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‘Viva! Pit Señor, Santo Niño!’ A lay minister in Tondo, Manila, sprinkles holy water on the icons of Sto. Niño during the Feast of Sto. Niño de Tondo, which is celebrated every third Sunday of January. ROY DOMINGO

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Monday, January 16, 2017 Vol. 12 No. 96

Tax perks to yield ₧70-B tourism investments–Tieza By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

HE Tourism Infrastructure and Enterprise Zone Authority (Tieza) estimates about P70-billion investments into the economy this year with the grant of fiscal incentives to tourism enterprise zones (TEZs).

“Though the foregone revenues are significant, these fiscal incentives will be able to encourage more investments into the tourism sector,”

Finance Secretary Carlos G. Dominguez III said in a text message to the BusinessMirror. “It will create jobs for the people in and around the TEZs,

alleviating poverty in many areas of the country, which is, ultimately, the aim of the Duterte administration.” The Bureau of Internal Revenue (BIR) finally issued new revenue regulations (BIR Revenue Regulations 7-2016), which extended the fiscal incentives, and took effect last Continued on A2

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PESO exchange rates n US 49.5300

PPP Lead Alberto C. Agra

s a lease a public-private partnership (PPP) modality? What is a lease arrangement? What law governs leases as a PPP? How does the government, as lessor, select the private-sector proponent-lessee? For those who are of the view that the build-operate-transfer (BOT) law is the only PPP law in the country, the answer to the first question is no. A straight lease is not one of the nine modalities listed under the BOT law. Said law only allows a build-lease-transfer arrangement, whereby the private sector designs, constructs, finances and leases out the facility to the government, and the latter lease rentals. This is the approach used in Phase 1 of the PPP for School Infrastructure Project of the Department of Education.

CONSUMER SENTIMENT IN U.S. HOVERS NEAR 12-YEAR HIGH

Part One

T’S 2017 and yet the agriculture sector is still looking for a way to achieve self-sufficiency in rice. And since the turn of the new administration, Agriculture Secretary Emmanuel F. Piñol has set his eyes in achieving the country’s rice self-sufficiency, something that the previous administration has failed to achieve. Based on the latest data from the Philippine Statistics Authority (PSA), the country’s self-sufficiency in rice even dropped below the 90-percent mark in 2015, at 88.93 percent compared to the 91.95 percent self-sufficiency ratio (SSR) recorded in 2014. The decline was attributed to reduced share of domestic production to the country’s supply, while importation was increasing, the PSA noted. In the PSA’s annual publication, titled Agricultural Indicators System (AIS): Food Sufficiency and Security, the agency reported that the country hit its highest SSR during 2013, which was estimated at 96.82 percent. SSR is the extent at which a country’s local production of commodities is adequate enough to meet the demand of the whole population, the PSA added. An SSR lower than 100 percent means that the local production couldn’t meet the country’s requirement for a specific commodity, while an SSR greater than 100 percent indicates that domestic production is more than enough to support the domestic requirements, the PSA said. The Philippine Development Plan of the previous administration had targeted a 100-percent rice self-sufficiency level by 2016. The Aquino admin-

Think broad: A lease is a PPP

Continued on A15

PHL retraces journey toward food security By Jasper Emmanuel Y. Arcalas

Farmers in Nueva Ecija gather vegetables that will be sold to various markets in Metro Manila. Millions of Filipinos continue to rely on farming to earn and put food on their table. NONIE REYES

istration had also wanted to wipe out rice imports by 2013. Despite billions of pesos poured into the government’s rice self-sufficiency goal program, local rice output was unable to meet the demand of Filipinos, according to PSA data.

Plans

PIÑOL has confidently said 2017 might be the

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The estimated foregone tourism investments from 2013 to 2016 due to the failure to grant fiscal incentives to TEZs

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year when the Department of Agriculture’s (DA) rice self-sufficiency program will start to be implemented. “We are now in the process of finalizing the Masaganang Ani [bountiful harvest] 6000 [MA 6000] Program, which will initially target 1 million hectares of irrigated areas,” Piñol told reporters in a news briefing in mid-December. Continued on A2

onsumer confidence was little changed in January from its highest level since the start of 2004, showing Americans are still optimistic that fresh economic policies will spur growth. The University of Michigan said on Friday that its preliminary index of sentiment was 98.1, after 98.2 last December. The median projection in a Bloomberg survey called for 98.5, with estimates ranging from 96 to 100. The latest reading indicates sentiment remains strong after President-elect Donald J. Trump’s November victory, with Americans and businesses betting that tax cuts and looser regulation will help bring more opportunities for jobs and higher wages. At the same time, the survey showed a significant minority of respondents expected a negative impact from the new administration’s policies, indicating a deep partisan divide over the outlook. “These extreme differences wou ld imply eit her strong growth or a recession in the year ahead,” Richard Curtin, director of the consumer survey, said

in a statement. “Since neither is likely, one would anticipate that both extreme views will be tempered, with the relative movement dependent on changes during Trump’s first 100 days.” Curtin said on a conference call that “actual changes in the economy” will have the most impact on sentiment. “We’re going to start to see either a positive or negative reaction after Trump has been in office for three or four months.” The current conditions index, which measures Americans’ perceptions of their personal finances, increased to 112.5 from 111.9 in the prior month. The gauge of expectations six months from now declined to 88.9 from 89.5 last December, which was the highest in almost two years. Respondents expected the inflation rate in the next year will be 2.6 percent, compared with 2.2 percent in the December survey that was the lowest since September 2010. Over the next five to 10 years, they project a 2.5 percent rate of price growth, after a record-low 2.3 percent in the prior month. Bloomberg News

n japan 0.4323 n UK 60.3028 n HK 6.3876 n CHINA 7.1886 n singapore 34.7189 n australia 37.1079 n EU 52.6207 n SAUDI arabia 13.2104

Source: BSP (13 January 2017 )

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PHL retraces journey toward food security Continued from A1

“These areas will be supported with hybrid-rice seeds, sufficient fertilizer and efficient irrigation system and mechanization,” he added. Under the MA 6000, the DA will identify 10 initial areas with a thousand hectares of irrigated land where the agency will plant hybrid-rice seeds. “The purpose of the [MA 6000] is to address the issues that would contribute to productivity,” he said. “It’s the existing irrigated area that we are going to utilize, we are not expanding.” The DA said it is eyeing to improve the national average rice production to 6 metric tons (MT) per hectare from the

current 3.9 MT per hectare. Citing farmers’ testimonies, Piñol said they are able to produce more than the national average yield by planting hybridrice seeds in areas with proper irrigation system and efficient farm machines.

Past

PIÑOL initially maintained the country can achieve rice self-sufficiency by 2018. This target was pinned on the back of the Rice Productivity Enhancement Program (RIPE), which would focus on distributing seeds and fertilizers to rice farmers greatly affected by El Niño. However, when the finance team of the Department of Budget and Management deleted the P18-billion allocation for Piñol’s

rice self-sufficiency program, he moved the target to 2019. Piñol further pushed back the target to 2020. “The reason my earlier proposal, the RIPE, was disapproved by the economic cluster [was] because it didn’t have a recovery program,” Piñol said. “And right now, we are looking at a recovery program.” He explained the recovery program means, “once you distribute the seeds how would you recover the cost of which in order to buy and distribute again new ones?” “That’s the only thing [that] the economic cluster wants,” Piñol said. And it seems that until today, there have been no final comprehensive guidelines yet for Piñol’s MA 6000 program. In a newspaper report, a DA official said

the implementation of the MA 6000 program might be pushed back to next year, as the agency’s budget for its rice program is not sufficient for the total cost of the MA 6000 program.

Mindanao

PIÑOL said he is keen on expanding rice output in former conflict areas in Mindanao, which is not usually hit by typhoons, in the government’s bid to achieve its rice self-sufficiency goal. Piñol said the vulnerability of traditional farming areas in Luzon to strong typhoons has made it imperative for the government to look for alternative sites for rice planting. The agriculture chief made the statement after Typhoon Nina

(international name Nock-ten) damaged crops in Regions 4A, 4B and 5 valued at P5.32 billion. Piñol said he wants to expand food production in provinces used to be torn by civil war, such as Sulu, Zamboanga and Basilan. “[There are] unexplored areas that were war-torn before but are okay now,” Piñol said. “I asked the people in Sulu and they said that, given government support, they will be to plant rice enough to supply their province and maybe even Zamboanga.” He cited Basilan and Tawi-tawi as other potential areas. “These are areas that are not threatened by climatic disturbance, which we want to explore.” To be continued

Tax perks to yield P70-B tourism investments–Tieza Continued from A1

December 6. For his part, Tieza chief operating officer lawyer Guiller Asido added: “We continue to process applications for TEZs. Those which were approved already may immediately apply for a certificate of entitlement and avail themselves of [fiscal] incentives. If we are able to designate about 12 TEZs [this] year, we are looking at about P70 billion in investments.” Among the fiscal incentives or TEZs are: ■ Six-year income-tax holiday (ITH) that may be extended for another six years; ■ As an ITH alternative, a 5-percent preferential tax on gross in-

come in lieu of national taxes except for real property tax and fees of the Tieza; ■ In lieu of ITH or the 5-percent preferential gross income tax, a net operating loss carry over (Nolco) scheme; ■ Tax-free imports on capital goods and equipment needed for Tieza-registered activities; ■ Import tax exemptions for transport equipment and spare parts needed for Tieza-registered activities; ■ Exemption from value-added tax (VAT) and excise-tax goods imported for Tieza-registered activities; ■ Tax credit equivalent to national taxes paid on local goods

and services procured by registered tourism enterprises (RTEs) for activity in TEZs, provided that input VAT will be allowed as credit against only output VAT; and ■ Tax deduction of up to 50 percent of cost of environmental protection and cultural heritage preservation activities, as well as of sustainable livelihood programs of RTEs. Asido said the agency may also decide to grant incentives to tourism businesses outside of TEZs. Said fiscal incentives were assured under Republic Act 9593, or the Tourism Act of 2009, but a revenue regulation was never issued by the Aquino administration on concerns that these incentives would further reduce government

revenue. Because these fiscal incentives were not granted to TEZs, Tieza estimated about P232.33 billion in investments into the tourism sector were foregone from 2013 to 2016. (See “BIR revenue regulation sought to stem tourism investment losses” in the BusinessMirror, September 23, 2016.) Ardent appeals by Tieza and its parent unit, the Department of Tourism (DOT), last year with the new dispensation at the Department of Finance and the BIR finally yielded the much-needed revenue regulations, assuring the further expansion of the tourism industry. Even before the BIR revenue regulations were released, Tieza

had already designated five flagship TEZs. These are San Vicente in Palawan, Rizal Park in Manila, Bucas Grande in Surigao del Sur, Mount Samat Shrine in Bataan and South Palms in Panglao, Bohol. It also approved six ordinary, private-sector-led TEZs: Ciudad de Victoria in Bulacan, Bravo Golf Resort in Dumaguete, Hijo Plantation in Davao, Queen’s Castle in Cebu, Resorts World in Parañaque and King Dome in Davao. Asido said the agency also grants nonfiscal incentives not covered by the revenue regulation. These are the employment of foreign nationals, importation of professional instruments and household effects, special inves-

tor’s resident visa, foreign-currency transactions, requisition of investment, and the lease and ownership of land. Formerly the Philippine Tourism Authority, Tieza is mandated to “designate, regulate and supervise the TEZs established under the [Tourism] Act; develop, manage and supervise tourism infrastructure projects in the country; supervise and regulate the cultural, economic and environmentally sustainable development of TEZs toward the primary objective of encouraging investments therein; and ensure strict compliance by the TEZ operator with the approved development plan;” among others.

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Monday, January 16, 2017 A3

‘Poultry output likely rose by 10% in 2016’ By Jasper Emmanuel Y. Arcalas

@jearcalas

he country’s poultry production likely expanded to 1.83 million metric tons (MMT), 10 percent higher than the 1.66 MMT recorded in 2015, according to the United Broiler Raisers Association (Ubra). “Definitely, it grew by at least 10 percent or probably more because there was no typhoon damaging the local production. Plus, the NCD [Newcastle disease] affected poultry population only in the early part of last year,” Ubra President Jose Elias Inciong told the BusinessMirror. “In the second half of the year, production really rallied because there was no typhoon and no NCD,” Inciong added. However, Inciong said there could be a supply glut this year due to growing local production. “Unless people will adjust, then there will be a glut again. The only thing that would prevent the possibility of extreme heat during the summer season,” he said. The Ubra chief earlier told the BusinessMirror that chicken output for 2016 could reach 1.284 billion heads.

Due to oversupply, Inciong said the current farm-gate price of broiler meat is still at around P60 per kilogram. “The farm-gate price at the moment is P60 and below, depending on where it is. During the holidays, the farm-gate price increased to P80 and above,” Inciong said. “However, immediately after December 25, prices collapsed again because there’s no demand anymore. Then you had a typhoon at the time, so the demand side was affected even if [Typhoon Nina] didn’t affect local production,” Inciong added. The latest data from the Philippine Statistics Authority (PSA) showed that the farm-gate price for broiler meat dropped to P75.12 per kg last September, from P80.07 recorded in August 2016. PSA data also showed that the average farm-gate price of broiler

Veterinarian Andrew Sacramento takes a look at freshly laid eggs in one of the barns at Etan’s Poultry Farm in San Isidro, Isabela. The farm supplies the city and neighboring towns with fresh eggs daily. FILE PHOTO

meat in January to September 2016 is P84.99 per kg. During the nine-month period, broiler meat recorded its highest farm-gate price in July, hitting P91.91 per kg, according to the PSA. Meanwhile, the country’s chick-

en inventory as of January 2 has reached 24,238.49 metric tons (MT), 68.47 percent higher than the 14,387.06 MT recorded a year ago, according to the latest data from the National Meat Inspection Service (NMIS).

However, the figure was 37.59 percent lower than the 38,842.05 MT chicken inventory last month. Of the inventory in the first week of January, 15,160.96 MT were locally produced. Local chicken expanded to 6,505.69 MT from

the level recorded a year ago. The remaining 9,077.53 MT were purchased abroad. The figure was 15.17 percent higher than the 7,881.37 MT of chicken imported in the same period last year.

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Monday, January 16, 2017 A5

Peza OK’s ₧125-B ecozone in Mauban, Quezon

By Catherine N. Pillas

@c_pillas29

he Philippine Economic Zone Authority (Peza) said it has given its nod to a P125-billion, mixed-use economic zone in Mauban, Quezon, which is now awaiting the approval of President Duterte.

1,500 hectares

The size of the Greater Lucena Integrated Ecozone as a “mixed use” zone. A side f rom t he a ir por t a nd s e ap or t d e v e lo p me nt , a re a s for l i g ht m a nu f ac t u r i ng i n dust r ies a nd tou r ism (possi-

bly a t heme pa rk) w i l l a lso be a l located. In addition to the 1,500-hectare area, Plaza said the ecozone developer is a lso donating 20 0 hec t a res for a “gover nment center” where a l l t hree bra nc hes of t he gover nment w i l l be located. “It’s an offer by the owner, Philip Cea, owner of F1 hotel, to the government to donate 200 hect-

ares, so that the three branches of the government will be located there,” she added. T he Gre ater Lucen a I nte grated Ecozone project will be proposed in the next meeting with Duterte. Pe z a hopes to ea se t ra f f ic i n M e t r o M a n i l a , w it h t h e possible proposed re loc at ion of m ajor gover n ment of f ices to Q ue z on.

Duterte orders troops to blast militants and their hostages P

resident Duterte said he has ordered his troops to bomb extremists who flee with their captives in a bid to stop a wave of kidnappings at sea, calling the loss of civilian lives in such an attack “collateral damage”. Duterte has previously stated that he had told his Indonesian and Malaysian counterparts their forces can blast away as they pursue militants who abduct sailors in waters where the three countries converge and bring their kidnap victims to the southern Philippines. He said in a speech late Saturday that he had given the same orders to Filipino forces. He added that he instructed the Navy and the Coast Guard that “if there are kidnappers and they’re trying to escape, bomb them all.”

“They say ‘hostages’. Sorry, collateral damage,” he said in a speech to businesspeople in Davao, his southern hometown. He added that such an approach would enable the government to get even with the ransom-seeking militants. “You can’t gain mileage for your wrongdoing, I will really have you blasted,” he said. His advice to potential victims? “So, really, don’t allow yourselves to be kidnapped.” Duterte’s remarks reflect the alarm and desperation of the Philippines, along with Malaysia and Indonesia, in halting a series of ransom kidnappings primarily by Abu Sayyaf militants and their allies along a busy waterway for regional trade. On Saturday ransom-seeking

FILE PHOTO

“

“We’ve approved the Greater Lucena Integrated Ecozone project, with an initial development cost of P125 billion. There will be an airport, a seaport and socialized housing, among the facilities,” Peza Director General Charito B. Plaza said. A ccord i ng to Pe z a , t he 1,500 -hectare project will be built by Philip Cea, chairman of F1 Hotel Manila, and is intended

Abu Sayyaf gunmen freed a South Korean captain and his Filipino

crewman who were abducted three months ago from their cargo ship.

The gunmen handed skipper Park Chul-hong and Glenn Alindajao over to Moro National Liberation Front rebels, who turned them over to Philippine officials in southern Jolo town in predominantly Muslim Sulu province. The Moro rebels, who signed a 1996 peace deal with the government, have helped negotiate the release of several hostages of the smaller but more violent Abu Sayyaf, which is blacklisted by the United States as a terrorist organization for kidnappings, beheadings and bombings. Duterte’s adviser dealing with insurgents, Jesus Dureza, said he was not aware of any ransom being paid in exchange for the freedom of the sailors. At least 27 hostages, many of them foreign crewmen,

remain in the hands of different Abu Sayyaf factions, he said. There have been persistent speculations, however, that most of the freed hostages have been ransomed off. Without a known foreign source of funds, the Abu Sayyaf has survived mostly on ransom kidnappings, extortion and other acts of banditry. A confidential Philippine government threat assessment report seen by The Associated Press last year said the militants pocketed at least P353 million ($7.3 million) from ransom kidnappings in the first six months of 2016. The militants have mostly targeted slow-moving tugboats in the busy sea bordering the southern Philippines, Malaysia and Indonesia. AP

AseanMonday

A6 Monday, January 16, 2017 • Editor: Max V. de Leon

BusinessMirror

Smallest Asean economies among Asia’s fastest growing

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Pilot killed as Thai fighter jet crashes at air show

sia’s smallest economies are growing faster than giants like China, according to the World Bank. Cambodia, Lao PDR and Myanmar will post the most rapid expansions in Asia after India from 2017 to 2019, sustaining growth rates of close to 7 percent, according to forecasts-released this week. Among the least-developed countries, the combined size of the three economies is less than $100 billion, about a third of neighbors like Singapore, Malaysia and the Philippines. Located in the Mekong region, Southeast Asia’s frontier nations are stepping up their infrastructure drive to boost growth and diversify their economies as they seek to shed their image as

the region’s backwater. Vietnam—which has transformed its economy from a mainly farming one to an exporter of electronic goods like smartphones— stands as their role model, said Eugenia Victorino, an economist at Australia & New Zealand Banking Group in Singapore. “The promise of transforming the Mekong into a manufacturing hub has a lot of potential,” Victorina said. “Vietnam provides the template for an export-led growth from agricultural. We have seen Myanmar, Laos, and Cambodia trying to imitate Vietnam’s model of luring foreign direct

investment to prop up their export capacity.” They’re counting on China, which is investing in everything from railroads to real estate in the three countries. A f ter decades of mi litar y rule, Myanmar is liberalizing its economy and adopting market reforms after a transition to democracy. China is its largest trading partner and is building a special economic zone, power plant and

deepwater seaport on the west coast. In Laos a long-delayed $5.7-billion railway from China through northern Laos officially began last month, the Global Construction Review reported. Cambodia has gained particular appeal for Chinese manufacturers seeking to relocate, which aligns with China’s strategy to export industrial capacity through initiatives, such as its One Belt, One Road program. Bloomberg News

UN human-rights envoy visits troubled Myanmar state

ITTWE, Myanmar—TheUnited Nations human-rights envoy for Myanmar arrived on Friday in tense Rakhine state, where soldiers are accused of widespread abuse of members of the Muslim ethnic Rohingya minority, including torture, rape and killing of civilians and the burning of thousands of homes. UN rapporteur Yanghee Lee began a three-day visit to western Myanmar to probe the situation in northern Rakhine, where an army crackdown has driven an estimated 65,000 people to flee across the border to Bangladesh in the past three months. The crackdown began last October after nine policemen were killed in attacks by a shadowy group along the border. The army denies any abuses, but Rohingya sympathizers say hundreds of civilians have been killed. The claim cannot be independently verified because authorities have limited access of aid workers and journalists to the area. Official figures put the death toll under 100 and don’t make clear the circumstances under which the deaths took place. The estimated 1 million Rohingya face official and social discrimination in Buddhist-majority Myanmar. Most do not have citizenship and are regarded as illegal immigrants from Bangladesh, even when their families have lived in Rakhine for generations. Communal violence in 2012 forced many to flee their homes, and more than 100,000 still live in squalid internal displacement camps. Lee is on a 12-day visit to Myanmar at the invitation of the government, during which she is to meet political and community leaders, representatives of civil society, victims of human-rights violations and members of the international community. Lee said she will present a report to the UN Human

ANGKOK — A Thai air force pilot died when his fighter jet crashed at an air show on Saturday during the country’s Children’s Day. Amateur video footage shows the JAS 39 Gripen jet maneuvering over the Hat Yai air base in southern Thailand when it suddenly lost altitude and crashed in a ball of fire

away from spectators. The Ministry of Defense was investigating the cause of the crash. Deputy Government Spokesman Werachon Sukondhapatipakerachon said Prime Minister Prayuth Chan-ocha expressed condolences to the pilot’s family. Children’s Day is usually observed with public outings at military bases. AP

Malaysian restaurant chain mulls over Singapore IPO

Malaysian restaurant chain group PappaRich has opened in 2016 its first Hong Kong outlet at the L-Square in Causeway Bay.

IN this December 2, 2016, file photo, Rohingya from Myanmar make their way in an alley at an unregistered refugee camp in Teknaf, near Cox’s Bazar, a southern coastal district about, 296 kilometers (183 miles) south of Dhaka, Bangladesh. Newly revealed video of Myanmar police beating Rohingya Muslims in northern Rakhine state has weakened months of government claims that its forces have not committed abuses in the region since a deadly insurgent attack last October. The footage has made it more difficult for the government to say at least some abuses are not happening and sown doubts into its dismissals of more grievous allegations. AP

Rights Council in March. On Friday Lee visited the Rakhine capital, Sittwe, in the southern portion of the state, where she said she was hopeful she could get permission to visit the most affected area in the north. She visited an enclave in Sittwe where 4,000 Rohingya are confined, but residents there were pessimistic that her mission would improve their situation. “We want to tell her about the difficulties we have here. We are so much in trouble. We have been living in here like in prison for almost five years,” said Tin Soe, a 46-year-old Rohingya man in the Aung Mingalar community. “In five years, there have been many things that the government

and international communities are doing, but nothing has changed for us here,” he said, adding that only Myanmar’s government could improve their conditions. “We have been living here for generations and the government keeps saying that we are not citizens of this country. It really hurts me. We should have our citizens’ rights,” he said. Forty-year-old Zaw Zaw, another Aung Mingalar resident, also questioned why nothing had changed despite several previous visits by Lee to the area. “We live here without any freedom inside this area, which is like living inside a box. We are all controlled in many different ways under the law by the government,” he said. “My

potential is wasted because I am not allowed to work anywhere.” This is Lee’s fifth mission to Myanmar. Previous visits provoked the wrath of extreme Buddhist nationalists. One, a firebrand monk named Wirathu, branded her a whore after she criticized laws on race and religion. The crisis in Rakhine state has been the biggest test for the democratically elected government of Aung San Suu Kyi since it took power last year. “We understand that the current government is also facing a lot of challenges, but as a government, they should grant our rights as citizens who were born here. This is what we are requesting,” Zaw Zaw said. AP

Malaysia to consider more steps to stabilize ringgit if needed alaysia’s central bank will consider introducing more measures to stabilize the ringgit if needed as previous steps to reduce speculation of the currency show progress, Governor Muhammad Ibrahim said. Bank Negara Malaysia could look at ways to improve liquidity if necessary, Muhammad told reporters in Kuala Lumpur on Friday. “Only if appropriate, we will introduce new measures,” the governor said. “But these new measures are not capital controls, not fixing of the ringgit, but to stabilize the

In this image captured from a video, a plume of smoke and fire rises from the site where a fighter jet crashed during an air show on January 4, in Hat Yai, southern Thailand. A Thai air force pilot died when the JAS Gripen fighter jet crashed during an air show celebrating the country’s Children’s Day. AP

ringgit. Making sure that people who want the dollar will get the dollar, people who want the ringgit will have access to it. And then to make sure that liquidity is always there in our market.” The central bank in Malaysia last November stoked fears of a return to capital controls—which were imposed during the 1998 currency crisis and had since been removed —when it clamped down on foreign banks using offshore forwards to bet against the ringgit. Last month it said it would provide greater hedging flexibility in its onshore currency

market and told exporters they should hold at least 75 percent of export proceeds in ringgit. The currency has been the hardest hit of Asian emerging markets since Donald J. Trump’s victory in the US election last November, which spurred bets of more Federal Reserve rate increases. The ringgit has lost 5.3 percent against the dollar since November 9, and breached 4.5 a dollar on January 4 for the first time since 1998, as investors continued to sell down emerging-market assets. The central bank’s currency

measures will take three to six months to show results, though initial outcomes show the ringgit has stabilized “very much,” Muhammad said. “We should not be fixated on any particular level,” Muhammad said. “It’s very important for the ringgit, once we realigned between the demand and the supply, for it to be dictated by actual demand and supply for the currency. That’s where the ringgit will stabilize, and it will find its natural level as we realign the demand and supply.” Bloomberg News

appaRich Malaysia Sdn., a food chain selling local cuisine from nasi lemak to curry laksa noodles, is considering a Singapore initial public offering (IPO) to fund expansion, people with knowledge of the matter said. The company, which opened its first restaurant in Malaysia in 2006, is targeting to achieve a valuation of at least S$200 million ($140 million) in the share sale, according to the people. It aims to conduct the offering as soon as this year, one of the people said. PappaRich, which has about 100 outlets globally, has expanded overseas in the past three years by adding locations in the US, South Korea, Taiwan and New Zealand, according to its web site. More than 1 million customers dine at PappaRich monthly, the web site shows. It also has a presence in Australia, China, Singapore and Brunei. Any deal would add to a rebound in the Singapore IPO market last year, when fund-raising surged more than fourfold to $1.7 billion, data compiled by Bloomberg show. PappaRich would follow other Southeast Asia-based restaurant chains including ABR Holdings Ltd., which operates Swensen’s ice-cream parlors, and Oldtown Bhd. in gaining a listing to boost visibility and bankroll growth. A representative for PappaRich, which is based near Kuala Lumpur, said a listing has always been a consideration, as the company considers fund-raising options to support its expansion plans. PappaRich “would certainly” expect to have a valuation in excess of S$200 million upon listing, based on comparable businesses, he said. Oldtown, which makes instant coffee and runs cafés, has risen 17 percent in Kuala Lumpur trading over the past 12 months. Shares of

Thai dessert chain After You Pcl., which raised $21 million in a Bangkok IPO last month, have surged 164 percent from their offer price. PappaRich early last year opened its first Hong Kong outlet, making a strategic move in its Asian expansion by leveraging the city’s status as a food paradise in the region. The PappaRich restaurant at the L-Square in Causeway Bay offers traditional Malaysian cuisine with a sophisticated twist, boasting genuine PappaRich ingredients flown fresh from its Malaysia headquarters. The restaurant offers, among others, branded Hainan bread, as well as the country’s famous durian cheese cake. Company officials said: “The Hong Kong outlet is a joint venture between the reputable Tang Palace (China) Holdings Ltd. and Beppu Group Ltd. With concerted efforts of the professional team and business partners in Hong Kong, we are ready to take the PappaRich brand to the next level.” Founded in 2006 in Malaysia, PappaRich has steadily grown from the home country into a franchise network comprising over 100 outlets worldwide. It has 80 outlets nationwide in Malaysia and has ventured into overseas markets, such as Australia, Mainland China, Singapore, the US, South Korea, Brunei, Indonesia, Taiwan and New Zealand since 2012. Bloomberg News

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BusinessMirror Special Feature

Monday, January 16, 2017 A7

The World BusinessMirror

Monday, January 16, 2017 • Editor: Lyn Resurreccion

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Beijing to Trump: One-China policy not negotiable

hina’s foreign ministry said its One-China policy isn’t negotiable and urged Donald J. Trump to recognize the “high sensitivity” with which it views Taiwan, a day after the president-elect hinted for the second time in a month at a reset of US-China relations.

Trump was quoted by the Wall Street Journal late on Friday as saying he would only commit to the One-China policy after assessing the progress the world’s second-largest economy makes on trade and currency issues. “The One-China principle, which is the political foundation of the China-US relations, is nonnegotiable,” Ministry of Foreign Affairs Spokesman Lu Kang said in a statement on the agency’s web site. One China is an acknowledgment that Taiwan and China are part of the same China, even if they disagree on what that means. Beijing regards it as a bedrock policy, not the bargaining chip that Trump has suggested. President Barack Obama has cautioned his successor against lightly abandoning Washington’s stance on the delicate topic. “In order to avoid disruption to the sound and steady development of the China-US relations and bilateral cooperation in key areas, we urge relevant parties in the US to fully recognize the high sensitivity of the Taiwan question, approach Taiwan-related issues with prudence and honor the commitment made by all previous US administrations of both parties on adhering to the One-China policy,” Kang said in the statement.

Currency action

The president-elect told the Wall Street Journal he isn’t prepared to declare China a currency manipulator immediately upon being sworn in on January 20. Trump threatened during his campaign to brand China a currency manipulator immediately upon taking office, and to slap 45-percent tariffs on its exports to the US. “I would talk to them first,” Trump was quoted as saying. “Certainly, they

45%

The percentage of tariffs the US threatened to slap China on its exports to the US are manipulators. But I’m not looking to do that.” Trump has questioned the US’s long-standing policy of recognizing Beijing over the government in Taiwan, and criticized China for a perceived failure to further pressure North Korea over its nuclear program. The president-elect caused concern in Beijing after a 10-minute phone call in early December with Taiwan’s President Tsai Ing-wen, the closest a Taiwanese leader has come to getting formal recognition from Washington since the US established ties with the Communist government in Beijing almost four decades ago. Trump’s pick to lead a newly formed White House National Trade Council, Peter Navarro, a University of California at Irvine economics professor, is a frequent critic of China’s trade practices.

No need for tariffs to get ‘tough’ on China

UNITED States officials can get tough on China without imposing tariffs, US Commerce Secretary Penny Pritzker said, cautioning the incoming Trump administration against stoking a trade war that could hurt the world’s two largest economies. “What I object to is the idea that we’re just going to slap a tariff on everything that we buy from a country,” Pritzker said in an interview

A front page of a Chinese newspaper with a photo of US President-elect Donald J. Trump and the headline “Outsider counter attack” is displayed at a newsstand in Beijing, China, on November 10, 2016. AP/Ng Han Guan

on Friday in her Washington office. “That’s not going to work—that leads to a trade war. I’m all for being tough when our companies are not being treated fairly, but I think we have to think about what does ‘tough’ mean so we don’t then find ourselves in a negative cycle.” The Commerce chief’s comments are at odds with President-elect Trump’s positioning on trade, which has rallied some Americans to support a more protectionist stance in an attempt to revive US manufacturing and boost domestic jobs and wages. Trump’s nominee to replace Pritzker, billionaire investor Wilbur Ross, last year co-authored a paper calling China the world’s biggest trade “cheater”. While Trump and some of his advisers have threatened tariffs on alleged trade-rule breakers, other members of the incoming administration have tried to ease fears of

US sanctions on Russia to stay for a time–‘WSJ’

resident-elect Donald J. Trump would keep sanctions imposed by the Obama administration against Russia in place “for a period of time,” he told the Wall Street Journal, adding that he’d consider lifting them once Vladimir Putin proves he can be an ally. “If you get along and if Russia is really helping us, why would anybody have sanctions if somebody’s doing some really great things?” Trump was quoted as saying during an hourlong interview with the paper a week before he is inaugurated as US president. At stake is whether Trump will take a conciliatory stance against Russia after President Barack Obama’s decision last month to hit Russian intelligence officials and agencies with sanctions for cyber attacks aimed at interfering with the 2016 presidential campaign. After 35 Russian operatives were expelled from the US, Russia’s president said his government wouldn’t retaliate because he was waiting for Trump to take office. Trump responded with a tweet in which he called Putin “very smart.”

Russia hacking

At a news conference on Wednesday, Trump acknowledged for the first time that Russia was responsible for hacking e-mail accounts of the Democratic National Committee and Hillary Clinton’s campaign chairman. He has, nonetheless, stressed that he hopes to have a better relationship with

Moscow and that he thinks there has been too much attention paid to the issue. Trump was also quoted by the newspaper as saying he would only commit to a OneChina policy after assessing the progress the world’s second-largest economy makes on trade and currency issues. The president-elect said he isn’t prepared to declare China a currency manipulator on Inauguration Day on January 20. Trump threatened during his campaign to brand China a currency manipulator immediately upon taking office, and to slap 45-percent tariffs on its exports to the US. “I would talk to them first,” Trump was quoted as saying. “Certainly, they are manipulators. But I’m not looking to do that.” Trump has questioned the US’s longstanding policy of recognizing Beijing over the government in Taiwan, and criticized China for a perceived failure to further pressure North Korea over its nuclear program. China considers the One China policy as bedrock, not the negotiating chip as Trump does. Trump has signaled he’s looking to shake up relationships with the two superpowers. He wants closer ties with Russia and says the US can work with the Kremlin to combat Islamic terrorist. He’s vowed to get tough with China. His pick to lead a newly formed White House National Trade Council, Peter Navarro, a University of California at Irvine economics professor, is a frequent and vocal critic of that country. Bloomberg News

a trade war by enunciating that the duties might only act as a bargaining chip for better deals. Trump’s personnel moves have raised concern about big policy changes. He has created two unique positions aimed toward renegotiating trade deals, installing Peter Navarro, a career critic of China trade practices, as the head of a new trade council within the White House. He also picked Jason Greenblatt, chief legal officer for Trump Organization Inc., to be a special representative for international negotiations.

intellectual-property protection, about market access, about tradesecret protection, about a level playing field for American businesses to compete,” Pritzker said. “China is no exception, and we have lots of challenges with that.” Asked about Navarro’s appointment at a regular briefing in Beijing on December 22, Chinese Ministry of Foreign Affairs Spokesman Hua Chunying said the country was paying close attention to Trump’s transition effort.

FX manipulation

“What I want to stress here is that China and the US are two big countries and have a lot of common interests,” Hua said. “Cooperation is the only correct choice for both nations.” Exactly how the bartering with China will play out under the new administration remains murky ahead of Trump’s January 20 inauguration. Some members of his

Navarro has argued that China is violating international trade rules on four fronts: intellectual property, currency manipulation, export subsidies, and worker and environmental standards. Pritzker echoes at least some of those challenges. “We have to be firm about

‘Common interests’

team have said that tariffs won’t be the first step in the process. “We want to start with carrots,” Anthony Scaramucci, the founder of SkyBridge Capital who will be an assistant to Trump in the White House, said in a December 1 interview with Bloomberg Television. “If we’re going to get some contention related to trying to make those deals fairer, so that our goods and services can leave the United States in the same proportion that they’re coming in, then the cudgel of a tariff is something that we on the administration side would be willing to impose as a sort of negotiating chip.” Projections on the impact of Trump’s economic policies also have divided forecasters at major banks. Bank of America analysts project trade tensions will provide a negative shock to the economy this year, while Deutsche Bank economists see his deregulation and tax reform lifting US growth in 2017. Bloomberg News

With oil discovery, Guyana to become a top producer

OUSTON—Guyana, the tiny English-speaking South American country, is poised to become the next big oil producer in the Western Hemisphere, attracting the attention and investment dollars of some of the biggest oil companies in the world. This week, Exxon Mobil and Hess announced the successful drilling of a deepwater exploration well that may soon confirm that the seafloor beneath Guyana’s coastal waters contains one of the richest oil and natural-gas discoveries in decades. Experts estimate that one of its offshore fields, known as Liza, could contain 1.4 billion barrels of oil mixed with natural gas, comparable to some of the larger fields drilled in South America. With a population of fewer than 1 million people, Guyana—Venezuela’s eastern neighbor on the continent’s north coast—would be able to export nearly all of the oil it produced, probably starting around 2020. The companies’ announcements came only days after the Guyanese government announced its intention to build a $500-million petroleum processing and service center on Crab Island, an enormous investment for one of the region’s poorest countries. Early rough estimates by experts of how much recoverable oil Guyana could have range to more than 4 billion barrels, which at today’s prices would be worth more than $200 billion. But the country, which currently produces little energy, sorely needs pipelines and other infrastructure to begin a major production and export effort. “It’s not often that a country goes from 0 to 60 so fast like this,” said Matt Blomerth, head of Latin American Upstream Research for Wood Mackenzie, a consultancy firm. Industry excitement over Guyana was stirred by

a widely distributed report on Friday by the firm that said, “Guyana is rapidly joining the ranks of serious oil and gas players.” The discovery is one more indication that South America is becoming a critical supplier to world oil markets. Brazil and Colombia are already major producers, and Argentina took a big step in the same direction on Tuesday when Chevron and several other international oil companies pledged to invest at least $5 billion this year and billions more in the years to come in the shale field in Patagonia known as Vaca Muerta, or Dead Cow. Neither Exxon Mobil nor Hess would estimate how much oil was found in a field called Payara, a few miles from the well drilled by Exxon Mobil in the Liza field. More tests are to be done. The Payara field is part of a block of 6.6 million acres that Exxon Mobil is exploring with Hess Guyana Exploration and CNOOC Nexen Petroleum Guyana, a Chinese-owned company. “This important discovery further establishes the area as a significant exploration province,” Steve Greenlee, president of Exxon Mobil Exploration Co., said in a statement. John B. Hess, Hess chief executive, said, “We believe that the resources recently discovered are significant.” With Exxon Mobil’s global fields aging and its new interests in Russia frozen by US sanctions, the discoveries in Guyana have the potential to add significant reserves to the company’s holdings. Rex W. Tillerson, the former Exxon Mobil chief executive, was scheduled to travel to Guyana to meet with its president, David A. Granger, but the trip was canceled when he was nominated to become secretary of State. But for Hess, which has much smaller reserves

than Exxon Mobil, Guyana is a far bigger bet with bigger potential gains. Hess has announced an aggressive $2.25-billion exploration and production budget for this year, an 18-percent increase from 2016. Of that, roughly $475 million will go to developing the fields in Guyana. Exxon Mobil has not reported what it will invest, but experts estimate the amount will easily surpass $500 million. The company so far has drilled five explorations wells off Guyana, only one of which was dry. Exxon Mobil officials stressed that the Liza and Payara fields are close to each other but are not connected, suggesting there may be more fields in the vast, unexplored areas of Guyana’s offshore waters. “We are encouraged to find a second field that tells us that Liza was not a one-hit wonder,” said Alan Jeffers, an Exxon Mobil spokesman. Oil companies have explored only two of roughly 20 potential fields offshore. Some of those fields are in waters claimed by Venezuela. Analysts have compared Guyana’s potential to that of Angola, a member of the Organization of the Petroleum Exporting Countries that is the second-largest oil producer in sub-Saharan Africa after Nigeria. The growing Guyana exploration effort is part of a slow global recovery of the oil industry, which was hobbled by a collapse in oil prices. After rising above $100 a barrel in recent years, prices fell below $30 a year ago and now stand at just over $50. Industrywide, exploration and production investments are expected to rise 3 percent this year over depressed 2016 levels, to roughly $450 billion. But with technological improvements and falling production costs in recent years, more oil can be produced at a lower expense. New York Times News Service

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Merkel warns of ‘protectionist tendencies’

hancellor Angela Merkel said she’ll try to encourage Presidentelect Donald J. Trump to join other nations to address the global economy as she warned against the looming risk of protectionism this year. As Germany takes the chairmanship of the Group of 20 (G20) advanced industrial nations, Merkel said it was the G20’s commitment to finding a common solution that rescued the world from the financial crisis in the last decade. She said her government “will of course seek out discussions” with Trump in that context. “My firm conviction is that we have more advantages in partnership, when we act together, than when all of us try to solve our problems on our own,” Merkel told reporters at a party meeting in the western German region of Saarland on Saturday. The German leader said her advisers were in contact with Trump’s staff and that no meeting was planned before Inauguration Day, January 20, and the two leaders could see each other at the Group of Seven meeting in Italy in May and the G20 summit in Hamburg in July. “If there’s anything beyond that then we will announce that at the appropriate time,” Merkel said. Trump will take office with an automatically fraught relationship with Merkel, whose handling of the region’s refugee crisis he called “insane” during the campaign—predicting that she wouldn’t be reelected. Trump has also denounced global trade agreements that Merkel has embraced throughout her political career. Bloomberg News

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Trump’s talks with deal-making CEOs rattle antitrust lawyers

T wasn’t a surprise when Donald J. Trump took the opportunity during his January 11 press conference to angrily accuse CNN of spreading fake news. Throughout the campaign, Trump had complained the cable network was being unfair to him—and at one point vowed that as president, he would block AT&T Inc.’s proposed $85.4-billion merger with CNN’s parent, Time Warner Inc. It was surprising, though, when AT&T CEO Randall Stephenson turned up at Trump Tower the next day. People familiar with the meeting said beforehand that the CEO and president-elect would discuss the Time Warner deal. Afterward, both AT&T and Trump aides said the topic didn’t come up and the two just talked about job creation. Even so, a closed-door meeting between Trump and Stephenson set off alarms inside the US Justice Department, which is

currently reviewing the merger to make sure it won’t violate monopoly laws by creating too much media concentration. The attorneys in the department’s antitrust division are usually given a wide berth to render an independent judgment based on the merits and the law—free even from the appearance of political pressure from above. “It is highly unusual for a president or president-elect to meet with a CEO who has a pending merger under review,” said Spencer

$85.4B

The amount involved in the proposed merger of AT&T Inc. and Time Warner Inc.

Weber Waller, a law professor at Loyola University Chicago and a former Justice Department attorney.

Delicate balance

There has always been a delicate balance between the Justice Department and the president. He appoints its leaders but isn’t supposed to get in the way of its work to preserve public confidence that their decisions aren’t influenced by politics, lobbying or the whims of the president. Former enforcers at the antitrust division say tensions with the White House over merger reviews are virtually unheard of. Justice Department lawyers are worried about whether the new administration will honor their independence, said a person familiar with the department’s thinking. At least once in the past, a president did intervene in a merger decision. In The Passage of Power, author

Robert Caro recounted how Lyndon Johnson used a pending Houston bank merger to obtain a written promise that The Houston Chronicle, which had been critical of him, would support him while he was in office. The newspaper’s president was also the president of one of the banks involved in the merger. Johnson got the letter of support he sought. The deal was approved, Caro wrote.

Antitrust laws

IT wouldn’t be illegal for a president to ask the attorney general to find a way to block a deal, as long as it’s done within the bounds of antitrust laws. Any intervention would raise questions about whether the decision was made for political or personal gain, said Jonathan Baker, a law professor at American University and former director of the US Federal Trade Commission’s economics bureau under a Democratic administration. Decisions made for political reasons can weaken the economy if antitrust procedures are used to squelch competitors, Baker said. If Trump does want to block the merger, the Justice Department could sue to stop the transaction. But to succeed it would have to persuade a judge that the deal would threaten

competition. That could be tough in the AT&T case because the company isn’t buying a direct competitor.

Bayer, Monsanto

Since his election, Trump has also met with executives from Bayer AG and Monsanto Co., which are awaiting Justice Department approval of their proposed $66-billion merger. That deal, which would create a seed and chemicals giant, has raised concerns about reduced choice for farmers. Wednesday’s meeting between Trump and the companies’ CEOs covered the deal as part of a conversation about the future of agriculture and the need for innovation. The talk was “productive,” Monsanto said in a statement on Wednesday. Bayer said it is looking forward to working with regulators over a deal it said will unite complementary business and allow the new company to better serve US farmers. Trump hasn’t said whether he favors or opposes that deal. “There are established procedures here. It’s called due process,” said Claude Barfield, a trade policy scholar at the conservative American Enterprise Institute in Washington. “You ought not to have this kind of ex-parte, random intervention.” Bloomberg News

A10 Monday, January 16, 2017

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Rising gadget mountain in Asia threatens health, environment W

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‘All talk, no action,’ Trump says in attack on rights icon Lewis

The owner of a used electronic goods stall sits as he waits for customers at his shop in the outskirts of Jakarta, Indonesia. The waste from discarded electronic gadgets and appliances has increased by two-thirds in East Asia over five years, posing a growing threat to health and the environment unless proper disposal becomes the norm. AP/Tatan Syuflana

AKARTA, Indonesia—The waste from discarded electronic gadgets and electrical appliances has reached severe levels in East Asia, posing a growing threat to health and the environment unless safe disposal becomes the norm.

China was the biggest culprit with its electronic waste more than doubling, according to a new study by the United Nations University. But nearly every country in the region had massive increases between 2010 and 2015, including those least equipped to deal with the growing mountain of discarded smartphones, computers, TVs, air conditioners and other goods. On average, electronic waste in the 12 countries in the study had increased by nearly two-thirds in the five years, totaling 12.3 million tons in 2015 alone. Rising incomes in Asia, burgeoning populations of young adults, rapid obsolescence of products due to technological innovation and changes in fashion, on top of illegal global trade in

12.3 million tons The volume of electronic waste in the 12 countries in East Asia in 2015 waste, are among factors driving the increases. “Consumers in Asia now replace their gadgets more frequently. In addition, many products are designed for low-cost production, but not necessarily repair, refurbishment or easy recycling,” said the study. It urges governments to enact specific laws for management of electronic waste or rigorously enforce existing legislation. Only South Korea, Taiwan and

Japan have long established recycling systems based on laws introduced in the 1990s. Open dumping of lead- and mercury-laden components, open burning of plastics to release encased copper and unsafe backyard operations to extract precious metals are the norm in most countries, including Indonesia, Thailand and Cambodia, which also lack laws governing the treatment of electronic and electrical waste. The study said open burning and unsafe recycling is associated with a slew of health problems for workers and communities near recycling operations. They include infertility, childhood development problems, impaired lung function, liver and kidney damage, inheritable genetic damage and mental health problems. Backyard recyclers are after gold, silver, palladium and copper, mainly from printed circuit boards, but the crude acid bath extraction process releases toxic fumes and is also inefficient, recovering only a portion of the valuable material. Asia as a whole is the biggest market for electronics and appliances, accounting for nearly half of global sales by volume, and produces the most waste. Guiyu, a heavily polluted rural

town in China that specializes in dismantling consumer electronics, some of it exported from rich countries, has become synonymous with the costs of a throwaway high-tech world. China has cleaned up Guiyu and other centers like it but the Basel Action Network, which brought Guiyu to international attention, said most of the dangerous practices continue in Guiyu albeit concentrated within a new industrial park on its outskirts. Ruediger Kuehr, one of the study's authors, said the amount of waste being generated is higher than governments estimate, partly because of their narrower definitions, and should be a wake-up call to policymakers and consumers. “We are all benefiting from the luxury of these electrical and electronic products to a certain extent, it makes our lives easier, sometimes more complicated,” he said. “However if we want to continue like this we must be reusing the resources contained in electronic and electrical equipment.” A smartphone, for example, uses more than half the elements in the periodic table, some of which are very rare, and in the longer-run will be exhausted without recycling, said Kuehr. AP

Iraq makes swift territorial gains against IS in Mosul

OSUL, Iraq—Iraqi forces have won a string of swift territorial gains in Mosul in the fight against the Islamic State (IS) group after months of slow progress, with a senior officer on Saturday laying claim to a cluster of buildings inside Mosul University and another edge of a bridge. Iraqi forces now control the eastern sides of three of the city’s five bridges that span the Tigris River connecting Mosul’s east to west. Warplanes from the US-led coalition bombed the city’s bridges late last year in an effort to isolate IS fighters in the city’s east by disrupting resupply routes. At Mosul University, senior commanders said Iraqi forces had secured more than half of the campus on Saturday, amid stiff resistance, but clashes were ongoing into the afternoon. Iraqi forces entered the university from the southeast on Friday morning and by nightfall had secured

a handful of buildings, Brig. Gen. Haider Fadhil and Lt. Gen. AbdulWahab al-Saadi said on a tour of the university on Saturday. “We watched all the IS fighters gather in that building, so we blew it up,” said special forces Sgt. Maj. Haytham Ghani pointing to one of the blackened technical college buildings where charred desks could be seen inside. “You can still see some of their corpses.” Thick clouds of black smoke rose from the middle of the sprawling complex on Saturday morning. By afternoon, clashes had intensified with volleys of sniper and mortar fire targeting the advancing Iraqi forces. Convoys of Iraqi Humvees snaked through the campus, pausing for artillery and air strikes to clear snipers perched within classrooms, dormitories and behind the trees that line the campus streets. IS fighters overran Mosul in the summer of 2014, announcing from there their self-styled “caliphate” af-

ter taking a large swath of Iraq and Syria in a lightning surge. Access to the city’s central bank, a large taxable civilian population and nearby oilfields quickly made IS the world’s wealthiest terrorist group. Yet, even as a punishing campaign of US-led coalition air strikes has pushed the militants underground, IS leaders continued to use Mosul as a key logistical hub for planning meetings. If recaptured by the Iraqi forces, IS territory in Iraq that once stretched across a third of the country would be reduced to small pockets in the north and west that troops will likely be able to mop up relatively quickly. The massive operation to retake Mosul from IS was launched last October. Since then Iraqi forces have slowly clawed back more than a third of the city. IS maintains has tight control of the city’s western half where Iraqi forces will likely encounter another wave of heavy IS resistance.

The west of the city is home to some of Mosul’s densest neighborhoods and an estimated 700,000 civilians. As Iraqi forces have closed in on the Tigris that roughly divides Mosul into eastern and western halves, their pace has quickened. IS defenses in the city’s east appear to be thinning and unlike in the surrounding neighborhoods, Iraqi officers said they believe Mosul University and recently retaken government buildings are largely empty of civilians—allowing them to use air cover more liberally. Iraqi soldiers at Mosul University said while they were still coming under heavy small arms fire, IS resistance was significantly less than they faced during the first weeks of the Mosul operation. “We were targeted with only four car bombs where before [IS] would send 20 in one day,” special forces Lt. Zain al-Abadeen said. “And they aren’t armored like before, they’re just using civilian cars.” AP

ASHINGTON—On Friday Rep. John Lewis, Democrat-Georgia, declared that he did not view Donald J. Trump as a “legitimate president”. Lewis, an icon of the civil-rights movement, said he planned to boycott the inauguration, the first he will skip in three decades. On Saturday Trump hit back. “Cong ressman John L ew is should spend more time on fixing and helping his district, which is in horrible shape and falling apart [not to mention crime infested] rather than falsely complaining about the election results,” Trump said in a pair of early morning Twitter posts. “All talk, talk, talk—no action or results,” he added. “Sad!” While some questioned Lewis’s assertion, many others expressed indignation about Trump’s outburst, pointing out the unseemliness of attacking a civil-rights leader on the eve of Martin Luther King Jr. Day. Lewis was one of the original Freedom Riders, beaten by police officers while marching from Selma to Montgomery in Alabama. Others ridiculed Trump’s characterization of Lewis’s district, which is majority African-American and encompasses three-quarters of Atlanta, as “horrible,” “falling apart” and “crime infested.” In fact, Georgia’s 5th Congressional District includes parts of wealthy areas like Buckhead; the world’s busiest airport, Hartsfield-Jackson; the Centers for Disease Control and Prevention; and the Georgia Institute of Technology. Some pointed out that fighting with Lewis diverted attention from a Senate investigation, announced the day before, that will look at possible contacts between Trump’s campaign team and Russia. In addition, Trump’s poll numbers have slipped into uncharted depths for an incoming president, with a Gallup poll released on Friday finding that about half of Americans disapprove of Trump’s transition effort. Trump’s feud with Lewis carried echoes of his attacks on Khizr and Ghazala Khan, the Pakistani-

American parents of a US soldier killed in Iraq, after Khizr Khan spoke out against Trump at the Democratic National Convention. Those attacks were widely viewed to have backfired, and Trump later modulated his words about the Khans. Trump himself has experience questioning a president’s legitimacy. He was instrumental in sowing doubts about President Barack Obama’s birthplace. Lewis, who is 76 and was first elected to Congress in 1987, is one of the few genuinely historic figures on Capitol Hill, revered by Democrats and Republicans alike. Allies of Sen. Jeff Sessions, Republican-A labama, Trump’s nominee for attorney general, circulated pictures of him linking arms with Lewis at the 50th anniversary of the Selma march to fend off accusations that Sessions was a racist. Nevertheless, Lewis testified against Sessions, declaring, “We need someone as attorney general who’s going to look out for all of us, and not just some of us.” A few critics, including David Axelrod, a former senior adviser to Obama, said they disagreed w it h L ew is’s st atement t h at Trump was not legitimate, which he made in an interview with Chuck Todd of NBC News and which will be broadcast on Meet the Press on Sunday. Still, Axelrod said of Lewis: “I honor the man he is. Honesty; integrity; courage—these are qualities you can’t buy.” In his interview with Todd, Lewis said he believed that the Russians had delivered the election to Trump. “You know, I believe in forgiveness,” he said. “I believe in trying to work with people. It will be hard. It’s going to be very difficult. I don’t see this president-elect as a legitimate president.” Lewis is one of a handful of Democratic members of Congress who have announced that they will boycott the inauguration on Friday. Others include Barbara Lee of California, Earl Blumenauer of Oregon, Katherine Clark of Massachusetts and Luis Gutiérrez of Illinois. New York Times News Service

Bahrain executes 3 convicted in deadly police bombing

UBAI, United Arab Emirates—Bahraini authorities put to death three men found guilty of a deadly attack on police on Sunday, the kingdom’s first executions since an Arab Springinspired uprising rocked the country in 2011. The public prosecution said the death sentences were carried out by firing squad early in the day. The executions were the first in the US-allied nation since 2010 and followed a spike in protests in solidarity with the convicted men and clashes between activists and police the previous day. Abbas al-Samea, Sami Mushaima and Ali al-Signace were found guilty in 2015 of killing two Bahraini and an Emirati policeman in a 2014 bomb attack. Their death sentences were upheld by a Bahraini court last week. Bahrain is a tiny island nation off the coast of Saudi Arabia that hosts the US Navy’s 5th Fleet, which patrols the waters around the Arabian Peninsula and is the naval counterweight to nearby Iran. Government forces crushed the 2011 uprising with help from allies Saudi Arabia and the United Arab Emirates, but the country continues to face low-level unrest led by

a majority Shiite population that feels marginalized by the Sunni monarchy. Bahrain’s last execution was of a Bangladeshi man in 2010, though a number of death sentences have been issued since then. Government opponents see Sunday’s executions as politically motivated, leading hundreds to take to the streets on Saturday in solidarity with the condemned men, as rumors spread that their executions were imminent. Images shared on social media showed some activists blocking roads with burning debris and hurling petrol bombs in clashes with the police. One police officer was injured when several people shot at a police patrol in Bani Jamra, west of the capital Manama, the Interior Ministry said on Sunday. It gave no further details. The Ashtar Brigade, a Shiite militant group that analysts say has claimed some 20 bombings in Bahrain since 2013, claimed responsibility for the attack on the police officer on social media. The Associated Press could not immediately verify the post, though it came in a forum often used by the group. “We announce through this statement that all options are open and all targets are monitored,” the group said. AP

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Monday, January 16, 2017 A11

Ringling Bros. circus to close forever in May

LLENTON, Florida—After 146 years, the curtain is coming down on “The Greatest Show on Earth”. The owner of the Ringling Bros. and Barnum and Bailey Circus told The Associated Press that the show would close forever in May.

The iconic American spectacle was felled by a variety of factors, company executives say. Declining attendance combined with high operating costs, along with changing public tastes and prolonged battles with animal-rights groups all contributed to its demise. “There isn’t any one thing,” said Kenneth Feld, chairman and CEO of Feld Entertainment. “This has been a very difficult decision for me and for the entire family.” The company broke the news to circus employees on Saturday night after shows in Orlando and Miami. Ringling Bros. has two touring circuses this season and will perform 30 shows between now and May. Major stops include Atlanta,

Washington, Philadelphia, Boston and Brooklyn. The final shows will be in Providence, Rhode Island, on May 7 and in Uniondale, New York, at the Nassau County Coliseum on May 21. The circus, with its exotic animals, flashy costumes and deathdefying acrobats, has been a staple of entertainment in the United States since the mid-1800s. Phineas Taylor Barnum made a traveling spectacle of animals and human oddities popular, while the five Ringling brothers performed juggling acts and skits from their home base in Wisconsin. Eventually, they merged and the modern circus was born. The sprawling troupes traveled

A Ringling Bros. and Barnum and Bailey clown does a somersault during a performance on Saturday in Orlando, Florida. The Ringling Bros. and Barnum and Bailey Circus will end the “The Greatest Show on Earth” in May, following a 146-year run of performances. AP/Chris O’Meara

around America by train, wowing audiences with the sheer scale of entertainment and exotic animals. By midcentury, the circus was routine, wholesome family entertainment. But as the 20th century went on, kids became less and less enthralled. Movies, television, video games and the Internet captured young minds. The circus didn’t have

savvy product merchandising tieins or Saturday morning cartoons to shore up its image. “The competitor in many ways is time,” said Feld, adding that transporting the show by rail and other circus quirks—such as providing a traveling school for performers’ children—are throwbacks to another era. “It’s a different model

that we can’t see how it works in today’s world to justify and maintain an affordable ticket price. So you’ve got all these things working against it.” The Feld family bought the Ringling circus in 1967. The show was just under three hours then. Today, the show is two hours and seven minutes, with the longest seg-

ment—a tiger act—clocking in at 12 minutes. “Try getting a 3- or 4-year-old today to sit for 12 minutes,” he said. Feld and his daughter Juliette Feld, who is the company’s chief operating officer, acknowledged another reality that led to the closing, and it was the one thing that initially drew millions to the show: the animals. Ringling has been targeted by activists who say forcing animals to perform is cruel and unnecessary. People for the Ethical Treatment of Animals (Peta), a longtime opponent of the circus, wasted no time in claiming victory. “After 36 years of Peta protests, which have awoken the world to the plight of animals in captivity, Peta heralds the end of what has been the saddest show on earth for wild animals, and asks all other animal circuses to follow suit, as this is a sign of changing times,” Ingrid Newkirk, president of Peta, wrote in a statement. Wayne Pacelle, president and CEO of The Humane Society of the United States, acknowledged the move was “bittersweet” for the Felds but said: “I applaud their decision to move away from an institution grounded on inherently inhumane wild animal acts.” AP

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A12 Monday, January 16, 2017

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

Environmental protection, conservation mark ‘change’ under Duterte admin’s first 6 months

By Jonathan L. Mayuga

@jonlmayuga

he year 2016 saw the country witnessing a major policy shift, leaning toward environmental protection vis-à-vis natural-resource exploitation.

President Duterte, the country’s 16th president, made several tough policy pronouncements— including the launching of an allout war against large-scale mining that causes massive destruction of the environment—during the first six months of his administration in the last half of 2016. Finally, honoring the Paris Agreement—after he earlier called it “stupid” and “absurd”—Duterte designated environment advocate Regina Paz L. Lopez as secretary of the Department of Environment and Natural Resources (DENR).

Lopez: Public service, common good

AS new DENR chief, Lopez declared her policy to promote integrity, public service and the common good, which, she said, will be the key deciding factors for any decision under her watch. Lopez emphasized the need for the agency to be pro-active and undertake policies and programs, which will ensure that the environment is protected and that natural resources are utilized sustainably. “ T he DENR w il l be a proactive and strateg ic reg u lator y a genc y t h at w i l l en able t he converge nce of v a r iou s se ctors so that they may implement strateg ies that promote area development,” Lopez, said when she took her oath as DENR secretar y in Ju ly 2016. She also declared the need to create more space for the participation of civil society, vowing to put in place mechanisms that will guarantee the meaningful

10 The number of mining companies whose operations were suspended

engagement of the Church, environment, non-governmental organizations, the youth, farmers and fishermen. Under her watch, Lopez vowed that the main thrusts of the DENR are institutiona l refor m and environmental governance, community empowerment, rational minerals management, stronger biodiversity protection, proper ecological solid-waste management and efficient interagency collaboration toward clean air, clean water and transformative climate-change policies.

Mining audit

Lopez’s per for mance at the DENR was marked by the suspension of large-scale mining operations for their failure to meet environmental standards. Taking the cue from Duterte, Lopez issued an order for an audit of all operating mines as soon as she was sworn into office. The new mining-audit criteria

Environment Secretary Regina Paz L. Lopez (center) is flanked by key members of the Cabinet, as they launch Task Force ng Kalikasan in August 2016. File photo

integrated social, environmental and biodiversity considerations on top of technical or physical aspects of operations. As part of the audit, the DENR suspended 10 mining operations, whi le 20 ot hers were issued show-cause orders. Lopez has also issued an order making civil-society organizations and community-based groups part of the audit process, which triggered howls of protest from mining’s big players under the Chamber of Mines of the Philippines (COMP). The COMP said Lopez focuses too much on large-scale mining, while being lax or lenient on smallscale mining operating illegally and without paying correct taxes to the government.

ECCs review

The new DENR chief also ordered a review of over 800 environmental compliance certificates (ECCs). Lopez said the policy is important to ensure that development projects would not adversely affect the environment and cause people to suffer.

As part of the review, the DENR canceled the ECCs of six mining companies and a property developer, which intended to build a housing project within the La Mesa Watershed. Lopez also issued show-cause orders to 11 companies with the threat of having their ECCs canceled. In issuing a show-cause order to Century Properties for its housing project in the La Mesa Watershed, Lopez declared watersheds “off-limits” to development projects, particularly housing, to preserve the integrity of the environment and the country’s precious water resources. She said the La Mesa Watershed is important to the survival of 12 million people living in the National Capital Region, the same way that watersheds in other areas provide a very important economic resource to the people. Lopez wants to develop areas as ecotourism site to maximize the economic services a healthy ecology provides to the community, more than the exploitation of natural resources.

‘Biodiversity is gold’

In integrating biodiversity as part of the mining audit criteria, Lopez declared protected areas as offlimits to development projects, particularly mining, to ensure the protection and conservation of the country’s rich biodiversity. Several mineral-production sharing agreements (MPSAs) issued by the government to mining companies are within or partly covered by protected areas, or areas set aside for conservation. The government issued the MPSAs long ahead of the protected area declarations. Lopez said “biodiversity is gold”, and as such should be protected against destructive development projects.

Moratorium on fish-cage operation

Lopez announced a one-year moratorium on fish-cage operation within the Laguna de Bay starting 2017, vowing not to renew business permits for the operation of fish cages in the country’s largest freshwater lake as part of the plan to decongest the lake. Around 13,000 hectares of the

Antifracking movement alarmed at Trump’s focus on fossil fuels L ITTLE ROCK, Arkansas—Earl Hatley, a descendant of the Cherokee/Delaware tribe, has witnessed the consequences of using hydraulic fracturing, or “fracking,” on his native land to produce shale gas. “Fracking is harmful to water supplies, wildlife and property values. It has caused earthquakes where there were none. Since 2007, it began to tremble more and more near the wells. I can smell the foul emissions, which make me sick,” the founder of Local Environmental Action Demanded (LEAD), a non-governmental organization based in Oklahoma, told Inter Press Service (IPS). Hatley has property in Payne, Oklahoma, in the Midwest, which he says he cannot visit anymore because of the toxic emissions from the wells. “The oil and and gas industry flares their escaping gas and also do not monitor leaks, as there are no regulations in Oklahoma demanding they do. We had the opportunity to test a few wells and found all of them were bad,” he said. In the state of Oklahoma there are about 50,000 active natural-gas wells, of which some 4,000 use fracking. At least 200 of them are in Payne. With similar scenarios in other states, the antifracking movement in the US is especially worried about what Presidentelect Donald J. Trump will do after he takes office on January 20, since he pledged to give a boost to the fossil-fuel industry, despite its impact on global warming.

The United States is the country that produces the largest quantities of shale oil and gas, which has made it the main global producer of fossil fuels, ranking first in gas extraction and third in oil. Trump “is sending signals of the support the industry will receive, which will exacerbate the already-known impacts of fracking, such as water pollution and methane emissions,” Argentine activist Daniel Taillant, head of the nongovernmental Center for Human Rights and Environment (CHRE), told IPS during a workshop on fracking in the Americas, held in Little Rock, the capital of the southern state of Arkansas. Natural gas trapped in underground shale rock is released by the process of drilling and injecting fluid into the ground at high pressure, which fractures the rocks. Fracking requires large amounts of water and chemical additives, some of which are toxic. Drilling and horizontal fracking generate enormous quantities of waste fluid. The waste liquid contains dissolved chemicals and other pollutants that need to be treated for recycling, and methane emissions, which pollutes more than carbon dioxide, the main culprit in global warming. Numerous studies have confirmed the damage fracking causes to water, air and the landscape, and how it triggers seismic activity. For the fracking industry, good

times will return when Trump is sworn in. Last May he launched a plan for the first 100 days of his administration, which included giving a strong boost to the sector, despite the denounced environmental, social and economic impacts. The program includes the removal of all barriers to energy production, including fossil fuels, natural gas, oil and “clean coal”, valued in the document at 50 trillion dollars, in what it calls an “energy revolution” destined to produce “vast new wealth.” In addition, the president-elect promised to eliminate existing regulatory barriers on fossil fuels and promote the development of “vital energy infrastructure projects,” such as oil and gas pipelines. Data from the US Energy Information Administration (EIA) show that, of the daily US production of over nine million barrels of gas and oil equivalent, 51 percent were extracted in 2015 by fracking, in spite of the collapse in international prices this year. The cost of extracting a barrel of oil by fracking is at least $65. Apart from Trump’s promises, the gradual rise in prices as a consequence of the reduction in production by the Organization of the Petroleum Exporting Countries since January, has encouraged the sector to continue to extract. The growing use of fracking has sparked lawsuits over its effects and scientific

Extraordinary natural, environmental attractions draw luxury travelers

ore than 15 awards and citations we re co n fe r re d i n 2 0 1 6 by prestigious international and local organizations, led by Condé Nast Traveler and the World Travel Awards, to El Nido Resorts, a group of island resorts in Palawan. According to El Nido Resorts Marketing Director Joey Bernardino, the awards mostly focus on the pristine surroundings of the four island resorts and collective business and social practices that have been adopted to sustain them. “The achievements won collectively and individually by Apulit, Lagen, Miniloc and Pangulasian [the four El Nido Resorts named after the islands that host them] appear to also be encouraging other Philippine resorts to work on protecting the naturebased attractions that bring them business,” according to Bernardino, who has seen a marked increase over the past five years in the

number of Philippine entries seeking travel, environmental and sustainability awards. The awards come at the heels of other similar awards won since the start of the previous decade. “Such awards emphasize a strong global trend toward destinations with extraordinary natural attractions and the preference of travelers to see these attractions and the communities around them cared for responsibly,” he said. The recognitions reaped by El Nido Resorts include Asia’s Responsible Tourism Award by the World Travel Awards; Southeast Asia’s and World’s Best Beach or Coastal Boutique Hotel by Boutique Hotel Awards; Best in the Philippines, Best Hidden Gem and Best for Outdoor Adventure and Activities by Spafinder Wellness 365, among others. E l N i d o R e s o r t s w a s a l s o g i ve n special citations in 2016 by the Asean Corporate Sustainability Summit,

lake’s surface are now covered by large fish cages and fish pens, exceeding the biological carrying capacity of the lake, which is 10 percent, or approximately 9,000 hectares. She said some fish-cage operators have been issued permits to operate areas covering 40 hectares up to 50 hectares, explaining why fish cages have mushroomed and exceeded its carrying capacity. The DENR chief wants the owners of fish cages and fishpens to harvest their remaining stocks and voluntarily dismantle their structures to allow the lake to recover from decades of environmental degradation. This, she said, would also allow fishermen to catch fish in open waters. She also promised to prioritize small fishermen in issuing business permit for fish cages and fish pens over that of companies and rich and moneyed individuals who have been raking profit from the lake’s bounty for decades.

‘For the common good’

Lopez justifies her every decision by saying the country cannot establish an economy based on people’s suffering. She said the people in the communities should benefit, first and foremost, from the country’s natural resources more than business interests. From the start, leaders of environmental groups welcomed Lopez’s appointment to the DENR. However, her appointment is ex pected to have rough sailing under the scr utiny of the power f u l Commission on Appointments (C A). Lopez has been bypassed twice already by the CA, which observers believe is because of her uncompromising stand against irresponsible mining. R e a p p o i nt e d b y D u t e r t e , Lopez vowed to continue the campaign against irresponsible mining and champion the fight against dirty coal, starting with t he rat if icat ion of t he Par is Agreement—which Duterte had earlier expressed reservation of but later changed his mind and promised to uphold. CEO Asia, the Philippine Depar tment of Tourism and TripAdvisor. El Nido Resorts’s global awards dovetail with the marked preference of high-end travelers today for natural attractions and wideopen spaces “served up as unique and smoothly executed experiences,” observed Javi Hernandez, COO of El Nido Resorts. According to studies cited by MyTravelResearch.com, nature helps replenish the energy levels of these travelers, who are also heav y users of technology and seek to escape the “hustle and bustle” of their pressureladen environments. The beeline for such attractions is one of a number of key trends driving luxury travel up to 2020 and beyond. Another trend revolves around travelers realizing that “destinations that have a lighter impact on the earth and a greater one on wider wealth creation” are more desirable, reports the same study. In fact, El Nido Resorts is singled out by the study as a leading Asia-Pacific resort destination in its socioeconomic impact to the local community. More than 95 percent of all employees in Apulit, Lagen, Miniloc and Pangulasian are from Palawan, and include many families with second-generation El Nido Resorts employees. “But we shouldn’t forget some of the constants” that drive the luxury market, the study said. Experiences need to be “best in class and ideally unique.” Moreover, “seamless service should characterize every part of the experience.... The service should be caring, but seem effortless, smooth and natural.” Consequently, El Nido Resorts annually reviews programs to maintain its guest-satisfaction rate, Bernardino disclosed. The high-end luxury market expects no less.

Biodiversity Monday BusinessMirror

Asean Champions of Biodiversity Media Category 2014

Monday, January 16, 2017 A13

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

An assortment of fish and other species swim around a group of corals in the waters of Bohol. Stephanie Tumampos

Cancun commitments to boost biodiversity

By Jonathan L. Mayuga

@jonlmayuga

he global effort to protect and conserve biodiversity got a much-needed boost during the United Nations (UN) Biodiversity Conference in December 2016 in Cancun, Mexico.

The conference resulted in significant commitments for action on biodiversity, including agreements to integrate biodiversity in forestry, fisheries, agriculture and tourism sectors, said Director Theresa Mundita Lim of the Biodiversity Management Bureau (BMB) of Department of Environment and Natural Resources (DENR). “The decisions and agreements highlight the recognition of the role of biodiversity through integration in four thematic areas— forestry, fisheries, agriculture and tourism,” said Lim, a member of the Philippine delegation in the two-week event. Almost 6,400 delegates from country-parties, observer-countries and international organizations took part in the conference and attended the 13th Meeting of the Conference of the Parties to the Convention on Biological Diversity (COP 13). A total of 37 decisions were finalized during the COP 13 meeting. A member of the Convention on Biological Diversity (CBD), the Philippines is committed to pursuing the agreements forged during the conference.

International treaty

The CBD is a UN treaty devoted to promoting the conservation, sustainable use and the fair and equitable sharing of benefits from the utilization of biodiversity worldwide, with 194 countries as parties to the international agreement. COP 13 aims to negotiate agreements and commitments that give impulse to the conservation and sustainable use of biodiversity, as well as the implementation of the Strategic Plan for Biodiversity 2011-2020 and the Aichi Biodiversity Targets.

6,400

The number of delegates to the United Nations Biodiversity Conference in Cancun, Mexico, in December 2016

With the central theme, “Mainstreaming Biodiversity”, COP 13 was composed of different simultaneous events, exhibitions, presentations, fairs and fora. The integration implies that biodiversity must be considered part of the functioning of the productive sectors, which seek to reduce, avoid and mitigate negative impacts, and generate positive effects on biodiversity and ecosystem services. In this way, biodiversity contributes to sustainable development and the provision of essential services for human well-being.

Biodiversity advocate in UN body

Lim, a staunch advocate of biodiversity, was appointed as the next chairman of the Subsidiary Body on Scientific and Technological Advice, a scientific body that advises the CBD COP. Lim was endorsed to the position by Philippine Environment Secretary Regina Paz L. Lopez and will serve a two-year term. As the next chairman of the advisory body to the CBD COP, Lim will be responsible in preparing the next set of recommendations for the CBD COP meeting to be held in Egypt in 2018, and manage the holding of two Subsidiary

Body meetings before the COP. Among the key tasks of the Subsidiary Body is the finalization of the Fourth Global Biodiversity Outlook (GBO4), which updates the assessment on the global effort to halt biodiversity loss and makes recommendations on what steps and measures need to be undertaken.

Cancun Declaration

Highlighting the Biodiversity Conference is the approval of the “Cancun Declaration on Mainstreaming the Conservation and Sustainable Use of Biodiversity for Well-being” by the ministers and other COP 13 heads of delegation. Countr ies representing a l l United Nations regions support commitments under the Cancun Declaration, and a variety of Aichi Biodiversity Targets. Among others, the declaration recognizes that “it is essential to live in harmony with nature as a fundamental condition for the well-being of all life.” That the well-being of all life depends on the conservation and sustainable use of biodiversity, and the ecosystem services it underpins. It also acknowledges that biodiversity offers solutions to the pressing development and societal challenges that the world community is currently facing. Ministers and heads of delegations a lso recog nized the negative impacts on biodiversity caused by degradation and fragmentation of ecosystems; unsustainable land-use changes; overexploitation of natural resou rces; i l lega l h a r vest i ng and trade of species; introduction of invasive alien species; pollution of air, soil, inland waters and oceans; climate change and desertification. They also declared that the implementation of the United Nat ions Fra mework Convention on Climate Change and the Paris Agreement, adopted at the 21st session of COP in December 2015, as well as of the Marrakech Action Proclamation adopted in November 2016 at the 22nd session, can and should also contribute to the implementation of the objectives of the CBD, and vice versa.

“We need to make additional efforts to ensure the effective implementation of the Convention on Biological Diversity, the Strategic Plan for Biodiversity 2011-2020 and its Aichi Biodiversity Targets, and, as applicable, the Cartagena and Nagoya Protocols, and facilitate closer,” the declaration said. In approving the Cancun Declaration, the ministers and heads of delegations vowed to work at all levels within their respective governments and across all sectors to mainstream biodiversity, establishing effective institutional, legislative and regulatory frameworks, and incorporating an inclusive economic, social and cultural approach with full respect for nature and human rights. T he declaration w il l be forwarded to the United Nations Genera l A ssembly, the Highlevel Politica l For um on Sust a i n a b l e D e v e l o p me nt 2017 and the T hird United Nations Env ironmenta l A ssembly.

Significant headway

According to Lim, the Philippines is making headway in mainstreaming biodiversity. Lim said that during the side events, members of the Philippine delegation underscore the initiatives of the Philippine government in focusing on biodiversity in the four thematic areas. She added that the Philippines is introducing biodiversity integration in businesses as a key to continuity and survival in the face of climate-change impacts. “The Philippines is now into biodiversity enterprise development. In one of the mainstreaming biodiversity decisions, we were able to push for the adoption of terminology ‘biodiversity-friendly business’. Currently, the Philippines is developing criteria to identify businesses, which we can label as biodiversity-friendly,” Lim said. But this effort does not rest on the DENR alone, but the whole of government, she said. Other agencies, she added, needs to prov ide incentive to businesses that are biodiversit y-fr iend ly, refer r ing to the depar tments of Trade and Industr y and of Agr icu lture and other gover nment agencies.

Biodiversity in development projects

L im s a i d t he i n it i at i v e s o f t he D uter te ad m i n i st rat ion, through Lopez, to mainstream biodiversity jives well with the Cancun Declaration. “In every opportunity, we are highlighting our efforts to mainstream biodiversity consideration,” she said. She cited the polic y to include biodiversit y among the cr iter ia in the ongoing mining audit and rev iew of env ironmenta l compliance certificate. Environmental groups in the Philippines lauded COP 13 in approving the Cancun Declaration.

Political will needed

Gloria Estenzo-Ramos, an environmental lawyer and vice president of the ocean conservation advocacy group Oceana Philippines, said the Philippines, like other signatories to the CBD and other related international instruments, should take heed and seriously adopt and implement the principles behind the Cancun Declaration. “Biodiversity means life, for both humans and nonhumans. Unfortunately, we have become detached from nature. Worse, we arrogantly destroy fragile habitats, such as corals, seagrass and mangroves, for coastal development; and heartlessly contaminate life-support systems—our land, air and water, with our discards and discharges,” she said. Oceana Philippines is pushing for the protection and conservation of marine-protected areas, including the Tañon Strait Protected Seascape and the Benham Rise, the country’s newest territory 250 kilometers off Aurora Province. Ramos said the good news is that the Philippine Constitution and various environmental laws already prescribe that policies and programs, practices and actions should always be “in accord with the rhythm and harmony” of nature. Ramos cited as an example, the amended Fisheries Code, which subscribes to an integrated ecosystem-management approach for fisheries and the use of technology, such as vessel monitoring for all

commercial fishing vessels to track behavior of fishers. “What is needed is political will from both the government and the citizens to ensure our actions are sustainable for present and future generations. We are pleased to see also that the Cancun Declaration also appended annexes as action points to protect biodiversity in our fisheries, forests and agriculture, with specific calls to fight illegal, unreported and registered fishing, which should be everyone’s battle cry,” she said.

A welcome declaration

Wilhelmina Pelegrina, regional campaigner for Food and Ecological Agriculture of Greenpeace Southeast Asia, said: “We welcome the Cancun Declaration and its call to advance ecological agriculture to address the Sustainable Development Goals of ending hunger, poverty and ensuring good health and well-being of the Filipinos. We take note of the declaration’s call for sustainable consumption and production and the need for diverse diets based on broader range of biodiversity.” She said Greenpeace also supports the call to conserve and cultivate native varieties, as well as farmer’s landraces, locally adapted breeds and underutilized species, especially in times of climate change. However, she said farmers have a dynamic seed system and they need on-farm biodiversity to build resilience against climate impacts and for them to have materials they can develop into new, locally adapted varieties should be acknowledged. “With this, the role that farmers and indigenous peoples as key players in the conservation and sustainable use of farm biodiversity can never be denied,” she said. The Philippines is rich in biological diversity. It is one of the 17 megadiverse countries in the world and is known to host unique species of flora and fauna that can be found nowhere else in the world. While it is rich in biodiversity, the Philippines is also a biodiversity hot spot because of the rapid rate of biodiversity loss.

A14 Monday, January 16, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Democracy… American style

he next time the United States of America lectures the world about democracy, it should be reminded of a couple of thoughts. The basic foundation and principle of democracy is the rule of law, as the “restriction of the arbitrary exercise of power by subordinating it to well-defined and established laws”, rather than of men.

In the US Declaration of Independence one critical grievance was that the king of England had “refused his Assent to Laws the most wholesome and necessary for the public good”. All laws had to be ultimately be approved by the king. Thomas Jefferson explicitly stated in his original draft of the declaration that the king refused to comply with attempts by the colonies to abolish the slave trade because the monarchy was making too much money from it. One man was able to subvert the will of the people. The idea that a written law approved by the people could not be overturned by the king changed the relationship between the government and the governed forever. Building on this rule of law bedrock, the US Constitution clearly and precisely defined the power of government and the processes for law making. It enshrined the concept that the institutions of government were more important and superior to the people that held elected and appointed positions within the government. The election of Donald J. Trump as president has created a debate as to the wisdom of the constitutional Electoral College process of expressing the people’s will. And if the election process is to be changed, the Constitution also provided an explicit system to effect changes. The losing side in the recent US presidential election is questioning the validity of the current system, and that is their prerogative. But in order for the democratic process to properly function, the law must be followed until it is changed. Yet, because the election outcome did not meet their wishes, some prefer to abandon the rule of law. American actress Rosie O’Donnell said last week that “I fully support imposing martial law—delaying the inauguration—until Trump is ‘cleared’ of all charges.” We wonder what the US government response would have been to the Philippines if the prior administration had declared martial law to prevent President Duterte from assuming office. Thousands of protestors are planning to descend on Washington, D.C., this Friday for the inauguration of Trump. That is also their right under the law. However, other large groups are in perfect agreement with O’Donnell. An online petition is calling for President Obama to stop the inauguration through whatever means possible. Another group—DisruptJ20—states that “the peaceful transition of power is a threat to all of us”. Of course, the overwhelming majority of Americans do not support blocking this “peaceful transition of power”. Yet, these events do show that a people must be constantly vigilant about protecting the rule of law and the institutions of government. Filipinos are battling with the dilemma of balancing legal rights with expediency in the current war on drugs. But the final responsibility for a successful democracy rests with “The People”, not the government. If the people do not play by the rules, we cannot expect the government to do so either. What ever may happen on Friday, the US has lost part of its moral authority on democracy. Since 2005

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Philippine economy will shine in Asia Atty. Jose Ferdinand M. Rojas II

RISING SUN

hen the British bank HSBC released its economic growth forecast recently, it gave a better forecast for the Philippines compared to other markets in Asia. HSBC sees that the country’s gross domestic product (GDP) will stay at a healthy 6.5 percent, the same as the bank’s growth projection for China. For the whole of Asia, HSBC projects a 5.8-percent growth for 2017. This is important information, especially in the face of economic changes and challenges, both locally and in the international arena. It shows that the current government, despite criticisms against some of its policies and actions, is moving toward the direction of securing economic gains for the country. Economist Joseph Incalcaterra stated in the HSBC report that “the economic outlook for the Philippines [is] underpinned by resilient domestic demand [and that] a number of reforms, including tax reforms and other constitutional reforms, will likely be undertaken in 2017.”

He added that, despite the “headwinds on the horizon for the regional economy”, the country’s local economy “remains relatively insulated”. The economist mentioned that the Philippines’s new agreements with fresh markets, like China, could partly offset the effects of the new economic policies of the United States under the Trump administration. The US is the largest contributor of foreign direct investment in the Philippines, and it is feared that investments would fall because of these new economic policies. For his part, President Duterte has been busy going around and

“The economic outlook for the Philippines [is] underpinned by resilient domestic demand [and that] a number of reforms, including tax reforms and other constitutional reforms, will likely be undertaken in 2017.” building economic ties with new markets, such as China, Russia and, very recently, Japan. In the news most recently is the visit of Japan’s Prime Minister Shinzo Abe to the Philippines, both to Manila and Davao City, making him the first head of state to be hosted by Duterte in Davao. He brought with him top executives from major Japanese companies, like Marubeni, Mitsubishi, Itochu, Sumitomo, Toyota, Sumifru, Mizuho, and the Nakayama Japanese Chamber. There were also officials from Chodai, Kirin, Tsuneishi, Tokyo Gas, Ichijo, Hitachi, Nakayama Technologies, a gas company and an engineering services company. The visit resulted in what Trade Secretary Ramon M. Lopez describes as “the biggest pledge so far from any

country during the Duterte administration”. The pledge is actually an investment package close to $9 billion, which, according to Lopez, may actually be even higher than China’s pledge of about $6 billion in official development assistance and $3 billion in financial facility. The Department of Trade and Industry is opening opportunities for Japanese investors in five priority areas: manufacturing, infrastructure and logistics, tourism, services and agribusiness. For manufacturing, this will specifically be in electronicmanufacturing services, automotive and auto parts, aerospace parts, chemicals, shipbuilding, tool and die, furniture and garments, power, and transport and logistics. Lopez added that the Japanese businessmen could also be looking into construction and nonvoice services in the business-process management industry. They could also be tapping into the game-development industry, engineering design in manufacturing, software development and shared services. For agribusiness, there is mention of cacao, coffee, mangoes, bananas, coconuts, rubber, bamboo, fruits and nuts, palm oil and other highvalue crops.

Continuous learning program for teachers

By Filipina B. Salvador

ith the implementation of the K to 12 Program by the Department of Education (DepEd), public-school teachers are being challenged to pursue a continuing program for their career development. Like other professionals who need to study or restudy to advance or update their knowledge in their teaching careers, teachers have to complete a minimum amount of professional development training to cope up with the latest in the world of education.

Many teachers, particularly those on the K to 12 level, have been through their share of trainings at their respective schools. That’s because the professional development of teachers has long been recognized as a priority issue in our educational system. Currently, the education department is encouraging all teachers to continue their training in their respective fields throughout their careers. Some programs designed for teachers include: n Teacher preparation. The best teacher-preparation programs emphasize subject-matter mastery

and provide many opportunities for student-teachers to spend time in real classrooms under the supervision of an experienced mentor. Just as professionals in medicine, architecture and law have opportunities to learn through examining case studies, learning best practices and participating in internships, exemplary teacher-preparation programs allow teacher-candidates the time to apply their learning of theory in the context of teaching in a real classroom. n Teacher-induction programs. Support for beginning teachers is often uneven and inadequate. Even if well prepared, new teachers

Support for beginning teachers is often uneven and inadequate. Even if well prepared, new teachers are often assigned to the most challenging schools and classes with little supervision and support. Nearly half of all teachers leave the profession in their first five years, so more attention must be given to providing them with early and adequate support, especially if they are assigned to demanding school environments.

are often assigned to the most challenging schools and classes with little supervision and support. Nearly half of all teachers leave the profession in their first five years, so more attention must be given to providing them with early and adequate support, especially if they are assigned to demanding school environments or far-flung rural areas. Mentoring and coaching from veteran colleagues is critical to the successful development of a new teacher.

Great induction programs create opportunities for novice teachers to learn from best practices and analyze and reflect on their teaching. n Ongoing professional development. It is critical for veteran teachers to have ongoing and regular opportunities to learn from each other. Ongoing professional development keeps teachers up-to-date on new research on how children learn from emerging technology tools for the classroom, new curriculum resources and more. The best professional development is ongoing, experiential, collaborative, and connected to and derived from working with students and understanding their culture. Most teachers consider themselves as life-long learners. By allowing them to have a continuous learning program, we are also promoting the advancement of our Filipino students as they prepare for a higher education to pursue a fruitful career. The author is Teacher 3 at Villa Gracia Elementary School in Buguey, Cagayan.

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Metrics, metrics on the wall– which one should I use for my business? Filbert Tsai

DEBIT CREDIT

inancial dashboards have become one of the most saleable feature of an accounting software. Filled with colorful graphs and data visualization tools, these dashboards provide quick insights on how a business is performing. However, dashboards are as helpful as a blueprint — these provide extensive useful information for engineers but clueless chatter for lay persons. Similarly, with extensive information, lay persons, without extensive knowledge on reading blueprints, can make significantly wrong decisions relying on usually reliable information. There is nothing really wrong with the data, but on how the user understands the information. Understanding financial dashboards in terms of the financial aspect of the business is definitely important to support the strategic and operational goals of the company. However, you should not rely on something that you don’t understand — just the same way that you should not take medicines that you have no idea of. Of course, there are a lot of good books out there that explain what each ratio and financial metrics mean — but at the end of the day, do you understand the underlying information? While I don’t recommend the reliance on financial dashboards unless you have full understanding of its contents, there are a few basic things that you need to understand as an entrepreneur.

Net income

Net income is very simple. It is the bottom-line in your income statement. Micro, small and medium enterprises (MSMEs) typically follow the cash basis accounting, which makes things very straightforward. Net income is the measure of all your incomes and expenses during a specific period of time (typically one year). This gives you a good snapshot of the company’s profitability during the period. Is it bad to have a net loss in your first few years? No, since this is the investment period when there are a lot of expenses that you’re incurring, which will be useful for the long-term benefit of the business. Net income or loss is fine — just make sure you benchmark it against your budget.

Cash flows

Cash flow is the heart and soul of MSMEs. It is an indicator of the amount of cash you’re expending to sustain your operations. A lot of entrepreneurs actually are not familiar with the cash-flow statement since they only see the balance sheet and income statement . Cash-flow statements can show negative cash result, especially during the cash heavy years. This

typically applies to companies sustaining heavy capital expenditures. There is nothing wrong with having a negative cash flow as long as cash liquidity (amount of cash to sustain immediate cash requirements) is available. Having a large positive cash is actually more problematic as this indicates inefficient cash investments of the business. Cash flows serve as an indicator of cash utilization. Use this to forecast cash requirement and build expectation of where cash shocks might arise.

Gross profit

The gross profit is probably the most important information that you want to use but you can’t rely upon unless you have full trust with your accountant. Determining a component of gross profit of the cost of sales, cost of service or project cost can be highly judgmental. Those without much experience can result in havoc on their analysis. Gross profit provides extensive information on how profitable your product or service is. However, the wrong cost analysis can produce highly erroneous information for users. So — take caution, this might not be a good measure unless you’re fully comfortable with the gross profit information. These information should be readily available to you as an entrepreneur. There is no need to make complex calculation to arrive at metrics unless you understand what the metrics mean. Information overload poses a higher risk to an MSME entrepreneur than the lack of understandable metrics. Filbert Tsai is a Filipino accounting advisor in the UK with global and public-sector experience. His key areas of interests are start-ups and MSMEs. His blog and page, Ask the Accounting Advisor, provide relevant insight for start-ups and MSMEs in the Philippines. This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@gmail.com.

Think broad: A lease is a PPP By Alberto Agra

PPP Lead Continued from A1

or those who subscribe to a liberal view of PPP (this columnist included) and consider the BOT law as just one of several PPP laws, a straight lease is a PPP. Under this view, any relationship between government and the private sector for an infrastructure or social service project, regardless of the allocation of functions and risks, is a PPP. In a lease, under Article 1643 of the Civil Code of the Philippines, one of the parties binds himself/ herself to give to another the enjoyment or use of a thing for a certain price, and for a period which may be definite or indefinite. The same

provision sets the cap of the lease period to 99 years. Unfortunately, the Civil Code does not spell out the procedure by which government, as lessor, selects the lessee. Again, the BOT law is not the relevant law. The guidelines on

Finally, a ₧2,000 increase! Atty. Lorna Patajo-Kapunan

legally speaking

epublic Act (RA) 8282, or the Social Security Act of 1997, recognizes the policy of the State “to establish, develop, promote and perfect a sound and viable tax-exempt social-security system suitable to the needs of the people throughout the Philippines which shall promote social justice and provide meaningful protection to members and their families against the hazards of disability, sickness, maternity, old age, death and other contingencies resulting in loss of income or financial burden.” As of January 2016, there are about 33 million members of the Social Security System (SSS) and 2.15 million retirees receiving their pensions upon retirement.

Considering the escalating cost of living, the meager amount of monthly pension that SSS pensioners receive is no longer adequate to support even their basic needs, most important, their monthly food sustenance and medical needs. Both the House of Representatives and the Senate recognize that without appropriate and immediate intervention, the SSS will fail in its role to provide basic economic security for the people, curb poverty, provide economic stability, redistribute income and preserve important social individual values. Accordingly, several bills have been filed (at least 22 in the Lower House and six in the Senate) to increase the monthly pension of the SSS pensioners by P2,000 under the Social Security System Act of 1997, such that, the minimum monthly pension shall be P3,200 for members with at least 10 credited years of service and P4,400 for those with 20 credited years of services. The P2,000 shall be given in two tranches: The first tranche amounting to P1,000 shall be given starting January 2017; and the second

tranche amounting to P1,000 shall be extended to the pensioners in January 2019. President Duterte on January 10, 2017, approved the across-the-board increase in the monthly pension of SSS retirees in what Malacañang described as a realization of his “social contract with the Filipino people.” The pension raise, however, was made on the condition that the SSS would raise by 1.5 percentage points the monthly premiums of active members. This would increase their monthly contributions to 12.5 percent of their monthly salary credit. The higher monthly premiums will start in May. The President also ordered the increase in maximum monthly salary credit from P16,000 to P20,000, on which the monthly premium is based. At a press briefing, SSS Chairman Amado D. Valdez said a pension increase of another P1,000 could come in 2022 or earlier in 2019. The pension hike signaled the defeat of the proposal of Duterte’s economic managers to grant the increase only after the approval of

The ethics official dogging Trump is just doing his job By Timothy L. O’Brien Bloomberg View

wo days after Donald J. Trump unveiled a conflicts-of-interest plan that does little to create a meaningful barrier between his own potential financial opportunism and White House policy-making, Republicans in the House of Representatives have targeted the federal agency charged with…wait for it, wait for it… monitoring presidential ethics. Walter Shaub, who runs the Office of Government Ethics (OGE), had the poor judgment on Wednesday to label Trump’s plan as “meaningless” and beneath “the standards that the best of his nominees are meeting and that every president in the last four decades have met.” Jason Chaffetz, an Utah Republican who chairs the House’s Oversight and Government Reform Committee, sent a letter on Thursday evening

to Shaub, asking him to visit Congress for a closed-door grilling about Shaub’s “whole department.” “Mr. Shaub has taken a very aggressive stance on issues he’s never looked at,” Chaffetz said. “He’s raised a bunch of eyebrows.” It was an odd criticism of a public servant who certainly has ample experience around the issues he’s looked at. Shaub, a lawyer, has been running the OGE for four years, previously serving as the agency’s deputy general counsel from 2008 to 2013. For the past two decades, he’s worked inside the federal government, save for a two-year stint in the private sector. In short, Shaub is a well-schooled, veteran analyst of ethical standards in government. The OGE—which was created in the post-Watergate years to battle government corruption through the Ethics in Government Act of 1978—is charged with “oversight of the executive branch ethics program designed

Monday, January 16, 2017 A15

to prevent and resolve conflicts of interest.” That gives OGE purview over about 2.7 million employees in 130 agencies linked to the executive branch, as well as the White House itself. The agency isn’t entirely free from Oval Office influence: The president appoints the OGE’s director to his or her five-year term. For his part, the president-elect has spent most of the last year ignoring calls to release his tax returns and to publicly offer a detailed plan for how he will insulate his White House from his business dealings. In a wide-ranging press conference on Wednesday that was meant to afford Trump the opportunity to give Americans some clarity on all of this, he instead only further muddled the matter. (Trump sued me for libel in 2006, claiming that my biography, “TrumpNation”, had damaged his reputation and business prospects. He lost the case in 2011.) Trump declined to release his tax

returns, insisting (incorrectly) that only the media cares about documentation that would help show the scope of his business dealings, financial relationships, overseas transactions and philanthropy. Trump said he will resign from the Trump Organization, but he will leave his two eldest sons in charge of the business (theoretically under the watchful eyes of two yet-to-be-named ethics and compliance monitors at the Trump Organization). He said his company would refrain from any overseas dealmaking while he’s president, but continue to do domestic deals (and the most lucrative work the Trump Organization does is domestic, anyhow). Trump is also going to appoint his son-in-law, Jared Kushner, to a senior West Wing role, while his daughter and Kushner’s wife, Ivanka Trump, sets up shop in the East Wing—all of which will test the boundaries of federal antinepotism laws.

joint ventures (JVs) issued by the National Economic and Development Authority is also not applicable because, while a JV may include a lease component, a straight lease is not a JV. The Government Procurement Reform Act cannot be made to apply to leases since a lease is not procurement transaction. In procurement of goods, services and infrastructure, government funds are used. In a lease of government asset, government receives, not expends, money. Executive Order 301, Series of 1987, which decentralizes the power to determine the reasonableness of the terms of the lease and the rental rates subject, is silent on the manner of selection. The 1991 Local Government Code, which expressly empowers local governments to lease properties, likewise, does not outline the steps. Memorandum Circular 3, Series of 2013, issued by the Governance

Commission for GovernmentOwned and -Controlled Corporations (GCG) provides that bidding is the general rule, while unsolicited proposals is not favored. Said circular does not prohibit unsolicited proposals nor will noncompliance of the requirements set forth therein render a lease contract invalid. Further, GCG cannot prohibit a procedure that is allowed by law and affirmed even by the Supreme Court. This columnist submits that government agencies are thus free to adopt their own selection procedures for as long as the four requirements of government contracts are present— PACT—public advantage, accountability, competition and transparency. They can go through bidding, accept unsolicited proposals or enter into competitive negotiations. Government agencies must be encouraged to do PPPs and lease is the simplest and most straightforward arrangement.

the tax-reform law that would make it easier to increase members’ contribution to the fund. Last month the finance, budget and socioeconomic planning secretaries warned that without an increase in members’ and employers’ contributions, the P2,000 increase would cut the actuarial life of the pension fund by 14 to 17 years. They said the SSS would have to shell out an additional P32 billion annually to cover the initial P1,000 increase and P62 billion for the entire P2,000 increase in monthly payments. A legal question has been raised that the SSS would violate the law if it increased the monthly contribution of members so it could raise the pension of some 2.2 million retirees. Section 4 (2) of the socialsecurity law (RA No. 8282), states that “the SSS shall have the powers and duties to provide feasible increases in benefits every four years, including the addition of new ones, under such rules and regulations as the commission may adopt, subject to the approval of the President of the Philippines: Provided that the actuarial soundness of the reserve funds shall be guaranteed: Provided, further, that such increases in benefits shall not require increase in the rate of contributions.” Militant groups have demanded since last year the implementation of the P2,000 increase (notwithstanding the veto of this measure by then-President Benigno S. Aquino III) and rejected the contention that the SSS fund would be put in jeopardy without any corresponding increase in premium contributions from 11 percent to 12.5 percent. The increase in premium to be shared by employees and their employers, will reportedly take effect in May. I am an SSS member, soon to be a pensioner in the near future, and

I do not favor any increase in premium payments. Instead, the new SSS leadership and the country’s economic managers should improve efficiency in collection and should focus on delinquent companies (some of these companies are owned by well-known politicians and former cronies) and compel them to pay their SSS contributions. The President has shown his political will in his campaign against drugs, and his other campaign promises, such as ending illegal contractualization and endo/555—may we now invite the President to look at delinquent companies and compel them to pay their SSS contributions, under threat of “extrajudicial killing”! The investments of our SSS funds should be inventoried and reviewed and transferred, if necessary or desirable, to more profit yielding endeavors. Perhaps, our Congress should also look at enacting legislation declaring a one-time Amnesty for unpaid social security system contributions, inclusive of fines, penalties and interests. This financial relief to delinquent employers would certainly be sufficient enough to fund the recent P2,000 pension increase and possible increases in the future. Last, but not the least, our SSS leaders should stop declaring bonuses (as in past recent years) for its own commissioners for “excellent performance”—which appears to be undeserved, based on their own admission that the funds will go bankrupt soon if there are no premium rate increases. If only 40 percent of the 33 million SSS members are paying their premiums (as allegedly by Valdez), why should all tax-payers be penalized and victimized under a tax-reform package that purportedly will fund the President’s campaign promise of pension increase. Shouldn’t the law go after these delinquent offenders and not the innocent victims?

Trump trotted out one of his lawyers, Sheri Dillon of Morgan, Lewis & Bockius, at the press conference to help detail his conflicts-of-interest plan. But Dillon went on to reinterpret how the Constitution tries to police presidential ethics in order to give Trump room to keep operations, like his Washington hotel, humming along. Dillon also said a sale of the Trump Organization, or a repackaging of it as a public entity, wasn’t possible because of the sheer size and complexity of the company (which is at odds with the fact that the Trump Organization is a relatively modest, small-scale affair that would lend itself quite readily to a liquidation). Last week Shaub sent Democratic Sens. Charles Schumer and Elizabeth Warren a letter noting that this week’s confirmation hearings for Trump Cabinet nominees was premature given that some of the appointees hadn’t fully complied with federal financial

disclosure rules. The rush “has left some of the nominees with potentially unknown or unresolved ethics issues,” Shaub wrote. Then, on Wednesday, at a speech at the Brookings Institution in Washington, Shaub blasted Trump’s conflicts plan shortly after it was announced. “Stepping back from running his business is meaningless from a conflict-ofinterest perspective,” Shaub said. “We can’t risk the perception that government leaders would use their official positions for professional profit.” Shaub is being aggressive, certainly, in carrying out the mandates of the office he holds. But those are good-government mandates that seek to forestall public corruption. They aren’t partisan mandates. A Republican-controlled Congress would do well by the American public to avoid going into a partisan crouch in support of the president-elect’s free-wheeling habits, and let Shaub do his job.

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Govt warned against expanding CCT program sans careful study

‘Bigger cash grants to weaken work ethics’ By Cai U. Ordinario

@cuo_bm

study conducted by the Philippine Institute of Deve-lopment Studies (Pids) raised warning bells over higherthan-necessary conditional cash transfer (CCT) grants as this could lead to a culture of dependency among recipients. The study, titled Pantawid Pamilya Pilipino Program: Boon or Bane?, was authored by Pids research fellows Aniceto Orbeta and Vicente Paqueo. The authors recommended that the government first pilot a study of various cash grants before deciding on granting higher CCT amounts. “Much bigger grants, however, can change the household calculus in ways that would lead to the weakening of work ethics and the emergence of dependency on government, as critics have warned,” the study read. T he authors said that, whi le arg uments supporting increased cash grant amounts for beneficiaries could enhance the impact of the CCT Program, increasing the amount without studying the impact of various levels of cash grants “would be risky.” They said it would be “more prudent” for the government to see the impact of alternative grant amounts could be an incentive to become dependent on the government. “Providing all beneficiary households bigger grants without piloting it would be risky,” the authors said. “Relatively large grants could trigger unintended consequences on work ethics.” Apart from the studying possible amounts for the CCTs, the authors said there is a need to “rethink” the conditions for the cash grants. Orbeta and Paqueo said that, given the elementary enrollment rate is now at 100 percent and all CCT beneficiaries are now covered by Philippine Health Insurance Corp., other education and health-related

Miss Universe candidates enjoy the warm hospitality of local residents at the Godofredo Ramos Airport in Caticlan.

conditions must be put in place. The study found enrollment for elementary pupils remained high in the first two waves of the CCT implementation and enrollment among children aged 12 to 17 years saw an increase after Wave 2, when high-school children were included in the CCTs. While the CCT has not eradicated child labor owing to the grants being insufficient to remove the practice, it has significantly contributed to its decrease. In terms of health, the study found more children undergoing growth monitoring and receiving deworming pills, vitamin A and iron supplementation. Further, more mothers received ante-natal and postnatal care from health-care professionals. “Overall, the evaluations have shown that the poor, like anybody else, are rational on the use of their money. They respond to incentives, such as giving importance to socially desirable expenditures, like education and health,” the authors said. The CCT Program started with 284,000 beneficiary households in 2008. By 2015,

beneficiaries reached 4.1 million households. In terms of population, the number of beneficiaries rose from 662,000 children aged 0-18 years old in 2008 to 10.2 million in 2015. Today the program covers about 79 percent of poor households whose income is less than the amount needed to basic necessities. The CCT extends a health grant amounting to P500 monthly year round and an education grant of P300 per child for 10 months each year to each participating household. To receive these cash grants, pregnant women must avail themselves of pre- and postnatal care, and be attended during childbirth by a trained professional and parents or guardians must attend the family development sessions, which include topics on responsible parenting, health and nutrition. Other conditions include children aged 0 to 5 must receive regular preventive health check-ups and vaccines; those aged 6 to 14 must receive deworming pills twice a year; and children between 3 and 18 must enroll in school, and maintain an attendance of at least 85 percent of class days every month.

SECURITY FOR MISS UNIVERSE PAGEANT GETS HIGH MARKS By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

ECURITY preparations for the Miss Universe beauty pageant that culminates on Monday, January 30, received high praise from the Miss Universe Organization (MUO). “We are very happy; this is definitely beyond our expectations,” MUO President Paula Shuggart said after meeting with representatives from the Philippine National Police and the Department of Tourism (DOT) over the weekend at the Conrad Manila. In a news statement, the DOT said during the meeting, the group discussed the security plans for the ancillary events leading to the grand coronation day at the Mall of Asia Arena. “The target is zero incidents,” said DOT Assistant Secretary Frederick M. Alegre. “All the security preparations are in place,” he stressed. Public vigilance, as well as adequate law enforcement, will ensure the safety and security in the Philippines of the beauty contestants, Tourism Secretary Wanda Corazon T. Teo added. “Let’s make sure that our guests, the delegates and the [MUO] staff, are secure and safe. It’s all part of the whole experience of Filipino hospitality that we have a great opportunity to show to the world,” she said. As of Sunday, some 86 candidates to the beauty pageant have already arrived in Manila. Some went to Boracay on Saturday and were in Vigan, Ilocos Sur, for a Terno Show on Sunday. The DOT said 16 candidates were given a rousing welcome when they visited Boracay Island, famous the world over for its long, powdery white-sand beach. Hundreds of local residents were present at the Godofredo Ramos Airport in Caticlan, waving and cheering at the candidates and their entourage who arrived from Manila via Skyjet Airlines. The contestants then took a 15-minute speedboat ride to Shangri-La Boracay Resort and Spa. Malay town officials, along with an Ati-Atihan dance group, led the throng who welcomed the candidates, which included: Miss Argentina, Miss Australia, Miss Belize, Miss Chile, Miss Costa Rica, Miss Ecuador, Miss Guyana, Miss Malta, Miss Mexico, Miss Myanmar, Miss Namibia, Miss Nicaragua, Miss Poland, Miss Turkey, Miss

We are very happy; this is definitely beyond our expectations.” —Shuggart US Virgin Island and Miss Honduras. “This is unbelievable! All these folks, young and old, turned out to welcome us,” Miss Australia Caris Tiive enthused. For her part, Miss Myanmar Htet Htet Htun said: “Boracay is even more exciting and meaningful. The people are very friendly and joyful to be with.” Apart from the dragon-boat rowing and swimwear photo shoot, the delegates also got an insight of the indigenous Ati culture by trying their hand at weaving and fishnet making. “The intricate weaving shows the rich Filipino culture,” Miss Mexico Kristal Silva said. Private sponsors led by former Ilocos Sur Gov. Luis Chavit Singson of the LCS Group and Solar Entertainment Vice President for Programming and Marketing Tessa Paz Alviz, were joined by Malay, Aklan Mayor Ciceron Cawaling, and Alegre. Miss Universe 2011 first runner-up Shamcey Supsup hosted the event. “All of the 86 Miss Universe hopefuls have arrived to experience the genuine Filipino hospitality for two weeks on the road to the big night, and we are welcoming them with the generosity of our private sponsors and no added expense on the part of the taxpayers,” DOT Undersecretary Katherine de Castro said. She also took exception to claims that the competition is designed to “objectify” women and that the country’s hosting aims to hide its perennial social ills, such as massive poverty. “It is a great honor for the Philippines to host the Miss Universe competition, which celebrates the physical beauty, the talent and the humanitarian side of women,” she emphasized. “For 65 years, the Miss Universe pageant has given women the opportunity to voice out and carry out their respective advocacies,” de Castro said. The Philippines has produced three Miss Universe winners, namely, Gloria Diaz (1969), Margie Moran (1973) and the reigning Miss Universe Pia Wurtzbach (2015). The country’s hopeful for the forthcoming pageant is Maxine Medina.