Businessmirror july 28, 2016

“We just put the biggest crack in that glass ceiling yet.”—Hillary Clinton, in a live video address to the Democratic National Convention in Philadelphia, after she became the first woman to lead a major American political party toward the White House. AP

media partner of the year

“This was not a convention. This was a four-day Hillary party. And we weren’t welcome. We were treated like lepers.”—Liz Maratea, a New Jersey delegate for Bernie Sanders, protesting inside a media tent after Hillary Clinton won the Democratic Party’s presidential nomination. AP

“To attack a church, to kill a priest, is to profane the republic.”— French President François Hollande, after two followers of the Islamic State group slit the throat of an elderly priest celebrating Mass in Normandy, the extremist group’s first attack against a church in the West. AP

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2015 environmental Media Award leadership award 2008

A broader look at today’s business

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Thursday, July 28, 2016 Vol. 11 No. 292

P25.00 nationwide | 4 sections 28 pages | 7 days a week

CHINA NOT RENEWING CHARTER PERMITS OF PHL CARRIERS

CAB confirms more flight cancellations

By Ma. Stella F. Arnaldo

INSIDE

Special to the BusinessMirror

‘K

sand, sea and wind plus a lot of history

Life

For Your faithfulness and love

D

EAR God, in the morning we rise to praise You, oh God. “Receive our prayer,” as we say, “God hear our prayer.” You give ear to our words: “Accept our prayers of gratitude for Your faithfulness and love.” You heed our prayer: “Support the poor who suffer heavy burdens.” You attend to our cry: “Protect those who are in danger of violence or harm.” May we prefer nothing to the love of Christ, and may He bring us together to everlasting life. May we be inspired always to seek Your guidance. Amen.

GIVE US THIS DAY, COMMITTEE OF DIVINE WORKSHOP, SHARED BY LOUIE M. LACSON, HFL Word&Life Publications • teacherlouie1965@yahoo.com

AWAWANGKAWAWA na kami [We are beyond pitiful]!”

REELING: I COULD SLEEP EVEN AFTER THE LIGHTS (WERE) OUT D2

BusinessMirror

Editor: Gerard S. Ramos • lifestylebusinessmirror@gmail.com

Simplicity is for simpletons

Thursday, July 28, 2016

D1

ANI-COM Park@Harbour ‘Fun’

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Thus was the lament of Jonah Vargas (not her real name), a travel agent based in the Visayas, to the BusinessMirror.

She works for one of the most prolific travel agencies that have been recently hit by millions of pesos worth of cancellations by Chinese tour groups no longer coming to the Philippines.

Continued on A2

17

Teddy Locsin Jr.

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The additional number of canceled charter flights reported by two major carriers

OU are what you read, says a study in the International Journal of Business Administration.

Read deep, think deep; read complicated things, think complicated thoughts. The world is complicated. Read simple stuff; limit your understanding to simple things.

The world is not at all simple.

SHING Mun Reservoir

NO FILTERS NECESSARY

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A REASON we go on vacations is to make unforgettable memories. And our favorite way of making sure we can easily look back on our good times is by immortalizing them in photos. That’s why when you come to Hong Kong (www.DiscoverHongKong. com), get ready to snap away at the amazing sights you’ll be seeing, whether in the city center or the paths you’ve never really thought of taking (but will now). You won’t need any filter for these six most picturesque places.

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ANI-COM PARK@HARBOUR ‘FUN’ THIS newly opened park celebrates the city’s booming animation and comic culture, specifically in Wan Chai, where it’s located. Take selfies with 30 lifesized sculptures of original local ani-com characters that portray unique ways of Hong Kong living. Then explore the rest of the district which offers a perfect blend of new and old streetscapes, as well as Eastern and Western cultures.

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CHURCH of Saint Andrew and Saint Joseph in Bacarra

❷ BANGUI

Windmills

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PAGUDPUD Saud Beach

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THE Spanishera Cape Bojeador Lighthouse

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THE Sphinx-like Kapurpurawan Rock Formation

❻ PAMULINAWEN Hotel

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ANCESTRAL House (Ti Daan nga Balay) at Museo Ilocos Norte

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ONSE Reef Off Road Adventure

STREET ART SIMPLY walking down the streets of Hong Kong is already a treat because of the graffiti-style art covering alleys and walls. Have a stroll down SoHo, where you can feast your eyes and your camera on the most interesting and impactful pieces of street art you can find.

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ILOCOS NORTE

Sand, sea and wind plus a lot of history

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BY BENJAMIN LAYUG

OLY Week was just around the corner, and my son Jandy and I decided to revisit Ilocos Norte. Joining us was good friends Melissa Tinonas and her children Almira and Albert. We left Manila on Holy Monday, leaving on the 3:30 pm Partas bus. The trip took all of 11 hours and we arrived at Pamulinawen Hotel (where we were to stay two nights) in San Nicolas by 2:30 am. This three-star, 11-story hotel, along the National Highway and just a 4-kilometer drive to Laoag City, has 181 wellappointed, fully air-conditioned and spacious rooms and suites, a restaurant, swimming pool, 24-hour front desk and a spacious lobby.

After a short rest and breakfast, we were off to explore Laoag City’s historical center, which consists of the Saint William the Hermit Cathedral (built between 1650 and 1700); the nearby “sinking” bell tower; the Abolition of Tobacco Monopoly Monument (erected in 1882 as a gesture of thanksgiving to King Alfonso XII of Spain for abolishing the hated tobacco monopoly); the Marcos Hall of Justice (where the young Ferdinand Marcos was detained when accused of murder); and the neoclassical-style Provincial Capitol (started in 1918 and inaugurated in 1924).

We also visited the Taoid Museum (focuses on the ancient trade relations that Ilocanos had with the different tribes from the Cordilleras, whose

culture and belief systems share many similarities) and Museo Ilocos Norte (an ethnographic museum opened in December 31, 1999, and housed in the restored former Spanish-era Camarin de Tobacco de la Tabacaler, or tobacco storage house, which was erected in 1878). The next day, we all took a jeepney for the 17-km/25-minute ride to Paoay town proper. From there, we all boarded a tricycle for the 20-minute drive to the sand dunes of Paoay, where we were to try the extreme adventure sport of dune bashing and sandboarding courtesy of Jake A. Texon, operations manager of Onse Reef Off Road & Sandboarding Adventure. Holding on tight to the roll bar of our blue Toyota 4x4 Land Cruiser, we had an adrenaline rush, as we were driven on bumpy routes and very steep 45-degree angle downward slopes, and we soon learned how to move with the vehicle, especially on high deep hills and side-winding curves. It’s literally like riding a wild horse.

After our 4x4 ride, the guides also taught us sandboarding, which is harder than surfing and a little easier than wakeboarding and skiing. All you need here is body balancing on the 10 to 15 meter stretch of sand with the board still on your feet.

On our last day, we joined a free tour of the northern part of the province, onboard an airconditioned bus, sponsored by the provincial government. Our first stop was the Church of Saint Andrew the Apostle in Bacarra, a National Historical

SHING MUN RESERVOIR SKYSCANNER.COM calls this place a paradise for photography junkies. One of the most popular places for leisurely strolls, and just a few minutes’ away from a busy area in Kowloon is the deep forested valley of Shing Mun Reservoir. Tree-lined walkways and gurgling streams present the perfect backdrop for bird watching, or catching a glimpse of the area’s resident monkeys.

Landmark and a National Cultural Treasure known for its centuries-old, domeless, leaning bell tower.

From Bacarra, we next traveled 33 km (40 minutes) to the century-old (first lit on March 30, 1892) Cape Bojeador Lighthouse in Burgos, the most accessible of all the lighthouses in Luzon and the highest elevated, still original and active Spanish-era lighthouse in the country. Here, we had a good view of the rough and rocky Cape Bojeador coastline and the whitecaps of the West Philippine Sea and checked out its museum, inaugurated in November 21, 2015.

After lunch at Johnfel Restaurant in Bangui (where we already espied the gorgeous fans of its windmills), we proceeded 16 km to Pagudpud, where we were given an hour to enjoy the delightful waters of the touristy Saud White Beach, reputed to have the longest, continuous white-sand beach in the country. After the short swim and merienda, we returned to Bangui, this time to view the windmills up close. The first “Wind Farm” in the Philippines and considered to be the biggest in Southeast Asia, its site is a graceful arc reflecting the 9-km long and 100-meter wide shoreline of Bangui Bay, creates a fusion of technological and natural elegance.

Our last destination was the amazing, unique and Sphinx-like Kapurpurawan Rock Formation in Burgos, formed from sandstone naturally carved by weathering from wind, sand and water to create its surreal shape. ■

LONG KE WAN ARGUABLY the best beach in Hong Kong, Skyscanner. com recommends Long Ke Wan in east Sai Kung as it lures in visitors with its long stretches of white sand and crystal-clear waters. Designated as an official campsite by the government, and surrounded by a cape and two hills, the beach has been likened to the Maldives by travelers who have visited it.

HIGH ISLAND RESERVOIR EAST DAM THE biggest reservoir in the city, and one of its most popular geological sites, the East Dam boasts of amazing, millions-of-years-old rock formations, including the famous hexagonal volcanic columns that can be observed at close range from its trails.

The scenery is surreal, with waves from the South China Sea crashing onto huge rocks along the coast.

No wonder Skyscanner.com lists it as one of the best unexpected photography spots around Hong Kong.

Life

HONG KONG GEOPARK HONG Kong is not just purely the urban jungle it seems to be. There are many natural landscapes for adventure-seekers to explore and which preserve the unique landforms of Hong Kong. One of the most inspiring corners of the territory is the Hong Kong Geopark, formed millions of years ago by volcanic eruptions. Take a boat ride for a picture-perfect view that winds through rock caves and beaches. Foodies will also enjoy a Geo Gourmet feast in any of the restaurants surrounding Sai Kung town.

free fire

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Continued on A11

TPP DRAWS FURY AT G.O.P., DEMOCRATIC CONVENTIONS

health&Fitness

It’ll take a long time Sports

Duterte’s tax-cut plan to bolster Pinoys’ ‘home-buying’ capacity

AUGUST 5, 2016

BusinessMirror

8 days

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| Thursday, July 28, 2016 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph

CAN’T TOUCH JUSTIN

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IT’LL TAKE A LONG TIME The hurt and disappointment wasn’t because Phil Mickelson missed out on either his sixth major or his first win since the 2013 British Open. It was the first time the 46-year-old Mickelson played his best, and it wasn’t good enough.

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By Tom Canavan The Associated Press

PRINGFIELD, New Jersey—If you thought two weeks was enough time for Phil Mickelson to get over his second-place finish in the British Open duel with Henrik Stenson, guess again.

Lefty said it’s going to take a long time to get over the British Open, probably longer than any of his other excruciating losses in a major.

The hurt and disappointment wasn’t because Mickelson missed out on either his sixth major or his first win since the 2013 British Open. This was the first time the 46-year-old Mickelson played his best, and it wasn’t good enough.

The 40-year-old Stenson won his first major with a record-shattering 20-under total. Mickelson’s 267 final total would have won every previous British Open except in 1993, when Greg Norman shot 267 at Royal Saint George’s.

“I think it’s one of those things where I’ll look back over time and my disappointment will probably increase,

because I think it’s the first time in my career that I have played to that level of golf and not had it be enough to win a tournament,” Mickelson said at a practice to prepare for the Professional Golfers’ Association (PGA) Championship at Baltusrol Golf Club. “That’s a disappointing thing, because I would have loved to have added another claret jug.”

Jordan Spieth, who played a practice round with Michelson on Tuesday, walked over to his playing partner on Tuesday and told him it was fun to watch him, and that he was unlucky not to win.

“And that’s when he said, ‘Hey, I’ve been on that side of things [lately], Masters in ‘15, and Troon even more so two weeks ago,” Spieth said. “But then, he’s seen himself on the other side of things where no one is running away with it and he wins in a close battle or he wins by a lot, whether it’s in a

PHIL MICKELSON says it’s going to take a long time to get over the British Open, probably longer than any of his other excruciating losses in a major. AP

major or regular tour event.”

Mickelson believes he will win again. He feels his game is improving, his swing is back and he likes the course. He validated his first major—the 2004 Masters—by capturing the 2005 PGA here with a 72nd hole birdie.

His goal this week is to play, as well as he did at Troon.

“I don’t believe that there is a small window,” Mickelson said of winning again.

“I think there’s a really big window of opportunity to add to my résumé, to continue to compete in big events, for the simple reason that the feel and sensitivity of hitting shots; the ability to play golf courses a certain way, to visualize, to make birdies, to pull shots off, that has not diminished.”

Mickelson said the key at Baltusrol is to drive the ball straight and putt well on greens that have a lot of contours.

“There’s a lot of little rolls and knolls,” said Mickelson, noting the greens are going to roll a lot faster than Troon. “You can see multiple lines and only one of them is correct, and it’s sometimes hard to see.”

What many people would like to see would be another Mickelson-Stenson showdown.

Stenson said he has not had a chance to talk with Mickelson since the British Open.

“It’s one of those things, it doesn’t really strike you when you’re in the middle of it,” Stenson said “But afterward, with the 63 and the 20 under and the way we played, we pushed each other to the limit, both of us, for 36 holes more or less, and trading punches and blows all the way around the golf course for two days. That certainly is what made us play so well. We both wanted it badly and we performed so well because of each other.”

JORDAN SPIETH (right) and Rory McIlroy better get their act together. AP

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PRINGFIELD, New Jersey—Rory McIlroy took stock of his game and the shots required at Baltusrol and reached a most logical conclusion on Tuesday. He believes the Professional Golfers’ Association (PGA) Championship will be his best chance this year to win a major.

He overlooked the obvious. It now is his only chance this year to win a major.

McIlroy is not alone.

Except for the three players who have achieved the ultimate in golf this year by winning majors—Danny Willett at the Masters, Dustin Johnson at the US Open and Henrik Stenson at the British Open—the PGA Championship is all they have left.

The focus starts with McIlroy, Jordan Spieth and Jason Day. They began the year as the

LAST CHANCE AT BALTUSROL

modern version of the “Big Three” because they had captured five of the previous six majors and took turns at No. 1 in the world ranking.

But they have come up empty in the majors—so far.

Spieth is feeling it as much as anyone, mai nly because he nearly won them all a year ago with a major performance that ranked among the best ever. So when a question was posed to him on Tuesday that expecting 20 more years like that would probably be a tough benchmark, Spieth leaned toward the microphone and interrupted.

“Probably?” he said.

Even with two victories and a chance at the Masters that he threw away with one bad swing at the wrong time, he has been noticeable in the last two majors by his absence

from the leaderboard. Spieth, who turns 23 on Wednesday, had contended in five straight majors. He finished 13 shots behind in the US Open and 22 shots behind at the British Open.

“I set my own expectations so high,” Spieth said. “So have I met them this year? Not yet.”

He still can.

So can Day, a three-time winner on the PGA Tour this year. Stenson’s victory at Royal Troon surely gave hope to players who have yet to win a major, from Sergio Garcia to Lee Westwood, from Rickie Fowler to Matt Kuchar.

Baltusrol was soaked with nearly 2 inches of rain overnight, though the Lower Course was in remarkably good shape for a full day of practice on Tuesday in sweltering conditions that only add to the pressure of players trying to break through.

McIlroy was especially optimistic, given the length of Baltusrol, exceptionally long (7,462 yards) for a par 70 that doesn’t have a par 5 until the final two holes. He is among the top power players in the game, and his driving is aesthetically beautiful because of his balance.

That wasn’t lost on McIlroy as he blasted a 345-yard drive off the first tee in the Long Drive Competition and made his way around the course. He looks ready to go, and he will find out on Thursday what kind of traction he has.

McIlroy was asked to describe his season in one word, and after some thought, settled on “neutral.”

That’s another way of saying he has been spinning his wheels.

“I feel there’s been times where I got a little bit of momentum, and then sort of got set back a

little bit,” he said. “It’s been a little stop-start in a way. But it’s hard. I’m trying to stay as positive as I can. I feel like I am positive because my game is in good shape. But I guess just maybe running out of patience a little bit and trying to make it happen.

“I don’t know if there’s one word to describe this year,” he said. “But I think you get a sense of how I’ve felt about the year and trying to get better and trying to get my name in the mix and, hopefully, I can do that this week.”

His record in the PGA Championship is in his favor. McIlroy has won the Wanamaker Trophy twice in the last four years, and he has three other finishes in the top 10. Even though he grew up in Northern Ireland, the American brand of golf suits him best. Baltusrol is big, and likely will be soft with the overnight rain, the steamy heat and the threat of thunderstorms. AP

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President Duterte looks, as US Secretary of State John F. Kerry gestures during his visit at Malacañang on Wednesday. AP/Bullit Marquez

ENO, Nevada—A California man was arrested for disorderly conduct after Justin Timberlake said he got too physical with him last weekend during the American Century Celebrity Golf Championship at Lake Tahoe, sheriff’s officials said on Tuesday.

Keith Weglin, 29, of Sacramento, California, was booked into the county jail for the misdemeanor on Saturday afternoon, posted $640 bail and was released late that night, Douglas County Undersheriff Paul Howell said.

TMZ first reported on a video showing someone’s hand slapping or touching Timberlake on the back of his neck as the singer walked through the gallery between holes during secondround play at Edgewood Tahoe Golf Course in Stateline about 60 miles south of Reno.

Timberlake could be heard saying, “Bro, why would you do that?”

Howell told The Associated Press (AP) Weglin was arrested for his conduct as deputies were escorting him from the course “after the ‘touching’ of Timberlake.”

“It is not related to the contact he made with him,” he said in an e-mail to AP. Timberlake’s representatives did not immediately respond to a request for comment on Tuesday.

Weglin did not immediately respond to a telephone call seeking comment. It was not immediately clear if he had a lawyer.

Howell said later on Tuesday that he considered it “a very minor event” but that he was issuing a news release “due to an undue amount of inquiries.”

Weglin allegedly was intoxicated when he “inappropriately touched” Timberlake’s face, Howell said in the statement.

“Mr. Timberlake declined to press charges and officers directed the fan to leave the premises,” he said, adding that Weglin “became disorderly and argumentative, and was subsequently arrested for

Search for perfection doesn’t end with major

By Roderick L. Abad

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PRINGFIELD, New Jersey—Henrik Stenson was baking in the hot sun of Baltusrol, chipping out of the thick grass in the short-game area until the bag of golf balls was nearly empty. One chip dropped into the cup on its last turn.

“I would have thought that’s the perfect way to end,” caddie Gareth Lord said to him.

Stenson looked over at him with those ice blue eyes, finally cracking the slightest smile, and then he reached over for a fresh bag of balls.

Nine days later, nothing has changed.

The only difference now from when he last competed at a major is that Stenson’s name is on the oldest trophy in golf, and he gets to keep that silver claret jug until he returns it at the British Open next July.

He is a major champion, fulfilling a boyhood dream. Asked the first drink he poured from the jug, Stenson replied, “It was champagne...and it was champagne...and it was champagne.” He knows how to celebrate.

On the golf course, he knows only hard work.

That doesn’t stop.

“I think golf is a game you’re never going to be finished,” Stenson said. “You’re never going to get to the point where you’re maxed out in your ability and how you’re playing, so there’s always that strive to become better. I got a little perfectionist in there that’s always been pushing me forward, and that can both make me and break me at times, when you’re striving to be your best.”

“But no,” he added, “I don’t think I’m going to sit back and just say, ‘OK, that was it. I’m finished.’ If I look at my career, to win a major championship, that was pretty much the only thing I had not managed to achieve, and now I have that. But then, at the same time, you can look ahead and try and win another one.”

The trap facing the 40-year-old Swede is his age.

Eight other players did not win their first major until 40 or older, and only two of them won another major. Mark O’Meara won the 1998 Masters at 41, and he added the British Open that summer at Royal Birkdale. The other was Old Tom Morris, who won all four of his British Opens in his 40s back in the 1860s.

Stenson is a different breed.

This is the guy who won the Deutsche Bank Championship in 2013, and two weeks later was so frustrated during a rain-delayed finish at the BMW Championship that he snapped off the head of his driver and then smashed up a locker at Conway Farms.

The following week at the Tour Championship, he was asked how he could be on top of the world in Boston and lose his mind in Chicago in the span of two weeks.

“You don’t have much experience with Swedes, do you?” he said.

He has a wicked temper and a dry sense of humor, and both can show up without warning. Through it all, there is an endless search to get better.

Stenson had to endure two significant slumps in his career, the first one that led him to swing Coach Pete Cowen. He doesn’t think this is anything special because other players over a course of two decades are certain to go through bad times. AP

spOrts

Contributor

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RESIDENT Duterte’s pronouncement on the lowering of personal- and corporate- income taxes in his first State of the Nation Address on Monday was welcomed by the

PESO exchange rates n US 47.1930

real-estate industry, saying that a tax cut will boost consumers’ purchasing power that will eventually boost property demand.

“I think, this will be a positive development for the property sector, in general, especially in the residential sector, because then the middle-income families, for

example, will have more disposable income to invest in residential projects. So, it will be good for the sector if that happens, and that may even fuel further growth in the sector,” Jones Lang LaSalle Philippines Inc. Research Head Claro Cordero Jr. told the BusinessMirror.

See “Tax-cut,” A2

t’s 30 chapters long and almost nobody has read it, but the TransPacific Partnership (TPP) trade deal is the unlikely villain at both political conventions.

In Philadelphia this week, opponents interrupted Democratic National Convention speakers with chants of “No TPP,” and expressed relief that Bernie Sanders and Hillary Clinton opposed it. At the GOP convention last week in Cleveland, Donald Trump lambasted trade deals like TPP, and said they’d “strip our country of its jobs and wealth.”

Even Virginia Sen. Tim Kaine, Clinton’s newly minted running mate, came out against TPP the day after joining the ticket, despite having praised parts of it days earlier.

Especially striking for Democrats is

that President Barack Obama, beloved in the Democratic Party, is the deal’s chief advocate. Obama has worked tirelessly negotiating and then advocating for the agreement.

Yet, while Obama is expected to get a rock-star reception at his convention speech on Wednesday, that love-fest won’t extend to trade, where he’s now at odds with Clinton, Kaine, Sanders and top congressional Democrats.

Ironically, Obama’s strongest TPP support comes from congressional Republicans, who joined with fewer Democrats last year to pass legislation expanding Obama’s negotiating authority. Now completed, the deal awaits ratification, and the White House has said it’s confident it can maintain the support it got last year.

n japan 0.4510 n UK 61.9927 n HK 6.0843 n CHINA 7.0704 n singapore 34.7493 n australia 35.3948 n EU 51.8604 n SAUDI arabia 12.5848

See “TPP,” A2

Source: BSP (27 July 2016 )

A2 Thursday, July 28, 2016

BMReports BusinessMirror

www.businessmirror.com.ph

CAB confirms more flight cancellations Continued from A1

She said she recently received a cancellation of Chinese tour groups from Wenzhou (Zhejiang province) and Chengdu (Sichuan province), for a total of 438 guests. These guests, mostly groups of families, were supposed to go to Cebu and Bohol for six days. She estimates total losses for her travel agency at P13 million.

The cancellations were attributed to nonrenewal of charter permits of Philippine carriers, ostensibly as a reaction to the July 12 ruling of the Permanent Court of Arbitration (PCA) at The Hague repudiating the historical claims of China over islands and atolls in the South China Sea. See “Searuling driving Chinese tourists away,” in the BusinessMirror, July 22, 2016.

The Civil Aeronautics Board (CAB) on Wednesday reported 17 more canceled charter flights, based on notices filed by “two major carriers.”

Lawyer Wyrlou E. Samodio, head of CAB Legal Affairs told the BusinessMirror that the canceled

Tax-cut. . .

Continued from A1

Recent broadcast media reports, however, said simplifying income-tax brackets is expected to take place before the immediate passage of a measure lowering income taxes.

House Deputy Speaker Rep. Romero S. Quimbo of Marikina City, who filed House Bill 20 in the 16th Congress, will propose anew to lower income taxes by adjusting the individual income-tax brackets to inflation and lessen the burden of over 6 million workers in the country.

In his proposal, the current 32-percent tax imposed to those who earn more than P500,000 a year will be downgraded to the 25-percent tax bracket, and those subjected to a 25-percent tax will be under the 15-percent tax category. Only those who have an annual income of over P1.28 million will be taxed 32 percent.

The President’s plan to lower personal and corporate taxes to 25 percent, on the other hand, is included in the Comprehensive Tax Reform Bill.

Per the Department of Budget and Management (DBM), the government plans to expand the coverage of the existing value-added tax, increase taxes on oil and impose tax for soft drinks and

charter flights cover July and August 2016, with the routes between several points in China and Cebu, and between several points in China and Kalibo. On top of the earlier cancellations already reported, the total number of charter flights cancellations by Chinese tour groups are now 19. See “Chinese charterflight cancellations continue,” in the BusinessMirror July 23, 2016.

Samodio, however, said the carriers are still not treating the cancellations as a major problem and have not asked the CAB to intervene on the matter. Computed at about 194-passenger capacity for an Airbus A321 plane, the number of Chinese tourists who have foregone their trips to Cebu and Kalibo are about 3,500.

The CAB declined to identify the major carriers due to privacy issues.

If the cancellations from China keep up, Tourism Promotions Board (TPB) COO Domingo Ramon Enerio III admitted it may be difficult for the agency to hit its target Chinese visitor arrivals of 632,947 this year. “It will be tough,” he said,

as more cancellations are being reported by hotels, travel agencies and local carriers. The TPB is the marketing arm of the Department of Tourism (DOT).

TPB’s target for Chinese visitor arrivals in 2017 is 729,715. In 2015 arrivals from China grew by 24.3 percent to 490,841. It has been the fastest-growing market for the Philippines and now ranks fourth among the top sources of tourists for the country.

Officially, however, DOT executives continue to say they have not yet received any reports of cancellations by Chinese tourists.

In a text message, Tourism Assistant Secretary Roland Canizal said, “We are in the process of verifying reports, but, so far, our people in the ground are saying it is business as usual. Nevertheless, we are closely monitoring the situation to be proactive in case anything arises.”

While the DOT and the CAB are still seeking to downplay the magnitude of the problem, local travel agencies and those in the accommodations sector are clearly in pain.

In a post on the Facebook page

Boracay Beach Community, Max Kuijkhoven of the Ambassador in Paradise Resort, said, “We have seen a significant amount of cancellations after the July [ruling] regarding the South China Sea. [It] cost us millions [of pesos in losses].” The 60-room Ambassador in Paradise is a five-star hotel on Boracay Island’s upscale Station 1. Boracay is famous around the world for the powdery white sand of its long beach.

For her part, Vargas, who requested for anonymity as she was not authorized to speak for her travel agency, said, “We’ve asked the DOT to make representations on our behalf with the hotels, to just offset these cancellations [with future bookings], and not to charge us catncellation fees. Kawawang-kawawa na kami [because of these Chinese cancellations].” She also asked that her travel agency not to be identified.

The travel agent also stressed that Chinese tourists “love coming to the Philippines. They are always surprised that Filipinos are so friendly, they get good hotels and good service from the staff.

But they get disappointed because

the government-to-government relations [between China and the Philippines] always gets in the way.”

In an earlier report, tourism industry sources said a preliminary list of hotels affected by the Chinese cancellations included Crown Regency, Montebello Villa Hotel, BE Mactan and Shangri-La Mactan—all in Cebu—as well as BE Grand Panglao, Panglao Nature Island Resort, Henann Resort Alona Beach, Bluewater Panglao Beach Resort, Flushing Meadows Resort in Panglao and Bellevue Hotel all in Bohol. Also the Henann Group said the recent rash of Chinese cancellations affected all their Boracay properties.

Meanwhile, a tourism industry source based in China, said many Chinese tourists have complained of Cebu Pacific’s charter services.

“Cebu Pacific’s chartered flights from small-tier cities like Hangzhou, have been canceled several times. A lot of Chinese people have complained about this, because they are always waiting, and they had limited time.”

The source added: “Some flights

sweetened beverages to offset the individual and corporate-tax cut.

The agency is optimistic that the taxreform package will be ready in September prior to its enactment next year.

The tax-cut plan of the new administration is timely as developers hold off the unveiling of their projects to address supply overhang, Cordero also said.

The JLL executive said the residential market in the first half of 2016 exhibited more or less the same trend in terms of new supply, completions and launches, as well as the growth in selling prices and rental rates.

“We have observed that the licensesto-sell [LTS] issuances and residential development launches in Metro Manila have been declining for the past few years, as supply pressures have been most severe in the last three years,” the executive noted.

The LTS issued by the Housing and Land Use Regulatory Board have already dropped by as much as 52 percent from its peak levels in 2012.

Moreover, the number of new project launches in 2015 is also down 69 percent from its peak levels in 2013, indicating that the decision of the developers to build has been affected.

This year is no exception, Cordero pointed out, as the first half of 2016 fig-

ure had only reached 38 percent of that of 2015.

“We’re already [in the middle of ] the year and, yet, we don’t see the level of new supply launches from the developers to top the 2015 level,” he said. “But in the next few years, we’re expecting these figures to actually go up [with Duterte’s tax-cut plan],” he said.

“By the end of 2016, we expect SMDC to remain as the top producer of highend and mid-end residential condo developments,” Cordero said.

Premium residential typically refers to units with total tag price of above P10 million. Midlevel housing, on the other hand, is priced from P1.5 million to P10 million. The latter segment accounts for about 90 percent of the housing projects to date.

The top 3 developers—SMDC, Megaworld and DMCI—in 2016 partake for almost 44 percent of the entire market.

“But Ayala Land Inc. in 2021 will displace DMCI [at] the third spot, and together with SMDC and Megaworld, we expect them to corner around 45 percent of the market,” he said.

Future supply levels, however, is projected to exert some downward pressures from the growth rate of prices moving forward.

Despite the downtrend, Cordero cited the launch of the Residential Real Estate Price Index (RREPI) of the Bangko Sentral ng Pilipinas (BSP) as the “exciting news that happened in the second quarter of 2016.”

Based on the BSP’s findings, the RREPI rose by 9.25 percent year-on-year (YOY) from January to March.

Commencing in the third quarter of 2015—the time when the BSP actually tracked the index—YOY growth of realproperty prices in areas outside of Metro Manila, or National Capital Region, grew at a quicker pace due to the higher growth rate in prices of townhouses and condominium units.

“The reason they grew faster than the residential condo prices in Metro Manila is because they started from a low base,” Cordero said.

While capital values and rents expand in the short term, JLL expects yields in the residential sector to take a similar compression standard or further net tightening in property yields.

Mainly, this could be attributed to the constant downward trend in the inflation and cost of fund in the market.

This is further supported by the move of the BSP to shift to an interest-rates corridor system using the reversed repurchase rate downward.

The research head of JLL stressed that the adjustment in policy rate is neutral and does not represent a change in the BSP’s stance on monetary policy.

“But then, analysts are forecasting a rising policy rate, but the BSP is trying to project a similar or steady trend in its policy rate. So we don’t expect some disturbance in the cost of funds, and then we expect the inflation to remain low,” he said. The regulatory controls implemented by the BSP in the past have had some effects on the part of the lending institutions.

In the latest Senior Bank Loan Officers’ Survey released in the second quarter of this year, more banks have actually tightened their credit standards during the period because lower tolerance to risk and perceived tightened credit standards.

Amid the net tightening in loans by the lending institutions or banks, strong demand for residential developments has continued, as shown in the consistent growth of demand for housing loans.

Concentration of supply in CBDs

IN Metro Manila existing supply, which now stands at about 246,400 units, is still concentrated within established central business districts (CBDs), such as Makati, Ortigas and Bonifacio Global City in Taguig.

“So the story will not actually differ a lot in 2021, or five years from now, as early as today, we are estimating a marginal growth from the share of the CBDs in first half of 2016 to about 51 percent of total future supply by 2021,” he said.

As of the first six months of this year, future inventory stands at 373,700 units.

Following the performance of various industry players, JLL reported that Megaworld was at the top spot in 2013 and 2014, but not until SM Development Corp. (SMDC) was able to snatch the No. 1 position last year.

Property cost, value on the rise

SELLING prices and rental rates of residential projects in Metro Manila are, likewise, expected to trend upward by market type, according to JLL. Capital values of high-end residential developments grew the fastest at 10 percent each year from 2010 to 2015.

Lease fees in midrange projects increased by 8 percent annually from the same six-year period.

Residential growth drivers

IN general, the demand for housing is still being fueled and supported by the growth in remittances coming from overseas Filipinos workers (OFWs), and the projection of growth in the business-process outsourcing (BPO) industry.

For this year, the number of full-time employees in the BPO sector is projected to reach 1.3 million, and the OFWs’ remittances will grow to $27.5 billion.

“So in the next two years, these two drivers of growth will be the sectors to watch out for in terms of growth of residential demand,” Cordero said.

do not arrive on time, sometimes it does not even arrive. I think Cebu Pacific should cancel a few of their trips because we all know that they do not have enough aircraft. The chartered plane should arrive, no matter what, but the reason they sometimes give is that the plane has not yet taken off from another destination. Can you say that is a chartered flight? But these are the excuses the airport personnel from Cebu Pacific are always saying. There have been many complaints against them, but no one from the airline talks to the clients—they are usually trainees and/or a manager who does not even know how to handle such complaints.”

The tourism industry veteran, who declined to be named, noted that “too bad…these charter flights were always full,” coming from cities in China with small airports, “going directly to Palawan, Boracay, Cebu and Bohol.”

Despite repeated requests, Cebu Pacific has refused to issue any statements regarding its charter operations in China.

TPP. . .

Continued from A1

Even many die-hard opponents acknowledge they’re unfamiliar with the deal’s ins and outs. Sticking points have centered on wonky policy issues, like “data localization,” intellectual property and market access—a far cry from hot-button topics, like gun control, abortion and taxes, that typically drive presidential campaigns.

So, why is TPP resonating? Opponents on both sides have made it a proxy for the powerful fear that American workers are being left behind—albeit in different ways. Where Trump talks about putting “America first” and outmaneuvering other countries, Sanders and Clinton focus on workers’ rights and fighting corporate influence. “ The agreement is incredibly difficult to understand, but the issues it brings up are the exact bread-and-butter issues that matter to voters,” said Julian Zelizer, a Princeton University presidential historian.“What people do know is they’re struggling to find the kind of security that their parents or grandparents had.”

On Tuesday the Trump campaign questioned whether Clinton and Kaine would be tough enough on trade, including the North American Trade Agreement (Nafta) signed into law by President Bill Clinton in 1993. Trump has proposed revoking Nafta.

“They will approve TPP, protect Nafta, enable China and destroy the US middle class—causing the most harm to Latino and African-American workers,” Trump policy adviser Stephen Miller said.

Americans are divided over whether free-trade deals are good or bad, but in an April AP-GfK poll, 43 percent called the issue very or extremely important.

Even more revealing: 46 percent said trade deals would decrease jobs available to Americans; only 11 percent said they would increase them.

Obama, meanwhile, has argued major trade deals are always politically difficult, adding that both sides are missing the point: globalization is here to stay. So what is TPP? It’s an ambitious trade pact involving 12 countries on both sides of the Pacific Ocean, including the US, Mexico, Japan, Vietnam and Australia.

The deal forms a cornerstone of Obama’s attempt to increase US influence in Asia as a counterweight to China.

The deal would eliminate trade barriers and tariffs, streamline standards and encourage investment between the countries, which make up nearly 40 percent of the world’s economic output.

Obama and TPP supporters argue it strengthens labor standards with m i n i m u m - w a g e p ro t e c t i o n s a n d child-labor prohibitions. But critics say it undercuts American workers by introducing lower-wage competition and gives huge corporations too much leeway. In Philadelphia disdain for the deal has been palpable—and a rare point of unity between Clinton and Sanders supporters. AP

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PHL-China talks must abide by PCA ruling Solid growth in ofw dollar remittances seen in 2017

$10.86B

The total overseas Filipino worker remittances in January to May, up 2.9 percent

By Bianca Cuaresma @BcuaresmaBM

D

espite the shaky growth of remittances in the past few months, a Moody’s Analytics economist remains confident that dollar inflows from overseas Filipino workers (OFWs) will return to a more solid growth rate next year.

Moody’s Analytics economist Jack Chambers told the BusinessMirror the likely cause of weaker remittance growth in recent months is coming from external factors.

Cash remittances by OFWs saw a 1.9-percent growth in May—to $2.188 billion against the same month’s inflow of $2.126 billion last year.

This is one of the slowest monthly growth rate for the country’s dollar remittances, second only to the 1.2-percent contraction in March.

This puts the growth of remittances in the first five months of the year at 2.9 percent to $10.86 billion. The government’s growth projection for OFW remittances this year is about 4 percent.

“We’re not overly concerned about the recent weakness in remittances. The likely cause of this is the weakness in the global economy generally and, more specifically, the negative effect of lower oil prices on oil exploration and extractionrelated job opportunities for Filipinos working abroad,” Chambers told the BusinessMirror.

The Moody’s Analytics economist said he is confident of better growth rate in OFW remittances as he expects Filipino migrants to send more money home next year, when the global economy improves.

“Obviously, there is little that the Philippines can do about these external factors. But we expect improvements in the global economy from early 2017 and for oil prices to increase moderately throughout the rest of 2016.

These factors should boost remittance flows,” he said.

Earlier, the Bangko Sentral ng Pilipinas (BSP) partly blamed the international banks’ derisking practices as a contributing factor to the lower growth of remittances.

In a recent interview, BSP Deputy Governor Diwa C. Guinigundo told reporters the central bank is still monitoring the “derisking” practices of banks—or the international banks’ new set of policies aimed at restricting or terminating certain operations to lessen their exposure to risks.

“It is not really a cause of ‘worry.’

It is a concern. It’s something that we should continue to monitor because a large part of our external payments position is dependent on the level of remittances,” Guinigundo said.

“It’s good that we have the BPO [business-process outsourcing] sector, which serves as a counterweight to remittances. The sector is growing by at least 15 percent to 20 percent. With its growing pace—a 15 percent to 20 percent is significant—it somehow mitigates the apparent slowdown in overseas remittances,” he added.

P

By David Cagahastian @ davecaga & Recto Mercene @rectomercene

resident Duterte has assured the United States that any future bilateral talks with China regarding joint exploration and exploitation of resources in the disputed areas in the West Philippine Sea will take into account the favorable verdict issued by the United Nations’ Permanent Court of Arbitration (PCA) on the territorial dispute.

Presidential Spokesman Ernesto C. Abella said Mr. Duterte told US Secretary of State John Kerry on Wednesday that the PCA ruling will be the foundation of the bilateral negotiations, even amidst China’s insistence for the Philippines to set aside the PCA ruling as a precondition for starting bilateral talks.

Abella said China’s precondition for starting the bilateral talks will not result in a deadlock, and the “conversation will continue to proceed” as the Philippines will assert the enforceability of the PCA ruling against China.

“The President said the talks will start with the PCA ruling.

The ruling will be the foundation,” Abella said in a press conference.

Kerry visited Mr. Duterte in Malacañang for a working lunch as part of his tour in Asia to reinforce US foreign policy in the region.

Abella said there were no talks regarding the use of the Enhanced Defense Cooperation Agreement in trying to enlist the US support to enforce the PCA ruling, and reiterated that the two international issues are not related whatsoever.

The US has ruled out a military solution to enforce the PCA decision and compel China to comply with the ruling.

The PCA promulgated on July 12 its verdict on the arbitration case filed by the Philippines and ruled that none of the features claimed by China could be considered as islands from which an exclusive economic zone can be reckoned, thus invalidating China’s “nine-dash” line that claims historic rights over most of the South China Sea.

The Philippines will come up with an official statement regarding its interpretation of the PCA ruling after a thorough study of the decision and consultations with top officials of the different branches of government.

Also on Wednesday, President Duterte convened the National Security Council composed of Cabinet members, leaders of Cong res s a nd for me r presi dents to discuss the implications of the PCA ruling to the Philippines’s interests in the South China Sea. “There will be a review of how we stand, then a summation,” Abella said.

Meanwhile, Kerr y said the Philippines should not be looking for confrontation but a solution to move forward with the discussion in the South China Sea, while Foreign Affairs Secretary Perfecto R. Yasay Jr. said the country must not gloat over our victory, “although we are happy beyond expectations,” and called for sober restraint and without provocative statements that will only further heighten tension.

Kerry and Yasay made their statements during a televised press conference at the Departmant of Foreign Affairs (Dfa) on Wednesday.

Kerry, who arrived at the Ninoy Aquino International Airport on Tuesday night from a meeting

Visiting US Secretary of State John Kerry gestures to his Philippine counterpart Perfecto Yasay Jr., during their joint news conference at the Department of Foreign Affairs on Wednesday in Pasay City. Kerry is the highest US official to visit the country since the inauguration of President Duterte. AP/Bullit Marquez

of the Association of Southeast Asian Nations (Asean), urged the Philippines and China to “turn the page” on past confrontations and “look ahead” to opportunities for solving the dispute over the South China Sea peacefully.

K er r y a sked ever ybody to read the communiqué issued by Asean, saying he was very satisfied with it. “That communique clearly reference all legal rights, decisions and legal process w ithout mentioning the arbitration,” he said.

“A nd somet i mes, f r a n k ly, meeting like that in diplomacy you don’t always have to include every single word that may, in fact, sometimes make it harder to get to the dialogue that you want to get to,” he said.

“But every single principle, every single value of rule of law was embraced in the communiqué,” Kerry added, saying, “The communiqué said clearly that everybody supported the process, the rule of law, and everybody thought that there must be a reduction of tension, and that the people needed to abide by what legal requirement those were under the law and they have to be resolved by rule of law.”

The President said the talks will start with the PCA ruling.

The ruling will be the foundation.”

—Abella

Court of Appeals sides with DOTC on procurement of LRVs for MRT 3

By Joel R. San Juan

T

@jrsanjuan1573

HE Court of Appeals (CA) has affirmed the order issued by the Regional Trial Court (RTC) in Makati City dismissing the petition for injunction filed by MRT Holdings II Inc. (MRTH), which seeks to enjoin the former Department of Transportation and Communications (DOTC) from procuring 48 new light-rail vehicles (LRVs) for Metro Rail Transit (MRT) 3 from another supplier amounting to P3.76 billion.

In a 16-page decision penned by Associate Justice Maria Elisa Sempio Diy, the CA’s Twelfth Division held that petitioners Metro Rail Transit Corp. (MRTC) and MRTH failed to prove that they would suffer “grave injustice and irreparable injury” if the DOTC is not prevented from acquiring additional LRVs from Dalian Locomotive and Rolling Stock of China.

The private firms sought for an injunction as an interim measure to protect their interests while an arbitration is ongoing between them and the DOTC for allegedly violating the 1997 buildlease-transfer agreement to construct and maintain a light-rail transit system for Edsa, or the MRT 3.

The arbitration is set to thresh out

the conflict on whether MRT’s private owners can still invoke their right of first refusal to prevent the government from entering into a third-part supply contract with Dalian.

The petitioners earlier argued that the loss of MRTC’s right of first refusal, which carries with it the preferential right to supply the LRVs, would result in irreparable injury if the procurement is not enjoined.

The DOTC’s procurement of LRVs from Dalian, according to the petitioners, is in contrast to the principle of having a single point of responsibility, which covers the construction, operation and maintenance of MRT 3.

The petitioners also warned that if the new LRVs are allowed to run without the necessary adjustment and upgrade to the system, the riding public would be exposed to high risks of train collisions and loss of lives.

But the CA held that MRTC’s arguments are merely “self-serving and uncorroborated” by independent witnesses.

“Thus, MRTC’s assertion that the procurement of additional LRVs by the DOTC constitutes irreparable injury and not compensable by damages is highly speculative and conjectural. Au contraire

He said he made it clear that the decision itself is a binding decision.

“But we’re not trying to create a confrontation, we’re trying to create a solution mindful of the rights of people that were established under the law,” he added.

Under t hese c i rc u m st a nces, Kerry said the US encourages the Philippines and China and other claimants “to engage in negotiations.”

Yasay, on the other hand, said the merits of the decision of the arbitral tribunal is a matter of concern between China and the Philippines. He added that he hopes to engage China and the other claimants “in moving forward to the peaceful implementation of the arbitral award.”

He ref used to accept t hat the nonreference to the arbitral ruling on the Philippine case against China in the joint Asean statement was a “ defeat” for the country.

That the Philippines did not have to embarrass Beijing at the Asean meeting was summed up by a diplomat, who said that “China had been badly wounded and that it is licking its wound.”

Fol low i ng t he e nd of t he meeting last Sunday, the media said Asean failed to single out Beijing having lost its expansive claims in the South China Sea as declared by the PCA in The Hague.

C h i n a re f u s e d t o p a r t i c ipate i n t he proceed i ngs or recognize the decision of the

[on the contrary], any damage and/or injury that petitioners may suffer due to the continued procurement of additional LRVs is, in fact, quantifiable and if proven, is fully compensable as damages,” the CA pointed out.

The appellate court also agreed with the RTC that under Republic Act 8975, or the Alternative Dispute Resolution Act, only the Supreme Court can enjoin government infrastructure projects from proceeding.

The purchase of 48 LRVs from Dalian is considered a national government project, because it was included in the Investment Priorities Plan approved by Congress. The trial court, according to the CA, may grant injunctive relief if the matter is of extreme urgency involving a constitutional issue.

“Bare allegations or invocation that MRTC suffered grave injustice and irreparable injury considering that its constitutionally protected rights were violated will not automatically result in the issuance of an injunctive relief,” the CA explained.

The CA said its decision is limited to the issue of the injunction as interim relief, as the main dispute remains pending before the Singapore International Arbitration Center.

UN-backed arbitral court.

Yasay said whether the Asean statement was a victory or defeat for either China or the Philippines was immaterial, “because the fact is clear…this is a victory for Asean” for upholding international law and the United Nations Convention on the Law of the Sea, as well as the diplomatic and legal process he said “ justify [Asean’s] existence.”

Yasay added that the Philippines would stand by the arbitral ruling for laying the “legal basis” for the peaceful resolution of the territorial dispute with China, but stressed that the case filed before the PCA “concerns [only] China and the Philippines,” which will now have to resolve the issues through diplomacy and bilateral talks.

Yasay quoted specific sections of the joint statement that reaffirmed Asean’s commitment to the peaceful resolution of disputes, expressing concern over China’s reclamation work in the disputed waterway and its effects on regional stability, and urging respect for freedom of navigation and overflight, and asked “whether it is correct for anyone to say that we have given up our position insofar as the decision of the arbitral tribunal is concerned.”

He expressed hope that former President Fidel V. Ramos’s acceptance of his appointment as special negotiator would be a positive signal for the bilateral talks to proceed.

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Mindanao takes cue from Duterte’s Sona

By Manuel T. Cayon

D

@awimailbox Mindanao Bureau Chief

AVAO CITY—Local governments in Mindanao have started incorporating some of President Duterte’s plans, which he bared in his State of the Nation Address (Sona), into their own policies.

Officials of the Autonomous Region in Muslim Mindanao (ARMM), for instance, are keeping in mind the possible shift to a federal form of government as they craft the region’s economic policies.

Lawyer Ishak Mastura, chairman and managing head of the ARMM’s regional Board of Investments (BOI), on Monday called for the conduct of a study “on how federalism can improve the policy environment for business and economic development using the ARMM experience.”

Mastura said the region may start the discussions on federalism using the region as a case in point on how it would mount initiatives to shift to federalism.

He cited a 2003 study of the US Agency for International Development, which stated “the ARMM can sell itself as a good laboratory case for a possible shift toward federalism, should efforts to change the Constitution push through.”

Mastura broached the conduct of a study in a meeting with regional economic-development agencies held at the office of the ARMM Department of Trade and Industry to craft an Economic Development Roadmap for the ARMM, the regional Bureau of Public Information said.

“Hence, initiatives toward strengthening ARMM political institutions, political feedback process, bureaucracy and systems of governance need to be done. This provides a worthy experiment on which approaches would work and which wouldn’t,” he said.

By the time federalism is adopted, Mastura said the country “would be reasonably prepared to make it work,

as it would have the ARMM model to look up to.”

Mastura said the ARMM experience of autonomy has been “beneficial for business” after the signing of the Framework Agreement on the Bangsamoro and the Comprehensive Agreement on the Bangsamoro with the Moro Islamic Liberation Front.”

Since 2012, he said the ARMM was able to attract a total of P13.7 billion in investments.

“With peace and stability on the ground, investors cite the ease of doing business in the ARMM as a complementary reason they have decided to invest in the region,” Mastura said.

“The reason for the ease of doing business in the ARMM is that permits and approvals from government agencies don’t have to be referred to Manila and instead with the devolved autonomous powers given to the ARMM agencies,” he added.

Mastura said these devolved agencies would be the ones to approve permits, thereby reducing processing time and cutting down red tape.

ARMM Gov. Mujiv Hataman believes the governance reforms he has initiated in 2011, and which he assured will continue, “ have contributed to the efficiency and effectiveness of its service delivery.”

Wait and see

A lot of work would depend on Congress to make Mr. Duterte’s economic policies, including his request for emergency powers, to solve the transportation woes in the nation’s capital, according to Party-list Rep. Carlos Isagani T. Zarate. of Makabayan.

IN this file photo, a vinta boat is on display in one of the resorts on Samal Island in Davao del Norte. The vinta is a traditional boat from the Philippine island of Mindanao. NONIE REYES

Zarate said there should be no reason to doubt the political will of the President, based on his track record as mayor of Davao City.

But, he said, “it is important that all these policy statements have to be crafted into law to make them effective and implementable.”

While awaiting congressional action, Zarate urged the public “to be vigilant to ensure that reforms would now be done, especially that there are a lot of things that have been overlooked, and were not implemented by past administrations.”

He explained the low grade given by some sectors to the President’s Sona, like the progressive labor, due to his failure to reiterate his campaign promise that he would end the contractualization of labor.

“There are other items he did

not mention, but which we are informed were in the original script.

But we cannot fault him for the emission, because he probably wants to emphasize some pressing issues,” Zarate said.

However, he said some lawmakers have already taken their cue from Mr. Duterte and have filed bills to stop the contractualization.

Gesture of goodwill

Zarate said the President’s declaration of a unilateral cease-fire with the Left is one of his “landmark pronouncements.”

“We welcome the unilateral declaration of cease-fire. It can help [jump-start] the peace process. It’s a goodwill gesture, indeed, from the President. We can expect to see progress in the peace process,” he said.

Capt. Joan Petinglay, spokesman of the Sixth Infantry Division, said the cease-fire “is effective immediately, as it was announced in the Sona.”

“We don’t have to wait for the written directive to enforce it,” Petinglay told the BusinessMirror from the division headquarters in Camp Awang, Maguindanao.

She said, however, that the division’s area of responsibility covers a small portion “where there are only about 20 [New People’s Army guerrillas] in a small portion of Sultan Kudarat.”

“What we have here is the ceasefire mechanism with the Moro Islamic Liberation Front,” she said, adding that the mechanism has been effective, as it averted major armed incidents in the last four years.

Maj. Ezra Batagtey, spokesman for the Eastern Mindanao Command, said the Sona’s announcement was effective immediately, “and that means, all major operations have to be canceled, to allow only security patrols to protect the communities.”

However, he said all units would have to be given the written implementing rules and regulations “to guide our soldiers.”

Batagtey said the Armed Forces of the Philippines would also monitor “how far and immediate” the statement of Communist Party of the Philippines’s founder, Jose Maria Sison, would filter down to all the party’s guerrilla units.

“In the meantime, we have to maintain our defensive posture,” he said.

Angara eyes passage of income-tax reform bill by December

By Butch Fernandez @butchBM

T

he Ways and Means Committee headed by Sen. Juan Edgardo M. Angara, is targeting the passage of the income-tax reform bill in the Senate by December this year.

Angara was named on Tuesday as the chairman of the committee tasked to conduct hearings and marshal the bill’s quick approval as chief sponsor of the long-awaited measure that President Duterte had endorsed to Congress for early enactment into law.

Soon after Senate President Aquilino L. Pimentel III banged the gavel formalizing his nomination as new chairman of the Ways and Means Committee, Angara affirmed that approval of the income-tax reform bill is on top of the Senate panel’s priority list.

Taking the floor after assuming

the post, he thanked the Senate leadership and his colleagues “for choosing me to head the Ways and Means Committee.”

“We personally requested for this committee so we can continue our work on overhauling our outdated and unjust tax system,” Angara added. “We’ve been pushing for this reform since I was elected senator in 2013, and I’m now very confident that our bill will finally see the light of day.”

Angara acknowledged President Duterte’s promise in his first State of the Nation Address (Sona) before a joint session of Congress on Monday that the administration will help push for the early enactment of a law lowering income-tax rates.

He noted that Duterte’s 10-point economic agenda included instituting progressive tax reform and more effective collection, indexing taxes to inflation.

Pointing out that the Duterte ad-

We personally requested for this committee so we can continue our work on overhauling our outdated and unjust tax system.

We’ve been pushing for this reform since I was elected senator in 2013, and I’m now very confident that our bill will finally see the light of day.”—Angara ministration’s economic managers also assured submission of a taxreform package to Congress by September, Angara said: “We are looking forward to working hand in hand with the Department of Finance to come up with a comprehensive taxreform that will both benefit the Filipino people and the government.”

“But, definitely,” he added, “the Senate Ways and Means Committee will start conducting hearings right away on bills that seek to update and adjust our tax brackets.”

Angara said lawmakers supporting the reform measure are hoping to pass the bill indexing tax rates to inflation “by the end of the year so

our taxpayers can enjoy higher takehome pay beginning next year.”

As proposed in Angara’s Senate Bill 129, workers earning below P70,000 annual taxable income or approximately P14,000 monthly gross income will be exempted from paying taxes, dissolving the first three brackets under the present tax code.

Angara also proposed that those earning P20,000 to P30,000 monthly will move to a lower bracket and will be taxed from the current 25 percent to 20 percent, saying the lower tax rates will result in higher take-home pay, with savings from tax of more than P10,000 a year.

Meanwhile, the top tax bracket will be increased from an annual taxable income of P500,000, or approximately P60,000 monthly gross income, to P1.25 million annual income, or those earning more than P100,000 a month.

“In effect, we are easing the tax burden of our workers, as most of

them will be pulled back to their original tax brackets in 1997,” Angara said.

The Angara bill also provided for an automatic adjustment in the tax schedule every three years using the consumer price index so that inflation will no longer result in tax increases.

At the same time, Angara also filed Senate Bills 130 and 317, which seek to lower personal and corporate income-tax rates, respectively, to 25 percent, saying this would “make the Philippines more competitive as the country holds the highest incometax rates in the Asean region.”

As part of his tax-reform agenda, the senator is also pushing the creation of a Taxpayer Assistance Service Office to ease the burden of Filipinos in paying taxes, and a so-called Family Tax Relief bill that “allows college tuition fees and home loans as deductions from the gross income of individuals.”

Metro Pacific unit to invest ₧10B in cargo rail system

By Lorenz S. Marasigan @lorenzmarasigan

T

he revival of the cargo rail system, which will run from Manila to Laguna, will cost the private sector P10 billion, but it will decongest the port area in the country’s capital by as much as a tenth.

Ferdinand G. Inacay, who sits as the president of MRail Inc., a unit of

Metro Pacific Investments Corp., said his company is eager to start the rehab and the reconstruction of railway cargo system that will connect the ports of Manila and an inland container terminal facility in Laguna.

The service will make use of the existing right of way of the Philippine National Railways (PNR) and is expected to start operating in two years’ time.

“The total project size for the

Manila-to-Calamba cargo rail is P10 billion; it includes the procurement of eight locomotives, which will push and pull the 120 wagons and the rehab of the rails,” he said over lunch on Wednesday.

A wagon set will comprise of two locomotives and 30 wagons. The company initially plans to launch eight services per day.

Inacay said this will free up a por-

tion of the roads in Metro Manila, decongesting the arteries that run to and from the south of the capital.

“Based on our study, there are 6,000 trucks entering Manila from the south daily. With the said service, we can remove about 10 percent of as much as 600 trucks on the roads per day,” he said.

International Container Terminal Services Inc. used to operate the

cargo trains transporting containers from the port of Manila to Laguna. Its operations started in 1998, and was folded down in 2003.

MRail, a subsidiary of the Manila Electric Co., submitted the railway cargo-system proposal in 2015 to the Aquino administration, but failed to implement it due to technicalities.

The private company now awaits the final approval of Transportation

Secretary Arthur P. Tugade. The project is now up for review, and Inacay is confident that his group will receive the go signal to start with the project during the administration’s first 100 days.

Under its proposal, MRail will make use of the tracks of the PNR to transport containers to and from Calamba, Laguna, and Manila. The company will pay track access fees to the government on a per kilometer basis.

Asean

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Manufacturing–the backbone for Asean?

Asean-EU Perspective

HENRY J. SCHUMACHER

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n the last 25 years, Asean countries have increasingly become established as a preeminent destination for global manufacturers seeking a well-resourced, cost-effective manufacturing base for garments and textiles, electronics and a huge variety of branded goods that stock the shelves of retailers in Europe and North America.

Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam received a total foreign direct investment (FDI) of $111.3 billion. As a result of continuing high levels of investment, the contribution from industry and manufacturing to economies throughout the region continues to grow. In Indonesia, the sector’s contribution to GDP has reached 47 percent, 40.2 percent in Malaysia and 31.1 percent in the Philippines, and Singapore’s services dominated economy industry still accounts for 26 percent of its GDP (CIA World Factbook).

There is a developing strategy among many Asean states to move from low-cost manufacturing and become providers of value-added products in many sectors, involving ship and drilling rigs, automotive, mineral smelting and refining, biomedical and biochemistry, petrochemicals, health care, agro-biotechnology and many more.

As the region’s economies change to concentrate on higher value-added production, foreign investors are also looking at opportunities likely to follow Asean economic integration. Transnational corporations are boosting the FDI spending because of this integration and the good economic prospects in Asean.

The promise of a harmonized customs system between Asean countries offers opportunities for the integration of supply chains and unhindered movement of goods between member-states. This has positive implications for a range of industries, such as garments, footwear, textiles, electronics and the automotive and food sectors. Integration is also proving a powerful magnet for foreign investment, as mentioned above.

In anticipation of this move toward technology requirements, we launched the EU-Philippines Business Network (EPBN) in early 2014 that are implementing the project that involves all European business organizations in the Philippines. The objective is to match European and Philippine SMEs in partnerships that will allow stronger market positions in this country and, at the same time, provide the basis to successfully benefit from the market opportunities the Asean Economic Community (AEC) offers. The EPBN project is cofinanced by the European Commission.

As manufacturing operations in Asean countries steadily orientate toward more advanced activities, a growing challenge will be to maintain the region’s competitive edge and attractiveness as an investment destination.

Achieving economic integration and establishing greater connectivity are likely to be elements in achieving this.

With regard to the free movement of goods, the AEC is well on the way toward a single market. However, the harmonization of standards, norms and administrative procedures, the mutual recognition of registrations and licenses or the free choice of country of employment—at least for skilled workers and university graduates—still require considerable efforts.

Widodo announces new Cabinet

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ndonesian President Joko “Jokowi” Widodo announced a new Cabinet lineup on Wednesday that returns a reformist to the Finance Ministry and puts a former head of the military with a checkered career in charge of security.

Jokowi said Sri Mulyani Indrawati, who was finance minister from 2005 to 2010, is returning to the role from her current position as managing director at the World Bank. In her first stint as finance minister, she was praised for overhauling a corrupt taxation department and guiding the economy through the 2008 global financial crisis.

Wiranto, a former general who was head of the military in 1999, when Indonesia’s army committed serious human-rights abuses in East Timor, was named the minister for security, political and legal affairs. Wiranto and other military men were indicted for crimes against humanity in 2003 by a UN tribunal, but successive Indonesian governments have ignored its findings.

Wiranto replaced Luhut Binsar Pandjaitan, a close of ally of Jokowi, who becomes the chief minister for maritime issues at a time when Southeast Asian nations are at odds with China over its territorial ambitions in the South China Sea. It is the second reorganization of Jokowi’s Cabinet since the maverick politician became president in 2014, after defeating an establishment candidate in a national election.

A total of 13 ministries were changed and nine of the ministers are new to the Cabinet. Many of the new appointments were in economy-related ministries, reflecting Jokowi’s focus on developing an economy that is one of the largest in Asia but suffers from weak infrastructure and entrenched poverty.

“We have to resolve the poverty problem. We have to reduce the economic gap between the rich and the poor, the gap among regions,” Jokowi said. “We have to strengthen the national economy, we have to open job opportunities as wide as possible for the people.”

Jokowi has in recent months consolidated power in parliament after Golkar, the nation’s secondlargest political party, backed his government. With a two-thirds majority, Jokowi has been able to push through changes including a tax amnesty aimed at repatriating billions of dollars that the government plans to use for infrastructure.

In August last year, Jokowi replaced six ministers in a move he said was needed to reinvigorate infrastructure spending and make the country more attractive to foreign investment. The president has warned in the past that he won’t hesitate to get rid of underperformers.

Jokowi on Wednesday named Brodjonegoro as national planning minister and picked Wiranto, a former defense minister and commander of the Indonesian military, as coordinating minister for security affairs. AP/Bloomberg News

Editor: Max V. de Leon • Thursday, July 28, 2016 A5

With or without TPP, Vietnam forging ahead

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or Vietnam’s government, talk of a collapse in a trade pact stretching across the Pacific Ocean from the United States to Malaysia is failing to dent confidence.

Whether the Trans-Pacific Partnership (TPP)—a 12-nation preferential trade agreement that covers about 40 percent of the global economy—is approved by the US Congress, authorities in Vietnam are forging ahead with plans to cut taxes and reduce red tape for businesses to make them more globally competitive.

“With or without TPP, our goal is to improve our investment environment,” Tran Xuan Ha, a deputy finance minister, said in an interview in Hanoi on July 22. “With TPP, our corporate sector will need to be even more competitive, to ensure it retains market share.”

Vietnam is riding the wave of a foreign investor-led economic boom that’s seen the Southeast Asian nation transform from mainly an exporter of agricultural commodities, such as rice and coffee, to a manufacturing hub. That’s a development path that’s unlikely to be reversed even if TPP fails to take off, given the opposition to the accord by both US presidential nominees, Donald Trump and Hillary Clinton.

“Vietnam stands to gain from TPP, but so do many of the other countries, including the US,” Sebastian Eckardt, lead economist for the World Bank in Vietnam, said in an interview in Hanoi. For Vietnam, “it’s an upside potential, rather than a downside risk, if it doesn’t come through.”

The World Bank estimates the Southeast Asian economy will expand 6 percent this year, down from

an earlier projection of 6.2 percent following the worst drought in three decades. Foreign-investment pledges surged 85 percent in the first four months of the year, compared to the same period in 2015, according to the statistics agency.

TPP is set to boost Vietnam’s GDP by 8 percent by 2030, making it among the biggest gainers of the trade accord, according to the World Bank. The pact—a centerpiece of US President Barack Obama’s foreign-policy objective in Asia—is more ambitious than other agreements in not only reducing

85%

Hike in Vietnam’s foreign investment in the first four months of the year

tariffs on a range of products, but also offering protection on intellectual property rights.

The TPP was signed in February and has yet to be ratified by members, including Australia, Japan and Singapore. It will come before the National Assembly in Communist Party-controlled Vietnam for approval later this year.

Ha said the Finance Ministry will submit draft regulations next month to Prime Minister Nguyen

Xuan Phuc to ease business taxes and support start-up companies.

The department is recommending the corporate income-tax rate for small- and medium-sized enterprises (SMEs) be lowered to 15 percent or 17 percent from the current 20 percent.

“We are very ready to go through all our internal procedures,” Ha said.

“TPP will bring a lot of opportunity for our economy, as well as a lot of challenges for our SMEs.” Getting the trade deal approved will be difficult in the US, where the presidential election campaign has been dominated by antiglobalization sentiment. If the US Congress fails to ratify the agreement in a so-called lame-duck session after the November vote, it would face an uncertain fate in front of new legislators.

Ha declined to comment on whether he thinks the US will ratify the deal. Bloomberg News

a microentrepreneur transports her products in Vietnam.

‘No free pass for Indonesia on China sea disputes’

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ndonesia should step up and play a greater leadership role in Southeast Asia’s management of maritime disputes with China, a group of foreign-policy experts and academics said in an open letter.

“We should not forget that an ‘independent and active’ foreign policy does not give Indonesia a free pass to watch a strategic turmoil unfolding in its environment from the sidelines,” said the 19 signatories from institutions across Indonesia.

The academics were responding to an international tribunal’s ruling this month, rejecting China’s claim to exclusive control of most of the South China Sea, which hosts more than $5 trillion in international trade each year. The Philippines, which brought the case against China, is pushing the 10-member Association of Southeast Asian Nations (Asean) to take a firmer stance on the issue. “We would like to call on President Joko Widodo to fully support and mobilize the entire foreign-policy establishment to play a more proactive, consistent, and productive leadership in Asean’s management of the South China Sea issue,” read the Indonesia statement posted online on Wednesday. Evan A. Laksmana, a researcher with the Centre for Strategic and International Studies in Jakarta who was the lead signatory, confirmed its authenticity.

Natuna Islands

Asean nations, including the Philippines and Vietnam, have

We would like to call on President Joko Widodo to fully support and mobilize the entire foreignpolicy establishment to play a more proactive, consistent and productive leadership in Asean’s management of the South China Sea issue.”

—Indonesia open letter

overlapping claims in waters where China has reclaimed thousands of acres of land and increased its military presence. Indonesia is not a claimant, but its navy has come into proximity with China’s fishing boats and coast guard off the gas-rich Natuna Islands, an area Beijing says are its traditional fishing grounds.

Widodo, known as Jokowi, made a high-profile trip to the islands last month to underscore Indonesia’s sovereignty.

The Permanent Court of Arbitration said on July 12 that China’s efforts to assert control over the South China Sea had “aggravated” tensions, “inflicted irreparable harm” to the environment and “violated” Philippine sovereign rights.

China argues the disputes have nothing to do with its relationship with Asean and has dismissed the international ruling.

Those who signed the open letter said they were concerned that Chinese officials had made statements “implying the ruling is somehow tainted.” Dismissing international law and raising regional tensions are “not the kind of responsible behavior we have come to expect from Indonesia’s strategic partner and a respectable member of our regional community.”

Asean foreign ministers, who met in Lao PDR this week, failed to take a tough stance on the disputes in their first gathering since the ruling.

The statement they issued did not mention China by name, though it noted ministers remained “seriously concerned over recent and ongoing developments” in the area.

Asean operates on consensus and it only takes one member state to disagree for a statement to be torpedoed. A meeting of foreign ministers

in China in June ended in confusion after Malaysia released and then retracted a joint Asean statement that cited China for the first time over its behavior. That has led several Asean states to publicly call for greater unity for the bloc, amid concerns about its effectiveness going forward.

‘Dimming lights’

“WE are cognizant of Asean’s dimming lights and growing marginalization in managing the tension in the South China Sea, which may worsen as the tribunal’s ruling could inspire less, not more, confidence in the grouping’s centrality,” the Indonesian open letter said.

Bilahari Kausikan, a Singaporean ambassador-at-large, said on Monday the Lao PDR ministerial statement was “weak” and only able to be issued after an “11th-hour change of heart.” He said the maritime disputes had become a divisive issue and there was no clear way out of the impasse, given Cambodia and Lao PDR were seen as siding more with Beijing.

“Asean can only work by consensus and while we have had serious disagreements in the past what we have at least shared is a consensus on always having a consensus lest the organization break up,” Bilahari said in a Facebook post. Commenting on a call by some academics for Asean to drop its rule for consensus, Bilahari said that could signal the end of the organization as it now exists.

Bloomberg News

TheBroa

Business

A6 Thursday, July 28, 2016

Would giving President Duterte extra space in decision-makin

Wanted: Emerg M

By Jovee Marie N. dela Cruz, Butch Fernandez, Cai U. Ordinario & Catherine N. Pillas

ORNINGS in Metro Manila—one of the largest megacities in the world with 14 million people— can be filled with ironies. At a time when most people are rushing off to work, traffic jams have kept millions of commuters and motorists trapped inside private and public vehicles—unmoving.

Trains that are supposed to take commuters from one end of the Metro to another in minutes suddenly seemed slow in arriving, as millions of passengers wait in long queues for their ride to arrive.

Others bet on buses, while a few shell out additional pesos on taxi cabs.

All these happen on a supposed 21-kilometer expressway named after one of the best Filipino writers in Spanish, Epifanio de los Santos.

Indeed, what straddles the fast-paced centers of the metropolis, Edsa seems to hold every inch of growth in abeyance. The clogged Highway 54 is something that President Duterte promises to change. To do this, Mr. Duterte said he may need to be granted emergency powers by both houses of Congress.

“’Pag walang emergency powers makukumpas ba natin ’yan?

Hindi natin makukumpas ’yan,” Transportation Secretary Arthur P. Tugade earlier told the BusinessMirror in a roundtable. According to Tugade, if the government fails to synchronize everything, traffic ills would be solved in one area, but would cause a bottleneck in another area.

“You can solve the traffic jam along Edsa, but a bottleneck would occur in Quezon City,” he said.

“Let’s cooperate with each other.

We have a good chance to do something now.”

Tugade said he vows to solve traffic ills in 24 months. “Kapag after two years wala akong nagawa, sipain ninyo ako.”

Nothing capricious

GRANTING emergency powers to the Commander in Chief will give Mr. Duterte the authority to impose rules and regulations without the permission of both the House of Representatives and the Senate.

In terms of traffic rules, the emergency powers can give the current administration the authority to disregard traffic rules set by each city and municipality in Metro Manila.

Under the Local Government Code (LGC) of 1991, local government units (LGUs) are given autonomy to set their respective roaduse policies, among others.

However, after over two decades, the independence given to local public officials has resulted in conflicting traffic rules and regulations. Tugade said the policy incongruity needs to be addressed if some reprieve from the daily traffic situation—which seems to be worsening by the day—will be felt by commuters and motorists.

Tugade claims giving Mr. Duterte emergency powers will allow the government the authority to remove all bus terminals on Edsa. These bus terminals have added to the congestion before, during and after rush hour, the transportation czar said.

“Nothing in the emergency powers is capricious,” Tugade said, adding they would also consult owners of land that may need widening or opening up. “’Pag pumunta

ako ng walang emergency powers, papaalisin lang nila ako.”

Knife-like

THESE emergency powers, Tugade claims, can also help address “with knife-like precision” the complicated situation of the Metro Rail Transit (MRT). He said so many temporary restraining orders (TROs) are currently filed in connection with the MRT.

The complex ownership structure of the MRT is one of the biggest causes for the neglect of the masstransport system, Tugade said.

The country’s train system suffers a serious lack of cars, poor maintenance, especially of tracks, faulty elevators and escalators at stations, and other operational deficiencies.

The main victims of this poor service are commuters who are crammed into train cars like sardines every rush hour. Apart from the high density of passengers, many MRT cars encounter problems with their air-conditioning system, causing many passengers severe discomfort throughout their ride.

According to Tugade, the emergency powers would address the various TROs and lawsuits that have tied the MRT to its current sorry state.

“If you look at the problems related to the MRT, you will see a labyrinth of selfishness na hindi mo mabibigyan ng solusyon.”

Port congestion

APART from addressing traffic jams, Tugade claims the emergency powers would allow the Duterte administration to directly and swiftly address congestion at the Ninoy Aquino International Airport (Naia).

One major solution the government intends to implement is to transfer the Naia’s general aviation—which includes mostly privately owned aircraft—to locations like Sangley.

The President himself said in his State of the Nation Address (Sona) on Monday the move will negatively affect only the rich who have their own planes. But the move, Tugade said, will address at least 18 percent to 20 percent of the congestion at the Naia.

This, however, will open Tugade and the administration to lawsuits.

He said the owners of these private aircraft will not take the matter sitting down and, because they have the money, can sue him and the Duterte administration.

According to Tugade, this plan is not new and was hatched during the administration of President Benigno S. Aquino III.

“Bakit hindi nagawa? There was no political will that is supported by emergency powers, kasi kakasuhan ka,” he told the BusinessMirror. “’Pag inalis ko ho ’yung general aviation, akala mo ’yung mga mayari ng mga helicopter dyan, ‘justjust’ na papayag? Kakasuhan ho ako [ng mga] iyan.”

Business support

BUSINESS groups, meanwhile, have supported Tugade’s proposal for emergency powers when it was aired in June.

In a statement issued following the Sulong Pilipinas Business Conference in Davao City, the Makati Business Club (MBC) said it is giving conditional support to the Duterte administration to be vested with emergency powers to resolve what it has dubbed a “transportation crisis.”

“The MBC believes that the nation does face a transportation crisis, which needs urgent action and solutions,” the group said. “If the solutions to address the transport crisis require emergency powers, [the] MBC will be prepared to support the consideration of welldefined emergency powers for the transport sector, provided these emergency powers are specific, limited and time-bound, anchored on a solid national policy and complemented by a strong system of accountability.”

Another group, the Management Association of the Philippines (MAP) has called for an executive order for the same, emphasizing that there must be a concurrence of Congress on the matter.

“There must be an issuance of an executive order to declare that a transportation and traffic crisis exists in Metro Manila and, with the concurrence of Congress, secure emergency powers for the President to address the crisis by mobilizing all government resources and undertaking necessary measures unhampered by appointment, procurement, budgetary and Commission on Audit regulations during its pendency.”

Further, the MAP recommended in June the appointment of a traffic czar to oversee the socalled crisis, and endorsed Jose P. de Jesus. De Jesus held previous posts in the government: as secretary of transportation and communication and as secretary of public works and highways.

On the long-standing issue of a common station between the proposed MRT 7 and the lines of MRT 3 and Light Rail Transit (LRT) 1, the MAP suggests quarreling parties to solve the dilemma within a period of 60 days upon commencement of talks. And if the talks fail to progress, the appointed czar must step in and take “direct action.”

The Philippine Chamber of Commerce and Industry, which is mostly composed of small and medium enterprises, similarly aired support for the measure.

Senate scrutiny

SENATORS share the Executive’s sense that daily traffic gridlocks in Metro Manila—estimated to cost the economy P2.5 billion daily— require quick, determined action.

However, members of the Upper House believe that action cannot guarantee they can meet a onemonth timeframe to seal the grant of emergency powers sought by Mr. Duterte.

Responding to queries from the BusinessMirror, senators were divided on whether the Senate can fast-track approval of emergency powers that Mr. Duterte himself requested from lawmakers when he appeared before a joint session of Congress to

deliver his first Sona.

“Pwede [that’s possible],” Senate Majority Leader Vicente C. Sotto III said, when asked if the emergency powers can be approved within a one-month timeframe.

But Sen. Richard J. Gordon said speedy passage of the special powers for the President to untie daily traffic gridlocks can only be determined at the committee level.

“[It] depends on how fast it can come out of committee,” Gordon said, referring to the Public Services Committee, chaired by Sen. Grace Poe, to which the emergency powers proposal was referred for public hearings.

Sen. Ralph G. Recto, however, applied the brakes, saying lawmakers need to first ascertain what exactly are the parameters and duration of the requested emergency powers.

“I filed a resolution inquiring exactly what emergency powers do they need,” Recto told the BusinessMirror, clarifying that, “in general, I am not opposed to it.”

“We are losing P2.5 billion daily due to traffic,” he added. “But

we need to know exactly what they [members of the Executive] are asking for.”

Drilon’s doubts

FORMER Senate President Franklin M. Drilon voiced doubts that Congress can grant the emergency powers sought by Mr. Duterte in only four weeks of plenary deliberations.

“We will give it priority, but I doubt if we can finish it in one month,” Drilon said, adding at least two committees—on Public Services and Revision of Codes— will likely conduct joint hearings on the proposal.

Recto’s Senate Resolution 59 “directs the appropriate Senate committees to conduct an inquiry, in aid of legislation, on the propriety of granting special or emergency powers to the President of the Republic of the Philippines to immediately solve the worsening traffic congestion in Metro Manila and surrounding provinces.”

The Recto resolution cited the 1987 Constitution, which provides that in times of war or other national emergency, Congress may,

by law, authorize the President, for a limited period and subject to certain conditions, to exercise powers necessary and proper to carry out a declared national policy.

Recto pointed out that “residents and motorists in Metro Manila and surrounding provinces experience horrendous traffic congestion on a daily basis.”

Moreover, he asserted that Metro Manila continues to be the top contributor to the country’s economy, based on the 2014 statistics presented by the Philippine Statistics Authority (PSA), accounting for a 37-percent share in the country’s GDP.

Jica study

RECTO also cited a road-map study conducted by the Japan International Cooperation Agency (Jica) that estimated the loss caused by Metro Manila’s traffic jams on the Philippine economy at P2.4 billion a day, or almost P900 billion a year in potential income, “a figure that could balloon up to P6 billion a day, or P180 billion a year by 2030.”

Recto noted that precisely, the

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www.businessmirror.com.ph | Thursday, July 28, 2016

a7

ng solve traffic jams?

rgency Powers Measures forwarded by House Bill 3, or Traffic Crisis Act of 2016 THE bill would allow the President to administer and implement remedial and such other related measures to address the traffic crisis in the country. These measures would include the following:

n Creation and establishment of mass-transport system.

n Transfer of transport terminals to decongest choke points in Metro Manila and other major cities.

n The creation or immediate establishment or designation of alternative international airports and the creation of parallel runways, if feasible, to decongest airport traffic, in order to relieve and alleviate traffic situation and spread through less congested areas near or adjacent Metro Manila.

n The transfer of public markets located on busy highways.

n The establishment of friendship routes, or alternative routes, by opening an otherwise private subdivision road to nonresident motorists, with the option to provide nonfiscal incentives in return for the use of the said private roads; gated communities and gated military camps parallel to major thoroughfares may, likewise, be opened, subject to conditions and restrictions.

n The issuance and implementation of rules on the working hours of employees and workers in government and, whenever it becomes necessary, in the private sector to alleviate traffic congestion during rush hours.

n Exercise state power of eminent domain in order to appropriate private property for establishment of easement or right of way, expansion of public roads or other public purposes, with payment of reasonable compensation usually based on the fair market value of the strip of land and for any effect the condemnation of that strip has on the value of the owners’ remaining property.

n Formulate, coordinate and regulate the implementation of medium- and long-term plans and programs for the delivery of nationwide transportationrelated services, consistent with national developmental objectives and priorities.

n Whenever it is advantageous to the government, the President may enter into negotiated contracts for the construction, repair, rehabilitation, improvement or maintenance of roads, bridges, railways, toll roads, expressways, skyways, airport runways and facilities, and similar infrastructure and facilities, and the procurement of coaches, subject to requirements.

n Implement the “Roadmap for Transport Infrastructure Development for Metro Manila and Its Surrounding Areas” approved by the National Economic and Development Authority Board, known as the “dream plan” road map, estimated to cost the government P2.3 million.

n To temporarily take over or direct the operation of any transportation franchise that is found to have redundantly violated the herein declared national policy.

objective of the Jica study was to formulate a transportation infrastructure road map for a sustainable development of Metro Manila and its surrounding areas.

He added that the road-map study also included proposals that can “help reduce traffic congestion; remove barriers for seamless mobility; lower the cost of transportation for low-income groups; and decrease air pollution.”

According to Recto, the proposals include integration of a mass-transit network; an integrated network of developed urban expressways; modernization of road-based public-transport system; and strengthening of the traffic-management program.

The senator, likewise, listed the short-term projects proposed by Jica, which include suggestions to rehabilitate main urban roads; develop secondary roads in peri-urban areas; completion of North Luzon Expressway-South Luzon Expressway connector, including the provision of access to port areas.

“As for urban rail, the government must finalize the overall

metropolitan urban rail-network system plan by looking into the possibility of including a subway on Edsa, and to extend railway main lines and secondary lines,” Recto said, quoting from the Jica proposal.

Unmanageable proportion

THE Japanese agency also suggested that “with respect to traffic management, the government must conduct a comprehensive traffic-management study that will strengthen enforcement capacities and introduce systematic roadsafety interventions.

He added that with regard to gateway ports and airports, Jica recommended that the government implement committed improvement packages for the Naia and the Clark International Airport; place a cap on expansion of Manila ports; facilitate diversion to Batangas and Subic Ports through incentives; and to conduct study for the development of a new Naia and redevelopment of the Port of Manila.

Recto warned that should the

worsening traffic problem be allowed to persist, “the economic losses may soon reach unmanageable proportion.”

The senator asserted that implementation of the Jica Roadmap Study by 2030 is expected to produce, among others, time cost savings of up to P570 billion a year; toll and fare revenue for the government of up to P119 billion a year; public transport-fare savings of up to P18 a day; and travel-time reduction of up to 49 minutes per trip.

Recto recalled that the Executive department had already reviewed the Jica Roadmap Study, and has formulated an action plan in order to implement the Jica proposals, but it “admitted that there are serious physical and legal roadblocks that must be hurdled before the government can fully implement the Jica proposals.”

“In providing special or emergency powers to the President of the Republic of the Philippines to solve the vehicular traffic crisis, impediments to the full implementation of the Jica proposals, such as restraining orders or

injunctions from courts, right-ofway issues; restrictive regulations from LGUs; and even the control, management and apprehension of undisciplined motorists and pedestrians may be specifically addressed,” Recto said.

But the senator cautioned that before granting emergency powers to the President, it is incumbent upon Congress to inquire from the Executive department the specific powers being requested and, thereafter, ascertain whether the grant of emergency powers is, “indeed, necessary and proper, and will enable the President to implement programs that will solve the country’s traffic woes, unhindered by the usual bureaucratic delays.”

Recto explained that this was why he asked the Senate leadership, under newly installed Senate President Aquilino L. Pimentel III, to direct the appropriate Senate committees to conduct an inquiry, in aid of legislation, on the propriety of granting special or emergency powers to the President to promptly address daily traffic gridlocks in Metro Manila and other clogged areas in the metropolis.

Last resort

EVEN as he authored the bill seeking to grant emergency powers to Mr. Duterte, Drilon is asking Congress to include adequate safeguards against “corruption, as well as onerous and disadvantageous contracts” the government would sign in a bid to solve daily traffic gridlocks in Metro Manila and other urban areas.

In filing Senate Bill 11, also known as the Transportation Crisis Act of 2016, Drilon proposed to grant Mr. Duterte emergency powers in dealing with what the senator described as an “alarming transportation crisis” within Metro Manila.

“It is also of the highest importance that the bill will provide safeguards that can adequately protect the system and the people from abuses,” Drilon asserted.

He insists that members of Congress should take a careful look at previous experiences, citing, for instance, the country’s experience when Congress enacted the Electric Power Crisis Act of 1993.

“We must learn from the experiences with the Electric Power Crisis Act of 1993, which was crafted to address the power crisis, but, in the end, resulted in the execution of onerous contracts with independent power producers that led to expensive and higher electricity rates,” Drilon said. “We must avoid making the same mistakes all over again,” he added, saying, “the bill must ensure that the most advantageous price for the government is obtained.”

According to Drilon, the measure should also ensure that the procedure is undertaken in a transparent manner.

“We should strive for the highest standards of transparency and accountability in crafting the bill,” he said, adding, “we must make sure that these powers will not be misemployed and exploit our people, rather than help them.”

Drilon also noted that a nobidding policy and negotiated procurement must only be employed “as a last resort,” when all other alternative methods of procurement have already been exhausted.

Lower House

THE leadership of the House of Representatives said the lower chamber will prioritize the passage of House Bill 3, or the Traffic Crisis Act of 2016.

Speaker Pantaleon D. Alvarez, author of the bill, said the country is experiencing horrendous and wors-

ening, unsolved traffic crisis caused by insufficient infrastructure, coupled with inefficient management of transportation services.

Alvarez also cited the data in the Jica study noted by Recto.

“Also, the National Economic and Development Authority [Neda] concluded that without the necessary intervention by the authorities, traffic costs will likely increase to P6 billion a day, which costs are based from several factors,” Alvarez said. He added that the Neda cited these costs as value of time lost due to delay, fuel costs, vehicle operating costs, impact of health, greenhouse-gas emissions, great demand for transport-cost expenses from household income, productivity losses and overcapacity of registered vehicles, whether public or private.

Under the Constitution, Congress is tasked to approve the grant of emergency powers to the President through a resolution by voting two-thirds in a joint session.

Alvarez’s bill allows Mr. Duterte to reorganize the Department of Transportation and Communications. The reorganization would include the Land Transportation Office, Land Transportation Franchising and Regulatory Board, Metropolitan Manila Development Authority and the Toll Regulatory Board of the Philippines for land-transportation concerns. The Civil Aviation Board and Civil Aviation Authority of the Philippines, meanwhile, would be reorganized for air-traffic problems.

Reorganization

ACCORDING to Alvarez, the reorganization aims to make these agencies more effective, innovative and responsive agencies to solve the traffic crises.

The bill said the President may also abolish or create offices; split, group, or merge government positions; transfer functions, equipment, properties, records and personnel; institute drastic cost-cutting measures; and take such other related actions necessary to carry out the purpose herein declared.

“The authority granted to the President under this act be valid and effective for a period of two years from the effectivity of the act, unless sooner withdrawn by a resolution of Congress,” the measure said.

It also allows the President to create and establish a centralized traffic authority, both on air and on land; empowered to address all traffic concerns; and implement better management services resulting from balanced integration of traffic education, engineering and enforcement of services.

The bill, meanwhile, said the President shall submit a monthly report to Congress on the efficiency and effectiveness of the measures undertaken to implement this Act. It also created a congressional committee to monitor and oversee the implementation of the Act.

Arroyo, Yap

FORMER President and now Lakas Rep. Gloria Macapagal-Arroyo of Pampanga and National People’s Coalition Rep. Arthur C. Yap of Bohol also filed separate bills granting Duterte emergency powers.

Arroyo said the current traffic congestion in Metro Manila impedes progress and leads to a situation where billions of pesos are lost daily in fuel cost, manhours and opportunities.

“No one is spared from this crisis,” Yap said. “The public suffers from the pains of commuting in the grungy Metro Rail systems and public-utility vehicles.”

According to Yap, “Problems of this proportion call for drastic solutions, because these have already resulted in higher operating cost,

lost income opportunities and productivity; higher foreign-exchange outflow for fuel; and redundant transportation equipment.”

Meanwhile, leaders of the 17th Congress are eyeing to grant Duterte emergency powers by next month.

‘Emergency corruption’

BUT Party-list Rep. Lito Atienza of Buhay warned the government against authorizing “emergency” shortcuts in the performance of public-transportation projects.

Atienza said emergency powers would only lead to “emergency corruption.”

“Government does not need special powers to sort out the growing motor vehicle-traffic mess, which is largely due to sprawling corruption, incompetence, bad enforcement and poor compliance,” he said.

“Every day we see obstructive road diggings everywhere left unattended by insensitive and inept district engineers who can’t seem to get the job done fast enough.”

According to Atienza, “In exchange for bribes, bus operators have illegally annexed our roads as their virtual terminals or waiting areas, adding to the ‘jamming.’”

“Meanwhile, colorum publicutility vehicles continue to proliferate unchecked,” he added.

Atienza said traffic problems may be addressed without extraordinary powers.

“We will surely be swamped with ‘emergency’ transportation projects, including unnecessary and irrelevant projects, because that is where the biggest kickbacks will be, considering that all best practice standards will be cast aside.”

To address traffic problems, Atienza urged Malacañang to start the planning for a rapid subway system around Metro Manila, designate “competent” executives to run the LRT Lines 1 and 2 and the MRT 3, which could help move another 1 million passengers every day.

Oversight committee

FORMER Speaker and Rep. Feliciano Belmonte Jr. of Quezon City also proposed the creation of a congressional oversight committee that would scrutinize all negotiated contracts that may be deemed disadvantageous under the proposed emergency powers for President Duterte.

While he is supporting the proposal granting Mr. Duterte emergency powers to address the worsening traffic situation in Metro Manila, Belmonte said the creation of the congressional oversight committee is important to protect the government’s transport-related projects.

Belmonte said Congress has a power to oversee all negotiated contracts that are not subject to public bidding to promote transparency in the government.

Party-list Rep. Gary Alejano of Magdalo said, “We would have wanted to see the present administration to exhaust all the options in solving the problems of our traffic before the grant of emergency powers. The assurance of President Duterte that his government is clean is not enough. The point is there are checks and balances to avoid abuse [of powers].”

For his part, Liberal Party Rep. Edcel Lagman of Albay said, “Emergency powers [could be] conceded to the Executive by the Legislative department on very special circumstances.”

“But the President in his Sona didn’t say what [are] the parameters of the emergency powers that he is seeking,” Lagman said. “He should first outline what specifically he wants.”

A8

The World BusinessMirror

Thursday, July 28, 2016

news@businessmirror.com.ph

China sends HK journalists to up to five years in prison

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EIJING—A southern Chinese court has sentenced four people, including at least two Hong Kong journalists, to prison on charges of running an illegal business after they reportedly sent copies of their sensitive political magazines to mainland China.

A court in Shenzhen said on Wednesday the four received prison sentences of up to five years each. The sentencing, following the high-profile temporary disappearance of five Hong Kong booksellers, raises questions about the semiautonomous territory’s status as a free press haven for material banned on the mainland.

Two of those convicted in Shenzhen included Hong Kong magazine publisher Wang Jianmin and editor Guo Zhongxiao, who were arrested in 2014 in the border city, according to Hong Kong media. The two men published New Way Monthly and Faces, two journals that often delved into highlevel Communist Party power struggles. It’s unclear whether the two other convicted people were Hong Kong residents, or what role they played at the publications.

Reports cited Wang’s lawyers as saying their clients were not running a mail-order business and had sent only eight copies of the magazines to friends in China. Wang was also convicted on collusion and bribery charges.

UNDER FIRE People wave Turkish flags as they take part in an anticoup rally at Taksim square in Istanbul on July 26. Turkey’s state-run news agency on Wednesday said authorities have issued warrants for the detention of 47 former executives or senior journalists of Zaman newspaper, allegedly associated with the US-based Muslim cleric who the government says is behind Turkey’s July 15 failed coup. AP

Islamic State group claims attack that killed 85-year-old French priest

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AINT-ETIENNE-DU-ROUVRAY, France—Two attackers slit the throat of an 85-year-old priest celebrating Mass in a French church, killing him and gravely injuring one of the few worshippers present before being shot to death by the police. A nun who escaped said she saw the attackers take a video of themselves and “give a sermon in Arabic” around the altar.

The Islamic State (IS) group claimed responsibility for the attack, the first inside a church in the West. The police rescued three people inside the church—including a second nun—in the small northwestern town of Saint-Etienne-duRouvray, Interior Ministry Spokesman Pierre-Henry Brandet said.

A reg ion a l Mu sl i m leader said one of the two attackers was known to the police, and a police official said he had tried to go to Syria. The official, who spoke on condition of anonymity to reveal details of the investigation, said the man was under police supervision and wore an electronic bracelet to monitor his movements.

A statement published by the IS-affiliated Amaq news agency

said the attack was carried out by “two soldiers of the Islamic State” who acted in response to calls to target nations in the US-led coalition fighting IS in Iraq and Syria.

The statement echoed claims in ot her recent at t ac k s in France and neighbor ing Germany. It repeated its threat to Wester n “cr usaders.”

A special intervention force carried out a search for possible explosives in or around the church.

“The investigations are ongoing. There are still unknowns,” Brandet said. “There are dogs, explosive detectors and bomb disposal services” at the church outside the city of Rouen, the capital of France’s Normandy region.

A nun who was in the church said the Rev. Jacques Hamel was

forced to the ground before his throat was slit. The nun, identified as Sister Danielle, told BFM television: “They forced him to his knees. He wanted to defend himself. And that’s when the tragedy happened.”

She said the attackers recorded themselves. “They did a sort of sermon around the altar, in Arabic. It’s a horror,” she said.

Dominique Lebrun, the archbishop of Rouen, conf ir med Hamel’s death.

“I cry out to God, with all men of good will. And I invite all nonbelievers to unite with this cry,” Lebrun wrote in a statement from Krakow, Poland. “The Catholic Church has no other arms besides prayer and fraternity between men.”

The priest “was always ready to help,” said Rouen diocese official Philippe Maheut. He said Hamel had been at the church for the past decade. “Sometimes he was running all around, and his desire was to spread a message for which he consecrated his life,” Maheut said in an interview with the Associated Press (AP). “And he certainly didn’t think that consecrating his life would mean for him to die while celebrating a Mass, which is a message of love.”

French President François Hollande, arriving on the scene, called it a “vile terrorist attack” and one more sign that France is at war with the IS group.

“We must lead this war with all our means,” he said, adding that he was calling a meeting on Wednesday of representatives of all religions.

He expressed solidarity with local Catholics, saying “they have been terribly hit by the killing of the parish priest by two terrorists claiming to belong to Daesh. I have met with the family of the priest.”

Daesh is another name for the IS group.

The town mayor, Hubert Wulfranc, in tears, denounced the “barbarism” and pleaded, “Let us together be the last to cry.”

Mohammed Karabila, head of the Regional Council of the Muslim Faith for Haute-Normandie, said French security services knew the name of one of the attackers. “ T he person who committed this odious act is know n and he has been fol lowed by the police for at least one-and-aha lf. He went to Turkey and secur it y ser v ices were a ler ted after this,” he told AP by phone.

He refused to divulge the man’s name and had no infor mation on the second attacker.

The pope condemned the attack in the strongest ter ms.

T he Vat ica n spokesma n, t he Rev. Federico Lombardi, said in a statement that Pope Francis expressed his “pain and horror for this absurd violence, with the strongest condemnation for every form of hatred and prayer

for those affected.”

France is on high alert and under a state of emergency after an attack in the southern city of Nice on Bastille Day—July 14—that killed 84 people that was claimed by the IS group, as well as a series of attacks last year that killed 147 others around Paris.

French authorities increased security at churches, synagogues, mosques and other places of worship after the attacks in Paris last year, but ensuring constant, blanket security is difficult in a country with a church in every town and village.

IS extremists have urged followers to attack French churches and the group is believed to have planned at least one church attack earlier, though it was never carried out.

In Apr il 2015 an A lger ian student who was arrested after shooting himself in the leg was found with heavy weapons, bulletproof vests and documents linked to IS. He is charged with killing a young woman inside her car the same day. According to French authorities, the suspect, Sid Ahmed Ghlam, was sent by the Belgian Abdelhamid Abaaoud to attack a church in Villejuif, just outside of Paris.

A cell directed by Abaaoud later carried out the November 13 attacks in Paris that left 130 people dead and the March 22 attacks in Brussels that killed 32 people. AP

US military sued over live-fire training plan in Pacific islands 15 percent H ONOLULU—Community members and an environmental group on Wednesday sued the US Navy, the Department of Defense and the secretary of defense over a plan to turn two Pacific islands into live-fire testing sites. The plan calls for using the islands of Tinian and Pagan in the Commonwealth of the Northern Mariana Islands for military war games.

The training would prevent Pagan’s native people from returning to their home island, which was evacuated 35 years ago after a volcanic eruption, and would disrupt communities on Tinian, according to Earthjustice attorneys, who are representing complainants including the Center for Biological Diversity and local

community organizations. The groups filed the lawsuit in federal court in Saipan.

The lawsuit says the National Environmental Policy Act requires the military to consider all of the training’s potential effects on the islands and surrounding communities. Calls seeking comment from the Navy and Department of Defense were not immediately returned.

The Navy did not take into c o n s i d e r a t i o n t h e p e o p l e i n vo l ve d or the wide -ranging environmental effects, according to the groups. They also allege the Navy failed to consider more suitable locations for the war games. “The Navy’s decision would have devastating consequences for the people

The percentage of Tinian island’s prime farmland soils that allegedly would be lost if the plan to turn the Pacific island into live-fire testing site pushes through of Tinian and Pagan,” Earthjustice Atty.

David Henkin said. Tinian is a small island in the Northern Marianas with about 3,000 residents, mostly low-income indigenous

Chamorro people. The military already uses a small plot on the island for sniper training, according to the lawsuit.

Expanding training would expose residents to “high-decibel training noise, permanent loss of 15 percent of the island’s prime farmland soils, destruction of cultural and historic sites, and severe restrictions on access to traditional fishing grounds, cultural sites and recreational beaches,” the lawsuit says.

“When the Northern Marianas agreed to remain part of the United States, destroying the northern two-thirds of our island with live-fire training and bombing was never part of the deal,” Florine Hofschneider of the Tinian Women’s Association said in a

statement. “We refuse to accept the Navy’s plans to subject our children to nearly constant bombardment.”

Pagan, meanwhile, would become a “militarized wasteland,” attorneys said.

The training would destroy native forests, coral reefs and wildlife on the remote volcanic island. And the indigenous Chamorro and Refaluwasch families, who once called Pagan home, would be prevented from returning, attorneys said. “I spent many happy years of my childhood growing up on Pagan,” Cinta Kaipat of PaganWatch, one of the groups suing, said in a statement.

Kaipat said she has family members who were there when the volcano erupted in 1981 and had to flee. AP

Hong Kong has served for decades as a clearing house for information about sensitive mainland topics, and publishers once considered themselves beyond Beijing’s reach.

But the free-wheeling scene has been chilled by a series of run-ins with mainland authorities in the past year, including the disappearance of the booksellers from the Causeway Bay firm Mighty Current.

Publishers at an annual Hong Kong book fair, the largest of its kind in Asia, said this month that printers and distributors were increasingly unwilling to handle sensitive titles for fear of political repercussions.

The booksellers went missing one after the other, only to turn up months later under the control of mainland Chinese authorities.

Four of the men have been released and a fifth is still detained. The Independent Commenters Association and the Hong Kong Journalists Association voiced concern in a joint statement and said Beijing has selectively targeted Wang and Guo, as well as Mighty Current and a third publisher called Morning Bell Press, to “clean the origin” of mainland political gossip in Hong Kong.

The groups urged mainland authorities to “respect the rule of law and the principal of ‘one country two systems,’”the agreement that outlines the former British colony’s relationship with Beijing. AP

Sanders loyalists warn of party split after Clinton nomination

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H I L A DEL PH I A — B e r n ie Sanders loyalists warned that the Democratic Party could rupture over the nomination of Hillary Clinton after a volatile night that saw a large group of Sanders delegates and supporters exit the party’s national convention to stage a sit-in at a nearby media tent.

They rejected Sanders’s call for unity even after the Vermont senator took the symbolic step of declaring Clinton the winner of the state-by-state delegate count inside the convention in Philadelphia. “I suspect we are witnessing an event that will fundamentally change American politics,” said Cory James, 22, a college student from Flint, Michigan, who expects the Democratic Party to break apart over Clinton’s victory.

Thousands of activists have taken to the streets during the convention this week to voice support for Sanders, a liberal US senator, and his progressive agenda. The “Bernie or bust” brigades that have marched across the sun-warped city threatened to disrupt Clinton’s moment as the first woman to be nominated for president by a major US political party.

“We all have this unrealistic dream that democracy is alive in America,” said Debra Dilks, of Boonville, Missouri, who spoke as a protest broke up near Philadelphia’s City Hall.

She said she wasn’t sure she would even vote in November.

“Hillary didn’t get the nomination. The nomination was stolen,” Dilks said. At the media tent protest, some had their mouths taped shut, while a few others spontaneously sang, “This land is our land.”

They said they were holding a peaceful protest to complain about being shut out by the Democratic Party.

In the streets outside, Sanders supporters who had spent the day protesting began facing off with police. They started scaling 8-foot walls that blocked off the secure zone around the arena parking lot. The police and the Secret Service immediately arrested four protesters, who will be charged with entering a restricted area. They’re scheduled to appear in court on Wednesday.

Protests continued into the night as Sanders supporters and an antipolice brutality group joined together. Later, another protester set an Israeli flag on fire as people chanted, “long live the intifada.” AP

The World BusinessMirror

news@businessmirror.com.ph

Thursday, July 28, 2016

A9

briefs Officer had on-duty sex nearly 100 times HUDSON, Wisconsin—A Wisconsin police officer resigned after an internal investigation found he had sex nearly 100 times on duty. Hudson Police Chief Marty Jensen confirmed on Tuesday that Officer John Worden stepped down in May. The Hudson Star-Observer newspaper first reported on Worden’s resignation, citing documents obtained from the police through a public records request.

The newspaper reported a woman filed a complaint with the police in April.

The woman reported having sex with Worden in or outside of his police SUV or at her home. The newspaper quoted Worden as saying he “screwed up.” AP

Brazil slum residents refuse to move into housing complex RIO DE JANEIRO—Residents of a Rio de Janeiro shantytown that was demolished earlier this year to make room for the Olympic Park have refused to move into the housing project the municipal government built for them.

Vila Autodromo was once home to around 700 families. Most left the city or accepted offers of compensation or resettlement in a nearby housing complex. But 20 families had refused to move out and a new housing project was built for them. AP

Satoshi Uematsu, the suspect of Tuesday’s knife attack at a home for the mentally disabled, sits inside a police van as he leaves a police station in Sagamihara, outside Tokyo, to be sent to prosecutors on July 27. The deadliest mass killing in Japan in the post-World War II era raised questions about whether Japan’s reputation as one of the safest countries in the world is creating a false sense of security. AP

Police send suspect in Japan stabbing spree to prosecutors

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AGAMIHARA, Japan—The suspect in a mass stabbing attack that left 19 people dead at a facility for the mentally disabled in Japan was being transferred on Wednesday from a local police station to the prosecutor’s office in Yokohama.

His head and shoulders covered with a blue jacket, 26-year-old Satoshi Uematsu was led out of a police station in Sagamihara City and into the back of an unmarked white van with emergency lights on top. Photographers and video journalists swarmed the van as it pulled away.

Uematsu had been held at the police station all day and overnight after turning himself in about two hours after Tuesday’s predawn attack. He had earlier delivered a letter to Parliament outlining the bloody plan and saying all disabled people should be put to death.

Kanagawa prefectural authorities said Uematsu had left dead or injured nearly a third of the almost 150 patients at the facility in a matter of 40 minutes. It is Japan’s deadliest mass killing in decades. The fire department said 25 were wounded, 20 of them seriously.

Security camera footage played on TV news programs showed a man driving up in a black car and carrying several knives to the Tsukui Yamayuri-en facility in Sagamihara, 50 kilometers west of Tokyo. The man broke in by shattering a window at 2:10 a.m., according to a prefectural health official, and then set about slashing the patients’ throats.

Sagamihara fire department official Kunio Takano said the attacker killed 10 women and nine men. The youngest was 19, the oldest 70.

Details of the attack, including whether the victims were asleep or, otherwise, helpless, were not immediately known. Kanagawa prefecture welfare division official Tatsuhisa Hirosue said many details weren’t clear.

Uematsu had worked at Tsukui Yamayuri-en, which means mountain lily garden, from 2012 until February, when he was let go. He knew the staffing would be down to just a handful in the wee hours of the morning, Japanese media reports said.

The facility employs more than 200 people, including part timers, with nine of them working the night of the attack, Hirosue said. All those killed were patients.

“They were working at night and were questioned by the police after witnessing graphic violence, making them a little emotionally unstable now,” he said.

In February Uematsu tried to hand deliver a letter to Parliament’s lower house speaker that revealed his dark turmoil. It demanded that all disabled people be put to death through “a world that allows for mercy killing,” Kyodo news agency and TBS TV reported. The Parliament office also confirmed the letter.

Uematsu boasted in the letter that he had the ability to kill 470 disabled people in what he called was “a revolution,” and outlined an attack on two facilities, after which he said he will turn himself in. He also asked he be judged innocent on grounds of insanity, be given ¥500 million ($5 million) in aid and plastic surgery so he could lead a normal life afterward.

“My reasoning is that I may be able to revitalize the world economy and I thought it may be possible to prevent World War III,” the letter says.

The letter was delivered before Uematsu’s last day of work at the facility, but it was unclear whether the letter played a role in his firing, or even if his superiors had known about it.

The letter included Uematsu’s name, address and telephone number, and reports of his threats were relayed to local police where Uematsu lived, Kyodo said.

Kanagawa Gov. Yuji Kuroiwa apologized for having failed to act on the warning signs.

Some people in the area said they were shocked that Uematsu is accused, and described him as polite and upstanding.

Akihiro Hasegawa, who lived next door to Uematsu, said he heard Uematsu had gotten in trouble with the facility, initially over sporting a tattoo, often frowned upon in mainstream Japanese society because of its association with criminal groups.

“He was just an ordinary young fellow,” he said.

Mass killings are rare in Japan.

Because of the country’s extremely strict gun-control laws, any attacker usually resorts to stabbings. In 2008 seven people were killed by a man who slammed a truck into a crowd of people in central Tokyo’s Akihabara electronics district and then stabbed passers-by.

In 2001 a man killed eight children and injured 13 others in a knife attack at an elementary school in the city of Osaka. The incident shocked Japan and led to increased security at schools.

This month a man stabbed four people at a library in northeastern Japan, allegedly over their mishandling of his questions. No one was killed. AP

Car bomb in Syria kills 1, wounds 50–state TV

Japan PM bares plan to pump up sluggish growth via stimulus

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OKYO—Japanese Prime Minister Shinzo Abe announced plans on Wednesday for a fresh barrage of economic stimulus to help revive stalling growth.

Speaking in the southern city of Fukuoka, Abe put the scale of the extra spending at more than ¥28 trillion ($265 billion).

That would be nearly 6 percent of Japan’s GDP. But analysts said they believed much of the money was already in the pipeline, and the money would be spread out over multiple years, diluting its impact.

The proposed package is due to be approved by the Cabinet on August 2, the Kyodo news service reported.

It would then be included in a supplementary budget for consideration by the parliament’s extraordinary session in September.

“The new economic package needs to be something that would bolster domestic demand and ensure a trajectory toward economic recovery,” Abe said.

Chief Cabinet Secretary Yoshihide Suga told reporters in a routine briefing on Wednesday that the ruling party and its coalition partner the Komeito were still haggling over details of the plan.

He said raising the minimum wage by at least ¥20 (about 19 cents) an hour is another key aim.

“Raising the minimum wage and encouraging more consumer spending is extremely important and we will work hard to achieve that,” Suga said.

Japan’s economy, the world’s third largest, has stagnated for years, and massive monetary and government stimulus have, so far, failed to jolt it into a sustained recovery.

Abe took office in late 2012 vowing to “bring Japan back,” and has made some progress toward his goal of higher inflation and faster growth. But the aging and shrinking of the Japanese population has discouraged companies from investing much in the home market, and wages have not risen significantly enough to drive a spending boom, despite a very tight labor market.

Among other measures, Abe is proposing improved wages for childcare and elder care workers,

$265B

The amount that Prime Minister Shinzo Abe said government would pump into the sluggish Japanese economy introduction of needs-based scholarships for college students and reducing the number of years workers are employed that are required to earn pensions.

A large share of the spending will go to improving infrastructure, such as expanding ports to accommodate ultra-large ships and accelerating a decades-long high-speed maglev train project.

Campaigning for a parliamentary election held earlier this month, Abe promised fresh help for the economy, and ordered his economy minister, Nobuteru Ishihara, to draw up the package.

Earlier reports put the size of the package as low as ¥6 trillion (about $57 billion).

Economists say the Bank of Japan also will likely expand monetary stimulus at a policy meeting that begins on Thursday.

“The Abe administration continues to highlight the importance of cooperation with the Bank of Japan for a fiscal stimulus package,” Alex Wijaya of CMC Markets said in a commentary. AP

Gang members indicted in Chicago area, Indiana

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HICAGO—Dozens of members of the Latin Kings street gang in the Chicago area and northern Indiana have been arrested on charges of a federal racketeering conspiracy that included arson, beatings, extortion, witness tampering and the attempted murder of a police officer, according to indictments unsealed on Tuesday.

Those indicted included leaders, treasurers and enforcers of lucrative Latin

Kings chapters. Law enforcement officials told reporters at a news conference in Chicago that the arrests are a blow to the “Almighty Latin King Nation,” whose membership extends nationwide.

Two indictments out of Chicago led to charges against 36 purported gang members and associates, though two defendants didn’t face the conspiracy count.

A related indictment out of Hammond, Indiana, led to charges against an additional

26 people. Only a few of the named defendants eluded arrest, officials said.

Chicago-based US Attorney Zachary Fardon said the Latin Kings have helped fuel persistent violence in Chicago, noting how the crime syndicate’s top brass issued standing orders to kill rivals on sight. “[These] cases are about one thing: violence...the type of violence that plagues our communities,” he said. AP

BEIRUT—Syria’s state TV says a car bomb has exploded in a predominantly Kurdish town in northern Syria, killing at least one person and wounding 50 people.

The TV says the car blew up on the western edge of the town of Qamishli, near the Turkish border on Wednesday.

The Britain-based Syrian Observatory for Human Rights says the explosion targeted a center of the local Kurdish police and a nearby government building. AP

Three wounded in shooting at Armenian police station YEREVAN, Armenia—A spokesman for Armenia’s police says two of the gunmen who have been holding a police station in the capital for more than a week have surrendered after an exchange of gunfire.

The police Spokesman Ashot Arahonyan says on Facebook that the gunfire began before dawn on Wednesday. He said one police officer and two gunmen were wounded and taken to hospital. Two other gunmen gave themselves up, he said. AP

Israeli military kills suspect behind ambush JERUSALEM—The Israeli military says it has tracked down a group of suspects behind a deadly ambush of a family car in the West Bank earlier this month and killed the man who pulled the trigger in that attack.

The July 1 attack killed Miki Mark, a 48-year-old father of 10 children, and wounded his wife and two teenage children. The military said on Wednesday that, after almost a month of pursuing the perpetrators, troops closed in on a Hamas cell behind the ambush. AP

Country duo respond to police comments NASHVILLE, Tennessee—Country duo Florida Georgia Line said they meant no disrespect to the police when they requested that armed officers not be allowed backstage during music festivals on Friday and Saturday. Kim Blevins, general manager for the Country Thunder Music Festival in Twin Lakes, Wisconsin, said some people aired complaints on Facebook about the band’s request for no armed officers for their Friday set. AP

Honduras reports eight babies born with Zika-related defects MEXICO CITY—Honduras’s health minister says eight babies with severe birth defects linked to the Zika virus have been born in the Central American country. Dr. Yolani Batres said on Tuesday at a news conference that five of the babies with microcephaly were born this week. Batres says there are 493 known cases of pregnant women who have been infected with the Zika virus in Honduras. Zika is mostly spread by mosquitoes, but cases of sexual transmission have also occurred. AP

A10 Thursday, July 28, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Duterte’s formula to get lasting peace

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yriad comments came out on social media and the trimedia, after President Duterte delivered his first State of the Nation Address on Monday. Most of these are positive observations about the President, who promised to bring change to the country. To a jaded observer, however, the most basic thing stood out: The statesman in Mr. Duterte showed up. Nobody doubted him when he assured that “this will be a clean government,” and that he knows what ails the country; what’s keeping it from joining the ranks of progressive countries in the world.

We cannot improve on his pronouncements: “All of us want peace, not the peace of the dead, but the peace of the living. We express our willingness and readiness to go to the negotiating table, and yet we load our guns, fix our sights, pull the trigger. It is both ironic and tragic—and it is endless. While we extol the bravery and heroism of our soldiers—kayo, the rebels—do the same for the members and fighters. What I see, instead, are the widows and the orphans.

And I feel their pain and grief. And no amount of cash assistance or the number of medals can compensate the loss of a human life. Sorrow cuts across every stratum of society. It cuts deeply, and the pain lasts forever.” And this presidential overture: “That is why, I reach out to you, to all of you today. To our Muslim brothers, let us end the centuries of mistrust and warfare. To the CPPNPA-NDFP [Communist Party of the Philippines-New People’s Army-National Democratic Front of the Philippines], let us end these decades of ambuscades and skirmishes. We are going nowhere. And it is getting bloodier by the day.”

The statesman who knows the formula to attain enduring peace upped the ante with a bold pronouncement of a unilateral cease-fire with the CPPNPA-NDFP “to immediately stop violence on the ground, restore peace in the communities, and provide an enabling environment conducive to the resumption of the peace negotiations.” It was a stroke of genius that could only build confidence on the upcoming resumption of peace talks with the CPPNPA-NDFP. The unilateral cease-fire was powerful in that it binds the other party to reciprocate and show the same kind of commitment to lasting peace and reconciliation. In offering truce, Mr. Duterte said the country would not get anything out of the continuous armed confrontation with the communist rebels, which has claimed about 30,000 lives since the 1960s.

Jose Maria C. Sison, founder of the CPP and chief political consultant of the NDFP, walked through the door of President Duterte’s expectation when he welcomed the President’s announcement of a unilateral cease-fire in the military’s counter-insurgency operations against the CPP’s New People’s Army. “The NDFP will issue a positive response,” he assured. We can’t ask for a more auspicious sign that could foretell the outcome of the resumption of peace talks between the government and the communist group on August 20 in Oslo, Norway.

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Who needs to be ‘better’ for a better Philippines?

John Mangun

OUTSIDE THE BOX

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ne slogan that cropped up during the election season was something along the lines of “Better Filipinos for a Better Philippines”. This started as a call for better education for the youth, so that they will be better prepared to face the future challenges and solve the nation’s problems.

But then that phrase showed up on social media, and was passed back and forth as a reason to vote for one presidential candidate or another. And every time I heard that used in a political sense, I became angry.

The reason for my anger is that the implication was that the problems that the Philippines confronts every day are somehow the fault of Filipinos. Filipinos are not yet “better” enough, and that is why

congested airports cause threehour flight delays. It is the Filipino commuters’ fault that the light-rail trains can barely stay on the track when they run at all. I guess, it is your fault that the electricity supply is unreliable and expensive.

The oath of office for the President of the Philippines reads in part… “preserve and defend its Constitution, execute its laws, do justice to every man, and consecrate myself to the service of the nation.” The

The buck stops here Siegfred Bueno Mison, Esq.

THE PATRIOT

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n action, right or wrong, is much better than no action at all. Fearing consequences and possible liabilities, leaders at times fail to take action unless they are assured of success.

They forget that there is no such thing as a failsafe plan. But who is to blame when things go wrong? Former US President Harry Truman popularized the phrase “the buck stops here”, which he stated when he was once asked about accountability and responsibility.

Exhibiting this principle of accountability, Transportation Secretary Arthur P. Tugade recently showed true grit and strength of character when he took the blame for a major decision, which caused major inconvenience and difficulty for airline passengers. When asked to comment about the decision to temporarily close the Ninoy Aquino International Airport runway in order to conduct emergency repairs that led to multiple cancellations and diversion of flights from Manila to Clark, Tugade simply said: “Please accept my apologies for those things we didn’t expect to happen. To the public, I’m sorry. I’m sorry to the President, because it happened during my 19 days of watch. I’m assuming 100-percent

responsibility, because it happened during my watch.” Whoa! Some people saw the secretary’s owning up to such “error” in judgment as political suicide. After all, naysayers are quick to say that an apology is tantamount to an admission of guilt, which, in turn, likely exposes one to liability.

Servant leaders accept what their critics say and apologize in case of damage, injury, or inconvenience, regardless of the absence of any fault or negligence on their part. It has been said that when you apologize without offering any excuse, you not only show empathy but also humility. For some in public service, however, it is not that easy to say sorry.

Remember the very public apology of President Gloria Macapagal-

Administrative Code of 1987 says all public officials and employees must take an oath stating that they “will well and faithfully discharge to the best of his ability the duties of the office or position upon which he is about to enter.”

Filipinos are told that they are making the wrong choices when they cast their ballots. If only they had voted for this person, instead of that one. That is like getting food poisoning from eating the fast-food spaghetti and being told by the manager, “Well, you should have ordered the hamburger.”

Every man and woman of intelligence and experience to qualify for and is elected to office who then adheres to his or her oath of office should be able to make for a better Philippines. But that is not the case.

The problems of the nation are always the same—inadequate public services, corruption in government and a struggle for economic opportunities for all.

The people are beginning to wake up to the fact that it is not

whether they order the “spaghetti” or the “hamburger” that matters.

Maybe it is that “fast food kills”.

The past election, I believe, was an attempt to make changes to the political elite and political establishment. Yet, as the new session of the House of Representatives begins, immediately there is a fight on the apparently well-established rules of how a representative is chosen as Minority Leader.

The situation shows members of the political elite fighting for power, not doing their sworn duty to make for a better Philippines.

The longer the people are made fools of by this sort of traditional politics, the more their anger will grow and the more likelihood for genuine “People Power” that the political class will not be able to control.

Arroyo for the “Hello, Garci” incident? How about the nonverbal apology of President Benigno S. Aquino III for the Mamasapano SAF44 incident? In the case of Tugade, he chose the path of swift, open and direct apology to the traveling public, not because he was wrong, but perhaps because he wanted to assume accountability and, at the same time, show empathy.

A servant leader will always accept responsibility and, at the same time, by their example encourage others to exercise responsibility and accountability for their actions. In a meeting with airline executives and tourism officials last month, I remember President Duterte telling the group, “Bahala na si Tugade sa inyo [Tugade will take care of you].” This kind of trust and empowerment, albeit casually done, allowed Tugade to be accountable not only for his own actions but also for the actions of others under his supervision and authority. Legally speaking, as the alter ego of the President, Tugade is accountable to the President, to the Republic and, ultimately, to the Filipino people. So, when that Monday mess in the Naia and Clark occurred, Tugade, in his own words, simply said: “The buck stops here.”

He clearly showed us how to man up, take responsibility, and stop shifting the blame to other people.

We should be mindful that a

servant is always accountable to his master. Six years ago, in his very first State of the Nation Address, President Aquino articulated the extent of the accountability of public officers by referring to the Filipino people as “Kayo ang Boss ko”. It was the President’s way to make all government personnel accountable to the people they swore to serve.

A few weeks back, Tugade took an extra and bolder step during a business forum in Davao City, when he boldly challenged the private sector—“You expect us not to be corrupt, do not corrupt us!” Inasmuch as the present crop of government officials are expected not to be corrupt, Tugade challenged his “bosses” to help them (him and the rest of the Cabinet members present) not to be corrupt. Such declaration, in effect, introduced the concept of shared accountability, that is, whether you are in government or in the private sector, all of us are accountable for what happens to ourselves and to our country.

We sink or swim with each other.

To end or, at least, minimize corruption takes team effort. President Duterte alone or even with his Cabinet cannot do it on their own. It is high time for all of us Filipinos to be accountable for all of our actions and inactions.

E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com.

Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.

For questions and comments, e-mail me at sbmison@gmail.com.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Power management left out in Duterte’s Sona

Life wisdom Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

Val A. Villanueva

Businesswise

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hat was advertised to be the shortest State of the Nation Address (Sona) turned out to be the longest ever to be delivered in the august halls of Congress— 100 minutes to be exact.

On Monday President Duterte laid out where (and how) he would lead the country to.

The Sona is traditionally the vehicle where a sitting president communicates his blueprint on the country’s current social, political and economic condition, and how he plans to move the nation forward under his stewardship.

Duterte’s first Sona—however winding and peppered with offtangent comments—outlines three main points: his war against drugs, the push for federalism and a promise of peace. But what energizes the business sector more is his direction to continue and improve on the previous administration’s macroeconomic policies, an admission that his predecessor did well in managing the country’s coffers.

Mr. Duterte’s vow to cut income and corporate taxes, and its implications for revenue collection, was also warmly received by some economists. I, too, believe that it is the right thing to do. The move is expected to spur consumption, business and investment activities.

A low tax regime enables companies and individuals to raise more money, which will allow the government to march on with its plans. It can spur greater activity that can result to more revenues, although not necessarily from taxes. It’s now up to the Bureau of Internal Revenue (BIR) to device creative ways on how to cover some of the expected revenue losses. Nonetheless, this measure is a strong indication that President Duterte is serious in creating jobs by stimulating business activities.

Francis Chua, chairman of the International Chamber of Commerce of the Philippines (ICCP) and chairman emeritus of the Philippine Chamber of Commerce and Industry (PCCI), was impressed with the President’s openness: notably, his directive to condense business registration to only three days, and the relaxation of the economic limitations in the Constitution to allow more foreign investments into the country.

“The President has again reiterated that ease of doing business [is] mandatory; [and that there is a need to reduce] personal- and corporateincome tax [and sustain a] clean government. All of these are music to the business sector’s ears,” Chua was quoted as saying.

T he Makati Business Club (MBC), Mr. Duterte’s critic during the presidential campaign, extolled the President’s “all-inclusive” Sona.

“We believe that the Sona was very comprehensive and was able to detail a clear vision for the next few years. He was able to set a strong tone from the top that, while there will be a strong stance against criminality and drugs, abuse of authority will not be tolerated,” MBC Executive Director Peter Angelo Perfecto said in a statement.

The MBC welcomed the inclusion in the Sona of priorities critical to doing business and furthering the country’s competitiveness, including significant reduction in red tape, tax reform, massive infrastructure investments and improvement of current macroeconomic policies.

Expressing great appreciation for the adoption of the recommendations from the “Sulong Pilipinas: Hakbang Tungo sa Kaunlaran,” the consultative workshop held recently by the government with the business community, the MBC said it looked forward to the continuation

of this process, which it hoped would be expanded to include civil society and other cause-oriented groups.

“The declaration of a unilateral cease-fire and the call to correct historical injustices is a very bold move, and sends a strong signal that the government is serious about ensuring permanent and lasting peace,” Perfecto added. “Significantly, he was able to effectively show that he cares for improving the people’s welfare, whether in the small aspects of eliminating long lines, extending the validity of licenses and passports and opening communication outlets for Muslims and indigenous peoples.”

What this corner found lacking, however, is the administration’s silence on how it will tackle the country’s energy sector.

A booming economy needs sufficient power, especially in the context of a power shortage that experts foresee in the near future.

These experts warn that “brownouts,” or the lowering of operating voltage to prevent a total blackout, may be a regular occurrence if the government fails to address the looming power shortage. Such energy-conservation measures can cause damages to some electrical devices and is not a practical longterm solution to energy problems.

We have seen some ineffective solutions to this problem in the past, such as power companies with an energy shortage buying excess power from other regions. But this works only as long as there are companies with extra power. Unfortunately, a power surplus in Laguna does not help a power shortage in Baguio. Going solar? Wind? The major problem with these approaches is that both are dependent on the weather. The sun does not always shine when electrical demands are high, and we cannot always expect windy weather.

We are still many years away from being able to enjoy the largescale consumption of these alternative energy sources. Another potential solution is to increase our use of petroleum at a higher level of efficiency. However, this approach would only be practical if we decreased our petroleum usage in other areas, which is very unlikely.

Another strategy involves the construction of more coal-fired power plants. Our electricity production would surely increase, and there is enough coal to last for 400 years.

However, coal adds radioactivity to the environment and releases toxic sulphur and nitrogen oxide gases into the air. Additionally, the coal reserves that are currently being mined are high in sulphur content, making them that much more harmful to the environment.

Experts warn that the prospect of power outages is real, leaving us with few options to cope with the threat.

It takes more than five years to build a power plant with enough base loads to provide 7,000 megawatts of power to fill in the projected power gap.

The Duterte administration should focus more on what happens if the Philippines can’t meet the projected power shortfall. The scenario of power outages should not concern only ordinary people, but also those engaged in big or small businesses.

The cascading effects—business slowdown, unemployment and inflation, among others—are too serious to simply ignore.

For comments and suggestions, e-mail me at mvala.v@gmail.com

‘T

each us...that we may gain wisdom of heart” (Psalm 90:3-4, 5-6, 12-13, 14, 17). Anyone crossing the threshold of death must leave all possessions behind and go into eternity hopefully rich in what matters to God (Luke 12:13-21).

The wisdom of heart The passing nature of our human existence is underlined by the fact that we turn back to dust where we came from. But it also signifies that we are invited and awaited by the Creator to turn back to Him at the end of this life. So, in the final analysis, it matters little how long one’s life may have been: We all return to dust, and for God, “a thousand years are like one day” (2 Peter 3:8) that passes away with a watch in the night and fades into the past as yesterday. Life is swiftly done like a dream terminated by waking up, or a grass springing up and flourishing in the morning, but wilted and withered down in the evening.

The psalm asks that the people be given wisdom; only God can provide the wisdom that lets anyone to make sense of human existence, short as it is and burdened by suffering and problems. “Numbering one’s days aright” means, however, short those days and years may be, if marked by a righteous life, they spell a meaningful existence, a life in wisdom. To be able to return to God, the psalm pleads with God to return to His people and have compassion on His servants. How much longer must they suffer chastisement? In God-given wisdom, may the people reform their ways, then surely relief would come. May the Lord fill His people with kindness and gladness

Thursday, July 28, 2016 A11

as in a new dawn that begins a new life for them. Their deliverance will be seen as proof of divine mercy, blessing their work and bringing them prosperity.

The fool’s fatal mistake

Asked to arbitrate a dispute about inheritance, Jesus identifies the real issue to be greed. In this connection, He teaches the important lesson that life can be wasted when spent merely in amassing possessions. The rich man is called a “fool” because he has not learned to be wise in life. He is censured, not because he is rich or insensitive to the needs of others, but because of his greedy attitude.

He just wants more and more, and not even of what really matters. At the end of his life, the man is confronted with the futility of his life.

He has spent his life collecting possessions that do not last and that to him would be eventually useless. His possessions are passed on to somebody else, and he has no way to really control what happens to them.

It is, indeed, foolish to devote one’s life just collecting things of this world while neglecting the things that matter to God, to whom one must return at the end and account for everything. It is totally

Simplicity is for simpletons Teddy Locsin Jr.

Free fire Continued from A1

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he best proof of the depth and complexity of your thinking is not the simplicity but the clarity with which you express depth and complexity. Simplicity is not clarity. What we really want is clarity.

Deep reading cuts into your soul and shapes you like real-life experiences. Few of us have deep experiences but we can all read about them and, thereby, experience them; in my view better—with the wisdom of those who actually lived them and

the luxury of reflection.

We may never meet wise people; most of them are dead; but we can converse with them by reading their deep and difficult writings. That is the kind of reading that changes you.

But if you read only simple stuff,

it will bring immediate pleasure; but only a passing and shallow understanding of our complex world.

I am saying this because we now have a President who will influence what we read and, therefore, how we think. His partiality for brevity and clarity might be mistaken for superficiality and simplemindedness.

This President is the farthest from that. He has lived through the most tumultuous times of our country. He has heard the tattered banners of opposing camps beating in the hurricane winds of our politics and conflicts.

He says little, but speaks volumes.

Taken in isolation, his surprisingly complicated words shout of the sufferings of our people, and speak faintly of the hopes they are giving up. He alludes to imperialism, capitalism, anarchy and order, judicial incapacity and extrajudicial solutions, and democracy that is a parody of

unwise of heart to dedicate oneself in amassing earthly wealth and be bereft of what truly insures the fullness of life that only God can give.

The fool holds himself to be wise, but only in his own eyes (Proverbs 12:15). He is only constant in his own sin, and lacks the fear of God that is the beginning of wisdom.

In fact, “Fools say in their hearts, ‘There is no God’” (Psalm 14:1), who judges at the end what has been done with the life given to each one.

Alálaong bagá, as the psalmist has said, Lord “teach us to number our days aright, that we may gain wisdom of heart”—living our transitory human existence well under the gracious care of God, so that we can return to Him in a new, endless dawn when the evening of life has come. Already now we must worship and serve God alone, and not the vanity of the power and the glory of the world (cf. Luke 4:5-8). The choice has to be made; wisdom must be sought: The realization that only in union with God in His indispensable kindness can we sing for joy forever.

Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on dwIZ 882, or by audio-streaming on www.dwiz882.com.

itself. These words contain a history that baffles common understanding and frustrates the discovery, and the adoption, of effective solutions.

We have a thinking President. Let us make the effort to think as hard as he does.

Make no mistake. Whether he has read the situation rightly or wrongly, he will proceed to act on the conclusions he has arrived at with much hard thought and deep reflection.

So he will not stop, unless we can give him a compelling reason to stop, and also a better way to achieve the good ends he seeks.

He is old. I sense he is tired. But he is resolved that, while there is breath in him, not just to talk change like past presidents, but make change.

And die in the trying.

If we do not take advantage of this man’s leadership, we shall miss our last chance of real change.

Permanent establishment, but no permanent rules Reynaldo M. Prudenciado Jr.

Tax Law for Business

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or income-taxation purposes, a foreign corporation may either be treated as resident or a nonresident foreign corporation.

A foreign corporation that is engaged in trade or business within the Philippines is referred to as resident foreign corporation. On the other hand, a nonresident foreign corporation applies to a foreign corporation not engaged in trade or business within the Philippines.

The sources of taxable income in the Philippines for resident and nonresident foreign corporations are essentially the same. Both are subject to Philippine income taxes only with respect to income derived from Philippine sources. But one of the significant differences lies in the taxable base and the payment of taxes. A resident foreign corporation is subject to income tax based on its taxable income, which is the net taxable income. It is required to file the usual quarterly and annual incometax returns and pay the taxes based on such returns. A nonresident foreign corporation, on the other hand, is subject to income tax based on its gross income. It is not required to file income-tax returns and its taxes are paid through the final withholding tax system.

While that is the basic rule based on domestic laws, the taxation of a foreign entity may be changed if it is a resident of a country of which the Philippines has an existing double-taxation agreement, or what is

commonly referred to as tax treaty.

Based on these treaties, a foreign entity that has a permanent establishment (PE) in the Philippines shall be taxable in the Philippines.

On the other hand, a foreign entity that does not have PE in the Philippines may not be subject to Philippine income tax.

What seems to be unsettled, though, is the tax-compliance obligation by both the PE and the payor in relation to the income of the PE. There are decisions by the Tax Court holding that a PE should still be treated as nonresident foreign corporation for income-taxation purposes, in the absence of registration. As such, income taxes due on their income derived from Philippine sources shall still be subject to the final withholding taxes. The responsibility, therefore, in paying the taxes rests with the customer/ payor, as a withholding agent.

The Bureau of Internal Revenue (BIR) had also issued a number of rulings confirming that payment to

What seems to be unsettled, though, is the tax-compliance obligation by both the PE and the payor in relation to the income of the PE. There are decisions by the Tax Court holding that a PE should still be treated as nonresident foreign corporation for income-taxation purposes, in the absence of registration.

a foreign corporation with a PE in the Philippines is subject to the final withholding tax. In other words, the fact that a foreign corporation has a PE in the Philippines does not necessarily make the foreign corporation a resident foreign corporation. This notwithstanding, there are also rulings by the BIR which held that a foreign corporation that has created a PE in the Philippines is treated as a foreign corporation engaged in trade or business in the Philippines, otherwise known as a resident foreign corporation. In a more recent ruling (ITAD Ruling 007-16, dated March 4) which found the foreign entity to have a PE, while the BIR did not mention that the PE shall be considered a resident foreign corporation, it stated that that entity is subject to income tax at the rate of 30 percent under Section 28(a)(1) of the Tax Code. This provision apparently pertains to a resident foreign corporation. In essence, the foreign corporation was treated as a resident foreign corporation.

There was, however, no pronouncement as to how the resident foreign entity/PE should register to comply with its income tax

obligation. Instead, the BIR required the subcontractor to file the quarterly and annual income-tax returns of the foreign entity. The apparent incompleteness or differences in the issuances/rulings is due to the fact that there is really no specific rule governing the registration and compliance by a PE. So it is interpreted on a case-to-case basis, depending on the facts and issues that are requested or brought before the tax authorities or the courts.

In some jurisdictions, the rules are quite clear for the treatment of PEs. We do not have clear rules in the Philippines. We hope our new tax administrators will include that in their agenda. Clarifications should include the withholding-tax obligations of the payor on the income payment to the PE. Likewise, the registration requirements and compliance obligations for PEs, not only for income taxes but also for value-added tax, should be made clear. Apparently, in the rulings where the BIR considered the foreign entity to be a PE and, therefore, liable to file and pay income tax, the VAT was still required to be paid through withholding by the payor.

The author is a senior associate of Du-Baladad and Associates Law Offices (BDB Law), a memberfirm of World Tax Services.

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 email the author at reynaldo.prudenciado@bdblaw. com.ph or call 403-2001 local 380.