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n Friday, July 27, 2018 Vol. 13 No. 286

DTI asks PCC to check foreign shipping charges

By Elijah Felice E. Rosales

@alyasjah

HE country’s antitrust regulator was asked by the Department of Trade and Industry (DTI) to review foreign shipping charges, amid observations the exorbitant rates might lead to loss of competitiveness and hurt both business and consumers. “In the fast-paced age of digital business, compliance is often thought of as a burden and a cost center. Yet, with the right approach, it can be revealed for the cost- and reputationsaving function that it is. Compliance can provide the ethical center of gravity that influences the entire organization.”—Shumacher See column on A4

The DTI asked the Philippine Competition Commission (PCC) to look into allegedly unreasonable charges imposed by foreign shipping lines on importers

and exporters. “We are requesting the Philippine Competition Commission, through Chairman Arsenio Balisacan, to act on the concerns of

[the] business sector regarding questionable destination and origin charges imposed on local importers and exporters,” Trade Secretary Ramon M. Lopez said on Thursday. “These excessive charges and fees are recurring issues that have brought significant negative impact on our local industries.” Citing a joint study by the Export Development Council and National Competitiveness Council, the DTI said some shipping lines slap questionable fees on local importers and exporters. The study added that some logistic firms make freight cost less transparent in order to benefit exporters overseas at the expense of Philippine importers. See “DTI,” A2

HE Cagayan Economic Zone Authority (Ceza) is anticipating more than $400 million of investments from offshore hotel developers planning to build entertainment facilities in the Northern Luzon economic zone. At the sidelines of the launch of the ecozone’s own cryptocurrency at a hotel in Mandaluyong City on Thursday, Ceza Administrator and CEO Raul L. Lambino confirmed Continued on A2

Cagayan Economic Zone Authority Administrator and CEO Secretary Raul L. Lambino keynotes the launching of the ecozone’s own cryptocurrency at a hotel in Mandaluyong City. He said Ceza aims to create a fintech hub—offering financial products relating to blockchain, cryptocurrency exchanges, initial coin offerings, payment solutions, cloud computing, big data, artificial intelligence, robo-advice and other financial-technology solutions. ALYSA SALEN

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Congratulations, Madam Speaker Dr. Jesus Lim Arranza

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am amazed at former President and now Pampanga Rep. Gloria Macapagal-Arroyo’s election as the 25th Speaker of the House of Representatives. The developments that led to Arroyo’s election as the new Speaker of the 17th Congress may have been lightning fast, surprising almost everyone except the 186 House members who gathered the majority vote to declare her as their new leader. Continued on A10

‘₧160B needed to fund BOL, hike in IRA share’ By Jovee Marie N. dela Cruz

Ceza eyeing $.4-B hotel investments from 4 players

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“We can work within the ceiling of the proposed 2019 budget, by realigning items, because under the Constitution we cannot increase what the President has proposed.”—Andaya

@joveemarie

LEADER of the House of Representatives on Thursday urged the Palace to set aside P160 billion in the 2019 national budget for the implementation of the proposed Bangsamoro Organic Law (BOL) and the Supreme Court decision increasing the tax share of local governments. Deputy Speaker Rolando Andaya Jr. said in a statement, “budget space” must be created in the 2019 budget for these mandates, “which were not factored in” when the proposed P3.757-trillion outlay was being finalized by Malacañang. “At least P160 billion will be needed to finance these two. And this estimate is on the low side,” Andaya said. The House is expected to start the 2019 budget hearings on July 31. According to Andaya, PalaceHouse cooperation is important in finding money for these two “must-fund” items in the 2019 national budget. President Duterte signed the BOL into law late Thursday. Andaya said one estimate given

during congressional debates was that P110 billion will be needed to implement it in the first year alone. “If there’s P32 billion for ARMM for 2019, plus P15 billion lodged with national government agencies and about P25 billion in internal revenue allotment [IRA], then we must look for an additional P38 [billion] to P40 billion, to finance the balance,” Andaya said. Andaya said the Supreme Court’s July 4 ruling that the share of LGUs should be sourced from “all national taxes and not only national internal revenue taxes,” must be complied with, as well. The implication of this decision is that next year’s IRA must be increased by P120 billion, per one estimate, from the P575.5 billion proposed in the 2019 budget. Continued on A2

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A2 Friday, July 27, 2018

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Drilon backs fiscal perks’ review despite Palace tags P90-M fund for info drive on draft cool regard for 2nd-batch tax reforms ESPITE earlier reports that federal charter many senators are wary about

sponsoring the second package of the Tax Reform for Acceleration and Inclusion law until a full review of the first package is completed, the opposition leader in the Senate is backing a key plank of the nextround reforms. Minority Leader Franklin M. Drilon affirmed support on Thursday for continuing efforts to rationalize fiscal incentives, saying he has long been advocating it. Drilon told reporters at the Senate Kapihan forum there are now 14 agencies “promoting investments by granting incentives.” He added: “In our studies, it showed that there are 123 investment laws today. That is why in the last Congress, since the rationalization was not on the agenda, I pushed for the Tax Incentive Management and Transparency Act [Timta],” said Drilon.

He explained that Timta was crafted to “require reporting from the recipients of the incentives to provide data on the benefits of the incentives granted to them,” noting that “they are supposed to report as to what benefits the people would have, like in terms of employment generation.” He added: “We have to rationalize these [because] there are 123 tax incentive laws that are in our books today.” Drilon recalled a study showed that in 2015, at least P300 billion in forgone revenues resulted from the tax incentives granted. “The

question is, what benefits the people get out of these incentives? All of these things must be studied. I believe it’s about time that we rationalize these incentives that we grant.” Drilon lamented that “notwithstanding all these incentives, we still lagged behind in terms of foreign direct investment among Southeast Asian nations.” He asser ted t he need to “r at ion a l i z e t he s e a nd f i nd out whether really this is the reason why companies would come to the Philippines,” vowing to back any remedial measure that will “rationalize” existing tax incentives. “It is about time that we look at these,” said Drilon. “As we know, there are a lot of abuses; [some are enjoying] perpetual [perks]. [Those] tax holidays are perpetual to some companies. I am supporting the rationalization.” Asked if there was a better chance of quickly passing the Timta, Drilon replied: “That is why, if we push this, there is a better chance that we can rationalize the incentives granted. We must look at this

to check on the abuses.” He, however, acknowledged the law is taking time to pass even as the measure is expected to earn more revenues for the Department of Finance. “Have you heard of the word lobby?” Drilon asked, but declined to elaborate nor name the group behind the lobby. “My position is, this is one area where we can prevent a revenue leak or minimize it and therefore, increase the taxes that we collect. I am in favor of sin taxes. I sponsored that. Insofar as I am concerned, we should have higher taxes on cigarettes and liquor,” added Drilon, indirectly indicating where the lobby comes from. At the same time, Drilon brushed off concerns aired by some senators that rationalizing incentives may turn off investors. “I don’t believe that. As long as the environment for doing business is favorable, they will not leave,” said Drilon. “What we must stop is the taking advantage of the incentives, which should no longer be there because they had served their purpose.” Butch Fernandez

‘₧160B needed to fund BOL, hike in IRA share’ Continued from A1

“The total amount to be funded represents all tax collections three years prior under the new formula,” Andaya said. “The basis for that is that the decision applies prospectively. If it were retroactive, the amount would exceed P1 trillion,” he added, in a mix of Filipino and English. The IRA represents the LGUs’ 40 percent share from national taxes collected. Prior to the Supreme Court decision, only BIR collections were reckoned with in the computation, and excluded Bureau of Customs collec-

tions, which meant that local governments were denied their share from the VAT and excise taxes paid on fuel and other imported goods.

Three ways

Andaya cited three ways by which the two items can be funded. “First, we can work within the ceiling of the proposed 2019 budget, by realigning items, because under the Constitution we cannot increase what the President has proposed,” he said. “Or they can submit what is called a ‘budget errata,’ or a new

message from the President, which contains the proposed appropriations for BOL and IRA.” The third track is through a supplemental budget, said Andaya, adding, however, that this will be a redundant exercise. “Why craft a separate one, if the new expenditures can be loaded into the 2019 national budget?” he asked. Earlier, Rep. Luis Raymund Villafuerte of Camarines Sur, vice chairman of the House Committee on Appropriations, asked the Department of Budget and Management to immediately heed the

SC decision that the IRA for LGUs would now include all taxes collected from other government agencies apart from the BIR. He said this SC decision would help the national government in boosting the economy of LGUs once the country commences the shift to a federal system of government. Villafuerte also asked Congress to increase IRA share of LGUs in support of the imminent switch to federalism. Particularly, Villafuerte, through House Bill 4697, aims to increase the IRA from 40 percent to 60 percent over a three-year period.

DTI. . .

Continued from A1

SOUTHWEST MONSOON AFFECTING WESTERN SECTION OF LUZON AND VISAYAS as of 5:00 am - July 26, 2018

The study reported the country loses about $2 billion up to $5 billion due to this. According to Lopez, “Philippine exporters are hit hardest by these excessive fees, making our products more costly. Filipino consumers also bear the impact as the additional costs of imported goods are passed on to them,” Lopez added. The concern was raised by local freight carriers in a recent “doing business” event. The DTI was then urged to refer the issue to the PCC, given the agency’s mandate to address unfair trading practices. As the country’s antitrust regulator, the PCC has the capacity to regulate activities and practices that might erode market competition. It is currently undertaking a review on nine different industries that it identified as prone to anticompetitive practices, including rice and telecommunications.

By Bernadette D. Nicolas @BNicolasBM

ALACAÑANG said on T hu rsd ay t hey have identified at least P90 million to fund a massive information drive to promote the proposed draft Federal Constitution of the President’s Consultative Committee (Con-com). Presidential Spokesman Harry L. Roque Jr. confirmed in a briefing in Zamboanga Sibugay that the President will create an intergovernmental task force to disseminate the output of the Con-com nationwide, noting that the surveys have shown that the overwhelming majority still do not know much about federalism. “Well, I can confirm that there is an intergovernmental task force created and we have met already; this was last… if I’m not mistaken, two days ago,” Roque said. “We have accepted the challenge, and we will embark on this massive dissemination drive.” Con-com Chairman and former Chief Justice Reynato S. Puno first announced that the President will be forming in a few days the task force to be headed by Executive Secretary Salvador Medialdea and Roque. Roque also noted that they have identified initially a “little budget” for the dissemination of the Con-com-crafted draft Federal Constitution. Asked how much the budget is, he said the initial amount is at P90 million, of which P50 million may come from the savings of Con-com, while the P40 million is the one they initially identified for the budget. A lso, out of t he P4 0 m i llion, P10 million will go to the Presidential Communications

Operations Office for production of materials. “Well, you know, the one identified so far—and to be candid about it—is an initial P40 million but only P30 million can be used because P10 million will go to PCOO and then apparently, the Consultative [Committee] has savings of about P50 million, but they are not sure how they can actually spend it, because the life of the Consultative [Committee] is about to end this August,” he said. Under Executive Order 10, Concom’s life is set to end on August 19, six months from the date of convening on February 19. “So they are finding a way to be able to use the remaining funds of the Consultative [Committee] for dissemination pur poses,” said Roque. The intergovernmental task force has already met and initially agreed on a strategy to bring down the dissemination level to the level of barangay. This developed after top business leaders and analysts observed the President’s lack of determination to shift the country to a federal system in his third State of the Nation Address. In his Sona on Monday, the President did not prioritize the push for federalism nor did he formally endorse the draft of the proposed Con-com despite expectations for him to do so. Notably, he also thanked Puno and former Senate President Aquilino Q. Pimentel Jr., for their contribution in crafting the proposed constitution, which the committee formally submitted to the President first time on July 9. Meanwhile, on Thursday, the National Union of Career Executive Service Officers Inc. also endorsed the draft constitution.

Change in Lotto ticket prices results in lack of change By Ashley Manabat Correspondent

NGELES CITY—When Lotto ticket prices had to go up to P6, P12 and P24—from the previous P5, P10 and P20—to implement a provision of the TR AIN law, there was another unforeseen consequence, besides the disappointment of bettors who had to shell out more: Lotto outlets are now experiencing a shortage of coins for change, resulting in long lines. The long queues in Lotto outlets are expected to

further be aggravated by the Ultra Lotto draw on Friday with a jackpot amounting to hundreds of millions. On Monday the Philippine Charity Sweepstakes Office (PCSO) implemented t he increase in its prices due to RA 10963, or the TRAIN law, and Section 12 of the Bureau of Internal Revenue Regulations 4-2018 on Documentary Stamp. In an advisory that caught most of the public by surprise and even Lotto outlets, the PCSO said it is implementing the new price per ticket of all its lottery products.

Ceza eyeing $.4-B hotel investments from 4 players Continued from A1

there are four foreign firms that sent letters of intent to his agency to build integrated resorts in the Cagayan Special Economic Zone (CSEZ). Each firm wants to invest at least $100 million for a hotel and casino type of infrastructure. “We are now talking to four big companies for these projects, and their minimum investment each is $100 million. They would like to build hotels with casinos, like Solaire and Resorts World,” Lambino said in a mix of English and Filipino. The Ceza chief said he cannot yet reveal the names of the firms,

but they are based in Japan, South Korea, Malaysia and Hong Kong. He explained the firms are looking for lands in the CSEZ, and Lambino said he is amenable to allow them to develop, given the area still has 55,000 hectares available for use. Ceza Senior Deputy Administrator Raymundo T. Roquero also said one firm is determined to spend up to $500 million given the scale of development it is planning to do. “Let’s just say one firm could extend to $500 million depending on the scale of the infrastructure that they are going to set up, [especially] if it will

include the hotel, casino, theme park, golf course and a villa for the ultra-rich,” he added. The Ceza is working toward the entry of integrated resorts developers at the same time it is turning the CSEZ into a financial technology (fintech) hub. On Thursday Ceza granted Hong Kong-based Lianett Technology Ltd. license to operate its fintech business in Cagayan. The firm invested a total of $1.7 million for its operations that will begin first in Manila, and will soon transfer to the CSEZ once the required infrastructure are completed. Elijah Felice E. Rosales

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Opposition senators to SC: Let de Lima be our voice on ICC withdrawal issue By Joel R. San Juan @jrsanjuan1573

PPOSITION senators are asking the Supreme Court (SC) to allow detained Sen. Leila de Lima to argue on their behalf in connection with their petition seeking to declare as invalid the decision of President Duterte to withdraw from the Rome Statute of the International Criminal Court (ICC). In a three-page manifestation, the senators pointed out that it has been a practice of the High Tribunal to allow members of Congress to appear before it and argue cases that they file in their capacity as senators or representatives who are real parties-in-interest. “The undersigned manifesting senators, in the course of their preparations for this case and in compliance with this Honorable Court’s directive for the respective parties or their counsels to attendtheoralargumentsforthiscaseas scheduled, are of the strong conviction that the arguments for the case of all the petitioners will be best presented before this Honorable Court by their colleague, Sen. de Lima,” The manifestation was signed by Senators Francis Pangilinan, Franklin Drilon, Paolo Benigno Aquino IV, Risa Hontiveros-Baraquel, Antonio Trillanes IV and de Lima. The Court has set the oral argument on the issue on August 14, 2018, at 2 p.m. Aside from the opposition senators, a similar petition was filed by the Philippine Coalition for the Interna-

tional Criminal Court, or PCICC, led by former Commission on Human Rights Commissioner Etta Rosales and 11 other individuals. The two petitions have been ordered consolidated by the Court. The opposition senators added that the issues raised in their petitions are of “transcendental importance,” thus, the detained senator should be allowed to personally argue the case during the oral arguments. The opposition senators told the Court that they will no longer be represented by counsel during the oral arguments as they have decided to adopt in whole the arguments and positions that de Lima would raise. De Lima is currently detained at the Philippine National Police Custodial Center pending resolution of the illegal-drugs charges filed against her before the court. The senator is being accused of benefiting from the illegal-drugs trade inside the New Bilibid Prison (NBP) in Muntinlupa during her term as justice secretary. In an advisory issued on Thursday, the SC has limited the oral arguments to four major issues, such as whether it should take cognizance of the petitions; whether the withdrawal from the ICC’s Rome Statute through a “note verbale” delivered to the secretary-general of the United Nations is “valid, binding and effectual;” whether the withdrawal places the Philippines in breach of its obligations under international law; and whether or not it will diminish the Filipino people’s protection under international law.

Editor: Vittorio V. Vitug • Friday, July 27, 2018 A3

Lawmaker laments Mayor Sara’s role in House ‘coup’

By Butch Fernandez

@butchfBM

EN. Panfilo M. Lacson Sr. lamented the reported “meddling” of presidential daughter Mayor Sara Duterte in the sudden ouster on Wednesday of Speaker Pantaleon D. Alvarez to install former President- nowPampanga Rep. Gloria MacapagalArroyo as the new Speaker of the House of Representatives. “If talk about Mayor Sara Duterte having a direct hand and influence in the change of House leadership were true, it may not speak well of President Duterte’s much-touted strong leadership,” Lacson said. In a news statement, the senator suggested that Mayor Sara Duterte’s meddling in the internal affairs of a coequal branch of government should be quickly “challenged.” “Any power or authority delegated outside the official chain of the government bureaucracy should not only be discouraged, but challenged and checked at the soonest possible opportu

nity,” Lacson said. He deplored the latest incident recalling similar “interventions and influence-peddling” by close relatives of previous presidents. “We should not have a repeat of our past experiences under the previous administrations, from Marcos to P-Noy [Aquino], where persistent talks of interventions and influence-peddling by relatives of sitting presidents did not help any in the efficient and smooth management of state affairs,” Lacson said. Senate Minority Leader Franklin M. Drilon, for his part, suggested that the latest power struggle

in the House of Representatives, known to be dominated by Malacañang allies, should spur passage of remedial legislation to strengthen the existing political party system. In a news statement, Drilon said the sudden House leadership revamp that saw the installation of Mrs. Arroyo as new Speaker of the House should be seen as a warning that the country “lacks a decent political party system.” To cure this defect, Drilon pressed for the early enactment of Senate Bill (SB) 226 that, he said, “seeks to strengthen the political system in the country.” Drilon’s bill primarily penalizes political turncoats by disallowing them to run under any political party for any elective position in the next succeeding election after they changed party affiliations. The senator indicated he was airing the plea for immediate approval of the remedial legislation in the wake of reports that “members of the ruling PDP-Laban will bolt the party to join the regional party organized by the daughter of the President,” known as Hugpong ng Pagbabago. Drilon’s proposed law, embodied in SB 226, or the Political Party System Act, remains pending in Congress. The senator said SB 226 aims to “promote party loyalty, discipline and adherence to ideological principles, platforms and programs.”

Duterte appoints Martires as new Ombudsman By Bernadette D. Nicolas @BNicolasBM

RESIDENT Duterte announced on Thursday the appointment of Supreme Court Associate Justice Samuel R. Martires as Ombudsman, replacing outgoing Ombudsman Conchita Carpio-Morales, whose term expired on Thursday. “We have a new Ombudsman. I [have] signed the appointment of Justice Martires.... He was strict in the Sandiganbayan, but he is bright and he is a fair man,” Duterte said in his speech in Ipil, Zamboanga Sibugay. Since he was appointed to the Ombudsman post, the 69-year-old Martires will have to go on an early retirement from the Judiciary as he will be reaching the mandatory retirement age of 70. Martires won over the other two other nominees who were also listed on the short list of the Judicial and Bar Council (JBC). These are former Sandiganbayan Presiding Justice and incumbent Special Prosecutor Edilberto Sandoval and Felito Ramirez, a lawyer and a fraternity brother of the President. Martires was the first appointee of the President in the Supreme Court. Prior to that, he served as an associate justice of Sandiganbayan from 2005 to 2017. He also served as a trial court judge in Agoo, La Union before he was appointed by then-President Gloria Macapagal-Arroyo to the Sandiganbayan. To recall, Martires voted in favor of the ouster of former Chief Justice Maria Lourdes A. Sereno, the continued detention of Sen. Leila de Lima and upholding the year-long extension of martial law in Mindanao. In 2011, he also wrote the Sandiganbayan decision that junked graft charges against then Davao City Mayor Rodrigo Duterte over a park demolition built by his political rival Prospero Nograles. Like President Duterte, Martires also graduated also from San Beda College.

A4 Friday, July 27, 2018 • Editor: Vittorio V. Vitug

briefs JUST A ‘ROUTINE’ MED CHECK FOR DUTERTE–PALACE MALACAÑANG on Thursday squelched reports that President Duterte was rushed to the hospital. Presidential Spokesman Harry L. Roque Jr. said in a briefing in Ipil, Zamboanga Sibugay, “there is no truth to these rumors.” “The President is fine, although he went to have a regular checkup the night before his State of the Nation Address [last Monday]. He has not been to any medical facility since,” Roque said. After an hour and a half of routine examination on Sunday, the President was declared to be in good health. Roque also warned those who are spreading this “fake news” that they can be held criminally liable for their actions. “Please, it is, in fact, a crime…to spread this kind of news,” he said. The President admitted last month that he threw up while on a flight from South Korea due to migraine. Bernadette D. Nicolas

CUSI OKAYS CIRCULAR ON CONSUMER R.E. OPTION ENERGY Secretary Alfonso G. Cusi on Thursday said he had signed a department circular aimed at empowering electricity consumers to choose renewable energy (RE) as their source of power supply and manage their demand consumption and utilization. “Promulgating the Rules and Guidelines Governing the Establishment of the Green Energy Option Program (GEOP) Pursuant to the Renewable Energy Act of 2008” was signed by Cusi last July 18, a news statement released by the energy department stated.

D.E.N.R. AWARDS 1,685 LAND TITLES IN CENTRAL LUZON CITY OF SAN FERNANDO—A total of 1,685 titles or patents in Central Luzon have been awarded by the Department of Environment and Natural Resources (DENR) benefiting about 8,400 stakeholders. There were 189 land titles covering 141 hectares of public lands that have already been distributed to marginalized farmers of Central Luzon, according to DENR Regional Director Paquito Moreno Jr. “These agricultural land titles or patents issued to farmers aim to spur economic development in the region’s agrarian sector following the reinforcement of Agricultural Free Patent Reform Act of 2017,” he explained. Some 1,248 of the distributed land titles covering 29 hectares of public lands have been awarded to Central Luzon residents, he added. Ashley Manabat

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Neda says BOL passage may alter Mindanao project implementation

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What can make or break your company’s reputation? Compliance! this with their proactive insurance experts.

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HE National Economic and Development Authority (Neda) on Thursday said that there could be some “minimal” changes in the financing of some proposed projects in Mindanao in light of the anticipated passage of the Bangsamoro Organic Law (BOL). In a briefing on Thursday, Socioeconomic Planning Secretary Ernesto M. Pernia said that while there may be some changes, these would hardly be noticed. There are some 4,490 projects under the Public Investment Program (PIP) 20172022, the Neda said, a third of which, or some 1,340 are located at the Autonomous Region in Muslim Mindanao (ARMM). “We will have to review our plans in terms of the new landscape [after BOL passage]. We haven’t done that yet because the law has yet to be implemented. But there would be some [possible] changes, which shouldn’t be too drastic. It’s only the new Bangsamoro region [that would likely be affected with these changes],” Pernia said. Neda Undersecretary for Investment Programming Rolando G. Tungpalan, for his part, said projects that are funded by loans will be allowed to continue. The changes, he added, may be implemented on projects that have yet to begin. He said these alterations may be made, particularly on the financing aspect. “In fact, many of the ARMM projects carried out by [Department of] Public Works with a MOA [memorandum of agreement] between our national public works and local public works so the implementation arrangement will just continue for a time,” Tungpalan said.

Neda Undersecretary for Regional Development Adoracion M. Navarro, on the other hand, said apart from infrastructure projects, adjustments have to be made among projects in other sectors. Navarro also said the Neda will be assisting the Department of the Interior and Local Government in helping local government units (LGUs) make these adjustments through various technical assistance. Meanwhile, in terms of the capability of LGUs in implementing infrastructure projects, Navarro said the national government will assess the performance of the LGUs. The private-sector stakeholders in these projects, Navarro said, will also be assessed, particularly the contractors hired to undertake the projects. Tungpalan said the government is bent on weeding out contractors that have fallen behind schedule in implementing projects, especially projects in the regions. “All problematic contractors, slippages to the account of the contractor of more than 15 percent will be a ground for termination. In fact, line agencies are starting to weed out contactors that have fallen behind schedule on their own account,” Tungpalan said. “There’s a cleaning up to make sure that we are able to deliver on time, and of course [we will also factor in] the quality of the[se] various infrastructure projects,” he added.

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By Henry J. Schumacher

OR many executives, compliance is something they know is important but do not deeply understand. Compliance is often viewed as a necessary evil that hinders business, rather than understanding that compliance is essential to your business’s success. Having strong compliance officers on staff to make sure regulations are followed is critical, but that does not mean the C-level executives can totally check out. There are five essential things that top tech leaders must understand when it comes to compliance. What’s more, tech leaders can play an integral role in helping safeguard against misconduct at the top—often working alongside compliance officers to ensure the business has a strong regulatory structure with executive buy-in. Five compliance essentials 1. Compliance is much more than just something that facilitates your business RATHER than being viewed merely as a cost center, the compliance department provides real value by offering the business a more comprehensive cost-benefit analysis that incor porates compliance-related costs. The initial business analysis typically does not take into account the third-party-related expenses of due diligence, ongoing monitoring and a possible compliance failure. When these expenses are factored in by a compliance expert, the business receives a more accurate view of the cost of working with that third party before a contract is signed. This can help the business save real money if it is determined in advance that the cost outweighs the benefit of the third party. 2. A lack of compliance can cost you millions in fines and brand damage Fees and fines can cost a company a lot of money if it is fou nd to be noncompl i a nt. T he d at a pr ivac y l aw (DPA) lev ies cr im ina l pena lt ies a nd ot her gover nment agenc ies ha nd dow n c iv i l pena lt ies for br iber y, compet it ion, l abor, env ironment and accounting v iol at ions. Customers want to believe their information is protected, and that they are doing business with companies practicing legally and ethically. Compliance violations can turn customers away. That makes it hard for a company to recover its reputation, as there are few to no new customers to vouch for the trustworthiness of your business. The damage to brand reputation can often cost even more than those fines. The damage to C-level employees and the board of d irectors can also be high. D&O Insurance (D=Directors and O=Officers) is therefore gaining ground and— in some countries—has already re ac he d se n sit ive le ve l s. D& O Liabi lit y Insurance is avai lable in the Philippines and it may be worthwhile for D&Os to discuss

3. Strong compliance can make your business more competitive IN today’s activist, social media-fueled culture, one ethical misstep can lead to ruin for your business. The flip side of that is compliance with regulations and ethics can serve as a differentiator from your competitors. Companies need to ensure that the third parties they work with aren’t going to get them in trouble. And as a third party, being able to demonstrate compliance can help land that deal. In addition, strong compliance slashes business risk due to unvetted partners and can empower new revenue streams in new markets as that risk is reduced. This is an advantage over competitors who lack the ability to vet third parties well. 4. Not having an organized and systematic approach to compliance will cost you more in the long run THE up-front expenditures for an integrated compliance approach using advanced technology will end up costing less than the fines, fees and damage to brand reputation that can result from violations. Compliance is often very complicated, especially when grappling with regulations set by multiple countries. This is why having an organized and systematic approach is essential. It will ensure that nothing falls through the cracks and that there is total visibility at all times, freeing compliance professionals to work on high-impact projects that protect the business. This systematic technology approach includes supporting compliance monitoring activity, as well as communication and training activities. Compliance professionals can take advantage of the ubiquity of mobile devices to deliver ongoing training, alerts and reminders. In addition, data analytics can be a tremendous boon to the compliance department. This analysis can, among other things, help predict future compliance issues, improve the efficiency of compliance testing and conduct real-time monitoring of high-risk areas. 5. Having compliance officers (and a DPO) on staff is essential COMPLIANCE is a highly specialized arena within the organization. It requires time, effort, investment and a thorough programmatic approach. A professional compliance officer understands the various nuances that can ultimately protect your company from the problems described above and save your company’s bottom line and reputation. To take full advantage of this expertise, your head of compliance needs to be involved in strategic business decisions. This individual will need to understand and speak the language of business so that other leaders are willing to hear what needs to be said about the business value of compliance. Then they will be able to embrace the critical nature of compliance and provide the buy-in that then trickles down through all levels of the business. Working together IN the fast-paced age of digital business, compliance is often thought of as a burden and a cost center. Yet, with the right approach, it can be revealed for the cost- and reputation-saving function that it is. Compliance can provide the ethical center of gravity that influences the entire organization. Rather than merely enforcing policy, today’s compliance officers can help accelerate business by providing the information that lets business leaders make more informed decisions regarding the risk and expense of working with third parties. In this way, business and compliance need to converge rather than being at odds, and jointly they can create a firm foundation for success. Comments are welcome—contact me at Schumacher@eitsc.com

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Friday, July 27, 2018

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MISSION: PHL

SPANISH AID SUPPORTS SOCIAL REFORMS IN PHL B

EING a former colony, it was natural for the Philippines to have strong diplomatic and economic ties with Spain. The Philippines was under Spanish rule for 333 years. Through colonization, the country was able to learn and imbibe Spanish and Mexican culture. Many Filipino words have Spanish or Mexican origin and many of the country's local dishes were also inherited from Spain and Mexico. Spain ceded its control of the Philippines to the United States via the signing of the Treaty of Paris in 1898. Decades after the treaty was signed, the Philippines came into its own. In 2012, the Philippines extended a $1-billion loan for the Financial Transactions Plan (FTP) of the International Monetary Fund. The facility, at that time, benefitted debt-stricken European countries, including Spain. The Philippines did this despite its development challenges and in the spirit of international cooperation. The amount may not have been significant but it helped boost the country's diplomatic ties and economic ties with European countries, including Spain. Data from the Department of Trade and Industry (DTI) showed that Philippine exports to Spain jumped by 189 percent to $252.7 million in 2017, from $87.3 million in 2006. Shipments of Spanish goods to the Philippines have also been increasing. DTI data showed the country’s import receipts rose to $453.6 million in 2017, from

$112.6 million in 2006. Helping Spain get back on its feet in 2012 was also a means by which the Philippines could give back for all the assistance it has received from the Spanish government.

Spanish ODA

SPAIN has been actively involved in helping the country address its development constraints. That has been the main thrust of the Spanish Cooperation for over 20 years. From 2001 to 2012, Official Development Aid (ODA) for the Philippines reached a total of 245 million euros, of which 25 million euros have been directed towards humanitarian aid between the years 2006 and 2012. The areas of cooperation in those years saw the Spanish government extending help to promote economic growth for the extreme poor, governance, and environmental sustainability, particularly the impact of climate change on habitats. In the 2014-2017 Country Partnership Framework (CPF) for Development Cooperation, the Spanish government extended 50 million euros in aid to the Philippines. This is on top of the humanitarian aid provided to the country whenever the situation requires it. The cooperation focused on financing projects that are under crosscutting priorities such as social inclusion and the fight against poverty; gender development; promotion of

A GROUNDBREAKING CEREMONY was held on Tuesday, 29 May 2018. A representative from GOJUST, Ms. Yolanda Rodriguez O’brien of the Spanish Agency for International Development Cooperation (AECID) also graced the event, with Director Ronnel M. Tan of the Department of Public Works and Highways – Region I, and Ms. Nancy Bacurnay of the La Union provincial government. human rights and democratic governance; environmental sustainability; and respect for cultural diversity. “The quality of dialogue between the government, civil society and the Spanish Aid in the Philippines is very fluid and based on trust. The different mechanisms and harmonization forums allow for an effective exchange of technical information under the leadership of the member country,” the CPF read.

Grant projects

AS of 2017, data from the National Economic and Development Authority (Neda) showed that the Philippines has not received any loans from the Spanish government. Most of Spain’s projects in the country are financed by grants. As of December 2017, grant projects from Spain amounted to $10.99 million. The total ODA received by the country from Spain as of December 2017 was $14.34 billion. Neda data showed the Spanish government has seven ongoing grant projects in the Philippines amounting to $9.18 million. Four of these projects are in Governance and Institutions Development while three are in Social Reform and Community Development. The four projects in Governance and Institutions Development amount to $7.83 million. The largest of these projects is the $4.48-million Project Go-Just Hu-

man Rights with the Commission on Human Rights (CHR). “The project contributes to broadening of the scope of CHR and enabled its development at the national level, as well as the creation of national capacities to face an extended mandate,” according to documents from the European Union and Spanish Agency for International Development Cooperation (AECID). It also covers the operationalization of a National Prevention Mechanism against Torture,” It aims to strengthen the Justice System Coordinating Council and support its efforts in developing a sector reform agenda and its constituting elements. The project seeks to help decongest selected courts, streamline case management processes and promote the modern concept of electronic Courts or e-courts, as well as reinforce the administrative and financial management capacity, and support the efforts of independent constitutional bodies. It also aims to help civil society exercise oversight and demand accountability from the justice system with a particular focus on major human rights violations. The Spanish government is separately funding the same program being implemented specifically for the Autonomous Region in Muslim Mindanao (ARMM), costing $0.7 million. The three projects are under the Social Reform and Community Development and cost $1.35 mil-

MAP indicating areas where there are Spanish cooperation projects

lion. The largest project is the Inclusive Development for All: Consolidating the Benefits of Peace in Communities Affected by Armed Conflicts, which costs $590,000. The project is being implemented in support of the country's peace initiatives through the Office of the Presidential Adviser for the Peace Process (OPAPP). “In support of the country's peace initiatives, the AECID launched in 2011 a multi-year project with the Office of the Presidential Adviser for the Peace Process (OPAPP), entitled Peacebuilding and Development in Local Government Units in the Philippines, finalized in June 2016. The project supported the Philippine government's PAMANA

initiative: Resilient Communities in Conflict Affected Areas,” the AECID stated in a recent statement. “In a second phase of this long intervention in support of the OPAPP strategy, a new project is being implemented: Inclusive Development for All. Consolidating the benefits of peace in communities affected by the armed conflicts of the Philippines,” it added. Indeed, Spain is one of the strong bilateral development partners of the Philippines. One can only expect that the good relations between the two countries, forged in the crucible of history and the continuing robust interactions between their peoples, will continue in the years to come.

PHL, Spain to hold academic, scientific, cultural exchanges

ADRID—Ambassador of the Philippines to Spain Philippe J. Lhuillier and Universidad Complutense de Madrid (UCM) Rector Carlos Andradas Heranz signed on June 8 the “Agreement on Academic, Scientific and Cultural Cooperation” between the Philippine embassy in Madrid and the academic institution. The agreement serves as a formal commitment for both parties to collaborate and promote

exchanges between Philippine institutions and the UCM, which was once the school of Filipino heroes Jose Rizal and Antonio Luna when it was still called the Central University in Madrid. The agreement will allow the holding of congresses or multisectoral meetings that facilitate the academic, scientific and cultural exchanges between both countries. During the signing, Lhuillier and the Rector discussed possible

areas to focus on in the operationalization of the agreement, which include tourism studies, law, social sciences, and engineering. Both parties remarked on the historical significance of the university to Filipinos and the continuation of its long tradition of serving as the home of Filipino intellectuals in Spain. UCM is home to more than 80,000 students and has been consistently ranked one of the best universities in Spain.

AMBASSADOR OF THE PHILIPPINES TO SPAIN Philippe J. Lhuillier and Universidad Complutense de Madrid Rector Carlos Andradas Heranz sign the Agreement on Academic, Scientific and Cultural Cooperation. MADRID PE PHOTO

Friday, July 27, 2018

The World BusinessMirror

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Trump-EU trade truce can lead to all-out US-China trade war O

Oil prices rise as Saudi attack caused supply uncertainties

onald J. Trump’s surprise trade truce with the European Union (EU) has analysts asking, “What does this mean for the trade war with China?”

So far there are two very different answers. One camp sees the deal bet ween Tr u mp a nd Eu ropea n Comm ission President Jea nClaude Juncker to suspend new tariffs, while negotiating over trade as a deliberate attempt to mend fences with allies as the US girds for a protracted dispute with China. “ De - esc a l at i ng t he US -EU trade track, and possibly the Nafta trade track in the period ahead, does not mean the USChina trade track is also ripe for an off-ramp,” Krishna Guha, vice chairman at Evercore ISI, wrote in a note. “ This is possible, but it is at least as likely that the US is reducing trade tension with its allies in order to improve its leverage and staying power in what we continue to fear will be a prolonged trial of strength with Beijing.” Guha says Evercore ISI’s base case is there’ll be no US-China deal before 2019. The US truce with Europe is

likely to embolden Trump to increase his pressure on China, said Chua Hak Bin, a senior economist at Maybank Kim Eng Research Pte in Singapore. “Trump will likely blow his trumpet and argue that his trade war threats are working,” Chua said. “The probability of a fullblown US-China trade war has ironically increased with the USEU trade deal.” The other view: Trump’s apparent deal with Europe shows how bargains can be struck. “ T he w i l ling ness of Tr ump to ag ree to a trade tr uce w it h t he EU is a positive sig n t hat a simi lar ar rangement cou ld be reached dur ing a discussion w it h X i Ji npi ng ,” sa id A ndy Rot hman, a for mer US d iplo mat in Beijing who’s now an investment strateg ist at Matt hews A sia, a money manager. “I a lso t hink t hat X i is better placed to ma ke more concessions t han Junc ker was able to of fer, and t hus obta in more concrete resu lts f rom Tr ump.”

T h at ’s b e c au s e of X i ’s p o s it ion a s t he sole le ade r of h i s c ou nt r y a nd h i s p l e d ge to m a k e C h i n a’s e conomy i n c re a s i n g l y m a r k e t - or ie nt e d , s a id R ot h m a n . One thing all analysts can probably agree on—don’t count your trade truce chickens just yet. “ We s hou l d b e c aut iou s ,” sa id Debora h Elms, e xecutive d i rec tor of t he A si a n Trade Centre, a consu lting f ir m in Singapore. “ T he EU got promises to start talking. China also re c e i v e d s i m i l a r t re at me nt . A f ter t wo d ia log ue sessions, China ended up facing $50 bi llion in tar if fs w it h potentia l ly more on t he way.” Tr ump has a lready imposed 25 -percent t a r if fs on $34 bi l l ion of i mpor ted C h i nese goods—tr ig ger ing reta liation f rom B e iji n g — w it h a not he r $16 billion likely to be targeted soon. At the same time, the Office of US Trade Representative h a s ident if ied a n add it iona l $200 bi l lion of Chinese goods slated for a 10 percent dut y and Tr ump has t hreatened to target as much as $500 bi l lion wor t h—rough ly t he va lue of China’s annua l goods e x por ts to t he US. W hile there appears to be little sign of negotiation between the US and China, the situation remains f luid. Trump has surprised before by pushing ahead

with tariffs even after Treasury Secretar y Steven Mnuchin in May declared the trade war was “on hold.” Trump also lifted a ban on American firms selling products to Chinese telecommunications equipment maker ZTE Corp. and opted for a softer tack on new rules scrutinizing Chinese investment. While Chinese officials remain open to a deal, they are unsure about trusting their American counterparts, Bloomberg News has reported. For now, the mood among a n a lysts sug gests t h at opt im ism for a brea kt hrough in the US and China tensions is low. Goldman Sachs Group Inc. economists led by Jan Hatzius are among them. “ O ve r a l l , we do not b e l ie ve t h at re ce nt p os it ive de ve lo p me nt s re g a rd i ng US - EU t r ade shou ld b e i nte r pre te d a s a re duc t ion i n r i s k i n t he ot he r m ajor t rade d ispute, w it h C h in a . I n f ac t , t he y l i k e ly me a n t he o p p os ite,” t he G old m a n e conom i st s w rote. T he ef fect of t hat trade war on China’s g row t h may a lso be limited so far, accord ing to a se pa rate Gold m a n Sac hs re por t. T he y uan’s recent tumble on a trade-weighted basis w i l l of fset t he d rag on Chinese g row th from the f irst t wo rounds of US tar iffs, according to t he repor t. Bloomberg News

il in London headed to the highest close in almost two weeks after an attack on tankers belonging to top exporter Saudi Arabia heightened uncertainties over supplies, while US cr ude and gasoline stockpiles plunged. Brent crude futures advanced as much as 1.1 percent, on course for a third daily gain. Two Saudi vessels were attacked by Yemeni Houthi militia members, leading Saudi Arabia to temporarily stop sending oil shipments via the Bab el-Mandeb Strait. In the United States crude inventories dropped to the lowest since 2015 last week, while gasoline supplies slid for a fourth week. The drop in stockpiles and concerns over supplies are helping crude recover some of its recent losses that were driven by an escalating trade spat between the US and China. While the Organization of Petroleum Exporting Countries (Opec) and its allies last month agreed to pump more, speculation is swirling over how Iran’s exports will be affected by President Donald J. Trump’s decision to renew sanctions on the Persian Gulf state. The Saudis’ temporary halt on shipments is “shor t-ter m bullish,” said Stephen Innes, Singapore-based head of trading for Asia-Pacific region at Oanda Corp. “I’m not looking at it as a long-drawn process. But in the meantime, if there’s any uncertainty or disruption, prices may pop up by a few cents.” Brent for September settlement added 44 cents to trade at

$74.37 a barrel on the Londonbased ICE Futures Europe exchange as of 7:37 a.m. in London. Total volume traded was 63 percent above the 100-day average. The global benchmark crude traded at a $5.02 premium to West Texas Intermediate. W T I c r ude for Se ptember del iver y rose as muc h as 4 4 cents to $69.74 a ba r rel on t he New York Mercantile Exchange a nd t raded 4 cents cent h igher at $69. 34. Pr ices ga ined 1.1 percent on Wed nesd ay. Futures for September delivery gained less than 0.1 percent to trade at 503.3 yuan a barrel on the Shanghai International Energy Exchange, after rising 1.7 percent on Wednesday.

Tankers attacked

In the Midd le East, Saudi A rabia immediately suspended oil shipments through the Bab elMandeb Strait after t wo vessels, each car r y ing 2 mil lion bar rels of cr ude belong ing to t he Saud i Nat iona l Shipping Co., were at t ac k e d b y I r a nbacked Houthi members. Investors have been tr ying to gauge the impact from the closure as the strait is one of the world ’s key shipping lanes for crude and other petroleum products. A full closure would force tankers sailing from Saudi Arabia, Kuwait, Iraq and the United Arab Emirates “around the southern tip of Africa, which would add to transit time and cost,” according to the US Energy Information Administration. Bloomberg News

I.S. fighters ambush city, Xi warns of no villages in southern Syria winner in Trump

AMASCUS, Syria—Islamic State (IS) fighters ambushed a city and several villages in southern Sy r i a o n We d n e s d ay, t r i g g e r i n g ferocious clashes between residents and the militants that provincial health officials said killed more than 200 people. The coordinated attacks across the province of Sweida, which included several suicide bombings, shattered the calm of a region that has been largely insulated from the worst of the violence of Syria’s seven yearlong civil war. The suicide bomb blasts inside the provincial capital, also called Sweida, were apparently timed to coincide with attacks on villages in the eastern countryside, creating mayhem across the province. Th e at t a c k s t r i g g e re d d e a d l y clashes bet ween pro - government fighters and residents who picked up weapons to defend their hometowns on one side and IS militants on the other. By nightfall, the province’s health directorate had recorded 204 civilians killed and 180 wounded, according to local official Hassan Omar, making it the single bloodiest day for the province since the 2011 national revolt that sparked the ongoing civil war. Sultan Bou Ammar, a resident of the village of Shbiki, said some residents unwittingly opened their doors when militants knocked early Thursday morning, so unexpected was the attack. “They kidnapped more than 40 people, all of them women or children,” said Bou Ammar. The Syrian Obser vator y for Human R ights monitoring group said at least 183 people were killed, including 94 residents who were par t of local defense militias that have the backing of the Syrian government. At least 45 IS militants were killed in the fighting. Al-Ikhbariya state-run TV showed images from several locations in the province and its capital where the bombers blew themselves up.

The rare attacks in Sweida, populated mainly by Syria’s minority Druze, came amid a government offensive elsewhere in the country’s south. Government forces are battling the IS-linked group near the frontier with Israeli-occupied Golan Heights and near the border with Jordan. The group also has a small presence on the eastern edge of Sweida province. Since their offensive in June, Sy r i a n Pre s i d e nt B a s h a r A s s a d ’s forces have retaken territories controlled by the rebels along the Golan Heights frontier and are now fighting militants in the country’s southern tip. IS has been largely defeated in Syria and Iraq, but still has pockets of territory it controls in eastern and southern Syria. The extremist group boasted that its “soldiers” killed more than 100 people in Sweida. In a statement posted on the group’s social-media channels, it said its militants carried out surprise attacks on the government and security centers, sparking clashes with Syrian troops and allied militias. The death toll in Sweida, initially reported at 27, quickly climbed. The Observatory also reported a series of suicide blasts and the clashes in the province’s countryside. It said the dead included civilians, pro government fighters and IS militants. An activist-operated media platform on Facebook, Sweida News Network said a local militia was fighting the advancing IS-affiliated group and that at least 30 militiamen were killed in the clashes with the militants. A l - I k h b a r i ya s a i d o n e o f t h e suicide bombers hit a vegetable market in the city of Sweida just after 5 a.m., a busy time for the merchants at the start of their day. The bomber drove through the market on a motorcycle and there detonated his explosives, the T V station said. A second attacker hit in another busy square in the city. Two other attackers blew themselves up as they were chased by security forces, the TV said. AP

trade dispute

OHANNESBURG—Chinese President Xi Jinping said on Wednesday the world faces “a choice between cooperation and confrontation” amid a trade war with the United States that he warned would have no winner. T h o s e w h o p u r s u e “e c o n o m i c hegemony” will “only end up hurting themselves,” Xi said at the annual summit of the BRICS emerging economies, held this year in Johannesburg. “Unilateralism and protectionism are mounting, dealing a severe blow to multilateralism and the multilateral trading regime,” he added in remarks critical of escalating US tariffs on goods from China, the world’s second-largest economy and other major trading par tners. Just hours earlier, US President Donald J. Trump accused China of “vicious” tactics on trade, tweeting that China was specifically targeting US farmers with retaliatory tariffs because “they know I love & respect” them. The other leaders of BRICS countries— Russian President Vladimir Putin, Indian Prime Minister Narendra Modi, South African President Cyril Ramaphosa and Brazilian President Michel Temer—are expected to join the three-day summit. Turkey’s president, Recep Tayyip Erdogan, has also been invited. Ramaphosa also expressed concern about “the rise in unilateral measures that are incompatible with World Trade Organization rules” and are especially damaging to developing countries. Trump’s comments on China came after his administration announced a plan to provide $12 billion in emergency relief for farmers who have been slammed by the president’s trade disputes. China has retaliated to American tariffs with duties on some US products. The Chinese leader told the summit that “we are facing a choice between cooperation and confrontation, between opening up and a closed-door policy.” “The current international order is not perfect,” Xi said, but it should not be discarded “as long as it is rule-based, aims to be equitable and pursues win-win outcomes as its goals.” AP

Opinion BusinessMirror

A10 Friday, July 27, 2018 • Editor: Angel R. Calso

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editorial

Firm national policies needed

T is incredibly ironic that those who keep saying democracy is dead—or dying—in the Philippines are also the same people who proudly announce that tens of thousands came to protest President Duterte’s State of the Nation Address. And they indiscriminately throw around the word “dictator”—a ruler with total power over a country—that it has lost its meaning and impact. However, there is a justified and valid complaint that whoever occupies Malacañang may have too much power, and that did not start with the Duterte administration. We have witnessed too many instances where policy continuity between presidential administrations is broken on Day One after an inauguration. A president is voted into office in large measure on the policies that he or she has proposed. That is proper. But the problem is that often the sitting president changes policy based on personal preference, or creates policies in the same way. It is not a matter of whether we agree with a presidential policy. It is a matter of long term national plans and strategies being determined often solely by the person standing in front of the presidential seal. An examination of what has transpired is not a sort of criticism of one individual or even the policy. This is a great concern that the system allows for significant changes in the direction of the government without any “checks and balances” that the government always needs. The Philippine Mining Act of 1995 was passed into law through constitutional procedures. After 10 years of litigation, the Supreme Court ruled on its validity. As a national law, you might think that the only way it could be changed would be through the same procedures that brought that Act into existence. Yet, in 2012, then-President Aquino signed Executive Order (EO) 79. The Order “sets policies and guidelines to ensure environmental protection and responsible mining in the utilization of mineral resources. The Order identifies areas closed to mining applications, including protected areas and prime agricultural lands. Tourism development areas and other critical areas, including island ecosystems are also considered as no-go mining zones.” The question, then, must be asked, isn’t all that a job for the Legislature and if not, what do we need Congress for? Further, unlike with legislation, an EO virtually accommodates no public input. Duterte has made clear his views on both the mining industry and legal casino gambling. That is proper and to be respected. But here again, should the President—any president—have authority to unilaterally make national policy? Casino gambling is clearly regulated by the Philippine Amusement and Gaming Corp. and is subject to several national laws, including Republic Act 9487. If national policy set by legislative action—as well as any local laws— are followed, is it in the best interest of the public that any president can step in with an EO, and change or at least circumvent existing laws? If we want to eliminate some of the uncertainty, then we must have continuity from administration to administration, which will only come with narrowing presidential power down to the existing laws on the books. If a president wants changes in policy, then he or she should be required to go through the legislative process, not by simply affixing a signature to an EO. That is not representative democracy.

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VERY election advocacy group, every single time elections come rolling around, releases a set of criteria intended to describe the ideal candidate. Many times, these criteria are tailored to fit the predilections of whatever advocacy group is releasing it—a church-based group, for instance, would emphasize godliness, whereas a civic organization would probably underscore the need for community building credentials. But as helpful as these criteria may sometimes be, they almost always focus on suitability of the individual candidate. But even checking off all the boxes (a rarity in itself ) won’t guarantee that a candidate will be a good public servant. To be honest, no such guarantee is possible anyway. So instead, we should focus on giving the public—voters and nonvoters alike—a better set of standards to judge elected officials by. That way, voters can have a better handle on how to evaluate the suitability of politicians for elected office. I call these standards “deliverables.” Elected politicians owe the electorate and the nation at large, three major deliverables: accountability, competence and transparency. Being an accountable public

official means not just giving lip service to the mechanisms of accountability already hardwired into the laws; it means believing in being responsible so much that belief forms part of one’s decision-making process. This mind-set was best exemplified by the great Ramon Magsaysay, who insisted that every official act he took had to be defensible in Plaza Miranda. Every politician now will say that they adhere to this exacting standard, of course, but

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Accountability. Competence. Transparency. These are the three fundamental things elected officials owe, not just their voters, but everyone they claim to serve. When the campaign period comes, or even before it does, politicians gunning for office ought to be able to show the vigilant voter that, on top of being famous or recognizable, they can bring these deliverables to the table. the trick is to discern who among them actually does. Needless to say, elected officials also owe the people competence. Elected officials must not just have the ability to win votes—sadly, the lowest possible bar ever set for anyone aspiring to elected office and the one seemingly most favored by far too many politicians—they must also have the ability not to make a mess of things. One of the core precepts of bioethics— “first, to do no harm”—should be considered as an unwritten rule for everyone who aspires to public office. Again, this may be

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Deliverables

Dr. Jesus Lim Arranza

Continued from A1

OWEVER, the leadership change at the House is welcome news for me, knowing that we now have a House leadership that has a good economic grasp, vast experience in good governance, and most important, sensitive to people’s needs. Speaker Arroyo is an economist. Thus, she knows the ramifications for creating an economic environment that would be conducive for investments from both foreign and local investors. This could eventually help temper the country’s current inflation rate. The Speaker will also be a big help to President Duterte’s “Build, Build, Build” program by setting in place a legislative agenda that would be in sync with the Duterte administration’s flagship multitrillion-peso infrastructure program. As an anti-smuggling advocate and chairman of the Federation of

Philippine Industries (FPI), I had the chance to help the Speaker when she was the country’s 14th president. I know she is a hard worker and her work attitude is infectious. She is very particular with the small details of the issues that reach her desk. To protect and promote the interests of Filipino consumers and the country’s manufacturing industry, then-President Arroyo issued Administrative Order 227 requiring schools and other government instrumentalities to give preference to locally made products in the procurement of their

Speaker Arroyo is an economist. Thus, she knows the ramifications of creating an economic environment that would be conducive to investments from both foreign and local investors. This could eventually help temper the country’s current inflation rate. The Speaker will also be a big help to President Duterte’s “Build, Build, Build” program by setting in place a legislative agenda that would be in sync with the Duterte administration’s flagship multitrillion-peso infrastructure program. needs and to import only when their material requirements are not locally available, in support of FPI’s “Buy Filipino, Buy Local” program. I also had the privilege to attend her Cabinet meetings when the Speaker was the country’s president as she would almost always invite me to join the top-level meetings, especially if the topics to be dis-

a ridiculously forgiving standard, but considering that even well-intentioned incompetence can have catastrophic consequences, it still bears emphasizing. A s must t ra nspa renc y be. Transparency only means that the elected official must, at all times, be welcoming of public scrutiny of her acts. Some would make a distinction and say that transparency should only be expected only with regard to a politician’s official acts; I think the distinction is illusory. Once elected, there can be no practical delineation between what a politician does as an elected official and as a private person. This is the lesson of that old maxim exhorting elected officials to be “like Caesar’s wife”—not simply to be actually beyond reproach, but also to appear to be of unimpeachable character. Accountability. Competence. Transparency. These are the three fundamental things elected officials owe, not just their voters, but everyone they claim to serve. When the campaign period comes, or even before it does, politicians gunning for office ought to be able to show the vigilant voter that, on top of being famous or recognizable, they can bring these deliverables to the table.

cussed include customs matters and anti-smuggling. And in those meetings, I can only express my astonishment in her work style. She is reasonable, yet discerning; and understanding, yet stern. These, and countless other milestones and achievements of Speaker Arroyo in her various capacities in the government are testimonies to her dedication as a public servant. She listens to suggestions from the private sector, even as she consults the affected sectors in her policy decisions. Thus, I can say that our 17th Congress is in good hands. Congratulations, Madam Speaker Gloria Macapagal-Arroyo on your latest House feat. Rest assured that, just like our full support for your programs when you were our president, the Federation of Philippine Industries will also be behind you in your various endeavors as House Speaker. In the meantime, let us give the new Speaker a chance to lay down her legislative agenda for the House, and extend to her our full support. And Madam Speaker, the FPI will only be a phone call away for anything that can help you at the House.

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Proposed Philippine Federal Constitution: Innovations in taxation Atty. Fermo B. Avila II

TAX LAW FOR BUSINESS

HE advent of Charter change is at hand. Several attempts to amend or revise the 1987 Philippine Constitution have been made during the past administrations. But none of them were as close to amending the Constitution as the present one. President Duterte’s political will to shift our form of government to federalism is the strongest it has ever been. And as the third regular session of the 17th Congress of the Philippines recently opened, the probability of modifying the Constitution is at its peak. Thus, a preview of the following innovative provisions in the proposed draft of the Federal Constitution (hereinafter referred as the “draft”) about taxation shall provide a better understanding of what’s to come. First, concerning a general provision on taxation, the draft mandates that taxation shall be progressive, in contrast to our present Constitution, which provides that Congress “shall evolve a progressive system of taxation.” Second, with regard to the number of votes necessary to enact laws granting tax exemption, the draft proposes to raise the minimum requirement of votes to “at least two-thirds of all the members of each House of Congress, voting separately” from “a majority of all the members of Congress.” Third, the draft proposes to introduce the concepts of exclusive powers, shared powers and reserved powers. Exclusive powers pertain to those powers that are restricted or limited to the Federal Government or the Federated Region. Under the draft, exclusive powers include the Federal Government’s exclusive power over customs and tariffs, and the Federated Region’s exclusive power over creation of sources of revenues. Shared powers, on the other hand, are those not exclusively given to either the Federal Government or to the Federated Regions, and which can be exercised jointly or separately. And in case of dispute or conflict in their exercise, the federal power shall prevail. As for the reserved powers, these are the powers not exclusively given to either the Federal Government or to the Federated Region nor shared by them and not prohibited by the Constitution. The reserved powers shall be vested in the Federal Government. Fourth, with reference to the Judiciary, the Federal Supreme Court shall have jurisdiction over the review, revision, modification, or affirmation on appeal or certiorari, as the law or the Rules of Court may provide, of cases involving, among others: the jurisdiction of any lower court, the legality of any tax impost, assessment, or toll, or any penalty imposed in relation thereto; or error or question of law. Moreover, the Federated Regions shall have a regional Judiciary, which shall be composed of the Regional Supreme Court, Regional Appellate Court, regional trial courts and such lower courts and special courts, in component provinces, cities and municipalities. Their jurisdictions shall be defined by their respective Regional Assemblies in accordance with the Federal Constitution. Fifth, in respect of election contributions, the draft provides that any citizen who contributes at P10,000 but not exceeding P100,000 to any registered political party or presidential candidate through the Democracy Fund shall be allowed a full credit against income taxable year coinciding with the elections in which such political party or presidential candidate participated; provided, that such

amounts shall be subject to proper adjustment under the rules promulgated by the Federal Commission on Elections. Furthermore, any corporation, partnership, or association which contributes at least one P100,000 but not exceeding P3 million to any registered political party or presidential candidate through the Democracy Fund shall be allowed a full credit against income tax due for the taxable year coinciding with the elections in which such political party participated; provided, that such amounts shall be subject to proper adjustment under the rules promulgated by the Federal Commission on Elections. Sixth, with regard to the civil right to data privacy as applied to taxpayers, the draft provides that the data obtained about a person shall be used and processed only for purposes authorized by law. A person has the right to inquire from any government office or agency the information or data that has been obtained, stored, or processed about himself, and to demand, that such data and i nfor m at ion be cor rected or deleted, or in case of a private entity or person, that their use be enjoined. Last, as regards unreasonable searches and seizure as applied to tax-related criminal cases, the draft provides that the prohibition against unreasonable searches and seizure shall extend to the conduct of unlawful and unreasonable surveillance through technological, electronic, or any other means. Accordingly, while the basis of the aforesaid provisions will, most likely, undergo several revisions, as it is an early version of the Federal Constitution, it is best to see its silhouette. As the country ushers in the process of Charter change, it is the duty of the citizenry to scrutinize every legal provision with an attitude of being receptive to innovative ideas. The populace must encourage interaction, conflict, argument and debate, as these are ingredients for great ideas and genuine innovation. The general public must not be afraid of change. For without change, no innovation or progress can be made. The author is a junior associate of Du-Baladad and Associates Law Offices (BDB Law), a member-firm of WTS Global. The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported therefore by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at fermo.avila@ bdblaw.com.ph or call 403-2001 local 150.

Friday, July 27, 2018 A11

How I became the first Filipino ‘benshi’ Tito Genova Valiente

ANNOTATIONS

AST Wednesday, July 25, 2018, I became the very first Filipino benshi. A what? A benshi. A person who comments, narrates and provides the voice or dialogues of the actors of silent films. The benshi is unique to Japanese films. While all silent films at the turn of the 20th century and well into the 1930s used music to accompany the actions on screen, it was only the Japanese who made it a tradition to create the persona who stood at the side of the screen, providing the conversation, articulating on scenes that were not clear as to their meanings, and giving colors to all the possible sounds that could come from the movements on the screen. It happened that the benshi was so popular, audiences came for him instead of the film. Now, how did I become a benshi, and not only that, the very first Filipino benshi? Last year Japan Foundation brought the Japanese film festival for the first time to the city of Naga with Ateneo de Naga as the conduit. On the last day of the festival, Ms. Ami Kurokawa mentioned the possibility of introducing the practice of benshi to the Philippines with a Filipino performing the role. My idea of the benshi was fresh; it was also last year where I was invited by Japan Foundation to interview one of the few existing benshi-masters in Japan. He was Prof. Ichiro Kataoka. The first benshi to perform in the Philippines, Kataoka performed with a Filipino rondalla. While other film industries in other countries had live music to accompany their silent film, the Japanese artist reared in the art of narration perceived the absence of sound as a space to join in and create conversation, comment on the proceedings or make other sounds. Sometime this year, I got a message from Japan Foundation that indeed we are going to have a benshi performance. There were other details: the very first performance of this Filipino benshi will take place in Naga, during the opening of the

second Eigasai or Japanese Film Festival. The event in Naga would be the grand rehearsal before we staged the silent film with a Filipino film sometime in September of 2018 along with other silent films from other countries. And would I be the benshi? The request was a repeat of what Japan Foundation asked me before. If I said yes, I would be the first Filipino benshi. The offer was easy to refuse: I do not have any idea how to be a benshi. Except for that short meeting with Kataoka, I only knew the nature of the benshi from the many books on Japanese cinema. But, I was also thinking of history, or my small place in history. My ego surfaced: I would do it. I would be the benshi, the first Filipino to do it. The film arrived. It was Tokkan Kozo, (A Straightforward Boy), by the master himself, Yasujiro Ozu, the director known to be the most Japanese of all Japanese film directors. Ozu was also known to be a fastidious filmmaker, completing a scene in a day. The works of Ozu are considered part of the golden age of Japanese cinema. It is not common knowledge though that Ozu was a prolific filmmaker during the era of the silent movie. There is a backstory to Tokkan Kozo. The original reels were lost and when they were found, some

parts had been destroyed. This version, which was found in 1988, came in a format meant for homeviewing. The cineastes and Ozu fans were more than happy to see one of the works of the master. Of the many films made during the silent era, only some 8 percent are said to be extant today. In 2015, however, a complete and fully intact 9.5-mm copy was found. We were to perform Tokkan Kozo. The script soon arrived. It was written by Kataoka in Japanese and translated by Japan Foundation Manila. I rushed to contact Noel Volante, the director of the Ateneo de Naga Center for Arts and Culture. I would need a director to run the show. Noel was my student some years back and he was the only director I would trust my life with in Naga. We contacted a band called “Tanikala Tribe.” The copy of the film also arrived and I watched it first, before Noel and I watched it with the musicians. While I was getting the scenery in my mind, the words I was practicing did not seem to come to life. The first rehearsal with the musicians came. There was electricity in the air, as Tanikala Tribe produced their own kind of music. Every day, the music changed and my inflections and reading also changed. Noel started conducting the music, where a theme was created to flow in and out of the music.

The night of the performance came. It was a rainy afternoon. When the lights dimmed in the hall, the LED screen shone arrogantly. The music from Tanikala crept slowly first, with the kubing or Jew harp shrill and then soft, then the guitars, and the percussion. We were off to Japanese la la land. The boy is lured by the kidnapper but the boy proves to be a brat as he asks for toys and more toys. In the park, the kidnapper tries to convince the boy that he is a “nice fella.” The two fight and the boy sulks and cries: I want to go home. The band changed the music and the familiar melody of “Sarung Banggi” wafted in. I also changed gears: Instead of saying, I want to go home, I screamed in a little boy’s voice, “Mauli na ako, mauli na ako.” The audience roared. They were getting the enchantment of silent cinema. One can make any sound, or play any music so long as it makes the film come alive. Toward the end, the kidnapper is shown running away from the boy and his friends all running after him, asking him to play being kidnapped by him, and being given toys and more toys. The music of the Tanikala Tribe was getting louder and louder, as I ended the narration with: “Dyan nagtatapus an istorya kan parakuang aki! [That was the end of the man who kidnaps children!]” And there ended also my first night as the first Filipino benshi. E-mail: titovaliente@yahoo.com.

The sufferings of the poor, suffering of the Church Rev. Fr. Antonio Cecilio T. Pascual

SERVANT LEADER

Y dear brothers and sisters in Christ, as we continue our fight for our faith it is undeniable that our Church community is suffering because of the continuous misery of the poor. Let us not forget what CBCP President and Davao Archbishop Romullo Valles, DD, said, that “our sufferings as church leaders are nothing compared to the sufferings of the poor in our country.” It is true that addictive drugs destroy a person’s life, including his relationship with family and God. However, it is not part of our mission as children of God to put the names of drug dependents in shame and blame them for being the victim of illegal drugs. Addictive drug is a communicable disease in our society and drug addicts are victims of this disease. Let us stop labeling the drug addicts as “non-humans” and stigmatizing them as criminals when their

names end up in the dreaded “drug watch lists,” as they are also suffering in pain. “Yes, we are aware of the sufferings of those who have been victimized by substance abusers, but can we not see them also as sick people who are struggling with a disease?” They are victims of a disease, crying out for help and seeking for God’s mercy and compassion. As Christians and a shepherd of the Lord, it is part of our responsibility

To those in this world who boast of their own wisdom, those who arrogantly regard themselves as wise in their own estimation and the Christian faith as nonsense, those who blaspheme our God as stupid, Saint Paul’s words are to the point: “For the stupidity of God is wiser than human wisdom, and the weakness of God is stronger than human strength.”

to take care of His flock. We might not be the good shepherd, but “are we to remain as bystanders when we hear of people being killed in cold blood by ruthless murderers who dispose of human lives like trash?” Do we ever think that “for every drug suspect killed, there is a widowed wife and there are orphaned children left behind—who could hardly even afford a decent burial for their loved ones?” To those in this world who boast of their own wisdom, those who ar-

rogantly regard themselves as wise in their own estimation and the Christian faith as nonsense, those who blaspheme our God as stupid, Saint Paul’s words are to the point: “For the stupidity of God is wiser than human wisdom, and the weakness of God is stronger than human strength” (1 Cor 1:25). My dear children of God, let us not use our saying in Tagalog—“Ang sakit ng kalingkingan ay ramdam ng buong katawan”—as this is not always true, because “there is no way we can feel each other’s pains when some parts of the body are numbed by sheer indifference.” To know more about Caritas Manila, visit or follow us on Facebook: CaritasManilaInc. For your donations, please call our DonorCare lines 5639311, 564-0205, 0999-7943455, 0905-4285001 and 0929-8343857. Make it a habit to listen to Radio Veritas 846 in the AM band, or through live streaming at w ww.veritas846.ph and follow its Twitter and Instragram accounts @veritasph and YouTube at veritas846.ph. For comments, e-mail veritas846pr@gmail.com.

Trump’s welcome retreat on tariffs and trade wars

RESIDENT Donald J. Trump’s talks on trade with European Commission President JeanClaude Juncker seem to have gone well. Trump agreed for the moment not to escalate the quarrel he started, and the two sides now say they’ll work to lower tariffs and expand trade. While they do, new US tariffs on steel and aluminum will stay in place, along with the measures the European Union applied in retaliation, but the

aim is to resolve this dispute, as well. More action will be needed before it will be safe to conclude that the risk of trade war is receding, and that Trump is beginning to see the benefits of international commerce. But Wednesday’s shift is encouraging. In setting out to dismantle the liberal trading order that the US designed and built after 1945, Trump faced astonishingly little opposition from Congress—even though the

Constitution gives that branch responsibility for trade policy. But US businesses have been complaining loudly. Trump’s tariffs and the countermeasures they provoked wreck the plans of domestic and foreign companies alike, because modern production methods take global interdependence for granted. The shrewdly targeted retaliation of the European Union and other US trade partners has also proved incon-

venient to the president. The administration recently announced that it would set aside billions of dollars to pay subsidies to farmers suffering the effects of higher foreign tariffs. A clearer proof of the absurdity of Trump’s approach would be hard to imagine. He raises border taxes that hurt American consumers and producers—then has to expend additional resources to shield a favored constituency from the blowback. Bloomberg View