Businessmirror july 26, 2017

BMReports Terror groups in PHL: Removing the masks By Rene Acosta

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CKNOWLEDGING that the threat of terrorism in Southeast Asia has become more intense and realistic, given the expected exodus into the region of returning jihadists who have fought with the Islamic State of Iraq and Syria, regional leaders have vowed to further work together in order to ensure that the radical Islamic threat will not turn into reality. In particular, Indonesia, Malaysia, the Philippines and Singapore have agreed to strengthen and escalate their collaborative efforts in ensuring that “Islamic terrorism” will

Residents look at a burning structure during early-morning air strikes by government forces in the continuing fight for Marawi City by Muslim militants on June 23. The siege by militants aligned with the Islamic State group continues as it enters its second month on Friday. AP

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Conclusion

not take place and prosper in the whole region. The countries are also supporting Manila in its push to boot out a combination of Maute and ISIS fighters in Marawi City. While the four countries have recognized the threat of terrorism long pointed toward the whole of Southeast Asia—in fact, most of them have already actually experienced it or are still dealing with it courtesy of the regional terror group Jema’ah Islamiyah (JI)—the threat borne by returning ISIS fighters has become more than just a reality. Malaysia, Indonesia, Singapore and the Philippines are included in the pan-Islamic state that has earlier been envisioned for the Continued on A2

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Wednesday, July 26, 2017 Vol. 12 No. 286

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abor groups are seeing their hope for an end to contractualization—as what President Duterte committed on several occasions since the campaign period—dim by the day, especially with the Chief Executive opting to evade the labor issue in his State of the Nation Address (Sona) on Monday.

TANJUSAY: “How long are we going to wait? Until when will the workers have to hope in him?”

For Labor Secretary Silvestre H. Bello III, however, the President has already fulfilled his promise of ending “illegal contractualization”. Continued on A2

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atheist Workers fear ‘endo’ vow Better than hypocrite now on the back burner L P By Elijah Felice E. Rosales

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OPE Francis said that a good atheist is better than a bad Christian. The bad Christian draws down on our religion the contempt of those who see his hypocrisy. Continued on A11

VIRTUAL CURRENCIES SEE PHL to buy rice from 6 foreign suppliers SLOW TAKE-UP RATE IN PHL 250,000 MT By Jasper Emmanuel Y. Arcalas

By Bianca Cuaresma

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s one of the first countries to legalize and regulate the use of virtual currencies, the Bangko Sentral ng Pilipinas (BSP) said it is continuously looking into the evolving risks and opportunities behind this fast-growing financial technology. Earlier this year, the BSP responded to the rising popularity of virtual currency-based payments and remittance transactions in the country and around the world through its issuance of a pioneering regulatory framework for the exchanges of such entities operating in the country. Virtual currencies—bitcoins in its most popular form—are digital money not issued by the Central Bank. Unlike electronic money that is backed by cash for

Circular 944

The BSP’s regulatory guidelines for the exchange of virtual currencies in the country the entirety of its value, bitcoins are not backed by any commodity but by the mere ability of its holder to exchange them for goods. In February the BSP launched the set of guidelines on virtual currency—a first of its kind in Asia—seeking to “ balance the interests” of welcoming technological advancements in the monetary sector and proactively addressing the risks that come with such innovations. Five months after the issuance of the regulatory guidelines under BSP Circular 94 4, the Continued on A12

PESO exchange rates n US 50.7460

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he National Food Authority (NFA) on Tuesday said six Southeast Asian companies would likely secure the contract to supply 250,000 metric tons (MT) of imported rice to the Philippines. The NFA made the pronouncement following an auction held in Quezon City. Most of the winning bidders were from Vietnam. Four rice exporters from Vietnam secured six lots representing 175,000 MT. These include staterun Vietnam Southern Food Corp. II (Vina Food II), which offered to supply 50,000 MT for $424.45 per MT; and Hiep Loi Food Joint Stock Co., which will deliver 25,000 MT of rice for $425.9/MT. Two other Vietnamese companies—Tan Long Group Joint Stock Co. and Gia International Corp.,— secured a total of four two lots, totaling 100,000 MT. Tan Long would

The volume of rice that will be imported by the Philippines supply rice at $414/MT and $409/ MT, while Gia International Corp. pegged its bid at $421.64/MT and $415.65/MT. Singapore-based Olam International Ltd. offered to supply 50,000 MT of rice at $413.89/ MT, while Thailand-based Capital Cereals Co. Ltd. would deliver the remaining volume of 25,000 MT at $431.7/MT. The NFA pegged the reference price at $451.08/MT and divided the 250,000 MT into eight lots (six lots of 25,000 MT each and two lots of 50,000 MT each) to allow more private-sector participation. The government had set aside a budget of P5.637 billion for the purchase of imported rice. Based on the

offers on Tuesday, the government would save some P394 million as the total amount reached $104.84 million, or P5.234 billion. NFA Deputy Administrator Tomas R. Escarez said the unspent amount for the importation will go back to the food agency’s budget. Of the 21 foreign suppliers that secured bidding documents from the NFA, Escarez said only 18 companies showed up during the auction. Out of the 18 companies, only 16 were qualified to bid because two interested exporters did not submit their offers, while a Hong Kong-based company did not meet the agency’s qualifications. However, the NFA gave Hong Kong-based company Singsong Ltd. three days to file a motion for reconsideration and justify their participation in the bidding. “If we will consider their motion, then we will open their bids and evaluate it, along with the 16

others,” he said. If the Hong Kong firm’s bid is lower than those offered by the six winning companies, Singsong would be able to secure a supply contract from the NFA. “There is a chance that 50,000 MT out of the 250,000 MT could still change if [Singsong] will satisfy the documentary requirements and if its offer is lower,” he said. However, Escarez added there will be no changes in the timetable set by the NFA for the evaluation and award of supply contracts. All the winning bidders will be subjected to a postqualification evaluation on July 27 and 28. If the bidders pass the postqualification evaluation, they will be issued a notice of award on July 31. “The awarded suppliers will then be issued a notice to proceed on August 3,” he said. The NFA divided the delivery of the 250,000 MT of rice into two

n japan 0.4568 n UK 66.1322 n HK 6.5009 n CHINA 7.5177 n singapore 37.2639 n australia 40.2010 n EU 59.0988 n SAUDI arabia 13.5330

See “Rice,” A2

Source: BSP (25 July 2017 )

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A2 Wednesday, July 26, 2017

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Terror groups in PHL: Removing the masks Continued from A1

region by the Indonesian-based JI. The Southeast Asian countries were specifically alarmed by two earlier pronouncement of the ISIS. One is that it has put up a division-size armed force in the region, apparently with the returning fighters as its members. A typical military division consists of between 10,000 and 20,000 soldiers. Another alarming pronouncement by the ISIS is the presence in their ranks of a great mixture of foreign jihadists who are now fighting alongside members of the Maute in Marawi City. Even before the fighting in the city broke out, Indonesia, Malaysia and the Philippines have already agreed to set up and conduct trilateral joint patrols within their areas of maritime concern, apparently to stem

the movement and activities of regional terrorist groups, especially the Abu Sayyaf Group.

Traditional allies

AS regional leaders clamp down against the threat of ISIS, Manila’s traditional defense allies, the United States and Australia, in particular, immediately provided direct assistance to the Philippine military by sending surveillance planes in Marawi City for the much-needed intelligence, surveillance and reconnaissance (ISR) operations. The Philippines has an existing Status of Visiting Forces Agreement (Sovfa) with Australia and a Visiting Forces Agreement (VFA) with the US, the latter having continuously trained Filipino soldiers in every theater of war operations, including on counterterrorism. Canberra deployed two AP-3C Orion for surveillance support

to the operating Filipino troops, which the Armed Forces of the Philippines Western Mindanao Command admitted was ver y crucial in the ongoing effort to liberate Marawi City. On the other hand, the US, which continuously receives bashing from President Duterte, deployed a P-3 Orion, while its forces work on the ground. US officers said the Americans are providing “only technical and intelligence assistance” to the engaged troops. The American soldiers are not allowed to join the actual operation. A couple of days ago, Duterte called the US a “lousy” country after some US legislators pushed for an investigation into his war on drugs and its effects on human rights. L a s t m o nt h t h e U S a l s o replenished the dwindling requirement of the military in its ongoing operations against the terrorists

in the city by packing full a Philippine Air Force cargo plane sent to Tucson, Arizona, for supply mission with rockets and munitions. The US has been the biggest single contributor of the Philippine military, continuously providing it with a combination of weapons, armaments and assets. In the area of counterterrorism alone, a huge amount of money has been provided in the form of technical assistance, equipment and even training that has also benefitted other agencies of the government. Likewise, billions worth of USfunded projects have been put up and constructed in areas in Western Mindanao since the government began dealing with the threat of the Abu Sayyaf Group. The projects were designed by the Philippine government to conquer the “hearts and minds” of supporters of the terrorist and other

lawless groups in Mindanao.

A learning lesson

WHILE the ongoing operation in Marawi City has turned into a direct international collaborative effort against local and regional terrorists, it also has imparted valuable lessons to the Philippine military and still continuing to do so. For one, the operations have underscored the need for the military to revisit its training and doctrines in order to operationally accommodate and efficiently deal with the changing complexities of the antiterrorism operations. In the case of Marawi City, the military operation has evolved into urban warfare. Still this requires the combined use of all resources available to the military, including its air and land assets. The military’s counterterrorism

operations have a lso spel led the necessity for the military, again to hasten its acquisition of much needed firepower, equipment and assets. Likewise, the Marawi City operation has exposed the vulnerabilities of the Armed Forces; that it could not fight more than one enemy group in a major battle at a given time, contrary to its longstanding claims that it could simultaneously deal with a threepronged war. Last, if it has to conduct a massive antiterrorism campaign again in a city or an urbanized center, the armed forces must do it quick, a lesson the institution must bear in mind as government prepares to undertake operations on a wider scale in Mindanao under the extended martial law, taking into consideration the political, economic and social effects of such daring operations.

Workers fear ‘endo’ vow now on the back burner Continued from A1

“What is left now is the issue on contractualization, because what the workers wanted is that there is total prohibition,” he said. “But we told them that it is not possible because there is a law that allows employers to get contractual workers,” he added. For example, he said, if an employer wanted to get a security guard for his company, he could hire one from a manpower agency. Also, if a company wanted to get janitors, it could hire from an agency. “We cannot tell employers to stop it because we have a law on that,” he added. But t he A ssoc i ated L abor Unions-Trade Union Congress of the Philippines (ALU-TUCP) and Kilusang Mayo Uno (KMU) disagree, which is why they were disappointed when Duterte did not

mention in his second Sona how he intends to put an end to the practice of fixed-term employment. Moreover, theKMU said it is becoming obvious the President will not be able to junk contractualization under his six-year term. “I don’t find any concrete and substantial commitment with regard to labor issues and other important issues of the masses. The President’s Sona is not for the common people,” KMU Chairman Elmer C. Labog told the BusinessMirror. ALU-TUCP Spokesman Alan A. Tanjusay said they are still hoping for the issuance an executive order (EO) banning contractualization as a mode of employment. “Of course, [we still expect him to end contractualization], not only because ALU-TUCP wanted it, but, most important, because he promised it,” Tanjusay told the

BusinessMirror. However, Tanjusay said as much as ALU-TUCP wanted to give the Chief Executive time to resolve the labor issue, it wonders how long should workers wait for labor reforms to be enacted. “We are willing to give him the time he said he would need in delivering the promises he made to the Filipino people, but how long are we going to wait? Until when will the workers have to hope in him?” Tanjusay added. Duterte, during the campaign, vowed to outlaw contractualization—particularly the hiring practice known as endo—a promise that earned him the support of several labor groups. However, a year after and two Sona later, Duterte has yet to comply with the appeal of the labor movement for an EO scrapping contractualization. What labor groups got, instead,

was a department order issued in March by Labor Secretar y Si lvestre H. Bel lo III imposing tighter regulations on contractual arrangements. Labor groups and economists have since criticized Bello’s order, saying it was redundant with existing laws and it oversimplifies the labor market. Striking while the iron is hot, labor groups demanded one after the other reforms under the Duterte administration, including a P18 4 across-t he -boa rd wage increase for Metro Manilabased workers, after getting the Chief Executive’s commitment to end contractualization. Much to the labor groups’ dismay, however, Duterte made no mention of scrapping fixed-term employment and increasing wages in his second Sona. On top of this, Malacañang has yet to divulge

any information on the status of the draft EO seeking to scrap contractualization submitted by ALU-TUCP on May 9. But Bello insisted that there is no more endo (or end of contract), a term referring to the practice of employers to hire employees on repeated five-month contracts to go around the law requiring them to hire on a regular basis any employee who has worked for them for six months. “Endo has stopped, because the President has already told employers and managers to stop,” Bello said, noting that “when the President said there would be no more contractualization, what he meant was that there would be no more illegal contractualization”. He said they have corrected this practice in some big companies, such as in the country’s leading chain of supermalls, “where we

asked the management to regularize their salesgirls, for instance, because the salesgirls are necessary workers in the malls”. He said the SM Group has committed to comply, “but only gradually”, the same request made by leading food chains, citing the huge number of their workers. Jollibee, for instance, has more than 50,000 workers “and has asked that they be allowed to gradually implement regularization”. However, Bello admitted that there were still many shopping malls, department stores and food chains that continue to violate the law on contractualization. So far, the labor department has monitored the regularization of 61,000 contractual workers in a span of one year, or since the President announced the end of the practice of endo. With Manuel Cayon

Rice. . .

Continued from A1

periods: August and September. The NFA said 120,000 MT of rice should arrive within August, while the remaining 130,000 MT should arrive by September. The NFA added its remaining rice stockpile as of July 25 is sufficient to meet the country’s requirement for four days. The government decided to import rice under the government-to-private sector scheme to prop up the NFA’s buffer stock during the lean months of July, August and September.

DND. . .

Continued from A12

soldiers in other parts of Mindanao under the administration’s decisive campaign to end Mindanao’s security problem and recreate it into a peaceful haven for investors to do business. In paving an environment responsive to business, Lorenzana said the DND is working to reduce the capabilities of the country’s various threat groups to insignificant level. This is to ensure that these groups “can no longer endanger the stability of the state, and civil authorities can ensure the safety and well being of the people.” The mission is incorporated into the Duterte’s development planning guide “Ambisyon Natin 2040”, which embraces the principle of inclusiveness. The planning guide, among others, emphasizes the centrality of people in development planning and their aspirations as requisite for the design of government interventions to achieve outcomes. “To achieve national peace, the DND is currently upgrading the level of safety and security through the reduction of domestic conflict and by supporting law enforcement and civilian agencies,” Lorenzana added.

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Editor: Vittorio V. Vitug • Wednesday, July 26, 2017 A3

SC rules on House minority leadership bloc squabble

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By Joel R. San Juan

@jrsanjuan1573

HE Supreme Court (SC) has dismissed the petition filed by a group of lawmakers seeking to resolve the issue on who should comprise the “authentic minority bloc” in the House of Representatives.

DOJ clears 30 of 44 Chinese in casino kidnapping case

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HE Department of Justice (DOJ) has dismissed the kidnapping and serious illegal detention complaint filed against 30 of the 44 foreign nationals who were earlier arrested for allegedly victimizing high-roller casino players in the country. In a nine-page resolution released on Tuesday, investigating Assistant State Prosecutor Phillip de la Cruz held that the evidence presented by the Bureau of Immigration (BI) and Philippine National Police’s (PNP) Anti-Kidnapping Group is insufficient to establish probable cause to warrant the filing of a case against the 30 foreigners. The 44 foreigners, mostly Chinese nationals, were arrested last July 18 in a joint BI and PNP operation that rescued Singaporean victim Wu Yan, who was allegedly kidnapped by the respondents from the Solaire Resort and Casino in Pasay City. The DOJ held that Wu failed to positively identify the 30 foreigners as among those who kidnapped her. “In the instant case, a careful perusal of the records revealed that respondents had not been identified by the complainant as part of the group that kidnapped her. Not an iota of evidence was presented to show that they conspired with the alleged kidnappers of

complainant Wu Yan,” the resolution explained. The resolution was approved by Acting Prosecutor General Jorge Catalan Jr. “Not even a single act can be imputed against them. Since criminal liability is personal, then absence of proof as to their participation to the alleged kidnapping indubitably will result to the dismissal of the complaint against said respondents,” it explained further. As a result, the 30 Chinese nationals were ordered released from detention in PNP headquarters in Camp Crime, Quezon City, but will be deported back to China. On the other hand, the 14 remaining foreigners would remain in detention pending the conduct of a preliminary investigation on their case. They respondents appeared before the DOJ on Monday and submitted their counteraffidavits. The BI has already started deportation proceedings against the 44 arrested foreigners for being undesirable aliens and for violating the conditions of their stay as tourists. But under the law, the arrested foreigners would be deported only after the criminal proceedings against them are completed and after they have served the sentences if found guilty by court. Joel R. San Juan

At a news briefing on Tuesday, SC Spokesman Theodore O. Te said the 15-man High Tribunal unanimously dismissed the petition for mandamus filed by lawmakers Reps. Edcel C. Lagman of the First District of Albay, Teddy Baguilat Jr. of Ifugao, Raul A. Daza of the First District of Northern Samar, Edgar C. Erice of Caloocan City, Emmanuel A. Billones of the First District of Capiz, Tom S. Villarin of Akbayan Party-list and Gary C. Alejano of Magdalo Party-list. The decision was penned by Associate Justice Estela Perlas-Bernabe.

“The Court, per Bernabe, J. and voting unanimously, dismissed the petition for mandamus for the reason that petitioners were not entitled to the reliefs sought; however, the Court emphasizes that the dismissal of this petition is without prejudice to any other controversy involving the internal rules of the House of the Representatives presented in a proper case seeking judicial review,” the Court said. The petition asked the SC to compel the respondents to recognize Baguilat as the runner-up to House Speaker Pantaleon D. Alvarez in the speakership

race on July 25. Baguilat got eight votes against Rep. Danilo E. Suarez’s of the Third District of Quezon’s seven, thus, giving him the minority leadership. The petitioners insisted that Baguilat was entitled to “the long unbroken tradition of the House of Representatives, wherein the clear second placer in the speakership contest automatically becomes and is recognized as minority leader. The “minority bloc” claimed that two days after the voting, the congressmen who voted for Suarez as Speaker and those who abstained

convened to elect Suarez as the minority leader. The petitioners pointed out that Suarez himself voted for Alvarez, which technically makes him part of the majority bloc. The petitioners noted that those who voted for Suarez in that caucus were “pseudo-minority members who were directed by the leadership of the supermajority to beef up the small group of Suarez by first abstaining in the election for Speaker and then convening to elect Suarez as minority leader.”

Creation of antidisaster dept long overdue–Phivolcs chief By Marvyn N. Benaning Correspondent

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hilippine Volcanolog y and Seismology (Phivolcs) Director Dr. Renato V. Solidum Jr. has welcomed the request of President Duterte for Congress to immediately create the Department of Disaster Risk Reduction and Management (DDRRM.) Solidum said establishing the DDRRM now could greatly reduce the projected 48,000 fatalities in the National Capital Region and nearby provinces in case a 7.2-magnitude earthquake called the “Big One” hits Manila. Speaking during the Third Disaster Resilience Conference for persons with disabilities (PWDs) and senior citizens at the SMX of the Mall of Asia sponsored by SM Cares, the corporate social responsibility arm of SM Supermalls, in partnership with Philvolcs and Metropolitan Manila Development Authority, Solidum said the creation of a department on DRRM is long overdue, “considering the position of the Philippines as one of the most disaster-prone countries in the world”. Solidum stressed that “we have long been in discussion to elevate the matter of DRRM to a department level because Republic Act 10121, or the Philippine DRRM Act is under review.” He warned that the “Big One” could strike anytime. Solidum lamented that the Philippine government and the people in general merely react to events and do not allocate time and resources for response and rescue efforts. Having the DDRRM, he said, will expand the focus to include disaster preparedness and mitigation which will not only be more cost-effective,

Philippine Institute of Volcanology Director Dr. Renato V. Solidum Jr. (center) dishes out survival tips to a group of persons with disability (PWDs) in the event of an earthquake during the Third Disaster Resilience Conference for PWDs and senior citizens in Pasay City. ROY DOMINGO

but will save lives and properties. “There would be more concerted effort and there will be people whose focus will only be on DRRM and not only on search and rescue,” he said. He added that if nothing is done to prepare for an earthquake, especially when the so-called Big One hits the West Valley fault, no less than 48,000 people will die in Metro Manila and nearby provinces. Solidum warned that many of those will perish will be PWDs and senior citizens because of their physical limitations and personality vulnerabilities. “That is why we are always saying that, for PWDs and senior citizens, there

should be a buddy system so that whenever any kind of emergency takes place, they are always with somebody to assist them.” He added that while nobody could be prepared enough for an earthquake, it is important that efforts are now being conducted to prepare for earthquakes. “The enormity of the problem needs to be examined not only with response but also with prevention side. No country can be ever ready if the focus will only be on the response side, that is why it is important for us to focus on disaster preparedness and mitigation,” Solidum said. He added that one of the most

certain way to save lives in case the Big One hits is to beef up the structural strength of edifices. “You want to save lives? Make sure that your houses, buildings and other structures are strengthened, and this can be achieved when we change the mind-set of the people that their lives during earthquakes will depend on how they build their houses and the materials they use,” he argued. The DRRM, being spearheaded by SM, is one of the concrete measures to change the mindset of people. “We can never have enough of these kinds of fora that focus on preparedness and resiliency.

DND prioritizes elimination of armed groups to enhance PHL business climate

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he Department of National Defense (DND) will focus on reducing, if not totally eliminate, the capabilities of internal armed threats under the Philippine Defense Transformation Road (PDTR) 2028 program. At the Management Association of the Philippines security briefing in Makati City on Tuesday, Defense Secretary Delfin N.

Lorenzana said the move aims to promote an ideal climate for business to continue to thrive in the country. “Under the PDTR 2028, to maintain the State’s security and stability, [the] DND assures that capabilities of internal armed threats will be reduced to insignificant level that they can no longer endanger the stability of

the state, and civil authorities can ensure the safety and well-being of the people. We likewise assist in creating an enabling environment to develop and cultivate the allegiance of the citizenry,” he added. A nd to achieve nationa l peace, Lorenzana said the DND is currently upgrading the level of safety and security through

the reduction of domestic conf lict and by supporting law enforcement and civilian agencies. The DND also contributes in the attainment of economic development. Given that conflicts produce an environment of fear, it tends to cause resident to move from one region to another and affects trade and commerce, resulting in economic dislocation,”

the DND chief said. He added these security plans were all under the Duterte administration development thrusts, aptly called “Ambisyon Natin 2040”. It emphasizes the centrality of people in development planning and the aspirations as requisite for the design of government interventions to achieve development outcomes.

“These things are what our department aims to prevent. We want to create peaceful communities that are attractive to companies looking to expand and do business. DND helps in enhancing socioeconomic activities in the countryside by ensuring a safe and secure investment climate,” the defense chief added. PNA

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A4 Wednesday, July 26, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

NREB urges DOE to finally approve RE Trust Fund rules

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By Lenie Lectura

@llectura

HE National Renewable Energy Board (NREB) on Tuesday underscored the importance of the Renewable Energy (RE) Trust Fund that has yet to be implemented nine years after the RE law was enacted into law.

“If you collate all the funds, that should serve as fund for the DOE [Department of Energy] to utilize for RE systems, RE programs. That…is provided by law that should be collected from agencies. Until now, we haven’t collected,” NREB Chairman Jose Layug said. The RE Trust Fund is among the priorities that the board is pursuing to fully realize the benefits of Republic Act (RA) 9513, or the Renewable Energy Act of 2008. Under the law, the said fund shall be sourced from proceeds from the emission fees collected from all generating facilities consistent with RA 8749, or the Philippine Clean Air Act. Other sources include 1.5 percent of the net annual income of

2009

The year when RE Act, or Republic Act 9513, was enacted into law

the Philippine Charity Sweepstakes Office; 1.5 percent of the net annual income of the Philippine Amusement and Gaming Corp.; 1.5 percent of the net annual dividends remitted to the National Treasury of the Philippine National Oil Co. and its subsidiaries; 1.5 percent of the proceeds of the government share collected

LAYUG: “If you collate all the funds, that should serve as fund for the DOE [Department of Energy] to utilize for RE systems, RE programs. That…is provided by law that should be collected from agencies.”

from the development and use of indigenous non-RE resources; among others. The creation of the RE Trust Fund is meant to enhance the development and greater utilization of RE. It shall be administered by the DOE as a special account in any of the government financial institutions that shall be exclusively used to finance the research, development, demonstration and promotion of the widespread and productive use of RE systems for power and nonpower applications. The fund shall also support the development and operation of new RE resources to improve their competitiveness in the market. “Under the law, it’s retroactive… [and] 2009 was the year of effectivity. For every year of that, there is a percentage allocated for RE,” Layug said, adding that the amount could

be utilized “basically for research, one project here and there. But it will not amount to billions.” Layug said the DOE needs to approve the RE Trust Fund rules through a department circular. Once signed, NREB will hold a dialogue with these agencies for them to allocate the money. “We haven’t talked to them because the DOE needs to sign the RE Trust Fund rules first,” he said. Last month NREB approved the rules on RE Trust Fund and Green Energy Option. Layug said NREB now awaits the DOE’s approval. The Green Energy Option is a mechanism to provide end-users the option to choose RE as their source of energy. The DOE, in consultation with the NREB, will establish the program and formulate the implementing rules and regulations. Layug said an endorsement from the DOE for these two programs could be processed within three to five months. “The DOE will issue a circular on the rules. Usually, it’s just a yes or no after we have approved it,” he said. The two programs, Layug said, could be implemented this year. “It is the target that these are up for implementation within the year.” While the DOE, according to Director Mario Marasigan, cannot commit on the approval of the Green Energy Option and RE Trust Fund, “these are priority policies of DOE.”

Keeping track on PHL economic health through nighttime lights By Cai U. Ordinario

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@cuo_bm

tatisticians of the Asian Development Bank (ADB) are studying how nighttime lights can help track development in some parts of the Philippines. In an article from the Asian Development Blog, ADB Economic Research and Regional Cooperation Department statistician Arturo Martinez said nighttime lights are not just sights to behold. ADB estimates using nighttime lights data downloaded from Nasa and National Oceanic and Atmospheric Administration correlate with local data from the Philippine Statistics Authority. “They provide data that can help determine socioeconomic indicators when no other reliable information exists, for instance, in parts of developing Asia where economic accounting systems are weak, or when satellite images are more frequently available than such data,” Martinez said. Nighttime lights from satellite images, he added, are now being used as proxy measures for official statistics. He said the assumption is that social and economic activities at night require lights and these can correlate with socioeconomic indicators, as well as economic development. In the Philippines the ongoing study found that the nighttime lights across the archipelago have expanded between 2000 to 2013, which is consistent with economic growth in the country during the period. Based on data from the National Economic and Development Authority, the average growth between 2000 and 2009 was at 4.5 percent while growth between 2010 to 2015 averaged higher at 6.2 percent. Martinez said there was also a correlation between certain socioeconomic indicators and the average luminosity in illuminated areas, particularly at the regional and provincial levels.

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Diverse reactions on Duterte’s Sona on environment and mining issues By Jonathan L. Mayuga @jonlmayuga

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resident Duterte’s strong statement against irresponsible mining, environmental destruction and climate change during his second State of the Nation Address (Sona) on Monday drew various reactions, with environmental groups welcoming his policy pronouncements, while erstwhile supporters and admirers are now yawning over what they call “hollow promises” and “lip service”. Duterte, who spent a good portion of his Sona assailing irresponsible mining, wants to promote downstream processing of minerals instead of merely exporting ores to other countries. The Philippines is currently the largest producer and exporter of nickel, with China being the single major buyer. It is also a major producer of gold and copper ore, but most are shipped out of the country. There are only two processing plants for nickel, and two for gold in the Philippines. For downstream processing, mining experts say there is a need to ensure a steady power supply, something the Philippines is lacking. Mining investors are currently on a wait-and-see attitude because of the erratic mining policy of the past administrations, coupled with the strong opposition waged by antimining groups. In his his Sona, the President also singled out the “measly” P70-billion annual tax the government gets from mining operations, which cause massive environmental damage. He then vowed to “tax to death” irresponsible mining companies if they will not shape up, citing mining companies’ huge profit as against the measly tax they pay at the expense of the environment and miningaffected communities. “We share the President’s frustration against illegal-mining practices and support his desire for mining companies to be responsible in paying taxes as stewards of the environment,” Ronald Recidoro, vice president for policy and legal of the Chamber of Mines of the Philippines, said in a text message to reporters. Alyansa Tigil Mina (ATM), for its part, said it fully supports Dutere’s push for a new mining law. The first critical step, the group said, is for Duterte to enforce the closure, suspension and mining contracts’ cancellation orders issued by former Environment Secretary Regina Paz L. Lopez.

“We expect President Duterte to issue clear instructions to the DENR [Department of Environment and Natural Resources] to enforce the closure and suspension orders against 28 mining companies issued by former DENR Secretary Regina Lopez,” Jaybee Garganera, national coordinator of ATM, told the BusinessMirror. The group supports the passage of the Alternative Minerals Management bill in lieu of the Philippine Mining Act of 1995. Kalikasan-People’s Network for the Environment (Kalikasan-PNE), however, was not as excited in issuing its reaction to Duterte’s pronouncements, describing it as “the same old lip service on mining”, “lacking in substance” and the same “hollow promises he ranted about in his first Sona”. “The same old rhetoric of holding large-scale mining companies accountable is belied by Duterte’s replacement of then-Environment Secretary Regina Paz L. Lopez with a pro-mining ex-general, Roy Cimatu,” Kalikasan-PNE national coordinator Clemente Bautista said. Like ATM, Kalikasan said the President should “walk the talk” by taking large-scale foreign mining companies to task by upholding the mining closure, suspension and agreement cancellation orders issued by Lopez. “These orders have been stuck in the Office of the President, and it only needs the political will of someone who is honestly against the big foreign mines,” Bautista said. “On his proposal for a new mining policy, it must be emphasized that Duterte’s idea of just imposing a new mining-tax policy will never be enough to solve the deep-seated problems of the liberalized mining industry. We demand Duterte to immediately scrap the Mining Act of 1995 by passing House Bill 2715 or the People’s Mining bill for no less than the full overhaul of our national mining policy,” the group said. The People’s Mining bill proposes the implementation of a National Industrialization Program for the mining industry, which is precisely what Duterte said he envisioned for the strategic long-term utilization of mineral resources, KalikasanPNE said. The group further proposes stricter environmental, socioeconomic, and labor regulations, including clear-cut provisions for the mandatory cleanup and rehabilitation of mining-affected ecosystem and communities that the President wants to impose on the big mining companies.

Food service, accommodation income down 8.16% in 2015 By Cai U. Ordinario @cuo_bm

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espite the Filipinos’ penchant for food, the accommodation and food service activities sector’s income declined by 8.16 percent in 2015, according to the Philippine Statistics Authority (PSA). Based on the preliminary results of the 2015 annual survey of Philippine business and industry (ASPBI), the income of the sector declined to P332 billion in 2015, from P361.5 billion in 2012. “Data collected from the [2015 ASPBI] provide information on the levels, structure, performance and trends of economic activities of the formal sector in the entire country for the year 2015,” the PSA said. Data showed there was a 5.27-percent decline in the income earned by restaurants and mobile food service activities to P240.8 billion in 2015, from P254.2 billion in 2012. In 2015 the income earned by restaurants and mobile food services accounted for 72.5 percent, while in 2012, it only accounted for 70.3 percent. Further, short-term accommoda-

tion activities also generated a lower income of P80.9 billion in 2015 compared to P85.1 billion in 2012. Short-term accommodation was the second top earner in the sector in 2015 and 2012, accounting for 24.4 percent and 23.5 percent, respectively. In 2015 the National Capital Region (NCR) generated more than half of the income of the sector with P202.7 billion, or 61 percent, of the total. Three regions contributed with more than P20 billion each in total income. These are Region 3 or Central Luzon, which earned P26.9 billion; Region 4A or Calabarzon with P24.9 billion; and Region 7 or Central Visayas, P24 billion. Meanwhile, PSA data showed there were a total of 5,492 establishments with total employment (TE) of 20 and over in the formal sector of the economy were engaged in accommodation and food service activities sector. Restaurants and mobile food service activities led the sector with 3,942 establishments accounting for 71.8 percent of the total number of establishments. This was followed by shortterm accommodation activities with 1,210 establishments, or 22 percent, of the total.

Agriculture/Commodities BusinessMirror

news@businessmirror.com.ph

Editor: Jennifer A. Ng • Wednesday, July 26, 2017

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DA to inspect 25 meat plants in Brazil By Jasper Emmanuel Y. Arcalas

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@jearcalas

he Department of Agriculture (DA) on Tuesday said it will inspect some 25 meat establishments in Brazil next month, following the temporary ban it imposed earlier on meat imports from the Latin American country. The DA on July 20 declared that it would suspend the importation of Brazilian meat products after salmonella was detected in some of the shipments. Agriculture Assistant Secretary for Livestock Enrico P. Garzon Jr. said 10 DA personnel will be sent to Brazil to conduct the inspection. “We are now preparing the documents needed. What we are seeing now is that the inspection could happen in the second week of August because of the number of documents required,” Garzon told reporters in a news briefing. “It would take about two weeks for the results of the inspection to

come out,” he added. Garzon said the DA will lift the export ban on meat-packing plants that will be cleared by the inspectors. Earlier, Agriculture Secretary Emmanuel F. Piñol said the ban was imposed to ensure the safety of Filipino consumers. He added that his directive would pave the way for government’s inspection of Brazilian meat-packing plants. Meat Importers and Traders Association President Jesus C. Cham urged the government to expedite its investigation, as any delays in the process could result in higher meat prices. “To minimize the impact, we urge [the] DA to inspect the plants expe-

ditiously, at the same time adhering to the standards of the international Codex Alimentarius Commission, of which the Philippines is a member,” Cham told the BusinessMirror in an earlier interview. In a communication to the World Trade Organization (WTO), Brazil assured fellow member-countries that it is taking steps to correct the anomalies revealed in the March rotten-meat scandal. Brazil said it has updated its Sanitary Inspection Regulation “to fight economic fraud and improve food safety”. “The new regulation establishes severe penalties for irregularities ranging from heavy fines to losing of the federal inspection approval seal, in case of persisted noncompliances,” Brazil said during a recent meeting of the WTO Sanitary and Phytosanitary Committee this month. Brazil, through its Ministry of Agriculture, also established the “compliance program”, which aims to enhance the mechanism in preventing and correcting business misconduct. During the meeting, Brazil also said the irregularities found in the involved companies were related to economic fraud and did not compromise the safety of its meat products.

Based on the list of the National Meat Inspection Service (NMIS), as of September 2016, a total of 56 accredited Brazilian meat establishments are allowed to export meat and meat products to the Philippines. However, the NMIS noted that that the accreditation of all 56 meat establishments in Brazil is “for revalidation”. Some of the accredited Brazil-based meat establishments include JBS S.A. and BRF S.A., which are involved in the rottenmeat scandal. Data obtained from the Bureau of Animal Industry (BAI) showed that the Philippines imported 20,716.616 metric tons (MT) of meat and meat products from Brazil in January to May. Beef imports accounted for 31.62 percent, or 6,551.453 MT, BAI data showed. Chicken imports accounted for more than half of the meat and meat products purchased from Brazil, or about 62.64 percent. The Philippines imported 12,977.167 MT of chicken meat and products from Brazil during the five-month period. In 2016 Brazil exported a total of 55,581.853 MT of meat and meat products to the Philippines. This was 5.86 percent higher than the 52,505.429 MT recorded in 2015.

‘Hike budget for construction of FMRs in 2018 to P20 billion’

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he Department of Agriculture (DA) is appealing to lawmakers to increase the budget for its farm-to-market road (FMR) program to P20 billion next year so it could wipe out the construction backlog by 2022. Agriculture Secretary Emmanuel F. Piñol said the approved budget for the department’s FMR program next year is only around P6 billion, which, he said, is not enough to eliminate the 13,000-kilometer construction backlog. “ The approved budget is not enough and will allow us to construct only 600 km of farm-to-market road at an average cost of P10 million per km,” Piñol told reporters in a news briefing on Tuesday. “If this budget will not be increased in the coming years, then the DA could only complete 3,000 km of FMRs by the end of 2022. We will not be able to accomplish what the President wants us to do,” he added. As the budget for 2018 approved by the Department of Budget and Management is already “a done deal”, Piñol said the national government may

tap funds from other sources, such as those allocated for “non-essential programs”, to increase the budget for the FMR program. The DA chief vowed to “fight” for a sufficient budget for the FMR program in 2019. “If the DPWH [Department of Public Works and Highways] has ‘Build, Build Build’ program, then the DA should also have its own ‘Build, Build, Build’ for FMRs”, Piñol said. “What’s the point of having big roads if you don’t have the smaller connecting ones which will be used in transporting agricultural products?” Piñol also said there is a need to “rationalize” the various FMR programs of various government agencies so there would be “one integrated road-network program”. He added some of the government agencies that are implementing their own FMR programs include the Philippine Coconut Authority, Department of Agrarian Reform, National Irrigation Administration and Sugar Regulatory Administration. Jasper Emmanuel Y. Arcalas

news@businessmirror.com.ph

Banking&Finance BusinessMirror

Editor: Jun B. Vallecera • Wednesday, July 26, 2017

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Downside to sustained Q2 expansion seen By Bianca Cuaresma

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@BcuaresmaBM

conomic expansion measured as the GDP was seen sustained at a solid pace in the second quarter of maybe 6.4 percent or even better, latest indicators from the central bank showed.

However, the policy-making Monetary Board of the Bangko Sentral ng Pilipinas (BSP) expressed concern over so-called downside risks, particularly the slower-than-expected national government spending in recent months. In the recently published highlights of the latest monetary policy-setting meeting, the highest policy-making body of the Central Bank cited strong indications of continued growth in the second quarter of the year. “Using leading and forward-looking indicators, both composite leading index and nowcast models suggest a steady GDP growth momentum in the second quarter of 2017,” the Central Bank said. Nowcast pertains to the official but delayed estimate of the anticipated growth for the period. The local economy grew slower in the first quarter at only 6.4 percent, from 6.6 percent a quarter earlier and from

6.8 percent in the first quarter last year. Nevertheless, the Philippine growth performance was one of the fastest in the region. “Trends in other high-frequency demand indicators are also generally positive, with continued increases in sales volume of automobiles—at 20-percent year-on-year growth in the first quarter of 2017—while more than half of the 20 major industries in the manufacturing

sector continue to operate above the 80-percent capacity level,” the Central Bank said. The BSP also noted business and consumer optimism remained positive at the quarterly surveys on the sentiment of the economic sector, with consumer confidence hitting an all-time high in the second quarter. However, the BSP said some indicators suggest particular downside risks to economic growth this year. Among the downside risks to domest ic dem a nd w a s t he slow pace noted on t he d i sbu rsement of n ational government funds. The Philippine composite purchasing managers inde x a lso posted t he lowest reading since data was made available in October 2010. The BSP, likewise, said the services sector—which accounts for more than ha lf of the countr y’s tota l employment—recorded a net employment loss of 557,000 workers, according to the April 2017 Labor Force Survey. The Philippine Statistics Authority is expected to report the country’s secondquarter GDP numbers in mid-August.

Using leading and forward-looking indicators, both composite leading index and nowcast models suggest a steady GDP growth momentum in the second quarter of 2017”.—BSP

Treasury abandons sale of 20-year T-bonds T he Bureau of the Treasury failed to sell Treasury bonds (T-bonds) at the auction designed to sell at least P15 billion worth of reissued paper on Tuesday. Officials said the various government securities eligible dealers, mostly banks and trust companies, offered very high rates for their credit and forced the auction committee to trash all the bids submitted. According to National Treasurer Rosalia V. de Leon, there was very little demand for the 20-year paper and that those that submitted bids quoted unreasonably high rates. “The rates are unreasonably high so it was really disappointing. When we did the market survey, I think we were looking at five to 10 basis points and indicated an oversubscription by two or five times. Apparently, there’s no demand for the 20year [paper] right now in spite of the very low inflation expectations. And there’s also ample liquidity. So maybe the appetite is not on the long end,” de Leon said. The Treasury committee received lower than anticipated bids amounting to only P11.202 billion, as opposed to the proposed sale of at least P15 billion. Had the committee accepted the all bids, the 20year rate would have jumped from 20.9 basis points to 5.244 percent.

The last time the Treasury sold 20-year T-bonds, the rate was set at 5.035 percent. An earlier auction for the 20-year T-bond was held on June 27, when the Treasury awarded in full all P15 billion worth of government securities. Bids for the paper more than doubled, reaching P31.078 billion. The committee rejected P16.078 billion and the coupon rate for the security stood at 5.250 percent. De Leon, at an earlier securities sale, said that the committee was met with healthy demand from investors on the back of the steady rates anchored by the Bangko Sentral ng Pilipinas, the roll back in oil prices and low inflation expectations. The maiden sale of 20-year T-bonds was held on May 16. Rea Cu

Senate seen quickly Nomophobia and health risks passing TRAIN

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inance Secretary Carlos G. Dominguez III is hoping that the Senate will swiftly pass the proposed Tax Reform for Acceleration and Inclusion Act (TRAIN) after President Duterte himself called on Congress anew to approve the measure in his second State of the Nation Address (Sona) on Monday. Duterte said the TRAIN is designed to be pro-poor and that the vulnerable are at the heart of the tax reform. Congressional support for the TRAIN will ensure that its benefits are felt immediately, especially by the marginalized sectors. “With the President’s certification of the TRAIN bill as an urgent and a priority measure, complemented by the personal appeal he made before our lawmakers in his Sona, we are hopeful that the Senate will pass the measure soon enough so that it could be implemented possibly by the third or fourth quarter of the year,” Dominguez said. The House of Representatives approved House Bill 5636 with 246 votes on May 31. The Senate is seen to tackle the bill with Monday’s opening of the second regular session of the 17th Congress. Apart from the tax-reform bill, Dominguez also said the government’s anti-red tape program and the substantial improvement in tax administration are among the key accomplishments of the Department of Finance (DOF) in the first year of the Duterte administration. According to him, as a result of the close coordination between the bureaus of Internal Revenue (BIR) and Customs (BOC), the government executed “potentially the biggest collection of taxes” ever from a single entity in the country’s tax history. This pertains to cigarette manufacturer Mighty Corp., whose owners have offered to shutter the business and pay the government P25 billion as settlement of its deficiency excise and income taxes after three criminal complaints were filed by the BIR for using counterfeit cigarette-tax stamps. The total tax take could reach P30 billion when the value-added tax (VAT) and other fees are included in the computation of Mighty Corp.’s tax liabilities. Dominguez further said the President’s acceptance of Mighty Corp.’s offer provides the BOC and the BIR greater reason to run after other big fishes that continue to cheat the government of billions of pesos in taxes. He welcomed the President’s statement that acceptance of the settlement “does not preclude other criminal charges” against Mighty Corp. that the BIR may decide to file against it. Rea Cu

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his term might have been familiar to many people but this is the first time for me to encounter this. It means “nomobile-phone phobia” . For working people like us, it is impossible to go through the day without a mobile phone. We are certainly addicted to these and other mobile devices and may not even be aware that there already is such a thing as going without your mobile phone or gadget, or that the battery went dead and there is no network signal. Even in my bedroom I have several phones and two tablets with me, not counting the laptop. And I charge all my gadgets when I sleep. Imagine all the radiation in the room with all these gadgets charging simultaneously. If the health risk is true then I expose myself to great risk. In an article in Sydney Morning Herald dated January 15, by Sarah Russell, she cited studies funded by tobacco companies proving that cigarettes are not that harmful to one’s health. But look at the smokers several years hence—lung cancer has caught up with them. The statistics show significant corelation of smoking to lung cancer. In 2016 the World Health Organization announced the potential health risks posed not only by mobile devices but all electronic devices. But mobile devices and other electronic gadgets create more health risks since we have them with us 24/7. Although studies funded by telecommunications companies says otherwise, it is better to stay prudent. When sleeping, devices should be at least 3 feet away if you cannot have them outside and turn off the Wi-fi because even without the Wi-fi the gadgets are communicating with the base stations through radio. The phones constantly radiate electromagnetic waves even when they are not being used. Wi-fi connections are also more dangerous than radio waves. Turn off your Wi-fi if you are not using it, especially in the bedroom (source: steptohealth. com). Whether true or not, heeding to this warning might save your health and the only loss you

FINEX free enterprise Wilma C. Inventor-Miranda may have is having no Wi-fi and the chance frequently to check on your social-media feeds. Thus, it is important that studies on health risks posed by mobile devices should not be funded by telecommunications companies. For those experiencing nomophobias, problematic behaviors are observed similar to substance abuse or pathological gambling. If you panic when you left your phone at home and cannot resist checking on your social media or e-mails even when in the middle of rush work, or meeting a deadline, or when driving or in the middle of a conversation, you may have nomophobia. It is funny but when I am stressed or feeling toxic, looking at my Facebook or Viber seems therapeutic for me. I am surely wired to my mobile devices it is time to have partial mobile detoxification. That means I will still use them but no longer near the bed with the Wifi on at bedtime, limit checking on social-media feeds and turn off all other mobile gadgets with only the phone left when sleeping. At the office or outside of our homes, we already have enough toxins—we have gone toxic from the heavy workload and other stress-inducing events, such as traffic, pollution, etc. Let us clear our homes of toxins by limiting our use of mobile phones, especially as we go to bed. We need all the energy for the day after. Make mobile phones a boon rather than a bane for a truly productive and meaningful life. Place them all under your control or these devices will control you. Wilma Miranda is the managing partner of Inventor, Miranda & Associates, CPAs, and treasurer of KPS Outsourcing Inc. The opinions expressed herein are the views of the writer and do not necessarily reflect the views and opinions of these institutions.

ExportUnlimited BusinessMirror

DTI-EMB team conducts market opportunity mapping in S. Africa

THE Philippine contingent to South Africa is led by Department of Trade and Industry’s Export Marketing Bureau (DTI-EMB) Director Senen M. Perlada (third from left) and Rafaelita C. Castro (right), chief of DTI-EMB’s Market Innovation Division. The group conducted a market-opportunity mapping mission in that country.

By Rafaelita C. Castro

Division Chief, Market Innovation Division Department of Trade and Industry, Export Marketing Bureau

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HE Export Marketing Bureau (EMB) of the Department of Trade and Industry conducted a Market Opportunity Mapping (MOM) Mission to South Africa from June 25 to July 2.

Headed by EMB Director Senen M. Perlada, with EMB-Market Innovation Division Chief Rafaelita C. Castro, the mission aimed to explore trade prospects in South Africa, one of the world’s emerging markets and a gateway to the Southern African Development Community

(SADC). The SADC also includes Botswana, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia,Swaziland, Tanzania, Zambia and Zimbabwe. The delegation was well-received by Philippine Ambassador to South Africa Joseph Gerald B.

Angeles, together with Second Secretary and Consul Joselito Chad Jacinto Jr., Third Secretary and Vice Consul Marie Cris Chieng and Protocol Officer and Attache Victor Atangan. They provided the much-needed assistance to the group and were instrumental in linking the delegates to important business contacts in South Africa. The mission’s itinerary covered store checks and business matching with the business chambers in the key cities of Johannesburg, Pretoria, Durban and Cape Town and a scoping visit to the Southern African International Trade Exhibition (Saitex). Together with the EMB, nine exporters with 17 representatives participated in the mission. Of the total exporters, five were from the processed-food sector (fruit preserves, coconut products, biscuits crackers and confectionery),

two from the personal-care sector (perfumes and soap) and one each from the food-supplement and food-machinery sectors. The mission’s itinerary started with a visit to Saitex, a general (horizontal) international trade fair held from June 25 to 27 at the Gallagher Convention Center, Johannesburg, South Africa. Simultaneously held with Saitex was the so-called Africa’s Big 7 (for food and beverages) and also the Hotel Show Africa. The first-time meetings with officials of the chambers of commerce in Johannesburg and Durban, Wesgro (Cape Town and Western Cape Tourism, Trade and Investment) and with the Consul General in Cape Town opened the lines of communication for the participating Philippine companies. Both chambers expressed willingness to continue to develop business relationships from hereon. Store checks were conducted in the branches of Pic n Pay, Woolworths, Game, Checkers Hyper, Spar and Shoprite, particularly in the cities of Johannesburg and Cape Town. It was observed there were very few Asian products in the mainstream market, which could be an opportunity for Philippine exporters. Shortly after the return of the mission, South African Ambassador to the Philippines Martin Slabber hosted a luncheon meeting where the Philippine delegates shared insights and feedback about their first mission to South Africa. In turn, EMB expressed appreciation to Slabber and his staff who supported the delegation since the start of the mission. The initial plan was for the mission to just explore trade prospects, assess the market and see how Philippine exporters could take advantage of possible opportunities in South Africa. The mission, however, exceeded expectations when immediate business prospects were identified for the participating companies.

16 PHL companies bag $23.4-export sales in major Taiwan food show

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IXTEEN Philippine food companies generated $23.4 million worth of export sales in the recently held Taipei International Food Show (TIFS) at the Nangang Exhibition Center Hall 1 in Taiwan from June 21 to 24. Led by the Center for International Trade Expositions and Missions (Citem), the Philippine delegation surpassed the target sales of $22 million and exceeded the previous $21.58-million sales generated in 2016 by 8.4 percent. “The Philippines had a successful participation in Taiwan. We surpassed our sales goal and actually brought 16 companies under the Philippine banner from an initial target of 12 companies,” Citem Executive Director Clayton Tugonon. said “We were also able to share necessary information to these companies so that they can capitalize on the promising market opportunities in Taiwan.” Joining the Philippine delegation were Celebes Canning Corp., CJ Uniworld Corp., DMI Medical Supply Co. Inc., Fitrite Inc., Greenlife Coco Products Philippines Inc., JNRM Corp., Malagos Agri-Ventures Corp., Mama Tina Pasta Co. Inc., Pasciolco Agri-Venture, Prosource International Inc., Raw Brown Sugar Milling Co. Inc., Team Asia Corp., Tropicana Food Products Inc., Weambard International Traders Inc., and Yearluck Food and Industrial Food Corp. Also participating was the Department of Science and Technology-

DTI SHOWCASES MSME ACHIEVEMENTS IN COFFEE-TABLE BOOK

The Department of Trade and Industry (DTI) launched its coffee-table book, entitled SIKAP: Sipag at Abilidad ng Pilipino, during the Asean 2017 Micro, Small and Medium Enterprise (MSME) Development Summit in Pasay City on July 14. The book features stories of Filipino entrepreneurs from various industries representing all of the nation’s regions. Each of them shared their stories of success, business learnings and challenges faced in their entrepreneurial journey, including programs extended to them by the DTI. Trade Secretary Ramon M. Lopez holds a copy of SIKAP with DTI Regional Operations Group Undersecretary Zenaida Cuison-Maglaya.

Industrial Technology Development Institute (DOST-ITDI). Among the Philippines’s best sellers in the event were ready-to-drink tropical fruit juices and preserves; canned tuna; coconut products, such as virgin coconut oil, coconut cream, sugar and medium chain triglycerides (MCT); muscovado sugar in powder form and rock form; banana chips; soft-serve ice cream mix, cones and waffles; and herbal tea, MX3 coffee and food supplements. Other products showcased in the Philippine pavilion included unsweetened chocolate powder, roasted cacao nibs and dark chocolates; bagoong; noodle pasta; canned meats; vacuum-fried vegetables and fruits; and premixed rice cakes and other food flavorings. “Through our benchmarking and market visits, we observed that the

Taiwanese market has a huge demand for health and organic food and beverages. There is also a big market potential for exporting high-value fresh and frozen fish, shrimps and prawns, abalone, scallops and other seafood products,” Tugonon said. “We also surveyed that the major international competitors for the Philippines’s bestselling products were China, Vietnam and Thailand because of their price and packaging. Sri Lanka was also found as one of the toughest competitor for coconut products, while European countries, such as Switzerland, are also seen as a major competitor for chocolate products,” he said. The TIFS, popularly known as Food Taipei, is an annual food fair that links the entire food industry supply chain in Taiwan and other countries—from agriculture and

aquaculture, refrigeration, processed food, food machinery, packaging and packaging equipment. The four-day event was held in conjunction with Taipei Pack, Foodtech and Pharmatech Taipei, Taiwan Horeca and Halal Taiwan. It was participated in by 1,717 exhibitors, with a total of 4,011 booths, including participating representatives from 36 countries, to cover every link of the supply chain in Taiwan. “Citem looks forward to its next participation in Food Taipei next year. Hopefully, our participation this year has helped Philippine companies benchmark themselves in the international market to better improve their packaging, product labeling, and secure the necessary food standards and certifications to expand their reach on the Taiwanese export market,” Tugonon said.

Editor: Efleda P. Campos • Wednesday, July 26, 2017 A9

MARKET DEVELOPMENT UPDATE

Pinoy MSMEs can avail themselves of free trade legal service By Magnolia M. Uy Commercial Attaché Permanent Mission of the Philippines to the World Trade Organization, Philippine Trade and Investment Center Geneva

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HILIPPINE micro- smalland medium-sized enterprises (MSMEs) that want to expand their market overseas—especially in highly developed markets, such as Switzerland, the European Union (EU) and the US but are uncertain on how to proceed—can now tap the expertise and experience of international trade lawyers for free. Sidley Austin Llp., an international law firm, launched the Emerging Enterprises Pro Bono Program to help poor, rural and disadvantaged communities by providing free legal support to MSMEs and market-focused nongover nmenta l organizations (NGOs). Through technical guidance and hand-holding, MSMEs can benefit from, among others, legal-trade advice on marketaccess requirements, as well as better understanding intellectual property rights and patents for innovative ideas. For many MSMEs around the world, legal barriers are among the key hindrances to trade. However, since the program’s introduction in 2012, over 120 MSMEs from more than 30 countries have benefitted. These include an Indonesian chocolate producer overcoming challenges in the EU market because its formula has to meet EU’s minimum cocoa requirement; shea producers unable to sell products containing shea to Indian buyers because of regulatory restrictions; and an African clean-cook stove enterprise entangled in an intellectual property dispute with a Chinese company. Further, the program works toward enabling more MSMEs in developing countries to participate in e-commerce by helping them address constraints. E-commerce has always been touted as a key

enabler for MSMEs worldwide to participate in global trade. However, it entails legal requirements in order to be realized. For instance, it is essential to have an effective privacy policy that protects producers and buyers during the online transaction; to carry out online business transactions on the basis of enforceable and internationally recognized buyerseller contracts; and as intellectual property must be protected, products must also comply with market-access requirements. The Department of Trade and Industry, through The Philippine Trade and Investment Center (PTIC) in Geneva, can facilitate the introduction and engagement of eligible Philippine MSMEs with the proponent. Applications for pro bono support are reviewed on a case-by-case basis through the following criteria: Located in or have primary operations in a developing country in Africa, Asia, Central and South America or the Caribbean; Committed to delivering a positive social impact; Have established a presence in the local market (i.e., beyond start-up); Agree to secure local counsel; and Are unable to afford or otherwise access international legal services. For more information, you can get in touch with the Philippine Trade and Investment Center in Geneva, Switzerland, at +41-22-9097900/ 7906/7915/7917 and Geneva@dti. gov.ph. PTIC Geneva is led by our commercial attaches, TSO Maggie Uy and TSO Ella Burgos, and is located at the Philippine Permanent Mission to the World Trade Organization at Rue de Lausanne 80, 1902 Geneva.

A10 Wednesday, July 26, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Climate-proofing food production

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N his second State of the Nation Address, President Duterte again vowed that there would be no let up in government efforts to fight illegal drugs. What’s heartening is that he has also underscored the need for the state to ensure food security by preparing producers for climate change. While miners were blamed for the destruction of farms and aquatic resources, the President discussed his beef with them in the context of the impact of their operations on food production. Duterte cited the case of Mindanao, where food production is on the decline in recent years not only because of long dry spells, but also because of strong typhoons that battered the region. The strongest typhoon to hit the island since the 1970s was Typhoon Pablo (international code name Bopha), which made landfall in Mindanao in December 2012. The banana sector was hardest hit by Pablo, and it took farmers two years before they could fully recover from the devastation caused by the typhoon. Unfortunately, experts have warned that this natural calamity is now the “new normal” and we should expect strong typhoons, like Supertyphoon Yolanda (international code name Haiyan) and Pablo, to visit the Philippines more frequently. Cognizant of this, the President on Monday issued an order to agencies involved in food production to “look into it and act accordingly”. Also, he urged Congress to immediately pass the National Land Use Act, to stop the conversion of farmlands into other uses. But directing concerned agencies to “climate-proof” food production is not enough; they should be given the funds to do this. Spending for research and development (R&D) in the Philippines remains very low compared to other Southeast Asian countries. According to data from the Department of Science and Technology, the R&D expenditures of both the private and public sectors in the Philippines have not even reached 1 percent of GDP. Neighboring countries, like Thailand, Vietnam, and Indonesia usually invest close of 2 percent of GDP for their R&D efforts. The government should also expand farmers’s access to crop insurance so they could recoup their losses following a strong typhoon or an El Niño episode. According to the Philippine Institute for Development Studies (PIDS), the lack of funds is a major factor behind the limited reach and low coverage of the government’s crop insurance scheme. In a report last year, PIDS senior research fellow Celia Reyes said only 27 percent of rice farmers, 12.2 percent of corn farmers and 3 percent of high-value commercial crop farmers are covered by crop insurance. If it is indeed serious about “climate-proofing” food production, the Duterte administration must put its money where its mouth is; it should seriously consider allocating more funds for initiatives to achieve this. It is easy to give out orders, but how these will be implemented is another matter. The budget proposed by the national government for 2018 does not inspire much hope that the President’s directive will be carried out as the Department of Agriculture—the agency that leads food production—got less than what it proposed. Lawmakers should look into this and see to it that agencies will be able to comply with the President’s marching order to climate-proof food production. Since 2005

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Sen. Gordon as new SSS champion

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Gordon would inform us that his mantra in life is “Work, Save, Invest, Prosper”. One time, he recounted how he used this as a battle cry to push people in Subic after the Americans left the base. He patiently talked to his constituents to work hard, save more and invest intelligently, because they have no one else to depend on except themselves.

All throughout the meetings, Gordon would inform us that his mantra in life is “Work, Save, Invest, Prosper”. One time, he recounted how he used this as a battle cry to push people in Subic after the Americans left the base. He patiently talked to his constituents to work hard, save more and invest intelligently, because they have no one else to depend on except themselves. Nobody can argue the accomplishments of Gordon in Subic’s metamorphosis, from a decommissioned military base in 1992 to one of the largest economic and tourism zones in the country today. Changing the general mind-set of Filipinos—from the usual norm of asking the government to provide for basic needs to assuming individual responsibility for the future—is what the senator hopes to instill among us. It is this philosophy that has

for a source of income. One may argue that the standard of living is relative. A retired bank executive will definitely need a higher pension to sustain even a snippet of the lifestyle he enjoyed while at work. A retired office clerk will likely have a simpler lifestyle. A sad fact is that only 4 out of 10 Filipino workers have savings, based on the 2015 study of Bangko Sentral ng Pilipinas national baseline survey on financial inclusion. Ironically, 9 out of 10 Filipino workers worry about their retirement. The good news is that 80 percent to 90 percent of Filipinos want to save. The personal desire to save money is present. But the challenge is to make it happen. Truth is, saving for retirement is doable with a few lifestyle adjustments. For instance, the average cost of a cigarette pack is P60. If a smoker consumes one pack a day, that sums up to P1,800 a month. So, by just kicking the habit of smoking, one saves P12,600 annually.

Art Amansec

All About Social Security OR the past few weeks when Congress has not yet resumed session, one of the rooms in the Senate remained busy amid the silent halls. The hardworking Sen. Richard J. Gordon had a series of technical meetings with Social Security System (SSS) officials for the 2017 SS Charter Amendments that he is championing in the Senate. prompted Gordon to espouse the pension fund’s charter changes. SSS is one with him in securing a better future for its members, through adequate pension that could provide for basic needs, like food and medicines. He even mentioned that aside from basic needs, retirees should enjoy the luxury of traveling, which many, during their productive work life, could not afford due to time constraints. Now, free from the pressure of work, retirees should have the chance to travel, and to experience Philippine tourism. Admittedly, a comfortable retirement is a product of years of savings. The senator was quick to note that it is easier to be poor when you are still in your productive years, because you can always look for extra work to add to your income and savings. It is pitiful to be a poor retiree who has no option to find

The Balangiga Bells Edgardo J. Angara

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RESIDENT Duterte during his State of the Nation Address (Sona) asked the US to return to the Philippines the three “Balangiga Bells” taken by American soldiers in 1901 as war booty from the parish church of Balangiga in Eastern Samar. During the Philippine-American war, Filipino rebels ambushed on September 28, 1901, Company C of the 9th US Infantry Regiment, where 48 out of 78 US soldiers were killed and 22 were wounded. In retaliation, US General Jacob H. Smith ordered every Filipino male above 10 years old should be killed. He instructed his subordinates to burn houses, take no prisoners alive

and turn the interior of Samar into “a howling wilderness”. Following Smith’s orders, American soldiers burned 255 homes and killed 39 Filipinos over an 11-day period. The departing US troops took with them the Balangiga Bells. One of these bells is at the US base Camp Red Cloud in Ujieongbu City, South Korea, still under the possession of the 9th Infantry Regiment. The

Following Smith’s orders, American soldiers burned 255 homes and killed 39 Filipinos over an 11-day period. The departing US troops took with them the Balangiga Bells. One of these bells is at the US base Camp Red Cloud in Ujieongbu City, South Korea, still under the possession of the 9th Infantry Regiment. The other two are at F.E. Warren Air Force Base in Cheyenne, Wyoming, US. other two are at F.E. Warren Air Force Base in Cheyenne, Wyoming, USA. Historian Ambeth Ocampo once wrote: “During the Philippine revolution and the Philippine-American war, bells were confiscated by the enemy because they could be used to send signals far and wide in an age before the cellphone, or they could be melted down and made into

Speaking of smoking, now is an opportune time to quit this deadly habit. In his State of the Nation Address on Monday, President Duterte cited the critical importance of the nationwide smoking ban that he signed into law. Smokers are banned in public places. Given the limited or lack of smoking areas, it is better to quit than face apprehension from police enforcers. Savings from buying cigarettes could be diverted to retirement. The annual P12,600 savings would definitely go a long way in providing a comfortable life for a retiree. Today, SSS is the most affordable, accessible savings facility. It offers easy terms to save for life’s contingencies, such as sickness, maternity, disability, funeral, retirement and death or survivor benefit. It is a defined benefit system, which means that every contribution has a corresponding benefit. At P15 per day or P440 a month, SSS is the most feasible way to save for retirement. Unlike a typical insurance policy, SSS contributions do not expire. Contributions have a corresponding benefit. With only 120 contributions, a member is already qualified for a monthly pension. But, of course, if one pays higher and longer, the amount of pension increases. SSS is truly fortunate to have Gordon as its champion for SS charter changes. He walks the talk, so to speak. The pension fund is truly in exciting times with the ongoing Senate hearings.

weapons or bullets.” But the bells held greater cultural significance for early Filipinos. They were used to signal the start of masses, announce marriages, births and deaths, and warn of looming dangers, like fires, typhoons or attackers. According to Ocampo, early Filipinos lived bajo la campana—literally under the bell. The return of the Balangiga Bells has always been a sore point in Philippine-American relations. The bells are emblematic of the Filipinos’ struggle for freedom. History is replete with nations’ treasures taken as booty of conquests. Some were voluntarily returned, others kept hostage. The United Nations Educational, Scientific and Cultural Organization has exhorted conquerors to return the treasures to the owners. The US, we hope and pray, will heed the call. E-mail: angara.ed@gmail.com, Facebook and Twitter: @edangara

opinion@businessmirror.com.ph

Opinion

A Sona As Possible

Better atheist than hypocrite

BusinessMirror

Teddy Locsin Jr.

Michael Makabenta Alunan

FREE FIRE

ON THE CONTRARY

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RESIDENT Duterte’s controversial State of the Nation Address (Sona), again spiced with some expletives in the local colloquial language, is considered bereft of discussions on vital economic issues, as people remain patient and tolerant, although ironically want reforms as soon as possible with jobs, poverty, inflation and corruption now on the top of their concerns, and much less for crime and the antidrug campaign based on Pulse Asia’s recent survey. Ever since he took the national political stage by storm, starting with his wishy-washy decision to gun for the presidency, Duterte has indeed captivated and inspired the hopes of many, particularly his avid followers, the downtrodden hoi polloi as he spoke their language of the streets. n Subservience and rising hubris? His no-holds-barred crass language, which offends many of the well-scented, well-heeled and well-mannered elite, has all the more captivated his followers, particularly his loyal sycophants, minions and trolls, as he makes oblique potshots at big names and institutions, like former US President Obama, the European Union, the Catholic Church, United Nations, human-rights advocates and even media itself. Despite his shortcomings of being perceived to be short on patience, short on respect for due process, human rights and the law itself, and short of understanding on economic concerns, he keeps coming with his rantings, which have even increased his survey ratings as people blindly follow him without question. The more he admits his shortcomings and his openness to accept the possibility of even rotting in jail for his faults, the more people love him for his perceived transparency and honesty. Apparently, Filipinos are a tolerant and forgiving lot and want to give him more chances, but it doesn’t mean people are not watching and keeping tab. One test case is when he defied a Senate probe and pardoned Supt. Marvin Marcos from jail; sentence for the murder in jail of Albuera Mayor Rolando Espinosa Sr. and forcing Sen. Panfilo M. Lacson to utter expletives. But ow ing to t he people’s culture of subservience, reinforced further by his strongman tendencies, the resulting eerie complacency and tolerance for his malfeasance is increasingly developing the negation of his down-to-earth humility. By daring to defy social convention and flirt frictions with institutions, he may be developing hubris or arrogance, which is the folly that led to the downfall of many leaders in history who have lost the capacity to take criticisms. His arch political enemies can even capitalize on this and do extremism, and blame everything on him for being tolerant to his erring policemen. Either way, he is not managing well his police force and criminality, neither is he uniting the country, but causing more division. n Fight poverty more, not crime. He seems stuck to just being a law enforcer, and myopically believes his own propaganda by insisting on his static figure of 4 million drug users, even sacking the Dangerous Drugs Board chief for his lower 1.8 million estimate. He must realize that when his campaign started, many stopped using drugs out of fear and that’s good enough. There is a danger the police may be forced to produce “criminals” out of innocents, just to match his higher figure on the ridiculous argument only 1 million have so far surrendered when there are 4 million. As poverty, jobs and corruption

His no-holds-barred crass language, which offends many of the well-scented, well-heeled and well-mannered elite, has all the more captivated his followers, particularly his loyal sycophants, minions and trolls, as he makes oblique potshots at big names and institutions, like former US President Obama, the European Union, the Catholic Church, United Nations, humanrights advocates and even media itself. are the top concerns, Duterte must focus more on poverty eradication, without giving up his war on drugs and terrorists. It is poverty in the countryside that is causing the massive rural-to-urban migration of rural folks escaping from rural misery only to end up in urban poverty. n Top of class vs corruption. He can tap, say, the top 2,000 graduates of state universities and colleges to do parallel counterchecking to wipe out corruption at the Bureau of Customs. My friend Dave Garcia suggests to give them a salary of P20,000, w it h P15,000 released ever y month and the remaining P5,000 by the end of the year if they perform effectively and honestly. This carrot-and-stick approach is effective because if they foul up they lose the accumulated P60,000 in forced savings, lose their jobs, tarnish their names and be barred from future employment as their names can be blacklisted. This will cost only P40 million a month, or P480 million a year, but it could potentially generate the P300 billion in revenue losses at Customs, which can be channeled to productive impact projects for the poor. These young graduates can indeed change the customs of the people at the Bureau of Customs. Apart from actual physical inspection, they can cross-reference for differences in the export documents from other countries with our import manifests. n Don’t catch rebels, catch rain more? The Moro issue has been with us for centuries, while communist insurgency for many decades now, but social unrest is mainly caused by pover t y and injustice. One major strategy is to build maybe 500,000 small dams, catch basins or small water-impounding projects (SWIPS) all over denuded mountain slopes. Rural folks can be tasked to help build these little dams and report on the terrorists in their midst. This is far better than the Keynesian solution of merely hiring ditch diggers, and another batch to fill them up, just to generate false employment to perk up demand. Here we create productive jobs as these minidams can provide irrigation in the uplands, allow contour farming for agro-forestry, vegetables and high value crops, and develop upland fishponds. These can potentially generate millions of jobs similar to what US President Franklin Roosevelt did when he created 4 million jobs in a month’s time at the height of the Great Depression in the 1930s, according to Nick Taylor’s book When FDR Put the Nation to Work.

Continued from A1

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RANCIS was drawing on the Gospel of Mark where Jesus says it’s better to be drowned than cause others to sin. The sin of disillusion in the Catholic faithful who see hypocrisy triumph. Or the sin of a pusher who destroys souls, cops who kill pushers in their pay, or the real-estate developer who does not pay the piddling commission of the young men and women selling his units at the mall, or the businessman who vacations abroad while stiffing his workers at home, Francis said. Or public officials who condemn sex caught on video while doing it without cameras with poor young girls.

Wednesday, July 26, 2017 A11

Actions, not words, set apart a true Christian. A Christian is she who wears the orange robe of a Buddhist and does good works. A Christian is he who recites the Koran and takes the wanderer into his tent and save his Yazidi neighbor from fellow Muslims.

In his letter to the Romans, Paul said only a Jew is made for salvation. But who is a Jew? A Jew is one who does what the law commands, Paul said. Therefore, so also is a Gentile a Jew if he does the same even without knowing he is following Jewish law. Where then lies the distinction of being a born Jew? It lies in God marking out Abraham as the first

Healthy students make a healthy nation

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By Conchita Cristal Villar

S we celebrate Nutrition Month in July, it is imperative to remind all parents, educators, including health workers, about the importance of rearing healthy children.

Healthy children are more ready and able to learn and, in the longer term, are more likely to become healthy adults who will contribute as productive citizens. Healthy people can help build a strong and prosperous nation. To raise healthy children and create a healthy nation, policy-makers must have meaningful information or a useful database to support a broader conceptualization of health. Local and national policy-makers must use this database to inform those crafting interventions, programs and policies designed specifically for our students in elementary and high school.

The concern we face today points to our less than adequate attention to our children’s health. It looks like we have forgotten the importance of teaching our children the basic, but effective, health practices, like washing their hands and eating healthy food, like fruits and vegetables. Unwittingly perhaps, parents are guilty when it comes to the quality of food that our children eat. What is alarming is that childhood obesity has become a global problem. We can help prevent this kind of problem among our children by religiously monitoring the kind of food they eat. Because unhealthy children

often become unhealthy adults, health during childhood must be a major concern because children are important in their own right and because the nation cannot thrive if it has large numbers of unhealthy adults. As educators, we must remember that children are vital assets of society, and teaching them healthy habits while they are young is as important as teaching them how to read and write. We must teach children such important topics, like food nutrition and personal hygiene. For adolescents, we can open communications lines, for example, about the dangers of smoking, drinking alcohol and using illegal drugs. Being in good physical shape is not just helpful for climbing the rope in Physical Education subjects. Students need to know that those who get good grades are often those who are healthier and physically fit.

Jew when there were yet no Jews and all were Gentiles for his obedience to God’s command to slay his own son. Deed not word made the first Jew. Actions, not words, set apart a true Christian. A Christian is she who wears the orange robe of a Buddhist and does good works. A Christian is he who recites the Koran and takes the wanderer into his tent and save his Yazidi neighbor from fellow Muslims. A Christian is an atheist French philosopher fighting the Nazis in Occupied France. He is the unbelieving Dutchman hiding a Jewish family in his attic. All are Christians regardless, while a bad Christian is not one. To pretend what one is not as all can see, is the greater sin of hypocrisy.

Sleep is another factor that may affect our student’s health and study. Since adolescents devote less time to sleep as they age, especially when they sacrifice the precious time they have for sleeping to have more time for studying, they have to be informed about the negative consequences of the lack of sleep on their academic performance. Parents can help their students avoid late-night cramming sessions by helping them develop good study routines. For example, parents can help their teens stay on top of academic deadlines. Discipline and a good study habit will help ensure that our students remain healthy and wise. It pays to remember that a healthy student will help build a better nation in the future. The author is Teacher 3 in Pattao National High School in Buguey, Cagayan.

China lays the groundwork for domestic merger boom

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By David Millhouse | Bloomberg View

HINA’S central planner, the National Development and Reform Commission (NDRC), has set the stage for what could become the biggest theme in China over the next six to 12 months: a surge in domestic mergers and acquisitions that benefits the economy and stock market. That can be concluded from the NDRC’s confirmation last week that the government is curbing “irrational” outbound acquisitions in some sectors, likely due to growing concern of systemic risks related to overseas deals, as well as pressure those investments have placed on the yuan. In fact, the government’s scrutiny of overseas deals has been evident since late last year based on the 46-percent drop in nonfinancial outbound investment in the first half of 2017 to $48.2 billion from a year earlier. The most likely next step is for consolidation led by China’s stateowned enterprises (SOEs) as part of President Xi Jinping’s reform agenda. That can benefit the Chinese government in several ways. First, by using stronger SOEs to consolidate financially vulnerable ones, some credit risk will be diversified away from the banking system. Controlling corporate credit risk was a key policy prior-

ity highlighted at this month’s National Financial Work Conference. Second, consolidating capacity within the large SOEs could help the government’s supply-side reform agenda through state-enforced supply cuts. Finally, some mergers will strategically place large SOEs in a position to benefit from projects related to Xi’s “Belt and Road” trade and infrastructure initiative, like the combination in late-2014 of the country’s two main train producers and last year’s merger between its two biggest shipping groups. That’s not to say there won’t be offshore consolidation, but that is likely to involve combining SOEs’ offshore assets, as suggested by the state-owned Assets Supervision and Administration Commission (Sasac). Huang Danhua, vice chairman of the Sasac, said the commission “will also strengthen the supervision of state-owned capital this year by shifting the focus from

previously governing SOEs themselves to better managing their assets, to cut resource waste and improve work efficiency.” The local press has recently picked up on this theme. Caixin just reported that China may reduce the number of central SOEs to no more than 80 after planned restructurings or mergers, down from 101 at present. The article said SOEs will be divided into three groups of about 20 investment companies, about 50 industrial companies and two to three operations companies. The key sectors of focus will likely be coal, power, heavy equipment manufacturing and steel, as flagged by the Sasac briefing on reform on June 2. On specific mergers, Reuters reported that China is considering a merger between China Minmetals and China National Gold Group. Shenhua Group is reportedly in merger talks with China Guodian, part of a broader effort to consolidate the power sector. If approved, the combined group would have $262 billion of assets. ChemChina and SinoChem is another combination that local media outlets say may be in the works. The latest speculation follows two recently announced deals. Earlier this month, China Cosco

Shipping announced a $6.3-billion offer to buy Orient Overseas International. In March the listed arms of China National Nuclear and China Nuclear Engineering & Construction said their unlisted parent companies would merge, creating an $80-billion group. A new round of mergers and acquisitions has the potential to be a very positive driver for the economy and the stock market, given the large proportion of listed SOEs. The success of this strategy, however, rests on whether consolidation will produce a more efficient state sector. What China needs to avoid is just having strong SOEs merge with weaker ones. That would, as the International Monetary Fund recently put it, just undermine “the profitability of the well-to-do company and depriving the rest of the economy of resources that could be better spent elsewhere”. For this strategy to work, SOE consolidation must be combined with supply-side reform, financial reform, management reform, share-ownership reform, legal reform and the further opening up of strategic areas of the economy to foreign competition. If properly implemented, however, the economic and investment implications could be significant.

Poland’s president says enough is enough

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OLISH President Andrzej Duda just surprised almost everybody by vetoing parts of new government legislation that assaults judicial independence. “As president, I don’t feel this law would strengthen a sense of justice,” he said. He’s right. Poland’s democratic institutions are under threat, and the new initiative is only the latest of many. The government should weigh this embarrassment carefully, and think again. Duda owes his election to the Law and Justice Party. Up to now

he’s backed its policies and has told the European Union (EU), which is concerned about Poland’s direction, to mind its own business. It’s encouraging that, despite his debt of loyalty to the ruling party, he’s not just expressing concern but also acting. The government has already weakened the country’s constitutional court, attacked the media and put supporters in posts not usually reserved for party loyalists. The new legislation aimed to go several steps further—granting the justice minister power to nominate the

heads of local courts, politicizing the National Judicial Council, which nominates judges, and giving political authorities the power to stack the Supreme Court. No doubt, Poland’s judiciary leaves much to be desired. The government’s charges of inefficiency and corruption aren’t baseless, and political oversight of judicial appointments is standard in many democracies. Even so, a government that has rolled back democratic rights on so many fronts can’t be trusted to fix the problem. The EU is pressing for change but

has to move cautiously. There’s talk of invoking a treaty provision that could suspend Poland’s EU voting rights; the issue is under discussion this week. But there’s a risk that such a firm intervention from outside might strengthen domestic support for the government. Far better if Poland’s citizens push back against their own government’s illiberal tendencies. That seems to be happening. The new judicial laws aroused a stronger reaction than the previous changes. If the president is also now on board, that’s better still. Bloomberg View

2nd Front Page BusinessMirror

A12 Wednesday, July 26, 2017

SC junks bid to force House, Senate to vote jointly on martial law T

By Joel R. San Juan

@jrsanjuan1573

HE Supreme Court (SC) on Tuesday unanimously dismissed the petition seeking to compel the House of Representatives and the Senate to convene in a joint session and vote jointly on the legality of Proclamation 216, or President Duterte’s martial-law edict, as mandated under the Constitution.

At a news briefing, SC Spokesman Theodore Te said 13 justices voted to dismiss the petition. In a decision penned by Associate Justice Teresita Leonardo-de Castro, the justices dismissed the petition on the ground that Congress did not gravely abuse its discretion in not convening jointly upon Duterte’s issuance of Proclamation 216 plac-

ing the entire Mindanao region under martial law and suspending the privilege of the writ of habeas corpus. The Court held that Article V II, Sect ion 18 of t he 1987 Constitution, which allows the President to declare martial law and suspend the writ of habeas corpus only “ in case of invasion or rebellion, or when public

safety requires it”, imposes no duty on both houses of Congress to convene jointly to make the edict valid. It added that such duty to convene or vote is limited to instances where Congress intends to revoke or extend any proclamation of martial law or suspension of the privilege of the writ of habeas corpus. Two justices—Associate Justices Marvic Leonen and Alfredo Caguioa—concurred only with the result, but said the SC should no longer decide on the merit since “the controversy presented was already moot and academic.” The petition was filed by Manila Auxiliary Bishop Broderick Pabillo, Bishop Antonio Tobias, Bishop Emeritus Deogracias Iniguez, Mother Adelaida Ygrubay of the Order of Saint Benedict, Shamah Bulangis, Cassandra D. Deluria and former Sen. Wigberto Tanada. The petitioners specifically asked the SC to order the Senate and the House to convene and vote jointly on the legality of Proclamation 216.

They claimed that the lawmakers committed grave abuse of discretion when the lower a nd up p e r c h a m b e r s i s s ue d separate resolutions supporting Duterte’s martial law, which contravened the provisions of the Constitution. They insisted that the House and the Senate should convene and decide on the fate of Proclamation 216, noting that a “transparent and deliberative process is necessary to quell the people’s fears against Executive overreach.” Petitioners stressed that the constitutional mandate of the Senate and the House under Article VII, Section 18 of the 1987 Constitution cannot be legally carried out by separate briefings given by the Executive branch and the Armed Forces of the Philippines to both houses of Congress. They also said that failure to convene a joint session deprives lawmakers the chance to scrutinize the declaration, and the public of transparent proceedings within which to be informed of the factual bases of Duterte’s action.

DND vows to make PHL a safe haven for investors By Rene Acosta

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@reneacostaBM

efense Secretary Delfin N. Lorenzana said on Tuesday the government— through the defense establishments—is working to contribute in the attainment of economic development for the country by reducing, if not stopping, conflicts around the country. The defense chief made the statement during the general membership meeting of the Management Association of the Philippines (MAP), where he shared the efforts of the Department of Defense and the Armed Forces in carving out an environment conducive for business. “[The] DND [Department of National Defense] also contributes in the attainment of economic development. Given that conflicts produce an environment of fear, it tends to cause residents to move from one region to another and affects trade and commerce, resulting in economic dislocation,” Lorenzana said. “These things are what our department aims to prevent. We want to create peaceful communities that are attractive to companies looking to expand and do business. The DND helps in enhancing socioeconomic activities in the countryside by ensuring a safe and secure investment climate,” he added. The military is currently moving to boot out members of the Maute-ISIS Group in Marawi City, where they are currently hold out and challenging the government through a rebellion. The operation is also expected to take See “DND,” A2

MIRRORING BUSINESS The board of the Philippine Stock Exchange is reflected in a glass window at an establishment in the business district of Makati City on Tuesday. A day after President Duterte delivered his second State of the Nation Address, trading closed 9.08 points higher. See story on B2. NONIE REYES

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D.O.T. WORKING WITH OTHER AGENCIES TO IMPROVE INFRA IN TOURIST DESTINATIONS

A view of the San Vicente white-sand beach in Palawan Photo from www.SanVicente.com.ph By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

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HE continued growth of the tourism sector is assured with the significant improvements in local infrastructure being undertaken by the Department of Tourism (DOT), in partnership with the Department of Public Works and Highways (DPWH), the Department of Transportation (DOTr) and the DOT’s own attached agencies. In its one-year accomplishment report under the Duterte administration, the DOT said it continues to work “with different stakeholders and the DOTr in line with the ‘Build, Build, Build’ thrust of the current administration to further improve airport facilities and overall airport experience of our tourists.” The DOT also disclosed that six international carriers have applied to the government for new services that will further open up secondary gateways, like Cebu, Caticlan, Kalibo and Clark, to foreign tourists. These are West Air (Chongking-Cebu), Thai Smiles (Bangkok-Cebu), 9 Air (Guangzhou-Cebu), Hainan (Haiku to Cebu and Manila), Jetstar (Singapore to Caticlan and Clark) and June Yao (Shanghai-Kalibo). The DOT also reported that, under its convergence program with the DPWH, “the construction and improvement of roads and bridges and the installation of lightings leading to tourism destinations were completed in 16 out of 18 regions of the Philippines, totaling 209 projects.” The Tourism Infrastructure and Enterprise Zone Authority (Tieza), the DOT’s infrastructure arm, is now fully implementing its mandate to develop tourism enterprise zones (TEZs) after the Bureau of Internal Revenue finally issued revenue regulations last year granting tax incentives to private TEZ developers and

locators in both Tieza-run and private TEZs. Aside from helping complete the international airport at its flagship TEZ, the San Vicente town in northwestern Palawan, Tieza is also “bidding out feasibility studies on power and water supply; the construction of a tourism office and information center”; and has received the local government’s Deed of Restrictions and Development Guidelines for said TEZ. Tieza has also bid out several projects to improve the design of the Rizal Park (Luneta) in Manila, the DOT report said. These include the works for the Esplanade; the landscaping, repair and rehabilitation of the park; as well as installation of permanent lighting at the Rizal Monument and flagpole. The agency has also “completed the construction of tourist information centers and ‘green restrooms’ nationwide,” according to the DOT. Other Tieza projects include the ongoing construction of the new Tubbataha Ranger and Research Station in Cagayancillo, Palawan; Museo de Nuestra Senora de Penafrancia in Naga City ; 2-k ilometer mangrove boardwalk and convention center in Del Carmen, Siargao Island; Mount Pinatubo Eco-Tourism Park in Sapang Uwak-Uwak in Porac, Pampanga; and the Mindanao Tourism and Cultural Village in Davao City. The agency is also rehabilitating the following tourist destinations: the Hinulugan Tatak Waterfalls in Antipolo City; Cagsawa Ruins Park in Daraga, Albay; and the Manaoag Shrine Tourist Center in Pangasinan. Tieza is currently developing other TEZs, like Ciudad de Victoria in Bulacan; Bravo Golf Resort in Dumaguete City; and Queen’s Castle in Medellin, Cebu. The Duterte administration aims to attract 12 million foreign visitors to the Philippines by 2022, when it ends its term.

VIRTUAL CURRENCIES SEE SLOW TAKE-UP RATE IN PHL Central Bank’s Supervision and Examination Sector told the BusinessMirror it received less than 10 applications from entities that are interested to be registered as virtual-currency exchanges. “We have reviewed the business models of some of the applicants and are awaiting their submission of additional requirements. We have not yet issued a certificate of registration for any virtual-currency exchange,” BSP Sector In Charge for the Supervision and Examination Sector Chuchi Fonacier said. “We have observed acceleration in transaction volume based on our survey of top industry players last year, prompting us to institute a regulatory framework. We have no

updated statistics to date, as these will come from the regular reports that registered entities will submit to the BSP,” Fonacier added. Part of the requirements upon registration to the BSP as a virtualcurrency exchange is the submission of periodic reports to aid the Central Bank in monitoring the virtual-currency usage in the country, which is estimated at around $6 million per month for certain major players. “We want to maximize the benefits from this technological innovation, while adequately managing the risks that come with it. Virtual currencies can help accelerate the delivery of financial services [e.g., payments and remittance] and low-

er the cost of transactions, which is consistent with our broader financial-inclusion agenda,” Fonacier told the BusinessMirror. While other countries have taken a more hostile stance on virtual currencies circulating in their jurisdiction, the BSP said its more positive approach to does not necessarily equate to more relaxed monitoring and surveillance of risks. “We are particularly keen on addressing money-laundering risk, that is why part of the responsibilities of a virtual-currency exchange is to comply with established antimoney laundering rules, such as know-your-client procedures, as well as proper reporting to the AMLC [Anti-Money Laundering

Council],” Fonacier said. The BSP official also warned of the safety of financial consumers against potential virtual-currency theft. “Virtual currencies in your digital wallet can get stolen—when buying virtual currencies, the same are stored in a ‘digital wallet’, on a computer, laptop, PC, tablet or smartphone. This digital wallet makes use of public and private keys or passwords that allow you to secure your wallet,” Fonacier said. “You are not protected when using virtual currencies for payment. Payments made through virtual currencies, like bitcoin, are immediate, direct and nonreversible. The value of your virtual currencies cannot be guaranteed and can change quickly.

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The value of virtual currencies has shown several sharp increases for the past year, and several sharp decreases, as well,” she added. The BSP said, aside from the upcoming reporting template that registered virtual-currency exchanges will be using to report to the central bank, they are not looking into any additional regulation in the pipeline for virtual currencies as of this time, as they await further data and developments from their earlier launched regulatory framework. “Nevertheless, we continue to monitor developments in this area and stand ready to take appropriate action on significant risks that may arise,” Fonacier said.