Businessmirror july 05, 2017

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Pasig City, women grapple with milk-formula debacle Conclusion

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F the dozen mothers in a Pasig City village the BusinessMirror talked to, only one echoed the concern of breast-feeding adherents.

Agnes Racagad, a 42-year-old mother of one, said she chose to breastfeed because she wants her daughter Ishi to be healthy. “Nag-iisang anak ko lang si Ishi kaya gusto ko talagang maging healthy siya,” Racagad told the BusinessMirror. “’Yung ibang nanay na kilala ko na gumagamit ng milk formula, mga sakitin ang anak nila [Ishi is my only child so I want to make sure she is healthy. I know some mothers who use milk formula and their children are sickly].” Aside from taking care of her only child, Racagad also tends to a small store in front of their home, sells food for breakfast and pork and chicken barbecue as the sun sets in the west. Her daughter Ishi grew up breast-fed. Continued on A2

This file photo shows mothers and their children attending a briefing in Manila on the importance of breast-feeding. According to a recent nationwide survey, only 34 percent of Filipino infants younger than six months are exclusively breast-fed. In addition, an alarming 36 percent are fed infant formula—a 6-percent increase since a previous survey. STEPHANIE TUMAMPOS

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Wednesday, July 5, 2017 Vol. 12 No. 265

EO cuts red tape in issuance of permits for power projects By Lenie Lectura

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@llectura

ndustry players will now only need 30 days—from the current 1,340 days—to secure the necessary permits and licenses to start a big-ticket power project, thanks to Executive Order (EO) 30 issued by President Duterte on June 30.

1,340 The number of days it takes for a power-project permit to be released, according to Sen. Sherwin T. Gatchalian

The EO states that concerned government agencies shall act upon applications for permits involving See “EO,” A2

Palace OKs proposed ₧3.767-T 2018 budget

A scourge worse than terrorism Teddy Locsin Jr.

free fire Remarks by H.E. Teodoro L. Locsin Jr. at the side event “Using the Global Plan of Action to Combat Trafficking in Persons and the SDGs to End the Scourge of Trafficking in Women and Girls” at the United Nations on June 21, 2017

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o establish my credentials to speak here, let me say that I have worked for three presidents and the best were women: one liberated our country and the other saved it in the Wall Street global financial crisis.

By Bianca Cuaresma

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@alyasjah

See “Palace,” A2

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PHL manufacturers most optimistic in Asean–report

By Elijah Felice E. Rosales

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Continued on A11

Diokno: “I’m finalizing it now so [the President] can submit the budget [proposal] on the day of his Sona on July 24.”

here’s no stopping the government’s infrastructure blitz, as President Duterte on Monday approved the 2018 budget proposal of the Department of Budget and Management amounting to P3.767 trillion, a quarter of which was allocated for infrastructure spending. In a text message to the BusinessMirror, Budget Secretary Benjamin E. Diokno confirmed Duterte, along with the entire Cabinet, green lighted the 2018 budget proposal in the recent Cabinet meeting. Diokno said there was no objection to the amount and allocation of the proposed budget. “There was no question. It was approved by the President and the Cabinet as presented,” Diokno said. “I’m finalizing it now so [the President] can submit the budget [proposal] on the day of his Sona

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An activist holds a slogan bearing a photo of President Duterte during a rally in front of the Supreme Court in Manila on Tuesday to denounce martial law in Mindanao. The SC has upheld Duterte’s declaration of martial law in the southern third of the country, dismissing petitions to nullify it. AP/Aaron Favila

SC: Duterte’s martial-law edict constitutional By Joel R. San Juan

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@jrsanjuan1573

HE Supreme Court (SC) on Tuesday dismissed the petitions seeking to declare as unconstitutional for lack of factual basis President Duterte’s Proclamation 216, which placed the entire Mindanao under martial law and suspended the privilege of the writ of habeas corpus following terrorist attacks led by

PESO exchange rates n US 50.5170

the so-called Maute Group. The decision was reached by the 15-man High Tribunal during its regular en banc session. At a news briefing, SC Spokesman Theodore O. Te said 11 associate justices voted to junk the consolidated petitions filed by opposition lawmakers, led by Rep. Edcel C. Lagman of the First District of Albay, Lumad leader Eufemia Campos Cullamat and a group of women from Marawi led by Norkaya Mohamad.

Te said three associate justices partially granted the petitions, while a member of the High Tribunal voted in favor of the petitions. Other details of the decision of the magistrates were not provided to the media by the court. “All 15 justices have submitted their respective opinions, whether concurring or dissenting. All opinions will be submitted by tomorrow,” Te announced. Continued on A12

@BcuaresmaBM

he Philippine manufacturing sector posted the strongest growth in the region in June, despite a slight slowdown from the growth rate it recorded in May. On Tuesday reg iona l business media organization Nikke i a nd i nter n at ion a l t h i n k tank IHS Markit announced the Philippines’s Purchasing Managers’ Index (PMI) for June at 53.9, slower than the previous month’s 54.3. The PMI is a composite index, calculated as a weighted average of five indiv idual subcomponents. The components include new orders, which weigh the most at 30 percent of the index; output at 25 percent of the index; employment at 20 percent; suppliers’ delivery times, 15 percent; and stocks of purchases comprising the other 10 percent. R ead i ngs above 50 sig n a l a n improvement in business c o nd it io n s o n t he p re v io u s month, while readings below 50 show deterioration. Despite the slowdown, IHS Markit expressed strong optimism on the country’s manufacturing industry. “The Philippines’s

53.9 The Philippine PMI for June

manufacturing sector signaled another strong expansion in June, ending the second quarter on a positive note. Growth in output and new orders remained key drivers, which, in turn, boosted hiring and stock-building. Export growth strengthened and business optimism remained elevated,” the report read. The June PMI of the Philippines is the fastest among Asean countries, followed by Vietnam with 52.5, Thailand at 50.4 and Singapore at 50.3. Meanwhile, those at the below- 50 threshold were Indonesia at 49.5; Myanmar, 49.4; and Malaysia, 46.9. The report attributed the slight month-on-month decline to slower new business inflows. IHS Markit economist Bernard Aw said the strong performance of the Philippine manufacturing sector in June puts the domestic economy on track See “Manufacturing,” A2

n japan 0.4456 n UK 65.3589 n HK 6.4674 n CHINA 7.4300 n singapore 36.5403 n australia 38.6960 n EU 57.4277 n SAUDI arabia 13.4709

Source: BSP (4 July 2017 )

BMReports BusinessMirror

A2 Wednesday, July 5, 2017

Pasig City, women grapple with milk-formula debacle Continued from A1

Breast-feeding benefits

PASIG City Health Center nutritionist Dr. Isabel U. Diaz said milk from mothers is still the best food for infants. Despite the fact that milk-formula manufacturers would like mothers to believe their products can substitute the nutrients needed by the infants, this is contrary to medical studies and health practitioners, Diaz told the BusinessMirror. “[Breast milk] cannot be replaced by any brand of milk formula. It has all the nutrients and vitamins that an infant needs to strengthen the immune system and fight diseases,” Diaz said. “It also prevents the child from Sids [Sudden Infant Death Syndrome].” A 2013 study by the World Health Organization (WHO), titled “Breastfeeding in the Philippines: A Critical Review”, said suboptimal breast-feeding caused the death of 804,000 under-5 children every year. More than 30 studies from around the world in developing and developed countries alike have shown that optimal breast-feeding dramatically reduces the risk of infants and young children dying, the WHO study emphasized. However, according to a recent nationwide survey, only 34 percent of Filipino infants younger than 6 months are exclusively breast-fed. In addition, an alarming 36 percent are fed infant formula—a 6-per-

Palace. . .

Continued from A1

[State of the Nation Address] on July 24,” Diokno added. The 2018 budget proposal, disclosed by Presidential Spokesman Ernesto C. Abella on Tuesday, is 12.4 percent higher than the 2017 national budget and equates to 21.6 percent of GDP. Personnel services will continue to receive the largest chunk of the pie at 29.4 percent. Infrastructure and capital outlays comes second in priority with 25.4 percent, significantly boosting the government’s “Build, Build, Build” campaign. This was followed by local government units at 16 percent and maintenance at 14.5 percent. Debt burden and government-owned and –controlled corporations will obtain the lowest allocations at 9.8 percent and 4.5 percent, respectively. The education sector remains to be the top recipient of the national budget, while the Department of Public Works and Highways maintains its spot as second priority. The interior, health, social welfare and agriculture departments were also among the top recipients of the proposed budget. On the other hand, the Autonomous Region in Muslim Mindanao was included on the priority list of the 2018 budget proposal, notably with the conflict in

Spam. . .

Continued from A12

The winner was an actor named Kenneth Daigneau, who was awarded $100 for coming up with the name “Spam”. (He was also the brother of Hormel’s vice president, so there may have been a bit of nepotism involved.) Anointed with its new name, the product was buoyed by a heavy advertising effort that emphasized

cent increase since the previous survey. A 2016 nutrition data revealed that 50 percent of 0-month to 71-month-old male and female children polled were of normal weight. The severely underweight, however, were females. The data revealed that 14.3 percent of those found overweight are boys, while 85.7 percent overweight are girls.

Formula king

DESPITE existing laws in the country, the culture of breast-feeding is still booming in the Philippines since it has been the fastestgrowing market, the middle class being the primary target. More than $100 million is spent every year on the marketing and promotion of infant-formula products in the Philippines, a WHO study said. These marketing and promotion campaigns translate to more than $260 million annual purchases by Filipino families. A 2008 study by Rafaelita M. Aldaba of the Philippine Institute of Development Studies revealed that infant-formula processing saw an increase from 62 percent to 64 percent between 1983 and 1988. “The dairy processing industry was composed of a few large multiproduct firms and several medium-scale and small competitors with milk processing dominating the whole industry,” Aldaba said in her study, titled “Assessing Competition in Philippine Markets”. Formula milk is one of the top consumer Marawi City, Lanao del Sur, still ongoing. According to Abella, the proposed budget aims to reform and transform, as it covers medium-term macroeconomic assumptions, fiscal targets, key budget dimensions and expenditure priorities. “The framework is to enhance the social fabric to make sure that the entire budget is spent to make and being peoplecentered, fair, just and value-based; to reduce inequality; to increase growth potential; to maintain foundations for sustainable development,” Abella added. Quoting Diokno, Abella said the 2018 budget proposal “aims for a safer, greener, wealthier and more beautiful country, making space for the youth, the poor, disadvantaged and handicapped”. Under Duterte, the government is dead set on completing big-ticket public infrastructure, such as the North Luzon Expressway Harbor Link, Luzon Spine Expressway, Philippine National Railway North and South Rails and the Metro Manila Subway. To achieve this ambition, the government aims to increase infrastructure-to-GDP ratio to 7.4 percent, which would amount to as much as P9 trillion by the end of Duterte’s term in 2022. By far, the government has allocated P3.6 trillion for its public infrastructure over the next three years, most of which were intended for transportation projects in Metro Manila and other major urban centers. its versatility. For example, in 1940, Hornel fielded submissions from Spam fans to create a 20-page recipe book featuring 50 ways of incorporating the canned meat into meals. Homemakers readily embraced Spam, and it became a popular lunch and breakfast meat. But sales really took off during World War II. Over 150 million pounds were used in the war effort, making Spam a cornerstone of troops’ diets. (Soldiers also used Spam’s grease to lubricate their guns and waterproof their boots.) In each

commodities in the Philippines as of January 2005, Rachel M. Tanaka of the University of the Philippines’s School of Economics said in a study of breast-feeding among mothers in a Quezon City barangay. The government also admitted in 2010 that “breast-feeding practice has not improved despite past efforts”. Comparing 2003 and 2008 government data showed the prevalence of exclusive breast-feeding among infants under 6 months has remained at 34 percent, the DOH said in a 2011 report. “Among infants less than two months, one in two infants [50 percent] was exclusively breastfed, and two in five infants [42 percent] receive plain water only [18 percent], other milk [23 percent], or complementary foods [1 percent] in addition to breast milk.”

Staying power

WHEN asked about the future of breastfeeding and milk-formula use in the Ph i l ippi nes, D i a z sa id she be l ie ves mother’s milk will prevail even in the succeeding years. However, milk formula will not be totally out, added Diaz, a registered nutritionist and dietician. “But its use will lessen because of its high price, and mothers are price-sensitive because they know the day-to-day spending.” In her study, Tanaka said family income is just one of the factors that influence mother’s adoption of breast-feeding or

Sugar quota. . . Continued from A12

The SRA has been monitoring the tension between the US and Mexico over its trade agreement, as the additional quota allocation could depend on the result of their trade talks. Latest SRA data showed that, as of June 18, the country has already shipped 106,464.99 MT of sugar to the US, filling more than three fourths of the 136,201 MT allocated by Washington. Preliminar y data from the SRA, a government-owned and -controlled corporation attached to the Department of Agriculture, showed that sugar production in crop year 2016-2017 has reached 2.437 million metric tons (MMT). The figure is 8.89 percent higher than the 2.238 MMT produced in the previous crop year. It is also 8.31 percent higher than the SRA’s projection of 2.25 MMT. For the current crop year, the SRA allocated 74 percent of the local sugar output for domestic demand, while 20 percent would be exported to other foreign markets aside from the US. The remaining 6 percent would be shipped to the US. The SRA pegged the domestic demand for sugar for the current crop year at 2.15 MMT.

milk-formula use. The other factors are number of children, age and the mother’s educational attainment and her belief in the superiority of breast milk determine whether a mother initially feeds her child with breast milk. One of these women is Maryflor Teylan, a mother of three, and one of the dozen mothers who talked to the BusinessMirror. Teylan, a full-time homemaker, said she could only maintain spending on infant formula because her brother, an overseas Filipino worker, sends her money. Teylan said she couldn’t afford infant formula as her husband’s salary as a messenger is not enough to cover household expenses. However, according to Tanaka, more than economic concerns, weaning mothers from milk-formula use require raising awareness of mothers. “ Brea st-feed i ng mea su res shou ld therefore be aimed at promoting awareness among mothers of the economic and health benefits of breast-feeding and at supporting its initiation right after delivery,” Tanaka said. “This form of human capital investment should be viewed as more important than income-generating activities, especially for mothers of highincome families who can afford to take a leave from work to feed their babies.” For Diaz, seeing mothers like Racagad attending barangay health center breastfeeding programs is enough. For now. Dennis D. Estopace and Kaye Escaño

Manufacturing. . . Continued from A1

for a not her qu a r ter of robu st GDP growth. “While the domestic market remained the key pillar of manufacturing growth, there were signs that external demand is contributing more to the expansion. Exportorder growth strengthened to a three-month high,” Aw said. “The strong manufacturing upturn was matched with rising cost pressures, but there were signs of further easing of the inflation rate. Slower cost increases took some pressure off the need for companies to raise selling prices. However, firms have expressed concern about the recent peso depreciation and higher costs for raw materials, such as copper and iron. The peso has been trading within the P50 territory since the end of June this year, with Tuesday’s rate hitting P50.52 to a dollar. The total traded volume was at $540.3 million. “Overall, the outlook for the manufacturing sector remains optimistic into the third quarter underpinned by buoyant business confidence and strong sales volumes. That will augur well for the Philippine economy and its labor market,” Aw added.

country where they were stationed, American soldiers introduced it to the locals, giving foreigners their first taste of Spam. Since then, Spam has become a sought-after product in many countries around the world, especially those that have faced economic hardship. Because it’s cheap, filling and has a long shelf life, it addresses a real need.

Hot and Spicy (2000), Spam with Bacon (2004), Spam Teriyaki and Spam Jalapeño (2012) reflected consumers’ evolving tastes and preferences. Spam Spread was even introduced just in case you’re “a spreader, not a slicer”.

As American as apple pie?

In other cultures around the world, Spam is viewed as a distinctly American product, though it’s been incorporated into local cuisine in creative ways. In Hawaii – where seven million cans are sold each year— McDonald’s franchises will offer Spam-based products, like Spam, eggs and rice. The Spam Musubi—Spam on rice wrapped in seaweed—is also a popular snack and lunch food. In South Korea, Spam is considered a popular holiday gift, while in the UK, the Spam fritter is served with chips and mushy peas in burger bars. In the Philippines, Spamsilog is a common breakfast meal of Spam, fried rice and sunny-side up egg. Back in the US, restaurateurs have seized upon Spam’s place in the cultural imagination to (somewhat ironically) incorporate the product in refined dishes. At San Francisco’s Liholiho Yacht Club, you can get Spam fried rice with uni and mushrooms. Animal in Los Angeles offers foie gras and Spam, while New York City’s Noreetuh serves Spam agnolotti with burgundy truffles. It was even featured in a culinary challenge on Season 11 of Top Chef. When Spam was first introduced, Hormel was eager to promote the product’s versatility with taglines like “Cold or hot…Spam hits the spot”. But with the canned meat moving from the front lines of World War II to $40 entrées at high-end restaurants, its various incarnations have likely surpassed its inventors’ wildest visions. Ayalla A. Ruvio, Michigan

But how did it become such a cultural icon? In a 2012 paper, marketing researchers Rajeev Batra, Aaron Ahuvia and Richard P. Bagozzi developed a model of “brand love”. Based on studies on consumers’ brand attachment, they showed that in order to form meaningful attachment with brands, consumers need to experience them in ways beyond simply buying and using the product. Hormel seemed to intuitively understand these ideas. Simply selling a cheap, useful product wouldn’t be enough. In creative and humorous ways that went beyond traditional advertising, they appealed to consumers by positioning the brand as a patriotic food that reflected American ingenuity—with a streak of eccentricity. In the years after the war, the Hormel Girls —a musical troupe of female World War II veterans—traveled the country performing songs and promoting the product. The group even starred in a top-rated radio show on three national networks. Since then, the Spamarama cooking festival (1976 to 2007), a Spam museum (1991), a Spam recipe contest (1991), a Spam-sponsored Nascar race car (1995) and even a 2005 Broadway musical—“Spamalot”—all enhanced what’s called the brand experience, the way consumers interact and connect with a product. These marketing ventures were accompanied by the introduction of new products and flavors. The Spamburger (1992), Spam Lite with 50 percent less fat (1995), Spam

Refashioning Spam in the 21st century

State University/AP

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EO. . .

Continued from A1

Energy Projects of National Significance (EPNS) not exceeding within a 30-day period. If no decision is made within the specified processing time frame, the application is deemed approved by the concerned agency. “It is the policy of the state to ensure a continuous, adequate and economic supply of energy. Hence, an efficient and effective administrative process for energy projects of national significance should be developed in order to avoid unnecessary delays in the implementation of the Philippine Energy Plan [PEP],” the EO 30 said. Within the Department of Energy (DOE), permits for all energy projects are processed within 25 days. Securing a permit from the DOE, however, is only 10 percent of the entire permitting process. According to Sen. Sherwin T. Gatchalian, chairman of the Senate Committee on Energy, it takes 1,340 days to secure a permit, 359 signatures needed for the permits to be signed, and involves 74 different agencies, including the DOE. “So that’s the amount of complexity. This is only predevelopment stage, which is apart from building the power plant,” Gatchalian said in an interview. The private sector welcomed the development. “This is very promising development. Key is to have the right organization that can execute,” AC Energy President Eric John Francia said. DOE Director of Renewable Energy Management Bureau Mario Marasigan said that, with or without the EO, the agency has reduced the permitting process from 120 days to 45 days, then to 25 days just recently. “Our concern is energy projects are delayed because of the local permitting process, including those from national and regional offices like the DENR [Department of Environment and Natural Resources] and LGUs [local government units], among others. Under the existing setup, there is no fixed timeline, that is why permitting process alone takes as long as four years or even more. Add another three to four years for project construction,” Marasigan said in an interview. Energy Secretary Alfonso G. Cusi, in a statement, said the longer the processing of energy projects gets, the more expensive it becomes, which could also impact on the delivery of energy services and their affordability. “Given that energy investors have complete requirements, cutting down the period of issuance of permits will certainly speed up the realization of energy projects,” Cusi added. To be considered among the EPNS, power-generation and -transmission projects must have a capital investment of at least P3.5 billion, significant contribution to the country’s economic development, significant consequential economic impact, significant potential contribution to the country’s balance of payments, significant impact on the environment, complex technical processes and engineering designs and significant infrastructure requirements. The EO also calls for the creation of an Energy Investment Coordinating Council (EICC) that will spearhead and coordinate national government efforts to harmonize, integrate and streamline regulatory processes, requirements and forms relevant to the development of energy investments in the country. The council, to be led by the DOE, will maintain a database of information and a web-based monitoring system for information exchange and updates, to uphold transparency and accountability. The EICC shall be composed of representat ives f rom va r ious nat ion a l go ve r n me nt a ge nc ie s a nd relevant energ y institutions, such a s t he de pa r t me nt s of Env i ron ment a nd Nat u ra l Resou rces, Finance, Justice and Transportation, Nationa l Electr ification Administration, National Grid Corp. of the Philippines, National Power Corp., National Transmission Corp., Housing and Land Use Regulator y Board, Pa l aw a n Cou nc i l for Su st a i n able De ve lopment a nd ot her re le v a nt government agencies. Within 30 days from effectivity of the EO, the EICC must prepare rules governing the resolution of interagency issues affecting the timely and efficient implementation of EPNS and other energy projects.

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Wednesday, July 5, 2017 A3

Govt, NDF peace talks to resume in August

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By Elijah Felice E. Rosales

@alyasjah

ackchannel talks between the government panel and the National Democratic Front (NDF) have succeeded, as the two camps are heading back to the negotiating table in August, according to Labor Secretary and Government Chief Negotiator Silvestre H. Bello III. The stalled fifth round of peace talks is scheduled to be held in August, following its suspension in May and in spite of dissuasion from

military officials in the Cabinet. Bello said this was made possible through backchannel talks of the two camps in the past days.

PHL praised for commitment to stop proliferation of WMD By Recto Mercene @rectomercene

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he Philippines has earned plaudits for hosting the first bilateral Proliferation Security Initiative (PSI) engagement held in Manila on June 27 and 28 to forge a multinational response to the challenge posed by the threat of the proliferation of weapons of mass destruction (WMD). The US Department of Defense and the Philippines Anti-Terrorism Council-Program Management Center led the discussions attended by representatives from nearly 20 Philippine entities and four US government agencies. Participants sought to examine national and international legal authorities that enable WMD interdictions; exercise whole-of-government decision-making processes; discuss challenges in countering WMD proliferation when only limited or ambiguous information is available; demonstrate the benefits of cooperation within the PSI context; and consider mutual roles in implementing relevant UN Security Council resolutions. “We are pleased that the government of the Philippines partnered with us to explore these issues and to demonstrate their continued commitment to PSI’s Statement of Interdiction Principles,” said Andrea Yaffe, the US leader for the event. “The challenges in preventing WMD proliferation are not getting

any easier, with bad actors seeking to acquire dual-use materials to advance their WMD or missile programs, disguising the transactions, and using front companies to hide the end-users,” Yaffe said. Retired Maj. Gen. Danilo M. Servando, the head of the Philippine delegation, said in his opening statement: “PSI is an area of increased cooperative engagement, not only between the US and Philippines, but also with other PSI partner countries as we perform our international obligations under the UN Security Council mandates.” The PSI is an international cooperative effort endorsed by 105 countries to stop trafficking in WMD, their delivery systems and related materials to and from State and nonstate actors of proliferation concern. PSI is designed to counter the threat posed by WMD proliferation through international cooperation and infor mation sharing, and when necessar y, coordinated action. The PSI is an activity, not an organization, and participation is voluntary: each participating state decides whether and how to engage in PSI activities on a case-bycase basis. Participating countries demonstrate their commitment to the PSI Statement of Interdiction Principles by undertaking actions consistent with their national legal authorities and relevant international law and legal frameworks.

“I talk with [NDF] Chairman [Fidel V.] Agcaoili last Sunday evening. We had an initial understanding that we will probably have the fifth round [of peace talks] in second or third week of August,” Bello said in a news briefing on Tuesday. However, unlike before, Bello said the government panel and the NDF will hold an informal meeting before returning to the negotiating table. The labor chief added the informal meeting will take place somewhere in Asia, with Hong Kong, Japan and the Philippines all being considered. “There will be an informal meeting and we will discuss mainly on the issue of socioeconomic reforms and the possible interim unilateral cease-fire. This will be done so it is clear what the agenda in the August

Bello: “The reality is that there is an existing armed conflict and that is a reason we are talking to end the armed conflict.”

talks are,” Bello said. Bello added the government panel is still keen on pursuing peace with the communists. “If you borrow the words of [Presidential Peace Adviser] Secretary [Jesus G.] Dureza, in the process, there will be humps and

bumps but we will stay in the course of the process because there is no alternative,” Bello said. “This is the best legacy that President [Duterte] can give to our country: an enduring and lasting peace for everyone,” the labor chief added. Bello’s announcement of the resumption of peace talks comes a day after Defense Secretary Delfin N. Lorenzana said the government panel should consider ending the peace process with the NDF. “I, for one, has been talking to our peace panel that, if possible, we stop negotiating with the [communists] if they cannot control their armed forces on the ground,” Lorenzana said. Lorenzana added a bilateral cease-fire must be agreed upon first

before peace talks are resumed so as to weather the confusion in the battlefield. “My opinion was that we sign a truce first because how can we have significant developments in the peace process if offensives continue left and right,” Lorenzana said. Bello, for his part, disputed the defense chief’s opinion. “The reality is that there is an existing armed conflict and that is a reason we are talking to end the armed conflict,” Bello said. Under Duterte, the government has resumed negotiating with the communists in a bid to agree on a bilateral cease-fire. However, the NDF has insisted socioeconomic, political and constitutional reforms must be implemented first, saying a truce will come naturally after.

Hostages tell JTF how Maute Group pillaged Marawi City By Rene Acosta @reneacostaBM

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embers of the Islamic State-inspired Maute Group and criminals freed by the group in the Marawi City siege have hauled at least P500 million worth of cash and jewelry loot, the military reported on Tuesday, citing information provided by hostages. A statement from the military’s Joint Task Force (JTF) Marawi said the cash and assorted jewelry were taken by the terrorists from houses and establishments that they raided and occupied during the initial days of the battle in Marawi. “An estimated P500 million worth of cash was reportedly stolen by Maute/ASG [Abu Sayyaf Group] terrorists, together with criminals in Marawi City, according to revelations by hostages who escaped and were later on rescued by government forces,” the statement said. “Seven hostages who were able to reach government forces two weeks ago, followed by another who escaped a few days later, and a pair of hostages who managed to escape several days ago, made this disturbing revelations, thus corroborating earlier information received by JTF Marawi,” it added. The military said the hostages were forced to convert into Islam, otherwise, they would be killed. The hostages were likewise forced by the terrorists to steal ammunition and firearms, aside from money and jewelry. “The hostages revealed that they

Debris fly as Philippine Air Force fighter jets bomb suspected locations of Muslim militants as fighting continues in Marawi City. It’s unclear how many people remain trapped in Marawi City as government troops battle Muslim militants led by the Maute Group. AP

were forced to convert to Islam or be killed. According to them, they were initially tasked to loot and steal from the houses/establishments for ammunition, firearms, cash, gold and jewelry,” the task force said. “They [hostages] estimate that their group alone was able to steal at least P500 million in cash not to include other items they have taken from households and business establishments,” the JTF Marawi said.

“They believe that the amount of cash and valuable items looted could be worth more as there were several other groups being forced by the terrorists to loot and steal for them,” it added. Meanwhile, seven trucks filled with relief goods arrived in Ramain, Lanao del Sur, which for the past month has become a safe haven for civilians fleeing the armed conflict in Marawi City.
 The International Committee

of the Red Cross unloaded hundreds of boxes containing jerry cans, mosquito nets, blankets, mats and kitchenware.

 The relief packages were systematically distributed to more than 2,600 families who have been displaced by the armed hostilities.

 Ramain is considered a military hot spot not only due to its proximity to Marawi, but also because members of the Maute Group reportedly have used it as an escape route.

SC supports CA justices vs House of Representatives Ethics case against By Joel R. San Juan @jrsanjuan1573

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HE Supreme Court (SC) is backing the Court of Appeals (CA) in its standoff with the House of Representatives with regard to its issuance of a writ of habeas corpus in favor of the six Ilocos Norte provincial officials who have been detained for more than a month now by lawmakers for contempt. SC Spokesman Theodore Te stressed that the joint statement earlier issued by Chief Justice Ma. Lourdes Sereno and CA Presiding Justice Andres Reyes Jr. represents the position of other magistrates and the High Court as an institution. “Yes, the Supreme Court supports the three CA justices against threats of contempt and detention by the House. The statement [dated June 21] says it all,” Te said in a text message. The SC official made the statement amid threats from House leaders that the three justices of the appellate court handling the habeas corpus case of the so-called Ilocos Six may be cited in contempt and subsequently detained for ordering the immediate release of the Ilocos Norte officials from House detention. In the statement issued on June 21, Sereno and Reyes expressed deep con-

Protect the Supreme Court from unsavory meddling of those who are trying to taint its integrity.”—Reyes

cern over the clash between the House and three appellate court associate justices—Associate Justices Stephen Cruz, Edwin Sorongon and Nina Antonio of the CA special fourth division that ordered the release of the so-called Ilocos Six. Citing “implications on separation of powers and judicial independence” of the House order, the heads of the judiciary suggested that the lawmakers instead avail themselves of remedies under the Rules of Court in questioning the CA orders. “Cognizant of its implication on separation of powers and judicial independence, the Chief Justice of the Supreme Court and the Presiding Justice of the Court of Appeals express deep concern over the show-cause order issued against the CA justices,” Sereno and Reyes said in a joint statement. Sereno and Reyes said the issuance of a show-cause order was unwarranted, considering that there are still legal remedies the House may avail of without violating the principle of separation of powers between the Legislative and

the Judiciary. The Integrated Bar of the Philippines, Philippine Bar Association and constitutional law experts and law deans Pacifico Agabin and Fr. Ranhilio Aquino have also made similar calls for the House to recall the show-cause order. The show-cause order required the CA justices to explain why they should not be cited for contempt for ordering the release of six Ilocos Norte provincial officials being detained for contempt in connection with the probe on alleged misuse of P66.45 million in tobacco funds to buy motor vehicles. Last Monday retiring Associate Justice Bienvenido Reyes has called on his colleagues in the SC to continue the fight for judicial independence. “Protect the Supreme Court from unsavory meddling of those who are trying to taint its integrity,” Reyes said in his speech during his last flag-raising ceremony. While he did not name the individuals attacking the judiciary, Reyes made the call amid the clash between the CA

and House, and after Speaker Pantaleon D. Alvarez warned of possible impeachment against Sereno after she reportedly met with CA justices and ordered them to defy the House’s show-cause order against the three magistrates. 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. They 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 utilization of P66.45 million in tobacco excise funds of the province to buy motor vehicles. The CA also issued a show-cause order requiring House sergeant-at-arms Roland 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 leaders refused to accept the orders and insisted that they were invalid because the appellate court has no jurisdiction over the matter.

Trillanes looms By Butch Fernandez

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@butchfBM

Senate Ethics Committee inquiry that could lead to possible sanctions looms against Sen. Antonio Trillanes IV for openly accusing fellow senators as “cowards” and “puppets” of the Duterte administration. “It’s possible,” Sen. Joseph Victor Ejercito said on Tuesday, even as Trillanes himself signaled readiness to face an investigation by the ethics panel composed of his peers in the 24-member chamber. According to Ejercito, “Trillanes has insulted his colleagues numerous times already just because he is rabidly against President Duterte.” Moreover, Ejercito pointed out that “independentminded senators resolve differences through debates rather than hurling insults. Name-calling is disrespectful and unparliamentary”. Ejercito, however, indicated that other senators have yet to finalize a decision to move forward and formally file a complaint against Trillanes before the ethics panel chaired by Senate Majority Leader Vicente C. Sotto III. He hinted that independent senators still “have to consult” other members of different voting blocs “and the majority, as well”. In a separate statement, Sen. Trillanes assured he “would welcome any ethics complaint” against him in the Senate. Trillanes added: “If Ejercito believes that my statement that the Senate is becoming a lapdog of the Duterte administration is highly offensive yet sees nothing wrong with Duterte’s rape comments to the soldiers, then we really have a problem.”

Economy

A4 Wednesday, July 5, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

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Cimatu vows strict monitoring of coal-fired power plants, work for improved air quality

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By Jonathan L. Mayuga

@jonlmayuga

he Department of Environment and Natural Resources (DENR) will continue to monitor the operation of coal-fired power plants in the country, amid renewed concerns aired by environmental groups about coal’s potential adverse impact to the environment and public health.

In a news statement released on Tuesday, Environment Secretary Roy A. Cimatu vowed to continue the DENR’s endeavor to improve air quality as he welcomed the filing of a petition filed by an environmental group asking the Supreme Court to compel the government to regulate the operation of coal-fired power plants. The petition was filed by the Philippine Movement for Climate Justice, citing the environmental and health

risks brought about the operation of coal-fired power plants. In particular, the group wants the DENR and the Department of Energy to strictly regulate operations of coal-fired power plants, which are currently the country’s main source of energy. The group added that coal-fired powered plants cause air pollution and are one of the biggest contributors to greenhouse gas being emitted into the atmosphere.

Cimatu vowed to intensify enforcement of environment law, particularly Republic Act (RA) 8749, or the Philippine Clean Air Act of 1999, as part of the DENR’s mandate. Intensive enforcement will continue to be a tool to be used by the DENR to carry out its mandate to improve the quality of air we breathe, the DENR chief said. Cimatu said the DENR, through its Environmental Management Bureau (EMB), regularly reviews its policies designed to reduce air pollution and protect human health and the environment. Last year a new National Ambient Air Quality Guideline Value (NAAQGV) for particulate matter (PM) 2.5 or particle pollution less than 2.5 micrometers in diameter took effect, he said. “Pursuant to DENR Administrative Order [DAO] 2013-13, the NAAQGV for PM2.5 is set at 50 micrograms per cubic meter [μg/Ncm] for an average of 24 hours or short term, and 25 μg/ Ncm for an average of one year or long term, starting from January 2016,” Cimatu said. PM2.5 is a complex mixture of extremely small particles and liquid

droplets that get into the air. Once inhaled, these particles can affect the heart and lungs and can cause serious health problems. Cimatu said the establishment of NAAQGV is one of the safeguards put in place pursuant to the country’s clean-air law to protect the public against air pollution, including those coming from coal-fired power plants. “Coal-fired power plants are allowed, but we need to tell them the limit of their emissions. If they emit more than what we prescribe them, then we will close their operations. But if they do pass, they shall be allowed to operate because that is within the

law,” Cimatu said. Another safeguard, Cimatu said, is the installation of continuous emission monitoring system (CEMS), as prescribed under different administrative orders issued in 2007. All 17 operating coal-fired power plants have their respective CEMS. Cimatu said one of the conditions under the environmental compliance certificate for power plants is to install CEMS. DAO 2017-14 requires the operation proponents to transmit data and images from its CEMS or CCTV to EMB online information database system to ensure the disclosure of the emission results.

Coal-fired power plants are allowed, but we need to tell them the limit of their emissions. If they emit more than what we prescribe them, then we will close their operations. But if they do pass, they shall be allowed to operate because that is within the law.”— Cimatu

Dulay, 2 other BIR execs face complaint before Ombudsman

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complaint has been filed against Bureau of Internal Revenue (BIR) Commissioner Ceasar R. Dulay and two other officials of the agency. Aside from Dulay, named respondents to Ombudsman Case IC-OC-17-1109, are BIR Deputy Commissioner Gaudencio Mendoza Jr., Assistant Commissioner Teresita Angeles of the BIR’s Large Taxpayers Service and 10 other BIR officials. The respondents are being charged for allegedly lowering and terminating the tax assessment of Del Monte Philippines Inc. for the years 2011 to 2013, from almost P30 billion to a “paltry” P65 million on January 31. Based on the complaint, the BIR examiners, who were said to be previously assigned to the now dissolved Large Taxpayers Division Office in Makati City who made the initial assessments, were directed to assist Del Monte Philippines and to lower the assessments. The said complaint identified the examiners as Ofelia T. Yumang, Ruby P. Villanueva, Ma. Catalina G. Benedicto, group supervisors Exzaida D. Comentan, Cherylle Anne Adapon, Amelia A. Molinos, Belinda D. Balagtas, Lourdes B. Liwanag, Fatima P. Sarrosa and Noemi D. Castro, The complaint was filed by Danilo Lihaylihay, a taxpayer in Quezon City.

Metro Manila retail prices rose 3.4% in May–PSA By Cai U. Ordinario

@cuo_bm

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espite cheaper fuel and food, retail prices in Metro Manila remained high in May this year, according to the Philippine Statistics Authority (PSA). The General Retail Price Index (GRPI) in the National Capital Region (NCR) increased to 3.4 percent in the said month, from 2.2 percent in May 2016.

0.1% The GRPI rate on a monthon-month basis, the same level as it was in April

However, this was slower than the 3.9-percent growth posted in April. The growth of the GRPI in the January-to-May period averaged 4.2 percent. “The GRPI is an indicator used to monitor the economic situation of the retail trade sector,” the PSA said. The annual growth of beverages and tobacco index remained at 5.4 percent and miscellaneous manufactured articles index, 0.6 percent. However, retail prices of food items and fuel slowed to 6.4 percent and 7.7 percent, respectively. On a month-on-month basis, the GRPI was at 0.1 percent, the same level as it was in April 2017. Retail food prices increased 0.4 percent due to higher prices of fresh and canned meat, dairy products, fish, rice, canned and preserved fruits, powdered tonic drinks and cooking oil. Beverages and tobacco picked up by 0.9 percent due to more expensive liquors, soft drinks and cigarettes. “Price roll backs in petroleum products, such as gasoline, diesel, LPG, kerosene and engine oil, pushed down the group’s index for mineral fuels, lubricants and related materials by 1.2 percent,” the PSA said. The GRPI is a statistical measure of the changes in the prices at which retailers dispose of their goods to consumers or end-users relative to a base year.

Banning e-cigarettes defies logic, tobacco expert says

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N Australian tobacco-treatment specialist has criticized tobacco-control activists advocating the ban on ecigarettes, saying they are “blinded” by their commitment to destroy the tobacco industry, while ignoring the potential of life-saving harm-reduction alternatives, such as vaping. In an article published in The Sydney Morning Herald recently, Dr. Colin Mendelsohn argued that allowing the widespread availability of what he described as “the most dangerous consumer product ever invented” is absurd, and effectively banning a much safer substitute defies logic. The University of New South Wales associate professor wrote that tobacco-control activists want to prevent the use of e-cigarettes in Australia by asking Parliament and the Senate, which are currently conducting inquiries on e-cigarettes, to leave the regulatory framework unchanged. “Policy should be based on evidence, not fear mongering, exaggeration, misrepresentation of evidence and rhetoric,” Mendelsohn said. “Most important, any assessment of vaping should be compared with the risks of smoking, which vaping is designed to replace.” Contrary to Mendelsohn’s evidence-based testimonial, Health Secretary Paulyn Jean B. Rosell-Ubial claimed that there is no safe level of exposure to tobacco smoke and “even if it has a small amount of tobacco, it is still not safe”.

Roselle-Ubial made the pronouncement at a speech before high-school students in Manila last month, urging them to stay away from smoking and vaping as these might lead to long-term addiction. She discouraged the use of e-cigarettes because, she said, they contain the same amount of chemicals as traditional cigarettes. “We released an advisory from the Food and Drug Administration that the products and components used in vape are still tobacco and contains the 7,000 dangerous chemicals that are found in cigarettes,” she said. However, Mendelsohn stressed that ecigarettes have only a tiny fraction of the risk of smoking. “It is well known that almost all the harm from smoking is caused by the products of combustion, which are absent from vaping,” he said. The levels of toxins in vapor are substantially lower than in cigarette smoke, he added, and referenced a study by Public Health England stating that “there is no doubt that smokers who switch to vaping reduce the risks to their health dramatically”. Mendelsohn further wrote that the priority should be to save lives and improve public health, not to destroy the tobacco industry. The latter can even be part of the solution if it is encouraged to sell less harmful alternatives, the professor said, and “banning e-cigarettes is counterproductive to good public health outcomes”.

The Regions BusinessMirror

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Editor: Efleda P. Campos • Wednesday, July 5, 2017

DPWH: Construction of ₧16.47-billion Davao-Samal bridge to start in mid-2019

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By Cha Monforte | Correspondent

ONSTRUCTION of the P16.47billion bridge that will connect Samal Island to Davao will begin in mid-2019 and end in 2024, an official of the Department of Public Works and Highways (DPWH) said. However, the implementation timeline appears to be only true as far as it is stated in the final report of the prefeasibility study (FS) of the Japanese firm consulted to do the pre-FS. This was according to documents shared by DPWH Region 11 design chief Engr. Agnes Audam with members of the Davao del Norte Sangguniang Panlalawigan (SP) during their session on Monday. The final report of the pre-FS,

prepared by a project consortium led by Katahira and Engineers International (KEI), was submitted to Japan’s Ministry of Economy, Trade and Industry (Meti) in February 2016. The report stated a total investment of ¥45 billion was needed for the project, or about P20.25 billion, at the current 1 yen to 45-centavo exchange rate. Audam said that based on 2015 pricing, the total amount needed

for the project was about P16.47 billion with Japanese financing of around P11 billion and Philippine government counterpart of P5.8 billion. “Meti will recommend to Jica [Japan International Cooperation Agency] for a full-blown FS, then DPWH will endorse it to the Department of Finance through the National Economic and Development Authority [Neda] for possible funding of the FS,” said Audam, who represented Regional Director Allan Borromeo to attend the SP meeting to shed light on the status of the long-anticipated bridge project. Department of Tourism 11 Regional Director Roberto Alabado and Neda 11 official Ma. Lourdes Lim were also “no shows” during the session, but instead sent letters pledging to Vice Gov. Alan Dujali that they will subsequently give their written reports to the legislative body. Audam said the five-year implementation of the Davao-Samal

bridge project would come during the administration of President Duterte, but the final work details would really depend on the results of the full-blown FS. Budget Secretary Benjamin E. Diokno in April said the funding of the full-blown FS was already approved and that the FS was already being made. Audam said there are eight routes of the bridge considered in the KEI pre-FS study, but the most probable route of the bridge would be “somewhere in between Route 6 and Route 7 due to minimal road right-of-way acquisition”. She said Route 6 to Route 7 on the plan’s map lies in the area from the present small wharf used in going to Paradise Island near the old airport to Chevron depot at Coaco area in Barangay Pampanga in Davao City’s side. From any point of the said area, the bridge will span more than a kilometer connecting to an area in the old shipyard at Barangay Caliclic in

Samal Island’s side. “As to the suggested route in Panabo City, it might be considered in the full-blown feasibility study,” Audam said in response to the query on the Panabo route, considering the factor of high volume of traffic in the considered route in Davao City’s side. But PCL representative to the SP Dan Gervacio said “the people of Samal actually don’t want to have the bridge connected to Panabo” due to the distance as they are much more interested connecting with Davao City. Amid increasing queries from the public on the much-awaited Samal bridge, the SP earlier invited the three regional directors. Cost of the bridge project has been increasing through the years. In 2002, or 15 years ago, the bridge was only estimated to cost P1 billion. Now it is estimated to cost P20 billion, an amount equal to the first government budget to rebuild the battle-torn Marawi City.

NHA declares: It will take 3 years to complete housing for Yolanda victims By Cai U. Ordinario @cuo_bm

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HE National Housing Authority (NHA) estimates it w ill take as many as three more years to complete the housing units for the victims of Supertyphoon Yolanda. As of the first quarter of this year, data from the National Economic and Development Authority (Neda) showed the government was only able to complete 50,791 houses, or less than a fourth of the 205,128 units needed to be built. “It is expected to be completed in two years. But since weather is a major issue in those areas, it can extend up to three years,” NHA General Manager Marcelino P. Escalada Jr. told the BusinessMirror. Neda data showed 154,337 housing units still need to be completed and the NHA has yet to begin construction and procurement for 56,870 units. Of the units being completed, 71,743 houses are being built and 25,724 units are under procurement. Neda Undersecretary for Regional Development Adoracion M. Navarro told this newspaper the NHA bared a list of issues concerning the completion of the housing units. Navarro said these issues included coordination for water and electricity supply, social preparation of communities, and various

permits and clearances. “The completion of the units is not slow because it is still within contract duration. [These houses are being built in terms of] packages of 1,000 units,” Escalada said. “[In fact], we just bidded the remaining 35,000 units.” Apart from housing units, Neda’s quarterly report on the construction efforts for Yolanda victims showed two more airport facilities out of 40 have yet to be completed. In terms of seaport facilities, only 27 of the 56 target have been completed. The remaining 29 facilities are ongoing, under procurement or have not been started. Data showed around 10 seaport facilities are being completed; 11 are under procurement; and eight have yet to start. In terms of state colleges and university projects, around 701 of the 719 target have been completed. Around 16 projects are either ongoing or under procurement, while the last two projects have yet to be started. In terms of livelihood needs, there are still 2,050 fishing boats that need to be replaced; 1,608 marine engines to be replaced; 1.36 million input assistance to be extended; and two more Bureau of Fisheries and Aquatic Resources (BFAR) facilities to be rehabilitated and reconstructed. Also, the government has yet

FULL LOAD

A tricycle is loaded with students on their way to school in a highway in Ilocos Sur, oblivious to the danger posed by speeding buses and trucks. LAILA AUSTRIA

to reach 5,504 disadvantaged/ displaced workers and 19,540 beneficiaries of integrated livelihood programs. The Philippine Coconut Authority (PCA) has yet to replant 1,991 coconut trees; fertilize

15,280 hectares of coconut area; and intercrop 1,255 hectares with coconut. The focus of these projects is spread across the Yolanda corridor, which covers 170 cities and municipalities in 14 provinces

across six regions in the Visayas and Mimaropa. The typhoon caused widespread flooding and landslides, and killed thousands of people and unprecedented damage to the affected areas.

EU gives ₧49-M humanitarian aid to Marawi City evacuees

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GIANT FISH HEAD

Ganie, a vendor in the Cebu City public market, shows a dried head of a big lapu-lapu while arranging the different kinds of dried fish in his stall. LAILA AUSTIA

HE European Commission (EC) is extending P49 million in humanitarian-aid financing to civilians who escaped from Marawi City. In a statement, the EC will benefit over 50,000 people affected by the ongoing fight between the Armed Forces of the Philippines (AFP) and Islamist militants who have taken over parts of the city. “This grant from the EU [European Union] will support the delivery of immediate life-saving assistance to those most in need, and contribute to increased protection of populations affected by the conflict,” said Pedro-Luis Rojo, head of the East, Southeast Asia and Pacific Regional Office for the European Civil Protection and Humanitarian Aid Operations (Echo). The EU funding will be channelled through Echo and will help provide crucial support, including

food, water supply, health care, hygiene kits, sanitation facilities and essential household items, as well as ensuring improved protection for those concerned. Over 22,000 evacuees are currently sheltered in 80 evacuation centrs in nearby towns. Displaced populations do not have proper access to food, nutritious diets, potable water and proper sanitation facilities. Priority concerns for those recently displaced are access to food, clean water, sanitation facilities and proper hygiene in evacuation centers. “The unprecedented violence in Marawi has caused tens of thousands of families to flee, leaving everything behind. This has triggered a sharp increase in humanitarian needs as many of the displaced people are currently deprived of fundamental means to sustain their day-to-day lives,” Rojo said. Cai U. Ordinario

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Moro youth urged to take strong stand vs terrorist recruitment

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AVAO CITY—Moro youth leaders in Lanao del Sur are urging their fellow youth to stand up against terrorism and other forms of violent extremism to avoid what they fear “as the start of another cycle of displacement”. Amir Mawallil, executive director of the Office on Bangsamoro Youth Affairs (Obya), issued the appeal during the dialogue over the weekend between community and organization leaders of the youth in Marawi City and the other towns of Lanao del Sur. “We need to act and assert more strongly against violence because this cannot be the start of another cycle of displacement,” Mawallil said. He said “the voices of the youth against terrorism is very important now” if only to address issues facing the youth affected by the ongoing crisis in Marawi City. Aside from being the target of recruitment and discrimination, Moro youth face lack of educational and livelihood opportunities due to lack of academic and skills qualification. “We need to listen to the voices of youth and understand how we can all better engage in preventing and countering violent extremism in all its various forms,” he said. In warning against another cycle of displacement, Mawallil was referring to the previous cycle of evacuation triggered by recurring armed skirmishes between government soldiers and armed followers of the Moro Islamic Liberation Front in the past decade. Evacuations were recorded in 2000 during the all-out war declared by then-President Joseph E. Estrada, then in 2003 and 2005 when the peace negotiations collapsed, and in 2008 in the aftermath of the rejection of the emorandum of agreement on Ancestral Domain. Mawallil He suggested to authorities of the Autonomous Region in Muslim Mindanao (ARMM) to “face the problem of radicalism head on and discuss possible ways to counter the violent ideology of terror groups in the region”. The ARMM Bureau of Public Information quoted Jalilah Hadji Sapiin, 25, a youth leader from Barangay Raya Saduc in Marawi City as saying she was willing to encourage young individuals not to join the terror groups. “Many of the people who join terror groups are young. We need to persuade young people like us that a good future awaits all of us if we continue to pursue peace,” Sapiin said in Filipino. She called on the youth “to prove to all that we are the real hope of the nation”. The ARMM coordinated with the Obya and the National Youth Commission (NYC) to bring youth-sector representatives from Marawi City and other parts of Lanao del Sur to a dialogue in Iligan City on July 1. Some 100 youth leaders attended the gathering where they heard NYC Chairman Aiza Seguerra assure them of the commission’s collective stand against the discrimination of Muslims and Muslim youth by nonMuslim Filipinos. “Even if we adhere to different religions, we need to always remember we are also against Muslim discrimination. You can rest assured of my support because we all have one goal and that is peace,” Seguerra said in Filipino. Seguerra told participants that “if all of us speak one message, then we will definitely be heard and we are with you; we will always be with you.” N YC Commissioner at Large James Ventura also asked the Moro youth in the ARMM “to establish a network for the voice of the Moro youth”. “When you form a youth network here, you will speak with one voice, and you will be heard because it will not only be the voice of the young speaking but the collective voice of the Moro youth,” Ventura said. The Obya and NYC have committed to draft and submit a position paper echoing the youth’s demands and proposals for the national government’s rehabilitation plan for Marawi City based on the recently held dialogue. Manuel T. Cayon

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Wednesday, July 5, 2017

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N. Korea claims it tested first ICBM

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EOUL, South Korea— North Korea claimed to have tested its first intercontinental ballistic missile (ICBM) in a launch on Tuesday, a potential game-changing development in its push to militarily challenge Washington—but a declaration that conflicts with earlier South Korean and US assessments that it had an intermediate range.

The North has previously conducted satellite launches that critics say were disguised tests of its long-range missile technology. But a test-launch of an intercontinental ballistic missile, if confirmed, would be a major step forward in developing a nuclear-armed missile that can reach anywhere in the US. Still, the launch appeared to be the North’s most successful missile test yet, a weapon analyst said could be powerful enough to reach Alaska. The launch seems designed to send a political warning to Washington and its chief Asian allies, Seoul and Tokyo, even as it allows North Korean scientists a chance to perfect their still-incomplete nuclear-missile program. It came on the eve of the US Independence Day holiday, days after the first face-to-face meeting of the leaders of South Korea and the US, and ahead of a global summit of the world’s richest economies. US, South Korean and Japanese officials say the missile fired from North Phyongan province, in the North’s western region, flew for about 40 minutes and reached an altitude of 2,500 kilometers (1,500 miles), which would be longer and

2,500 km The altitude of the intercontinental ballistic missile fired from North Korea’s western region, which would be longer and higher than previous tests higher than any other similar tests previously reported. It also covered a distance of about 930 kilometers (580 miles). South Korean analysts said it was likely that it was a retest of one of two intermediate-range missiles launched earlier this year. Once US missile scientist, David Wright, estimated that the missile, if the reported time and distance are correct, would have been on a very highly lofted trajectory and could have a possible maximum range of 6,700 km (4,160 miles), which could put Alaska in its range, if fired at a normal trajectory. North Korea has a reliable arsenal of shorter-range missiles, but is still trying to perfect its longer-range missiles. Some analysts believe North Korea has the

South Korean President Moon Jae-in speaks as he presides over a meeting of the National Security Council at the presidential Blue House in Seoul, South Korea, on July 4. North Korea on Tuesday launched yet another ballistic missile in the direction of Japan, South Korean officials said, part of a string of recent test-firings as the North works to build a nuclear-tipped missile that could reach the US. Kim Ju-hyung/Yonhap via AP

technology to arm its short-range missiles with nuclear warheads, but it’s unclear if it has mastered the technology needed to build an atomic bomb that can fit on a long-range missile. Soon after the morning launch, President Donald J. Trump responded on Twitter: “North Korea has just launched another missile. Does this guy have anything better to do with his life? Hard to believe that South Korea and Japan will put up with this much longer. Perhaps China will put a heavy move on North Korea and end this nonsense once and for all!” “This guy” presumably refers to North Korean leader Kim Jong Un. China is North Korea’s economic lifeline and only major ally, and the Trump administration is pushing Beijing to do more to push the North toward disarmament. Japanese Chief Cabinet Secretary Yoshihide Suga suggested the altitude of this missile might have been higher than earlier tests. He did not give further details, including the distance of the flight and where in Japan’s exclusive economic zone in the Sea of Japan the missile landed.

Just last week South Korean President Moon Jae-in and Trump met for the first time and vowed to oppose North Korea’s development of atomic weapons. J a p a n ’s P r i m e M i n i s t e r Shinzo Abe sharply criticized North Korea for the launch. “ T he l atest l aunc h c lea rly showed that the threat is growing,” Abe said. Abe, who ta lked by phone with Trump on Monday, said the two leaders plan to seek cooperation from world leaders when they attend a Group of 20 summit in Germany. Lee Illwoo, a Seoul-based military commentator, said the missile traveled for a far longer period of time than if it would have been fired at a normal angle. A North Korean scud-type missile, with a range of 800 km to 900 km, would land in its target site within 10 minutes if fired at a standard angle of 45 degrees. Lee added it’s likely that North Korea fired either Hwasong-12 missile or a solid-fuel Pukguksong-2, both of which were tested in May. O n M a y 14 N o r t h K o rea launched the Hwasong-12

missile, which its state media later said flew as high as 2,111 km (1,310 miles) and landed in a targeted area in the ocean about 787 km (490 miles) from the launch site. On May 21 North Korea also tested the Pukguksong-2, which traveled about 500 km (310 miles). China’s UN ambassador, Liu Jieyi, warned Monday that further escalation of already high tensions with North Korea risks getting out of control, “and the consequences would be disastrous”. The Korean Peninsula has been divided since before the 1950-1953 Korean War. Almost 30,000 US troops are stationed in South Korea. Tuesday’s launch was the first by the North since a June 8 test of a new type of cruise missile that Pyongyang said was capable of striking US and South Korean warships “at will”. Since taking office on May 10 Moon has tried to improve strained ties with North Korea, but the North has continued its missile tests. Pyongyang said it needs nuclear weapons and powerful missiles to cope with what it calls rising US military threats. AP

Iran’s gas wealth lures Total to take risk T

otal SA made a $1-billion bet on natural gas in Iran, swallowing a hefty dose of political risk in the hope of gaining first-mover advantage in the country with the world’s largest reserves. The deal to develop phase 11 of the giant South Pars field is the first investment in Iran by an international energy company since sanctions were eased last year. Total expects it to open the way for further involvement in oil, gas and petrochemical projects there, CEO Patrick Pouyanne said. It also gives the French energy producer a high profile in a country that’s at the center of multiple geopolitical flash points, where many of its peers are still wary of treading. “It’s a long commitment to Iran,” Pouyanne added last Monday in Tehran as he signed the 20-year agreement. “I will come back to Iran again because this contract is the first of many.” T he Midd le Easter n country—also Organization of Petroleum Exporting Countries (Opec) third-largest crude producer—is a tempting destination for foreign capital, as it seeks to boost output after years of international restrictions. While Pouyanne has highlighted the benefit of getting in first, the deal also makes Total potentially vulnerable to an escalating regional diplomatic crisis and US President Donald J. Trump’s hostility to the nuclear deal that enabled the country’s reopening.

Navigate Sanctions

Total, which has little exposure to the US shale boom that’s reshaping global gas markets, is

Chairman and CEO of France’s Total SA Patrick Pouyanne (seated second from left), Managing Director of Iran’s Petropars Hamid Akbari (left), CEO of National Iranian Oil Co. Ali Kardor (second from right) and President of China’s CNPC International Lv Gongxun sign the documents of a contract to develop an Iranian gas field, as Iranian Oil Minister Bijan Zanganeh (standing, at center) and Chinese Ambassador to Tehran Pang Sen look on, in Tehran, Iran, on July 3. AP/Vahid Salemi

looking around the world for competitive fields. It has some in built advantages in Iran. The company knows the country well, having worked on South Pars until tightening restrictions on trade and investment forced it to withdraw in 2009. The French producer also has experience navigating sanctions elsewhere, including Russia where it has a 20-percent stake in a giant project to produce liquefied natural gas (LNG) in the Arctic. “ There are a lot of companies that want to come back in Iran, including Shell and Eni,” Ahmed Ben Salem, an analyst at Oddo Securities, said by phone. “Being a first mover in the area, hav ing kept its of f ice open, is ver y well regarded by local authorities. Total will be well placed to benefit from potential new projects.”

Total has moved further and faster than its peers, none of whom have agreed on an investment on the scale of South Pars. Last December Royal Dutch Shell Plc. signed a preliminary agreement to assess three of Iran’s largest oil and gas resources. Last month Eni agreed to study development of the Kish and Darkhoein fields. BP Plc. is reluctant to go into a country on which the US still has some restrictions, while American companies remain unable to invest there, Ben Salem added. “For Total, $1 billion isn’t huge”, so the financial risks remain relatively low, Homayoun Falakshahi, a senior research analyst at Wood Mackenzie Ltd., said by phone. “The political risks are hard to predict as long as Trump remains at the White House.” Egypt, Saudi Arabia, Bahrain

and the United Arab Emirates— with the backing of Trump—are embroiled in a diplomatic standoff with Qatar, in large part over its ties with Iran. Qatar’s 10-day deadline to submit to 13 demands of the Saudi-led bloc has been extended to Wednesday, but there are no signs either side is ready to back down, and the crisis could escalate. The US military is directly clashing with Iranian allies in Syria while, in Saudi Arabia, Trump performed a sword-dance with Iran’s bitterest foes. In the Senate, new sanctions on the Islamic Republic sailed through with near-unanimous approval. There’s a serious risk that the nuclear deal that allowed the easing of sanctions could unravel, according to one former US official who was intimately involved in the process.

Pouyanne is among oil-company bosses ramping up spending on natural gas, saying last month that such investments are more “interesting” than coal as global warming forces changes in the energy mix. Iran holds the world’s largest gas reserves, estimated by BP at 1,183 trillion cubic feet, or almost four times the amount held by the US. Its oil production climbed 33 percent to about 3.7 million barrels a day last year after sanctions were eased in January 2016, according to data compiled by Bloomberg. Under the contract signed last Monday, Total holds 50.1 percent of phase 11 of South Pars, which, along with Qatar’s North Field, comprises the world’s largest single accumulation of gas. The first phase will cost an estimated $2 billion, with production capacity of 2 billion cubic feet a day—equivalent to about 10 percent of the country’s 2016 production—supplying the domestic market starting in 2021. I nc re a se d g a s pro duc t ion opens new opportunities for exports, WoodMac’s Falakshahi said. Three potential LNG projects— one of which involved Total—fell victim to the last tightening of sanctions against Iran and could be revisited, he added. “Iran is one of the few remaining El Dorados for oil companies— you know the oil and gas is there, so very little exploration to do and very low production cost,” said Philipp Chladek, an oil and gas analyst at Bloomberg Intelligence in London. “The risk is considerable, but the reward is even bigger.” Bloomberg News

May’s Conservatives signal beginning of end to UK austerity

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he UK government led by the Conservatives sent a signal that austerity politics will end after a minister told Parliament that a long-standing and unpopular pay freeze on public jobs is “under active discussion”. Stung by losing their governing majority in last month’s election as the antiausterity Labour Party advanced, Prime Minister Theresa May is under pressure to abandon seven years of belttightening, as tragedies, such as the Grenfell Towers fire and London terror, drew attention to cuts in vital services. The police, firemen, nurses and teachers have been subject to a cap of 1 percent on annual pay rises since 2013, with the government until now vowing to maintain it in order to bring down the deficit. That stance is becoming increasingly untenable with voters enthused by Labour Leader Jeremy Corbyn’s promise of free university tuition and billions on the National Health Service. “We want to make sure that front-line public-service workers, including the police, are paid fairly for their work, not least because of the contribution that they have made over the years to reducing the deficit that we have inherited,” Police and Fire Minister Nick Hurd told lawmakers last Monday. Hurd’s comment pointed to the Tories edging away from the cost-cutting policies that have characterized their government since 2010, when they came to power with David Cameron and his chancellor of the exchequer, George Osborne. Britons feeling alienated and impoverished by austerity came to eclipse Brexit in a campaign that delivered May a rude political awakening just as she was about to embark on divorce talks from the European Union. Keeping the economy ticking and caving to public appetite for more largesse will be instrumental in how long May is able to stay in power and also reveal her negotiating strength. She needs to keep voters on her side, her various party factions appeased and project strength to her Brexit counterparts in Brussels. The Institute for Fiscal Studies estimates that if public sector pay rose at the same rate as the private sector, the government would need to find an extra €6.3 billion ($8.2 billion) in two years time. While Chancellor of the Exchequer Philip Hammond has acknowledged people are “weary” of austerity, he has also noted increased investment in public services would mean higher taxes, more borrowing or stronger economic growth. A debt the equivalent to about 90 percent of GDP is one reason to maintain prudence.Financial constraints aside, May and her ministers have shifted gears after the election fiasco. Foreign Secretary Boris Johnson—touted as a future Tory leader down the line—strongly believes pay rises greater than 1 percent can be made responsibly, without putting to much pressure on public finances, the BBC reported on Monday. Environment Secretary Michael Gove, who ran for May’s job, also seems to have come out in favor of easing up. Earlier on Monday, May’s spokesman, James Slack, told reporters that the pay of public-sector workers was reviewed by pay-review bodies, and the government would respond when those groups made recommendations. “Some have reported, and we’ve accepted the findings, others will respond in due course,” he said, adding that nurses, doctors, dentists and armed forces had agreed to a 1-percent pay rise for the 2017-2018 tax year.

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Caught in budget tugs of war, US states teeter on the brink

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UGUSTA, Maine—Government workers marched outside the State House here chanting “Do your job!” on Monday as Maine kept children’s caseworkers at home and shut down other offices deemed nonessential, and lawmakers worked on a deal late into the night. A standoff over a tax increase left Illinois teetering on the edge of a potentially devastating credit downgrade. And a deadlock over a raid on the funds of New Jersey’s largest health insurer kept the state’s parks and beaches closed for a third straight day, though lawmakers reached a settlement late Monday. Stalled negotiations have left at least eight states without budgets several days into a new fiscal year. But the effects have been felt most starkly in three of them, where outspoken Republican governors are clashing with Democratic-controlled legislative chambers. If those three impasses highlighted the perils of divided state government, which has grown increasingly rare in an era of single-party rule, they also underscored the limits of the Republican Party’s ascendancy on the state level. The governors share more than a party label: They are, to a man, proud provocateurs who have tried to enact conservative policies in blue states through badgering and political intimidation. Govs. Chris Christie of New Jersey and Paul R. LePage of Maine have routinely tried to humiliate and overwhelm their adversaries through force of personality, often projecting bluster through the news media, while Gov. Bruce Rauner of Illinois has used his vast personal fortune to run television ads attacking legislators who refuse to support his agenda. State Sen. Richard J. Codey of New Jersey, a Democrat who served as acting governor from 2004 to 2006, said those sorts of imperial attitudes were bound to end in ruin. The shutdowns, he said, reflected a collapse in the traditional give and take between governors and legislative leaders, who have often managed to cooperate across party lines. “As long as there’s reasonable people as the heads of the legislature and the governor, you’ll get it done,” Codey said. “There’s no excuse for this.” In New Jersey Christie’s clash with legislators stems from his demand for more authority over the state’s largest health insurer, Horizon Blue Cross Blue Shield. “He can’t get his way all the time,” Codey fumed. For his part, Christie has blamed the Democratic speaker of the Assembly, Vincent Prieto, calling him “the one who dug his heels in”. A majority of states—33 of them—are now controlled by a single party, and some of those also hit budget impasses this year. But provisions in many of those places, such as extending funding at current levels or setting temporary budgets until deals can be made, have spared residents, for the most part, from the effects. In Wisconsin, where Republicans control the governor’s office and the state Legislature, disagreements over transportation funding have slowed lawmakers. In Rhode Island, which is entirely under

Democratic control, the House has yet to vote on a $9.2-billion budget plan passed by the Senate last Friday. And in Oregon Gov. Kate Brown, a Democrat, and the Democratic-leaning Legislature have sparred over how the state taxes businesses, but lawmakers appeared to be headed toward an agreement this week. In states like Maine, however, the effects were immediate. Though state parks and emergency services were kept open, motor vehicle offices were closed, as was the lottery office. And the operations of agencies like the Office of Child and Family Services and the Department of Labor were curtailed, as thousands of state workers were idled and lawmakers inched toward a deal. “Days like today, we regularly have caseworkers that would go out to check on the children,” said Dean Staffieri, the vice president of a state employees’ union and a supervisor in a child protective services office, which he said had only a small crew on call for emergencies on Monday. For residents, the state’s first shutdown in decades was jarring. Danielle Sirois, a cashier at a Christmas Tree Shops store in Augusta, said she worried for the families of state employees. “I think they should all come together,” Sirois said of Maine’s lawmakers. “The world is scary to me right now because everybody is so at odds.” Maine’s combative governor LePage said he would allow state employees to take a day of paid leave on Monday, but many of the workers gathered at the State House wondered how he could do that when there was no budget in place. At the heart of the fight, at the moment, is LePage’s vow not to sign a budget this year with any tax increases. Late last week Senate Republicans and the Democrats who control the House agreed on a compromise budget. In a major concession by Democrats, it would repeal a voter-approved tax surcharge on the state’s highest earners, which had been expected to generate more than $300 million for education. But the bill also contained a roughly $20-million increase in the state’s lodging tax—as had the budget LePage first proposed. On Monday LePage said he would not sign a budget that included the lodging tax increase. Late in the evening, he and Sara Gideon, the Democratic House speaker, crafted a new deal that scrapped the increase, added money for Head Start programs and protected behavioral health reimbursements. State Sen. Roger Katz, a Republican who backed the budget deal, said the shutdown was the embarrassing result of negotiations with a moving target. The same lawmakers now incensed by the lodging tax, he said, had different complaints just days ago. “The tradition of consensus budgeting has really begun to fall apart here, as it has nationally,” Katz said. “I think for some, it’s about ego, it’s about wanting to be relevant, and it’s about wanting to have one’s fingerprints on the result. For some people, the fight is more important than the win.” New York Times News Service

Oil halts longest winning run as Opec output expands

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il h a l t e d g a i n s a f t e r t h e longest winning streak this year as Organization of the Petroleum Exporting Countries (Opec) output rose amid a boost from members exempt from supply cuts. Futures slid 0.6 percent in New York after advancing almost 11 percent the previous eight sessions. Opec production in June climbed to the highest level this year as Libya and Nigeria pumped more, according to data compiled by Bloomberg. The nations are not required to reduce supply under the Opec-led deal. US crude inventories probably dropped by 2.5 million barrels last week, a Bloomberg survey shows before a government report on Thursday. While prices have surged the past week, oil in New York and London still posted a monthly loss in June after tumbling into a bear market on concerns that rising global supply will counter curbs from the Opec and its partners. US crude inventories remain more than 100 million barrels above the five-year average. “Oil could quite easily revisit its lows again if we don’t see stronger seasonal demand from the US and Opec

members increase output further,” said David Lennox, a Sydney-based resource analyst at Fat Prophets. “Supply is well and truly adequate.” West Texas Intermediate (WTI) for August delivery was at $46.81 a barrel on the New York Mercantile Exchange, down 26 cents, at 2 p.m. in Hong Kong. Total volume traded was about 24 percent below the 100day average. The contract gained $1.03 to $47.07 on Monday. Brent for September settlement was 29 cents lower at $49.39 a barrel on the the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $2.36 to September WTI. Opec output rose by 260,000 barrels a day to 32.55 million in June, according to a Bloomberg News survey of analysts, oil companies and ship-tracking data. Half of the increase came from Libya and Nigeria, while Saudi Arabia boosted production by 90,000 barrels a day. Iraq will continue spending on its oil fields even if crude prices slip further, according to Oil Minister Jabbar Al-Luaibi. Bloomberg News

Wednesday, July 5, 2017

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US confidence boomed; the economy, not really

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fter Donald J. Trump won the presidential election, Americans’ optimism about the economic future soared. But midway through the year, that optimism has not translated into concrete economic gains.

This seeming contradiction exposes a reality about the role of psychology in economics—or more specifically, how psychology is connected only loosely to actual growth. It will take more than feelings to fix the sluggishness that has been evident in the United States and other major economies for years. Confidence isn’t some magic elixir for the economy: Businesses will hire and invest only when they see concrete evidence of demand for their products, and consumers intensify their spending only when their incomes justify it. The sharp rise in economic optimism after the election came through no matter how the question was asked or who answered, whether the survey was intended to capture consumer confidence or consumer comfort or consumer sentiment. It was true in surveys of smallbusiness owners and of CEOs of some of the biggest companies in the world. And the rise during the winter months in these surveys has mostly been sustained in the months since. But the economy is plodding along at the same modest rate it has for the last eight years nonetheless—at least when you look at “hard” data around economic activity instead of “soft” data like surveys, as analysts put it. Trump said on Twitter last Sunday that the stock market was at an “all-time high” and that unemployment was at its lowest level in years, both of which are true (he added that wages would start going up, which is certainly possible). But in overall measures of economic activity, the expansion looks much as it has for years, with steady growth of around 2 percent. The Trump economy looks an awful lot like the Obama economy. For all of business executives’ apparent enthusiasm, the nation is adding jobs more slowly in 2017 than it did in 2016, and investment spending by businesses is growing modestly; new orders for capital goods are up only 0.7 percent in 2017. Consumers’ spending was 2.7 percent higher in the first four months this year than in the same period of 2016, adjusted for inflation—which is slower than the 3.2-percent year-over-year gain at the end of 2016. And while the stock market has been surging and the Federal Reserve (the Fed) has raised short-term interest rates, longterm Treasury bond yields remain very low, suggesting that traders do not buy the idea that growth is poised to accelerate. A falling dollar suggests currency markets see improving prospects in Europe and elsewhere. There is no sign a recession is brewing, but neither is there evidence for the kind of boom you might expect if you believe that confidence is a crucial driver of economic growth. This is less surprising when you look at the historical record of confidence surveys. When financial commentators talk about the economy, they often use the elusive concept of confidence as

2%

The percentage of economic growth that has been steady for years

part of their narrative. It’s hard to describe what is happening in the global economy, with billions of people producing trillions of dollars of goods and services. Using a vague psychological concept is a tidy way of describing why things happen when the underlying drivers are uncertain. To say that “the economy is slowing down because people are less confident” sounds a lot better than “the economy is slowing down for a whole bunch of complex reasons that I’m not really sure about”. Confidence has a kind of mystical explanatory power, thanks to its vagueness. But “confidence” isn’t really some psychological pixie dust that determines the economic future. Rather, it often reflects underlying fundamentals—whether consumers see job opportunities readily available, for example, and whether businesses are seeing strong advance orders. “Confidence generally goes up when we see strong income growth or big gains in household wealth,” said Karen Dynan, a senior fellow at the Peterson Institute for International Economics whose former work for the Treasur y Department and the Fed included forecasting c o n s u me r s p e nd i n g. “ Yo u’ l l ty pically see higher consumption spending after that happens. But it’s caused by the rise in income and wealth, not the rise in confidence.” Sometimes these surveys can pick up on shifts in those fundamentals before they are evident in more concrete data points. But that doesn’t mean that they do a fantastic job on their own of predicting the economic future. Since 1999 there has been a fairly strong correlation between the Conference Board ’s consumer confidence index and the growth in personal consumption expenditures over the ensuing six months, just as you might expect. (And if the past rel at ionship holds, spend ing levels will accelerate.) But if you instead look at the relationship bet ween g row th over the preceding six months and the next six months, that correlation was stronger than con f idence. I n ot her word s, if you had just predicted that the immediate future would be similar to the recent past, you would have done a better job projecting consumer spending during the last couple of decades than if you had relied only on a confidence sur vey. Confidence surveys can make economic forecasts more accurate,

according to some analysis—but only in certain circumstances, and if used correctly. For example, Michelle L. Barnes and Giovanni P. Olivei of the Federal Reserve Bank of Boston found that forecasts are more accurate when they build in data from the Reuters/University of Michigan survey that is also used to calculate consumer sentiment. And Stéphane Dées and Pedro Soares Brinca of the European Central Bank found that confidence surveys can provide information about the future that economic fundamentals do not at economic turning points, and may be a factor in how crises spread between countries. Those results suggest that why confidence shifts matters a great deal. At certain moments, ordinary consumers and businesses may instantly pick up on shifting economic fundamentals that would take time to show up in the official economic data. For example, from July through November 2007, consumer sentiment and confidence numbers plummeted, even as measures of consumer spending and employment were relatively steady. Credit was tightening and the housing crisis was worsening, but consumers seemed to pick up that the economy was on the verge of a recession (which began in December 2007) before it was at all clear from official data. For every example like that, though, you can also find the reverse. Those same measures of confidence fell precipitously in September 2005, in the aftermath

of Hurricane Katrina. That disaster ultimately had no major effect on the overall economy. W hen con f idence r i ses or falls suddenly, the move will pre d ic t a sh i f t i n e conom ic performance only if something happens to the fundamentals to justif y it. The early warning that confidence surveys offered on the 2008 recession was useful, but the downturn happened not because consumer confidence fell, but because the underlying forces around housing and credit that it ref lected were so damaging. The post-K atrina drop wasn’t matched by any major deterioration in economic fundamentals, so it was a mere historical blip. One clue as to which precedent applies here is in the partisan breakdown in sentiment surveys. Instead of an across-the-board improvement in confidence, it appears that Republicans became sharply more confident while Democrats became somewhat less so. That implies that the postelection confidence surge was about conservatives feeling more giddy about their side winning than about the broad mass of Americans picking up on improving economic fundamentals not yet evident in the data. The Trump administration’s promises of major tax cuts, infrastructure spending and progrowth regulatory policy have been slow in coming, but could conceivably change that over time. But history shows that confidence alone will not cut it. New York Times News Service

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Wednesday, July 5, 2017

The World BusinessMirror

Editor: Lyn Resurreccion • www.businessmirror.com.ph

Macron to French parliament: Prepare for change

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ARIS—Declaring that citizens had an “overwhelming thirst for renewal”, President Emmanuel Macron urged France’s legislators in a speech on Monday to live up to the “gravity of the circumstances”, warning against the fear and cynicism wrought by poverty, terrorism, new forms of labor and ecological change.

The new president cast himself both as the agent of change France wanted and as his country’s rampart against a newly uncertain world order. Macron has said little since his election on May 7, cultivating something of an air of mystery about his exact intentions. He broke that semisilence on Monday in a speech lasting well over an hour to a rare joint session of the French Parliament at Versailles. He gave a lofty outline of his five-year term, setting a tone but largely eschewing specifics. Instead, t he president re verted to campaign mode: an extended, high-f lown discourse centered largely on the ordinary citizen’s almost mystical relationship to political power. That relationship had been damaged, he suggested.

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The members of France’s parliament, which President Emmanuel Macron wants to shrink by one-third A lon g t he w ay he r a n ge d w ide ly, w it h mora le - boost i ng pr a i s e for Fr a nce ’s c u lt u r a l her it a ge, a plea for “ hu m a ne a nd ju st ” t reat ment of ref ugees, dem a nd s for a less tec h noc rat ic Eu ropea n Un ion a nd a semid isg u ised d ig at t he U S u nd e r P re s id e nt D on a l d

French President Emmanuel Macron speaks during a special congress gathering both houses of parliament (National Assembly and Senate) in the palace of Versailles, outside Paris, on July 3. Macron will laid out his political, security and diplomatic priorities at an extraordinary joint session of parliament at the chateau of Versailles. Eric Ferferberg/Pool Photo via AP

J. Tr u m p w h e n h e w a r n e d a g a i n st t hose “ democ rac ies, long t ime a l l ies, now menacing t he est abl i shed order ”. By the standards of American speechmaking, it was abstract. But Macron was making a point: French citizens were demanding change after years of stagnation, change was needed, and he was the man to bring it about. “It’s about nothing less than reweaving, between French citizens and the republic, the relationship that has dissolved under the mechanical exercise of power,” Macron said. “A contractual relationship,” he added. “From efficiency, representativity and responsibility,

I want the emergence of a contractual republic.” “Our democracy can only be nourished in action, and in our ability to change what is everyday, and real,” he added. “It isn’t five years of adjustments and half-measures that we have in front of us,” Macron added. The French were “expecting a profound transformation”. For a start, he proposed shrinking, by a third, the body that was listening to him, France’s plethoric Parliament of over 900 members. Then, he told the lawmakers that they had to legislate less. “Let’s tr y to put an end to t he prol i fer at ion of leg i sl ation,” he said—which was not

con s i s te nt w it h t he r apid ly chang ing economy and societ y that confronts France. That plea was consistent with the disdain Macron has shown from the beginning for the world of conventional French politics. He stunned the traditional parties on the right and the left, and he is now buoyed by the election last month of a big majority from his own political movement. “ T he Fre nc h p e o p l e h av e shown their impatience with a political world made up of sterile quarrels and hollow ambitions in which we have lived up until now,” he said on Monday. Polls show the French are now more optimistic than they have been in some years. Macron aimed to encourage this optimism about the future on Monday. He called for France to become “the center of a new humanist project for the world”, telling citizens to beware “the cynicism that lies dormant in all of us”. He added, “And it is within each one of us that we must shut it up, day after day.” He got in a dig at the French news media, which he has largely shunned since his election, calling for “an end to these manhunts”, the “incessant search for scandal” and a “frenzy that is unworthy of us”—and that has already cost him several ministers, tainted by potential financial misdeeds. Howe ver, M ac ron h i m se l f largely benefited from the most

notorious such “manhunt” this year. He would probably not have been elected but for revelations in the news media about an embezzlement scandal touching his leading rival, center-right politician François Fillon. The Versailles speech was boycotted by members of Parliament on the far left, already taking up arms against Macron over his plans to overhaul France’s labor codes, and already casting the new president as the destroyer of the nation’s social protections. He touched only briefly on his labor overhaul plans last Monday. But unusually for a French politician, he warned against the encroachments of the welfare state on the citizens’ sense of personal responsibility. Macron has been criticized—most recently over the weekend—for slighting references to the less fortunate in French society, and to those who are not economically successful. That criticism did not appear to faze him in Monday’s speech. “Protecting the weakest” should not make of them “permanent wards of the state”, he said. “Certainly, we’ve got to recognize the essential role of public service, and of our civil servants,” he added. “But protecting the weakest doesn’t mean transforming them into helpless minors,” he said. “Every French person has a responsibility and a role to play in the conquests to come.” New York Times News Service

With fight for Mosul in final stage, militants strike back

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OSUL, Iraq—With the fight for Mosul in its final stage last Monday, Islamic State (IS) militants sent female suicide bombers hidden among fleeing civilians, while Iraqi forces and the US-led coalition unleashed punishing air strikes and artillery fire that set dozens of buildings ablaze. At least one Iraqi soldier was killed and five were wounded in the two separate suicide attacks, the military said. Last Sunday, a bomber in women’s clothing killed 14 people at a camp for displaced residents in Anbar province, a provincial official said. No group claimed responsibility for the attack. “These tactics don’t surprise me,” said Sgt. Ahmed Fadil, who patrolled Mosul’s Old City just 50 meters from the front. The militants “have nowhere to go. They’re trapped,” he added. Monday’s two suicide bombings against Iraqi soldiers followed three other such attacks by women—some of them teenagers—in the previous two days, said Sergeant Ali Abdullah Hussein. A soldier displayed the school ID card retrieved from the body of one of the bombers, showing her to be only 15. The photo was of serious young woman in a white hijab and indicated she had studied in Bangladesh. “Most of the people who blew themselves up today are women,” special forces Lt. Col. Salam Hussein said. He added seven women strapped with explosives approached the troops last Monday, “but

thank God, our units stopped [them]”. Government troops advancing through the Old City were using rougher tactics to clear the remaining pockets of IS forces. The tempo of air strikes was so great last Monday that coalition aircraft couldn’t keep up with the requests for air support from Iraqi ground forces. Instead, they sought approval for artillery strikes. Associated Press drone footage showed the result: dozens of buildings burning in the Old City. While shops have reopened and civilian traffic fills streets in retaken neighborhoods, thick black smoke continued to rise just a few kilometers away from IS-held territory on the bank of the Tigris River that divides Iraq’s second-largest city. The area controlled by the militants is less than a square kilometer. IS militants swiftly overran Mosul in 2014. The US-backed offensive to retake the city was launched in October and has proceeded slowly, even though Iraqi political and military officials had vowed to declare victory by the end of 2016. Iraqi forces began their push to retake the Old City in mid-June. Even though the militants are squeezed into smaller and smaller territory, the danger remains for units like Fadil’s. When they heard cries from civilians just around the corner, he and his colleagues rushed their commanding officer to safety into a nearby home that already had been cleared. They yelled at the group of sobbing women and children to hurry past. Fadil

explained the reason for their caution. “They cry and then—boom! They explode themselves,” he said. “The closer we get to victory, the more suicide bombers they will send.” At one screening point, soldiers anxiously held civilians back at gunpoint, shouting at men and boys to strip to their underwear. Hussein, of the special forces, and a group of about a dozen men searched on foot last Monday for more suicide bombers. An informant pointed out a house occupied by IS fighters. A soldier kicked in a door, shouted a warning and threw two grenades into the front room. A second soldier stuffed a rag into a plastic jug of gasoline, lit it and threw it inside. “There are some suicide bombers who refuse to leave the houses, so we’re forced to deal with them with smoke and fire and hand grenades,” Hussein said, noting that the troops burned only the basement, not the house. His men seized five suspected IS fighters, binding their hands with electrical wire and blindfolding them with scraps of cloth. At least one of the five was arrested. For most of the soldiers in Mosul, the final days of the grueling battle caps more than three years of fighting the militants. Hassan Ahmed, a soldier with the special forces deployed in the Old City, said he can’t deny that the war has changed him. “It’s like I’m heartless—I don’t feel anything,” he added. “But we are still good people. We have mercy.” AP

Good atmosphere hoped at Putin-Trump meeting

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ussia isn’t expecting any immediate breakthroughs at the first meeting between Presidents Vladimir Putin and Donald J. Trump, though the Kremlin hopes the two leaders can get off to a good start that lets them begin tackling thorny issues, Putin’s top foreign-policy aide said. “We understand that it’s complicated, that relations with Russia have become hostage to the internal political squabbles in the US, but so what? It’s hard for us too. But we want to and will work together with America,” Putin adviser Yuri Ushakov told reporters last Monday. “Relations have to be taken out of the state they’re currently in.” Russian and US officials are seeking a window in the schedules of both presidents at the July 7 and 8 Group of 20 summit in Hamburg, Ushakov said. Putin and Trump plan to discuss the conflicts in Syria and Ukraine and the fight

against terrorism, as well as a dispute over Russian diplomatic property seized last December, the official added. Putin’s hopes of improved ties promised by Trump before the election have run into fierce resistance in Washington, as the US president grapples with investigations into possible collusion between his campaign officials and a Russian hacking campaign allegedly aimed at influencing last year’s vote. The Obama administration in December expelled 35 Russian diplomats and shut down two diplomatic compounds outside New York and Washington in retaliation for the Kremlin’s interference, properties that the Russian government is now seeking to get back. Russia’s ambassador to the US, Sergey Kislyak, met with Undersecretary of State Thomas Shannon last Monday to discuss the two presidents’ meeting, as well as “areas of mutual concern”, the State

Department said in a statement. Russia canceled planned talks between Shannon and Deputy Foreign Minister Sergey Ryabkov in Saint Petersburg last month in response to the US expansion of sanctions over the conflict in Ukraine. The tone of two leaders’ first face-toface encounter will be critical, Ushakov said, noting that no specific agreements have yet been prepared. “As as I see it, the atmosphere itself of the meeting can allow us to resolve many issues, including cooperation in the international field and bilateral topics,” he added. “It’s really important, everyone is waiting for it.” Last week US National Security Adviser H.R. McMaster told reporters that no agenda had yet been set for the meeting, but that it would cover both areas of tension and possible cooperation. Bloomberg News

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Editor: Efleda P. Campos • Wednesday, July 5, 2017 A9

DTI chief wants PHL to reach top 20 in ease of doing business by 2020

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ASAY CITY—Following the 2017 Doing Business (DB) Report indicating the Philippines moved up four spots from 103rd last year to 99th out of 190 economies, the country’s trade chief expressed hope for the Philippines to reach top 20 by 2020 in the global competitiveness and ease of doing business (EODB) ranking, stressing the urgent need to leapfrog streamlining efforts toward automation of government transactions.

Speaking at the fifth EODB Sum-

mit on June 28, Trade Secretary Ramon M. Lopez said preparations are now underway toward the creation of an e-government online system, as part of the government’s effort to improve EODB in the country. The DB Report measures the country’s competitiveness focusing on the regulations, processes and time spent germane to the completion of the business life cycle, from starting, getting permits and credits to closing. Preliminary programs for the online system include the development a local government unit (LGU) “wiki web site” that will feature business permitting procedures nationwide, the establishment of a one-stopshop concierge at the Quezon City

LGU and the creation of a Business Manual for Business Registration. “These initiatives are preparatory to the creation of a government online system that will expand even more economic opportunities leading to shared prosperity,” Lopez said. The trade chief also called on gover nment of f ices to continue streamlining their business processing and licensing system. He said that the sector of micro, small and medium enterprises (MSMEs) should benefit from the ongoing reforms in the area of EODB. “The vision is to be one of the best, not only for ranking purposes but to really make it easy for both local and foreign businesses, especially MSMEs to register their businesses and get necessary permits,” he added.

MARKET DEVELOPMENT UPDATE

Coco Loco: Mexico and PHL in global coconut trade

“For those who have less in life, we do not make their lives harder in dealing with the government. Their business is to create, innovate and employ people, not to spend days lining up in government offices,” Lopez said, emphasizing the EODB is part of the 10-point socioeconomic agenda of President Duterte. These ongoing reforms must be embedded in institutions and should be translated into a more efficient delivery of government services, he said. “Instead of attracting people to establish their own businesses, some have shied away and were discouraged to continue due to the time spent and cost of money to comply with various requirements,” he said. In response to this, the government established the Doing Business (DB)

Task Force, composed of 10 work teams from government agencies and the private sector to implement reforms in the business regulatory environment. Each work team came up with reforms and action plans to be accomplished as short- and long-term targets. The government, through the DB Task Force and the National Competitiveness Council of the Philippines (NCCP), has undertaken reforms in the past four years to enhance business-enabling environment more efficient in the country. Earlier last week, Lopez met with the New Zealand Embassy officials to explore possible cooperation with the Philippines on EODB. New Zealand is poised to share its best practices as one of the top countries in the global EODB ranking.

Subic bizmen share best practices with entrepreneurs in DTI forum

Conclusion

Working on a nutty comeback

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ILL Mexico, which currently has a minuscule coconut production, catch up fast enough to compete with world leaders like the Philippines and Indonesia? The Mexican government thinks that, by putting programs and resources in place, it can be a contender. Mexico’s main challenge is to address the development of small producers, which are usually family business and small landowners who don’t have the economic and technological resources, as well as the knowledge to make the most of their lands. According to the Sagarpa (Mexican Ministry of Agriculture), the coconut-production chain represents for Mexico a commercial opportunity of $160 million. Among coconut products, water is the one with the greatest increase, with an average annual growth of 70 percent between 2009 and 2016. The net production of coconut in the country amounts to 221,000 tons, according to figures from the Ministry of Agriculture, which in the last two years had announced several investments to boost palm farming of coconut in Mexico in the key coconut-producing states. Mexican producers need not look too far for the international prospects of coconut: In neighboring United States the coconut-water industry is a growing billion-dollar market. Sagarpa has provided incentives for investment projects in infrastructure and equipment to revive coconut production. They have put in place the Strategic Program to Boost the Coconut Value Chain in the 12 states located in the tropical coasts of Mexico. In 2014 the first “Agro -Cluster” of coconut was built in the state of Guerrero. It currently benefits 2,500 producers and hosts 12 companies and civil associations. The program does not only benefit coconut producers, but also includes cultivators of cocoa, rubber, pepper, pineapple, palm oil, coffee, nuts, stevia, vanilla, mangosteen and amaranth from the states of Guerrero, Chiapas, Oaxaca, Veracruz and Puebla. This cluster is now growing better quality and coconut plants more resistant to pests. It is working to boost productivity and yield. In May 2017 the first National Coco Forum in Mexico brought together industry leaders, including international packaging, production and nutrition specialists, to capitalize on international business opportunities for Mexican coconut. The Mexican private sector is also supporting this program. Companies, such as Coco Colima, are providing technology and know-how to producers,

ASSISTANT Secretary Blesila A. Lantayona (third from right) of the Department of Trade and Industry (DTI) touts the value of sharing best practices in entrepreneurship during a session of the DTI’s Mentor Me program in the Subic Bay Freeport on June 14.

By Henry Empeño | Correspondent

By Vichael Angelo D. Roaring

Commercial Counsellor Philippine Trade and Investment Center, Mexico City

to grow resistant and more productive plants, and cultivate organic products without pesticides. Currently, Mexico is the 11th-largest world producer of coconut palm. But it seems the country can take advantage of the fact that Asian plantations are aging and facing a variety of problems that the Mexican industry also faced in the past.

Mexico: Opportunities and threats for PHL coconut

ACCORDING to the Philippine Coconut Authority (PCA), the Philippines has a cultivated area of 3.5 million hectares, with almost 330 million coconut-bearing trees, or an average of 45 nuts per tree with a three-year yield. For the last 15 years, copra production has averaged 2.5 million tons, and exports have fluctuated between 1.5 million tons and 2.3 million tons. Current priorities for the PCA include rehabilitation and redevelopment of coconut lands lost to Supertyphoon Yolanda. Mexico’s copra production, according to Sagarpa, was around 209,000 tons from 2013 to 2016 with an average growth rate of only 2.2 percent. Mexico does not have a specialized government agency for the coconut sector like the PCA. The government is implementing a program of land recovery and industry development, but it will take time. More research needs to be done, more technology needs to be introduced, while the sector awaits the effects of the tax incentives the government is proposing to make small lands profitable for coconut cultivation. While the Mexican government and industry are working to revive its coconut industry, Mexico will continue to import coconut products, to supply its domestic market. At the supermarket, the Mexican consumer can find coconut products coming from different countries, mainly from Mexico, the US and Korea. Some of these products are made with Philippine coconut, like the US brand “Nutiva”, which exports its coconut butter with Philippine ingredients to Mexico. The Department of Trade and Industry´s Philippine Trade and Investment Center in Mexico City (DTI-PTIC) has been working to activate

new Mexican buyers and importers of Philippine coconut products. PTIC Mexico organized a delegation of Mexican buyers to the last International Food Exhibition (Ifex) in Manila in May and has so far received very positive response as the buyers establish regular business with Philippine companies. One such Mexican buyer now plans to regularly import each month five to six forty-foot containers of Philippine coconut. The buyer shared with PTIC his insight that the next four to five years will provide a good window of opportunity for the Philippines to export coconut products to Mexico. What should give Philippine policy-makers and coconut industry players more pause for reflection are the efforts that Mexico is currently doing to invest and incentivize the redevelopment of its coconut industry. Although Mexico is a million tons away from reaching Philippine production levels, that country has the ingredients of growing its coconut industry to rival that of the Philippines. Its huge swatches of territory with climate ideal to coconut production is its key advantage. If it successfully redevelops its coconut industry, its geographic proximity to the US and Canada will make Mexico an ideal supplier to the North American market in the future. Philippine government authorities and privatesector coconut producers must take a long-term view of sustaining and growing the country’s market share in the global-coconut industry against such competitive threats. The government, together with the entire coconut-industry supply chain, should continue to increase agricultural lands planted to coconuts, and improve productivity and product innovation, to keep the country’s position in the global market intact. Vichael Angelo D. Roaring is a Trade Service Officer of the Department of Trade and Industry’s Foreign Trade Service Corps. He is currently assigned as commercial counsellor at the PTIC attached to the Philippine Embassy in Mexico. PTIC Mexico is the DTI’s frontline office in promoting Philippine exports and investments in Latin America.

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UBIC BAY FR EEPORT— About 200 entrepreneurs from Zambales and Olongapo City learned best practices from some of the most successful business executives in the country through the Mentor Me program of the Department of Trade and Industry (DTI). The mentoring session, held on June 14 at the Subic Bay Travelers Hotel here, sought to help owners of small and medium enterprises penetrate markets more stably and consistently, DTI Assistant Secretary Blesila A. Lantayona said. Lantayona said as much as 70 percent to 80 percent of small to medium businesses have a short life span due to insufficient knowledge among owners on how to manage a business. “But small and medium enterprises provide a whopping 62 percent of the jobs in the Philippines, so you must not underestimate yourselves,” she told the assembled entrepreneurs. Paul Anthony de Guzman, marketing officer of the Philippine Center for Entrepreneurship (Go Negosyo), reminded participants in the forum that all entrepreneurs, big and small, should live by the vision of DTI’s Kapatid Angat Lahat program. The Kapatid initiative was launched in August last year to allow medium and large companies to help micro and small enterprises through the use of inclusive business models and by integrating them into their value chain. De Guzman said entrepreneurs must lift and encourage one another, and allow small companies to benefit from and with their bigger counterparts. Meanwhile, Tokyo Tempura CEO Jorge Noel Y. Wieneke III impressed upon the audience the need for an attitude of gratitude, determination, risk-taking, passion and out-

goingness. He said these helped give birth to his Potato Corner franchise, which he had built with close friends and family. Sharing the origins of his entrepreneurial mind-set, Wieneke recalled his “business-centric mentality” stemmed from an infatuation with a childhood toy, which caused him to find ways to make money through odd jobs. Wieneke, who also teaches at the Ateneo de Manila University’s Graduate School of Business, is the president and managing director of Asian Food Project Inc. and serves as business consultant for Good Earth Restaurant Go Fish Deli, Marina Seafood Restaurant and Value Rice Inc. In the same forum, Business Mentors Inc. President Wilfredo Victor Arcilla said entrepreneurs play a big ger role in nationbuilding, perhaps more so than overseas Filipino workers who are recognized for their contribution to the Philippine economy through remittances. “The money OFWs collectively generated, if these were divided among the indiv idual OFWS, would still be a paltry amount. The OFWs weren’t going to change the Philippines; only enterprises will,” he concluded. Arcilla also lectured on current marketing trends, followed by inspirational success stories from local entrepreneurs led by James Lee, chairman of the Micro, Small and Medium Enterprises Development Council of Olongapo City. At the end of the session, DTI’s Lantayona cited the high success level of the Mentor Me and Kapatid programs, saying some participants from Tacloban had collectively generated P14 million after only five months of using a business model formulated under the DTI project. Lantayona said the DTI now plans on extending the program through web seminars or webinars to make it accessible to more entrepreneurs.

A10 Wednesday, July 5, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Black propaganda vs coconut oil to hurt poor

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he American Heart Association (AHA) released on June 15 an advisory saying the consumption of coconut oil is “unhealthy”. It claimed that coconut oil raises LDL cholesterol, like saturated fats found in butter, beef fat and palm oil. LDL cholesterol, which is considered bad cholesterol, is a major cause of arteryclogging plaque and cardiovascular diseases.

The AHA said consumers should replace coconut oil with polyunsaturated or monosaturated fat, which “lowers triglyceride levels”, an independent biomarker of risk for cardiovascular disease. It said evidence has accumulated that strengthens its recommendation to replace saturated fat with polyunsaturated and monosaturated fat to avoid heart disease. In its web site, AHA claimed it is America’s oldest and largest voluntary organization dedicated to fighting heart disease and stroke. Prior to the AHA advisory, the World Health Organization (WHO) released a fact sheet, which indicated that unsaturated fats (usually found in fish, avocado, nuts and olive oil) are preferable to saturated fats (including coconut oil). The Asian and Pacific Coconut Community (APCC) wrote a letter to the WHO to register its objection. The APCC said the Food and Agriculture Organization (FAO) report, on which the WHO fact sheet was based, ignored the distinction between medium-chain saturated fat and long-chain saturated fat. The APCC said the metabolic differences between medium-chain fat and long-chain fat have been known for many years. This distinction, the group said, is central to the understanding of the health effects of coconut oil, which is made up of about 63-percent medium-chain fat. The APCC also said coconut oil is a component of an ancient and traditional diet, which is consumed in more than 90 countries. A number of scientific studies have concluded that coconut oil is not linked to coronary heart disease. In the Polynesian islands of Pukapuka and Tokelau, for instance, vascular disease is uncommon in both populations and there was no evidence of the high coconut oil intake having a harmful effect in these populations. Also, in a 2011 Philippine study, it was found that dietary coconut-oil intake was positively associated with high-density lipoprotein cholesterol, especially among premenopausal women, suggesting that coconut oil intake is associated with beneficial lipid profiles. The Philippines’s very own Dr. Conrado S. Dayrit, who died in October 2007 at the age of 88, wrote a book in 1980, The Truth About Coconut Oil, which extolled the health benefits of coconut oil, saying it is better than antibiotics. Dayrit, who was a professor of Pharmacology at the University of the Philippines and served as past president of the National Academy of Science and Technology, also studied the capability of virgin coconut oil to retard the development of acquired immune deficiency syndrome (AIDS) among HIV patients. He found that viral counts in 15 HIV-patients declined considerably after taking virgin coconut oil over six months. The APCC and local experts said the AHA seemed to have ignored these studies. The timing, they said, is also suspect given the unprecedented growth of coconut-oil shipments in the last seven years, a development that does not bode well for big producers of vegetable oil in the West. This, the APCC said, may have been the reason behind the revival of the black propaganda against coconut oil. The APCC, an intergovernmental organization consisting of 18 producers and exporters of coconut oil, has no choice but to fight back. In the case of the Philippines—considered the top exporter of coconut oil—it is not really about profits, but about the livelihood of 3.5 million farmers who rely on the “miracle tree” for their income. These farmers are smallholders, who own less than 2 hectares of land, so any disruptions in global trade that may be caused by developments, such as the AHA advisory, could cause them to go hungry. Certainly, products that make people sick should not be consumed. But groups that want to make such claim should ensure that their assertions are backed by irrefutable evidence and not just recycle findings or parrot the statements of their sponsors.

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Edgardo J. Angara

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hat’s the provocative title of a new book that surveyed conflicts between the top superpowers—the incumbent and the rising one—across 500 years of history. That situation, according to Harvard Kennedy School Prof. Graham Allison, occurred 16 times. Twelve broke out in war.

Over the weekend, tensions escalated between two of the world’s strongest countries—the United States and China. Last Friday Beijing expressed dismay with Washington’s announcement of a $1.4-billion arms-trade deal with Taiwan and of unilateral sanctions levied on China’s Bank of Dandong, which the White House accused of laundering North Korea’s money. Chinese military officials also strongly protested a Freedom of Navigation (FON) patrol conducted by an

American guided-missile destroyer within 12 nautical miles of Triton Island, which is part of the disputed Paracel Islands archipelago. Beijing vowed to step up their own air and sea patrols of the area, describing the US’s FON patrol as “a serious political and military provocation”. These developments appear as an abrupt shift in US-Chinese relations. They were supposedly cordial after President Donald J. Trump hosted President Xi Jinping in his Mar-aLago resort in April. And one of the main triggers to

the sudden shift is China’s reluctance to rein in its treaty-ally North Korea from developing a nuclear intercontinental ballistic missile (ICBM) that could obliterate Tokyo, Seoul and several continental US cities in an instant. Relations between the US and China have grown increasingly competitive over the past decade, with the latter gaining more influence and prominence, and spreading its diplomacy and resources in virtually all the continents. Over the years, this geopolitical tussle has been played out in several areas. For instance, when the US—at least under the Obama administration—had pushed for the Trans-Pacific Partnership (TPP), China promoted its Belt and Road Program as the free-trade agreement (FTA) of choice. When Beijing pursued its island-building activities in the South China Sea, Washington pushed back and insists that China must adhere to international rules to be a good neighbor. Allison warns that the US and China could fall into a “Thucydides Trap”—a reference to the Greek

The hijacked American presidency

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By Charles M. Blow | New York Times News Service

very now and then we are going to have to do this: Step back from the daily onslaughts of insanity emanating from Donald J. Trump’s parasitic presidency and remind ourselves of the obscenity of it all, registering its magnitude in its full, devastating truth.

T. Anthony C. Cabangon

Editor in Chief

Senior Editors

Are US and China destined for war?

There is something insidious and corrosive about trying to evaluate the severity of every offense, trying to give each an individual grade on the scale of absurdity. Trump himself is the offense. Everything that springs from him, every person who supports him, every staffer who shields him, every legislator who defends him, is an offense. Every partisan who uses him—against all he or she has ever claimed to champion—to advance a political agenda and, in so doing, places party over country, is an offense. We must remind ourselves that Trump’s very presence in the White House defiles it and the institution of the presidency. Rather than rising to the honor of the office, Trump has lowered the office with his whiny, fragile, vindictive pettiness. The presidency has been hijacked. Last week, when Trump attacked two MSNBC hosts, people were aghast. The condemnation came quickly and from all quarters. But his words shouldn’t have shocked. His tweet was just another pebble on a mountain of vulgarities. This act of coarseness was, in fact, an act of continuity. Trump was being Trump: the grossest of the gross, a

profanity against propriety. This latest episode is simply part of a body of work demonstrating the man’s utter contempt for decency. We all know what it will add up to: nothing. Republicans have bound themselves up with Trump. His fate is their fate. They have surrendered any moral authority to which they once laid claim—rightly or not. If Trump goes down, they all do. It’s all quite odd, this moral impotence, this cowering before the belligerent, would-be king. A madman and his legislative minions are holding America hostage. There are no new words to express it; there is no new and novel way to catalog it. It is what it is and has been from day one: The most extraordinary and profound electoral mistake America has made in our lifetimes and possibly ever. We must say without ceasing, and without growing weary by the redundancy, that what we are witnessing is not normal and cannot go unchallenged. We must reaffirm our commitment to resistance. We must always remember that, although individual Americans made the choice to vote affirmatively for him or actively withhold their

support from his opponent, those decisions were influenced in ways we cannot calculate by Russian interference in our election, designed to privilege Trump. We must remember that we now have a president exerting power to which he may only have access because a foreign power hostile to our interests wanted him installed. We must remember that he has not only praised that foreign power, he has proved mysteriously averse to condemning them or even acknowledging their meddling. We must remember that there are multiple investigations ongoing about the degree of that interference in our election—including a criminal investigation—and that those investigations are not constrained to collusion and are far from fake news. These investigations are deadly serious, are about protecting the integrity of our elections and the sovereignty of our country, and are about a genuine quest for truth and desire for justice. Every action by this administration is an effort to push forward the appearance of normality, to squelch scrutiny, to diminish the authority and credibility of the ongoing investigations. Last week, after a growing list of states publicly refused to hand over sensitive voter information to Trump’s ironic and quixotic election integrity commission, White House Spokesman Sarah Huckabee Sanders blasted the pushback as a “political stunt”.

historian who documented the Peloponnesian War between Athens (the dominant superpower) and Sparta (the challenger) in the 5th century BC. In a 2015 The Atlantic article, Alison wrote that one of the main risks associated with this Thucydides Trap is that “business as usual— not just an unexpected, extraordinary event—can trigger large-scale conflict…. When a rising power is threatening to displace a ruling power, standard crises that would otherwise be contained...can initiate a cascade of reactions that, in turn, produce outcomes none of the parties would otherwise have chosen.” In other words, when it comes to the current conflict between the US and China, both sides need to tread cautiously and need to initiate extraordinary measures to stave off any unwanted armed conflict. The mighty military-industrial complexes of both must realize that a nuclear war between them will render the entire planet into a barren wasteland.

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

But in fact, the commission itself is the political stunt. The committee is searching for an illegal voting problem that doesn’t exist. Trump simply lied when he said he would have won the popular vote were it not for millions of illegal votes. And then he established this bogus commission—using taxpayer money— to search for a truth that doesn’t exist, to try to prove right a lie that he should never have told. This commission is classic Trump projection: There is a real problem with the integrity of our last election because the Russians helped power his win, but rather than deal with that very real attack on this country, he is instead tilting at windmills concerning in-person voter fraud. Last week CNN reported: “The Trump administration has taken no public steps to punish Russia for its interference in the 2016 election. Multiple senior administration officials said there are few signs the president is devoting his time or attention to the ongoing electionrelated cyber threat from Russia.” Trump is depending on people’s fatigue. He is banking on your becoming overwhelmed by his neverending antics. He is counting on his capacity to wear down the resistance by sheer force. We must be adamant that that will never come to pass. Trump is an abomination, and a cancer on the country, and none of us can rest until he is no longer holding the reins of power.

Opinion BusinessMirror

opinion@businessmirror.com.ph

It’s time farmers consolidate and go ‘Smart’ farms Michael Makabenta Alunan

on the contrary

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espite decades now of agrarian reform, farmers now owning farms still remain poor as land ownership does not guarantee better production and higher incomes.

n Why farmers carp over CARP. While land reform breaks the age-old feudal bondage and allows farmers relative freedom, the lack of support services has magnified land reform’s fundamental defect—breaking up lands into small lots only deprive them of the value of economies of scale. Ever since President Cory Aquino’s Comprehensive Agrarian Reform Program (Carp) three decades ago, a new generation has supposedly replaced the aging parent farmer-beneficiaries whose small 1- to 2-hectare lot is being parceled further into smaller lots for their children, making the land all the more uneconomical. Unable to live from the land owing to low productivity, the farmers’ sons and daughters leave their farms, composing the bulk of ruralto-urban migration and the overseas Filipino workers phenomenon where 6,000 now leave the country every day. Left behind, their parents have increased the average age of farmers to 58 years. n Go for farms, not arms. Many of the disgruntled left behind become easy recruits of insurgents and extremists like Abu Sayyaf and the Islamic State of Iraq and Syriainspired Maute Group in Marawi. n Unfortunately, when trouble happens, livelihood stops, causing tremendous havoc, that could take years to recover as the skilled people have left, leaving behind those lacking in skills to get back on their feet. Vicente “Ka Sonny” Domingo, chairman of the Kapisanan ng Magsasaka, Mangingisda at Manggagawa ng Pilipinas Inc., asserts the only solution to rural unrest is “A Call to Farms, Not Arms”, which he says is a good theme for a summit. He quotes Biblical passages about converting “swords into plowshares and spears into pruning hooks”, and that the “nation must not take up sword against another nation, nor train for war anymore”. In short, peace and development can happen when people give up arms, and go for farms. n Why not go “Smart” farms? An agriculture graduate from UP Los Baños in 1963, Ka Sonny started an illustrious career with a multinational company introducing chemical fertilizers, but resigned from a high-paying job to go full-time farming after witnessing farmers’ poverty in Mindanao, while he is eating steak with his American boss. Since the 1960s he has been through countless projects, which were all unsustainable because they were too small. Now going 77 years old, he realized farmers have not escaped poverty, despite the promises of CARP. Ka Sonny’s idea of a Smart farm consolidates small farms, say, 1,000 farmers at 1 hectare each, into viable integrated farming units. This bails out farmers from subsistence farming, as clustering reverses the break of land due to land reform, thus bringing back economies of scale. Instead of giving the usual cash credit to farmers for their inputs of choice, individual credits can be pooled into a joint venture along corporate structures, adopting cooperative principles. He attributes the success of farmers in advanced countries to institutional partnerships, for one, between farmers and professionals, schooled in management, technology, finance, marketing, etc. In

Ka Sonny’s idea of a Smart farm consolidates small farms, say 1,000 farmers at 1 hectare each, into viable integrated farming units. This bails out farmers from subsistence farming, as clustering reverses the break of land due to land reform, thus bringing back economies of scale. Instead of giving the usual cash credit to farmers for their inputs of choice, individual credits can be pooled into a joint venture along corporate structures, adopting cooperative principles. South Korea, for instance, farmers till their farms in the morning and later work in their processing plants managed by professionals and graduates of universities, who are both their employees and bosses. This partnership assures higher success. But more than partnership, Smart’s acronym—Systematic, Modernized, Appropriate Rural Technologies—spells out its thrust. n Pooling versus fooling. Critics may consider Ka Sonny a fool for his ideas, but he argues if banks already lend big individually, why not pool them into bigger loans that can fund multiple integrated projects that will guarantee viability, sustainability and faster payback periods of even three years. Smart farms will adopt state-ofthe art technologies; produce more outputs; process more value-adding; acquire postharvest and logistical facilities that will enable them to market directly; and produce their own power and irrigation; and develop commercial and other services for the community. Pooling is the strategy versus fooling by meddling middlemen. This is the principle of the broomstick, whereby a single stick cannot sweep, but together as a broom the sticks can sweep out any problem. Whether this is a sweeping statement or not, it has some logic. n There’s class now in this grass? One of the many technologies to be introduced is biofuel ADX—a taller, sturdier sugarcanelike plant of the grass family from South America that is a weed with no sugar extract but, because it can grow anywhere with no fertilizers, no soil conditioner, no water, or no sunshine, it is the best feedstock for biomass energy. Australian consultant Alan Hayward will help set up a tissue culture facility to mass produce ADX that can be harvested every four months with ratooning capability of 20 years. As a lazy man’s crop, it can be programmed for daily harvesting to power mini gasifiers that can power deep-well water pumps. Farmers can therefore have “electrigation” and power from a hated weed now a grass with class. Compared to rice hull for bioenergy costing P2.50 per kilo, ADX costs only 50 centavos/kilo, the difference can help increase farmers’ incomes. Yields in tropical countries are double the ADX in Europe. In the end, it is not the share of the pie that matters as farmers already own 100 percent of their land, wiping out poverty mainly comes through physical wealth creation or productivity.

E-mail: mikealunan@yahoo.com

Wednesday, July 5, 2017 A11

A scourge worse than terrorism Teddy Locsin Jr.

Free fire Continued from A1

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ince 9/11, civilized societies have been able to counter terrorism with more or less success—but with never-wavering, neverstinting effort.

Everything has been thrown at the problem of terrorism. This is what we don’t understand. Why have the same efforts not been exerted, the same dedication not been demonstrated, the same relentless searching and ruthless measures taken to combat human trafficking, especially of women and girls who undergo the ultimate terrorism of sexual slavery. Worse than death is prolonged degradation: the use of the

human person as a thing to be used and disposed of. One suspects that the comparative feebleness of efforts to combat human trafficking is because civilized society battens on human trafficking, especially of women and girls, and draws pleasure from the awful, unspeakable and inexcusable victimization that human trafficking consists of. It is worse than ancient slavery because it is inflicted

at a time when everyone knows her human dignity, so that to physical abuse is added degradation. Until we take human trafficking as seriously as the threat to all our lives that terrorism poses—and not just to the victims of human trafficking—efforts to stop it will be halfhearted as they have been. The adoption of the 2030 Agenda for Sustainable Development is a step forward but it is just a step. For the Philippines, our commitment in this fight against a scourge worse than terrorism is manifest in our tabling of the resolution, “Trafficking in Women and Girls” since 1994. The resolution recognizes the importance of global partnership in this endeavor—not least because the victims come from all over the world, and the class of those who take pleasure in their plight is equally universal, and male. The resolution welcomes the New York Declaration on Large Movements of Refugees and Migrants, which puts them at greater risk of

Oh! What a lovely trade war Paul Krugman

new york times

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emember when Donald J. Trump declared that “nobody knew that health care could be so complicated”? It was a rare moment of self-awareness for the tweeter-in-chief: He may, briefly, have realized that he had no idea what he was doing.

Actually, though, health care isn’t all that complicated. And Republican “reform” plans are brutally simple —with the emphasis on “brutally”. Trump may be the only person in Washington who doesn’t grasp their essence: Take health insurance away from tens of millions so you can give the rich a tax cut. Some policy subjects, on the other hand, really are complicated. One of these subjects is international trade. And the great danger here isn’t simply that Trump doesn’t understand the issues. Worse, he doesn’t know what he doesn’t know. According to the news site Axios, Trump, supported by his inner circle of America Firsters, is “hell-bent” on imposing punitive tariffs on imports of steel and possibly other products, despite opposition from most of his Cabinet. After all, claims that other countries are taking advantage of America were a central theme of his campaign. And Axios reports that the White House believes that Trump’s base

“likes the idea” of a trade war, and “will love the fight”. Yep, that’s a great way to make policy. OK, so what’s complicated about trade policy? First, a lot of modern trade is in intermediate goods—stuff that is used to make other stuff. A tariff on steel helps steel producers, but it hurts downstream steel consumers like the auto industry. So even the direct impact of protectionism on jobs is unclear. Then there are the indirect effects, which mean that any job gains in an industry protected by tariffs must be compared with job losses elsewhere. Normally, in fact, trade and trade policy have little, if any, effect on total employment. They affect what kinds of jobs we have; but the total number, not so much. Suppose that Trump were to impose tariffs on a wide range of goods —say, the 10-percent across-theboard tariff that was floated before

he took office. This would directly benefit industries that compete with imports, but that’s not the end of the story. Even if we ignore the damage to industries that use imported inputs, any direct job creation from new tariffs would be offset by indirect job destruction. The Federal Reserve, fearing inflationary pressure, would raise interest rates. This would squeeze sectors like housing; it would also strengthen the dollar, hurting US exports. Claims that protectionism would inevitably cause a recession are overblown, but there’s every reason to believe that these indirect effects would eliminate any net job creation. Then there’s the response of other countries. International trade is governed by rules—rules America helped put in place. If we start breaking those rules, others will too, both in retaliation and in simple emulation. That’s what people mean when they talk about a trade war. And it’s foolish to imagine that America would “win” such a war. For one thing, we are far from being a dominant superpower in world trade —the European Union is just as big a player, and capable of effective retaliation (as the Bush administration learned when it put tariffs on steel back in 2002). Anyway, trade isn’t about winning and losing: It generally makes both sides of the deal richer, and a trade war usually hurts all the countries involved. I’m not making a purist case for free trade here. Rapid growth in

being trafficked and enslaved. To say that more must be done, understates the gravity of the situation. Governments must ensure coherence between their laws on, and measures supposedly responsive to the abuse of migrants, so that laws are not used to allow abuses—as is often the case with immigration rules. Malice never lacks for inventiveness to circumvent the moral imperative of decency toward the poor and weak. In September, when we take stock of the implementation of the Global Plan of Action to Combat Trafficking in Persons, we must consider these developments in charting our path forward toward the eradication of this scourge. Compared to counterterrorism, too little has been done, with the same unequivocal commitment, near limitless expense and ingenuity to combat and eradicate human trafficking—which is the ultimate terrorism. It is the terrorism of the targeted weak, who are in the special care and protection of humankind.

globalization has hurt some American workers, and an import surge after 2000 disrupted industries and communities. But a Trumpist trade war would only exacerbate the damage, for a couple of reasons. One is that globalization has already happened, and US industries are now embedded in a web of international transactions. So a trade war would disrupt communities the same way that rising trade did in the past. There’s an old joke about a motorist who runs over a pedestrian, then tries to fix the damage by backing up —running over the victim a second time. Trumpist trade policy would be like that. Also, the tariffs now being proposed would boost capitalintensive industries that employ relatively few workers per dollar of sales; these tariffs would, if anything, further tilt the distribution of income against labor. So will Trump actually go through with this? He might. After all, he posed as a populist during the campaign, but his entire economic agenda so far has been standard Republican fare, rewarding corporations and the rich while hurting workers. So the base might indeed like to see something that sounds more like the guy they thought they were voting for. But Trump’s promises on trade, while unorthodox, were just as fraudulent as his promises on health care. In this area, as in, well, everything, he has no idea what he’s talking about. And his ignorance-based policy won’t end well.

For a more regulated Internet, thank Canada By Noah Feldman Bloomberg View

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oes Canada own the Internet? The question may sound like a joke, but it’s the serious challenge presented by a Canadian Supreme Court decision issued last week. The court ordered Google to deindex search results that were letting one side of a lawsuit violate the intellectual-property rights of the other—not just in Canada, but worldwide. The court tried to avoid the difficult free-speech issues by saying those weren’t involved in the case. But what makes the precedent so important is that it raises the core problem of who gets to regulate the Internet by ordering around search companies and social media. The US Supreme Court recently clarified that it thinks the First Amendment mostly blocks the US government from such regulation. That leaves other governments, like Canada—or Germany, which last Friday enacted legislation that forces social-media entities to remove unwanted content. A good way to think about regulation in the Internet age is to consider two radically different views about who should be doing it, if anyone. In the US, the Internet is treated as a free-speech zone

made up of “vast democratic forums”, as Justice Anthony Kennedy said in a recent opinion. The federal government and the states can’t do much to regulate what is said in that space. At the same time, the means we use to access that vast forum, such as search engines like Google or social media platforms like Facebook, are treated under US law as private entities with freespeech rights of their own. That means Google and Facebook can shape access to content as they please, subject only to market pressures. The First Amendment protects their right to do so. In sharp contrast to the US model is the approach exemplified by the Canadian decision, as well as by European laws. According to this view, governments are entitled to regulate what happens on the Internet in order to protect their citizens according to their own laws. And those laws include various bans on hate speech and enforcement of privacy laws. It’s important to remember in this context that the US is a free-speech outlier, embracing unfettered discourse in ways most countries—including free ones—consider mistaken and even wrongheaded. In the Canadian opinion, Google v. Equustek, a British Columbia technology company was trying to block another

company from reselling its stolen intellectual property via web sites on servers in unknown locations. To protect the company, a trial court ordered Google to deindex, or block, the predator’s web site worldwide. Google was willing to deindex in Canada, but it objected to becoming the means by which the Canadian court sought to enforce its order throughout the world. Among other things, Google said it was possible the victim company couldn’t have gotten the order in other countries and that deindexing might force Google to violate the laws of some other place. Invoking a hot-button term in international law, Google added the worldwide order would violate “comity”—roughly, the notion that courts in one country shouldn’t interfere with the laws of other countries. To international lawyers, a comity violation is serious business, conjuring visions of competing jurisdictions fighting legal battles across borders. In an opinion by Justice Rosalie Abella, who is widely known in international judicial circles, the Canadian court ruled 7-2 that Google had to comply. Abella pointed out that Google hadn’t actually shown that deindexing would break any laws or limit freedom of expression. If in a future case Google found itself in

such a bind, Abella said, Google could bring that up. “We have not, to date,” she commented acerbically, “accepted that freedom of expression requires the facilitation of the unlawful sale of goods”. Abella’s distinction means that Canada, at least, might balk at a worldwide injunction that blocks what other countries would count as free speech. But that won’t be true elsewhere. The proposed German law won’t work if it only limits what is searchable on German Google. Internet regulation has to be universal to work. That sets up a future of conflict between countries that want to regulate effectively within their borders and those that, like the US, want to keep information flowing freely without government intervention. The particular anomaly is that Google could be regulated within the US by foreign nations—while US law would protect it against domestic regulation. Advocates of a free Internet warn of a race to the bottom, in which the most restrictive countries block free speech everywhere. That’s conceivable but unlikely. Right now, Google and Facebook have the capacity to resist being bullied by countries that don’t respect free speech and might want to make access to their markets depend on giving up freedom elsewhere.

2nd Front Page BusinessMirror

A12 Wednesday, July 5, 2017

www.businessmirror.com.ph

Prospects of getting additional US sugar quota not good for PHL–SRA F By Jasper Emmanuel Y. Arcalas

@jearcalas

ollowing the settlement of the trade dispute between Mexico and the United States, the chief of the Sugar Regulatory Administration (SRA) said the Philippines is unlikely to see an increase in its sugar quota from Washington in the next crop year. SRA Admistrator Anna Rosario V. Paner told the BusinessMirror that any increases in the country’s allocation—currently pegged at 142,160 metric ton raw value (MTRV), or 136,201 MT commercial weight—depends solely on how

136,201 MT The annual sugar quota granted by the US to the Philippines

well Mexico could supply the sugar requirements of the US. “[It] seems [the Philippines will get the] same volume unless something happens to Mexico,” Paner said when asked about the expected quota from Washington. Should Manila get the same allocation from Washington, Paner said the Philippines could “definitely” fill the volume due to higher production in the current crop year, which would end on August 31. Also, she added Manila may not get additional allocation from Washington in the current crop year after the US did not announce a need for sugar import volume reallocation in the current fiscal year. “The chances do not look good, but anything is possible,” Paner

said. On June 30 the US Department of Agriculture (USDA) announced the fiscal year (FY) 2018 tariff-rate quotas (TRQ) for raw cane and refined sugars. The USDA established the FY 2018 TRQ for raw cane sugar at 1.117 MMT raw value, the minimum to which the US is committed under the World Trade Organization Uruguay Round Agreement on Agriculture. This was also the same volume set by the USDA in the current fiscal year ending September 30. However, the Office of the US Trade Representative has yet to determine the allocation of traditional sugar suppliers like the Philippines. “Raw cane sugar under this TRQ must be accompanied by a

certificate of quota eligibility and may enter the US until September 30, 2018,” the USDA said. The Philippines exports sugar to the US under the TRQ scheme. The TRQ allows countries to export specified quantities of a product to the US at a relatively low tariff. The US and Mexico have successfully struck a deal on June 6, settling years-long dispute over the trade of sugar between the two countries. Under the agreement, Mexico will increase the price of its raw sugar being sold at local mills by 0.05 cents per pound for raw sugar, and 2 cents per pound for refined sugar. Also, the import cap on Mexico’s refined sugar was cut drastically to

30 percent from 53 percent, while increasing its raw sugar volume to 70 percent. The agreement lowered the level of purity at which Mexican sugar can be sold as “refined sugar” in the US. Mexico accepted the modifications in their previous trade agreement on the condition that it will be granted a right of first refusal to supply 100 percent of any “additional need” for sugar as determined by the USDA after April 1 of each year. This means Mexico would always have the first right to fill any “demand for sugar in excess of the demand the USDA had predicted for the crop year”, according to the US Department of Commerce. See “Sugar quota,” A2

HOW SPAM BECAME ONE OF AMERICA’S most ICONIC BRANDS OF ALL TIME

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ROBUST GROWTH Skyscrapers tower over the metropolis and are continuously being built in Metro Manila. Construction activity by the private sector and higher public infrastructure spending are

hile you might think of Spam as a basic canned meat, it’s actually one of the greatest business success stories of all time: Since Hormel Foods Corp. launched the affordable, canned pork product in 1937, it’s sold over 8 billion cans in 44 countries around the world. On July 5 Spam celebrates its 80th anniversary. It’s fitting that this comes only a day after the birthday of the US. The product is up there with Coca-Cola, McDonald’s and Pizza Hut as one of the most distinctive American brands of all time. As a consumer behavior researcher, I believe Spam’s widespread success can be attributed to two factors: it addressed a real need, and also formed an emotional connection with its consumers, by tapping into

American ideals like ingenuity and resourcefulness.

Spam ‘hits the spot’

Spam isn’t exactly the most exciting product. The original recipe included chopped pork shoulder meat with ham, salt, water, sugar and sodium nitrite. (This remained unchanged until 2009, when Hormel added potato starch in an effort to eliminate one of the product’s less attractive features: the gelatin layer created by the cooking process.) At the time it was introduced, it was the only canned-meat product on the market that needed no refrigeration. This feature gave Spam a significant competitive advantage. Hormel also created buzz around its new product by sponsoring a name contest to promote it. See “Spam,” A2

expected to boost growth this year. According to the World Bank, Philippine GDP growth in 2017 could reach 6.8 percent, well within the 6.5-percent to 7.5-percent target of the government. NONIE REYES

SC: Duterte’s martial-law edict constitutional

Under Article VII, Section 18 of the 1987 Constitution, the President may declare martial law and suspend the writ of habeas corpus only “in case of invasion or rebellion, when public safety requires it”. The same section also grants special jurisdiction to the SC to review the “sufficiency of the factual basis” of such declaration or suspension. Solicitor General Jose C. Calida, who argued for the government during the oral arguments, welcomed the decision of the SC, saying that it “underscores the existence of a real and present rebellion” in Mindanao. “I am grateful to the magistrates of the Honorable Supreme Court for allowing President Duterte to perform his prime duty of protecting the Filipino people. As the conscience of our nation, the Supreme Court did not sit idly to watch our country get dismembered,” Calida said. He added the decision only shows the High Court is one with the President in “protecting and defending our country’s sovereignty and territorial integrity”. In seeking the dismissal of the petitions, Calida asked the SC to give Duterte the chance to perform his constitutional mandate of protecting the people. “The Constitution declares in no uncertain terms that the prime duty of the government is to protect the people,” Calida said in a memorandum submitted to the Court.

Calida noted that the magnitude and scope of the rebellion, and how it has endangered public safety in the entire Mindanao region, validated the need for the proclamation of martial law and the suspension of the privilege of the writ of habeas corpus. He claimed that 20 terrorist groups in Mindanao with similar ties with the Islamic State in Iran and Syria—apart from the Maute Grou—have already launched attacks in Basilan, Sulu, Tawi-Tawi, Zamboanga and Davao, and the main objective is to remove the whole Mindanao from its allegiance to the Philippine government. Calida also bared that there were already 43 violent attacks by the terror cells consisting mostly of improvised explosive devices, harassments and kidnappings “In faithful compliance with this duty, President Duterte saw it fit to exercise his constitutional power to declare martial law,” he added. During oral arguments from June 13 to 15, petitioners asked the SC to void the martial-law declaration and argued that there was no sufficient factual basis to justify the martial-law implementation. The petitioners branded as “inaccurate, simulated, false and hyperbolic” the facts contained in Proclamation 216, and the report submitted by the President in the Senate and House of Representatives justifying the imposition of martial law and the suspension

of the privilege of the writ of habeas corpus. They further claimed that Proclamation 216 is “flawed”, as it was imposed without consultation and recommendation from officials of the Department of National Defense or the Armed Forces of the Philippines (AFP).

No surprise

In a statement, Chief Presidential Legal Counsel Salvador S. Panelo said the decision was expected. “It is of no surprise to us that the Supreme Court upheld and validated the President’s proclamation of martial law in the entire of Mindanao. As we repeatedly said, the President complied with each and every constitutional requirement for declaring martial law.” Panelo added Duterte only did what was right in the face of an “actual rebellion in Mindanao initiated by the Maute Group”. Aside from this, Panelo said the Chief Executive, as mandated by the Constitution, submitted within 48 hours a written report to Congress explaining why he had to place the island under military rule. “This confirms our earlier statement that the filing of the petitions questioning the sufficiency of the factual basis for the President’s declaration of martial law is part of the baseless and divisive motive to spread black propaganda against the administration by the same old critics of the President,” Duterte’s head lawyer said.

“We hope that the SC ruling will finally entice these critics to unite with the President and the Filipino people toward our mission to restore peace and order in the country, especially in Mindanao,” Panelo added. On the other hand, Presidential Spokesman Ernesto C. Abella said that, with the SC ruling, all branches of the government are now united toward crushing a common enemy. “With the Supreme Court decision, the whole government now stands together as one against a common enemy.”

Creeping authoritarian rule

Lawmaker-petitioners versus the martial law on Tuesday warn of a“creeping authoritarian rule” in the guise of public safety and security, now that the SC decided to rule in favor of Duterte’s martial-law declaration. Party-list Rep. Tom Villar of Akbayan in said the war on drugs took a back seat when the Marawi incident happened, but is now back in full swing. “Now that he is cloaked with such authority, President Duterte might push it to the limit and declare a drug-induced nationwide rebellion by terror groups. Martial law becomes a hard habit to break,” he said. Villarin, citing the Philippine National Police and the AFP, said they want martial law extended for two more months. “The decision affirmed the High Court’s judicial power to review the sufficiency of the factual basis for the declaration of martial law

or the suspension of the writ of habeas corpus. However, the Court left to the President the discretion and calibration of such declaration in a given context,” he said. The Marawi incident and the martial-law declaration is now on its seventh week with no end in sight to finally neutralize the Maute terrorists, Villarin added. For his part, Liberal Party Rep. Teddy Baguilat of Ifugao said they will study the reasons cited by the SC, saying, “We will continue to vigorously oppose the martiallaw declaration and possible extension and expansion. We also maintain that martial law must be subject to the people’s scrutiny.” “Just like clockwork, the leadership has now proposed its extension. This is one draconian step to institutionalizing a dictatorship and must be opposed by democracy defenders in Congress,” Baguilat added.

Declaration, not extension

Senate President Aquilino L. Pimentel III pointed out that “extension [of martial-law imposition] is different from declaration because the time frame is different.” “Declaration may be justified, but extension is not, that’s a possibility,” the Senate leader said shortly after the SC ruling on Tuesday, adding he “had no doubts that the President validly, with factual basis, declared martial law. Nothing surprising with the SC decision. I actually expected that.”

Continued from a1

Sen. Panfilo M. Lacson Sr., likewise, noted the factual basis for the proclamation was “clear enough that there could not have been any other ruling as overwhelmingly decisive as the one rendered by the SC”. “I knew we did the right thing in supporting the martial-law proclamation in Mindanao when we debated on it in caucus and in plenary,” Lacson said. “I can only hope that none of our Senate colleagues will call the magistrates lapdogs and cowards of the administration.” Sen. Joseph Victor G. Ejercito also welcomed the SC decision upholding the declaration of martial law, saying, “Now that the two branches of government have already affirmed the President’s actions, it is time to show a united front against terrorism and lawless violence and, more important, begin the urgent work of rebuilding the communities of Marawi City.” In a separate statement, Sen. Gregorio T. Honasan II pointed out the SC ruling showed that “this is Philippine pluralistic democracy at work”. Honasan added: “Whatever the issue, Congress legislates, the Executive implements, and the Judiciary rules on questions of law and of fact. Whatever its flaws, politics and democracy in its worst forms are much better than no rules, which is anarchy. Everything else is procedural.” With Elijah Felice E. Rosales, Jovee Marie N. Dela Cruz and Butch Fernandez