Businessmirror january 24, 2017

PECUNIARY DUTY Manila Archbishop Luis Antonio G. Cardinal Tagle (left) inducts into office the new directors of Financial Executives Institute of the Philippines (Finex) during the inaugural meeting of the 49-year-old nonstock, nonprofit group at a hotel in Makati City. Finex’s leaders expect economic and financial reforms to take center stage this year. Related story on B4. ALYSA SALEN

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Tuesday, January 24, 2017 Vol. 12 No. 104

Lawmakers thumb down hike in excise tax on fuel L ₧10 By Jovee Marie N. dela Cruz

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Mixing it up! G2G and then PPPs

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awmakers have rejected the proposal of the Department of Finance (DOF) to increase the excise taxes on petroleum products, saying the government should, instead, tax sugar-sweetened beverages (SSBs) to increase revenues.

House Deputy Speaker Romero S. Quimbo said it would be better for the government to impose a P10 tax on SSBs, as increasing the fuel excise tax would burden the poor.

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“[The DOF and Congress] should consider taxing sugar-sweetened beverages than imposing an excise tax on petroleum products,” Quimbo said.

The proposed tax on sugarsweetened beverages, such as soft drinks

House Bill (HB) 292, filed by Partido Demokratiko Pilipino-Laban Reps. Horacio P. Suansing Jr. of Sultan Kudarat and Estrellita B. Continued on A2

PPP Lead Alberto C. Agra

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hat is government-to-government (G2G)? What is the difference between a G2G and a public-private partnership (PPP)? How can a G2G support or complement a PPP? What are the benefits of mixing it up? ■ G2G. A G2G is an arrangement or contract entered into between two administrative agencies (AAs). National government agencies, like the Department of Transportation (DOTr); government-owned and -controlled corporations, like the Philippine Ports Authority (PPA); government instrumentalities, like the Philippine Reclamation Authority (PRA); government financial institutions, like the Development Bank of the Philippines (DBP); and local government units, like Puerto Princesa City, are AAs.

BMReports PHL basks in limelight as host to Miss U TRUMP ADMIN SET FOR Continued on A11

‘ANTAGONISTIC’ CHINA RELATIONS–CITIGROUP

By Pauline Joy M. Gutierrez Special to the BusinessMirror

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Part Two

HEN President Duterte approved the proposal to host the 65th Miss Universe in the country in July last year—this, amid prior controversies of his hesitance to do as such—Tourism Secretary Wanda Corazon T. Teo was quick to assure the public that hosting the international pageant here will boost the country’s already booming tourism industry. “The President agreed that sponsoring the event would be a tourism-marketing coup, with Philippines’s Miss Universe Pia Wurtzbach at the helm,” Teo said in a statement. Early last week a Department of Tourism (DOT) report confirmed tourist arrivals in the Philippines have risen significantly, as foreign and local visitors anticipate the grand coronation day at the SM Mall of Asia Arena in Pasay City on January 30. “We’re getting a lot of tourist arrivals.... Tumaas talaga siya, especially for Cebu [We’re getting a lot of tourist arrivals. It really increased, especially in Cebu].” Tourism Undersecretary for Media Affairs Katherine S. de Castro said. “A lot of their flights are fully booked for Tuesday, kasi doon magaganap ang swimsuit presentation [A lot of flights going to Cebu are already booked for Tuesday, because the swimsuit presentation will be held there].” De Castro said the DOT is expecting a lift in exposure and publicity to other tourist destinations in the country beside the capital, as the

PESO exchange rates n US 49.9070

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President Duterte and Tourism Secretary Wanda Corazon T. Teo pose with Miss Universe contestants during their courtesy call at Malacañang on Monday. Eighty-six candidates are vying for the title in the grand coronation on January 30 to succeed Pia Alonzo Wurtzbach. AP/Bullit Marquez

beauty candidates toured Boracay, Cebu, Vigan, Davao, Palawan and Iloilo. Media mileage is also expected to rise, as hundreds of journalists from both international and local media cover the event. By tapping the worldwide appeal of the Miss Universe, the DOT is hopeful that the “It’s More Fun

in the Philippines” campaign will flourish more, and that the budget otherwise spent on expensive promotions using various media platforms will be used to fund other DOT projects. In the interim, the Philippines’s Maxine Medina Continued on A2

onald J. Trump’s administration may be on course for a fraught relationship with China amid disputes over trade policy, according to Citigroup Inc., which warned the new US government could introduce more protectionist measures against manufactured goods from Asia’s top economy. “There are growing signs that the Trump administration is heading for antagonistic relations with China,” the bank said in a report that examined how commodities, including metals and farm goods, may fare in the upcoming lunar year. While the bank stuck with its view that a trade war could be avoided, it did anticipate “increasing trade frictions” between the two. Trump made trade relations a central theme of his election campaign, maintaining that the US was getting a raw deal from agreements, ranging from the North American Free Trade Agreement to the putative Trans-Pacific Partnership.

We are more likely to see the US aggressively targeting China in sectors where the US runs a large deficit with China or with significant SOE [state-owned enterprises] presence.” —Citigroup The new president hammered on an “America First” message in his inauguration speech, and his administration immediately vowed to withdraw from the Pacific deal.

n japan 0.4369 n UK 61.8048 n HK 6.4338 n CHINA 7.2518 n singapore 35.0618 n australia 37.6997 n EU 53.4604 n SAUDI arabia 13.3092

See “Trump,” A2

Source: BSP (23 January 2017 )

BMReports BusinessMirror

A2 Tuesday, January 24, 2017

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PHL basks in limelight as host to Miss U Continued from A1

shared similar hopes of endorsing the potentials of the tourism sector. “Being able to promote and represent the country in the global arena is a privilege to showcase what the Philippines has to offer. I want everyone to know how rich Filipino culture is,” Medina said. “To be able to promote the Philippines gives me the opportunity to show the beauty of our country and our people.”

Before the grand reveal

IN the lead-up to the big day, the spotlight now is not only focused on the Miss Universe candidates, but also the festivities before the grand reveal: from red carpet receptions to ancillary events, such as promotional shoots and tours around different areas in Luzon, the Visayas and Mindanao.

In a press conference held early this year, Teo listed the run-down of the final 16-day itinerary of the international beauty contest after meeting with pageant organizers and private partners. The tour already started on January 14 in Boracay, followed by a trip of the candidates to Vigan on January 15. It was then tailed by visits in Manila on January 16; a visit to the oldest city of Cebu on January 17; a strawberry-picking event in Baguio on January 18; a visit to Davao on January 19; and a swimwear photoshoot in Batangas on January 19. Candidates also paid a courtesy call to Duterte on Monday. On January 16 all the 86 candidates gathered at the SMX Convention Center in Pasay City in a black-tie dinner/gala called the Governor’s Ball. Aside from Teo, other prominent people present in

the event were Manila Mayor Joseph E. Estrada, Sen. Manny Pacquiao and officials from the Miss Universe Organization (MUO), including current titleholder Pia Alonzo Wurtzbach and MUO President Paula M. Shugart. TV personalities, like Gretchen Baretto and international supermodel Joey Mead, who hosted the ball, also graced the event. Also present is Ilocos Sur Gov. Luis V. Singson of the LCS Group, the official host of the pageant. The event served as a private fund-raiser for the Pass It Forward Foundation, a “middleman” that acts as a bridge between givers (individuals, corporations and foundations) and receivers of charity. The cause, of course, is aligned with MUO’s long-standing advocacy of raising awareness toward HIV/AIDS.

On January 18 the 65th Miss Universe candidates ditched the long gowns and put on some aprons as they helped pack meals and lifesaving aids for “I Rise Against Hunger” at Conrad Manila in Pasay City.

Funded by private sectors

ON July 28 Teo announced that it will be the private sector who will be shouldering the $11 million (or roughly P495 million) expenses that will be incurred for hosting the Miss Universe pageant in the country. “The government is not going to spend any single centavo here,” Teo said in a statement. “It would be the private sector who would shoulder the expenses.” This is after the infamous commentary of the President that hosting Miss Universe is not the administration’s priority as of the time.

“The Miss Universe [pageant] is a world-renowned event that continues to get a strong following,” businessman Jay Aldeguer was quoted in a news article as saying. “I really think it shouldn’t be too difficult to get sponsorships to subsidize the event.” Mandaue Chamber of Commerce and Industry (MCCI) President Glenn Soco shares the same beliefs. “Miss Universe is a global marketing event,” Soco said. “The private sector can muster the resources needed to stage the event.” And a sponsorship did it get. A DOT report confirmed SM patriarch and business magnate Henry Sy as one of the sponsors, along with Japanese businessman and Tiger Resort Chairman Kazuo Okada. To be concluded With reports from Luigie P. Hadap

Senate moves to amend Central Bank Act Lawmakers thumb down hike in excise tax on fuel By Butch Fernandez

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@butchfBM

he Senate Committee on Banks, Financial Institutions and Currencies on Monday endorsed key amendments to the existing Central Bank Act to further empower the Bangko Sentral ng Pilipinas (BSP) in fulfilling its mandate to protect the banking system. In sponsoring Senate Bill (SB) 1297, Sen. Francis G. Escudero, Banks Committee chairman, said the proposed legislation aims to “strengthen the tools which the BSP exercises in performing its mandates, supplement the mechanism in protecting savings of depositors and in ensuring the smooth flow of transactions in the financial system, as well as to enhance the corporate viability of the BSP.” Escudero said the salient features of the remedial legislation, include provisions strengthening the BSP’s monetary-stability function, as follows: 1) Restoration of authority to obtain data for

purposes of statistical and policy development, as well as ascertaining compliance with laws and banking regulations, and authority to issue negotiable certificates of indebtedness even during normal times, both of which were powers granted to the old Central Bank of the Philippines; and 2) Removal of thresholds in the growth of monetary aggregates, credit and prices as guiding principles in monetary administration, in view of current international trends in monetary-policy frameworks adopting inflation targeting. The senator added that SB 1297 also aims to boost BSP’s financialstability function by including a provision on “formal statutory recognition of the BSP’s mandate of promoting and maintaining financial stability in close coordination with other relevant agencies, as well as grant of statutory oversight of payment and settlement systems.” Escudero added that central banks in Asia typically have a financial-stability mandate, including China, Malaysia and Singapore.

Moreover, he said the bill also enhances BSP’s prudential supervision function in enhancing BSP’s supervisory authority by: ■ expanding the entities it supervises to include other categories of financial institutions; ■ granting authority to impose sanctions on transfers and acquisitions of substantial shares of banks and quasibanks without BSP approval; ■ allowing full flexibility to conduct risk-based supervision of financial institutions; strengthening of administrative and criminal sanctions to include, among other things, forfeiture of profits from unauthorized financial transactions; and ■ improving resolution mechanisms to deal with problematic financial institution, and providing legal protection for BSP officials and staff when performing official duties similar to that provided to officers and employees of the Philippine Deposit Insurance Corp. (PDIC) under the latter’s charter (Republic Act [RA] 9576

as amended by RA 10846). Escudero’s bill included provisions strengthening BSP’s corporate and financial viability through an additional BSP capitalization of P150 billion, payable immediately upon effectivity of the proposed remedial law amending the Central Bank Act. It seeks the grant of flexibility to establish adequate loss allowances and create reserve buffers against future risks and contingencies, and restoration of tax exemption, similar to other central banks in the world; enhancement to credit operations by granting exemption from court processes relating to collateral obtained from banks; and the authority to deputize the BSP legal staff in extrajudicial foreclosure of mortgaged properties. In addition, the bill includes a separate provision increasing the number of BSP deputy governors from three to five “to have a more responsive leadership in a complex institution” and a new section granting the central bank an “authority to approve transfer shares.”

Senate probers dig deeper into ₧50-M casino bribery Continued from A12

Gatchalian highlighted Senate findings that Jack Lam’s online gaming operations in the former Clark Air Base in Pampanga were

not licensed under the Philippine Amusement and Gaming Corp. He cited testimonies at the hearing that most of the illegal online-gaming operations were disguised as call centers

operating locally but “extends the illegal online gaming nationally and even internationally.” The senator suspects that there are more “Jack Lams” on the loose, or illegal online-gaming opera-

tions, which means there is more money being stolen from the Filipino people, estimating it could be much more than P13.9 billion, as what was revealed at the Senate hearing.

Continued from A1

Suansing of Nueva Ecija seeks to impose a P10 excise tax on SSBs per liter of volume capacity to increase government revenues and “promote public health and wellness.” “There shall be levied, assessed and collected on sugar-sweetened beverages per liter of volume capacity, an excise tax of P10. The rate of tax imposed under this section shall be increased by 4 percent every year thereafter effective on January 1, 2017,” HB 292 read. The bill defines sugar sweetened beverage as “a nonalcoholic beverage that contains caloric sweeteners/added sugar or artificial/noncaloric sweetener. It may be in liquid or solid mixture, syrup or concentrates that are added to water or other liquids to make a drink.” “Sugar-sweetened beverages” include soft drinks, soda, fruitdrinks, sports drinks, energ y drinks, sweetened tea and coffee drinks, and all nonalcoholic beverages that are ready-to-drink and in powder form with added natural or artificial sugar. Excluded from the coverage of the measure are 100-percent natural fruit juices, 100-percent natural vegetable juices, yogurt and fruit-flavored yogurt beverages with pure fruit and vegetable juice or concentrate, meal replacement beverages (medical food), and all milk products—infant formula and milk alternatives. The authors of the bill said sugary drinks and junk food are among the main culprits behind the rise in cases of obesity, diabetes, heart disease, high blood pressure, stroke and gallstones in the country. While he was “elated” by the agreement of the DOF to his proposal to lower income taxes for individuals, Quimbo said measures to offset revenue losses from this is “unacceptable”. “The last thing we want is to

Trump. . .

Continued from A1

“We are more likely to see the US aggressively targeting China in sectors where the US runs a large deficit with China or with significant SOE presence,” Citigroup said, using initials for state-owned enterprises. China has options to react, including bringing cases to the World Trade Organization, using countervailing measures and possibly banning exports of strategically important commodities, such as rare earths, it said. Trump has nominated billionaire investor Wilbur Ross for commerce secretary. In testimony on Wednesday in Washington before the Senate Commerce Committee, Ross called China the most protectionist of the world’s major economies and vowed to level the playing field with the Chinese on trade, especially in reducing

transfer the tax burden from the middle class—the sector that w ill benefit from income-ta x reduction, to the poor—the ones who will shoulder bulk of the excise tax on fuel. That’s inequitable and not progressive,” he said. In the meeting of the House Committee on Ways and Means last week, the DOF presented its tax-reform package, which restructures the tax rates and exempts individuals earning a gross income of P250,000 and below. However, the DOF’s proposal also calls for increasing excise taxes on petroleum products as a “compensatory” measure. The DOF is pushing for a staggered increase of P6.00 per liter of diesel, kerosene and LPG to be imposed within a three-year period. “While I totally agree with the government’s need to shore up its tax collection, we do not need to impose new taxes. We simply have to do better collection by plugging the leaks at the bureaus of Customs [BOC] and Internal Revenue [BIR],” Quimbo said. “In the BOC alone, we lose P200 billion a year to smuggling. Oil alone accounts for a substantial portion of smuggled commodities,” he added. For his part, Party-list Rep. Carlos Isagani Zarate of Bayan Muna, one of the authors of the measure seeking to lower personal income tax, scored the DOF for trying to “hostage” it by tying it up with proposals to increase other taxes. “This is really unfair for Filipinos considering that we are overtaxed and underserved with 30-percent personal income tax, which is one of the highest in Asia, while health, education, transport and housing services are terribly wanting,” Zarate said. Instead of pushing for higher excise taxes, Zarate said the DOF should concentrate more on increasing their collection efficiency. overcapacity in its steel industry. Trump has pledged to use “every lawful presidential power to remedy trade disputes” with China, including tariffs. He once broached a tax of 45 percent on Chinese imports, then denied bringing it up. Still, the president has already walked back from some criticisms and, so far, hasn’t followed up on a pledge to label China a currency manipulator on his first day in office. There have been mixed signals from China’s media. After the inauguration, the Global Times, a Chinese newspaper run by the Communist Party, said the speech signaled a “high possibility” of trade frictions. Still, the official Xinhua News Agency congratulated Trump on his inauguration and said it hoped for “win-win” cooperation between the two nations, and an editorial run by state-backed newspaper China Daily took a similar tone. Bloomberg News

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Editor: Dionisio L. Pelayo

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Tuesday, January 24, 2017 A3

NPA guerrillas ambush soldiers while peace talks in Rome go on

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AKILALA, North Cotabato—A New People’s Army (NPA) rebel was killed and five others were injured in a clash between communsit guerrillas and government forces over the weekend in a communist-infiltrated village here, the police and the military said. mander of the Army’s 39th Infantry Battalion, in a report, identified the fatality as Rojit Ranara of the Communist Party of the Philippines-NPA-National Democratic Front’s Guerrilla Front 51. A statement issued by the Army's 10th Infantry “Agila” Division (ID) said that on Saturday, troops from the 39th IB and Makilala policemen responded to a report that communist rebels have harassed the

Claims board to speed up processing of martial law victims’ applications

driver and cargo truck of Santos Land Development Corp. (SLDC), a banana company operating in North Cotabato. The 10th ID said as the soldiers were heading toward Barangay Biangan at 5 p.m., they were fired upon by a still-undetermined number of rebels, triggering an hourlong firefight. The next day, clashes erupted anew at 5:30 a.m., leaving one rebel killed and the recovery of three M-16 rifles and personal belongings

Sueno airs call for federalism at observance of Malolos Republic’s 118th anniversary

By Marvyn N. Benaning Correspondent

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HE Human Rights Victims Claims Board (HRVCB) has acceded to the demand of the Samahan ng ExDetainees Laban sa Detensyon at Aresto (Selda) to start distributing the reparation of martial law victims. Selda also secured the promise of HRVCB to speed up the processing of claims of the Marcos victims during a meeting with President Duterte on January 19 in Malacañang. The human-rights violation victims sought Duterte’s intervention to expedite the process of recognition and indemnification of thousands of martial-law victims. Selda leaders met with the President at the Palace on January 17, and told him that, despite the passage of the reparation law four years ago, the victims, many of whom are old and ailing, have yet to receive recognition and compensation. Worse, HRVCB has processed only 30,000 applications, not even half of the total 75,000 applications. “This snail-paced system that has been the practice of the board for the last three years, which could remain unfinished until the sunset year of the board’s tenure in 2018, is victimizing the already-victimized victims,” commented Selda chairman Marie Hilao-Enriquez, who attended the dialogue. Duterte agreed the processing was too slow and told the board to speed up the processing and distribution of the compensation funds for the victims. At the January 19 dialogue called by Duterte between the HRVCB and Selda, the board agreed to expedite the reparation and recognition of martial-law victims. The board will partially award in advance the indemnification of the thousands of victims whose applications had already been approved as of January 18, 2017. It also agreed that the partial indemnification shall be done within 60 days. Consequently, nonmonetary reparation will also be made available for the victims who seek assistance from the Department of Health, the Department of Social Welfare and Development and the Technical Education and Skills Development Authority. For its part, Selda assured the board of help in the processing of the partial payment and in the preparation of requirements. Selda also expressed deep concern on the high fail rate of invalid applicants. Out of the initially processed 30,000, only 9,000 were approved. Likewise, it will also look in to the validity of the HRVCB statement that only 3,000 Hawaii claimants had applied for reparation and recognition out of the original 9,539 class action suit members. During the dialogue, Duterte said that the slow process is a violation of the law itself and an injustice to the thousands of victims of martial law and promised to expedite the process.

MMDA extends no-window hours implementation By Claudeth Mocon-Ciriaco Correspondent

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INDING the scheme helpful in decongesting vehicular traffic in the metropolis, the Metropolitan Manila Development Authority (MMDA) on Monday announced the extension of the implementation of the No Window Hours Policy implementation for the unified vehicular volume reduction program (UVVRP) or the number-coding scheme for another six months. MMDA acting Chairman Thomas Orbos said that the decision was reached following consultation with the Metro Manila Council (MMC), the agency’s policy-making body and the Inter-Agency Council on Traffic (IACT), which is composed of the Department of Transportation, Land Transportation Office, Land Transportation Franchising and Regulatory Board, and the National Police’s Highway Patrol Group. The suspension of the UVVRP window hours, which was usually from 10 a.m. to 3 p.m. for those vehicles banned on certain

days of the week depending on the license plate ending numbers, has eased the traffic condition along major thoroughfares in Metro Manila. Orbos also played down the possibility that the people will resort to buying new vehicles because the extension will only be temporary. “We do not see motorists buying another car just to avoid the No-Window Hours Policy. It is just impractical,” he said. Orbos said the issue will be taken up and discussed again at the next regular meeting of the MMC, which is made up of the 17 Metro Manila mayors. With the consensus of the MMC and I-ACT, the five-hour window for the UVVRP has been suspended. Under the existing UVVRP, the numbercoding scheme is also expanded to cover all circumferential and radial roads in Metro Manila. The no-window hours policy was implemented on November 2, 2016, to ease the expected Christmas season traffic and will expire on January 31, 2017.

US Navy destroyer on port call in Subic INTERIOR Secretary Ismael D. Sueno leads the observance of the 118th anniversary of the inauguration of the First Philippine Republic at the Barasoain Church Historical Landmark in the City of Malolos in the province of Bulacan. Catherine Joy L. Maglalang

By Catherine Joy L. Maglalang Correspondent

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ITY OF MALOLOS—Interior Secretary Ismael D. Sueno on Monday took the opportunity to call for support in the shift to federalism state during Sunday’s commemoration of the 118th anniversary of the inauguration of the Malolos Republic in this city. Sueno, who was the guest of honor and speaker, who urged those present to continue to acknowledge, thank, appreciate and enjoy the fruits of the toil of earlier Filipinos, “because the establishment of the First Republic of the Philippines is our foundation to reach our freedom and independence that we enjoy today.” Sueno said the establishment of federalism will lead to the transfer of responsibility to the local governments and will result in prosperity and unity. “Federalism will pave the way toward providing equal opportunity to grow and enrich every corner of the country,” he said. He sa id prosperou s Fi rst World states, like the US, the United Kingdom, Canada, Germany and Australia, are federal countries. “So we call upon citizens and local governments who constitute the great province of Bulacan to join the aspiration for development, federalism and innovation,” Sueno added. The commemoration of the 118th anniversary of the Malolos Republic inauguration started with the flag-raising

and wreath-laying rites, led by Sueno and joined by National Historical Commission Officer in Charge Rene Escalante, Bulacan Gov. Wilhelmino Sy-Alvarado, Vice Gov. Daniel Fernando, Malolos City Mayor Christian Natividad, Vice Mayor Gilbert Gatchalian and other local officials. After the flag-raising and wreath-laying rites, Fr. John Paul Avila, the parochial vicar of Barasoain Church, led the opening prayer. In his welcome remarks, Natividad urged those present to preserve the country’s history as a nation, especially the declaration of the First Philippine Republic that he said “should be commemorated nationwide like the Chinese New Year, which is a nonworking holiday in the country.” Alvarado, in his address, said the importance of the declaration of First Philippine Republic also reflects to the spirit of democracy, righteousness and equality, and quoted President Emilio Aguinaldo, who said, “I congratulate our beloved people, who, from this date, will cease to be anonymous and will be able with legitimate pride to proclaim to the universe the long-coveted name of Philippine Republic. We are no longer insurgents; we are no longer revolutionists; that is to say armed men desirous of destroying and annihilating the enemy. We are from now on Republicans; that is to say, men of law, able to fraternize with all other nations, with mutual respect and affection. There is nothing lacking, therefore, in order for us to be recognized and admitted as a free and independent nation.”

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HE US Navy’s Arleigh Burke class guided-missile destroyer USS John S. McCain (DDG 56) arrived in Subic Bay on Monday for a brief port call that highlights the strong community and military connections between the Philippines and the United States. The McCain crew will participate in a series of community-service projects and sporting events during the visit. The ship will also use the stop to conduct some minor repairs with the assistance of Filipino companies. The Philippines is a long-standing treaty ally of the US with a more than 70-year history of partnership. The US and Philippine militaries have worked closely together on areas of mutual interest, such as humanitarian assistance and disaster relief, counterterrorism, cybersecurity and maritime security. McCain is forward-deployed to the US

uss john s. mccain

A r my Col. Harold A rgamosa, com-

of the slain communist guerrilla. The 10th ID said the soldiers were only responding to a harassment against a cargo truck, and there was no military offensive against communist rebels. Earlier, Delio Tongco, SLDC truck driver, reported to the police that gunmen flagged down his truck, took the vehicle’s ignition key, and fled. The gunmen also threatened to burn the SLDC vehicle if revolutionary tax demands are ignored. A spokesman for the communist movement in Southern Mindanao, Rigoberto Sanchez, said in a statement eight soldiers and an NPA rebel were killed in the clashes. But the military denied the report, calling it a piece of propaganda. The clashes erupted amid peace talks between the government and NPA leaders in Rome, prompting a senior military official at the Armned Forces General Headquarters in Camp General Aguinaldo, Quezon City, to say, “It seems the [NDF] negotiators in Rome, do not have control over their armed followers in the Philippines.” PNA

Seventh Fleet area of operations in support of security and stability in the Indo-AsiaPacific region. The visit of McCain came in the wake of the visit of the Russian antisubmarine destroyer Admiral Tributs, along with the oiler Boris Butoma, on January 5 for a weeklong goodwill visit. President Duterte toured the Admiral Tributs. Since assuming the presidency, Duterte has openly courted China and Russia. Rear Adm. Eduard Mikhailov, deputy commander of Russia’s Pacific Fleet, and Russian Ambassador Igor Khovaev escorted Duterte and several Cabinet members when they visited the Admiral Tributs. Moscow is eager to conduct joint-military exercises with the Philippines. Duterte had shown interest in acquiring weapons from Russia and China. Recto L. Mercene

Public-works workers clear road portion buried by landslides in Leyte By Lorenz Marasigan @lorenzmarasigan

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ROAD is Southern Leyte, which was blocked by landslide debris for almost a week, was opened to traffic at noon on Sunday, the Department of Public Works and Highways (DPWH) said on Monday.

DPWH Southern Leyte District Engineer Maria Margarita C. Junia said, however, that while the road in Barangay Kahupian in Sogod town is already passable, the agency still placed warning signs to caution motorists of potential landslides. An estimated 2,500 cubic meters of landslide debris blocked the road on January 16 in

Kahupian, just 1.5 kilometers away from the all-weather Agas-Agas Bridge. “We rushed to clear the highway, but it took time, since removal efforts were hampered by heavy rains, poor visibility and mud continued to pour down,” Junia said. Gideon Sacro, chief of the DPWH Southern Leyte maintenance section, reported that a lot

of motorists insisted on using the road even if it were closed to traffic. The road section is a vital link from Luzon to Mindanao as part of the nautical highway’s eastern seaboard route. With the road’s closure, Mindanao-bound buses and trucks had to pass through the longer route of Baybay City-Bato-Bontoc Road to get to Liloan or San Ricardo ports in Southern Leyte.

Economy

A4 Tuesday, January 24, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

DOE eyes voluntary RCOA listing and implementation

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By Lenie Lectura

@llectura

he Department of Energy (DOE) is mulling over the possibility of implementing the retail competition and open access (RCOA) policy on a voluntary basis. Under the said policy, which will be enforced in phases, consumers are allowed to choose their supplier of electricity to encourage competition in the generation and supply sector. Under the rules, the implementation of mandatory migration for contestable customers (CCs) with 1 megawatt (MW) and up average peak demand is on February 26, 2017.

Energy Undersecretary Felix William Fuentebella said the schedule would push through. “It is pushing through, because it is mandated. The schedule will push through. What we are looking at is to make it optional,” Fuentebella said. He said the DOE, together with the Energy Regulatory Commission (ERC) is currently evaluating this. “We are looking at the manda-

1 MW The limit in which an enduser is mandated to enter into an RSC with a retail electricity supplier by its mandatory contestability date of December 26, 2016

tory aspect. How about the contestable customers that were not offered a RES [retail electricity supplier]? [DOE] Secretary [Alfonso] Cusi wants to revisit this policy, so there maybe an adjustment,” he added. Cusi, he said, is open to enforcing this on a voluntary basis. “He

is open [to] making it not mandatory, [but] only optional so as to strengthen this policy and for consumers to have more…choices,” Fuentebella said. Based on existing rules, an enduser with an average monthly peak demand of at least 1 MW is mandated to enter into a Retail Supply Contract (RSC) with a RES by its mandatory contestability date of December 26, 2016. M a nd ator y conte s t a bi l it y for CCs with 750 kW to 999 kW average peak demand will, however, remain to be effective on June 26, 2017. The rules also state that the lowering of the threshold to cover an end-user with an average monthly peak demand of at least 500 kW is set on June 26, 2018, subject to the review of the performance of the retail market by the ERC.

briefs

binay eyes lowering taxes for makati firms Instead of increasing taxes, Makati City Mayor Abby Binay has ordered the city government's financial team to study the possibility of lowering taxes for the city’s business establishments.
 “I can assure you that your city government will continue extending quality services by means of good governance, proper fiscal management and efficient collection, without increasing taxes,” she told members of the Rotary Club of Makati recently.
 The lady mayor said lowering taxes would be “a way of rewarding all the businesses that have stayed and remained loyal to the city.” She said her financial managers were already looking into the feasibility of the said proposal. The mayor gave a rundown of reforms that have been put in place to promote “lawful, equitable and clean governance” in order to “restore efficient and compassionate public service” for the benefit of Makatizens (Makati citizens), including members of the business community. PNA

DENR’s Valdez says no letup in drive to shut down ‘illegal’ garbage dumps By Jonathan L. Mayuga @jonlmayuga

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he Department of Environment and Natural R esou rces ( DEN R ) on Monday vowed to intensify the campaign against erring local officials who fail to enforce Republic Act (RA) 9003, or the Ecological Solid Waste Management Act. Env ironment Undersecretary and National Anti-Environmental Crime Task Force (NAECTF) Head Art Valdez said the DENR, in coordination with the Environmental Management Bureau (EMB), National Solid Waste Management Commission (NSWMC) and the Office of the Ombudsman would press charges against officials who failed to enforce the garbage law. “The Ombudsman have already filed cases against 50 LGUs [local government units] and the filing of cases will continue,” Valdez said. “There will be no letup in the campaign. We will [also] file charges,” he said.

Revamp

b.i. eases rules for entry of asean delegates The Bureau of Immigration (BI) has relaxed its rules on arriving foreign delegates to the ongoing series of preliminary meetings for the forthcoming Asean leaders’ summit. In a memorandum issued on Monday, Commissioner Jaime Morente directed the conduct of “less restrictive” immigration formalities for Asean delegates and their companions, such as their spouses and dependents. With this, the BI is waiving the imposition of the six-month rule on passport validity, which means any Asean delegate can be admitted even if the latter’s passport is valid for less than six months. Likewise, arriving guests will no longer required to procure a return or outbound plane ticket, which is normally imposed on foreign tourists who come here for business or pleasure. On the other hand, Marc Red Mariñas, BI’s acting port operations chief, said that foreign delegates who have no entry visa (for visarequired nationals) and those whose names might appear in the bureau’s derogatory list, shall not be automatically excluded or turned back to their port of origin. He noted that the immigration supervisor on duty should conduct secondary inspection on the passenger and seek guidance or instruction for his superiors on what action to take. PNA

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‘Nian gao’

A lady baker in Binondo, Manila, presents her inventory of freshly made nian gao, locally known as tikoy, to customers and passersby on Sunday, less than a week before the Chinese Lunar New Year on Saturday. Made from glutinous rice and consumed in Chinese cuisine, tikoy is eaten all year round. It is traditionally most popular during Chinese New Year. Roy Domingo

Tax measure TRAIN to expand middle class, economically empower poor families—solon

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he proposed Tax Reform for Acceleration and Inclusion (Train) law will dramatically reduce personal-income tax (PIT) for low-salaried wage earners and provide an additional P6,000 per year to some 7.5 million poorest families in the country and P3,000 to 5 million more. This represents the single largest direct wealth transfer estimated at P130 billion to P170 billion in reduced PIT and about P40 billion for lower-income sectors, on top of the P68 billion under the Pantawid Pamilyang Pilipinong Program (4Ps). Rep. Joey S. Salceda of Albay, principal author of House Bill 4688, said the proposed scheme best balances the need to restore equity in the tax system, while raising muchneeded revenues to fund vital infrastructure and service programs. “While restoring equity in the tax system will cost the government reduced income-tax collection by P127 billion, tax hikes on goods consumed mostly by the wealthy will raise collections by P302 billion,” he explained. Train will enable the government to collect an additional P170 billion in taxes next year to fund vital infrastructures. The tax-reform package, Salceda said, provides relief to people by lowering income taxes for the majority of Filipinos by 2018 and further by 2019. In addition to current minimum wage earners, 3 million

more workers will no longer pay income taxes based on adjusted brackets. A ca l l-center agent paying P9,200 personal-income tax under current rates, will pay less than P1,600, saving himself P7,600. A clerk who earns less would be exempted. On the other hand, those earning P13 million annually will pay more taxes than they presently pay. When approved, Train rolls in with fiscal revisions aimed to uplift the poor, expand the middle class and “restore equity in the tax system while raising needed government revenues,” said Salceda, House Appropriations Committee senior vice chairman and vice chairman of the Ways and Means, and Economic Affairs committees. He said it is clear the Duterte administration targets to lift the lives of the ordinary working families, the middle class and the rural poor. Sa lceda said the projected income changes after the taxtransfer reform show that some 2.5 million poorest families will experience an 11.8-percent rise in incomes, the next, 2.5 million will have 7.1 percent, the next 2.5 million group with 5.5 percent and so on. The 20 percent wealthy who will pay more in taxes. Of the projected P145-billion revenue hike from raising taxes on fuel, the 20 percent richest will shoulder P87 billion. “With the

tax reform and targeted transfers taken together, we will see higher incomes for 99 percent of Filipinos, even with the increase in excise taxes. Only those in the top 1 percent will see their incomes reduced. The net effect is that the the middle class and professionals will see an increase in income and the very rich will pay more,” he added. To achieve inclusive growth, vulnerable sectors will be provided cash transfers that will include the Pantawid Pasada to mitigate the increase in excise taxes on fuel. “That will be the equalizing effect,” he stressed. The rich who accounts for 60 percent of oil consumption will take the burden of the income transfers. An estimated P36.4 billion, or 25 percent, of incremental revenue from petroleum excise tax in 2018, will fund subsidy programs, while the remaining 75 percent will be earmarked for social and infrastructure expenditures,” Salceda said. HB 4688, he said, also restores the efficiency of the value-added tax (VAT) system, which in the past has been weakened by unjustifiable and economically unsound exemptions. The VAT was designed to achieve maximum efficiency with little to no exemptions. For this reason, P87 billion from the projected P145-billion fuel excise tax-revenue hike will be shouldered by the richest Filipinos. PNA

IN a related development, Environment Secretary Regina Paz L. Lopez had ordered a massive revamp of field officials in the DENR starting with the agency’s 17 regional offices. Named regional directors are Francisco Moreno for Region 1; Gil Aromin, Region 2; Francisco Milla, Region 3; Arsenio Tanchuling, Region 4A; Natividad Bernardino, Region 4B; Crisanta Marlene Rodriguez, Region 5; Jim Sampulna, Region 6; Emma Melana, Region 7; Leonardo Sibbaluca, Region 8; Felix Mirasol, Region 9; Paquito Melicor, Region 10; Edwin Andot, Region 11; Reynulfo Juan, Region 12; Charlie Fabre, Region13; Ludy Wagan, National Capital Region; Ralph Pablo, Cordillera Administrative Region; and Al Orolfo, Negros Island Region. The official said she is still evaluating potential candidates for positions who will take over 78 provincial environment and natural officers, and 140 community environment and natural resources Officers.

Closure

Last week Lopez had ordered the closure of the Payatas Sanitary Landfill operated by the Quezon City government and the Inayawan Sanitary Landfill operated by the Cebu City LGU to prevent water pollution. According to the NSWMC, around 20 percent to 30 percent of uncollected wastes end up clogging water ways, including creeks, esteros and rivers, aggravating the sorry state of inland water bodies.

Raps

Ely Ildelfonso, executive director of the NSWMC Secretariat, said more than 3,000 local officials are facing charges for failing to shut down stinking open dumps all over the country. The local officials facing charges include mayors and members of the city or municipal councils. This year Ildelfonso said the NSWMC, in coordination with the Office of the Ombudsman, will pursue cases against officials belonging to 100 LGUs, mainly for failing to enforce RA 9003, which requires the closure of open dumps. This is the second batch of LGU officials who will be slapped with charges related to alleged violation of the garbage laws. Operating open dumps also violate the Clean Water Act and Clean Air Act, especially when dumps are situated near waterways and tend to emit pollutants that pollute the air.

“This year we are filing cases against officials belonging to 100 LGUs. This is the second batch,” Ildelfonso said. He said at least 10 local officials are facing charges per LGU. Last year the Office of the Ombudsman filed similar charges against 600 local officials, the first batch of officials belonging to 50 LGUs, for the same offense. This year and next, Ildelfonso said, the NSWMC will pursue cases against officials of 200 LGUs, Ildelfonso said. The NSWMC and the Office of the Ombudsman are filing cases by batches, considering the number of cases that have to be filed against erring LGU officials. Most of the local officials fail to shut down open dumps within their respective localities as mandated by RA 9003, despite repeated demands by the NSWMC. Based on the NSWMC’s record, Ildelfonso said some 350 LGUs failed to stop the operation of open dumps within their respective jurisdictions, making local officials criminally and administratively liable. R A 9003 aims to address the country’s garbage problem t hrough proper sol id-waste management. Under Section 10 of RA 9003, LGUs are primarily responsible for the implementation and enforcement of the provisions of the law within their respective jurisdictions. The same provision states that “segregation and collection of solid waste shall be conducted at the barangay level, specifically for biodegradable, compostable and reusable wastes.

Budget lack

The law, which promotes waste reduction from source through segregation, recycling and composting, prohibits the operation of open dumps and promotes the establishment of sanitary landfills. Lack of budget is the common reason why LGUs fail to enforce RA 9003. This is because LGUs do not allocate local funds for proper solid-waste management. According to Ildelfonso, the NSWMC continues to provide technical training to build the capacity of LGUs. On a positive note, Ildelfonso said more than 90 percent of all LGUs now have their own solidwaste management plans. “When I assumed as executive director of the NSWMC Seretariat, only about 40 LGUs have their own solid-waste management plans. Now, only about 170 LGUs do not have approved plans. What we are doing now is helping LGUs in updating their approved plans,” Ildelfonso said. He said by the end of the year, all LGUs are expected to have an approved solid-waste management plan. Ildelfonso added the NSWMC is closely coordinating with the Department of the Interior and Local Government to achieve 100-percent compliance by LGUs in terms of solid-waste management plans by the end of year. The management plans serve as guide on how LGUs intend to enforce proper solid-waste management, which include hauling, segregation, recycling, composting and disposal of garbage. With its estimated population of 12 million, Metro Manila alone produces an estimated 9,000 tons of garbage a day, or 3.29 million tons a year, Ildelfonso said. Metro Manila’s garbage produce accounts to nearly 25 percent of estimated country total of 40,000 tons of garbage a day, or 14.6 million tons a year.

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Editor: Jennifer A. Ng • Tuesday, January 24, 2017

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DA thumbs down bill hiking tobacco tax Victorias Milling sees 12.3% decline in full-year profit V

file photo

By Jasper Emmanuel Y. Arcalas

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@jearcalas

he Department of Agriculture (DA) said it is against a proposal approved by the House of Representatives, which seeks to increase the tobacco tax, as it would hurt local farmers. Agriculture Secretary Emmanuel F. Piñol said he supports tobacco farmers who opposed House Bill (HB) 4144, which calls for a higher “sin” tax by amending provisions of Republic Act (RA) 10351, or the Sin Tax Reform Law of 2012. “The DA supports the position of tobacco farmers. I will direct the NTA [National Tobacco Ad-

ministration] administrator to explain why the agency is taking a position that is not supported by stakeholders,” Piñol told reporters over the weekend. The DA chief made the pronouncement after the NTA reportedly threw its support behind HB 4144. The NTA is an attached agency of the DA.

Wood producers told to seek forest certification

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he Philippine Wood Producers Association (PWPA) is being enjoined to engage further in government programs designed to improve the forestry industry’s standards and competitiveness through certification and an industry road map. At a recent policy forum on sustainable forest management through forest certification, the Department of Environment and Natural Resources (DENR) invited wood producers and forestry stakeholders to participate actively in consultations and help formulate and draft a national forest certification system. Environment Undersecretary Marlo Mendoza said at the business gathering that forest certification is one of the top priorities of the DENR. He stated that the certification system will be putting emphasis on policy predictability, social justice and ecosystem integrity. Mendoza also recommended that legality of source, chain of custody, and different criteria for controlled wood should be taken as important considerations in crafting the certification system. He, likewise, asked the PWPA, nongovernmental organizations, civil society and other stakeholders to support the program, as he emphasized the need for transition policies and the promotion of entrepreneurship to ensure sustainability of the industry. Meanwhile, Gualberto Tortoza and Diosdado Paler, consultants for the United Nations’ Food and Agriculture Organization (FAO), met with officials of the PWPA to discuss

HB 4144 proposes to keep the present regime of two tax rates on cigarettes based on retail prices. Under the bill, the new tax rates would be P32 per pack for cigarettes, with a retail price of up to P11.50 and P36 for those being sold above P11.50. The measure was approved on third and final reading by the House of Representatives last December 13. A day after its approval, HB 4144 was submitted to the Senate. Currently, the government started imposing a unitary sintax rate of P30 per pack, regardless of brand, this month. Under RA 10351, the tax rates would increase by 4 percent every year starting January 2018. Earlier, some 50,000 tobacco farmers belonging to the Philippine Tobacco Growers Association (PTGA) and the Philippine Aromatic Tobacco Development expressed

the association’s role in the renewed Forest Law Enforcement, Governance and Trade (FLEGT) program of the Philippines. Tortoza and Paler noted that the European Union’s recent FLEGT action plan highlighted the need for privatesector involvement in different sectoral strategies for achieving legality and sustainability in forest production. The FLEGT program aims to reduce illegal logging by strengthening sustainable and legal forest management, improving governance and promoting trade in legally produced timber. In the Philippines Tortoza and Paler proposed that the country’s FLEGT program also develop a strategy to engage the private sector, particularly the local small and medium forest enterprises. Tortoza said the new engagement program will be done in three phases, with situational analysis as the first phase, followed by a two-day multistakeholder dialogue or workshop, and to be concluded with a country road map that will identify priority areas for support. PWPA Executive Director Maila Vasquez reiterated the association’s support for such projects that seek to improve the plight of the wood industry. Vasquez added that there are currently many efforts being done to help the forestry sector, but they would be more effective if consolidated, so actions can be aligned and issues and concerns tackled collectively. “This will also ensure that overlaps and conflicts will be minimized, if not totally avoided,” she added. Philexport

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their opposition to HB 4144. “Tobacco farmers are struggling with the decline in demand for tobacco because of the huge 340-percent excise-tax increases introduced in 2013, with annual increases of 20 percent or more,” PTGA leader Saturnino Distor said in a statement. Other government agencies, such as the departments of Finance (DOF) and Health (DOH), the Bureau of Internal Revenue and the National Tax Research Center have also expressed opposition to the measure. The DOF said a two-tier tax system on tobacco would be “difficult” to administer. Both the DOF and the DOH noted that a two-tier tax system wouldn’t generate more revenue for the government, as consumers would just shift to cheaper cigarettes.

Family farmers need more support to meet world’s rising food demand–FAO

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amily farmers in the developing world need information and technology tools that can help them not just get by, but thrive and feed a growing world population, according to Food and Agriculture Organization (FAO) Director General José Graziano da Silva. “Millions of small family farmers need technical and financial assistance to be more resilient and adapt to the impacts of climate change. They must be able to stay on their land, produce their own food and also have access to markets,” he said in remarks at the G20 agricultural ministers meeting in Berlin on Sunday. The FAO director general argued that the world’s rural areas will be the key battleground in the push to achieve the 2030 sustainable development agenda, since it is there that poverty and hunger are most concentrated. At the same time, most of the increases in agricultural yields, required to feed a world population set to surpass 9 billion by 2050, will have to take place in these same regions, and will greatly depend on small family farmers, according to FAO studies. “Information and communications technologies [ICT] can have a profound impact on the efficiency, resilience and inclusion of poor family farmers,” Graziano da Silva said. This is why FAO is pushing ahead with a digital strategy that aims to support the world’s most vulnerable through knowledge sharing and bottom-up learning. An initial thrust under that effort that is already bearing fruit is the organization’s work with Google to make high-resolution satellite data an everyday tool in monitoring and managing natural resources, promote sustainable agriculture and strengthen food security. FAO is also looking at tech-based options for providing small famers with microclimate forecasts, and is engaging with the World Meteorological Organization (WMO) to brainstorm additional ways to improve weather forecasts for farmers. These efforts would be aimed “particularly at the 70 countries that do not have national meteorological services established,” Graziano da Silva said, noting that this is a major priority.

ICTORIAS CITY, Negros Occidental—Listed sugar-miller Victorias Milling Co., Inc. (VMC) said it expects its net income for the current fiscal year (FY) to decline by nearly 12.3 percent to P700 million due to lower production. “Our original outlook was P1 billion, but I think [income] could settle at around P700 million,” VMC Chief Finance Officer Teresita V. Ilagan told reporters in a news briefing here on Monday. “It’s mainly because of the softening of prices and our production level is not as much as what we had originally projected. And then of course, sugar recovery is also much lower,” Ilagan added. VMC’s fiscal year is concurrent with the country’s sugar crop year (CY), which starts on September 1 and ends on August 31 of the succeeding year. The company said its milling tonnage would approximate the 3.1 million metric tons (MMT) of sugarcane recorded in FY 2015-2016. VMC President and COO Eduardo Concepcion also said the average milling recovery rate for FY 2016-2017 could go down to 1.9-kilogram bags per ton cane (LKG/TC), from 2 LKG/TC recorded a year ago. “Our original target was 3.2 MMT of sugarcane, but from the

looks of it, it would most likely [settle] between 3 MMT and 3.1 MMT,” Concepcion said. “This [crop] year, production is better but the sugar content is less,” he added. Concepcion attributed the poor quality of sugarcanes to the lingering effects of El Niño. The company expects total raw sugar output to decline by 8.23 percent to 5.7 million 50-kilogram bag (lkg), or around 285,000 metric tons (MT), from 6.21 million lkg (310, 50 0 M T ) produced i n FY 2015-2016. Concepcion noted that the drop in raw sugar output would result in lower refined sugar output. The company said it expects its refined sugar production in FY 2016-2017 to decline by nearly 20 percent to 4.2 million lkg. from 5.21 million lkg posted a year ago. “There’s also the issue of prices. Last year prices were good. Currently, prices are lower,” Concepcion said. The company’s capital expenditure for FY 2016-2017 is pegged at P300 million. The amount will be used to maintain and improve their factories. VMC’s subsidiaries include Victorias Food Corp., Victorias Agricultural Land Corp., Canetown Development Corp. and Victorias Golf and Country Club Inc.

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Tuesday, January 24, 2017

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News media, target of Trump’s declaration of war, expresses alarm

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or wary Washington journalists, it seemed only a matter of time before Donald J. Trump’s presidency would lead to a high-tension standoff between his administration and the news media.

But on Day one? The news media world found itself in a state of shock on Sunday, a day after Trump declared himself in “a running war with the media” and the president’s press secretary, Sean Spicer, used his first appearance on the White House podium to deliver a fiery jeremiad against the press. Worse, many journalists said, were the falsehoods that sprang from the lips of both Trump and Spicer on Saturday. Trump accused the news media of confecting a battle between himself and the intelligence services (in fact, he had previously compared the services to Nazi Germany in a Twitter post), and among other easily debunked assertions, Spicer falsely claimed that Trump’s inauguration was the most attended in history (photographs indicated it was not). “It was absolutely surprising and stunning,” the president of the White House Correspondents’ Association, Jeff Mason, said on CNN on Sunday. In a phone interview later, he said: “People were surprised; I was surprised. It’s not what I was expecting for the first statement by the press secretary in the press room.” The tensions flared anew on Sunday when Kellyanne Conway, one of Trump’s top advisers, said in a television interview that Spicer had merely presented “alternative facts” about the inauguration, prompting an astonished

380K The number of times the phrases “alternative facts” and “#alternativefacts” had been used on Twitter by midafternoon on Sunday

response from her questioner, Chuck Todd of NBC. “Wait a minute—‘alternative facts’”? Todd asked Conway on “Meet the Press.” “Look, alternative facts are not facts. They’re falsehoods.” When Todd pressed her about why the administration had put Spicer behind the lectern for the first time to “utter a provable falsehood,” Conway responded with a sharp threat. “If we’re going to keep referring to our press secretary in those types of terms, I think that we’re going to have to rethink our relationship here,” she said. Video of Conway’s evasion quickly spread on social media. The phrases “alternative facts” and “#alternativefacts” had been used on Twitter more than 380,000 times by midafternoon on Sunday, a Twitter spokesman said. A lso by Sunday after noon, there were scattered ca l ls for the W hite House press cor ps to boycott Spicer’s br iefings, a lthough such a drastic response

White House Press Secretary Sean Spicer briefs reporters at the White House on January 20. The news media world found itself in a state of shock on Sunday, a day after President Donald J. Trump declared himself in “a running war with the media.” Doug Mills/The New York Times

appeared unlikely. Ben Smith, editor in chief of BuzzFeed, said on Sunday the briefings were “a useful, if not essential, tradition” and that his outlet would keep a reporter there. Smith added that the Trump administration would “find practical reasons to be honest.” “In particular,” Smith wrote in an e-mail, “I think they’ll find in moments of real crisis, rather than political theater, that they need to win back the credibility that they are spending now.” Mason, the correspondents’ association president, who is the chief liaison between the White House press corps and Spicer, said his goal was to maintain a constructive relationship. “It’s up to him and up to the president to decide how they want to get star ted,” Mason said of Spicer. “A nd that’s what they decided.”

Some reporters and commentators noted that hostility between White House press operations and the news media was nothing new. Jack Shafer, the acerbic media critic, wrote on Twitter that “the press is supposed to be abused, disparaged, defamed, dissed.” He added, “It’s part of the job.” Lynn Sweet, a political reporter for The Chicago Sun-Times, said credibility, not civility, was what mattered. “If Sean wants to have an angry tone, frankly, I don’t care,” Sweet said on CNN. “I don’t care if you vent.” She added: “I care if he says something that’s true. I care if he gives us facts.” In an interview on Sunday, Ari Fleischer, who served as press secretary under George W. Bush, said Spicer’s statements on Saturday were somewhat typical of the spin at press briefings.

But Spicer’s “eagerness and willingness” to confront the press corps so directly represented a break from tradition, Fleischer said. “Everybody complains about the press, but most people bite their tongue” in news conferences, Fleischer said. Fleischer added that Spicer’s remarks could hurt his credibility unless he backed them up—or at least addressed them—during the first official White House briefing on Monday. “Sean’s first client is the president of the United States and those around the president; his second client is the press corps,” Fleischer said. “And he has to ser ve both, always guided by the truth.” In reporting on the day’s events, many news organizations also called out the falsehoods that Trump and Spicer offered on Saturday, using variations of “false,”

“falsehoods” and “lies” in headlines and stories. Breitbart News, the right-wing web site that has embraced Trump, was more credulous in its headline: “WH Press Secretary Sean Spicer Blasts Media’s ‘Deliberately False Reporting.’” Voice of America, the gover nment-f unded news operation that broadcasts American journalism beyond the country’s borders, pointed out Spicer’s inaccuracies and ran an article from The Associated Press factchecking his remarks. Still, that came only after the organization initially posted a string of Twitter messages that quoted Spicer without context, prompting questions about whether it was endorsing his comments. Voice of America’s director, Amanda Bennett, said there had been no instructions or interference from the Trump administration and Voice of America had quickly decided it needed to provide more explanation. “Internally, there was like an explosion of direct messages saying you’ve got to do something about this,” Bennett said in an interview on Sunday. That led to a course correction on Twitter, including the deletion of one tweet that appeared to support Spicer. For First Amendment advocates, the events of Trump’s first 48 hours in office were, to say the least, unsettling. In a statement, the American Civil Liberties Union denounced Spicer’s remarks as “possible government censorship” and vowed that any threats by Trump’s administration to the principles of freedom of the press would be met with a “vigorous defense” of the First Amendment. “If Trump wants to take on the First Amendment,” the group said in a statement, “we will see him in court.” New York Times News Service

After success of women’s march, what’s next? M

ore t ha n 1 m i l l ion people who turned out on Saturday for women’s marches in all 50 states have put down their placards, taken off their pink hats and ended their chants after what was an extraordinary display of dissent against the Trump presidency. A critical question remains: What happens now? The challenge facing the organizers is how to channel the resolve and outrage of an organic protest into action that produces political change. That goal has eluded other popular movements, from Occupy Wall Street to Black Lives Matter. It is no less daunting now, given that Democrats were unable to defeat President Donald Trump in 2016 despite an emerging demographic majority. T he organizers are tr y ing. Within minutes after the march in Washington ended at sundown on Saturday, its leaders convened a four-hour pep rally and networking session called “Where Do We Go From Here?” On Sunday Planned Parenthood held a training session for 2,000 organizers on turning mobilization into political action, with health care atop its priority list. David Brock, the Democratic activist, assembled a group of about 120 leading liberal donors in Aventura, Florida, to hear plans for lawsuits and other

challenges to Trump. Past movements rallied around one unifying cause: the Vietnam War, civil rights, the government bailouts and spending that helped create the Tea Party. On Saturday marchers and liberal activists embraced a vast array of issues, from reproductive rights to mass incarceration to environmental activism, raising questions about how to create a cohesive movement. But the leaders believe that the common thread—revulsion and contempt for the man who is president—may be powerful enough. “Trump is the cure here,” said Sen. Jeff Merkley, DemocratOregon, and a supporter of Sen. Bernie Sanders of Vermont during the Democratic primary who was invited to Brock’s conference. “He brings everybody together.” Cecile Richards, president of Planned Parenthood, a sponsor of the marches, saw another rallying cry: “Women in America are not going back.” Ai-jen Poo, director of the National Domestic Workers Alliance, one of many partner groups of the march, said that organizers intended to study the protests in all 50 states to identify issues and recruit volunteers to gear up for the 2018 midterm elections. In Washington at the postmarch panel, Planned Parenthood held a mass call-in event, where participants called their senators

Thousands of demonstrators wear pink hats at the Women’s March on Washington on January 21. Ruth Fremson/The New York Times

and urged them to protect their access to health care. Even before the march, the left was seizing on panic over Trump to rally voters who were not so easily roused during the election. In Macomb County, Michigan—the well-chronicled home of the Reagan Democrats and a county Trump decisively won— about 6,000 Democrats braved frigid temperatures on January 15 to hear Sanders and Sen. Chuck Schumer, Democrat-New York, among others, defend the Affordable Care Act. It was one of dozens of similar rallies across the country. The day before, so many constituents of Rep. Mike Coffman, Republican-Colorado, packed an Aurora library to confront him

over his support for repealing the health-care law that he had to leave through a back door. Yet, it was telling that women galvanized the largest protests. Hillary Clinton’s defeat prompted soul-searching about why appeals to feminism did not carry the day. Now a wide range of groups that advocate for women are trying to capitalize on the momentum to turn an event into a sustained movement. Todd Gitlin, a former president of Students for a Democratic Society and a scholar of political movements, noted that the civil rights and antiwar movements succeeded because of the organized networks that preceded and followed any single mass protest. “The march on Washington in

1963 was the culmination of years of local activism, including civil disobedience, registering voters, protecting civil-rights workers and voter education movements,” he said. “Organizations need to be ready to receive the protesters when they’re ready to take the next step. You need to be a full service movement.” That effort, the organizers say, is underway. At the panel on Saturday night, representatives from the partner groups made 90-second pitches to the marchers urging them to sign up for any of the organizations that appealed to them. The key, Poo said, was to build a continuous relationship with voters and volunteers so that they are not only approached before elections. Tresa Undem, a partner in the polling firm PerryUndem, said that several years of convening focus groups had convinced her that women’s issues can translate into political momentum. W hen she showed focus groups a list of specific restrictions on abortion and health care that had been passed on the local level, she said they immediately began talking about how men were making those decisions. A poll she conducted that was released this month found that outrage at Trump’s remarks was the primar y predictor of whether women would take specific political actions.

Still, the women’s movement faces several potential obstacles. Leaders believe the only way to mobilize is to sweep in disparate groups, which can r isk diluting their message. And the wounds inf licted by the election stil l r un deep. Minor it y women, in par ticu lar, say they are concer ned that the new attention to the white work ing class might mean deemphasizing issues of race for fear of a lienating white voters. “The coalition for Obama was never sustained after the election,” said Kimberlé Williams Crenshaw, a professor of law at Columbia University and the University of California, Los Angeles. “There’s been a failure to engage the base.’’ Democrats continue to debate strategy. A former governor of Michigan, Jennifer Granholm, urged the conference in Aventura to continue competing for white, Rust Belt voters because, she later told reporters, the assumption that “demography is destiny” has “not helped us”. But at the panel in Washington on Saturday, organizers passionately endorsed the new demographic majority. They argued that without including the needs of minority, immigrant, Muslim and marginalized women, feminism would not rally a broad enough coalition and Democrats would lose the presidency again. New York Times News Service

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US prexy’s pledge to break from Opec oil imports echoes Bush’s promise

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.S. President Donald J. Trump’s pledge to make America independent from Organization of the Petroleum Exporting Countries (Opec) isn’t a new refrain in Washington. His “America First Energy Plan” posted on the White House web site on Friday doesn’t just echo his own campaign pledges but also President George W. Bush’s vow to cut imports from the Middle East when he famously said the nation was “addicted to oil.” Shipments from Opec rose more than 10 percent during Bush ’s time in office. It’s not an easy task. It would mean replacing about 3 million barrels a day of imports. That’s about three times as much as East Coast refineries consume. Saudi Arabia and Venezuela lead the pack of Opec suppliers to the US. They account for more than half of US imports from the 13-nation group. Ministers of the two countries, meeting in Vienna over the weekend, shrugged off Trump’s statement, saying the world’s biggest economy would continue to need crude from abroad. Bush said he would put the

country on course to reduce oil imports from the Middle East by more than 75 percent by 2025. His bold statement evoked a reaction from leaders of the Opec. “We do believe that energy issues cannot be handled in a unilateral way,” said Edmund Daukoru, then-Nigerian minister of energy and secretarygeneral of the Opec. “We all have to work together toward global energy security.” Trump’s goal may not be completely unobtainable as US oil production has been on the rise and signs point toward possible energy independence years from now. To achieve that, though, the country may need to reconsider a push for exports that was supported by Republicans. Since scrapping restriction on sales to countries other than Canada at the end of 2015, US crude exports have risen to more than 700,000 barrels a day. At current consumption levels, total independence from imports would require almost doubling domestic production. US refineries rely on imports for about half the roughly 17 million barrels that they process daily. Bloomberg News

Tuesday, January 24, 2017

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Trump challenge signals China’s readiness to cooperate with US

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onfronted by the challenge of a Donald J. Trumpled White House, China is signaling it’s ready to work with the new administration and has already taken a handful of policy steps that may help fend off criticism over access to its markets.

T he of f ic i a l X i n hu a News Agenc y cong ratu lated Tr ump on his inauguration and said it hoped for “win-win” cooperation between the two nations. An editorial run by state-backed newspaper China Daily took a similar tone, saying the world ’s two largest economies should work together toward “an updated, more desirable version of globalization.” That follows tangible measures last week, such as a plan to relax restrictions on foreign investment in long-closed areas of the economy, including banking, securities, futures, mutual funds

and insurance. A senior official last week said China is prepared to enhance cooperation with other countries to protect intellectualproperty rights, a bug-bear of US and European firms who have complained their technologies are copied and brands faked. Ning Jizhe, China’s statistics chief and deputy head of the top economic planning body, used his Friday briefing on 2016 economic data to congratulate Trump and say he hoped the new president keeps moving SinoAmerican cooperation forward. The Ministry of Commerce last week said it’s willing to work with

the new US administration to help promote healthy trade development and economic ties, echoing President Xi Jinping’s speech to the World Economic Forum in Davos that warned against trade wars and protectionism. But it’s not all olive branch. Xinhua’s article congratulating Trump also laid out the areas China regards as off limits: “China’s resolve to safeguard its defining core interests in Taiwan and the South China Sea islands has always been strong,” it said. Xi has a strong domestic imperative not to appear weak before a twice-a-decade Communist Party congress late this year, when several top leaders are due to be replaced. Policy-makers also have pledged more focus on ensuring financial stability. Tr ump opened his presidenc y w ith an “A mer ica First” appea l, say ing the US w il l “ br ing back our jobs. We w il l br ing back our borders. We w ill bring back our wea lth.” “ For m a ny dec ades, we’ve enr ic hed foreig n indust r y at t he e x pense of A mer ica n indust r y ; subsid i zed t he a r m ies

of ot her countr ies, whi le allow ing for the ver y sad deplet ion of ou r m i l it a r y,” he sa id. He didn’t mention China by name in his inaugural address, in contrast to his campaign rhetoric in which he accused it of raping America and cheating on trade. Trump has already walked back from some criticisms and, so far, hasn’t followed up on his pledge to label China a currency manipulator on his first day in office. His pick for treasury secretary, Steven Mnuchin, agreed during a Senate confirmation hearing that China has shifted recently from efforts to weaken the yuan. He did say, however, he is willing to apply the manipulator label if warranted. China doesn’t want a trade war with the US, said Chen Wenling, chief economist at the Beijing-based China Center for International Economic Exchanges, a think tank led by retired senior officials. But China isn’t afraid of a trade war and will not give in or compromise should the US wage one, she added. “A trade war is a lose-lose for both sides, but the US will be harder hit,” she said. Bloomberg News

Trump’s vow to repeal health law revives talk of high-risk pools J

oanne Fit zgera ld wa s ge t t i n g d ivorce d a nd w a s stressed out. When stomach pain kicked in, she saw a doctor to have it checked out. That was her mistake. The doctor diagnosed a mild form of gastritis, an inflammation of the stomach lining, and recommended some over-thecounter medicine. But when the divorce became final, in 2008, she lost health coverage from her husband’s employer, and insurer after insurer refused to cover her because of the condition. She w a s f i n a l ly of fered a polic y that excluded coverage for anything related to her gastrointestina l tract. “I thought I was being smart in going to the doctor and getting checked out,” Fitzgerald, 55, who lives in Washington, said recently. “Then I tried to go get insurance and everyone denied me.” Her fortunes changed under the Affordable Care Act, the major health law signed by President Barack Obama that required insurers to cover preexisting medical conditions. She was one of the millions of people who jumped at the opportunity and bought a policy available under the new law. Now, after President Donald J. Trump and the Republican-controlled Congress have vowed to repeal and replace the health law, one of the most vexing questions is whether people like Fitzgerald will be covered. About 27 percent of people younger than 65 are thought to have some sort of preexisting condition that will most likely leave them without individual insurance if the law is repealed, according to a recent study. The guarantee of coverage has already become a rallying cry for people who want to keep the law. The issue “ is the third rail ” for the Republicans, said Michael Turpin, a longtime health industry executive. Before the law, a fairly typical life event—like a divorce or the loss of a job—and a relatively minor medical condition could upend a person’s health-coverage options. Stories of sick people unable to get coverage when they needed it most were legion. Tr ump insists he wants to keep the preexisting requirement for insurers, and other

President Donald J. Trump signs a broadly worded executive order directing agencies to scale back aspects of the Affordable Care Act at the White House in Washington on January 20. The executive order should be seen more as a mission statement, and less as a monarchical edict to instantly change the law. Doug Mills/The New York Times

t o p R e pu bl ic a n s s ay p e o ple who want coverage shou ld not be tur ned away. Details about how they will cover people w it h e x ist ing medical conditions have not yet emerged, but many lawmakers have started pushing an idea— known as high-risk pools—that left many people uncovered or with strict limits to their coverage in the past. The challenge for lawmakers is this: How do you get insurers to cover people who will definitely need costly medical care—and do so without making insurance too expensive for everyone? T he A ffordable Care Act addresses that question by requir-

ing ever yone to get coverage or face a ta x pena lt y. T hat mandate is meant to increase the number of hea lthy people who have insu ra nce, d ist r ibut ing the costs of car ing for those who are sick across a wider popu lation. T he think ing is that if enough healthy people sign up, the costs of sick people w il l be offset for insurers. Top Republicans, though, say the system is not working and point to double-digit price increases for premiums. “ There is a better way to fix that problem without giving everybody else all these massive premium increases,” the House speaker, Paul D. Ryan, said at a

recent televised forum. Finding a fix is far from simple. Before the law was passed, insurance companies evaluated the health of each person applying for coverage before offering a policy, and priced the plan to ref lect the possible cost of care. The companies wanted to minimize the risk of losing money by paying for costly medical care for too many of their customers. Often, insurers offered no options to people with preexisting conditions, because they considered the potential costs to be too high. As a result, 35 states had high-risk pools, the program again on the lips of top lawmakers, including Ryan.

The high-risk programs offered a separate insurance pool for people with potentially expensive medical conditions. The idea is that by separating sick people from the majority of people who are healthy, insurers could offer cheaper rates to the healthy people. Insurers could charge higher prices to those with existing medical conditions, but they would also rely on other sources of funding, from the government or elsewhere, to cover their costs. The system worked for Dan Nassimbene and his wife, who had breast cancer but is in remission. They enrolled in Colorado’s highrisk pool for three years, paying about $375 a month for a plan that

covered most of her treatments. In 2014, though, the high-risk pool was closed, and Nassimbene bought a plan that met the requirements of the Affordable Care Act. The cheapest plan he could buy for himself and his wife cost around $900 a month and came with a family deductible of around $12,000. His income was too high for him to receive any government subsidies, which help about 80 percent of people buying such plans. “I had coverage but no access,” said Nassimbene, 55. He has since switched to a Christian healthcare sharing ministry, in which members cover one another’s medical bills. It does not qualify as coverage under the law. In many cases, the high-risk pools were overburdened financially, leaving many people without insurance or with tight restrictions on coverage. Insurers refused to cover the individuals who were likely to have the highest expenses, like those who had HIV or serious kidney disease, and the pools lost money. Many states had to turn applicants away—in some states, only a small percentage of those who applied received coverage—and the insurance was sharply limited to control spending. In Washington state, more than 80 percent of the people referred to the state’s high-risk pool never got health insurance, said Mike Kreidler, the state’s insurance commissioner. In California, which relied on lawmakers to allocate money as part of the state budget, there was a waiting list, recalled Richard Figueroa, who was a senior administrator for the program. The pool operated on a firstcome, first-served basis, Figueroa said, without regard to people’s income or the severity of their medical condition. “There were people literally dying on the waiting list,” he said. In addition, most of the states offering coverage had caps on payments for medical care. Washington state’s annual maximum was $2 million, while California’s limit was $75,000 a year. Under the Affordable Care Act, insurance plans cannot have such a limit. In California the program dwindled away until it served only 6,300 at the end of 2011. New York Times News Service

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The World BusinessMirror

Tuesday, January 24, 2017

www.businessmirror.com.ph

May industrial strategy sees ‘sector deals’ with UK biz

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Garment workers on a lunch break in Bangladesh. At least 14 labor activists and workers have been detained since protests over low wages erupted at dozens of garment factories in Bangladesh, one of the top suppliers of clothing for global brands like H&M and Gap. Salahuddin Ahmed/The New York Times

Protests in Bangladesh shake a global workshop for apparel

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t first, the police knocked. Then they tried to kick the door down. Protests over low wages had erupted at dozens of garment factories in Bangladesh, one of the top suppliers of clothing for global brands like H&M and Gap, and the officers had come to question Jahangir Alam, president of a local trade union in Ashulia, a suburb of the capital, Dhaka. They told his wife he would be back within a few hours. That was a month ago. Instead, his wife said, Alam has sat in a jail cell so dark he could not see his own hands. She said they had spoken brief ly when she finally tracked him down to a Dhaka court. Alam is one of at least 14 labor activists and workers who have been detained since the unrest began last December, according to arrest records. The demonstrations disrupted work at factories that supply clothing to global fashion companies, like Inditex of Spain, owner of the Zara brand and PVH, which owns the Tommy Hilfiger brand. The police say the unrest has led to the suspension or firing of roughly 1,500 workers, many of whom took part in the protests. The police have accused the activists of inciting vandalism and other crimes, and several factories have pressed charges against many of their workers. But labor-rights groups say the government is trying to scare workers into silence by detaining innocent people. They say the detentions, and the looming risk of more arrests, are the biggest setback for workers since the collapse of Rana Plaza, a building that housed garment factories, where more than 1,100 people died in 2013. That tragedy, one of the worst industrial disasters in history, exposed major safety hazards at factories in Bangladesh, which churns out a steady stream of lowcost goods. And it prompted some of the world’s biggest brands to push for better conditions for the workers who make their clothes. By some measures, conditions have improved. But the brands now say the arrests and firings could undermine the progress they have made. In letters to Bangladesh’s prime minister, Sheikh Hasina, and other officials, retailers urged the government to take action to protect

1.1K The number of people who died when Rana Plaza building collapsed in 2013

workers, including addressing wage issues that had led to the protests. The minimum wage in Bangladesh is 32 cents an hour. They stopped short, though, of threatening further action. “Such situations damage the industry’s reputation and confidence levels, which we, together with the government and social partners, are all working so hard to bolster,” wrote Rob Wayss, executive director of the Accord on Fire and Building Safety in Bangladesh. The accord, a coalition of retailers, is dedicated to improving safety for the country’s garment workers. Gap, in a separate letter, said it was troubled by the recent events, and urged officials to ensure that no one was targeted “solely because of any association with a trade union or other group.” The prime minister’s office did not respond to repeated requests for comment. Bangladesh exports billions of dollars’ worth of clothes each year, making it the world’s second-largest exporter of ready-made garments after China. But its factories are efficient for some of the same reasons that they have been deadly: overcrowded buildings, limited oversight and a government that has historically repressed workers’ efforts to organize and fight for better conditions. In the wake of the Rana Plaza collapse, retailers formed two coalitions dedicated to improving the lives of workers: the accord, led by H&M, and the Alliance for

Bangladesh Worker Safety, which includes Gap and Wal-Mart. Both groups have created safety standards and mechanisms to enforce them, although the accord, with a legally binding arbitration provision, is largely seen as the stronger of the two. The alliance has no such clause, but it can impose financial penalties and expel members that violate its terms. Both groups point to progress, like the installation of fire doors and regular safety inspections. But as international attention has waned in the years since Rana Plaza, worker-rights groups have expressed concern that the gains could be lost. “Now the spotlight is off Bangladesh,” said Richard Appelbaum, a labor- and worker-rights expert at the University of California, Santa Barbara. “The government is responding more typically as it would have responded several years ago, if it could have.” The police came for Alam at night, said his wife, Jhorna Begum. When he did not return after several days, Begum scraped together about $12 to pay a lawyer who helped track him down to a local jail. The couple saw each other briefly when Alam appeared in court, just long enough for them to shout at each other across a crowded room. With two children at home, Begum said she could not afford to fight his case. She recently returned to work as a machine operator for the Palmal Group, another garment-maker. “We live hand to mouth, waiting for the paycheck at the end of the month,” Begum said, tears in her eyes. “I don’t know when he’ll get out—how am I supposed to run my family without him?” While Begum was willing to give her name to a reporter, many garment industry workers are afraid to speak out for fear of reprisals by the government. Labor-rights workers suspect that agents of the government or factory owners ransacked a number of union offices after the protests. And the death of Aminul Islam, a labor activist who was found tortured and killed in 2012, is still fresh in many minds. The complaints against the 14 people who have been arrested also include charges that could cover more than 1,000 possible suspects—a tool that can help the police arrest people in the future, according to labor lawyers. Some of the people who were arrested, for example, had been named in an unrelated political violence case that has been open since 2015. “When they find someone they want to put in jail, they enter that person’s name into the case,” said Jyotirmoy Barua, a lawyer

based in Dhaka, who is representing protesters who have been charged with conspiring to harm the state. “The cases are creating unrest, fear.” This month, protesters gathered in Dhaka, chanting and holding up signs as a plainclothes officer took notes nearby. Abul Hossain, president of the Dhaka chapter of the Workers’ Party of Bangladesh, said workers were frustrated by stagnant wages in a country whose cost of living had risen during the past few years. Wages have risen only twice in the past decade, even as inflation has risen as much as 10 percent a year, according to the Bangladesh Bureau of Statistics. Workers expected their pay to be reviewed last year by a government wage board that can meet every three years. When that did not happen, they started protesting. Siddiqur Rahman, president of the Bangladesh Garment Manufacturers and Exporters Association, a trade association that represents factory owners, said factories, too, had come under pressure: Costs have risen 17.5 percent annually for the past two years, he said, even as global clothing prices have decreased. R ahman added that, while global retail brands had called on Bangladeshi factories to improve safety standards and wages, they had resisted paying higher prices to help compensate for the increased costs. He also said that fewer than 1,500 employees had been fired, and that some had returned to work. Both Gap and H&M said that they supported a regular wage review mechanism to ensure stability in the future, and that they were monitoring the situation closely. Labor advocates, though, say the global companies should be doing more, since billion-dollar brands, like H&M, have a lot of leverage with local factories and the government. A spokesman for H&M, Patrick Shaner, said in an e-mail the company had no plans to change its sourcing arrangements. Other companies that buy clothes from the factories that are pressing charges, including Abercrombie & Fitch, PVH and American Eagle Outfitters, did not respond to requests for comment. “At a certain point in time you have to wonder just how much the brands and retailers will tolerate,” said Scott Nova, executive director of the Worker Rights Consortium, a labor-rights group based in Washington that is among the most active nonprofits working in Bangladesh’s garment industry. “They can tell the factories to drop these charges.” New York Times News Service

heresa May will offer to deal with UK business sector by sector as she tries to prepare the economy for Britain’s departure from the European Union. Announcing her industrial strategy on Monday, which she hopes will improve UK productivity, the prime minister said she wanted to see “sector deals” where government backs areas where it thinks the UK could excel, including artificial intelligence and mobile networking. Ministers will hold a Cabinet meeting in northwest England to emphasize their desire to help parts of the country that have sometimes be left behind by industrial shifts. The strategy “will be underpinned by a new approach to government, not just stepping back but stepping up to a new, active role that backs business and ensures more people in all corners of the country share in the benefits of its success,” May said in an e-mailed statement. May has placed the industrial strategy at the heart of her effort to define her government beyond Brexit. The plan, subject to a public consultation, aims to draw together policies on transport, education, telecommunications, energy and construction to ensure businesses have the skills, links and access to supplies needed to expand and diversify into new and growing industries, such as renewable energy and robotics.

Future economy

The strategy is “about the economy of the future, it’s about ensuring that business can grow and is encouraged to grow in the UK,” May said on Thursday in a television interview with Bloomberg News Editor in Chief John Micklethwait. “It’s also about ensuring that the benefits of prosperity are available across the whole country, we see that economic growth and prosperity for everyone.” Among areas targeted for government help is technical education. May will announce £170 million ($210 million) for new institutes, teaching science, technology, engineering and math, that will provide high-school graduates with the skills demanded by local employers. The prime minister also aims to boost teaching

of those subjects in universities, as well as math in high schools. May’s focus on technical education is likely to please businesses. A survey released on Saturday of 800 members of the Institute of Directors, a business lobbying group, found that their top policy priority is a long-term skills strategy, with threequarters of companies saying it’s “very important.” Infrastructure improvements and better broadband were their second and third choices.

Single market

May signaled on Tuesday that she aims to pull Britain out of the EU’s single market and customs union as part of two-year divorce process she plans to trigger by the end of March. The industrial plan and the stated desire to forge new trade deals with countries from the US to China are part of government efforts to demonstrate Britain is open for business and investment, even as it cuts ties with its closest neighbors. Chancellor of the Exchequer Philip Hammond has already outlined spending on roads and broadband, as well as a £23-billion National Productivity Fund designed to spur growth. The nation’s economic output per hour has effectively stagnated for a decade, only returning to its prerecession levels last October. Britain hasn’t had an explicit industrial strategy of the kind envisaged by May since Margaret Thatcher was in power in the 1980s. When she stood for leadership in July, May said her aim was to create “a proper industrial strategy to get the whole economy firing.” One of her first acts as leader was to unite the business and energy departments into a new Department for Business, Energy and Industrial Strategy. “This is an important step in building a modern, dynamic industrial strategy that will improve living standards and drive economic growth across the whole country,” Business Secretary Greg Clark said in the statement. “A modern British Industrial Strategy must build on the UK’s strengths and extend excellence into the future.” Bloomberg News

Trump era in US may force Europe into deciding its role

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onald J. Trump’s arrival in the White House means it may, finally, be decision time for Europe. The new US president’s barrage of criticism in the run up to his inauguration last week prompted pledges to stick together and revive support for the European Union. Germany’s Angela Merkel vowed to maintain unity through continuous dialogue with other members. Mark Rutte of the Netherlands called for a fresh focus on the economy, while European Commission Vice President Frans Timmermans warned critics not to underestimate the bloc’s determination. The test will be whether their renewed commitment is enough to address flaws in the EU’s structure that have been glossed over in recent years. Since the high water mark of integration brought the single currency and expansion in the east, the EU has fudged questions, such as how far to pool its taxes and debts, how much to spend on defense and whether to adopt a common foreign policy toward neighbors, such as Russia and Libya. With the UK’s decision to turn its back on the EU buoying populist campaigns across the continent, the bloc’s defenders already face an urgent dilemma over how close a union they’re prepared to forge in response. Trump’s heckling from the sidelines piles on more pressure to adapt or see doubts about the project’s long-term viability increase. “Trump’s impact is that Europe has to decide very quickly what kind of Europe it wants to be,” Guntram Wolff, director of the Brussels-based Bruegel Institute, said in a phone interview. “This is a big problem because we have to react now and there’s a lot of denial.”

Trump’s critique

Trump rocked the EU by branding it a vehicle for German domination in an interview published in two European newspapers on January 15. He said other countries would follow the UK in leaving and called the North Atlantic Treaty Organization (Nato), the guarantor of US military backing for Europe, “obsolete”—all while making overtures to Russia. As he addressed the nation from the steps of the Capitol on Friday, he said it’s time to

put “only America first” when dealing with other nations. He portrayed the US, the world’s biggest economy and its dominant military power, as a nation ravaged by the consequences of weak borders, unbalanced alliances and bad trade deals. Despite the hyperbole, there’s an element of truth in Trump’s criticism. Politicians and voters in southern Europe chafed at the demands of Germany and its allies during the euro-area crisis, while the leaders of the world’s biggest economic bloc are conscious that they’ve piggy-backed on US military might for decades. A blueprint for integration drawn up by commission chief Jean-Claude Juncker, EU President Donald Tusk and European Central Bank Head Mario Draghi is languishing in a drawer in Brussels, while a post-Brexit initiative to step up defense cooperation has so far amounted to little more than vague pledges.

End of the dream

In Davos, Switzerland, last week, Dutch Prime Minister Rutte declared that the EU founders’ dream of “ever closer union” was dead and buried, and said today’s leaders need to focus instead on getting the economy working, highlighting one of the union’s persistent fissures. “I will fight for a European union which is going back to its core, in which member states implement what they have promised to do like with the stability and growth pact,” he said in an interview with Bloomberg Television’s Erik Schatzker. “So yes, reforms in the Netherlands, but also in France, also in Italy.” Both Rutte and Jens Stoltenberg, the Nato secretary general, said EU nations must increase their defense spending. Trump on Friday complained that for many decades the US has “subsidized the armies of other countries.” Europe’s problems are coming to a head as governments in the Netherlands, France and Germany—three of the EU’s six founding members—face elections in which voters who feel they’ve been left behind or neglected by the establishment consider abandoning the EU to pursue narrower, nationalist interests. Bloomberg News

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AseanTuesday BusinessMirror

Editor: Max V. de Leon • Tuesday, January 24, 2017 A9

Singapore prices rise for first time since 2014

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onsumer prices in Singapore rose last December for the first time in more than two years, adding to signs of recovery in the citystate’s economy. The consumer price index (CPI) rose 0.2 percent from a year earlier, compared with unchanged prices last November. The median estimate of 16 economists in a Bloomberg survey was for a 0.1-percent gain. Prices increased 0.2 percent in the month. Core inflation, which excludes costs of accommodation and private road transport, rose 1.2 percent last December from a year earlier, in line with the median forecast. Lower oil costs and government measures to rein in property values have driven consumer prices down in the trade-dependent economy since November 2014. The Monetary Authority of Singapore (MAS), which uses the exchange rate as its main policy tool rather than interest rates, had forecast a pick-up in inflation to between 0.5 percent and 1.5 percent this year. That may give it reason to stick to its neutral policy stance at its next scheduled meeting in April at a time when exports are starting to grow.

Vietnam allows some citizens to gamble during three-year trial

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Experts’ takeaways The CPI increase was “on the back of rising petrol prices,” said Jonathan Koh, an economist at Standard Chartered Plc. in Singapore. “In 2017, we expect prices to continue to pick up” to average 1.1 percent. The data is “in line with what the MAS has forecast,” he said. “At the moment, we don’t expect any changes in MAS policy.” “On the external front, imported inflation is likely to rise modestly on the back of a turnaround in global commodity markets,” the MAS and Ministry of Trade and Industry said in a joint statement. “Domestically, overall cost pressures should be muted. Amid a pullback in hiring, conditions in the labor market have slackened. This will cap underlying wage growth, even as nonlabor business costs have eased.” Food prices, which make up about 22 percent of the consumer price basket, rose 2 percent last December from a year earlier. The

A view of the China Town wet market in Singapore. BLOOMBERG

biggest rise in prices on an annual basis was for education, which increased 3.2 percent. The MAS and

MTI see core inflation averaging 1 percent to 2 percent this year, compared with 0.9 percent in 2016,

though the pickup will be gradual because of a lack of demand pressures. Bloomberg News

South China Sea update: Japanese leader Abe dividing Asean?

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hina is not happy with Japanese Prime Minister Shinzo Abe’s high-profile visits to the Philippines, Australia, Indonesia and Vietnam over concerns that he may be trying to pull the rug out from under Beijing’s efforts to pacify its neighbors in and around the South China Sea. “The Japanese leader spared no effort in driving a wedge and playing up the regional tension, showing his ulterior motives and extremely unhealthy mind-set,” Foreign Affairs Spokesman Hua Chunying told reporters. She said Abe’s Asia tour came just as Beijing and its neighbors have stabilized the situation in the South China Sea. In the Philippines, which is hosting Southeast Asian leaders this year, Abe said the South China Sea issue is linked directly to regional peace and stability and is a “concern to the entire international community”. He also welcomed Philippine President Duterte’s efforts to improve Manila’s ties with Beijing following the Philippines’s victory in an arbitration ruling last year declaring China’s maritime claims invalid. China has refused to recognize the arbitration decision and has warned the United States and other countries not involved in the territorial row not to meddle in the disputes, which Beijing wants to settle through one-on-one negotiations. A commentary by the state-run Xinhua News Agency said although Abe raised the arbitration ruling with Duterte, he “will probably feel disappointed” as Duterte made no direct mention of the disputes. In fact, Duterte described Japan as a “friend closer than brother” during a state dinner for Abe. “We are friends who are bound by shared common resolve to uphold democracy, adherence to the rule of law, and the peaceful settlement of disputes,” Duterte said. In both the Philippines and Vietnam, Abe pledged investment opportunities and support for the countries’ coast guards in protecting their waters. He said Japan will provide new patrol vessels to both nations.

PHL files rare Protest vs China

The Philippine foreign secretary has filed a verbal protest to China over Beijing’s placing of anti-aircraft and anti-missile weapons on its manmade islands in the South China Sea

IN this January 15 file photo, Indonesian President Joko Widodo (left) talks to Japanese Prime Minister Shinzo Abe, as Abe inspects an honor guard during a welcome ceremony at Presidential Palace in Bogor, West Java, during Abe’s visit to Indonesia. AP

The Japanese leader spared no effort in driving a wedge and playing up the regional tension, showing his ulterior motives and extremely unhealthy mind-set.”—Hua —a rare move since Manila warmed up to Beijing last year. “I just want to assure the Filipino people that when we take action at engaging China in this dispute, we do not want to take such aggressive, provocative action that will not solve the problem,” Perfecto G. Yasay told CNN Philippines. He added: “We cannot engage China in a war.” Beijing says the artificial islands are intended to boost maritime safety in the region while downplaying their military utility. They also buttress China’s claim to ownership of practically the entire South China Sea.

Vietnam, China set aside maritime disputes

Days before Japanese Prime Minister Shinzo Abe visited Vietnam, the country’s Communist Party chief Nguyen Phu Trong led a high-power delegation to Beijing for talks with President Xi Jinping. Vietnam has had complicated relationship with China: both are

nominally allies ruled by communists, but unresolved maritime boundaries and China’s pressing ahead with its territorial claims over objections of other claimants has rattled Hanoi. In 2014 China moved an oil rig into the disputed Paracel Islands, triggering a tense standoff that involved Vietnamese and Chinese vessels ramming each other. The statement at the end of the talks said both sides would try to peacefully settle their claims. The official Xinhua News Agency said that China and Vietnam have jointly patrolled and explored for oil in the Gulf of Tonkin in one of the “success stories” that “demonstrate that both countries are committed to shelving their maritime differences through cooperation rather than confrontation, which will yield more win-win results and larger-scale cooperation.” In Hanoi police broke up a rally to mark the anniversary of a 1974 naval clash in which Chinese forces gained control of the Paracels, killing 74 sailors from the former South Vietnam. Cambodia, long a loyal friend to China, has told the United States that it is canceling annual joint military exercises this year and next, even though planning had already begun. The reasons given by the Defense Ministry raised some suspicion. According to spokesman Gen. Chhum Socheath, the Angkor Sentinel exercise had to be postponed because Cambodian forces would be unable to fully participate as a result of two important events: local elections in June and a six-month campaign to eradicate drug-related crime. AP

ietnam’s government will allow some citizens to gamble at select casinos during a three-year trial period, according to a new decree. The law, which goes into effect on March 15, sets stringent guidelines for casinos applying for the trial license and Vietnamese who want to gamble. The law was announced on the government’s web site. The posting does not specify when local gambling licenses will be issued. Casinos that will be considered for a license allowing locals to gamble must commit a minimum of $2 billion to its complex. Vietnamese that are at least 21 years old and have a monthly income of at least 10 million dong ($443) will be allowed to enter casinos. They will also be required to pay 1 million dong for a 24-hour casino ticket or 25 million dong for a monthlong pass. The government will reassess the local gambling licenses after the three-year trial ends, according to the government posting. Bloomberg News

A10 Tuesday, January 24, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

As real as it gets

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s this editorial is being written, thousands of Filipinos are still in evacuation centers spread across the Visayas and Mindanao, waiting for floods brought on by heavy rains last week to fully subside so they can go back to their homes.

At least 20 people, most of them children, died last week because of nonstop rains, flash floods and landslides in several cities in the Visayas and Mindanao, according to the Office of Civil Defense. Hopefully, those still missing will be found alive. A state of calamity has been declared in several flood-ravaged areas, including Cagayan de Oro, Misamis Oriental, Cebu City, Valencia City in Bukidnon, and in several villages in Pagalungan and Datu Montawal in Maguindanao. There was no storm or supertyphoon like Sendong, Pablo, Yolanda, Lando or Nina. The rains, according to the Philippine Atmospheric, Geophysical and Astronomical Services Administration (Pagasa), were caused by a low-pressure area (LPA) in Mindanao and the tailend of a cold front affecting the Visayas. Yet, the waterworks were just as devastating and deadly. This deadly weather seems to be the new normal in our country, which is why the Global Climate Risk Index ranks the Philippines among the top 10 countries most affected by climate change in the past 20 years. For some years now, scientists have been calling our attention to a number of extreme weather events that have been happening around the world. They essentially have been saying the same thing: They’re part of the new reality, and are bound to get worse. We should brace ourselves and prepare more for these destructive weather disturbances. Or else we will reap the consequences. While we have made significant progress in carrying out initiatives to better adapt to the impacts of climate change, particularly in improving local government units’ abilities as first responders and equipping Pagasa with new tools and equipment to predict weather disturbances with considerable accuracy (like Project NOAH), we can undoubtedly do a lot more to minimize casualties and property damage. For instance, the head of Cagayan de Oro City’s Disaster Risk Reduction and Management Council said the massive flooding in the city was caused by poor drainage systems and denuded mountains due to logging, not by an overflowing river, which caused the flooding during Typhoon Sendong’s wrath in 2011. You would think both citizens and public officials have learned painful lessons about deforestation and indiscriminate garbage disposal by now. Survivors of past floods and landslides have all complained about them at one time or another, and we have suffered one tragedy after another as a result of rampant logging and clogged waterways and drainage systems, yet we have done little to prevent the next tragedy. Floods and landslides are not just natural, but man-made, disasters. They are rooted in poverty, corruption and environmental abuse. We need to take steps to minimize the damage of weather disturbances and other natural disasters, and just do them. Now. Vigorous national attention should be given to measures to stop destructive logging and mining, to reforestation and the rehabilitation of our rivers, waterways and drainage systems. Regardless of how prepared the government is to provide assistance during typhoons, there will always be inadequacies, but casualties are always preventable. One death is still one death too many, and the 18 deaths last week were all preventable tragedies. Our target must always be zero casualty. No lives lost. Joey S. Salceda, when he was Albay governor, showed the “zero casualty” approach works when you equip local governments down to the barangays with the training and facilities needed to cope with the initial impact of emergencies brought about by typhoons. We urge the national government to use its P37-billion-plus National Disaster Risk Reduction and Management Fund to provide local governments with similar adequate preparations so they can save lives. While scientists say single weather events cannot conclusively be linked to global warming, the unprecedented destructions brought on by what used to be quite ordinary and uneventful LPAs and cold fronts in our country seem consistent with the trend of extreme weather disturbances caused by climate change. We can sure see the science, and we experience the deadly effects of climate change in our everyday lives. Climate change is not fake news. In the Philippines it is as real as it gets.

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THE Entrepreneur

Part One

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ne word that best describes Rodrigo Roa Duterte before and after he became president is “unorthodox”. His unusual way of campaigning for the May 2016 elections drew a lot of criticism from rivals and political observers, and even the ire of powerful religious leaders. At the same time, however, it earned him the trust and approval of the electorate—more than 16 million voted for him to become president. As it turned out, being unorthodox was not a simple campaign gimmick to win the presidency. The word continues to reflect not only Duterte’s style of governance, but also his vision for the Philippines. This is best shown in his decision to radically change the government’s foreign policy, from the long-standing close alignment and even subservience to the United States—which raises the question of whether the Philippines remains a US colony, despite being declared independent in 1946—to an independent policy of friendship with all other nations, based on mutual respect for each other’s sovereignty. Perhaps, because many of the countr y’s current leaders and intellectuals grew up knowing only

a US-oriented foreign policy, or maybe because of the natural human resistance to anything unusual (or orthodox), Duterte’s foreign-policy thrust, like his campaign style, quickly drew criticisms, if not cruel comments. Lost in the loud opposition and denunciation of his foreign policy was its other side: the benefits and advantages that the Philippines gained from pursuing an independent pro-Filipino foreign policy in dealing with other nations. Former Foreign Secretary Albert F. del Rosario described Duterte’s foreignpolicy direction as “unfortunate”. “I like to think that the foreignaffairs strategy may be driven off-track a bit and, perhaps, we can persuade this government to

Shortsighted nonsense John Mangun

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Duterte and Philippine foreign policy

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he 17th-century Flemish painter, Pieter Bruegel the Younger, was noted for his religious subjects and village scenes. One of his paintings depicts a festival held in a rural farming community. Amid the eating and drinking, in a corner near the barn are two dogs mating, a common scene in that environment. Too much of the information we receive is incomplete and shortsighted. That problem affects our judgment and perception of what is really going on. Described as the Father of Modern Doomsday Predictions, Paul R. Ehrlich in a speech before the British Institute of Biology in September 1971 said: “By the year 2000 the United Kingdom will be simply a small group of impoverished islands, inhabited by some 70 million hungry people.... If I were a gambler, I would take even money that England will not exist in the year 2000.”

Ehrlich is a biologist who has been at the forefront of overpopulation hysteria for 40 years, and he has always been wrong. When asked in 2004 about his incorrect forecasts, he said, “Fifty-eight academies of science said that same thing in 1994. My view has become depressingly mainline”. Depressingly mainline and shortsightedly inaccurate. Interestingly, about the time Ehrlich wrote his book The Population Bomb in 1968 the rate of global population growth peaked. In 1970, according to the United Nations, the annual global population growth rate

What has the President’s handling of international relations in his first six months in office achieved? Let me just mention one. Local newspapers published last October a report from BMI Research, a unit of international credit-rating agency Fitch, which said the Philippines’s move to resume friendly relations with China, which yielded $24 billion worth of loans and investment pledges, would create more opportunities for both countries. revisit the offtrack direction that is driving the so-called new foreign policy,” del Rosario said on the sidelines of an economic forum organized by the Stratbase-ADR Institute for Strategic and International Studies last September. He also warned the Philippines might lose trade incentives, as well as grants, from the United States and the European Union. In a speech during the same forum, ADR Institute President Dindo Manhit said Duterte’s foreign policy “risks alienating its major economic partners and creating an unwelcoming environment to foreign investors”. Online news reports also quoted former Sen. Sergio R. Osmeña III as saying Duterte was “mishandling” the country’s international affairs, while retired Ambassador

was 2.2 percent. It has fallen to 1.2 percent as of 2015. The same data forecast that by 2050, that growth will be 0.50 percent. We have long passed the time when population growth is a concern. But how can that possibly be true? Not so long ago that the world newspaper headlines were screaming doom as the global population reached 7 billion. But even as the population grows, the growth rate is slowing dramatically. Think of it this way. Your grandfather was one of six siblings. Your father was one of four. You are one of two. The family “population” has increased, but the growth rate is low. Global population has doubled since 1970 but it is not because of “too many” babies. It is because of too many senior citizens. In 1990 there were 650 million between ages of 0 and 4. Today that number is 669 million. In 1990 there were 124 million people age 75 and above. Today there are 245 million. Global fertility rates—the number of births per woman—is below replacement level (2.1) in every region, except Africa and India. Asia,

Apolinario Lozada was cited as describing Duterte’s foreign policy as “directionless”, and his warming up to China, while “taking for granted” traditional allies, as “naïve”. Is Duterte, whose political career leapfrogged from being a city mayor to chief executive, really an amateur in international affairs? As the old proverb states, “The proof of the pudding is in the eating”. What has the President’s handling of international relations in his first six months in office achieved? Let me just mention one. Local newspapers published last October a report from BMI Research, a unit of international creditrating agency Fitch, which said the Philippines’s move to resume friendly relations with China, which yielded $24 billion worth of loans and investment pledges, would create more opportunities for both countries. On January 11 Forbes published online an article, titled “Japan and China are competing to win over the Philippines”. The article, written by Forbes contributor Ralph Jennings and carried by other news web sites, illustrates my take on what really is happening in our international relations, and the man who is now leading us in the global arena, which I will discuss next week.

To be continued

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including China, is running at 1.7. The annual population growth of the 0-64 demographic turned negative in Japan in 1989, negative in Europe in 2012 and will turn negative in China this year. Global life expectancy was 60 years in 1970; it is now 71 years. Of course, we must be concerned about conversation and efficient use of resources, as well as the life quality of the 7 billion. Only a fool would believe otherwise. But in this case of population, by focusing on the shortsighted total number, we miss the bigger and more important picture. The Bruegel painting measures over 1 meter by 1 meter, and the two dogs take up about 1 square inch. But if your vision was so bad that you had to get close to the painting to see it clearly, your focus on that 1 square inch might lead you to believe that the picture was about farm animals and not about farmers. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.

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Intractable lessons in Congress before DU30 came to power Cecilio T. Arillo

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ONGRESS, before Duterte came to power, would have carved a niche in history, if only it had used its wisdom and experience to restore public trust through its lawmaking and oversight functions, instead of just plodding along in excessive partisanships and highly anomalous and irregular actions. Some of the highly publicized scandals arose from pork barrels and the highly questionable privatization of moneymaking multibillion-peso corporations, as well as heavily indebted financial institutions and government-owned companies. Congress’s image hit rock bottom because of the preoccupation of some of its members with popular causes and those that served their political and economic interests. The more important business of checking deficit spending, foreign borrowing and debt restructuring, among other questionable actions, committed by the previous administrations were conveniently obfuscated. Under the Constitution, Congress (House and Senate) has two interrelated functions when it comes to allocations of public funds: authorization and appropriation, in that order. In fact, these functions are explicitly written in Section 24, Article VI of the 1987 Constitution, which says: “All appropriation, revenue or tariff bills, bills authorizing increase of the public debt; bills of local application and private bills shall originate exclusively in the House of Representatives, but the Senate may propose or concur with amendments.” Unless the present Congress regains the exercise of these exclusive functions, there’s no way the government can spur economic growth, because under this culpable practice what is left for Congress to do is just the act of consenting without thoroughly deliberating if public funds are available or not, how funds, if available, are properly allocated to the national and local governments, how they are audited and accounted for to make sure that nothing is stolen and wasted. And what happened to the preaudit system? Patterned after the US General Auditing Office’s practice since the time of John R. McCarl, an American lawyer and executive secretary of the national Republican Congressional Campaign Committee in 1921, the preaudit system had been in practice in government until 1972, when former President Ferdinand E. Marcos declared martial law, reorganized the government, and adopted the postaudit system that saw the abuse or misuse of government funds, particularly in the area of budgeting and allocation of funds for governmentcontrolled corporations. When President Aquino took over the presidency, her first appointed Commission on Audit chairman, Teofisto Guingona, attempted to restore the preaudit system, but was unsuccessful in doing so as Mrs. Aquino opted to maintain the Marcos postaudit system upon the suggestions of her financial advisers and some of the foreign creditors. Her decision to adopt the postaudit system and the Marcos Presidential Decree (PD) 1177 marked her questionable actions and those of her successors, from President Fidel V. Ramos, to President Joseph E. Estrada, to President Gloria Macapagal-Arroyo, to President Benigno S. Aquino III. For instance, PD 1177, which automatically services foreign debt and domestic borrowings, without congressional interference, clearly violates the 1987 Constitution. In fact, some of its provisions were curiously correlated by Mrs. Aquino in

Congress’s image hit rock bottom because of the preoccupation of some of its members with popular causes and those that served their political and economic interests. The more important business of checking deficit spending, foreign borrowing and debt restructuring, among other questionable actions, committed by the previous administrations were conveniently obfuscated. the administrative code. Another law, Proclamation 50, signed by President Aquino on December 15, 1986, further legitimized foreign debt and its automatic servicing, again, without congressional interference. Under these two edicts, only the President, the finance secretary and the Bangko Sentral (Central Bank) governor have the power to allocate funds to service and restructure foreign and domestic borrowings, a function Congress abdicated since 1988 in clear violation of the 1987 Constitution. If the number of cases and huge amount of money involved in scams against public officials, investigated or obfuscated were any indication on financial irregularities, the previous administrations were far worse based on historical records. The Ramos government and the Aquino III regime may emerge as those with the most number of bigtime scams in the country’s history. Just look at the Disbursement Acceleration Program and the Priority Development Assistance Fund multibillion-peso scams during the Aquino III presidency, which were outlawed by the Supreme Court and the Ramos government’s involvement in the multibillion-peso Philippine Estates Authority-Amari deal; the P9-billion centennial irregularity; the P7.8-billion missing Armed Forces of the Philippines trust modernization fund; the P42-billion housing scandal between 1987 and 1999; the multibillion-peso oil-revenue irregularity; the mismanagement of the soldiers’ trust funds; the nonremittance of the P14-billion national government contributions to the Government Service Insurance System; and the highly scandalous and irregular deals involving the National Steel Corp. and the National Power Corp., which was unearthed by former Sen. Juan Ponce Enrile. In the centennial scam, the Senate Blue Ribbon Committee recommended the criminal and administrative prosecution of Ramos and five of his Cabinet members. Corporate crimes in the Philippines, both prosecuted and not prosecuted, were more pervasive and more damaging than all street crimes committed in the past 30 years, and the saddest part of the entire record was that all five presidents in the postMarcos years have spent more than P35 trillion in accumulated budgets, compared to President Marcos’s accumulated budget of only P486.42 billion in 20 years. Yet, the Marcos regime, warts and all, had more to show in terms of tangible and intangible accomplishments. To reach the writer, e-mail cecilio.arillo@ gmail.com.

Tuesday, January 24, 2017 A11

Preparing students for work and careers in the future Edgardo J. Angara

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t the recent World Economic Forum meeting in Davos, the United Arab Emirates, through the Dubai Future Foundation, launched its first global State of the Future report, which cites trends in seven key areas and the role of technology in those areas.

Education was one of the report’s focus areas, highlighting how wider Internet connectivity, improved virtual-reality technology and breakthroughs in biology and chemistry will drastically change how societies educate their people. The report paints an exciting, technology-driven future for education. It also raises controversial and relevant issues of today. For one, inequity in higher education persists—the problem of the so-called college-completion gap. Around the world, up to 72 percent of students from the top income bracket graduate college versus only 7 percent from the lowest bracket. Another issue is the imperative

for curriculums to be updated and for employers to work more closely with educational institutions. The world of work is changing so fast that up to 60 percent of our schoolchildren today will be employed in jobs that do not even exist yet, while 50 percent of students do not even know the requirements for well-known professions today. The above issues relate to the equity and quality of education our children receive. And they have some relevance to the ongoing debate on our government’s efforts to provide free college. Last December, Congress submitted to President Duterte a proposed national budget that allocated up to

Black eye for PNP Ernesto M. Hilario

ABOUT TOWN

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his is one controversy that the Philippine National Police (PNP) needs like a hole in the head. We’re referring to the killing of South Korean national and former Hanjin executive Jee Ick-joo by a group of rogue policemen right inside Camp Crame.

The incident was said to have taken place in October last year, on the same day the Korean businessman had been abducted from his house in Angeles City, Pampanga, on the pretext that he had been involved in illegal drugs. But this was actually a kidnap-forransom case, as the scalawag cops demanded—and got—P5 million from his wife, even when he was already dead and, in fact, had been cremated in a facility in Caloocan City owned by a former cop to hide evidence of the crime. PNP chief Director General Ronald M. dela Rosa should leave no stone unturned in the investigation of this case, as this has already damaged the credibility of the institution, as well as President Duterte’s war on drugs. Sen. Panfilo Lacson is right: Dela Rosa should refocus his sights in the campaign against illegal drugs and criminality, and closely monitor the

conduct of the men and women in uniform, so that they adhere to the highest standards of performance, since the PNP is the primary law-enforcement agency of the government. Dela Rosa’s photographs showing him attending various functions, even singing in a rock concert, have been all over both mainstream and social media, aimed seemingly at maximum public exposure. The top cop has made no secret of a possible run for a seat in the Senate, possibly in 2019, after his compulsory retirement next year. Is this the reason he is making himself very visible in both mainstream and social media as preparation for a senatorial bid in 2019? The PNP chief should realize, however, he has a job to do at this juncture, which is to ensure that the war on illegal drugs succeeds without unnecessarily inviting flak or criticism that he tolerates wrongdoing

The world of work is changing so fast that up to 60 percent of our schoolchildren today will be employed in jobs that do not even exist yet, while 50 percent of students do not even know the requirements for well-known professions today.

P8.3 billion for the Commission on Higher Education (CHED) for free tuition for all students in state universities and colleges (SUCs). The CHED issued a position paper welcoming the intention of lawmakers “to infuse more funds into public higher education,” but asserted that the proposal would have an unintended regressive impact. The paper cited the government’s 2014 Annual Poverty Indicators Survey, which revealed that only eight out of 100 collegeage students (17 to 24 years old) come from the poorest 20 percent of the population, while close to 27 percent belong to the richest 20 percent. Under this situation, the free-college proposal would effectively mean the government will be subsidizing the education of those who could afford it, at the expense of those who need more

and outright criminal activities by PNP officials and personnel. Dela Rosa should avoid politicking while he is PNP chief, and instead ensure that the PNP adequately performs its mission as a competent, effective and credible law-enforcement institution. We must remind dela Rosa that he should serve as an example to the PNP of competent leadership and dedication to duty, especially since the war on drugs is a top priority of the Duterte administration.

Round 3

Like many Filipinos, we hope that the third round of peace talks between the Philippine government and the communist-led National Democratic Front (NDF) that started last Thursday in Rome and will last until tomorrow, January 25, would eventually lead to a comprehensive peace agreement in the near future. Presidential Adviser on the Peace Process Jesus G. Dureza said the third round of talks centers on unfinished discussions on the proposed bilateral cease-fire and the release of prisoners. Relate“The crucial agenda items on socioeconomic reforms, constitutional and political reforms and end of hostilities and disposition of forces are on the table for discussions. These issues, although difficult, are surmountable, with both sides sharing common aspirations for peace,” Dureza said. But Fidel Agcaoili, the NDF chief negotiator, is not as opti-

Mixing it up! G2G and then PPPs By Alberto Agra

PPP Lead Continued from A1

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hey are governed by their respective charters and have specialized mandates. Between and among themselves, they can collaborate, share resources and bind themselves in a contract for a specific objective or project. There is no specific law that governs the manner by which they should choose their counterpart save in the case of interagency procurement. When one AA procures from another AA, this is governed by implementing rules of the Government Procurement Reform Act (GPRA). They can just negotiate. n PPP. In a PPP, an AA partners with a private-sector proponent (PSP) for an infrastructure or social, service project. There is no single law in the Philippines governing

the 24 possible PPP modalities. The build–operate–transfer law, the joint venture guidelines issued by the National Economic and Development Authority, GPRA, corporation and

civil codes and the memorandum circular issued by the Department of Interior and Local Government lay down the parameters. In terms of procedure, an AA in a PPP cannot, unlike in a G2G, choose a PSP through straight negotiations. The selection of the PSP must go through a competitive and transparent process. n G2G and PPP. So for an airport and seaport project on reclaimed land in Puerto Princesa, the Department of Transportation, Power Purchase Agreement, PRA and city can pursue a four-party G2G. They can simply agree among themselves and no bidding is required for them to enter into a memorandum of agreement among themselves. The national budget can provide funding for this project, or they can secure a loan from the Development Bank of the Philippines. They are not precluded from engaging a PSP to design, finance, construct and/or operate the project. However, the implementing

than tuition assistance (e.g., living and book allowances) to complete their higher education. The position paper also said the proposed free-tuition policy—employing a blanket, one-size-fits-all approach—must be weighed against the greater need for enormous strategic investments to raise the quality of the country’s higher-education system. For instance, between 2010 and 2012, the Philippines spent only $548 per capita for higher education, which includes teacher salaries and funding for research and development. In stark contrast, Indonesia, Thailand and Vietnam spent more than twice that, while Malaysia and Singapore invested 17 and 29 times more, respectively. President Duterte signed the 2017 national budget. He appears to have heeded the concerns of the CHED, and issued a conditional veto, barring the implementation of the free college tuition policy until the CHED and the Department of Budget and Management issue guidelines that give priority to financially disadvantaged but academically-able students. That is an eminently sound position.

E-mail: angara.ed@gmail.com, Facebook and Twitter: @edangara.

mistic as Dureza, as he says ending one of Asia’s longest insurgencies with a peace pact would not be possible before 2019. The NDF, Communist Party of the Philippines’s political arm, has warned that its guerrillas in the countryside want an end to their declaration of a unilateral cease-fire, as they had become frustrated with the government’s “broken promises”. “The NDF goes into the third round of formal talks in Rome determined as always to persevere with the peace talks, but increasingly troubled by the other party’s sincerity,” Agcaoili said. NDF leaders have said they would need at least two more years, after negotiators agree on a series of economic, social and political reforms before even beginning “serious discussions” on a final peace pact. Duterte deserves commendation for paving the way for the resumption of the stalled peace talks with the NDF that could finally put an end to the longest-running Marxist insurgency in Asia. Peace is what the nation needs so that we can go all-out in our socioeconomic development efforts, particularly in Mindanao. No less than 30,000 people are said to have died as a result of the armed conflict between the New People’s Army and the Philippine government. It’s time to end the conflict on the negotiating table, not in the battlefield.

E-mail: ernhil@yahoo.com.

agency(ies) can only contract with a PSP who obtains the award either through bidding or an unsolicited proposal, where PSPs are allowed to challenge the original proponent. In this case, G2G and PPP are undertaken simultaneously. n G2G then PPP. The other approach is sequential. The project can be funded and procured by the AAs, then the operations, management and maintenance can be done through a PPP. This is the hybrid being advocated by the secretary of finance. n Benefits. In any collaboration, each party contributes, shares expertise and benefits from the arrangement. In a resource exchange, turf issues may be avoided, since they will consensually cooperate rather than compete for a project. In which case, the project will have a greater chance of being future-proofed. Whether G2G and/or then PPP, the general public must be the ultimate beneficiary. Governance is people-centered.

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Tuesday, January 24, 2017

Pinoys’ spending seen increasing 7% this year as job figures spike

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By Cai U. Ordinario

Economists see slower GDP growth starting Q4

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he higher-than-expected job creation in 2016 will likely keep Filipinos’ consumption robust this year, according to a local think tank. In its latest Market Call, First Metro Investment Corp.-University of Asia and the Pacific (FMICUA&P) Capital Market Research said consumption spending could post a growth of 7 percent this year, largely due to the 2.1 million new jobs created in 2016, which could support consumption growth until this year. “The 2.1 million new jobs in 2016 will likely support the trend of 1.1 million Filipinos annually moving out of poverty between 2012 and 2015 into 2016 and beyond. This, together with higher peso value for OFW [overseas Filipino workers] remittances, will ensure a solid base of 7-percent-and-above growth in consumer spending, which accounts for more than 70 percent of GDP,” the think tank said. FMIC-UA&P Capital Market Research earlier said it expects GDP to grow 7 percent to 7.5 percent this year. This forecast is not only based on strong domestic spending but also a sight recovery in exports. The International Monetary Fund (IMF) projects global GDP to increase to 3.4 percent this year, compared to only 3.1 percent in 2016. This will likely boost export growth this year, despite posting a contraction of 5.2 percent in the January-to-November 2016 period. “With manufacturing output still humming, peso [value of] OFW remittances remaining positive, and exports posting their second consecutive growth record last October, the investment-led growth of the economy is still on track to a 7-percent fullyear GDP growth in 2016. This pace should accelerate slightly in 2017, as the domestic-demand growth drivers are intact, while an added boost may come from exports,” the FMIC-UA&P Capital Market Research said. Apart from these, the think tank also expects foreign direct investment to increase in 2017. This will

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2.1M The estimated number of new jobs created in 2016

CAHYADI: “Going into 2017, we have expected the domestic economy to cool off. GDP growth has been running at 7-percent pace since the election-related spending first provided a boost.”

be enough to offset any slowdown in the investments from the United States and Europe. The FMIC-UA&P Capital Market Research said investors from Japan, China, South Korea and Taiwan are expected to scale up their investments this year. Further, the think tank said the oil-production cuts by the Organization of the Petroleum

Exporting Countries will not affect Libya and Nigeria, which are ramping up oil production. Also, with more drilling rigs deployed in the US and Canada, the FMIC-UA&P Capital Market Research said oil-importing countries, like the Philippines, need not worry about high oil and food prices this year. “There is still much inventories

stored in barges. As for food prices, the generally mild weather should usher in a more stable prices with better production, while rice inventories have been on an upward trend,” the think tank said. The country’s official GDP estimates for the fourth quarter of 2016 and full-year 2016 will be released on Thursday by the Philippine Statistics Authority.

WANDA, WOMEN Miss Universe 2016 candidates, together with Tourism Secretary Wanda Corazon T. Teo, take a “wefie” at the Rizal Monument in Luneta Park, Manila, after the wreathlaying ceremony on January 23, or seven days before the grand coronation. ALYSA SALEN

By Bianca Cuaresma @BcuaresmaBM

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he local economy may have slowed down in the October-to-December 2016 period, as compared to the stellar numbers seen in the earlier quarters of 2016, although analysts are not worried, as the Philippines is still expected to remain a regional outlier during the period. In separate commentaries, ING Bank economist Joey Cuyegkeng and Singaporebased DBS Bank economist Gundy Cahyadi said the economy probably lost steam from the 7.1-percent growth seen in the third quarter of 2016 to the 6-percent territory last October to December. In particular, Cahyadi placed their Philippine GDP forecast at 6 percent, more than a full percentage point down from the previous quarter. “Recent data indicate strong momentum persists in the domestic economy. [The recent] remittances data, which came above $2.2 billion, suggest that 7-percent private consumption growth might have been sustained in the fourth quarter of 2016,” Cahyadi said. ING Bank’s Cuyegkeng, meanwhile, is looking at a 6.5-percent growth forecast for the October-to-December 2016 period. “Consumption and investment activity resulted in higher-than-trend growth. Strong domestic spending has made up for weak export growth. GDP growth has surprised on the upside in three of the last four quarters,” Cuyegkeng said. In its latest monetary-policy meeting, the Bangko Sentral ng Pilipinas (BSP) also said latest demand indicators show that domestic-demand conditions remain relatively firm. “Other high-frequency indicators continue to point to sustained growth in the near to medium term. Prospects or aggregate demand are expected to remain solid on the basis of these indicators and on robust consumer confidence,” the BSP said. The Philippine Statistics Authority is expected to release the growth numbers of the Philippines later this week. Going into 2017, meanwhile, economists see a more tamed growth trajectory for the Philippines. Cuyegkeng forecasts a full-year growth of 6.2 percent for the Philippines in 2017. This is below the government’s target band of 6.5 percent to 7.5 percent for the year. “We expect agriculture to recover with a 3.3-percent growth in 2017 and 3.7-percent growth in the first quarter—although floods in the south would moderate growth. Domestic demand would remain strong,” Cuyegkeng said. “Going into 2017, we have expected the domestic economy to cool off. GDP growth has been running at 7-percent pace since the election-related spending first provided a boost,” Cahyadi added.

Senate probers dig deeper into ₧50-M casino bribery By Butch Fernandez

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mused Senate probers have yet to firm up findings after uncovering an alleged P50-million bribery case involving Bureau of Immigration and Deportation (BID) officers and casino operator Jack Lam. “It turned out to be a comedy of errors,” said Sen. Richard G. Gordon, chairman of the Senate Blue Ribbon Committee, after Monday’s inquiry into the BID bribery scandal. “The jury is not out yet,” Gordon told the BusinessMirror, indicating that further hearings will be held to question other key witnesses who could shed light on the case. For instance, Gordon said Justice Secretary Vitaliano N. Aguirre III, National Police chief Ronald M. dela Rosa, retired Police Senior Supt. Wenceslao Sombrero and BID officials, including retired Gen. Charles Calima Jr., former executive assistant of Commissioner Jaime H. Morente, will be summoned anew when hearings resume next week.

“Calima has some explaining to do,” Gordon said, after the BID officials were implicated in what probers suspect to be an attempt to cover up an alleged P50million bribery involving the release of illegal Chinese dealers hired to work at Lam’s casinos in Northern Luzon. Gordon noted testimonies at the hearing where BID officials claimed the P50million bribe money was only stored for safekeeping. “Tinatago raw, pero tapos inuwi ang pera,” the senator said, adding, “there was an indication of intent to pocket the money.” “There is an element of bribery case,” he said. “There is an intent to pocket the money, that is obvious...at the very least they can be held liable for antigraft.” According to Gordon, his committee is eyeing remedial legislation that would “define protocular duties” of BID officers and address gaps in the law that are seen to be “too lax on foreign labor” in local casino operations. At the same time, Sen. Sherwin T. Continued on A2