Businessmirror july 22, 2016

Global economy may be slow, but it is

steadier than ever I

t’s not difficult to come to the conclusion that, economically speaking, we are living in very turbulent times. China’s great slowdown. Europe’s persistent woes. Brexit.

US economic confidence index The United Kingdom’s decision to exit the European Union did not immediately affect Americans’ confidence in the US economy. The US confidence Index was -16 in three-day rolling averages recorded before and after the referendum.

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Yet, on a bigger scale, all that’s just noise blocking the signal that the global economy is less volatile than any period in the modern era. This is the conclusion of new research led by David Hensley, director of global economics at JPMorgan Chase & Co. in New York.

Hensley’s work measures standard deviations of quarterly, annualized GDP growth for major developed and emerging markets, plus a selection of regions. The sample compares the middle of the business cycle leading up to the Great Recession with the middle of the next cycle, i.e., 2013 to 2016.

-4 -8

-16

-12 -16 -20

May ’15

July ’15

Sept. ’15

Nov. ’15

Jan. ’16

March ’16

May June ’16 ’16

Source: Gallup Graphic: Staff, Tribune News Service

See “Global economy,” A2

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United nations

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D.O.T. LAST TO KNOW AS CHINESE CANCELLATIONS PILE UP Competitiveness as tool

Sea-row ruling driving Chinese tourists away

By Ma. Stella F. Arnaldo

INSIDE

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Exceptional growth for Isuzu

motoring

Special to the BusinessMirror

HE Philippine tourism industry appears to be the first casualty of the ruling on the West Philippine Sea (South China Sea) by the Permanent Court of Arbitration (PCA) at The Hague, with hotels and resorts reporting cancellation of bookings by Chinese tourists.

Destinations that have been mostly affected are Boracay, Cebu and Bohol, according to tourism industry sources, with estimated losses reaching at least P20 million.

Arthur M. Lopez, president of the Philippine Hotel Owners Association Inc. (PHOA), told the BusinessMirror the cancellations of Chinese guests bookings were being

for local economic growth

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vershadowed by the various internaAlvin P. Ang tional events and the EAGLE WATCH crusade against drugs and crime were the results of the Fourth Round of Cities and Municipalities Competitiveness Index (CMCI) in the Philippines. The results were released on July 14, at the Philippine International Convention Center (PICC).

As it was in the past three years, the event drew audiences from the private business sector, national government agencies and local governments. This year the number of participating local government units (LGUs) has expanded to 1,389, from only 285 in 2013. The current number now represents about 85 percent of all local governments in the country. With this larger number and a longer time frame for assessment, the National Competitiveness Council (NCC) is now able to rank provinces, as well as award the most improved LGUs. Continued on A11

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Hyundai drives up with 53% growth

motoring

E2

right on course

GMA WALKS Police officers walk past a tarpaulin outside a government hospital in Quezon City, where former President Gloria Macapagal-Arroyo was detained, on Wednesday. On Tuesday the Supreme Court dismissed a plunder charge against her, and ordered her freed immediately after nearly five years of hospital detention. The Sandiganbayan finally issued her release order on Thursday. AP

M a z d a Skyactiv-D: Breaking sports barriers Chris Froome made the most of a brutal final ascent to the artificial lake of Finhaut-Emosson to tighten his grip on the race and take another step toward a third title in four years at cycling’s biggest event.

Tmap, Dulay to meet on tax-refund pleas c1

By David Cagahastian

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@davecaga

he Tax Management Association of the Philippines (TMAP) will visit Internal Revenue Commissioner Caesar R. Dulay next week to appeal the millions of pesos in value-added tax (VAT) refunds of corporate taxpayers denied to them by the previous administration without leaving any judicial or administrative recourse.

PESO exchange rates n US 47.0640

TMAP President Benedict R. Tugonon said Dulay is now “the only hope” for these corporate taxpayers, who lost their opportunity to appeal through the courts the denial by the Bureau of Internal Revenue (BIR) of their claims for VAT refunds.

A memorandum circular issued by former Internal Revenue Commissioner Kim S. Jacinto-Henares in 2014 “deemed denied” all pending applications for VAT refunds as of June 11, 2014.

Under Memorandum Circular 542014, pending applications for VAT refunds shall be deemed denied after the 120-day period mandated by law, within which the BIR commissioner must decide on the application for refund. Thus, a taxpayer shall have 30 days from the lapse of the 120day period to appeal before the Court of Tax Appeals (CTA).

But Tugonon said the circular is being applied retroactively, and had See “TMAP,” A2

n japan 0.4406 n UK 62.1810 n HK 6.0688 n CHINA 7.0460 n singapore 34.7080 n australia 35.1898 n EU 51.8504 n SAUDI arabia 12.5491

Source: BSP (21 July 2016 )

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Sea-row ruling driving Chinese tourists away Continued from A1

attributed to the “cancellation of charter flights to the Philippines,” an effect of the PCA ruling.

This developed even as the Department of Tourism (DOT) said it has not received any information of cancellations by Chinese tourists due to the PCA ruling.

“We have not received any cancellation reports,” DOT Undersecretary for Media Affairs Katherine de Castro said. She added, “We have an order from Malacañang that any issue connected to the WPS [West Philippine Sea] dispute, only the DFA [Department of Foreign Affairs] can provide a statement.”

While there is no official travel ban to the Philippines, a tourism industry source in China said, the Beijing “government has told some

travel agents to take out the Philippines from their tour [because of the PCA ruling]. Just like what happened four years back.”

The source was referring to the beginning of the diplomatic dispute between the Philippines and China in 2012, which resulted in an unofficial travel ban by the Beijing government.

T he Chinese cancel lat ions dragged down total visitor arrivals in the Philippines to only 4.3 million, lower than the DOT’s target of 4.6 million arrivals for 2012. This year the DOT is targeting Chinese arrivals to reach 1 million out of 10 million total visitor arrivals.

An industry source in Cebu said initial computations show losses of at least P14 million, after a local travel agency reported the cancellation of one chartered flight, which would have carried 194 Chinese

Global economy. . .

The findings show that whereas some big economies—like the United States and Japan—are marginally more volatile now than they were during the admittedly very calm “Great Moderation,” others are much less so. The net effect is a global growth pattern less bumpy than any time since 1970.

Hensley says the fact that emerging markets and developed ones now march less in lockstep than in the past helps “cancel out” some of the signals coming from individual economies. But there’s another calming factor: central banks. The US Federal Reserve, the European Central Bank and the Bank of Japan have all found themselves shifting policy in response to risks coming from abroad. From once being purely domestic inflation targeters, they’re now global risk managers.

“The mind-set is that the level of activity is so far below what they desire, so they’re more mindful of risks of all sorts,” Hensley said. “Central-bank policy has helped generate this outcome.”

Continued from A1

Meanwhile, the United Kingdom economy may be heading for its first recession since 2009, with economists slashing their forecasts in the wake of the Brexit vote and now seeing two quarters of contraction this year.

While the 0.1-percent decline in GDP anticipated in each of the third and fourth quarters is modest, it will mark the end of more than three years of unbroken growth. The projections in the Bloomberg survey compare with a 0.6-percent expansion predicted for those periods before the June 23 referendum.

The changed outlook since the UK voted to leave the European Union has the Bank of England (BOE)—which had been on a slow track toward interestrate increases—now contemplating expanding stimulus for the first time since 2012. While the impact is only showing up so far in measures of consumer and business confidence, that could ultimately spill over into key drivers of growth in the coming months, stymieing the economy.

The government [Beijing] has told some travel agents to take out the Philippines from their tour.”

—Industry source in China guests. The travel agency CYH Islands International Tourist and Travel in Mandaue City said the Chinese guests were supposed to stay three to four nights in Cebu and another three to four nights in Bohol.

“At about P5,000 per day, per guest, the losses could reach P14 million,” the source said. About 10 hotels in Cebu and Bohol were affected by the cancellations. “The reason given is the conflict between the two countries [China and the Philippines],” the source said, adding that the travel agent

has already expressed concern that more cancellations would follow. CYH is one of the biggest sources of Chinese guests for Cebu, bringing in about 10 chartered flights every month.

For his part, PHOA’s Lopez said: “One resort reported that they already lost P5 milion worth of business from China due to cancellations of charter flights.” He added, “China is apparently not extending permits to charter flights.”

For one, the Quest Hotel in Cebu City received cancellations of its Chinese guests for “about 400 room

Even with some predicted BOE stimulus, the probability of Britain sliding into its first recession since 2009 stands at 40 percent, up from 18 percent in June, according to the survey, which was conducted after the central bank’s July 14 policy announcement. That’s the highest since Bloomberg started tracking the likelihood in 2012.

“We expect to see a recession around the turn of the year, based on the idea that there will be quite a large uncertainty shock which will lead to corporate retrenchment,” said Nick Kounis, head of macroeconomic research at ABN Amro Bank NV in Amsterdam. BOE policy-makers “need to wait for a little bit of evidence, but they can’t wait until it has already happened because monetary policy works with a lag.”

0.25 percent. The central bank will also boost its quantitative-easing program, currently £375 billion ($494 billion), by £10 billion in August, according to the median estimate.

The BOE’s next policy announcement is on August 4, when the Monetary Policy Committee will also publish new growth and inflation forecasts. Officials have said sterling’s sharp drop will put upward pressure on short-term price growth, though they have differing views on the medium term, which will play a part in their debate on whether to loosen policy.

While the UK voted to quit the EU, the actual implications of that decision remain unclear, an additional uncertainty for households and companies trying to plan. Prime Minister Theresa May, who replaced David Cameron, has said repeatedly that “Brexit means Brexit,” and doesn’t intend to invoke Article 50 and kick off the formal exit negotiations before the end of this year.

Rate cut Governor Mark Carney has indicated that some easing may be required, and the majority of economists surveyed predict the BOE will respond to the slowdown with one interest-rate cut of 25 basis points before the end of the year, taking the already record-low rate to

Increase in uncertainty This lack of surety is not helping matters.

Citing its network of economic agents,

nights,” said a hotel source who requested anonymity, as he was not authorized to speak on the matter.

This is equivalent to “about a million pesos” in business losses, the source added. “We just got a letter from the travel agent partners in China for the Chengdu-Cebu charter that they are canceling.”

While no reason was given for the cancellation, the hotel source assumes that this has something to do with the July 16 ruling of the PCA rebuffing China’s historical claims over islands and atolls in the West Philippine Sea. Julie Najar, president of the Cebu Hotel Resort and Restaurant Association, said, “There have been no reports of major issues in relation to cancellation of bookings. It’s business as usual, although this may change in the months to come.”

the BOE said on Wednesday that, while it’s currently “business as usual” for most firms, around a third of contacts thought there would be “some negative impact” over the next 12 months.

Howden Joinery Group, a Londonbased maker of kitchens, said on Thursday that the referendum result means there is “clearly a heightened degree of uncertainty as to how demand in the rest of the year will pan out.” Airline EasyJet Plc. said that Brexit-related currency volatility was impacting consumer confidence.

The International Monetary Fund slashed its UK outlook on Tuesday, as well as its global forecasts, saying Brexit implies a “substantial increase in economic, political and institutional uncertainty.”

Economists in the Bloomberg survey cut their 2016 growth projection to 1.5 percent, from 1.8 percent and 2017, to 0.6 percent, from 2.1 percent.

The latter would be the weakest since 2009, when the economy last suffered a full-year contraction. Inflation is seen averaging 2.2 percent next year, just above the BOE’s 2-percent target, and up from 1.7-percent forecast in June.

Bloomberg News

In Boracay a separate industry source disclosed that his initial report showed cancellations by Chinese guests were for “287 rooms for booking dates from July 14 to August 30, 2016.” The amount of losses have yet to be calculated, he said, but Boracay, world famous for its long white beach, contributes about 35 percent to 40 percent to the national total for Chinese arrivals.

In 2015 there were 1.56 million visitors to Boracay, of which, Chinese tourists accounted for 177,296, making them the secondlargest group of nationalities, after South Koreans.

About 490,841 visitors from mainland China traveled to the Philippines in 2015, up 24.3 percent from 2014. China ranked fourth in the total number of foreign visitors to the Philippines in 2015.

TMAP. . .

Continued from A1

prejudiced the rights of taxpayers, who relied on the previous practice of waiting for an actual denial by the BIR of the claim for VAT refund before appealing to the CTA. “That is why the reinstatement of the administrative mode of claiming the refund is now our only hope, because if we go to the CTA, the court will just dismiss the case on a technicality,” Tugonon told the BusinessMirror.

He said some corporate taxpayers had tried to file their appeal before the CTA, but these appeals were dismissed on the ground that the 30-day period to appeal had already lapsed.

Tugonon said corporate taxpayers prefer the administrative mode of claiming tax refunds, because the refunds are small compared to the expenses to be incurred in litigating the case in court.

Another issue, which TMAP would take up with Dulay next week, is the wrongful imposition of taxes on income that is yet to be realized by the taxpayer.

TMAP’s former president, Rina R. Manuel, cited as an example the additional taxes imposed by the BIR on the transfer of ownership of shares of stock not listed in the stock exchange.

In another regulation issued by the BIR, the transfer of these unlisted shares of stocks take into account the appreciation of the fair market value of real properties owned by the corporation.

But TMAP explained that the increase in the value of these real properties has not yet been realized by the taxpayer, and yet, he would already have to pay the capital-gains tax due on the transfer of the unlisted shares, the fair market value of which had already increased because the appreciation in the value of the real property was taken into account.

Thus, TMAP said the regulation increases the costs for effecting a transfer of the unlisted shares, and discourages investments by foreigners through the purchase of unlisted shares.

Manuel said Henares might have been targeting some family corporations trying to avoid estate taxes by transferring real property to corporations that they ow n to avoid hav ing to pay bigger estate taxes on the transfer of these real properties through succession.

“Maybe she was wary of tax avoidance on the transfer of shares in a corporation where the only underlying assets are real properties,” Manuel said.

“But in the process of preventing this, she had also prevented legitimate investments in these corporations because of the higher tax implications.”

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Experts urge Salalima to come up with spectrum-management policy

By Lorenz S. Marasigan

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@lorenzmarasigan

he “necessary and long overdue” full spectrum audit that the new communications chief recently proposed is just a small step toward the industry’s goal of improving digital wireless services in the Philippines.

Mary Grace Mirandilla-Santos, an independent researcher on information and communications technology and telecommunications policies, said in reviewing the frequency usage of each telco, the government must layout a transparent and definite plan hinged on a crystal-clear goal.

“A full-spectrum audit is necessary and long overdue. But this audit should be anchored on a clear objective, must have timeframe and deadline, and concrete followthrough actions,” she told the BusinessMirror.

Such an audit was proposed

by Department of Information and Communications Technology (DICT) Secretary Rodolfo A. Salalima, who said his agency will not hesitate to sequester unused radio frequencies and distribute them to telco players, as demand for Internet is on a steady increase.

Spectrum is the real estate on which telecommunication operators develop their respective network to deliver services to customers. The amount of spectrum assigned to a telco has an impact on the cost to build capacity, overall network performance, ability to offer new multimedia services and general customer experience of wireless services.

But more than just evaluating

spectrum usage, the state must also implement a management policy that will specify the method by which the government implements the re-farming scheme.

“More important, I think the DICT should issue a spectrum-management policy that will determine how the state plans to allocate and reallocate spectrum, the value of spectrum and plan for future use,” Santos said.

She pointed out that efficient use of spectrum should not be made synonymous to the big telcos.

“If we want effective competition in the sector, the government should reserve a useful chunk of spectrum bands for new and emerging market players. Finally, this audit would hopefully be the start of more transparency in the spectrum-allocation process,” she said.

The policy researcher added that subscribers are entitled to transparency in the sector, given the magnitude of the ever-expanding digital economy.

“The public deserves to know how the government manages these valuable state assets, not only as consumers of telecoms services, but also as taxpayers and citizens,” Santos said.

Give light to spectrum issues

Winthrop YU, who chairs the Internet Society of the Philippines,

said evaluating the usage of frequencies will bring to light issues pertaining to spectrum.

“We laud Salalima’s instructions to conduct an audit of spectrum allocations, which will help bring much-needed transparency and clarity to the spectrum issues being raised in relation to last-mile delivery of quality, affordable Internet,” he told the BusinessMirror.

One of the biggest issues in the industry today is the coacquisition of Globe Telecom Inc. and PLDT Inc. of the telco business of San Miguel Corp.

The transaction freed up the coveted 700-megahertz (MHz) frequency band, which, according to the players, is the key to improve the current state of the Internet in the Philippines. It, likewise, gave the two players additional frequencies across all bands.

Before the acquisition of the telco business of San Miguel, which used to hold 345 MHz across different bands, PLDT Inc. held 290 MHz, while Globe had 210 MHz. After the transaction, the pair returned 20 MHz of the 700-Mhz band, 15 MHz of the 2500 to 2700MHz band, 40 MHz of the 3400 to 3500-MHz band and 10 MHz of the 800-MHz band to the National Telecommunications Commission to ensure that “a third player can still operate” in the near future.

The remainder was divided equally, giving PLDT 420 MHz in total spectrum holdings, and Globe, 340 MHz. The Philippine Competition Commission will review the deal.

The two telco giants opposed such an action, even to the point of suing the regulator, saying that the deal is perfectly legal based on existing rules during the transaction period.

Gift, holiday décor industries see 20% export hike in 5 yrs

By Catherine N. Pillas c_pillas29

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he gift & houseware and holiday décor industries—all dominated by micro, small and medium enterprises (MSMEs)— should see their exports grow by 20 percent in the next five years, given the numerous interventions being implemented by the government to boost their operations.

The 20-percent growth forecast was the consensus reached by the government, industry players and academe for these industries when they met at the Department of Trade and Industry’s (DTI) launch of the gift & houseware and holiday décor industries road map on Thursday.

Trade Assistant Secretary for Industry Development Rafaelita M. Aldaba said these export-oriented industries have the potential to grow by 20 percent in the first five years of the road map’s implementation, as they begin to innovate and grapple with the industry’s hurdles.

“All the more the support should be there to ensure the industry grows faster. I think we’ll double [the growth forecast] to 20 percent; that’s doable,” Aldaba said.

“It’ll be a gradual rise, perhaps 5 percent in the first year, then higher from there. The growth of the global market is double digit. If you target single digit, you’ll have negative market share if you aim low,” added Delfin Hosillos Bibat, a foreign-trade resource speaker at the event.

According to Nova Z. Navo, University of the Philippines Institute

$93M

The combined export receipts of the gift & houseware and holiday décor industries in 2014 for Small-Scale Industries Research Division head, who crafted the road map, Philippine exports of these goods currently only account for 1 percent to 3 percent of United States and Japan’s total imports.

Although there has been a marked increase in the country’s exports to these two major markets from 2010 to 2014, other Asean countries continue to dwarf the Philippines’s shipments in these industries.

Thailand, in 2013, exported $54.49 million worth of holiday decors, while the Philippines, in the same year, only shipped about $50.86 million.

For giftware, Thailand exported $118.5 million in 2014, several times higher than the Philippines’s exports of $23 million in that year.

Houseware, on the other hand, is dominated by Vietnam, with export receipts at $367 million in 2014, almost 20 times as large as the Philippines’s exports of $19 million of the same goods in that year.

These industries employ about 690,000 to over a million Filipino workers.

Among the recommendations put forward in the road map are better product-pricing advisory services,

tax-free importation of commonly imported products of the industry and lower income tax for MSMEs in the sector. These will offset the higher production cost in the country.

The share of gifts & houseware and holiday decor industries currently takes up only 0.59 percent of total Philippine exports.

Thursday’s road map launch is part of DTI’s Industry Road Mapping Project. Started in 2012, the program calls on the government, industry players and the academe to come up with growth targets and objectives for a particular industry.

A n i ndu st r y road m ap de tails a sector’s current situation and outlines the various interventions it needs to be globally competitive.

The industry road maps also serve as basis for effecting policies and implementing programs that support the development and growth of industries, including government funding to support its key initiatives.

In 2015 the government allocated P239 billion to implement agency-wide programs and projects indentified in manufacturing-related industry road maps under the Manufacturing Resurgence Program.

The DTI allocated a budget of P89.5 million for the implementation of its Industry Development Program (IDP).

The DTI’s broader IDP includes subprograms, like the Comprehensive Automotive Resurgence Program, Die and Mould Training Program and localization and implementation of the rubber road map, among others.

Arroyo finally released

In this February 23, 2012, file photo, former President and now Pampanga Rep. Gloria Macapagal-Arroyo arrives at a Pasay City Court for her arraignment on electoral fraud charges in Manila. The Supreme Court (SC) has dismissed the plunder charge against Arroyo, ordering her immediate release from nearly five years of hospital detention. SC Spokesman Theodore Te said on Tuesday, the 15 justices voted 11-4, granting Arroyo’s petition seeking the dismissal of the remaining plunder case against her before an antigraft court for lack of evidence. The case is about the alleged misuse of P366 million ($7.8 million) of Philippine Charity Sweepstakes Office fund. AP Photo/Bullit Marquez, File

By Jovee Marie N. dela Cruz @joveemarie

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OURS after the Supreme Court (SC) released its decision dismissing the plunder case against former President Gloria Macapagal-Arroyo, the Sandiganbayan’s First Division on Thursday issued a resolution ordering her immediate release from hospital arrest at the Veterans Memorial Medical Center (VMMC) in Quezon City.

The Sandiganbayan’s resolution reiterated the SC’s ruling dismissing the plunder case against Arroyo. Arroyo’s plunder case has been pending before the Sandiganbayan since 2012.

On Tuesday the Supreme Court dismissed the remaining plunder case filed against Arroyo, paving the way for her release from detention.

Arroyo was detained since 2012 at the VMMC following the filing of the plunder case, which stemmed from alleged misuse of P366-million intelligence funds of the Philippine Charity Sweepstakes Office (PCSO).

“Accused Gloria Macapagal-Arroyo and [her coaccused and former PCSO Budget and Accounts Manager] Benigno Aguas are hereby ordered released from the detention immediately, unless they are being held in custody for other reasons not related to this case,” the anti-graft court said.

Aguas was detained at the Philippine National Police (PNP) Custodial Center in Camp Rafael Crame in Quezon City.

Following her acquittal from plunder charges, Arroyo has thanked the Duterte administration for allowing due process to take its course “totally unhampered.”

“It is my fervent hope that nobody else will suffer the persecution that had been levied on me through selfserving interpretation and implementation of the law. And that the disregard of truth for which I was made to suffer be dealt with accordingly at the soonest possible time,” Arroyo added in a statement.

Arroyo also expressed her heartfelt gratitude to the SC for finally stopping “the persecution [I] had unjustly gone through for the last five years.”

In a 50-page decision written by Associate Justice Lucas Bersamin and concurred in by 10 other justices, the Court agreed with Arroyo

and her coaccused Aguas that the Sandiganbayan committed grave abuse of discretion when it denied their respective petitions for demurrer to evidence seeking the dismissal of the P366-million plunder case filed against them for alleged misuse of the PCSO intelligence funds.

The Court held that the prosecution failed to prove that there was conspiracy between Arroyo and other persons implicated in the case and there was also no proof of amassing of ill-gotten wealth of at least P50 million against Arroyo and Aguas, which is corpus delicti of plunder.

It held that Arroyo merely affixed her “OK” on the request for the additional confidential intelligence funds (CIF) by her fellow accused, then PCSO General Manager Rosario Uriarte, who is still at large.

“There was also no evidence, testimonial or otherwise, presented by the prosecution showing even the remotest possibility that the CIFs of the PCSO had been diverted to either GMA or Aguas, or Uriarte,” the ruling stated.

The SC held such evidence of the prosecution was insufficient to prove that petitioner Arroyo had conspired to commit plunder because the affixing of “OK” could not be considered an “overt act” for purposes of plunder.

“The insistence of the prosecution is unwarranted. GMA’s approval of Uriarte’s requests for additional CIFs did not make her part of any design to raid the public treasury as the means to amass, accumulate and acquire ill-gotten wealth,” the SC explained.

“Absent the specific allegation in the information to that effect, and competent proof thereon, GMA’s approval of Uriarte’s requests, even if unqualified, could not make her part of any criminal conspiracy to commit plunder or any other crime considering that her approval was not by any means irregular or illegal,” it added.

Arroyo and several others have been accused by the Ombudsman of diverting PCSO operating funds to its CIF that could be accessed and withdrawn anytime with minimal restrictions, and transferring the proceeds drawn from the said fund for themselves, in the guise of fictitious expenditures. The SC also

noted that it was apparent that the prosecution was relying on the doctrine of command responsibility to allege that Arroyo conspired with the accused to amass ill-gotten wealth.

However, the Court said such reliance “is misplaced,” “legally unacceptable,” and “incomprehensible.”

“But, this case involves neither a probe of GMA’s actions as the commander in chief of the Armed Forces of the Philippines, nor of a humanrights issue. As such, it is legally improper to impute the actions of Uriarte to GMA, in the absence of any conspiracy between them,” the SC added.

However, in her dissenting opinion, Chief Justice Maria Lourdes A. Sereno insisted that the prosecution managed to establish conspiracy among the accused.

“To my mind, the prosecution has successfully established the conspiracy scheme through the various irregularities in the CIF disbursement. These irregularities or red flags clearly spell a conspiracy to commit plunder when the amounts involved and the processes of requesting, approval and liquidating the amounts are holistically considered,” Sereno added.

The Chief Justice noted that the testimony of prosecution witness Aleta Tolentino had disclosed that there were several irregularities in the CIF requests and disbursements, which should have provided red flags.

The conspiracy, according to Sereno, was shown through her repeated approvals of Arroyo of addition CIF requests in the course of three years.

Associate Justice Marvic M.V.F. Leonen also dissented from the majority saying that Arroyo was a highly intelligent president who knew what she was doing.

“She knew that it was her duty to scrutinize if repeated requests for increases in these funds especially in ever-increasing amounts in the millions of pesos were done regularly and for legitimate ends,” Leonen said.

Justice Leonen also said the majority decision is premature considering that what was raised in the petition was the denial by the Sandiganbyan of the demurrer to the evidence and not a judgment by the anti-graft court after considering the evidence from both sides. With Joel San Juan

AseanFriday BusinessMirror

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Vietnam prime minister warns economy may miss growth target

A

crippling drought in Vietnam will probably cause the government to miss its 6.7-percent growth target this year, adding to pressure on new Prime Minister Nguyen Xuan Phuc as he seeks to reassure investors of his economic reforms.

The economy will need to expand 7.6 percent in the second half of the year to achieve its full-year goal, Phuc said in a prepared speech he is due to deliver to lawmakers in Hanoi next week and obtained by Bloomberg News. The target “will be hard to reach,” he said.

Phuc took office in Communist Party-ruled Vietnam in April amid the worst drought in 30 years and falling oil revenue. That’s putting the brakes on an economy that’s otherwise benefited from a booming export industry as companies, such as Samsung Electronics Co., opened factories to build and ship smartphones.

Growth was little changed at 5.6 percent in the second quarter, official data shows. Rising food prices are pushing up inflation, which may exceed the government’s 5-percent target this year, Phuc said in the speech. Exports may decline in some European markets after expanding at a slower pace of 5.9 percent in the first half of the year, according to the speech.

“There is still some chance” for the economy to reach its growth target this year if government ministries and provinces redouble efforts to boost output in industries from agriculture to manufacturing and construction, Phuc said in the speech. The World Bank on Tuesday revised its growth forecast for this year down to 6 percent from 6.2 percent because of the contraction in agriculture. Despite that, the “situation is certainly not gloomy,” given lower growth rates worldwide, Achim Fock,

acting country director for the bank in Vietnam, told reporters.

The prime minister’s warning is a signal that Vietnam won’t repeat past mistakes of growth at all costs that led to inflation soaring to 23 percent in 2011, said Trinh Nguyen, a senior economist for emerging Asia at Natixis SA in Hong Kong.

“He accepts the impact of adverse weather events and subdued global demand for not achieving growth targets,” she said. “This means that at least Vietnam is not returning to its fast growth at all costs approach, which caused inflation to spike massively, the currency to weaken, sharp economic slowdown and inefficient allocation of resources.”

Target range

The government will intensify measures to help businesses, including steps to spur domestic demand, tourism and industries that provide inputs to manufacturers, according to the speech.

Policy-makers will also closely monitor the fallout from the United Kingdom’s vote to leave the European Union, and make timely changes to monetary policy to limit the negative impact on Vietnam’s money market, it said.

Authorities should adopt a target range for economic growth, rather than focus on a single number, giving them more flexibility, said Thien Dinh Tran, a member of the government’s advisory panel for financial and monetary policy.

“Mentioning the possibility that GDP growth may not reach 6.7 percent in the prime minister’s speech suggested that the government will probably revise down the target later and it should,” Thien, who heads the Vietnam Academy of Social Sciences, said in an interview in Hanoi. Bloomberg News

Editor: Max V. de Leon • Friday, July 22, 2016 A5

Malaysia pledges to cooperate as US hunts 1MDB assets

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alaysia’s government said it will cooperate with lawful investigations of local companies or its citizens, as US prosecutors seek to seize $1 billion in assets they say are linked to a fraud trail leading from a Malaysia state fund.

“As the prime minister has always maintained, if any wrongdoing is proven, the law will be enforced without exception,” Tengku Sariffuddin, press secretary to premier Najib Razak, said in an e-mailed statement on Thursday.

1Malaysia Development Bhd. (1MDB) has been the focus of multiple probes in Malaysia, and a comprehensive review by the country’s attorney general found no crime was committed, Najib’s office said in the statement. 1MDB remains the subject of an investigation by Malaysian police, it said.

More than $3.5 billion was misappropriated from the fund, and about $1 billion was laundered through the US banking system, the US Justice Department said, laying out its case in a dozen filings on Wednesday. The alleged scheme of international money laundering

and misappropriation stretched from 2009 to 2015, it said.

The US complaint mentioned Najib’s stepson, Riza Aziz, and a Malaysian financier, Low Taek Jho, who is known as Jho Low. Riza partly owns Red Granite Pictures, a Hollywood production company that backed The Wolf of Wall Street.

The US move lays the groundwork for tension with Malaysia, a longtime ally on issues including counterterrorism and trade. Malaysia is a member of the US-led Trans-Pacific Partnership trade pact. US President Barack Obama and Najib have met several times and have played golf together.

Gambling, art

Urging caution

The civil suit seeking the seizure of the assets says some funds were used for the personal benefit of Malaysian public officials and their relatives and associates. Money went to buy luxury real estate in the US, pay gambling expenses in Las Vegas and acquire $200 million in artwork, prosecutors said.

1MDB is at the center of several international investigations into alleged corruption and money laundering by public officials.

Prosecutors in at least four countries—Singapore, Switzerland, Luxembourg and the US—are looking into money flows from the investment vehicle, which was established for nationa l development.

Malaysia Communications Minister Salleh Said Keruak urged caution on any claims related to 1MDB. The fund has been the subject of unprecedented politically motivated attacks aimed at unseating Najib, Salleh said on Thursday in a statement via state news agency Bernama.

“Any claims relating to 1MDB must be treated with caution, follow due legal process and adhere to the principle of ‘innocent until proven guilty,’” he said. “No one should rush to judgment before allegations are proven in court.”

US prosecutors refer to a top Malaysian official who controlled accounts that received hundreds of millions of dollars. The official

isn’t accused of wrongdoing. The anonymous description lines up with that of Najib, who until a few months ago served as the chairman of 1MDB’s advisory board.

Najib has previously acknowledged receiving almost $700 million in his personal bank accounts before the 2013 general election.

He said the money was a personal donation from the Saudi Arabian royal family and most of the money was later returned. He was cleared by the attorney general of any graft over the case.

“Unfortunately and tragically, a number of corrupt officials treated this public trust as a personal bank account,” Attorney General Loretta Lynch said at a briefing in Washington. The civil action and asset seizures represent the “largest single action ever brought” by the Justice Department’s six-year-old Kleptocracy Asset Recovery Initiative, she said. Lynch declined to comment on the identity of the unnamed top Malaysian official.

1MDB said in a statement it will cooperate with investigators and had not been contacted by the Justice Department. It said it “is not a party to the civil suit, does not have any assets in the United States of America, nor has it benefited from the various transactions described in the civil suit.” Bloomberg News

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A BusinessMirror Special Feature

Friday, July 22, 2016

www.businessmirror.com.ph

FILIPINO GLOBAL BRANDS SHINE AT FRANCHISE ASIA PHILIPPINES 2016

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S more Filipino brands go global, the Philippine Franchise Association showcases in today’s expo several homegrown brands that are making international headway.

Set on July 22 to 24 at the SMX Convention Center in Pasay City, the International Expo of Franchise Asia Philippines 2016 features more than 500 brands from the Philippines and across the globe. “Our show will be a one-stop shop of franchise investments whether you are an aspiring entrepreneur or an accomplished investor,” declared Richard Sanz, Franchise Asia Philippines 2016 Overall Chair. To illustrate the wide-range of investment opportunities in the said show, he said that there will be exhibitors from several countries across Asia-Pacific as well as homegrown franchise brands.

The homegrown concepts include established brands, emerging concepts, franchise brands from the

regions and Philippine franchise brands which are already operating in international markets or are ready to go international.

“Filipino global franchise brands are a testament of the potential of the Philippines to be a producer of world-class brands,” Expo Chair Sherill Quintana remarked.

Among the Filipino global brands that will be joining this year’s expo are the brands of Max’s Group Inc., whose brands’ overseas expansion are making headlines recently. These include Max’s Restaurant opening in Qatar, Yellow Cab in United Arab Emirates and soon in China, and the inking a deal of opening five Pancake House restaurants in Qatar.

Quintana added, “We are en-

couraging Philippine franchises to explore overseas expansion opportunities because we believe franchising can be a major sector in our export industry. Furthermore, franchising can help upgrade our exports because when you export a franchise you export a brand – a Filipino brand." Quintana is CEO of Oryspa, a homegrown brand offering rice bran-based spa products, which is aggressively looking for overseas expansion opportunities.

Also joining Franchise Asia Philippines Expo 2016 are Goldilocks, which has more than a dozen stores in US and Canada; Bibingkinitan, which recently opened in Dubai; Potato Corner, which is present not only in Asian markets like Indonesia but is also doing exceptionally well in the US, the birthplace of French fries; Oryspa, which started franchising in 2011 but already has stores in Singapore; Figaro, whose growing global foot-

print include the Middle East and Oceania; and many more.

To help match potential franchisees with the right franchise investment for them, PFA also organized seminars and business matching sessions during the expo dates.

Entrance to the expo is free for those who will register online at http://franchiseasiaphl2016.com.ph.

With the theme "Building Inclusive Growth Amidst a Hypercompetitive World", Franchise Asia

Philippines 2016 - Asia's biggest 4 in 1 franchise show is a week-long event organized by the Philippine Franchise Association (PFA). It is the country’s centerpiece capacity-building event for the Philippine franchise sector as well as the organization’s principal activity to promote franchising as a tool to create businesses and generate jobs. It averages about 1,000 conference delegates and 45,000 expo visitors every year.

Franchise Asia Philippines 2016 is co-presented by BPI Ka-Negosyo and PLDT Smart SME Nation, and in partnership with the Department of Trade and Industry, the Philippine Chamber of Commerce and Industry (PCCI), the Philippine Retailers Association (PRA) and Go Negosyo. For inquiries, contact the PFA Secretariat at +63 2 687 0365 to 67 or email pfa@pfa.org.ph.

INTERNATIONAL FRANCHISE EXPO

Opens today

MESSAGES

O

UR warmest greetings to the Philippine Franchise Association (PFA) as it organizes Franchise Asia Philippines 2016. Nation building requires full support and cooperation of every sector in society and we are pleased to know that the Philippine franchising sector is doing its part to make our beloved country a nation of opportunities.

We thank the PFA for its commitment to promote franchising as a tool to create businesses and generate jobs through its many activities foremost of which is the holding of Franchise Asia Philippines 2016.

We all dream of a nation where nobody is left behind and everyone has access to a better life. Let us realize this dream by working together so that we can make our beloved country a nation of fulfi lled dreams.

Be assured of our support as we move our country forward towards economic growth and shared prosperity.

Mabuhay tayong lahat!

MARIA LEONOR GERONA ROBREDO Vice-President Republic of the Philippines

HON. RAMON LOPEZ

O

N behalf of the Board of Trustees and Officers of the Philippine Franchise Association (PFA), it is our pleasure and privilege to welcome everyone to Franchise Asia Philippines 2016!

In this time of new beginnings and renewed optimism, we are pleased to present PFA’s flagship capacity-building activity for the Philippine franchising sector as it presents new learnings and new opportunities for growth for all players in the industry. With the momentum of history on our side, we can look forward to greater things ahead for Philippine franchising.

As we look to a positive future with eager anticipation, let us also bear in mind the noble role of franchising as an instrument for enterprise creation and job generation. But while hopeful of the prospects coming our way, it is also wise to be cognizant of the challenges that go with these opportunities.

Hence our theme “Building Inclusive Growth Amidst a Hypercompetitive World” which underscores PFA’s two main advocacies – namely, to promote franchising as a powerful tool for economic development and nation-building and to raise the global competitiveness of Philippine franchising so that it can be an effective agent for greater economic inclusion. As we continue to seek for disruptive strategies and gamechanging ideas, which will bring Philippine franchising to new horizons, we are certain that the sector will continue to be a key player in the economic and social development of the Filipino nation.

May Franchise Asia Philippines 2016 be an impetus in making the Philippines a nation of opportunities!

FRANKLIN GO Chairman

O

UR warmest congratulations to the Philippine Franchise Association (PFA) as it holds the 24th edition of Franchise Asia Philippines 2016!

The Department of Trade and Industry (DTI) recognizes the role of franchising in creating enterprises and generating jobs, which are crucial to the current administration’s thrust to achieve inclusive development.

The DTI is committed to work for an enabling environment especially for Philippine MSMEs so that we improve their capacities and allow them to play a vital role in the economy.

We believe that given the right support, Philippine MSMEs have the potential to make it big not only locally but internationally as well. Your event, Franchise Asia Philippines 2016, is a powerful tool in empowering MSMEs. We note your incubation center and emerging concepts area, which have opened opportunities for countless of MSMEs through the years. Likewise, as the biggest franchise event in Asia, Franchise Asia Philippines 2016 has also opened international partnership opportunities for many Philippine franchise brands in the same way that it has promoted the Philippines as an investment destination for foreign franchises.

With the new government committed to maintain the momentum of our accelerating economy, we can look forward to greater things ahead. Rest assured that DTI will continue to initiate and implement programs and advocacies that will further stimulate the growth of MSMEs as well as the internationalization of Philippine franchise brands.

May Franchise Asia Philippines 2016 help in achieving these objectives!

Mabuhay tayong lahat!

Secretary Department of Trade and Industry

O

N warmest greetings to the conference delegates, exhibitors and trade visitors of Franchise Asia Philippines 2016! The Philippine economy has been in acceleration mode for several years now. And with the commitment of the new administration to sustain the momentum of our growing economy, we can look forward to more opportunities as well as heightened competition.

But ever since the founding of the Philippine Franchise Association (PFA), we have always made global competitiveness a key priority for the sector. The holding of our annual show, Franchise Asia Philippines, is a testament to our passion and resolve to raise the global competitiveness of Philippine franchising. Now on its 24th edition, Franchise Asia Philippines 2016 continues the tradition of building the capacities and opening opportunities for all players in the Philippine franchising sector.

We are pleased to note that franchising – through Franchise Asia Philippines and the other programs of PFA – has indeed revolutionized the retail industry, empowered MSMEs, opened opportunities for aspiring entrepreneurs and provided consumers with quality products and services. And for many intrepid Philippine brands, franchising has shown itself to be an effective tool in realizing their global aspirations.

So as we hold this year’s show, let us make full use of its capacity to unleash the full potentials of our respective companies and the entire franchising sector. Let us continue to work together to bring Philippine franchising to new horizons.

ALAN ESCALONA, MD, CFE President

ROBERT TROTA, CFE Vice Chairman

O

RICHARD SANZ

Overall Chair Franchise Asia Philippines 2016

VICENTE GREGORIO Conference Chair

SHERILL QUINTANA Expo Chair

BING SIBAL-LIMJOCO, CFE Vice Chairman

N behalf of the Philippine Franchise Association and the Organizing Committee, we welcome you to the Franchise Asia Philippines 2016.

As the Philippine brands become more global and with the vibrant outlook on our economy, we will celebrate this year’s Franchise Asia with the theme Building Inclusive Growth amidst a Hypercompetitive World. For its 24th edition, Franchise Asia Philippines 2016 kicks off with the Certified Franchise Executive (CFE) Program, which PFA has been holding since 2001 to professionalize the Philippine franchise sector and make it at par with the best in the world.

Closely intertwined with the Association’s goal to raise the global competitiveness of the sector, our International Conference will feature over 50 local and international industry experts who will share insights on how to survive today’s “disrupt or be disrupted” world. Take this opportunity to network with your fellow delegates and have an insightful exchange of ideas.

The 3-day International Franchise Expo, meanwhile, showcases more than 500 local and foreign brands – from up-and-coming concepts to established franchise brands. We are also pleased to note the strong participation of MSME franchises and regional concepts, which underscores PFA’s commitment MSME development. Noteworthy also is the presence of hundreds of international franchise brands, which highlights the rising position of the Philippines as the franchise hub of Asia.

May we all have an enriching Franchise Asia Philippines 2016!

A8

Friday, July 22, 2016

The World BusinessMirror

news@businessmirror.com.ph

Turkey declares 3-mo state of emergency

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NKARA, Turkey—Turkey’s president on Wednesday declared a three-month state of emergency following a botched coup attempt, declaring he would rid the military of the “virus” of subversion and giving the government sweeping powers to expand a crackdown that has already included mass arrests and the closure of hundreds of schools.

President Recep Tayyip Erdogan, who was accused of autocratic conduct before the insurrection, said the measure would counter threats to Turkish democracy.

Possibly anticipating investor jitters, Erdogan criticized Standard & Poor’s for downgrading its credit rating for Turkey deeper into “junk” status and said the country would remain financially disciplined.

The president did not announce details, but the security measure could facilitate longer detentions for many of the nearly 10,000 people who have been rounded up, since loyalist security forces and protesters quashed the rebellion, which started on Friday night and was over by Saturday.

“This measure is in no way against democracy, the law and freedoms,” Erdogan said in a national televised address after a meeting with Cabinet ministers and security advisers.

The state-of-emergency announcement needs to be published in a state gazette and lawmakers have to approve it for it to take ef-

10,000

A man (right) uses an ATM in central Istanbul on Wednesday.

Turkey’s central bank has cut a key interest rate to help shore up the economy, days after an attempted coup. Turkish stocks are way down from precoup levels, as is the Turkish lira. AP/Petros Giannakouris

fect, according to analysts.

Turkey imposed emergency rule in the southeast of Turkey in 1987, allowing officials to set curfews, issue search and arrest warrants, and restrict gatherings, as the security forces fought Kurdish rebels. The emergency rule was gradually lifted by 2002.

The president suggested military purges would continue.

“As the commander in chief, I will also attend to it so that all the viruses within the armed forces will be cleansed,” Erdogan said.

In an apparent attempt to calm fears that the military’s powers will be increased, the president said the military will be under the government-appointed governors’ command and work closely with the

regional governors.

The progovernment death toll in the botched coup was 246. At least 24 coup plotters were also killed.

Turkey also said it would close more than 600 private schools and dormitories following the attempted coup, spurring fears that the state’s move against perceived enemies is undermining key institutions in the country.

The Erdogan administration said it has fired nearly 22,000 education ministry workers, mostly teachers, taken steps to revoke the licenses of 21,000 other teachers at private schools and sacked or detained halfa-dozen university presidents in a campaign to root out alleged supporters of a US-based Muslim cleric blamed for the failed insurrection.

The targeting of education ties in with Erdogan’s belief that the

The number of people who have been rounded up

As he withholds endorsement of Trump

cleric, Fethullah Gulen, whose followers run a network of schools worldwide, seeks to infiltrate the Turkish education system and other institutions, in order to bend the country to his will. The cleric’s movement, which espouses moderation and multifaith harmony, says it is a scapegoat.

While Erdogan is seeking to consolidate the power of his elected government after the rebellion, his crackdown could further polarize a country that once enjoyed a reputation for relative stability in the turbulent Middle East region. It also raises questions about the effectiveness of the military, courts and other institutions being purged.

“The fact that so many judges have been detained, never mind the workload at the courthouses, will render them inoperable,” said

Vildan Yirmibesoglu, a humanrights lawyer.

The education ministry said it decided to close 626 private schools and other establishments under investigation for “crimes against the constitutional order and the running of that order,” the state-run Anadolu news agency reported.

The agency said the schools are linked to Gulen, a former ally of Erdogan who lives in Pennsylvania and has denied accusations that he engineered the coup attempt.

Turkey has demanded Gulen’s extradition from the United States.

US Secretary of State John F. Kerry says Turkey must provide hard evidence that Gulen was behind the foiled coup, and that mere allegations of wrongdoing wouldn’t suffice.

HK teen protest leader guilty of unlawful assembly

Cruz booed at GOP convention H C LEVELAND—Donald Trump, installed as the new leader of the Grand Old Party (GOP), received grudging tribute on Wednesday night from a series of vanquished foes, while his running mate used the third installment of the Republican National Convention to step for the first time on the national stage.

The getting-to-know-you speech by Indiana Gov. Mike Pence, who joined the ticket just five days ago, was to cap off the prime-time program.

But some of Trump’s most bitter foes provided the emotional heart of the evening. Sen. Ted Cruz—or “Lyin’ Ted,” as Trump branded him during their caustic primary fight—took the convention stage to a thunderous ovation and a cowboyhat-waving salute from his fellow Texans, as he called for the defeat of Democrat Hillary Clinton—and pointedly withheld an endorsement of Trump.

“Citizens are furious, rightly furious, at a political establishment that cynically breaks its promises and ignores the will of the people,” he said, acknowledging Trump’s political-outsider appeal. “We have to do better. We owe our fallen heroes more than that.”

But the mood turned against Cruz at the speech’s climax, when it was clear he was not only withholding his endorsement, but also leaving room for voters to abstain from backing the party nominee.

“To those listening, please, don’t stay

home in November,” Cruz said. He paused dramatically, which elicited loud boos.

“If you love our country and if you love your children as much as I know you do, stand and speak and vote your conscience,” he said. “Vote for candidates up and down the ticket who you trust to defend our freedom and to be faithful to the Constitution.”

Delegates chanted at him to endorse Trump, and the phrase “vote your conscience,” a rallying cry for the antiTrump movement, appeared to infuriate the crowd.

Once again, the party’s deep fractures erupted at its showcase event, a week when GOP leaders aimed to bind the wounds left by a long and divisive nominating fight.

Preceding Cruz was Florida Sen. Marco Rubio—whom Trump disparaged as “Little Marco,” when they fought for the nomination—who opted against making his concession in person.

Appearing in a brief recorded message played on a giant screen above the stage, Rubio referred to his fight against Trump with a wan smile. “After a long and spirited primary, the time for fighting is over,” Rubio said. “It’s time to come together. It’s time to win in November.”

A third former rival, Wisconsin Gov. Scott Walker, scarcely mentioned the nominee in his speech, and his stiff body language suggested a lack of enthusiasm.

Instead, Walker articulated his own

small-government vision of conservatism, growing the most animated when he recounted his battles with labor unions at home and warned of the perils of a Clinton presidency.

“Let me be clear: A vote for anyone other than Donald Trump in November is a vote for Hillary Clinton,” Walker said.

Like Cruz, he warned the discontented against sitting out the November election.

“We can’t wait four years to get ’em next time. The consequences are too great.”

Continuing a convention that has been far from standard, the lineup of speakers once more crossed a broad spectrum. The night’s designated theme, “Make America First Again,” was vague enough to accommodate discussions of the economy, the military, Trump’s life story and a variety of issues.

Eileen Collins, a retired space-shuttle commander, called for a costly upgrade of the nation’s space-exploration program, something Trump has rarely, if ever, publicly discussed.

An oil and gas executive bashed Clinton’s presumed environmental plans. A woman who sells health supplements planned to champion small businesses.

The one common thread through the convention has been a scorching contempt for Clinton, the presumptive Democratic nominee, and an unrelentingly negative portrayal of the country under President Barack Obama, which continued on Wednesday. Los Angeles Times/TNS

China flooding: At least 75 dead, missing

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EIJING—At least 75 people in northern China have died or gone missing since Monday in some of the worst flooding in years, the government said on Thursday.

The figures released by the Civil Affairs Ministry come amid continuing heavy downpours that have caused havoc across usually dry regions, including the capital Beijing. Already, 576 people have been recorded as dead or missing nationwide in the first half of the year.

Beijing has been hit by constant rain since Tuesday, which has forced the cancellation of hundreds of flights and trains and flooded city streets. The rain has also threatened embankments along rivers in central China, with authorities mobilizing troops and heavy equipment to fill the gaps.

Tens of thousands have been evacuated from flood-hit areas and direct economic losses have risen into the hundreds of millions of dollars.

President Xi Jinping on Wednesday

warned the country to be prepared for more hardship to come and said officials found negligent in their duties would be severely punished.

China’s south has also been hit by floods that strike annually during the monsoon season that began in May, but this rainy season has been particularly wet. Water levels in some major rivers have exceeded those of 1998, when the worst floods in recent years killed 4,150 people, most of them along the Yangtze River, China’s mightiest. AP

The two allies cooperate in the US-led war against the Islamic State group, with American military planes flying missions from Turkey’s Incirlik air base into neighboring Iraq and Syria.

Turkey’s domestic situation is increasingly a concern as the crackdown widens. Huseyin Ozev, an education union leader in Istanbul, said state education workers who were reported to have been fired had not received notices and that employees were “waiting at home or on vacation, anxiously,” to see if they had lost their jobs.

The fight against coup plotters “should not be turned into a witch hunt,” Ozev said.

In other moves, Turkey demanded the resignations of 1,577 university deans and halted foreign assignments for state-employed academics. A total of 50,000 civil service employees have been fired in the purges, which have reached Turkey’s national intelligence service and the prime minister’s office.

The government has also revoked the press credentials of 34 journalists because of alleged ties to Gulen’s movement, Turkish media reported.

Authorities have rounded up about 9,000 people—including 115 generals, 350 officers, 4,800 other military personnel and 60 military high-school students—for alleged involvement in the coup attempt.

Turkey’s defense ministry has also sacked at least 262 military court judges and prosecutors, according to Turkish media reports.

Saban Ceylan, a taxi driver in Istanbul, said he expected his income to drop because of the state of emergency.

“Nothing is going to happen if I don’t take money home during three months,” Ceylan said. In a reference to the coup plotters, he said: “I just want this country to be rescued from those dishonorable people.” AP

ONG KONG—A Hong Kong court on Thursday found teen protest leader Joshua Wong guilty of taking part in an illegal rally that sparked massive student-led prodemocracy street protests two years ago.

The 19-year-old Wong tweeted that he “was found guilty of the charge of participating unlawful assembly by court of Hong Kong.” A magistrate handed dawn the verdict for Wong and two other young student leaders, Nathan Law and Alex Chow, following a trial earlier this year.

Chow was convicted of the same charge, while Law was found guilty of inciting others to join an illegal assembly, according to local media reports. Wong,

Teen protest leader Joshua Wong shouts slogans outside a magistrate’s court in Hong Kong on Thursday. AP/Vincent Yu

who faces up to five years in prison, said they would be sentenced on August 15.

The three were charged with storming into a courtyard dubbed Civic Square beside the Hong Kong government complex on September 26, 2014, to protest Beijing’s decision to restrict elections for the southern Chinese city’s top leader.

Huge crowds of demonstrators turned out to demand their release after they were detained by police, who responded two days later with volleys of tear gas. The move backfired, driving even more protesters to take to the streets, where they remained for 79 days to press their demands for greater democracy. AP

Child beheading in Syria triggers backlash vs rebs

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EIRUT—A US-supported Syrian rebel group said on Wednesday it would open an investigation into the beheading of a Syrian boy on spy accusations, calling it an “individual mistake” that does not represent the overall policies of the group.

The Nour el-Din al-Zinki group, a relatively moderate group that fights the Syrian government and the Islamic State (IS) group, condemned the beheading, which was captured on video and triggered an instant backlash against the group.

It is not clear who the boy was or why he was beheaded on camera. He was identified by activists on social media as Mahmoud Issa, a 12-year-old Palestinian.

The Syrian government also denounced the “repulsive crime” against an innocent child in a statement to the United Nations, saying the boy was a Palestinian from the Palestinian refugee camp of Handarat on the edge of Aleppo.

The incident allegedly occurred in Handarat, near Aleppo, on Tuesday. A young boy is seen on the back of a pickup truck, surrounded by armed men who accuse him of being a spy and a member of the Quds Brigade, a progovernment Palestinian militia. He is then beheaded with a knife by one of them.

The Quds Brigade, in a statement

posted on its Facebook page, strongly denied that Issa was a fighter, adding that the boy was ill. It said he was killed by a “terrorist” who lost his brother in battles near Handarat apparently as revenge.

Nour el-Din al-Zinki, in its statement, said it would investigate the incident and expedite punishment. It said everyone involved in the violation was arrested and are being investigated. The group, which operates mainly in Aleppo, has received support in the past from the United States.

Amnesty International said the video is the latest “abhorrent signal” that opposition groups are carrying out serious abuses with impunity.

“This horrific video showing the beheading of a boy suggests some members of armed groups have truly plumbed the depths of depravity. It is yet another gruesome example of the summary killing of captives, which amounts to a war crime,” said Philip Luther, director of Amnesty International’s Middle East and North Africa Program.

US Secretary of State John Kerry said he has seen the “appalling report” but could not confirm it happened. “Obviously we’re very concerned certainly if it’s accurate,” he said, adding that if the report is proven it would “give us pause

about any assistance or, frankly, any further involvement with this group.”

Lebanon’s Hezbollah group, whose fighters are in Syria fighting alongside President Bashar al-Assad’s forces against the rebels, also pounced on the beheading. In a statement issued in Beirut, it described the beheading as a “disgusting crime” by “so-called moderate rebels backed by the US and Saudi Arabia.”

Meanwhile, the Red Cross said a lack of access is forcing it to scale back its operations aimed at helping tens of thousands of people, mostly women and children, who need “urgent assistance” near Syria’s border with Jordan. The Geneva-based organization decried “international failure” to help refugees and others affected by war.

The International Committee for the Red Cross (ICRC) said aid agencies have faced difficultly accessing the border area, known as the “berm” for its earthen mounds, after Jordan closed the border following a car bombing last month that killed seven Jordanian soldiers near the Rukban crossing point.

ICRC Middle East Regional Director Robert Mardini said, “The crisis at the berm reflects an international failure to protect and help people affected by conflict and who are in desperate need.” AP

The World BusinessMirror

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Editor: Lyn Resurreccion • Friday, July 22, 2016

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French workers get fewer protections under new law

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ARIS—French workers lost some of their famed labor protections on Wednesday, as the government tries to keep up with the global economy by weakening union powers and giving employers more freedom to fire people and lengthen their hours.

It was a bitter victory for President François Hollande. The bill unleashed months of violent protests and tore apart his Socialist Party, and the government had to force it through Parliament without a vote. And conservative critics say it doesn’t go far enough and won’t make a difference.

At Paris’s Republique plaza, the nucleus of the protest movement, a couple dozen die-hards remained on Wednesday amid tourists, drinkers and vagrants.

A 26-year-old named Adele said their failed fight against the law was “just one of the struggles.... Now we’ve learned to lose one.”

Despite the tensions, it is a watershed moment for France. Here are some key things in the new law:

off in exchange for higher salaries.

35-hour workweek

While some worker protections were reduced in the law, one 21st-century protection was added: The law aims at helping employees apply their “right to disconnect.” Companies of more than 50 people would need to negotiate a “charter of good conduct” with union representatives.

The text would detail the hours, usually in the evening and over the weekend, when employees are not expected to be connected to their “digital tools,” from emails to smartphones and laptops. AP

The bill formally maintains the 35-hour workweek, but allows companies to organize alternative working time. Workers would be able to put in a 46-hour workweek, and up to 12-hour shifts, during a temporary period.

In cases of “exceptional circumstances,” employees could work up to 60 hours a week. The changes are aimed at allowing companies to adapt to business booms and off-peak periods. One measure allows some workers to give up days

Weaken some union powers

The most sensitive part of the reform is a measure allowing businesses not to follow industry-wide union agreements if they have their own specific company deal instead—as long as it is negotiated with union representatives. Lawmakers compromised on some aspects of this measure, but labor unions still fear companies will use it to exploit their workers.

Ease layoffs

Shedding workers is complex in France and cited as a big reason employers hesitate to hire people on long-term contracts. The bill spells out more clearly the motives allowing layoffs in businesses of less than 300 employees in case of financial difficulties—such as a drop in orders, or lower revenue for a certain number of quarters. The idea is to limit lawsuits from fired employees and create more flexibility for businesses.

Right to disconnect

May faces French challenge; Merkel presses Brexit rules German Chancellor Angela Merkel (right) shakes hands with British Prime Minister Theresa May during a military welcoming ceremony at the chancellery in Berlin on Wednesday on May’s first foreign trip after being named British Prime Minister.

AP/Michael Sohn

T

heresa May will find that François Hollande wants to talk about more than just Brexit (Britain exit from the European Union) when she travels to Paris on Thursday.

One day after German Chancellor Angela Merkel told the British prime minister she must stick to the rules for leaving the European Union (EU), Hollande will challenge May over plans to build a new nuclear-power plant in the southwest of England. He will also press her on an agreement that allows the United Kingdom to conduct passport checks on French soil, according to a French government official with knowledge of the president’s plans.

May’s meeting in Paris underlines the balancing act the prime minister faces as she seeks to build relations with key European partners while preparing for Britain’s withdrawal from the 28-nation bloc. She will focus on shared global challenges with France as she seeks to portray the UK as an outward-looking country ready to deal with the world. “The reception for May could be frostier in Paris than in Berlin,” said Carsten Nickel of Teneo Intelligence. “Hollande has every incentive to use the Brexit talks to send a message to his own eurosceptic electorate: countries even flirting with the idea of leaving the EU will be worse off.”

The French president plans to seek reassurance from May on her commitment to the Hinkley Point nuclear power station, according to the government official.

Hollande’s office considers backing for the project as both an important signal on bilateral relations and key to EDF, the French nuclear giant, to remain globally competitive. The two will also discuss the need to adapt the 17-year-old bilateral agreement that maintains the UK’s EU border in France, meaning that passengers and vehicles at Calais go through UK security and other checks on French soil before crossing the Channel.

The accord also means migrants without requisite visas are blocked from traveling to the UK and stranded in France. The prime minister’s office didn’t immediately respond to a request for comment on what would be discussed.

May’s visit to Paris comes a day after her first Prime Minister’s Questions in London, in which she showed herself ready to pour scorn on opposition leader Jeremy Corbyn. The Labour leader will launch his leadership defense on Thursday against challenger Owen Smith by announcing plans to crack down on gender pay inequality in companies and target the “five ills of 21-st century Britain.”

Brexit trigger

May had her first chance in Berlin to size up the woman who will be one of her main interlocutors as she navigates Britain’s exit from the world’s largest trading bloc. Both pastors’ daughters, she and Merkel find themselves at the center of economic and political turmoil not of their making which prompted a plunge in the pound and has sent shock waves across Europe.

“All of us will need time to prepare for these negotiations and the United Kingdom will not invoke Article 50 until our objectives are clear,” May said. “We will be taking some time to determine the principles and our objectives before we trigger that formal process of negotiation.”

Bloomberg News

In Berlin on Wednesday, Merkel ruled out preliminary talks with the UK government on exiting the EU while offering May space to decide when her government is ready to invoke the notification necessary.

The German chancellor said that EU rules stipulate a country must invoke Article 50 to start the legal process of leaving the 28-nation bloc.

“The EU treaties are very clear on this,” Merkel said at a joint news conference with May in the Chancellery during the prime minister’s first overseas visit. While the two will discuss the status of Article 50, no prenegotiations will take place “formally or informally,” she said.

Pound’s plunge

Protesters hold Turkish flags as they gather in Taksim Square in Istanbul on Sunday. The Turkish government accelerated its crackdown on alleged plotters of the failed coup against President Recep Tayyip Erdogan, with the justice minister saying on Sunday at People march, one holding poster reading “Labor law, out” during a demonstration in Paris on July 5. French unions are staging what’s likely to be their last show of force against a labor bill that has divided the nation and prompted the worst social unrest in years. The government says the bill—which makes it easier for companies to hire and fire employees and extend working hours— would boost hiring. AP/François Mori

Rich countries fail to bolster people’s well-being, report says

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ith economic growth trending downward globally, many of the world’s largest economies are not converting what growth they have left into an increase in well-being for their citizens, according to a report by the Boston Consulting Group.

The Sustainable Economic Development Assessment (Seda) ranks more than 160 countries across 10 areas, including economic stability, health, governance and environment.

It uses two measures, the first a current score taking into the most recent data and a rolling score that assesses how countries can convert economic growth into well-being over an eight-year period from 2006 to 2014.

Ethiopia is at the top of list of countries that managed to convert growth to well-being since 2006, with Norway at the top of the list for the most recent data, according to Boston Consulting.

The stark contrast between these two countries sets the trend for the two lists in some respects.

Norway is ranked sixth globally in terms of GDP per capita, and Ethiopia is ranked 169th out of 187, according to the most recent International Monetary Fund outlook.

At the top of the current score list, the similarities among the various countries are obvious and include many of the world’s wealthiest nations—Switzerland, Sweden, Luxembourg and Singapore.

There is an almost opposite result in the recent progress score,

where many emerging markets in Asia and Africa have risen to the top and the nations considered to be the wealthiest in terms of GDP are closer to the bottom.

The Boston Consulting Group also calculates what it calls the wealth-to-well-being and growthto-well-being coefficients.

Two ratios are looked at. There is one between the current Seda score and the score that would be expected given the country’s GDP per capita (wealth-to-well-being) and the one between the recent progress Seda score and the score that would be expected given the country’s GDP growth (growth-towell-being). That way it’s easy to tell what countries are above and below par, globally.

The United States’s ability to convert both wealth and growth into well-being is below par globally, while Germany manages to perform above par on both fronts.

In Western Europe countries with high current Seda scores (Austria, Denmark, Finland, Germany and the Netherlands) are making far better progress than those with low current Seda scores (Cyprus, France, Greece, Italy, Malta, Portugal, and Spain). This

is especially reflected in the labor market, where above-average unemployment rates put pressure on the economy.

China has performed well in the recent progress Seda analysis, and it continues to produce an increase in well-being in line with its strong economic growth over the last decade.

Record-low interest rates and a financial stimulus package that has struggled to gain traction could threaten the world’s second-largest economy’s place high up on the list. GDP growth of just 6.7 percent in the second quarter of this year remains the slowest growth for the country since the financial crisis.

“The G-20 finance ministers’ meeting in China this weekend is taking place amid concern about low global growth—even stagnation—so making the most of what you have is going to be crucial,” says Douglas Beal, a BCG partner and a coauthor of the report.

“Seda’s two measures that look at the conversion of wealth and growth into well-being provide a more meaningful perspective than GDP alone can offer on how well countries are doing in that regard. Changes in the relative performance of countries are making the old ‘advanced’ and ‘developing’ labels obsolete—some countries in Europe are stuck, while others around the world are making significant progress,” Beal continued.

The United Kingdom has a very strong current level score but is let down by declines in its ability to convert economic growth into improvements for its citizens.

The vote on June 23 to leave the European Union may mean that these declines may become more pronounced next year, as the IMF lowered its UK

160 The number of countries that were ranked based on their growth to their citizens’ well-being

growth forecasts to 1.3 percent from 2.2 percent based on uncertainty around Brexit.

Euro-skeptics need not rejoice quite yet, as the report found that EU policies and governance standards lead to improvements in critical areas related to an economy’s well-being.

Regulations relating to environmental requirements, human rights and governance are all part of the EU mandate, and it’s not surprising that five EU countries (Poland, Lithuania, Slovenia, Romania and Croatia) and two on the path to joining (Serbia, Bosnia-Herzegovina) have posted higher than average Seda sustainability scores.

Another link the report makes is the clear correlation between financial inclusion and well-being.

Even when accounting for income, countries with higher access to financial services are more likely to have increased Seda scores.

By using the Seda current level score, GDP per capita and the Findex basic measure of inclusion (adults with access to bank or mobile-money accounts), the Boston Consulting Group found that financial inclusion accounts for 11 percent of the differences in well-being among countries.

Bloomberg News

China’s floods won’t have impact on economic growth

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hina’s worst flooding since 1998 will weigh on third-quarter growth but the drag won’t continue into the fourth quarter, according to a Bloomberg survey of economists.

The storms will shave as much as 0.2 percentage points from this quarter’s expansion, according to almost half of economists in a Bloomberg survey. The floods won’t have any impact on growth in the final quarter, according to more than half of ana-

lysts in the July 18-to-20 poll. Agriculture will take the worst hit and construction and infrastructure may gain, they said.

Weeks of torrential rains across central and southern China are the latest challenges to growth that held steady at 6.7 percent in the second quarter from a year earlier, matching a first-quarter pace that was the slowest since 2009.

Direct economic losses from the floods are estimated to be 147 billion yuan ($22

billion), the government said last week.

“There will be a modest negative impact” with weaker output from agriculture and manufacturing in the third quarter, said Dariusz Kowalczyk, a senior economist at Credit Agricole SA in Hong Kong.

“The flooding seems very severe.”

The biggest drag in the third quarter will be from agricultural output, according to more than half of the 15 economists in the survey. Almost all said construction

and infrastructure would get the biggest lift in the fourth quarter amid rebuilding efforts. Growth will slow to 6.5 percent in the third quarter and 6.4 percent in the next two quarters, according to a separate Bloomberg survey.

With heavy floods in the Yangtze River that’s home to China’s major rice, pig and fish-farming areas, several analysts said third-quarter food inflation may rise.

Bloomberg News

A10 Friday, July 22, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Mandatory dash cams for your car?

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nyone who has spent enough time on the road—especially in Metro Manila—has probably at least encountered a minor fender bender or two. It is almost unavoidable.

If not an accident, maybe you have been apprehended for a road violation once or twice. Because human behavior is both uncontrollable and unpredictable, the causes and outcome of each incident vary.

Proving who is at fault as a result of an accident becomes difficult unless one has hard evidence and witnesses. Then you are forced to face the challenging and time-consuming police and insurance company processes unless there is hard evidence that can document your side of the story. Road mishaps and run-ins with the traffic enforcers can be a battle of “he says-she says.”

Recently, a proposal to make dash-cam installation mandatory began trending on social media and has become a pertinent topic of discussion. While the premise behind the proposal is to ease traffic flow in Metro Manila, especially during accidents, where vehicles involved could be cleared faster, there might even be better reasons for pushing this proposal.

Dashboard cameras—commonly referred to as ‘dash cams’—are small cameras mounted on a vehicle’s dashboard or front window that continuously record the scene ahead. Dash cams can range from the simple camera and recorder setup to the more elaborate that include rear and side views, GPS tracking, speedometer, infrared and low-light viewing, high-definition cameras and an event data recorder.

This is sort of like an airplane’s black box that can record events prior to and after an accident. Originally used by law enforcement in the United States to record car chases for evidence, dash cams have become widely available in the market, and car owners have used them to document traffic accidents and, in some cases, incidents of corruption and brutality among traffic enforcers and the police. A quick search on Google and YouTube will show thousands of videos uploaded by users showing various incidents and have become useful in documenting incidents for insurance claims and legal proceedings.

Currently, Russia is the largest user of dash cams, where almost every vehicle is equipped with a dash cam. With a road fatality rate of 27,025 per year in 2013 and widespread police corruption and insurance fraud, the Russian Interior Ministry passed regulations in 2009 that removed legal hurdles for car owners in installing dash cams. The proliferation of dash cams in Russia have spawned videos spread all over the Internet, where disturbing incidents of traffic accidents, fist fights between erring motorists, and corrupt police officers asking for bribes.

Entire web sites and social-media pages dedicated to such events have been set up where viewers can watch uncut versions of Russian dash-cam recordings.

Anytime the government proposes something like this that is “mandatory,” red flags should be raised. But the idea of requiring dash cams could actually serve and be for the public good. A proposal to require public-utility vehicles, including jeepneys, taxis and busses, sounds good but seems discriminatory.

We should explore this idea of mandatory dash cams for every road vehicle. It might be a wise idea.

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SK rebranded James Jimenez

spox

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fter three days of voter registration, the National Capital Region (NCR) office of the Commission on Elections reported less than 14,000 under-18 registrants for the Sangguniang Kabataan (SK) elections, and only a little over 16,000 individuals 18 and above filed applications for new registration. With the exception of Region 4, the rest of the country didn’t stray far from the NCR’s numbers.

Considering the acrimony leveled at the commission when voter registration ended last year—after more than a year of near-daily registration—it seemed a foregone conclusion that registration levels this time around would be through the roof. Instead, we’re seeing a low turnout, and it’s more than a little disappointing—especially where the youth are concerned.

Ironic too, considering the effort being devoted to promoting partici-

pation in the new SK. Earlier this week, the National Youth Commission (NYC) web site announced an SK logo change, explaining: “To completely advocate for the changes in the reformed Sangguniang Kabataan, the NYC approved Policy Resolution 4, adopting a new logo design for the SK that exudes freshness, rebirth and youthfulness.

“The new SK logo was not just designed to be aesthetically appealing, but more so with a deeper

sense. In the new SK logo, the positioning of the letters ‘S’ and ‘K’ is tilted exactly 10 degrees, which denotes the 10 key positions in SK, namely, one elected chairman, seven elected SK kagawad, one appointed secretary and appointed treasurer per barangay.

“The letters rise to the right to signify a youth council, which is more ready to step up and seize the opportunity to lead and be heard.

The letters also [go] beyond the circle, which denotes the call for Filipino leadership identity, which mandates the SK officials to be the persons in authority leading efforts on nation-building and empowerment.

“The soft and shallow curved lines of ‘S’ and ‘K’ depict youthfulness, familiarity and sense of relaxation that summarizes the flexibility of the new generation of Filipino youth leaders. Also, the colors were patterned on the colors of the Philippine Flag by virtue Republic Act 8491, or commonly known as the Flag and Heraldic Code of the Philippines.”

“This new SK logo signifies not

just the rebranded SK but also the government’s commitment to revitalize the SK and to achieve the transformation for better governance and a new brand of leadership,” NYC OIC Chairman Earl P. Saavedra said.

“The new SK logo is part of the commission’s commitment to present the reformed SK as fresh, enhanced and well-established.

The overall makeover of the SK logo will also inhibit the negative impression of youth based on the previous SK. “Now, it was not just the law that has been reformed but also its logo, signifying its changes and difference with the previous SK,” NYC Commissioner JP Peñol said. The rebranding of SK’s “new face” was a collaborative effort by the NYC, Office of Sen. Benigno Paulo Aquino IV, and Youth Vote Philippines.

The new logo will be formally launched next month, as part of “Linggo ng Kabataan” celebrations.

James Arthur B. Jimenez is director of the Commission on Elections’s Education and Information Department.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Friday, July 22, 2016 A11

Competitiveness as tool for local economic growth Alvin P. Ang

EAGLE WATCH Continued from A1

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ompetitiveness, as defined in the CMCI framework, follows Michael Porter’s perspective that it is based on location and the productivity that companies located there can achieve. Location is the source of resources of a governance unit, and productivity is how the governance unit uses these resources.

Hence, a location may have rich resources, but the existing productivity levels are low, implying that the resources are not being properly utilized. It is also possible that a location may not have quality resources, but the productivity is high due to the governance mechanism and the availability of necessities for business. In the CMCI, location and productivity are further broken down into three main pillars of economic dynamism, governance and infrastructure, with corresponding indicators for each.

Indicators of economic dynamism generally look at the aspects of the amount and number of businesses and the number of jobs created; governance indicators look at the processes and times for local government to act on different priorities, including business permits; and infrastructure indicators look at the capacities of localities to absorb new investments and expansions. Along these contexts, competitiveness can be analyzed regardless of the governance unit from municipalities to countries. Similarly, the competitiveness of local governments can be aggregated to come up with provincial, regional and national competitiveness.

In the last four years of implementation, we have observed how local governments have taken the index seriously as a way of measuring their performance. It should be noted that the awards do not provide any monetary award for the winners. Yet, it continues to attract more LGUs every year. This last round already saw the participation of all cities in the country. It is likely that a 100-percent participation will be easily attained in the next two years.

Beyond the winners and the awards, the CMCI have actually realized the following key outcomes: a) Competitiveness database—The four years of implementation now provides the NCC with a database that can be used to analyze movements of productivity across different localities in the country. This should enable national planners to isolate out the laggards from the movers and juxtapose said information to identify potential government assistance. It will also help in designing the type of assistance that can be provided.

In addition, regional development councils and provinces can also use the data for the same purpose at their governance levels; b) Data consciousness—One of the key

In the last four years of implementation, we have observed how local governments have taken the index seriously as a way of measuring their performance. It should be noted that the awards do not provide any monetary award for the winners. Yet, it continues to attract more LGUs every year. This last round already saw the participation of all cities in the country. It is likely that a 100-percent participation will be easily attained in the next two years. elements of the index is the availability of data at the local level. Winners are those that have carefully improved their database-management system, either by making them electronic or by simply making them accessible and organized. This means that even if you have the best information about your locality but you have not organized and databased them, they will not be reflected in the rankings. This will make the locality lose points, as the ranking is based purely on the scores accumulated per indicator. No data means no score, and eventually a lower ranking.

The complaint of some observers was that the winners do not “look” competitive from their perspective. However, this is not a matter of observation but of availability of data. Past winners who have lower rankings in the later rounds have admitted that they have to consistently update their database and ensure that they have inputs to all the indicators required.

If all the participating LGUs will have a consistent database of their own, maintain them and update them regularly, then the CMCI would have succeeded in starting a management revolution at the local government levels. For, indeed, we cannot manage what we cannot measure.

These have made every participating LGU a winner. By submitting themselves into this ranking, these LGUs are now in the right track of measuring their own economic growth; finding their own strength and weakness in using local resources; and be able to market their locality as an investment destination for both local and foreign investors. The full results of the 2016 CMCI can be accessed at http://www.competitive. org.ph/cmcindex.

Filming taboos Tito Genova Valiente

annotations

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t will happen in a moment, in the blink of an eye, when the last trumpet is blown. For when the trumpet sounds, those who have died will be raised to live forever. And we who are living will also be transformed.

1Corinthinas 15:52 IT was almost 10 in the evening.

The small chapel was packed, mostly with old women and a few men.

Everyone was quiet. Everything was quiet, except the sounds coming from outside. They were at the decibel the sound man hated.

I was watching the filming of Hinulid, which literally means “laid down,” as when you lay down a baby in bed. In the chapel, laid to rest on

the bed of a bier are three images of the Dead Christ. The director, Kristian Sendor Cordero, was about to do the impossible—to include in the film the bathing and changing of vestment for the three icons.

The three icons have been at the center of many controversies. There was a time in the 1950s when the then-Philippine Constabulary or PC had to intervene because some men wanted to destroy the icons. The im-

‘K to 12: A step in the right direction’ Arrenz Joseph B. Magnabihon

Driving Momentum

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ne of the lasting legacies of the Aquino administration was its resolve to overhaul the country’s aging basic-education system. Republic Act 105333, or the Enhanced Basic Education Act of 2013, was the embodiment of that resolve. The Act, which unveiled the K to 12 Basic Education Program, sought to provide the next generation of Filipinos ample time for mastery of concept and skills, which, in turn, will prepare them for either tertiary education or employment.

The new program is expected to decongest the curriculum, as it will now be spread out to 13 years, instead of just 10 years. Being the last Asian nation to advance from a 10year pretertiary-education system, the Philippines has long been at a disadvantage in terms of educational qualifications. Graduates of the previous system are mostly barred from immediately taking up employment

or applying for tertiary education overseas. With this change, graduates shall no longer be disqualified from employment due to age and the country’s basic-education system will be pushed to the same level with the rest of the world. Moreover, it will improve the advantage of the Filipino labor force in the Asean Economic Community, where stiffer competition among professionals

Ted Cruz derails the convention Ramesh Ponnuru

BLOOMBERG

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s soon as it was clear beyond doubt that Sen. Ted Cruz wasn’t going to endorse Donald Trump in his speech at the Republican convention, it was also clear that Cruz’s speech was the only one that was going to be discussed the next day. Mike Pence, the vice-presidential nominee, gave a conservative speech that almost all Republicans could applaud. But nothing in it could compete for attention with the blow to party unity that Cruz—and the delegates who booed him offstage—delivered.

And that Trump and his allies compounded. Newt Gingrich, speaking after Cruz, was smart

enough to know that it would be a mistake to rebuke him frontally. Instead, he tried to remold Cruz’s non-

ages had to be repaired somewhere.

Quiet are the facts about the Rizalistas being part of the Tolong Hinulid (tolong means three). The houses surrounding the chapel have still the old men and women bearing cards identifying them as part of a group that venerates the three icons. Not in the mainstream belief system, the icons are not accepted in some sectors of the Catholic Church.

One has this feeling when looking at the three icons that here once more is a form of what James C. Scott calls “a quotidian struggle”. Scott also developed the concept of “everyday resistance,” a form of struggle that does not include the obvious guerrilla warfare but of quiet actions. Scott enumerates these forms of everyday resistance, which include noncompliance and feigned ignorance.

Are the people of Cagbunga protesting the imposition of Western beliefs and religion.

That balmy night did not have any answer. What happened was the old

endorsement into an endorsement.

Cruz (who, I should note, is an old friend) had said voters should pick the candidate they can trust to protect the Constitution. Gingrich said that in practice that should compel them to vote for Trump.

This was the obviously sensible political response for Trump supporters. Say that Cruz’s congratulations to Trump were appreciated, mention his case against Hillary Clinton and move on. Instead, everyone, from Chris Christie to Gen. Mike Flynn to anonymous Republican National Committee functionaries, lit into Cruz as a traitor.

This was political malpractice in multiple respects. Remember: Trump and his campaign agreed to let Cruz speak at the convention, even if he didn’t endorse the

CRUZ

nominee. They agreed, that is, to allow what Trump’s people are now treating as a calamity. They could’ve easily foreseen what Cruz would do,

men and women had to stop even their coughing to achieve the silence needed by the film technology. It was also a silence that made solemn a rare, if not intensely exotic, ritual.

Came the part where Nora had to join the caretakers in bathing the second Christ. The old men and women, devotees of the Dead Christ and the Living Legend that is Aunor, watched. Even the children enjoying the festive air outside had all gone quiet. The director asked for a blue light to beam on the sad and strong face of Aunor. Her character had returned to Cagbunga to lay to rest her son. The Three Dead Christ were her assurance of love and life eternal.

That night, in the chapel of a small barangay, rituals and cinema have agreed to honor a struggle. The people were happy. It was a good decision to have their icons filmed for devotion and resistance for the days to come.

E-mail: titovaliente@yahoo.com.

and skilled laborers will be more pronounced due to the mutual recognition espoused by the free flow of professional services.

Clearly, the K to 12 Program is a step in the right direction in terms of upgrading our legacy education system, and ensuring the competitive advantage of our labor force, but it’s still far from being perfect.

Critics view the program as a mere Band-Aid to the more deep-rooted problems, such as teachers’ compensation, chronic classroom shortages, bloated teacher-student ratio and others.

The most pressing among them is the additional expense to be incurred by the parents. They also fear that the added burden of two more years in school could worsen dropout rates in the long run. Albeit the points raised are valid, the government has already made strides in addressing some of these major concerns.

As of 2015, the Department of Education (DepEd) was able to construct 86,478 classrooms, closing the 66,800 classroom shortage.

Moreover, the agency shall hire

39,066 additional teachers to meet the personnel requirements of the program. To answer the clamor of the ailing parents, the DepEd launched the Senior High School Voucher Program. The voluntary program is a government-backed subsidy offered to graduates of junior high school to cover their senior high-school education in a DepEd-approved school.

Indeed, there is no silver bullet in ensuring the future of this nation. However, we can take solace over the fact that the government has taken the necessary steps to align the country’s education system to global standards. Cognizant of the importance of education to economic development, President Duterte has included the development of the country’s human capital, as well as promoting science, technology and the creative arts on his “10-point” socioeconomic agenda. A few years from now, when the first cohort of the K to 12 Program will march to their graduation, we can rightfully say that “change has truly come.”

and, thus, should’ve agreed on what they would all say about a nonendorsement. But Gingrich’s prepared remarks simply assumed that Cruz was going to make an endorsement he hadn’t promised to make, and Gingrich had to wing his response— a response that none of the other people in Trumpworld echoed.

Trump himself got into the act with a tweet, saying that Cruz had broken his pledge to support the nominee (a pledge that Trump himself had said he wouldn’t honor), that Cruz had been booed, that he had seen the text of the speech and allowed it to proceed, and that it was no big deal. These were a lot of points to convey in one tweet, and one must again admire Trump’s concision. But the existence of the tweet would seem to suggest that

Trump thought the speech was a big deal, and that he needed to say something about it. And his claim to have approved the speech both undercuts his complaint about it and underscores the amateurishness of his campaign.

Cruz has taken a big gamble with his political career. In the short run, he will pay a price. But he would’ve paid a political price, too, if he got a reputation as a man who shrugged off malicious attacks on his family —Trump had insulted his wife and his father—for the sake of elections. (To say nothing of the moral price.)

Three days in, this convention seems to be setting back rather than advancing Republican unity—and, as ever, the deepest source of disunity is the candidate himself.

2nd Front Page BusinessMirror

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Friday, July 22, 2016

www.businessmirror.com.ph

8 ODA-funded projects to seek ICC okay anew

OATH TO REFORM Residents take their oaths to reform, after heeding a call from the Tanauan City government to undergo processing allegedly for being drug users. President Duterte said he plans to ask Chinese officials why some Chinese citizens who visit his country are involved in illegal drugs. The crime-fighting President, who has vowed to end crimes within six months of taking office on June 30, also said he will not hesitate to grant presigned presidential pardons to law enforcers accused by human-rights advocates of abusing their authority in cracking down on narcotics, as long as the soldiers and the police involved tell the truth and do not fabricate evidence. AP

DOE set to audit all power-related firms T

By Lenie Lectura

@llectura

he Department of Energy (DOE) wants to conduct an audit on all power-generation firms and distribution utilities to determine if they are in compliance with existing laws and regulations.

In a roundtable organized by GE Philippines, the Department of Energy (DOE) spokesman said results of the audit will “better guide” the agency in crafting future policies under the watch of Energy Secretary Alfonso G. Cusi and future energy secretaries.

“Yesterday [Wednesday], the DOE secretary already told the power bureau to draft a circular to conduct an audit not only on coal-fired plants, but also on the transmission and distribution sectors,” former lawmaker Wimpy Fuentebella said.

O n t he t ra n sm i ssion sector, Fuentebella said “Transco [National Transmission Corp.] may conduct an audit on the transmission side, while it could be the NEA [National Electrification Administration] for the electric cooperatives.”

“There are already standards in place, so we will look into each power plant whether they are complying with all existing standards,” including those set by the Department of Environment and Natural Resources (DENR).

The audit would be conducted by competent people in the agency.

Fuentebella said the result of the audit would be submitted to the Climate Change Commission and the DENR. The DOE, he added, is also crafting an energy-mix policy. “We already have one but we will revisit that. It will be a fair classification.

We are also looking at energy se-

166 The number of permits power-plant operators need to secure with the new government requirement

curity from the consumer point of view. It should be fairly priced, reliable and secure,” Fuentebella said.

Coal power-plant operators who were present during the roundtable said they welcome an audit spearheaded by the government.

“We are open to government initiatives. We understand the need to do this, and we do not oppose it. What they intend to do makes a lot of sense,” they said.

“If they will try to formulate an energy policy that will guide the country in the next 20 years, then we need to know where we are starting from. I don’t think the industry will oppose that. We will support it,” said Frank Thiel, managing director of Quezon Power (Philippines) Ltd. Co. Quezon Power owns and operates the 460-megawatt (MW) coal-fired power plant and the 31-kilometer transmission line in Mauban, Quezon.

GN Power also expressed sup-

port to the planned audit. “We welcome that, as long as the guidelines are clear and subject to existing policies,” company Vice President Ariel P. Punzalan said.

A new requirement imposed on new coal-power projects, however, does not sit well with the coalplant operators.

“It would be tough for any coalplant developer. With the new requirement, it’s going to be harder,” Punzalan said.

The Environmental Management Bureau has directed to require in the application for Environmental Compliance Certificate for operation of coal-fired power plants a clearance from the Climate Change Commission and the office of Sen. Loren B. Legarda prior to processing and approval of their applications.

Thiel said he has yet to read a copy of the memorandum issued by the DENR. “I was just informed about that, but I haven’t seen the memorandum yet, so I can’t comment,” he said.

Power-plant operators need to secure over 100 permits. Thiel said the number of permits that needed to be secured is 165. With the new requirement, “then that would now be 166 [permits].”

Meanwhile, GE Steam Power Systems Senior Sales Executive for Asia Pacific Massimo Gallizioli said his company offers power-generation technologies that provide high efficiency with less emission.

He said the newest coal plants being built using ultra-supercritical technology deliver up to 49-percent efficiency rates—significantly higher than the global average of 33 percent, leading to lower emissions and operating costs.

GE’s new double-reheat technology delivers an additional 1.5 percentage points of efficiency, leading to 3 percent lower emissions, which, Gallizioli explained, “can add up to $80 million in value for a 1,000-megawatt plant.”

Meanwhile, the Federation of

Philippine Industries (FPI), which is composed of 34 industry associations and 120 manufacturermembers, fully supports the stand of President Duterte not to honor the government’s recent Paris Protocol pledge to reduce greenhouse gases (GHGs) by 70 percent.

FPI Chairman Dr. Jesus L. Arranza noted that the Philippines is already a minimal contributor to carbon emissions—both on a total and per-capita basis—relative to the rest of the world, and already has a relatively high penetration of renewable-energy capacity.

“Economic growth and poverty alleviation are closely intertwined with power costs, which, for the Philippines, is one of the most expensive in the region. Thus, coal power plants are without question the most viable option at this time and through the next several years,” Arranza said.

He said compared to the thousands of coal-fired power plants in developed countries, the Philippines has only 23 coal-fired power plants. These, Arranza said, are the backbones of the country’s generating sector, as the aggregate power produced by these plants constitutes 35 percent of the country’s total power generated at about 6,000 MW. He said, “Coal power plants are base-load power plants that provide stable and dependable power that addresses the requirements of manufacturers and producers on a 24/7 basis.”

“Hence, compared to countries that are already fully industrialized, the Philippines should not be shackled by the Paris Protocol commitment and must pursue its own development and industrialization based on the best interest of its people, by addressing the GHG emission through reforestation and other cobenefit measures, such as improved energy efficiencies and usages, decongestion of traffic, which is a major cause of GHG,” Arranza said.

More local and foreign tourists are expected to flock to this man-made forest in Bohol after the completion of the New Bohol Airport Construction and Sustainable Environment Protection Project. NONIE REYES

By Cai U. Ordinario

E

@cuo_bm

ight projects funded by official development assistance (ODA) loans and grants would likely seek the Investment Coordination Committee (ICC) approval anew due to restructuring, according to the National Economic and Development Authority (Neda).

In the ODA Portfolio Review, the Neda said project restructuring often refers to changes in scope, extension in implementation period or loan validity, or changes in cost.

These changes need to be reviewed, approved and confirmed by the ICC and/or the Neda Board (NB). In 2015 a total of 16 projects were reevaluated by the ICC/NB or the ICC Secretariat.

T he list of loan-funded projects that would likely be resubmitted to the ICC includes the Philippine Rural Development Project (PRDP); New Bohol Airport Construction and Sustainable Environment Protection Project; Road Improvement and Institutional Development Project; and the Provincial Towns Water Supply and Sanitation Program III (PTWSSP III).

The Neda said the PRDP has a proposal to obtain additional $450 million worth of financing.

Neda Deputy Director General for National Development Programming Rolando G. Tungpalan earlier told the BusinessMirror the agency is not inclined to decide on the matter, given the implementation of PRDP just started a few years ago.

The New Bohol Airport Construction and Sustainable Environment Protection Project will return to the ICC for its proposal to extend its runway length to 2.5 kilometers. The proposal change also includes the expansion of the Passenger Terminal Building from a single-story to a two-story building.

For the Road Improvement and Institutional Development Project, the Neda said a new ICC approval needs to be sought to extend the loan for the projects.

The Neda said the Department of Public Works and Highways is seeking a two-year extension of the Asian Development Bank loan to June 30,

2018, from June 30, 2016. The project was approved by the ICCCabinet Committee on June 6.

For the PTWSSP III, the Neda said there could be cancellation of $5.493 million of the loan by the closing date of the project on December 31, 2015.

Other loan-funded projects include the National Irrigation Sector Rehabilitation and Improvement Project; Jalaur River Multipurpose Project II (JRMP II); and the Mindanao Sustainable Agrarian and A g r ic u lt u ra l Development Project (MinSAAD).

For the National Irrigation Sector Rehabilitation and Improvement Project, the National Irrigation Administration (NIA) encountered-exchange rate fluctuations that may render its project cost insufficient to complete the project.

The Neda said the NIA is considering to either downscale the project’s activities or to request for additional financing.

The report said the NIA may extend the implementation of the JRMP II to November 28, 2017, from March 2016 due to delays it encountered.

The Neda report stated Korean Economic Development Cooperation Fund (KEDCF) consultants said civil works will take at least 48 months to be completed.

The target completion will likely be adjusted accordingly.

“Possible extension of project implementation from March 2016 to November 28, 2017, due to delays caused by late project start-up and delay in the issuance of bank concurrence for the construction of dams and highline canal,” the Neda said.

For the MinSAAD project, the Neda report said prolonged procurement of consulting services will require the Department of Agrarian Reform (DAR) to extend the project.

The list also includes a grantfunded project, the Adapting to Climate Change Impact Through the Construction of Water Impounding Facilities in the Philippines (Pasa SRIP).

The Neda said the implementation period of the Pasa SRIP may need to be extended due to delays it encountered during implementation. These delays were caused by typhoons and heavy rains in the area.