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A broader look at today’s business n Friday, July 13, 2018 Vol. 13 No. 272

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@joveemarie

S local government units prepare for a possible transition to federalism, the vice chairman of the House Committee on Local Government on Thursday asked the budget department to immediately heed the landmark Supreme Court decision that the Internal Revenue Allotment (IRA) for LGUs should now include all taxes collected from other government agencies apart from the Bureau of Internal Revenue, especially the value-added tax.

“A much higher IRA share would certainly boost the fiscal autonomy of LGUs ahead of the imminent switch in government structure from the presidential to the federal system.” —Villafuerte

Rep. Luis Raymund F. Villafuerte Jr. of Camarines Sur, also the vice chairman of the House Committee on Appropriations, also urged the Department of Budget and

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DBM urged: Give LGU ‘back pay’ from the IRA By Jovee Marie N. dela Cruz

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Mandatory product standard for flat glass saves lives and the industry Dr. Jesus Lim Arranza

Make Sense

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s chairman of the Federation of Philippine Industries (FPI), I find it an obligation to raise our concern over the lifting of flat glass from the list of products covered by mandatory standard and making it only voluntary by the Department of Trade and Industry (DTI), on the basis that flat glass is not a lifethreatening product. Continued on A10

Continued on A12

NFA may import 500K mt more of rice to ensure low-priced supply PHL Internet users still

distrust e-payment setup

By Jasper Emmanuel Y. Arcalas

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@jearcalas

HE National Food Authority (NFA) is eyeing to import another 500,000 metric tons (MT) of rice before the year ends to prevent the depletion of its stockpile and the loss of affordable rice in the domestic market. NFA Administrator Jason Y. Aquino said they will make the proposal to the NFA Council (NFAC), the agency’s highest policy-making body, next month during its regular meeting. The ideal arrival for the imports would be in the fourth quarter, Aquino added. “We do not want this situation to happen again. We are planning as soon as possible. We will be proposing that because we do not want the importation to be hindered by rainy season again,” he said in an interview with reporters on Thursday. “We will submit the proposal sooner. Any mode [of procurement] will do as long as the imports arrive on time,” he added. Aquino said the proposed importation is a backup plan See “NFA,” A2

PESO exchange rates n US 53.5160

By Bianca Cuaresma

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Workers at the NFA warehouse in Quezon City arrange sacks of rice after the delivery of the first batch of imported stocks. On Thursday the agency said it is proposing to import 500,000 metric tons more of rice to boost its buffer stock and ensure the steady presence of affordable rice in the market. NONIE REYES

@BcuaresmaBM

T’S 2018 and most Internetloving Filipino financial consumers are still reluctant to use the Web to make electronic transactions, latest Bangko Sentral ng Pilipinas (BSP) survey showed, as concerns on security still loom in the country. Still, BSP Governor Nestor A. Espenilla Jr. vowed to take measures to build a regulatory environment that will both welcome the latest innovations and ensure the safety of financial consumers.  The BSP’s latest survey showed that, despite the significant Internet usage and awareness of online

25% The proportion of those unwilling to use e-payment who cite the presence of hackers for their reluctance

payment methods in the country, about half of those with bank accounts and access to Internet connection remain wary about electronic payments due to issues of security and safety. See “Internet users,” A2

n japan 0.4778 n UK 70.6839 n HK 6.8185 n CHINA 8.0174 n singapore 39.2375 n australia 39.4145 n EU 62.4853 n SAUDI arabia 14.2706

Source: BSP (12 July 2018 )


News

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A2 Friday, July 13, 2018

Candy, biscuit makers want sugar import rules amended

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By Elijah Felice E. Rosales

@alyasjah

ANDY and biscuit makers are asking the government to change its sugar importation rules and allow manufacturers to directly buy the sweetener from other countries in times of shortage.

200,000 MT The volume of sugar needed by producers for which the government has given the green light to import

mechanism that if there is a shortage, even industrial [users will be allowed to import],” the source said in a mix of English and Filipino. “It will hasten the importation because manufacturers will be accredited to do so. [They should also] do away with the conversion, or let the government mandate the conversion rates,” he added. The industry insider argued the government will still oversee the procedure if manufacturers are given the freedom to import the staple in times of shortage. “It is for our own consumption only. [The] SRA [Sugar Regulatory Administration] can still audit usage in the same way they have con-

trols and monitoring over traders [under the present mechanism],” he explained. The government has given the green light to import 200,000 MT of sugar to supply the volume needed by producers. The industry source said candy and biscuit makers will be buying 15,000 bags, or 750 MT, of those to beef up their production. “When we were asking to be allowed to import, we were basing [it] on 15,000 bags for three months, [including this month]. That is well within the approved quantity for importation,” he added. The Philippine Confectionery Biscuit and Candy Association, a group of 18 candy and biscuit makers, was among those that asked the government to allow manufacturers to import sugar. The group lamented the price of domestic sugar that it reported got as high as P2,790 per 50-kilogram bag, compared to the imported staple at P1,300 per Lkg. With Beatrice Laforga

An industry source told the BusinessMirror that revamping the government’s current rules and regulations on sugar importation would serve confectionery producers better. Agriculture Secretary Emmanuel F. Piñol on Wednesday warned traders that he will permit direct importation of sugar if they fail to supply the volume required by manufacturers. The source said Piñol’s plan is not enough, and it is already

“moot” to discuss the importation of 200,000 metric tons (MT) of sugar at this point. What the government should concern itself with, he pointed out, is how it can change the importation scheme so manufacturers may be allowed to directly buy imported sugar. “It is a moot point [to discuss that] at this time. They will let their recent sugar order to import play out, whatever happens. What we are looking forward to is the future. There has to be a built-in

WPS. . .

Asia’s newest millionaires have a new obsession–fine art

Continued from A12

The President mentioned from the start that you know we have to befriend China, we need to look at security arrangements with other countries [like] Russia but somehow, whatever has been done has not in any way improved Filipinos’perception of trustworthiness of those countries,” Holmes explained. The President mentioned from the start that you know we have to befriend China, we need to look at security arrangements with other countries [like] Russia but, somehow, whatever has been done has not in any way improved Filipinos’ perception of trustwor thiness of those countries,” Holmes explained. The countries most trusted by Filipinos are the United States and Japan. The majority or 74 percent of respondents trusted the US the most, followed by Japan with 45 percent and Australia, 32 percent. Organizations most trusted by Filipinos were the Association of Southeast Asian Nations (Asean), with 33 percent; and the United Nations, 32 percent of respondents trusting.  Holmes said the Filipinos’ trust in these countries and organizations reflects the longer histories they have with the Philippines, as well as the extent of the exposure of the culture of these countries in Philippine society.  “We have much more long-standing relations with the US and Japan, and then we’re an original member of the Asean; and everyone basically from grade school to high school celebrated the United Nations Day. So there’s greater awareness of these countries and organizations compared to China or Russia or the EU [European Union],” Holmes noted. However, Holmes said that if there will be greater exposure of these countries in the Philippines, the level of trust of Filipinos in them could also increase.   Holmes said the Filipinos’ trust for Japan, for example, could be due to decades of exposure to Japanese Anime or Manga comics which have been part of the childhood of many Filipino children.  Television shows also helped bring American culture to the homes of Filipinos, making their ways more familiar and, therefore, much more trustworthy.  “These are the things many Filipinos have been exposed to. But we have not had Chinese cartoons so that history and that exposure explains why Filipinos choose [to trust] these countries,” Holmes said.  Pulse Asia conducted the survey between June 15 and 21 this year nationwide. The survey was done for regional think tank Stratbase ADR Institute.

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N the Philippines where a fifth of the country lives beneath the poverty line, locals have a new obsession: fine art. Salcedo Auctions is gearing up for its flagship annual sale in September that last year left standing room only beneath the chandeliers of the ballroom in Manila’s five-star Peninsula Hotel. The inaugural 2010 event was held under a tent in a shopping mall and attracted only about a fifth of today’s crowds. “Every event, there are always new faces,” said Richie Lerma, director and cofounder at the auction house. “There are a lot of new affluent who have a shopping list of artists.” Packed art auctions, luxury home sales and exclusive resorts are among telltale signs of an unprecedented rise in rich Filipinos. While the Philippines still lags the likes of South Korea and Taiwan in dollar millionaires, rapid wealth creation is prompting brokerages and finance firms such as Credit Suisse Group AG to tap what was once Asia’s economic basket case. An outsourcing boom, record remittances from overseas workers and low interest rates have kept Philippine economic growth above 6 percent for most of the past six years. High net-worth individuals —those possessing at least $5 million—are tipped to increase more than 80 percent in the five years through 2022, the third-fastest pace in the world. The race to woo millionaires is on. Credit Suisse is opening a Manila unit of its wealth management business, joining a growing number of private banks, such as Julius Baer Group Ltd. that are targeting the Philippines and Southeast Asia. They’re turning to the region’s emerging rich as growth in the more mature markets of Europe and Hong Kong slows. “We see a huge potential in

Internet users. . . In particular, the BSP survey on financial inclusion showed that in 2017, at least 38 percent of adults reported owning a smart phone, while 42 percent of the population used the Internet at least a month. Despite this, 46 percent of those with accounts and are using the Internet are unwilling to use the electronic

the Philippines among Asia Pacific,” said Christian Senn, private banking market group head for the Philippines at Credit Suisse, who estimates that the nation’s millionaire market will grow 10 percent annually. “Otherwise, we wouldn’t be here.” Jump on a private jet in Manila, and within an hour you’ll find exclusive resorts offering a reprieve from city life. Balesin Island Club provides 7.3 kilometers of whitesand beaches strictly for members’ use only, while millionaires can laze on their own private island at the Amanpulo resort. Back in the capital, high-end department stores selling luxury brands such as Balenciaga and Lanvin have sprouted. While still in its infancy, the Philippines’s luxury goods market is tipped to grow more than a third to almost $2 billion in the five years through 2022, according to Euromonitor International Plc.

Poverty trap

Now, the reality check: The brashness of new wealth lies in stark contrast with the lives of the Philippines’s poor. About a fifth of the nation’s more than 100 million people live on less than $3.20 a day, the World Bank estimates. But it’s also optimistic that economic growth is helping to lift a million Filipinos out of that category each year. President Duterte is building infrastructure and industries outside the capital region, which accounts for a third of the $314-billion economy, to help narrow the stubbornly wide income gap. To be sure, his efforts are being threatened by the fastest consumer price gains in at least five years. More millionaires means opportunities for local lenders, says Stella Cabalatungan, executive vice president at the private banking unit of BDO Unibank Inc., the nation’s largest bank. BDO is gearing

Continued from A1

payment means. Among the unwilling, the top concern remains the presence of hackers, at 25 percent; 21 percent cited personal security and 12 percent said epayments are not safe to access.  Other reasons include weak signal, scams, lack of awareness on how to use e-payment and lack of trust in online transaction. 

up for the stiffer competition from offshore private banks by taking on more wealth advisers, as it seeks to boost ties with asset managers locally and overseas.

Penthouse, pool

Real-estate brokers and developers are also enjoying the spoils. Luxury condominiums in Manila’s key business districts have been snapped up by the newly rich, with some projects selling out just months after their launch. Ayala Land Inc. is building a high-rise condominium block in the main financial district, and sold the three-level penthouse-with-pool for 477 million pesos ($8.9 million). Indeed, prime Manila residences are becoming scarce, and with prices nearing the costs of offshore property, the nation’s new millionaires are now looking further abroad. “Manila’s a sellers’ market, so for the wealthy it’s becoming a good idea to go out of the country for property,” said Toby Miranda, residential sales manager at Santos Knight Frank, the London-based brokerage’s Philippine affiliate. “They’re either looking for a good place to invest in or preparing for the time they’ll send their kids abroad to study.” Knight Frank has this year marketed London residences to wealthy Filipinos, and partnered with US firm Douglas Elliman Real Estate to offer homes in New York and Los Angeles in May. Back in Manila, Salcedo Auctions is busy seeking consignments for its September event that it calls “The Well-Appointed Life.” As well as artworks, the sale will include fine jewelry, antiques and rare automobiles. “We expect prices to go up as they do every auction,” Salcedo’s Lerma said. “The rich will spend to make every part of their life filled with joy.” Bloomberg News

Encourage innovation, manage risks In the BSP governor’s recent speaking engagement notes which was made public on Thursday, Espenilla said the public need “not be apprehensive” about the digital transformation of banking.  “Ultimately, [financial technology] innovations must work for the benefit of consumers. This would include the underbanked and unbanked sectors.

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‘Address severe gap in supply instead of hounding Grab’ By Lorenz S. Marasigan

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@lorenzmarasigan

NSTEAD of hounding Grab over a charge without legal basis, the regulator should look into addressing the supplydemand gap for the service, as this could help improve the transportation sector in the Philippines, a company official said. Leo Emmanuel Gonzales, who heads the public affairs division of Grab Philippines, said the Land Transportation Franchising and Regulatory Board (LTFRB) should put prime focus on addressing the demand for appbased ride-hailing services, noting that the regulator is wasting energy over unfounded charges.  “Loss of driver income, plus a severe lack in supply affects the public service being rendered by our driver-partners. Many people are getting stranded on the road because they can’t book a ride,” he said on Thursday.  “This is invariably linked to the huge disparity between demand and available supply of cars,” he added.  Booking requests made on Grab’s platform reach 800,000 requests daily, while the supply of vehicles in Grab is only at 33,000 cars.  “We appeal to the board to focus on resolving the supply gap immediately, as we in turn work hard to continuously improve our overall service,” Gonzales said.  He added that, contrary to the findings of the regulator, the company did not overcharge passengers.  “More importantly, there is no overcharging since Grab shows fixed and upfront fares before bookings are confirmed,” Gonzales said.  Grab is opposing the P10-million fine that the LTFRB slapped on the

NFA. . .

company for allegedly overcharging passengers by including a P2per-minute fare in its fare matrix. The charge was included in the fare matrix from June 2017 until it was scrapped by the regulator in April this year. Gonzales echoed Grab Philippines Country Head Brian P. Cu’s statement  on Tuesday  night, explaining that the said fare component is allowed under a previous department order issued by the then-Department of Transportation and Communications.  The said order was rescinded last month, when the Department of Transportation (DOTr) officially bestowed on the LTFRB full regulatory and supervisory powers over transport network companies and transport network vehicle service operators.  Gonzales explained that the P2per-minute charge was part of the presentation and discussions during Grab’s technical working group meeting with the LTFRB en banc in July 2017.  The said rate was also sent via e-mail to LTFRB Chairman Martin B. Delgra III on August 14, he said, noting that no concerns were raised on an e-mail response from Delgra’s office.  “There is no basis for the fine being imposed by LTFRB. We disagree with the board’s decision, and we will file an appeal to protect the ride-sharing industry in the country,” Gonzales said.  He added that the LTFRB has no authority to declare the DOTr order invalid.  “Only the courts, not the LTFRB, can rule on the validity of an order especially one issued by the DOTr, which has direct supervision and control over the LTFRB,” Gonzales said. 

of the food agency, as the NFAC is lukewarm to its request for permission to raise its buying price for palay from P17 per kilogram to P25 per kilogram.   The NFA has been struggling to beef up its buffer stock through local palay procurement as its current buying price cannot compete with the prices posed by traders. “The P8 increase seems negative. [NFAC] is saying that it will be inflationary. We proposed up to P25 per kilogram so we will have flexibility to buy at a lower price” depending on prevailing prices in particular areas, he said.  “We opted for the maximum possible price. For budgetary purposes, if we cannot utilize all the funds, then we will just return the excess,” he added. Even if the October-to-December period is the country’s main harvest season, Aquino remains adamant that the NFA will be able to beef up its buffer stock through local procurement. “Will that harvest go to the NFA? It will not,” he said. “We still focus on food security. Unless [NFAC] increases our buying prices, we have to resort to importation.”  Aquino said the NFA’s rice importation intended for the fourth quarter would not affect the farm-gate

price of palay during the period, as the volume would be kept for bufferstocking purposes. “We can just opt not to distribute the imported rice during harvest season. We can do that,” he said. “Besides, we can get the best deals from our foreign suppliers [during those periods]. Price is low plus quality is high, so that’s a win-win for us.” NFA Grains Marketing Operations Division Director Rocky Valdez said the agency’s 500,000-MT rice import proposal will still undergo scrutiny of the interagency Food Security Committee. The FSC will determine how much the NFA should import, and that volume will subsequently be recommended to the NFAC, depending on the projected shortfall in domestic rice output. Valdez disclosed that as of July 11 the NFA’s stockpile stood at 1.6 million bags, equivalent to 2.5 days of total national daily rice requirement. This is way below the 30-day buffer-stock requirement for lean seasons mandated by the Legislative-Executive Development Advisory Council (Ledac). The NFA said the 500,000-MT rice it is importing via government-to-government and open te nder proc u reme nt sc heme would only be good for 15 days. The NFA gave assurances that its stockpile will last until the end of the year barring major calamities.

In this regard, digitalization has great potential to promote inclusive growth,” Espenilla said. Thus, the governor said the BSP is looking at the need to address cybersecurity threats “at a broader scope.”  “To respond to this challenge, we established a framework that provides parameters and best practices to identify, prevent, detect, respond to and recover from cyberattacks,” Espenilla said, citing newly issued information

security guidelines. Espenilla also said as innovations are susceptible to cyber threats, regulatory technology—or so-called RegTech—solutions have emerged as a supplement to existing regulatory and supervisory tools.  “The BSP is currently investigating and will pilot RegTech solutions to streamline supervisory functions, particularly to address regulatory compliance and reporting requirements of supervised financial institutions,” the BSP said. 

Continued from A1


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Editor: Vittorio V. Vitug • Friday, July 13, 2018 A3

Senators torpedo House Speaker’s no-el scenario

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By Butch Fernandez

@butchfBM

enators thumbed down Speaker Pantaleon D. Alvarez’s proposal to scrap the May 2019 elections to give lawmakers time to tackle and pass an enabling law to shift to federalism, and other pending major bills including the national budget, which will compete for time with congressmen’s campaign preparations.

“It is not that easy,” Senate President Vicente C. Sotto III told the BusinessMirror. “In order to do that, we have to amend the Constitution,” Sotto said, citing Article VI, Section 8, of the which, he noted “mandates elections on the second  Monday  of May every three years.” “A special law or a simple one cannot amend the Constitution,” Sotto added. Fielding questions at a Senate media forum on Thursday, Sen. Francis G. Escudero pointed out that “Congress cannot pass a law postponing the 2019 elections. If elections are to be postponed,” he added, “you need to amend the Constitution. It cannot be done by a simple law.” Escudero explained that Congress has no power to amend the Constitution to defer scheduled elections mandated by the 1987 Charter. “That cannot be legislated because the Constitution specified the terms of elected officials. It is not like the provision for the barangay elections which says ‘unless specified’ by law.” He did not rule out the option Congress leaders may agree to convene the Senate and the House as a constituent assembly to amend the Constitution, but acknowledged this would trigger speculations the lawmakers will be open to charges passing such legislation to promote their self-interests. “I think Congress will be divided on this proposal to postpone elections,” Sen. Juan Edgardo M. Angara told the BusinessMirror. A ng a r a a sser ted t h at t he Speaker’s scheme will “also re-

quire a constitutional amendment which usually cannot be done quickly, so that raises the issue of whether there is enough time to pursue the amendment.” For his part, Sen. Emmanuel Joel J. Villanueva recalled that since he became a member of Congress, “we never contemplated canceling the elections because of the budget or the passage of other bills.” Villanueva added: “Election is the pillar of democracy. Filipinos exercise their right to select their leaders. I cannot think of any good reason why we should prevent the Filipinos from exercising the right to vote.” Sen. Joseph Victor G. Ejercito, who is eyeing to be reelected for another six-year term in the 2019 polls, also shot down the Speaker’s no-election (no-el) proposal. “Though I stand to benefit from the no-election proposal being a reelectionist, elections are referendum of public officials. People look forward to electing their leaders.” Ejercito added it would be “very hard to justify postponment.” This even as Ejercito admitted that running in a national elections is “very tedious and exhausting, not to mention very expensive. But it will be very hard to explain to the people why elections will not be held next year.” Sen. Gregorio B. Honasan said its proponents should first make clear “what is the ultimate longterm objective” of a no-election scenario in 2019. Honasan added  there are “vari-

Sulu clash leaves three ASG bandits dead, scores wounded By Rene Acosta

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@reneacostaBM

overnment troops clashed with more than 60 members of the Abu Sayyaf Group (ASG) in Sulu on Wednesday, killing three terrorists and wounding scores of others, the military reported on Thursday. A soldier was also killed, while 10 others were wounded during the intermittent firefight that lasted for two hours, according to the Lt. Col. Gerry Besana, spokesman of the Armed Forces Western Mindanao Command. The clash between elements of the Army’s 32nd Infantry Battalion led by Lt. Col. Ronaldo Mateo and followers of ASG subleader Hajan Sawadjaan began at around 1:55 p.m. at Sitio Kan Apo Aluk, Barangay Panglayahan, Patikul, Sulu. The military is conducting sustained operations against the ASG in Sulu following orders from Armed Forces Chief of Staff General Carlito Galvez Jr. for troops to finish off the terrorist group in the province and even in the adjoining province of Basilan. Terrorists in Sulu are still holding at least 10 kidnap victims.“We believe that a number of bandits were wounded and probably could have died due to loss of blood after…[the] encounter,” said Brig. General Divino Rey Pabayo, commander of the Joint Task Force Sulu. The military officer said he had ordered the deployment of reinforcements to the engaged soldiers in order to block the possible withdrawal of the terrorists as soldiers continue to scour the area.

ables to consider in deciding a noelection option or go ahead with the 2019 midterm election, including financial, economic and political costs, and a productive timeline for the Senate and the House to address the national agenda. Sen. Risa Hontiveros also questioned the Duterte government’s priorities. “I hope that we legislators will straighten our priorities,” Hontiveros said, adding: “What needs to be canceled is not the midterm elections but the implementation of the TRAIN law,” the Duterte administration’s tax reform measure imposing higher taxes to raise more revenues. The senator suggested that “instead of advancing narrow political interests, such as prolonging terms of public office through an unnecessary postponement of elections, what Congress needs to do it protect the people’s economic rights.”    Moreover, Hontiveros asserted that postponing the elections to give way to tackling federalism is “a great disservice” to the proposed new system of governance. “Is this what the President’s federalism was all about all along? Pwede bang mamamayan muna bago ambisyon? [I think the electorate’s intrest should precede political ambisions],” she said. Sen. Francis N. Pangilinan, in a text message to the BusinessMirror, confirmed he was not supporting Alvarez’s proposal to cancel the May 2019 elections. “No, I do not. The no-election and term extension proposal benefits politicians rather than the ordinary citizens,” Pangilinan said. “Any change in the Charter should redound to the benefit not of politicians but of the common folk; otherwise it will not have the support of the people.” “First of all, I don’t know where Congressman Alvarez is getting his facts,” said Sen. Grace Poe when asked to comment on the no election scenario under a proposed new Constitution. Poe pointed out that”the  Constitution specifically states when we are going to have elections, and 2019 is certainly an election year... you can probably amend the Constitution, but even if you do, you need the Senate vote.” She added this raises the issue on

DOJ affirms dismissal of rape rap against Vhong Navarro By Joel R. San Juan

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@jrsanjuan1573

HE Department of Justice (DOJ) has affirmed its resolution issued last year dismissing the complaint for rape and attempted rape filed by commercial model Deniece Cornejo against television host and actor Ferdinand “Vhong” Navarro. In a 20-page resolution released to the media on Thursday, the justice department through Undersecretary Reynante Orceo  denied the petition for review filed by Cornejo seeking the reversal of its September 6, 2017, which found no probable cause to prosecute Navarro for the alleged crime. Cornejo accused Navarro of two counts of rape, by sexual intercourse and by sexual assault, which allegedly took place on January  17 and 22, 2014 , respectively. The DOJ did not give weight to Cornejo’s arguments in her petition for review that the Office of the Prosecutor General erred in dismissing the complaint despite the existence of probable cause to indict the respondent for rape and attempted rape. The complainant added that the Office of the Prosecutor General committed a mistake when it dismissed the complaint on the same grounds upon which her previous complaints were dismissed despite new pieces of evidence that she presented. In its September 6 resolution, the DOJ noted that three preliminary investigations were separately conducted by the Office of the City Prosecutor in Taguig and by the City Prosecutor of Manila in connection with Cornejo’s accusations. However, the investigating prosecutors found inconsistencies in her affidavits that warranted the dismissal of the said complaints. The DOJ pointed out that  Cornejo’s version of the incident that took place on January  17 and 22, 2014 “suffers from a very serious credibility issue.” The DOJ stressed  that Cornejo filed two other complaints against Navarro in connection with the incident, but the former gave conflicting accounts of what actually transpired on the said dates that led to the dismissal of the complaints.

whether the Senate and the House, convening as a constituent assembly to amend the Constitution, will be “voting separately or jointly” on the Charter amendments. “There are many issues involved, but it will still have to go through the process of going through the Supreme Court if it needs to be resolved,” Poe said. “But let me also remind the public that first of all, for very simple issues or laws, you have to vote separately.” The senator cited, for instance, that Congress when renaming streets or schools vote separately.

agrees and resets the election date, it would still need to be approved by the Senate....but as I see it, we do not want to railroad these issues. It gives a bad impression also about our country. What are we trying to do?” At the same time, Poe played down reported claims by Alvarez that the House can make amendments by itself.  “The Speaker says a lot of things, [they are] not necessarily true. Remember he is not the voice of the entire Congress. There’s the Senate that he has to deal with and our Senate President already said that is not possible.” 

Congress cannot pass a law postponing the 2019 elections. If elections are to be postponed, you need to amend the Constitution. It cannot be done by a simple law.”­—Escudero “Something as crucial as this [Charter change], you’re voting jointly? I don’t think that was the intention of the framers, and time and again,” she said, recalling that the controversial provision was originally intended for a unicameral system. Poe ruled out a no-election scenario, saying “the public should not accept it.” “As Senate President Sotto said, the no-election option cannot be carried out because the Constitution mandates it. So, even if the House

Misplaced

The assertion of Alvarez to cancel the 2019 elections to give time to lawmakers on the draft federal constitution and for an easier transition to a federal government is “off tangent and misplaced,” Akbayan Rep. Tom S. Villarin said, citing survey results showing the majority of Filipinos are unaware of federalism, and that the administration should instead focus on the issues affecting the country and the needs of the people.

“Speaker Alvarez blunt proposal that ‘no elections’ should be a condition for the draft federal constitution to prosper is off tangent and misplaced,” said Villarin. “This assertion by Speaker Alvarez shows how detached is the Duterte administration to the real needs of our people. Right now, people’s priorities for the government to do is to control inflation, increase wages, generate jobs, reduce poverty, fight graft and corruption, and stand up to China,” he added. 

First president

Rep. Edcel C. Lagman of Albay, for his part, denounced the creation of a Federal Transition Commission in the draft federal constitution as it allows President Duterte to be the first federal president. “The creation of a Federal Transition Commission is a devious innovation by Duterte’s Consultative Committee to assure the transition of President Rodrigo Duterte as the first federal president since he is not prohibited from running in the first elections set on the 2nd Monday of May 2022,” the lawmaker said.  According to Lagman, this is a “veritable red flag” because unlike in the 1935, 1973 and 1987 Constitutions, where the transitory provisions were self-implementing and the mode of transition categorically spelled out, the proposed federal constitution empowers Duterte to chair a transition commission whose members are appointed by him. With Kezhia Maglasang


Economy BusinessMirror

A4 Friday, July 13, 2018 • Editor: Vittorio V. Vitug

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LRT 1 fare hike to ensure ‘smooth’ sailing of railway-extension project–LRMC exec T

Party-list solon to BBL bicam: Extend aid to ECs in distress

By Lorenz S. Marasigan

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@lorenzmarasigan

fare hike being charged to Light Rail Transit (LRT) Line 1 commuters will ensure smooth sailing for the train facility’s expansion, as this will give lenders the confidence to bankroll the P30-billion price tag for the railway system’s extension, its operator said.

Light Rail Manila Corp. (LRMC) President Juan F. Alfonso said his group is pushing for the fare adjustment—a component included in the concession agreement that the company signed with the government ­—to assure the construction of the railway station all the way to Bacoor. The fare increase “will give banks the confidence to lend to the company the funds for the Cavite Extension, knowing LRMC can recover its investment,” he added. Once built, the Cavite Extension will allow travel from Baclaran to Sucat to only 15 minutes; to Las Pinas, 20 minutes; and to Bacoor, 30 minutes.   “We can virtually guarantee these travel times because we are traffic- free. And we are investing

₧5 The amount of fare increase being sought by the LRMC to give lenders confidence to finance LRT 1’s railwayextension project

P5 for every P1 revenue to ensure that LRT 1 is efficient, trouble free, and also clean. Today, trains come every 3.5 minutes, down from five

minutes when LRMC took over operations and maintenance in 2015,” he said. Alfonso noted that the P5 increase will result in P25 in average fares, or about the same price as bus rides, and much lower than taxis and transport network company fares “without traffic.” “LRT 1 is the solution to the traffic problem caused by the high population density and urbanization of Metro Manila,” he said, citing a Japan International Cooperation Agency study that estimated that traffic cost is P3.5 billion a day in Metro Manila. “If we do nothing, it will become P5.4 billion a day in 2034, but by accelerating infrastructure projects, it can be reduced to P3 billion a day. And with projects like the Cavite Extension, this can be further reduced to P2.4 billion a day,” he added.  Ridership at Southeast Asia’s oldest overhead ra i lway system is seen to reach as much as 800,000 passengers per day  in three years, owing to increased capacity and demand.  Daily ridership has reached 459,400 passengers as of March.  The first stage of the Cavite Extension involves the construction of the first five stations from Redemptorist to Dr. Santos.  These are included in the first package of right of way, which is expected to be delivered some-

time this year. Targeted for completion in about four years after the delivery of easement, the 11.7-kilometer Cavite extension will connect into the existing system immediately south of the Baclaran Station and run in a generally southerly direction to Niyog, Cavite. It will consist of elevated guideways throughout the majority of the alignment, except for the guideway section at Zapote, which will be located at grade. Eight new stations will be provided with three intermodal facilities across Pasay City, Parañaque City, Las Piñas City and Cavite. The new stations are Redemptorist, MIA, Asia World, Ninoy Aquino, Dr. Santos, Las Piñas, Zapote and Niyog. The intermodal facilities, shall be located at Dr. Santos, Zapote and Niyog. The new stations will be accessible to and from nearby community facilities, such as shops, schools, stadium and park, and will be located to suit passenger-flow routes from residential areas. Pedestrian access to all new stations will be direct, safe and easy. Details, such as lighting to distinguish access points, pedestrian-cross striping and curb cuts for handicapped access, will be provided. The company has invested P7.5 billion in the railway system so far since it took over in 2015. 

he vice chairman of the House Committee on Energy has asked the congressional bicameral conference committee tackling the proposed Bangsamoro Basic Law (BBL) to assist electric cooperatives (EC) in the autonomous Muslim region solve their P9.2billion debt. Rep. Carlos Roman L. Uybarreta of the 1-CARE Party-list requested the bicam committee to produce either a debt condonation or restructuring provision in the BBL to address the EC’s debt due to powersupply requirements and disasters, adding that the condonation of debts of ECs is necessary to ensure their viability in the region. “Condonation or debt restructuring of the P9.2 billion in debts of electric cooperatives in the region will enable improvement of services and the rehabilitation of electrification facilities damaged in the past by calamities and other disasters,” he said. The lawmaker added these debts impede on their efforts to build new infrastructures and improve their operations, standing in the way of progress for the region. “Such debts continue to hamper the electric cooperatives’ efforts to build new infrastructures to improve their operation and services. If theses debts are not condoned, such debts will stand in the way of progress for these cooperatives, and it is the people who will ultimately suffer,” Uybarreta said.  Since ECs are only nonprofit organizations, he said, they would be forced to pass the debt to power consumers and require them to shoulder

it through high electricity rates. Uybarreta’s letter to Majority Leader Rodolfo C. Fariñas Sr. dated June 3 proposing an amendment to BBL’s last paragraph of Section 35 of House Bill 6475, which reads: “The National Government should assist the electric cooperatives operating in the Autonomous Region in the Bangsamoro by condoning their debts to the National Electrification Administration [NEA], the Power Sector Assets and Liabilites Management Corp. [PSALM Corp.] and the National Power Corp. [NPC] to ensure their financial and operational viability.” The lawmaker said the Bangsamoro government may also assist the ECs in the form of rehabilitation and efficiency improvement measures based on a set of clear time-bound operational reform programs, while other measures may be brought to the Intergovernmental Relations Mechanism Body. The cooperative debts with the NPC and the PSALM Corp. were obtained due to their power-supply requirements, while their NEA debt was obtained to enable them to rehabilitate their infrastructures, which were damaged as a result of calamities and disasters. Uybarreta also said that helping these cooperatives is vital to the success of residents in the region, giving them “a fresh start and guiding them towards better tomorrow.” “We wish to give the BBL and the Bangsamoro Autonomous Region this condonation/debt restructuring spark plug to get them moving forward to inclusive economic progress,” he said. Jovee Marie N. dela Cruz and Jose

Oscar Magpusao

DOTr eyes to quadruple fuel subsidy to jeepney drivers to ₧20,000 in ’19

Teco extends visa-free entry perk to Pinoys by another year

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By Recto Mercene

he Department of Transportation (DOTr) is eyeing to quadruple the total amount of the Pantawid Pasada to subsidy to jeepney drivers and operators from P5,000 to P20,000 next year, the chairman of the House Committee on Ways and Means said on Thursday.  Committee Head and Quirino Rep. Dakila Carlo E. Cua issued the statement after the DOTr, the Land Transportation Franchising and Regulatory Board and the Land Bank of the Philippines announced that they will release next week the first batch of cards loaded with a subsidy of P5,000 to help jeepney drivers cope with the impact of the Tax Reform for Acceleration and Inclusion (TRAIN) law, particularly the excise tax on fuel.  Cua said the government has allocated P997 million budget for the program this year. The lawmaker added that subsidy An egg trader conducts an inventory of salted duck egg stocks at his stall along a highway hike would require at least P5 billion. in Taytay, Rizal. Duck raising remains a principal source of livelihood among residents in the eastern Manila “For 2019 the DOTr is proposing to increase the amount town. NONIE REYES to more than P20,000 per franchise holder, and will require at least P5 billion,” he said.  Section 82 of the TRAIN law states that a social-welfare benefit program will be implemented, where qualified franchise holders of public-utility jeepneys are entitled to fuel vouchers. The fuel subsidy program would help our drivers cope with the soaring prices of diesel fuel.  “The launch of the Pantawid Pasada is a welcome develthe global market.” opment at a time when prices remain elevated. The governBy Elijah Felice E. Rosales @alyasjah ment fuel subsidy will provide our drivers and operators The government has a set of qualificawith some breathing room. I’m looking forward to the 2019 tions for MSMEs before they can apply. They he trade department has extended budget deliberations and how we can increase the assistance must be engaged in business activities that the “Juana Make a Mark” program government provides,” Cua said. are priority sectors by the DTI and IPOPHL; that allows micro, small and me Under the TRAIN law, an excise tax of P2.50 per liter is located in areas prone to natural disaster dium enterprises (MSME) to apply for imposed on diesel starting January this year, but the rate will or facing social and economic challenges; trademark at a reduced cost. go up to P4.50 in 2019, and P6 in 2020.  and listed business names with the DTI. The Department of Trade and Indus Last Wednesday Energy Secretary Alfonso G. Cusi signed They must also have two unregistered try (DTI) and the Intellectual Property the Joint Memorandum Circular (JMC) No. 1 agreeing to marks used on goods and services; have Office of the Philippines (IPOPHL)  on general guidelines for the implementation of the program.             Tuesday signed an agreement extending no more than five workers; and engaged The role of the Department of Energy (DOE) under the said in business for at least one year or with the Trademark Registration Incentive JMC is to ensure the acceptance of Pantawid Pasada Cards as limited financial capability. Program, initiated last year. The program a form of payment by oil companies. The DTI and IPOPHL’s priority sectors is aimed at servicing 1,000 MSMEs that According to Cua, while the “launch is an important first are agricultural business, including food want to protect their trademarks. step,” there remains a more difficult task to undertake. and resource-based processing; aerospace “We are extending this assistance pro “The more difficult task is setting up a system for deliverparts; automotive parts; chemicals; elecgram to get more MSMEs, especially in faring fuel subsidies. Today’s launch is an important first step. tronics-manufacturing and semiconducflung areas of the country, into the fold of Once all qualified beneficiaries have received their card, the tor-manufacturing services; construction; protecting their trademarks. The success government can respond faster to drastic changes in world and design-oriented furniture and garof the first round of the program shows oil prices by topping up the card,” Cua said. ments. Also on the list are shipbuilding; MSMEs are realizing the significance trade The program was revived from a past fuel subsidy proinformation technology and businessmarks give, such as an edge in marketing gram of the DOE known as the Public Transport Assistance process management; tool and die; tourtheir products,” said Josephine R. Santiago, Program (PTAP) in preparation for the implementation of ism; and transport and logistics. director general of the IPOPHL. the TRAIN law. The IPOPHL started the program last MSMEs could save up to P3,000 under However, the PTAP was flagged with “irregularities” by year, and targetted 1,000 trademarks the program, as it waives the payment of the Commission on Audit after the DOE’s failure to submit to be registered under it for a period basic filing fees, among others. Trade Secthe status of accomplishment, fund loading by Bank of the of one year. The agency believes the retary Ramon M. Lopez branded Juana Philippine Islands, fund utilization and inventory of PTA active participation of MSMEs in the Make a Mark as “part of our strategy to cards. As of 2018 PTAP remains unaudited. first round of Juana Make a Change is help the MSMEs be part of the local sup a proof of its significance. ply chain and eventually venture out to Jovee Marie N. dela Cruz and Joahna Lei Casilao 

Egg count

Trade dept keeps trademark registry investment program

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@rectomercene

he Taiwan Economic Cooperation Office (Teco) has announced the extension of the visa-free privilege entry to Filipinos by another year. “On behalf of the government of the Republic of China [ROC, Taiwan], the Taipei Economic and Cultural Office in the Philippines has the pleasure to announce hereby that the visa-exemption program for the nationals of the Philippines will be extended for another year,” a Teco news statement issued on Thursday said, adding that the trial period will continue until July 31, 2019, “and will be reviewed for further extension.” Teco first allowed visa-free entry to Taiwan in November 2017. “This visa-free privilege is a reflection of Taiwan’s goodwill and friendship toward all Filipinos under the ‘New Southbound Policy,’ which aims to build stronger bilateral relations and closer people-to-people connectivity between Taiwan and the Philippines,” Teco added. Ambassador Michael Peiyung Hsu, Taiwan’s representative to the Philippines, highlighted that the Philippines is not only Taiwan’s closest neighbor but also an important partner for Taiwan’s “New Southbound Policy.” In recent years, both countries have launched a number of visa-liberalization measures, which have resulted in a rapid increase of visitors. The number of two-way visitors hit a record high in 2017 wherein Filipino travelers going to Taiwan reached 290,784, while Taiwanese visitors to the Philippines reached 236,777. Teco said this mutual relaxation of visa restrictions is an important factor in improving bilateral overall relations and enhancing people-to-people exchange and cooperation between the two countries. The Philippines has difficulty reciprocating Taiwan’s gesture of visa-free entry privilege to Taiwanese because the income derived by its counterpart in Taipei, the Manila Economic Cooperation Office, provides the salaries of its employees, including the maintenance of embassy in the ROC and other as-

sociated expenses, according to Meco Head Angelito Banayo. Teco, on the other hand, is provided by a separate fund by the Taiwan government. The income from visa fees is remitted to their national coffers. Teco admitted that it loses about P450 million a year from the income from visa applications, which could be approximately the same amount Meco would lose if the Philippines is to abolish the visa fee to Taiwanese entering the country. Hsu believes that Taiwan’s visa-free trial program to the Filipino nationals will surely enhance the two countries’ long-standing friendship and further strengthen the multifaceted partnership and cooperation. At the same time,  Teco in behalf of Taiwan, urged the Philippine government and Meco to grant visa-free treatment to the people of Taiwan “on the basis of reciprocity, so as to attract more Taiwanese tourists and business people to visit the Philippines.” This is seen to produce a positive impact on various fields, particularly in tourism, investment, trade, education, culture, agriculture and fisheries. “It will be a significant milestone in the bilateral win-win partnership and also enhance the friendly ties and mutual benefits between Taiwan and the Philippines,” Hsu said. Under Teco requirement, a visa-free Filipino visitor must meet the following requirements: An ordinary/regular passport with remaining validity of at least six months from the date of entry (diplomatic and official passport holders are not eligible for visa-free treatment); A return ticket or a ticket for the traveler’s next destination and a visa for that destination if it is required; No criminal records or other records of misconduct in Taiwan; and A proof of accommodation (hotel) booking or host/sponsor’s contact information or arrangements of tour, travel, visit, events, meetings and the like.   Teco said, however, those who intend to stay in Taiwan for more than 14 days for  study, work, missionary, employment and other gainful activities are still required to obtain appropriate visas before entering Taiwan.


Agriculture/Commodities BusinessMirror

www.businessmirror.com.ph

Chicken inventory more than doubled in June

inventor y of local chicken at 11,161.39 MT, followed by Central Luzon with 5,676.02 MT. The NMIS, an attached agency of the Department of Agriculture, said the figures did not include fresh, chilled chicken and mechanically deboned meat, as well as those already in distribution channels. The agency also said the survey covered only accredited coldstorage facilities.

Frozen-pork inventory

A vendor displays various cuts of pork at his stall in Quezon City in this file photo. The latest data from the National Meat Inspection Service showed that frozen-pork inventory as of June 18 reached 32,954.66 MT. NONOY LACZA

By Jasper Emmanuel Y. Arcalas

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@jearcalas

he country’s dressed-chicken inventory as of June 18 more than doubled to 25,856.85 metric tons, from 10,023.9 MT recorded a year ago, the latest data from the National Meat Inspection Service (NMIS) showed. Data from the NMIS indicated that the latest chicken inventory was also higher com-

pared to t he levels recorded a mont h ago a nd t he prev ious week by 22.01 percent and

48.86 percent, respectively. Half of the dressed-chicken inventory, came from local producers, while the remaining half consisted of imports. As of June 18 locally produced dressed chicken in cold storages more than tripled to 12,06.09 MT, f rom 3,740.04 MT recorded in the same period last year. Imported dressed chicken in the country’s cold storages during the reference period reached 12,950.76 MT, 106.09 percent higher than the 6,283.87 MT recorded a year ago. Among all the regions in the countr y, the National Capital Reg ion recorded t he highest

‘Flash Boys’ on the farm? Arms race is unleashed over crop data

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t’s the sort of edge any trader would covet—and one the authorities were actually hoping to prevent. Yet the United States Department of Agriculture (USDA) may well be clearing the way for some Wall Street speed demons to trade on market-moving data before others. Abandoning decades of precedent, the agency has decided to only post its reports directly on the Web, rather than also release them via accredited media. While that may seem like a democratic move, it actually could set the stage for a winner-takes-all arms race to grab the info first. The development, announced on Tuesday, is the latest saga for crop markets that have increasingly seen high-speed algorithms taking over and running circles around slower human counterparts, a theme popularized by Michael Lewis’s Flash Boys. Fiber-optic cables, short wave radio, microwave towers: All have been employed to trade faster. “Somebody will figure out the fastest way to get the information and trade on it first,” said Jim Angel, a finance professor at Georgetown University in Washington. “What it does is it changes the arms race in a different direction.”

Two-second delay

Press organizations use highspeed fiber-optic lines to get data to readers out of the so-called lockup, where journalists are given access to the data up to 90 minutes in advance. It takes the department roughly two seconds longer to transmit its reports to the public, according to the USDA. The agency cited this gap when announcing its

policy change. “Everyone who has interest in the USDA reports should have the same access as anyone else,” Agriculture Secretary Sonny Perdue said in a statement on Tuesday. In a statement on Wednesday, the USDA said giving journalists early access “pre-determines who gets the information first,” favoring customers of media organizations that pay for fast access to info. The changes come during a volatile period for agricultural trading. Soybean and hog futures have plunged in recent weeks as China imposed new tariffs against US farm products. Grain prices have also slumped amid ample supplies. CME Group Inc. said trading volume across agricultural futures and options set an all-time high of 3.2 million contracts on June 19. The USDA’s monthly World Agricultural Supply and Demand Estimates report, known as WASDE, is one of the most-followed events in the grain-trading world. The August WASDE will be the first impacted by the policy shift. It’s typically closely watched as it provides the agency’s first surveybased production forecasts for corn and soybeans, the top US crops valued at close to $90 billion. The irony is that the USDA’s attempt to ensure everyone gets potentially market-moving information on commodities at the same time could actually do the opposite.

New process

Rather than getting access to data early, members of the media, including Bloomberg News, will now only get the data through the USDA web site at the same time as the pub-

lic. The lockup process is used by a variety of government agencies and allows for dissemination that reaches many data trackers at once. Because the USDA is releasing this information on a web site, it’s using a transmission technology called TCP. That means the trading firm with the bot that first scrapes the USDA site will have an advantage over everyone else, a head start on placing trades in commodities markets. Other means of conveying the data could have higher odds of sending the info simultaneously. “Each server hosting a web site provides thousands of simultaneous connections by which clients can retrieve information at the same time,” the USDA said in a statement on Wednesday. “Web sites hosted by content delivery services scale this up to millions of connections which are available to any client accessing the website content. No prioritization of connections, is done and data is transmitted as requested.” The USDA said on Tuesday it would improve its web site to handle an anticipated spike in traffic in the moments after report releases. The change takes place on August 1. That may make post-release moments more volatile while benefiting businesses with the resources to scan-and-trade fastest.

‘Handled evenly’

“If the dissemination isn’t handled evenly, it can create the perception that the government isn’t playing fair or it’s beholden to certain vested interests or something nefarious going on,” said Larry Tabb, founder of market research firm Tabb Group Llc. Bloomberg News

Data from the NMIS also showed that frozen-pork inventory as of June 18 rose by 78.42 percent to 32,954.66 MT, from 18,469.81 MT recorded in the same period last year. Of the inventory during the period, the bulk consisted of imports at 31,754.40 MT. Locally produced pork in cold storages reached only 1,200.26 MT, according to NMIS data. Region 4A had the highest frozen-pork inventory at 10,045.4 MT, of which 9,794.32 MT were imported, figures from the NMIS showed. However, the country’s frozenpork inventory as of June 18 was 8.12 percent lower than the previous week’s 35,868.30 MT, while it was 9.08 percent higher compared to the 30,211.46 MT recorded a month ago. The NMIS said the frozen-pork inventory included carcass, primal and specialty cuts. The survey covered accredited commercial and in-house cold-storage facilities. Filipino traders are allowed to purchase pork and chicken from abroad, and they usually do so via the minimum-access volume scheme of the World Trade Organization.

Editor: Jennifer A. Ng • Friday, July 13, 2018

A5

NFA asks public to report illegal rice trading activities T

h e Nat ion a l Fo o d A u t hor it y (NFA) launched on Thursday a 24/7 hot line that would allow consumers to repor t a noma l ies a nd other concerns regarding the sale of state-subsidized rice in the market. The hot line, dubbed as “Kontra Abuso,” would allow businessmen and the public to also report “highway violations during the transport of grains commodities and alleged inspection of grains business establishments,” according to the NFA. “We want to make NFA rice available and accessible especially to the marginalized sector. This is our way of seeking the assistance of the public to report to us immediately any rice trading violations they may witness,” NFA Administrator Jason Y. Aquino said in a statement. “Public participation is important. They will serve as our eyes and ears on the ground. They should be vigilant at all times and help us in monitoring the presence of rice in the market,” Aquino added. The hot line will be managed by the NFA’s Task Force Kontra Abuso with the help of the personnel of the Security Services and Investigation Department (SSID) to hear complaints, provide assistance, or lead information from the public through call or text messages regarding illegal trading activities. “Upon receipt of urgent complaints, the SSID shall record the details in a prescribed form and refer it to the concerned of f ice for immed iate act ion, w ithin a 72-hour timeframe.

Strict monitoring of the action taken will be in place,” the NFA said. The public may call or text the NFA Kontra Abuso hot line numbers 0927-871-5921 and 0906436-3133. The NFA said it regularly deploys personnel in local markets to monitor the availability of NFA rice. Last year the NFA said it has apprehended 2,561 grains businessmen and collected P14 million in penalties, administrative fines and other fees. The NFA, an agency attached to the Department of Agriculture, inspected a total of 39,407 grains business establishments nationwide and noted 3,421 violations, such as nonrenewal of NFA license, operating without license, noncompliance to the prescribed rice box and display of price tags and signboards. As part of its industry regulation and development program, the NFA conducts monitoring of the grains market and businessmen; enforcement of rules and reg u lations gover ning grains business; licensing and registration of all rice and corn business; and promotes a “harmonious and productive relationship” among rice and corn industry stakeholders. Earlier, Aquino said that, under Presidential Decree 4, which created the NFA, the agency is empowered by law “to inspect palay, rice and other grains stored by any person, partnership, corporation or association, for purposes of taking inventory and record of such commodities”. Monique Danielle A. Fernando

DA opens another barangay food terminal in North Cotabato

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he Department of Agriculture (DA) said it has established a barangay food terminal in North Cotabato, which will offer “high-quality, nutritious, safe and affordable” farm products to consumers in the province. The DA said the BFT cum Bigasan ng Bayan at Barangay Dolores in Antipas, North Cotabato, opened on July 8. The project was undertaken by the DA in partnership with its attached agency, the National Food Authority (NFA). “The government launched another barangay-based project aimed to provide employment opportunities through livelihood and establishment of small food packaging and food-processing center for agri-based products,” Agriculture Secretary Emmanuel F. Piñol said in a statement. “This shows that the government is serious in its mission to provide each and every Filipino access to high-quality, nutritious, safe and affordable fresh and processed agrifishery products,” Piñol added. Valued at P450,000, the new BFT has a freezer, digital weighing scales, crates and offers NFA rice worth P50,000, among others. The DA said also allotted P70,000 for the food terminal’s building improvement, as well as trainings and seminars. Dur ing t he l aunc hing ceremony attended by more than 500 farmers, Piñol and DA 12 Regional Director Milagros C. Casis, awarded P695,550 worth of agrifishery interventions to the municipality of Antipas—P181,500 for rice production, P436,500 for corn, P12,550 for high-value crops, P30,000 for livestock and P35,000 for organic agriculture. Some of the farm products sold during the launching were NFA rice at P27 per kilogram, well-milled rice at P39 per kg and black rice at P5 per kg; and cacao beans at P85 per kg. The BFT also offered cacao tablea, coco sugar, fresh milk and fresh vegetables. During the launching ceremony, Piñol also vowed that road works for the P20-million,

1.8-kilometer farm-to-market road (FMR) from Dolores to Datu Selo would commence soon. “We [DA] may not be able to complete all FMRs within this year, but I promise that it will all be finalized before my term ends,” he said. Jasper Emmanuel Y. Arcalas and

Monique Danielle A. Fernando


A BusinessMirror Special Feature

www.businessmirror.com.ph

Friday, July 13, 2018

A7

WASHINGTON Place is Stateland’s flagship project. It’s located along Emilio Aguinaldo Highway in Dasmarinas, Cavite

WITH THE ACQUISITION OF STATELAND

SUNTRUST GROUP TARGETS BIGGER

PROJECTS FOR QUALITY, AFFORDABLE HOMES

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By Leony R. Garcia

UNTRUST Properties, Inc. (SPI) now spearheads what its President Harry M. Paltongan refers to as the Suntrust Group. This was after the recent acquisition of property developer Stateland Inc. as its latest subsidiary. “The Suntrust Group will now be composed of SPI and its subsidiaries: Stateland Inc., Sunrays Property Management, Inc. which manages its completed projects, Governor’s Hills Science School, Inc. which is providing education in its projects, Suntrust Ecotown Developers, Inc. which is developing and managing its industrial parks. Add to this Sherwood Hills Golf Club Inc. which it is also managing. Stateland, Inc. will focus on affordable housing projects to help alleviate the country’s housing backlog. SPI is now into the medium and open markets as most of its products are priced even at above P4 Million pesos which is the benchmark of the open market class,” Paltongan stressed. “Of course, Stateland currently has beautiful higher-end projects like Washington Place and others. But we need branding and focusing so it will later evolve to serve the affordable segment. Again, SPI will stay where it is now - serving the medium and open markets. That makes the Suntrust Group truly the supermarket of real estate providing the needs of all market segments,” he added.

Resiliency through the years

PALTONGAN revealed that SPI has acquired 97% of the shares of Stateland Inc. as approved by the Philippine Competition Commission (PCC) in a two-page decision

on June 21. The amiable president is happy to note that both Suntrust and Stateland share a history of resiliency. It was during the Asian financial crisis 21 years ago when Suntrust was conceived. And despite the economic collapse of many industries at that time, Suntrust stood the test of time and since then has been known for aggressively growing its portfolio by continuously developing both vertical and horizontal self-sustaining residential communities in Metro Manila, CALABARZON, and now setting its foot in parts of Visayas, Mindanao. It also has projects in the City of Baguio. Similarly, low-key traditional company Stateland Inc. weathered the storm brought about by the Asian contagion: great recession, currency devaluation, high interest rates. And just like Suntrust, Stateland has grown its projects that are mainly in South Luzon and some parts of Metro Manila. Its latest project, which is a flagship community, is Washington Place along Aguinaldo Highway in Dasmariñas, Cavite. This offers about 1,700 modern contemporary housing units in a 40-hectare master-planned community. Among its other horizontal residential projects are the Mediterranean-inspired Villa San Lorenzo in Imus, Cavite; San Francisco Heights, Gran Avila and Casa Laguerta in

SUNTRUST Properties Inc. President Atty. Harrison M. Paltongan and Stateland, Inc President Reynaldo T. Cometa during the MOA signing at Marriot Hotel

GRAN Avila is the company’s affordable housing project in Calamba,Laguna

SUNTRUST officers welcome the new Stateland as part of its growing family during the ceremonial turnover of the key last July 9.

Calamba, Laguna; English-inspired Chester Place in Dasmariñas, Cavite; North Olympus IV in Quezon City; Spanish- inspired Gran Seville in Cabuyao, Laguna; Avila Heights in Sto. Tomas, Batangas, and Summercrest Village in Tanza, Cavite. Stateland’s upscale pocket townhouse developments in Metro Manila include the Royal Circle Townhomes in Parañaque City; Royal Garden Townhomes in Malate, Manila; Hillcrest Townhomes in Quezon City, and Royal Chateau in Pasay City. The company has also

built residential and office condominium towers in Makati City, Quezon City, San Juan, Mandaluyong, and Binondo, Manila. The ceremonial turnover of Stateland to the Suntrust Group took place on July 9.

Easing the country’s housing backlog

SUNTRUST is a wholly-owned subsidiary of Megaworld Corp., a company under the umbrella of the Alliance Global Inc. From the time of its incorporation, and pursuant

to the vision of its Chairman Dr. Andrew L. Tan, it has led the way in providing quality homes and master-planned communities to the Filipino market. Combining wellthought-out designs which focus on space-saving and functionality features, delivering a high standard of comfort and style customized to the needs of moderate-income Filipino families, making it today’s significant developer-provider of affordably priced homes. Paltongan, who was also named president of Stateland, ex-

pressed his plans for the company. “We have more work to do now. We are going to expand this company’s operations and hence will have more projects. We do not intend to change the name Stateland because it has been there for 42 years already,” he said. But what he is most excited about is the company’s new direction of addressing the country’s housing backlog in the affordable market which he feels is the moral duty of all developers. He wishes the government will put more focus on it in the same way it harps on the infrastructures’ “buil-buildbuild program”. “Not many developers go into this venture. This is classified by the government into socialized, economic and low-cost. The maximum price of the latter is P3Million pesos.,” he explained. Paltongan said the country’s housing backlog is estimated between 5.5 million and 6.7Million. At least 1.5Million of these belong to the informal sector and hence have difficulties getting government or bank financing. Every year, as the population grows, 300 to 400 thousand families are being added to the backlog according to Paltongan. With only 170 to 190 thousand production of new houses a year, the backlog continues to grow. “The Suntrust Group has this advocacy to perform its moral and social duty to help fill in this segment. This is where Stateland will focus on in the coming years,” Paltongan concluded.


A8

The World BusinessMirror

Friday, July 13, 2018

US soon to leapfrog Saudi Arabia, Russia as top crude oil producer

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he United States is on pace to leapfrog both Saudi Arabia and Russia and reclaim the title of the world’s biggest oil producer for the first time since the 1970s.

The latest forecast from the US Energy Information Administration predicts that US output will grow next year to 11.8 million barrels a day. “If the forecast holds, that would make the US the world ’s leading producer of crude,” says Linda Capuano, who heads the agency, a part of the Energ y Department. Saudi Arabia and Russia could upend that forecast by boosting their own production. In the face of rising global oil prices, members of the Organization of Petroleum Exporting Countries (Opec) cartel and a few nonmembers, including Russia agreed last month to ease production caps that had contributed to the run-up in prices. President Donald J. Trump has urged the Saudis to pump more oil

to contain rising prices. He tweeted on June 30 that King Salman agreed to boost production “maybe up to 2,000,000 barrels.” The White House later clarified that the king said his country has a reserve of 2 million barrels a day that could be tapped “if and when necessary.” The idea that the US could ever again become the world ’s top oil producer once seemed preposterous. “A decade ago the only question was how fast would US production go down,” said Daniel Yergin, author of several books about the oil industry including a history, The Prize. The rebound of US output “has made a huge difference. If this had not happened, we would have had a severe shortage of world oil,” he said.

T he United States led t he world in oil production for much of the 20th century, but the Soviet Union surpassed America in 1974, and Saudi Arabia did the same in 1976, according to Energy Department figures. By the end of the 1970s the USSR was producing one-third more oil than the US; by the end of the 1980s, Soviet output was nearly double that of the US. T he last decade or so has seen a revolution in A merican energ y product ion, however, led by techniques including hydraulic fracturing or fracking and horizontal drilling. T hose innovations—and the breakup of the Sov iet Un ion—helped t he US n a r row t he gap. L a st yea r Ru ssi a pro duced more t h a n 10. 3 m i l l ion b a r re l s a d ay, S aud i A r a bi a pumped just under 10 mi l l ion, a nd t he US c a me i n u nder 9.4 m i l l ion ba r re l s a d ay, accordi ng to US gover nment f ig u res. The US has been pumping more than 10 million barrels a day on average since February, and probably pumped about 10.9 million barrels a day in June, up from 10.8 million in May, the energy

agency said on Tuesday in its latest short-term outlook. Capu a no’s agenc y forecast that US crude output will average 10.8 million barrels a day for all of 2018 and 11.8 million barrels a day in 2019. The current US record for a full year is 9.6 million barrels a day in 1970. The trend of rising US output prompted Fatih Birol, executive director of the International Energy Agency, to predict this spring that the US would leapfrog Russia and become the world ’s largest producer by next year— if not sooner. One potential obstacle for US drillers is a bottleneck of pipeline capacity to ship oil from the Permian Basin of Texas and New Mexico to ports and refineries. “They are growing the production but they can’t get it out of the area fast enough because of pipeline constraints,” said Jim R ittersbusch, a consultant to oil traders. Some analysts believe that Permian production could decline, or at least grow more slowly, in 2019 or 2020, as energy companies move from their best acreage to more marginal areas. AP

China, US hint at chance for talks after Trump’s new tariff threat

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hinese and US officials have raised the prospect of resuming talks over trade between the two nations after President Donald J. Trump ratcheted up the pressure by announcing a huge new round of potential tariffs. After the US unveiled a list of Chinese imports worth $200 billion that could face higher duties, China’s Vice Minister of Commerce Wang Shouwen said “when we have a trade problem, we should talk about it.” While that came amid fresh threats of retaliation from Beijing, it matches some willingness from the Trump team to resume talks at a high level, according to a person familiar with the administration’s thinking. Communications between senior members of the Trump and Xi administrations have petered out since a third round of formal negotiations ended with scant signs of agreement in early-June. The US pushed ahead with a plan to slap 25-percent tariffs on more than $30 billion of Chinese shipments last week, spurring retaliation in kind from Beijing. Trump’s latest salvo threatens to push the trade fight into new territory, with China limited in using tariffs to push back. The government has, however, vowed to respond. “We should sit down and try to find a solution to this trade problem,” Wang said in an interview with Bloomberg in Geneva on Wednesday. Asian stocks rose on Thursday after a bruising sell-off the previous day, despite there being little fresh evidence that the trade tensions would abate. The yen declined and crude oil steadied after its biggest plunge in two years. Washington and Beijing now have about seven weeks to strike a deal or dig in for a trade war that could upend corporate supply chains and raise prices for consumers around the world. The US tariffs on $200 billion of Chinese goods are scheduled to take effect after August 30, when the Trump administration’s consultation process ends. “It’s extremely important that when two governments get into this kind of situation with each other that even if they are fighting on the official front, that they have something going on in the background

Photo taken at Yangshan Free Trade Port as US-China trade conflict escalates. Bloomberg

that enables them at some point to declare a sort of cease-fire,” Rufus Yerxa, president of the National Foreign Trade Council, said in a Bloomberg TV interview on Wednesday. “For the time being the two sides aren’t going to acknowledge that— they’re positioning themselves for the end game.” While there are no formal talks scheduled, dialogue continues between the two countries among lower-level bureaucrats, according to people familiar with the matter. Even as he has slapped duties on Chinese goods, Trump has continued to emphasize his personal friendship with China’s President Xi Jinping.

Growing frustration

White House Spokesman Lindsay Walters said US officials have had high-level talks with Chinese officials on “multiple occasions in the past few months” and have made clear US concerns about the country’s trade practices. “The Trump administration remains open to further discussions with China, but it is important that China finally address the longstanding concerns that have been repeatedly raised,” she said. But there are growing signs of frustration on both sides. On a conference call with reporters on Tuesday, senior Trump administration officials argued that China started the conflict with unfair trading practices and abuse of US intellectual property. One of the

officials said the US has repeatedly made its concerns clear and continues to hope for a negotiated solution, but Beijing hasn’t changed its behavior. Wang fired back at the Trump administration, say ing China won’t yield to “blackmail” or hesitate to retaliate. In its rhetoric, China has consistently tried to paint itself as on the defensive in this trade spat, and as a defender of the multilateral trading order. “If one party does not honor its words, talks cannot succeed,” Wang said. For negotiations to succeed “no party should point a gun at the other party,” he said. Tensions within the Trump administration over trade are also complicating matters, according to people familiar with the matter. As the de facto spokesman on economic matters within the cabinet, US Treasury Secretary Steven Mnuchin took the lead early in the negotiations. But at different points in the talks, other more hawkish members of the administration have taken the helm, such as Commerce Secretary Wilbur Ross, which has confused the Chinese. Trump himself is frustrated with Beijing’s reluctance to offer more concessions, especially after the US reversed a decision to slap crippling restrictions on Chinese telecommunications-equipment maker ZTE Corp., according to a White House official who declined to be identified.

The US last month agreed to lift the measures once ZTE pays a record fine and consents to management changes. On Wednesday the Trump administration said ZTE took another step toward ending the ban after the company signed an escrow agreement. ZTE must now deposit $400 million in escrow.

North Korea

The president also believes China hasn’t been helpful enough in US efforts to convince North Korea to abandon its nuclearweapons program, said a W hite House official. “We agreed to the denuclearization of North Korea,” Trump said on Twitter on Monday. “China, on the other hand, may be exerting negative pressure on a deal because of our posture on Chinese Trade-Hope Not!” Sen. Chuck Grassley, a Republican from Iowa, said he had a “great deal of concern” about the trade spat with China and the level of uncertainty it’s creating among farmers and businesses in his state. Futures on soybean, a target of China’s tariff retaliation, have fallen about 16 percent since the end of May, when the trade conflict started heating up. “When you don’t know what’s going to be the outcome, it’s very uncertain, and it’s had a definite impact,” Grassley told Bloomberg TV. “How long is this going to go on? I hope we can settle pretty soon.” Bloomberg News

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Donald Trump back after rattling Nato allies, condemning Germany

President Donald J. Trump, lower right, leans back to talk to German Chancellor Angela Merkel (from left), Polish President Andrzeji Duda, Nato Secretary-General Jens Stoltenberg, Greek Prime Minister Alexis Tsipras and Portuguese Prime Minister Antonio Costa during a group photo of Nato heads of state and government at Park Cinquantenaire in Brussels, Belgium, on Wednesday. Nato leaders gathered in Brussels for a two-day summit to discuss Russia, Iraq and their mission in Afghanistan. AP/Pablo Martinez Monsivais

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RUSSELS—President Donald J. Trump is attending a second day of the North Atlantic Treat y Organization (Nato) meetings, as he continues to hammer member-nations over their defense spending. Trump, in a series of tweets from Brussels, said that, “Presidents have been trying unsuccessfully for years to get Germany and other rich Nato Nations to pay more toward their protection from Russia.” He complained the United States “pays tens of billions of dollars too much to subsidize Europe” and demanded that members of the military alliance meet their pledge to spend 2 percent of GDP on defense, which “must ultimately go to 4 percent!” Trump has taken an aggressive tone during the summit, questioning the value of an alliance that has defined decades of A me r ic a n fore i g n p ol ic y, torching an ally and proposing a massive increase in European defense spending. Under fire for his warm embrace of Russia’s president Vladimir Putin, Trump on Wednesday turned a harsh spotlight on Germany’s own ties to Russia, alleging that a natural gas pipeline venture with Moscow has left Angela Merkel’s government “totally controlled” and “captive” to Russia. He continued the attack on Thursday, complaining that, “Germany just started paying Russia, the country they want protection from, billions of dollars for their energy needs coming out of a new pipeline from Russia.” “Not acceptable!” he railed before a r r iv ing l ate at Nato headquarters for a morning of meetings that will include talks with the leaders of Azerbaijan, Romania, Ukraine and Georgia. In the afternoon, he heads to his

next stop: the United Kingdom. The tough rhetoric against a core ally comes just days before Trump is set to meet one-on-one with Putin in Finland. W it h scorc h i ng l a ng u a ge, Trump questioned the necessity of the alliance that formed a bulwark against Soviet aggression, tweeting after a day of contentious meetings: “What good is Nato if Germany is paying Russia billions of dollars for gas and energy?” During the meetings, he demanded via tweet that Nato countries “Must pay 2 percent of GDP IMMEDI ATELY, not by 2025” and then rattled them further by privately suggesting member nations should spend 4 percent of their gross domestic product on defense—a bigger share than even the United States currently pays, according to Nato statistics. It was the most recent in a series of demands and insults that critics fear will undermine a decades-old alliance launched to counterbalance Soviet aggressions. And it comes just days before Trump sits down with Putin at the conclusion of his closely watched European trip. Trump has spent weeks berating members of the alliance for failing to spend enough of their money on defense, accusing Europe of freeloading off the US and raising doubts about whether he would come to members’ defense if they were ever attacked. He described the current situation as “disproportionate and not fair to the taxpayers of the United States.” However, a formal summit declaration issued by the Nato le aders on We d nesd ay re a f firmed their “unwavering commitment” to the 2-percent pledge set in 2014 and made no reference to any effort to get to 4 percent. AP

Wall Street economists show trade war spillover effects

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ome of Wall Street’s biggest banks have run the numbers on how President Donald J. Trump’s latest trade salvo will hit economic growth in the United States and China. Here’s a summary of their takes: If Donald J. Trump goes ahead with tariffs on $250 billion worth of imported Chinese goods, the hit to US growth would be around 0.3 to 0.4 percentage point and for China it could mean a drag of 0.3 percentage point, according to Morgan Stanley. There’s also the risk of an indirect hit to China arising from supply-chain complexities, which could subtract another 0.3 percentage point from growth. “The potential imposition of further tariffs on imports from China reaffirms our view that trade tensions will likely linger for longer,” Morgan Stanley economists led by Chetan Ahya wrote in a note. “While we still see negotiations as the endgame, getting there will take longer, leading to increased risks to business confidence and capex.” Deutsche Bank described Trump’s latest threat as a “significant escalation” and if it was fully implemented, likely to mean a hit to China’s real economy of 0.3 percent of GDP, most likely in 2019.

“The impact will likely start to show up in China’s exports in Q4, but we expect the bulk of the impact to take place in 2019, given the consultation process,” Deutsche economists led by Zhiwei Zhang wrote in a note. “We maintain our GDP forecast of 6.6 percent in 2018 and 6.3 percent in 2019.” J.P Morgan reckons China’s economy could take a hit sooner than expected, though it remains manageable. “Should the additional tariff take effect, it would increase tariffs on Chinese imports on average by 6.5 percentage points, which would reduce China’s exports to the US by 8.6 percent and drag on GDP growth by 0.2 percent via the trade channel.” They also caution that the indirect impact could be through the labor market and consumption, or via weaker business confidence. “Despite rising conflict, we believe both sides are still willing to negotiate,” economists led by Haibin Zhu wrote in a note. They warned it will be difficult to contain spillover effects if the dispute worsens from here, risking “a much bigger disruption to global production and trade activity, affecting investment incentives and dragging on global economic growth.” Bloomberg News


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A9

Editor: Dennis D. Estopace • Friday, July 13, 2018

Soured deal prompts govt to move Marawi rehab groundbreaking date

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By Bernadette D. Nicolas

@BNicolasBM

HE government has moved the groundbreaking date for rebuilding warravaged Marawi City from July to August following its “unsuccessful negotiation” with China-led Bagong Marawi Consortium. Task Force Bangon Marawi (TFBM) Chairman Eduardo D. del Rosario announced in a briefing  on Thursday  the consortium composed of Chinese and Filipino firms failed to comply with financial, technical and legal requirements.  Although the groundbreaking date has been reset to either the third or fourth week of August, del Rosario said he is “still optimistic” the Task Force will still meet its target date of completion, which is the last quarter of 2021.  “Well, unfortunately  we could not meet that indicative time line because we had unsuccessful negotiation with [the] Bagong Marawi Consortium,” he said. “And now, we are on the process of negotiating with the next developer, which is PowerChina.” TFBM Secretary-General Undersecretary Falconi V. Millar said they have re-

quested Power Construction Corp. (PowerChina) to submit technical proposals. However, Millar said PowerChina requested for a four-day extension so that its staff could go to Marawi to be able to come up with an “intelligent” proposal.  “With regard to legal submissions, we are engaging them [and] they have been represented by a counsel,” he added. “So we are still negotiating with PowerChina with regards to the modality of our jointventure agreement.”  A deal with PowerChina, however, will be subjected to a Swiss challenge and all interested proponents may participate in the Swiss challenge, Millar explained.  Asked which local company will be partnering with PowerChina, del Rosario said they are still waiting for that agreement with that local company, which is expected to be submitted within the week. 

Pilot training school in Clark to expand simulator facility

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LARK FREEPORT—Airline pilot training school operator Alpha Aviation Group (AAG) Philippines Inc. is expanding its simulator training capability as it plans to buy and install a brand-new Airbus A320 full flight simulator (FFS). Cristopher Magdangal, AAG regional director for Asia Pacific, said the expansion and acquisition will be undertaken through a $9-million financing agreement with the Bank of the Philippine Islands and BPI Century Tokyo Lease and Finance Corp. The loan will bridge the acquisition of the A320 FFS from Flight Safety International—a Warren Buffet company—and the $1-million simulator training center expansion, he added. BPI Century Tokyo has also previously funded AAG’s acquisition of six Cessna 172S G1000 basic flight trainer aircrafts and one A320 Integrated Procedure Trainer. FSI has more than 300 flight simulators in 167 countries, documents provided by, Magdangal said. AAG’s new flight simulator will be ready for training by 2019 and comes with a full

“Upset Prevention and Recovery Training” or UPRT capability and with the A320 new engine and current engine options. The new FFS will bring AAG’s current fleet of flight simulation training devices to a total of six, making it the largest in the country. The simulator training center extension building is designed to house four simulator bays and amenities. Headquartered in United Kingdom, AAG serves the domestic and Southeast Asian market from the Philippines and the Middle East region from its base in Sharjah, United Arab Emirates. Every year, A AG train hundreds of new pilots for its airline partners. A AG is currently training more than 300 pilots and most of its more than 800 graduates are now flying with leading regional airlines including Philippine Airlines, Cebu Pacific and Air Asia Philippines, among others. The launching of the brandnew flight simulator was made simultaenously with the groundbreaking of the training center at the A AG premisses here on Wednesday. Ashley Manabat

Peace talks with Reds intact, says Bello

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AVAO CITY—As far as government peace negotiators are concerned, the peace talks with the National Democratic Front (NDF) has remained intact even as the revolutionary group officially announced last week it was pulling out from the talks over its perceived ambivalence of President Duterte. “It’s not true they are quarrelling. Let’s just say it’s some sort of friendly [spat],” Silvestre H. Bello III, government’s chief negotiator with the NDF, told the government-ran Radyo Pilipinas in an early morning interview on Wednesday. He said the verbal tussle between Duterte and the Communist Party of the Philippines’s founder, Jose Ma. Sison “are like cajoling between friends.” He said the talks were “merely postponed” on the side of the government. “The President would like to consult the different sectors on what kind of interim agreement was acceptable because the President would not like the interim agreement on a peace settlement to end up opposed by the Filipinos, that it would be rejected by Congress and that the Supreme Court may say that it was unconstitutional,” he added. Bello also dismissed the exchange of ti-

rades between Sison and Duterte as a word war common among parties in conflict. He, likewise, downplayed the burning of a construction vehicle outside Davao City this week. “They are still in a state of armed struggle,” Bello said. “But it is clear from the statement of [Peace Adviser] Jesus Dureza that the negotiations are still on.” He, however, disclosed that despite rejecting the President’s overtures for him to come to the Philippines for that “brief window” of talking with him on the conduct of the talks, “Sison is actually receptive of that travel and visit to the Philippines.” “What’s holding him back is about diplomatic concerns,” Bello said. Sison has lived in political asylum in the Netherlands “and when he leaves, maybe he would not be allowed to go back there.” Also, he added, the US government’s terrorist tag on Sison remains and he could be arrested anytime any place. “It’s not true he suspected the sincerity of Duterte’s offer,” he said. “In fact, we already scheduled his likely visit to the Philippines by August.” Bello added the President has given the government peace panel three months to conduct the consultations. Manuel T. Cayon


A10 Friday, July 13, 2018 • Editor: Angel R. Calso

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Simple solution to weak peso problem

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he concerns about the peso-dollar exchange rate valuing the peso about 6 percent lower than a year ago are valid. Against the Australian dollar, the peso is almost unchanged. The peso is currently worth 12 percent less against the British pound and the Japanese yen. This has affected the cost of all goods and services, and combined with the 55-percent increase in the global price of crude oil, the inflation rate is significantly higher. We are told that we do not need to be rocket scientists to realize our currency exchange rate problem. Considering that “rockets” have been used for fun and fighting since the 13th century, maybe “rocket science” is not the highest intellectual achievement. The Philippines, like most nations that allow total convertibility of the currency, maintains stability through Central Bank policies. This “convertibility” is important. For example, the Vietnamese dong is not convertible, meaning you cannot exchange dong for local currency in many countries. The State Bank of Vietnam keeps strict control of the exchange rate of the dong into currencies that it wants to hold. In the Philippines the Bangko Sentral ng Pilipinas (BSP) does not control the peso exchange rate but works only to maintain stability, limiting large swings. Further, its mandate is geared to “influencing the underlying demand and supply conditions.” The free market of buying and selling pesos essentially determines the exchange rate. The BSP has other policy options, such as moving interest rates, to attract people to buy pesos and deposit money in local banks to earn higher interest than in their home country. As its currency was falling, Argentina raised interest rate to 40 percent in May to attract people to buy the Argentine peso. This action failed as the currency depreciated another 15 percent. However, there is a solution. The primary policy body of the BSP is its Monetary Board, responsible for making interest rate decisions to “promote and preserve monetary stability and the convertibility of the national currency.” Also, the BSP “determines the exchange-rate policy of the Philippines.” The BSP “adheres to a market-oriented foreign-exchange rate policy such that the role of Bangko Sentral is principally to ensure orderly conditions in the market.” But if you let the market determine the exchange rate, then you will have times of depreciation. There is an alternative that Singapore used at the beginning of its economic boom, and which Hong Kong still uses. That is to replace the currency exchange functions of a central bank with a currency board. The currency board keeps a set exchange rate against a benchmark currency such as the US dollar. Based on that rate, local currency can only be issued in an amount equal to the reserves held in that foreign currency. Complete convertibility is maintained but set at a fixed rate backed by the foreign currency. The foreign-exchange rate can be changed but this causes fluctuations in the amount of foreign reserves. You need at least 100 percent of the total value of the local currency in circulation to make this work. The Philippines has about 300 percent of the value of liquid pesos held in foreign-currency reserves. We could peg the peso to another currency and set the exchange rate at the best level. It does not take a rocket scientist to see the choices. If you let the market determine the exchange rate, you have to live with a “weak” currency sometimes. The alternative is to set the exchange rate and have the foreign reserves go up and down.

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he draft of the Bayanihan Federalism Charter has been out—in one form or another—for more than a week now and the public reaction so far has been disappointingly muted. Considering that what’s at stake is the Basic Law—the one law that is considered written into every single statute, rule and regulation to ever be promulgated from the time of its ratification—the level of public discourse on the matter has been underwhelming, to say the least. Considering the broad sweep of the draft charter, it can probably be argued that people—serious commentators and shoot-from-the-hip pundits alike—are simply being more circumspect. Still, with various quarters pushing for the immediate submission of this draft to a plebiscite, there is a very real danger that the country can get stampeded into voting on this before it’s even discussed properly. One can only hope that the debate doesn’t take too long to pick up. Some provisions, after all, are extremely worrying. One, in particular, has made me anxious: the imposition of the requirement of a college degree in order to be eligible to run for high office. Where, under the 1987 Constitution,

the candidates for the positions of president, vice president, senator, and member of the House of Representatives needed only to be able to read and write, now they have to have college degrees. Even members of the (as yet nonexistent) regional assemblies, in fact, are subject to this requirement, as well. This innovation will no doubt have many supporters—mostly those who think that leadership positions in a democracy should be reserved for certain classes of people, i.e., taxpayers, the college educated, the rich. I, on the other hand, forcefully submit that this new requirement runs counter to the fundamental nature of democracy. Instead of guaranteeing that all eligible citizens

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Having a college degree is a good thing, sure. But—and this is key—having a college has never guaranteed competence, much less integrity—whether in or out of the government. In fact, try this: think of the public official you hate the most—the one you consider most corrupt, most vile, and most undeserving of a government position, elected or otherwise. Nine times out of 10, that person will have a college degree. can stand for election—the word “suffrage” is typically understood to encompass both active and passive suffrage, i.e., the right to vote and be voted for—this new requirement unjustifiably restricts access to leadership positions to, as found by a recent study, a mere 23 percent of Filipinos. Interestingly, the Bayanihan Charter itself provides that: “No literacy, property, or other substantive requirement shall be imposed on the exercise of suffrage.” And yet, requiring a college degree necessarily implies a person must have first attended college which, unfortunately, is now so expensive that a college degree is practically tantamount to a substantive property qualification. And as the Supreme Court held in the landmark case of Aurea v. Comelec

Mandatory product standard for flat glass saves lives and the industry

Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos Dennis D. Estopace Ruben M. Cruz Jr. Angel R. Calso

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College degree

Dr. Jesus Lim Arranza Continued from A1

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andidly, I am perplexed at the DTI’s view that flat glass is not a life-threatening product. In some ways, the DTI might be correct, provided that all flat glass being sold are compliant with established product standards. But even in highly industrialized nations where mandatory product standards on thousands of products are strictly being observed, deaths and injuries caused by falling glass panels are still happening.

And just to enlighten the public, on October 9, 1999 a mother died in Chicago when a glass panel fell from an office of a skyscraper, hitting and instantly killing the woman. Luckily her daughter, who was with her at that time, was spared. Moreover, an increase in the number of reported incidence of injuries caused by street glass among urban children in Philadelphia, USA, has

been observed. From falling glass to stepping on broken glass, child injuries caused by these accidents are the most common. Thus, I really can’t understand how the DTI concluded that flat glass is not a life-threatening product, especially if this is not covered by the mandatory product standards. But it’s not only lives that are threatened with the lifting of flat

For the information of the public, only one Filipino-owned company survived the country’s flat glass manufacturing industry. And the lifting of flat glass from the list of items under mandatory product standard would adversely affect, not only the viability of our only flat glass manufacturing company, but the nation’s economy, as well. glass from the list of products under mandatory standard, jobs and the country’s glass industry are threatened, as well. For the information of the public, only one Filipino-owned company survived the country’s flat glass manufacturing industry. And the lifting of flat glass from the list of items under mandatory product standard would adversely affect, not only the viability of our only flat glass manufacturing company, but the nation’s economy, as well. First, removing flat glass from the list of products covered by mandatory standard could result in the flooding of the local market with cheaper but lower-quality flat glass.

(GR L-24828): “Property qualifications are inconsistent with the nature and essence of the Republican system ordained in our Constitution and the principle of social justice underlying the same, for said political system is premised upon the tenet that sovereignty resides in the people and all government authority emanates from them, and this, in turn, implies necessarily that the right to vote and to be voted for shall not be dependent upon the wealth of the individual concerned, whereas social justice presupposes equal opportunity for all, rich and poor alike, and that, accordingly, no person shall, by reason of poverty, be denied the chance to be elected to public office.” Put more bluntly, this is an elitist provision if ever there was one, and I see no reason why it should have a place in this Charter. Oh, and to those who might argue that a measure of elitism might be desirable to ensure good public service, a gentle reminder: having a college degree is a good thing, sure. But—and this is key—having a college has never guaranteed competence, much less integrity—whether in or out of the government. In fact, try this: think of the public official you hate the most—the one you consider most corrupt, most vile, and most undeserving of a government position, elected or otherwise. Nine times out of 10, that person will have a college degree.

This would not only increase the risk of consumers to glass-related deaths and injuries, but it would also be unfair for our local flat glass manufacturer, which is bound to produce only quality standard products, not only for safety reasons, but also because of its manufacturer’s obligation. As a local glass manufacturer, the company would be accountable for its production flaws, should there be any. Going after manufacturers of flawed imported glass products would be complicated, if not impossible, because of certain sovereign restrictions or limitations. All these factors could push the country’s only flat glass manufacturing company out of business. We’ve seen this before when we lost our only steel smelting plant, the National Steel Corp., due to the unabated importation and smuggling of substandard steel products. Due to unfair market competition, the country’s only steel company had to eventually close. It is for this reason that we in the industry sector are calling on the DTI to reconsider putting back flat See “Arranza,” A11


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Are we caught in the crossfire of the US-China trade war? Alvin P. Ang

EAGLE WATCH

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NITED States President Donald J. Trump made good on his promise to enact tariffs against Chinese products. This, he said, is to protect US jobs. The tariffs were slapped on July 6, 2018, at a rate of 25 percent over $34 billion worth of Chinese products. The Chinese consequently retaliated by imposing tariffs on the same value of US exports. The Chinese goods slapped higher tariffs include steel, aluminum and solar panels, while the Chinese retaliated by hiking tariffs on mostly agricultural imports from the US. As of today (Friday), the US threatened to hike the tariffs of $200 billion Chinese goods, and China promised to respond accordingly. These actions seem to indicate that the era of low-cost goods and services is coming to an end. Global competition is now being threatened by the tit-for-tat trade sanctions that the two largest economies are imposing against each other. The first impact of a tariff war is that it will make the imported product more expensive vis-à-vis the local competitors, thereby protecting local companies and jobs with it. However, this is not as simple as it seems anymore. The critical challenge of the revival of this old trade environment is that it cannot be a purely US-China affair. There will be many others caught in the crossfire without them even taking sides. Being neutral does not mean one will not be affected by these exchanges. This is due primarily to the heavy interconnection of global value chains in the production process. Consider the iPhone, one of the world’s most popular gadgets, often believed to be made in China—this product is made by seven countries—the US, Japan, South Korea, Taiwan, Germany and Italy for the parts, and China completes the product. The six parts makers are not uniquely producing them, as their components are made by other countries, as well—the Philippines is included in this global value chain. This is the intermediate goods trade that the world is currently in. In this regime, the final goods producer is not the only one affected by the tariff increase but everyone else in the value chain. In this current round implemented by the US and China, the products of China already include processed manufactured goods, such as steel, aluminum and solar panels. US products, meanwhile, are mostly primary products, such as soybean and other agricultural products. In the proposed $200-billion round, China products from primary agriculture products to chemicals and inputs of manufacturing will be slapped with a lower 10-percent tariff. How will the Philippines, a relatively small player in the global value chain, be affected in such shaking of the global trade arrangements? Both the US and China are top trading partners of the Philippines. They are No. 2 and 3 destinations of our exports, or a total combined 26 percent of total exports, while they are our No. 1 and No. 2 import sources—a combined 28 percent of total imports. Our top exports to the United States and China as of 2016 are as follows: CHINA

US

Office and data-processing machines

Electrical machinery and apparatus

Electrical machinery and apparatus

Office and data-processing machines

Metal scrap

Articles of clothing

Source: UNCTAD

Imports, on the other hand, are as follows: CHINA Iron and steel

US Electrical machinery and apparatus

Electrical machinery and apparatus

Feeds for animals

Telecommunication and sound-recording apparatus

Cereals and cereal preparations

Based on the data, it would seem that the Philippines will not be significantly affected in the first round of tariff increases. Even if iron and steel is our No. 1 import from China, it will not necessarily follow that its prices to us will increase. It is even possible that, since the US will lessen its purchase of this product, China can sell them cheaper to other parts of the world, including the Philippines. However, the concern starts when other products are slapped tariffs, particularly those that are related to our main export, which is connected with electronic production. Intermediate goods demand might suffer a decrease, which could significantly hurt our already weak exports. In a tariff environment, competition for trade shifts back to national level instead of corporations competing against each other under a multinational setting. The Philippines is now strongly linked to global value chain in electronics. Its primary product exports, mostly in agriculture and processed food and drink, are not as large as electronics. This position puts us in a condition of increasing the share of our largely local content production and having it sold in the global market. As the global trade arrangement changes and reverts back to the past, winners are those with larger local content. Similarly, as the Philippines’s main trading partner now is the Association of Southeast Asian Nations, it must increase its engagement in the region and improve its value chain in the region. With zero tariff already in effect in the Asean, it is unlikely that it will revert to a tariff environment, hence there is better opportunities to work together with the Asean to face this new global challenge.

Arranza. . .

continued from A10

glass in the list of items under mandatory product standard, not only for reasons of saving lives, jobs and the country’s glass industry but also because of national pride and adherence to President Rodrigo Duterte’s quest to make the Philippines an Asian economic tiger. And, most important, while

we continue to undertake earthquake drills all over the country in preparation for the “the big one,” we should start these preparations by ensuring that all flat glass being sold in the market are compliant to mandatory product standards by putting back flat glass in the list of products under mandatory standard, if only to secure the safety of human lives. After all, deaths and injuries caused by broken glass is now a rising global concern.

Friday, July 13, 2018 A11

Memorizing an island Tito Genova Valiente

annotations

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ou still remember the island? Why don’t you write about it? Primo Jun Villamor is talking via Messenger. For several months now, Jun, a cousin, and I have reconnected through the Net. The last time we saw each other, we were in Grade 1 in a school near the old church. We are now not young. In a more ordinary circumstance, we would not have used the term primo. It is an old term for “cousin” in the island of our birth. It is used as well in other places but by the elderly, as the name recalls old kinship in genteel and gentle times. The distance has allowed us to remember each other, and our friendship through the names that our grandparents and all the old men of our childhood addressed each other. The first time we saw each other on Facebook, I used the language of the island. Jun told me that was a surprise. He never thought I would remember that language. He, of course, never thought that, when my family moved to mainland Bicol, we brought not only boxes and boxes of plates and utensils but also the biggest luggage of them all, the language. In the house in Naga, we used the language of Ticao, which is not called Minasbate but Tigaonon. Do I remember the island? I remember the day we left. The sister of my grandmother under whose care I was left as an infant never saw me off. I did not remember that. Those around me constantly reminded me of that: Mamay Doyi could not bear to see her little boy go. That day, we had a journey in the arduous sense of it. Instead of taking the boat that would bring us to Bulan in Sorsogon, we traveled by land to the other side of the island facing the mainland Masbate. On our way, we had to pass by Batuan, the last town, where our bus was stopped by relatives who wanted to see us off. They actually delayed our trip. I remembered everything— hugs, embraces and tears, and long good-byes, perhaps “farewell” would be the better term. We crossed the narrow sea at Lagundi and reached Masbate, a town then, and stayed there with our cousins, the Badillos. The next morning, we took the plane to Legaspi in Albay. From the airport, we rode the train and reached Naga at night. I do not understand up to now why we had that circuitous trip. Were our parents delaying our leaving of the island? It only took a year before we would return to the island. Then a year passed, and there was no travel, and another year, until it was taking us five and 10 years to see our old home and the town.

Life in the island, in that town, was simple. At night, the bakers would start selling pan de coco, a bread with sweetened grated coconut as fillings. With the coconut plentiful in the island, the fillings for this bread was plentiful, first-class. Lovers on the pretext of simply buying snacks would use the pan de coco as a sweet excuse. In the darkness of the plaza, with a tiny Rizal hovering over the Spanish cannons, lovers would bring the bread and forget to eat them. Our house is gone. The lot remains ours. When I reclaimed the property and had it surveyed, all the trees were cut, except for one that, according to the old man who oversaw the cleanup of the yard, was enchanted. When I walked to the edge of the property, I saw that one tree was still standing: the atemoya tree. That was the true enchanted tree. Memory and not magical trees is the real enchantment. A few blocks from our home was a neighborhood, which was called “Moro-moro.” The place would be flooded when it rained hard and when there was a surge from the sea. Old men and women talked of Moro pirates and marauders. I imagined huge boats raiding the place and taking children as slaves. My grandmother, Emilia, forbade us to go to that place. She was worried we would get sick from the dirt. But, I also thought she was afraid we would be kidnapped and turned into boy-slaves by the Moros still hiding in the small islands around us. When my mother reached the age of 89 and her memory was failing, we would talk to her and ask her to tell us about her childhood in Ticao. One day, one bright day in her mind, she recalled a dance near the “Moro de contención.” The term made me sit up. Where was that? She said at Moro-moro. I did not anymore ask her the meaning of the name of the place. I searched the Internet and discovered the words, “muro de contención,” a name for “retaining wall” or “barriers.” Indeed, that place was where the sea entered and, by the time we were children playing, the barriers and walls had disappeared. Still, in my memory, I retained

the images of pirates and intrepid sailors pillaging the village near the home of my childhood. My grandfather, Elpidio A. Genova, was the first sanitary inspector for the entire island of Ticao. Obsessive about cleanliness and sanitation, he ordered, without telling us all, the bakers (there were only two actually) in the town not to sell us those colorful pies and cakes. He believed that those pastries were recycled from breads that were about to go stale. When we ran errands to buy bread, we were instructed to tell the bakers that we were Elpidio’s grandsons. That was the signal that the baker should wrap the bread in clean, unmarked paper and not in recycled newspaper, magazine and komiks paper. Our home was right behind the church. The church did not have walls then; instead it had these tuba plants. We would remove its wide leaves and insert tiny sticks through its stem so we could use them as planes for air battles. At night, those leaves created dark shadows, a setting for the many stories of my grandmother. One of these was the night they saw a dark horse gallop out of those leaves and into the darkness, leaving in its wake three young girls who fainted. She was one of those. When the old convent of the church was renovated, my grandmother regaled us with tales of ghosts and headless priests. Her theory was the spirits from the convent had sought shelter in our home as temporary, informal settlers. Life in the island, in that town, was simple. At night, the bakers would start selling pan de coco, a bread with sweetened grated coconut as fillings. With the coconut plentiful in the island, the fillings for this bread was plentiful, first-class. Lovers on the pretext of simply buying snacks would use the pan de coco as a sweet excuse. In the darkness of the plaza, with a tiny Rizal hovering over the Spanish cannons, lovers would bring the bread and forget to eat them. Little boys would lurk outside the steel matting that was used as perimeter fence of the plaza, with many of them growing into men before the waning of the full moon.

Our common vocation and mission Rev. Fr. Antonio Cecilio T. Pascual

SERVANT LEADER

“Blessed are the peacemakers, they shall be called sons and daughters of God.” —Matthew 5:9

M

y dear brothers and sisters in Christ, we are now in the midst of a storm where our faith is being attacked by the enemies. A tirade was being thrown upon us that challenged the strength of our faith in Almighty God. However, as what Catholic Bishops’ Conference of the Philippines President and Davao Archbishop Romullo Valles, DD, said, “Our enemies in this world are not fellow human beings, not ‘flesh and blood’ [Ephesians 6:12].” Those people who condemn our faith and religion, those people who don’t believe in God, and those

people, who kept on attacking us using guns and bullets, are not our enemies that we need to fight because “we do not fight our battles with guns and bullets, and we do not seek protection from those who might wish to harm us by wearing bulletproof vests.” Our real enemy is the darkness that is trying to overcome our soul

because “the battles that we fight are spiritual.” This is not a battle that needs violence in order to win, but rather it is a battle that needs peace and faith.   “In these times of darkness, when there’s so much hatred and violence, when murder has become an almost daily occurrence, when people have gotten so used to exchanging insults and hurting words in the social media, we admonish the faithful to remain steadfast in our common vocation and mission to actively work for peace.” Let us all remember as “sons and daughters of God” that peace is our common vocation and mission, and that the peace of God is “never the peace of compromise or capitulation to evil; it is also not about the absence of conflict and turmoil,” but rather it is “a peace that transcends all understanding, will guard our hearts and our minds in Christ Jesus [Philippians 4:7].” “There is nothing that can calm us down in these turbulent times

There were no phones in the town of San Fernando when I was growing up, but there were telephone poles. They were set up by American forces when they used the island as a refueling station and headquarters away from the SamarLeyte region. The story, though, is that during the war, giants stood with their legs spread to hide the island from Japanese. There were days, I think, when the giants did not do this because my grandfather had stories of Japanese staying for a day in the island and having their fill of buko and its juice. The Facebook postings from someone who calls himself “Da Kalabidong,” an alias taken after the name of the huge species of bats, show a fancy store, which sells products one finds in big cities. The Roro vessels from Bulan, Sorsogon, have allowed some people to bring their cars and other vehicles to the island, introducing for the first time pollution and wealth. Things have changed. There are things that never change. During the last days of our home, when it was rented out to relatives, it developed quite a reputation. On nights, when the moon was full, and young men and women were out to buy and break bread between them, some daring souls spoke of stalking a lovely woman walking slowly, almost floating beautifully. She would walk past the church and move to the direction of our home. She would walk into the gate, climb up, linger on the porch, look up to the sky as if eating the light from the moon. This would happen even when there were no more occupants in the house. She was our White Lady. She lived in our home, Jun. In the place of my birth, in one of the rooms where I was born, in the living room where the afternoons were preludes to snacks of breadfruit from the tree that perhaps housed some parrots, there was haunting, there was enchantment, there was a spirit that lived. Do I remember the island? I do not remember the island because I have never forgotten it.

E-mail: titovaliente@yahoo.com.

except the quiet recognition of Him who assured us of His abiding presence—‘Be not afraid; it is I!’” (Matthew 14:27) Let us not be afraid to stand and profess our faith and be united as one “Catholic Faithful Community” that “always strives to bring love where there is hatred, pardon where there is injury, faith where there is doubt, hope where there’s despair, light where there is darkness and joy where there is sadness.” May the Almighty Father protect us in this battle of spirituality and give us strength to speak about our faith through our Lord Jesus Christ. 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.


2nd Front Page BusinessMirror

A12 Friday, July 13, 2018

WPS issues poll: Filipinos for more aggressive stance By Cai U. Ordinario

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@cuo_bm

ILIPINOS want a more aggressive stance when it comes to issues surrounding the West Philippine Sea, according to the results of a Pulse Asia Survey.

In a forum on Thursday, Pulse Asia President Ronald D. Holmes said 73 percent of respondents agreed that “the Duterte administration should assert our right and protect our territorial sovereignty in the West Philippine Sea as stipulated in the 2016 decision of the Permanent Court of Arbitration.” “In general, if it’s against all other issues, defense of the territory is less important compared to inflation,” Holmes told the BusinessMirror. “But if you probe into the specific issue [defense of territory], we take that the action should be more assertive.” Based on the data, of the 73 percent, some 46 percent of respondents “strongly agreed” with the statement and 27 percent “somewhat agree” with the statement. Around 17 percent said they

A man tries to remove a tarpaulin banner with the words “Welcome to the Philippines, Province of China” that was hung from an overpass on Thursday, in Manila, Philippines. Similar banners were seen in Manila on Thursday, which coincided with the second anniversary of the United Nations Permanent Court of Arbitration’s decision upholding the Philippines’s territorial rights on some islands, shoals and reefs in the disputed Spratly group of islands in the South China Sea. The decision was shelved by President Duterte and was never recognized by China. AP/Bullit Marquez

may agree or disagree, while 7 percent disagreed. Of those who disagreed, 4 percent somewhat disagreed, while 3 percent strongly disagreed. Holmes said this aggressive stance includes “filing a diplomatic protest, strengthening our military capability, strengthening military alliance.” Based on the data, around 36 percent of respondents said the government should file a diplomatic protest against China and emphasize the decision of the Permanent

SOUTHWEST MONSOON AFFECTING THE COUNTRY as of 4:00 pm - July 12, 2018

Court of Arbitration. Some 22 percent said the Philippines should strengthen its military alliance with other countries, such as the United States, Japan and Australia. The data also showed 16 percent of Filipinos want the government to strengthen its military capabilities to protect the country’s territories. 

Befriending China

However, around 21 percent of respondents said the government should continue on its current ac-

tion of befriending China to avoid conflict between the Philippines and China. “I think it says there that 73 percent of Filipinos want the arbitral ruling to be enforced. It’s [the] huge majority telling the administration to enforce the ruling,” Acting Chief Justice Antonio T. Carpio said. “They [the Duterte administration] should listen to the people.” Meanwhile, Pulse Asia also asked their respondents which countries or organizations they trusted the most. The results of the survey showed China was not among the most trusted countries by Filipinos. Data showed only 17 percent of respondents trusted China.  It was the same with Russia, which the Duterte administration is also trying to expand trade and diplomatic relations with.  “My understanding from the very start of this administration is that the government is trying to expand its alliances and not depend on a single one.

www.businessmirror.com.ph

TRADE TENSIONS A RISK TO ECONOMIC GROWTH OF REGION: A.P.E.C. UNIT

T

R ADE tensions could undermine the region’s economic growth, but there is still time to prevent any irreversible damage to the regional economy, the Asia and the Pacific Economic Cooperation (Apec) Policy Support Unit said on Thursday. Should protectionism continue, this could increase costs for businesses and consumers, as well as lead to lower wages and job losses across the Apec region. This is due to the high integration of production and supply chains in Apec, the Unit said in a statement. “We are not yet at a point of no return. There is still room to avoid potentially damaging shocks due to escalating tariffs and other trade restrictions,” Apec Policy Support Unit Director Denis Hew said.  However, he added, “this will require sustained efforts to achieve policy solutions that ensure robust and inclusive trade flows.” Since January 2018 China and the United States have been increasing tariffs against each other. The US imposed an additional duty of 25 percent on $50 billion worth of imports from China.  Tariffs for $34 billion worth of the goods took effect last Friday, July 6; while higher duties envisioned for $16 billion worth of products are up for review.  China, for its part, plans to impose additional tariffs on $50 billion of American goods, including beef, poultry, tobacco and cars. However, the Apec Policy Support Unit said the recent gains in the lowering of tariffs could cushion the impact of any recent increases in tariffs. “The buildup of tariffs is at an early stage and follows decades of tariff lowering in Apec,” Hew said. “It may take time for the knock-on effects to become more apparent among the region’s economies, though a sud-

den and dramatic tariff expansion could change all that.” Apec said the average tariffs in the region fell to 5.5 percent in 2016, from 16.9 percent in 1989, when the Apec was created. This progress has boosted trade-driven growth, which is on pace to increase 4.1 percent this year and next before consolidating to 4 percent in 2019. Apart from these, Apec said the broad-based growth being experienced by the region could make it easier to move forward with protectionist actions without fear of repercussions. In order to ensure that the region’s trade gains are sustained, the Apec Policy Support Unit recommended deepening market integration and modernizing trade agreements.  These must be accompanied by efforts to modernize trade negotiation, adoption and potential expansion of new regional undertakings.    “There is a legitimate need for policy to go further to enable more people to capitalize on trade and realize greater inclusive growth in the Apec region,” said Emmanuel San Andres, an analyst with the Apec Policy Support Unit. “The best way to level the playing field is to lower, not ra i se, t rade ba r r iers t h at hurt the poor and vulnerable the most,” San Andres concluded. “Giving people the capability to access growing economic opportunities and leveraging new technologies for the benefit of all—this is the future of inclusion in Apec and beyond.” Trade and sectoral officials from the 21 Apec membereconomies will convene in Port Moresby, Papua New Guinea, from August 4 to 20 to address parallel trade challenges, as well as new avenues to improve business and work force participation in trade through technology. Cai U. Ordinario

See “WPS,” A2

DBM urged: Give LGU ‘back pay’ from the IRA Continued from A1

Management (DBM) to work out a plan on  how the full IRA due LGUs since 1992—based on the SC ruling—can be given out to them. Villafuerte, citing estimates by Batangas Gov. Hermilando I. Mandanas and former Senate President Aquilino Q. Pimentel Jr., said in a statement the IRA based on all national taxes that were withheld from LGUs amounts to about P800 billion from 2010 to 2016 alone.    

Federalism

Meanwhile, Villafuerte said this landmark ruling would help the national government in boosting the economy of LGUs once the country commences the shift to a federal system of government. As then-chairman of the League of Provinces of the Philippines —the organization of the country’s governors—during the former Arroyo administration, Villafuerte was a staunch backer of Mandanas and the late Bataan Gov. Enrique Garcia Jr. in advocating the automatic allocation of the LGUs’ IRA as so provided in the 1987 Constitution. Mandanas first filed a petition

on this IRA share of LGUs during the Arroyo presidency and, as a Batangas congressman, filed another case before the SC under the Aquino administration, calling for the immediate release of the IRA back pay of local governments. “We call on the DBM to come up with a viable plan on how the IRA back pay could be efficiently distributed immediately  to LGUs,” he added.  “A much higher IRA share would certainly boost the fiscal autonomy of LGUs ahead of the imminent switch in government structure from the presidential to the federal system,” said Villafuerte. He said one key ingredient for the subsequent success of the federal shift is the greater fiscal autonomy of local governments to chart their respective development programs and adequate financial resources to bankroll their own projects designed to spur local economic growth. 

Long-delayed

Meanwhile, Senior Deputy Minority Leader Lito L. Atienza of

Buhay welcomed the SC ruling, calling it a long-delayed interpretation of the constitutional guarantee on local autonomy.   “As it is, LGUs only get their 40-percent share from national internal revenue taxes,” Atienza said. Section 6, Article X of the 1987 Constitution states that local government units shall have a just share, as determined by law, in the national taxes which shall be automatically released to them. “LGUs don’t get any share at all from other taxes collected.  With the implementation of the provisions of the Local Government Code, national functions such as those on health services have been devolved to LGUs. However, previous presidents opted to devolve the functions of several departments but refused to share the revenues with the LGUs. They still do not have fiscal autonomy. This is also the reason why complaints  continue to hound LGUs over their perceived failure to provide better services to their constituents,” said Atienza. 

Businessmirror July 13, 2018  
Businessmirror July 13, 2018  
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