Trump’s global business ties
17
The number of golf courses owned by the Trump Organization that contributed $306 million to the US presidentelect’s revenues
D
onald J. Trump says his business is “great,” and you’ll have to trust him on that. One of the few things an outsider can know, for sure, is that it’s a complex and opaque hodgepodge of an empire scattered around the globe. Trump has interests in 500 companies in about 20 countries. But many of them have no business operations and are just shells set up to hold stakes in other companies, possibly to provide legal and tax protection. A disclosure document last May listing the companies ran 104 pages, but revealed precious few details about how much each entity has borrowed, their profits, or purposes. The details matter, because government ethics experts note the possibility that Trump might be tempted to shape regulations, taxes and foreign policy to enrich himself or his
‘yes, we did’ President Barack Obama waves, as he is joined by First Lady Michelle Obama and daughter Malia Obama, after giving his presidential farewell address at McCormick Place in Chicago on Tuesday. Story on A8. AP/Nam Y. Huh
media partner of the year
United nations
2015 environmental Media Award leadership award 2008
See “Trump,” A2
BusinessMirror
www.businessmirror.com.ph
A broader look at today’s business n
Thursday, January 12, 2017 Vol. 12 No. 92
DRIVERS INCLUDE INFRA SPENDING, REMITTANCES, SERVICES EXPORTS
World Bank, S&P see faster growth for PHL 6.8% T
2016 ejap journalism awards
business news source of the year
P25.00 nationwide | 4 sections 24 pages | 7 days a week
the broader look
a6-a7
By Cai U. Ordinario @cuo_bm & Bianca Cuaresma @BcuaresmaBM
he World Bank and international credit watcher Standard & Poor’s (S&P) have upgraded their growth projections for the Philippine economy, despite apprehensions over President Duterte’s bloody antidrug war and rants against the country’s trading partners.
The projected average PHL growth from 2017 to 2019, according to the World Bank
In the Washington-based lender’s January 2017 Global Economic Prospects report, the World Bank said the Philippine economy is now seen to grow by 6.8 percent Continued on A2
Unsolicited bids seen to let fly PHL airport expansion projects
WHO’S NEXT IN LINE AS PHL SEEKS NEW CENTRAL BANK CHIEF
A
At his annual Bankers’ Night reception on Tuesday, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. (center) shares a laugh with some of the rumored candidates for his post: (from left) BSP Deputy Governor Nestor A. Espenilla Jr., former Monetary Board member and former President of the Philippine National Bank Peter B. Favila, East-West Bank President Antonio C. Moncupa Jr. and BSP Deputy Governor Diwa C. Guinigundo. Tetangco, a career central banker who has worked in the monetary authority for 41 years, is scheduled to retire on July 2, after two terms as BSP chief, steering the Philippine economy through a global recession and concerns by investors over President Duterte’s often colorful rhetoric. The Duterte administration has offered Tetangco a third term as BSP governor and is moving to amend the BSP charter to allow this reappointment. Stella Arnaldo
PESO exchange rates n US 49.5480
mando M. Tetangco JR.’s term as governor of the Central Bank will expire on July 2, and he hasn’t disclosed yet if he’ll accept an offer from President Duterte to stay on for a third term. Tetangco, 64, has kept inflation below 5 percent for more than five years, allowing the bank to cut its benchmark interest rate to a record low. He has held office under three presidents; steered the economy through a global recession; and served as a pillar of stability for investors spooked by Duterte’s rhetoric around his war on drugs. The next governor will need to protect the economy, among the world’s fastest-growing, from risks, including higher US interest rates and capital outflows. Tetangco said in an interview on Monday the Central Bank can hold off from raising rates in the next six months. A veteran of more than 40 years
at the Bangko Sentral ng Pilipinas (BSP), Tetangco has said he prefers a successor who has worked in central banking before. Here’s a list of five possible candidates, based on discussions with Central Bank watchers and local media reports.
■ Nestor A. Espenilla Jr.,
central bank deputy governor Espenilla, 58, joined the central bank in 1981 and has been deputy governor since 2005. As head of the BSP’s unit that oversees banks, he has pushed for the entry of more foreign lenders, and encouraged mergers and acquisitions. Espenilla earned a Master’s degree from the Graduate Institute of Policy in Tokyo and had a stint at the International Monetary Fund. “It’s a natural aspiration for a deputy governor to serve the country See “Who’s next,” A2
n japan 0.4286 n UK 60.3049 n HK 6.3897 n CHINA 7.1555 n singapore 34.5234 n australia 36.5169 n EU 52.3376 n SAUDI arabia 13.2152
Source: BSP (11 January 2017 )
BMReports BusinessMirror
A2 Thursday, January 12, 2017
World Bank, S&P see faster growth for PHL Continued from A1
in 2016, 6.9 percent in 2017 and 7 percent in 2018. “In the Philippines growth is projected to accelerate to 6.8 percent on average in 2017 to 2019, supported by ongoing infrastructure projects, strong consumption, buoyant inflows of remittances and strong revenue from services exports,” the World Bank said. The Philippines’s growth is expected to buck regional trend, where commodity-importing economies are only expected to grow by around 5 percent from 2018 to 2019. “Among the large commodity importers, Vietnam and the Philippines continue to have the strongest growth prospects, although capacity constraints will likely limit acceleration in the medium term and could cause overheating pressures,” the bank said. Risks to this forecast include policy uncertainty in the United States and Europe, financial-market disruptions and lower-thanexpected growth in major economies. The report stated that rising protectionist policies worldwide will also contribute to the new trade restrictions. The World Bank also said the recent weakening of investment growth in emerging market and developing economies is “worrisome.” The Asia-Pacific region, which includes the Philippines, account for one-third of global GDP and about three-quarters of the world’s population and the world’s poor. The bank said investment growth in the region fell to 3.4 percent in 2015, from 10 percent on average in 2010, and likely declined another half-percentage point last year. This, the World Bank said, is partly a correction from high precrisis levels and reflects obstacles to growth, such as low oil prices for oil exporters; slowing foreign direct investment for commodity importers; and more broadly, private
Who’s next. . .
debt burdens and political risk. “We can help governments offer the private sector more opportunities to invest with confidence that the new capital it produces can plug into the infrastructure of global connectivity,” World Bank Chief Economist Paul Romer said. “Without new streets, the private sector has no incentive to invest in the physical capital of new buildings. Without new work space connected to new living space, the billions of people who want to join the modern economy will lose the chance to invest in the human capital that comes from learning on the job,” he added. Overall, global economic growth is forecast to accelerate moderately to 2.7 percent in 2017 and 2.9 percent in 2018 and 2019. In advanced economies, growth is expected to edge up to 1.8 percent in 2017 to 2018 and slow to 1.7 percent in 2019. Growth in emerging market and developing economies as a whole should pick up to 4.2 percent this year, from 3.4 percent in the year just ended amid modestly rising commodity prices. In 2018 growth in emerging market and developing countries is expected to reach 4.6 percent and 4.7 percent in 2018 and 2019, respectively. Standard & Poor’s Global Ratings, meanwhile, upgraded its growth projections for the Philippines a little higher for 2016 and 2017, the ratings agency said in a report published on Wednesday. In its 2017 report on Asia-Pacific Sovereign Ratings Trends, S&P said its new growth forecast for the Philippines now stands at 6.6 percent for 2016, from the earlier 6.5 percent. The Philippine economy in 2016 has been shown to grow faster than expected, with the third-quarter GDP hitting 7.1 percent—a notch above the government’s average annual GDP projection for the year at 6 percent to 7 percent. S&P also upped its forecast for 2017 to 6.4 percent, from the earlier 6.3 percent. This, however, is below the economic managers’ target growth
Continued from A1
at a higher plane of responsibility,” he said, when asked about a possible promotion.
■ Peter B. Favila, banker
Favila, 68, is a consultant for the Central Bank and has served as president of Philippine National Bank, Allied Btanking Corp. and Security Bank Corp. He was trade secretary under former President Gloria Macapagal-Arroyo, headed the Philippine Stock Excthange and was a member of the Central Bank’s Monetary Board. “I’m prepared to serve,” Favila said when sought for comment.
■ Diwa Guinigundo, central bank deputy governor
Guinigundo, 62, started his central-banking career in 1978 and has been deputy governor and head of the Monetary Stability Unit since 2005. A graduate of the London School of Economics, he also worked at the IMF. “I would accept the job if offered,” he said. Guinigundo said deepening capital markets, fighting money laundering, terrorist financing and cyber crimes are some of the important tasks ahead.
for this year, which was set at 6.5 percent to 7.5 percent. The credit watcher currently rates the Philippines with “BBB” and a stable outlook. “The stable outlook balances the Philippines’s lower middle-income economy and diminished policy stability, predictability and accountability against its strong external position, which features rising foreign-exchange reserves and low and declining external debt,” S&P said in its report on Wednesday. Among its ratings factors, S&P considers the external front and debt-burden performance as the country’s strength. Its economic front, meanwhile, is a weakness, while the institutional, budget and monetary performance are neutral for the country. The ratings agency also said its next moves on the ratings of the Philippines are likely dependent on the policy path of the new administration. It, however, said a higher rating is unlikely for the Philippines in the next two years. “We may raise the ratings if continued fiscal improvements under the new administration boost investment and economic growth prospects, or if improvements in the policy environment lead us to a better assessment of institutional and governance effectiveness,” the S&P said. “We may lower the ratings if, under the new administration, the reform agenda stalls or if there is a reversal of the recent gains in the Philippines’s fiscal or external positions,” it added. Growth, S&P projects, is expected to slow down in the next two years, with its forecast pegged at 6.2 percent in 2018 and 6.3 percent in 2019. Among other S&P’s forecasts include a current-account balance that is 1.8 percent of the country’s GDP in 2016 and 1.4 percent in 2017. Its inflation forecast, meanwhile, stands at 2.9 percent for this year and 3.6 percent for both 2018 and 2019—all of which are within the government’s target band of 2 percent to 4 percent.
■ Antonio C. Moncupa Jr., bank president
Moncupa, 58, is a 30-year veteran in the banking industry and has been president of EastWest Banking Corp. for a decade. He heads the policy think tank of Duterte’s political party.Holding a Masters in Business Administration degree from the University of Chicago, Moncupa is among the most senior board members of the Bankers Association of the Philippines. He was jailed in the 1980s under martial law, accused of rebellion. “I have been in the private sector all my career, and something like this requires some serious reflection,” Moncupa said of news reports that he’s among those considered for the post.
■ Perfecto R. Yasay Jr., foreign affairs secretary
Yasay, 69, was chairman of the Securities and Exchange Commission for five years until 2000, when he testified against ex-President Joseph Estrada in his impeachment trial. A dormitory roommate of Duterte during their lawschool years, Yasay ran for vice president in 2010 and lost. A year later, he was among those included in a criminal complaint filed by the Central Bank for falsification and granting of illegal loans while serving as a director of a bank. “I have always considered public office as a public trust,” Yasay said. “I have placed myself under the President’s disposal to serve our country and people the very best way I can.” Bloomberg News
Contraceptives. . . Continued from A12
He said that for 2017, the DOH has a budget of over P200 million while Popcom has allocated P400 million for the implementation of the RPRH law. This will allow the country to reach a contraception prevalence rate of 65 percent from the current 40 percent. Some of the country’s peers in the region have a contraception prevalence rate of 75 percent. Apart from this, Perez said with the effective implementation of the EO, the government can also get closer to its goal of slowing the country’s population growth rate. The Philippines’ population growth rate is around 1.7 percent. This means that if there are 104 million Filipinos, another 1.6 million will be added every year. But with the RPRH Law, the population growth rate will ease to only 1.4 percent a year by 2022. While the government refuses to limit the number of children similar to the one-child policy of China, Pernia said the government encourages couples to have the number of children they can support and raise. “The specific number of children cannot be legislated. What the President was saying is to urge or to encourage families not to have more children than they can afford to take care of and provide for such that the children would really be able to achieve their full potential,” Pernia said. In 2008, Secretary Pernia led 27 University of the Philippines professors in a united stand in support of the RH Bill. The UP professors said poor families are especially burdened when they end up with more children than they desire. They also said larger families make less investments per child, reducing their chances of breaking the chain of inter-generational poverty.
www.businessmirror.com.ph
Trump. . .
Continued from A1
business partners. Foreign governments could create plenty of trouble, too. They could seek to influence him by rewarding or punishing his business interests in their countries. Trump has said he will separate from his business, but has provided few details on what that means. He is scheduled to discuss his plans at a news conference on Wednesday. In a tweet last month, the president-elect said “no deals will be done” while he is in office and that he will leave management of his company to two of his children, Donald Jr., 39, and Eric, 33, along with executives. As in his previous statements, he left open the possibility of retaining his ownership stake. What makes the situation so perilous is that no modern US president has owned so much, had it spread so far around the globe, and disclosed so little. Still, plenty is known about his company, the Trump Organization. ■ Trump’s business ties abroad sprawl, but it’s not clear they run deep. Trump owns little overseas. Since losing nearly everything in the 1990s from a debt-fueled foray into casinos, he’s preferred to take care of his money and strike royalty deals that entail little more than renting out his name. ■ Not every Trump building is owned by him. Many residential buildings bear his name, but many apartments in them have been sold off years ago. This is true of Trump Tower on New York’s Fifth Avenue, where he lives and works and through whose gilded lobby he has paraded his nominees for his Cabinet. ■ Ivanka, his 35-year-old daughter, is an executive vice president at the Trump Organization but also owns her own company selling clothes and jewelry. Her husband, Jared Kushner, is CEO of his family’s real-estate business. On Monday, after he was appointed a senior adviser to Trump, Kushner promised to step down from that role and sell some assets to comply with federal ethics laws. Below is a cheat sheet of sorts on Trump’s holdings.
Over there
Trump has his name on hotels, residential towers and resorts around the globe, from South Korea and the Philippines in Asia to Uruguay in South America and Turkey in the Middle East. In Indonesia he struck a deal for use of his name and management services for a resort and residential building in Bali owed by the MNC Group, a real-estate company run by a politically active businessman, Hary Tanoesoedibjo. In his May disclosure, Trump said he made between $1 million and $5 million in licensing fees for this deal in the prior 17 months, as well as for similar deals in Turkey, Panama, the Philippines and India. His partner in the Philippine venture, E.B. Antonio, was recently named a “special envoy” to the US by President Duterte. Trump faced criticism after India’s Economic Times reported that he held a meeting at Trump Tower in Manhattan shortly after the election with business partners in one of two Indian ventures, two residential towers in Pune in the western part of the country. The Trump Organization said before the election that it was looking to enter new countries. In recent weeks it has been shedding some projects instead, as the presidentelect has come under pressure to separate from his business before assuming office. Trump lawyer Alan Garten earlier this month said “exploratory” talks are off over a possible project in Pune, India, as well as one for five office towers in Buenos Aires, Argentina. The Buenos Aires project had been in the spotlight after media outlets reported that Trump tried to speed it along by mentioning it in a congratulatory
postelection call from Argentine President Mauricio Macri. A Macri spokesman denied to The Associated Press (AP) that the subject even came up in the call. The Trump Organization has also canceled licensing deals recently for hotels in Brazil, Azerbaijan and the neighboring country of Georgia. Trump’s ta x returns might shed more light on his businesses abroad, but he didn’t release them during the campaign, breaking decades of precedent. As president, he is not required to publish public financial disclosures until his second year in office.
Offices, condos, retail
Much of Trump’s wealth is in just four buildings, according to Forbes magazine, which has been tracking his holdings for 33 years. Three of them are in Manhattan—a wholly owned office building on Wall Street and stakes in Trump Tower on Fifth Avenue and an office tower nearby in midtown— and one is in San Francisco. Forbes’s estimate for the four buildings, after subtracting out debt on them owed by Trump: $1.5 billion, or 40 percent of the president-elect’s $3.7-billion total net worth. (Trump estimates his net worth at more than $10 billion and says the value of his brand name alone is nearly as much as the Forbes’ tally of everything.) Among many other properties, Trump also has investments in a Chicago hotel and one in Las Vegas and, of course, the new Trump International Hotel in Washington D.C. In the case of the latter, he doesn’t own the building, but rents it from the federal government.
Golf clubs
Trump has been busy adding to his portfolio of golf properties in recent years, and here he has been risking his own money by taking ownership stakes. It’s a bold bet. The golf business, in general, is suffering as membership in clubs has fallen. The Trump Organization has 17 golf courses in total. They include three in Florida, as well as links in California, New Jersey and New York. In 2014 Trump completed deals for Ireland’s Doonbeg golf club and Scotland ’s Turnberry resort, the site of several British Opens. He has also struck deals to open two clubs in Dubai, United Arab Emirates. Eric Trump, the president-elect’s son in charge of the courses, told the AP last year that they were doing “fantastically”. In his May disclosure, Trump reported $306 million in revenue from his courses, more than a third of that from the one in Doral, Florida. Trump did not provide estimates of costs or profits from the courses, so it’s not clear how much they are bucking the industry trend, if at all.
Suits and sofas, wine and cologne Don’t think your “Make American Great Again” hat is quite enough? Not to worry. You can wear Trump suits and ties, cufflinks and eyeglasses. You can dab yourself with Success by Trump, a cologne that his web site advertises contains hints of coriander and musk. You can drink Trump Natural Spring Water or Trump wine from his vineyard in Virginia. You can do that in a Trump chair, next to your Trump sofa and sideboard, while reading Crippled America, one of his many books. Trump reported that the books alone generated between $1 million and $5 million in income over the 17 months prior to the May disclosure. Other ventures aren’t faring, as well. The Trump Entrepreneur Initiative, the new name of Trump University, a real-estate seminar firm, reported $13,000 in income in the May disclosure. Trump announced after the election last year that he would pay $25 million to settle three lawsuits alleging fraud at the school, but says he did nothing wrong. AP
news@businessmirror.com.ph
The Nation BusinessMirror
Editor: Dionisio L. Pelayo • Thursday, January 12, 2017 A3
Deployment of troops to communities to continue “Military presence should not be an issue, as it is requested by the people.” Communist rebels engaged in peace talks with the government, as well as activist groups have been demanding the pullout of troops from communities owing to alleged human-rights abuses and violations of the government’s unilateral cease-fire. Gen. Eduardo Año, Armed Forces chief of staff, said missions under DSSP Kapayapaan are intended purely to sustain the peace, ensure
T
HE military will continue to deploy units to communities, particularly those that request protective presence, under Development Support and Security Plan Kapayapaan, Marine Col. Edgard Arevalo, Armed Forces Public Affairs Office chief, said on Wednesday. “We don’t see any problems with our troops deployed in communities, their presence there was requested by the people…to be there and help the local government and empower our people, so their presence there is meant to serve the people,” Arevalo said.
Court dismisses Robin Padilla’s case against television network
T
HE Metropolitan Trial Court (MTC) in Manila has dismissed the civil case for damages filed by actor Robin Padilla against broadcast company GMA Network Inc., President and COO Gilberto Duavit Jr.; online editor in chief Jaemark Tordecilla and reporter Emil Sumangil for insufficiency of evidence. Padilla filed the complaint after Sumangil named Padilla in the GMA News TV newscast Balitanghali as the owner of a house where P1 billion worth of liquid methamphetamine hydrochloride or shabu was seized. The report was later posted on GMA News Online. Padilla clailmed that the mention of his name in the news reports was done with malice, and destroyed his reputation and integrity as a public figure. In her decision dated Judge Ihmie Michiko C. Gacad-Presto of Branch 5 of the MTC of Manila said the news report was not defamatory and that the actual damage to the plaintiff was not sufficiently proven. The court ruled that the statement cannot be considered defamatory, considering that there is lack of evidence supporting Padilla’s claim that the reports were intended to mislead the readers or viewers of both and that they were delivered to the public to maliciously discredit or injure him. With regard to the claim for damages, the court said it cannot solely rely on speculations and probability in upholding that Padilla’s public image was, in fact, damaged or injured or both. It added that in order to warrant an award of actual or compensatory damages, the complainant must prove that the damage sustained “is the natural and probable consequence of the negligent act” and that he or she must “adequately prove the amount of such damage.” Joel R. San Juan
Ligaya T. Engracia, 97
L
IGAYA T. ENGRACIA, widow of the late Artemio C. Engracia Sr., died on Tuesday, January 10. She was 97. She is survived by children Alma Lopez, Zenaida Racho, Luisa, Rodolfo, Artemio Jr. and Mario; children in law; sisters Purificacion and Liwayway; grandchildren and great grandchildren. Her husband Artemio Sr. died in 1980 and eldest son Virgilio in 2000. Her remains lie at the La Funeraria Paz on Araneta Avenue in Quezon City. Interment is tentatively scheduled on Saturday, January 14 at the Himlayang Pilipino in Quezon City.
To the rescue Red Cross volunteers administer first aid to a Black
Nazarene devotee during the annual Traslación. More than 1,900 devotees receive Red Cross assistance during the event. Among those who were given aid were persons who suffered dizziness, hypertension, sprain or fracture, various injuries and other needed assistance like looking for missing companions during the procession.
security and maintain public order. The campaign has four strategic components: Sustained military operation to defeat the foreign and local terrorist organizations; Contribute to the promotion of peace; Active support to law enforcement in the war against drugs; and Contribute to nation building. “The leftists have nothing to worry about. In fact, we expect them to cooperate with us so that
we can work out the attainment of a permanent and lasting peace,” Año said. He said that, while Kapayapaan is focused on the primacy of the peace process, bandit groups, like the Abu Sayyaf, Maute Group, Bangsamoro Islamic Freedom Fighters, Ansar Al-Khalifah Philippines, and other lawless groups will feel the full brunt of the military’s power. He said 51 battalions, the largest deployment ever, are in Western Mindanao to go after these groups. PNA
Economy
A4 Thursday, January 12, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon
Taxpayers laud fast, efficient processing of permits and tax payments in Makati City
T
axpayers in Makati have expressed satisfaction with the fast and convenient processing of tax payments and renewal of business permits at the city hall beginning this month, with the implementation of certain innovations by the current administration. Among the innovations are the strategic positioning of all concerned frontline offices at the ground floor lobby of City Hall Building II, highly visible signage showing the step-by-stop processes for each type of transaction and special lanes dedicated to senior citizens and persons with disability. Some clients who agreed to be interviewed noted that “transactions were being done more systematically and quickly,” as compared with their experience during the renewal period last year. Sari-sari storeowner Tirso Lagasca said that, aside from speedy transactions, he also appreciated the provision of a comfortable waiting area where clients can take a seat while waiting for the release of their papers. “Unlike last year, we no longer have to crowd in the same area while transactions are taking place. The setup now is more organized and efficient,” Lagasca said. A first-timer in renewing business permit, Jong Gomera, said he has not encountered any problem while renewing his employer’s business permit. “As long as the requirements are complete, transaction is fast,” he said. Another client, Boyet Cruz, who works in a foundation, noted that steps and procedures are visible in the area. “All we have to do is follow the stepby-step instructions, and we would complete our transaction with ease,” he said. Lawyer Maribert Pagente, head of the city’s Business Permit Office (BPO), said that with the new setup, clients have been relieved of the burden of going from one building to another at the city hall complex in renewing their permits and making payments. Pagente also urged business owners to prioritize the renewal of their permits to avoid penalties. Earlier, the city extended its working hours to accommodate taxpayers and business-permit transactions. Satellite tax realty payment centers have also been opened to serve clients from 9 a.m. to 4 p.m. on scheduled dates in 31 barangays of the city.
This week BPO and other frontline offices will be open to serve clients until 10 p.m. on weekdays, and from 8 a.m. to 8 p.m. on Saturday and Sunday. The deadline for the payment of realty tax in the city is on January 20. The remaining schedule for realty-tax payment in the barangays is as follows: La Paz, Santa Cruz, Singkamas, Tejeros and Kasilawan (January 11); Carmona, Olympia, Valenzuela, Poblacion and Guadalupe Viejo (January 12); Guadalupe Nuevo, Pinagkaisahan, Pitogo, Cembo and South Cembo (January 13). Payment centers in barangays West Rembo, East Rembo, Comembo, Pembo and Rizal will be open on January 16. The following are the requirements for the renewal of business permits: notarized application form (triplicate copy) with the following, gross declaration/receipts of the preceding year, number of employees and capital investment; previous year mayor’s business permit, billing assessment and official receipt; audited financial statement and/or income-tax return for the year 2015. For consolidated financial statement, attach breakdown of gross sales/receipts and proof of payments from other cities/municipalities. For fiscal year financial statement, attach breakdown of gross sales/receipts from January to December. Other requirements include barangay clearance for business; community tax certificate A & B for sole/single proprietorship, C & C1 in case of corporation or partnership; and comprehensive general liability insurance (Exempted: sari-sari store, carinderia and lessor, except building). The requirements for new business application are the following: locational clearance; contract of lease between the lessor and the lessee (If leased, attach mayor’s permit of the building owner/ landlord as a real estate lessor. If not, contract of lease between the lessee and sublessee with conformity of the building owner or building administrator. If owned, transfer certificate of title or tax declaration); business-name registration with the DTI, if sole/single proprietorship; approved articles of incorporation or articles of partnership; barangay clearance; public liability insurance; inspection report; and other pertinent information, documents and data that may be required. PNA
BusinessMirror
news@businessmirror.com.ph
DENR, groups oppose construction of Palawan underwater theme park
A
By Jonathan L. Mayuga
@jonlmayuga
proposed underwater theme park in Palawan, considered as the country’s last ecological frontier, is facing stiff opposition from ecology groups and possible rejection by the Department of Environment and Natural Resources (DENR), notwithstanding the proponents’ insistence that the project aims to advocate ocean protection and coralreef conservation.
Environment Secretary Regina Paz L. Lopez has taken a hard line stance against “destructive” development projects, particularly in Palawan. As chief steward of the environment, she had previously declared that Palawan is offlimits to destructive development projects, including mining and coal-fired power plants. W hi le L opez cou ld not be reached for comment as of this writing, a DENR Twitter account, @DENR _official, tweeted that Lopez is likely to disallow the proposed underwater theme park.
ECC review
She had earlier vowed to implement a stricter policy in issuing environmental compliance certificates (ECCs). An ongoing review of 800 ECCs caused the cancellation of six ECCs for mining projects and a housing project within the La Mesa Watershed. The DENR also issued showcause orders to 12 other companies with the threat of revoking their ECCs for failing to comply or meet certain conditions. Director Theresa Mundita S. Lim of the DENR’s Protected Areas and Wildlife Bureau (PWB), said such a huge a development project in an area considered as a
key biodiversity area (KBA) needs a long hard look. “Palawan hosts 70 percent to 80 percent of the Philippines’s marine biodiveristy, meaning [the] variety of fish and other marine resources can still be found in the sea areas in the country. This needs to be seriously considered in any infrastructure development in the coastal and marine areas in the province,” Lim said. Palawan is home to an assorted species of flora. Palawan’s waters also host unique marine wildlife, such as sea turtles, sea cow, dolphins, whales, stingray and sharks. The province is home to two United Nations Educational, Cultural Scientific Organization (Unesco) World Heritage Sites—the Tubattaha Reefs and the Puerto Princesa Underground River (PPUR).
The project
The American children’s television network Nickelodeon announced it will build an underwater resort and theme park on Palawan island. Ne w s re por t s quoted R on Johnson, an executive vice president with Viacom International Media Networks that owns Nickelodeon, said the resort would open in 2020 and would feature
restaurants and lounges 6 meters or 20 feet below sea level. The firm also said the development would advocate ocean protection and reef conservation. Viacom’s Philippine partner is Coral World Park. Its chairman, Paul Monozca, was quoted as saying they are taking measures to ensure that the biodiversity is kept intact. Despite assurances from the project proponents, environmental advocates are up in arms and vowed to oppose the project. Instead of building the moneymaking facility, the proponents of a proposed underwater theme park should help in real protection and conservation efforts, AA Yaptinchay of the Marine Wildlife Watch said.
‘Greenwashing’
Yaptinchay said the plan to build a resort was first floated in 2011, but it has yet to secure any permit from the DENR or Palawan Council for Sustainable Development (PCSD). “We believe the project is being supported by [the] local government,” he said. Yaptinchay also branded as mere “greenwashing” the claim of Viacom that the proposed underwater theme park it plans to build in the province would advocate ocean protection and coral-reef conservation. “The construction of the underwater [theme park] itself would degrade the coastal and marine environment. In constructing the facility, habitats, such as mangrove and beach forests, sea grass beds and corals, would be destroyed,” he added. Marine Wildlife Watch advo-
cates protection and conservation of marine wildlife. “Nickelodeon and its project partners should spend the money for constructing the theme park to actual or real marine life and habitat-conservation activities, instead of building a facility for profit,” Yaptinchay said.
Unsustainable
According to the project’s proponents, Palawan was chosen for the development, because it “is known to have some of the most beautiful beaches in the world today.” “Why do you need to build a theme park showcasing what is in our backyard all along. All you have to do is swim and enjoy nature,” Yaptinchay said. Oceana Philippines Vice President Gloria Estenzo Ramos also said the proposed plan is unsustainable and will irreparably damage the marine ecosystems and displace artisanal fishermen. Oceana Philippines, a chapter of Oceana, is an international ocean-conservation advocacy group. “I’m wondering if a thorough environmental and social-impact assessment has been done for such as an environmentally critical area. No place seems to be sacred for development projects nowadays,” Ramos said. Meanwhile, advocates, led by Anna Oposa, launched an online petition calling on the local government of Palawan and the project’s proponents to junk the plan. The petition, launched 16 hours ago as of this writing, already gathered 99,230 signatures validated by signatories’ e-mail addresses.
Nickelodeon and its project partners should spend the money for constructing the theme park to actual or real marine life and habitat-conservation activities, instead of building a facility for profit.” —Yaptinchay
House members back SSS premium hike after ₧1,000 pension increase By Jovee Marie N. dela Cruz @joveemarie
F
ollowing the approval of P1,000 increase for pensioners of the Social Security System (SSS), lawmakers on Thursday backed the plan of the pension agency to increase members’ monthly contributions. Party-list Rep. Rodel M. Batocabe of Ako Bicol and Nationalist People’s Coalition Rep. Rodolfo T. Albano III of Isabela said increasing the members’ contributions will save the SSS from potential bankruptcy. “It’s a circle of life. You cannot reap what you have not sown. So we have to increase contributions to keep the SSS afloat. Otherwise, we might just as well close the SSS,” Batocabe said in a text message to the BusinessMirror.
Illegal
Warning against what he termed as blatant law violation, Senate President Pro Tempore Franklin M. Drilon said the Duterte administration could not increase monthly contributions of SSS members to bankroll a plan to raise benefits of 2 million SSS pensioners. Such action, Dr ilon said, is contrary to the law. In a news statement issued on Wednesday, the senator asserted the SSS is “not allowed to raise the premium rates so it can increase benefits.” He invoked Section 4 of Republic Act 8282, which, Drilon noted, clearly prohibits the SSS to recommend increase in benefits that would require
an increase in contribution. “While the executive’s decision to finally grant the long-awaited increase in the pension of SSS retirees is commendable,” Sen. Drilon warns, “it should not be used to justify an increase in the premium payment.” According to Drilon, the increase in benefits of our pensioners must not come from a similar increase in the burden shouldered by current SSS contributors. “The law is crystal clear in that regard,” he added. The senator quoted Section 4 of RA 8282, which states that the SSS shall have the powers and duties “to provide for feasible increases in benefits every four years, including the addition of new ones, under such rules and regulations as the commission may adopt, subject to the approval of the President of the Philippines: Provided that the actuarial soundness of the reserve fund shall be guaranteed: Provided, further, that such increases in benefits shall not require any increase in the rate of contribution.” Drilon said this means the SSS can only implement an increase in the benefits of its members, subject to the approval of the President, “if such increase is based on the actuarial soundness of the reserve fund” and as “such shall not require any increase in the rate contribution.” But Drilon noted that SSS Chairman Amado D. Valdez in an earlier statement was quoted as saying that, “At the same time, his decision to implement the pension increase with a corresponding contribution hike and
Social Security System (SSS) pensioners and members line up at the SSS main office in Quezon City to follow up their benefit claims on the heels of President Duterte’s approval of an across-the-board pension increase of P2,000 that would benefit the agency’s over 2 million pensioners, with the initial P1,000 increase effective this month and another P1,000 in 2022 or earlier. NONOY LACZA
increasing the MSC [monthly salary credit] limits supports the continuing reforms in the SSS to consider the welfare of the greater population of over 30 million members, who look forward to their own SSS pensions at the time of their retirement.” The senator pointed out that, while the adjustment in the rate of contribution will take effect by May 2017, it is clear that such action is carried out in order to fund the pension increase.“The President’s move to help our aging SSS pensioners is laudable, but the Executive branch must also ensure that this pension hike will not be used as an excuse to enforce higher contributions from SSS members,” Drilon said.
‘Solomonic’ act
Albano, for his part, said it is high time to increase the pension of SSS members. Deputy Speaker and Liberal Party Rep. Romero S. Quimbo of Marikina City, meanwhile, described the increase as a “Solomonic” act. “That’s the Solomonic solution,” Quimbo said. House Committee on Appropriations Chairman and National Unity Party Rep. Karlo Alexei B. Nograles of Davao City said small sacrifces are needed for the benefit of all Filipinos in the future. “This was a commitment made by the President and it only shows that he keeps his word. This extra pension for our retirees and their beneficiaries
will definitely go a long way in making life a little better for our people. I also don’t see any reason to question the increase in contribution because it’s really been a while since we had a contribution increase,” he said. “We all have to learn how to make small sacrifices for the people around us. It is a small price to pay as it would also benefit all of us in the future,” Nograles added. During the 16th Congress, former President Benigno S. Aquino III vetoed the pension-hike proposal, saying he was worried that the stability of the entire SSS benefit system would be seriously compromised if he would allow the increase. On Tuesday the SSS has declared its support for President Duterte’s decision to approve an across-the-board pension increase of P2,000 that would benefit the agency’s over 2 million pensioners, with the initial P1,000 increase effective this month and another P1,000 in 2022 or earlier. However, the President has instructed the SSS to incorporate the proposal of the economic managers to ensure the sustainability of the pension fund by implementing an additional 1.5-percent contribution rate and lifting the maximum MSC to P20,000, from the current P16,000 by May 2017. “[The President’s] decision to implement the pension increase with a corresponding contribution hike and increasing the MSC limits supports the continuing reforms in the SSS to consider the welfare of the greater population of over 30 million members, who look forward to their own SSS pensions
at the time of their retirement,” Valdez said in a news statement.
Charter violation
While they welcomed the P1,000 pension increase, members of the Makabayan bloc said the plan of the SSS board to increase the monthly contributions of its members is against its Charter. Party-list Carlos Isagani T. Zarate of Bayan Muna, citing the SSS Charter, said such increases in the pension of its members should not require any increase in the rate of contributions. According to Zarate, they are now studying the final copy of the resolution, which the SSS Board submitted to Durtete, saying his group is ready to question the planned increase before the Supreme Court. Meanwhile, they urged SSS members to oppose the planned increase in contributions from 11 percent to 12.5 percent, or an increase of 1.5 percent on the members’ monthly contributions. Party-list Rep. Ariel B. Casilao of Anakpawis, instead, demanded reforms in the institution such as improving its collection rate and coverage, getting rid of huge salaries and bonuses of executives and risky investments to the private sector. In December 2015, Casilao said the delinquency in premium contributions and penalties of employers pegged up to P4.845 billion in the National Capital Region. Also in the same year, the Commission on Audit upheld its decision ordering SSS to return the P71 million worth of illegal bonuses. With Butch Fernandez
Agriculture/Commodities BusinessMirror
news@businessmirror.com.ph
Editor: Jennifer A. Ng • Thursday, January 12, 2017
A5
PCA sees early release of coco-levy fund By Jasper Emmanuel Y. Arcalas
A
@jearcalas
stumbling block to the immediate release of the P75-billion coconut levy fund, which can be used to bankroll programs to help farmers, will soon be removed, according to the Philippine Coconut Authority (PCA).
PC A Administrator Avelino Andal made the statement after the Confederation of Coconut Farmers’ Organization of the Philippines (Confed) has agreed to withdraw its petition before the Supreme Court (SC) to halt the release of the coco-levy fund. “One of the seemingly major stumbling blocks to the early disposition of coco-levy fund is hopefully and finally resolved with the Confed’s declaration of withdrawal of the petition for a temporary restraining order [TRO],” Andal said in a statement. He said Confed’s decision was made after he and the group’s representatives agreed on what needs to be done to help farmers and develop the coconut industry. “With this development, President Duterte can now dispose without much legal impediment, considering that he promised the electorate, the farmers in particular, that he will release the coco-levy fund in 30 days,” Andal said. Charlie Avila, executive director and spokesman of Confed, said the petition they made was directed against the previous ad-
ministration “for reasons quite publicly discussed.” Avila added that the current administration has Confed’s support. “We, in Confed, believe that we have at last a government that means business for the benefit of coconut farmers and the development of the industry. We are willing to withdraw our petition before the Court to give PCA a freer hand in governance,” Avila said. The Presidential Commission on Good Government disclosed that the coco-levy fund that was collected from coconut farmers from 1973 to 1982 has increased to P75 billion. Avila said Confed believes that the PCA has the legal mandate to manage the fund as part of its job to oversee the coconut industry. In September last year, Malacañang ordered the Department of Agriculture (DA) to file a bill that would expedite the release of the P75-billion coco-levy fund to help farmers fight cocolisap or coconutscale insect infestation. Agriculture Secretary Emmanuel F. Piñol said President Duterte instructed him and Presidential Liaison Officer Adelino B. Sitoy to
File photo
work with Congress to fast-track the passage of the measure. In end-November, after assuming office, Andal urged lawmakers to fast-track the consolidation of bills for the passage of a law for the handling of the coconut-levy fund. Andal said he is hopeful that the P75-billion fund would
be released by March this year. Confed filed a petition before the SC in May 2015 seeking the nullification of Executive Orders (EO) 179 and 180 that dwell on the inventory and privatization, as well as the reconveyance and utilization, of coco-levy assets, respectively. Avila said the EOs would result to
DA seeks more investors in PHL rubber industry T o expand the Philippine rubber industry, the Department of Agriculture (DA) said is currently on the lookout for investors who can manufacture other rubber-based materials, such as condoms. Philippine Rubber Research Institute (PRRI) Executive Director Rodolfo L. Galang said the Philippines is “a viable and healthy market” for condom manufacturers. The PRRI is an attached agency of the DA. “We need to look for an investor, a condom manufacturer, because we don’t have such in the country. We have a big population and all of our condoms are being imported from Malaysia and Thailand,” Galang told reporters in an interview on Tuesday. “There’s really a potential for such market here. Actually, we even have a program wherein the Department of Health is distributing condoms, and still we are importing the condom products,” he added. Galang said the country needs a plant that would process latex, a ma-
terial needed in manufacturing condom. Citing PRRI data, he said there are currently 25 natural rubber-processing plants in the country, which mostly cater to tire manufacturers. If the DA succeeds in jumpstarting a local condom manufacturing industry, then it would generate more jobs and help control the country’s population growth, Galang said. “And economically speaking, instead of importing the product, we would have now our own locally produced ones. We would earn more,” Galang said. He said other rubber-producing countries have put up various processing and manufacturing plants as a strategy to control the price of rubber. “Because the price of rubber has dropped in the past four years, the strategy of the members of the Association of Natural Rubber-Producing Countries [ANRPC] is to increase local consumption. Meaning, putting up more manufacturing plants for different products,” he said.
Galang also said the government is scouting for potential investors who can manufacture health-related products, such as medical gloves and catheters, as well as household gloves. “The feasibility study on these might take long, but we are hopeful that by 2019 we could already attract potential investors,” Galang said. Galang added that the local rubber industry is underdeveloped compared to those in other Asian countries despite the fact that the Philippines produces more rubber. “Our rubber industry is underdeveloped compared to Malaysia, Thailand, Indonesia and Vietnam. They have a more developed industry, particularly their manufacturing industries,” Galang said. “They do not sell raw rubber anymore in their local market and they are even importing raw materials outside,” he added. Citing data from ANRPC, Galang said the Philippines’s rubber production in 2016 grew by 10 percent to 110,000 metric tons (MT), from
100,000 MT recorded in 2015. “We are producing enough for our yearly requirement, around 110,000 MT a year, but our consumption, according to our data, is only around 30,000 MT,” he said. Galang the remaining figure-around 80,000 MT—was exported to Malaysia, Japan, South Korea, and China. Galang said added that he expects the country’s rubber production to grow by at least 2 percent this year. “There would be greater harvest coming from the plantations, which have matured already, those were planted in 2010 and 2011.” “But still, we have to replant more because there are old plantations, let’s say around 50,000 hectares that need replanting. These plantations have very low productivity that’s why we are looking at an intensified replanting activity,” he added. Galang said the PRRI is targetting to replant rubber in 15,000 hectares of plantations this year. Jasper Emmanuel Y. Arcalas
EU and FAO team up to address alarming food insecurity in Yemen
W
ith 14 million people food insecure in strifetorn Yemen, the European Union (EU) has committed €12 million in support of the Food and Agriculture Organization’s (FAO) efforts to tackle rising hunger. EU funds will be used to provide a better understanding of the magnitude of the current situation and avert a deepening crisis, while providing immediate agricultural support to more than 150,000 people to help them rapidly improve food production and nutrition. In Yemen agriculture plays a critical role in food security. This is especially true for those living in rural areas of the country, where
insecurity and isolation mean food and other forms of humanitarian assistance are intermittent. Agricultural assistance can provide critical relief and is crucial for tackling the disturbingly high levels of malnutrition. “This is one of the world’s worst humanitarian crises. People’s access to food is rapidly worsening and urgent action is needed,” said Salah Hajj Hassan, FAO representative in Yemen. “The EU’s contribution will greatly strengthen our ability to collect critical data on food security so that swift action can be taken to avert a further deterioration in the situation. It will also boost efforts to build the resilience of farmers
and herders, especially women, by helping them to increase the value of their agricultural production,” he added. The project will support incomegenerating activities, such as backyard poultry rearing, dairy production and beekeeping. Beneficiaries will also have opportunities to boost their incomes by learning how to improve their farming techniques, and about food processing, packaging and marketing. Farming communities will also learn about proper and efficient irrigation systems to mitigate against the risks of water scarcity, drought and climate changes. The installation of solar pumps will ensure the provision of power to sup-
ply water for farming households suffering acute fuel shortages. Support to the early-warning system will include enhancing the collection; analysis and management of nutrition and foodsecurity data; and translating alerts into swift response to any emerging crisis. In Yemen FAO works closely with all partners to provide emergency agricultural livelihoods support. The organization’s efforts are helping to address the acute food insecurity and malnutrition situation, protect and restore agricultural livelihoods, and strengthen the resilience capacities of the most affected members of the population.
a new plunder of coco-levy funds. The SC ruled in favor of Confed, issuing a TRO in the use, control and release of the P75-billion coco-levy fund. The TRO in favor of Confed orders the halting of EO 179 (Providing the Administrative Guidelines for the Inventory and
Privatization of Coco Levy Assets) and EO 180 (Providing the Administrative Guidelines for the Reconveyance and Utilization of Coco Levy Assets for the Benefit of the Coconut Farmers and the Development of the Coconut Industry) both issued on March 18, 2015.
Rescued ‘sacadas’ blame ‘contractualization’ scheme for ‘slave labor’ By Jonathan L. Mayuga
R
@jonlmayuga
escued Hacienda Luisita sugar-plantation workers from Mindanao on Wednesday blamed the “contractualization” scheme for the “slavery” that continue to victimize landless farmers in agricultural plantations. A group of sugar plantation workers, or sacadas, joined protests, led by the Kilusang Mayo Uno (KMU) and the All Workers Unity (AWU), before leaving Manila to return to their home town in Mindanao. Rescued by members of the Unyon ng mga Manggagawa sa Agrikultura (UMA), the sacadas vowed to file criminal raps against their contractors and employers, Greenhand Labor Service Cooperative, Agrikulto Inc. and Central Azucarera de Tarlac (CAT) for human trafficking once they return to Bukidnon. The rescued sacadas claimed to receive a measly P10 a day for a hard day’s work, which starts in the break of dawn. Their job is to harvest sugarcane and load them to waiting trucks to be brought to a nearby sugar mill. They were hired as contractual employees only to find out that they will be working under harsh conditions. One of the workers who was sent back home died of illness which was aggravated by the poor working condition as a sacada. Sacadas are seasonal workers contracted to harvest sug-
arcanes by the sugarcane plantation owners in the Visayas and Luzon. Fed up with their “slave-like” working condition, they sought the help of UMA to file appropriate charges against their employers and recruiters. U M A S e c ret a r y- G e ner a l Danilo Ramos, who accompanied the first batch of sacadas back to Mindanao, joined the leaders of KMU and AWU in condemning the Department of Labor and Employment’s (DOLE) new Department Order (DO) 168. “The sacadas were subjected to worst forms of exploitation and contractualization in Hacienda Luisita. This new DO 168 does nothing to end contractualization. Instead, it glosses over liabilities of despicable contractors,” Ramos said. According to Ramos, “moder n-day slaver y” is technic a l ly le g it i m i z e d b y s uc h DOLE orders. In ef fect DO159, or the Guidelines for the Employment of Migratory Sugar Workers, which was signed on June 22, 2016, and reinforced by DO 168 institutionalizes labor-only contracting, unfair deductions and daily pay way below the minimum wage. “These orders are rather puny attempts by the DOLE to make it appear that they are protecting sacadas majority if not all of migratory sugar workers are paid below the wage rates of local workers who also receive meager pay,” Ramos said.
TheBroa
Business
A6 Thursday, January 12, 2017
Unsolicited bids seen to let fly P
F
By Cai U. Ordinario
Sentavio | Dreamstime.com
Tele52 | Dreamstime.com
OR those used to air travel, it’s easy to doze off on your seat, especially if you know it’s going to be a long flight. But when you wake up only to find out that you’re still on the tarmac you should have left an hour ago, you just know that your flight is already delayed.
Even more worrisome is if you see several planes in front of you queueing to take off—that is one of the most irritating aspects about flying from a congested airport apart from losing your luggage. The traffic on the tarmac at the Ninoy Aquino International Airport (Naia) is one of the most visible signs of congestion, and highlights the need to build another airport in or near Manila soon. With the current administration’s openness to unsolicited projects, there are at least five groups keen on undertaking the New Manila International Airport (NMIA). These groups include San Miguel Corp., which is reviving its $13-billion-worth airport proposal in Bulacan under the Aquino administration; the DM Wenceslao group, which is proposing a combined airport and shipping port project in Sangley; and the Sy and Tieng group, which is proposing a $50-billion-worth airport and economic zone in Sangley. The National Economic and Development Authority (Neda) also said the New San Jose Builders Group has also proposed to include an airport in its Manila Bay flood-defense project, while the Okada group is looking to increase its investments in the country by participating in the bidding for the NMIA.
Attraction
WITH all the interest that the NMIA is attracting, the Neda told the BusinessMirror that it has already written the Department of Transportation (DOTr) to reconsider its decision to accept unsolicited proposals for the project. “Given the numerous proposals received with regard to the development of [the] NMIA, you may wish to subject the project to a competitive bidding rather than through unsolicited mode, unless SMCH [San Miguel Holdings Corp.] has been ac-
corded by your department an original proponent status,” the Neda said in a letter to Transportation Secretary Arthur P. Tugade dated October 27, 2016. The letter was signed by Neda Undersecretary and, at that time, Officer in Charge Rolando G. Tungpalan. While there is no cap or threshold on the number of proposals it will take before the government can decide to conduct competitive bidding, the sheer number of interested parties in the NMIA, in the Neda’s opinion, can make the NMIA a solicited project.
Concept
A document by multidonor technical-assistance facility called Public-Private Infrastructure Advisory Facility (PPIAF) explained that the concept of unsolicited proposals in build-operate-and-transfer (BOT) projects was introduced in Republic Act 7718 of 1994 and its implementing rules and regulations (IRR). The law and the IRR stipulate that unsolicited proposals should involve a new concept or technology and not be part of the agency or local government unit’s (LGU) list of priority projects, as consolidated under the medium-term public investment program for national government agencies. Likewise, RA 7718 and its IRR stipulate that unsolicited proposals should not require any direct government guarantee, subsidy or equity. “In addition, any component of an approved solicited project will not be eligible as an unsolicited proposal,” the PPIAF document said. The South African Development Community (SADC) Public Private Partnership Network (SADC 3P Network) has described unsolicited bids as “unique in nature and are bound to differ in how the private sector wants to deal with the government or the general public.” “Therefore, variations of the
OVERVIEW OF INTERNATIONAL BEST PRACTICE
The table below shows a list of different countries and how they approach unsolicited bids Country or State
Legal Framework
Type of system
Reimbursement of development costs?
Intellectual property rights
Andhra Pradesh (India)
AP Infrastructure Development Enabling Act No. 36, 2001
Swiss challenge
Yes, by government
After reimbursement proposal becomes property of government
Argentina
Presidential Decree 966, 2005
Bonus and best and final offer
Yes, by the winning bidder, 1% of estimated project cost
After 2 years proposal becomes property of government
Chile
Supreme Decree 956, 1999
Bonus
Yes, by winning bidder Reimbursement costs approved at the initial stage
*
Costa Rica
Decree 31836, July 2004
None
Yes, by winning bidder Reimbursement costs approved at the initial stage
After reimbursement proposal becomes property of government\
Guam (U.S. territory)
Public Law 24-294 1998
Swiss challenge
No
*
Gujarat (India)
Gujarat Infrastructure Development Act No. 11, 1999
Swiss challenge
Yes, by government
After reimbursement proposal becomes property of government
Indonesia
Presidential Regulation No. 67, 2005
Bonus or purchase of proposal
Yes, when bonus is not granted. Costs paid by government or by winning bidder.
*
Korea, Rep
Act on private participation in infrastructure
Bonus
No
*
The Philippines
BOT law
Swiss challenge
No
*
South Africa
PFMA & MFMA
None
Yes, by winning bidder Cost to be audited by an independent finance expert
Institution takes appropriate action to protect confidential and intellectual property rights
South Africa
Policy of SANRAL in respect of unsolicited proposals
Best and final offers
Yes, by winning bidder reimbursement costs approved at the initial stage
*
Sri Lanka
Guidelines on private sector infrastructure
Same as solicited projects
No
No
Taiwan (China)
Guidelines for Evaluation of Unsolicited Proposals, 2002
Combined bonus and Swiss challenge
No
*
Virginia (United States)
Public-Private Transportation Act of 1995. Va. Code Ann. §§56-560
Same as solicited projects
No
Public entity shall take appropriate action to protect confidential and proprietary information
The Philippines allows third parties to make better offers for a project during a designated period. The original proponent then has the right to countermatch any superior offers. Source: South African Development Community (SADC) Public Private Partnership Network (SADC 3P Network)
aderLook
sMirror
www.businessmirror.com.ph | Thursday, January 12, 2017
A7
Maxicam | Dreamstime.com
Pulsmusic | Dreamstime.com
PHL airport-expansion projects
Olena Ostapenko | Dreamstime.com
Tabled
proposals for partnership with the government might include requests for the government to borrow money, issue securities, invest public money, give guarantees or indemnities or operate bank account,” the SADC 3P Network said in a report. “Consequently, the government has to clearly state its position on which modalities will be accepted.” The report that evaluated the case for the Botswana government to adopt unsolicited proposals cited as an example the Philippine government, which the report said “does not allow direct sovereign guarantees, equity, or subsidies. It does not include market risks or revenue streams.”
Actors
IF the DOTr decides to conduct competitive bidding for the project, this means that the performance requirements or project specifications will be drawn up by the government. These requirements may include components, such as the ca-
pacity of the terminal, the number of runways, access to and from the airport, and other key aspects that will allow the NMIA to meet the country’s needs. The DOTr will also have to finalize the bid parameters, such as sovereign guarantees or premium payments, and the award will be granted to the group that offers the highest net present value. This means that if sovereign guarantees were chosen, the government will award according to the lowest subsidy sought. In terms of premium payments, the award will go to the company/group that will provide the highest offer. Going through a competitive bidding for a project will also promote transparency and prevent naysayers from claiming that the choice of the unsolicited proponent was made through a “sweetheart deal.” The unsolicited proposal, if the DOTr will push through with this mode, will still require a Swiss Challenge. The latter is a process by which other private groups could
THE Neda said the development of the NMIA was identified by the DOTr as one of its Core Investment Programs and Projects through the Public Investment Program Online. But the Neda estimates that building a brand-new international airport will take over 15 years to complete and be up and running. This is mainly because of the extent of civil works and the standards needed to be met to make the airport up to code. Persons working at the Neda told the BusinessMirror that other airport-development plans, such as expanding the Naia, have been thrown on the table. But the high cost of properties in the airport area makes this a costly venture. Assuming the government has the financial capability to obtain the land needed to build another runway for the Naia, the next problem is connectivity. Since the available land that could be expropriated will necessitate crossing the South Luzon Expressway (Slex), the only option for connectivity is underground, which is not feasible. Neda sources explained that an underground connection between Naia 2 and Naia 3 was ini-
tially explored. While the numerous underground utilities and the condition of the soil in the area because of groundwater sources could be addressed by modern technologies, the endeavor could be financially draining. The expansion of the Naia, Neda sources admitted, has been studied as early as the 1970s during the time of former President Ferdinand E. Marcos. But even at that time, expanding the Naia by adding more runways was not feasible due to the costs. In the absence of a new international airport, the Neda said the government can choose to divert flights 80 kilometers north to Clark International Airport (CIA) in Pampanga or other airports that are farther away from the Philippines’s capital.
Crucial
DIVERTING flights is crucial, since placing a new airport near the Naia could spell disaster for airlines’ flight paths. Having an airport with a different flight path will prevent disasters and the closure of the existing Naia airport. Neda sources said Clark could be a good option for a dual airport system. But unless the number of passengers using the airport could reach 10 million, it will not be economically viable. The Philippines cannot risk this, because it will surely cause the airport losses, the same thing that happened in London in the United Kingdom and Montreal in Canada.
Artem Tiurin | Dreamstime.com
still come forward to make an offer to match the bid of the proponent. However, the primary actor in the NMIA is still the DOTr. Whether it decides to implement the NMIA through unsolicited or solicited mode, the fact remains that the country is already in dire need of a new international airport to decongest the Naia. “They have not made a decision yet, that’s the problem. In the last two Infracom meetings, we were forcing the issue already because we need to decide on an international airport because we need one,” a Neda insider told the BusinessMirror.
When a second airport was opened in London, Gatwick airport, it initially booked losses because it competed with the same passengers going through Heathrow airport. Neda sources also recalled the time of the Montreal Olympics in 1976, when the Canadian government opened a new international airport. Right after the Olympics, the new airport and the existing airport experienced financial losses due to the lack of passengers.
Options
TUGADE has said that all unsolicited projects were welcome, but only if they met certain conditions. He echoed the SADC 3P Network view said that the government would give no subsidies or sovereign guarantees. For airports, he said the government should not be compelled to provide support in terms of encouraging airlines to locate at the new facility. The Clark International Airport (CIA) was the most viable Naia alternative, but even DOTr officials admitted that luring traffic there would be challenging without first building a mass-transit connection like a train system. Still, the Duterte administration said it is studying a plan to revive the operation of the Subic Bay International Airport (SBIA). “Subic Airport is a very good airport, but its equipment were no longer there,” Tugade said. “Maybe one possibility is to look into the revival of the airport, and we are ready for that possibility.” During the BusinessMirror Coffee Club forum last year Transportation Assistant Secretary Cherie Mercado-Santos confirmed there is a proposal of having a Naia “twin”. When asked about an alliance of businessmen interested in the airport project, Mercado-Santos said, “As far as the DOTr is concerned, there’s a process; you have to follow the process: Give a proposal.” She added that the DoTr is definite about its plan to build another airport apart from Sangley and the Naia.
Viability
MERCADO-SANTOS last year banked on the viability of the CIA as a fresh alternative to the Naia. She said during the BusinessMirror forum that Quezon City residents and northward would rather opt for CIA rather
than battle the traffic on Edsa on the way to the Naia. According to Mercado-Santos, “Tugade would like to expand and improve Clark and he wants to be a guinea pig for decongesting the Naia.” “While doing that, [the secretary] is also pressuring himself to make the interconnection to Clark by means of a railway,” she added. Asked if the DOTr meant that there should be three airports— the Naia, Sangley and Clark, Mercado-Santos said: “The [DOTr’s] belief is we’re open to more than two airports.” She said the SMHC’s proposal to build an airport in Bulacan would be viable because early study showed it is too far from Clark to affect its flight patterns. Aviation experts have said no two international airports should be closer than 25 miles. Otherwise, both of their traffic patterns would overlap. However, CIA Corp. (CIAC) CEO Alexander Cauguiran said in an interview that SMHC’s airport would be a losing proposition in Bulacan. “I doubt if the proposed airport in Bulacan would be viable,” he said at the signing of a memorandum of agreement between the Philippine Airlines and CIAC. “It is hemmed in by the Naia and Clark.”
Constraints
BUT given the constraints of Clark, as well as the fact that most travelers need to go to and come from Manila, they will not be able to address the needs of local and foreign travelers. Whether the DOTr decides to build a new airport through competitive bidding or unsolicited mode or operate a dual airport system with Clark, Sangley, or another airport somewhere in Bulacan, it cannot be denied that something has to be done about the congestion at the Naia. The current administration, given its promise of change, could do well to clear the path for better airport facilities. This will not only give local and foreign passengers comfort whenever they leave or arrive at the Philippines’s primary gateway but also boost the country’s chances of increasing tourist arrivals in the long term. Policy-makers should come onboard to the idea that the time to decide on the airport infrastructure issue is now. With additional reports by Recto Mercene
A8
Thursday, January 12, 2017
The World BusinessMirror
Editor: Lyn Resurreccion • www.businessmirror.com.ph
briefs
Pew: Officers reluctant to use force, make stops
ATLANTA—The so-called Ferguson effect—officers backing off of policing out of fear that their actions will be questioned after the fact— has been talked about but never really quantified. A new study suggests the effect is a reality, with three-quarters of officers surveyed saying they are hesitant to use force, even when appropriate, and are less willing to stop and question suspicious people. The nonpartisan Pew Research Center questioned at least 8,000 officers from departments with at least 100 officers between May 19 and August 14 last year—most of it ahead of the fatal shootings of five officers in Dallas and three officers in Baton Rouge. What it found was a significant fear among the police about their safety and about carrying out some of the everyday acts of policing. AP
Fierce battles leave hospital in Iraqi city of Mosul gutted
MOSUL, Iraq—After weeks of air strikes and artillery fire, Mosul’s al-Salam hospital is little more than a burnt-out shell. Retaken from the Islamic State (IS) group by Iraqi forces this month, the building’s top floors were almost completely destroyed. The gardens around the complex are strewn with medical records and supplies. Bright blue hospital bed sheets hang from nearby trees. The hospital in eastern Mosul was the scene of one of the most significant setbacks for Iraqi troops in the nearly three-month operation to retake Iraq’s secondlargest city. Last December 6 after advancing too quickly, Iraqi forces found themselves surrounded by IS fighters in the hospital complex. Pummeled by wave upon wave of militant counterattacks, dozens were killed and wounded, according to Iraqi military and hospital officials, eventually forcing a withdrawal. Some Iraqi army officers blamed the setback on insufficient air support by the US-led coalition. Others faulted poor leadership and a lack of coordination among the many disparate Iraqi forces participating in the Mosul offensive, including tribal and militia fighters who maintain their own command structures. AP
U.A.E.: 5 diplomats killed in Afghanistan blast
KABUL, Afghanistan—The United Arab Emirates (UAE) says five of its diplomats were killed in a bombing in Kandahar, Afghanistan, the previous day. The UAE said on Wednesday it will fly the nation’s flags at halfmast in their honor. Dubai’s ruler Sheikh Mohammed bin Rashid Al Maktoum, the UAE’s prime minister and vice president, said on Twitter that “there is no human, moral or religious justification for the bombing and killing of people trying to help” others. Afghan officials previously said the blast killed five people and wounded 12. Among the wounded were Kandahar Gov. Homayun Azizia, as well as UAE Ambassador Juma Mohammed Abdullah al-Kaabi. The Taliban issued a statement on Wednesday saying they did not plant the bomb, instead blaming an “internal local rivalry” for the attack. AP
Nigerian gov.: Aid groups misusing refugee funds
MAIDUGURI, Nigeria—The governor of Nigeria’s embattled northeastern Borno state accuses aid agencies, including the United Nations Children’s Fund, of profiting from funds meant to help refugees from Boko Haram. He says they should leave the country. The criticism follows Nigerian President Muhammadu Buhari’s charges that the United Nations and private agencies are exaggerating a massive humanitarian crisis created by the northeastern Islamic uprising to boost funding. AP
President Barack Obama, first lady Michelle Obama and Malia Obama with Vice President Joe Biden and Jill Biden take the stage after President Obama’s farewell address at McCormick Place in Chicago on January 10. Doug Mills/The New York Times
Obama’s farewell address: ‘Yes we did’
C
HICAGO—President Barack Obama delivered a nostalgic and hopeful farewell address to the nation on Tuesday evening, but warned both the divided country he led for eight years and his successor not to shrink from the challenges of economic inequality, racial strife, political isolation and voter apathy that still threaten its ideal of democracy. Obama returned to the city that nurtured his political career and his improbable journey from Hyde Park to Pennsylvania Avenue, just 10 days before he will leave the White House to Donald J. Trump. In his final speech to the nation, the president expressed his belief that even the deepest ideological divides can be bridged by an active, engaged populace. “After eight years as your president, I still believe that,” Obama told a large crowd at McCormick Place, the cavernous lakeside convent ion center, where he thanked supporters after his reelection in 2012. “And it’s not just my belief. It’s the beating heart of our American idea—our bold experiment in self-government.” Tearing up as he concluded the final speech of a remarkable political career, Obama thanked his wife, his daughters, his vice president (“the scrappy kid from Scranton”) and the army of supporters who helped sweep the first African-American into the White House. “I won’t stop; in fact, I will be right there with you, as a citizen, for all my days that remain,” Obama pledged, fighting back
10 The number of remaining days before US President Barack Obama will leave the White House to Donald J. Trump
emotion as audience members rose to their feet. He asked them to believe, as they did during his first campaign. “Yes we can. Yes we did. Yes we can.” But a president who rode an exhortation of hope and change to the Oval Office delivered a final speech to the country built around the need to confront a changing world and nation. Obama urged the country to dea l w it h t he
persistent problems t hat u nder m ine t he equ a l it y, d iver sit y a nd u nit y t hat he sought to ac h ieve du r ing h is tenu re. He sa id econom ic inequ a l it y wou ld cont inue to cause “ d is a f fe c t ion a nd d iv i s ion” a nd war ned that race would remain a potent force d iv id ing t he nat ion u n less d iscr im inat ion is at t ac ked a nd el im inated. “ B ut l aw s a lone won’t b e enough. Hearts must change,” he told the crowd. “W hen minority groups voice discontent, they’re not just engaging in reverse racism or practicing political correctness; that when they wage peaceful protest, they’re not demanding special treatment, but the equal treatment our founders promised.” The president said a splintered news media threatened democracy by allowing people to retreat into their own bubbles of knowledge, everyone certain of a different set of facts. “We become so secure in our bubbles that we accept only information, whether true or not, that fits our opinions, instead of basing our opinions on the evidence that’s out there,” he said. And, the president said, the countr y’s democratic order is threatened by a sense of apathy among the many Americans who do not vote or participate in civic life. He urged members of both political parties to work to restore trust in society’s institutions in ways that will attract more people to become involved in the country’s fate. “If something needs fixing, lace up your shoes and do some organizing,” Obama, a onetime community organizer, told the crowd. “If you’re disappointed by your elected officials, grab a clipboard, get some signatures and run for office yourself. Show up. Dive in.
Persevere. Sometimes you’ll win. Sometimes you’ll lose.” But, he added: “More often than not, your faith in America—and in Americans—will be confirmed.” Eight years ago, Obama basked in the glow of his history-making victory that drew nearly a quarter-million people to a jubilant celebration in the city’s nearby Grant Park. On Tuesday night, visibly older and chastened by years of political battles in Washington, Obama returned to his adopted hometown to bring his tenure to an end. “You are the best supporters and organizers anyone could hope for, and I will forever be grateful. Because yes, you changed the world,” Obama said. “I leave this stage tonight even more optimistic about this country than I was when we started.” But that expression of hope was tempered by t he rea l it y playing out in the nation’s capital: Trump has promised to unwind Obama’s legacy, erasing the president’s disciplined and professorial approach to governing with a noisy, chaotic style of leadership. Even as Obama took the stage, another controversy dogged Trump before his inauguration as unverified allegations about h is person a l beh av ior emerged in news reports. Obama said he had committed to ensuring Trump “the smoothest possible transition,” drawing boos from a crowd clearly not ready to see that happen; at one point, they began chanting, “Four more years.” Obama dismissed them quickly, though. “I can’t do that,” he said. In parts of the speech, Oba ma appea red to be t a l king to Tr u mp as muc h as t he rest of A mer ica, wa r ning h im of t he d a ngers of cont inu ing t o s t ok e t he d i v i s ion s t h at helped Republicans defeat
Hi l l a r y C l inton in t he president i a l ca mpa ig n. “ That’s why I reject discrimination against Muslim Americans,” Obama said to huge cheers from the adoring crowd. “ That’s why we cannot withdraw from global fights—to expand democracy, and human rights, women’s rights and LGBT rights—no matter how imperfect our efforts, no matter how expedient ignoring such values may seem.” To a successor who has often questioned the reality of climate change, Obama seemed to say: Be careful. “We can and should argue about the best approach to the problem,” he said. “But to simply deny the problem not only betrays future generations; it betrays the essential spirit of innovation and practical problem-solving that guided our founders.” For many Chicago residents, who embrace Obama as one of their own, the president’s speech was a coda to a political career that spoke as much to their own evolution as a community as it did to how the nation has changed over his eight years in office. The White House had meticulously planned the event, from the location to the tone and cadence of the speech. Obama was still rewriting the speech on Tuesday afternoon, one of his aides said, after being up late on Monday night scrawling edits on what at that point was the fourth draft. Dozens of alumni from the White House and Obama’s political operation converged on Chicago to witness their former boss’s last major turn on the national stage, attending parties and receptions all over town. “Beers and tears,” said Ben LaBolt, the former national press secretary for Obama’s reelection campaign. New York Times News Service
Smog-choked China swaps energy independence for cleaner air
C
hina is becoming more dependent on overseas natural gas as it seeks to wean itself off coal and avoid the toxic smog that suffocates the country every winter. The world’s largest energy user will increase imports of liquefied natural gas (LNG) about 30 percent this year, as domestic production stagnates and the government pushes cleaner fuels in an effort to clear polluted skies, according to SCI International and North Square Blue Oak Ltd. Imported gas, including both seaborne and pipeline supplies, may account for about 40 percent of the country’s gas use by the end of this decade, up from roughly a third last year, they said. China’s possible rising reliance on imported natural gas, along with its plans to spend $360 billion through
the end of the decade on renewable energy generation, highlight the challenges facing the government of President Xi Jinping as it seeks to throttle back poisonous air that blankets the northern part of the country during winter. Coal accounted for about two-thirds of the country’s primary energy consumption in 2015. “With domestic production stagnating and demand surging amid the government push to use more gas, China will have to rely more on overseas markets,” Tian Miao, a Beijing-based analyst at North Square Blue Oak, said by phone. “Foreign supplies are also cheaper” because production outside of China is often more efficient. LNG purchases by the world’s third-largest buyer surged to a record last November to
meet winter demand and avoid a repeat of last year’s shortages, which forced offices in Beijing to cut heating. Total gas imports climbed almost 22 percent in the first 11 months of last year, while domestic output gained only 2.2 percent, contributing to the surge in spot prices in northeast Asia that climbed to an almost two-year high lastDecember. The nation is aiming to raise the share of less-polluting natural gas to 10 percent of its energy mix by 2020 from 6 percent last year, the National Development and Reform Commission, the country’s top economic planner, said last month. The portion of gas will rise to 6.8 percent this year and the nation will “aggressively” expand its use, Nur Bekri, chairman of the National Energy Administration, said at the
national energy work conference, according to a posting on the administration’s web site.
Risky air
“I’m pretty optimistic toward natural-gas consumption and imports growth in China next year,” said Peter Lee, a Singapore-based analyst at BMI Research. “We expect to see continuous regulatory support from Beijing to drive gas consumption in a bid to arrest severe air pollution that continues to plague its major cities.” Heavy smog has forced more than 60 cities, including Beijing, to issue health alerts since the beginning of the year and even canceled or delayed hundreds of flights. Pollution was at medium or higher levels in 186 cities on January 3,
according to the Ministry of Environmental Protection. The country’s LNG annual imports will increase by between 12 billion and 15 billion cubic meters—the equivalent of 8.9 million to 11.1 million tons—over the next two to three years, with the start-up of long-term contracts, according to Lee. The country’s imports in the first 11 months of last year are up 27.5 percent to 22.3 million tons.
Larger slice
“I think China will challenge Japan and South Korea” as the world’s biggest LNG buyer in the future, said Michal Meidan, an analyst with Energy Aspects Ltd. “These are no longer big LNG growth markets. Rather, their import requirements are shrinking.” Bloomberg News
Asean
BusinessMirror
www.businessmirror.com.ph
Editor: Max V. de Leon • Thursday, January 12, 2017 A9
‘There are no homes left’: Rohingya tell of rape, fire, death in Myanmar The Asean automotive market and Europe’s growing involvement Asean-EU Perspective
HENRY J. SCHUMACHER
T
he Asean automotive market is dominated by Japanese brands, accounting for over 80 percent of the market share. The rest of the market in Asean comprises of American, Korean and European brands. The presence of Chinese and Indian original equipment manufacturers (OEMs) is, for the moment, marginal. This market composition has been the result of many years of sustained presence, localization and positive traction with various stakeholders by the Japanese manufacturers. It has also been supported by significant Japanese involvement in the overall economic development of the region. Asean has been a natural extension of the Japanese manufacturing footprint outside Japan from the perspective of sourcing and manufacturing, as well as sales. Key challenges for the European automotive sector that have prevented them from gaining a larger foothold in markets in South East Asia include: n High import duties and excise taxes; n Numerous nontariff barriers to trade; n Limited economies of scale in local production and purchasing; and n Government incentive schemes that have been mainly geared toward entry-level segments. Therefore, despite the rapid growth of the automotive market in Asean, the share of European automakers has been steady at around 1.5 percent. Most of the European sales are accounted for by BMW and Mercedes-Benz, which hold a dominant position in the “premium” segment. The Asean mass market is conspicuous by the absence of European models, usually priced out by cheaper locally produced Japanese brands, well supported by extensive dealer networks and aftermarket support. In the coming years, European brands, such as Volkswagen, Audi, Renault, Peugeot and Citroen, are likely to increase their presence and share in the mass car market. For example, Volkswagen, which already has a small-scale local assembly in Malaysia, has recently won approval for a new assembly facility in Thailand and is reported to be looking at sites in both Indonesia and the Philippines. Renault is also being reported as looking at setting up a production facility in Asean. German carmakers and car-parts suppliers are demonstrating their Asean focus by visiting Thailand, Vietnam and Indonesia in May this year. The creation of production facilities is high on their agenda. In the parts and components markets, European players have a well-established footprint with Bosch and Continental/Schaeffler playing a major role in both the OEM supply and the independent aftermarket. These component makers have not only invested in a strong manufacturing base across Asean, they have also established research and development centers. Increasingly, European suppliers are also looking at Asean as a global production hub—exporting parts and components from Asean to Europe’s major automotive factories. Putting in place further free-trade agreements (FTAs), such as the EU-Indonesia, EU-Philippines and eventually an EU-Asean FTA, would undoubtedly increase the potential for suppliers to export more from Asean to other global locations. However, moves also need to be made within Asean to remove differences in standards and testing regimes between intra-Asean markets to as to facilitate greater expansion of the supplier market in the region. There is little doubt that the European automotive industry is a significant source of innovation and development of new technologies for the world industry. Some 60 percent of the patents granted in the automotive sector in 2014 have been granted to European companies. Expenditure in R&D in the automotive sector in Europe (both OEMs and parts suppliers) amounted to more than €41.5 billion (2013), significantly more than any other industrial sector in Europe and more than other major global automotive players. The advances being made by the European industry are most clearly prevalent in the environmental arena, where European cars have seen carbon-dioxide (CO2) emissions of automobiles and the environmental impact of the production of motor vehicles fall significantly in recent years. There is little doubt that the European industry is leading the way for the broader global industry in this sector. Across the EU, as a whole, the average CO2 emissions from new cars in 2014 was 123.4 grams per kilometer, a fall of 2.6 percent over the previous year, with some of the EU member-states recording falls in the range of 4 percent to 6 percent. Given this background, it is trusted that the Philippine government opens the Comprehensive Automotive Resurgence Strategy program more constructively for European cars. Additionally, it is hoped that the EU and the Philippine government accelerate the FTA negotiations.
IN this December 3 file photo, Rohingya women and children wait in a queue to collect water at the Leda camp, an unregistered camp for Rohingya in Teknaf, near Cox’s Bazar, a southern coastal district about, 296 kilometers (183 miles) south of Dhaka, Bangladesh. Abuses appear to be “normal and allowed” in Myanmar’s security crackdown in response to an armed uprising among its Rohingya Muslims, a senior US official said in an interview, casting a pall over one of President Barack Obama’s legacy foreign-policy achievements. AP
W
hen the Myanmar military closed in on the village of Pwint Phyu Chaung, everyone had a few seconds to make a choice.
Noor Ankis, 25, chose to remain in her house, where she was told to kneel to be beaten, she said, until soldiers led her to the place where women were raped. Rashida Begum, 22, chose to plunge with her three children into a deep, swift-running creek, only to watch as her baby daughter slipped from her grasp. Sufayat Ullah, 20, also chose the creek. He stayed in the water for two days and finally emerged to find that soldiers had set his family home on fire, leaving his mother, father and two brothers to asphyxiate inside. These accounts and others, given over the past few days by refugees who fled Myanmar and are now living in Bangladesh, shed light on the violence that has unfolded in Myanmar in recent months as security forces there carry out a brutal counterinsurgency campaign. Their stories, though impossible to confirm independently, generally align with reports by human-rights organizations that the military entered villages in northern Rakhine state shooting at random, set houses on fire with rocket launchers, and systematically raped girls and women. At least 1,500 homes were razed, according to an analysis of satellite images by Human Rights Watch. The campaign, which has moved south in recent weeks, seems likely to continue until Myanmar’s government is satisfied that it has fully disarmed the militancy that has arisen among the Rohingya, a Muslim ethnic group that has been persecuted for decades in majority-Buddhist Myanmar. A commission appointed by Myanmar’s government last week denied allegations that its military was committing genocide in the villages, which have been closed to Western journalists and human-rights investigators. Officials have said Rohingya forces are setting fire to their own houses and have denied most charges of humanrights abuses, with the exception of a beating that was captured on video.
Myanmar’s leader, Aung San Suu Kyi, the recipient of a Nobel Peace Prize, has been criticized for failing to respond more forcefully to the violence. The crackdown began after an attack on three border posts in Rakhine state last October, in which nine police officers were killed. The attack is believed to have been carried out by an until-then-unknown armed Rohingya insurgent group. The military campaign, which the government describes as a “clearing” operation, has largely targeted civilians, human-rights groups say. It has sent an estimated 65,000 Rohingya fleeing across the border to Bangladesh, according to the International Organization for Migration. The number of Rohingya that crossed the border is higher than initially estimated because “the new arrivals were dispersed among the host community, mostly hiding in the forests and little villages,” said Peppi Siddiq, a project manager for the International Organization for Migration. Many of them, he said, were “too scared to make themselves known in case there would be repercussions.” “They started coming in like the tide,” said Dudu Miah, a Rohingya refugee who is chairman of the management committee at the Leda refugee camp, near the border with Myanmar. “They were acting crazy. They were a mess. They were saying, ‘They’ve killed my father, they’ve killed my mother, they’ve beaten me up.’ They were in disarray.” Soldiers were attacking villages just across the Naf River, which separates Myanmar from Bangladesh, so close that Bangladeshis could see columns of smoke rise from burning villages on the other side, said Nazir Ahmed, the imam of a mosque that caters to Rohingyas. He said it was true that some Rohingya, enraged by years of mistreatment by Myanmar forces, had organized themselves into a crude militant force, but that Myanmar had
There is a risk that we haven’t seen the worst of this yet. We’re not sure what the state security forces will do next, but we do know attacks on civilians are continuing.” —Fortify Rights dramatically exaggerated its proportions and seriousness. Rohingyas are “frustrated, and they are picking up sticks and making a call to defend themselves,” he said. “Now, if they find a farmer who has a machete at home, they say, ‘You are engaged in terrorism.’” An analysis released last month by the International Crisis Group took a serious view of the new militant group, which it says is financed and organized by Rohingya émigrés in Saudi Arabia. Further violence, it warned, could accelerate radicalization among the Rohingya, who could become willing instruments of transnational jihadi groups. In interviews in and around the Kutupalong and Leda refugee camps here, Rohingya who fled Myanmar in recent weeks said military personnel initially went house to house seeking adult men, and then proceeded to rape women and burn homes. Many new arrivals are from Kyet Yoepin, a village where 245 buildings were destroyed during a two-day sweep in mid-October, according to Human Rights Watch. Muhammad Shafiq, who is in his mid-20s, said he was at home with his family when he heard gunfire. Soldiers in camouflage banged on the door, then shot at it, he said. When he let them in, he said, “they took the women away, and lined up the men.” Shafiq said that when a soldier grabbed his sister’s hand, he lunged at him, fearful the soldier intended
to rape her, and was beaten so severely that the soldiers left him for dead. Later, he bolted with one of his children and was grazed by a soldier’s bullet on his elbow. He crawled for an hour on his hands and knees through a rice field, then watched, from a safe vantage point, as troops set fire to what remained of Kyet Yoepin. “There are no homes left,” he said. “Everything is burned.” Jannatul Mawa, 25, who is from the same village, said she crawled toward the next village overnight, passing the shadowy forms of dead and wounded neighbors. “Some were shot, some were killed with a blade,” she said. “Wherever they could find people, they were killing them.” Dozens more families are from Pwint Phyu Chaung, which was near the site of a clash between militants and soldiers last November 12. According to Amnesty International, the militants scattered into neighboring villages. When army troops followed them, several hundred men from Pwint Phyu Chaung resisted, using crude weapons like farm implements and knives, the report said. A Myanmar army lieutenant colonel was shot dead, and the troops called in air support from two attack helicopters. Mumtaz Begum, 40, said she was awakened at dawn when security forces approached the village from both sides and began searching for adult men in each house. She said she and her daughter were told to kneel down outside their home with their hands over their heads and were beaten with bamboo clubs. She said her 10-year-old son was shot through the leg, her daughter’s husband was arrested, and her own husband was one of dozens of men and boys in the village who were killed by soldiers armed with guns or machetes that night. Villagers, she said, “laid the bodies down in a line in the mosque and counted them.” Begum’s daughter, Noor Ankis, 25, said soldiers went from house to house the next morning looking for young women. “They grouped the women together and brought them to one place,” she said. “The ones they liked they raped. It was just the girls and the military, no one else was there.” She said the idea of trying to escape flickered through her head, but she was overcome by fatalism. “I felt there was no point in being alive,” she said. Ankis pulled her head scarf low, for a moment, removing a tear. She said she had been thinking about her husband. “I think about how he took care of me after we got married,” she said. “How will I see him again?” Sufayat Ullah, 20, a madrassa student, said he was home with his family on the morning of the attack and the first thing he registered was the sound of gunfire. He realized quickly, he said, that he could survive only by escaping. “When they found people close by, they attacked them with machetes,” he said. “If they were far away, they shot them.” Ullah ran from the house and bolted for the creek at the edge of town, and he dived in, swimming as far as he could. He said he spent much of the next two days underwater, finally scrambling onto the bank near a neighboring village. Only then did he learn that his mother, father and two brothers had burned to death inside the family house. “I feel no peace,” he said, covering his face with his hands and weeping. “They killed my father and mother. What is left for me in this world?” New York Times News Service
A10 Thursday, January 12, 2017 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
How to sabotage Duterte’s programs
L
ike most Filipinos who love President Duterte, we see the Chief Executive as a patriot with a genuine love for the poor. Knowing where his heart is, we have faith in the President’s desire to bring back the Philippines to a better economic situation, where everybody benefits from the wealth that the country generates. We believe he is doing his utmost best to level the playing field for businesses to flourish. Duterte knows that the Philippine economy will have a better chance to prosper when businesses are given fair incentives to compete, grow and expand. That’s how millions of jobs are created. Government agencies must, therefore, get their act together to help promote competition, entrepreneurship and innovation. These are effective strategies to strengthen the country’s entrepreneurial ecosystem. Unfortunately, while the President is trying to push economic growth by inviting foreign investors to set up shop in the country, certain government agencies are adopting policies that drive investments away, hurt our manufacturing and export sectors, and erect barriers to entrepreneurship. For example, recent regulations issued by the Department of Energy (DOE) and the Energy Regulatory Commission (ERC) could unfairly cripple big industries, including our electronics and semiconductor manufacturers, who are still praying for consistently clean-power supply at lower rates. The resolutions and circulars being questioned include DOE Circular DC2015-06-0010, titled “Providing Policies to Facilitate the Full Implementation of Retail Competition and Open Access in the Philippine Electric Power Industry”; ERC Resolution 5, Series of 2016, titled “A Resolution Adopting the 2016 Rules Governing the Issuance of Licenses to Retail Electricity Suppliers (RES) and Prescribing the Requirements and Conditions Thereof”; ERC Resolution 10, Series of 2016, titled “A Resolution Adopting the Revised Rules for Contestability”; and ERC Resolution 11, Series of 2016, titled “A Resolution Imposing Restrictions on the Operations of Distribution Utilities and RES in the Competitive Retail Electricity Market.” Affected businesses said the new regulations issued by the DOE and the ERC violate the Philippine Constitution and the Electric Power Industry Reform Act, which promotes greater end-user choice through free and fair competition. Worse, these regulations unwittingly created a virtual cartel of power suppliers chosen by the ERC. By compelling power consumers with a monthly average peak demand of 1 megawatt to abandon their current power-supply contracts and enter into new contracts with any of the favored suppliers chosen by the ERC, our regulators are themselves adopting antipoor policies. It does not take a genius to realize that these new regulations would lead to a spike in the cost of the power requirements of affected companies that could translate to an increase in the prices of goods and services, which is detrimental to the national economy. There’s no room for cartels in a free-market economy. And regulators must not use the heavy foot of the government to step on the windpipes of big industries that create jobs and wealth for the nation. By issuing wellintentioned rules that kill competition in the power sector, the DOE and the ERC must be reminded about the wisdom of oversight. Sometimes, government agencies would issue rules with unintended consequences— like sabotaging the administration’s economic programs. In cases like this, the best remedy is to recall or amend the rules and regulations in question.
The ‘Good Old Days’ are gone John Mangun
OUTSIDE THE BOX
H
ave you ever attended a high-school or college reunion? For one magical evening you relive those times when you were younger, when life seemed to be more fun. You may even think that you can recapture those good times with that neverforgotten crush.
But, in spite of all the promises that you will now keep in close touch, the next morning brings a return to “today”. Perhaps, there is a chat over coffee in a week or two, but essentially that period of your life is now a finished chapter, and you have moved on. There are a lot of people out there who have not moved on, and still think they can recapture the past days of glory. Maybe a good case in point is the latest political intrigue. Apparently, some of those opposed to the Duterte administration believe that people
are in the same place that they were a decade or two ago. One of the most interesting political activists was Saul Alinsky. He wrote the instruction manual for political organizing and protest— Rules for Radicals. One of his most important and successful concepts was to “go after people and not institutions; people hurt faster than institutions”. You need to get the people stirred up against a person. Pick an issue and never stop protesting. But Alinsky died in 1972 and, apparently,
Is history repeating itself?
Since 2005
BusinessMirror A broader look at today’s business ✝ Ambassador Antonio L. Cabangon Chua Founder
Publisher Editor in Chief Managing Editor Associate Editor News Editor City & Assignments Editor Senior Editors
T. Anthony C. Cabangon Jun B. Vallecera Max V. de Leon Jennifer A. Ng Dionisio L. Pelayo Vittorio V. Vitug Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos
Online Editor Social Media Editor
Ruben M. Cruz Jr. Angel R. Calso
Creative Director Chief Photographer
Eduardo A. Davad Nonilon G. Reyes
Chairman of the Board & Ombudsman President VP-Finance VP Advertising Sales Advertising Sales Manager Group Circulation Manager
Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Marvin Nisperos Estigoy Aldwin Maralit Tolosa Dante S. Castro
BusinessMirror is published daily by the Philippine Business Daily Mirror
HOM
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
Cecilio T. Arillo
database
M
Y answer is maybe. What is obvious, though, is that we have people repeating history, and President Duterte must look at this very seriously as a national security issue, because it involves his survival, the institution he represents and his covenant with the millions who overwhelmingly voted for him. The history I am talking about is the unconstitutional removal from power of President Joseph E. Estrada on January 20, 2001, which this writer wrote in comprehensive details into a book, Power Grab, published locally and by Amazon, one of the world’s largest publishing houses, in 2001. The oust, Duterte plot has similarities with what Estrada experienced, and some people involved in the antiEstrada campaign are also involved today, including people in the government and the private sector, elite businessmen and a selective group from both broadcast and print media. These people depend heavily on their Trojan Horses inside Malacañang and officers and men with mercenarian tendencies in the police and military organizations, hoping they will stage a mutiny or a coup like what happened in Estrada’s time. In the case of Estrada, the information filtering into his office about the plot was screened out by their insiders in Malacañang. The tragedy was that Estrada just ignored the information
when it finally reached him, including one occasion over dinner in a Singapore Hotel on November 26, 2000. “He thought he was too popular to be affected by it,” a former Cabinet member said. The ousting of Estrada was not a spontaneous event, but a deliberate plot that started a year before as rumors, similar to what is now circulating as LeniLeaks, using massive disinformation and black propaganda carefully crafted to provide half-true, misleading or wholly false information to deceive the public and appeal to their emotion. Every day thousands of propaganda messages against Estrada, his family, friends and cronies were drummed into the minds of readers, radio listeners, TV viewers, teachers, students and other citizens. The rich elite, backed by moralist-prelates and the communists who have been craving to kick out Estrada from his post because of his nationalist policies and mundane traits, were behind it. That he was corrupt, a plunderer, womanizer, binge drinker and
many people have not read the book in a long time. He also wrote: “A tactic that drags on too long becomes a drag. Don’t become old news.” Since the last mass street protests in 2000, the Philippine economy has tripled in size, per-capita output is up 80 percent, and official unemployment has dropped from 14 percent to 5 percent. Sure, sometimes people are going to raise their fists in anger. And then they go back to work. There was a time that the press and media could say almost anything they wanted without fear of contradiction or question. But while they weren’t looking, the Internet—the eternal Internet— snuck up on them. New York Times columnist—and Hillary Clinton devotee—Paul Krugman thought budget deficits and increasing debt were wonderful in August 2016, when Clinton needed the money for her programs. “Right now, there is an overwhelming case for more government borrowing”. Last Monday, in the wake of Presidentelect Donald J. Trump calling for more borrowing and deficits for his
gambler, traits that they said do not sit well with a President, were their favorite issues against him. In December 1999 Stratfor, a political forecasting service founded in Austin, Texas, in 1996, ran on its Internet site a report that he would be removed from office before his term expires in 2004. The report was anchored on the belief that Estrada restored cronyism and was guilty of committing graft, fueling speculations that a coup was in the offing. Then came the banner story of the Philippine Daily Inquirer, a widely circulated newspaper owned by the Rufino-Prieto family highly critical of Estrada, quoting the World Bank as saying that $48 billion had been lost to corruption in 20 years. Both Stratfor’s and World Bank’s stories, although devoid of logic and substance, nevertheless created an impression that the Estrada administration was somehow shaky and corrupt. For example, if $48 billion (P2.4 trillion at P50 to a dollar) had been lost to corruption in 20 years, whose administration was it referring to? Ferdinand E. Marcos’s 20 years in office or Corazon C. Aquino’s and Fidel V. Ramos’s 12 years and four months in office? This cannot be because all three presidents had a total of 32 years and four months only? Marcos’s indebtedness to the International Monetary Fund-World Bank and other foreign financial institutions was only $26.3 billion in 20 years, compared to Aquino’s more than $38 billion in six years and four months, and Ramos’s $85 billion in six years, including domestic debts. In fairness, it cannot be Estrada’s,
programs, Krugman writes: “Running big deficits is no longer harmless, let alone desirable.” It is the same for the financial markets. Interest rates are set by the central banks, not by real people lending and borrowing. Twitter Inc. has never made a profit. Its business model still cannot project a future profit and has lost more than $2 billion since inception. The company is valued in the stock market at $12.6 billion. A house used to be priced on the cost of the land, materials, labor and a profit for the builder. Now we pay based on what someone else might buy it for five to 10 years in the future. We used to hold stocks for years of profit growth. Now we hold for weeks and even days and watch the “jockey” not the bottom line. Your crush has lost half his hair and gained 20 kilos. The good old days are gone. It is a different world today.
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.
because he was only in office for nearly 32 months. Although Stratfor ruled out coup, it mentioned two possibilities of removing Estrada from office: impeachment and people’s power revolution. Impeachment on the basis of Chavit Singson’s bribery allegations and incompetence which, according to them, resulted in the fall of the peso. Even during the campaigns for the 1998 presidential election, the anti-Estrada forces were already at work. The late President Aquino, for instance, led a campaign called “Anyone but Estrada,” which sought to sway voters away from Estrada. This campaign backfired, since it further solidified the poor to back Estrada after they saw the rich rallying against him. The elite and hypocrites who were at the forefront of the campaign appeared to be afflicted by some kind of perverse streak or a kind of moral degradation that ignored what Estrada has been doing for the masses or were embarrassed that their presidential candidates lost by a landslide in the 1998 elections. Or, perhaps, there was a deeper and subtler reason than plain ignorance and malice of what he does for the poor. These people who relentlessly maligned Estrada in rallies through the media were mostly the same self-proclaimed do-gooders who were shocked to see Duterte winning the polls by a mile despite their protestation that the man they hated most was a killer and a womanizer. For Duterte, history teaches us that forewarned is forearmed. To reach the writer, e-mail cecilio.arillo@ gmail.com.
Opinion BusinessMirror
opinion@businessmirror.com.ph
Underdeclaration of purchases not taxable income Atty. Filamer D. Miguel
Tax law for business
O
ne of the usual tools employed by revenue examiners in determining the correctness of the amounts reported by taxpayers is to compare it with third-party information. This is usually done through the computerized matching of data/ information or simply the comparison of the reported information by transacting parties, such as buyers and sellers or purchasers of goods and services, and their suppliers.
There is no problem with this approach. However, one mistake commonly committed by the revenue officers is to conclude that the difference between a taxpayer’s recorded purchases and his supplier’s reported sales is a taxable income. It is usual for taxpayers to be assessed for income and valueadded taxes emanating from the tax bureau’s comparison between the taxpayer’s reported purchases in the Summary List of Purchases (SLP) vis-à-vis a third-party data, such as the Summary List of Sales (SLS). In the event that the sales reported by the supplier in its SLS are higher than the total purchases declared by the taxpayer in its tax return or SLP, the usual conclusion is that the difference represents an understatement of purchases. And worst, this is equated to an undeclared income, resulting in the assessment of deficiency income tax and value-added tax (VAT). There are already a number of cases decided by the Tax Court holding that the assessment resulting from this approach is without basis. In its decision promulgated on January 4 of this year, the Tax Court, in CTA Case 8588, resolved against the position of the tax bureau and concluded that a finding of underdeclaration of purchase does not, by itself, result in the imposition of income tax and VAT. This is basically a reiteration of the court’s earlier decisions in CTA Case 8345 (May 29, 2013) and CTA Case 7853 (February 16, 2012). The court further laid down that there are three elements in the imposition of income tax, which are as follows: (1) there must be gain or profit; (2) the gain or profit is realized or received, actually or constructively; and (3) it is not exempted by law or treaty from income tax. Likewise, the court clarified that income tax is assessed on income received from any property, activity or service that produced the income. Hence, it is not when there is an underdeclared purchase, but only when there is an income, and such income was received or realized by the taxpayer, that an imposition or assessment of income tax is proper. In these cases, the said elements were not present. Apparently, the
It must be emphasized that for income-tax purposes, a taxpayer is free to deduct from its gross income a lesser amount, or not claim any deduction at all. What is prohibited by the incometax law is to claim a deduction beyond the authorized amount. Hence, even granting that there are undeclared purchases, which means there are unclaimed costs/deductions, the same is not prohibited by law. tax bureau merely presumed that the discrepancy between the taxpayer’s purchases and its supplier’s sales constituted undeclared income. Clearly, the bureau’s assessment was not based on undeclared income actually received by the taxpayer. Moreover, it must be emphasized that for income-tax purposes, a taxpayer is free to deduct from its gross income a lesser amount, or not claim any deduction at all. What is prohibited by the income-tax law is to claim a deduction beyond the authorized amount. Hence, even granting that there are undeclared purchases, which means there are unclaimed costs/deductions, the same is not prohibited by law. Instead of treating the difference as addition to income, the bureau should do the opposite, that is, to deduct the unclaimed purchases from the income as additional costs. Commit to memory that an underdeclaration of purchases does not translate to income subject to income tax and VAT to which an assessment may be anchored. The author is a senior associate of Du-Baladad and Associates Law Offices, a member-firm of World Tax Services Alliance. The article is for general information only and is not intended, nor should be construed, as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at filamer.miguel@bdblaw.com.ph or call 403-2001, local 360.
Political noise Val A. Villanueva
Businesswise
L
ooks like the Philippine economy in 2017 will not be that promising, if we go by the prediction of Dutch multinational banking and financial-services corporation ING Group (Dutch: ING Groep), which sees the peso weakening by 4.4 percent, and trade deficit exceeding remittances for the first time in decades. The forecast is based on President Duterte’s spending plans that could boost imports, even as rising US interest rates spur capital outflows. According to ING, 2017 will be the
first year “in about a decade when the amount of money Filipinos send home from abroad will be lower than the trade deficit.” Because of this, the Dutch lender says the peso could be
Learning from a child Msgr. Sabino A. Vengco Jr.
Alálaong Bagá
T
he Feast of the Santo Niño every third Sunday of January is proper to the Philippines. In a way, it is a Filipino extension of the Christmas season, even as it reflects our deeply ingrained love for children, which here, in the light of the Gospel, becomes a medium for our spiritual growth and maturity (Matthew 18:1-5, 10).
The greatest in the kingdom
Life in fellowship with God is not to be judged according to the world’s category of honor and greatness. Greatness in the kingdom of heaven for Jesus is modeled by a child, who, in the world of utilitarianism and activism, is a picture of uselessness and helplessness. The very helplessness of a child is, however, the precise situation for the divine love and mercy, the human “emptiness” ready to be filled up by God’s munificence. The true greatness of any human being lies in the unmerited love and care the Creator pours out on humankind. Being ready to receive and grow,
as a child images in what God gives, is the road to greatness that lasts forever. In the reign of God, a child is already like a receptacle full as can be of the divine goodness; tragic is when growing in worldliness the “innocence” of the child is lost. The child is Jesus himself who in the incarnation became one of us beginning as a child. He assumed our neediness as a child lying on a manger, “because there was no room for them in the inn” (Luke 2:7), with shepherds as his first visitors (2:15f), the entire family threatened into fight by the mighty Herod (Matthew 2:13), one who grew “in wisdom and age,
Fake news Ernesto M. Hilario
ABOUT TOWN
W
E reported the other week about the fake news that Smart Communications will have to stop operations in March this year because Congress will not extend its original 25year franchise issued in 1992 for another 25 years, ostensibly because it failed to offer at least 30 percent of its shares of stock to the public, as required under the Public Telecommunications Policy Act of 1995 law and its own legislative franchise. We received an e-mail from the telco explaining in detail its position on the matter. “The information about the supposed congressional stumbling block is completely false, because the truth is the Committee on Legislative Franchises of the House of Representatives agreed last November that Smart had, indeed, already complied with the public ownership provision under its franchise because its parent firm PLDT is already a listed company at the Philippine Stock Exchange [PSE]. “Following extensive deliberations at the committee level on the bill seeking to renew Smart’s franchise, the House of Representatives approved a consolidated measure, House Bill 4637, on first reading last December 7, and then on second reading on December 13, or before the traditional Christmas break of both chambers of the Philippine legislature. “These facts are on record and can easily be accessed at the House of Representatives web site. Thus, it is puzzling why false reports about Smart’s franchise renewal had circulated in the mainstream
media—especially after the House had already passed the measure. “The ones peddling the wrong information are certainly no morons who are clueless on the latest developments in Congress or clueless on how the legislative process actually works in both chambers. Hence, the only explanation for this apparently deliberate dig at disinformation that we can think of is that there could be a hidden—and sinister—agenda behind it. “As for the Senate, the most likely thing that would happen is that it would approve the franchise bill that would be referred to it by the House following its approval there on third and final reading after Congress resumes its session on January 16 after the annual break. “This likely scenario throws out the window another fib being spread by the disinformation peddlers, which is that the only way for Smart’s franchise bill to pass through both chambers is for President Duterte no less to ram it down the legislators’ throats. “In the first place, there is no need for any arm-twisting by the
the collateral damage of an economy growing faster than 7 percent, and the government’ infrastructure program driving demand for inward shipments. I agree. This is the year—and perhaps, continuing through the next year—that we’ll see the peso struggling against the US dollar. Technically, a robust domestic sector would need imports of both consumer goods and durable equipment, as the economy inflates and sashays into investment-driven growth. But what worries me more is the political noise being generated by the loyal camp of Duterte and defeated vice-presidential bet Bongbong Marcos. In their spirited defense of their idols, Duterte and Marcos’s followers have been throwing everything but
the kitchen sink at people who voice their dissent against the present dispensation. The latest of these onslaughts is the so-called Lenyleaks—e-mail exchanges among supporters of Vice President Leny Robredo, which purportedly seek the ouster of Duterte from office. These Lenyleaks, however, have been dismissed as nothing but a political expression that is protected under the Bill of Rights. No less than Banko Sentral ng Pilipinas (BSP) Gov. Amando M. Tetangco Jr. believes that, despite the country’s economic fundamental remaining intact, “the operating environment has become more difficult.” He admits that political noise and global economic expansions are generating financial market volatility, and complicating
Thursday, January 12, 2017 A11
and favor before God and before man” (Luke 2:52), and a child destined “to be a sign that will be contradicted” (Luke 2:34). He took upon himself our humanity in obedience to the Father and for love of us. In becoming a child, Jesus, in humility and total trust in the Father’s love, is now normative to anyone wanting to be admitted into communion with God. Our humanity embraced humbly and lived fully in God’s love is our experience of existence in holiness and the promise of eternal fulfillment.
Jesus the Child received
“Whoever receives one child such as this in my name receives me” (Matthew 18:5). As Jesus himself was the child received and also rejected, any child now received or rejected is an extension of Jesus mediating His transforming commitment to our humanity. As the incarnate Son of God one with and for us, His own humanity now even as a child is the primordial sacrament of our salvation. Anything done to this humanity is done to him; anything intended for Him must be in relation to and for the humankind He has identified Himself with. Any response to His initiative of saving love is measured
President—assuming, just for the sake of argument, that he has the desire to do so—either for or against the approval of Smart’s franchise, because the bill has a robust legal leg to stand on its own. “Second, it would be futile for him to do so, because the Senate, for one, is equivalent to having 24 independent republics. Close watchers of congressional developments—as the disinformation peddlers are expected and supposed to be as social influencers—know that no President in recent Philippine history has been able to pressure the fiercely independent Senate as an institution into blindly approving anything just because the Chief Executive of the land has said so. “Third, developments in both the Executive and Legislative branches in the first half-year of the Duterte presidency indicate that the President is no micromanager when it comes to issues other than his signature peace-and-order drive. It is not just his style to put pressure on legislators to do something—which is actually just fine by us in keeping with the supposed separation of powers between these two branches of government.” So there. Beware of fake news that’s getting more and more circulation in traditional, as well as social, media.
Real deal
DO we really need the Philippine equivalent of the National Aeronautics and Space Administration of the United States? Sen. Loren Legarda thinks so, and that’s why she has filed a bill proposing the creation of the Philippine Space Agency. Senate Bill 1259 seeks to establish a Philippine Space Development
policy formulation and execution. The ambiguous international environment, fueled by Donald J. Trump’s ascent as the 45th US president, and the anxiety over Duterte’s pivot toward China are likely to encourage investors to mandate a peso premium. Although the FDI remained over a fifth higher than in 2015, Duterte’s pronounced economic separation from the US, a longtime economic and political ally of the Philippines, has caused the four-month-low drop in the net inflow of job-generating foreign direct investment of $342 million. BSP records show that net FDI inflows in October 2016 were down 14.3 percent, from $399 million during the same month in the previous year, and lower than September’s $469 million. In the first four months under
by what we do with our own humanity and the humanity of others, that is, with God’s child in each of us. “Do not despise one of these little ones” (Matthew 18:10). The stare of wide-eyed children wearily walking in search of freedom from war-torn homes, or scavenging in garbage piles, or shivering through the night on a sidewalk, or trembling in the presence of predators who kidnap and victimize them as sex slaves, apprenticecriminals and plain children-for-sale, or cheap, expendable child labor, painfully tells us that to be a child in our world is particularly to be helpless, unless lovingly received. What we willingly and intentionally extend to a child is a measure of our faith, hope and charity, and is the way for us to the love of God in Christ Jesus. Alálaong bagá, our Filipino celebration of the feast of the Child Jesus is our acceptance of the call of Jesus to become like Him in our humble and total openness to God’s love, as well as our willingness to be responsible for children as we are for Him. Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on dwIZ 882, or by audio-streaming on www.dwiz882.com.
Policy that will serve as the country’s primary strategic road map for space development. At the same time, it will create the Philippine Space Agency as the central government agency on space science and technology applications. Legarda’s rationale for filing the bill is this: “Space programs and development are not limited to sending astronauts to space or engineering space crafts and technologies, but they, in fact, address basic needs in our daily lives, such as the application of global navigation satellite systems, which directly affect industries, transportation management, national security, health management, and the expansion of scientific and engineering resources.” The proposed Philippine space development policy will focus on six key development areas: national security and development; hazard management and climate studies; space research and development; space industry and capacity building; space education and awareness; and international cooperation. The Philippines actually lags behind neighboring countries, such as Indonesia, Malaysia, Vietnam and Singapore, which have their own space agency with satellites devoted to telecommunications and Earth monitoring. The thing is, we actually have Filipino space scientists, but they have chosen to work in space agencies abroad due to lack of local opportunities. We fully support the passage of this bill as a national space program will benefit the country by allowing us to keep in step with technological innovations that we can use in various fields of national endeavor.
E-mail: ernhil@yahoo.com.
Duterte, FDI inflows totaled $2.025 billion, also lower than the $2.938-billion foreign investments from July to October last year. Duterte’s fiery outbursts and unpredictable behavior are a sure recipe for an economic downturn. They are mostly the cause of the dampened luster of the country’s stock market during the second half of 2016. The benchmark index dropped 16 percent from a peak in mid-July to finish the year down 1.6 percent. Hopefully, all this unwelcome political noise will die down, so that the government could buckle down to work on sustaining a sound national economy. For comments and suggestions, e-mail me at mvala.v@gmail.com.
2nd Front Page BusinessMirror
A12
Thursday, January 12, 2017
Peza to set up defense ecozones nationwide
T
HE Philippine Economic Zone Authority (Peza) is aiming to develop a nationwide network of defense industrial zones in a bid to strengthen the country’s military and defense manufacturing capability. Peza is inviting global defense and military industry players to locate in the newly expanded Government Arsenal in Bataan. The investment-promotion authority is rolling out the red carpet to interested military and defense industry players, including those in the Middle East, as the Government Arsenal Defense Industrial Estate is set to be expanded by 3,000 hectares. Peza Director General Charito B. Plaza told reporters this expansion has already been given the green light by the local government of Hermosa, Bataan, where the additional area is located.
1,500 ha The size of the property reserved for a new defense industrial zone in Puerto Princesa City
The present Government Arsenal is in the 340-hectare Camp Gen. Antonio Luna in Limay, Bataan, and will be part of a countrywide strategy of Peza to transform the country into a formidable military and defense equipment-
maker. “It’s a defense industrial complex, so we’ll be inviting defense industries around the world to locate, like in making of military aircraft and tanks, arms and ammunitions, drones and military clothing,” Plaza said. “I suggest that we have two in Mindanao, one in Puerto Princesa [City, Palawan], one in Zambales, and two or three in Luzon,” she added. The Government Arsenal will be the pilot area, considering the past development already put in by the previous administrations to transform it into an industrial estate. Puerto Princesa is the next site for another defense industrial zone, as the local government of the coastal city has donated 1,500 hectares for that purpose. To further buttress the country’s capability in the defense industry and attract more locators, Plaza will propose a deal to companies that, in lieu of their payment or costs to Peza, they can donate equipment or arms to the national government. Plaza said she has already pitched the country’s defense industrial complex at a defense expo in Qatar, and will do so again in a forthcoming investment road show in the Middle East in February. Catherine N. Pillas
www.businessmirror.com.ph
DUTERTE SIGNS ORDER PRESSURING SC TO LIFT CONTRACEPTIVES BAN By Cai U. Ordinario @cuo_bm
T
he Duterte administration is forcing the hand of the Supreme Court (SC) to lift the temporary restraining order (TRO) slapped on the distribution of modern contraceptives through the President’s latest executive order (EO). In a news briefing in Malacañang on Wednesday, Socioeconomic Planning Secretary Ernesto M. Pernia said EO 12 has been signed by the President. The EO aims to allow national and local government, as well as non-governmental organizations, the private sector and even donoragencies, to fully implement the Responsible Parenthood and Reproductive Health (RPRH) law by providing support and funding for it. “[The EO also aims to] motivate, urge to even pressure the Supreme Court to stop dilly-dallying on this TRO. A year-and-a-half is too long a wait. I don’t know why the Supreme Court cannot act swiftly,” Pernia said. “It’s been declared not unconstitutional, and yet they continue to listen to the small minority, small noisy minority. So, it’s really a tyranny of the minority,” he added.
6 million The estimated number of Filipino women who would need contraceptives by 2022
The administration wants to fast-track the lifting of the TRO because by 2018, the government may only have one or two contraceptive methods to peddle to women who want and need access to familyplanning methods. Population Commission (Popcom) Executive Director Juan Antonio Perez III said with the TRO in place since June 2016, around 15 contraceptives have been“left out of the market,”since their certificates of product registration (CPRs) have expired. Perez said this year, another 15 contraceptives will be taken out of the market due to expiring CPRs. This will leave only tubal ligation, vasectomy and natural family-planning methods available for Filipino families by 2018. “If the Supreme Court does not lift this TRO, then the authority of FDA [Food and Drug Administration], as well as those that can import pills and condoms and IUDs [intrauterine devices] will gradually
expire,” Pernia said. Pernia said while the EO was not intended to skirt the SC’s order, it will allow the government to make house-to-house calls and map the women in need of access to modern family-planning methods. The government can also offer women family-planning options, except those covered by the TRO, particularly Implanon, which is an injectable. Pernia said the EO will help address the rising number of teenage pregnancies, as well as prevent unwanted pregnancies and maternal deaths. The Philippines failed to meet the Millennium Development Goal (MDG) on Maternal Health due to the country’s high maternal-mortality ratio of 231 deaths per 100,000 live births. The target of MDG 5 was 52 deaths per 100,000 live births. Perez said the EO also aims to help the government achieve its goal of supporting the contraceptive needs of 2 million women in the next two years and increase this to 6 million by 2022. Perez also said under the RPRH law, the Department of Health, Department of the Interior and Local Government and the Popcom are tasked to reach out to these women. See “Contraceptives,” A2