Businessmirror january 09, 2018 by BusinessMirror

Challenge for data-protection officers: Breaking down the walls By Henry J. Schumacher

he world of data security is a highly complex and fluid environment where businesses must set in place policies and procedures that are proactive, rather than reactive, to the ever-present threat of data- security breach, as well as complying to an increasingly rigid regulatory framework. The need for C-suite level data-protection officers is only one of the requirements of the European General Data Protection Regulation (GDPR). Unlike the current Data Protection Directive, GDPR will also apply to organizations or “data controllers” based outside of the European Union. Continued on A12

media partner of the year

United nations

2015 environmental Media Award leadership award 2008

BusinessMirror A broader look at today’s business

www.businessmirror.com.ph

Tuesday, January 9, 2018 Vol. 13 No. 90

Duterte cutting OP agencies’ budget to ground junketeers

By Elijah Felice E. Rosales

@alyasjah

alacañang is looking to trim the budget of agencies under the Office of the President (OP)—to prevent officials from going on unnecessary trips abroad—as part of President Duterte’s crackdown on junketeers.

2016 ejap journalism awards

business news source of the year

P25.00 nationwide | 4 sections 24 pages | 7 days a week

A strong Armed Forces and the economy

ROQUE: “He [Duterte] said it; he won’t give them sufficient funds.”

Manny B. Villar

THE ENTREPRENEUR A ccord i ng to P resident i a l Spokesman Harry L. Roque Jr., the President might just cut the funding of agencies to limit their heads from traveling abroad. This came after Duterte consecutively See “Duterte,” A2

have always believed, especially during my tenure as House Speaker and subsequently Senate President as part of a political career that spanned more than two decades, that the Philippines should have a strong Armed Forces to maintain its status as a sovereign and independent state. Continued on A10

D.O.T. DIRECTORS RECEIVE BMReports NEW YEAR SURPRISE AS TEO ORDERS MAJOR RESHUFFLE Govt, citizens remain incurable optimists By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

TEO: “We’re transferring them to get the best out of them. We need new ideas, new destinations and new products; these are things demanded by our foreign tourists.”

EVERAL regional directors of the Department of Tourism (DOT) were caught off guard last week by the sudden reshuffling of their posts, with a number questioning why they were not even consulted before the move was carried out. In the first Department Order (DO) issued in the new year signed by Tourism Secretary Wanda Corazon T. Teo, also reassigned were a few office directors based in Metro Manila, but reassigned to other units or the regions. Per DO 2018-01, which took effect on January 4, the reason given for the reassignments was “in the exigency of service,” essentially a catch-all reason often used by government agencies to ensure their services are rendered properly. In an interview with the B usiness M irror over the weekend, Teo said: “We’re transferring them to get the best out of them. We need new ideas, new destinations and new products; these are things demanded by our foreign tourists. This was what I gathered in my travels abroad after meeting with travel agents overseas and prospective tourists to the Philippines.” She added that, last year, she went abroad to find out what the foreign tourists needed, and what were the issues hampering the arrival of more visitors to the Philippines. “This year I will go around, visit all the regions and find out the concerns there. We also want to develop more products in the regions for tourists,” she stressed.

as new year ushers old, new challenges By Recto Mercene @rectomercene & Lorenz S. Marasigan @lorenzmarasigan

The DO also mandates that officials reassigned “to another geographic location who do not own houses therein shall be provided free quarters within the DOT office premises, if available. Otherwise, the said official shall be provided the money equivalent but not exceeding what is currently authorized in accordance with existing regulations for the payment of rentals of quarters, subject to existing accounting and auditing rules and regulations.” Officials who will rent more expensive accommodations will have to shoulder the difference between the rent and the amount authorized them. Teo also ordered the reassigned officials to turn over documents and vacate their offices within a week. A number of reassigned officials, who spoke to this paper on condition of anonymity, however, said they felt disrespected by the department order. “Personally, I can do the job assigned to me. But bastusan ito e…we were just given one week to go to our new assignments. No consultation.” Another director affected by the reassignment order echoed this. “The order said [we have] one week [to turn over], but it’s not that easy. See “DOT,” A12

PESO exchange rates n US 49.7690

Part Two

HER E’S an ocean-w ide chasm between optimism and delusion. This is especially seen in major infrastructure projects, as University of Toronto Prof. Matti Siemiatycki wrote eight years ago. “Optimism bias has been a considerable challenge in the planning and delivery of public services, particularly infrastructure megaprojects,” Siemiatycki said in his paper, titled “Managing Optimism Biases in the Delivery of Large-Infrastructure Projects: A Corporate Performance Benchmarking Approach.” “This has resulted in consistently underestimated costs and overestimated benefits, as well as delivery delays.”

High-rise buildings continue to mushroom around the metropolis. As Filipinos remain optimistic with the new year, University of Toronto Prof. Matti Siemiatycki has cautioned these expectations should be managed, especially as infrastructure projects usually bring delusion, rather than optimism. NONIE REYES

The words of Siemiatycki, who has spent “the last 15 years studying infrastructure, with a focus on

public-private partnerships [PPP],” rings true for the Philippines, as the government embarks on its

own PPP projects and the “Build, Build, Build” program. For one, the country could expect the Aquino administrationinspired PPP Program to be revitalized. At least five national infrastructure deals would be introduced this year. According to Ferdinand A. Pecson, who sits as executive director at the Philippines’s PPP Center, the agency will push for two priority projects and three unsolicited proposals. Pecson listed the national projects under the pipeline as the operations and maintenance of the Clark International Airport, and the construction, operation and maintenance of the San Ramon New Port. The three unsolicited proposals are the East-West Railway, the Manila Bay Flood Control and the New Manila Airport. Continued on A2

Still no go signal from Duterte on funding for Manila Bay blueprint By Cai U. Ordinario @cuo_bm

unding for the long-awaited Manila Bay Development Master Plan hangs in the balance, with President Duterte still to sign the Special Presiden-

tial Authority (SPA) that will allow the government to sign a financing agreement with the Netherlands. Documents obtained by the BusinessMirror stated the SPA to be granted by the Office of the President (OP) will permit its representative—in this case the Na-

tional Economic and Development Authority (Neda)—to enter into an agreement with the Ministry of Foreign Affairs of the Kingdom of the Netherlands on behalf of the Philippine government. The document stated that the memorandum of understanding

was already endorsed by the Departments of Foreign Affairs (DFA) and of Finance (DOF) to the Office of the President last December. The SPA is a requirement under Memorandum Circular 16 s. 2017 titled “Requests for Authorization See “Manila Bay,” A2

n japan 0.4401 n UK 67.5017 n HK 6.3656 n CHINA 7.6701 n singapore 37.5247 n australia 39.1135 n EU 59.8622 n SAUDI arabia 13.2710

Source: BSP (8 January 2018 )

A2 Tuesday, January 9, 2018

BMReports BusinessMirror

Govt, citizens remain incurable optimists as new year ushers old, new challenges Continued from A1

These proposals are currently in the Investment Coordination Committee of the National E conom ic a nd De ve lopme nt Authority (Neda).

PPP Terms

BUT more than national projects, the PPP Center will also give prime importance to local government unit (LGU)-led PPP deals. “In line with the current direction of the government to disperse infrastructure development across different regions, the PPP Center is intensifying its efforts in encouraging more viable PPP projects at the local level by expanding its local government unit (LGU) initiatives,” Pecson said. Last September 18 the agency, together with the Asian Development Bank, launched its expanded LGU PPP Strategy, which is split into three categories: short term (immediate), medium term (one to two years) and long term (two

Manila Bay. . . Continued from A1

to Negotiate and Sign International Agreements, and Agreements Covering Borrowings, Guarantees and Foreign Grants.” It states that concerned government agencies, “which intend to partake in international agreements, are directed to coordinate with the DFA and/or the DOF prior to the negotiation and signing of international agreements

Congress. . . Continued from A12

“We should observe checks and balances as coequal chambers of Congress and, therefore, separate voting on the draft Constitution should no longer be put into question,” he added.

Cost of federalism

Shifting to federalism may lead to higher costs for states if tax assignment and expenditure distribution are not done properly, according to a study recently released by the Philippine Institute for Development Studies (Pids). In the study, titled “Designing the Fiscal

to five years). “For the short term, the PPP Center shall provide focused advisory assistance to LGUs, which will implement PPP, including joint-venture projects, covering identified priority sectors, such as water-supply and/ or septage management and sanitation, solid-waste management, vertical infrastructures—public markets, government complex, among others—and transport terminals,” Pecson said. Capacity-building support for LGUs, he added, will also be further enhanced via customized trainings and stronger collaboration with local public or private capacitybuilding institutions. “For the medium term, successful LGU PPP projects shall be replicated by developing templates of project studies and PPP contracts and cascading these to applicable LGUs through internship programs and local capacity-building institutions,” he said. And, for the longer term, the

agency aims to expand its support to include project-development services, such as crafting of feasibility studies and the creation of a facility similar to the existing Project Development and Monitoring Facility to support local PPPs.

ON the other hand, Monreal pointed to an ongoing bidding for the P486-million CCTV project of the past administration that was unceremoniously junked. During the term of former airport Manager Jose Honrado, the project was put on the block twice,

and twice there was a failure of bidding. It was then rumored that the Miaa headman was allegedly trying to favor a bidder with strong links to Malacañang. This time, to avoid any suspicion of wrongdoings, Monreal said he has allowed the bidding of the CCTV to be handled by the Procurement Services of the Department of Budget Management (PSDBM). “Although the Miaa is officially allowed to conduct the bidding process, I don’t want to be subjected to outside pressure and, therefore, I [tossed] the problem to the PSDBM for the P480-million project.” According to Jess Martinez, the head of the Media Affairs Division, the CCTV cameras would not only be confined within the airport passenger terminals. “This project is very expensive because it would cover the whole Miaa aerodrome, which means all the facilities within the confines of the 645-hectare property of the premier airport.” To be continued

cover ing b or ro w ings, guarantees and foreign grants”. Based on the documents obtained by the BusinessMirror, P250 million worth of project financing will be shared by the national and Dutch governments. The funds will be used primarily for consulting services of Dutch and Filipino experts, particularly on reclamation. Obtaining consulting services of foreign experts, which will be procured by the Dutch govern-

ment, will amount to P150 million, with the cost being split 50-50 between the Philippine and the Netherlands governments. The remaining P100 million will be shouldered by the Philippine government to obtain local consultants and finance other expenses, such as advertising and representation. T he Ned a ea rl ier sa id t he comprehensive master plan will coordinate national and local government efforts in developing the Manila Bay area, taking

into consideration the economic, ecologic and social development in the Manila Bay region. The project, to be titled “Manila Bay Development Master Plan,” will be undertaken between 2017 and 2019. The creation of the master plan will be spearheaded by Neda in coordination with over five agencies, such as the Philippine Reclamation Authority departments of Env ironment and Natura l R esou rces a nd P ubl ic Work s and Highways.

The Neda will also coordinate with the Department of Transportation and the Philippine Ports Authority. Once the master plan is completed, the Neda said the government can move inland and plan for areas surrounding Manila Bay, such as the Port of Manila. The Manila Bay serves as the catchment basin of major rivers in the National Capital Region, Bulacan, Bataan, Laguna and Cavite. The Department of Tourism proposed a tourism blueprint for the

Features of a Federal Form of Government: Autonomy and Equity,” Pids Senior Research Fellow Rosario G. Manasan said the fiscal gap in regions could reach as much as P1.09 trillion. Manasan said this represents 84 percent of the total expenditure needs of subnational governments, or 57 percent of total revenues from national governmental internal revenue taxes in 2017, or 7.5 percent of GDP. “It is critical that the expenditure assignment, the tax assignment and intergovernmental transfers are designed in an internally consistent and coherent manner that provides the subnational governments the right incentives to deliver the services

assigned to them in an efficient and effective manner and to be more accountable to their constituents,” Manasan said. With the increase in regional government functions, subnational governments will be hard-pressed to increase their revenues. According to Manasan’s calculations, subnational governments can only finance P213.59 billion of the total needs of P1.3 trillion. The largest gap was observed in the Autonomous Region in Muslim Mindanao and Calabarzon at P111.29 billion and P104.03 billion, respectively. The least fiscal gap was noted in Metro Manila, or the National Capital Region, at P14.95 billion.

Manasan told the BusinessMirror that the computation was based on her proposed shared and exclusive functions of the federal and subnational government. The estimates specifically cover the shared functions that subnational governments need to finance under a federalist regime. She said while most the exclusive functions of the subnational government are already being financed currently through the Local Government Code provisions concerning devolved services and the Internal Revenue Allotment, the shared functions under a federalist government may prove to be costly. Shared powers in the context of subnational

governments, Manasan said, include mostly the delivery of services, such as infrastructure, education and agriculture, to name a few that have since been financed nationally. Manasan explained that, in terms of education, this includes the building of classrooms, salary of teachers, purchase of supplies, such as textbooks, and repair and maintenance of facilities and equipment, which are currently being financed through the national government or the Department of Education. “Greater attention should be given to [i] the design of equalization transfers [otherwise, regional disparities may widen] and [ii] securing greater revenue autonomy for subnational governments [otherwise, local accountability may weaken],” Manasan said. “Otherwise, fiscal discipline might be compromised under a federal model of government. In this regard, it should be pointed out that the greater decentralization of taxing powers to subnational government is a prerequisite condition for autonomy in subnational governments’ access to the credit and bond markets,” she added. Apart from incentives and access to credit and bond markets, Manasan said there is a need to discuss subnational borrowing, which is “a primary source of finance for local infrastructure, which is critical for the delivery of local services.” Allowing subnational borrowing will help prevent local projects from becoming underfunded and, ultimately, slow development in federal states. This will also help local governments“a more equitable way of financing long-lived infrastructure investments.” The only caveat, Manasan said, is that excessive borrowing can also lead to financial problems that can undermine not only its local economy but also the economy of the nation. In order to prevent this, Manasan urged that specific provisions on subnational borrowing be included in the proposed shift to federalism. These provisions should include one that prevents federal governments from guaranteeing payment of regional and local government debt. This means the federal government must not bail out states in the event of default on their debts. Also, Manasan said regional and local governments must borrow only to finance capital investments only and that the legislature must enact the fiscal responsibility law that specify ceilings on borrowing, debt, debt service and similar items of subnational governments.

Miaa projects

MEANWHILE, the Manila International Airport Authority (Miaa), operator of the Ninoy Aquino International Airport, looks forward to 2018 with two major projects that it hopes would reduce considerably the runway congestion by year’s end. One is the rapid exit taxiway (RET) that would help large-body aircraft from leaving the runway as soon as it lands, and the other is the closed-circuit television (CCTV) project. Once completed, the new RET would pave the way for a waiting jetliner to immediately take off. On the other hand, airplanes succeeding to land on the same 06-24

runway would be able to touch down within the second that the leading airplane had exited the RET. “In both instances, air-traffic controllers would be able to close the gap between takeoff and landing, thus reducing the time intervals, which would mean less air congestions,” Miaa General Manager Ed Monreal said in an interview. “The new RET is for larger aircraft, such as the A330, A340 and A350, including B777 and above,” Monreal explained. The RET’s completion is expected in July with a project cost of P305 million. The civil works was pegged at P212 and the electrical at P93 million.

Miaa CCTV

www.businessmirror.com.ph

Duterte. . .

Continued from A1

fired a number of his appointees reportedly using taxpayers’ money for their junkets. “He said it; he won’t give them sufficient funds,” Roque said in a text message. There are around 35 agencies under the OP. Their total budget for 2018 is P75 billion. This is aside from the P6.03-billion allocation of the OP. The latest casualty of the President’s crackdown on junketeers was former Maritime Industry Authority Marcial C. Amaro III, who, according to the Department of Transportation (DOTr), went on 18 foreign trips last year. On top of this, the DOTr claimed Amaro was out of the country six times in 2016. Amaro suffered the same fate as that of former Presidential Commission for the Urban Poor (PCUP) Chairman Terry L. Ridon and former Dangerous Drugs Board (DDB) Chairman Dionisio R. Santiago. Ridon and Santiago were both sacked by Duterte for allegedly going on lavish trips abroad. Ridon was fired in December for reportedly traveling abroad seven times last year, mostly to attend conferences the President deemed irrelevant to R idon’s mand ate as PCUP chair man. On the other hand, Santiago was sacked last November for allegedly going to Vienna, Austria, with his family and favorite DDB employees, and to the United States with his suspected mistress and, again, favorite DDB employees. For his part, Ridon said all conferences he attended abroad were related to his duty as urban-poor chief and were approved by travel authorities of Malacañang. However, this justification was not enough to spare him and the other four commissioners of the PCUP from being sacked by Duterte. Roque said this is the reason the President is looking to trim the budget of agencies under the OP to rid his appointees of unnecessary travels. Instead of instructing Malacañang to tighten its approval policy, Roque said Duterte opted to take it the hard way by slashing the funds allocated for travels of public officials. Roque said there is no specific number of trips the President deems to be excessive for, as long as he sees them as unnecessary travels, he will certainly call the appointee’s attention, if not remove him from office. He cited as an example Santiago’s case, who had been accused of two junkets, as compared to Amaro’s 18 reported travels. “Those were excessive, too, per the President. Note that, in Santiago’s case, he was removed for declarations, too,” Roque said. He was referring to the axed DDB chief ’s statements against the mega-rehabilitation center in Nueva Ecija. Santiago called the facility as impractical and a mistake, which drew the ire of Duterte. To ensure their stay in office, Roque has advised public officials to maintain a low-profile lifestyle and to stray from anomalous activities, such as going on lavish trips abroad. “Let this be a reminder to all public officials that the President is serious in his mandate that they should live modest lives, that they should be true to their calling and that they should avoid unnecessary trips,” he said. “This is the President’s unilateral decision to crack down on foreign travel of government officials. He believes that government officials should concentrate on their jobs here in the Philippines, that travels should only be for officials from the Department of Foreign Affairs, and that any foreign travel must conform with the guidelines, related to the agency’s mandate, must not be too costly and must have significant benefits to the country,” Roque added.

www.businessmirror.com.ph

The Nation BusinessMirror

OSG to SC: Junk petition against ML in Mindanao

HE Office of the Solicitor General (OSG) on Monday asked the Supreme Court (SC) to junk the petition filed by opposition lawmakers assailing the one-year extension of martial law in Mindanao region. In a 58-page comment to the petition filed by Rep. Edcel C. Lagman of the First District of Albay and several other lawmakers, Solicitor General Jose Calida maintained that rebellion still exists in Mindanao, thus, warranting the continued implementation of martial law . “There is rebellion in Mindanao. Until the rebellion is quelled, there is reason to extend martial law and suspend the privilege of the writ of habeas corpus,” Calida said. Calida cited the threats being posed by the communist-terrorists (CTs), the Abu Sayyaf terrorist group and the presence of remnants, protectors and supporters of the Daesh-inspired Da’awatul Islamiyah Waliyatul Masriq (DIWM) and other like-minded local and foreign terror groups. He said these groups pose a clear and imminent danger to public safety and hinders the speedy rehabilitation, recovery and reconstruction efforts in Marawi City, as well as the and “the attainment of lasting peace, stability, economic development and prosperity in Mindanao.” “The second extension of the implementation of martial law coupled with the continued suspension of the privilege of the writ of habeas corpus in Mindanao will significantly help not only the AFP [Armed Forces], but also the other stakeholders in quelling and putting an end to the on-going DAESHinspired DIWM groups and CT-staged rebellion, and in restoring public order, safety and stability in Mindanao…,” Calida argued. He added that the petition should be dismissed also on the ground of technicality.

“Petitioners committed a terrible blunder. They failed to attach the adverted “joint resolution” of Congress upon which they pin their allegation of arbitrariness,” Calida said. “Moreover, they trace the arbitrariness to the absence of an actual rebellion. Petitioners are unmindful that the Supreme Court already declared in Lagman v. Medialdea the existence of rebellion in Mindanao. Such fact is now beyond question,” he added. Calida maintained that without any evidence to support the petitioners’ general allegation that there is no factual basis to extend martial law in Mindanao, their claim that Congress acted contrary to the Constitution has no leg to stand on. “What the petitioners should have done is to show that the rebellion has been completely quelled. They have not done so,” he noted. “For as long as Congress believes that the invasion or rebellion continues to exist, and public safety requires it, the proclamation of martial law and the suspension of the privilege of the writ of habeas corpus may be extended, subject only to the condition that any such extension be upon the initiative of the President and for a period to be determined by Congress,” Calida said. In a related development, another petition questioning the constitutionality of the one-year extension of martial law in Mindanao was filed before the SC on Monday. The petition filed by human- rights lawyers belonging to the National Union of People’s Lawyers joined with progressive party-list Reps. Carlos Zarate (Bayan Muna), Arlene Brosas and Emmie de Jesus (Gabriela), Ariel Casilao (Anakpawis), Antonio Tinio (ACT Teachers) and Sarah Elago (Kabataan) and some Mindanao residents is the second petition filed before the Court assailing the martial law extension. Joel R. San Juan

Editor: Vittorio V. Vitug • Tuesday, January 9, 2018 A3

Barangay, SK polls may be postponed anew ‘for practical reasons,’ solon says By Jovee Marie N. dela Cruz

@joveemarie

lawmaker on Monday said Congress may opt to postpone anew the May 14, 2018, barangay and Sangguniang Kabataan (SK) elections if the constituent assembly (Con-ass) will not finish the draft of the new federal Constitution by February or March.

Party-list Rep. Eugene de Vera of ABS, at a news conference, aired the possibility of the postponement to accommodate the plebiscite for the proposed shift to federalism type of government. “If Congress would really want to save money, and probably for practical reason and in the event plebiscite would not be available by May, we could probably postpone the barangay elections to another later day and conduct it simultaneously with barangay polls. [However] nothing official, but it’s like an idea right now to consider,” de Vera said. De Vera is one of the authors of Resolution of Houses 8 seeking to change the 1987 Constitution. According to de Vera, there is a constitutional provision that provides any amendment to or revision of the Constitution shall be valid when ratified by a majority of the votes cast in a plebiscite, which shall be held not earlier than 60 days nor later than 90 days after

the approval of such amendment or revision. “There is a provision [in the Constitution that] within 60 days we need to submit it [the new charter] for plebiscite. If we do [a] calculation we have still time to pass it [for plebiscite] if we finish it by February or March…if there’s no opposition from constituent assembly,” he said. Last Sunday House Committee on Constitutional Reforms Chairman Roger G. Mercado of the Lone District Southern Leyte said liberalizing 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 Con-ass early this year. Earlier, Speaker Pantaleon D. Alvarez said convening Congress into a constituent assembly to propose Charter amendments and shift to federalism is the top priority of the

House of Representatives when session resumes on January 15. Alvarez added that 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—the congressmen and senators—who will serve as the delegates. The House Committee on Constitutional Reforms’ four technical working groups (TWGs) are already consolidating de Vera’s RBH 8 and the proposed changes of the PDPLaban Federalism Institute to create the draft of a proposed Philippine Federal Constitution TWG 1, chaired by Rep. Corazon Nuñez-Malanyaon of the First District of Negros Oriental, is handling the provisions on the ExecutiveLegislative (Articles VI and VII); New article on Federal and Regional Powers, Numbers of States; and Lo-

cal Government and Taxation/Allocation of Resources (Article X). TWG 2, chaired by Deputy Speaker Fredenil H. Castro of the Second District 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 B. Benitez of the Third District 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 S.E. Veloso of the Third District 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).

If Congress would really want to save money, and probably for practical reason and in the event plebiscite would not be available by May, we could probably postpone the barangay elections to another later day and conduct it simultaneously with barangay polls. [However] nothing official, but it’s like an idea right now to consider.”—de Vera

Sereno sees renewed smear campaign with resumption of impeach hearings By Joel R. San Juan @jrsanjuan1573

HE camp of embattled Chief Justice Maria Lourdes A. Sereno on Monday said they are bracing for an intensified “smear” drive against the chief magistrate, as the House of Representatives prepares for the resumption of the impeachment proceedings against her. Lawyer Jojo Lacanilao, one of Sereno’s spokesmen, even insisted that the report about the 10 justices testifying at the impeachment hearing was part of a “psywar campaign” to condition the mind of the public that the Chief Justice is losing support from her fellow magistrates in the SC. “Again, this is part and parcel of a propaganda designed to project that the Chief Justice does not enjoy the support of her colleagues in the Supreme Court, which is actually not the case,” he said. Lacanilao added it would be premature and unfair to conclude that the said justices who were invited to the impeachment hearing would testify against her. Three sitting magistrates—Associate Justices Teresita Leonardo de Castro, Francis Jardeleza and Noel Tijam—have already appeared before the House Committee on Justice. Invitations have been sent to Senior Associate Justices Antonio Carpio, Samuel Martires and Mariano del Castillo. “Given the possible nature of their testimonies, it is unfair to conclude that the justices who are invited to the coming hearings are testifying against the Chief Justice,” Lacanilao said. Lacanilao noted that Carpio, for instance, is expected to testify on the allegation that Sereno manipulated the short-list of the Judicial and Bar Council (JBC) to exclude thenSolicitor General Jardeleza. It was Carpio who complained

We expect her detractors to intensify their smear campaign against the Chief Justice to cover up for the fatally defective impeachment case. It is our position that if there is a strong case against the Chief Justice, it should have long been elevated to the Senate for trial.” —Lacanilao

about Jardeleza’s deletion of the Itu Aba discussions in the Philippine submissions to the United Nations tribunal that heard and decided the arbitration case filed by the Philippines against China over the issue of West Philippine Sea. Carpio’s main contention was that Jardeleza had seriously compromised the Philippine interests in deleting the country’s position that Itu Aba is not an island but a rock. If the arbitral tribunal did not rule on this, Itu Aba would be the basis for China to encroach on Philippine territory. Jardeleza’s stand on the issue gave Sereno, as JBC ex-officio chairman, reasonable grounds to doubt

his integrity and moral fitness to become a member of the highest court of the land. Likewise, Lacanilao said del Castillo has been invited to explain why the High Court purchased a security vehicle for the Chief Justice since he was the one who recommended to the en banc the purchase of the vehicle. Martires, on the other hand, will testify merely on his decision in the case involving the grant of survivorship benefits to spouses of deceased justices and judges, where the Chief Justice voted with him. Lacanilao pointed out that not a single impeachable offense was proven during the hearings despite the participation of four incumbent and retired Supreme Court justices . “We expect her detractors to intensify their smear campaign against the Chief Justice to cover up for the fatally defective impeachment case. It is our position that if there is a strong case against the Chief Justice, it should have long been elevated to the Senate for trial,” Lacanilao said. “Not even the testimonies of the justices, which pertain to differences in opinion with respect to internal processes of the Supreme Court, were enough to prove that the Chief Justice committed an impeachable offense that would warrant her removal from office,” he added. Sereno’s camp also criticized House Speaker Pantaleon D. Alvarez for making it appear that it was Sereno’s choice not to participate in the impeachment proceedings. “We have to remember that the Chief Justice accepted the invitation of the committee to attend the hearings through her counsel, which is her right under their own rules and the Constitution, but the committee did not allow her to be represented by her counsels of choice and to cross examine the complainant and the witnesses through her lawyers,” Lacanilao said.

RIVER CRUISE Aside from Chocolate Hills, one of the tourist attractions of Bohol province is the Loboc River cruise, which starts at Loay Bridge

at the neighboring town of Loay, where one can choose from a variety of cruising vessels. Loboc River is one of the cleanest in the Philippines. PNA/Joey O. Razon

Group slams CA ‘release order’ of ex-Palawan Gov. Joel Reyes By Jonathan L. Mayuga @jonlmayuga

eploring the release of former Palawan Gov. Joel Reyes, who, along with his brother, Mario, was accused of masterminding the 2011 killing of environmentalist and journalist Gerry Ortega, environmental group Kalikasan-PNE said the “questionable” Court of Appeals (CA) decision “sets the tone” for more emboldened attacks against environmental defenders in the country. “We in the Kalikasan People’s Network for the Environment [Kalikasan PNE] express our utmost disgust over the Court of Appeals’s release of former Palawan Gov. Joel Reyes, the mastermind in the murder of environmentalist and journalist Dr. Gerry Ortega. The CA’s questionable decision sets the tone for more emboldened killings of environmental defenders and the unfettered throughout 2018,” the group said in a news statement.

Ortega was killed around 10:30 a.m. on January 24, 2001, while checking out clothes at a clothes thrift shop in Barangay San Pedro in Puerto Princesa City, Palawan. Reports said he had just finished broadcasting on his morning show Ramatak for a local radio station, dwAR-FM and was supposed to prepare for a scheduled journey to Manila when he decided to stop by to check for new arrivals in the ukay ukay store. He was shot at the back of the head by a lone gunman. After several arrests, the name of the former Palawan governor and his brother, Mario Reyes, a former mayor of Coron, Palawan, cropped up as the alleged masterminds. To recall, on March 21, 2016, during the court trial, Reyes’s bodyguard Rodolfo Edrad Jr., alias Bumar, admitted he hired the killers, and identified the brothers as the masterminds. He testified that his employer, the then governor and his brother, paid him P500,000.

Those arrested by police for having a part in the murder include the alleged shooter, Marlon Recamata, who confessed to the crime at the Puerto Princesa Police Station. Recamata, who was arrested by police after a brief chase after shooting Ortega, also implicated three others in his statements, namely, Rodolfo O. Edrad Jr., Dennis C. Aranas and Armando R. Noel. Recamata pleaded guilty to murder charges on February 11, 2011, and was sentenced to life in prison. A second suspect, Percival Lecias, was invited for questioning by the Puerto Princesa – National Bureau of Investigation (NBI) on January 25, 2011, while another suspect, Dennis Aranas, was arrested in Coron, Palawan, on January 28, 2011. He also confessed to the crime at the Puerto Princesa Police Office. Edrad Jr. surrendered to Puerto Princesa Mayor Edward Hagedorn in Lucena, Quezon on February 5, 2011. Edrad was later found guilty and sentenced to life in prison.

Economy

A4 Tuesday, January 9, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon

LTFRB reminds PUVs: No fare-hike approval just yet

he Land Transportation Franchising and Regulatory Board (LTFRB) has issued a stern warning on public-utility vehicles (PUVs) that overcharge passengers and commuters for the increase in oil prices due to recently passed tax amendments. LTFRB Spokesman Aileen Lizada said she has received reports that some PUV operators have been hiking fares without authority. “It has come to our attention that some public utility vehicles are increasing their fare rates on their own without any authority from the board. Let this be a warning to all PUV operators: You have to go through a petition for fare hike before any increase may be granted,” she said in a text message. A photo bearing a signage from a UV Express from Bulacan circulated on social-media sites on Monday. The said photo showed an announcement of a UV Express unit telling its passengers that it has increased its fare by P5 due to the tax amendments that were passed recently. “This increase is to compensate for the increase in prices of fuel, basic commodity and lease,” the signage said, noting that the increase will start to take effect on January 15. But, according to Lizada, such an increase is not sanctioned by the LTFRB. “For unauthorized fare hikes, the penalties under Joint Administrative Order 2014-01 are as follows: first offense, P5,000 fine; second offense, P10,000 plus impounding of unit for 30 days; and third and subsequent offenses, P15,000 plus cancellation of certification of public conveyance where unit is authorized,” she said, referring to certificates of public conveyance. Fuel prices are expected to spike after gas companies’ current inventories

deplete. Crude is included in the list of items that are up for higher taxation under the Tax Reform for Acceleration and Inclusion Act, or Republic Act 10963. Some 255 smoke belchers, dilapidated vehicles and PUV drivers not wearing uniform were apprehended as the Inter-Agency Council for Traffic (IACT) started on Monday the “Tanggal Bulok, Tanggal Usok” campaign, which aims to flag down road-unworthy public transport in compliance with the PUV Modernization Program. In a news statement, I-ACT said that, as of 2:05 p.m. on Monday (January 8), a total of 123 smoke belchers, 130 vehicles with defective parts and accessories and two drivers not wearing proper uniform were apprehended. The I-ACT is composed of the Department of Transportation (DOTr), Land Transportation Office, Highway Patrol Group, Metropolitan Manila Development Authority, LTFRB and various traffic-enforcement units of Metro Manila local government units. “This is basically a warning shot. If, after a day, we catch them again, then we shall already issue summons to them, leading possibly to suspension if not cancellation of their licenses, and franchises if their explanations would be unsatisfactory,” I-ACT communications head Elmer Argano said in a text message to reporters. The council said it would strictly enforce on-road inspection of public- transport vehicles. “All public transport that we see not road worthy will be stopped and will be issued a subpoena for them to undergo the Motor Vehicle Inspection System,”DOTrUndersecretaryforRoads and Infrastructure Tim Orbos said. Pilot areas for the campaign include Edsa, Commonwealth Avenue, Quezon Avenue and Marcos Highway. Lorenz S. Marasigan with PNA

BusinessMirror

www.businessmirror.com.ph

For 3rd consecutive year, PHL tops world’s energy-sustainability index

By Lenie Lectura

@llectura

or the third consecutive year, the Philippines ranked No. 1 in the World Energy Council’s (WEC) World Energy Trilemma Index (Weti) 2017 for having the best energy environmental sustainability among 125 countries.

The countries were ranked according to three criteria: energy security, energy equity and environment sustainability called “trilemma.” “Environmental sustainability, energy security and energy equity form part of the country’s energy- development program,” according to Energy Secretary Alfonso G. Cusi. “We welcome the good news that the Philippines, for the third straight year, landed No. 1 in the World Energy Council’s World Energy Trilemma Index 2017 on environmental sustainability.” WEC defined environmental sustainability as the holistic achievement of supply- and demand-side energy efficiencies and development of energy supply from renewable and other low-carbon sources. Energy security is the effective management of primary energy supply from domestic and external sources, reliability of energy infra-

structure and ability of energy providers to meet current and future demand. Energy equity is the accessibility and affordability of energy supply across the population. Cusi cited the agency’s Renewable Portfolio Standards, which mandates energ y-distribution utilities to source a minimum portion of their energy from eligible renewable sources, as proof of the national government’s thrust toward energy sustainability. Soon, the Department of Energy (DOE) will launch the Green Energy Option Program, which will enable consumers the power to choose renewable-energy resources as their source of energy. “The WEC rating on environmental sustainability is also a recognition of the administration’s advocacy encouraging Filipinos to make energy efficiency and conservation a way of life,” Cusi said. “Our program on Minimum En-

ergy Performance requirement for household appliances continues to help us control the growth of our total energy consumption and reduce greenhouse-gas emissions,” he added. The national government has also endeavored to improve on the energy-security and energy-equity dimensions of the country as defined in the Weti. On energy security, President Duterte signed Executive Order 30, creating an Energy Investment Coordinating Council that will spearhead and coordinate national government efforts to harmonize, integrate and streamline regulatory processes, requirements and forms relevant to the development of energy investments in the country. For energy equity, the DOE’s national energy policy is technol-

We welcome the good news that the Philippines, for the third straight year, landed No. 1 in the World Energy Council’s World Energy Trilemma Index 2017 on environmental sustainability. “Environmental sustainability, energy security and energy equity form part of the country’s energy development program.”—Cusi

Take cue from BMA about-face on e-cigs, lung specialists urged

he Philippine College of Chest Physicians (PCCP) should consider following the lead of the British Medical Association (BMA), which recently reversed its negative position on electronic cigarettes (e-cigarettes or “vapes”) and now supports their availability as a means to reduce harm caused by smoking cigarettes. “We call on the PCCP to carefully look at the reasons behind the BMA’s about-face on e-cigarettes. As the premier specialty organization of Filipino pulmonologists and acknowledged authority in pulmonary medicine in the Philippines, the PCCP can be a huge influence in the adoption of tobacco harm-reduction measures in the country that could potentially save millions of Filipino lives,” said Tom Pinlac, president of the consumer-advocacy group, The Vapers Philippines. According to Pinlac, local tobacco harm-reduction advocates, including The Vapers Philippines, have been urging the Department of Health to emulate the British government’s antitobacco policy, which supports consumers in stopping smoking and promotes the use of less-harmful nicotine products, particularly e-cigarettes. Last year about 2 million people in England used e-cigarettes and completely stopped smoking, while nearly half a million more were using e-cigarettes as an aid to stop smoking. In its position paper, “E-cigarettes: Balancing Risks and Opportunities,” which was released on November 29, 2017, the BMA stated, “Increasing numbers of smokers are using e-cigarettes, with many people finding them

helpful in cutting down or quitting cigarette use. There are clear potential benefits to e-cigarettes in reducing the harms associated with smoking, and consensus that e-cigarette use is likely to be significantly safer than smoking. It remains important, however, that in realizing any benefit to health, any potential risks associated with ecigarette use are minimized.” Written specifically for policy-makers, the BMA paper aims to highlight the association members’ concerns and potential opportunities surrounding the use of e-cigarettes. It sets out what the BMA believes is an appropriate policy response, taking into account the evolving regulatory and policy environment for these devices in the United Kingdom. The BMA is the professional association of doctors in the UK. The BMA paper has three key messages for policy-makers on tobaccoharm reduction. First, there is a growing consensus that e-cigarette use is significantly less harmful than smoking. Second, e-cigarettes are the most popular device used in attempts to stop smoking. Although there is a lack of high-quality research proving “effectiveness” as required for drugs, most reported studies demonstrate a positive relationship between e-cigarette use and cessation. Third, consumer regulations and feasible standards currently in force in the UK should be kept under review, but are sufficient to address concerns about e-cigarette use, something that would not have been possible if e-cigarettes were regulated as medicines, the BMA noted.

ogy-neutral to allow all available technologies to compete in the delivery of secure and affordable power, while complying with environmental standards. Moreover, the DOE, together with its partners, has intensified its nationwide its electrification program using renewable-energy systems to attain its vision for total electrification by 2022. The DOE is also under the final stage of issuing an Energ y Resi lienc y Polic y t hat wou ld address challenges in the energ y systems after a natural or hu m a n-induced d isaster a nd build back better for a sustainable energ y system. “We will continue to develop our indigenous and environmentally friendly sources of energy and make our communities more energy-efficient,” Cusi said.

NFAC approves importation of 250,000 MT of rice bufferstock By Jasper Emmanuel Y. Arcalas @jearcalas

M A gas-station attendant shows the nozzle of a refueling hose in Makati. Diesel and kerosene price is expected to increase on Tuesday, while there’s no expected hike in gasoline price. Nonie Reyes

Global market volatility prompts oil firms to raise diesel and kerosene on Tuesday

il companies raised diesel and kerosene prices effective on Tuesday, citing global market volatility. On Monday afternoon PTT Philippines and Eastern Petroleum announced they will hike the price of diesel by P0.55 per liter. Seaoil will, likewise, implement the same price adjustment. It add-

ed that it will sell kerosene P0.30 per liter higher also on Tuesday. “This is to reflect movements in the international petroleum market,” Seaoil said. The price increase takes effect at 6 a.m. on January 9. Other oil firms are expected to announce a similar price adjustment. There is no adjustment in the

price of gasoline. This is the second price hike in diesel and kerosene for the year. On January 1 gasoline price went up by P0.20 per liter, diesel by P0.65 per litre and kerosene by P0.75 per liter. Adjustments on petroleum products are implemented every Tuesday of the week. Lenie Lectura

anila could import rice soon to replenish its depleting stockpile following the approval of the National Food Authority Council (NFAC) of a 250,000-metric ton (MT) volume of standby authority for National Food Authority (NFA) bufferstock. NFA Spokesman Rebecca Olarte said the food agency’s current ricebufferstock volume is at a “limited” level caused by weather disturbances that hit some regions in the country last month. “Right now, our bufferstock is slowly depleting. As early as November, the NFA has requested for authority for rice importation,” she told reporters in an interview on Monday. “Now, the NFAC has given us a standby authority to import 250,000 metric tons of rice. But, as to when this will arrive and the implementation of it, it [would still have to pass through] the Food Security Committee,” she added. Data obtained by the BusinessMirror showed that the NFA’s ricestockpile level is only good for three days, way below than its LegislativeExecutive Development Advisory Council-mandated stock requirement of 15 days at any given time.

DTI’s Lopez says investors’ confidence remains high despite TRAIN passage

rade Secretary Ramon M. Lopez said confidence of investors in the country remains high even with the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Act this year. In an interview on Radyo Pilipinas’s Cabinet Report sa Teleradyo with Presidential Communications Operations Office Secretary Martin Andanar over the weekend, Lopez cited that the

sustained strength of the Philippine Stock Exchange index (PSEi) during the last trading days in the stock market in 2017 until the first of 2018 reflected investors’ confidence in the country, even as the new law already took effect. He added that the Philippine Stocks Exchange (PSE) has kicked off the year with a record-level index. During the last trading day of 2017, PSEi

closed to an all-time high 8,558.42 points compared to its previous year’s index of 6,840.64. Last Friday it sustained its rally ending the day with 8,770.00 points. This is despite the TRAIN Act hiking stocktransaction tax in the PSE to 0.6 percent, from 0.5 percent. “The confidence of our investors is sustained,” Lopez noted in Filipino.

He added that, with more investors buying more stocks in listed companies, these firms are also expected to boost their businesses that will buoy the economy. The trade chief said investors remain confident putting in investments here with the country’s strong economic growth. He added that the robust manufacturing sector has pushed for expansion of production capacity of factories, which means companies

have to increase their employment. As more Filipinos become employed, consumer activity increases, which is one of the main drivers of the country’s strong economic expansion. “You have consumer activity, you are attracting investments, you are creating jobs. So, it’s a virtuous cycle,” Lopez noted in Filipino. Meanwhile, the Trade chief also dismissed claims of the Makabayan bloc at the

House of Representatives that the TRAIN law is anti-poor and will cause burden with the increase in prices of goods and services brought by additional excise tax on petroleum products. “Those remarks—I would say, rhetoric— have no basis,” Lopez said, noting that the TRAIN law was being carefully studied by the government. PNA

www.businessmirror.com.ph

Banking&Finance BusinessMirror

Editor: Jun B. Vallecera • Tuesday, January 9, 2018

Lapeña vows within-target customs collection this year

he Bureau of Customs (BOC) is confident of hitting its target collection for 2018 on the basis of efforts to reform agency processes and the reshuffling of some of its employees to further cut down red tape.

A c cord i n g to B O C C om m i s s ion er Isidro S. Lapeña, the strong bure au p e r for m a nc e i n t he Ju l y - t o Se ptember qu a r ter l a st yea r when he b e c a me c u s tom s com m i s s ione r showed great improvement in terms of revenue growth. For 2017 the BOC posted a 97.8-percent growth in performance with revenue cash collections amounting to P457.63 billion. This fell short by 2.2 percent from the agency’s target for the year. T he Development Budget Coordination Committee (DBCC) earlier set for t he BOC a P467.90 -bi l l ion collection target for 2017 and another

P637.1 billion for 2018. “As far as I am concerned, that’s a very good performance on our side considering that it’s just within four months. We almost hit our target. We just lacked 2.2 percent,” Lapeña said at the flag-raising ceremony on Monday. The BOC posted revenue collection amounting to around P41 billion during September 2017 when Lapeña took over the agency, P42 billion for October, P46 billion for November and P44 billion during the last month of the year. The collections were pointed out to be the highest in terms of average monthly collections by the bureau.

“We were able to do it in the last four months of the year. It’s still not perfect but we are hitting it right already. If we are able to correct our operations, then I am confident that we will reach our target [for 2018],” he said. The customs chief further said a stronger BOC Internal Affairs and Integrity Unit would be put in place this year. The unit is responsible for investigating bureau personnel reported involved in corrupt acts. He added that a reshuffling of personnel would continuously be pursued to ensure all BOC employees comply with the agency’s mandate and help boost revenue collections. “You expect a major reshuffle coming your way. We know you and there will be a movement. And I will continue doing that. It’s for us to do things the right way. I have moved 641 people. I don’t like to do it but I am going to do it,” he said. The prime mandate of the secondhighest revenue-generating agency is collect customs revenue from imported goods and to suppress smuggling and other customs fraud. Rea Cu

China tells banks to limit risk from entrusted loan business

hina took another step to clamp down on leverage in the financial system, ordering banks to ensure they aren’t exposed to risks from their entrusted loan business. Banks can only act as intermediaries when arranging entrusted loans, and must not provide guarantees or get involved in decisionmaking, according to new rules posted in a statement on the China Banking Regulatory Commission’s web site over the weekend. The CBRC’s measure is the latest attempt by China to curb the threat that excessive leverage in the financial system poses to the nation’s economy. President Xi Jinping and his senior economic officials have vowed to make controlling financial risks a top priority, a pledge renewed at the Communist Party’s twice-a-decade leadership congress last October. The entrusted loan business, which normally involves companies providing finance to each other with banks acting as inter-

mediaries, has seen “certain potential risk hazards” due to rapid growth and a lack of regulation, according to the CBRC statement. Entrusted loans can’t be used for investments in bonds, derivatives, asset-management products or equities, the CBRC said, adding that banks cannot put their own money or funds they manage into such loans. Entrusted loans contain higher credit risk because they are less regulated and often extended to risky areas, such as local government financing vehicles and property developers, according to Terry Sun, an analyst at RHB Securities Hong Kong Ltd. Higher yields offered by entrusted loans have prompted some nonfinancial corporates to put their spare cash in such offerings, he said. “This would magnify system leverage and push up funding costs for the real economy,” Sun wrote in a note. The CBRC’s measure should therefore “reduce leverage and the circulation of capital within the financial system.”

Wanted: Squeaky-clean technocrat to run the Bank of Korea

outh Korean President Moon Jae-in’s biggest personnel challenge for 2018 may be finding a new central bank chief to guide interest rates higher without upsetting capital flows or the nation’s indebted households. But first, he’ll have to find someone who can pass muster in parliament, where members of both the ruling and opposition parties are expected to focus as much on ethical standards as economic expertise. In the wake of political and corporate scandals that toppled the previous administration, three of Moon’s initial picks to be ministers failed last year under heightened scrutiny. The candidate to succeed Gov. Lee Ju-yeol, whose four-year term ends on March 31, could be in for an even tougher time. They’re likely to face the spotlight alone now that Moon has filled his Cabinet. “Ethics is an important issue, but it’s disappointing that enough attention isn’t given to the expertise and policy stance of candidates during hearings,” said Kim Jung-sik, a professor of economics at Yonsei University in Seoul. “The new governor will have the dilemma of whether to minimize capital-outflow risks by following the Federal Reserve (the Fed), or to put more focus on boosting the domestic

economy.” The Bank of Korea (BOK), which raised rates to 1.5 percent last November, has signaled its next steps will be gradual. Economists surveyed by Bloomberg project one or two hikes of 25 basis points in 2018, with the central bank taking a cautious approach after years of cutting rates took the benchmark to a record low and household debt to an all-time high. The trouble is, the Fed is forecast to raise rates three times this year, which may push benchmark borrowing costs in the United State above those in Asia’s fourth-largest economy. While this has happened before, policy-makers in Seoul worry that the rate differential, coupled with acute military tension on the Korean peninsula, could accelerate capital outflows. The change at the BOK also comes amid a broader changing of the guard at some of the world’s most important central banks this year. Jerome Powell will succeed Janet Yellen as chairman at the Fed, Zhou Xiaochuan may retire after his record 15-year tenure at the top of the People’s Bank of China and Bank of Japan Governor Haruhiko Kuroda’s current term is due to end. Moon hasn’t dropped any hints about potential candidates for governor, but local media has speculated on many names. These

BCDA remits ₧5.22B to National Treasury

he Bases Conversion and Development Authority (BCDA) has remitted to the National Treasury a total of P5.22 billion, including guarantee fees and dividends, from January to December 2017, the highest amount generated by the agency so far compared with its previous full-year remittances since 2012. Of the amount, P4.839 billion—representing revenues generated from assets disposed by the BCDA from January to date—will go to the Armed Forces of the Philippines (AFP) modernization program and other beneficiary agencies as provided under the law. In a report to Finance Secretary Carlos G. Dominguez III, the Bureau of the Treasury (BTr) said the remittances for the period are broken down as follows: dividends worth P130 million; guarantee fees worth P250 million; and disposed assets worth P4.839 billion. BTr data show the remittances of the BCDA to the Treasury amounted to P3.93 billion in 2016, of which P3.39 billion was contributed to the AFP Modernization Program. This sum was higher than the BCDA’s 2015 remittances of P3.201 billion, of which P1.5 billion went to the AFP modernization program. The BCDA’s remittances in 2014 dipped slightly to P2.207 billion, of which P1.588 billion was for military modernization. In 2013 the BCDA generated P2.389 billion and contributed P1.692 billion to the AFP Modernization Program. For 2012, which was prior to the enactment into law of Republic Act (RA) 10349, or the Revised AFP Modernization Act,

BCDA remittances reached P348 million, of which P245 million went to the military’s modernization efforts. In a report posted on its web site, the BCDA said that under RA 10349, or the Revised AFP Modernization Act of 2012,” the agency has the authority “as the corporate arm of the AFP and the Department of National Defense, in the disposition and development of camps not covered by RA 7227 [the BCDA charter].” RA 10349 also extends the AFP modernization program another 15 years, designed to boost the country’s external defense capability, according to the BCDA. In a statement, the BCDA said the recent remittance of P1.2 billion was in addition to the P3.6-billion contribution remitted earlier this year for the AFP Modernization Program, for a total of P4.8 billion to date, which “accounts for a 300-percent increase from the average contribution of P1.5 billion for the period 2006 to 2015. The amount also increased significantly from the 2015 remittance of P2.2 billion.” “To date, the BCDA has raised a total of P36.6 billion for the AFP modernization program, which is allocated for the purchase of military equipment to ensure sustained capability upgrade of the Armed Forces. Of the amount, P25.2 billion accounts for the AFP share, while P11.4 billion is earmarked for the replication of military facilities, such as housing units, hospitals, churches and museums, among others. This is in line with BCDA’s mandate to strengthen the Armed Forces while building great cities,” the BCDA said.

five have appeared repeatedly in reports: n Kim Kwang-doo, vice chairman of South Korea’s National Economic Advisory Council. n Park Bong-heum, a former central bank board member and former planning and budget minister; n Shin Hyun-song, economic adviser and head of research at the Bank for International Settlements in Basel; n Jang Byung-wha, a former senior deputy governor of the BOK; and n Rhee Chang-yong, director at the International Monetary Fund in Washington. While the law allows Lee, 65, to be reappointed, and he came through ethical probes unscathed, a governor hasn’t been kept on for second term since the 1970s. His successor can expect a grilling from lawmakers on the lookout for anyone who has evaded taxes, made speculative property-market trades, falsely reported an address or dodged military service. Moon’s first pick for labor minister stepped down last year after a drunk driving charge came to light. His initial choice for justice minister withdrew following allegations he forged a marriage document 40 years ago and a candidate to lead a newly

created ministry for small and medium enterprises dropped out amid controversy over his views on creationism and Korean history. Moon pressed ahead with his appointment of Foreign Minister Kang Kyung-Wha, who admitted to using a fake address to get her daughter into a high school, and he has the power to defy parliament if he thinks his choice is worth the political fallout.

Case clippings

By Justice S J Ranada Jr. ACCOMPLICES–previous knowledge required In a prosecution for murder, the act of an accused in throwing a stone at the victim before a co-accused shot the victim, does not necessarily demonstrate his concurrence with the criminal purpose of his co-accused; he cannot be held as an accomplice to the consummated homicide because the cooperation must be assistance knowingly or intentionally given, and which is not possible without previous knowledge of the principal’s criminal purpose. Napone v. People GR 93085 29 Nov. 2017 Martirez, J

Maximizing OFW earnings

t would take long lines, a clean bill of health, early-morning appointments and lots of patience before one gets a chance to work in another country to earn better pay than that offered locally. However, being an overseas Filipino worker (OFW) often makes one the automatic breadwinner expected to upgrade the lifestyle of their loved ones back home while toiling blood sweat and tears from afar. Lots of OFWs on finance forum pages ask which investment is best for optimizing return for their hard-earned money. With this in mind, how does an OFW make more out of the money they make and maintain the lifestyle they set for their families?

Protection first more than anything else

Families usually save up most of the remittance sent by overseas relatives and that is a good foundation for building an emergency fund. However, one often forgets that an OFW far from his family faces a higher risk of sickness, accidents and untimely death than when they are working here in the Philippines. One forgotten aspect is protecting their finances as they work abroad. This is why having a life-insurance policy is a primary need to alleviate contingent costs if the unthinkable happens. One could get a policy abroad but do not forget to get one also in the Philippines. The critical illness plan, for example, would provide one with immediate cash once diagnosed with a life-threatening disease and usually disbursed upon diagnosis. In all cases, provide copies of the

There is no deadline for the announcement on Moon’s pick, but the nomination for Lee was made less than a month before his predecessor’s term ended. After the governor post is filled, Moon will soon face another personnel decision at the BOK, with board member Hahm Joonho’s four-year term ending in May. The remaining members’ terms end in 2020.

Don-Don Crisostomo

personal finance insurance plans to your beneficiaries and choose a life-insurance company abroad that has a Philippine office so that communication is addressed quickly should something unexpected happen.

Make sure that all debts have been paid off

An OFW application process entails a lot of costs. From transportation to documentary and medical requirements and sometimes, an expensive placement fee. Our modern-day heroes wallow in debt just to find higher pay outside the country. A lot borrow money from relatives and financing agencies but a greater number fall for loan sharks that demand ridiculously high interest rates in exchange for immediate loan without the necessary documents and/or collateral.

Study several financial instruments available both locally and abroad

This would probably be the most boring thing that an OFW has to do. But this has to be done. One of the fastest ways to gain knowledge is to ask registered financial planners. A word of caution, some financial professionals abroad bill their clients

by the hour. Also, do not to be blinded by the rate of return of your investment. Always remember that a high rate of return entails higher risks. The lower the earnings, the lower the risk. Be on the lookout for people guaranteeing high returns. If something is too good to be true, it probably is. Always keep your emotions in check when investing.

Which financial instrument should be entered first aside from life insurance?

It depends entirely on your level of knowledge of financial instruments. Always go for low-risk investment first to get you going and then study the highrisk instruments along the way. With this, you not only get the most out of your money but you also have the advantage of having the know-how of financial instruments in and out of the Philippines. Our OFW’s are seen as heroes and their remittances help underwrite the economy and our collective-spending power. The best investment OFWs can make depends on their habits and how they allocate their earnings to provide for emergencies, financial risks and wealth building. To our OFWs, we salute you on your contributions to our country and may this help in providing more for you, your family and community. Don-Don Adolfo Crisostomo is a registered financial planner of RFP Philippines. To learn more about financial planning, join the 67th RFP program this January 2018. To inquire, e-mail info@rfp.ph or text <name><e-mail> <RFP> at 0917-9689774.

Tuesday, January 9, 2018 • Editor: Lyn Resurreccion

The World BusinessMirror

Malaysian opposition names Mahathir, 92, as PM choice

UALA LUMPUR, Malaysia— Malaysia’s opposition alliance has named 92-year-old former Prime Minister Mahathir Mohamad as its prime minister candidate for the upcoming general elections to boost its chances of wrestling power from a coalition that has ruled since independence.

The announcement last Sunday by the four-party Hope Alliance puts an end to squabbling over the thorny issue and is seen as a major show of unity ahead of polls that must be held by August but are widely expected in the second quarter. Prime Minister Najib Razak has clung to power despite an epic corruption scandal that involved hundreds of millions of dollars passing through his bank accounts. Support for his ruling National Front coalition has dwindled in the last two elections. In 2013 the coalition lost the national popular vote for the first time to the opposition. Analysts said the opposition still faces an uphill battle due to party infighting, unfavorable electoral boundary changes and strong support for the government from rural ethnic Malays. “Clearly the opposition is trying

hard to prove that they are united. It is a potential risk [to Najib], as Mahathir is still attractive to the Malays, but the government still has the upper hand due to an unlevel playing field,” said Wan Saiful Wan Jan, who heads the think tank Institute for Democracy and Economic Affairs. Government leaders scorned the candidacy of Mahathir, who will be the world’s oldest leader if the opposition wins. Government minister Abdul Rahman Dahlan called his candidacy a stumbling block to the opposition’s reform agenda. “It’s laughable for [the opposition] to appoint Mahathir as the next PM and expect him to implement those reforms,” he tweeted. “It’s a tragedy to their own cause.... anyway, I thank [the opposition] for making it even easier for [the ruling coalition] to win the upcoming general election.” Mahathir, Asia’s longest-serving

Former Malaysian Prime Minister Mahathir Mohamad speaks during a forum in Shah Alam, Malaysia, in this August 13, 2017, photo. AP/Daniel Chan

leader for 22 years before stepping down in 2003, was an authoritarian who made a high-profile return to politics in a bid to oust his protegé Najib. Najib has sacked critics in his own government, including an attorney general and deputy prime minister, and muzzled the media since the scandal erupted two years ago. The United States and several other countries are investigating allegations of cross-border embezzlement and money laundering at 1Malaysia Development Berhad, a state investment fund set up and previously led by Najib to promote economic development but which accumulated billions in debt. Najib has denied any wrongdoing. The opposition coalition last Sunday also agreed on allocation of seats for the polls and to limit the prime minister’s tenure to two terms if they win.

The number of years former Malaysian Prime Minister Mahathir Mohamad has served before stepping down in 2003

The coalition, which includes the party led by jailed former Deputy Prime Minister Anwar Ibrahim, also said they will seek a royal pardon for him so that Anwar can take over from Mahathir as the next prime minister. Anwar was Mahathir’s deputy until he was sacked in a power struggle in 1998 and later imprisoned on charges of corruption and sodomy that Anwar said were trumped up. Anwar was freed in 2004 but, in 2015, he returned to prison following a second sodomy conviction that critics said was a political conspiracy to break up the opposition. He is due for release in June. Mahathir told The Associated Press in an interview last year that the opposition could win a simple majority in the polls by tapping into anger at Najib’s corruption scandal and rising cost of living. AP

May emerges stronger in 2018, ready to finally reshuffle Cabinet T

heresa MAY bid farewell to 2017 by firing her deputy and is starting the new year with a Cabinet reshuff le, a sign the British prime minister is intent on seeing Brexit to completion and fighting another election. That’s a change in circumstances for a leader often derided in 2017 as so weak that she might not last to Christmas after the disastrous June election, plots to oust her and a jinxed performance at her Conservative Party’s annual conference. The latest YouGov opinion poll shows the Tories nudging back above their main opposition—albeit by a mere single percentage point. The ever-changing fortunes of the United Kingdom leader are a reflection of the instability that’s become a fixture of the country’s political landscape since the historic referendum of 2016 that sent the world’s fifth-biggest economy on a path to exiting the European Union. May came to power on the back of that vote, and her fate has become inextricably linked to the outcome of a messy divorce process that’s just through its first stage of completion. The perception that she’s only about Brexit is one she’s trying to change, with an injection of new blood into the Cabinet without disturbing the delicate balance of pro and anti-EU voices at the top.

Change ‘soon’

In her first interview of 2018, the first question asked of May was whether she was now “strong enough” to pull off a reshuffle that’s been speculated about for months. This time, she didn’t demur and conceded that the makeover “will be soon, yes.”

becoming prime minister one day.

See you in 2022

Theresa MAY

“Well, it’s no prizes for guessing,” she said last Sunday in a recorded interview for the BBC’s Andrew Marr Show. The departure of her righthand man Damian Green before Christmas “means that some changes do have to be made, and I will be making some changes.” That begs the question about the degree of the overhaul, which, according to the latest newspaper accounts, is unlikely to touch Boris Johnson, the biggest thorn in May’s side. The foreign secretary has defied May repeatedly and committed the kinds of gaffes that would typically get other ministers fired. But his special position in anti-EU circles as a guarantor of Brexit have kept him in place and underscored May’s difficult position in managing warring Tory factions.

New blood

What’s expected from the reshuffle is the promotion of fresher faces from a younger and more

diverse generation of Conservatives—an attempt to alter the image of a party seen as out of touch compared to Labour, which was able to convince apathetic young Brits to cast their vote in June. According to the Sunday Times, Health Secretary Jeremy Hunt or Transport Secretary Chris Grayling could step into Green’s shoes while Johnson, Chancellor of the Exchequer Philip Hammond, Brexit Secretary David Davis and Home Secretary Amber Rudd will stay put. Those slated to move or be given the boot include Conservative Party chairman Patrick McLoughlin, Education Secretary Justine Greening, Business Secretary Greg Clark and leader of the Commons Andrea Leadsom, the newspaper said. Among those tipped for ministerial posts are Suella Fernandes, head of the European Research Group comprising euroskeptic Tory backbenchers, and Tom Tugendhat, chairman of the Foreign Affairs Select Committee and a man who’s shown open interest in

Back in August, the thought of May being around to stand for reelection was deemed laughable within her own party. But she’s on the record during her last overseas trip that she’s “in it for the long term.” And the man who dealt her a stinging defeat in parliament over her flagship Brexit legislation agrees she’ll last the course. “My view is that the prime minister is likely to be in office till 2022,” Dominic Grieve, the former attorney and Tory rebel, said on the LBC Radio show. He’s made the case that draft legislation transposing EU law into the UK statute books would give the government too much power and shut out Parliament. According to Grieve, the only thing that could bring May down is if the Northern Irish party propping up her government decides to withdraw support. And that’s a possibility at some point given that the problem of what to do with the Irish border post-Brexit has been parked to allow negotiations to move on to trade. Those talks will begin in earnest in March, with the idea being that the contours of a trade agreement will emerge in October. That could all unravel, though, and it remains to be seen how May will achieve her aim that it include financial services—the motor of the British economy—when many in Europe are keen for a slice of that lucrative business. After Brexit, May, last Sunday, said she wants “to fight” the next election set four years from now, repeating the line that she is “not a quitter.” “Obviously, I serve as long as people want me to serve,” May said. Bloomberg News

www.businessmirror.com.ph

Bannon backing away from explosive comments

ASHINGTON—President Donald J. Trump’s supporters moved aggressively last Sunday to counter revelations in a new book that some of his closest aides believe he is unstable and ill-equipped for office, an assault that prompted the source of some of the most damning accusations, Stephen K. Bannon, to issue a striking mea culpa. The multipronged attack, punctuated by a heated appearance on a Sunday talk show by a top White House adviser who was once a close ally of Bannon, was a sign of how the White House has been reeling from the allegations. The adviser, Stephen Miller, who had been aligned with Bannon in pushing the president’s nationalist agenda, derided him last Sunday as a fame-seeking blowhard and the book, Fire and Fury: Inside the Trump White House, by Michael Wolff, as a work of fiction. Soon after came a rare and lengthy statement of repentance from Bannon who, over the last week, found himself isolated from his political allies and cut off from his financial patrons. Speaking out five days after he was quoted harshly criticizing the president and his eldest son, a delay he said he regretted, Bannon tried to reverse his statements completely, calling Donald Trump Jr. “both a patriot and a good man.” He is quoted in the book as calling the younger Trump’s meeting with Russians in 2016 “treasonous.” But, in the statement last Sunday, first reported by Axios, he said his reference to “treason” had been aimed not at the president’s son, but at another campaign official who attended the Trump Tower meeting, Paul Manafort. Bannon is not known for secondguessing himself and views apologies as signs of weakness. Nowhere in his statement last Sunday did he actually say he was sorry. But the turn of events represented a stunning reversal of fortune for a man who once operated with such autonomy in the White House that, as chief strategist, he reported only to the president himself. While the attack on Bannon may have prompted an unusual expression of contrition from him, the collective force of the attempts to defend the president also ensured that the questions about his mental fitness raised in the book will continue to command attention. This comes as Trump enters a critical period needing to pass legislation like a spending measure to keep the government open. The president returned to the White House on Sunday from Camp David, where he had held meetings with Republican leaders in Congress, Cabinet officials and senior staff members to set priorities for the year. After an initial message on Twitter that focused on policy matters like border security, the opioid epidemic, infrastructure and the status of young unauthorized immigrants, Trump joined the offensive against the book and the media coverage of it. “I’ve had to put up with the Fake News from the first day I announced that I would be running for President,” he wrote on Twitter. “Now I have to put up with a Fake Book, written by a totally discredited author.” Bannon has been the target of

derision by the president, who has labeled him “Sloppy Steve” and has said he played a far lesser role in Trump’s political rise than he has been given credit for. Even out of favor, Bannon has said he remains a champion of the president’s agenda. But Miller, the president’s senior policy adviser, acidly criticized Bannon in an interview on CNN, calling his comments in the book “out of touch with reality,” “vindictive” and “grotesque.” In a week that held one indignity after another for Bannon, who has fancied himself a revolutionary poised to tear down the Republican establishment, the words of Miller may have cut the deepest. Miller became a Bannon protégé of sorts during the time Miller worked for Attorney General Jeff Sessions when Sessions was in the Senate. He became one of the leading voices on the right calling for tighter controls on legal and illegal immigration. The two men shared not just a nationalist-tinged conservative view on policy but a desire for political provocation. Bannon and Trump were delighted by and cheered on some of Miller’s more infamous and combative episodes with the media, like when he chastised a CNN reporter for displaying “cosmopolitan bias” in his understanding of the White House’s immigration positions. Miller, however, bristled at the suggestion that he was a Bannon creation, a perception Bannon himself often encouraged. Bannon’s allies understood the White House’s moves this past week to be an act of ruthless political war much like Bannon himself might have waged during his time in the administration. They said they believed that the president and senior aides like Kellyanne Conway, who is close to Rebekah Mercer, the billionaire who issued a rare statement last week disavowing Bannon, were sending activists and donors a clear message: He is persona non grata in conservative politics. Mercer is a partial owner of Breitbart News, the hard-right web site where Bannon is executive chairman but where his future is now in doubt. Last Sunday it was Miller who had the political leverage. He cast as false the perception that Bannon had ever played a Svengali-like role in the presidential campaign and the White House. He said Bannon’s role had been “greatly exaggerated,” even as CNN host Jake Tapper ticked off a long list of policies he said Bannon had played a key role in formulating. In Fire and Fury, Bannon said Trump had “lost his stuff,” and Miller also tried last Sunday to counter the concerns about the president’s mental state. Echoing the president’s own words from Saturday, he called Trump a “political genius” who could rattle off complete paragraphs on the fly in response to news events and then deliver them “flawlessly” to a campaign audience. The interview, on the program State of the Union, quickly grew heated as Tapper accused Miller of being “obsequious” and speaking to an “audience of one.” Before it ended, Tapper told Miller that he was wasting his audience’s time. New York Times News Service

BBC news editor quits post to protest gender-pay gap

senior editor for BBC News accused the network in an open letter last Sunday of operating a “secretive and illegal” salary system that pays men more than women in similar positions. The editor, Carrie Gracie, who joined the network 30 years ago, said she quit her position as China editor last week to protest pay inequality within the company. In the letter posted on her web site, she said that she and other women had long suspected their male counterparts drew larger salaries and that

BBC management had refused to acknowledge the problem. She said she decided to make her story public, risking discipline or dismissal, because she wanted viewers to know the BBC had been “resisting pressure for a fair and transparent pay structure.” “I simply want the BBC to abide by the law and value men and women equally,” Gracie wrote, citing the Equality Act 2010, which states that men and women doing equal work must receive equal pay. “On pay, the BBC is not living up to its stated values of trust, honesty and accountability.” New York Times News Service

The World BusinessMirror

www.businessmirror.com.ph

Tuesday, January 9, 2018

India clings to cash, as tech firms push digital money

LIGARH, India—Signs and banners for Paytm, India’s biggest digital payments service, festoon Pooran Singh’s cell-phone shop, where people drop in all day to add data or talk time to their prepaid phones.

Yet, few of these people actually use Paytm at the store, which straddles two dusty streets in this sleepy north Indian city in which tractors jostle with cows for space on the narrow roads. “People recharge in cash,” Singh said, after a young man handed him 20 rupees (about 32 cents) to top up his mother’s phone. The scene in Singh’s shop underscores a persistent reality of India’s economy: People prefer cash for most routine transactions, despite intensive efforts by the government and global technology companies to lure them onto digital platforms. India’s reluctance to give up paper money poses challenges for the firms that are vying to offer electronic payments, including local players like Paytm, which has received financing from the Chinese e-commerce giant Alibaba, and American tech companies, like Facebook, Google and PayPal. “Cash is convenient,” said Caesar Sengupta, who oversees Google’s products for emerging markets. “It’s anonymous. You can use it everywhere.” Even so, tech companies see India’s low rate of digital payments as an opportunity. They all cite China, where in just a few years, mobile payments became so popular that it is now difficult to get through the day with cash alone. “In India, we’re going to see a similar rise,” Sengupta said last November, shortly after Google introduced Tez, a payments app for India. One reason for tech companies’ optimism is that digital payments

in India have increased during the past year. The value of transactions using digital wallets, the business on which Paytm was built, rose 64 percent from December 2016 to December 2017. Transactions made with the Unified Payments Interface, a government-backed technology used by Tez and many other mobile apps, went from virtually nothing a year ago to $2.1 billion last month. Leading India’s budding payments shift are Paytm and its chief executive, Vijay Shekhar Sharma. Sharma founded the company seven years ago as a way for cellphone users to pay their bills online. It is now India’s largest consumerpayments app, with 302 million account holders and 90 million active users. Customers can use it to buy goods at physical stores, book movie or airline tickets, send money to each other or order items from Paytm’s online mall. A transaction requires a quick scan of a merchant’s bar code or a few taps on a smartphone, rivaling Apple Pay or Venmo in simplicity. Sharma aspires to put his company at the center of Indians’ financial lives, and he has pledged to spend $1.9 billion over the next two years toward that goal. “Our truest ambition is for Paytm to be known as the bank for this new-age, digital, mobile world,” he said in an interview at the company’s headquarters in Noida, just outside Delhi. Merchants like Singh are crucial to Paytm’s plans.

Oil trades over $61 as drop in US rig count spurs supply optimism

il traded above $61 a barrel as signs of slowing United State drilling added to optimism that the global crude surplus is abating. Futures were little changed in New York following a 1.7-percent increase last week. Working rigs drilling for crude fell by five in the seven days ended on January 5, bringing the total to 742, according to Baker Hughes data reported last Friday, when prices slid 0.9 percent. Meanwhile, hedge funds retreated from the most bullish stance on West Texas Intermediate (WTI) oil in 10 months during the week ended on January 2. Oil had its strongest opening week for any year since 2013 last week as US stockpiles continued to shrink and amid output curbs by the Organization of Petroleum Exporting Countries (Opec) and its allies. The recent strength in crude has spurred speculation that American shale producers may be encouraged to expand drilling to take advantage of rising prices, countering the effect of cuts by Opec and its partners. “Softer prices last Friday suggest traders are looking beyond the latest rig count and eyeing the odds that current prices will induce a production response over coming months,” said Ric Spooner, a Sydney-based analyst at CMC Markets. “The WTI price is currently testing chart resistance represented by the May and June 2015 peaks. How the market handles this may set the tone for the near term trend.” WTI for February delivery was at $61.57 a barrel on the New York

Mercantile Exchange, up 13 cents, as of 3:28 p.m. in Seoul. Total volume traded was about 33 percent below the 100-day average. Prices lost 57 cents to $61.44 last Friday. Brent for March settlement added 10 cents, or 0.2 percent, to $67.72 a barrel on the Londonbased ICE Futures Europe exchange. Front-month prices rose about 1.1 percent last week. The global benchmark crude traded at a premium of $6.20 to March WTI. US explorers spent the final six weeks of 2017 in a virtual standstill, adding just as many rigs as they laid off. Bowing to heightened investor pressure, drillers are seeking to do more with less in a bid to boost profits. Their money-saving moves include opening already-drilled wells by fracking them rather than deploying more rigs to start new ones. Money managers cut their WTI net-long position—the difference between bets on a price increase and wagers on a drop—by 3.8 percent to 396,381 futures and options in the week ended January 2, according to data from the US Commodity Futures Trading Commission last Friday. Longs fell by 3.8 percent, and shorts fell 4.3 percent. Venezuela President Nicolas Maduro last Friday said Venezuela in the coming days will issue 100 million units of an oil-backed cryptocurrency known as the petro, which will be worth the price of one barrel in Venezuela’s oil basket. An Iranian oil tanker sailing to South Korea collided with a cargo ship off China’s coast and caught fire, leaving at least 32 people missing last Sunday. Bloomberg News

Our truest ambition is for Paytm to be known as the bank for this newage, digital, mobile world.”–Sharma

Patym signs at a shop in Aligarh, India, in December 2017. India’s reluctance to give up paper money poses challenges for the firms that are vying to offer electronic payments, including local players like Paytm, and American tech companies. Atul Loke/The New York Times

The company pays Singh a bounty of 20 rupees for each of the eight or so customers he signs up each month, with additional payments if a newcomer continues to use the service. He earns an additional 18 rupees each time he verifies the identity of an existing Paytm user with his fingerprint scanner, a new requirement imposed by the government on all digital-wallet companies. Singh’s phone shop has also become a virtual ATM for Paytm’s nascent banking division, which plans to turn 100,000 shops across India into mini-branches where customers can deposit and withdraw cash, get a loan and buy insurance policies. “We really want to reach the underserved, underbanked customer,” said Renu Satti, who leads the Paytm bank. Paytm’s strategy dovetails with the goals of India’s central government. Narendra Modi, who became prime minister in 2014, has sought to recast his country as “digital India,” and his government has heavily promoted cashless transactions.

In November 2016 Modi suddenly banned most of India’s currency. The edict forced people to exchange their rupees for new notes at banks, setting off a short-term cash crunch and prompting many Indians to consider digital options. Still, the country’s cash economy has endured. Only one-third of India’s 1.3 billion residents have access to the Internet. Of those who are able to go online, just 14 percent make mobile payments at least once a week, according to Kantar TNS, a research firm based in London. Consumer trust is a big issue. Ghani Khan, who was finishing a snack with his wife at Aligarh’s lone McDonald’s, said that someone had once stolen 3,300 rupees, what would be about $52 now, from his Paytm account. “People feel scared to use these apps,” Khan said. Although he got his money back, he now avoids payment apps, preferring to use cash or his debit card. (Paytm says that most such problems are related to thieves

who call users and persuade them to turn over sensitive account data.) Merchants also worry that officials are promoting digital transactions as a way to better track commerce—and collect more taxes. Anusheel Shrivastava, a top Kantar executive in India, said his firm found that 6 percent of mobilephone users made at least one digital transaction a day in 2017, up from 2 percent in 2016. That number is likely to increase further when WhatsApp, the messaging service owned by Facebook, adds payments to its service in the next few months. Paytm stands out in part because of the 10,000 employees that it has in the field to help new businesses use the service, educate existing ones about new features and troubleshoot problems. There are about 6 million merchants in its network, from giant multinationals like Uber to tiny neighborhood sweet shops. “We have to train them, we have to retrain them, we have to visit

them,” said Yashwin Gupta, who oversees a team of 65 Paytm representatives in the region that includes Aligarh. “That’s our daily job.” The job is getting easier now that Paytm is better known. Last month Mukesh Gupta sought Paytm’s help in setting up the service for his toy shop here after 10 percent to 20 percent of his customers asked to pay with Paytm. “People like to spend money on more than just needs,” he said. Aligarh, with 1.2 million residents, is a barometer for Paytm’s progress because it is a midsize city, and because Sharma, the company’s chief executive, grew up nearby. On one visit home, he said, he met a Hindi-speaking merchant who did not know how to get money out of Paytm and into his bank. The problem? Paytm’s app for merchants was in English, and the icons were not clear enough for those who did not speak the language. Paytm soon developed a Hindi version. In recent months, skeptics have questioned whether Paytm can maintain its growth. The new regulations requiring customer verification could turn off some customers. The company is also spending heavily on incentives, such as giving cash back on certain purchases and free credit-card processing for merchants. Sharma said such expenses were necessary investments. “The only way to grow digital transactions is to make them free,” he said. “This is a culturally different country being built.”New York Times News Service

Macron to echo Trump’s call for more market access in China

rench President Emmanuel Macron arrives in China on Monday for a state visit that will test his ability to simultaneously woo his host, President Xi Jinping, while threatening to make life harder for him. Macron, 40, sets out on his first trip to Asia since winning office last year, seeking orders for Airbus SE while also bearing a call for greater reciprocal market access. That’s a request he must reconcile with his pursuit of a more economically sovereign Europe willing to block outside investments. To western governments, including France’s, Xi’s public defense of globalization has yet to translate into serious attempts to open up China to foreig n companies. Macron is l i kely to refer ence the paradox in a speech at the start of his tour in the symbolic setting of the ancient imperial capital of Xian, the eastern departure point of the Silk Road trade route. “The best Macron can do to help the European and French economies is to take Xi at his word on free trade and globalization and push relentlessly for more reciprocity,” said Francoise Nicolas, the director of Asian studies at the Institute for Foreign Relations in Paris. Airbus is discussing a large plane order from China during Macron’s v isit, according to people f a m i l i a r w it h t he plans. The size of the order is in flux, while talks are focused on A irbus’s A320 single-aisle

and A330 and A350 wide-body jets, said the people, who asked not to be named discussing the negotiations. Reuters earlier reported that the Toulouse-based company was in talks on the sale of at least 100 planes going to Chinese carriers. Pushing hard is still no guarantee of success. President Donald J. Trump made similar demands during his own state visit to Beijing last November, and left town with little in terms policy assurances—albeit financial services were a notable exception. The United State is now counting on Europe to help provide a united front against China on trade.

Naive Europe

Since taking office last May, Macron has advocated that the European Union strengthen its defenses in the face of both US and Chinese trade competition, saying the bloc must end its “naive” approach. For France as for the European Union, making the trade relationship with China more balanced and fair would help to narrow deficits. In Macron’s case, that deficit amounts to some €30 billion ($36 billion), France’s largest bilateral trade shortfall. In a speech to French diplomats in Paris last Thursday, Macron insisted that his push is “not for protectionism, just for protection where needed and reciprocity.” Europe, he said, “had its door wide open when others had it half or three-quarters closed.” While the new French leader’s

active foreign policy makes him a potential ally—not least with his pledge to provide help in maintaining stability in Asia— his stance on trade may be less welcome. Beijing sees new European trade and investment rules supported by France as discriminatory to Chinese businesses. “ The recent trend of trade protectionism and populism in Europe makes China worried,” said Feng Zhongping, vice president of the China Institute of Contemporary International Relations, a government-backed think tank in Beijing. “Currently, there is growing suspicion and even hostility about rising Chinese influence in the world. China hopes France can at least hold a fa ir and level-headed stance, and not side with those spurious arguments.”

Financial access

Macron and Xi will discuss how to “safeguard multilateralism and an open world economy,” Chinese Foreign Ministry Spokesman Geng Shuang told reporters last Friday. Macron may remind Xi of his pledge to Trump to further open the Chinese economy, and ask for more access for financial institutions after China announced a plan to remove ownership limits on banks and asset-management companies. BNP Paribas, société genéralé, BPCE Natixis executives are traveling with Macron, his office said. Xi will accompany Macron on a visit to the Forbidden City—the

imperial palace that served as the political center of China’s government for almost 500 years—and to a start-up incubator, where the French president will deliver a speech. There will be a state dinner for Macron and his wife Brigitte. He will also visit the Chinese Space Academy. The two leaders already share views on climate change and the Paris Accord. Human rights questions will be raised “in a spirit of efficiency,” French officials said, suggesting the topic won’t play a major role. Macron’s finance minister, Bruno Le Maire, told the Wall Street Journal last December after his own visits to China and Russia that France was looking to them to act as “a counterweight” to increasingly uncertain trade relations with the US and the United Kingdom after Brexit. T hose sa me econom ic u ncertainties make it harder for Fra nce to adopt a h a rd-l i ne trade stance toward China, said Wang Yiwei, director of Renmin University’s Institute of International Affairs in Beijing and a former Chinese diplomat based in Brussels. “There’ll be more mutual economic benefits to reap if France and the EU adopt a more conciliator y stance to work with rather than against China, especially against the backdrop of the ‘A merica First’ Trump ad m i n i st rat ion,” Wa ng sa id . “Reciprocit y from China is a by- produc t of a cooperat ive attitude.” Bloomberg News

The Regions

A4 Tuesday, January 9, 2018 • Editor: Efleda P. Campos A8

BusinessMirror

Japan to start detailed engineering design for PNR Clark North Phase 2

By Ashley Manabat | Correspondent

LARK FREEPORT—The detailed engineering design for the second phase of the Philippine National Railways (PNR) Clark North Project from Malolos City in Bulacan to the Clark International Airport (CIA) here has started. Japanese Ambassador to the Philippines Koji Haneda said the Japan International Cooperation Agency

(Jica) began the DED of the project. Haneda made the remark last Friday during the groundbreaking

of the PNR Clark North Phase 1 linking Tutuban in Divisoria, Manila and the historic Malolos City in Bulacan. The first phase of the PNR Clark North is 38 kilometers, while the second phase is 69.5 kilometers. Transportation Secretary Arthur P. Tugade said the railway track of the P150-billion PNR Clark North Phase 2 will be built to serve the new terminal of the CIA which is also currently being constructed and will be finished by 2020. Tugade said Phase 1 of the PNR Clark North will be completed by 2021, ahead of the 2022 original schedule.

He said once completed, the entire PNR line from Tutuban all the way to the Clark airport will be an electrified, fully elevated and standard gauge railway. The majority of the P150-billion financial requirements of the PNR Clark North Phase 2 will be provided by Jica as a result of the October 2017 second official visit to Japan of President Duterte. Jap a ne s e P r i me M i n i s te r Shinzo Abe is committed to extend official development assistance for the PNR Clark North Phase 2 project on top of the P93 billion provided by Jica for the P105billion PNR Clark North Phase 1, Haneda said.

SBMA blacklists brokers in ₧40-M liquor smuggling try Story and photo by Henry Empeño | Correspondent

UBIC BAY FREEPORT—The Subic Bay Metropolitan Authority (SBMA) has blacklisted three customs brokers for their involvement in the foiled attempt to spirit out P40 million worth of expensive liquor from this free port. SBMA Chairman and Administrator Wilma T. Eisma said on Monday this was the initial action of the agency after its Law Enforcement Department (SBMA-LED) thwarted the smuggling operation that was timed on Christmas Eve. Eisma said the SBMA Seaport Department has identified the blacklisted brokers as Ellen Baylon, an authorized representative of the brokerage firm Alava Alliance Inc.; John Louie Pabico, a processor of Phil-Hohan International Corp.; and Cherry Springael, a freelance processor and also an authorized representative of Alava Alliance. “ T hese persons have been banned from doing business with the SBMA Seaport, and the companies they represented have been placed on indefinite suspension pending the final results of investigation by the Bureau of Customs [BOC],” Eisma said. She added the BOC, which received custody of the smuggled items from the SBMA, will also file appropriate criminal charges against the brokers for violation of the Customs and Tariff Act, as well as Republic Act 7227, or the Bases Conversion and Development Act. “Let this serve as a warning that Subic authorities won’t tolerate illegal activities in the freeport, and we will apply the full measure of the law in cases like this,” Eisma added. SBMA records showed its police operatives seized from the botched smuggling operation a total of 1,321 boxes of liquor. T hese included 54 bottles of

@lorenzmarasigan

HE Philippine Coast Guard (PCG) is investigating a Liberian-flagged cargo ship after being intercepted with 60,000 sacks of undocumented rice with an estimated value of P120 million in Zamboanga.

DOH Mimaropa exec seeks creation of medical-assistance bureau By Claudeth Mocon-Ciriaco Correspondent

EPARTMENT of Health (DOH) Regional Director Eduardo C. Janairo of Mimaropa is proposing for the creation of a bureau for the DOH’s Medical Assistance Program (MAP) that would provide a more streamlined, consolidated and standardized system of service-delivery network for patients. Mimaropa is composed of the provinces of Oriental Mindoro, Occidental Mindoro, Marinduque, Romblon and Palawan. “There is a need to establish a Public Assistance Bureau that will provide a more streamlined, consolidated and standardized system of service delivery for patients in need of medical assistance,” Janairo said during his opening message at the 2017 Re-Orientation on DOHMAP for Luzon Cluster composed of MAP coordinators from the regions of Mimaropa, Calabarzon, Bicol, Ilocos, Cagayan Valley and the National Capital Region held in Puerto Princesa City, Palawan, last year. “We need to create a permanent agency, not just a stop-gap solution that could be dissolved anytime and one that does not restrict the use of MAP funds,” he said. The DOH’s MAP is created to provide financial support to indigent patients seeking medical examination, consultation, treatment and rehabilitation. It is made available to all government hospitals and select private health facilities duly approved by the DOH. From January 1 to November 30,

2017, DOH Mimaropa MAP recorded a total of 20,624 patients given medical assistance in the province of Palawan; 4,774 patients in Oriental Mindoro; 3,186 in Occidental Mindoro; and 152 in Marinduque. A total of P92,779,584.45 was paid in hospital bills, with funds coming from the DOH-MAP and congressional allocations. Janairo said patients in Mimaropa needing more specialized care are brought to Manila and given accommodation at the regional office while awaiting their scheduled treatment. All their basic needs are provided for during their stay, including a standby 24/7 transportation solely for their use to and from the hospital. A DOH staff is assigned to patients without companions to assist, conduct follow-ups, and aid them to and from the hospital and to their place of residence once their treatment is done and they have fully recovered. “The medical-assistance program has now evolved into a bigger servicedelivery network. We also have more funds to spend coming from various government agencies, including the Philippine Charity Sweepstakes Office, the Department of Social Welfare and Development, and allocations from the Senate and Congress, including local government units,” Janairo said. “A MAP bureau will not just assure access to appropriate, medically necessary, and quality health-care services for all indigent patient; it will also provide a responsive and timely service and accountability for the use of its resources, including a database that can be used for research,” he said.

First Filipino CEO takes over Subic marine theme park

OPERATIVES from the Subic Bay Metropolitan Authority unload seized boxes of expensive liquor for inventory after the December 28 raid at the Subic Seaport Terminal.

Remy Martin Louis XIII, which could sell as much as P170,000 per bottle; and eight boxes of Remy Martin Centaure De Diamant, which could fetch P60,000 per bottle. The SBMA police said it took action after a tipster informed them on Christmas Eve that a closed van and a Nissan Patrol SUV would attempt to smuggle contraband from the freeport. The operatives subsequently monitored the vehicles along the Argonaut Highway leading to Subic’s sea ports and tailed them to the 14th Street Gate where they were stopped by sentries. The Fuso van, bearing File 036404 of BCR Trucking, was found to contain 275 boxes of Remy Martin Cognac Champagne, 448 boxes of Martini, 66 boxes of Remy Mar-

tin XO, 17 boxes of Remy Martin Champagne, eight boxes of Remy Martin Louis XIII, eight boxes of Remy Martin Centaure De Diamant, seven boxes of Remy Martin Club, and seven boxes of Remy Martin. The driver, identified as 41-yearold Julio Flores, as well as the helper, 46-year-old Marvin Arcega, failed to present necessary documents when accosted by the police, the SBMALED said in a report. Under investigation, Flores reported he picked up the merchandise from the Subic Seaport Terminal Inc. (SSTI) at the Boton Pier here on instruction of a certain “Ed” who rented his truck for the pickup. Flores added a certain “Cherry” assured him the goods were ready for exit at Subic’s Tipo gate even without any document because two

other trucks with similar load were able to exit earlier. A follow-up operation by the SBMA police last December 28 led them to a white Isuzu Giga cab with the markings “Sinfa Logistics Inc.” parked at the SSTI’s Boton Pier facility. The 40-footer container yielded 333 boxes of Remy Martin, 196 boxes of Remy Martin XO, one box of Remy Martin Club, one box of Martini, two boxes of Remy Martin, and 10 boxes of Remy Martin Louis XIII. Eisma said the SBMA police conducted an inventory of the smuggled items in the presence of representatives from the BOC, the SBMA Seaport Department and members of the media before turning over the confiscated items and the vehicles containing them to the BOC in the Port of Subic.

PCG investigates Liberian ship with P120-M undocumented rice off Zamboanga By Lorenz S. Marasigan

www.businessmirror.com.ph

In a statement, the PCG said cargo vessel MV J-Phia was intercepted around 25 nautical miles Southwest off Olutanga, Zamboanga Sibugay, last week. It has a 50,242-gross tonnage and overall length of 282 meters. The PCG apprehended the vessel after receiving information it was transporting a cargo transferred

from a foreign vessel somewhere in the Sulu sea. “When pressed for questioning, the captain of the vessel claimed the vessel’s last port of call was Cagayan de Oro, but could not show any records of departure. The PCG units in Cagayan de Oro also disclosed the vessel had no record of departure in their area of responsibility,” the

statement read. The PCG then escorted MV J-Phia to the Zamboanga Port for proper disposition. The vessel’s owners and crew may face smuggling cases. “The PCG with the Bureau of Customs will initiate forfeiture proceedings of MV J-Phia and will file appropriate charges against its crew members,” the statement read.

ROBERT Gonzaga (second from left) is the first Filipino CEO of Subic Bay Marine Exploratorium Inc., the operator of Ocean Adventure. He is shown here with other company officials (from left) Susan L. Dudley, Alfredo Alex S. Cruz III and Manuel W. Quijano.

UBIC BAY FREEPORT—A native Olongapeño has taken over the highest executive position at the Subic Bay Marine Exploratorium Inc. (SBMEI), which operates the popular Ocean Adventure theme park and Camayan Beach Resort in this free port. Robert Ianne Gonzaga, formerly the firm’s communication director, was elected president of the company during the annual shareholders’ meeting held last month, a statement from the SBMEI said. Gonzaga, who is the first Filipino CEO of SBMEI, started out in the local broadcast media in Olongapo City, became a news correspondent for the BusinessMirror in 2014, and also wrote for the Philippine Daily Inquirer and an international wire agency. Gon zaga stepped into t he position previously occupied by Scott Sharpe, who founded SBMEI, along with Timothy Desmond and Gail Laule, 17 years ago.

Other officials elected to the SBMEI board of directors were: Jack Lin, chairman; Alfredo Alex S. Cruz III, secretary; Susan L. Dudley, treasurer; and Manuel W. Quijano, board member. SBMEI, the company that controls Ocean Adventure and Camayan Beach Resort and Hotel, has been in the tourism industry for 17 years as a company providing family-oriented activities and educational entertainment. It built Ocean Adventure as the first open-water marine theme park in Southeast Asia. The park features animal shows, dolphin, encounters and other animal-encounter programs. Subsequently, it opened the Camayan Beach Resort nearby, known for its clean beaches and natural setting. Gonzaga said the SBMEI is now eyeing the opening of its Adventure Beach Water Park this year and will be expanding its tourism activities in the coming years. Henry Empeño

Visual artists in Kalibo, Aklan launch 6th annual exhibit featuring local tourism paintings By Jun N. Aguirre Correspondent

ALIBO, Aklan—Visual artists in this province are extending their share of

promoting local tourism through art and their paintings. Erlinda Quimpo Wilson, one of the local painters, said the exhibit will run from January 9 to February 28. The venue is at the Aklan Capitol Lobby.

The event, dubbed as “Pinta Grasya Year 6,” is being initiated by the Lakbay Kulay Aklan chapter. The Aklan provincial government and the Provincial Tourism Office are also partners.

“We have been doing this activity for the past six years with the hope of not only showcasing the art works of our local talents; Aklanon international and national artists will also feature their visual

arts,” Wilson said. Among the exhibitors are Mario Perucho Jr., Alreed Zaspa, Wilfredo Custodio, Tee Jay Dadivas, Laurence Niduelan, Roy Ibarra Vicente and Merlie Tabiolo.

“This year we only not expect additional revenues, but also lure young visual artists to join our organization. Already, Lakbay Kulay has registered hundreds of members,” she added.

Global Eye BusinessMirror

www.businessmirror.com.ph

An ominous new year for India By Mihir Sharma Bloomberg View

OU’D think the Indian economy had returned to rosy health. It seems to have recovered from two enormous disruptions—Prime Minister Narendra Modi’s decision just over a year ago to withdraw 86 percent of the currency in circulation, and the poorly planned rollout in the middle of 2017 of a new goods-and-services tax. Exports are no longer declining, as they had for several quarters; indeed, for the last month that data is available, they rose 30 percent. The Purchasing Managers’ Index expanded the fastest it has in five years. At least one international ratings agency has upgraded India’s credit rating. Most important, growth sped up last quarter for the first time since early-2016. There’s every reason to think it’ll bounce back toward the 7-percent to 7.5-percent range shortly. Nothing is ever straightforward in India, however. Just as growth appears to be no longer a pressing problem, another familiar threat has reappeared: India’s macroeconomic numbers don’t look quite as stable as they should. The last few years have been something of an aberration for India. This is a country that tends toward pretty high inflation—which makes sense, if you look at it from a political economy perspective. Given India’s inefficient state, pumping up agricultural prices is pretty much the only reliable way to transfer resources to millions of subsistence farmers. Over the last few years, those price increases have slowed. Together with low demand and the fall in oil prices between 2014 and 2017, that helped drive inflation below the Reserve Bank of India’s target level of 4 percent. Things now seem to be returning to normal. Crude oil prices started inching back up last year, along with Indian inflation, which was, in the last month for which data is available, 4.9 percent. The Reserve Bank of India seems convinced it’s going higher still. Meanwhile, even Narendra Modi can’t defy India’s political economy forever. He’s under unaccustomed pressure following elections in his stronghold, the western state of Gujarat, which went down to the wire—a photo finish blamed on growing economic distress in rural areas. Most Indian politicians would

respond with a giveaway or three; Modi’s predecessor, Manmohan Singh, forgave a chunk of agricultural debt when he was up for reelection in 2009. At the very least, the increases in administrated agricultural prices are likely to get considerably less stingy. And this comes at a time when India is snowed under with sovereign and quasi-sovereign paper; it seems like practically every state government and public-sector company wants a piece of India’s bond market. In response to this flood of debt, the yield curve has steepened by a whole percentage point since July. And the government made things even worse by announcing at the end of December that it would borrow more money from the markets this financial year than planned—a fallout, perhaps, of uncertainty about revenues in the first year of the new indirect tax system. In other words, it’s not exactly the best time for Modi to be planning new spending. We’re only a few weeks away from knowing which way Modi will go. Finance Minister Arun Jaitley is due to present the federal budget on February 1. If Modi does indeed decide to ramp up spending sharply—and remember, he’s now barely months away from beginning his own reelection campaign—then Jaitley is going to have to deal with some tight fiscal numbers. The federal government is supposed to bring its fiscal deficit down to 3 percent of GDP this year; that’ll be a near-impossible task if transfers to farmers are also to be increased. So far, the sense in New Delhi is that, the prime minister wants to hold the fiscal line. Perhaps, he thinks he has the political capital to win reelection without a spending bonanza. Certainly, his government’s economic missteps don’t appear to have dented Modi’s personal popularity. If he succumbs to profligacy, though, India will find itself in a sadly familiar situation, with growth stalling, costs increasing, the deficit ballooning and inflation pushing upward and embedding itself in people’s expectations. The central bank will be tempted to cut rates just as monetary policy in the rest of the world might be tightened. Capital would then be tempted to flow out of India—and, suddenly, even its external account will begin to look shaky. This is the scenario that policymakers in Delhi are worried about. For them, 2018 is not a very happy new year.

MODI has a decision to make. SAJJAD HUSSAIN/AFP/GETTY IMAGES

Editor: Angel R. Calso • Tuesday, January 9, 2018 A9

Greece’s 10-step road map to a bailout program exit

PEDESTRIANS walk through Monastiraki Square in Athens, Greece. Prime Minister Alexis Tsipras has spent nearly two years telling Greeks that a debt deal and inclusion in the European Central Bank’s quantitative-easing program will unleash an investment boom that salves the pain of austerity. KOSTAS TSIRONIS/BLOOMBERG

By Sotiris Nikas | Bloomberg

OR Greece, 2018 is a crucial year. The key question in the months ahead for what was once the epicenter of the European credit crisis is: Will it turn the corner and wean itself of external aid like Ireland, Portugal and Cyprus—something the Greek government wants? Or, will the current bailout program, which ends on August 20, be followed by a similar arrangement—as some observers expect? “Things are looking better for Greece, having regained access to markets and with the recovery-gathering speed,” Fabio Balboni, European Economist at HSBC Bank Plc. in London, said in a January 4 note to clients. “In 2018 the country might finally exit its bailout program, but a clean exit might prove challenging if the eurozone fails to deliver substantial and credible debt relief.” Since 2010 Greece has had three lifelines from euro-area countries and the International Monetary Fund (IMF) with stringent conditions in terms of fiscal consolidation and structural reforms. It has also gone through two debt restructurings. In the next six to eight months, the Greek government and the country’s creditors have to work through some thorny issues if they want to avert yet another bailout program.

Here are the 10 crucial items on Greece’s calendar before the end of the bailout program: This week, the government plans to submit to parliament a bill to implement all the measures needed to conclude the third bailout review. New policies have to be voted on by January 17 so that auditors monitoring the program can present Greece’s compliance report at the January 22 Eurogroup meeting, which will then approve the disbursement of the next bailout tranche. In late-January, European banking authorities will finalize the scenarios under which the balance sheets of Greek lenders will be stress-tested. The banks have to conclude these audits of their capital adequacy earlier than their European Country counterparts. By early-February, Greece intends to issue a new bond,

with a maturity most likely of three or seven years, as it strives to regain full market access after years in the wilderness. During the first 10 days of February, the European Stability Mechanism is expected to disburse the bailout tranche attached to the implementation of the third review’s conditions. The amount of money Greece will get has yet to be agreed on, but it will be at least €5.5 billion ($6.6 billion), according to the Greek Finance Ministry. In February, Greek banks will start sending data to the Bank of Greece and European authorities for the stress tests. The Greek government expects that in February, creditors will start discussing further debt relief measures. In early-March the fourth bailout review is expected to begin. It isn’t clear yet when creditor representatives will return to Athens, but the review has to start in March if Greece wants to complete another 82 measures on time. One of the most important gatherings between creditors before the end of the current bailout program will take place in Washington from April 20 to 22. The IMF’s spring meetings will probably give creditors the opportunity to discuss debt relief and what’s next for Greece. In early-May the stress test results will be announced. This will show if Greek lenders need more capital and, if so, how serious the problem is for them and for Greece. By the end of May or June, both the Greek government and creditors want to conclude the fourth bailout review and strike a deal on the conditions for any further debt relief and the post-program life for

Greece. Greek authorities are ruling out any kind of new program, but the Bank of Greece’s Governor Yannis Stournaras recently said a credit line after August would boost investor confidence. European officials also say there will be some kind of “follow-up arrangement until 2022,” according to a person with knowledge of the discussions, since Greece has committed to primary budget surpluses of 3.5 percent of GDP until then. Exiting the bailout without any follow-up arrangement would create an annoyance for the country’s financial sector: It would mean junkrated Greek banks won’t be eligible for a waiver allowing them to pledge sub-investment grade sovereign assets as collateral for the European Central Bank’s normal refinancing operations, which provide the country’s lenders with around €13 billion in liquidity. This means that once Greece is no longer in a bailout program, banks would have to convert some of that into Emergency Liquidity Assistance, which carries a 150-basis-point penalty over regular credit lines.

Tough sells

GREEK Prime Minister Alexis Tsipras’s administration will have to fulfill a politically difficult privatization program as it seeks to boost growth and gain the trust of investors needed for a bailout exit. The Greek government projects that in 2018 it will manage to get €2.73 billion from the sale of state assets. But creditor estimates are more conservative and see the government falling short of its expectations. The country’s lenders are going to pressure the government to implement what has been agreed and bring in the projected revenues. By June the government has to launch the tender for the sale of 17 percent of Public Power Corp., or find some other way to monetize its stake in the utility. By the end of the first quarter, it has to do the same for the sale of 30 percent of Athens International Airport, 65 percent of Greek state-controlled natural gas supplier Depa, 5 percent of Hellenic Telecommunications Organization SA and 35.5 percent of Hellenic Petroleum SA. Greek authorities will have to complete by February key conditions needed for the start of the Hellinikon project. Failure to meet targets may jeopardize government efforts to seek additional debt relief, as creditors will demand that the government does its part for lightening its burden before agreeing to additional concessions. “What Greece has to do is stay on top of the reforms and if it does that, it creates space for the European Commission and the Eurogroup to discuss the big questions,” Mujtaba Rahman, managing director at Eurasia Group in London.

Do not expect Opec’s oil-production agreement to collapse this year By Julian Lee Bloomberg

HATEVER your view on the effectiveness of the deal between Organization of the Petroleum Exporting Countries (Opec) and a group of nonmember countries to limit oil supply in order to drain excess inventories and boost prices, there is one thing that everybody seems to agree on— they stuck to their guns much better than anyone thought possible for the whole of last year. But there is a growing chorus of voices calling the deal’s demise this year. Here’s why I believe they’re wrong. The most common reasons for suggesting that the deal will fall apart in 2018 are: A growing pressure to cheat, capitulation in the face

of surging United States shale production, or a declaration of success. Each of these is certainly plausible, but I think the risks are low. “We tend to cheat,” former Saudi oil minister Ali Al-Naimi famously observed shortly after the output deal was agreed in November 2016. That has certainly been a perennial problem for Opec in the past, but it may be much less of a problem in the coming months. That’s not because of some newfound sense of collective responsibility so much as the fact that those countries most prone to flouting their pledges simply can’t do so at the moment. They are already producing at, or very close to, full capacity. Sure, Iran and Iraq are both planning to add additional new facilities this year, but they are probably the

only ones. Recent unrest in several Iranian cities prompted fears of disruption to the country’s oil supply, but a much bigger threat comes from any toughening of US sanctions, which could once again target buyers of Iran’s crude. President Donald J. Trump’s antipathy towards the Islamic republic may threaten even the current level of production. Elsewhere, Nigeria’s big new offshore project, the 200,000 barrel a day Egina field, is now not expected to start producing until late in the year, so any increase there can only come from the uninterrupted operation of existing facilities, which proved impossible to achieve in 2017. As for Libya, its oil infrastructure is showing the strains of years of underinvestment in repair and maintenance. Output is unlikely to

grow much from the current level of around 1 million barrels a day and the risks are skewed heavily to the downside. The only Opec countries that have made significant voluntary cuts are the Persian Gulf Arab nations—Saudi Arabia, Kuwait and the United Arab Emirates. But these are the very countries that have a history of abiding by their output targets. The likelihood of them cheating is much lower than for most fellow members. When it comes to the nonOpec countries, let’s be honest, the only one that really matters is Russia. It is the only country that pledged a large voluntary reduction, all the others were either tiny, or the result of natural declines that cannot be reversed quickly. Will President Vladimir Putin renege on the deal once reelected? I don’t

think so. To do so could endanger the arms and investment deals signed during the Saudi king’s visit to Moscow and weaken Russia’s burgeoning influence in the Middle East. That still doesn’t seem a good trade-off. The only other pledges from Opec’s friends for output reductions of more than 20,000 barrels a day came from Oman, Mexico and Azerbaijan. Of those three, Oman has a history of working with the producer group when times are particularly tough. The other two have rebranded natural declines in their output as “cuts.” Those four countries taken together could actually see lower output this year than last year, given Russia’s gradual implementation of its cut, stabilization in Mexcio and Oman and continuing decline in Azerbaijan.

What about the other risks to the deal? Capitulating in the face of surging shale supply would also be a very difficult step for Opec to take. It would be a huge personal blow to Saudi oil minister Khalid Al-Falih and to Crown Prince Mohammed Bin Salman, the architects of the policy. Not impossible but, perhaps, the end of Opec as a meaningful contributor to oil-price formation. Al-Falih and his Russian counterpart, Alexander Novak, have repeatedly said that even when they decide they are able to declare “job done,” there will not be a sudden free-forall. Any loosening of the output restrictions will be gradual and only be done as quickly as the market can bear. Given their ability to hold the deal together this far, perhaps, it is time we believed them.

A10 Tuesday, January 9, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

www.businessmirror.com.ph

editorial

Brace for more latecomers

in the country.

E should prepare for strong typhoons and heavy rains that come much later in the year, well after the rainy season is over, as this has become the new normal

Tropical Depression Agaton just lashed the Philippines with torrential rain, indeed, pouring on some of the same provinces that were devastated by Typhoons Vinta and Urduja (known globally as Tembin and Kai-tak, respectively), collectively killing more than 200 people, according to the National Disaster Risk Reduction and Management Council. If you look at the other strong typhoons that hit the country the past few years, they also came well after the traditional rainy season; for example, Typhoons Sendong and Pablo hit during December, Yolanda last November and Lando last October. We would be blind not to see more than a coincidence but a pattern here. These “late coming” typhoons and rains are no longer anomalies. Scientists have been telling us for years to prepare for warmer temperatures, wetter conditions, extreme and erratic weather events linked to a changing climate. These freakish deluges should be a wake-up call to the government, especially since we have many coastal and low-lying areas that are vulnerable to flooding. The devastation could be minimized if both local and national governments are better prepared. To be fair, the government seems to have learned from follies of the past. After Typhoons Ondoy and Pepeng, for instance, it made disaster preparedness, risk assessment and analysis a focus of national policy, institutionalized these functions even through a law—Republic Act 10121, or the Philippine Disaster Risk Reduction and Management Act of 2010. Weather forecasting has also been vastly improved. We could benefit more though from better land-use planning, so that our people do not put their homes and livelihoods in harm’s way. More money should be allocated for the relocation of those most vulnerable to less threatened areas. We also need to spread a culture of preparedness, especially to the majority of poor Filipinos who are too busy about their daily survival to worry about typhoons that are just right around the corner. If we can allocate a sizeable portion of our national budget to helping our people prepare for escalating weather events, the money spent would turn out to be a good investment in poverty reduction, because storms and other natural disasters always swell the ranks of the poor. We saw what a high level of preparedness and planning can do to minimize risks and prevent casualties. We can turn to the experience of Albay province whose disaster reduction and zero casualty program counts among the best in the world. Albay learned its lessons after being devastated by Typhoon Reming in 2006 and aggressively invested in disaster reduction. It was cited by the United Nations as among the first local governments that committed to a 10-point checklist to step up investment in urban planning; infrastructure and building safety; reinforcing drainage systems to reduce flooding; and installing early warning systems. Albay proves that with good planning and the right programs and social investments, disaster does not necessarily lead to devastation. The province should not be a local exception. It should serve as the national model. Since 2005

BusinessMirror A broader look at today’s business ✝ Ambassador Antonio L. Cabangon Chua

A strong Armed Forces and the economy Manny B. Villar

THE Entrepreneur Continued from A1

T wasn’t so long ago that our soldiers fought enemies of the state wearing worn-out shoes and ineffective equipment, and with an air force that virtually had no well-functioning aircraft, except hand-me-down surplus from other countries, just like the donated decommissioned coast guard patrol boats that had to serve as a navy fleet.

The terrorists’ siege of Marawi City in May last year was not just a wake-up call, because the government had been well aware of the woeful condition of our defense sector. Marawi added serious urgency to the need to upgrade the armed forces, as well as the police, in terms of personnel, equipment, technology and other resources. After the defeat of the pro-Islamic State (IS) Maute Group last October, President Duterte ordered the Philippine Army to recruit soldiers who will make up 10 infantry battalions (one battalion comprises 500 soldiers). Actually, the Armed Forces of the Philippines (AFP) is implementing a recruitment program for its major branches.

Aside from the new threat from IS-affiliated terrorists, who tried to establish Marawi as their hub in Southeast Asia, the Philippines has been waging war for about 50 decades against communist rebels and Muslim separatists. The conflicts have killed an estimated 150,000 people, displaced millions and prevented economic activities in many parts of the archipelago. Duterte canceled the ongoing peace talks with the National Democratic Front last year because its armed wing, the New People’s Army, continued to harass companies engaged in mining, agriculture and other industries to raise money, while the negotiations were being held.

This is the reason I welcome Duterte’s moves to modernize the AFP and the Philippine National Police (PNP). The AFP Modernization Act, which was enacted in 1995, provided for P331.6 billion to improve the capabilities of the military, but only P63.39 billion of its budget was released. To correct the deficiency, Republic Act 10349 was enacted in 2012, which allotted P75 billion for modernization from 2013 to 2017. In his second State of the Nation Address and a subsequent media briefing in July 2017, while members of the armed forces were fighting the Maute Group in Marawi, the President vowed to continue developing a stronger and more credible national defense system and make the AFP an effective force against terrorists, insurgents and other internal and external security threats, including criminal elements. Under the P3.767-trillion budget for 2017, the AFP will receive P140.4 billion for modernization, or 7.5 percent more than its 2017 budget of P130.6 billion for the upgrading program. The revised program will include the acquisition of surveillance, mobility and communications equipment, as well as armaments. The President was quoted in news reports as saying he hoped to see a “strong” armed forces after

two years to have a “strong republic” that could withstand all threats and challenges. As the President pointed out, today’s reality demands a strong military. I fully agree, because having a reliable defense system goes beyond defending the country from insurgents, terrorists and criminal groups. The government’s massive infrastructure program will open many areas to investments, delivery of public services and development and an armed forces that is respected even by enemies of the state will ensure that the economic goals will be achieved and sustained, because investors would be able to bring in their capital and operate in a safe environment. We have been talking about making economic growth inclusive, which means that the benefits of development reach even the poor segment of the population. Together, infrastructure and a strong military will enable many Filipinos who are not now able to share in the nation’s growth, because they live in areas shunned by investors, to receive the benefits that their countrymen in the urban areas enjoy. Call it “geographical inclusiveness,” which is what a country of more than 7,000 islands need for economic growth. For comments, e-mail mbv.secretariat@gmail. com or visit www.mannyvillar.com.ph.

Founder Publisher

T. Anthony C. Cabangon

Editor in Chief

Jun B. Vallecera

Managing Editor Associate Editor News Editor

Max V. de Leon Jennifer A. Ng Vittorio V. Vitug

Senior Editors

Ruben M. Cruz Jr. Angel R. Calso

Creative Director Chief Photographer

Eduardo A. Davad Nonilon G. Reyes Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Marvin Nisperos Estigoy Aldwin Maralit Tolosa Rolando M. Manangan Loida S. Virtudazo

BusinessMirror is published daily by the Philippine Business Daily Mirror Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines. Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025. (Advertising Sales) 893-2019; 817-1351, 817-2807. (Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.

www.businessmirror.com.ph

Printed by brown madonna Press, Inc.–San Valley Drive KM-15, South Superhighway, Parañaque, Metro Manila MEMBER OF

John Mangun

Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos Dennis D. Estopace

Online Editor Social Media Editor

Chairman of the Board & Ombudsman President VP-Finance VP Advertising Sales Advertising Sales Manager Group Circulation Manager VP HR and Admin

Filipino creativity and entrepreneurship OUTSIDE THE BOX

T is amazing when you think about it. A journalist writing in Appleton’s Magazine in 1908 cited medical opinion that each year 20,000 New Yorkers died from “maladies that fly in the dust, created mainly by horse manure.” On April 12, 1961, the headline read “I Can See Everything Says First Spaceman” regarding the successful flight by Yuri Gagarin.

In a single lifetime, we went from the horse and buggy to outer space. By almost every measure of the global quality of life from literacy to life expectancy, the world was a better place moving into the year 2000 than it was going in the 20th century. Advancing technology brought challenges, but also opened doors of creativity. Not long ago, a person might have invented a better mousetrap, advertised through print and media —“Better mousetraps for sale”— and waited for the world to beat a

path to the company door. But everything changed with the dawn of this new century. The personal computer gave rise to the Internet, which created a global community. Now we carry our relationship to the world in our pocket wherever we go with the Smartphone. Isaac Newton wrote in 1675: “If I have seen further it is by standing on the shoulders of Giants.” All the wonders of today are an extension of what came before. But now we see creativity in the use and extension of technology

that is perhaps unparalleled. While we marvel at the inventions of the past and maybe think that there are few new gadgets left to find in the box of human imagination, what we are witnessing now is maybe greater creativity in how we use the existing technology. To get a taxicab a hundred years ago, you walked to a “Taxi Stand” or hailed one on the road. Then came taxis dispatched by radio. And that was the system until June 2012 when Jonathan Tan started a Smartphone based application, called “Grab Taxi.” Tan capitalized on the Smartphone. UberCab was founded in 2009 and also used the Smartphone technology. But Uber capitalized on this new phenomenon of networking by bringing in private car owners to operate as on-demand taxi services. End of story? Not quite. A stock-market acquaintance of mine—Gracy Fernandez—is now “standing on the shoulders of Giants” with her new start-up company Graventure. The company extends both the Grab and Uber concepts into the car rental business. There is not much difference between searching the Internet and searching ads in a

newspaper for car-rental services. Graventure though is a Web and appbased car-rental platform that partners with private car owners, tourist vans, transport cooperatives, and Uber and Grab registered vehicles for companies and individuals who want to rent a car with or without a driver. In three months, almost 10,000 vehicles registered to provide for the car-rental services, which should begin in the next month or so. And what might be a logical extension of Graventure car-rental services? A Smartphone application for a reputable lipat bahay, pest control, or maybe even a plumber or electrician? Ms. Fernandez received her inspiration when she saw what happened during the Asean Summit regarding the rental cars needed for the delegates and became so frustrated with the lack of a system. Creativity and entrepreneurship do not require reinventing the wheel. Just figure out a new way to solve a problem. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.

Opinion BusinessMirror

www.businessmirror.com.ph

At the Golden Globes, Hollywood does what Washington won’t

My exclusive interview with then Libyan President Qaddafi Cecilio T. Arillo

database

By Frank Bruni | New York Times News Service

he story of the past year, beginning with an inaugural speech of darker bile and greater bunk than any in my lifetime, has been the abdication and outsourcing of the moral authority that the presidency of the United States once had. Last Sunday night, Hollywood, of all places, picked up the slack. I watched the Golden Globes and, yes, I noticed the false, sometimes cringe-worthy notes of hypocrisy and unwarranted self-congratulation. Movies and the rest of the entertainment industry have done more to promote degrading, confining stereotypes of women than to shatter them. And the social activism of many stars dovetails conveniently with the enhancement (or rehabilitation) of their personal brands. It’s virtue signaling in Valentino. But, in this anxious moment of absent leadership, I also noticed that the actors, writers, directors and others who walked the red carpet and took the stage were having the kinds of conversations, and articulating the sorts of values, that the embattled and embittered people holding the reins of government are currently unwilling or unable to. They talked about diversity, decency and, yes, women: how frequently they’ve been unheard, how cruelly they’ve been mistreated and marginalized. And, while these homilies weren’t exactly new, they had never had such timeliness and urgency and had never been such a resounding answer to silence. Sterling K. Brown, who won best performance by an actor in a television series, drama, for This Is Us, thanked its creator, Dan Fogelman, for a character who wasn’t colorless. “You wrote a role for a black man that could only be played by a black man,” Brown said. “I’m being seen for who I am and being appreciated for who I am. And it makes it that much more difficult to dismiss me or dismiss anybody who looks like me.” I never get eloquence like that about racial progress from Donald J. Trump’s White House. “This is ours to share,” Nicole Kidman said to her female costars in Big Little Lies as she accepted the award for best performance by an actress in a limited series or motion picture made for television. “Wow, the power of women.” If Trump ever uttered that sentence, it would be in terror, not celebration. America is upside down and inside out. There’s meaningless make-believe in the capital of politics. There’s meaningful politics in the capital of make-believe. The opening monologue by the host of the Globes, Seth Meyers, flicked at this reversal. Looking into the audience at the actor Seth Rogen, whose 2014 movie The Interview displeased a certain foreign power, Meyers said: “Hey, remember when he was the guy making trouble with North Korea? Simpler times.” Frances McDormand also mined the Hollywood-versus-Washington territory when she won for best performance by an actress in a motion picture, drama, for Three Billboards Outside Ebbing, Missouri. Praising the Hollywood Foreign Press Association, which administers the Globes, she said, “Let’s face it: They managed to elect a female president.” (Her name is Meher Tatna.) These of course were the Globes for which most women dressed in black, not in mourning but in solidarity, as a way to mark a raised consciousness about sexual abuse and harassment and the fresh determination to fight them. But the sartorial departure didn’t pack quite the punch that it was intended to, partly because a monochromatic palette didn’t change the plunging necklines, gaudy jewelry and glamorous fillips of every other awards show. This was more simplification than sacrifice.

“The three most popular movies at theaters in the United States and Canada in 2017—Star Wars: The Last Jedi, Beauty and the Beast and Wonder Woman—were each driven by female characters, something that has not happened in at least 37 years.” And one effect was that, on the red carpet, interviewers asked women about sexual harassment and men about their recent professional achievements. The battle against inequality begat more inequality. Oprah Winfrey redeemed that, with a gorgeous speech about how a yesterday of discrimination becomes a tomorrow of hope. One of the best routes, she noted, are role models. She recalled what it meant to her, when she was younger, to see Sidney Poitier receive Hollywood’s highest accolades. And she wondered aloud what it might mean for little girls last Sunday night to see her getting the Cecil B. DeMille Award for outstanding contributions to the world of entertainment. As I listened to her, I thought about something that Saoirse Ronan said last week when, as part of the TimesTalks series, I interviewed her and Greta Gerwig in an auditorium in Manhattan about the movie Lady Bird, which Ronan starred in and Gerwig wrote and directed. (It won the Globe last Sunday night for best motion picture, musical or comedy, and Ronan won for best performance by an actress in a motion picture, musical or comedy.) Ronan told me that, since making Lady Bird, she found herself wanting not just to act but to direct, because she’d watched Gerwig and, actually seeing a woman in that job, right in front of her, had make it seem possible in a new way. It had put that aspiration into her vocabulary. Hollywood at its best puts more aspirations in more people’s vocabularies. It did that last year, and the Globes were a reminder. As a recent story in The Times noted: “The three most popular movies at theaters in the United States and Canada in 2017—Star Wars: The Last Jedi, Beauty and the Beast and Wonder Woman—were each driven by female characters, something that has not happened in at least 37 years, as far back as full box-office data is available. The top comedy of the year, Girls Trip, was also anchored by women, as was the top film to play in limited release, Lady Bird.” Lady Bird and Wonder Woman were both directed by women to boot. There were assertive female characters at the center of Lady Bird, Three Billboards, I, Tonya, The Post and The Shape of Water, to name some of the movies that got the most attention at the Globes. There were womencentric plots in Big Little Lies and The Handmaid’s Tale, to mention two television projects that won big. In Washington I find less encouragement. I hope that 2018 will be a different story. And I hope that Hollywood, which still has such a very long way to go, takes to heart Rachel Brosnahan’s words when she won the Globe for best performance by an actress in a television series, musical or comedy, for her work in The Marvelous Mrs. Maisel. She noted that there were “so many women’s stories out there that still need and deserve to be told,” adding: “So, as we enter this new year, please let’s continue to hold each other accountable and invest in and make and champion these stories.”

Tuesday, January 9, 2018 A11

wrote this column last December 26 while I was flying to San Francisco, California, exactly 41 years after that day when I sat down with Libyan President Muammar Qaddafi in his presidential tent at the outskirts of Tripoli and, thus, I earned the modest distinction of being the first Filipino and Asian journalist to have an exclusive interview with the then-reclusive and controversial leader of the North African country.

After the usual amenities, I asked him: “The Western press described you a tyrant, the Israelis tagged you a terrorist and Egyptian President Anwar Sadat has called you a mad man. Would you like to comment on these?” Before he answered, I got the sneaky idea in my mind that I might have irked him with my question but, to my comfort, he just smiled and said: “I don’t fit any of those descriptions.” “Anwar is not even a qualified physician to call me a mad man. “We will support revolutionary movements, but only for a just cause and independence. If liberation is terrorism, then we support terrorism. “But let’s not waste our time on these,” Qaddafi said, suggesting instead that we discuss other matters. “I agreed,” he added, “to talk to President Marcos and his officials on the issues in Mindanao. I met with your First Lady, Mrs. Marcos, on several occasions. I can tell much about her. I had the honor of meeting her and got acquainted with her during her visit to Tripoli. She has an extraordinary ability to achieve solutions to problems. We are proud to see a woman of a Third World coun-

try playing an important role for her people,” Qaddafi said. “A nd how about President Marcos?” “He is a very nice man to talk to on the phone. He sounded very efficient and a very strong leader. I hope to see him soon,” Qaddafi said, after mentioning that he had a series of telephone conversations with Marcos during the negotiations between the Philippine panel and representatives of the Moro National Liberation Front (MNLF). My meeting with Qaddafi turned into a question-and-answer interview on many issues, including his book, the Green Revolution, trade, economy and his plans about Libya. He freely answered my questions, dispelling doubts in my mind that he was abrasive and discourteous. “I hope you write a fair impression about my country and our people,” he said, after handing me copies of his book. I had the impression that he was friendly to me, and he might have liked the way I directly and candidly asked questions. He noticed that the watch he was wearing with a revolving dial that shows his picture in military uniform had

drawn my attention and, before I could say something, he removed it and told me I could have it. I told the President I was just curious about his watch, and I did not want to have it, but he told me not to decline a small gift from a friend. “Really,” he said, “I want you please keep it!” So, I accepted it with reluctance, thanked the President and had souvenir photos with him. It was Defense Undersecretary Carmelo Z. Barbero who handed my request to Libyan Foreign Minister Ali Treki for an interview with President Qaddafi on December 24, the day after the signing of the Tripoli Agreement between the Philippine panel headed by Barbero and the MNLF led by Nur Misuari. A day after, three Libyan security officers were in my hotel room on the third floor of the Palace Hotel. When I inquired, they told me the presidential palace had ordered them to move me to the new room. I became apprehensive, thinking Qaddafi had a second thought on his watch and that I had become a security risk being a journalist and, at the same time, a member of the government panel. I tried to phone Secretary Barbero, but I could not contact him. Neither could I get in touch with his senior aide, Col. Eduardo Ermita. The Barbero group subsequently departed for Rome, but one of them told me that my request for interview had

How to get New York moving again By David Leonhardt New York Times News Service

he next time you’re in midtown Manhattan on a weekday afternoon, I encourage you to try a little game: Take a brisk crosstown walk, and look around. For starters, it’s a nice way to take in the city while getting some exercise. It will also give you a sense for one of New York’s pressing problems. If you watch the vehicles around you, you will probably notice that you are traveling faster than some of them. Despite having internal combustion engines—which I’m pretty sure are more powerful than your body— the vehicles will crawl forward at a few miles per hour (mph). Then they will stop and wait for a light to turn green or a gridlocked intersection to clear. Meanwhile, you will keep moving. When I’m walking across Manhattan, I often find that I can outrace a car. The average vehicle speed in midtown today is just 4.7 mph. That’s 28 percent slower than five years ago. Given that most people can walk up to 4 mph, the human body is sometimes Manhattan’s fastest mode of transportation. Traffic has become an urban scourge, and not only in New York. Around the world, it is a drag on economic activity

and the quality of life. People waste hours in it, all the while sending pollution into the air. No wonder both Mayor Bill de Blasio and Gov. Andrew Cuomo are promising a solution. Unfortunately, there is a good chance they are going to bungle it. Traffic is a classic “tragedy of the commons” problem. The phrase comes from ecologist Garrett Hardin, based on work by 19th-century economist William Forster Lloyd. Lloyd described British villagers sharing a plot of land where their cattle could graze. Any individual benefited from using the land as much as possible. But if they all maximized use, they could destroy the grass. The space on city streets is like the village common. When it’s overused, it becomes less valuable to everyone. The good news is that modern societies have developed a solution to the tragedy: Charge money to use the commons. Doing so not only discourages overuse, it also raises funds that can solve the larger need—to grow another field where cows can graze, say, or to build a well-functioning subway system. And, yes, I realize that both grazing cows and well-functioning subways sound far-fetched to today’s New Yorkers. The charge for using clogged roads is known as “congestion pricing,” and

it works well where it has been tried, like London, Singapore and Stockholm. In New York the daily charge to drive below 60th Street might be around $8, with additional charges for vehicles that linger all day. Ken Livingstone, the London mayor when congestion pricing began in 2003, has said it’s the only thing in his political career that “turned out better than I expected.” London’s vehicle speeds would be 20 percent to 30 percent lower without the charge to enter central London, urban expert Charles Komanoff has estimated, and a separate study found a significant decline in crashes. The reason more cities haven’t adopted congestion pricing, Livingstone says, is “political cowardice.” People cling to the idea that driving should be free, even though it imposes big costs on others. In New York de Blasio opposes congestion pricing. He instead favors a millionaires’ tax to pay for subway improvements. Higher taxes on the rich are a fine idea, but won’t unclog roads. For that, de Blasio has offered a series of small, complex measures, like banning deliveries during rush hour. Good luck enforcing that one. Cuomo is more positive about congestion pricing, but has not filled in the

already been approved. The hotel manager returned my passport and told me that I was under his personal care as a VIP and not to worry because somebody from the presidential palace will soon fetch me. My food changed from Libyan to European and accorded me with a first-class treatment. At 10:30 a.m., December 26, a limousine with three security officers took me to the presidential tent. Before we drove on, one of the officers told me I was a guest of President Qaddafi. Wearing a woolen topcoat matching his gray t-shirt and flared corduroy pants, a towering man appeared before me at the entrance of the tent: “Welcome!” the smiling President said. Born in 1942 like me, he stands 5’11” and towers over most Libyans. He was 27 years old and was just seven years in power after he and his fellow young military officers had staged a bloodless coup in 1969 that ousted King Idris, a devout proWestern leader, when he granted me an exclusive interview. I wrote a series of articles about our interview and sent him copies through the Libyan Ministry of Information. Two months later, I got a personal invitation from the President to attend the eighth Islamic Conference in Tripoli the following year. Warts and all, I reminisced the past about the controversial strongman and the way he was ousted and killed in 2011 when I saw his watch while cleaning my library. To my surprise, I saw his face glowing and smiling. I told myself: “What an interesting experience and a priceless piece of gift that nearly got me jailed in Egypt, a generation and 11 years ago!” To reach the writer, e-mail cecilio.arillo@ gmail.com.

details. He may ultimately support a charge only on taxis and companies like Lyft, Uber and Via. That’s a strangely antienvironment compromise, because it encourages people to own their own cars. The New York of the future should have fewer space-clogging cars, not more. The most serious argument against congestion pricing is that it hurts lowerincome workers. That argument also falls apart on inspection, though. Only 3 percent of poor and near-poor outer-borough workers drive into Manhattan for their jobs, the Community Service Society of New York found. A whopping 61 percent take the subway or bus. I understand why politicians are afraid to support congestion pricing. We all like the idea of a free lunch—or a free road. But political leadership is supposed to be just that: leadership. It involves making tough decisions for the common good and winning over citizens. Both de Blasio and Cuomo would like to be national progressive leaders. New York’s packed roads and hobbled subways have given them a great opportunity. They can lead the way toward a pro-environment, pro-worker solution that would be a model for other cities. I look forward to the day when I can no longer keep up with New York’s cars.

Withholding aid from Pakistan isn’t enough

he United States decision last week to suspend military aid to Pakistan is not only defensible but justified. It’s also unlikely to affect Pakistan’s covert aid to Islamist militants unless it’s accompanied by a more comprehensive and determined strategy. Simply withholding aid, as both of President Donald J. Trump’s predecessors did at one time or another, won’t necessarily change the calculus of Pakistan’s generals. They view their militant proxies as a crucial means of exerting influence over neighboring Afghanistan and ensuring it doesn’t grow too close to arch-rival India. The only way to force real change is to make it too painful for the military to continue on its present course, while

presenting Pakistan’s citizens and civilian leaders with a better alternative. That will require focused diplomacy. The administration wisely said it’s only suspending aid for the moment, to give Pakistan an opportunity to reconsider its position. But it’s likely that further and more painful measures will be required. The US could begin by formally reexamining Pakistan’s status as a “major non-NATO ally”—revoking it would be mostly symbolic, but also highly embarrassing. It could impose travel sanctions on Pakistani generals and spies linked to militant groups. It could end all sales of strategic weapons systems to Pakistan. It could conduct unilateral drone strikes on militant leaders deeper within Pakistan itself.

Eventually, it could threaten to name Pakistan a state sponsor of terror. Each step should be succeeded by another pause, in hopes that Pakistan’s generals have a change of heart. Lasting change, however, will come only when the Pakistani people themselves demand an end to support for militants. So the US should also look to provide more targeted funding to groups that have the potential to reshape Pakistani society—those focused on anticorruption efforts, for example, or religious tolerance. The International Monetary Fund should be encouraged to tie aid to economic and (especially) tax reforms; not until more Pakistani citizens pay taxes will they really question how much of

the national budget is commandeered by the military. There should also be room to work with China—Pakistan’s most “reliable” ally—to alter Pakistani calculations. After all, a true breach in US-Pakistan relations isn’t in Beijing’s interests either, given its desire for stability within both Pakistan and Afghanistan. Pakistan has long accused the United States of being a fickle ally. In fact, since September 11, the US has, if anything, been too forgiving, slashing aid and then restoring it without evidence of real reform. Trump isn’t wrong to demand better cooperation and accountability from Pakistan. He could show his seriousness by doing more than closing America’s wallet. Bloomberg View

2nd Front Page BusinessMirror

A12 Tuesday, January 9, 2018

Congress leaders prodded to present Cha-cha timetable

By Butch Fernandez & Cai U. Ordinario

@butchfBM @cuo_bm

ongress leaders were asked on Monday to submit their timetable for the Senate and the House of Representatives to craft an enabling law paving the way for the proposed shift to a federal form of government favored by the Duterte administration. Sen. Sherwin T. Gatchalian prodded the leadership of the two legislative chambers to “present a realistic and workable timetable” to carry out the Palace-backed scheme to tinker with the 1987 Charter. In a statement, Gatchalian recalled that Senate President Aquilino L. Pimentel III and Speaker Pantaleon D. Alvarez, “based from

their pronouncements last week... will start to lay the groundwork for discussions on this once the session is resumed on January 15.” But Gatchalian asserts both Pimentel and Alvarez would “first need to produce their timetable, a realistic and workable one, to get us going.” “Essentially, I want to meticulously

GATCHALIAN: “I want to meticulously look into its details since the idea of federalism being floated over the news is still broad. We need to be clear with the details and not rush the process.”

look into its details since the idea of federalism being floated over the news is still broad,” Gatchalian added. “We need to be clear with the details and not rush the process.” Moreover, he pointed out that any timetable proposing postponement or cancellation of the scheduled May 2019 national and local elections would be “unacceptable,” insisting that “the democratic functions of our government should not be put on hold for any reason, not even for charter change.” “ T he M ay 2019 e le c t ion s must go ahead as scheduled,” Gatchalian added. He recalled that just last week,

Duterte administration allies in Congress bared plans for the Senate and the House to convene joint sessions as a constituent assembly (Con-ass), justifying the move as “a cheaper and practical approach” of revising the 1987 constitution, compared to a separate election of delegates to a constitutional convention (Con-con), which would cost the government P7 billion. In a separate interview, Senate Minority Leader Franklin M. Drilon agreed that the Con-ass option is “more economic.” But Drilon disclosed the Senators belonging to the majority and minority blocs have yet to forge a general agreement on the Charter change issues. “There is no consensus yet on the mode because it has not been discussed.” Still, Gatchalian suggests that senators and congressmen “should respect each other’s independence” and start separate deliberations on the proposed Charter amendments. See “Congress,” A2

www.businessmirror.com.ph

Challenge for data-protection officers: Breaking down the walls Continued from a1

The European Union is not the only region that is beginning to take notice of the fact that data-protection legislation is well overdue. In Singapore the Personal Data Protection Act 2012 (PDPA) mandates that organizations are required to designate at least one individual, known as the data-protection officer (DPO), to oversee the data protection responsibilities within the organization and ensure compliance with the PDPA. Other countries in Asia, Southeast Asia and Oceania have also instituted similar legislation, to a greater or lesser degree. For instance, in Australia the approach to data privacy and protection is currently made up of a mix of federal and state/territory legislation. Although there is no requirement for organizations to appoint a DPO, but it has been noted that it would be “good and usual practice under the current law” and guidance has been issued by the privacy commissioner strongly recommending it. In the Philippines, of course, we have the Data Privacy Act (DPA) in place and it is strictly implemented by the National Privacy Commission (NPC).

Need for a data-protection officer

Given both regional and global concerns surrounding data protection, the importance of appointing a suitable data-protection officer is becoming more and more urgent. In the Philippines you have hopefully informed the NPC about the appointment of your DPO last September…. However, even the most qualified data-protection officer cannot act in an institutional vacuum. If a proactive stance toward the issues surrounding data security is to be maintained then it is essential that a core team of DPOs, IT staff and other information security professionals need to work closely together. This is especially important given the onerous nature of the compliance required by the GDPR, and the data-privacy law in the Philippines. In terms of the regulations governing the functions of the data-protection officer, it is strongly recommended that the DPO be a C-Suite level executive, reporting to executive management. Furthermore, the data-protection officer should have autonomy, the related budget and the necessary resources and decision making powers to execute data protection plans, address issues of noncompliance and report these issues to the relevant data-protection agency.

The DPO support structure

frenzy in maroon and yellow Thousands of devotees brave the heat of the sun as they line up and patiently wait for their turn to kiss the image of the Black Nazarene, in line with the celebration of its annual sojourn from its original enshrinement in Intramuros to Quiapo Church, where it is at present. Worshippers refer to the annual trip as the “Traslacion.” ALYSA SALEN

Drilon denounces Alvarez’s ‘interchamber discourtesy’

enate M i nor it y L eader Franklin M. Drilon denounced as a breach of “interchamber courtesy” recent verbal attacks spewed by Speaker Pantaleon D. Alvarez against the Senate that Drilon suspects to be part of the House leader’s scheme to abolish the upper chamber to make way for a unicameral legislature. “To me, it is beyond the legislative agenda,” Drilon said, referring to recent criticisms mouthed by Alvarez against the Senate. “In the first place, that is not done because of interchamber courtesies. I have served as senator for 20 years and this is the first time I heard a Speaker of the House attacking the Senate,” he added. Drilon voiced suspicion that the Speaker’s spewing bad-natured remarks is part of a plot to justify abolition of the Senate. “Beyond the criticisms, unfounded as it is...I think this is part of the effort to diminish the Senate stature in the eyes of the people so that when Charter changes are made, it would be easy for them to abolish the Senate.” “This attack on the Senate is part of the deliberate attempt to weaken the Senate as an institution of democracy,” Drilon said. “The Senate is part of the check and balance system within the legislature; in the same manner that the Senate may not agree with the House, the House may not agree with the Senate.” He added: “That is precisely

part of the Senate. Not all that the House members want to pass [could passed by the Senate]. That’s precisely the reason we have a check and balance in the same manner that not all the bills passed by the Senate should be approved by the House. This is a democratic way of doing it.” Drilon voiced concern that the House Speaker’s attacks on the Senate as an institution “weaken our role as an institution which checks on the other house.” For instance, the senator cited the death-penalty bill that Alvarez complained remained pending in the Senate. Drilon said this was simply because the majority of the Senators were against it. “Therefore, the position of the Senate is not to revive the death penalty. Why should we be criticized for not passing that? That’s part of our duty to make a judgment; that’s what we are elected for—to make a judgment whether a particular law should be passed.” Drilon explained that Senate committees are controlled by the majority, adding that “therefore, the majority has not included it as part of the legislative agenda. You may be aware that we have these regular meetings with the House leadership where we agree on a legislative agenda. The death penalty is not there. The restoration of the death penalty is not part of our legislative agenda.” Butch Fernandez

DOT. . .

Continued from A1

There are too many things and matters to fix and wrap up still,” the director stressed. The director added that the reassignment means uprooting their entire lives. A number of them have families they will have to leave behind because of the geographical relocation. Persons familiar with the inner workings of the DOT explained that most regional directors appointed are already from the area “so that they are more familiar with the place that will be promoted.” Another said: “It takes years to build relationships and partnerships between the DOT, the local government unit, the private sector and community associations and develop the trust and confidence to effectively implement projects. Rotating them in this massive manner puts everything back to zero...” One regional director added that this reshuffling is like “sabotaging [whatever gains] the tourism industry” has already reaped in the past years. The DOT aims to attract 12 million foreign visitors by 2022. Some also took issue with the miniscule amount that will be given those who will be relocated, which is anywhere from P4,000 to P5,000 a month, adding that this hardly covers for expenses on food and rent. Even at P5,000, the highest relocation fee that is allowed under government rules, in Manila that will pay for just a bedspace, for example. DOT Spokesman Frederick M. Alegre underscored: “This is Secretary Teo’s first major reshuffle under her administration. In a way, it’s also good because it challenges the officers and gives them a chance to prove them-

selves by handling other positions. It keeps everyone on their toes.” Per the DO, the following officials were reassigned to new posts: Director Cynthia Lazo (National Capital Region) vice Officer in Charge (OIC) Czarina Zara-Loyola; OIC Caroline Guzman Uy vice Ronald Tiotuico (Central Luzon); Director Vernie Morales vice Rebecca Labit (Calabarzon); Director Labit vice Danilo Intong (Mimaropa); Director Shalimar Tamano vice Catalino Chan III (Central Visayas); Director Nelly Nita Dillera vice Karina Tiopes (Eastern Visayas); Director Tiopes vice Antonio Fernando Blanco (Zamboanga region); Director Blanco vice Roberto Alabado III (Southern Mindanao); Director Ma. Rica Bueno vice Director Dillera (Central Mindanao); and Director Ana Nuguid vice Mary Jean Camarin (Caraga). Also reshuffled were directors in several departments of the DOT head office: Director Intong replaces Bueno at the Office of Tourism Standards and Regulation; Cathy Agustin is OIC of the Office of Industry Manpower Development; Glen Agustin is OIC of the Market and Product Development Office after Director Verna Esmeraldo Buensuceso was appointed as attaché to Tokyo last year; Director Loyola vice Milagros Say (Office of Tourism Development Planning, Research and Information Management) and Director of the Office of Public Advocacy and Communications; Director Myra Santos vice Jun Garduque (Internal Audit) and vice Vernie Morales (Administrative Service); Gary Politico, OIC of Financial Management Service vice Director Myra Santos; Director Say, OIC of Planning Service vice Politico; Director Marissa Diploma (Faith Tourism); Director Alabado vice Director Lazo (Medical Tourism); Assistant Secretary for Public Affairs Frederick M. Alegre will also handle the Legislative Liaison Unit vice Director Tamano.

The task of the DPO is further complicated by the requirements for the handling of the data itself, as well as the associated processes mandated by the GDPR. There are several requirements regarding access to the data, the security of the data, the development of a remedial plan in the event of a data breach, regular audits, as well as handling changes to the data. Compliance will result in a significant drain on organizational resources. It is simply not possible for a single employee to handle all aspects required to achieve compliance. There are software systems available that can assist the DPO. Consequently, it is only through close coordination between the DPO, IT, information security and compliance staff of the organization that these requirements can be met on a day-to-day basis. This requirement for an integrated and aligned support structure becomes even more urgent when the functions of the DPO are handed to someone with existing work responsibilities, as has been the case in the past. According to a 2015 study by IBM and the Ponemon Institute the average cost of a data breach has increased 23 percent over the past two years to $3.79 million per incident. The same study indicated that the average cost paid for each lost or stolen record containing sensitive and confidential information increased 6 percent, jumping from $145 in 2014 to $154 in 2015. These figures give are only the tip of the iceberg and indicate the potentially massive blow to a company’s cash flow (and reputation) that can occur in the event of a data breach. Given that the threats to data are increasing at an exponential rate, it is imperative that the data custodians within the organization are clear as to their roles and responsibilities within the data-protection framework of the organization and as governed by the relevant legislation and guidelines issued by statutory bodies in their regions—and for that matter internationally. The importance of familiarity with roles, responsibilities and accountability assumes an even greater importance in today’s highly competitive and digital business environment. In a marketplace, which is characterized by increasing consumer and client choice, any breach can have catastrophic effects on customer faith—and in the event of a data breach, stakeholders are likely to vote with their wallets. A more strategic approach whereby vendors, systems and processes are brought into alignment to ensure that breaches do not occur and when they do the fallout is minimized is today a strategic imperative. This requires close cooperation between the data-protection officer, IT, information security and compliance professionals within the organization who are responsible for the integrity and protection of data on a day-to-day basis, as well as compliance with legislation and legal requirements. The higher-level reporting requirements, auditing and compliance issues should fall within the remit of the DPO—while operational issues must be the responsibilities of in-house information security professionals and IT staff. The consequence of a strategic misalignment of these responsibilities can mean disaster for the organization. Aside from the ever present risk of hefty fines for noncompliance, the risk of damage to corporate reputation are enormous. A single breach (or an accusation of noncompliance for that matter) can ruin the trust between the organization and its clients. And in the Philippines, the CEO can spend time in jail. Clear, concise and effective communication to restore customer faith is simply impossible without having the facts at hand and being able to explain the processes that are in place to mitigate against further occurrences. Only through close cooperation across all levels of the organization and the elimination of silos between the reporting functions of the data-protection officer, information-security professionals within the organization and the IT department can this sort of communication take place. Faced with the costs of compliance, some companies have decided that it would be simpler and more cost-effective to ignore the requirements and trust in blind faith that data breaches will not occur. This is an extremely dangerous risk equation. Consequently, we have assembled a team of experts that can help you in the implementation of data protection and there are solutions for small-to mediumsized companies that are more cost-effective. For more information, contact me—Schumacher@integrityinitiative.com.