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Friday, July 6, 2018 Vol. 13 No. 265

BSP, Palace frame 5.2% June inflation differently T

By Bianca Cuaresma @BcuaresmaBM & Bernadette D. Nicolas @BNicolasBM

HE Bangko Sentral ng Pilipinas (BSP) went back to the drawing board on Thursday, after local inflation hit the upper end of their expectations for June this year, prompting Central Bank Governor Nestor A. Espenilla Jr. to call it a “setback.” This, as the President’s spokesman said it was not surprising, because there’s “money going around” as a result of the extra cash in pocket unleashed by the tax-reform law, and the multibillion-peso infrastructure program for which the government spent on

average P56 billion monthly in the first five months. The Philippine Statistics Authority (PSA) on Thursday had reported local inflation to have shot up to 5.2 percent in June this year. The surge was attributed to the

higher prices of heavily weighted food and nonalcoholic beverages during the month, compared to their prices in the same month last year. Prices of alcoholic beverages and tobacco also climbed sharply, due largely to the effect of excise

4.9% The forecast inflation for June, as made by the finance department earlier this week

taxes on these particular products. A further adjustment in the increments of taxes on tobacco products has been implemented starting this month. The 5.2-percent inflation in June brought the average growth of consumer prices for the first half of the year to 4.3 percent—a third of a percentage point off of the government’s 2-percent to 4percent target range. See “BSP,” A2

Trash pileup costs NCR ₧1.84B in tipping fees

See “Trash pileup,” A12

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‘HIGHER COMMODITY PRICES TO HOUND US IN NEXT 2-3 QUARTERS’ By Cai U. Ordinario @cuo_bm

ILIPINO consumers should brace for higher commodity prices in the next two or three quarters, according to local economists. However, the country’s socioeconomic secretary assured the public on Thursday that inflation could very likely plateau next quarter on expectations of declining oil prices and a rice-tariff system already in place. Ateneo Center for Economic Research and Development Director Alvin P. Ang said inflation will likely average 4.8 percent this year before slowing to around 3 percent to 4 percent next year. Ang said inflation is expected to peak this month and in August when inflation is expected to breach 5.2 percent. He said inflation will start slowing in around September due to base effects. “I think inflation will continue to increase, maybe until September when inflation will see a minimal slowdown,” Ang told the BusinessMirror. “This will be fueled by food and education costs.” University of Asia and the Pacific School of Economics Dean Cid

I think inflation hasn’t peaked yet because external events like the looming trade war and unpredictable changes in world oil prices continue to threaten the stability of the domestic environment.” —Terosa Terosa agreed inflation will continue to increase, and said this may compel monetary authorities to increase interest rates. Terosa said this is especially the case if inflation will continue to breach 5 percent in the coming months. “I think inflation hasn’t peaked yet because external events like the looming trade war and unpredictable changes in world oil prices continue to threaten the stability of the domestic environment,” Terosa said. “The BSP [Bangko Sentral ng See “Commodity prices,” A2

As tariff hour nears, China digs in for possibly protracted trade war with US

HE pileup of trash in Metro Manila is costing taxpayers some P1.84 billion in tipping fees annually, according to an expert from the Asian Development Bank (ADB). I n a n A si a n De ve lopme nt Blog, ADB Senior Adviser to the Vice President for Knowledge Management and Sustainable Development Sonia Chand Sandhu said Metro Manila accounts for a fourth of the countr y’s total waste. The country’s daily waste generation increased to 40,087.45 tons in 2016, from 37,427.46 tons in 2012. This is approximately 14.672 million tons per year.

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Workers carry steel bars on their shoulders at a construction site in Pasay City. The labor department said on Thursday—after the statistical body reported a higher-than-expected 5.2-percent inflation rate in June—that it will provide nonwage assistance to workers who will be impacted by higher prices. ALYSA SALEN

PESO exchange rates n US 53.3430

RIDAY, July 6, is the date when the world’s two largest economies are due to slide deeper into a trade conflict that’s roiled markets and cast a shadow over the global growth outlook. In Beijing policy-makers are digging in for what could be a protracted fight—one they say they won’t be the aggressor in. If the United States begins imposing additional steep tariffs on Chinese imports as of Friday, then Beijing is poised to respond in kind. With further tit-for-tat levies already threatened, this week could mark the start of a new and dangerous phase. The US imposition of tariffs on $34

billion of China’s exports will not only hurt China, but the US itself and the rest of the world, Gao Feng, China’s Commerce Ministry spokesman, said at a regular press conference in Beijing on Thursday. China’s retaliatory tariffs will become effective “ immediately” after the US acts, according to the customs authority. Here’s a rundown of the key facts about China’s position in the conflict:

What goods are to be targeted? On June 15 President Donald J. Trump said the US would begin charging additional duties of 25 percent on $50 billion worth of Chinese imports in See “Tariff,” A2

n japan 0.4830 n UK 70.5995 n HK 6.8016 n CHINA 8.0420 n singapore 39.0877 n australia 39.3671 n EU 62.1873 n SAUDI arabia 14.2236

Source: BSP (5 July 2018 )

News

BusinessMirror

A2 Friday, July 6, 2018

MMDA defers to Aug. 1 ban on provincial buses on Edsa

HE Metropolitan Manila Development Authority (MMDA) has pushed to August 1 the ban on provincial buses on certain hours along Edsa, saying it is still fine-tuning the regulation ahead of its implementation.

MMDA General Manager Jojo Garcia said the schedule of the regulation has also been changed: both northbound and southbound provincial buses are banned from traversing along Edsa from Pasay City until Cubao in Quezon City, from 7 to 10 a.m. and from 6 to 9 p.m., or the usual rush hours on weekdays. “The changes were agreed [on] during an emergency meeting with provincial bus operators and other stakeholders recently,”

BSP. . .

Continued from A1

It is also higher than the previous month’s 4.6 percent and more than twofold of June 2017’s 2.5-percent inflation print. At this rate, the country needs to have an average monthly inflation of 3.7 percent in the next half of 2018 to hang on to the government’s target range—a scenario that is highly unlikely, according to the Central Bank.

Higher than expected

The June inflation breached both the Department of Finance’s (DOF) and the BSP’s forecasts for the month. “The higher-than-expected June inflation outcome is a setback,” Central Bank Governor Nestor A. Espenilla Jr. told reporters in a statement following the PSA’s inflation announcement on Thursday morning. Malacañang, however, said the inflation rate hitting 5.2 percent year-on-year in June is “not something that we should be alarmed” about. Presidential Spokesman Harry L. Roque Jr. said that the June inflation is “higher than usual” but he explained that the inflation is bound to happen if there’s money going around. “There’s money from taxes that’s paid by those who are earning 250,000. There’s money because of the economic activity spurred by the ‘Build, Build, Build.’ But it is not something to worry about. It’s within historical amounts,” he said, referring to the government’s massive infrastructure program. Earlier this week, the finance department forecast inflation to have hit 4.9 percent in June. The BSP, on the other hand, said June inflation may have hit somewhere between 4.3 percent and 5.1 percent. The sudden strong acceleration of inflation during the month came in contrast to the mood set by the BSP in their June 20 meeting, where inflation forecasts were scaled back to account for the tamer-thanexpected May inflation. In particular, for 2018, the inflation was lowered to 4.5 percent, from the earlier 4.6-percent forecast. The projection was also adjusted accordingly for 2019, with next year’s inflation expected to hit 3.3 percent from the earlier 3.4-percent projection.

“We expect that the regulation would speed up travel of private motorists and passenger buses using the yellow lane along Edsa during peak hours.”—Garcia

said Garcia in a press briefing on Wednesday afternoon. The MMDA earlier announced the ban would start on July 15, with the schedule of prohibition

A review will be in place

These forecasts, however, are now subject to reviews and possible revisions following the development in the June inflation print. “We will review and update our situational assessment and forecast inflation path. This will shape the strength and timing of our next monetary policy response to firmly anchor inflation expectations,” Espenilla said in his statement. In their last monetary policy meeting, the BSP hiked its rates anew in an effort to lock down rising inflationary pressures in the policy horizon. The June 20 monetary policy hike of 25 basis points was the second in a row for this year. The Monetary Board argued that the elevated inflation expectations for 2018 and the risks of possible second-round effects from ongoing price pressures “argued for followthrough monetary policy action.” Espenilla also left the door open for more rate hikes in the future, saying the BSP is “prepared to take further policy action as needed to achieve its price and financial stability objectives.”

Calls for more hikes

ING Bank Manila economist Joey Cuyegkeng said the BSP would need to pull another hike as soon as possible despite the already backto-back monetary policy hike already made in the last two meetings. “The high inflation point for June would likely require further monetary policy response as early as the August meeting. Real policy rate is deeper in the red, indicating that a more aggressive economic policy response would be needed,” Cuyegkeng said. IHS Markit economist Bernard Aw also earlier said the current rise of consumer prices may translate to second-round effects, particularly in the manufacturing sector, thus strengthening the case for another rate hike for the year. “The depreciation of the peso, increased taxes, supply shortages, higher global commodity prices, especially for fuel, all contributed to inflation,” Aw said. “As a result, factory gate price hikes remained sharp, which could feed through to consumer inflation in coming months, thereby adding to expectations for further rate hikes,” he added. The BSP reiterated its stance on

Commodity prices. . . Pilipinas] should consider raising interest rates if inflation will continue to be above 5 percent in the next quarter,” he added.

‘Judgment call’ Meanwhile, Action for Economic Reforms (AER) Coordinator Filomeno S. Sta. Ana III said inflation may continue to register a year on year increase but the rate may be on the downtrend on a monthly basis. Sta. Ana said supply side issues are usually not addressed by hiking interest rates. It will be a “judgment call” on the part of the BSP on whether they will raise interest rates anew.

Continued from A1

“At the moment, given the slowing down of the rate, technically, it will shun a higher rate unless external factors like foreign interest rates go up again. But there is also a political temptation, in light of expectations that can become self-fulfilling,” Sta. Ana said. Socioeconomic Planning Secretary Ernesto M. Pernia said the “slip in timing” in the adjustment of the country ’s interest rates may have prevented the BSP from completely stemming inflation. Neda Undersecretary for National Planning and Policy Rosemarie G. Edillon said external factors have affected the impact of policy rate setting, such

set at 5 to 10 a.m., and 4 to 9 p.m. As part of its information drive, a dry run for the enforcement of the regulation will also be conducted on July 24, a day after President Duterte’s third State of the Nation Address (Sona). Garcia also clarified that only those provincial buses traversing Edsa are exempted from the United Vehicular Volume Reduction Program or number-coding scheme as an incentive. “Provincial buses plying C-5 Road, the streets of Manila and elsewhere are not covered by the number-coding exemption,” said Garcia. Provincial buses coming from the South that do not have terminals in Pasay City are advised to use the agency-operated Southwest Interim Provincial Terminal (SWIPT). Garcia said traffic experts predict a faster turnaround of provincial buses once the regulation is enforced during the morning and evening rush hours.

“We expect that the regulation would speed up travel of private motorists and passenger buses using the yellow lane along Edsa during peak hours,” said Garcia. The MMDA official said they are also coordinating with the Land Transportation Franchising and Regulatory Board on the reduction of passengers’ fare. Garcia said the regulation will be effective until the three bus terminals deemed crucial to reducing traffic are operational. These are: the bus terminal in Valenzuela set to be operational in August; Paranaque Integrated Terminal Exchange set to open on September; and the bus terminal in Santa Rosa, Laguna, expected to open in December. The regulation was approved by the Metro Manila Council (MMC) to ease traffic congestion in the metropolis caused by simultaneous road projects in the second half of 2018. Claudeth Mocon-Ciriaco

Thursday, saying it will continue to enact appropriate measures to pull inflation back to the ground. “The BSP reaffirms its strong commitment to ensure that inflation returns to within the 2 percent-to-4 percent target range as soon as possible,” Espenilla said. The next monetary policy meeting of the BSP is on August 9. This will be the Monetary Board’s fifth monetary policy setting meeting for the year.

partly on the implementation of the first package of the Tax Reform for Acceleration and Inclusion (TRAIN) law, in which new excise taxes were slapped on oil, cigarettes, sugary drinks and vehicles, among other goods to compensate for the restructured personal-income tax regime. Taxpayers with an income of P250,000 and below became tax-exempt starting this year. In a statement, research group IBON said the runaway inflation is also due to the peso depreciation and rising global oil prices combined with the TRAIN law. “Among these, TRAIN’s higher consumption taxes are directly within the government’s control and it can immediately arrest the tax-driven portion of inflation if it chooses to do so,” the group said. It also noted that the June inflation rate may appear to be the fastest in only five years because available estimates using the current base are only until 2013. IBON noted, however, “that inflation today would already be the fastest in nearly a decade, or since March 2009, using inflation data according to the previous base year [2006=100] as an approximation.” IBON Executive Director Sonny Africa said in a statement the runaway inflation hits poor Filipinos the hardest. “The cumulative impact of high inflation is that the poor will eat less, walk more, forego spending on medicines and treatment, scrimp on their utilities, and have nothing for emergencies.”

Inflation drivers

Under the massive infrastructure program, 75 infrastructure projects are expected to be rolled out with a total budget of around P8 trillion to P9 trillion to usher in what the Duterte administration calls the “golden age of infrastructure.” Secretary Roque, meanwhile, also noted that the increase in the price of petroleum led to the P1 increase in the jeepney fare. A provisional fare increase of P1 for the first 4 kilometers for public-utility jeepneys plying National Capital Region, Region 3 and Region 4 routes was approved by the Land Transportation Franchising and Regulatory Board on Wednesday. LTFRB Chairman Martin Delgra said the LTFRB consulted with the National Economic and Development Authority and considered the rise of oil prices in approving the order. Roque assured the public, however, that if the price of petroleum goes down, there will be corresponding adjustments as well. He added that the importation of Russian diesel is ongoing, but noted the problem is that the country doesn’t have enough depots. “But I think the government is encouraging the private sector to build depots now, because we are really focusing on energy security,” he said. On Monday the interagency Development Budget Coordinating Council (DBCC) raised its inflation forecast for 2018. They are expecting inflation to be in the range of 4 to 4.5 percent. This forecast is higher than their previous forecast of 2 percent to 4 percent. For 2019 to 2022, DBCC maintained their forecast at 2 to 4 percent. Budget Secretary Benjamin E. Diokno also said on Monday that they expect inflation to taper off in the second half of the year and oil prices to stabilize. The rising costs of goods was blamed as the recent policy actions of the Federal Reserve and the lag in the response of the market to the recent policy rate adjustments of BSP. “There may have been a little slip in timing of the increasing policy rates,” Pernia said. “Again that [raising interest rates] will be a decision to be made by the BSP.” However, Pernia assured the public on Thursday that there is a possibility that inflation could plateau next quarter due to expectations that oil prices will decrease and the country would already have a rice tariff in place. Oil prices have been cited as one of the main contributors to the increase in inflation while the country’s quantitative restriction (QR) on rice has prevented the country from getting more access to

Moderate the impact

He noted that in the short term, the government can suspend TRAIN to moderate inflation and provide relief to millions of poor Filipinos and that it can work toward eventually reforming the tax-reform package to become genuinely progressive rather than regressive and anti-poor. As for the longer term, Africa said the government can manage the impact of rising global oil prices through responsible regulation of the oil industry. To arrest the peso’s decline, the options includes identifying and overcoming: the long-standing agricultural and industrial backwardness at the root of the country’s chronic trade deficit; the over-reliance on overseas remittances for foreign exchange; and the over-reliance on foreign debt and investment. cheaper rice from abroad. Pernia said higher oil production will be coming from Russia to make up with the shortfall experienced in the past few months. Due to the supply, oil prices have increased to around $70 per barrel in the past months. In terms of the QR, Pernia said the bill to amend the RA 8178 or the Tarrification Act is under way since the President has deemed the passage of the bill as urgent. “We expect inflation to peak in the third quarter and taper off by October; government needs to implement necessary measures, both short term and long term, to address the impact of inflation,”Pernia said.

Neda still running the numbers Edillon said these may be sufficient

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Tariff. . .

Continued from A1

response to what he says is theft of American intellectual property. That’s split into two rounds—$34 billion now and $16 billion later. China responded with a statement saying it would fight back with “equal scale, equal intensity.” Beijing is targeting soybeans, corn, wheat, rice, sorghum, beef, pork, poultry, fish, diary products, nuts and vegetables, and autos in its first round of counter measures.

When will these actually start being levied? The first wave on US tariffs on $34 billion of Chinese exports will take effect on July 6, according to a statement from the US Trade Representative, which didn’t specify a time. China’s response of additional tariffs on US goods will become effective “immediately” thereafter. If the US tariffs come in at midnight Friday US time, that’s midday Friday in Beijing.

Are markets ready? Chinese stocks have taken a beating in recent weeks, entering a bear market, as concerns about the trade war have mingled with worries about how an ongoing debt-control campaign will feed through into the outlook for economic growth. Stocks fluctuated Thursday, as investors may be waiting to see which way the tariffs are actually implemented. “Any market rebound before the July 6 deadline would be just temporary. All eyes are on the Trump administration’s move to impose the 25-percent additional tariff on Friday and what’s next after that,” said Zhang Gang, Central China Securities Holdings strategist in Shanghai. “The trade war is a constant overhang for the markets and I don’t see it being removed any time soon.” The yuan slipped on Thursday despite the strongest daily reference rate since October. China’s currency suffered its worst quarter since 1994

Visitor arrivals. . .

in the three months through June, raising questions over whether the government was deliberately letting it slide as a tactic in the trade war.

What can the real-world impact be? The tariffs are already having an effect. As an example, Chinese companies are reselling US soybeans, and Chinese companies are expected to cancel most of the remaining soybeans they have committed to buy from the US in the year ending August 31, once the extra tariffs take effect.

In China, what will the economic impact be? It depends on what happens. In the scenario where the US and China just stick to this round of tariffs—$50 billion of imports—and go no further, then the drag on China’s economy would be 0.2 percentage point of growth in 2019, according to Bloomberg Economics’ calculations. If things escalate, then the hit will be bigger, cutting as much as half a percentage point from growth. China’s economy grew by 6.9 percent in 2017 and the government has set a target of 6.5 percent for the current year. Domestically, it’s China’s rich coastal provinces who have the biggest reliance on exports. Guangdong, Shanghai, Zhejiang, Jiangsu and Fujian all have export-to-GDP ratios higher than the national average of 18.5 percent, according to Bloomberg Economics. In the meantime, those provinces have lower debt-to-GDP ratios, stronger growth and more dynamic private sectors, which can help cushion the blow. “The tail risk of a Sino-US trade war is getting fatter,” said Chi Lo, greater China senior economist at BNP Paribas Asset Management in Hong Kong. “The two sides may misjudge each other’s intentions when patriotism takes over rationality, and push themselves into an escalating series of attacks and retaliation.”

Bloomberg News

Continued from A12

track,” he stressed in an interview with this paper. President Duterte ordered Boracay closed for six months starting April 26, ostensibly to make way for government’s rehabilitation work to address easement, sewerage, traffic and environmental issues. The popular island resort destination received over 1 million foreign visitors in 2017 alone. During the question-and-answer forum, Bengzon told the HSMA to “form a committee” to prepare for the reopening of Boracay, but was noncommittal as to when the island would actually open. Among HSMA members are sales and marketing officials of major resorts in Boracay. Data from the DOT showed that South Korea continued to provide the largest bulk of tourists in the Philippines from January to May 2018, at a 22.2-percent share equivalent to 705,548. Arrivals, however, only grew by some 2.8 percent. Hot on South Korea’s heels was China, which accounted for 17.6 percent of total market share. The market, however, grew by an astounding 43.8 percent to 559,289 arrivals. Tourists from the United States increased by

8.05 percent to 463,273, and represented a market share of some 14.6 percent. Other growth markets were Japan, with arrivals rising by some 8 percent to 275,943 (with an 8.7-percent market share); followed by Australia, up 6.9 percent to 120,598 (market share of 3.8 percent); Canada, up 12 percent to 109,133 (market share of 3.43 percent); the United Kingdom, up 8.94 percent to 89,782 (market share of 2.83 percent); Singapore, up 8 percent to 75,862 (market share, 2.4 percent); and Malaysia, up 0.76 percent to 61,040 (market share, 1.92 percent). Taiwan, which was ranked seventh in the top 10 list of tourism markets of the Philippines and accounted for some 3.2 percent of market share, fell by some 6.7 percent to 101,372 arrivals. The Taiwan Public Opinion Foundation, in a survey released on June 17, ranked the Philippines (52.9 percent of some 1,000 respondents) as the second “most hated country” after North Korea (70.9 percent). It also ranked the Philippines ahead of China (43.9 percent), South Korea (33.8 percent) and Russia (29.7 percent).

to mitigate possible price increases brought about by higher jeepney fares and, if granted, the increase in minimum wage. Edillon said, however, that the Neda is still in the process of running the numbers with regard to the increase in jeepney fares to P9 from P8 for the first 4 kilometers as the Land Transportation Franchising and Regulatory Board (LTFRB) only submitted its request on Wednesday. As for the minimum wage, Edillon said plans to increase it are still under discussion by various regional wage boards and will still undergo consultations. “This has been factored in our computations, with respect to the wages, we do it on a per-region basis and all these are being factored in including

any developments in the region,” Edillon said. In June inflation increased to 5.2 percent, the highest under the 2012 series of the Consumer Price Index (CPI). The main causes were higher food and fuel prices, according to the Neda. The food alone index posted a growth of 5.8 percent in June 2018. It was posted at 5.5 percent in the previous month and 3.1 percent in June 2017. Year-on-year inflation in Metro Manila or the National Capital Region (NCR) accelerated by 5.8 percent in June 2018. It was pegged at 4.9 percent in the previous month and 3.1 percent in June 2017. In Areas Outside NCR, inflation reached 5.1 percent in June 2018. In the previous month, inflation settled to 4.6 percent and in June 2017, 2.3 percent.

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The Nation BusinessMirror

Proposed QC ordinance provides personal, accident insurance coverage for tricycle drivers, passengers By Jonathan L. Mayuga @jonlmayuga

he Quezon City Council is set to pass a landmark ordinance providing personal and accident insurance coverage for tricycle drivers and passengers, Quezon City Vice Mayor Joy Belmonte said in news statement issued on Thursday. “I think…the ordinance will pass unanimously and that there will be no opposition to such ordinance,” Belmonte, the presiding officer of the QC Council added. The landmark local legislation comes after the QC Council passed earlier this year the first ever Road Safety Ordinance in the country. The said law will serve as an appendix to the insurance coverage ordinance. The ordinance—the first of its kind in the country—will implement a Personal Accident Insurance Coverage Program for tricycle passengers and drivers. The proposal is set to be discussed in a public hearing today (Friday). “When we did the math, we computed that if we sponsor the insurance in the beginning, it will only cost the city about P20 million,” Belmonte said. Speaking to tricycle drivers, Belmonte said they need not worry since the local government will shoulder part of the expenses for the insurance policy in the first year. She said initially, the QC government will shoulder the cost so as not to burden the tricycle drivers during its first year of implementation. The ordinance allocates a seed

fund amounting to P20 million for this purpose. The Quezon City Tricycle Franchising Board will be the lead agency for the pioneering insurance program. Failure to avail themselves of the personal accident insurance for drivers and passengers may result in the cancellation of existing tricycle franchises. Tricycle operators will have a grace period of one year after the passage of the ordinance to comply with the new regulation. Lawyers for Commuters’ Safety and Protection (LCSP) founder Ariel Inton expressed his gratitude for the muchawaited ordinance. Inton expressed his thanks to the Quezon City Council and the Office of the Vice Mayor for its consideration of the personal accident insurance for tricycle drivers and passengers. “Hundreds of thousands take tricycle rides every day, but the tricycle is the only public-utility vehicle wherein passengers and the drivers are not insured precisely because no local government unit has ever come out with an ordinance. But now Quezon City will not only mandate it but will spend for it in the beginning,” Inton added. The former LTFRB board member also mentioned that other LGU’s should replicate the ordinance. “We have been talking about safety, but have we ever thought of giving them really that safety concern, that in case something bad happens, will the passenger and driver get something?” he asked.

Editor: Vittorio V. Vitug • Friday, July 6, 2018 A3

Vis-Min power interconnection project to hike electricity transmission rates in 2020–NGCP

By Lenie Lectura

@llectura

he P52-billion Mindanao-Visayas Interconnection Project (MVIP) of the National Grid Corp. of the Philippines (NGCP) may result in an upward adjustment in transmission rates.

“Depending on the regulatory reset by 2020, consumers might also notice the immediate effects of the project on their electricity bills, as its completion will result in a price increase of P0.03 per kilowatt-hour,” the NGCP said in a statement issued on Thursday. The grid operator clarified, however, that the amount is still subject to regulatory approval. While the final cost of the project has yet to be determined by the Energy Regulatory Commission (ERC), the NGCP has filed the estimated cost of the project to be at P52 billion. “To date, the biggest part of the MVIP is right-of-way access and acquisition, which we expect to secure by the end of December 2018. Therefore, as early as now, we are reaching out to the public, especially all national and local government units, to collaborate with us for the successful completion of the MVIP to meet our goal of One Grid 2020,” the NGCP said. The MVIP is NGCP’s latest project that aims to connect the Mindanao grid to the Visayas grid, which will ultimately lead to a single, unified national grid by the time

of its completion in 2020. “With a unified national grid, power transmission services in the country will be more reliable, as there will be less power interruptions nationwide due to the sharing of local energ y resources. Reliable electricity transmission, in turn, could

Depending on the regulatory reset by 2020, consumers might also notice the immediate effects of the project on their electricity bills, as its completion will result in a price increase of P0.03 per kilowatt-hour.”—NGCP

help boost investments, infrastructure development and commerce in the country,” NGCP said. After five years of careful research and planning, the ERC has authorized the NGCP to start building the MVIP in 2017, with the project set to be completed by December 2020. Currently, the country harnesses most of its electricity from the interconnected Luzon and Visayas grids, which was linked in 1998 and uses a high-voltage direct current system with a 440-megawatt capacity. Once the MVIP is complete by 2020, it will be using an HVDC system with a 450-MW initial capacity. The MVIP will employ 184 circuit kilometers of submarine cables, plus 526 circuit kilometers of overhead wires, to connect Dapitan, Zamboanga del Norte, to Santander, Cebu, using HVDC submarine cables, which will transmit energy efficiently between the Visayas and Mindanao with minimal loss. The completion of the MVIP will result in a more stable and secure supply of power in the country, and will maximize the use of available local energy resources. “This will support the national government’s vision to interconnect the major power grids, which would then help improve the overall power-supply security of the country through the sharing of reserves,” the NGCP said. “This will also support the overall operations of the Philippine electricity market by allowing the optimization of all available energy sources, including the additional generation capacities that will be implemented in the Visayas and Mindanao,” it added.

A4 Friday, July 6, 2018 • Editor: Vittorio V. Vitug

Economy BusinessMirror

Neda: PHL to sustain double-digit output growth in next few months

By Cai U. Ordinario

@cuo_bm

he Duterte administration’s “Build, Build, Build” (BBB) program and efforts to boost food and petroleum production will allow the Philippines to sustain a double-digit growth in manufacturing output in the next few months, according to the National Economic and Development Authority (Neda). Based on the latest Monthly Integrated Survey of Selected Industries (Missi), the Philippine Statistics Authority (PSA) said the Volume of Production Index (VoPI) grew 19.8 percent in May 2018, from a contraction of 0.6 percent in May 2017. Data showed that of the 14 major sectors that exhibited increases in VoPI, seven sectors registered two-digit growth led by printing with a growth of 117.8 percent; 33.3-percent growth in petroleum products; and 32.5 percent in food manufacturing. “Higher demand due to school enrollment and harvest periods, expansion of businesses and new product lines, and ongoing rollout of public infrastructure projects

19.8%

VoPI growth in May 2018, from a contraction of 0.6 percent in May 2017. Of 14 major sectors that exhibited increases in VoPI, seven sectors registered two-digit growth led by printing with a growth of 117.8 percent; 33.3percent growth in petroleum products; and 32.5 percent in food manufacturing

are anticipated to further increase manufacturing production,” Socioeconomic Planning Secretary Ernesto M. Pernia said. Neda Undersecretary for National Planning and Policy Rosemarie G. Edillon, for her part, noted that food manufacturing has been “very robust” in the past few months. In the medium term, she said, the government aims to establish more backward linkages of the food manufactures in the agriculture sector. Pernia added that the manufacturing sector will also benefit from the recently ratified free-trade agreement (FTA) between the Philippines and the European Free Trade Association (Efta). Upon the FTA’s entry into force, the Efta member-states will accord duty-free market access to all industrial and fishery products from the Philippines. “Despite the optimism, the government must not waiver in addressing factors that may hamper growth, including rising trade tensions and higher interest rates. Enhancing the production capacity of enterprises and addressing infrastructure gaps to decrease production costs will be important,” Pernia said. Meanwhile, the recent increase in the manufacture of printed materials was linked to the recent barangay elections, which is common

on election years. Edillon added that due to the opening of classes, at least for elementary and high-school students, the increase in printing may have been due to the printing of education materials, such as text books. Apart from the VoPI, the country’s average capacity utilization rate increased to 84.2 percent in May 2018, the same rate in April, but higher than the 83.8 percent posted in May 2017. Pernia said that, while this rate is higher than usual, it still leaves room for expansion and would not lead to any overheating of the economy. “[This rate] suggests there’s still headroom for expansion. So its not a threat to overheating, that’s for sure. I think the highest was 89percent capacity utilization. So its quite high, but not yet hitting the ceiling so we should be okay,” Pernia said. The PSA said the response rate for May 2018 was registered at 79.4 percent. T he Missi prov ides timely flash indicators that monitor the performance of growth-oriented industries in the manufacturing sector. The earliest version of the Missi is the SKEM or Survey of Key Enterprises in Manufacturing, which was created in 1981 as a project of the Neda.

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After commodity price hike, consumers told to brace for electricity-rate increase

he overall increase in prices of key consumer items recorded in June would likely push electricity rates higher, according to some power firms. “I believe that much of the inflation is fuel related. So, if this is true, then electricity prices will eventually go up,”said Aboitiz Power Corp. President Antonio Moraza in a text message. Inflation in June was recorded at 5.2 percent, 0.6 percent percentage points higher than the previous month which stood at 4.6 percent. The last time inflation hit 5.2 percent was in October 2011. The June inflation figure exceeded expectations. Energy Development Corp. Vice President for Finance Erwin Avante said via text message that higher inflation rate will have a higher effect on power rates. “Some power contracts, as I understand it, have provisions linked to inflation.”

Semirara Mining and Power Corp., Chief Executive Officer Isidro Consunji also shared the same view, saying “increased energy prices caused a big fraction of the inflation.” Consumer group Laban Konsyumer Inc. (LKI), meanwhile, urged the Department of Energy (DOE) to promote the use of indigenous energy resources. “The DOE should revive the well-tested program of using more indigenous energy resources,” the group said. “Find more oil, natural gas and geothermal energy.” The LKI also called for a review the renewable energy law to make RE cheaper than what it is at the moment, adding the The feed-in-tariff allowance system must be repealed. LKI had been against the RE law, according to LKI President and former Trade Undersecretary Victor Dimagiba via e-mail. Lenie Lectura

Vehicle plate rollout Special Assistant to the President Secretary Lawrence

Christopher Go (center) holds a newly manufactured vehicle plate during a nationwide ceremonial rollout with transport officials. With Go are Department of Transportation Secretary Arthur P. Tugade and Land Transportation Office Assistant Secretary Edgar C. Galvante. Nonoy Lacza

‘Wake up Manila’ fair offers 1K jobs on July 6 and 7 By Roderick L. Abad

Contributor

@rodrik_28

ROUND 1,000 job orders are up for grabs in an employment conclave called “Wake Up Manila,” on July 6 and 7, at the SMX Convention Center in the Mall of Asia Complex, Pasay City. According to Springboard Philippines Chief Operating Officer Tristan Ong, about 30 companies will offer participants entry level to

supervisory positions in customer service, banking, construction, sales, outsourcing, education, advertising, fast moving consumer goods, and hospitality, among others. The recruitment agency expects at least 2,000 up to 4,000 applicants joining the event, especially newly graduates who are now on the lookout for work. “In our jobs fair, we try, as much as possible, to bring [employment opportunities] back here in the Phil-

ippines, [while] echoing the government’s sentiment to help our countrymen. There are many opportunities here. Let’s keep them, so Filipinos have a reason to stay,” he told the BusinessMirror in an interview. Wake Up Manila is the pioneering initiative organized by Springboard Philippines that promotes actual interaction between employer and job seekers. The human connection, Ong noted, is commonly lost in today’s highly

digitized recruitment ecosystem. He recalled that in the past, job applicants used to be very persistent in finding employment, going door-to-door to companies to inquire for vacant positions or submit their credentials. But with the advent of technology and the emergence of the Internet, most of the potential candidates now resort to online jobs portal. Proof of which is the continuous growth of online recruitment in

the country. Per the Monster Employment Index in the Philippines, hiring-on-the-Web grew by 14 percent in March of 2018, as compared to the same period last year. Among industry sectors, retail exhibited the steepest annual growth. Human resource and administration professionals recorded the highest growth in demand year-on-year. Given the positive trend on local online recruitment, Ong said that the face-to-face or personal way of

getting to know the job hunter and the employer is now rare. Springboard Philippines, though this two-day event, aims to help fill the gap as it provides value in that human connection. Apart from recruitment, the top executive bared that there will also be talks by invited speakers from both the public and private sectors, as well as engaging activities and entertainment during the convention.

Devanadera orders review of ERC rules to strengthen power regulation By Lenie Lectura

@llectura

HE chairman of the Energy Regulatory Commission (ERC) has called for a review of its rules in a bid to strengthen electricity regulation. “We are acting on the electric power industry’spleatostrengthentheERC. Werecognized that we have entered a new regime where consumer benefit consciousness has to be given utmost consideration,” ERC Chairman Agnes VST Devanadera said on Thursday. “In this connection, I have directed the review of all ERC Rules with direct impact on electricity consumers and improve, thereon, if warranted,” she added. Devanadera’s order may have been prompted by recent developments that have affected the ERC. In two separate previous decisions, the Office of the Ombudsman found ERC commissioners administratively liable for failing to fulfill their duty to protect the interests of the consumers. They were recently found guilty for simple misconduct for tolerating Manila Electric Co.’s (Meralco) alleged misuse of bill deposits. In December last year, the Ombudsman ordered a one-year suspension of ERC commissioners Josefina Patricia Asirit, Alfredo Non, Geronimo Sta. Ana and Gloria Yap-Taruc for allegedly giving Meralco an undue advantage when it extended the submission of its power-supply agreements applications. The CA, in February this year, issued a 60-day temporary restraining order stop-

ping the suspension of four commissioners. The TRO lapsed, but the ERC was able to secure in April from the appellate court a preliminary injunction against the one-year suspension order. Devanadera also vowed to step up the regulation of the electric-power industry as the agency formally launched its shortterm program for efficiency dubbed as “ERC’s 5Es:” (1) ERC on Wheels; (2) ERC Academy; (3) eWISE (ERC Web Portal for Interactive and Systematic Exchange); (4) ERC on Emerging Technologies; and (5) ERC Enabling Electrification. In a related development, Devanadera lauded energy groups, distribution utilities, electric-power industry stakeholders, and other government agencies, particularly the Philippine Electric Plant Owners Association, Philippine Independent Power Producers Association, National Electrification Administration, National Power Corp., National Grid Corp. of the Philippines, Department of Budget and Management and the Department of Energy, that supported the call to strengthen, rather than abolish the ERC. She said the energy groups expressed their views and concerns on streamlining vis-à-vis abolishing the ERC before a Congressional meeting on Monday. “We will fast-track the review and, if necessary, amend the relevant ERC Rules to ensure that the consumers’ welfare are promoted and protected. As we strengthen the ERC’s processes, we will also make sure that our policies are robust and legally defensible,” Devanadera said.

Agriculture/ Commodities www.businessmirror.com.ph

BusinessMirror

Editor: Jennifer A. Ng • Friday, July 6, 2018

Manila vows to fill US sugar quota By Jasper Emmanuel Y. Arcalas

@jearcalas

espite the projected decline in local sugar production for the current crop year, Manila vowed to fill the sugar quota allocated by the United States to the Philippines for fiscal year (FY) 2019 under a preferential trade scheme.

Sugar Regulatory Administration (SRA) chief Hermenigildo R. Serafica made the pronouncement after the US Department of Agriculture (USDA) announced on July 2 that its tariff-rate quota (TRQ ) on raw cane sugar for FY 2019 is 1.117 million metric tons raw value (MTRV). The volume is the minimum to which the US is committed under the World Trade Organization’s Uruguay Round Agreement on Agriculture. T his was a lso the same volume set by the USDA for the cur rent fisca l year ending September 30. FY 2019 would start on October 1 and wou ld end on

September 30 next year. Countries authorized by the US to export sugar under the TRQ scheme may do so at lower duties. The US Trade Representative is yet to allocate the volume among countries allowed to ship sugar under the TRQ scheme. Philippine Sugar Millers Association (PSMA) Executive Director Francisco D. Varua said, however, that the Philippines is always assured of a 13.5-percent share of the total TRQ. This means that Manila would receive an allocation of 142,160 MT raw value (MTRV), or about 136,201 MT in cane weight (MTCW) for FY 2019.

Varua agreed with Serafica that the Philippines will be able to deliver its sugar quota to the US. Since FY 2015-2016, Manila has been able to fill up the sugar quota allocated by Washington. In FY 2014-2015, Manila was able to export only half of its allocation to the US as El Niño slashed Philippine sugarcane output. As for its quota for the current fiscal year, Serafica said Manila has shipped three boatloads of raw sugar amounting to 85,086.77 MT. Serafica said the fourth vessel that would carry the next round of the country’s outbound shipment to the US would arrive by the third week of July. In June the SRA issued Sugar Order 12 which authorized the verification of the production of “A” sugar bound for the US market from the previous two crop years. Data obtained by the BusinessMirror showed that as of June 29, which was the deadline for verification, the SRA was able to validate 155,848.29 MT of “A” sugar. Given this figure, Serafica said, Manila will be able to ship its entire sugar allocation for FY 2018 and will even have a carry-over volume for the next fiscal year.

Government partners with Irri to find other uses for rice straw

he government partnered with the International Rice Research Institute (Irri) for a two-year project that aims to develop technologies using rice straw as part of efforts to improve the income of Filipino farmers. The Philippine Rice Research Institute, Philippine Carabao Center, and the Irri launched the Sustainable Rice Straw Management for Bioenergy, Food, and Feed in the Philippines program for localized and sustainable rice straw management solutions in the country. “It is very exciting to see how we are taking further steps, through strong collaboration with our Philippine partners, to find ways to manage rice by-products, for optimal resource-use efficiency in farms in the most environmentally sustainable manner. This is very crucial for us to achieve a sustainable impact in rice–based ecosystems,” Jon Hellin, Irri platform leader on Sustainable Impact, said in a statement. There is a perceived “poor value” on rice straw in the Philippines because of its difficulty in collection

and lack of opportunities to be used as an additional source of income, according to the Irri. Although the profusion of rice straw can be used for profiting like mushroom production, composting and using it as feed for animals, about 60 percent to 80 percent of rice straw is burned in the open fields by farmers for easier management, the Irri said. This method of rice straw management, according to the Irri, contributes to greenhouse-gas emission and air pollution.“We must create incentives for farmers to stop burning and to do this under the umbrella of enabling legislative framework,” Hellin said. The two-year public-private partnership program is funded by the Bureau of A g r icu lt ura l Researc h. Monique Danielle A. Fernando

Goldman says buy commodities as clock ticks toward trade war

ommodity bull Goldman Sachs Group Inc. has poured cold water on the notion that a trade war between the United States and China represents a serious threat to raw materials, saying most of them aren’t likely to be significantly impacted, and after recent declines now’s the time to buy. The Wall Street lender said the economic impact from sanctions between the US and China, including measures set to come into effect on Friday, is small, according to a report. It forecast a 10-percent return on commodities over 12 months as the dollar drops, and reiterated a bullish call on crude oil. “The trade war impact on commodity markets will be very small, with exception of soybeans where complete rerouting of supplies is not possible,” analysts, including Jeffrey Currie, said in the July 4 note. “This is consistent with our economists’ view that the macroeconomic impact of the trade war is likely to be very small,” it said,

with added emphasis on the final two words. Raw materials have been hurt by growing concern among global investors about the potential impact of the trade tariffs planned by Washington, and the threatened Chinese response. In June the Bloomberg Commodity Index suffered its biggest monthly slump since mid-2016, with losses seen in copper and soybeans. Energy markets were also in focus that month as Organization of the Petroleum Exporting Countries (Opec) producers and Russia agreed to add more supply after crude prices jumped. “Although commodities maintain their status as the best-performing asset class in 2018, the month of June was a substantial setback driven by emerging-market demand weakness, trade war concerns and the exit of Opec+ from supply cuts,” the bank said. “All of these concerns have been oversold. Even soybeans, the most exposed of all assets to trade wars, is now a buy.” Bloomberg News

‘PHL meat imports to double by 2027’

he increasing demand for meat owing to the improvement in the purchasing power of Filipinos would outpace local production and double the country’s imports by 2027. The joint report of the Organisation for Economic Co-operation and Development (OECD) and Food and Agriculture Organization (FAO) of the United Nations, tit led, “A g r icu ltura l Out look 2018-2027,” published on July 3 indicated the sustained hike in meat demand in the Philippines. “Strong production growth rates over the outlook period are also expected in Brazil, Mexico, Philippines, the Russian Federation, the United States and Vietnam,” the report read. The joint report projected that the Philippines’s total meat production from 2018 to 2027 would expand at an average rate of 1.95 percent, slower than the 2.93 percent recorded from 2008 to 2017. In 2027, the country’s total meat output would reach 4.397 million metric tons in carcass weight (MMT-CWE), 26.68 percent higher than the 2015-2017 average product ion of 3.471 MMT-CWE. For this year alone, the country’s meat output is projected to increase by 3.46 percent to 3.716 MMT-CWE, from last year’s 3.592 MMT-CWE. The data on Philippine meat output covers pork, poultry, beef and lamb. Pork production is expected to account for more than half of the country’s total meat output in the next 10 years. The OECD-FAO projected that pork production from 2018 to 2027 would grow by an average of 1.78 percent annually and hit 2.346 MMT-CWE by 2027. The report also estimated that pork

Beef from the U.S. Luke Sharrett/Bloomberg

production in 2015 to 2017 averaged 1.863 MMT-CWE. Despite the bright prospects for the local meat industry, output would still be insufficient to meet domestic demand. “The projected production growth in developing countries remains insufficient to satisfy demand growth, particularly in Asia and Africa.” The OECD-FAO report indicated that the country’s meat demand from 2018 to 2027 would expand at an average annual growth of 2.51 percent, faster than the 1.95-percent 10-year average growth of the country’s meat output. By 2027, the Philippines’s total meat consumption would reach 5.277 MMT-CWE, 33.8 percent higher than the 3.944 MMT-CWE estimated average demand from 2015 to 2017. The double-digit growth in the country’s meat demand translates into a 0.45-percent average growth from 2018 to 2027 in the Filipinos’ per-capita consumption. The report projected that a

Filipino would consume at least 50.7 kilograms (kg) of meat by 2027. The country’s per-capita meat consumption from 2015 to 2017 averaged 49.8 kg. The shortfall in the Philippines’s meat output is expected to be plugged by imports, according to the OECD-FAO. Philippine meat imports would reach 887,000 MT-CWE, 84.79 percent higher than the average annual imports of 480,000 MT- CWE from 2015 to 2017. The report also indicated that the country’s meat imports would grow at an average rate of 5.85 percent from 2018 to 2027. “Asia will account for the greatest share of additional imports, with the greatest increases in the Philippines and Vietnam, where consumption growth is outpacing domestic production expansion,” the report read. “Vietnam and the Philippines are expected to capture a larger share of additional imports for all meat ty pes, supported by favorable economic growth,” it added. Jasper Emmanuel Y. Arcalas

The World BusinessMirror

Friday, July 6, 2018

China rejects ‘blackmail’ on eve of US tariff hike

EIJING—China rejected “threats and blackmail” ahead of planned US tariff hike, striking a defiant stance on Thursday in a dispute companies worry could flare into a full-blown trade war and chill the global economy. The Trump administration plans to impose 25-percent duties on Friday on $34 billion of Chinese goods in its big gest sa nct ions yet over complaints Beijing steals or pressures companies to hand over technology. B eiji ng h a s t h reatened to ret a l i ate by ra i si ng it s ow n t a r i f fs on A mer ic a n good s, but a Com me rce M i n i s t r y spokesman said Chinese

aut hor it ies w i l l wa it to see wh at Wa sh i ng ton does. “China w ill not bow in the face of threats and blackmail, nor w ill it be shaken in its resolve to defend global free trade,” sa id Gao Feng at a news conference. “China w ill never fire the first shot,” Gao said. “However, if the United States adopts t a x at ion me a s u re s , C h i n a w ill be forced to fight back to

In this March 29, 2018, photo, Chinese Ministry of Commerce Spokesman Gao Feng listens to a reporter's question during a press conference at the Ministry of Commerce in Beijing. A Chinese government spokesman has said on Thursday that China “will not bow in the face of threats and blackmail” on the eve of US tariff hikes and will defend its interests. AP/Mark Schiefelbein

defend the core interests of the nation and the interests of the people.” US P res ide nt D on a ld J. Tr u m p h a s t h r e a t e n e d t o ra i se dut ies on up to $450

billion of imports from China. Coupled w it h China’s vow to ret a l i ate, it h a s f ue led fea rs t he con f l ic t cou ld we i g h on g loba l e conom ic g row t h. AP

Oil holds near $74 a barrel as Trump lambasts Opec to temper price surge

il held near $74 a barrel as President Donald J. Trump’s tweet urging the Organization of the Petroleum Exporting Countries (Opec) to pump more to temper prices did little to assuage concerns over a global crude supply crunch. Futures in New York were little changed following US Independence Day. Trump tweeted the group is “doing little to help” reduce gasoline costs and “if anything, they are driving prices higher.” Despite the key member Saudi Arabia reaffirming that the cartel and its allies will boost output, Goldman Sachs Group Inc. warned that oil is likely to lead a new rally as the market faces significant supply risks from Venezuela to Iran. Oil this month rallied to the highest level in more than three years as the Opec’s output increase plan was overshadowed by supply disruptions

in Libya, Canada and Venezuela. While Saudi Arabia is facing mounting pressure from Trump to do more, America’s oil sanctions on Iran and trade frictions with China are adding to uncertainties as the planned US tariffs on Chinese goods are set to start on Friday. “Investors are cautious since no one knows to what extent the Iranian sanctions will impact the market, and disruptions globally are taking supplies out faster than expected,” said Will Yun, a commodities analyst at Hyundai Futures Corp. in Seoul. “President Trump’s tweets are adding to the existing concerns. All factors will push prices higher, but we’re still waiting to gauge what level it will surge to with all the uncertainties.” West Texas Intermediate (WTI) crude for August delivery traded at

$73.86 a barrel on the New York Mercantile Exchange, down 28 cents, at 3:01 p.m. in Singapore. The contract added 20 cents to $74.14 on Tuesday, and there was no settlement Wednesday due to the US holiday. Brent for September settlement lost 52 cents, or 0.7 percent, to $77.72 a barrel on the London-based ICE Futures Europe exchange. The contract on Wednesday gained 48 cents to $78.24. The global benchmark traded at a $6.30 premium to WTI for the same month. Yuan-denominated futures were little changed at 497.6 yuan a barrel on the Shanghai International Energy Exchange, after losing 1.4 percent on Wednesday. President Trump wrote in the tweet that the “Opec Monopoly must remember that gas prices are up & they are doing little to help” and

that America defends many Opec members for “very little” money. “This must be a two way street. REDUCE PRICING NOW!” Meanwhile, Goldman said the market will stay in a deficit in the second half of the year as actual and potential supply losses from Iran, Venezuela, Libya and Canada far exceed the proposed boost from the group and its partners. In the latest of the US-China trade spat, China’s Commerce Ministry Spokesman Gao Feng said America’s tariffs will backfire and damage the world economy because more than half of the $34 billion of Chinese exports are produced by foreign companies. “China won’t fire the first shot,” Gao added. The Asian nation’s retaliatory tariffs will become effective “ immediately” after the US acts, according to the customs authority. Bloomberg News

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Mahathir’s test in Najib trial: Prove it’s not a political stunt

a l aysi a sent a st rong message to its public stewards when it charged Najib Razak, its first former premier to be indicted, with several counts of criminal breach of trust and corruption. The real test now lies in the nation’s pursuit of lesser-known figures as Prime Minister Mahathir Mohamad works to prove that his return to power, after toppling onetime protege Najib in May, is also the return to rule of law. Najib has consistently denied any wrongdoing and on Wednesday entered a not guilty plea on all charges. The 92-year-old has said that he isn’t seeking revenge, even as he appoints those who were dismissed under Najib’s administration over the handling of the 1MDB scandal. That includes former Attorney General Abdul Gani Patail, who now leads the task force heading an investigation into the troubled state fund. “Pursuing cr imina l charges against Najib is a low-hanging fruit,” said Hugo Brennan, an Asia analyst at Verisk Maplecroft in Singapore. “It is less clear that Mahathir has the political will to pursue root and branch reform.” The revived investigation into the troubled 1MDB state fund has also revealed other cases of potential corruption that Daim Zainuddin, an adviser to Mahathir, called “mini 1MDBs.” “Najib’s case in itself is significant for its symbolism,” said Yang Razali Kassim, a senior fellow at the S. Rajaratnam School of International Studies, Nanyang Technological University in Singapore. “It is the beginning of what could be a drawn-out struggle between the new regime in power led by Mahathir Mohamad against the old regime it overthrew on May 9, of which Najib has come to represent.”

‘Politically motivated’

Najib, 64, has called the renewed probe into the multibillion-dollar 1MDB scandal a “politically motivated ” move. His supporters drew parallels between his plight and that of Anwar Ibrahim, de facto leader of the ruling coalition, who fell out with Mahathir in the 1990s and was subsequently fired as his deputy then jailed for sodomy and abuse of power. In response, Anwar called on the public to follow the probe and decide whether the comparison is fair. Najib’s lawyers are considering whether to seek to disqualify Attorney General Tommy Thomas, who was appointed by Mahathir in June, saying that Thomas had made a prejudgment before being named to the post. The charges leveled against Najib involve 42 million ringgit ($10.4 million) that he allegedly siphoned from SRC International Sdn., a former unit of 1MDB, and a fraction of the $4.5 billion of funds that Maha-

Najib Razak Samsul Said/Bloomberg

thir seeks to recoup. Najib, who said as recently as April that he was confident there was no movement for a change in government, now faces three counts of criminal breach of trust and one corruption charge, which carry punishments of up to 20 years in prison each and a fine. The court will convene on August 8 to decide on a trial date, which is expected in February next year at the earliest.

‘Fall from grace’

“This is a major reset of expectations for Malaysia at all levels and the wider region,” said K hor Yu Leng, an independent economist with Segi Enam Advisors Pte. who has published papers on Malaysia’s political economy. “Society has been empowered and this could have ripple-effects outside the country to inspire others feeling oppressed by plutocratic status quo. Also notable, it takes an older elite to charge the newer one that stepped out of line.” One key step Mahathir’s administration has taken is to place institutions—including the Malaysian Anti-Corruption Commission directly under the parliament—instead of the Prime Minister’s Department as it was previously. The move allows them to be truly independent by reporting directly to lawmakers, said The Coalition for Clean and Fair Election, a civil rights group, who’ve proposed that laws be amended to reflect the changes. M a h at h i r ’s g o v e r n m e nt h a s sought out a number of other names linked to 1MDB. The MACC has summoned financier Low Taek Jho, former 1MDB officials Tang Keng Chee, Geh Choh Heng, Loo Ai Swan and Nik Faisal Ariff Kamil, and were preparing warrants for the fund ’s ex-chief Shahrol Halmi and former Goldman Sachs Group Inc. banker Roger Ng. A day before Najib’s arrest, his stepson and The Wolf of Wall Street producer Riza Aziz arrived at the MACC for a hearing. Police raids have focused on sites linked to Najib, including his family’s residences and his former office. The authorities seized cash and objects worth about 1.1 billion ringgit as part of their investigation into SRC International, and questioned about 30 people. Najib calmly addressed reporters after being charged and dubbed the legal proceeding his “best chance” at clearing his name. Hours after he was arrested on Tuesday, he apologized to the nation in a video posted to his Twitter account, and said that not all of the accusations against him are true. “This is a very powerful precedent,” said Clive Kessler, a sociology professor at the University of New South Wales who has studied Malaysian politics for almost 60 years. “The case will become a semi-permanent feature of the legal and judicial scene in Malaysia.” Bloomberg News

Editor: Angel R. Calso | www.businessmirror.com.ph

Chinese firm told to suspend $20-B Malaysia rail project

UALA LUMPUR, Malaysia—A Chinese company building a key rail link in Malaysia said on Wednesday that it has been told to suspend work pending negotiations, and urged the new Malaysian government elected two months ago to honor the contract. The suspension came just a day after Finance Minister Lim Guan Eng called for a sharp price reduction in the 688-kilometer (430-mile) East Coast Rail Link after discovering that the project’s actual cost is 81 billion ringgit ($20 billion), nearly 50 percent higher than that estimated by the previous government. The project is a key part of China’s regional “Belt and Road” infrastructure initiative connecting Malaysia’s west coast to rural eastern states. It is largely financed by China and the main contract was awarded in 2016 to China Communication by former Prime Minister Najib Razak, who was defeated in May 9 elections. Lim has said the project’s final cost included land acquisition, interest, fees and other operational costs. He said negotiations will be held as the project can only be financially and economically feasible with a “drastic” price cut by China Communication. China Communication said it regrets the suspension and urged the new government to “honor and respect” the contract signed with Najib’s administration. It said no duration was given for the suspension and that it could spark additional costs, losses and damages. “We hope that both sides will be able to find a winwin solution through sincere negotiation with good will. We also hope that the suspension will be lifted as soon as possible,” it said in a brief statement. Lim has said the government has given China Communication 10 billion ringgit ($2.5 billion) in advance payment and 9.67 billion ringgit ($2.4 billion) as a progress payment. The advance payment can be recovered in a “worst case scenario” if the project is withdrawn, he added. Malaysia’s new government has axed a high-speed rail line to Singapore because it is too costly and is reviewing other large infrastructure projects financed by China. The costcutting came after officials revealed the national debt has surged sharply, partly due to corruption under Najib’s rule. Najib was charged on Wednesday for criminal breach of trust and corruption arising from investigations into alleged corruption at the 1MDB state investment fund.

The World BusinessMirror

Friday, July 6, 2018

Second Novichok poisoning case worries residents near English city

MESBURY, England—A second case of poisoning with the military-grade nerve agent Novichok in southwestern England raised fears on Thursday that the massive cleanup effort that followed the sickening of a former Russian spy and his daughter failed to remove all of the substance from the area.

British officials announced late Wednesday that specialists have determined that a couple in their 40s were poisoned by the same lethal toxin—developed by the Soviet Union—that almost killed Sergei Skripal and his daughter Yulia in March. The new victims are both critically ill in the same hospital that treated the Skripals. The unexplained poisoning of two British citizens with no immediately apparent link to Russia has raised public health concerns in the Salisbury area, where a massive decontamination effort took place after the Skripals were found to have been poisoned with Novichok. Security Minister Ben Wallace told BBC on Thursday that the working assumption is that the two are victims of the consequences of the earlier attack and that they were not directly targeted. He said at this point counterterrorism police see no evidence linking the new victims to the Skripals.

Wallace said he understands the Novichok finding is causing anxiety in the Salisbury area and acknowledged that intelligence services cannot offer a 100-percent guarantee of public safety—there is low risk but not zero risk, he said. Prime Minister Theresa May has blamed the Russian state for the attack on the Skripals—an assertion the Kremlin denies—and Wallace said the Russian government could “put this wrong right” by providing details about the Skripal poisoning. The new case has surfaced at a sensitive time when the English soccer squad is advancing in the World Cup, staged this year in Russia, and days before a Nato summit expected to focus in part on worsening relations between Russia and the West. Home S e c ret a r y Sajid Ja v id is cha ir ing a meeting of t he Br itish gover nment ’s CO BR A emergenc y committee on T hursd ay mor ning. Local police declared the case

The UK’s head of counterterrorism policing Neil Basu, right, and Chief Medical Officer for England Dame Sally Davies speak at a news conference at New Scotland Yard in London on July 4. British police say couple who are critically ill were exposed to Russian nerve agent Novichok. John Stillwell/PA via AP

a “major incident” on Wednesday, four days after the couple—identified by friends as 44-year-old Dawn Sturgess and 45-year-old Charlie Rowley—were found collapsed at a residential building in Amesbury, 8 miles (13 kilometers) from Salisbury, where the Skripals were poisoned. Britain’s senior counterterrorism police official Neal Basu said police do not know whether the nerve agent came from the same batch that left the Skripals fighting for their lives. “The possibility that these two investigations might be linked is clearly a line of inquiry for us,” he said late Wednesday night. Initially, the investigation was

India asks WhatsApp to prevent misuse after mob killings

EW DELHI—India’s government says it has asked WhatsApp to take “immediate action” to prevent the social-media platform from being misused to spread rumors and irresponsible statements like those blamed for recent deadly mob attacks in the country. At least 20 people have been killed in mostly rural villages in several Indian states in attacks by mobs that had been inflamed by social media. Victims were accused in the viral messages of belonging to gangs trying to abduct children. The brutal attacks, which began in early-May, have also left dozens of people injured. Although Indian authorities have clarified that there was no truth to the rumors and that the targeted people were innocent, the deadly and brutal attacks, often captured on cell phones and shared on social media, have spread across the country. India’s ministry of electronics and information technology said in a statement late Tuesday that the lynchings were tied to “irresponsible and explosive messages” circulated on WhatsApp. It wasn’t specific on

the preventative measures it expected to be taken by WhatsApp, which is owned by Facebook. “While the law and order machinery is taking steps to apprehend the culprits, the abuse of platforms like WhatsApp for repeated circulation of such provocative content are equally a matter of deep concern,” the ministry said. It said WhatsApp “cannot evade accountability and responsibility.” “The government has also conveyed in no uncertain terms that WhatsApp must take immediate action to end this menace and ensure that their platform is not used for such malafide activities,” the statement said. “Deep disapproval of such developments has been conveyed to the senior management of the WhatsApp and they have been advised that necessary remedial measures should be taken to prevent proliferation of these fake and at times motivated/sensational messages.” WhatsApp said in a blog post that it would institute awards for research on “spread of misinformation” on its platform. “We will seriously consider proposals from any social science

and technological perspective that propose projects that enrich our understanding of the problem of misinformation on WhatsApp,” the post said. The Indian Express, an Englishlanguage daily newspaper, quoted a WhatsApp official as saying, “The situation is a public health problem which will require solutions from outside the company as well, including the government.” The official said that the “responsibility is beyond any one technology company” and “requires partners,” according to the paper. “I think it’s up to the Indian government to decide what is the right mechanism to address the spate of killing that is occurring. It is going to have to be a collaboration,” the official said. Internet policy experts say WhatsApp doesn’t have legal accountability and cannot be held liable for the way people use it. “But the platform is responsible for enabling anonymous sending forwards,” said Nikhil Pahwa, a digital rights activist and founder of a portal that covers technology and social-media policy in India. AP

led by local police, but Basu said counterterrorism detectives were taking charge after the substance was identified as Novichok. He said 100 officers had been assigned to the case. Police said officers were initially called on Saturday morning about a collapsed woman, then were summoned back in the evening after a man fell ill at the same property. Police at first thought the two had taken a contaminated batch of heroin or crack. Police cordoned off a home in Amesbury, believed to be Rowley’s, and other places the pair visited, including a church, a pharmacy and a park in Salisbury, near where the Skripals were found.

T he Sk r ipa ls’ i l lness initia l ly baf f led doctors after t he y w e re fou nd u ncon s c iou s o n a p a r k b e n c h i n S a l i s b u r y. Sc ient i st s at t he Por ton Dow n defen se l abor ator y conc luded t h e y h a d b e e n p o i s o n e d w it h Nov ichok, a t y pe of ner ve a gent de ve loped b y t he Sov iet Un i o n du r i n g t h e C o l d Wa r. It w a s b e l i e v e d t o h a v e b e e n o n t h e f r o nt d o o r o f S e r g e i S k r i p a l ’s ho m e . A fter spend ing weeks in critical condition, the Skripals were released from the hospital and taken to an undisclosed location for their protection. Doctors say they don’t know the long-term prognosis. AP

Revolutionary Guards warn US Iran can stop Hormuz oil exports

ran w ill stop oil ex ports from the Strait of Hormuz, the world’s most important oil chokepoint, if the United States succeeds in halting crude sales from the Persian Gulf nation, according to a Revolutionary Guards official. “Any hostile attempt by the US will be followed by an exorbitant cost for them,” said Esmail Kowsari, deputy commander of the Sarollah Revolutionary Guards base in Tehran, according to the Young Journalists Club, affiliated with Iran’s national broadcaster. “If Iran’s oil exports are to be prevented, we will not give permission for oil to be exported to the world through the Strait of Hormuz.” The Strait of Hormuz is at the mouth of the Persian Gulf, the world’s biggest concentration of tankers that carry about 30 percent of all seaborne-traded crude oil and other liquids during the year. President Donald J. Trump

decided in May to back out of the 2015 nuclear accord with Iran, with sanctions set to be renewed in November. The US threats come amid rising tensions, pitting Iran against Saudi Arabia and other Gulf Arab nations who maintain close ties with Trump. Kowsari comments follow remarks by Brian Hook, the State Department’s director of policy planning, who said on Monday that the United State’s “goal is to increase pressure on the Iranian regime by reducing to zero its revenue from crude oil sales.” The US’s threat recently to prevent Iranian oil exports “called for a swift and smart stance” from Iran, Kowsari said, praising Iranian President Hassan Rouhani’s reaction on Tuesday who said “it’s an incorrect belief that all oil producers would be able to export and Iran would be the only country unable to export oil.” Bloomberg News

Friday, July 6, 2018 • Editor: Dennis D. Estopace

The Regions BusinessMirror

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Armm hires 765 new teachers for Maguindanao

By Manuel T. Cayon

@awimailbox Mindanao Bureau Chief

AVAO CITY—The Autonomous Region in Muslim Mindanao (Armm) has hired 765 new teachers for districts in Maguindanao, a follow-through to an earlier hiring of teachers for its southwestern island province of Sulu in January.

In a communication dispatch by the ARMM Bureau of Public Information on Tuesday, the region’s Department of Education (DepEd) disclosed it already signed on Monday the appointment and deployment orders for the newly hired teachers. Some 435 new teachers were deployed to the first district and 330 were sent to the second district. All of them attended the acceptance and mass oath-taking ceremony held in Cotabato City on Monday. DepEd Regional Secretary Rasol Mitmug Jr. attested to the

competency of the new teachers. Mitmug, who is also a lawyer, said the teachers passed a strict hiring process that includes Assessment and Competency Examination for Teachers in ARMM, an interview and a teaching demonstration. “I want to be sure the hired teachers are all competent. And you are all here because you all passed the process,” ARMM Gov. Mujiv S. Hataman told the newly hired teachers. “We ask you that you teach well and we would give you what you also deserve.” Mitmug has previously announced that the DepEd-ARMM

was preparing the deployment orders of 2,458 teachers for the entire region, which ARMM officials hoped would be accomplished as soon as possible. Also earlier in January, the DepEd-ARMM hired and deployed 192 public-school teachers in Sulu. In the deployment program that time, Hataman also brushed aside suspicion of favoritism in the hiring of teachers. “Definitely no one knew you. You were appointed because you are competent, not because somebody talked to me or someone was close to me,” he said. He also assured the new Sulu teachers that they were “assessed on equal footing to eliminate nepotism and ‘palakasan system’ [system of patronage] that reportedly beset the DepEdARMM’s hiring of new teachers in previous years.” Instead, he said, “the challenge to you is how to help improve the status of basic education in the region by giving your full commitment to teaching and in nurturing the holistic development of students. Sulu has more than 500 public elementary and secondary schools in Sulu. The ARMM is composed of nine divisions that include Mag u i nd a n ao I a nd II, Ma raw i City, Lanao del Sur I and II, Lamitan City, Basilan, Sulu and Tawi-Tawi.

WATER DEAL Apalit Mayor Peter C. Nucum is flanked by Dennis C. Soliman, president and CEO of Soliman E.C. Septic Tank Disposal

Inc., and Cristina Isabelle P. Alejandro, president of Crystal Liquid Philippines Inc., as they display their memorandum of agreement (MOA) after the signing ceremony on June 26 at the Mayor’s Office. The MOA is in compliance with Republic Act 9275, also known as the Clean Water Act of 2004, and in pursuit of Municipal Ordinance 3, “providing the septage services in the whole municipality in a more lenient manner with the cooperation of the water provider.” Ashley Manabat

Cebu mayor chides DOTr’s transportation plan as ‘all talk’

EBU CITY—Although Mayor Tomas de la Rama Osmeña welcomes the idea of the national government coming in to solve the perennial traffic congestion here, he casted doubt as to its legitimacy. When asked what his position is on the Department of Transportation’s (DOTr) “ basket of solutions” for Cebu City’s congestion issues, Osmena simply made hand gestures mimicking a talking mouth. “It’s all talk. We’ll take anything they have. But it’s all talk,” he said. Prior to this, he lashed out at the national government for trying to stop the bus-rapid-transit (BRT) program in Metro Cebu. Transportation Secretary Arthur P. Tugade said on Monday the agency will adopt an integrated transport system (ITS) in Metro Cebu to address the “worsening traffic congestion” in the area

through the synchronization of various transportation solutions. The components of the said program will include the following: a point-to-point (P2P) bus system similar to MyBus, which is already operational in the city; a monorail in Lapu-Lapu City; the BRT in three-lane roads; and the Light Rail Transit (LRT) lines from Carcar to Danao and the Mandaue to Airport Line. Based on the initial plan, the monorail will become Mactan island’s transport system, connecting the Mactan-Cebu International Airport (MCIA) to different hotels and resorts in the tourist island. The LRT, on the other hand, will run from the city of Carcar to Danao City, as proposed by a Singaporean-Chinese and Filipino consortium. Included in the $3-billion LRT system proposal is a subway com-

ponent in Cebu City, an aboveground component from Talisay to Carcar and from Mandaue to Danao and an airport line from Mandaue to the MCIA complex. The BRT, meanwhile, will only be constructed on three-lane roads. The Metro-wide mass transit program will converge in a common station. Passengers will be ushered to an interlink terminal where connecting transit systems of all the components are located. Partial operation of the some of the components of the program will be available in the next two years. Aside from the ITS, the transport chief said his group is also considering the construction of flared intersections, road widening and intelligence signaling systems as “other basket of solutions” to resolve traffic congestion in Metro Cebu. Lorenz S. Marasigan

Boracay utility firm claims intensifying desludging ops

RIVATELY held utilities firm Boracay Island Water Co. (Boracay Water) claims it is intensifying its desludging operations, more than two months after the island-resort was closed on April 26. Boracay Water is the largest water supply and wastewater management services provider based in Malay, Aklan. In a statement, Boracay Water said it has recently acquired an additional three desludging trucks that can haul up to 9 cubic meters of wastewater or used water from households and establishments that are not yet connected to the sewer system. Boracay Water General Manager and COO Joseph Michael A. Santos said two trucks can haul 2 cubic meters of water, while one can haul 5 cubic meters of sludge. The company now has a total fleet of seven desludging trucks, which can collect up to 20 cubic meters of used water per day from the company’s residential and commercial customers in areas without access to the sewer network. “This effort to expand our desludging capacity is in line with Boracay Water’s aim to accelerate our used water management programs in support of the rehabilitation of the island,” Santos said. After gathering accumulated used water from the septic tanks of residential and commercial estab-

lishments, these trucks deliver the used water to Boracay Water’s two sewage treatment plants that may treat up to 11,500 cubic meters daily. The company’s sewage-treatment plants ensure that used water are treated and processed in strict compliance with the governmentmandated Class SB effluent water quality, or water that is fit for recreational activities and would not pollute the island’s pristine beach waters. According to Santos, desludging is an interim solution to the used water requirements of the island as it continues to fast-track its master plan set to further expand Boracay Water’s sewage network capacity to 37 kilometers by 2021 and build the third sewage-treatment plant in Barangay Yapak with a capacity to treat 5 million liters of used water per day. Even prior to the closure, Boracay Water has been expanding its sewer system and network, consistent with the infrastructure master plan approved by the Tourism Infrastructure and Enterprise Zone Authority Regulatory Office. In 2017 until the first quarter of the year, about 12,860 cubic meters of used water has been collected through Boracay Water’s desludging services both from residential and commercial establishments. While a total of 77 establishments have

availed themselves of the desludging services since the closure was implemented. On Wednesday Environment Secretary Roy A. Cimatu said water quality in Boracay, based on regular samplings conducted over the past few weeks, has greatly improved, prompting him to declare that “Boracay is no longer a cesspool.” His spokesman, Jonas R. Leones, told the BusinessMirror that the campaign in Boracay will not stop unless water bodies on the island are restored to its pristine state. Leones, who is also undersecretary for policy, planning and international affairs of the Department of Environment and Natural Resources (DENR), said the agency will strictly enforce the policy that all establishments, including residential buildings, resorts and hotels near the shores will have to put up their own sewage-treatment plant. The same policy applies to hotels and resorts with more than 50 rooms on the island, even if their establishments are situated inland or away from the beach, to ensure that no direct discharge of untreated wastewater will cause water pollution. The official said the search for hidden pipes discharging untreated wastewater directly into the sea will continue as part of the campaign. Jonathan L. Mayuga

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The Regions BusinessMirror

Friday, July 6, 2018 A9

Bello wants regional wage boards to stay

By Samuel P. Medenilla

@sam_medenilla

ABOR Secretary Silvestre H. Bello III said he will push for the inclusion of a provision for security of tenure and maintaining the regional wage boards in the proposed charter.

OAR TOWN

A man uses an oar to steer his boat on a fish pen installed at Laguna de Bay, the largest inland body of water in the country and an important fishing area. Santa Cruz, Biñan and Calamba are towns on the lake’s southern shore. NONIE REYES

EMB forms committee to check on planned sanitary landfill site

I T Y OF SA N FER NA NDO—A committee will look into the concerns aired by complainants of the planned engineered sanitary landfill and waste-to-energy plant in Barangay Pabanlag, Floridablanca, according to the Environmental Management Bureau (EMB) of the Department of Environment and Natural Resources (DENR). The DENR-EMB formed a committee on Tuesday after conducting a technical conference and consultation headed by Dennis O. Celestial. Celestial said the starting point for any measurement should start from the proposed sanitary landfill cell site. A set of guidelines will be follo we d du r i n g the ocular inspection of the site as provided by the National Solid Waste Commission through Resolution 54 series of 2013 and the 13 site identification criteria and suitability assessment for sanitary landfill. The composite te a m w i l l meet on Ju ly 12 at the project site in Barangay Pabanlag to conduct accurate measurements and verify information aired during the technical conference, according to Celestial. The 13 guidelines include the site’s 500 -meter prox i m it y to ground water resources which means that the sanitar y landf i l l s h a l l not be loc ated on shallow unconfir med aquifers, a 300-meter prox i m it y on perennia l surface waters like streams, lakes or rivers. However, it was pointed out that only a 50 -meter distance is required under RA 9003. T he roc k for mation will be check by the MGB represen-

tative, the proximity to a fault line should be 75 meters away, the topography or terrain of the proposed site shall not be located on a landslide prone area and should not be vulnerability to flooding. A 250 -meters proximity to existing or proposed residential areas or other sensitive land uses should also be followed, as well as a 500-meter proximity to ecologically sensitive or environmentally critical areas like national roads. Its proximity to airports must be at least 2 kilometers to avoid birds that might harm aircraft. The distance and accessibil-

ity to the site where the truck haulers will pass should also be checked. The proposed sanitary landfill cell site should be consistent with the current land use of the municipality like zoning and classification and its lifespan should exceed five years. Celestial said the ocular inspection will determine their decision if the proponents are following the provisions of the law and whether to grant and an environmental clearance certificate (ECC) to the proposed engineered sanitary landfill and waste-to-energy plant or deny it. Ashley Manabat

Bello said they already highlighted these proposals in the position paper they submitted to the Consultative Committee (Con-com) before it completed its draft. Con-com is expected to submit the draft to President Duterte next week. “We ensured the security of tenure because it is important to the workers,” Bello said in a media briefing on Thursday. “In our proposal, security of tenure refers to the relationship between a principal and a worker; not principal,

contractor and a worker,” he added. The DOLE chief made the assurance after labor groups expressed concern the draft by the Con-com will relax protection for workers’ rights. Bello also said they also insisted on maintaining the regional tripartite wages and productivity boards (RTWPB). He said the RTWPBs are indespensible since in sets the wages per region. “We want to maintain the wage boa rd s due to t he pec u l i a r it y and business situation in each

region,” Bello said. National Wages and Productivity Commission (NWPC) Executive Director Maria Criselda Sy told the BusinessMirror in a previous interview the regional wage boards are likely to be retained in a federal government since these provide one of the strongest presence of the DOLE in each region. “Each wage board is already well established,” Sy said. To further ensure the protection of workers in the proposed charter, Bello also recommended for the DOLE to be still given national power to oversee labor matters. “This should still be the responsibility of the DOLE [even in a federal government],” Bello said. On a personal note, Bello expressed his reservation on the provision of the charter to raise the number of lawmakers from the current 200 to 400. He said it would entail the government more costs and make legislation “unwieldy” due to the sheer number of representatives.

Huge number of ‘colorum’ vehicles, unlicensed drivers alarms LTO-1

AGUPAN CITY—Unregistered or “colorum” vehicles, drivers without license and traffic violations can be hazardous to both drivers and passengers as they make the streets more dangerous, according to the Land Transportation Office (LTO) in Region 1 (Ilocos region). LTO-1 Regional Director Teofilo E. Guadiz III, in an interview with the Philippine News Agency

on Wednesday, said “unregistered vehicles or drivers [unlicensed] or have not renewed driver’s license— these violations are walking disasters on the street.” “If they have not registered their vehicle and got involved in an accident, where will they charge the expenses? We also have no way to check if the vehicle is road worthy,” Guadiz added. “Or if you are not registered as a driver, how will we know that

you are still equipped to drive?” He noted that a total of 87 traffic violators were caught in the joint special operation of the LTO-1, Dagupan City Public Order and Safety Office (Poso) and Dagupan City Police Station (DCPS) on Wednesday alone. Guadiz said the number of violators caught in just a day is alarming considering that some of the drivers have two to three violations. PNA

A10 Friday, July 6, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

www.businessmirror.com.ph

editorial

Banking in PHL

ith the new inflation numbers being released and the Philippine peso trading above 53 to the dollar, there is some understandable gloom and doom on the local scene. We can offset these negatives by talking about the bright economic growth outlook that has not changed. In fact, we can find several other measures of the economy that merit satisfaction. However, on one hand, it is proper and important to look at the immediate impact of all of these factors, good and bad. Inflation hits the poor the hardest, and a weaker peso aggravates inflation. The rising tide of economic growth is not lifting all boats. But, on the other hand, even short-term conditions (rising food prices) and the longer-term situation (income and wealth inequality) are only considered “cover of the book.” And you cannot judge a book by its cover. Further, the foundations of a nation’s economic system are more critical in the long run. Comparisons between nations are often silly and useless except that using your own country as some sort of benchmark that you are familiar with helps you understand a bigger picture. India is the second-largest nation in the world by population. It has a relatively strong military and is a vibrant democracy. India’s foreign policy is independent with a wary eye on both the United States and China. Gaining independence about the same time as the Philippines, the country has struggled with the same social and economic problems as we have now and in the past. The Philippines is facing a 5.2-percent annual inflation rate while India just posted an inflation rate of 4.897 percent. Philippine annual economic growth is 6.8 percent, while India’s is higher at 7.7 percent. Despite the fact that India’s population is nearly 10 times that of the Philippines, its per-capita GDP in purchasing power is $6,093 versus the Philippines’s $7,236. We are experiencing food inflation at 6.1 percent even as Indian food prices are rising at about half that number. The poverty rate in both countries is about 22 percent by international standards. Using these “cover numbers,” it would seem that, regardless of huge differences, like between potato curry and pork adobo, both nations are economically in the same boat. However, when you start turning the pages of the book, the story is different. Government policies that react to short-term needs and conditions are important but are often wrong in the longer term. There is not much that we can do about that except to hope that decisions are being made with a clear view of the future. Yet, it all comes down to that biblical injunction about building your house on bedrock and not on sand. A warning sign is the government debt as a percentage of the economy. India’s 68 percent is manageable; the Philippines’s 42 percent is better. We are concerned here about our negative 0.8-percent current account to GDP. For India, it is negative 1.9 percent. But things can change quickly with some changes in spending and policy. However, the foundation of any economy is its banking sector, and India is in crisis. The most recent figures show that India has the second highest—behind Italy—bank nonperforming loan rate in the world at 11.6 percent. Philippine banks have a 1.8 percent NPL as of March 2018. A country’s economy rests on the foundation of a sound government financial condition and a strong banking system. Regardless of short- and medium-term economic performance fluctuations, those two factors are the most important for the future. Since 2005

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The shape of things to come? James Jimenez

spox

ate Wednesday a link to a document started getting passed around on social media. The document was supposed to be the draft of the new Constitution prepared by the Consultative Commission, for submission to the President. The spokesman of that Commission promptly disavowed the document but, as things happen on social media, that only drove more traffic to the document. As it turns out, the disavowed document contains provisions, which are, to say the least, radical departures from the way things are.

To be honest, parsing this document—especially if it turns out to even remotely resemble the original—will be the work of many, many days (incidentally, that is also the best argument I can muster against holding a plebiscite with undue haste). Thus I will, for the moment, content myself with sharing with you, sans commentary, the alleged—but vigorously and officially denied—Commission on Elections (Comelec) provisions of the draft federal constitution.

Article X-C. Federal Commission on Elections

Section 1. There shall be a Federal Comelec composed of a Chairperson and six Commissioners, two from Luzon, two from Visayas and two from Mindanao, one of whom shall represent the Bangsamoro, who shall be natural-born citizens of the Philippines, and at the time of their appointments, at least 35 years of age, holders of a college degree and must not have been candidates for any elective position in the immediately preceding election. One should be

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Atty. Francis Kayvin B. Escobar

Tax law for business

n every assessment made by the Bureau of Internal Revenue (BIR), the taxpayer is afforded with ample of remedies in disputing the same, as part of the right to due process. In this regard, our National Internal Revenue Code provides for both administrative and judicial remedies in contesting assessments of national taxes against taxpayers.

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free, orderly, honest, peaceful and credible elections. Section 4. No pardon, amnesty, parole or suspension of sentence for violation of election laws, rules and regulations shall be granted by the President without the favorable recommendation of the Commission. Section 5. Unless otherwise fixed by the Commission in special cases, the election period shall commence 90 days before the day of the election and shall end 30 days after. Section 6. Bona fide candidates for any public office shall be free from any form of harassment and discrimination. Section 7. Funds certified by the Commission as necessary to defray the expenses for holding regular and special elections, plebiscites, initiatives, referenda and recalls shall be provided in the regular or special appropriations and, once approved, shall be released automatically upon certification by the Chairperson of the Federal Commission on Elections. Section 8. The appreciation of ballots, counting of votes and the overall conduct of any election, whether it be manual, automated or a combination of both, shall be accessible, verifiable and open to public scrutiny at all stages. Section 9. Not later than six months before any election, any registered voter or registered political party may file, with the Federal Administrative Court, a petition to determine compliance with all processes, procedures and preparations relative to the conduct of the elections. Just so it’s clear: This is a draft of as yet unverified provenance and legitimacy. Take it with a healthy dose of skepticism and await the release of the official draft before losing your mind.

The mutually exclusive nature of the remedies against assessment

Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Marvin Nisperos Estigoy Aldwin Maralit Tolosa Rolando M. Manangan

BusinessMirror is published daily by the Philippine Business Daily Mirror

a member of the Philippine bar and has been engaged in the practice of law for at least 10 years. The Chairperson and the Commissioners shall be appointed by the President with the confirmation of the Commission on Appointments for a term of seven years without reappointment. Of those first appointed, three Members shall hold office for seven years, two Members for five years and the last Member for three years, without reappointment. Section 2. The Federal Commission on Elections shall exercise the following powers and functions: (a) Enforce and administer all laws and regulations relative to the conduct of an election, plebiscite, initiative, referendum and recall; (b) Deputize, with the concurrence of the President, law-enforcement agencies and instrumentalities of the government, including the Armed Forces of the Philippines, for the exclusive purpose of ensuring free, orderly, honest, peaceful and credible elections; (c) Register political parties, organizations or coalitions;

(d) File petitions in court for inclusion or exclusion of voters; (e) Conduct investigations in cases involving election offenses for the purpose of filing criminal complaints before the appropriate prosecution offices; (f) Recommend to the Federal Congress effective measures to regulate election spending, including limitation of places where propaganda materials shall be posted, and to prevent and penalize all forms of election frauds, offenses, malpractices and nuisance candidacies; (g) Recommend to the President the removal of any officer or employee it has deputized, or the imposition of any other disciplinary action, for violation or disregard of, or disobedience to its directive, order or decision; and (h) Submit to the President and the Federal Congress a comprehensive report on the conduct of each election, plebiscite, initiative, referendum or recall. Section 3. The Commission may, during the election period: (a) Supervise or regulate the enjoyment or utilization of all franchises or permits for the operation of transportation and other public utilities; (b) Supervise or regulate media of communication or information; and (c) Supervise or regulate all grants, special privileges or concessions granted by the government or any of its subdivisions, agencies or instrumentalities, including government-owned or -controlled corporations or their subsidiaries. Such supervision or regulation shall aim to ensure equal opportunity, time and space, and the right to reply, including reasonable, equal rates therefor, for public information campaigns and forums among candidates in connection with the objective of holding

Our present Tax Code entitles the taxpayer to reply to a Preliminary Assessment Notice within a

prescribed period, which, based on implementing rules, is 15 days from the receipt of such PAN. If the BIR

is not satisfied with the arguments in the Reply to the PAN, a Final Assessment Notice (FAN) or Formal Letter of Demand may be issued. The taxpayer needs to file a protest letter within 30 days from receipt for the assessment not to become final and executory. If the BIR is still left unsatisfied with the defenses interposed by the taxpayer, the inevitable result is that a Final Decision on Disputed Assessment will be issued and serves as the denial of the protest filed by the taxpayer. After the exhaustion of remedies in the administrative level, the judicial machinery starts to grind. At that stage, the taxpayer whose protest to a FAN is denied or is not acted upon by the BIR may be prompted to

elevate the case to the Court of Tax Appeals (CTA). Based on the last paragraph of Section 228 of the Tax Code, if the protest is denied in whole or in part, or is not acted upon within 180 days from submission of documents, the taxpayer adversely affected by the decision or inaction may appeal to the CTA within 30 days from the receipt of the decision or from the lapse of the 180-day period. Otherwise, the decision shall become final, executory and demandable. The question is—in case of inaction by the BIR, and the 30-day period already prescribed after the lapse of the 180-day period, can the CTA still take cognizance of a Petition for Review filed before it? See “Escobar,” A11

Opinion BusinessMirror

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Friday, July 6, 2018 A11

The national cybersecurity My night bus and the well-lighted towns What time do people come home agency challenge in Asia now? In another generation,

By Jon Watada

everal nations in Asia are on the cusp of a digital transformation, pushing for new infrastructure and technology advancements to boost their economic capabilities. Alongside these positive developments lies the real and present need to protect the output and assets that result from digitization from ever-evolving threats.

Philippines digital transformation

Recently, the Philippine government took the necessary steps and resources to tackle cybercrime at a national level, creating the Department of Information and Communications Technology and Cybercrime Investigation and Coordination Center to enforce the country’s National Cybersecurity Plan. Especially when the Philippines is the eighth-most targeted country for malware attacks, with a 19.2-percent encounter rate. However, there are still some key factors that separate the Philippines’s digital space from that of the world’s digital superpowers. At its core, the Philippines is a net information exporter with information highways pointing west, carrying the data of millions of residents. The country also has one of the highest number of Internet users in Asia, with over 50 million active users accessing online services across multiple devices. With little to no control over the hardware used by the Philippines’s “netizens,” as well as the information that is carried through them, the Philippines’s national security architecture is susceptible to multiple kinds of digital intrusions, from espionage, cybercrime, cyber attacks, and even cyber warfare.

The first line of defense

A national cybersecurity agency is the first line of defense, protecting a country’s interests, and businesses, by protecting the personal data of customers and employees—a focus for lawmakers around the world. Having an effective cybersecurity strategy requires a balance of individual rights. It is a challenging equilibrium to achieve, between the interests of public safety and national security. The first step would be for officials to set an agenda and outline a robust national cybersecurity strategy. This will define relationships and authorities within the government, as well as the government’s relationship with private industries and identify the broad capabilities required to establish and operate a new agency. Second, the government needs to define the roles and responsibilities within the newly introduced national cybersecurity agency. It needs to assess just how much risk a nation can afford and determine what the residual risk is by not taking on certain cyber-related responsibilities. In other words, the question that needs to be addressed by government leaders is: what are the responsibilities for cybersecurity between the national government, the government ministries and regulators, critical infrastructure providers and private industry? Australia successfully set up the Australian Cyber Security Centre following similar guidelines; and continues to empower both businesses and society. The newly formed agency in Indonesia would need to outline efforts to combat cybercrime and enhance the country’s standing as a trusted data hub—for businesses and consumers alike.

Government actions to mitigate risk

The government needs to establish and drive the national standards for cybersecurity. The new agency needs to establish standards for protecting and communicating cyber threats across the national landscape— whilst ensuring that these standards don’t block or slow good data that impedes commerce. It needs to be housed with highly skilled staff that are technically proficient in cyber operations, both

reactive and proactive. If Indonesia’s cyberspace has built-in vulnerabilities, it also has a highly skilled information-technology work force, which should be harnessed by the government for strategic use. It needs to establish roles and responsibilities for critical infrastructure providers, regulators and law enforcement, military and intelligence, and the private industry. With a framework in place, it needs to coordinate with national service providers (utilities, telecoms, etc.) and provide technical guidance. There needs to be national cybersecurity situational awareness among the military, law enforcement, intelligence, internal security, private and critical sectors—a coalition of sorts. Cybersecurity is a shared responsibility, and greater collaboration internally between the government and private-sector companies is needed to share information, best practices, as well as potential threats. Banks, airports, hospitals, small-to-medium businesses, even utilities services, all need to be protected from cyber attacks.

Government-driven agency

A good example of a governmentdriven agency would be Singapore’s Cyber Security Agency (CSA)—a national agency that is part of the Prime Minister’s Office, overseeing cybersecurity strategy, operations, education, outreach and ecosystem development across the government, industry and public. Singapore’s CSA has absorbed talents from various government agencies, as well as the private industry. It is also active in ecosystem development to purposefully nurture and embed cyber resiliency into the economy, so that Singapore remains a safe and secure place to live and do business with. Besides holding multisector cyber-simulation exercises and sector-specific cyber war games among competing companies that normally would not come together in increasing the national resiliency and preparedness, the CSA is also spearheading one of the world’s first cybersecurity bill (draft). The bill will legislate a framework for proactive oversight over 11 key sectors that are designated as Critical Information Infrastructures in response to the potential that sophisticated cyber attacks may cause disruption or cripple Singapore’s economy.

The agency of the future

Regulation alone is not enough. There is an opportunity here for an agency to protect, educate and train, so that the public and businesses are better able to protect themselves in this new digital world. The explosion of new technologies has made this world more interconnected, with individuals and businesses becoming entirely reliant on them before ensuring their security. As a result, Indonesia needs to be a safe place for companies operating in the country, entering the country and those shifting focus overseas. A national cybersecurity agency, once established, needs to track, learn and innovate in a safe way. Future attacks are imminent with the even greater use of cyberspace. Recent incidents across Asia have proved it and this trend will only grow. Cybersecurity is not only a determinant of stability but it also provides a key pillar for prosperity, stability and economic development. This is the reason cybersecurity must be treated not only as a necessity but also as a strategic action and an opportunity. The author is vice president at Booz Allen Hamilton, Asia Pacific.

Tito Genova Valiente

annotations

ur small towns do no sleep anymore. I reached that conclusion, one late night, as the night bus that was taking me to my small city, passed by town after town in Batangas, Laguna and Quezon, and then Bicol. It was one of those rare trips; usually, before leaving the metropolis, I am already deep in sleep, the blanket a fixture in these regular journeys, the sweater making me feel cozy. That night, I was looking out, trying to find the moon, which the calendar said would be shaped in full. The prediction did not consider the clouds that seemed to be rolling and whining from the far-off hills, now gray and blue because of lights coming from the edges of the night. First to light the roads that night were the lampposts that had similar gaudy designs. Some five or 10 years ago, the mayors and local leaders appeared to have agreed on one aesthetics: lights that shone as candy-colored bulbs set against each other. The impression was they were supplied by the same production company that believed in technicolor dreams and beacons for the dark. But lampposts in poor taste do not create a sleepless village; lighted houses do. One could count the houses that did not have lights. The dark houses were few and far in between. You could count them. As the bus turned slowly at corners and further slowed down on short bridges, I noticed that many houses had lights at the porches, with many rooms bright at midnight. Where did the night go? I asked myself. It was not poetry; it was the prose of the situation. People were awake at eleven in the evening, at

one in the morning. There were areas where the road was white because of the lights. What must be happening in those rooms? The bus was not meant to observe the intimacies—the selves in those rooms—and the lack of it in those rooms that at night was made to be bright as day. It was easy to think that many people could not sleep in dark rooms. It was also easier to think that people came home late at night. What time do people come home now? In another generation, one talked of coming home late from work, but that was when work happened at daytime. But what if the work began in the late afternoon? Would regularly coming home after work still be seen as staying late? I looked again outside, and saw movements in those rooms busy with yellow and white lights. Allow me tell you the story in those rooms without sleep:

one talked of coming home late from work, but that was when work happened at daytime. But what if the work began in the late afternoon? Would regularly coming home after work still be seen as staying late? I looked again outside, and saw movements in those rooms busy with yellow and white lights.

In one room—a bedroom—a wife was tired from work. Her husband wrapped his silence around her weariness. They hugged each other till the night went deep, forgetting the light was still there. At the porch, a young man wished there was no light at all: he knocked repeatedly, almost banging the door, as his old mother opened it, with tears in her eyes. She knew the son would leave again. She knew she would never see him. In the living room, yellow with the bulb that borrowed gently from the dying sun, a father was eating a dinner that was a breakfast that was a confession. He had lost his job, but he promised he would find one again. The wife understood. She had saved much. In what would have been a poor household, she was serving food that did not deserve any kind of shadow, any sadness. Just before the forest of ancient houses, a man was standing. He was going to the city, and he would come back wealthy, and he would buy one of those houses. He would keep the house lighted day and night because he would be alone there, lonely with all the riches from luck and scared

of his bounty. Walking past the convenience stores that were not meant to close at any time of the day or night, a man and a woman were going to similar directions: The man was leaving the town, and the woman was leaving her husband. My night went on and on, with my stories and inventions of life. I should sleep, but my nights give me times that need to be interrupted. Lights are breaks and, if they are on for long time, then nights are no more nights. I would like to summon Juan Gelman, the Argentine poet, to light my own meditation with his lines from a poem, “Things They Don’t Know,” that talks of darkness but not of the nights: dark times/filled with light/ the sun spreads sunlight over the city split/by sudden sirens… But Gelman is the same poet who, in his open letter “Open Letter – to my son,” sings of a burning soul that dips a finger in your name/scrawls your name on the night’s walls. What to do with our nights where lights are not diminishing, the way the Czech poet, Katerina Rudcenkova, describes in “Come Nightfall,” that evening stream of people with their lingering voices/the diminishing light withdrawing from the streets? For her, she does not want to be among them, all those radiant people and wrecks, I among them/exposing my body to the sun/and my life to random interpretations. I think that’s what night is all about. The nights are almost like days, opening ourselves to be interpreted as the sun seems to be around but not there, as the moon regrets its monthly duties even as it, behind the clouds, remains.

E-mail: titovaliente@yahoo.com.

‘Moved with Compassion: Feed the Multitude’ Rev. Fr. Antonio Cecilio T. Pascual

SERVANT LEADER

“Praise be to the God and Father of our Lord Jesus Christ, the Father of compassion and the God of all comfort.”—2 Corinthians 1:3

S we cross our path toward the celebration of the upcoming 500th Year of Evangelization onward to the New Evangelization in the Philippines, let us all rejoice and unite as children of God through the forthcoming Fifth Philippine Conference on New Evangelization (PCNE 5) from July 18 to 22, 2018. The theme for this year’s PCNE is “Moved with Compassion: Feed the Multitude,” which is aimed to celebrate the Year of the Clergy and Consecrated Persons as declared by the Catholic Bishops’ Conference of the Philippines. It will be a celebration of ministerial priesthood and the consecrated life as a community of the baptized faithful, as missionary disciples and servant leaders like Christ, and a road map to foster the spirit of communion and synergy among the laity and consecrated. Manila Archbishop Luis Antonio G. Cardinal Tagle, DD, will

Escobar. . .

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As early as April 2007 the Supreme Court in GR 168498 ruled in the affirmative stating that in case the Commissioner fails to act on a disputed assessment within the 180day period from date of submission of documents, a taxpayer can either: (1) file a petition for review with the CTA within 30 days after the expiration of the 180-day period; or (2) await the final decision of the Commissioner on the disputed assessments and appeal such final decision to the CTA within 30 days after receipt of a copy of such decision. The Court further explained that, should the taxpayer opt to await

Cardinal Tagle introduced PCNE in 2013 as a local response to the call of new evangelization. It was first held from October 16 to 18, 2013, with the theme “God makes all things new (Rev 21:5).” PCNE 1 focused on rekindling the ardor of evangelization and renewal of faith experience in the local and Asian context.

celebrate the opening mass on the first day (July 18), and will lead the plenary session about the spiritual life of priests through encounter with Christ, with the theme “Sharing in the One Priesthood of Christ.” Meanwhile, Rev. Fr. James Mallon, Episcopal Vicar for Parish Renewal and Leadership Support for the Archdiocese of HalifaxYarmouth, will deliver the keynote message on the theme “Renewed Servant-Leaders for the New Evangelization” during the second day of PCNE 5, July 19. The second day of the conference

will focus on the ordained ministers and consecrated persons as disciples of God and their mission to join Christ as they strive to have their hearts formed. The third day of PCNE 5, aptly themed “Ministerial Priesthood at the Service of Baptismal Priesthood,” tackles the primary tasks of the clergy and consecrated persons in bringing all their creativity, imagination and enthusiasm for the Gospel to the ministry. Apart from the plenary sessions, there will be 13 tracks of concurrent sessions on parish/Basic Ecclesial Community, schools, workplace/government, family, youth, the digital and social media, catechesis, church in mission, new ministry, young

the final decision of the Commissioner of Internal Revenue on the disputed assessments beyond the 180-day period, the taxpayer may still appeal to the Court, but only upon receipt of such final decision. In the more recent case in GR 171251 where the issue raised before the Supreme Court was whether or not the CTA may still acquire jurisdiction over a disputed assessment case where the 30-day period after the lapse of the 180-day period has expired, the High Court was eloquent in ruling that the two remedies under Section 228 granted to the taxpayer in a disputed assessment case are mutually exclusive, such that the resort to one bars the application of the other. The decision reiterates the doctrine in GR

168498 in ruling that if the 30-day period lapsed under the first remedy, the taxpayer is deemed to have chosen the second remedy, that is, to await for the denial by the BIR of the protest and to elevate the same to CTA upon such denial. This means that the taxpayer may still elevate the case to the CTA within 30 days from the receipt of the denial by the CIR of the protest despite the expiration of 30 days from the lapse of the 180-day period under the first remedy, since the taxpayer opted the second remedy. It must be noted, however, that the application of this doctrine laid down by the two mentioned cases applies only to a disputed assessment. In CTA case 8847, the Honorable Court had the occasion to rule that

adult and new trends in church. Cardinal Tagle introduced PCNE in 2013 as a local response to the call of new evangelization. It was first held from October 16 to 18, 2013, with the theme “God makes all things new (Rev 21:5).” PCNE 1 focused on rekindling the ardor of evangelization and renewal of faith experience in the local and Asian context. My dear brothers and sisters in Christ, let us all strengthen our faith and deepen our understanding about God by uniting and spreading the value of compassion to every Catholic faithful. For registration and other inquiries, please call (02) 405-0093, or mobile numbers (+63) 995-1913473 for Globe subscribers, (+63) 908-119-3533 for Smart subscribers or e-mail pcne2017@gmail.com. For more i nfor m at ion v isit http://www.pcne.com.ph.

To know more about Caritas Manila, visit or follow us on Facebook: CaritasManilaInc. For your donations, please call our DonorCare lines 563-9311, 564-0205, 0999-7943455, 09054285001 and 09298343857. Make it a habit to listen to Radio Veritas 946 in the AM band, or through live streaming at www.veritas846.ph and follow its Twitter and Instagram accounts @veritasph and YouTube at veritas846.ph. for your comments, e-mail veritas846pr@gmail.com.

the doctrine laid down in the said cases does not apply in a refund of unused input value-added tax. The issue in the said CTA case involves the interpretation of rules on input VAT refund and not an issue touching on disputed assessment. The author is a junior associate of Du-Baladad and Associates Law Offices (BDB Law), a memberfirm of WTS Global. The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported therefore by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at franciskayvin.escobar@bdblaw.com.ph or call 403-2001 local 170.

2nd Front Page BusinessMirror

A12 Friday, July 6, 2018

www.businessmirror.com.ph

As visitor arrivals grow 10.24% in Jan-May, DOT to jump-start global ad, marketing drive 3.18M By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

HE number of foreign visitors to the Philippines increased by 10.24 percent to 3.18 million in the first five months of 2018, and the Department of Tourism (DOT) is ramping up its global ad and marketing drive, hoping to meet its total 2018 goal of 7.4 million guests.

In a speech at the general membership meeting of the Hotel Sales and Marketing Association International Inc. on Thursday at a Makati hotel, DOT Undersecretary

for Development Planning Benito C. Bengzon Jr. announced the DOT will be restarting its global advertising and promotions campaign, still centered on the “It’s More

The number of foreign visitors to the Philippines in the first five months of 2018

Fun in the Philippines” brand. Bengzon said the DOT will be allocating more resources to digital marketing to attract the growing millennial tourism market. “The pivot toward digital marketing will continue as sourcing of information and booking patterns, especially among millennials, are ever changing. Suffice it to say, digital placements will have an increasingly larger budget allocation.”

He underscored that Northeast Asia, composed of South Korea, China and Japan, will continue to be the tourism industry’s “bread and butter,” as these account for about 50 percent of total inbound visitor arrivals. These will continue to receive the focus of the DOT’s marketing and promotions effort along with other core markets like the United States, Australia, Taiwan, Canada, Singapore, the United Kingdom and Malaysia. The DOT will also target other countries in Southeast Asia, given their proximity and the country’s increasing connectivity through low-cost carriers. But he pointed to “opportunity markets like India, France, Spain, Russia, Middle East and the Mediterranean,

particularly Israel and Turkey,” as among those that will be prioritized in the campaign. “In the end, what we want is a good mix of source markets and more targeted marketing to ensure that we attain headcount and revenue targets in the National Tou r ism Development Pl a n,” Bengzon stressed. The DOT official, however, said he still “had no information” on the details of the planned bidding for the advertising campaign. In 2017 the agency had a P650-million advertising budget and a contract with the McCann Worldwide Group to produce four ads for that year. The DOT campaign was supposed to have been terminated shortly thereafter, after the govern-

ment agency alleged that McCann copied an ad from South Africa in the former’s second ad. (See, “DOT stops airing of McCann’s ‘Sights’ as unofficial tourism ad reaps praises,” in the BusinessMirror, June 15, 2017.) Despite the closure of Boracay Island, the second-most popular destination in the Philippines after Cebu, Bengzon said the DOT would be able to meet its 7.4-million foreign arrivals target this year. “We are optimistic that we can still reach our 7.4 million foreign visitors target for 2018 even with the closure of Boracay. Other destinations have reported an increase in foreign visitor traffic, and we are hopeful that this can keep us on See “Visitor arrivals,” A2

CMMA@40: Don’t be afraid to speak truth, uphold the faith, media and church told By Samuel P. Medenilla @sam_medenilla

ELEVISION and radio broadcaster Mike Enriquez called on media practitioners and Church people on Thursday not to be afraid in telling the truth in a time of rampant misinformation. In a speech at the start of the Judges Forum of the 40th Catholic Mass Media Awards (CMMA) at the San Carlos Seminary in Makati, Enriquez stressed the importance of promoting truth today amid the numerous “purveyors of ‘fake news’” in society. “They have power. They are in the media and they use brute force of the government and the private [sector],”

Enriquez said. “Be not afraid to be, I hate to use the word, even if you have to be controversial if need be,” he added. Fr. Jerome Secillano, executive secretary of the Catholic Bishops’ Conference of the Philippines’s Public Affairs Committee, agreed with Enriquez on the need to combat fake news, which he said has left many confused about the standards of morality. “They are no longer sure what is right and wrong. Some people think that killing, committing adultery, stealing is right. Why? Because there are people who are famous, who are saying so,” Secillano said.

Sticking to the truth Enriquez said both the media and

Church could combat the spread of misinformation by going back to the source of truth. “For me, personally and professionally, the best weapon against fake news starts with faith in the truth,” Enriquez said.

But what is this truth? Secillano said this comes from the words of Jesus Christ, which provides guidelines on what is good, transcending practicality and sometimes even reason. “Whatever Christ taught us, it is the truth. So when he said thou should not kill, thou should not steal, thou should not commit adultery, this is clear-then you are not committing anything

Parish Priest Jerome Secillano (left photo) of the Our Lady of Perpetual Succour Parish gives a talk to the attendees of the 40th Catholic Mass Media Awards (CMMA) Judges’ Conference 2018 held at the Layforce Auditorium of San Carlos Seminary in Makati City on Thursday. Another key speaker, RGMA Network Inc. President Mike Enriquez, receives a certificate of appreciation from CMMA Chairman D. Edgard A. Cabangon (right photo) for gracing the Judges’ Conference, one of several activities marking the 40th anniversary of the prestigious media awards. ALYSA SALEN wrong,” Secillano said. “We are having a crisis of truth because [there are] so many people who try to question the legitimacy of these so-called biblical, theological and the truths of our faith,” he added.

New opportunity EVEN this crisis, however, could serve as an opportunity for the faithful to strengthen their faith, asserted Radio Veritas President and Rev. Fr. Anton Pascual. “We are in challenging times, but it is also a very good situation. It is an opportunity for us to witness to the kingdom and experience the healing and restoration of Jesus Christ,”Pascual said in his homily for Holy Mass celebrated at the CMMA Judges Forum. The Caritas Manila executive di-

Trash pileup. . .

“The Philippine capital’s urban watershed constitutes around 273 esteros, creeks and tributaries. These are clogged with waste and heavily encroached by informal settlers and commercial establishments, which constrains water absorption and leads to frequent flooding,” Sandhu said. Sandhu said this is why it is important for local governments, especially in Metro Manila and New Delhi, to clear these tributaries. Cleaning esteros in Metro Manila and Nallahs in New Delhi can create new greenways where people can walk or use their bikes, as well as reduce pollution during the dry season and flooding in the rainy season. This can be done through technological advancements and innovations that can speed up the process and give governments access to global funding commitments, experts said. “Similar approaches could be taken at

rector said people can rise to the challenge by reaffirming the truth as they know it. He said the CMMA panel of judges and board of trustees are now in the forefront of this challenge. Media, after all, greatly influences the mind of its audience, Pascual said. “The challenge is [to] feed your mind with truth everyday. Free your mind when you start your talks and focus always on prayers,” Pascual said. For his part, CMMA Chairman and President D. Edgard A. Cabangon said he is confident the CMMA judges and board of trustees will be able to fulfill their role of picking the deserving winners. “They are professionals in their own work. Their competence and impar tialit y as communication

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other cities across the region. In fact, not doing so is a further missed opportunity to leverage advances in technology and reinforce global commitments to innovate and provide financial incentives for resource recovery,” Sandhu said. Improved urban waste management can produce six economic gains. These include revenue gains from tourism improvements and new taxes on importers and producers of waste. Sandhu also said countries can benefit from organic waste turned into compost for fertilizer, construction materials and animal feed, as well as waste-exchange programs that can bring stakeholders together for mutual gains. She added some cities that improved urban waste management saw enhanced revenue collection and fees by combining waste-management bills with electricity bills as in Mombasa; or water bills as in Addis Ababa.

professionals make the CMMA the most valued award for mass-media workers,” Cabangon said. “I am sure they will keep alive the CMMA ideal of promoting Christian values through mass media,” he added. Established in 1978 by the late Jaime Cardinal Sin, the CMMA is one of the longest existing local awards for the press, television, radio and film. Enriquez, who is a CMMA award ee himself, said he hopes the CMMA would continue to evolve, in order to serve not only as a giver of awards, but also as an ongoing engagement of the Church with the media. The CMMA should go “deeper in ensuring they exemplify Christian values not only in their work, but also in their personal life,” Enriquez said.

Furthermore, Sandhu said clean services can generate new livelihood through resource recovery and operations and maintenance of natural water channels. “One way of grasping such opportunities is through ‘GrEEEn’ city action planning. This approach is based on the ‘3 Es’ principles [environment, economy and equity], which can facilitate a shift towards monetizing waste in ways that optimize our environment assets while providing economic gains and equitable benefits,” Sandhu said. Sandhu said landfills should be the last option when it comes to solid-waste management. These should be replaced by innovative measures that have less negative impact on communities and the environment. Further, there is a need for innovative financing solutions and other measures that incentivize policy-makers, practitioners and citizens for mutual benefits and improved quality of life that green, resilient cities can produce. Cai U. Ordinario