Businessmirror january 26, 2018 by BusinessMirror

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Friday, January 26, 2018 Vol. 13 No. 107

Strides made in efforts to amend 1987 Charter M

By Butch Fernandez @butchfBM Elijah Felice E. Rosales @alyasjah & Jovee Marie N. dela Cruz @joveemarie

alacañang on Thursday released President Duterte’s Executive Order 10 naming the 19 members of the constitutional commission (Con-com), just as the leaders of Congress announced that both houses have agreed to set aside their differences and focus efforts on identifying specific amendments to the 1987 Charter.

The President handpicked former Chief Justice Reynato S. Puno as head of the panel that will review the 1987 Constitution in fulfillment of the Duterte administration’s bid to amend the highest law of the land and shift to federalism. Continued on A2

LOPEZ: “Special emphasis was given… on strengthening the trade on pharmaceuticals to ensure that Filipinos will have better, easier access to affordable, quality drugs.”

By Elijah Felice E. Rosales

@alyasjah

Continued on A12

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HOUSE TOURISM PANEL SEEKS HALT TO NEW CONSTRUCTIONS ON BORACAY SANS BLUEPRINT

PIMENTEL III: “We have decided to focus on the [Charter] revisions that have to be made rather than how these changes will be effected.”

Duterte nets $1.25-B new investments from India trip

ndian businessmen will bring in $1.25 billion worth of fresh investments to the country this year as part of the expanding trade relations between Manila and New Delhi under President Duterte. According to Trade Secretary Ramon M. Lopez, the government was able to secure investment commitments amounting to $1.25 billion, or P63.58 billion, from Indian businessmen after the Philippine delegation held negotiations with them. “We had a series of meetings with big and major conglomerates in India, especially those with special interests in operating in the Philippines and those with intention either to expand or to enter the Philippines in terms of investment,” he said in a news briefing on Thursday. He added these investments go beyond the country’s usual trading activities with India. A total of nine investment proposals— seven letters of intent and two

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The near-empty plenary hall of the House of Representatives shown in this file photo does not reflect the enthusiasm of lawmakers to amend the 1987 Constitution, with both houses of Congress setting aside their differences to focus efforts on the needed revisions to the 30-year-old Charter. nonoy lacza

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By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

HE House Committee on Tourism, chaired by Rep. Lucy Torres-Gomez of the First District of Leyte, is keen on recommending a moratorium on new constructions of resorts, hotels and other commercial establishments on Boracay Island. Tor res- Gomez revea led this in a text message to the BusinessMirror, after members of her committee—during Wednesday’s hearing regarding Boracay—brought up issues on possible overbuilding, in the absence of a master plan for the popular resort-island. “That point was raised several times in discussions among the members. After the hearing, I even brought the matter up with [Malay] Mayor [Ciceron] Cawaling and he replied by saying he has already engaged the services of Jun Palafox [to develop a master plan]. As far as the committee is concerned, part of our recommendations would most probably be a moratorium on new constructions,” the lawmaker said. The committee members

noted that Cawaling had failed to follow Executive Order (EO) 706 issued by then-President Gloria Macapagal-Arroyo “to suspend the issuance of building permits for any structure on Boracay Island pending the promulgation of a development plan” for Boracay, which was supposed to be drawn up by the Philippine Tourism Authority (PTA), the forerunner of the Tourism Infrastructure and Enterprise Zone Authority. EO 706 had also placed Boracay under the authority of the PTA. Torres-Gomez also said, “One of the most glaring recommendations [in its committee report] will be to cease the renewal of business permits of tourism enterprises that are in violation of proper solid-waste and sewerage-waste management. This will be controversial, but this is just the message that needs to be delivered to show commitment to protecting our natural resources that are also our tourism assets.” The Department of Tourism (DOT) has projected that 2.2 million tourists will visit Boracay this year, compared to last year’s 2 million visitors. Continued on A2

Massive infra buildup faces delay PCCI still getting inputs from as contractors now ‘maxed out’ members on federalism push By Cai U. Ordinario

@cuo_bm

he government’s “Build, Build, Build” infrastructure program could suffer delays as the construction sector is currently operating at full capacity, according to the Ateneo Center for Economic Research and Development (ACERD). In an interview, ACERD Director Alvin P. Ang told the BusinessMirror that more than financing the Build, Build, Build infrastructure

PESO exchange rates n US 51.0210

₧4.82 trillion

The amount the government is planning to spend for 4,095 infrastructure projects program, the current situation of the construction sector would not only delay projects, but also make them more expensive. “There is a capacity problem— the capacity of firms to do these projects,” Ang said. “It’s not that

there are no more contractors, but they are currently maxed out. That is what they are saying. Maybe that’s true because you can see it. You can try looking for a carpenter and you won’t find one.” Despite this, the ACERD remained optimistic about the country’s growth prospects this year. The ACERD projected full-year GDP expansion to average 6.4 percent to 6.7 percent in 2018. In the first quarter and third quarters, GDP growth could fall See “Infra,” A12

he country’s largest business group is not issuing a statement yet on the government’s push for federalism, as it intends to meet first with top legal experts to be able to make an informed choice on the issue. Philippine Chamber of Commerce and Industry (PCCI) President Maria Alegria Sibal-Limjoco also said the group is still in the process of surveying its members, especially those in the provinces who are expected to reap the benefits of a transition to federalism. “I cannot tell you exactly yet be-

cause we are getting the consensus [of everyone]. We have 130 chapters all over the Philippines,” Limjoco told the BusinessMirror. She also intends to hold a conference with top legal experts of the country, including former Chief Justices Hilario G. Davide Jr., Reynato S. Puno and Artemio V. Panganiban Jr., to explain to their members the possible changes in the Constitution. Through this, she said, the PCCI can make a position that is informed. “We don’t want to tell our members Continued on A12

n japan 0.4675 n UK 72.5008 n HK 6.5255 n CHINA 8.0234 n singapore 39.0129 n australia 41.1944 n EU 63.2660 n SAUDI arabia 13.6056

Source: BSP (25 January 2018 )

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A2 Friday, January 26, 2018

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Strides made in efforts to amend 1987 Charter Serving as members of the Concom are: ■ former Senate President Aquilino Q. Pimentel Jr. ■ former Bohol Gov. Victor S. de la Serna ■ priest Ranhilio C. Aquino ■ former University of Baguio President Virgilio C. Bautista ■ lawyer Rodolfo D. Robles ■ former Associate Justice Antonio Eduardo B. Nachura ■ former De La Salle University College of Liberal Arts Dean Julio C. Teehankee ■ former Associate Justice Bienvenido L. Reyes ■ former Mindanao State University-Tawi-Tawi Chancellor Eddie M. Alih ■ Local Government Development Foundation Executive Director Edmund S. Tayao ■ former Lanao del Sur Rep. Ali Pangalian M. Balindong ■ former Kalinga Rep. Laurence B. Wacnang ■ former Integrated Bar of the Philippines President Roan I. Libarios ■ Radio Mindanao Network founder and lawyer Reuben R. Canoy ■ former Philippine National Construction Corp. Chairman Arthur N. Aguilar ■ Philippine Chamber of Commerce and Industry-Catanduanes President and lawyer Susan U. Ordinario ■ peace negotiator Antonio B. Arellano ■ Moro National Liberation Front Implementing Chairman Randolph C. Parcasio

‘Cease-fire’ in Congress

The panel will be responsible for the assessment, consultation and review of the provisions of the Constitution. They will provide the government with an overview of what needs to be done in the provisions on political structure, local governance and economic policies. This developed as Senate President Aquilino L. Pimentel III and House Speaker Pantaleon D. Alvarez confirmed that Senate and House leaders have forged a cease-fire

between bickering members of the two chambers, agreeing to “momentarily set aside their differences and focus instead on a comprehensive, consultative review of the 1987 Constitution” to finalize specific constitutional amendments or revisions that will be proposed and presented to the people for ratification in a national plebiscite. Pimentel said the agreement was reached during his meeting on Wednesday with Alvarez, with Senate Majority Leader Vicente C. Sotto III and House Majority Leader Rodolfo C. Fariñas Sr. also in attendance. The Senate President added that lawmakers, likewise, firmed up a consensus to prioritize Charter changes seen to “improve people’s lives,” even as they tackle other pending bills on their agenda. “We have decided to focus on the [Charter] revisions that have to be made rather than how these changes will be effected,” Pimentel said, adding that differing legal views on the mode for amending the Constitution “should not distract us from the crux of this exercise: to make revisions to the Charter that will help improve our people’s lives.” The Senate President asserted that “it is abundantly clear that a review of our Charter is long overdue, as repeatedly stressed by the resource persons at the Senate hear ing tack ling constitutional amendments.” But he promptly clarified that the lawmakers would first need to determine what exact amendments or revisions will benefit the people. “After this we can tackle how we will go about enacting these amendments in a manner that maximizes citizen involvement and is consistent w it h the law.” Pimentel recalled that legal luminaries who appeared at the January 17 hearing of the Senate Committee on Constitutional Amendments and Revision of Codes acknowledged the need “to review and make changes to the over three decades-old Constitution.” For instance, he cited the testimony of retired Supreme Court

NORTHEAST MONSOON AFFECTING NORTHERN AND CENTRAL LUZON TAIL-END OF A COLD FRONT AFFECTING EASTERN SECTION OF SOUTHERN LUZON as of 5:00 pm - January 25, 2018

(SC) Justice Adolfo Azcuna, a member of the 1986 constitutional convention, who labeled the present Constitution as “the longest-running Constitution of the Philippines unamended; not a single comma has been changed. Should you amend or revise the Constitution? Yes, because it’s already 30 years.” He added that even Puno shared Azcuna’s sentiments, stressing that the world has changed since the Constitution was drafted 31 years ago. “I would like to think that it is time to give the 1987 Constitution a look-over, a no-nonsense review.”

‘Senate is collegial body’

Senate Minority Leader Franklin M. Drilon acknowledged that it is Pimentel’s “prerogative” to meet with Alvarez. But Drilon asserted that “the Senate is a collegial body,” noting that “there is no consensus yet on this issue among senators: the mode of amendment and related issues are being heard by the Senate Committee on Constitutional Amendments.” Drilon added: “It is best that we await the committee and the Senate itself, to decide on these issues.” For his part, Senate President Pro Tempore Ralph G. Recto viewed the truce as a positive development. “Talking will always be helpful and should be welcomed,” Recto said, even as Sen. Panfilo M. Lacson Sr. awaits a briefing on what transpired in Wednesday’s meeting between Senate and House leaders. “We have not been briefed yet,” Lacson said. “I just hope they were able to resolve the issues last night.” Sen. Francis N. Pangilinan, who chairs the Committee on Constitutional Amendments, said he was “certain my fellow senators would like to be briefed first by the leadership as to what was discussed in the meeting before we can commit to anything in this regard.” On the other hand, Sen. Francis G. Escudero pointed out that “the issue has always been the manner and process of doing Charter changes.” “But I guess, as the saying goes... let us agree on what we can agree

and set aside for tomorrow what we cannot agree upon.”

‘No contentious issues for now’

Alvarez, in an interview, also said congressional leaders have forged an agreement to shift their attention from the more contentious issues on Charter change to the general features of the federal government being envisioned. Pimentel said both chambers will determine first what exact amendments or revisions they will do before they jointly tackle “how we will go about enacting these amendments.” Once both chambers of Congress reach a consensus on the structure of the proposed federal government, Alvarez expects the rest of the discussions for Charter change between the House and the Senate to flow more smoothly. As much as possible, Alvarez said, the leadership of the two chambers would strive to reach an agreement on contentious issues to avert the need for the Supreme Court to intervene, which would only delay the process of Charter amendments. The House and the Senate have taken opposing views, including the issue on voting jointly during a constituent assembly (Con-ass) and other procedures of proposing amendments to the 1987 Constitution. Fariñas said congressional leaders have agreed to pursue the review of the 1987 Constitution by coming up with specific models and proposals in the form of actual constitutional provisions, which hopefully could muster the required number of votes for these to be presented to the people in a plebiscite. “Once we agree on [the proposed government structure and other Constitutional provisions], we will then discuss the manner of doing it,” Fariñas added. “[But now] we cannot come up with a timetable without first agreeing on the proposed government structure, other constitutional provisions and the manner of proposing such.”

Detailed discussion

According to Fariñas, the matter of proposing the amendment

to or revision of the Constitution is purely a legislative action, which will then be submitted to the people for approval or rejection. Alvarez said a more detailed discussion of proposed features of the new federal form of government would be discussed in subsequent meetings of the congressional leaders, which would likely take place next week. He added that, while the administration party—the Partido Demokratikong Pilipino—is advocating for a shift to a parliamentary form of government, it is not endorsing a particular structure of government. According to Alvarez, new government structure must be simpler than the current unitary form of government to enable it to act promptly and address the issues facing the nation. It is also necessary, according to Alvarez, to keep the new constitution for a federal government simple and easily understandable by the common citizens. Deputy Speaker Rep. Raneo Abu of Batangas said the meeting was a healthy sign in finding acceptable way to push Charter amendments. “The meeting [of Congress leadership] was a welcome development as far as pursuing federalism is concerned. We hope our Congress leaders will reach an agreement that is beneficial for the Filipino people,” Abu said.

Information drive

Meanwhile, Rep. Luis Raymund Villafuerte of Camarines Sur said an information drive should be done continuously, as Alvarez wants to have a new federal constitution drafted in time for ratification by the people in May next year, simultaneously with the elections. According to Villafuerte, the switch to a federal government is crucial to attracting private investments and accelerating growth in the countryside under the Duterte presidency, which, in turn, will help realize the government’s goal of reducing poverty incidence from 22 percent to 14 percent by 2022. Federalism alone, Villafuerte

said, could ensure full autonomy for provinces and cities in charting their respective growth paths, which, in turn, would foster healthy competition among these LGUs in wooing investments from both foreign and local business groups.

Dissenters

But Reps. Edgar Erice of Caloocan and Teddy Baguilat of Ifugao said the two chambers should resolve first the mode of voting before tackling all the proposed amendments to the 1987 Constitution. “It’s my opinion that the House and the Senate should resolve first the mode of voting, otherwise, even if we agree on good proposals, it will still be an exercise in futility,” Erice said. “I don’t think that senators will agree on a joint voting no matter how good is the proposal. If they agree on a joint voting, the Senate will be irrelevant. What if the House suddenly changes its mind on the agreed proposal and approved a different one? So, no agreement on the mode of voting, no Cha-cha,” he added. Baguilat also said that despite the “selected” meeting, there’s still no clear picture on what type of federalism Congress is going to tackle. “Now, after dinner of selected House and Senate leaders, a temporary cease-fire is in effect with no clear picture on what type of federalism we going to tackle, how both houses will vote on the proposed Charter changes and the timeline.” Rep. Edcel Lagman of Albay said, from the start, the shift to federalism is the main objective of Vharter change in both vhambers of Congress, so “there is no need to reach an agreement on this common agenda.” “The details on the shift would have to wait after the prior question on the manner of constituting Con-ass and voting therein are definitively threshed out,” he added. “It is the mode of effecting the shift which bedevils the Senate and House leaderships. Ultimately, the impasse would have to be resolved by the Supreme Court.”

House tourism panel seeks halt to new constructions on Boracay sans blueprint Continued from A1

In response to a lawmaker’s question during Wednesday’s hearing, Environment Secretary Roy A. Cimatu said his agency had the power to close establishments found violating environmental laws, “based on the recommendation of the Pollution Adjudication Board [PAE] under the Clean Water Act.” The PAB has five members, three of whom come from the agency and two from the private sector. But Cimatu’s Undersecretary for Administration, Finance, Human Resources, Information Systems, Legal, Legislative Affairs and Anti-Corruption Ernesto D. Adobo Jr. clarified that his agency may not be able to enforce the closure order, “once we are challenged in court,” and a temporary

restraining order is issued. For his part, Cawaling confirmed that he had a copy of the list of establishments found violating environmental laws prepared by the Department of Environment and Natural Resources (DENR). But he told Torres-Gomez that these establishments are allowed “to address the violations,” and will only be closed after failing to resolve the violations when reported for the third time. In her news statement after the hearing, Torres-Gomez said: “We all deserve to know the real score in Boracay: [1] toxic and untreated waste water continues to be dumped to the sea, as we speak, [2] drainage is so poor that a little flooding mixes with the sewerage and most sadly, [3] there has

been a failure in enforcing laws that protect our very valuable natural resource, and not to mention, avoid disease among tourists and locals alike.” She noted that the committee “had gained the solid support of Tourism Secretary Wanda [Corazon T.] Teo, who promised to bring up this urgent matter at the Cabinet level and to President Duterte himself. Members of the tourism committee diligently asked question after question, until we had painted a clearer picture of the most immediate problem—the failure to enforce prevailing laws.” The DOT and the DENR are currently preparing an executive order for President Duterte to oversee the development of Boracay Island and address its many issues and concerns.

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Editor: Vittorio V. Vitug • Friday, January 26, 2018 A3

OSG seeks criminal prosecution of Noynoy, 2 others, three years after ‘massacre’

By Joel R. San Juan

@jrsanjuan1573

T seems the wheels of justice grind too slow for the families and relatives of the 44 Special Action Force (SAF) commandos killed in the bloody Mamasapano encounter in Maguindanao three years ago.

A petition was filed on Thursday before the Supreme Court (SC) by the Office of the Solicitor General (OSG) that seeks to compel the Office of the Ombudsman to file 44 counts of reckless imprudence resulting in homicide against former President Benigno S. Aquino III, former Philippine National Police chief Alan Purisima and former SAF chief Getulio Napeñas in connection with the botched Mamasapano operation. It can be recalled that the Ombudsman only charged Aquino, Napeñas and Purisima one count each of graft and usurpation of official functions before the antigraft court Sandiganbayan and dismissed the reckless imprudence resulting in homicide complaint against them. The OSG also sought the issuance of a temporary restraining order and/or a writ of preliminary injunction to enjoin the arraignment of the three accused scheduled on February 15, 2018, before the Sandiganbayan. “While the mandate of the OSG is

to represent the government and its officers in this Honorable Court, the Court of Appeals and all other courts or tribunals in all civil actions and special proceedings in which the government or any officer, thereof, in his official capacity is a party, it is also incumbent upon it to present to the Court the position that will legally uphold the best interests of the government, although it may run counter to a client’s position, the Ombudsman’s in this case,” Solicitor General Jose Calida said in justifying its decision to go against the Ombudsman on the issue. The OSG was joined by the Volunteers Against Crime and Corruption (VACC) in seeking the annulment of the Ombudsman’s June 13, 2017, resolution insofar as it dismissed the complaint for reckless imprudence resulting in multiple homicide against Aquino and his coaccused. The OSG and VACC argued that the Ombudsman committed grave abuse of discretion in finding no

probable case to charge Aquino and his co-accused with reckless imprudence resulting in multiple homicide charges. They argued that the liability of the respondents over the Mamasapano carnage is grounded on the faulty planning and execution of Oplan Exodus, the code name for the ill-fated operation. The said operation targeted terrorist and bomb maker Zulkifli Abdhir, alias Marwan, a Malaysian bomb maker and Basit Usman. On January 25, 2015, the slain police commandos were deployed to Mamasapano to capture and neutralize thesaidterrorist.Marwanwaskilledin the process, but this resulted in a fierce encounter between the police commandos and Muslim rebels that surrounded the area. The petitioners said that Aquino has full knowledge of Oplan Exodus and his subsequent approval of the operation made him liable for negligence, “which was the direct proximate cause in the massacre of SAF 44.” “The act of public respondent Ombudsman in dismissing the case for reckless imprudence, however, is a wanton disregard of the sufficiency of evidence to form a belief that a crime for reckless imprudence has been committed. The Ombudsman should not have decided whether there is evidence beyond reasonable doubt of the guilt of the person charged,” the petitioners said. Likewise, the petitioners added, Purisima should be held liable for

reckless imprudence resulting in multiple homicide due to his lack of precaution. They charged that Purisima intentionally kept the operation from thenInterior Secretary Manuel Roxas II until the morning of January 25, 2015, when the SAF forces are already engaged with hostile forces. Likewise, they cited Purisima’s failure to observe his “time on target,” as coordination was done after the target and that he was remiss in giving intelligence inputs during the planning and execution of the operation. “The flawed planning and execution, of which Purisima was an active participant, doomed the operation from the very beginning, jeopardizing the lives of our police force,” the petitioners said. “This was the proximate cause, which in natural and continuous sequence, unbroken by any efficient intervening cause, produced the death of the police officers, and without which the result would not have occurred,” the petition read. On the other hand, the petitioners said Napeñas’s act of complying with the orders and directives of Purisima, who was then serving a suspension from his post, made him liable for 44 counts of reckless in mprudence resulting in multiple homicide charges. “The negligent acts on the part of respondent Napeñas in the planning, coordination and operation of Oplan Exodus inevitably set into

operation the circumstances,which resulted in the demise of the SAF 44,” the petition added. W hile the petition to hold Aquino, Purisima and Napeñas liable for the botched operation continues to hang in the air, the trial against the 88 respondents who were charged on March 18, 2016, before the Shariff Aguak Maguindanao Regional Trial Court (RTC) Branch 15 for 35 counts of direct assault with murder, also in connection with the incident, has yet to start. The information only covered the death of 35 members of the 55th SAF (blocking force) as the Department of Justice (DOJ) found no witnesses to testify with regard to the circumstances surrounding the death of the other nine members of the 84th Seaborn Company of SAF. The delay in the trial was being attributed to the pending request of the DOJ to transfer the case from Cotabato City to Metro Manila and the filing of several motions by the accused. In a case status update submitted to Justice Secretary Vitaliano N. Aguirre II, Senior Assistant State Prosecutor Rosannie Elepano-Balauag noted that Prosecutor Genera l Victor Sepu lveda w rote a letter to Chief Justice Maria Lourdes A. Sereno on January 12, 2017, requesting for the transfer of the trial of case to Metro Manila from the RTC in Shariff Aguak. On December 7, 2017, Acting Pros-

ecutorGeneralJorgeCatalanJr.wrote Sereno anew, through Court Administrator Jose Midas Marquez, reiterating the request to transfer the venue of the case. “To date, the Supreme Court has not resolved the prosecution’s request for the transfer of venue of the case from Cotabato City to Metro Manila,” the report stated. Despite this, Aguirre assured to bring justice despite to the casualties and families of the Mamasapano incident. “While mindful of the security concerns involved in the trial of the case, we will pursue the quest for justice with dogged determination and perseverance,” Aguirre said in a news statement. “While we await the resolution by the Supreme Court of our request for transfer of venue to Metro Manila, you have our solemn reassurance that wherever the trial maybe, your prosecutors will comply with their duties and responsibilities zealously,” he added. The PNP remembered on Thursday the heroism and sacrifice of the 44 police commandos who were slaughtered while on a counterterrorism operations against international terrorist and bomb maker Marwan. The event, which was graced by Deputy Director General Archie Francisco Gamboa, chief of the PNP directorial staff who represented Director General Ronald M. dela Rosa, was held at the memorial park of the SAF headquarters in Camp Bagong Diwa, Taguig City. With Rene Acosta

Economy

A4 Friday, January 26, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon

Senate panel seeks closer monitoring of petro products By Lenie Lectura

@llectura

he Senate Committee on Energy wants to put in place certain mechanisms to monitor the levels of supply of petroleum products, including the imposition of stricter penalties for late and incorrect inventory submissions of oil companies, as well as for the negligence on the part of government agencies to monitor price movements. Sen. Sherwin T. Gatchalian said the Department of Energy (DOE) admitted that some oil companies have yet to fully comply in submitting detailed reports on the exhaustion level of their old stocks both at the depot and station levels. The agency is still validating the accuracy of information they received. “I can foresee that we need to penalize oil companies if they don’t submit their inventories on time or if they give incomplete or inaccurate information about their stock levels. With or without the additional excise taxes from the TRAIN [Tax Reform for Acceleration and Inclusion] law, these companies are still duty-bound to submit their monthly inventories. And the DOE should be on top in ensuring their compliance,” he said. Under Section 14 of the oil-deregulation law (Republic Act 8479), the DOE is mandated to maintain a periodic schedule of present and future total inventory of petroleum products in the country. Because of this, oil companies are required to submit a monthly report that details their sales and consumption levels, actual and projected importations, and inventory of oil products. The lawmaker has called for a hearing following reports that some gasoline stations have started hiking their pump prices with their old stocks as an effect of the additional excise tax on petroleum being imposed under RA 10963 or the TRAIN.

I can foresee that we need to penalize oil companies if they don’t submit their inventories on time or if they give incomplete or inaccurate information about their stock levels. With or without the additional excise taxes from the TRAIN [Tax Reform for Acceleration and Inclusion] Law, these companies are still duty-bound to submit their monthly inventories. And the DOE should be on top in ensuring their compliance.” —Gatchalian Gatchalian is urging the DOE to speed up validation and analysis of the information it received and start investigating whether companies and stations took advantage of the situation through undue profiteering. “So, even if oil companies and gas stations already raise prices using their new supply in accordance to TRAIN, they would still have to be audited by the DOE and determine whether they unduly increased their prices without any clear basis, in which case, they will have to face the appropriate penalties and fines,” he said. The DOE is expecting about 90 percent of these companies to start adopting the increase based on TRAIN by the end of January. With the additional excise tax, unleaded gasoline would increase by about P2.97 per liter, while the price of diesel will surge by P2.80 per liter.

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Neda says RPRH implementation ‘cheapest’ means to beat poverty

By Cai U. Ordinario

@cuo_bm

he full implementation of the Responsible Parenthood and Reproductive Health (RPRH) law could bring down poverty rate to single and digit levels within President Duterte’s term, according to the National Economic Development Authority (Neda). Socioeconomic Planning Secretary Ernesto M. Pernia told reporters that the RPRH law remains the “cheapest” means to address poverty in the country. In a draft executive order (EO) to be presented in the next Cabinet meeting, Pernia said the Commission on Population (Popcom) estimates the country’s poverty rate could be brought down to 9 percent in the medium term. “If we just fully implement the

law, we can bring down [poverty to single digits] within the term of the President. [This means] all LGUs [local government units] will be implementing [the law and] not just certain regions. We need an EO for that,” Pernia said. He added the Popcom estimated the country’s current poverty incidence is around 19 percent, lower than the 21.6 percent estimated by the Philippine Statistics Authority in 2015.

Being able to bring down poverty incidence to below 10 percent will not be a major boost in the government’s target of a 14-percent poverty rate by 2022 under the Philippine Development Plan. A staunch supporter of the RPRH law even before he was appointed as socioeconomic planning secretary, Pernia believed one of the major reasons for high poverty incidence is the high number of children of poor families. Pernia noted many couples prefer to have only three children, but end up having five or six, doubling their desired number of offsprings. “Reducing poverty [through a] family-planning program is the cheapest way of reducing poverty. Its harder to reduce poverty by just macroeconomic growth,” he said. “It has really to be targeted, focused on the poor families who are having more children than they can afford to provide health services and tuition for,” he added. Last year Pernia said the RPRH

law will allow the government to reach its goal of slowing the country’s population growth rate. The Philippines’s population growth rate is around 1.7 percent. This means that if there are 104 million Filipinos, another 1.6 million will be added every year. But with the RPRH law, the population growth rate can slow to only 1.4 percent a year by 2022. While the government refuses to impose a policy on the number of children similar to the one-child policy of China, Pernia said the government encourages couples to have

the number of children they can support and raise. In 2008 Pernia led 27 University of the Philippines professors in a united stand in support of the reproductivehealth bill. In that position paper, the professors said poor families are especially burdened when they end up with more children than they desire. The authors added larger families make less investments per child, decreasing the chances of breaking the chain of intergenerational poverty.

If we just fully implement the law, we can bring down [poverty to single digits] within the term of the President. [This means] all LGUs will be implementing [the law and] not just certain regions. We need an EO for that.”—Pernia

House panel approves E-Nipas fund measure on second reading By Jonathan L. Mayuga @jonlmayuga

Wholesome green

Models pose in a prototype of an eight-passenger electronic multicab from Japan being introduced in the market, and on display at Intramuros, Manila. The introduction of the new vehicle seeks to boost the government’s green-energy campaign. NONIE REYES

Security of tenure bill remains imperfect—labor coalition By Samuel P. Medenilla @sam_medenilla

he country’s largest labor coalition on Thursday called on lawmakers to add more teeth to House Bill (HB) 6908, also known as the security of tenure bill. In a news statement, the Nagkaisa labor coalition said the new legislation is still imperfect since it still allows some forms of contractual labor. Nagkaisa, however, threw its support behind the legislation, which it said is already a step toward finally providing better protection to contractual workers. “The marked improvement in its provisions would surely address to a great deal widespread use of contractual labor in the country and, thus, strengthening workers’ security of tenure and the exercise of their right to organize and collectively bargain compared to the present laws and regulations pertaining to labor contracting,” Nagkaisa said. On Tuesday the House of Rep-

resentatives approved on second reading HB 6908. Among the salient points of the legislation is its prohibition of subcontracting of jobs already contracted out by principal employers and any form of fixedterm employment. It will imposes a fine, ranging from P30,000 to P5 million, on labor contractors who will violate its provisions. Nagkaisa thanked the House Committee on Labor and Employment and the representatives of the Trade Union Congress of the Philippines (TUCP) and Akbayan partylists, and the coauthors of HB 6908 for supporting the bill. The group is now urging the Lower House and the Senate to add stiffer penalties for employers who will violate the provisions of HB 6908. “We call on the Senate to introduce more prohibitive provisions in their version of bills pertaining to security of tenure, so as to further improve what HB 6908 has achieved,” Nagkaisa said.

Almost 2 million workers are expected to benefit from HB 6908 once it takes effect. In a text message, Federation of Free Workers, a member of Nagkaisa, said it will also hold rallies and forums in the coming weeks to gain public support for the bill. Aside from the legislative measures, members of Nagkaisa are also set to meet with President Duterte next month to discuss the new EO, which is expected to further restrict contractualization in the country. “Malacañang said [a] meeting is expected to take place on February 9,” Labor Secretary Silvestre H. Bello III, for his part, said. Associated Labor Union-TUCP, another Nagkaisa member, said they will urge the President to finally sign the new EO during the meeting. The meeting was originally scheduled in December 2017, but was later reset due to Duterte’s busy schedule that time. Nagkaisa is a coalition of 40 major labor groups in the country.

he House of Representatives’ Committee on Natural Resources has approved on second reading on Monday a bill seeking to strengthen the management of protected areas (PA) in the Philippines. An official of the Department of Environment and Natural Resources (DENR) said House Bill 6772, or the Expanded National Integrated Protected Areas System (E-Nipas), aims to institutionalize funding for the management of 94 PAs through the annual General Appropriations Act (GAA). Rep. Josephine Ramirez-Sato of the Lone District of Occidental Mindoro, a principal author of the consolidated E-Nipas bill, said in an earlier statement that once enacted into law, the proposal will be a big boost to the call for enhanced financing mechanism for the protection and conservation of the country’s rich biodiversity. Ramirez-Sato, who is championing the Biodiversity Finance Initiative (Biofin), in the Philippines in partnership with the United Nations Development Program, is particularly concerned of the wide financing gap on biodiversity financing. While there are 240 PAs in the Philippines, only 13 are backed with legislation. The measure, once passed into a law, will ensure increased budget allocation through the GAA, hence, boosting biodiversity-conservation efforts within the country’s PA. The additional 94 PAs will raise the total land area classified as National Park from the current 800,000 hectares to 3.5 million hectares. Meanwhile, several important amendments to the bill were subsequently approved by the members of the committee on natural resources, Director Theresa Mundita S. Lim of the DENR’s Biodiversity Management Bureau told the BusinessMirror in a telephone interview. Under a proposal introduced by Party-list Rep. Joselito L. Atienza of Buhay, a former DENR secretary, local officials can now be held administratively or criminally liable for failure to implement provisions

of E-Nipas. Another amendment, she said, to fast-track the development of renewable-energy (RE) projects, which will now be allowed within a PA, but outside the strict protection zone, subject to the requirements of the law that imposes an environmentalimpact assessment for environmentally-critical projects. “This differentiates it from nonrenewables like coal, which is not allowed within a protected area,” Lim said. The official lauded the former DENR secretary for being “very passionate” about imposing stricter penalties against erring LGUs. She said the former DENR chief was “very passionate” about imposing penalties against erring LGUs that he insisted on the body to ensure that disciplinary actions are meted out to erring local officials. “Perhaps, because of his experience when he was theDENR secretary, wherein some local officials who sit as members of the Protected Area Management Board are the ones violating the protected area law and he feels that it’s because they are not made accountable,” she said. According to Lim, the current Nipas law was not explicit on local government units’ responsibility. “That’s why he really insisted administrative and even criminal liability for LGUs that will enforce E-Nipas,” she added. The amendment to E-Nipas, Lim said, is a welcome development. “On the LGU accountability, we are particularly happy about it. We know it was a problem but could be too politically sensitive to push for. [Rep.] Atienza really raised it very forcefully and he said he will not allow if there will be no provision on LGU criminal liability,” she said. On the proposed amendment to allow RE projects within a PA, Lim said it will differentiate how renewables are treated compared now to nonrenewable-energy projects. Last, a proposed amendment to the bill respects existing occupation of LGUs within a PA, which, Lim said, is acceptable, noting that there are safeguards in place that in the development of an LGU’s Comprehensive Land Use Plans, due consideration shall be given to biodiversity conservation.

Agriculture/Commodities BusinessMirror

www.businessmirror.com.ph

Editor: Jennifer A. Ng • Friday, January 26, 2018

Lower sugar output seen in CY 2017-2018

hilippine raw-sugar production in crop year (CY) 2017-2018 may be lower than 2.38 million metric tons (MMT) due to unfavorable weather conditions, the Sugar Regulatory Administration (SRA) said on Thursday.

In Sugar Order (SO) 1-A it issued on January 25, the SRA said it revised its initial forecast after undertaking an assessment of production and consumption trend. SO 1-A amended SO 1, which the SRA issued in August 2017. “Due to unfavorable weather conditions, the total raw-sugar production for CY 2017-2018 is now estimated to be less than the initial projection of 2.38 MMT,” SO 1-A read. The government-owned and -controlled corporation attached to the Department of Agriculture (DA) also amended the sugar allocation for CY 2017-2018. The SRA reduced the allocation of sugar for the United States market (“A”) to 6 percent, from 10 percent. The allocation of world market sugar (“D”), or those for export to other countries, was also cut to 6 percent, from the previous 10 percent. The Philippines exports some

136,000 metric tons (MT) of sugar to the US annually under the socalled tariff-rate quota scheme. The TRQ allows countries, such as the Philippines, to ship sugar to the United States at a relatively lower tariff. The SR A also increased the sugar allocation for the domestic market to 93 percent, from the 80 percent indicated in the previous sugar order. The SRA pegged the domestic demand for sugar at 2.17 MMT. “The domestic market remains as the priority market for locally produced sugar, and it is of national interest that a comfortable buffer, or carry-over volume, of ‘B’ sugar during the end of season and for the start of the next crop year for stable supply and prices,” SO 1-A read. “This sugar order shall take effect immediately covering sugar production of week ending January 28 and subsequent week

endings of CY 2017-2018,” it added. The country’s raw-sugar production of 2.5 MMT in CY 2016-2017 is 11 percent higher than the previous crop year’s 2.238 MMT. The SRA attributed this to the expansion in areas planted with sugarcane. Sugar millers earlier said sugar output in CY 2016-2017 was the highest since the 1970s. Raw-sugar production as of December 17, according to SRA

data, has reached 516,165 MT, 5.47 percent higher than the 489,407 MT recorded in the same period last year. The latest data on sugar production for CY 2017-2018 showed that output in terms of 50-kilogram bags (LKg) have reached 10.323 million LKg, compared to the 9.788 million LKg recorded output a year ago. Of the tota l sugar out put

recorded as of December 17, 81.72 percent was produced by Negrosbased mi l lers, amounting to 421,821 MT. Executive Order 18 issued in May 1986 vests the SRA with the power to establish and maintain a balanced relationship between sugar production and the requirements of sugar to stabilize prices at levels “reasonably profitable to the producers and fair to consumers.”

Bloomberg

House to OK bill granting crop insurance to CARP farmers By Jovee Marie N. dela Cruz @joveemarie

he House of Representatives has recently approved on second reading a measure granting agrarian-reform beneficiaries full crop-insurance coverage for losses due to natural calamities and pest infestation. Voting through viva voce, lawmakers approved House Bill 6686. The lower house is expected to pass the measure on third and final reading next week. The bill, which will amend Republic Act 97000, or the Comprehensive A g ra r i a n R efor m

Program (CARP) Extension with Reforms, seeks to provide immediate financial assistance to affected agrarian-reform beneficiaries in the event of natural calamities. It also aims to mitigate the adverse impact of natural calamities by providing crop insurance to qualified farmers. The bill mandates full crop insurance coverage to farmer beneficiaries incurred losses due to typhoons, floods, drought and volcanic eruption. The measure seeks to include in the crop-insurance coverage agricultural losses triggered by plant

diseases, such as pathogens, bacteria, fungi and pest infestations caused by nematodes, insects, mites, snails and other parasites. The bill also aims to expand the access of qualified agrarianreform beneficiaries to credit. Under the bill, the Department of Agriculture (DA) and Department of Agrarian Reform (DAR) will coordinate the needed operational requirements to implement the insurance program. Also, the Land Bank of the Philippines and the DAR will submit to the DA the complete list of qualified beneficiaries and leaseholders to be included in the

Registry System for Basic Sectors in Agriculture for inclusion in the program. The initial funding will be charged against the General Appropriations Act funding for Philippine Crop Insurance Corp. For future, funding, projections of premium subsidy will have to be submitted by the PCIC board to the President for inclusion in the annual national budget. The bill indicated that the necessary implementing rules and regulations shall be provided by the President Agrarian Reform Council. For his part, House Deputy

Speaker Rep. Eric D. Singson of the Second District of Ilocos Sur said that, by granting full crop insurance to qualified CARP beneficiaries, food security and reasonable income for farmers may also be assured. “Despite the existence of the PCIC, only a small number of farmers avail [themselves] of crop insurance because of the premium that they are required to pay,” he said “Although half of the premium is subsidized by the government, the remaining 50 percent is still a burden to many of our farmers,” Singson added.

Restive Mayon Volcano destroys high-value crops in Albay

armers planting vegetables and fiber crops in Albay incurred losses amounting to P1.56 million due to the eruption of Mayon Volcano, the Department of Agriculture (DA) said in a report it released on Thursday. As of January 25 the DA said the volume of high-value crops destroyed in Albay has reached 42 metric tons (MT). The restive Mayon Volcano also affected 112 hectares of agricultural areas. “Damages and losses [for vegetables] amount to P1.08 million, affecting a total area of 13 hectares. Volume of losses amount to 35 MT,” the DA report read. The affected crops, the DA said, include ampalaya, baguio beans, eggplant, okra, pole sitao, sayote, sili, tomato and upo. The crops were all on their fruiting stage. “Damages and losses for fiber crops, particularly in abaca, amount to P480,000, affecting a total area of 99 hectares, with volume losses amounting to 6 MT,” the report read. The DA said it has designated new livestock-evacuation and-pooling areas where affected residents could bring their farm animals. The Philippine Institute of Volcanology and Seismology (Phivolcs) said in its January 25 bulletin that Mayon Volcano ejected lava again. “The lava fountains reached 400 meters to 500 meters high and generated ash plumes that reached 3 kilometers to 5 kilometers above the crater,” the Phivolcs bulletin read. The agency said Alert Level 4 remains in effect over Mayon Volcano. “The public is strongly advised to be vigilant and desist from entering the 8-kilometer-radius danger zone, and to be additionally vigilant against pyroclastic density currents, lahars and sediment-laden streamflows along channels draining the edifice.” The Phivolcs also urged civilaviation authorities to advise pilots to avoid flying close to the volcano’s summit, as ash from any sudden eruption can be hazardous to aircraft.

US wheat ‘at serious risk’ after Trump bailed on trade accord

E Daniel Acker/Bloomberg

xport demand for United States wheat is “at serious risk” as Canada and other nations move ahead on a new Pacific trade pact abandoned by President Donald J. Trump. That’s the dismal prognosis from US Wheat Associates and the National Association of Wheat Growers after Canada, one of the world’s biggest grain exporters, agreed to proceed on a Pacific trade accord with Mexico and nine other nations.

The revised Trans-Pacific Partnership (TPP) sends a “discouraging signal” to United States customers in Japan, which imports 3.1 million tons of wheat a year on average, US Wheat Associates said on Tuesday in a statement. The Asian nation’s import tariffs on Canadian and Australian grain may drop by about $65 a metric ton, putting US farmers at a “price disadvantage of more than $200 million per year,” the Arlington, Virginia-based group said.

“Withdrawing from TPP was shortsighted and unnecessary, and now US wheat farmers could take the hit,” Ben Conner, the group’s director of policy, said in the statement. Trump has also repeated threats to scrap the North American Free Trade Agreement as talks continue with Canada and Mexico. This week, the president imposed tariffs on solar-panel and washing-machine imports, stoking some concerns over retaliation in agriculture markets. Bloomberg News

Envoys&Expats

>>Sp

Business

A6 Friday, January 26, 2018 | www.businessmirror.com.ph

ENVOY MARKS AUSTRALIA DAY WITH EXCITEMENT’ FOR STRONGER TIES

Amanda Gorely Australian Ambassador

S I APPROACH my third Australia Day in the Philippines, our relationship has gone from strength to strength, culminating in the visit of Prime Minister Turnbull in November. His visit to the Philippines featured prominently in his launch of the 2017 Australian Foreign White Paper a few weeks later. The White Paper sets the strategic framework for Australian foreign policy for the next decade and underlines

how critical the security and prosperity of this region is to Australia. With the outbreak of the devas-

tating Marawi siege, the Australian Government immediately offered its support to the Philippine Government, recognising the threat of ISIS gaining a foothold in our region. Australian military aircraft relayed daily, real-time intelligence to the

PRESIDENT of the Philippines, Rodrigo Roa Duterte (right) accepts a ship cap as gift from Commander Joint Task Force 661.1 Captain Jonathan Earley, CSC, RAN (left), and Chief of Defence Force, Air Chief Marshal Mark Binskin, AC, during a visit to HMAS Adelaide while the ship is in Manila with HMAS Darwin for Indo Pacific Endeavour 2017.

HELPING BUILD COMMUNITIES TOGETHER: Women and men in Marawi City carrying their family kits distributed by the Philippine Red Cross as part of Australia’s humanitarian assistance to 1,000 families-affected by the Marawi conflict

JIM BOYA Filipino scientist with the Australian Centre for International Agricultural Research (ACIAR) talks with Adela Borres Radana, a mango farmer in Samal Island about her successful crop season. ACIAR ran a research project on mango farming on Samal island near Davao city, to support farmers like Adela with improved farming practices to increase their harvest. Australian Ambassador Amanda Gorely signed a trade agreement with Philippine Department of Agriculture Undersecretary Segfredo Serrano for the export of Philippine mangoes to Australia in October 2017. [Photo by Conor Ashleigh/ACIAR]

AFP, providing capability that General Guerrero told Prime Minister Turnbull was “game-changing” in the Armed Forces of the Philippines (AFP) overcoming the insurgents. I had the privilege of meeting some of the AFP veterans of the Marawi operation and paid tribute to their courage and resilience. Australian soldiers are providing intensive training to the AFP to enhance their urban warfare skills and are learning from the AFP’s experience in Marawi. I recently visited the training teams on a wet, windy day at the Ternate base in Cavite. I left for the comparative safety of my office, in no doubt about the sheer guts and de-

termination it takes to operate in a combat environment. The resilience of the Filipino people in the face of conflict and natural disasters has continued to hearten me. Natural disasters seem to have happened in unrelenting succession recently. Australia has provided relief to displaced and disaster-affected people in support of the efforts of the Philippine Government and NGOs. Over the Christmas period, the thoughts of many Australians turned to the Philippines as they watched footage of raging floodwaters in Mindanao and the Visayas. In this column last year, I mentioned how much I enjoyed my trav-

els around the country and I pledged to visit Palawan. I have since visited twice and, yes, Coron now takes pride of place as the most stunning location so far. Australia’s deep relationship with the Philippines has also taken me to places that are not yet on the Aussie tourist trail, but are equally fascinating. I visited Cotabato City to observe some of the education activities we have supported. I travelled to Zamboanga to meet two Australian patrol boats conducting joint activities with the Philippine Navy in the Sulu Sea. I accompanied Foreign Minister Bishop on her trip to Davao where she had a productive meeting with

pecial Feature

DAY 2018

sMirror

www.businessmirror.com.ph | Friday, January 26, 2018

H ‘OPTIMISM, WITH PHL

PRIME Minister Malcolm Turnbull meets members of the Armed Forces of the Philippines training with members of the Australian Defence Force on 13 November 2017. Australia provided surveillance support to Philippine troops at the height of armed fighting in Marawi.

EDUCATION AS PATHWAY TO PEACE: Australian Foreign Minister Julie Bishop MP visits student-beneficiaries of Australia’s Basic Education Assistance for Muslim Mindanao (BEAM-ARMM) program in Davao.

AUSTRALIAN Ambassador to the Philippines Amanda Gorely, National Historical Commission of the Philippines Chairman Rene Escalante and The Manila Hotel Chairman Basilio Yap unveiled a historical marker at the site of the first Consulate General of Australia in the Philippines on 22 May 2017.

the President in his hometown. I have sampled many interesting and delicious regional delicacies and even tried balut (no comment!). I have collected beautiful textiles distinctive to different parts of this country woven by very talented women. I have met a majestic Philippine eagle. As I head into the last twelve months of my posting, I feel a sense of optimism and excitement about where our relationship is heading. I look forward to the ASEAN Australia Leaders’ Summit in Sydney in March, for the first time in Australia. We will celebrate the second Philippine-Australia Friendship

Day – this year in Davao. We are organising a trade event in Clark for Australian companies, hosting a Women in Sport conference and will participate in the first Manila Biennale. Our defence and intelligence cooperation will continue to grow. If the mighty Mayon volcano permits, I will mark Australia Day in Legazpi exploring this historically fascinating region. Trips to Batanes, Northern Luzon, El Nido and Dumaguete are also in the pipeline. I am impatient to pack as much as possible into the time I have left in this culturally rich and environmentally diverse country. Happy Australia Day and Mabuhay!

AUSTRALIA GLOBAL ALUMNI

are making a difference in their chosen field, from science to public service. Outstanding Australia-educated Filipinos were honoured at the inaugural Australian Excellence Alumni Awards. (L-R) Dr Roy Ponce, recipient of the Excellence and Innovation Award, Dr Maria Corazon de Ungria, Alumni of the Year Awardee, and Mr. Milton Medina, recipient of the Young Achievers Award. Nominations for the 2018 round opens this January. Visit http://philippines. embassy.gov.au for details.

The World BusinessMirror

Friday, January 26, 2018

briefs Trump: Would ‘love to’ face Mueller questions–under oath

WASHINGTON—President Donald J. Trump declared late on Wednesday he’s “looking forward” to being questioned—under oath—in the special counsel’s probe of Russian election interference and possible Trump obstruction in the firing of the Federal Bureau of Investigation (FBI) director. Trump said he would be willing to answer questions under oath in the interview, which special counsel Robert Mueller has been seeking but which White House officials had not previously confirmed the president would grant. “I’m looking forward to it, actually,” Trump said when asked by reporters at the White House. As for timing, he said, “I guess they’re talking about two or three weeks, but I’d love to do it.” He said, as he has repeatedly, that “there’s no collusion whatsoever” with the Russians, and he added, “There’s no obstruction whatsoever.” AP

Undeterred by failed appeal, Brazil’s da Silva vows to run

PORTO ALEGRE, Brazil—Former President Luiz Inacio Lula da Silva is charging ahead with his plans to run for Brazil’s presidency again, even after an appeals court unanimously upheld a graft conviction against him and added years to his prison sentence. Da Silva, who was wildly popular as president in 2003-2010 and has been leading the polls for October’s presidential election, was defiant in the face of Wednesday’s court ruling. The case alleged that while president, da Silva traded favors in return for the promise of a beachfront apartment. “I am not worried about whether I will be a candidate for president or not,” da Silva told a crowd of supporters in São Paulo on Wednesday night. “I want [the judges and prosecutors] to ask for forgiveness for the quantity of lies they told about me.” AP

Not safe yet for Rohingya return to Myanmar–U.N.

KUTUPALONG, Bangladesh—Attacks on Rohingya Muslims appear to be continuing in Myanmar and it is not yet safe for the hundreds of thousands of Rohingya refugees living in Bangladesh to begin returning to their homes, a high-ranking United Nations official said. Many Rohingya want to return eventually to their villages in Myanmar, said Justin Forsyth, United Nations Children’s Fund deputy executive director, during a Wednesday visit to the immense Kutupalong refugee camp. But they fear for their safety if they were to go back now. “The situation isn’t safe for the returns to begin,” he said. “I spoke to one young woman, who had been on the phone to her aunt, in Rakhine in Myanmar. And they were attacking villages even today.” AP

U.S. says 4 Americans killed, 2 wounded in Kabul hotel attack

WASHINGTON—The United States says four American citizens were killed and two others were wounded in the Taliban attack over the weekend on the Intercontinental Hotel in Kabul, Afghanistan. State Department Spokesman Heather Nauert says the US condemns the attack and offers condolences to the family and friends of those killed. Twenty-two people—including 14 foreigners—were killed in the 13-hour siege of the hotel in the Afghan capital. AP

Turkey vows to widen offensive vs. Syrian Kurds

ANKARA, Turkey—Turkey‘s president on Wednesday vowed to expand Ankara‘s operation against Kurdish forces in northern Syria beyond the enclave of Afrin and toward the town of Manbij, which would bring Turkish troops and their Syrian allies closer to US forces supporting the Kurds against the Islamic State group. President Donald J. Trump, in a phone call with Turkish President Recep Tayyip Erdogan, warned Turkey against taking steps that could risk military conflict between US and Turkish forces in Syria and urged the Turkish leader to limit the operation and civilian casualties. The White House said Trump expressed concerns about the growing violence and told Erdogan it jeopardizes shared US-Turkish goals in Syria and expressed concern about „destructive and false rhetoric coming from Turkey.“ It did not elaborate on that rhetoric. AP

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

As US trumpets ‘America First,’ rest of the world is moving on

ASHINGTON—President Donald J. Trump is arriving at the World Economic Forum (WEF) in Davos, Switzerland, to explain his “America First” approach at a moment when the world is moving ahead with a trade agenda that no longer revolves around the United States.

The world marked a turning point in global trade on Tuesday, when 11 countries agreed to join the Trans-Pacific Partnership (TPP), announcing they had finalized the pact and expected to sign a deal on March 8 in Chile. It was a remarkable moment for a beleaguered agreement that was conceived and constructed by the United States, then abandoned by Washington when Trump took office last year. As the world’s largest economy and architect of many international organizations and treaties, the United States remains an indispensable partner. But as the globa l economy gains strength, Europe and countries, including Japan and China, are forging ahead with deals that do not include the US. Thirty-five new bilateral and regional trade pacts are under consideration around the world, according to the World Trade Organization (WTO). The United States is party to just one of them, with the European Union, and that negotiation has gone dormant.

‘The world moves on without US’

The United States is also threatening to withdraw from one of its existing multilateral agreements—the North American Free Trade Agreement (Nafta) with Mexico and Canada—if it cannot be renegotiated in the US’s favor. “Maybe there was some sort of presumption on the part of the president and his team that if the US said stop, this process would come to a halt,” said Phil Levy, a senior fellow at the Chicago Council on Global Affairs and an economist in the George W. Bush administration. “What this shows is that’s not true. The world just moves on without us.” L a st Ju ly Japa n si g ne d a w ide-rang ing new trade dea l w ith the European Union—a step Japanese Prime Minister Shinzo Abe, referred to as hoisting “the f lag of free trade high amid protectionist trends.” The EU pushed ahead with a major update to its agreement with Mexico, while China pursued a pan-Asian agreement, among

other deals. Business interests in the United States are watching with alarm as other countries strike agreements that exclude US exporters. For example, ranchers in Canada and Australia will be able to sell beef at lower prices in Japan than their US competitors, who will be subject to higher tariffs because the United States is not party to the TPP. Kent Bacus, the director of international trade and market access for the National Cattlemen’s Beef Association, said on Tuesday that the United States’ withdrawal was “a missed opportunity for the United States to gain greater access to some of the world’s most vibrant and growing markets.” “This one was really about America’s role in the Pacific, and I think pulling out was a signal we’re not as interested,” said William Reinsch, the Scholl chairman in International Business at the Center for Strategic and International Studies and a former Clinton administration official. “The president can say whatever he wants, but the way this is being perceived is as a pullback of American influence.” T he Trump administration has pushed back against claims that the America First doctrine is isolationist and that it is ceding global leadership. While advisers have continued to criticize global institutions, they insist their goal is to improve, not destroy, them.

‘America open for business’

“We’re going to the World Economic Forum to share President Trump’s economic story and to tell the world that America is open for business,” Gary D. Cohn, who heads the White House National Economic Council, said in a briefing on Tuesday. “America First is not America alone.” Trump and his advisers say that the United States will be pushing ahead with new trade deals—ones that will ultimately be better for US companies and their workers. “We’ll be doing other trade deals,” Trump said on Monday as he signed an order imposing tariffs on imports of washing machines and solar modules. “We’re in the

Protesters hold posters with President Donald J. Trump’s portrait saying “You’re not welcome” during the demonstration against the upcoming visit of the US president at the World Economic Forum in Davos, in the streets of Zurich, Switzerland, on January 23. Walter Bieri/Keystone via AP

America First is not America alone”.—Cohn process of negotiating with other countries, also, all of which have treated us very unfairly.” Yet, the willingness of countries to engage with the United States is unclear. For many, a relationship with the Trump administration has been a delicate dance: They do not want to risk access to the US market, or raise the ire of the US president. But global leaders are warily watching the Trump administration’s take-it-or-leave-it approach to renegotiating its trade pacts with Canada, Mexico and South Korea. They have seen Trump scrap the global climate-change accord, withdraw the United States from the UN compact on migration and refugees, and criticize global institutions that the US largely designed, like the United Nations, the World Trade Organization and the North Atlantic Treaty Organization.

Merkel: Protectionism not the answer

In Davos, at a forum long considered the center for globalization, the administration’s America First message has not been entirely well received. On Wednesday comments by Wilbur Ross, the commerce secretary, that US troops were “coming to the ramparts” in what he called a continuing global trade war prompted blowback from other state leaders. Chancellor Angela Merkel of

Germany warned on Wednesday that “protectionism was not the answer” and called right-wing populism a “poison,” in a speech largely seen as a rebuttal to Trump before his expected speech on Friday. “We think that shutting ourselves off, isolating ourselves, will not lead us into a good future,” Merkel said. Canada has also contrasted its approach with that of the United States. Chrystia Freeland, the Canadian foreign minister, said she was worried about movements around the world that have blamed trade and immigration for the hollowing out of the middle class, and that Canada was “doubling down” on its openness to trade and immigrants. “It’s partly a statement about our values. But we also think it is a really great economic benefit to us, as well,” she said.

Unclear which countries US will court

So far, it is unclear which countries the United States could be courting to create new trade deals. Britain has expressed interest in a bilateral deal with the US, but talks could not begin until it finishes extricating itself from the European Union, which does not look likely to be resolved soon. Japan, the preferred partner for many US businesses, appears to have spurned the United States’s offer to forge a trade deal one-onone, after Trump pulled the US out of the TPP.

And China has tried to position itself as a global leader—a sharp change from the early-1990s, when the leader at the time, Deng Xiaoping, cautioned his countrymen to “hide your strength and bide your time.”

China’s own international order

China has set about building its own vision of an international order, including an Asian investment bank to rival the World Bank, and its global infrastructure project, One Belt One Road. At last year’s meeting in Davos, President Xi Jinping of China portrayed his country as a global leader and vigorously defended free trade—a position some considered ironic for a country that maintains sharp controls on many industries. The Trump administration’s more aggressive stance toward allies and adversaries may shift this balance in China’s favor. At an event on Tuesday in Washington, Juan Gabriel Valdés, the Chilean ambassador to the United States, contrasted Chile’s now warm relationship with China with the United States’s more combative stance on trade, especially in its negotiations over Nafta. “In the history of the region, we have never had a partner that is so willing, so open, so dedicated to listen to what are our needs than what we have now with China,” Valdés said. “The United States continues to be, and will probably be in the next 10, 20 years, the main partner of the Latin American region,” he said. “But change is there. It’s written on the wall, if this continues like it is.” New York Times News Service

Trump open to a path to citizenship for ‘Dreamers’ W

ASHINGTON—President Donald J. Trump on Wednesday said he is open to a path to citizenship after 10 to 12 years for hundreds of thousands of immigrants brought illegally to the United States as children, days after rejecting a bipartisan plan with that as its centerpiece. Trump once again seemed to undercut his administration’s message, telling reporters at the White House that he would allow the young immigrants, known as Dreamers, to “morph into” citizens over a period of time. The reporters had gathered for a briefing from a senior official detailing the administration’s plans to stick to a restrictive immigration agenda when the president dropped in unprompted, shortly before departing for Davos, Switzerland, pre-empting the official.

“Over a period of 10 to 12 years,” Trump said, “somebody does a great job, they work hard—that gives incentive to do a great job. Whatever they’re doing, if they do a great job, I think it’s a nice thing to have the incentive of, after a period of years, being able to become a citizen.” In September 2017 Trump ended an Obama-era program, called Deferred Action for Childhood Arrivals (Daca), saying it was an illegal assertion of executive authority by his predecessor. But even as Trump’s actions threatened nearly 700,000 young immigrants with deportation when the program expires on March 5, he has urged Congress to find a permanent solution that could allow them to live and work in the country legally. In addition to suggesting a pathway to citizenship for the Dreamers, Trump said

he would request $25 billion to build a wall along the United States border with Mexico, though he said he would build it “way under budget.” He added that his plan would include a request for $5 billion for additional security measures along the border. The fate of the Dreamers is at the center of a furious stalemate in Congress, where Republicans and Democrats are struggling to find a compromise. Trump’s positions have been difficult to discern—vacillating between his expressions of sympathy for the Daca recipients and his hard-line demands for a crackdown on unauthorized immigrants. Trump campaigned for the presidency with nativist rhetoric that assailed the threat from outsiders, especially Mexicans and

Muslims. As president, he quickly tried to impose a travel ban on predominantly Muslim countries and gave immigration agents more authority to round up unauthorized immigrants. But he also once said that he wanted “a bill of love” to address the fate of the Daca recipients. Sen. Tom Cotton, Republican-Arkansas, who is a hard-line conser vative on immigration issues, reiterated that any deal on immigration would have to include Republican demands for tougher enforcement on immigration, saying on Twitter that “it must be done responsibly, guaranteeing a secure & lawful border & ending chain migration, to mitigate the negative side effects of codifying DACA.” Trump’s remarks drew support from Sen. Lindsey Graham, Republican-South Carolina,

who has in recent weeks been at the forefront of efforts to reach an immigration deal. Graham had been one of the architects of the bipartisan plan rejected by Trump. “President Trump’s support for a pathway to citizenship will help us get strong border security measures as we work to modernize a broken immigration system,” Graham said in a statement. “Finally with this statement we are on track to solving the immigration problem which is the political key to rebuilding our military.” Sen. Richard J. Durbin, Democrat-Illinois, who in 2001 first sponsored the DREAM Act to provide legal status to the young immigrants, also praised the president. “The president is headed in the right direction here,” Durbin wrote Wednesday evening on Twitter. New York Times News Service

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Editor: Jun B. Vallecera • Friday, January 26, 2018 A9

More Filipinos kept their tax commitments in 2017

he link between actual and potential tax collection, also known as the tax effort, significantly improved in 2017 to 11.26 percent, from only 10.8 percent the year before, the Bureau of Internal Revenue (BIR) said on Thursday.

The improvement, the BIR said, was attributed to strengthened tax compliance during the year. According to BIR Commissioner Caesar R. Dulay, the tax effort to GDP last year would not have reached 11.26 percent had it not been for the cooperation and compliance of taxpayers. “For the past five years, the [tax effort] average was 10.5 to 10.9 percent. But, in 2017, we hit a tax effort of 11.26 percent,

thanks to the cooperation of taxpayers. We sought the help of taxpayers, and we’re very happy that they responded. We have a very good tax ratio, and we have good [GDP] growth rate for 2017,” Dulay said at the 2018 Tax Management Association of the Philippines induction of officers on Thursday. The tax-collection performance of the BIR improved to P1.829 trillion in 2017, or 12.92 percent more than its haul of only

P1.567 trillion in 2016. “We have the growth rate [in terms of collection] of 12.92 percent compared to the previous year. For the past five years, the average growth rate was anywhere from 9.31 to 9.71 percent. They say it was a pretty good collection year,” Dulay said. For this year, the BIR is tasked to collect at least P2.039 trillion, or 11.4 percent more than in 2017. Dulay is optimistic the reforms contained in the Tax Reform for Acceleration and Inclusion (TRAIN) Act will further help the agency achieve its collection target of P2.039 trillion this year. The TRAIN reduced the personal-income tax rate from 32 percent to 25 percent and incorporated offsetting measures, such as the increase on fuel and automobile excise taxes, among others. President Duterte signed the TRAIN into law on December 19, 2017. Rea Cu

Water-supply security plan for Manila revealed

he Metropolitan Waterworks and Sewerage System (MWSS) has bared a 10-year development plan addressing key issues on water-infrastructure development, resource-management protection, sewerage and sanitation, water-distribution efficiency attuned to President Duterte’s “Build, Build, Build” development policy. “We shall pursue major flagship projects, like the Laiban, Kaliwa at Kanan Dam projects, which will ensure adequate, steady and sustainable water supply for our consumers in Metro Manila and adjoining provinces in the next 25 to 50 years,” MWSS

Administrator Reynaldo V. Velasco said. The MWSS chief added the Angat Dam, which is the major source of water for Metro Manila and its environs accounting for 95.6-percent supply, is being secured under the Angat Dam and Dike Strengthening Project. “To ensure its stability and safety to withstand the potential risk posed by possible seismic activity associated with the West Valley Fault, the structural road map for securing and optimizing the Angat Dam has been defined, and it is projected for completion in the next two years,” Velasco said.

Among the major water projects now being pursued by MWSS include the construction of the Kaliwa Dam in Barangay Pagsangahan, General Nakar, Quezon, and Barangay Magsaysay, Infanta, Quezon; the Kaliwa Dam Project, which has a 600-millionliter-per-day capacity; and the water-supply tunnel, which has a 2,400-MLD capacity. “The proposed New Centennial Water Source Project is set to provide water security, reliability and additional supply for Metro Manila, planned to be site specific, zeroing in on the Kaliwa-Kanan-Agos River Basin as an alternative water source,” Velasco said.

EMV-compliant BDO debit cards soon completed

y February 1 BDO Unibank would have completed the shift to the EMV standard for its debit cardholders. As a result, the magnetic stripe currently found at the back of old automated teller machine debit cards will be disabled, and clients will no longer be able to transact on any ATM or point-of-sale (PoS) terminal. Banco de Oro has been advising clients to get their EMV debit cards since these became available in the third quarter of 2016. For those who still have the magnetic stripe card, they are encouraged to have them

replaced at the various BDO branches on or before January 31. BDO has already made its ATMs nationwide EMV-certified last year. PoS terminals found in supermarkets, restaurants, shopping malls and other establishments are converting into EMV, as well. The regulatory requirement to shift to EMV, or the Europay, Mastercard and Visa standard, is part of the banking industry’s move to provide clients wider protection against fraudulent activities usually carried out in electronic banking channels.

Case clippings

By Justice S J Ranada Jr.

AGRARIAN REFORM–“landowner” under PD 27 From the wording of Presidential Decree (PD) 27, the “landowner” referred to pertains to a person identified to be the owner of tenanted rice or corn land as of October 21, 1972. This is only logical considering that tenanted rice and corn lands were deemed acquired by the government in favor of the tenant-farmers as of the date of the issuance of PD 21, and any transfer of ownership thereof is void. Digan v. Malines 06 Dec. 2017

GR 183004 Martires, J

A10 Friday, January 26, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

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editorial

‘It’s outrageous’

here should be a smartphone application or computer program, called “Outrageous.” You first enter the person, place, event or issue that has you upset. Everyone has a right to be agitated, depressed, furious, indignant, irate, offended and even outraged at one time or another. But we need to clearly identify the focus of our concern.

Next, on a scale of 1 to 5 with 5 being the highest, we input the degree of our “outrage.” Are we just a little “annoyed” or are we on a “Godzilla destroys Tokyo” kind of anger? Finally, since in this day and age, opinions are eventually spread to the deepest corner of the Internet universe, again 1 to 5, how important is our outrage about our concern in the bigger picture? The problem is that too many matters from too many people are characterized as being so important as to determine the future and fate of the human race. If a topic is that important, then, of course, it deserves a “5” on the Outrage scale. Can we really say, with all honesty, that so much of what we see on the physical and digital “front page” is deserving of “5/5” Outrage? Recently, the front page has included the “Mocha Uson award,” the “James Deakin picture,” and the “Isabelle Duterte party.” If you are fortunate enough not to fully understand how these fit into a discussion of Outrage, you are probably a better person for that fact. But an Internet search of each of these will result in a 100 or more news references. Based on that, these may be defining issues of our time—or at least for the past week or so. Usually misattributed to Joseph Stalin is the idea that “a single death is a tragedy; a million deaths, a statistic.” The concept is that, we can wrap our emotional and intellectual heads around the death of one person, but millions is beyond our capacity to understand. However, there is another aspect. It is easy to possibly prevent, help avoid in the future, or find justice for the death of one person. To consider doing that for millions would require commitment and hard work, both of which is often to be avoided at all costs. Granted a “5/5” is warranted by some concerns and immediately comes to mind the death by hazing that never seems to go away. Government discussions about a change in the form of government deserve great attention and serious public engagement, even if “outrage” is, perhaps, too strong an emotion. Yet, when thousands of our fellow Filipinos in Albay are living in day-to-day fear and miserable conditions having been uprooted from their homes, where is the priority? A few days ago, Presidential Communications Operations Office Assistant Secretary Mocha Uson made a mistake and said Mount Mayon is in Naga, instead of Albay. She apologized and corrected her mistake. But in the next 24 hours, nearly 30,000 tweets were posted on Twitter about her error. To illustrate what we are talking about, if each of those tweets had been accompanied by a P50 donation to the Philippine Red Cross, we would have raised P1.5 million for those affected by Mount Mayon’s eruption. But talk is easy about a relatively unimportant concern—in comparison to a critical issue that actually affects people’s lives— and cheaper than putting actual cash on the table. That we see this happening with more and more frequency should truly be a reason for our outrage. Since 2005

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A puzzling warning, an unresolved question James Jimenez

spox

arlier this week, a legislator saw fit to “warn” the Commission on Elections (Comelec) against precipitately going forward with a plebiscite on Charter change. Puzzling. And it raises interesting questions. Why warn the Comelec? But, more important, from the voter education point of view, does the Comelec call for a plebiscite on a constitutional amendment or revision on its own initiative? Can it even do that? Apparently, it can—but in only one instance. Let’s review the conditions under which the Comelec can actually move into a plebiscite for an amendment or revision of the Charter, under all three modes provided for by the Constitution: by constituent assembly, by constitutional convention and by people’s initiative. Since there is a wealth of jurisprudence on the third mode, let’s start with that and work our way up the list from there. According to the Supreme Court in Santiago v. Commission on Elections (GR 127325, March 19, 1997) “the only participation of the Comelec or its personnel before the filing of [a completed and Constitutionally compliant people’s initiative petition] are [1] to prescribe the form of the petition; [2] to issue through its Election Records and Statistics Office a certificate on the total number of registered voters in each legislative district; [3] to assist, through its

election registrars, in the establishment of signature stations; and [4] to verify, through its election registrars, the signatures on the basis of the registry list of voters, voters affidavits and voters identification cards used in the immediately preceding election.” A people’s initiative petition is deemed completed and Constitutionally compliant when (1) it is signed by at least 12 percent of the total number of registered voters of which every legislative district is represented by at least 3 percent of the registered voters therein; (2) when it has, for its subject mere amendment of the Constitution and not its revision; and (3) when the petition, on its face, shows the initiative was “directly proposed by the people through initiative upon a petition;” in Lambino v. Comelec (GR 174153, 25 October 2006), the Court intimated that this “proof” could have been achieved if the full text of the

proposals had been attached to the signature sheets. If, subsequently, the Comelec issues a certification on the sufficiency of the people’s initiative petition, then, and only then, can a plebiscite be called for the purpose of ratification by the electorate. As Section 4, Article XVII of the Constitution says: “Any amendment [by people’s initiative] under Section 2 hereof shall be valid when ratified by a majority of the votes cast in a plebiscite, which shall be held not earlier than 60 days nor later than 90 days after the certification by the Commission on Elections of the sufficiency of the petition.” So there it is. The Comelec can trigger a plebiscite, but only for a constitutional amendment and only if the amendment is via a people’s initiative. Realistically speaking, however, the exercise of even that Constitutionally granted “authority” would most likely be attended by so many checks and balances—appeals and whatnot—that, in the end, it would be quite a stretch to say that the Comelec approved the holding of a plebiscite on its own. As for the other two modes—incidentally the only two modes being considered this time around— the Comelec’s role is much reduced. Where under people’s initiative, the plebiscite would be triggered by an explicit act of the Comelec, under either a constitutional convention or a constituent assembly, the trigger will have to be pulled by another. But who? The Constitution only provides that “any amendment to, or revision of, this Constitution [by either

Call for donations for residents of Albay affected by Mayon eruption Rev. Fr. Antonio Cecilio T. Pascual

SERVANT LEADER

Y dear brothers and sisters in Christ, As we pray for our priests and consecrated persons this Year of the Clergy and Consecrated Persons, let us not also forget our kababayan, whose life are in great danger due to the possible hazardous eruption of Mayon Volcano in the province of Albay.

We in Caritas Manila and Radio Veritas 846 are appealing for prayers for Divine protection and to help alleviate the sufferings through donations in cash and in kind for the relief and rehabilitation needs of our kababayan in the province of Albay affected by the possible hazardous

eruption of Mayon Volcano. Parishes from the Diocese of Albay activated their Parish Disaster Response Committees (PaDReCom) and utilized PaDReFund. Initial actions are the setting up of soup kitchens and offering church facilities to house most vulnerable

evacuees, such as pregnant and lactating mothers, persons with disabilities and the elderly. Parishes also reactivated Harong program for disaster emergencies, such as volunteer shelters in private homes to help decongest evacuation centers and prioritize the needs of most vulnerable displaced population. Rev. Fr. Rex Paul Arjona from the Social Action Center (SAC) of Diocese of Legazpi appeals to the faithful to provide the immediate needs of the evacuees. “Most evacuees are farmers who live and work within the 6-kilometer radius permanent danger zone. Their lives are disrupted and their means of livelihood suddenly became inaccessible. That is why they need all the help we could give,” Arjona said. As of 8 a.m. of January 20, 2018, a total of 7,252 families and 27,643 individuals in 32 barangays have

constitutional convention or constituent assembly] under Section 1 hereof shall be valid when ratified by a majority of the votes cast in a plebiscite, which shall be held not earlier than 60 days nor later than 90 days after the approval of such amendment or revision. Insofar as a constitutional convention goes, the approval will have to come from the convention itself. This mirrors the trajectory followed by the 1987 Constitution. The draft constitution was passed by a 44-2 vote of the members of the convention that drafted it, on October 12, 1986, and was presented to then-President Corazon C. Aquino after three days. As provided for in Section 5, Article V of the 1986 [Freedom] Constitution, the president fixed the plebiscite date, February 2, 1987, where the electorate eventually ratified the new charter by an affirmative vote of 76.3 percent. But what about an amendment of revision by way of constituent assembly—who approves the proposals so as to initiate the plebiscite? Unfortunately, there doesn’t seem to be any agreement on this question. While the Constitution makes reference to a vote by Congress of “three-fourths of all its members,” the very sparseness of that language leaves it open to interpretation. At this point, the only thing we know for sure is that, whoever finally gets to approve the proposed amendment or revision for submission to the public in a plebiscite, it certainly won’t be the Comelec, well-meaning warnings notwithstanding.

been evacuated. This does not include the evacuees from Legazpi City who had been decamped days ago, but had since returned to evacuation centers. Immediate needs identified per monitoring by SAC Legazpi and Parish Commissions on Social Concerns are nonfood items, such as sleeping mats, mosquito nets, blankets, face masks, hygiene kits, firewood, as well as food, water and additional toilets and communal kitchens. Donations can be made online via http://ushare.unionbankph.com/ caritas/ or by bank deposit: Account Name: Caritas Manila Banco De Oro—Savings Account: 5600-45905 Bank of the Philippine Islands— Savings Account: 3063-5357-01 Metrobank—Savings Account: 175-3-175069543. See “Pascual,” A11

Opinion BusinessMirror

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TRAIN law: Estate tax Degendering a volcano and possible implications Tito Genova Valiente

annotations

Atty. Jose Emilio M. Teves

Tax Law for Business

reviously, the National Internal Revenue Code provided a table of rates that the estate of a decedent would pay if the value of the net estate met a certain threshold. To get the value of the net estate, we would subtract the deductions allowed by law from the gross value of the estate. For instance, if the net taxable estate’s value was over P10 million, it would pay the amount of P1,215,000 plus an additional rate of 20 percent for the excess of P10 million. Thus, if the value of net estate is P11 million, the estate shall pay P1,215,000. An additional P200,000 shall be imposed, which is the 20 percent of the excess of P10 million. The total amount would be P1,415,000. The Tax Reform for Acceleration and Inclusion (TRAIN) law has simplified the computation of the net estate tax. There is no longer a table or graduated rates. The estate tax is now fixed at 6 percent of the value of the net estate. So, using the previous example of P11 million, the estate tax shall be P660,000. The TRAIN law has simplified deductions, as well. Originally, there were two categories of deductions: ordinary and special. These two categories were composed of several other items, most of which required proof through official receipts and the like. Further, the allowable deductions were subject to limitations that were cumbersome to derive. Broadly speaking, the TRAIN law provides for three types of deductions. There is the standard deduction of P5 million. This amount is an increase from the original, which was P1 million. The value of the family home is another deduction, the amount of which is capped at P10 million. This is another increase. Before the amendment, such deduction was pegged at P1 million. If the value of the family home exceeds P10 million, the excess would be subject to estate tax. The final deduction shall be the debts of the decedent. The fact that the P5 million is considered as a standard deduction is a boon for many Filipinos. Since it is a standard deduction, there is no need to substantiate the same with receipts—it can be automatically claimed. An interesting situation arises regarding bank deposits of decedents. Originally, the heirs could only withdraw up to P20,000 from the deposits. The TRAIN law has removed that cap, but the amount withdrawn would be subject to a final withholding tax of 6 percent. Now, this situation could arise: What if the amount of the net estate tax due, after deductions, was zero or less than the amount subjected to final withholding tax? Such a situation would be possible and there may not be a tax liability in the first place if the gross estate and deductions are considered. The advanced deduction from the final withholding tax prejudices the estate of the decedent when it should not. In effect, the withdrawn amount of deposit

Pascual. . .

continued from A10

For dollar accounts: Account Name: Caritas Manila Bank of the Philippine Islands— Savings Account 3064-0033-5 Swift Code—BOPIPHMM Philippine National Bank—Savings Account 108566600025 Swift Code—PNBMPHMM Donations can also be made via Cebuana Lhuillier (free of charge), or dropped off at Caritas Manila office at 2002 Jesus Street Pandacan, Manila or Radio Veritas in West Avenue corner Edsa,

The author is of the opinion that instead of a final withholding tax, it serves the purpose of the TRAIN law better if it is a creditable withholding tax. This is so that the withheld amount could still be utilized against the tax imposed on the net estate and, perhaps, refunded if there is excess. Such change in treatment, however, would require an amendment to the new law. is taxable by itself, regardless of the net estate of the decedent. How should this be resolved? The author is of the opinion that, instead of a final withholding tax, it serves the purpose of the TRAIN law better if it is a creditable withholding tax. This is so that the withheld amount could still be utilized against the tax imposed on the net estate and, perhaps, refunded if there is excess. Such change in treatment, however, would require an amendment and not a mere implementing regulation. There are, however, other peculiarities in this final withholding tax approach that may be clarified further through the implementing rules and regulations (IRR). The requirement is to impose a final withholding tax on the withdrawn amount. Should all withdrawals from a deposit account, where a decedent is the depositor, a joint or a codepositor, be subject to the 6-percent final withholding tax? In a joint account, for example, the surviving depositor may actually be withdrawing his own share from the joint deposit. Would that still be subject to a final withholding tax? Also, even in a case where the sole depositor is the decedent, it is possible that the deposit is considered part of the conjugal assets where the surviving spouse owns a part of it. The withdrawn amount may pertain to the share of the surviving spouse. Would that still be subject to a final withholding tax? While these are not clear in the TRAIN law, perhaps these instances can be clarified by the IRR, as it may not have been the intention of the law subject to final withholding tax deposits that are not part of a decedent’s estate. The author is a junior associate of Du-Baladad and Associates Law Offices (BDB Law), a memberfirm of WTS Global. The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported therefore by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at josemilio. teves@bdblaw.com.ph, or call 403-2001 local 150.

Quezon City. For proper acknowledgment of your donations, kindly fax copy of deposit slip to 563-9306, or e-mail a scanned copy to caritas_manila@ yahoo.com. Please indicate your name and complete address. Thank you and may the Almighty God bless your generosity. To know more about Caritas Manila, visit www.caritasmanila.org.ph. For your donations, call our DonorCare lines 563-9311, 564-0205, 0999-7943455, 0905-4285001 and 09298343857. Make it a habit to listen to Radio Veritas 846 in the AM band, or through live streaming at www.veritas846.ph. For comments, e-mail veritas846pr@gmail.com.

am some hundred kilometers from an erupting volcano as I write this. Last 15th of this month, Dr. Chris Newhall, a volcanologist based in Santo Domingo, Albay, came to Ateneo de Naga. This was to hold a forum on the volcanoes of Bicol upon the invitation of the university’s Institute of Bicol History and Culture in cooperation with the university press. Newhall was supposed to speak last year but, due to unforeseen circumstances, his talk was rescheduled. Two days before his lecture, Mayon erupted. It was therefore with his wit and wisdom that the volcanologist began his engaging talk by explaining that “we did not cause the eruption.” It was a good beginning for a volcanologist to stress that we can never be the reason for the eruption of a volcano. Not our bad or evil intentions, not even our religion can summon any volcano to spew lava and allow the hottest of mud to come dripping down. Mayon Volcano has always been addressed as a woman. When one visits the province of Albay, it is always a challenge for any individual to view the peak of Mayon. It is said that when you are not interested in “her,” she will not show her face, her peak, which to the macho is a breast. If she likes you, then you can see her in all her glory. I have no problem with this personification of the volcano as a woman. I also do not have issue if people see the volcano as a sometimes timid, sometimes vulgar woman who would display her allure to those she favors. The problem with this personification is how we are to deal with the eruption and nature itself. Does this mean she is angry? Is this anger for no reason at all? Media networks have already fielded their men and women around the volcano. These newscasters have continued the personification of Mayon. Almost all of them—a sign of lack of creativity of many media practitioners—use one word to describe the event: pagaalburuto. The word literally means “to throw tantrums,” a behavior one

ascribes to a child or anyone who is enraged without rhyme or reason. The original in Spanish—alboroto— is closest to what is happening now, as it means “to create a ruckus” or “to cause a commotion.” Be that as it may, Mayon is not a person and to keep on maintaining that personification speaks really more about us

TRAIN and inflation

Friday, January 26, 2018 A11

as people in times of calamity. This is the kind of thinking that gets us into trouble. Our sense of fatalism gets vetted on days of eruptions and earthquakes. These are bad days for writers, too. From the dustbin we gather words like “fury” and “wrath.” Volcanoes are not gods. Our religion or lack of it has nothing to do with ashfall. Mayon Volcano, like any other volcanoes, does not possess any sense of justice. Much as I want it, too, when pyroclastic materials fall on politicians, it is not justice. The vocano does not know which politician to punish. I doubt if the volcano can tell the peasant from the landlord. Right now, the eruption is causing havoc upon the poor people. They should be told they are not being punished by God. What can we learn about our volcanoes? In that talk of Dr. Chris Newhall, he revealed to us what we were deathly scared of: The volcanoes in the Bicol region are all alive. The massive Isarog, which looms over Naga City and the neighboring towns, is alive. The legend about it as a volcano

The two major sources of inflation are currently at work in our present economic situation. We could also add the situation that inflation is also increased or decreased based on expectations. This could play a bigger role than the actual price increases brought about by the increases in petroleum taxes and cuts in personal-income taxes.

It is the depth of understanding of its implications that is wanting. Had its discussions, hearings and deliberations been given the same media exposure as the different legislative hearings on politics and other controversies, its potential impacts should have been communicated widely and explained to ordinary people. This is all water under the bridge now. We are now facing the single most important economic legislation that is to affect the day-to-day decision of everyone living in the Philippines. In the last two weeks, concerns have been raised by various sectors on its supposed negative impact on the general price level. Leading the chorus of concerns are the transport sector and cascading down to the ordinary commuter. At the same time, someone noticed that the price of his usual 330 milliliter snack drink has likewise increased by 23 percent from last year. There are now various noises from different sectors complaining that prices are rising. Is this to be? The TR AIN law specifically

Cost-push inflation occurs when the cost of production increases and producers pass on the increases to the consumers. This generally occurs when prices of major inputs are increasing. Cost-push inflation can also occur during periods of instability, such as disasters, where production weakens and products and services are less, causing supply shocks. In our current situation, we can list petroleum products as major inputs. According to the DOF, petroleum products account for 10 percent of food inputs, 30 percent for transportation, 7 percent for electricity and 6 percent for the rest of products and services. Our own estimate of the cost-push impact of diesel-price increases to the economy is that for every 1-percent increase in diesel prices, inflation will likely increase by 0.2 percent in a general pass through estimate using data for the last 35 years. The second major type of inflation is called demandpull inflation. Demand pull happens when there is increase in demand for general goods and services in the economy. This could happen particularly in a growing economy,

Alvin P. Ang

EAGLE WATCH N January 1 the Tax Reform for Acceleration and Inclusion (TRAIN) law took effect. Just like a physical train, its arrival came with a lot of noise and shaking. Not that people are not aware of it, for the Department of Finance (DOF) and both chambers of Congress have been involved in a number of discussions for the most of 2017 until its signing by the President last December. amended certain tax rates pertaining to income, estate, petroleum products, automobile and introduced new taxes on sugar-sweetened beverages, while removing certain exemptions from the value-added tax (VAT). Based on the estimates of the DOF, the TRAIN law was expected to increase inflation and its maximum effect was to add 0.9 percent to base inflation for 2018 (based on the DOF presentation, August 2017). This estimate was based on the impact of increases of fuel products, such as diesel, gasoline, liquefied petroleum gas and kerosene, to food, transportation, electricity and other products. Based on our base estimates for inflation for 2018, the 0.9 percent will be added to our estimate of 2.9 percent, which means that average inflation for 2018 will be 3.8 percent or near the Bangko Sentral ng Pilipinas (BSP) ceiling of 4 percent based on its inflation targets. Going back to our textbook definition of what causes inflation, we list down two main causes—cost-push inflation and demand-pull inflation.

that will spew water, instead of lava, is not true. The mountain with a collapsed crater, known as Mount Iriga by those who live in Iriga, Mount Asog by those who are from Buhi, and Monte Buhi for the rabid Buhinon, is still alive. We also learned that there are no sleeping volcanoes. The notion of geologic time, where, in an outburst of unintended poesy, Newhall said 10 thousand years can be just like yesterday. Geologic time tells us about volcanic eruptions happening thousands of years, even millions of years. That sounds like forever, which encourages me to take back my vehemence against people’s obsession about forever. In geologic time, you can fall in love, and that love, like all the volcanoes in the world, can be just there for thousands and millions of years. Even if it thus ends, it will be like forever. Go and love like volcanoes. And, as for clichés, I am conceding for the first time to newscasters and their nagbabagang mga balita, or “flaming news.” That is not poetry but science.

E-mail: titovaliente@yahoo.com.

where there is increased purchasing power of consumers, government and firms. It can also be explained that there are more buyers than the goods and services available to everyone. A tax cut can also result to a demand-pull inflation. The DOF estimates that personal income-tax payers total about 7.5 million people. In the previous tax system, about 40 percent of payers have income P250,000 and below annually. In the new tax system, they will no longer pay any tax. Also with the simplified tax table, those earning P2 million annually and below are going to pay lesser tax, as well. In our current situation, the government is actually releasing approximately P137 billion into the economy through this income-tax cuts. Hence, the two major sources of inflation are currently at work in our present economic situation. We could also add the situation that inflation is also increased or decreased based on expectations. This could play a bigger role than the actual price increases brought about by the increases in petroleum taxes and cuts in personal-income taxes. In view of these, Ateneo Center for Economic Research and Development has adjusted upward our full-year inflation forecast from 2.9 percent to 3.4 percent. This means that within the year, there will be months where inflation will most likely exceed the BSP target of 4 percent. In particular, we see that happening in June and July as the confluence of the above factors and the regular school opening come into effect. Hence, it is likely that the Bangko Sentral ng Pilipinas will raise interest rates around the second quarter of this year.

2nd Front Page BusinessMirror

A12 Friday, January 26, 2018

Exclusion from revived TPP to harm PHL exports–Habito T By Cai U. Ordinario

@cuo_bm

he country’s exclusion from a Pacific trade pact that would be signed by 11 countries in March is a “major threat” to the Philippine economy, a former chief of the National Economic and Development Authority said on Thursday.

Former Socioeconomic Planning Secretary Cielito F. Habito said Philippine-made goods will face tough competition against those coming from Malaysia and Vietnam—two countries that are part of the Comprehensive and Progressive Agreement for TransPacific Partnership (CPTPP). The Philippines, Malaysia and Vietnam export similar merchandise to countries included in the CPTPP. With this, major economies like Australia and Canada will find it cheaper to import from Malaysia and Vietnam. “If we have exclusive arrangements in other products, such as bilatera l free-trade dea ls, [nonmembership in CPTPP] is okay. But, again, there would be an effect. That was the concern about

not being part of the CPTPP, with or without the US,” Habito told the BusinessMirror on the sidelines of the Ateneo Eagle Watch forum held in Makati City. The Philippines is more keen on concluding another expansive trade pact, with President Duterte and Indian Prime Minister Narendra Modi urging their fellow leaders under the Regional Comprehensive Economic Partnership (RCEP) to prioritize the conclusion of the trade deal this year. In their bilateral meeting on Wednesday night, Duterte and Modi agreed the 16 RCEP participating countries need to conclude as soon as possible the agreement, which the country failed to complete in its chairmanship of the Association of Southeast Asian

Nations last year. The two leaders vowed to strongly push for the conclusion of the trade deal this year— this time, under Singapore’s helm. Habito said there is a long list of products and services, such as personal travel services, that the Philippines, Malaysia and Vietnam export to CPTPP countries. Other Philippine exports to Australia include heating and cooling equipment and parts, mechanical handling equipment, pumps and parts and electrical machinery. Malaysia exports crude petroleum; transport; monitors, projectors and TVs; computers; and refined petroleum. Vietnam ships refined petroleum; passenger motor vehicles; and telecom equipment and parts. However, nonmembership in CPTPP will not be a “total loss” for the Philippines because of the absence of the United States in the agreement. The US is one of the country’s top trade partners. Last November the United States was the country’s third-largest export market and fifth-top source of imports. Philippine exports during the period amounted to $690.47 million, while imports were valued at $580.70 million, according to data from the Philippine Statistics Authority. “In a way, it was a blessing in disguise that [US President Donald J.] Trump withdrew from the

[CP]TPP,” Habito said. Last year Washington-based Peterson Institute for International Economics said the existing TPP framework can even be strengthened with the addition of five other countries that have initially expressed interest in joining — Indonesia, Korea, the Philippines, Taiwan and Thailand. In a blog, Asian Development Bank Economic Research and Regional Cooperation Department principal economist Jong Woo Kang said the withdrawal of the US scales down the economic benefits from the TPP. With the United States in the TPP, the total exports of the 12 members would have accounted for 26.6 percent of world trade. Sans the US, the share of TPP signatories in world trade and intraregional trade falls to 15.2 percent and 2.3 percent, respectively. Kang said this is due to the United States being the largest trade player among the original 12 TPP countries, representing 11.4 percent of world trade and 41 percent of trade among members. However, he said that, by pulling out of the TPP, the other members of the TPP will have more incentive to invest in Canada, particularly among those that still do not have free-trade agreements with Canada and the US.

RCEP

Trade Secretary Ramon M. Lopez said in a news briefing on Thursday that other aspect in the DuterteModi talks was “the need to conclude RCEP, or at least put forward, bring forward the discussions on the RCEP. The two leaders recognized that this will be discussed in the plenary in the [Asean-India Commemorative Summit] today [Thursday].” “I’m sure many of the leaders will be making the call to bring forward the discussions on the RCEP,” he added. Manila, for one, is prioritizing the conclusion of the agreement in spite of the nearing completion of the TPP. Lopez, who is in India with Duterte and a number of government officials, said the country is all eyes on Singapore—this year’s Asean chairman—and how it will lead the negotiations on the RCEP. He added Manila is focused on finalizing the trade deal, and will do everything in its capacity to ensure that it will be completed this year. The 16 participating countries in the China-led RCEP are keen on concluding the agreement this year, 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.

Philippine treasurer maps out plan to face higher debt costs

ne of Asia’s fastest-growing economies is getting ready for higher borrowing costs, just as it embarks on a massive infrastructure-spending program. Philippine Treasurer Rosalia de Leon plans to conduct a pesodenominated debt exchange, the first in three years. The Treasury may also sell bonds to retail investors later this year to lock in rates before global central banks collectively begin to reverse stimulus of the past decade. “We are prepared to meet the challenges, having rolled out reforms years ago,” she said in an interview this week. “The Philippines remains a strong growth and credit story.” Economic expansion in the Philippines, which topped 6 percent for the sixth year in 2017, is set to maintain momentum, as President Duterte rolls out a $180-billion program to build roads and railways. At the same time, the boom has led to twin deficits in the budget and current accounts. The government last week sold $2 billion of global bonds, using $1.25 billion of the new debt to swap shorter, more expensive dollar bonds previously issued. Debt exchanges helped cut interest payments to 12.4 percent of the budget in 2017, from 30 percent in 2006, according to data from the Treasury. “If ever they issue a longer-tenor bond, effectively they

would be locking in fixed rates at relatively low levels,” said Andre Ibarra, senior vice president at Security Bank in Manila. “Definitely, the timing is good.” The administration has room to borrow after the previous administration ran a tight fiscal policy with a budget-deficit goal of only 2 percent of GDP. Duterte, who took office in 2016, anticipates widening that to 3 percent from 2018 to 2022. De Leon said she has a number of fund-raising options to choose from this year, including a debut sale of yuan-denominated bonds and return to the Japanese debt market. The Treasury will review its borrowing strategy by midyear once it has a clearer picture of revenue and spending trends, de Leon added. A record sale last November of P255 billion ($5 billion) to retail investors has given de Leon the headroom to cap borrowing costs by rejecting “out of line” bids, she said. “As investors see that we have been managing our portfolio well, along with the stellar performance of the economy, they will see an upside in holding the debt” of the Philippines, even if interest rates were to climb, de Leon said. The Philippines has a credit rating one notch higher than Indonesia at Moody’s Investors Service and Standard & Poor’s. Bloomberg News

www.businessmirror.com.ph

PCCI still getting inputs from members on federalism push Continued from A1

what is this and what is that. I want them to listen to the legal experts so that we will be guided in our position on this groundbreaking change in the government,” Limjoco noted. “We want to ensure that every business, that means all of our members, has its voice in our position paper. We want our position based on the membership, not on the leadership. That is how we will get it from them. We have to take it easy in coming up with a stance on this very crucial matter.” Other business groups, particularly the Makati Business Club, Management Association of the Philippines and the Financial Executives Institute of the Philippines, have already thrown in their support to Congress’s move to amend the 1987 Constitution. The groups are pushing for the lifting of economic restrictions in the highest law of the land, saying this will pave the way for a more conducive business environment. “Since 2000 Philippine business leaders and economists have recommended replacing the constitutional restrictions on foreign equity with specific laws,” the groups argued in a statement last Sunday. They said amending the Constitution is crucial to the fulfillment of this reform. However, the groups called on the House of Representatives to recognize the autonomy of the Senate and allow it to vote separately. “We deem it more democratic for the two [chambers] to vote separately so as to recognize the autonomy of the Senate body and to avoid diluting the voice of our senators in this critical process,” they argued.

Elijah Felice E. Rosales

Infra. . .

Continued from A1

President Duterte (left) and Indian Prime Minister Narendra Modi pose for the media ahead of their meeting in New Delhi, India, on Wednesday. Leaders of the Association of Southeast Asian Nations are gathering in New Delhi to celebrate 25 years of the group’s ties with India. AP Photo

Duterte nets $1.25-B new investments from India trip Continued from A1

memorandums of understanding (MOU)—were submitted to the Department of Trade and Industry. The investments were on information technology and business process management (IT-BPM), software development, renewable energy, pharmaceuticals, tourism and wellness. Lopez said these investments are expected to generate a total of 10,000 jobs. Lopez said the government was also able to accomplish the President’s goal of improving trade on medicines with India. “In particular, special emphasis was given— aligned with what the President intends to achieve in this visit—[on strengthening] the trade on pharmaceuticals to ensure that Filipinos will have better, easier access to affordable, quality drugs,” he said. “We highlighted that the medicines coming from India are not only affordable, but also with high efficacy, very effective. They are, in

fact, the biggest exporters of medicines to the United States and the European Union,” Lopez added. The trade chief also disclosed that Duterte floated the idea to Indian Prime Minister Narendra Modi of allowing Indian pharmaceutical firms to start manufacturing in the country. Should this take place, Lopez said India can make use of the country to export medicines to its markets in East and Southeast Asia. To ensure the efficient and synchronized delivery of investments, Manila signed a MOU with New Delhi on investments. The MOU intends to provide practical investment information to enterprises, assist interested investors and promote investments. On the other hand, the MOU between the National Association of Software and Services Cos. and the Information Technology and Business Processing Association of the Philippines (Ibpap) was extended to further advance cooperation on

IT-BPM industry. The MOU aims to provide mutual assistance for the promotion and development of the global IT-BPM industry, through regular consultation and complementary efforts. Letters of intent to establish or expand business in the country were submitted by Interglobe Air Transport Ltd., Interglobe Technologies, KG Information Systems Private Ltd.; Ibpap; The Farm at San Benito; and Hinduja Global Solutions. Lopez said The Farm at San Benito committed $30 million, or P1.5 billion, for an expansion project that will need 500 workers, while Hinduja vowed to bring in $20 million, or P1 billion, for a venture that will produce 2,000 jobs. A letter of intent was also transmitted by Adani Green Energy Ltd., expressing its desire to expand operations in the country. The expansion, according to Lopez, is expected to amount to as much as $1 billion and will generate 3,000 jobs.

within the 6.3-percent to 6.6percent range. In the second quarter, GDP growth could be anywhere between 6.5 percent to 6.7 percent. In the last quarter of the year, the increase may average 6.5 percent to 6.8 percent. Inflation is expected to average slightly higher at 3.8 percent. This is mainly due to the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN). The Acerd estimates that the TRAIN will add 0.9 percentage points to inflation. Their base estimate for 2018 is 2.9 percent. In a recent forum, the National Economic and Development Authority said the government will spend P4.82 trillion for 4,095 infrastructure projects, which are expected to create 6.27 million jobs, until 2022. Last November the Department of Budget and Management (DBM) said the national government is open to the idea of importing workers if it means completing infrastructure projects on time. Budget Secretary Benjamin E. Diokno told the BusinessMirror that his recommendation is merely “a last resort.” However, Diokno said he is confident that, no matter the size of the infrastructure program, the government will have sufficient manpower to hire and complete megastructures. Diokno said some 1.5 million Filipinos join the labor force every year, and this is partly due to the steep population growth in the country. He said that, as a nation, the country produces about 2 million babies a year. Apart from the new entrants to the work force, he said overseas Filipino workers who would like to come home and work in the country can consider jobs in the government, construction sector or allied industries.