Businessmirror january 08, 2018

VIVA, SEÑOR NAZARENO! Various sizes of the image of the Black Nazarene are seen in Quiapo, Manila, during the procession of the replicas a few days before the traslacion on January 9. See story on B3.ALYSA SALEN

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Monday, January 8, 2018 Vol. 13 No. 89

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ESPITE funds of publicly held companies showing a healthy run last year—with the benchmark index ending 2017 on a high note—investors are expected to hold back on betting all their cash on the Philippine economy.

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business news source of the year

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Investors seen hedging against market challenges

By VG Cabuag

2016 ejap journalism awards

PPP Conversations No. 11 with PPA GM Jay Santiago

The number of Philippine companies that went public last year

ead

PPPC.LAgra Alberto

Jose Pacifico E. Marcelo, head of investment banking group of First Metro Investment Corp. (FMIC), points to the number of companies going public this year.

According to Marcelo, this year there may only be four companies undertaking See “Investors,” A2

Alberto C. Agra

P

ublic-Private partnership (PPP) is not new to the Philippine Ports Authority (PPA). It has embarked, successfully at that, on the privatization of Manila International Container Terminal, South Harbor, Batangas and North Harbor.

Continued on A11

PHILIPPINES MAY REGAIN BM Reports BIRD FLU-FREE NATION STATUS BY APRIL–B.A.I. Govt, citizens remain incurable optimists as new year ushers old, new challengers T

By Jasper Emmanuel Y. Arcalas @jearcalas

he Philippines could regain its bird flu-free status by April, a month later than the government’s target date, as authorities experienced delays in sanitizing the affected farm in Cabiao, Nueva Ecija.

Bureau of Animal Industry (BAI) Animal Health and Welfare Division Chief Aryln Vytiaco said provincial veterinarians in Central Luzon were not able to complete the cleaning and disinfection of a farm struck by bird flu in Cabiao before Christmas.

This, she noted, pushed back the government’s timetable for notifying the World Organisation for Animal Health (OIE) that the country is already free from avian influenza (AI).

“The critical part here is the last day of cleaning and disinfection. [Provincial veterinarians] were not able to achieve it before Christmas, so they said they would finish it before the New Year,” Vytiaco told reporters in an interview recently.

“Probably, the earliest would be the first week of April,” she said when asked about the earliest possible date for notifying the OIE. In its report to the OIE, the BAI said 42,000 birds were affected by the bird flu that struck the Fourth District of Cabiao, Nueva Ecija. Of the total population, 27,675 instantly died from the virus, while the remaining 14,325 were killed and disposed of.

Under the Terrestrial Animal Health Code of the OIE, a country will only be declared free from bird flu if it would not report any outbreak within 90 days after the final disinfection of the affected areas.

The discovery of AI in a layer farm in Cabiao, Nueva Ecija, reset the country’s countdown to bird flu-free status, as the government has earlier targeted to notify the OIE that the country is free from the virus as early as December 20, after the cleaning and disinfection of AI-affected farms in San Isidro and Jaen, Nueva Ecija.

Earlier, Vytiaco said the country may lose its market share for poultry products in Japan if the Philippines will not be cleared from bird flu soon.

Citing industry reports, she said Japanese importers may be forced to source its chicken imports from other countries next year to fill in the supply void left by the Philippines after it was banned from exporting poultry products to Japan.

“The cold storages have been communicating with me, and they are saying that their problem is that, if it takes us so long to be AI-free, then we may lose our market for yakitori,” Vytiaco told reporters in an interview last December.

“The Philippines is banned from exporting yakitori chicken since August.

Our traditional markets for yakitori could source products from other countries like Thailand if we’re unable to resolve the AI problem,” she added.

See “Bird flu,” A2

PESO exchange rates n US 49.8790

Cimatu

By Jonathan L. Mayuga @jonlmayuga

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Part One

AMN all this philosophy and psychology!” So says Ivan Alexyevitch in Anton Chekhov’s A Happy Man. Had he been a person living in the Philippine archipelago, the list of things to be damned could go on.

But, as they say, nobody beats a Filipino in terms of happiness.

Despite the lengthening list of issues that could drag a country into pessimism—future of the mining industry, conflict in the South, the Korea conflict and intragovernmental politics, the outlook remains positive.

The Filipino, indeed, is an incurable optimist.

DENR

TAKE the Department of Environment and Natural Resources (DENR) for one.

With Secretary Roy A. Cimatu at the helm, the DENR is expected to make a fresh start. The agency will have to face the dilemma of deciding over the fate of more than two dozen large-scale operating mines and petitions seeking to reverse controversial issues concerning the

A laborer works on the columns of steel bar in a construction site in Macapagal Boulevard in Parañaque City. Despite the many challenges that arose in 2017, many Filipinos in and out of government office remain optimistic for the new year. NONIE REYES

extractive industry.

While the year 2018 promises to be a challenging year for an environment secretary who has no background in environmental protection and conservation, or the exploitation of natural resources— and “is still learning the ropes,” as Cimatu said—the year ahead is also promising by all indication.

A long with the Mining Industr y Coord inat ing Counci l (MICC), the DENR was tasked by Malacañang to review the appeals

individually by mining companies whose operations hang in the balance, with Cimatu’s predecessor recommending either their closure or suspension as a result of a controversial mine audit—and failing strict social and environmental standards.

The task of the DENR chief is tricky. It requires striking a balance between the protection of the environment on one hand, and the exploitation of natural resources on the other.

DESPITE being a unicorn, having been in the military most of his life, the media-shy Cimatu took over last May. He was a shoo-in, easily getting the nod of the powerful Commission on Appointments (CA), who rejected environmental advocate Regina Paz L. Lopez over strong opposition from the mining industry represented by the Chamber of Mines of the Philippines (COMP).

Cimatu, a former Armed Forces of the Philippines chief of staff, has declined request for media interviews over the issue of mining. Still, the DENR chief appears to be happy with the mining industry lately.

In a brief speech during the formal and official adoption by the COMP of Canada’s “Toward Sustainable Mining initiative and Baguio Declaration,” Cimatu even thanked the members of the group, which represents the big players in the country’s mining industry, for accepting his challenge.

Under Cimatu, the DENR was able to surpass its 2017 targets, owing to the successful implementation of various programs and activities other than mining.

Continued on A2

n japan 0.4425 n UK 67.6110 n HK 6.3808 n CHINA 7.6808 n singapore 37.5850 n australia 39.2149 n EU 60.2089 n SAUDI arabia 13.3003

Source: BSP (5 January 2018 )

BMReports BusinessMirror

A2 Monday, January 8, 2018

The year of the pop-ups

By Ma. Stella F. Arnaldo

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@akosistellaBM Special to the BusinessMirror

This was the forecast of feng shui (literally “wind-water”) expert Marites Allen during her 13th Philippine Feng Shui Convention last Saturday, her annual presentation for the Chinese New Year. She warns these new online entrepreneurs, however, to be wary of their socalled friends, who may just steal their ideas.

“If you think about it, there will be lots of indications on the use of social media of doing business [from the] home, starting their new thing.... A lot of people are going to be more independent, and a lot of people are going to demand for online shops. The Philippines, in fact, if you compare with other countries, is quite far behind in terms of using Internet as a way to sell, but you would be surprised, people now, because of the traffic, they have gone to online shopping. So social media, digital communications marketing, will be very good.”

Visa’s survey last year showed, for instance, that 71 percent of Filipinos shopped online at least once a month, up from 60 percent in 2015. The same survey showed that e-commerce growth in the country exceeded 30 percent in 2016. In fact, some of the largest e-commerce sites like Lazada and Zalora, count the Philippines among their largest growth centers, according to published interviews with their executives.

But Allen gives a caveat to wou ld-be I nter net ent re pre neurs: “We have to be watchful about people who claim to be

Investors. . .

our friends. They will do things exactly what [these entrepreneurs have started]. Kopyahan, gaya-gaya. So there’s going to be competition. So do watch your friends; sometimes they cannot be your true friends anymore.”

Using the four-pillar chart for the Philippines, she said two top favorable elements for 2018 are wood and fire. “Wood represents sales, fire represents optimism, joy, happiness and hope.” Industries with the wood element will do well: agriculture, textile and fashion, publishing (writers), office supplies, day care/schools/universities, floral business, clothing and the teaching profession.

Fire industries “offer plenty of opportunities”; these are oil/petroleum/gas/fuel, entertainment, television, restaurants, food processing, fireworks, solar energy, electricity, lighting, movie production or anything that uses heat or light. This spells good news for listed companies like Meralco, whose sales rose by 4.4 percent in the nine months to September 2017, and Petron Corp., which posted a 58-percent surge in sales during the same period.

The year 2018 is also auspicious for industries with the earth element, such as real estate or property development, she adds. This bodes well for companies like Vista Land & Lifescapes Inc. of BusinessMirror columnist Manuel B. Villar, which registered a 12-percent increase in profit to P7.1 billion from January to September 2017.

Other industries with this element

Continued from A1

their respective initial public offering (IPO), an economic activity that allows the public to park their hard-earned money for potential income. Marcelo said if the IPO of these companies and those who announced intentions to go public last year push through, the total IPOs this year may only hit P21 billion.

“On IPOs, we’re not optimistic, which is sad because IPOs add depth to the market because of new names,” Marcelo said. “Our market has a very limited supply of shares.”

There are two immediate issues this year, one is The Lush Co. and the other is AirAsia.

Lush, which operates a food-carts business under different brands that include Fruitas and Johnny Lemon, will use the proceeds of the IPO to expand its business.

Lush’s registration statement for the IPO is expected to be filed with the Securities and Exchange Commission within the first quarter of the year, in time for its going

Govt, citizens remain incurable optimists as new year ushers old, new challengers Continued from a1

However, Wilfredo G. Moncano, director of the Mines and Geosciences Bureau (MGB), told reporters last November the bureau will still push for the lifting of the moratorium on new permits for mining as well as the ban on open-pit mining.

By the first quarter of the year, Moncano said there will be a lot of activities as he also vowed to resolve issues hounding the conflicting positions over Manicani Island in Guiuian, Eastern Samar and the province of Zambales.

HE Year of the Earth Dog, which begins on February 16, will be an auspicious year for starting online retail stores or popups, and individual businesses.

Targets

Feng shui expert Marites Allen recommends a number of lucky charms to enhance one’s career and relationships, or improve the home in the Year of the Earth Dog. Stella Arnaldo

are: pawnshop, building materials, ceramics, marble, pottery, landfills, recycling, storage and warehousing, construction, hospitality and “anything to do with earth/soil/ land business, such as car parks, rentals, etc.”

Industries with the water element will have average luck—spa, marine/naval business, aquariums, cold beverages, transportation, beauty salons/cosmetology. Since 2018 lacks the metal element, metal industries will be challenging this year: car manufacturing, hardware, moulding, banking and finance, accounting, mechanical engineering, gold, m in ing , gover nment of f ices, and architecture.

In the Chinese horoscope, a dog is seen as a peaceful animal, which strives to bypass conflict; however, it can also be quick-tempered.

Dogs have a well-developed intuition, a strong mind and imagination. Previous Dog years are: 1922, 1934, 1946, 1958, 1970,

public by the first half of the year. Marcelo declined to give the amount of the deal.

AirAsia Philippines, meanwhile, is planning to raise through the Philippine Stock Exchange (PSE) also within the year up to $250 million. Proceeds of the company’s IPO will be used to fund new routes and expand its domestic operation.

Last year only four new companies were listed. These were Wilcon Depot Inc., Eagle Cement Corp., Cebu Landmasters Inc. and Chelsea Logistics Holding Corp.

Since 2015 only a dozen companies became public at a rate of only four companies per year. There were three follow-on offerings of dollar denominated securities: two

by Del Monte Pacific Ltd. and one by Cirtek Holdings Philippines Corp.

“The equity issues this year will mostly be new issues. Most of the old issues before will probably not be floated this year because of various issues with the PSE and also with the market like mining issues; they have regulatory problems,” Marcelo said. “But, of course,

1982, 1994 and 2006, and among the prominent businessmen born under this sign are Lucio Tan and Manuel V. Pangilinan.

While it is a generally favorable year for Dogs, Allen cautions them to be wary of politicking or jealousy at work. “Luck will be on your side as improvements in the relationship side of your working career emerge. Minor obstacles will only create a slight disruption, so do not worry so much. Occasionally, it is important that we experience some bumps along the way.”

As for the Philippine economy in general, Allen says 2018 will be kind. “The spring and summer seasons always bring positive outlook for the market. Philippines and Asia will still be among the best-performing markets compared to the rest of the world.”

She added, “it is all about going back to basics,” pointing out that the Philippines “has very rich and massive agricultural lands.... It is best to utilize them.”

these will be dependent on market conditions.”

The PSE is still working out its attempt to acquire PDS Holdings, which owns the Philippine Dealing and Exchange Corp. or PDex, the operator of the fixed-income exchange. On the other hand, the mining industry is still seeking clarity on government’s policy stance, especially on open-pit mining.

Market stirring may come from San Miguel Corp., which is reorganizing its food and beverage group to combine it into one larger company. San Miguel may still help to increase activity in the market as the conglomerate prepares its follow-on offering of its foodand-beverage firms worth up to $3 billion, or about P150 billion.

Marcelo said that would be the single biggest issue for the year, which may also lead to mopping up the market’s liquidity for other issues to come in. The San Miguel follow-on offering, he added, can be considered as a “re-IPO,” since there are only a few shares listed for the food-and-beverage unit of the conglomerate.

According to data, a total of P138 billion was raised from the PSE last year, down from 7 percent from the previous year’s P149 billion. Of the figure, only P23 billion came from IPO and P41 billion came from follow-on offering and preferred shares. The rest came from stock rights offer.

FMIC data showed that IPO figures for this year are expected to shrink further to just P12 billion. However, P162 billion will come from follow-on offering—the bulk of which will come from San Miguel’s deal—and P73 billion from stock rights offer or a total of P247 billion.

“That will be a record for the PSE when all of that materialized,” Marcelo said. The amount raised from the PSE in 2017 was still a fraction larger than the corporate bond issuances that totaled to P125.70 billion.

What Marcelo is excited about are the infrastructure bonds, or debt papers issued by companies that have seasoned projects already built and up and running. The PSE also has a program lined up for these firms to instead list their projects at the PSE.

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THE coming year appears to be a promising year for the environment and natural resources sector, nonetheless, if the accomplishment of the agency is to be believed.

In his report, the environment chief said that as of October, the DENR already met and exceeded national targets and most program activities with accomplishments ranging from 100 to 138 percent. The report was submitted to Cabinet Secretary Leoncio Evasco Jr. last December 4.

For instance, Cimatu reported that the agency’s program on solid-waste management topped the list of its major accomplishments at 138 percent, having assisted 321 local government units (LGUs) on proper closure and rehabilitation of open and controlled dumps within water quality-management areas (WQMAs) and the Manila Bay region, out of the original target of 233 LGUs. This was credited by the DENR chief to the strict implementation of Republic Act 9003, or the Ecological Solid Waste Management Act of 2000, as he promised right after he took over the DENR post from Secretary Regina Paz L. Lopez last May. The agency’s program on the management and protection of protected areas and ecotourism development was its second-biggest accomplishment for the year, with various Protected Area Management Boards approving a total of 997 resolutions from the target of 736. The PAMB is the highest policy-making body of a Protected Area which is mostly key biodiversity areas (KBAs) and areas set aside for conservation.

The completion rates of the protected area managed and protected, blue/green brigades/volunteers engaged, and ecotourism facilities maintained and reha-

FMIC, an investment bank present in most deals in the country, is also optimistic the Real Estate Investment Trust (REIT) would come to fruition. Negotiations beginning last year showed hopes the REIT would fly as these talks led to the repeal of some of the contentious issues, mostly on taxation.

The REIT law was designed to recycle realestate assets by placing it in another Reit company in which the public can invest into by purchasing shares. The shares of the company can also be traded at the PSE. The Aquino administration—hard-pressed to shore up cash through taxes—held stubbornly on its stance on taxation issues, which include slapping a 12-percent value-added tax on the transfer of asset into the Reit company and a 30-percent income tax rate.

Reit owners are also required to sell to the public a majority stake, or at least 67 percent, in three years from the initial 40 percent upon listing. FMIC also expects the benchmark 30-company PSE index to hit 9,400 points by the end of the year.

“The stock market now is very exciting. I don’t see any negative impact from the new taxes to be imposed. No amount of tax burden will deter you [from investing at the stock market],” said Cristina Ulang, FMIC vice president.

Broker Philstocks Financial Inc. is much more positive and views that the PSEi may reach 10,700 points to 11,000 points by the end of the year on the upside but may return to the 7,900-point level on the downside.

It believes that market players are expecting a third player to come in the telecommunications market, while investors will put their money in the infrastructure and construction companies.

“If domestic risks are contained the market’s overall sentiment will stay positive even ahead of the 2019 political exercise and the extended bull run. But the risks also include rising inflation and a weakness in the currency as central banks in developed economies shift more towards tightening,” the broker said. “In essence, the long-term view posits that the bull, though still able to subsist, is losing steam gradually.”

bilitated were 100 percent, 108 percent and 103 percent, respectively.

Accomplishments MEANWHILE, as of September 2017, the DENR’s National Greening Program (NGP) had a 116-percent accomplishment rate in terms of the number of persons employed: 55,805 from the target of 47,981.

As regards the number of quality planting materials or seedlings, the program produced a total of 1.1 million, which is 14 percent higher than its target of 980,000. As of October, the government’s flagship reforestation program covered an area of 178,148 hectares or 93 percent of the overall target.

The DENR’s clean-water program also met its targets for the year. The accomplishment rate in terms of the number of firms monitored for compliance with the Clean Water Act was 106 percent, while the number of new esteros (estuaries) and water bodies was at 109 percent.

The number of WQMAs operationalized was at 100 percent. Through its geohazard assessment and mapping program, the DENR was able to update the 1:1,000 scale geohazard maps of 21 LGUs instead of the original target of 20. The detailed subsurface assessments of its 15 targeted LGUs have also been completed.

The DENR also met its targets under the geospatial data infrastructure program: 100 percent in system analysis and 96 percent in program development. From the original target of 421, a total of 429 forest-protection officers were hired under the agency’s forest-protection program. Under its coastal and marine ecosystems-management program, the DENR was able to provide technical assistance to all targeted 85 LGUs. It was also able to assess and map 94,116 coastal habitats for potential livelihood opportunities, from the original target of 85,592.

The DENR’s clean-air program had successfully operated, maintained and calibrated 98 out of the 101 sampling stations; monitored 12,508 of the 13,791 firms in the Caloocan-Malabon-NavotasValenzula area and major centers on their compliance with the Clean Air Act of 1999; and calibrated 34 of 45 automatic Air Quality Monitoring Stations across the country. To be continued

Bird flu. . .

Continued from A1

Local poultry products were banned

by Japan last August after the Philippine government confirmed that bird flu struck a poultry farm in Pampanga.

At present, Philippine poultry exports are banned in a number of countries, including Japan, South Korea, Singapore, the United Arab Emirates and Saudi Arabia. However, even before AI struck Central Luzon, Philippine chicken exports have been declining as government data indicated a double-digit drop in the volume of outbound shipments in January to July 2017.

Data from the BAI obtained by the BusinessMirror showed the country’s chickenmeat exports during the seven-month period reached 2,609.374 metric tons (MT), 12.23 percent lower than the previous year’s 2,973.064 MT. BAI data indicated that Japan was the sole buyer of chicken products exported by the Philippines during the period.

Senate. . .

Continued from A12

Also, 13th-month pay and other bonuses amounting to P90,000 a month are nontaxable.

In Dominguez’s reckoning, the substantial cuts in personal-income tax, will, in effect, increase the take-home pay of the majority of taxpayers, which will, in turn, boost their disposal income or purchasing power and further stimulate the economy.

Angara’s confidence about meeting a strict timeline in refining the consolidated tax-amnesty bill may be partly arising from the support signaled by the Senate Minority bloc.

Last Sunday fielding questions in a radio interview, Senate Minority Leader Franklin M. Drilon was asked about the tax amnesty and he categorically said: “We will support that because that proposal was championed by the administration in order to start from a clean slate.”

The Nation BusinessMirror

www.businessmirror.com.ph

Editor: Vittorio V. Vitug • Monday, January 8, 2018

A3

Labor group urges govt to inspect all PHL malls citing fire-safety standards violations

By Elijah Felice E. Rosales

A

“There is a widespread violation of malls owners to fire-safety standards and compromise the safety of mall goers and well-being of mall workers to cut costs and make bigger profit for themselves. The ongoing Metro Ayala Mall…and the NCCC Mall fires are symptoms of the wanton disregard of department-store owners to go around our building safety laws and ignore workplace policy on workers’ health and safety,” the labor leader said.

“We have to find out how safe or how fire-risky these other malls nationwide are,” he added.

Associated Labor Unions-TUCP Spokesman Alan A. Tanjusay seconded the recommendation. He argued the DOLE-BFP safety inspection is crucial to ensure that malls are not at risk of fire in time for the forthcoming summer months, when fire incidents are most frequent.

“Fire-safety audit on all malls is important because workers work here and children, old folks and entire families frequent these places.

They are places for work, recreation and business. Malls have become very important places in the community, but how safe are our malls in the light of the recent twin fatal fire incidents involving two malls?”

Tanjusay said.

@alyasjah

labor group is calling on the government to conduct safety inspections of all malls nationwide in response to the recent string of fires that has claimed the lives of dozens of workers.

The Trade Union Congress of the Philippines (TUCP) is urging the Department of Labor and Employment (DOLE) and the Bureau of Fire Protection (BFP) to immediately inspect all malls in the country in light of the fire in Metro Ayala Center in Cebu City that has yet to be put off by authorities.

The Gaisano Mall fire came only two weeks after a massive fire ravaged the NCCC Mall in Davao City, claiming the lives of 38 workers trapped inside the department store.

“It is outrageous to see another fire incident taking place in Metro Ayala Mall and Gaisano Mall in Cebu City, when, just 15 days ago, 38 workers perished in the NCCC Mall fire in

Davao City. These are not isolated incidents,” TUCP President Raymond C. Mendoza said in a statement.

The Cebu local government has estimated it will most likely take firefighters two days before fully taking out the fire. The Metro Retail Group Inc., for its part, said all customers and mall personnel were evacuated safely, and no one was left inside the burning mall. Mendoza said it is just right for the DOLE and BFP to inspect all malls nationwide, given the “blatant violations” committed by the NCCC Mall to fire-safety codes and noncompliance to occupational safety and health regulations. Inspecting malls, he added, will help in the reduction of fire incidents in department stores.

The NCCC Mall fire in Davao City claimed 38 lives.

National Press Club wins case vs GSIS

By Joel R. San Juan

T

@jrsanjuan1573

HE National Press Club (NPC) has won anew in its legal battle against the Government Service Insurance System (GSIS) over a Vicente Manansala mural that was sold to a private gallery in 2007 in the amount of P10 million.

This was after the Court of Appeals’s (CA) Fourth Division affirmed the order issued by the Regional Trial Court (RTC) in Manila City on March 17, 2014, dismissing the estafa complaint filed by the GSIS against former officers and members of the board of directors of the NPC in connection with the sale of the mural.

The appellate court held that the trial court did not err in granting the prosecution’s motion to withdraw the information for estafa filed against the former NPC board members.

The CA did not give merit to GSIS’s claim that the order of thenActing Justice Secretary Alberto Agra was for the withdrawal of the case for qualified theft, and not for estafa.

“Whether the motion to withdraw pertains to the case for qualified theft and not for estafa, the RTC correctly granted the same,”

the CA said in a 19-page ruling penned by Associate Justice Carmelita Salandanan Manahan.

“It must be noted that, in granting the motion to withdraw the information, the RTC did not merely rely on the assessment of the acting secretary. Contrary to GSIS’s claim, the RTC made its own evaluation of the case and consequently found no probable cause to prosecute the accused-appellees for the crime of estafa,” it added.

The CA agreed with the trial court that there is no probable cause to push for the trial of the estafa complaint against the former NPC board of directors.

It explained that based on the records of the case, the GSIS failed to provide evidence showing that the mural was received by the NPC in trust or on commission, or for administration, or under the obligation to return the same to GSIS. The CA gave weight to the NPC’s claim that, although the real property is registered in the name of GSIS, NPC is still considered the owner of the mural.

It noted that the trial court’s decision, declaring NPC as the owner of the mural, was affirmed by the CA’s Seventh Division in a ruling in 2011.

The decision, according to the CA, put to rest the issue of owner-

ship over the subject mural.

“Therefore, there is also doubt to the presence of trust relationship or obligation involving the duty to return the mural. Accordingly, GSIS failed to prove the first element of estafa,” the ruling stated.

Likewise, the CA said the second element of misappropriation is lacking.

If the NPC is the true owner of the mural, the CA added, then it cannot be said that it misappropriated its own property.

On the other hand, if GSIS really owns the mural, the NPC cannot be considered to have misappropriated the same since its sale was a corporate act by virtue of a board resolution passed by the NPC. L i ke w i se, t he C A poi nted out that there is no evidence to prove that the accused-appellees (NPC), either as corporate officers or in their personal capacities, benefited themselves from the proceeds of the sale.

“Being a corporate act, it is the NPC which clearly benefited from the sale of the mural,” the decision read.

In its ruling in 2011, the CA upheld the NPC’s right over the contested mural, although it did not resolve the issue on the ownership of the NPC building from

where it was taken.

“Being the owner of the mural, NPC has all the rights to dispose of the same in whatever manner it desires. NPC cannot be made liable, in any way, in exercising what is merely a propriety act,” the CA ruled.

The GSIS had claimed ownership of the mural, saying it is an immovable part of the NPC building, which it owns by virtue of Transfer Certificate of Title 265236.

The NPC, on the other hand, insisted on its right over the property through Letter of Instructions 500 issued by the late strongman Ferdinand F. Marcos Sr. in 1977 directing GSIS to donate to NPC the subject property.

The NPC, then under Roy Mabasa as president, sold the mural to Heritage Galleries for P10 million.

The Pasay City Regional Trial Court Branch 112, in a decision on July 16, 2009, sided with NPC and not only granted it ownership of the mural but also directed GSIS to donate the building to the organization.

It upheld the arguments of the NPC that the mural was a movable object not intended to be part of the wall of the building and that its theme, “Freedom of the Press,” shows its connection to the organization.

Drilon deplores House plan to railroad Charter change

By Butch Fernandez @butchfBM

S

enate Minority Leader Franklin M. Drilon deplored plans by Malacañang allies in Congress to railroad holding a national plebiscite this coming May to ratify a constitutional amendment paving the way for the shift to a federal form of government favored by President Duterte.

Drilon was reacting to reports over the weekend that a Palace study group formed to craft Charter changes was moving to fast-track its deadline in order to complete the task in time for holding a May 2018 referendum to ratify major amendments to the 1987 Constitution.

“We assume the constitutional study is still incomplete,” the senator said. “That is the conclusion we see...they may be ready, we don’t know,” Drilon says even as he asserts that “amending the Charter is the task of Congress and not the Executive branch.”

Drilon recalled that when he was still the chairman of the Senate Committee on Amendments, he had asked Executive Secretary Salvador C. Medialdea to submit a Palace position on its preferred mode of amending the Charter: through a constitutional convention or Congress as Constituent Assembly.

The Senator added that “unfortunately’ Medialdea told us that President Duterte had just signed an Executive Order creating a constitutional study group composed of 24 members.”

“Unfortunately, up to this point, the Senate has not yet received an official position,” Drilon said. “We don’t know if the constitutional study

group had convened. What I remember is they wanted to tap as chairman former Chief Justice Ricardo Puno. Up to now, nothing has been submitted to us.”

The senator suspects the non-submission indicates that Palace officials pushing for Constitutional changes are not ready to render a report on their plans to tinker with the Charter.

Drilon doubted the statement attributed to Speaker Pantaleon D. Alvarez calling for a Charter change referendum by May 2018 as reflective of the Palace position on the issue. “Until the Senate gets an official communication, we cannot presume that is the position of Malacañang.”

At the same time, Drilon rules out as improbable the timetable laid down by Alvarez to hold a plebiscite on Charter change this coming May. “It really cannot be done.”

“First, we have to decide if we want to do it through a Constituent Assembly [Con-ass] and whether the Senate is amenable to that.

We belong to two coequal chambers and one cannot dictate on the other.”

The House cannot dictate that the mode for amending the Constitution should be Con-ass.

Drilon added: “There is no such consensus in the Senate. In fact, what is pending in the committee is a resolution calling for an election of the delegates of the constitutional convention. The first step is to determine the mode for amending the Constitution. And under the Constitution, there are two modes: Constituent Assembly where Congress proposes amendments that require 3/4 votes, or constitutional convention by 2/3 votes. That is the first step before we talk about ratification.”

Economy

A4 Monday, January 8, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

www.businessmirror.com.ph

Lawmakers keen on easing economic Creative industries W restrictions in Constitution via Con-ass

L

By Jovee Marie N. dela Cruz

@joveemarie

iberalizing the restrictive economic provisions of the Constitution and the possible removal or extension of term limits of government officials are among the top issues that would be discussed

by Congress when it convenes into Constituent Assembly (Con-ass) early this year, a leader of the House of Representatives said last Sunday.

House Committee on Constitutional Reforms Chairman Roger G. Mercado of the Lone District of Southern Leyte said he sees no opposition among members of Congress on the proposal amending the Constitution’s restrictive economic provisions by removing the provisions that limit foreign ownership in various sectors of the economy.

“I think we’ll have no problem [in the proposal amending the economic provision of the Constitution]. We need to open our economy because of the present system. We are promoting the world trade organization system that is open to all,” Mercado said in a radio interview.

“We have just concluded the Asean [summit]. We have now Asean engineers, Asean lawyers that can practice law wherever we are in the member organization of Asean. We [only] need surgical changes to adopt to the present conditions and that’s why we need to change our 30-year-old

Constitution,” he added.

There are several moves in 17th Congress liberalizing the economic provisions of the 1987 Constitution.

Under Article XII of the 1987 Constitution, foreign investors are prohibited to own more than 40 percent on certain industries, while they are totally restricted to exploit natural resources, public utilities and own any company in the media industry.

Term limits

Moreover, Mercado said there are sentiments among lawmakers on the possible extension or removal of term limits of some of government officials, including in the local government units.

“These are the sentiments [and] based on our survey 60-40 in favor that the term of elected officials will be four years because three years is too short [to implement programs and projects]. Also, there were times before there were no term limits but very effective. Like for example in America, there are no term limits. You can stay there until your

MERCADO

constituents will vote you out of office,” he said.

However, Mercardo clarified that all these constitutional amendments would still be submitted to the people in a plebiscite.

“So we are proposing [these amendments] for approval of our members, in case there will be a constituent assembly. All the while, all of these [discussions] are open, transparent, everybody is welcome to criticize, to make recommendations without fear,” he said.

Mercado, meanwhile, denied the possible extension of term of President Duterte. Duterte’s term will end in 2022.

Moreover, while there could be some disagreements between the two chambers of Congress over the issue of voting jointly or separately in a Con-ass, Mercado said, “be that as it may, I think Speaker Pantaleon D. Alvarez and other lawmakers, we are amenable on separate voting [issue].”

Earlier, Alvarez said convening Congress into a Constituent Assembly to propose Charter amendments and shift to federalism is top priority

of House of Representatives when session resumes on January 15.

Alvarez said if the 17th Congress could convene into a Con-ass this January, the proposed new federal charter could be submitted for referendum simultaneously with the barangay elections on May 14, 2018.

Under Con-ass, it’s the sitting lawmakers themselves—congressmen and senators—who will serve as the delegates.

The House Committee on Constitutional Reforms’ four technical working groups (TWGs) are already drafting a proposed Philippine Federal Constitution.

TWG 1 chaired by Rep. Corazon Nuñez-Malanyaon of Negros Oriental is handling the provisions on the Executive-Legislative (Articles VI and VII); New article on Federal and Regional Powers, Numbers of States; and Local Government and Taxation/Allocation of Resources (Article X).

TWG 2 chaired by Deputy Speaker Fredenil Castro of Capiz is drafting the provisions on the Judiciary (Article VIII); Amendments or Revisions (Article XVII); Suffrage (Article V), Citizenship (Article IV); and Bill of Rights (Article III).

TWG 3 chaired by Rep. Alfredo Benitez of Negros Occidental is preparing the Preamble; National Territory (Article I); Declaration of Principles and State Policies (Article II); General Provisions (Article XVI); and Transitory Provisions (Article XVIII).

Last, TWG 4 chaired by Rep. Vicente Veloso of Leyte is handling Social Justice, Labor and Others (Article XIII); Education, Science and Others (Article XIV); National Economy and Patrimony (Article XII); New article on the Bill of Duties; Accountability of Public Officials (Article XI); and Family (Article XV).

hen the Joint Foreign Chambers (JFC) launched Arangkada in 2010 and focused—among others—on “7 Big Winners,” Creative Industries was seen as one of the sectors that has great potential: “Filipinos enjoy a well-deserved international reputation for creativity.

Filipino musicians and singers have long been global troubadours and, in recent years, are entertaining luxury cruise passengers and appearing on stage in West End and Broadway musicals. Filipino designers and crafts persons have helped the country to be known as the ‘Milan of Asia’ in designer circles.”

The Arangkada Team—John Forbes and Froi Tajale—invited Cesar Tolentino and me a few weeks ago for a breakfast meeting on Creative Industries, to assess the present situation of this “winning” sector seven years later and to decide next steps.

The breakfast lasted more than two hours and we came to the conclusion that it would make good sense to arrange a Creative Industries Roundtable in February with industry players and other stakeholders to creatively drive this sector with enormous potential forward.

Cesar Tolentino outlined the potential the other day: “It is estimated that the global digital content industry could be worth as much as $1.96 trillion back in 2011 [according to a 2006 PricewaterhouseCoopers study], with a compound annual growth rate of about 6.4 percent. When projected, this could reach $2.78 trillion by 2017. In comparison, the global BPO [business-process outsourcing] industry in 2017 is estimated to be about $250 billion according to the IT-Business Process Association of the Philippines. So, in theory, the Philippines could grab as much as 10 percent of this market or about $278 billion.

The US Trade Department limits ‘digital content’ to video games, video on demand, e-publishing and digital music. They estimate the 2016 size of the industry to be at $89.5 billion.

These are the large companies

Henry J. Schumacher

europe Beat that are part of this industry: Tencent, Microsoft, Sony, Activision Blizzard, Apple, Google, Amazon, Facebook, EA, Netease, Nexon, Mixi, Warner Bros., Square Enix, DeNA, Zynga, NCSoft, Baidu, Deezer, Dish Network, Giant Interactive Group, Hulu, Nintendo, Reed Elsevier, Schibsted, Spotify, Wolters Kluwer, Konami, Ubisoft, Bandai Namco, etc.”

It is important to note that the Philippine Creative Industries can be/should be a driver of employment: The Unesco Creative Economy Report in 2010 cited that the Philippine Creative Industries contributed to more than 11 percent of total employment in 2009, or roughly equivalent to a 4 million work force in Creative Industries. The Philippine Creative Industries are demonstrating an ability to drive up employment in the country.

As agreed at the breakfast meeting, we will try to project the future at the roundtable and find try to find out whether our former extrapolation was correct: ‘Using trends that were noted for the period of 2008 to 2010, the Philippine Creative Industries could have reached $11 billion in revenues by the end of 2016. At the same time, employment in the sector could have reached nearly 5.7 million.’

With these projections—if true —the sector will be the next sunrise industry in terms of performance.

Our problem, however, is that this important sector is not fully known in the government and in the private sector. Luckily, the BusinessMirror is willing to help the sector and make the sector better understood and to spread the excitement; starting today, the Creative Sector will be featured in a weekly column.

Comments are welcome; you can contact me under Schumacher@mcasia.org.

Value of construction House panel OKs substitute bill banning conversion of farms sector’s output up A 31% in 2015–PSA

By Cai U. Ordinario @cuo_bm

T

he output of the construction sector increased 31.04 percent in 2015 on the back of the strong growth from the nonresidential sector, according to the Philippine Statistics Authority (PSA).

Based on the final results of the 2015 Annual Survey of Philippine Business and Industry (ASPBI), the construction-sector output reached P462.3 billion in 2015, from P352.8 billion in 2014.

“The bulk of output value generated by the top 3 industries was at P362.5 billion, or 78.4 percent of the total,” the PSA added.

Data showed the largest output was accounted for by nonresidential building construction projects with an output value of P200.2 billion, or 43.3 percent of the total.

This was a 57.02-percent increase from the output value of P127.5 billion of the sector, or 36.1 percent of the total in 2014. Further, PSA said the nonresidential building constructions led the sector with 433 firms, or 24.1 percent of the total.

In 2015 data showed there were 1,796 establishments engaged in construction in the formal sector of the economy. Apart from the nonresidential building constructions, the output of firms engaged in the construction of roads and railways reached P131.3 billion, or 28.4 percent of the total. This was a 20.13-percent growth from the P109.3 billion posted in 2014.

Firms engaged in the construction of residential building constructions reached P31.1 billion, or 6.7 percent. This was a 4-percent contraction from the P32.4 billion worth of output posted in 2014.

The ASPBI is one of the designated statistical activities of the PSA. Data collected from the survey provide information on the levels, structure, performance and trends of economic activities of the formal sector in the entire country for the year 2015.

The survey was conducted nationwide in 2016 with the year 2015 as the reference period of data, except for employment which is as of November 15, 2015.

substitute bill prohibiting the conversion of irrigated and irrigable lands for nonagricultural purposes is now inching its way to become a law this 17th Congress.

This, after the House Committee on Agrarian Reform chaired by Rep. Rene Relampagos of Bohol has approved at the committee level and endorsed for plenary approval an unnumbered substitute bill seeking to prohibit the conversion of irrigated and irrigable lands for non-agricultural purposes.

The measure seeks to address threats to food security in the country by amending the Comprehensive Agrarian Reform Law of 1988 (CARP) or Republic Act (RA) 6657, which was enacted to promote social justice, sound rural development and industrialization and encourage land owners to cultivate economic-size farms as the basis of Philippine agriculture.

The bill is one of the priority measures of the House of Representatives.

In 1996 Speaker Pantaleon D. Alvarez, one of the authors of the bill, said the World Food Summit defined food security as the state, “when all people, at all times, have physical and economic access to sufficient, safe and nutritious food that meets their dietary needs and food preferences for an active and healthy lifestyle.”

To achieve this goal, Alvarez said it is “indispensable” that sufficient land resources are protected and available in order to produce sufficient food for the nation.

One of the legal instruments designed to achieve food security is RA 6657, he added.

With this program, Alvarez said farmers are expected to own land which they can till to uplift their socioeconomic status, while providing adequate food for Filipinos.

However, the Speaker said the same law allows for the reclassification or conversion of agricultural land and its disposition should the land cease to be economically feasible and sound for agricultural purposes after the lapse of five years, or if the same has become more urbanized and will

An irrigation canal divides a huge tract of land planted with rice in Bulacan. Lawmakers are keen on banning the conversion of rice farms to ensure food security. NONIE REYES

be more economically valuable for residential, commercial and industrial purposes.

“As a result, prime agricultural lands, as well as irrigated or irrigable lands, have been adversely affected by rampant and unchecked conversions. This has led to a distributing threat not only against our country’s food security, but to the whole agrarian-reform program, as well,” Alvarez said.

Under the CARP, farmers are provided

opportunity to own land which they can tilt to improve their lot and provide adequate food for our countrymen.

The bill said a penalty consisting of imprisonment of six years and one day to 12 years, and/or a fine of P200,000 to P1 million shall be imposed for violations of the law.

Another objective of the bill is to curb corruption in the lower levels. Recognizing that elements within the government

bureaucracy may contribute to unchecked conversions, the substitute bill lodges the exclusive power of land conversion to Congress itself.

The bill would also enhance the ability of relevant government agencies to review and assess the status of agricultural lands on a nationwide scale, providing enhanced opportunity to fine tune policies on agrarian reform and food security.

Jovee Marie N. dela Cruz

Agriculture/Commodities BusinessMirror

www.businessmirror.com.ph

Editor: Jennifer A. Ng • Monday, January 8, 2018

A5

Farmers urged to use insect-resistant rice varieties

F

By Jasper Emmanuel Y. Arcalas

@jearcalas

ilipino rice farmers could avert incurring millions in losses caused by pests, particularly the brown plant hopper (BPH), by planting insect-resistant varieties, according to the Philippine Rice Research Institute (PhilRice)

PhilRice, an attached agency of the Department of Agriculture, said the BPH “wrecked havoc” across 18 provinces last year, resulting in P17.87 million worth of damages to the rice sector.

Citing PhilRice crop-protection expert Genaro Rillon, the Nueva Ecija-based agency said farmers should use high-yielding and BPHresistant varieties, such as PSB Rc2, 10, NSIC Rc 212, 222, 224, 226, 298, 300 and 30, to avoid production losses.

“He added that farmers in the community must also practice

synchronous planting with one- to two-month fallow period to break the life cycle of BPH,” PhilRice said in a statement.

Synchronous planting is important as it avoids continuous supply of food for pests, hence, preventing pest reproduction, according to PhilRice rice specialist Fredierick Saludez.

“It also helps minimize the use of harmful pesticides and conserve helpful organisms in the field,” Saludez said.

Saludez warned farmers that the excessive use of nitrogen andmisuse of insecticide attracts

and helps the BPH to multiply in rice fields.

“Following the recommendation based on the soil analysis can help farmers determine the ideal amount of nitrogen fertilizer,” he said. “Moreover, the use of the leaf-color chart can help them determine the right amount and time of nitrogen application.”

The BPH are sucking insects that usually feed on rice plants and are prevalent in Asean countries like Vietnam, Thailand, Indonesia and the Philippines.

“BPH damage includes turning

of rice leaves into brown or yellowish, drying or withering of plants and hopper burn. The BPH could also transmit viruses, such as rice rugged or grass stunt virus,” the PhilRice said.

“Their population peaks toward the harvest season, usually during the months of March to April for the dry season and September to October for the wet season.

The BPH thrive in any kind of ecosystem, especially in irrigated areas. They are usually found at the lower part of the crops attacking at any stage of rice growth,” it added.

Strengthening livestock sector to benefit small farmers–report

M

ore government attention to the Philippine livestock and poultry industry will be a big help to smallholder farmers and micro, small and medium-scale enterprises (MSMEs), and will boost the sector’s export potentials, according to a new report from a state-run think tank.

Amid a slowly decreasing trend in the production value of agriculture, the livestock and poultry subsector “presents a glimmer of light in local agriculture,” projected to continuously grow in the next decades, said the report, titled “Review of HighValue Agriculture in the Philippines with Comprehensive Subsectoral Focus: Livestock Industries.”

“Focus of development interventions in recent years [has] been on crops, particularly on the major grain staples. Shifting attention to more competitive and higher-value commodities like livestock would do much in enhancing the livelihoods of smallholder farmers, as well as MSMEs within the sector,” according to the paper published by the Philippine Institute for Development Studies (Pids).

The report pointed to statistics showing that the livestock and poultry industry has been consistently contributing positively to the economy even with less support from the government compared to other agricultural commodities.

From 1998 to 2016, the produc-

tion value of the combined livestock and poultry industries grew from P163 billion to P262 billion, with hog and chicken as the biggest contributors, according to the Pids paper.

“The contribution of combined livestock and poultry industry to country’s output is bigger than other agricultural commodities, although the sector is private driven with no or little support from the government,” the paper read.

“There are currently no direct financial infusions to the sector.

Furthermore, it was acknowledged that the private sector progresses with less help from the government, which probably [is] an indicator as to how good the industry is performing,” it added.

The report offers a number of recommendations to further improve the industry’s performance and competitiveness.

“Though the industry is privateled, there has to be a strong guidance and a functional enabling facility from the government. While the swine and poultry are big now, they could have been bigger and on a par with neighboring countries if only the government has done its part,” the paper read.

Suggestions from the private sector should also be seriously considered when crafting agenda, projects and programs. “Privatesector involvement is important in terms of having an inclusive way of dealing with a vast number

of stakeholders.”

“The public sector sometimes is very keen on looking at what it perceives is right or best for the sector, but the private sector is actually the one on the battleground facing the real threats and challenges,” the paper read.

The report also cited the need to focus on augmenting policy on land conversion, noting that the “policy encroaching on production areas disallowing production of poultry and swine is currently one of the main threats in the industry.”

“There should be an instruction for the local government to not hasten the conversion of land,” it added.

The paper highlighted the importance of biosecurity as a matter

of policy. “It was mentioned that one of our competitive edges compared to our Asean counterparts is that, we are able to maintain avian flu-free and FMD-free because of our geographic location.”

The cattle industry is currently surviving but prospects are a bit dim compared to the other subsectors. To invigorate this subsector, there is a need to create interventions, which can only happen through partnership between the government and private sector, according to the report.

Also, budget for the industry needs to be augmented, as the study noted that this is smaller compared to other agricultural products. PHILEXPORT NEWS & FEATURES

A6

The World

Monday, January 8, 2018 • Editor: Lyn Resurreccion

BusinessMirror

Facing dim prospects, Iran’s angry, frustrated working class fuels unrest

C

AIRO—The Iranian town of Doroud should be a prosperous place—nestled in a valley at the junction of two rivers in the Zagros Mountains, it’s in an area rich in metals to be mined and stone to be quarried.

Last year a military factory on the outskirts of town unveiled production of an advanced model of tanks.

Yet, local officials have been pleading for months for the government to rescue its stagnant economy.

Unemployment is around 30 percent, far above the official national rate of more than 12 percent. Young people graduate and find no work.

The local steel and cement factories stopped production long ago and their workers haven’t been paid for months. The military factory’s employees are mainly outsiders who live on its grounds, separate from the local economy.

“Unemployment is on an upward path,” Majid Kiyanpour, the local parliament representative for the town of 170,000, told Iranian media last August. “Unfortunately, the state is not paying attention.”

That’s a major reason Doroud has been a front-line in the protests that have flared across Iran over the past week. Several thousand residents have been shown in online videos marching down Doroud’s main street, shouting, “Death to the dictator!”

At night, young men set fires outside the gates of the mayor’s office and hurl stones at banks. At least two people have been killed, reportedly when security forces opened fire.

Overall, at least 21 people have died nationwide in the unrest so far.

Anger and frustration over the economy have been the main fuel for the eruption of protests that began on December 28, 2017.

President Hassan Rouhani, a relative moderate, had promised that lifting most international sanctions under Iran’s landmark 2015 nuclear deal with the West would revive Iran’s long-suffering economy. But, while the end of sanctions did open up a new influx of cash from increased oil exports, little has trickled

30%

The estimated rate of unemployment, which is far above the official national rate of more than 12 percent

A man carries car parts at a market in downtown Tehran on October 9, 2017. Anger and frustration over the economy has been the main fuel for the surprise eruption of protests that began on December 28, 2017. AP/Vahid Salemi

down to the wider population.

At the same time, Rouhani has enforced austerity policies that hit households hard.

Demonstrations have broken out mainly in dozens of smaller cities and towns like Doroud, where unemployment has been most painful and where many in the working class feel ignored.

The working classes have long been a base of support for Iran’s hard-liners. But protesters have turned their fury against the ruling clerics and the elite Revolutionary Guard, accusing them of monopolizing the economy and soaking up the country’s wealth.

Many protests have seen a startlingly overt rejection of Iran’s system of government by Islamic clerics. Under Iran’s Islamic Republic, in place since the 1979 revolution, the cleric-led establishment has considerable power over elected bodies like parliament and the presidency. At the top stands Supreme Leader Ayatollah Ali Khamenei, who has final say on all matters of state.

“They make a man into a god and a nation into beggars!” goes the cry heard in videos of several marches.

“Clerics with capital, give us our money back!”

The initial spark for the protests was a sudden jump in food prices. It

is believed that hard-line opponents of Rouhani instigated the first demonstrations in the conservative city of Mashhad in eastern Iran, trying to direct public anger at the president.

But as protests spread from town to town, the backlash turned against the entire ruling class.

Further stoking the anger was the budget for the coming year that Rouhani unveiled last mid-December, calling for significant cuts in cash payouts established by Rouhani’s predecessor, hard-liner Mahmoud Ahmadinejad, as a form of direct welfare. Since he came to office in 2013, Rouhani has been paring them back. The budget also envisaged a new jump in fuel prices.

But amid the cutbacks, the budget revealed large increases in funding for religious foundations that are a key part of the clerical state above the state, which receive hundreds of millions of dollars each year from the public coffers.

These foundations, including religious schools and charities, are tied closely to powerful clerics and often serve as machines for patronage and propaganda to build support for their authority.

As he announced the budget, Rouhani admitted his government had no say over large parts of the spending and complained about the

lack of transparency over the funds going to the foundations.

“They just take money from us,” he said. “If we ask, ‘Where did you spend the money?’ they say: ‘It’s none of your business. We spend it where we like.’”

Rouhani’s economic program has focused on trying to rein in government spending and build up the private sector and investment.

His policies have managed to pull inflation down from the high doubledigits where it long stood, edging it back to 10 percent last month.

After the lifting of most sanctions in early-2016, the economy saw a major boost—13.4-percent growth in the GDP in 2016, compared to a 1.3percent contraction the year before, according to the World Bank. But almost all that growth was in the oil sector, where exports jumped from around 1 million barrels per day in 2015 to around 2.1 million barrels per day in 2017.

Growth outside the oil sector was at 3.3 percent. Major foreign investment, which Rouhani touted as another benefit of opening to the world, has failed to materialize, in part because of continued US sanctions hampering access to international banking and the fear other sanctions could eventually return.

Iran’s official unemployment rate

is at 12.4 percent, and unemployment among the young—those 19 to 29—has reached 28.8 percent, according to the government-run Statistical Center of Iran.

The provinces “face more economic hardship,” wrote Brenda Shaffer, an adjunct professor at Georgetown University’s Center for Eurasian, Russian and East European Studies. “Income levels and social services in the periphery are lower, unemployment rates are higher, and many residents suffer from extensive health and livelihood challenges emanating from ecological damage.”

The pain has been felt in the capital, Tehran and other major cities, as well. But there it’s been more cushioned within a large middle class. Many can ignore those picking through trash for food.

However, in December 2016, Iranians, including Rouhani, expressed shock over a series of photographs in a local newspaper showing homeless drug addicts sleeping in open graves in Shahriar, on Tehran’s western outskirts.

“Things shouldn’t be so expensive that people have to cry out. It was because officials don’t care about people,” said one Tehran resident, Nasser Nazari, though he added that protests were not the way to react. AP

African-American jobless hit record low in December

W

ASHINGTON—Years of steady hiring and economic growth have delivered a cumulative benefit for at least one group that hasn’t always shared in America’s prosperity.

The unemployment rate for African-Americans fell to 6.8 percent last December, the lowest level since the government began tracking such data in 1972.

The reasons range from a greater number of black Americans with college degrees to a growing need for employers in a tight job market to widen the pool of people they hire from.

“The African-American unemployment rate fell to 6.8 percent, the lowest rate in 45 years. I am so happy about this News!” President Donald J. Trump said in a tweet last Saturday.

Still, the rate for black workers remains well above those for whites and some other groups, something experts attribute in large part to decades of discrimination and disadvantages.

Robust job creation has lowered unemployment for all Americans. US employers added nearly 2.1 million jobs in 2017—the seventh straight year that hiring has topped 2 million.

The US economy gained a hefty 5.7 million jobs in 2014 and 2015 alone.

But there are also less-happy reasons for the lower unemployment rates: Fewer Americans are either working or looking for work.

(People who aren’t actively seeking a job aren’t counted as unemployed.)

An aging population means there are more retirees. Young Americans are also staying in school longer before job hunting.

And some people, perhaps discouraged about their prospects, have given up looking for work and so aren’t included in the unemployment rate.

Here are some questions and answers about African-Americans’ record-low unemployment rate: n Given the record-low unemployment rates, is this the best job market ever for blacks?

Not necessarily. As with nearly all demographic groups, a smaller proportion of blacks have jobs now than before the Great Recession, in part because of retirements, more people staying in school and discouraged would-be workers.

The best job market for AfricanAmericans might actually have been

in 2000, when 61.4 percent of black adults were employed, the highest proportion ever. That figure fell below 52 percent in the depths of the recession, and is now 57.9 percent.

The same pattern occurred for other groups. Two-thirds of Latinos were employed in 2000; now, only 62.5 percent are. About 65 percent of whites were working in 2000, far higher than the current 60.4 percent.

(The data for Asians goes back only to 2003.) n Why is the African-American unemployment rate higher than the rate for whites?

The main reason is discrimination, according to most research. Valerie Wilson, director of the Economic Policy Institute’s program on race, ethnicity and the economy, notes that even when African-Americans have similar levels of education or experience, their chances of being unemployed are higher.

“That’s what begs the question of what else could be the major reason,” Wilson said.

Nancy DiTomaso, a business professor at Rutgers University, says her research has found that whites likely benefit from networks of family and

friends that don’t intentionally exclude blacks or other minorities. Yet, nevertheless, their networks have the effect of helping whites get jobs more readily than blacks. n What about other ethnic and racial groups?

Everyone is benefiting from the healthy job market. The unemployment rate for Latinos was 4.9 percent last December, just above the record low of 4.8 percent reached last June.

And the jobless rate for Asians was 2.5 percent last December, just above the record low of 2.4 percent set in 2006. n What factors have helped l o w e r u ne m p l o y m e nt fo r African-Americans?

One major reason, Wilson says, is that, many more black Americans are college graduates than in the past. That doesn’t completely offset the effects of discrimination. But among all groups, college graduates have lower unemployment rates than those with less education.

Another driver is economic: When the national unemployment rate falls to ultra-low levels, employers typically cast wider nets to find the workers they need. As they do so, they

typically start pulling in more people from historically disadvantaged groups. These include job-seekers with less education, as well as racial minorities.

With the current US unemployment rate at a 17-year low of 4.1 percent, that appears to be what’s happening.

Some economists want the Federal Reserve to hold off on raising the short-term interest rate it controls for exactly this reason: Raising that rate could slow growth just as the benefits of the economy’s expansion are spreading to disadvantaged groups. n Where might the unemployment rate for African-Americans go from here?

It depends on the economy.

Most economists expect healthy growth this year, fueled in part by the Trump administration’s tax cuts for individuals and companies. That should lower unemployment for all Americans.

The African-American unemployment rate is highly volatile and could rise or fall noticeably in the months ahead. It’s down from 7.9 percent a year ago. AP

www.businessmirror.com.ph

‘US open to talks with N. Korea at the right time’

P

resident Donald J. Trump said the United States was open to joining discussions with South Korea and North Korea at “the appropriate time,” and that he would be willing to speak directly with Kim Jong Un under the right conditions.

“Right now, they’re talking Olympics.

It’s a start. It’s a big start,” Trump said at a news conference at Camp David about talks expected on Tuesday between South Korea and North Korea. It would be “great for humanity” if something beyond cooperation in next month’s Winter Olympic Games resulted, he said.

When asked whether he would be open to talking with the North Korean leader, whom he has dismissed in Twitter messages and in a United Nations speech as “Rocket Man,” Trump said, “Sure, I always believe in talking,” adding that “he knows I’m not messing around, not even a little bit.”

Trump’s openness to talks recalled his more accommodating approach during the 2016 campaign, when he said he could negotiate with Kim over a hamburger.

More recently, however, he had dismissed diplomatic efforts, even publicly chiding US Secretary of State Rex Tillerson last October for “wasting his time” by pursing them.

Bigger button LAST August Trump vowed to unleash “fire and fury” if North Korea threatened the US and last Tuesday warned Kim on Twitter that his nuclear button was “much bigger and more powerful.”

Trump argued last Saturday that talks wouldn’t be possible without his tough rhetoric.

“These are constructive comments by the president,” said Nicholas Burns, a former undersecretary of state under President George W. Bush who’s now a professor at the Harvard Kennedy School. “It is essential that we remain united with Seoul and not permit Kim Jong Un to divide us.”

North Korea and South Korea remain technically at war more than six decades after open hostilities ceased, with more than 30,000 American troops and the US nuclear umbrella pledged to Seoul’s defense. Kim’s offer of reconciliation could strain that alliance by drawing South Korean President Moon Jae-in away from the United States bottom line.

‘Foreign powers’

Moon campaigned on greater engagement with North Korea and has since his May election affirmed his commitment to reunification through dialogue. He quickly accepted Kim’s New Year’s Day offer of talks, even though the North Korean leader also pledged to increase weapons production.

The Trump administration had said that Kim must at least pause his nuclearweapons program before talks would be considered. A commentary last Sunday published by the state-run Korean Central News Agency in Pyongyang described improved ties with Seoul as a “crucial matter,” departing from its usually dismissive tone toward the South. The commentary warned that “depending on foreign powers” risked complicating talks.

Still, both the United States and South Korea want no disruptions during the Olympics in Pyeongchang, about 50 miles (80 kilometers) from the heavily fortified border between the two Koreas. At Moon’s request, Trump delayed annual joint US-South Korean military exercises—long a source of consternation to the North—until after the Paralympic Games conclude on March 18.

Figure skaters

“The only thing they’re talking about in this discussion coming up, according to the South Koreans, who will be engaged in directing that, is the Olympics,” US Secretary of Defense James Mattis told reporters last Friday. “There’s nothing where they can drive a wedge at all.”

North Korean Olympic representative Chang Ung was expected to meet International Olympic Committee officials in Switzerland this week to discuss his country’s participation in the event, South Korea’s Yonhap News Agency reported, citing unidentified people.

Chang told reporters last Saturday at Beijing Capital International Airport that a pair of North Korean figure skaters were likely to compete, Japan’s Kyodo News reported. Bloomberg News

www.businessmirror.com.ph

The World BusinessMirror

Monday, January 8, 2018 A7

Trump says he’s ‘stable genius’; likes stronger libel laws

U

NITED States President Donald J. Trump said he’s a “very stable genius,” a day after a new book about the president’s first year in the White House—dismissed by Trump as “fiction”—claimed that many of his top aides and confidants consider him unfit to hold office.

“Throughout my life, my two greatest assets have been mental stability and being, like, really smart.

Crooked Hillary Clinton also played these cards very hard and, as everyone knows, went down in flames,” Trump said on Twitter early last Saturday.

Trump is at the Camp David presidential retreat in rural Maryland, where he held meetings last Friday afternoon and Saturday with top Republican lawmakers, White House aides and several Cabinet members, including Secretary of State Rex Tillerson and Defense Secretary Jim Mattis, on legislative goals for the year and other pressing matters.

In the tweets, Trump added that he’d gone from being a very successful businessman to top TV star “...to President of the United States [on my first try]. I think that would qualify as not smart, but genius...and a very stable genius at that!”

Trump defended his mental abilities at a news conference at Camp David last Saturday, recapping his path from the “best” university, where he said he was an “excellent” student, to a successful business and television career before pursuing politics.

Throughout my life, my two greatest assets have been mental stability and being, like, really smart.

Crooked Hillary Clinton also played these cards very hard and, as everyone knows, went down in flames.”

—Trump Dysfunction and chaos

White House Chief of Staff John Kelly, speaking to reporters on the sidelines, said he hadn’t seen the president’s latest tweets but that Trump feels he can use Twitter to get his perspective directly to the public.

The comments follow the release of Michael Wolff’s book, Fire and Fury, which details dysfunction, chaos and incompetence in the Trump White

crashes in 2017, and urged “Jail!” for Huma Abedin, a former top aide to Clinton.

In the same January 2 message, Trump assailed the “Deep State Justice Department”—the latest in a series of confrontational comments about the US law-enforcement agency.

The publication of Wolff’s book, initially via explosive excerpts focused on Trump’s former chief strategist Steve Bannon and in its entirety last Friday, sapped the momentum with which the president entered 2018 after the passage of a Republican tax overhaul bill in lateDecember.

Defensive mode President Donald J. Trump (left), accompanied by Senate Majority Leader Mitch McConnell of Kentucky (center) and House Speaker Paul Ryan of Wisconsin, arrives for a news conference after participating in a Congressional Republican Leadership Retreat at Camp David, Maryland, last Saturday. AP/Andrew Harnik

House—claims the administration has denied. Wolff said in an interview with NBC last Friday that “100 percent of the people around” the president question his intelligence and fitness for office.

“I consider it a work of fiction,” Trump said of the book at his news conference.

Physical scheduled

Trump, 71, is scheduled for a physical on January 12 at the Walter Reed National Military Medical Center in Bethesda, Maryland, consistent with the practice of previous presidents.

In his Twitter messages Trump said his detractors, including Democrats and the media, were shifting from stories about Russian collusion with members of his campaign team, which he’s repeatedly denied, to focusing on his fitness for office.

Those critics “are taking out the

old Ronald Reagan playbook and screaming mental stability and intelligence,” Trump told his 46 million Twitter followers.

Reagan, the 40th US president, disclosed in November 1994, almost six years after leaving office, that he’d been diagnosed with Alzheimer’s disease earlier that year.

He died in 2004.

The “stable genius” comment followed several days in which Trump, having returned to Washington on January 1 after spending the Christmas holidays at his club in Florida, produced a series of inflammatory and seemingly scatter-shot tweets.

‘Bigger’ button

LAST week alone he boasted about having “a much bigger & more powerful” nuclear button than North Korean leader Kim Jong Un, took credit for the absence of commercial plane

Instead of focusing on legislative priorities ahead of midterm elections last November, Trump and the White House spent the week in defensive mode. That included a public falling out with Bannon, since nicknamed “Sloppy Steve” by the president, and the dispatch of a cease-and-desist letter demanding that Wolff’s publisher, Henry Holt and Co. stop distribution of the book.

The company instead moved up the publication date by several days.

Last weekend’s retreat will be a chance to refocus. The White House late last Friday distributed photographs of Trump flanked by Senate Majority leader Mitch McConnell and House Speaker Paul Ryan at a working dinner, and holding court at a meeting with lawmakers, aides and Vice President Mike Pence.

McConnell, speaking beside Trump last Saturday, said 2017 had been the “most consequential” year for right-of-center Americans, largely thanks to Trump.

Last Thursday Trump on Twitter called the book “phony” and “full of lies, misrepresentations and sources

that don’t exist.”

He followed that at Camp David by saying Wolff’s interviews with him were “imaginary” and adding that he wishes US libel laws were stronger.

“Libel laws are very weak in this country. If they were strong it would be very helpful,” Trump said.

Wolff has been making the rounds to discuss his work. Wolff, whose previous books include a biography of media mogul Rupert Murdoch, said he stands by everything in Fire and Fury and has notes and recordings to back it up.

“They all say he is like a child,” Wolff told NBC. “What they mean by that is he has a need for immediate gratification. It’s all about him.”

“This man does not read, does not listen. He’s like a pinball, just shooting off the sides,” Wolff added. “They say he’s a moron, an idiot.”

“It’s absolutely outrageous to make these types of allegations” about Trump’s mental fitness, White House Press Secretary Sarah Huckabee Sanders said on Fox News last Friday. They’re “desperate attempts” to attack Trump, she said.

“What’s I think is really mentally unstable” is people not seeing the progress the president is making.

While the president said he never spoke to Wolff for the book, the author said he spoke to Trump during the campaign and after the inauguration. “Whether he realized it was an interview or not,” the conversations weren’t off the record, Wolff said.

Wolff said that his sources told him Trump repeats stories over an increasingly short time of period, and that he sometimes doesn’t recognize longtime friends.

Trump’s campaign released a letter from his doctor in September 2016, several weeks before the election, saying he was in “excellent physical health.” Bloomberg News

Saudi arrests 11 princes protesting over utility bills; king restores employees’ pay rise

S

audi authorities made a fresh round of arrests of royal-family members as a group of princes staged a palace protest in the capital over the nonpayment of their electricity and water bills.

Security services last Thursday arrested the 11 princes after they refused to leave Qasr Al-Hokm in Riyadh, Saudi Arabia Attorney General Sheikh Saud Al Mojeb said in an e-mailed statement.

The princes, who objected to a decree that ordered the state to stop paying their utility bills, will be held at al-Ha’er prison pending their trial, Al Mojeb added.

“No one is above the law in Saudi Arabia, everyone is equal and is treated the same as others,” Al Mojeb said. “Any person, regardless of their status or position, will be held accountable should they decide not to follow the rules and regulations of the state.”

Last November authorities swept

up dozens of Saudi Arabia’s richest and most influential people, including princes and government ministers, and detained them at the RitzCarlton in Riyadh.

The arrests were ordered by a newly established anticorruption committee, headed by Crown Prince Mohammed bin Salman. The prince’s anti-graft drive appeared designed to tap into a popular vein among young Saudis who are bearing the brunt of low oil prices and complaining, privately and on social media, that the kingdom’s elite were above the rule of law.

The princes arrested at the palace were also seeking compensation for a death sentence that was issued against one of their cousins, who had been convicted of killing another man and executed in 2016, according to Al Mojeb’s statement.

Earlier last Saturday, the Jeddahbased newspaper Okaz reported the princes had been arrested.

The Al-Ha’er facility south of Riyadh is one of Saudi Arabia’s maximum-security prisons. Many of Saudi Arabia’s Islamic militants who have fought abroad are held there.

Royal handouts cheer Saudis

Meanwhile, Saudi authorities said they’ll spend billions to help citizens offset the impact of a valueadded tax (VAT) and a surge in gasoline and utility prices, a move that will help ease public discontent while highlighting the kingdom’s struggle to overhaul its economy.

King Salman, in a series of royal orders early last Saturday, restored an annual pay rise for Saudi civil servants, suspended as part of attempts to rein in a hefty publicsector wage bill.

He ordered a 5,000 riyal ($1,333) bonus for soldiers fighting in Yemen and granted Saudis working for the state an extra 1,000 riyals a month as a “cost of living” allowance for a

year. The government will also pay part of newly introduced VAT. The measures will likely be cheered by Saudis who took to social media and television to criticize surging prices and the implementation of a 5-percent VAT on a wide array of products as of January 1.

Yet, they also show how the kingdom’s rulers are struggling to find a balance between the need to avoid unrest and take the difficult steps needed to reduce what policy-makers and economists see as an unsustainable reliance on oil revenue.

“This is a significant stimulus,” said Ziad Daoud, an economist at Bloomberg Economics in Dubai. “It’s good for 2018 growth, but raises lots of question-marks about the overall strategy.”

Some of those questions include how serious the kingdom is about making private-sector jobs more attractive to Saudis, and whether authorities are able to take

“necessary painful measures despite public outcry,” Daoud said.

Finance Minister Mohammed Al-Jadaan, appearing on state television to explain the reasons behind the price increases, struggled to keep up with repeated questions over the impact on citizens.

Calls for the return of annual pay increases for public-sector workers were persistently trending on social media. Two-thirds of Saudi employees work in the public sector.

It’s not the first time the kingdom has revised plans that form key parts of Crown Prince Mohammed bin Salman’s Vision 2030 plan to prepare the economy for the post-oil era.

Authorities had already announced plans to push the timeline for balancing the budget to 2023, instead of 2019 as originally envisioned, and said they’ll raise fuel prices more gradually. King Salman last year also reversed a decision to cut public-sector salaries

after public complaints.

The latest handouts will cost the state more than 50 billion riyals, Saud Al-Qahtani, an adviser to the royal court, said on his Twitter account. Some officials were also urging private-sector companies to follow suit by giving Saudi employees an allowance to offset rising prices.

Saturday’s royal orders also included: 500 riyals extra a month for retirees and social-benefit recipients 10-percent bump in student allowances. The government will bear the cost of VAT for citizens benefiting from private health-care and education services King Salman said he issued the orders after Prince Mohammed, his son and heir, explained that the recent measures “would increase the burden on some citizens,” according to the royal decree published by the official Saudi Press Agency.

Bloomberg News

Green Monday BusinessMirror

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Monday, January 8, 2018

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

Fighting climate change, one laundry load at a time

C

OPENHAGEN, Denmark—A Danish biotechnology company is trying to fight climate change—one laundry load at a time. Its secret weapon: mushrooms like those in a dormant forest outside Copenhagen.

Mikako Sasa collects mushrooms for Novozymes in Hareskoven, Denmark, on March 2, 2017. Carsten Snejbjerg/The New York Times

In the quest for a more environmentally friendly detergent, two scientists at the company, Novozymes, regularly trudge through the mud, hunting for oyster mushrooms that protrude from a fallen beech or bracken fungi that feast on tough plant fibers. They are studying the enzymes in mushrooms that speed up chemical reactions or natural processes, such as decay.

“There is a lot going on here, if you know what to look for,” said Mikako Sasa, one of the Novozymes scientists.

Their work is helping the company develop enzymes for laundry and dishwasher detergents that would require less water, or that would work just as effectively at lower temperatures.

The energy savings could be significant. Washing machines, for instance, account for more than 6 percent of household electricity use in the European Union.

Enlisting enzymes to battle dirt is not a new strategy. Over thousands of years, mushrooms and their fungi cousins have evolved into masters at nourishing themselves on dying trees, fallen branches and other materials. They break down these difficult materials by secreting enzymes into their hosts.

Even before anyone knew what enzymes were, they were used in brewing and cheese-making, among other activities.

In 1833 Frenc h sc ient ists isolated an enzyme for the first time. Known as diastase, it broke starch down into sugars. By the early-20th century, a German chemist had commercialized the technology, selling a detergent that included enzymes extracted from the guts of cows.

Novozymes and its rivals have developed a catalog of enzymes over the years, supplying them to consumer goods giants, such as Unilever and Procter and Gamble.

At the company’s low-slung 1960s-style campus, scientists in white lab coats and armed with miniature washing machines test new enzyme combinations on doll-size cutouts of clothing.

To test a product’s stain-fighting prowess, they import stain samples from around the world, such as greasy, blackened collars and yellow armpit stains.

Modern detergents contain as many as eight different enzymes.

In 2016 Novozymes generated about $2.2 billion in revenue and

provided enzymes for detergents, including Tide, Ariel and Seventh Generation.

The quantity of enzymes required in a detergent is relatively sma l l compared w it h chemical alternatives, an appealing quality for customers looking for more natural ingredients. A tenth of a teaspoon of enzymes in a typical European laundry load cuts by half the amount of soap from petrochemicals or palm oil in a detergent.

Enzymes are also well suited to helping cut energy consumption.

They are often found in relatively cool environments, such as forests and oceans. As a result of that low natural temperature, they do not require the heat and pressure typically used in washing machines and other laundry processes.

So consumers can reduce the temperatures on their washing

machines while ensuring their shirts stay lily white.

Lowering the temperature on a washing-machine cycle to cold water from 40 degrees Celsius (104 degrees Fahrenheit) reduces energy consumption by at least half, according to the International Association for Soaps, Detergents and Maintenance Products, an industry group.

“We think there are a lot of systems and processes in nature that are extremely resource efficient,” said Gerard Bos, director of the global business and biodiversity program at the International Union for Conservation of Nature in Switzerland. “In nature, there is basically no waste. Every material gets reused.”

In 2009 Novozymes scientists teamed up with Procter and Gamble to develop an enzyme that could be used in liquid detergents for cold-water washes.

Researchers started with an enzyme from soil bacteria in Turkey, and modified it through genetic engineering to make it more closely resemble a substance found in cool seawater. When they found the right formula, they called the enzyme Everest, a reference to the scale of the task accomplished.

“We knew this was something that consumers would want,” said Phil Souter, associate director of Procter and Gamble’s research and development unit in Newcastle, England. “I think this is a very tangible and practical way people can make a difference in their everyday lives.”

Next, they found a way to mass produce the enzyme. Novozymes implanted the newly developed product’s DNA into a batch of microbial hosts used to cultivate large volumes of enzymes quickly and at low cost. The enzymes were then “ brewed ” in large, closely monitored tanks before being sold.

The result: a crucial ingredient in detergents like Tide Cold Water.

“This is biotechnology on a very

We think there are a lot of systems and processes in nature that are extremely resource efficient.”—Bos

large scale,” said Jes Bo Tobiassen, the manager of a Novozymes manufacturing facility in Kalundborg, a small coastal city in Denmark.

As it researches new enzymes, Novozymes is trying to reach consumers in fast-growing economies, like China.

In much of the developed world, laundry habits are relatively entrenched. Europeans tend to use front-loading washers, which are far more efficient in energy and water use than the top-loaders favored in the United States.

But in China, members of the growing middle class like Shen Hang are upgrading washing machines and turning to more expensive, higher-quality detergents.

W h i le C h i nese consu mers are among the world’s most frequent and fastidious washers of clothes, according to Novozymes researchers, they are not as set in their ways.

Shen recently bought an efficient front-loading washer-dryer. But he has struggled to find a detergent that can get his sweatstained shirt collars clean.

“I’m kind of sick of that,” he said of manufacturers’ exaggerated claims.

He uses two types of bleach, one for white clothes and one for colored. If they do not work, he manually rubs the stains with his hands. He repeats that cycle three times a week.

Sensing an opportunity, Novozymes’s commercial teams have pushed the company’s scientists to create enzymes that would perform better in the bleach-filled washes favored in China.

The company has made progress. A newly developed enzyme named Progress Uno is being added to liquid detergents manufactured

by Liby, a Chinese company.

At this point, Chinese consumers mostly wash at low temperatures. But Peder Holk Nielsen, the chief executive of Novozymes, worries that could change as wealth in China grows. Consumers did the same in the West in the decades after World War II, Nielsen said.

But if, thanks to enzyme development, that transition can be avoided, that would be “a phenomenal sustainability story,” he said.

“It is going to save so much water, and so much energy.”

New York Times News Service

Nowhere to hide from climate change

T

OGORU, Fiji—The water is nibbling away the beaches of Fiji. Not even the dead are allowed peace of mind. The graveyard of Togoru—a village on the largest island of Fiji—has been submerged.

The waves are sloshing softly against the tilted tombstones covered with barnacles.

The names have become illegible, erased by the sea.

Bula! The Fijian greeting comes with surprise—no visitor ever comes this way. The village headman of Togoru was easy to find since only three houses are left of the village.

On the beach, James Dunn, 72, points to the drowned dead.

“The village was even further behind the graveyard. In 20 years’ time, the sea has moved in a few hundred meters. The house where I was born is gone.”

The patriarch remembers the graveyard being covered by the shade of the palm trees.

Today the trees are rotting in the surf.

The soil around the roots is being washed away, until they fall over. Tree by tree, the sea moves deeper inland. The fields have become unusable for agriculture due to salination. The remaining village often gets flooded at high tide.

“The waves knock on my door,” Dunn said.

The ancestors of Dunn are buried here, but he can’t visit their graves anymore.

His great-great-grandfather came all the way from Ireland to build this village. That explains his extraordinary name for a Fijian.

Five generations later, Dunn is probably the last headman of a village on the frontline against climate change.

Move or drown

Fiji and other South Pacific states are extremely vulnerable to rising sea levels.

Most islands are low and remote, poor and insignificant.

In the West, almost nobody cares. But the water has risen 25 centimeters on average since 1880, enough to wipe Togoru off the map. The village has already disappeared from Google Maps.

“The sea is stealing our land,” Dunn said.

“The beaches where I used to play as a child are in the water. We had horse races. That’s impossible now.”

Togoru has built five sea walls in the past 25 years. None could cope the force of the advancing waters.

If global warming is limited to 1.5 degrees, the sea level will still be another 50 centimeters higher. But even this most optimistic prediction spells doom for thousands of communities in vulnerable coastal areas.

From the beach of Togoru, the Fijian capital Suva is visible. “The prime minister came here to visit. He said we have to say farewell to our village. Luckily, he isn’t abandoning us,” Dunn said.

The government of Fiji recently published a list of 60 villages that need relocation. For a country with barely a million inhabitants, that’s a lot.

Anne Dunn, James’s niece, has also lost her roots in Togoru.

“Climate change to me means that we couldn’t bury my father and my uncle at our traditional burial grounds,” she said emotionally.

The young woman was crowned Miss Fiji and Miss Pacific Islands in 2016. Now she uses her voice in the battle against climate change. “It affects our identity. We are islanders, our unique way of living is being threatened.” The activist from Togoru was a guest speaker at the climate summit Conference of Parties 23 in Bonn, Germany, presided by Fiji.

The small island state has taken up an outsized role at the conferences on climate change of the United Nations. It speaks with a loud voice to get attention. The micro-state on the isolated archipelago doesn’t have the means to battle the advancing sea. Any help from outside is welcome. “Vinaka [Thank you].”

Monthly, more than 80,000 tourists come to the white beaches and colorful coral reefs.

But the resorts regularly have to level up their beaches.

Sugar is the second pillar of the Fijian economy under threat. A growing number of sugarcane fields are being destroyed by salination.

Extreme weather

A worker at the Novozymes plant in Kalundborg, Denmark, with bags of granulated enzymes, on February 7, 2017. Two scientists at Novozymes hunt for enzymes in mushrooms that help speed up chemical reactions. Carsten Snejbjerg/The New York Times

Fiji is responsible for only 0.01 percent of carbon-dioxide emissions. But it is being beaten relentlessly by the climate storm.

“When it was all over, everything was flat. I could see for miles.” said Malela Dakui, 53, the village headman of Rakiraki, who witnessed another phenomenon of climate change: extreme weather.

On February 20, 2016, Dakui hid under his table while wind gusts as strong as 325 kilometers an hour howled outside. Cyclone Winston blew away his roof, and his walls a few minutes later. The eye of the storm passed right over Rakiraki.

The coastal village had experienced cyclones before, but never one with the force of Winston. Miraculously, nobody got hurt in Rakiraki, but elsewhere 44 people lost their lives.

Winston was the most power ful cyclone ever to be observed in the southern hemisphere. It was also the most costly, at $1.4 billion, a third of Fijian GDP. Two years later, Rakiraki has not been completely rebuilt yet. The village looks like an outdoor construction fair. Between the destroyed houses there are many construction sites. Building materials and tools are everywhere. Since Winston, nobody wants to live in ramshackle huts anymore.

But solid houses are expensive.

“Bula!” Everywhere he goes, the playful village headman is greeted heartily. He knows Rakiraki inside out.

“Long before Winston, we sensed that the weather was changing,” Dakui explained.

Climate change applies to his plate. “We have less fish because the coral reefs are dying.

It has become too hot for taro, a popular vegetable. The farmers switched to cassava and sweet potatoes, but it doesn’t pay, as well.”

The consequences of climate change on the weather are undeniable, the village headman thinks. “The weather patterns are changing rapidly. The rainy season used to start every year on the same day. Now the seasons are broken.”

Since his house was blown away, Dakui knows more extreme weather is coming.

Nevertheless, he is lucky. Rakiraki is slowly being rebuilt. Other villages are lost forever.

A lost history

Climate refugees are not a new phenomenon in Fiji and Tukuraki is the unwanted champion of relocation. This village in the volcanic mountains of the Fijian interior had to move three times in five years.

In 2012 Tukuraki got hit by a landslide after extremely long rains. Ten months later the temporary shelters were destroyed by cyclone Evan. The third village was wiped away by Winston. The unfortunate homeless villagers moved to a cave for a while.

“For Fijians, land is the most important thing. It binds us. When we lost our land, we felt vulnerable and helpless,” said Livai Kidiromo, one of the village elders.

The fourth Tukuraki is now his final home. The new and disaster-resistant village was built with the financial support of the European Union. The modern dwellings can resist a category 5 cyclone, but offer no protection for the loss of their traditional way of living.

Bula! Apparently no other foreigner ever defied the difficult road to remote Tukuraki.

That adventure is rewarded with a traditional welcoming ceremony and lots of kava.

Men chew the root of the kava plant and spit the mush in a bowl with water. The brownish drink is lightly intoxicating. The chewers explain that the price of kava has doubled since Winston destroyed the fields.

The production hasn’t recovered yet.

The new village is on a plateau in the midst of an enchanting landscape. On the mountainside, the remains of the original village are visible from the new site. The jungle has retaken most of it. Only the church is intact.

“This village is much more comfortable than the old one. But we had to leave our past. That’s painful,” said Josivini Vesidrau, the young wife of the village headman, Simione Deru.

He misses his birthplace. “I never go there anymore. I have to cry when I think of it.”

Climate refugees are a reality not just for Fiji. Samoa, Tuvalu, Vanuatu and many other neighboring islands are under threat.

Kiribati is trying to prepare for its own demise, predicted for 2050. The government has bought 2,500 hectares of land in Fiji to relocate some of the 105,000 inhabitants when the last bits of dirt will be covered by water.

While the temperature rises and the storms strengthen, coastal residents have to choose: leave or fight. Dunn, the IrishFijian headman of Togo, had another look at the turquoise water and the remains of his family graves.

His cousin was cleaning up the garden for the Christmas party, maybe the last one.

“Togoru will disappear soon. And our history with it,” Dunn said. He doesn’t know yet where to go. “Fleeing is not an option.

Fiji is not big, you can’t keep on moving.” IPS

Biodiversity Monday BusinessMirror

Asean Champions of Biodiversity Media Category 2014

Monday, January 8, 2018 A9

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

Lurking in toilets, swimming the streets

Snakes of Bangkok move in B ANGKOK—Panarat Chaiyaboon was using the toilet in her downstairs bathroom last July when she felt a sharp bite on her thigh.

She jumped up to see a scene straight out of a nightmare: an 8-foot python emerging from her toilet.

She rushed to the hospital, bleeding heavily, and still bears the marks from eight tooth punctures that were around half an inch deep.

That snake was captured. But a week later, Panarat’s 15-year-old daughter found a second python in the same toilet. The daughter was so shaken, she went to stay with relatives.

It could be argued that snakes have always owned this corner of Thailand, and that the people of Bangkok are merely borrowing it from them.

The main airport, Suvarnabhumi, was built in a place, called Cobra Swamp, and the city itself took shape on the Chao Phraya River delta—a marshy reptile paradise.

But this year the Bangkok Fire and Rescue Department, which removes snakes from homes, has been busier than ever.

As of last week of November, the department had received 31,801 calls in 2017 for help in removing snakes. That is more calls than for all of 2016 (29,919), and more than three times the number in 2012 (10,492).

On one recent day, the fire department received 173 snake-invasion calls, versus five fire alarms.

“There’s no way we could survive if there were more fires than snakes,” said Prayul Krongyos, the department’s deputy director.

T he de pa r t me nt ’s f i g u re s don’t even include the many thousands of snakes that are killed or removed by residents on their own or taken from homes by volunteer handlers.

Most of the snakes rescued by firefighters are taken to a wildlife center and eventually released in the wild.

Prayul and the department are

nowhere near panic. One reason for the rising numbers is growing public awareness that firefighters can help remove snakes and other animals.

It has also been a wet year, even

by Bangkok standards. Heav y rains bring a surge in the number of snakes seeking refuge indoors.

Flooding can turn city streets into snake highways as the creatures are forced from their hiding places and swim for higher ground.

And as the city of more than 8.2 million people continues to expand into formerly wild lands, the number of snake encounters is rising. Most of the snake removal calls come from neighborhoods on the perimeter of the city where new housing is destroying what’s left of the creatures’ domain, Prayul explained.

“When people build houses in their habitat, of course, they will seek a dry spot in people’s houses because they can’t go anywhere else,” he said.

All reasonable explanations.

But casual discussion tends to end when it’s your toilet the snake is in.

“There are snakes everywhere!” said Kanok Praditkranok, Panarat’s husband. “They live beneath people’s houses, they live in holes, they live in the wilderness and in the ground. But they shouldn’t be able to enter people’s houses.”

The reality, though, is that humans cause snakes much more harm than the other way around.

Thailand has more than 200 snake species, including about three dozens that are venomous. But most do not pose a threat to people.

“Stories of snakes invading homes always sound scary, but as long as you don’t provoke them,

briefs Sanctuary on side of Mexican volcano could be universe model

MEXICO CITY—Mexican archaeologists say they have excavated a stone sanctuary in a pond on the side of a volcano east of Mexico City that may have been built as a miniature model of the universe.

The National Institute of Anthropology and History says the remnants of the stone “tetzacualco” were in the center of a natural pond below the Iztaccihuatl volcano at an elevation of nearly 13,000 feet.

In addition to the sanctuary, decorative pieces associated with the rain god Tlaloc were found nearby.

Archaeologist Iris del Rocio Hernandez Bautista says some Mesoamerican creation myths hold that the Earth monster Cipactli floated on primeval waters and then split itself, thus creating the heavens and Earth. She says the site at Nahualac could emulate that idea. AP

Brazilian environmentalists studying deaths of dolphins

Surapong Suebchai, a firefighter and snake-handling trainer, demonstrates how to capture a king cobra at a fire station in Bangkok on November 23, 2017. As the sprawling city of more than 8.2 million people continues to expand into formerly wild lands, the number of snake encounters is rising. Amanda Mustard/The New York Times

When people build houses in their habitat, of course, they will seek a dry spot in people’s houses because they can’t go anywhere else.”

—Prayul they won’t hurt you,” Prayul said.

“There are only a few cases where snakes come into people’s houses and hurt them.”

In Bangkok, where garbage bags often pile up on sidewalks awaiting collection, snakes perform a public service by catching rats and other vermin.

“Snakes are among the most misunderstood animals in the world,” said Nonn Panitvong, a leading expert in biodiversity.

“People are af ra id of sna kes and don’t take time to identify them. In Thailand they just kill the snakes.”

To keep the animals from being needlessly slaughtered, Nonn helped set up the “Snake at Home” message group on the popular Line phone app.

People who encounter a snake can send a photo to the group’s volunteer experts and get an immediate reply on whether it is venomous.

“We can give them instant answers so maybe the snake will live,” said Nonn, who last August was named Thailand’s first Asean Biodiversity Hero, a new award created by the Association of Southeast Asian Nations to honor conservation advocates.

Started this year, Snake at Home has 29,000 followers and receives nearly 30 identification requests a day.

The identification service also has helped save a number of humans. Doctors make more than half the identification requests in the hope of learning whether a snake

that bit a patient was venomous and, if so, which species, so they can use the correct antivenom.

“In Thailand homes continue to expand into the natural environment, so there will be always more snakes in the homes,” Nonn said.

After the second python appeared in Panarat’s toilet, the family discovered that the soil under their five-year-old house had subsided and that there was an opening in the sewage pipe large enough for a big snake to enter.

The family fixed the problem and has not seen a python since.

Despite the widespread fear of snakes in Thailand, an encounter with one is considered by many to be a sign of good luck.

Panarat, who told her story on Facebook and posted photos of the captured snake, received half a dozen inquiries from people asking for her house number so they could use it when buying lottery tickets.

One relative wrote on her page, “There’s an old saying that if you encounter a snake, you will meet your soul mate.”

Panarat jokingly replied, “I’d rather be a widow.”

New York Times News Service

SãO PAULO—Environmentalists in Brazil say they are trying to figure out why more than 80 gray dolphins have died in less than a month on the coast of Rio de Janeiro state.

A statement from the Gray Dolphin Institute says the dolphins died over past 17 days in the Bay of Sepetiba, a coastal district about 70 kilometers (45 miles) west of the city of Rio de Janeiro. The institute is a nongovernment organization that monitors and strives to protect the dolphins.

The institute says it has retrieved five dead dolphins a day from the bay but what has caused their deaths is still unknown. Lab tests are being conducted and the results are expected by the end of the month. AP

Scientists find 4th frozen shark near Cape Cod shore

WELLFLEET, Massachusetts—A shark conservation group says a fourth thresher shark has been found frozen off the coast of Cape Cod. Atlantic W hite Shark Conservancy Program Director Michelle Wcisel tells the Cape Cod Times the shark carcass was discovered New Year’s Eve in an ice pack near Wellf leet. Wcisel says rough conditions stopped researchers from recovering it.

T hree ot her sha rk s wa shed ashore last week. Authorities believe all the sharks succumbed to cold shock. Cape Cod Bay’s surface temperature sank to 41 degrees last week. Scientists believe thresher sharks are impaired when exposed to waters below 44 degrees. AP

The strange origin of a manakin’s golden crown The buzz in Denver: Broncos host to 100,000 honeybees T T hree related species of manakins occupy adjacent parcels of the Amazon rain forest: opal crowned, snow capped and golden crowned. They are all plump like sparrows, small enough to cup in a hand and have radiant yellow-green upper bodies with golden undersides.

Biologists are now unlocking the mystery of how these neighboring birds became distinct species.

Last week , a team of scientists confirmed in Proceedings of the National Academy of Sciences that the goldencrowned manakin is a unique hybrid species that emerged from a cross between the opal-crowned and snow-capped manakins about 180,000 years ago.

Though one - off mating events between different species occur across the animal kingdom—think pizzly bears, occasional crosses between polar and grizzly bears—the establishment of an entirely separate hybrid species is thought to be relatively rare.

For a new species to occur, it has to become reproductively isolated, or form a stable population that no longer freely mixes with its parent species, said Alfredo Barrera-Guzmán, who led the new research as a doctoral student at the University of Toronto Scarborough.

Opal- crowned manakins wear an iridescent toupee, evocative of a unicorn’s mane. Snow-capped manakins are topped

a Golden-crowned manakin Wikimedia Commons

with bright glacial patches. And members of the hybrid species, the golden-crowned manakin, display a burst of yellow to match their bellies.

Choosy females prefer the particular color sported by males of their own species, leading to reproductive isolation.

Hybrids often look like an intermediate between their parent species, which made scientists skeptical that you’d get a goldencrowned manakin by crossing opal-crowned and snow-capped manakins.

To settle the mystery, Barrera-Guzmán

and his colleagues sequenced much of the golden-crowned manakin’s genome and confirmed that it has a blend of DNA from the other two species.

The scientists then examined feathers from the heads of golden-crowned males under an electron microscope. They found that the manakin’s warm crown comes from pigments called carotenoids, which the birds get from their diet. When chemically stripped of these pigments, the feathers turned grayish-white.

Barrera-Guzmán’s team suspects that the

first male mixes between snow-capped and opal-crowned manakins bore this dull tuft, an intermediate between the white and iridescent caps of their forebears.

During the last ice age, the Amazon rain forest shrunk and possibly cut some hybrids off from their parent species— the golden-crowned manakin’s habitat today is separated from snow-capped and opal-crowned territories by rivers and mountains.

As the hybrids evolved in this segregated space, females may have preferred to mate with males that had a higher concentration of carotenoids in their crown, producing an attractive yellow blaze, said Jason Weir, an associate professor of evolutionary biology at the University of Toronto Scarborough and senior author of the new paper.

Hybridization is sometimes seen as reducing biodiversity, because it can merge distinct species together. But as genetic sequencing improves, scientists will likely discover more instances of hybridization generating new life-forms. Just this fall, scientists announced the discovery of a hybrid finch in the Galápagos that is in the process of becoming a new species.

“Hybridization is a double-edged sword,” Weir said. “It can erode diversity, but it can also be a creative force.” In the case of the golden-crowned manakin, it even created a new head of gold.

New York Times News Service

hat wasn’t always the case. But when the team more than doubled the landscape at its headquarters, Brooks Dodson, the club’s director of sports turf and grounds, noticed something: Flowers weren’t growing.

It was time to draft a swarm of new players.

“I just noticed there wasn’t a lot of bees on our property,” Dodson said.

A friend in the same line of work in a Denver suburb mentioned that he had met a couple of beekeepers.

So Dodson visited Joe and Debbie Komperda. The beekeepers, whose business card reads “Bee Happy,” were eager to help out their beloved Broncos by building them a bee yard north of their indoor practice facility about 100 yards from the practice fields.

Debbie Komperda built four beehives, each painted orange and blue and each unique so the bees know which home is theirs.

It’s believed the Broncos are the first professional sports team to ser ve as beehive hosts.

Joe Komperda said it’s a win-win: The Broncos get the benefits of hosting hives, while the honeybees get a chance to thrive at a time when so many colonies are inexplicably dying, a phenomenon known as colonycollapse disorder.

“There’s a lot of people who want to

make sure that we can support the bees,” Joe Komperda said. “And the Broncos being a good corporate citizen and looking out for the environment, when they realized that their flowers weren’t doing well and they needed more bees...we were able to come up with an agreement that the Broncos will be a hive host.”

Between 20,000 (winter) and 100,000 (summer) bees now buzz around the four beehives. They pollinate plants as they gather nectar and pollen from a 3-mile radius, and they generally stay away from the players except for the occasional visitors drawn to the Gatorade bottles.

“So that’s why there’s bees at practice all the time,” linebacker Todd Davis said, laughing. “That explains a lot.”

Another benefit is that, some of the honey the Komperdas harvest gets used by the team’s chefs in the Broncos cafeteria.

“That’s really cool,” Davis said. “It’s kind of like that farm-to-table aspect. I think that’s really cool having fresh honey here.”

The Komperdas maintain the hives and take care of the bees year-round.

“We try to keep them well and try to make sure that they’re out there pollinating flowers,” Joe Komperda said. “And while they’re not pollinating crops, so to speak, right here, they’re still making a difference to the environment.” AP

A10 Monday, January 8, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

www.businessmirror.com.ph

editorial

Stop the fires now

M

ost of the unfortunate situations in life, ranging from the personal to the national, can be diminished in two ways—prevention and cure. We try to prolong the quality of life through a healthier lifestyle. But when disease does strike, we want the best medical care possible to cure our illness.

The problem is that, humans tend to be lazier about the prevention side of the equation and more proactive about the cure for too many situations. Part of the reason is that, we can see immediate results from solving problems than we can from preventing them from happening in the first place.

There might be no more frightening man-made disaster than a building on fire. We see instances of a fire starting in one hovel in a densely packed area, leaping from house to house wiping out the belongings of hundreds and leaving them homeless and more destitute.

However, the greatest number of casualties and fatalities occur in buildings that are considered modern and safe. The Grenfell Tower fire broke out on June 14, 2017 at the 24-story Grenfell Tower in West London, killing 71 people. The worst hotel fire in Philippine history, the Manor Hotel fire, claimed 75 lives in 2001. A low-rise apartment building burned last December 29 killing two elderly friends in Brooklyn, New York.

Then we have situations of negligence where safety standards appear to have been completely ignored as in the cases of the Ozone Disco Fire in 1996 that killed 162 and the most recent Kentex Manufacturing fire in Valenzuela that took the lives of 74 people.

The most frustrating incidents of this nature, which cause outrage and anger are those that happen in places that should be safe by any definition. The recent shopping-mall fire that killed 37 in Davao City at the four-story NCCC Mall at 9:30 in the morning is a prime example.

After we heard Senior Supt. Jerry Candido, spokesman for a task force investigating the fire, saying, “We also found out that the NCCC [mall] fire alarms and sprinkler system [were] not automatic but on manual setting at the time,” we can say this is a crime, not an accident.

Yet, while we are still mourning the victims in Davao City, another fire breaks out at Metro Ayala Mall in Cebu Business Park. While there were no reported casualties, there is always the unspoken question of “what if...?”

Acknowledging that our firefighting capabilities—the “cure” for these situations—are not nearly as good as they should or could be, then we must substantially increase prevention under penalty of harsh punishment.

The traditional water-sprinkler system—activated by high heat— used in most buildings was invented in 1890 and is still in wide use today. But this is not sufficient in an age where both the building materials and contents in office buildings and malls release deadly toxic fumes during a fire.

The technology for fire suppression using gaseous clean-agent systems and inert-gas systems are now state of the art and tailored exactly for the type of building or business from a restaurant to an office like a call center. It is ridiculous and obscene that national law does not require these modern methods.

The argument is that, the additional costs are not completely justified since fires, such as the one in Davao City are infrequent. On a purely monetary basis, what would have been the lifetime economic contribution of the 37 young people who died in Davao? The time for excuses is over. The time for the legislature to step up is now.

A closer look at TRAIN Atty. Jose Ferdinand M. Rojas II

RISING SUN

U

nder the new Tax Reform for Acceleration and Inclusion (TRAIN) Act, or Republic Act 10963, which is being implemented starting 2018, employees who are receiving monthly salaries will start enjoying bigger take-home pay amounts because income-tax rates are lower under the new tax law.

A popular provision under TRAIN is the tax exemption for those who are earning P150,000 annual taxable income (P12,500 monthly).

For the rest who will be enjoying higher take-home pay amounts, here is an illustration. Those who are getting P10,000 in salaries a month will stand to gain an additional P620 in take-home pay. Employees

The solo parent Atty. Lorna Patajo-Kapunan

legally speaking

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receiving P50,000 monthly will be able to bring home an additional P5,000; those getting P100,000 will have an additional P7,000 to spare; for earners getting P150,000 monthly, an additional P8,200 cash will be added to their take-home pay; and those with salaries of P200,000 will receive P8,463 more, and so on.

Many salaried employees are

W

hen a child is asked in school to draw a family—the picture would invariably include a father, mother, brother(s), sister(s) and sometimes a pet, under a house with a roof surrounded by petalled flowers or coconut trees. This is a child’s concept of a family. In fact, this is most everyone’s concept of a family. And there lies the core of the problem of the “solo parent”.

Until November 7, 2000, with the enactment into law of Republic Act (RA) 8972, known as the “Solo Parent’s Welfare Act of 2000,” the “family” as a unit did not conceive a solo parent with children. RA 8972 now provides that family shall refer to the solo parent and his/her child/children. A solo parent is any individual who falls under any of the following categories: n A woman who gives birth as a result of rape or crimes against chastity even without a final conviction of the offender: Provided, that the mother keeps and raises the child; n Parent left solo or alone with the responsibility of parenthood; a. Due to death b. While the spouse is detained, or is serving sentence for a criminal conviction for at least one year; c. Due to physical and/or mental incapacity of spouse as certified by a public medical practitioner; d. Due to legal separation or de facto separation from spouse for at least one year; Provided, that he or she is entrusted with the custody of the children; e. Due to declaration of nullity or annulment of marriage as decreed

by a court or by a church; Provided, that he/she is entrusted with the custody of the children; f. Due to abandonment of spouse for at least one year; n Unmarried mother/father who has preferred to keep and rear her/his child/children, instead of having others care for them or give them up to a welfare institution; n Any other person who solely provides parental care and support to a child or children provided he/she is duly licensed as a foster parent by the Department of Social Welfare and Development (DSWD) or duly appointed legal guardian by the court; n Any family member who assumes the responsibility of head of family as a result of the death, abandonment, disappearance or prolonged absence of the parents or solo parent; Provided that such abandonment, disappearance or absence lasts for at least one year. (RA 8972, implementing rules and regulations [IRR], Article III, Section 6 [b]).

“Children” refers to those living with and dependent upon the solo parent for support who are unmarried, unemployed and below 18 years of

happy about this development as the extra money may be set aside as savings, invested or used for regular expenses. On the other hand, others believe that the additional money will only be used to cover for the increase in the prices of goods, following increases in the cost of petroleum products. Many argue that informal income earners, older citizens without pension and those self-employed Filipinos who earn very little are going to be on the losing end of the new tax-reform law.

They will gain nothing—no increase in take-home pay—yet will have to pay for all the price increases in basic goods.

Take, for instance, the case of a vendor who has a small vegetable stall in the local marketplace.

She may already be struggling to pay for her family’s expenses or sending several children through school with her meager income.

But since she is not a salaried

employee, the lower tax rates that are in effect now are of no benefit to her. Yet, she will have to stretch her already limited budget to cover for the increases in fuel/ petroleum/gas prices and the subsequent rise in basic commodities.

This is only one of the economic challenges that regular folks stand to face this year.

The new tax-reform policy has been signed into law and is being implemented at the beginning of this new year. Whether you consider yourself a gainer or loser in the context of TRAIN, the reforms are certainly happening and adjustments will have to be made to maximize the benefits and cut losses, as necessary.

Minimize spending on products and services that are more expensive this year, and use any extra income to add to your savings or investment portfolio. Flexibility and resilience will definitely go a long way at this crucial time.

age or even 18 years and above but are incapable of self-support and/or mentally and/or physically challenged (IRR, Section 6 [e]).

A comprehensive package of social development and welfare services for solo parents and their families is required under RA 8972 to be developed by the DSWD and other specified government agencies, in coordination with local government units (LGUs) and non-governmental organizations.

This package shall include livelihood development services, counseling services, parent-effectiveness services, critical-incidence stress debriefing to assist solo parents in coping with crisis situations and cases of abuse, and special projects for individuals in need of protection (IRR, Section 15).

Employers are mandated to provide for a flexible work schedule for solo parents provided that the same shall not affect individual and company productivity. For employees in the government service, flexible working hours will be subject to the discretion of the head of agency (Section 16). No employer shall discriminate against any solo-parent employee with respect to terms and conditions of employment (Section 17). In addition to leave privileges under existing laws, parental leave of not more than seven working days every year (noncumulative) shall be granted for at least one year of service rendered (Section 18).

In addition, the Department of Education, Commission on Higher Education and Technical Education and Skills Development Authority shall provide scholarship program or nonformal education programs for solo parents and their children (Section 22). Solo parents who meet the eligibility for housing assistance shall be provided with liberal terms of payment on government lowcost housing projects, prioritizing

applicants below the poverty line (Section 23). The Department of Health (DOH) is, likewise, mandated to develop a comprehensive health-care/ medical-services program for solo parents and their children through DOH retained hospitals and health units of LGUs (Section 25).

To avail yourself of all the foregoing benefits, the solo parent must be (1) a resident of the area where the assistance is sought as certified by the barangay captain and (2) with an income level equal to or below the poverty threshold as set forth by the National Statistical Coordination Board and assessed by a social worker (Section 8).

The Solo Parents Welfare Act of 2000 is a good law. But I have spoken before several barangays and met quite a considerable number of solo parents who complain that the law is not being implemented, either because of ignorance or incompetence at the barangay/LGU level, or because of lack of budget/resources of implementing agencies at the national level or because of lack of penal provisions in the law to jail and/or fine employers who violate.

There will be a surge in the number of solo parents in the coming years. A mother or father left alone with the responsibility of parenthood because the spouse had to seek employment abroad as an overseas Filipino workers for lack of jobs in this country; or a spouse widowed because of an extrajudicial killing or violent extremism; or a rise in the number of annulment or declaration of nullity of marriage cases or legal separations; or young girls impregnated as a result of rape or wanton sex.

It is time that we truly recognize that a solo parent is not half a parent.

He/she bears the burden of the whole family and the full responsibility of parenthood.

www.businessmirror.com.ph

Opinion

Homecoming

PPP Conversations No. 11 with PPA GM Jay Santiago

BusinessMirror

By Alberto Agra

Filbert Tsai

PPP Lead

DEBIT CREDIT Conclusion

E

ver since I graduated from the university, I knew that I wanted to be a consultant—either employed or self-employed. My work as an auditor in the Philippines did not contribute anything to that goal. My standing offer allows me to join a finance and accounting consulting practice in one of the big names in finance—taking this offer would be much more in line with my plans.

I am not saying that staying in the Philippines doing audit would not contribute to my career growth.

What I am saying here is that, moving overseas, especially in the United Kingdom, would allow me a better exposure to more mature capital markets and business practices, which are not readily available in the Philippines.

People who have worked in professional service companies in the Philippines or even anywhere in Asia know how much we exert so much effort and incur so much stress while working. It’s not something that I fancy doing longer or doing more than three years—enough is enough.

I cannot waste much more of my life working from 10 a.m. to the following morning, seeing the sun rising for another day.

Did I regret my move from a promising Philippine career to a new and untested grounds in United Kingdom? Definitely a big no. Moving to the United Kingdom is the best step that I took in my career. I got to work with the best teams, large clients and complex transactions.

It was a challenging move for me, since I was so used to the culture in the Philippines and had to adjust to the new British environment. In the UK, it was challenging to start conversation about the weather every day. Short talks with my colleagues become quite a grueling morning task as I meet people in the pantry.

However, living alone for me is nothing different from the Philippines, since I am so used to being independent. I like living away from home and, as such, being on my own in a faraway land seems like a blessing to me. My move to the UK brought me quite a hefty amount of learning that I won’t be able to get back home.

I’ll not dwell about what I’ve learned in my work—rather, the intangibles that I’ve got working overseas.

Initially I thought that the worklife balance in the United Kingdom is just fantastic. I worked from 9 a.m. to 5 p.m. flexibly and can work from wherever I want. It’s the ideal world.

When I went back to the Philippines to do a bit of work, I realized that we stay long in the office everyday not because we’re actually working—we spend more time enjoying lunch, taking intermittent breaks, having

long chats in the pantry, texting messages and feasting on a grand dinner.

Actually, we’re actually working less than eight hours a day.

All members of my audit team in the Philippines are Certified Public Accountants (CPAs) and graduated Bachelor of Science in Accountancy.

I note that these CPAs are proficient in the purely technical accounting matters, but oftentimes lack the well-rounded knowledge on business from different perspectives I used to think that CPAs needed a full five-year formal accounting training to be able to do our job properly. But I have now realized that this is not the case. Most of the people that I have worked with in the UK are graduates of various courses—from geology to math to classical music.

They bring a wide body of knowledge from what they’ve learned at universities, while they learned their accounting while working.

Probably the biggest change for me is that I became a lot more mature resulting from my work overseas. I had to make friends with foreigners, adapt to their culture and change the way I lived. Moving overseas compelled me to become accountable and to stop complaining about petty matters knowing that it won’t change anything in my life.

Without all the experiences that I had overseas working on large consulting projects and project finance, I would not probably have started my blog, “Ask The Accounting Advisor.” This blog is about my personal thoughts on my professional journeys in life. It can be more exciting or less exciting but, at the end of the day, it’s your adventure—make it count.

Right now, I am back home. In a few more weeks, I will continue my professional journey as I start the operations of my firm, UpSmart Consulting Inc. Filbert Tsai has his own consulting firm, UpSmart Consulting Inc. His key areas of interests are start-ups and micro, small and medium enterprises (MSMEs). His blog and page, “Ask the Accounting Advisor,” provides relevant insight for start-ups and MSMEs in the Philippines.

This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@gmail.com.

Continued from A1

P

PA has its own PPP guidelines. PPA Administrative Order 03-2016 institutionalizes greater private sector participation (PSP) in the management and operations of ports. The current leadership in PPA, led by General Manager Jay Santiago, vigorously continues the PPA PPP/PSP legacy. He shares his thoughts in PPP Conversations.

What is your concept of PPP? PPA’s PPP framework is anchored on its Charter and supports the exercise of its regulatory and developmental functions. This framework comprises the following modalities: build-operate-transfer; joint ventures; and port real-estate leasing.

The privatization of the major ports has resulted in enormous improvement in the quality of services, not to

mention the immense contribution that these terminals make to PPA’s revenue.

What makes PPP a viable and preferred development strategy for ports?

As a policy, priority is given to private-sector financing whether it be for the purpose of establishing a private commercial port or as an investment in government ports. PPP

Happy socks Siegfred Bueno Mison, Esq.

THE PATRIOT

W

earing happy socks—colorful, patterned, sometimes outlandish socks—is back as a fashion trend. I have been given quite a few pairs this past holiday season and have since then been wearing them as often as I can. My nephews and nieces from the United States seem to enjoy seeing their 50-year-old uncle proudly wearing them. Seeing those socks reminds me of the freedom and joy of being different and expressive of my true personality.

As a son of a disciplinarian father and a sibling to a stern brother, I have been accustomed to projecting seriousness. And so, I have been told, some of my colleagues are intimidated by me at work. In my law class, most of my students fear me.

In contrast, my horoscope (Pisces) says I should be a happy and funloving person. Contrary to what others think, I believe I am a joyful person. Family and close friends can attest that I would garner a high rating in any “fun scale” if ever there was one. Family members consider me as the “joker” in the Mison clan.

So, how can a colorful sock make a person happy?

The secret, I believe, is in its color.

I have yet to see happy socks that are not colorfully bright. During the Philippine Airlines (PAL) Christmas Party last month, the theme was “Makulay na Pasko.” Employees performed various dances common during fiestas, such as the Sinulog, Maskara and Ati-Atihan. The panel of judges, which included two

foreigners, were quite impressed with the array of colors present during the performances. All of them were bright, happy and representative of the tourism slogan, “It’s more fun in the Philippines.”

My doctor friend Jojo Bernardo always says, “Count your blessings.” And these blessings come in assorted colors. A color is a very powerful tool used to provoke thoughts. Based on research on color psychology, the color red can represent passion, heat and love, as the color red is often seen during Christmas and Valentine’s Day. My favorite color, yellow, can mean optimism, happiness and hope, as yellow is associated with spring and sunshine. Green is generally associated with nature, good luck, and generosity; whereas blue symbolizes peace, harmony and unity.

In contrast, white is associated with reverence, virginity and cleanliness; while black usually symbolizes fear, evil, grief and death.

PAL Vice President for Sales

China hasn’t won the Pacific (unless you think it has)

By Hal Brands Bloomberg View

I

S China destined to dominate the Asia-Pacific region? Among United States allies and partners in the region, there seems to be a growing doubt that America can win the ongoing competition for influence with China, and that they must begin preparing for a regional order headed by Beijing. The challenge for America, then, is to ensure that this feeling of strategic fatalism doesn’t become a self-fulfilling prophecy.

It is an undeniable fact that China has been making a concerted and accelerating push for regional supremacy in recent years—and that the US has struggled to respond effectively. The military balance of power has shifted considerably over the past two decades, as Beijing has undertaken a military buildup of historic proportions, and America’s efforts to counter it were undercut first by a lengthy military involvement in the Middle East and then by budgetary austerity and defense cuts.

As a RAND Corp. study published in 2015 warned, the regional balance is reaching a series of “tipping points” at which the US might find it increasingly difficult to defend allies and partners, such as Taiwan, from determined Chinese intervention at an acceptable price.

China has also been expanding its regional influence through incremental steps that have cumulatively had a major effect: coercing its neighbors in the East China Sea and South China Sea, building and militarizing artificial islands in contravention of international law, seeking to separate the US from its allies through a mixture of coercion and economic inducement, and so forth. Such salami-slicing tactics are inherently difficult to counter, because they shift the status quo without escalating matters to a level that might set off a US military response. During the Barack Obama presidency, United States officials were often stymied by this predicament, warning against Chinese expansionism but struggling to identify measures that might thwart or even significantly penalize that expansionism absent a full-on

military showdown.

The result of all this has been a dramatic shift in perceptions of power and momentum in the region, raising the question of whether the US can meet the Chinese challenge. While much of this concern is still being expressed privately, behind closed doors in the capitals of America’s allies, it is also seeping, gradually but unmistakably, into public debates.

Case in point is a recent essay by Hugh White, a former Australian defense official who turned heads in 2013 by arguing that America should “share power” with China as part of a new great-power concert in the Asia-Pacific. White has now reentered the fray with a widely read essay arguing that it may be too late for even that type of compromise arrangement given China’s ongoing ascent.

China is determined to push the US out of the region, White argues, and it is making great progress. Unless Washington is willing to fight a potentially catastrophic military conflict to thwart Beijing’s momentum, the longterm outcome of the competition is a

foregone conclusion. The United States will slowly but surely be edged out of its role as arbiter of the balance of power.

China will increasingly set the rules of the road across the Asia-Pacific region.

The task for US allies is, thus, to begin adapting to a post-American regional order, one in which Washington can no longer protect its friends or otherwise play a decisive strategic role.

White’s essay is simultaneously essential and dangerous reading. It is essential because it offers perhaps the most bracing demonstration yet of just how adversely the climate in the Asia-Pacific region has shifted over the past several years, and how badly regional perceptions of US leadership have eroded. China is no longer the threat of tomorrow: It is reshaping the regional order today, at the expense of the United States and its closest allies. And, while most policy-makers and elites in Australia and other allied countries are not ready to concede the outcome of that competition, their faith in Washington is increasingly being tested.

In Australia, for instance, White is hardly alone in publicly questioning his

Monday, January 8, 2018 A11

ensures fund generation, reduction in government spending, utilization of underutilized port facilities, complete delivery of port services, the upgrade of existing port facilities at no or minimum expense to the government and the dispersal of economic benefits to a wider area of the population.

Is PPA ready for PPPs? Why? What are the projects in PPA’s PPP pipeline?

PPA has a good record of enlisting private sector support in the development, maintenance and operation of ports or delivery of port services. In the pipeline in PPA’s PPP program are the ports of Davao, General Santos, Iloilo, Cagayan de Oro and Zamboanga.

South Harbor Expanded Port Zone is also a viable PPP initiative that has been in the PPA radar. Almost all of the ports have expired or about to expire cargo handling service contracts, which make them viable candidates for PPP. What are the challenges and risks of ports related to PPPs? Among the challenges that PPA

has faced, and will likely still encounter along the way, are court cases and economic dislocation of affected employees. PPA employees and those of existing service providers in ports concerned worry over the risks of being displaced and economically dislocated. To cushion any adverse impact, PPA has ensured that service contracts of cargo-handling operators provide for the setting up of retirement funds.

What is your message to the public?

PPA would like to assure the public that it will be conscious all the time of the ports’ role in promoting connectivity between and among the country’s islands and with the rest of the world. Therefore, PPA will pursue programs that will provide the ports with the necessary facilities and equipment to serve vessels and handle passengers and cargo more efficiently. Priority shall be given by PPA in tapping privatesector support, but it will be ready to do on its own essential projects where private-sector interest is nil or wanting.

All events are considered blessings. We must appreciate the painful ones from an unfamiliar yet better perspective, that is, more of a teaching point. Pope Francis has said: “To be happy is to let live the creature that lives in each of us, free, joyful and simple.” Wear happy socks and let go of the creature within.

ourselves, we are essentially bending over backward to please other people simply because we want to see a desired result in someone else’s eyes— not our own eyes. Some people claim that they have found the “right” partner or have completed their bucket list, both of which can make them feel euphoric for a while. But, somehow, those same people can become very lonely when the outcome they desire never comes. The right partner eventually doesn’t feel “right,” or the bucket list failed to meet the hype of the advertisement. Most people will be forever chasing something else, true to the adage that the grass is always greener on the other side.

In a recent sermon, Pope Francis said, “Remember that to be happy is not to have a sky without a storm, a road without accidents, work without fatigue, relationships without disappointments. Blessings come in all colors, fortunate events are meant to give us pleasure, unfortunate ones are sent our way to teach us a lesson or make us stronger.” In the Bible, James 1:2-3 says, “Consider it pure joy, my brothers and sisters, whenever you face trials of many kinds, because you know that the testing of your faith produces perseverance.” All events are considered blessings from above.

We must appreciate the painful ones from an unfamiliar yet better perspective, that is, more of a teaching point.

Francis continued, “To be happy is to let live the creature that lives in each of us, free, joyful and simple.”

Wear happy socks and let go of the creature within.

Ryan Uy is one trendsetter when it comes to happy socks. I noticed that most of his happy socks are usually of the bright red, neon green and sharp yellow variety. I have yet to see him wear black and white happy socks, if ever there was any. The 2018 revenue target set for his team is quite intrepid, yet achievable. But armed with his infectious smile and calculated confidence, Ryan and his sales team can happily accomplish whatever they are tasked to accomplish. As he marked his third year in PAL a few days ago, his demeanor both while at work or on vacation says it all—he is one happy person who aspires to have a simple yet quality life with this family in his hometown of Catbalogan, Samar.

But it can never be just in the socks! Loving one’s self is at the core of being happy. Blogger Katie Hendricks said that a person has not really loved himself if he is frustrated, unsatisfied or stressed. She said that whenever we look to a certain outcome to make us feel better about

nation’s continuing reliance on the US Former Prime Minister Paul Keating has voiced similar ideas. And, in the Philippines, President Duterte has ostentatiously repositioned his country between Beijing and Washington on the thesis—exaggerated, no doubt, but nonetheless telling—that “America has lost” its strategic duel with China.

It would be foolish, then, for US policy-makers to simply dismiss the concerns that are emanating from Australia and other Asia-Pacific countries.

But it would also be dangerous for United States and allied leaders to accept the thesis that China is destined to dominate the region and simply give up on countering Beijing’s ambitions.

China appears imposing today, but it is hardly 10 feet tall. As I discuss in my new book, American Grand Strategy in the Age of Trump, Beijing is still no match for the US in aggregate national power: Its military budget is still less than half that of the Pentagon’s, and its per-capita GDP remains roughly a quarter of America’s, even as its overall GDP approaches parity.

Moreover, China is almost certain to

For questions and comments, please e-mail me at sbmison@gmail.com.

encounter serious economic and political difficulties in the coming years because of the rapidly approaching limits of its existing growth model and the inherent instability of authoritarian rule. It is a fantasy to believe, as US observers sometimes have, that China will collapse or democratize before it is able to make a serious bid for geopolitical supremacy in the Asia-Pacific region. But it is hardly preordained that China will be able to maintain, over a period of decades, the impressive trajectory needed to decisively overtake America as the region’s leading power.

In fact, the US and its allies can make it enormously difficult for China to accomplish that objective. For example, the same maritime geography that complicates US efforts to project power into the areas along China’s coastline makes it hard for China to project power outward, toward its neighbors and beyond. The island chain running from Japan to the Ryukyus to Taiwan and the Philippines constitutes a series of natural barriers to Chinese expansion into the Pacific.

2nd Front Page BusinessMirror

A12 Monday, January 8, 2018

www.businessmirror.com.ph

Senate panel eyes end-January deadline for tackling tax amnesty

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By Butch Fernandez

@butchfBM

ven as government agencies struggle to make sure the provisions of the first part of the Tax Reform for Acceleration and Inclusion (TRAIN) law are well understood and not hijacked by profiteers, lawmakers are already gearing to tackle the next wave of reforms.

The Senate Ways and Means Committee, for one, has set a tight deadline for itself in tackling at least three tax-amnesty bills that are part of the next-wave reforms listed as part of the sequel of revenue raisers for the government.

“The committee is finalizing the tax-amnesty bill for reporting out within the first two weeks of sessions,” Ways and Means Panel Chairman Sen. Juan Edgardo M. Angara told the BusinessMirror over the weekend.

The Senate resumes sessions on January 15, which means that, following Angara’s self-imposed target, the tax-amnesty measure

should be ready at committee level by end-January.

Asked if his committee will tackle just his own measure—Senate Bill (SB) 942—or include in discussions two other tax-amnesty bills—one

by Senate President Pro Tempore Ralph G. Recto (SB 920) and another

by Sen. Paolo Benigno A. Aquino IV (SB 1494)—Angara replied in a text message that the effort will be “consolidated already.” SB 942, or the “Grant of Tax Amnesty Act,” was filed by Angara on August 1, 2016, with Sen. Nancy S. Binay as coauthor. Its long title is “An Act of Enhancing Revenue Administration and Collection By Granting An Am-

3

The number of tax amnesty bills that will be discussed by the Senate Ways and Means committee

nesty On All Unpaid Internal Revenue Taxes Imposed By The National Government For Taxable Year 2015 And Prior Years.”

Urgency to tackle TRAIN sequel

Tackling the second-wave reforms or the sequel to the TRAINis of urgency to the Duterte administration, which needs to fund the ambitious “Build, Build, Build” flagship infrastructure program.

When he signed the TR AIN bill, into law—Republic Act (RA) 10963—last December 19, President Duterte had pointed out that this was just an initial part of the gains under the comprehensive Tax Reform Program (CTRP).

Congress has passed “two-thirds of the expected revenues from Package 1 of the TRAIN,” according to

the Department of Finance (DOF).

The remaining one-third involves provisions on the estate-tax amnesty, a general tax amnesty, the proposed adjustments in the Motor Vehicle Users Charge and amendments to the bank secrecy law and automatic exchange of information, the DOF explained in a briefing statement.

The Senate Ways and Means Committee began in March 2017 its deliberations on the TRAIN, which was filed in the chamber by Senate President Aquilino L. Pimentel III as SB 1408 last March 22.

The Senate began conducting plenary debates on the revised measure, SB 1592, last September 23 and finally approved it with substantial amendments last November 28.

The upper chamber ratified the bicameral conference committee version last December 13, with Angara expressing satisfaction with it even though he acknowledged to reporters that they had to concede much ground along the way.

2nd package of CTRP

Lawmakers and lobbyists for certain sectors impacted by the reforms

The management, officers, and staff of

and the ALC Group of Companies mourn the passing of

Gabriel Ocampo Vida Former president of Eternal Gardens, on January 4, 2018, at the age of 92.

His body lies in state at Felicidad Chapel, Arlington Memorial Chapels, 12 G. Araneta Avenue, Q.C. Inurnment will be tomorrow, Tuesday, January 9, 2018, at Eternal Gardens Baesa, Caloocan City after the 9 a.m.

Mass and cremation at Arlington Memorial Chapels.

In lieu of flowers, the family requests that you consider donations to the St. Gregory the Great Parish, Indang Cavite, for the restoration of the historic church where Mr. Vida was baptized.

predict, separately, that there will be more fierce debates when the sequel to TRAIN is tackled.

One group that expressed dismay over the “minimal” hike in excise tax on tobacco, the Action for Economic Reforms, said they will not give up the fight. Finance Secretary Carlos G. Dominguez III said the DOF will submit to Congress this January the second package of the government’s CTRP. The DOF quoted Duterte as giving instructions, right after signing the TRAIN law, to ensure its effective implementation and to immediately submit to the Congress in early 2018 the CTRP’s Package 2.

Package 2 aims to lower corporate-income taxes and modernize fiscal incentives in a bid to complement the expected incremental revenues from the first package, according to the DOF. “We are very pleased that the legislature passed the TRAIN bill.

The President signed it into law although there are some provisions that he vetoed…. We are moving forward with the implementation of the tax reform,” Dominguez said at last week’s interagency

Development Budget Coordination Council meeting. “We are going to submit to Congress Package 2 of the CTRP in January 2018,” the DOF press release quoted Dominguez as saying. The finance chief said that, in terms of revenue potential, Package 2 would be “neutral.”

‘Tax relief, revenue raiser’

The Duterte administration had touted TRAIN as one that strikes a balance between providing tax relief—by way of hefty income tax cuts for individuals—and raising revenue for infrastructure and services.

Both Dominguez and Angara had claimed that 99 percent of the country’s population will benefit from TRAIN, with salaried employees and self-employed individuals earning a taxable income of P250,000 per year, or around P21,000 a month, exempted from paying the personal-income tax (PIT). Other taxpayers in higher income brackets will also get to enjoy significant PIT cuts, except the ultra-rich or those earning P8 million a year and above.

See “Senate,” A2