveness of QR as a protection for the rice sector. The Asia-Pacific Network for Food Sovereignty (APNFS) threw its support behind the Department of Agriculture’s position to extend the QR on rice by two more years to make Filipino farmers competitive. “We, from the APNFS, believe that with increased subsidies in seeds, fertilizer, crop insurance, investments in irrigation and agriculture machineries, and postharvest and marketing support small-scale farming will make our coutnries food self-sufficient,” the group said in a statement. APNFS is a regional coalition of 35 civil-society organizations, national farmer federations, fishermen’s associations and women’s organizations from the Philippines, Indonesia, Malaysia, Vietnam, Cambodia, Myanmar, Sri Lanka, Bangladesh and India. APNFS said the Philippines should capitalize on its chairmanship of this year’s Asean Summit and seek support from neighboring Southeast Asian countries to boost its own local rice sector.
Sanctions await firms exposing minors to hazardous work conditions—DOLE By Charles R. Pepito Correspondent
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EBU CITY—The Department of Labor and Employment (DOLE) cautioned firms against employing minors and exposing them to any work or economic activity that subjects them to any form of exploitation. DOLE-7 Director Exequiel Sarcauga said the government has already expanded the coverage of the ban on the employment of minors. In a department order recently issued by Labor Secretary Silvestre H. Bello III, the guidelines in assessing and determining hazardous work in the employment of persons below 18 years old have been amended. “The DOLE is now more stringent and precise in determining activities
that would form part of the worst forms of child labor. Apart from the ones mentioned in Department Order [DO] 149, Series of 2016, additional activities that would constitute child labor have been identified in the new issued by the secretary,” Sarcauga said. Under DO 149-A, Series of 2017, farming activities, such as grafting; budding and marcotting; and tending activities that involve weeding of soil, are now among the worst forms of child labor. Other farm activities that would fall under the same category included clearing of land, plowing, harrowing, irrigating, constructing paddy dike and cutting. Also considered hazardous are handling, spraying and application of harmful fertilizers, pesticides, herbicides and other toxic chemicals, and
loading and carrying of heavy loads. “We want all sectors informed and educated by this new order, especially those in the agricultural sector. Asking children to help out in the farms, especially in the provinces, is very common. We want everybody to know that there are certain activities that minors are not allowed to engage with, even if the intention is helping the family,” Sarcauga said. He said minors are also not allowed to join in harvesting activities that involve cutting and picking; spreading for drying; hauling; topping; tumbling; tuxying; stripping; burning of field; sticking and classifying; threshing; loading; and carting of produce. The new DO also specifies that during postharvest, minors should not be employed in dehusking; scooping; sacking of products; charcoal making; hauling of products as led by animal guide; loading and unloading of packed farm products; coconut kilning and demeating from shell or core; sealing and carting of produce for warehousing; and transport to market, and
all ancillary work, such as clearing cleaning, and recycling of farm waste in its preparation as animal food and other related processes. “In livestock farming, activities that are declared hazardous to minors are rearing, such as collecting, loading, unloading and transporting of feeds; maintenance and care of large and/or dangerous animals; collecting and disposal of dead animals, animal manure and other waste materials; administering of vaccines and vitamins; and handling of disinfectants used for cleaning animal pens and enclosures or for disinfecting animals,” Sarcauga added. Also not allowed are harvesting activities that involve catching or collecting; ranching and milking in preparation for warehousing or transport to market; and postharvest activities, including the packaging and processing of dairy and other animal by-products in preparation for warehousing and transport to market; and working in slaughterhouses or abattoirs. He said any person who violates,
or the employer of the subcontractor who employs, or the one who facilitates the employment of a child in hazardous work shall suffer the penalty of a fine of not less than P100,000 but not more than P1 million, or imprisonment of not less than 12 years, and one day to 20 years, or both such fine and imprisonment at the discretion of the court. In support of the government’s advocacy against child labor, the DOLE-7 last month facilitated the conduct of Project Angel Tree, a component of the DOLE Child Labor Prevention and Elimination Program, which provides an array of social services that range from food, clothing, educational assistance or school supplies, and even work and training opportunities made available by sponsors or benefactors to child laborers and their families. The activity, which took place at the Cebu City Sports Complex, gathered around 117 children, who received goodies, rice, clothing, shoes, slippers and educational supplies from donors.
Online hiring by BPOs seen increasing in Jan-March By Cai U. Ordinario @cuo_bm
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nline hiring efforts in the Philippines, particularly in the business-process outsourcing (BPO), finance and information-technology (IT) sectors, are expected to increase in the Januaryto-March period, according to Monster.com. In a statement, Monster.com Apac and Middle East Managing Director Sanjay Modi said local and international demand is “high” for Filipino workers in the BPO sector, while compliance-related roles and investment banking will increase hiring in the banking, financial services and insurance (BFSI) sector. Modi added that new employment opportunities created by social cloud and mobile space will drive online hiring in the IT sector. “Driven mostly by domestic demand, business outputs have remained stable or experienced some growth. As a result, businesses are keen to hire in the country. Many MNCs [multinational corporations] and local businesses have also chosen to set up in the Philippines, and the demand for talent in the work force is expected to see a spike across all levels,” Modi said. The optimism in the increase in first quarter online hiring activities has been well-supported by the Monster Employment Index (MEI) results in January. Data showed that online hiring in the country saw a 6-percent yearon-year (YOY) growth last January on the back of a double-digit growth in the BPO sector. The BPO/Ites sector reported the steepest growth in online hiring at 22 percent between January 2016 and 2017. Data showed this was higher than the 17 percent recorded last December. This was also the highest growth since May 2016. “The positive annual growth in January’s online recruitment paints a rosy picture for the days ahead of Philippines’s hir ing scene,” Modi said. Meanwhile, the engineering, construction and real-estate sector reported the sharpest decline in online-hiring activity at a contraction of 6 percent YOY. When looking at occupational groups, software, hardware and telecom roles took the lead in online demand, reporting a 25-percent YOY growth in January. This was closely followed by customer-ser v ice professiona l s, wh ic h saw a 17- percent YOY grow th in online-hiring demand.
Fewer Filipinos seen seeking greener pastures abroad by 2025
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he number of Filipinos going abroad is expected to continue declining until 2025, according to a study by the Asian Development Bank Institute (ADBI). Data from the report, titled “Safeguarding the Rights of Asian Migrant Workers from Home to the Workplace”, showed the net migration rate of the country will continue to decline to -0.7 per 1,000 population in the 2020-to-2025 period. The net migration rate is the difference between the number of persons entering and leaving a country during the year per 1,000 population. “If more people immigrate to a country than emigrate from it, the latter gains population from positive net migration. When more people emigrate than immigrate, the country loses population through negative net migration,” the United Nations explained in another report. Data showed that the country’s net migration rate has been declining since the 2010- to-2015 period when it reached -1.4 per 1,000 population from -4.1 per 1,000 population in the 2005-to-2010 period. Despite this, the Philippines continues to be one of the world’s largest labor exporters. Using 2015 data, the ADBI said the country exports almost a million workers to Gulf Cooperation Council (GCC) countries.
“Policies to reduce dependence on foreign workers in GCC countries have also yet to show an effect on the flow of workers. However, the impact of policies directed at the welfare and protection of deployed workers is apparent,” the report stated. Data showed the Philippines exported as many as 406,000 workers to Saudi Arabia; some 227,000 to the United Arab Emirates; another 133,000 in Qatar; and 130,000 in other GCC countries. This reached a total of 896,000 in 2015, around 3.11 percent, from the 869,000 estimated in 2014. The Philippines was also ranked fifth in the world in terms of being a top Asian country of origin of migrants in Organisation For Economic Co-operation and Development (OECD)-member-countries between 2004 and 2014. “Immigration of Asian citizens to OECD countries is at its highest peak ever, driven by rebounds in key destination countries. Asian immigrants in Europe and in North America fare better in the labor market than other immigrant groups, sometimes even better than native-born residents,” the report stated. The report draw on issues raised and discussed during the Sixth Roundtable on Labor Migration in Asia: Safeguarding Labor Migrants from Home to Workplace that was held in Tokyo from February 3 to 5 2016. Cai U. Ordinario
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Tuesday, February 28, 2017
The World BusinessMirror
www.businessmirror.com.ph • Editor: Lyn Resurreccionph
To keep US jobs, chipmakers share a factory and pin hopes on Trump
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EHI, Utah—Nestled at the foot of the Wasatch Mountains here, the IM Flash plant is a paragon of US high-tech manufacturing.
Robots glide along the ceiling, moving silicon wafers the size of dinner plates between hulking machines that deposit and etch microscopic layers of material to build the most advanced memory chips in the world. For the 1,700 technicians and scientists who tend to the robots and troubleshoot problems in the delicate manufacturing process, the jobs offer generous pay and benefits and easy access to Utah’s many outdoor attractions. For Intel and Micron Technology, the two US companies that jointly own and operate IM Flash, the venture allows both of them to sell cutting-edge, three-dimensional memory chips while sharing the multibillion-dollar costs of a modern semiconductor factory. The memory chips produced at the plant are “probably one of the biggest advances of technology in the last 20 years,” said Jon Carter, who oversees Micron’s strategy for new memory products. And, as he was quick to point out, all of the work was done in the United States. “Micron has done a really good job of having a good footprint on the home front,” he said. In many ways, however, the IM Flash plant is an outlier. While
13% The estimated percentage of the world’s chip manufacturing capacity in the US in 2015, down from 30 percent in 1990
companies based in the US still dominate chip sales worldwide, only about 13 percent of the world’s chip manufacturing capacity was in this country in 2015, down from 30 percent in 1990, according to government data. Chipmakers attribute the decline to a variety of forces, including high US tax rates and the hefty subsidies offered by foreign governments for new semiconductor plants, which can cost as much as $10 billion. “It’s quite a bit more expensive to build a factory in the US,” said Stacy J. Smith, the executive at Intel overseeing manufacturing, operations and sales.
A wafer, used to fabricate cutting-edge, three-dimensional memory chips, at the IM Flash plant in Lehi, Utah, on January 27. The jobs of the 1,700 technicians and scientists at the manufacturing facility, jointly owned by Intel and Micron Technology, offer generous pay and benefits, but only about 13 percent of the world’s chip manufacturing capacity was in this country in 2015, down from 30 percent in 1990. Jim McAuley/The New York Times
Intel—which predominantly manufactures in Oregon and Arizona but also has factories in Ireland, Israel and China—estimates that the extra cost for a US plant is more than $2 billion. Chipmakers are hopeful that President Donald J. Trump, who has promised large corporate tax cuts and a tougher approach to trade with China, will help them. Intel ’s chief executive, Brian M. Krzanich, made a public display of his faith in the administration this month when he stood by Trump in the Oval Office to announce that the company would spend $7 billion to complete a leading-edge chip factory in Chandler, Arizona, creating 3,000 full-time jobs. Intel said it was talking with the Trump administration and
Congress about a broad corporate tax cut, as well as other ways to improve the financial incentives for chipmakers to locate new projects here. Although the United States has 76 semiconductor plants, many of them are older, and few new ones are being built. Intel, whose work force relies heavily on highly skilled immigrants, is also pressing the administration to continue allowing such immigrants to enter the country. “We benefit from being able to hire the best talent from around the world,” Smith said. T he c h ip i ndu st r y spend s about one-fifth of its revenue on research and development, but it wants more federal funding for basic research into fundamental problems, like how to pack transistors closer together and
Counterfeiters, hackers cost US up to $600 billion a year
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whether materials other than silicon could form the basis of future chips. “We would like this administration to double down on investments in basic research in universities,” said John Neuffer, chief executive of the Semiconductor Industry Association, a trade group that represents US chipmakers. “Help us pedal faster.” Foreign countries have become more appealing for chip manufacturers, in part, because of the rise of contract chip foundries owned by Samsung of South Korea and Taiwan Semiconductor Manufacturing Co. They have made it easy for US tech companies like Qualcomm and Apple to design cuttingedge chips in the United States but outsource production to Asia. Looming in the background is China, which is a bit player in the industry but has committed to spend upward of $100 billion to create a world-class chip industry. “Today, it’s a modest threat, but two, three, four years out, if China plays out as it plans, it could be very significant to subsectors of our industry,” Neuffer said. Unlike many of their competitors, Intel, based in Santa Clara, California, and Micron, based in Boise, Idaho, build most of their chips in the United States and conduct virtually all of their research and development in this country. The approach they have taken to 3D memory chips illustrates the complexity of the business as well as the global forces pushing on the industry. New York Times News Service
ASHINGTON—Counterfeit goods, software piracy and the theft of trade secrets cost the American economy as much as $600 billion a year, a private watchdog says. In a report out on Monday the Commission on the Theft of American Intellectual Property says the annual losses range from about $225 billion to $600 billion. The theft of trade secrets alone costs the United States between $180 billion and $540 billion annually. Counterfeit goods cost the United States $29 billion to $41 billion annual; pirated software costs an additional $18 billion a year. The findings echo those of the Office of the Director of National Intelligence, which in 2015 pegged the annual cost of economic espionage by computer hacking at $400 billion. The commission labels China the world’s No. 1 culprit. Including Hong Kong, China accounts for 87 percent of counterfeit goods seized entering the United States. The report says the Chinese gover nment encourages intellectual-property theft. T he comm ission is led by former Republican presidential candidate and Utah Gov. Jon Huntsman, who also served as US ambassador to China, and Adm. Dennis Blair, a former director of US national intelligence. “The vast, illicit transfer of American innovation is one of the most significant economic issues impacting US competitiveness that the nation has not fully addressed,” Huntsman said. “It looks to be, must be, a top priority of the new administration.” AP
Environmentalists say they believe that the coal industry, having dealt with a sharp downturn in recent years and facing an aggressive divestment movement, may be shifting its views on climate change more for its own business interests than any newfound love for the environment. “To the extent that they are saying things that seem much more rational than in the past,” said David Hawkins, director of the climate program at the Natural Resources Defense Council, “they are trying to persuade skeptical investors that coal has a future.” Nevertheless, he added that his group was willing to work with the
companies, even while it was suing them in court on other issues, “if they are willing to join in properly crafted legislation.” The carbon legislation, introduced last year, would increase the federal tax credit for capture and sequestration to $20 per ton of carbon dioxide from $10. And it would expand available credits by more than one-third for permanent storage for the purpose of flooding the carbon into declining oil fields to coax production. The method, popular in West Texas and supported by the oil and gas industry, gives utilities that deploy the technology an added revenue stream. New York Times News Service
Coal changing image as clean-energy player
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resident Donald J. Trump has questioned the science behind climate change as “a hoax” in positioning himself as a champion of coal. The three largest US coal producers are taking a different tack. Seeking to shore up their struggling industry, the coal producers are voicing greater concern about greenhouse-gas emissions. Their goal is to frame a new image for coal as a contributor, not an obstacle, to a clean-energy future— an image intended to foster their legislative agenda. Executives of the three companies—Cloud Peak Energy, Peabody Energy and Arch Coal—are going so far as to make common cause with some of their harshest critics, including the Natural Resources Defense Council and the Clean Air Task Force. Together, they are lobbying for a tax bill to expand government subsidies to reduce the environmental impact of coal burning. They are promoting carbon capture and sequestration—an expensive and, up to now, unwieldy method of trapping carbon dioxide from coal-fired power plants before it can blanket the atmosphere and warm the planet. “We can’t turn back time,” said Richard Reavey, vice president for government and public affairs at Cloud Peak Energy. “We have to accept that there are reasonable concerns about carbon dioxide and climate, and something has to be done about it. It’s a political reality, it’s a social reality, and it has to be dealt with.” The coal executives say the steady gains of renewable energy—along with robust environmental regulations in recent years, many of which they still oppose—are not sufficient to stabilize the climate and still meet
energy needs in the years to come. They reason that coal and other fossil fuels will dominate the fuel mix for the next several decades, and that only capturing carbon from coal-fired and gas-fired power plants can meaningfully shift the world to a low-carbon future. Their argument is backed, at least in part, by many world energy experts and environmentalists. A similar, at least partial metamorphosis has taken place in the oil and gas and utility industries in recent years with mixed results, although there has been progress in expanding the deployment of renewables like wind and solar for power and in the capture of methane in oil fields to stem a powerful greenhouse gas. The coal executives argue that given the same incentives and subsidies as renewables, carbon capture and sequestration can also take off. Support among coal executives for capturing carbon at power plants is not entirely new, but their vocal acknowledgment of climate science to support the technology is a far stretch from views expressed in recent years. “We need a low-carbon fossil solution,” said Deck S. Slone, senior vice president for strategy and public policy at Arch Coal. “The political landscape is always shifting and carbon concerns are certainly not going away. We think there is a solution out there in the form of technology that is an answer to the climate challenge and that quite frankly will be good for our business long term.” Coa l executives remain strongly opposed to the Obama administration’s blueprint for reducing dependence on coal for power, known as the Clean Power Plan, which is being contested in the courts. But they say that
Workers at NRG’s power-generating station southwest of Houston on December 12, 2016. Companies in the coal industry are joining with environmental groups to lobby for expanded subsidies to encourage technologies to reduce carbon emissions from coal plants. Michael Stravato/The New York Times
any rollback of Obama regulatory policies by the new administration may not be enough to keep utilities from switching from coal to low-cost natural gas and renewables, and that only assurances of government support for carbon capture and sequestration can give utilities certainty that coal has a longterm future and encourage them to retrofit old power plants to be cleaner burning. Last year total US coal production was 18 percent lower than in 2015 and was at its lowest since 1978. Many companies were forced into bankruptcy. With gas prices rising in recent
months, coal made a modest rebound at the end of last year, especially in the Powder River Basin of Montana and Wyoming. Vic Svec, a Peabody senior v ice president, sa id t hat his company was looking to make “a fresh start” as it comes out of bankruptcy, and that part of that fresh start was recognizing that fossil fuels “contribute to g reenhouse gas emissions and concer n regard ing these emissions has become part of the global, societal regulator y landscape.” He added, “ There is a market for low-carbon energ y sources, and we want to be part of that future.”
Editor: Lyn Resurreccion • www.businessmirror.com.ph
The World BusinessMirror
Tuesday, February 28, 2017
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China-championed pact faces tricky talks
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rade negotiators are under pressure this week to make progress on a blockbuster Asia pact, after President Donald J. Trump pulled the United States out of a rival Pacific agreement. But officials meeting in Japan face some significant sticking points.
C hina is c ha mpioning t he 16 -n at ion R eg ion a l Compre hensive Economic Partnership (RCEP), which does not include the US or Canada. It’s a chance for it to seize the moment amid the US president’s protectionism— evidenced by his withdrawal from the 12-countr y Trans-Pacif ic Partnership (TPP)—keeping free trade on track and boosting its global clout. Still, some nations are uneasy about rushing to get the RCEP done, even with the failure of the TPP. And while the talks should be simpler—RCEP is more of a traditional trade deal—there are disputes over tariff cuts and the service sector. “ The stumbling blocks are multiple,” said Iman Pambagyo, the RCEP trade negotiating committee chief. Pambagyo, who is director-general of international negotiations with Indonesia’s Trade Ministry, said negotiators had only agreed on about 700 of more than 5,000 tariff lines covered in the deal.
‘Speed over quality’
The RCEP could help develop supply chains in Asia, according to Japan’s State Minister for Foreign Affairs Kentaro Sonoura. “ T his is the f irst meeting of the year,” he said. “I have strong expectations of progress
to its GDP and affects the movement of labor across borders. A particular sticking point is loosening rules to make it easier for its IT workers to move abroad. Indonesian Trade Minister Enggartiasto Lukita said there’s a stand-off between “India and several other countries” on the issue of a special business travel card.
‘Hard to do’
5,000 The number of tariff lines covered in the Regional Comprehensive Economic Partnership
toward the early conclusion of a high-qua lit y agreement.” Still, the Japan meeting may only take officials about 30 percent of the way to a deal, said an official involved in the talks. Some countries want to offer different degrees of market access to member-nations, but that is not an approach with universal support, said the official, who asked not to be identified because the discussions are private. For the RCEP, “ it depends whether they prioritize speed over quality,” said Yorizumi Watanabe, a former trade negotiator with Japan’s foreign ministry, now a professor at Keio University. “It’s possible RCEP could take over from TPP as the model for future agreements. But if they try to rush, it might be thin.” The shadow of the TPP will hang over the Kobe meetings. While
Tourists look at Chinese brand outdoor backpacks on display at the International Trade Show for Mountain and Winter Technologies in Beijing. Chinese Premier Li Keqiang, China’s No. 2 leader, expressed hope that disputes with United States President Donald J. Trump’s government can be settled amicably and warned a “trade war would benefit nobody”. AP/Andy Wong
China pushes the RCEP, some TPP members are calling for that pact to be revived: By proceeding without the US, or waiting for Trump to change his mind. Au st r a l i a i n si st s t he T PP can continue without the US and will seek support for that view in ministerial talks next month in Chile. A spokesman for Trade Minister Steven Ciobo said negotiations on the RCEP are challenging and significant work remains on market access. “ T he seven cou nt r ies i n bot h t he T PP a nd RCEP a re busy scrambling to figure out what to do about TPP with the US withdrawal,” said Deborah Elms, executive director of the Asian Trade Centre, a Singaporebased consultancy. “If TPP does not move forward, it is possible
that many TPP provisions will be moved across into RCEP by some members.” The RCEP was conceived as an expansion of Southeast Asian trade ties with China, India, Australia and Japan. It includes New Zealand and South Korea, which already have free-trade pacts with the Association of Southeast Asian Nations (Asean). It would cover almost half the world ’s population and 30 percent of the global economy. Asean members “now see RCEP coming into play,” said Rebecca Fatima Sta. Maria, senior policy fellow at the Economic Research Institute for Asean and East Asia and a former secretary-general of Malaysia’s trade ministry. Sta. Maria said there must be a clear timetable and agreement
reached in the Kobe meeting on “what aspects must be in for it to be substantially concluded,” if the RCEP has any hope of being ratified this year. “There has to be political will. I think from a political will perspective, I think there is that will.”
Service sector
The RCEP covers investment, intellectual property and economic and technical cooperation. It would introduce disputeresolution mechanisms. Unlike the TPP, it would not require members to protect labor rights or improve environmental standards. Like the TPP, there are big stumbling blocks. India is arguing for greater liberalization of services, a sector that contributes over 50 percent
Brexit means EU loses money, influence and military strength
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he United Kingdom’s impending departure from the European Union means the rest of the bloc is saying goodbye, not only to its most awkward member, but also to one of its richest countries, its biggest army and its most successful financialservices hub. With Theresa May vowing to trigger Article 50 of the Lisbon Treaty to start two-year exit negotiations in March, here are six charts showing what the EU will lose when the UK eventually walks away.
EU is losing its most powerful army
Defense is still the preserve of national governments, but there’s a reason some of the EU’s countries closest to Russia fear they are losing a safety net—and why the UK may be able to use its military might to gain some leverage in the Brexit negotiations. Britain (with France, the only EU countries with nuclear weapons) has participated in many EU military operations, particularly in Africa where the EU has run several peace-keeping and training missions. The British government has said cooperation will continue in some form, but the EU acknowledges that it’s losing expertise and clout.
UK gives the EU a louder voice on the world stage
Despite the EU being a multinational organization, its countries represent themselves individually in most global bodies. And while there is no guarantee they all sing from the same EU hymn sheet
when they meet as part of, say, the Group of Seven, they often try to coordinate positions. The UK and France are the only two EU countries that are permanent members of the United Nations Security Council.
Britain used EU free-movement rules to welcome foreigners
T he abi l it y of EU c it i zens, no mat ter where t hey come f rom, to l ive a nd work in a ny of t he bloc’s member- cou nt r ies u nder pins one of t he EU ’s most c her ished pr inc iples. It also was one of the main reasons 17.4 million British voters supported Brexit. With its liberal labor laws, English language and well-performing economy, the UK has been one of the biggest attractions for Europeans seeking to take advantage of the EU’s free-movement rules. The status of Europeans already in Britain is not yet guaranteed and needs to be settled i n negot i at ions on t he U K ’s withdrawal. In the longer term, Brexit removes the opportunity for countless EU citizens to move unhindered to one of their favorite countries.
London’s financial hub packs a punch
Financial services will be a key battleground in the Brexit negotiations. The UK accounts for 37 percent of all global foreignexchange trading, 39 percent of the world’s trading in over-thecounter derivatives and is the biggest center for international bank lending, at 17 percent, according to lobby group TheCityUK.
Now the fight is on to protect the industry after Brexit, either by maintaining “passporting” rights, which allow global banks with bases in London to provide services to the rest of Europe or, failing that, the less attractive “equivalence”, which gives companies based outside the EU privileged, though targeted, market access.
Brexit means a big hole in the EU’s coffers
Even when taking into account the UK’s “rebate”—the discount obtained by Margaret Thatcher in 1984 that knocks an annual £5 billion ($6 billion) off the country’s contribution—Britain is still the EU’s second-largest net contributor to the bloc’s budget. The EU will be down almost €12 billion ($13 billion) a year once the UK is gone and, as this chart shows, the countries that were formerly behind the Iron Curtain and joined the EU most recently will be worst hit. The EU, which will start preparing its 2021-2027 budget around the time Britain departs, needs to work out whether and how it will make up the shortfall.
EU is saying good-bye to one of its richest nations
The EU is losing its second-largest economy. The UK’s unemployment rate is higher than only three other EU countries and the Bank of England and the European Commission have revised up their estimates for Britain’s economic expansion, saying the impact of Brexit will be milder this year than previously estimated. Bloomberg News
U.S. President Donald J. Trump (center) discuss the federal budget in the Roosevelt Room of the White House in Washington with Mick Mulvaney (from left), director of the Office of Management and Budget, and Steven Mnuchin, secretary of the Treasury, on February 22. Doug Mills/The New York Times
Widespread cuts in Trump budget bypass the military
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ASHINGTON—President Donald J. Trump will instruct federal agencies on Monday to assemble a budget for the coming fiscal year that includes sharp increases in Defense Department spending and drastic enough cuts to domestic agencies that he can keep his promise to leave Social Security and Medicare alone, according to four senior administration officials. The budget outline will be the first move in a campaign this week to reset the narrative of Trump’s turmoil-tossed White House. A day before delivering a high-stakes address on Tuesday to a joint session of Congress, Trump will demand a budget with tens of billions of dollars in reductions to the Environmental Protection Agency (EPA) and State Department, according to four senior administration officials with direct knowledge of the plan. Social-safety net programs, aside from the big entitlement programs for retirees, would also be hit hard. Preliminary budget outlines are usually little-noticed administrative exercises, the first step in negotiations between the White House and federal agencies that usually shave the sharpest edges off the initial request. But this plan—a product of a collaboration between the Office of Management and Budget director, Mick Mulvaney; the National Economic Council director, Gary Cohn; and the White House
chief strategist, Stephen Bannon—is intended to make a big splash for a president eager to show that he is a man of action. Trump’s top advisers huddled in the White House this weekend to work on his Tuesday night prime-time address. They focused on a single, often overlooked message amid the chaos of his first weeks in the White House: the assertion that the reality-show candidate is now a president determined to keep audacious campaign promises on immigration, the economy and the budget, no matter how sloppy or disruptive it looks from the outside. “They might not agree with everything you do, but people will respect you for doing what you said you were going to do,” said Jason Miller, a top communications strategist on the Trump campaign who remains close to the White House. “He’s doing something first, and there’s time for talk later,” Miller added. “This is ultimately how he’s going to get [people who didn’t vote, or people who didn’t vote for him], into the fold. Inside the Beltway and with the media, there’s this focus on the palace intrigue. Out in the rest of the country, they are seeing a guy who is focused on jobs and the economy.” The budget plan, a numerical sketch that will probably be substantially altered by House and Senate Republicans—and vociferously opposed by congressional
“The problem for RCEP is that you are trying to get an agreement with 16 countries in more than a dozen chapters,” Elms said. “That is just hard to do. In particular, you are creating an agreement that will connect the major markets in Asia together for the first time.” Mea nwh i le, Au st ra l i a w i l l keep pushing the TPP. Ciobo discussed the idea of China joining a rebooted version of the TPP during a trip to the country last week, and said on Monday it would likely be revisited in Chile. “I’m sure they’ll have a representative there for the discussions,” Ciobo said by phone. “Ultimately, it’s a decision for the Chinese authorities what they might choose to do and understandably, they would hold off from any decisions until the future of the TPP is more clear.” Under the terms of the TPP, at least 85 percent of the combined GDP of the 12 original signatories must be represented for it to be ratified. Kim Jong-hoon, a former Korean trade minister, said that with the US accounting for about 60 percent of that total, the TPP was “a dead deal”. According to Indonesia’s Pambagyo, “everyone’s eyes are now looking at RCEP.” “It’s the only game in town and we have to make sure we work together toward a quality agreement.” Bloomberg News Democrats—will be Trump’s first big step into a legislative fray he has largely avoided during the first 40 days of his administration. Thus far, instead of legislating, he has focused on a succession of executive orders on immigration and deregulation written by Bannon’s small West Wing team. Resistance from federal agencies could ease some of the deepest cuts in the initial plan before a final budget request is even sent to Congress. And Capitol Hill will have the last word. To meet Trump’s defense request, lawmakers in both parties would have to agree to raise or end statutory spending caps on defense and domestic programs that were imposed by the 2011 Budget Control Act. Trump is in a highly unusual position at a time when most presidents are finding their footing or confronting crisis. Despite his lament that he was handed “a mess” by former President Barack Obama, Trump inherited a low unemployment rate, a lack of international crises requiring immediate attention and majorities in both houses of Congress. By contrast, when Obama took office, the country was losing 700,000 jobs a month, and the global financial system was teetering on the edge of collapse. By the time he stepped up to the rostrum for his first joint congressional address on February 24, 2009, he had accrued an impressive string of accomplishments—including the passage of a massive stimulus bill through the Democratic-controlled Congress, a gender pay-parity act, a children’s healthinsurance law and executive actions that would ultimately help stabilize the financial and automotive sectors. With the prospect of a second Great Depression still high, Obama sought to rally the country, vowing, “We will rebuild, we will recover, and the United States of America will emerge stronger than before.” Mayor Rahm Emanuel of Chicago, who was Obama’s first chief of staff, said in an interview last Sunday night that Trump was trying to create a “sense of urgency, which most people aren’t feeling right now, which was a reality to us” in order to generate support for his unspecified economic agenda, including an infrastructure bill and a tax overhaul. New York Times News Service
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Tuesday, February 28, 2017
The World BusinessMirror
www.businessmirror.com.ph • Editor: Lyn Resurreccion
Ex-congregants reveal years of ungodly abuse
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PINDALE, North Carolina—From all over the world, they flocked to this tiny town in the foothills of the Blue Ridge Mountains, lured by promises of inner peace and eternal life. What many found instead: years of terror—waged in the name of the Lord. Congregants of the Word of Faith Fellowship were regularly punched, smacked, choked, slammed to the f loor or thrown through walls in a violent form of deliverance meant to “purify” sinners by beating out devils, 43 former members told The Associated Press (AP) in separate, exclusive inter views. Victims of the violence included preteens and toddlers—even crying babies, who were vigorously shaken, screamed at and sometimes smacked to banish demons. “I saw so many people beaten over the years. Little kids punched in the face, called Satanists,” said Katherine Fetachu, 27, who spent nearly 17 years in the church. Word of Faith also subjected members to a practice called “ blasting”—an ear-piercing verbal onslaught often conducted in hours-long sessions meant to cast out devils. As part of its investigation, the AP reviewed hundreds of pages of law-enforcement, court
43
The number of former members Word of Faith Fellowship who were interviewed by The Associated Press and child-welfare documents, along with hours of conversations w ith Jane W ha ley, the evangelical church’s controlling leader, secretly recorded by followers. The AP also spent more than a year tracking down dozens of former disciples who scattered after leaving the church. Those interviewed—most of them raised in the church—say Word of Faith leaders waged a decades-long cover-up to thwart
investigations by law-enforcement and social-services officials, including strong-arming young victims and their parents to lie. They said members were forbidden to seek outside medical attention for their injuries, which included cuts, sprains and cracked ribs. Several former followers said some congregants were sexually abused, including minors. The former members said they were speaking out now due to guilt for not doing more to stop the abuse and because they fear for the safety of the children still in the church, believed to number about 100. In the past, Whaley has strongly denied that she or other church leaders have ever abused Word of Faith members and contended that any discipline would be protected by the First Amendment’s freedom of religion tenets. She and church attorney Josh Farmer turned down repeated AP requests for interviews to discuss the fresh allegations from the dozens of former congregants. The ex-members said the violence was ever-present: Minors were taken from their parents and placed in ministers’ homes, where they were beaten and blasted, and sometimes, completely cut off from their families for up to a decade. For several years, males perceived as the worst sinners were kept in a four-room former storage facility in the compound called
the Lower Building. They were cut off from their families for up to a year, never knew when they would be released, and endured especially violent, prolonged beatings and blastings, according to more than a dozen of those interviewed. Teachers in the church’s K to 12 school encouraged students to beat their classmates for daydreaming, smiling and other behavior that leaders said proved they were possessed by devils, the former followers said. “It wasn’t enough to yell and scream at the devils. You literally had to beat the devils out of people,” said Rick Cooper, 61, a US Navy veteran who spent more than 20 years as a congregant and raised nine children in the church. Word of Fa it h Fe l lowsh ip has been scrutinized on numerous occasions by law-enforcement, social-services agencies and the news media since the early 1990s—all without significant impact, mostly because followers refused to cooperate. Some former members offered a more doctrinal explanation for their decades of silence: Frequent warnings by Whaley that God would strike them dead if they betrayed her or her church. Word of Faith Fellowship was founded in 1979 by W haley, a pet ite for mer m at h teac her, and her husband, Sam, a former used-car salesman. They are listed as copastors but all of those interviewed said it is Jane Whaley—a fiery, 77-year-old Christian Charismatic preacher— who maintains dictatorial control of the flock and also administers some of the beatings herself. She has scores of strict rules to control congregants’ lives, including whether they can marry or have children. At the top of the list: No one can complain about her or question her authority. Failure to comply often triggers a humiliating rebuke from the pulpit or, worse, physical punishment, according to most of those interviewed. Under Jane Whaley’s leader-
ship, Word of Faith grew from a handful of followers to a 750-member sect, concentrated in a 35-acre complex protected by tight security and a thick line of trees. T he group a lso has nearly 2,000 members in churches in Brazil and Ghana, and affiliations in other countries. Those attending the church ’s twice-ayear international Bible seminars were encouraged to move to Spindale, a community of 4,300 midway between Charlotte and Asheville. It wasn’t until they sold their homes and settled in North Carolina that the church’s “dark side” gradually emerged, former members said. By then—isolated from their families and friends, and believing Whaley was a prophet—they were afraid to leave or speak out, they said. Given what they characterize as Whaley’s record for retribution against those she sees as traitors, the former members said they hope there is strength and protection in speaking out in numbers. “For most of my life, I lived in fear. I’m not scared anymore,” said John Cooper, one of Rick Cooper’s sons. Still, many former church members say the memories—and the nightmares—never seem to fade, and they live in fear for their family members still inside. Danielle Cordes, now 22, said she has deep psychological scars from spending more than threequarters of her life in W haley’s world. Three years ago, the last time she tried to visit her parents’ house, her father slammed the door in her face without saying a word. To this day, whenever she calls, family members hang up. “I need my family and they’re gone,” she said. Said Rick Cooper: “You’re cut off from everyone in the world. The church—and Jane—is the only thing you know. You believe she’s a prophet—she has a pipeline to God. So you stand by while she rips your family apart. I’m not sure how you ever get over that.” AP
Casualties mount as Iraqi troops advance in Islamic State-held Mosul
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OSUL, Iraq—”We have wounded!” the men shouted from the roadside. Two soldiers, bleeding, were being bandaged beside their smoking vehicle on the side of a dusty dirt road. Iraqi special forces Maj. Saif Ali yelled to his driver to stop and leaped out. “Put one inside and the other on top!” he called to his men. One was put in Ali’s seat, the other laid on the vehicle’s hood. “Go!” he shouted, crouching on the hood next to the wounded man. His driver blared the horn and the gunner shot into the air trying to clear a way through a sea of fleeing civilians and livestock. As Iraqi forces push deeper into western Mosul, the assault is bringing a surge of casualties—at least 30 Iraqi security forces and more than 200 civilians killed or wounded in the last three days. Iraq’s military does not release official casualty reports, but medics at front-line clinics provided figures on condition of anonymity. The sudden spike in casualty numbers mirrors what played out in Mosul’s east as the fight moved from rural villages to dense urban areas. Front-line medic stations that stood empty for the first days of the assault on Mosul’s west announced last week are now overflowing. At one clinic last Sunday, the dead had to be moved to the ground to free up beds as more injured arrived. The soldiers that Ali picked up had been wounded when a mortar—fired from districts held by the Islamic State (IS) group—hit them along a route used by the thousands of civilians fleeing Mosul on foot in the days after Iraqi forces first punched into Mamun neighborhood last Friday. Ali had been on his way back to base after a quick visit to the edge of Mamun neighborhood. Now he was gripping the grate of his Humvee, using his own weight to keep the wounded man from sliding off the hood. In the front passenger seat, the other soldier—with a head wound—sat with his
eyes wide open and glassy. Everyone inside the vehicle rode in almost complete silence as Ali and his gunner shouted directions to the driver and yelled for civilians to move out of the way. Blood slowly soaked through the black shirt of the man sitting in Ali’s seat. The nearest clinic was 5 kilometers away—down bumpy dirt roads, crowded with people. After a few moments the soldier went completely limp, his body swaying slackly with each bump the Humvee hit. He was dead. Last Sunday afternoon Iraq’s special forces were still struggling to clear the Mamun neighborhood, bringing them back to a phase of grueling urban combat similar to the fight for eastern Mosul in early November when military attrition rates spiked. Iraqi forces at a base a few kilometers (miles) south of the front called in air strikes to take out small units of two or three IS fighters who repeatedly managed to halt advancing Iraqi convoys. The number of car bombs targeting Iraqi forces in western Mosul has been fewer than what forces experienced in the east: approximately four a day in the west compared to more than dozen a day in the east. But the number of armed IS drones has ballooned. In a single day drones dropped more than 70 munitions on Iraqi forces. The bombs mostly caused light injuries but they disrupted operations and monopolized the finite surveillance capabilities available from Iraq’s military and the US-led coalition backing the Mosul fight. The whizz of mortars on the edge of Mamun neighborhood repeatedly sent families scattering for cover as they tried to flee Mosul’s city limits. The route civilians are using to flee Mosul’s west on foot is still within mortar range of IS fighters inside the city and largely out in the open, leaving people more vulnerable than those who fled the city’s eastern side. AP
briefs
Former Nasa mathematician gets her moment at Oscars LOS ANGELES—She said only “thank you”, but it was one of the more moving moments of Sunday’s Oscars ceremony. Katherine Johnson, 98, the former National Aeronautics and Space Administration (Nasa) mathematician played by Taraji P. Henson in the movie Hidden Figures, was brought on stage to thunderous applause. She was introduced by Henson, Janelle Monae and Octavia Spencer, who all star in the film as female black mathematicians who helped put Nasa ahead in the space race against the Soviet Union. Hidden Figures was nominated for best picture. The 98-year-old Johnson wore a blue dress and was brought out in a wheelchair during Sunday’s ceremony. AP
Syrian warplanes pound rebel-held area in Homs BEIRUT—Government warplanes pounded a rebel-held neighborhood in the central city of Homs last Sunday, killing at least three and wounding dozens, Syrian opposition activists said, and President Bashar al-Assad’s forces pushed ahead in Syria’s offensive on the historic town of Palmyra held by the Islamic State (IS) group. The Britain-based Syrian Observatory for Human Rights and pro-government media said troops were about 9 kilometers west of Palmyra, which is home to some of the world’s most treasured archaeological sites. IS overran the city, prized for its ancient Roman archaeological ruins, for a second time last December. In March last year, government forces had captured the town ending a 10-month rule by the extremists. The Observatory said government forces and their allies now control hills that oversee three gas fields west of the town amid intense air strikes. Syrian troops and their allies launched a wide offensive toward Palmyra in mid-January under the cover of Russian air strikes. AP
Float crashes, injuring 12 at Rio’s Carnival parade RIO DE JANEIRO—A float crashed during Rio de Janeiro’s world famous Carnival parade last Sunday evening and injured at least 12 people, including at least one person reported in serious condition, but organizers proceeded with the show. The incident involved the last float of the first samba school parading through Rio’s Sambadrome. The float of samba school Paraiso de Tuiuti crashed into a fence that separates the stands from the pavement, injuring spectators, revelers and journalists. One reporter had an exposed fracture. The police began an investigation as soon as the float finished its transit through the Sambadrome. Police investigator William Lourenco Bezerra said the three conductors of the float would be questioned on Monday morning, adding that one driver already had been identified as the main focus of the probe. AP
U.S. execs not yet authorized to vet Pacific islands refugees CANBERRA, Australia—United States security officers have yet to be authorized by President Donald J. Trump’s administration to vet refugees held on Pacific islands for potential resettlement in the US, an Australian official said on Monday. Trump has reluctantly agreed to honor an Obama administration deal to accept up to 1,250 refugees refused entry into Australia, but has said they will be subjected to “extreme vetting”. Australia pays Nauru and Papua New Guinea to keep more than 2,000 asylum-seekers—mostly from Iran, Afghanistan and Sri Lanka— in conditions condemned by rights groups. Mike Pezzullo, secretary of Australia’s Department of Immigration and Border Protection, told a Senate committee that US Department of Homeland Security officers were poised to start vetting refugees on the islands as soon as they were authorized. AP
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AseanTuesday BusinessMirror
Japan emperor’s Vietnam visit a sign of improved ties
Editor: Max V. de Leon • Tuesday, February 28, 2017 A9
Malaysia declares airport safe after nerve agent attack
Akihito
W
hen Nguyen Thi Xuan said good-bye to her Japanese husband in 1954, she thought he was going off for a year or two on another long assignment. She never imagined it would be more than half a century before she’d see him again. Like many Vietnamese women married to Japanese soldiers, Xuan’s family was split up, victimized by the stormy relationship between the countries. Today, the former foes enjoy strong bilateral ties, with Japan and Vietnam cooperating economically, as well as in other areas, including defense and security. In a sign of just how far the relationship has come, several surviving widows and families of former Japanese soldiers—including Xuan—will have an opportunity to meet with Japanese Emperor Akihito when he visits Vietnam for the first time this week. Japanese troops invaded Vietnam in 1940 and remained there until Japan surrendered to the allies in 1945, ending World War II. Xuan’s husband, however, was among some 700 Japanese soldiers who remained in Vietnam after revolutionary leader Ho Chi Minh declared independence from French colonial rule in 1945. The Japanese soldiers helped train Ho Chi Minh’s Viet Minh to fight the French. But after the Viet Minh defeated the colonial forces in 1954, Xuan’s husband was one of 71 former Japanese soldiers who had to leave the communist North without being able to bring their families, because Japan was on the other side of the Cold War. He left behind his two children and his pregnant 29-year-old wife. “I thought he was on an assignment for one or two years, but we then had no information about him,” Xuan, 92, said recently. She said that after not hearing from her husband for six years, she and her family thought he had died, and set up an altar to worship him. Xuan had to raise her three children on her own by working on a rice farm in a village outside Hanoi. Villagers would call her Xuan Nhat, or Japanese Xuan, mocking her marriage to a Japanese man. Her children also were mocked. “People called me Japanese son, son of a fascist. There used to be a lot of discrimination. But it is better now,” said Nguyen Xuan Phi, Xuan’s eldest son. But anti-Japanese sentiment started to dissipate after communist Vietnam launched reforms in the mid-1980s and opened up to the outside world in the early 1990s. In 2005, Xuan learned that her
husband was alive and living in Japan through a Vietnamese woman living in the country with her Japanese husband, also a former soldier. The following year, Xuan’s husband, who had married a Japanese woman, arranged to visit her. Xuan said she was very happy to see him again after all those years. “You look great,” Xuan quoted her husband as telling her in still fluent Vietnamese when they reunited. “Yes, I’m fine. I still have been waiting for you,” she said she told her husband, who was in a wheelchair after suffering a stroke and visited Xuan with his Japanese wife. Xuan has not remarried, and her husband died several years after his 2006 visit. While Xuan’s family was unable to stay together, when the last group of Japanese soldiers was asked by communist North Vietnam to leave in 1960, they were allowed to bring their families. But Hoang Thi Thanh Hoai’s father, the son of a Japanese soldier, decided to stay behind to take care of his Vietnamese grandmother. He did not reunite with his brothers and sisters in Japan until 1995, when he and Hoai spent six weeks in Japan visiting their relatives. Hoai, who is now 43 and works at a Japanese eye clinic in Hanoi, decided to study Japanese after seeing how her father was unable to communicate with his siblings after reuniting with them. “Learning Japanese helps me feel like a bridge of my two families, and more broadly a bridge between Vietnam and Japan,” she said. Today, Japan is Vietnam’s biggest foreign donor and one of its top investors and trading partners. Even defense and security ties have gotten closer in recent years, with both countries facing maritime disputes with China. During a visit to Vietnam in January, Japanese Prime Minister Shinzo Abe pledged to provide Vietnam with new patrol vessels. The upcoming visit by Emperor Akihito, whose six-day trip starts Tuesday, further underscores the strength of the bilateral relationship. Xuan is scheduled to meet Akihito on Thursday. For her, the opportunity to meet the emperor comes late in her life, but is something she’s looking forward to. “I am too old, even my children are getting old,” Xuan said in her small home, the walls decorated with photos of her husband and other family members. “I just hope the two governments could take better care of my grandchildren, who are also grandchildren of Japanese people, so that they could have an education and jobs.” AP
A hazmat team member scans the decontamination zone at Kuala Lumpur International Airport 2 in Sepang, Malaysia, on Sunday. AP
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alaysian authorities have declared Kuala Lumpur International Airport safe after a sweep of the terminal found no traces of a potent nerve agent used to kill Kim Jong Nam, the half brother of North Korea’s leader.
The airport is “a safe place” and is free from any contamination by hazardous materials, state news agency Bernama reported Selangor state police chief Abdul Samah Mat as saying. A sweep by Malaysia’s police forensic department, a hazardous materials team from the fire and rescue department and the Atomic Energy Licensing Board. The operation was conducted between 1:45 a.m. and 3 a.m. last Sunday, the police chief said. Fears of contamination were triggered after a preliminary report showed that the VX nerve agent was used in the murder of Kim Jong Nam. The substance, listed as a chemical weapon under the Chemical Weapons Convention Act 2005, was found on the victim’s face and eyes, Malaysian police said last Friday. The eldest son of late North Korean leader Kim Jong Il died at the airport on February 13. “Confirmation from the chemistry department is consistent with the autopsy findings from the Ministry of Health, suggesting it was a chemical agent which caused very serious paralysis that led to the death of the person in such a very short period of time,” Health Minister S. Subramaniam said last Sunday at the airport.
Quick death Kim JonG Nam died within 15 or 20 minutes of being poisoned, an indication of how high the dosage was, the minister said, according to the Associated Press (AP). “It would have affected his heart, it would have affected his lungs, it would have affected everything.” Exposure to the chemical in high doses can lead to death “very quickly”, while in low doses the side effects can last for a few days, Subramaniam said, adding that the chemical in its powdered or liquid form can vaporize into the air. Aside from a suspect who was involved in the chemical attack, there were no reports of anyone else experiencing side effects, he said. This is the first time VX nerve agent has been found in Malaysia, Bernama reported, citing Deputy Health Minister Hilmi Yahaya. The substance is difficult to detect if brought into the country in small quantities, he said last Sunday. The police have arrested four people linked to the murder, including two women who are believed to have carried out the attack, and are seeking four North Koreans whom they believe fled to Pyongyang on the day Kim Jong Nam was killed. Authorities also want to question a diplomat at the North Korean embassy in
Kuala Lumpur, an employee at Air Koryo, North Korea’s state-owned airline, and a North Korean who has lived in Malaysia for three years.
$90 prank
Malaysia will issue an arrest warrant if the diplomat doesn’t cooperate, the police said last Saturday. Abdul Samah, the police chief leading the investigation, said authorities will allow a “reasonable” time for the diplomat to come forward, before issuing a notice compelling him to do so, according to the AP. Last Saturday, Indonesia’s deputy ambassador to Malaysia, Andriano Erwin, said an Indonesian female suspect in custody was paid $90 to help carry out the attack in what she thought was a prank. Carrying an Indonesian passport in the name of Siti Aishah, 25, she was identified from closed-circuit television footage taken at the airport and was alone at the time of her arrest. “According to her, that person gave her around 400 ringgit to do this activity,” Erwin said in a video recording published by Indonesian news portal detik.com. Siti Aisyah didn’t know she was handling poison and thought the liquid given to her was baby oil, Erwin said after meeting her at a police station last Saturday, according to the New Straits Times.
Comedy video
The second suspect, Vietnamese Doan Thi Huong, told representatives of Vietnam’s embassy in Malaysia last Saturday that she was duped into believing she was participating in a comedy video, according to a statement posted on Vietnam’s Ministry of Foreign Affairs web site. The police have yet to formally determine the identity of the deceased, whose travel document named him
Confirmation from the chemistry department is consistent with the autopsy findings from the Ministry of Health, suggesting it was a chemical agent that caused very serious paralysis that led to the death of the person in such a very short period of time.”—S. Subramaniam
as Kim Chol. They expect his nextof-kin to come to Malaysia in a day or two to identify and claim the body, Bernama reported. “Our next issue is to confirm the identity of the deceased—for that we need the next-of-kin. In the absence of it, we need some information that we can correlate with whatever data that we have,” Subramaniam said. Kim Jong Nam’s death has raised questions about the stability of North Korean leader Kim Jong Un’s regime as he accelerates plans to build nuclear weapons that threaten the US, South Korea and Japan. South Korean government officials have speculated that Kim Jong Un was behind the killing of his halfbrother, a critic of his leadership who had lived outside the country for years.
‘Most brutal means’
Former CIA Director John Brennan said the assassination shows that Kim Jong Un continues to use lethal means to silence opponents. “The use of this VX against his half brother—certainly, all indicators point to North Korean responsibility for this —it is another example of his use of these types of toxins to carry out his objectives,” Brennan said last Sunday on CBS’s Face the Nation. “He’s killed many, many individuals in some of the most brutal means possible.” North Korea is among the world’s largest possessors of chemical weapons, ranking third after the US and Russia, according to a 2011 assessment by the International Institute for Strategic Studies. A 2010 white paper by South Korea’s defense ministry estimated that North Korea had between 2,500 and 5,000 metric tons of chemical weapons agents. Bloomberg News
Singapore traders may get lunch break back in new round of SGX reforms
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ingapore stock traders may finally get their lunch break back. Singapore Exchange Ltd. (SGX), which runs the city’s equity market, is considering reinstating the midday intermission, according to people familiar with the matter. SGX in March 2011 scrapped the break, which lasted from 12:30 to 2 p.m. every day, in an effort to boost trading. The bourse is expected to have a public consultation on the issue in the coming weeks, the people said, asking not to be identified as the information is private. SGX will also
$809M The daily average value of shares traded on SGX this year
propose a test that would widen the price increment at which shares are quoted to bring day traders back, according to the people. The proposals come after traders and SGX officials
had several meetings since Loh Boon Chye became CEO in July 2015, the people said. When SGX cut the midday break, then-CEO Magnus Bocker said in January 2011 the move would make Singapore “one of the most accessible markets in Asia and in the world”. Having continuous trading from 9 a.m. to 5 p.m. could also boost volume by as much as 10 percent, Bocker said. Many Asian stock markets have a midday break, including Hong Kong, mainland China and Malaysia. The daily average value of shares
traded on SGX this year has risen 6.4 percent, to $809 million, compared with the average for 2016, according to data compiled by Bloomberg. While up from last year, it’s down from $1.12 billion a day in 2013, the year of a penny-stock crash that has been blamed for shaking confidence in the city’s markets. An average of $1.18 billion shares changed hands each day in 2010, before the intermission was abolished, the data show. SGX said in an e-mailed response to queries that it doesn’t comment on speculation.The exchange’s tick-size proposal would reward brokers for
making markets in less liquid stocks by widening the spread they earn when buying and selling shares, the people said. That could encourage trading in smallcap companies, they said. If the plan goes ahead, it would be at least the third time in a decade that SGX has tweaked stock spreads. In 2011, it cut tick sizes to offer what it called “one of Asia’s most costcompetitive trading environments.” It made a similar move in 2007. The US last October started a twoyear test that raised ticks for smallcompany stocks amid complaints
from exchanges that liquidity has dried up. Japan Exchange Group in December 2014 said it was backtracking on tick cuts for some of the biggest companies less than six months after it was implemented because it failed to get the boost it sought. SGX in 2015 cut the board lot size, or trading unit, investors needed to buy to 100 from 1,000 to help make higher-priced shares easier to invest. Last year it consulted on having at least 10 percent of shares in the initial public offering of companies on its main venue to boost retail participation. Bloomberg News
A10 Tuesday, February 28, 2017 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
Never too old
T
here are many things we like about the businessprocess outsourcing (BPO) industry, but one thing that truly stands out is that it is an equal opportunity employer. If you are qualified to work for BPO companies then you’re qualified, whatever your age may be or gender, and regardless of which school you graduated from, or even if you did not graduate. If you pass their exams, they will hire you. Period. This is not only commendable but also ideally opposite what most employers in the country normally and, albeit illegally, practice in their hiring procedures. Just take a quick look at local job ads and you would see employers everywhere specifying age or gender restrictions (“only” male or female need apply), or those that say you must have graduated from certain prestigious universities. Some would even blatantly give height and other physical requirements. Age discrimination, though, is the most rampant. Older Filipino workers would commonly be barred from applying for jobs that they may well be qualified for. And we don’t even mean senior citizens here. One could easily find job ads specifying people over 30 years and older “need not apply”. Indeed, we find something very wrong when you are considered by certain industries as washed up and unemployable at 40. By the way, it is also illegal. Labor Secretary Silvestre H. Bello III recently signed the implementing rules and regulations (IRR) of Republic Act 10911, or the Anti-Age Discrimination in Employment Act, which seeks to promote equality in the workplace by mandating companies to hire workers based on their competence, and not on their age. The law covers all employees and job applicants of all employers, including national and local governments, companies in the private sector, labor contractors and subcontractors and other kinds of labor organizations, whether or not registered. Under the law, employers cannot print or publish any advertisement or notice, in any form of media, that suggests preferences, limitations, specifications and discrimination based on age. Employers also cannot require job applicants to disclose their age or date of birth, or reject them or set specific compensation or privileges of employment for them solely based on their age. This includes providing less compensation and benefits for older workers, denying them promotions and training opportunities, and imposing early retirement or forcing their dismissal. Violators of the law will be meted a fine of not less than P50,000 but not more than P500,000, or imprisonment of not less than three months but not more than two years, or both. We are sure strictly implementing the anti-age discrimination law will have a considerable impact on the local job market. The Philippines has one of the youngest populations in the world, and with about 1 million new graduates entering the labor force every year, there aren’t even enough jobs for our young workers. If employers are mandated to hire applicants based on competence and not age, then there may well be many jobs out there for which older workers are more qualified. Older workers might have more skills and experience from previous jobs and careers that can serve them well in certain trades or professions. Nevertheless, we fully support this measure and its full implementation. Having lived longer is always a plus. It should never be a negative or limiting factor. Older workers who have the skills, knowledge and experience to do certain jobs should not be denied the opportunity to do them just because they have a few more digits in their lives. Now, thanks to the IRR of this new law, they cannot be, and they can never be told they are too old for a job for which they are qualified. Since 2005
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Continued from A1
U
nlike other emerging markets, we don’t rely heavily on foreign direct investments (FDI), although, of course, we welcome and encourage foreign businessmen.
Even then, the strong performance of the Philippine economy serves as a magnet for foreign investments. In November 2016 alone, FDI recorded net inflows of $756 million, up 59.4 percent from $474 million in the same month in 2015. For the first 11 months of 2016, net FDI inflows totalled $7 billion, up 25.4 percent from the same period in 2015. The Bangko Sentral ng Pilipinas (BSP) says the continuing FDI inflows were buoyed by investors’ confidence on the domestic economy on the back of sound macroeconomic fundamentals and sustained growth potential. Thus, international think tanks consider the Philippines as among the countries least vulnerable to uncertainties in the global markets. The World Bank expects the Philip-
pine economy to grow by 6.9 percent this year, following the 6.8-percent growth posted in 2016, and will reach the 7.0-percent level in 2018. The international lender says annual growth in terms of GDP will average 6.8 percent during the period 2017 to 2019, supported by infrastructure spending, remittances and the business-process outsourcing (BPO) industry. Strong consumption on the back of robust remittances and the BPO industry, the government’s intensified focus on infrastructure spending, the continuing expansion of the industry sector, low debt levels and healthy reserves position are among the major factors that will drive our economy amid the global uncertainties. Last year overseas Filipinos sent
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The economy’s strong performance last year, which is expected to continue in the coming years, shows that fast GDP growth is no longer a glitch. We may be over the boom-and-bust cycle of the past and, with the growth drivers intact, we may finally be on the sustainable growth trajectory. We may also be seeing some indications that the economic growth is becoming more inclusive.
home a total of $26.9 billion, up 5 percent year-on-year, exceeding the BSP’s growth forecast of 4 percent. For 2017, remittances are projected to grow also by 4 percent to reach $27.7 billion. In another report, the BSP said gross international reserves stood at $81.04 billion as of end-January 2017, enough to pay for 9.2 months of imports and payments of services and income. It’s also equivalent to 5.8 times the country’s short-term external debt. One good thing about the performance of the Philippine economy is that it is no longer dependent on a single factor, such as remittances, which shielded us from previous global crises. Today, we are seeing the resurgence of manufacturing industries along with the expansion of the
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Getting closer to sustainable and inclusive growth
OUTSIDE THE BOX
M
ost people have their “come to God” moment when all hell breaks loose—pun intended. Others find “true enlightenment” when a continuing situation keeps getting worse and hope is lost.
For 38—less three—consecutive trading days, the Philippine Stock Exchange Composite index (PSEi) has stayed between 7,200 and 7,400. Not only is a 2.78-percent range from bottom to top minimal, to have this price movement drought for some seven weeks is astonishing. But eventually—coming like the rains in California—this will end. In the meantime, local commentary from “experts” and “The Year Ahead” briefings from local stock brokers is right out of the television show Vikings. The Norsemen invaded England and the Archbishop proclaims the attack is punishment “for our sins and transgressions”. One nobleman disagrees, saying, “This is an attack
from the devil. We fight”. Still another castle lord tells them they are both wrong. The Vikings are only raiders who want to steal English treasure. A similar conversation now takes place on the stock-market trading floor every day. Solutions to the armed invasion range from prayer and sacrifice to bribing the Vikings to go away. Be very worried if you see someone leading a goat or fatted calf to the front of the stock-exchange building. Stock-market investors are trying to figure out how they want to adjust to 1) higher oil prices that see little trend of going back down; 2) local interest rates that are trading up and down against support and resistance; and 3) the five-month
Many issues have exhibited three trading patterns in this sideways market. There are those that are continuing to go up against a broad neutral to negative trend. Others have gone higher and are now showing signs of reversing down. Still, others in the past two weeks look like they are ready to break higher.
depreciating trend of the peso. There is not any particular pessimism and worry. It is more of confusion of what those three factors will mean for the future. Remember, money is put in or taken out based on what we all think the future is going to be. And right now, none of us seem to have a strong opinion of what the future is going to hold. So right now, buyers are coming in at support hoping that future buyers will eventually take out resistance. Likewise, sellers are selling out at resistance thinking that more sellers will force prices to break lower from support. And then the cycle is repeated again and again. Buyers do not want to be late, believing that a break of resistance will move the PSEi to 7,800 or whatever. Sellers do not want to be late, believing that a
services sector. Both public and private consumption remain strong. As BSP Governor Amando M. Tetangco Jr. says, the drivers of growth are becoming more diversified. Also, the economy’s strong performance last year, which is expected to continue in the coming years, shows that fast GDP growth is no longer a glitch. We may be over the boomand-bust cycle of the past and, with the growth drivers intact, we may finally be on the sustainable growth trajectory. We may also be seeing some indications that the economic growth is becoming more inclusive. A survey conducted by the Social Weather Stations (SWS) last December found 37 percent of respondents saying their lives improved from 12 months ago, and 21 percent saying they worsened, yielding a +16 “net gainers” score, which SWS classifies as “very high”. The same survey found 48 percent of respondents expecting their personal quality of life to improve in the next 12 months (optimists) and 3 percent expecting it to get worse (pessimists), yielding a “very high” net personal optimism score of +45. It seems that our long-held dream of sustainable and inclusive growth is getting closer to reality. For comments, e-mail mbv.secretariat@gmail. com or visit www.mannyvillar.com.ph.
break of support will move the PSEi to 6,500 or whatever. Many issues have exhibited three trading patterns in this sideways market. There are those that are continuing to go up against a broad neutral to negative trend. Others have gone higher and are now showing signs of reversing down. Still, others in the past two weeks look like they are ready to break higher. The first group includes Agrinurture Inc., BDO Unibank Inc., Belle Corp., China Banking Corp., Crown Asia Chemicals Corp. and Energy Development Corp. in particular. To a lesser extent, Metropolitan Bank and Trust Corp., JG Summit Holdings Inc. and Melco Crown (Phils) Resorts are, perhaps, taking a short break before continuing to move higher. Stock picking in March 2017 is going to be exciting and challenging. But also, it is going to be exceedingly profitable finding lush oasis in the middle of a dry wasteland. Will it be “blue chip” or basura issues? “Big cap” or “second line”? Just wait. 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.
Opinion BusinessMirror
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Mining stalwart speaks up Edsa revisited Ernesto M. Hilario
Cecilio T. Arillo
database
ABOUT TOWN
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T the recent Saturday Forum@Annabel’s, we tackled the mining issue in the wake of the order of Environment Secretary Regina Paz L. Lopez to shut down 23 mining firms and suspend five others, and to cancel more than 70 mineral processing sharing agreements (MPSAs) for alleged violations of environmental laws. Who else would be our surprise guest but a big name in the Philippine mining industry: Dr. Walter William Brown, the president and CEO of Apex Mining Co., which is engaged in the mining of gold, silver, copper, lead and other precious metals, and operates a mining concession in Compostela Valley in Mindanao. With him during the news forum was Dr. Graciano Yumul, a former undersecretary for Research and Development at the Department of Science and Technology (DOST) and now the executive vice president for Geology and Exploration of Apex Mining. Both resource persons said they respected the authority of Lopez to impose sanctions on mining firms that violated environmental laws, but expressed hopes that the affected firms would be given due process. Like the position taken by the Chamber of Mines of the Philippines of which Apex Mining is a member, Brown and Yumul said their company adheres to responsible mining and complies with the environmental standards set by mining laws and the rules and regulations of the Department of Environment and Natural Resources. Brown admitted that his mining company had no choice but to pay the “revolutionary tax” demanded by the communist-led New People’s Army (NPA) in Mindanao, but later decided not to pay anymore as the rebels later on were “asking too much”. Brown said he has worked in the private sector under seven administrations: Ferdinand E. Marcos, Corazon C. Aquino, Fidel V. Ramos, Joseph Estrada, Gloria MacapagalArroyo, Benigno Simeon C. Aquino III and Rodrigo R. Duterte, and wants to be remembered—he is now 78 years old—as someone who helped the country move toward economic development. Brown told the forum that despite his Western-sounding name, he is 100-percent Filipino. Brown, who also owns the restaurant that bears his wife’s name—Annabel’s—where the Saturday news forum has found a new home after many years at Sulô Hotel also in Quezon City—boasts of extensive experience in both the mining and oil-exploration industries in the Philippines. He has served as the president of Acoje Mining Corp., Surigao Consolidated Mining Co. Inc., Vulcan Industrial and Mining Corp., and I Vantage Corp. (formerly, Palawan Oil and Gas Exploration).
He has also served as executive officer, consultant and director to companies involved in mining, petroleum exploration and development, real-estate development and manufacturing. Brown holds a Bachelor of Science degree in Physical Science in 1959 and in Geology in 1960, both from the University of the Philippines, a Master of Science degree in Geology from Stanford University in 1963, and a Doctorate in Geology in 1965, Major in Geo-Chemistry, from the same university.
Will this work?
IF the Department of the Interior and Local Government (DILG) had its way, a parallel campaign would be carried out in the war on illegal drugs, this time by plastering official “drug-free home” stickers on residences certified by the local Peace and Order Council as free of illegal drugs. This, after President Duterte directed the Philippine National Police to suspend all antidrug operations in the aftermath of the abduction-murder of Korean national Jee Ick-joo in October last year. I recall that then-Manila Mayor Alfredo Lim adopted a similar approach during his term, by spraypainting the homes of suspected drug users and pushers. Lim’s “shaming” campaign was assailed as a violation of human rights as it arbitrarily judged an individual as guilty of a drug offense without due process. The DILG’s plan to plaster “drug-free home” stickers is a variation of Lim’s spray-painting tactic, but from a different angle. But essentially, the DILG proposal would shame everyone in residences without the “drug-free home” stickers as drug addicts and/or pushers without due process and leave them vulnerable to rogue law enforcers who could extort money from them or even kill them outright as part of the administration’s brutal war on drugs. We have grave apprehensions over the DILG proposal as this would embolden unscrupulous elements to resort to criminal acts against people whose homes do not have the “drug-free home” stickers. The DILG should study the implications of this planned campaign as it could infringe on civil and political rights and the guarantee of due process embodied in the Constitution.
E-mail: ernhil@yahoo.com.
The oligarch
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Y the end of the martial-law period on January 17, 1981, the oligarchy was no longer as omnipotent as it traditionally was, President Marcos declared.
“Today, the oligarchs have lost effective control of our society. If they continue to pursue legitimate economic undertakings, they do so within the purview of the broader goals of democratization set by the New Society,” Marcos said. Some members of the old oligarchy fared worse than others, and were more resentful of the Marcos administration and of the new elite that had emerged. One attempt to compose a panoramic picture of the changes in the domains of the rich was made in 1982 by the Jesuit priest Fr. John F. Doherty, based on a study of 453 companies covering the period 1977 to 1979. He wrote: “Not all 81 individuals listed in this study are equally favored by the Marcos-Romualdez administration. This is seen in the fact that since martial law, certain
Blooomberg View
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he deadliest outbreak of H7N9 bird flu since its discovery in 2013 is sweeping across China. It’s caused at least 100 deaths and has been detected in half the country’s provinces. So far, the virus seems to be spreading only between birds and the humans who slaughter them for food. But the potential for human-to-human transmission—the trigger for a fullblown pandemic—can’t be ruled out. In response, Chinese authorities have temporarily shut down live poultry markets in some of the country’s biggest cities. The strategy has been proven to work, and authorities in China and Hong Kong have deployed it for decades. But every year, so-called wet markets reopen and both new and known viruses reemerge. If authorities won’t close
such markets permanently—and realistically, they can’t, given how large a role the markets continue to play in China’s food chain—they need to do far more to fix what’s wrong with them. The good news is, that should be relatively cheap and easy to do. Over the last four decades, the retail experience in China has changed dramatically. Once relegated to state-owned outlets selling drab and shoddily made products, shoppers now flock to malls glitzier and tackier than anything in the West. The wet market—typically a crowded, open-air emporium where individual vendors sell food sourced from local farms and distributors—has stubbornly resisted change. Yet, as recently as 2013, some 80 percent of Chinese still chose to buy their fresh vegetables at such places, despite government efforts to promote modern supermarkets. The proportion will be tough to bring
individuals have expanded their corporate empires at a fantastic rate, while the empires of others have either remained stationary or contracted. We have been able to divide the 81 individuals into three groups. “The first group includes the Marcoses and the Romualdezes themselves, the Martels and Disini (their in-laws), Velayo, Benedicto, Cuenca, Silverio, Abello, Tanseco, Tantoco, Ozaeta and Floirendo. The rise to power of this group seems to be related to their connections to the First Couple. Before martial law, few if any of them were well known and none of them were among the traditional elite. Most accumulated their fortunes under martial law. “The second group, also favored by the administration, comes from the ranks of the pre-martial law elite. The business interests of this group
have also grown significantly since martial law was declared, though they had substantial resources to begin with. This group includes the Sycip-Yuchengco family, the Yulos, Elizaldes, Aboitizes, Alcantaras, J.B. Fernandez, Nubla, Palanca, Concepcion and Siguion-Reyna. “The third group, like the second, is part of the pre-martial law elite. However, this group is not clearly and strongly identified with First Family. They are not in the inner circle, so to speak. They have managed to hold their own under martial law but they have to endure periodic harassments and threats to their business interests. They appear to go along, to keep the semblance of loyalty, because if they do not, they realize they could get the way of the Lopezes, Jacintos and Todas who lost their empires. This group would include the Zobel-Ayala family, the Sorianos, Madrigals, Olondrizes, Ortigas, Laurels, and the sugar bloc in general. Perhaps this segment of the old elite is too powerful for the Marcos regime to take on directly…” The separation between these groups was not that pronounced. As Doherty himself noted, there were many interlocks among them in the directorates of various companies. Those who were outside the “inner circle” had links, one way or another, to those within. “One example: in Filipinas Synthetic Fiber Corp., established in
1968 by Patricio L. Lim, among the directors in 1984 were Jose Yulo Jr. and Carlos Palanca Jr.,” whom Doherty placed in the ‘second group’. Their codirectors included Pacifico Marcos and Rolando C. Gapud, who would belong to the first group. Several “anti-Marcos” figures were also directors or officers of companies associated with Marcos “cronies”. A prominent example was the late lawyer (later Sen.) Raul S. Roco, who was a director of Danding Cojuangco’s United Coconut Planters Bank. More pronounced was the line between the old rich and the nouveau riche. This counted in social circles. The old elite must have looked down in contempt at the less cultured newcomers, as if wealth was made more legitimately in the good old days of smuggling, tax evasion, land grabbing, graft and corruption, illegal logging and labor exploitation. Those among the traditional elite who fared badly during the Marcos years bided their time, sharpening their knives. Interestingly, Doherty excluded from his study one of history’s most enduring business empires, the Roman Catholic Church, which remained tax-exempt throughout and beyond the martial-law period. To be continued To reach the writer, e-mail cecilio.arillo@ gmail.com.
Trump’s great chance to tell us what he really wants
he promised voters in the fall? Republicans are tied in knots over how to fulfill their pledge to repeal and replace Obamacare. Trump has vowed to enact universal coverage that’s better and cheaper. He should explain how to perform that impossible balancing act. On taxes, it would be useful to hear what Trump thinks of the big new “border-adjusted” sales tax favored by House Ways and Means Committee Chairman Kevin Brady and Speaker Paul Ryan. A variation of a European-style, valueadded levy that favors exporters over importers, it’s on political life support. Trump could either help revive it, or kill it by not mentioning it. At a minimum, he could echo George W. Bush in 2001 by declaring how low he wants tax rates to go. It’s probably asking too much to call on this president to quit pretending that he can fulfill his campaign promises cost-free, and to start explaining how he wants to pay for them. That includes the big increase in military spending he’s
sure to embrace; will he lay out a strategy to justify his Pentagon wish list? Republicans used to criticize Obama for what they called a global “apology tour”, wrongly claiming that his speeches in historical hot spots like the Middle East and Vietnam amounted to blaming the US for the world’s contemporary problems. Over the last several weeks, however, Trump cabinet members really have been on a “he-didn’t-mean-it” tour, insisting that allies can safely ignore Trump’s anti-Muslim narrative or stated disdain for the North Atlantic Treaty Organization and the US-provided security umbrella in Asia. Another sign of confusion that Trump could address on Tuesday night came when the president denied Secretary of State Rex Tillerson his choice of veteran diplomat Elliott Abrams as deputy secretary of state—the appointment was nixed just before it was to be announced when Trump was told about derogatory statements Abrams made about him during the campaign. Beyond the management issues raised by undercutting a secretary of state, the incident raised policy questions. Abrams is a prominent neoconservative, a supporter of the Iraq War and robust American interventionism. This was exactly what Trump campaigned against, even lying about his early support for the Iraq War. Now there’s chatter about creating security “safe zones” in war-torn Syria backed by an infusion of US forces. Trump, not a big reader, would do well to glance at the initial congressional speeches of his two immediate predecessors. Both laid out clear policy priorities: Obama for investments in clean energy
and education and universal health-care coverage, Bush for tax cuts and selective education initiatives. Both addresses indicated that national security would be secondary. Bush got most of his tax cuts and kept his policy commitment. However, his vow to eliminate the $2-trillion national debt over a decade failed; it actually increased sevenfold to $14 trillion. Of course, there was no way to anticipate in February 2001 that the attack on the World Trade Center and Pentagon seven months later would turn him into a war president. The specifics Obama laid out that night foreshadowed his presidential actions on health care and other domestic ambitions. He did, as he promised, cut the spiraling deficit in half by the end of his first term and by 60 percent by the end of his second. His $800-billion stimulus package helped the economy recover from the shock of the 2008 financial crisis and was largely corruption-free, saving or creating 3 million jobs. Some of his pledges that night did not materialize. He never shuttered the military prison for terrorist suspects at Guantánamo Bay, Cuba, for example, or disengage from Afghanistan. The White House has put out the word that Tuesday’s speech will be more upbeat in tone than Trump’s darkly hued inaugural address. That would be welcome. Maybe he’ll even stop fudging the truth. Contrary to his claims, he has not accomplished more than any president at a comparable stage; Obama had real legislative achievements a month into his presidency, and the Reagan and Bush agendas were further along.
to humans. Instead, wet markets need to be forced to modernize their own practices. It’s an old tale: China’s foodsafety regulators lack the resources and are oftentimes uninterested in enforcing basic biosecurity and food-safety requirements in China’s thousands of wet markets and millions of small farms. Temporary closures are useless if wet markets simply return to their unhygienic practices after reopening. The majority of poultry farms in China (and other developing countries) are small-scale household operations that lack modern management and basic biosecurity measures, such as separating cultivated birds from livestock (especially pigs, which are excellent incubators for flu viruses that infect humans) and household inhabitants. From the farms, these problems move into wet markets, where birds are often kept in tight cages and the mere flapping
of wings can turn fecal droppings into aerosolized virus. Meanwhile, the potential mixing of bodily fluids between species during the slaughtering process remains the most dangerous point in the entire process. These practices can be changed. Large-scale, corporate poultry operations are growing in China, bringing modern biosecurity practices to China’s farms and creating safe, pricecompetitive products. Though big farms potentially have their own biosecurity issues, they’re a vast improvement on the poorly regulated hodgepodge of small operations that currently prevails. For their part, wet markets can easily improve their safety practices without going out of business. A decade ago, in the wake of the first avian flu panics, the World Health Organization published basic guidelines. The suggestions are simple and inexpensive to implement: separate slaughtering zones from
selling areas, use metal or plastic cages that can be easily cleaned, discourage selling live poultry to customers and so on. The key is for the government to enforce such rules strictly, especially in the most populated areas of the country. To encourage that, Beijing should begin directly evaluating local officials for how well they promote food safety in their jurisdictions. This isn’t as outlandish as it might sound. For decades, Chinese officials were promoted—or demoted—on the basis of how much economic growth and social stability they oversaw. Recently, China reformed this system to take into account how well they protected the environment as well. Food safety, consistently a top concern of Chinese citizens, should join the list. Officials must be made to realize that when it comes to the possibility of a pandemic, a bit of preventative medicine is as good as a cure.
Albert R. Hunt
BLOOMBERG VIEW
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resident Donald J. Trump’s initial address to a joint session of Congress on Tuesday night may be the most anticipated in memory. Not, as Trump would claim, because he’s so compelling. Rather it’s because, when it comes to substance, we don’t know who he is.
For Presidents Barack Obama, George W. Bush and Ronald Reagan, a first February speech to Congress was a chance to add definition to wellarticulated policy architecture. Trump, by contrast, has conveyed little sense of a governing structure, preferring to recycle the insults and clichés that defined his campaign. On issues ranging from health care, taxes and the budget to China, Nato and foreign interventions, in five weeks he has created more confusion than clarity. Whether that reflects a lack of knowledge or lack of interest, Tuesday offers an opportunity for a reset. In broad strokes—he’s not presenting a budget, so it’s reasonable to leave out the fine detail—he can spell out priorities and preferences. Is he willing to delay his announcement of a huge infrastructure project until next year, as many Republican congressional leaders wish? How will he slash spending without touching big entitlements like Social Security and Medicare, as
How China can stop a pandemic By Adam Minter
Part Three
Tuesday, February 28, 2017 A11
down. China’s food production remains concentrated among hundreds of millions of farmers who, according to the country’s last agriculture census, tend farms that average around 1.5 acres each. Supermarket chains have a hard time sourcing from such tiny producers. Wet markets don’t, so the food they offer is often fresher and cheaper. When it comes to meat and fish in particular, Chinese prefer to see their purchase alive—and then slaughtered —to ensure that it hasn’t been frozen (which damages flavor and texture—a sin in any Chinese kitchen) or been sitting around in less-than-optimal storage facilities for hours or even days. Prior to 2003, Wal-Mart Stores Inc. actually allowed live slaughtering in its Chinese outlets. The point isn’t that Wal-Mart and other modern supermarkets should return to such practices; live slaughter is a primary means of spreading virus
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Death-penalty push births victims
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By Jovee Marie N. dela Cruz @joveemarie & Butch Fernandez @butchfBM
HE push to revive the death penalty has birthed victims, with the bill itself one of them.
For one, some anti-death penalty senators saw their key posts removed from their helms. For another, the bill was further watered down, limiting capital punishment to drug-related heinous crimes. The latter is seen as a move to further drum up support for the bill at the Lower House. PDP-Laban Rep. Reynaldo V. Umali of Oriental Mindoro, chairman of the House Committee on Justice, said it will be easier for the lower chamber to pass the controversial bill if it will remove “treason, plunder and rape” in the measure. “We agreed that bill will be limited to drug-related heinous crimes,” Umali told reporters, after the supermajority caucus at the House of Representatives. But even before the caucus, lawmakers have already agreed to narrow down to 10 from 21 the number of heinous crimes punishable by death. “The whole point is we had a ‘headway’ on death penalty,” Umali added.
Drug trade
DRUG-related cases include importation of dangerous drugs and or controlled precursors and essential chemicals; sale, trading, administration, dispensation, delivery, distribution and transportation of dangerous drugs and or controlled precursors and essential chemicals, and maintenance of a drug den. A l so pu n i sh able by deat h are manufacture of dangerous drugs and or controlled precursor and essential chemicals, cultivation or culture of plants classified as dangerous drugs, unlawful prescription of dangerous drugs, criminal liability of public officer for misappropriation,
misapplication or failure to account for the confiscated seized or surrendered drugs, and criminal liability for planting evidence. Possession of illegal drugs, meanwhile, will be punishable by reclusion perpetua. “It is more of getting the consensus. It will be easier if we limit it to [drug-related] crime[s],” Umali said. “It’s a matter of providing compelling reason of those who really oppose death penalty.” According to Umali, the debate on the bill “became lighter when we agreed to drug-related crimes”. “Because they [lawmakers] have hesitations,” Umali said. “They will probably vote but with a heavy heart.” Umali said the lower chamber has decided to move the approval of the bill on Wednesday instead of Tuesday. He said the decision would give way to the committee to insert all the changes.
Opposition remains
THE watering down of the bill, however, has not sated the opposition. Buhay Rep. Lito Atienza said “as long as death penalty is there, I will continue to oppose it. “It will not eradicate the drug problem nor fight criminality,” Atienza added. Party-list Rep. Tomasito S. Villarin of Akbayan said global trends in the fight against drugs show that death penalty has not deterred drug trafficking, manufacturing and use of illicit drugs in countries that execute those convicted of drugrelated crimes. “It is mostly the poor who will be arrested and convicted, not the syndicate bosses. As benefits in the drug trade far outweighs the risk, even death, the trade will
continue,” Villarin said. “A comprehensive solution, including treating it as a health problem, should be pursued.” Liberal Party (LP) Rep. Teddy B. Baguilat of Ifugao said this decision only shows how arbitrary the leadership is in defining what’s compelling to justify death penalty. “They started with 21 crimes, then limited coverage while excluding plunder. Then they brought it back along with four more crimes and now it’s just offenses,” Baguilat said. “It also betrays how tenuous their alliance is in supporting DP [death penalty]. Because they are adjusting the provisions based on the whims of their coalition members.”
Senate “mini-revamp”
AT the Senate, leadership controlled by Malacañang’s allies moved to strip four senators, known Liberal Party mates of former President Benigno S. Aquino III, of leadership posts and key committee chairmanships in a mini-revamp carried out with no objections at the start of Monday’s session. On a motion by neophyte Sen. Manuel D. Pacquiao, the senators, without objections, agreed to declare vacant the position of Senate President Pro Tempore Franklin M. Drilon, as well as the chairmanships of the Committees on Agriculture, Education and Health, held by LP Senators Francis N. Pangilinan, Bam Aquino and Riza B. Hontiveros. Senate Minority Leader Ralph G. Recto was named to replace Drilon as new Senate President Pro Tempore, while Sen. Cynthia A. Villar was named to replace Pangilinan as agriculture committee chairman, Sen. Francis G. Escudero as chairman of the Committee on Education replacing Aquino, and Sen. Joseph Victor Ejercito as health committee chairman, in place of Hontiveros. The senators also voted to install Sen. Antonio V. Trillanes III as acting Minority Leader, while awaiting word from the dislodged LP senators. The senators who lost their posts are known to have voiced opposition against capital punishment.
President Duterte and Mitsubishi Motors Corp. CEO and President Osamu Masuko unveiled the Mirage G4 manufactured in the Philippines during a launching ceremony held at Malacañang on February 27. The production of the Mirage G4 is supported by the government’s Comprehensive Automotive Resurgence Strategy (CARS) Program, of which Mitsubishi is a participant. The Japanese car company is targeting to produce 200,000 units of the Mirage/Mirage G4 model in six years under the CARS Program. STEPHANIE TUMAMPOS
Duterte views Phl-made Mitsubishi Mirage up close Continued from A1
Laguna, can produce a maximum of 50,000 units annually. The local production of the Mirage, which will start in May, is expected to increase further local content and boost production volume of MMPC by 50 percent, ,and will create additional job opportunities to both MMPC and local parts suppliers. Some of the local parts suppliers will also take advantage of technology transfer from their foreign partners for
the overall improvement in operations, efficiency and quality. Designed to address the need for a practical and yet stylish compact sedan, the Mirage G4, which stands for Mirage Global 4-door sedan, offers great cabin and trunk spaces, class-leading features and amenities, providing customers with exceptional value for money and fuel economy. According to Kato, MMC has already invested about P4.3 billion for the production facilities and equipment. “We are
very grateful to the Philippine president for his support to the CARS Program.” In his message, Masuko expressed his confidence in the government, “Under the strong leadership of President Duterte, there is big potential of economic growth in this country. The automotive industry, with its broad base, high-quality labor force and strong support through the government’s development policy, will contribute more to the progress of the Philippine economy.”
BTr dampens across-the-board T-bill rise with token lift on 364-day rate
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reasury officials thwarted on Monday attempts by institutional investors to ramp up short-term Treasury bill (T-bill) rates ahead of the anticipated normalization of US interest rates seen as early as the next rate-setting meeting of the US Fed. While all three T-bill tenors posted increases, the Bureau of the Treasury (BTr) auction committee dashed all notions of an across-the-board rate rise by allowing the one-year T-bill rate a token increase of only 0.3 basis point to 2.763 percent from 2.766 percent. Allowing the long end of the T-bill spectrum to rise in double-digit fashion just like its short-dated counterparts would have sent a vastly different message to a market already anticipating lending rates in the US, still considered the world’s safest market, to rise to unwarranted levels. Nevertheless, Treasury officials were surprised on Monday that the previously uncomplicated 364-day T-bills generated interest of more than twice the offered volume of only P4 billion as aggregate bids reached P9.405 billion instead. “I think the surprise today was really the 364-day T-bill rate because as you may have observed in the past” the tenor had been quite undersubscribed,” Deputy Treasurer Edwin D. Sta. Ana said. “Now you’re seeing that it is, in fact, the most in demand of the three. I think this has something to do with the perceived normalization of [US] interest rates over a one-year horizon. I think that’s what we are seeing at this stage,” Sta. Ana said. The Treasury auction committee sold all P6 billion worth of 91-day T-bills on
offer on Monday and allowed the rate to move up 10.8 basis points to 2.360 percent, from only 2.252 percent, when the tenor was last sold. It was obvious that the market, long starved of rates higher than where these are at present, threw a total P8.57 billion worth of offers at the tenor to no avail, forcing the auction committee to reject P2.57 billion. “I think [today has] a much better turnout compared to past T-bill auctions that we had. You look at the total demand and we have around P25 billion, if I’m not mistaken. We’re fully subscribed on all tenors offered today so the 91- and 364day tenors each had a full award. “Of the three, only the 182-day has a slightly muted response from the dealers so we were able to partially award to manage the yield curve at the short end,” Sta. Ana said. “We think the reason the 182-day behaved like that was in anticipation of the moves by the US Federal Reserve [the Fed] in the second half of the year. [That] is actually starting to show in the numbers because, I think, today it reached about 40 percent in terms of the probability of a hike. And toward the second half of the year we could observe a bit higher probability of a Fed action,” he added. Total tenders for the T-bills aggregated P23.105 billion, with the BTr offering a total of only P15 billion. “The yields are relatively, well, a bit higher than previous but marginally low, so you are seeing a 10- to 12-basis point pick up from the past auction if you look at the average rate,” Sta. Ana said. Rea Cu