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Thursday, January 25, 2018 Vol. 13 No. 106

@akosistellaBM Special to the BusinessMirror

HE Department of Environment and Natural Resources (DENR) will be validating a list of resorts that are not connected to the existing sewer system on Boracay Island, to check where exactly they are dumping their sewage.

Downsizing the conditional-cash transfer

1,123

Rene E. Ofreneo

The number of sewer connections on Boracay island, 899 of them belonging to commercial establishments

laborem exercens

In a hearing on Wednesday by the House Committee on Tourism, chaired by Rep. Lucy Torres-Gomez of the Fourth District of Leyte, Environment Secretary Roy A. Cimatu warned those establishContinued on A2

he conditional-cash transfer (CCT) is the nation’s “centerpiece” antipoverty program. It gives an indigent mother with three school-age children P1,400 a month (P300 per child and P500 for the mother). Proponents of CCT assert the program hits instantly two “human resource development” birds: the education of poor children and the health of poor mothers. Continued on A10

Federalism shift won’t derail infra plan–Neda

FUNDING NOT A PROBLEM IN DUTERTE’S $18-B INFRA PUSH, SKILLED LABOR IS

resident Duterte’s plan to supercharge growth with a $180-billion infrastructure program is running into a roadblock: a lot of the people he needs to build all the roads, bridges, airports and railways are working abroad. For decades, the Philippines has relied on money sent home from an army of nannies, maids, mariners, nurses and construction workers who can sometimes earn salaries of more than four times higher abroad. With Duterte raising billions of dollars in debt and taxes to upgrade the nation’s creaky transport network— ranked worse than that of Sri Lanka and Vietnam by the World Economic Forum—the loss of skilled personnel is causing a labor crunch that is pushing up wages and home prices. “The labor shortage is an issue that’s hounding the construction industry,’’ said Jan Paul Custodio, senior director

at property consultant Santos Knight Frank in Manila. “There’s definitely a need for further skills training, now, more than ever. There needs to be a boost to any repatriation program.’’ The economy expanded 6.7 percent last year and the World Bank has said higher investment is critical to sustaining that pace of expansion. Under a policy named “Build, Build, Build,” Duterte plans to boost infrastructure spending to 7.3 percent of GDP by 2022, from 6.3 percent this year.

By Cai U. Ordinario @cuo_bm

& Butch Fernandez

NEW CHIPS Workers in white lab coats work inside a microchip-manufacturing factory in Laguna. Anwita Basu of The Economist Intelligence Unit said in a news briefing on Wednesday the Philippines should put its chips on manufacturing for the economy’s future growth, as experts see a potential plateau in the outsourcing industry, the country’s sunrise industry in the late-1990s. NONIE REYES

See “Funding,” A12

Manila keeps focus on RCEP despite TPP breakthrough By Elijah Felice E. Rosales

@alyasjah

anila will continue to focus its efforts to concluding the Regional Comprehensive Economic Partnership (RCEP) despite the breakthrough made by the 11 remaining negotiating countries in the TransPacific Partnership (TPP).

PESO exchange rates n US 51.0080

@butchfBM

Airport terminal

First up is a new terminal at Clark International Airport—the former US airbase north of Manila—that would triple its capacity to 12 million passengers a year. Other projects due to start this year include Manila’s first subway and a 102-kilometer (63-mile) railway in Mindanao, an island in the south of

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Big Boracay resorts face closure over sewage mess By Ma. Stella F. Arnaldo

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“Current focus is on [the] RCEP,” Trade Secretary Ramon M. Lopez told the BusinessMirror. Still, Lopez, who is now in India for President Duterte’s state visit there, said the Philippines will assess anew the benefits of joining the TPP. “[We are now] revisiting the feasibility, [even] without the US there.” The remaining 11 countries

involved in the TPP were able to revive the agreement, which hung in the balance after the US, as ordered by President Donald J. Trump, withdrew its membership last year. The final deal is expected to be signed on March 8 in Chile. Lopez said the country has “several interests” in the TPP, but did not elaborate what these interests are. Continued on A2

he National Economic and Development Authority (Neda) remains confident that the shift to a federal form of government will not derail the Duterte administration’s massive infrastructure program. Socioeconomic Planning Secretary Ernesto M. Pernia told reporters on Wednesday that shifting to federalism may take two or three years more. By that time, many infrastructure projects would have already been completed. “If at all, federalism will not be implemented in the next two, three years, toward the end of the administration. So I don’t think that would be a stumbling block [to ‘Build, Build, Build’]. It will take time to implement federalism; lots of preparations are needed,” Pernia said. As of June 2017, the Neda estimated that 53 of its 75 flagship projects would cost P1.58 trillion. The other 22 projects still do not have cost estimates. This is the reason the government put together a list of 70 Continued on A12

n japan 0.4624 n UK 71.4010 n HK 6.5237 n CHINA 7.9595 n singapore 38.7334 n australia 40.7962 n EU 62.7194 n SAUDI arabia 13.6018

Source: BSP (24 January 2018 )

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A2 Thursday, January 25, 2018

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Big Boracay resorts face closure over sewage mess Continued from A1

ments on the list that if they have been found to have violated any environmental laws, “I’m sorry, but you have to go.” Among those on the list, a copy of which was obtained by the BusinessMirror, are major hotels and resorts, such as ShangriLa Boracay Resort and Spa, Movenpick Resort and Spa, Crown Regency Resort, Asya Premier Suites, Nami Private Villas, Alta Vista de Boracay and the controversial Boracay West Cove Resort, to name a few. Boracay West Cove, earlier rumored to be owned by Sen. Manny D. Pacquiao, had been outed by a broadcaster a few years back, for building on corals.

Labor Code. . . Continued from A12

The bill also simplifies and clarifies the classification of employees by mandating regular employment, as the general rule and prohibiting fixed-term employment except in cases of overseas Filipino workers (OFWs), workers on probation, relievers who are temporary replacements of absent regular employees whose engagements shall not exceed six months, project employees and seasonal employees. It provides that the rights and benefits of relievers, project and seasonal employees are on a par with regular employees consistent with the principle that all workers must be treated alike both as to rights enjoyed and obligations assumed. It also provides that a probationary employee who has rendered at least one month of service is entitled to a termination pay equivalent to one-half month salary. In the event the contractor fails to pay the wages, allowances and benefits of his employees based on the Labor Code and other laws, the employer shall be jointly and severally liable with the contractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed under him. The labor secretary, upon consultation with the National Tripartite Industrial Peace Council, shall by appropriate regulations, restrict or prohibit the contracting out of labor to protect the rights of workers established under the Labor Code. He may

The list was drawn up by Boracay Island Water Corp. (BIWC), a joint venture of the Ayala Corp. and the Tourism Infrastructure and Enterprise Zone Authority (Tieza), which provides water and sewerage services on the island. It was submitted by the Department of Tourism to Gomez, who conducted the hearing to find out the problems plaguing the island, world famous for its long, white beach. In an interview, BIWC Business Operations Head Bianca Eunicia Aldaba explained that many of those on the list, which include resorts, restaurants and commercial establishments, “are not connected to the sewer line, because they are located in an area still not ser-

make appropriate distinctions between labor-only contracting which is hereby prohibited, and legitimate job contracting, which is permitted in accordance with the Labor Code. Also, Article 294 of the Labor Code, titled “Security of Tenure,” is amended so that, in cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized. An illegally dismissed employee is entitled to immediate reinstatement even pending appeal and without loss of seniority rights and benefits, full back wages and accrued benefits provided by law, company policy of collective bargaining agreement. Article 295, titled “Regular Employment,” is amended so that a regular employee is one who has been hired for an indefinite period. No employment with a fixed term or definite period shall be allowed, except in cases of OFWs, workers on probation, relievers who are temporary replacements or absent regular employees whose engagements shall not exceed six months, project employees and seasonal workers. Relievers, project and seasonal employees shall enjoy the rights of regular employees for the duration of the engagement, project or season, respectively. All other forms of discontinuous employment are prohibited. Clauses in employment contracts providing for a fixed term or definite period of employment are void. Workers under such arrangements are deemed regular employees reckoned from the first

viced” by the company. Some of these, she noted, may have their own septic tanks, or sewage-treatment plants. BIWC also provides some of these establishments with desludging services. Aldaba, however, underscored the need for the DENR to check where exactly these establishments are dumping their sewage, since “they have discharge permits from the DENR.” Also, the DENR needs to check if the establishment treats its sewage water before this is discharged into the sea. She said that, under existing environmental laws, the kind of water that can only be discharged into the waters surrounding Boracay “should be Class SB. This means the water has been treated properly; it is similar to the water from the

day of employment. Moreover, Article 296, titled “Probationary Employment,” is amended so that probationary employment shall not exceed six months from the date the employee started working. It may be terminated for a just cause when he fails to qualify as a regular employee. The bill inserted a new Article 303-A, titled “Administrative Penalties,” which cites the penalties, the Department of Labor and Employment shall impose on erring principal employers, job contractors, manpower agencies, workers’ cooperatives and any other similar entities. At present, there is no imposable penalty for engaging in labor-only contracting, except the simple declaration of ostensible employees of the contractor as employees of the principal employer.

Contribution to GDP

A labor group said on Wednesday that sustaining the country’s economic growth in the coming months may depend on how well employers will treat their workers. In a text message, Associated Labor Union-Trade Union Congress of the Philippine (ALUTUCP) Spokesman Alan Tanjusay said workers were still able to help grow GDP by 6.7 percent in 2017 despite being faced with unfavorable working conditions. On Tuesday the National Economic Development Authority said the GDP expansion last year was “a promising development,” since it came close to the 6.9-percent GDP expansion in 2016, which was an election year. During election years, GDP

swimming pool. When discharged, it will blend in the ocean,” she stressed, but won’t harm the environment. In separate interviews, government sources also disclosed that the local government of Malay and the DENR found 11 establishments illegally discharging their sewage directly into the rainwater-drainage facility that was constructed by the Tieza. “These 11 violators have been given the opportunity to correct their mistakes or face closure by the DENR,” a source noted. A study funded by the Japan International Cooperation Agency found that, for instance, untreated sewage water was being discharged directly into the waters in Barangay Bulabog, often used by visitors for

growth usually soars due to increased consumption spending before significantly declining the following year. “If workers were able to produce this GDP despite their worsening [work] conditions, how much GDP could they have produced if the conditions were conducive to workers and their families.” Tanjusay said. Citing data from the Philippine Statistic Authority, the Philippine Institute for Development Studies (PIDS) noted that labor productivity—GDP per employed person—of workers has been improving in the last 20 years. As of last year, the PIDS said the industrial sector has the highest labor productivity, followed by the services and the agriculture sectors. Despite their contributions to the economy, ALU-TUCP National President Michael Mendoza said workers still do not get the fair treatment they deserve from the government and the private sector. “Wages remain so low that it cannot sustain a family to a decent living. Regular jobs that are supposed to aid workers to a life above poverty are replaced by rampant practice of short-term contractualization work arrangement,” Mendoza said. “Government’s social safety nets that are supposed to keep them from deeper poverty are inadequate. Workers still lack access to quality health, education and other social services necessary to remain productive and safe,” he added. ALU-TUCP called on employers to address these concerns to further boost labor productivity in the Philippines.

wind and water sports. Meanwhile, BIWC’s Aldaba pointed out that, as of end-2017, there were 1,123 total sewer connections, of which 899 are commercial establishments (resorts, restaurants and small businesses like sari-sari stores) and 224 are residences. She added the company’s expansion project for the island sewage system will begin this year, and finally cover Barangay Yapak. “By 2022 the service will cover the entire island of Boracay.” She said this includes the sewage-treatment plant with 5 million liters per day treatment capacity. Two of three barangays —Bulabog and Manoc-Manoc—on the island had already benefitted from the expansion project.

Federalism shift won’t derail infra plan–Neda Continued from A12

He said funding for any plan to hold a referendum to ratify proposed amendments in the 1987 Constitution must be included in the General Appropriations Act, stressing that this “must also be approved by the Senate.” “I have no idea if the DBM [Department of Budget and Management] will include that in their 2019 budget proposal,” the senator said, adding: “We will see the administration’s intention regarding this matter based on the budget they will submit for 2019.” In a statement, Escudero took issue with the House of Representatives’ position that congressmen could proceed to convene Congress into a constituent assembly to tinker with the Charter without the Senate. He said congressmen themselves “contravened” the basis for such move, citing their adoption of House Concurrent Resolution 9 seeking to convene Congress into a constituent assembly to amend the Constitution. “The title in itself, ‘concurrent resolution,’ is already an admission that any proposal or move to amend the Constitution necessitates the separate votes of both houses of Congress,” the senator said. Escudero explained that, “before we even get to the question of voting jointly or separately, in the process of passing the concurrent resolution to convene [the two chambers of Congress] as a constituent assembly, it is already clear in the title concurrent resolution that this would be questionable if the Charter changes are approved without the Senate.”

SC decision

The leadership of the House of Representatives on Wednesday assured the public that it will respect whatever decision the Supreme Court (SC) will make on its move to propose amendments to the 1987

Constitution without the Senate’s participation. Speaker Pantaleon D. Alvarez, in an interview, said he would only listen to the High Court on the legality of their decision to proceed amending the Charter sans its counterpart in the upper house. “That’s why we have the Judiciary. We will abide by whatever the SC decides. For instance, if there is some disagreement, they [SC justices] will be the ones [who will give the ruling],” Alvarez said. Amid the looming deadlock between the House of Representatives and the Senate in terms of the manner of voting to amend the 1987 Constitution, Alvarez last Monday said the lower chamber has started amending the Charter. He added the lower chamber could do Charter change alone, even without the Senate. Senator said voting should be done separately because the greater number of the lower chamber would practically drown out the Senate position. According to Alvarez, the 1987 Constitution was clear on voting jointly to propose amendments or revisions to the Charter. According to Alvarez, as long as the required three-fourths vote of Congress is met—based on the combined number of the Senate and the House—proposed Charter amendments may be considered and adopted even without the participation of the upper chamber. “Any amendment to or revision to this Constitution may be proposed by Congress upon a vote of three-fourths of all its members, or 237 lawmakers,” he said. Section 1, Article VII of the Constitution provides that “any amendment to, or revision of, this Constitution may be proposed by: (1) The Congress, upon a vote of three-fourths of all its Members.” He also admitted that disagreement over this procedure may be brought before the SC for resolution. With Jovee Marie N. dela Cruz

Manila keeps focus on RCEP despite TPP breakthrough Continued from A1

The TPP is a free-trade agreement designed to lower tariff and nontariff barriers to trade involving Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Canadian Prime Minister Justin Trudeau on Tuesday said the 11 TPP participating countries were able to thresh out their outstanding issues, resulting in the conclusion of talks on what is now known as the Comprehensive and Progressive Agreement on TPP. “The agreement reached in Tokyo today is the right deal,” he said at the World Economic Forum in Davos, Switzerland. Canada returned its backing to the TPP after almost pulling off a

Trump last November in a bid to protect its cultural industries, such as movies, TV and music. Australia and Japan led efforts to regain Canada’s full trust in the TPP, and were able to do so after the agreement included a revised arrangement on cars with Tokyo and the lifting of intellectualproperty provisions that had been Ottawa’s major concern. The 16 participating countries in the China-led RCEP, on the other hand, will try to conclude the agreement this year under Singapore’s chairmanship of the Asean, Trade Undersecretary Ceferino S. Rodolfo Jr. said on January 15. The RCEP economies account for almost half of the world’s population and contribute about 30 percent of global GDP and more than a quarter of world exports.

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Editor: Vittorio V. Vitug • Thursday, January 25, 2018 A3

Recto to Duterte: Ensure recovery of P2-B IS loot after Marawi siege

By Butch Fernandez

@butchfBM

enate President Pro Tempore Ralph G. Recto on Wednesday aired concerns that the Duterte administration need to exert extra efforts to track down the reported P2-billion loot taken by Islamic State (IS)-linked terrorists in war-torn Marawi City.

“The government must exert all efforts in seeing to it that the fruit of the loot will not harm a single Filipino,” Recto said, voicing fears the stolen funds could be used to acquire “bombs, bullets and land mines.” T he senator sug gested t hat av a i l a ble i nte l l i ge nce f u nd s appropr i ated by Cong ress in t h e n at i o n a l b u d g e t o f t h e A r med Forces and the National Pol ice, “ in t he bi l l ions of pe sos, shou ld be used to fol low t he money.”

Recto added that if part of t he P2-bi l l ion loot is traced in the banking system, the protocols under the A nti-Money Laundering Act “should kick in to prevent it from being laundere d a nd re c i rc u l ate d a s a clean one.” “We can only roll back terror if we stop those bankrolling it,” Recto said, noting that “ like any evil enter prise, money is the lifeblood of those who commit mayhem.” He added: “We stop terror by

RECTO: “The government must exert all efforts in seeing to it that the fruit of the loot will not harm a single Filipino.”

stopping its financing. In the case of [the] P2-billion loot from Marawi, to

prevent such huge sum from turning into their deadly BBL: bombs, bullets, land mines.” Recto added that in order to “know the scale of the problem we are confronting, we must be able to determine the amount looted, through validated intelligence.” He said other possible storage or “recycling places like pawnshops, of stolen property, like gold and jewelry, must be put on notice by regulators to be on the lookout for any suspicious transaction.”

House bill on civil effects of church annulment decrees hurdle 2nd reading By Jovee Marie N. dela Cruz @joveemarie

he civil effects of church annulment or dissolution of certain marriages by different religious sectors in the country may soon be recognized. Voting through viva voce, lawmakers on Tuesday night approved on second reading House Bill 6779, or “An Act Recognizing the Civil Effects of Church Annulment Decrees.” Currently, the state recognizes divorce under the Code of Muslim Personal Laws of the Philippines, which is based on the Sharia, or Islamic law. Under the bill, whenever a marriage, duly and legally solemnized by a priest, minister, rabbi or presiding elder of

any church or religious sector in the Philippines, is subsequently annulled or dissolved in a final judgment or decree in accordance with the canons or precepts of the church or religious sector, the said annulment or dissolution shall have the same effect as a decree of annulment or dissolution issued by a court. The measure also provides the status of children of marriages subject of the church annulment decree shall be determined in accordance with the provisions of Executive Order (EO) 209, otherwise known as the Family Code of the Philippines. The bill said the ground for church annulment decree is not similar to any of the grounds provided in the Family Code of the Philippines, their common

children born or conceived before the issuance of the church annulment shall be considered legitimate. Also, the measure said the liquidation, partition and distribution of the properties of the spouses, the custody and support of the common children and the delivery of their presumptive legitimates, shall be agreed upon by the spouses, and embodied in a public document. In case no agreement is met, the provisions of the Family Code of the Philippines shall be in force. Under the bill, either of the former spouses may marry again after complying with the requirements of the preceding paragraph and Article 52 of EO 209. Otherwise, the subsequent marriage

shall be null and void. In securing a marriage license, the spouse involved must present a certified true copy of the said final judgment or decree of declaration of nullity, annulment or dissolution of marriage registered with the civil registry, the bill provides. Rep. Yedda Marie K. Romualdez of the First District of Leyte, one of the authors of the bill, said once the measure becomes a law, a declaration of nullity decreed by the church will hold as much weight and have the same effect as a civil annulment. “This removes the burden of undergoing the civil annulment process,” Romualdez said. “The good of our children and the good of the society hang in the balance with every decision

to declare a marriage null and void. In this context, recognizing the civil effects of church annulment decrees will address the need to ensure that those who find themselves in such a difficult marital situation will have the benefit of a more efficient and affordable procedure that can help ease their conscience and may permit them to move on in freedom from a truly irreparable relationship,” Romualdez added. Deputy Speaker Gwen F. Garcia of Cebu, a coauthor of the measure, said now is the right time to give civil recognition of church-decreed annulment in all religions. “The breakdown of any marriage—whether Christian, Muslim or of whatever religion—has

very real effects in the lives of the parties thereto, the children who resulted therefrom and the society of which the family is a basic unit. There is no reason to distinguish among religions, churches and sects because—as far as marriage and the dissolution thereof are concerned—no such substantial distinction exists,” Garcia said. “It is time that the dissolution of marriages of other religions, churches and sectors— as, for instance, the Catholic major it y in the Philippines, from whose canon law, ironically, we borrowed the concept of psychological incapacity as a basis for declaration of nullity of marriage under the Family Code—be given equal civil effect,” she added.

Economy

A4 Thursday, January 25, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

Manila still lags behind Asean-5 peers in inclusive econ growth rate

By Cai U. Ordinario

@cuo_bm

espite recent economic success, the Philippines continued to lag behind its Association of Southeast Asian Nations-5 (Asean-5) neighbors in terms of achieving inclusive economic growth, according to the World Economic Forum (WEF).

In its Inclusive Growth and Development Report 2018, WEF said the Philippines ranked 30th among 74 developing economies. The country had a score of 3.83 for 2018 and an average of 2.4 in the past five years out of a perfect score of 7. The country’s ranking this year was an improvement from 2017’s 40th out of 79 economies. “ Turkey [16], Mex ico [24], Indonesia [36] and the Philippines [38] are among economies which show potential on Intergenerational Equity and Sustainability, but lack of progress on inclusion indicators, such as income and wealth inequality,” the report stated. Socioeconomic Planning Secretary Ernesto M. Pernia said that while the country’s GDP has been above 6 percent, especially in recent years, determining how GDP has been distributed is another matter altogether. A high GDP, Pernia added, is good, but countries need efficient and fair taxation, as well as sufficient social protection, which can redistribute income and wealth to all. This will result in greater poverty reduction. “It would be good if you have a pie to share among more people so a bigger pie would be generated by GDP. But the cutting up of the pie into slices is another matter,” Pernia said.

40th The PHL’s ranking in WEF’s Inclusive Growth and Development Report 2018, with a score of 3.83 and an average of 2.4 in the past five years out of a perfect score of 7. The country’s ranking this year was an improvement from 2017’s 40th out of 79 economies.

“For poverty reduction, there are many more things that you need to do like social protection, you have to generate employment, especially among the poor, so that they will improve their income earnings,” he added. The WEF explained that the Inclusive Development Index is an annual assessment that measures how 103 countries perform on 11 dimensions of economic progress in addition to GDP. It has three pillars: growth and development; inclusion; and intergenerational equity—sustainable stewardship of natural and financial resources.

Based on the rankings, the other Asean-5 countries, which are considered emerging economies, outranked the Philippines. Malaysia ranked 13th out of 74 followed by Thailand, 17th; Vietnam, 33rd; and Indonesia, 36th. Singapore, however, was still not included in this year’s report due to incomplete data. In terms of indicators, the Philippines ranked in the bottom 20 percent of the index in net-income gross national income (GNI) and wealth Gini, or inequality, and bottom 40 percent in healthy-life expectancy, poverty incidence, median income and dependency ratio. Net-income GNI measures the extent to which the net distribution of income (that is, post-tax, post-transfers), among individuals or households within an economy deviates from a perfectly equal distribution while wealth Gini measures differences in income distribution. Healthy-life expectancy, meanwhile, is the average number of years that a person can expect to live in “full health” by taking into account years lived in less than full health due to disease and/or injury, while poverty rate is the percentage of the population living on less than $3.20 a day at 2011 international prices. The WEF also explained that the median income is the median of daily per capita income/consumption expenditure in 2011 purchasing power parity dollar, while the dependency ratio is the ratio of dependents, people younger than 15 or older than 64 years of age, to the working-age population, those aged 15 to 64 years old. Meanwhile, the Philippines was ranked in the top 20 among emerging economies in terms of adjusted net savings, while in employment and public debt, the country was ranked in the top 40

percent of the index. The WEF said adjusted net savings are equal to net national savings, plus expenditure on education and minus depletion of energy, minerals and forests, and damage by particulate emissions. Carbon damage, however, has been excluded from the calculation. Employment, meanwhile, referred to the employment-topopulation ratio, which is the proportion of a country’s population that is employed, while public debt refers to gross debt, which includes all liabilities that require payment of interest and/ or principal by the debtor to the creditor at a date or several dates in the future. The most inclusive advanced economy in the world in 2018 is Norway. The Nordic nation ranks second overall for intergenerational equity and third for the two other pillars of the index: growth and development, and inclusion. Small European economies also dominated the top of the index, with Australia (9), which was the only non-European economy in the top 10. Of the Group-of-7 economies, Germany (12) ranks the highest followed by Canada (17), France (18), the United Kingdom (21), the United States (23), Japan (24); and Italy (27). Six emerging European economies are in the top 10 spots in the emerging economies’ ranking: Lithuania (1), Hungary (2), Latvia (4), Poland (5), Croatia (7) and Romania (10). Latin America also performed well, with three countries featured in the top 10: Panama (6), Uruguay (8) and Chile (9). “These countries perform well on grow th and development, benefiting from EU membership, as well as on inclusion indicators, as median living standards rose and wealth inequality declined significantly,” the WEF said.

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Power firm urges Palace to resolve E.R.C. impasse By Lenie Lectura

@llectura

he Aboitiz Power Corp. (A boit i zPower) has ap pealed on Wednesday to the Duterte administration to immediately resolve the impasse plaguing the Energy Regulatory Commission (ERC), saying “a fair and functioning ERC is critical for the energy sector to work.” “We are appealing to the national leadership to resolve the ERC issue as soon as possible so the commission can get back to work and act on many pending issues awaiting their decision,” AboitizPower President Antonio Moraza said. In a text message, Moraza said the power group is appealing for the issuance of certificates of compliance (COCs), among others, for projects that will be completed soon. “We will be needing COCs for the projects that will be completed soon, plus PSA [power-supply agreements] for TVI [Therma Visayas Inc.], and as soon as possible for TMI [Therma Marine Inc.].” He stressed that a working regulatory body balances the welfare of the paying consumers, interests of the private investors and the government’s desire for reliable and ample power. But the Department of Energy (DOE) and the Wholesale Electricity Spot Market (WESM) have already agreed to allow power-generation companies with expired COCs, or with pending COC applications with the ERC, to operate and trade in the WESM. This move is meant to address concerns on possible power-outage incidents if the ERC, whose four commissioners were suspended for a year, could not act on pending applications due to lack of quorum. Energy Secretary Alfonso G. Cusi assured that he will not allow any disruption in the country’s power supply as a result of the delay in the processing of applications before the ERC, including COC applications. “The move aims to protect electricity consumers by preventing

disruptions in WESM transactions while the ERC issue is being sorted out,” Cusi said after approving the resolution on the agreement with the board of directors of the Philippine Electricity Market Corp. (PEMC), the operator of the WESM, last Thursday. “The paramount consideration is the overall protection of public interest and the security of the supply of power. This is needed for the Philippines to meet its economic targets. This should take precedence over administrative issuances, especially when an administrative body is unable to act,” Cusi added. The energy chief also directed PEMC and the DOE to work closely with the ERC to ensure the continuing operations of existing plants and to allow power generation from new plants that will be completed. Under the DOE-PEMC resolution, power-generation companies with expired COCs can continue trading upon proof of submission of their application for the renewal of their COC with ERC. “New plants will also be permitted to trade or submit offers to the WESM upon proof of completion of testing and commissioning and other requirements for the issuance of a COC.” Cusi explained, “The COC is a requirement for the registration and continuing participation of generation companies in the WESM. About 26 generation companies with a total of 3,314.60-megawatts [MW] generator capacities have expired or have expiring COCs in 2018.” “Additional new capacities of at least 720 MW are also expected to go on commercial operations within the next few months. If not allowed to participate in the WESM, the available electricity supply in the market will be curtailed, which can result in higher market clearing prices,” he added. “As the summer months draw near, the use of electricity is anticipated to increase. The DOE is monitoring the situation to ensure the sufficiency of supply to meet the rising demand,” Cusi said.

China’s help not needed in PHL Rise resource exploration—group By Jonathan L. Mayuga @jonlmayuga

ontrary to Palace claims, the Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas (Pamalakaya) said the Philippines, despite its limited resources, can explore and exploit the still untapped resources of the Philippine Rise on its own, even without China’s help, with sufficient funding for research and development. As early as 2013, the Philippines, through the Department of Agriculture—Bureau of Fisheries and Aquatic Resources, the Department of Science and Technology and before that, the Department of Energy (DOE), have been conducting exploration in the Philippine Rise, particularly the Benham Bank, the shallowest portion of the 13-million hectare underwater plateau. A traditional fishing ground 250 kilometers off Aurora province, the Philippine Rise had been observed to have 100-percent coral cover. It is also a spawning ground for the commercially viable bluefin tuna. The Philippine Rise is also being eyed for magnesium and other minerals, including natural oil and gas by the DOE. In a news statement, Pamalakaya said by promoting and developing the local marine science industry, the Philippines can exploit the country’s newest territory “on our own even without the help of China.” The group was reacting to Presidential Spokesman Harry L. Roque Jr.’s statement on Tuesday, saying Filipinos do not have the ability or financial means to carry out the research in the Philippine Rise after criticisms mount-

ed over the government’s decision to partner with China to conduct marine research in the territory believed to be rich in natural resources. According to Pamalakaya, which strongly opposed the joint exploration, China has vested interest over the Philippine Rise. It said the joint research is a precursor to Chinese incursion of the country’s territorial waters, similar to what happened in the Panatag Shoal in the West Philippine Sea (South China Sea). Located opposite to the disputed South China Sea, the Philippine Rise has been declared by the United Nations Convention on the Law of the Sea in April 2012 as part of the Philippines’s exclusive economic zone. Through Executive Order 25 signed by President Duterte in May last year, the undersea feature has been renamed from Benham Rise to Philippine Rise. To recall, a joint research between the Philippines and China has been approved by the Department of Foreign Affairs, an agreement which Pamalakaya opposed, saying the joint research blanketed with the Joint Marine Seismic Undertaking is a pretext of China for another occupation activity in Philippine marine territory. The group noted scientist group Agham’s claim that the University of the Philippines College of Fisheries had once acquired three research vessels, namely, the Merchant Vessel (MV) Pompano, MV Albacore and the Research Vessel Sardinella which can be used in the conduct the underwater research in the area. According to Pamalakaya, the MV Pompano, which was acquired in 1962,

has 113 gross tons equipped with tuna long line and oceanographic equipment. The vessel was also equipped with radar and various electronic equipment onboard, such as fish finder, signal buoys and radio direction finder, among others. It had been utilized for training and research in different waters, such as Celebes Sea, Sulu Sea, Visayan Sea, and the waters of Luzon. The MV Albacore, which was acquired in 1972, on the other hand, was used extensively for the training of students in oceanography, fishstock assessment and others in the Visayan Sea, Samar Sea, San Miguel Bay, Ragay Gulf, Ticao Pass and North of Samar Island. While the RV Sardinella, which was acquired in 1981, was adequately equipped for deep-sea trawling, purse seining, and for research in marine sciences and oceanography. “Unfortunately, these research vessels have not been maintained to maximize marine research and development,” the group said. “The government neglect of a scientific development deprives our local marine scientists and oceanographers to conduct research in the Philippine Rise. We don’t actually need China, or any other country in exploring the potentials of our natural resources if the government is sincere in developing and maintaining our research facilities. But apparently, the government chooses to surrender our duty to China which is a tried and tested notorious aggressor and grabber of territory, as experienced in the West Philippine Sea,” Pamalakaya chairman Fernando Hicap, said.

Commuter woes

Passengers jostle to board a ride after some jeepney drivers refused to ply their routes on Wednesday during morning rush hour in protest to the government’s public utility vehicle modernization program along Edsa near Taft Avenue in Pasay City. ALYSA SALEN

Refusal of EU aid leads to termination of ₧2.82B worth of projects, envoy says

evelopment projects amounting to as much as €45.1 million, or some P2.82 billion, by the European Union (EU) were either terminated or are on the brink of being turned down, as the government stands firm with President Duterte’s directive to reject financial aid from the regional bloc. EU Ambassador to the Philippines Franz Jessen said Manila terminated the €6.1-million allocation, or P382million funding, for the Trade-Related and Technical Assistance Project Phase Four (TRTA-4), which was committed to the country last March by the EU. “It was formalized in the sense that we have, for example, in the TRTA, a document that actually have to be signed by the end of the year, [but] has been returned to us

unsigned,” Jessen said in an interview with reporters on Wednesday. The TRTA is a grant given by the EU to developing economies to improve their capability to participate in international trade. The third phase of the TRTA, which ran from 2014 to 2017, focused on improving trade policy, national quality infrastructure, sanitary and physiosanitary conformity and trade facilitation. Jessen said should the country had accepted the financing for TRTA4, it would have ran for a maximum of five years. Aside from the TRTA-4 allocation, Jessen said the government is also poised to reject another €11 million, or P689 million; €10 million, or P627 million; and €18 million, or P1.1 billion—all intend-

ed to give poor households, mostly in Mindanao, access to sustainable and renewable energy. He said some 20,000 families will be affected by the government’s decision to refuse the financial aid. “Overall, I don’t have [the numbers], but I think the World Bank projects about 20,000 families, mainly in Mindanao, [that will be affected],” Jessen said. The funds rejected will all return to Brussels, and will be reallocated to other developing economies hoping to receive funding from the EU. However, the TRTA-4 allocation cannot be used for another project since it came from the EU’s budget from last year, and cannot be carried over into this year. Elijah Felice E. Rosales

Agriculture/Commodities BusinessMirror

www.businessmirror.com.ph

Editor: Jennifer A. Ng • Thursday, January 25, 2018

Congress eyeing to OK bill lifting rice QR by March

ongress is keen on passing a measure mandating the conversion of the quantitative restriction (QR) on rice into tariffs by March, according to the chairman of the Senate Committee on Food and Agriculture.

Sen. Cynthia A. Villar, committee chairman, on Tuesday led a public hearing on the lifting of the rice QR and the proposed establishment of a fund for the exclusive use of rice farmers. “The tariffs that will be collected after the QR is lifted, estimated at P25 billion a year, would be used to enhance the competitiveness of rice farmers,” Villar told reporters in an interview after the public hearing held in Pasay City. She said funds collected from tariffs slapped on rice imports would allow the government to further promote the use of high-yielding seeds and distribute more farm equipment to farmers. Before this could be done, however, Congress needs to amend Republic Act 8178. RA 8178 allowed the government to continue imposing riceimport caps even after the waiver on the special treatment for the staple granted by the World Trade Organization (WTO) has lapsed. The Philippines was supposed to convert rice-import caps into tariffs by July 1, 2017. Manila urged the WTO to give the Philippines more time to do this as RA 8178 has not yet been amended. P reside nt D uter te i s sue d

Executive Order (EO) 23 last July as “a sign of goodwill” to the country’s trading partners. The EO extended the concessions granted by the Philippines in securing the special WTO waiver in 2014. Sen. Ralph G. Recto filed in May 2017 a bill mandating the lifting of the QR on rice and the creation of a rice-competitiveness enhancement fund. Earlier, the House of Representatives had targeted to pass a measure amending RA 8178 by the end of 2017. But discussions on it had been delayed as lawmakers focused on the 2018 national budget and the proposed Tax Reform for Acceleration and Inclusion Act. House Committee on Agriculture and Food Chairman Party-list Rep. Jose T. Panganiban Jr. of Anac-IP said lawmakers will start discussing the measure at the plenary this year. Last October a technical working group created by the House panel approved a substitute bill mandating the lifting of the QR on rice. Under the substitute bill, a copy of which was obtained by the BusinessMirror, the Philippines will impose a 400-percent bound tariff rate on imported rice once the QR on the staple is abolished.

Rebuilding Marawi one dish at a time

ood is memory. That’s why we confailed you but your food has invited others, and a thousider as our comfort food is usually sand more, to taste what we most cherish,” Assad said. the food that we ate when we were Because in many ways, this is what Assad’s zine is growing up. We wanted to savor again the all about. More than a list of Marano recipes, it offers Prime Sarmiento one a glimpse of Maranao food culture to understand happiness and contentment that we felt while eating this comfort food with our prime commodities Marawi beyond the oft-repeated news on war, internally family and old friends. Researchers said we displaced persons and martial-law extension. In fact, it’s are also biologically wired to have a sense of food nostalgia as quite apt that Mga Tutul a Palapa was released by indie publishflavor and aroma are processed by our olfactory bulb, which ing house Gantala Press in a form of a zine. What better way to is linked to the hippocampus and amygdala—the part of the present a topic—Maranao foodways—that is often ignored by brain associated with memory and experiences. the mainstream media but through a counterculture medium? But while food can evoke memories, we also use food to Each of the recipes in the zine is penned in English and Makeep those memories alive and evolving. This is why we have ranao, and this gave me the opportunity to learn a bit about Magenerations of cooks passing down their secret recipes to their ranao language. Some Maranao words like manga sa-og, tibuyas, children. This is why we have cookbooks so we can at least put luya and manok are even similar to my native tongue’s (Tagalog) down these recipes into writing. This is why foodies put a price words for ingredients, onion, ginger and chicken. There’s also a to these memories by buying memoir/cookbooks published glossary of what I call “Maranao kitchen terms” as most of words by celebrity chefs. listed there are ingredients used in Maranao cuisine. And this is also why a University of the Philippines and The list of ingredients for most Maranao dishes included Oxford-educated Maranao economist and chef decided to in this zine are a once exotic and familiar. Exotic because the write his own memoir slash cookbook (or to be more precise, a Maranaos use a lot of ingredients, such as candlenut, turmeric, memoir slash cookzine) so that he can to at least preserve the cassia leaves and lots of coconut milk that are seldom used in memories of a bygone childhood spent in an ancestral house my Tagalog-Manila household. Familiar because I know these that was destroyed by the Marawi siege. ingredients are commonly used in Malay cuisine—something Assad Baunto’s Mga Tutul a Palapa (Palapa Stories) is a zine that I had a chance to enjoy while living in Singapore and Bruthat was launched last December—about two months after Denei Darussalam. fense Secretary Delfin N. Lorenzana declared the five-month war The zine was structured in such a way that allowed me to against the terrorists has ended. The zine contains eight recipes go on a brief sojourn of Marawi through the Maranao cuisine. that Assad learned from his babo (maternal grandmother). The Each recipe doesn’t only have a list of ingredients and cooking title itself is an ode to palapa—a traditional Maranao condiinstructions but also accompanied by Assad’s anecdotes and ment made of chili, onion, ginger and sakurab (a white scallion black and white illustrations by Ica Fernandez. indigenous to Marawi). The first recipe is, of course, for palapa, which is accompanied In his acknowledgement page, Assad wrote a short note by an illustration of its main ingredient—a bundle of sakurab. to his babo, grateful for the culinary lessons while, at the same Because as Assad said, one can’t have Maranao food without time, reassuring her that albeit the war’s devastation, Marawi palapa. For the Maranaos, palapa is not only a condiment; it also will remain in their hearts and minds, serves as base of Maranao cuisine, a rub and even a flavoring “Marawi is probably lost but our food is not. So, I write this agent for some mamis (Marano sweets). Assad even recalled text because you once told me that food offers us a way of how his babo and mamang (mother) prepared a spicier palapa peering deeper into the lives and culture of what has been,” by adding in more bird’s eye chili to the mix, Assad wrote to his babo. In between is a recipe for beef rendang—a braised beef dish He then told her that someday, more people will be interthat’s also served in most Malay communities in Southeast Asia ested to know more about Marawi, and his zine will allow them and which Assad pronounced as the “star of the Maranao culito prepare food based on her recipes. nary repertoire.” The dish is usually prepared during special oc“I am sure they will be delighted. Your senses may have finally casions as it’s quite tedious to make—it has more than a dozen

ingredients and you have to slow-cook the spice marinated beef for about two hours in a mix of water and coconut milk. Given the many processes involved in its cooking, rendang is one dish made for communal cooking. Assad said that this recipe, handed by his bae (grandaunt), was prepared in their kitchen by a group of women—babo in command, bae stirring the pot, mamang pounding the spices and older female relatives toasting other ingredients. Cooking rendang also dissuades you from multitasking. There’s no way I can leave the pot of beef simmering while binge watching on Elementary in iFlix as, according to Assad’s instructions, I have to stir the mixture every 15 minutes. Like a typical meal, the zine ended with a desert—a recipe for tiyatag. Tiyatag is pastry that’s made by most Moro ethnic groups, including the Maranaos, the Yakans and Tausugs. Made of rice flour, brown sugar, water and vegetable oil, Assad said this deep-fried sweet resembles a chicken wire perimeter. Only a skilled cook can make tiyatag as one has to ladle rice-flour batter into the strainer and tap it continuously using a hard stick, so that the batter can drip through the pierced holes of a strainer into the pan of hot oil. Assad said that only his bae mastered the art of cooking tiyatag—a skill that’s only matched by his bae’s mastery of playing the kulintang—a set of Maranao gongs, which I believe is the Marawi’s version of xylophones. After reading Mga Tutul a Palapa, I learned to view Maranao and Marawi through a different set of lens—one that is not only focused on the conflict and the subsequent rehabilitation but on its natural environment, its culinary traditions and feasts and on their day-to-day life. It also reaffirmed my belief on the need to maintain biodiversity—as it won’t only sustain the physical environment but also our diverse food culture. How else can we prepare palapa if Marawi loses its sakurab? How else can we relish biyaring (a spicy shrimp kilawin dish), if there are no more odang (freshwater jumping shrimp) swimming in Marawi’s rivers? But more than that, I concur with what writer/teacher/ community worker Nash Tysmans said in her introduction for the zine: “In compiling these recipes and stories, we express solidarity with the Maranaos whose hunger is ours as well.” By buying a copy, and cooking one of these dishes, we can at least say, that in our hearts, minds and tummies that we are Marawi. Note: I know that the zine is already sold out but you might want to contact Gantala Press (https://www.facebook.com/ gantalapress/) as I heard that they will print out more copies later.

TheBroa

Business

Thursday, January 25, 2018

Thievery in the sky, airports bare new

By Recto Mercene | Photos by Nonie Reyes

HERE’S a specter looming above, and below, our airports: air-travel thefts. Mid-flight or in-flight thefts are two of evil afflictions that struck the air-travel industry worldwide, but it is only now that they are getting attention in the Philippines. This came about following the termination of the services of Miascor Ground Handling Corp. (MGHC). Cargo theft refers to the stealing of the content, or the cargo itself, from the belly or cargo hold of an aircraft. Mid-flight theft, on the other hand, happens inside the plane, committed by fellow passengers or members of the crew. Cargo theft has been widespread across the world for decades. It has remained under the radar locally but gained attention only when the expensive jewelries of the wife of Turkish Foreign Minister Mevlüt Çavuşoğlu were stolen. The theft occurred during the Association of Southeast Asian Nations (Asean) Foreign Ministers’ meeting in Manila last December, according to Manila International Airport Authority General Manager Ed Monreal.

Box in locker

ACCORDING to Monreal, Çavuşoğlu’s wife Hulya discovered the theft of their jewelry when she flew home to Turkey on August 4. Their jewelry box contained an Escada white gold ring, a ring with diamonds, gold ring with pearl ornament, three sets of pearl earrings and a gold bracelet with diamonds. Çavuşoğlu informed the Turkish embassy in Manila about the incident, prompting airport authorities to conduct a probe on the robbery. Monreal said they inspected the lockers of the baggage loaders and found the jewelry box in the possession of one of the suspects. Monreal said they recovered the stolen jewelry from Yves Ronald Baguion, Wilson Mataganas, John Andews Racoma and a certain Alfaro—all baggage loaders of MGHC assigned at the Ninoy Aquino International Airport (Naia) Terminal 1. The suspects admitted stealing the items at the airport when Hulya took her flight back to Turkey. The access pass privilege of the suspects was canceled, MIAA Public Affairs Division Chief Connie Bungag said.

Clark theft

BUT the proverbial straw that broke the camel’s back occurred when six employees of Miascor at the Clark International Airport (CIA) took away the valuable contents of migrant worker Jovenil Dela Cruz of Pandi, Bulacan. Dela Cruz lost about P80,000 worth of personal belongings. He posted his experience on Facebook and social media went ballistic. Dela Cruz’s video of his pieces of luggage shows the torn zipper and the empty wide-open cases. He cited each of the pilfered items, which included valuables and gifts sent through him by fellow workers. “Our luggage bags [were] robbed by airport personnel,” Dela Cruz said in his video caption. Sorry to those who sent stuff but were lost; we also lost a lot of things. We will not trust them again.” As of posting, the video has reached 2 million views, 32,000 likes and reactions and 70,981 shares. CIA President and CEO Alexander Cauguiran said Miascor Aviation Services Inc. (Masi), the ground service provider and

MGHC’s sister firm, has compensated Dela Cruz for all he lost. President Duterte’s reaction to the two incidents was swift. He called Transportation Secretary Arthur P. Tugade and Monreal to an urgent meeting. He told the two executives that he would relieve airport officials “if there will be another pilferage that will happen again.” In response, Monreal canceled Miascor’s contract and the Delgado brothers-owned firm would cease operations in March this year. They were asked to prepare for transition on where to redistribute their many clients and employees. The plight of the company’s 4,000 employees remains uncertain, although Monreal said those who have real expertise would be passed on to other service providers.

Miascor’s side

MIASCOR’S management immediately issued an apology, aside from reaching an amicable settlement with the victim. It added those involved were terminated “and criminal and administrative charges have been filed against them.” The company also appealed to Duterte to reconsider his position on behalf of the 4,000 regular employees and their families. “It is unfortunate that the actions of the six erring employees of Clark International Airport have negatively impacted the company,” the company said. “The recent incident does not define what Miascor stands for and how it operates. Miascor has been in operation since 1974 and has presence in several key airports in the country, including Naia, providing aviation services.” The company added it has been a major contributor to the growth of the country’s aviation industry “and the company shall do everything it can to remedy the situation.” Miascor, with about 16 airline companies as clients, is second only to Philippine Airport Ground Support Solutions Inc. in ranking of ground-handling volume, with almost an equal number of air carriers. The other ground-handling companies are under the Dnata, Skylogistics and Macro Asia brands.

Handling services

MONREAL said all these groundhandling firms have an estimated number of employees not exceeding 10,000. Among Miascor’s many clients are Cebu Pacific, handling frontline services such as ticketing, inflight service, lavatory, cargo and many others, according to spokesman Charo Lagamon-Logarta. The other is Philippine Airlines (PAL). “Miascor handles ‘below-thewings’ services, such as towing, push back and cargo,” PAL spokesman Cielo Villaluna said. As this develops, it was gathered that all the local and foreign airlines being served by Miascor are reportedly requesting the MIAA, through the Airline Operators Council (AOC), to extend the transition from nine months to three months. It was also gathered from airline sources that Miascor is allegedly selling its equipment to other interested service providers at the Naia.

aderLook

sMirror

www.businessmirror.com.ph | Thursday, January 25, 2018

w challenges for authorities, businesses

Tips to avoid being a victim of in-flight theft

The other carriers served by Miascor include Malaysia Airlines, Asiana Airlines, Air Hong Kong, Qantas Airways, Jeju Air, Jetstar Asia and Jetstar Japan and Cebu Pacific. Cebu Pacific, on the other hand, has 120 flights a day that include the departure and arrival. Lagamon-Logarta said Cebu Pacific is cooperating with the MIAA and Miascor to ensure the smooth transition of airport ground services following the non-renewal of the lease and concession agreement of the beleaguered company. She did not deny reports that Cebu Pacific is planning to set up its own ground-handling operations in the wake of the Miascor debacle. “The big bosses are having a meeting and I understand that lots of ideas are being thrown,” Lagamon-Logarta. “Management is asking lots of questions.” Monreal said he tapped the services of Col. Allen Capuyan, assistant general manager for security and emergency services, to monitor and catch those pilfering the luggage of passengers. He said President Duterte wanted to stop the pilferage in all airports in the country, once and for all.

Global phenomenon

MONREAL said cargo theft is a worldwide phenomenon, happening not only in third-world countries, but even in New York, Tokyo, London and practically every major

airport in the world. Asked whether the pilferages are the work of syndicates or a lone wolf, Monreal, a former station manager of Cathay Pacific, said his long experience as airline executive had shown “that this kind of illegal activities would not be accomplished without the cooperation of several individuals.” “Many of the pilferages occur inside the cargo bay near the tailend of the plane, where many of the cargoes are not ‘containerized,’” he said, adding that cargo loaders simply stab the zipper in the middle with a hard pointed object like a ballpen until the bag gives way to reveal the contents. “To close the bag, you push the zipper toward the start then run it backward and close it,” Monreal said. He added that many cases of pilferage occur in single-aisle airplanes, which are smaller and whose cargo are “loose,” meaning they are not inside containers. On the other hand, wide-body or multiple-aisle airplanes have their cargoes loaded in aluminum containers and, therefore, difficult to access by thieves, he added. “The stolen items are either hidden in their rubber boots, given to other employees to be hidden, while the airline-employed security guards simply look the other way,” Monreal explains. He added that hard-shelled suitcases are advisable because they do not rely on zippers but are provided with a lock, either a combination or a key. “Suitcases that

n Be watchful. While it’s still the safest way to travel with your personal effects, bringing your carry-on bag aboard the flight still leaves you open for theft. n Add a label. Thieves could easily swap your plain black bag for their own. Make sure it’s identifiable as yours. n Line of sight. If you store your bag in the overhead area, make sure you are able to see the bag from your seat. n Bag under the seat. This doesn’t mean putting the bag under your own seat where you can’t see it. You should be placing it under the seat in front of you. n Place a lock on the bag. If you were checking your bag, you’d never let it go through without a lock on it. n Keep valuables in the bag. When you lock your bag, don’t leave any valuables in other areas like your coat pockets. n Warning sign. Place your bag in the upper bin with it facing down to ensure that thieves can’t get easy access to the zipper. n Motion alarm. On a long flight, you might want to take a nap. If you are trying to watch your bag, this will make a nap impossible. You can purchase a small alarm for your bag that will beep if someone tries to move your bag. A long flight is when pickpockets are making their move on your bag. An alarm could be the protection you need. n Leave valuables at home. You might not need all those electronics on your trip. Compiled by Recto Mercene

are fully wrapped in plastic are also difficult to open.” “‘Opportunity makes a thief,’ the hoary saying goes, and that makes cargo theft as old as the democratization of the air-travel industry,” said Onie Nakpil, former chief of security of Gulf Air and once chairman of the Airline Operators Council. He now sits as one of the members of the MIAA board of directors.

Common cases

NAKPIL told the BusinessMirror suspending Miascor won’t stop the pilferages. Neither would dismissing the employees stop thievery, he added. Nakpil said all airlines have their cargo and luggage insured in anticipation of losses. “The air carriers seldom bother with the pilferages as all of them are simply too busy to attend to the provision of services, which include not only baggage handling, but aircraft maintenance, providing fuel, servicing the plane, towing, cleaning the interiors and lavatories, providing food and several related activities,” Nakpil added. “Most of these are under time pressure.”

According to Monreal, the Naia recorded 26 cases of baggage pilferage in 2016. “In 2017 this was down to seven cases only,” he said. Nakpil added that air carriers have their own private security guards but since pilferage continues, he assumes the guards are part of the syndicate. “In that case, the airport’s security should shift their attention to the threat of terrorism and now focus their attention to the thievery coming out of the various airport gates of the Naia.”

OFWs flow

IN 1975 President Ferdinand Marcos implemented the so-called Development Diplomacy. This period saw the influx of Filipinos deployed abroad—mainly to the Middle East. That time was also the start of the flood of overseas Filipino workers (OFWs). These workers started sending remittances to their loved ones, not through the banks but through fellow workers. Many of the money, inside envelopes and carried by returning OFWs in their suitcases, ended up being pilfered at the airport. When

the Naia underwent some innovations decades ago, thousands of these empty envelopes were found stashed in the airport baggage area’s ceiling. Nakpil said the aviation security group should start frisking every individual who goes out of the gate, including checking every vehicle and occupant that has made contact with pieces of luggage and cargo in the cargo-handling areas. Monreal, in turn, prohibited the wearing of clothing apparel with pockets especially for those who got in contact with luggage, stop them from wearing jewelry because stolen ones like earrings, necklaces or watches are sometimes put on to pretend they belong to them. He directed that all employees related to cargo handling should wear body cameras so that all activities could be recorded. The airport chief also banned cellular phones in the work areas.

Flying Filipinos

LATELY, air travel has become common to most Filipinos, encouraged by low fares from several competing low-cost carriers, coupled with a rising income. A study found that the Philippines is one of the Asia-Pacific countries with the most international travelers two years ago. The study attributed such phenomenon to three factors: A “rising middle class” whose households make at least $20,000 (almost P1 million) or more annually, and therefore can afford to travel abroad; increased connectivity through the Internet and the expected opening of over 300 airports all over the world; and an aging population, which is “changing the travel landscape in a very different way.” “The rising number of Filipinos traveling abroad reflects the growing affluence of the population,” said Kinan Suchaovanich, Visa’s corporate communications director for Southeast Asia. The statistics were also used by Visa,

with the help of Oxford Economics, to create a forecast of the travel and tourism industry for the next 10 years. The report projected a 65-percent increase in international travel, or that some 109 million Asia-Pacific households are expected to go on a trip abroad at least once a year. Not surprisingly, however, the airlines noted an increase in the number of thefts on planes, several of which were reported, although many more are believed to have been abandoned due to the hassle involved, which might cause the aggrieved party to stay behind to report to the police.

Easing worries

WITH all the other worries associated with air travel, the last thing a traveler wants to think about is theft onboard airplanes. The people who steal from travelers’ carryon bags are both airline employees (usually flight attendants) and fellow travelers. Unfortunately, theft from sleeping and unknowing passengers has been going on for years— while not extremely common, it only gets brought to the public’s attention when an arrest is made, so who really knows how often these events occur. Nakpil said items lost through in-flight theft could be recovered if reported on time. “If reported to the crew immediately, they will announce through the PA system on landing at their destination that nobody would go down the plane until the lost item is found,” he explained. “Finders are advised to leave the item on the seat or give it to the crew,” he added. This is something the PA would announce, according to Nakpil. “Otherwise, authorities would come into the plane to search every nook and cranny of the fuselage until the lost item is found.” The best way to avoid being the victim of in-flight theft is to first be aware of the possibility that it could happen, Nakpil added.

Banking&Finance BusinessMirror

A8 Thursday, January 25, 2018 • Editor: Jun B. Vallecera

www.businessmirror.com.ph

Stricter KYM, investment rules imposed on NSSLAs

he Bangko Sentral ng Pilipinas (BSP) has put a cap on the ability of so-called nonstock savings and loan associations, or NSSLAs, to invest where they like, to no more than 10 percent of assets as part of a reform process preventing abuse down the line. Guidelines clearly lay down the mandate that such investments must not only observe the cap but that such must also be “safe, readily marketable, high grade and locally issued.” “The new guidelines form part of the Bangko Sentral’s reform agenda to promote a more responsive regulatory environment for nonbank financial institutions” that in the past tended to overstep the bounds of their investment competence. The BSP is particularly strict on how NSSLAs deploy their excess or unutilized funds that must now be clearly defined and within a particular perimeter. It said the guidelines “clearly define the allowable investments and limit of such investments that the NSSLAs can enter into. The investments must not exceed to 10 percent of total assets unless otherwise approved by the Monetary Board,” which is the policy-making body of the BSP. NSSLAs now have their own know-yourmember (KYM) guidelines along with the mandate for the board of trustees and management to establish and implement effective risk-management systems and risk controls. NSSLAs should now also impose strict

documentary requirements for members to ensure that everyone is eligible. The guidelines “aim to protect the NSSLAs’ members by preventing the use of NSSLAs by unscrupulous persons as a means to profit or to take advantage of their nature and operations.” The identity and eligibility of NSSLA members and the propriety of their investments are of paramount importance, the

BSP said. These strictures bring to mind the travails of the Armed Forces of the Philippines–Retirement and Separation Benefits System, whose deactivation and subsequent liquidation had been ordered in the wake of its inability to provide for the pension benefits of its members. Management has since claimed that while their investment activities allow them to generate returns to grow the fund by 1.5 percent a year, it was mandated to give back what it took from members interest equal to 6 percent each year. This “fundamental flaw,” management had said, eventually forced the decision to deactivate and refund what contributions had been given by its members. The fund receives contributions of some P110 million a month and gives out pension benefits in excess of P200 million on retiring uniformed personnel numbering more or less 3,000.

Case clippings

By Justice S J Ranada Jr.

DANGEROUS DRUGS–unbroken chain of custody The prosecution must be able to account for each link in the chain of custody over the dangerous drug, from the moment of seizure up to the time of presentation in court as evidence of the corpus delicti. In other words, it must be established with unwavering exactitude that the dangerous drug presented in court as evidence against the accused is the same as that seized from him in the first place. People v. Calvelo GR 223526 06 Dec. 2017 Martires, J

Making 30 ‘sexy’ again: How P&A Grant Thornton is facing the future of auditing

very now and then, a corporate scandal somewhere around the world erupts, and the underbelly of the auditing profession gets exposed again. Regulators react with sanctions and fresh rules until the next fraud and misconduct resurface. As competition across industries reach fever pitch, cross-border trade and regulations grow and technologies rapidly change and reshape businesses, the auditing profession is becoming a less attractive place for the meek and the faint of heart. To last for three decades, with reputation intact and unruffled by the changing tides, is thus cause for much celebration. “We’ve seen the local economy make bold leaps. Our clients echo concerns over new regulations, how automation is taking over many manual processes and how they are adjusting to the millennial work force. This is why we are celebrating our 30th year with the theme, ‘Unlimited.’ We have an unlimited ability to hurdle change, seeing general optimism and confidence in businesses and in the country,” says P&A Grant Thornton Chairman and CEO Maria Victoria C. Españo. For three decades now, Punongbayan & Araullo (P&A Grant Thornton), the Philippine member-firm of Grant Thornton International, has been vying against generationsold industry leaders and yet has managed to keep its solid footing among the country’s Top 5 auditing firms. In 1988, a trying time for the Philippines’s fledgling democracy, the firm was set up by two 50-year-olds, public accountant Benjamin R. Punongbayan and seasoned banker Jose G. Araullo. P&A was a little-known David that became known for its audacity to battle the Goliaths in auditing. “From the very start, we always had a clear vision of what we want the firm to achieve,” says Punongbayan, who still reports to work at 80 years old. When the time came for the founders to hand over the reigns to the younger partners, he says it was not a difficult decision to make. “Our idea, after all, is to see the firm live for a long time. We can only do that if we allow the young ones to grow with us and aspire for a higher position and responsibility,” he adds.

Building and rebuilding

When Españo joined P&A Grant Thornton in 1997, the height of the Asian financial crisis, auditing was having a heyday. Companies were scrambling to restructure debts and clean up their books to survive. She became a partner of P&A Grant Thornton in 1999, and later headed its Tax Advisory and Compliance division. After a decade, she became managing partner and COO, and was named CEO after only two years, eventually succeeding Punongbayan as chairman. In 2003 P&A Grant Thornton announced a

decision to partner with Grant Thornton International, one of the world’s most prestigious accounting firms and one of the largest global accounting networks by combined fee income. The international affiliation brimmed with benefits, including access to a globally accepted audit methodology and membership in an extensive network with member-firms around the world that deliver services independently. However, it also came with birthing pains. Under its former international partner, P&A Grant Thornton derived a significant chunk of its revenue (more than 90 percent) from partner referrals. The new affiliation meant losing those referrals. “We knew we had to strengthen our business-development activities and come up with a solid thought leadership initiative. We needed to get out more and develop our own training programs and marketing collaterals. We had to build the house again after being with that partner from 1998 to 2002,” Españo explains.

Global footing

P&A Grant Thornton rebuilt the house with a clear intent to grow the brand and its organization. Today, the firm has 21 partners and over 900 employees across its nationwide network. While audit remains its biggest revenue draw, it has also expanded its portfolio to high-level advisory services. Outsourcing, wherein businesses hand over services, such as bookkeeping and payroll, to focus on their core activities, also chalks up revenues for P&A Grant Thornton. “Outsourcing used to be a small part of what we do, but it grew alongside our investments in technology. We are expanding and devoting additional office space to it, and having discussions with companies in Australia and Ireland in our bid to win international clients in this service line,” Españo adds. Teeming with growth opportunities, P&A Grant Thornton now ranks among the top 20 firms in terms of size in all services in the Grant Thornton network. In Asia P&A Grant Thornton is viewed as a leader in areas like people development and advisory services, maintaining arrangements with memberfirms in countries, such as Vietnam, Indonesia and Bangladesh. With geographically diverse clients going in and out, P&A Grant Thornton is covering all bases. It has established a Japan Desk to cater to Japanese companies operating in the Philippines and to provide a range of services that include audit and assurance, tax advisory and compliance, advisory services and business process solutions.

Tech disruption

But it’s not just globalization that has been changing the rules of the game for firms like P&A Grant Thornton.

Españo considers technology one of the biggest game changers in recent years. P&A Grant Thornton has made huge investments in automating tedious and manual processes that involved paperwork, inventory keeping and audit reporting. Artificial intelligence (AI) is seen enhancing the identification of accounting fraud and the improvement of audit quality, while machine learning and cognitive computing are anticipated to improve routine tax compliance, reduce costs, speed up turnaround and lead to fewer errors and greater standardization. “Machines’ deep-learning abilities, of course, are still in the early stages. But we are gearing up and making sound investments in automation. It’s not a question of ‘if’ further disruptions will happen, but ‘when,’” says Españo, who was elected in 2015 as a member of the Grant Thornton Board of Governors, which has oversight responsibilities on the strategic development of the network and its member-firms and the implementation of the global strategy.

Changing ecosystem

More than technology, P&A Grant Thornton’s biggest challenge is in aggressively pursuing its business strategy without “overheating” its operations. “The same people championing the strategy—the partners—would also be implementing it. How do you continually engage them and show them the need to move forward, and have them set the goals into motion?” Españo says. This challenge reflects another shift in the industry: where technical personnel are no longer confined to crunching numbers and drafting financial reports, but also adopting a business mind-set, advising on business strategy and contributing to the company’s sustainable growth. With digital automation, the emergence of AI and new paradigms and the dynamics of increasingly global relationships reshaping talent, operations and strategy in the auditing industry, there is no room for complacency, according to Españo. “Disruption is always unsettling, and we cannot afford to ignore it. The services we offer are most affected by its impact, so we look at it as a growth opportunity rather than a necessary evil we all have to contend with,” she adds. For the firm’s founder, Punongbayan, the advent of AI and machines is more a boon to the auditing profession than a bane. “AI will just spin off other types of jobs for us and raise our level of competency, so it’s not a threat.” “Humans will always prevail because the human spirit is unbreakable,” he adds. “The future offers unlimited possibilities for P&A Grant Thornton.”

Funa simplifies car-accident insurance-claims process

simplE traffic-accident investigation report issued by competent authority and made in the absence of a police report should be enough to process damage claims in road accidents, the Insurance Commission (IC) said on Wednesday. Insurance Commissioner Dennis B. Funa himself stressed this point, saying this was meant to speed up the process of claims handling and reduce bottlenecks caused by the road accidents. Funa recently signed a regulation directing insurance companies to recognize traffic-accident investigation reports in processing motor insurance claims arising from accidents in public highways, roads and streets of Metro Manila, Metro Cebu and Metro Davao. Insurers require police reports for the processing of motor insurance claims at present. This was said to be tedious and takes some time as policemen who ma ke t he repor ts of ten come f rom somewhere far. “The recognition of traffic-accident investigation reports prepared by authorized persons other than policemen could ease traffic after accidents, as the waiting period for the response and preparation of the report is lessened. Compared to policemen, the persons authorized to prepare the traffic-accident investigation report are already on the ground and can easily respond to traffic accidents,” Funa said. Under the new regulation, a traffic-accident investigation report is a document prepared by authorized persons, which includes traffic officers, personnel or constables of the Metropolitan Manila Development Authority provided that they are duly

certified by the Land Transportation Office to have completed and passed the necessary course for traffic-accident investigation reporting. “We note the waiting time before vehicles involved in an accident are removed from the highway causes bottlenecks. At present, the traffic congestion is aggravated after an accident due to the lack of police investigators in the vicinity, which is attributed to the fact that policemen usually take time to arrive at the scene as they usually come from their respective precincts,” he added. To be a valid insurance-claims document, traffic-accident investigation reports are required to be attested by the parties involved in the accident and by the person who prepared the same, and must contain the following information: adequate information on the location of the accident; identity of the parties involved in the accident and witnesses; narrative description of the facts of the accident; a simple diagram of the scene of the accident; traffic violation, if any; available closed-circuit television footages; and photographs. Funa said the use of the traffic-accident investigation report can only be used as an alternative to the police report when the road accident causes bodily injury and damage to the motor vehicle. “This is not applicable to any claim arising from fire, external explosion, selfignition or lightning or burglary, housebreaking, theft, malicious act, or for no fault clause claims in a third-party liability insurance and for insurance claims of passengers of public-utility vehicles,” he said. Rea Cu

Why associations matter

ccording to the American Society of Association Executives (Asae), below are three key influences why associations matter. In each, I cited an example of programs that members of the Philippine Council of Associations and Association Executives (PCAAE) have undertaken in their respective organizations: n Associations enrich lives through meaningful volunteerism, creating standards of safety and quality, promot i ng spec i a l i zed e x per t i se a nd creating citizenship with communities around the globe. On standards of safety, the Cement Manufacturers Association of the Philippines has a road-safety program that standardizes road-safety guidelines among all its member-companies’ trucking contractors. n Associations sustain competitiveness by committing resources to lifelong lear ning, professiona l development, mentoring and research. T he Philippine Franchise A ssociation offers the Certified Franchise Executive Prog ram, which enables franchise professionals to earn, grow professiona l ly a nd reac h a recognized standard of excellence in the franchise community. n Associations impact the economy via industrial development, product and service innovation and facilitating domestic and international business. The Philippine Chamber of Commerce and Industry’s Industry Sector, for example, spearheaded the crafting of the Transformation Development Program that articulated the steps and specific strategies that will help achieve the country’s vision as an industrialized tiger economy. Asae President and CEO John H. Graham IV, in the latest issue of PCA AE’s Association World magazine, said: “Associations put their resources to work in solving many of the world’s pressing problems [like calamities]…they were in the front lines of relief efforts, organizing and deploying professionals from their field to assist in the affected communities or raising funds to meet immediate and long-term recovery needs.” I think this resonates

Association World Octavio Peralta well in the Philippine context where associations got together, for instance, to he lp v ic t i m s of Super t y phoon Yolanda. Asae Foundation President Susan Robertson, in her presentation at the recent Dubai Association Conference, said: “Everything we touch and do is influenced by an association. Associations make the world smarter, safer and better—they provide, among others, postcollege skills education and standards of excellence and serve underserved sectors of society.” At the PCAAE Associations Summit 5 in the PICC in November 2017, our closing keynote speaker, Roy Sobrecarey, president of the New Rural Bank of Agoncillo, said associations are, in every step of the way in our lives—from “womb to tomb,” so to speak—the attending nurse and doctor at birth are members of a professional society, the teachers and professors at schooling, one’s self during his or her career and, finally, even the mortician. “This is a continuing life cycle, sustaining the viability of many associations that have an impact on a whole range of human activities,” Roy added. “The future of associations is very bright…. No matter what the world looks like in the future, people will have common interests and challenges to meet,” John summed up. T he column cont r ibutor, Oc ta v io “Bobby” Peralta, is concurrently the secretary-general of the Association of Development Financing Institutions in Asia and the Pacific (Adfiap) and CEO of the PCA AE. PCA AE enjoys the support of Adfiap, the Tourism Promotions Board and the Philippine International Convention Center. E-mail: obp@adfiap.org

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Napocor completes various electricity projects in Masbate

By Lenie Lectura @llectura

HE National Power Corp. (Napocor) said on Wednesday that it has completed various power projects in the province of Masbate, providing more reliable and stable power for the province. “On top of the recently rehabilitated and energized 46.59-kilometer Mobo–Aroroy 69–kilovolt transmission line, Napocor has also completed the 76-kilometer 69-kV transmission line connecting Mobo down south to the municipality of Cataingan and the commissioning of four units of 600-kilowatt [kW] generating sets for Ticao Island,” Napocor President and CEO Pio J. Benavidez said. The Mobo–Cataingan transmission line, which completes the Masbate backbone transmission, will improve power dispatch and enhance power stability and reliability. Napocor said the completed system will also contribute to the reduction of systems loss, which means more power is available for customers. This also equates to more savings for the Masbate

Electric Cooperative Inc. Napocor installed brand-new generating sets in its Ticao Diesel Power Plant to support 24/7 operations and address the growing demand in Ticao Island. With the additional four units of 600-kW gensets, Napocor’s dependable capacity in the island now reaches 2.55 MW, which is more than sufficient in meeting the island’s peak demand of 2.168 MW. Napocor services 13,000 households in four municipalities in the island—Batuan, Monreal, San Fernando and San Jacinto. Ticao Island is among the growing tourist destinations in the country. It offers unique destinations, such as the Halea Nature Park, which has small, serene beach coves; rocky island and white coral sand of Borobangcaso Islet; and the Catandayagan Falls, a stunning seaside waterfall. Napocor is the national government’s arm for missionary electrification as mandated by the Electric Power Industry Reform Act of 2001. Napocor performs this mandate through its 275 small power-utilities group or SPUG power facilities scattered all over the archipelago.

Editor: Efleda P. Campos • Thursday, January 25, 2018

₧13.16-B govt center breaks ground in New Clark City

By Ashley Manabat

Correspondent

APAS, Tarlac—The 200-hectare National Government Administrative Center (NGAC) at the New Clark City (formerly Clark Green City) here broke ground on Tuesday, with high-ranking officials of the national government in attendance. Phase 1-A of the P13.16-billion NGAC project involves the development of backup offices of various agencies to ensure continuous business operations and services in case of disaster or natural calamities. There will also be a one-stop shop for all businesses located in Region 3. The center will also be of great significance to the 2019 Southeast Asian (SEA) Games the Philippines will be hosting. A world-class Sports Complex with an aquatics and athletic center will be completed in less than two years and will serve as a venue for the athletics and water-sports events of the 30th SEA Games scheduled

on the last quarter of 2019. The stadium will have a seating capacity of 20,000, while the Aquatic Center shall have a seating capacity of 2,000. Once completed in 2019, the project’s Phase 1-B will begin with the construction of additional government office buildings, government housing units and support-service facilities on a 20-hectare land. Small-scale retail and services facilities, including banks, health centers, and hotels, will also be put up in adjacent zones. MTD Capital Berhad of Malaysia won the bid to build the government hub after submitting its proposal to the Bases Conversion and

Development Authority (BCDA) and undergoing the “Competitive Challenge.” New Clark City, BCDA’s most ambitious project to date, is a new metropolis that will rise within the Clark Special Economic Zone, in Capas and Bamban, Tarlac. It is envisioned to be the country’s first and only smart and green city that will feature mixed-use real-estate developments, an agro-industrial park and a food-processing terminal. High-ranking officials of the government led by Executive Secretary Salvador C. Medialdea, Foreign Secretary Alan Peter S. Cayetano, Transport Secretary Arthur P. Tugade, Public Works Secretary Mark BCDA President Vince Dizon graced the groundbreaking ceremonies together with local officials led by Tarlac Gov. Susan Yap, Capas Mayor Reynaldo Catacutan, Bamban Mayor Jose Antonio Feliciano and Pampanga Gov. Lilia G. Pineda. Also present were Sen. Emmanuel Joel J. Villanueva; Reps. Karlo Alexei B. Nograles, Albee Benitez and Pia Cayetano; Presidential Management Staff Head Ferdinand Cui; Undersectaries Rene Solidum, Cathy Cabral and Karen Jimeno; and Finance Assistant Secretary Paola A. Alvarez.

DOTr: Lack of political will caused previous PUV modernization plan to fail ‘miserably’ By Elmer V. Recuerdo Correspondent

ACLOBAN CITY—Lack of political will of previous administrations caused all plans to modernize the public-transport system to fail, a transportation official said. Speaking at the launch of the initial implementation of public-utilit y vehicle (PU V ) modernization program, Department of Transportation Assistant Director Mark Richmond de Leon said the government has to meet opposition to the program “head on.” He represented Transportation Secretary Arthur P. Tugade, who had other commitments. “This is a program we cannot give up on,”de Leon said. “Our problem in the public transport system is huge. During the past administration, when drivers strike, there was no public-transport modernization program. The problem is all over the country, and we chose to tackle the problem head on.” De Leon spoke at the launch last Tuesday in this city. In attendance were Assistant Secretary Anthony Gerald Gonzales of the Office of the Presidential Assistant for the Visayas and chairman Martin Delgra of the Land Transportation Franchising and Regulatory Board (LTFRB). “Implementing the modernization of a public-transport system is not easy. Many past administrations have attempted, but never got to first base,” de Leon said. “We are talking of a large-scale transformation of the publictransport sector. We are not just making repairs. We are overhauling the system, the industry and the institution.” The PUV modernization program, a flagship project of the Duterte administration, has been met with protests from

the transport sector, particularly militant transport groups, who argued that jeepney operators cannot afford the high cost of replacing their gasoline-run jeepneys with solar-powered jeepneys the government is pushing. De Leon said the “outdated” public-transportation system is endangering the lives of commuters, as well as the environment. “Everyday, you see accidents on the roads, and you have dilapidated jeepneys causing many illnesses,” he added. Many of the current jeepneys plying the roads nationwide are more than a decade old. “More than half of the pollution of urban areas is caused by outdated public vehicles. They are unsafe and inconvenient,” de Leon said. De Leon added both the DOTr and LTFRB will help the transportation sector make the transition easier. “We will be helping our drivers and operators by introducing them to this new system through a very generous financing package,” de Leon said. De Leon said the DOTr will help local government units to ease the implementation of the PUV modernization plan in their respective local government units. “The new policy of the DOTr is, we will plan the public-transportation system of the LGU for cities and the rural areas,” he said. PUV modernization in Tacloban is already under way. Since last December, solar-powered electronic jeepneys have been plying the villages in the northern part of the city, where 15,000 families were relocated from their old communities deemed high-risk areas. At the moment, 45 electric jeepneys are already deployed and used by commuters.

48 cruise ships expected to visit Boracay this year By Jun N. Aguirre Correspondent

ORACAY ISLAND, Aklan— The Aklan provincial government is anticipating at least 48 cruise-ship arrivals this year. Niven Maquirang, jetty port administrator, said this is the biggest number of port calls for cruise-ships visiting Boracay compared to the past several years. Last year at least 12 cruise ships were expected to visit the island. “These cruise ships would further boost the tourist arrivals coming this year,” Maquirang said. This year’s target for Boracay is around 2.2 million tourists. This January at least 10 cruiseship arrivals are anticipated; February, another 10; March, 10; April, four; June, one; August,one; October,one; November, four; and December,seven; for a total of 48. In previous years, the Department of Tourism has been developing Boracay as part of the cruiseship hub in Southeast Asia.

ComVal brother execs to rent house for relatives of constituents confined in regional hospital By Cha Monforte Correspondent

AYOR Ruperto “Rupet” Gonzaga III of Mawab, will be launching on February 1 a unique program where the municipal government would rent a house near the Davao Regional Medical Center (DRMC) in Apokon, Tagum City where relatives of confined patients from Mawab could stay—with free board and lodging. The air-conditioned house will have in-house “kasambahays” to help make the relatives’ stay convenient and comfortable. “The municipal personnel doing housework such as cooking, cleaning of the rented house would double as follow-up personnel for the needs, medicines and referrals of the patients confined in the hospital,” the mayor said. Kins, relatives and friends of confined patients, especially the poor and from faraway places, sleep in congested hospital corridors or outside, within the hospital compound. Most hospitals maintain a policy of allowing only one watcher for each patient confined in wards. Gonzaga said the program would be actively supported by his brother Congressman Ruwel Peter Gonzaga, who has a medical and hospital assistance program. The mayor said there would be rice, noodles and canned goods in the air-conditioned rented house for consumption of the temporary boarders. The unit would have six doubledeck beds and those taking temporary refuge on it are encouraged to also do their share in cooking and cleaning, just like in the family, he added. The program is still a work-inprogress, but the Gonzaga brothers have made the free house as a Valentine’s treat for the Mawab constituents.

A10 Thursday, January 25, 2018 • Editor: Angel R. Calso

Opinion

BusinessMirror

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editorial

‘6.7 percent, 9 or 10, what do I care?’

he Philippine Statistics Authority announced on Tuesday a 6.7-percent GDP expansion in 2017. Government spending helped ensure the country’s position as one of Asia’s fastest-growing economies, according to Socioeconomic Planning Secretary Ernesto M. Pernia. This, despite last year’s growth being slower than the 6.9-percent GDP increase in 2016, which got a big boost from consumer spending.

The Bangko Sentral ng Pilipinas (BSP) said the growth figures confirm the underlying strength of the economy that rests on balanced foundation. This, the BSP added, will give it ample policy space to stay focused on meeting its inflation target and pursuing ambitious financial-sector reforms. The growth momentum is expected to pick up speed as the government pushes ahead with its “Build, Build, Build” program. Finance Secretary Carlos G. Dominguez III has nothing but reassuring words: “There will be a more exciting growth narrative for the Philippines this 2018, more so now that all of the government’s plans to keep the country among the world’s fastest-growing economies have started falling into place.” Obviously, he was referring to President Duterte’s tax-reform push to raise revenues for the government’s ambitious infrastructure program and to boost the country’s competitiveness. Economic pundits have said that our badly maintained roads, dilapidated trains and poor Internet speed, to name a few, have hindered the country’s competitiveness, driving away investments. In other words, without investments, no jobs are created. Thus, all efforts to lift millions out of poverty will get derailed. As the Philippines is expected to book higher economic growth in the coming years, fueled by the rollout of big infrastructure projects, more jobs will be created. Improved incomes will help reduce the number of poor Filipinos. However, the government must likewise address constraints holding back the potential of the private sector to create a more meaningful inclusive growth. For example, we need to promote competition, make the country businessfriendly and attract investments through a simpler, fairer and more efficient tax system. This way, we can lift more Filipinos out of poverty. The Duterte administration must make poverty eradication the centerpiece of its economic, social and environmental policies. That’s because the Philippines, together with other members of the United Nations, signed in 2015 a new set of global development goals to replace the old “Millennium Development Goals” (MDGs), which sought to eliminate extreme poverty and hunger everywhere. Under the MDGs, the Philippines committed to halve poverty, percentage-wise, from the 1990s’ level by 2015. This was not achieved. This time around, the Philippines must try its best to promote the UN vision of a new global order by 2030 under the new Sustainable Development Goals (SDGs): “Zero poverty and zero hunger. Healthy life for all at all ages. Education and learning opportunities for all. Gender equality and empowerment of all women and girls. Safe and affordable water for all. Access to affordable and sustainable energy services for all. Sustainable economic growth and decent work for all. Inclusive and sustainable infrastructure and industrialization for all. Social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion and other status.” We know we have enumerated a mouthful, not-so-easy-to-do tasks for the government. But, as pundits said, the SDGs, if fulfilled, are not only transformative. They will change governance and development directions in all countries, both developed and underdeveloped, in a radical, if not revolutionary way. In short, these are the levers policy-makers must pull to make sure the country’s economic growth will benefit all Filipinos. Right now, the poor’s reaction to our GDP expansion can only be something like this: “6.7 percent, 9 or 10, what do I care?”

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John Mangun

OUTSIDE THE BOX

he lack of knowledge about money and currency from the ordinary well-informed person could fill a book, which I might write if I ever leave my “Juan Tamad Mango Tree House.” For the purpose of this discussion, I will use the word “Bitcoin” as a generic term for cryptocurrencies in general.

Note first that I love Bitcoin. I am a trader—a gambler if you prefer, to the extent that I take a risk to gain a reward on the outcome of an event. Investing is not gambling in that the outcome is not determined by random chance. But investing is “gambling” as I do not have control over the outcome. An investment that can move 10 percent both up and down several times a day is a trader’s paradise. The reason a normal person does not understand how money and, currency, in particular, works is because the government and bankers do not want the public to know. Like it has

been said, “The less the people know about how sausages and laws—and money—are made, the better they sleep at night.” However, everything you need to learn is at your fingertips if you know what to look for. There is nothing fundamentally wrong with Bitcoin except that most of the information we receive is incorrect. Bitcoin in its current form will probably fail and there is nothing wrong with that. The gasoline-powered internal combustion engine was invented in 1860, but no one figured out what to really do with it until Carl Benz made a two-seater auto-

mobile in 1885. And it wasn’t until 1898 that cars had steering wheels, instead of a steering “stick,” which was very difficult to use. Personal computers were in wide use in 1988—I had one—but until Windows 3.1 replaced the awful DOS instructions in 1992, computers did not take off. The same curve will happen with Bitcoin. New ideas take time to develop to consumer needs. Nonetheless, there is much false propaganda about Bitcoin. The idea that Bitcoin marks a digital revolution in money and will replace “paper” currency is not true. From the P10 coin you give the fishball vendor to Abu Dhabi launching a $10-billion bond offering, money is already digital. Only about 5 percent of all global money transactions are physical cash. Of course, this data is distorted by things like the Abu Dhabi bond, but how much cash do you personally use versus paying for things with your electronic credit or debit card? That percentage is probably a good reflection of the use of “digital currency” globally. The idea that Bitcoin will eventfully replace the US dollar anytime soon is also a myth for two reasons.

More than half of all physical US dollars—green pieces of paper with a picture of dead national hero—is held outside of the United States. That is because it is and will continue to be the global reserve currency. And there is a critical reason for that. The US dollar is the only currency that has never been demonetized— replaced by a new currency. We just saw that happen in the Philippines, where the “old” currency was no longer accepted. You can use a 100-yearold dollar bill as legal tender as if it had been printed yesterday. Only if and when paper dollars are demonetized will greenbacks cease being the reserve currency. The risk of demonetization of the dollar is very low. And which supermarket do you know that takes gold for groceries? Bitcoin is here to stay but, in effect, it is only the “Windows 10” of currency. There may not be a Window 11, but there will be a Window 10.2 and higher.

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.

Bottlenecks for sustainable development

T. Anthony C. Cabangon

Editor in Chief

Senior Editors

The Bitcoin revolution?

Cecilio T. Arillo

database

ERE are some key bottlenecks that could hamper achieving the United Nations Sustainable Development Goals (SDG) objectives for 2030: from ending poverty to improving well-being, gender equality, cities’ resilience or climate action.

This is the result of a new comprehensive analysis by a team of scientists from the Potsdam Institute for Climate Impact Research (PIK). According to the study shared to Databank, responsible consumption and production seems to be such a bottleneck, as data from the past shows. “The SDGs aim at tackling complex, multidimensional challenges faced by humankind and set the international agenda for 2030. So far, little is known about the interactions, correlations and potential conflicts between the set of SDGs,” lead author Prajal Pradhan said. “We tried to break up the complicated interlinkages into more comprehensible pairs so we could investigate how different SDGs influence each

other. It turns out that, in general, synergies outweigh trade-offs for most SDGs and countries. However, one SDG stands out as being in partial conflict with a number of other goals—that is responsible consumption and production,” he pointed out. Improvements in well-being, economic prosperity and lifestyles currently still come to a large extent through an increase in consumption and, therefore, with the growing environmental and material footprints. To successfully implement the 2030 development agenda, such conflicts in objectives need to be identified, governed and tackled, the study said. Adopted in 2015, the SDGs comprise 17 goals and 169 targets,

ranging from human well-being to economic prosperity and environmental protection. The UN objectives to transform the world until 2030 are also the frame that member-states are expected to adopt for their agendas and policies for development and sustainability. The PIK study said: “Identifying synergies and trade-offs through SDG interactions is central to the design of feasible policies. So far, SDG interactions have mostly been analyzed qualitatively, for few targets or for individual regions of the world.”

Lessons from the past: Data reveals more synergies than trade-offs

“Our study provides the first complete quantification of synergies and trade-offs as they can be detected in data from the past to the present within and across the SDGs, both at country level and on a global scale,” says coauthor Jürgen Kropp, vice chairman of PIK’s research domain Climate Impacts & Vulnerabilities. Using a statistical setup applying data from the UN Statistics Division on 122 indicators for more than 200 countries between 1983 and 2016, “we were able to carve out the lessons to be learned from historical data. This is a simple but highly useful approach, as the SDGs may be still

new, but the challenges are certainly not,” Kropp added. The results not only reveal possible conflicts between the SDG goals, they also highlight a huge potential for synergies when it comes to the fight against poverty, hunger and for health and well-being. Eliminating poverty and improving public health positively influenced most other SDGs. For instance, around 3 billion people around the globe live in countries where improvements on health and well-being matched with the provision of clean water and sanitation. Identifying the countries where synergies occur allows for being able to learn from the best practices. As another example, countries associated with sustainable cities also seem to score well on climate action that indicates a strong potential for synergy. Based on the results of the study, more elaborated concepts can be developed in order to make reliable projections about future fulfillments of SDGs and associated consequences. “The SDGs represent a holistic and multidimensional perspective on development,” said coauthor Wolfgang Lucht, chairman of PIK’s research domain Earth System Analysis, See “Arillo,” A11

Opinion

BusinessMirror

www.businessmirror.com.ph

The tweet Trump could never send Tehran

Shaped by the word of God Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

Thomas L. Friedman

new york times

fter violent protests recently exploded across Iran, President Donald J. Trump vowed to differentiate himself from President Barack Obama by openly tweeting his support for the demonstrators. It had no effect, though. One reason is that Trump could never send the really killer tweets—the ones that might have gone viral across Iran and rattled the regime. What would those have said? Something like: @realDonaldTrump “America stands with Iranian demonstrators!!! Why are so many from the countryside??? Because Iranian Revolutionary Guards mismanaged Iran’s water supply for decades. Stole all the water for their companies, cronies, pistachio farms and stupid dams!!! And now climate change and droughts are making it all worse, forcing Iranians off their land. Unfair!! Sad!!” The Iran protests were clearly fed by many streams—The Times told a harrowing tale last weekend of how corruption and Ponzi schemes at banks owned by Iran’s clerical regime and its allies had defrauded thousands of savers, and brought some into the streets. But environmental corruption was also a cause of anger. The Islamic regime and the Revolutionary Guards had ripped off the country’s natural wealth the same way they’d ripped off savers’ wealth. And now climate change is amplifying many of the worst impacts. That’s not something an American president who thinks climate change is a hoax can tweet about— but it is a key reason the street demonstrations were particularly intense in regions hard-hit by a whirlwind of drought, extreme weather events and reckless water-use practices imposed by Iran’s clerical rulers. “When people lose their lands they lose everything, and that means they aren’t scared of anything,” explained Nikahang Kowsar, an Iranian exile geologist and son of a watershed scientist, who grew up in southern Iran. “The water crisis is real and killing the country today. We are getting less precipitation, and the population is rising. There’s bad agricultural policies and bad water governance. It is like a time bomb.” Officials predict that millions of Iranians could be forced to flee their country before the end of the century. Here’s why: Since the revolution in 1979, Iran has built a crazy number of hydroelectric dams. According to a March 2015 report from Iran in The Financial Times, “Over the past three decades, Iran has built 600 dams—an average of 20 a year—to irrigate farms and provide power. It is unclear how much has been spent on these projects, though it is believed to be second only to gas and oil…and much of the money has been channeled through contractors linked to the Revolutionary Guard. Poor planning and 14 years of drought have rendered many of them useless and, in some cases, they have contributed to environmental damage in the semi-arid country, experts say.” Once some farmers found they

no longer had water for their crops —because aquifers had been overused, or water had been diverted to big agribusinesses tied to the regime, or too many dams had been built and then warmer temperatures shrunk the lakes behind them and nearby wetlands—many of the farmers migrated to the margins of cities in search of employment, food and water. “The government is not giving the exact number of Iranians who fled the countryside and are now living in shantytowns, but it should well be over 16 million, up from 11 million in 2013,” added Kowsar, who, besides his water/geology expertise, is one of Iran’s most followed political cartoonists, which is what got him exiled. “These cities, where employment is scarce, have become hot spots of unrest,” particularly as the government cut back subsidies. A Januar y 8 essay on ClimateWire by Scott Waldman explained: “Former President Mahmoud Ahmadinejad understood that climate change and water mismanagement was ravaging family farms, and his government provided subsidies to families who struggled to put food on the table, said Amir Handjani, a senior fellow at the Atlantic Council’s South Asia Center. “When the current president, Hassan Rouhani, signaled that he would reduce those benefits, enraged Iranians across the nation’s arid countryside joined the wave of protests. ‘You have climate change, shortage of water, they can’t grow their crops, and now they’re getting their cash handouts taken away,’ said Handjani. ‘It’s a panoply of issues coming together at once.’” The Iran story is repeating itself across the Middle East—environmental stresses mixing with resentment over corruption and misgovernance, sparking uprisings. And it is only going to get worse. Between 2006 and 2011, some 60 percent of Syria’s landmass was ravaged by the worst drought in the country’s modern history. It came after years of overpumping of aquifers by cronies of the regime. That drought forced 800,000 to 1 million Syrian farmers and herders to abandon their land and livestock and move to the edges of Syrian cities and towns, where they had to scrounge for work. The Assad regime did nothing for them, and they were among the first to join the revolution against it. So, kids, if you want to understand the politics of the Middle East today, study Arabic and Farsi, Hebrew and Turkish—but, most of all, study environmental science.

IN this file photo, Iranian protesters chant slogans at a rally in Tehran, Iran. The Trump administration called on Iran’s government to stop blocking Instagram and other popular social-media sites as Iranians demonstrated in the streets. Average Iranians are angry at US President Donald J. Trump for slights such as his travel bans. Yet, he voiced support for protests in Iran at the end of the year, unlike Obama’s caution toward demonstrations in 2009 over its disputed presidential election. AP

Thursday, January 25, 2018 A11

he story of the man with an unclean spirit coming into Jesus’ presence and being liberated at His mighty word (Mark 1:21-28) reflects the situation we as a people hope to undergo. In our celebration of National Bible Sunday is the conviction that God’s word is a potent factor in our national transformation and renewal.

Authoritative word obeyed even by demons The reign of God was all present and palpable in the person of Jesus. His words and deeds exuded with the mystery that humankind, neck-deep in suffering and oppression, is not abandoned but invited by God to a new communion. Amid so much hunger for meaning and hope, Jesus as the Word Incarnate heralds on earth the good news of salvation. His words are not just authoritative as in rhetorically riveting or compelling, but effective in bringing about what is proclaimed. Those who hear and accept His words are changed in

their lives; He called out earlier for conversion and faith, and His first disciples left all to follow Him. The reign of God He announced, He made happen. His combative action against the forces of evil backed up His absolute claims. He is the one endowed with the Spirit of God; even the devil recognized Him as God’s Holy One having power superior to it and bringing it destruction. The rebuke by Jesus was a formal command that tolerated no disobedience; with His mighty words, Jesus exorcized the unclean spirit from the man. He supplanted with the reign of His loving Father the long reign of terror by

the devil. To the people, He reveals and invites to faith; to evil spirits, He commands and drives away. And it was in the very synagogue of the Jews that the public acclaimed His authoritative teaching and the devil recognized and obeyed Him.

Present still in His words

Jesus would remain with His followers until the end of time, not leaving them orphans. Truly, in the sacrament of His words He is ever present in our midst and continues to bring about the reign of God He is proclaiming. He is making absolute claims upon us today if we are to share in His salvation. Nobody else has the authority He possesses; nobody else has the power He manifests. His gospel is like the two-edged sword that shapes us in conformity with Him. Putting on the mind of Jesus, living according to His gospel values is essential to true discipleship and the sign of real faith, as it is the fruit of His effective words. It is here that we have to diagnose ourselves to be merely nominal Christians for the most part. We carry His name but contradict His teaching; we call upon Him but we do not listen to Him. With the majority of Filipino Catholics

not regularly going to church on Sundays where the Word of God is proclaimed and celebrated, it is no wonder that so many of us find it so difficult to think and speak and behave in accord with Jesus’ gospel. We need exorcism from the forces of evil, even as we wallow in interminable corruption and abused by pernicious, pervasive vested interests. Our huge moral deficit is evident even among the preachers of the word who do not practice what they preach, or who are pushing their own gospels. Alálaong bagá, we need God’s Word to shape us in the divine image. Authentic conversion is only in consequence of listening to Jesus’ gospel. But the Word is spoken to us by human persons and in human words, and so much is at times lost in the transmission. Our people want preachers who are themselves shaped by the Word of God, so that they can with authority be instrumental in shaping our people to be united in God’s love and righteousness. Join me in meditating on the Word of God every Sunday, from 5 to 6 a.m. on DWIZ 882, or by audio streaming on www.dwiz882.com.

Downsizing the conditional-cash transfer Dr. Rene E. Ofreneo

LABOREM EXERCENS Continued from A1

CT was introduced to the country in 2007, courtesy of the World Bank that had accumulated by then a decade of CCT social experiments in Latin America. The administration of Gloria Macapagal-Arroyo embraced the program with gusto and transformed it from 2008 to 2010 as the nation’s “centerpiece” antipoverty program with some help from the World Bank and the Asian Development Bank. The incentives for CCT policy adoption were irresistible: relatively simple scheme for poverty alleviation and the listing/targeting of the poor in a community provided the cooperating local government units an instant political base.

The Benigno S. Aquino III administration fell in love with the CCT program. It became the “core” in the “umbrella” program on antipoverty, which includes the Kalahi-CIDS assistance for poor barangays, the Self-Employment Assistance-Kabuhayan, the Payapa at Masaganang Pamayanan Program, the disaster and relief programs for victims of disasters, microfinance relending program, PCSO assistance to indigents, benefits for solo parents, national health insurance provided by the Philippine Health Insurance Corp., social insurance programs administered by the Social Security System (SSS) and the Government Service Insurance System (GSIS), Pag-Ibig Pabahay Program and Housing Loans, income and livelihood support for disadvantaged groups, free basic education, Technical Education and Skills Development Authority training program for the poor, monthly pension of P500 for indigent senior citizens, senior medicine and food discounts, rehabilitation services for disadvantaged groups, food programs for poor schoolchildren, and so on and so forth. Thus, the annual CCT budget sextupled in four years, from P10 billion in 2010 to over P60 billion in 2014-2016 (see Table 1). Under the 10-point Agenda of the incoming Duterte administration, the CCT was listed as No. 9, for further enhancement or strengthening. The CCT budget for 2017 was reported to be close to a whopping P80 billion (see Table 1).

Arillo . . .

continued from A10

adding that: “The empirical framework on the evaluation of SDG interactions here presented makes a fun-

Now here comes the National Anti-Poverty Commission (NAPC), the nation’s antipoverty body, singing a different tune about CCT. In their seminal analytical report on poverty, Reforming the Philippine Anti-Poverty Policy (2017), the NAPC Secretariat explained that the CCT program per se can only alleviate, not reduce, poverty. A quick look at the statistics on poverty shows there is some basis for this contention. In 2015 the poverty threshold was set by the Philippine Statistics Authority at a relatively low level: P59.60 per person per day or P21,753 per capita annually, corresponding to P9,064 monthly for a family of five. Thus, a CCT beneficiary family whose head or breadwinner has no regular job or income, the P1,400 CCT monthly allowance is still way below the very low poverty threshold of P9,064 a month. Indeed, no poverty reduction. Just alleviation of some pangs of hunger. Of course, there is some improvement in the health of poor mothers and the ability of poor children to go to school. In her preface to the book, the NAPC head, Lisa Maza, summarized the proposal of the book for an overhaul of the antipoverty program pursued by the government. She wrote, the challenge is not how to have a “centerpiece antipoverty program,” such as the CCT, but how to make “poverty eradication the centerpiece of economic, social, and environmental policies.” The book calls for an integrated and comprehensive “pro-development policy” with the damental contribution to ensuring successful policy implementation of the SDG agenda. Attainment of SDGs is central for the great transformation that is required for overcoming the unsustainable practices visible in the historical data.”

following four components: n Structural transformation of the economy based on a macroeconomic framework that supports national industrialization and balanced rural development, n Comprehensive, universal and transformative social protection, n Human rights-based and social development approach to poverty reduction, and n Democratic governance based on people’s democratic participation. The foregoing means the CCT program cannot be a stand-alone or solo antipoverty program, as pointed by this author in the past. In fact, there are continuing global debates on the true impact of CCT on poverty reduction. In the case of Latin America, the birthplace of CCT, there is increasing evidence that CCT can only contribute to poverty alleviation. It can help reduce poverty if it is part of a broader antipoverty program that includes other economic and social measures. This is best exemplified by the experience of Brazil, whose Bolsa de Familia is one of the biggest in the world. According to Lena Lavinas (“21st Century Welfare,” NLR, 2013), Poverty in Brazil dropped from 36 percent in 2001 to 11 percent in 2011. She said this was due mainly to Brazil’s economic growth and job creation. The worker government of the Lula administration aggressively pursued urban and rural industrialization, as well as urban and rural social reforms in 2001-2011. A progressive pension system and labor-law reforms expanding coverage of labor protection

and increasing the minimum wage further reduced poverty. Yes, the CCT or Bolsa de Familia did contribute to poverty reduction. But per study by Lena Lavinas, Bolsa’s contribution (together with other safety nets) to poverty reduction was minimal compared to the impact of the economic and social reforms adopted by the Lula government. In Reforming, the NAPC Secretariat labeled the CCT and other socialprotection measures as largely “…‘residual,’ in the sense that they simply serve to mitigate some of the worst impacts of macroeconomic policies that have resulted in increased impoverishment, without inviting interrogation of the main development strategy that led to increased poverty in the first place. There is also often the underlying assumption that widespread poverty is the result of individual failings rather than the outcome of societal structural processes, as is oftentimes the case.” Thus, in their proposed policy response, Reforming did not mention CCT at all. Instead, it bats for a comprehensive and universal socialprotection program for all Filipinos and the pursuit of economic and social reforms. Foremost among the proposed reforms are nationalist industrialization and agrarian reform, seen as the true solutions to poverty reduction. The big question: Will the Duterte administration downsize the CCT program and embrace the NAPC proposal to change the overall policy orientation in poverty reduction?

Table 1. Pantawid Pamilyang Pilipino Program Target, Households and Budget, 2008-2017

Year Annual Target Active Households 2008 375,829 337,416 2009 700,000 777,505 2010 1,050,000 1,035,431 2011 2,339,241 2,345,639 2012 3,106,979 3,121,530 2013 3,809,769 3,935,394 2014 4,461,732 4,454,755 2015 4,436,732 4,377,762 2016 4,620,630 4,387,689 2017 4,400,000 4,353,506* TOTAL

Annual Budget (Php Million) 1,297 8,300 10,000 21,194 39,445 44,911 62,614 62,323 62,666 78,187 390,936

Source: NAPC, Reforming Philippine Anti-Poverty Policy, 2017. *as of 31 August 2017 Lucht said to achieve this, “the SDGs need to act as a system of interacting components that together move the world into a safe and just operating space. Our study shows that the SDGs are much more than just a collection of targets, but a sys-

tem of synergistic re-enforcement. While no single SDG has the power to transform the world alone, the whole set of SDGs together does.” To reach the writer, e-mail cecilio.arillo@ gmail.com.

2nd Front Page BusinessMirror

A12 Thursday, January 25, 2018

2M workers seen benefiting from amending Labor Code

By Jovee Marie N. dela Cruz @joveemarie By Samuel P. Medenilla sam_medenilla

lmost 2 million workers are expected to benefit from the passage of a measure that seeks to address the problems of labor-only contracting in the Philippines, the vice chairman of the House Committee on Labor and Employment said on Wednesday. The House of Representatives on Tuesday approved on second reading House Bill (HB) 6908 strengthening the security of tenure of workers by amending Presidential Decree (PD) 442, or the Labor Code of the Philippines. The bill is expected to be approved on third reading next week. Rep. Vicente S.E. Veloso of the Third District of Leyte, vice chairman of the House Committee on Labor and Employment and spon-

sor of the bill, admitted that not all kinds of contracting are prohibited under HB 6908. “While we cannot eliminate all kinds of contracting, almost 2 million regular and agency-hired workers are expected to benefit from the passage of these amendments,” Veloso said. The measure prohibits labor-only contracting and defines its existence when of the following is present: the contractor does not have

HB 6908

The measure that seeks to introduce amendments to the Labor Code substantial capital or investment in the form of tools, equipment, machineries and work premises, among others; and the contractor has no control over the workers’ methods and mean of accomplishing their work; and the contractor’s workers are performing activities which are directly related to the principal business of the employer. The bill also introduces a new provision requiring all persons or entities doing business as job contractors to obtain a license from the Department of Labor and Employment, listing requirements for such licensing, determining the period of validity of the license and stating the responsibility of the licensee to submit an annual report. T he ter m “ job contractor”

refers to a sole proprietorship, corporation, partnership, association, cooperative or any other organization that performs a specific work, job or service for a principal employer. The term “principal employer” refers to the person or entity, including the government, that contracts out a specific work, job or service. The bill also seeks to amend Article 106 of PD 44 titled “Contractor” so that whenever an employer enters into a contract with a person for the performance of the former’s work, the employees of the contractor shall be paid in accordance with the Labor Code and other laws. The contracting out of the same work contracted out by the employer is prohibited. It also declares that violation of substantive or procedural due process is equivalent to illegal dismissal. In addition, the entitlements of an illegally dismissed employee are broadened by ensuring the payment of social-welfare contributions and benefits to said employee. See “Labor code,” A2

Deployment of house helps to Beijing still under study

GATCHALIAN WANTS GOVT TO REVIEW RIGHT OF TELCOS TO WORKHORSE SPECTRUM By Butch Fernandez

@butchfBM

he chairman of the Senate Committee on Economic Affairs, in prodding regulators to check anticompetitive acts, nudged the National Telecommunications Commission to exercise its power to recall “unused” spectrum allocated to telecommunication giants PLDT and Globe, as provided under Republic Acts 3846 and 7925. “This will make room for the allocation of workhorse spectrum to a truly competitive third player—the critical first step toward revolutionizing the telco sector and improving the quality of mobile-phone services provided to consumers,” Sen. Sherwin T. Gatchalian said on Wednesday. At the same time, Gatchalian prodded the Philippine Competition Commission to “review the legality” of the prevailing allocation of spectrum to the two telco giants. The senator voiced concern that “the complete control of two powerful entities over the entire range of profitable spectrum is textbook anticompetitive behavior, and consumer welfare demands that we put a stop to it.” In a statement, Gatchalian noted that earlier this week, the Department of Information and Communications

Technology already acknowledged “a major stumbling block” to genuine telecommunications-sector reform, citing the “complete control of all workhorse spectrum frequencies by PLDT and Globe.” Essentially, the senator added that this means any potential third player would be “limited to offering only databased services, since the 2G spectrum that support call and SMS services are completely controlled by the two telco giants.” “This would put the third player at an immediate disadvantage, right out of the gate, since a significant percentage of mobile subscribers still rely on these bread-and-butter 2G services,” Gatchalian noted. The senator recalled that the same issue was already raised last year during the Senate Economic Affairs Committee inquiry on potential telecommunications industry reforms. Gatchalian cited one of the key recommendations made by his committee, which was subsequently adopted by the senators in plenary session upon approval of their committee report, was to “increase competition in the sector by stricter government regulation of the publicly owned spectrum.” “This is the perfect time for the government to act on this recommendation,” Gatchalian added.

Federalism shift won’t derail infra plan–Neda

OLALIA: “We would first get the opinion of our labor attachés about the market situation there [Beijing].”

Continued from A1

ot so fast. Even with Beijing opening its doors to more foreign household service workers (HSW), the Philippine Overseas Employment Administration (POEA) said it may take some time before Filipino HSWs could be deployed to the Chinese metropolis. It was reported on Tuesday the Chinese government is now considering making Beijing the second Chinese mainland city, after Shanghai, where foreign executives will be allowed to hire expats as HSWs. Bernard Olalia, labor undersecretary and POEA officer in charge administrator, said they would still have to study the new policy to ensure Filipino HSWs will be protected if they work in Beijing. He said a technical working group will be formed to assess the matter. “We would first get the opinion of our labor attachés about the market situation there. We would also have to conduct [stakeholder] consultations. This is to avoid any possible welfare cases there,” Olalia said. Currently, Olalia pointed out, China remains a restricted market for Filipino HSWs, since Chinese laws prohibits Chinese nationals from employing foreigner. He said only rich expatriates in China are exempted from the said regulation. “There should be a legislative action on their part before we could deploy [Filipino HSWs] there,” Olalia said. Last year the Department of Labor and Employment (DOLE) said it is exploring the deployment of additional overseas Filipino workers (OFW), particularly HSWs, to mainland China, since they will be paid relatively well there compared to other destination-countries. The DOLE, however, is yet to sign any new bilateral agreement with its Chinese counterpart to facilitate such deployment. Based from the POEA’s latest data, most of the country’s deployed OFWs abroad are HSWs. Their top 3 destinations include the Kingdom of Saudi Arabia, Kuwait and Hong Kong, an autonomous region of China. Samuel P. Medenilla

www.businessmirror.com.ph

BEAUTIFUL FURY A flock of turkeys searches for food amid an erupting Mayon Volcano as seen from Legazpi City, Albay province, around 340 kilometers (200 miles) southeast of Manila,on Wednesday. Lava fountaining regularly from the Philippines’s most active volcano has flowed up to 3 km (1.86 miles) from the crater in a dazzling but increasingly dangerous eruption. Mount Mayon has spewed lava up to 600 meters (2,000 feet) high at times on Tuesday and early Wednesday, and its ash plumes stretched up to 5 km (3 miles) above the crater. AP/Bullit Marquez

Funding. . .

Continued from A1

the country that is under martial law following a five-month battle with Islamic militants. To help finance the bonanza, the government passed a tax law last month designed to add more than P180 billion ($3.5 billion) to government coffers by 2020. But a large chunk of the financing will come from China and Japan, which are vying to win orders for their companies and build stronger ties with their Southeast Asian neighbor. The two have pledged $9 billion of loans and grants each. Duterte has room to borrow after the previous administration ran a tight fiscal policy with a budget deficit goal of only 2 percent of GDP. The president, who took office in 2016, is seeking to widen that to 3 percent from 2018 to 2022. “The Philippines can afford to do that, and I don’t see a problem in the next two years,” said Euben Paracuelles, an economist at Nomura Holdings Inc. in Singapore. “Further out, there lies the question.”

Million deployments

The bigger challenge will be finding engineers and qualified staff to operate the cranes, earth movers and heavy equipment. More than a million Filipi-

nos leave each year. “The lack of skilled laborers poses an increasingly large constraint on the sector’s growth’’ resulting in project delays and cost overruns, according to Raphael Mok, senior analyst for Asia at BMI Research in Singapore. A failure to push through Duterte’s infrastructure plans could adversely affect the country’s growth prospects, he said. The Philippines scored 51.8 out of 100 in BMI’s labor market risk index, which measures the availability, level of skill and cost of workers. That’s compared with 74.9 for Singapore, 58.3 for Malaysia and 58.2 for Thailand.

Delays

The labor gap has already caused some project delays in the private construction industry, leading to an increase in home and office prices, said Joey Bondoc, research manager at Colliers International Philippines in Manila. Of the 16,200 additional residential units that Colliers expected in Manila last year, only about 7,400 units were completed in the first three quarters. The result will be a bidding war for construction workers, Budget Secretary Benjamin E. Diokno said. “Companies should be willing to adjust their wage rates.’’ To ease the shortage, the state agency Technical Education and Skills Development

Authority (Tesda) is training more building workers and engineers. “Tesda in the past six years failed to train construction workers and zeroed in on the service industry, such as hotels, food and business-process outsourcing,”said Ibarra Paulino, executive director at the Philippine Constructors Association Inc., a group of about 130 large building contractors. But the Philippines isn’t the only place that needs more builders. In Japan, where wages are much higher, Tokyo is in the middle of preparations for the 2020 Olympic Games. Singapore is doubling the size of its mass-transit system, while Indonesia, India and Malaysia are all on infrastructure drives to boost growth. To fill vacancies, some Philippine developers are retraining employees or hiring more laborers from the countryside. Others, like 8990 Holdings Inc. are setting up their own training facilities for masonry, carpentry, welding and crane operation. Part of the problem is that projects have become bigger and more complicated, requiring an upgrade of knowledge, said DMCI Holdings Inc. Chairman and President Isidro Consunji, whose company employs about 16,000 workers. DMCI offers skills-based bonuses to retain staff, “but only after we confirm that they’re really capable,” Consunji said. Bloomberg News

projects in the “Build, Build, Build” program. According to the government’s web site, the Build, Build, Build consist of a mixed bag of projects ranging from roads, bridges, railways, bus-rapid transits, to the Philippines’s first subway. Pernia also said the Neda is still calculating the impact of federalism on the economy. This, he said, is the reason they could not yet give a definite answer on its economic ramifications. However, Philippine Institute for Development Studies (PIDS) senior research fellow Rosario G. Manasan said that from a public finance perspective, shifting to federalism may lead to higher costs, especially if tax assignment and expenditure distribution are not done properly. Manasan added the fiscal gap in regions could reach as much as P1.09 trillion, or 84 percent of the total expenditure needs of subnational governments. This also represents some 57 percent of total revenues from national governmental internal revenue taxes in 2017, or 7.5 percent of GDP. With the increase in regional government functions, subnational governments will be hard-pressed to increase their revenues. According to Manasan’s calculations, subnational governments can only finance P213.59 billion of the total needs of P1.3 trillion. Manasan earlier told the BusinessMirror that the computation is based on her proposed shared and exclusive functions of the federal and subnational government. The estimates specifically cover the shared functions that subnational governments need to finance under a federalist regime. She said that while most the exclusive functions of the subnational government are already being financed currently through the

Local Government Code provisions concerning devolved services and the Internal Revenue Allotment, the shared functions under a federal form of government may prove to be costly. Shared powers in the context of subnational governments, Manasan added, include mostly the delivery of services, such as infrastructure, education and agriculture, to name a few which have since been financed nationally.

No funds for Cha-cha

Palace-backed plans to tinker with the 1987 Constitution to shift to a federal form of government, a move seen extending terms of incumbent Executive officials, as well as senators and congressmen during the transition, is not likely to prosper for lack of funds. Sen. Francis G. Escudero raised this scenario on Wednesday as he bucked talks of any referendum on Charter change (Cha-cha) simultaneous with the barangay elections on May 14 or even in the 2019 elections, pointing out that “there is no fund for any plebiscite for 2018.” “There is no way to hold that together with the 2018 elections because it [referendum to ratify Charter changes] does not come without a cost and, given the very little time to prepare for it, that plan is already down the drain,” Escudero said. The senator asserted that holding a national referendum to ratify proposed Charter changes “can only be funded through a request for supplemental budget that must conform with the Supreme Court ruling” on the use of savings. “Any budget request must be approved by the two chambers of Congress, and any realignment of fund must not exceed the original allocation for the item needing supplemental budget,” Escudero added. Continued on A2