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2017 banner year for PHL tourism $3.3 billion E By Elijah Felice E. Rosales

@alyasjah

xceeding expectations and shrugging off political noise on the war on drugs and terrorism in Mindanao, tourist arrivals in the Philippines reached a record 6.8 million last year, exceeding the government’s target of 6.5 million, according to the Department of Tourism (DOT).

Tourism Secretary Wanda Corazon T. Teo broke the news at the BusinessMirror Coffee Club forum on Thursday, and disclosed visitor arrivals in the country almost reached 7 million, which is her personal target for 2017. She said preliminary figures indicate around 6.8 million foreigners went to the country last year, exceeding the DOT’s target of attracting 6.5 million tourists. “[It was] almost 7 million. Our target was 7 million, but we have to reduce it to [6.5 million],” Teo said. Tourist arrivals last year is 15

The amount earned by the Philippines from tourism activities in January to August 2017

percent higher than that of 2016, when the country missed its target of pulling 6 million tourists here. This increase in tourist arrivals developed even as Manila suffered from political noise due to international criticisms on the war on drugs and the threat of Islamist extremism in Marawi City, Lanao del Sur, which resulted in a five-month battle in the Islamic town. Teo added the tourism industry was able to overcome these challenges due to the major events that had the ball rolling for the country, most especially Manila’s hosting of the Miss Universe last January and the Asean summit last April and November. This was on top of the Madrid Fusión Manila last April, World Street Food Congress Continued on A2

Tourism Secretary Wanda Corazon T. Teo (fourth from left) broke the news at the BusinessMirror Coffee Club forum that the country recorded 6.8 million tourist arrivals in 2017. Attending the forum are (from left) the BusinessMirror’s Mike Policarpio, Department of Tourism Assistant Secretary for Farm Tourism Eden David, DOT Assistant Secretary for Public Affairs, Communications and Special Projects Frederick M. Alegre, and BusinessMirror Publisher T. Anthony C. Cabangon. NONIE REYES

Metro Pacific’s unsolicited proposal State’s share for MRT 3 upgrade illegal–Sobrepeña in Malampaya By Lorenz S. Marasigan @lorenzmarasigan

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HILE the intention of Metro Pacific Investments Corp. to rehabilitate, modernize and expand the Metro Rail Transit Line 3 (MRT 3)—a privately owned but government-operated facility—is good, its multibillion-peso unsolicited proposal is viewed by the owners as illegal. Metro Rail Transit Holdings Inc. Chairman Robert John L. Sobrepeña said his group views the move by the government to welcome an unsolicited proposal for the redevelopment of the rail facility as something without legal basis, simply because the government does not own the infrastructure. “It’s illegal. There’s no such thing as original project proponent when private sector owns a facility. This is not a greenfield project,” he told the BusinessMirror over the phone. Metro Pacific submitted in 2017 an unsolicited proposal that involves the expansion of the capacity of the railway system by adding more coaches to each train, allowing it to carry more cars at faster intervals. It will double the capacity of the line to 700,000 passengers a day from the current 350,000

Unless they go to us, that’s the only way that proposal can be legal. We are open to meeting with them. They just have to talk to us.”—Sobrepeña passengers daily. The multimillion-dollar expansion is deemed as an all-encompassing deal, including the improvement of the reliability of rolling stock, the upgrading of power supply, the upgrading of stations and the replacement of rails, which will allow the company to operate the new trains purchased by the government from Chinese train manufacturer Dalian. Unsolicited proposals are required, under the law, to be subjected to a Swiss Challenge, wherein other groups can offer a similar proposal, and the original proponent can present a counter offer. The government awarded the original-proponent status to Metro Pacific last year. “I still don’t have a copy of the proposal. I have yet to receive an offer from them,” Sobrepeña said. He explained that the government can only allow another proponent to come in once it owns the railway line in the next seven years. Under its build-lease-transfer

PESO exchange rates n US 50.3810

contract with the government, Metro Rail Transit Corp. will own the facility that it built for 25 years, while allowing the state to rent the infrastructure for public use. After the concession period, the company is compelled to transfer the ownership to the government. “The government does not own it until 2025,” Sobrepeña said. He noted, however, that he is open to meeting with Metro Pacific officials to thresh out the details of the unsolicited proposal. There, Sobrepeña said, the two groups can arrive at a similar and mutually beneficial deal. “Unless they go to us, that’s the only way that proposal can be legal. We are open to meeting with them. They just have to talk to us,” he said. Metro Pacific has nominated Light Rail Manila Corp. as its corporate vehicle for the MRT 3 deal. The said company, a partnership between Metro Pacific and Ayala Corp., operates the Light Rail Transit (LRT) Line 1.

See “MRT 3,” A12

up 21% in 2017 By Lenie Lectura @llectura

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HE government’s share from the energy resource development fund, commonly known as the Malampaya Fund, reached P16.25 billion, 21 percent higher than the previous year’s collection. Data obtained by the B usiness M ir ror showed that the Department of Energy (DOE), which collects Malampaya royalties, recorded a collection of P16,250,694,944.30 in 2017. This brings the total royalties to P251,893,422,351.68 since 2002. The highest collection— P37,458,390,948.09—was recorded in 2009, records show. The DOE’s collection is turned over to the Bureau of the Treasury. Government officials, in an interview, said the DOE issues two receipts to Shell Philippines Exploration BV (Spex), operator of the Malampaya Deep Water Gas-to-Power Project. Normally, they explained, the amount is broken down to two items: net share of the national government and source of assistance to local government units (LGUs). However, in the DOE’s books, the Malamapaya collection is “taken as See “State’s share,” A12

NFA WANTS TO IMPORT RICE SOON AS STOCKPILE GOOD FOR ONLY 3 DAYS By Jasper Emmanuel Y. Arcalas

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AQUINO: “As watchdog of national food security, the NFA’s role is to make rice, our basic staple, available, accessible and affordable in any part of the country at all times.”

@jearcalas

he National Food Authority (NFA) is urging the interagency National Food Security Committee (NFSC) to recommend the importation of 250,000 metric tons (MT) of rice to beef up its stockpile. The NFA Council (NFAC), the highest policy-making body of the NFA, recently approved a standby authority to import 250,000 MT of rice. The NFA is just awaiting the volume that will be approved by the NFSC, which recommends the volume of rice that should be imported by the government for buffer stocking purposes. “Our [rice] inventory is low, that is why NFA management is urging the immediate replenishment of its buffer stock through importation,” NFA Spokesman Rebecca Olarte told the BusinessMirror on Thursday. Olarte said they are optimistic that the NFSC would recommend the government’s purchase of the entire 250,000 MT of imported rice to augment the rice stockpile of the NFA. Data obtained by the Business-

Mirror showed that the NFA’s current rice stockpile level is good for only three days, way below the 15-day buffer stock mandated by the Legislative-Executive Development Advisory Council at any given time. During the lean season, the NFA is supposed to keep a stockpile good for 30 days. The 250,000 MT approved by the NFA is good for eight days, at a national daily consumption rate of 31,000 MT. Olarte said the importation of 250,000 MT rice would allow the NFA to sell more affordable rice. “The NFA doesn’t need to compete with commercial traders. It is enough that the NFA is present and available in the market,” she said. “We do not need to have the same volume as the commercial traders have.” Olarte added the NFA would see

n japan 0.4525 n UK 68.0798 n HK 6.4410 n CHINA 7.7425 n singapore 37.7726 n australia 39.4886 n EU 60.2506 n SAUDI arabia 13.4342

See “NFA,” A2

Source: BSP (11 January 2018 )

BMReports BusinessMirror

A2 Friday, January 12, 2018

2017 banner year for PHL tourism Continued from A1

last May and the United Nations World Tourism Organization International Conference on Tourism Statistics last June. With the momentum the country gained from last year, Teo said the DOT is inclined to attract 8 million tourists this year. She said aside from the usual tourists from South Korea, the United States and China, the country is also beginning to pique the interest of the Russians—mainly

due to active relations between Moscow and Manila under President Duterte—and Canadians. The tourism chief also said she expects more tourist arrivals from China under Manila’s warmer ties with Beijing. China committed to send 1 million Chinese tourists to the country in response to the President’s efforts to establish stronger relations with the superpower. From January to August of last year, the country earned as much as $3.3 billion, or P166.3 billion,

Boracaynons. . . Continued from A12

PCCI Boracay has 55 members, composed mostly of the big resorts on the island, such as Shangri-La Resort and Spa, Discovery Shores, Asya Premiere and Friday’s, among others. During the news conference, lawyer Joy Bulauitan, assistant COO for the Tourism Infrastructure and Enterprise Zone Authority (Tieza), assured that Stages 2 and 3 of Phase 2 of the drainage project in Boracay can be carried out simultaneously, with the target completion date being the second quarter of 2019. “Immediately after, we will start Stage 4,” she told the BusinessM irror separately. Stage 1 of Phase 2 was already awarded in December 2017, she said, adding that completion of these four stages under Phase 2 “will already solve flooding on the island.” Tieza is the infrastructure arm of the Department of Tourism. She also clarified that, contrary to the Boracay stakeholders’ contention, Phase 1 of the drainage project had already been completed in 2014. Under a memorandum of agreement between Tieza and the Ayalaled Boracay Island Water Corp., along with the provincial government and Malay Mayor Ciceron Cawaling, Phase 1 is already being operated by the water firm. Phase 1 of the Tieza drainage project covered the

Teo said. At this pace, even without the revenues yet for September to December, she said tourism will continue to be the third-largest contributor to the country’s GDP. She also said tourists are now staying longer in the country, though they still spend $133, or around P6,700, a day, which is the average daily expenditure of a foreigner here. “They use to stay three to four days [in the country], now it is six to seven days, but they still spend the usual $133 to $134,” Teo added.

construction of the D’Mall pump station; the drainagecollection system; the access road and drainage line from Boracay Regency Road to Gallera de Boracay, the drainage canal going to emergency outfall along Red Coconut; replacement of all deteriorated steel gratings; and repair of all drainage outfall. Road 1A drainage outfall, Sewage Treatment Plant road-drainage outfall, Lagutan road-drainage outfall, Action Center drainage outfall and Bulabog road-drainage outfall. Meanwhile, Aguirre-Graf pointed out, in the more than six hours the two Cabinet secretaries spent on the island, they met the industry stakeholders for “just 15 minutes.” She said the Cabinet secretaries spent more time meeting with other government officials, such as those from the municipal and local governments, instead of actually finding out directly from stakeholders what the issues were. She added they suspect the meeting with stakeholders was done in preparation for a fourth Congressional inquiry into the island’s issues. “Our office received a call from Rep. Lucy Torres-Gomez’s office that there is a tentative schedule for an inquiry on January 24. So, of course, these Cabinet secretaries will finally be able to say that they came here and spoke with the stakeholders. But they won’t say that our meeting took just 15 minutes,” Aguirre-Graf said in jest. She noted that the Boracay stakeholders were already called to three congressional hearings, which the stakeholders attended even if held in Manila. “But

The country’s tourist arrivals last year was significantly higher than that of in 2016, when Manila experienced a slowdown in Chinese arrivals. This slowdown was mainly attributed to the arbitration ruling by The Hague that favored Manila’s claim over Beijing’s in the South China Sea. Due to the maritime dispute, the Chinese government discouraged its citizens from traveling to the country. This resulted in millions of pesos in lost revenues

these Cabinet secretaries never attended. They only sent their representatives,” she said. The last meeting was in September 2017. The country’s tourism chief, meanwhile, warned Boracay-based businessmen their accreditation might just be canceled by the national government should they continue to disregard sanitary standards, which leads to the pollution of the world-renowned beach. At the BusinessMirror Coffee Club Forum on Thursday, Teo said national and local agencies are now reviewing the sanitation of over 100 business establishments in Boracay. She said these businesses are up for assessment due to their reported lack of sanitation that contaminates the island. “The accreditation [of these businesses], that we can cancel. However, as to the business permits of these establishments, that is up to the local government of Boracay,” she said. Teo added she and Cimatu have already discussed the matter, much that the issue concerns the environment more than the tourism industry. Just like her, she said Cimatu also believes it is up to the local government to take measures against the violators because they have the police power. “We will monitor them because this is a big issue, and we will not tolerate any violation to sanitary standards. I and Secretary Cimatu will definitely watch this closely,” Teo said. With Elijah Felice E. Rosales

reported by hotels and resorts in Cebu, Bohol and Boracay, on top of the suspension of chartered flights between certain points in China and resort areas in the country through Philippine carriers. Arrivals from South Korea hit 1.48 million tourists in 2016, accounting for 24.75 percent of total visitor arrivals for that year. The US and China placed second and third as top markets, registering 869,463 and 675,663 tourist arrivals, respectively.

NFA. . .

Continued from A1

to it that unscrupulous traders and retailers would not be able to take advantage of the thin buffer stock of the food agency attached to the Office of the President. “The whole of 2017 until the prices of commercial rice have remained the same. The price movement is not alarming,” she said. NFA Administrator Jason L.Y. Aquino said the food agency will continue to sell rice at the government-prescribed prices of P27 per kilogram (kg) for the regular milled variety and P32 per kg for well-milled rice. Aquino made the statement following speculations that rice prices may be affected by the increase in fuel prices under the new tax-reform law. “As watchdog of national food security, the NFA’s role is to make rice, our basic staple, available, accessible and affordable in any part of the country at all times,” Aquino said. The NFA administrator also issued a warning to rice traders not to take advantage of the ongoing speculations by unduly increasing prices. “The NFA implements rice trading rules and regulations, therefore we can sanction any traders who will be violating our laws,” Aquino said.

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CTRP. . .

Continued from A12

In 2015 Timta data showed that incometax holidays accounted for P53.77 billion in foregone revenues, special rates at P32.48 billion and import-duty incentives P18.14 billion, for a total of P104.40 billion in tax incentives given away by the government. All these incentives would have accounted for almost 5 percent of national government revenues and 0.78 percent of GDP, according to Chua. “So in general, we are giving almost 0.8 percent of GDP so far on tax incentives from these income-tax holidays and custom duty exemptions. Together with the VAT, it is P301 billion, or 2 percent of GDP. These are only the investment incentives,” he added. The DOF is now preparing to introduce to Congress the Duterte administration’s Package 2 of the CTRP, which focuses on reducing corporate income tax (CIT) rates while rationalizing fiscal incentives, following the enactment of the Tax Reform for Acceleration and Inclusion Act. Under Package 2, the DOF aims to lower the CIT rate to 25 percent from the current 30 percent, while rationalizing incentives for companies to make these performance-based, targeted, time-bound and transparent. Through the second package, the government would be able to ensure that incentives granted to businesses generate jobs, stimulate the economy in the countryside and promote research and development; contain sunset provisions so that tax perks do not last forever; and are reported so the government can determine the magnitude of their costs and benefits to the economy. The DOF is targeting to submit this revenue-neutral proposal to the House of Representatives this month. Chua added that collections from income taxes from large corporations and other private firms represent only 3.7 percent of the country’s GDP, or a collection rate of a low 12 percent because of 360 laws that grant businesses tax breaks and other perks.

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Editor: Vittorio V. Vitug • Friday, January 12, 2018 A3

SC stops payment of P62.05 billion to dismissed Napocor workers

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By Joel R. San Juan

@jrsanjuan1573

HE Supreme Court (SC) has nullified a lower court’s order for immediate payment of P62.05 billion and notices of garnishments against the National Power Corp. (Napocor) and the Power Sector Assets and Liabilities Management Corp. (PSALM) to compensate more than 9,272 employees who were illegally dismissed during the stateowned power firm’s reorganization in 2003. While the High Court granted the petition of PSALM to “lift and quash” the order of the trial court, it affirmed its previous findings that PSALM is directly liable to compensate the illegally dismissed Napocor employees. The amount represents settlement claims of the members of Napocor’s Drivers and Mechanics Association (Dama), who were terminated in 2003. The Court also held that it is the Commission on Audit (COA), and not the trial court, that should determine the exact amount of PSALM’s liability in accordance with its audit rules and procedures. “The Napocor list and computation is by no means final and binding either on the Court or the COA, regardless of the petitioners’ acceptance and admission of the same,” the Court en banc said in a decision penned by Associate Justice Teresita Leonardo-de Castro. “It is still subject to the COA’s validation and audit procedures. To enforce the satisfaction of the judgment award, the amount of which has been provisionally computed in the Napocor’s list and computation, the petitioners must now go before the COA and file a separate money claim against the Napocor and PSALM,” the Court added. It would be entirely up to the COA, according to the SC, whether to approve or disallow the claim. The dismissed employees, however, may still file an appeal before the Court in case of unfavorable ruling. In effect, the Court denied Dama’s request to immediately execute the judgment award issued by the Regional Trial Court (RTC) of Quezon City in July 2014 and instead direct it to file a claim against the government before the COA. The trial court’s order was pursuant to the Court’s final decision dated October 27, 2008, which declared illegal the two resolutions issued by the Napocor Board (NPB) ordering the termination of the said employees. Declared illegal by the Court were the NPB Resolutions 2002-124 and 2002-125 that implemented the Napocor reorganization, because four of the department secretaries, who were members of the NPB, did not participate personally in the deliberation of the resolutions and sent their representatives, instead. The department secretaries, who were also

members of the NPB, could not delegate their duties as members of the board much less their power to vote and approve the board resolutions because it is their personal judgment that must be exercised in the fulfillment of such responsibility. The Court subsequently held that the illegally dismissed employees were entitled to reinstatement or payment of separation benefits. In the same ruling, the Court held that the chairman and members of the NPB and the president of Napocor Board and Napocor to prepare a verified list of the names of all Napocor employees terminated and/or separated as a result of NPB Resolutions 2002-124 and 2002-125, and the amounts due to each of them, including 12-percent legal interest. The Court also directed the Office of the Clerk of Court and ex-officio Sheriff of the RTC of Quezon City to: a) issue a writ of execution based on the list submitted by the Napocor; and b) undertake all necessary actions to execute the herein decision and resolution. The SC explained that, under the Electric Power Industry Reform Act, PSALM should assume all Napocor’s existing generation assets, liabilities, independent power producer contracts, real estate and other disposable assets. “It would be unfair and unjust if PSALM gets nearly all of Napocor’s assets but will not pay for liabilities incurred by Napocor during the privatization stage,” it said. “Further, there was a transfer of interest over these assets by operation of law. These properties may be used to satisfy the judgment,” it added. The SC noted that, after privatization, Napocor’s corporate funds are largely within PSALM’s control. In nullifying the P62.05-billion monetary award and the notices of garnishment, the Court agreed its execution would have a huge financial impact on Napocor and PSALM, which both play major parts in the country’s electric power industry. “Thus, a decision that may greatly affect the operations of these entities may, in tum, also affect the rendition of their services to the general public,” the Court said. The Napocor earlier claimed the hasty implementation of the trial court of the garnishment order would trigger not only possible bankruptcy of the agency but also of the national government as a whole.

Justice Carpio won’t testify in Sereno impeach hearing

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enior Associate Justice Antonio Carpio declined the invitation of the House Committee on Justice for him to attend the continuation of the impeachment proceedings against Chief Justice Maria Lourdes A. Sereno set for Monday. Carpio said he had no personal knowledge of the issues that the House Committee on Justice wanted to ask him regarding the impeachment complaint filed by lawyer Lorenzo Gadon against Sereno. “I regret to inform you that I have to decline to testify on the matter mentioned for the reason that I have no personal knowledge of these matters,” Carpio said in his two-page letter addressed to House Committee on Justice Chairman Rep. Reynaldo V. Umali of the Second District of Oriental Mindoro dated January 10, 2018. The House Justice Committee wanted Carpio to testify on the allegation that the Chief Justice falsified the temporary restraining order of the Supreme Court (SC) in the case of Senior Citizens Party-list v. the Commission on Elections, a matter which Carpio said he had no personal knowledge of.

Carpio also said he was on wellness leave on June 19, 2017, the day when the request of the Department of Justice to transfer the Maute cases from Mindanao to Manila was raffled off to a justice, noting that he was out of the country on such date until July 3, 2017. The High Court’s most senior magistrate also said he did not know anything about the allegation that Sereno lied and made it appear that several justices requested that they dispense with the voting for the recommendees to the SC. “I have no personal knowledge of this matter. I wish to state that, for years now, my position has been that the Court do away with the voting since the Judicial and Bar Council is an independent constitutional body and, in any event, it has not been following the recommendations of the Court for several years in the past,” Carpio said.

Economy

A4 Friday, January 12, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon

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Party-list legislators to SC: Freeze implementation of tax-reform law

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By Joel R. San Juan

@jrsanjuan1573

PETITION was filed on Thursday by three lawmakers before the Supreme Court (SC) seeking to stop the implementation of the controversial Tax Reform for Acceleration and Inclusion Act (TRAIN), or Republic Act (RA) 10963, for being unconstitutional.

In a 34-page petition filed through the National Union of People’s Lawyers, petitioners Reps. Antonio Tinio of ACT Teachers, Carlos Zarate of Bayan Muna and Ariel Casilao of Anakpawis argued that the TRAIN should be strike down for having been ratified by the by the House of Representatives and enacted by the President in violation of the House Rules and the 1987 Constitution. The petitioners also pleaded for the issuance of a temporary restraining order to immediately enjoin TRAIN’s implementation. Named respondents were President Duterte, Speaker Pantaleon D. Alvarez, Deputy Speaker Raneo E. Abu, Majority Floor Leader Rodolfo C. Fariñas Sr., and Deputy Majority Leader Arthur R. Defensor Jr. The petitioners charged that the respondents committed grave abuse of discretion when they ratified the final bicameral conference committee report on the night of December 13, 2017, despite lack of quorum necessary to vote for its passage. The petitioners noted that Section 16 (2), Article 6 of the 1987 Constitution and Section 75 of Rule XI of the House Rules mandate the House to comply with the quorum

requirement of majority of the House membership before they can do any legislative business. The petitioners, however, claimed that around 280 out of the total 295 members of the House were absent during the ratification stage. “There having been no quorum during the last three minutes of its December 13, 2017, session, the House of Representatives cannot legitimately and validly conduct any business, much less validly ratify the TRAIN [bicameral] report. Respondent House leaders therefore committed grave abuse of discretion when they disregarded the Constitution and the implementing House Rules with regard to the basic and prejudicial requisite of quorum,” the petition read. Aside from lack of quorum, the petitioners added the second equally important requirement, which is the majority vote, was also not met. They said the requirements of quorum and approval of bills are constitutional mandates. Likewise, the petitioners insisted that there was also grave abuse of discretion on the part of the President when he enacted the TRAIN bill, which, the petitioners said, was not

validly passed by Congress. “The lack of a valid ratification, especially of a revenue measure by the House of Representatives, which is its sole originator, could by no means result to a valid ‘bill passed by Congress.’ Such a document could have no force and effect of a bill that could be presented to and signed by the President,” the petition read. “There having been no valid ratification of the TRAIN [bicam] report, there was consequently no valid presentment to the President of a bill for his enactment. No matter how many times he signs the [bicam] report, he could not, in the eyes of the Constitution, enact such an invalidly ratified documents into law. Respondent President therefore committed grave abuse of discretion when he signed RA 10963,” the petitioners argued. The petitioners also disputed the government’s claim that the taxreform law, which slashes personal income-tax rates while raising additional revenues for infrastructure and social services, would be beneficial to the public. They said the new excise taxes on petroleum products and sugarsweetened beverages, and its broader value added tax will hit poor and lowincome earners.

“These sectors of our society will have zero and minimal benefits from the lowering of income taxes, because they are already exempt to begin with [in the case of minimumwage earners and those in informal work of earning low or erratic incomes] or whatever additional takehome pay they will have will not be enough for the higher cost of living. However, they will be the ones who will bear the heaviest burden,” the petition stated. “They will not be able to afford the higher prices that these new taxes will cause, or will be able to only minimally offset these higher prices with what little additional finances they will get from the lowered PIT [personal income tax],” it added. The petitioners admitted that its petition is anchored on the procedural infirmities of TRAIN although they are mulling over the filing of another petition on the merits of the law. “While we file this petition today questioning the procedural infirmities of the TRAIN, we will continue to seriously study the filing of another petition against the regressive and burdensome new tax impositions of the TRAIN,” the petitioners said.

The lack of a valid ratification, especially of a revenue measure by the House of Representatives, which is its sole originator, could by no means result to a valid ‘bill passed by Congress.’ Such a document could have no force and effect of a bill that could be presented to and signed by the President.”—petition

DENR forms team to probe companies awarded with vast logging concessions By Jonathan L. Mayuga @jonlmayuga

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ecretary Roy A. Cimatu of the Department of Environment and Natural Resources (DENR) has created a 12-man team to investigate the operations of agricultural companies awarded with logging concessions in the country. There are a total of 104 companies with logging concessions in the form of Integrated Forest Management Agreements (Ifmas). The order, issued by the DENR chief in a news statement issued late Wednesday afternoon, aims to prevent similar incidents in Zamboanga Peninsula that resulted in the death of more than two dozen people at the height of Typhoon Vinta last month. Cimatu said he wants to make sure that Ifma holders are compliant with the terms and conditions of their contracts with the DENR, including the Dacon Group of Cos. whose subsidiaries—the South Davao Development Corp. Inc. (Sodaco) and the Sirawai Plywood & Lumber Corp. (SLPC) in Sibuco town, Zamboanga del Sur—were slapped with suspension orders. The two companies are Ifma holders with a combined land area of 72,000 hectares. While companies with logging concessions establish forest or tree plantations, the trees are later on harvested. The massive harvesting of trees in these plantations often leaves nearby communities unprotected from natural calamities. To recall, no less than President Duterte ordered Cimatu to stop Sodaco and SLPC’s operations after viewing a five-minute video footage that showed the massive degradation of the forest in the areas where the two companies operate. While several companies have stopped their operation, Cimatu said there were reports of illegal poaching in Ifma sites. “We will make them [the Ifma holders] accountable if we find that there were violations in what is sup-

posed to be their obligation to help manage the forest, and not to be the culprit behind such environmental degradation,” Cimatu added. Of the 104 Ifmas across the country, the DENR said 40 are in Luzon, 13 are in the Visayas and 51 are in Mindanao. It was also gathered that 10 Ifmas were issued in Region 9, where the flash floods occurred. The DENR chief gave the 12-member DENR team that will conduct the audit until Friday, January 12, to complete its investigation of the Dacon areas. According to initial reports from the Community Environment and Natural Resources Office (Cenro) in Zamboanga del Norte, the video of the deforested portion showed the area where site preparation for transplanting of new tree seedlings of Sodaco is ongoing. As early as 2016, the Philippine Wood Producers Association (PWPA) has been calling for a performance audit of companies that were granted logging concessions, such as Ifmas and Socialized Industrial Forest Management Agreements and the privilege of forest management under the Community-based Forest Management Program by the DENR. In an exclusive report of the BusinessMirror in July 2016, PWPA Executive Director Maila R. Vasquez made an appeal to then newly appointed DENR Secretary Regina Paz L. Lopez to review the production outputs of various DENR partners with Ifmas and other forest management or lease agreements. The PWPA supports the DENR’s programs and policy direction that will boost the country’s wood industry, particularly to increase local wood production. It is also batting for forest certification to encourage sustainable wood production. The group is also pushing for the enactment of two proposed laws that would help improve the local wood industry—the National Land Use Act and the Sustainable Forest Management Act.

Australia backs liberalized PHL retail-trade enterprise

DOTr taps indie consultant to assess Dalian trains for MRT 3

By Elijah Felice E. Rosales

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he Department of Transportation (DOTr) has procured the services of an independent audit and assessment (IAA) consultant that will evaluate and make recommendations on the feasibility of using the 48 light rail vehicles (LRVs) that were delivered by Chinese railway firm CCRC Dalian and other components of the Metro Rail Transit Line 3 (MRT 3).

 The MRT management has already met with the winning IAA consultant international certification firm TUV Rheinland on January 3. 

“Na-deliver na po ’yung mga bagon [The train coaches were already delivered] but we are unable to accept them unless our IAA consultant has certified their safety and compatibility with our system,” DOTr Officer in Charge Undersecretary for Railways Timothy John Batan said at a news briefing on Wednesday.

 The DOTr assured that it would not interfere or influence the assessment of the IAA on the 48 LRVs.

 “We will not in any way try to influence their independent assessment of the 48 cars from Dalian, at tayo po ay magdedesisyon base po sa kanilang recommendation. Kung sasabihin po nila na puwede po iyang patakbuhin ng kaagad-agaran, we will consider. Kung sasabihin po nila ay patatakbuhin ’yan na may kinakailangang adjustments, we will consider, of course not at our expense. At kung sasabihin po nila na kailangang ibalik ’yan, ibabalik po natin ’yan [We will not in any

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Iron men Workers assemble the steel frame of a massive building foundation at a construction site along Marcos Highway in Masinag, Antipolo City. NONOY LACZA

way try to influence their independent assessment of the 48 cars from Dalian, and we will be deciding based on their recommendation. If they advised that these should be deployed as soon as possible, we would consider. If they will advise that the coaches may be used by the system but with the necessary adjustments, we will consider, of course not at our expense. If they tell us that these should be returned, we would do so],” Batan said.

 The DOTr official, likewise, said added the MRT 3 management would be conducting general maintenance works during the Holy Week break, as they expected the delivery of new spare parts vital to increasing the number of trains in the railway system.

 Spare parts for the maintenance of the MRT

3 will start arriving in tranches from February to June, with the MRT 3 having started to procure them in November 2017.

 At the same time, fare increases will not be implemented while there are no substantial improvements in the MRT operations.

 Concerns have been raised with the 48 LRVs procured by the previous administration for P3.8 billion after they exceeded the weight prescribed in the terms of reference (49,700 kilograms vs 46,300 kg).

 Defects on the traction motor and signaling system, as well as door failure are the major causes of unloading incidents in the MRT 3.

 The DOTr vowed that it would implement upgrades on the electrical system and track configurations of the railway system by the second quarter of 2018. PNA

@alyasjah

F there is one wish Australia has for President Duterte this year, it is that he liberalizes retail-trade enterprises to allow foreign investors to enter the restricted industry. According to Australia’s Senior Trade Commissioner for Manila Elodie Journet, Canberra is looking forward to the further liberalization of certain investment areas in the country. Manila is keen on relaxing, if not eliminating, restrictions on foreign participation in a number of investment areas to raise the country’s competitiveness level and accelerate Southeast Asia’s economic growth. “It is very positive [development],” Journet said in an interview with the BusinessMirror. “When you are an investor, you look at many countries. You don’t just focus on one country, so then you start to compare the conditions for investment in each country.” Journet said there are more than 200 Australian firms that are present in the Philippine market. This number, she argued, will greatly increase if Manila pushes through with its plan to relax restrictions on foreign ownership. Sought what industry Australia wishes the country liberalizes, she pointed to retailtrade enterprises. “We are hoping retail. We are hoping that retail in terms of the paid-up capital requirements for foreign institutes that we can actually have [ownership],” the Australian trade official said. Under Executive Order (EO) 184, Series of 2015, or the 10th Regular Foreign Investment Negative List (RFINL), foreign investors are not allowed to own retail-trade enterprises with paid-up capital of less than $2.5 million. Full foreign ownership, as stipulated in Section 5 of Republic Act 8762, or the Retail Trade Liberalization Act of 2000, is only permitted for retail-trade enterprises with paid-up capital of more than $2.5 million provided the cost of establishing a store is more than $830,000; and enterprises spe-

cializing in high-end or luxury products with a paid-up capital of more than $250,000. This is why Australian firms got “excited” when they heard the President is planning to further liberalize the retail industry, Journet said. She added this will beef up Australia’s investment in the Philippines, which was valued at A$9.3 billion in 2016. Australia was one of the top prospective investing countries in the third quarter of last year. It committed P2.8 billion to the country in that quarter, just behind Japan and Taiwan, which pledged P21.4 billion and P8.9 billion, respectively. As a whole, Journet said Australia is impressed with the Duterte administration’s efforts to attract more foreign investors in the country. She added this is crucial in sustaining the country’s fast-growing economy and maintaining healthy relations with trading partners. Duterte’s economic team is in the process of crafting a new RFINL that will liberalize eight investment areas identified by the Chief Executive. The President last November directed the National Economic and Development Authority (Neda) Board and its member-agencies to “take immediate steps to lift or ease existing restrictions on foreign participation” in certain industries. Aside from retail-trade enterprises, Duterte wants to relax restrictions on private recruitment in both local and overseas employment; practice of particular professions, where the entry of foreign players will benefit the public; contracts for the construction and repair of locally funded public works; and public services, except activities and systems that are recognized as public utilities. The President also intends to ease restrictions on culture, production, milling, processing and trading, except retailing, of rice and corn; teaching at higher education levels; and domestic market enterprises.

Agriculture/Commodities BusinessMirror

www.businessmirror.com.ph

Editor: Jennifer A. Ng • Friday, January 12, 2018

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Farms to boost tourist arrivals–DOT By Jasper Emmanuel Y. Arcalas

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@jearcalas

side from the country’s pristine beaches, farms, where high-value crops (HVCs) are grown, are also expected to draw tourists to the Philippines this year, an official of the Department of Tourism (DOT) said on Thursday. Tourism Assistant Secretary Eden Josephine L. David also told the BusinessMirror during its Coffee Club Forum on January 11 that the DOT is expanding the number of accredited farm-tourism sites this year. “Our goal is for farm tourism to contribute 10 percent to the increase in tourist arrivals. If the target is 8 million [tourist arrivals] this year, then at least 10 percent of that increase [should] come from the farm-tourism sector,” David said. She added the DOT considers farm tourism as a “sunrise” industry which can help cut rural poverty. “One of the major things that [Tourism Secretary Wanda Corazon T. Teo] wants to put emphasis on is helping the marginalized sector, to uplift the lives of the people in the countryside,” David said. “One thing we acknowledge is that Philippines, which is largely agricultural, has a potential for

farm tourism. There will be changes in the quality of life of farmers if they are given the opportunity to diversify their income base through farm tourism,” she added. Currently, the DOT official said there are 26 accredited farmtourism sites in the country, many of which are in Calabarzon. David added that they are targeting to increase the number of accredited farm-tourism sites by 10 percent this year. “At present we have sites that showcase farming and organic, some are producing vegetables. There are also farms which have fruit trees, like the cacao farm of Malagos,” she said. David added the DOT is keen on expanding farm-tourism sites in provinces that produce HVCs— bananas, pineapples, cacao— such as Soccsksargen, Davao and Bukidnon. “We’re looking at these areas not just because of HVCs but also be-

cause connectivity and gateways are available,” David said. “We cannot just offer farm tourist sites; it must be completed with other adventure activities available in the area.” David added there are about 900 potential farm-tourism sites in the country, as indicated by a list from the Department of Agriculture (DA). For this year, David said, the DOT is promoting farm-tourism visits, particularly among millennials. “For now, our specific target is the domestic market.” “We have to move them not only to Luzon-based farm sites but also around the country. People are willing to go to areas that are interesting and different—things that are being sought by millennials,” she added. The DOT is encouraging accredited and interested farm-tourism site owners to develop the “entertainment” potential of their areas, according to David. “Definitely, we are looking at the engagement they could offer to all the members of the family. There can also be more physical activities in the farm, aside from planting, harvesting and sampling crops,” she added. David said the government currently extends various forms of assistance to farm owners. “If a farm is accredited, the DOT will promote it. [Farm owners] will also get free training from the government and free advertisement. We ask our tour operators to include farm-tourism sites in their tour packages.”

In photo: Ephrathah Farm Resort in Badiangan (File photo)

She said the DOT is also keen on giving fiscal incentives to owners of farm-tourism sites. David, however, could not yet say the tax perks that the government can grant to farm-tourism site owners as the Farm Tourism Development Board (FTDB) has yet to deliberate on the matter. David also said the DOT is planning to convene the FTDB within the month to finalize the Farm Tourism Roadmap. She said the road map would serve as the DOT’s blueprint for developing farm-tourism sites. “We are looking to finish the road map within the first quarter of the year,” she said.

The FTDB is comprised of the DOT chief, who sits as its chairman, while the agriculture secretary serves as its vice chairman. The trade secretary is also a member of the FTDB. The creation of the FTDB is mandated by Republic Act (RA) 10816, or the “Farm Tourism Development Act of 2016,” which seeks to develop and promote the country’s farm-tourism sector. RA 10816 was signed into law by President Aquino in May 2016. Under R A 10186, the DOT, the DA and the Philippine Information Agency shall launch and pursue a nationwide campaign to promote farm-tourism and accred-

ited farm-tourism camps, and promote the principle of sustainable development. “For this purpose, the DOT and the DA shall encourage the establishment of at least one farm-tourism camp in every province in the country,” RA 10186 read. R A 10186 also provides that the Department of Public Works and Highways, the Department of Transportation, the DA and other infrastructure agencies shall include in their annual development plans and priority investment programs, infrastructure projects and transportation programs to expand access to farm-tourism camps.

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Friday, January 12, 2018

The World BusinessMirror

Editor: Lyn Ressureccion | www.businessmirror.com.ph

Judge: Daca protections must continue for now

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ASHINGTON—In the middle of the intense political fight about the program that shields from deportation young immigrants who were brought illegally to the United States as children, a federal judge in California late on Tuesday issued a nationwide injunction ordering the administration to start the program back up again, saying the decision to kill it was improper. President Barack Obama created the Deferred Action for Childhood Arrivals (Daca) program in 2012 to also give them the ability to work legally in the US. President Donald J. Trump ended the program last September, saying that Obama’s actions were unconstitutional and an overreach of executive power. That decision has set off an intense political debate in Washington as Democrats and Republicans spar about how to provide relief for about 800,000 immigrants who could face deportation when the program ends on March 5. Trump met with lawmakers on Tuesday afternoon in a remarkable, hourlong televised meeting to begin negotiations. But critics of the president’s decision to end the program, inc lud ing severa l st ates a nd organizations, had already sued the administration, saying that shutting down the Obama-era program was arbitrary and done without following the proper legal procedures. One of the lead plaintiffs in the case, Janet Napolitano, is the president of the University of California system of colleges but was the secretary of homeland security for Obama in 2012 and was an architect of the Daca program.

Judge Wil liam A lsup of US District Court in San Francisco agreed w ith the cr itics, w r iting in his r u ling on Tuesday that the administration must “maintain the Daca program on a nationw ide basis” as the legal challenge to the president’s decision goes for ward. The judge questioned in his ruling the administration’s contention that the Daca program had not been put into place legally. A lsup asserted that the secretar y of the Depar tment of Homel a nd Sec u r it y has long had the authority to grant the kind of temporar y protections that formed the basis of the Daca program. The judge wrote that previous recipients of the Daca protections must be allowed to renew their status in the prog ram, though the government will not be required to accept new applications for the program from immigrants who had not previously submitted an application. The judge also said the administration could continue to prevent Daca recipients from returning to the United States if they leave the country. It is not clear what the legal effect could be from the judge’s ruling, but the Trump administration

Facebook, Apple, GM leaders urge Congress to protect ‘Dreamers’

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hief executives of more than 100 companies—including Facebook Inc., Apple Inc. and General Motors Co.—are urging Congress to pass by next week legislation to protect “Dreamers,” undocumented immigrants brought to the United States as children. “Failure to act in time will lead to businesses losing valuable talent, cause disruptions in the work force, and will result in significant costs,” the letter sent to Senate and House leaders of both parties said. Economists estimate that a failure to act could cost the economy $215 billion in GDP, the executives’ letter added. Those signing the letter included Apple CEO Tim Cook, Facebook founder Mark Zuckerberg and General Motors CEO Mary Barra. The letter, organized by the C o a l it ion for t he A me r ic a n Dream, was set to run as a fullpage advertisement in the Wall Street Journal and The New York Times on Thursday. The request from corporate leaders comes as lawmakers are negotiating a legislative replacement for the Obama-era Deferred A c t ion for C h i ld hood A r r ivals (Daca) program that spared Dreamers from deportation. President Donald J. Trump announced last September that the program will end on March 5, though he has said he would

sign legislation to replace it if the measure also includes funds for a border wall, restrictions on family preferences in immigration and an end to a diversity visa lottery. The executives said it’s “critical” that Congress pass Daca legislation before January 19 because former leaders of the Department of Homeland Security have said the agency will need time to process applications before the current program expires. “ W hile delay or inaction w ill cause sig nif ica nt negat ive impact to businesses, hu nd red s of thousands of deser v ing you ng people across t he cou ntr y are counting on you to work in a bipartisan way to pass perma nent leg isl at ive protect ion for d rea mers w it hout f u r t her del ay,” t he let ter sa id. Bloomberg News

100+ The number of companies whose chief executives are urging Congress to pass a legislation to protect “Dreamers”

Cristina Jimenez speaks to demonstrators, urging the Democrats to protect the Deferred Action for Childhood Arrivals program, during a rally outside the office of Sen. Dianne Feinstein of California Democratic in Los Angeles on January 3. AP/Reed Saxon

may be headed for more intense legal wrangling like the kind that happened after the president’s travel bans. T he ad m i n i st r at ion cou ld quickly appeal the judge’s ruling, hoping that an appeals court would prevent the injunction from taking effect and allowing the shutdown of the Daca program as the president announced last September. But such a ruling could itself be appealed all the way up to the Supreme Court, potentially tying the fate of the Daca program in court action for days, weeks or longer.

Either way, the ruling could have serious political effect. If the court’s order to restart the Daca program stands, that could take pressure off Republicans and Democrats to find a political solution for the young immigrants who could be deported if the program ends. Almost immediately after the president rescinded the Daca program last September, Trump expressed sympathy for the immigrants who were very young when their parents brought them to the country illegally. Trump repeated his sympathies on Tuesday at the White House meeting.

Democrats have seized on the president’s attitude, urging their Republican colleagues to support legislation that would permanently legalize the Dreamers to work in the United States, and give them an eventual path to earn American citizenship. But hard-line conser vat i v e s s ay t h at w ou l d a mou nt t o a n a m ne s t y pro g r a m for lawbrea kers, and some Repu bl ic a n s i n C on g re s s h av e b e e n pu sh i ng for ot he r i m m ig r at ion c h a n ge s b e fore t he y w i l l s up p or t l e g i s l at ion for t he D re a me r s . In particular, Republicans at

the White House meeting demanded an end to rules that allow immigrants to sponsor their extended family members—aunts, uncles, cousins—to enter the US. And they want an end to a State Department visa lottery program that prioritizes legal immigration from certain countries in Africa and elsewhere. Democrats have warned that demands for those measures could undermine Democratic support for legislation on the Dreamers, potentially threatening a budget deal necessary to keep the government open past this month. New York Times News Service

Immigration agents raid 98 7-Eleven stores in 17 states

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edera l i m m i g r a t i o n agents descended on dozens of 7-Eleven conven ience stores ac ross t he countr y before daybreak on Wednesday, arresting unauthorized workers and demanding paperwork from managers in what the Trump administration described as its largest enforcement operation against employers so far. The sweeps of 98 stores in 17 states, from California to Florida, resulted in 21 arrests, according to US Immigration and Customs Enforcement (ICE), which signaled intensified efforts against businesses that hire unauthorized workers. “ To d ay ’s ac t ion s s e nd a strong message to US businesses that hire and employ an illegal work force: ICE will enforce the law, and if you are found to be breaking the law, you will be held accountable,” Thomas D. Homan, the acting director of the agency, said in a statement. Homan, the nation’s top immigration-enforcement off ic i a l , h a s prom i s e d more scrutiny of businesses that knowingly violate federal laws requiring employers to verify the identity and employment eligibility of their workers. Under President Donald J. Trump, ICE has significantly expanded immigration enforcement, arresting unauthorized immigrants in their homes or when they check in with federal agents as part of immigration court cases.

In a statement, 7-Eleven Inc., based in Irving, Texas, distanced itself from the situation, saying the individual stores are franchises that belong to independent business owners, who “are solely responsible for their employees, including deciding who to hire and verifying their eligibility to work in the United States.” “ 7- E le ve n t a k e s compl i a nce w it h i m m ig rat ion l aw s ser iou sly a nd h a s ter m i n at ed t he f ra nc h ise ag reements of f ra nc h i sees conv ic ted of v iol at i n g t he s e l aw s ,” t he compa ny s a id . If ICE hoped to make a bold st atement , it cou ld h a rd ly pick a more iconic target than 7-Eleven, a chain known for ubiquitous stores that are open all the time and sell the muchloved Slurpees and Big Gulps. Many 7-Eleven franchise has been a steppingstone for new, legal immigrants who want to own and run their own small businesses. Not all franchisees have been scrupulous about whom they hire. ICE called its Wednesday sweep a “follow-up” of a 2013 investigation that resulted in the arrests of nine 7-Eleven franchise owners and managers on Long Island, New York, and in Virginia on charges of employing unauthorized workers. Several have pleaded guilty and forfeited their franchises, and have been ordered to pay millions of dollars in back wages owed to the workers. “This definitely sends a mes-

sage to employers,” said Ira Mehlman, the spokesman for the Federation for American Immigration Reform, which favors more limits on immigration and stricter enforcement. According to ICE, federal agents served inspection notices to 7-Eleven franchises in California, Colorado, Delaware, Florida, Illinois, Indiana, Maryland, Michigan, Missouri, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Texas, Washington state and Washington, D.C. Employees at two 7-Eleven stores on Staten Island, New York, said immigration agents v isited on Wed nesd ay. But after the agents were shown valid employment records with Social Security numbers, two workers at each of the stores said, no one was arrested. In all, 16 of the 98 stores v isited on Wednesday were in the New York City area, according to an ICE spokesman, Rachael Yong Yow, who would not specify their locations. In Miami Beach an employee at one 7-Eleven said that while no agents showed up at her store, her boss asked workers to make sure their employment records were up-to-date, in case ICE continued its visits. A gents d ropped in on 7-Eleven stores in seven cities in southeast Florida, including Miami Beach, according to Nestor Yglesias, an ICE spokesman. He also declined to identify the specific stores. Under President George W.

Bush, ICE grabbed headlines by rou nd i ng up u n aut hor ized workers at meatpacking plants, fruit suppliers, carwashes and residences. In a shift, the agency under President Barack Obama focused on catching border crossers, deporting convicted criminals and pursuing employers on paper, by inspecting the I-9 forms employers are required to fill out and keep to verify their workers’ eligibility. By targeting 7-Eleven franchisees and their workers on Wednesday, ICE under Trump appeared to be melding the approaches of his two predecessors: Go after employers while also detaining employees whom agents encountered without work authorization. One of the biggest workplace immigration raids, in May 2008, resulted in the detention of nearly 400 unauthorized immigrants, including several children, at an Iowa meatpacking plant. Sholom Rubash k in, t he chief executive of the Agriprocessors plant, which was then the largest kosher meatpacking operation in the country, was eventually convicted of bank fraud in federal court. Tr ump commuted Rubashkin’s 27-year prison sentence last month, after years of lobby ing by a number of prominent law yers and politicians who considered his ter m unduly harsh, and perhaps even anti-Semitic. New York Times News Service

www.businessmirror.com.ph

BusinessMirror

Friday, January 12, 2018 A7

Banking&Finance BusinessMirror

A8 Friday, January 12, 2018 • Editor: Jun B. Vallecera

www.businessmirror.com.ph

‘Bank loan book, profits and asset quality still tops’ Morgan Stanley counters Bill Gross over bond bear market call

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organ Stanley countered Bill Gross’s call that Treasuries are in a bear market. “Don’t worry, Treasuries continue to offer value,” Morgan Stanley strategists Matthew Hornbach and Guneet Dhingra in New York wrote in a note on Thursday. “This isn’t the bear market you’re looking for,” according to the firm, one of the 23 primary dealers that underwrite United States debt securities. A jump in yields prompted Gross, at Janus Henderson Group, to declare a bear market in a tweet on Tuesday, raising concern among followers of the veteran bond investor that Treasuries are headed for a tumble in 2018. The billionaire based in Newport Beach, California, qualified that “the bear market that I’m talking about is a mild one,” in a Bloomberg interview on Wednesday. The latest move up in 10-year Treasury yields have been driven by concerns about China’s purchases of US securities and the potential for the Federal Reserve (the Fed) to adopt a price-level—rather than inflation rate—targeting approach in setting policy, according to Morgan Stanley. Any such switch by the Fed could see it fail to react

aggressively, at least for a time, to a jump in the inflation rate past its 2-percent target. Neither of those factors were likely to sustain the recent move, Hornbach and Dhingra wrote. Chinese officials have recommended slowing or halting purchases of Treasuries, Bloomberg News reported on Wednesday. But investors shouldn’t expect the country to stop buying or start selling, the Morgan Stanley report said. Other sovereign markets with comparable liquidity don’t offer comparable yields, it pointed out. China’s State Administration of Foreign Exchange said yesterday’s story might have quoted a “wrong source,” or be “fake news.” As for a switch in the Fed’s targeting approach—something aired at a conference this week at the Brookings Institution in Washington—“these views have been in the public domain for some time,” Morgan Stanley said. “It takes many months if not years for theoretical concepts to find their way into actual monetary-policy statements.” “You can go about your business.... Move along,” Hornbach and Dhingra wrote. Bloomberg News

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By Bianca Cuaresma

he lending business in the Philippines should remain in the pink of health this year, but the Bangko Sentral ng Pilipinas (BSP) should not rest on its laurels, as pockets of instability could begin to present themselves. Recent readings by BMI Research validate the continued positive performance of Philippine banks for 2018 given the robust macroeconomic backdrop. “Philippine banks will likely continue to benefit from the robust macroeconomic backdrop, which should be broadly supportive of loan growth, profitability and asset quality,” BMI Research said in a note on the Philippines. Its analysts said loan growth should average 14 percent over the next two years given the large appetite for loans as the government pursues a very ambitious multiyear public infrastructure buildup and as prospects of continued growth averaging more than 6 percent in terms of the GDP. BMI also particularly cited the asset

UCPB-CIIF Finance funded livelihood projects of 10,500 farmers in 2017

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CPB-CIIF Finance and Development Corp., the social development arm of the UCPB Group and CIIF Group, continued to pursue its mandate of delivering much-needed credit to the countryside in 2017, releasing P602 million in new loans to 10,499 farmers in 30 coconut provinces during the year. The loans financed the livelihood projects the farmers undertook last year to generate extra earnings to augment their

income from their farms. T he funded projects were mainly short-gestation ones that provided quick returns, such as cash crop cultivation, livestock raising, commodities trading and village-based processing of coconut by-products like coconut sugar. UCPB - CIIF Finance President Edgardo Amistad said the high 94-percent collection rate would indicate most of the farmers earned enough from their

Case clippings

By Justice S J Ranada Jr.

BOUNCING CHECKS–discretion to choose witness The fact that the lone prosecution witness in a bouncing check case was not authorized by the private complainant to testify is no reason to set aside the judgment of conviction. In criminal cases the offended party is the State; the complainant is regarded merely as a witness for the State; the discretion on who to present as witness is with the public prosecutor, and no authority is needed from the complainant. Montelibano v. Yap 06 Dec. 2017

GR 197425 Martires, J

My thoughts on investing

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s we start 2018, I would like to share with you some of my thoughts on investing and the var ious investment considerations that you need to take into consideration. These are scale, type, risk, retur n, tenor and cost. Even before you are able to consider investment options, we must f irst consider the scale of the investment. Obviously, the investment options available for P100 million are much more l i m ite d t h a n s ay i nve st i n g P100 million pesos. Once you have determined the scale of your investible funds, you can now consider the type of investment you can put your money in. Should you just keep your money in the bank? The investment types would vary between physical assets, such as gold, jewe l r y, rea l- est ate proper t ies or even art pieces or investment instruments, such as government securities, cor porate bonds, equities or other financial instruments. Many older folk, not fully understanding the financial world, end up investing more in physical assets rather than things like cryptocurrencies. Certainly these ty pe of physical investments have been able to provide mind-boggling returns, as well. With any investment there is a direct correlation to risk and return— the higher the risk the higher the ex-

FINEX free enterprise George S. Chua pected return. You can think of buying a lottery ticket where the risk of losing is very high, but the potential rate of return would be astronomical that people are willing to take the risk in exchange for a potentially very high return. This is the same case with the returns provided on government securities, which are a sovereign risk, that would typically yield lower rates of return than corporate bonds. This is to be expected since the risk of a government default is lower than that of a corporation operating within the country. The tenor or investment horizon of any investment should also be taken into consideration by the investor and would depend on his particular needs. For example, you would not want to invest the tuition money for your kids in a real-estate property. Liquidity, or the ability to sell your investment and get cash immediately is a key

@BcuaresmaBM

livelihood projects last year to be able to repay their loans. Amistad said UCPB organized UCPBCIIF Finance in 1994 to give coconut farmers access to credit so they can engage in alternative livelihood activities to supplement their farm income. Coconut farmers have among the lowest income in the agriculture sector with their small farms, ranging in size from 1 hectare to 5 hectares, yielding average earnings from P15,000 to P40,000 per hectare per year only. Owing to their small size, remote location and the higher risks of microenterprises, coconut farmers have difficulty accessing credit from formal sources for their livelihood activities. Since it started lending in 1995, UCPBCIIF Finance has pumped in P9 billion in loans to 62 coconut provinces benefitting 436,067 farm households there. A sister-company, the UCPB-CIIF Foundation, is also implementing a scholarship program that has sent 2,857 children of coconut farmers to college and trade schools. More than half or 1,852 of the UCPBCIIF scholars have already graduated, and seven in every 10 are already earning enough to be able to provide regular financial support for their families’ household expenses and their siblings’ education.

factor here. There are a number of instruments that have a fairly high degree of liquidity but suffer a sizeable penalty when sold before maturity. Typically, you match your investments with when you think you will need the money back. You may wish to invest in long-term instruments as your retirement nest egg while keeping some fairly short-term investments that are easily converted into cash for emergencies. Many people fail to consider the friction cost of making the investment and keeping it. Real-estate properties are an example of having both a high transaction cost and maintenance cost. In property transactions, there is the capital gains tax, documentary stamp tax, brokers fees and a number of other miscellaneous fees. Once you have acquired the property, you will need to pay recurring annual expenses, such as real-estate taxes, associations dues, insurance and so on. This can be a serious drain on the investor particularly if the property is not earning rent and there are many instances that the government has forfeited properties from owners who were unable to pay their real-estate taxes. Finally, I would like to remind you of the old adage of not putting all your eg gs in one basket. (Comments may be sent to georgechuaph@yahoo.com.)

quality of the banking sector, saying this has considerably improved the past many years based on rather low incidence of soured or nonperforming loans (NPLs). The industry’s NPL ratio fell to only 1.9 percent in November last year, from over 3 percent in 2013. “However, we believe that this is likely as good as it gets as higher interest rates weigh on household income, corporate profitability and possibly, asset prices. Meanwhile, sustained periods of high credit growth generally precede a future asset-quality deterioration, as the quality of lending is often lax when sentiment is upbeat,” BMI said. “Our core view is for the gross NPLs ratio to stabilize at around 2 percent over the

coming quarters,” it quickly added. Banks were also said to be “well-capitalized,” with the industry-wide capital adequacy ratio standing at 15.5 percent as of end-June 2017. This was significantly higher than the regulatory threshold of 10 only percent. The think tank also said downside risks loom in the horizon in the form of low interest rates and buildup of loans in the real-estate sector. “We highlight that downside risks to financial stability are rising, as recordlow interest rates have likely led to an increase in speculative and unproductive investment. Already, we have seen the strong economic sentiment and low interest-rate environment since 2010 lead to heavy lending by commercial and universal banks to the real-estate sector, with the outstanding loan exposure doubling from P 866.6 billion in March 2014 to P 1.709 [trillion] in September 2017,” BMI Research said. Buoyant projections on property demand have also resulted in excess supply in some subsegments, while an increasing number of corporates and conglomerates have ventured into property development. “This raises contagion risk in the event of a real-estate downturn, and the concentrated loan portfolios could exacerbate the situation,” BMI Research said.

PBOC adds funds for the first time in weeks

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hina’s central bank pumped funds into the financial system for the first time in three weeks after money rates rose and bonds declined. The People’s Bank of China (PBOC) offered 60 billion ($9.2 billion) of reverse-repurchase agreements on Thursday through seven-and 14-day contracts, resulting in a net addition of 30 billion yuan when taking maturities into account. Liquidity in the banking system tightened on Wednesday, with the benchmark money rate advancing by the most since October 25 even after the central bank resumed sales of reverse-repos after a 12-day halt. T he spike in money rates helped d r ive t he y ie ld on 10 -ye a r sove r eign debt up by the most in a month, amid concerns over higher inf lation

as harsh weather is expected to push food prices higher. “The central bank certainly doesn’t want to see the money rates spike too much or the bond yields climb too quickly,” said Wan Zhao, an analyst at China Merchants Bank Co. “So just like it had done in the past, it boosted injections in the hope of soothing market sentiment.” Seven-day repo rate declined 15 basis points (bps) to 2.68 percent as of 9:53 a.m. in Shanghai. Overnight repo rate rose for a fourth day, adding 13 bps to 2.77 percent, taking this week’s advance to 37 bps. Yield on 10-year government debt was little changed at 3.95 percent. Yield on China Development Bank bonds due August 2027 was steady at 5 percent, after jumping 7 bps on Wednesday.

Country Builder’s Bank redefines inclusive banking through merger

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ith the Bangko Sentral ng Pilipinas (BSP) approval of the merger between Country Builder’s Bank and First Macro Bank, Country Builder’ss Bank (CBB) now has the largest branch network in the greater Metro Manila area of any standalone thrift or rural bank. Previously, both were Metro Manilabased rural banks, each with more than 55 years of existence. With the additional 10-branch merger incentive, CBB as 46 branches, of which 13 are restricted Metro Manila branches, 16 are unrestricted Metro Manila branches and 17 are in the immediate peripheral provincial areas. CBB is unique in the sense that it offers the advantages of homespun personal service, and the customer attention of a local community bank, but with branches primarily located in Metro Manila, and adjacent provinces. This contributes greatly to the financial-inclusion advocacy of the BSP. Country Builders Bank is a rural bank covering the greater Metro Manila and the surrounding peripheral provinces, Cavite, Laguna, Bulacan and Rizal. Branches are in prime locations along streets with heavy commercial activity and foot traffic. CBB caters to a wide and varied client base in the communities it serves. The deposit base is significantly large and deposits are generated from thousands of small depositors. CBB’s urban and provincial branch network delivers organized banking financial services, bills payments, remittance services, microinsurance and automated teller machine (ATM) facilities into communities where modern banking services were previously unavailable. The bank has a large and diverse deposit base with no major single or group deposi-

tors. It has a foreign currency deposit unit license and has US dollar deposit facilities and products and accredited licenses for checking accounts, social security system (SSS) direct pension deposits, automatic payroll-deduction system of the Department of Education and microinsurance. CBB is also accredited by the Small Business Corporation Guarantee Fund and the Agricultural Guarantee Fund. In addition to the main banking products, CBB serves a big base of microinsurance clients, remittance clients and SSS pensioners. CBB has EMV-compliant ATM facilities in its branches near market places and high-traffic areas that allow for the remittance transactions and payment of bills. The bank hosts the largest volume of transactions among banks as a Bayad Center agent for bills payments. It consistently ranks among the top banks in Western Union remittances. CBB offers the Unlad Express microfinance product through which clients can avail themselves of P5,000 to P300,000 loans, with microinsurance family coverage and savings components. The process is usually done within three days. This is the second time in five years that CBB has consolidated and/or merged with another bank to expand its branch network, client base and services. What is now Country Builders Bank began with the merging of Builders Bank and Country Rural Bank of Taguig, Inc. in 2012. For CBB, the next challenge is to expand its branch network and implement technology-driven solutions so as to continue its advocacy of bringing best banking services to the many unbanked communities within Metro Manila and surrounding provincial areas.​

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Editor: Efleda P. Campos • Friday, January 12, 2018

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BOC Davao made record-high P16.4-B collection in 2017 By Manuel T. Cayon

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@awimailbox Mindanao Bureau Chief

AVAO CITY—The Bureau of Customs surpassed its collection target last year by 20.84 percent to P16.4 billion, the highest in years and the second time it posted a surplus breaching the P1-billion mark. On the average, the port of Davao posts an average surplus of P400 million to P500 million from its yearly target collection, and the only time it reached a P1billion surplus was in 2014. The record surplus of P2.833 billion that doubled the 2014 surplus happened “after a tumultuous period for the Bureau of Customs and a continuing martial law across Mindanao,” said Erastus Sandino B. Austria, district collector of the port of Davao. “We would rather now say that the phenomenal collection has not been hampered by martial law and, instead, shows the

robust health of the local economy,” he said The collection last year was also five times more than the sur plus posted t he prev ious year. In 2016 the surplus was P511,863,613.07, or 4.5 percent of its P11,374,671,017 target. Historically, though, Austria said, the port of Davao, officially under the Collection District XII, “has been meeting and exceeding its target.” He said that, in 2012, the port collected P5,910,175,341.42 with a surplus of P531,594,341.42, or 9.88 percent of its target. In 2013 it collected P6,184,838,548.82 with a surplus of P459,770,548.82, or

8.03 percent of its target. In 2014 it collected a total of P8,925,540,000 or P1,238,710,000—16.11 percent—over its target. In 2015 it collected P11,663,520,000 with a surplus of P962,350,000 or 8.99 percent of its target. In 2016 it collected a total of P11,886,534,630.46 or P511,863,613.07 (4.5 percent) over its target. Aside from a robust local economy, Austria attributed the higher collection last year to the stricter enforcement of the rules and regulation at the office. Fuel and oils topped the product shipment, both in volume and value. Salt, plastics and cement came in second as most unloaded and fertilizer in the categories of products in terms of volume. In terms of value, the two other most unloaded products were iron and steel, and machinery. C h i n a topped t he l i st of countries of origin of the products, followed by Indonesia and South Korea. The rest were from the United States, Vietnam, Malaysia, Russia, Japan, Singapore and Thailand. Austria said the all the district collectors would convene next week at the Office of Customs Commissioner Isidro Lapena to map out strategies and set collection targets.

PALAY HARVEST A farmer in Pangasinan crosses the national highway carrying newly harvested palay grains on his shoulder. LAILA AUSTRIA

Subic seaport had P1.2-B revenue in 2017 DCIPC posted ₧270-B investments last year By Henry Empeño

Correspondent

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UBIC BAY FREEPORT—The Subic Bay Metropolitan Authority (SBMA) ended the past year with P1.2 billion in revenue generated from its seaport operations, posting a 3-percent annual increase on account of a 12-percent hike in the volume of containerized cargo processed in the Subic port. SBMA Chairman and Administrator Wilma T. Eisma said the SBMA Seaport Department collected a total of P1,173,720,042 in revenue in the January-to-December period last year, compared to the P1.137 billion it made in 2016. Eisma also attributed the growth in seaport income to “the continuing effort of the SBMA Seaport Department to upgrade its process flow.” She said this has minimized transaction time and attracted more importers and exporters to use the Port of Subic. SBMA seaport figures indicated the volume of containerized cargo grew to 139,980 twentyfoot equivalent units (TEUs) in 2017, from just 124,707, TEUs in 2016. This increase in containerized cargo had reportedly offset a 6-percent decrease last year in the volume of noncontainerized cargo, which fell to only 6,646,322 metric tons as against 7,071,444 metric tons in 2016. SBMA data also showed that its Seaport Department processed 66,172 TEUs of imported containerized products in 2017, a 9-percent increase over the 60,593 TEUs processed in 2016. Meanwhile, the department processed 25,007 TEUs of exported containerized products last year, which was 6 percent higher than the 23,527 TEUs in 2016. The increase in import-export volume that passed through the Port of Subic also resulted in a significant increase of containerized cargoes transshipped in the free port: 1,462 TEUs from January to December 2017 against 368 TEUs in

2016, or an increase of 297 percent. Jerome Martinez, head of the SBMA Seaport Department, said much of the increase in revenue was due to the growth in imported products like vehicle parts by Foton Motor Philippines Inc.; paper materials by Trust International Paper Corp.; and rubber by Yokohama Tire Philippines Inc., which were all sourced from Japan. He said an increase in export revenue could also be attributed to increased export of tires by Yokohama Tires Philippines to Japan; Juken Sangyo Philippines for veneer lumber also to Japan; and HLD Clark Steel Pipe Co. for steel pipes to the United States. Another factor in seaport revenue growth, Martinez said, was the implementation of Republic Act 10668, also known as the Foreign Ships Co-Loading Act, which allowed arriving or departing ships to carry a foreign cargo to its Philippine port of final destination, after being cleared at its port of entry or exit. “This law tends to decrease, in some instances, vessel activities going to the Port of Subic, particularly in the importation and exportation of goods,” Martinez said. “However, transshipment activities also increased.” The devaluation of the peso against the US dollar and the unstable global price of crude oil in the world market, which caused a decline of the importation of petroleum products, also buoyed Subic seaport income, Martinez added. Eisma expressed optimism for the Port of Subic this year, pointing out that one of the world’s largest cruise ships will be arriving here in June for a 12-hour tour of the Subic Bay area. Eisma said the cruise-vacation giant Royal Caribbean International had confirmed this development after company officials led by Dr. Zinan Liu spent a two-day assessment of the Subic Bay area last December for the purpose of including Subic in the itinerary of RCI’s Asian cruise program.

Caap to summon 2 pilots who made emergency landing at Bicol Intl Airport

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HE Civil Aviation Authority of the Philippines (Caap) will summon two pilots who made an emergency landing at the Bicol International Airport (BIA) on Wednesday. Capt. Pedro F. Pangilinan Jr. and First Officer Jasper P. Ferguson, were heading to Legaspi from Manila at the controls of an executive jet, a Gulfstream G200, when the duo decided to land on the runway of the BIA, which is undergoing construction. The Gulfstream G200 was reportedly chartered by the Bangko Sentral ng Pilipinas and operated by Asian Aerospace. Reports said the plane was forced to land at the BIA, which is still undergoing construction, when the Gulfstream jet encountered a sudden downdraft, which the Caap erroneously reported as a wind drop. A downdraft is defined as a current of air common in cumuliform clouds and poses risks to light aircraft and helicopters, especially those flying near the ground. Caap Spokesman Eric Apolonio said in a text message to BusinessMirror that Pangilinan and Ferguson with

four others were not hurt during the incident. However, Apolonio said the names of the four passengers were withheld “due to privacy issues.” The plane, he said, was still in the grassy area of the BIA where Caap aircraft investigators were on hand to investigate the cause of the incident. The result of the investigation would not be released until at least a month, the Caap said. Apolonio said investigators will have to gather evidence, the pilot communication to radio tower, and the aircraft. “It really takes time before the agency releases an official incident report,” Apolonio said. A retired pilot, who refused to be identified, said a downdraft can temporarily affect an aircraft in flight, but the aircraft would resume to normal operations after adjusting to a new wind speed. However, he said, if the plane was hit by a strong downdraft, and there was damage to the plane, or any of the passengers get hurt, then the pilot would be forced to make an emergency landing. Caap rules require pilots to report any untoward incident within 24 hours.Recto Mercene

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AVAO CITY—The Davao City Investment and Promotion Center (DCIPC) has recorded P270 billion total capitalization of investments in Davao City last year. The total capitalization indicated an increase from 2016 of P230 billion, DCIPC chief Lemuel Ortonio said. Based on the records of the city’s Business Bureau record, Ortonio said there were 40,400 registered establishments in the city; although this still needs further validation to include the fourth-quarter data. He attributed the increase to the city’s improved, streamlined businessprocessing system, investor confidence, better peace and order situation and President Duterte, who continues to draw investors to Davao City being his hometown. Also in 2017, Ortonio reported that DCIPC approved six projects and granted business and tax incentives. These projects, with total investments of P12.9 billion, include two feed mills (aquatic and animal feed) of the Davao South Feedmill Co., the Apo Highlands Subdivision and Alteza Grande by

Primeland Properties, the Apo Agua Infrastructura and the Davao Therma Biotech Corp. for a biodegradable waste-fertilizer facility. Ortonio is bullish on the increasing trend this year banking on the continued interest for some non-Davao companies, both new businesses and expansions, to locate here. DCIPC has projected a 5-percent increase based on the average growth in the past five years starting 2012 to 2016. “We have very good climate on investment, and we foresee entry of more businesses on agriculture, which is one of Davao City’s top industries and also on tourism with more business parks and specialized health facilities,” he said. DCIPC also identified possible needs of the city for have more medical facilities as possible areas for investments. Ortonio said there are already investors complying with the requirements for the fiscal incentive application, which is expected to be in during the first quarter. The projects involved an expansion of a medical facility in the south and two boutique hotels, he added.

Even with a good projection in 2018, Ortonio said the city will continue reaching out to possible markets. There is one international mission in Malaysia and Singapore in the third quarter of the year similar to the 2017 mission in Japan. This is to support direct flights to Kuala Lumpur and sustain the Singapore-Davao route. There is also a local road show, which would involve visits to embassies and diplomatic offices in Manila to spread information on the opportunities in Davao and to show an aggressive marketing to draw more investors. This will also be complemented with meetings with foreign chambers of commerce in Manila. The city officials will also meet with the Department of Trade and Industry’s Center for International Trade Expositions and Missions organizers for participation in events with international exposure. This will be a platform to hold briefings and presentation of business and economic activities to investors. DCIPC is also eyeing the tourism road show this year to establish direct flights in Davao City. Digna D. Banzon/PNA

CIAC to probe missing valuables after OFW posts pilfered luggage on Facebook Story and photo By Ashley Manabat Correspondent

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LARK INTERNATIONAL AIRPORT—A fact-finding investigation is now ongoing on the reported theft of the luggage of an overseas Filipino worker (OFW) after he posted details of the incident on Facebook. Clark International Airport Corp. (CIAC) chief Alexander Cauguiran said on Thursday that he has ordered a factfinding investigation after seeing the post of an OFW on Facebook. The OFW, who identified himself as Jov En Ross showed his pilfered luggage outside the police office at this airport on Facebook. The OFW said he came home on December 23, while his luggage arrived the following day. But it was only on January 10 that he got notified to get his luggage here, only to find most of the valuables were already missing. “Our luggage/bags were robbed by airport personnel in Clark International Airport Philippines,” the OFW said. “We found out that all the zippers of our luggage were destroyed,” he lamented

ALEXander Caguiran (center), Clark International Airport Corp. (CIAC) chief, explains what happened to the pilfered luggage of an overseas Filipino worker from Singapore at the Royce Hotel in Clark on Thursday. Flanking him are Josep Jepri Miranda, CIAC assistant vice president; and Arnulfo Pan, CIAC vice president.

as he showed three pieces of luggage and a box that was apparently empty. “We lost all our souvenirs like Victoria’s Secret lotion and soaps.” He advised returning OFWs just to bring hand-carry luggage to avoid being robbed. The CIAC investigation signed by Chief Insp. Adriano Junio Jr. Of the Clark airport police, identified the OFW as Jovinal C. de la Cruz, 34, and his companion as Rosemarie Campo Versoza, 36, who arrived via Jet Star

flight 3K 779 from Singapore. The lost contents of their luggage were valued at P82,824, which the Miascor Aviation Services, one of the ground handlers of the airport, agreed to settle. Miascor station manager Mark Anthony Esteban and his staff Hazel David said the suspects were placed under preventive suspension pending an administrative investigation. Cauguiran said he will recommend the termination and filing of criminal charges against the suspects.

A10 Friday, January 12, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

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editorial

Everybody’s a critic

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veryone is entitled to his own opinion but not his own facts. Everyone is entitled to express his opinion but not to complain when others disagree. Everyone is entitled to object to a government policy but not to simply whine. Brendan Behan was an Irish Republican, poet, short-story writer, novelist and playwright who is widely regarded as one of the greatest Irish writers and poets of all time. Behan wrote: “Critics are like eunuchs in a harem; they know how it’s done, they’ve seen it done every day, but they’re unable to do it themselves.” The issues facing the Philippines are important and deserve deep and lengthy discussion. The Philippine government has flaws in its decision-making process and results, as do all organizations. Everyone knows that. However, what the nation needs is constructive criticism defined as offering thought-out alternatives. Regarding the new tax law, we have seen objections to the tax on 11-kilogram cylinder of liquefied petroleum gas by computing the impact as if each person in a household of six were buying his or her own tank. Others have distorted the numbers by projecting future tax increases on other petroleum products as if it were imposed immediately. We have the intellectual dishonesty of, on one hand, speaking of the unhealthy intake of too much sugar-sweetened beverages, and then complaining about having to pay more tax on those products. Further, as critics so effectively pointed out, the proposed tax on 3-in-1 coffee products was silly in terms of limiting sugar consumption and would impact more harshly on the lower economic classes and working people. And that provision was dropped from the new law. Further, the tax law took months to formulate and there was plenty of time for objections to be heard and they were heard. If the final law did not meet the expectations of the critics, here is a big surprise for them. That is what happens in a democratic system of government as opposed to a dictatorship. A free system cannot please everyone. An authoritarian system pleases only one. But you better be the one in charge. The seemingly never-ending situation of the Chinese incursion into Philippine territory pleases no one. And everyone would like to have their cake and eat it, too, by kicking the Chinese out and yet keeping healthy relations with that government. Where is the “magic bullet” for this problem? The Duterte administration’s most vehement critic apparently had 16 meetings with Chinese representatives during the Aquino presidency. Yet, that accomplished little. So what is his solution today? While President Duterte’s approval and trust rating remains high, that is not to say there are no legitimate concerns from all of us. But, perhaps, the president has those high ratings because his “critics” offer little in the way of concrete and sensible alternatives to this administration’s policies. The nation needs to hear other voices. Those voices need to be saying that which is in the best interests of the country, not a particular political agenda. Since 2005

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spox

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here’s a lot being said about the possibility of the 2019 elections being scrapped in case the efforts to shift to federalism bear fruit. A lot of it, though, boils down to speculation. Here are the facts as they currently stand: the 1987 Constitution remains intact and in effect; who will end up being responsible for preparing the draft—either Congress convening as a constituent assembly or a new constitutional convention—hasn’t been decided; and there isn’t even a draft of the proposed new constitution yet. So all this noise being made about the issue can be solidly interpreted as being nothing more than an exercise in putting the cart before the horse. I’m not going to theorize as to why that particular tack (yes, it’s tack, not tact) is being taken, but that is all that’s happening right now. I say this not to lull anyone into a false sense of security or complacency. Far from it. I am pointing out how things stand so that those who feel that the avowed goals of the federalists are wrong or present a threat to democracy can marshal their resources and strategize a coherent and logic-based

(as opposed to a hysterical and fearbased) response. Because that is what democracy needs. Like it or not, democracy does not thrive in the monochromatic world of perfect consensus. Democracy lives along the chaotic knife-edge between competing philosophies, and that edge is what is being brought into ever-sharper focus by those who are pushing for a shift in the form of government. As scary as that might

be to some people, there are others who believe that it holds abundant promise for a better future. As voters —hopefully more woke than sheeplike—we all have to be aware of that so that we can choose which side we’re going to support. With any luck, that decision will not be made based on love (or hatred) for the personalities leading the charge on either side. For the sake of our democracy, I hope the positions we take as we march inexorably into this debate will be

defined by our personal understanding of what the nation stands to gain or lose; by our informed acceptance of the costs we will have to pay should we decide this way or that; and by a deep-seated conviction that we are correct in our analysis of the situation we are facing. We, as voters, must also be aware that we can come to a principled position on the question of federalism— based on comprehension, acceptance and conviction—only if we do not treat this national conversation as a spectator sport. We cannot afford to leave this decision to others; nor can we “just wait for the plebiscite.” We must strive to be active participants in the process that proposes the changes that will later on be submitted to the electorate for its approval or disapproval. We must not accept the fiction that there exists a privileged class of persons who alone “know best;” do not expect that things will work out great if you “simply have faith” enough to avert your eyes. There’s nothing wrong with trust—and yes, a chronic mistrust of government will inevitably lead to paralysis— but neither is there anything wrong with being protective of our future, especially when the stakes are high.

‘Servant Leadership in Business’ conference

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

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James Jimenez

We, as voters, must also be aware that we can come to a principled position on the question of federalism—based on comprehension, acceptance and conviction—only if we do not treat this national conversation as a spectator sport. We cannot afford to leave this decision to others; nor can we “just wait for the plebiscite.” We must strive to be active participants in the process that proposes the changes that will later on be submitted to the electorate for its approval or disapproval.

T. Anthony C. Cabangon

Editor in Chief

Senior Editors

The knife’s edge

Rev. Fr. Antonio Cecilio T. Pascual

SERVANT LEADER

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Y dear brothers and sisters in Christ; We at Serviam Catholic Charismatic Community Foundation Inc. would like to present our Third Conference in a series entitled “Servant Leadership in Business” on January 31 from 8 a.m. to 2 p.m. at the Rizal Ballroom of the Makati Shangri-La, in Makati City.

Inspired by Pope Francis’s declaration that business is a noble vocation, Serviam aims to propagate servant leadership in yet another field of endeavor, the influential business sector. Business leaders create wealth that should be used to share prosperity and serve the least among our people. His Eminence, Luis Antonio Cardinal Tagle will keynote the conference, with a thought-provoking topic, “Authenticity in Business: How

can one be real in a virtual world?” This will be followed with a showcase by lawyer Cirilo Noel, Ms. Pacita Juan and Dr. Cecilio Pedro on how servant leadership is applied in the 21st century in triple bottom line—profit, the poor and the environment. Ambassador Ramon del Rosario will also speak on servant leadership as it relates to business ethics. The last panel consisting of Science Secretary Fortunato T. dela Peña, Prof. Solita Monsod and Mr. Aurelio Mon-

To aptly realize the ideals and aspirations Serviam stands for in the business community, it has partnered with prominent business groups, namely, Makati Business Club, the Management Association of the Philippines, the Philippine Chamber of Commerce and Industry and the Employers Confederation of the Philippines.

tinola III will challenge the business community with their expectations of servant leadership from the perspective of the government, the civil society and academe, respectively. Mr. Rod Nepomuceno will moderate the afternoon panel, while Mr. Jose Mari Chan, a successful businessman in his own right, will share his wisdom and render a song or two as guest artist. To aptly realize the ideals and aspirations Serviam stands for in the business community, it has

partnered with prominent business groups, namely, Makati Business Club, the Management Association of the Philippines, the Philippine Chamber of Commerce and Industry and the Employers Confederation of the Philippines. It is Serviam’s hope to make an impact, no matter how small or insignificant it may be, in all segments of society, including but not limited to the media, academe and the youth. Our first conference in the series was held in 2013, entitled “Servant Leadership in the Year of Faith.” It was geared primarily for the leaders of the Church, both the clergy and the laity, while the second conference in 2015, “Servant Leadership in Public Service,” had the country’s public servants as principal focus. To know more about Caritas Manila, visit www.caritasmanila.org.ph. For your donations, call our DonorCare lines 563-9311, 564-0205, 0999-7943455, 0905-4285001 and 0929-8343857. Make it a habit to listen to Radio Veritas 846 in the AM band, or through live streaming at www.veritas846.ph. For comments, e-mail veritas846pr@gmail.com.

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Revisiting our poverty statistics Grossly, the millennials Fernando T. Aldaba and *Jessalaine M. Bacani

Tito Genova Valiente

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EAGLE WATCH

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ast year, the Philippine Statistics Authority (PSA) released data on the country’s poverty situation. These statistics reveal that the poverty incidence across the entire population declined from 25.2 percent in 2012 to 21.6 percent in 2015. This translates to a 14-percent reduction in the percentage of Filipinos whose incomes are not enough to purchase their basic necessities. The same downward trend can also be observed among households, as the poverty incidence among families dropped from 19.7 percent to 16.5 percent during the same period.

Official statistics in 2015 show that 21,927,009 individuals in the country are estimated to be living below the national poverty line. Region 5 has the largest number of poor people at 2,172,145. It is followed by Region 7 and the Autonomous Region in Muslim Mindanao, with 2,057,479 and 1,990,503 poor Filipinos, respectively. The magnitude of poor population is also high in Region 8, Region 6, Region 10 and Region 12, with roughly around 1.7 million poor individuals residing in each region. In contrast, the National Capital Region and the Cordillera Administrative Region have the least number of poor people. The figure below presents the poverty incidences of Association of Southeast Asian Nation member-countries with available data. These are measured based on the percentage of individuals living below the designated national poverty line for each country. The Philippines is shown to have one of the highest poverty incidences in the region, next to Lao PDR and followed closely by Myanmar. Meanwhile, countries which share similar economic characteristics with the Philippines, namely, Indonesia and Thailand, have significantly lower levels of poverty incidence. Hence, while the Philippines has been successful in reducing its poverty incidence during the past few years, it still faces the challenge of being on par with its neighbors, particularly those countries that it shares similar characteristics with.

Source: World Bank One of the government’s prominent poverty-related programs is the Conditional Cash Transfer Program, otherwise known as the Pantawid Pamilyang Pilipino Program, or 4Ps. This program aims to jointly alleviate short-term poverty and break the cycle of intergenerational poverty by providing selected households with cash grants if they meet certain conditions. These conditions include ensuring that children consistently attend school, as well as receive health checkups and vaccines. Pregnant women must also avail of prenatal and postnatal care, and be assisted during childbirth by a trained health professional. In addition, parents must attend family-development sessions to learn about positive child discipline, disaster preparedness and women’s rights. The rightmost column in the table below displays the provinces with the most number of household beneficiaries in 2015. It is juxtaposed alongside the provinces that have the highest number of poor families during the same year. A cursory review of this table suggests that there is a slight mismatch between these two sets of data. Maguindanao has the highest number of targeted household beneficiaries, at 200,537. However, poverty statistics from the PSA indicate that a lower number of 86,100 poor households reside in the province. Sulu also has a significant number of 4Ps household beneficiaries, at 107,368, even though the province registers a lower number of poor families compared to other provinces at 83,289. In contrast, provinces that have a larger magnitude of poor households obtain lower coverage in the 4Ps program. To illustrate, although Cebu has the largest number of poor families, at 179,162 based on data from the PSA, the 4Ps targets a lower magnitude of 129,986 poor families in the province. Top 10 Provinces with Highest Top 10 Provinces with Highest Number of Target 4Ps Household Number of Poor Families, 2015 Beneficiaries, 2015 Number of Target Magnitude of Household Province Poor Families Province Beneficiaries Cebu 179,162 Maguindanao 200,537 Negros Occidental 145,182 Zamboanga del Sur 140,804 Negros Oriental 138,029 Cebu 129,986 Bukidnon 135,909 Pangasinan 24,410 Leyte 111,394 Negros Occidental 124,100 Lanao del Sur 109,258 Camarines Sur 117,730 North Cotabato 109,146 Leyte 113,385 Nueva Ecija 105,793 Zamboanga del Norte 110,790 Camarines Sur 104,902 Sulu 107,368 Zamboanga del Norte 99,149 Quezon 101,020

Source of basic data: Philippine Statistics Authority (PSA) and Program Portfolio of 4Ps for 2015 Note that eligible 4Ps beneficiaries are selected by the Department of Social Welfare and Development from the poorest municipalities based on the poverty incidence generated by PSA. Families residing in municipalities with poverty incidences higher than or equal to 50 percent are then assessed for eligibility using the Proxy Means Test model. Since incidence is a relative measure of poverty, areas identified to be poor under this measure will not necessarily be the same compared to when an absolute measure of poverty, such as magnitude, is used. Sampling limitation is also a reason for this divergence. There is no doubt that the 4Ps have contributed much in the battle against poverty. With new poverty statistics set to be reported in 2019, it is still worthwhile to revisit how the country’s large poverty-related programs select its beneficiaries to ensure that such programs indeed reach the “poorest of the poor” and that no one is left behind. It might also be time for government to increase investments in data generation and statistics management. * Dean and Professor of Economics, School of Social Sciences and Research Associate, Ateneo de Manila University

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inally, I have used that label—the millennials. I have always dreaded the term because it has not refined itself,or rather, the users have grossly employed that notion.

Who are the millennials? There have been, earlier, debates about who are those who fall under that name. Nothing much has been clarified itself to say the negative elements of those born during the turn of the millennia. How the term came about is a mystery. The lack of mystique in the generation that seems to have been defined by the change in the millennium has been oversimplified. As with any simplication, the label that resulted is accessible, fashionable and easy to use. As with labels, the term “millennials” has provided a handle with which one can, supposedly, understand the generation of today. As with any simplification, the term is simplistic and gross. It is a catch-all term and, as with any concept that appears to cover much and everything, the word millennial does not cover much. There were those who embraced the term, and there are many who embrace its use. But, when educators who should know better about cohorts and background apply the label, then there lies the danger of ignorance and naïvete. The favorite whipping boy for the trait of the milliennials is technology. Social media and devices that quickly link individuals create, for those who like the term, a person who has no deliberate sense of emotions. A few days ago, I had the fancy time to review the film Rebel Without a Cause. With James Dean playing the irascible lead, the story caught and defined that period in the 1950s and 1960s. Suddenly, all young men were James Dean. They drank liquor and got drunk and caused mayhem. The photographs of Filipino young boys and men that followed the fillm showed the scowl and smirk of

James Dean. And there was always that look: you gaze down, tilt your head to the left, and, with your chin not leaving the standing collar of your shirt, you focus your rage on the camera, that intrusive machine aiming to capture all your heartaches about the world. It was strange viewing the film again. For a cinema that was supposedly ushering the new way of understanding or misunderstanding the youth, the film painted again a gross oversimplification of parenting. The father was arrogant,

Friday, January 12, 2018 A11

For the good educators, the word millennial cannot withstand the test of operational definition. For most of the young men and women in the land, the term millennial does not, with great fortune, make sense at all. the mother naïve and the grandmother a virago. Only the local police officer could understand the youthful “rebel.” Labels lie. We know that from the products we buy each day from the grocery. Shampoo can make you divine; shaving lotion can turn you into sensual devils. Years ago, I was doing a fieldwork in Southern Luzon in a farm. It was early morning, the first day of the school year. In rural communities where young men and women marry early, a young father, in his teens, had excused himself from the work that day. He was walking to the town to bring his young son

to the public school. I remember him telling me how education was important to him. He was the perfect millennial, but I doubt if he understood the term. He was the rebel with a cause. He promised to fight ignorance with his young son. The sun was barely peeping through the coconut trees. The world was turning around me and all those who lived in that farm owned by a few families. Across the many islands of this nation struggle, labor and die poor many young men and women born at the turn of the millennium, not knowing what moved, what shifted. The universe does not listen to them because they live in a planet of capital exaggerated over labor and human toil. For the good educators, the word millennial cannot withstand the test of operational definition. For most of the young men and women in the land, the term millennial does not, with great fortune, make sense at all.

E-mail: titovaliente@yahoo.com.

Tax on compensation income, in a nutshell Atty. Shiendy Loufer D. Casaña

Tax Law for Business

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epublic Act 10963, otherwise known as the Tax Reform for Acceleration and Inclusion (TRAIN) Act, was signed into law on December 19, 2017, and took effect on January 1, 2018. Several tax reforms were introduced, such as imposing excise tax on sugar-sweetened beverages and cosmetic procedures. By the passage of the law, several provisions of the National Internal Revenue Code of 1997 were amended. One of the salient features that directly affect most employees is the change in the tax rates on compensation income from the previous 5 percent to 32 percent depending on the income. Under the TRAIN Act, the new tax schedule is as follows: Annual Salary

Tax Rate from January 1, 2018 to December 31, 2022

Not over P250,000 0% Over P250, 000 20% of the excess over but not over P400,000 P250,000 Over P400,000 P30,000 + 25% of the but not over P800,000 excess over P400,000 Over P800,000 P130,000 + 30% if the but not over P2,000,000 excess over P800,000 Over P2,000,000 P490,000 + 32% of the but not over excess over P2,000,000 P 8,000,000 Over P8,000,000 P2,410,000 + 35% of the excess of P8,000,000 In furtherance to the TRAIN Act, the Bureau of Internal Revenue issued Revenue Memorandum Circular (RMC) 1-2018 to prescribe procedures for employers

Tax Rate from January 1, 2023 onwards

0% 15% of the excess over P250,000 P22,500 + 20% of the excess over P400,000 P102,500 + 25% if the excess over P800,000 P402,500 + 30% of the excess excess over P2,000,000 P 2,202,500 + 35% of the excess of P 8,000,000

in withholding tax from compensation paid to employees on a daily, weekly, semimonthly and monthly payroll period. The RMC included a tax table showing the

Let’s take the case of an employee who receives P35,000 monthly. In a month, under the old law, he is required to pay P3,250 for income tax with a total of P39,000 in a year. Under the TRAIN Act, the employee is only required to pay a total of P35,000 or P2,916 monthly. A cut of P4,000 is not bad at all.

compensation range in a given payroll period and the corresponding withholding tax. Noticeably, the new table does not include anymore the impact of personal and additional exemptions. This is so because Section 35 of the Tax Code had been repealed by the TRAIN Act. Nonetheless, the impact is still a lowered tax. Assuming that an employee receives P20,000 in a month, prior to the effectivity of the TRAIN Act, his employer is required to withhold P1,500 monthly for income tax (P500 + 10 percent of P10,000 in excess of the P10,000 threshold). Whereas in the TRAIN Act, his compensation is already exempt from tax (P20,000 x 12 = P240,000) considering that the income is below P250,000 annually. As compared to the old tax rate, an employee who is paying P18,000 for income tax annually may now take home the entire amount and use the same for his other personal expenses. Let’s take the case of an employee who receives P35,000 monthly. In a month, under the old law, he is

required to pay P3,250 for income tax with a total of P39,000 in a year. Under the TRAIN Act, the employee is only required to pay a total of P35,000 or P2,916 monthly. A cut of P4,000 is not bad at all. The RMC likewise prescribes a rate of 8 percent creditable withholding tax on income payments to self-employed individuals or professionals. The rate is applicable to: 1. Professional fees, talent fees, commissions, etc., for services rendered by individuals; 2. lncome distribution to beneficiaries of Estates and Trusts; 3. lncome Payment to certain brokers and agents; 4.lncome Payments to partners of general professional partnership; 5. Professional fees paid to medical practitioners; and 6. Commission of independent and/or exclusive sales representatives and marketing agents of companies. The TRAIN Act is one step forward to achieving the government’s aim for change by lowering, if not eliminating, the personal-income taxes of the labor force. As Benjamin Franklin once said, “In this world, nothing is certain but death and taxes.” The author is a junior associate of Du-Baladad and Associates Law Offices (BDB Law), a memberfirm of WTS Global. 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 shiendyloufer.casana@bdblaw.com.ph or call 403-2001 local 170.

2nd Front Page BusinessMirror

A12 Friday, January 12, 2018

Boracaynons skeptical of govt promise to solve island’s nagging issues By Ma. Stella F. Arnaldo

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@akosistellaBM Special to the BusinessMirror

ORACAY Island, Aklan—To see is to believe. This was the reaction of Boracay Foundation Inc. (BFI) President Nenette Aguirre-Graf after briefly meeting on Tuesday with ranking government officials, who committed to solve the drainage and infrastructure problems of the island. The government executives also promised to resolve the island’s congestion issue due to seeming overpopulation and overbuilding of commercial establishments and resorts.

In an interview with the BusinessMirror, Aguirre-Graf, who is also a town councilor of Malay, said: “It’s all promises and, kumbaga boyfriend, Boracay’s been jilted many times. But I’m still hoping they will be true to their word.” At a news conference here on Tuesday, Tourism Secretary Wanda Corazon T. Teo announced a P1.2billion project to solve the drainage problems of Boracay. Environment Secretary Roy A. Cimatu also promised to periodically inspect the waters around the island for contamination and take action against illegal loggers and settlers. (See “Decongestion, P1.16-B drainage project hoped to end Boracay woes,” in the BusinessMirror, January 10, 2018.) Aguirre-Graf pointed out that “phase 1 of the drainage project took 10 years to build and is still unfinished. Now, the secretary is talking about P1.1 billion for the entire drainage system to be in place in two years?! Sige nga, tignan natin. To see is to believe.” BFI has close to 200 members, including members of the

Paraw, Windsurf and Kite School and Island Hopping Associations. For her part, Elena Brugger, president of the Philippine Chamber of Commerce and Industry (PCCI)-Boracay, said the island is better off being managed by a tourism authority instead of the local government. “We would like to have an implementing body to govern the tourism business here on the island.... We should have a tourism zone authority and learn from our mistakes so these do not be replicated in other islands. Also, it is in the national interest to develop an infrastructure and better transportation on the island or in the whole municipality of Malay.” Last year over 2 million people visited Boracay. “It is a very small island,” Brugger stressed, “who is going to manage the needs of the businesses and the tourists, including the 30,000 to 40,000 residents, plus the immigrants, vendors, etc.? Can we leave this work, with such a magnitude in scope, to an LGU [local government units] or three barangays on the island?” See “Boracaynons,” A2

Package 2 of CTRP to plug ₧300-B revenue leak By Rea Cu

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@ReaCuBM

ev enue leakages from income-tax holidays and other incentives with no time limit—around P300 billion annually—will be plugged via the second package of the Comprehensive Tax Reform Program (CTRP). According to Finance Undersecretary Karl Kendrick T. Chua, income-tax holidays and special rates account for P86.25 billion of revenue losses for the government based on 2015 data. Customs duty exemptions, on the other hand, account for P18.4 billion. Exemptions from payment of value-added tax (VAT) on imports led to P159.82 billion in foregone revenues, with another P36.96 billion lost to local VAT. The lost revenues from incentives totaling P301.22 billion annually do not yet include exemptions from the payment of local business taxes and the estimates on tax leakages. In terms of income-tax incentives, the government gave away P61.33 billion to companies in 2011, which went up to P88.17 billion in 2014. Customs duty exemptions have gone down from P82.97 billion in 2011 to P38.04 billion in 2014, owing to the various free-trade agreements signed by the Philippines with other countries. “So, on average, we gave away up to 1.5 percent of our GDP in income tax and customs duties exemptions,” Chua said. Chua pointed out that the enactment of the Tax Incentives Management and Transparency Act (Timta) in 2016 has allowed the Department of Finance (DOF) to track incentives systematically. See “CTRP,” A2

BSP STARTS USING‘BIG DATA’ IN FEELING PULSE OF ECONOMY NOW FLASHING WARNING SIGNS

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he Philippine Central Bank is beefing up its data tools to get a better handle on a fast-growing economy, which is starting to flash warning signs because of a rapid buildup of debt. Like central banks across Southeast Asia, the Bangko Sentral ng Pilipinas (BSP) is pushing to capture information from “big data,” drawn from sources such as online search engines, job web sites and proprietary registers. It’s still a new area of exploration for officials, who can use the tools to get a real-time picture of the economy, helping them improve policy-making. “We’re still rookies,” Zeno Abenoja, a director at the Central Bank, said in an interview in Manila on January 9. “We’re starting with manageable projects. We are building our capacity to analyze, take advantage of big data to take the pulse of the economy.” In focus is the financial health of companies outside of the banking industry. The Central Bank is working with government agencies like the Securities and Exchange Commission to sift financial statements of listed nonfinancial companies, he added. “We want to see how healthy their ba lance sheets are,” Abenoja said. “Are there any trends we can see in terms of their assets, their liabilities, how they fund themselves? It’s a matter of getting the pulse.” The Southeast Asian economy expanded rapidly last year,

MRT 3. . .

Continued from A1

‘COMFORT WOMAN’ A horse-drawn cart catering to tourists passes by a statue of a “comfort woman,” or a Filipino sex slave during World War II—which was erected along the scenic Baywalk in Manila—on Thursday, January 11. The statue, which symbolizes Filipino women forced to work in Japanese wartime brothels and inaugurated on December 9, 2017, has created a controversy after Japanese Internal Affairs and Communications Minister Seiko Noda reportedly voiced “displeasure” in her meeting with President Duterte. AP/Bullit Marquez

State’s share. . . Continued from A1

a whole, since we no longer allocate it to LGU shares when we submit it due to the pending case on the entitlement on LGU share.” Spex, added the officials, pays the DOE on a monthly basis. The amount, however, varies depending on the peso-dollar exchange rate and proceeds from the gas sales. The Malampaya gas field in offshore Palawan fuels three natural gas-fired power stations with a total generating capacity of 2,700 megawatts to provide 30 percent of Luzon’s power-generation requirements. Since October 2001 the Philippines has been importing less fuel for power generation, providing the country foreign-exchange savings and energy security from this clean fuel. Natural gas has the least carbon dioxide among fossil fuels, and is more efficient than other sources of power like coal and crude oil. The Malampaya project is a joint

undertaking of the Philippine government and the private sector. The project is spearheaded by the DOE, and developed and operated by Spex with a 45-percent stake on behalf of joint-venture partners Chevron Malampaya Llc.—also with a 45-percent stake—and PNOC Exploration Corp. PNOC holds the remaining 10 percent. Under the service contract agreement, 70 percent of the gross proceeds from the sale of natural gas would go to the contractor to recover the investment cost. The remaining 30 percent is shared by the government and the consortium on a 60-40 basis, respectively. The DOE has called on lawmakers to pass a legislation that will allow the government to tap the Malampaya Fund to pay for the P53 billion worth of debts incurred by the National Power Corp. (Napocor) over the years. The Malampaya Fund could only be utilized for energy-development projects, unless there is a law that says otherwise. “We cannot utilize it except for ERD [energy-resource development],”

Energy Undersecretary Felix William B. Fuentebella said. For this to be implemented, Fuentebella added, “It can’t be done on an executive order alone. It has to be coursed through a legislation.” These debts—in the form of stranded debts and stranded contract costs‚ are being passed on to consumers via the collection of universal charge, an item found in the electricity bills. Stranded debts refer to any unpaid financial obligations of Napocor that have not been liquidated by the proceeds from the sales and privatization of Napocor assets. Stranded contract costs of Napocor or distribution utility, meanwhile, refer to the excess of the contracted cost of electricity under eligible contracts over the actual selling price of the contracted energy output of such contracts in the market. The stranded costs are due to onerous “take-or-pay provisions” in Napocor contracts with independent power producers. In essence, this allowed the IPPs to charge Napocor for used and unused power.

www.businessmirror.com.ph

Its proposal for the MRT mimicked the same provisions under its concession agreement for the LRT 1 operations and modernization deal, which it bagged in 2014 via the Public-Private Partnership Program. It means that, instead of having a different operator and maintenance provider, the group will be the one to do both, something that Sobrepeña has been pushing for since the government forcibly took over the upkeep of the facility in 2012. “I can’t speak for his opinion, but Metro Pacific is doing its best, together with the government, to find a way to get the MRT 3 problem fixed for the riding public. We’ll focus on this for now and leave the shouting to others,” David J. Nicol, who sits as CFO at Metro Pacific, told the B usiness M irror when sought for comment. He cited his group’s experience with LRT 1 operations as his group’s main strength in addressing the issues of the train line. “We are doing a good job with the LRT 1, and it would be great if we can do the same for MRT 3, wouldn’t it?” The railway facility will be “a challenge” for the company, given the train system’s history of breakdowns, derailments and other technical and legal issues, including the procurement of 48 train cars from Dalian Locomotive and Rolling Stocks of China. O n Th u r s d ay Tra n s p o r t at i o n

posting year-on-year growth of more than 6 percent in each of the first three quarters, as the government ramped up spending on infrastructure projects. While the Central Bank has downplayed risks of an overheating economy, credit growth has surged, as consumers and businesses take advantage of low interest rates. Total debt of listed companies more than trebled to $135 billion in the eight years through 2017, according to data compiled by Bloomberg. The BSP is also building a sentiment index based on how often key economic words appear together in news reports, he said. It’s also looking at expanding big-data sources to real estate, job web sites and online shopping, he added. “Our big-data efforts accelerated in the past two years, especially with more exposure and training,” he said. “This will give us an idea on what lies ahead, forecasting, while another use could be vulnerability analysis. There are a lot of possibilities.” Central banks around the world are embracing big data to help monitor potential risks and provide deeper insight into their economies. In Indonesia, for example, the central bank tracks social media and news sites before any policy decision to gauge rate expectations. In Thailand, where the low official unemployment rates may not be a reliable measure of the labor market, the central bank is building its own employment index. Bloomberg News Undersecretary Timothy R. Batan said the government has completed the procurement of an independent audit and assessment (IAA) consultant that will evaluate and make recommendations on what to do with the 48 light-rail vehicles (LRVs) that have already been delivered by Dalian. The consultant that won the bidding for the said deal was TUV Rheinland, a German firm established in 1872. “The trains have been delivered, but we are unable to accept them unless our IAA consultant has certified their safety and compatibility with our system,” Batan said. He also assured that the government will not interfere or influence the consultant’s assessment of the 48 LRVs. “We will not in any way try to influence their independent assessment of the 48 cars from Dalian, and we will just make a decision based on their recommendation.” “If they’ll say that we can immediately deploy the new trains, we will consider. If they say that we need to make adjustments, we will consider, of course, not at our expense. If they say that we need to return the cars, then we will return them,” Batan explained. Concerns were earlier raised on the 48 vehicles that the Aquino administration procured. Some include issues on compatibility and even technical specifications. The government paid P3.8 billion for the said train cars. The MRT 3 ferries roughly half-amillion passengers daily with just 20 train sets plying the Edsa route.