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Tuesday, July 24, 2018 Vol. 13 No. 283
Tax reform, rice tariffs top 15 Sona priorities D B B D. N
@BNicolasBM
ESPITE being made to wait for more than an hour as a power struggle played out in the House of Representatives, President Duterte injected a sense of urgency in the priorities that he outlined in his third State of the Nation Address (Sona) on Monday, topping his pitch to Congress with mostly economic measures.
Among the 15 priority legislative measures which he laid out in his 48-minute speech, the President stressed the urgent passage of: rice tariffication, the second
package of the tax-reform law, lowering interconnection rates between telecommunications industry players, universal health care, end of contractualization
and environment protection. The President announced he has certified as urgent the rice tariffication bill, which seeks to convert rice import caps into tariffs. It has gained urgency in recent weeks as the government and affected sectors grappled with infla-
tion, partly fueled by spikes in rice prices in the market as a result of supply problems. Economic managers are keen on removing the quantitative restriction (QR) on rice to tame inflation, which has accelerated in recent months, with blame heaped on the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law. “We need to switch from the current quota system in importing rice to a tariff system where rice can be imported more freely. This will give us additional resources for our farmers, reduce the price of rice by up to P7 per kilo, and lower inflation significantly,” Duterte said. “I ask Congress to prioritize this crucial reform, which I have certified as urgent today,” he added. Duterte also urged Congress to Continued on A2
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Leadership struggle delays Duterte’s speech in House B J M N. C E F R
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HE House of Representatives (HOR) capped a tumultuous day that should have been a smooth opening for its third and last regular session, by voting former President and now Pampanga Rep. Gloria Macapagal Arroyo as the new Speaker. She replaced Pantaleon Alvarez who was earlier “voted out” in a “rump” session but was allowed to remain in his post while President Duterte delivered his third State of the Nation Address (Sona). In a voting that took place despite electricity and microphones being cut off and the House mace in “hiding,” 184 House members voted, with 12 abstentions,toreconfirmthevotetheymadeearlier in the day to install Arroyo as the Speaker. This, after Nueva Ecija Rep. Magnolia Antonino declared the position of Alvarez as vacant, prompting Deputy Speaker and Batangas Rep. Raneo Abu to nominate Arroyo for the speakership. Hours before this second voting, Arroyo ascended the rostrum and also took her oath. In front of 3,000 guests including foreign dignitaries and high-ranking officials, the Pampanga representative took her oath as the new speaker while the sound system at the House was cut off. She was seen on national television shouting out appeals to her colleagues on the floor. Arroyo took her oath replacing Davao Del Norte
DOF explains auditors’ report on unused funds
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pressures in the economy. International credit watchers also said persistent pressure on the current and capital inflows—which, in turn, sway the movement of the local currency—pose “material challenges to policy-makers in ensuring that inflation expectations and inflation pressures are contained.” Continued on A2
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PHL jobs situation much better today MANNY B. VILLAR
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LOWER inflation and robust infrastructure spending will be able to sustain Philippine economic growth at 7 percent until the end of the year, according to a local think tank. In the latest Market Call report, First Metro Investment Corp. (FMIC) and University of Asia and the Pacific (UA&P) Capital Market Research said public infrastructure spending will continue to post double-digit growth. Inflation will also slow and boost household consumption in the coming months. This is crucial for a consumption-driven economy like the Philippines. “We think the government [particularly, infrastructure] spending will continue to ramp up—doubledigit growth over the last eight months—and the manufacturing output expansion at an unusually fast pace, will provide the basis for robust job creation [and consumer spending],” FMIC-UA&P Capital Market Research said. “These support our view that GDP gains will accelerate to 7 percent in [the second quarter] and the rest of the year. Inflation will likely start slowing down in [the third quarter], as rice imports have arrived and the September harvest just around the corner, while the US Department of Energy expects crude oil prices
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HE rapid economic expansion of the Philippines is generating jobs at an unprecedented pace. For example, many jobs in the construction and tourism sectors remain unfilled to this day because of the shortage of workers. While the Philippines remains a net exporter of labor, its domestic requirement for skilled workers is also rising fast, given the expansion of several sectors, such as business-process outsourcing, information technology, manufacturing, real estate, infrastructure, education, health care, retail, tourism and others.
HOUSE RULES
UNDER House Rule 3, Section 13, except for the position of Speaker, any position may be declared vacant by a majority vote of the members present,
FMIC: 7% growth may be sustained till year-end
HE Department of Finance (DOF) said on Monday a revision of its budget due to new policies implemented by the incoming administration from 2016 to 2017 partly accounted for auditors’ finding that some of its funds were unutilized. The DOF was responding to reports released on Friday, where the Commission on Audit (COA) pointed
THE ENTREPRENEUR
Rep.PantaleonAlvarezbeforeKabuhayanparty-list Rep.DennisLaoganat3:53pm,orjustafewminutes before Duterte was scheduled to deliver his State of the Nation Address. He was only able to do so at 5:21 p.m, after being made to wait over an hour in a holding room, with Senate President Vicente Sotto III and Alvarez. At least 186 lawmakers informally installed Arroyo as the new Speaker through a manifesto after Davao City Rep. Karlo Nograles called a roll. Arroyowassupportedbymajorityoflawmakers from different political parties that included the Nacionalista Party (NP), Nationalist People’s Coalition (NPC), National Unity Party (NUP), and members of President Duterte’s Partido Demokratiko PilipinoLakas ng Bayan (PDP-Laban). But it was still unclear if Arroyo will be challenged by Alvarez as the process of installing happened while the session was adjourned. However, it was Alvarez who was recognized by President Duterte as speaker of the lower chamber during his Sona.
PRESIDENT Duterte delivers his third Sona in a remarkably calm manner that masked the tension he witnessed as top ally Pantaleon Alvarez (seated, right, with Senate President Vicente Sotto III) fought for his post as Speaker just minutes before the scheduled speech of the President. ALYSA SALEN
WEAK PESO MAY FEED INFLATION, FOCUS ON NEXT M.B. MEET
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HE local currency will be one of the main considerations in the Bangko Sentral ng Pilipinas’s (BSP) monetarypolicy decision in its upcoming August meeting, as the Central Bank admitted that the peso’s weakness may feed the country’s inflationary balloon further. In a recent speech, Central Bank Governor Nestor A. Espe-
nilla Jr. said they are keeping “utmost vigilance,” particularly in potential price pressures from excessive volatility in the foreignexchange market. “While we believe that our fundamentals remain solid and healthy, sustained pressures on the peso could adversely affect inflation expectations,” he said. Espenilla said among the pres-
sures pulling the peso downward include the recent and planned interest-rate hikes by the US Fed and brewing trade tensions among key economies. Recently, local bank economists also flagged risks on the excessive weakness of the peso against the dollar, saying it remains to be one of the upside risks to the already rising inflationary
PESO EXCHANGE RATES ■ US 53.5150 ■ JAPAN 0.4805 ■ UK 70.2491 ■ HK 6.8180 ■ CHINA 7.8856 ■ SINGAPORE 39.2972 ■ AUSTRALIA 39.7028 ■ EU 62.7624 ■ SAUDI ARABIA 14.2695
Source: BSP (23 July 2018)
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BusinessMirror
A4 Tuesday, July 24, 2018 A2
PHL imports more fertilizers amid dip in local production
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By Jasper Emmanuel Y. Arcalas
@jearcalas
HILIPPINE fertilizer imports this year could rise by at least 8.33 percent to 2.6 million metric tons, from last year’s 2.435 MMT, according to the Fertilizer and Pesticide Authority (FPA).
The FPA noted that the output of local manufacturers could no longer meet the increasing demand of farmers for fertilizer. Farmers use fertilizer to hike crop yields. “Imports would be higher this year compared to last year as local production continues to decline,” FPA Executive Director Wilfredo C. Roldan told the BusinessMirror in a recent interview. “Imports would reach about 2.6 [MMT]. We do not have much
of [local] production anymore. Our consolidated output last year was only around 300,000 [metric tons],” Roldan added. Local fertilizer output last year fell slightly to 312,892 metric tons, from 313,773 MT recorded in 2016. The bulk of local fertilizer produced last year was complete fertilizer, which reached 213,670 MT. The figure was 28.71 percent higher than 2016’s record of 166,010 MT,
according to FPA data. The country’s fertilizer imports last year were 8.2 percent higher than the 2.25 MMT posted in 2016. “The increased demand for fertilizers can be attributed to the increasing number of dealers or importers which were issued permits and licenses by the agency,” the FPA said in its annual report. The bulk of the country’s fertilizer imports last year, or 40.49 percent of the total volume, was urea. However, urea imports in 2017 fell by 6.2 percent to 985,917 MT, from 1.051 MMT recorded in 2016. In terms of prices, Roldan said there will be a “slight, but not significant” increase in the prices of fertilizer this year due to the recovery of global oil prices. Roldan added that the continued depreciation of the peso against the dollar is also making imported fertilizer more expensive, as majority of the farm input
sold commercially are produced in other countries. The monthly monitoring report of the Philippine Statistics Authority (PSA) showed that the retail prices of four major fertilizer grades in June expanded on an annual and monthly basis. The average retail price of urea last month reached P1,009.78 per 50-kilogram bag, which was 11.23 percent higher than the P907.81 average quotation in June 2017. The June quotation was slightly higher than the average of P1,004.84 per bag recorded in May. On an annual basis, the retail prices of complete fertilizer rose slightly by 0.68 percent to P1,108.68 per 50-kilogram bag, while a sack of ammosul went up by 6.18 percent to P592.88 per bag in June. Furthermore, a 2.35-percent year-on-year increment in the retail price of ammophos was observed last month as its average quotation reached P930.21 per bag.
No automatic inclusion in JBC’s CJ list for SC senior associate justices By Joel R. San Juan @jrsanjuan1573
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HE five senior associate justices of the Supreme Court (SC) will not be automatically included in the Judicial and Bar Council’s (JBC) short list of nominees if they will not officially accept their nomination for the Chief Justice (CJ) post which has been left vacant following the ouster of Chief Justice Maria Lourdes A. Sereno The decision was reached at Friday’s deliberations of the sevenman JBC panel. A JBC insider said the five senior associate justices, namely, Acting Chief Justice Antonio Carpio and Justices Presbitero Velasco Jr., Teresita Leonardo de Castro, Diosdado Peralta and Lucas Bersamin should submit a formal acceptance of their nomination before they can be considered for position. “If there is no acceptance of the nomination, they cannot be considered an official applicant for the CJ post,” the source said. The source explained that an
applicant for the post is required to fill up and submit certain documents such as bank statements, Statement of Assets, Liabilities and Net worth (SALN). The source said if the nomination is not formally accepted, it would only mean that the nominee will not likely submit the required documents. “Without these documents, the nominees will not be considered by the JBC,” the source said. Under the rules, while the five most senior justices are automatically nominated for the Chief Justice post, they still have to formally accept the nomination to be officially considered a nominee or applicant. Earlier, former Chief Justice Hilario G. Davide Jr. raised the possibility of the automatic inclusion of the five senior justices in the short list of nominees after Carpio turned down his nomination for the CJ post out of delicadeza. Carpio explained that since he voted against the granting of the Solicitor General’s quo warranto petition that led to Sereno’s ouster, he should not benefit from the result of the majority vote that
DOF on COA report: New budget policies account for unutilized funds for 3 years continued from a1 the agency failed to use its funds amounting to a total of P1.14 billion for three years, broken down as: P262.176 million for 2015, P435.830 million for 2016 and P442.204 million for 2017. Finance Undersecretary Gil S. Beltran said that, apart from new policies being implemented when the Duterte administration took over in 2016, the department had also opted to renovate the DOF building instead of constructing a new one, leading to savings, which were remitted to the Bureau of the Treasury (BTr). “In 2016 and 2017, the DOF budget was revised because of new policies by the incoming administration. Instead of constructing a new building, we focused on renovating the existing building to make it more efficient. Thus, the savings were remitted to the Treasury for reallocation to other priority expenditures. Likewise, other expenditures were beyond the DOF’s control like the Nampeidai refund due to nonresolution of court case,” Beltran said. In its report published earlier in the month, the COA said that from the P1.061-billion allotment to the DOF for 2015, P799.564 million was obligated, or 75.3 percent; for the P1.164billion allotment in 2016, P729.085 was obligated, or only 62.5 percent; for
the 2017 allotment of P2.135 billion only P1.692 billion was obligated, or 79.2 percent. “Despite these setbacks, the budget utilization rate was 75 percent in 2015; 69 percent in 2016 and 90 percent in 2017,” he added. The COA had also questioned the honoraria the DOF gave out, amounting to P5.119 million, to technical working committees involved in International Organization for Standardization (ISO) certification activities for 2016 and 2017. “On the honorarium paid to employees for formulating and implementing the ISO program, we told the COA that the payment of honorarium is in accord with budget circulars. We thought that instead of creating a new unit, we are better off using existing personnel to prepare and implement the ISO plan and pay them small honorarium for overtime work. We were proven right when the processes of three units were given ISO accreditation. We have sent letter to the COA seeking reconsideration,” Beltran said. The COA had pointed out that the DOF violated Presidential Decree (PD) 1445, which provides that no money shall be paid out of any public Treasury except in pursuance of an appropriation law.
created the vacancy. “On a personal level, because I voted against it, I don’t want to benefit from it so I will decline any nomination. I have to be consistent with my position that the quo warranto was not the correct or proper way to remove a sitting member of the Court,” Carpio had said. Meanwhile, Justice Secretary Menardo I. Guevarra disclosed that the JBC will start its first deliberation for the CJ post on August 3, or a week after the July 26 deadline for the submission of application and nomination for the said post. So far, the JBC has yet to receive any application or nomination for the post, although the panel is expecting them at the last minute. The JBC is constitutionally tasked to screen applicants and come up with a short list of nominees for vacancies in the Judiciary and the Office of the Ombudsman and recommends appointees to the Office of the President. The JBC is currently composed of acting Chief Justice Antonio Carpio as ex-officio chairman, with
ex-officio members Guevarra, Sen, Richard J. Gordon and Oriental Mindoro Rep. Reynaldo V. Umali. Its regular members include retired Supreme Court Associate Justice Jose Catral Mendoza, who represents the justices; lawyer Jose Mejia, who represents academe; lawyer Milagros Fernan-Cayosa; who represents the Integrated Bar of the Philippines (IBP), and retired Judge Toribio Ilao, who represents the private sector. The 1987 Constitution requires that the Chief Justice position must be filled within 90 days from vacancy, which means that President Duterte needs to appoint Sereno’s replacement by September 16. Sereno was ousted by her colleagues based on the quo warranto petition filed by Solicitor General Jose C. Calida, which sought to nullify her appointment for her failure to comply with the requirements to qualify for the post. The SC formally opened on June 26 the search for the post of Chief Justice after it affirmed on June 19 its ruling which granted the quo warranto petition.
Weak peso may feed inflation, focus of next MB meet continued from a1 Year-to-date, the peso has depreciated by around 7 percent against the US dollar, making it one of the weaker performers in the region. On Monday the peso traded at 53.48 to a dollar, gaining a few centavos of value from the previous trading day’s 53.51 to a dollar. The total traded volume during the day was at $399.6 million. Espenilla earlier vowed to consider a “strong follow-through monetary adjustment at the next meeting of
the Monetary Board in August.” “The pace and magnitude of policy tightening will necessarily be dependent on our comprehensive and rigorous assessment of all relevant data and forecasts. This is consistent with our long-standing disciplined approach to inflation targeting,” Espenilla said. Recent data show inflation averaged at 4.3 percent in the first half of the year, with its latest print hitting 5.2 percent in June.
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Shed tough guy image, show more compassion, bishop urges Duterte
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O more profanities and more on public service. This was the appeal of Manila Auxiliary Bishop Broderick S. Pabillo to President Duterte, whom he asked to finally shed his tough guy image and focus more on his duty as Chief Executive after his third State of the Nation Address (Sona) on Monday. The prelate made the appeal during his 16-minute homily at a Mass held at the Saint Peter’s Parish in Commonwealth, Quezon City, for groups who joined demonstrations opposing the proposed Charter change. Pabillo stressed the importance for government officials, including the President, to exercise humility and being reflective in performing their duties. “God wants us to change our behavior to become fair, loving to your fellow men and humble to His will,” Pabillo said. “Enough with the insults, cursing and accusing others...if he [Duterte] can’t stop with his cursing, then he does not deserve to become our leader,” he added. D uter te i s k now n for h i s invective-laden speeches, especially on issues which he feel strongly about. His Sona speeches are no exception.
Bangsamoro, federalism: 2 tones continued from a1 in a draft charter by his 22 hand-picked drafters, only passing mention. “At the end of my term, I hope to see the promise of Mindanao fulfilled, or, at very least, approaching fulfillment. Be that as it may, Mindanao crosses at the crossroads of history— one road leads to harmony and peace; the other to war and human suffering,” Duterte said. The President added his support for the BOL remains unwavering, even in the face of left and right criticisms that some of its provisions are unconstitutional. He vowed he will not let the BOL go unsigned beyond two days after its transmission to his desk. “When the approved version is transmitted and is received by my office, the law has been passed actually. Give me 48 hours to sign it and ratify it,” the Chief Executive said, to the delight of those in attendance. He warned, though, that the first months of the Bangsamoro region will certainly undergo birth pains, and both the government and the people are required to take the situation with understanding and patience. “To me, war is not an option; we have been through the catastrophe in Marawi. We have seen the horror, the devastation and the human toll and the displacement of both Christians and Muslims alike,” the President explained. Once the BOL is enacted, the Bangsamoro in the Autonomous Region in Muslim Mindanao (BARMM) will be created. The region will have its own parliament composed of 80 members—50 percent party lawmakers, 40 percent district legislators and 10 percent sectoral representatives— and an improved power of the purse.
Sober on federalism, Cha-cha However, this determination to cre-
Tax reform, rice tariffs top 15 Sona priorities
pass the second package of TRAIN, which he hopes to sign before the end of 2018. The second package lowers corporate income taxes paid by 95 percent of businesses while providing new fiscal incentives for deserving recipients. The President noted that this will create more jobs as more than 99 percent of businesses are micro, small and medium enterprises (MSMEs) and employ around 65 percent of workers. “The enactment of the Package 2 is what stands between today and millions of jobs in the near future,” he said. The President said the government has worked to lower interconnection rates between all industry players, not only to lessen the cost to customers, but also lessen the cost for incoming players. It will create a market environment that is more conducive to competition. “This
is a policy which is crucial to ensure that our solutions to our telecom problems would be meaningful and lasting. The last two years of experience has taught me that the lack of consultation or insufficiency of information can at times lead to rushed judgments,” he said. Duterte also sought a “speedy” passage of the universal healthcare bill, which he earlier certified as urgent. This provides primary care to all Filipinos, including free medicines and free healthcare. He reported that the government’s campaign against “Endo”—the practice of ending workers’ tenure to avoid granting them benefits of permanent workers—and illegal contractualization has resulted in the regularization of more than 300,000 workers as of early July. Although the President noted that he signed
“It is sad [that] his past statements lacked substance and focused on his arrogance,” Pabillo said. Instead of such antics, Pabillo said Duterte should be more respectful to others and focus on the results of government’s programs, which would be beneficial to most Filipinos. Pabillo said the President should address pressing issues, such as extrajudicial killings, illegal contractualization, welfare of displaced indigenous people and China’s harassment of Filipino fishermen. Meanwhile, Pabillo urged the public not to be afraid in criticizing the government for its shortcomings. “Let us not be afraid...of trolls and killers. If God is for us, who can be against us? Let us just be sure God with us,” Pabillo said. The Mass celebrated by Pabillo was attended by representatives from marginalized sectors and other religious groups, including the Inglesia Filipina Independiente and United Church of Christ in the Philippines. Also among the participants of the afternoon Eucharistic celebration was the Australian missionary Sr. Patricia Fox, who went to Saint Peter’s Parish after filing her appeal on the deportation order of the Bureau Immigration. Samuel P. Medenilla
Executive Order 51, which sought to protect the workers’ rights to security of tenure, he admitted that there is still a need to pass a legislation to fully realize the end of contractualization. “Read my lips. I understand this does not satisfy all sectors; I share their sentiment; I truly do. Much as I like to do the impossible, that power is not vested upon me by the Constitution. And neither will I make both ends meet even if I violate the laws to achieve that purpose. Simply, it is not part of my territory,” he said. “That is why I add mine to their voices in asking Congress to pass legislation ending the practice of contractualization once and for all.” Just like his second Sona, the President reiterated that environmental protection remains the government’s priority as he warned the mining industry to stop destroying the environment.
ate the BARMM was not reflected in Duterte’s push for federalism. In his Sona, he did not prioritize it as urgent nor did he call on lawmakers to quickly move to shift the country to a federal system by deliberating on the draft federal constitution crafted by the Constitutional Committee. He did thank profusely and acknowledge, though, the presence at the Sona of the Con-Com chair, former Chief Justice Reynato S. Puno, and its most senior member, former Senate President Aquilino Q. Pimentel Jr. Beyond thanking them, the President simply reiterated what has been said before: that he is not seeking to prolong his stay in Malacañang anymore. “I have no illusions of occupying this office one day longer than what the Constitution under which I was elected permits, or under whatever Constitution there might be,” he said. “Four administrations before me have all tried to amend the Constitution to be able to introduce amendments and revisions to the Charter, but none of them was successfully done for one reason or another,” he added. The Chief Executive still believes “the Filipino people will stand behind us, as we introduce this new fundamental law that will not only strengthen democratic institutions, but will also create an environment where every Filipino, regardless of social status, religion or ideology, will have an equal opportunity to grow and create a future that he or she can proudly bequeath to the succeeding generations.” The Consultative Committee tasked to review the 1987 Constitution on July 9 transmitted to the Office of the President its proposed changes to the Charter. Its main provision is to create 18 federated regions with the more autonomy to control and utilize their revenue stream.
continued from a1 “Stop destroying watersheds, the forest and water resources. You can no longer filth our rivers,” Duterte said. “Expect reforms, radical ones. I do not intend to quarrel with anybody but for as long as I have said you will just have to contend with me. I expect you to do your part for national development starting now.” Other priorities listed by the President in his speech were his war on drugs, HIS fight against corruption, the Bangsamoro Organic Law, an independent foreign policy including sustained protection of Overseas Filipino Workers and assertion of claim in the West Philippine Sea, the setting up of the coconut farmers’ trust fund, enforcement of laws of local government units, the National Land Use Act and the creation of a department of national disaster management.
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BI reshuffles officials in key airports, ports By Recto Mercene @rectomercene
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he Bureau of Immigration (BI) has reshuffled more than a hundred officials assigned at several airports and ports across the country in line with its drive to improve the services of the agency. BI Commissioner Jaime H. Morente said the Department of Justice (DOJ) last week directed the reassignment of 59 airport officials, 49 of whom are assigned at the three terminals of the Ninoy Aquino International Airport (Naia), while the rest are stationed at the Clark and Davao airports. Morente said Justice Secretary Menardo I. Guevarra issued the department order alternating the post of the officials, which include the alien control officers (ACOs) in charge of more than 40 BI offices nationwide. Morente said that in compliance with Guevarra’s directive, he issued personnel orders instructing the concerned officials to report to their new assignments and assume their duties immediately. “This revamp is long overdue. Many of the airport officials have been in their posts for more than a year already, while many ACOs have been in their jobs for more than five years. “It’s time to give them new tasks so they can face new challenges and responsibilities. This is also to avoid familiarity and lax performance of duties,” the BI chief added. BI OIC Deputy Commissioner Marc Red Mariñas welcomed the revamp, saying the move was primarily aimed to develop the career of the affected employees and enhance their performance and efficiency. “It also prevents fraternization which breeds corruption and avert boredom that dampens morale and stifles growth in the organization,” said Mariñas, who heads the BI port operations division. BI Deputy Commissioner J. Tobias Javier stressed that the BI is not only focused on beefing up its manpower at the international ports, but also on developing the professional advancement of its workers all over the Philippines. He disclosed that the reshuffle affected all BI head supervisors and deputy head supervisors in charge of the bureau’s operations at the Naia and Clark and Davao airports.
Deportation of Aussie nun may have to wait
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HE deportation of 72-yearold Australian nun Patricia Fox may not be enforced immediately following her filing of a motion for reconsideration before the Bureau of Immigration (BI) on Monday. “The deportation order cannot be enforced until it becomes final. With the filing of the appeal, the deportation will not be executed,” Justice Secretary Menardo I. Guevarra told reporters in a text message. The Rural Missionaries of the Philippines-Northern Mindanao Sub-Region (R MP-NMR) condemned the deportation order, saying such was affront against the mission of the Church to extend assistance to the poor. “The deportation order of Sister Pat mirrors a deplorable state of the country under Duterte, whose fascist and tyrannical rule has placed the archipelago’s human-rights situation at its worst. Extrajudicial killings have become a norm, while thousands have languished in jails including Duterte’s political critics and activists,” RMP-NMR said. On July 19 the BI released a deportation order against Fox for allegedly participating in political activities, which violated her visa provisions. She is now also included in the BI’s blacklist of undesirable aliens. Joel R. San Juan and Samuel P. Medenilla
Editor: Vittorio V. Vitug • Tuesday, July 24, 2018 A3
Senate President green lights WPS inquiry By Butch Fernandez
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@butchfBM & Rene Acosta
@reneacostaBM
enate President Vicente C. Sotto III affirmed on Monday that concerned government agencies are on the ball in the brewing West Philippine Sea (WPS) issue, but said he would rather that senators take up the matter with concerned authorities in closed-door sessions.
In an interview on Monday, Sotto, however, sidestepped a query about any shift in the Duterte administration’s “policy of appeasement” with rival claimant China in the contested WPS territories. “I don’t know if I am authorized to say so, but I know for a fact that the government, the Armed Forces are addressing it, but they are not informing the public,” Sotto said, adding: “It’s better that we do not discuss it [in public].” When asked if he would give the greenlight on the minority senators’ bid for the Foreign Relations Committee to conduct a committee hearing to get updates on the brewing WPS territorial issues, Sotto replied: “Yes, of course; why not?” But Sotto quickly clarified “there are things that I think should be asked during executive session,” meaning this would be taken up behind closed doors. The Senate leader, likewise, parried questions on whether the senators are satisfied with the Duterte administration’s handling of the WPS issue with China and other rival claimants in the contested territories. “It is really a very touchy subject, insofar as diplomacy is concerned,” the Senate President said, adding: “Hindi naman tayo pwede magpa-api, pero hindi naman tayo pwedeng maging agresibo [We can’t afford to be passive,
yet can’t also put up an aggressive stance in dealing with the issue].” Sotto confides there are “unreported” steps being taken by the Philippine government that remain confidential “to ensure we are not disadvantaged,” but he did not go into details. “So, alam kong may mga pailalim na aksyon ang ating bansa para tayo ay hindi naman maapi, pero mayroon din tayong ‘above-board’ approach na kinakausap natin at kinakaibigan natin ang mga maaring maging kaaway. Mas mabuti na walang kaaway. Sa mundo natin ngayon...[our officials have taken some steps so the country may not be placed at the losing end, but such steps should be kept under wraps since we know we’re establishing ties with a country who could also turn up
OWWA launches ₧300-million OFW livelihood program By Samuel P. Medenilla
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@sam_medenilla
he Overseas Workers Welfare Administration (OWWA) has allocated P300 million to finance its livelihood program of overseas Filipino workers’ (OFWs) organizations. In a news statement issued on Monday, the OWWA announced it has launched its Tulong Pangkabuhayan sa Pag-Unlad ng Samahang-OFWs (Tulong Puso) program to provide qualified beneficiaries raw materials, equipment, tools and jigs, and other support services to start or restore their enterprises. “The livelihood assistance is a one-time grant that ranges from P250,000 to P1 million relative to the requirements of the business project, and the number of members of the OFW organization applying for the grant,” OWWA Administrator Hans Cacdac said. Cacdac explained the program aims to “encourage” OFW organizations not to be just “social circles” but also community-based business endeavors. He said they have partnered with the departments of Trade (DTI) and Agriculture (DA) to provide the necessary technical aid to those who will avail themselves of the program. “We will be conducting enterprise development training and other social preparation interventions to equip the OFW groups with the right knowledge and skills to ensure the success of their chosen livelihood projects,” Cacdac said. To qualify for the program, the OWWA said, OFW organizations should be accredited by the Department of Labor and Employment (DOLE), Cooperative Development Authority (CDA) or the Securities and Exchange Commission (SEC). Applicants will be required to submit the following documents: certificate of entrepreneurship development training (for start-up/formation); copy of DOLE/SEC/CDA registration, organizational profile with individual personal information; business permit issued by local government unit; business project (indicating or showing proponent capacity to put up an equity equivalent to at least 20 percent of the total project cost) and sketch of project site; and board resolution designating a business manager (on behalf of the group/organization) authorized to file a notarized application for Tulong Puso program.
be a potential enemy. But it’s best we remain on friendly terms with every nation since] globalization is all over, we cannot afford to have enemies. So as they say, when people talk, the guns are silent,” the Senate President added.
Nothing lost
Defense Secretar y Delf in N. L oren z a n a, mea nwh i le, m a i ntained that the country never lost any territory to China, rejecting the results of a survey that showed Filipinos wanted the Duterte administration to regain full control of the Chinese-occupied islets in the WPS. The defense chief said the country still occupies the nine islets that it has held in the territory that Beijing disputes, and not an inch of the territory has been taken over by China. “What islands will we retake in the first place? Did China take any of our occupied nine islands? No. We are still in control and in occupation,” Lorenzana stated. While China has reclaimed several islands, the defense secretary said that these man-made features were origi-
nally underwater reefs that were developed by Beijing into military bases. “The Chinese never took any of our occupied islands. They took over unoccupied reefs and turned them into islands. Had we been wiser, we could have occupied those reefs as well when we occupied the nine islands in the 70s,” he said. While Beijing already exercises a de facto control of the Scarborough or Panatag Shoal, Lorenzana said the country never lost an island under the Duterte administration. “While Panatag is under the effective control of the Chinese, our fishermen could fish in the area,” he said. A recent survey showed that 9 out of 10 Filipinos wanted the government to take full control of the islands that are held by China, but Lorenzana said the way the questions were framed are wrong. He said all of those asked should have responded unanimously and not only 9 out of 10 agreed with the idea. “So there are 10 percent who disapproves of the idea that we get back control? Who are these people? Why do
they not want us to have a full control of the West Philippine Sea?” he said. “If I were to make a survey I would separate the two: Whether I want control of the WPS and do you approve of the government’s action? Here I would explain what the Duterte administration found when it assumes office, and what is obtaining now in the West Philippine Sea,” he added. Still, the defense secretary could not say how the government could regain full control of the WPS, which he said was not a “sovereign territory” of the country. “How do you resolve the issue with a regional power that is ready to defend its interest militarily? It is easy to say let us assert our rights and sovereignty. Question is how? But first, was there sovereignty violated? We have the sovereign right to exploit the resources, but the WPS is not our sovereign territory,” he said. “Panatag Shoal, thanks to the arbitral ruling, is now the fishing ground not exclusively of the Filipinos but of Chinese, Vietnamese and Taiwanese as well,” Lorenzana added.
A4 Tuesday, July 24, 2018 • Editor: Vittorio V. Vitug
Local industry gross revenue down 6.9 percent in Q1–PSA By Cai U. Ordinario
@cuo_bm
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ross revenues of local industries slowed to 6.9 percent in the first quarter of 2018, according to the Philippine Statistics Authority (PSA). Based on the Quarterly Economic Indices (QEI), this was slower than the 9.5-percent growth posted in the first quarter of 2017. PSA data showed industries that saw the highest growth were finance, real estate and private services. “Gross revenue refers to the value of receipts from the shipment of goods produced, resale of goods and services rendered,” the PSA said. Data showed that finance posted the fastest growth in gross revenues with 11.7 percent. This sector covers banks, nonbanks and insurance companies. Banks include commercial and savings banks, as well as specialized government banks, while nonbanks include investment houses, security brokers and pawnshops, among others. Insurance companies, the PSA said, include companies providing life, accident, sickness, fire, casualty or other forms of insurance. Meanwhile, QEI data showed that the real-estate industry grew 8.9 percent and private services grew 7.7 percent. The real-estate industry includes all companies engaged in renting, management and operation of residential and non-residential buildings, subdivisions and development of land, among others. Private services include educational, medical and health, personal recreation, hotels and restaurants and other private services. Meanwhile, the total employment index grew by 1.5 percent which was a faster growth compared to the 1.4 percent in the first quarter of 2017.
The growth was led by trade, which posted a 2.8-percent growth, followed by electricity and water with 2.7 percent; and transportation and communication with 2.1 percent. Employees include paid officials and workers, workers paid solely on commission basis, and apprentices. Total compensation index, for its part, posted 6.1 percent, a slight deceleration from the 6.2 percent posted in the first quarter of 2017. Industries that contributed to the expansion were led by transportation and communication, which grew by 8.5 percent, followed by private services with 6.7 percent and trade with 5.8 percent. However, mining and quarrying declined by 5.1 percent in terms of total employment and 6.5 percent in terms of total compensation. “Compensation consists of total salaries and wages, commissions and other benefits, and employer’s contribution to social security and pension schemes and similar benefits,” the PSA said. Meanwhile, the PSA said total compensation per employee index grew by 4.6 percent. Industries with the highest growth were transportation and communication with 6.3 percent, private services with 4.8 percent, and real estate with 4.1 percent. However, mining and quarrying and electricity and water declined by 1.5 percent and 0.4 percent, respectively. “Indices on compensation per employee are used as deflators to express a current value in real terms or as bases for wage level/rate determination, forecasting and projection,” the PSA said. The QEI provides measures of growth in production, gross revenue, employment and compensation in the various sectors of the economy.
Economy BusinessMirror
www.businessmirror.com.ph
BOI upbeat on hitting P680-B investment target goal in 2018
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By Elijah Felice E. Rosales
@alyasjah
ledges committed to the Board of Investments (BOI) now stand at 35.15 percent, or still 65.85 percent shy of its P680-billion target this year, but its top officials are optimistic that the agency can still hit its ambitious objective.
The first half of the year saw the growth of foreign direct investments (FDI) approved by the BOI to P14.5 billion. It was 165 percent higher than the P5.5 billion recorded at the same period last year. FDI from Indonesia were the highest at P6.4 billion, followed by Japan at P2.6 billion. China, the United States and Italy were the BOI’s next top origins of FDI at P880 million, P582 million and P486 million, respectively. The surge in FDI was attributed to be one of the factors the BOI’s approved investments in the first semester now stand at P238.9 billion, up by 27.1 percent from the previous year’s P188 billion. Investment pledges last year hit a record-high P617 billion, and the BOI seeks to expand that by 10 percent this year to P680 billion. Trade Secretary and BOI Chairman Ramon M. Lopez said his agency’s strong showing in the first half of the year signifies the bullish outlook investors have for the country. “The impressive investment reg-
65.85%
The total percentage remainder of investment pledges that the BOI aims to gain before achieving its ambitious P680billion investment pledges for the year istrations with the BOI is a concrete proof of the continued confidence of both foreign and local investors in the country,” he stated. On the other hand, Trade Undersecretary and BOI Managing Head Ceferino S. Rodolfo Jr. said he expects more investors to register in the second semester, and estimated this will make the BOI breach its target this year. “We expect big-ticket projects to come in by the second half of the year. Foreign and domestic investors remain optimistic, especially
in view of the government’s ‘Build, Build, Build’ [BBB] program and manufacturing resurgence programs [MRP],” Rodolfo explained. The BBB is the government’s multitrillion-peso infrastructure program aimed at completing big-ticket projects, such as the North Luzon Harbor Link, Luzon Spine Expressway, Philippine North and South Rails and the Metro Manila Subway. The government plans to achieve this by accelerating the country’s infrastructure-to-gross domestic product ratio to 7.4 percent, which will amount to as much as P9 trillion by the end of President Duterte’s term in 2022. The MRP is the trade department’s three-phased plan “to rebuild the existing capacity of industries, strengthen new ones and maintain the competitiveness of industries with comparative advantage.” Now on its second phase, the trade department must be shifting to high value-added activities in upstream industries and in linking and integrating them. Citra Central Expressway Corp. had the biggest investment in the first semester at P25.7 billion for the extension of Skyway from Buendia Avenue to the North Luzon Expressway in Balintawak. Other large-scale projects include the P1.1-billion theme park of Newscape Haven Development Inc. in Nabas, Aklan; the P990-million renewable-energy (RE) project of Hydrocor Corp. in Ifugao; and the P710-million hospital project of Allegiant Regional Care Hospitals Inc. in Lapu-Lapu City, Cebu.
The RE industry obtained the highest investment pledges at P108.2 billion in the first half of the year, up by 168 percent from the previous year’s P40.3 billion. The transportation and storage segment came in second at P37.4 billion from P9.4 billion last year—a 298-percent increase. Construction and public-private partnership projects, manufacturing and real estate were next with applied investments of P32.9 billion, P19.8 billion and P15 billion, respectively. Countryside investments accounted for 76 percent, or P180.7 billion, of the figures. Central Luzon had the highest share, with pledges to the region accelerated by 248 percent to P77.6 billion, from the previous year’s P22.3 billion. The Southern Tagalog region received the second-highest share with P58.7 billion, while Davao region and Western Visayas rounded the first semester with P14.3 billion and P4.9 billion. The National Capital Region accounted for 24 percent, or P58.3 billion, of the investment pledges. The BOI’s first-semester performance is significantly better than that of the Philippine Economic Zone Authority, which saw its pledges decline by 55.86 percent from January to June. Potential investors are apparently holding on to their money, while existing locators are hesitant to expand operations, as some tax incentives might soon be removed under the proposed second phase of the Duterte administration’s tax-reform measure.
Major PHL tourism markets show slackened growth in H1 By Ma. Stella F. Arnaldo @Pulitika2010 Special to the BusinessMirror
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Bittersweet aftertaste
A shopper checks out the price tags of sugar-sweetened beverages in a Makati City supermarket. The tax-reform measure implemented by the Duterte administration slapped a P6-per-liter tax on drinks containing caloric or noncaloric sweeteners, and a P12-per-liter duty on beverages with high-fructose corn syrup. NONIE REYES
Copious rains cause ₧500M+ farm-output loss–DA report By Jasper Emmanuel Y. Arcalas @jearcalas
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arm-output losses due to torrential monsoon rains spawned by Tropical Depression Henry and severe Tropical Storm Inday had risen to P565.19 million, according to the Department of Agriculture (DA). Citing the latest damage report prepared by the DA Disaster Risk Reduction and Management Operations Center, Agriculture Secretary Emmanuel F. Piñol said the rice sec-
tor still suffered most of the production losses. “The rice sector suffered P428.03 million in losses as 26,667 hectares of rice paddies were damaged in the provinces of Pangasinan, Bataan, Bulacan, Nueva Ecija, Pampanga, Tarlac, Batangas, Rizal, Laguna, Occidental Mindoro, Negros Occidental and Aklan with an estimated volume of production loss at 314 metric tons,” Piñol said in his Facebook page on July 23. Piñol added that the two storms have battered seedbeds which result-
ed in the loss of 1,338 50-kilogram bags of rice. The corn sector lost 61 metric tons of production volume planted in municipalities of Asingan and Binalonan in Pangasinan, which amounted to at least P1 million, according to Piñol. “Meanwhile, damages and losses in fisheries amounted to a total of P136.16 million for the fish production and facilities. These include fishing gears and paraphernalia from CAR, Regions 2, 3 and Calabarzon,” he said.
OUTH Korea continued to be the top source of tourists for the Philippines, sending 815,683 of its citizens from January to June 2018. This developed as visitor arrivals in the first half of 2018 reached an all-time high of some 3.71 million, a 10.4-percent increase from the same period last year, according to the Department of Tourism (DOT). Separate DOT data obtained by the BusinessMirror show, however, that while the South Korean market accounted for a 22-percent share of total arrivals, the growth in South Korean visitor arrivals were a mere 2.6 percent in the first half of the year, compared to the 16-percent increase recorded in January to June 2017. The sluggishness of the South Korean market, though, was overcome by the arrivals from China, which recorded a 42-percent jump to 645,089 tourists in the first six months of the year. The market accounted for a 17.4-percent share in total arrivals, and was ranked second among the top source markets for tourist for the Philippines. Chinese tourists ate up one percentage point in South Korean tourists’ market share this year, as they beat their 33.4-percent jump in arrivals in the same period in 2017. Beijing had lifted a travel ban to the Philippines after President Duterte’s visit in 2016. It also promised to send 1 million tourists to the Philippines every year. In third spot was the United States, with arrivals growing by
8.65 percent to 557,833; followed by Japan at 316,060 (up 7.47 percent); and Australia at 140,260 (up 7.07 percent). In the same period in 2017, however, the US and Japan markets grew by 13 percent and 12.8 percent, respectively, an indication of some weakness. Only Australia exceeded its 3.8-percent growth in arrivals in the first half of 2017. In her first overseas trip as DOT Secretary, Bernadette Fatima Romulo Puyat last month made a pitch to the Japanese travel agencies and tour operators to visit the Philippines. She also introduced new tourism ambassadors, among them a Japanese singer and a former Miss Japan-Universe, as the DOT sharpens its marketing efforts toward the joshi tabi or female travelers. Local travel agencies had already been reporting some weakness in their inbound Japanese customer base. (See, “PHL seeks to attract more Japan women travelers, in the BusinessMirror, July 1, 2018.) Meanwhile, Romulo Puyat, in a news statement, said her agency’s partnership with the private sector, as well as the intensified convergence with relevant government agencies served as impetus in sustaining the upward trajectory of foreign arrivals. “The DOT’s continuous marketing promotions, aggressive actions to create new air routes and develop new tourism products, travel facilitation, and confidence in tourism investments boosted the industry and resulted in this stellar performance,” she said. “But I would like to emphasize, this would not be possible without the consolidated efforts of our stakeholders,” she added. Romulo Puyat expressed op-
timism that the first-half performance in arrivals this year, is a clear manifestation that the DOT would meet its target of 7.4 million foreign tourists by yearend. “We are actually on track. We are halfway the year and we are exactly halfway in our National Tourism Development Plan [NTDP] target arrivals.” Tourism arrivals data are gathered from the arrivals and departure cards of the Bureau of Immigration, as well as shipping manifests. For June 2018 alone, visitor arrivals were tallied at 528,747, posting an 11.35-percent increase from the June 2017 arrivals of 474,854 arrivals. Rounding up the first-half performance, Canada was among the top market sources with 121,098, which grew by 11.88 percent; the United Kingdom at 102,443 arrivals (up 9.4 percent); Singapore at 91,736 (up 7.66 percent); and Malaysia at 73,663 (up 2.01 percent). Sizeable arrival growths were tallied from Hong Kong and India, with tourists from Hong Kong rising by some 26 percent to 69,955 and tourists from India up 15.41 percent to 63,089. The only market which posted a decrease in arrivals was Taiwan. Tourists from Taiwan dipped 5.09 percent to 120,540. A poll by the Taiwanese Public Opinion Foundation of some 1,000 Taiwanese published in June indicated that the Philippines was their second most hated country, after North Korea. This is the second year in a row that the Philippines received the same designation from the same group. (See, “DOT pushes marketing amid decline in Taiwanese arrivals,” in the BusinessMirror, June 28, 2018.)
www.businessmirror.com.ph • Editor: Angel R. Calso
The World BusinessMirror
G-20 calls for more dialogue on increasing trade tensions
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UENOS AIRES, Argentina— The world’s top financial officials called on Sunday for more dialogue on trade disputes that threaten global economic growth, with one warning that differences remain and tensions could escalate further.
The two-day meeting of finance ministers and central bankers from the Group of 20 (G-20) nations came as the United States clashes with China and other nations over trade, with the nations imposing tariffs on billions of dollars of the other’s goods. A final communique said that although the global economy remains strong, growth is becoming “less synchronized” and risks over the short and medium terms have increased. “These include rising financial vulnerabilities, heightened trade and geopolitical tensions, global imbalances, inequality and structurally weak growth, particularly in some advanced economies,” the communique said. “We...recognize the need to step up dialogue and actions to mitigate risks and enhance confidence.” On Friday President Donald J. Trump renewed his threat to ultimately slap tariffs on a total of $500 billion of imports from China—roughly equal to all the goods Beijing ships annually to the US. The White House has also itemized $200 billion of additional Chinese imports that it said may be subject to tariffs. The US has also imposed tariffs of 25 percent on steel and 10 percent on aluminum, including from Europe. China, the European Union, Canada, Mexico and Turkey have counterpunched with taxes on US goods. EU tariffs on American products include Harley-Davidson motorcycles, cranberries, peanut butter, playing cards and whiskey. EU financial affairs commissioner Pierre Moscovici warned that such disputes are a threat. “Protectionism, I want to in-
sist on that, is good for no one,” Moscovici told reporters. “Trade wars are not easy...they create no winners, only casualties.” US Treasury Secretary Steven Mnuchin disputed that protectionism is the issue. “People are trying to make this about the United States and protectionism. That’s not the case at all,” he said at a news conference. “This is about the United States wanting fair and free trade....We very much support the idea that trade is important for the global economy, but it’s got to be on fair and reciprocal terms.” Mnuchin said there had been no “substantive discussions” with China about trade during the meeting. Asked what it would take to restart talks with the Asian giant, he said, “Anytime that they want to sit down and negotiate meaningful changes, I and our team are available.” As the gathering wound up, Moscovici said differences of position remain despite talks. “These meetings have been taking place in an international context which is very challenging.... Trade tensions remain high and they threaten to escalate further,” he said. Christine Lagarde, managing director of the International Monetary Fund, has warned that a wave of tariffs could significantly harm the global economy, lowering growth by about 0.5 percent “in the worst-case scenario.” Mnuchin disagreed on Sunday, saying that overall, the US economy has not been harmed by the trade battles set off by Trump’s gettough policies. He acknowledged, however, that some individual
Bank of Japan Governor Haruhiko Kuroda (left) and Japan’s Minister of Finance Taro Aso, chat after posing for a group picture at the G-20 meeting of Finance Ministers in Buenos Aires, Argentina, on July 21. AP Photo/Gustavo Garello
sectors have been hurt and said US officials are looking at ways to help them. “We see some micro impacts where people, our counterparts, are targeting very, very specific items, in very specific communities,” he said. “But from a macro standpoint, we do not yet see any significant impact on the economy.” So far, global markets have remained generally calm despite the US-China trade war and the other trade conflicts. But analysts say they expect Trump will impose more tariffs on China and potentially other key US trading partners. With those nations almost certain to retaliate, the result could be higher prices for Americans, diminished export sales and a weaker US economy by next year, they say. Moscovici said the G-20 meeting had not been tense. He said that countries must remain “coolheaded and maintain a proper sense of perspective” and that the
EU remains open to dialogue. “That’s why EU President JeanClaude Juncker and EU Trade Commissioner Cecilia Malmstrom will meet with Trump” in Washington next week, he said. “We hope this meeting will be productive and successful.” Mnuchin said that the US looks forward to those discussions. The G-20 nations is composed of traditional economic powers such as the United States, Japan and Germany and emerging nations such as China, Brazil, India and Argentina. Officials in Buenos Aires also discussed issues including the future of work and infrastructure for development, the international tax system and financial inclusion. It is the third of five meetings by finance ministers and central bankers scheduled in advance of a meeting of G-20 national leaders in Argentina to be held on November 30 and December 1. Mnuchin said Trump plans to attend. AP
Record temperature in Japan as heat wave grips the region
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OKYO—Japan recorded its highest temperature ever on Monday as a deadly heat wave continued to grip a wide swath of the country and nearby South and North Korea. The mercury hit 41.1 degrees Celsius (106 degrees Fahrenheit) in Kumagaya, a city in Saitama prefecture that is about 65 kilometers (40 miles) northwest of Tokyo, the Japan Meteorological Agency said. That broke the previous record of 41.0 °C in Ekawasaki on the island of Shikoku on August 12, 2013. Two lingering high-pressure systems have trapped warm and humid air above the region, bringing record-high temperatures for nearly two weeks. More than 40 people have died in Japan and about 10 in South Korea. “It is so hot these days that I cannot figure out whether I am in [South Korea] or in Southeast Asia,” said Kim Sung-hee, a student in downtown Seoul, where the temperature rose to 35.7 °C (96 °F). Ten people have died in South Korea of heatstroke and other heatrelated causes this summer, seven of them last week, the Korea Centers for Disease Control and Prevention said on Monday. About 1,040 people have fallen ill because of hot weather from May 20 to July 21, an increase of 61 percent over the same period
The thermometer reads 41.0 degrees Celsius (105.8 degrees Fahrenheit) in Kumagaya City, north of Tokyo, on July 23. Searing hot temperatures are forecast for wide swaths of Japan and South Korea in a longrunning heat wave. The temperature in the city north of Tokyo reached 41.1 °C (106 °F) on Monday, the highest ever recorded in Japan, as a deadly heat wave gripped a wide swath of the country and nearby South Korea. Daiki Katagiri/Kyodo News via AP
last year, it said. South Korea’s highest-ever morning low was recorded in the city of Gangneung, where the temperature was 31 °C (88 °F) at 6:45 a.m. The morning low in Seoul was 29.2 °C, a record for the country’s capital, according to South Korea’s weather agency. The mercury hit 39.9 °C (103.8 °F) in the southeastern town of Hayang, the highest temperature in the country so far this year. In North Korea residents fanned themselves on crowded trolleys or
protected themselves from the sun with brightly colored parasols as temperatures in Pyongyang, the capital, reached 34 °C. Weather reports said even higher temperatures were recorded on the country’s eastern coast. Thousands of people in Japan have been rushed to hospitals with heat stroke symptoms during the heat wave. Kyodo News agency has tallied more than 40 deaths. Many of the victims have been elderly people who were not using air conditioning. The temperature reached 39 °C
(102 °F) on Monday in central Tokyo, the highest temperature this year. The worst of the heat wave is expected to be over this week. Tourists in Tokyo’s historic Asakusa district struggled with the heat. Cosett Romero from Mexico said she and her family were getting headaches. “It’s difficult to us because we don’t have this heat in Mexico,” she said. Authorities warned people to stay inside and use air-conditioning. “The weather recently in Japan is like being in a sauna,” Tokyo Gov. Yuriko Koike said at a news conference that highlighted the 2020 Summer Olympics, which open in Tokyo two years from Tuesday. She said that the city has been working to address heat concerns for both fans and athletes. The marathon and some other outdoor Olympic events will start early in the morning. Other steps include developing road pavements that emit less surface heat, setting up mist sprays and planting tall roadside trees. Koike also cited traditional ways of cooling in Japan, such as hanging straw screens and spraying water on road surfaces. “But our traditional wisdom is not enough to beat the heat like this,” she acknowledged, “so we will be using cutting-edge technology.” AP
Tuesday, July 24, 2018
A5
Oil holds as trade fears weighed against US rigs and rhetoric
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il traded near $68 a barrel as investors assessed the impact of escalating trade frictions between the world’s two biggest economies against a decreasing number of American oil rigs and flaring tensions between the US and Iran. September futures in New York were little changed following a third straight weekly decline. The world’s top finance chiefs warned on Sunday that trade tensions threatened global growth as the engines of leading economies fall out of sync. The US rig count fell by the most since March, while President Donald J. Trump launched a new broadside against Iran and warned of “consequences” if counterpart Hassan Rouhani again threatened America. An evolving trade conflict between the US and China has caused oil to retreat from the highs of June and spurred price volatility, which had risen last week to the highest level since February. The Chinese yuan climbed on Monday after a series of tweets by Trump undermined the outlook for the greenback, while the market has also been supported by persistent threats from America to curb exports from Iran. What happens with the rising trade conflict between the US and China is “going to be the dominant driver for commodities in shorter term.” Daniel Hynes, a senior strategist at Australia & New Zealand Banking Group Ltd., said by phone. “We’re seeing a little bit of volatility around investor positions and currency moves from the trade tensions.” West Texas Intermediate (WTI) crude for September delivery traded at $68.08 a barrel on the New York Mercantile Exchange, down 18 cents, at 2:39 p.m. in Singapore. The August contract, which expired on Friday, closed 1.4 percent higher
at $70.46 a barrel. Total volume traded was about 52 percent below the 100-day average. Brent for September settlement lost 9 cents to $72.98 a barrel on the London-based ICE Futures Europe exchange. Prices fell 3 percent last week. The global benchmark crude traded at a $4.86 premium to WTI. Futures fell 0.6 percent to 490.6 yuan on the Shanghai International Energy Exchange. The contract increased 0.5 percent last week.
Trade frictions
As Trump prepares to slap tariffs on $500 billion of Chinese goods, trade dominated discussions over the weekend by finance ministers and central bankers from the Group of 20 nations. The main risks include increasing financial vulnerabilities, heightening trade and geopolitical tensions, as well as structurally weak growth, according to the statement published by G-20 after their two-day summit in Buenos Aires. In the United States the number of working rigs dropped by five to 858 in the week ended July 20, the biggest decline in almost four months, Baker Hughes data showed. The decline in oil rigs came at a time when government data showed an unexpected build in crude inventories in the week ended July 13. Meanwhile, Rouhani warned the US that conflict with Iran would be the “mother of all wars,” and to stop pursuing hostile policies against the Persian Gulf state including threatening its oil exports. His US counterpart Trump responded by saying “NEVER, EVER THREATEN THE UNITED STATES AGAIN OR YOU WILL SUFFER CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE,” in a Twitter post. Bloomberg News
Fears of currency war ease after Mnuchin’s two days in Argentina
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nited States Treasury Secretary Steven Mnuchin landed in Buenos Aires for a summit on Friday with the risk of a currency war in the air. He left two days later with the world’s top finance chiefs feeling much more at ease. Mnuchin over roughly 48 hours tamped down concern of any shift in currency policy, hammering home in a press conference early Saturday that America’s longstanding commitment to a strong greenback remains intact. He also said the US isn’t trying to intervene in the dollar market. His comments at the Group of 20 (G20) nations summit followed tweets on Friday from President Donald J. Trump, who accused China and the euro area of manipulating their currencies while complaining that a rising dollar is hurting the US. His comments caused the greenback on Friday to weaken the most in four months as investors feared Trump was embarking on a new era of jawboning the currency to boost exports. But by the end of the G-20 meetings, few central bankers or finance ministers were talking about a potential currency war in which nations compete to devalue their exchange rates. “We didn’t discuss the topic,” Spain’s Economy Minister Nadia Calvino told reporters on Sunday afternoon.
Trade conflict
G-20 participants instead focused much of their attention on a global trade conflict, as tit-for-tat tariffs between the US and its partners threaten to undermine business confidence, disrupt global supply chains and elevate consumer prices. International Monetary Fund Managing Director Christine Lagarde also raised alarms about the disputes, urging G-20 nations to resolve disagreements via international cooperation. G-20 nations published a final communique at the close of the summit that warned risks to the world economy have increasedamidheightenedtradetensions.
After more than a dozen bilateral meetings, plenary sessions and a working dinner at a local steak house, Mnuchin said it had been simple to reach agreement on the group’s final statement. “It was the easiest communique—it was finished yesterday,” he said on Sunday. Despite his diplomacy on the currency front, Mnuchin didn’t soften the administration’s stance on trade and its tough rhetoric against Beijing. As part of its push to rebalance world trade in America’s favor, the White House has slapped tariffs on global steel and aluminum imports as well as $34 billion of Chinese goods. Mnuchin told reporters on Saturday the White House would continue to pressure countries to open their markets to American exports and investments, and questioned whether the yuan’s decline was the result of market forces or government interference. Mnuchin said the US will closely monitor China’s exchange rate, which has fallen more than any major currency in the past month. The US position on trade attracted sympathy from some participants of the G-20 meetings, with Australia’s Treasurer Scott Morrison saying the Americans have understandable complaints. “There are some grievances that have been around for a decade and the titfor-tat announcements on tariffs were an unconventional way to resolve those issues,” he said on the sidelines of the summit. The Europeans were less understanding and voiced support for a unified position in confronting the US. The summit wrapped up just days before European Commission President JeanClaude Juncker travels to Washington to discuss trade issues, including US threats to slap tariffs on automobile imports. French Finance Minister Bruno Le Maire said progress is unlikely as long as the US tries to use duties as leverage. “We refuse to negotiate with a gun to the head,” he said. Bloomberg News
A6 Tuesday, July 24, 2018 • Editor: Angel R. Calso
Opinion BusinessMirror
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editorial
The economics of greening the grid
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onsistent with the country’s commitment to the Paris Agreement, greening our electricity grid would have considerable benefits other than lowering our carbon emission.
In a recent speech during the symposium “Convergence for 100% Renewable Energy Philippines,” Sen. Loren B. Legarda said if we ignore climate-change science and the contribution of fossil fuels to global warming, we cannot ignore the economics, which shows renewable energy (RE) has become a cheaper, long-term power source. Citing a report of the International Renewable Energy Agency (Irena), the senator said all renewable-energy technologies should be competitive on price with fossil fuels by 2020. The Irena report said the cost of generating power from onshore wind has fallen by around 23 percent since 2010, while the cost of solar photovoltaic (PV) electricity has fallen by 73 percent. Other estimates indicated that solarpowered electricity cost has declined by 90 percent, while the cost of windpowered generation has fallen 50 percent since 2009. Price comparisons by Irenaand recent results of Philippine auctions showed that onshore wind schemes now cost $0.06 per kilowatt hour on average, solar at a range of $0.05 to $0.10 per kWh, while electricity generated by fossil fuels falls in the range of $0.05 to $0.17 per kWh. If the primary motivation is to save on cost or turn a better profit for businesses, RE seems the way to go, simply because technical innovation around its generation has seen costs plummet. This is somewhat corroborated by a Bloomberg New Energy Finance report—“Fossil fuels squeezed by plunge in cost of renewables,” published on March 28—which said in most places, wind and solar will work cheaper than coal by 2023, based on rationalized cost of energy, a measure that takes into account the expenses from buying equipment, servicing debt and operating power plants using each technology. At this point, solar seems to stand out from the rest of the renewables, particularly in the Philippines. Leandro Leviste, founder of Solar Philippines (and Senator Legarda’s son), had offered 24/7 power at P2.99 per kWh to Manila Electric Co. (Meralco) in January this year, a price that he claimed would allow the distribution utility to save an average of 30 percent, thanks to advances in solar energy and battery storage. Leviste said the cost of solar energy, based on current trends, should drop to P1.25 per kWh by 2020. Even with current battery prices, he said solar can replace all gas, oil, and diesel power in the Philippines, saving the Filipino consumer almost P100 billion a year and lowering our generation costs by up to 20 percent. In an exclusive interview with ANC’s The Boss last Friday, Francis Giles Puno, president and COO of First Gen, the country’s largest producer of natural gas-fired power, said solar power’s share in their portfolio will increase as costs of producing it go down. “Solar is a small component of our business today, but because of the reduction of cost of solar, we see that becoming more part of our business moving forward,” Puno said in the ANC interview. “When you look at the exponential drop of costs of solar, and then moving forward the exponential drop in cost of battery storage. That would really be a game changer,” Puno said. “Once a solar plant is set up, the cost of operating it is practically zero.” Looking at the information available, even with the supposed reliability that coal-fired and other fossil fuel-fired power plants can guarantee today, it is hard not to see how power utilities and consumers would eventually turn to RE sources such as solar and wind in the near future, not just to lower emissions and fight climate change, but because of RE’s lower prices, better (battery and storage) technology and increasing reliability. In this regard, it also makes little sense for the Philippine government to keep approving more long-term power plants that use fossil fuels (on top of those already existing), when in a few years’ time the power they sell will not only be more expensive but more likely obsolete. You have to wonder why we are so intent on bucking the global trend and fighting an inevitable fate.
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THE Entrepreneur Continued from A1
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ousing developers and construction companies now compete with one another to recruit the best skilled workers amid the rush to build new condominiums, subdivisions, office towers, shopping malls, hotels and resorts as well as infrastructure projects under the government’s “Build, Build, Build” program. Given t he st rong dem a nd for construction workers, these highly skilled workers and laborers receive salaries above the minimum wage. Countries in the Middle East, which are building new cities, also prefer skilled Filipino workers. Globally, Filipinos are known in the hospitality and shipping industries. You would most likely meet Filipino receptionists at hotels in Singapore, Macau, Hong Kong or Dubai, Filipino flight crew at Qatar Airways or Filipino staff aboard Caribbean and Mediterranean cruise ships. Locally, the completion of new hotels, resorts, spas and other
lei su re est abl i sh ment s h ave opened job opportunities for thousands of Filipinos. I believe that with proper education and skills training, every Filipino can find a job or a productive endeavor under the current economic condition, where the gross domestic product grows at least 6 percent annually. There is no doubt that the employment situation is much better today than in the previous years. In its first Southeast Asia Online Recruitment Trends Report, job web site Monster.com noted that the overall job market activity was positive throughout 2017, and the Philippines maintains a positive outlook for online hiring in 2018.
Job-killing automation
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PHL jobs situation much better today
OUTSIDE THE BOX
I
n the ever expanding universe of “interesting...stupid, but interesting...” comments on social media, the following discussion may be a winning finalist for 2018. Someone had posted the relatively old news that McDonald’s USA was replacing “live” counter employees with automated ordering terminals in all of their stores. The comment said the company should be taxed “millions to stop the jobs from being eliminated.” And that comment was probably posted from a smartphone, which is the extension of a technology that replaced tens of thousands of telephone switchboard operators. The Luddites were a group of English textile workers and weavers in the 19th century who destroyed weaving machinery as a form of protest. Luddites objected to the rising popularity of automated textile equipment, threatening the jobs of skilled workers. The comment from “Mr. Stupid,
but interesting” is just as ignorant and shortsighted as the Luddites of two centuries ago. The increase in production of the British textile industry due to this new job-killing technology created thousands more jobs than were initially lost due to automation. Cheaper textile goods were now being shipped globally, creating more jobs in logistics and shipping. Employment in the textile industry became stable as capital investment in machinery forced factories to maintain constant production—and, therefore, employment—even as buyer demand fluctuated.
Locally, the completion of new hotels, resorts, spas and other leisure establishments have opened job opportunities for thousands of Filipinos. I believe that with proper education and skills training, every Filipino can find a job or a productive endeavor under the current economic condition, where the gross domestic product grows at least 6 percent annually.
ing as the Department of Public Works and Highways’s road projects and rehabilitation of publicschool facilities are already under way nationwide.” The construction sector was the biggest employment contributor, generating 468,000 jobs, as the Build, Build, Build program takes off. Under the Philippine Development Plan 2017-2022, the government aims to bring down the unemployment rate to 4.7 percent in 2018 and to 4.3 percent in 2019. I think this is possible if we properly train our young people to meet the needs of different industries. The growth of the agriculture sector will also be crucial, because this sector accounts for 23.9 percent of the labor force. This means that more than 9.5 million Filipinos rely on agriculture for their livelihood. Finally, I believe that the ultimate solution to the unemployment problem is entrepreneurship. If we help the unemployed and the underemployed become entrepreneurs, this nation will surely grow faster and soon join the ranks of the upper-middle income economies.
Data from the Philippine Statistics Authority (PSA) show that unemployment rate declined to 5.5 percent in April 2018 from 5.7 percent in the same period last year, as more Filipinos found jobs during the period. This figure was the lowest jobless rate for all the April rounds of the Labor Force Survey in the past decade, according to the PSA. About 40.9 million Filipinos were employed as of April 2018, following a net employment generation of 625,000 over the preceding 12 months. The National Economic and Development Authority traced the growth in employment to “increased infrastructure spend-
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While labor costs are reduced by automation, in the long run these savings are effectively passed on to the consumer. The cheaper “automatic dial system” that replaced human switchboard operators reduced the cost of telephone service and gave everyone the financial ability to have a telephone. Without the development of the mechanical telephone automatic switching system, we would have to go through a “live operator” to connect to the Internet if it even existed. The automated teller machine— introduced in the 1960s—has replaced countless bank tellers worldwide and saved consumers millions of hours of waiting in line. Do we really want to go back to the “good old days”? As to McDonald’s replacing its counter personnel, this will also reduce consumer-waiting time. Better yet, you do not have to wait in line behind someone who changes his order three times. Now he can take as much time as he wants hitting the “cancel” button at the ordering terminal. McDonald’s has also found that not only are labor costs reduced. McDonald’s CEO Steve Easterbrook said this is about change. “What we’re
finding is when people dwell more, they select more. So there’s a little bit of an average check boost.” That could be as much as 5 percent to 6 percent the first year of terminal operation. Remember standing in line— actually sitting in line since it took so long—paying your Meralco bill? Today, Meralco has an additional 2,200 “offices” where you can pay through Cebuana Lhuillier. How many cashiers did the Department of Foreign Affairs not hire because you can pay for your passport at 2,285 different 7-Eleven convenience stores in the Philippines? Blame all those lost cashier jobs on the same technology that is replacing fast-food counter personnel. Yet, even as McDonald’s Singapore is also moving completely to ordering terminals, two weeks ago they had a hiring fair to employ an additional 2,500 people—in addition to the 10,000 existing employees—to expand their operations. Of course, automation is going to replace jobs and change employment. If a “machine” can do it better, faster, and cheaper than a human, that is good. That is called progress.
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Opinion
What Fed will signal at meeting next week
A US lawmaker and the Aquino regime spread fake news to destroy the Marcoses
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BusinessMirror
By Mohamed A. El-Erian | Bloomberg Opinion
he Federal Reserve is highly unlikely to raise rates at its policy meeting next week. The view that the event will be a snoozer, with little potential to move markets significantly, is reinforced in two ways: The semiannual report to Congress on monetary policy by Chairman Jerome Powell last week that involved comprehensive written submissions and hours of Q&A; and because the meeting on July 31 and August 1 will not be accompanied by a news conference or the release of new economic and policy projections (including the “blue dots”). Yet, this sense of quiet may be too partial. Central bank officials face a series of delicate internal judgement calls about the economy and the path of both interest rates and balance-sheet policies. They must decide whether to tweak their prior market signals on four issues in particular. Although domestic growth and inflation have been picking up in line with Fed expectations, the overall operating economic and financial environment is uncertain in several respects. For example: Financial market behavior continues to confound: A relatively flat yield curve has a differential between two- and 10-year government of only 30 basis points, a level that in the past has signaled a significant economic slowdown. Trade policy is also unusually fluid, with the US and its major trading partners engaged in actual or threatened tit-for-tat tariff escalations. Rather than maintain upward momentum, wage growth decelerated in June, according to the latest employment report, despite another month of robust job creation. The accompanying uptick in labor-force participation resurfaces the notion that there may still be some slack in the jobs market despite a historically low unemployment rate. Productivity trends continue to puzzle economists. There is still too little to determine with confidence whether the persistently sluggish data are due to mismeasurement and various timing/temporary issues or dampening secular forces. Finally, growth momentum outside the US seems to be losing steam, threatening America with economic and financial headwinds. Open Market Committee mem-
bers will have all of this in front of them when they assess their economic and policy baseline, and decide what to signal to markets. Speculation about possible tweaks was fueled last week by an intriguing last-minute change that Powell made to his previously circulated written statement to lawmakers on July 17: He added the qualifier “for now” to a routine phrase about the Fed’s intention “to keep gradually raising the federal funds rate.” Traders in the equity market, though not in all other markets, interpreted this tweak as the sign of a somewhat more dovish tone in the Fed’s policy intention. The central bank must now decide whether to confirm this by signaling that it is: Taking its baseline for the total number of rate hikes in 2017 back to three from four because of less accommodating international conditions; Reducing the likelihood that the next hike will be in September; Suggesting an earlier end point for the balance-sheet reduction process, which would leave the Fed with an overall balance sheet that is still notably high in historical terms; and reinforcing the view that the neutral rate is highly time variant and is reverting back to a higher and historically more consistent level. As I have argued before, I believe the Federal Open Market Committee (FOMC) led by Powell’s predecessor, Janet Yellen, would have jumped at the opportunity to signal all four given the uncertain operating environment. I suspect that Powell’s committee may be willing only to signal the first two items at this stage. But that does not mean it may not eventually point to the others. It will just take some time.
Singapore hack a speed bump for $9-trillion industry By Tim Culpan | Bloomberg Opinion
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s far as cyberhacks go, those in health care are particularly irksome. The notion that some stranger, a malicious one at that, has accessed our medical data gets under most people’s skin. Even beyond financial and employment data, there’s nothing more personal than our history of diseases, diagnoses and medicines, including possibly psychological or even terminal conditions. News at the weekend that Singapore’s health-care system sustained a major attack is not only what many consumers fear, but what disturbs the industry itself. That Prime Minister Lee Hsien Loong was not only a victim of the hack but a target of it added to that concern. To be clear, data accessed on Lee and 1.5 million other patients were mainly personal details, such as names, identity card numbers, gender, race and date of birth, and not medical. But 160,000 people had records on some of their medicine usage accessed. Lee himself signed up for the country’s digitization project, saying that doing so would improve the quality of care across medical professions, though he posted on Facebook that he was aware of the downsides. Of course, I also knew that the database would be attacked, and there was a risk that one day, despite our best efforts, it might be compromised. Unfortunately that has now happened.
His calm response, rather than outrage, is appropriate among those trying to build the future of health care, though it’s scant consolation to people whose records were accessed. Such hacks imperil a global rollout of health tech that includes digitized patient records, Internetconnected diagnostic machines, and the deployment of artificial intelligence to spot and treat disease. Ask any health-tech CEO what their biggest challenges are, and without a doubt regulation and government caution will be near the top of the list. Any time there’s a breach and an outcry you’ll find health-care bureaucrats the world over hunkering down to avoid being responsible for the next scandal. “Privacy, privacy, privacy,” they’d cry when a proposal to improve efficiency, cut costs, or upgrade care crossed their desks. “Just look at what happened in Singapore.” They’re not wrong—privacy matters. Yet, billions of dollars is being poured into new companies every year—$6.4 billion in the US in 2017, according to CB Insights—to boost digital health. That’s a drop in the ocean compared with the $8.7 trillion that Deloitte Touche Tohmatsu Ltd. estimates will be spent on health care globally in 2020. Expect more money to pour into the global cybersecurity industry, with a special focus on health care, after this incident. The Singapore hack will be a speed bump for medical digitization, not a roadblock.
Cecilio T. Arillo
database Part One
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N March 5, 1986, the late President Corazon Cojuangco Aquino discussed the recovery of the Marcos wealth with the late US Democrat Congressman Stephen Solarz of New York who came to Manila to talk about the Military Bases Agreement, among other things.
A week later, President Aquino issued Executive Order 2, freezing all assets of the Marcoses and their associates. With this sweeping edict, the Presidential Commission on Good Government (PCGG) no longer had to bother with filing cases in court against particular persons, corporations and other assets. A nother week had passed, Solarz painted Marcos as a corrupt president, releasing to the international press a “Marcos document” purportedly showing proof of corruption involving Marcos and 79 Japanese companies contracted to undertake Philippine projects funded with Japanese aid. The scandal-sensitive Japanese Diet promptly asked the National Revenue Bureau (NRB) to investigate the involved firms. The Solarz document later turned out to be a hoax as shown by the NRB findings, but the local and international media deliberately obfuscated the NRB official report. In Japan, however, Asahi Shimbun, the largest newspaper in that country, exposed the sham story, thus: “The firms were never found to have committed any payoffs. The only firms that were mentioned by the NRB Report as failing to report income were Mitsubishi, C. Itoh, and Kawasaki, and the amounts involved were rather small. “O n top of t h at , t he y a l l claimed that those unreported income had nothing to do with Marcos. They all said that technical interpretation of tax laws was the reason for the discrepancy.
“Marubeni Corporation, which was known to have been the largest recipient of project-related business, was found to be entirely proper in its business dealing. The NRB could not find any clue or even suspicion of payoff to Marcos. “Sumitomo, which handled the Cagayan Valley Electrification Project, paid $210,000 as commission to Philippine agents, but those were also considered within normal business practice. One of the executives who handled the deal said, ‘I’ve never heard of any money going to President Marcos.’ “With the NRB’s efforts, the ‘Marcos document’ failed to turn up any incriminating evidence against Mr. Marcos. Formal investigation in Japan into Marcos corruption had now come to an end.” Solarz had actually given the press a litany of fake news, and he remedied the falsehood by deliberately not reporting the NRB’s official findings to the US Congress and the American press. Capitalizing on Solarz’s spate of lies, they—the yellows and their pseudo-moralists and hypocrites—continued to demonize President Marcos and his wife, former First Lady and now Ilocos Norte Second District Rep. Imelda Romualdez Marcos. Worse, the Marcoses’ side of the story was never printed by the press, especially how the Cor y A qu i no ad m i n i st rat ion subjected them to prejudgment of guilt, deprived them of their worldly possessions, restricted their movements and charged t hem w it h rac keteer ing , ob -
Tuesday, July 24, 2018 A7
The Supreme Court eventually disallowed the assumption that the Marcos assets were “illgotten.” The SC would rule that the government had to substantiate and prove its allegation that the sequestered or frozen assets were, in fact, illgotten, specifically citing the case of Republic of the Philippines (PCGG) v. Sandiganbayan, et al. (G.R. 119292) on July 31, 1998.
struction of justice and mail fraud involving billions of pesos in that trial of the century in New York. Records of the New York Racketeer-Influenced and Corrupt Organizations (RICO) trial and other investigative materials put into a 347-page best-selling book, A Country Imperiled (Tragic Lessons of a Distorted History), authored by this writer and published by Amazon in 2011, showed how the Marcoses were persecuted. They were not only maltreated by individuals; governments and superpowers also tried to systematically destroy them, using greedy politicians and elite businessmen, backed by 16 foreign media personalities and hundreds of local journalists and propagandists. After they conspired to oust the Marcoses from power and accused them in the RICO case of allegedly stealing money from the Filipino people, the Aquino regime and US government prosecutors presented in court 95 witnesses and 350,000 documents, including those allegedly seized from their private chambers in Malacañang purportedly showing that they embezzled billions of pesos. One must be prepared to take the absurd in looking at the socalled loot that had been transformed into a propaganda hyperbole to demonize the Marcoses. One estimate put the “ill-gotten wealth” at $356 million. Other
charges, based on rumors, said the Marcoses had Swiss accounts ranging from $7 billion to $13.4 billion and a “gold hoard” worth $250 billion stashed in Swiss banks and other overseas banks. Whatever was the figure, it doesn’t simply make sense at all. How could the Marcoses have stolen such huge amount when the total accumulated official budget of the Marcos regime in 20 years was only P486.2 billion? Besides, Victor Macalincag, the national treasurer and deputy minister of finance at that time, admitted that there was P28 billion in the national Treasury when President Marcos was forcibly exiled to Hawaii, debunking claims by Cory and her supporters that the Treasur y was empty. By comparison, the accumulated budgets of the five presidents who succeeded President Marcos—from President Cor y Aquino, her son Benigno Aquino III, and the three presidents between them, Ramos, Estrada and Arroyo—reached more than P35 trillion in over 31 years. In the post-Marcos years, the country saw a series of plunder cases, corruption in high places, economic sabotage, human-rights violations, insurgencies, hundreds of killings of journalists and serious problems of brownouts, flooding and horrendous traffic in the metropolis. Exercising dictatorial powers, Cor y Aquino ordered the sequestration of all assets of the Marcoses without according them due process. Executive Order 1 said: “Vast resources of the government have been amassed by former President Ferdinand E. Marcos, his immediate family, relatives and close associates...” The Supreme Court eventually disallowed the assumption that the Marcos assets were “illgotten.” The SC would rule that the government had to substantiate and prove its allegation that the sequestered or frozen assets were, in fact, ill-gotten, specifically citing the case of Republic of the Philippines (PCGG) v. Sandiganbayan, et al. (G.R. 119292) on July 31, 1998. To be continued
World’s most powerful app is squandering its lead By Tim Culpan Bloomberg Opinion
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encent Holdings Ltd.’s strategy for expanding WeChat Pay globally is pretty straightforward: Follow the (tourism) money. Grace Yin, operations director of WeChat Pay’s international business, summarized Tencent’s approach at the RISE Conference earlier this month in Hong Kong: If a place has a Chinese tourist, then this place is our target. It’s a smart strategy. Simple, elegant and actionable with WeChat Pay now accepted in 25 countries. But it’s also decidedly unambitious. The focus in those 25 nations is solely on the merchant side of the equation—to accept money from Chinese travelers. “We don’t have a plan in the next three years to do a payments wallet outside of China, except Hong Kong and now also Malaysia,” Yin told me. My first thought: What a wasted opportunity. I understand her thinking. WeChat is a decidedly Chinese phenomenon. While it’s ubiquitous and even crucial to daily life there, it’s the No. 1 chat app in only three countries, according to the annual Global Digital report published by WeAreSocial and Hootsuite. WhatsApp is the leader in 128 countries, while
Facebook Messenger reigns in 72. Even Viber is more widespread. But those apps don’t offer payments in all those countries. Although WhatsApp and Facebook Messenger have more users, WeChat’s depth of services—including bookings, bike rentals, payments, MiniApps and news—make it the world’s most powerful. Facebook Inc. has squandered its $19-billion WhatsApp purchase of four years ago by doing nothing to expand its feature set. (Facebook does at least see the potential, having decided to dip its toe in the water by rolling out WhatsApp Pay in India, a project that recently hit some hurdles over privacy concerns.) Meanwhile, its own Facebook Messenger app has barely innovated. Tencent’s lack of interest in taking WeChat Pay to a broader market is based upon the fact that the rest of the world is relatively small. Head office staff say only 20 percent of the app’s users are registered outside of China, according to Matthew Brennan, the founder of China Channel, a WeChat consultancy. That would put the number at about 200 million, a figure I have trouble believing. By analyzing survey data from Global Digital and after discussions with other industry folk, I would put the figure at more like 100 mil-
One objection I’ve heard about WeChat Pay spreading its wings concerns privacy and Tencent’s cooperation with Chinese authorities. But user habits, even after the Cambridge Analytica scandal, tell me people don’t care that much (even if they should). And when presented with a chat app with better functions, such as a mobile wallet, I think many will switch. So WeChat’s 100 million to 150 million nonChina users today could climb as high as 250 million in short order if Tencent offers the same kind of functionality as the domestic version. lion to 150 million. I’m willing to be corrected if someone has reliable data they can share with me. I asked Tencent for comment, and they declined to provide a geographical breakdown. I think this is a mistake, and part of Tencent’s insular mentality toward WeChat, WeChat Pay and their potential. Having 100 million global chat users is a golden opportunity, not an inconsequential market.
Apple Pay only has 127 million, or 16 percent of iPhone users, according to Loup Ventures’s Gene Munsters. And that’s not even a wallet service, which allows person-to-person transactions. The recent introduction of Apple Pay Cash in the US shows that even Cupertino sees the potential for direct P2P money transfers. Japan’s Line Corp. has jumped on the bandwagon, and it’s a good bet Ant Financial will try to make AliPay more global. O ne ob je c t ion I ’ve he a rd about WeChat Pay spreading its wings concerns privacy and Tencent’s cooperation with Chinese authorities. But user habits, even after the Cambridge Analytica scandal, tell me people don’t care that much (even if they should). And when presented with a chat app with better functions, such as a mobile wallet, I think many will switch. So WeChat’s 100 million to 150 million non-China users today could climb as high as 250 million in short order if Tencent offers the same kind of functionality as the domestic version. One day, chat plus wallet will be as obvious a combination as mobile phone plus camera. Tencent did a phenomenal job making WeChat Pay ubiquitous in China. It’s squandering that lead if it refuses to have global ambitions.
2nd Front Page BusinessMirror
A8 Tuesday, July 24, 2018
1 dead, 1 missing in Olongapo slides as parts of Luzon remain flooded
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By Henry Empeño | Correspondent & Rene Acosta @reneacostaBM
UBIC BAY FREEPORT—One person died while another was reported missing after several landslides occurred in this free port and nearby Olongapo City, as Tropical Depression Josie battered Central Luzon on Sunday. According to the Olongapo City Information Office, 35-year-old Maria Veronica Rafael died when their house along Otero Avenue collapsed in a landslide as heavy rains softened the hilly residential area at Barangay Mabayuan on Sunday night. Five other persons who were trapped in the house with Rafael were reported injured, but have been brought out to safety. Meanwhile, an unidentified worker remains missing in a massive landslide at dawn on Monday along Aparri Road in this free port, according to a report from the Subic Bay Metropolitan Authority (SBMA). At least three major slides were reported on major roads in the Subic Bay Freeport Zone, and another three in Olongapo City. SBMA Chairman and Administrator Wilma T. Eisma said SBMA rescue workers pulled one victim out of the muddy debris at about 6:50 a.m. on Monday, but another, believed to be a watchman for the Vieva Sun International Trading and Development Corp., has yet to be found as of press time. Eisma said members of the SBMA Emergency Response Team also rescued one family at the
Vieva Sun compound at about 3:50 a.m. after the landslide occurred. In Olongapo, another landslide survivor, a 15-year-old male, was reportedly found by rescuers after another landslide engulfed their home in Barangay Santa Rita. Heavy rains caused by TD Josie and the southwest monsoon (habagat), and abetted by high tide, also caused flooding in 16 of the 17 barangays in Olongapo, as well as lowlying areas of the Subic Bay Freeport Zone starting Sunday morning. At 9 a.m. Sunday, SBMA Chairman Eisma stopped the then ongoing Salomon Xtrail Run at the El Kabayo and Pamulaklakin forest areas because the participants were at risk while having to cross swollen streams. In Olongapo, a total of 661 families composed of 2,088 persons sought safety in 20 evacuation centers in various barangays, as floodwaters reached neck-deep in some areas. The SBMA Emergency Response Team also fielded trucks and equipment to help stalled vehicles in flooded areas, particularly at the Tipo Road-Maritan Highway junction leading to the Subic-ClarkTarlac Expressway, and assisted in
SOUTHWEST MONSOON AFFECTING LUZON AND VISAYAS as of 5:00 pm - July 23, 2018
Aerial photo shows the devastation caused by a landslide at the Aparri Road in the Subic Bay Freeport. CONTRIBUTED PHOTO
evacuating residents from flooded areas in Olongapo City. Rescue teams from the SBMA worked round the clock to clear eroded areas and remove fallen trees for the safety of passing vehicles.
4 dead from rains, floods
The death from the Olongapo slides brought to four the number of people who have died while two others have been reported missing in the widespread flooding over the past days, particularly in provinces in Central and Northern Luzon. The NDRRMC sent on Monday additional rescue teams to flood-stricken areas, particularly in the provinces of La Union and Pangasinan where the flooding was reported to have been very severe, trapping some residents atop their homes for days. The Air Force flew officials in Pangasinan for them to have a closer and wider assessment of the effects of the flooding. The NDRRMC said in its report that the combination of heavy rains and flooding have affected 914,035
families or nearly a million people in Regions 1, 2, 3, 4A, 4B, 6 and in the Cordillera Administrative Region. The flooding was reported to have been very high in at least 374 barangays, shutting down 62 key roads and highways and five bridges to traffic. Landslide incidents also occurred in 67 areas in provinces in Northern, Central and Southern Luzon and in Western Visayas.
Red alert
Meanwhile, the Armed Forces Northern Luzon Command (Nolcom) has deployed its disaster response team units (DRTUs) to flood-stricken areas in Central and Northern Luzon. Nolcom spokesman Lt. Col. Isagani Nato said they have also raised their alert level to “red” in response to the request for help from the regional disaster offices. He said Nolcom was utilizing its units from the different Joint Task Forces (JTFs) with a total of 40 to 50 DRTUs deployed or pre-deployed in areas flooded amid the rains. “Troops and equipment were sent to conduct Humanitarian Assistance and Disaster Response Operations in support to authorities responsible in disaster response,” Nato said. He said Nolcom commander Lt. Gen. Emmanuel Salamat has also ordered all the joint task forces to anticipate the effects of continuing heavy rainfall on low lands and cover Nolcom’s maritime areas as well.
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Leadership struggle delays Duterte’s speech in House Continued from A1
there being a quorum. The position of Speaker may only be declared vacant through nominal voting by a majority vote of all the members. Also, House Rule 3, Section 11, said whenever there is a vacancy, the Speaker shall be elected by a majority vote of all the members. House Minority Floor Leader and Quezon Rep. Danilo Suarez and House Deputy Minority Leader and Buhay party-list Rep. Lito Atienza were among the first lawmakers who signed the manifesto. According to Atienza, majority of the lawmakers wanted to change the current leadership of the lower chamber and have Arroyo replace Alvarez as the latter “was acting like he had kingdom… and he acts as if he is Congress.” Many congressmen also resented the way Alvarez made it look like majority of them supported his push for “no elections” in 2019, ostensibly to afford lawmakers more time to deliberate on Charter changes. Atienza said in a CNN interview. However, Kabataan Rep. Sarah Elago slammed the move and said “it could only be with the backing of Duterte that former President, now legislator Gloria Macapagal Arroyo went as far as bending the House rules and taking brazen steps to shamelessly power-grab [the] Speakership.” “In rotten, traditional politics, it is enraging how payback time prevails at the expense of public interest. The Duterte administration has started to rehabilitate the Marcoses. Now, it wants to put Arroyo back in power, way ahead of the warring factions of the ruling class,” Elago said. Anakpawis Rep. Ariel Casilao said the “rehabilitation” and “return to power” of Arroyo is a clear political accommodation of the Duterte administration, amid her notorious record against human rights, and graft and corruption. The tension carried on until the President had left Batasang Pambansa. Lawmakers continued with an informal session with 238 members in attendance backing Arroyo’s speakership. As of press time, it was still uncertain if Arroyo’s takeover of the house leadership is valid.
‘Casualty’
Alvarez opened the third regular session of the 17th Congress with a straight face, tempered tone, his voice conveying uncertainty and hesitation. He listed the accomplishments made by the House under his leadership—passage of the tax reform, free tertiary education and ease of doing business laws, among others. He also spoke of pending measures Duterte want enacted, including the security of tenure
bill and the shift to a federal system. After delivering his remarks, Alvarez suspended the session to inform Malacanang that the two chambers are now ready for his Sona. The session never resumed, and was adjourned first thing in the afternoon, leaving the bicameral report on the Bangsamoro Organic Law (BOL) unratified. What happened next was unexplainable. Around 3:30 in the afternoon, minutes before the President was scheduled to address the nation, Deputy Speaker Rolando G. Andaya Jr. of the First District of Camarines Sur took the microphone and claimed the session was adjourned in spite of his objection. However, when Duterte landed in Batasang Pambansa, he was seen entering the august halls with Alvarez on his side. One hour and a half delayed, the President delivered his SONA with Sotto and Alvarez as his left and right hand in Congress. Arroyo’s rise to the House leadership was denied, and Alvarez remained as chief of the lower chamber. Confusion in the legislature resulted in a standoff between two of the Chief Executive’s men, and the casualty was the prospect for peace in Mindanao—yet again, the BOL was delayed and was not ratified by the House for the President’s approval. The BOL is the final peace agreement between the government and the Moro Islamic Liberation Front, and was expected to be signed by Duterte on Monday. It is aimed at creating the Bangsamoro in the Autonomous Region in Muslim Mindanao—a region that will be given with more power and freedom to carry out legislative and fiscal actions. And as the Chief Executive gave his constituents a briefer on the country’s condition, thousands of protestors trooped to Commonwealth Avenue to fulfill an annual tradition of presenting their so-called counter-Sona. Political groups from the center to the extreme left joined forces to oppose the President’s centerpiece programs, including the war on drugs, charter change, tax reform, among others. They also decried the suspension of the peace talks with the National Democratic Front, the proliferation of fake news, and misogynistic remarks made by Duterte. The relationship between the President and the Left got fractured last year. Differences on dozens of policies did the injury to the ties once founded on trust and optimism. Now, it is severely wounded, without any sign of recovery and healing. The Left, for its part, vowed to fight the government relentlessly, especially now that it is moving to transition the country to a federal system. It is under this storm that the Chief Executive talked of the state of the nation. He weathered yesterday’s storm; the challenge now lies in the next days.
Oil firms announce price rollback
M
OST oil firms will reduce the price of petroleum products effective Tuesday morning. In separate announcements, they will roll back the price of gasoline by P0.70 per liter, diesel by P1 per liter and kerosene by P1.25 per liter. “This is to reflect movements in the international petroleum market,” Seaoil Philippines said.
Seaoil will implement the price decrease at 12:01 am of July 24 while Pilipinas Shell, Phoenix Petroleum, PTT Philippines will implement their respective price adjustments at 6am of Tuesday. Eastern Philippines, meanwhile, slashed the price of unleaded and premium gasoline by P0.80 per liter at 12 noon of July 23. It also reduced diesel
price on the same day by P1 per liter. Other oil firms will follow suit. Last week oil companies jacked up the price of gasoline by P0.30 per liter but rolled back the price of diesel by P0.15 per liter. Local pump prices are mainly influenced by the crude prices in the world market, the peso-dollar exchange rate and taxes. Lenie Lectura
FMIC: 7% growth may be sustained till year-end Continued from A1
sliding all through [the second half of the year],” it added. The think tank said infrastructure spending increased 25 percent in May after recording a 95.9 percent growth in April. The think tank said the national government spent P292 billion in May, marking an 11.5 percent year-on-year growth and the seventh consecutive month of above 10 percent growth. This was driven by the implementation of road widening and improvement projects as well as the repair and rehabilitation of schools. The government also procured medical facilities and equipment. “April and May expenditures, which together stood at P553.1 billion, suggest that the NG [national government] will hit its disbursement target
of P813 billion in [the second quarter] and this augurs well for more job creation and healthy economic activity,” the think tank said. In terms of inflation, the think tank said that, while the increase in prices was higher than expected in June, inflation remains in check. The think tank said there was some slowdown in the increase in prices of food due to the slowdown in the restaurants and miscellaneous goods and services. There were also slowdowns in the health, and recreation and culture indices. Only the clothing and footwear index maintained the past month’s rate. “We maintain our view that inflation will continue to lodge above the BSP’s target but will start to taper off closer to 4 percent after the second quarter anchored on the slowdown of crude oil prices and in anticipation of
lower cost of rice which will, hopefully, be brought about by the proposed rice tariffication and the September harvests,” FMIC-UA&P said. “However, consumer confidence may be eroded unless inflation slows down back to below 5 percent in the third quarter as we expect it will,” it also said. Other factors that would buoy the country’s economic growth include some recovery in trade and robust expansion in manufacturing. The think tank said capital goods imports in April grew 29.3 percent, wiping out the minimal 2.9 percent drop in the previous month. In April these accounted for 36.9 percent, a close second to raw material imports. Data also showed that manufacturing output grew 19.7 percent in May after soaring by 29 percent in April. This suggests huge job gains that should support further spending and growth.