Businessmirror July 23, 2018

www.businessmirror.com.ph

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EXPROPRIATIONS IN LOCAL PPPs ALBERTO C. AGRA

PPP LEAD

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AN a local government unit (LGU) expropriate private property and contribute the use of that property in a public-private partnership (PPP)? Yes! Eminent domain defined.

This power, also referred to as the power to expropriate, is delegated to all LGUs. Under the 1991 Local Government Code, an LGU may, through its local chief executive and acting pursuant to an ordinance, exercise the power

of eminent domain for public use, or purpose or welfare for the benefit of the poor and the landless, upon payment of just compensation to be determined by the courts.

Continued on A10

Third telco likely to enter market by mid-2019: Rio B L S. M @lorenzmarasigan

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T may take a year before the future third telco player could start offering its services to consumers, and start its unwritten mandate of breaking down the duopoly, as the Department of Information and Communications Technology (DICT) aims to start the ball rolling for the official selection process this week.

Eliseo M. Rio Jr., the chief of the agency, said his group sees the third telco coming in the market by the middle of 2019, as hurdles on the selection process are consistently being addressed, starting with the official adoption of a draft terms of reference (TOR) which favors the highest committed level of service. Officials decided on adopting the HCLoS as term of reference before the weekend.

Rio said one of the major issues raised during the meetings of the oversight committee for the selection process has already been addressed—the concern on frequency spectrum formerly awarded to Bayan

PESO EXCHANGE RATES

Telecommunications Inc. “We have talked to Globe Telecom Inc. and Bayan, and they have agreed to withdraw their petition.

This is now being arranged by the Solicitor General, so that this can be taken up in the Supreme Court this week. So more or less this has been addressed,” Rio told the BusinessMirror.

The case at hand goes back to 2005, when the National Telecommunications Commission (NTC) awarded four of five 3G frequencies to telco providers, but refused to give the fifth slot to Bayan, which supposedly won the said real estate via an appellate court decision five years later.

Bayan subsequently sued to get NTC to award the frequencies, and won in the appellate court.

However, the regulator brought the case to the High Court, leaving 10 megahertz (MHz) of 3G frequency left untouched and unused up until today. “With their withdrawal, we can now go ahead and start the legal process of the selection by around Friday,” Rio said.

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Monday, July 23, 2018 Vol. 13 No. 282

P.  |     | 7 DAYS A WEEK

Cha-cha, Bangsamoro, budget top Congress list

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B J M N.  C

@joveemarie

HE third and last session of the 17th Congress will open today (Monday) with the ratification of the Organic Law for Bangsamoro in the Autonomous Region in Muslim Mindanao (BARMM), the 2019 annual budget and Charter change (Cha-cha) as top priorities.

House Majority Leader Rodolfo C. Farinas Sr. of Ilocos Norte said the final copy of the reconciled proposed organic law will be ratified on Monday morning and will be submitted to President Duterte for signing into law hours before his third State of the Nation Address (Sona) of the

same day. The 28-member bicameral conference committee that tackled the Bangsamoro measure said the proposed organic law, which seeks to abolish the Autonomous Region in Muslim Mindanao (ARMM) and creates BARMM, can withstand constitutional scrutiny before the

Supreme Court.

The Bangsamoro region will be headed by a chief minister and a ceremonial leader called a Wali.

Under its structural government, the BARMM would have a parliament of 80 members—50 percent party representatives, 40 percent

district representatives and 10 percent sectoral representatives.

Anak Mindanao Party-list Rep. Amihilda J. Sangcopan dispelled fears that the proposed Bangsamoro Organic Law that was approved was watered down.

“The new Bangsamoro would have greater regional government, a parliament, fiscal autonomy, and justice system and that can withstand constitutional scrutiny before the Supreme Court,” she said.

Also, Deputy Speaker Gwendolyn Garcia of Cebu said the House expects to receive the administration’s proposal for the 2019 General Appropriations Act shortly after the Sona, so that the House can start deliberations on the proposed budget for next year.

Budget deliberations are expected to take up most of Congress’s Continued on A2

May debt payments rise 103%, 5-mo total is P385B B R C

@ReaCuBM

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WATER WATCH Residents of Marikina City check out the water level at the Marikina River, which has been under close monitoring since last week, when heavy rains brought by the southwest monsoon (habagat) and three successive weather disturbances left large parts of Luzon flooded. Related story on page A12. ROY DOMINGO

TOTAL of P159.096 billion has gone to the payments of some of the national government’s debt for the month of May, pushing total debt payments for the first five months of the year to P385.142 billion, according to data from the Bureau of the Treasury (BTr).

BTr data showed the P159.096billion payment represented an increase of 102.96 percent compared to the P78.387 billion made in the same month for 2017.

For May 2018, amortization payments of P137.985 billion outpaced interest payments made by Continued on A2

■ US 53.5200 ■ JAPAN 0.4760 ■ UK 69.6616 ■ HK 6.8186 ■ CHINA 7.8943 ■ SINGAPORE 39.0515 ■ AUSTRALIA 39.3800 ■ EU 62.3240 ■ SAUDI ARABIA 14.2716

Source: BSP (20 July 2018)

News

BusinessMirror

A4 Monday, July 23, 2018 A2

Con-com to critics: Do you want PHL to be stagnant?

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By Bernadette D. Nicolas

@BNicolasBM

MID criticism of the “objectionable” and “problematic” economic provisions under the draft Federal Constitution, a member of the Consultative Committee (Concom) maintained that the country needs to open up to foreign investments for the benefit of Filipino people, especially consumers and laborers.

Con-com member Arthur N. Aguilar, chairman of the Subcommittee on Economic Reforms, defended their decision to allow Congress to pass a law to liberalize the Philippine economy to attract foreign investments, especially in areas like public utilities and mass media.

“If we don’t open up to foreign investments, we will stay the way we are,” Aguilar said. “If we don’t move up the value chain of BPO [business-process outsourcing], what are we going to do with 3 million or 4 million younger Filipinos who come out of the labor force everyday? More OFWs [overseas Filipino workers]? What is their solution?” he wondered aloud.

The 1987 Charter puts a cap on foreign equity in business in the Philippines at 40 percent, especially on public utilities, educational institutions, among others.

Aguilar said the Philippines is one of the few countries with constitutional restrictions for businesses.

Other countries like South Korea, Thailand Vietnam, Singapore have benefited from foreign investors who have generated employment and livelihood, he pointed out.

“So if they are saying that the more developed Singapore, Thailand and Vietnam—which by the way was well behind us before [but has] now...overtaken us—is wrong, what is their solution?

Because if they are happy with the present system then there’s

nothing to talk about,” he said.

He also noted that it is not for the Constitution to lift the economic restrictions all of a sudden as this may create chaos in the market.

“You have to build it in a measured way to make sure that national security concerns are taken into consideration like in educational institutions and media, there are safeguards there. You don’t just open it up 100 percent,” he said. “We have to have some safeguards and regulations but these cannot be placed in the Constitution. They can only be placed in law. That’s why we said Congress will have to do this.”

The National Union of Peoples’ Lawyers (NUPL) slammed the proposed draft Constitution over the weekend, noting that the Con-com proposal added qualifications that could lead to further liberalization of the economy to allow the untrammeled entry of transnational corporations.

According to NUPL, adding the provision “Congress, may by law, change the voting capital requirement” practically shifts to Congress the power to chart constitutional policy since it may provide for a law that will practically redefine the voting capital requirements for natural resources, lease of alienable lands, ownership and management of mass media, foreign ownership of lands, public utilities and educational institutions.

“Thus far, all attempts at Chacha [Charter-change] are anti-

people in the major sense that they deliver the national economy to foreigners and transnational corporations as they further institutionalize policies of liberalization, privatization and deregulation which have caused the severe impoverishment of the Filipino people,” the group of lawyers said.

The phrase “as provided by federal law” was also inserted in the provision on foreign ownership of land, which NUPL said, empowers Congress to allow foreigners to own lands in the country since it has been proposing this in the 20 years that Charter change has been attempted.

NUPL warned that the immediate impact of adding this phrase will be the rise in the price of lands driven up by foreign demand, making it impossible for Filipinos to buy lands in the country.

“Land reform and food security will be the next casualty as large tracts of lands will now be devoted to the needs of these aliens instead of the Filipino farmers. Security is also a problem with countries such as the US and China now formally, constitutionally and legally allowed to purchase lands once Congress passes a law that will further open up lands to foreigners,” the initial legal memo on the Con-com draft read.

“While the Con-com attempts to innovate and it by and large may arguably have the best of intentions and novel ideas, the hand of selfserving forces at work is discernible in the expressions, formulations and proposals that they ended up with,” NUPL said.

“In the final analysis, these kinds of Cha-cha are not really about improving the economy and our system and structure of the government, but the perpetuation and even exacerbation of the systemic and systematic repression and exploitation of the Filipino people through the federalism of the political and economic elite and their witting or unwitting proxies.”

Aside from NUPL, Sen. Paolo Benigno A. Aquino IV criticized the Con-com proposal in a TV interview last week, saying that the Con-com wanted to solve economic problems

in the country yet it focused too much on political reforms.

Division of powers

Responding to Aquino, Aguilar said it would be good if the senator can focus on the division of powers between the federal government and the federated regions, noting that the exclusive powers of the regions are all economic.

Socioeconomic Planning Secretary Ernesto M. Pernia also noted last week that the shift to federalism will disrupt the momentum of infrastructure improvement in the regions.

Malacañang, however, said it has clarified the matter with Pernia and said that the shift would have no adverse effect on the economy.

Aguilar said he also doesn’t see how the disruption will happen because the financing is already in place and even if local funding were transferred to federated regions, there is nothing to prevent the regions from contributing their funds to the federal government to realize these projects which will also benefit them.

After Bangsamoro, what?

Now that Congress has allowed the passage of Bangsamoro Basic Law (BBL), Aguilar also posed a rhetorical question to those opposing Charter change: “If you shut the door to Cha-cha, are you willing to give similar BBL terms to other federated regions. If not, why not?

The bicameral conference committee approved late Wednesday night its version of the BBL, which was renamed the Organic Law for the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) or the Bangsamoro Organic Law (BOL).

“The two houses of Congress allowed the parliamentary system of the government. They allowed a huge block grant. They allowed [a percentage] of natural resources to be retained by the region. They allowed them to have their own rules, their own plans, why just Bangsamoro?,” he said. “If they really want to do something under the present Constitution, they can do it. How come they did not do it?”

Cha-cha, Bangsamoro, budget top Congress list time for the remaining months of 2018.

According to the Department of Budget and Management, the P3.757-trillion national budget will be the first cash-based budget of the government, reflecting the urgent need to speed up public service delivery to the people.

The DBM said public infrastructure and human capital development remain as the spending priorities in the President’s budget for 2019.

The sector with the highest allocation is education, comprising the budgets of the Department of Education (DepEd), State Universities and Colleges (SUCs), the Commission on Higher Education (CHED), and the Technical Education and Skills Development

Authority (Tesda).

Its cash appropriations in the proposed 2019 budget amounts to P659.3 billion, higher by P72.2 billion or 12.3 percent than its cashbased equivalent in the 2018 budget.

Other agencies with big allocations are the Departments of Public Works and Highways (DPWH), the Interior and Local Government (DILG), National Defense (DND), the Social Welfare and Development (DSWD), Health (DOH), Transportation (DOTr) and Agriculture (DA), the Judiciary and the Autonomous Region in Muslim Mindanao (ARMM).

Federalism

Meanwhile, House Committee on Constitutional Amendments Chairman Roger G. Mercado of Southern

Leyte said his committee will begin this week hearings on the draft federal Constitution submitted by the Consultative Committee (Con-com).

“We will immediately begin the hearing. I think this Wednesday if the schedule permits. That is the mandate [deliberate] of our committee. To study these [Con-com] recommendations,” said Mercado.

Speaker Pantaleon D. Alvarez said Congress would need six to eight months to complete the debate and deliberations on the proposed Federal Charter and another six months to conduct an information drive before the draft Federal Constitution can be presented to the people for ratification.

Rep. Luis Raymund F. Villafuerte Jr. of Camarines Sur said the proposed Cha-cha to effect feder-

alism is a matter of explaining the entire process to the Filipino people and how it will help to change their lives for the better.

Villafuerte said he wanted a more aggressive information campaign on the proposed shift to a federalpresidential system to educate the public about the advantages and benefits of this system in pursuing the Duterte administration’s goal of high and inclusive growth.

Local executives can kick off the information drive, said Villafuerte, a three-time governor and vice chairman of the House Committee on Local Government.

Meanwhile, Alvarez said the leadership of the 17th Congress will meet to set the other agenda of the two houses in the remaining months of Congress.

May debt payments rise 103%, 5-mo total is ₧385B the government, or P21.111 billion.

The government’s amortization expanded by 140.3 percent compared to the P57.421 billion made in May 2017, with much of the amortization hike this year attributed to the payment of local maturing securities, at P130.525 billion.

Of the total, domestic amortization for the month amounted to P130.636 billion; while for-

eign amortization accounted for P7.349 billion.

Earlier, National Treasurer Rosalia V. de Leon said that maturing government securities of P130 billion for May was funded by the BTr through its Bond Sinking Fund (BSF).

“First of all, remember we have a BSF, we have already been making contributions in anticipation of particularly the chunky ones

[maturities], because it would be imprudent on our end if we’ll just leave it to the auctions to fund the maturity,” de Leon said.

Interest payments for the month showed a slight uptick of 0.6 percent compared to the P20.966 billion made in May 2017. Bulk of the interest payments went to domestic fixed rate Treasury bonds amounting to P16.587 billion.

Of the total, domestic interest

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payments accounted for P18.634 billion while foreign interest payments amounted to P2.477 billion for the month.

For the January-to-May period this year, a total of P385.142 billion went to the payment of some of the government’s debt both from local and offshore lenders— an increase of 9 percent compared to the P353.326 billion made in the same period last year.

www.businessmirror.com.ph

Senators’ caucus to tackle House proposal to scrap 2019 elections

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ENATE President Vicente C. Sotto III is calling an all-senators caucus a day after President Duterte’s State of the Nation Address in order to tackle a House proposal scrapping the 2019 elections to give way to Charter changes, effectively extending terms of incumbent officials with fixed terms set to expire next year.

This developed as a ranking Senate source, speaking on condition of anonymity, thumbed down a scenario where the majority of senators would back the House proposal to cancel the upcoming elections.

“No way. I am certain of the vote of 21 out of 23 senators,” the Senate insider told the BusinessMirror, admitting he was just “not sure” of the stand of exSenate President Aquilino L. Pimentel III and Sen. Emmanuel Pacquiao.

The poll postponement plan was suggested to frontload a move to tinker with the 1987 Charter, including the proposed shift to a federal system of government favored by the Duterte administration.

“We will talk about it [no 2019 election] on Tuesday before I make any announcements,” Sotto told the BusinessMirror over the weekend. Sotto added: “I would rather speak [about the Charter-changeno-election scheme] when I already have the pulse of my colleagues.”

Sotto confirmed his preference to first convene an all-senators caucus when asked on Sunday if he sees the Senate supporting the House proposal to cancel next year’s scheduled elections for national and local offficials, including 12 senators and over 200 congressmen whose terms are set to expire next year.

Alvarez: Decide before October

Speaker Pantaleon D. Alvarez, who is strongly pushing for the postponement of 2019 elections, said members of Congress should decide on the no-election issue before the filing of certificate of candidacy in October.

The speaker said the 2019 polls may be scrapped through a law passed

by Congress.

But if the Senate would not agree, Alvarez said another option is for supporters of federalism to launch a people’s initiative (PI).

Deputy Speaker Raneo Abu of Batangas has already filed House Bill 5724 so the people could use the PI and referendum mode for Charter change and legislation.

Abu’s measure seeks to adopt Republic Act 6735, or the Initiative and Referendum Act through PI in amending the Constitution. Butch Fernandez and Jovee Marie N. dela Cruz

Metrobank income up 31%

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ETROPOLITAN Bank and Trust Co. (Metrobank) posted P5.2 billion in net income for the second quarter of 2018, or a robust 31-percent growth from P3.9 billion in the same period last year. This brings net income for the first half of the year to P11.0 billion, increasing by 16 percent yearon-year.

Metrobank’s solid performance was underpinned by the core business, as double-digit growth in loans and sustained CASA ratio lifted margins even higher, while recurring expense growth was kept at a manageable level.

“We are pleased to see that our efforts continue to bear fruit. Coming from the heels of a successful capital raising at the start of the second quarter, we have started to build good momentum that should allow us to meet our growth targets,” Metrobank President Fabian S. Dee said.

“Together with achieving sustainable profitability, we are, likewise, making good progress in strengthening our risk management and operating controls,” added Dee. The company’s loan growth guidance of high-teens was met, as the total portfolio expanded by 18 percent year-on-year to P1.3 trillion. The

commercial segment led the growth at 21 percent, driven by the strong performance of top corporate accounts followed by middle market and SMEs. Meanwhile, the consumer portfolio maintained its mid-teens growth.

On the funding side, total deposits increased to P1.6 trillion at the end of the first half, and the Bank’s CASA ratio was maintained at 62 percent.

Net interest margin for the period was at 3.77 percent, which is five basis points higher against the comparative figure last year. On a quarteron-quarter basis, there was a notable 14 basis point improvement in the NIMs to 3.89 percent in the second quarter. Net interest income stood at P33.3 billion, which accounted for 74 percent of the Bank’s total revenue of P45.1 billion.

Meanwhile, noninterest income rose by 14 percent to P11.8 billion—P6.8 billion in service fees and commissions and income from trust operations which was up 16 percent, P1.4 billion in net trading and FX gains and P3.6 billion in miscellaneous income. Fee-related revenues continue to benefit from steady customer-driven flows and FX income, and also boosted by the large corporate deals which were booked in the early parts of the semester.

Third telco likely to enter market by mid-2019: Rio Telco

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The oversight committee on Friday agreed to adopt the terms of reference that places premium on the highest committed level of service, a points-based system based on commitments on speed, coverage and capital.

Rio explained that the draft terms of reference and schedule for the first official public hearing will be published in a national newspaper soon.

The hearing will be set for 15 days after the official publication.

“It is different from the public forum that we had in the past. This now has the quality of a court hearing, hence all petitions and comments will be recorded and taken into consideration,” he said.

The public hearing will allow the agency to enhance the current draft terms, and publish the official TOR after two weeks of review and amendments—if any.

When published, the official rules on the selection process will take into effect after 15 days.

“So, we expect that the official

terms of reference will become effective within 55 days. So by the end of September or early October, we will have the official terms,” Rio said.

From then, contenders can start purchasing bid documents and submit the official bids—which will be on the basis of committed level of service— two months after.

“So by the first week of December of before Christmas, we will have the award of the third telco,” Rio said.

From then, it will take the third telco about two months to finish its incorporation process, including securing approvals from the privacy commission.

“Thus, by February, they can start creating their network. We expect that by mid-2019, they have started offering their services little by little, and by the end of the year, we assume that they will have reached the 1-million subscriber mark,” Rio said.

The third telco is seen to spur competition in the market that is dominated by two incumbents: PLDT Inc. and Globe Telecom Inc.

The Nation BusinessMirror

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Editor: Vittorio V. Vitug • Monday, July 23, 2018 A3

DENR to study possible impact of federalism on environment

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By Jonathan L. Mayuga

@jonlmayuga

HE Department of Environment and Natural Resources (DENR) has yet to fully study the potential impact of a federal form of government on the country’s environment and natural resources.

Sought for comment on the draft Federal Constitution and its potential impact to the environment and natural resources sec-

tor, an official said the DENR as a whole may begin studying the proposed Federal Constitution next week.

T here is no order com ing from Secretary Roy A. Cimatu or Malacañang to study and comment on the draft Constitution, according to DENR Undersecretary for Policy, Planning, International Affairs and Foreign-assisted Projects Jonas R. Leones. However, it is incumbent upon the agency to study the framework of the proposed Constitution.

Leones, Cimatu’s designated spokesman, said a copy of the draft Constitution fell on his lap only last week.

“I’ve just started reading it. Of course, because this is a proposed Constitution, it will definitely affect the environment and natural resources sector,” Leones, a

lawyer, added.

The official said last year, the DENR’s participation in the drafting of the proposed Constitution is limited to providing the body that reviewed the 1987 Constitution an accurate data about the Philippines in terms of land area, the classification of its land resources, forestland, wetlands, lakes and various mineral deposits.

With the draft of the proposed Constitution now officially in his hand, Leones said it is incumbent upon him to read it and submit a comprehensive report to Cimatu.

“Hopefully in the next few days, we will come up with a po-

sition paper for submission to Malacañang,” he added.

Leones said it is important to study the proposed Federal Constitution as it may change the way the country’s environment and natural resources are managed, especially in terms of natural resource exploitation.

“As far as what I’ve heard in the news about it, under the proposed Constitution, the federal law will reign supreme over the individual state’s laws,” he said. But then again, he said it is prudent to study the proposed Constitution’s implication to existing laws, including the Philippines’s international commitments, such as treaties signed

under the 1987 Constitution.

He said he also expects the DENR chief to call for an Executive Committee meeting to tackle the proposed Federal Constitution soon.

“If you ask me, if it will bring about peace and development say, in the case of the BBL [Bangsamora Basic Law], if it will lead to peace and development, it is okay to give the management of the natural resources to Mindanao,” Leones added.

In the case of the proposed Federal Constitution, he said there is still a need to study its potential impact, especially in the case of mining, quarrying or any natural resources exploitation.

A4 Monday, July 23, 2018 • Editor: Vittorio V. Vitug

Economy BusinessMirror

www.businessmirror.com.ph

Govt seeks Israel’s help to spur innovation in PHL

By Elijah Felice E. Rosales

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@alyasjah

anila is seeking the assistance of Israel’s innovation agency to implement an industrial strategy program that aims to develop local industries in the Philippines.

A document obtained by the BusinessMirror from a Geneva trade official revealed that the Philippines requested the help of Israel to implement the Inclusive Innovation Industrial Strategy (i3S). The i3S is the Philippines’s program aimed at accelerating the development of manufacturing, agriculture and services sectors

to improve their linkages in the domestic and global value chains.

“The Philippines recognizes the Israel Innovation Authority (IIA), which encourages both local and foreign investments by offering a wide range of incentives and benefits to investors in industry, tourism and real estate,” the document read.

“We would appreciate receiving more information on the functioning of this institution and explore possible collaborations with Israel as the Philippines also develops an innovation ecosystem through our government’s i3s,” it added.

On its web site, IIA said its role is to nurture and develop Israeli innovation resources, while creating and strengthening the infrastructure and framework needed to support the entire knowledge industry. The IIA advises and the Knesset regarding innovation policy in Israel.

“With deep knowledge and understanding of the unique challenges facing the Israeli companies and entrepreneurs, the tools and programs offered by the Authority are based on the specific stage and needs of the company,” the IIA said.

Workers assemble electronic products at a factory in Laguna in this file photo. The Philippine government has sought the help of Israel’s innovation agency to develop local industries. NONIE REYES

“This includes prog r a m s for early stage entrepreneurs, mature companies developing new products or manufacturing processes, academic groups seek ing to transfer their ideas to the market, mu lt inat iona l corpora-

tions interested in Israeli technology, Israeli companies seeking new markets abroad, and traditional factories and plants seeking to incorporate innovative and advanced manufacturing into their businesses,” it added.

Manila also inquired about Tel Aviv’s incentives for foreign investors. Trade Secretary Ramon M. Lopez said a number of Philippine firms are keen on expanding operations in Israel.

Lopez told the BusinessMirror firms belonging to the food and agricultural technology industries requested the Philippine delegation to the World Trade Organization to inquire about Israel’s investment perks. Apart from this, some electronic, information technology and equipment and machinery en-

terprises are also determined to invest in Israel.

“The query was made based on requests from some Filipino companies,” Lopez said.

Bilateral trade between the Philippines and Israel expanded in recent years. The value of goods exported by the Philippines to Israel grew by 23.6 percent in 2016 to $57.14 million, from $46.23 million in 2015.

This was largely due to the increase in shipments of semiconductors, fish fillets and polypropylene.

Philippine imports from Israel rose by 27.32 percent to $132.4 million in 2016, from $103.99 million in 2015. The Philippines imports tanks and other armored fighting vehicles, semiconductors and materials for the manufacture of dice from Israel.

‘Rollout of key energy projects to boost power supply in PHL’

By Lenie Lectura

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@llectura

he Department of Energy (DOE) is pushing for the implementation and timely completion of key energy projects to ensure reliable, stable, sustainable and secure energy supply in the Philippines.

In a report prepared by the agency for President Duterte, who will deliver his third State of the Nation Address (SONA) on Monday, the DOE identified six plans and programs that are up for implementation.

First on the DOE’s list is the attainment of 100 percent household electrification by 2022 or even earlier, if possible. The Total Electrification Program will cover the removal of challenges in providing electricity to communities in the country.

Earlier, Energy Secretary Alfonso G. Cusi said the government would not hesitate to take over the unserved areas tasked to be energized to distribution utilities.

President Duterte earlier instructed the DOE to initiate “ bold ” executive actions to allow the entry of the private sector so that the consumers can have access to adequate and affordable electricity that will redound to more economic and social benefits.

The agency is also banking on the expected operation of power generation capacities totaling 7,466 megawatts (MW) from 2018 to 2022. To ensure the timely implementation of these power projects, the DOE will decide which energy projects would be classified as “projects of national significance” under Executive Order (EO) 30.

“EO 30 ensures the efficient and effective implementation of energy projects classified to be of national significance,” the

DOE said in its report.

So far, the DOE has declared the Mindanao-Visayas Interconnection Project (MVIP) as project of national significance.

The P52-billion MVIP project is in support of the government’s vision to interconnect the major grids into a single national grid which is expected to help improve the overall power supply security in the country as sharing of reserves will already become possible.

The completion of the MVIP and the planned Batangas liquefied natural gas (LNG) hub project are two big-ticket priority projects that the DOE intends to see completed soon.

“The MVIP is seen to improve overall power supply security through sharing of reserves and allow optimization of available resources,” while the LNG project “covers LNG supply, storage units, regasification plants, distribution facilities and a modular 200-MW power plant.”

Fourth on the DOE’s list is the oil field discovery in Alegria, Cebu, which has a commercial quantity of 28 million barrels of oil and 9.42 billion cubic feet of natural gas. The natural gas and oil production of the oil field may last until 2037.

The agency also wants to see its flagship projects enumerated in the 2017-2022 Public Investment Program.

This includes the rehabilitation of all Agus-Pulangi hydroelectric plants, Agus 6 unit 4 major rehabilitation and Pulangi 4 HEP selective dredging project.

Last on the DOE’s list is the proposed unbundling of petroleum product prices.

The draft policy enables the unbundling of the base prices of petroleum products, namely, gasoline, automotive and industrial diesel, kerosene, jet fuel, bunker fuel oil and household and automotive liquefied petroleum gas.

This is the first time that the government, through the DOE, will require oil companies to make public the breakdown of the costs that go into the pricing of fuel.

www.businessmirror.com.ph • Editor: Angel R. Calso

The World BusinessMirror

Monday, July 23, 2018

A5

Global growth faces increasing threats

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lobal economic growth is less synchronized and faces increasing threats, including from trade tensions, according to a draft statement from the Group of 20 (G-20) leading economies obtained by Bloomberg News.

“Downside risks over the short and medium term have increased,” said the document. A final version of the statement will be published on Sunday.

Among the other risks to global growth, the text cites “rising financial vulnerabilities, height-

ened trade and geopolitical tensions, global imbalances, inequality.” The G-20’s March statement didn’t exclusively mention trade tensions.

While emerging markets are better prepared, they still face market volatility and possible

capital outflows, the draft says.

The finance ministers and central bank chiefs of the 20 largest economies have been meeting in the Argentine capital this weekend. Trade and currency issues have dominated the encounter after US President Donald J. Trump on Friday accused the European Union and China of weakening their currencies to obtain trade benefits.

Meanwhile, global economic leaders are pushing back against Trump’s latest rants on global trade and currencies, speaking out against higher tariffs while backing central bank independence.

Officials from Germany to Japan and South Africa at the Group of 20 meeting of finance ministers in Buenos Aires rejected Trump’s unilateral stance, while

working to build consensus on a final communique that would avoid upsetting Washing ton.

G-20 members traditionally cap their meetings with a communique that summarizes key policy recommendations.

The US president’s fiery rhetoric is more than just a threat and has begun to impact the real economy, said South African Reserve Bank Deputy Governor Daniel Mminele.

“The mere talking about it, the ratcheting up of the rhetoric does affect confidence, does create uncertainty, and will already have influenced behavior even before the first shot was fired,” Mminele said in an interview in Buenos Aires.

Trade war

Trump on Friday threatened to

deepen the trade war with China by slapping tariffs on just about all of its exports to America, while blasting currency policies in China and Europe and criticizing monetary policy at home. Treasury yields on Friday climbed the most since May following the president’s remarks, and the dollar weakened the most since March.

Speaking to reporters on the sideline of the summit, US Treasury Secretary Steven Mnuchin elaborated on the president’s remarks, saying Trump fully supports Federal Reserve independence and isn’t trying to interfere in foreign-exchange markets.

But Germany’s Finance Minister Olaf Scholz was categorical in rejecting Trump’s claims that Europeans game their currency.

“The European Union carries out very rational policies, which are not geared at artificially creating economic successes through currency levels,” he told reporters.

And Bank of Japan Governor Haruhiko Kuroda didn’t share Trump’s frustration with rising US interest rates and a stronger dollar, saying they reflect a solid economy.

“For the US economy and the global economy, that is not a negative,” he said.

Indeed, allowing the Fed to pursue its own monetary policy is essential, said Christine Lagarde, head of the International Monetary Fund.

“Independence is key,” Lagarde told reporters in Buenos Aires. “We always value the independence of central banks.” Bloomberg News

Xi Jinping visits Africa as US interest wanes

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AKAR, Senegal—Chinese President Xi Jinping arrived in Africa on Saturday on a four-nation visit seeking deeper military and economic ties while his rival in a bitter trade war, the Trump administration, shows little interest in the world’s second most populous continent.

This is Xi’s first trip abroad since he was appointed to a second term in March with term limits removed, allowing him to rule for as long as he wants.

That rang familiar to some of Africa’s long-entrenched leaders.

China is already Africa’s largest trading partner, and it opened its first military base on the continent last year in the Horn of Africa nation of Djibouti, which this month launched a China-backed free trade zone it calls the largest in Africa. After surpassing the US in arms sales to Africa in recent years, China this month hosted dozens of African military officials for the first

China-Africa defense forum.

Xi is stopping in Senegal and then Rwanda ahead of his participation in a summit of the BRICS emerging economies in South Africa that starts on Wednesday.

The summit comes amid the United States’s billion-dollar trade war with China and tough trade negotiations with other key economic partners. Last month the foreign ministers of BRICS members Brazil, Russia, India, China and

South Africa criticized what they called a “new wave of protectionism,” saying US measures undermine global trade and economic growth.

Xi’s Africa visit also highlights China’s sweeping “Belt and Road” initiative that envisages linking Beijing to Africa, Europe and other parts of Asia via a network of ports, railways, power plants and economic zones.

While such high-profile projects bring badly needed infrastructure and

generate economic growth, US officials and others have warned that African nations are putting themselves into debt to China. Its government, banks and contractors loaned more than $94 billion to African governments and state-owned companies from 2000 to 2015, according to the China Africa Research Initiative at Johns Hopkins University.

“Public debt in the median sub-Saharan African country rose from 34 percent of GDP in 2013 to an estimated 53

percent in 2017,” says a report in January

by Wenjie Chen and Roger Nord of the International Monetary Fund.

From oil in countries like Nigeria and Angola to rare minerals in Congo, Africa’s natural resources are a major draw for China’s economy, the world’s second largest behind the US. China’s voracious appetite for resources such as timber and ivory, however, has taken its toll on Africa’s environment, often with the help of corrupt local officials. AP

QUILLS2018 A BusinessMirror Special Feature

A6 Monday, July 23, 2018

www.businessmirror.com.ph

PHILIPPINE QUILLS 2018 AWARDS TOP BUSINESS COMMMUNICATORS

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By Leony R. Garcia

HE adage “The pen is mightier than the sword” may be a cliché. Yet, it still holds true in these days and age.

These words were first written by novelist and playwright Edward Bulwer-Lytton in 1839, in his historical play Cardinal Richelieu. The cardinal was chief minister to King Louis XIII and he discovered a plot to kill him.

But as a priest he is unable to take up arms against his enemies and resorted to writing.

Likewise, our own national hero, Dr. Jose Rizal, picked up the most unusual weapons -- a pen and paper – in his clash with the abusive Spanish ruler of his time. And the rest is history.

To humans, words are more than a means of communication, they can shape our beliefs, behaviour, feelings and ultimately our actions. Although swords can coerce us, and threaten, nothing is more powerful than a tool which can shape our opinions.

When it comes to language and communication, the rule is that it’s not what you say, but what people hear (and see!) Dr. Frank Luntz, author of Words That Work: It’s not What You Say, It’s What People Hear describes the decision making process and communication based on feeling rather than information.

“Eighty percent of our life is emotion, and only 20 percent is intellect. I am much more interested in how you feel than how you think. I can change

how you think, but how you feel is something deeper and stronger, and it's something that's inside you. How you think is on the outside, how you feel is on the inside, so that's what I need to understand,” the American pollster and linguistics consultant said in an interview.

The Philippine Quill

THE Philippine Quill, the country’s most prestigious awards program in the field of business communication, believe in the power of words. Using the golden feather in its logo symbolizing a quill writing pen, the program has given its seal of approval to the most reputable organizations and corporations in the nation for over 16 years, emphasizing the excellent use of communication to achieve business goals and make a difference in the society.

A yearly undertaking by the International Association of Business Communicators (IABC) Philippines, the Philippine Quill, along with Philippine Student Quill and CEO Excel Award programs, honor exceptional communication work by organizations, students and business leaders, respectively, that are worth emulating.

Established in 1983, IABC Philippines is the national professional as-

sociation of top business, industrial and organizational communicators.

IABC is a San Francisco-based professional network and global membership association and with thousands of members from around the world, representing many Global Fortune 500 companies. IABC serves professionals in the field of business communication by bringing together the profession’s collective disciplines.

The Philippines is the very first chapter outside of North America, with a mission to advocate for professional growth, learning and communication excellence.

IABC is celebrating its 35th year in 2018 and continues to uphold excellence in business communication through master classes and other learning activities that equip its member-professionals with trends and global-standard communication skills and strategies.

Joe Zaldarriaga, IABC President, stated that the mission of the IABC is to support the community of business communication professionals with innovative thinking, shared best practices, in-depth learning and career guidance.

Meralco, DDB Group Philippines as Agency of the Year, and the University of Santo Tomas are 2018 Quills big winners The 16th Philippine Quill and 6th Student Quill Awards celebrate wins for Meralco as Company of the Year for the third straight year in a row, DDB Group Philippines as Agency of the Year, and the University of Santo Tomas as School of the Year as these organizations earned the most number of excellence awards, which also saw record submissions from professional and student levels. Meralco, the Philippines’ biggest electricity distribution utility, made history once again when it won the Company of the Year award for the third year in a row, a first in the awards show’s 16-year history- a tes-

tament to the company’s strength in business communication excellence.

In total, Meralco has won the award four times since 2012.

In the Company of the Year category, Jollibee Foods Corporation was honored as first runner-up, while Aboitiz Equity Ventures, Inc. placed second-runner-up. And in the Agency of the Year, Ogilvy and Mather was hailed as first runner-up and Stratworks finished as second runner-up.

The Aboitiz Group bagged the coveted Top Award in Communication Management for its “Let’s drive change for a better world: The Aboitiz No Impact Challenge” that fused together employee engagement through an organizational sustainability campaign.

Ayala Land’s entry, Corporate Video 2017 “Reshaping with Ayala Land” bagged the Top Award in Communication Skills.

Corporate Video 2017 “Reshaping with Ayala Land” aims to show how Ayala Land continues to reshape and elevate the quality of life of Filipinos across the country through testimonials of people from various walks of life. By sharing real stories of people whose lives have been touched

by Ayala Land, it showed the role that the company plays in nation building and how it provides opportunities and venues where one can have an enriched quality of life.

This year’s theme for Quill 2018 is “Purpose in Communication.”

“IABC Philippines has adapted the theme, Purpose in Communication, for the Philippine Quill Awards to remind ourselves of why we communicate, which is to enlighten, inform, and inspire people and to help forge a society that knows how to think for itself”, IABC Chairman, Kane Errol Choa on his welcome remarks.

The Philippine Quill Awards and the Philippine Student Quill Awards were held separately at the Grand Ballroom of the Marriott Hotel at Newport City.

In the School of the Year race, De La Salle-College of St. Benilde placed first runner-up, while UST Angelicum

College made it as second runner-up.

The Philippine Student Quill Top Award in Communication Management went to Bataan Peninsula State University for “Project Litratu: Mayhang Pamana Bilang nga Mayhang Pilipinu (Isang Pamana Bilang Isang Pilipino)”, while the Top Award in Communication Skills was conferred to De La Salle- College of Saint Benilde for “Turtle Shells”.

"Our role as communicators is to move hearts and minds, ultimately inspiring action. We connect people and ideas, using concepts born out of creativity and innovation. Awardwinning work, like the ones we honor at the Quills, should also inspire others to reach for excellence. Most importantly, let's use the privilege that we have to benefit the many, especially those who are at a disadvantage”,

16th Philippine Student Quill Chair, Dave Devilles said in his speech.

The UP Street Dance Club provided entertainment together with graffiti artist, Enzo Ordonez, who gave life to this year’s theme, “Purpose in Communication: Express Your Truth”.

The 16th Quills program was supported by sponsors (GOLD) Megaworld Corporation and Security Bank Corporation, (SILVER) Bank of the Philippine Islands, San Miguel Brewery and Smart Communications, (BRONZE) Aboitiz Equity Ventures, Inc., ABS-CBN Corporation, Bayad Center, Japan Tobacco International, Land Bank of the Philippines, LBC Express, One Meralco Foundation, Petron Corporation, San Miguel Purefoods Company, and The EON Group, and (Top Student Category) Cemex.

Green Monday BusinessMirror

A8 Monday, July 23, 2018 • Editor: Lyn Resurreccion

Land degradation: The largest environmental issue of our time

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By Nalisha Kalideen

How is land degradation caused, and what are the dangers?

Land degradation is kind of at the overlap of many contemporary concerns. For instance, a very long proportion of the current drivers of climate change come out of things that are related to land degradation.

About one-third of current climate change relates to processes of land degradation—either deforestation or decrease in soil carbon for agriculture and other similar processes.

Climate change has a reverse effect on land degradation—as the climate changes, the ecosystems that were in a particular place can no longer exist there.

In the transition period while ecosystems try to sort everything out, those ecosystems lose their ability to supply the things on which we come to rely.

The current major driver of biodiversity loss is the loss of habitat, and loss of habitat is directly related to land degradation. From the human side, these direct impacts come through the supply of food.

The result of a lot of this is that, for people who depend on ecosystems for their livelihoods, their livelihoods are undermined. So those people are either worse off or are forced to move off the land and into other people’s territories and that leads to problems of conflict.

What were some of the more concerning or surprising findings in the Ipbes assessment?

This is quite likely the single environmental issue within the world today that affects the largest number of people.

There are many environmental issues that are going to have a big effect as the century unfolds—

Soil degradation, climate change, heavy tropical monsoonal rain and pests are some of the challenges the young farmers face. Soil degradation will impact two-thirds of humanity, who will be food-insecure, while societies are left with a heightened risk of instability. IPS

things like climate change and biodiversity loss—and there are many environmental issues that affect limited populations, like air pollution.

But when you look over the entire world, about two people out of every five are directly materially impacted by land degradation.

What are some of the challenges around acting on land degradation? And what action(s) should governments take to overcome such challenges?

The biggest single constraining factor is the fragmentation of land issues across many authorities….

This is costing us, in terms of lost production and risks, billions and billions of dollars. But it’s not obvious to anyone because no one sees the full picture.

I think you need to attack the problem of integration between authorities at multiple levels.

First, the kind of management we do on the land physically has to move to what we call landscape-scale management. In other words, you don’t look at all the little bits individually, you actually look across the landscape and then you fit the bits into it.

W hen you get a level up, which is national management, it’s probably better that we do this by arranging for more than communication but coordination between the various agencies, which have partial responsibility.

We also need coordination at

the international level because, although land degradation has its primary impact on the local level, many of the drivers of the causes of it have international manifestations.

So you can’t solve it purely at the local level—you have to have a national level, which sets in place the right policies, and you need an international level to ensure, for instance, that global trade does not take place in such a way that it drives land degradation.

Is it a matter of achieving landdegradation neutrality or do people need to make a shift in lifestyle?

Those two things are not mutually exclusive.

We do need to achieve landdegradation neutrality, which is basically equivalent to saying that you are halting the decline. The only way to achieve that in the long term is to alter many of our lifestyle impacts because it is those that are ultimately driving the increasing

What is your message to the international community to act on this issue?

I am concerned that not enough is being done.

There’s a distribution of responsibility—you can’t solve this all at the international level nor all at the local level. It requires really strong action at all of those levels.

If you think of the Rio Conventions—the three conventions, including the Climate Change Convention, the Biodiversity Convention and the one related to land degradation, which was specifically around dry land degradation—the climate convention has moved forward with some groundbreaking international collaborative agreements.

Biodiversity is sort of moving forward but perhaps not as fast, and the convention on desertification hasn’t gone anywhere at all. The question is why?

Partly, because up until now, this has not been seen as a critically important issue. (It is an) ‘it affects far away people; it doesn’t affect us’ kind of issue.

What we point out is that both the causes and the consequences ultimately end up being international, so it does affect everyone.

It’s a key driver of both the biodiversity loss and climate change, and that’s one of the reasons we have to raise its profile and address it sooner rather than later.

Other ambitions like many of the Sustainable Development Goals will not be possible unless we sort this one out, too. IPS

About one-third of current climate change relates to processes of land degradation— either deforestation or decrease in soil carbon for agriculture and other similar processes.”

—Scholes

Real-estate firm surpasses carbon-reduction targets

R

Dawn flight

Future of PHL Rise discussed after proclamation

degradation of the land.

Land-degradation neutrality is the strategy we would take, but it has to be underpinned by these bigger scale changes in the demands that we put on ecosystems.

NITED NATIONS—Land degradation caused by human activities is occurring at an alarming rate across the world, and the cost will be steep if no action is taken.

In recent years, environmental groups have been sounding the alarm on land degradation while stories of the human impact on the environment have inundated twitter feeds and development news—and with good reason.

This year the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Service (Ipbes) produced the world’s first comprehensive, evidence-based assessment highlighting the dangers and far-reaching impacts of land degradation.

The United Nations-backed study found that land degradation has reached “critical” levels across the world as 75 percent of land is already degraded, and projections show that such degradation will increase to over 90 percent by 2050.

Since then, more reports have poured in highlighting concerns over the issue.

Most recent, the Joint Research Centre at the European Commission created a “World Atlas of Desertification” and found that an area half the size of the European Union is degraded every year by farming, city expansion and deforestation. Before that, the United Nation Convention to Combat Desertification reported that the global economy would lose a staggering $23 trillion by 2050 because of land degradation.

Not only will it affect economies, but the phenomenon will impact two-thirds of humanity, who will be food-insecure, while societies are left with a heightened risk of instability.

Inter Press Service spoke to Robert Scholes, ecologist and cochairman of Ipbes’s assessment, about land degradation and efforts needed to halt and reverse the catastrophe.

www.businessmirror.com.ph

A fleet of wild geese fly over Bannawag Norte, Santiago City, at the break of dawn, silhouetted by the early morning sun. Wild geese are known to fly in flocks instinctively following a leader. CEASAR M. PERANTE

eal-estate professional services and investment management firm JLL announced that it has exceeded its goals for carbon-emission reductions within its corporate offices and is well on its way toward achieving a Science Based Target by 2020.

Based on the Global Sustainability Report released recently, JLL scored impressive numbers as it stepped up sustainability efforts within its own offices and its work with clients.

Reductions achieved by JLL on a per corporate office employee basis included a drop in building-related greenhousegas emissions by 15 percent (against a target of 10 percent), building-related energy consumption by 12 percent (target of 10 percent) and rented area by 10 percent (target of 8 percent).

These gains were considered substantial as the United Nations estimates that real estate accounts for about 40 percent of the world’s energy consumption and a third of all carbon emissions.

“As one of the world’s largest commercial real-estate firms, we have a tremendous opportunity to address climate change head-on by creating sustainable workspaces, buildings and communities where everyone can thrive,” said Christian Ulbrich, JLL CEO. “We’re taking tangible action to deliver a more sustainable future for all of our stakeholders.”

After nine years of reporting its sustainability performance, JLL is now pushing to improve its environmental impact through its new program, Building a Better Tomorrow.

Its goals include transforming workplaces with sciencebased targets. This includes reducing building-related greenhouse-gas emissions and building-related energy consumption per corporate office until 2019. JLL’s significant cutback in carbon emissions complements its current push for more green building projects from real-estate developers.

JLL Philippines’s Country Head Christophe Vicic said the ultimate vision is for industries not to have to think twice about going green and concentrate, instead, on how green their buildings will be.

At the recent forum on the future of Philippine Rise, (from left) Ambassador Claro Suarez Cristobal, director general of the Foreign Service Institute of the Department of Foreign Affairs, and Atty. Gloria Estenzo Ramos, Oceana Philippines vice president, hand over the certificate of appreciation to Dr. Jay Batongbacal, director of the University of the Philippines Institute for Maritime Affairs and Law of the Sea, one of the resource speakers during the discussion.

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resident Duterte’s recent declaration of Philippine Rise as a protected area is only the start of a long journey, said Atty. Gloria Estenzo Ramos, vice president of the Oceana Philippines.

Duterte’s proclamation brings forth loads of responsibilities to both the community and government, ensuring its effective implementation and securing Philippine Rise as part of the country’s national territory, Ramos said.

In a recent roundtable, “After Philippine Rise Proclamation: What’s Next?” the Department of Foreign Affairs’s Foreign Service Institute and Oceana Philippines gathered representatives of agencies and members of academe and stakeholders to discuss future plans to sustain and further strengthen the protection of the Philippine Rise, including the pristine Benham Bank.

Dr. Jay Batongbacal, director of University of the Philippines (UP) Institute for Maritime Affairs and Law of the Sea, expressed his alarm about the lack of security around Philippine Rise, which should be subjected to surveillance.

“The Philippines should be on guard to ensure that, even if other countries have military troops, we won’t back out,” he said.

“We should also assert our right and honor to name features in the Philippine Rise, but sad to say we failed to stop a country from doing that.”

Dr. Hildie Maria Nacorda, assistant professor of the School of Environmental Science and Management from UP Los Baños, cited some research proposals for the conservation of Philippine Rise, such as taxonomic analysis of collected samples, comparison of results with other North Philippine Sea reef areas, integration with oceanographic, plankton, productivity data and expedition to start up field experiments in the Northern Philippine Sea. The need to boost food-security measures and develop new fishing grounds for fish sufficiency was also pointed out. Bureau of Fisheries and Aquatic Resources Assistant Director Sammy Malvas proposed ways to secure food sufficiency and biodiversity conservation in the country; continue fisheries development efforts in the Philippine Rise (Payao Development, Livelihood Support for fishers, among others); strengthen collaboration among government agencies, academe and civil-service groups; and expand research and conduct more oceanographic surveys.

Desiree Eve Maaño, section chief of Coastal and Marine Ecosystems of the Department of Environment and Natural Resources Biodiversity Management Bureau, noted that preliminary meetings have been conducted with other agencies to prepare for the crafting of the management plan for the Philippine Rise Marine Resource Reserve.

She mentioned that the management plan and the composition of the Protected Area Management Board would depend on the provisions of the Expanded National Integrated Protected Areas System Act, which was recently signed by Duterte.

Ramos underlined the need for “strong collaboration for the protection and conservation of the Philippine Rise,” and to restore and conserve the health, richness and abundance of the other marine areas in the country.

FSI Director General Claro Suarez Cristobal emphasized that cooperation between and among agencies and stakeholders is key in the protection and preservation of the Philippine Rise. The cooperation in the domestic sphere serves as the basis of how the Philippine government will pursue its interests in the international community.

Biodiversity Monday BusinessMirror

Asean Champions of Biodiversity Media Category 2014

Monday, July 23, 2018

Editor: Lyn Resurreccion • www.businessmirror.com.ph

A9

Mindoro: A treasured island

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By Jonathan L. Mayuga

@jonlmayuga

reasured island.” This aptly describes Mindoro island. It is also an apt title of a coffee-table book launched by the Mindoro Biodiversity Conservation Foundation Inc. (MBCFI) on the 10th founding anniversary in Puerto Galera, Oriental Mindoro, on July 13.

The treasure, as far as biodiversity conservation advocates are concerned, is the tremendous biological diversity of Mindoro Island, which is comprised of the provinces of Occidental Mindoro and Oriental Mindoro in the Southwestern Tagalog region that is composed Mindoro, Marinduque, Romblon and Palawan provinces, popularly known as Mimaropa.

Mindoro is a separate biogeographical region from the Philippines, which explains its good number of endemic plant and animal species that are nowhere else to be found in the world.

Newly recorded, discovered species

The celebration saw MBCFI, led by Executive Director Grace Diamante, turning over to the Department of Environment and Natural Resources (DENR) one newly discovered plant species, and a total of eight newly recorded species in the island.

A member of the International Union for Conservation of Nature, the largest and the most diverse environmental network worldwide, the MBCFI has been working handin-hand with the DENR and the scientific community to formulate policies in support of biodiversity conservation.

The species were discovered in some of Mindoro’s known key biodiversity areas—including the famous Mounts Iglit and Baco, the home of the Philippine tamaraw, also known as the Mindoro dwarf buffalo—in Mount Calavite, Naujan Lake National Park, a Ramsar site, and in Apo Reef National Park between 2013 and 2018 by MBCFI experts.

They were verified and published in scientific journals.

The newly discovered species, the Cynanchum malampayae, a new species of flowering plant, was named after the Malampaya Joint Venture Partners, which provides core-funding support to the foundation.

The species was discovered in 2013 on Ilin Island in San Jose, Occidental Mindoro.

Migratory birds, bats

ON the other hand, the newly recorded species include four migratory birds and four bats.

The migratory birds are the redbilled starling, recorded in March 2017 during the survey for marine and terrestrial species for the updating of biodiversity information in Apo Reef Natural Park in Occidental Mindoro; the streaked shearwater, that was recorded in February 2018 during the Asian Waterbird Census also in Apo Reef Natural Park.

The Eurasian wigeon was recorded in January 2018 during the Asian Waterbird Census in Naujan Lake National Park in Oriental Mindoro; and the garganey, recorded in January 2018 also during the Asian Waterbird Census in Naujan Lake.

The bat species include the Murina aenea that was recorded during a survey in June and July 2017 in Mounts Iglit-Baco National Park in Occidental Mindoro.

The three other bat species that were recorded during a research on Mount Calavite Wildlife Sanctuary also in Occidental Mindoro in 2013 are Myotis muricola, Kerivoula hardwickii and Hipposederus pygmaeus.

In 2015 the MBCFI revealed that it was able to record 18 new species in Mindoro, including birds, bats and snakes.

Eurasian Wigeon

Murina aenea

Newly discovered plant Cynanchum malampayae

Garganey

Myotis muricola

Kerivoula hardwickii Red-billed Starling

Streaked shearwater

The discovery and documentation of unique wildlife species indicate the presence of a healthy and vibrant ecosystem, which also means higher ecosystem productivity in Mindoro.”—Adornado It was only recently that the MBCFI was able to verify the newly discovered plant species and eight newly recorded bird and bat species, said Kathy Lene S. Cielo, MBCFI’s Conservation Awareness Raising and Education (CARE) program manager.

“The global population of some of the newly discovered migratory birds in Mindoro is on the decline,” Cielo told the BusinessMirror in a telephone interview on July 16.

It should give the Philippines more reasons to protect them and their habitats or wintering areas like the Apo Reef National Park and the Naujan Lake National Park, she added.

said: “Mindoro Island is considered as one of the global biodiversity priority conservation areas in terms of the number of endemic species, diversity of habitation and degrees of threats to wildlife [it has].”

She said that in launching the coffee table book Treasured Island, they hope to boost the effort in raising awareness and care on Mindoro’s beauty and splendor. “[The book] showcases a collection of photos highlighting 11 priority sites of the foundation, the biologically significant species as well as the eight Mangyan tribes on the island,” she said.

Priority conservation area

Healthy, vibrant ecosystem

In a statement on July 13 during the turnover of the newly discovered and newly recorded species, Diamante

Meanwhile, DENR Mimaropa Region Director Henry Adornado lauded the MBCFI in launching

its newly discovered and newly recorded species in Mindoro.

“The discovery and documentation of unique wildlife species indicate the presence of a healthy and vibrant ecosystem, which also means higher ecosystem productivity in Mindoro,” Adornado told the BusinessMirror in a text message on July 16.

“While environment programs are already in place to maintain the province’s rich biological diversity, new policies may be crafted to ensure protection and conservation of these species and their habitat,” he added.

He said the MBCFI works closely with the DENR’s field office in Mindoro, which include the Provincial Environment and Natural Resource Office, Community Environment and Natural Resource Office, Protected Area Superintendents to survey forestlands and uncover new elements of biodiversity.

“This collaboration provides us information that is valuable for future studies that would determine the species’ importance in Mindoro and to the entire country,” Adornado, a former director of the Ecosystems Research and D e ve lo pme nt Bu re au of t he

Hipposederus pygmaeus Photos from Mindoro Biodiversity Conservation Foundation Inc.

DENR, added.

Island endemics

Sought for reaction, DENR‘s Wildlife Resources Division chief Josefina de Leon said the discovery and recording of new species in Mindoro reaffirm the global recognition that the Philippines is a biodiversity mega-diverse country.

“It also indicates that the country still has suitable habitats for varied forms of life, and the evolution of species that can adapt to changing environmental and climatic conditions, as well as the need for continuous biological assessments,” de Leon told the BusinessMirror in a telephone interview on July 15.

“It further rationalizes the need to protect the island of Mindoro and its endemic species,” she said.

She explained that island-endemic species occurs only on the particular island. “Thus, if gone, the species becomes globally extinct.”

She said that while it is easier to protect smaller islands, resourcewise, it poses a bigger challenge, especially in times of natural calamities and during the occurrence of animal diseases that could wipe out a wildlife population.

2 new plant species discovered in Vietnam protected area Manila Water joins

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wo new species of tea plants were recently discovered by scientists and academicians of Da Lat University in Vũ Quang National Park in the province of Hà Tĩnh, Vietnam.

The discovered species are Camellia vuquangensis , a 3 meterto 4 meter-high shrub with narrow light-purple leaves; and Camellia hatinhensis, a 4 meter- to 6 meterhigh shrub with hairy shoots and oval leaves. Both species bear yellow flowers. “ The discover y of two new species of tea plants in Vũ Quang National Park in the province of Hà Tĩnh, Vietnam, joins the multitude of reasons the establishment of protected areas is important,” said Executive Director Dr. Theresa Mundita S. Lim of the Asean Centre for Biodiversity (ACB).

“Being situated in a protected area ensures the protection of these new species from overexploitation and unsustainable use,” Lim added.

“The number of species awaiting discovery far outweighs those that have been studied. Millions of plants and animals have yet to be studied and may hold tremendous potential as sources of food, medicine and other benefits. The center would like to congratulate Vietnam on this very good news. ”

Camellia vuquangensis found in Vũ Quang National Park. Viet Nam News

Strengthening protected area management for species protection

L i m emphasized the value of strengthening protected areas in the region and cited the outcomes of the recently held 22nd Meeting of the Subsidiary Body on Scientific, Technical, and Technological Advice (SBSTTA 22) of the Convention on Biological Diversity (CBD) in Montreal, Canada, which called for intensified management of protected areas.

This was also reflected in the A s e a n m e m b e r - s t a t e s’ (A M S ) statement in SBSTTA 22, which highlighted how far the region has gone in the attainment of Aichi Biodiversity Target 11.

The Aichi Target, which was formulated in Aichi, Japan, in October 2015, states that “by 2020 at least 17 percent of terrestrial and inland water, and 10 percent of coastal and marine areas, especially areas of particular importance for biodiversity and ecosystem services, are conserved through effectively and equitably managed, ecologically representative and well-connected systems of protected areas and other effective area-based conservation measures, and integrated into the wider landscapes and seascape.”

ACB, together with the AMS, is carr ying out biodiversity conservation efforts in protected areas through its Asean Heritage Parks (AHP) program.

AHPs are selected protected areas in the Asean region which are known for their unique biodiversity and ecosystems, wilderness and outstanding values; they were given the highest recognition because of their impor tance as conser vation areas.

The AHP program of ACB strengthens protected areas in the region through capacity- building a c t i v i t i e s fo r p a r k m a n a g e r s and stakeholders in the form of various learning events, such as trainings and workshops.

AHPs receive technical assistance from the AHP Secretariat and its network of partners.

Being an AHP also increases the park’s visibility as a prime ecotourism destination and model for effective protected area management. Participation of and collaboration among AHP stakeholders in the implementation of research and development programs and projects are also maximized and strengthened when a protected area is declared as an AHP. There are 40 declared AHPs, and this network of biologically rich protected areas continue to increase through the collective efforts of the AMS.

Day of Trees celebration

Volunteers and representatives from Manila Water plant indigenous trees at the La Mesa Arboretum Park to mark the recent Philippine Arbor Day.

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ast Zone water and used water concessionaire Manila Water participated in the recent commemoration of Philippine Arbor Day at the La Mesa Watershed Arboretum Park.

Led by Undersecretary and Chief of Staff Gen. Rodolfo C. Garcia, Manila Water Sustainabilit y leaders Florante Pan-

ga n iba n a nd R om a n Cor pu z joined Department of Environment and Natura l Resources (DENR) key officials in the planting of indigenous trees in the reservation area.

The Day of Trees was hosted

by DENR National Capital Region with the theme “Trees for Sustainable Cities.”

A10 Monday, July 23, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

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editorial

What is needed for more tourism?

I

f you are interested in an evaluation of your appearance, you should look in the mirror or ask friends for their opinion.

This comes from the Wall Street Journal on July 20, 2018: “The unrest began in April, with Nicaraguans protesting social security tax hikes.

But as police and paramilitaries attacked them with deadly force, the street marches swelled with outraged Nicaraguans.”

We know that money is a strong—perhaps the best—indication of commitment: “Put your money where your mouth is.” This is true whether you are starting a business or buying a movie ticket. We constantly talk about foreign investment as an indicator of confidence about the Philippines, and it is. But that is a substantial long-term commitment.

“As soon as the violence erupted, the tourists began to flee,” said Lucy Valenti, who heads the (Nicaraguan) tourism chamber. “I can’t even begin to predict how bad this is going to get.” In the past three months, this is how bad it has gotten.

“Tourists also have mostly stopped coming. One-third of the country’s hotels and restaurants have closed and about half, or 60,000 tourism jobs have been lost, according to the Nicaragua Chamber of Tourism. Tourism is Nicaragua’s top foreign exchange earner.” Travel and tourism’s direct contribution to Nicaragua’s economy is 6 percent of the gross domestic product.

These numbers are shocking. Of course, the closing of 30 percent of the country’s restaurants and hotels is not all related to tourism in the wake of the unrest. But the 60,000 tourism jobs lost is probably a consequence of tourists avoiding the country.

The Philippine tourism department has had problems over the years from its tourism slogans to duty-free designer handbags. As an aside, not a year passes without a tourism official being accused of corruption or major incompetence.

During the past decade, tourism—both domestic and foreign—has become increasingly more important to the Philippine economy. Spending on tourism has doubled since 2009 and foreign visitor arrivals have more than doubled. Tourism’s direct contribution to the gross domestic product is 8.7 percent and the indirect contribution is 20 percent, according to data from the World Travel and Tourism Council.

The spike in foreign arrivals in the Philippines is an indication of confidence, but it can change in a moment as indicated by the Nicaragua experience. However, the industry must constantly be looking to the future.

The Travel and Tourism Competitiveness Index for 2017 from the World Economic Forum placed the Philippines at 79th out of 136 countries. However, we are 22nd on “High Price Competitiveness.” But on “Efficiency of Ground Transport” we come in at a terrible 107th place, comparable to Algeria and worse than Ethiopia. Our “Air Transport Infrastructure” is in the middle, ranked 65th.

The report highlighted the problems not only with tourism infrastructure but the fact that we ranked a dismal 125th in the number of hotel rooms. The index showed that the Philippines is not friendly for investment in the tourism industry. For “Tourist service infrastructure” our ranking is 87th, behind Lao PDR. This correlates with our ranking at number 82 for “Business Environment,” the same as Uganda and Nigeria.

The success of the economy, no matter what sector or industr y we look at, keeps coming back to the same variable. The government must work harder to create a more favorable environment for investment.

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Part Two

T

his is the second part of the pastoral letter by Most Rev. Romulo Valles, DD, Archbishop of Davao and president of the Catholic Bishops’ Conference of the Philippines. Released on July 9, the letter is titled “CBCP Pastoral Exhortation: Rejoice and be glad!”

On the occasion of the President’s State of the Nation Address today, it would be good to consider the message of the CBCP alongside Duterte’s address to all Filipinos.

The archbishop said all of us are not new to insults and persecution. What we are going through is familiar, in reference to Psalm 64. The Lord told His disciples who were being persecuted in His name: Rejoice and be glad. This is the same phrase that Pope Francis

used in his apostolic exhortation Gaudete et Exsultate. These are words for those who are humiliated and persecuted in the name of their faith.

According to Pope Francis, the Lord does not want His people to get used to an ordinary life, that is why we are being called to live a life in holiness. According to Saint Paul, we have to bless those who insult us; and if we are being vilified, we should reply gently.

Expropriations in local PPPs

Jennifer A. Ng Vittorio V. Vitug

By Alberto Agra

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A letter of peace from the CBCP

Continued from A1

S

ame purpose as PPPs. Eminent domain and PPPs share the same objective, i.e., the public good, purpose and welfare. All local PPP projects, which are projects undertaken through the collaboration between an LGU and a PSP, must redound to benefit of the public.

Possible objects of expropriation for PPPs. An LGU monorail, socialized housing, bridge, road, expressway, fiber optic, realty redevelopment or expansion, power plant or sewerage project, may require the use of land which neither the LGU nor the PSP owns or has beneficial use over.

The LGU, if it so desires, may have to take the properties of others, if the owners are not willing to sell, so that the project may happen.

Show genuine necessity. The LGU must be able to establish the genuine necessity of the taking.

The regional trial court, at the first instance, must accept the indispensability of the property, i.e., no-project-if-no-expropriation-of-that-property.

LGU must be contractually bound. The exercise of this power must be incorporated in the PPP contract. This may be one of the post-award LGU obligations or conditions precedent, i.e., if the

According to Pope Francis, the Lord does not want His people to get used to an ordinary life, that is why we are being called to live a life in holiness. According to Saint Paul, we have to bless those who insult us; and if we are being vilified, we should reply gently.

The letter also talked about members of the faith who are not themselves united, or how we are to face “Christians” who don’t see anything wrong with the killings, those who simply laugh when God is being disrespected, and those who help in s preading fake news.

Jesus said that we can always expect opposition when we are in the work of spreading peace.

There will always be people who say that they believe in Christ but are easily swayed by the promises of Satan. Let us not forget him who betrayed Jesus for 30 pieces of silver because he allowed him-

An LGU monorail, socialized housing, bridge, road, expressway, fiber optic, realty redevelopment or expansion, power plant or sewerage project, may require the use of land which neither the LGU nor the PSP owns or has beneficial use over. The LGU, if it so desires, may have to take the properties of others, if the owners are not willing to sell, so that the project may happen.

LGU does not expropriate, there will be no project or no notice to proceed, unless there is a substitute obligation.

Is this allowed under PPP laws? Yes. Expropriating land, under the BOT law, may take the form of “cost sharing” since the LGU provides for access infrastructure or right-of-way or “direct government subsidy” since the LGU shoulders a portion of the project cost or contributes the expropriated property to the

self to be overcome by Satan. Saint Paul was right when he said that the differences are necessary to allow those who are genuine to come out.

The archbishop also talked about the suffering of the Church leaders, compared to the struggles of the poor. The struggle of the poor is indeed greater, he said.

He asked in his letter: Do we hear the cries of the poor residents of shanties who are jailed because of “loitering”? He called on all of us not to forget that the small alleyways in poor communities also serve as their kitchen, restroom, living room and play area for their children. Let us not also forget that they live in houses that burn easily because firefighters can’t get to them due to the narrow streets.

He asked: Do we not feel the suffering of drug addicts when they are labeled as criminals when their names land on the drug watch list?

We end here for now, but I wish to discuss the message further next week.

To be continued

project. In a joint venture under its PPP or JV ordinance, the LGU may contribute the expropriated property and on this basis, be entitled to a share in the revenues or profit. The template PPP ordinance of the Department of the Interior and Local Government categorically permits this when it provides that the LGU in a PPP may exercise police power, perform devolved powers and expropriate property.

Reimbursed or not. This option lies with the LGU. The PPP contract may provide that the LGU gets reimbursed or not by the PSP. If the LGU recovers what it compensates the private landowner, then the LGU only contributes the exercise of the power; if not, then the LGU contributes the exercise of the power and the consideration or purchase price, in which case, it has a greater share from the proceeds of the PPP. Under the first scenario, the counterpart obligation of the PSP is to pay the LGU. The LGU will normally place the funds in a trust/special account.

So, let us do it.

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Young, dumb, broke, yet safe and sound

CPD in the accountancy profession Angelina Alejandrino

DEBIT CREDIT

Siegfred Bueno Mison, Esq.

THE PATRIOT

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he song “Young Dumb & Broke” is a chill listening music especially for teenagers as the lyrics talk about love and commitment as experienced by high-school students. Written by a 19-year-old American singer named Khalid, the song topped the charts in the Philippines last year. Taken outside its context, the title of the song can, however, be demeaning. That’s why some people were dumbfounded when an inspirational speaker audaciously referred to a group of graduates as young, dumb and broke in his opening lines.

The graduates were obviously young—all millennials. But the speaker, a “millenior,” urged the graduates that, as they age, they should remain young at heart.

“After all,” the speaker said, “a youthful spirit has the bold and daring attitude to think that his body can do all things that his mind conceives.”

In the case of being dumb, the speaker said that everyone in the auditorium, including himself despite his professional achievements, were dumb, but not in the literal sense of the word. He said that all are dumb only to the extent that all of them would never know everything in life. Amazingly, an average human being only uses up to 30 percent of his brain capacity.

Thus, the speaker urged the graduates to keep on studying, reading, and asking the right questions to be “less dumb.”

The speaker then focused on the state of being broke. In American slang language, being broke usually connotes financial hardship.

But being broke or broken can also mean difficulties in many other areas, such as being heartbroken when a loved one decides to end the relationship or being intellectually broken when one fails a subject or an exam.

The speaker then told the young graduates, “when that time comes, they should neither look down in defeat or embarrassment nor look to their right or left and dare try to lay the blame on others.” Instead, the speaker encouraged the audience: “When you are broken, look up and say thank you God. Rejoice and be thankful for He allows these difficulties in our lives to make us better if not the best persons we could ever be.”

Author Brian Tracy once said to give thanks for all things, both good and bad, knowing that they lead us toward achieving something bigger and better. Just as the Bible tells us in Ecclesiastes 7:14, “When times are good, be happy; but when times are bad, consider: God has made the one as well as the other.”

My journey in faith has taught me that being broken is another form of blessing for it is His way to draw me closer to Him. And that is exactly the case of Lito De la Cruz, a 47-year-old messenger who has been with Philippine Airlines for more than 20 years. With four children, a sick wife who undergoes dialysis three times a week, and a salary of not more than P20,000, Lito has been living in a state of financial brokenness. Despite all these, he has never been absent from work, has yet to refuse a task given to him by his superiors and always finds odd jobs, usually to assist car mechanics, to augment his modest take home pay. He remains thankful to PAL for giving him a decent job and thankful to God for giving him the opportunity to help others.

In reference to the Bible, Romans 5:3-4 states, “...but we also glory in our sufferings, because we know that suffering produces perseverance; perseverance, character; and character, hope.” In the words of his superior, Lito “doesn’t show others his family issues and just continues with his tasks with a positive attitude.” Those around

When the speaker gave Lito the opportunity to speak before the same set of graduates, Lito simply told them to never lose hope.

Kapit lang! His heartfelt speech moved most of the graduates into tears and, at the same time, inspired them to face difficulties, now and in the future, with an eternally optimistic attitude.

Lito was recognized as one of two Individual Contributors of the Year during the PAL Star Awards a few months ago.

Lito think that his faith in God keeps him cheerful and focused on helping others. For me, Lito is the embodiment of what Stephen Hawking said, “However difficult life may seem, there is always something you can do and succeed at. Where there’s life, there’s hope”.

When the speaker gave Lito the opportunity to speak before the same set of graduates, Lito simply told them to never lose hope. Kapit lang!

His heartfelt speech moved most of the graduates into tears and, at the same time, inspired them to face difficulties, now and in the future, with an eternally optimistic attitude. Lito was recognized as one of two Individual Contributors of the Year during the PAL Star Awards a few months ago.

If Khalid’s 2017 song “Young Dumb & Broke” aptly describes graduates, the upbeat 2013 song “Safe and Sound” fittingly describes Lito—an antidote to the tendency of others to think of the worst in everything. The writers of the song “Safe and Sound” espouse the idea that things will always get better and that there are a lot of things to be positive about.

When inspirational author Rick Warren lost his son a few years back, he was broken. When his son Matthew took his own life, Rick Warren stopped preaching for four months and spent eight hours a day alone reading the Bible. In an interview after his son’s death, Rick said that people cannot handle pain or brokenness unless they understand there is a purpose. He said, “What you need in tragedy is not an explanation, you need the presence of God.” And His presence allows us to grieve with the comfort that everything will turn out fine. The unexpected death of Rick’s son resulted to shock. After the shock came the sorrow; then sorrow led to struggle.

But the struggle eventually led Rick to the stage of surrender to Him, which is always a good thing. Our brokenness compels us to seek His mantle of protection. And under it, we feel safe and sound.

The song “Safe and Sound ” starts with the lines—“I could lift you up. I could show you what you want to see and take you where you want to be. You could be my luck even if the sky is falling down I know that we’ll be safe and sound.”

I strongly believe that our Lord sends people like Lito to those young, dumb, and broke people, myself included, to make us feel safe and sound!

Monday, July 23, 2018 A11

G

lobalization has altered the landscape of markets and businesses. In keeping with the times, the Board of Accountancy (BOA) has instituted programs to align the accountancy profession with the demands of the ever-changing environment. These programs include the accreditation of Certified Public Accountants in academe, in commerce and industry, and in public practice; information campaigns to raise awareness about the Asean Mutual Recognition Arrangement and its impact on Philippine accountancy services; the revision of the curriculum in Accountancy education; and the reconfiguration of the country’s CPA licensure examinations. All these efforts aim to improve the competence and capabilities of the individual Filipino CPA and upgrade the accountancy profession as a whole.

Among the initiatives undertaken by the BOA, the most talked about seems to be the increase in Continuing Professional Development (CPD) requirements from 60 units in 2016 to 120 units by 2019 for a three-year period. Republic Act 10912 or the “Continuing Professional Development Act of 2016” requires professions registered with the Professional Regulation Commission (PRC) to comply with prescribed CPD units as a prerequisite to license renewal. However, of all the registered professions, accountancy

has the highest number of mandatory CPD units, a requirement almost triple that of professions with the second highest CPD prescription, to wit: interior design (below age 60), real-estate professionals (appraisers, consultants and brokers), with 45 CPD unit requirements.

CPD credits can be earned in various ways. It can be gained through any or a combination of the following: professional track (being a resource speaker, participant or facilitator in face-to-face or online trainings conducted by

accredited CPD providers); academic track (earning a postgraduate degree, being a professorial chair or researcher); self-directed trainings (participating in trainings organized by nonaccredited CPD providers, writing articles or technical papers); and by undergoing other activities as approved by the CPD council, BOA and PRC. The objective for implementing CPD requirements is to “promote and upgrade the practice of professions in the country… [to] continuously improve the competence of professionals in accordance with international standards of practice...” (Section 2 of RA 10912). While the purpose is noble, many CPAs, especially individual practitioners, teachers and ordinary employees, challenge the practicality and reasonableness of the extensive CPD requirements imposed on CPAs. They contend that although the trainings are sometimes useful, they are too tedious and often impractical, costly, redundant and time-consuming. Accessibility for those in the rural areas (logistical and otherwise) is another issue.

Despite the availability of alternatives for earning CPD credits, many still do not have the means to avail themselves of these options. There is the problem on the lack of reliable Internet access, the lack of resources to pursue higher learning and the lack time and skill to do research work.

The complaints of unhappy professionals were heeded by a group of lawmakers, prompting them to file the proposed House Bill 7171, which aims to repeal RA 10912 and put a stop to the mandatory CPD requisite on registered professionals. According to the bill’s authors, the CPD requirement imposes undue burden, stress, financial strain and hardships on licensed professionals.

CPD compliance has its merits.

In today’s environment, professionals have to be relevant and competent to thrive in a global and integrated playing field. However, regulators must also consider the plight of professionals who have limited resources to comply with these requirements. While learning is a lifelong process, a balance has to be achieved so that all stakeholders will emerge winners in the goal of uplifting the welfare of the general public.

An MBA holder, Angelina Alejandrino is a CPA in public practice and a freelance consultant. She was a former vice president for finance of the Mega Pacific Property Holdings Inc. and Einstee Realty Inc. This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general.

These can be e-mailed to boa. secretariat.@gmail.com.

Xi’s foreign policy needs a Confucian overhaul

By Michael Schuman Bloomberg Opinion

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hina has suffered a series of diplomatic blows lately. Relations with the US are at a multidecade low as a trade war escalates. This month, Malaysia suspended four Chinese-backed projects as its prime minister tries to pull away from Beijing’s orbit. From Myanmar to Sri Lanka to Vietnam, China’s overseas investments are being met with a growing backlash.

These are all setbacks to President Xi Jinping’s hopes for global greatness. Despite his aspirations to play the responsible world statesman, Xi’s foreign-policy record is filled with squabbles, misfires and unfulfilled promise. If he’s going to restore China to superpower status and cement its dominance in East Asia, he should take a cue from Chinese history about how to wield power.

For centuries, Chinese dynasties held a role in world affairs that looked very much like what Xi appears to want today. They sat at the center of an East Asian diplomatic and economic order that was stable, peaceful and prosperous over long periods.

That order was based on the

“tribute system.” In the West that phrase conjures up unsavory images of tyrannical emperors and cowering vassals. And it’s true that other East Asian countries were expected to acknowledge China’s supremacy.

But the tribute system was also a sophisticated framework for diplomatic relations, with its own rules, customs and values.

The system was infused with the lofty principles of Confucianism, which acted as a governing ideology for China’s imperial court and a cultural glue that bound the region together. In the Confucian ideal, relations were hierarchical, but not unfair. The superior power had a duty to treat subordinates with kindness and wisdom. “When one by force subdues men, they do not submit to him in heart” said Mencius, one of the great Confucian thinkers. “When one subdues men by virtue, in their hearts’ core they are pleased, and sincerely submit.”

China had the military and economic power to force its neighbors to kowtow, of course. But for the most part, the emperors showed restraint.

From the founding of the Ming Dynasty in 1368 to the first Opium War of the 1840s, China invaded an

East Asian state only once (an ultimately disastrous 15th-century push into Vietnam), notes David Kang, author of East Asia Before the West.

In response, the other East Asian countries generally accepted Chinese hegemony; Japan’s ill-fated invasion of Korea in the 1590s was the only overt attempt to challenge Chinese supremacy in that entire period.

To the extent the tribute system worked, it was because all parties saw benefits from it, in trade and diplomatic support. Emperors often bestowed gifts on foreign embassies worth more to their vassals than the tributes they received. Occasionally, they made concessions when they didn’t have to. In 1725 when Vietnam moved part of its border about 40 miles north into Chinese territory to claim copper mines, the Qing emperor decided to compromise, leaving a majority of the land in Vietnamese hands.

Of course, the emperors were not always peaceful, especially with neighboring peoples to China’s west.

But if Xi had Confucian scholar-officials in his court, like the old emperors, they’d likely advise him to act with more patience, generosity and conciliation—and thereby get

foreign leaders to cooperate with him willingly.

What would that mean in practice?

For one thing, China would refrain from further militarizing disputed areas of the South China Sea, and instead sit down with the other claimants, maybe giving an inch or two to reach a compromise that gained foreign support while maintaining China’s dominance. To resolve the trade war with Washington, China could focus on the very Confucian principle of reciprocity, and be willing to treat foreign companies on its turf the way its companies are treated overseas. And with “Belt and Road,” Xi could be more magnanimous and share the program’s benefits more evenly with its participants, thereby avoiding a popular blowback.

Xi obviously shouldn’t reestablish the tribute system; he couldn’t if he wanted to. But the emperors and their Confucian literati did know a few things about prudent leadership. Just because you have power doesn’t mean you should use it. Superpowers must sometimes make sacrifices to sustain their stature. And a little Confucian benevolence can go a long way.

Imagine a world without Opec: It isn’t paradise

By Julian Lee

Bloomberg Opinion

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magine a world without the Organization of Petroleum Exporting Countries (Opec). This is what the sponsors of legislation introduced in both houses of US Congress seem to want. Versions of the “No Oil Producing and Exporting Cartels Act,” or the Nopec bill, are working their way through the Senate and the House of Representatives, and are likely to find much more support from the White House than they have in the past—Presidents George W. Bush and Barack Obama both threatened to veto similar legislation.

The bill would allow US antitrust laws to be enforced against Opec members whom the sponsors say have “used production quotas to keep oil prices artificially high.”

This is a popular argument in a country where the right to cheap gasoline might have been written into the constitution alongside the right to bear arms, had that document been drafted a couple of hundred years later than it was. But we

need to look a bit further than the gas station forecourt. And when we do, we will not be looking upon the promised land.

Opec introduced production quotas in 1982, to allocate output between member-countries faced with a third year of falling global oil demand and rising supply from countries like Mexico and India, which left them with as much as 12 million barrels a day of spare capacity. Saudi Arabia had already reduced its oil production by 30 percent and, just as in 2016, was no longer prepared to shoulder alone the burden of balancing oil supply and demand.

What would have happened if Opec hadn’t got together? Sure, drivers in America and elsewhere would have enjoyed cheaper gasoline for a while. But probably not for too long. Even with the group’s supply management, oil prices reached a low of around $14 a barrel in 1986, according to data from BP Plc. How much further would they have fallen if member-nations had continued to produce without restraint? Certainly low enough to make production uneconomic in

Alaska, the Gulf of Mexico, the North Sea, Western Canada and a host of other oil provinces that have become mainstays of nonOpec production. The group’s supply management created the space for 33 billion barrels of additional non-Opec production in the 20 years it took for them to get their supply back to the level it had been in 1978.

But nearly 40 years later, the world’s a different place. Here is what would happen if the Nopec bill became law and the group failed to protect itself from its reach. This would be the world without Opec.

There could be no collective action to try to balance oil supply and demand. Saudi Arabia has said repeatedly that it wouldn’t balance the market on its own and support high-cost oil producers.

You don’t have to search too far to see what that means in practice.

Just cast your mind back four years, during the thick of Opec’s pumpat-will policy. Oil prices fell to $26 a barrel—great for drivers, but not so good for the US oil patch, or for investment in future production capacity needed to offset natural

decline in existing fields.

As Saudi Arabia raised its production, the number of rigs drilling for oil in the US fell by 80 percent. The only region in the world where drilling didn’t drop was the Middle East.

It wasn’t long before there were calls, including from candidate Trump’s energy adviser, for Opec to act to reduce supply and rescue prices that were too low for the American shale industry.

If the Nopec bill becomes law, there’s little incentive for anyone to hold spare production capacity.

In recent decades this willingness has been an important safety valve to relieve the pressure of supply disruptions. A study by the King Abdullah Petroleum Studies and Research Center, initiated in 2016, assessed the annual economic benefit to the global economy of Opec’s spare production capacity at between $170 billion and $200 billion through the reduction in price volatility in times of supply disruption. Without that buffer, oil prices could have spiked above $300 a barrel during the Libyan revolution, the study found.

2nd Front Page BusinessMirror

A12 Monday, July 23, 2018

Wide area of Luzon remains flooded, in state of calamity

A

By Rene Acosta

@reneacostaBM

T least nine municipalities and one city have already declared a state of calamity as a wide area of Luzon went under floodwaters due to nonstop rains from the southwest monsoon that was enhanced by three succeeding storms.

The National Disaster Risk Reduction and Management Council (NDRRMC) reported on Sunday that the municipalities of Asipolo and

Lagawe in Ifugao and the city of Dagupan added to the areas that are already under a state of calamity, as severe flooding hit 334 barangays in

Regions 1, 3 and 4A, and in the National Capital Region and Cordillera Administrative Region (CAR).

Overall, at least 158,509 families or 728,003 individuals in the affected regions, including in Western Visayas, were evacuated, and are now being served in government-run shelters.

The NDRRMC traced the severe flooding to the continued rain spawned by the southwest monsoon, enhanced by succeeding tropical depressions Henry, Inday and Josie, which have so far killed two people and injured two others.

Josie, which was forecast to leave the country’s area of responsibility by Monday, will continue to enhance the southwest monsoon,

and the NDRRMC said rains will prevail in Metro Manila, Central Luzon, Ilocos region, CAR, Cagayan Valley, Mindoro, Rizal, Cavite and Batangas.

Based on the reports of its local disaster offices, the NDRRMC said that at least 42 incidents of landslides and collapsed structures were recorded in heavily flooded areas, cutting off or affecting at least 30 road sections and four bridges.

A total of 156 houses were also damaged in Regions 3 and 6 and CAR. Initially, at least P259,130,611 worth of infrastructure and agriculture products have been damaged in Regions 1, 2, 3, 4A, 4B and 6 and in CAR.

GROUNDBREAKING

Officials of the Department of Public Works and Highways and of Laguna province, led by Gov. Ramil Hernandez (left, with cap), Rep. Arlene Arcillas and San Pedro Mayor Lourdes Cataquiz, graced the recent groundbreaking for the South Luzon Expressway Northbound Exit Interchange in San Pedro City.

RUDY ESPERAS

www.businessmirror.com.ph

‘APPEASEMENT’ POLICY IN S. CHINA SEA SCORED

S

ENATE Minority Leader Frank M. Drilon decried on Sunday the Philippine government’s “ineffective” policy of appeasement with China, noting how Vietnam has gotten so much more economic benefits from Beijing despite consistently challenging the expansion of the Asian giant in the South China Sea. Drilon lamented in a radio inter v iew how Manila had squandered the gains from the favorable 2016 ruling by a United Nations arbitral tribunal in the case brought by Manila on the South China Sea. Drilon said he had long been saying that such policy of appeasement with China had “no effect” at all on the Philippine economy. “If you look at our neighboring country, Vietnam in particular, which also confronted China, the direct foreign investments from China to Vietnam ballooned to $2.17 billion, while Chinese investments to the Philippines [was] only $31 million in 2017,” Drilon added.

Moreover, the senator said, the number of Vietnam’s Chinese tourists “is four times larger than ours.” He noted that Chinese tourist arrivals in Philippines stood at only 968,447 in 2017, while Chinese tourist arrivals in Vietnam were at 4 million. Anecdotal information bolsters this: A group of journalists who visited Vietnam’s world-famous Halong Bay recently learned from Vietnamese tourism people that Chinese tourists accounted for as much as three-fourths of

the visitors to the place on any given day.

Drilon suggested that “at the end of the day, this means the national interest of China, whatever the situation in Vietnam in terms of their attraction as an investment destination, is the one that prevails.”

The senator surmised this is proof that even if Vietnam fought with China, they continue to attract Chinese tourists “four times bigger than ours.”

Drilon stressed that clearly, “the policy of appeasement is not working.”

That is why, he said, “we want to hear what this administration intends to do to recover the islands that the court said is ours.”

Keep raising issue

The Senate Minority Leader lamented he had long been prodding the government to issue a policy statement on the West Philippine Sea. Drilon believes the Philippine government can find ways “through peaceful means, diplomatic means, like elevating the issue to the United Nations to reassert our sovereignty.”

“We should be more assertive on our claims on these islands,” added Drilon.

He called on the Senate leadership, particularly Senate President Vicente C. Sotto III and Senate foreign Relations Committee Chairman Sen. Loren B. Legarda, to conduct hearings and get inputs from experts on what should be done “in terms of peaceful pursuits over the West Philippine Sea.” Butch Fernandez

Rice tariffication, ‘BBB’ to ease burden on poor, Palace says

By Bernadette D. Nicolas @BNicolasBM

TROPICAL DEPRESSION “ JOSIE” 35 KM EAST OF BASCO, BATANES SOUTHWEST MONSOON AFFECTING LUZON as of 4:00 am - July 22, 2018

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alacañang said the government is rolling out long-term solutions, such as the conversion of rice import caps into tariffs and the “Build, Build, Build” (BBB) program, to help the poor.

Presidential Spokesman Harry L. Roque Jr. made the pronouncement on Sunday following the release of the results of a Social Weather Stations’s (SWS) survey which showed that more Filipino families considered themselves poor and food-poor.

“We are putting in place longterm solutions to significantly reduce inflation and help poor Filipino families, such as pushing for rice tariffication as rice accounts for around 20 percent of the total consumption of the poor,” Roque said in a statement.

For the second quarter of 2018, results of the SWS survey showed that 48 percent of families, or an estimated 11.1 million families, considered themselves poor. This is 6 points above the 42 percent, or an estimated 9.8 million families, in March and the highest since the 50 percent recorded in March 2017.

According to the SWS, the sixpoint nationwide hike in self-rated poverty in the April-to-May period was due to the sharp increases in Mindanao, Metro Manila and the Visayas.

Self-rated food poverty is also up by five points to 34 percent, which means that an estimated 7.8 million families rated themselves as “food-poor.” This is five points above the 29 percent recorded in March 2018. This is also the highest since the 34 percent posted in December 2016.

The rice tariffication measure is expected to be among the priority legislative agenda to be pushed

by President Duterte on his third State of the Nation Address today.

Economic managers are keen on removing the quantitative restriction (QR) on rice to tame inflation, which has accelerated in recent months due to the implementation of the Tax Reform for Acceleration and Inclusion.

The government expects the increase in rice supply—with the scrapping of the QR—to cut the price of the staple by P7 per kilogram.

Aside from providing jobs, Roque said the implementation of infrastructure projects under the “BBB” program will also help

ease inflation as it will lower the cost of transporting food and other goods.

Roque noted that weather-related delays in the distribution of cheap imports caused families to feel the pinch of higher food prices during the survey period.

He said rice inflation consistently picked up, from 1 percent in January to 4.7 percent in June this year. Average inflation also accelerated to 5.2 percent in June, from 4.6 percent in May. The June inflation rate was above government and market expectations.

Roque also said the timing of the survey, which was conducted from June 27 to 30 must also be considered as a factor behind the results.

“The government, through the Department of Social Welfare and Development, had distributed unconditional cash transfers to around 3.8 million of the 10 million total beneficiaries at the time of the survey, with distribution ramping up quickly subsequently, while the Department of Transportation’s Pantawid Pasada Program for jeepney operators with valid franchises started this July,” he said.

Rains, floods close 10 roads in North, Central Luzon

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HE nonstop heavy rains spaw ned by successive weather disturbances enhancing the southwest monsoon have forced the closure of 10 road sections in North and Central Luzon, the Department of Public Works and Highways (DPWH) said on Sunday.

The roads—six sections in Cordillera Administrative Region (CAR), three in Ilocos and one in

Central Luzon—were affected by flooding, landslide and soil collapse and road slip, the DPWH said.

The agency identified the shuttered road sections in the CAR as: Abra-Ilocos Norte Road, at the sections in Nagaparan, Danglas, Abra; Abra-Kalinga Road, at the sections in Subagan, Baay-Licuan, Abra Acop-Kapangan-Kibungan-Bakun Road, at the sections in Bagtangan, Gambang and Bakun in Benguet;

and in Mayus and Kibungan; Kiangan-Tinoc-Buguias Road; Mountain Province Boundary-Calanan-Pinukpuk-Abbut Road; Kennon Road.

Meanwhile, the sections closed in Region 1 are: Urdaneta JunctionDagupan Road; San Carlos-Calasiao Road; Tagudin-Cervantes Road.

The lone road closed in Region 3 is the Nueva Ecija-Aurora Road, at the Bongabon section, on account of a washed-out bridge.