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Wednesday, February 28, 2018 Vol. 13 No. 140
Duterte’s Con-com picks US-style federal system T By Bernadette D. Nicolas
@BNicolasBM
he consultative committee (Concom) tasked by President Duterte to review the 1987 Constitution on Tuesday voted 11-7 in favor of a presidential form of federal government. T he federa l- president i a l system adopts the current setup of a national government with three branches: Executive, Legislative and Judiciary.
Pernia: NFA should not be involved in rice trading PERNIA: “The NFA should really just focus on ensuring adequate buffer and the regulation of the market.”
By Cai U. Ordinario @cuo_bm
T
he National Economic and Development Authority (Neda) believes the heavily indebted National Food Authority (NFA) no longer has a place in the buying and trading of rice. Socioeconomic Planning Secretary Ernesto M. Pernia said this is actually the aim of the rightsizing of the national government bill, which is included in the list of the Duterte administration’s legislative agenda. “Support price? No, the NFA should really just focus on ensuring adequate buffer and regulation [of the market]. They should no longer be involved in buying [and] trading,” Pernia told the BusinessMirror on Tuesday. Neda Undersecretary for Planning and Policy Rosemarie G. Edillon explained that apart from the indebtedness of the NFA, any increase in the support price of the agency will be inflationary. Also, every time the NFA imports rice and then “floods” the market with cheaper rice, it causes high volatility in markets by causing rice prices to severely decline. See “Pernia,” A2
However, in a federal setup, the country will be divided into federal states with their own legislature and local governments. This system is being followed in
PUNO: “This structure characterized by separation of powers, characterized by check and balances, is the best federal government in the world.”
the United States. The panel shifted to runoff voting through show of hands after it failed to reach the majority number of votes from the members who were present.
Market demand, competition test strength of PHL’s abaca By Jasper Emmanuel Y. Arcalas @jearcalas
L
Conclusion
AST month the Bases Conversion and Development Authority announced it has remitted to the National Treasury a total of P5.22 billion, “the highest amount generated by the agency so far.” Add P413 million and that becomes the total funding the government must shell out to maintain the Philippines’s status as the world’s top abaca-producing country. More so, for the Philippines to be able to catch up with the growing demand for abaca in the global market, it must shell out P5.633 billion. Such is the assessment of the Philippine Fiber Development Authority (PhilFida) in its newly crafted “Philippine Abaca Roadmap 2018 to 2022” (Roadmap). The Roadmap, a copy of which was obtained by the BusinessMirror, points to a government vision of a “progressive” Philippine fiber industry that produces “the world’s best-quality fiber to supply global demands for renewable, sustainable and environment-friendly products to achieve the country’s inclusive growth.” However, programs and interventions aimed at tripling the country’s abaca output to 221,238
PESO exchange rates n US 51.8290
This file photo shows men weaving abaca by hand in a shop at a village in Santa Fe, Nueva Vizcaya. In its blueprint for the abaca industry, the Philippine Fiber Development Authority expects the country to regain its status as the world’s top abaca producer through a substantial budget. NONIE REYES
metric tons (MT) in the next four years would require a budget equivalent to the net income Petron Corp. posted in the first quarter of last year. Under the Roadmap, Phi lFida would need P1.753 billion this year for all the necessary inventions it plans to roll out to hike abaca production. Another P1.894 billion is needed by 2019 and P904.426 million in 2020. By 2021, about P992.717 million is required and only P88.605 million in 2022.
Expansion
THE government intends to expand abaca plantations in the country to 238,666 hectares from the current 180,302 hectares, the Roadmap said. The PhilFida would expand abaca plantations by 39,364 hectares this year, by 10,000 hectares in 2019 and 9,000 hectares in 2020, the Roadmap added. The PhilFida is targeting to rehabilitate nearly 50,000 hectares. of abaca plantation in four years Continued on A2
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Helping UN foster peace and security Teddy Locsin Jr.
free fire Philippine statement delivered by Ambassador Teddy Locsin Jr. on February 20, at the Meeting of the Special Committee on the Charter of the United Nations and on the Strengthening of the Role of the Organization at the United Nations Headquarters, New York .
T
he Philippines subscribes to the statement delivered by Islamic Republic of Iran on behalf of the Non-Aligned Movement. Allow me to congratulate the Permanent Representative of Morocco Omar Hilale for his appointment as head of Special Committee. He has our complete support. Continued on A10
See “Federal system,” A2
BMReports
2016 ejap journalism awards
Govt to avert Boracay-like problems in Siargao–DOT By Ma. Stella F. Arnaldo
@akosistellaBM Special to the BusinessMirror
T
HE Department of Tourism (DOT) is studying the possibility of helping Siargao put up its own sanitary landfill to prevent environmental stress on the island, which is popular for surfing activities. The proposal comes in the wake of the reported environmental damage being experienced in some parts of Boracay Island, known the world over for its powdery white-sand beach. In a recent press conference in Davao City, DOT Undersecretary for Public Affairs, Communications and Special Projects Katherine S. de Castro said: “The good thing about Siargao, the people there are the ones who tell us what they need. They need a sanitary landfill because, as of the moment, they only have an open dump, which, as we know, the DENR [Department of Environment and Natural Resources] has already prohibited [under the Solid Waste Management Act of 2000].” De Castro met with the local government representatives of General Luna, on February 12, as part of the DOT’s fact-finding mission of the country’s natural tourism destinations that may need protection and preservation from environmental damage. She later told the BusinessMirror: “The DOT will seek assistance from DENR and DPWH [Department of Public Works and Highways] on the construction of the road and the landfill.” The DOT will be reporting its findings to President Duterte, she added. General Luna is where Cloud 9, a wave of water that turns into a long tube that surfers enjoy, regularly occurs.
De Castro said business operators in Siargao also want to discuss with the DOT how to plan for the construction of resorts. They, likewise, brought up the issue of “connectivity, as there is only one direct flight from Manila to Siargao every day,” referring to SkyJet Airlines. The other airlines, i.e., Philippine Airlines and Cebu Pacific Airways, fly from Manila to Siargao via Cebu. According to the provincial tourism office of Siargao, there were 129,730 visitors to the island in 2017, of which, almost 35,000 were foreigners. Of the total number of foreign tourists who went to Siargao last year, the largest numbers came from Australia (2,244), a country also known for its surf spots; Germany (1,826); Spain (1,763); Canada (1,706); and France (1,511). De Castro said she will be visiting Coron, Palawan, next to check the situation there and see what its stakeholders need to keep it on the tourism map, without sacrificing its pristine condition. The DOT, along with the DENR and the Department of the Interior and Local Government, as part of an interagency task force, is working on rehabilitating Boracay Island. While the DENR and DILG enforce easement rules, zoning ordinances, environmental laws, and investigate local officials who may have abetted the environmental damage of the island, the DOT on Monday, announced the suspension of accreditation of Boracay resorts for six months. (See, “DOT stops accrediting resorts in Boracay,” in the B usiness M irror , February 27, 2018.)
n japan 0.4848 n UK 72.3792 n HK 6.6246 n CHINA 8.2134 n singapore 39.3748 n australia 40.6909 n EU 63.8274 n SAUDI arabia 13.8207
See “Govt,” A2
Source: BSP (27 February 2018 )
BMReports BusinessMirror
A2 Wednesday, February 28, 2018
www.businessmirror.com.ph
Market demand, competition test strength of PHL’s abaca Continued from A1
beginning with 30,000 hectares this year. Next year, about 10,000 hectares are targeted to be rehabilitated. About 9,000 hectares are targeted to be rehabilitated in 2020. “The huge increase in abaca plantation area is aimed to accommodate the demands on abaca fiber, especially the pulp sector,” the Roadmap read. “To cater to the increasing demand for abaca fibers, vast hectare of abaca farms [that were] cleaned from abaca diseases, old and less-productive abaca farms, are targeted to be rehabilitated nationwide.” The attached agency of the Department of Agriculture (DA) would expand plantations in the Bicol region and Eastern Visayas—the top abaca-producing regions in the Philippines. The PhilFida would rehabilitate 89,558 hectares of abaca-growing areas in the Bicol region and 19,214 hectares in Eastern Visayas. “Extensive abaca expansion and rehabilitation efforts will be undertaken from 2018 to 2019 to meet the targeted 238,666 hectares of total abaca areas by 2022. Bulk of the expansion and reha-
Govt. . .
Continued from A1
Meanwhile, DOT Regional Director for Western Visayas Helen Catalbas declared it “business as usual in Boracay Island as tourist traffic remains relatively similar or heavier as compared to the past days and weeks.” She said of the 170 accommodation establishments on the island her office contacted, only 12 reported cancellations, totaling 64 rooms and 192 persons for 32 nights. Most of these resorts, she added, were below 50 rooms and not accredited by the DOT. Also, she pointed out that these cancellations “may not be related to the pronouncement of the President” that Boracay is a “cesspool.” In her presentation to the InterAgency Task Force on Boracay last February 21, Catalbas showed that, from February 12 to 18, arrivals in Boracay even rose by 15 percent to 48,904, compared to the same period in 2016. “Of the total arrivals during the period of review, 12,497
Pernia. . .
Continued from A1
While the Neda has yet to run the estimates of how much a P1 or a P3 increase in support price will cause on inflation, Edillon said it is likely that the agency will vote against any increases. “The NFA is creating too much volatility in the market,” Edillon said. “Yes, we will run the numbers, but we already know what our position will be.” Edillon said increasing the buying price is also unfair, as 2 million Filipino families depend on rice farming. She said they are also rice consumers, so any hikes in prices will also affect them. The Neda official said the farmers must be assisted in diversifying to other crops that are more suitable to their location. “Any increases in buying price will fuel inflation and increase poverty,” Edillon said. “You only have 2 million rice farmers in the
bilitation activities will be conducted in Regions 5 and 8 and in the regions of Mindanao,” the Roadmap read.
Production
THE Roadmap indicated that the rehabilitation and expansion of abaca plantations would hike output to 76,385 MT this year; 79,576 MT in 2019; 117,519 MT in 2020, 176,715 MT in 2021; and 216,761 MT in 2022. The annual abaca output of the Philippines is pegged at 72,734.71 MT. “In terms of targets, a total of 69,364 hectares in 2018 and 44,167 hectares in 2019 will be planted to reach an estimated total abaca fiber demand of 160,444 MT in 2020 with an increase of 12 percent annually,” the Roadmap read. “Corporations and farmers have committed to plant abaca in more areas depending on the availability of planting materials.” The PhilFida, as cited in its Roadmap, expects that by 2022, with the targeted farm expansion and rehabilitation of 146,248 hectares, an estimated fiber production of 216,761 MT will be attained. To reach its targeted output, the PhilFida
were foreigners and 35,757 were local tourists.” For its part, the municipal government of Malay, Aklan, which covers Boracay Island, was supposed to have a meeting with island stakeholders and business owners on Tuesday to discuss a six-month action plan to support President Duterte’s instructions to national government agencies to rehabilitate Boracay.
‘Crackdown on violators'
The National Economic and Development Authority (Neda) said local government officials and resort owners who will be caught violating environmental, sanitation and pollution laws should be apprehended. In an interview on Tuesday, Socioeconomic Planning Secretary Ernesto M. Pernia told the BusinessMirror that a crackdown on violators must be done in all tourist destinations nationwide. “We should really crackdown on violators. The local governments must enforce rules and regulations. In Panglao, I already warned them, Philippines, so 2 million households dependent on rice farming. But you have a total of 22 million Filipino families. [Helping only 2 million families] is not logical.” The reaction of Pernia and Edillon came on the heels of the senators’ call to raise the support price of the NFA. The increase in its buying price aims to encourage farmers to sell paddy to them.
Senators’ appeal
Senators on Tuesday called on the NFA Council (NFAC) to increase the buying price of NFA for palay by at least P1 per kilogram (kg) so that the state-run grains agency could procure more paddy from local farmers. Sen. Nancy S. Binay proposed to increase the NFA’s current buying price for palay to P20 per kg, from the current P17 per kg. “Couldn’t there be a compromise this time? Maybe the NFAC could allow the NFA to buy palay at a price higher than P17 per kg,”Binay said during
would need at least 69.36 million of planting materials this year; 30.92 million next year and 30.92 million in 2020. “[The main problems] of the PhilFida are its dependence on tissue culture planting materials, low seedbank seedling production and disease-infected planting materials. Currently, the PhilFida can only produce a maximum of 500,000 planting materials versus a requirement of 146.28 million,” the Roadmap said. “It would take the industry about 292 years to acquire said requirement.” To address this problem, the PhilFida would shift to abaca seed-derived planting materials from tissue culture production. “Use abaca seed-derived planting materials in response to the needs of the clients. In order to cover the 146.26-million planting material requirement, a total of 4.17 tons of seeds are needed [based] on an assumption of 35,000 seeds per kilogram,” the Roadmap said.
Interventions
THE attached agency of the DA plans to establish more nurseries per region and encourage local nursery operators and local
government units to go into the production of abaca seedlings. The PhilFida would also eradicate abaca diseases like bunchy-top, brat mosaic and mosaic and replant the crop in diseasefree areas. “To address the problem of the abaca industry on virus diseases the development and introduction of new abaca varieties possessing resistance to virus diseases shall be pursued through conventional breeding and modern biotechnology,” the Roadmap said. It added that the ongoing research projects of the University of the Philippines Los Baños-Institute of Plant Breeding and Visayas State University on multilocational trial of newly developed disease-resistant abaca hybrids will be continued and so with the ongoing project of PhilFida on the development of transgenic abaca possessing resistance to bunch-top disease.
Techniques
THE agency said funds would be needed to improve abaca trade performance for its fiber processing and utilizing program and for research and development. “The production of abaca fiber is depen-
if they do not enforce the [laws], they will be charged,’” Pernia said. Pernia said local officials may be charged with gross negligence and w i l l then be suspended, while criminal charges may be filed against resort owners who violate these laws. Local Government Secretary Eduardo M. Año said, however, that the agency is just focusing on resolving the Boracay issue at the moment. Año added that once the investigation is completed in six months, the DENR and the Department of the Interior and Local Governmen (DILG) can start filing cases and imposing sanctions against local government units (LGUs) and businessmen. For local government officials, this can mean suspension while for businessmen, it can even lead to the demolition of their resorts in Boracay. “We’re still focusing on Boracay. We are not yet talking about the other tourist spots, because it depends on DENR and DOT. We only come in if there are concerns like this [Boracay], and we will look at the side of LGU administration and
implementation of all pertinent laws. So right now, Boracay is our only focus,” Año said. However, Año added the DILG, together with the DENR through Secretary Roy A. Cimatu and Tourism Secretary Wanda Corazon T. Teo, have all recommended the imposition of a state of calamity in Boracay. He said this will not only speed up the resolution of the problem but also allow the island to be rehabilitated. If a state of calamity is declared in Boracay, Año added the island can obtain access to calamity funds it will need to restore it to is former glory. “The declaration of a state of calamity] is a presidential prerogative. Based on my discussion with Secretary Cimatu and Secretary Teo of [the] DOT, that is one of actions we intend to recommend to the President,” Año said. He also clarified that the government does not intend to impose a total closure of the entire Boracay island, but a temporary six-month closure to make way for the massive rehabilitation of the island.
the Senate Committee on Agriculture and Food’s hearing on the status of the NFA’s stockpile on February 27. “Even just this harvest season, because their imports will only arrive by June. They cannot buy at P17 per kg, so maybe you could consider increasing it to P20 per kg,” she added. Binay emphasized that there is a “sense of urgency” to increase the NFA’s palay-buying price, as the food agency’s stockpile is almost depleted. NFA Administrator Jason L.Y. Aquino disclosed during the committee hearing that the agency’s current bufferstock is equivalent to just 1.7 days of the daily rice requirement of the country. However, committee chairman Sen. Cynthia A. Villar was quick to point out that the proposal of Binay to hike the palay-buying price of the NFA by P3 per kg is “too much” and “inflationary.” “We cannot recommend such increase because all the products will be affected. If
it affects inflation, then it’s not only rice that will be affected but also all the products,” Villar said. The lawmaker said, however, that she is amenable to hiking the buying price by P1 per kg. “We can consider increasing it to P18 per kg.” But, Agriculture Secretary Emmmanuel F. Piñol supported Binay’s proposal, saying that P20 per kg is a “fair” price for local paddy. “You have to understand that if you go beyond that, prices of rice will increase in the market.” Neda Assistant Secretar y Mercedita Sombilla, who is a part of the NFAC and was present during the hearing, said they would take note of the committee’s appeal and raise the matter before the NFAC. “I think we will take that to the council. The suggestion of this body to increase the buying price [of NFA] by P1 per kg and encourage NFA to procure more locally as abundant harvest is expected,” Sombilla said. With Jasper Emmanuel Y. Arcalas
Federal system. . . Eighteen of the 20 committee members attended the session. Those absent were lawyers Reuben Canoy and Victor de la Serna. Committee members who voted for presidential type of government were chairman and former Chief Justice Reynato Puno, lawyer Antonio Arellano, Dr. Virgilio Bautista, lawyer Roan Libarios, retired Associate Justice Antonio Eduardo Nachura, lawyer Randolph Parcasio, former Senate President Aquilino Pimentel Jr., retired Associate Justice Bienvenido Reyes, lawyer Laurence Wacnang, lawyer Ali Balindong and Prof. Eddie Alih. Those who voted for a hybrid or semipresidential type were Arthur Aguilar, lawyer Ferdinand Bacobo, lone female committee member lawyer Susan Ordinario, dean of San Beda Graduate School of Law Fr. Ranhilio Aquino, lawyer Rodolfo Robles, Prof. Edmund Tayao and De La Salle University Political Science
With Cai U. Ordinario
Continued from A1
Prof. and former Dean Julio Teehankee. Before explaining his vote for presidential form, Puno expressed his reservations on the other forms of government, saying that “we shall be incurring a lot of risk” that the country cannot afford “as we start a federal system of government.” He also described the hybrid option as “a leap to the unknown.” “We cannot afford a system where we see too many moving parts of the puzzle that we have yet to capture. We all want meaningful change, but this change cannot be hinged on chance.” Puno stressed he voted for presidential form of federal government because the country is already familiar with it. The country adopted this system in the 1935 Constitution, 1973 Constitution and 1987 Constitution. “In our presidential system, executive power is vested solely and exclusively in
dent on the processing techniques done manually using the traditional stripping knives or mechanically through the use of fiber extraction machines,” the Roadmap read. Citing 2012 fiber statistics, the Roadmap said the present level of mechanization computed as percent machine-extracted fiber to total bailing is 13.6 percent. To increase fiber production, the Roadmap shall establish 1,996 units of an abaca stripping center and drying shed as common service facilities. This move will require a budget of P399.2 million. By the year 2020, additional 3,114 units will be established with a budgetary requirement of P622.8 million. The PhilFida, under the Roadmap, would also distribute stripping knives and improved hand-stripping devices totaling 620 units and 840 units by 2018 and 2020, respectively. This will require a budget of about P7.095 million for 2018 and P10.7 million for 2020. With these guidelines and expected government support, the country can only hope the Philippine abaca, known to many as Manila hemp, would continue to get stronger as an industry.
Performance bond. . .
We’re also asking for help from Insurance Commission on the best way to put a funding on this performance bond,” he said.
Continued from A12
The entry of a new player is seen as a catalyst for change in the telco industry in the Philippines, which is highly dominated by the two incumbents and their subsidiaries: PLDT
Inc. and Globe Telecom Inc. According to Rio, the new core player will help push the two existing providers to lower the costs of their services, all while improving their services. “Even after 20 years of the existence of the incumbent telcos, we have these problems, so we are going to use the third telco player to resolve and bring up the standard of the Philippine telco industry,” he said. Generally, telco products in the Philippines—now based on the speed and quality of data services—are inferior compared to its neighbors in Asia. Based on the fourth-quarter report of OpenSignal on the state of the Internet in the Philippines, the country’s telco services— particularly its 4G products—marked improvements during the said period, but still lagged behind those of its peers. Availability of the said product in the Philippines was only at 63.7 percent—an almost five-percentage-point improvement from the quarter prior, trailing behind Asean neighbors Vietnam, Malaysia, Indonesia and Thailand. Speed was at an average of 9.5 Mbps, placing the country at the third-slowest in the world. “The people are crying out for better telco services,” Rio said. Hence, the government will be in full support of the establishment of a third telco player, he added. The government will “ensure frequency bands to be used, facilitate the agreement for the use of dark fiber, provide access to DICT facilities and facilitate issuance of the international gateway facility licenses.” However, should the winning bidder fail to meet their targets, the second placer will then “take over.” “What we will do is, we will get an external auditor with the help of International Telecommunications Union to audit the rollout of the new major player for the first to fifth year,” Cordoba said. Based on an indicative timeline, the final version of the memo should be released on April 9. Bids are to be accepted on May 24. May 2018 is the deadline for the new telco player to come in. Interested parties include Now Corp., Philippine Telegraph & Telephone Corp. and Converge ICT Solutions Inc.
the President, a president that is directly elected by the people. Legislative power is vested in Congress, in two houses, and judicial power is vested in the Supreme Court and the lower courts established by law. These three branches of government are separate, but they check and balance each other in order to prevent tyranny of any branch,” Puno said. “We pattern this structure of government from the United States, which has a federal form of government. This structure, characterized by separation of powers, characterized by check and balances, is the best federal government in the world.” The committee previously voted 9-8-1 by nominal voting in favor of presidential form of government. This meant the winning vote failed to get the required majority. In the runoff voting, some members changed the votes they previously cast during the nominal voting. Balindong and Alih changed their votes from hybrid to presidential form of government. Aquino, who previously
voted for parliamentary, eventually voted for the hybrid form of government. Absent member Canoy’s vote was not counted. The landmark decision came after co m p re h e n s i ve p re s e nt at i o n s f ro m committee members on three types of federal government, namely, presidential, parliamentary and hybrid. Aquino presented the proposal for parliamentary form of government. The presidential type was presented by Pimentel, while the hybrid type of federal government was proposed by Teehankee. The committee is set to submit the final draft of the constitution to President Duterte on July 19, days before the Chief Executive’s State of the Nation Address on July 23. Duterte initially chose 19 people from different areas for the Con-com to review the constitution as part of the administration’s Charter-change push as a buildup to a shift to a federal government from a unitary one. Last week, Bacobo was appointed by Duterte as the newest member of the committee.
Coverage, speed minimum requirement spelled out
The auction for the right to offer telco services in the Philippines is being held currently. It deviates from the traditional bidding, where the winning bidder is decided based on the amount of money that it offered. For this auction, bidders will be awarded “points” on how they would address the technical aspects listed by the telco regulator, for instance, minimum requirements on coverage and speed. Cordoba listed the minimum-coverage requirement for each year as: 15 percent of the population in the first year, 30 percent in the second year, 45 percent in the third year, 60 percent in the fourth year and 70 percent in the fifth year. “This is not geographical but in terms of the people reached,” Cordoba said. “The President wants coverage of the areas, and he wants the third player to be able to compete with the incumbents.” Minimum average speeds were listed as follows: 8 Mbps for the first year, 10 Mbps for the second, 12 Mbps for the third, 14 Mbps for the fourth and 16 Mbps for the fifth. This means that bids on the these technical aspects should meet— or be better than—the said minimum requirements. Sought for comment, Internet Society of the Philippines Chairman Winthrop Y. Yu said his group welcomes the proposed amendments to the rules on the selection of the third player. He noted, however, that they will continue to study the provisions of the final memo. “As to the specifics, it is very hard to say what specific provisions of the memo will be good until we see who will be competing. But I believe, at the minimum, what the government is trying to do is remove what in election would be nuisance candidates that don’t have the capacity to actually deliver results,” Yu said.
Two decades of problems
The Nation BusinessMirror
www.businessmirror.com.ph
Editor: Vittorio V. Vitug • Wednesday, February 28, 2018 A3
Sereno’s leave not a prelude to resignation–spokesman &
C
By Joel R. San Juan @jrsanjuan1573 Jovee Marie N. Dela Cruz @joveemarie
HIEF Justice Maria Lourdes A. Sereno on Tuesday decided to take an “indefinite leave” a week before the House justice committee decides on whether there is a probable cause to put her on impeachment trial for culpable violation of the Constitution, corruption and betrayal of public trust. Rep. Reynaldo V. Umali of the Second District of Oriental Mindoro, the panel chairman, said the termination of the proceedings was done after 15 committee hearings on the impeachment complaint filed by lawyer Lorenzo Gadon. “The hearings we have conducted since November of last year have proven that there are alarming issues within the High Court that necessitates evaluation of the fitness of the chief magistrate to continue holding the high office of the head of the third branch of government, which is the Judiciary,” Umali said. “The voting for probable cause hearing we intend to hold next week to give us sufficient time to discern on our votes since the results will all depend on the individual appreciation of this committee,” he added.
Umali said his committee will vote on March 6 on the determination of probable cause to impeach Sereno. This developed as lawyer Brenda Jay Mendoza resigned as head of the Philippine Mediation Center after her appointment to the post was tackled by the House Committee on Justice during Tuesday’s impeachment hearing. Mendoza’s appointment to the post is among those raised by Gadon as grounds to impeach Sereno. Her appointment was criticized by other Supreme Court magistrates for being “irregular,” as it did not pass through the court en banc. Lawyer Josa Deinla, one of Sereno’s spokesmen, did not deny the chief magistrate’s decision to go on indefinite leave starting on Thurs-
day, but clarified that the decision was not abrupt as she has been planning to go on “wellness leave” already. Deinla, however, denied that Sereno was pressured by her fellow magistrates to take an indefinite leave during their regular en banc session on Tuesday. “She has been planning to go on leave anyway. She was not forced to. Neither is her leave a prelude to her resignation,” Deinla said in a text message to the Businessmirror when asked to confirm reports that Sereno was convinced by her fellow magistrates during their en banc session to go on indefinite leave. Senior Associate Justice Antonio T. Carpio will take over as acting Chief Justice while Sereno is on leave. When asked anew to clarify whether Sereno’s leave is indefinite, Deinla replied: “Please wait for official statement.” Sereno’s camp also warned members of the House Committee on Justice of possible violation of the Constitution in scrutinizing the result of the chief magistrate’s psychological exam since it does not constitute grounds for impeachment under the Constitution. “Congress’s concerns about removal from office should focus on the specific grounds stated in the Constitution, and the psychological report is not one of them,”said lawyer Jojo Lacanilao, Sereno’s spokesman. Lacanilao added that “expanding and redefining the grounds for
impeachment is itself a violation of the constitutional provision.” “The complaint is bogus because it is citing the psychological result, which is not part of the grounds in the Constitution as removal grounds for an impeachable officer,” he said. Deinla had earlier dismissed as a mere publicity stunt and part of the ongoing smear campaign against Sereno the plan to make public the results of the Chief Justice’s psychological exam to attract public attention and vilify her to boost the baseless impeachment complaint. The intention, she said, is “humiliate, insult, malign, ridicule and discredit the Chief Justice before the public.” However, she added that “this baseless allegation could easily be demolished by Sereno’s solid background and track record,” Deinla said. In his complaint, Gadon claimed that Sereno got a 4 out of 5 grade in her psychological exam. According to him, “an applicant to any position in the Judiciary with a grade of 4 is unfit for the job.” Aside from this, Gadon accused Sereno of culpable violation of the Constitution, corruption, other high crimes and betrayal of public trust. Gadon claimed that Sereno did not declare in her Statement of Assets, Liabilities and Net worth (SALN) the “exorbitant lawyer’s fees” of $745,000, or P37 million, which she received from the Philippine government.
The impeachment complainant said the issue of SALN declaration is the strongest case presented against Sereno. The complaint also alleged that Sereno committed corruption when she, among other things, used public funds to finance her extravagant and lavish lifestyle by ordering the purchase of a brandnew luxurious Toyota Land Cruiser 2017 model as her personal vehicle, amounting to more than P5 million; and staying in opulent hotels when attending conferences in the country and abroad. As to the alleged acts constituting high crimes, Gadon accused Sereno, among other things, of obstruction of justice by ordering the Muntinlupa judges not to issue warrants of arrest against detained Sen. Leila M. de Lima in connection with her drug cases; and failure to report her high attorney’s fees and pay the appropriate taxes therefor, among others. On betrayal of public trust, the complaint alleged that, among other things, Sereno hired an information-technology consultant with an excessive compensation without public bidding; sent a strongly worded but misplaced reply to President Duterte on the judges linked to drugs, thereby, inviting a head-on collision between the presidency and the Judiciary; and prevented the Court of Appeals justices to do a courtesy call on President Duterte.
Duterte vows stronger police, military forces at end of term
D
AVAO CITY—President Duterte said he would like to see a stronger and more capable police and military forces serving the country when his Palace term expires in 2022. To translate this to reality, the President said he will priotize the acquisition of modern police and military hardware and equipment, alongside his program for a massive infrastructure buildup embodied under his administration’s “Build, Build, Build” program. “They [police and military] will have the priority in the purchases. Well, of course, we want to have the infrastructure, but what would it do good to us if we are a weak nation? We will be treated as a pushover,” he said in his speech during the opening of the newest shooting range of Armscor in Barangay Catitipan, some 12 kilometers north of downtown. Duterte, likewise, dispelled notions that he intends to “perpetuate” himself to the presidency. He said his focus in strengthening the country’s military and police forces was meant “to avert any future threats and challenges to national security,” and that he may even tap reserve forces and those who underwent or graduated the basic Reserve Officers’ Training Corps in home defense. Manuel T. Cayon
Economy
A4 Wednesday, February 28, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon
BusinessMirror
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DOLE, DTI to meet on final draft of job contractualization EO
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By Samuel P. Medenilla
@sam_medenilla
abor groups may not be able to get their preferred version of an executive order (EO) on job contractualization, which they expect President Duterte to sign in a forthcoming Palace meeting scheduled next month.
Labor Secretary Silvestre H. Bello III on Tuesday said the Department of Labor and Employment (DOLE) will hold a meeting with their counterparts at the Department of Trade and Industry (DTI) on Thursday to “justify” which version of the EO they would endorse to President Duterte. “I will consult [with the] DTI because their leaning is with the management group,” Bello told reporters in an interview. “I will submit my recommendation [on the EO] once the President asked for it,” he added. T he labor chief issued the statement a day after Duterte announced he is considering a “compromise” EO that will be beneficial for both management and laborers. On the same day, Bello was unable to commit to labor groups that he will be able to support their version of the EO. Labor coalition Nagkaisa expressed dismay over the developments, saying that the President has
been “misled” about their demands. Nagkaisa Chairman Michael Mendoza reiterated their proposed EO is not anti-employer, but merely “restores the norm of direct hiring rather than use manpower suppliers or labor-only contractor.” “We, too, Mr. President, recognize the need to balance the interest of labor and capital. The epidemic scale of contractuals laboring in precarious jobs without security of tenure calls for balance, Mr. President,”
Mendoza said in a news statement. “We call on the President to fulfill his promise to the workers to end the hopelessness and insecurity of millions,” he added. Prior to Duterte’s latest pronouncement, the DOLE said Malacañang is currently considering the draft EO from the labor sector. To recall, the labor department earlier said there are two versions of the EO, the one supported by management and workers and the other which was only approved by labor groups. Both versions are almost identitical except for the definition of the security of tenure. On February 7 Duterte was supposed to sign a new EO on contractualization, but he decided to postpone it so he could review the legality and the effect of the EO to business establishments. The President is scheduled to meet with labor groups in the middle of March, where he is also expected to sign one of the draft EO on contractualization.
We too, Mr. President, recognize the need to balance the interest of labor and capital. The epidemic scale of contractuals laboring in precarious jobs without security of tenure calls for balance, Mr. President.”—Mendoza
Labor dept eyes OFW deployment ban to Saudi
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he Department of Labor and Employment (DOLE) said on Tuesday it is now considering to impose a deployment ban in the Kingdom of Saudi Arabia (KSA), amid reports of abuses of overseas Filipino workers (OFW) in the Arab country. Labor Secretary Silvestre H. Bello III said he will not hesitate to stop deployment in KSA if it fails to curb the “rampant” abuse of OFWs there. He issued the statement after receiving reports that some Philippine recruitment agencies are illegally “trading” their hired Filipino household service workers (HSW) through auctions. “This is a rampant practice, where workers are handed to new employers,” Bello said. He said their team, headed by Labor Undersecretary Ciriaco A.
Lagunzad III, is currently assessing the measure of the Saudi government to address this. The labor chief said other countries will also face the same review to check if they are providing the protection to OFWs in their jurisdiction. “If they will not be able to do this, then we will issue a ban there, because the demand of our President is to only deploy in countries where workers a properly and effectively protected,” Bello said. KSA currently hosts an estimated 2 million OFWs, making it one of the top destination countries for Filipino workers. Aside from KSA, the team led by Lagunzad also visited Kuwait, where the country has an existing deployment ban, during the weekend. “So far, they did not find any
alarming trend. In fact, they reported a positive trend in our repatriation efforts there,” Bello said. President Duterte ordered the DOLE to issue the deployment ban after getting reports of the gruesome fate of a Filipina household service worker (HSW), Joanna Demafelis, earlier this month. Demafelis’s remains were found stuffed in a freezer at her employers home in Kuwait. Her employers—Mona Hassoun and Nader Essam Assaf—were recently arrested in Syria and Lebanon as the prime suspects in Demafelis’s death. Bello said the ban will remain until the suspects could be held liable and the signing of the Philippine-Kuwait labor bilateral agreement for the protection of Filipino HSWs, which has been pending for two years.
EODB bill awaits Duterte’s signature to become a law By Jovee Marie N. dela Cruz @joveemarie
& Cai U. Ordinario
@cuo_bm
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measure promoting the ease of doing business (EODB) in the Philippines is now awaiting President Duterte’s signature to become a law. This after the House of Representatives on Tuesday ratified the proposed “Ease of Doing Business and Efficient Government Service Delivery Act of 2018,” which seeks to promote the Philippines as a business-friendly economy. The measure would simplify issuances of licenses, clearances or permits to business entities by amending the Anti-Red Tape Act of 2007. On Tuesday Budget Secretary Benjamin E. Diokno said he expects the EODB bill to be ratified by the House of Representatives by the end of March. Diokno said the Senate was first to ratify the bicameral report on the new piece of legislation, which seeks to cut red tape. Socioeconomic Planning Secretary Ernesto M. Pernia said the Duterte administration is “very serious” in cutting red tape, which is the reason the EODB Bill has been placed in the priority legislation of the administration. “The [real objective] of the Ease of Doing Business is cutting red tape to the barest minimum so we are
very serious about this, and we are pushing. In fact, the Ease of Doing Business has been declared as an urgent bill by the President, and that is why it is moving very fast in Congress, as well as in the Senate,” Pernia said in a forum on Tuesday. In November last year, the Philippines’s ranking declined in the World Bank’s Ease of Doing Business Report 2018 to 113th out of 190 countries, from 99th in the 2017 report. Based on the report, the country’s lowest ranking was in starting a business at 173rd out of 190 economies. The country only had a score of 68.88, which was lower than the East Asia and Pacific regional average score of 82.32. Based on the data, it took Filipinos an average of 28 days to complete 16 procedures in starting a business. This process is estimated to cost businessmen at least P21,923. The cost depends on variable amounts that will depend on a business’ authorized capital stock, paid-up capital, the assessed value of the company’s property and the local government where the business is being set up. The Philippines also had low rankings in enforcing contracts, 149th; protecting minority investors, 146th; getting credit, 142nd; paying taxes, 105th; and dealing with construction permits, 101st. The country was ranked below
100 in trading across borders at 99th overall and getting electricity, 31st out of 190 economies. The World Bank said the data was obtained between June 2016 and June 2017. It measures 190 economies worldwide and documented 264 business reforms. Once signed into law, processing time for simple permits will be reduced to three working days; complex transactions to seven working days; and highly technical application to 20 working days. The measure also reduces the number of signatories from five to three signatures; and will recognize electronic signatures or presigned permit/license/certification in case the authorized signatory is on official leave. However, the bill said cases that pose danger to public health, public safety, public morals or to public policy, and for highly technical application, such as natural-resource extraction activities, will be given more time for consideration, but still, with specific time deadlines. It will also streamline procedures for the issuance of local business permits by: using a single or unified business application for local tax and clearances, building clearances, firesafety inspection certificates, etc.; which shall also be available online; and create a one-stop business facilitation service on site and/or on-line in all cities and municipalities.
CNIA ready to receive first commercial flight–Lambino
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LL is set for the Cagayan North International Airport (CNIA) in Lal-lo to receive its first international commercial flight from Macau on March 23, Secretary Raul L. Lambino, administrator and CEO of the Cagayan Economic Zone Authority (Ceza), has announced. “We are ready to open CNIA to East Asia and the North Pacific to commercial flight,” Lambino told in a gathering of the Regional Development Council (RDC) of Region 2 in Santa Ana town in Cagayan. The first domestic flight by Cebu Pacific to the Lal-lo town airport will follow in April, he added. CNIA in Lal-lo cuts the travel time to 45 minutes, he said, and can now receive the heavier A320s and B737, a strong upgrade from its previous capacity. “This has been years in coming, but what was so difficult to do, we at Ceza have finally done it,” he said. “To get to Santa Ana, you don’t have to f ly anymore to Tuguegarao City, which is a three-hour drive
to here,” he added. Lambino also said, “We are sending a strong signal to potential locators from Asia and North America that it is no longer business as usual at Ceza.” “With a new leadership, Ceza can be trusted to do the right things for the medium and long terms,” he added. The last quarter of 2017, and first two months of 2018 saw Ceza step up the pace of construction of the remaining runway facilities required by the Civil Aviation Authority of the Philippines for CNIA to acquire “full aerodrome certificate,” he said. These included the development of the runway end safety areas on both ends of the 2.1-kilometer runway, and the runway strip width running along the edges of the 45-meter-wide strip. The most important installation is the precision approach path indicator (Papi), which helps pilot acquire and maintain the correct approach to an airport, Lambino said. The Papi was commissioned last month. He added that all obstruction along
the landing path to runway 22 has been cleared and the acquisition of an additional fire truck bolstered CNIA’s crash, fire, rescue and capacity. Turning to Ceza’s infrastructure buildup, Lambino told RDC members that Ceza has listed top-priority projects under its new redeveloped medium-term development plan. Among these projects are a tertiary medical center, Ceza’s corporate center, convention center, boutique hotel and a financial-technologies park. The elements “are vital in the development concept” for the freeport called Global TransPark, he said. T he system would integrate transport, telecommunications, manufacturing and commercial processes, distribution, technology and education into a “seamless and efficient supply chains for tenants and user of the economic zone and free port,” Lambino added. He reiterated his long-term goal of developing Ceza into the “premier hub for the continuous development of these financial technologies.”
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Rice-tariff bill up for plenary deliberations
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By Jovee Marie N. dela Cruz
@joveemarie
he House of Representatives is eyeing to start next week plenary deliberations for a measure that would amend Republic Act (RA) 8178 to abolish the quantitative restriction (QR) on rice. This, after the House Committee on Appropriations, chaired by Rep. Karlo Alexe B. Nograles of the First District of Davao City together with the House Committee on Agriculture and Food, chaired by Party-list Rep. Jose T. Panganiban Jr. of Anac-IP, endorsed on Tuesday for plenary approval the unnumbered substitute bill, which seeks to replace the rice QR with tariffs. Nograles adopted the recommendation of the Department of Finance (DOF) and recommended to the House Committee on Agriculture and Food the inclusion of this provision: “the fund shall be in place for the first six years upon the implementation of this act, after which the earmarking of the amount collected for the purpose shall terminate unless otherwise extended by law.” However, the panel noted that any remaining balances on the expiration date of the earmarking for the fund shall not revert to the general fund, but will continue to be used for the purpose for which it was set aside. Under the bill, the rice fund shall consist of all duties collected from the importation of rice under the proposed law. The appropriations panel ’s recommendation was accepted by Panganiban, saying “this is for the benefit of the farmers.” With the support of the leadership of the lower chamber, Panganiban has expressed confidence that the rice tariff will be passed before Congress goes on its Lenten break next month, or on March 21. “So by next week it will be deliberated at the plenary. We want to finish it here in the lower chamber before our Holy Week break,” Panganiban told the BusinessMirror.
He also reiterated that the Duterte administration, particularly the DOF, wants the bill enacted into law by March 23. The passage of the law allowing the tariffication of rice is included in the priority bills identified as urgent by the Legislative-Executive Development Advisory Council. It is also one of the priority measures of Congress. Panganiban has also expressed confidence that the Senate will pass its version of the rice tariff measure soon. “I think, the Senate will pass its version soon. But, if there is difference between the House and Senate versions of the QR bill, we will all settle that during the bicameral conference committee,” he said. The Senate has already committed to pass its version of the bill by March. After approving their respective versions of the rice-tariffication bill, the Senate and the House of Representatives will transmit their bills to a bicameral conference committee to consolidate their versions and to discuss the divergent provisions. The lower house has set the bound tariff rate for rice imports outside the minimum access volume (MAV) at 180 percent. Under the substitute bill, the Philippines will impose a bound tariff rate of 35 percent for rice originating from the Association of Southeast Asian Nations region, regardless of volume. Manila would also impose a 40-percent bound tariff most-favored nation (MFN) rate for in-quota rice imports from countries that do not belong to Asean. Once the substitute bill is enacted into law, the country’s MAV
for rice shall revert to its 2012 level of 350,000 metric tons (MT), from the current 805,000 MT. Earlier, the BusinessMirror reported that Manila has assured the World Trade Organization (WTO) that the Philippines will be able to finally convert its QR on rice into tariffs by June, nearly a year after the government was supposed to have scrapped the nontariff measure. A Geneva trade official, who was privy to the proceedings of the recent WTO Committee on Agriculture (COA) meeting said the Philippine delegation had informed WTO member-countries that lawmakers are “fast-tracking and prioritizing” the amendment of R A 8178. RA 8178, or the Agricultural Tariffication Act, had allowed the Philippines to continue imposing rice quotas even after the WTO waiver on the special treatment on rice had lapsed on June 30. The Philippines is under pressure to convert its QR into tariff after the waiver on the special treatment on rice expired last June 30. The expiration of the waiver meant that Manila can no longer impose the nontariff measure. To avoid possible trade disputes, President Duterte issued an executive order which retained the country’s rice concessions as “a sign of goodwill” to the country’s trade partners.
Impact on farmers
The Kilusang Magbubukid ng Pilipinas (KMP) said on Tuesday the removal of the QR on rice will not improve food security and reduce poverty. Citing studies, KMP Chairman Emeritus Rafael V. Mariano said the income of farmers will drop by 29 percent upon the lifting of the rice QR. “This is because subsidized cheap rice imports will flood the domestic market, compete with local rice expensively produced by Filipino farmers who lack government support, and depress more the farm-gate price of palay,” said the former chief of the Department of Agrarian Reform. Mariano said weakening rice production will lead to
Ivory Coast cocoa farmers get relief as rains return early
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ocoa farmers in Ivory Coast, the world ’s top producer, got some welcome relief in the past week with higher-than-nor ma l rainfa l l across the main growing regions. It rained heavily last Wednesday night for more than six hours, said Robert Glaou, a farmer in the western town of Bangolo. Harmattan conditions have ended, he added, referring to winds from the Sahara that bring dry weather and coolness to West Africa from December to February. “The weather is currently very good,” said Narcisse Konan, the head of a cooperative in southwest Ivory Coast. “There were small pods on the trees and we needed some rain to make them stronger.” The Harmattan overall was very mild this year, he added. Ivory Coast is nearing the end of its main crop, the larger of two cocoa harvests that runs from October to March. The rain will help development of the smaller mid-crop, although wet weather tends to slow harvesting. Satellite imagery from the United States Climate Prediction Center for February 18 to 24 suggests well-above-average rainfall across Ivory Coast, as well as the biggestproducing regions of neighboring Ghana, the No. 2 grower.
Small pods
“It has been raining in the area for several days,” said Jeannot Assi, a farmer in the southern town of
Bloomberg
Alepe, in Ivory Coast. “We are now seeing flowers and small pods” on the trees. There has also been heavy rain in Tiebissou, in the center of Ivory Coast, that will allow the trees to bloom, farmer Moussa Kouassi said. Growers have begun maintenance work for the mid-crop harvest, he added. While the weather has improved, harvesting volumes have decreased as the main crop peters out, and farmers in the west and southwest said they’ve seen bean size and quality deteriorate. “The beans are small,” said Vincent Zadi, a farmer in Grand Zatry, in the southwest. More rains are needed to help the cocoa trees bloom and produce small pods, he said. For farmers in the east of the country, the smuggling of beans
into neighboring Ghana remains the biggest concern, said farmer Kobenan Kouame. Cocoa futures climbed 1 percent to $2,215 a metric ton in New York on Monday, extending the gain this year to 17 percent. In other West African cocoa-producing countries: Dryness continued in southcentral Ghana and is negatively affecting crops, Boadi Yeboah, 69, who oversees a group of 2,000 far mers around Kwabeng, said last Friday.There was “only a short period of drizzle last Thursday, and that was the first sign of rain in weeks.” In Cameroon, there was some light rain last week that resulted in early flowering of some cocoa trees, said Ojong James, a farmer near Buea, in the west of the country. Bloomberg News
shrinking agricultural production. While palay used to account for almost one-fourth of the gross value added (GVA) in agriculture at current prices, the KMP said its GVA has been falling by 10.4 percent annually from 2014 to 2016, contributing to overall agriculture decline of almost 1 percent annually. “Once the QR is lifted, we expect greater liberalization and a deluge of rice imports under various free trade agreements and the World Trade Organization,” Mariano said. “This will impact on the livelihood of close to 20 million Filipinos, or about a fifth of the national population, made up of 2.5 million small farmers, several hundred thousand farm laborers and other workers involved in the supply of farm inputs and machinery, milling/processing, warehousing, transport, other services and related economic activities,” he added. Mariano also said the government should seriously consider disengaging from the Agreement on Agriculture (AoA), which he said, “binds” the local agricultural sector to rice importation policies. “Decades under the WTO and the AoA proved that importation of rice further drove down the farm-gate prices of palay and increased the window for rice smuggling. The average farm-gate price of rice is P19.29 per kilogram and even lower, as dictated by traders imposing the monopoly prices of rice,” he said. With Jonathan L. Mayuga
Editor: Jennifer A. Ng • Wednesday, February 28, 2018
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PCAARRD-funded program to increase productivity of processing tomato
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esearchers and experts from the University of the Philippines Los Baños (UPLB) and Northern Foods Corp. (NFC), the only processing tomato company in the Philippines, recently convened at the Philippine Council for Agriculture, Aquatic and Natural Resources Research and Development of the Department of Science and Technology (DOST-PCAARRD) headquarters to kick-start a program that aims to increase productivity of fresh and processing tomato. The DOST-PCAARRD-funded program, titled “Development of Integrated Crop Management [ICM-Tomato] for Increasing the Productivity of Fresh and Processing Tomato Production,” aims to develop an integrated crop management (ICM) technology to increase the productivity of fresh and processing tomato in the Philippines using adaptable and site-specific pest and nutrient-management products and technologies. The program will last three years and is expected to benefit at least 2,000 tomato farmers by 2020. It will be implemented by UPLB, NFC, Mariano Marcos State University, Regional Crop Protection Center and local government units of Ilocos Norte and Ilocos Sur. The program has three project components, which will focus on diseases, insect pests and weeds and nutrient management.
The team will practice a systems approach in integrating the results of each project to come up with one comprehensive ICM technology for tomato. The productivity of tomato is known to be threatened by many diseases. The most destructive disease of which is tomato leaf-curl disease, which is transmitted by whiteflies. “Ilocos Red,” the variety being planted by NFC for processing to paste, is susceptible to the said disease. To address the tomato leaf-curl disease in Ilocos Red, the first project will establish the disease profile of tomato, and determine the efficacy of healthy seedling technology and carrageenan technology for leaf-curl management. Then, field-validated ICM recommendations will be formulated. The second project will address the insect pest and weed problem in tomato production. An improved control and management of insect pests and weeds will be developed. The research team will involve the farmers in the program by promoting the adoption of village-level production of biological control agents (BCAs), such as Trichogramma, helicoverpa nuclear polyhedrosis virus and earwigs in their farms. They will also capacitate the members of the farmers’ cooperative in Ilocos Norte and Ilocos Sur as part of the sustainability plan of the project. DOST-PCAARRD, S&T Media Service
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Wednesday, February 28, 2018
The World BusinessMirror
Xi’s indefinite rule feeds doubt China will play by the book
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i Jinping’s decision to cast aside China’s presidential term limits is stoking concern he also intends to shun international rules on trade and finance, even as he champions them on the world stage.
The Communist Party’s bid to repeal the constitutional prohibition enacted after the turbulent Mao Zedong era—allowing Xi to stay on indefinitely—is only the latest domestic standard discarded by the president. Since coming to power in 2012, he’s jailed once-untouchable retirees of the country’s top political body, declined to name a successor and created a series of party panels to take over government policy-making. Xi has demonstrated a similar willingness to challenge the rules overseas, despite casting himself as a defender of the postWorld War II order in speeches to United Nations diplomats and Davos billionaires. Countries have accused Beijing of putting an economic embargo on South Korea, meddling in Australian politics and ignoring an international tribunal’s ruling against Chinese claims to the disputed South China Sea. Such concerns prompted the Trump administration last December to brand China a “revisionist power” that threatens the United States economic strength and national security by seeking to reshape the global order. Repealing term limits means Xi’s policies are more likely to endure past 2023, when his second five-year term as president would be expected to end. “This move will only serve to heighten concern about how China seeks to leverage its growing global footprint,” said Andrew Polk, cofounder of research firm Trivium China in Beijing. “The way China presents itself to the world is increasingly at odds with the facts on the ground.” Xi’s tenure has been defined by a renewed emphasis on party orthodoxy and intense campaigns to reign in the corruption that flourished under his predecessors, Hu Jintao and Jiang Zemin, as well as curbs on dissent. Xi has rounded up rights lawyers, punished more than 1.5 million party cadres and blocked most of the largest foreign Internet and
1.5M The number of China’s Communist Party cadres, who President Xi Jinping punished in his campaigns on party orthodoxy and against corruption
social-media companies. Long before the term limits move, Xi broke an unwritten rule against prosecuting retired top leaders by jailing former security chief Zhou Yongkang for life in June 2015. His creation of more than 10 party policy-making bodies has reversed efforts to separate party and government following the chaos of the Mao era. X i—now com m a nd i ng t he world’s second-largest economy
and one of its most powerful militaries—has extended that assertive approach into areas where his predecessors had shown greater deference to foreign views. Last July China’s foreign ministry declared the Sino-British Joint Declaration—the 1985 treaty guaranteeing political autonomy for the former British colony of Hong Kong—a “historical document” that “no longer has any practical significance.” In 2016 a former top Chinese diplomat similarly dismissed as no more than “waste paper” an international tribunal’s ruling against the country’s claims to much of the South China Sea. Jerome Cohen, a professor at New York University’s School of Law, who has been studying China since the 1960s, said Xi’s effort to dispense with term limits would further “hinder China’s efforts to be respected for ‘soft power,’ as well as military and economic prowess.” “Xi ’s move will have a profound effect on world order,” Cohen wrote. “It will enable him to move more boldly, and increase the risk of his acting arbitrarily and, perhaps, mistakenly in international relations.” Asked about the term-limit repeal, White House Press Secretary Sarah Sanders said the decision was “China’s to make,” and added that President Donald J. Trump supports presidential term limits for the US.
Staying on would give Xi the chance to advance a 30-year plan to complete China’s return to greatpower status by the mid-century mark, when he’ll be in his 90s. Xi’s vision includes two programs that have fueled concerns about China’s clout: a sweeping militar y-modernization drive and a global trade-and-infrastructure program called the “Belt and Road” Initiative. C h i n a’s g r o w i n g m i l it a r y s t re n g t h i s f ue l i n g d e fe n s e spend ing increases f rom Japan to India, while Taiwan has warned that expanded People’s Liberation Army patrols risk destabilizing the region. Australia, meanwhile, has introduced leg isl at ion to l i m it pol it ic a l meddling by China and other foreign powers and expressed skepticism about the need for the Belt and Road projects. Alicia Garcia Herrero, Natixis’s chief economist for the Asia-Pacific region, said China’s size and historical influence made others in the region nervous about any attempt to change the rules. “Xi’s ambition is a double-edged sword,” Herrero said. “It benefits China, as there is clear leadership at a time in which the world is transitioning toward a less rule-based reality,” she said. “On the other, it cannot help but raise suspicion, and probably even more than just suspicion but outright fear.” Bloomberg News
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EU to stoke Brexit tensions with 100-page draft exit deal
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he European Union (EU) w i l l c ha l lenge T heresa May on Wednesday when it publishes a draft Brexit treaty that ignores some of the United Kingdom prime minister’s most important demands. The bloc is planning to set out in legal detail how it expects the UK to depart in just over one year’s time, and the terms of a transition period that will follow, according a person familiar with the matter. A German official added that the 27 members oppose an extension of the transitional period. Talks on the transitional phase that businesses want to help smooth the UK’s withdrawal are continuing, but the EU’s 100-page draft agreement is likely to exclude May’s proposals for how that phase should work, the person said. The document is also likely to leave out a key compromise May is seeking in the section on the United Kingdom’s future land border with Ireland, the person said. A senior UK government official warned that the EU’s drafts must accurately reflect the positions of both sides and suggested the bloc is using the document to try to push its own agenda instead of producing a balanced text.
Delicate juncture
The clash comes in a critical week for the Brexit process. In a key speech on Friday, May is due to announce her vision for the UK’s future trade partnership with the bloc in the hope of influencing the EU’s own vision before it is fleshed out at a summit in three weeks’ time. Her rival in the meantime, Labour leader Jeremy Corbyn, has put forward his own version of Brexit that was looked upon more favorably by Brussels than May’s own plan. Given her precarious situation, with only the thinnest of working majorities in Parliament, May can ill-afford a false move.
Even before she weighs in, negotiations between the UK and the EU need to reach an agreement on the transitional period that is due to come into force after March 29, 2019—exactly two years after May set the wheels in motion. The talks have been tense so far, with disagreement over the rights of European Union citizens moving to Britain during the period. That is a fight the United Kingdom now realizes it might lose. In one crucial area—what happens to the Irish border with the UK—Wednesday’s text will focus on May’s worst-case scenario in which no trade deal can successfully maintain an open crossing.
Details please
EU diplomats say this is because she’s failed so far to give any detail on how she proposes to ensure there is no hard border infrastructure of customs checks at the frontier between Northern Ireland and the Republic of Ireland. The text on Wednesday will instead focus on the “fall-back” position in which the UK agrees to align its trading rules with those of the European Union to avoid the need for a separate customs regime at the border with Ireland. This document will be “a draft withdrawal agreement from the EU’s perspective, which will then be a document to be negotiated over time,” Simon Coveney, Ireland’s deputy premier, said on Monday. One official said the document would include in detail all the three questions relating to the UK’s separation from the bloc, including the almost £40 billion ($56 billion) it’s promised to pay. It will also cover other issues that weren’t agreed in the first phase of talks that ended last December, the official said. The document is just a draft at this stage and the EU expects it to be revised. Both sides want it to be ready to sign by October, or the end of the year at the latest. Bloomberg News
Saudi King removes top military commanders in latest overhaul
S The images of China’s President Xi Jinping are on souvenir plates together with that of the late former leader Mao Zedong. Bloomberg
US energy chief to have nuclear talks with Saudis nergy Secretar y R ick Perr y w ill travel to London to discuss nuclear energ y w it h of f ic ia ls f rom Saudi A rabia on Fr iday as the Tr ump administration pursues a dea l to build reactors in t he k ingdom, accord ing to t wo people familiar w ith the plans. Per r y scrapped a tr ip to New Delhi to accommodate meetings at the W hite House this week, creating an opening for him to lead an interagency delegation to London, said the people, who asked not to be named to discuss administration strateg y. T he administration is considering permitting S au d i A r a b i a t o e n r ic h a nd re pro c e s s u r a n iu m a s p a r t of a d e a l t h at w ou l d a l lo w
Editor: Lyn Ressureccion | www.businessmirror.com.ph
Westinghouse Electric Co. and other American companies to build nuclear reactors in the Middle East kingdom. T he meetings in London b e t w e e n Pe r r y a n d S a u d i A rabia’s Minister of Energ y and Industr y K ha lid Bin Abdu laziz A l-Fa lih are seen as a cr itica l step in months of ongoing discussions over a potent i a l nuc lea r cooperation agreement, br ing ing together key dea l ma kers from each countr y. Some A mer ican agreements with other countries have prohibited the enrichme nt a nd re p ro c e s s i n g of uranium in exchange for the use of nuclear technology, and that had scuttled negotiations for Saudi projects during the Obama administration.
16 power plants
The administration is mulling over whether to ease that requirement now as a way to help Westinghouse and other companies win Saudi contracts. Saudi Arabia plans to construct 16 nuclear-power reactors over the next 20 to 25 years at a cost of more than $80 billion, according to the World Nuclear Association. T he Energ y Depa r t ment confirmed the cancellation of Perry’s India trip, but a spokesman did not reply to a question about the London talks. Any agreement they reach must be approved by Congress, which will have 90 days to weigh in. The potential deal has draw n opposition from antinuclear proliferation advocates and some lawmakers,
such as Senator Ed Markey, a Massachusetts Democrat. On Monday Markey asked the Trump administration to detail its efforts to sign a nuclear cooperation agreement with the Saudis and share information about the United States negotiations with the country. “Congress remains in the dark about what exactly is being considered, why we may be reevaluating our nonproliferation objectives and standards, and how and when this information is being conveyed to Saudi Arabia and other countries around the world,” Markey said in a letter to Perry and Secretary of State Rex Tillerson. Saudi Arabia’s Crown Prince Mohammed Bin Salman is expected to visit the US in March. Bloomberg News
audi A r a b i a r e p l a c e d several top militar y comm a nd e r s , i nc lud i n g t he chief of staff and the heads of ground and air forces, the latest overhaul of traditional power centers in the oil-rich kingdom. No reason was g iven for t he c h a nges, wh ic h were a nnou nced i n a ser ies of l ate n ig ht roy a l dec rees approved b y K i ng Sa l m a n on Mond ay. Several civilian officials, i nc lud i ng de put y m i n i sters, were a l so re pl aced . T he Saud i m i l it a r y he ad s a coa l it ion t hat ’s been st r uggl ing for a l most t hree yea rs to rega in cont rol of Yemen f rom rebel fighters w ith ties to Iran. T hat inter vent ion is pa r t of a more asser t ive reg iona l pol ic y pu rsued by Sa l ma n since he ascended to t he t hrone t hree yea rs ago. The king and his son, Crown Prince Mohammed bin Salman, known as MBS, have also sought to tighten their grip at home—consolidating powers that were once shared out among an extended royal family. Senior pr inces and prominent businessmen were arrested last November as part of an anticorruption campaign. A new generat ion of bureaucrats c lose to t he crow n pr ince have been inst a l led in senior posts.
‘New directions’
T he m i l it a r y overhau l may be part of that dr ive, according to Pau l Su l l iva n, a Saud i spec i a list at Georgetow n Universit y in Wash ing ton. “It look s l i ke t he K ing a nd MBS wa nt t hings
to go in some new d irect ions,” he sa id. “ T hey may wa nt more energet ic a nd you nger people to keep t he pressu re on Ira n, in Sy r i a a nd Yemen.” Saudi-backed forces in Sy r ia have largely been defeated by P re s ide nt B a sh a r a l - A s s ad ’s a r m y, s u p p o r t e d b y R u s s i a and Iran. In Yemen the Saudis intervened in Ma rc h 2015 to re store the inter nationa l ly recog nized gover nment and rol l back advances by the Houthi rebels, who’ d ta ken control of the capita l, Sana’a, and other cities. T he conf lict has been descr ibed by United Nations officia ls as among the world ’s worst humanitar ian cr ises. T he changes to the armed forces were announced as Saudi officers and executives from dozens of global defense companies gather in the capital Riyadh for an arms fair. Creating a domestic defense i ndu st r y i s a ke y goa l of t he k i n gdom’s pl a n to o ve rh au l it s e c onomy a nd re du c e it s de pendence on oi l . In another decree on Monday, the k ing approved a plan setting out a “v ision and strateg y” for the development of the Defense Ministr y, according to the official Saudi Press Agency. K ing Salman also announced new personnel at severa l ministr ies, including the appointment of a woman as deput y minister for labor and socia l development. T he gover nment’s press office said that some militar y positions wou ld be available to women for the first time. Bloomberg News
www.businessmirror.com.ph | Editor: Lyn Ressureccion
The World BusinessMirror
Wednesday, February 28, 2018
A7
SC refuses White House plea to hear ‘Dreamers’ case
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ASHINGTON—The Supreme Court (SC) on Monday declined an unusual White House request that it immediately decide whether the Trump administration can shut down a program that shields some 700,000 young immigrants from deportation.
The move meant that the immigrants, often called “Dreamers,” could remain in legal limbo for many months unless Congress acts to make their status permanent. The SC’s decision not to hear the administration’s appeal was expected, as no appeals court has yet ruled on the issue. The court’s order was brief, gave no reasons and noted no dissents. It said it expected the appeals court to “proceed expeditiously to decide this case.” President Donald J. Trump ended the program, Deferred Action for Childhood Arrivals (Daca) last September, calling it an unconstitutional use of executive power by his predecessor and reviving the threat of deportation for immigrants who had been brought to the United States illegally as children. But two federal judges have ordered the administration to
maintain major pieces of the program while legal challenges move forward, notably by requiring the administration to allow people enrolled in it to renew their protected status. The administration has not sought stays of those injunctions. The Supreme Court’s move will, as a practical matter, temporarily shield the young immigrants who already had signed up for the Daca program from immediate deportation, and allow them to keep working legally in the United States. Their status lasts for two years and is renewable. The court’s decision not to hear the appeal could also relieve the immediate political pressure on lawmakers to permanently address the status of those immigrants, or to deal with the additional 1 million young immigrants who had never signed up for the Daca program. They remain at
People protest the Trump administration’s plans to cancel the Deferred Action for Childhood Arrivals during a march on Trump Tower in Manhattan on August 30, 2017. Hiroko Masuike/The New York Times
risk of deportation if immigration agents find them. Even as he ended the Daca program, Trump had called upon Congress to give the young immigrants legal status and an eventual path to citizenship, before the program was scheduled to expire on March 5. But that proposal has been bogged down in partisan gridlock as members of Congress argue about broader changes to the US immigration system that the president and his conservative allies in Congress have demanded as part of any deal to address the future of the young immigrants. This month, senators failed to reach consensus in a series of votes on bills to address the young immigrants and other immigration issues. A bipartisan coalition in the
Senate roundly rejected a measure backed by Trump that would have all but ended the family-based migration system that has been in place for decades. A separate bipartisan measure that would have legalized the young immigrants and allocated $25 billion for a wall on the border with Mexico fell six votes short of the 60 needed to proceed to a final vote. Now, the court’s action is likely to lessen the urgency on Capitol Hill over the issue, making it even more probable that Congress will take no action as the legal process plays out. As a possible fallback plan after the Senate’s failure this month, lawmakers could negotiate a shortterm patch that would continue the Daca program for a few years, perhaps in exchange for partial
funding of Trump’s wall. Such a deal could be tucked into a broad spending bill that lawmakers must approve by March 23, when government funding is set to expire. But the court’s move could undercut any momentum to push for even a very narrow deal in the next few weeks, and there has been little evidence of progress toward any kind of bipartisan pact that would be acceptable to Trump. House Republican leaders still appear focused on a hard-line conservative immigration bill that would be a nonstarter in the Senate. “While the court’s decision appears to have pushed this deadline beyond March, House Republicans are actively working toward a solution,” said AshLee Strong, a spokesman for Speaker Paul D. Ryan of Wisconsin. Trump has repeatedly condemned Democrats in recent days, accusing them of not caring about the young immigrants. In one recent Twitter post, he said Republicans “stand ready to make a deal” to protect the young immigrants from deportation. But Democrats, and some Republicans, accuse Trump and his hard-line conser vative W hite House advisers of using the young immigrants as leverage for changes to the immigration system that conservative, anti-immigrant activists have long sought. The case at the Supreme Court was brought in California by five
sets of plaintiffs. They included four states—California, Maine, Maryland and Minnesota—and Janet Napolitano, president of the University of California. A s secretar y of Homeland Security in the Obama administration, Napolitano signed the document that established the program in 2012. In January Judge William H. Alsup of US District Court in San Francisco ruled that the administration had abused its discretion and had acted arbitrarily and capriciously in rescinding the program. Judge Nicholas G. Garaufis of US District Court in New York City issued a similar ruling this month. The judges acknowledged that presidents have broad powers to alter the policies of earlier administrations. But they said the Trump administration’s justifications for rescinding the program did not withstand scrutiny. The administration had argued that the program was an unconstitutional exercise of authority by the executive branch, relying on a ruling from the fifth US Circuit Court of Appeals, in New Orleans, concerning a related program. The Supreme Court deadlocked, 4-4, in an appeal of that ruling. The judges said the two programs differed in important ways, undermining the administration’s legal analysis. They noted, too, that Trump had issued conflicting statements about the Daca program. New York Times News Service
Banking&Finance BusinessMirror
A8 Wednesday, February 28, 2018 • Editor: Jun B. Vallecera
www.businessmirror.com.ph
Peso slumps to P52.03 against US dollar National govt posted despite BSP’s efforts to manage volatility below-target ₧350.6-B
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he local currency plunged back to the P52$1 territory on Tuesday, despite the recent statements made by Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla Jr. that the Central Bank will sell its dollar reserves to manage excessive peso volatility and calm the markets. The peso closed on Tuesday’s trade at P52.03 to a dollar, losing 17 centavos in value against the greenback. Data from the PDS Group showed the total traded volume during the day was slightly higher at $648.7 million from the previous day’s $516 million. PDS Group data also showed overall weakness during the day, with both its morning weighted average and afternoon weighted average traded in the P52-$1 territory. In particular, the peso averaged P52.025 to a dollar in the morning’s trade, and further weakened to P52.056 to a dollar in the afternoon. The local currency’s weakness came after the BSP chief’s statement over the weekend, saying the reserve requirement ratio (RRR) reduction will not cause havoc on the peso’s value. “To the extent that speculators use RRR reduction as pretext for peso depreciation, the BSP sells dollars from its reserves to manage excessive peso volatility. That in itself also has the effect of draining peso liquidity from the system which causes a self-correction,” the governor said, adding that fears behind the recent surprise move from the BSP is “really unfounded.”
Further weakness is seen for the country’s currency down the line, as the peso is likely to slide to P52.50 to a dollar by year-end, according to a local research institution. “We think that the improvement in the
US economy and its financial markets will bring back pressure on the peso. We project the peso to slide to P52.50 by year-end,” First Metro Investment Corp. and University of Asia and the Pacific said in a joint publication, “The Market Call.” Officials from the Department of Finance, meanwhile, earlier this month said the depreciation of the local currency is a “welcome development” for the economy, and they reiterated that the economy’s strong fundamentals can handle such depreciation. Economists and analysts have suspected that the local economic managers are focused on maintaining the country’s growth momentum, thus, leaving a depreciation bias for the local currency.
A money changer in Manila counts peso bills. The local currency closed at P52.03 to a dollar on Tuesday. Nonie Reyes
PTA to help implement change in revenue-generating agencies
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he Department of Finance (DOF) on Tuesday said the Philippine Tax Academy (PTA) will help implement the “cultural change” needed for the country’s revenue-generating agencies by improving the training of revenue-collection officers. Finance Secretary Carlos G. Dominguez III said the Philippines’s first-ever tax academy will not only provide continuing training on best practices to hone competitiveness of the country’s revenue-collectors and administrators but will also help sharpen their commitment to their profession and raise their ethical standards. “This will be a multidimensional educational and research institution. It will play a key role in the culture change we seek to achieve in our revenue agencies. Through the PTA, we could aspire for a cluster of revenue agencies equipped with the best skills available and imbued with the most admirable ethical norms possible,” Dominguez said during the launching of the PTA at the Ayuntamiento de Manila building of the Bureau of Treasury in Intramuros, Manila. He added that under the watch of President Duterte, the DOF has taken a “great leap forward” in professionalizing revenue agencies by launching the PTA eight years after it was envisioned under Republic Act 10143, or the PTA Act. “There is much promise in this institution, which we inaugurate today. There is much expectation invested in it. I am confident the professional staff we already have will benefit greatly from a culture of constant innovation, ceaseless learning and untiring reinvigoration,” he added. During the launching, Dominguez also gave an overview of the seven “imperatives” that the DOF should ensure to effectively per-
form its primary function of funding the government, which are: to make sure the economy is growing; put in place a fair taxation system to encourage tax compliance; have efficient and honest revenue personnel; guarantee prudent spending by the government; ensure fiscal stability in order to achieve high credit ratings that would enable the government to borrow more at lower costs; have an excellent treasury department that knows when, how, and how much to borrow; and maintain productive relationships with the country’s foreign funders. The PTA, as a specialized training facility, will pave the way for the continuing professional development of the country’s revenue personnel by providing information on best revenue practices in other parts of the globe and raising ethical standards across the board, among others. The finance chief said he expects the PTA to collect information from all over the world and build strong linkages between research and education, while ensuring “complementarity between professional training and professional management.” He also wants the PTA to be the tool for developing continuing cooperation with other professional associations, development and funding institutions, as well as foreign governments. “Let’s do this, and let’s do it well. Our country will benefit from having revenue agencies manned by highly motivated and highly skilled men and women,” he said. DOF Undersecretary Gil S. Beltran, who was designated by Dominguez to oversee the establishment of the Academy, said the participants in the inaugural workshop include 30 new hires from the DOF, 30 from the Bureau of Internal Revenue, 31 from the Bureau of Customs and 39 from the Bureau of Local Government Finance, along with 52 local treasurers. Rea Cu
2017 budget deficit By Rea Cu
@ReaCuBM
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he national government on Tuesday reported a budget deficit of P350.6 billion for 2017, which showed a 1-percent contraction from 2016’s deficit of P353.4 billion, due to the combined effects of stronger-thanprogrammed receipts, according to the Bureau of the Treasury (BTr). Based on BTr data, the 2017 budget deficit is 27-percent short from the programmed P482.1 billion for the year. For December 2017 the BTr said the national government ran a P107.1-billion deficit on account of sustained spending. This, however, is 9 percent lower than the P118.2 billion recorded in December 2016. Government disbursements for 2017 reached P2.823 trillion, expanding by 11 percent from the recorded expenditure of P2.549 trillion in 2016. The recorded expenditure for the year missed the programmed target by 3 percent, with the target for the year being P2.909 trillion. For December 2017 ex penditures amounted to P330.2 billion, up 16 percent from P283.6 billion in the same month in 2016. Of the total, 89 percent were for primary expenditures, while the remaining 11 percent went to interest payments. Productive government spending amounted to P2.513.2 trillion, or 12 percent higher than 2016’s P2.244 trillion. Total interest payments (IP) for 2017 amounted to P310.5 billion, up by 2 percent from P304.5 billion in 2016. “The higher IP for 2017 was due to coupon payments for Retail Treasury Bonds issued in September 2016 and April 2017, and fluctuations in foreign exchange rates,” the BTr said. Meanwhile, the strong performance of gover n ment col lec t ion a genc ies helped bring in full-year revenue collections to P2.473 trillion, breaching the
programmed P2.426 trillion by 2 percent. This posted a growth of 13 percent for the year compared to the P2.195 trillion in 2016. Year-on-year, revenues for December 2017 reached its highest level for the year at 35 percent amounting to P223.1 billion, from P165.3 billion in 2016. “You know last year was the first full year that we were doing it, so there was definitely a big improvement from the previous years. This year we’ll even do better, this is cumulative, this will get better and better,” Finance Secretary Carlos G. Dominguez III told financial reporters on Tuesday at the sidelines of the launching of the Philippine Tax Academy. Broken down, the Bureau of Internal Revenue (BIR) collected a total of P1.772 trillion for the year, missing the programmed P1.782 trillion by 1 percent. This posted a growth of 13 percent compared to total collection of P1.567 trillion in 2016. The Bureau of Customs (BOC) recorded total collections of P458.2 billion for the year, narrowly missing the programmed P459.6 billion, but it was 16 percent better than 2016’s collection of P396.4 billion. For nontax revenues, BTr income registered a full-year total of P99.9 billion, contracting by 2 percent year-on-year from P101.7 billion in 2016. The amount, however, is 71 percent better than the programmed P58.6 billion for the year. Collections from other offices expanded by 8 percent to P122.5 billion, from P113.8 billion in 2016. This is 11 percent better than the programmed P109.9 billion. The BTr said the deficit-to-GDP ratio of 2.2 percent is well within the 3-percent ceiling set for the year, which contracted compared to the 2.4 percent recorded in 2016.
Case clippings
By Justice S J Ranada Jr. APPEALS–issues raised for first time It is axiomatic that issues raised for the first time on appeal will not be entertained because to do so would be anathema to the rudiments of fairness and due process. Nonetheless, there are exceptions to said rule: such as the issue of lack of jurisdiction; when there is plain error; when there are jurisprudential developments affecting the issues; or when the issues raised present a matter of public policy. Visitacion v. People 10 Jan. 2018
GR 194214 Martires, J
Philexport opposes classifying VAT exemption as a tax incentive
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he zero value-added ta x (VAT) exemption and VAT refunds should not be categorized as tax incentives under Package Two of the Comprehensive Tax Reform Program (CTRP) as this will make the exports uncompetitive, the Philippine Exporters Confederation Inc. (Philexport) said. Philexport, in a letter to the Department of Finance (DOF), expressed reservations over the incentives reform portion of the draft “Corporate Income Tax and Incentives Reform Act,” the second phase of the Philippine tax-reform program. Sergio R. Ortiz-Luis Jr., Philexport president, and Oscar A. Barrera, Philexport trustee and chairman of the EDC Committee on Legislative Advocacy, said that zero input VAT and VAT refunds must not be included in the section of tax incentives. “VAT refunds are not fiscal incentives, but just a necessary operation of the Cross Border Doctrine internationally recognized, which states that ‘no VAT shall form part of the cost of goods and
Ortiz-LUIS services destined for consumption outside of the terminal territory of the taxing authority,’” the position paper explained. The paper, submitted to DOF Undersecretary Karl Kendrick T. Chua, said this doctrine is followed by economies in the Association of Southeast Asian Nations. Unburdened by input taxes, other Asean exporters will thus have lower export prices compared to Philippine exporters, who will have to pay ad-
ditional VAT under the proposed corporate tax law. “The additional VAT will make our products and services more expensive than they already are,” the paper said. Ortiz-Luis and Barrera, joint signatories of the paper, recommended instead that “any and all exports are to be given zero VAT exemption on their export products and services, and be given input VAT refunds when [the] new refund system is in place.” Under the Tax Reform for Acceleration and Inclusion or TRAIN Act, an enhanced VAT refund system must be established to grant refunds of creditable input tax within 90 days of VAT refund application. If the VAT refund is removed, the competitiveness of exporting micro, small and medium enterprises (MSMEs) will be compromised, which “may lead to loss of jobs and livelihoods, particularly in the countryside,” the position paper warned. Philexport, likewise, underscored that incentives should be
provided “on a need basis to improve performance rather than for a reward for good performance.” “We, therefore, object to the proposal to classify exporters to whether they have a performance record of three years and having exported 90 percent over past three years,” they said. This “is anti-development, antiMSMEs, as it rewards those who already succeeded in competition to grow even bigger, exacerbating the growing gap between rich and poor sectors of the economy.” Moreover, the proposal disqualifies new start-ups from being assisted by incentives, which they badly need, the two leaders added. Finally, the two trade leaders pressed for automation and electronic reporting to ensure transparency and fast-track processing of VAT applications. “Our research shows that Thailand, Vietnam, Indonesia, Singapore and Malaysia have provisions for electronic filing of VAT applications for exporters” who get their refunds between 15 and 30 days, they said.
ExportUnlimited BusinessMirror
Editor: Efleda P. Campos • Wednesday, February 28, 2018 A9
PHL cacao beans gain mainstream acceptance in Japan By Kate Bondoc
Office of the Undersecretary Trade and Investments Promotion Group
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HE Department of Trade and Industry’s Trade and Investments Promotion Group (DTI-TIPG) and the Philippine Trade and Investment Center in Tokyo (PTIC-Tokyo) shared promising developments for Philippine cacao beans as it enters the mainstream Japanese market through the newly produced chocolate made by Isetan Mitsukoshi.
Isetan Mitsukoshi Group, Japan’s largest department store group, developed a new chocolate brand named Nayuta Chocolatasia. The product formulated to match the Asian palate, is made from cacao beans sourced from four Southeast Asian countries: Vietnam, Malaysia, Indonesia and the Philippines. Philippine cacao beans were sourced from a Davao-based plantation, Philippines’s Plantacion de Sikwate Cacao Producers Association. As part of Isetan Mitsukoshi’s strong campaign for the chocolate, they are currently running a six-month promotional campaign through a chocolate fair called “Salon du Chocolat” at their Shinjuku store. “The presence of Philippine cacao beans in the mainstream Japanese market is a clear manifestation that our produce are truly world class. With sufficient support and aggressive marketing strategies being implemented by various private- and public-sector partners, we hope more and more Philippine goods will join the global market,” DTI-TIPG Undersecretary Nora K. Terrado said. The Philippine Department of Agriculture said the global demand for cocoa is estimated to reach between 4.7 million metric tons (MMT) and 5 MMT by 2020. However, it is also predicted to reach a global shortage at 1 MMT in the same year. “We see a lot of budding local manufacturers and producers of cacao in the country. We, at DTI, continue to urge them to join trade fairs and avail [themselves] support services that help them in accessing not just domestic but as well as international markets, such as Japan. In this way, we will be able to mainstream Philippine produce while we continue to build the country’s brand globally,” Terrado added. She also urged producers to tap the DTI and its wide range of support services with its PTICs abroad. “The DTI assists Philippine companies, especially micro, small and medium enterprises or MSMEs, in getting a glimpse of emerging trends and slowly test and introduce the acceptability of their products in the international market,” Terrado added. Current efforts and initiatives in developing the Philippine cacao industry are mostly focused in Mindanao, which accounts for 90 percent of the Philippine cacao production, with 80 percent coming from the Davao region alone. The DTI, through its shared service facilities program, has provided 16 cacao-processing facilities to various regions that aim to equip and accelerate MSMEs’ competitiveness by giving them access to energy-efficient technologies and sophisticated equipment in their production.
PHL eyes to expand food-export market in Japan Citem officer in charge. “We will also feature other tropical food and ingredients to widen the line of Philippine products shipped to Japan and promote the country as a premier sourcing destination,” Terrado added. Foodex is known as a major gateway to the Japanese market. Last year the four-day event welcomed over 3,000 local and international exhibitors, as well as more than 82,000 buyers from the food manufacturing, service, distribution and trading sectors across the global food industry. Aside from Japan, Foodex is also vastly participated in by buyers from major regions, such as Europe, America, Africa and Australia. In 2017 17 local firms under the Food Philippines pavilion bagged $7.4 million worth of export sales. For this upcoming participation, Citem seeks to generate at least $10 million in export sales from buyers around the world.
Japan is the Philippines’s largest export destination for fresh foods and the second-largest market for processed food, next to the United States. According to preliminary reports from Philippine Statistics Authority, Japan is among the top export destinations of the country with a 16.42-percent total share to total merchandise exports of the country for the period of January to November 2017. The Philippines is the world’s second-largest producer of coconut and banana, the 2015 data of the Philippine Coconut Authority and the Department of Agriculture showed. Meanwhile, the country is also a top global producer of pineapple (third), canned tuna (fourth) and mango (10th), based on a 2013 data of the United Nations Food and Agriculture Organization. With the existing Japan-Philippines Economic Partnership Agreement, Japan provides an attractive and vast market for Philippine food
suppliers to serve the retail, food service and manufacturing industries. Data from the Japan External Trade Organization also showed Japan’s foreign direct investments in the country reached $724.71 million, while Philippine investment outflows to Japan stood at $14.165 million in the first nine months. Food Philippines’s participation in the Foodex Japan 2018 is organized by Citem, in partnership with the Philippine Trade and Investment Center Tokyo and Philippine Trade Training Center, as one of the DTI’s major efforts to intensify the promotion of Philippine specialty food products in overseas trade shows. Citem is committed to developing, nurturing and promoting globally competitive small and medium enterprises, exporters, designers and manufacturers by implementing an Integrated Approach to Export Marketing in partnership with other government and private entities.
The total untapped export potential of chocolate and other cocoa-food preparations stands at $3.4 billion. The markets with greatest potential for world’s exports of chocolate and other cocoa-food preparations are the US, Germany and France. The US shows the largest absolute difference between potential and actual exports in value terms, leaving room to realize additional exports worth $475.9 million. T he markets with greatest potential for Philippines ’s expor ts of or namental plants, excluding f lowers and buds, are Japan, the Netherlands and the US . Japan shows the largest absolute difference between potential and actual expor ts in value ter ms, leaving room to realize additional expor ts wor th $2.7 million.
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HE Center for International Trade Expositions and Missions, the export promotions arm of the Department of Trade and Industry (DTI-Citem), seeks to augment the Philippines’s trade relations with Japan as it showcases the country’s finest tropical flavors in the largest food fair in the Asia-Pacific region. Under the Food Philippines brand, DTI-Citem will bring the country’s top exporters of tropical fruits, beverages and other processed food in the 43rd International Food and Beverage Exhibition, popularly known as Foodex Japan, from March 6 to 9 at the Makuhari Messe in Chiba, Japan. “The Japanese people are no stranger to us. We know they have a penchant for our tropical fruits and that is what we are looking to showcase as we return to Foodex,” said Nora K. Terrado, DTI undersecretary for Trade and Investments Promotion Group and
export potential map
The Philippines’s best options for expor t diversification to the world are smoked sheets of natural rubber, nanioc starch and single yarn of jute. The Philippines finds single yarn of jute easiest to reach. Other footwear, rubber or plastic soles and uppers are the products that face the strongest demand potential in the world. Source: http://exportpotential.intracen.org
A10 Wednesday, February 28, 2018 • Editor: Angel R. Calso
Opinion BusinessMirror
www.businessmirror.com.ph
editorial
A case for building up NFA’s buffer stock
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Harvest in major palay-producing areas, such as Nueva Ecija, would begin soon. Sans an increase in its buying price, the NFA could forget its goal of cornering a bigger chunk of farmers’ dry season crop. The NFA again requested the NFA Council (NFAC) to raise the government’s palay-buying price to P22 per kilogram (kg), but the council has yet to decide on the matter. The NFAC said it decided to reject the proposal in January because the National Economic and Development Authority had warned about its effect on inflation. Raising the palay-buying price would also encourage private traders to do the same and cause commercial rice to become more expensive. But rice could still become more expensive even if the government decides not to increase the NFA’s buying price. The poor—the primary customers of the NFA—would be forced to purchase commercial rice. The increase in demand for the commercial variety could cause prices to go up as traders know that the NFA’s stockpile has been depleted and that Filipinos would be willing to pay for rice. Unfortunately for the government, the NFA no longer has stocks that could counter the spikes in rice prices. While the government can invoke Republic Act (RA) 7581, or The Price Act, it is often difficult to prove price manipulation, hoarding and collusion among rice retailers and traders. As for price controls allowed under RA 7581, the government can only implement it if an area is declared under a state of calamity; the privilege of the writ of habeas corpus was suspended; it is under martial law; or a state of rebellion or a state of war is declared in that area. But the law permits the President, upon the recommendation of the implementing agency or the Price Coordinating Council, to impose a price ceiling on any basic necessity or prime commodity, such as rice. Section 7 of RA 7581 states that the President may impose a price ceiling “whenever the prevailing price of any basic necessity or prime commodity has risen to unreasonable levels.” Congress is currently working on a bill that would amend Republic Act (RA) 8178 to convert rice import caps into tariff. Lawmakers are fast-tracking the measure to lift the quantitative restriction (QR) on rice so the Philippines could meet its commitment to the World Trade Organization and avoid trade sanctions. With the removal of the import caps, Dr. Flordeliza H. Bordey of the Philippine Rice Research Institute said more cheap imported rice could enter the country. And even with a 35-percent tariff, the landed cost of imported rice from Vietnam with 25-percent broken grains is only around P27 per kg. Given this scenario, the Duterte administration must now seriously think about what it intends to do with the NFA. After the QR on rice is removed, the next order of business should be to pass a measure that would define the role of the NFA. If the idea is to let the market dictate the price of rice, then it is time for the food agency to get out of buying and trading rice. It could still continue to monitor rice sellers to prevent prices from skyrocketing whenever supply is thin. For now, the President must help the food agency beef up its rice stockpile again. Until and unless the food agency attached to the Office of the President gets out of buying and trading the staple, the Duterte administration will continue to be saddled with the problem of volatile rice prices, especially when the NFA runs out of buffer stock.
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02282018
T has come to this: an agency mandated to ensure food security and stabilize rice prices is practically begging farmers to sell their paddy to the government. In a statement dated February 22, the National Food Authority (NFA) exhorted farmers to let the food agency buy their produce. The appeal is NFA’s last-ditch effort to shore up its procurement program, which has managed to add only 7,469 50-kilogram bags equivalent to 373.45 metric tons (MT) to its stockpile since January. In milled terms, this translates to only 261.45 MT, which is not even enough to meet the country’s average daily rice requirement, pegged at 31,000 MT.
The Philippines’s disaster risk financing and insurance strategy Dennis B. Funa
INSURANCE FORUM
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t is estimated that the country experiences a total of $3.5 billion in damages yearly due to typhoons and earthquakes. Around 20 typhoons make landfall in the Philippines every year. The financial cost of these natural disasters is simply astounding. In addressing the issue of disaster risk financing, insurance for government properties is recognized as one of the critical components. This insurance program for government has been described as the “last line of defense against severe natural disasters.” There are, however, other financial-protection schemes put in place by which the Philippine government can address such calamitous occurrences. These would include the Development Policy Loan with a Catastrophe-Deferred Drawdown Option (CAT-DDO 2) which provides $500 million of standby financing. There is also the Disaster Risk Reduction and Management Fund under the
general appropriation law. All of these fall squarely under a general plan called the National Disaster Risk Reduction and Management Plan 2011-2028.
Parametric Insurance Policy
ON July 28, 2017, the Philippines launched a parametric catastrophe risk-insurance program (also called “Parametric Insurance Policy” and “climate insurance”) for government properties with the collaboration of the Department of Finance (DOF), the Government Service Insurance
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the amount of P1 billion ($19.5 million), inclusive of cost for documentary stamp tax. Premiums have two categories, disaster-specific and province-specific. For disaster-specific premiums, P500 million of the fund will be allocated 79.2 percent (P396.1 million) for typhoons and 20.8 percent (P103.9 million) for earthquakes. The other P500 million will be province-specific and split equally among the 25 provinces at P20 million each. In turn, the World Bank, through the International Bank for Reconstruction and Development, will act as the intermediary to transfer or cede GSIS’s risks to selected international reinsurers. In other words, it will transfer the local risks outside the country or to the global reinsurance market. This is the first time that the World Bank will act as an intermediary for a reinsurance contract. The reinsurers were selected through competitive bidding. These reinsurers are: Nephila, Swiss Re, Munich Re (through New Re), AXA and Hannover Re. The risk modelling, through which the participating provinces were selected, was provided by AIR Worldwide. See “Funa,” A11
A generation emerging from the wreckage
✝ Ambassador Antonio L. Cabangon Chua Publisher
System (GSIS), the World Bank and the United Kingdom Department for International Development. This program is pioneering and is the first of its kind for the country. Other government agencies also had vital roles in the formulation of the program. These include the Department of Budget and Management, the National Economic and Development Authority, Office of Civil Defense, the Department of the Interior and Local Government, Commission on Audit and the Bureau of Treasury (BTr). The insurance coverage is good for one year starting July 28, 2017. Under this program, the GSIS, as the insurer, will provide catastrophe risk-insurance coverage for the national government, with priority for those agencies involved in disaster risk-management, and 25 selected and disaster-prone provinces. While principally a state pension fund, the GSIS is also mandated to insure government properties, assets, and other interests under Republic Act (RA) 656 (Property Insurance law). The premium for the program was allocated under the National Disaster Risk Reduction and Management Fund of the 2017 General Appropriations Act (RA 10924) in
I
’ve been going around to campuses asking undergraduate and graduate students how they see the world. Most of the students I’ve met with are at super-competitive schools—Harvard, Yale, the University of Chicago and Davidson—so this is a tiny slice of the rising generation. Still, their comments are striking. The first thing to say is that this is a generation with diminished expectations. Their lived experience includes the Iraq War, the financial crisis, police brutality and Donald J. Trump—a series of moments when the big institutions failed to provide basic security, competence and accountability. “We’re the school shooting generation,” one Harvard student told me. Another said: “Wall Street tanked the country and no one got punished. The same with government.” I found little faith in large organizations. “I don’t believe in politicians; they have been corrupted. I don’t believe in intellectuals; they have been corrupted,” said one young woman at Yale. I asked a group of students from about 30 countries which of them believed that the people running their country were basically competent. Only one young man, from Germany, raised a hand. “The utopia of our parents is the dystopia of our age,” a Harvard student said,
summarizing the general distemper. It’s not that the students are hopeless. They are dedicating their lives to social change. It’s just that they have trouble naming institutions that work. A number said they used to have a lot of faith in the tech industry, but they have lost much of it. “The Occupy strategy was such a visible failure, it left everyone else feeling disillusioned,” one lamented. “We don’t even have a common truth. A common set of facts,” another added. The second large theme was the loss of faith in the American idea. I told them that when I went to public school the American history curriculum was certainly liberal, but the primary emotion was gratitude. We were the lucky inheritors of Jefferson and Madison, Whitman and Lincoln, the Roosevelts, Kennedy and King. Our ancestors left oppression, crossed a wilderness and are trying to build a promised land. They looked at me like I was from
Mars. “That’s the way powerful white males talk about America,” one student said. When I asked how they were taught American history, a few said they weren’t taught much of it. “In my high-school education the American Revolution was a rounding error,” one young woman said. Others made it clear that the American story is mostly a story of oppression and guilt. “You come to realize the US is this incredibly imperfect place.” “I don’t have a sense of being proud to be an American.” Others didn’t recognize an American identity at all: “The US doesn’t have a unified culture the way other places do,” one said. I asked them to name the defining challenge of their generation. Several mentioned the decline of the nation-state and the threats to democracy. A few mentioned inequality, climate change and a spiritual crisis of meaning. “America is undergoing a renegotiation of the terms of who is powerful,” a woman from the University of Chicago astutely observed. I asked the students what change agents they had faith in. They almost always mentioned somebody local, decentralized and on the ground—teachers, community organizers. A woman from Stockton, California, said she was hoping to return there. A woman from Morocco celebrated the uneducated local activists who operate from a position of no fear. They are just fighting for the basics—education, health care and food. “We want change agents that look like us. We want to see ourselves moving the country forward,” one Chicago woman told me.
The students spent a lot of time debating how you organize an effective movement. One pointed out that today’s successful movements, like Black Lives Matter and #MeToo, don’t have famous figureheads or centralized structures. Some students embraced these dispersed, ground-up and spontaneous organizations. If they flame out after a few months, so what? They did their job. Others thought that, no, social movements have to grow institutional structures if they are going to last, and they have to get into politics if they are going to produce any serious change. A woman from the Middle East at Yale’s Jackson Institute noted that the Muslim Brotherhood spent decades debating whether to remain outside the system as a community organization or to go into politics. That was the sort of debate I saw playing out in front of me on campus after campus. I came away from these conversations thinking that one big challenge for this generation is determining how to take good things that are happening on the local level and translate them to the national level, where the problems are. I was also struck by pervasive but subtle hunger for a change in the emotional tenor of life. “We’re more connected but we’re more apart,” one student lamented. Again and again, students expressed a hunger for social and emotional bonding, for a shift from guilt and accusation toward empathy. “How do you create relationship?” one student asked. That may be the longing that undergirds all others.
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Helping UN foster peace and security
Boracay warning: Clean ‘right behind’ or be left behind?
P
Tourism Assistant Secretary Ricky Alegre declares that 82 percent of Boracay establishments are not connected to any wastewater-treatment facility. Moreover, tourist arrivals hit an average of about 64,000 a day, which is more than the island’s bedroom capacity of 40,000. This is 60 percent more than its holding capacity.
n E-coli makulay. Boracay’s sanitary problem hit the headlines when its waters were found contaminated with E-coli bacteria, which can only come from feces of animals and humans. TV footages even show a pipe, from which untreated, dirty, murky water pours out directly on the beach waters. The water spewing out is not clear, but has color (“may kulay”) in darkish gray, obviously not treated and sanitized. Tourism Assistant Secretary Ricky Alegre declares that 82 percent of Boracay establishments are not connected to any wastewatertreatment facility. Moreover, tourist arrivals hit an average of about 64,000 a day, which is more than the island’s bedroom capacity of 40,000. This is 60 percent more than its holding capacity, and we could also imagine people pissing off in the waters. If this problem did not gain prominence in media, it could not gain Duterte’s attention; and it won’t be long when outbreaks of skin diseases could happen. Authorities must thus take media criticisms and exposes not as opposition, but as feedback mechanisms, rightly or wrongly, that will trigger reforms for the better. n Kick ass to address problem behind? Duterte’s strongman approach of kicking asses over how we dispose our wastes from behind is a good move in the right direction, but it has also opened up the classic mythological “Pandora’s box” of a
Pontius Pilate’s act reduces 55 deaths a day? Do you know that 55 Filipinos die every day because of poor toilet systems? The National Sewerage and Septage Management Program revealed this, adding that over 90 percent of sewage is not collected and treated. We must invest more in toiletwater systems than spend time on Dengvaxia, which has not yet established causality of deaths as only 3 of 14 cases who died after receiving Dengvaxia, while the rest died for other reasons. Probe more on corruption to get the guilty jailed, and slow down on the medical probe to prevent the scare on legitimate vaccinations. Toilet facilities have improved, but former Education Secretary Armin A. Luistro admits at the 2016 Rotary International Conference on water, sanitation and hygiene in schools (WASH) that 3,628 elementary and secondary schools still had no regular source of safe and clean water. While the national toilet-topupil ratio of one toilet to 39 students is tolerable, other areas have a 1 to 100 ratio. Learning from Rotary’s WASH program, the Department of Health must launch campaigns to literally encourage “Pontius Pilate’s acts”— wash hands. Install closed-circuit television survey counters of people washing hands so you need not ask them embarrassing questions. No need to take pictures of their privacy, just compare volume influx at entrance with those washing hands. Link spread of diseases, deaths
Michael Makabenta Alunan
on the contrary
Teddy Locsin Jr.
Free fire Continued from A1
A
llow me to congratulate the Permanent Representative of Morocco Omar Hilale for his appointment as head of special committee. He has our complete support.
Since it was set up in 1975, the special committee has supported efforts to make the UN more efficient in its work of fostering peace and security in the world. The proposals and working papers now on the table are well within the committee’s mandate. Among them are those of Ghana and Cuba to strengthen cooperation between the UN and regional organizations, and enhance their combined effectiveness. They attest to the value of the committee and the quality of its work. To avoid war by the peaceful settlement of disputes is a major part of the UN’s work. Human rights are safer in peace as they are in constant peril in war. It is to uphold human rights that the UN was created after the horrors of the Holocaust in the Second World War. The UN was also created to foster development. But without human rights, what is the point of development? Proceeding from the assumption born out of experience, and the moral imperative that governs human actions, we believe that development is more likely to happen in conditions of freedom, justice and peace, while at the same time attaining the purpose of human development in human flourishing.
Funa. . .
continued from A10
The BTr is the designated policyholder, representing the national government and the LGUs. Under a projected scenario, reinsurance payouts will be released to the GSIS within two weeks after a disaster strikes. The insurance payouts will then soon be released to the BTr. Insurance proceeds will be released to the national government agencies and the LGUs within three weeks from the disaster. The 25 provinces given the typhoon-insurance coverage include: Albay, Aurora, Batanes, Cagayan, Camarines Norte, Camarines Sur, Catanduanes, Cebu, Davao del Sur, Davao Oriental, Dinagat Islands, Eastern Samar, Ilocos Norte, Ilocos Sur, Isabela, Laguna, Leyte, Northern Samar, Pampanga, Quezon, Rizal, Sorsogon, Surigao del Norte, Surigao del Sur and Zambales. The provinces were chosen on the basis of their vulnerability to selected hazards, such as maximum wind speed, maximum peak ground acceleration and the average annual loss.
Payouts and coverage
The parametric insurance program has a total coverage of $206 million (or about P10.6 billion) for national government assets and assets of selected local government units (provinces). The risks covered are earthquakes and typhoons for national government assets and typhoons only for provinces. Insurance payouts are triggered by the occurrence of parametric indicators. It will also have no restrictions as to use. Partial payouts are also allowed for “medium” disasters. The amount of payouts to provinces, through the BTr, will depend on estimated losses as determined by the catastrophic risk model. The program’s development objectives are the maintenance of sound fiscal health, to develop sustainable financing mechanisms, and to reduce the impact on the poorest and the most vulnerable. Under RA
At our meeting last year, we joined the call for the committee to consider ways to move forward on Cuba’s proposal to strengthen the organization and enhance its effectiveness—in particular by bringing the issue of reforming the UN Charter to the International Law Commission. We need to clarify and reemphasize the symbiotic rather than hierarchic relationship between the General Assembly and the Security Council. Ghana’s proposal of enhanced UN/regional cooperation in the peaceful settlement of disputes is a key aspect of the committee’s work. It expresses a felt necessity to fill the gaps in the UN’s work by improving coordination in enforcement actions and conflict prevention, and by clarifying the Security Council’s role in these matters. Ghana’s proposal is consistent with the 1982 Manila Declaration— the first comprehensive consolidation of a legal framework for the peaceful settlement of international disputes. The Philippines also looks forward to deeper discussions on the subject of the implementation of UN sanctions, as well as assistance to third states affected by them. Thank you. 10924, the insurance proceeds are specific for “government facilities.” Thus, they will be allocated for the repair and reconstruction of transport infrastructures, such as roads, bridges, ports, and airports, as well as for flood control and drainage facilities, hospitals, school buildings, evacuation centers, local government buildings, agricultural infrastructure, as well as utilities, power and water infrastructures.
The World Bank
According to Joaquim Levy, managing director and CFO of the World Bank Group, “Financial shocks caused by natural disasters undermine economic growth and poverty reduction. This new insurance program illustrates how the World Bank Group can leverage capital from the market to help governments receive fast cash injections for emergency response and to sustain essential services in times of crisis, empowering local governments to more effectively assist their citizens.” This program began in 2014 when the GSIS started discussions with the DOF and the World Bank to create a catastrophe risk-insurance program. The World Bank had previously extended assistance to other catastrophe insurance programs, such as the Caribbean Catastrophe Risk Insurance Facility and the Pacific Catastrophe Risk Insurance Company. Catastrophe risk insurance is not without critics. The cost of premiums is seen by some as a burden, especially for poor countries. As stated by Jonathan Reeves of ActionAid International, “Climate change is increasing the demand for and cost of insurance. Yet, poor people and nations—those least responsible for climate change—are paying the vast majority of the premiums.” It argues that needed resources are wastefully being diverted into long-term insurance facilities. Lawyer Dennis B. Funa is the current insurance commissioner. Funa was appointed by President Duterte as the new insurance commissioner in December 2016. E-mail: dennisfuna@yahoo.com.
Wednesday, February 28, 2018 A11
resident Duterte’s clampdown on Boracay over its neglect to clean up its wastewater is a wake-up call for the government to get its act together not only to rally right behind this marching order to clean up Boracay, but to push for total hygiene nationwide, or be left behind as to investment and tourism opportunities. bigger problem—the lack of a “culture of hygiene” that should be a must not only to be tourist-friendly, but as a fundamental health practice and policy. Boracay’s 2 million visitors and P56 billion in annual revenues will suffer temporary setbacks, but it could not be solved easily by simply cleaning up Boracay, or even all tourist destinations. Targets of 7.5 million foreign tourists for 2018 will be affected if we do not invest much in water infrastructure, sewerage-treatment facilities and toilet amenities, not only in tourist spots, but in all establishments. Local government units must kick asses, too, by enshrining toilet reforms in building codes or requiring more and bigger toilets to meet rising populations. More so for women, who need more space and time, unlike men who can unload standing up against urinals. The majority thinks building more toilets with ample water is enough. This only solves half the problem. Most toilets, including 82 percent of Boracay toilets, are mere septic tank systems that simply separate solids from liquids, with the latter finding their way to drainage and sewerage canals, aquifers and into the seas. What are also needed are wastewater-treatment facilities, which can be set up, say, in expropriated land to service clusters of communities.
Is jueteng back in Camarines Sur? Florante S. Solmerin
FACT IS MIGHT!
T
he Philippine Charity Sweepstakes Office (PCSO) has terminated the authority of Evenchance Gaming Corp. to play the Small Town Lottery (STL) in Camarines Sur due to reported violations of the STL implementing rules and regulations.
Shortly after the jueteng lords and local officials learned of the termination, the police raided the draw proceedings of the firm and arrested some people, including three PCSO branch employees in Pili town. According to PCSO, the police action might have violated the five-day legal process for the firm to submit its motion for reconsideration. The ruckus, as I was informed, may end up in a legal case between the firm and the
police raiding team. As a result of the STL termination, jueteng has resurfaced in the province. This is a fact. National Police chief Director General Ronald M. dela Rosa should investigate this. Allegedly, the provincial police gave the green light to a group of jueteng lords to operate using STL as a front. At present, jueteng lords are using the daily winning STL combination numbers from as far as Albay, Camarines Norte and some towns
Let’s wait and see who will be in the list of applicants for the STL rebidding because I’m certain that the PCSO board will conduct a background check and strictly screen all interested applicants for the authority to operate STL in Camarines Sur. in nearby provinces. Two to three years ago, I heard from a close friend of Bong Villafuerte that an alleged numbers game operator was already a “reformed man.” According to a lady friend, the said person busied himself with business not related to gambling. In fact, I met this man once through said lady friend. But is he back to gambling? This might interest Gen. “Bato” because, according to an intelligence report, gambling operators in Camarines Sur are set to meet on March 2 to discuss how to intensify the operation of STL con jueteng in the
The US is still a nation of immigrants
T
here are a few quotes and phrases that are so American—and so anodyne—that they amount to a kind of bipartisan lexicon, cited with equal fervor by Democrats and Republicans alike. For example: Land of the free, home of the brave. All men are created equal. Liberty and justice for all. Government of the people, by the people, for the people. For more than a half century, the litany has also included a phrase popularized by President John F. Kennedy: “A nation of immigrants.” Time and again, presidents and leaders of both parties have invoked those four words to lionize the contributions
immigrants have made to the United States. In 1981, for instance, Ronald Reagan invoked it: “Our nation is a nation of immigrants. More than any other country, our strength comes from our own immigrant heritage and our capacity to welcome those from other lands.” Why, then, has the US Citizenship and Immigration Services, which issues green cards and citizenship documents, deleted the phrase from its mission statement? Agencies are free to revise their mission statements, of course. And the previous mission statement was not exactly poetry. But when the person in the Oval Office routinely employs nativist rhetoric, scapegoats foreigners,
seeks lower levels of immigration and makes it more difficult to obtain green cards and visas, it is nearly impossible to see the deletion as mere coincidence. In fairness: President Donald J. Trump has used the phrase “nation of immigrants” at least once—albeit in a written statement defending his attempt to ban immigrants from seven Muslim nations. But the totality of his comments makes clear his hostility toward immigrants, at least from non-European countries. This is not the first time the Trump administration downplayed America’s immigrant heritage. Last year one of the president’s senior policy advisers dismissed the poem that
to non-washing of hands. n Problem behind is us not ass? Huge toilet problems are traced to a bigger problem—ourselves for giving less priority to hygiene. Worst, policy-makers care less as they don’t see reality on the ground. Do you know that Light Rail Transit (LRT) Line 2 at its Recto terminal has only one toilet, one bowl good for both men and women? And yet it services daily thousands of commuters. Even establishments like McDonalds below the LRT 2 Cubao station has only one toilet for men and women. The United Nations International Children’s Emergency Fund reports that over 30 million Filipinos don’t have water-sanitation facilities, of which 7.8 million people are forced into open space defecation, in the bushes, rivers, and in urban-poor settings in plastic bags that are thrown with the trash. These unhygienic practices cause diarrhea, amoebiasis, cholera and typhoid fever, etc., causing deaths, particularly among infants, and high health costs for the government. n Tourists come forth without comfort? Tourism Secretary Wanda Corazon T. Teo’s target of 12 million foreign tourists and 89 million domestic tourists by 2022 cannot be done by improving only facilities in tourist spots. Most tourists stray away to explore local communities only to be disappointed by the lack of toilet facilities all over, even in the big malls of SM, which maximize block space for retailer stalls and less for aesthetics and amenities, including toilets. I can’t understand why universal access to clean toilets is targeted only by 2028, and not now. And yet, the government is drumbeating tourism. And we must build toilet systems not solely to earn tourist dollars, but to reduce the confirmed 20,000 yearly deaths and improve the lives of everyone. Otherwise, we will be left behind again in many development indicators.
E-mail: mikealunan@yahoo.com
towns of Pasacao, Minalabac, San Fernando and Milaor. The termination of Evenchance, after all, is not a victory against jueteng or STL “bookies” in Camarines Sur as what Rep. Luis Raymund F. Villafuerte, Atong Ang and PCSO Director Sandra Cam were harping on during the Senate and House hearings. In the said hearings, the resource persons repeatedly identified Bong Pineda as owner of Evenchance. They also said that Pineda was allegedly using dummies for the STL operations. Be that as it may, Pineda’s STL operations are now generating millions of pesos in taxes for the government. Let’s wait and see who will be in the list of applicants for the rebidding because I’m certain that the PCSO board will conduct a background check and strictly screen all interested applicants for the authority to operate STL in Camarines Sur. FSSolmerin at fetad@yahoo.com.
is affixed to the Statue of Liberty— “Give me your tired, your poor, your huddled masses”—saying it “was added later; it’s not actually part of the original Statue of Liberty.” True enough, but it was written for the statue and came to define it. Given the inanity of the president’s tweets, what the Trump administration chooses not to say is often more telling than what it does. And while Trump may be a lost cause, Republicans ought to speak out against the nativism he continues to display on a regular basis—if not to defend historical truth and American values, then at least to prevent further damage to their party’s reputation. Bloomberg View
2nd Front Page BusinessMirror
A12 Wednesday, February 28, 2018
₧40-B performance bond required from third telco By Lorenz S. Marasigan
W
@lorenzmarasigan
HILE the government has scrapped the P10-billion market-capitalization requirement from its proposed rules on the selection of a third major telco player, it may require a performance bond that could go for an average of P40 billion over a five-year period. This was included in the new set of draft rules for the entry of a new telco player bared on Tuesday during the second round of public consultation for the selection of a new entrant in the duopolistic telco market in the Philippines. Eliseo M. Rio, undersecretary at the Department of Information
and Communications Technology (DICT), said the government has decided to remove the P10-billion market-capitalization requirement following concerns from prospective bidders, who said the hurdle was a bit too high. “We took that out because they said they can only put in too much
CORDOBA: “The President wants coverage of the areas and he wants the third player to be able to compete with the incumbents.”
investments. They also assured us that the efficiency of their systems do not require too much money— as with other telcos that still use legacy technology—as they will use new equipment,” he said on the sidelines of the public consultation in Quezon City. Hence, he added, the agency will no longer be looking at the face value of the investment, but instead will look into the “actual committed” value of the master plan of the bidders, including the areas covered, Internet speed committed and services to be provided
over the next five years. The February 19 draft rules on the third telco selection outlined, among others, the P10-billion capitalization for interested parties. “It will, however, be replaced by performance bonds,” Rio said. “These will ensure that they will provide the level of service they committed. They are going to be required to put in 25 percent of their equity in a bank for 90 days.” National Telecommunications Commission (NTC) Commissioner Gamaliel Cordoba said his group is seeking the aid of the National Economic and Development Authority (Neda), the Public-Private Partnership Center and the Insurance Commission on the implementation of the performance bond. “The performance bond, this is just the figure that we put, will be about P40 billion—but it can go higher or lower. See “Performance bond,” A2
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‘Bangkok still violating WTO’s tobacco ruling’ By Elijah Felice E. Rosales @alyasjah
M
anila has again brought to the attention of the World Trade Organization (WTO) Bangkok’s defiance to follow a ruling by the multilateral trading body on the customs valuation of tobacco products from Philippines. In a six-page document, the government asked the WTO to conduct consultations on Thailand’s customs and fiscal measures on cigarettes from the Philippines. The request replaces Manila’s previous appeal for consultations on its second recourse to compel Bangkok to strictly follow the WTO ruling that declared Thailand’s tax treatment on Philippine tobacco exports as contrary to multilateral trading rules. Philip Morris (PM) Thailand, which imports its products from its Philippine affiliate, received 1,052 notices of assessment from Bangkok’s customs department last November 29. The notices ordered PM Thailand to pay additional duties and taxes amounting to $809 million in a span of 30 days for imports made by the cigarette firm from 2001 to 2003. According to the Philippines, the notices of assessment that Thailand is using as a measure to comply with the WTO ruling is inconsistent with some agreements entered into by the two parties, particularly the General Agreement on Tariffs and Trade (GATT) and the Customs Valuation Agreement (CVA). Among the reasons cited by Manila were Article 1, Sections 1 and 2 (a) of the CVA, saying,“Thailand rejected the transaction values without valid basis; failed to communicate its grounds for considering that the relationship
between the buyer and the seller influenced the price; and, thereby, failed to give the importer any opportunity to comment on the information under consideration.” Citing Article 3, Section 2 of the GATT, Manila also wants Bangkok to explain why it imposed internal taxes, such as excise, value-added and health taxes, on imported goods “on a basis that exceeds the properly established customs value.” The Philippines is also demanding Bangkok to expound on the criminal charges filed against PM Thailand and seven of its former and current employees in connection to the 272 entries of cigarettes that cleared Thai customs between July 28, 2003, and June 24, 2006. Manila said this measure to comply is inconsistent, too, with some provisions of the GATT and the CVA. The Philippine delegation, in its request, cited Articles 2, 3, 4, 5, 6 and 7 of the CVA. Under these provisions, it alleged Thailand as failing to comply with the relevant valuation rules in establishing the actual values of the imported goods. On top of the raised issues, the Philippines said its request for consultations is also in line with its right to question any move that might amend, modify, replace, supersede or implement the measures to comply to be taken by Thailand. “If consultations are not held within 15 days, the Philippines intends to exercise its right under the sequencing arrangement to request a panel,” the document read. “The Philippines reserves all of its rights in respect to Thailand’s compliance with its WTO obligations in this dispute. It also reserves the rights to raise additional factual and legal claims during the course of consultations and in any request for the establishment of a panel,” it added.