bevy of beauties Miss Universe 2016 candidates pose during the pageant’s formal launch in Pasay City on Monday. Eighty-six candidates from around the world are vying for the title to succeed Pia Alonzo Wurtzbach (inset) from the Philippines. The competition takes place on January 30. AP/Bullit Marquez
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Wednesday, January 18, 2017 Vol. 12 No. 98
More manufacturers to enjoy fiscal perks EO 226 T By Catherine N. Pillas
@c_pillas29
he Duterte administration is expanding the list of manufacturing activities that would enjoy fiscal perks in its three-year incentives plan to bolster the competitiveness of local industries.
The directive which provided for the identification of economic activities that would enjoy fiscal incentives The Investment Priorities Plan (IPP) 2017-2019 is also expected to bring changes not just in the country’s manufacturing sector, but also in the robust See “Manufacturers,” A2
BMReports
PHL retraces journey toward food security By Jasper Emmanuel Y. Arcalas @jearcalas
T
PIÑOL: “The journey has been tough and hard for us, simply because some of our activities actually were constrained by the fact that the budget for half of the year has been allocated already designed by the previous administration.”
Part Three
HE Food and Agriculture O rga n i z at ion ( FAO) de fines food security as “the access for all people at all times to enough food for a healthy, active life.” Meanwhile, food selfsufficiency is defined by the International Food Policy Research Institute as being able to meet con su mpt ion need s (pa r t ic u larly for staple-food crops) from own production rather than by buying or importing. Piñol has hinted of programs that may focus on the development of other crops as a substitute to rice and means to achieve food security
in the country. “Also, we are looking at other commodities that would fill in whatever shortage or gap in the staple-food production,” Piñol said. “I have directed the DA [Department of Agriculture]-Bureau of Agricultural Research Director Nick P. Eliazar to
PESO exchange rates n US 49.8490
intensify studies on adlai, which is a native indigenous plant found in mountainous areas. [People there] have been consuming and eating it as their staple food.” The Philippines, as of 2015, is self-sufficient in the following agricultural crops: sugarcane, calamansi, papaya, pomelo, tomato, cabbage, eggplant, cassava and sweet potato, according to the Philippine Statistics Authority (PSA).
‘Warming up’
ROGER V. Navarro, president of Philippine Maize Federation Inc. (PhilMaize), said it’s about time that the agriculture chief sits down with his policy and planning team, and craft a comprehensive program for the development and direction
of the agriculture sector under the current administration. “Piñol has to buckle up, seat down and make formal plans and directives for his operatives to be implemented down the ground,” Navarro told the BusinessMirror. “He should make things formal in papers and documentation, and not in social media.” Navarro added the government has procedures and processes run through the bureaucracy and not by social-media posts of grandstanding pronouncement, which Piñol would later retract. Navarro suggests that the overall framework of the DA’s program should be for food security, under which are specific targets per agricultural commodity, such as Continued on A2
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Looking a gift horse Teddy Locsin Jr.
free fire
A
S a Christmas gift to the sore losers of the last election, President Duterte has repeatedly offered to resign—if the country adopts a constitutional change from unitary to federal government. There it is—a gift. But both sides scorn it. The sore losers, because so sweeping a change, will sweep away the presidency in everything, perhaps even in name. A chancellor, as in Germany, will take its place. The presidency will go, the vice presidency of necessity with it. And even if Bongbong Marcos wins his protest, constitutional change will do away with his office, too. Continued on A11
DEATH PENALTY ALSO PUTS LIVELIHOOD OF POOR AT RISK By Cai U. Ordinario @cuo_bm
& Jovee Marie N. dela Cruz @joveemarie
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ot just the lives but even the livelihood of poor Filipinos, particularly those depending on agriculture exports to Europe, are at stake once the bill reinstating the death penalty is passed, economists said. They are concerned that reviving the capital punishment could negatively affect the country’s trade relations with Europe, resulting in the removal of the country’s trade privileges under the European Union-Generalized Scheme of Preferences Plus (EU-GSP+). Former Tariff Commissioner George N. Manzano said that, while the country’s main export to Europe are electronic and me-
chanical products, merchandise exports that fully take advantage of the EU-GSP+ are food and agriculture items, many of which are peddled by poor farmers and fishermen. “We will lose our competitive advantage against those that do not have GSP+ standing but enjoy lower tariffs and those who will continue to enjoy GSP+ privileges,” Manzano told the BusinessMirror. Philippine Institute for Development Studies (PIDS) Research Fellow Roehlano M. Briones said agriculture exports that could be affected are coconut oil and fishery products, like processed tuna. Manzano added that many of t hese e x por ters operate from Mindanao, which is home to the country’s poorest region— t he Autonomous Reg ion in Muslim Mindanao. See “Death penalty,” A2
n japan 0.4368 n UK 60.0531 n HK 6.4282 n CHINA 7.2240 n singapore 34.8692 n australia 37.2472 n EU 52.8499 n SAUDI arabia 13.2955
Source: BSP (17 January 2017 )
A2 Wednesday, January 18, 2017
BMReports BusinessMirror
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PHL retraces journey toward food security Continued from A1
self-sufficiency. “If you ask me, I would suggest to bring back the banner program— they may call it whatever—because this will give more focus on government interventions,” Navarro said, referring to the previous DA’s administration banner program priorities on rice, corn and high-value crops. “It [the program] should be based on per-capita consumption, growth rate of population, land production area and imports plus government intervention. Target should be quantified each year for measurement, proper evaluation and adjustment,” Navarro added.
Tough time
IN a press briefing last mid-December, Piñol admitted that he and his current DA team experienced a tough time in their first
six months in office due to the programs created by the previous administration. “The journey has been tough and hard for us, simply because some of our activities actually were constrained by the fact that the budget for the half of the year has been allocated already designed by the previous administration,” Piñol said. “We’re not saying that these programs are not relevant to the vision of the current leadership. This situation actually somehow tied our hands in really implementing drastic reforms in the agriculture department,” he added. Recently, the DA said it would bank on the inputs of the International Rice Research Institute (Irri) and the Philippine Rice Research Institute (PhilRice) in crafting a national rice-farming program. “The government has plenty of work to do pertaining to rice. We would be very
dependent on Irri and PhilRice in terms of formulating our program,” Agriculture Assistant Secretary for Operations Federico E. Laciste Jr. said in a statement. Laciste, who is also the deputy director of the Philippines’s National Rice Program, said collaboration in developing a national strategy for rice farming is important to uplift the lives of Filipino farmers. Irri said Laciste was briefed on the various collaborative research projects implemented jointly by the research institute and the PhilRice, in support of the National Rice Program. The projects include the “Rice Crop Manager,” a Web-based decision support tool for precision farming, and the Philippine Rice Information System, a satellitebased rice forecasting and monitoring system. Also included is the “Green Super Rice,” (GSR) which is composed of climate-
Governor’s Ball raises funds for a cause By Ma. Stella F. Arnaldo
@akosistellaBM Special to the BusinessMirror
C
HIEF executives of private companies, lawmakers and members of the diplomatic community in Manila attended Monday’s Governor’s Ball, a side event of the Miss Universe beauty pageant, to raise funds for a humanitarian cause. The BusinessMirror sources said the VIPs paid anywhere from P18,000 to P35,000 per plate to celebrate 86 of the most beautiful women in the universe—all gorgeous and dressed elegantly—as they posed, paraded, and were introduced one by one onstage at the SMX Convention Center in Pasay City. Each of the candidates shared a table with many of the VIPs, which numbered 1,800, with a trim menu served by Via Mare. Beneficiary of the fund-raising event is Pass It Forward Foundation, the official philanthropic arm of the Miss Universe Organization (MUO), according to a news statement from the Department of Tourism. According to the PIF web site, its projects are in the areas of education, the environment, health, shelter, wildlife protection, and disaster relief (www.passitforward.com). In a news statement, Tourism Secretary Wanda Corazon T. Teo formally opened the evening’s program narrating the difficulties of getting to host the Miss Universe.
“When we started negotiations for the Philippine hosting of the Miss Universe pageant in Manila, as soon as I started work with the DOT, there was one simple goal— to show the universe the best of our country, most particularly Filipino showmanship and hospitality.” The coronation night will be held at the Mall of Asia Arena on January 30. “Miss Universe 2016 in the Philippines will be our country’s crowning glory for many, many years with lasting memories and friendship of the candidates and families and friends with Filipinos,” Teo added. For her part, MUO President Paula Shugart said she was impressed with the level of participation in the activities surrounding the beauty pageant. “Every day and night of activities here are getting better organized and better participated in…. It’s an amazing Miss Universe 2016, and we join everyone in being proud for your accomplishments here, where we have the largest fan base. It will be with a heavy heart to bid farewell,” she said. With the women dressed in their elegant gowns and the men donning crisp tuxedos, they listened to former Ilocos Sur Gov. Luis “Chavit” C. Singson express his thanks to local and foreign partners, along with the support of the MUO, in staging a successful Miss Universe pageant in the country. Singson owns the LCS Group, which is the official presenter and main sponsor of the beauty pageant.
Terry Allan Farris, managing director of PIF, also thanked the VIP guests in “creating a positive social movement to inspire everyone to pass kindness forward. Everyone has capacity to give with accountability and transparency.” One VIP guest observed that the candidates seemed to be very hungry and thirsty as they arrived at the event. “[The candidate with us] downed two bottles of water immediately. They probably have a very hectic schedule.” Foreign security aides were also seen moving around the venue, making sure the candidates were all safe. “No alcohol was served,” said a the BusinessMirror source, “to ensure the girls would not be disrespected, I guess. And the organization was very strict; by 9 p.m., all the girls stood up and went home.” Hosted by VJ Joey Mead-King, the Governor’s Ball was an audiovisual (AV) feast that featured different AV presentations on Philippine tourist destinations, along with performances from marching bands, an international winning hip-hop dance group, and the Madrigal Singers, among others. The 65th Miss Universe is a collaborative effort between the DOT and private sector, including SM Lifestyle, Philippine Airlines, San Miguel Corp., Okada Manila, Solar Entertainment Television, PLDT, National League of Governors, Metro Manila League of Mayors, J Park Resort in Cebu, and the Hotel and Restaurant Association of Baguio.
smart varieties developed under the Next Generation (NextGen) project.
PDP 2017-2022
IN the draft of its six-year Philippine Development Plan (PDP), the Duterte administration has set a more modest production target for the agriculture and fisheries sector. The national government is keen on growing farm production by 2.5 percent to 3.5 percent annually starting this year until 2022, when the President steps down from office. The previous administration had initially targeted to increase annual agriculture and fisheries output by 3 percent to 5 percent. “The sector has yet to overcome recurring challenges related to productivity, competitiveness, climate and disaster risks, and resource degradation and depletion,” the draft chapter read.
Death penalty. . .
Continued from A1
Briones said if the GSP+ is removed, tariffs could go up anywhere from 7 percent to 10 percent. While this is not a significant amount, this is expected to hurt Filipino exporters. “That’s a relatively strong hit, but it will not be a deal-breaker for exporters. But it’s definitely going to be a cost,” Briones said in a phone interview. Apart from trade costs, Manzano said the removal of the GSP+ could negatively impact the country’s foreign direct investments (FDI). He said this could discourage foreign players from putting up businesses in the country in the hope of taking advantage of the country’s GSP+ standing. The country’s FDI inflows in the January-to-October 2016 period reached $6.2 billion, a 22.2-percent growth from the $5.1-billion posted in the same period in 2015. These were channeled to real estate; manufacturing; wholesale and retail trade; electricity, gas, steam and airconditioning supply; and humanhealth and social-work activities. “Due to the removal of the GSP+, we might be less attractive to invest in. One of the considerations is the rules of origin, so we can only export products that are made in the Philippines or products that have high value-added content from the country or Europe,” Manzano said. National Economic and Development Authority (Neda) Undersecretary Rosemarie G. Edillon told the BusinessMirror that, while it hopes the country retains its GSP+ standing, the government is also committed to expand and diversify its export markets.
Manufacturers. . .
information technology and business process management (ITBPM) sector. For one, the draft IPP has broadened the scope of manufacturing activities entitled to fiscal perks beyond the positive list in the previous plan. “In the previous IPP, you have the manufacturing sector and you have a positive list of around eight subsectors. Now, we just put in the IPP all qualified manufacturing sectors, including agro-processing and we removed the specific subsector list,” Trade Undersecretary Ceferino S. Rodolfo said in an interview. Rodolfo said this move will support the government’s manufacturing resurgence program (MRP), which aims to rebuild the existing capacity of industries, strengthen new ones and maintain the competitiveness of industries with comparative advantage. He said the implementing rules and regulations (IRR) of the IPP will specify a set of investment and employment requirements to enable firms to qualify for incentives. Rodolfo, however, assured that the rules have been eased.
“Greater trade liberalization, e.g., implementation of the Asean Economic Community [AEC] and free-trade agreements, and lifting of quantitative restrictions [QR] on rice in 2017 provides opportunities to the sector, as well as poses risks to small farmers and fishermen who remain uncompetitive,” it added. The PDP draft pointed out that crops subsector, which accounts for nearly half of agriculture and fisheries output, pulled down the overall growth of the sector in the past years. “The subsector’s poor performance was due to: a] impacts of typhoons and El Niño that greatly affected rice and corn productions, especially in Mindanao; b] coconut scale infestation in Calabarzon; and c] limited adoption of high-yielding varieties of selected commodities,” the draft read.
This is one of the goals set under the 2017 to 2022 Philippine Development Plan (PDP), the country’s medium-term socioeconomic blueprint, which is currently being crafted by the Neda. “We hope we will not be removed. We hope EU will acknowledge our efforts to protect the rights of claimholders. Sometimes there are conflicting claims but we do have procedures to resolve these, making sure that processes are inclusive,” Edillon said. Manzano said losing the GSP+ standing of the country will be a waste since the country is one of the few, if not the only Asean country, granted the privilege. The EU-GSP+ is a preferential trade scheme that the Philippines has been benefiting from since December 2014. The EU-GSP+ allows the Philippines to export 6,274 products to the EU duty free. This is an upgrade from the regular EU-GSP, which only covered 6,209 products and of which only 2,442 products are accorded dutyfree privilege. The Philippines’s availment of this scheme, however, is subject to continuous review and is hinged on the observance of 27 international conventions. Among these conventions is the International Covenant on Economic, Social and Cultural Rights, of which the Philippines is a party to. The country similarly agreed to the amendments of the said convention, or the “Second Optional Protocol to the International Covenant on Civil and Political Rights.”
Majority vote
Despite the growing opposition
Continued from A1
As for the IT-BPM sector, the IPP has put in place a sunset clause for incentives granted to business-process outsourcing (BPOs) firms in Metro Manila that are registered with the Board of Investments (BOI). “BPOs applying to the BOI under the Omnibus Investments Code [Executive Order (EO) 226], if located in Metro Manila, will only be granted incentives until 2019,” Rodolfo said, adding that this is a “strategic move” to create jobs in areas outside of Metro Manila. Most BPO companies register with the Philippine Economic Zone Authority but only to enjoy the income tax holiday under EO 226, which is under the purview of the BOI. The IT-BPM sector has its own blueprint, which has targeted to increase the ratio of BPOs within and outside of Metro Manila to 50:50 from the existing 70:30. However, the BPO industry may be forced to scrap this target as the BOI wants more workers outside of Metro Manila to be employed by call centers. “I told [the Information and Business Process Association of the
To be continued
against the revival of the death penalty, Speaker Pantaleon D. Alvarez on Tuesday said he has enough vote to approve the bill in 30 days. In a news conference, Alvarez expressed confidence that the socalled super majority in the House will vote in favor of the death penalty bill. “I am very confident of its passage because we have the [super majority] coalition. And if there is anyone who will go against it, there are probably just five or 10 lawmakers,” Alvarez added. According to the Speaker, the full debates on the bill will start next week, and he expects to complete its passage in 30 days in the lower chamber. “[But] let’s allow the full debates to happen to know the sentiments of the members,” said Alvarez, the principal author of the capital punishment bill. In a separate news conference, Liberal Party Rep. Edcel C. Lagman of Albay, member of the legitimate minority bloc, said there are at least 50 lawmakers who want to interpellate once the plenary debates on the bill start next week. Lagman asked Alvarez to allow all lawmakers even from the super majority to exercise “a conscience vote instead of a party vote.” “Party vote means a pressure vote,” he said. Lawmakers from the super majority who expressed opposition against the reimposition of capital punishment are Deputy Speaker and Lakas Rep. Gloria MacapagalArroyo of Pampanga, PBA Partylist Rep. Jericho B. Nograles and the Makabayan bloc. Alvarez said the lower chamber may change the scope of the death penalty bill, as they may focus only on illegal drugs-related crimes. Philippines] to reverse their goals. There should be a bigger percentage [of workers employed by BPOs] outside of Metro Manila and they are given until 2020 to do that,” Rodolfo said. To bolster the IT-BPM sector, the official of the Department of Trade and Industry (DTI) said the IPP has listed telecommunications infrastructure as eligible for fiscal perks, but only for new players. “This is why we put telecommunications under infrastructure in the IPP, so that the provision of IT infrastructure would be incentivized, wherever they may go in the country. But this is only for new players, because we’d like new ones,” Rodolfo said. The BOI also included “innovation-driven sectors” and “inclusive businesses” as separate categories of preferred activities. “We’re also incentivizing commercialization of technologies developed by Department of Science and Technology, like say a mobility technology,” said Rodolfo, who is also head of the BOI. The BOI removed the “locational restrictions” for developers of accommodations and tourism infrastructure to avail themselves of incentives, except in Boracay.
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The Nation BusinessMirror
Editor: Dionisio L. Pelayo • Wednesday, January 18, 2017 A3
Floods hit Northern Mindanao, Western Visayas; 5 killed
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T least five people have been confirmed killed by the floods that hit Northern Mindanao and Western Visayas starting Monday night. Four of the fatalities were in Cagayan de Oro City and other was reported in Antique province. The body of Virgilio Turno, 84, a tuba gatherer in Barangay Bulua, Cagayan de Oro, was found Tuesday morning by a neighbor who was inspecting the damage wrought by the flood. Tuno’s son said his father went missing on Monday afternoon at
the height of the heavy rain while gathering tuba in the neighborhood. Reported missing was Roy Leonen, 15, of Lapasan, a Grade 9 student of Misamis Oriental General Comprehensive High School, who was expected to be home about 6 p.m. on Monday after attending classes, but has not gone home by Tuesday morning. More than 5,000 individuals
in Cagayan de Oro City were reportedly moved to various evacuation centers owing to the rising floodwater at the height of the heavy rains, the city’s disaster officials reported on Tuesday. At the same time, the low pressure area (LPA) that affected the province of Antique on Monday caused the death of one person and temporarily rendered a national highway impassable. Antique Provincial Disaster Risk Reduction and Management Officer Broderick Train said the victim died in the flashflood that occurred in Barangays Vilvar and Baladjay in San Remigio town. Earlier, three people were reported to have drowned in the floods that
inundated parts of Misamis Oriental and Cagayan de Oro. Rescuers recovered the bodies of Rudy Boy Cabido, 14, in Agusan, Cagayan de Oro, on Tuesday morning and Zian Angel Montesino, 10, in Awang Opol, Misamis Oriental, on Monday evening. Rescuers also fished out the body of Franklin Ociosbello, 59, of Balulang, Cagayan de Oro, from the river on Tuesday morning. In Misamis Oriental more than 4,000 individuals living near rivers and creeks were also evacuated to higher grounds amid an upsurge of floodwater due to heavy rains brought by the LPA on Monday. Misamis Oriental Gov. Yevgeny Vincente Emano suspended
classes in all levels of public schools on Tuesday, as the Provincial Disaster, Risk Reduction Management Office (PRDRRMO) continued to assess the damage brought about by the flooding. The local government of Cagayan de Oro City has also declared the city under the state of calamity after the heavy rain on Monday turned the city’s urban villages and downtown area into a complete mess. Disaster officials in the city and the province of Misamis Oriental continue to monitor and assess the damage to properties, as aircraft from the Air Force conducted an aerial survey of the flood’s aftermath. Both the city and provincial
disaster officials have yet to issue an estimated value of the damage to properties and agriculture in Cagayan de Oro City and Misamis Classes suspended in Bohol due to floods. In Bohol classes in kindergarten, elementary and high school remained suspended on Tuesday, as the weather bureau placed the entire province under yellow rainfall alert. Bohol Gov. Edgar Chatto ordered the suspension of classes. Owing to hours of moderate to heavy rains, several areas in Bohol have been flooded. Several roads and bridges in different towns have been renedered unpassable by the floods as various rivers overflowed. PNA
Military: Hostages’ safety remains paramount Govt eyes up to P300-M
bond for STL operators
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HE Armed Forces will continue to consider the safety of hostages while carrying out its mission to crush the Abu Sayyaf, the spokesman for the military said. Asked to comment on President Duterte’s order to bomb the bandits even if they have hostages with them, Brig. Gen. Restituto Padilla said: “We got this guidance and looked at it seriously…but in the implementation of [the] guidance, we apply our skills and our operational art.” Addressing businessmen in Davao City over the weekend, Duterte said he had instructed the Navy and the Coast Guard: “If there are kidnappers and they’re trying to escape, bomb them all.” “They say ‘hostages’. Sorry, collateral damage,” he said in the speech, delivered soon after the kidnapped Korean ship captain and Filipino crew member of a cargo vessel were freed in Sulu. The Abu Sayyaf is believed to be holding up to 28 kidnap victims, a number of them foreigners. Padilla said the military “is prepared to carry out the President’s directive, but we will also take consideration of the hostages’ lives while applying the full force of military
By Joel R. San Juan @jrsanjuan1573
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PRESIDENT Duterte and Defense Secretary Delfin N. Lorenzana pay their last respect to Army Capt. Clinton Capio at the mortuary of the Libingan ng mga Bayani in Fort Bonifacio, Taguig City. Capio, member of Philippine Military Academy Class of 2006, was killed in a clash with the Abu Sayaff bandits on Thursday. PNA
resources and power in order to implement that.” He added it was up to ground commanders “to be
able to implement that in the best way possible, at the least cost of life and at the least application of violence.”
Nevertheless, he stressed that Duterte’s order spoke of his commitment to remove the Abu Sayyaf threat, once and for all. PNA
Marcos questions presence of data in ‘unused’ VCM SDs
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HE camp of former Sen. Ferdinand R. Marcos Jr. has questioned t he presence of data in the secure digital cards sourced from unused vote counting machines (VCMs). Marcos’s lawyer Victor Rodriguez said such discovery is proof of poll fraud during the May 2016 national and local elections. Rodriguez made the claim after the
ongoing decryption of the SD cards from unused VCMs at the Commission on Elections main office showed 13 of the 26 SD cards were found to have folders containing data. Rodriguez insisted the presence of the said data only proves the Marcos camp claim that massive fraud attended the last elections. The Comelec immediately downplayed the claim of Marcos camp.
In a brief statement, Comelec Spokesman James B. Jimenez said that, while it is unsurprising that the camp of the losing vice-presidential candidate would make such claims, the poll body cannot agree with the Marcos camp’s conclusion. “The statements [of the Marcos camp’] appear to be speculative in character and are, unsurprisingly, consistent with their theory. However,
this does not mean they are accurate,” Jimenez said. “This is a live case. And so any comment outside of that forum is potentially inappropriate,” he added. In the last vice-presidential race, Vice President Maria Leonor G. Robredo was able to edge Marcos after getting 14,418,817 votes, compared to the latter’s 14,155,344 votes.
Joel R. San Juan
HE task force on small-time lottery (STL) created by President Duterte has recommended the imposition of a multimillionpeso bond on small-time lottery operators to answer for their shortfall in remittances. In an interview, Justice Secretary Vitaliano N. Aguirre II, one of the members of the task force, said the cash bond may reach up to P300 million monthly, depending on the location of operation. The bond will also cover the filing fee amounting to P50,000 and the authorization fee amounting to P15 million being imposed by the Philippine Charity Sweepstakes Office (PCSO). The task force, composed of Aguirre, Executive Secretary Salvador C. Medialdea and Finance Secretary Carlos G. Dominguez III, said the PCSO is expected to implement the bond starting February 1. “Ang ginawa namin diyan nilagyan namin ng minimum, ang tinatawag na PMRR [presumptive monthly retail receipts], iyon ang quota na dapat iremit ng isang operator sa PCSO every month,” Aguirre said. He cited as example the province of Laguna, where around P10 million to P30 million are being collected daily from lottery operations. “Sa P10 million na lang…ibig sabihin noon, you are going to remit the amount of P300 million to the PCSO, kasi 30 days [a month ang operation].... Ganyan din, P300 million ang ibabayad mo as bond. Ibig sabihin, iyan ay cash bond ha, iyan ang ibibigay mo sa PCSO…. Ibig sabihin kapag ikaw ay nag-remit lamang ng P250 million, nag-pull ka ng P50 million, ibabawas ng PCSO sa bond mo ang P50 million,” Aguirre explained.
Aguirre said the amount of cash bond would vary depending on the area of operations. He assured the imposition of a cash bond would not led to the demise of STL operations in the country. “Sobra ang kita ng mga iyan. Mga bilyonaryo iyan. Kasama na iyan sa computation…iyong mga amount na iyan,” he noted. The task force was specifically ordered by Duterte to investigate the nonpayment or underpayment of taxes in STL operations nationwide and run after those liable, noting that billions are being lost by the government. Aguirre said the government aims to increase its revenues from STL, after finding out that only 10 percent to 15 percent of the total revenues are remitted to the PCSO during the previous administration. Aguirre revealed the government, under the Duterte administration, has also issued new implementing rules increasing the minimum remittance of the STL operators. “The implementing rules already took effect and have so far resulted in unprecedented high collections in the first few months of operations under the Duterte administration,” he added. STL was formulated by the government to combat the illegal-numbers game jueteng. But earlier reports had it that some franchise holders of STL actually operate jueteng by using government permits as front. The PCSO earlier said it is set to release stricter implementing rules for STL operations to finally put an end to jueteng. There are only 18 authorized agent corporations all over the country accredited for STL operations.
Church-based group wants inclusion of rights abuses in war vs drugs in govt-NDF talks By Marvyn N. Benaning Correspondent
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ELATIVES of victims of summar y executions in the course of the Duterte antidrug war and the counterinsurgency campaign have filed cases before the joint monitoring committee of the government and the National Democratic Front of the Philippines (NDF). The filing of the cases before the government-NDF Joint Monitoring Committee came as the Rise Up for Life and for Rights (RULR) expressed its “deep concern for the onslaught of senseless killings that have gripped poor communities throughout the nation.” RULR wants the killings in the antidrug war, which intensified as a result of Duterte’s announcement that he will kill all 6 million drug users and pushers before his term ends in
2022, and vowed to absolve all those accused of perpetrating summary executions, to be taken up during the third round of the government-NDF peace negotiations slated in Rome from January 19 to 25. Duterte also dismissed the killings of people with no involvement in the drug trade as “collateral damage,” and expressed no remorse for the deaths caused by vigilante groups. “As we seek appropriate venues to bring these drug-related killings to sober investigation, we recognize that the respect of the human dignity and human rights of our kababayan is an essential component of building a just and lasting peace in our nation; therefore, Church leaders urge the government and the NDF to include in their peace talks this urgent matter of drug-related killings with impunity that have escalated to epidemic proportions,” RULR said in
a statement released by its spokesman, Fr. Gilbert Billena. RULR sa id Comprehensive Agreement on Respect for Human Rights and International Humanitarian Law (CARHRIHL), which was signed by the govenment and the NDF, provides a framework for addressing this concern, since the accord’s objective is “to guarantee the protection of human rights to all Filipinos under all circumstances, especially the workers, peasants and other poor people.” “With this concrete avenue for action, we are joining with victims of human-rights violations and their families in filing cases against the government through the joint committee that monitors the implementation of CARHRIHL. We strongly believe that these drug-related killings must be prioritized in the upcoming peace talks as a significant threat
and obstacle to building a just and lasting peace, especially in financially disfranchised [poor] communities,” RULR added. It asked the government and the NDF to investigate the rampant drug-related killings being conducted with impunity under the thinly veiled state sanction of a so-called war against drugs. The National Police has openly admitted to killing more than 2,000 persons in drug operations since Duterte took office, while multiple news outlets put the total number killed in drug-related incidents at around 6,300. “This high incidence of killings supports firsthand accounts of witnesses in underscoring that police and alleged state-sanctioned killers should be accused of human-rights violations and extrajudicial killings in poor communities. Under the current climate of impunity, where
perpetrators are not held accountable for their crimes and violations of human rights, these killings will continue unabated, if not further escalate. We strongly believe that the peace talks between the government and the NDF can be a place where this urgent concern is raised,” RULR added. “We, as much as anyone, want the dismantling of drug syndicates and the obliteration of the illicit drug trade in the Philippines. Building peace requires that we address the roots of the problems of the people—drug use proliferates, at least, in part, because of a lack of adequate productive opportunities in poor communities. We believe that the dignity of persons requires that we offer them due process and the opportunity to redeem themselves,” it added. “We believe that the vulnerable poor, marginalized and exploited
sectors of society must be afforded every respect of their human rights—for these are the rights of the toiling majority. For this reason, we lodge our urgent appeal for the government and NDF to take up the crisis of drug-related killings as a matter of CARHRIHL. Upholding the rights of the people in our beloved homeland is essential for building a just and lasting peace,” the group also said in the statement. “With hopeful prayers for a successful peace talks to be held January 19-25, 2017 in Rome, Italy, we fervently appeal to the government and the NDF to act to stop the drugrelated killings, further implement CARHRIHL as a mechanism for upholding human rights, address the roots of the armed conflict in the Philippines, and ardently pursue the attainment of a just and lasting peace for the Filipino people,” the statement added.
Economy
A4 Wednesday, January 18, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon
House eyeing addl measures after PIT-rate adjustment By Jovee Marie N. dela Cruz @joveemarie
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he leadership of the House of Representatives is looking for more tax administrative measures to recover the foregone revenue from the proposed lowering of personal income-tax (PIT) rates. In an interview, House Committee on Ways and Means and PDP-Laban Rep. Dakila Carlo Cua of Quirino said these tax administrative measures seek to raise the tax collections of the government. “We’re looking for fuel-marking system [as tax administrative measure] against smuggling of petroleum,” Cua said. With the new fuel-marking scheme, the Bureau of Customs has said it can easily determine if oil imports are smuggled. Moreover, Cua said the government should also require all online businesses in the country to issue electronic receipts. “We’re eyeing an electronic receipts for all online transactions to raise government revenue,” Cua said. According to Cua, he will file these tax administrative measures separately. “These could be included in the taxreform package, but since it’s not easy to approve all of these in one package and since these are efficiency measures, I am planning to file these two as separate bills,” he added. This, after Speaker Pantaleon D. Alvarez told the Ways and Means Committee to look for more admin-
[Revenuegenerating agencies should] plug holes in [their] revenuecollection efforts before Congress considers a proposal to impose new taxes on petroleum products.” —Alvarez
istrative measures before considering the imposition of excise tax on petroleum products as one of the offsetting measures in the tax package. “[Revenue-generating agencies should] plug holes in [their] revenue-collection efforts before Congress considers a proposal to impose new taxes on petroleum products,” Alvarez said. Meanwhile, Cua said the DOF is set to present its revised tax-reform package before the Ways and Means Committee on Wednesday. “I understand the position of Speaker Alvarez, because that’s the clamor of the people and he is sensitive to what the people are saying. I think, it is incumbent upon the committee to study the proposal,” he said. Earlier, like the finance agency’s first proposal, Cua said only workers with a monthly salary of P20,833, or P250,000 annually, will be exempted from PIT under the new DOF proposal. This runs counter to the proposal of President Duterte and other lawmakers, who want the DOF to exempt workers earning P25,000 monthly, or P300,000 annually, and below from PIT. In the current setup, those earning P10,000 or less per month pay a 5-percent income tax, while those with yearly earnings of P500,000 and above pay a 32-percent income tax. Also, the lawmaker said the DOF also maintained its proposal removing the value-added tax (VAT) exemptions for senior citizens and persons with disabilities. The imposition of excise tax on petroleum, removal of VAT exemptions for senior citizens and PWDs and ad valorem tax on automobiles are among the offsetting measures being pushed by the Department of Finance in their first proposed Comprehensive Tax Reform Package, but opposed by lawmakers. The Comprehensive Tax Reform Package seeks to lower personal income-tax rates and impose additional taxes on certain commodities. The tax-reform package involves foregone revenue of around P200 billion but, at the same time, will generate around P566 billion for the government due to these new additional taxes. According to Cua, the lower chamber will pass the tax-reform measure by June to help the government to finance the 2018 national budget.
BusinessMirror
WESM Dec. 2016 billing rate lowest since Jan. 2011–PEMC
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By Lenie Lectura
makati city allots p11.2 million for pwds
D.O.L.E.-BICOL AWARDS LIVELIHOOD TOOLS TO CAMARINES NORTE MINE-SITE DWELLERS LEGAZPI CITY—The Department of Labor and Employment (DOLE) has released early this month more than half-amillion pesos worth of livelihood grant to 59 families living in a mining site in Camarines Norte. The grant, which is in the form of equipment, raw materials and small hand tools under the DOLE Kabuhayan Starter Kits (DKSK) program, has amounted to P566,714, according to lawyer Ma. Karina Perida-Trayvilla, DOLE-Bicol director officer in charge. She said the program aims to provide an alternative
@llectura
arket prices in the Wholesale Electricity Spot Market (WESM) went down to P2.28 per kilowatt-hour (kWh) for the December 2016 billing period, the lowest since January 2011.
Philippine Electricity Market Corp. (PEMC) said on Tuesday that, for the December 2016 billing period, coal accounts 45.5 percent of the electricity generated in the Luzon and Visayas grids. There is a slight increase from the output of geothermal resources at 13.9 percent and wind resources at 2.8 percent. D i st r ibut ion ut i l it ies a nd customers directly withdrawing from the grid sourced 21 percent of their requirements from the electricity bourse. The Manila
45.5% The power output generated by coal plants in the Luzon and Visayas grids in December 2016, with geothermal resources at 13.9 percent and wind resources at 2.8 percent
Electric Co., the largest distribution utility in the country, procured 21.96 percent of its supply from the WESM, benefiting from the low prices. “Prices in the market are result of commercial forces. These market prices send signals to investors to make sound investment decisions on the timing of installation, capacity and type of resources. We see that the WESM plays a pivotal role in a liberalized and deregulated market environment,” said Melinda L. Ocampo, PEMC president. The WESM is a centralized venue for buyers and sellers to trade electricity as a commodity where its prices are based on demand and supply. The WESM began commercial operations in Luzon in June 2006 and in the Visayas in December 2010. In June 2013 PEMC launched and integrated the Retail Competition and Open Access (RCOA) into the WESM. “As we reap the benefits of a working WESM, we are prepar-
ing for the full implementation of retail competition where, hopefully, the efficiencies in electricity trading will redound to the benefit of contestable customers,” Ocampo added. She said the downward trend would continue in the early part of the year, mainly on account of a cooler temperature in January and February, which normally results in lower demand. The WESM was created by Republic Act 9136, the Electric Power Industry Reform Act of 2001. This provided for the establishment of an electricity market that reflects the actual cost of electricity and lowers its price through more efficient production through competition. Ef fe c t ive set t le me nt s p ot pr ices (ESSPs) in t he W ESM plunge to P2.28/kW h for the December 2016 billing period, which is the lowest since January 2011. ESSPs refer to the average prices paid by wholesale customers for energy purchased from the spot market.
Customs to importers: Update contact details or face sanctions
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Head over heels A grocery attendant at a Makati City supermarket buries his head on a pile of merchandise as he tries to figure out how he could be able to accommodate more grocery items on the shelves. Nonie Reyes
briefs THE Makati City local government has allocated P11.2 million for programs for the benefit of the city’s persons with disabilities (PWD). Of the total PWD budget under the Makati Social Welfare Department (MSWD), P5.9 million has been allocated for the provision of free mobility aids and P4 million for free movies benefit. To date, over 7,000 registered PWDs in Makati City enjoy a number of privileges, such as unlimited admission in any of the city’s upscale cinemas to watch movies for free. The program was launched in 2007, during the term of former Mayor Jejomar C. Binay. Rosie Manto, a 64-year-old PWD resident of Barangay East Rembo, expressed satisfaction with the services of the city government to PWDs. “Since I became a registered PWD of Makati eight years ago, I have been satisfied with the benefits provided by the city government. I really enjoy watching movies for free. I have no complaints,” she said. Manto added that she appreciates the move of Mayor Abigail Binay to include some 2,858 PWDs among the recipients of the Pamaskong Handog bag of groceries for the first time last December. Claudeth Mocon-Ciriaco
news@businessmirror.com.ph
livelihood to the informal-sector workers in the province, many of whom rely on income through construction of open-pit mining holes in areas not far from their dwellings. Trayvilla, in a news statement, said beneficiaries of the DKSK program get to have access to a “more defined income” through enterprises that are “self-earning”. She said DKSK provides both skills training and the necessary tools so its beneficiaries can quickly start livelihood activities and become self-employed. Trayvilla said the livelihood starter kits have tools that would be beneficial in areas such as massage, plumbing, cosmetology, electrical servicing, welding, native snack preparation, car wash, repair of motorcycles, cellular phones, appliances and upholstery. PNA
manila water bags d.o.e.’S don emilio abello energy efficiency awards anew The Department of Energy (DOE), led by Energy Secretary Alfonso G. Cusi, honored Manila Water in the prestigious Don Emilio Abello Energy Efficiency Awards (DEAEEA) held recently at Maxims Hotel, Newport City in Pasay City. William Alcantara, head of Energy Management of Manila Water, was awarded as a Certified National Expert for Pumping System Optimization by the DOE and the United Nations Industrial Development Organization. The recognition comes after Alcantara has successfully fulfilled the requirements for certification, including reports submission, audits and a certifying exam. Three of Manila Water’s water-supply facilities were also recipients of Citation and Special Awards for notable performance and contribution in energy efficiency and conservation. Kingsville Pumping Station received a Citation Award, conferred to a company that has improvement in its Specific Energy Consumption (SEC) between 3 percent and 5 percent from the previous year and with substantial energy efficiency and conservation projects.
Duterte urged to name Con-com members
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he leader of the House of Representatives urged President Duterte on Tuesday to complete the appointment list of the 25-member constitutional commission (Con-com). “ T he P resident h a s a l ready signed the executive order creating the constitutional commission. The only thing that we’re waiting for is the completion of its members,” Speaker Pantaleon D. Alvarez said in a news conference. “As soon as the appointments are made, they could start [drafting the new Constitution] and finish it in six months’ time,” the Speaker added. Duterte earlier signed Executive Order 10, creating a committee that will review the Constitution. The committee will be composed of 25 different experts. The committee will also help Congress, acting as constituent assembly (Con-ass), in amending the present Constitution to change the present unitary form of government to a federal system. Alvarez said open public debates on the issue of constitutional reforms, especially on federalism, must be encouraged before Congress focuses its attention on the growing consensus of adopting a federal system.
Meanwhile, Nacionalista Party Rep. Luis Raymund F. Villafuerte Jr. of Camarines Sur, a vice chairman of the House Committee on Appropriations and among the lead advocates of Charter change, has expressed optimism that the Executive and Legislative departments could now focus on Charter change after Malacañang creates the 25-member committee to help Congress study the proposed reforms to the 1987 Constitution. “ W it h t he c re at ion of t he 25-member constitutional commission that will revisit the 1987 Constitution and come up with proposed amendments for consideration by Congress convening as constitutional assembly, the Executive and Legislative branches of government could now put the federal switch on the fast lane at the onset of 2017,” said Villafuerte, who also heads the bloc of first-termers in the House of Representatives. He added that Congress can help Duterte deliver on his electoral mandate on high and inclusive growth by moving quickly on, among others, the federal switch and lifting the constitutional 60-40 rule on foreign ownership of local businesses via the Con-ass mode. Jovee Marie N. dela Cruz
he Bureau of Customs (BOC) on Tuesday ordered more than 3,000 importers to update their contact information, including phone numbers and e-mail addresses, or face sanctions. According to Commissioner Nicanor Faeldon, stakeholders should amend their contact details to ensure effective communication between importers and the bureau. “This is one of the ways to better serve the importers, so they should also do their duty by informing us of any changes in their phone numbers or e-mail addresses,” the Customs chief said in a news statement. The list, which includes over 3,000 importers that have outdated/incorrect phone numbers or e-mail addresses in their system, is published on its web site, Bureau of Customs|Department of Finance: Bureau of Customs and Facebook account, @bureauofcustomsph. The BOC reported that upon verification, phone calls made to 1,206 importers reveal incorrect or non-working numbers, while e-mails to 2,365 importers bounced back. Pursuant to Section 7 of Customs Memorandum Order (CMO) 11-2014, failure of the importers to update the bureau’s Account Management Office of their updated e-mail address and/or contact details within 30 days from the date of the list’s posting will cause suspension of their accreditation. “Their E2M Client Profile Registration System access will also be deactivated in accordance with Section 8.b of the said CMO,” he added. With this, the importers identified on the list are required to submit the following documents to AMO:· Letter request to BOC-AMO for the amendment of CPRS data/information on e-mail addresses and/or phone number/s; print out of importer’s CPRS profile as amended; and printout of VASPS’s e-mail notification of “STORED” CPRS profile. For further instructions and other details, importers may call AMO through its hot-line numbers, 0921-2304519 or 0915-0525442. PNA
Agriculture/Commodities BusinessMirror
news@businessmirror.com.ph
Editor: Jennifer A. Ng • Wednesday, January 18, 2017
A5
PHL sugar output hits 600,316 MT
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By Jasper Emmanuel Y. Arcalas @jearcalas
he country’s sugar production as of January 1 has reached 600,316 metric tons (MT), or 26.68 percent of the target for the current crop year, according to the latest report from the Sugar Regulatory Administration (SRA). SR A data, however, showed that the figure is 24.12 percent lower than the 791,161 MT produced in the same period last year. The agency attached to the Department of Agriculture (DA) did not indicate the reason behind the decline in output in its report. As of January 1, SR A data showed that withdrawals of “B” raw sugar—or those for domestic consumption—have reached 465,553 MT. The figure is 6.78 percent lower than the 499,413 MT recorded a year ago. Wit hdrawa ls of ref ined sugar during the period amounted to 246,577 MT, lower than the 298,498 MT recorded in 2016, according to SRA data. As of January 1, refined sugar production declined by 36.13 percent to 170,032 MT, from the 266,225 MT produced last year. The production of raw and refined molasses declined by 17.22 percent year-on-year, SRA said. As of January 1, raw and refined molasses output reached 255,818 MT, lower than 309,039 MT recorded a year ago. Philippine sugar output for the current crop year (CY) ending August 31 is expected to reach 2.25 million metric tons (MMT), slightly higher than the 2.24 MMT
2.24 MMT The country’s sugar production in crop year 2015-2016 recorded in CY 2015-2016. Of the projected sugar output, 8 percent, or about 180,000 MT, will be exported to the US under the tariff rate quota scheme. T he rem a i n i ng 2.07 MM T were allocated for local consumption. However, SR A estimated that domestic demand for the current crop year would reach 2.15 MMT. The shortfall, projected at 800,000 MT, will filled by imported sugar, according to SRA. Fi g u re s f ro m t he a ge nc y showed that there were 27 operational sugar mills and 14 sugar refineries in CY 2015-2016. Out of the 27 sugar mills, one producing muscovado is registered with the SRA. SR A noted that the highest sugar output of the Philippines was recorded in CY 2012-2013 at 2.465 MMT. The lowest was in CY 19861987, when output reached only 1.33 MMT.
file Photo
Senate eyes immediate passage of coco-levy fund bill By Butch Fernandez @butchfBM
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enators said they are working to fast-track the approval of an enabling law that will pave the way for the long-delayed disposition of the P75-billion cocolevy fund awaited by coconut farmer beneficiaries. Senate Majority Leader Vicente C. Sotto III confirmed on Tuesday that senators may be able to pass the remedial legislation before Congress adjourns anew on March 17, when lawmakers go on Holy Week recess. “It is possible,” Sotto said, when asked about the prospects of the coco-levy disbursement bill. Sen. Francis N. Pangilinan, chairman of the panel tasked to craft the
enabling bill, assured the members of the Committee on Agriculture and Food are also keen to pass the needed legislation that will facilitate disbursement of the fund to coconut farmer beneficiaries. “We would like to see that happen,” Pangilinan told the BusinessMirror, adding: “we will work on it as best we can.” Even President Duterte earlier assured that the coco-levy fund would be exclusively disbursed for the benefit of coconut farmers, indicating he would readily sign into law the remedial legislation long expected by thousands of coconut farmer beneficiaries.
Yolanda rehab
The Philippine Coconut Authority (PCA) on Tuesday said it is
Mass livestock production may pose flu pandemic threat–Scientist
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ondon—By d r iv i ng mole c u l a r changes in diseases, mass livestock production can potentially lead to human pandemics, according to a scientist quoted in a press release posted online by the University of Exeter on Monday. Rapidly rising global poultry numbers, along with selective breeding and production techniques which have dramatically altered the bodies of chickens and other poultry, have made the planet more “infectable,” said Prof. Stephen Hinchliffe from the University of Exeter. In recent years, there has been an increasing number of avian influenza outbreak in various regions. Some current forms of avian influenza (also known as avian flu or bird flu) are capable of infecting people. “Avian f lu might often be presented as a problem of infected wild birds spreading the disease, but to understand it fully, we need to think about pathological lives— issues caused by our economies and modes of organizing life,” Hinchliffe said. Avian flu has been around for a long time, circulating in wild birds without too much of an issue, but “as inexpensively produced protein-rich diets become a worldwide norm, poultry populations, growth rates and metabolisms have changed accordingly,” Hinchliffe said. T h is is due to econom ic pressu re driving selective breeding, feed and dietar y supplements, changing housing regimes, population densities and sometimes inappropriate use of veterinary medicines, like antibiotics, according to Hinchliffe. A microbe can on ly become deadly or pathogenic if there are the right env i ronment a l a nd host cond it ions, Hinchliffe added. Hinchliffe and other three researchers from the Open University have explored the
topic in their new book Pathological Lives.
Croatia ban
Croatia banned keeping poultry outdoor on Monday and started to cull poultry in several farms near Zagreb following the detection of bird-flu virus. Over the weekend, the highly infectious H5N8 bird-flu virus was detected at a farm in Sop Bukevski, some 30 kilometer southeast of the capital Zagreb. “We decided to ban keeping poultry in the open until there was no more risk of
infection,” Agriculture Minister Tomislav Tolusic said. He said the virus probably came with migratory birds. Tolusic said all necessary measures have been taken at some 50 other farms nearby and a quarantine zone with a 10-kilometer diameter has been established. The owners of the fowls to be culled would be compensated within a month, he added. Two weeks ago, there was a similar case at another farm in northeastern Croatia. PNA/Xinhua
that the two agencies have to “iron out kinks” in the bidding process for the fertilizer. Once the agency’s Yolanda Recovery and Rehabilitation Program (YRRP) is completed, he said he would also set up coconut-related enterprises in Yolanda-affected regions. The YRRP is PCA’s master plan for rehabilitating coconut farms damaged by the supertyphoon in November 2013. The four-point YRRP is composed of debris management, replanting, fertilization and intercropping. Of t he P2.8 -bi l l ion Y R R P b u d ge t , t he P C A a l lo c at e d around P700 million for its fertilization program. With a report
from Jasper Emmanuel Y. Arcalas
Group to DENR: Spare ‘baklad’ in Laguna de Bay from demolition
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File photo
on track in completing its rehabilitation program for Yolanda-af fected coconut-planting areas by July. “We will spend all the money allotted or intended for the Yolanda rehabilitation program. Because we have a commitment to use all the unspent funds, especially for Yolanda rehabilitation,” PCA Administrator Avelino Andal told the BusinessMirror. “We can do it and finish it by July this year,” Andal added. He said the PCA will immediately bid out the remaining fertilizer to be distributed to coconut farmers in Eastern Visayas. “We still need to purchase multinutrient fertilizers, which are with the PITC [Philippine International Trading Corp.,]” Andal said, adding
he Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas (Pamalakaya) on Tuesday cautioned the Department of Environment and Natural Resources (DENR) against dismantling small fish traps within Laguna de Bay. Fish traps, or baklad, allow fishermen to catch fish in open waters. These should not be mistaken as fish cage or fish pen, as the National Anti-Environmental Crime Task Force (NAECTF) gear up to dismantle fish cages and fish pens starting this month, Pamalakaya Chairman Fernando Hicap said. The DENR’s moratorium on fish cage and fish pen operation starts this year in line with President Duterte’s marching order to allow small fishermen to benefit from the lake’s bounty. Some small fishers in Laguna de Bay have resorted to building baklad because fish becomes harder to catch in open waters. According to Pamalakaya, the average fish catch in Laguna de Bay is 2 kilograms to 3 kg per day, compared to 10 kg to 15 kg per day three decades ago, before fish cages and fish pens started to mushroom and occupy large portions of the lake. The DENR has given the fish pen and fish cage operator until March to harvest their cultured fish and to remove their structures. The agency also announced that it will demolish illegal and unregistered fish cages and structures first, causing apprehension among small fishers who own small baklad and fish cages. “We fear that even the baklad owned by small fishers will not be spared from government’s campaign to dismantle wide fish pens in the lake. Those baklad are the Laguna
lake fishers’ alternative livelihood since open fishing is not that sustainable anymore,” Hicap said. Pamalakaya said large fish pens and fish cages should be demolished to allow small fishermen to cover more areas when fishing in open water. The group also said the abolition of fish pens should lead to proper and complete rehabilitation of the dying lake and not to conversion of the productive fishing water into eco-tourism zone. The Laguna de Bay is the largest freshwater lake and biggest aquaculture hub. Around 13,000 hectares of the lake’s 90,000 hectares surface are occupied by fish cages and fish pens, making the region the biggest producer of cultured tilapia and bangus, which supplies Metro Manila other areas of Luzon with affordable fish. Jonathan L. Mayuga
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Wednesday, January 18, 2017
The World BusinessMirror
Editor: Lyn Resurreccion • www.businessmirror.com.ph
British firms assessing potential costs as plans to leave EU coalesce
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The U.S. Capitol frames the backdrop over the stage during a rehearsal on January 15 of President-elect Donald J. Trump’s swearing-in ceremony in Washington. Some two-dozen House Democrats plan to boycott Trump’s inauguration on Friday, casting the Republican businessman as a threat to democracy. AP/Patrick Semansky
World leaders kept on edge as inauguration day nears
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e called the North Atlantic Treaty Organization (Nato) obsolete. He said Germany’s acceptance of refugees is “utterly catastrophic.” The decades-old OneChina policy embraced by the United States? That’s up for discussion. Just days before President-elect Donald J. Trump’s inauguration, world leaders on three continents are on edge after comments the president-elect made in an interview Friday with The Wall Street Journal and in a weekend interview with two European newspapers, Bild and The Times of London.
Nato is ‘obsolete’
“It’s obsolete, first because it was designed many, many years ago,” Trump said, according to the Ger man newspaper Bi ld. The 28-member alliance, born in 1949, three years after Trump, is viewed by many—including his nominee for defense secretary, Gen. James N. Mattis—as essential to US security. “Secondly, countries aren’t paying what they should and Nato ‘didn’t deal with terrorism,’” he said. Responding on Monday to Tr u mp’s comments, Da l i a Grybauskaite, the president of Lithuania, which gained its independence from the Soviet Union in 1991 and joined Nato in 2004, urged Trump to continue meeting the United States’ financial obligations toward the alliance. “Since World War II, the presence of US troops has been a prerequisite for rebuilding the Continent, safeguarding peace and ensur ing secur it y,” Gr ybauskaite said. “We expect continuity from the new US administration. Trump must maintain
28 The number of Nato members
this leadership role, to ensure security, stability and peace.”
‘The force of Europeans is in their unity’
Trump also criticized the European Union, describing it as “basically a vehicle for Germany.” He praised Britain for its vote to leave the bloc, known as Brexit, adding: “I believe others will leave. I do think keeping it together is not going to be as easy as a lot of people think.” “I think that we, Europeans, have our destiny in our own hands, and I would very strongly argue that we all stand together,” said Chancellor Angela Merkel of Germany, about the 27 European Union members that will remain after Britain’s departure. French leaders also bristled at Trump’s swipe against the bloc. Their response comes as they deal with growing domestic support for the anti-EU and anti-immigrant
National Front party, led by Marine Le Pen, who was spotted on Thursday at Trump Tower in New York. “The best response,” said the French foreign minister, Jean-Marc Ayrault, “is European unity.” “As with the case of Brexit, the best way to defend Europe is to remain united,” he said. “This is a bit of an invitation that we are making to Mr. Trump. To remain a bloc. Not to forget that the force of Europeans is in their unity.”
China will ‘take off the gloves’
In the interview with The Journal, Trump said the One-China policy was up for negotiation. Beijing responded quickly and decisively. Its Foreign Ministry called the policy, which recognizes Beijing as the sole Chinese government, the foundation of China-US ties, and said it was nonnegotiable. People’s Daily, the mouthpiece of the governing Communist Party, said Trump “has been stunningly confident in his ostensible knowledge of the job, though he speaks like a rookie.” An unusually strongly worded editorial in the state-run China Daily said on Monday, that Trump was “playing with fire with his Taiwan game.” “If Trump is determined to use this gambit on taking office, a period of fierce, damaging interactions will be unavoidable, as Beijing will have no choice but to take off the gloves,” the newspaper said. A spokeswoman for the Chinese Ministry of Foreign Affairs, Hua Chunying, warned Trump on Monday that any effort to undermine the policy could backfire. “If anyone attempts to damage the One-China principle, or if they are under the illusion they can use this as a bargaining chip, they will be opposed by the Chinese government and people,” she said. “In the end, it will be like lifting a rock to drop it on one’s own feet.”
Mexico warns against punitive tariffs
Trump also took aim at German automakers, warning of a 35-percent tariff on any cars they build in Mexico and export to the United States. Shares of BMW, Volkswagen and Daimler fell on Monday after his comments, but BMW said the company would stick to its plans to open a plant in Mexico in 2019. “It’s very clear that we have to be prepared to immediately be able to neutralize the impact of a measure of that nature,” Ildefonso Guajardo Villarreal, Mexico’s economy minister, said Friday on a Mexican news show. “It would be a problem for the entire world,” Guajardo Villarreal warned. Such a tariff “will have a wave of impacts that can take us into a global recession,” he added.
And from Russia, a nod
Not surprisingly, Russian diplomats were unper t urbed by Tr u mp’s com ments on Nato. They welcomed the “obsolete” label and were enthusiastic at his suggestion that he would consider reducing sanctions against Russia if the country agreed to reduce its nuclear arsenal. Dmitry S. Peskov, a spokesman for President Vladimir Putin of Russia, said on Monday that “Nato is indeed a vestige,” according to Radio Free Europe. Consider ing t hat Nato “ is focused on confrontation and its entire structure is devoted to the ideals of confrontation, t he n , of cou r se, c a n h a rd ly be called a modern structure meeting the ideas of stability, sustainable development and security,” Peskov said. “Let’s wait until he assumes office before we give assessment to any initiatives,” he said. New York Times News Service
EADING, England—With its state-ofthe-art robotics, Magal Engineering’s factory, in the colorless outskirts of this busy commercial town west of London, is an important component of Britain’s booming car industry, churning out millions of sophisticated vehicle parts every year. Yet as Britain prepares to leave the European Union, Magal is having to rethink its operations here. The company has sister factories in France and Germany, imports components from them to assemble in Reading, and sends many finished products back across the English Channel—all with minimal paperwork and no tariffs. Britain’s departure from the European Union could change all of that, ending the tariff-free trade that Magal enjoys, potentially disrupting the hiring of crucial engineers from abroad and requiring new hires to keep up with the added paperwork. Britain’s exit is a “big worry” and ideally would be stopped, says Gamil Magal, Magal Engineering’s chief executive. But as a realist, he is preparing to live with it. That means suspending investment in Britain and contemplating production cuts here, even as the company continues to put money into France. With Britain, the policy is “wait and see,” Magal said, speaking in his office above this bustling factory in a building that once produced World War II aircraft. Although Britain’s economy has so far not suffered the economic blowback that many predicted would follow the vote in a referendum last year to quit the bloc, British companies that import or export goods and services are anxiously assessing the potential costs of departure. Complicating matters is continuing uncertainty over the terms of departure that the government wants to negotiate. Prime Minister Theresa May plans to start two years of formal talks with the European Union on Britain’s withdrawal, widely known as Brexit, by the end of March, and on Tuesday she is expected to give some more detail about her objectives. “We don’t know what is going to happen, the government doesn’t know what is going to happen, and I am not sure that the government even knows what it is asking for,” said David Bailey, professor of industrial strategy at Aston University. There are signs that British-based companies might be taking action already, ahead of the actual Brexit. In a survey of 233 financial services companies published in The Sunday Times of London last week, 39 said they would reduce staffing because of the Brexit vote, and half of that number had already started to do so.
For British banks, a big worry is whether they will be able to continue offering services to clients across the bloc. “Most international banks now have project teams working out which operations they need to move to ensure they can continue serving customers, the date by which this must happen, and how best to do it,” Anthony Browne, chief executive of the British Bankers Association, wrote in The Observer last year. “Their hands are quivering over the relocate button,” he added. Sectors like agriculture, hospitality and construction are worried about labor. They all rely heavily on workers from Southern or Eastern Europe, whose right to employment here may be curbed to achieve May’s objective of reducing immigration. May has not said explicitly whether she wants Britain to remain in Europe’s Customs Union, which provides for tariff-free trade across the 28-nation bloc, and includes some nonmembers like Turkey. Nor has she detailed what kind of relationship she wants with the European Union’s single market, which aims to eliminate nontariff barriers and to forge a single services market. But she said in a recent interview when Britain quits the union, it will not be keeping “bits” of its membership, suggesting that she will be seeking something closer to a clean break, or “hard Brexit.” And with the clock ticking toward a planned departure from the union in 2019, companies are already having to contemplate that outcome, even before May lays out her intentions on Tuesday. For Magal, the threat of trade tariffs is forcing him to rethink the structure of his business. The company assembles thermostatic control units for c ar manufacturers, including Jaguar Land Rover in Britain and Daimler in Germany. Tariffs could add anything up to 10 percent to the price of some of his products, an increase he can neither afford to absorb nor pass on. “We don’t make 10- percent profit—that’s for sure,” he said. “We won’t be able to increase the price, because the customer will say, ‘We will buy from the competition.’” The logic is to reduce the amount of products that are made in Britain for continental Europe, and vice versa. Magal said the European clients were asking him to consider moving production. “With all the new projects we are getting now from Europe, they are saying, ‘Why can’t you put it in your plant in Europe? Why do you need to do it in the UK?’” he said. New York Times News Service
Sweden gains, S. Korea reigns in world innovation rankings
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here’s something about those Nordic countries. In the battle of ideas, Sweden climbed to No. 2 and Finland cracked into the top five of the 2017 Bloomberg Innovation Index, which scores economies using factors, including research and development spending and the concentration of high-tech public companies. South Korea remained the big winner, topping the international charts in R&D intensity, value-added manufacturing and patent activity and with top-five rankings in high-tech density, higher education and researcher concentration. Scant progress in improving its productivity score—now No. 32 in the world—helps explain why South Korea’s lead narrowed in the past year. Silver-medal winner Sweden owes most of its rise to improvement in the manufacturing value-added metric, while Nordic neighbor Finland jumped two spots in large part because of the rise of hightech firms in the country. Norway held its No. 14 spot from last year. Fresh ideas tend to pay off big in Sweden, even as the current government is less business-friendly and has imposed labor taxes that could crimp business investment, said Magnus Henrekson, director of the Research Institute of Industrial Economics, a private foundation in Stockholm. The Swedes themselves promote an atmosphere of great personal ambition—unlike some European neighbors that emphasize the collective— and that’s a boon to innovation, he said. “In the culture, people are super individualistic—this means that people have ideas and are very interested in pursuing them in this way in order to become wealthy,” said Henrekson. “The incentives
are there and the tax system favors them.” Government financing, particularly for small firms, has made the difference in a country traditionally dominated by multi-national companies, said Asa Lindholm Dahlstrand, professor in Innovation Studies at the Centre for Innovation, Research and Competence in the Learning Economy at Lund University in Sweden. The emphasis on research and development—the country stayed at No. 5 for the R&D spending sub-category—has helped Sweden weather the continent’s economic storms of the past several years. “There’s a lot of focus on R&D in Sweden. We’ve seen what’s happened in a lot of other countries where they didn’t do it,” Dahlstrand said. One more cautionary note for Sweden in the coming year: While a very weak krona amid easy monetary policy has helped the country’s exports fly off the shelves, Henrekson warns that that benefit won’t last forever. “It’s never good in the long term to be able to make profits too easily just because your currency is under-valued,” he said. The biggest loser in this year’s Bloomberg Innovation Index was Russia, plunging 14 spots to No. 26, almost five times the size of the next-largest drop in the rankings. Battered by sanctions and the aftereffects of a couple years of subdued energy prices, Russia’s solid scores last year in manufacturing and productivity were destroyed in this year’s tally. Japan, where the yen is still struggling to recover from an almost two-year slide, dropped the most of any economy in the top 25, moving to No. 7 from No. 4 as they lost their best-in-world distinction for patent activity. Croatia also slipped three spots, to No. 41 from No. 38. Bloomberg News
Editor: Lyn Resurreccion • www.businessmirror.com.ph
The World BusinessMirror
Wednesday, January 18, 2017
IMF assumes modest US boost from Trump stimulus T he International Monetary Fund (IMF) is taking a cautious stance toward the policies of US President-elect Donald J. Trump, who takes office this week, assuming a modest boost to the US economy from his promise of fiscal stimulus.
The IMF maintained its forecast for global growth in 2017 of 3.4 percent, the Washington-based organization said on Monday in a quarterly update to its World Economic Outlook. Expansion for 2018 is forecast at 3.6 percent, also unchanged from the fund’s previous forecast in October. The impact of a Trump administration is one of the biggest unknowns facing the global economy. While Trump has promised to cut taxes and boost infrastructure spending, he’s also threatened to impose tariffs on trade partners, such as China and Mexico. Such punitive measures may sap growth if they provoke retaliation. Trump’s plan for policy implementation will become clearer after his January 20 inauguration in Washington. The high degree of uncertainty about what’s in store for US economic policy presents a “wider than usual range of upside and down risk factors,” IMF Chief Economist Maurice Obstfeld said at a press conference on Monday.
Policy uncertainties
While Trump has set out a general direction for economic policy— promising fiscal stimulus and lower taxes—his plans lack specifics, Obstfeld said. “The more expansionary policy mix in the US, if it materializes” could have positive spillovers by stoking demand in emerging markets, he said. On the negative side, a stronger dollar could take a toll on manu-
2.3%
The International Monetary Fund forecast for US economic expansion in 2017
facturing and drive up borrowing costs for emerging nations that hold dollar debts. The IMF bumped up its forecast for US growth by 0.1 percentage point this year and 0.4 point for 2018. The US economy will expand by 2.3 percent in 2017 before firming to a 2.5-percent rate in 2018, according to the update. Trump has pledged to boost US growth to an annual average of 3.5 percent—with the potential for 4 percent—and create 25 million jobs over the next decade. T he Federa l R eser ve i s now e x pec ted to ra i se rates at a les s g r adu a l pace t h a n I M F staf f projected in October, t he f u nd sa id , w it hout s pec i f y i ng t he nu mber of rate h i kes it a nt ic ipates t h i s yea r.
Economic scenarios
The IMF said its US forecast is only the most likely outcome among a wide range of scenarios for the world ’s largest economy, and that more detailed assumptions should be possible by the
Shoppers at a US mall. Bloomberg
next update to its outlook in April. The latest forecast also takes into account higher oil prices after an agreement in November by Organization of the Petroleum Exporting Countries (Opec) to limit supply. The IMF said its unchanged forecast for the world economy masks a divergence in the fortunes of advanced economies, which are seeing stronger growth due partly to a reduced drag from inventories, and those of emerging markets, where growth has been unexpectedly weak. In the UK domestic demand has stayed afloat better than expected in the aftermath of the June referendum to leave the European Union, the fund said. It lifted its forecast for the British economy this year, reversing a previous cut,
to 1.5 percent from 1.1 percent. The fund projects the euro area will expand 1.6 percent this year, up 0.1 percentage point from its October forecast. The IMF raised its forecast for Japan by 0.2-percentage point to 0.8 percent in 2017. It also increased its projection for China by 0.3 percentage point, now predicting that the world’s number two economy will grow 6.5 percent this year.
Mexico cut
Citing “US-related uncertainty,” the IMF slashed its projection for Mexico’s growth to 1.7 percent this year, down 0.6 percentage point from the October forecast. Trump has promised to end or renegotiate the North American Free Trade Agreement between
the US, Canada and Mexico that’s been key to Mexico becoming a manufacturing powerhouse over the past two decades. Also lowered was the forecast for India’s growth, by 0.4 percentage point to 7.2 percent in 2017, as consumption lags from the effect of the government’s decision to withdraw certain cash denominations. The IMF cut its Brazil forecast by 0.3 point to 0.2 percent growth in 2017. The IMF said the global economy could accelerate more quickly if stimulus turns out to be stronger in the US or China. However, growth could be weaker than expected if countries shift toward protectionism, credit conditions contract, geopolitical tensions flare, or China slows down more than anticipated. Bloomberg News
US crackdown on corporate wrongdoers may be undone by national borders T
he outgoing leadership of the Justice Department is ending its tenure with a bang, trying to show that the policy focused on pursuing cases against individuals involved in corporate misconduct was more than mere rhetoric. I n S e p t e m b e r 2 01 5 S a l l y Yates, the deputy attorney general, issued a memorandum declaring that companies seeking any credit for cooperating in an investigation would have to furnish information identifying those in the organization responsible for violations. Indictments announced last week that named corporate executives at Volkswagen, Takata and three global banks involved in foreign currency trading appear to be an effort to demonstrate that this new requirement has teeth. The challenge for prosecutors after the headlines have faded is that these defendants all reside in other countries. Whether many of them can be extradited to the United States to appear in a federal court to answer the charges is uncertain, meaning that the government’s
“get tough” approach on individual accountability might result in few successful prosecutions. Three foreign-currency traders affiliated with Royal Bank of Scotland, Citigroup and Barclays who are living in the London area were charged with conspiring to violate the antitrust laws by rigging the exchange rate between the euro and the dollar. They are the most likely to be extradited because the treaty between the US and Britain commits the countries to extradite their citizens for violations. There has been controversy over this liberal extradition policy. Three investment bankers who aided Enron in its transactions, who were called the NatWest Three because they worked for National Westminster Bank at the time, fought extradition for three years to keep from facing fraud charges in Houston. T heir case became a cause célèbre in London, including a l a st - d itc h— but u lt i m ate ly u nsuccessf u l— ef for t in Pa r l i a me nt to k e e p t he m f rom being extradited. T hey eventua l ly pleaded g uilt y and were
retur ned to England to finish their sentences. There may be a similar outcry over extradition of the currency traders because the Serious Fraud Office in Britain closed its investigation of their conduct last March, stating that it found “insufficient evidence for a realistic prospect of conviction.” One requirement for extradition is establishing probable cause that the offense took place, which may present a hurdle to getting the three defendants to the United States if the Serious Fraud Office’s decision to drop the case is given credence by the British courts. Six executives from Volkswagen who are German citizens were indicted on charges involving their roles in the company’s use of a “defeat device” to avoid environmental requirements for diesel engines in approximately 600,000 vehicles sold in the US. The company pleaded guilty to conspiracy, violation of the Clean Air Act and obstruction of justice, paying $4.3 billion in criminal and civil penalties along with agreeing to cooperate in a continuing investigation.
One Volkswagen executive, Oliver Schmidt, was arrested in Miami on January 7 as he was returning to Germany from a vacation. The government has asked that he be detained until trial because he is a flight risk given his minimal ties to the United States. If Schmidt were to retur n to Germany, then the German Constitution would prohibit his extradition to another country to face charges. If the US court orders him detained, Schmidt could be forced to spend months in jail before the case comes to trial, which would put enormous pressure on him to plead guilty to resolve the matter. The arrest of Schmidt highlights the problem the Justice Department faces in pursuing charges against the other five defendants. All are believed to be in Germany, and as long as they stay there they can avoid the fate of their co-worker. The New York Times also reported that at least two other Volkswagen employees, identified in the indictment as Supervisor B and Attorney A, could be charged in the case.
The protection from extradition afforded by Germany’s Constitution does not reach beyond its borders. The defendants indicted last week and any others who might be a target of the investigation would be well advised to stay in Germany for the foreseeable future because they could be sent to the US if found in another country. Takata pleaded guilty to wire fraud related to its sales of defective air bag inflaters, paying $1 billion in criminal fines and restitution that will fund a program to pay claims filed by those injured by its products. Three company executives were charged with conspiracy and five counts of wire fraud; the Justice Department says they issued false test reports to the company’s customers to cover up the defect. The extradition treaty between the US and Japan leaves it to the discretion of the government to decide whether to send a citizen to the other country. Whether the Japanese government would be willing to send the executives to face charges remains to be seen.
New York Times News Service
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Vietnam’s premier to raise foreign-investor caps on banks
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ietnam will increase the limits of foreign ownership in banks as early as this year to quicken the overhaul of the nation’s banking system and further lure overseas investments to boost economic growth, Prime Minister Nguyen Xuan Phuc said. “We will raise the ceiling and will also expand access to the securities market” for foreign investors, Phuc said in an interview with Bloomberg Television’s Haslinda Amin at the Government Office in Hanoi on Friday. “We will try to make it this year,” he added. Vietnam caps foreign ownership in banks at 30 percent and is seeking more investment to help strengthen the financial system, which has been hobbled by a surge in nonperforming loans to state-owned companies. Phuc didn’t specify the new ceiling to be introduced this year, but he indicated that the government might sell out completely from the more troubled banks. He singled out OceanBank, taken over by the State Bank of Vietnam in 2015, as a weak institution the government is willing to part with immediately. “Right now, if there are any foreign investors interested in buying any of our underperforming banks, we will sell them entirely,” he said. Financial services companies led gains in Vietnam stocks, driving the benchmark VN Index to its first advance in four days. Bank for Foreign Trade of Vietnam JSC added 1.5 percent to 37,900 dong as of 9:23 a.m. in Ho Chi Minh City trading, Vietnam Joint Stock Commercial Bank for Industry and Trade jumped 3 percent to 17,000 dong, while Bank for Investment and Development of Vietnam increased 2.5 percent to 16,200 dong.
‘Positive step’
Allowing greater foreign ownership of banks will attract more funds to the country and help the government deal with nonperforming loans, said Trinh Nguyen, a senior economist at Natixis SA in Hong Kong. “This will be a positive step forward should it happen,” she said. The government set up the Vietnam Asset Management Co. in 2012 to acquire bad loans from the banks, reducing the ratio to 2.5 percent of total loans in November from 17 percent. However, less than 5 percent of the transferred nonperforming loans have been resolved, the World Bank said in July. As well as considering higher foreign ownership in banks, the government is pushing ahead with moves to divest state companies outside the financial sector. It’s working to sell its entire stakes in the country’s two top breweries, Saigon Beer Alcohol Beverage Corp. and Hanoi Beer Alcohol Beverage Corp. Vietnam’s State Capital Investment Corp. last month sold 78.4 million shares in Vietnam Dairy Products JSC, the nation’s largest company that’s known as Vinamilk.
Foreign investment
Phuc, 62, a former vice premier before becoming prime minister in April last year, said he wants to make Vietnam among the top four investor-friendly economies in Southeast Asia this year. The government is developing initiatives to improve the countr y’s investment environment, including more protection on intellectual property rights, tax breaks and better access to electricity and land, he said. “Vietnam enjoys a so-called golden population—we have a very young work force, and we need to train them and make sure they are ready,” he said. “We will increase our investment in infrastructure.” Foreign investment, led by companies such as Samsung Electronics Co. Ltd., make up about 70 percent of Vietnam’s export industry and has transformed the economy into a manufacturing hub in Southeast Asia. Disbursed foreign direct investment climbed to a record $15.8 billion last year, helping to underpin economic growth of more than 6 percent. Phuc forecast “even higher growth” beyond this year, with an average of 7 percent economic expansion through 2020. “That requires us to improve the restructuring of the economy in all sectors,” he said. “We also need to reduce corruption and graft and develop a strong force of officials who are able to better integrate the Vietnamese economy into the world and implement the commitments that Vietnam has made” in its trade agreements, Phuc added. Bloomberg News
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Wednesday, January 18, 2017
The World
Samsung succession in disarray as Lee criminal case advances
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he long-orchestrated plan to cement Jay Y. Lee’s position atop Samsung Group may put him in jail instead, raising questions about who would step in to run South Korea’s biggest conglomerate in the aftermath. Prosecutors are seeking Lee’s arrest on allegations including bribery and embezzlement, which, if proven, could prompt him to relinquish duties at the family business. Potential replacements include executives running key divisions of the dominant electronics business, as well as a sister—hotel executive Lee Boo-jin. While a long shot, her anointment would mark a seismic shift in the way the nation’s patriarchal empires are run. After spending years following his father’s footsteps to the chairman’s seat of Samsung Group, Lee is trying now to avoid the missteps that triggered his father’s two criminal convictions. Even if the accusations against him involving South Korea’s president are proven in court, it’s still possible Lee could return to the company later or even call the shots from behind bars, just as executives from Hyundai Motor Co. and SK Group have done. “Chaebol executives have a history of managing from the jail, whether it be via lawyers or secretaries visiting them,” said Lee Kyung-mook, a professor at Seoul National University’s Graduate School of Business.
Samsung declined to comment when asked about a potential leadership vacuum. A court hearing is scheduled for Wednesday to determine whether to approve the prosecutor’s request for an ar rest war rant. W hether the warrant is granted, prosecutors would continue their probe, with a possible indictment coming later. Lee testified last month that he never ordered donations to be made in return for political favors. Shares rebounded on Tuesday after a two-day decline. Lee’s potential arrest in the scandal surrounding President Park Geun-hye is another calamity for the vice chairman of Samsung Electronics Co., the largest maker of mobile devices. Last year the company pulled its Galaxy Note 7 smartphone off the shelves because some devices burst into flames. The debacle cost Suwon-based Samsung an estimated $6 billion and a competitive advantage before Apple Inc. released its iPhone 7 models. Lee, 48, has had trouble matching the success of his father, Lee Kun-hee, who transformed Samsung Electronics from a copycat appliance maker into a global powerhouse in TVs, smartphones and memory chips. The elder Lee— South Korea’s richest man—suffered a crippling heart attack in May 2014, and Samsung shares fell that year and the next before recovering in 2016. Bloomberg News
BusinessMirror
Editor: Lyn Resurreccion • www.businessmirror.com.ph
MH370 search ends; no plane, few answers S
YDNEY—After nearly three years, the hunt for Malaysia Airlines Flight 370 ended in futility and frustration on Tuesday, as crews completed their deep-sea search of a desolate stretch of the Indian Ocean without finding a trace of the plane. The Joint Agency Coordination Center in Australia, which helped lead the $160 -million hunt for the Boeing 777 in remote waters west of Australia, said the search had officially been suspended after crews finished their fruitless sweep of the 120,000-square kilometer search zone. “Despite every effort using the best science available, cutting-edge technology, as well as modeling and advice from highly skilled professionals who are the best in their field, unfortunately, the search has not been able to
locate the aircraft,” the agency said in a statement, which was a joint communiqué between the transport ministers of Malaysia, Australia and China. “Accordingly, the under water search for MH370 has been s u s p e nd e d . T he d e c i s ion to suspend the under water search has not been ta ken light ly nor w ithout sadness.” Officia ls investigating the plane’s disappearance have recommended search crews head north to a new area identified in a recent analysis as a possible crash site. But the Australian government has already nixed that idea. Last year Australia, Malays i a a nd C h i n a — w h ic h h av e each helped fund the search— agreed that the hunt would be suspended once the search zone was exhausted unless new evidence emerges that pinpoints the plane’s specific location. Since no technology currently exists that can tell investigators exactly where the plane is, that effectively means the most expensive, complex search in aviation history is over.
There is the possibility that a private donor could offer to bankroll a new search, or that Malaysia will kick in fresh funds. But no one has stepped up yet, raising the bleak possibility that the world’s greatest aviation mystery may never be solved.
239
The number of passengers and airline staff on the doomed Malaysia Airlines Flight 370
For the families of the 239 people on the doomed aircraft, that’s a particularly bitter prospect, given the recent acknowledgment by officials that they had been looking for the plane in the wrong place all along. L ast December t he t ra ns port bureau announced that a review of the data used to estimate where the plane crashed, coupled with new information on ocean currents, strongly suggested the plane hit the water in a 25,000-square kilometer area directly north of the search zone. But Australia’s government rejected a recommendation from the bureau that crews be allowed to search the new area to the north, saying the results of the experts’ analysis weren’t precise enough to justify continuing the hunt.
The three countries’ transport ministers reiterated that view in their statement on Tuesday, noting: “While combined scientific studies have continued to refine areas of probability, to date no new information has been discovered to determine the specific location of the aircraft.” T he lack of resolution has caused agony for family members of the flight’s passengers, who have begged officials to continue the hunt for their loved ones. “The whole series of events since the plane disappeared has been nothing but frustrating,” said Grace Nathan, a Malaysian whose mother was onboard Flight 370. “It continues to be frustrating and we just hope they will continue to search.... They’ve already searched 120,000 square kilometers. What is another 25,000?” Investigators have been stymied again and again in their efforts to find the aircraft since it vanished during a flight from Kuala Lumpur to Beijing on March 8, 2014. Along the way, hopes were repeatedly raised and smashed by false leads: Underwater signals wrongly thought to be emanating from the plane’s black boxes. Possible debris fields that turned out to be sea trash. Oil slicks that contained no jet fuel. A large object detected on the seafloor that was just an old shipwreck. In the absence of solid leads, investigators relied largely on an analysis of transmissions between the plane and a satellite to narrow down where in the world the jet ended up—a technique never previously used to find an aircraft. AP
Gene Cernan, last astronaut to walk on the moon, 82 H OUSTON—A stronaut Gene Cernan traced his only child’s initials in the dust of the lunar surface. Then he climbed into the lunar module for the ride home, becoming the last person to walk on the moon. It was a moment that defined the Apollo 17 commander in both the public eye and his own. “Those steps up that ladder, they were tough to make,” Cernan recalled in a 2007 oral history. “I didn’t want to go up. I wanted to stay a while.” His family said his devotion to lunar exploration never waned, even in the final year of his life. Cernan died on Monday at age 82 at a Houston hospital following ongoing heath issues, family Spokesman Melissa Wren told The Associated Press. “Even at the age of 82, Gene was passionate about sharing his desire to see the continued human exploration of space and encouraged our nation’s leaders and young people to not let him remain the last man to walk on the moon,” his family wrote in a statement released by the National Aeronautics and Space Administration (Nasa). On December 14, 1972, Cernan became the last of only a dozen men to walk on the moon. Cernan called it “perhaps the brightest moment of my life.... It’s like you would want to freeze that moment and take it home with you. But you can’t.” Decades later, Cernan tried to ensure he wasn’t the last person to walk on the moon, testifying before Congress to push for a
U.S. Navy Commander and astronaut for the Apollo 17, Eugene Cernan, is pictured in his space suit. Cernan, the last man to walk on the moon, died on Monday at 82. Nasa via AP
return. But as the years went by he realized he wouldn’t live to witness someone follow in his footsteps—still visible on the moon more than 40 years later. “Neil [Armstrong, who died in 2012] and I aren’t going to see those next young Americans who walk on the moon. And God help us if they’re not Americans,” Cernan testified before Congress in 2011. “When I leave this planet, I want to know where we are headed as a nation. That’s my big goal.” Cernan died less than six weeks after another American space hero, John Glenn, the first American to orbit the Earth in 1962. Their flights weren’t the first or last of the Mercury and Apollo eras. Yet to the public they were the bookends of America’s space age glory.
Cer nan g uided the lander, named Challenger, into a lunar valley called Taurus-Littrow, with Harrison “Jack” Schmitt at his side on December 11, 1972. He recalled the silence after the lunar lander’s engine shut down. “That’s where you experience the most quiet moment a human being can experience in his lifetime,” Cernan said in 2007. “There’s no vibration. There’s no noise. The ground quit talking. Your partner is mesmerized. He can’t say anything. “The dust is gone. It’s a realization, a reality, all of a sudden you have just landed in another world on another body out there [somewhere in the] universe, and what you are seeing is being seen by human beings—human eyes— for the first time.” AP
ExportUnlimited BusinessMirror
Editor: Efleda P. Campos • Wednesday, January 18, 2017 A9
Citem, DCP, EMB team up to boost PHL’s joining world’s major consumer-goods trade fair
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HE Center for International Trade Expositions and Missions (Citem) sustains its creative collaboration with the Design Center of the Philippines (DCP) and the Export Marketing Bureau (EMB) of the Department of Trade and Industry (DTI) to strengthen the Philippines’s participation in Ambiente, scheduled for February 10 to 14 at Messe Frankfurt in Germany.
Ambiente is considered the world’s leading consumer-goods trade fair, with an average of 137,000 visiting trade buyers from 143 countries and more than 4,000 exhibitors from 95 countries. It
is the primary venue where trends for the international consumer-goods industry over the coming year are defined, and the go-to sourcing destination of buyers from the international contract
upcoming events Compiled by Louise Kaye G. Mendoza DTI-EMB Knowledge Processing Division
JAN 26
Time: 8:30 a.m.-4:30 p.m. Event: Department of Finance Services for Exporters • Returned Shipment: Requirements and Procedure • Duty Drawback, Refund and Abatement • Abandonment: Kinds, Effects and Treatment • Value-Added Tax Refund • Exporters’ Accreditation under the Export Development Act of 1994 (Republic Act 7844) Venue: Penthouse, DTI International Building, 375 Sen. Gil Puyat Avenue, Makati City
market, particularly hotel, restaurant and catering sectors. “With a diverse range of buyers from all over the globe coming together in one enormous sourcing event, Ambiente opens up countless doors of trade opportunities for Philippine exporters,” Citem Executive Director Rosvi C. Gaetos said. The Philippine collective under Citem reestablished its presence in Ambiente last year, yielding total export sales of $2.5 million. For the upcoming Ambiente 2017 edition, 14 Philippine home exporters under the LifestylePhilippines brand shall be concentrated at the fair’s Living Hall, targeting total export sales of $3 million. “Living” is one of the three main hall organizations of Ambiente in which international exhibitors showcase their home products, ranging from accessories, interior design, indoor and outdoor decorations, and avant-garde furnishings. For the LifestylePhilippines Pavilion in Ambiente, Citem has been working closely with DCP and product specialist Eric Paras since September to develop contemporary product collections that will respond to the demands of the market, and reflect the unique strengths of the participating Philippine exporters. “The story is more about the companies, their beginnings, strengths and specializations,” Paras said. “I wanted to capitalize on handmade components of our products but not in a vernacular perspective. The direction is sophistication in crafts and the goal is to marry function and commercial appeal in order to generate business for our exporters.” Citem has partnered with EMB to bring three companies under the Regional Interactive Platform for Philippine Exporters Plus (Ripples PLUS) program to Frankfurt, Germany, marking its first international trade-show participation under the home sector. Ripples PLUS is a jointly implemented program of the DTIEMB, DTI-Regional Operations Group, Philippine Trade Training Center and Citem that aims to enhance export capacity and competitiveness of Philippine companies through training, product development, marketing support and promotions. Trade Secretary Ramon M. Lopez, as part of his Trabaho at Negosyo agenda, recently gave his directive to create a more dynamic DTI, calling on the Industry Promotions Group, where Citem, DCP and the EMB belong, to strengthen its services for micro, small and medium enterprises (MSMEs). “The Philippine participation in Ambiente establishes the creative collaboration that Citem wants to maintain with DTI agencies and, hopefully, start with other government offices, to achieve the vision of Secretary Lopez in helping MSMEs attain global competitiveness,” Gaetos said. Rai de Mesa
Doing FTAs with the European Union
By Jose Antonio Buencamino | Commercial Counselor, Philippine Trade and Investment Center (PTIC)-Brussels and Jeoffrey Houvenaeghel, Trade Assistant, PTIC-Brussels
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Part One
HE Philippines-EU free-trade agreement (PHL-EU FTA) is an essential component of the Philippines’s trade and investment strategy for Europe.
After two formal scoping meetings held in November 2014 and September 2015, and numerous intersessional engagements, the PHL-EU FTA negotiations were formally launched on December 22, 2015. The first round of negotiations took place in Brussels from May 23 to 27, 2016. At this stage, there was no exchange of texts between the Philippines and the EU, because the main objective of the first round was to establish clarity on respective approaches, ambitions and expectations in the different topical areas for negotiation: trade in goods, rules of origin, sanitary and phytosanitary measures (SPS), services and investments, intellectual property rights (including geographical indications), competition, trade and sustainable development and dispute settlement. Negotiating groups on technical barriers to trade (TBT), customs procedures and trade facilitation, and government procurement did not convene during the first round. The second round is scheduled in Manila from February 13 to 17, 2017. An exchange of proposed texts for each of the negotiating areas is soon expected in the lead up to the second round. In this new article, we take a closer look at the EU’s record in terms of FTAs negotiated,
concluded and implemented. We also delve into the highly complex processes that bind the EU and its member-states with FTA partners.
The EU’s commitment to free trade
THE EU is a keen supporter of trade agreements, because it represents the world’s largest trading bloc formed by its 28 member-states. It has been estimated by the International Monetary Fund that 90 percent of global demand will come from outside the EU over the next several years. As a result, the EU has most to gain from global trade liberalization through bilateral FTAs. By our count, the EU has in place FTAs with 65 countries, which take on different forms and names. There are three types of agreements the EU negotiates and concludes: (1) free trade, economic partnership and association agreements; (2) customs unions; and (3) partnership and cooperation agreements. A free-trade and economic partnership agreement is a legal framework that significantly reduces or completely removes tariffs in bilateral trade. An association agreement is a treaty that creates a framework for cooperation and includes political, social, cultural, trade and security dimensions. It is a step further than an FTA as it aims to align the third country with the EU’s standards and values. To be continued
A10 Wednesday, January 18, 2017 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
Discernment may hold the key
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HERE must be something in President Duterte’s character and demeanor that endears him to his hosts when he visits foreign countries, which many of us in our country, notably his critics, have so far failed to discern since he assumed the presidency. Otherwise, why is it that, despite his controversial statements, his seemingly uncontrollable tongue, the bad things that have been and are being written about him in the local and foreign press, particularly his “bloody and brutal” war on drugs, he has managed to score impressively in his foreign trips, far beyond the expectations of even his most ardent admirers?
Perhaps, we have not fully developed what outgoing Central Bank Governor Amando M. Tetangco Jr. described as the ability to be more discerning in distinguishing what is political noise and what should be pursued. Consider the report of Finance Secretary Carlos G. Dominguez III that this early in his administration, Duterte has already managed to attract close to P1 trillion in official development assistance (ODA). “And I am only counting the amounts from China and Japan, and there’s more ODA that have been received but haven’t been counted in from various countries,” Dominguez said in his statement released by Malacañang. Duterte has also previously visited Thailand, Vietnam, Lao PDR, South Korea and Brunei Darussalam. The finance chief said he was referring specifically to the amount of ODA received, not including that which stand to be gained in the trade pacts that the President has already signed with the leaders of the countries he has visited. If Duterte was that inept as a leader, why this huge assistance from his hosts, which, if managed well, would help the country’s economy leapfrog to the forefront? Already, it is being bruited about that the Philippines’s growth story will continue despite growing external and domestic risks. Economists from banking giant HSBC, in a research note issued recently, forecast a 6.8-percent GDP growth for 2016 and 6.5 percent for 2017 and 2018. The World Bank, in its 2017 Global Economic Prospects, said it expects sustained economic growth in the Philippines at 6 percent to 7 percent level in the next three years. The watchdog Standard & Poor’s also upgraded its growth forecasts for the Philippines for 2016 and 2017, as it continues to see the economy remaining a “super performer” in the region. Of course, domestic growth will continue to be threatened by several factors. The “domestic risk” list of outgoing Bangko Sentral ng Pilipinas Governor Tetangco mentioned traffic, lack of infrastructure and the weather. His last item on the list was “political noise and the need to develop more discernment so we can distinguish what is noise and what needs to be pursued.” In a recent speech before journalist-members of the Edsa Shangri-La Tuesday Club, Tetangco said that, despite the external and domestic risks (including the controversial statements of Duterte that are invariably described as “troubling” by some foreign businessmen operating here), “the country’s underlying growth story remains intact.” Tetangco’s challenge to his audience: “We hope that you who actually write the news and determine what gets printed and talked about will help us put this story front and center.” Since 2005
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Higher contributions mean more savings, bigger benefits Susie G. Bugante
All About Social Security
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resident Duterte recently approved the recommendation of the Social Security Commission (SSC) to increase Social Security System (SSS) pension benefits by P1,000 effective January 2017 and another P1,000 in 2022 or earlier. Finally, the long-awaited clamor of some 2.2 million pensioners will be realized. The President, likewise, approved the increase of the contribution rate by 1.5 percent, from 11 percent to 12.5 percent, as well as the maximum salary subject to SSS contribution from P16,000 to P20,000, effective May 2017. While the pensioners and majority of the SSS members expressed gladness at the benefit increase, there were those who questioned the rate hike as violative of the socialsecurity law. The SSS management hastened to assure the public that there was no violation of the law, since the benefit increase will be financed by current contributions and investment income, while the
contribution hike by May 2017 will be used to enlarge the Investment Reserve Fund, to generate higher yields for investments, and to further strengthen the viability of the pension fund for future obligations. As a social-security institution, the SSS is mandated to promote social justice by providing meaningful benefits to its members when they retire. Since 1980, when the contribution rate was at 8.4 percent, the contribution rate was adjusted three times only: first in 2003 by one percentage point, then again in 2007 also by another one percentage point in both instances shouldered solely by the employer. The most recent
With all due disrespect
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By Paul Krugman | New York Times News Service
S a young man, Congressman John Lewis, who represents most of Atlanta, literally put his life on the line in pursuit of justice. As a key civil-rights leader, he endured multiple beatings. Most famously, he led the demonstration that came to be known as Bloody Sunday, suffering a fractured skull at the hands of state troopers. Public outrage over that day’s violence helped lead to the enactment of the Voting Rights Act.
Now Lewis says he won’t attend the inauguration of Donald J. Trump, whom he regards as an illegitimate president. As you might expect, this statement provoked a hysterical, slanderous reaction from the presidentelect—who, of course, got his start in national politics by repeatedly, falsely questioning President Barack Obama’s right to hold office. But Trump—who has never sacrificed anything or taken a risk to help others—seems to have a special animus toward genuine heroes. Maybe he prefers demonstrators who don’t get beaten? But let’s not talk about Trump’s ravings. Instead, let’s ask whether Lewis was right to say what he said. Is it OK, morally and politically, to declare the man about to move into the White House illegitimate? Yes, it is. In fact, it’s an act of patriotism. By any reasonable standard, the 2016 election was deeply tainted. It wasn’t just the effects of Russian
intervention on Trump’s behalf; Hillary Clinton would almost surely have won if the Federal Bureau of Investigation hadn’t conveyed the false impression that it had damaging new information about her, just days before the vote. This was grotesque, delegitimizing malfeasance, especially in contrast with the agency’s refusal to discuss the Russia connection. Was there even more to it? Did the Trump campaign actively coordinate with a foreign power? Did a cabal within the FBI deliberately slow-walk investigations into that possibility? Are the lurid tales about adventures in Moscow true? We don’t know, although Trump’s creepy obsequiousness to Vladimir Putin makes it hard to dismiss these allegations. Even given what we do know, however, no previous US president-elect has had less right to the title. So why shouldn’t we question his legitimacy? And talking frankly about how
adjustment was in 2014, by 0.6 percent, this time equally shared by the employer and employee at 0.3 percent each rounding off the contribution rate at the current 11 percent. Benefits, on the other hand, were raised 22 times from 1980 to 2014, leading to the reduction of the fund life from perpetuity to just 25 years today. To restore actuarial equilibrium, the SSS has adopted a reform agenda that includes the gradual raising of the contribution rate to around 17 percent, as well as the adjustment of the salary ceiling to more realistic level. The contribution rate adjustment, lately, has become a contentious issue primarily because it has become so politicized. Instead of it being a business decision meant to ensure the long-term viability of the pension fund and its capability to provide meaningful benefits, it has been sullied with politics. Thankfully, this new Congress has seen fit to pass a House bill giving the SSS the sole authority to increase premium contributions. House Bill 2158 will amend the SSS law by authorizing its board to increase premium contributions without the approval of the president. If this bill becomes a law, it will surely help shield the pension fund from politics. Now, looking at the matter with
objective eyes, it is about time to raise the contribution rate. Compared with other social-security institutions around the world that started at about the same time as the SSS and with a similar scheme, their contribution rates are now way above 20 percent. Locally, the Government Service Insurance System (GSIS), which covers public-sector employees, has a rate of 21 percent, 9 percent being contributed by the employees and 12 percent by the government as employer, based on the worker’s actual salary. Hence, government workers’ pensions are relatively higher than private-sector workers since contributions were higher. Thus, to have higher pensions, one must save more. One’s contributions to the SSS, after all, are not an expense but rather a form of forced savings, which at the end of one’s productive years, will be received back as pension benefits for life.
Trump gained power isn’t just about truth-telling. It may also help to limit that power. It would be one thing if the incoming commander in chief showed any hint of humility, of realizing that his duty to the nation requires showing some respect for the strong majority of Americans who voted against him despite Russian meddling and the FBI’s disinformation dump. But he hasn’t and won’t. Instead, he’s lashing out at and threatening anyone and everyone who criticizes him, while refusing even to admit that he lost the popular vote. And he’s surrounding himself with people who share his contempt for everything that is best in America. What we’re looking at, all too obviously, is an American kakistocracy—rule by the worst. What can restrain this rule? Well, Congress still has a lot of power to rein the president in. And it would be nice to imagine that there are enough public-spirited legislators to play that role. In particular, just three Republican senators with consciences could do a lot to protect American values. But Congress will be much more likely to stand up to a rogue, would-be authoritarian executive if its members realize that they will face a political price if they act as his enablers. What this means is that Trump must not be treated with personal
deference simply because of the position he has managed to seize. He must not be granted the use of the White House as a bully pulpit. He must not be allowed to cloak himself in the majesty of office. Given what we know about this guy’s character, it’s all too clear that granting him unearned respect will just empower him to behave badly. And reminding people how he got where he is will be an important tool in preventing him from gaining respect he doesn’t deserve. Remember, saying that the election was tainted isn’t a smear or a wild conspiracy theory; it’s simply the truth. Now, anyone questioning Trump’s legitimacy will be accused of being unpatriotic—because that’s what people on the right always say about anyone who criticizes a Republican president. (Strangely, they don’t say this about attacks on Democratic presidents.) But patriotism means standing up for your country’s values, not pledging personal allegiance to Dear Leader. No, we shouldn’t get into the habit of delegitimizing election results we don’t like. But this time really is exceptional, and needs to be treated that way. So let’s be thankful that Lewis had the courage to speak out. It was the patriotic, heroic thing to do. And America needs that kind of heroism, now more than ever.
For more details on SSS programs, members can drop by the nearest SSS branch, visit the SSS web site (www.sss.gov.ph), or contact the SSS call center at 920-6446 to 55, which accepts calls from 7 a.m. on Monday all the way to 7 a.m. on Saturday. Susie G. Bugante is the vice president for public affairs and special events of the SSS. Send comments about this column to susiebugante.bmirror@gmail.com.
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opinion@businessmirror.com.ph
Tourism goals and the problem ‘behind’ us
Looking a gift horse Teddy Locsin Jr.
Free fire
Michael Makabenta Alunan
on the contrary
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ourism executives are bragging they can hit the target of 6.5 million foreign tourists this year, but what could possibly cause a backlash from behind is our stark lack of infrastructure and amenities that service literally the “behind”. Come forth with comfort? This figure can easily be reached with the global promotions of the Miss Universe pageant 2017, the Philippines as chairman now of the Association of Southeast Asian Nations (Asean), and the closer ties established lately with China, Japan, Russia, as well as with members of the Asia-Pacific Economic Cooperation. Tourism prospects are ever brighter because, out of China’s 120 million outbound tourists in 2015 alone, who spent about $104.5 billion abroad, only about half-a-million visited the Philippines in 2015, or an insignificant 0.004 percent of the total. China’s top 5 destinations are South Korea, Taiwan, Japan, Hong Kong and Thailand, and nowhere is the Philippines in sight. As tourists come to the Philippines, their first impression will be formed at our airports. Retired political science UP Prof. Clarita Carlos, a Facebook friend, recounted her ordeal at one of our international airports, where she was No. 28 in a queue on only three cubicles in the women’s comfort room, a local euphemism for toilet. One of the cubicles was reserved for seniors, but she realized senior women took an average three times longer so she had no choice but endure the discomfort of holding on longer than usual against nature’s calling. Legislate more women toilets. She suggested: “Do not travel,” which is bad for our tourism; and second, “Bring your own toilet,” which is her sarcastic way of expressing her gripes and grievances. The impressions do not end with the airports, as tourists will surely shop around in our malls and eat in local restaurants. As many are backpack or budget tourists who shun fivestar hotels, they will likely visit our malls, restaurants and other establishments, where they can witness women queuing up for their turn. What is worse and lamentable is that even known international food chains like MacDonald’s do not provide enough toilets (in some franchise outlets). There are many cases also of only one toilet shared by both men and women. The same is true for public facilities. Years back, I witnessed one toilet shared by both men and women at the end of the LRT 2 line at Recto Avenue, where thousands of commuters get off every few minutes. As there were no public toilets, one had to “seek comfort” elsewhere, to the disdain of nearby restaurants if you do not order food in exchange. It’s high time Congress and local government units (LGUs) pass bills and ordinances requiring bigger toilets for women. Gender equality and women empowerment must not literally mean equal number of toilet seats, but must address specific needs of women when nature calls. This means more space and time, and therefore more cubicles, unlike men who just need urinals against the wall. 55 die a day from poor toilets. A friend of mine had a daughter who went through college in Manila without using the toilets and, thus, developed kidney problems that led to her youthful death. She commuted from Quezon City, and only relieves herself when she gets back home after school. Although facilities have improved much since then, former Education Secretary Armin Luistro still admitted in the 2016 Rotary International Conference on Water, Sanitation and Hygiene in Schools (WASH) that
The National Sewerage and Septage Management Program said 55 Filipinos die daily because over 90 percent of sewage is not collected or treated. And only 10 percent of the population has access to piped sewage systems; and for those with toilets, many do not have septic tanks. 3,628 elementary and secondary schools still had no regular source of safe and clean water. While the national toilet-to-pupil ratio of one toilet to 39 students is tolerable, other areas have a one-to-100 ratio. The National Sewerage and Septage Management Program itself reports that 55 Filipinos die daily because over 90 percent of sewage is not collected or treated. And only 10 percent of the population has access to piped sewage systems; and for those with toilets, many do not have septic tanks; and for those with septic tanks, most have open bottoms that result in leaching into aquifers, from where deepwells for drinking derive water. And even for enclosed septic tanks, many do not undergo regular desludging. The problem behind ass? The United Nations Children’s Fund reports that over 30 million people in the Philippines do not have watersanitation facilities. Of this number, about 7.8 million people are forced to open defecation, in the bushes, rivers and, in urban poor settings, in plastic bags that are thrown with the trash. These unhygienic practices cause diarrhea, amoebiasis, cholera and typhoid fever, etc., which are the causes of death, particularly among infants, and also cause the high health costs for the government. As prevention is better and cheaper than cure, the government must invest massively in public toilets, which require investments in water systems. In short, when the problem of lack of toilets gets TOO BIG, you need more clean WATER systems. And when the demands of the behind ask for it, the government must heed nature’s call. No need to cover our ass? For past administrations, particularly during Imelda Marcos’s time, we tended to show only what was beautiful and had slum areas covered with walls. But for the first time in history, we hear a president who is not ashamed that foreigners see our stark ugly reality. And to borrow his foul-mouthed language, he is indeed not afraid to cover his ass. He even brought Japanese Prime Minister to his humble home, to show everything, warts and all. This is a signal to everyone to be more transparent and down-to-earth. For so long, we have been hiding reality from the top and from the front, thus, problems below and behind remain unaddressed. I can’t understand why we are targeting universal access to safe and adequate toilets only by 2028, and not soon enough. And, yet, Tourism Secretary Wanda Corazon T. Teo aims to hit 12 million foreign tourists and 89 million domestic tourists by Duterte’s end of term in 2022. I don’t think we can move forward to the front if we don’t address the problem BEHIND ASS (US), otherwise, we will continue to remain BEHIND in all indicators, as we brag about the highest growth rate in the region. E-mail: mikealunan@yahoo.com
Continued from A1
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ut the other side, the vast majority, finds intolerable the prospect of losing a drug-buster and the prospect of a returning drug-coddling administration. So the gift of resignation is rejected by both sides. But let us look in the mouth this gift horse of resignation as the price
of federation. In the back teeth we will find implied, the greater gift of
Wednesday, January 18, 2017 A11
stopping the return by succession of a drug-coddling administration, should Duterte predecease the end of his term or the abbreviation of his tenure by coup d’etat—as they hope and conspire who nocturnally park their cars in the now empty lot of the old Samar house behind high walls and a closed gate. But implication seems not enough to allay fears of a drug-trade rehabilitation under a returning administration. Hey, this is like rap. Okay, then, the next time Duterte offers to resign if federalism is adopted, he must add parliamentary government under a real chancellor and maybe a nominal president for ceremonial purposes at best. That
It’s time to talk to North Korea
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By Andrei Lankov | Bloomberg View
.S. President-elect Donald J. Trump sounds awfully certain about one thing. After North Korean leader Kim Jong Un declared on New Year’s Day that his country was on the verge of testing an intercontinental ballistic missile (ICBM) capable of reaching the US, Trump condescendingly tweeted, “It won’t happen!” As a matter of fact, it will happen—unless a Trump administration radically rethinks US policy toward the North. The most generous interpretation of Trump’s bluster is that the incoming US president doesn’t believe North Korea will be able to develop a functioning, nuclear-tipped ICBM. Such faith is unwarranted. To the surprise of foreign observers, the North has, in recent years, steadily and successfully conducted a series of nuclear and ballistic missile tests, including one from a submarine. Most experts believe that sometime within the span of Trump’s first term, the US intelligence community will notify him that North Korea has successfully tested an ICBM and will, in the near future, deploy a significant ICBM and SLBM force capable of striking the continental US. This would make North Korea the world’s third country, after China and Russia (and leaving out, for obvious reasons, the UK and France), capable of wiping out San Francisco. The other way to interpret Trump’s comment is as a threat, a pledge to stop any progress toward a working ICBM. None of the current strategies for doing so, however, are going to work. Trump himself seems to believe that China “can strangle” North
Korea easily. Yet, it’s clear now that China will never put enough pressure on the North to halt its weapons programs. This shouldn’t come as any surprise. During my frequent trips to Beijing, Chinese experts and diplomats have never tired of reminding me that, while China strongly dislikes North Korea’s nuclear adventurism, it prefers the status quo to all other alternatives—and won’t take any steps that might destabilize North Korea. Threatening China on other fronts—on Taiwan, say, or trade—is likely only to increase resistance in Beijing. Even so-called secondary sanctions that target Chinese banks and companies doing business with the North are unlikely to be effective. Chinese leaders have many ways to respond to such pressure—for instance, by establishing a separate bank to deal exclusively with North Korea, as they did to get around sanctions against Iran. Indeed, given the prospects for a swift deterioration in US-China ties under a President Trump, it’s more likely that China will weaken, rather than enforce, existing sanctions against the North. Since China accounts for over 90 percent of North Korea’s foreign trade, that would virtually guarantee their failure.
This reality has, in certain circles, revived the once-taboo idea of a preemptive strike to take out North Korea’s nuclear program. Yet, while a successful air-andmissile campaign might set the North Korean program back a few years, there are good reasons such a strategy hasn’t been on the table until now.
It’s also important that the market-oriented reforms initiated by Kim are working. According to international estimates, the 2016 harvest was 7 percent above the 2015 level; rice production increased an impressive 23 percent. The North Korean economy, driven by an unofficially tolerated private sector, is growing at close to 3 percent to 4 percent. Remarkably, this recovery began soon after the sanctions were introduced— further proof of their ineffectiveness. This reality has, in certain circles, revived the once-taboo idea of a preemptive strike to take out North Korea’s nuclear program. Yet, while a successful air-and-missile campaign might set the North Korean program back a few years, there are good reasons such a strategy hasn’t been on the table until now. The North would almost certainly retaliate by shelling Seoul, home to 24 million people. And even if not, a strike would likely destroy the US-Korea alliance. Many South Koreans would view preemptive American action as criminally selfish—addressing a distant threat to the US at the cost of creating a much more immediate
repeals any hope of any succession. We will have a complete break— with the past as we deplore it, and a complete break with the present as the losers of the last election detest it. Everyone will be gone, swept away, and a fresh start will be started. So what do all of us have to lose? Only a form of government that left the once leading country of Asia after the war, far behind the rest of it today. However, if you tack on the waiver of congressional approval and judicial review of martial law, forget any kind of Charter change. Everyone will oppose it except those who hope to be able once more, as in the Marcos time, to steal with impunity again.
threat to South Korea. Finally, some observers seem to hold out hope that Trump, a selfdescribed “great” dealmaker, might be able to talk Kim out of his nukes in direct negotiations. This, too, is a futile idea. US and North Korean interests are fundamentally incompatible. North Korean leaders fear that giving up their nukes would leave them dangerously vulnerable; they only too well remember what happened to Muammar Qaddafi after he negotiated away his nuclear program. The truth is that for more than a decade, there’s been no real chance of fully eliminating the North’s nuclear program. Even now, though, the US could negotiate something better than the current situation: a verifiable freeze on nuclear and missile testing, before North Korea develops an ICBM. Of course, Kim isn’t going to restrain himself for free. In return, he will demand many things—a hefty aid package, above all, but also political concessions, including a formal peace treaty. No doubt his regime will probably try to cheat. The opponents of such a compromise will describe it as a terrible precedent, even blackmail—and they may be right. Unlike Iran, North Korea will remain a nuclear power even after signing such a deal. But the alternatives—either a major war that drags in the US and China, or a fully armed North with the proven capacity to attack the US mainland —are worse. As long as there’s still a chance of striking such a compromise, the new US president should be doing everything he can to seize it.
Trump: Kremlin employee of the month? By Nicholas Kristof New York Times News Service
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umor writer Andy Borowitz recently joked that Donald J. Trump had been named the Kremlin’s “employee of the month”. I giggled at that, and then winced. It’s painful even to joke about. Some of the most explosive reports about America in the last few days appeared in Israeli newspapers. They suggested that US intelligence officials had warned Israel to “be careful” about sharing classified information with the Trump White House, for fear that it would be given to Russia. US intelligence officials reportedly cautioned that Vladimir Putin might have “leverages of pressure” to extort Trump. That presumably was a reference to the hanky-panky recounted in the dossier alleging that Moscow compromised Trump by filming him cavorting with prostitutes in a Moscow hotel. Perhaps more troubling are suggestions of collusion between Moscow and the Trump campaign. Trump strongly denies all this, the dossier has zero public evidence behind it, and it should be treated with skepticism. But it reflects an unprecedented uncertainty: There is a disorienting kernel of doubt about whether we can fully trust the man who will occupy the Oval Office. So is our new president a Russian poodle? Here’s what we know. The dossier was gathered by a former British MI6
spy, Christopher Steele. A onetime British ambassador to Russia described Steele as a “very competent professional operator” who would not make things up. Still, the dossier began as opposition research funded by people looking for dirt on Trump, and for weeks it has been in the hands of news organizations (including The Times), the FBI, politicians and others, and no one has been able to prove its allegations. Perhaps the closest: The BBC suggested that the “head of an East European intelligence agency” was aware of the material and that Central Intelligence Agency (CIA) officers investigating the issue provided details, including that there was “more than one tape”. Look, it’s poetic justice that Trump, who for years falsely bellowed that President Barack Obama was born abroad, is now caught in similarly unsubstantiated rumors. So Democrats have a right to chortle. But they should remain skeptical. This isn’t “fake news” of the kind fabricated by Macedonian web sites, but it’s both plausible and completely unsubstantiated. Unlike Trump’s claims that Obama was foreign-born, even after the president produced his birth certificate, this hasn’t been disproved or discredited, and it was regarded as credible enough to brief the president and president-elect about. This occupies a murky middle ground: Maybe it’s true and maybe not. The Senate Intelligence Committee has announced an investigation
of Russian election meddling, and other Senate Republicans seem intent on pursuing the issue, as well. That’s good: Democrats have little credibility investigating Trump, so it makes sense for Republicans to lead on this. In the meantime, let’s put aside sexual blackmail and focus on what is undisputed: Trump praises Putin, criticizes the North Atlantic Treaty Organization and downplays Russian war crimes and its attempts to steal our election. In contrast, Trump compares the US intelligence community to Nazis, suggesting it was behind the leaking of the dossier. It’s astonishing to see a president-elect in effect hug the Russians, while giving his own team the finger, creating a chasm between the White House and the intelligence community. “It’s extraordinarily serious,” said Jeffrey H. Smith, a former general counsel to the CIA. “I’ve never seen anything like this.” He said the CIA was buoyed by the nomination of Mike Pompeo to lead it, but that morale and effectiveness would suffer if the rift with the Trump White House continued. It’s also indisputable that Trump has appointed people soft on Russia. Lt. Gen. Michael T. Flynn, the new national security adviser, took money in 2015 from RT, the Russian propaganda front, and sat next to Putin at an RT dinner. Rex Tillerson, the secretary of state nominee, is one of the American executives friendliest to Putin.
For months there have been indications of bizarre ties between the Trump campaign and Moscow, including the Russian government’s assertion last November that it maintained contacts with Trump’s “immediate entourage”. The FBI investigated Trump’s Russia ties over the summer and fall, and reportedly sought approval to monitor his aides suspected of improper contacts with Russian officials. So, what’s going on? The most important question is simply why our president-elect has been so determined to side with Russia—undermining his own intelligence community as he does so. Perhaps it’s a genuine, if naïve, attempt to “reset” relations. But, oops, new presidents have tried that before, and it fails each time. The Trump view is so far from the foreign-policy mainstream that inevitably there will be darker theories offered for the softness toward Russia. These involve financial ties with Moscow, since Trump refuses to release his tax statements, or the kind of sordid blackmail alleged in the dossier. Such rumors may well be wrong and unfair—but they persist. They damage Trump, the intelligence community and the United States itself, and the best disinfectant will be transparency. That means congressional inquiries, led by Republicans, and a continued FBI investigation. We can’t afford even the perception that our president is the Kremlin’s man in Washington.
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Wednesday, January 18, 2017
‘Passenger comfort’ is main goal of common-station deal By Lorenz S. Marasigan
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@lorenzmarasigan
ARTIES involved in the construction of the longdelayed common station for the Light Rail Transit (LRT) Line 1, the Metro Rail Transit (MRT) Line 3 and the future MRT Line 7 have agreed to make “passenger comfort” as the main consideration in the crafting of the memorandum of agreement (MOA) that they are set to sign on Wednesday. “The memorandum of agreement will include the details that all parties will subscribe to to ensure high level of service to passengers,” Transportation Spokesman Cherie Mercado-Santos replied via text, when asked to give more details on the MOA that
officials from the transportation and public works departments, and executives from Ayala Corp., San Miguel Corp., SM Prime Holdings Inc. and Light Rail Manila Corp. will sign. She did not elaborate, although she did say the main consider-
SANTOS: “That we have achieved now —all parties agreeing to a design that puts passengers’ comfort at prime priority.”
ation in crafting the agreement is passenger comfort. “We have moved forward with the designs. Basically, from the past signing, we worked on all parties’ interests with the prime consideration of passengers’ comfort,” Santos said. “That we have achieved now—all parties agreeing to a design that puts passengers comfort at prime priority. At the same time, recognizing commitments given to them by the past administration.” Last September 28 all the parties “agreed” to construct the common alignment for the LRT Line 1, the MRT Line 3 and the future MRT Line 7 at the Paramount Building, placing it at the middle of the malls
of SM and Ayala. Tr a n s p or t at ion S e c re t a r y Arthur P. Tugade is happy about this development, which was “not an easy task”. “We’re happy and proud we have managed to get everyone on a platform of level of service to passengers,” Santos said. The common station was in limbo for a couple of years after its conception, after getting a stay order from the Supreme Court due to a possible breach in the original contract. SM Prime sued the previous transport officials for changing the location of the common station, even with an existing naming-rights contract with the government. While the previous administration pegged the price of the common alignment at a range of P1.4 billion to P2.6 billion, the final cost of the infrastructure will only be determined after the engineering and design have been finished. When built, the common station will provide easy access to both malls and major roads like Edsa, and will provide a common concourse or atrium to facilitate easy train-line transfer.
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PHL, RUSSIA, CHINA TO CONVENE JOINT TRADE COMMISSIONS By Catherine N. Pillas
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@c_pillas29
he Philippines will convene its respective joint commissions with Russia and China in the first half of 2017, underscoring the Duterte administration’s pivot for enhanced economic and trade relations with these two countries. Trade Undersecretary Ceferino S. Rodolfo told reporters on Tuesday the Philippines-Russia Joint Commission on Trade and Economic Cooperation (JCTEC) will convene on January 26 in Manila, serving as a prelude to President Duterte’s visit to Moscow, possibly in March. Russian Deputy Minister for Economic Development Alexander Tsybulskiy is expected to attend the Philippines-Russia JCTEC, Rodolfo said. “The JCTEC serves as a bilateral platform for discussing enhancement of trade and investment relations. Having a joint commission signifies strong
interest from both parties and is supportive of the President’s thrust,” the trade official said. Already, the Russian government has expressed interest in cooperation in the areas of energy efficiency technology, information technologybusiness process management, tourism, infrastructure, science and technology, industry development, aerospace, tourism and electronics. “We’re the fastest-growing economy in Asia, and we represent a large consumer market, so Russia has a large interest in us. They want to push toward the Pacific area,” Rodolfo pointed out. T he Phi l ippines-Russia JCTEC was agreed upon and formed during former President Benigno S. Aquino III’s term, particularly during the country’s hosting of Asia-Pacific Economic Cooperation Leaders’ Meeting in November 2015. In March the Philippines-China JCTEC will reconvene after six years of inactivity.