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nticorruption conventions and legislation have global reach and introduce compliance demands on companies to prevent bribery. It is important for Philippine companies and international companies doing business worldwide or intend to export from the Philippines to be aware of these conventions »continued on A12 and legislation in order to avoid risks.
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Tuesday, July 4, 2017 Vol. 12 No. 264
Espenilla takes over stewardship at BSP By Ma. Stella F. Arnaldo
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@akosistellaBM Special to the BusinessMirror
ESTOR A. Espenilla Jr. formally took over the reins of the Bangko Sentral ng Pilipinas (BSP) as governor on Monday, and pushed for the further liberalization of the banking sector, more financial inclusion, and a legislative agenda that would strengthen the institution and its protection of the financial system.
LOPEZ: INVESTMENT PLEDGES TO BREACH P500 BILLION THIS YEAR By Catherine N. Pillas
LOPEZ: “We are optimistic that we will surpass the target of P500 billion, as we expect more investments to come in.”
@c_pillas29
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he Board of Investments (BOI) and the Philippine Economic Zone Authority (Peza)—the country’s main investment-promotion agencies—would likely attract more than P500 billion in fresh investments this year, according to Trade Secretary Ramon M. Lopez. Lopez made the pronouncement in a text message to the BusinessM irror after Peza reported it registered a 13.57-percent hike in export receipts in April. “We are optimistic that we will surpass the target of P500 billion, as we expect more investments to come in,” said Lopez, adding that this is due to the investment-promotion road shows in 14 countries organized by the government. In line with its 50th founding anniversary in September, the BOI has set a target of P500 billion in investment pledges this year. Last year the BOI approved P441.8 billion in investment pledges, up 20.4 percent year-on-year. It is also the second-largest yearly haul since 2000, second only to 2013’s performance of P466 billion. In May the BOI has already logged P174.47 billion in investment pledges.
Including official visits and investment roadshows, the Department of Trade and Industry (DTI) said Lopez has already taken as much as 14 trips abroad in his first year in office. Peza also reported that exportoriented firms in ecozones reported a 13.57-percent hike in their revenues in April. Export receipts during the period reached $16.47 billion. The improvement in exports was due to the recovery of the country’s export markets, most notably the European Union, and the continued uptick in the Philippines’s largest expor t—semiconductors and electronics. Earlier, the DTI noted that the strengthening of ties between Manila and Beijing contributed to the recovery of Philippine exports. This is also seen to hike exports by as much as 7 percent this year, from an earlier forecast of 3 percent to 5 percent.
PESO exchange rates n US 50.4490
He also warned on “sources of vulnerabilities” that may erode the country’s economic gains, at the turnover ceremony at the BSP General Assembly Hall, which was packed to the rafters with employees eager to hear from their new boss. He takes over from career central banker Amando M. Tetangco Jr., who has been with the institution for 43 years and was its governor since 2005. The day was also a celebration for the monetary institution, whose anniversary falls on July 3, after its establishment 24 years ago under the New Central Bank Act of 1993. See “Espenilla,” A2
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Rebuilding Marawi Manny Villar
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THE ENTREPRENEUR
called for the acceleration of the modernization program for our security forces last week not only in light of the Maute Group’s attack on Marawi City, but also because terrorist attacks are becoming the new normal around the globe, even in countries with the most modern security systems. New York Police Department (NYPD) Commissioner Bill Bratton has warned that the recent terrorist attacks in Europe were the “new normal”, and would surely reach the United States, according to an online report of the New York Post on June 11. Continued on A10
BMReports
Pasig City, women grapple with milk-formula debacle S
OME milk-formula manufacturers in the Philippines are Abbott Laborator ies Philippines Inc., Mead Johnson Philippines Inc., Wyeth Nutrition Philippines Inc., Nestlé Philippines Inc. and Pacific Healthcare Philippines Inc. They are multinational firms headquartered in the United States, Switzerland and Singapore. According to the United Nations Children’s Fund, “because of limited milk production in the Philippines, the country relies on milk imports to provide breastmilk substitutes.” A survey of stores in Pasig City reveals milk supplements Bonamil costs P88.83 for 180 grams and P864.87 for 2 kilograms; Enfamil A+ Two Lactose Free at P591 for 350g and P1,230 for 900g; DG Infant Formula at P699 for 400g, Nestogen 2 Follow up Formula at P495 for 1.3kg and P378 for 900g and Similac Organic Infant Formula at P2,107 for 658g. Prices may vary depending on the store. Working mother Jenne Pauline Sison spends P900 per can of a Continued on A2
This March 3 photo shows mothers being assisted by health workers in Quezon City on how to pump milk for their babies using a machine. Some mothers said the decision whether to use infant formula also boils down to how they manage their time to take care of the household. NONIE REYES
n japan 0.4501 n UK 65.6291 n HK 6.4623 n CHINA 7.4391 n singapore 36.6475 n australia 38.7549 n EU 57.6178 n SAUDI arabia 13.4523
Source: BSP (3 July 2017 )
BMReports BusinessMirror
A2 Tuesday, July 4, 2017
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Pasig City, women grapple with milk-formula debacle Continued from A1
Wyeth Nutrition milk formula brand every 15 days. Allyza Travino, who works for her mother’s company, spends P1,000 every two weeks for every 1.6 kg of a Nestlé S.A. brand of milk formula for her 4-year-old daughter Cassy. “Gustuhin ko man na padedehin si Cassy, hindi ko rin magawa kasi wala talagang lumalabas na gatas sa akin, [Whether I wanted to breastfed Cassy, I still couldn’t do it because I cannot produce milk],” Travino said Travino added her inverted nipples, as well as earning money for the family, has prompted her to choose milk formula for her daughter’s diet.
Income demand
THE UK-based charity National Childbirth Trust (NCT) defines infant milk formula as “usually based on processed, skimmed cow’s milk”. “Added ingredients include vitamins, fatty acids and prebiotics [carbohydrates that can stimulate the growth of ‘good’ bacteria in the digestive system],” the NCT said. The World Health Organization ( W HO) inc ludes t his among “breast-milk substitutes”. The WHO said breast-milk substitutes mean “any food being marketed or otherwise presented as a partial or total replacement for breast milk, whether suitable for that purpose”. Infant milk formula usually comes in powder form, diluted
Espenilla. . .
Continued from A1
Prior to the turnover ceremony at the BSP, Finance Secretary Carlos G. Dominguez III, representing President Duterte, administered the oath of office to Espenilla. Dominguez also swore into office Monetary Board members: former banker and Trade Secretary Peter B. Favila; former Socioeconomic Planning Secretary Felipe Medalla; and former banker Antonio Abacan Jr. Favila served as national government representative to the Monetary Board in 2008 and became a full-time Monetary Board member from 2010 to 2014. Medalla, was reappointed to a second term at the Monetary Board. During his speech, Espenilla said his priorities include “an even more market-or iented ” monetar y polic y, liberalization of the banking sector to open it up to further competition and promote efficiency among institutions, and pushing for legislation to “amend the BSP Charter, the passage of the Payment System Act and the Islamic Banking Act, and the easing of the deposit secrecy laws. We also join the initiative for the further strengthening of the Anti-Money Laundering Act to w i n t he f ight aga i nst money
with water and fed to infants or children 12 months and below through a bottle. Barangay Sumilang, Pasig City Health Center midwife Nomelita A. Talop told the BusinessMirror infant-milk formulas bring convenience to mothers, especially if they have jobs or other tasks to do. Also, it would be more comfortable for the baby to drink in bottle if he or she has a cleft palate, Talop added. For homemaker Joy Mapadat, being busy with work prompted her to use infant formula. She sells snacks to augment her family’s income that relies on the salary of her husband who works as a security guard. Another mother belonging to Mapadat’s barangay, Sumilang also cited her work as a decision
launder ing and ter ror ist financing and thus secure the integrity of our financial system”. A lso, he would further push the BSP’s financial inclusion advocacy, to enable more people to benefit from the economic growth, with the creation of more jobs. “We need to work on bringing central banking operations closer to the people. This would entail strengthening our commitment to advance our financial inclusion, financial education and consumer protection agenda to ensure that no one is left behind,” stressed Espenilla, who also chairs the policy-making Monetary Board. While acknowledging the low-inf lation, high-growth environment fostered by the deft handling of monetary policy, the BSP governor warned of uncertainties in global economic policy that could undermine the country’s growth prospects. “We have to be prepared, as well, for the seemingly imminent wind-down of ultra-easy monetary policies in advanced economies. We need to be mindful of such events and their potentially far-reaching consequences since these could undermine our economic performance and disrupt our carefully laid plans,” he said. He, likewise, mentioned innovations in technology and communication that
to stop breastfeeding. “Nag-tr y akong mag breastfeed dati kaso one month lang [kasi] hindi ako makagawa ng iba pang gawain dito sa bahay, [I tried to breastfed before for only a month but stopped because I cannot do other household chores]”, Maizilyn Huilar said, while folding sun-dried clothes. Huilar said she now regrets her decision “because milk formulas are expensive”.
Home management
MADAPAT ’S neighbor Jocelyn Santos ruminates of her decision to breastfeed all her six children. Santos, pregnant w ith her seventh child, told the BusinessMirror she chose to feed her children her milk because of the prohibitive price of infant formula.
could disrupt the financial system. “Digital innovation is rapidly reshaping financial services as we know it to serve a new breed of financial consumers who are young, upwardly mobile, technology-savvy and have exacting demands for the convenient delivery of financial products and services. “The role of social media, particularly as an information channel, has likewise accelerated, highlighting the speed at which information, both good and bad news, and perhaps even fake news, can spread at an unprecedented speed. We cannot also be blind to the dark specter of cybercrime that can quickly undermine trust in our financial system. There is no substitute for eternal vigilance, proactive action and public education. We are all in this together,” he told BSP employees. Espenilla has been with the BSP since 1981 and has worked in Economic Research, International Operations and in the Office of the Governor. He was seconded to the International Monetary Fund from 1990 to 1992. He earned a bachelor of science degree in business economics and a master’s degree in business administration from the University of the Philippines, as well as a masters of science degree in policy science from the Graduate Institute of Policy Science in Tokyo, Japan.
Govt. . .
Besides, we need the money, the full-time stay-at-home mother said, as the family only relies on the salary of her husband who works as company driver. Money is what Jasmin Isidro said she gained out of breastfeeding. Isidro, a mother of two sons, works as a sweeper at the Pasig City Hall. “I personally breastfed my two boys for six years without really planning on where I will channel the savings,” she told the BusinessMirror. Isidro, however, said it also helped that they live with her parents and win in “Bingo”, her pastime. For Jane Obsina, a 40-year-old mother of three, said the decision to use infant formula also boils down to time management.
Continued from A12
for the President to declare martial law in the first place,” Lorenzana added. A number of lawmakers, including administration critic Party-list Rep. Gary C. Alejano of Magdalo, have questioned the constitutionality of Proclamation 216, challenging the presidential declaration before the SC. They said the SC should lift the military rule in Mindanao, as there was no invasion or rebellion endangering public safety to justify martial law. Marawi City in Lanao del Sur is currently ground zero, after Islamist militants on May 23 laid siege on the city in a bid to establish a caliphate in Southeast Asia. Government troops have since then been engaged in a headlock with the terrorists for more than a month now, leaving 459 people dead, as of Monday. In response, Duterte declared martial law in the whole of Mindanao to spoil what he said to be a fastgrowing threat of Islamist militancy on the island. As challengers to his declaration mounted, Duterte said he would ignore the ruling of the SC and would only listen to ground forces as to when the military rule should be lifted. Last Saturday the Chief Executive said he would jail anyone who go against his martiallaw declaration, including members of the SC, who have constitutional oversight. “It’s not dependent on the whim of the Supreme Court. Should I believe them? When I see the situation is still chaotic and you ask me to lift it? I will arrest you and put you behind bars,” Duterte said.
Obsina said she breastfed all her daughters, the youngest of whom is Angelito. Motherhood is really hectic because taking care of the family is a major responsibility that has no limit and exceptions, she said. Obsina’s sister-in-law and fellow Zumba dancer Rita Vergara, however, cited health concerns for going back to breastfeeding. Vergara, a mother of three, said she used infant formula before but her son was rejecting the diet. From then on, she went back to breastfeeding him. Vergara said she sells snacks and other products during holidays, like Holy Week and Christmas to augment the income of her husband from driving a tricycle. Kaye Escaño To be concluded
Ongpin. . .
Continued from A12
If approved by Tieza, the designation of the Patnanungan Island as a tourism enterprise zone will grant Alphaland fiscal incentives, such as income-tax holiday, duty-free import of capital goods and equipment, exemption from value-added tax and import tax exemptions on transport equipment, among others. In a letter to Balesin Island Club and Alphaland City Club members in March 2017, Alphaland Chairman Ongpin said that, aside from the runway, the Patnanungan Island project will have “a 300-room hotel, an 18-hole golf course and about 500 privately owned beachfront and golf-course homes. We are now in the market for a Hongkong-Macau style jetfoil ferry, which can travel to and from Balesin in half an hour to 45 minutes.” Patnanungan is about 20 nautical miles away from Balesin. Ongpin also said the company borrowed P5.5 billion from BDO Unibank, P1.5 billion of which will be used to finance the Patnanungan Island project, dubbed the Balesin Gateway, and its Baguio Mountain Lodges. Both projects will be nonexclusive accommodation projects, unlike Balesin Island Club. For his part, Asperin said he believes the “exclusive membership” business model at Balesin Island still works, despite Alphaland going into nonexclusive tourism projects. “Our income has been positive for the past two years. Our share prices have now reached P2.2 million [Gold members], P4 million [Diamond], and P6 million [Corporate],” from only P1 million when the company began exclusive membership shares in 2011. He intimated that about 60 percent of the share owners are “Filipino-Chinese, many of whom like to keep a low profile”. He said he was optimistic that Balesin will reach its goal of flying in 10,000 passengers this year with the purchase of its new planes, as well as starting flights at the Clark International Airport. “Last year we only had 6,000 passengers because of the congestion at the airport [Ninoy Aquino International Airport] ,” he said, but noted that flights from Clark will allow Balesin to bring in guests “from the North, such as Pampanga and Nueva Vizcaya. We’re very excited about this”. The flight from Clark to Balesin, which has night-landing facilities, will take about 45 minutes. The flights from Clark were a result of a demand from members, according to Ongpin in the same March 2017 letter. “We have also noted a significant increase in members wanting to take the flight to and from Balesin from Clark rather than the Naia. Many of you who live in the northern part of Metro Manila find that it takes about an hour to get to Clark, as opposed to having to traverse the heavy traffic in Edsa for as much as two hours to get to our hangar in the Naia.” The flight from the Naia in Pasay to Balesin takes about 25 minutes. With the arrival of the second ATR 72-500, “[and] taken together with the night-flight landing capability at Balesin, we are now able to handle as many as 500 members and guests on a daily basis, obviously a major game changer for Balesin,” the Alphaland chairman emphasized. According to the company’s web site, the Baguio Mountain Lodges project “will be a master-planned development of 300 lodgestyle log homes, situated on a 76-hectare property. The development is just 8 km north of Baguio City on Ambuklao Road, which is now fully paved and is only a 15-minute drive from Baguio City proper.”
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Aguirre admits resurgence of drug activities inside NBP By Joel R. San Juan @jrsanjuan1573
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USTICE Secretary Vitaliano N. Aguirre II is now looking into reports that some inmates have resurrected illegal-drug activities inside the New Bilibid Prisons (NBP) in Muntinlupa. In an interview, Aguirre said that while he considered the neutralization of drug syndicates inside the NBP as one of his biggest accomplishments in his first year in office, a resurgence of such should be dealt with immediately. Aguirre noted that 70 percent to 75 percent of illegal drugs in the country were being trafficked from inside the NBP prior to the assumption of the Duterte administration. “I have received reports that there were some reactivation, we are doing something about this, we are going to end this resurgence, some sort of resurgence by some inmates. I talked to Director General [Benjamin] delos Santos last Saturday, and we know what we are going to do,” Aguirre said. He added the resurgence constitutes only about 5 percent to 10 percent, as compared to the extent of the previous illegal drug operations. “We have successfully curbed 75 percent of the illegal-drug trade. If ever, the resurgence is about five to 10 percent only and we are going to
clip it again,” Aguirre added. Last year Aguirre tapped members of the Special Action Force (SAF) to replace prison guards in a bid to quell illegal-drug transactions inside the NBP. But Aguirre is now hinting on the possible role of some SAF personnel in the resurgence of illegal-drug operations inside the national penitentiary. “I have to admit, because of their familiarity, they have stayed there for more than six months, that’s a long time. Our plan was to deploy them only for about three months, and apparently, because of the huge amount of money involved, they were coopted by the drug syndicate,” Aguirre said. The DOJ secretary said he would be asking for new SAF contingents to guard the NBP against illegal drugs and other prohibited activities. Aguirre said charges would be filed against any SAF personnel found involved in illegal-drug activities inside the NBP. Based on Aguirre’s first year accomplishment report, a total of 11,462 contrabands were confiscated through 26 Oplan Galugad operations inside the NBP. The report also showed that five Bureau of Corrections employees were dismissed from the service, while four others are facing charges for their alleged involvement in the illegal activities inside the penitentiary.
Lawyers’ group urges House to recall show cause order against CA justices
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nother lawyers’ group has come to the defense of the Court of Appeals (CA) in its standoff with the House of Representatives in a case involving the six provincial officials being held by lawmakers for contempt. In a two-page statement over the weekend, the Philippine Bar Association (PBA) urged the House Committee on Good Government and Public Accountability and the House leadership to recall the show cause order against three justices of the CA special fourth division that ordered the release of the Ilocos Norte officials. “We must defend, as sacrosanct, the Constitutional principles of separation of powers and judicial independence. Otherwise, we risk damaging our judicial institutions and substituting tyranny for the rule of law,” the PBA said in a statement issued by its president, Fina Bernadette dela Cuesta-Tantuico. PBA, the oldest voluntary organization of lawyer in the country, believes that the CA “did not infringe upon or, in any way, diminish the power of the House of Representatives” and “merely performed a necessary check for the purpose of ensuring the judicious exercise of such power” in issuing the writ of habeas corpus in favor of the Ilocos Norte officials. The Integrated Bar of the Philippines earlier issued a similar statement and also called on the House to recall the show cause order against Associate Justices Stephen Cruz, Edwin Sorongon and Nina Antonio-Valenzuela. Chief Justice Ma. Lourdes A. Sereno and CA Presiding Justice Andres Reyes Jr. have also supported this appeal, suggesting to House leaders to instead avail themselves of legal remedies under the Rules of Court in challenging the CA orders. “To now seek to punish the three justices who were merely performing their sworn duty to inquire into the basis of confinement or detention devalues the writ and imperils the zealous protection of individual
liberty,” the PBA added. The group further explained that while the House has the power to conduct inquiry under Article VI, Section 21 of the 1987 Constitution, the CA also has the original jurisdiction to issue the writ of habeas corpus, which is the “most efficacious safeguard of the liberty of individuals in a free society”. “Section 1 of Republic Act 7902, grants the Court of Appeals original jurisdiction to issue writs of habeas corpus and auxiliary writs or processes with the power to try cases and conduct hearings, receive evidence and perform any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction, including the power to grant and conduct new trials or further proceedings,” it explained. The CA has ordered the release of Pedro Agcaoili, Provincial Planning and Development Office chairman; Josephine Calajate, provincial treasurer; Eden Battulayan, Provincial Treasurer’s Office staff; Encarnacion Gaor, Provincial Treasurer’s Office staff; Genedine Jambaro, Provincial Treasurer’s Office staff; and Evangeline Tabulog, provincial budget officer. T hey have been detained since May 29 after being cited in contempt by the House Committee on Good Government and Public Accountability during its probe into the alleged misuse of P66.45 million in tobacco funds to buy motor vehicles. The CA also issued a show cause order requiring House sergeant-at-arms Roland M. Detabali to explain why he should not be cited in contempt for defying the order and twice rejecting the service of the CA ruling. However, House officials refused to accept the orders and reportedly insisted that they were invalid because the appellate court has no jurisdiction over the matter. House Speaker Pantaleon D. Alvarez went as far as threatening to abolish the CA and disbar the three justices in the CA division that issued the orders. Joel R. San Juan
Tuesday, July 4, 2017 A3
Hapilon hiding in Marawi, Defense secretary confirms
This image taken from undated video shows the purported leader of the Islamic State group Southeast Asia branch, Isnilon Hapilon (center) at a meeting of militants at an undisclosed location. The images offer a rare glimpse into the clandestine operations of insurgents who followed through four weeks ago with an unprecedented assault on Marawi City. AP
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By Elijah Felice E. Rosales
@alyasjah
T’S confirmed. Isnilon Hapilon, the purported leader of the Islamic State (IS) in Southeast Asia, is still in Marawi City, Lanao del Sur, according to the chief of the Department of National Defense.
Citing intelligence reports, Defense Secretary Delfin N. Lorenzana on Monday said Hapilon is still nesting inside Marawi City. “According to our latest information, [Hapilon] is still inside Marawi City. In fact, there is information we got this
morning that he is hiding in one of the mosques there,” Lorenzana said. He said security forces were able to round up Islamist militants in Basilan Island, but none of them was identified to be Hapilon. “There were three fighters from Marawi City that
arrived in Basilan Island more than a week ago, but [Hapilon] was not one of them,” the defense chief said. It is in this premise that Lorenzana concluded Hapilon is still in hiding in Marawi City. His claim, however, contradicts an earlier report by the military that said Hapilon has made his way out of the conflict zone. In a radio interview a week ago, Western Mindanao Command Chief Carlito G. Galvez Jr. said the military has not spotted Hapilon in Marawi City for quite some time now. Galvez said the most wanted militant in Southeast Asia might have been on the run as he was reportedly injured. “He [Hapilon] has not been seen in the area. We have some reports that he was already able to slip somewhere but, as of now, we
are still confirming the reports,” Galvez said. Presidential Spokesman Ernesto C. Abella last Wednesday said if it is true that Hapilon escaped the battlefield, it is a proof of the purported IS leader’s cowardice. “Granting that this is true, it would be a clear sign of [his] cowardice because he abandoned his companions and ran away from the battle,” Abella said. “It may also be indicative of the infighting that may now be going on within the group. It may be a matter of time before they disintegrate or self-destruct,” Abella added. Hapilon is purportedly the leader of IS fighters in Southeast Asia attempting to establish a caliphate in the region. He was the target of a botched military arrest on May 23, which then led to the eruption of violence in Marawi City. Hapilon gained notoriety in 2001 after helping the Abu Sayyaf Group kidnap 20 hostages in a resort. The victims included three American citizens, of which one was beheaded, leading to Hapilon’s inclusion in the United States most wanted terrorist list, with a $5-million bounty on his head. Meanwhile, Lorenzana said government troops are keen on clearing Marawi City of Islamist militants before President Duterte’s second State of the Nation Address (Sona) on July 24. “It is my hope that fighting in Marawi City ends before the President delivers his Sona in Congress,” the defense chief said. “It would be difficult for him [Duterte] to report about the state of the Philippines all the while soldiers and terrorists are exchanging gunfires in Marawi City. And that is one of the things that I have asked the commanders on the ground: [to] terminate the conflict there before the President goes on his Sona,” Lorenzana said.
Bigger budget for restoration Solon wants RWM to get of PHL heritage sites sought fire inspection certificate
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senator on Monday recommended a bigger budget for the restoration of Philippine historical sites, noting that it would bring in more tourists and, at the same time, create more jobs. In a press statement, Sen. Joel Villanueva expressed frustration on how the government is handling the conservation of the country’s cultural heritage, particularly Intramuros, which only has P50-million budget this year, a huge cut from the P443-million allocation last year. He did not mention how much of an increase he wanted but noted that the government should be more active in promoting sustainable planning and management of historical sites, such as Intramuros. “We believe that we can do more when it comes to preserving our cultural heritage by allocating enough budget to fund the restoration and reconstruction efforts of Intramuros in Manila; Barasoain Church in Malolos, Bulacan; Biak na Bato in San Miguel, Bulacan; and other historic heritage to attract more international and domestic tourists,” Villanueva said. The neophyte senator, together with the Philippine Senate delegation, recently met with members of the French Senate to discuss how the two nations can work together to promote sustainable tourism policies while recognizing the negative impacts of tourism development on the environment and climate change. Villanueva said he believed that, if the Philippines followed the tourism development policies of France and develop better infrastructure in the country’s tourism destinations, the Philippines can also reach its maximum
VILLANUEVA: “We believe that we can do more when it comes to preserving our cultural heritage by allocating enough budget to fund the restoration and reconstruction efforts of Intramuros in Manila; Barasoain Church in Malolos, Bulacan; Biak na Bato in San Miguel, Bulacan; and other historic heritage to attract more international and domestic tourists.”
tourist arrivals, which will open more employment opportunities in the tourism industry. “France remains to be the world’s leading tourist destination with over 85 million tourist arrivals yearly as it promotes ecoresponsible projects, such as recycling waste, reducing water and energy use, and responsible sourcing,” Villanueva said. “Also, France was able to preserve thousands of its monuments and sites that made it attractive to millions of tourists,” he added. The senator also stressed the importance of protecting nature by cooperation between the public and private sector in terms of promoting sustainable tourism. “While we want to attract more tourists, we should learn our lessons from Boracay, which self-destructs due to poor planning and inappropriate sewerage system. We, therefore, urge all stakeholders to participate in raising awareness about sustainable tourism and promoting earth-friendly tourism practices,” Villanueva said. PNA
By Jovee Marie N. dela Cruz
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@joveemarie
senior vice chairman of the House Committee on National Defense and Security on Monday asked the management of Resorts World Manila (RWM) if they have already secured a valid Fire Safety Inspection Certificate (FSIC) from the Bureau of Fire Protection (BFP) following the reopening of RWM’s gaming area last week. PDP-Laban Rep. Ruffy Biazon of Muntinlupa City underscored the importance of the fire permit after 37 people died of suffocation following the June 2 RWM incident. “The victims died of smoke inhalation. So, one of the issues that we will look into is that the Resorts World did not have any valid fire-safety inspection certificate. Now that Resorts World Manila resumed its casino operations, we want to know if they have secured the said permit,” Biazon said. The FSIC is required prior to the issuance of occupancy permit as it signifies that the owner or administrator has complied with the standard requirements recommended by the Fire-Safety Inspector and/or Fire-Safety Plan Reviewer of the establishment. During the recent House probe on the RWM tragedy, Biazon recalled it was revealed that RWM refused to be inspected by the BFP because their place is under the Philippine Economic Zone Authority (Peza), which purportedly has jurisdiction in the issuance of the said permit because RWM is one of its regulated establishments. However, Biazon said Peza admitted that casinos are not covered by their supposed authority to issue FSIC under the law that created Peza and RWM has not been given the said certificate. Biazon said Peza’s authority to issue such permit was already repealed by the new Fire Code of the Philippines, which empowered the BFP to administer the issuance of fire-safety permits. “It turned out they don’t have FSIC because they refused to be inspected by the Bureau of Fire and Protection,” he said. The BFP has failed to immediately enter the premises of RWM during the fire incident, due to the restriction imposed by Peza. Biazon also asked the Philippine Amusement and Gaming Corporation (Pagcor) if it will allow casinos to operate despite the absence of said permit. “That’s why we raised the point…will Pagcor still allow casinos under Peza to operate even if they don’t have a Fire-Safety Inspection Certificate?” he asked.
Economy
A4 Tuesday, July 4, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon
BusinessMirror
Legislator opposes DTI plan to scrap SRP on basic goods
A lady shopper checks on the price tag and label of basic goods at a grocery store in Makati City over the weekend. A lawmaker in the House of Representatives has opposed a move to scrap the suggested retail price on basic goods, branding the Department of Trade and Industry proposal as “anti-poor”. Alysa Salen
By Jovee Marie N. dela Cruz
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@joveemarie
he chairman of the House Committee on Banks and Financial Intermediaries opposed the plan of the Department of Trade and Industry (DTI) to lift the suggested retail-price (SRP) scheme for basic necessities. Panel chairman PDP-Laban Rep. Ben P. Evardone of Eastern Samar described the proposal as “antipoor”, saying the DTI’s proposal would not prevent the escalation of prices of consumer goods.
“Lifting the SRP is like giving businessmen the opportunity to rake [in] more profits at the expense of [the] consuming public,” Evardone said. “The DTI should scrap its plan to remove SRP. The consumers
will greatly suffer. This will enable the manufacturers and traders to reign in the prices of their products. It is simply anti-poor and antipeople,” he added. The lawmaker also expressed doubt on the agency’s claim that the move will promote competition. “Instead of promoting competition, the removal of SRP will be used
as a tool to increase the prices of basic goods. They should think twice or face [the] people’s wrath,” Evardone said. Earlier, Trade Secretary Ramon M. Lopez said he wanted to “deregulate” the SRP scheme, and allow market forces to determine prices. The Philippine Association of Meat Processors Inc. (Pampi) has also thrown its support behind the plan of the DTI, saying this would cut red tape. Pa mpi P reside nt Fe l i x O. Tiukinhoy said setting the SRP should be a business decision among manufacturers. “We should give the consumer the freedom to choose what is best for him,” Tiukinhoy said. “People can patronize products with good value. But, they can boycott abusive manufacturers,” he added. Tiukinhoy said in terms of price adjustments, Pampi and its 35 member-companies are advocating for good manufacturing practices to ensure efficient production and sound supply chain that will keep products cost-competitive. The SRP schedules serve as guides of the DTI’s monitoring teams to ensure supermarkets and retailers stay within the price range recommended by the manufacturers. Aside from the DTI, four other government agencies are mandated to issue SRPs: the departments of Agriculture, Health, Environment and Natural Resources and Energy.
The DTI should scrap its plan to remove SRP. The consumers will greatly suffer. This will enable the manufacturers and traders to reign in the prices of their products. It is simply anti-poor and antipeople.” —Evardone
PIDS: Housework binds women to domestic bondage By Cai U. Ordinario
@cuo_bm
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ousework keeps millions of women from accessing employment opportunities, according to state-owned think tank Philippine Institute for Development Studies (PIDS). In a policy note, PIDS Senior Research Fellow Connie Bacuyan-Dacuycuy and De La Salle University’s Lawrence Dacuycuy said housework remains a woman’s domain in the home, preventing them from participating in the labor force. Since they are not part of the labor force, their economic contributions in the country have been limited and/or undervalued. “Men provide and their place is in the labor market. As a result, women’s contributions to society tend to become undervalued, if not invisible,” the authors said. The authors added the time required to complete housework, which includes taking care of children and the elderly, reduces the chances of women to have regular paying jobs. If they have regular jobs, the weight of performing housework remains fixed on their shoulders. This is often termed “second shift”, overburden in sociology researches and time poverty in studies on multidimensional poverty.
Given that taking care of children and the elderly typically falls on women’s sphere of responsibilities, women may find it hard to focus on their market work, in case they have one. Hence, women may be situated in a relatively disadvantageous position, if not, face de facto discrimination in the formal labor market.” —PIDS Policy Note
However, when women’s wages increase, their husbands’ time devoted to housework also increases, which according to the authors, may be interpreted as a way to support their career. “Given that taking care of children and the elderly typically falls on women’s sphere of responsibilities, women may find it hard to focus on their market work, in case they have one,” the authors said. “Hence, women may be situated in a relatively disadvantageous position, if not, face de facto discrimination in the formal labor market,” they added. To improve women's plight, the authors urged the government to explore the imposition of a four-day work week and tax incentives for salaried workers. The four-day work week will allow both women and men more time at home and share the burden of housework more equally. Tax breaks, meanwhile, will give households more financial room to take on helpers and/or provide supplemental care for children and the elderly. The study also urged the government to explore providing affordable day care and tutorial services, so that children may get good supplementary care while their parents are at work.
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PCA head crafts ‘executive version’ of P75-B coco-levy fund spending By Jasper Emmanuel Y. Arcalas @jearcalas
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he Philippine Coconut Authority (PCA) is crafting its own version of a legislative bill that would outline the utilization and management of the P75-billion coco-levy fund. Newly elected PCA Administrator Romulo dela Rosa said the PCA has started crafting the “executive version” of the coco-levy bill, which aims to “reconcile” with other bills filed before the Congress. “Right now we are forming the executive version of the [cocolevy] law. The executive version will try to reconcile the house and senate versions,” dela Rosa told reporters in a news briefing on Monday. Dela Rosa said they are fasttrack ing the bil l in order to present it before President Duterte’s second State of the Nation Address (Sona) on July 24, so that he could certify it as urgent. The PCA chief added they are hopeful the bill will be passed into law before the year ends. “Hopefully, before Sona, the President can certify it as urgent,” he said. “Within the year the law will be passed, so that the President can sign it and we could utilize the funds for the benefit of the coconut farmers and industry.” Dela Rosa said the executive version of the coco-levy bill aims to answer the “ambiguities” in the provisions of the bills filed before the House and the Senate. One of which is whether the P75 billion would be a perpetual trust fund (PTF) and how much of it would be put under PTF, dela Rosa added. “There are also views that the whole fund is not needed as PTF and there is also one that we should not anymore call it as perpetual trust fund, because that would be forever,” he said. “What we could do is to limit to say to about 25 years or 50 years and after which will see if we have to con-
tinue it as trust fund,” he added. The PCA chief also disclosed that one of the debates for the longawaited coco-levy law is how much would be initially shell out to rollout programs and projects for the development of the industry. “A good portion of what has not been agreed yet is the amount that should be immediately used for the programs. If it will be a trust fund, then only the interest would be used, which will only be about P2 billion a year,” dela Rosa said. “Some senators are thinking that the P2-billion annual funding is not enough and will not have any impact on the development of the coconut industry. So, might as well decide the amount that we will be initially used that will be impactful,” dela Rosa added. Once a law governing the utilization of the P75-billion cocolevy fund, the PCA will implement projects and programs targeting the development of the industry’s value chain, according to dela Rosa. “We shall work toward the passage of the law that will govern the utilization and management of the coconut-levy funds. Management of the fund shall ensure strong representation from farmers, manufacturers and government,” he said. “The utilization of the funds shall entail the establishment of a perpetual trust fund and the allocation of sufficient resources that will create the most impact within the short and medium term,” he added. In 2011 dela Rosa was appointed by former President Joseph E. Estrada as member of the coconutlevy trust fund committee tasked to prepare a plan for the administration and utilization of coconut-levy funds upon its recovery. Dela Rosa, who was unanimously voted by the PCA governing board to assume the administrator’s position, said that under his term, the PCA would balance its efforts and focus in developing both the agricultural and manufacturing aspects of the coconut industry.
House to prioritize science for change bill—Salceda
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he House of Representatives has prioritized the Science for Change Program (S4CP) bill, authored by Rep. Joey S, Salceda of Albay, when it resumes sessions in July. Speaker Pantaleon D. Alvarez has initiated the move. House Bill 4581 or S4CP, which the House Committee on Science and Technology has already approved, aims to accelerate investments in science and technology (S&T) and boost scientific innovations and inventions, and research and development to further enhance the country’s global competitiveness. Salceda, who authored the S4CP in collaboration with the Department of Science and Technology (DOST) and the country’s S&T—research and development community (R&D), also principally authored two other urgent measures both considered game changers—the Universal Access to Tertiary Education, now awaiting President Duterte’s signature; and the Tax Reform for Acceleration and Inclusion (Train), the government’s comprehensive tax reform package now with the bicameral committee. The S4CP measure, also dubbed as “Science for the People”, has a proposed P21-billion R&D
budget next that will more or less double yearly over the next five years, and could reach P672 billion in 2022. The country’s total R&D budget for 2017 is only P5.8 billion. Addressing the recent graduation rites of the University of the Philippine’s National Institute of Physics (NIP) Class 2017, Salceda cited the crucial role scientists and researchers play in the country’s race for global competitiveness. He urged the NIP graduates and professors to support S4CP and challenged them to “take your success to the next level…having reached another milestone, one that equipped you with knowledge and understanding, as you will face more challenges ahead.” Two factors have triggered Salceda’s S4CP formulation—the Unesco assessment that there is a critical need to increase the country’s number of researchers, scientists and engineers; and the hiked DOST budget, which includes higher allocations for the Philippine Science High School and DOST’s Science Education Institute. S4CP has four components—program expansion in seven areas, new programs in six areas, grand plan for S&T HRD and accelerated R&D program for capacity building of R&D institutions and industrial competitiveness. PNA
LLDA says 1996 Laguna de Bay Zomap may increase fish yield
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he Laguna Lake Development Authority (LLDA) is eyeing to revisit the 1996 Revised Laguna de Bay Fishery Zoning and Management Plan (Zomap) to boost lake-fish production. LLDA General Manager Joey C. Medina said the plan is to reduce the maximum allowable area for fish cages and pens
to just 25 hectares, while prioritizing the grant of permit to operate to small fishermen and enhance access to their traditional fishing grounds. A fter the one-year morator ium, and limiting fish-pens and fish-cage operation w ithin its car r y ing capacit y, which is 10 percent of the la ke’s sur face area,
Medina is confident of improved fisher y production in Lag una de Bay. Medina said they are now preparing to accept and process applications for fish-pens and fish-cage operation starting in January, officially dropping the plan to extend the moratorium imposed by former Environment Secretary Regina Paz L. Lopez.
“We cannot stop the operation of fish cages and fish pens in Laguna de Bay. Many people who depend on aquaculture will go hungry if we do that,” Medina said in Filipino. Environment Secretary Roy A. Cimatu, he added, wants the demolition of illegal structures outside the fish-cage and fishpen belt to continue to decongest
the lake, and as a policy, prioritize small fishermen in granting application for fish-pen or fish-cage operation in Laguna de Bay. Lopez had earlier vowed to remove all aquaculture structures in Laguna de Bay and disclosed plans to extend the one-year moratorium to allow the lake to recover and develop
the region for ecotourism. This means dismantling a total of 347 fish pens and fish cages covering 10,181.93 hectares as per official LLDA records. Of the 347, 222 are owned by corporations, while 114 are owned by individual businessmen. The remaining 11 are run and managed by cooperatives. Jonathan L. Mayuga
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PHL wants bold approach in fighting SE Asia’s drug menace By Jovee Marie N. Dela Cruz @joveemarie
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he Philippines will push for an “aggressive and bold” approach in addressing drug problems in the region during the 13th meeting of the Asean Inter-Parliamentary Assembly (Aipa), a leader of the House of Representatives said on Monday. In a news conference, Nacionalista Party Rep. Robert Ace S. Barbers of Surigao del Norte, chairman of the House Committee on Dangerous Drugs, said that, like the Philippines, Asean should “be aggressive and bold and brazen in the fight against drugs”. “We’ll now have the perfect venue to share information to cooperate with other Asean member-countries as far as the problems and the solution to the drug problem within the country and the Asean member-countries, as well,” Barbers said. “This is very timely because no other President in the country has ever taken this bold step of addressing this problem of drugs head-on,” he added. The Philippines is host to the 38th Aipa General Assembly this year.
Resolutions
Meanwhile, members of the Aipa are also expected to adopt two important resolutions during the 13th Meeting of the Aipa Fact-Finding Committee (Aifocom) to combat the drug menace. The first of two resolutions aims to highlight the urgency to forge inclusive partnership toward a drug-free Asean community, while the second calls to transform the Aifocom into an Aipa Advisory Council On Dangerous Drugs (Aipacodd) to strengthen its role and mandate as a parliamentary tool to combat dangerous drugs. The House leadership said the approval of the two resolutions is “imperative” in the wake of the alarming situation of drug abuse in the region, which has also become a transshipment hub for illegal drugs. The first resolution calls for an inclusive partnership toward a drug-free Asean community that recognizes Aipa partnership’s need to have a more holistic approach to the drug problem. It further recognizes the urgency to engage the support and cooperation not only of national governments and their law-enforcement agencies, but also of the private sector, the nongovernmental and civil-society organizations, and local communities. An inclusive partnership in the fight against the drug menace also means bolstering legal assistance among Aipa member-countries and strongly supporting the sharing of intelligence information, investigations and joint operations against illegal drugs. It could also mean supporting the requisite research activities and strengthening the framework to fight and prevent drug production, use and trafficking. The resolution will call on Aipa member-parliaments to enact new laws and review existing laws to determine the necessary amendments that will lead to harmonization of the legal framework on illegal drugs among Aipa membercountries and oversee the enforcement of said laws. The second resolution will call for transforming the Aifocom into Aipacodd and strengthening its role and mandate as a parliamentary tool to combat dangerous drugs. The Aipacodd would endeavor to facilitate the exchange of information and understanding among membercountries in their fight against dangerous drugs. It would also serve as the center to review existing laws, as well as its enforcement within Asean countries in its fight against drugs. Aipacodd would also ensure that Asean member-governments make accessible their laws, policies and programs on drug control and, at the same time, monitor the implementation of these laws and programs. The 10 member-countries of Aipa, namely, Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, will also present their respective country reports during the Aifocom meeting.
Editor: Max V. de Leon • Tuesday, July 4, 2017 A5
Lee family feud has damaged Singapore’s reputation, PM says
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dispute between the children of late Singaporean leader Lee Kuan Yew has damaged the country’s reputation and could dent public confidence in the government if it continues, according to his son, Prime Minister Lee Hsien Loong.
Lee spoke in parliament on Monday in a bid to lay to rest a spat with his two siblings over the estate of the country’s first prime minister, who died in 2015. Still, in his speech he acknowledged the dispute was unlikely to ever be resolved fully. “I know many Singaporeans are upset by this issue,” Lee said. “They are tired of the subject, and wish it would end,” he said. “I, too, am upset that things have reached this state.” “As your prime minister, I deeply regret that this has happened and apologize to Singaporeans for this. As a son, I am pained at the anguish this strife would have caused my parents to feel if they were still alive.” The spat burst into the public eye in the early hours of June 14, when the prime minister’s siblings issued a six-page statement on Facebook. Lee Wei Ling and Lee Hsien Yang accused their brother of maneuvering behind the scenes to undermine their father’s instructions to demolish the house he lived in for decades. They also criticized the prime minister’s wife, Ho Ching, who is chief executive officer of state investment firm Temasek Holdings Pte.
The tensions have gripped the island state for weeks with tit-for-tat accusations on social media, casting a shadow over Lee and his People’s Action Party-led government. Still, the PAP has a strong hold on power: It dominates the seats in parliament and increased its share of the popular vote in the last election.
‘Magic properties’
Lee Kuan Yew was prime minister from 1959 to 1990, turning Singapore into Southeast Asia’s richest nation by opening the island to foreign investors. He ran a tightly controlled state that emphasized incorruptibility and stability. Lee stepped down from the Cabinet in 2011. Lee Hsien Loong said he denied allegations by his siblings of nepotism and attempts to misuse his power. “Regarding the house, and how its continued existence enhances my aura as prime minister, if I needed such magic properties to bolster my authority after 13 years as prime minister I must be in a pretty sad state,” he told parliament. “And if Singaporeans believe that such magic works in Singapore,
Lee Hsien Loong. Bloomberg
I think Singapore will be in an even sadder state.” Lee, who became Singapore’s third prime minister in 2004, took the unusual step of lifting the party whip for Monday’s parliamentary sitting, meaning lawmakers can vote outside party lines. The PAP holds 83 of 89 parliament seats. The prime minister said he had sought legal advice but believed that suing his siblings would further besmirch their parents’ names. “It would also drag out the process for years, and cause more distraction and distress to Singaporeans,”
he said. “Therefore, fighting this out in court cannot be my preferred choice.” Lee, 65, has already signaled he doesn’t want to stay in office beyond the age of 70 and has been grooming a group of younger ministers for succession. In the 2015 election the PAP boosted its share of the popular vote by about 10 percentage points to nearly 70 percent, the highest since 2001. While delivering a televised national day speech last August, Lee stumbled more than halfway through the multihour address due to
Thailand’s ‘super baht’ may be too strong for its own good
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wo decades ago Thailand became ground zero of the Asia financial crisis, when its government scrapped a dollar peg with the baht, a devaluation that unleashed a wave of speculative attacks on other regional currencies and shook the global economy. Now, the baht is again posing challenges for Thailand—but this time because it may be too strong. Near-record foreign-exchange reserves and a current-account surplus have burnished the baht’s appeal as a regional haven and attracted foreign capital to Thai bonds. The currency is the strongest performer in Southeast Asia in the past year. The super baht, however, is a complication for policy-makers trying to nurture a recovery in an economy where exports account for about 70 percent of gross domestic product. The jitters caused by the baht reflect Thailand’s wider post-crisis task: How to shift from a low-cost manufacturer of hard disks and car parts to more advanced industries that can boost incomes further. The military government, under junta leader and Prime Minister Prayuth Chan-Ocha, is promoting Thailand 4.0 to bolster biotechnology, robotics, electric vehicles and other sectors by wooing investment and trying to improve work-force skills. “The longer-term challenge today is the competitiveness of industry,” Bank of Thailand Assistant Governor Chantavarn Sucharitakul said in an interview. “Particularly small- and medium-sized companies that benefited from the large depreciation of the currency in 1997, which today may have to find new business models to move to a higher value-added, more competitive space.” On the upside, Thailand’s sound fiscal, monetary and prudential oversight is trusted by investors and its debt ratios are in check after a “painful” process of reform over
the past two decades across banks, companies, households and the government, Chantavarn said. Thailand scrapped a dollar peg on July 2, 1997, as foreign reserves dwindled after attacks by speculators. The currency crashed, borrowers defaulted on dollar debt, financial institutions fell and a deep recession ensued. The nation drew $14.1 billion of international assistance to help with recovery. After long-term financial-sector repair and reform, foreign reserves today of $184.5 billion are second only to Singapore in Southeast Asia and exceed short-term external debt more than three times, according to the Bank of Thailand. The current-account surplus was 10 percent of GDP in the first quarter. The baht has climbed 3.4 percent against the dollar in the past 12 months, the most in Asia after Taiwan’s dollar and the Indian rupee. It was little changed at 33.99 against the dollar last Friday. The International Monetary Fund, which provided aid to Thailand in 1997, now says the external position is too strong. Central Bank Governor Veerathai Santiprabhob has rejected other claims that Thailand is limiting the currency’s climb for an unfair trade advantage, saying it steps in only when inflows surge. The high reserves could be partly
why the monetary authority has gradually liberalized outbound foreign-investment rules, according to Rahul Bajoria, a senior economist at Barclays Plc. in Singapore. “If investment projects pick up steam, we would expect demand for capital imports to rise, which may help create more even conditions for foreign exchange,” Bajoria said. Yet, private-sector investment has been subdued since the generals seized power in a coup in 2014, while a run-up in household debt is weighing on consumers. Economic growth is accelerating on a nascent export recovery, tourism income and government outlays. But it remains the weakest in emerging Southeast Asia at just over 3 percent. The current stretch of military rule is the longest since the early1970s, in a country that has endured about a dozen coups since putting an end to absolute monarchy in 1932. A new constitution promulgated in April set the stage for a possible return to some form of democracy next year. Amid the political uncertainty at home, Thai businesses invested a record $13 billion abroad in 2016, dwarfing inflows of $1.6 billion. Companies, including Asia’s biggest cement maker Siam Cement Pcl., or SCG, and renewable-energy business BCPG Pcl. are seeking to tap overseas markets.
The government is trying to turn the focus back on domestic opportunities. The administration has unveiled 56 major infrastructure projects worth about 2.3 trillion baht ($68 billion), Bank of Ayudhya Pcl. research shows. Thailand 4.0 is partly focused on a proposed 1.5-trillion-baht investment over five years to add railways, new cities and modern industry on the eastern seaboard, a plan the government says can link with China’s Belt and Road Initiative. Most of the money is expected to come from the private sector. Thailand is competing with the likes of Vietnam, Cambodia and Myanmar for foreign-direct investment (FDI), said Arthur Kwong, head of Asia-Pacific equities at BNP Paribas Asset Management Asia Ltd. in Hong Kong. “You really need to see more stability from a top-down perspective,” he said. “Thailand is no longer the only country available for FDI. There are more choices now and the attention has probably been diluted by new frontier markets.” Such competition also underscores the need for better skills. Thailand needs improved workforce education, especially with the population aging and the proportion of working age shrinking, said Ulrich Zachau, the Southeast Asia country director for the World Bank in Bangkok. “That’s a big structural issue for Thailand,” he said. The lender describes Thailand’s social and economic development over the past four decades as a remarkable escape from poverty. But while financial-sector reforms, substantial foreign reserves and Bank of Thailand banking oversight may provide a backstop against a repeat of the 1997 implosion, the question is whether the next four decades will see similar progress. Bloomberg News
a temporary drop in blood pressure. He returned to finish the speech after a one-hour break. He was given the all-clear for prostate cancer in May 2015, following surgery in February of that year to remove his cancerous prostate gland. That came more than two decades after Lee was treated and cleared of lymphoma. Finance Minister Heng Swee Keat, tipped as a potential successor for Lee, suffered a stroke during a Cabinet meeting in May last year. He resumed his duties in August. Bloomberg News
KKR targets Southeast Asia’s family businesses
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KR & Co., fresh off raising a record $9.3-billion fund, is gearing up to invest more in Southeast Asia as it seeks to capitalize on rising domestic consumption. The private equity firm is seeking to invest in companies catering to the region’s expanding middle class, which is demanding higher-quality products, according to Ashish Shastry, KKR Southeast Asia head. These demographic changes will fuel long-term growth in industries, like branded consumer products, health care, education, healthy foods and leisure, Shastry said in an interview in Singapore this month. KKR sees opportunities as many of the region’s self-made business tycoons get older and begin handing the reins to a new generation of leaders. The transition may lead companies to shed assets to focus on their core operations, according to Shastry. KKR would like to do “a lot more” in the underpenetrated Indonesian market and could also boost investments in Vietnam and the Philippines, he said. “Southeast Asia hasn’t fully realized its potential,” said Shastry, 41, who joined KKR last year after stints at TPG Capital and Northstar Group. “Given the family-owned business transformations across Southeast Asia in markets such as Indonesia and Malaysia, we see a great opportunity to invest even more in the region.” KKR’s private equity funds have deployed more than $2 billion in Southeast Asia since the firm started operating in the region in 2005. Its biggest deal so far has been the 2014 buyout of Goodpack Ltd., a Singapore-listed provider of bulk containers, for S$1.4 billion ($1.1 billion). In April KKR said it would spend $250 million buying stakes in Vietnamese conglomerate Masan Group Corp. and its meat business. Bloomberg News
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Tuesday, July 4, 2017 • Editor: Lyn Resurreccion
The World BusinessMirror
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Trump pushes to repeal health bill
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ASHINGTON—President Donald J. Trump made a weekend push to get a Republican Senate bill to repeal and replace former President Barack Obama’s health-care law “across the finish line”, Trump’s top legislative aide said last Sunday, maintaining that a repeal-only option also remained in play if Republicans can’t reach agreement.
Marc Short, the White House’s legislative director, said Trump was making calls to wavering senators and insisted they were “getting close” on passing a bill. But Short said Trump continues to believe that repeal-only legislation should also be considered after raising the possibility last Friday. Senate Majority Leader Mitch McConnell, Republican-Kentucky, has dismissed that suggestion and said he intended to proceed with legislation being negotiated over the July 4 recess. “We hope when we come back, the week after recess, we’ll have a vote,” Short said. But he added: “If the replacement part is too difficult for Republicans to get together, then let’s go back and take care of the first step of repeal.” Trump last Friday tweeted the suggestion of repealing the Obamaera law right away and then replacing it later, an approach that GOP leaders and the president himself considered but dismissed months ago as impractical and politically unwise. But the tweet came amid continuing signs of GOP disagreement among moderates and conservatives over the bill. Republicans hold a 52-48 majority in the Senate. Just three GOP defections would doom the legislation, because Democrats are united in opposition. Republicans returned to their home districts late last week, bracing for a flood of phone calls, e-mails and television advertising from both con-
servative and liberal groups aimed at pressuring senators. Sen. Bill Cassidy held a town hall meeting last Friday to talk about flood recovery in Baton Rouge, Louisiana’s capital city, but audience members angry over the GOP health-care bill at times chanted over Cassidy’s answers and criticized the secretive legislative process. “I wish we weren’t doing it one party,” Cassidy said last Sunday, adding he remains undecided on how he will vote. Trump’s suggestion had the potential to harden divisions within the GOP as conservatives complain that McConnell’s bill does not go far enough in repealing Obama’s healthcare law while moderates criticize it as overly harsh in kicking people off insurance rolls, shrinking the Medicaid safety net and increasing premiums for older Americans. “It’s not easy making America great again, is it?” McConnell said late last Friday. He has previously indicated that if Republicans fail to reach agreement, he will have to negotiate with Democrats, who want to fix Obama’s health-care law without repealing it. Short said the White House remained hopeful after Senate Republicans submitted two versions of the bill to the Congressional Budget Office (CBO) for scoring over the weeklong recess. Texas’s Sen. Ted Cruz is pushing a conservative version that aims to aggressively reduce costs by giving
India gives Iran $11B ‘best offer’ on natgas field
A Anne Kille (right) of Flemingsburg, Kentucky, protests the arrival of Senate Majority Leader Mitch McConnell, Republican-Kentucky, at the Lincoln Day Dinner on June 30, in Elizabethtown, Kentucky. AP/Timothy D. Easley
states greater flexibility to create separate higher-risk pools. The other seeks to bolster healthcare subsidies for lower-income people, perhaps by preserving a tax boost on high earners. Health and Human Services Secretary Tom Price said negotiations over the Senate bill were focusing on ways to address the issue of Medicaid coverage so that “nobody falls through the cracks”, combating the opioid crisis, as well as giving families more choice in selecting their insurance plan. “We think that Leader McConnell and his senators within the Senate are working to try to get this piece of legislation on track,” Price said. But conservative Sen. Rand Paul, Republican-Kentucky, said he didn’t think a repeal-and-replace bill could win 50 votes. Both he and Sen. Ben Sasse, Republican-Nebraska, have been urging McConnell to consider a repeal-only bill first. “I don’t think we’re getting anywhere with the bill we have. We’re at
an impasse,” Paul said. He criticized Senate leaders, saying they were seeking to win over moderates with multibillion-dollar proposals to combat the opioid epidemic and boost tax subsidies to help lower-income people get coverage. “The bill is just being lit up like a Christmas tree full of billion-dollar ornaments, and it’s not repeal,” Paul said. “I think you can get 52 Republicans for clean repeal.” Even before Trump was inaugurated in January, Republicans had debated and ultimately discarded the idea of repealing the overhaul before replacing it, concluding that both must happen simultaneously. Doing otherwise would invite accusations that Republicans were simply tossing people off coverage and roil insurance markets by raising the question of whether, when and how Congress might replace Obama’s law once it was gone. But at least nine GOP senators expressed opposition after a CBO
analysis last week found that McConnell’s draft bill would result in 22 million people losing insurance over the next decade, only 1 million fewer than under the House-passed legislation that Trump privately told senators was “mean”. Paul said he believes that Senate Republicans can do a repeal-only bill concurrently with a bill “they can call ‘replace’”. Sasse said he would like to see a bill that would repeal Obamacare “with a delay”. “If we can do a combined repeal and replace over the next week, that’s great,” Sasse said. “If we can’t, though, then there’s no reason to walk away.” “I would want a delay, so that we could get straight to work. And then I think the president should call on the Senate to cancel our August” recess, Sasse said. Short and Paul appeared on Fox News Sunday, Price and Cassidy were on NBC’s Meet the Press, and Sasse spoke on CNN’s State of the Union. AP
World nuke powers California marchers call for impeachment of Trump improve bombs while reducing arsenals
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Anti-Trump supporters rally at the Texas State Capitol on July 2 during an impeachment march in Austin, Texas, in hopes to gain attention and impeach Trump. Joshua Guerra /Austin American-Statesman via AP
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OS A NGELES —Demonstrators hoisting signs and chanting anti-Dona ld J. Trump slogans marched through downtown Los Angeles to urge Congress to impeach the president. The Los Angeles march was one of several similar gatherings last Sunday across California and the nation. One rally took place in Austin, Texas, the state’s capital.
Organizers say they believe the president has violated the US Constitution and obstructed justice. One banner called the president an “Illegitimate Corrupt Puppet”. Marcher John Meranda tells the Los Angeles Times he has attended five recent anti-Trump marches. The 56-year-old says he’s most recently frightened by the Republican proposal to cut billions of dollars
from the Medicaid program. A smaller group of pro-Trump protesters gathered nearby outside Los Angeles police headquarters. T he Tr ump supporters say they’re unconcerned about allegations that Trump tried to thwart a Federal Bureau of Investigation investigation of former national security adviser Michael Flynn. AP
he world ’s global nuclear warheads fell in the past year, as states that possess them pursue arsena l moder n i z at ion, accord i ng to the first study of nuclear forces data published by the Stockholm International Peace Research Institution (Sipri). As of July, the US, Russia, the UK, France, China, India, Pakistan, Israel and North Korea had about 4,150 deployed nuclear weapons, Sipri said. If all assets are counted, these states possess about 14,935 nuclear weapons, down from 15,395 at the same time last year, Sipri said. The pace of reduction—about 3 percent—remains slow, despite t he implement at ion of the US-Russian bilateral Treaty on Measures for the Further Reduction and Limitation of Strategic Offensive Arms since 2011, Sipri said. Both the US and Russia are modernizing, with the US planning to spend $400 billion by 2026 maintaining and updating its nuclear forces. Sipri said some estimates valued the US program at as much as $1 t r i l l ion over t he ne x t three decades. “The current US administration is continuing the ambitious nuc lear-moder ni zat ion pl ans
set out by P resident Ba rac k Obama,” Sipri associate senior fel low Ha ns K r istensen sa id in a statement. “The projected increases in US spending are not unexpected.” North Korea was estimated to possess enough fissile material for about 10 to 20 nuclear warheads, an increase on the estimates of previous years, Sipri said. North Korea’s Kim Jong Un says his country is in the final stages of developing an intercontinental ballistic missile that will be capable of delivering a nuclear warhead as far away as the US. All states possessing weapons have either begun to deploy new nuclear-weapon-delivery systems or announced their intention to do so, Sipri said. China has started a long-term modernization program focused on making qualitative improvements to its nuclear arsenal, while India and Pakistan are both expanding their nuclear-weapon stockpiles and developing their missi le - del iver y capabi l it ies, Sipri said. “This suggests that none of these states will be prepared to give up their nuclear arsenals for the foreseeable future,” Senior Sipri researcher Shannon Kile said in a statement. Bloomberg News
n Indian consortium is willing to spend as much as $11 billion to develop a giant Iranian natural-gas field and build the infrastructure to export the fuel as long as the Persian Gulf nation guarantees a “reasonable return” on the project, according to the company leading the group. ONGC Videsh Ltd. has offered to invest as much as $6 billion on the Farzad-B field and spend the remaining amount to build a liquefied natural gas (LNG) export facility, according to Narendra Kumar Verma, managing director of the overseas investment unit of India’s largest explorer, Oil and Natural Gas Corp. The group is seeking a return of about 18 percent, and Indian companies are willing to buy all the gas exported from the project, Verma said. “We have given our best offer to them. Now, it is up to them to agree or not agree,” Verma said in a phone interview. “We have told the Iranian authorities very clearly that some basic returns are necessary.” As India, the world’s fourthlargest LNG buyer, seeks to lock up gas resources to meet growing demand and spur the use of cleanerburning fuels, Iran is emerging from sanctions that stifled investment in its energy sector. The Persian Gulf nation on Monday plans to sign a formal contract with Total SA and China National Petroleum Corp. to develop its share of the offshore South Pars project, the world’s biggest naturalgas field. Officials from Iran’s Ministry of Petroleum and the National Iranian Oil Co. were unable to comment last Sunday on FarzadB. Iranian Deputy Oil Minister Amir Hossein Zamaninia said last month discussions with the Indian side on Farzad-B were continuing and have “very much advanced”. Iran was also in discussions with Russia’s Gazprom PJSC on the Farzad fields, he said. The two countries had aimed to conclude a deal by February on developing the field, which India has said holds reserves of almost 19 trillion cubic feet. The consortium, which includes Indian Oil Corp. and Oil India Ltd., has been trying to secure development rights to the Farzad-B gas field since at least 2009. The delay over a final outcome has started hurting oil trade between the two countries. India, which bought Iranian crude even during the years of US-led sanctions against Tehran, has recently reduced purchases, leading to the withdrawal by Iran of some benefits on sales in retaliation, Bloomberg reported in April. “We are ready to invest,” Verma said. “Ultimately, that’s positive for them.” The South Asian nation is promoting the cleaner-burning fuel to curb the use of more polluting alternatives, such as coal and petroleum coke, an oil-refining byproduct, to meet its pledge of slashing emissions by a third by 2030. ONG C V idesh a nd I nd i a n Oil each own 40-percent interest in the Farsi block that holds Farzad-B field, while Oil India has 20 percent. Bloomberg News
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Hackers find ‘ideal testing ground’ for attacks: Developing countries
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AN FRANCISCO—The attack had the hallmarks of something researchers had dreaded for years: malicious software using artificial intelligence (AI) that could lead to a new digital arms race in which AI-driven defenses battled AIdriven offenses while humans watched from the sidelines.
But what was not as widely predicted was that one of the earliest instances of that sort of malware was found in India, not in a sophisticated British banking system or a government network in the US. Security researchers are increasingly looking in countries outside the West to discover the newest, most creative and potentially most dangerous types of cyber attacks being deployed. As developing economies rush to go online, they provide a fertile testing ground for hackers trying their skills in an environment where they can evade detection before deploying them against a company or state that has more advanced defenses. The cyber attack in India used malware that could learn as it was spreading, and altered its methods to stay in the system for as long as possible. Those were “early indicators” of AI, according to the cybersecurity company Darktrace. Essentially, the malware could figure out its surroundings and mimic the behavior of the system’s users, though Darktrace said the firm had found the program before it could do any damage. “India is a place where newer AI attacks might be seen for the first time, simply because it is an ideal testing ground for those sorts of attacks,” said Nicole Eagan, CEO of Darktrace. At times, these attacks are simply targeting more susceptible victims. While companies in the US will often employ half a dozen security firms’ products as defensive measures, a similar company
elsewhere may have just one line of defense—if any. In the case of attacks carried out by a nation-state, companies in the US can hope to receive a warning or assistance from the federal government, while companies elsewhere will often be left to fend for themselves. Cybersecurity experts now speculate that a February 2016 attack on the central bank of Bangladesh, believed to have been carried out by hackers linked to North Korea, was a precursor to similar attacks on banks in Vietnam and Ecuador. That hackers managed to steal $81 million from the Bangladesh Bank generated headlines because of the size of the heist. But what interested cybersecurity experts was that attackers had taken advantage of a previously unexplored weakness in the bank’s computers by undermining its accounts on Swift, the international money-transfer system that banks use to move billions of dollars among themselves each day. It was an unprecedented form of cyber attack. But since then, the cybersecurity firm Symantec has found the method used against banks in 31 countries. The malware discovered by Darktrace researchers stopped short of being a full-fledged AIdriven piece of software. It did, however, learn while it was in the system, trying to copy the actions of the network in order to blend in. “What was concerning was that this attack, once it got into the network, used AI techniques, like trying to learn the behaviors of employees on the network, to remain undetected for as long as possible”,
Often the best way to see if a cyber weapon works is to try it out in a country without the best digital defenses, as recent attacks have indicated. Anthony Freda/The New York Times
Eagan said. She added she saw a future in which countries raced against one another to hire people skilled in developing complex algorithms that could be used to run such malware. Eagan’s company, which has headquarters in Cambridge, England and San Francisco, has increasingly found hacking incidents in India since it expanded there. As other cybersecurity companies enter Southeast Asia, Africa and other parts of the world where they have not had much presence, they will continue to discover new types of malware being tested in those markets, said Allan Liska, a senior threat intelligence analyst at Recorded Future, a cybersecurity firm based in Somerville, Massachusetts. “For several years, Taiwan and South Korea have been proven testing grounds for some of the more advanced groups in China,” Liska added. “Those countries have high-speed Internet, widespread Internet penetration and not a lot of security infrastructure in place.” He said: “We see a pattern among the attackers. They test something, make improvements and then, six weeks later, test again before launching it at their true targets.” As Internet use has expanded in Africa, Liska added, his com-
[Southeast Asia and Middle East countries have been tempting targets for hackers.] They are a testing ground for different kinds of environments. For hackers, they can be low-hanging fruit.”—Rock pany has noticed an increase in spear-phishing attacks in which hackers appear to be testing their skills in English- and French-speaking African countries. Spear phishing employs messages that appear innocuous but contain dangerous malware. They are one of the most popular forms of cyber attacks, though they largely depend on the attackers’ ability to hone a message that can fool a victim into opening a link or attachment. He said that in the spear-phishing tests his company had found, attackers appeared to be testing their language, but did not include the actual malware in the link, what he described as the payload. “They save that payload for when they are going to actually launch their attack in whatever French- or English-speaking country they are after,” Liska added. Countries across Southeast
Asia and the Middle East that have come online over the past decade have been tempting targets for hackers, said Chris Rock, an Australian security researcher and chief executive of the cybersecurity firm Kustodian. “They are a testing ground for different kinds of environments,” he added. “For hackers, they can be low-hanging fruit.” Doing tests in a country that presumably has fewer defenses is a double-edged sword, Rock said. On one hand, attackers can hone their skills. On the other hand, they risk being discovered. Once a cybersecurity firm has the signature of an attack, it can build defenses against it, and spread those defenses among its clients. Rock said that if one target “has, actually, installed a good defense and you get caught, then you have wasted your time.” New York Times
News Service
Trump tweets mock video beating a man labeled CNN
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was “beneath the office of the presidency”. A White House aide insisted the tweet should not send a chill across the media landscape. “I think that no one would perceive that as a threat,” Homeland security adviser Tom Bossert said. “I hope they don’t. But I do think that he’s beaten up in a way on cable platforms that he has a right to respond to.” CNN accused Trump of engaging in “juvenile behavior far below the dignity of his office”. White House officials traveling with Trump during his weekend stay at his New Jersey golf club did not immediately respond to questions about who made the video or about any message the president might have intended to send. The video appeared to be a doctored version of an appearance Trump made on a WWE Inc. show called “Battle of the Billionaires” in 2007, in which Trump appears to attack WWE CEO Vince McMahon. McMahon’s wife, Linda, who founded and built the company with her husband, now heads the Small Business Administration for Trump and was a generous benefactor to his campaign.
The video was posted several days ago by a Reddit user with the title, “Trump takes down fake news”. It was not clear whether that was where it originated or where Trump found it. Still, the user wrote last Sunday about being “honored” Trump had tweeted the video. The user who posted the video has a history of posts using anti-Muslim and anti-immigrant language. The president’s verbal shots against news outlets and individual members of the media have grown increasingly personal in recent days even as lawmakers in both parties say the insults only threaten to undermine his political agenda. Trump has singled out MSNBC host Mika Brzezinski and CNN for some of his most biting criticism, and hardly is backing down in the face of widespread condemnation from the political class. “The fake media tried to stop us from going to the White House, but I’m president and they’re not,” Trump told a supportive crowd last Saturday in Washington. A White House spokesman, Sarah Sanders, told reporters last week that Trump “in no way, form or fashion has ever promoted or encouraged violence”.
CNN, in its response to the video posted last Sunday, said it was “a sad day when the president of the United States encourages violence against reporters. Clearly, Sarah Huckabee Sanders lied when she said the president had never done so.” C N N ’s s t a t e m e n t n o t e d the weighty list of issues before Trump—an overseas trip this week that includes a meeting with Russian leader Vladimir Putin, the stalled health-care bill, the threat from North Korea. Instead of focusing on those matters, CNN said, “He is involved in juvenile behavior far below the dignity of his office. We will keep doing our jobs. He should start doing his.” Trump’s latest tweet came as Republicans and Democrats have been imploring him to focus on leading the country, rather than exploding on social media. For days, Trump has focused his ire on Brzezinski and Joe Scarborough, cohosts of MSNBC’s Morning Joe. Trump took to Twitter last Thursday to call Brzezinski “crazy” and contend she was “bleeding badly from a face-lift” when he once saw them at his Florida estate. The comment was decried as sexist
and vulgar by many Democrats and Republicans. The MSNBC personalities said last Friday that Trump was lying about their December encounter and they questioned his “unhealthy obsession” with their program. The hosts, who are a couple onscreen and off, also said the White House told them a damaging National Enquirer story about how their relationship would “go away” if they called the president and apologized for harsh commentary. Trump quickly disputed the claim on Twitter. Republican officia ls acknowledged last Sunday that Trump’s Twitter feed distracts from work like health care. “We in Washington, we in the country, cannot be focused on tweets,” said Sen. Bill Cassidy, Republican-Los Angeles, adding that “I get so frustrated when we get focused on tweets.” Gov. John Kasich, RepublicanOhio, said he hoped Trump’s family would talk to him and say, “Knock it off.” “The coarseness doesn’t help anybody,” he added. Bossert and Kasich appeared on ABC’s This Week. Cassidy was on NBC’s Meet the Press. AP
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US to allow laptops aboard Etihad flights
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‘Encourages violence against reporters’ RIDGEWATER, New Jersey—In his latest jab at the media, President Donald J. Trump last Sunday tweeted a mock video that shows him pummeling a man in a business suit—his face obscured by the CNN logo—outside a wrestling ring. It was not immediately clear who produced the brief video, which appears to be a doctored version of Trump’s 2007 appearance on World Wrestling Entertainment Inc. (WWE). The 28-second clip was posted on Trump’s official Twitter account, with the message: “#FraudNewsCNN #FNN”. The president in the past has branded the media as “the opposition party” and “the enemy of the American people”. He has taken particular aim at CNN, calling the network “fake news”. Trump stayed on the attack later in the day, stating on Twitter that “the dishonest media will NEVER keep us from accomplishing our objectives on behalf of our GREAT AMERICAN PEOPLE!” Bruce Brown, the executive director of the Reporters Committee for Freedom of the Press, condemned the video as a “threat of physical violence against journalists”. He said Trump’s tweet
Tuesday, July 4, 2017
ASHINGTON—US officials last Sunday exempted Etihad Airways from a ban on laptops and other ty pes of electronics on some flights bound for the US, restrictions instituted in March because of concerns that the Islamic State (IS) group was developing a bomb that could be hidden in portable devices. The flights were cleared, according to Etihad and US officials, because the airline had begun conducting more rigorous passenger screening at Abu Dhabi International Airport, where it is the national carrier of the United Arab Emirates (UAE). T he Department of Homeland Secur it y said last week that the laptop ban would be lifted for airlines that fulfilled new requirements to increase security. “Etihad Airways’s rapid implementation of the enhanced security measures are a testament to the close collaboration, effective communication and shared security commitment between [the] TSA [Transportation Security Administration], the international civil-aviation authorities and industry,” Lorie Dankers, a spokesman for the TSA, said in a statement. The Abu Dhabi airport also has a station where Etihad passengers go through US Customs and Border Protection screening before boarding flights bound for the US, rather than after landing there. Etihad has 45 flights every week to six US cities. “We welcome the decision by the US Department of Homeland Security to lift the electronicdevices ban on flights between Abu Dhabi and the US, following the successful validation of security measures,” the airline said in a statement. I n M a rc h home l a nd- sec u r it y of f ic i a l s, c it i ng sec u r it y concer n s, ba r red pa ssengers from bringing electronics larger than cellphones aboard f lights to the US from some majority-Muslim nations. US officials said at the time that intelligence showed that IS was designing explosives hidden in laptop batteries, prompting the ban. Severa l of Et ihad ’s r iva ls, including Emirates and Qatar Airways, were also affected by the ban because they operate in countries covered by the order. In April Emirates cited new security restrictions in announcing it would cut 25 flights a week to US cities. As recently as late-May, John F. Kelly, the secretary of homeland security, had considered banning laptops on all f lights to the US. Last week the department announced that passengers flying to the US from all foreign airports would face a more comprehensive examination of luggage and electronic devices. Airport officials in Dubai, in the UAE; Jordan, Qatar, Saudi Arabia, Morocco, Turkey, Egypt and Kuwait are sti l l responsible for restricting the larger dev ices from nonstop f lights to the US. The Department of Homeland Security ordered passengers to stow those electronics in their checked luggage or leave them behind. Dankers of the TSA said that the agency was eager to work with other airlines to carry out the new security procedures. New York Times
News Service
A8 Tuesday, July 4, 2017
The World BusinessMirror
Trump presses Xi, Abe for help over ‘growing threat’ of N. Korea D
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Arab nations extend deadline in Qatar crisis by 48 hours
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resident Donald J. Trump spoke with President Xi Jinping of China on Monday to appeal for his help with what he called the “growing threat” posed by North Korea’s nuclear weapons program, the White House said. The United States and China have clashed recently over Washington’s arms sale to Taiwan, among other issues. Trump also spoke with Prime Minister Shinzo Abe of Japan about North Korea, and they highlighted “their unity with respect to increasing pressure on the regime to change its dangerous path”, the administration said. Trump and Abe agreed on the need for China to be firmer with North Korea, Japan’s Chief Cabinet Secretary Yoshihide Suga told reporters on Monday. The discussions are taking place at a delicate time in the Asian region and just several days before world leaders are set to converge in Germany for the Group of 20 (G20) summit meeting, which starts on Friday. North Korea’s belligerent behavior continues to dominate diplomatic talks, and analysts have warned of the possibility of another nuclear test.
$1.4B
The amount of weapons Washington accused China of selling to Taiwan Trump had for months based his strategy on the hope that China, North Korea’s chief ally and trading partner, could persuade Pyongyang to abandon its weapons program. But Trump acknowledged recently that those efforts had failed. As a result, he has sharply escalated pressure on Xi to do more to punish the North. The Trump administration last week imposed sanctions on a Chinese bank, accusing it of acting as a conduit for illicit North Korean financial activity. And Washington has taken a series of additional
steps recently seen as affronts to Beijing, including accusing the Chinese government of human-rights violations and selling $1.4 billion in weapons to Taiwan, which China regards as its territory. In the latest sign of tension, a US naval destroyer last Sunday sailed near disputed territory claimed by Beijing in the South China Sea, prompting a furious response from the Chinese government. During the call on Monday, Xi said the relationship between the two countries had shown progress but was also affected by “negative factors”, according to Chinese news reports. He urged the US to handle Taiwan in accordance with the “OneChina” policy. Under that policy, which has been in place since 1972, the US recognized a single Chinese government in Beijing and severed its diplomatic ties with Taiwan. In response, Trump reiterated his pledge to uphold the One-China policy, the Chinese news media reported. Cheng Xiaohe, an associate professor of international relations at Renmin University in Beijing, said that given the recent actions by Trump, it was “a little bit odd” that Xi had agreed to the phone call. Still, he said, the gesture seemed to indicate that China was seeking to maintain “stability and some momentum” with Trump and, per-
haps, deter him from resorting to more extreme measures, such as a military response. “The actions the administration has taken have upset the Chinese, no doubt about it,” Cheng said. “The conversations demonstrate that China is still willing to talk with Trump and work with the US government to deal with North Korea’s nuclear issues.” Increasingly, Trump is also looking to other Asian nations, including Japan and South Korea, for help in resolving the crisis. Kyodo News, a Japanese news agency, reported that Abe had praised the Trump administration’s decision to impose sanctions on Chinese entities accused of conducting illicit business with the North. The agency said Trump and Abe agreed to hold trilateral talks on North Korea with South Korea’s newly elected president, Moon Jaein, on the sidelines of the G-20 meeting in Hamburg. Trump met Moon at the White House last Friday. Moon has urged dialogue with the North—an idea that Trump’s advisers have shown little interest in. Amid the tensions, North Korea has continued to stridently defend its weapons program. On Monday, the North reiterated that its missiles “can hit any target in a speedy and accurate manner”, according to Yonhap, a South Korean news agency. New
York Times News Service and Bloomberg News
OHA, Qatar—A group of Arab nations early on Monday extended a deadline for Qatar to respond to their list of demands in a diplomatic crisis roiling the Gulf, saying Kuwait’s emir requested the delay as part of his efforts to mediate the dispute. Saudi Arabia, the United Arab Emirates, Egypt and Bahrain cut off ties with 2022 Fédération Internationale de Football Association World Cup host Qatar on June 5, restricting access to their airspace and ports and sealing Qatar’s only land border, which it shares with Saudi Arabia. They issued a 13-point list of demands to end the standoff on June 22, and gave the natural gas-rich country 10 days to comply. The joint statement early on Monday by the four Arab nations said they expected Qatar to respond to their demands on Monday. The new deadline would expire late on Tuesday or early Wednesday. “The response of the four states will then be sent following the study of the Qatari government’s response and assessment of its response to the whole demands,” the statement said. The four nations cut ties to Qatar over allegations it supports extremists and over worries it maintains too-close ties to Shiite power Iran. Qatar has long denied sponsoring extremist groups and maintains ties to Iran, as it shares a massive offshore natural-gas field with the country. “Qatar is not an easy country to be swallowed by anyone. We are ready. We stand ready to defend our country. I hope that we don’t come to a
stage where, you know, a military intervention is made,” Qatari Defense Minister Khalid bin Mohammed alAttiyah told Sky News. The White House said President Donald J. Trump spoke last Sunday night with King Salman bin Abdulaziz Al Saud of Saudi Arabia, Crown Prince Mohamed bin Zayed Al Nahyan of Abu Dhabi and Emir Tamim bin Hamad Al Thani of Qatar. It said Trump urged unity and reiterated the importance of stopping terrorist financing and discrediting extremist ideology. Qatar’s main QE stock index lost more than 3 percent when it reopened last Sunday following a weeklong hiatus for the Eid al-Fitr holiday break—its first session since the demands were laid out. It eventually recovered some of its losses later in the trading session to close down 2.3 percent at 8,822.15. Qatari supermarkets saw panic buying when the four countries initially cut ties. But the capital, Doha, was largely calm last Sunday, as residents waited to see how the crisis would play out. Abdelaziz al-Yafaei, a Qatari, out for an evening walk along the city’s bayside, said he was reassured that things would be fine, regardless of what happens over the course of the next days. “We have a government, thank God, that is wise and knows how to provide for all of our needs, how to maintain security,” he said. “We have enough funds in the country, on the economic side. All of the affairs are headed for the better.” AP
Focus shifts from Mosul to Raqqa
Iraqi civilians flee through a destroyed alley, as Iraqi Special Forces move toward Islamic State positions in the Old City of Mosul, Iraq, on June 30. AP/Felipe Dana
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YN ISSA, Syria—Forces backed by the United States have nearly sealed off the northern Syrian city of Raqqa, trying to trap as many as 2,500 hardcore Islamic State (IS) militants defending the capital of their selfproclaimed caliphate. The forces, known as the Syrian Democratic Forces, are made up of Syrian Kurdish and Arab fighters, and they have received crucial support from the US-led coalition fighting the IS in Syria and Iraq. The coalition has already destroyed the two bridges that lead south from Raqqa, which is nestled on the northern bank of the Euphrates River. The coalition also helped the force establish control of two nearby dams. “And we shoot every boat we find,” said Lt. Gen. Stephen J. Townsend, the US commander of the coalition force fighting the IS militants. “If you want to get out of Raqqa right now, you’ve got to build a poncho raft.” As Iraqi forces are mopping up the last pockets of IS resistance in the Iraqi city of Mosul, the battle for Raqqa provides the US-led co-
alition—and the Trump administration—with an opportunity to deliver a blow to the IS, also known as Islamic State in Iraq and Syria or Islamic State in Syria and the Levant, by capturing its most visible territorial claim to a caliphate. Still, the Kurdish and Arab fighters trained and equipped by the US-led coalition are just now carrying out the first push in what promises to be a bloody and difficult operation. Most IS leaders and personnel responsible for administering the caliphate and plotting attacks have evacuated the city. They have relocated to Mayadin, a Syrian town east of Raqqa on the Euphrates River, according to coalition officials who are familiar with intelligence reports. And IS militants are still defending strongholds in other towns in the Euphrates River valley, which stretches from Deir ez-Zor in Syria to Rawah in Iraq, as well as the Iraqi towns of Tal Afar and Huwaija. For now, Raqqa is the focus, and Townsend met last Wednesday near Ayn Issa, Syria, with the commander of the Kurdish and Arab fighters to discuss the next phase of the fight.
Coalition officials said the city was virtually surrounded, and the one gap that remained along the river could be easily observed from the air. It is estimated that more than 1,100 militants have been killed in the past month. Of those who remain, almost a third are believed to be foreign fighters recruited by the IS. About 50,000 civilians also remain in the city, and military officials said the militants plan to use many of them as human shields. US commanders and leaders of the Syrian Democratic Forces have sought to ensure that at least threequarters of their roughly 6,000 fighters in and around Raqqa are Arab. The inclusion of the Syrian Kurds, who are generally regarded as the most battle-hardened fighters, in the offensive has outraged Turkey, a North Atlantic Treaty Organization ally whose relations with the US have become increasingly fraught. But Townsend acknowledged the importance of the Kurdish fighters in strengthening the Arab forces trying to rout the IS from Raqqa. New York Times News Service
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Advisory group discusses post-martial law scenario in Marawi City, Mindanao By Manuel T. Cayon Mindanao Bureau Chief
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AVAO CITY—The multisectoral group advising the Armed Forces of the Philippines (AFP) in implementing martial law in Eastern Mindanao said it has recommended actions to the government to prevent the occurrence of a terror attack similar to what happened in Marawi City in a post-martial-law scenario. While the first assessment on June 30 did not mention the lifting martial law as yet, the military’s Eastern Mindanao Command (Eastmincom) said the Multisectoral Advisory Group “is looking beyond martial law. The group discussed how to prevent another crisis similar to that of Marawi from happening in the future”. “The body came up with a recommendation for the Eastmincom to include in their peace advocacy, both internal and external audience, awareness on violent extremism,” the Eastmincom said in its Internet posting last Sunday. The report said “members of the MSAG [multisectoral advisory
group], who have vast knowledge, studies, research and experience on the matter, are willing to share their expertise in crafting a module”. The advisory group suggested guidelines crafted by the Eastmincom legal team “with inputs from the Integrated Bar of the Philippines and the Ateneo de Davao Law School should be shared with the PNP [Philippine National Police].” The advisory group met on June 30 at the headquarters of the Eastmincom at the Naval Station Felix Apolinario in Panacan, north of downtown Davao City, to assess the ongoing implementation of martial law. It was the first insinuation of a possible lifting of martial law, but no recommendation as the date or length of time of the implementation was being floated around. President Duterte placed the decision to the AFP. The Eastmincom said the chief impact of martial law was preventing the possible spillover of the terror attack in Marawi City to the rest of Mindanao and said it was “largely attributed to the tightened security measures that are being implemented”.
Editor: Efleda P. Campos • Tuesday, July 4, 2017 A9
NIA breaks ground for new water reservoir in Bohol town
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By Charles R. Pepito | Correspondent
HYSICAL works for the Bonotbonot Small Reservoir Irrigation Project (SRIP) in Buenavista town in Bohol is now set to go full blast.
This after Cabinet Secretary Leoncio B. Evasco Jr., Administrator Ricardo Visaya and Region 7 Director Modesto Membreve of the National Irrigation Administration (NIA), Rep. Erico Aristotle Aumentado of Bohol ’s Second District and Buenavista Mayor Ronald Lowell Tirol led g rou ndbrea k i ng r ites at t he proposed site. As early as November 2015 Aumentado had revealed the P70million project to be proposed in
NIA’s 2016 Fund for insertion into the General Appropriations Act (GAA). The solon’s father, former governor and immediate congressional predecessor Erico Boyles Aumentado, and Membreve had proposed the project, along with the Benliw (Ubay) SRIP at P100 million, the Mabini-Cayacay SRIP at P85 million and the Malinao (Pilar) Dam Improvement Project at P200 million. For Tagbilaran City-based NIA
Region 7, only these four projects made it to the cut in the 2016 GA A under its locally funded rapid, inclusive and sustained economic-growth projects. While most regional offices are based in Cebu, the elder Aumentado pushed for the creation of the NIA Region 7 office in Bohol—the region’s rice granary. Bohol used to belong to NIA Region 8, based in Tacloban City. T h e E v a s c o -V i s a y a - M e m bre ve - Au me nt ado te a m a l so visited Danao town, where the Hibale SRIP is also being planned to be constructed. Aumentado said Evasco and President Duterte are working hard to give more benefits to the farmers. Evasco was Duterte’s campaign manager during the latter’s presidential bid. Both are working toward the realization of their campaign promise of construction more irrigation projects and that farmers will be able to
avail of irrigation services, this time, free of charge. The solon added he and Visaya, retired chief of staff of the Armed Forces of the Philippines, will meet in Manila, most likely before the Chief Executive gives his State of the Nation Address, with would-be investors for the Hibale and the Northeast Bohol Catch Basin. As envisioned by the elder Aumentado, the huge project is expected to irrigate 19,000 more hectares of rice lands in the northern Bohol towns. On top of irrigation, it will also have power, potable water and ecotourism components. It will be designed to generate at least 10 megawatts of power. It is also expected to make potable water available to far-flung barangays not yet served by the existing small waterworks projects of the beneficiary towns, the solon added.
Duterte’s task force vs media killings hailed
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HE Presidential Task Force on Media Security (PTFoMS) drew praises from media workers and their families who were recent victims of violent crimes in connection with their job. Pangasinan-based radioman Virgilio Maganes, for one, thanked PTFoMS for its prompt action on his case that resulted in the arrest of a suspect behind his botched assassination last November. Maganes, a columnist of the local newspaper Northern Watch and a commentator of DWpr Radyo Asenso based in Dagupan City, said police operatives, led by Deputy Chief of Police Rodrigo Lubiano in Urdaneta City, arrested Michael Prado y Tagle, 33, a resident of Puelay village in Villasis town on June 10 by virtue of a warrant of arrest dated April 3 issued by Judge Junius T. Dalaten of Regional Trial Court Branch 50 here. Maganes was on his way to the Villasis town proper in the morning of November 8, 2016, when the tricycle he was riding was tailed by motorcycle men riding in tandem. Three gun shots were fired at the back of the tricycle and one shot hit him when the suspects left the crime scene. PTFoMS Executive Director Undersecretary Joel Sy Egco, himself a former mediaman, visited Maganes at the hospital hours after the shooting and instructed investigators to leave no stone
unturned in finding the culprits. “I am very grateful for the help of PTFoMS, especially President Duterte who has shown his deep concern for media workers’ safety by creating the task force,” Maganes said. Presidential Communications Operations Office Secretary Martin M. Andanar pushed for the creation of the Task Force last year, along with the Freedom of Information Executive Order signed by Duterte. Edralyn Pangilinan, the widow of slain Catanduanes News Now publisher Larry Que, expressed appreciation to the PTFoMS for ensuring the delivery of justice for the Que patriarch, who was gunned down on December 19, 2016. Que died the next day. Pangilinan and Marlon Suplig, also a local broadcaster filed charges of murder with the Department of Justice (DOJ) against Gov. Joseph Cua, a certain Prince Subion and policemen Vincent Tacorda and Dan Bagay. “We are thankful for the sincerity of the Duterte administration in serving justice for slain mediamen. We are aware of the PTFoMS’ sacrifices. The task force has provided security for our family as we go along this lengthy fight for justice,” Pangilinan said. During the PTFoMS’s last meeting, DOJ Assistant Secretary Juvy R. Manwong said a panel of prosecutors has been formed to handle the case of Que.
“This proves President Duterte pays no lip service to the people he promised to serve. We are forever grateful to him and the people behind PTFoMS,” Suplig said. Last week six of the biggest media groups in the country issued a manifesto of support for Que’s family and friends’ quest for justice. “We condemn in the strongest possible terms any and all forms of violence against media workers and, likewise, strongly urge all those concerned to expedite the resolution of this case,” the group said. The signatories are Melinda Quintos de Jesus, executive director, Center for Media Freedom and Responsibility; Paul Gutierrez, president, National Press Club; Ryan Rosauro, chairman, National Union of Journalists of the Philippines; Ruperto Nicdao Jr., president, Kapisanan ng mga Brodkaster ng Pilipinas; Nelson Santos, president, Publishers Association of the Philippines Inc.; and Ariel C. Sebellino, executive director, Philippine Press Institute. In its six-month accomplishment report to the president in May, PTFoMS noted the latest sur vey of The Press Freedom Index showed the Philippines ranked 127th, an improvement of 11 notches from its previous position in 2016 (138th). This was the fourth-steepest improvement
FROM GREEN TO GOLD
Tobacco farmers in Narvacan, Ilocos Sur, continue to grow tobacco—their lifeline and main source of livelihood—even if local government officials have advised them to shift to alternative crops and livelihood. LAILA AUSTRIA
among 180 countries worldwide. Egco said the task force has also noticed a significant improvement in media-worker security under the Duterte administration, owing largely to the proactive measures now in place to ensure a safer environment for members of the working media.
A number of new cases handled by the PTFoMS since its creation in October 2016 involved threats, harassment and physical assault against journalists. Besides the murder of Que, the Presidential Task Force reported the following cases: eight shooting incidents, eight threats, one detention, one
request for continued witnessprotection program coverage, two for physical attack, one complaint and one for arrest. A follow-up was also conducted in the case of Jun Pala following the public admission by retired policeman Arturo B. Lascañas of his participation in the killing.
Group launches vaccination program for children of Benguet coffee farmers
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HILDREN aged 3 and 4 from day-care centers in Barangay Pico, La Trinidad, Benguet, were recently given immunization shots in a vaccination program under “Beans for the Little Ones”, an initiative by the Foundation for Sustainable Coffee Excellence (FSCE) and Henry & Sons, in partnership with the Vikings Group, creator of Vikings Luxury Buffet. “The future of coffee lies in the hands of the coffee-farming children,” social entrepreneur, coffee explorer and innovator, and FSCE Director Michael Harris Conlin said. The medical mission was held as FSCE’s way of ensuring the children of La Trinidad’s coffee-farming communities are kept in good health and in proper condition. FSCE, a nonprofit organization, took on the challenge of bringing the Philippines back to the global coffee spotlight. “The Philippines used to be the fourth-
largest producer of coffee in the world, and today we are at around No. 110,” Conlin said. “Beans for the Little Ones, an FSCE initiative, is part of a bigger plan to address the farmer’s needs in livelihood, equipment, potable water, education and health.” T he v acc i n at ion pro g r a m brought together barangay officials and volunteers from the municipal health and child-development center to give out more than 180 flu vaccines to children from around nine day-care centers in Barangay Pico. “Barangay Pico is really lucky to get this kind of attention,” La Trinidad Municipal Mayor Romeo Salda said. “It’s the first of its kind for an event centered on the health of the children to happen,” he added. In an interview, the mayor underscored how crucial immunization is to help boost children’s immunity against diseases, especially now that the transitional weather looms.
“It’s a big help to the parents. Vaccines are something they can’t really afford,” barangay official Corazon Fianza said. “In our daycare centers, when we look at their children’s Early Childhood Care and Development records, most of the vaccines aren’t complete.” “Regular vaccination is a child’s lifeline,” said head nurse Sharaine S. Mayomis, RN-NDP. Aside from the various sicknesses immunization helps keep at bay, she stated that cases of malnutrition and underweight children are also issues that, although can’t be avoided, should still be prevented. “A big chunk of the concern related to our once lauded coffee trade is the lack of interest from future generations to carry on the craft,” Lim said. “This is why we’re here to work closely with the farmers. We decided to focus on key areas—and their future generation is part of that. With that said, we thought of starting a program
dedicated solely on that aspect. That gave birth to the Beans for the Little Ones initiative.” “The Vikings Group sails as one with Henry & Sons in caring for the health of the younger members of the coffee-farming communities of La Trinidad. We understand the value of inspiring the next generation and cultivating their interest in coffee while keeping their health a priority,” Vikings Group Marketing Director Donna Fernandez said. FSCE’s partnership with Vikings entails a donation of P30 (for every purchase of Henry & Sons coffee) to be given back to beneficiaries of the Beans for the Little Ones initiative. The Beans for the Little Ones program also comes in a coffee blend made for the benefit of the kids of La Trinidad’s coffeefarming communities. Proceeds from the sale will help fund more vaccination programs and other related pursuits.
LA TRINIDAD, Benguet, Mayor Romeo Salda (right) shakes the hand of FSCE Director Michael Harris Lim who recounted on stage the foundation’s help in La Trinidad’s last dengue outbreak. FSCE donated mosquito nets to Barangay Beckel under the “Beans for the Little Ones” initiative.
A10 Tuesday, July 4, 2017 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
Retirement
H
ow old is too old? Does one’s age have something to do with one’s ability to do a job? At 72 years old, Rodrigo R. Duterte is proving he is not too old to serve as president of the Philippines, still going strong after his 100th day in office. At 39, Manny Pacquiao should probably hang up his gloves and concentrate on his career as a politician, being just a shadow of his former self as a boxer. When Pope Benedict XVI resigned in 2013, citing the frailty of old age, he was two months short of his 86th birthday. A Bloomberg story then said the Pope’s retirement “may force aging lions from politics, academia and business to confront that painful question” of whether one is too old to lead, as they continue to rule their empires in their 80s and even 90s. Today, some of these business leaders are still very much around. Warren Buffet and Rupert Murdoch are both 86. BP Capital Llc.’s Thomas Boone Pickens Jr. is 89, and Hong Kong business magnate Li Ka-Shing is 88. To this list, we add our own local tycoons, like the 92-year-old SM Group patriarch Henry Sy; JG Summit’s John Gokongwei, 90; Metrobank’s George S.K. Ty, 84; Eduardo Cojuangco Jr., 82; Roberto Ongpin, 80; and Lucio Tan, 83. These business leaders are lucky to have the option of postponing their retirement if they want to, even with their nest eggs fully secure. Perhaps, what they say about the golden rule is true—that he who has the gold makes the rules. Politics provides no age limits as well, as old politicians cannot be forced to retire unless voters get tired of voting them into office. The age-limit exemption applies both to constitutional and judicial offices in the government. A large percentage of older Filipino workers, though, don’t have the same option. They can’t work after a certain age even if they want to or need to, and even if they practically have no assets to fall back on. Only about 25 percent of workers in the Philippines are covered by formal pension schemes or other forms of social protection, according to a study sponsored by the Asian Development Bank. The retirement age is 65 for government employees and at least 60, but not more than 65, in the private sector as per the Labor Code, unless it is dictated by a collective bargaining agreement or employment contract, in which case it could even be younger. For instance, flight attendants of Philippine Airlines have to retire when they reach 40. Thankfully, rampant age discrimination in the country has been made illegal through Republic Act 10911, which was passed into law last year and was fully implemented in February this year with the Labor Department’s issuance of its implementing rules and regulations. Perhaps another law extending compulsory retirement ages or providing measures for reemployment beyond retirement can be considered by Congress? Age can have a bearing in a worker’s qualifications for a certain job in a positive way. Because the older you are, the more experience you have in your previous jobs, in previous careers even. And the skills and experience you have gained throughout your working life will serve you well should you wish to continue working after retirement, perhaps, or should you wish to change careers later on. That’s why older workers who want to continue working full time or work at a different place for a few days a week after their retirement, as well as older workers who want to shift to second careers or just transfer jobs should not be prevented from doing so just because they have a few more digits in their lifespan, a fact that should work for them and not against. A lot of employers are missing out on a golden opportunity (no pun intended) to hire more mature workers who can give them, to borrow an American term, the biggest bang for their buck. If they can be more open-minded and would not tie down jobs to particular age brackets then they would find that a lot of older people would be more than qualified and would also gladly fill certain job vacancies for which there are a dearth of qualified applicants. People should not have any regrets about growing old. Not everyone has that privilege. But being useful keeps people youthful. Let us not prevent people from being useful and youthful, whatever their age may be.
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Rebuilding Marawi Manny B. Villar
THE Entrepreneur Continued from A1
B
ratton, in interviews cited by the New York Post, said attacks on “soft targets”, like London Bridge, Manchester Arena and Bastille Day in Nice, in the past 12 months, would indicate that similar attacks in the US were inevitable. The Daily Caller, in another report, said Europe was waking up to the new norm: abrupt acts of murder using knives, guns and motor vehicles instead of the more sophisticated and complicated explosive devices. In an online report for the USbased The Daily Caller, Islamist Watch Director Sam Westrop said before 2010 terrorist groups, like al-Qaeda, and other Islamist groups used large explosions, which resulted in large numbers of casualties and damage, but required long periods of preparation and were easily discovered because of large money transfers and informants within the terrorist groups.
Westrop said the terrorist groups began advocating low-tech attacks in 2010. In 75 days between mid-March and early June this year, the United Kingdom was hit by three terrorist attacks that left dozens dead and more than 100 wounded. The government’s military response to the Marawi siege was prompt and decisive—President Duterte, while on an official trip to Russia, declared martial law in Mindanao, and quickly mobilized the armed forces to confront the Maute Group before it could fully take over Marawi City, Lanao del Sur, and spread terror in other
areas of Mindanao. The military hopes to terminate or drive away the remaining terrorists in the city soon and return control of Marawi City to the local government and allow its residents to resume their normal lives. Normalization, however, will take time, because of the extent of destruction wrought by the terrorists and the damage resulting from the fighting between government troops and the rebels. The rebuilding of Marawi City must be done as soon as the siege is finally over and the terrorists are gone, and it must be done with the same intensity and decisiveness as the military operations against the Maute Group. I believe Duterte indicated such intensity and decisiveness in rebuilding Marawi City when he met with some evacuees in Iligan City, Lanao del Norte, two weeks ago, while the fighting continued in the besieged city. He promised the displaced Marawi residents that he would not neglect them, and that he would spearhead the rehabilitation and reconstruction of the city. The Department of National Defense has prepared a proposal to allocate P10 billion for the rehabilitation
The Sheeple are getting restless John Mangun
OUTSIDE THE BOX
T
here was a time not too long ago when people and our institutions were intellectually thirsty. Humanity was continuously trying to expand the horizons of understanding and then to shape the future based on what we knew and what we had yet to learn. We searched for knowledge and then let the information help lead us where we wanted to go. Now, Google does the searching and the leading. We have become intellectually lazy, wanting the simplest answers possible to complex questions and the easiest solutions available to meeting difficult problems. For example, this past Friday, the Philippine Stock Exchange Composite Index (PSEi) gained 55.10 points and we were told that this was end of month/quarter “window dressing”, as fund managers wanted to show increased holdings in local stocks. There was no mention of why
they wanted to do that. Further, all of that 55-point gain came literally in the last one minute of trading, known as the “run-off” period. More important, all of those 55 points were attributable to only six stocks —SM, BDO, Ayala Land, Ayala Corp., SM Prime, GT Capital—out of the 30 PSEi issues. So, apparently, the window dressing was limited to a number of stocks, came just as the market was about to close, and was done for unknown reasons. But because this information was relayed by an expert, we nod our heads in agreement without having any desire for deeper understanding.
The fact is that a long-term study of window dressing—a strategy used by portfolio managers near the year-end or quarter-end to improve the appearance of a fund’s performance—impacts prices minimally if at all. Interestingly, the only two stock markets that seem to talk every end of month and quarter about this phenomenon are here in the Philippines and in Pakistan. The global economic situation is a mess. No one seems to ask why or how this condition came to be. Global interest rates have never been lower in the past 4,000 years. We know this from thousands of ancient records, not from Google. Deeds of Sale from ancient Babylon and the time of King Hammurabi give us that information. “I agree to sell four cattle for the price of six silver coins if the amount is paid by the next full moon. If not paid until the second full moon, the price is eight silver coins”. No one questions the significance of the current historically low interest rates and the connection with poor global economic performance. It is easier just to accept things when governments tell us that they have everything under their wise control.
of Marawi but the President, during his meeting with the evacuees, raised the amount to P20 billion. He also promised to continue pursuing peace in Mindanao with the Moro Islamic Liberation Front (MILF) and establishing a federal government, which he said would be the long-term solution to the Mindanao peace problem. He would endorse to Congress the draft Bangsamoro basic law, which was already finalized by the Bangsamoro Transition Commission. We have to accept that national security will be challenged from time to time, because terror is now the new normal around the world. Citizens, rightly so, expect the government to be able to protect them from such threats. The intense and decisive action against the Maute Group, which I hope will be the same approach to Marawi City’s rehabilitation, will show any terrorist groups that they will not succeed because the government is ready to act swiftly. That will also serve as solid assurance to Filipinos that their government is ready and able to protect them. For comments, e-mail mbv.secretariat@gmail. com or visit www.mannyvillar.com.ph.
We are told that inflation is natural and an important, even beneficial, factor of modern economies. Yet, we know that for 200 years (1700-1900) there was virtually no systemic price inflation in England, even as the Industrial Revolution completely changed Europe from rural agrarian to urban industrial economies. W. R. Anderson, in his column Round About Radio, published in London in 1945, wrote: “The simple truth is that you can get away with anything in government. The People, as ever [I spell it ‘Sheeple’], will stand anything.” Sheeple is now used to describe those who voluntarily agree without critical analysis or research. However, with the decadelong economic deterioration that shows little signs of improving, the people are getting very restless. We can see that every day as the political intensity heats up worldwide. The people are beginning to wake up. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.
Opinion BusinessMirror
opinion@businessmirror.com.ph
Why President Marcos declared martial law
Port tariff hike faces stiff opposition Ernesto M. Hilario
ABOUT TOWN
Cecilio T. Arillo
database Part Four
E
NRILE, now 93 and already retired from politics, was asked to join the government after President Marcos won as president in 1965. He was appointed to the Department of Finance on January 19, 1966 as undersecretary to Secretary Eduardo Romualdez, who was then the head of that department.
He was tasked to supervise the revenue-raising activities of the national government. At the same time, he was also made the chairman of the board of directors of the Philippine National Bank. That bank had many loan problems at that time. And one after the other, he was also designated concurrently acting commissioner of Insurance and acting commissioner of the Bureau of Customs. Enrile stayed with the Department of Finance until late December 1968, when he was asked to move to the Department of Justice to replace Justice Secretary Claudio Teehankee, who was appointed to the Supreme Court. “It was in the Department of Justice where I began to know the problems of law and order in the country, especially the political and ideological activities of various militant groups, notably the newly organized Communist Party of the Philippines,” Enrile recalled. “1969 was an election year. President Marcos was running for his second term. Up to that time, no one was ever reelected president of the country. Political oppositionists, militant activists, leftist elements, and plain opportunists exploited every event, every issue, and every opportunity to bring President Marcos down,” Enrile said. A good example, he said, was the case of Michael Moomey, an American naval petty officer, who shot and killed Glicerio Amor in the Boton Valley Rifle and Pistol Range in the Subic Naval Base, because Moomey mistook Amor for a wild boar. Moomey triggered a widespread emotional outrage, which the antiMarcos and anti-American political and ideological forces seized to cause disorder in the country. Huge rallies and demonstrations were mounted against President Marcos and the Americans. The organizations that rallied and demonstrated were the National Student League, the Students Reform Movement, the Samahan ng Demokratikong Kabataan, the Student Power Assembly of the Philippines, the Student Cultural Association, the UP Movement for the Advancement of Nationalism, the Bertrand Russell Foundation of the Philippines, the National Union of Students of the Philippines, and the Kabataang Makabayan of Jose Maria Sison, who became the head of the new Communist Party of the Philippines that he organized in December 1968. The media joined to deplore the Americans for their unjust treatment of Filipinos. The national tension became more intense when Moomey was freed and secretly left the country. Enrile cited the Agrifina Circle incident as another example. To the present generation, Agrifina Circle— that space between the old building of the Department of Agriculture that the Department of Tourism now occupies and the old building of the Department of Finance—may now just be an ordinary place in Metro Manila. Said Enrile: “But, to me, Agrifina Circle was, and still is, an unforgettable place. In my time in the Department of Justice, the Agrifina Circle was the scene of an abusive and rancorous political drama. It was there where some religious personalities, students, labor groups, farmers and plain idlers staged a ‘Parliament of
Enrile narrated: “When my turn came to meet with that crowd, I did not go. The crowd was enraged. Imperiously, the members demanded my personal presence. I declined and refused their repeated calls. The leaders vowed publicly that they would compel the President to kick me out of the Cabinet.” the Street.’ It was there where I at first encountered the machination, the ire and the arrogance of ‘street parliamentarians’—the Marats, the Dantons, the Robespierres and the Madame Rolands of Philippine society at that time. It was there where I initially pitted my mind and will against people who espoused the isms that caused so much personal and social pain, bloodshed, destruction, and suffering in the world and in our country.” Enrile recalled: “The members of the crowd that sequestered Agrifina Circle summoned Cabinet members and other government functionaries at their whims. They were extremely rude, vicious, cruel and offensive. Every public officer that appeared before them was pilloried, demeaned and shamed. They booed and yelled at their hapless victims and banged tables with wooden truncheons in front of them. This caused terrible fright to their preys. A lady member of the Cabinet was so terrified when she appeared before the Agrifina crowd that she broke down hysterically.” Enrile narrated: “When my turn came to meet with that crowd, I did not go. The crowd was enraged. Imperiously, the members demanded my personal presence. I declined and refused their repeated calls. The leaders vowed publicly that they would compel the President to kick me out of the Cabinet. “About five o’clock in the afternoon of September 23, 1969, the Agrifina Circle demonstrators marched to Malacañang. They armed themselves with wooden truncheons. Forcibly, they opened one of the perimeter gates of the Palace and rushed through the Palace grounds. They stormed the Maharlika Hall— the annex to the Palace facing the flagpole before the guardhouse. “Rampaging, they climbed the stairway to the second floor. President Marcos and the leaders of the Nacionalista Party were having a political caucus there. When the demonstrators reached the second floor, they grew more unruly. They shouted loudly; they overturned tables; they threw chairs into the air; and they turned the whole place in disarray. President Marcos and the leaders with him watched calmly. They allowed the intruders to do their worst. None of them uttered a word or took any action. “I knew that I was their target. While the commotion was going on, I slipped out quietly from the building to give the President a free hand to deal with the situation. I boarded my car and went home.” To be continued To reach the writer, e-mail cecilio.arillo@ gmail.com.
Tuesday, July 4, 2017 A11
T
he recent approval by the Philippine Ports Authority (PPA) of a petition by Manila North Harbour Port Inc. (MNHPI) for a 24-percent increase in the cargo-handling tariff in the facility doesn’t sit well at all with shipping firms, as well as a coalition of consumers and commuters. The Philippine Inter-Island Shipping Association (Pisa), in a position paper, objected to MNHPI’s rationale in asking for an increase, which are the “upward trend in cost drivers” or the increasing cost of operating the Manila North Harbor. “For every increase incurred for any cost driver reflected as expense, computed per twenty-foot equivalent unit [TEU], there is already a proportionate revenue earned to compensate such costs incurred by the port operator,” Pisa said. The shippers claimed that MNHPI’s net income has been steadily rising, from P305.7 million in 2013 to P332.6 million in 2014. For its part, the Philippine Liner Shipping Association said the fuel and power consumption of MNHPI—at 55 percent from 2012 to 2013 and 78 percent from 2013 to 2014 for fuel and by almost 2 million kilowatts, or a 103.22-percent hike in power cost per TEU for the same period—was “alarming” and should prompt an audit instead. In an open letter to Jay Daniel Santiago, PPA general manager, the United Filipino Consumers
and Commuters (UFCC) asked the agency to “take a second hard look” at the recommendation of a technical working group (TWG), which it said is “unjustified”. The UFCC told Santiago that, even as the PPA Board has already adopted the TWG recommendation, “it is also within your power to rectify this error, which will have serious adverse implications on our business climate in general, and on ordinary consumers in particular.” The group said, “all stakeholders of Manila North Harbor, which is operated by MNHPI, have rejected this proposed upward adjustment in tariff, but the TWG assigned to the case had “conveniently disregarded the concerns raised”. While the approved increase is lower than the 37.45 percent originally sought by MNHPI, the UFCC said, the additional cost this would entail will still be passed on to consumers. “The tariff hike goes against what President Duterte has laid down in his 10-point socioeconomic program, which includes increasing
business competitiveness, attracting investments and protecting ordinary people from economic shocks,” it added. The TWG approved the tariff increase despite opposition from Manila North Harbor users. For the UFCC, the tariff hike would also mean a windfall for Petron Corp., the majority shareholder in MNHPI. “This adjustment serves two purposes: on one hand, tariff increase for MNHPI and, on the other, more profit for Petron because of what they claim to be increases in fuel cost. That is a double profit for Petron/MNHPI and double whammy for all consumers.” The UFCC asked the PPA to suspend the approval of the tariff hike and order an audit of MNHPI. Apart from this, it asked the PPA “to review the process by which your TWG arrived at their recommendation, which we find suspicious at the very least...given the long-term impact of this upward adjustment on ordinary consumers and taxpayers who will bear the brunt of the tariff increase”.
Trilateral cooperation vs terrorism
The Philippine government is on the right track in seeking closer cooperation with our next-door neighbors, Indonesia and Malaysia, in preventing extremists from making Southeast Asia or any country a base for their operations. “We don’t want that to happen in Southeast Asia nor anywhere else in the world. But the reality is, while ISIS loses ground in Iraq and Syria, some of these jihadists and extremists will be looking for land bases outside Iraq and Syria,” said Foreign
To comprehend Trump, read this Albert R. Hunt
BLOOMBERG
I
t’s happening more and more: The phone rings and there’s an old acquaintance on the line, often a mainstream Republican, asking, “What’s wrong with Donald Trump?”
Instead of ranting in response, as I’d been doing for months, I’m now offering up a reading list. Here it is: Citizen Cohn, Nicholas Von Hoffman’s biography of Roy Cohn. “Don’t Mess With Roy Cohn,” a brilliant Ken Auletta piece in Esquire magazine written almost four decades ago. TrumpNation, an investigative biography by my Bloomberg View colleague Timothy L. O’Brien. The Art of the Deal, Trump’s first book. Jane Mayer’s New Yorker article last year about the remorse felt today by Trump’s ghostwriter, Tony Schwartz. Cohn, the counsel to Sen. Joseph McCarthy during the anti-Communist witch hunts of the early-1950s, was Trump’s mentor until his death in 1986. After McCarthy fell from power, Cohn became a New York power broker, introducing Trump to politicians and helping him cut deals. Cohn was a shrewd, ruthless bully whose philosophy, Auletta wrote, amounted to
this: “Everyone lies, smears, covers up, protects their friends. The rules of the game don’t count as much as winning.” Sound familiar? (Cohn was a liar to the end, dying of AIDS while publicly denying that he was gay.) Trump adopted his role model’s attack-first-and-never-apologize tactics, on contemptible display last week with his vile slur against television anchor Mika Brzezinski. It’s easy to envision the embittered president raging late into the night about dishonorable enemies and feeble defenders, asking himself what Roy would do. After the Watergate investigations brought down President Richard Nixon in 1974, Cohn said Nixon should have destroyed the White House tapes that were used against him. Today, as the beleaguered president stews in the White House channeling his mentor, he might hear, “Fire Mueller”. (That’s Robert Mueller, the special counsel investigating possible links between Trump
and Russia and related matters.) O’Brien, who spent a lot of time with Trump while writing his book in the early-2000s, chronicles Trump’s business dealings and duplicities, including his spectacular failures involving casinos, a professional football team, an airline and the Plaza Hotel. TrumpNation also captures Trump’s disregard for truths—even his own. During the George W. Bush administration, the book recounts, Trump noted: “America went from a country of openness and somewhat complacent and free, to a country that sadly is perceived around the world as a bully.... We could have been a country where the world embraced us. And instead the world hates us.” Five months into his own administration, global trust in the US has plummeted. Trump sued O’Brien, charging that the book understated his financial worth. The suit was dismissed, but dozens of Trump falsehoods emerged during a deposition. In The Art of the Deal, Trump brags about using “truthful hyperbole”. In his White House, an aide used the phrase “alternative facts”. These are euphemisms for lying. In his book, he describes the way he plays the media: “The press is always hungry for a good story. The more sensational the better.” Maybe that was the idea behind his wild claim in March that President Barack Obama tapped his phones. Trump had long said that The Art of the Deal was his favorite book. Then, courting evangelical voters during the
How to clear the first Brexit hurdle
T
he first task for the Brexit negotiators is to agree on the rights of European Union (EU) citizens in Britain, and of UK citizens in the EU. In a rational world, this would be straightforward. In the real world, it will be a problem if one side or the other chooses to make it one. Roughly 3.2 million EU citizens live in Britain, and 1.2 million UK citizens live in Europe. Brexit casts doubt on their residency status and future rights, including access to health care and other services. The fairest and least disruptive solution is reciprocity: EU citizens in the UK and UK citizens in the EU should have the same rights. Granted, getting to such a deal is a
bit more complicated than you’d think. The EU wants its citizens living in the UK to have the rights they would enjoy elsewhere in the EU—but some of those rights are more extensive than the rights of British citizens in their own country. In particular, a UK citizen cannot bring a non-EU spouse to live in Britain without meeting a minimum-income test of £18,600 ($23,765) a year. After Brexit, that would diminish the rights of EU citizens living in Britain. A fair agreement would either require Britain to dispense with the income test for the spouses of EU citizens, or the EU to narrow the rights of UK citizens living in Europe. Either outcome ought to be acceptable. It would be a scandal-
ous failure of leadership on both sides if disagreements as trivial as this were to block further progress in the talks. A more fundamental worry has centered on the jurisdiction of the European Court of Justice (ECJ). Throughout, the British government has emphasized the need to recover sovereignty from EU institutions, and especially from the ECJ; the EU has seemed equally determined to preserve the full sway of the court in matters relating to its citizens. This may be changing. Bloomberg reported this week that the EU could be willing to let a new arbitration body protect the future rights of EU citizens in Britain. Prime Minister Theresa May and David Davis, the minister in charge
Secretary Alan Peter S. Cayetano recently as he met with officials from Indonesia and Malaysia to firm up ways to address common security concerns. The purpose of the three-way talks is to craft a framework to share intelligence information that can help the Philippines cope with the ISIS-linked Maute Group’s siege of Marawi City that started on May 23 and remains unresolved as of now. The three countries appeared to have reached an agreement that a military solution is not enough. It should also include socioeconomic programs to fight the roots of terrorism. A number of foreign fighters, including those from Indonesia and Malaysia and even from the Middle East and beyond, such as Chechnya, are believed to have joined terror groups, particularly the Mautes and a faction of the Abu Sayyaf, that attacked Marawi in late-May. T he three-way cooperation among the Philippines, Indonesia and Malaysia to fight terrorism is a step in the right direction. This cooperation would start with the sharing of information about the known terrorist groups and their leaders operating in their respective borders. This could expand to tighter screening of people traveling in border areas and even joint patrols in the high seas to interdict terrorists trying to cross porous borders to launch terrorist activities, including kidnapping-for-ransom, as what the Abu Sayyaf bandit group has been doing in the Sulu Sea in recent years.
E-mail: ernhil@yahoo.com.
presidential campaign, he demoted it to No. 2 behind the Bible. Schwartz, who spent a year-anda-half with Trump to write the book, now talks about the subject’s “complete lack of conscience”. He found Trump intellectually incurious and pathologically impulsive. It was, Schwartz told Mayer, “impossible to keep him focused on any topic other than his own self-aggrandizement for more than a few minutes”. What was true in the 1980s remains true today. Just look at the president’s lack of interest in intelligence briefings and ignorance about the details of the huge Republican healthcare bill now under consideration by the Senate. These books and articles won’t tell you how Trump would react to a crisis on the Korean peninsula, or shed light on his Russian financial ties or reveal how much he knew about Russian interference with the US presidential election last year. They offer only the vaguest hints of how he might respond to a domestic tragedy, like the 1995 bombing of a federal office building in Oklahoma City by an anti-government militant, or to the 2015 massacre by a white supremacist of black parishioners in a Charleston, South Carolina, church. But they do provide insight into the character of the president of the United States. And that’s where to find the answer to that question I keep hearing over the phone: “What’s wrong with Donald Trump?”
of the Brexit talks, have previously suggested a similar compromise. Good: The benefits of flexibility and open-mindedness on such issues would be enormous. EU citizens keep Britain’s National Health Service running and are conspicuously essential in many other parts of the economy; Europe’s businesses rely on British professionals, and British expats (notably in Spain) fuel demand and pay taxes. Whatever happens, Brexit will be a severe blow, especially to Britain—but there’s no need to make a bad situation worse. Failing to reach agreement at the outset, and on an issue where the mutual interests are so plain, would be absurd. Bloomberg View
2nd Front Page BusinessMirror
A12 Tuesday, July 4, 2017
PHL, other Asia-Pacific producers to fight bad rap against coconut oil
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By Jasper Emmanuel Y. Arcalas
@jearcalas
he Philippines will convince other producers and exporters of coconut oil in the Asia Pacific to close ranks and counter the latest report of the American Heart Association (AHA), which indicated that coconut-oil consumption is unhealthy. Romulo J. de la Rosa, the new administrator of the Philippine Coconut Authority (PCA), said he will seek a dialogue with membercountries of the Asian and Pacific Coconut Community (APCC) to discuss AHA’s report. “The Philippines, being the biggest coconut-oil exporter in the world, the other coconutproducing countries are looking at us to lead in educating the global consumer of the health benefits of coconut and coconut oil both as food and as a ‘nutraceutical’ product,” de la Rosa told reporters in a news briefing. “Members of the APCC should be united in the promotion of coconut oil. We should close ranks and face the challenges that are posed by the AHA [that is] backed up by the soybean producers and the canola-oil producers in the West,” he added. De la Rosa said the renewed effort to vilify coconut oil in the US is being supported by big vegetableoil producers. “The vegetable-oil producers in the West, led by the Americans
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The number of coconut oil-producing countries belonging to the Asian and Pacific Coconut Community through the AHA, has revived the long-discredited assertion that coconut oil causes cardiovascular disease and is, therefore, unhealthy and should not be consumed,” he said. “This attack had been done a decade ago. This has been disproved by other resources. Even our very own Dr. Conrado S. Dayrit has already published numerous papers disproving this [claim],” de la Rosa added. Citing several studies, the AHA said in an advisory on June 15 that coconut oil raised LDL cholesterol
the same way as other saturated fats found in butter, beef fat and palm oil. Increase in LDL cholesterol, which is considered bad cholesterol, is a major cause of artery-clogging plaque and cardiovascular diseases, according to the AHA. “Because coconut oil increases LDL cholesterol, a cause of CVD [cardiovascular disease], and has no known offsetting favorable effects, we advise against the use of coconut oil,” the AHA advisory read. Instead of consuming coconut oil, the AHA urged consumers to replace it with polyunsaturated or monosaturated fat, which “lowers blood triglyceride levels”, an independent biomaker of risk for CVD. “Replacing saturated with polyunsaturated fat prevents and regresses atherosclerosis in nonhuman primates. Overall, evidence supports the conclusion that polyunsaturated fat from vegetable oils [mainly n-6, linoleic acid] reduces CVD somewhat more than monounsaturated fat [mainly oleic acid] when replacing saturated fat,” the advisory read. “Evidence has accumulated during the past several years that strengthens long-standing AHA recommendations to replace saturated fat with polyunsaturated and monounsaturated fat to lower the incidence of CVD. Reduction in total dietary fat or a goal for total fat intake is not recommended,” it added. In a statement released on June 21, the APCC condemned the AHA report, saying it is “totally false and misleading”. “APCC finds this AHA report totally false and misleading while allegedly to be representing the commercial vested interest of its
sponsors who are telling the same old story that saturated fats contribute to high cholesterol levels, which is misleading information,” the APCC said. “The myths by the same people have since been ‘busted’, therefore there is no longer basis to continue such falsified misleading statements,” it added. The APCC said the robust growth of the coconut industry, which threatens the market share of vegetable-oil producers, may have caused the latest attack against coconut oil. “Higher-value products are experiencing unprecedented growth in volume of export and value, especially in the last five to seven years. This magnitude of growth would obviously be taking market share away from some of competitor vegetable-oil products,” the APCC said. It also expressed confidence that consumers will not be persuaded by the recent claims of the AHA. “APCC is convinced that this good news for the coconut growers is causing old stories to reappear from its critics with its bad science. The traditional consumer of coconut will not be deterred, while the recently introduced consumers would by now be convinced of the true nutritional and health benefits of coconut to also not be deterred,” its statement read. The APCC is an intergovernmental organization of 18 coconut-producing states in the AsiaPacific region, including the Philippines, which aims “to promote, coordinate and harmonize all activities of the coconut industry”. It accounts for over 90 percent of world coconut production and exports of coconut products.
www.businessmirror.com.ph
ONGPIN PROJECT APPLIES FOR TIEZA ACCREDITATION By Ma. Stella F. Arnaldo
@akosistellaBM Special to the BusinessMirror
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HE Roberto Ongpin-led Alphaland Corp. is applying for accreditation with the government-run Tourism Industry and Enterprise Zone Authority (Tieza) for its new resort on Patnanungan Island, just 20 miles away from its successful Balesin Island Resort. This was disclosed by Alpahaland COO Michael A. P. M. Asperin in an interview with the Business M irror. He also expressed optimism that occupancy rates at Balesin Island Club would improve this year with the deployment of its new airplanes, two 68-seater ATR 72-500s, as well as offering flights from Clark International Airport. The United Nations World Tourism Organization and the Department of Tourism recently hailed Balesin Island Club for its
successful sustainable tourism project. (See, “UNWTO cites Ongpin resort’s sustainable-tourism program,” in the BusinessMirror, June 22, 2017.) Meanwhile, Asperin said the Patnanungan Island project is about 750 hectares, compared to Balesin that is about 500 hectares, and will include an international airport “with complete CIQ [Customs, Immigration, Quarantine]” facilities, that will allow international carriers and bring in foreign tourists. “We’ve already applied for this with the Department of Transportation and Tieza accreditation,” he added. About P5.9 billion are being poured into the development of said resort, of which P1.8 billion will go into the construction of the airport alone, which will have a 2.5-kilometer runway. “It will accommodate wide-body jets like Airbus 777s,” Asperin noted.
See “Ongpin,” A2
Govt sees positive SC ruling on martial law By Elijah Felice E. Rosales
M
@alyasjah
artial law in Mindanao is constitutional. This is what the government expects the Supreme Court (SC) to declare on Tuesday, when members of the High Court cast their votes on the legality of the martial-law declaration in the whole of southern Philippines. Defense Secretary Delfin S. Lorenzana on Monday said he is positive the SC will rule Proclamation 216 of President Duterte as constitutional. “I, for one, is very confident that the Supreme Court will rule on the legality of martial
law in Mindanao because I saw it [has basis],” Lorenzana said. Lorenzana added he, along with martial-law chief implementer Eduardo M. Año, has briefed the SC en banc about the grounds of legality of the military rule. “What they [justices] are looking at are factual basis, if the declaration really has basis, and I believe we have sufficiently or competently answered all the questions on the basis of martial law,” the defense chief said. “[Tuesday] is the day that they [justices] are going to promulgate the ruling. I look forward to seeing that they will say that it is legal See “Govt,” A2
AntiCorruption Legislation Continued from A1
Of course, having signed the Integrity Pledge of the Integrity Initiative and living up to the commitments laid down in the Pledge is an excellent foundation to doing business locally and internationally. Let me highlight some of the conventions and legislation:
UK Bribery Act 2010
The UK Bribery Act 2010 establishes company liability for corrupt acts committed by persons acting on behalf of the company. The Act prohibits bribery of public officials and businessto-business bribery. With global jurisdiction, companies can be held liable in the UK for acts of corruption committed by employees, agents or subsidiaries anywhere in the world. Unlike the Foreign Corrupt Practices Act (FCPA), the Bribery Act does not distinguish between small a nd l a rge br iber y pay ments, meaning facilitation payments are prohibited.
The United Nations Convention against Corruption The United Nations Convention
against Corruption (UNCAC) is the most comprehensive anticorruption convention, entering into force in December 2005. It covers a wide-range of corruption offenses, including domestic and foreign bribery, embezzlement, trading in influence and money laundering. The UNCAC provisions obligate State Parties to take a number of public and private anticorruption measures:
lic officials. Its aim is to create a level playing field between OECD countries by subjecting countries to the same criminal standards. Before the OECD Convention, the US was the only OECD country that prohibited its companies from bribing foreign officials. The OECD Convention does not address private ( business-tobusiness) bribery.
European anticorruption conventions
The US Foreign Corrupt Practices Act (FCPA) of 1977 is the most widely enforced anticorruption law. It is the first to introduce cor porate liabilit y, respon-sibility for third parties and extraterritoriality for corruption offenses, meaning companies and persons can be held criminally and civilly responsible for cor r uption offenses committed abroad.
n Council of Europe Criminal Law
Convention on Corruption (COE Criminal Law Convention)
The COE Criminal Law Convention aims to coordinate the criminalization of corrupt practices, provide complementar y criminal-law measures and improve cooperation for the prosecution of offenses. It entered into force in 2002, and compliance is monitored by the Group of States against Corruption. n OECD Anti-Bribery Convention
T he OECD Convent ion on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Convention), adopted in 1997, addresses bribery of foreign pub-
n US Foreign Corrupt Practices Act
n African Union Convention on
Preventing and Combating Corruption
The African Union (AU) Convention on Preventing and Combating Corruption, adopted in 2003, addresses corruption in the public and private sectors. It represents a consensus on what African countries should do in the areas of prevention, criminalization, international cooperation
and asset recovery. Its provisions criminalize domestic and foreign bribery, diversion of property by public officials, trading in inf luence, illicit enr ichment, money laundering and concealment of property. n Inter-American Convention
Against Corruption
The Inter-American Convention against Cor r uption (I AC AC), adopted in 1996, aims to promote and strengthen the mechanisms to combat corruption, and to promote, facilitate and reg ulate cooperation to ensure the effectiveness of the measures to combat corr uption in the per for mance of public f unctions. T he I AC AC establishes a number of anticorr uption measures.
Chinese anticorruption laws
China’s anticorruption provisions are largely contained in the Anti-Unfair Competition Law of the PRC and the Criminal Law of the PRC. China has long held a tradition of gift-giving, known as Guan Xi, in all types of business transactions. The country has embarked on an aggressive anticorruption campaign, and strong enforcement is likely to continue in the coming years.
Canadian Corruption of Foreign Public Officials Act
The Corruption of Foreign Public Officials Act (CFPOA) is the Canadian legislation implementing its obligations under the UN Convention against Corruption. The CFPOA applies to persons and companies and makes it a criminal offense for persons or companies to bribe foreign public officials to obtain or retain a business advantage.
Russian Federal anticorruption law
Russia’s Federal Anti-Corruption Law 273, Article 13.3 requires companies operating in the country to implement anticorruption compliance programs containing specific anticorruption measures. Failure to comply carries the risk of heavy fines, the extent of which depends on a company’s willingness to cooperate with authorities. Russian law does not provide an “adequate procedures” on legal defense against corruption offenses.
German anticorruption legislation
German anticorruption provisions are contained in the Law on Fighting Corruption, the Criminal Code and the Administrative Of-
fences Act. The Criminal Code’s provisions apply to persons, while companies face civil responsibility under the Administrative Offences Act. Corruption offenses committed abroad can be enforced in Germany.
Brazilian Clean Company Act
Brazil’s Clean Company Act 2014 (Law 12,846) holds companies responsible for the corrupt acts of their employees and introduces strict liability for those offenses, meaning a company can be liable without a finding of fault. The Act provides strict civil and administrative penalties but no criminal penalties for companies. However, the Criminal Code establishes domestic criminal offences. W hile government officials and businessmen have to be aware of all these conventions and legislation, we also know that in many countries around the world, including those listed above, corruption happens. At the same time, the Integrity Initiative monitors the cases/the companies involved and can provide information on the status of these cases. For more information contact Schumacher@integrityinitiative. com.