Businessmirror july 19, 2016

“These are trying times. Please don’t let hate infect your heart. This city must and will get better. I’m working in these streets so any protesters, officers, friends, family or whoever, if you see me and need a hug or want to say a prayer. I got you.”—Baton Rouge police officer Montrell Jackson, in a Facebook message posted nine days before he and two other officers were killed by a gunman. AP

“Terrorism will be part of our daily lives for a long time.”—French Prime Minister Manuel Valls, in an interview with the newspaper the Journal du Dimanche. AP

media partner of the year

United nations

2015 environmental Media Award leadership award 2008

“It’s sad to be doing this, but we also know over there we’ll find something.”—70-year-old Rosa Cardenas, one of more than 100,000 Venezuelans who crossed the border over the weekend to hunt for food and medicine that are in short supply at home. AP

BusinessMirror A broader look at today’s business

www.businessmirror.com.ph

n

Tuesday, July 19, 2016 Vol. 11 No. 283

DTI to set up ecozones for domestic industries T

By Catherine N. Pillas

@c_pillas29

he Duterte administration will start establishing economic zones for companies targeting the local market, so they can also avail themselves of fiscal incentives— especially the coveted income-tax holiday—currently being enjoyed by their export-oriented counterparts.

the entrepreneur Manny B. Villar

A

unique and recent development in the tourism industry is the increasing share of domestic travelers.

Whereas, in the past, we looked at tourism based mainly on the number of foreign visitors, we now find domestic “tourists” accounting for a large share of the pie.

In 2014 international tourist arrivals to the Philippines totalled 4.83 million. During the same year, domestic travelers stood at 54.6 million. According to a study conducted by the Philippine Statistics Authority (PSA), inbound tourism expenditure, which refers to spending by foreign visitors, as well as Filipinos permanently residing abroad, amounted to P274.6 billion, up 21.9 percent from P225.3 billion in 2013.

Continued on A10

Trade Assistant Secretary for Industry Development Rafaelita M. Aldaba said this is one way to raise the competitiveness of

domestic industries amid the influx of cheaper imported goods at zero tariff, particularly those coming from China and Asean

member-countries, due to the region’s economic integration.

“We want the same operating environment for domesticoriented enterprises and those in the Philippine Economic Zone See “DTI,” A2

BMReports

PHL electric-vehicle dream running on borrowed time

By Manuel T. Cayon Mindanao Bureau Chief

D

Second of three parts

AVAO City and Manila— Nearly six years ago, the Asian Development Bank (ADB) gave the green light for the electric-tricycle (e-trike) project titled “Market Transformation through Introduction of EnergyEfficient Electric Vehicles Project.”

The project was based on the belief that a source of anthropogenic greenhouse-gas (GHG) emissions is fossil-fuel combustion, specifically gasoline, from conventional internal combustion-engine tricycles. “For some two-stroke tricycles, scavenging occurs, whereby unburnt fuel escape [sic] through the exhaust pipe,” an Adb paper said. “The project activity intends to mitigate GHG emissions through

PESO exchange rates n US 46.8770

Ibpap charts ‘ambitious’ six-year plan

BENEDICT Hernandez (left), chairman of the Executive Committee of the Information Technology and Business Process Association of the Philippines (Ibpap), joins Danilo Sebastian L. Reyes (center), chairman of Ibpap; and Information and Communications Technology Secretary Rodolfo A. Salalima, at the Ibpap Accelerate Philippine media launch on Monday, with the theme “A Comprehensive Overview of the Philippine IT-BPM Roadmap 2022,” in a Makati City hotel. NONIE REYES

T

he Information Technology and Business Process Association of the Philippines (Ibpap) is eyeing a million new informationtechnology and business-process management (IT-BPM) jobs in the mid- to high-complex services in six years, as the evolution of technology in the sector is taking away the

demand from so-called simplevoice services.

Benedict C. Hernandez, chairman of Ibpap’s executive committee, said this is more of an “ambition” than a target under the industry’s new six-year road map until 2022.

On top of the million skilled jobs, there is an expected three See “Ibpap,” A12

Plantation forests eyed to boost wood industry

Lenie Lectura, Lorenz S. Marasigan & Cai U. Ordinario

By Jonathan L. Mayuga

manuel t. Cayon

Unlocking the potential of domestic tourism

We want to give the same incentives to domestic ecozone locators as those given by the Peza.”—Aldaba

P25.00 nationwide | 5 sections 32 pages | 7 days a week

the use of electric tricycles, thus avoiding the use of conventional tricycles that run on gasoline.”

It was in 2012 when the ADB approved the project.

The project carries a financing bill of $300 million (roughly P14.1 billion), with $99 million (about P4.634 billion) as counterpart of the Philippine government.

As of December last year, the

national government has paid the ADB a total of P44.8 million in commitment fees for the project.

The project is now in danger of being canceled because of delays.

Delays

DUE to a failure in the first bidding, the ADB e-trike project was only awarded last year to Bemac Continued on A2

E

@jonlmayuga

nvironment Secretary Regina L. Paz Lopez on Monday said she wanted to see the country’s reforestation program succeed as a vehicle of economic development, and vowed to help the wood industry by improving domestic supply of raw materials.

Lopez believed these would be achieved, even as the Department of Environment and Natural Resources is set to implement strict regulatory measures that would encourage the operation of planta-

Cutting of trees in natural forest and virgin forest, I would not allow it.”—Lopez

tion forests to ensure sustainable domestic wood supply.

However, consistent with her promise to the mining industry, Lopez said she would also be “very See “Plantation,” A2

n japan 0.4450 n UK 61.8964 n HK 6.0459 n CHINA 7.0088 n singapore 34.8424 n australia 35.5984 n EU 51.8085 n SAUDI arabia 12.4992

Source: BSP (18 July 2016 )

BMReports BusinessMirror

A2 Tuesday, July 19, 2016

www.businessmirror.com.ph

PHL electric-vehicle dream running on borrowed time Continued from A1

Electric Transportation Philippines Inc. The Japanese firm is a domestic subsidiary of Uzushio Electric Co., a pioneer in the Japanese electric-vehicle (e-vehicle) sector.

Bemac Sales, Marketing and Dealer Development Division Vice President Yvonne Palomar-Castro told the BusinessMirror a cause of delay was the lack of experts on e-vehicles in the Department of Energy (DOE) and even in the ADB. “The DOE and the ADB must get a real EV [e-vehicles] expert so that they will know [how to address the challenges in the project]—one who has an experience when it comes to automotive manufacturing,” Palomar-Castro said in an interview.

“There’s such a thing as ‘we need to deliver this at this date.’ It’s okay to put a number [on that], but if you have no idea of how a manufacturing process, especially of automotive design, how long it takes, you would have a not-very-well-studied or -researched product.”

Challenges

OTHER challenges that Bemac faced after winning the bidding for the government’s e-trike project relate to the manufacturing process. One problem is the supply chain related to the batteries required by the project, which are lithium-ion batteries.

According to the ADB, “Lead pollution is an inherent problem with e-vehicles, and electric bikes with lead-acid batteries will increase overall pollution rates more than ICE [internal-combustion engine] motorcycles.”

Plantation. . .

Continued from A1

strict” in regulating the wood industry.

She wanted to limit harvesting in forest plantations established through various land tenure instruments awarded by the DENR to just 10 percent of the total area every year.

“I think there’s a way. I have someone in the DENR who knows [how to help]. In other countries, what they do is, if you plant 100 hectares of wood, there could be an area for the wood industry [to harvest from]. They just have to do it well,” she told the BusinessMirror.

The Philippine Wood Producers Association (PWPA) earlier appealed to President Duterte and Lopez to help improve the industry. The industry is on an uphill climb, challenged to grow beyond the $5.03-billion local wood market because of current supply shortage that encourages wood-import dependency.

PWPA is the national association of corporations, partnerships and individuals involved in forest management; logging; forest-plantation development; manufacture of lumber, veneer and plywood, pulp and paper, and other wood products, as well as in trading, shipping and sales of these products.

An environmental advocate, Lopez is not keen on lifting Executive Order (EO) 23, which imposes a ban on the cutting and harvesting of trees in natural forests. She vowed to pursue the massive reforestation program implemented by her predecessor, Ramon J.P. Paje.

“Cutting of trees in natural forest and

Palomar-Castro said that, while Ramcar Corp., which sells Motolite brand products, can produce lead-acid batteries that, the local company does not manufacture lithium-ion batteries. Thus, she said, Bemac has to import these batteries from Japanese firm Toshiba Corp.

“We chose Toshiba. We know it’s expensive. If you’re not technical or if you don’t know EV, you’ll say all lithium batteries are created equal, other EVs use these so why not your tricycle, you’re more low-tech,” Palomar-Castro said. “But that’s not it.”

was the model being pilot-tested for the e-trike project. The model, according to Palomar-Castro, was not of the quality that met the specifications of having a five-year warranty.

She added there were also functionality issues with the body of the e-trikes.

Cancellation

PALOMAR-Castro explained the efficacy of batteries is relative to several factors, like temperature.

“The Philippines is a tropical country and the No. 1 problem, the No. 1 enemy of a lithium battery is heat,” she told the BusinessMirror. “And since it’s a moving vehicle, [there’s] force. That’s why it can burn up; that’s why we have an experience of burning jeeps.”

Palomar-Castro said Bemac, “as a Japanese company, cannot allow that” to happen.

“We’re very protective of our name,” she said. “Toshiba is the only battery we tested that can handle the heat of the Philippines without any damage.”

Indeed, researchers from Carnegie Mellon University estimate that battery e-vehicles can consume an average of 15-percent more energy in hot and cold regions of the US. Another challenge that Bemac faced

THESE challenges delayed the project to the point that the National Economic and Development Authority (Neda) said it can already recommend its cancellation.

Neda Deputy Director General for Investment Programming Rolando G. Tungpalan earlier told the BusinessMirror canceling the project is one of the courses of action the government can take in the case of slow-moving projects like the e-trike.

Canceling the project will prevent Filipino taxpayers from paying more commitment fees to the ADB, which is currently funding the project.

Further, delays caused the project to be included on the list of “at risk” projects under the Neda Monitoring and Evaluation Staff Alert Mechanism.

The Alert Mechanism flags projects that require priority monitoring and facilitation by classifying them into “Potential” and “Actual” problem projects based on certain criteria, such as timetable and cost.

Actual-problem projects are further classified into two alert levels: Level I, which is the Early Warning Stage; and Level II, which is the Critical Stage.

The e-trike project was already placed

virgin forest, I would not allow it,” Lopez told the BusinessMirror. She said forests, especially the country’s virgin forests, are important and she would not allow logging that would further compromise the integrity of the country’s ecosystem.

Harvesting in the natural forest, she said, means killing the ecosystem. “[Harvesting] in natural forest, you will kill the ecosystem. Everything. Our water and our survival depend on our forest,” she added.

Lopez said she would encourage the wood industry to establish more plantation forests using open, degraded and denuded forests, to plant trees they need to boost domestic supply, but would only allow the harvesting of 10 percent of what they planted within a certain period.

In other countries, the private sector plants, say, 100 hectares but are allowed to harvest from 10 hectares or 10 percent of the areas of the plantation forests they established, she said. “They only take 10 percent and plant again. That way, you do not decrease the forest. It just has to be done scientifically,” she said.

Director Ricardo L. Calderon of the DENR’s Forest Management Bureau (FMB) has been wooing private-sector investors to establish more plantation forests in support of the National Greening Program (NGP), which aims to plant 1.5 billion trees in 1.5 million hectares from 2010 to 2016.

Former President Benigno S. Aquino III has signed EO 193, expanding the NGP to cover the remaining 7.1 million hectares of open, degraded and denuded forests by 2028.

Calderon added that the country, while still exporting wood and wood-based

products, particularly furniture and manufactured articles, is importing 4.3 million cubic meters of wood.

He said more private-sector investment is needed to meet the country’s current annual wood requirement pegged at 5.3 million cubic meters. This would require forest expansion of at least 300,000 hectares a year.

“We need around 60,000 hectares of mature plantations annually for us to be able to supplement the current requirement, including exports,” he said. “Currently, we are producing only around 1 million cubic meter of wood for the wood industry. That is why we need to import,” he added.

But he said the country can do better by expanding plantation forests, whether in private land or in public land—through various windows offered by the DENR. The private sector can access public lands and establish plantation forests through Integrated Forest Management Agreement (Ifma) and Socialized Industrial Forest Management Agreement (Sifma).

The wood industry, he said, can also tie up with people’s organizations and nongovernmental organizations with Community-based Forest Management Agreement (CBFMA). “We have been telling the wood industry all along. They should show their commitment. They should be planting trees and the one that they planted should be the one they harvest. He said, currently, only around seven Ifmas are dedicated to supplying raw materials to the wood industry.

“There are a lot of windows if they only wanted to plant trees. Planting trees is investment of time, money and effort. Within Ifmas, there are natural forests. But we have

Efficacy

under Alert Level II in the 2014 Official Development Assistance (ODA) Portfolio Review. However, the Neda said the status can change, pending the developments on the delivery of the units and details of the DOE’s action plan.

“From Neda’s perspective, it had a problem in the sense that the project was delayed. Can you imagine, [it was approved in] 2012, and it only became a reality in 2016?”

Palomar-Castro said. “From the government side, there was really four years of lag [time]. But we have to understand, [there were] also changes in administration, etc.”

to get the true market value of the e-trike,” Palomar-Castro explained.

“They put a value based on their perception of how the project can be implemented,” Palomar-Castro said. “And they said something like, ‘If the cost of a tricycle is P125,000, then maybe we can double that; then there’s this X amount of benefits.’”

Assurance

APART from the challenges on the technical specifications, Palomar-Castro said Bemac’s spending has already exceeded the project cost due to the problems in the costing for the units.

She said with the lack of experts in the ADB at the time the project was initially drafted, there was an erroneous computation of the cost of each unit. The cost, Palomar-Castro said, failed to take into account the technical aspects of e-vehicles.

According to her, the ADB cost computation only doubled the cost of an ICE tricycle, resulting to an initial estimate of P250,000 per e-trike.

But given that the specification of the ADB was to use a lithium-ion battery that can last five years, that amount (roughly equivalent to $5,341.05) only covers the cost of the battery alone.

“That’s what, I think, was the failure before the project hit the ground as it failed

PALOMAR-Castro, however, assured the units that Bemac will be delivering to the government have specifications higher than the one that the ADB approved.

She added that Bemac changed functionality issues based on the company’s own research and development and their e-trikes project in areas like Boracay, Aklan.

Palomar-Castro said these modifications to the units were submitted to the DOE and the ADB for their approval. Having no “expert” in e-vehicles, the DOE passed on the responsibility to the ADB to issue the “No Objection Letter,” Palomar-Castro said.

The letters were issued after getting an e-vehicle consultant who, she said, “basically agreed with everything we [Bemac] said.”

“The problem when they started, they didn’t have good EV consultants who really knows how to make [e-vehicles],” PalomarCastro said. “Its easy to draw, but how do you make it work?”

Palomar-Castro said if the government is really serious in creating an e-vehicle industry, it must pour in more support through laws and by investing in the capacity of agencies like the DOE.

been advising them to develop plantations within Ifmas,” he said.

According to Calderon, there are existing Ifmas, Sifmas and CBFMAs, which could be maximized to produce more timber needed by the wood industry.

“They can start planting while protecting the forest they are managing,” he said.

There are around 140 Ifmas covering 1,005,000 hectares; 1,529 Sifma covering around 32,000 hectares; and 1,884 CBFMA covering 1,615,000 hectares. He said under the NGP, the DENR is eyeing to increase their coverage. The wood industry supports livelihood and was once a driver of economic growth, he said.

“It has been an industry way, way back.

The problem is the sustainability of our domestic supply. Over the years, historically, we lost our forest because of the rapid rate of deforestation, our contribution to the economy also decreased,” he explained.

“It takes time to develop the forest, that is why we need a sustained investment in forest development,” he said.

The forestry’s contribution to the economy in terms of GDP two decades ago is 10 percent, he added. Because of the continuous decline of the country’s forest cover, he said, contribution became almost zero.

“Our contribution in terms of GDP, although export products, including furniture, is making a footprint, it remains below 1 percent—point .09 percent,” he said.

Calderon said added that he is briefing the DENR chief about the various programs of the FMB, including the NGP and the Expanded NGP, which would be implemented starting next year.

“I’ve been briefing her on the NGP and

she has specific instruction on focused areamanagement approach. It is like focused area for development. We are doing it right now as a start in the Marikina Watershed Forest Reserve. It is multi-intervention,” he said. He added that Lopez wants the NGP to be an area of economic productivity, consistent with the program’s goals when it was first implemented in 2010.

“Her focus is to uplift the economic conditions of upland dwellers, and she wants the NGP to be a vehicle of economic development. That is why we are sustaining our efforts on high-value crops again for 2017. We will be focusing on coffee, cacao, rubber and other high-value crops.”

As in previous practice, he said the DENR would be tapping communities in the upland areas.

“It would be a more focused area-management approach,” he said. He added that he would ask NGP partners to hold dialogue with the communities more to design plans as to how they would benefit better from the government’s greening program.

Currently, the DENR is working with the PWPA to put in place a forest certification mechanism to boost the wood industry’s competitiveness in the world market, especially with the challenge posed by the Asean economic integration, Calderon said.

“Forest certification would help the wood industry in the open market. It would ensure legality of source and sustainability of the forest where it came from,” he added.

The PWPA has a short list of opportunities under the Duterte administration, optimistic the Philippine wood business environment would be friendlier under President Duterte’s watch.

Cost

DTI. . .

Continued from A1

Authority [Peza] ecozones,”Aldaba told the BusinessMirror.

To create a level-playing field, Aldaba said the so-called domestic ecozones (DEZs) will have to offer the same package of incentives now being enjoyed by export-oriented firms registered with the Peza. This is seen to encourage local industry development.

“Ideally, we want to give the same incent ives to domest ic ecozone locators as those given by the Peza; domestic manufacturers face the same competition anyway,” Aldaba noted.

With a robust domestic manufacturing sector, Aldaba said there would be better supply-chain linkages among companies inside and outside the ecozones.

“This can be done especially for small and medium enterprises that can supply raw materials or intermediate components to enterprises inside the zone, so we can really

intensify the linkage between the ecozone and the domestic economy,” she added.

Peza-registered firms enjoy, among other perks, tax and dutyfree importation of raw materials, capital equipment, machineries and parts. The biggest perk is incometax holiday (ITH), ranging from four to eight years, depending on the type of project registered.

Presently, Peza ecozone locators can only sell up to 30 percent of their output in the domestic market. Beyond that, ecozone locators will have to pay taxes and duties at regular rates. Also in the current system, the 5-percent tax rate on gross income that kicks in after the expiry of the ITH can only be availed of by export-oriented enterprises.

The idea of establishing DEZs was first floated by former Trade Secretary Gregory L. Domingo to inject growth in underdeveloped parts of the country.

Back then, however, the DTI was not keen on doling out the same incentives, particularly the ITH, to DEZ locators. The DTI only wanted to give the perpetual 5-percent tax

on gross income earned, plus tradefacilitation measures.

The DTI also wants the DEZs to be only in least-developed areas and nowhere near Metro Manila.

This time, however, Aldaba said there should be no limitation on the creation of DEZs, noting that these ecozones should begin sprouting in areas where specific industry development could prosper.

“There are legalities that we need to clarify, such as the provision wherein the DEZ locators— to benefit from incentives—must be in least-developed areas. What we’re saying is not just in these areas but, at the same time, where it is really needed,” she said.

The trade officialadded that they hope to identify ways of working around these legalities within the year through consultations with other government agencies and industries, adding that an amendment in necessary laws may be needed.

Aldaba said the government needs to review its trade policies, taking into consideration the dismantling of tariff barriers.

BMReports BusinessMirror

www.businessmirror.com.ph

Tuesday, July 19, 2016 A3

PHL’s arbitration victory may be worth nothing

A

By Recto Mercene

@rectomercene

LTHOUGH the Permanent Court of Arbitration (PCA) has ruled in favor of the Philippines in the case involving land features on the West Philippines Sea (South China Sea), the country still faces a long struggle to enforce its legal victory, according to many experts.

President Duterte, not wanting to antagonize a neighbor and a prospective economic partner, said “we should not flaunt” Manila’s victory against Beijing, as the governments of both countries try to mend their ties.

Foreign Affairs Secretary Perfecto R. Yasay Jr. added that, “We should be magnanimous in our victory.”

Former Ambassador Alberto Encomienda, who studied the West Philippines Sea issue in the last 10 years of his 40 year stay in the Department of Foreign Affairs, reluctantly offered a solution in his book, The South China Sea Issues and Related Core Inter-

ests of the Philippines.

On Chapter 4 of the 239-page book, titled “Suggested way forward in the Spratly archipelago dispute…for both sides,” Encomienda said, “Beyond any fence mending and taking advantage of possible ‘opening of a window or door,’… to be received with constructive attitude on the part of the Philippines…the question would still be a way for a possible new direction… from a peaceful resolution of the Spratly archipelago….’”

“If the Philippines and China would together push back danger and seek opportunity, the peace and development dividend would

not only benefit the two immediately neighboring maritime countries, but the Indo-Pacific region heading toward a higher economic and political integration,” Encomienda added.

Although President Duterte had asked former President Fidel V. Ramos to head a special delegation to the negotiate with China, the former president refused to make a definitive comment regarding the offer saying that Mr. Duterte may have meant it as a joke.

“I think he just made that in jest because I’m busy writing my legacy for you, young people, and China is only one of my areas of interest. I have not seen the offer. I was out of hearing range when he said it.”

Counselor Kristie Kenney of the US State Department admired Duterte’s use of “flaunt.”

“It’s good that in issuing any statement or comment on the ruling, it be a statement that’s restrained, that again leads to dialogue, that doesn’t raise tensions.”

“The goal here is a diplomatic solution to a very complicated problem.

The goal is not to use violence, to be provocative,” Kenney added.

“And so to accept the ruling in a very peaceful way that opens the door for dialogue among the claimant states is, I think, the

Duterte’s first SONA to focus on his legislative agenda

By David Cagahastian

T

@davecaga

he two-week old Duterte administration is currently collecting information on government’s various projects to get the “lay of the land” of the country’s affairs that will be reported in President Duterte’s first State of the Nation Address (Sona) on July 25.

The Office of the Cabinet Secretary said Mr. Duterte had instructed all departments to submit relevant information and statistics on the issues and concerns pertaining their respective offices.

The submissions are part of the ongoing housekeeping of the Duterte administration, after which the government, fully aware of the progress made on the various economic programs, will start to work toward effecting the policies laid down by the President.

“Our job now is to collect the information from the five Cabinet clusters identified by the President to make it more efficient to achieve the government’s goals,” Assistant Secretary Bebeth Moncano told BusinessMirror.

“Then we would be able to coordinate, through the Office of the Cabinet Secretary, the government’s programs to realize the directives given by the President during his impromptu speeches,” she added.

The President earlier designated the Office of the Cabinet Secretary, headed

by Secretary Leoncio Evasco Jr., to coordinate the programs aimed at reducing poverty, which he had promised to cut during his term from the current poverty rate of 25 percent to a rate of around 16 to 17.5 percent.

Development goals

Mr. Duterte’s first Sona on July 25 is expected to apprise the country of the government’s economic program and how these goals can be achieved.

The Development Budget Coordinating Committee (DBCC) has set this year’s GDP growth target at 6 percent to 7 percent. For 2017, GDP growth target is set at 6.5 percent to 7.5 percent, while the targets for the rest of the Duterte administration will be raised to a range of 7 percent to 8 percent.

The national budget to be proposed by the Duterte administration for 2017 amounts to P3.35 trillion, with some P890 billion—equivalent

goal,” she said. The spokesman for the Philippines-Asia Institute for Strategic Studies, lawyer Rafael Tuvera, offered four “misconceptions” about the case just decided by the PCA. He said many people think that the tribunal will decide the ownership of the contested islands and reefs in the West Philippine Sea. “That is misleading and untrue.

The territorial sovereignty issue is beyond the scope of the UN Convention on the Law of the Sea, and does not concern the interpretation or application of the convention.”

“People think that the Philippines’s maritime entitlements [such as fishing rights, resource exploitation rights, etc.] in those disputed areas will be clarified through this arbitration, which is inaccurate and wrong,” he said.

He said it is a general principle of international law that sovereignty over land territory is the basis for the determination of maritime rights. “As the International Court of Justice stated, ‘maritime rights derive from the coastal state’s sovereignty over the land,’ a principle which can be summarized as ‘the land dominates the sea.’”

“Since the court has no jurisdiction on the sovereignty issue in the first place, its rulings can-

not clarify any maritime rights and delimitations entailed from the sovereignty.”

“Without first having determined China’s territorial sovereignty over the maritime features in the South China Sea, the arbitral tribunal will not be in a position to determine the extent to which China may claim maritime rights in the South China Sea pursuant to the convention, not to mention whether China’s claims exceed the extent allowed under the convention. But the issue of territorial sovereignty falls beyond the purview of the convention,” Tuvera said.

Tuvera added that it is inaccurate and untrue to think that the tribunal could implement the ruling.

Western countries can only rely on supposed “international moral pressure [which is clearly neither international nor moral, but political, as the US being the instigator is not even a signatory

to the United Nations Convention on the Law of the Sea] to help implement or impose the ruling on China, but will be unrealistic and in vain,” he said.

Finally, although people might think the Philippines is the biggest winner and benefits the most from the case, Tuvera said it is a mistaken notion. “The biggest winner is the US, which successfully stirred up tensions in this region, consolidated its alliance relationships with some countries, secured more rights to enter and use the military bases in the Philippines and other countries, successfully deployed more forces in the seas of this region and created troubles to deter or disrupt China’s growth of strength and influence.”

He added that the Philippines only ruined its once robust relations with neighbor and traditional friend China, by resorting to the arbitration.

People think that the Philippines’s maritime entitlements in those disputed areas will be clarified through this arbitration, which is inaccurate and wrong.”—Tuvera

China announces South China Sea military exercises

to more than 5 percent of GDP—to be used for infrastructure projects.

Aside from these goals, the Cabinet clusters are expected to come up with feasible plans to accomplish Mr. Duterte’s directives, which he oftentimes presents in his impromptu speeches.

Simple, orderly Sona

Mr. Duterte’s first Sona at the Batasang Pambansa will shun the glamour seen in previous administrations, where politicians and their ladies are dressed to the nines.

“For this Sona, it would be different in a way that we will be minimizing the entourage. We will downplay the event. It will not be like a fashion show. We want to center on the President’s message to the people, because this is his first State of the Nation Address,” said Paola Alvarez, the new spokesman for the Department of Finance (DOF).

“In previous Sonas, most people see the event as an occasion to flaunt their gowns, their dresses. We want to step away from this norm and we want to bring back the real essence of the State of the Nation Address,” Alvarez said.

Presidential Communications Secretary Martin M. Andanar said he would like the Sona be more like its counterpart in Russia, where the solemn event is very orderly.

Alvarez said award-winning director Brillante Mendoza will be the director for Mr. Duterte’s first Sona, and he will ensure the solemnity of the event through some symbolic ceremonies, such as the President being greeted only by the Senate president and the Speaker of the House of Representatives upon his entry, instead of allowing a free-forall meet-and-greet at the Batasan plenary hall.

Legislative agenda

Malacañang officials have yet to confirm what Mr. Duterte’s speech will contain, or whether he would again speak impromptu or read his prepared speech, which is already being written by a group of speechwriters.

However, Alvarez said Mr. Duterte’s legislative agenda would probably be discussed in his speech.

Among the legislative proposals included in the agenda are the taxreform proposals, the shift to federalism, revival of the death penalty for heinous crimes, among others.

In this July 8 photo released by Xinhua News Agency, Chinese navy sailors search for targets onboard the missile destroyer Hefei during a military exercise in the waters near south China’s Hainan Island and Paracel Islands. They are controlled by Beijing but also claimed by Vietnam and Taiwan. AP

C

hina said on Monday that it is closing off a part of the South China Sea for military exercises this week, days after an international tribunal ruled against Beijing’s claim to ownership of virtually the entire strategic waterway.

Hainan’s maritime administration said an area in the southeast of the islandprovince would be closed from Monday to Thursday, but gave no details about the nature of the exercises. The navy and Defense Ministry had no immediate comment. Six governments claim territory in the South China Sea, although the area where the Chinese naval exercises are being held is not considered a particular hot spot. China’s navy and coast guard operate extensively throughout the South China Sea and regularly stage live firing exercises in the area.

The announcement of the military exercises came in the middle of a three-day visit to China by the US Navy’s top admiral to discuss the South China Sea dispute and ways to increase interactions between the two militaries.

Chief of Naval Operations Adm. John Richardson is meeting with China’s navy commander, Adm. Wu Shengli, during his trip to Beijing and the port city of Qingdao

that began on Sunday. He is also scheduled to visit the navy’s submarine academy, tour China’s first aircraft carrier and discuss ongoing Rim of the Pacific military drills.

China rejected last Tuesday’s ruling by The Hague-based Permanent Court of Arbitration in a case initiated by the Philippines, and refused to take part in the arbitration.

It has responded by asserting that islands in the South China Sea are “China’s inherent territory,” and says it could declare an airdefense identification zone over the waters if it felt threatened.

In a further show of defiance, Beijing followed the ruling by landing two civilian aircraft on new airstrips on disputed Mischief and Subi reefs and dispatched its coast guard to block a Philippine fishing boat from reaching a contested shoal.

Dennis Blair, a former commander of US forces in the Pacific, told a congressional hearing on Wednesday that the United States should be willing to use military force to oppose Chinese aggression at a disputed reef off the coast of the Philippines. Blair said the objective of such an action was not to pick a fight with China at the disputed Scarborough Shoal, but to set a limit on its military coercion.

Philippine President Rodrigo R. Duterte,

who said before the ruling that he wanted to start talks with China on the issue, has not commented on the tribunal’s decision, but described the territorial disputes as a complicated issue that may affect the country’s economy, as well as ties with treaty ally the United States.

Duterte has been more conciliatory with China than his predecessor, Benigno D. Aquino III, who filed the arbitration complaint against Beijing.

The tribunal ruled that China violated international maritime law by building up artificial islands in the South China Sea that destroyed coral reefs, and by disrupting fishing and oil exploration.

China’s island development has inflamed regional tensions, with many fearing that Beijing will use the construction of new islands complete with airfields and military facilities to extend its military reach and perhaps try to restrict navigation.

Several times in the past year, US warships have deliberately sailed close to one of those islands to exercise freedom of navigation and challenge the claims. In response, China has deployed fighter jets and ships to track and warn off the American ships, and accused the US of threatening its national security. AP

First we gave you the Harvard Business Review Monday Morning Then came the Turning Points Philippine Edition On August 2, you will start receiving every Tuesday our latest collaboration with The New York Times‌

BusinessSense

The only one in Asia, the BusinessMirror/New York Times BusinessSense brings together select articles, images and infographics from The Economist, NYT DealBook, HBR Wake-Up Call and HBR Monday Morning in a four-page pullout.

BusinessMirror www.businessmirror.com.ph

AseanTuesday BusinessMirror

news@businessmirror.com.ph

Editor: Max V. de Leon • Tuesday, July 19, 2016 A5

Singapore Exchange to tweak policing role

S

ingapore Exchange Ltd. will house regulatory functions in a unit with its own board, following calls to separate the role.

The subsidiary is expected to be set up by the second half of 2017 and will not add to the requirements of Singapore’s initial share-sale process, Southeast Asia’s biggest bourse operator said in a statement on Monday. SGX shares climbed 1.2 percent as of 1:46 p.m. in the city-state, resuming after a morning trading halt following a Straits Times report on the plans.

The structure will help manage potential conflicts of interest between SGX’s regulatory and commercial roles, the Monetary Authority of Singapore (MAS) said on Monday. The New York Stock Exchange (NYSE) has a nonprofit unit that enforces listing standards, while outsourcing some policing functions to an industry watchdog.

“It’s a good start to help enforce the element of independence with a separate board,” said Robson Lee, a capital markets lawyer at Gibson Dunn & Crutcher Llp. in

Singapore. “This helps to address the perceived conflict of interest that SGX has.”

The central bank, which will retain oversight of SGX, said on Monday that it will require the chairman and a majority of the board members of the exchange’s watchdog unit to be independent from SGX. It’s also demanding that the entire board will have no ties to companies listed on the bourse.

‘Effectively separate’

Chief Regulatory Officer Tan Boon Gin will head the unit, according to the exchange. “This arrangement will keep us close to market developments while effectively separate from the commercial side of SGX,” Tan said in the exchange’s statement.

Last year SGX set up a listings advisory committee and boosted its enforcement powers, including being able to impose fines and suspending activities of financial

This arrangement will keep us close to market developments while effectively separate from the commercial side of SGX.”—Tan

Singapore-Sri LANKA FTA Sri Lankan Prime Minister Ranil Wickremesinghe (second from left) and Singaporean Prime Minister Lee Hsien Loong (second from right) together with Malik Samarawickrama (left), minister for Development Strategies and International Trade of Sri Lanka, and S. Iswaran, minister for Trade and Industry of Singapore, after the signing of a joint statement on the launch of Negotiations for a Sri Lanka-Singapore Free Trade Agreement (FTA) and memoranda of understanding at the Istana, or Presidential Palace, on Monday in Singapore. AP advisers who flout listing rules.

MAS in January refined its exchange-regulatory system amid the emergence of rival bourses, such as Intercontinental Exchange Inc. The

Securities Investors Association of Singapore has previously called for MAS to become the nation’s sole capital-markets regulator.

SGX su f fered a f ive -hou r

malfunction on Thursday, which halted stock trading, prompting an apology from its CEO and criticism from the central bank. MAS has ordered the bourse to submit a

“thorough” report, addressing the root cause of the technical glitch, before it decides on a response. SGX has said it will provide details of the probe this week. Bloomberg News

Myanmar rebels satisfied with prep peace talks Asean GREAT making sure women part of econ integration Y ANGON, Myanmar—Representatives of ethnic minorities who have been battling Myanmar’s government for decades said on Monday their meeting with the country’s de-facto leader, Aung San Suu Kyi, was a good beginning, but that the peace process remains an uphill task.

Neither side made any promises in the talks to prepare for substantive peace negotiations in August, said Khu Oo Reh of the United Nationalities Federal Council, a coalition of ethnic rebel groups.

The ethnic groups are particularly interested in securing a political agreement—the subject of the planned August talks—that would meet their long-standing demands for greater autonomy.

“It was just like a family meeting,” he told reporters. “It was a meeting that led to constructive intentions for the future meeting.”

Khu Oo Reh said the Sunday talks did not resolve whether ethnic armed groups, who didn’t sign a 2015 nationwide ceasefire agreement, would participate in the August meeting, considered by both sides to be crucial to restoring peace after more than five decades of mutual mistrust and warfare. Fighting continues

1947

The year when the Panglong Agreement was signed by Aung San Suu Kyi’s father Gen. Aung San and ethnic minority groups

in some areas.

“We have said many times that the government needs to work on the negotiations to stop the offensive attacks by the military on the ground,” Khu Oo Reh said. “We generally understand that the government and the military are aware of that and working on that process.”

Suu Kyi, whose National League for Democracy party in March succeeded a military-backed government, has dubbed the August meeting the 21st-Century Panglong Conference, a reference to the 1947 Panglong Agreement that was signed by her father Gen. Aung San and ethnic minority groups.

Aung San was assassinated before the country became formally independent from Britain, and ethnic groups generally hold his successors responsible for not honoring the 1947 pact, which would have guaranteed them more autonomy.

“All stakeholders, which means all armed groups, must be included,” in the August talks, said Khu Oo Reh. “If any group is excluded, the problem will come back again one day to the country, and the hope that we have on for secure lives, peace and rule of law will fade away.”

He expressed some frustration that Suu Kyi, who holds the official post of state counselor, had asked what the ethnic rebel groups could give to the government.

He said he replied with his own question noting the suffering that many minority groups had undergone in decades of fighting.

“We no longer have any resources left.

Mountains are flattened. The land has become desert-like. Rivers and streams are dried up. Villages are abandoned. People fled from their homes to the jungle and others are now staying in other countries as refugees. What I want to ask is, what are you looking to get from us? What else do we have to give?” AP

Nationalist Buddhist monk Wirathu (center) marches in Mandalay, the second-largest city in Myanmar on September 21, 2015. AP/Hkun Lat

By Rizal Raoul Reyes @brownindio

E

ven women are now active participants of the Asean economic integration through the initiatives of the Asean Gender Responsive Economic Action for the Transformation (GREAT) of Women initiative.

In a recent interview, Jeannie Javellosa, lead of Great Women Collective, said the gender-centric economic activity started as a trade exchange in Kuala Lumpur in Malaysia last year. She said the measure called for a trading of products between the women population of the 10 member-nations of Asean. The Asean is composed of Singapore, Malaysia, Indonesia, Thailand, the Philippines, Vietnam, Lao PDR, Cambodia, Myanmar and Brunei Darussalam.

JUAN Organized in the Philippines in 2012, GREAT Women was developed by the Philippine and Canadian governments and the Empowering Communities with Hope and Opportunities through Sustainable Initiative Foundation to serve as a development tool to empower women, specifically their economic potential. “The Asean GREAT Women program will use the Philippine format,” Javellosa said.

“We want to show Asean integration in action based on a gender platform, which we started three years ago,” Javellosa noted.

The products covered are clothing materials produced by indigenous people, fashion accessories, affordable products and food.

To qualify for the program, a womanentrepreneur must support a community in her entrepreneurial activity. In case the enterprise is owned by a male, it is required that 50 percent of the work force should be women.

“You cannot join the GREAT development program alone. You have to be a part of the community that we can also help through the development program to boost the value chain of the economy. The format of the program is that every woman selling a brand must have a community involved in the project, caring for their community and helping in the value chain,” Javellosa said.

Javellosa noted the local template of bringing communities and indigenous people together w il l be fol lowed by the program.

She pointed out the Philippines can contribute a lot to the program because it has a lot of designers, retailers, product developers and lifestyle experts that are all coming together to support the brand.

“The idea of holding hands together linking with communities and indigenous people is our way in pursuing an inclusive business model,” Javellosa explained.

In explaining their inclusivegrowth model, Javellosa said the GREAT team tapped the Bagobo tribes to make pillows using abaca dye. To make the pillows more appealing to the commercial market, she said the group picked an export company to help them in the marketing of the pillows. In the next five years, she said the Bagobos and the company will be business partners. “We want to develop this project into an inclusive-business model,” she added.

“We also want to teach the tribes because no one is handling them. Slowly, we will involve all tribes and upgrade their design to be neo in nature. We cannot allow our tribes to lost their unique tradition and culture,” she added. Javellosa said the objective is to show the program is working and can be a catalyst for growth.

Chit Juan, the 2017-2018 chairman of the Asean Women Entrepreneur Network, said they plan to hold an entrepreneurs summit for women next year in line with the 50th anniversary of Asean.

The Philippines will host the event.

With a population of 620 million, Juan said the Asean region presents a big potential for trade and has a huge base of women entrepreneurs numbering 300 million.

“Women need to be empowered economically. Since they are doing two tasks— working and managing the home—a lot of woman-entrepreneurs are born out of that need,” she said.

Thitapha Wattangprutipaisan, head of the Asean Cooperatives for Trade and Integration, said the objective is to consolidate the women of Asean so they can work together in developing better products in textile, lifestyle and commodities, like coffee and pepper. “Each country has its strengths that can be shared with other members of Asean for their benefit,” she said.

This July, Asean products from its 10 member-states will have an exhibit at the Tesoro Building in Makati City.

A6

The W

Business

Tuesday, July 19, 2016 • news@businessmirror.com.ph

Trump’s convention could revive GOP– or cause its demise

C

Chinese People’s Liberation Army (PLA) soldiers take part in a flag-raising ceremony during the open day of Stonecutter Island Navy Base in Hong Kong to mark the 19th anniversary of the Hong Kong handover to China on July 1. AP/Kin Cheung

Brazil shipyard goes bust as work returns to Asia

I

f there’s one industry where all of Brazil’s political and economic upheavals come together, it’s shipbuilding.

A Rio de Janeiro shipyard, where suspended President Dilma Rousseff once promised to employ an army of welders, electricians and engineers to make offshore oil platforms, is all but shut.

Every other day, 50 workers on average hand in their helmets and are sent home jobless, according to the yard’s union.

More than 5,000 were on site in late 2014, and by the end of this month they are all expected to be gone.

The Inhauma shipyard is the latest to succumb to a crisis that has wiped out nearly half of the country’s naval-industry jobs in the past two years, leaving companies bankrupt and creditors unpaid. It also represents the failure of Brazil’s plans to build almost from scratch a high-end industry that would compete with Asian yards and supply the most ambitious offshore oil expansion on Earth.

State-controlled Petroleo Brasileiro SA, which had agreed to pay more to have platforms built at home to help jump-start the naval industry, is now sending work back to Asia, underscoring the vulnerabilities of an industry that basically relies on a single client.

Petrobras pumps about 90 percent of Brazil’s oil, and the yards expanded to meet its ambitious expansion plans.

Those plans fell apart after the Rio de Janeiro-based producer buried itself under the biggest debt load in the industry and became the focus of a sprawling corruption scandal.

“It’s a combination of the economic crisis, the political crisis, lower oil prices, the corruption scandal, just everything together,” union leader Jesus Cardoso, who has been helping Inhauma workers with their dismissal rights, said in a phone interview.

Four vessels were supposed to have hulls converted at Inhauma for $1.7 billion, and then collectively pump 600,000 barrels a day, or about 30 percent of Brazil’s current oil production. Two of them were done entirely by Cosco Shipyard Group in China, and a third was only sent to Brazil for final touches. Just one of them, the hull for the P-74 platform, was converted in Brazil, and two years behind schedule.

To meet Petrobras’s expansion plans, Inhauma was fully refurbished by Enseada, an engineering company that has taken collateral damage in an ongoing pay-to-play scandal known as Carwash.

The chief executives of Odebrecht SA, OAS SA and UTC Engenharia SA—companies who together control 70 percent of Enseada—have been convicted of crimes, including corruption and forming a cartel. Bloomberg News

HK pressures China to abandon city’s leader

H

ong Kong is readying another test of China’s willingness to satisfy its democratic yearnings: a crossparty campaign to replace the city’s Beijing-backed but unpopular Chief Executive Leung Chun-ying.

Dubbed “ABC,” for “Anyone But CY Leung,” the effort is gaining steam before September’s Legislative Council elections, the biggest vote since student-led protests shook the city two years ago.

Unlike the Occupy movement, which was supported by the socalled pan-democratic camp, the ABC campaign has attracted figures with pro-establishment leanings, like Liberal Party Honorary Chairman James Tien and Hong Kong Television Network Ltd. Chairman Ricky Wong.

While there’s been no indication China might withdraw support from Leung before his term is up for renewal in March, his critics say replacing him is the only way to break the political stalemate that has gripped post-Occupy Hong Kong.

Leung, who refused protesters’ demands to soften Beijing’s plan for the next chief-executive election, has been blamed for failing to quiet political divides in the city.

Meanwhile, his efforts to cool soaring property prices and curb crowds of shoppers from the Chinese mainland have come at the expense of property developers and retailers already squeezed by China’s slowdown.

Hong Kong’s economy is projected to expand 1.5 percent this year, the slowest pace since 2009, according to data compiled by Bloomberg.

“If CY Leung gets a second term, this is the end,” Martin Lee, 78, an elder statesman among city democrats, told the Hong Kong Foreign

Correspondents’ Club last month.

“If anybody but CY gets in, then we have a future.”

Leung hasn’t said if he’ll seek a second term and told the South China Morning Post last month he might not make up his mind before September. When asked for a response to the ABC campaign, his office referred to a statement from June 29.

“The chief executive stressed that any decision on standing for reelection has nothing to do with the LegCo election,” the government said at the time. “He has repeatedly stated that he would focus on the work at hand for the time being.”

Political insiders

Critics of Leung among the proestablishment camp cite Chief Secretary Carrie Lam, his current No. 2; Financial Secretary John Tsang; and Legislative Council President Jasper Tsang. While none have announced intentions to run, they’ve received support from Beijing over their careers and are more popular than Leung in opinion surveys.

The choice of chief executive offers Beijing a rare chance to acknowledge local concerns, amid dissatisfaction with the “One Country, Two Systems” framework that ensures free markets and freedom of expression in the former British colony. The person is selected by a 1,200-member committee of political insiders dominated by China loyalists, and subject to approval by the central government in Beijing.

Leung, who democracy advocates sometimes mock as “689” for the number of votes he got in 2012, has never been as popular as either of the two previous men chosen under the system. He received an average approval rating of 40.1 out of 100, according to a survey released earlier this month by the University of Hong Kong’s Public Opinion Program. That’s down from 52.5 when he took office and 55.7 for his immediate predecessor, Donald Tsang, at the same point in his tenure.

Wong, who clashed with Leung’s government over its refusal to give HKTV a broadcast license in 2013, is running for legislator in a bid to make the citywide election a referendum on ABC. He hopes Leung’s opponents can win at least half of the 70-seat chamber, where pandemocrats often use their 28 votes to block legislation.

“If we can control the LegCo, then I think we can create significant pressure on Beijing,” Wong said. “They will have to think carefully about whether they continue to support CY or if they have to find a more acceptable solution for Hong Kong people.”

Lawmaker Alan Leong, leader of the prodemocracy Civic Party and an ABC supporter, pointed to the May visit by China’s highestranking official for Hong Kong as evidence that Beijing was considering a more responsive approach.

Though National People’s Congress Chairman Zhang Dejiang expressed satisfaction with Leung, he also met with four pan-democratic lawmakers, whom he said represented “different voices of society,” rather than “the opposition.”

“I hope that Zhang Dejiang’s visit to Hong Kong wasn’t done just for show, and that something real will follow, which represents a beginning of a sea change,” Leong said.

Political calculations for both Leung’s opponents and his supporters have been complicated by the rise of “ localist” groups, who are also looking to use the LegCo election to pressure Beijing. Some of these groups—frustrated by the Occupy protest failure to win concessions

1.5% The projected expansion of Hong Kong’s economy this year, which is the slowest pace since 2009

on greater democracy—advocate self-determination or even independence, a view Chinese officials have denounced as “separatism.”

By abandoning Leung, the Chinese government could risk appearing to make a concession to the more radical democracy advocates. Moreover, some localists have criticized the ABC movement as futile, since it assumes China will still pick the chief executive.

‘Whole arrangement’

“You shouldn’t focus on the CE, on one person,” said Edward Leung, a pro-independence activist who’s vying for LegCo. “The source of the problem is the whole arrangement of the system.”

With the political season approaching, Leung has taken a personal role in responding to concerns dominating local headlines. He’s secured an agreement with Chinese officials to report detentions of city residents faster. The action came months after a man who sold books critical of the Communist Party disappeared off Hong Kong streets, only to reappear on the mainland.

Whether China’s willing to consider alternatives to Leung will depend much on the legislative race, Tien of the Liberal Party said. At least 81 candidates have put themselves forward since the nomination period opened on Saturday.

“If the LegCo election shows that ‘ABC’ is the wish of the Hong Kong people and that momentum goes all the way until March, and polls show he is still unpopular, I am sure that Beijing will make that decision,” Tien said. Bloomberg News

LEVELAND—Will the idea of “Pres dent Donald Trump” seem plausib

by Thursday night? Or will rioting an big-name no-shows take the spotlight o this week’s Republican convention?

The GOP opens its four-day conventio on Monday facing an uncommon amount uncertainty. Such events long ago stoppe being true party meetings, where disagre ments were aired and candidate disput resolved. Since 1980, they’ve been tight choreographed reality shows carefully craf ed to create warm feelings toward the cand date and his party. This convention looks be less scripted, less cohesive. Almost eve hour, every day until Trump finishes his a ceptance speech on Thursday night, the spe ter of craziness looms.

Here are 10 questions whose answe could decide whether Republicans emerg unified, happy and looking ahead, or spen the rest of the summer trying to recover: 1. Can anti-Trump forces succeed? No. But the can grab media attention. They’ll try to g the convention to free delegates to vote fo whomever they want, but that’s expec ed to be quashed quickly and decisivel Trump’s forces are ready. They’ll have su porters positioned around the hall on Mo day, watching their delegates and makin sure they stay in line.

2. Will no-shows get a lot of attention? Hom town reporters will send stories and twee about how their governors, senators, o other Republican officials aren’t ther Ohio Gov. John Kasich, who ran again Trump in the primaries, is not expected the convention, but is expected in Clev land all week.

3. Will protests get more attention than the conve tion? Perhaps. Thousands are expected demonstrate in the city. Not since 196 when thousands clashed with the poli during the Democratic convention in Ch cago, have large-scale protests erupted ou side a convention. If it happens, particula ly in this age of instant video, the media w regard that as more newsworthy than th parade of speakers in the hall.

4. Who will be the breakout stars? Convention can vault little-known political figures in the limelight. Barack Obama’s 2004 Dem cratic keynote speech launched his nation political career. This year’s roster has som potential, particularly since it’s largely collection of nonpolitical figures likely tell personal stories rather than promote R publican ideology.

5. Will Ted Cruz shine? He has 559 of the 2,47 delegates, but an estimated twice that num ber are viewed as fans. Cruz is a dynam speaker with an eye on 2020 and his bac ers are wary of vice-presidential pick Mik Pence as giving in too quickly to critics a religious freedom law widely criticized a antigay.

6. Will anyone remember Pence? Conservativ love him, but most voters forget vice-pre idential candidates after their acceptan speeches. Trump demonstrated on Saturda in introducing Pence that the Indiana gove nor is a bit player. He’ll be seen again in th October 4 vice-presidential debate.

7. How much will recent tragedies matter? Conven tions are usually song- and balloon-fille celebratory affairs. Republicans have to b careful this time, since the past few weeks hav seen 49 killed by a gunman in Orlando, fiv police officers slain in Dallas and three th weekend in Baton Rouge, and 84 killed by truck in Nice. The chief response: “We’re g ing to declare war against ISIS [Islamic Sta in Iraq and Syria],” Trump said on CBS’s 6 Minutes on Sunday.

8. Can Democrat-bashing go too far? GOP leade see Democrat Hillary Clinton as everythin they’re opposing—an establishment figur liberal, unable to shake controversy—an therefore, a unifying force for them. There a risk, because going too far in demonizin her could very well alienate the undecide voters the party needs to attract.

9. Will Trump be Trump? The toughest questio of all. The acceptance speech, the conve tion’s closing act, is the moment he can sho dubious voters he has the gravitas, temper ment and judgment to be president. It’s speech that traditionally touches on both th personal and the visionary, though Trum campaign manager Paul Manafort says th speech will be “a more personal message.” V sion? He tends to ramble, to dart from on topic to another, to repeat himself. His su porters love it; he’s not the usual politicia they say.

10. Will Trump get a lasting bounce? Candidat usually gain a few points in polls after the conventions (and often lose them quickly Trump, though, is already well known, an already widely disliked. Can one conventio or one speech, change that? TNS

World

sMirror

n

sible nd off

on of ed eetes tly ftdito ery acec-

ers ge nd

ey get or ctly. ponng

meets or re. nst at ve-

ento 68, ice hiutarwill he

ns nto monal me a to Re-

72 mmic ckke of as

ves esnce ay erhe

ned be ave ve his ya goate 60

ers ng re, nd, is ng ed

on enow raa he mp he Vine upan,

tes eir y). nd on,

Tuesday, July 19, 2016 A7

Turkey’s coup failed, but investors on edge

F

resh from an election victory that secured his party’s rule for four years, Prime Minister Ahmet Davutoglu in January assured investors in London that Turkey was a safe place for their cash. Four months later he was forced to resign and two months on from that, F-16 fighter jets bombed parliament in a coup attempt.

Already embroiled in Syria’s war, a conflict with the Kurds and beset by a string of terrorist attacks, Friday’s failed plot to topple President Recep Tayyip Erdogan risks shattering what’s left of Turkey’s image as a stable country that can attract enough investment to finance one of the highest current-account deficits among Group of 20 (G-20) economies.

“It’s not going to be business as usual,” said Brian Jacobsen, chief portfolio strategist with Wells Fargo Funds Management Llc., which oversees $242 billion. “We are probably going to see foreign capital fleeing the country, because the political instability creates additional risks that investors don’t need.”

After more than a decade in power, the unrest threatens to further erode Erdogan’s legacy as the man who helped Turkey turn the page on years of turmoil that culminated in hyper-inflation and bank failures before the AK Party he cofounded won elections in 2002.

Opponents blame the instability on the 62-year old leader’s quest to consolidate power into his office instead of parliament. He says a presidential system serves Turkey’s interests best.

Hours before tanks rolled through the streets of Ankara and Istanbul to seize power, things didn’t look that bad for Turkey’s assets.

Helped by speculation that global interest rates would remain low,

and optimism over Erdogan’s move to repair ties with Russia and Israel, the lira had rebounded more than 6 percent from a record reached out last September. The benchmark stock index rose 0.3 percent at the close on Friday, extending this year’s gain to 15 percent.

That confidence evaporated when an army faction announced the coup on Friday, with the currency plunging almost 6 percent against the dollar. As confusion reigned over Erdogan’s fate, global stocks retreated and an exchange-traded fund tied to Turkish shares fell 2.5 percent.

By Saturday morning, the president and his supporters had restored order and moved swiftly to exact revenge on their opponents.

More than 6,000 people, including military personnel, judges and prosecutors, were detained.

The lira trimmed some of its losses early on Monday, trading at 2.9571 per dollar as of 7:15 a.m. in Istanbul.

Some investors said they’ll now want to see to what extent the crackdown tightens the Islamic-rooted AKP’s hold on power and enables Erdogan to bolster his authority.

‘Iron fist’

“The unsuccessful coup means that Erdogan will make political and economic changes, potentially tighten the grip on sectors of the country’s economy, and drop an iron fist on his opponents,” Bruce

Protesters hold Turkish flags as they gather in Taksim Square in Istanbul on Sunday.

The Turkish government accelerated its crackdown on alleged plotters of the failed coup against President Recep Tayyip Erdogan, with the justice minister saying on Sunday that 6,000 people had been detained in the investigation, including three of the country’s top generals and hundreds of soldiers. AP/Petros Giannakouris

6%

The percentage of Turkey’s currency plunge against the dollar on Friday, when an army faction announced the coup

McCain, who helps oversee $35 billion as chief investment strategist at Key Private Bank in Cleveland, said in a phone interview.

“This might be a long-term process, but this can mean that Turkey will be a no-fly zone for investors a few years down the road,” he said.

Capital flight would damage Erdogan’s pledge to turn Turkey into

one of the world’s biggest 10 economies by 2023, a century after Mustafa Kemal Ataturk founded the republic. He’s also building a financial center on the Asian side of Istanbul to serve as a regional banking hub.

On Sunday, the central bank said it would provide unlimited liquidity to banks and take necessary action to ensure financial stability. Deputy Prime Minister Mehmet Simsek also sought to reassure investors.

Solid fundamentals

“No need to worry,” the former Merrill Lynch banker said on Twitter. “Turkey is normalizing rapidly after the coup attempt was repelled by the nation. Our country’s macroeconomic foundations are solid.”

Even as global economic growth struggles, Turkey’s GDP has beaten estimates since the fourth quarter of 2014, thanks to rising household spending driven in part by millions of Syrian refugees. The economy

grew 4.8 percent in the first three months this year.

Steve Hooker, managing director and portfolio manager at Newfleet Asset Management Llc., said investors may overreact when the market opens and “create an interesting buying opportunity for longterm investors.”

“The short term is likely to remain volatile,” he said.

Central bank data show how Turkey is struggling to attract more long-term investment.

Of $15.8 billion foreigners poured into the country in the first five months this year, only $2.3 billion were in net direct investments, down 50 percent from the same period a year earlier. The rest were inflows into its stocks and bonds, or so-called hot money, as well as other investments, such as loans to banks and companies.

Attacks by Islamic State followers that killed hundreds in Ankara

and Istanbul—including a suicide bombing at its main international airport—have battered tourism, a source of foreign cash needed to finance the current-account deficit.

The shortfall is set to reach 4.5 percent of GDP this year, the thirdhighest among G-20 members, according to estimates compiled by Bloomberg. Economic growth for the year is set to slow to 3.5 percent, according to a Bloomberg survey of economists.

“Turkey’s political climate is about to become even more oppressive and authoritarian,” according to an e-mailed note by analysts Naz Masraff and James Sawyer at political risk consultants Eurasia Group.

“With an attempted coup of this scale, investors already cautious due to past crises will be even more skeptical about Turkey’s business environment and the government’s ability to maintain macroeconomic stability.” Bloomberg News

China home-price Holy cow-urine industry gets boost from Modi’s pro-Hindu agenda C gains taper off C

hina’s home-price gains tapered off last month, as second-tier cities joined some of the nation’s largest hubs in imposing housing curbs to cool surging prices.

New-home prices, excluding government-subsidized housing, climbed in 55 cities in June, down from 60 in May, among the 70 tracked, the National Bureau of Statistics (NBS) said on Monday.

Prices dropped in 10 cities, compared with four a month earlier. They were unchanged in five cities in June.

A surge in home prices showed signs of slowing after more regional hubs followed top cities Shanghai and Shenzhen in imposing curbs designed to stem a surge in property prices. Local authorities raised mortgage downpayment requirements for some homes in Xiamen, a southern port city in the Fujian province, and Hefei, the provincial capital of Anhui, where housing prices led gains in May. “We probably won’t see any abrupt decline in prices or sales this year, but the outlook for next year is pretty blurry,” Alan Jin, a Hong Kong-based analyst at Mizuho Securities Asia Ltd., said by phone. “In those cities where prices jumped, pent-up demand has almost been fully released. The demand, from either end users or speculative investors, is not unlimited.”

Transactions ‘peaked’

Home sales moderated for a second straight month in June, with a slower increase in property-development investment, raising questions on the sustainability of a rally fueled by credit stimulus from the government.

The value of homes sold rose 22 percent last month from a year earlier, according to Bloomberg calculations based on data the NBS released on Friday. The increase compares with a 32.9-percent increase the previous month and is down from a year-on-year gain of 71 percent recorded in March.

Property transactions “peaked” in the second quarter, as pent-up demand released under intensive stimulus last year ran its course, said Harrison Hu, chief economist for Greater China at Royal Bank of Scotland Group Plc. in Singapore.

Supporting economy

A rally in the housing market has supported China’s overall economic growth this year, even as it shows some signs of flagging. Economic output by realestate brokers surged 8.8 percent from a year earlier in the April-to-June period, while construction activities jumped 7.3 percent, data from the NBS showed on Saturday. The nation’s GDP grew 6.7 percent in that period.

Out of 55 cities with price gains last month, 33 had slower increases than in May, leading overall growth to “contract,” according to the statistics bureau.

The average new-home price rose 0.71 percent in June from May, down from the 0.84 percent in the previous month, according to Bloomberg calculations based on government data.

Price gains in some second-tier hubs cooled from record-high paces in the past two months. Hefei led gains in June with a 4.9-percent jump from the prior month, slowing from 5.1 percent in May. Bloomberg News

arrying a large aluminum bowl, Susheela Kumari bustles around the back ends of two dozen cows in a shelter in northern India, ready for a lifted tail or squat that could signal an impending tinkle from one of her charges.

Distilled urine from female cattle currently fetches at least as much as milk in India and Kumari’s boss doesn’t want to waste a drop. As it is, she and two other attendants who work around the clock in a cow shed in Bulandshahar, 80 kilometers east of New Delhi, collect barely half the 15-to-20 liters of fluid the animals pass daily.

Urine from India’s indigenous Bos indicus cows, which are considered sacred by Hindus, is a hot commodity. That’s thanks, in large part, to Prime Minister Narendra Modi, who’s introduced programs over the past two years to protect the milkproducing animals and support industries derived from their waste. Modi’s government has spent 5.8 billion rupees ($87 million) on cow shelters, intensified enforcement of beef-eating bans and tightened measures to stop the illicit sale of cattle to neighboring Bangladesh.

Home remedies

“Around 30 remedies can be prepared at home with cow urine,” said Sunil Mansinghka, chief coordinator at Go-Vigyan Anusandhan Kendra, a cow-focused research organization in Nagpur that’s supported by two Hindu groups. “It’s our foremost ambition to reach the elixir to our countrymen.”

In the cow shelter in Bulandshahar, in Uttar Pradesh state, attendant Kumari is careful not to spill any of the golden liquid she collects in her bowl.

“The most difficult task is to collect cow urine because how do you know when an animal will actually do it?” said Vikash Chandra Gupta, who partnered

with the cow shelter in Bulandshahar last year for starting his cow-urine business. “The attendants take clues from the animals’ movements and try to identify patterns in urination.”

The pungent-smelling booty is poured into a crude distiller to remove impurities.

The distillate can be reduced further to a powder form or sold as a liquid concentrate to various makers of traditional medicines and herbal remedies.

Not satisfied

Subramanian Swamy, a member of Modi’s Hindu-dominant Bharatiya Janata Party and who serves in India’s Upper House, isn’t satisfied with existing cowprotection efforts.

The Harvard-educated Hindu economist is calling for the removal of more than a dozen export subsidies on buffalo meat, of which India is the world’s largest exporter. A loophole in the policy encourages cows to be slaughtered and their meat passed off as buffalo, he says.

One enthusiastic cow-urine buyer is yoga guru Baba Ramdev, whose budding consumer-goods empire is challenging local units of Colgate-Palmolive Co., Unilever and Nestlé SA. The saffron-robe clad yoga teacher and anticorruption campaigner pays 150,000 rupees a day for a steady stream of the raw material that his company Patanjali Ayurveda Ltd. uses to make into soaps, disinfectants to elixirs.

Patanjali’s best seller is urine-based floor-cleaner Gaunyle, according to Managing Director Acharya Balkrishna. “We prepare 20 tons of Gaunyle a day and still can’t meet demand,” he said in a phone interview. Proponents of ayurveda, a holistic healing system developed thousands of years ago in India, say the urine, or gomutra, of an Indian cow contains

special therapeutic properties and health benefits.

Traces of gold are found in the urine of cows from the local Gir breed, scientists at Junagadh Agricultural University, in Modi’s home state of Gujarat, concluded in June after analyzing 400 specimens.

Interfaith conflict

In cow-worshiping India, the increased protection and reverence given to the hump-backed, droopy-eared creatures have become a source of interfaith conflict, given its conservative Hindu agenda.

Two Muslim men were forced to eat dung by a cow-protection group as punishment for allegedly transporting beef in the northern state of Haryana in June—one of the latest cases of beef vigilantism that turned deadly on at least three occasions last year.

To prevent unproductive cows being sent to the abattoir, the government started the so-called Rashtriya Gokul Mission in mid-2014, a national program that entails, among other things, constructing havens for retired, ailing and barren bovines. Proceeds from the animals’ bodily waste are intended to pay for their board and keep.

Modi’s government in May held an inaugural national conference on cow shelters, or gaushalas in Hindi, where two members of his Cabinet encouraged thousands of attendees to monetize less savory bovine byproducts. The state of Rajasthan has gone further, creating a ministry of cow affairs to advocate for an animal, which, some critics say, has more rights than the country’s 2 million homeless citizens.

Disease source?

It’s also possible that the liquid harbors potentially dangerous pathogens.

India-trained veterinarian Navneet Dhand, who is an associate professor in veterinary biostatistics and epidemiology at the University of Sydney, points to three diseases prevalent in India that could potentially be transmitted to people in the raw urine of infected cows: leptospirosis, which can cause meningitis and liver failure; arthritiscausing brucellosis; and Q-fever, which can cause pneumonia and chronic inflammation of the heart.

That’s not dissuading Jain’s Cow Urine Therapy Health Clinic, which buys 25,000 liters of cow urine a month from a dozen gaushalas. Virendar Kumar Jain, who founded the 15-doctor practice in the central Indian city of Indore, said his center has administered urine-derived medicines to 1.2 million patients over the past two decades for ailments from cancer to endocrine disorders, such as diabetes.

His staff field inquiries from 4,000 online patients daily, Jain said. Consumers can also buy the products via e-commerce web sites, such as Amazon. He estimates cow attendants can make 1,200 rupees a month from the sale of a cow’s liquid waste, which can easily pay for the beast’s upkeep.

Urine distillate sells for about 80 rupees to 100 rupees ($1.20 to $1.50) a liter, says Balkrishna of Patanjali. Still, the value of cow urine is not a great incentive for keeping unproductive cows until their dying day, said Pankaj Navani, a former engineer whose 300-cow Binsar Farms produces 2,200 liters of milk a day. The lifespan of a cow is about 15 years, though most stop producing milk years earlier.

Navani’s herd, which was established in 2012, is still relatively young and he’s yet to face the challenge of what to do with his former milkers, he said. “A more logical policy approach is required to deal with the issue in general,” Navani said. Bloomberg News

A8

Tuesday, July 19, 2016

The World BusinessMirror

Colombia rethinking its drug war as coca making a comeback

news@businessmirror.com.ph

Ex-Marine kills 3 Baton Rouge officers, wounds 3

A police officer picks coca leaves as he gives a tour of an experimental coca field at Los Pijaos police training base in San Luis, Colombia, where procedures and equipment are tested against coca growers’ ever-changing techniques. AP/Fernando Vergara

E

SPINAL, Colombia—Explosives experts wearing heavy body armor light a fuse and take cover behind a concrete-reinforced trench. “Fire in the area!” a commando shouts before a deafening blast ricochets across the Andean foothills and sends a plume of brown smoke 30 meters high.

Such drills have intensified for Colombia’s military, one of the most battle-tested in the world, as it tries to control skyrocketing cocaine production that has fueled a half-century of war with leftist guerrillas.

After six straight years of declining or steady production, the amount of land under coca cultivation in Colombia began rising in 2014 and jumped 42 percent last year to 159,000 hectares, according to the US government.

That’s an area twice the size of New York City, and after much production shifted to Peru over the past decade, the United Nations said recently that Colombia is once again the world’s largest supplier of the drug.

The military training exercises simulate the charges that troops typically use to blow up land mines protecting coca crops in areas dominated by the Revolutionary Armed Forces of Colombia, the rebel group known as the FARC. Once the mines are destroyed, civilians move in to dig up the plants.

Troops have had to wipe out coca plants manually since last year, when President Juan Manuel Santos ended a two-decade-old aerial eradication program over health concerns signaled in a World Health Organization (WHO)-sponsored report reclassifying the chemical herbicide glyphosate as a carcinogen.

But amid rising cocaine production, Colombia is being forced to rethink its antidrug strategy again, taking into account the possibility of a more stable future now that the government has reached a cease-fire deal with rebels that will take effect once a final accord is signed, probably in the coming weeks.

If and when that happens, the military is hopeful it will be able to shift its energy and resources from fighting rebels to pursuing top drug traffickers.

In the meantime, Defense Minister Luis Carlos Villegas insists that Colombia’s military is not easing up on eradication, as was suggested in June in Senate testimony by the State Department’s top anti-narcotics official.

“We haven’t renounced the war on drugs,” Villegas said in an interview.

“Nobody in the world has produced more dead, more blood, or more resources than Colombia.”

As proof, he points out the government’s scaling up of manual eradication to replace the nowgrounded crop duster plans that were piloted by Americans. In the coming months, Colombia will quadruple to around 200 the number of eradication crews, each comprised of about two dozen civilians escorted by a much-larger security detail of sharpshooters, paramedics and land mine-removal teams.

It’s dangerous work. In the last 15 years, 153 people on manual eradication teams have been killed, the majority from exploding land mines or booby traps, according to the antinarcotics police. More than 500 have lost limbs or suffered serious injuries.

It’s also costly and slow-going: On an average day, each crew can only clear about a hectare. That’s why the government has managed to eradicate only about 9,000 hectares of coca fields this year compared to the 172,000

159,000 ha The amount of land under coca cultivation in Colombia which rose by 42 percent last year hectares annually at the height of the fumigation program a decade ago.

With some people warning that Colombia will soon be awash in coca because the manual eradication process moves so slowly, Santos earlier this year decided to bring back pesticides on a more limited—and what he says is safer—basis.

Starting later this year, crews will be equipped with hazardous materials suits and motor-powered sprayers worn on their backs, allowing them to spread a glyphosate substitute over longer distances.

But even those committed to the program’s success recognize its limitations and yearn for a return to the days of fumigation.

“Without a doubt, the results aren’t going to be sufficient,” Capt.

Manuel Perez, a police special forces instructor, said between loud blasts at Los Pijaos training base, a drive of a few hours south of Bogota.

Elsewhere on the sprawling base, in an experimental field growing 23 varieties of coca, procedures and equipment are being tested against growers’ ever-changing techniques.

The biggest concern lately is a strain called Boliviana negra—Black Bolivian, also known as “Supercoca,” which is found in the southern jungles and being studied for its resistance to the herbicide.

However strong the government’s eradication effort, the new strategy’s linchpin is the FARC. The group has long funded its insurgency by levying a “war tax” on cocaine shipments moving through areas it controls.

But as part of peace talks, it has already agreed to abandon the business and join the government in an alternative development program to wean an estimated 64,000 mostly peasant families off the drug trade. Although details are scarce, the two sides in July made public a pilot project in western Antioquia state near where they’re already removing land mines together.

Conservative critics of Santos see his plan as tailor-made to appease the rebels, who have long compared the fumigation with glyphosate to the US military’s use of the defoliant Agent Orange during the Vietnam war.

Experts say FARC members are taking advantage of the relative safety provided by the end of fumigation, as well as the long build-up to a peace deal, to urge farmers to increase coca production so they will be well-positioned to receive government assistance when hostilities cease.

Meanwhile, the coca growers have little faith the government can deliver. A visit earlier this year by The Associated Press to a FARC-controlled area in Antioquia found some coca growers bracing for confrontation and showing no sign of slowing down.

“We’ll fight whoever comes and touches our plants,” said Fernando Zapata, head of a community council in the tiny hamlet of San Isidro, his hands swollen green from so many years stripping coca leaves from its knobby bush. “We’re organized and will fight to the death if necessary.

They want to stop us from feeding our families.” AP

Baton Rouge police officer Randy Bonaventure takes a bouquet of flowers from a motorist at the Our Lady of the Lake Hospital, where the police officers were brought on Sunday. Multiple law-enforcement officers were killed and wounded on Sunday morning in a shooting near a gas station in Baton Rouge. Henrietta Wildsmith/The Times via AP

B

ATON ROUGE, Louisiana—A former Marine dressed in black and carrying extra ammunition shot and killed three Baton Rouge law-enforcement officers on Sunday, less than two weeks after a black man was fatally shot by police here in a confrontation that sparked nightly protests that reverberated Three other officers were wounded, one critically. The police said the gunman was killed at the scene.

The shooting less than a mile from police headquarters added to the tensions across the country between the black community and police.

Just days earlier, one of the slain officers had posted an emotional Facebook message about the challenges of police work in the current environment.

President Barack Obama urged Americans to tamp down inflammatory words and actions.

“We don’t need careless accusations thrown around to score political points or to advance an agenda. We need to temper our words and open our hearts...all of us,” Obama said.

The gunman was identified as Gavin Long of Kansas City, who turned 29 on Sunday.

Long, who was black, served in the Marines from 2005 to 2010, reaching the rank of sergeant. He was deployed to Iraq from June 2008 to January 2009, according to military records.

Although he was believed to be the only person who fired at officers, authorities were investigating whether he had some kind of help.

“We are not ready to say he acted alone,” State Police Spokesman Major Doug Cain said. Two “persons of interest” were detained for questioning in the nearby town of Addis.

They were later released without any

charges being filed.

While in the military, Long was awarded several medals, including one for good conduct, and received an honorable discharge. His occupational expertise was listed as “datanetwork specialist.”

The University of Alabama issued a statement saying Long attended classes for one semester in the spring of 2012. A school spokesman said university police had no interactions with him.

In Kansas City police officers, some with guns drawn, converged on a house listed as Long’s.

It was the fourth high-profile deadly encounter in the United States involving police over the past two weeks. In all, the violence has cost the lives of eight officers, including those in Baton Rouge, and two civilians, and sparked a national debate over race and policing.

Authorities initially believed that additional assailants might be at large, but hours later said there were no other active shooters. They did not discuss the gunman’s motive or any relationship to the wider police conflicts.

The shooting began at a gas station on Airline Highway. According to radio traffic, Baton Rouge police answered a report of a man with an assault rifle and were met by gunfire. For several long minutes, they did not know where it was coming from.

The radio exchanges were made

public on Sunday by the web site Broadcastify.

Nearly two-and-a-half minutes after the first report of an officer getting shot, an officer on the scene is heard saying police do not know the shooter’s location.

Almost six minutes pass after the first shots are reported before the police say they have determined the shooter’s location.

About 30 seconds later, someone says shots are still being fired.

The recording lasts about 17 minutes and includes urgent calls for an armored personnel carrier called a BearCat. “There simply is no place for more violence,” Gov. John Bel Edwards said. “It doesn’t further the conversation. It doesn’t address any injustice perceived or real. It is just an injustice in and of itself.”

From his window, Joshua Godwin said he saw the suspect, who was dressed in black with a ski mask, combat boots and extra bullets. He appeared to be running “from an altercation.”

Mike Spring awoke at a nearby house to a sound that he thought was from firecrackers. The noise went on for five to 10 minutes, getting louder.

Of the two officers who survived the shooting, one was hospitalized in critical condition and the other was in fair condition. Another officer was being treated for nonlifethreatening injuries, hospital officials said.

Two of the slain officers were from the Baton Rouge Police Department: 32-year-old Montrell Jackson, who had been on the force for a decade; and 41-year-old Matthew Gerald, who had been there for less than a year.

The third fatality was Brad Garafola, 45, a 24-year veteran of the East Baton Rouge Sheriff’s Office.

Jackson, who was black, posted his message on Facebook on July 8, just three days after the death of 37-year-old Alton Sterling, a black man killed by white Baton Rouge officers after a scuffle at a convenience store.

In the message, Jackson said he was physically and emotionally tired and complained that, while in uniform, he gets nasty looks. When he’s

out of uniform, he said, some people consider him a threat.

A friend of Jackson’s family, Erika Green, confirmed the posting, which is no longer on Facebook. A screenshot of the image was circulating widely on the Internet.

Police-community relations in Baton Rouge have been especially tense since Sterling’s death. The killing was captured on cell-phone video.

It was followed a day later by the shooting death of another black man in Minnesota, whose girlfriend livestreamed the aftermath of his death on Facebook. The next day, a black gunman in Dallas opened fire on police at a protest about the police shootings, killing five officers and heightening tensions even further.

Thousands of people protested Sterling’s death, and Baton Rouge police arrested more than 200 demonstrators.

Sterling’s nephew condemned the killing of the three Baton Rouge officers. Terrance Carter spoke on Sunday to The Associated Press by telephone, saying the family just wants peace.

“My uncle wouldn’t want this,” Carter said. “He wasn’t this type of man.

A few yards from a police roadblock on Airline Highway, Keimani Gardner was in the parking lot of a warehouse store that would ordinarily be bustling on a Sunday afternoon. He and his girlfriend both work there. But the store was closed because of the shooting.

“It’s crazy....I understand some people feel like enough is enough with, you know, the black community being shot,” said Gardner, an African-American. “But honestly, you can’t solve violence with violence.”

Michelle Rogers and her husband drove near the shooting scene, but were blocked at an intersection closed by the police.

“I can’t explain what brought us here,” she said. “We just said a prayer in the car for the families.”

Also on Sunday, a domestic-violence suspect opened fire on a Milwaukee police officer who was sitting in his squad car. The officer was seriously wounded, and the suspect fled and apparently killed himself, authorities said. AP

The World BusinessMirror

news@businessmirror.com.ph

briefs

France: No signs truck attacker linked to extremist network

PARIS—France’s interior minister said investigators have no evidence so far that the truck driver who killed 84 people in Nice had links to “terrorist networks.”

Bernard Cazeneuve said on Monday on RTL radio that, while the Islamic State (IS) group has claimed responsibility for the Bastille Day attack, the driver may have been motivated by IS messages but not necessarily coordinating with a larger network. Cazeneuve said: “These links for now have not been established by the investigation.”

Authorities said Mohamed Lahouaiej Bouhlel, a Tunisian living in Nice, had become recently and rapidly radicalized.

Cazeneuve said 59 people are still hospitalized after the attack on Thursday, 29 of them in intensive care, out of 308 people injured overall. Many of the dead and injured were children watching a fireworks display with their families. AP

Editor: Lyn Resurreccion • Tuesday, July 19, 2016

123,000 Venezuelans cross border to shop for scarce food, medicines Voters split over securing US from illegal immigrants

W

Senior S. Korean prosecutor arrested for alleged corruption SEOUL, South Korea—A senior South Korean prosecutor has been arrested for allegedly pocketing millions of dollars following shady stock-transaction deals with a leading online game maker, officials said on Monday.

Jin Kyung-joon, a vice ministerial-level official, was arrested and put to a detention facility on Sunday, according to the Justice Ministry. He is the most seniorlevel incumbent prosecutor to be arrested in the country.

South Korea, a vibrant, liberal democracy, is one of the leading economies in Asia, but corruption scandals involving high-profile officials, politicians and businessmen still routinely take place. Many South Korean presidents or their family members and key aides have been embroiled in corruption scandals at the close of their terms or after leaving office. Some high-level prosecutors were forced to resign before they were arrested and put behind bars for bribery, abuse of power and other charges. AP

China suspends 3 execs after typhoon killed 83 BEIJING—The Chinese government has suspended three officials in an eastern province after a strong tropical storm killed 83 people and left 19 others missing, an official news agency reported on Monday.

Typhoon Nepartak, which had weakened to a tropical storm when it hit China, toppled nearly 10,000 houses in eastern Fujian province’s capital of Fuzhou over the past week, Xinhua News Agency said.

The county of Minqing was the worst hit, reporting 73 deaths and 17 missing, and widespread cuts to power and telecommunications services, the report said.

The county’s Deputy Party Chief and Acting Head, Huang Shiyang, and two other officials have been suspended from their duties, Xinhua said. AP

A9

A woman carrying a bundle on her head waits in line to cross the border into Colombia through the Simon Bolivar bridge in San Antonio del Tachira, Venezuela, on Sunday. Tens of thousands of Venezuelans crossed the border into Colombia on Sunday for food and medicine. AP/Ariana Cubillos

S

AN ANTONIO DEL TACHIRA, Venezuela—More than 100,000 Venezuelans, some of whom drove through the night in caravans, crossed into Colombia over the weekend to hunt for food and medicine that are in short supply at home.

It was the second weekend in a row that Venezuela’s socialist government opened the long-closed border with Colombia, and by 6 a.m. on Sunday, a line of would-be shoppers snaked through the entire town of San Antonio del Tachira.

Some had traveled in chartered buses from cities 10 hours away.

Venezuela’s government closed all crossings a year ago to crack down on smuggling along the 2,219-kilometer border. It complained that speculators were causing shortages by buying up subsidized food and gasoline in Venezuela and taking them to Colombia, where they could be sold for far higher prices.

But shortages have continued to mount in Venezuela amid triple-digit inflation, currency controls that have restricted imports and investment and the world oil-price slump that caused a collapse in the oil revenues that fund government spending.

Although the border was heavily patrolled by Venezuelan troops, the crowds were mostly orderly amid an atmosphere of tense excitement.

A few activists handed out antigovernment pamphlets, looking to galvanize the frustration that has characterized food riots and long lines outside supermarkets in recent weeks.

Some of those waiting to cross

made antigovernment chants and sang the national anthem, but there was no appetite for confrontation. They were focused on the prospect of getting at fully stocked supermarket shelves and the opportunity to buy even nonessential indulgences like nail polish and beer, before the reclosing of border crossings on Sunday night.

“It’s kind of crazy day,” said Alejandro Chacon, who owns a hardware store in the nearby town of San Cristobal and was crossing the border for the first time since the closure. “It’s strange to see this, but we know we’re going to find what we want in Colombia, so it’s a nice difference.”

Colombian officials dressed in white shirts individually welcomed those arriving while the police handed out cake and blasted out festive vallenato tunes, the traditional music beloved on both sides of the border. Roadside kiosks set up by entrepreneurs took payment in Venezuela’s currency for goods at a steep discount from what they cost on the black market back home.

“It’s sad to be doing this, but we also know over there we’ll find something,” said Rosa Cardenas, a 70-year-old retired school-teacher accompanied by a 5-month-old granddaughter.

Colombian officials estimated

2,219 km The length of the border between Venezuela and Colombia 35,000 Venezuelans crossed the border on Saturday, the first day of what Colombia’s government called a humanitarian corridor. An additional 88,000 entered on Sunday, authorities said as the mad rush on products, like sugar and flour, led to extra supplies of staple goods being sent from other Colombian cities.

Venezuelan President Nicolas Maduro has sought to deflate talk of a humanitarian crisis and, instead, blames his government’s political enemies and self-serving smugglers for shortages.

He dismissed as a “media show” the jarring images a few weeks ago of 500 women pushing through the border checkpoint, saying they were desperate to buy food.

On Sunday Venezuela’s state TV ran footage of Venezuelans returning from Colombia empty-handed, dissuaded by what they called “price-gouging” and the threat of violence by their neighbors. AP

ASHINGTON—Most Americans reject Donald Trump’s proposal to build a wall along the US border with Mexico and his support for deporting those in the country illegally. But they’re divided on the presumptive Republican nominee’s proposed temporary ban on the entry of Muslims from other countries, a new survey finds.

The poll shows Trump’s shifting rhetoric on that ban might win some Americans over.

When it comes to Trump’s proposal to build a wall along the Mexican border, about 6 in 10 Americans oppose the idea while 4 in 10 are for it, the new Associated Press-GfK poll indicated.

Similarly, 6 in 10 Americans favor providing a way for immigrants who are in the country illegally to become US citizens, while about 4 in 10 are opposed. Seventy-six percent of Democrats, along with 44 percent of Republicans, favor a path to citizenship for immigrants in the country illegally.

Among Trump’s supporters, just 38 percent are in favor of a path to citizenship. Sixty-seven percent of Republicans and just 21 percent of Democrats favor a border wall. Threequarters of Trump’s supporters favor that proposal.

Trump’s likely rival, Democrat Hillary Clinton, has cast his calls for the border wall and temporary foreign Muslims ban as dangerous.

Trump supporter Marile Womack, 79, of Debary, Florida, adamantly favors the border wall. No one else “had the guts to do it,” she said. But the daughter of Austrian immigrants isn’t opposed to immigration from any country so long as it’s done legally.

“I don’t favor banning immigrants, but I am for investigating them before they come,” she said.

In contrast, Mark Wecker, a car salesman from Redding, California, called a border wall stupid, because “it’s a lot of money and it’s not going to keep them out if they want to get in.”

Three-quarters of Latinos, twothirds of African-Americans and more than half of whites favor providing a path to citizenship. Forty-eight percent of whites, 26 percent of blacks and just 16 percent of Latinos favor a border wall.

Daniella Gil, a stay-at-home-mom from Cornelius, Oregon, who is the daughter of Mexican immigrants, said, “We should be focusing on the violence coming from Syria as opposed to Hispanics jumping the border.” AP

Families in painful limbo awaiting IDs of Nice dead

N

ICE, France—The painstaking process of identifying the victims of the Bastille Day truck attack in Nice dragged into its third day on Sunday, adding to the anguish of family members caught between uncertainty and grief.

Eighty-four people were killed in the Thursday night attack on the Promenades des Anglais, which happened as they were making their way home from a waterfront fireworks display. But just 35 bodies had been identified definitively

by Sunday afternoon, according to the Paris prosecutor’s office.

The excruciating delay is adding to the suffering of survivors.

One family spent days canvasing hospitals and office for news of a 4-year-old boy whose mother perished, their frustration boiling over into a confrontation with a regional official.

University of California, Berkeley, students plastered flyers around the city asking for any information on the whereabouts of three classmates at a technology entrepreneur education program.

Several imams stepped into the official

breach, posting themselves outside the Pasteur Hospital on Sunday to help family members visiting the injured or looking for confirmation of their worst fears from the hospital morgue.

“It puts them in extreme angst, and extreme tension,” said Brigitte Erbibou, a psychologist who has been counseling family members at center helping victims and family members.

“It’s unbearable because the more the days go by, the more they suspect the [death] announcement will come. However, until it is announced, the wait is absolutely unbearable, because there is no way to come to terms and to begin the work of the grieving process.”

She counseled two children this weekend whose father was killed but whose mother remained missing. “The children were telling me, ‘For dad we know, but for mom, it’s unbearable.’”

Prosecutors in Paris said the identification was being carried out under an accelerated procedure established after last November’s Paris attacks, using DNA or family medical records. They gave no indication

of how long the process would take.

“This process is step by step, so that everything will be guaranteed the moment that the identities will be released,” French Health Minister Marisol Touraine told reporters during a visit to Nice, where she met families at a hospital and a victims’ center.

Three days after the attack, families of 12 victims were able to see the bodies for the first time. Officials also issued the first death certificates and burial permissions.

Among those summoned was the Sahroui family, who, a grief counselor said, lost a mother, an 8-year-old boy, a 3-year-old girl and an uncle. In the ethnically mixed Madeleine neighborhood, three women wearing abayas—one of them the two children’s sister—left for the morgue for a final identification.

The Algerian-born father remained inside as friends and neighbors made their way upstairs to pay their respects.

Yasmin Touabia, a volunteer at the victim’s center, counseled them on Saturday. “They were staggered, in a state of shock. The grandmother kept repeating

that her pain was not being able to bury them, that it was the wait. That if they had died at home, they could have been buried right away.”

The official morgue summons, even if just for a few, was a breakthrough of sorts.

Authorities on Saturday had gathered grief counselors at several points in the city as they prepared to issue a list of the dead.

But that was called off at the last minute.

Hisham Kahlfallah, whose sister Olfa died and 4-year-old nephew Kylan was listed as missing, was already waiting outside the victims’ center when they said no lists would be issued, his frustration boiling over when the head of the regional council, former Nice Mayor Christian Estrosi, emerged from an official visit.

“Christian, you are not coming our way.

Christian come here,” he implored. “We have questions for you, Mr. Estrosi. You called the media and you don’t call the families of the victims.”

Estrosi strode away to answer reporters’ questions, while an aide talked to Kahlfallah, explaining that they had been trying to get the prosecutors’ office to release

People look at flowers placed to honor one of the victims of a deadly attack, near the area where a truck mowed through revelers, on the famed Promenade des Anglais in Nice, southern France, on Sunday. AP/Luca Bruno the list without success.

About the same time across town, the boy’s father gave an excruciating howl of grief outside the Pasteur hospital, crying, “Bye-bye, Kylan.”

Friends contacted by The Associated Press insisted that the death hadn’t yet been officially confirmed, and the Nice Matin newspaper said a hospital worker

had communicated the death with a nod of the head.

Hours later, a Facebook page for victims, “Solidarite Nice” carried photos of the boy leaning against a teddy bear bigger than him. The message: “Rest in peace next to your mother, my little angel. Your sweet smile will always be engraved in my heart.” AP

A10 Tuesday, July 19, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

How East and West react to terrorism

A

S news of the terrorist attack in France circled the globe, a television news personality in Asia asked, “Are we becoming immune and used to this kind of tragedy?” That is unlikely, but the number and frequency that has hit the West in the last few years is making the public response predictable.

There comes what one commentator called “tearful cartoons” followed by posts on social media with relevant avatars and comments, like “We are all Paris.” Monuments and buildings are lighted with the colors of the attacked nation’s flag and candlelight vigils are held. Governments issue the standard statement that “Our thoughts and prayers go out to the victims and families.

We strongly condemn this act of violence.”

Studies in Europe in the last few years have shown that the public’s emotional response varies between anger and fear, with fear the dominant emotion. When a person is afraid, the “flight or fight” mechanism is triggered.

Confronted by a harmless but startling situation, like a prank zombie appearing from behind the corner, about 20 percent of people do not jump back in flight but immediately and instinctively attack the “monster”.

East Asia, including the Philippines, has not been spared from terrorist attacks. The 2002 Bali, Indonesia, bombings killed 200. The 2004 bombing of the passenger ferry SuperFerry 14 killed 116. In the Bangkok tourist area, a 2015 bombing killed 20 and caused major harm to Thailand’s tourism industry.

While people grieved in these instances as they do all over the world, the response was different than in the West. British music legend Bono of the group U2 was in Nice, France, as this recent terrorist attack occurred. He was protected along with others, as the police suspected bombs had been placed in the hotel where he was staying. His almost immediate reaction after the incident was to post on social media, “Love is bigger than anything in its way.”

Although “Love,” for those who want to kill you might be a noble emotion, it will probably not stop a bomb from exploding. Bono’s comment seems “unAsian,” where the idea of karma—simplistically, the spiritual principle of cause and effect—runs more deeply, regardless of nationality or religion.

Certainly, the modern idea of karma is removed from the ancient concept.

Yet, in the Sanskrit Mahabharata written centuries before the birth of Christ, it says: “As a man himself sows, so he himself reaps.” This idea is also found in the Judeo-Christian bible, but has been diluted in the West as to the righteousness of retribution for bad deeds. Asians tend to think that people who commit terrible acts deserve terrible punishment.

In the West, they want to understand the motivation for a terrorist attack.

Asians are less inclined to worry about that and are more interested in making sure the perpetrators are unable to do bad things again.

The West may take more comfort from feeling they are standing on the moral high ground. In the East, the inevitability of deserved punishment may make more sense. However, there are clearly different reactions to the same type of event.

Since 2005

BusinessMirror A broader look at today’s business ✝ Ambassador Antonio L. Cabangon Chua Founder

Publisher Editor in Chief Managing Editor Associate Editor News Editor City & Assignments Editor Senior Editors

T. Anthony C. Cabangon Jun B. Vallecera Max V. de Leon Jennifer A. Ng Dionisio L. Pelayo Vittorio V. Vitug Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos

Online Editor Social Media Editor

Ruben M. Cruz Jr. Angel R. Calso

Creative Director Chief Photographer

Eduardo A. Davad Nonilon G. Reyes

Chairman of the Board & Ombudsman President VP-Finance VP-Corporate Affairs VP Advertising Sales Advertising Sales Manager Group Circulation Manager

Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Frederick M. Alegre Marvin Nisperos Estigoy Aldwin Maralit Tolosa Dante S. Castro

Unlocking the potential of domestic tourism Manny B. Villar

THE Entrepreneur Continued from A1

D

uring the same year, expenditures by domestic tourists amounted to P1.47 trillion, up 24 percent from P1.18 trillion in 2013. The contribution of domestic travelers to the tourism industry further grew in 2015, when their spending reached P1.77 trillion, a hefty 26-percent increase year-on-year.

International visitors spent a total of P306.6 billion, reflecting a slower 10.7-percent increase from the 2014 figures.

The boom in domestic tourism affects not only the economy in terms of GDP, but also the countryside. In the past, development has always been concentrated in Metro Manila and the highly urbanized cities in the provinces.

Lately, other cities and towns out-

Japan: The cycle continues

HOM

www.businessmirror.com.ph

regional offices n DXQR -93dot5 HOME RADIO CAGAYAN DE ORO E-MAIL ADDRESS: homecdo@yahoo.com ADDRESS: Archbishop Hayes corner Velez Street, Cagayan de Oro City CONTACT NOs.: (088) 227-2104/ 857-9350/ 0922-811-3997 n DYQC -106dot7 HOME RADIO CEBU E-MAIL ADDRESS: homecebu@yahoo.com ADDRESS: Ground Floor, Fortune Life Building, Jones Avenue, Cebu City CONTACT NOs.: (032) 253-2973/ 234-4252/ 416-1067/ 0922-811-3994 n DWQT -89dot3 HOME RADIO DAGUPAN E-MAIL ADDRESS: homeradiodagupan@ yahoo.com ADDRESS: 4th Floor, Orchids Hotel Building,

Rizal Street, Dagupan City CONTACT NOs.: (075) 522-8209/ 515-4663/ 0922-811-4001 n DXQM – 98dot7 HOME RADIO DAVAO E-MAIL ADDRESS: home98dot7@gmail.com ADDRESS: 4D 3rd Floor, ATU Plaza, Duterte Street, Davao City CONTACT NOs.: (082) 222-2337/ 221-7537/ 0922-811-3996 n DXQS -98dot3 HOME RADIO GENERAL SANTOS E-MAIL ADDRESS: homegensan@yahoo.com ADDRESS: 2nd Floor, Penamante Clinic Tiongson Street, General Santos City CONTACT NO.: 0922-811-3998 n DYQN -89dot5 HOME RADIO ILOILO E-MAIL ADDRESS: homeiloilo@yahoo.com

ADDRESS: 3rd Floor, Eternal Plans Building, Ortiz Street, Iloilo City CONTACT NOs.: (033) 337-2698/ 508-8102/ 0922-811-3995 n DWQA -92dot3 HOME RADIO LEGAZPI E-MAIL ADDRESS: homeradiolegazpi@ yahoo.com ADDRESS: 4th Floor, Fortune Building, Rizal Street, Brgy. Pigcale, Legazpi City CONTACT NOs.: (052) 480-4858/ 820-6880/ 0922-811-3992 n DWQJ -95dot1 HOME RADIO NAGA E-MAIL ADDRESS: homenaga@yahoo.com ADDRESS: Eternal Garden Compound, Balatas Road, Naga City CONTACT NOs.: (054) 473-3818/ 811-2951/ 0922-811-3993

Printed by brown madonna Press, Inc.–San Valley Drive KM-15, South Superhighway, Parañaque, Metro Manila MeMBer of

outside Metro Manila. Clearly, they are seeing the potential of domestic tourism.

However, this is not to say that we don’t need foreign visitors. On the contrary, the combined growth of these two market segments will help establish tourism as a major contributor to the national economy.

As measured by the share of tourism direct gross value added (TDGVA) to total GDP, the contribution of tourism to the economy was estimated at 7.8 percent in 2014.

TDGVA, which serves as the indicator to measure the value added of

T

Since World War II, Japan has been bound by its constitution to maintain an isolationist foreign policy, not having a standing army that could threaten any other nation.

This has been subject to great debate but has only changed under the administration of Shinzo Abe.

This phenomenon has manifested itself in citizens repudiating the existing political establishment in their countries and bringing in new governments from outside that establishment. However, it goes much deeper. It is also a repudiation of the elite, regardless of their political leanings.

French President François Hollande is a dedicated member of the Socialist Party, the political ideology that is supposed to represent the ordinary working person in getting fair treatment from government and society. Hollande does look after the “working man” or at least some of them. His personal

tion. This has been subject to great debate, but has only changed under the administration of Shinzo Abe. New national-security laws, put in place this year, now allow Japan to send troops abroad more easily to project Japan’s international military presence. The legislation allows Japanese troops to be sent abroad in case of a clear threat—however that is defined—to Japan’s national security and protection of the right to collective self-defense. This could certainly be applied in the case of the Philippines and its territorial dispute with China.

The change in the Japanese attitude goes much farther. Abe is a member of Japan’s Liberal Democratic Party that has ruled almost continuously since 1955. However,

John Mangun

OUTSIDE THE BOX

BusinessMirror is published daily by the Philippine Business Daily Mirror Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines.

Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025.

(Advertising Sales) 893-2019; 817-1351, 817-2807.

(Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.

side the big metro areas are hosting festivals that attract visitors. For example, it is now cool even for the youth to go on vacation in Palawan, Boracay and even in Baguio, thanks to the improvement in the transportation system between the mountain getaway and Manila.

I see this trend continuing because of the response from businessmen, who are now building more and more hotels in many locations

Tourism is also a big contributor to employment. Direct employment in the tourism industry was estimated at 5 million in 2015, higher by 3.4 percent compared to 4.8 million in 2014, according to the Philippine Statistics Authority. Tourism accounted for 12.7 percent of total employment in 2015.

he global political changes that I have been talking about for more than a year now continue to roll onward. They are all part of the short- and long-term political and economic cycles. However, like an exceptional higher tide that comes at the same time as a storm from a particular direction, the effects are more profound than we have experienced in many decades. barber—paid for at taxpayer expense—earns five times the average monthly wage of an ordinary French employee—$11,000 per month.

We have witnessed here in the Philippines and been a part of this global political shift with the election of President Duterte. But there are more subtle transformations happening in various countries that will change the geopolitical landscapes for some time to come. Nowhere is this more evident than in Japan.

Since World War II, Japan has been bound by its constitution to maintain an isolationist foreign policy, not having a standing army that could threaten any other na-

inbound and domestic visitors, totalled P982.4 billion in 2014.

In 2015 TDGVA breached the trillion-peso mark to settle at P1.09 trillion, which increased the tourism industry’s contribution to the economy to 8.2 percent.

Tourism is also a big contributor to employment. Direct employment in the tourism industry was estimated at 5 million in 2015, higher by 3.4 percent compared to 4.8 million in 2014, according to the Philippine Statistics Authority. Tourism accounted for 12.7 percent of total employment in 2015.

In the past, I identified tourism, together with remittances from overseas Filipinos and the businessprocess outsourcing (BPO) industry, to be the major sources of dollar streams for the Philippine economy.

Remittances and the BPO industry are now well-established in that role. It is time for tourism to take its place in the three-legged growth chair for the economy.

For comments, e-mail mbv.secretariat@gmail. com or visit www.mannyvillar.com.ph.

Abe’s government is dominated by a little known conservative Shinto religious/political cult dating back to the 1970s—Nippon Kaigi (Japan Conference).

The political goals of Nippon Kaigi are clear—change Japan’s pacifist constitution, end sexual equality, get rid of foreigners, void “human-rights” laws and return Japan to its Imperial Glory. In Nippon Kaigi’s view, Japan was the wronged party in the war.

The overwhelming majority of Abe’s Cabinet is composed of Nippon Kaigi members, and from the Japanese election a week ago, Abe solidified his power with the Liberal Democratic Party now holding a large majority of the seats in the Japanese parliament.

Joko Widodo, President Duterte, Donald Trump, Brexit, Abe, Justin Trudeau, and now new Prime Minister Theresa May and Foreign Secretary Boris Johnson in the United Kingdom. The list of political changes is unending and it is not going to stop any time soon.

E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Landmark legal win for PHL: What now?

Measured steps Edgardo J. Angara

Ernesto M. Hilario

ABOUT TOWN

T

he Philippines won a big legal and moral victory in the verdict of The Hague-based Permanent Court of Arbitration regarding our maritime dispute with China in the South China Sea.

We asked China expert Chito Sta. Romana to be our resource person at the latest Saturday Forum@Annabel’s and give us his views on what we should do now, given the favorable “award” or verdict of the arbitral tribunal composed of experts on the United Nations Convention on the Law of the Sea or Unclos.

The verdict, as we know, consists of five key points.

One, China does not have historic rights to the South China Sea and that its “nine-dash line” claim has no legal basis. Even if China had historic rights to resources in the waters of the South China Sea. Two, none of the Spratly Islands is capable of generating extended maritime zones. Hence, the tribunal declared certain sea areas within the exclusive economic zone (EEZ) of the Philippines, because those areas are not overlapped by any possible entitlement of China.

Three, China violated the Philippines’s sovereign rights in its EEZ by interfering with Philippine fishing and petroleum exploration, constructing artificial islands and failing to prevent Chinese fishermen from fishing in the zone. Chinese law-enforcement vessels also unlawfully created a serious risk of collision when they physically obstructed Philippine vessels.

Four, China 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.

And five, China’s actions since the start of the arbitration had aggravated the dispute between the parties.

Sta. Romana agreed with the view that enforcement of the ruling is a big problem, since China, right from the start, refused to take part in the proceedings and even described the verdict as “null and void” when it was released on July 12.

He emphasized that the Philippines should adopt a two-pronged approach, engagement and deterrence, in dealing with our nextdoor neighbor that seeks to assert ownership over nearly 85 percent of the South China Sea through the so-called nine-dash line.

Engagement could take the form of bilateral and multilateral talks with China to thresh out issues, while deterrence could involve building a credible defense posture on the part of the Philippines, so that the Chinese do not bully us with “gunboat diplomacy” as what they have been doing to our fishermen in Scarborough Shoal.

Supreme Court Associate Justice Antonio T. Carpio has said in another gathering that the Philippines could take legal steps to address the maritime conflict. It can ask China for compensation over the damage done on the marine environment in the Spratlys by dredging a total of 17 reefs and building islands on seven reefs.

Moreover, the Philippines can also ask that the processing of China’s application on an extended continental shelf claim in the South China Sea be suspended. And we can also sue the China National Offshore Oil Co. in Canada, where they have assets, if China drills for natural gas in the Reed Bank.

Carpio deserves kudos for doing rigorous reasearch to help Filipinos understand the nuances of our territorial dispute with China.

Likewise, Sta. Romana has also

Engagement could take the form of bilateral and multilateral talks with China to thresh out issues, while deterrence could involve building a credible defense posture on the part of the Philippines, so that the Chinese do not bully us with “gunboat diplomacy,” as what they have been doing to our fishermen in Scarborough Shoal. been very helpful in explaining the developments in the territorial dispute in the South China Sea to the media, academe and policy-makers.

A former Beijing bureau chief of ABC News, Sta, Romana lived in China for nearly 40 years since 1971. He speaks fluent Mandarin and has an intimate knowledge of Chinese politics, society and culture from the Mao era up to the present. He would be a definite asset to the Duterte administration in any possible talks with Beijing on the South China Sea issue.

What’s keeping PHL from reducing poverty?

Sisyphus is the figure in Greek mythology who was punished by the gods for all eternity to roll a rock up a mountain only to have it roll back down to the bottom when he reaches the top.

That, it seems to me, is the sad fate of the Philippine economy, for we have to aspire constantly for higher economic growth and, yet, we find ourselves no nearer to putting an end to widespread poverty despite our best efforts. One obstacle to making our eonomic growth serve the goal of making poverty history, of course, is our vulnerability to natural disasters as we are hit by no less than 20 destructive typhoons every year that destroy agricultural crops and public infrastructure.

Then there’s one other factor that impedes efforts to uplift the lives of the poor: our rapidly growing population.

According to Socioeconomic Planning Secretary Ernesto M. Pernia, the poverty rate could have been reduced by an additional 7 to 8 percentage points had 40 percent of women been given access to family-planning methods, so they would have just three children instead of six.

Since 1990, we have been able to reduce poverty incidence only by about 7 percent, which stood at 26.3 percent in the first semester of 2015 according to government data.

For Pernia, “there is room for reducing poverty.”

The Duterte administration wants to achieve inclusive growth through regional development. The government has set an economic growth target of 6.5 percent to 7.5 percent this year and 7 percent to 8 percent next year. But growth could surpass 8 percent if there will be enough foreign direct investments and the Duterte administration succeeds in spreading economic growth to areas outside Manila.

The new administration should fully implement the reproductivehealth law to promote responsible parenthood and family planning nationwide. Otherwise, our best efforts in economic development would be negated by a burgeoning population, thus, consigning us to a Sisyphean fate that keeps us forever rolling back to the bottom every time we reach the top.

E-mail: ernhil@yahoo.com.

E

ven before the Permanent Court of Arbitration in The Hague ruled last week in the Philippines’s favor, President Duterte declared his openness to engage in bilateral talks with China over the maritime disputes.

President Duterte cited Former President Fidel V. Ramos as a possible special envoy to China to initiate the talks. Several key allies have to be consulted. Last week French Ambassador to the Philippines Thierry Mathou told reporters France was willing to engage the disputing countries in discussion and diplomacy, emphasizing it

was in everyone’s interest to lessen the tension.

I suggested an unsolicited advice. President Duterte should consider consulting first with the National Security Council (NSC) and convene the Legislative Executive Development Advisory Council (Ledac) to define the country’s goals, its overall strategy and timing. The

Tuesday, July 19, 2016 A11

country and his position will be greatly enhanced and solidified, as it will attract the backing of the security and political establishment.

Filipinos themselves need to understand and absorb the implications of the ruling. The outside world, who applauded the decision near unanimously—especially our country’s allies in the neighborhood, who steadfastly stood by us—also needs time to think through its practical effects.

Domestically, we need to collect our thoughts. Outside our shores, we need to marshal the support and assistance of friends and allies. Beyond heart-warming expressions of their oneness with us, there should be a focused and sustained advocacy and activism in international bodies, and fora of the huge peace dividend a mutual settlement will bring about to a tension-filled region.

Indeed, we need to act with de-

Kashmir on fire MAIL

Please e-mail your letters to the editor to oped@businessmirror. com.ph. Letters chosen for publication in this section are edited for brevity and clarity.

Kashmir is bleeding once again.

Many innocent civilians have been brutally killed and many more injured by the Indian security forces.

Surprisingly, there is a deafening silence in the local media. No views, no comments whatsoever have appeared. Strangely, the media, which is, otherwise, very active and springs into action on the slightest violation of human rights, kept mum as if Kashmiris are not human, their blood carries no importance and is cheaper than water. Many, nowadays, are voicing serious concerns about the rights of drug addicts killed by the police, but for Kashmiris, not a single word.

Views and opinions apart, there was a complete blackout in the local print media about the recent incidents of human-rights violations in the Indian-occupied Kashmir (IOK) by the Indian military and paramilitary forces against those protesting the killing of Kashmiri leader Burhan Wani, who was extremely popular among the masses. As a result, dozens of innocent Kashmiris were killed, over 2,100 have been injured, including 400 critically.

People have been denied access to basic emergency services and right to health. There have been incidents of violence, harassment and shelling of teargas in hospitals to prevent access to hospitals and restrict the movement of ambulances. The brutality can be gauged from the fact that Indian Security Forces used pellet guns above waist high, as a result, many of the injured lost their eyesight.

T he use of excessive force against innocent civilians, protesting over extrajudicial killings, is deplorable and a blatant violation of the right to life, right to freedom of expression and opinion, right to peaceful protest and assembly and other fundamental human rights. In fact, Indian forces have since long employed various draconian laws, like the Jammu and Kashmir Disturbed Areas Act; and the Armed Forces (Jammu and Kashmir) Special Powers Act and Public Safety Act in killing the Kashmiri people, and for the arbitrary arrest of any individual for an indefinite period.

Human Rights Watch and Amnesty International have pointed out grave human-rights violations in the Indian-controlled Kashmir,

indicating, in its report on July 2, 2015, the Amnesty International has highlighted extrajudicial killings of the innocent persons at the hands of Indian security forces in the Indian-held Kashmir. The report points out, “Tens of thousands of security forces are deployed in Indian-administered Kashmir…the Armed Forces Special Powers Act allows troops to shoot to kill suspected militants or arrest them without a warrant… not a single member of the armed forces has been tried in a civilian court for violating human rights in Kashmir…this lack of accountability has, in turn, facilitated other serious abuses…India has martyred 100,000 people. More than 8,000 disappeared [while] in the custody of army and state police.”

The United Nations Special Rapporteur on extrajudicial, summary or arbitrary executions, Christof Heyns, after his visit to India in March 2012, called on the government of India to continue to take measures to fight impunity in cases of extrajudicial executions and communal and traditional killings. In his report, he stated, “Evidence gathered confirmed the use of so-called fake encounters in certain parts of the country…the armed forces have wide powers to employ lethal force.” The above is exacerbated by the high level of impunity that the police and armed forces enjoy, due to the requirement that any prosecutions require sanction from the central government—something that is rarely granted. “The main difficulty in my view has been these high levels of impunity,” the Special Rapporteur stressed.

India has been justifying these atrocities under various pretexts, such as by portraying these as its internal affair stating that Kashmir is part of India. In addition, it also tries to equate Kashmiris struggle with terrorism and blames Pakistan for fomenting militancy.

India is wrong on both counts.

First of all, Kashmir is not and had never been part of India. It is a disputed territory with numerous UN Security Council Resolutions outstanding on its agenda.

A series of UN Security Council Resolutions have been issued reiterating the initial ones issued in 1948 and 1949. Calling it an internal matter by India is a violation of UN Security Council’s Resolutions. The current situation in the IOK and the indigenous movement for self-determination, which is going on for a long time in IOK, is a manifestation of what the Kashmiris want. They are resisting against the Indian occupation of their territory and want to exercise their right to self-determination.

They want UN Security Council to implement resolutions on Kashmir dispute and fulfill their promise.

In addition, the disputed status of Kashmir is also supported by the Indian leadership in the past.

Prime Minister Nehru of India in

TAIMUR

his statement on All India Radio on 3 November 1947 said: “We have declared that the fate of Kashmir is ultimately to be decided by the people. The pledge we have given not only to the people of Kashmir, but to the world. We will not and cannot back out of it.”

Later, while addressing the Indian Parliament on August 7, 1952, he said, “I want to stress that it is only the people of Kashmir who can decide the future of Kashmir.

It is not that we have merely said that to the United Nations and to the people of Kashmir; it is our conviction and one that is borne out by the policy that we have pursued not only in Kashmir, but everywhere....

“I started with the presumption that it is for the people of Kashmir to decide their own future. We will not compel them. In that sense, the people of Kashmir are sovereign.”

There are plenty of statements

by Indian leadership and the UN to the effect that Kashmir is a disputed territory and its future is to be decided by seeking the wishes of the Kashmiris through a plebiscite under the auspices of the UN. India’s portrayal of Kashmiri’s struggle as terrorism is another farce, which, unfortunately, has been taken at face value by the international community. Most probably such a stand is driven by economic/ commercial and other similar interests in total disregard to the moral principles contained in their constitutions, UN Charter, etc.

None seems to have asked India as to what necessitates deployment of more than 600,000 strong army in the occupied Kashmir with a population of 10 million (i.e., one soldier for every 16.6 natives).

And why such a huge deployment, despite its repressive policies, has been unable to check the freedom struggle. As per some estimates, more than 80,000 have died and thousands are missing since 1989.

Moreover, it is a fact that every year, when India celebrates Independence Day on August 15, Kashmiris on both sides of the Line of Control and the world over observe it as Black Day to convey the message to the international community that India continues to usurp their inalienable right to self-determination. This very

liberate speed. But there should be no rush simply to appease an irritated Beijing. Even though there appears to be unanimous support within China over its aggressiveness regarding the disputed seas, there are also some influential personalities voicing moderation.

Over the weekend, Prof. Shen Dingli, from the Institute of International Studies of the famed Fudan University in Shanghai, wrote in an India Today opinion piece that China should consider revising its stance and employ a more effective approach that maintained China’s “long-held ‘smiling’ image.”

So historic and global, a milestone as the South China Sea ruling needs measured and well-thoughtout steps, so that such pathbreaking edict will become an international precedent.

E-mail: angara.ed@gmail.com.

day is being marked by complete shutdown, as deserted streets, closed businesses and security patrolling the streets could be seen in the Indian-held Kashmir. On the contrary to express solidarity with Pakistan, Pakistani flags are hoisted by the Kashmiri on August 14—Pakistan Independence Day. Indian-occupation authorities often impose stringent restrictions in Srinagar and other towns, and deploy heavy contingents of police and troops to prevent people from holding anti-India demonstrations on these days.

All this is a clear manifestation that the struggle is predominantly indigenous and equating it with terrorism is nothing but a gross injustice on the part of India. India should realize that such tactics will never be able to change the basis of the just struggle waged by the Kashmiri people since 1947. Had India fulfilled its duties toward the Kashmiri people, all these killings would have been avoided.

Pakistan unequivocally extends political, diplomatic and moral support to Kashmiris in their struggle for self-determination. Pakistan’s principled position on the issue of Kashmir is that it should be resolved according to UN Resolutions. Kashmir is a universally recognized dispute with numerous UN Security Council Resolutions outstanding for almost seven decades.

Wars have not succeeded in resolving the issue of Kashmir.

Dialogue is the best option to amicably resolve all issues between India and Pakistan, including the dispute of Kashmir. Pakistan remains ready for dialogue. It is for the international community to urge India to resolve issues through dialogue.

Kashmiris are resisting against the Indian occupation of their territory and want to exercise their right to self-determination.

Nothing can deter the Kashmiris’ resolve to continue their struggle.

For a people alienated and wronged for decades, any provocation will set them aflame.

India should realize that the Kashmir dispute will not vanish, unless their aspirations are met. Oppressive brutalities and inhuman measures cannot stop them from claiming their right of self-determination, in accordance with the UN Security Council Resolutions.

The international community should rise from its slumber and tell India that the treatment being meted out to the Kashmiris is simply unacceptable. India should honor its human-rights obligations, as well as its commitments under the United Nations Security Council Resolutions to resolve the Kashmir dispute in a peaceful manner.

Taimur Zulfiqar Second Secretary Embassy of Pakistan Manila

2nd Front Page BusinessMirror

A12

Tuesday, July 19, 2016

www.businessmirror.com.ph

Naia congestion will ease if 4 terminals are fixed

By Sandra Sendingan

C

Special to the BusinessMirror

ONGESTION at the country’s main gateway will worsen in the coming years. The only plausible method to avert this is to modernize the four terminals of the Ninoy Aquino International Airport (Naia), while shifting a number of flights to the airport in the North.

Avelino L. Zapanta, an aviation expert, said the government must move toward the modernization of the aging Naia to improve passenger experience, thus facilitating tourism in the Philippines.

But at this rate, the prospect of developing a new runway might be a little too late.

“Any major development in the Naia, like putting up a second international runway, would be a waste of time. Only thing the Naia can do is to improve its existing four terminals,” he told the BusinessMirror.

Zapanta, who wrote the only book on the history of aviation in the Philippines, proposes a shortterm solution in the form of transferring new international flight frequencies to operations in Clark

International Airport, which can still handle additional flights.

“Within four years, the Naia must gradually become the domestic hub, and Clark the international hub. With the two airports dividing the current traffic, congestion shall be eased in the Naia, while Clark, with its huge land area, can handle all the necessary international expansion,” he said.

Zapanta added that the domestic hub must be nearer traffic, generated within the urban center of Metro Manila. The Japanese International Cooperation Agency (Jica) said three out of four Naia terminals no longer have the capacity to accommodate increased passenger traffic.

Last year saw the Naia’s four terminals reaching beyond their

maximum-rated capacity for the first time, as more and more international and domestic flights were launched throughout the year, despite the lack of capacity-building projects for the air hub.

Data collected by the Manila International Airport Authority (Miaa) showed the airport handled 36.68 million passengers last year, 7 percent higher than the 34.09 million passengers the year prior.

Broken down, the airport handled 19.51 million domestic passengers last year—around 2 million higher than the 17.17 million it served in 2014. International passenger count was almost flat.

Since the daily passenger traffic is more than what the existing facilities and operational capabilities of the Naia can cope with, the only long-term solution the government sees is to redevelop the air hub to be on a par with the standards set by the International Civil Aviation Organization (Icao).

One such initiative is the P74.5-billion Naia development project, which traces its roots as a public-private-partnership project certified by former President Benigno Aquino III as a priority project in 2012. The project seeks to “improve the operational efficiencies” of the four terminals in the Naia to comply with Icao standards. In 2008 the Naia failed to comply with such standards because of shortcomings in infrastructure and security procedures,

and was downgraded to a Category 2 rating by the Federal Aviation Administration.

The downgrade meant that direct commercial flights to the United States were prohibited and even resulted to a flight ban of the country’s air carriers to the European Union.

After an audit in 2013, the Naia recovered its Category 1 ranking after complying with Icao standards.

But more than observing international standards of aviation and keeping up pace with other airlines in the region, Zapanta said an improved airline-network system has the potential to boost the country’s economic performance.

The National Economic and Development Authority’s (Neda) Investments Coordination Committee only endorsed the project in July last year. The project has been gathering dust while waiting for a Neda Board approval. “ T he proposa l to moder nize the Naia is a priority project that’s urgently needed and will greatly benefit the Filipino people, but it’s an infrastructure project [that] requires proper due diligence so that this project would jibe with the other operations of Miaa,” PPP Center Executive Director Andre C. Palacios told the BusinessMirror.

The new transportation team has already identified the Naia modernization as a priority project, which is also in line with President Duter te’s 10 -point economic agenda that pushes for increased government spending on infrastructure.

“There’s no timeline yet, but the new administration wants things to happen quickly. We are supportive of the thrust for rapid, rebalanced and inclusive infrastructure, and

the Naia is part of that,” said Palacios, noting that a lot of private-sector parties have already expressed keen interest in participating in the bidding process.

San Miguel Corp. President Ramon S. Ang has said he is keen on proposing the construction of a new airport that will replace the Naia in a decade or so.

The $10-billion airport deal will be submitted to the government as a feasibility study, and not as an unsolicited proposal, to lessen the timeframe of its implementation.

Under the proposal, the concessiona ire w i l l const r uct a 1,600-hectare international gateway somewhere in the south of Metro Manila. The airport, which would have doubled the capacity of the Naia, would have included the construction of a low-cost carrier terminal, a train system and a dedicated tollway.

Solar Group-backed All-Asia Resources and Reclamation Corp., meanwhile, proposed to develop the Philippine Air Force’s Danilo Atienza Airbase and reclaim a portion of Manila Bay to construct a world-class

international airport that would ease the congestion at the Naia.

Jica is also proposing the closure of the Naia, listing the possible locations of the new airport. A Jica study pinpointed two Cavite-based locations, called Sangley 1A and 1B. Sangley 1A is in the same site as the naval station in Cavite. The other one is near the Central Manila Bay, in between the military base and a reclaimed area.

The first option will cost both the government and a privatesector partner less than the second choice. The first one only costs $10 billion, while the other one is pegged at around $13 billion.

The future airport will boast of four runways, which can handle 700,000 aircraft movements per year. It will have a rated capacity of 130 million passengers annually.

The deal is expected to be implemented under the government’s key infrastructure program, mixed with funding from official development assistance.

Commercial operations of the new air hub should start by 2025, just about 10 years from now.

Since the daily passenger traffic is more than what the existing facilities and operational capabilities of the Naia can cope with, the only long-term solution the government sees is to redevelop the air hub to be [on a] par with the standards set by the International Civil Aviation Organization.”—Zapanta

New steel firm enters market S teel importer Mannage Resources Trading Corp. (MRTC) said it is ready to compete with big local players, as it starts selling imported reinforcing steel bars that meet international and local quality and safety standards.

MRTC President L aw rence Sy said that, with the country’s booming construction and realestate sector, his company decided to enter the highly competitive steel industry to offer budgetbut-quality-conscious consumers a wider range of choices.

For starters, Sy said the company is offering 5,000 metric tons (MT) 12mm Grade 275 weldable deformed steel bars but would soon introduce multiple sizes and other steel products to the local market.

He said TUV Rheinland and SGS-CSTC Standards and Technical Services Co., Ltd. in Shanghai, China—both internationally

Ibpap. . .

Continued from A1

to four indirect jobs generated per direct job, totaling to 4 million to 5 million new jobs.

The key in adding another million direct employees—at half the time—to the IT-BPM sector is human-capital development, Hernandez said.

“Let’s create, for the next six years, another million direct new jobs that are the more complex type of work.

We crossed the million mark recently [and] it took us almost 15 years, from 2010 to 2015 to reach the million work force, but we’d like to be a little more ambitious. Let’s go for another million for the next six years. That’s our ambition,” Hernandez added in an interview with reporters The scaling up of “professional capability” for Filipino businessprocessing outsourcing workers will

recognized and accredited testing laboratories—have thoroughly checked and certified that the 12mm rebars imported by MRTC from China meet all the required safety and quality standards.

Even during the manufacturing stage, MRTC’s steel bars were checked every 32 pieces, or every 2 tons, to ensure that it meets strict quality and strength tests. Philippine National Standards require testing every 20 tons, he said.

In addition, the Bureau of Philippine Standards, under the Department of Trade and Industry, has also issued a import commodity clearance certificate to MRTC’s shipment.

As this developed, Sy dismissed what he called an ongoing “smear campaign” by “unscrupulous” competitors questioning the quality and safety of MRTC’s steel products.

Deploring the continuing negative attacks against MRTC, Sy said

he and other company shareholders were well aware of their corporate obligations. “We faithfully complied with all the legal requirements under the law starting with the quality and safety of our steel products, their valuation and, finally, the payment of correct duties and taxes to the government,” he stressed.

Sy dismissed the continuing barrage of offensive articles against MRTC as nothing but malicious attempts to stifle free competition.

To dispel baseless allegations against the quality and safety of MRTC’s rebars, Sy challenged its detractors to submit their respective steel products to the same rigid testing by both local and international laboratories. “That way, the consuming public would know— and be the ultimate judge—whose products would pass or fail quality and safety tests,” he said.

be pivotal in attaining this employment ambition, as skills training should be redirected toward new areas for growth, such as data analytics, finance and accounting services, and engineering services.

These mid- to high-complex areas in IT is where the future opportunity lies and enjoy much higher growth rates, as digitization across industries creates demand for new nonvoice services.

The industry has already seen a gradual decline of simple, voice services to the over-all share of ITBPM services, and this will likely continue with technology phasing out simple, routinary services.

Knowledge-based processing services, like health-care information, are also gaining ground.

“The easier-to-do transaction work in contact-center area will be made efficient through automation, that will be the case. We’ve been evolving, as seen by the fact that there’s

very few simply data-entry work and directory assistance [in the contact-center area] being done today, and we continue to anticipate that,” Hernandez added. In terms of revenue targets and growth rates, Ibpap is keeping mum on its projections until the road map is unveiled in October at the annual IT-BPM summit.

However, Nitin Bhat, senior partner at Frost and Sullivan, the consultancy firm crafting the road map with Ibpap, said the country continues to grow at twice the rate of the global compounded annual growth rate (CAGR) of outsourced IT-BPM services of 6 percent. “With a 6-percent CAGR, total global opportunity for outsourced IT-BPM work is expected to grow from $166 billion to $250 billion by 2022,” Bhat said in a news statement. The local IT-BPM industry is eyeing $25 billion in revenue by 2016, and 1.3 million workers. Catherine N. Pillas