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Friday, July 1, 2016 Vol. 11 No. 265
DUTERTE ANNOUNCES FIGHT VS. GAMBLING IN FIRST CABINET MEETING
Day 1 ‘casualty’: Online casinos
INSIDE
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side from his avowed policies against crime, corruption, illegal drugs and other kinds of vices, President Rodrigo R. Duterte on Thursday also declared his policy against onlinegambling operators, while promising to allocate government revenues from gaming for health services to the poor.
rumble in the jungle
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By David Cagahastian
Sports BusinessMirror
Friday, July 1, 2016
The amount of Pagcor’s annual revenue from online gaming
In his first Cabinet meeting in Malacañang, Mr. Duterte said some of the online-casino licenses approved by the Philippine Amusement and Gaming Corp. (Pagcor)
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MAHA, Nebraska—Michael Phelps surged to the wall, and then whipped around to spot his time. That number wasn’t really important. The only thing that mattered was No. 5. Phelps became the first male swimmer to qualify for five Olympics with a victory in the 200-meter butterfly at the US swimming trials on Wednesday night, another huge milestone in the water but even more significant given what’s happened away from the pool. A second drunken-driving arrest. A reevaluation of his life. An impending marriage. And his first child. With 7-week-old Boomer in the arms of his mother at the CenturyLink Center, Phelps cruised to a victory that meant as much personally as all those triumphs that came before. The most decorated athlete in Olympic history is Rio bound. “With everything that’s happened and being able to come back, that was probably harder than any swim I’ve had in my life,” Phelps said. “Just being able to finish how I want to is so important to me. Getting on this team is what I wanted to do.” He wasn’t the only one feeling a bit of redemption. Missy Franklin turned in one of the gutsiest performances of her career to earn a spot for Rio in the 200 freestyle. One night after she struggled to seventh in the 100 backstroke—an event she won four years ago in London—there was plenty of speculation that she’d be hard-pressed to qualify for any individual events at these games. Franklin herself sounded as though she’d be happy just getting on the team as a relay swimmer. Turns out, she’ll be busier than that in Brazil. While Katie Ledecky romped to victory in the 200 free, earning a second individual event at the Olympics, Franklin rallied over the second half of the race to claim the runner-up spot. Franklin’s coach, Todd Schmitz, pumped his fists and charged down the steps of the arena to congratulate his bubbly swimmer, one of the biggest stars of the London Games. She finally had reason to smile. “Last night was really tough and coming back from that, I was telling myself, ‘I’m not done fighting. I’m not done with believing in myself,’” Franklin said. “That’s probably the most proud race I’ve ever swam in my entire career, coming back from such a loss last night and telling myself that I still have it in me to do whatever I believe I can do.” Phelps held off a stiff challenge from Tom Shields to win the 200 fly—the first event Phelps ever swam at the Olympics, 16 years ago in Sydney. One day before his 31st birthday, Phelps came full circle in the race he’s always considered his baby.
Phelps touched in 1:54.84—far off the world record of 1:51.51 he set at the 2009 world championships while wearing one of the high-tech suits that have since been banned. There’s time to work on his speed between now and Rio. For now, Phelps sounds like an Olympic rookie talking about the
thrill of going back to the Olympics, where he’ll get a chance to add to the already staggering amount of hardware he’s accumulated at the last four Summer Games: 18 golds and 22 medals overall. He also joined a pretty exclusive group with Dara Torres, who made five Olympics on the female side.
“I just said, ‘Welcome to the club,’” the now-retired Torres said. “Just to see his emotions and how excited he was and relieved, it was really nice to see.” Going along for the ride this time is Boomer, who wore noisecanceling headphones adorned with American flags so he wouldn’t be startled by the huge roar that went up when his daddy touched the wall first. After the award ceremony, Phelps ran around the deck to find his fiancée, Nicole Johnson, and their child. They all embraced at the edge of the stands, Phelps leaning in to kiss their boy while Nicole pulled the swimmer’s head close to her. Phelps couldn’t help but reflect on his stumbles since London, most notably another DUI arrest in 2014 that prompted him to take a whole new look at his life. He reconnected with his long-estranged father, gave up alcohol and committed himself to closing his career with a flourish. He had retired after London, but changed his mind. This time, Phelps insists, it really will be his final Olympics. “He can share this with his son one day,” said Torres, who competed at the Olympics after becoming a mother. “It makes the Olympic experience a little bit different when you have a child.” Ledecky added the 200 free to her rapidly growing Olympic schedule, winning comfortably with a time of 1:54.88. She already won the 400 free and still has two more events to go in Omaha. But all eyes were on Franklin, who touched in 1:56.18 to edge out Leah Smith by just under a half-second. Allison Schmitt, the defending gold medalist, settled for fourth but that will at least be good enough to get another London star on the team as a relay swimmer. Ledecky and Franklin embraced on deck after climbing out of the pool. “She’s one tough cookie,” Ledecky said. “She got the job done tonight.”
By VG Cabuag, Cai U. Ordinario & Catherine N. Pillas
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he benchmark Philippine Stock Exchange index (PSEi) surged close to the 8,000-point level in morning trades as a send-off to former President Aquino and to welcome President Rodrigo R. Duterte. “The PSEi easily broke past the 7,900 line, marking at least 13 percent in year-to-date gains. At the noon break, the index stood at 7,974.54, 176.01 points [2.26 percent], up over the previous day and nearly 15 percent on the year-to-date,” A&A Securities Inc. research and marketing head Justino Calaycay Jr. said. However, the market gave up all gains in the afternoon trades. The main index ended 2.28 points, or 0.03 percent lower, at 7,796.25 after surging to an intraday high of 7,980.75. The market’s optimism on Thursday apparently spilled over to businessmen and economists following Mr. Duterte’s inaugural speech, where he vowed to cut red tape and honor contracts. “The instruction to ease regulations is an excellent one. People have been looking for this—to be burdened less by unnecessary rules and regulations. This is most welcome,” National Competitiveness Council Private Sector Cochairman Guillermo M. Luz said. “Honoring government contracts is also a welcome move. This will reassure investors and encourage them to look at the Philippines on
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HIGH FIVE!
A Philippine Stock Exchange (PSE) employee gestures as the market price reflects on a glass. The PSEi closed at 7,796.25, down by 2.28 points. NONIE REYES
See “Casualty,” A2
FOR PHELPS, 5TH OLYMPICS MAY MEAN THE MOST YET
B P N The Associated Press
OPTIMISM ABOUNDS AFTER DUTERTE TAKES OATH AS 16TH PRESIDENT OF PHL
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MICHAEL PHELPS gestures No. 5 after winning the men’s 200-meter butterfly at the US Olympic swimming trials to qualify for his fifth Olympic Games. AP
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Ruling on sea dispute out on July 12
Priceless moment Editor: Jun Lomibao • mirror_sports@yahoo.com.ph
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Friday, July 1, 2016
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LOSS ASIDe, TeNNIS TeACHeR ReveLS IN CHANCe TO FACe FeDeReR
PRICELESS MOMENT ROGER FEdERER of Switzerland (right) shakes hands with Marcus Willis of Britain, after beating him in their men’s singles match on day Three of the Wimbledon Tennis Championships. Ap
By Howard Fendrich The Associated Press
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ONDON—How much money might you be willing to pay for the once-in-a-lifetime chance to play tennis against Roger Federer on Centre Court at Wimbledon? Or merely for the chance to emerge from the tunnel leading out to the green grass there and hear the full-throated yells of nearly 15,000 standing, clapping spectators pulling for you? Or, perhaps best of all, for the chance to look up at a guest box and see your parents, sister, brother and cousin leaping out of their seats, rejoicing, after you conjured up a beautifully curled lob that floated over the man considered by many to be the sport’s greatest player in history and landed in to win a 14-stroke exchange? Marcus Willis, who lives at home with mom and dad, and works as a tennis instructor at a club in central England, got to experience all of that and more on Wednesday, and it didn’t cost the 25-year-old a dime. Actually, Willis earned the biggest paycheck of his career despite winding up with the sort of result everyone expected when a guy ranked 772nd in the world somehow found himself across the net from the man who spent more weeks at No. 1 than anyone: a 6-0, 6-3, 6-4 victory for Federer in the second round at the All England Club. “I did look up twice as I bounced the ball, and saw Roger Federer, and thought, ‘Oh, haven’t seen this before,’” Willis said. “Yeah, it was surreal.... I had to get used to it and play.” He earned the right to be out there against the 17-time Grand Slam champion, thanks to an improbable, straight-from-a-screenplay couple of weeks that included victories in three matches during a playoff for low-ranked British players, three more in the qualifying rounds at Wimbledon, and then another on Monday in his very first tour-level match. “It’s all been incredible and a bit of a blur,” said Willis, a left-hander with a strong serve who slices shots off both wings. “I’ve gone from one extreme to the other in a matter of days.” Willis, who charges about $40 per hour for lessons, truly became an overnight sensation. His girlfriend—who, in keeping with the Hollywood nature of the whole episode, recently persuaded him not to give up on his dream of being a regular on the professional tour—was interviewed on BBC. So were his family members. His loud group of supporters, who led rowdy chants that reverberated under the closed roof at the generally staid venue, got the TV treatment, too. “I said a few days ago: This story is gold,” Federer said. “He’s got a career after this. He definitely made the most of it.” Federer’s career prize money is just shy of $100 million, and that doesn’t include plenty from endorsement deals. Willis entered Wimbledon with about $350 this year and less than $100,000 for his career in prize money—and, needless to say, zero endorsements. On Wednesday Willis’s white shirt, which he bought about a year ago, was made by Federer’s apparel sponsor and had the gray initials “RF” etched on the left sleeve. On another rain-filled day that left a dozen men still unable to complete their first-round matches while No. 3 Federer and No. 1 Novak Djokovic moved into the third, Willis stepped out on court with a wave and the widest smile imaginable, shaking his head at the scene. He found other reasons to grin and revel in the moment. That shot in the third game that even Federer applauded and allowed Willis to boast with a
RORY MCILROY is chasing Claret Jugs and green jackets, and not the Olympic gold medal. Ap
MCILROY HAS NO REGRETS ABOUT PULLING OUT OF RIO OLYMPICS
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chuckle later: “I can say, ‘I lobbed Roger Federer.’” A 113-mph ace Willis celebrated with arms raised. A forehand winner that, finally, a half hour and more than a set in, gave Willis his first game and created pandemonium in the stands. More often, of course, things did not go his way. Willis, who leaves with a check for £50,000 (about $67,000), would produce a genuinely impressive shot, only to see Federer top it, including with several no-look, over-the-shoulder volleys. Here’s guessing that Willis’s opponents in local leagues do not wield a racket quite the way Federer can.
“You can’t leave the ball anywhere short or high. It’s just gone,” Willis said. “He’s just ridiculous.” Willis, it turns out, made an impression on Federer, too. “As I was playing,” Federer said, “I was thinking...‘This is definitely one of the matches I’ll remember.’” Imagine, then, how Willis felt about the one hour, 25 minutes they spent together on the world’s most famous tennis court. “Not my standard Wednesday, that,” everyman’s everyman said at the end of it all. “Next Wednesday might be quite different.”
AINT QUENTIN EN YVELINES, France—Rory McIlroy has no regrets about deciding not to go to the Rio de Janeiro Olympics because of concerns over the Zika virus, saying he and other golfers do not consider Olympic golf to be the “pinnacle” of their sport compared to playing in majors. “We dream of winning Claret Jugs and we dream of winning green jackets,” the four-time major winner said on Wednesday. “Whether that makes golf look insular in any way...it’s just the way it is.” Last week McIlroy became one of the most highprofile sports stars to opt out of the Rio Games. The 27-year-old Northern Irishman said this month that he and fiancée Erica Stoll may consider starting a family within a couple of years. Zika is a mosquito-borne virus which has been linked to severe birth defects and possible neurological problems in adults. “I’ve said to people I have four Olympic Games [major championships] a year,” McIlroy said ahead of the French Open golf tournament near Paris. “That’s my pinnacle. That’s what I play for. That’s what I’ll be remembered for.” Other golfers to pull out of Rio are top-ranked Jason Day and US Open runner-up Shane Lowry; former US Open champion Graeme McDowell; Australian pair Marc Leishman and Adam Scott; South Africans Branden Grace, Louis Oosthuizen and Charl Schwartzel; and Fiji’s Vijay Singh. “Some people argue that it would have been better to send amateurs there, but the whole reason that golf is in the Olympics is because they wanted the best players,” McIlroy said. “But, unfortunately, with where it is this year, people just aren’t comfortable going down there and putting themselves or their family at risk.” McIlroy added that “if the Olympic Games were in most other cities...you wouldn’t find as many people not wanting to go.” American cyclist Tejay van Garderen is another sportsman to cite Zika as the reason behind not going to Rio. Basketball star Stephen Curry has dropped out of the games, not specifically citing Zika but noting that “other factors” played a role in the decision. McIlroy thinks golf is not affected the same way. “I don’t think it’s embarrassing for the game,” he said. “Because most other athletes dream their whole lives of competing in the Olympics, winning an Olympic gold, and we haven’t.” He announced in April that he was skipping the Bridgestone Invitational to instead play at the French Open for the first time since 2010. He is playing here as part of his preparations to win the British Open for the second time after triumphing in 2014. The 100th edition of the French Open is being held at Le Golf National, which hosts the Ryder Cup in 2018. Play begins on Thursday.
JOHNSON SAYS OLYMPIC MEETING CLEARS UP SOME RIO CONCERNS By Doug Ferguson The Associated Press
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KRON, Ohio—US Open champion Dustin Johnson is planning to play in the Olympics, and he said a meeting with USA Golf helped clear up a few concerns. Johnson said the Zika virus was discussed only briefly. Most of the meeting was about security. “I think they’ve got it covered pretty well,” Johnson said. The meeting had been planned long before Rory McIlroy and Jason Day pulled out of the Olympics in the past week, both citing concerns about the Zika virus. USA Golf is the national governing body for golf in the United States. “I thought the meeting was good,” Johnson said. “It cleared up a lot of things. Still waiting to hear back on a couple things that all four of us had a concern about, but we’ll have some answers early next week. At this point I’m going to go to the Olympics and represent my country, and I’m looking forward to it.”
The meeting was for the four eligible players—Johnson, Jordan Spieth, Bubba Watson and Rickie Fowler. Countries are allowed as many as four players in Rio provided they are among the top 15 in the world. Fowler is the lowest-ranked of those Americans at No. 7. Spieth said he was “uncertain” and that there were “quite a few different factors that would turn somebody away from going.” “I personally have not received enough information that would allow me to make a confident decision either way at this point, so it’ll be as we gather further information I’ll be able to lean one way or the other, and when I feel confident on either side, I’ll make the choice,” he said. “I just don’t have a lot of information yet, and I will by next week, I think, have a significant amount more.”
LOWRY’S CONFUSION
UpON further reflection, Shane Lowry says he was affected by the USGA’s indecision on whether Dustin Johnson should
receive a one-stroke penalty in the final round of the US Open. The USGA told Johnson on the 12th tee at Oakmont that he likely would get a one-shot penalty, and he could review it after the round. That meant Johnson didn’t know over the last seven holes if his score was going to be one-shot worse. And neither did the players chasing him, though each were told of the situation. Lowry was tied for the lead—as it turns out, he was one shot ahead—with five holes to play. Johnson finished with three pars and a birdie, while Lowry three-putted three straight holes and tied for second. “At the time I didn’t think it affected me, and I did my interviews afterward and I said it didn’t affect me at all,” he said. “But when I look back on it, it did.” He said Lee Westwood’s caddie told Lowry’s caddie as they walked off the 15th green that he didn’t think Johnson would be penalized. “We then stood on the 16th tee and went, ‘Right, we’re two behind.’ Whereas we were only one behind,” Lowry said.
The Irishman three-putted from long range on a fast green to drop another shot, and he never had a chance to catch up. “I think if Dustin really wanted to argue his case, he could have, and he might have got away with that penalty shot if he really needed to,” Lowry said. “It would have been interesting to see if the two of us have been tied or I would have won by one, whether Dustin would have got penalized that shot or not.”
argument that having the amateurs in the Olympics would grow the game the most—not us,” he said. “I think having a young golfer aspire to be an Olympian is more realistic as an amateur than a professional.... I think looking at the big picture, putting the amateurs in would be a better result for growing the game, if that’s the point of our sport being in the Olympics.” The other issue is making sure the Olympics fit in the landscape of professional golf. eligible players will have two majors and the Olympics in a span of five weeks, and then the four-tournament Fedex Cup playoffs. “It’s just kind of shoved in there at a very critical time for everything I’ve ever dreamed of winning,” Scott said. “I think they’ve got to figure out how professional golf fits in that system better, whether that’s a team event or stays individual, mixed team events, all of the above. But they should have a look at that because I think it’ll continue to be a problem beyond these games.”
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SCOTT ON OLYMPICS
FORMeR Masters champion Adam Scott was the first leading golfer to pull out of the Olympics. He cited scheduling and family, though he has made no secret that he is more focused on pursuing titles that have more history than Olympic golf. Golf hasn’t been part of the Olympic Games since 1904. Scott saw two problems with the Olympics unrelated to Zika or any security concerns. For starters, he believes the Olympics should be for amateurs only. “If the idea is to grow the game, I’d make an
President Rodrigo R. Duterte is sworn in at noon on Thursday by Supreme Court Associate Justice Bienvenido Reyes at his inauguration in Malacañan Palace. The former local government official and his style of governance has filled some with dread that his maverick reputation could undercut one of Asia’s liveliest democracies, given earlier not-so-subtle threats to kill criminals en masse. Most were pleased that his first order as chief executive pertained to the abbreviation of the process of obtaining permits or licenses from the various government agencies. Holding the bible is President Duterte’s daughter Veronica. Others in photo are Duterte’s children (from right) Paolo, Sarah and Sebastian. Malacanang Palace via AP
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n i nter n at ion a l cou r t will rule next month on the validity of China’s claims to a large swath of one of the world’s busiest and most disputed waterways. The court will release its decision on the South China Sea on July 12, first to the parties involved and then to observer-states, the Permanent Court of Arbitration in The Hague said in a statement on Wednesday. The Philippines brought the case to the tribunal, challenging China’s assertions to more than 80 percent of the South China Sea. Whatever the court finds, the ruling will risk inflaming tensions in the waterway,
PESO exchange rates n US 46.9600
Whatever the court finds, the ruling will risk inflaming tensions in the waterway, which hosts about $5 trillion of trade a year. which hosts about $5 trillion of trade a year. Under President Xi Jinping, China has more strenuously asserted its claims, straining ties with other claimant-states, like Vietnam, and exacerbating a rivalry with the US for military influence in the western Pacific. China has reclaimed more than 3,000 acres (1,200 hectares) of
land in the area to build artificial islands, some of them featuring ports and runways. The administration in Beijing says its sovereignty over the waters “since ancient times” is indisputable and demands other states obtain its consent for military transits near the features it occupies. Continued on A4
Insurers move to curb auto-insurance fraud
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XECUTIVES from the insurance industry are teaming up with government authorities to stop the increasing incidence of car-insurance fraud in the country. To better educate citizens on the growing number of carinsurance fraud, the Philippine Insurers and Reinsurers Association (Pira) will stage its first Motor Car Insurance Summit on July 19 at the Philippine International Convention Center, with the support of a number of government agencies. The event will inform attendees how to detect and prevent car-insurance fraud, with the hope of lessening its occurrences. The Insurance Commission (IC) is supporting the event, with Deputy Insurance Commissioner
$50B The annual loss worldwide due to car-insurance fraud
Vida T. Chiong delivering the keynote message on “The Reality of Fraud.” The IC has come up with a circular ordering all companies to formulate antifraud plans to help stop fraud. “Insurance fraud is on the rise and we want to address it collectively through collaboration with various stakeholders,” said Arturo B. Reyes, chairman of Pira’s Motor Car Committee. See “Insurers,” A2
n japan 0.4568 n UK 63.0579 n HK 6.0525 n CHINA 7.0744 n singapore 34.8446 n australia 34.9758 n EU 52.2524 n SAUDI arabia 12.5224
Source: BSP (30 June 2016 )
BMReports BusinessMirror
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Optimism abounds after Duterte takes oath as 16th president of phl Continued from A1
a long-term basis,” Luz added. Makati Business Club Executive Director Peter V. Perfecto and Management Association of the Philippines (MAP) President Perry Lim Pe echoed Luz’s sentiments. “We laud Mr. Duterte’s first order to all Cabinet secretaries to reduce requirements and processing time of all applications across agencies; and remove redundancies in these requirements; and to respect the sanctity of contracts,” Perfecto said. Pe said putting in place measures to facilitate doing business in the Philippines has always been the advocacy of MAP. “The ease of doing business is our MAP theme and advocacy, so that’s why we are so happy. Honoring contracts is much applauded. President Rody clearly shows leadership,” Pe said. The President’s promise to cut
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would have to be cancelled, pursuant to his new policy against gambling. “Online gambling must stop. I don’t want a proliferation of gambling all over the country,” Mr. Duterte said in the televised first Cabinet meeting held in Malacañang. President Duterte said he would ask Pagcor Chairman Andrea Domingo to cancel the licenses of those online gambling establishments, which—to paraphrase him—“have sprouted like mushrooms” throughout the Philippines. He was apparently referring to the so-called e-games casino outlets proliferating even in the poorer communities in the country and catering to lower-income gamblers betting on card games, bingo and professional basketball games. Under the charter of Pagcor, the establishment of these e-games casino outlets in residential areas
red tape and fulfill government contracts were part of the “wish list” presented by the business sector to his economic team during a business summit in Davao last month.
LGUs’ role
Local economists also welcomed the President’s directives to cut red tape and honor contracts, saying it will boost investor confidence and economic growth. Ateneo de Manila University EagleWatch Senior Fellow Dr. Alvin Ang said this will put pressure not only on national agencies but also on local government units (LGUs) to step up their efforts to streamline the bureaucracy. While national agencies handle the permits and documents needed by large firms to operate, Ang said LGUs are the ones that usually issue business permits to small firms. “The message is not just for the national [agencies] but the whole is illegal and goes against the rationale of regulating gambling as a tool to promote the Philippines as a tourist destination. Mr. Duterte said Pagcor revenues, which range from P30 billion to P35 billion per year, would be allocated for government hospitals to help indigent patients with their medical needs.
No changing of rules
The new President also vowed to honor government contracts already approved and ordered all agencies not to change the rules in the middle of the game. In his inaugural speech in Malacañang, Mr. Duterte also said the Philippines will abide by its international commitments in good faith as a member in good standing of the international community. “I order all department secretaries and heads of agencies to refrain from changing and bending the rules, government contracts, transactions and projects
bureaucracy and its going to pressure, particularly the local governments, to deliver,” Ang said. By stressing the need to cut red tape, Dr. Victor Abola of the University of Asia and the Pacific (UA&P) said the President is following the law which mandates LGUs to act on applications for permits within two weeks or not longer than 14 days. Anti-Red Tape Act of 2007, or Republic Act 9485, provides that all requests and applications must be acted upon by government offices and employees no longer than five working days for simple transactions and 10 working days for complex transactions. Abola said if there is any violation of the law, he believes the President will not think twice about filing administrative cases against erring public servants. “He is definitely a strong President; that is one thing. Agencies could not afford to be wishy-washy
already approved and awaiting implementation. Changing the rules when the game is ongoing is wrong,” Mr. Duterte said in his speech after being sworn into office at noon on Thursday. Members of the diplomatic corps, who were among those invited to the inaugural, welcomed President Duterte’s pronouncements regarding his economic policies, ostensibly aimed at increasing foreign investments in the Philippines by making the regulatory policies and the justice system more consistent and, thus, predictable. One of the most sensitive issues closely watched by foreign business chambers in the Philippines is the issue of refunds on their input value-added tax (VAT) payments, wherein the former leadership of the Bureau of Internal Revenue (BIR) had a policy of making it harder for a VAT-registered taxpayer to claim input taxes, wary that such claims for input VAT payments are being abused to evade
because Mr. Duterte walks his talk and his talk is fairly straightforward, simple and straightforward,” Abola said. “I have become more optimistic than before the elections, to be honest. [Because] I saw that he was toning down his [campaign] rhetoric early on,” he added.
Biggest beneficiary
While all sectors stand to benefit from the cutting of red tape, Philippine Institute for Development Studiessenior fellow Adoracion Navarro said the energy sector will benefit the most from streamlining government regulations. Navarro said she and her team of researchers are currently doing a study on renewable energy. Their preliminary findings indicated that companies have cited as a major concern the numerous permits they need to secure for their ventures. UA&P School of Economics Dean payment of correct taxes due.
Response of diplomatic community
The diplomatic cor ps, represented by the Papal Nuncio to the Philippines Archbishop Guiseppe Pinto, welcomed Mr. Duterte’s election as the new president and vowed support of the international community for his administration’s programs. “We are grateful to you, Mr. President, for your kind invitation to this historic encounter and offer to the diplomatic family the possibility to greet you personally in order to strengthen the bonds of friendship and collaboration between the Philippines and the government of their countries and international organizations they represent,” Pinto said in his toast remarks during the reception after the inauguration ceremonies. Mr. Duterte outlined his other policies in his inaugural speech, aside from his well-known advocacy
Cid Terosa also said the President’s pronouncements are consistent with his aim to further the country’s economic success. “I think those directives were really consistent with his sense of urgency of removing any obstacle to further economic growth and development. I felt the same urgency with which he announced that he will eliminate criminality and drugs in a matter of months, so I think those directives are consistent with the sense of urgency to act,” Terosa said. Navarro said the President’s promise to honor contracts is a “welcome directive,” as this would increase businessmen’s confidence in partnering with the government. This, Navarro said, also implies that both the government and private sector will now be more vigilant in making their contracts and partnerships withstand legal scrutiny.
“ I hope a l l t he e xec ut i ng agencies, when they enter into a contract or even that stage when they review contracts or even at the stage when they prepare projects during the project development stage, will ensure that the arrangements will really stand legal scrutiny,” she said. Ang said the market’s sentiment on the President seemed positive, given that the stock market was already up 2.25 percent even before he made his inaugural speech. Terosa said this may be because the President has already emphasized a sense of urgency during his pronouncements before, during and after the campaign. This sense of urgency is something that has been lacking in the Philippines. “It gives you confidence that this man knows what we need to do. This sense of urgency is what businessmen and investors would like to see.”
against crime and illegal drugs. He said the Philippines will honor its international commitments. “On the international front and community of nations, let me reiterate that the Republic of the Philippines will honor treaties and international obligations,” the new President said.
lease. I order all department secretaries and heads of agencies to remove redundant requirements and compliance with one department or agency shall be accepted as sufficient for all,” he said. “I abhor secrecy and, instead, advocate transparency in all government contracts, projects and business transactions from submission of proposals to negotiation to perfection and finally, to consummation,” he added.
Against red tape
On the issue of curbing corruption, the first order of Mr. Duterte to his Cabinet secretaries is to lessen red tape. President Duterte said corruption has pervaded the government, from the top ranks down to the bottom, resulting in widespread distrust by the public for their leaders. He committed to restore the people’s faith in the government by fighting corruption. “I direct all department secretaries and heads of agencies to reduce requirements and the processing time of all applications, from the submission to the re-
Due process
Mr. Duterte vowed not to resort to any extrajudicial methods of achieving his advocacies, particularly in the fight against crime and illegal drugs, as he is believed to have supported during his two decades of tenure as mayor of Davao City. I n res pon se to c r it ic i sm s against his style of fighting corruption as being “unorthodox and verging on the illegal,” President Duterte said his strongarm tactics should be viewed in the context of a person who has personally witnessed how crime, corruption and illegal drugs have destroyed the lives of Filipinos. But he assured that no illegal methods of prosecuting criminals will be used in his fight against crime and illegal drugs, and asked the Congress and the Commission on Human Rights to cooperate with the Executive branch in its efforts to enforce the laws. “As a lawyer and a former prosecutor, I know the limits of the power and authority of the president. I know what is legal and what is not. My adherence to due process and the rule of law is uncompromising. You mind your work and I will mind mine,” Mr. Duterte said to his critics.
Insurers. . .
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An estimated $50 billion every year is lost due to car-insurance fraud all over the globe. Car-insurance fraud comes in many forms, ranging from fake car theft, fake car crashes and fake car repairs. Event attendees include the leaders of the 65 nonlife insurance companies comprising Pira, executives from the Association of Insurance Claimsmen, the Association of Philippine Adjustment Companies, the Philippine Institute of Loss Adjusters, the Society of Underwriters and the Association of Insurance Brokers of the Philippines. Government agencies committed to attend the summit are the Philippine National Police (PNP) Highway Patrol Group and the PNP Crime Laboratory. Also invited are the Land Transportation Office, the National Bureau of Investigation and the Department of Justice. Reyes said the ultimate objective of the summit is to formulate an action plan for the insurance industry and other parties that could minimize or even eradicate car-insurance fraud in the country. “We hope to come up with an industry covenant that will be agreed upon by all parties,” he said. Rea Cu
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Friday, July 1, 2016
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Lawmakers bare agenda under Duterte presidency
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By Butch Fernandez @butchfBM & Jovee Marie N. dela Cruz @joveemarie
N agenda addressing politicaleconomic concerns were bared by the respective Houses of Congress, as Rodrigo R. Duterte formally assumed office as the 16th president of the Philippines.
As members of the 17th Congress officially assume office, bills adjusting individual income-tax brackets to inflation, reviving death penalty and resolutions calling for a Constitutional Convention (Con-con) and Constitutional Assembly (Con-ass) to amend the 1987 Constitution were among the top bills filed at the House of Representatives on Thursday. On the other hand, incoming Senate President Aquilino Pimentel III confirms that the 17th Congress is expected to fast track passage of enabling laws that will pave the way for quick implementation of economic reforms envisioned by the Duterte administration soon after lawmakers formally convene on July 25. House of Representatives Secretary-General Marilyn Barua-Yap said members of the 17th Congress filed the bill early to make sure the measures will be referred immediately for committee consideration when Congress starts its session. The lower chamber’s bills and index service said the first and second spots in the filings of bills were reserved for incoming Speaker Pantaleon D. Alvarez of Davao del Norte and outgoing Speaker Feliciano Belmonte Jr. He has filed 10 bills and a resolution calling for a Con-con to amend the 1987 Philippine Constitution.
Federalism push
ALVAREZ, of President Duterte’s PDP-Laban, is pushing for the proposal changing the form of the government from republican to federalism via changing the charter. The lower chamber, however, has yet to release the copy of the bills filed on Thursday. According to Pimentel, they want “to start the ball rolling for the shift to a federal system.” “So, as far as the legislators are concerned, that means a bill calling for a Con-con must be filed.” He assured that other senators are free to file a similar Con-con bill, “but I will make sure that I will file para hindi makaligtaan [so it would not be forgotten].” The senator said the bill to call for a Co-con “so that we can possibly adopt the federal system” is one of the path the lawmakers would be pursuing.
“If someone will file an antipolitical dynasty bill, I will request that it be tackled immediately because that should be connected with federalism,” Pimentel said. He conceded that this was one of the objections raised against federalism, acknowledging fears “it might strengthen the regional war lords or political powers.”
Refiling
BELMONTE, meanwhile, refiled a measure amending the economic provisions of the Constitution, what some refer to as “economic Cha-cha [Charter change].” The lower chamber, under the 16th Congress, did not push through with the expected voting on third and final reading of the economic Cha-cha, apparently due to lack of affirmative votes. The chamber needs the vote of at least two-thirds of its membership, or 217 affirmative votes, to pass the Cha-cha measure. The voting has also been affected by the Palace’s, particularly Benigno Aquino III’s, stance against Chacha. Belmonte’s resolution seeks to amend the 60-40 rule that limits foreign ownership of certain activities in the Philippines. He said the economic Cha-cha is a larger contributor to economic growth, as foreign direct investments (FDI) are seen to increase once ownership on estates and corporations— one of the issues raised by investors for not investing in the country—is relaxed. Under Article XII of the 1987 Constitution, foreign investors are prohibited to own more than 40 percent of real properties and businesses, while they are totally restricted to exploit natural resources and own any company in the media industry.
Con-Ass
REP. Alfredo Benitez of Negros Occidental, head of the Visayan bloc in the lower chamber, filed a resolution to convene the House of Representatives and the Senate into a constituent assembly to introduce revisions and/or amendments to the Constitution. “There have been clamor for change in the system of the government, shift to a federal form of government, provision of more autonomy
and empowerment of the local government; less restrictive economic policies; and other proposals that necessitate in the present Constitution,” Benitez said. Under the Constitution, the three modes of proposing amendments are constituent assembly, constitutional convention and people’s initiative. “The resolution proposes convening the Philippine Congress into a constituent assembly to introduce and adopt revisions and/or amendments to the Constitution, as it is the most expeditious and less costly that the other modes of Charter change,” Benitez said.
Tax adjustments
REPS. Romero S. Quimbo of Marikina City and Ruffy Biazon of Muntinlupa have filed a new income-tax measure seeking to adjust the individual income-tax brackets to inflation and reduce the tax burden of more than 6.2 million Filipino workers. The measure also decreases the corporate income-tax rate to 25 percent to make the country competitive. The measure aims for a more simple, efficient and equitable tax system, especially since the incoming administration has welcomed the proposal and even included it in its 10-point economic agenda. Quimbo and Biazon proposes the indexation of tax brackets to inflation based on the Consumer Price Index (CPI). The lawmakers said the income tax should be adjusted, considering that the P500,000—currently taxable by 32 percent—amounts to P1.1 million today.
New brackets
UNDER tax-measure proposal, the seven new tax brackets include: n Those earning not over P21,613 will pay a fixed tax rate of 5 percent; n Those earning over P21,613 but not over P64,839 would pay a fixed tax of P1,080 with an additional 10 percent of the excess over P21,613; n Those earning over P64,839 but not over P151,290 would pay a fixed tax of P5,402 with an additional 15 percent of the excess over P64,839; n Those earning over P151,290 but not over P302,581 would pay an excess tax of P18,370 with an additional 20 percent of the excess over P151,290; n Those earning over P302,581 but not over P540,323 would pay a fixed tax of P48,628 with an additional 25 percent of the excess over P302,581; n Those earning over P540,323 but not over P1.08 million would pay a fixed tax of P108,063 with an additional 30 percent of the excess over P540,323; and n Those earning over P1.08 million would pay a fixed tax of P270,160 with an additional 32 percent of the excess over P1.08 million. In the current setup, those earning P10,000 or less per month pay 5-percent income tax, while those
with yearly earnings of P500,000 and above pay a 32-percent income tax. “While my initial proposal was to overhaul the entire income-tax system, the adjustment of brackets to inflation is the most urgent step in our quest for genuine reform,” Quimbo said.
an inquiry, in aid of legislation, on the status of the automation program of the Bureau of Customs and resolution directing the appropriate committees to conduct an inquiry, in aid of legislations, on the status of smuggling cases filed by the bureau.
Auto adjustments
Food, health
QUIMBO added: “Once the tax brackets have been adjusted, a Teacher I earning P241,137 per annum who pays P14,231 in taxes, will now only be taxed P9,935.” According to him, the additional take-home pay of P4,296 can be used to increase the budget of the teacher’s family for education and savings. “ T he s av ings b e comes even more significant for those who have higher salaries.” Quimbo’s measure also provides for automatic adjustment of the tax brackets to inflation every three years. “In the current system, 6.2 million Filipino workers bear the brunt of paying the individual income tax-collection of [the] BIR [Bureau of Internal Revenue],” Quimbo added. “This means only 16 percent of our 22.2 million wage and salary workers serve as the milking cow of the BIR.” “We cannot allow the suffering of our workers to perpetuate under our archaic and unfair tax system,” Quimbo said. “We must ensure that they are able to live comfortably to provide for their families.” Pimentel affirmed he would welcome an income tax-reform bill adjusting the personal income tax lowering the tax rates.
Pension increase
MOREOVER, Biazon also filed measures mandating the P2,000 increase in the monthly pension of Social Services System members and an act amending Section 1 of Republic Act 9346, or an act prohibiting the imposition of death penalty in the Philippines. He filed a bill institutionalizing a Conditional Cash-Transfer Program, providing for the automatic indexation of cash grants and for other purposes. Biazon filed a measure mandating the National Telecommunications Commission to require Internet service providers to deliver a minimum standard of 10 megabytes per second for Internet connection speed.
Biazon’s calls
BIAZON also called to convene a Concon for the purpose of proposing amendments to, or revision of, the Constitution of the Philippines. Biazon, former Customs commissioner, filed a resolution directing the appropriate committees to conduct
REP. Rodolfo T. Albano III of Isabela refiled a resolution urging the proper committees to conduct an inquiry into the state of food and nutrition security, and persistent malnutrition in the Philippines. Albano also called on the appropriate government agencies to identify bottlenecks on the stages of the food change. He also refiled the proposed Philippine Compassionate Medical Cannabis Act. Albano said the bill will benefit thousands of patients in the country suffering from serious and debilitating diseases. 1-Pacman Rep. Michael Romero, meanwhile, seeks the creation of the Department of Sports that shall lead the implementation of policies on the promotion and development of sports and health-fitness programs in the country.
Resource management
REP. Kaka Bag-ao of Dinagat Islands filed the National Land Use Bill to ensure the proper management of “our land resources by harmonizing conflicting land laws and creating better mechanisms in adherence to the principles of sustainable development and people’s participation.” She also filed Philippine Mineral Resources Bill to guarantee that the exploration, development and utilization of mineral resources will primarily benefit the Filipino people while giving due recognition to sustainable development and protection to the environment. The lawmaker also pushed for the Security of Tenure Bill to give life to the constitutional provision on the right of all workers, including contractual employees, to security of tenure.
Taking time
AT the upper house, Pimentel said he sees the economic reforms being pushed by Mr. Duterte “will take time.” “Kailangan pa ng [The reforms need a law] so that will take time,” Pimentel said in an interview, even as he assured that those requiring Executive actions to address or fulfill Mr. Duterte’s campaign pledges will be attended to right away. According to Pimentel, on top of the Senate agenda for the first 100 days of the Duterte administration would be the enactment of laws in support of the new President’s economic programs, including income-tax reforms and review of
the existing land-registration system, among other priorities. “We will also determine what [other priority measures] will require legislative action,” Pimentel said. “’Yung micro, small, medium enterprises, executive action na ’yun. In place na yung batas. [The measures for micro, small and medium enterprises only need executive action. The law’s already in place.]” Pimentel clarified that, while he will be pushing for early approval of Duterte administration-endorsed bills, he would also consult fellow senators from the majority and minority blocs in crafting the chamber’s priority list. “Hindi lang bills ko; kahit bills ng colleagues ko na filed nila, we should be pursuing the immediate interests ng Duterte administration na agree naman kami lahat.” [It’s not only my bills but my colleagues’ too since we all agree we should be pursuing the immediate interests of the Duterte administration.],” he said
Emergency powers
SECOND in Pimentel’s list is the passage of a separate bill granting President Duterte “emergency powers to answer the transportation crisis, the traffic crisis in Metro Manila,” adding that he “would not mind kung sabayan ng similar bill” to cover Metro Cebu gridlocks in the same emergency bill. My personal preference is to separate the two bills so that they could be processed separately because they are differently situated, according to Pimentel. He added he also intends to include the death penalty bill in the priority list.
VAT adjustments
HOWEVER, Pimentel disagrees with earlier proposals to pass the income-tax measure side by side with upward adjustments in value-added tax (VAT) rates. ’Yung [VAT rate adjustment] hindi naman masyado urgent ’yun. Hindi rin urgent pataasin, para sa akin,” Pimentel said. “But ’yung income-tax reform, urgent pababain ’yung tax rates for our income tax.” Pimental acknowledged that their House counterparts also have their own priority list of bills to be enacted by the next Congress. “Of course, may House priorities naman, ’yung juvenile delinquency law, which the senators will also review, along with the age of criminal liability. So marami pa pong iba,” Pimentel said. “Inaasahan ko hindi lang ako mag pa-file. Basta tugma sa priority ng President, ipa-prioritize natin.” He reaffirmed that soon after Congress convenes sessions in the last week of July, the senators will tackle proposals to convene a Con-con.
Geri spending ₧10B to complete 5 hotels Cemex Holdings raises $465M in initial offer
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ourism and leisure township developer Global-Estate Resorts Inc. (Geri), a subsidiary of property giant Megaworld, is expected to complete five hotels in its townships in Boracay and Alfonso, Batangas near Tagaytay in the next three years. Four of these hotels are within Boracay Newcoast, a 150-hectare integrated tourism and leisure township in Boracay Island, while the other one will be in Twin Lakes, a 1,200-hectare development near Tagaytay. The company is spending around P10 billion to build the five hotels, which will offer a total of 1,850 rooms, including multilevel retail spaces. In Boracay Newcoast, these hotels include Fairways and Bluewater, which has been completed and now fully operational; Savoy Hotel Boracay, which will be completed by
the end of this year; Belmont Hotel Boracay, to be completed in 2018; and Chancellor Hotel Boracay, to be completed in 2019. The Twin Lakes Hotel in Tagaytay, on the other hand, will be completed next year, offering unparalleled panoramic views of the Taal Lake and a real vineyard surrounding the development. “One of Geri’s forefront roles in nation-building is to support the country’s tourism industry. We will strive to maintain our leadership in integrated tourism and leisure estates as Boracay Newcoast and Twin Lakes mature and become fully operational. With our new hotels, we hope to accommodate at least 700,000 tourists yearly in Boracay and Tagaytay,” said Monica Salomon, president of Global-Estate Geri. A report from the World Travel and Tourism Council revealed that
foreign tourist arrivals this year would hit 5.5 million with an annual growth of 6.6 percent. This means that, by 2026, foreign tourist arrivals will reach 9.19 million. This is on top of the 40 million domestic tourists who spend more on travel and leisure in the last five years. “In Boracay alone, we hope to capture around 20 percent to 30 percent of the tourism market when our hotels become fully operational. Our vast Boracay Newcoast township will set the bar of a world-class island destination that Filipinos will be proud of, as far as facilities and infrastructure are concerned,” Salomon said. This year Geri expects to maintain its 30-percent target of annual growth in net income as new projects are expected to be launched in Boracay Newcoast and Twin Lakes.
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emex Holdings Philippines Inc., a unit of the largest cement maker in the Americas, raised $465 million in the country’s biggest initial public offering (IPO) in more than two years. The building-material producer priced its sale of 2.03 billion shares at P10.75 apiece, the midpoint of a revised range, according to a Philippine Stock Exchange filing on Thursday. Cemex Philippines was offering the shares at P10.50 to P11 apiece, after this week cutting the top end of the marketed range by a peso, people with knowledge of the matter said earlier, asking not to be identified as the information is private. Cemex’s listing comes at a time when the United Kingdom’s vote to exit the European Union has roiled stocks and currencies globally. At $465 million, the IPO is the larg-
est in the Philippines since supermarket operator Robinsons Retail Holdings Inc.’s $621-million share sale in October 2013, data compiled by Bloomberg show. Six cornerstone investors, including BlackRock Inc. and Fullerton Fund Management Co., an arm of Singapore state investment com-
pany Temasek Holdings Pte., bought about $104 million of stock in the offering, according to terms for the deal obtained by Bloomberg earlier. Citigroup Inc., HSBC Holdings Plc. and JPMorgan Chase & Co. managed the sale, together with domestic lead underwriter BDO Capital & Investment Corp. Bloomberg News
A4 Friday, July 1, 2016
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Hope and fear as combative president takes over
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odrigo R. Duterte was sworn in on Thursday as president of the Philippines, with many hoping his maverick style will energize the country, but others fearing he could undercut one of Asia’s liveliest democracies amid his threats to kill criminals en masse. The 71-year-old former prosecutor and longtime mayor of southern Davao city won a resounding victory in May’s elections in his first foray into national politics. He has described himself as the country’s first leftist president and declared his foreign policy would not be dependent on the United States, a longtime treaty ally. The frugal noontime ceremony at Malacañang, the Spanish colonial era presidential palace by Manila’s murky Pasig River, was a break from tradition sought by Duterte to press the need for austerity, amid the country’s pestering poverty. In the past, the oathtaking had mostly been held at a grandstand in a historic park by Manila Bay, followed by a grand reception. Vice President Maria Leonor G. Robredo, a human-rights lawyer who comes from a rival political party, was sworn in earlier in a separate ceremony in her office compound. Vice presidents are separately elected in the Philippines, and in a sign of Duterte’s go-it-alone style, he has not met her since the May 9 vote. Duterte, who began a six-year term, captured attention with promises to cleanse his poor Southeast Asian nation of criminals and government crooks within six months —an audacious pledge that was welcomed by many crime-weary Filipinos, but alarmed human-rights watchdogs and the dominant Roman Catholic Church. Duterte’s inauguration address, before a crowd of more than 600 relatives, officials and diplomats, was markedly bereft of the profanities, sex jokes and curses that became a trademark of his campaign speeches. There were no menacing death threats against criminals, but he pressed the urgency of battling crime and graft, promised to stay within the bounds of the law and appealed to Congress and the Commission on Human Rights “to mind your work and I will mind mine.” “There are those who do not ap-
prove of my methods of fighting criminality, the sale and use of illegal drugs and corruption. They say that my methods are unorthodox and verge on the illegal,” Duterte said. He added: “The fight will be relentless and it will be sustained.” “As a lawyer and a former prosecutor, I know the limits of the power and authority of the president. I know what is legal and what is not. My adherence to the due process and the rule of law is uncompromising,” he said to a loud applause. Shortly after Duterte’s election win, the police launched an antidrug crackdown under his name, leaving dozens of mostly poor drugdealing suspects dead in gunfights or in mysterious circumstances. The killings provided a fearsome backdrop to Duterte’s rise. After his resounding victory, he promised to mellow down on the vulgarity and promised Filipinos will witness a “metamorphosis” once he becomes president. Days before his swearing in, however, he was still warning, “If you destroy my country, I will kill you,” in a speech this week. In a country long ruled by wealthy political clans, Duterte rose from middle-class roots. His brash style has been likened to that of presumptive US Republican presidential nominee Donald Trump, although he detests the comparison and says the American billionaire is a bigot and he’s not. Duterte is also the first president to come from the country’s volatile south, scene of a decadeslong separatist insurgency by minority Muslims. He has said he would direct security forces to refocus on fighting Muslim and Maoist insurgents—a reversal from his predecessor, Benigno Aquino III, who shifted the military to take charge of territorial defense while the police handle the insurgencies. Duterte’s initial foreign-policy pronouncements point to potential problems for Washington at a crucial time for the region. An
President Duterte (right) stands on the dais as outgoing President Benigno C. Aquino III reviews the troops during inauguration ceremony on Thursday at Malacañang Palace grounds in Manila, Philippines. Duterte becomes the 16th president of the Philippines. AP
As a lawyer and a former prosecutor, I know the limits of the power and authority of the president. I know what is legal and what is not.—Duterte arbitration tribunal in The Hague is scheduled to rule on July 12 on a case in which the Philippine government questioned the validity of China’s vast territorial claims in the South China Sea. China has refused to join the arbitration. Duterte has suggested he will
keep the US at arm’s length and has shown readiness to mend frosty ties with China. Those potential shifts have raised the specter of another difficult phase in more than a century of a love-hate relationship between the Philippines and its former American colonizer.
A senior Philippine diplomat said American and Australian officials are curious how the new president will handle relations with their governments, which have enjoyed strong ties with Aquino, who bolstered security relations as a way to counter China’s assertiveness in disputed South China Sea territories. The Chinese ambassador, on the other hand, has worked hard to repair damaged relations with Manila. He told Filipino diplomats Beijing would extend an invitation to the new president to visit China within the next six months, according to the Philippine diplomat who spoke to The Associated
Press, on condition of anonymity for lack of authority to discuss such topic with reporters. “Definitely, if the Philippines backs away somewhat from supporting the US in the South China Sea, this would be a problem for the US,” said Malcolm Cook, a senior fellow at the Institute of Southeast Asian Studies Yusof Ishak Institute in Singapore. “China likes to present the US as a destabilizing outsider in the South China Sea and in Asia, more generally,” he said. “The fewer Asian states that publicly counter this Chinese depiction, the more isolated the US.”
Priority mission for DND’s Lorenzana: Neutralize ASG
Ruling on sea dispute out on July 12
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Foreign Ministry Spokesman Hong Lei said in a statement on the ministry’s web site that China would seek solutions to the disputes based on direct talks with other claimant-states. Third-party actions would not be accepted, he said. China and the US have been on a diplomatic flurry before the ruling, with visits to Southeast Asian nations and public statements on their views. China succeeded this month in lobbying Lao People’s Democratic Republic to torpedo an Asean statement that had expressed “serious concern” over developments in the South China Sea and the risk to Asean-China ties. The US began to challenge China’s presence in the sea last October, sending ships and conducting flights near the islands China occupies in freedom of navigation operations that have infuriated Beijing. In May China sent fighters and warships to warn off the USS William P. Lawrence when it sailed near one of its outposts in the Spratly Islands. The Philippines contends that China violates the United Nations Convention on the Law of the Sea, to which both countries are signatories. It argues China’s “historic” rights are incompatible with the treaty, requests a determination about the status of the features China occupies and asserts that China
By Rene Acosta
@reneacostaBM
ealing with the security and economic threats posed by the Abu Sayyaf Group (ASG) would be the first business of the day for incoming Defense Secretary Delfin N. Lorenzana under the military’s overall security objectives after President Rodrigo R. Duterte spelled out his administration’s strong policy for law and order. “We will start with the Abu Sayyaf, because it was the order of the new president. We will address the Abu Sayyaf immediately so that at least we could neutralize them in order that we could prevent them from doing what they are doing right now,” Lorenzana said on the eve of his assumption as new defense secretary. Lorenzana will officially assume his post today (Friday), replacing Voltaire T. Gazmin, who has held the defense portfolio for six years under the Aquino administration. Lorenzana said there is a need to contain the ASG, and stop
Our coal imports from Indonesia has been stopped…we no longer have deliveries, and we only have limited supply of coal. If our supply runs out, we will have no power, that’s immediate, that’s a crisis.”—Lorenzana
its criminal activities, which, he said, had also affected the country economically. “Our coal imports from Indonesia has been stopped… we no longer have deliveries and we only have limited supply of coal. If our supply runs out, we will have no power, that’s immediate, that’s a crisis,” he added. Lorenzana said he and other security officials have laid out initial plans on how they would deal with the terrorist group, but such plans could only be mapped out and implemented once they have already occupied their posts. The plan, he revealed, could be executed “in a matter of days.”
Lorenzana said the military’s second objective is to support the Philippine National Police (PNP), as the latter will be launching a nationwide crackdown against criminality, with particular focus on illegal drugs. “If they will need us, we will provide them with troops. We will not operate on our own against drugs,” he stressed. Incoming PNP head Chief Supt. Ronald de la Rosa earlier said he will hit the ground running in the campaign against illegal drugs immediately after he is installed as the head of the more than 160,000-strong police force. Mr. Duterte will make his
first appearance today (Friday) as Commander in Chief of the PNP and the Armed Forces by installing de la Rosa to his new post and Lt. Gen. Ricardo Visaya as the new Armed Forces chief of staff. Visaya, a member of the Philippine Military Academy (PMA) Class of 1983, will replace acting Armed Forces Chief of Staff Glorioso Miranda. The installation of de la Rosa and the Visaya to their new posts will mark Mr. Duterte’s presence at Camps Crame and Aguinaldo. The military said it will tender honors to its new commander in chief with a customary parade. In naming Visaya as the new military chief, Mr. Duterte has said he will follow the seniority rule of succession, which was, however, not the case in the designation of de la Rosa, a member of the PMA of 1986. De la Rosa’s designation as PNP chief bypassed members of PMA Classes of 1982, 1983, 1984 and 1985 to the top police post.
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has interfered with Philippine rights via its construction and fishing activities.
‘Nonbinding’
“The result of the arbitration is nonbinding as far as China is concerned,” Chinese Admiral Sun Jianguo said at a forum in Singapore in June. “The Chinese government has already repeatedly made it clear that it will not accept it, will not attend the arbitration, does not acknowledge it and will not implement the result of the arbitration.” The Philippines brought the case after China seized the Scarborough Shoal in 2012. Beijing declined to submit formal documentation but filed a position paper arguing the Philippine submission was about a sovereignty dispute and outside the court’s jurisdiction. The Permanent Court of Arbitration rejected the argument and deemed the paper “as effectively constituting a plea.” “Countries across the region have been taking action and voicing concerns publicly and privately,” US Defense Secretary Ash Carter said earlier this month. “As a result, China’s actions in the South China Sea are isolating it, at a time when the entire region is coming together and networking. Unfortunately, if these actions continue, China could end up erecting a great wall of self-isolation.” Bloomberg News
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Banks can reap double amnesty from tax truce
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he upcoming amnesty for Indonesia’s tax-cheating elites could well become a pardon for the country’s depositstarved banks. Between July and March next year, Indonesians can declare their undisclosed assets and repatriate them from overseas, where they’re commonly held, by paying a levy of between 2 percent and 5 percent.
$360B The estimated value of unreported assets of Indonesians abroad
Nobody quite knows just how much wealth is parked in property and other assets abroad. Start with Global Financial Integrity’s estimate that $180 billion has illicitly left the country since 2004. Conservatively assume that the current value of assets purchased with those financial flows is at least twice as much. That’s already a staggering $360 billion. If even 10 percent of it flows back over the next nine months, the country’s financial system gains a cool $36 billion. That’s a bonanza for banks struggling to get over the end of a Chinaled commodities boom. Together, lenders have $332 billion in deposits that are increasing at an annual 6 percent pace—a far cry from the 15 percent average growth witnessed since 2005. A lift to the deposit base will be great news for banks that find it hard to coax the archipelago’s 256 million people to park their savings with them. Four lenders—Bank Mandiri, Bank Rakyat, Bank Central Asia and Bank Negara—corner half of all deposits. That leaves more than a 100 others, including Hongkong and Shanghai Banking Corp., Standard Chartered, Citigroup and Development Bank of Singapore, scrambling for a share of the rest. The extra tax collected by the government will do double duty. W hen President Joko Widodo spends the money on badly needed infrastructure projects, lenders will see an increase in loan demand, particularly from construction and materials companies, such as Indocement, Semen Indonesia and Jaya Konstruksi, whose shares have fallen between 11 percent and 25 percent this year. In the absence of a deep local-currency corporate bond market, any gains from new credit growth will primarily go to banks. All this presupposes that those disclosing their wealth will trust the government’s promise that information given by them won’t be used to initiate criminal proceedings—unless they’re declaring spoils from human trafficking or drug cartels. Still, it’s not all carrots. There’s plenty of inducement in the looming big stick of eventual discovery. Come 2018, countries will begin automatic exchange of information on tax evasion. No wonder there’s an amnesty program afoot in India, as well. That’s another large economy where banks are struggling to raise deposits. But Indian lenders, especially the state-run ones, are drowning in soured debt. Indonesia’s bad-loan problem is nowhere near as big. Companies with profit less than their interest costs collectively owe just $10 billion, according to former Credit Lyonnais Securities Asia banking analyst Daniel Tabbush. In a banking system with $347 billion in outstanding credit, that’s a number investors can forgive. Bloomberg News
Editor: Max V. de Leon • Friday, July 1, 2016 A5
Asean stocks extending rebound after Jakarta enters bull market
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outheast Asian stocks have been quick to shrug off the postBrexit blues.
The Jakarta Composite Index (JCI) added to gains after entering a bull market on Wednesday on the passing of a tax amnesty bill. Equities in the Philippines are at the highest in more than a year on optimism President Rodrigo R. Duterte, who took office at noon on Thursday, will speed infrastructure development. Thai stocks are up 18 percent from the year’s low and Singaporean equities are headed for the biggest three-day rally since March. Markets are regaining momentum after concerns about higher US interest rates and slower global growth cut short a rally that sent the Morgan Stanley Capital International (MSCI) South East Asia
Index to an eight-month high in April. Investors are optimistic the region is relatively insulated from Europe and stands to benefit from a more dovish Federal Reserve (Fed). The MSCI gauge has recouped all its losses since Britain’s vote to leave the European Union, while global stocks are still down 3 percent. “Investors are running away from Europe and into areas where there is growth,” said Mixo Das, a strategist in Singapore at Nomura Holdings Inc. “Indonesia and the Philippines certainly fall into that category. Indonesia’s tax amnesty is definitely positive for the economy. In the Philippines any increase in infrastructure investment by the
Investors are running away from Europe and into areas where there is growth. Indonesia and the Philippines certainly fall into that category.” —Nomura Holdings
new government is most welcome.” Nomura now has a more favorable stance on Asean stocks versus Korean and Taiwanese equities, as they’re less dependent on demand
from Europe and other developed nations, the Japanese brokerage said in a note on Monday. The JCI rose 0.8 percent as of 9:53 a.m. in Jakarta following a 2-percent jump on Wednesday, as a tax amnesty bill passed on Tuesday is forecast to lure more than $40 billion of undeclared money back to Indonesia. The benchmark gauge has climbed more than 20 percent from a low in late September, fitting the definition of a bull market. The Philippines’s measure surged 1.9 percent after a 1.7-percent gain on Wednesday and is heading for the highest close since April 27, 2015. Singapore’s benchmark measure was up 1.8 percent, poised for a three-day advance of 4.2 percent. Thailand’s SET Index increased 0.6 percent, extending this week’s rally to 2.7 percent, and on course for the highest close in 11 months. Vietnamese shares rose 0.8 percent to the highest since July 2015. “While Brexit is really bad for the
Malaysia opposition leader charged with graft over 2015 property deal
Moody’s lowers outlook on Singapore banking industry to negative
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Lim Guan Eng (center), chief minister of northern Penang state, is arrested by the Malaysian Anti-Corruption Commission at his office in Penang island, Malaysia, on Wednesday. Lim, an opposition politician who has strongly criticized financial scandals involving Prime Minister Najib Razak, has been arrested on accusations of corruption. AP
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Malaysian opposition leader was charged with graft and abuse of power over property deals, throwing rivals of Prime Minister Najib Razak’s coalition further into disarray after recent election losses. Lim Guan Eng, chief minister of Penang state and secretary-general of the Democratic Action Party, allegedly committed two offenses, the official Bernama news agency reported, citing court proceedings on Thursday. He pleaded not guilty and claimed trial, and was bailed on a 1-million-ringgit ($249,000) bond, Bernama said. Malaysia’s opposition parties are in shambles and have splintered amid policy differences in the aftermath of the last general election in 2013. With one leader already in jail, and Lim facing charges that could potentially put him behind bars, it’s becoming more challenging for the opposition to mount a coherent front against Najib, who has weathered graft allegations of his own and efforts by a former leader to remove him. “The opposition is being decimated, and this process will go on for quite some time,” said Oh Ei Sun, an analyst at the S. Rajaratnam School of International Studies in Singapore and Najib’s political secretary from 2009 to 2011. “Najib is consolidating his grip on power.” “The two charges are a travesty of justice,” Lim said in a press conference in Penang after he was granted bail. “I
did not receive any benefits other than what was allowed.” Najib has denied wrongdoing and was cleared by the attorney general this year of graft over revelations that $681 million appeared in his accounts before the 2013 election. The money was a donation from the Saudi royal family and most was later returned, the government said. The opposition won 51 percent of the vote in 2013, though Najib’s coalition gained more seats under a British style first-pastthe-post counting system. Opposition leaders lamented Lim’s arrest.
‘Vicious, relentless’
“These latest moves are nothing but part and parcel of a vicious and relentless conspiracy to discredit Guan Eng and other prominent members of the Federal Opposition,” said Azmin Ali, deputy president of the opposition People’s Justice Party and chief minister of the state of Selangor. The prime minister’s press secretary declined to comment on the case as it is now before the court. The Malaysian Anti-Corruption Commission (MACC) has been probing Lim’s purchase of a bungalow at what his opponents said was below-market price. Lim said in March he bought the house in 2015 for 2.8 million ringgit from a private individual on a “willing buyer and willing seller basis.” The MACC said in March it was starting an investigation into the
acquisition. It wrapped up that probe last month and submitted the results to the attorney general. The MACC said in a statement on Wednesday that it arrested Lim on instructions from the attorney general.
Jail terms
Lim was charged on Thursday with allegedly using his position to buy the house below market value, an offense that carries up to two years in jail, according to the Malay Mail Online news web site. The second charge alleged he used his office to obtain gratification for himself and his wife by approving an application to convert agricultural land to residential land, the Malay Mail said. That carries a penalty of a jail term of not more than 20 years and a fine. Lim became Penang’s first chief minister from an opposition party in 36 years after winning in the 2008 general election. He is Malaysia’s only ethnic-Chinese state leader. Penang, the country’s second-smallest state, is one of its largest contributors to GDP and home to foreign electronics companies, including Intel Corp. The case may cause further disruption for an opposition that failed to capitalize on the gains it made in 2013. Former Deputy Prime Minister Anwar Ibrahim, who led the alliance against Najib at the polls, was sent to jail again last year for sodomy, a charge he denies. Bloomberg News
UK and Europe, Asia is largely insulated,” said Raymond Kong, who oversees $2.5 billion as a fund manager at One Asia Investment Partners in Singapore. “I don’t think there’s a lot of companies from Asia with huge exposure to the UK. We are looking to buy some Asian equities.” Credit Lyonnais Securities Asia Chief Equity Strategist Christopher Wood said he’s upgraded emerging markets to overweight from neutral in a research note on Monday, citing an increased negative outlook for European equities. Brexit provides an “excuse” for more monetary easing by the G7 central banks including, sooner or later, the Fed, he wrote. The drop on Friday after the UK voted to leave the European Union created buying opportunities, said Jemmy Paul, investment director at PT Sucorinvest Asset Management in Jakarta. “In the medium term things are looking good for the emerging markets.” Bloomberg News
oody’s Investors Service said it revised its outlook for Singapore’s banking industry to negative from stable, amid growing risks to profitability from exposure to energy-related industries and high levels of corporate leverage. Conditions for the lenders are worsening because of slower economic and trade growth in Singapore, as well as more broadly in Asia, Moody’s said in an e-mailed statement. The ratings firm expects economic growth in Singapore to slow to 1.6 percent in 2016 and 1.5 percent in 2017, below the average of 4.5 percent between 2011 and 2014. A slowing domestic manufacturing sector and weaker economic activity in its key trading partners, including Greater China and Malaysia, should represent significant challenges for Singapore, Moody’s added. As a result, the lenders’ asset quality may worsen slightly, with problem loans rising from a “very low” 1.1 percent of gross loans at the end of March, the ratings firm said. “The large banks are highly exposed to energy-related industries and shipping. Despite some rebound in energy prices so far in 2016, the quality of such exposures will deteriorate, because many of these firms are still restructuring their finances,” Moody’s said. On the other hand, Moody’s said Singapore banks have solid capital ratios, strong capital buffers and government support. The buffers should remain unaffected by higher credit costs because the banks’ income should be sufficient to cover rising loan-loss provisions, Moody’s said. Moody’s already has a negative outlook on the five individual banks it rates in Singapore, including local players DBS Bank Ltd., OverseaChinese Banking Corp. and United Overseas Bank Ltd. Bloomberg News
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U.S. Health execs prepare for Zika virus
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OUSTON—The poorest parts of Houston remind Dr. Peter Hotez of some of the neighborhoods in Latin America hardest hit by Zika. Broken window screens. Limited air conditioning. Trash piles that seem to reappear even after they’re cleaned up. On a hot, humid day this month, Hotez pointed at one pile, which included old tires and a smashed-in television with water pooling inside. It was a textbook habitat for the mosquitoes that carry and transmit the Zika virus, and one example of the challenge facing public-health officials. “I’m showing you Zika heaven,” said Hotez, the tropical medicine dean at Baylor College of Medicine. Hotez and other tropical-disease specialists are most concerned about impoverished urban areas along the Gulf Coast, where the numbers of the mosquito that spreads Zika are expected to spike. Texas already has dealt with dengue fever, transmitted by the same mosquito. Zika causes only a mild and brief illness, at worst, in most people. But it can cause fetal death and severe brain defects in the children of women infected during pregnancy. So far, Texas officials have reported 48 people infected with Zika, all associated with travel. In one case, the virus was sexually transmitted by someone who had been infected abroad. Public-health officials have spent months preparing for what they are certain will be at least some locally transmitted cases. “It’s not a matter of if, it’s a matter of when,” said Dr. Umair Shah, the executive director of the Harris County public health department. Florida and other states in the South where the Aedes aegypti mosquito is present are also taking steps to prepare. In Florida, for example, Gov. Rick Scott used his emergency powers last week to authorize spending up to $26.2 million for Zika. His action comes as Congress remains stalemated on President Barack Obama’s $1.9-billion proposal to fight the virus. A scaled-back $1.1-billion Republican-drafted measure was blocked in the Senate on Tuesday by Democrats opposed to its denial of new funding for Planned Parenthood clinics in Puerto Rico, where there already are more than 1,800 locally acquired cases and to easing rules on pesticide spraying. In Texas major cities have sophisticated mosquito-screening programs and years of dealing with other mosquito-borne illnesses, like dengue and West Nile virus. But local authorities in most of the state have limited or no mosquito surveillance. The mosquitoes they do capture are typically sent to outside labs, and getting results can take weeks. The smallest counties often have a single person driving around conducting surveillance—”Chuck in a truck,” Hotez calls it. The state health department has spent more than $400,000 since the start of the year to expand its lab capacity and to buy mosquito traps. It also launched a $2-million Zika-awareness campaign. Shah said there are cuts that can be made, “but there comes a point where you stretch people too much.” In Harris County, which encompasses Houston and is the third-most populous county in the United States, officials aren’t waiting for the federal government. They purchased their own testing machines and have retrofitted two labs to run tests only for Zika to get results faster. Mosquito traps are set out on lawns and inside sewers in more than 250 designated areas. Thus far, no mosquitoes have tested positive for Zika. If one does, the county will send out three-person investigative teams and use staff from other agencies and volunteers to clear any containers with water and other possible mosquito-breeding grounds. Other counties don’t have the same capacity. Hidalgo County, which covers McAllen and poor areas along the border with Mexico, is using 12 traps to collect mosquitoes for testing, County Health Director Eduardo Olivarez said. Officials also are trying to get residents to clean up trash and install window and door screens. He is stymied by the problem of old tires collecting across the county, apparently on their way to and from Mexico. The county has several “colonias,” settlements with recent immigrants that often lack running water or basic infrastructure. Still, Olivarez says he’s not expecting large Zika outbreaks because even the poorest parts of his county are less congested and have more air conditioning. “Do we have poor areas? Can we look at improving our areas? Definitely,” Olivarez said. “But I get people who get dengue and West Nile, and they live in air-conditioned homes.” AP
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North America leaders urge against Trump’s isolationism L
Britain anxiety on immigration started long before Brexit
ONDON—To hear European Union (EU) officials talk, the freedom of workers to move wherever they wish within the 28-member union is a fundamental principle—one they won’t alter even though discontent with free immigration was a major issue in Britain’s vote last week to leave the EU. But it wasn’t always like that. Just over a decade ago, Britain threw open its doors to immigrants from Poland, the Czech Republic and six other Central and Eastern European countries newly admitted to the EU—while most other EU members took stringent steps to keep them out. The consequences of those actions are still being felt in Britain today. Poles, who represent the largest group of nonnative workers in the country, have become the target of anti-immigrant sentiment stirred up by the recent “Brexit” campaign, which culminated in last Thursday’s vote.
333,000
The number of immigrants to Britain in 2015
Mexican President Enrique Peña Nieto (from left), Canadian Prime Minister Justin Trudeau and US President Barack Obama take part in the North American Leaders’ Summit at the National Gallery of Canada in Ottawa on Wednesday. Sean Kilpatrick/The Canadian Press via AP
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TTAWA, Ontario— President Barack Obama and the leaders of Mexico and Canada pushed back forcefully on Wednesday against the isolationist and anti-immigrant sentiments that have roiled Britain and been championed by GOP presidential candidate Donald Trump. The leaders warned against easy solutions peddled by “demagogues” who feed on economic anxiety. With tensions growing over terrorism and fallout from Britain’s exit from the European Union, Obama acknowledged that Americans and others have reason to be concerned about their own future in a rapidly globalizing economy. He said concerns about immigrants had been exploited by politicians in the past, but he insisted he wasn’t worried Americans will follow that path. “We should take some of this seriously and answer it boldly and clearly,” Obama said, without naming the Republican presidential candidate. “But you shouldn’t think that is representative of how the American people think.” Gathering in the Canadian capital, the leaders defended their calls
for freer trade within the continent and beyond. They argued that, instead of withdrawing from the world, advanced countries should focus on higher standards, wages and legal protections that would ensure the benefits of globalization are widely felt. “The integration of national economies into a global economy, that’s here. That’s done,” Obama said. Obama’s comments at a news conference with Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto came as the leaders sought to show unity amid growing nationalist movements in Europe and elsewhere, epitomized by Britain’s move to leave the 28-member EU.
Though Britain’s decision has rattled the global financial system, Obama said he believed the markets were starting to settle down. Still, he acknowledged there would be “genuine longer-term concerns” about global economic growth “if, in fact, Brexit goes through.” “This doesn’t help,” he said. Obama added that his message to British Prime Minister David Cameron and to German Chancellor Angela Merkel, who is largely spearheading Europe’s response, was that “everybody should catch their breath.” Though Merkel and other European leaders have urged Britain to start its withdrawal quickly, Obama called for a thought-out process that would be transparent and clearly understandable. “I think that will be a difficult, challenging process, but it does not need to be a panicky process,” the president said. The Canadian and Mexican leaders largely echoed Obama’s calls for staying focused on closer economic ties. Peña Nieto said Mexico sees opportunity for growth and investment by broadening its relationship with the rest of the continent. “We are competitors, yes, but we have complementary economies, and that will give more development to our society,” the Mexican leader said. And Trudeau said the three leaders’ strategy for combatting protectionist views was to “highlight how much trade and positive agreement among our nations are good, not only for the economy of the world and the economy of our countries, but it’s also good for our citizens.” Yet, it was Trump and his insistence that Americans are better served by reasserting independence
that shadowed the leaders’ meetings at the annual North American Leaders’ Summit. Even as the three took the podium in Ottawa, Trump was threatening to pull the US out of the North American Free Trade Agreement (Nafta), chanting at a rally, “No more Nafta.” When a reporter asked the leaders to weigh in on Trump, Obama intervened, suggesting his counterparts should be careful what they say, in case Trump ends up winning. “I’m not saying they shouldn’t answer. I’m just—I’m helping them out a little bit,” Obama joked. He appeared personally insulted by Trump’s claims to represent the public’s best interests, accusing the presumptive Republican nominee of wrongly purporting to be a populist. He said people like Vermont Sen. Bernie Sanders rightly deserve label of “populist” but that Trump is merely resorting to “nativism,” “xenophobia” and “cynicism.” “We have to call this mentality what it is: a threat to the values that we profess, the values we seek to defend,” Obama said later during a speech to Canadian Parliament, where a packed audience of about 1,000 interrupted him repeatedly with standing ovations. They chanted “four more years,” as Obama wrapped up his address. Ahead of the summit, Canada announced it would lift visa requirements for Mexican visitors as of December 2016, while Peña Nieto agreed to open Mexican markets to Canadian beef. All three leaders pledged to generate half of their electricity from renewable sources by 2025, and Mexico also committed to joining the US and Canada in tackling methane emissions. AP
Butter is neither good nor bad for the body, study finds
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ow-fat turkey meat, a bagel, cornflakes, margarine and soda are all worse for you than butter, according to a new study. A study authored by Dr. Dariush Mozaffarian, dean of the Friedman School of Nutrition Science and Policy at Tufts in Boston, has declared butter a “neutral” food. It isn’t good for you, but it isn’t bad for you, either.
There is no link between consuming butter and an increased risk of heart disease or stroke, the study says. It actually found that butter might slightly prevent Type 2 diabetes. “Overall, our results suggest that butter should neither be demonized nor considered ‘back’ as a route to good health,” Mozaffarian said in a statement. The findings “do not support a need for
major emphasis in dietary guidelines on either increasing or decreasing butter consumption,” the researchers wrote. The researchers analyzed nine eligible research studies representing 636,151 unique individuals with a total of 6.5 million person-years of follow-up. The average butter consumption across the nine studies ranged from one-third of a
tablespoon to 3.2 tablespoons per day. The study found small or insignificant differences in terms of total mortality, cardiovascular disease and diabetes. In four of the nine studies, people who ate butter daily had a 4-percent lower risk of developing Type 2 diabetes. But those findings need to be further explored, Mozaffarian cautioned. TNS
The reversal of approaches to the movement of labor is one of the ironies of the immigration debate in Britain and its contentious relationship with its 27 European neighbors. It also hints at how deeply misinformation and misunderstandings infect discussions about immigration here, and how they can be exploited to drive public opinion. Britons have been rattled by a sharp rise in net immigration over the last 20 years, particularly from EU countries. In 1997 EU immigrants numbered 18,000, about a third of all net immigration; in 2015, the EU accounted for nearly half of the net immigration total of about 333,000. Of greater concern to policy-makers is that the EU newcomers tend to crowd out betterskilled immigrants from other countries. In the immediate aftermath of the landmark referendum, leaders of the Brexit campaign tried to downplay the role of antiimmigrant sentiment. Writing in Sunday’s Telegraph, former London Mayor Boris Johnson, the leader of the ruling Conservative Party’s Brexit movement, flatly denied that the “Leave” voters were motivated by “anxieties about immigration.” Instead, he argued, the paramount issue was “control”—a more nebulous public discontent with bureaucratic rule-making from EU headquarters in Brussels. Yet British Prime Minister David Cameron, an EU supporter who announced plans to resign the day after the vote, said just the opposite on Tuesday during his final summit with other EU leaders. Fear of mass immigration was “a driving factor” behind the vote, he acknowledged. An anti-immigrant tone was an inescapable feature of the Leave campaign. At one point, right-wing politician Nigel Farage, one of its leaders, introduced a poster depicting a crowd of Middle Eastern refugees. Even though the refugees aren’t a major issue in Britain, the poster bore the legend: “Breaking Point: The EU has failed us all” and established a certain exploitative tone in the campaign. As is often the case, the greatest antiimmigrant sentiment, as represented by the Brexit vote, tended to show up in regions with smaller actual immigrant populations, and vice versa. In the northwest of England, where immigrants account for 2.8 percent of the population, 58 percent of voters chose to leave the EU. In London, where more than a third of residents are immigrants, 60 percent of voters opted to stay. That could partly be a result of the voting power of immigrantsturned-citizens, but immigration advocates said it also reflects locals’ greater familiarity with the work their neighbors do—they are less susceptible to immigrant-bashing. EU immigration has been a hot topic in Britain at least since 2004. Many Britons assume that immigrants strain government programs; in fact a higher percentage are employed than are native Britons, and the vast majority claim no public assistance. A widely cited study by University College London found that EU immigrants have brought a net fiscal benefit—paying as much as $26 billion more into public coffers than they consume in services. Moreover, the study asserted, they have endowed the country with “productive human capital that would have cost the UK £6.8 billion ($9.5 billion) in spending on education.” Los Angeles Times/TNS
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UK consumer confidence buckling under Brexit woes
A man uses a multicurrency automated teller machine in downtown Madrid, Spain, on June 24. Britain entered uncharted waters on Friday after the country voted to leave the European Union. AP/Francisco Seco
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nited Kingdom’s consumer confidence dropped this week after the country voted to leave the European Union (EU), according to a survey. YouGov Plc. and the Centre for Economics and Business Research said their daily tracker of sentiment has dropped to the lowest in more than two years. From a level of 111.9 earlier in the month, it has since slumped to 104.3. Also released on Thursday, a separate report from German Society for Consumer Research (GfK) showed that households’ faith in the economic outlook was shaky even before the referendum on June 23. The vote has created uncertainty about the possible future relationship of the UK and the EU, further complicated by Prime Minister David Cameron’s decision to resign and leave his successor to start formal exit negotiations. That’s increased tensions with other European leaders, who excluded Cameron from a meeting in Brussels on Wednesday and want the process to start soon. “Consumer confidence has collapsed since the vote,” Stephen Harmston, head of YouGov Reports, said in a statement. “Four days of uncertainty has wiped out the gains made over the last three years. It has not yet reached the depths of
the financial crisis in 2008, but we expect it to decline further as some of the consequences of Brexit kick in.” GfK’s survey, conducted in the two weeks through June 15, suggests sentiment was already becoming gloomier before the outcome. Its headline consumer index remained at minus 1 this month, but the measure of how consumers view the 12-month economic outlook slipped to minus 14 from minus 13, down 18 points from a year earlier. “One trend that continued in the run up to the referendum is a deepening pessimism over the general economic situation,” said Joe Staton at GfK. “In these extraordinary consumer circumstances, all bets are off until we all know more. We can expect plenty of volatility in consumer confidence at least until Brexit negotiations are under way.” GfK questioned 2,000 people for its survey. YouGov’s index is based on 7,000 online interviews per month.
EU trade negotiations to go on
The European Union and the United
States will continue negotiating a major free-trade deal, despite Britain’s decision to leave the EU, Europe’s top trade official said on Wednesday. EU Trade Commissioner Cecilia Malmstrom said at a think tank event that until Britain formally begins a process of withdrawing from the bloc, negotiations would proceed on the Transatlantic Trade and Investment Partnership (TTIP) on behalf of all its 28 members. “Sooner or later we will have to take some decisions when we see which way the UK is going, but for the moment it is there,” Malmstrom said at the Atlantic Council. “The US and the EU have all the reasons in the world to facilitate trade between us and that hasn’t changed. So yes, TTIP will survive Brexit.” Britons shocked the world last week by voting to exit from the European Union, and EU leaders are now trying to chart a path forward. With Britain also roiled by its decision, an official procedure on leaving the bloc likely with not be initiated for at least several months. “There are a lot of uncertainties related to Brexit. We cannot answer them now and we will have to wait until we see a more clear picture of that,” Malmstrom added. But an influential US labor leader said he was skeptical about TTIP. Richard Trumka, president of the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) said the agreement seems aimed at lowering, not improving standards. The deal intends to harmonize safety, labor, manufacturing and other stan-
104.3
The level of consumer confidence to where it has slumped, from 111.9 earlier this month
dards across the world’s two largest economies. “All the rules that you are setting up that I’ve seen, none of them have been tools to increase the lower standards. They’ve all been tools that can be used to decrease the existing standards down, and so we are a little skeptical,” Trumka said at the event. He also criticized a key component of the deal—special investment courts that would rule in disputes between governments and companies that feel they face undue legal hurdles to their business. Critics say such courts could place the interests of corporations above those of democratically elected governments. Trumka questioned Malstrom’s assessment that the TTIP, which has been in the making for three years, could be concluded and take effect before the end of President Barack Obama’s presidency. “It’s a complicated subject and you make it more complicated by pretending that there will be an agreement before the end of the year because I don’t see any likelihood at all of that happening,” Trumka said. Bloomberg NewsAndAP
Friday, July 1, 2016
When it’s already down
Airport attack hits Turkey tourism T he worst may not be over for Turkey’s troubled tourism industry. The deadly bombings that struck late on Tuesday could derail improvements that had been expected to follow President Recep Tayyip Erdogan’s efforts to mend relations with Russia and Israel. At least 41 people died and more than 200 were wounded. Attacks attributed to Islamic State (IS), blamed for Tuesday’s bombings, and Kurdish groups have struck major Turkish cities this year, damaging an industry that employs 8 percent of the work force and owes $17 billion to banks. Here’s the story of a difficult year for Turkish tourism: Data published on the morning of the attacks already signaled a grim outlook. Tourist arrivals not only fell in May for a record 10th month, but as hotels and resorts enter peak season, the slump deepened. Arrivals plunged 35 percent from the same month of 2015, after a 28-percent annual drop in April. The industry is headed for a 35-percent to 40-percent drop in income in 2016, Basaran Ulusoy, the president of the Association of Turkish Travel Agencies, said by phone. “We’ve got to nurse our wounds this year and look ahead to 2017,” he said. Aviation stocks reflect how the Istanbul bombings sunk optimism that Erdogan’s diplomatic forays to end a six-year rift with Israel and
a more recent standoff with Russia would fill hotel rooms. Russia used to send the secondlargest contingent of foreign visitors to Turkey, after Germany. But traffic tailed off after Turkey shot down a Russian fighter jet in November and President Vladimir Putin ordered economic sanctions in punishment, including a ban on charter flights. The latest data show Russian visitors plunged an annual 92 percent in May. Airline shares surged on Monday as Erdogan extended an olive branch to his Russian counterpart, but those gains were eroded on Wednesday, extending Turkish airlines stocks’ year-to-date losses to 21 percent. Russia today said it plans to lift its curbs on tourism to Turkey and vowed to resume cooperation. None of this bodes well for one of Turkey’s biggest weaknesses: Its current-account deficit. While the shortfall has narrowed since 2011, largely due to the slump in energy prices, the economy still relies heavily on foreign cash to finance growth at home, leaving it vulnerable to swings in investor sentiment. Economists surveyed by Bloomberg expect the deficit to start widening again this year, climbing back to 5.1 percent of gross domestic product by 2018. Losses from tourism income will at least double in the summer months, according to Ozlem Derici, an economist at Deniz Investment in Istanbul. Bloomberg News
Japan’s industrial production drops more than forecast
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apan’s industrial production declined more than economists forecast, as a drop in exports hit most of the country’s manufacturing sectors. Output declined 2.3 percent in May from April, when it rose 0.5 percent, the trade ministry reported on Thursday. The median forecast of economists surveyed by Bloomberg was for a 0.2-percent drop, and the slump was bigger than all but one of the estimates. The weak reading on production, along with Wednesday’s report that retail sales were flat in May and data showing another monthly drop in exports, adds to concern that Japan’s recovery is faltering after the economy returned to growth in the first quarter. The United Kingdom’s vote to leave the European Union last week has strengthened the yen and roiled financial markets, increasing risks to corporate earnings for Japanese companies. “The report signals production is weak across sectors,” Toru Suehiro said, senior market economist at Mizuho Securities Co. in Tokyo. The yen’s further strengthening after the Brexit vote is increasing the risks to production going forward, he said. Output dropped in 11 of 15 sectors, with chemicals excluding pharmaceuticals the biggest contributor to the over-
all decline. Other categories that also contributed to the drop were generalpurpose machinery and electronic parts and devices. The Tokyo Price Index has dropped almost 9 percent this month, plunging on June 24 with the Brexit vote, the most since the aftermath of the 2011 earthquake. The yen has strengthened more than 8 percent against the dollar this month. Output is forecast to rise 1.7 percent in June and then climb 1.3 percent in July, according to the trade ministry’s report. Overall production of transportation equipment gained 0.7 percent as output of passenger cars rose, offsetting a decline in production of minicars. Output of the smaller vehicles dropped 11.8 percent in May from the previous month according to the ministry, with sales slumping 14.3 percent from a year earlier because of scandals surrounding fuel-economy tests. Mitsubishi Motors Corp. last week forecast its first loss in eight years after setting aside money to compensate for manipulating fuel-efficiency ratings and falsifying test data. Suzuki Motor Corp.’s mini-car sales in Japan were hurt by the company’s admission it used improper fuel-economy testing methods. Bloomberg News
Morocco cashing in as safe haven amid Middle East turmoil A t a trade school next to Casablanca’s airport, trainees are learning how to rivet metal structures. After a 14week course, they’ll join a nearby Bombardier Inc. plant making fuselage parts. Next door, a group of mostly female students bundle wiring before soldering it to plugs and sockets, skills they will use at a newly opened Latecoere SA factory supplying Airbus. Morocco is cashing in on its reputation as a safe haven. As militant attacks and political unrest roil parts of North Africa and the Middle East from Turkey to Tunisia, the kingdom is using its proximity to Europe and cheap labor to lure a growing band of investors that also includes car majors. “It will take me three weeks to open a company here and three years in Algeria,” says Nabil Adel, ESCA professor. “Despite a few sporadic Islamic threats, Morocco has appeared to be a beacon of sta-
bility in a turbulent region,” said Philippe Dauba-Pantanacce, global political analyst at Standard Chartered Bank. “A growing number of European companies have made it a place of choice to do business across the Mediterranean.” The jobs they bring are a boon for a system of governance that, while stable for the region, is a work in progress. King Mohammed VI remains the preeminent political force even after conceding some powers after the Arab Spring in 2011. He presides over a coalition led by an Islamist party, whose popularity has taken a hit ahead of October’s general elections because of spending cuts. Most parties would like the monarch to yield more powers, yet none openly questions his authority.
Confidence vote Morocco isn’t immune to regional upheaval. Several hundred Moroccans joined
Islamic State (IS) and police occasionally break up terrorist cells. In 2011, a bomb killed 17 people at a Marrakech restaurant. But there’s been no major attack since, and business has thrived. Foreign direct investment has risen more than 11 percent since 2010 to 39 billion dirhams ($4 billion) last year. By contrast, foreign direct investment to Egypt and Tunisia remains well-below the pre-2011 levels, according to World Bank data. The kingdom has maintained its investment-grade credit rating at S&P Global Ratings and Fitch Ratings. Morocco’s credit risk has been largely stable this year while default swaps for Tunisia have climbed, according to data compiled by Bloomberg. It’s a vote of confidence in Morocco even as its economy faces a few headwinds. Agricultural output is expected to contract 9 percent this year hit by drought and textile companies are under pressure from Chinese
competition. Still, the central bank expects non-farm growth to accelerate to 3.2 percent in 2017, from 2.8 percent this year. Nabil Adel, a professor at management school ESCA, says Morocco’s business environment put neighbors in the shade. “If I want to open a company, it will take me three weeks here and three years in Algeria,” he said. “There’s no comparison.” The government is building a high-speed train link from Casablanca to Tangier, and expanding the port in Tangier, which by next year should be the fourth-largest container terminal outside Asia. It hopes both will propel a shift that in 2014 saw the automobile industry overtake phosphate mining as Morocco’s top exporter. Aerospace has been growing by more than 10 percent a year.
Female workers Alcoa Inc. in May inaugurated a 200-employee factory near Casablanca to make alumi-
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num fixtures for airplanes. On the same day in January Hexcel Corp. announced plans for a plant in the same coastal city to build fuselage parts, and Switzerland’s TE Connectivity Ltd. said it’s building cables assembly plant in Tangier. “There’s no reason recent growth shouldn’t continue,” said Hamid Benbrahim El-Andaloussi, president of Gimas, which groups Morocco’s aeronautics companies. “Western Europe has a [competitiveness] problem and we are the closest competitive base.” From almost none 10 years ago, about 12,000 Moroccans—50 percent of them women—work in the aerospace industry, and Benbrahim expects that to rise to 35,000 by 2020. Institute of Aeronautic Trades (or IMA in French) graduates earn just under 3,000 dirhams a month in their first jobs. France’s minimum wage is about five times as much.
Casablanca’s IMA is helping to supply the workers. It will produce 800 graduates this year, more than double the number in 2015, according to Director Patrick Menager. The school is only five years old, yet construction crews are building an extension and by 2020, 1,200 students a year should be graduating. Morocco’s car industry is also growing. PSA Peugeot Citroen last June announced plans to invest €557 million in a factory north of Rabat that should produce 90,000 vehicles a year from 2019. Renault SA in 2015 made 288,000 cars at its two Moroccan plants, up an annual 26 percent. Almost 90 percent were exported. Morocco traditionally exported phosphates, winter fruits and textiles. Then in 1999 Delphi Automotive Plc arrived near Tangier. The firm now has three units employing 12,350 people, mostly supplying electrical systems to European carmakers. Bloomberg News
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The World BusinessMirror
Friday, July 1, 2016
briefs
Brit indicted in botched attempt to shoot Trump
LAS VEGAS—A British man who authorities say tried to grab a police officer’s gun to shoot presumptive Republican presidential nominee Donald Trump at a Las Vegas campaign rally was indicted on Wednesday on federal criminal charges that, together, could get him up to 30 years in prison. A grand jury on Wednesday charged Michael Steven Sandford, 20, with disrupting an official function and two firearm possession counts, US Attorney Daniel Bogden said. Sandford’s arraignment was scheduled on July 6 in Las Vegas. He remained in federal custody, and his lawyer didn’t immediately respond on Wednesday to messages seeking comment. Federal agents say Sandford told them he drove to Las Vegas from San Bernardino, California, with a plan to kill Trump, and went to a Las Vegas gun range to learn to shoot the day before Trump appeared at the Treasure Island hotel-casino on June 18. AP
5 held for planning attacks on Indian religious, other sites
HYDERABAD, India—India’s federal investigative agency has arrested five people for allegedly collecting weapons and explosive materials to attack religious sites and sensitive government building in various parts of the country. During questioning late on Wednesday, the suspects revealed that they were being guided by an online handler suspected to be based in Iraq or Syria, the National Investigation Agency said in a statement, adding it is looking into their possible links with the Islamic State group. The statement said two semi-automatic pistols, chemicals for making deadly explosive substances and 1.5 million rupees ($22,000) in cash were recovered from the suspects in the southern city of Hyderabad. An air gun with telescopic sight and shooting practice target boards have also been seized during searches, the statement said. The agency accused the five of entering into a criminal conspiracy to wage war against the government of India. The suspects were due to appear in a Hyderabad court later on Thursday. AP
Attack kills 3, hurts 6 on military near Timbuktu
BAMAKO, Mali—The Malian military says a convoy came under attack not far from the town of Timbuktu in the country’s volatile north. Lt. Col. Diarran Kone, an adviser to the Malian Defense Ministry, confirmed the attack on Wednesday. Security officials in Timbuktu said three soldiers were killed and six others wounded. Northern Mali was occupied in 2012 by al-Qaeda and other jihadist groups before a French military operation forced them from power. The extremists have increasingly targeted the Malian military and international peacekeepers working to stabilize the country. Earlier Wednesday, the UN Security Council voted to increase the peacekeeping mission’s force by more than 2,500 troops. The council also authorized an increase in mine-protected vehicles. AP
Australia teen pleads guilty to plot to kill policeman
MELBOURNE, Australia—A teenager pleaded guilty on Thursday to plotting to run over and behead a police officer as part of an Islamic State group-inspired attack on an Australian Veterans’ Day ceremony. Sevdet Besim, 19, pleaded guilty in Victoria state’s Supreme Court to one count of planning for a terrorist act, which carries a maximum sentence of life in prison. Prosecutors said Besim was involved in a plot to attack last year’s services in Melbourne or the neighboring city of Dandenong marking Australian and New Zealand Army Corps (Anzac) Day, the annual commemoration of the 1915 Gallipoli landings in Turkey. The campaign was the first major military action fought by the Anzac during World War I and hundreds of thousands of people attend commemoration services around Australia. AP
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Turkey attacks raise familiar question on airport security
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ONDON—The deadly terror attack at Turkey’s largest airport has posed an alltoo-familiar question to security officials: how to protect passengers and bystanders from such carnage?
The attackers arrived via taxi, like many other passengers, to Istanbul’s busy Ataturk Airport on Tuesday night. Unlike others, however, their journeys ended in a wave of bloodshed that killed 41 people and wounded hundreds of others in an attack that security analysts say was nearly impossible to stop. “Whether you kill nearly 50 people in or outside of the airport is really just a matter of semantics,” said Matthew Henman, managing editor at IHS Jane’s Terrorism and Insurgency Centre. From an economic and security standpoint, it would be unfeasible to entirely prevent an armed attack without severe cost and disruption—especially at a busy airport, like Ataturk.” Airports around the globe have been bolstering security since the 1970s, following terror attacks. Israel was one of the first to take steps, after attackers in 1972 killed 26 people and injured 80 at Lod Airport, now Ben Gurion Airport. Airport security was also strengthened at many points around the world, following the September 11 terror attacks in 2001, and in 2006, when British and American intelligence agents uncovered a plot to smuggle liquid explosives through security in an attempt to blow up trans-Atlantic airliners. The latter resulted in precautions, which still prohibit passengers from bringing certain quantities of liquids and gels through security. The most recent attack occurred in March, when three coordinated bombings rocked the Brussels Airport in Zaventem and the Maalbeek metro station. In those attacks, claimed by the Islamic State (IS) group, 32 were killed and more than
300 wounded. In Israel’s case, a generous state budget allows for some 2,000 personnel to work exclusive in airport security roles, and many of those workers are undercover, according to Pini Schiff, CEO of Israel Security Association, one of Israel’s top aviation security experts. Passengers are also checked via radar, cameras and other equipment well before they enter the airport and laws allow for ethnic profiling, he said. “In the Turkey case, it seems authorities were completely caught by surprise,” Schiff said. “It appears this attack took weeks to plan.” CIA Director John Brennan said the attacks bore the hallmarks of the IS group and warned that the group wants to conduct similar attacks in the US. The Turkish government blamed IS, but the group didn’t immediately claim responsibility. “I am worried from the standpoint of an intelligence professional who looks at the capabilities of Daesh and their determination to kill as many people as possible and to carry out attacks abroad,” Brennan said in an interview with Yahoo News. Daesh is an acronym for the Arabic name of the IS. Brennan credited effective homeland security measures and intelligence for the fact that the IS group has been unable to attack America directly—the Orlando and San Bernardino shootings were carried out by radicals inspired by the group but not under its control—but he believes the group will keep trying to penetrate American defenses. Jeffrey Price, who teaches at Metropolitan State University of Denver and wrote a textbook on aviation security, said Ataturk’s security was considered good, with layers that
Passengers embrace each other at the entrance to Istanbul’s Ataturk airport early on Wednesday following their evacuation after a blast. Suspected Islamic State group extremists have hit the international terminal of Istanbul’s Ataturk airport, killing dozens of people and wounding many others, Turkish officials said on Tuesday. AP/Emrah Gurel
extended beyond the checkpoints. “They may find that airport security did all they could” but that intelligence agencies failed to identify and stop the attackers before they could act, he said. The lesson for other airports, Price said, is to have enough armed police to regularly patrol public spaces and to keep checkpoint lines moving so that crowds don’t build in vulnerable areas outside the security perimeter. In the United States that means that the Transportation Security Administration (TSA) must balance its job of keeping dangerous items off planes with the need to move travelers through checkpoints quickly, he said. “The aviation-security industry has been saying for years that, eventually, someone is going to figure out that 500 people standing in line at the checkpoint is just as good a target as if they get through [the
2,000
The number of personnel who work for airport security in Israel
checkpoint] and get to an airplane,” he said. Kenneth J. Button, director of the Center for Transportation, Policy, Operations and Logistics at George Mason University, says airports are prime targets. Ataturk is one of the world’s busiest airports, drawing tourists from around the globe. “There is no solution. There are ways of limiting attacks,” Button said. “But none are foolproof.” Anthony Roman, a security ex-
pert who runs a consulting firm in Lynbrook, New York, said it appeared that the attack began outside of the secure area and might have done great damage even without getting deep into the terminal. “This is a sophisticated attack on the airport, which brings to light some of the shortcomings of American airport security,” he said. “We are vulnerable to easy penetration of the arrivals and departures terminals where large numbers of people gather for ticketing, for baggage claim and for TSA screening itself.” Roman said Turkish airports usually begin screening cars before they get to the terminal. Roman said major airports should have rings of security, starting with officers to watch vehicles entering the airport and pull over any that seem suspicious or out of the ordinary. Passengers, too, should be watched and, if necessary, pulled aside before they get inside the terminal. AP
External attacks rise as IS fortunes fall B
EIRUT—International terror attacks seemingly inspired by the Islamic State (IS) group are increasing, as its fortunes fall in Syria and Iraq. The attack on the Istanbul airport was still unfolding on Tuesday night when Turkish authorities said IS is the likely culprit, although no group has claimed responsibility so far. If IS is behind the latest carnage, it would be in keeping with its accelerated campaign of exporting terror, a tactic which appears aimed at deflecting attention from mounting territorial losses in Syria and Iraq. Here’s a look at what IS would hope to gain from such an attack:
Projecting strength
Two years after it declared a caliphate across large parts of Syria and Iraq, IS is in crisis. In the last few weeks, the group has suffered major territorial losses in Iraq, Syria and Libya, and is fighting hard to defend major strongholds. Iraqi forces have retaken the key city of Fallujah west of Baghdad, and Libyan forces have swept into the IS stronghold of Sirte. In Syria IS militants are fighting off US-backed forces in Manbij, a town on a key supply line from Turkey to the group’s de facto capital, Raqqa.
The losses can be added to a growing list of defeats, including the historic Syrian town of Palmyra in March, the Syrian border town of Kobani and the Iraqi city of Tikrit. The tempo of international attacks has increased with each military defeat, from the Paris attacks last November and the Brussels attacks last March to a suicide attack on the Syrian-Jordanian border last week that killed seven Jordanian soldiers, the deadliest attack in the kingdom in years. Such attacks help the group project strength and reassure supporters who might be demoralized by the shrinking borders of its selfstyled caliphate. Attacks can also give a boost to propaganda and fund-raising efforts, which are increasingly important as IS loses oil wells and other sources of revenue in Syria and Iraq. “At least in the near-term, the threat of inspired external attacks will rise as the group’s fortunes fall,” according to an analysis on Tuesday by the Soufan Group security consultancy.
behalf of IS, which claimed him as a “soldier of the caliphate,” but there is no evidence he was in contact with the group. Elias Hanna, a political studies instructor at the American University of Beirut, said the Istanbul airport attack follows the group’s modus operandi of using multiple suicide bombers to attack “soft targets,” as it did in Brussels earlier this year. Such random attacks against civilians instill fear in the hearts of its enemies, something which the group thrives on. The Istanbul attack also comes during the Muslim holy month of Ramadan, when radicals believe “martyrdom” holds special significance. IS has ordered stepped up attacks during Ramadan, calling for its supporters to strike wherever possible. Some of the biggest battlefield victories by Muslims in the time of the prophet Muhammad in the seventh century came during Ramadan, and hard-line clerics tout the month as a time for victory in jihad.
Propaganda factor
Striking turkey
For the same reasons, IS has an interest in taking credit for attacks carried out by self-radicalized loners. Orlando gunman Omar Mateen said he acted on
Turkey was long seen as a jihadi highway for allowing thousands of foreign fighters to join the war against Syrian President Bashar al-Assad. But it has become a tar-
get for IS in the last year, after shutting down border crossings with Syria and cracking down on smuggling. A European security official said intelligence has indicated IS is also getting less money from oil smuggling in Turkey, and suggested that there have been growing tensions between IS and the Turkish government. He spoke on condition of anonymity because he was not authorized to discuss the sensitive topic publicly. IS had not claimed responsibility for the airport attack by Wednesday evening, but it issued an infographic celebrating two years since announcing its caliphate. It claimed to have “covert units” in Turkey, among other places, according to the Search for International Terrorist Entities Intelligence Group. Interestingly, the group has not claimed responsibility for any attacks in Turkey, except for the slaying of Syrian activists there, even when the Turkish government has blamed the group.
Strategic ambiguity
Analysts say that reflects some unique dynamics between IS and Ankara. Mohamed Noureddine, a Lebanese University professor who specializes in Turkish-Arab rela-
tions, said he does not believe IS is behind the attack unless it claims it in an official announcement. Turkey and IS swap artillery shells across the Syrian border, “but neither side threatens the other’s core interests,” he said. North Atlantic Treaty Organization member Turkey shares global concerns about the extremist group’s ambitions, but may also see it as a counterweight to Assad’s forces and Kurdish insurgents in Syria. Ankara is part of the US-led coalition against IS, but may be wary of a full-scale confrontation with the group, which has thousands of fighters dug in along the border and likely has sleeper cells within Turkey. The absence of claims of responsibility “indicates that the group doesn’t fully consider itself at war with Turkey yet, but it is using these attacks to give it a stronger hand in negotiations over border access and the flow of oil and other materials,” said Matthew Henman, managing editor at IHS Jane’s Terrorism and Insurgency Centre. Hanna said the ambiguous dynamic between IS and Turkey is governed by the push and pull of overlapping short-term interests and clashing long-term ones. “Ambiguity is very important in war,” Hanna said. “It creates chaos and anxiety.” AP
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The World BusinessMirror
Superbugs, subsidies draw big pharma back to antibiotics
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ig pharma is creeping back into development of new antibiotics after decades of largely ignoring the business due to the scant rewards offered by such medications. With the planet on the brink of losing its miracle cures for bacterial diseases, research incentives from governments are spurring drugmakers to renew efforts to fight antimicrobial resistance and replenish the arsenal of infection-fighting drugs. Giants, such as Roche Holding AG and Merck & Co., are stepping up their efforts in the field while a host of start-ups seek partners to help market new products. “Some large pharmaceutical companies are reentering the space, and new companies focused on antibacterial development are emerging as industry darlings,” said Ankit Mahadevia, chief executive officer of Spero Therapeutics Llc., a biopharmaceutical company in Massachusetts that’s developing novel treatments for bacterial infections. In January more than 80 pharmaceutical, biotechnology and diagnostics companies, including Roche, Pfizer Inc., Novartis AG and GlaxoSmithKline Plc., pledged at the World Economic Forum to fight the threat of antimicrobial resistance. A Bloomberg survey of 18 of those companies conducted in May and June found that they expect to boost antibiotic research spending by an average of 36 percent this year, while expanding research staff by 6.5 percent. Survey respondents
had a total of five drug candidates in the initial stage of patient testing, four in mid-stage trials and nine in advanced studies. “There’s definitely more activity,” said Deborah O’Neil, CEO of NovaBiotics Ltd., a Scottish company developing a drug aimed at making existing antibiotics more effective by weakening bacterial defenses. “Big pharma’s eyes are open.” After penicillin was introduced in the 1940s, antibiotics became known as lifesaving superdrugs, able to fend off previously lethal bacterial infections. But scientists soon recognized that bacteria rapidly morph and develop resistance to the drugs. While a series of new antibacterials kept doctors ahead of the germs for many years, in recent decades bacteria have come roaring back, and today some new superbugs can evade virtually any treatment. “The antibiotics in our arsenal are becoming increasingly less effective,” said Carolyn Shore, an officer on the Pew Charitable Trust’s antibiotic resistance project. Until the past few years, big pharma companies had largely given up on new antibiotics because developing them can cost billions of dollars, yet deliver little profit. Any successful formula will be
prescribed sparingly to ensure bacteria don’t build up resistance, and unlike cholesterol pills or diabetes treatments, which patients often take for decades, antibiotics are only prescribed until the infection clears. Without added inducements, “it just isn’t profitable” to search for new antibiotics, said Martin Blaser, an infectious-diseases researcher who chairs a panel advising President Barack Obama on the bacterial health threat. Bristol-Myers Squibb Co., Eli Lilly and Co. and other pharma companies have shut antibiotic research labs, trimmed budgets or left the field in the past 15 years. But that’s starting to change after much cajoling from world health authorities, lawmakers and charities. The US government’s Biomedical Advanced Research and Development Authority says it will invest up to $170 million to help AstraZeneca Plc. move new antibiotics toward the market and has similarly supported Glaxo with as much as $200 million. Last year Britain and China established a joint fund to finance research aimed at tackling antimicrobial resistance. And a 2012 US law added five extra years of protection from low-cost copycats for certain new medications.
Simple math
Big drugmakers are getting the message. Roche last year joined with Japanese and Canadian partners to buy rights to an experimental compound that’s in early patient trials to treat severe infections. Glaxo, which has spent about $1 billion on antibiotics research over the past decade, is preparing to move a new product, called gepotidacin, into the most advanced phase of clinical testing, aiming to see if it can defeat multidrug resistant
80
The estimated number of pharmaceutical, biotechnology and diagnostics companies that pledged to fight the threat of antimicrobial resistance
E. coli and gonorrhea, and be used against biothreat pathogens. New offerings from start-ups also appear promising. NovaBiotics has five experimental medicines in the works, including one that may kill hard-to-treat bacteria without giving bugs a chance to develop resistance. London’s Motif Bio Plc. in March launched advanced clinical tests of the experimental antibiotic iclaprim, a possible treatment for lethal strains of drug-resistant bacteria, and hired an adviser to help find partners to commercialize it outside the US. And Melinta Therapeutics Inc., a closely held US drug developer dedicated to antibiotics, is working on a treatment that’s undergoing tests in patients with acute bacterial skin infections. The decision to invest in the project was helped by the US law offering extended patent protection, said Eugene Sun, Melinta’s CEO. Without some kind of support, “no one—not even us—would invest in development,” Sun said. “You can’t make your money back; it’s simple arithmetic.” Bloomberg News
Editor: Lyn Resurreccion • Friday, July 1, 2016
Senate panel to grant more visas for Afghans
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ASHINGTON—A Senate panel decided on Wednesday to provide an additional 4,000 visas to allow Afghans who sided with the American-led coalition and are at risk of being killed or injured by the Taliban to resettle in the United States. The Appropriations Committee voted unanimously, 30 to 0, to approve a foreign operations spending bill that includes a provision granting the extra visas and extending the so-called special immigrant visa program for another year. The Afghan civilians worked for the coalition as interpreters, firefighters and construction laborers. But the militants considered them traitors. The top American commander in Afghanistan, Army Gen. John Nicholson, urged Congress to extend the special immigrant visa program so they and their families could escape what he called “grave consequences.” Sen. Jeanne Shaheen, DemocratNew Hampshire, pushed for the program to be continued, telling her colleagues that many Americans who served in Afghanistan are alive today because of the support they received from Afghans willing to put themselves in danger. “If Congress fails to extend this program, this could be a death sentence for many Afghans who have stood shoulder to shoulder with our military and diplomats,” Shaheen said. Shaheen and Sen. John McCain of Arizona, the Republican chairman of the Senate Armed Services Committee, had sought earlier this month to extend and expand the visa program by adding an amendment to the annual defense policy bill. But a procedural dispute prevented most amendments from being debated and included in the legislation.
U.S. Congress clears Puerto Rico rescue bill, sends to president
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A SHINGTON— Congress delivered relief to debt-stricken Puerto Rico on Wednesday, sending President Barack Obama a last-minute financial rescue package to help the US territory of 3.5 million Americans. The Senate passed the bill on a bipartisan 68-30 vote, three weeks after the House overwhelmingly backed the measure. The vote came two days before the island is supposed to make a $2-billion payment to creditors. Puerto Rico is in a decade-long recession and has $70 billion in debt. Thousands have fled the territory for the US mainland. Businesses on the island have closed, schools have struggled with limited electricity and hospitals have asked for cash payment in advance for some medication. The White House and Republican and Democratic leaders in Congress have warned that without help from Washington, the island could descend into economic chaos, with signs already pointing to a humanitarian crisis. In a rare feat of election-year unity, all four Republican and Democratic leaders in Congress supported the bill, which would create a control board to oversee the US territory’s finances and supervise some debt restructuring. President Obama said after the vote that he would sign the bill and commended Congress for passing it. “This bill is not perfect, but it is a critical first step toward economic recovery and restored hope for millions of Americans who call Puerto Rico home,” Obama said. The legislation would not provide any direct financial aid to the territory, but leaders warned that a bailout could eventually become necessary if Congress doesn’t take this step. “If we don’t act before the island misses a critical debt payment dead-
A private security guard sits in front of a closed down business in the colonial district of Old San Juan, Puerto Rico, in this August 2, 2015, photo. Congress on Wednesday cleared the way for the passage of a last-minute financial rescue package for the territory of 3.5 million Americans. AP/Ricardo Arduengo
line this Friday, matters will only get worse—for Puerto Rico and for taxpayers,” warned Senate Majority Leader Mitch McConnell, Republican-Kentucky. The control board would be similar to one that oversaw the District of Columbia in the late 1990s. Its seven members would oversee negotiations with creditors and the courts over reducing some debt. In addition to creating the board, the bill would require the territory to create a fiscal plan and fund public pensions, which the Puerto
Rico government has shorted by more than $40 billion. Gov. Alejandro Garcia Padilla said that with passage of the bill, “we are starting to take the island back from creditors and giving it to Puerto Ricans.” He has warned the US territory would face multiple lawsuits if the bill is not approved, especially following Friday’s anticipated default on $1 billion in general obligation bonds. The legislation would temporarily block creditor lawsuits from being filed until February 2017.
The general obligation bonds are backed by the island’s constitution, but Garcia has said the government has no money to honor that debt, despite the implementation of new taxes and recent increases in utility rates. Garcia hasn’t said if the island will default on the other $1 billion that is due. “Puerto Rico cannot endure any more austerity,” Garcia said in an editorial published on Wednesday. Treasury Secretary Jacob Lew visited Capitol Hill on Tuesday in a bid to persuade some reluctant
A9
Democrats concerned that the board would be too powerful. Democrats have also opposed a provision that would allow the island’s government to lower the minimum wage for some younger workers. Lew urged senators to vote for the bill even though it isn’t perfect, saying that if the island defaults, the government may be forced to shut public transit, close a hospital or send police officers home. Democratic Sen. Bob Menendez of New Jersey was staunchly opposed to the bill, monopolizing the Senate floor for more than four hours on Tuesday evening, arguing that the bill adopts a colonial approach. Sen. Bernie Sanders, IndianaVermont, also opposed it. “In my view we need austerity not for the people of Puerto Rico, but for the billionaire Wall Street hedge fund managers who have exacerbated the crisis on the island,” Sanders said on the floor. In the days before the vote, some bondholder groups worked to turn senators against the bill, arguing it doesn’t sufficiently protect creditors and is tantamount to a bailout for the territory. Several labor unions also lobbied against the measure, arguing that a lower minimum wage could take money out of the Puerto Rican economy. The legislation is needed because Puerto Rico cannot declare bankruptcy under federal law. Mainland municipalities and their utilities can, while municipalities and utilities in Puerto Rico cannot. Some Republicans who opposed the bill said it could set a bad precedent for financially strapped states. “They’ll say, ‘if a territory can receive unprecedented authority from Congress, then why shouldn’t a state?’” said Senate Judiciary Committee Chairman Chuck Grassley, Republican-Iowa. AP
Senate backers of the visa program still face objections from skeptical lawmakers in the GOPled House. In the House’s version of the defense bill, lawmakers refused to provide the 4,000 additional visas. They did extend the program for a year, but restricted eligibility for visas only to Afghans whose jobs took them outside the confines of a military base or secured facility. Congress has added 7,000 visas to the program over the last two years alone to meet the demand and the Obama administration requested 4,000 more for the fiscal year that begins October 1. Since December 2014, the State Department has issued more than 3,000 special immigrant visas to Afghans who worked for the coalition. Thousands more visas are being processed through a pipeline that can take 270 days from start to finish. Shaheen said the supply of visas could expire by end of the year unless more were approved. The Congressional Budget Office has estimated the additional 4,000 visas would cost $446 million over the next 10 years. Afghans who resettle in the US become lawful permanent residents and are entitled to federally supported benefits such as Medicaid, subsidies for health care and food stamps. The cost has worried fiscal conservatives, who said it is not clear more visas are needed when so many haven’t been used. The program’s critics also said allowing so many Afghans to exit the country will drain Afghanistan of much-needed talent. Shaheen, a member of the Armed Services Committee, called objections over the cost a “red herring.” The expenses are offset by cost-saving measures found elsewhere in the Defense Department budget, she said. AP
Nepal to speed up aid grants to victims of 2015 quake
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ATHMANDU, Nepal— Nepal’s government has agreed to provide aid grants in two, instead of three, installments to people who lost their homes in last year’s devastating earthquake. Prime Minister Khadga Prasad Oli made the announcement after the main opposition party protested in parliament for days demanding the government speed up aid to the victims who are spending a second rainy season in temporary shelters. Under the agreement, the government will provide 75 percent of the total 200,000 rupees ($1,850) to each family in the first installment and the rest in the second. The 2015 earthquake damaged nearly 1 million houses. Only a few thousand people have so far received the first of the three grant installments to reconstruct their homes. Nepal’s earthquake reconstruction agency estimates that rebuilding the homes, offices, schools and hospitals damaged in the April 25, 2015, 7.8-magnitude earthquake will cost $7.86 billion. Foreign governments and donor agencies have pledged $4.1 billion in financial help for reconstruction, but the government has managed to sign agreements for only about half of that amount. Nepal has been criticized for the delays in rebuilding more than a year after the earthquake. It took months to form the reconstruction agency and appoint officials while millions of people were left without their homes. AP
A10 Friday, July 1, 2016 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
A new beginning for the better
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s President Rodrigo R. Duterte assumes office, we at the BusinessMirror wish him and his administration much success and Godspeed as they manage the ship of state.
While some in the press and the media have suddenly discovered that they can speak in opposition to the government—a fact that many seemed to have forgotten during the past six years—we are optimistic that now, what may be good for government will be good for the Filipinos. Our own closer examination of the incoming Cabinet shows a group of people who may have a quality that has been missing from the government for a long time: new creative solutions to old problems. The Philippine government cannot continue to address the challenges and questions that our country faces by applying the same answers. We need new thinking. We need innovative ideas. In his inauguration address, President Duterte correctly said people have lost faith and trust in their government. He also enumerated the reasons. Too many government officials are corrupt. Too much of government is inefficient and ineffective. However, what he did not mention that is also true and accurate is that too many in the government are simply lazy in their thinking and in their actions. The President’s call for Cabinet secretaries and heads of government agencies to streamline and speed up the application and approval processes over which they have control is a case in point. While this mandate sounds simple, the implementation is not. It will require a thoughtful and comprehensive examination of their departments. This will require figuring out ways to meet the President’s objectives while, at the same time, meeting and fulfilling the mandates of their departments. It will not be a task for those of lazy mind and spirit. When President Duterte called for all Filipinos to join in the quest for a better Philippines, we are sure his words fell on many deaf ears. It is easier for too many people to criticize, doubt and to be a detractor rather than a supporter. That is not to say that we should blindly follow any leader. In fact, the opposite is true. But if we are to find better solutions to our national problems, then we as a people must be willing to listen, learn and evaluate based on the facts. It is easier, sometimes, to accept the excuses for the government’s failure than to take our own responsibility to hold the government accountable. It is also easier to complain than to first give the benefit of the doubt for new ideas. If we are to genuinely have a new beginning for the better, it will be the job of all Filipinos in partnership with the government. As President Duterte said, “The ride will be rough, but join me just the same.”
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Congratulations James Jimenez
spox
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day after the oath-taking of the newly elected President, there doesn’t seem to be anything different, yes? The challenges we faced the day before—the high cost of living, the hours-long daily commute to and from work, and the nagging fear that none of us can literally afford falling sick, just to name a few— are all still very much with us. This should not come as a surprise. The task of building the future doesn’t fall exclusively on the shoulders of the elect. At most, we can expect those we have voted into office to provide us a vision we can all share, and the leadership necessary to channel our efforts, our talents and our determination toward the accomplishment of that vision. We cannot—and should not—expect our leaders to do all the work for us. So, our leaders may thunderously call for the extinction of corruption, but they will fail if we ourselves
continue to tolerate corrupt practices within our circles; we can give them all the emergency powers we can dream of, but they will still be unable to eliminate gridlock if we continue to run red lights and pay off the traffic enforcers who try to take us to task; and any promise of peace and order will come up empty if new predators rise up to take the place of those who have been incarcerated. The lesson for the voters is simple: vote for the ones you believe can inspire you to be better citizens and who can teach you the discipline
The Commission on Elections Employees’ Union [ComelecEU], the largest and most comprehensive organization of Comelec rank-and-file employees nationwide, views the deepening rift between the honorable commissioners as unfortunate and regrettable, considering the myriad issues and concerns they should be focusing on at the moment. required to be exactly that. But do not make the mistake of thinking that successfully predicting the winner will get you off the hook. With the barangay elections expected to come in October, we will all be faced with the opportunity to prove, once again, whether we have taken this lesson to heart. For now, though, my sincerest congratulations to our new leaders. nnn
It’s not really a question of “whether things have ever been this bad.” At the end of the day, the only thing that matters is that, yes, things are
not going well. Is it any wonder, then, that the Commission on Elections Employees’ Union would come out with a statement like this: “The Commission on Elections Employees’ Union [Comelec-EU], the largest and most comprehensive organization of Comelec rankand-file employees nationwide, views the deepening rift between the honorable commissioners as unfortunate and regrettable, considering the myriad issues and concerns they should be focusing on at the moment. “At this very critical juncture, the Comelec-EU respectfully calls on the honorable commission en banc to come together and unite. We hope that they find it in their hearts to settle whatever differences they may have at the moment and that they be granted the wisdom and humility to focus on the principal mandate entrusted to them by the Filipino people, which is to steer the Comelec on its primary duty to conduct free and honest elections in the country.” James Arthur B. Jimenez is director of the Commission on Elections’s Education and Information Department.
opinion@businessmirror.com.ph
Opinion
Good governance is rooted in people
Foretold and forsaken: Doomsday at our neighborhood (For ‘Lola’ Miling)
BusinessMirror
Tito Genova Valiente
Leonardo A. Lanzona Jr.
annotations
EAGLE WATCH
W
ith the inauguration of President Rodrigo R. Duterte to the presidency comes the hope that government institutions will be reformed. As promised in his campaign, change is coming. In particular, peace and order will be given the highest priority. In his economic agenda, security is one of the crucial factors for sustaining the growth of the economy. Meanwhile, those who voted for him believe that they have found the one person who can eliminate all the ingrained inefficiencies and corruption that ails society. Who is the one person who can solve laglag bala and drug trafficking? These voters believed Mr. Duterte when he referred to himself as the country’s “last card” who will finally solve this long-standing menace. In fact, with his political will and unique “Davao system of law enforcement,” he promised to solve this problem in less than one year. But can the Duterte administration fulfill all of its promises to voters and still work within the current path of economic growth? The solution lies in the setup of good economic governance. A buzzword in recent years, economic governance refers to the structure and functioning of the legal and social institutions that support economic activity and economic transactions. Without good governance, markets and transactions in general cannot function well. Specifically, good governance establishes three essential prerequisites of market economies: (1) the protection and security of property rights to guarantee the return on investments are earned by investors; (2) the enforcement of contracts to prevent people from reneging on their promised role in a transaction and acting opportunistically; and (3) the implementation of collective action in adequately providing for the public goods and the control of public “bads”, including not just physical but also institutional and organizational infrastructure. All these seem to be satisfied in the Duterte economic and social reform agenda. However, behind the general pronouncements of the new administration is the assumption that the government and governance are synonymous. As pointed out by Princeton University economist Avinash Dixit, other social institutions of economic governance also exist. They function especially in areas that the government serves poorly, or not at all. Sometimes, they work better than the formal law, because they have better expertise or information. And they are essential as a counterpoint against the government’s own abuse of power. The concern is that the Duterte administration may altogether opt to ignore these private institutions, because they may come in the way of government initiatives. Because they work in niches where the government cannot or does not operate, the government may view such movements as a violation of laws, thus, requiring the regulation or prohibition of production or consumption of the commodity in question. But private governance by social groups or industry associations can have advantages of information and expertise, and can use them for arbitration of disputes that the courts would find too complex to interpret and adjudicate. A good example is the use of contractualization in labor markets. It is widely held that, if the distortionary costs of regulations are not insignificant, as in the case of the Philippines, then the returns to both legal and illegal noncompliance will be high.
For President Duterte, an indicator of good government then is how well his administration is able to navigate through all of these constraints and find a way to recognize the role of private institutions and individuals in the country’s development. One particular form of noncompliance is the shift from permanent contracts to short-term flexible contracts, such as agency hiring or contractualization. This is not to say that the labor regulations cause such contracts. The argument is that, along with structural transformation, globalization and other industry factors, labor-market regulations and the associated enforcement systems in the labor market have created a situation where such contracts are viable and efficient. Enforcing a scheme that will force firms to regularize, say, 80 percent of the workers would surely be counterproductive, as firms can respond by selecting and hiring only a small set of workers who can work permanently and investing in capital equipment that will substitute for the temporary workers. In this case, the larger firms have a greater chance of survival, as the smaller firms, with limited resources to manage the costs of such regulations, are forced to close. In the end, workers who cannot find work in the formal markets will end up in the informal sector. Especially for larger firms, a more effective program of worker protection should be offered to workers, if these firms are to engage in temporary contracts. Other examples of different governance systems can be found the areas of media and agrarian reform. Institutions and contracts must be flexible enough to meet the needs of the parties involved in an activity or transactions In short, governmental and private institutions of governance must coexist even in low-income economies, like the Philippines. Many economic transactions take place outside conventional markets, e.g., within families, social networks and firms. Therefore, the issue of varied governance institutions is not the classical dichotomy between market and the government. Rather, it is the complex interaction of the whole system of governance and transactions. Different combinations can work well under diverse conditions. In principle, no institution or system will prove perfect or ideal —the so-called first-best—under all circumstances. Everything is “second-best,” limited by numerous constraints of information, incentives, commitment and rules of the political game. For President Duterte, an indicator of good government then is how well his administration is able to navigate through all of these constraints and find a way to recognize the role of private institutions and individuals in the country’s development. Leonardo Lanzona Jr. is professor of Economics at the Ateneo de Manila University and a senior fellow of Eagle Watch, the school’s macroeconomic research and forecasting unit.
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Y Lola Miling was a great fan of doomsday. She was scared of the soothsayers who predicted that all of us perish in a day. But, I feel, she was consoled that we would all be gone at the same time. No widows, no orphans, no grieving, no good-byes.
I think of this grandmother because June 22 of this year was a scheduled apocalypse. June 22 came and was gone. I missed my grandmother that day. My grandmother was a veteran of many doomsdays. She was a young mother when she and all the faithful waited on the beach of San Fernando, in Ticao Island, for the coming of the Messiah. Out of the mist, for there was chill and dreariness on that day, a small boat appeared. The boat was moving inland, with the waves like slaves with gentle oars hitting the sea and bringing the apparition closer. As the boat ran aground, my grandmother saw—and this she vividly told us—an old man, with wounds on the arms and on the knees. He held a rooster while at his feet was a dog. The iconography was confused, but Emilia, for that was the name of my grandmother, held on to her faith. Is this Jesus Christ? Behind her,
experts of iconography were debating among themselves. He must be Saint Peter, technically an able savior, for he held the key to the gate
An immoral boycott
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By Yossi Klein Halevi | Los Angeles Times/TNS
S the Middle East devours itself, leaving behind the worst human devastation since World War II, an international movement seeks to delegitimize Israel, the region’s only intact society. Israel alone in the Mideast has an independent judiciary, a free press, universal health care and religious freedom. Yet, the anti-Israel boycott, divestment and sanctions (BDS) movement has singled out the Jewish state as the world’s most pressing problem in the early 21st century. BDS is, at once, immoral and a threat to peace. Immoral, because it perpetuates the lie that Israel is solely or even primarily to blame for the absence of a Palestinian state—rather than the repeated rejection by Palestinian leaders of peace plans presented over the decades. Immoral, too, because it ignores the anti-Israel and anti-Jewish hate education on which generations of Palestinians have been raised, an education that denies any place for a Jewish state in any borders. The BDS movement not only places the entire onus for the conflict on Israel, but it is counterproductive. The primary beneficiary of the attempt to turn Israel into a pariah state is the Israeli hard right. Far-right politicians have long argued that the world hates the Jewish state not because of what it does but because of what it is and, therefore, Israel should dispense with the niceties of democratic norms in its war against Palestinian terrorism, end the illusion of a negotiated agreement and stake its maximalist claim to the entirety
of its ancient homeland. In intensifying the Israeli public’s sense of siege and despair, while encouraging Palestinian intransigence, the international movement to isolate and punish Israel undermines a two-state solution. Like a majority of Israelis, I recognize that the ongoing occupation of the Palestinian people is a longterm threat to my country’s wellbeing. The occupation challenges the integrity of Israeli democracy and threatens its Jewish majority, which is demographically essential for maintaining the only corner of the planet where Jews are sovereign. For these reasons, a majority of Israelis, according to polls, support a two-state solution. But that same majority of moderate Israelis is deeply wary of the ultimate goal of the Palestinian leadership—both the nationalist Fatah party and the Islamist militant group Hamas. As the Palestinian media broadcast on a daily basis, the goal isn’t two states living in peace but a single Arab-majority state in which Jews would be at best a
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(or gates?) of heaven (or heavens?). What was that dog doing there? San Roque then? The old man raised his right arm, the hand in a mudra intoning that peace be with everyone. The narrative, at this point, always got muddled. The next thing, an uncle was beating the hell out of the presumptive (this time, the usage is correct) redeemer. Later, people would discover the production design of this miracle: Where the cove hid the town, a man on a bigger boat would wait for the right time, and mist and waves, and push the vessel of the saint with confused iconography, to create the scene for the perfect doomsday. My grandmother, I believe, knew the many charlatans and fools she
met in her journey to belief, but she loved lighting candles to ward off tidal waves, and she was always ready to ask for forgiveness when someone recited to her the day the sun would whirl out of space and angels come ripping through clouds. Together, my grandmother and I would watch the sunset and we would always tell each other of what kind of day will tomorrow be. My grandmother is long gone and I envy her, because if the teachings of our old religion are true, she must be right there where doomsdays are re-scheduled and where the end of our world is planned, postponed and planned again.
tolerated minority. And given the fate of minorities throughout the Middle East today, the likely scenario is far more nightmarish. The Palestinian national movement as a whole intends to destroy Jewish sovereignty through the “right of return,” the demand that descendants of Palestinian refugees from the 1948 war—a war of aggression initiated by Arab states against Israel’s creation—move to the Jewish state, rather than to a future Palestinian state. That would create an Arab majority in Israel, undermining the state’s Jewish identity from within. Israel would collapse. Israelis across the political spectrum well understand the chilling implications of the right of return, even if much of the international community does not. The BDS movement—whose web site endorses the right of return as one of its three core goals—promotes that vision of a world without Israel. BDS dupes those of its supporters who genuinely seek a two-state solution into believing that they are working for peace. Indeed, the BDS web site doesn’t even mention two states for two peoples among its goals. Even if Israel were to uproot every settlement, redivide Jerusalem, forfeit its claim to the holy places and return to the 8-mile-wide borders of the pre1967 war, the BDS movement, presumably, would press on until Israel was erased from the map. BDS activists brand Israel as an illegitimate colonialist state, a European transplant in the Middle East.
This historical distortion erases 4,000 years of intimate connection between the Jewish people and the land. It ignores another factor of demography: A majority of Israel’s Jews don’t come from Europe, but from the Arab world, descendants of the nearly 1 million Jews, in effect, expelled from Arab countries, where Jews lived for millenniums. Israelis call them the forgotten refugees. As a means of applying economic pressure on Israel, BDS has failed. Despite the boycott, investments in Israel haven’t diminished. Israel is far too integrated into the global economy and the high-tech sector to be isolated. The attempt to turn Israel into a version of the old, apartheid South Africa will also fail, because there are too many people around the world who admire Israel. Israel-lovers are no less passionate in defending the Jewish state than Israel-haters are in seeking to harm it. The real threat of BDS, though, is more subtle than economic pressure. BDS creates an atmosphere in which Israel is solely to blame for the failure of peace between Jews and Arabs, and it negates the very idea of a nation-state for the Jewish people. BDS takes one of the world’s most complex and heartbreaking conflicts—between two traumatized peoples—and turns it into a morality play between darkness and light. The movement to criminalize Israel is itself a crime. Rather than Israel, it is the BDS movement that must be exposed and ostracized for its bigotry and hatred.
The UK needs new leaders, fast
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n amicable separation between Britain and the European Union (EU) will be difficult, complex and prolonged—but it’s achievable. Right now, the main obstacle isn’t lingering resentment in Brussels about the vote itself, but the collective seizure that has overwhelmed Westminster. Prime Minister David Cameron is stepping down, and the election of a new Conservative Party leader isn’t planned before September—already a compressed timetable. Jeremy Corbyn, leader of the opposition Labour Party, has just lost a vote of no
confidence among his parliamentary colleagues. If he resigns, there’ll be a delay in electing his replacement; if he doesn’t, he and his party will be paralyzed. At a moment of alarm bordering on hysteria in much of the country, the UK has a semifunctioning government at best. Some of this disarray is unavoidable. Cameron was right to say he’ll step aside, having set work in train on the technical preparations for exit. In his demeanor, he set the right example—responding calmly and methodically. Others need to rise to the same level.
So far as possible, the parties need to move faster than usual in selecting new leaders and ministerial teams. Even more important, though, is for every rank-and-file member of Parliament to get a grip. Both sides of the House of Commons have a collective responsibility to lead the nation through this crisis. Difficult as it may be, MPs need to find it in themselves to face this challenge in a spirit of unity. The new leaderships must be put in place with all due haste—and leaders of the Leave campaign, especially, need to be more visible and to show they’re
E-mail: titovaliente@yahoo.com.
ready to take charge. In contrast, haste is exactly the wrong prescription for Europe’s leaders. They must stop pressing for instant action. An orderly disentangling of Britain and the EU is the work of months, if not years. There is nothing to be gained, and a great deal to be lost, in forcing the pace of those talks. Needless haste in the EU will only make a bad situation worse, as will pointless squabbling in Britain. Urgency in Westminster, patience in Brussels: That’s the way to get through these next difficult weeks. Bloomberg View
2nd Front Page BusinessMirror
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Traffic situation in PHL worsened in 2015
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By Lorenz S. Marasigan
@lorenzmarasigan
he quality of life in the Philippines has deteriorated over time—nababoy (messed up), in the words of incoming Transportation Secretary Arthur P. Tugade— due to the chronic traffic congestion across the nation, which, according to a survey, ranks sixth in terms of the worst traffic conditions on the planet.
After a full year, the country rebounded from improving to worsening traffic conditions, data from online crowdsourcing organization Numbeo. From placing fifth in the 2015 midyear report of the Serbian online database, the Philippines rose eight notches to 13th by the end of the said year, only to fall back to fifth place today. Currently, the country has a traffic-index score of 282.60, with an average one-way transport time of 56 minutes and 88 seconds. This puts Manila as the fourth city with worst traffic in Asia, next to Jakarta, Mumbai and Kolkata. Traffic Index is a composite index of time consumed in traffic due to job commute, estimation of time-consumption dissatisfaction, carbon dioxide-consumption estimation in traffic and overall inefficiencies in the traffic system.
No. 5
The rank of Manila in Numbeo’s study on cities with the worst traffic conditions globally Likewise, the country posted an inefficiency index of 12,279.31, which assumes driving and long commute times. This index is meant to be “measurements of economies of scale in traffic.” There are numerous reasons traffic in Metro Manila worsened this year. Urban planners have blamed the poor planning of the city. Likewise, according to transport
experts, the number of vehicles in the country ballooned over the years, while the length and breadth of roads remained the same. Another factor is the inefficient masstransit systems, which operate at overcapacity on a daily basis. In a nutshell, the widening infrastructure gap and the lack of political will contributed to where the Philippines is today, in terms of transportation. Tugade even branded the congestion as a plague that has deteriorated the quality of life in the Philippines. He recalled that he used to eat dinner with his parents back when they were still working for the publicworks department. Now commuters cannot ascertain their travel time. Hence, his department will put prime importance on solving the traffic congestion in
all fronts— from roads, to ports and rails. “We will prioritize addressing our congestion problem,” he said, assuring that he will enact reforms first and foremost in his office. He will also seek for emergency powers in order to fast-track the procurement of much-needed infrastructure. Outgoing Transportation Secretary Joseph Emilio A. Abaya said he is hoping that Tugade will succeed in the war against congestion, saying that he will continue to help the agency, even after his term. “My prayers and hopes are with them. As I’ve oriented Secretary Tugade, it is my moral obligation to help and orient them well for them to succeed,” he said in a text message. Metro Manila loses roughly P2.4 billion in traffic daily, estimates from the Japan
International Cooperation Agency (Jica) showed. This is expected to balloon to P6 billion by 2030. To avert this, the Aquino administration adopted Jica’s Roadmap for Transport Infrastructure Development for Metro Manila and its Surrounding Areas, otherwise known as the Dream Plan. The P4.67-trillion road map calls for the establishment of a modern, well-integrated, coordinated and affordable transport system for Metro Manila and the adjacent areas of Bulacan, Pampanga, Cavite and Batangas. The system will consist of expressways; new roads elevated and on ground; railways, elevated and on ground; subways; airports; and seaports. Near-term components are for completion by 2016, while medium- and longer-term components are for completion by 2020 and 2030, respectively. When completed, the plan will accomplish at least three objectives: The reduction of traffic congestion in the metropolitan area; the diminution of air pollution in the metropolitan area and its environs; and the reduction of transportation costs to the urban population, especially the poor and other low-income groups. At the level of the individual, completion will result in the reduction of the average travel fare of commuters from the current P42 to P24, and also the lowering of the current average travel time of 80 minutes to 31 minutes. Tugade mentioned that in the course of his term, he will formulate a three-decade plan to solve all the transport woes in the Philippines. The comprehensive program, he said, will be legislated by Congress to ensure continuity.