The decision will “give countries with a common interest in international norms something to point to and to rally around.”—Leiden University professor of political economy in Asia Jonathan London, on the international arbitration ruling rejecting China’s claims to large swaths of the South China Sea, calling it a “transformative moment” in the region. AP
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“As a nation, we must sit down. Why will we kill each other?”— President Duterte, on his plan to open peace talks with two large Muslim rebel groups in the southern Mindanao region, homeland of minority Muslims in the largely Roman Catholic nation. Duterte’s plan includes shifting to a federal system of government that would give more autonomy and resources to impoverished regions like Mindanao. He called on Muslims to back his efforts. AP
“China’s territorial sovereignty and maritime rights and interests in the South China Sea shall, under no circumstances, be affected by those awards. China opposes and will never accept any claim or action based on those awards.”—The Chinese government, rejecting an international tribunal’s ruling that China’s claim of much of the South China Sea has no legal basis. AP
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Thursday, July 14, 2016 Vol. 11 No. 278
Businessmen favor Con-con for Cha-cha
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By Catherine N. Pillas
@c_pillas29
ocal business groups have thrown their support behind the creation of a constitutional convention (Con-con) to review and amend the 1987 Constitution, saying it would protect the process of changing the Charter from “vested interests.”
INSIDE
the berlin pass: the travel choice for peoplewatcHers and pavementpounders
Continued on A2
Con-con requires the election of delegates to deliberate on the issue. This provides a more equitable representation from various sectors of society.” —Barcelon
P25.00 nationwide | 4 sections 28 pages | 7 days a week
Why not Teddy Locsin Jr.
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free fire
SSOCIATED Press reports the unthinkable: a Philippine head of state actually speaking straight on controversial issues. But even President Duterte’s closest friends think he should zip it. What do you think? But first listen to what he says.
In a speech to Muslims at the end of Ramadan, Mr. Duterte said: “It is not that the Middle East is exporting terrorism to America, America is importing terrorism…. They forced their way into Iraq; look at Iraq now. Look what happened to Libya.” Continued on A11
Life
LOPEZ TO SQUEEZE MORE REVENUE FROM MINERS
D1
By Jonathan Mayuga
BSP CITES PARTNERS
health&Fitness
Ivan Reitman to ‘Ghostbusters’ haters: Wait and see
Amando M. Tetangco Jr. (right), chairman of the Monetary Board (MB) and governor of the Bangko Sentral ng Pilipinas (BSP), chats with Valentin Araneta, MB member and chairman of the board of judges, as they present the citations to select institutions at the 2016 Awards Ceremony and Appreciation Lunch for BSP Stakeholders, with the theme “Sustained Partnership, Sustained Economic Growth,” at the Assembly Hall, BSP Complex, Manila. Related story on B4. ROY DOMINGO
China finds ally inTaiwan’s new leader in rejecting sea-row ruling
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hina and Taiwan are finding common ground, after an international court dismissed their shared claims to more than 80 percent of the South China Sea (See related story on A6-A7). Taiwanese President Tsai Ingwen sent a naval frigate to patrol the disputed waterway on Wednesday, to show the government’s “determination” to defend its national interest. The order came hours after the Permanent Court of Arbitration found China’s—and therefore, Taiwan’s—claims to much of the area have no legal basis.
PESO exchange rates n US 47.3940
Specifically, the court found the largest natural feature in the contested Spratly Islands, the Taiwanese-held Itu Aba, was a “rock” rather than an island, and didn’t qualify for a 200-nautical-mile (370-kilometer) exclusive economic zone. The frigate’s planned patrol included a resupply stop at the feature, which Taiwan calls Taiping, a defense ministry spokesman said. The decision to deploy the warship could further escalate tensions in the area after the arbitral tribunal ruling. China has said it doesn’t recognize the court’s juris-
diction, and warned on Wednesday it may yet seek to set up an airdefense identification zone over disputed waters. The ruling, resulting from a challenge brought by the Philippines, invalidated China’s “ninedash line” claim. China’s assertions cross over with those from countries like Malaysia, Vietnam and the Philippines, and are based on a map created by Taiwan’s Republic of China government in 1947. Taiwan has administered Itu Aba since the 1950s. See “China,” A3
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SIDE from her determination to push for environmentally sound and responsible mining industry, Environment Secretary Regina Paz L. Lopez now also wants to squeeze revenue from mining companies some more. Lopez said she is in favor of rewriting the Philippine Mining Act of 1995 to increase the government’s and communities’ share in mining profit and, possibly, ban open-pit mining method. The amendment, she said, should make mining companies pay for the precious metals and other minerals they extract, and give more share from mining profits to the communities hosting their operations. Lopez earlier said, as secretary of the Department of Environment and Natural Resources (DENR), she will not allow new mining projects, even if mining companies are willing to pay more taxes, if the operation will cause environmental destruction and suffering to communities. Asked what amendment she has in mind, Lopez said: “More money should go to the communities directly. As [in] much more!
And they should pay for all the minerals they get from our soil, some of which are precious, not just the nickel,” she said. Lopez also reiterated that she is not in favor of open-pit mining, saying “it wreaks [and cause] havoc on our islands.” Interviewed on dzMM on Tuesday, Lopez said the Philippine Mining Act of 1995 is an unfair law and favors mining companies more than the people. Lopez is skeptical on mining companies’ claim that the sector is giving the economy a boost through its various corporate social responsibility (CSR) projects, as well as the mandatory social-development management program (SDMP). She noted that of the P35-billion net income of mining companies, P29 billion goes to mining companies and only P6 billion goes to the government. Out of the P6 billion, people in host communities receive crumbs, “like almost nothing.” Antimining groups under the Alyansa Tigil Mina (ATM) welcomed Lopez’s recent policy pronouncements on mining. Jaybee Garganera said in an interview that they support Lopez’s moves to immediately conduct an audit of all mining projects, a
n japan 0.4527 n UK 62.7686 n HK 6.1097 n CHINA 7.0812 n singapore 35.2136 n australia 36.1190 n EU 52.4272 n SAUDI arabia 12.6374
Continued on A2
Source: BSP (13 July 2016 )
A2 Thursday, July 14, 2016
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Businessmen favor Con-con for Cha-cha Continued from A1
The Philippine Chamber of Commerce and Industry (PCCI) and the Federation of Philippine Industries (FPI) said the Con-con is “equitable and broad-based.” “Con-con requires the election of delegates to deliberate on the issue. This provides a more equitable representation from various sectors of society,” PCCI President George T. Barcelon told the BusinessMirror. “With a constitutional assembly [Conass], there’s more of a propensity [to protect] the vested interests of members of the
two houses of Congress. And a contentious issue is whether the two will vote as one or separately,” Barcelon added. While the Conass may be cheaper for the government, FPI Chairman Jesus L. Arranza said the “integrity of the process could be questioned.” Management Association of the Philippines President Perry Lim Pe agreed with Barcelon and Arranza, saying the Con-con is “a better platform for a democratic exercise.” “Con-con will have the people’s mandate, whereas the Con-ass involves only the PDP-Laban super majority coalition with the Liberal Party, Nacionalista Party, National People’s Coalition, LDP, UNA and
Pwersa ng Masa,” Pe said. “Also, there will be lesser conflicts of interests in terms of various issues, like term limits, antidynasty, extent of regional/federal power versus central/national power, and extent of economic restrictions to be lifted,” he added. Even before the start of the 17th Congress, lawmakers and other sectors have clamored for a review of the Constitution. Outgoing Senate President Franklin M. Drilon filed a resolution calling for a concon to determine if the 1987 Constitution is “attuned” to the country’s needs. Davao del Norte Rep. and presumptive
House Speaker Pantaleon D. Alvarez—a close ally of President Duterte—also filed House Concurrent Resolution 1, which also called for a Con-con to jump-start the shift to a federal form of government. Outgoing House Speaker Feliciano R. Belmonte Jr. refiled the Resolution of Both Houses 1, seeking to amend the economic provisions of the Constitution to lift foreign participation in land ownership, public utilities, natural resources, media and advertising. Negros Occidental Rep. Albert Benitez filed a resolution that called on the House and the Senate to sit as a Con-ass to amend
Lopez to squeeze more revenue from miners moratorium on mining applications, and her personal position against open-pit mining. “Our alliance also believes that Secretary Lopez made the correct call in stating publicly that we need a new mining law,” Garganera said. “We recommend to Secretary Lopez to ensure that the audit is not limited to technical and operational matters of mining projects, but also look into social, economic, political, health and gender impacts of these mining projects to the host communities,” he added. Garganera a lso said it is cr itica l that pending legal cases or complaints against the mining companies and their operations are investigated as part of the audit. ATM is supporting the passage of the proposed A lternative Minerals Resources Bill, or the Philippine Mineral Resources Act, pending in Congress,
which frames the legal and operational definition of responsible mining. Last week Lopez signed DENR Memorandum Order 2016-01, which formalizes and sets the guidelines for a mining audit and a moratorium on the approval of new mining projects, which triggered howls among mining industry’s big players belonging to the Chamber of Mines of the Philippines (COMP). COMP Vice President for Legal and Policy Ronnie Recidoro said large-scale mining is already heavily regulated and are operating in accordance with existing mining and environmental laws, as against the illegal small-scale mining operations that are more destructive to the environment. He said Executive Order (EO) 79 had already, in effect, ordered a moratorium on the approval new mining projects and even subjected mining operations
under a periodic review. The results of the review, he said, has not been made known by the DENR’s Mines and Geosciences Bureau (MGB), challenging the DENR chief to first release the findings of the MGB under such review of mining operations. On July 7 a preventive-suspension order was jointly issued against Benguet Corp., Nickel Mines Inc. and Zambales Diversified Nickel Corp. by three regional officials of the DENR in Central Luzon—Francisco E. Milla Jr., the DENR regional executive director; Lope O. Cariño Jr. of the MGB; and Lormelyn E. Claudio of the EMB. The order, in effect, halted all large-scale mining operations in Zambales, a declared mineral-reservation area. On July 1 the provincial governor of Zambales issued EO 1, stopping all mining operations.
Local government units have power and authority over small-scale mining, while large-scale mining falls under the national government through the DENR’s MGB, or the Mining Industry Coordinating Council. On Tuesday the newly formed Philippine National Coalition for Artisanal and Small-scale Mining appealed to President Duterte and Lopez to fix the problems besetting the artisanal and small-scale mining (ASM) sector. Appealing for recognition, they said the ASM sector has been neglected for a long time as they appeal for government to “legalize” their operations. Under EO 79, small-scale mining should be done within a declared minahang bayan, but this is not strictly enforced. A minahang bayan, however, is established by the DENR-MGB and has to be approved by the DENR chief upon the rec-
the Constitution. Benitez is in favor of the shift to federalism. The Con-con and the Con-ass are just of the three paths to amend the Constitution. Delegates to the Con-con are chosen by the electorate, while senators and congressmen constitute the Con-ass. Another option is via a people’s initiative. wherein amendments can be introduced through a petition of at least 12 percent of the total number of voters. Allies of President Duterte in Congress said earlier that they want to fast-track the country’s shift to a federal form of government. Mr. Duterte said he wants to amend the Constitution via a Con-con.
Continued from a1
ommendation of the Provincial Mining Regulatory Board (PMRB). The PMRB issues permit to small-scale mining operators, which is done by smallscale mining firms and cooperatives, although EO 79 has now limited small-scale mining to cooperatives. There is still an undetermined number of artisanal and small-scale miners engaged in gold-panning and salvaging of gold in rivers, mostly in gold-rich areas. There are only five declared minahang bayan in the Philippines. These are in Barangay Maputi, Banaybanay town in Davao Oriental; Barangay Waso, Lorente town in Eastern Samar; Buenavista, Quezon; and two others in the provinces of Dinagat Island and Agusan del Sur. The MGB is eyeing to declare minahang bayan for each of the 16 regions, where small-scale miners can operate under existing laws.
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Thursday, July 14, 2016 A3
DOT unit shifts China marketing tack to high-end, expats, ‘indie’ travelers
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By Ma. Stella F. Arnaldo Special to the BusinessMirror
HE Tourism Promotions Board (TPB), the marketing arm of the Department of Tourism (DOT), has changed its strategy to attract more visitors from China, favoring more steady, high-end tourists, instead of group tours.
This developed as concerns arose on a possible back lash from the Beijing government on the heels of the recent ruling by The Hague’s Permanent Cou r t of A r bit r at ion r u l i ng denying China its alleged historical rights over islands and atolls in the West Philippine Sea
(South China Sea). Although the Beijing government has not issued a travel ban to the Philippines, some resorts are reporting anxious Chinese tour ists who wa nt to ca ncel their bookings. I n a n i nter v ie w w it h t he Busi n e ssM i r ror , T PB COO
D om i n go R a mon E ne r io I I I said, on his agency’s end, “we do not have reports to this effect yet [cancellation of trips by Chinese tourists].” But he stressed that the TPB “has already adopted a marketing strategy that focuses more on MICE [meetings, incentives, conferences and exhibitions], high-end FIT [free independent traveler], and expat markets in Tier 1 cities [Shanghai, Guangzhou, Beijing], instead of group tours and charters that are primarily affected by cancellations or travel bans.” FIT travelers are usually 35 years old and above, have aboveaverage incomes, and usually travel in small groups or as couples, shunning the usual tour packages in destinations. Enerio explained: “Our intention [in adopting this strategy] is to ensure that revenue streams continue to grow steadily, to com-
PPA chief maintains 9-percent revenue growth goal for 2016 P ORT revenues should grow by 9 percent, notwithstanding a dismal performance in the first five months of the year, the newly appointed chief of the state-owned port body said on Wednesday. Over lunch, Philippine Ports Authority (PPA) General Manager Jay Daniel R. Santiago reported that the PPA booked P5.41-billion revenues from January to May, which is 1.84 percent lower that that of last year. He attributed the decline to lower earnings derived from storage, which was at P366.37 million, from P805.62 million. Despite the decline, Santiago said the PPA will stick to its 9-percent revenue growth. “It’s really not just simply a matter of improving the revenues. It’s a matter of improving our bottom-line,” Santiago said. He did not elaborate. Net income of the state-owned port body was at P3 billion as of end-May, higher by a notch versus last year due to the P115-million drop in expenses during the said period. Santiago has issued a marching order to all officials and employees to be transparent at all times and prioritize clients at any given time.
He also ordered PPA officials and employees to refrain from holding meetings during office hours or from 8 a.m. to 5 p.m., so as not to disrupt the delivery of service to their clients. “I am also ordering the review of the current permitting processes of the agency and will personally look for ways to further reduce the burden in getting permits from the PPA,” Santiago added. Aside from these, Santiago said he is also bent on infusing a culture of safety in port operations, as well as value-added services in the different ports for the convenience of passengers, as well as better efficiency and productivity for cargo operations. The new PPA chief is also personally asking the private-sector service providers in the different ports to fix all defective facilities and put it in optimum level in all their controlled ports at all times to reduce unnecessary expenses that is oftentimes a pass-on cost resulting to higher ticket prices and logistics cost. “We are trying to rationalize everything that will translate to the convenience of passengers, cargo owners, logistics service providers and also to all PPA personnel,” Santiago said. Christian Jessie Desoloc
China. . . Continued from A1
refusal to affirm the contention the two sides represent “one China.” Tsai’s Democratic Progressive Party officially supports independence for Taiwan. New York University law Prof. Jerome Cohen, a specialist in Chinese law who counts Ma among his former students, said Tsai was struggling to “adjust to an uncomfortable situation.” “Today’s response openly rejecting the decision is a big mistake and different from what even Ma would have done,” Cohen wrote in a blog post on Tuesday. “Tsai will be criticized at home for following Beijing’s lawless line at the same time that Beijing was responsible for excluding Taiwan from participation in the arbitration.” Taiwan’s Coast Guard Administration also stations vessels at Itu Aba, and another WeiShin frigate arrived at the feature late on Tuesday, the agency said. Defense stocks were mixed in Wednesday trading on Chinese exchanges. AVIC Aircraft Co. and AVIC Helicopter Co. fell 0.8 percent, while Jiangxi Hongdu Aviation Industry Co. slipped 1 percent. AviChina Industry & Technology Co. rose 1.4 percent, and AVIC Jonhon Optronic Technology Co. gained 3.1 percent. Tsai Ing-wen’s position “is really hard” because the claims of Taiwan and China are practically identical, said Nick Bisley, a professor of international relations at La Trobe University in Melbourne. “How you chart a course that maintains a Taiwanese position without sounding like you are China is very tricky. ” Bloomberg News
Chinese Vice Foreign Minister Liu Zhenmin on Wednesday praised Taiwan’s efforts to defend rights shared by the one-time civil war foes. “The arbitration has damaged the rights of all Chinese, and it’s the common interest and responsibility of both sides to protect the maritime rights of the South China Sea,” Liu said at a briefing in Beijing. He accused the tribunal judges in the case of bias and a lack of common sense. While China refused to participate in the tribunal proceedings, it did submit a paper outlining its position and worked behind the scenes to lobby the court, according to the decision. Taiwan, under former President Ma Ying-jeou, filed a brief to the panel stating a case for an exclusive economic zone around Itu Aba, citing its ability to support life. In a statement echoing China’s own response on Tuesday, Tsai said The Hague ruling had no binding effect on Taiwan and undermined her government’s rights. The former law professor, who ousted Ma’s Nationalist party in a landslide election in January, called for multilateral talks to promote stability in the region. The remarks put Taiwan’s new leader at odds with its chief security protector, the US, which has called on China to abide by the ruling. They also provide a rare area of agreement between Tsai and Communist Party leaders, who have cut off communications over her
632,947
The number of Chinese tourists the Philippines is targeting to attract this year pensate for a possible decline in growth rates.” In 2012, for instance, diplomatic issues between the Philippines and China resulted in only 4.3 million visitor arrivals, impacted by a dramatic slowdown in Chinese tourists. When a travel ban to the Philippines was implemented by Beijing in September 2013 due to a spate of killings of Chinese citizens in the country, the impact was immediately felt, resulting in a 50-percent drop in Chinese visitors the next month. This year the TPB is targeting
Chinese visitor arrivals to reach 632,947 and 729,715 in 2017. In 2015 arrivals from China grew by 24.3 percent to 490,841. Official reports show Chinese arrivals from Januar y to April 2016 at 238,524, up some 89 percent from the same period last year. The DOT and the TPB consider t he C h i n a m a rket one of t he h i g h - g row t h sou rces of tourists, sometimes edging out Japan in ranking dur ing certain months. For its part, Philippine Airlines has yet to receive any cancellations on any of its chartered or scheduled flights from China. In a text message, PAL President Jaime Bautista said: “So fa r, we don’t h ave c a nce l l ations of bookings and charters from China.” In the case of the Henann Group of Resorts, Karl Chusuey, vice president for marketing, said
they are receiving feelers from some Chinese guests expressing anxiety over a possible travel ban by their government. “At the moment, there are some that would like to cancel because they are worried of a possible travel again, but no mass cancellation yet, since there is no travel ban,” he said in a text message. Fortunately, the resort group’s guests are still composed mainly of locals and Korean travelers. “Total in Boracay is still Koreans by a big difference. The Chinese are second in some properties, not all. Like in Henann Regency, No. 1 market is locals and not Koreans,” Chusuey said. The Henann Group has five resorts in Boracay, and one in Bohol. Two more resorts are in construction or in the planning stage in Boracay and Palawan. Cebu Pacific Airways has yet to respond as of presstime.
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Asean
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Transport-connectivity Asean-EU Perspective
HENRY J. SCHUMACHER
Editor: Max V. de Leon • Thursday, July 14, 2016 A5
Ex-soldier charged in shooting of Cambodian government critic
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n efficient and integrated transport network, measures for trade facilitation and more streamlined customs procedures, as well as improved connectivity, are vital building blocks for Asean’s economic integration and competitiveness. European business strongly supports the objectives of the Asean Logistics Roadmap and the Master Plan on Asean Connectivity in contributing to the Asean Economic Community, through liberalization and facilitation measures in the area of logistics services and the creation of the integrated Asean logistics environment, including for maritime services. However, market access and foreign-ownership restrictions hinder the inflow of trade and investment, and limit the growth of the logistics industry. The Asean Logistics Roadmap and other Asean agreements include procedures for facilitating trade, simplifying and harmonizing cross-border procedures, streamlining of processes and automating customs procedures. Improved security procedures in the global supply chain are important. However, cargo security schemes in many countries consist of inappropriate and complex requirements and multiple, uncoordinated security programs, with little contribution to security. The European Union (EU) logistics industry therefore advocates a practical, risk-based approach that balances security and trade/investment objectives. Key issues and recommendations:
Asean economic integration
European business believes that effective public-private sector engagements in the policy formulation and implementation would be mutually beneficial. The industry therefore supports regular formal policy dialogues on logistics between the private sector and government.
Market access
Restrictions on logistics providers not only adversely affect the efficiency of logistics companies, but also undermine the country’s economic competitiveness. Appropriate steps taken to remove restriction and facilitate cross-border movement of shipments will encourage trade and investment, improve productivity and lower business costs. The EU industry urges Asean member-countries to commit a clear target toward full foreign ownership in all logistical sectors, including supporting services such as customs brokerage. Market access is vital for regional economic integration and connectivity. Technical barriers to trade and services need to be avoided by governments.
Cross-border transport
Expedite ongoing efforts to have one common transit system, including customs, transportation and transit licensing. These transit procedures should be simplified, for example, in reporting requirements or paperwork. Common transit procedures should be available and applicable to intermodal and interstate transport, and border crossings should be open on a 24/7 basis. Important in this context is that the Philippine Customs does not improve overtime charges again as (unfortunately allowed in the CMTA); business was extremely happy when the Aquino administration decided to provide 24/7 services for customs, immigration and quarantine at government’s expense!
Maritime integration
To facilitate trade and economic development within Asean, the EU logistics industry urges Asean member-countries to liberalize the maritime transport sector by allowing international shipping companies to carry out international relays and transport international cargo. The industry encourages Asean to relax cabotage laws and allow international shipping companies to operate within domestic maritime, to the benefit of local and Asean business. In the Philippines, we are glad that international ships can carry international cargo to and from various ports in the Philippines. As a step toward Asean’s commitment to an integrated and competitive maritime transport, member-countries should exercise nondiscriminatory procedures in maritime trade and services within Asean countries.
Customs procedures
Simplify customs documentation procedures, adopt electronic data interchange for customs declaration and clearance, adopt risk-assessment systems and rely increasingly on pre-arrival clearance and post customs audits. Implement the WCO immediate Release Guidelines and encourage the application of standardized trade data and documents for trade facilitation. Implement 24/7 operations in major ports, airports and land border crossings with costs carried by the respective governments. Implement the agreed upon Asean Single Window.
Supply-chain security
Security screening should be based on an effective threat-based risk-managed approach with a focus on unknown high-risk customers and the ultimate shipper (without established business history). Businesses with good compliance track records and security practices should be subjected to lower rates of screening. A common approach to supply-chain security would help promote mutual recognition between counties. This includes recognition of the status of Authorized Economic Operator or Regulated Agents within Asean, as well as between the EU and Asean.
Mourners hold a portrait of Cambodian government critic Kem Ley at a funeral ceremony in Phnom Penh, Cambodia, on Wednesday. A former Cambodian soldier was charged on Wednesday with murder in the killing of Kem in a brazen attack that has raised accusations of a political conspiracy. AP
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former Cambodian soldier was charged with murder on Wednesday in the killing of a prominent government critic, a brazen attack that has raised accusations of a political conspiracy.
Oeut Ang faces up to life in prison if convicted of killing Kem Ley, who was shot dead last Sunday in Phnom Penh, Cambodia’s capital. He was arrested after being chased down by police. During interrogation, Oeut Ang told police that Kem Ley owed him $3,000, and that he shot the well-known political analyst and government critic because of the dispute. He also identified himself by the
nickname Chuob Samlab, which in Cambodian means “meet and kill.” Court officials said the nickname would be used in documents for now. Oeut Ang was also charged with possession of an illegal weapon during his appearance at the Phnom Penh Municipal Court on Wednesday. “After questioning, examining the documents and with the evidence present, the prosecutor of Phnom Penh
$3,000
The amount reportedly owed by Kem Ley to the suspect that caused the killing
Municipal Court has decided to charge the accused with premeditated murder and illegal possession of weapon,” said Ly Sophana, a court spokesman. In an interview with The Associated Press on Tuesday, Oeut Ang’s wife said her husband was too poor to have loaned the victim $3,000. She also said he had never mentioned Kem Ley’s name before. She said her husband was a former Khmer Rouge soldier, as well as an ex-government soldier.
Opposition parties and Global Witness, a British activist group whose work was occasionally the subject of Kem Ley’s radio commentaries, have suggested a political conspiracy behind the killing. Kem Ley’s body is being kept at a Buddhist temple until his funeral on July 19 to allow his admirers and friends to pay their respects. Prime Minister Hun Sen, often a target of Kem Ley’s criticism, has promised a thorough investigation into the killing, which came at a time of political tension that began last year with legal and other pressures by the government on the opposition Cambodia National Rescue Party. Kem Ley was widely known because he was frequently heard on the popular Cambodian-language services of Radio Free Asia and Voice of America, US government-funded services that are among the few independent news sources in Cambodia. He was also frequently quoted in the country’s handful of independent newspapers. One of his most recent commentaries was about a report issued last week by Global Witness that alleged that Hun Sen and his family had enriched themselves and kept power through corruption. Kem Ley is the most prominent Cambodian government critic to be killed since trade union leader Chea Vichea in 2004. “This outrageous act of violence must be thoroughly, transparently and independently investigated,” Transparency International said in a statement on Wednesday. It said it is also “concerned at increasing restrictions placed upon civil-society organizations and harassment of activists in the country.” The opposition CNRP also urged the government to appoint independent investigators to solve the killing. It noted that the police had still not found the masterminds behind the killing of Chea Vichea and an environmentalist, Chut Wuthy. Instead, the police have arrested innocent people and coerced them to confess, the party said in a statement. AP
Thai tourism board cuts income target for 2017
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he board of the Tourism Authority of Thailand (TAT) has revised down its target for tourism-related income next year, citing concerns about economic problems and the political situation after the charter referendum. The tourism agency is cutting its income projection for local tourism from 1 trillion baht to 950 billion baht and revenue from overall tourism from 2.89 trillion baht to 2.84 trillion baht. TAT Deputy Governor Sugree Sithivanich said the new revenue figure for local tourism would indicate a 10-percent growth. The TAT board disagreed with an earlier 16-percent growth projection by management for domestic tourism because the board did not see a clear economic recovery. TAT Governor Yuthasak Supasorn said the board wanted promotion campaigns in 2017 to focus more on quality tourists. “For local tourists, we plan to encourage three tourist groups to travel across regions. The target groups are females, young tourists and retirees,” he said. The period of their vacations and the number of their activities must increase to meet the revenue target of 950 billion baht. Tourism-related income from foreign visitors is still expected at 1.89 trillion baht, up by 9.8 percent, based on the projected number of foreign tourist arrivals of 36 million next year compared with 34 million this year. The government will assist with spendingpromotion measures, including a tax reduction for people spending at restaurants and possibly on local products, to boost income
10M
The estimated number of Asean tourists who will visit Thailand next year
for local communities. TAT Deputy Governor Srisuda Wanapinyosak, who supervises the Asia and South Pacific markets, said the TAT expected 10.8 million Chinese tourists to visit Thailand next year. The number will show a 3.8-percent rise from this year and lead to 574 billion baht income, up 9.1 percent from this year. The TAT will also focus more on the Asean market so that the country would not overly depend on Chinese tourists, she said. The TAT expected 9.3 million to 10 million Asean tourists to visit Thailand next year, a number close to arrivals from China. It wanted the Asean market to generate 292 billion baht worth of tourism-related income, showing an increase of 11.3 percent. Australia will pose the greatest challenge for the TAT next year, because the value of the Australian dollar has depreciated by 30 percent and the number of low-cost flights between Australia and Bali rose to 300 a week. Consequently the number of Australian visitors to Thailand will fall in the second half of this year. MCT
TheBroa
Business
A6 Thursday, July 14, 2016
PHL monitoring ripples from favorable By Rene Acosta, David Cagahastian, Bianca Cuaresma, Jovee Marie N. dela Cruz, Butch Fernandez, Lenie Lectura & Cai U. Ordinario
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HE Philippines sword remains in the scabbard, as government officials are monitoring the ripples from an international court’s ruling against China’s claims in the West Philippine Sea (South China Sea). But according to those outside the government, the biggest ripple would be on the country’s trade with the People’s Republic of China. On Tuesday the International Tribunal for the Law of the Sea (Itlos) ruled in favor of Manila by rejecting Beijing’s claim in the West Philippine Sea, saying there is no legal basis for the latter’s “ninedash line.” A day later, local economists warned Philippine exporters they should brace for greater product scrutiny and higher costs when exporting to China in the next three to six months. Former Tariff Commissioner George N. Manzano told the BusinessMirror this could be the likely scenario in the aftermath of the Itlos’s decision on the West Philippine Sea. “We have a free-trade agreement with China through the Asean [Association of Southeast Asian Nations], so they could not increase the tariff,” Manzano said. “What usually happens is they like to ‘retaliate’ or to express their displeasure [by working] on the nontariff barriers, such as the sanitary or safety issues of our agricultural products, [like] bananas or what have you.” Manzano added uncertainties in the aftermath of the ruling could also impact cost of trade. “What will happen also if there is going to be a bit of uncertainty in this region, the trade costs, especially trade financing, will, of course, increase [because there is a] premium [on] risk, so insurance will increase, increasing the cost of trade,” he said. “To what extent, we don’t know yet.” Manzano also said the entire Asean region could suffer higher trade costs for the rest of the year, especially if tensions arise in the disputed waters. He explained even countries like the United States could be affected by these costs given that the West Philippine Sea is a known ship lane or trade route for many vessels. Overall, Manzano said, trade between the Philippines and China and trade through the West Philippine Sea will not stop due to trade agreements. “Barring any untoward incidents, I don’t think there is going to be a [halt in trade] because the FTA [free-trade agreement] will keep it open,” Manzano said. “Besides, it’s [harmonious relations] important for the Philippines because we need China more than China needs us in terms of trade. So we’ll have to look into the nontariff barriers if there is going to be some sanctions against us.”
Trade impact
GREATER scrutiny for products and higher trade costs will slow the country’s export earnings growth in the short term, University of Asia and the Pacific (UA&P) School of Economics Dean Cid Terosa said. This can happen because China is one of the top export markets of the Philippines. Last year China accounted for 10.9 percent of the country’s total exports. Manila’s export earnings for products shipped to Beijing reached $6.393 billion in the January-to-December period of last year. Terosa also said the growth of investments in the Philippines by Chinese firms could also slow during the period. In the first quarter of 2016, investment pledges from Chinese investors reached P190.1 million, or 0.7 percent, of total pledges in the January-to-March period. Investment pledges from Chi-
Tribunal rejects China’s claims An international tribunal rejected China’s claims in the South China Sea in a ruling that also found it had violated the Philippines’ maritime rights by building up artificial islands that destroyed coral reefs and by disrupting oil explorations. DETAIL AREA
China’s claimed territorial waters 200 nautical mi. exclusion zone Disputed islands 500 km
CHINA
500 miles
TAIWAN
VIETNAM LAOS
Hanoi
Hainan
THAILAND
Paracels Scarborough Shoal
CAMBODIA Gulf of Thailand
Spratlys
Singapore
PHILIPPINES
Head goes here BRUNEI MALAYSIA
INDONESIA Source: AP
nese investors last year amounted to P1.455 billion of the P245.215 billion total investment pledges received by the country’s seven investment promotion agencies. “The government should earnestly continue to show magnanimity and goodwill while pursuing firmly what is proper,” Terosa said. “We can show this through the conduct of our import trade relations with China. We should remain as open as we are now to Chinese goods.”
Little effect
SO far, however, the Philippines’s win against China in its arbitration case in the international tribunal has little impact on local financial markets or the economy at large, according to monetary authorities. Central Bank Governor Amando M. Tetangco Jr. said the central bank has been monitoring the markets with regard to the Itlos ruling. “We haven’t actually seen an impact, so far,” Tetangco said. “Looking at the behavior of the markets today [July 13], the conditions here continue to be more affected by developments in the US and Japan.” What the market will be watching is how China is going to react to the decision, Tetangco said at the sidelines of the Bangko Sentral ng Pilipinas’s (BSP) 13th Awards Ceremony and Appreciation Lunch for Stakeholders in the BSP complex in Manila. For his part, Economic Planning Secretary Ernesto M. Pernia said there is a need to assess the situation thoroughly before any action or measures are undertaken. Pernia said the government is studying the decision, China’s response and its impact on the Philippine economy.
Not China
Manila
Sulu Sea
MALAYSIA
Kuala Lumpur
South China Sea
ACCORDING to Tetangco, in the case of the exchange rate, the peso opened stronger on Wednesday
INDONESIA
Celebes Sea Graphic: TNS
compared to the previous day. “And that was because of an improvement in sentiment, given the announced additional stimulus [that] would be provided by the Japanese government,” Tetangco said. “This is being interpreted as being supportive of growth.” “In addition to that the [US] Fed [Federal Reserve] is now seen as not really in a hurry to tighten— and may actually increase interest rates toward the latter part of the year, once,” he added. The governor explained that, “at the beginning of the year, the expectation was four increases” in the interest rates by the Fed. “That has also affected and, in fact, improved the sentiment that led to some strengthening of the peso,” Tetangco said. “So [the] peso is being affected more by developments in the US and Japan.”
Nothing immediate
ON Wednesday Moody’s Investors Service Senior Vice President Marie Diron also said the ruling on claims to maritime rights has no immediate sovereign credit implications for the Philippines or China. “Geopolitical tensions can affect countries’ credit profiles if they are likely to have a negative economic impact or if they entail significant fiscal costs or if they hamper policy-making,” Diron said in a statement on Wednesday. “Per our sovereign methodology, we assess geopolitical strains as posing a very low risk of weighing on sovereign credit trends in China or the Philippines.” The international credit watcher said the ruling does not pose substantial effect on either the country’s economy, budget or policy effectiveness. “Nonetheless, the dispute does highlight emerging geopolitical issues for the two countries and for the region as a whole,” Diron said.
In this July 2015 file photo, the case regarding the Philippines and China on the South China Sea is heard at the Permanent Court of Arbitration at The Hague, the Netherlands. The tribunal ruled in a sweeping decision that China has no legal basis for claiming much of the South China Sea and had aggravated the seething regional dispute with its large-scale land reclamation and construction of artificial islands that destroyed coral reefs and the natural condition of the disputed areas. Permanent Court of Arbitration via AP
Quite complex
ING Bank Manila economist Joey Cuyegkeng said the market has expected the Itlos ruling to favor the Philippines. “The market expects that the decision [would] favor the Philippines. But the issue is quite complex. The market also knows the stand of the Philippines and China,” Cuyegkeng said. “China rejects the jurisdiction of the Court and is unlikely to accept the decision. But both nations have sent signals they would be open to bilateral talks about the contested area.” Still, Cuyegkeng cautioned against being lax. “Meantime, near-term volatility cannot be swept aside,” he said. “We believe that it would be limited and could be fleeting as long as the Philippines and China reiterate [their] willingness to dialogue.” Cuyegkeng also warned that the Itlos ruling “should not unduly create significant sustained volatility” in the local scene.
Security unchanged
VOLATILITY is also not yet felt in military terms as the Department of National Defense (DND) said on Wednesday the Itlos ruling has had no immediate effect on the security situation on the West Philippine Sea. “I think the situation on the ground is the same as before the issuance of the [Itlos ruling],” Defense Secretary Delfin N. Lorenzana said. He added there were no changes in the situation after: “It’s still the same. I think status quo has been maintained by everybody.” Lorenzana said the DND will defer any action in strict abeyance to the orders of President Duterte. He said Mr. Duterte ordered government officials late Tuesday night to thoroughly study the Itlos ruling while waiting for further developments in the aftermath of the decision.
Let us practice restraint. I would suggest we still continue the tack of diplomacy and cooperation with China. At least, now we are on higher moral ground. At the same time, [China should] respect our sovereignty in this particular area.”—Sen. Miguel Zubiri President Duterte also ordered defense and foreign affairs officials to consult with their counterparts from other claimants on the West Philippine Sea, like Brunei, Malaysia and Vietnam. He explained these countries also stand to indirectly benefit from the Itlos ruling. Lorenzana said he hopes that Beijing will observe the maritime ruling. “I hope that China will abide by this because it will be good for the whole region if everybody will follow the rule of law,” he said. “Nobody can just cherry pick the laws that we are going to abide by. We believe in a community of nation and exist side by side harmoniously.”
Consulting allies
HOWEVER, the Itlos, an independent judicial body established by the United Nations Convention on the Law of the Sea, does not have enforcement power, according to Lorenzana. Hence, he said the Philippine government will consult with allies that supported the Philippines in its position at the tribunal. Allies, such as the United States, Japan and Australia, have supported the action of the country in bringing its case before the Itlos. The US military has also patrolled the West Philippine Sea to keep the area open for international navigation and overflights.
On Monday evening, Lorenzana said he received a call from US Defense Secretary Ashton Carter who, he said, reiterated US commitment of support to the Philippines and adherence to the Philippines-US defense agreements. He said Carter also told him that China has assured the US of its restraint before and even in the aftermath of the ruling. Lorenzana said Carter also asked the same assurance from the Philippines. “I told him, of course, we will exercise restraint.”
Setting policy
Lorenzana said, given the Itlos ruling, the DND would craft a policy direction involving the West Philippine Sea. “We are studying what we should do,” he said. “So I cannot answer for now while we are developing the courses of actions and plans for that.” When asked if tensions would arise and lead to a confrontation, Lorenzana said: “You cannot say what will happen in the Ayungin [Shoal] or what not, we still have to study our course of action on the issue.” Days before the UN court issued its ruling, the biggest ever flotilla of Chinese military and paramilitary ships was seen at the Scarborough Shoal since China exercised a de facto control over that
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court ruling on China’s claims in WPS nesto C. Abella said Mr. Duterte and his Cabinet welcomed the favorable verdict and will proceed on the delicate issue with sobriety and restraint. “The ruling was welcome, and the government will proceed with sobriety and restraint,” Abella was quoted in a statement as saying. The UN’s arbitration court sustained the Philippines’ position that China’s nine-dash line claiming most of the West Philippine Sea has no basis under the Unclos. “Having found that none of the features claimed by China was capable of generating an exclusive economic zone, the tribunal found that it could—without delimiting a boundary—declare that certain sea areas within the exclusive economic zone of the Philippines, because those areas are not overlapped by any possible entitlement of China,” the court said.
Energy, finance
THE Department of Energy (DOE) said on Wednesday it would coordinate with the Department of Finance (DOF) in assessing its next step in relation to the favorable Itlos ruling. Energy Secretary Alfonso G. Cusi said the Department of Foreign Affairs (DFA), together with concerned government agencies, will thoroughly study the verdict of the Permanent Court of Arbitration under Annex VII of the 1982 Unclos. “The DOF will be assessing the overall implications of the verdict in coordination with other agencies of the government, among them the Department of Energy,” Cusi said. “The Philippines reiterates its abiding commitment to pursue a peaceful resolution of disputes in the South China Sea and promote peace and stability in the region through diplomacy and consultations.” The DOE is in charge of a program called Philippine Energy Contracting Round (PECR) that allows the government to develop and utilize indigenous petroleum resources under a service contract regime through partnerships with qualified local and international exploration companies. Two of the exploration blocks under PECR5 are close to the Spratly Islands, which are areas under territorial dispute with China. The US Energy Information Administration (EIA) estimates the West Philippine Sea contains approximately 11 billion barrels of oil and 190 trillion cubic feet of natural gas in proved and probable reserves. “The area we are offering in the [West Philippine] Sea is near Palawan,” former Energy Secretary Carlos Jericho L. Petilla said. It was during Petilla’s term when PECR5 was launched. Exploration activities under Service Contract 72, an oil and gas exploration permit covering the Sampaguita natural-gas prospect in the Reed Bank, to the west of Palawan, was suspended by the DOE after the agency declared force majeure on the license. UK-based Forum Energy Plc. has a 70-percent stake in SC 72. Forum Energy is 60.49 percent owned by Philex Petroleum Corp., led by Manuel Pangilinan.
Urging China Filipinos react moments after The Hague-based UN international arbitration tribunal ruled in favor of the Philippines in its case against China on the dispute in South China Sea on Tuesday in Manila. AP/Bullit Marquez
patch of land four years ago. The armada included 10 People’s Liberation Army Navy ships and six Coast Guard vessels. Malacañang welcomed the favorable verdict from the United Nations Permanent Court of Arbitration with a subdued sense of victory. The Palace said officials will proceed with caution on the next steps to take to enforce the ruling. Justice Secretary Vitaliano N. Aguirre II described the Cabinet
meeting last Tuesday night after the promulgation of the arbitration court ruling as a “subdued victory celebration.” At the said Cabinet meeting, Solicitor General Jose Calida briefed the Cabinet members on the arbitration court’s decision, which favored the Philippines’s position on the issue of economic rights over disputed areas of the West Philippine Sea and invalidated China’s claim over areas within
its so-called nine dash line. However, Communications Secretary Martin M. Andanar said the arbitration court’s ruling would still have to be studied carefully. Andanar added an official interpretation would be out within five days. “We shall wait for the Solicitor General’s interpretation of the ruling,” he said. “The decision just came out. So it will still be studied.” Presidential Spokesman Er-
ON Wednesday lawmakers agreed the ball is in China’s hands. Sen. Loren Legarda warned that China’s rejection of the United Nations arbitral tribunal’s ruling upholding Manila’s case will “undermine the primary objectives” of the UN Convention on the Law of the Sea. Beijing’s initial rebuff of the UN’s Permanent Court of Arbitration ruling in favor of the Philippines also prompted Sen. Sherwin T. Gatchalian to call on the leadership of the PROC to “take steps to comply with the ruling laid down by the arbitration court, including the immediate withdrawal of ships
and personnel from Philippine waters and land features.” At the same time, Gatchalian prodded the UN, as well as Manila’s regional allies, to support the Philippines in enforcing its legal rights under the arbitration ruling. “As members of the community of nations, we must all subject ourselves to the wisdom and authority of international law, no matter how big or small our nations may be,” he said. Legarda said in a separate statement that, “as state parties to the Unclos and responsible members of the international community,” both governments in Manila and Beijing “are duty-bound to respect its decision.” Even as she welcomed the “impartial, authoritative decisions rendered by the tribunal,” Legarda voiced hopes “that these will serve as guideposts for the parties in this dispute.” “It serves no valid purpose to further exacerbate the dispute by refusing to heed the decision handed down by the tribunal,” Legarda said, adding that “in the end, such refusal to honor its decision will only undermine the primary objective of the Unclos—and that is to establish a legal order for the seas to promote its peaceful use.” For his part, Sen. Juan Edgardo Angara suggested that the Philippine government “reiterate our commitment to a rules-based and peaceful settlement of disputes.” “All states should refrain from hostile acts in the contested area in view of the ruling,” Angara said, adding, “diplomatic efforts to settle issues will still be very important given the nature of international law.” Angara also voiced confidence that the UN Tribunal’s decision “will be welcomed not just by the Philippines but also by several states comprising the community of nations.” Sen. Panfilo Lacson likewise affirmed the widespread acceptance of the UN ruling favoring the Philippines over China’s rejected nine-dash-line claim. “By no means,” this is not a pyrrhic victory for the Philippines because this [ruling] would lead us somewhere, Lacson said in Tagalog. Sen. Juan Miguel Zubiri urged Filipinos to exercise restraint in rejoicing, following Manila’s victory over Beijing in the UN Tribunal. “Let us practice restraint,” he said. “I would suggest we still continue the tack of diplomacy and cooperation with China. At least, now we are on higher moral ground.” Zubiri said the Philippines would now come from a position of strength because of the favorable ruling. He recommends for a continuing dialogue with China and not pick a fight with the communist-led country. “At the same time, [China should] respect our sovereignty in this particular area,” he said, adding that it would be “very unfortunate” if China ignores the ruling. Zubiri suggested Mr. Duterte could consider going to China in his first state visit as the new Chief Executive of the Philippines to widen the “open lines [of] communication.” Legarda hopes all parties concerned will uphold international law, but stressed that the issue of territory and sovereignty can only be fully resolved through meaningful multi-stakeholder dialogue and the China’s cooperation.
Environmental concerns
Legarda, meanwhile, also raised concerns over the destruction of the marine environment in the contested waters and hoped that such activities harmful to the marine ecosystems will be stopped immediately. “Our interest in protecting the marine environment stems not only from territorial concerns but also from our collective responsibility to conserve and ensure the sustainable use of our marine resources.”
In its ruling, the UN Tribunal took note of the effects of China’s land reclamation and construction of artificial islands at seven features in the Spratly Islands. It said, “China had caused severe harm to the coral reef environment and violated its obligation to preserve and protect fragile ecosystems and the habitat of depleted, threatened, or endangered species.” The tribunal, likewise, stated that Chinese fishermen have been harvesting endangered marine species, such as sea turtles, coral and giant clams, on a “substantial scale” using methods that are harmful to the coral reef system in the West Philippine Sea. Chinese authorities knew about these but “had not fulfilled their obligations to stop such activities.”
House orders
FOLLOWING the Itlos ruling, a lawmaker urged Congress to declare the Spratlys Group of Islands and the Scarborough Shoal as protected areas. In a news conference, Partylist Rep. Harry Roque of Kabayan said the government should declare these territories located at the West Philippine Sea as protected areas before the Philippines resumes its negotiation with China. “Before we start our negotiation with China, I am suggesting to the government and Congress to declare these areas—the Spratlys Group of Islands and Scarborough Shoal—as maritime reserves and recognized by all the countries,” he said. “This declaration is needed to protect our resources.” Until there’s no agreement yet with China, “let’s leave the areas as maritime reserves to protect it so that whoever eventually claims title to the islands will have something to explore and exploit,” added Roque, an international law expert and former law professor at the University of the Philippines. According to Roque, he will lead the filing of the bill in the 17th Congress establishing a Spratlys Island Development Council patterned after the Subic Bay Metropolitan Authority or Clark Development Corp. to manage economic exploration efforts in the area. The legislator, meanwhile, said the government should still push negotiations with China since the PCA did not resolve the issue of territorial claims within Spratlys. “We should return to the negotiating table with China, take advantage of the ruling of the Court, and settle once and for all the issue of conflicting claims within the Spratly Islands,” he said. “Nonetheless, the ruling does not settle the entirety of the dispute as it involves claims to islands, which is beyond the jurisdiction of the Itlos.”
Reconsider
MEANWHILE, presumptive Speaker Pantaleon D. Alvarez of Davao del Norte asked China to respect the decision of the international tribunal and reconsider its position not to honor the Itlos ruling. “We should urge China as part of the community of nations to respect the decision of the arbitral court and to adhere to the peaceful settlement of territorial disputes in accordance with international law,” he said. Alvarez also reminded China that Beijing is one of the signatories of the Unclos that guarantees a 200-mile exclusive economic zone (EEZ). “Because of our EEZ, we should be allowed to conduct exploration activities in the area for our own economic benefit,” he said. Moreover, Alvarez said the Philippine government, including Congress, will thoroughly study the ruling of the tribunal “so that we can determine our next moves on the issue, particularly with respect to stepping up economic exploration efforts in the South China Sea and maintaining peace and stability in the region.”
South Korea announces site for U.S. missile defense system
BusinessMirror
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A protester pastes anti-Thaad banners on the gate of Defense Ministry during a rally to denounce deploying the Terminal High-Altitude Area Defense, or Thaad, in Seoul, South Korea, on July 13. The site in South Korea that will be the base for an advanced US missile defense system that the government says is designed to cope with North Korean threats will be announced on Wednesday, Seoul officials said. AP
Death of rebel leader fuels renewed anger in Kashmir
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RINAGAR, India—When Indian forces announced last week that they had killed a top Kashmiri rebel leader, they called it a major victory in the fight against militants in the disputed Himalayan region. They clearly didn’t expect the backlash that followed—an outpouring of public anger, daily protests and dozens dead in the streets. The killing of Burhan Wani drew tens of thousands to rise up and renew demands for “azadi,” or freedom, from Indian rule. At least 29 people have died in clashes and hospitals are struggling with hundreds of injured. Each day this week has brought a new surge of resistance by young, rock-throwing protesters in jeans and bandanas defying curfews to face down Indian troops firing live ammunition, pellet guns and tear gas. Officials worry that they’ve unwittingly revived a rebellion that may be hard to control. “We were not expecting this huge public reaction,” said a top security official engaged in counterinsurgency operations, speaking on condition of anonymity as he was not authorized to speak to reporters. “It’s disturbing.”
Clear signs
THERE were clear signs that the mostly Muslim region was ripe for a renewed rebellion even before the death of the popular, young leader of the area’s largest rebel group. Wani had been hidden by villagers at least half a dozen times before, as have other anti-India rebels, when soldiers zeroed on their hideouts in southern Kashmir villages, according to security officials and local residents. Many among Kashmir’s 12 million people saw the 22-year-old handsome Wani as a folk hero who bravely defied India’s forces, marked by hundreds of thousands of troops in the disputed region. Many felt as if they knew Wani personally, having followed the news of his rise through the ranks of Hizbul Mujahideen. When news spread that Indian troops had killed him and two other militants on Friday night, the response was immediate: Tens of thousands of angry youths poured out of their homes in towns and villages, hurling rocks and bricks and shouting at Indian troops in the streets. Wani’s “ability to recruit [people] into militancy from the grave will far outstrip anything he could have done on social media,” Kashmir’s former chief minister and opposition leader Omar Abdullah tweeted on Saturday.
Biggest success
INSPECTOR General Syed Javaid Mujtaba Gillani described Wani’s killing as the “biggest success against militants” in recent years. Authorities imposed a 24-hour hour curfew, but still protesters attacked military and paramilitary installations, burned several police stations and some homes belonging to police and pro-India politicians. AP
Seeking peace in Syria, US offers new deal with Russia
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ASHINGTON— Frustrated by months of failure in Syria, the Obama administration is taking what might be its final offer to Moscow: Enhanced intelligence and military cooperation against the Islamic State (IS) and other extremist groups if Syria’s Russian-backed president Bashar al-Assad upholds a cease-fire with US-supported rebel groups and starts a political transition. When Secretary of State John Kerry meets Russia’s top diplomat and possibly President Vladimir Putin in Moscow later this week, Syria’s civil war and Assad’s future will top the agenda. Kerry is trying to reverse a trend in which he has hailed a series of agreements with the Russians only for them to fall short, according to officials with knowledge of internal American deliberations. Kerry will have to thread a needle. He’s watched the Syrian military and Russian air force violate truce after truce in recent months. This time, the officials said, Kerry is dangling in front of the Kremlin Russia’s long-sought requests for intelligence sharing and targeting assistance in return for Russia using its influence to end the fighting and start ushering Assad out of power. But Kerry will be wary about offering too much.
Different track
THE talks in Moscow are scheduled fewer than three weeks before an August ultimatum for diplomatic progress. All signs augur poorly for a breakthrough. Fighting is intensifying near Aleppo, Syria’s largest city. Assad
has reasserted control over more areas of the country he had once lost. Humanitarian aid deliveries to besieged, rebel-held areas are sporadic and grossly insufficient. And counterterrorism campaigns against the IS and al-Qaeda show no end in sight, meaning any peace would only be partial. “The target date for the transition is 1st of August,” Kerry told reporters two months ago, hoping to get Russia and Syria to halt military operations. “So either something happens in these next few months or they are asking for a very different track.” But that “very different track” has remained undefined beyond vague hints of a military intervention involving Saudi troops. The White House and Pentagon have resisted a greater US role. As a result, Washington is stuck with a familiar strategy: Asking Russia to force Assad to halt military offensives against moderate rebels, stop bombing civilian areas and allow aid to reach besieged communities.
Added carrots
BUT as added carrots, the US is now offering more robust military co-
operation against IS and the Nusra Front, Syria’s al-Qaeda branch, and information to help Russia target affiliated militants. Kerry won’t go as far as to suggest joint US-Russian operations, according to the American officials, who weren’t authorized to speak on the matter and demanded anonymity. “We have teed up ideas to the Russians,” State Department Spokesman John Kirby told reporters on Tuesday, saying the Moscow discussions would be an indicator of Russia’s sincerity. In Azerbaijan Russian Foreign Minister Sergey Lavrov blamed the UN’s Syria envoy for the diplomatic impasse, and said he would try to work with Kerry on a common approach after the top US diplomat’s arrival Thursday. Much of Washington is wary about working too closely with Russia. The US doesn’t want to be seen as entrenching Assad, whom American officials have referred to as a “butcher” and “mass murderer.” Russia’s bombers also have attacked anti-Assad rebel groups that have received weapons, training and other forms of support from the US and allies, such as Saudi Arabia—whose foreign minister Kerry met in Washington on Tuesday before a weeklong Europe trip.
Increased leverage
AND, as a dissent cable signed by 51 State Department officials illustrated last month, a sizeable part of America’s diplomatic establishment believe a US military response is necessary to resolve the Syrian conflict, given Moscow’s increased leverage through its presence on the ground. When Russia intervened in Syria last September, the administration took a different view, branding it a move of desperation and weakness. The US initially sought to shut Russia out of diplomatic discussions, but quickly reversed course and created the International Syria Support Group with Moscow’s help. American officials, including Kerry, then softened demands for Assad’s prompt departure from power.
$5.6B
The total amount of American aid given to Syria since the start of the crisis in 2012
A cessation of hostilities was reached in February. Several temporary and regional truces have followed, though none have ended the violence that has killed as many as a half-million people since 2011, contributed to a global migration crisis and spawned IS’s international expansion.
Greater cover
ON Tuesday evening, Kerry announced that the US will provide another $439 million in humanitarian aid to refugees and others affected by the ongoing conflict in Syria, bringing to $5.6 billion the total amount of American aid given since the start of the crisis in 2012. While some US officials downplay the military significance of what is now being offered to Russia, the symbolic effect is clear. Russia has been keen to present its intervention as part of the global effort against IS and other extremist groups, and not as a ploy to keep Assad in power. More cooperation with the US could reinforce that narrative. The arrangement also could give Moscow greater cover to expand operations against forces the US considers moderate. The Pentagon is concerned about such a scenario, according to the officials. But the administration has few options right now, given the various, unfulfilled threats throughout Syria’s civil war to apply greater US force—from declaring Assad’s days “numbered” five years ago to Obama’s vow of a military response if chemical weapons were used and then backing down in 2013. AP
EOUL, South Korea—An advanced US missile defense system will be deployed in a rural farming town in southeastern South Korea, Seoul officials announced on Wednesday, angering not only North Korea and China, but also local residents who fear potential health hazards that they believe the US system might cause. As words of the location for the Terminal High-Altitude Area Defense, or Thaad, spread even before the government’s formal announcement, thousands of residents in the town of Seongju, the site for the US system, rallied and demanded the government cancel its decision. A group of local leaders wrote letters of complaint in blood that they plan to give to the Defense Ministry. “We oppose with our lives the Thaad deployment,” one of the letters said, according to Seongju Local Council Speaker Bae Jae Man, one of the 10 people who wrote the letter. Seoul and Washington officials say they need the missile system to better deal with what they call increasing North Korean military threats. On Monday North Korea warned it will take unspecified “physical” measures once the location for Thaad is announced. Seoul’s Deputy Defense Minister Ryu Je Seung told a news conference that Seongju was picked, because it can maximize the Thaad’s military effectiveness while satisfying environmental, health and safety standards. No other details were given, although US military bases are in the area. Ryu said a Thaad system stationed in Seongju would cover up to two-thirds of South Korea’s territory from possible North Korean nuclear and missile threats. He said the defense chiefs of the countries approved the decision. China and Russia oppose the system that they believe helps US radar track missiles in their countries. Seoul and Washington say the system targets only North Korea. Many South Koreans worry China, South Korea’s biggest trading partner, might take economic retaliatory measures. Residents in Seongju and several other villages previously rumored to be candidate sites for the Thaad system have already launched protests, citing fears that the electromagnetic waves that Thaad radar systems emit can possibly cause health problems. Defense officials have disputed that, saying the system will be located on a mountain, not in a residential area, and is harmless if people stay at least 100 meters away from it. Seoul and Washington launched talks on the Thaad deployment after North Korea conducted a fourth nuclear test and carried about a longrange rocket launch earlier this year. The United States stations about 28,500 troops in South Korea as deterrence against potential aggression from North Korea. China assisted North Korea during the 1950-1953 Korean War, while American-led UN troops fought alongside South Korea. AP
Solar-powered plane arrives in Egypt on globe-circling trip
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AIRO—An experimental solar-powered airplane has arrived in Egypt as part of its globe-circling voyage. The aircraft, Solar Impulse 2, flew out of the Seville Airport in Spain on Monday and landed in Cairo on Wednesday. This leg of the trip had been expected to last about 50 hours and 30 minutes. The flight, piloted by Swiss man Andre Borschberg, arrived in Seville on June 23 after an unprecedented three-day flight across the Atlantic. The aroundthe-world voyage began in March 2015 in Abu Dhabi in the United Arab Emirates and is due to finish there, too. AP
Many in law enforcement feel frayed relationship with Obama
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ALLAS—After each fatal shooting of a black man by an officer, President Barack Obama has swiftly spoken out against bad policing, giving voice to the generations of African-Americans who have found themselves at the wrong end of a baton, a snarling dog or a gun. As much as those words have comforted
blacks, they have rankled many of the nation’s men and women in blue. Some have described the remarks as an insult, an alltoo-quick condemnation before all the facts are in and a failure to acknowledge the thousands of cops who do a good job and routinely risk their lives. “It would just be nice for him to say,
‘Hey, I support what you’re doing,’“ said Scott Hughes, chief of police in Hamilton Township, a suburb of Cincinnati, Ohio. “The president doesn’t defend the police. It’s very one-sided.” On Tuesday Obama traveled to Dallas to pay tribute to the five officers who were slain by a sniper at a peaceful protest. The presi-
dent offered, perhaps, his strongest words yet of support for law enforcement, praising the dead as heroes who died while preserving a constitutional right. “Like police officers across the country, these men and their families shared a commitment to something larger than themselves,” Obama said.
He spoke before an audience that included police officers, relatives of the slain—and five empty seats, each representing a fallen officer. A folded flag and a police hat rested on each chair. The president mentioned the slain officers by name and offered a few personal tidbits about each one. AP
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Latest Baghdad bombing puts diverse neighborhood at risk
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AGHDAD—Iraq’s deadliest single bombing in 13 years of war has turned the Baghdad district where it took place into the centerpiece in an increasingly bitter rivalry between the country’s prime minister and its Iranian-backed Shiite militias eager to hold sway over the city’s most diverse and prosperous area.
Karada, a commercial hub on the east bank of the Tigris River, long had a reputation as one of Baghdad’s most diverse neighborhoods. Though it has a Shiite majority, it boasts large Sunni Muslim and Christian communities and has the largest number of churches in a single Baghdad neighborhood. It was home to much of Iraq’s once large Jewish community, which mostly left the country by the 1950s. Since the US-led invasion in 2003, it has been hit by seemingly endless suicide attacks, roadside bombs and even rocket shelling. But it was spared the sectarian bloodletting and cleansing that tore the rest of Iraq’s capital apart and is perhaps the only neighborhood left in the city where Sunnis and Shiites live side by side. But the July 3 suicide bombing that killed nearly 300 and wounded 200 others may have been one attack too many. The blast, for which the Islamic State group claimed responsibility, set fires that ripped through two shopping malls, raising the death toll and horror of the attack. Some of Karada’s deeply shaken residents are asking Shiite militias for protection. “This one is different,” said Haidar Hadi, a resident who works at a Karada women’s clothing store. “Too many people were killed and it all happened when people were fed up with security conditions,” said the 26-year-old who, like his coworkers, wore mourning black. Iranian-backed Shiite militias,
who style themselves as Iraq’s strongest protectors against militants, are stepping in, trying to gain influence in the district. It is part of a wider competition for political power between them and Prime Minister Haider al-Abadi, who has tried to limit the militias’ role. In the case of Karada, it could jeopardize the district’s inclusive character, given the hatred and fear among Sunnis of the militias. Hours after the bombing, al-Abadi visited Karada, only to be met by some residents shouting insults at him. He had to rush away in his convoy as residents hurled water bottles, rocks and shoes at it, yelling, “thieves” and “pickpockets,” a reference to allegations of widespread government corruption.
Corruption, terror
THE next day two of the most powerful Shiite militia leaders, Hadi al-Amiri and Qais al-Khazali, both harsh critics of al-Abadi, toured the site. Some residents, overwhelmed with emotion, approached the two, pleading for help to protect Karada and avenge the victims. Muqtada al-Sadr, a radical Shiite cleric whose followers in April stormed Baghdad’s heavily fortified “Green Zone” that houses parliament and government offices, visited the bombing site on Tuesday. “The site must be kept as a monument to the people’s suffering from corruption and terror,” said al-Sadr, whose Saraya al-Salam, or Peace Brigades, militia is among Iraq’s largest. Al-Amiri called on the govern-
ment to hang convicted IS militants on death row in the streets of Karada as retribution. Al-Khazali vowed to avenge the bombing and demanded the militias be allowed to “cleanse” the environs of Baghdad. “Now that the state’s security and intelligence institutions have failed to carry out their duties ... the Popular Mobilization (the formal name of the Shiite militias) must be involved in the security file,” he said. Al-Abadi responded, over the weekend, saying no one would be allowed to make political gains out of the tragedy, and no one except security forces would be allowed to carry arms inside the city.
Blood, lives
SOME Iranian-backed militias have offices in Karada, but they’ve had little influence among its Shiite community. Most Shiites in the district are followers of Iraq’s top religious leader, Grand Ayatollah Ali al-Sistani, a moderate cleric who has repeatedly been critical of militiamen over their abuse of Sunni civilians while fighting the Islamic State north and west of Baghdad. Karadah’s residents have tended to join volunteer brigades loyal to alSistani in response to his June 2014 call for a jihad, or holy war, against IS after it blitzed across much of Iraq. While militiamen often operate as unofficial security forces in other Shiite-dominated districts, they are absent from Karada. Al-Sistani’s representative declared in a Friday sermon that it was no longer possible to “show leniency to the corrupt and the losers at the expense of the blood and lives of citizens,” a thinly veiled criticism of the prime minister for failing to make good on his calls to reform the government and shake up his security forces. The representative, Sheikh Ahmed al-Safy, also visited the bombings site and attended some of the funerals.
Rebuilds, gains
AMID the mounting pressure after the bombing, al-Abadi sacked the capital’s security chief and accepted the resignation of the interior minister, a veteran member of the Badr Brigade led by al-Amiri. Iraq’s Shiite militias have grown in size and influence during the fight against IS. After much of the mili-
tary and security forces melted away in the face of the IS blitz in 2014, the militias rallied to push the militants back from the outskirts of Baghdad. They have also grown in political ambition and become bolder in criticizing al-Abadi. At the same time, they are accused of abuses of Sunnis in territory they retook from IS. And they have had friction with the military as it rebuilds and gains some successes of its own against the extremists. The militias are believed to be maneuvering to become the main armed force in the capital, a city of around 7 million. Currently, the army is in charge of security in Baghdad. But the Interior Ministry, which is known to be close to the militias, has long wanted to take that role from the military, the chairman of parliament’s security and defense committee, Hakem al-Zamli, told The Associated Press. “That could effectively mean the militias taking over in Baghdad,” he said.
Fear, horror
MILITIAMEN, meanwhile, are maintaining a daily presence at the site of the Karada bombing. The burned shells of the mall have turned into a makeshift shrine attracting thousands of visitors every day to commemorate the victims—and vent their frustration at the government’s perceived failure to protect the city against IS. Unarmed but in combat fatigues, the militiamen take part in funerary processions at the site. The banners of several militias are hoisted over the shopping malls. On Sunday night, they organized and acted as pall bearers for a symbolic funeral for the dozens still unaccounted for a week after the blast. “I doubt that Karada will ever return to what it was before the bombing,” said survivor Majid Toamah, a 40-year-old store owner. He lay on his back on the floor in a relative’s home with both legs in a cast, broken when he leaped 66 feet to the street below to escape the fire. “There is fear and horror in our hearts now.” “There is so much hatred for Karada because it has all the goods anyone needs and is home to all sects and everyone loves everyone else.” AP
Thursday, July 14, 2016
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Report: Foreign maids in Oman can face abuse nearing slavery
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UBAI, United Arab Emirates—A leading international rights group on Wednesday said that foreigners employed as maids in Oman can face physical and verbal abuse while working entrapped in conditions that near slavery. A new Human Rights Watch (HRW) report blames in part Oman’s system of tying workers’ visas to their employers, as well as police failing to enforce laws and returning runaway maids to abusive homes. The report alleges Oman’s neighbor, the United Arab Emirates, acts as a gateway for maids to be trafficked into the sultanate, as Emirati employment agencies along the border put women on display “like window shopping.” “Many find themselves trapped with abusive employers and forced to work in exploitative conditions, their plight hidden behind closed doors,” the HRW report said. “It is clear that abuses are widespread and that they are generally carried out with impunity.” Oman’s government-sponsored Human Rights Commission and the Omani Embassy in Washington did not respond to requests for comment from The Associated Press.
Absconders
MANY from Asia and Africa come to Gulf Arab countries to work as maids, often as the sole provider for their families back home. While some find success, others can face abuse or find themselves working in conditions far different than those promised by recruiters, trapped without their passports. Oman, a country of 4.4 million people on the eastern edge of the Arabian Penin-
sula, is home to nearly 2 million foreigners, according to the government’s National Center for Statistics and Information. In the report, Human Rights Watch said its investigators interviewed 59 female migrant workers with some recounting being beaten, verbally abused, denied fair pay and working as much as 20-hour days. The report said employers routinely seized maids’ passports in violation of Omani laws and those that fled abusive situations often had police return them to their abusers under laws that consider the workers “absconders.” “Situations like those described below are at the very least dangerously close to situations of slavery,” the report said.
‘Kafala’
THE report called on Oman to overhaul its kafala employee sponsorship system. The system, versions of which are used throughout the oil-rich Gulf states, gives bosses considerable power over workers by effectively binding them to a given employer. It also urged Omani police not to return those who flee violence to abusive homes. The New York-based group also implicated the UAE for allowing maids to sneak into Oman despite restrictions from some of their home countries and other visa restrictions. It described a series of employment offices in the Emirati border city of Al Ain serving as a point for Omanis to find domestic workers. Several of the women who spoke to Human Rights Watch described the situation as them being “bought” by Omanis. Emirati officials did not respond to a request for comment from the AP. AP
A year later, Iran nuclear deal is holding but fragile
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ASHINGTON—The Iran nuclear accord is fragile at its one-year anniversary. Upcoming elections in both the US and Iran could yield new leaders determined to derail the deal. The Mideast’s wars pit US and Iranian proxies in conflict. Iran’s ballistic missiles are threatening American allies in the Middle East. Congressional opposition remains. But, for now, the seven-nation nuclear pact is holding. Washington and Tehran are expanding cooperation. And Boeing’s recent announcement of a multibilliondollar plane deal with Iran Air suggests some of the agreement’s early problems may be getting resolved. “It really wasn’t long ago that we saw a rapidly expanding nuclear program in Iran, only months away from having enough weapons-grade uranium to build 10 to 12 nuclear weapons, and we were on the cusp
of confrontation,” Secretary of State John Kerry said recently. “We have changed the strategic equation.” One year ago, on July 14, 2015, the United States, six other world powers and Iran finalized almost two years of negotiations on the Joint Comprehensive Plan of Action. The pact outlined what Tehran had to do to pull back its nuclear program from the brink of weapons-making capacity. And it spelled out the West’s obligations to end many financial, trade and oil sanctions that had battered Iran’s economy. Iran has lived up to its end of the deal. It shut down thousands of centrifuges for enriching uranium and exported almost its entire stockpile of the bomb-making material. It disabled a heavy water plant that would have produced plutonium usable in a weapon. It opened up its supply chain to far greater scrutiny. AP
rhetoric, but he’s a smart businessman who will help the nation’s economy,” said El Hanly, a Republican. He said he favored Trump’s plan to strengthen security along the US border with Mexico, but doesn’t think Trump will follow through on any sort of plan to bar Muslims from the country. “Most of my friends don’t agree, but I think he is the best choice,” he said. Still, the poll found little common
ground between young Americans and Trump. About 7 in 10 oppose Trump’s proposal to temporarily ban Muslims from other countries from entering the United States. Seven in 10 oppose his plan to build a wall along the US southern border. Six in 10 say immigrants in the country illegally should be allowed to stay, including large majorities of young Hispanics, African-Americans and Asian-Americans, and about half of young whites. AP
Most young people dislike G.O.P.’s Trump, say he’s racist, poll bares
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EW YORK—Donald Trump is wildly unpopular among young adults, in particular young people of color, and nearly twothirds of Americans between the ages of 18 and 30 believe the presumptive Republican nominee is racist. That’s the finding of a new GenForward poll that also found just 19 percent of young people have a favorable opinion of Trump compared to the three-quarters of young adults who hold a dim view of the New York billionaire. Trump’s likely general election opponent, Hillary Clinton, is also unpopular with young people, but not nearly to the same extent as the real-estate mogul and reality TV star. A mere 6 percent of young African Americans, 10 percent of young Hispanics, 12 percent of young Asian Americans and 27 percent of young whites see Trump in a favorable light, ratings that suggest the celebrity businessman faces a staggering task this summer to win their backing in his bid for the White House. “I think if you want to be a moral young person, you can’t support Trump,” said Miguel Garcia, 20, of Norwalk, California. The grandson of Mexican immigrants and a college student who also works at a tire shop, Garcia is a registered Democrat who has not chosen a candidate to support this fall—but
54% The percentage of adults polled by GenForward who have an unfavorable view of the presumptive Democratic nominee
is resolute in his disdain for Trump. “It’s really hard to back anything Trump does,” Garcia said. “He just says prejudiced stuff.” GenForward is a survey by the Black Youth Project at the University of Chicago with the Associated Press-NORC Center for Public Affairs Research. The first-of-its-kind poll pays special attention to the voices of young adults of color, highlighting how race and ethnicity shape the opinions of the country’s most diverse generation. The GenForward survey is a poll of adults between the age of 18 and 30, not necessarily registered or likely voters. Those surveyed may not end up voting, or casting a ballot for either major party candidate for president. The poll found that only 39 per-
cent of young people have a favorable opinion of Clinton to 54 percent who have an unfavorable view of the presumptive Democratic nominee. Desiree Batista, a former supporter of Vermont Sen. Bernie Sanders, said she was “picking the lesser of two evils” in backing Clinton, a decision she reached in part because she believes Trump “was unqualified” to be president. “I just don’t think he’s fit to be a presidential candidate,” said Batista, a 21-year-old college student from Colonia, New Jersey. “I understand people like him as a businessman, even though I don’t feel the same way.” The depth of animosity toward Trump among young Americans may be driven by the two-thirds of those who believe he is racist. That includes nearly 6 in 10 whites, and more than three-quarters of African Americans, Hispanics and Asians. Trump launched his campaign last summer by accusing some immigrants from Mexico of being rapists and bringing drugs into the country. He later vowed to temporarily bar foreign Muslims from entering the US, a position from which he has recently backed away. “Clearly, from what Trump has said he can be categorized as racist,” said Barrett Coleman, a 28-year-old graduate student from Richmond,
Supporters of Republican presidential candidate Donald Trump wait for the start of a rally in Westfield, Indiana, on July 12. Trump is wildly unpopular among young adults, in particular young people of color, and nearly two-thirds of Americans between the ages of 18 and 30 believe the presumptive Republican nominee is racist. AP
Virginia, who is supporting Clinton. “His comments about Mexicans, in particular, are just awful.” A Trump spokesman did not return messages seeking comment about the GenForward poll, which found he does have some supporters among young people. Nour El Hanly, a 20-year-old student from Chicago, is a Muslim of Moroccan descent who said he found Clinton “corrupt” and will “continue failing Obama policies.” “I do not favor all of [Trump’s]
A10 Thursday, July 14, 2016 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
China must respect international law
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he Permanent Court of Arbitration in The Hague on Tuesday sided with the Philippines against China’s territorial claims. In a ruling on an arbitration case brought by the Philippines against China, it said there is no legal basis for China’s “nine-dash line” claiming rights to much of the South China Sea. It added that any historic rights to resources that China may have had were wiped out if they are incompatible with exclusive economic zones established under the United Nations Law of the Sea treaty that sets rules for establishing zones of control over the oceans based on distances to coastlines. More than a hundred million Filipinos celebrated with joy upon hearing the ruling “that China had violated the Philippines’s sovereign rights in its exclusive economic zone by interfering with Philippine fishing and petroleum exploration, constructing artificial islands and failing to prevent Chinese fishermen from fishing in the zone.” Unfortunately, the Chinese government rejected the international tribunal’s ruling. In a statement, the foreign ministry said China “solemnly declares that the award is null and void and has no binding force. China neither accepts nor recognizes it.” Displaying unyielding obduracy even in the face of undisputed evidence that it was wrong, the Chinese government declared: “China’s territorial sovereignty and maritime rights and interests in the South China Sea shall, under no circumstances, be affected by those awards. China opposes and will never accept any claim or action based on those awards.” Experts on international law said the ruling offers a fresh opportunity to resolve maritime disputes in a peaceful manner. They said countries wrangling with China over territories in the South China Sea should join the Philippines in endorsing the tribunal decision and then proceed, if necessary, with their own arbitration cases. Japan, which has its own territorial disputes with China over a set of islands in the East China Sea, was the first country to endorse the ruling. Japan’s Foreign Minister Fumio Kishida said the Arbitral Tribunal’s decision is “final and legally binding” and that the two sides should comply with it. He added: “Japan strongly expects that the parties’ compliance with this award will eventually lead to the peaceful settlement of disputes in the South China Sea.” Foreign Secretary Perfecto R. Yasay Jr., who called the ruling a “milestone decision,” pledged to pursue a peaceful resolution to the country’s territorial disputes with China. However, there are serious concerns about what will happen next. For one, the tribunal has no authority to enforce its ruling. And China, which boycotted the legal process, is threatening to use its might to protect the maritime interests that the Arbitral Tribunal has declared illegal. China’s actions after its legal defeat will show the world how it regards international law. So far, the signs are distressing. It has defiantly rejected the Arbitral Tribunal’s ruling and flaunted its readiness to use power to keep what it wants to keep. There are fears that China’s provocative actions could inflame regional tensions. In the face of mounting pressure from Beijing, the South China Sea could inevitably become a flashpoint, with potentially serious global consequences.
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Reaching a tipping point? John Mangun
OUTSIDE THE BOX
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verything that happens in life is part of a process. The process leads to a tipping point, which then creates an event. Some are obvious, like pregnancy. A woman goes into labor— the tipping point—and the gestation process then creates a birth event. Prior to the event, there is always a “tipping point” from which there is no turning back. A storm forms in the Western Pacific Ocean over time and may or may not become a typhoon. At some point, the process evolves, creating the typhoon and rarely does a typhoon die out before reaching land. The tipping point is not the event. It is the time at which the “event” becomes inevitable, and we do not know exactly what the results will be. The typhoon could bring death and destruction or thunderstorms that mainly bring needed rain.
The Philippines and China have been on a course toward confrontation over regional waters and Philippine economic rights for some time. The tipping point occurred with the arbitration ruling. The event could be a shooting war, an agreement of cooperation, or even China and the Philippines making no changes from the status quo. Former US Federal Reserve Chairman Ben Bernanke went to Japan one day after Prime Minister Shinzo
Numbers and death Siegfred Bueno Mison, Esq.
THE PATRIOT
A
feng shui consultant noted that President Duterte’s inauguration as the 16th President of the Philippines, after garnering 16 million plus votes, is an auspicious omen. In numerology, 16 is 1 + 6 = 7, which is a lucky and powerful number. Numerology has increasingly been consulted by Filipinos to predict the outcome or success of an event or endeavor.
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During his first flag-raising ceremony as commissioner of the Bureau of Immigration, retired Police General Jaime Morente (Philippine Military Academy [PMA] 1981) said, perhaps, his designation to serve as the chief implementer of immigration law was written in the stars. He noted that his birthday is June 13, or 6/13, whereas the antiquated Philippine Immigration Act of 1940 is known as Commonwealth Act 613. As I recall, to get your lucky number in numerology, you should add the digits in a number of significance to you, say your birthday or anniversary, until you get a single digit. So in Commissioner Morente’s case, since his birth date is 6-13, the formula is 6+1+3=10, then 1+0=1. Thus, Commissioner Morente’s lucky number in the bureau is the number 1.
This appears to be true. Commissioner Morente is the first ever retired police general to be appointed BI head, and apparently, the first person from Cotabato to head any of the attached agencies under the Department of Justice. Commissioner Morente said his twofold mission in the bureau is to curb corruption and to get rid of the long queues, which have plagued the bureau for many years. On the elimination of long lines, several measures have been undertaken in the past years, such as the introduction of the online processing of annual reports for foreign nationals on the suggestion of former Alien Registration Chief Fortunato Manahan Jr., and the use of electronic payments via debit cards on the initiative of Finance Chiefs Elvira Presdao and Libertad Tumlos.
The Philippines and China have been on a course toward confrontation over regional waters and Philippine economic rights for some time. The tipping point occurred with the arbitration ruling. The event could be a shooting war, an agreement of cooperation, or even China and the Philippines making no changes from the status quo. Abe announced a new “stimulus,” sending the yen down by 4 percent. The Tokyo stock market had its largest three-day upside run in six years. Meanwhile, the New York Stock Exchange hit an historic high; good for the country that has its economy now growing at 1.1 percent, from 3.9 percent about a year ago. The European Union (EU) has been on a clear course to potential destruction for a long time. The recent “Brexit” vote was the tipping point. The EU could get its economic and financial house in order or completely
With the marching orders of President Duterte for the first 100 days of his administration, for the BI with Morente at the helm, the number 1 may very well herald the death of corruption and mean grief for corrupt government personnel and their cohorts who will soon be permanently out of business. With sufficient budget for information technology, online processing can also be done for visa processing, revalidation, restamping, implementation and lifting of blacklists. With lesser human interaction, the opportunities for corruption will be minimized and, more important, the time to process these transactions will be considerably shortened. With online processing of most, if not all, of BI applications, Commissioner Morente may well be the first among the current officers of the present administration to report to President Duterte “mission accomplished” insofar as the eradication of long queues in government agencies is concerned. On his mission to eradicate corruption in the bureau, Commissioner Morente announced that he already knows the few rotten eggs in the bureau, thanks to good intelligence work and friendly advice from well-meaning former BI employees,
dissolve. That will be the event and it will come. While the “experts” warned that leaving the EU would be a disaster for the United Kingdom, in fact, now the European Commission is forecasting a recession for the EU because of Brexit. Italian banks have had a continuing build up of nonperforming loans for the past three years, now at €360 billion, comprising 20 percent of total loan portfolio, and four times as much as when the 2007 financial crisis hit. This past week Bank of Italy Governor Ignazio Visco said state intervention to support Italian banks may be needed to save the Italian financial system from collapse. We may have come to, or are reaching near, a tipping point. The next weeks and months will significantly shape the future, as the events that are appearing on the horizon are not to be taken lightly. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.
myself included. He vowed that he will find ways to stop them, and with President Duterte’s support, he will surely “take care” of these scalawags who have no place in the bureaucracy. I was told that for the Chinese, the number 1 is not exactly the luckiest number. In fact, the number 1 is associated with death, grief, mourning and sorrow as it resembles a candle. With the marching orders of President Duterte for the first 100 days of his administration, for the BI with Commissioner Morente at the helm, the number 1 may very well herald the death of corruption and mean grief for corrupt government personnel and their cohorts who will soon be permanently out of business. For five years, the leadership of the BI had these corrupt people on the ropes and these evil practices down to a minimum. Alas, fate intervened. Of the three values in PMA: courage, integrity and loyalty, I fervently wish Commissioner Jaime Morente to have courage the most, as he embarks on this new challenge in his career. Dare to be different, sir! Dare to try new things, sir! Fidel V. Ramos, our 12th president and selfconfessed older brother of President Duterte, said: “Daring is to give more than to take; …daring to perform to reform and to transform to make a difference….” Morente. 613, number 1. Death to corruption.
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Opinion
Why not
People first before anything else
BusinessMirror
Msgr. Sabino A. Vengco Jr.
Teddy Locsin Jr.
Free fire Continuef from A1
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ecall that the United States and France—ungrateful wretch, Total has or had a sprawling refinery in the deep desert run by Filipino engineers—had egged Libyan rebels to capture Muammar Gadaffi and sodomize him to death with a bayonet. The result: the killing of the US ambassador in Benghazi by people the US had backed. “Look what happened to Syria,” Mr. Duterte went on. “People are being annihilated there, including children.” In fact, the kids suffer—especially Arab Christian kids—a fate worse than death by being traded as sex slaves through Google among smelly insurgents and probably sick sheiks in the Middle East. Earlier, a dozen young girls were put inside metal cages and set on fire in front of their parents. They would not have willing sex with Muslim militants, which would have asphyxiated them just from the smell. The Islamic State of Iraq and the Levant (ISIS) captured a third of Iraq, after taking nearly half of Syria with the use of American weaponry sent to Syrian rebels to topple Bashar al-Assad but the weapons ended up in the hands of just one group of militants—ISIS. In no time, ISIS was biting the Western hands arming it. There is a theory that ex-Saddam Iraqi generals, who had offered to turn over the Iraqi army to America, were spurned by it.
The result: One of the biggest, most modern armies in the world became an insurgent force that’s one of the biggest, most modern armies in the world—and so on and so forth. What is clear is that, like no president before him since independence—when the government of the new republic should have gone to the Left for waging the only effective resistance against Japan, President Duterte is determined to be a socialist leader: like Mujica in Uruguay, that Indian in Ecuador, Arbenz in Guatemala and Allende in Chile—both toppled by the CIA: all in the spirit of Che Guevara, killed by the army in Bolivia not long ago, and resurrected in the former Greek finance minister, the insurgent Yanis Varoufakis today. Well, why not? We tried being slavish, and that has not gotten us anywhere. Let’s see what getting up from our knees will achieve.
Keeping calm in the South China Sea
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hina was widely expected to reject a ruling against its maritime claims in the South China Sea, and it didn’t disappoint. Declaring Tuesday’s 479page decision “null and void,” China said it “neither accepts nor recognizes it.” More important than what China says, however—and Tuesday’s statement is more measured than last week’s, when Chinese leaders denounced the opinion in advance as “a piece of waste paper”— is what China does. Its neighbors and the US should make clear how dangerous and damaging a more aggressive response would be, even as they prepare for that possibility. The decision from a tribunal convened under the United Nations Convention on the Law of the Sea was sweeping, saying that China had no “historic rights” to much of the South China Sea. Judges also declared that none of the Chinese-controlled land features on the Spratly Islands chain could lay claim to a 200-mile exclusive economic zone. Instead, several fall under the Philippines’s jurisdiction, and Chinese interference with the nation’s fishing vessels in the area is illegal. In response, China may be tempted to declare an air-defense identification zone over the disputed area, but that would only spur the US and other nations to defy it. Withdrawing from the Law of the Sea treaty would strip China of valuable seabed mining rights, among other benefits. Meanwhile, reclaiming land around the Scarborough Shoal, which lies less than 140 miles from the US-allied Philippines, risks an American naval response. It should be clear to China by now that bullying doesn’t work. Its threats and economic pressure have infuriated rather than cowed its Southeast Asian neighbors. None of them are about to surrender their claims in the region. R ather than a lienating its neighbors and driving them closer to the US, China should be looking for an off-ramp—a way to pause
in its activities and shift attention back to diplomacy. Stalled negotiations with the Association of Southeast Asian Nations over a binding code of conduct offer just such an opportunity. In contrast to leaders in Beijing, the new administration in the Philippines has greeted the ruling with welcome restraint, leaving the door open to talks about resourcesharing in the disputed area. China should be looking for a way to enter such negotiations without preconditions, rather than continuing to insist that the Philippines first set aside the ruling. Concluding longrunning talks with Vietnam over their shared maritime boundary would earn Chinese leaders a degree of goodwill, as would efforts to rein in Chinese fishing fleets that have strayed into the waters of other nations, including Indonesia. A change in tactics won’t alter China’s long-term plans to build up its navy or its desire to exert sway over the South China Sea, of course. Channeling those ambitions will require the kind of firmness and commitment to maintaining highseas freedoms that the US has demonstrated in recent months. US Navy ships can now ratchet up the tempo of their “freedom of navigation” operations with the full force of law behind them. The US should continue to strengthen military ties with countries such as Vietnam and Indonesia—as well as India, Australia and Japan. Domestically, the most productive US response might be for Congress to approve the Trans-Pacific Partnership trade agreement before a new president is inaugurated—making it clear that the US has economic, as well as strategic, interests to defend in Asia. As unlikely as it seems, lawmakers should also reconsider their refusal to ratify the Law of the Sea treaty; joining would greatly enhance America’s credibility as a defender of the global system. Arguments over Chinese actions in the western Pacific are certain to continue. Far better for everyone that they be waged in the courtroom, not at sea. Bloomberg View
Alálaong Bagá
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o live in the presence of the Lord, one must walk blamelessly, doing justice and doing no harm to anyone (Psalm 15:2-3, 3-4, 4-5). In the hustle of hospitality, Martha learns from Jesus that attention to Him and His word takes precedence (Luke 10:38-42).
Doing justice in God’s presence IN order to be close to God, the psalmist reflects on the way we must live and be morally fit. His fundamental insight is that our relationship with other human beings is the test of the truth of our relationship with God, because our intimacy with God is the context within which we should relate with our neighbor. As Micah points out: “With what shall I come before the Lord?...with burnt offerings?...Shall I give my first born?... He has told you, O mortal, what is good; and what does Yahweh require of you but to do justice, and to love kindness, and to walk humbly with your God” (Micah 6:6-8). To “walk blamelessly” connotes
a way of life based on righteousness and on doing justice, i.e., being conformed to God’s norm against which everything is measured. This faithfulness to God’s will originates in one’s innermost being; it means one’s thoughts are aligned with the truth of divine goodness. Concretely, three things one must not do: slander anyone, do evil to a friend, and cast a slur on another. Loyalty to the Lord means making the choice: to honor those who fear the Lord and disdaining those who reject Him. Two more things one should avoid: to lend money at usury just to make money, and to accept bribe against the innocent, thus taking advantage and victimizing others for personal
‘Overhaul of BIR’ Atty. Ronald S. Cubero
Tax Law for Business
E
ven before the assumption of office by the new administration, many finance and tax officers from the private sector and other industry players were already clamoring for genuine tax reforms, which include ending corruption and promoting culture of honesty and integrity. As response by the new administration, it disclosed during the Sulong Pilipinas workshop its eightpoint economic agenda. And first on the list refers to reforms in tax-revenue collection efforts, complemented by reforms within the bureaucracy of tax-collecting agencies. Now, given the above mandate, it is timely to look at some of the important new Bureau of Internal Revenue (BIR) issuances as we start doing business under the new administration. Here’s a summary of them: All revenue issuances issued within the period covering June 1 to 30, 2016, were ordered suspended. This covers Revenue Memorandum Circulars (RMCs) 26-2016, 61-2016,
62-2016 and 65-2016, and Revenue Memorandum Order (RMO) 28-2016. Topics discussed in the above-enumerated suspended issuances include: (1) Guidelines for handling disputed assessments and for issuing Final Decision on Disputed Assessment; (2) Guidelines for accounting and recording transactions involving “netting” or “offsetting; (3) Clarification on the proper tax treatment of “passed-on” Gross Receipts Tax; (4) Outright grant of preferential tax-treaty rates for dividends, interest and royalties, and new requirements for tax sparing; and (5) Clarification on the appropriate due date of filing of tax returns and payment of
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gain. Whoever lives with others in true fidelity to God’s will and in righteousness will surely be blessed, and know peace and security.
One thing necessary
IN the scene in the gospel, Jesus is interacting alone with two women who are not members of his family, and the two women are portrayed assuming untraditional roles. Martha welcomes Jesus into her home and Mary sits at the feet of Jesus like a disciple. Martha, in fulfilling the customary responsibilities of hospitality, is overwhelmed and is distracted from attending to Jesus personally because of her service (diakonia). After the outsider Samaritan of last week as example of neighborliness, we now unexpectedly again have two women as examples of two different forms of relationship with the Lord. Both sisters are Jesus’ faithful disciples, one performing service and another listening to His teaching. There lies the tension: Martha wants her sister to share in the responsibilities of service, while she herself has not expressed the desire to sit at the feet of the master. She even rebukes Jesus for His apparent indifference and tells Him what to do! Thereby for Jesus to decide what responsibil-
taxes in case the exact due date falls on a Saturday, Sunday, or a holiday: for electronic and manual tax filers and payers of taxes (RMC 69-2016). Effective July 1, 2016, all field audit and other operations of the BIR relative to examinations and verifications of taxpayer’s books of accounts, records and other transactions are on hold (RMC 70-2016). Previous RMOs 24-2016 and 252016 prescribing the investigation of parties in transactions involving the transfer/assignment of sale of properties were also revoked (RMO 38-2016). Officials and employees in the BIR are now prohibited from accepting or soliciting gifts from the public or the private sector (RMO 40-2016). For the new administration to have the opportunity to select its qualified personnel, all revenue travel assignments orders (RTAOs) issued within the period of June 1 to 30, 2016, were also recalled and revoked (RMC 71-2016). However, the RTAOs involving presidential appointees are excluded from the general revocation (RMC 72-2016). Finally, all paper and correspondence for the signature of the commissioner shall now be prepared under the name of Caesar R.
New airport: No other place but Clark? Val A. Villanueva
Businesswise
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ennis Wright, president of Peregrine Development International, responded to my last column, which detailed the urgency of the country to have a world-class airport.
In a nutshell, he is saying that the only viable location for a large airport would be the Clark Freeport. Peregrine, under Wright, is the brain behind Clark’s 177-hectare Global Gateway Logistics City (GGLC), later renamed Sabah Al-Ahmad GGLC to honor Kuwait’s Sheikh Al-Ahmad Al-Jaber AlSabah, the country’s emir. Kuwait and Gulf Link’s (KGL), investment arm, KGL Investment Co. (KGLI), initially infused some $30 million in the $3-billion project, which started in 2012 and is expected to be completed next year. The project features a 72-hectare logistics park, a 57-hectare business park, a 27-hectare aero park and a 21-hectare town center for commercial and residential buildings. Once completed, the
project would generate 200,000 jobs. In his e-mail, Wright wrote: “I would be the first to concede the country needs a new world-class airport, and would further concede it could be put anywhere: Laguna, Manila Bay, Cavite, Batangas, wherever… But based on an analysis of every single major new airport construction, the best time, from concept to first flight, is seven years. So, conceding [that an airport’s location could be] anywhere anyone wants to build it, it will never see the first landing for a minimum of another seven years, and more likely 10. So what is to be done over the next seven to 10 years? “The new Duterte administration, no matter how aggressive they pursue [the construction of] a new airport, it is impossible to build during his tenure.
So what is to be done? No matter how one looks at it, the only viable alternative until some new airport comes online is Clark.” It is indisputable that decongesting Metro Manila has to be done urgently to solve the so-called carmageddon gripping the whole nation. During his campaign, President Duterte vowed to solve this debacle in six months. Unfortunately, he flip-flopped when finally elected, and even asked for emergency powers to confront the traffic nightmare. In the meantime, congestion persists: The economy is growing, and car sales are at a record-high, while infrastructure and problems of urbanization continue to be ignored, as Wright points out, “with no credible vision for the future.” He explains: “While you cannot fund and fix infrastructure and lethargic decision-making overnight, there are some things that can be done immediately to help alleviate the problem and better plan for the future, [such as] promote and expand the use of the Clark airport and Port of Subic [Port of Batangas, as well]. Promoting the use of Clark and Subic [would] cost the government [next to] nothing, and would have tremendous impact on the national economy and help alleviate some of the congestion.” It takes seven years—from planning to the first flight and at a cost of from $7 billion to $20 billion—to build a new
ity takes precedence over the other. Jesus’ reply identifies Mary’s activity as the better part, which is not to be taken away from her. It is the one thing necessary: to be listening to His word and become one heart and one mind with Him. Alálaong bagá, attentiveness to the person of Jesus and His word takes precedence over any other activity. It builds and defines one’s intimacy with Him. It is the foundation for any participation in His life and mission. Just like last week’s Samaritan giving his attention to the person in need by the roadside, and unlike the temple people who gave priority to their ritual duties and thus missed encountering and loving God in the poor victim in need of their compassion. One thing necessary for salvation is personal union with Jesus Christ; through His word He is in us and with Him we are in God’s presence. Ultimately, what it means to be a Christian and a saint of God active in God’s presence is to have Jesus in oneself and to believe and behave accordingly, in union and compassion toward others. Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on dwIZ 882, or by audiostreaming on www.dwiz882.com.
Dulay (RMO 38-2016). With the above issuances of the BIR, it appears that the agency has already been overhauled in response to the grievances of many taxpayers to end corruption. However, the writer would like to emphasize that the above issuances are not licenses for taxpayers to escape from their tax obligations. One must realize that taxes are what we pay for civilized society. In the words of our Supreme Court, without taxes, the government would be paralyzed for lack of the motive power to activate and operate it. Hence, despite the natural reluctance to surrender part of one’s hard income to the taxing authorities, every person who is able to must contribute his share in the burden of running the government. The author is a junior associate of Du-Baladad and Associates Law Offices (BDB Law), a memberfirm of World Tax Services (WTS). The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at ronald.cubero@ bdblaw.com.ph or call 403-2001, local 350.
airport. Even assuming that Duterte has the political will and wherewithal to put up one anywhere, what happens during the lull, which would take a full decade? Wright asks: “With a growing middle class that is more affluent and can afford domestic air travel, and the country’s desire to see tourism increase, whereoh-where will these planes land?” The Ninoy Aquino International Airport (Naia) has already reached its capacity for safe landings and takeoffs. According to Wright, “Promotion and expanded use of Clark [and the Ports of Subic and Batangas] to get the northbound traffic from Naia and the trucks bound for the Port of Manila totally off Edsa is really a no brainer.” He clarifies that our country needs three airports, just to “keep up with the Joneses,” so to speak. Most of the major cities today have two, three or more major airports actively servicing their people. Even with Clark and/or another new airport located in the South, the Naia should continue to operate. “Manila needs Naia today and in the foreseeable future,” Wright emphasizes. “But it also needs Clark now, and [possibly] a third airport south of Manila.” To be continued
For comments and suggestions, e-mail me at mvala.v@gmail.com.
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www.businessmirror.com.ph
Solomonic wisdom needed to address perennial airport transport-service mess
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By Recto Mercene
@rectomercene
HE president of an airport-vehicle concessionaire’s group complained to then-Manila International Airport Authority (Miaa) General Manager Jose Angel A. Honrado about the drastic increase of taxi operators at the premier airport to their detriment, he was confronted with a rhetorical question: “Bakit, kayo lang ba ang diyos dito [Why, are you the only gods here]?”
Romeo Sayaman, president of the Airport Transport Concessionaire Association Inc. (Atcai), and now the group’s spokesman, recalls this encounter when he went to ask Honrado to explain why there are 42 (not 88 as earlier given by the Miaa) transport companies serving the Ninoy Aquino International Airport (Naia). “If Malacañang calls up Honrado and orders him to accept a new concessionaire, can he turn it down? If a congressman or a senator asks him to do the same, can he refuse? Of course, not,” Sayaman said, answering his own question. This is not to discount that the airport managers themselves have their own friends and relations to take care of, he added. Sayaman said that, as far as he can remember, any “big shot” can call up the sitting airport manager to demand accommodations of various kinds, including recommending a constituent, to take part in the taxi concessions. “The airport manager cannot deny their requests; our culture and political system would not allow it,” Sayaman said. When he started doing business at the airport more than a decade ago, Sayaman said there were only five vehicle concessionaires at the Naia. Today’s 42 concessionaires would soon increase. Newly appointed Miaa General Manager Ed Monreal said he will allow the entry of so-called white taxis or public taxis into the airport to ease the long queues. Currently, the Naia has the yellow metered-taxi service, which charges more than a regular taxi, a limousine service, rent-acar, a premium bus service and Grab. Monreal said complaints about the white taxis being a source of harassment, like overcharging, would be addressed by issuing a piece of paper containing important data, such as the name of the driver, the name of the taxi company and plate number of the taxi, to the passengers.
1,600 The number of vehicles that the 42 Naia taxi concessionaires can field
Aside from the premium buses, the Miaa would also allow jeepneys to take passengers coming out of the Naia Terminal 3 in a designated place, located at the former Circulo del Mondo rotunda. Employees and passengers who do not want to take the limousine or coupon taxi will have to walk from the Naia 3 to Circulo del Mondo, a distance of about halfa-kilometer, and take the jeepneys there coming from Sales Street in Villamor Air Base headed to Baclaran. However, there is no connection between the Naia 3 and the area beyond, because currently it is blocked by the construction of the Skyway leading to and from Macapagal Avenue. An access road would be built for Naia 3 employees and passengers to cross the obstruction on the way to the jeepneys. Last year more than 35 million arriving passengers went through the Naia’s four passenger terminals. Yet, despite the number of airport transport franchisees, there is a dearth of vehicles to efficiently transport irate passengers to their homes. Every day long lines of newly arrived passengers wait at the Naia 3 taxi stand. Last year the Miaa allowed Grab (formerly known as GrabTaxi), the mobile-ehailing vehicle service, to pick up passengers at the Naia. Unlike any other major airports in the world, whose transport systems are
operated by one, or at most three, megaconcessionaires, the Naia remains stuck in Third World mode. Despite attempts by the authorities to streamline vehicular operations, smalltime operators can get access to the Naia, for a piece of the action. Hong Kong, for example, is served by three different types of taxi, distinguished by their color: the Urban taxis that connect the Chep Lap Kok Airport with Hong Kong Island, Kowloon, and parts of town. New Territories taxis connect the airport with the New Territories and Lantau taxis that connect the airport with the rest of Lantau Island. There is also a City bus that delivers passengers from the airport to hotels in Tsim Hsa Tsui District. We will not even mention the trains linking the airport to the heart of Hong Kong in 22 minutes. The New Lantao bus, Long Win bus and
Discovery Bay Transit services operate 25 bus routes to the airport from various parts of Hong Kong. The bus companies also offer 10 overnight “N” services. At Chep Lap Kok, coach services (tourist bus) are available to major cities and towns in Guangdong Province, such as Dongguan, Guangzhou and Shenzhen. Yet, as pointed out, the 42 concessionaires at the Naia could only field 1,600 vehicles, according to Monreal. He said the 97,000 monthly passengers would translate to about 4,000 passengers a day, hence a lack of 2,400 vehicles daily. Those with airport franchises are given a maximum of 120 vehicles to field, Monreal said, which should translate into 5,000 vehicles. But an operator, Nonnie Manese, estimates that 20 percent of the 5,000 vehicles are on downtime owing to repairs or some are due for a date with the Land Transportation Franchising and Regulatory Board (LTFRB) for license renewal. Hence the lack of vehicles. Manese is the manager of Sunshine Tours, a limousine and taxi operator at the Naia, whose owner runs Aloha Hotel and many other businesses. Sayaman said, “We should never compare the Naia with any other airports in the world, because of our political system and ingrained cultural values.” He said small taxi operators are most often overseas migrant workers who returned to the country after saving P3 million to engage in the business. “These new operators can only afford maybe three to five taxis,” Sayaman said. “More than that and the LTFRB would make it very difficult for you to go on with your business.” Sayaman did not elaborate. He added that several airport policemen are also operating some vehicles to augment their modest income. He said it is common knowledge for years that some of these policemen are also engaged in petty misdemeanors, allowing public taxis to operate at the Naia, for some grease money. Sayaman said former Interior Secretary Manuel A. Roxas II and Transportation Secretary Joseph Emilio A. Abaya once offered them to compete in the bidding to run the Premium Bus service at the airport, but the floor price is P420 million. He said they were so insulted by Roxas and Abaya’s offer, they all agreed not to
vote for Roxas. “Only the elite in this country could afford to join the bidding,” he said. Eventually, the concession went to the owner of Air21, freight-forwarding service, a company owned by Alberto D. Lina, the customs commissioner and brother of former Sen. Jose Lina. However, the Premium buses remain empty most of the time, because passengers complain that the P300 being charged from the Naia to Makati or the Mall of Asia is equal to a taxi fare from the airport to the same places. Sayaman has a big issue with Grab which they would like Monreal to address, if given the time to have an audience with him. “All airport vehicle concessionaires have to follow the Miaa directives, such as wearing uniforms and shoes for drivers. There are many other requirements that we have to religiously follow or we are fined,” Sayaman said. One of these requirements is also to be a member of the transport network vehicle/company. He said this was a directive by the LTFRB, which they follow. However, Uber and Grab are not members of either transport groups, Sayaman said, but still allowed to engage in transport service at the Naia. He said they filed a temporary restraining order to stop Grab from competing with them at the airport, but he said the sheriff has difficulty serving the court order. “Paano pala, eh, sa Singapore nakatira ang may-ari ng Grab [It turns out that the owner of Grab is living in Singapore],” Sayaman said with a laugh, adding that Grab’s lawyer said the owner is a foreigner and not subject to Philippine laws. Monreal said he understands the problem. He asked to be given more time. “Please give me time to streamline the operation of the many franchise holders at the Miaa,” Monreal said during his first news conference since assuming office on July 1. Monreal said that he is allowing the public taxi, or white taxi, to enter the Naia premises because of the lack of vehicles at the premier airport during peak arrival hours. He added that being a newcomer, he has yet to review the issue concerning Grab. Monreal asked the media to forget about the past “and look towards the future,” promising that all previous complaints about the Naia would be addressed within a reasonable time.